TIDMVERO
RNS Number : 7938Z
Vero Software PLC
29 September 2009
+-------------------------------------+-------------------------------------+
| Embargoed until 7am | 8th April 2009 |
+-------------------------------------+-------------------------------------+
Vero Software Plc
("Vero Software" or "the Company")
Preliminary results for the year to 31 December 2008
Vero Software Plc, (AIM: VERO), a leading international supplier of software
solutions for the mould and die sector, announces Preliminary results for
the year to 31 December 2008, with yet another year of growth despite the
background of a significant global economic and financial downturn.
Financial and operating highlights:
* A revenue increase of 10% to GBP13.9m (2007: GBP12.7m) marking 20 years of
consecutive and unblemished turnover growth since the company's inception.
* EBITDA (earnings before interest, tax, depreciation and amortisation) increased
by 20% before exceptional items to GBP2.2m (2007: GBP1.9m)
* Operating Profit before exceptionals rose 20% to GBP1.5 million (2007: GBP1.3m)
* Pre-tax profit before exceptionals of GBP1.4 million (2007: GBP1.1 million)
* Basic earnings per share of 2.28p (2007: 1.79p), an increase of 27%
* Strong recurring revenue performance combined with an increase in sales of cost
saving analysis tools resisted the recessionary trends
* Completion of the total software solutions for plastic injection and progressive
die design processes enables future growth for these important parts of our
product range
Stephen Palframan, Chairman, commented: "Against the backdrop of a significant
worldwide financial and industrial crisis we are very pleased with our
organically driven, double figure revenue and profit increases.
Vero has been gradually improving its grip on the mould and die sector by
providing complete and highly specific solutions that were further advanced in
late 2008 through the introduction of nine new product modules containing
analysis software much needed in today's environment.
Although not easy in the present harsh industrial situation, 2009 trading to
date is not radically different from the previous year.Recurring revenue is
stronger than ever, and our product range's ability to reduce customers' costs
and production timescales stands us in good stead. The current economic climate
undoubtedly represents a new challenge in its global reach but the Company is
well placed to take advantage of any early rise in demand as the larger
manufacturing based economies recover."
Enquiries, please contact:
+-------------------------------------+-------------------------------------+
| Don Babbs | Paul Shackleton |
| Chief Executive | Daniel Stewart plc |
| Vero Software plc | 020 7776 6550 |
| 01242 542040 | |
| | |
+-------------------------------------+-------------------------------------+
| Julie Randall | Tania Wild / Will Henderson |
| Finance Director | Smithfield Consultants |
| Vero Software plc | 020 7360 4900 |
| 01242 542040 | |
| | |
+-------------------------------------+-------------------------------------+
CHAIRMAN'S STATEMENT
I am pleased to report a good set of results for 2008 despite the background of
trading conditions towards the latter part of the year which were particularly
harsh, reflecting the general global downturn.
Results
Turnover increased by 10% to GBP13.9 million (2007: GBP12.7m) partly due to the
strength of the Euro and Dollar but with strong growth in local currency terms
coming from both Germany and North America.
EBITDA (earnings before interest, tax, depreciation and amortisation) before
exceptional items increased by 20% to GBP2.25 million (2007:
GBP1.88m), operating profit before exceptionals rose 20% to GBP1.53m (2007:
GBP1.09m) and profit before tax and exceptionals rose 25% to GBP1.37 million
(2007: GBP1.1m). Earnings per share increased by 27% to 2.28p (2007: 1.79p).
The tax charge showed a significant reduction to GBP75k (2007: GBP420k), largely
due to a new taxation regime in Italy where Research and Development credits are
now available.
Exceptional costs of GBP445,000 were incurred during the year as a result of
restructuring in our Italian and Chinese subsidiaries and the move of our two UK
offices to a single location in Cheltenham, Gloucestershire. The Italian and UK
office rationalisations have made significant cost savings as well as providing
more efficient and focused product development and sales effort.
