TIDMTPH
RNS Number : 9008N
Telephonetics PLC
26 February 2009
Press release
Telephonetics Plc
Unaudited preliminary results
For the year ended 30 November 2008
Telephonetics Plc ('Telephonetics' or the 'Company' or the 'Group'), a leading
speech recognition and voice automation specialist, today announces its
preliminary results for the year ended 30 November 2008.
Highlights
- Revenues increased by 3% to GBP9.95m (2007: GBP9.67m)
- Gross margin up 1 percentage point to 61% (2007: 60%)
-Operating profit of GBP0.87m (2007: GBPnil)
- Profit before tax of GBP1.07m (2007: GBP0.14m)
- Earnings per share 0.87p (2007: 0.17p)
- Cash generated from operations up 39% to GBP1.56m (2007: GBP1.12m)
- Debt free with net cash of GBP5.39m (2007: GBP4.03m)
-Twenty five new customers acquired
-New partnerships agreements increase presence in the public sector
-Total assets of GBP19.7m (2007: GBP17.9m)
-Total equity of GBP14.4m (2007: GBP13.4m)
Mike Neville, Chairman of Telephonetics, commented:
"Telephonetics has completed another growth year, delivering a record financial
performance. The Group is establishing itself as a supplier of choice in the
growing public sector market place which now accounts for over 50% of Group
revenue. Combined with its strong cash position and robust customer and partner
network, Telephonetics is well positioned to weather the uncertainty of the
current economic climate and generate further shareholder value as we move
forward in 2009."
For further information please contact:
+-------------------------------------+-------------------------------------+
| Telephonetics | +44 (0) 1442 242242 |
| James Ormondroyd (Finance Director) | |
| | |
+-------------------------------------+-------------------------------------+
| Maitland | +44 (0) 207 379 5151 |
| Neil Bennett | |
| George Hudson | |
| | |
+-------------------------------------+-------------------------------------+
| Brewin Dolphin Investment Banking | +44 (0) 113 241 0130 |
| Nominated Adviser & Broker | |
| Neil Baldwin | |
| Sean Wyndham-Quin | |
| | |
+-------------------------------------+-------------------------------------+
Operating Review
Telephonetics is delighted to announce record preliminary results following a
year of significant progress. The Group achieved record revenues and moved into
operating profit for the first time. With strong cash generation and a debt free
balance sheet, the Group is well positioned to maximise any future
opportunities.
Group turnover was GBP9.95m, an increase of 3% (2007: GBP9.67m); operating
profit was GBP0.87m (2007: GBPnil). Profit before tax increased significantly
from GBP0.14m in 2007 to GBP1.07m and earnings per share also increased from
0.17p to 0.87p. The Group's cash position remains strong; cash generated from
operations was up 39% to GBP1.56m (2007: GBP1.12m) and we have net cash of
GBP5.39m (2007: GBP4.03m). We have also further reduced the significance
of MovieLINE revenue to the Group as a result of continued focus on provision
of packaged applications primarily to the public sector.
Packaged Applications
Sales of our packaged speech recognition and voice automation applications and
associated services covering the health, public and corporate sectors increased
by 5% to GBP6.27m (2007: GBP5.97m). This increase in revenues is the result of
cross selling applications into the Group's customer base, together with an
increase in the value of the applications supported under contract. The
proportion of recurring revenues under service contracts is 57% providing the
Group with good visibility of earnings.
The attractiveness of Telephonetics' applications is reflected in the fact that
58% of NHS acute trusts in England use our platform and we are in a good
position in Scotland and Wales. Telephonetics continues to be well represented
across other areas of the public sector. In the UK our platform is used by 12%
of all councils (district, metropolitan, city, borough or unitary), 21% of all
higher education institutions and 20% of all police forces. Twenty five new
customers were signed up during the year including North Middlesex University
Hospital, Royal Brompton Hospital, Derby City General Hospital, Guys and St
Thomas Hospital, London & Quadrant Housing Association, the Department of
Health, Essex Police and Midlothian Council.
Managed Services
Managed service revenues were flat at GBP3.68m (2007: GBP3.69m). Revenue is
principally derived from our MovieLINE product which is used by 80% of the UK's
major multiplex cinemas. A decrease in call volumes over the year reflects a
continuing trend towards internet ticket bookings, however this was offset by
fees earned from a one-off professional service project over the period. The
Telephonetics board of directors (the 'Board') continues to anticipate that
MovieLINE will represent a decreasing percentage of the business mix in future
periods.
