RNS Number:7792O
Computer Software Group PLC
18 August 2003
Computer Software Group plc
Final Results for the year ended 28 February 2003 (Replacement)
The issuer advises that the following replaces the announcement released under
RNS number 75710 at 7.00 a.m. today. In note 5 to the Final Results a reference
was made to the Company's forthcoming EGM. This should have been a reference to
the Company's forthcoming AGM which will be held on 23 October 2003 at 11.00am
at the Company's registered office. The full amended text appears below.
Chairman's Statement
I am pleased to present my report for Computer Software Group plc, formerly
Software For Sport plc, (the "Company" and the "Group") for the year ended 28
February 2003.
The Group's results are encouraging and show that the improvements in underlying
trading performance reported in the 2002 Interim Report have been sustained
during the second half of the year.
As I commented in my statement for the 2002 Annual Report, the Group is actively
seeking opportunities to maximise growth potential and to strengthen its
position. Accordingly, the Group acquired Wizz400 Limited ("Wizz400"), providing
interactive e-business solutions on the IBM iSeries platform, in January 2003
and Chorus Application Software Limited ("Chorus"), providing specialist
accounting, distribution and payroll solutions on the IBM iSeries and NT
platforms in May 2003.
Results and Dividend
Turnover for the year ended 28 February 2003 was #3,584,000 (2002: #3,030,000)
and comprised revenue from licence sales, services and software maintenance
contracts. The increase in turnover is due to greater focus on selling and
marketing activities.
The Group made an operating loss of #148,000 (2002: loss #89,000) before
charging #1,232,000 (2002: #1,170,000) for goodwill amortisation.
The directors do not recommend the payment of a dividend.
Operating review
In the TALENT division, covering the sports and cross-industry CRM sectors, we
have added Hull City and Mansfield Town Football Clubs, Wadsworth Electronics
Limited and Parkersell Limited to our customer base during the year.
The Operations Centre at Nantwich, undertaking the outsourcing requirements of
sports clubs such as membership renewals and season ticket sales, continues to
thrive and now includes Leeds United Football Club in its customer list.
Significant marketing resources are being directed towards furthering our
relationships with IBM and other appropriate partners in the CRM marketplace. In
recent months we have run several campaigns and co-hosted seminars jointly with
IBM and are confident that we are raising our profile and establishing our
position as a supplier of CRM software and services on the iSeries platform.
Technical activity during the year has centred on the development and release of
the following:
*Version 4.6 of the TALENT software suite - introducing the "MyTalent" and
"MyCustomer" portal screens offering enhanced functionality and a range of
real-time integration improvements
*A revised TALENT Catalogue module for use with Cognos Business
Intelligence
*The launch of TALENT Mobile Office (a replacement for TALENT Field
Service Automation) offering off-line capability in the field
*A transaction Manager module for automatic profile building of client's
customer bases
*A FastAdd module for Mobile Office offering retailers the ability to
capture customer data at point of sale
The Group acquired Wizz400 Limited in January 2003, supplying products and
services to allow applications hosted on the IBM iSeries platform to be
web-enabled rapidly, securely and cost-effectively, and accessed through laptop,
GPRS phone or PDA.
In the Integra division, the additions to the customer base during the year
include the British Dietetic Association, British Retail Consortium, the
Institute of Environmental Management and Assessment, the Institute of Public
Finance, the National Association of Estate Agents, the National Association of
Probation Officers and the NHS Confederation. Increased development activity
during the year has resulted in a number of key successes:
*Version 3.1 of the Integra suite of software providing improved
functionality and operation
*The expansion of the Web publishing tools to complement the Integra Back
Office systems
During the year the Integra User Group have played an active role in the
development of the product.
Board changes
As previously announced, Stephen Pinning stepped down as Director and Chief
Executive on 30 September 2002. Following the acquisition of Chorus on 29 May
2003, Neil Cross, previously Managing Director, was appointed Executive Director
with full operational control of the Chorus division. On the same date Barbara
Firth, Head of Finance and Administration, and Jolanta Pilecka, Head of
Marketing, were appointed Executive Directors and Robert Downey and Vinodka
Murria were appointed Non-Executive Directors.