Dividend Policy
The company completed a capital reduction in August in order to allow the
payment of future dividends. The Board has however decided to defer the
Company's maiden dividend until there are signs of an end to the current
economic crisis.
Outlook
2008 marked the 20th anniversary of the Company's foundation which has seen
continual revenue growth and a tripling in size since flotation. The Company's
record in managing difficult times and recessions has been well proven
throughout its lifetime and the status of the expanded product range provides
fuel for growth.
Recurring revenue is stronger than ever, and our product range's ability to
reduce customers' costs and production timescales stands us in good stead. The
current economic climate undoubtedly represents a new challenge in its global
reach but the Company is well placed to take advantage of any early rise in
demand as the larger manufacturing based economies recover.
The long serving staff of Vero Software are also well proven in their
technological and commercial capabilities and I would like to take this
opportunity to thank them all for their focused contribution during 2008.
Stephen Palframan
Chairman
8 April 2009
CHIEF EXECUTIVE'S REVIEW
Business Review
Vero sells software to mould and die makers ranging from very small companies to
large household names across a wide range of sectors including automotive,
aerospace, electronic, medical, toys and household goods. While many of these
companies are under pressure from the effects of the downturn our niche depends
more on the instigation of new models rather than the volume of production. The
drive for newer more efficient products has sustained the sector through
previous recessions and the latter part of 2008.
Sales to our long term customers embedding software with their own software
solutions or machine tools (OEM customers) has risen steadily and 2008 saw a
further increase in this trend with the addition of three new providers
incorporating our software.
As noted at the half year maintenance agreement related turnover rose to 28% of
revenues, which together with long term OEM revenues and perennial customers who
order new software each year, took total recurring revenues to over 50% of total
turnover.
Operating Expenses
The near dramatic fall in sterling during 2008 served to increase both revenues
and overseas operating costs in our foreign offices. The significant movements
in exchange rates in the second half of the year also had the effect of
increasing costs relating to overseas subsidiaries.
The growth in selling expenses before restructuring costs (11%) and
administrative expenses before restructuring costs (3%) are as a result of the
exchange rate movements but also reflects the extent of our overseas sales
efforts while unfortunately hiding the effect of substantive 2008 cost cutting
which will become effective in 2009.
Product Development and Other Operating Income
Product development expenditure of GBP1,008,000 has been capitalised (2007:
GBP1,026,000) in accordance with International Financial Reporting Standards.
Our continuing investment in product development means that the latest product
releases have added nine new modules to the existing forty five applications
with a significant improvement in our analysis capabilities.
These applications allow customers, for example, to simulate the effectiveness
of a plastic injection mould design before embarking on detail design or
construction. These newly introduced developments provide substantial cost
savings in an environment that is keen to cut costs.
Taxation and Earnings per Share
Earnings before exceptional costs, interest, tax, depreciation and amortisation
(EBITDA) were GBP2.25 million, an increase of 20% on the previous year (2007:
GBP1.88 million). Vero also recorded a pre-tax profit before exceptionals of
GBP1.37m (2007: GBP1.09m). The Company incurred a tax charge of GBP0.01m (2007:
GBP0.42m). The reduction in the tax charge has arisen mainly because new
research and development tax credits were made available in Italy. Exceptional
costs of GBP445,000 were incurred during the year as a result of restructuring
in our Italian and Chinese subsidiaries and the move of our two UK offices to a
single location in Cheltenham, Gloucestershire.The Company recorded a post tax
profit before exceptionals of GBP1.3m and after exceptionals of GBP0.85m (2007:
GBP0.67m). Basic earnings per share were 2.28p (2007: 1.79p) an increase of 27%.