Gross margin
We have maintained gross margin percentage at a healthy 61% (2007: 60%).
Research and development
The Group continues to invest in its product development with total development
expenditure including capitalised amounts of GBP0.83m (2007: GBP0.72m) of which
GBP0.22m (2007: GBP0.12m) was capitalised.
During the year our development team worked on seven new packaged applications,
all of which operate on our Speech Enabled Multi-Application Platform (SEMAP+).
These have now been released to market and we have already built a pipeline for
these products.
Of particular note are our multi-channel interactive outbound notification
products Confirmer and Remind+. These products are aimed primarily at the Health
and Public Sector market. We currently have a major deployment of Remind+ being
rolled out across 48 departments in a major teaching hospital where it is
expected to transform the hospital's Did-Not-Attend (DNA) figures and thus
reduce costs and improve patient care.
The development team has also integrated our popular Automatic Call Distribution
product into Lagan's Enterprise Case Management System - a product installed at
over 100 local authorities. This will help strengthen our proposition in local
government where we are already seeing strong interest in our most recently
released products.
Sales and marketing expenses
Expenditure on sales and marketing decreased by GBP0.16m to GBP3.03m (2007:
GBP3.19m) due to timing differences following the departure of two senior
executives who were not immediately replaced. Nonetheless, the Group is
dedicated to building the marketing expertise within the business and we will
continue to invest in marketing to maximise the revenues and opportunities from
our product portfolio.
General and administrative expenses
General and administrative expenses before restructuring costs decreased by 5%
to GBP1.66m (2007: GBP1.75m) as the Group benefited from the final stages of the
integration of Voice Integrated Products Ltd undertaken in 2007.
In May 2008, the Group reorganised its leasehold property and terminated various
leases earlier than expected. As a result GBP80,000 of property provisions were
surplus and credited back to the income statement as a restructuring credit.
Cash flows
The Group continues to generate significant cash and has a robust balance sheet
that is debt free and with net cash position of GBP5.39m (2007: GBP4.03m). The
cash generated during the year was up 39% to GBP1.56m (2007: GBP1.12m).
Cash spent on investing activities totalled GBP0.44m (2007: GBP0.24m)
principally comprising amounts spent on development expenditure and purchase of
software for use within the business.
Market & Strategy Update
Whilst the UK economy as a whole is currently suffering, the brunt of this has
fallen on the commercial sector. The public sector has been less affected and it
is this segment of the market where our business is primarily focussed. In 2008
the Group made a strategic decision to concentrate more effort on the health and
public sector markets with an emphasis on extending both the breadth and depth
of our engagement with customers in these sectors.
Public sector organisations have been tasked with providing more services to the
public, at higher levels of quality, whilst at the same time reducing costs. Our
core solutions, based around the SEMAP+ platform, have been designed to achieve
these very goals. By focusing on the effective handling of inbound and outbound
calls via our "automation agent" technology, and using natural speech
recognition to interact with the caller, we enable our clients to satisfy more
of their customers' needs and target those who need special attention.
At the same time our platform allows customers to leverage their technology
investment through the shared platform approach. This strategy enables us to
maintain our position as a supplier of choice in our core markets of health and
public sector with long term customer relationships and at the same time ensures
a diversity of revenue base so that we are not dependent on any one sector.
The other strategic decision made by the Group has been to avoid bespoke
application developments as this has been shown, by other companies operating
within our space, to provide volatile revenues and significantly lower margin.
We are actively seeking to develop alliances with other vendors where they can
help increase our penetration into core markets. Our announcements with Lagan,
ONI, Freedom and Siemens over the last year are good examples of progress made
on this front. The approach to our alliances varies from straight product
bundling to complex product integration.
We have aggressive targets to increase our share in core markets over the next
three years and we will look increasingly at providing complete end-to-end
solutions that help our clients interact with their customers. This will extend
our functionality beyond that of pure front-end telephony solutions to include
web interactions, business process management and other technologies which help
us provide a one-stop-shop to match the needs of our customers. We will become
increasingly solution-centric rather than product-centric.
Research and development will be focussed on ensuring that we continue to
deliver sophisticated, relevant solutions which not only solve more and more of
our customers' problems but which are also superior to those of our competitors.
