TIDMSTF
RNS Number : 6490E
smartFOCUS Group PLC
11 April 2011
FOR IMMEDIATE RELEASE 11 April 2011
smartFOCUS Group plc
FINAL RESULTS
for the year ended 31 December 2010
smartFOCUS Group plc (AIM : STF) ("smartFOCUS", the "Company" or
the "Group), the global provider of multi-channel marketing
software, announces its audited full year results for the year
ended 31 December 2010.
Financial Highlights
-- Revenue growth of 17%, to GBP13.9m (2009: GBP11.9m)
-- Profit before tax up 78% to GBP0.9m (2009: GBP0.5m)
-- Net cash of GBP2.7m (2009: GBP2.4m)
-- Diluted EPS 0.58p (2009: 0.28p)
-- Over 90% of recurring revenue retained in 2010 (2009: over
90%)
Operational Highlights
-- Strong demand for software offered in the software as a
service model ("SaaS") - now hosting more than 40 of these
customers
-- Increase in volume of customers who require a multi-channel
marketing solution
-- Significant new customer wins including Lastminute.com, Stony
Creek, PartyGaming and Betfair
-- Released eChannel 10 to support social media channels
-- Further developed vertical offerings in the areas of News
Media, Retail and On-line Gaming
-- Reorganisation of the sales team into one organisation,
supporting the entire smartFOCUS solution
Commenting on current trading and outlook, Curt Bloom, CEO of
smartFOCUS said:
"We are pleased with our performance for 2010 which saw us
deliver excellent progress against both financial and strategic
objectives.
With the total number of customers using smartFOCUS to drive
customer revenue, the Company is continuing to be recognised for
delivering results by making marketing smarter.
During 2011, smartFOCUS expects to capitalise on this position
with further new products and releases while, at the same time,
extending our distribution channels internationally. This progress
together with good cash and an excellent team positions the Company
well for continuing success.
Since the year end, we have continued to trade in line with our
expectations and the Board views the outlook for this year with
confidence."
- Ends
Enquiries
smartFOCUS Group plc Today - Tel: 0207 466 5000
Curt Bloom, Chief Executive Officer Thereafter - Tel: 0117 943 5800
Neil Thomas, Chief Financial www.smartfocus.com
Officer
Buchanan Communications Tel: 0207 466 5000
Lisa Baderoon
Arbuthnot Securities Limited Tel: 0207 012 2000
Tom Griffiths
Chairman's statement
I am happy to report that 2010 continued to be a year of growth
and progress for smartFOCUS. Our results for 2010 reflect our
strategy in terms of increased revenue and profitability alongside
significant operational gains which underpin our efforts to build a
strong business within the marketing technology sector.
During 2010 overall revenues grew by 17%; at the same time our
contracted recurring revenue grew by 12%. Profitability after tax
grew by more than 99%, while we still were able to increase
investments in our product development and international sales and
marketing efforts. We are pleased to report that both revenue and
profit exceeded market expectations.
The Group's core proposition continues to resonate with
companies wishing to apply insight and knowledge to their marketing
campaigns. The Group made progress in its vertical efforts in all
territories, with new customers being signed in News Media, Retail
and On-line Gaming. During 2010 Lastminute.com, Stony Creek,
PartyGaming and Betfair, to name a few, have committed to
smartFOCUS to deliver increased value to their marketing
efforts.
Good progress was made in the Group's international business
with ten new international marketing services partners ("MSP")
signed in the year, significant contributions were also made
through the existing MSP base signing new customers, particularly
throughout the United States. Client retention continues to be
strong due to the Company's account services and marketing efforts.
In spite of the continued budgetary pressures exerted on our client
base, retention rates continue to exceed our expectations.
Approximately 94% of our overall base continue to contract and
renew with us.
New product development continues to focus on our SaaS product
suite with the expected launch and general delivery of our latest
offering in 2011. We continue to make investments in this area as
market demand for solutions that are easily configured, hosted and
managed by smartFOCUS is increasing. At the same time we continue
to invest in our existing solutions, particularly in the area of
scalability where our solutions serve customers with significant
user and data demands resulting from the growing need to integrate
social and traditional marketing channels.
During the last quarter of the calendar year Chris Underhill
founder and CEO of smartFOCUS left the Company. Curt Bloom,
President of smartFOCUS International assumed the role of Interim
CEO and ensured that the business continued to out-perform
expectations and move forward in a seamless and consistent
manner.
