TIDMINVU
RNS Number : 4715M
Invu plc
18 September 2012
Invu PLC
Interim Results for the six months ended 31 July 2012
Invu PLC (INVU.L, the 'Group' or the 'Company'), the document
management software provider, announces its interim results for the
six months period ended 31 July 2012 (H1 2013).
Key Financial Points
-- Revenue GBP1.28m (H1 2012: GBP1.32m)
-- Net profit GBP0.04m (H1 2012: Net Loss GBP0.22m)
o Adjusted EBITDA GBP0.11m (H1 2012: breakeven)
-- Net cash (cash net of borrowings) GBP0.6m (H1 2012: GBP0.7m)
Colin Gallick, Chief Executive Officer of Invu, commented:
"Our first interim net profit for a number of years represents
another important milestone in the recovery of the business."
Enquiries:
Invu Plc +44 (0) 1604 859893
Colin Gallick, CEO
Ian Smith, CFO
WH Ireland Limited +44 (0) 117 945 3470
Mike Coe
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. 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
Chief Executive's Statement
Financial Performance
I am pleased to report the achievement of a net profit in what
continue to be challenging business conditions.
This is the first interim profit since the half year ended 31
July 2006. This represents a significant milestone in the
turnaround of the group which started with the appointment of new
management following the first half loss of GBP2.7m in the half
year ending 31 July 2009.
The key trading element in the financial turnaround has been the
focus on cash generation with a key financial metric for this being
adjusted EBITDA (earnings before interest, tax, depreciation,
amortisation, share option expenses and exceptional costs).
In the period, we report an adjusted EBITDA of GBP0.11m compared
to a breakeven result in H1 2012.
The key non trading element in the financial turnaround has been
the reduction in the interest burden which has been achieved
following the capital reorganisation approved by shareholders in
July 2011.
In the period, we report interest expense of GBP5,000 compared
GBP159,000 in H1 2012
Business Performance
During the period the business has continued to be focused on,
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.
During the period we have carried out the great majority of our
business in the United Kingdom selling our own authored software,
which is designed to address the needs of small and medium sized
businesses, together with software supplied by third parties which
complements our own software offering.
During the period we, in common with many other businesses who
are focussed on the UK market, have experienced tough trading
conditions which have had an adverse impact on new business sales
in the period. This reduction in new business sales has however
been partially offset by growth in business to existing customers.
As a result the fall in revenues was only from GBP1.32m to
GBP1.28m
During the period the accountancy market, has remained our most
significant vertical market. We address this market through a
white-label agreement with IRIS, the UK's largest private software
house. IRIS has become the largest reseller of our software. We
continue to make progress in the financial sector with the most
significant software revenue in the period coming from our sale to
WH Ireland. The remainder of new business in the period has been
across a range of business sectors.
During the period a significant portion of our software and
related service sales were the result of our direct sales efforts.
The majority of our traditional channel partners have tended to be
focussed on the sale of hardware devices to small businesses with
our software offered as an addition to the hardware sale. We have
seen a decline in this business over the last couple of years. We
have offset this by directly offering solutions based on document
management through our direct sales force. This has resulted in us
selling more services and because we tend to engage with more
medium sized businesses generating more repeat business.
We have a large customer base and the support revenue from this
base is an important part of our revenues. In the period we
continued to maintain a high retention rate (by value) of these
customers. The retention rate is dependent on the quality of
telephone support we (and our resellers deliver) and continuing
updates to the software.
In April we made available to all customers our latest software
release and this continued the theme of making documents and
workflow available anywhere. This release, as well as supporting
the latest platforms and using the latest technology (.Net4),
included invoice processing functionality applicable to small and
medium size business, provided simple records management and
enabled portals for the accountancy sector.
The next major software release is scheduled for the third
quarter of 2012.
Outlook
We expect that the UK economy will continue to perform weakly in
the second half of our financial year to 31 January 2013. As the
majority of our business comes from UK customers, we are
anticipating that trading conditions will remain challenging and
this will impact our ability to close new business. Nevertheless
over the full financial year we expect to continue to build on the
stable base we have established in the first half.
Colin Gallick
Chief Executive Officer
18 September 2012
Finance Review
The Consolidated Income Statement shows an operating profit of
GBP0.034m compared to a loss of GBP0.1m in the first half of last
year.
Revenue in the period was down by 2.7% at GBP1.28m compared to
GBP1.32m reported in the first half of last year.
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 GBP0.44m (H1 2012: GBP0.5m). The revenue
arising from the sale of support contracts is recognised evenly
over the life of the contract and represented GBP0.84m (H1 2012:
GBP0.82m) in the period. The key performance metric for the sale of
software support contracts is the renewal rate which was 92%
compared to 89% last year.
The cost of sales includes the direct costs of the delivery of
services which form the majority of revenue. The gross margin
percentage improved to 80.7% (H1 2012 78.2%).