They will also be encouraged to experiment with new approaches and technologies
to help ensure we continue to innovate and lead the way in our core markets.
Datadialogs
On 9 February 2009 the Company announced the acquisition of Eden Origin Ltd
("Eden"), trading as Datadialogs, the specialist provider of codeless Enterprise
Application Integration ("EAI"), Business Process Management ("BPM") and Mashup
Solutions.
Eden's solutions give customers the ability to create and deploy
business solutions rapidly without the need to develop code. Eden solutions
created in this way can integrate in real-time with virtually any existing IT
infrastructure. This allows Eden to bring together disparate systems into a
single unified environment very quickly, thereby streamlining user access and
process. Eden's products are well regarded in the public sector and
manufacturing and distribution sectors, where customers include Kier Group,
Affinity Sutton, Morrison Facilities Services, Comet and Bournemouth & Hampshire
Water. It has partnerships with Civica, Differentia Consulting and Sphere IT
that provide established routes to market.
The acquisition of Eden aligns with the Group strategy to provide complete
solutions for effective customer interaction. Whilst our existing solutions have
focused primarily at the front-end of the interaction i.e. interfacing with the
customer, Eden works "behind the scenes" at the back-end of the transaction,
providing seamless integration with existing systems and business processes.
Combining the two technologies will allow us to build solutions that have access
to more data, and can therefore offer more functionality, all in a much shorter
timescale due to the codeless nature of Eden. Furthermore, Eden's ability to
work directly with both legacy and emerging systems means that our customers
will receive immediate benefits without the need for any infra-structure change.
In the public sector, where there is a drive for single view and shared
services, Eden can sit at the core of the business to help achieve these goals.
Telephonetics automation agents then naturally benefit in exactly the same way
as live agents i.e. fewer screens to navigate and access to more information,
more easily without the need to search elsewhere. The end result is a smoother
customer interaction, with fewer touch-points, completed more efficiently and
therefore at lower cost.
Outlook
Despite the weak economic outlook for the UK, the Board believes the Group has a
portfolio of products and solutions that are well matched to the needs of its
core markets where funding has not, to date, been an issue. Assuming this
situation remains the case, the Board is cautiously optimistic that it can
continue to gain market share and increasingly dominate those sectors in which
the Group operates.
Investment has always been a high priority for the business in order to drive
our growth, and we will continue in this vein moving forward. In Technology we
realise the importance of ongoing research and development to ensure that we
continue to provide a best of breed solution. In Customer Services we seek
excellence in all interactions with our customers, particularly as the current
climate forces them to select suppliers who are stable, reliable and helpful. In
Sales and Marketing we focus on quality staff, with quality support and
encourage a relationship-building approach. These strategic investments will
develop our long-term revenues, build our customer base and in the process
increase shareholder value.
The Board feels that this is an ideal time to capitalise both on the strengths
of Telephonetics as well as to take advantage of the weakness of our
competitors. It has therefore recommended making significant investment in
additional marketing to include a number of carefully selected customer
acquisition opportunities. Whilst this strategy is expected to reduce short-term
profitability, investors should see an increase in market share as Telephonetics
continues to expand its customer base in these markets and thereby signs up
long-term contracts with consequent improved revenue visibility. As the economy
comes out of recession the Board believes that Telephonetics should have
significantly strengthened its market leadership position.