The Board is confident in the continued market opportunity for
smartFOCUS; based on our continued competitive performance and
successful delivery to our clients, the Board is confident that
2011 will be another year of growth and market development ensuring
the on-going success of the business.
Chris Gater
Chairman
11 April 2011
Chief Executive's Review
I am pleased to report that once again smartFOCUS performed
strongly as reflected in 17% revenue growth and profit before tax
growth of 78%. Revenue for 2010 totalled GBP13.9m versus the
previous year's GBP11.9m and profit before tax was GBP0.9m versus
GBP0.5m.
Recurring revenue, one of our key metrics, grew by 12% year on
year to be 63% of total revenue. This strong measure reflects the
continued quality of our revenue and helps us better to plan and
manage risk in our business. Overall the retention rate of
recurring revenue continues to be above 90%.
Diluted EPS were 0.58p (2009: 0.28p). Cash at the year end grew
from GBP2.4m in 2009 to GBP2.7m.
Business Review
smartFOCUS continued to experience positive selling momentum
during 2010 in all geographic locations and across all lines of
business.
This drive is supported by continued investment on the part of
marketing organisations in solutions enabling both the acquisition
and retention of customers more profitably, and objectives that are
delivered through smartFOCUS products and services. Organisations
have been looking at the integration of their marketing efforts
across all lines of business in order to ensure that customers are
receiving relevant, timely and consistent communications. This
integration not only centres around traditional channels, for
example direct mail, telephone, and point of sale, but also with
on-line channels such as web, email, and SMS. smartFOCUS' solutions
provide strategic insight for marketers across all of the marketing
channels and enable them to design, execute and measure marketing
campaigns to leverage all of the customer touch points.
In 2010, we saw significant evidence of the above with contracts
including Lastminute.com, Rank, and Carnival. We have seen a
fundamental shift from customers looking to contract with us for a
pure email solution to one which incorporates analysis and campaign
management. The result of this is that we see an increase in volume
amongst our customers who prefer a multi-channel marketing solution
versus a pure email solution. This is one of our key competitive
points: we offer our customers an integrated solution providing
both the historical and what if analysis, alongside robust campaign
and channel deployment functionality. The ultimate result is that
we offer the best chance of a stronger return on investment for
their marketing efforts.
Marketing software developed by smartFOCUS is best leveraged
when a customer's database is designed and maintained to support
its underlying business objectives and processes. smartFOCUS offers
either directly, or through its network of partners, a complete
data solution to support optimal software use and results. During
2010, with the use of social media channels, we have seen the
volume and complexity of data increase and marketing begin to
struggle with its management. smartFOCUS not only supports the
enhanced data base constructed to support this data, but our
software now is used both to analyse and process this data for
marketing purposes. In 2010 smartFOCUS released its eChannel 10 to
target social media channels and made several enhancements to its
core analytical solution to manage the increased data flows. More
data through more channels is increasing the complexity of building
effective marketing strategies; now, more than ever, vendors of
marketing automation solutions are trying to integrate these new
channels and data volumes. smartFOCUS is already there.
These market drivers and the evolving smartFOCUS product
delivery strategy are keys to the Group's overall growth
strategy.
Operational Review
Sales
The Group continues to follow a direct and indirect sales
distribution strategy; this is also organised vertically.
In 2010, the Group completed a reorganisation of its sales team
into one organisation supporting the entire smartFOCUS solution
from database design and management to analysis, campaign
management and e-marketing. This brings greater capability to
address our customer and prospect requirements for overall
integrated marketing solutions as described above. The bringing
together of the sales force is responsible for us delivering
complete solutions, higher email volumes and larger footprints
within our customer base.
We further developed our vertical offerings in the areas of News
Media, Retail and On-line Gaming. All three verticals have been
developed to deliver both SaaS and in-premise deployments of our
solutions, offering both existing and potential customers greater
flexibility and choice. While the presence of SaaS in the marketing
automation arena continues to increase we have seen customers move
from an already SaaS implemented base to an in-premise deployment,
and customers in-premise moving to our SaaS offerings. This
flexibility in our business model has increased our revenue for
both recurring and non-recurring elements, helped us grow our
market share in our verticals and increased customer retention.
