TIDMINVU
RNS Number : 4116J
Invu plc
30 June 2011
30 June 2010
Invu plc
Preliminary Results for the Year Ended 31 January 2011
Invu plc ("Invu" or the "Company"), (INVU.L) the document
management software provider, announces its
preliminary results for the year ended 31 January 2011.
Key Financial Highlights
-- Revenues of GBP2.5million (2010: GBP2.2million)
-- Loss before tax of GBP0.7million (2010: loss:
GBP4.5million)
-- Net Cash generation from operating activities GBP0.1 million
(2010: outflow: GBP2.7million)
Operational Highlights
-- IRIS OEM agreement
-- Significant contracts wins in the Housing Association
market
-- Continuing product innovation, including email management and
web approval
Subsequent events
-- Proposed loan note conversion and subscription subject to
shareholder approval
Daniel Goldman, Non Executive Chairman, said:
"This year we have begun to see the benefits of the changes we
started in 2009, with significant improvements in the profit and
loss and cash flow. The loan note conversion, proposed subsequent
to the year end, will significantly strengthen our balance sheet
and provide the business with a sound financial base going
forward."
Colin Gallick, Chief Executive, said:
"A focus on our core markets, improvement of our distribution
channel and a commitment to market driven innovation, has resulted
in a significant productivity improvement in the business. We look
to continue this momentum in the new financial year."
Enquiries:
Invu plc 01604 859893
Colin Gallick, CEO
Ian Smith, CFO
Canaccord Genuity 020 7050 6500
Simon Bridges, Kit Stephenson
About Invu
Invu [LSE, AIM, Symbol: INVU] develops software that
incorporates document management, content management, workflow,
automation and collaboration specialising in solutions for the
mid-market and smaller businesses.
Also known as the paperless office, Invu typically gives a
return on investment in under six months, allowing companies to see
efficiency savings in terms of both money and time.
Invu's Open Search integration allows SharePoint users to
utilise fully the benefits of WSS or MOSS whilst retaining the
functions of specialist document and content management.
Invu's solutions enable automated scan, capture and management,
processing and output transformation. Invu also integrates with all
major accounting systems including ERP and CRM systems.
For more information about Invu: www.invu.net
Chairman's statement
This annual report shows significant progress has been made
towards the strategic priorities originally stated in the annual
report for the financial year ending 31 January 2009. These
priorities were identified as necessary to restore the Group to
profitability and positive cash flow as well as restoring
stakeholder confidence in the business through management changes,
good governance and adequate funding of the business.
The results for this financial year show significant
improvement, in both operating profit and operating cash flow, on
the last two years and represent substantial progress towards our
goal of rebuilding a growing business with sustainable
profitability and positive cash flow.
The Board recruited a new executive management team during the
last financial year and this year has seen their first full year in
place. They initiated significant change during the first few
months of their time in office and this year they have been focused
on delivering the benefits of those changes and preparing the
business for future growth.
The Board reorganised at the non executive level last year and
this year has been one of stability at main board level with the
focus on good practice and governance.
The best monitor of the health of the business is its operating
cash generation which is shown in the consolidated cash flow
statement as GBP0.1 million, a significant improvement on the
GBP2.7 million consumed in the previous year. This demonstrates the
ability of the business to fund itself at the current operating
level.
The balance sheet still includes significant gearing as a result
of the legacy of poor performance in previous years. The debt
holders at the financial year end included Tyne & Wear Holdings
Limited, Magpie Investments Limited and Cynthia Goldman who have
been identified in the annual report as related parties. The debt
at the financial year end also included an amount of GBP500,000 due
to certain Puma Venture Capital Trusts with a repayment date of 30
June 2011. This repayment date has subsequently been extended to 30
September 2011. The related parties have agreed, subject to the
approval of shareholders, to invest an additional GBP3,050,000 in
the company by way of non-voting A shares. This investment will
include conversion of the amounts due on their loans, including
interest as of 30 June 2011, amounting to GBP2,353,412, and a cash
payment of GBP696,588. The subscription monies will be used to
repay the amount due to Puma and to pay withholding taxes arising
on the deemed payment of interest and professional fees related to
the issue of the shares. The creation of the A shares, the
conversion and the subscription are subject to the approval of
shareholders which will be sought at a General Meeting to be held
on 29 July 2011. The loan repayment date for debt due to the
related parties has been extended to the date of the General
Meeting with any interest arising in respect of the period post 30
June 2011 not to be payable until 31 July 2013.
I would like to thank the management and employees for their
efforts this past year. They have allowed the company to progress
towards the goals of growth and profits, and along with our
business partners I look forward to another year of progress.