Audited consolidated income statement for the year ended 30 November 2008
+----------------+--------+--------+---------+---------+
| | | | 2008 | 2007 |
+----------------+--------+--------+---------+---------+
| | | | GBP'000 | GBP'000 |
+----------------+--------+--------+---------+---------+
| Revenue | | | 9,951 | 9,667 |
+----------------+--------+--------+---------+---------+
| Cost | | | (3,865) | (3,846) |
| of | | | | |
| sales | | | | |
+----------------+--------+--------+---------+---------+
| Gross | | | 6,086 | 5,821 |
| profit | | | | |
+----------------+--------+--------+---------+---------+
| Administrative | | | (5,220) | (5,821) |
| expenses | | | | |
+----------------+--------+--------+---------+---------+
| Profit from | | | 866 | - |
| operations | | | | |
+----------------+--------+--------+---------+---------+
| Profit | | | | |
| from | | | | |
| operations | | | | |
| analysed | | | | |
| as: | | | | |
+----------------+--------+--------+---------+---------+
| Profit | | 786 | 291 |
| from | | | |
| operations | | | |
| before | | | |
+-------------------------+--------+---------+---------+
| | | | |
| restructuring | | | |
| credit/ | | | |
| (costs) | | | |
+-------------------------+--------+---------+---------+
| | | | 80 | (291) |
| Restructuring | | | | |
| credit/ | | | | |
| (costs) | | | | |
+----------------+--------+--------+---------+---------+
| | | | 866 | - |
+----------------+--------+--------+---------+---------+
| Finance | | | (3) | (3) |
| expense | | | | |
+----------------+--------+--------+---------+---------+
| Finance | | | 208 | 142 |
| income | | | | |
+----------------+--------+--------+---------+---------+
| Profit | | | 1,071 | 139 |
| before | | | | |
| tax | | | | |
+----------------+--------+--------+---------+---------+
| Tax | | | (120) | 42 |
| (expense)/ | | | | |
| credit | | | | |
+----------------+--------+--------+---------+---------+
| Profit | | | 951 | 181 |
| for | | | | |
| the | | | | |
| year | | | | |
+----------------+--------+--------+---------+---------+
| Earnings | | | | |
| per | | | | |
| share | | | | |
+----------------+--------+--------+---------+---------+
| Basic | | | 0.87 | 0.17 |
| - | | | | |
| pence | | | | |
+----------------+--------+--------+---------+---------+
| Diluted | | | 0.80 | 0.16 |
| - pence | | | | |
+----------------+--------+--------+---------+---------+
| | | | | |
+----------------+--------+--------+---------+---------+
Audited consolidated balance sheet as at 30 November 2008
+-------------+--------+--------+---------+---------+
| | | | 2008 | 2007 |
+-------------+--------+--------+---------+---------+
| | | | GBP'000 | GBP'000 |
+-------------+--------+--------+---------+---------+
| Assets | | | | |
+-------------+--------+--------+---------+---------+
| Non-current | | | | |
| assets | | | | |
+-------------+--------+--------+---------+---------+
| Property, | | | 269 | 322 |
| plant & | | | | |
| equipment | | | | |
+-------------+--------+--------+---------+---------+
| Intangible | | | 11,093 | 10,952 |
| assets | | | | |
+-------------+--------+--------+---------+---------+
| Deferred | | | 33 | 73 |
| tax | | | | |
| assets | | | | |
+-------------+--------+--------+---------+---------+
| Total | | | 11,395 | 11,347 |
| non-current | | | | |
| assets | | | | |
+-------------+--------+--------+---------+---------+
| Current | | | | |
| assets | | | | |
+-------------+--------+--------+---------+---------+
| Inventories | | | 335 | 249 |
+-------------+--------+--------+---------+---------+
| Trade | | | 2,536 | 2,245 |
| & | | | | |
| other | | | | |
| receivables | | | | |
+-------------+--------+--------+---------+---------+
| Corporation | | | - | 33 |
| tax | | | | |
| receivable | | | | |
+-------------+--------+--------+---------+---------+
| Cash & | | | 5,389 | 4,028 |
| cash | | | | |
| equivalents | | | | |
+-------------+--------+--------+---------+---------+
| Total | | | 8,260 | 6,555 |
| current | | | | |
| assets | | | | |
+-------------+--------+--------+---------+---------+
| Total | | | 19,655 | 17,902 |
| assets | | | | |
+-------------+--------+--------+---------+---------+
| Liabilities | | | | |
+-------------+--------+--------+---------+---------+
| Current | | | | |
| liabilities | | | | |
+-------------+--------+--------+---------+---------+
| Trade | | | 5,149 | 4,322 |
| & | | | | |
| other | | | | |
| payables | | | | |
+-------------+--------+--------+---------+---------+
| Corporation | | | 81 | - |
| tax | | | | |
| liability | | | | |
+-------------+--------+--------+---------+---------+
| Provisions | | | 6 | 60 |
+-------------+--------+--------+---------+---------+
| Total | | | 5,236 | 4,382 |
| current | | | | |
| liabilities | | | | |