Administrative expenses have decreased by 11.4% from GBP1.13m to
GBP1.00m as a result of higher capitalisation of development labour
costs, lower depreciation and amortisation costs and lower costs
for sales commissions and executive bonuses.
Finance costs were significantly lower at GBP0.005m compared to
GBP0.159m last year. This has occurred because of the capital
reorganisation that took place in July 2011 which saw the
conversion of most of the Group's debt to equity.
There is a tax credit of GBP0.007m for the period (H1 2012
credit GBP0.042m) arising from payment of a research and
development tax credit repayment claim by HMRC.
The Group Balance Sheet shows total shareholders' equity as a
deficit of GBP0.78m (last year end GBP0.84m) funded principally by
working capital.
Trade receivables were marginally lower at GBP0.47m (H1 2012
GBP0.49m) with days sales outstanding, measured using the
exhaustion method, decreasing from 71 days at 31 January to 63 days
at 31 July.
The net cash flow generated by operating activities in the
period was GBP0.07m compared to GBP0.18m generated in the first
half last year.
Ian Smith
Finance Director
18 September 2012
CONSOLIDATED INTERIM INCOME STATEMENT (Unaudited)
FOR THE SIX MONTHS ENDED 31 JULY 2012
For the six months ended
July 31, July 31,
Continuing operations Notes 2012 2011
GBP'000 GBP'000
1 Restated
Revenue 2 1,280 1,315
Cost of sales (247) (287)
----------------- -------------------
Gross profit 1,033 1,028
Administration expenses (999) (1,128)
Profit/(loss) from operations 34 (100)
Finance costs (5) (159)
Profit/(loss) before income tax 2 29 (259)
Income tax credit 7 42
----------------- -------------------
Profit/(loss) for the period 2 36 (217)
================= ===================
Attributable to:
Equity holders of the Company 36 (217)
================= ===================
Profit/(loss) per share
Basic and diluted (pence per share) 3 0.008 (0.131)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited)
FOR THE SIX MONTHS ENDED 31 JULY 2012
For the six months ended
July 31, July 31,
2012 2011
GBP'000 GBP'000
Restated
Profit/(loss) for the period 36 (217)
Other comprehensive income
Exchange differences on translating
foreign operations - (-)
--------- ---------
Total comprehensive profit/(loss) for the
period, net of tax 36 (217)
========= =========
Attributable to:
Equity holders of the Company 36 (217)
--------- ---------
CONSOLIDATED BALANCE SHEET AT 31 JULY 2012 (Unaudited)
July 31, January 31, July 31,
2012 2012 2011
GBP'000 GBP'000 GBP'000
Assets
Non-current assets
Intangible assets 148 137 143
Property, plant and
equipment 21 24 27
Deferred tax asset - - -
--------- ------------ ---------
169 161 170
--------- ------------ ---------
Current assets
Trade receivables 469 588 493
Other receivables 60 46 58
------------------------------ --------- ------------ ---------
Trade and other receivables 529 634 551
Cash and cash equivalents 641 641 1,316
--------- ------------ ---------
1,170 1,275 1,867
--------- ------------ ---------
Total assets 1,339 1,436 2,037
========= ============ =========
Liabilities
Current liabilities
Trade and other payables 2,008 2,151 2,290
Borrowings 25 27 524
Current Taxation 30 30 30
--------- ------------ ---------
2,063 2,208 2,844
--------- ------------ ---------
Non-current liabilities
Borrowings 52 63 77
Deferred tax liability - - -
--------- ------------ ---------
52 63 77
Total liabilities 2,115 2,271 2,921
--------- ------------ ---------
Total net liabilities (776) (835) (884)
========= ============ =========
Capital and reserves
attributable to equity
holders of the company
Share capital 4,738 4,738 4,685
Convertible loan notes 375 375 375
Share to be issued 29 29 29
Share premium 412 412 412
Merger reserve 361 361 29,260
Share option reserve 269 246 244
Reverse acquisition
reserve (20,570) (20,570) (20,570)
Retained earnings 13,547 13,511 (15,379)
Foreign currency translation
reserve 63 63 60
--------- ------------ ---------
Total deficit (776) (835) (884)
========= ============ =========
CONSOLIDATED CASH FLOW STATEMENT (Unaudited)
FOR THE SIX MONTHS ENDED 31 JULY 2012
For the six months
ended
July 31, July 31,
Notes 2012 2011
GBP'000 GBP'000
Net cash flows from operating activities 4 75 176
Taxation 7 76
Investing activities
Purchases of property, plant and equipment (4) (7)
Expenditure on internally developed intangible (60) -
assets
Net cash used in investing activities (64) (7)
Financing activities
Issue of shares - 625
Borrowings (13) (18)
Interest paid (5) (6)
Net cash (used in)/from financing activities (18) 601
---------- ---------
Net increase in cash and cash equivalents - 846
Cash and cash equivalents at the beginning
of the period 641 470
---------- ---------
Cash and cash equivalents at the end of
the period 641 1,316
---------- ---------
ACCOUNTING POLICIES
1. Basis of preparation
The financial information in these interim results is that of
the holding company and all of its subsidiaries (the Group). It has
been prepared in accordance with the recognition and measurement
requirements of International Financial Reporting Standards as
adopted for use in the EU (IFRSs). The accounting policies applied
by the Group in this financial information are the same as those
applied by the Group in its financial statements for the year ended
31 January 2012, and which will form the basis of the 2012/13
financial statements.