The Group's Partner Program has been enhanced such that we are
now able to recruit, bring up-to-speed and retain our Partners in a
way that is replicable on a world-wide basis. We signed a record
number of new partners throughout the world with a noted increase
in activity and closures in the United States. Our new approach
helped us benefit from partner revenue increases from partners
signed in the prior year. In particular, we note mid-tier partners,
such as SolutionSet and Accudata, won significant new accounts
around smartFOCUS solutions. Our Partners now support approximately
100 clients worldwide.
Our Client Services Team continued to outperform internal
expectations. Existing customers added new capabilities through the
deployment of new services and software, added new departments,
divisions and subsidiaries all of which increased our account
penetration and retention capability. Retention for 2010 was 94% of
our customer base.
Services
Part of the Group's solution involves the deployment of services
to support the implementation of our software.
The Services Team participated in several key projects involving
the deployment of our Multi-Channel solutions, including
Lastminute.com, Selfridges, Carnival, Nationwide, Rank, Betfair,
Sydney Morning Herald, The Age, BNP Paribas and more. Other clients
such as Chelsea Football Club, Manchester United and Lego continue
to subscribe to new services from the Company to enhance their
solution capabilities.
2010 saw an increase in the number of SaaS delivered customers.
We are now hosting more than 40 of these customers from our UK and
U.S. Data Centres, constituting more than a third of our service
revenue which is now repeating. Customers load marketing data to
the hosted platform and are able easily to use our applications
without worrying about managing the infrastructure and processes
required to receive the benefits from a multi-channel marketing
solution.
Research and Development
The Group invests approximately 11% of its revenue in the
development and maintenance of its solutions; we choose not to
capitalise any of that expenditure.
During 2010 the Group continued to enhance the scalability of
its offerings for several of its very large enterprise clients as
well as to meet the increasing data demands of the social media
channel. Additionally, customers have shifted more and more towards
sending marketing communications by email and other online
channels. Volumes have increased at smartFOCUS by more than 60%
year on year. The Group released approximately 12 new software
versions not just to increase the scalability of our offerings but
to add new functionality in response to feedback and requests from
our user community.
Significant progress has been made in the development of our new
SaaS based marketing offering that completely integrates best
practice in terms of database design, data loading and processing
along with a rich user web experience for analysis, campaign
management and channel deployment. The offering is being unveiled
in Q1 2011 with customer delivery expected in early Q3.
Headcount
Overall headcount in the Group increased from 124 to 134. The
additions were primarily in sales and marketing, specifically in
the United States to meet significant growth opportunities, and in
R&D to support the release of new products to market. During
2010 the Group opened a new office in Boston, United States and
launched its North American Data Centre to meet the overall demand
of its United States customers.
Current Trading
Since the year end, the Group has continued to trade ahead of
expectations and we are encouraged by the on-going development of
the Group's sales pipeline and underlying demand for our software
and solutions.
Outlook and Summary
I assumed the role of Interim CEO in Q4 2010 and my focus has
been on sales execution, new technology delivery, and operational
efficiency. I am pleased to report that we have made progress on
all fronts as well as continuing to exceed market expectation in
our financial results.
Based on the strength of the Group's business model and on-going
confidence in its growth strategy, the Board is positive that the
Group will continue to capitalise on its competitive position in a
market that offers foreseeable growth and views the outlook for the
year with confidence.
C Bloom
Chief Executive
11 April 2011
Consolidated statement of comprehensive income
2010 2009
Note GBP GBP
Group revenue 213,908,781 11,931,220
Operating
charges (12,969,650) (11,411,151)
------------------------------- -------------------------------
Operating
profit
before
interest
and
taxation 939,131 520,069
Interest
receivable 4,371 2,038
Interest
payable (71,098) (32,592)
------------------------------- -------------------------------
Profit from
continuing
operations
before
taxation 872,404 489,515
Tax expense (304,293) (204,608)
------------------------------- -------------------------------
Net profit for the year 568,111 284,907
______ ______
Other comprehensive income
Exchange differences on translating foreign
operations 26,030 158,980
________ _________
Total comprehensive income for the financial
period attributable to owners of the parent 594,141 443,887
________ _________
Earnings per share (basic) 3 0.60p 0.30p
Earnings per share (diluted) 3 0.58p 0.28p
All of the activities of the Group are classed as
continuing.