+-------------+--------+--------+---------+---------+
| Non-current | | | | |
| liabilities | | | | |
+-------------+--------+--------+---------+---------+
| Provisions | | | 49 | 125 |
+-------------+--------+--------+---------+---------+
| Total | | | 49 | 125 |
| non-current | | | | |
| liabilities | | | | |
+-------------+--------+--------+---------+---------+
| Total | | | 5,285 | 4,507 |
| liabilities | | | | |
+-------------+--------+--------+---------+---------+
| Net | | | 14,370 | 13,395 |
| assets | | | | |
+-------------+--------+--------+---------+---------+
| Capital | | | | |
| & | | | | |
| reserves | | | | |
+-------------+--------+--------+---------+---------+
| Share | | | 1,090 | 1,090 |
| capital | | | | |
+-------------+--------+--------+---------+---------+
| Share | | | 6,803 | 6,802 |
| premium | | | | |
+-------------+--------+--------+---------+---------+
| Reverse | | | 506 | 506 |
| acquisition | | | | |
| reserve | | | | |
+-------------+--------+--------+---------+---------+
| Merger | | | 4,951 | 4,951 |
| reserve | | | | |
+-------------+--------+--------+---------+---------+
| Retained | | | 1,020 | 46 |
| earnings | | | | |
+-------------+--------+--------+---------+---------+
| Total | | | 14,370 | 13,395 |
| equity | | | | |
+-------------+--------+--------+---------+---------+
Audited consolidated statement of changes in equity as at 30 November 2008
+------------+---------+---------+-------------+---------+------------+---------+
| | Share | Share | Reverse | Merger | Retained | Total |
| | capital | premium | acquisition | reserve | (deficit)/ | |
| | | | reserve | | earnings | |
+------------+---------+---------+-------------+---------+------------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------+---------+---------+-------------+---------+------------+---------+
| Balance | 1,083 | 6,798 | 506 | 4,951 | (308) | 13,030 |
| at 1 | | | | | | |
| December | | | | | | |
| 2006 | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
| Profit | - | - | - | - | 181 | 181 |
| for | | | | | | |
| the | | | | | | |
| year | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
| Total | - | - | - | - | 181 | 181 |
| recognised | | | | | | |
| income and | | | | | | |
| expense | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
| Share | - | - | - | - | 173 | 173 |
| based | | | | | | |
| payment | | | | | | |
| credit | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
| Issue | 7 | 4 | - | - | - | 11 |
| of | | | | | | |
| share | | | | | | |
| capital | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
| Balance | 1,090 | 6,802 | 506 | 4,951 | 46 | 13,395 |
| at 30 | | | | | | |
| November | | | | | | |
| 2007 | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
| | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
| Balance | 1,090 | 6,802 | 506 | 4,951 | 46 | 13,395 |
| at 1 | | | | | | |
| December | | | | | | |
| 2007 | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
| Profit | - | - | - | - | 951 | 951 |
| for | | | | | | |
| the | | | | | | |
| year | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
| Total | - | - | - | - | 951 | 951 |
| recognised | | | | | | |
| income and | | | | | | |
| expense | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
| Share | - | - | - | - | 23 | 23 |
| based | | | | | | |
| payment | | | | | | |
| credit | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
| Issue | - | 1 | - | - | - | 1 |
| of | | | | | | |
| share | | | | | | |
| capital | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
| Balance | 1,090 | 6,803 | 506 | 4,951 | 1,020 | 14,370 |
| at 30 | | | | | | |
| November | | | | | | |
| 2008 | | | | | | |
+------------+---------+---------+-------------+---------+------------+---------+
Audited consolidated cash flow statement for year ended 30 November 2008
+--------------+--------+--------+---------+---------+
| | | | 2008 | 2007 |
+--------------+--------+--------+---------+---------+
| | | | GBP'000 | GBP'000 |
+--------------+--------+--------+---------+---------+
| Cash | | | | |
| flow | | | | |
| from | | | | |
| operating | | | | |
| activities | | | | |
+--------------+--------+--------+---------+---------+
| Profit | | | 951 | 181 |
| for | | | | |
| the | | | | |
| year | | | | |
+--------------+--------+--------+---------+---------+
| | | | | |
| Adjustments | | | | |
| for: | | | | |
+--------------+--------+--------+---------+---------+
| | | | 149 | 259 |
| Depreciation | | | | |
+--------------+--------+--------+---------+---------+
| Loss | | | 18 | - |
| on | | | | |
| disposal | | | | |
| of | | | | |
| property, | | | | |
| plant & | | | | |
| equipment | | | | |
+--------------+--------+--------+---------+---------+
| | | | 188 | 170 |