Outlook for the year to February 2004
I am pleased to report that the Group's results for the first five months of the
current year show an operating profit before goodwill amortisation.
We have significantly increased sales resource across the Group by the
recruitment of several people at senior level in addition to upgrading the
marketing budget to ensure the continued generation of a strong prospect
pipeline.
In the Integra division, we are about to release Version 3.2 offering new
functionality and enhanced "look and feel" and to include new modules
integrating with Microsoft Outlook and Exchange. Recent new customers include
the Chartered Institution of Building Services Engineers, the Chartered
Institute of Housing and the Retail Motor Industry Federation.
In the TALENT division, we are focussing on the integration of Wizz400 and
improving sales across the division and we continue to develop our Venue module
providing an innovative and comprehensive solution for medium and large-scale
venues. New customers include Alfred Dunhill Limited and Hellerman Tyton
Limited.
In the newly acquired Chorus division, we are seeking to maximise cost and
revenue synergies and to utilise Group marketing resource to refresh and extend
the pipeline.
Conclusion
The acquisitions of Wizz400 in January 2003 and Chorus in May 2003 have given
the Group an improved product range and an increased customer base in addition
to cost synergies. We are enthusiastically looking forward to a year of
opportunity in which to further strengthen the Group's position by both organic
growth and strategic acquisition.
Michael Jackson
Chairman
Consolidated Profit and Loss Account
For the Year Ended 28 February 2003
2003 2002
#'000 #'000 #'000 #'000
Turnover 3,584 3,030
Cost of sales (779) (595)
----------- -----------
Gross profit 2,805 2,435
Sales and marketing costs (757) (541)
Administrative expenses (3,474) (3,184)
Less: goodwill amortisation 1,232 1,170
---------- ---------
Administrative expenses before
goodwill amortisation (2,242) (2,014)
Other operating income 46 31
--------- ---------
Operating loss before
goodwill amortisation (148) (89)
Goodwill amortisation (1,232) (1,170)
--------- ---------
Operating loss (1,380) (1,259)
Exceptional item - (373)
--------- ---------
Loss before interest (1,380) (1,632)
Interest receivable 3 6
Interest payable and (22) (7)
similar charges
--------- ---------
Loss on ordinary activities (1,399) (1,633)
before taxation
Tax on loss on 40 60
ordinary activities
====== ======
Loss on ordinary activities
after taxation transferred
to reserves (1,359) (1,573)
====== ======
Loss per Ordinary (0.95) (1.19)
share (pence)
====== ======
Diluted loss per Ordinary (0.97) (1.24)
share (pence)
====== ======
The Group has no gains or losses other than those reported in the profit and
loss account.
All amounts relate to continuing operations.
Consolidated Balance Sheet
As at 28 February 2003
2003 2002
#'000 #'000 #'000 #'000
Fixed Assets
Intangible 2,866 3,769
Tangible 92 125
--------- ---------
2,958 3,894
Current Assets
Debtors 1,258 1,253
Cash at bank and in 32 44
hand
---------- ----------
1,290 1,297
Creditors
Amounts falling due (1,736) (1,597)
within one year
---------- ----------
Net Current Liabilities (446) (300)
---------- ----------
Total Assets Less 2,512 3,594
Current Liabilities
Creditors
Amounts falling due (7) (15)
after more than one year
---------- ----------
Net Assets 2,505 3,579
======= =======
Capital And Reserves
Called up share capital 7,417 7,131
Share premium account 1,991 1,991
Merger Reserve 641 641
Profit and loss account (7,544) (6,184)
---------- ----------
Shareholders' Funds 2,505 3,579
(All equity) ======= =======
Consolidated Cash Flow Statement
For the Year Ended 28 February 2003
Reconciliation of operating loss to net cash outflow from operating activities
2003 2002
#'000 #'000
Operating loss (1,380) (1,259)
Depreciation charge 71 102
Amortisation of goodwill 1,232 1,170
Exceptional item - (373)
Profit on disposal of fixed assets - (8)
(Increase) in debtors (15) (499)
Increase/(decrease) in creditors 82 (44)
---------- ----------
Net cash outflow from operating activities (10) (911)
---------- ----------
Cash Flow Statement
Net cash outflow from operating activities (10) (911)