Daniel Goldman
Non Executive Chairman
29 June 2011
Chief Executive Officer's statement
Financial performance
I am pleased to report a full year trading performance with
stronger sales (up 13.2% to GBP2.5 million), stronger gross margins
(up from 52.0% to 80.7%), with lower administrative overheads (down
by 45.6% to GBP2.3m) and a much reduced operating loss position
(losses down to GBP0.3 million from GBP4.4 million).
I am particularly pleased to report that following our
(unaudited) reported operating loss of GBP0.37 million for the
first half of the year, we made a small operating profit in the
second half of the year of GBP0.05 million. These results are
supported by our operating cash generation which in the year was
GBP0.1m and in the second half GBP0.2 million (first half GBP0.1
million consumed).
We exit the year, having received no additional funding during
the year, with a cash balance of GBP0.5 million (last year GBP0.5
million).
Operations
During the year the business has been focused on what it does
best, the design, development and distribution of software that
enables customers to manage paper and electronic documents and
information, as well as business process workflow, in a simple and
effective way.
We have concentrated our efforts on our home market, small and
medium sized businesses, our most successful resellers, our
strongest verticals, and on delivering market driven
innovation.
Our market
We have carried out the great majority of our business in the
United Kingdom and have had a small amount of legacy revenue from
overseas, the majority of which arises from business relationships
established through our former Netherlands office.
In the coming year we will look to continue to develop our
business in the United Kingdom but where possible we will build on
strengths in existing overseas markets. We have as a result
appointed Kompro as our exclusive reseller in the Netherlands with
effect from March 2011 with a view to maintaining and growing our
business in the Netherlands.
Small and Medium sized businesses
Our software is designed to address the needs of small and
medium sized businesses.
We have set ourselves a goal to improve our mix towards the
larger companies in the small and medium sized business sector.
During the year we won deals at 217 customers (last year 297) and
saw our average deal size increase by fifty percent.
We have a significant customer base, having sold software to
more than 4,500 companies since the business started in 1997 with
1,850 of these entering into an InvuCare contract which allows them
software support and software assurance.
Reseller sales model
Our primary route to market is through our reseller channel.
Over the last two years we have reorganised this channel (a
reduction from 200 to 50 reseller partners was implemented in 2010)
and we now see the majority of our sales through our top 20
resellers (83% of sales).
Vertical Markets
Invu document management software can yield significant business
benefits to any business in any sector and consequently our
reliance on any particular sector is limited.
We have developed a strong vertical market in the accountancy
sector and this market has consistently represented more than 10%
of our new software sales over the last three years. On 30 April
2010, we announced a new white-label agreement with IRIS, the UK's
largest private software house. Under the agreement, IRIS provide
Invu's document management product to the UK accountants market as
an integrated offering under the IRIS brand. In the first eight
months of this agreement we have seen IRIS rise to be one of our
top 5 partners for the year.
During the year we have seen our most significant individual new
software sales to Housing Associations (including Seren and
Adactus) and this has become our second most important vertical
market sector, driven partially by the consolidation within the
sector, which affords opportunities for space saving when
organisations combine along with process improvements arising from
the use of electronic documents.
Delivering market-driven innovation
Towards the end of the financial year we introduced our latest
software release and this has made available a number of
innovations that respond to customer needs. These include;
Invu Email Manager which targets the concern many organisations
have about the loss of critical business information in email
correspondence. The software enables organisations to mitigate this
risk and to reclaim all appropriate emails as business assets. Rich
rules based functionality combined with direct Outlook client
feedback ensure that communications, including attachments are
securely captured and searchable within Invu Document
Management;
Invu Web Approval which targets cross-functional teams or remote
workers without full electronic document management access. This is
a web based software enabling individuals without access to the
premises based Invu Document Management software to keep up to date
with all tasks and maintain their part in an electronic approval
process.
Outlook
In the financial year to 31 January 2012 we intend to continue
to build on the stable base we have created during the year to 31
January 2011.
Colin Gallick
Chief Executive Officer
29 June 2011
Financial Review
Revenue has increased by 13.2% from GBP2.2 million to GBP2.5
million. Revenue comprises the sale of software and related
implementation and installation services and the sale of annual
software support contracts. The Group reported sales of software
and related services of GBP1.0 million. The revenue arising from
the sale of support contracts is recognised evenly over the life of
the contract and revenue was GBP1.5 million in the period. The key
performance metric for the sale of software support contracts is
the renewal rate which was 85% compared to 80% last year.
