RNS No 2437w
SKILLSGROUP PLC
19th February 1998
Skillsgroup plc
Preliminary Results for the twelve months ended 30 November 1997
Highlights
The Board is pleased to report the preliminary results
for Skillsgroup, a leading provider of information
technology skills, for the twelve months ended 30
November 1997, highlights of which are as follows:
* operating profits for the continuing businesses, QA
and Acuma, increased by 18 per cent to #11.0 million
* turnover for the continuing businesses of #171.2
million
* final dividend increase of 21 per cent to 2.9p
* total dividend increase of 15 per cent to 4.2p
* Skillsgroup now focused on higher margin, skills-
based activities through the continuing businesses:
- QA - IT training, consultancy, contracting and staff
recruitment
- Acuma - enterprise computing solutions and services
Commenting on the results, Philip Livesey, Chairman said:
"The Board is pleased to report strong demand for its
skills-based services during the first quarter,
especially in the QA Group. This trend is expected to
continue in line with increasing market demand for
information technology skills and expertise. Skillsgroup
will continue to focus on higher margin activities
supported by strong marketing brands and clear routes to
market. The Board is confident that the new structure
and focus enables the Group to target positive cash flow
and strong earnings per share growth."
For further information, please contact:
Skillsgroup plc - On 19th February 1998: 0171 253 2252
Thereafter: 01625 588801
David Southworth, Group Managing Director
John Atkin, Group Finance Director
Rob Burnham, Managing Director, QA Group
Ludgate Communications Ltd - 0171 253 2252
Chris Lynch/Reg Hoare
Highlights
The Board is pleased to report a year of significant progress
for Skillsgroup, in which the business has been firmly
established as a leading provider of information technology
skills. Highlights of the year ended 30 November 1997 include:
* operating profits for the continuing businesses, QA
and Acuma, increased by 18 per cent to #11.0 million
* turnover for the continuing businesses of #171.2
million
* final dividend increase of 21 per cent to 2.9p
* total dividend increase of 15 per cent to 4.2p
* strategic focus on higher margin, skills-based
activities through the continuing businesses of QA and Acuma
Disposals
In addition to the progress made in 1997, the Group has announced
since the year end a number of key strategic actions which will
enable the further development of skills-based operations and the
withdrawal from the low margin, high volume PC desktop marketplace.
The announcements include the:
* sale of P&P UK for a cash consideration of #11.5
million plus approximately #15.0 million of debt assumed
by the purchaser
* sale of P&P Sweden for a cash consideration of #10.2
million plus #3.1 million of debt repaid by the purchaser
* intention to sell the remaining P&P operations
including Belgium and Rentals during 1998
As a result of these disposals, the results for the year
ended 30 November 1997 include a provision for loss on
discontinued operations which includes an amount of #27.2
million for goodwill written-off under UITF Statement
number 3. This has resulted in a fully diluted loss of
22.9p per share for the year. UITF Statement number 3
requires the reinstatement and write-off through the
profit and loss account of goodwill written off as a
result of previous acquisitions which have been disposed
of subsequently.
Skillsgroup Marketplace
Skillsgroup is focused on chosen segments of the
information technology marketplace, namely those which
offer higher margin potential as a result of the need for
skills-based services. The Group now consists of two
core businesses, QA and Acuma, which provide information
technology expertise to meet the needs of large
commercial and public sector organisations. QA operates
within the 'professional services' sector, which is
expected to grow by 15-25 per cent per annum over the
next 3 years, driven by factors such as skills shortages
and the increasing reliance on computer technology by
business. Acuma operates within the enterprise computing
sector, which is principally concerned with the provision
of systems for large populations of users, typically based
on UNIX and Windows NT platforms along with Internet/Intranet
technologies. The enterprise computing market is growing by
15-30 per cent per annum driven, by a number of factors
including electronic commerce and computing solutions which
support core business operations.
Business Performance
In the year ended 30 November 1997, QA increased revenues
by 53 per cent to #80.0 million and generated operating
profits of #6.1 million. Acuma increased revenues by
40 per cent to #91.2 million and generated operating
profits of #4.9 million. Both businesses performed well
in the second half of the year, producing combined revenues
of #94.4 million and operating profits of #6.0 million.
QA and Acuma have developed strong market brands and
are recognised increasingly within the IT sector for their
expert capabilities and quality of service. The sale of
the P&P desktop businesses will provide management with
the time and financial resources to concentrate on the
continued development of these skills-based businesses.