Cash Flow and Net Funds
Cash generated from operations in 2008 was GBP1.9 million compared to an inflow
of GBP1.7 million in 2007. The cash balances at the year end were GBP1.6 million
(2007: GBP0.81m), with GBP1.5 million of short-term borrowings (2007: GBP0.83m),
resulting in net funds of GBP0.09 million (2007: net short term
borrowings GBP0.02m). 2008 also marked the end of deferred payments made to
vendors of our last three acquisitions that have affected cash balances in
recent years. Net debt increased to GBP2.9 million from GBP2.7 million GBP 1.4m
of this relates to advantageous Italian term loans achieved through technology
grants and banks repayable over 3 to 5 years. The Company has reclassified
GBP0.86m of UK term loans made by Fortis Bank as current liabilities as a result
of its covenant position and as required by International Financial Reporting
Standards. Vero has received a 'letter of comfort' from Fortis Bank stating that
it is not their intention to demand repayment of the facilities. The Board is
actively seeking refinancing of these loans.
Interest payments during the year were GBP213,000 (2007: GBP218,000).
Summary
2008 was another strong performance year both in terms of new products and
financial performance. Far from standing still the Company improved its position
in the market place and remains tightly focused on a speciality niche that
requires right first time solutions to reduce costs.
The well documented downturn will be a challenge in 2009 but comes at a time
when the Company has amassed a loyal customer following and is best placed to
provide the complete solutions required by our clients to provide outstanding
product capabilities.
Don Babbs
Chief Executive
8 April 2009
Vero Software Plc
Consolidated Income Statement
For the year ended 31 December 2008
+----------------------------+------+---------------+-------------+------------+---------+
| | | Ordinary |Exceptional | Total | |
+----------------------------+------+---------------+-------------+------------+---------+
| | | 2008 | 2008 | 2008 | 2007 |
+----------------------------+------+---------------+-------------+------------+---------+
| | | GBP'000 | GBP'000 | GBP'000 |GBP'000 |
+----------------------------+------+---------------+-------------+------------+---------+
| | | | | | |
+----------------------------+------+---------------+-------------+------------+---------+
| Revenue | | 13,913 | - | 13,913 | 12,671 |
+----------------------------+------+---------------+-------------+------------+---------+
| Cost of Sales | | (833) | - | (833) | (766) |
+----------------------------+------+---------------+-------------+------------+---------+
| Gross Profit | | 13,080 | - | 13,080 | 11,905 |
+----------------------------+------+---------------+-------------+------------+---------+
| | | | | | |
+----------------------------+------+---------------+-------------+------------+---------+
| Selling expenses | | (6,345) | (343) | (6,688) | (5,691) |
+----------------------------+------+---------------+-------------+------------+---------+
| Administrative expenses | | (2,501) | (93) | (2,594) | (2,434) |
+----------------------------+------+---------------+-------------+------------+---------+
| Product development | | (2,047) | (9) | (2,056) | (1,917) |
+----------------------------+------+---------------+-------------+------------+---------+
| Net other operating income | | 60 | - | 60 | 12 |
+----------------------------+------+---------------+-------------+------------+---------+
| Earnings before interest, | | | | | |
| tax, | | | | | |
+----------------------------+------+---------------+-------------+------------+---------+
| depreciation and | | 2,247 | (445) | 1,802 | 1,875 |
| amortisation (EBITDA) | | | | | |
+----------------------------+------+---------------+-------------+------------+---------+
| Depreciation | | (205) | - | (205) | (213) |
+----------------------------+------+---------------+-------------+------------+---------+
| Amortisation | | (509) | - | (509) | (390) |
+----------------------------+------+---------------+-------------+------------+---------+
| Operating profit | | 1,533 | (445) | 1,088 | 1,272 |
+----------------------------+------+---------------+-------------+------------+---------+
| Interest income | | 34 | - | 34 | 27 |
+----------------------------+------+---------------+-------------+------------+---------+
| Interest expense | | (198) | - | (198) | (211) |
+----------------------------+------+---------------+-------------+------------+---------+
| Profit before taxation | | 1,369 | (445) | 924 | 1,088 |
+----------------------------+------+---------------+-------------+------------+---------+
| Taxation | | (75) | - | (75) | (420) |