The gross profit has increased to GBP2.0 million from GBP1.1
million. This represents an improvement in the gross margin
percentage from 52.0% to 80.7%. This occurs because of a favourable
shift in the mix of revenues towards software, reduction in the
fixed cost (primarily headcount related) of supporting customers
and the one off costs incurred in the prior year related to the
write off of inventory.
Administrative expenses have reduced from GBP5.5 million to
GBP2.3 million. This is primarily the result of the cost reduction
started in the last financial year which carried some exceptional
cost in that year (GBP1.2 million) and resulted in a significant
decrease in the headcount. The average headcount was 25 compared to
53 last year with 27 (last year 30) employed at the end of the
year. The head count figures include 3 non-executive directors.
Finance costs were GBP0.3 million this year compared to GBP0.01
million last year. This increase arose because of the full year
impact of the interest burden on the debt taken on in the previous
year.
The tax charge is GBP0.1 million compared to a credit of GBP0.05
million last year. The charge represents the reversal of the
research and development tax credit claimed for the financial year
ending 31 January 2009 which has subsequently been rejected by Her
Majesty's Revenue and Customs.
The net loss of GBP0.7 million (last year loss GBP4.4 million)
results in a loss per share of 0.46 pence compared to a loss per
share of 3.24 pence in the previous year.
The cash consumption in the period was GBP0.018 million compared
to GBP1.1 million net cash surplus last year. No additional debt or
equity was raised during the year (last year GBP3.9 million).
Interest and hire purchase repayments amounted to GBP0.12 million
(last year GBP0.07 million). Investment in non-current assets was
GBP0.06 million (last year GBP0.22 million) of which GBP0.06
million (last year GBP0.2 million) represented capitalisation of
research and development costs.
The operating cash generation was GBP0.14 million compared to
GBP2.7 million consumed in the prior year. This arose from working
capital reduction of GBP0.17 million (last year GBP0.67 million)
and the loss adjusted for non cash items of GBP0.03 million
compared to GBP3.38 million last year.
The primary driver for working capital reduction in the year was
improved days sales outstanding of 70 days compared to 89 days in
the prior year. This arises due to the focus of sales on a smaller
number of higher quality resellers and improved sales
processes.
The loss adjusted for non cash items arises due to the improved
profit and loss position explained above combined with the impact
of depreciation and amortisation of GBP0.3 million which has
contributed significantly towards the reduction in the balance
sheet non-current assets from GBP0.58 million to GBP0.25
million.
The balance sheet shows a shareholders' deficit of GBP3.7million
(compared to GBP2.9 million last year) which is primarily funded by
borrowings of GBP2.7 million (GBP 2.7 million last year, of which
GBP2.6 million was shown as current borrowing at 31 January 2010
and then extended during this financial year to 30 June 2011). The
plan for repayment of the debt due for repayment on 30 June 2011 is
addressed in the Chairman's report.
Ian Smith
Finance Director
29 June 2011
INVU PLC
Consolidated Income Statement
For the year ended 31 January 2011
Notes 2011 2010
GBP'000 GBP'000
Revenue 2 2,488 2,198
Cost of sales (479) (1,054)
---------- ----------
Gross profit 2,009 1,144
Administration expenses (2,335) (4,290)
Exceptional items - (1,213)
-------------------------------- ---------- --------------- ---------------
Total administration
expenses (2,335) (5,503)
---------- ----------
Loss from operations (326) (4,359)
Finance costs (326) (136)
---------- ----------
Loss before income tax 2 (652) (4,495)
Income tax (charge)/credit 3 (97) 51
---------- ----------
Loss for the year
attributable to: 2
Equity holders of the
Company (749) (4,444)
Earnings per share
Basic (pence per share) 4 (0.46) (3.24)
---------- ----------
Diluted (pence per share) 4 (0.46) (3.24)
---------- ----------
INVU PLC
Statement of Comprehensive Income
For the year ended 31 January 2011
Notes 2011 2010
GBP'000 GBP'000
Loss for the year 2 (749) (4,444)
Other comprehensive income
Exchange differences on
translating foreign
operations - (1)
------------ ------------
Other comprehensive income
for the year (net of tax) - (1)
------------ ------------
Total comprehensive income
for the year attributable
to:
Equity holders of the
Company (749) (4,445)
The Company did not have any other income or expense other than
the loss for the year.
