Final Results
(Thomson Reuters ONE) - FOR IMMEDIATE RELEASE3 August 2009Intellego Holdings plc ('Intellego' or 'the Company')FINAL RESULTS FOR THE YEAR ENDED 31 MARCH 2009The Board of Intellego, the AIM traded eLearning and compliancecourseware solutions business, is pleased to announce final auditedresults for the year ended 31 March 2009.HIGHLIGHTS* Revenues increased by 40% to £2.34 million (2008: £1.67 million).* Losses grew to £502,608 (2008: £408,118).* Losses include non-recurring annual costs and those related to the previously announced restructuring, totaling £423,914.* Potential for recurring revenues 2009/10 to more than double .* Acquisition and successful integration of Zenosis Limited and The Professional Development Partnership Limited ("PDP").* Post balance sheet placing and loan raised £370,000; agreement with HMRC to repay £460,000 by instalment. The resulting £830,000 goes a long way to improve the Company's financial position. Commenting on these results Chairman Angus Forrest, said, "The past two years have been a transformational period for the Company. It has achieved its first stated objective of increased scale through a combination of strong organic growth and acquisition. This provides a platform for further expansion and means we can concentrate on achieving profitability. In the period the Company refocused its sales mix - growing publishing and services which now provide our main revenue streams. "In common with many businesses we have been affected by the Recession, but with the cost reduction programme and a determination to continue to grow the business we plan to outperform our peer group. I expect Intellego will show further revenue growth this year which will enable the Company to qualify as a top 50 IT training company for the first time." The report and accounts for this period are being posted to shareholders and are also available on the Company's website www.intellego.co.uk Intellego Holdings plc Angus Forrest / Ranjit Roy Choudhuri Tel: 0845 0583960 Beaumont Cornish Limited Roland Cornish Tel: 020 7628 3396 Bishopsgate Communications Limited Maxine Barnes / Siobhra Murphy intellego(at)bishopsgatecommunications.com Tel: 020 7562 3350 Chairman's statement During the period your Company continued to undergo considerable development and change, continuing the transformation we have seen over the last two years. As a result the business has achieved greater scale through a combination of organic growth and acquisition. This provides Intellego with a platform for further growth and for profitable trading. Importantly our revenue mix has changed with a shift from distribution - now publishing and services provide the main streams of income. In the face of the tough economic climate the shifting sales mix provides the Company with higher margin business and increased visibility. Acquisitions Zenosis Limited publishes regulatory e-learning for the pharmaceutical industry. We have invested significantly in developing these courses to increase the customer appeal. All the major customers renewed their subscriptions and we are negotiating contracts with several new opportunities. PDP provides instructor lead training serving the financial services industry. We have invested in developing eLearning products for sale alongside the more traditional training. Having fully integrated the new businesses the Company continues to restructure with the aim of reducing fixed overheads by up to 20% per annum. This should improve Intellego's profitability and generate positive cash flow in 2009. Underlying operations During the period we increased sales of our own published material, enabling the Company to resell the same material repeatedly so increasing the yield from the cost of development. We also expanded our library of published material. Intellego owns libraries of: pharmaceutical compliance and regulation, post qualification medical study material, training for retailers and financial services. As a result the Company is well placed to more than double recurring revenues in the coming year. Financials Income statement Sales increased by 40% to £2.34 million (2008: £1.67 million) and gross margin by 34% to £1.6 million (2008: £1.2 million). While overall losses grew to £502,608 (2008: £408,118) this figure includes non-recurring annual costs and those related to the restructuring, which was announced in February, totalling £423,914. Losses also included an increase of £48,000 depreciation and amortisation which is a non-cash charge relating to the businesses acquired in the year. Balance sheet The Company has taken a conservative approach to accounting for its acquisitions depreciating fixed assets and amortising intangible assets acquired over no more than four years. Your Directors believe that whilst this is the correct accounting treatment under IFRS it does not fairly represent the cost of setting up the business, building the customer base and libraries of published material. If starting from scratch we believe that this would cost significantly in excess of £3 million, compared with the value shown in the balance sheet of £667,000. Post balance sheet events Following the year-end Intellego's financial position was strengthened significantly: - Placing on 23 April raised £170,000; - Bank loan arranged in June, providing the Company with £200,000 to be repaid over five years; - Agreement with HMRC to repay £460,000 by way of instalment. These three agreements with a total value of £830,000 go a long way to improve the Company s financial position and secure its future. As your Company continues to expand quickly the Board is aware of the need to strengthen the management team