+----------------------------+------+---------------+-------------+------------+---------+
| Profit after taxation | | 1,294 | (445) | 849 | 668 |
+----------------------------+------+---------------+-------------+------------+---------+
| | | | | | |
+----------------------------+------+---------------+-------------+------------+---------+
| Earnings per share - pence | | | | 2.28 | 1.79 |
| (basic ) | | | | | |
+----------------------------+------+---------------+-------------+------------+---------+
| Earnings per share - pence | | | | 2.27 | 1.77 |
| (fully diluted ) | | | | | |
+----------------------------+------+---------------+-------------+------------+---------+
+-------------------------------------+-------+------------+------------+
| Consolidated balance sheet | | | |
+-------------------------------------+-------+------------+------------+
| | | Year ended 31 December |
+-------------------------------------+-------+-------------------------+
| | | 2008 | 2007 |
+-------------------------------------+-------+------------+------------+
| | | GBP'000 | GBP'000 |
+-------------------------------------+-------+------------+------------+
| ASSETS | | | |
+-------------------------------------+-------+------------+------------+
| Non-current assets | | | |
+-------------------------------------+-------+------------+------------+
| Property, plant and equipment | | 854 | 1,043 |
+-------------------------------------+-------+------------+------------+
| Goodwill | | 3,066 | 3,055 |
+-------------------------------------+-------+------------+------------+
| Other intangible assets | | 3,837 | 2,909 |
+-------------------------------------+-------+------------+------------+
| Investments | | 1 | 1 |
+-------------------------------------+-------+------------+------------+
| Deferred tax | | 239 | 147 |
+-------------------------------------+-------+------------+------------+
| | | 7,997 | 7,155 |
+-------------------------------------+-------+------------+------------+
| | | | |
+-------------------------------------+-------+------------+------------+
| Current assets | | | |
+-------------------------------------+-------+------------+------------+
| Inventories | | 14 | 18 |
+-------------------------------------+-------+------------+------------+
| Trade and other receivables | | 7,904 | 6,364 |
+-------------------------------------+-------+------------+------------+
| Current tax | | 105 | 53 |
+-------------------------------------+-------+------------+------------+
| Financial assets | | - | 111 |
+-------------------------------------+-------+------------+------------+
| Cash and cash equivalents | | 1,632 | 812 |
+-------------------------------------+-------+------------+------------+
| | | 9,655 | 7,358 |
+-------------------------------------+-------+------------+------------+
| Total assets | | 17,652 | 14,513 |
+-------------------------------------+-------+------------+------------+
| | | | |
+-------------------------------------+-------+------------+------------+
| LIABILITIES | | | |
+-------------------------------------+-------+------------+------------+
| Non-current liabilities | | | |
+-------------------------------------+-------+------------+------------+
| Bank loans and borrowings | | 1,119 | 1,976 |
+-------------------------------------+-------+------------+------------+
| Other creditors | | 13 | 19 |
+-------------------------------------+-------+------------+------------+
| Deferred tax | | 637 | 539 |
+-------------------------------------+-------+------------+------------+
| Provisions | | 638 | 524 |
+-------------------------------------+-------+------------+------------+
| | | 2,407 | 3,058 |
+-------------------------------------+-------+------------+------------+
| | | | |
+-------------------------------------+-------+------------+------------+
| Current liabilities | | | |
+-------------------------------------+-------+------------+------------+
| Trade and other payables | | 846 | 649 |
+-------------------------------------+-------+------------+------------+
| Current tax | | 368 | 150 |
+-------------------------------------+-------+------------+------------+
| Bank loans and borrowings | | 3,374 | 1,496 |
+-------------------------------------+-------+------------+------------+
| Deferred revenue | | 1,701 | 1,457 |
+-------------------------------------+-------+------------+------------+
| Financial liabilities | | 122 | 43 |
+-------------------------------------+-------+------------+------------+
| Other creditors | | 2,192 | 2,072 |
+-------------------------------------+-------+------------+------------+
| | | 8,603 | 5,867 |
+-------------------------------------+-------+------------+------------+
| | | | |
+-------------------------------------+-------+------------+------------+