Consolidated statement of financial position
2010 2009
============ ===== ============================================== ==============================================
Note GBP GBP
============ ===== ============================================== ==============================================
Assets
============ ===== ============================================== ==============================================
Non-current
assets
============ ===== ============================================== ==============================================
Goodwill 2,756,696 2,689,958
=================== ============================================== ==============================================
Other Intangible
Assets 751,781 937,465
=================== ============================================== ==============================================
Property, plant and
equipment 940,333 679,302
=================== ============================================== ==============================================
Deferred Tax 637,045 843,976
=================== ============================================== ==============================================
----------------------------------------- -----------------------------------------
=================== ============================================== ==============================================
5,085,855 5,150,701
=================== ============================================== ==============================================
Current assets
=================== ============================================== ==============================================
Trade and other
receivables 3,623,597 2,919,219
=================== ============================================== ==============================================
Cash and cash
equivalents 2,677,643 2,443,310
=================== ============================================== ==============================================
----------------------------------------- -----------------------------------------
=================== ============================================== ==============================================
6,301,240 5,362,529
=================== ============================================== ==============================================
----------------------------------------- -----------------------------------------
============ ===== ============================================== ==============================================
Total assets 11,387,095 10,513,230
=================== ============================================== ==============================================
============================================== ==============================================
=================== ============================================== ==============================================
Equity attributable
to owners of the
parent
=================== ============================================== ==============================================
Called-up equity
share capital 954,732 939,084
=================== ============================================== ==============================================
Share premium
account 1,755,042 1,624,294
=================== ============================================== ==============================================
Share option
reserve 271,546 253,187
=================== ============================================== ==============================================
Merger reserve 2,093,754 2,093,754
=================== ============================================== ==============================================
Translation of
foreign
operations 300,673 274,643
=================== ============================================== ==============================================
Retained earnings (1,119,763) (1,687,874)
=================== ============================================== ==============================================
----------------------------------------- -----------------------------------------
============ ===== ============================================== ==============================================
4,255,984 3,497,088
================== ============================================== ==============================================
Non-current
liabilities
============ ============================================== ==============================================
Deferred Tax 225,517 281,221
============ ============================================== ==============================================
Other
payables 382,518 835,739
============ ============================================== ==============================================
---------------------------------------- ----------------------------------------
============ ============================================== ==============================================
608,035 1,116,960
============ ============================================== ==============================================
Current
liabilities
============ ============================================== ==============================================
Trade
payables 604,249 464,625
============ ============================================== ==============================================
Other
payables 5,918,827 5,434,557
============ ============================================== ==============================================
---------------------------------------- ----------------------------------------
============ ============================================== ==============================================
6,523,076 5,899,182
============ ============================================== ==============================================
---------------------------------------- ----------------------------------------
============ ============================================== ==============================================
Total
liabilities 7,131,111 7,016,142
============ ============================================== ==============================================
---------------------------------------- ----------------------------------------
============ ============================================== ==============================================
Total
liabilities
and equity 11,387,095 10,513,230
============ ============================================== ==============================================
============================================== ==============================================
============ ============================================== ==============================================
These financial statements were approved by the directors on 8
April 2011 and are signed on their behalf by:
..........................
C Bloom -Company Number 5189530
Consolidated statement of cash flows
2010 2009
Note GBP GBP
Operating activities
Result for the period before tax and
finance costs 939,131 520,069
Amortisation of intangible assets 185,684 195,727
Depreciation of property, plant and
equipment 441,120 306,316
Change in trade and other receivables (704,379) 760,786