Returns on investments and servicing of (19) (1)
finance
Taxation 57 156
Capital expenditure and financial investment (22) 18
Acquisitions (44) (521)
---------- ----------
Net cash outflow before financing (38) (1,259)
Financing (31) 565
---------- ----------
Decrease in cash (69) (694)
====== ======
Reconciliation of net cashflow to movement in net debt
Decrease in cash (69) (694)
Cash outflow from decrease in net debt 31 167
Loans and finance leases acquired with - (152)
subsidiary
New finance leases (16) -
---------- ----------
(54) (679)
Net cash at 1 March 2002 2 681
---------- ----------
Net (debt)/cash at 28 February 2003 (52) 2
====== ======
Notes to the Financial Statements
1. Status of Information
The financial information presented in this preliminary announcement does not
constitute statutory accounts within the meaning of the Companies Act 1985. The
information has however been extracted from the Company's statutory accounts for
the year ended 28 February 2003 which were approved by the Board on 15 August
2003 and on which the Company's auditors have given an unqualified opinion.
2. Taxation
2003 2002
#'000 #'000
Analysis of credit in the year
Current tax:
UK corporation tax - -
Adjustments in respect of prior periods 40 60
---------- ----------
Total current tax 40 60
---------- ----------
There is no current tax charge in respect of this year or the prior year due to
tax losses in both periods.
The Group has tax losses of approximately #3,684,000 (2002: #3,597,000)
available to carry forward.
The Group's tax losses would give rise to a deferred tax asset. This asset has
not been recognised in these financial statements as it will only be deemed
recoverable once the Group achieves consistent taxable profitability.
The tax credit in the current year represents research and development tax
credit in respect of a prior year.
3. Loss per Ordinary share
The calculation of basic loss per Ordinary share is based on a post tax loss of
#1,359,000 (2002: #1,573,000) and on 143,114,000 (2002: 131,775,000), being the
weighted average number of ordinary shares in issue during the year.
The diluted loss per Ordinary share is calculated as below:
2003 2002
#'000 #'000
Basic post tax loss 1,359 1,573
========= =========
Basic weighted average number of shares 143,114,000 131,775,000
Dilution for employee share options & warrants (2,833,000) (4,493,000)
--------------- ---------------
- -
Diluted weighted average number of shares 140,281,000 127,282,000
========== ==========
4. Acquisition of Wizz400 Limited
The Company acquired 100% of the issued share capital of Wizz400 Limited on 28
January 2003. The consideration comprised #49,000 in cash plus expenses and
5,714,000 ordinary shares in the Company with a nominal value of 5p per share.
The fair value of the net assets acquired were as follows:
#'000
Debtors 9
Cash 5
Creditors (8)
---------
Net assets acquired 6
Goodwill 329
---------
Consideration 335
======
Consideration satisfied by:
Shares issued 286
Cash 49
---------
335
======
There were no material differences between the book and fair values of the
assets acquired. In the last financial period to 28 January 2003, Wizz400
Limited made a profit after tax of #6,000. In the opinion of the Directors, the
profit for the period from acquisition to the year-end is considered to be
immaterial.
5. Share Consolidation
To simplify the Company's share capital, it will be proposed at the
Company's AGM, to be held on 23 October at 11.00 am at the Company's
registered office, that every 10 existing ordinary shares of 1p be
consolidated into 1 new ordinary share of 10p. Fractions aising from the
share consolidation will be aggregated and sold in the market for the
benefit of the Company. No variation in the rights or restictions attaching
to such shares is proposed
6. Annual Report and Financial Statements
Copies of the Annual Report and Financial Statements for the year ended 28
February 2003 will be circulated to shareholders shortly and may be obtained
after the posting date from Barbara Firth, Company Secretary, Computer Software
Group plc, Integra House, 138-140 Alexandra Road, London SW19 7JY
This information is provided by RNS
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