| Total liabilities | | 11,010 | 8,925 |
+-------------------------------------+-------+------------+------------+
| | | | |
+-------------------------------------+-------+------------+------------+
| EQUITY | | | |
+-------------------------------------+-------+------------+------------+
| Issued share capital | | 186 | 186 |
+-------------------------------------+-------+------------+------------+
| Share premium | | 1,860 | 5,860 |
+-------------------------------------+-------+------------+------------+
| Other reserves | | 26 | (179) |
+-------------------------------------+-------+------------+------------+
| Retained earnings | | 4,570 | (279) |
+-------------------------------------+-------+------------+------------+
| Total equity | | 6,642 | 5,588 |
+-------------------------------------+-------+------------+------------+
| Total equity and liabilities | | 17,652 | 14,513 |
+-------------------------------------+-------+------------+------------+
| | | | |
+-------------------------------------+-------+------------+------------+
+--------------------------------------+-----------+----------+----------+
| Consolidated cash flow statement | | | |
+--------------------------------------+-----------+----------+----------+
| | | Year ended 31 |
| | | December |
+--------------------------------------+-----------+---------------------+
| | | 2008 | 2007 |
+--------------------------------------+-----------+----------+----------+
| | | GBP'000 | GBP'000 |
+--------------------------------------+-----------+----------+----------+
| Cash flows from operating activities | | | |
+--------------------------------------+-----------+----------+----------+
| Cash generated from operations | | 1,916 | 1,746 |
+--------------------------------------+-----------+----------+----------+
| Interest paid | | (213) | (218) |
+--------------------------------------+-----------+----------+----------+
| Taxes paid | | (39) | (169) |
+--------------------------------------+-----------+----------+----------+
| Net cash from operating activities | | 1,664 | 1,359 |
+--------------------------------------+-----------+----------+----------+
| | | | |
+--------------------------------------+-----------+----------+----------+
| Cash flows from investing activities | | | |
+--------------------------------------+-----------+----------+----------+
| Acquisition of subsidiaries net of | | - | 1 |
| cash acquired | | | |
+--------------------------------------+-----------+----------+----------+
| Payment of deferred consideration | | (587) | (539) |
+--------------------------------------+-----------+----------+----------+
| Purchase of property, plant and | | (173) | (97) |
| equipment | | | |
+--------------------------------------+-----------+----------+----------+
| Proceeds from sale of property, | | 247 | 26 |
| plant and equipment | | | |
+--------------------------------------+-----------+----------+----------+
| Purchases of intangible assets | | (197) | (45) |
+--------------------------------------+-----------+----------+----------+
| Capitalised product development | | (1,008) | (1,026) |
+--------------------------------------+-----------+----------+----------+
| Sale of financial asset | | 118 | 106 |
+--------------------------------------+-----------+----------+----------+
| Interest received | | 34 | 29 |
+--------------------------------------+-----------+----------+----------+
| Net cash used in investing | | (1,566) | (1,545) |
| activities | | | |
+--------------------------------------+-----------+----------+----------+
| | | | |
+--------------------------------------+-----------+----------+----------+
| Cash flows from financing activities | | | |
+--------------------------------------+-----------+----------+----------+
| Payments of finance lease | | (81) | (70) |
| liabilities | | | |
+--------------------------------------+-----------+----------+----------+
| Loans | | 524 | 462 |
+--------------------------------------+-----------+----------+----------+
| Loans repaid | | (613) | (546) |
+--------------------------------------+-----------+----------+----------+
| Net cash used in financing | | (170) | (154) |
| activities | | | |
+--------------------------------------+-----------+----------+----------+
| | | | |
+--------------------------------------+-----------+----------+----------+
| Net decrease in cash and cash | | (72) | (340) |
| equivalents | | | |
+--------------------------------------+-----------+----------+----------+
| Cash and cash equivalents at | | (16) | 343 |
| beginning of the year | | | |
+--------------------------------------+-----------+----------+----------+
| Exchange gains / (losses) on cash and cash | 180 | (19) |
| equivalents | | |