There are no new published standards, or interpretations and
amendments to published standards, that are not yet effective, that
once effective would materially affect the Group.
The comparative financial information presented herein for the
year ended 31 January 2012 does not constitute full statutory
accounts for that period. The Group's Annual Report for the year
ended 31 January 2012 has been delivered to the Registrar of
Companies. The Group's Independent Auditors' report on those
accounts was unqualified and did not contain a statement under
section 498(2) or 498(3) of the Companies Act 2006. The financial
information for the half years ended 31 July 2012 and 31 July 2011
have neither been audited nor reviewed pursuant to guidance issued
by the Auditing Practices Board.
The Group's profit and loss for the period ended 31 July 2011
has been restated to reclassify GBP72,000 of expenses related to a
share issue, which were shown as an exceptional cost on the interim
report last year, to opening retained earnings to be consistent
with their treatment in the full year accounts to 31 January 2012.
The reported loss for the period ended 31 July 2011 decreased from
GBP0.289m to GBP0.217m.
2. SEGMENT INFORMATION
The Group's services being, the design, sale and support of
computer software for the electronic management of information and
documents operate through a common infrastructure and support
function. Therefore the Directors believe the activities constitute
one operating segment through which it provides services.
The segment results are as follows:
For the six months
ended
July 31, July 31,
2012 2011
GBP'000 GBP'000
Revenue by service:
Sale of software licences and
related services 442 493
Sale of software maintenance contracts 838 822
---------- ---------
Revenue 1,280 1,315
Gross profit 1,033 1,028
Profit/(loss) from operations 34 (100)
Profit/(loss) before income tax 29 (259)
Profit/(loss) for the year 36 (217)
Included in revenue above are GBP0.033m (H1 2012: GBP0.039m)
related to sales in Europe. All other revenue relates to the
UK.
All non-current assets and liabilities are held within the
UK.
The Group had one reseller who was responsible for 14% (H1
2012:18%) of the Group's invoiced sales and a second reseller who
was responsible for 10% of the Group's invoiced sales. No other
reseller was responsible for more than ten percent of the Group's
invoiced sales.
3. PROFIT/(LOSS) PER SHARE
For the six months
ended
July 31, July 31,
2012 2011
GBP'000 GBP'000
Profit/(loss) for the period 36 (217)
============ ============
Basic profit/(loss) per share 0.008p (0.131)p
------------ ------------
Diluted profit/(loss) per share 0.008p (0.177)p
------------ ------------
Weighted average number of common
share outstanding 473,752,662 163,472,662
------------ ------------
Diluted weighted average number of
common share outstanding 473,752,662 163,472,662
------------ ------------
The weighted average number of common shares outstanding
includes ordinary shares of 0.001p and A ordinary shares of 0.001p.
The weighted average number of common shares outstanding does not
include the deferred shares arising from the share split approved
at the AGM on 25(th) June 2012 as these shares have very limited
rights and are considered worthless.
The diluted weighted average number of common shares outstanding
normally results from share options. The effect of the share
options has not been included in the calculation of the diluted
earnings per share because the share options are all out of the
money.
4. CASH GENERATED FROM OPERATIONS
For the six months
ended
July 31, July 31,
2012 2011
GBP'000 GBP'000
Profit/(loss) for the period 36 (217)
Adjustments for:
Tax (7) (42)
Depreciation 7 17
Amortisation 49 72
Employee share scheme 23 11
Interest expense 5 159
Changes in working capital:
Trade and other receivables 105 (15)
Trade and other payables (143) 191
---------- ---------
Net cash generated from operating
activities 75 176
========== =========
5. ADJUSTED EBITDA
For the six months
ended
July 31, July 31,
2010 2011
GBP'000 GBP'000
Profit/(loss) for the period 36 (217)
Adjustments for:
Interest expense 5 159
Tax (7) (42)
Depreciation 7 17
Amortisation 49 72
Employee share scheme 23 11
113 -
========== =========
6. Copies of this interim statement will be available on the
Company's website, www.invu.net
This information is provided by RNS
The company news service from the London Stock Exchange
END
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