| Amortisation | | | | |
+--------------+--------+--------+---------+---------+
| | | | (208) | (142) |
| Finance | | | | |
| income | | | | |
+--------------+--------+--------+---------+---------+
| | | | 3 | 3 |
| Finance | | | | |
| expense | | | | |
+--------------+--------+--------+---------+---------+
| | | | 23 | 173 |
| Share-based | | | | |
| payment | | | | |
| expense | | | | |
+--------------+--------+--------+---------+---------+
| | | | 120 | (42) |
| Income | | | | |
| tax | | | | |
| expense/ | | | | |
| (credit) | | | | |
+--------------+--------+--------+---------+---------+
| Operating | | | 1,244 | 602 |
| cash | | | | |
| flows | | | | |
| before | | | | |
| movements | | | | |
| in | | | | |
| working | | | | |
| capital & | | | | |
| provisions | | | | |
+--------------+--------+--------+---------+---------+
| | | | (86) | 42 |
| (Increase)/ | | | | |
| decrease/ | | | | |
| in | | | | |
| inventories | | | | |
+--------------+--------+--------+---------+---------+
| | | | (291) | (503) |
| (Increase) | | | | |
| in trade | | | | |
| and other | | | | |
| receivables | | | | |
+--------------+--------+--------+---------+---------+
| | | | 827 | 882 |
| Increase | | | | |
| in trade | | | | |
| and | | | | |
| other | | | | |
| payables | | | | |
+--------------+--------+--------+---------+---------+
| | | | (236) | 98 |
| (Decrease)/ | | | | |
| increase in | | | | |
| provisions | | | | |
+--------------+--------+--------+---------+---------+
| Cash | | | 1,564 | 1,121 |
| generated | | | | |
| from | | | | |
| operations | | | | |
+--------------+--------+--------+---------+---------+
| Interest | | | (3) | (3) |
| paid | | | | |
+--------------+--------+--------+---------+---------+
| Interest | | | 208 | 142 |
| received | | | | |
+--------------+--------+--------+---------+---------+
| Corporation | | | 34 | (52) |
| tax | | | | |
| reclaimed/ | | | | |
| (paid) | | | | |
+--------------+--------+--------+---------+---------+
| Net | | | 1,803 | 1,208 |
| cash | | | | |
| flow | | | | |
| from | | | | |
| operating | | | | |
| activities | | | | |
+--------------+--------+--------+---------+---------+
| Investing | | | | |
| activities | | | | |
+--------------+--------+--------+---------+---------+
| | | | (114) | (71) |
| Purchase | | | | |
| of | | | | |
| property, | | | | |
| plant & | | | | |
| equipment | | | | |
+--------------+--------+--------+---------+---------+
| | | | (216) | (124) |
| Development | | | | |
| expenditure | | | | |
+--------------+--------+--------+---------+---------+
| | | | (113) | (45) |
| Purchase | | | | |
| of other | | | | |
| intangible | | | | |
| assets | | | | |
+--------------+--------+--------+---------+---------+
| Net | | | (443) | (240) |
| cash | | | | |
| used | | | | |
| in | | | | |
| investing | | | | |
| activities | | | | |
+--------------+--------+--------+---------+---------+
| Financing | | | | |
| activities | | | | |
+--------------+--------+--------+---------+---------+
| Issue | | | 1 | 11 |
| of | | | | |
| ordinary | | | | |
| shares | | | | |
+--------------+--------+--------+---------+---------+
| Net | | | 1 | 11 |
| cash | | | | |
| from | | | | |
| financing | | | | |
| activities | | | | |
+--------------+--------+--------+---------+---------+
| Net | | | 1,361 | 979 |
| increase | | | | |
| in cash | | | | |
| & cash | | | | |
| equivalents | | | | |
+--------------+--------+--------+---------+---------+
| Cash & | | | 4,028 | 3,049 |
| cash | | | | |
| equivalents | | | | |
| at the | | | | |
| beginning | | | | |
| ofthe year | | | | |
+--------------+--------+--------+---------+---------+
| Cash & | | | 5,389 | 4,028 |
| cash | | | | |
| equivalents | | | | |
| at the end | | | | |
| of the | | | | |
| year | | | | |
+--------------+--------+--------+---------+---------+
Notes to the financial information for the year ended 30 November 2008
1. Basis of preparation
Extracts from Annual Report & Accounts
The consolidated profit and loss account, consolidated balance sheet,
consolidated cash flow statement and extracts from the notes to the accounts do
not constitute the Group's Annual Report & Accounts for the years ended 30
November 2008 or 2007, but is derived from them. Statutory accounts for 2007
have been delivered to the Registrar of Companies. The auditors have made a
report on the Group's statutory accounts for the year ended 2008 and 2007 under
section 235 of the Companies Act 1985 which does not contain a statement under
sections 237(2) or (3) of the Companies Act and are unqualified. The
consolidated financial statements of Telephonetics Plc were approved by the
directors on 25 February 2009. The statutory accounts will be filed with the
Registrar in due course.