and reorganise in order to better manage the existing business and its growth. We are very pleased to announce John Hammond's arrival in August to head up the sales function. John has experience in all aspects of the sale of computer solutions and training since his early training with IBM in their graduate programme and subsequently with training specialist Silverlake UK Ltd, and leading systems house Logicalis Computing Solutions Ltd and subsequently Centiq Ltd. We expect there will be further recruitment and announcements as we continue to put together a team capable of building the business to annual sales of £10 million + . Outlook In common with many businesses we have been affected by the recession, but with the cost reduction programme referred to earlier and a determination to continue to grow the business we plan to outperform our peer group. I expect Intellego will show further revenue growth this year which will enable the Company to qualify as a top 50 IT training company for the first time. The Board of your Company remains focussed on creating value. The profile and focus of the business has changed and evolved significantly over the past two and a half years. We are optimistic that the actions we have taken to transform the business will begin to improve the cash generation and profitability of the business. During the year we identified a number of acquisition opportunities however we were unable to agree terms that in the Board's view, would have represented good short term value for Intellego shareholders. We will continue to evaluate this strategy in the coming period. I would like to thank all shareholders for their support throughout the year, also to welcome Bruce Leith to the Board and acknowledge the contributions of all our staff, advisers, customers and suppliers. Angus Forrest Chairman 31 July 2009 Consolidated income statement 2009 2008 Note £ £ Revenue 2 2,342,124 1,671,967 Cost of sales (674,903) (429,592) Gross profit 1,667,221 1,242,375 Operating charges before (1,947,114) (1,544,233) depreciation and amortisation and restructuring EBITDA[1] before restructuring (279,893) (301,858) costs 4 (73,914) - Restructuring costs EBITDA (353,807) (301,858) Depreciation and amortisation (126,403) (77,605) 3 (480,210) (379,463) Operating loss Finance income 1,310 3,343 Finance cost (31,062) (31,998) Loss on ordinary activities before (509,962) (408,118) taxation Taxation 7,354 - Loss on ordinary activities after (502,608) (408,118) taxation Basic and diluted loss per share (0.40)p (0.42)p [1] EBITDA represents earnings before depreciation and amortisation, profit on sale of non-current assets, finance income, finance costs and UK income tax. Consolidated balance sheet Note 2009 2008 £ £ Assets Non-Current Assets Property, plant and equipment 81,668 81,746 Goodwill 278,295 179,070 Other intangible assets 307,376 142,672 667,339 403,488 Current Assets Inventory 4,575 5,472 Trade and other receivables 691,802 576,577 Cash and cash equivalents 92,905 370,738 789,282 952,787 Total Assets 1,456,621 1,356,275 Liabilities Non-Current Liabilities Long term borrowings 29,022 48,236 29,022 48,236 Current Liabilities Trade and other payables 1,373,330 773,020 Borrowings 173,049 150,057 1,546,379 923,077 Total Liabilities 1,575,401 971,313 Net Assets (118,780) 384,962 Equity Share capital 661,567 649,314 Share premium 1,423,849 1,423,849 Merger reserve 31,000 29,387 Shares to be issued - 15,000 Profit and loss account (2,235,196) (1,732,588) Total Equity (118,780) 384,962Consolidated statement of changes inequity Share Share Merger Shares Profit and Total capital premium reserve to be loss equity issued account £ £ £ £ £ £Balance at 1 415,138 1,104,574 - - (1,324,470) 195,242April 2007Shares 234,176 319,275 29,387 - - 582,838issuedShares to be - - - 15,000 - 15,000issued inrespect ofCopiaacquisitionLoss for the - - - - (408,118) (408,118)year andtotal incomeand expenseBalance at 649,314 1,423,849 29,387 15,000 (1,732,588) 384,96231 March2008Balance at 1 649,314 1,423,849 29,387 15,000 (1,732,588) 384,962April 2008Shares 4,753 - 410 - - 5,163issued inrespect ofProfessionalDevelopmentPartnershipLimitedReversal of 7,500 - 1,203 (15,000) - (6,297)shares to beissued inrespect ofCopiaacquisitionLoss for the - - - - (502,608) (502,608)year andtotal incomeand expenseBalance at 661,567 1,423,849 31,000 - (2,235,196) (118,780)31 March2009 Consolidated cash flow statement Year to 31 March Year to 31 March 2009 2008 Note £ £ Cash flows from operating activities Loss after taxation (502,608) (408,118) Adjustments for: Depreciation 45,322 47,975 Amortisation 81,081 29,630 Investment income (1,310) (3,343) Interest expense 31,068 31,998 Increase in trade and other receivables (97,572) (10,132) Decrease in inventories 897 1,001 Increase in trade and other payables 581,021 144,852 Cash generated from/(used in) operations 137,899 (166,137) Interest paid (31,068) (31,998) Net cash generated from/(used in) operating 106,831 (198,135) activities Cash flows from investing activities Purchase of property, plant and equipment (45,244) (26,906) Investment in intangible assets (128,969) - Overdraft acquired with business (8,155) (19,991) Acquisition of business (191,990) (18,750) Interest received 1,310 3,343 Net cash used in investing activities (373,048) (62,304) Cash flows from financing activities Net proceeds from issue of share capital (15,394) 532,837 Principal payment of long-term bank loan (19,214) (12,135) Net cash (used in)/generated from financing (34,608) 520,702 activities Net (decrease)/increase in cash and cash (300,825) 260,263 equivalents Cash and cash equivalents at beginning of 239,895 (20,368) period Cash