The QA Business
QA employs over 450 people based in 20 offices throughout
the UK and in Sweden and Belgium. The business is
organised into three primary divisions - QA Training,
Myriad and QA Consulting - each of which specialises in a
specific aspect of skills provision. QA Training is the
UK's largest technical training company, offering a
portfolio of more than 250 courses to the 30,000
delegates it trains each year. Myriad is one of the best
known and highly regarded contracting and recruitment
consultancies in the IT sector with more than 950
contractors currently placed with clients. It provides a
comprehensive service to customers wishing to employ the
services of specialist technical contractors or to
recruit new members of staff. QA Consulting provides
business and IT advice on an international basis across a
broad range of established and emerging technologies and
resource issues. It employs approximately 50 full-time
consultants who help businesses to formulate and
implement IT strategies and systems.
The Acuma Business
Acuma is a leading provider of integrated solutions for
enterprise computing environments based on leading edge
technologies from the foremost software vendors and
systems manufacturers. Its status as one of the top 4
resellers of Hewlett-Packard, IBM, Sun and Digital
systems is unrivalled, making Acuma one of the leading
enterprise solutions providers in the UK. These vendor
relationships are supplemented by Acuma's extensive
service capabilities, which include consultancy,
application development, systems build, integration and
network management skills. Acuma employs over 200 people
whose expertise in UNIX and Windows NT computing supports
the provision of integrated, enterprise-scale solutions.
Acuma has a Swedish subsidiary, Synergica, which
specialises in the development of software-based systems
for multi-user groups principally based on Lotus Notes,
Microsoft and Internet technologies. Synergica has
assisted in the development of some of the largest
Intranet systems in Europe.
Acuma includes a business, PSL, which is a specialist
supplier of UNIX and Windows NT systems to value added
resellers, independent software vendors and systems
integrators.
Financial Position
The Group's financial position has been strengthened
considerably following the two significant disposals made
after the year end, enhancing its ability to take
advantage of strategic acquisition and development
opportunities. The Group had a net cash balance of #12.0
million at 13 February 1998.
The Board is pleased to recommend that the final dividend
for the year ended 30 November 1997 should be increased
by 21 per cent to 2.9p per share (1996: 2.4p per share)
making an overall increase in the dividend payable for the
year of 15 per cent to 4.2p per share (1996: 3.65p per share).
The final dividend will be payable to shareholders on the
register at 14 April 1998 on 9 May 1998.
Skillsgroup Board
The Board is pleased to announce the appointments of Rob
Burnham (Managing Director of the QA Group) as an
Executive Director and Alison Carnwath (a Managing
Director of DLJ Phoenix Securities) as a Non-Executive
Director. Mike McGoun, who has assisted significantly in
the development of the Group over the past 4 years, is
stepping down from his Executive role but will remain on
the Board as a Non-Executive Director. These changes
will be effective from 2 March 1998.
On 1 October 1997, Sir Roland Smith resigned as Chairman
and Non-Executive Director and Peter Fisher and Anthony
Fisher resigned as Non-Executive Directors of the Group.
The Board would like to thank these former directors for
their significant individual contributions to the
development of the Group over a number of years.
Prospects
The Board is pleased to report strong demand for its
skills-based services during the first quarter,
especially in the QA Group. This trend is expected to
continue in line with increasing market demand for
information technology skills and expertise.
Skillsgroup will continue to focus on higher margin
activities supported by strong marketing brands and clear
routes to market. The Board is confident that the new
structure and focus enables the Group to target positive
cash flow and strong earnings per share growth.
The Board continually reviews opportunities for the
future, including strategic acquisitions or disposals,
which will improve the skills capability and the quality
of earnings of the Group.
Philip Livesey
Chairman
Notes to Editors
Alison Carnwath, Non-executive Director
Alison Carnwath, aged 45, is a Managing Director of DLJ
Phoenix Securities and non-executive director of
Nationwide Building Society, Vitec plc and Sears plc.
Alison qualified as a Chartered Accountant with KPMG
before moving to Lloyds Bank International as an
executive and manager in the corporate finance division.
Prior to joining Phoenix Securities, Alison worked for
ten years for J Henry Schroder & Co in a Director in
London and New York.
Rob Burnham, Managing Director QA Group
Rob Burnham, aged 48, has worked in the IT services
sector for over 20 years and held a variety of positions
with responsibility for consulting, training, systems
development and recruitment services. Having worked in a
user department he joined the BIS Group in 1976, he then
joined the Canadian services company SHL in 1993. Before
joining QA in September 1997, Rob was responsible for the
IT contract and permanent recruitment business at Lorien
plc.