Copies of the Annual Report & Accounts will be posted to shareholders on 19
March
2009. Further copies of this announcement can be downloaded from the website
www.telephonetics.co.uk or by applications to The Company Secretary,
Telephonetics Plc, Hamilton House, Marlowes, Hemel Hempstead, HP1 1BB.
International Financial Reporting Standards
Prior to 2008 the Group prepared its audited financial statements under UK
Generally Accepted Accounting Principles ('UK GAAP'). For the year ended 30
November 2008 the Group is required to prepare its consolidated financial
statements in accordance with International Financial Reporting Standards as
adopted by the EU ('EU IFRS'). As a consequence, these results have been
prepared using the recognition and measurement principles of EU IFRSs. The
principal accounting policies used in preparing these results together with
details of the affect of adopting EU IFRSs on the Group's income statement and
balance sheet were included in its interim result statement announced on 21
August 2008.
2. Operating expenses
+----------------------------------------------+--+-----+-------------+-----------+
| | | | 2008 | 2007 |
| | | | Audited | Audited |
+----------------------------------------------+--+-----+-------------+-----------+
| | | | GBP'000 | GBP'000 |
+----------------------------------------------+--+-----+-------------+-----------+
| Operating expenses are analysed as: | | | | |
+----------------------------------------------+--+-----+-------------+-----------+
| Research & development | | | 610 | 594 |
+----------------------------------------------+--+-----+-------------+-----------+
| Sales & marketing | | | 3,026 | 3,188 |
+----------------------------------------------+--+-----+-------------+-----------+
| General & administration | | | 1,584 | 2,039 |
+----------------------------------------------+--+-----+-------------+-----------+
| Analysed as: | | | | |
+----------------------------------------------+--+-----+-------------+-----------+
| General & administration before | | | 1,664 | 1,748 |
| restructuring (credit)/ expense | | | | |
+----------------------------------------------+--+-----+-------------+-----------+
| Restructuring (credit)/ expense | | | (80) | 291 |
+----------------------------------------------+--+-----+-------------+-----------+
| | | | 1,584 | 2,039 |
+----------------------------------------------+--+-----+-------------+-----------+
| | | | 5,220 | 5,821 |
+----------------------------------------------+--+-----+-------------+-----------+
The Group completed the final integration restructuring of Voice Integrated
Products Limited in 2007 resulting in a charge for that year of GBP291,000. That
expense consisted of a provision of GBP147,000 for vacant premises and
GBP144,000 of redundancy costs. In May 2008 the Group reorganised its leasehold
property and terminated various leases earlier than expected, as a result
GBP80,000 of the vacant property provision was surplus and has been credited
back to the income statement in the year.
3. Earnings per share
Earnings per ordinary share have been calculated using the weighted average
number of shares in issue during the relevant financial periods. The weighted
average number of equity shares in issue is 109,010,585 (2007 - 108,760,169) and
the earnings used is profit after tax being GBP951,000 (2007 - GBP184,000).
+------------------------------------------+----+----------------+--------------+
| | | 2008 | 2007 |
| | | Audited | Audited |
+------------------------------------------+----+----------------+--------------+
| | | Number | Number |
+------------------------------------------+----+----------------+--------------+
| Reconciliation of denominator: | | | |
+------------------------------------------+----+----------------+--------------+
| Weighted average number of shares | | 109,010,585 | 108,760,169 |
| used for the calculation of basic | | | |
| earnings per share | | | |
+------------------------------------------+----+----------------+--------------+
| Effect of dilutive ordinary | | 9,741,928 | 8,364,080 |
| shares options being exercised | | | |
+------------------------------------------+----+----------------+--------------+
| Weighted average number of shares used | | 118,752,513 | 117,124,249 |
| for the calculation of diluted earnings | | | |
| per share | | | |
+------------------------------------------+----+----------------+--------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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