INVU PLC
Consolidated Balance Sheet
As at 31 January 2011
Notes 2011 2010
GBP'000 GBP'000
Non-current assets
Intangible assets 210 351
Property, plant and
equipment 42 160
Deferred tax asset - 64
------------ ------------
252 575
Current assets ------------ ------------
Inventories - 17
Trade and other
receivables 581 791
Cash and cash
equivalents 5 470 488
------------ ------------
1,051 1,296
------------ ------------
Total assets 1,303 1,871
Current liabilities
Trade and other
payables 2,212 1,991
Borrowings 2,667 2,595
Obligations under
finance leases - 20
------------ ------------
4,879 4,606
------------ ------------
Net current liabilities (3,828) (3,310)
------------ ------------
Non-current liabilities
Borrowings 77 98
Obligations under
finance leases - 11
Deferred tax - 64
------------ ------------
77 173
------------ ----------
Total liabilities 4,956 4,779
Net liabilities (3,653) (2,908)
Equity
Share capital 1,635 1,635
Equity components of
convertible loan
notes 375 375
Shares to be issued 29 29
Share premium 412 412
Merger reserve 29,260 29,260
Share option reserve 233 229
Reverse acquisition
reserve (20,570) (20,570)
Retained earnings (15,090) (14,341)
Foreign currency
translation reserve 63 63
------------ ------------
Total deficit
attributable to:
Equity holders of the
Company (3,653) (2,908)
Consolidated statement of changes in equity
For the year ended 31 January 2011
Equity
Components Foreign
of Shares Share Reverse Currency
Share Convertible to be Share Merger option acquisition Retained Translation
Capital loan notes issued premium reserve reserve reserve earnings reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 February
2009 1,135 - 29 - 29,260 283 (20,570) (9,897) 64 304
Total
comprehensive
income - - - - - - - (4,444) (1) (4,445)
Movement on
share option
reserve - - - - - (54) - - - (54)
Issue of loan
notes - 375 - - - - - - - 375
Issue of
shares 500 - - 412 - - - - - 912
At 31 January
2010 1,635 375 29 412 29,260 229 (20,570) (14,341) 63 (2,908)
Equity
Components Foreign
of Shares Share Reverse Currency
Share Convertible to be Share Merger option acquisition Retained Translation
Capital loan notes issued premium reserve reserve reserve earnings reserve Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 February
2010 1,635 375 29 412 29,260 229 (20,570) (14,341) 63 (2,908)
Total
comprehensive
income - - - - - - - (749) - (749)
Movement on
share option
reserve - - - - - 4 - - - 4
At 31 January
2011 1,635 375 29 412 29,260 233 (20,570) (15,090) 63 (3,653)
INVU PLC
Consolidated cash flow statement
For the year ended 31 January 2011
-------------------------------------------------------------
Notes 2011 2010
GBP'000 GBP'000
Net cash flows from operating
activities 6 142 (2,710)
Taxation - 231
Investing activities
Purchases of property, plant and
equipment - (17)
Sales of property, plant and equipment 18 -
Expenditure on internally developed
intangible assets (55) (204)
------------ ------------
Net cash used in investing activities (37) (221)
Financing activities
Net proceeds from the issue of shares - 912
Proceeds from issue of convertible
loan notes - 500
Proceeds from borrowings - 2,500
Interest paid (92) (50)
Repayment of obligations under finance
leases (31) (32)
------------ ------------
Net cash flow from financing
activities (123) 3,830
------------ ------------
Net (decrease)/increase in cash and
cash equivalents (18) 1,130
Cash and cash equivalents at the
beginning of the year 488 (642)
Cash and cash equivalents at 5 470 488
the end of the year
INVU PLC
Notes to the preliminary announcement
For the year ended 31 January 2011
1. ANNUAL REPORT
The financial information set out above/ below does not
constitute the company's statutory accounts for 2010 or 2011.
Statutory accounts for the years ended 31 January 2011 and 31
January 2010 have been reported on by the Independent Auditors. The
Independent Auditor's Reports on the Annual Report and Financial
Statements for 2011 and 2010 were unqualified, did draw attention
to going concern by way of emphasis, and did not contain a
statement under 498(2) or 498(3) of the Companies Act 2006.
Statutory accounts for the year ended 31 January 2010 have been
filed with the Registrar of Companies. The statutory accounts for
the year ended 31 January 2011 will be delivered to the Registrar
in due course and will be posted to shareholders shortly and
thereafter will be available from the Company's registered office
at The Beren, Blisworth Farm, Stoke Road, Blisworth, Northampton,
Northamptonshire NN7 3DB and from the Company's website
www.invu.net.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards (IFRSs), this announcement does not itself contain
sufficient information to comply with IFRSs.
The consolidated financial statements for the year ended 31
January 2011 comprise the consolidated financial information for
Invu plc ("the company") and its subsidiaries.