Preliminary Results for the Year Ended 30 November 1997
Consolidated Profit and Loss Account (Unaudited)
1997 1997 1996
Cont- Cont- Discont- Total
inuing inuing inued
(to be
discont-
inued)
#'000 #'000 #'000 #'000 #'000
Turnover 171,186 28,698 177,085 376,969 344,337
Cost of sales 123,000 21,950 140,551 285,501 256,194
_______ _______ _______ _______ _______
Gross profit 48,186 6,748 36,534 91,468 88,143
Net operating expenses 37,150 6,781 34,008 77,939 72,652
_______ _______ _______ _______ _______
Operating profit/(loss) 11,036 (33) 2,526 13,529 15,491
Provision for loss on:
operations to be dis-
continued - (705) - (705) -
discontinued operations - - (27,245)(27,245) -
_______ _______ _______ _______ _______
Profit/(loss) before
interest 11,036 (738) (24,719)(14,421) 15,491
_______ _______ _______
Interest receivable 253 393
Interest payable (2,140) (1,607)
_______ _______
Profit/(loss) before taxation (16,308) 14,277
Tax on profit on ordinary activities 2,589 3,940
_______ _______
Profit/(loss) on ordinary activities
after taxation (18,897) 10,337
Dividends 3,396 2,977
_______ _______
Transfer to/from reserves (22,293) 7,360
====== ======
Earnings/(loss) per share (23.3p) 12.9p
Fully diluted earnings/(loss) per share (22.9p) 12.7p
Statement of total recognised gains and losses
1997 1996
#000 #000
Profit for the financial year (18,897) 10,337
Currency translation differences on
foreign currency net investments (1,785) (1,833)
_______ _______
Total recognised gains and losses
relating to the year (20,682) 8,504
_______ _______
Preliminary Results for the Year Ended 30 November 1997
Consolidated Balance Sheet (Unaudited)
1997 1997 1996 1996
#'000 #'000 #'000 #'000
Fixed assets
Tangible assets 24,381 22,930
Current assets
Stock 22,093 25,439
Debtors 72,019 59,206
Cash at bank and in hand 10,087 9,897
_______ _______
104,199 94,542
Creditors
Amounts falling due within
one year 84,452 75,129
_______ _______
Net current assets 19,747 19,413
_______ _______
Total assets less current
liabilities 44,128 42,343
Creditors
Amounts falling due after more
than one year 842 1,143
Provisions for liabilities
and charges 2,664 2,668
_______ _______
3,506 3,811
_______ _______
Net assets 40,622 38,532
====== ======
Capital and reserves
Called up share capital 8,135 8,073
Share capital to be allotted - 82
Reserves 32,487 30,377
_______ _______
Shareholders' funds 40,622 38,532
====== ======
Preliminary Results for the Year Ended 30 November 1997
Consolidated Cash flow Statement (Unaudited)
1997 1997 1996 1996
#'000 #'000 #'000 #'000
Cash inflow from operating
activities 14,900 15,305
Returns on investments and
servicing of finance
Interest received 253 393
Interest paid (2,140) (1,607)
(1,887) (1,214)
Taxation
Corporation tax (2,720) (5,875)
Capital Expenditure &
Financial Investment
Acquisition of tangible
fixed assets (7,034) (5,884)
Disposal of tangible
fixed assets 319 219
(6,715) (5,665)
Acquisitions & disposals
Purchase of subsidiary
undertaking (1,568) (1,484)
Net cash/(overdraft) acquired
with subsidiary (39) 504
(1,607) (980)
Equity dividends paid (2,994) (2,611)
_______ _______
Net cash inflow/(outflow)
before financing (1,023) (1,040)
Financing
Issue of ordinary
share capital 80 275
Redemption of loan notes (12,999) (4,506)
Capital element of finance
lease payments (251) (126)
_______ _______
Net cash outflow
from financing (13,170) (4,357)
_______ _______
Increase/(decrease) in cash
in the year (14,193) (5,397)
====== ======
Notes:
The 1996 accounts are abridged from the Group's full
Accounts on which the auditors, Coopers & Lybrand, have
given an unqualified opinion which did not include a
statement under Sections 237 or 237 (3) of the Companies
Act 1985. The 1997 Statutory Accounts will be filed with
the Registrar of Companies in due course.
The calculation of earnings per share is based upon
profits on ordinary activities after taxation and a
weighted average of 81,042,839 shares and the fully
diluted earnings per share is based on a weighted average
of 82,236,088 shares.
Copies of the Group's full Report and Accounts will
be sent to all shareholders in due course. Additional
copies will be available from the Company's registered
office: Skillsgroup plc, Bridgford House, Heyes Lane,
Alderley Edge, Cheshire, SK9 7JP.
The AGM will be held on 8 May 1998.
At a meeting held on 19 February 1998, the Board of
Skillsgroup plc recommended payment of a final dividend
of 2.9 pence per share to holders of 10 pence ordinary
shares on the register at the close of business on 14
April 1998.
The recommended final dividend, together with the
interim dividend already paid, makes a total dividend
for the year of 4.2 pence, compared with 3.65 pence
for 1996.
This statement was approved by the directors and
agreed with the Company's auditors on 19 February 1998.
END
FR GBUQCPBGRGRR
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