and cash equivalents at end of period (60,930) 239,895 Notes: 1. Going concern The Group incurred losses in both the current and prior year. As announced in January the Group underwent a cost reduction programme in the last quarter of the year to March 2009 which included reducing the number of operating locations from three to one and reducing the number of staff. Details of the savings in a full year are shown in the table below. The office costs and wages and salaries costs for the current year in respect of the operating locations that have been closed and the employees who have been made redundant are shown below under the discontinued operating charges column together with the direct costs associated with the office closure and redundancies under the reorganisation costs column. Both these costs will be non-recurring in the year to 31 March 2010. Re-organisation overview Discontinued operating Reorganisation costs Total charges 2009 2009 2009 £ £ £ Wages and 270,000 59,484 329,484 Salaries Office costs 80,000 14,430 94,430 350,000 73,914 423,914 The savings identified above will have a major impact on the financial results of the Group in the current and future years. The Directors of the business having considered the cash forecasts believe that with the re-organisation savings in region of £350,000 per annum, current trading and prospects together with the recent injection of equity and loan capital totalling £370,000 there is a reasonable expectation that the funds available to the Group are sufficient to meet the requirements indicated by those forecasts. Therefore it is appropriate to adopt the going concern basis in the preparation of these financial statements. 2. Segment analysis The Group's primary reporting format is business segment and its secondary format is geographical segment by origin of revenue. Intellego operates three main business segments Distribution, Services and Publishing. The activity undertaken by the Distribution segment is the resale of software developed by third parties. The Services segment includes consultancy, customisation, including development of content, and integration of e-learning systems. Maintenance of these systems is undertaken by the Distribution segment. The Publishing segment includes the sale of internally generated content. The revenues and net result generated by each of Intellego plc's business segments are summarised as follows: Year to 31 March 2009 Distribution Services Publishing Group £ £ £ £ Revenue 808,353 1,169,191 364,580 2,342,124 Loss for the period (194,017) (289,267) (19,324) (502,608) Segment assets 376,548 643,127 436,946 1,456,621 Segment liabilities (764,964) (597,143) (213,294) (1,575,401) Segment depreciation 39,660 43,572 43,171 126,403 and amortisation Segment capital 7,354 29,224 8,666 45,244 additions Year to 31 March 2008 Distribution Services Publishing Group £ £ £ £ Revenue 776,442 744,195 151,330 1,671,967 Loss for the period (203,644) (179,065) (25,409) (408,118) Segment assets 443,473 757,347 155,455 1,356,275 Segment liabilities (458,651) (468,876) (43,786) (971,313) Segment depreciation 38,058 38,524 1,023 77,605 and amortisation Segment capital 18,055 8,465 386 26,906 additions Inter segment pricing is performed at an arms length basis. The Group's revenues from external customers may also be summarised by geographical segments as follows. All operations are located in the UK: 2009 2008 £ £ United Kingdom 2,112,408 1,620,965 North America 54,948 38,358 Europe 174,768 12,644 2,342,124 1,671,967 3. Loss before taxation Loss before taxation is stated after charging: 2009 2008 £ £ Amortisation of intangible fixed assets 81,081 29,630 Depreciation of plant, property and equipment - owned by the group 45,322 47,975 Auditors' remuneration: Fees payable to the company's auditors for the audit 3,500 3,500 of the company's annual accounts Fees payable to the company's auditors for other services: - The audit of the company's subsidiaries, pursuant 13,000 13,000 to legislation - Taxation services 3,500 3,500 - Other services 5,000 8,000 Operating lease rentals - other operating leases 47,792 31,000 4. Restructuring costs As detailed in the Chairman's Statement the Group has undergone a restructuring in the last quarter of the year to March 2009 which has included reducing the number of operating locations from three to one and reducing the staff base through a restructuring programme. The direct costs associated with the office closure and the staff restructuring are as follows. Restructuring costs 2009 £ Wages and salaries 59,484 Office costs 14,430 73,914 5. Summary accounts The summary accounts set out above do not constitute statutory accounts as defined by Section 240 of the UK Companies Act 1985. The summarised consolidated balance sheet at 31 March 2009 and the summarised consolidated income statement, summarised consolidated statement of changes in equity and the summarised consolidated cash flow statement for the year then ended have been extracted from the Group's 2009 audited statutory financial statements. The auditor's report on the statutory financial statements for the year ended 31 March 2009 was unqualified and did not contain any statement under Section 237(2) or (3) of the Companies Act 1985. The comparative figures relating to the year to 31 March 2008 are taken from the audited statutory accounts for that year. This financial statements for the year ended 31 March 2008 have been reported on by the Company's auditors and delivered to the Register of Companies. ---END OF MESSAGE---This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 03.08.2009 - 08:01 Uhr
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