Change in trade and other payables 152,092 (340,549)
Share option charges 18,359 39,195
Interest receivable 4,371 2,038
Interest payable (71,098) (32,592)
Exchange differences (96,459) 28,018
Corporation tax paid (65,000) (8,642)
----------------------------------- -----------------------------------
Cash flows from operating activities 803,821 1,470,366
Investing activities
Purchase of property, plant and
equipment (94,922) (139,246)
Acquisition of subsidiary (300,093) (265,866)
----------------------------------- -----------------------------------
Net cash used in investing activities (395,015) (405,112)
Financing activities
Proceeds from issue of shares 146,396 10,799
Finance lease payments (320,869) (167,530)
----------------------------------- -----------------------------------
Net cash outflow from financing (174,473) (156,731)
Net movement in cash 234,333 908,523
Opening cash balance 2,443,310 1,534,787
Net movement in cash 234,333 908,523
----------------------------------- -----------------------------------
Closing cash balance 2,677,643 2,443,310
----------------------------------- -----------------------------------
Consolidated statement of changes in equity
Share Share Share Other Components Retained Total
Capital Premium Options of Equity Earnings Equity
GBP GBP GBP GBP GBP GBP
Balance 1
January 2009 937,884 1,614,695 213,992 2,209,417 (1,972,781) 3,003,207
Profit for the
period - - - - 284,907 284,907
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - 158,980 - 158,980
Total Other
Comprehensive
Income - - - 158,980 284,907 443,887
Transactions
with owners:
Issue of
shares 1,200 9,599 - - - 10,799
Share options - - 39,195 - - 39,195
------------------------------- -------------------------------- ------------------------- --------------------------------------- ------------------------------ ------------------------------
Balance 31
December
2009 939,084 1,624,294 253,187 2,368,397 (1,687,874) 3,497,088
============================================== ============================================= ===================================== ============================================== ============================================= =============================================
Balance 1
January 2010 939,084 1,624,294 253,187 2, 368,397 (1,687,874) 3,497,088
Profit for the
period - - - - 568,111 568,111
Other
comprehensive
income:
Exchange
differences
on
translating
foreign
operations - - - 26,030 - 26,030
Total Other
Comprehensive
Income - - - 26,030 568,111 594,141
Transactions
with owners:
Issue of
shares 15,648 130,748 - - - 146,396
Share options - - 18,359 - - 18,359
------------------------------- -------------------------------- ------------------------- --------------------------------------- ------------------------------ ------------------------------
Balance 31
December
2010 954,732 1,755,042 271,546 2,394,427 (1,119,763) 4,255,984
============================================== ============================================= ====================================== ============================================== ============================================= =============================================
1 Basis of preparation
The financial information does not constitute statutory accounts
as defined in section 435 of the Companies Act 2006, but has been
extracted from the statutory accounts for the year ended 31
December 2010 on which an unqualified audit report has been issued
and which will be delivered to the Registrar following their
adoption at the Annual General Meeting.
Copies of the 2010 Annual Report and Accounts will be posted to
shareholders with the notice of the Annual General Meeting. Further
copies may be obtained by contacting the Company Secretary at
smartFOCUS Group plc, One Redcliff Street, Bristol, BS1 6NP.
The financial statements have been prepared in accordance with
applicable international reporting standards as adopted by the EU.
The group financial statements consolidate those of the company and
of its subsidiary companies drawn up to 31 December 2010.
Intra-group transactions are eliminated on consolidation and all
figures relate to external transactions only. Acquisitions of
subsidiaries are dealt with by the acquisition method of accounting
except for those qualifying as group reconstructions where merger
accounting is used. The results of newly acquired companies are
consolidated from the date that control passed.
2 Segment Reporting
Our management information system produces reports for the Board
grouping financial performance under the following business
areas:
-- Europe
-- Rest of the world
All business areas are responsible for developing, marketing and
distributing their range of software. As permitted by IFRS 8, since
these business areas are deemed to have similar economic
characteristics and are similar, if not the same, in all of the
following:
-- business areas derive their revenue from the supply of
software products,
-- the production and distribution process is the same across
all business areas,
-- business areas supply to similar customers
-- all business areas are subject to the same regulatory
environment,
The business areas have been aggregated into a single reportable
operating segment, namely software distributors, and as such
information regarding this operating segment has already been
disclosed in the financial statements.
No single customer contributed 10% or more to revenue.
Geographical information
Non-current assets Revenue
2010 2009 2010 2009
GBP GBP GBP GBP
Europe 1,951,258 1,841,679 9,706,539 9,318,932
Rest of the
World 2,497,552 2,530,912 4,202,242 2,612,288
---------- ---------- ----------- -----------
4,448,810 4,372,591 13,908,781 11,931,220
3 Earnings per share
2010 2009
GBP GBP
Profit attributable
to ordinary
shareholders (basic
and diluted) 568,111 284,907
================================= =============================================
Profit on ordinary
activities before
taxation and
interest 939,131 520,069
================================= =============================================
Weighted average
number of shares
(basic) 94,842,770 93,798,423
=============================================== =============================================
Weighted average
number of shares
(diluted) 98,408,324 101,980,710
=============================================== ====================================================
Basic earnings per 0.60p 0.30p
share
========================== ===============================
Diluted earnings per 0.58p 0.28p
share
========================== ===============================
Adjusted basic 0.99p 0.55p
earnings per share
========================== ===============================
Adjusted diluted 0.95p 0.51p
earnings per share
========================== ===============================
The difference between the basic and the diluted number of
shares relates to share options issued.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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