+--------------------------------------------------+----------+----------+
| Cash and cash equivalents at end of | | 92 | (16) |
| the year | | | |
+--------------------------------------+-----------+----------+----------+
| | | | |
+--------------------------------------+-----------+----------+----------+
| | | | |
+--------------------------------------+-----------+----------+----------+
Consolidated statement of changes in equity
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| | | | Share | Trans | | | |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| | Share | Share | Based | lation | Other |Retained | Total |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| |Capital |Premium |Compensation |Reserve |Reserves |Earnings | Equity |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| |GBP'000 |GBP'000 | GBP'000 |GBP'000 | GBP'000 | GBP'000 |GBP'000 |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| | | | | | | | |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| As at | 186 | 5,860 | 71 | (142) | 10 | (1,053) | 4,932 |
| 1 | | | | | | | |
| January | | | | | | | |
| 2007 | | | | | | | |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| Profit | - | - | - | - | - | 668 | 668 |
| for | | | | | | | |
| the | | | | | | | |
| year | | | | | | | |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| Movement | - | - | 35 | - | - | - | 35 |
| for the | | | | | | | |
| year | | | | | | | |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| Transfer | - | - | (106) | - | - | 106 | - |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| Currency | - | - | - | (49) | 2 | - | (47) |
| translation | | | | | | | |
| differences | | | | | | | |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| As at | 186 | 5,860 | - | (191) | 12 | (279) | 5,588 |
| 31 | | | | | | | |
| December | | | | | | | |
| 2007 | | | | | | | |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| | | | | | | | |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| Profit | - | - | - | - | - | 849 | 849 |
| for | | | | | | | |
| the | | | | | | | |
| year | | | | | | | |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| Transfer | - | (4,000) | - | - | - | 4,000 | - |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| Currency | - | - | - | 203 | 2 | - | 205 |
| translation | | | | | | | |
| differences | | | | | | | |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
| As at | 186 | 1,860 | - | 12 | 14 | 4,570 | 6,642 |
| 31 | | | | | | | |
| December | | | | | | | |
| 2008 | | | | | | | |
+-------------+---------+---------+--------------+---------+----------+----------+---------+
1. Dividend
The directors do not recommend the payment of a dividend.
2. Exceptional costs
The directors consider the costs associated with the restructuring of the group
to be exceptional. Such costs, together with associated redundancy costs, have
been disclosed as exceptional within a separate column in the income statement
3.Financial information
The figures for the year ended 31 December 2008 have been extracted from the
full unaudited financial statements of Vero Software Plc for the year ended 31
December 2008. The auditors expect to give an unqualified opinion on the
financial statements however their report will include an emphasis of matter
paragraph in respect of going concern. The group was in breach of its loan
covenants during the year in respect of UK loans totalling GBP1.36m and the loan
balances therefore became repayable on demand. The group has not yet agreed new
long term financing in the UK and this is considered to indicate a material
uncertainty which could cast doubt over the group's ability to continue as a
going concern. The Group has received a 'letter of comfort' from Fortis Bank
stating that it is not their intention to demand repayment of the facilities.
The figures have been prepared and compiled in accordance with International
Financial Reporting Standards. The comparative figures for the year ended 31
December 2007 have been taken from but do not constitute, the group's statutory
accounts for the year. Those statutory accounts have been reported on by the
Group's auditors and have been delivered to the Register of Companies. The
report of the auditors was unqualified and did not contain a statement under
section 237 (2) or (3) of the Companies Act 1985.
The annual report will be sent to shareholders in due course. Copies of this
announcement and the full statutory accounts can be obtained, when available,
free of charge, from the Company's office at The Hadley House, Bayshill Road,
Cheltenham, Gloucestershire, GL50 3AW or on the Company's website:
www.vero-software.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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