2. SEGMENTAL ANALYSIS
The Group has one operating segment, the design, sale and
support of computer software for the electronic management of
information and documents.
The segment results are as follows:
2011 2010
GBP'000 GBP'000
Sales through resellers to end
users 2,610 2,835
Net effect of stock deployed (122) (637)
------------ ------------
Revenue 2,488 2,198
Loss before income tax (652) (4,495)
Loss for the year (749) (4,444)
Included in revenue above are GBP0.007 million (2010: GBP0.055
million) related to sales in Europe. All other revenue relates to
the UK.
Include in revenue above are sales of software and related
services GBP1.0 million (2010: GBP0.4 million). The remaining
revenue comprised software maintenance contracts GBP1.5 million
(2010: GBP1.8 million).
All non-current assets and liabilities are held within the
UK.
The Group had one reseller who was responsible for 24 percent
(last year 24%) of the Group's sales through resellers to end
users. No other reseller was responsible for more than ten percent
of the Group's sales through resellers to end users.
3. TAXATION
2011 2010
GBP'000 GBP'000
Current taxation
- Adjustment in respect of prior years 97 (16)
- Current tax charge/(credit) - (35)
Total tax credit 97 (51)
============ ============
The tax rate used for the reconciliations below is the corporate
tax rate of 28% payable by corporate entities in the United Kingdom
on taxable profits under tax law in that jurisdiction, the
effective rate of taxation used for the calculation of the deferred
taxation being 28%.
The charge for the year can be reconciled to the loss per the
income statement as follows:
2011 2010
GBP'000 GBP'000
Loss before taxation (652) (4,495)
============ ============
Profit multiplied by standard rate of
corporation tax in the UK of 28% (2010:
28%) (183) (1,259)
Tax effect of:
Expenses not deductable 93 4
Enhanced relief on research and
development (7) (30)
Tax effect of share options 1 (15)
Fixed asset temporary differences 38 218
Unutilised losses carried forward 58 995
Losses surrendered for tax credit - 71
Research and development tax
reversal/(credit) 97 (35)
Total tax charge/(credit) for the year 97 (51)
============ ============
4. EARNINGS PER SHARE
Basic earnings per share 2011 2010
GBP'000 GBP'000
(Loss)/profit for the financial year (749) (4,444)
============= ==================
2011 2010
Number Number
Weighted average number of common shares
in issue during the year 163,472,662 137,034,306
================== ==================
Basic earnings per share (0.46)p (3.24)p
================== ==================
Diluted earnings per share (0.46)p (3.24)p
================== ==================
The basic earnings per share is based on the loss after taxation
of GBP749,000 (2010: loss of GBP4,444,000) and on the weighted
average number of shares in issue during the year of 163,472,662
(2010: 137,034,306).
In accordance with IAS 33, there is no difference calculated
between the basic and diluted earnings per share figures on the
basis of the average market value and exercise prices prevailing
during the period. The convertible loan notes have no impact on
diluted earnings per share because the group is loss making.
5. CASH AND CASH EQUIVALENTS
2011 2010
GBP'000 GBP'000
Cash at bank and in hand 470 488
6. CASH GENERATED FROM OPERATIONS
Group
2011 2010
GBP'000 GBP'000
Loss for the year (749) (4,444)
Adjustments for:
Tax 97 (51)
Depreciation 97 166
Amortisation 196 427
Loss on disposal of property,
plant and equipment 3 68
Loss on disposal of
intangible assets - 377
Foreign currency translation - (1)
Employee share scheme expense 4 (54)
Interest expense 326 136
Changes in working capital
Inventories 17 167
Trade and other receivables 143 1,127
Trade and other payables 8 (628)
Net cash generated by/(used in)
operating activities 142 (2,710)
========= ============
7. AVAILABILITY OF THIS ANNOUNCEMENT
Copies of this announcement will be available from the Company's
registered office: The Beren, Blisworth Farm, Stoke Road,
Blisworth, Northampton, Northamptonshire NN7 3DB, and on the
Company's website, www.invu.net.
8. CAUTIONARY STATEMENT
Invu plc has made forward looking statements in this press
release, including: statements about the market for and benefits of
its products and services; financial results; product development
plans; the potential benefits of business relationships with third
parties; and business strategies. These statements about future
events are subject to risks and uncertainties that could cause Invu
plc's actual results to differ materially from those that might be
inferred from the forward-looking statements. Invu plc can make no
assurance that any forward-looking statements will prove
correct.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GMGZVLLDGMZM
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