RNS Number:8300K
M.M.T. Computing PLC
08 May 2003
8th May 2003
MMT COMPUTING PLC
Interims Results for the Six Months ended 28 February 2003
SUMMARY:
*Turnover: #12.5 million (2002: #14.6 million)
*Loss before taxation, exceptional items, minority interests and
amortisation of goodwill: #0.11 million (2002 profit: #0.47 million)
*Loss per share 0.6p (2002 EPS: 2.8p)
*Interim dividend of 0.5p per share
*Strong balance sheet position with #6.1 million cash
*Board strengthened with the appointment of Peter Bevis, Head of the
Packaged Solutions Divison
*Strong pipeline of potential prospects for PowerQuote Universal
Commenting, Tom Hall, Chairman, said:
"The board remains confident about the outlook for the year, however, it is
dependent upon sales of PowerQuote Universal being achieved in the second half
of our financial year. There is a strong pipeline of current key prospects and
we are confident that the product will become the international market leader
within the field of utility pricing.
The continuing control and on-going review of costs remains an immediate
priority, as does the maintenance of our strong balance sheet. We remain
committed to achieve higher returns for shareholders as soon as the market shows
a tangible sign of recovery."
-Ends-
Enquiries:
Peter Onslow/Dee McFarlane
MMT Computing plc 020 7278 6211
David Simonson / Nicola Davidson
Merlin Financial 020 7606 1244
Chairman's Statement
Introduction
Having been the senior non-executive Board member since 1997, it is my pleasure
to present my first statement as Chairman of M.M.T. Computing plc, following my
appointment earlier this year after Mike Tilbrook's retirement.
In our report and accounts for the year ended 31 August 2002, Mike referred to
tough trading conditions but expressed a confidence in a return to
profitability. The on-going tough economic climate, which has particularly hit
the IT sector, accompanied by the current international political scene, has
created a far more difficult economic environment than originally envisaged.
This has caused further delays in major IT expenditure upon which M.M.T. is so
dependent.
Whilst we have returned a small operating loss for this interim period, our
performance is still heartening despite the difficult trading conditions that
have prevailed over the last six months.
Results, Dividends and Finance
The results for the first half of our financial year were a turnover of #12.5m
(2002: #14.6m) and a loss on ordinary activities before taxation, exceptional
items, minority interests and amortisation of goodwill of #0.11m (2002: profit
of #0.47m before taxation, exceptional items, minority interests and
amortisation of goodwill). Basic losses per share before exceptional items and
amortisation of goodwill were 0.6p (2002: earnings per share before exceptional
items and amortisation of goodwill 2.8p). Amortisation of goodwill was #0.2m
(2002: #0.3m).
Given our continued optimism for the future growth of the Group, the Board is
pleased to recommend an interim dividend of 0.5p per share to be paid on 13 June
2003 to members on the register on 16 May 2003.
M.M.T.'s balance sheet shows a strong net cash position of #6.1m (2002: #6.0m)
and remains healthy.
Operations - Systems Solutions Division
Despite the significantly reduced levels of sales opportunities, coupled with
the continued pressure on fee rates, it is a tribute to our sales team that
turnover has only been reduced by 6% against the corresponding period last year,
yielding an operating profit that has doubled to #0.28m before taxation,
exceptional items, minority interests and amortisation of goodwill (2002:
operating profit of #0.15m before taxation, exceptional items, minority
interests and amortisation of goodwill) from a turnover of #8.88m (2002:
#9.44m).
On a positive note, MMT has made further progress in sales to the Public Sector,
which is a relatively new area for the company.
Notably, following its rationalisation during 2002, Hypnosis, our new media
company, has returned a small profit for the period.
Operations - Packaged Solutions Division
Due to the combination of continued high development spend on our new leading
edge range of pricing products (PowerQuote Universal) and a general reduction in
demand for enhancement work, I have to report a disappointing return to an
operating loss of #0.37m before taxation, exceptional items, minority interests
and amortisation of goodwill (2002: operating profit of #0.08m before taxation,
exceptional items, minority interests and amortisation of goodwill) from a
turnover of #2.83m (2002: #3.91m).
However, due to the dedication of our sales force in this area, we have a strong
and sizeable prospect pipeline which should result in some key sales in the near
future.
Operations - Management Consultancy Division
A small operating loss of #0.02m before taxation, exceptional items, minority
interests and amortisation of goodwill (2002: operating profit of #0.24m before
taxation, exceptional items, minority interests and amortisation of goodwill)
from a turnover of #0.79m (2002: #1.25m) was incurred in this period. There are
a number of sales prospects that we hope will lead to a return to profitability
in the near future.
The insurance market is very important to the division and recent problems in
the industry have had a negative effect. It is hoped that the more recent
recovery and sentiment in investment markets will produce more business
opportunities particularly given the new regulatory demands.
Outlook
The board remains optimistic about the outlook for the year, however, it is
dependent upon sales of PowerQuote Universal, being achieved within the second
half of our financial year. There is a strong pipeline of current key prospects
and we are confident that the product will become the international market
leader within the field of utility pricing.
In the short to medium term, there does not appear to be any major recovery
within the IT services sector, although I remain confident that, given our loyal
and professional staff, we will continue the recovery when more normal business
conditions resume.
The continuing control and on-going review of costs remain an immediate
priority, as does the maintenance of our strong balance sheet.
During the interim period we have appointed Peter Bevis, Head of our Packaged
Solutions Division, to our Board. Peter's experience with the product side of
our business will further strengthen the existing skills of the Board as we
position ourselves to meet the current market needs.
Finally I would like to pay tribute to Mike Tilbrook, under whose leadership the
company produced substantial returns to shareholders until the recent
difficulties within the IT sector.
The Board remains committed to achieve higher returns for shareholders in the
immediate future as soon as the market shows a tangible sign of recovery.
Tom Hall, Chairman
8 May 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 28 February 2003
Six months ended 28 February
Notes 2003 2003 2003 2002 2002 2002
#000 #000 #000 #000 #000 #000
Total Exceptional Before Total Exceptional Before
items and exceptional items and exceptional
goodwill items and goodwill items and
amortisation goodwill amortisation goodwill
amortisation amortisation
#000 #000 #000 #000 #000 #000
Turnover
Continuing 12,495 - 12,495 14,575 - 14,575
operations
Discontinued - - - - - -
operations ----- ------- ------- ------ ------- -------
12,495 - 12,495 14,575 - 14,575
Operating
(loss)/profit
Continuing 2 (391) (155) (236) (62) (377) 315
operations
Discontinued - - - - -
operations ----- ------- ------- ------ ------- -------
(391) (155) (236) (62) (377) 315
Profit on sale 7 - 7 24 - 24
of tangible
fixed assets
Profit on sale - - - 26 - 26
of fixed asset
investments
Profit on sale - - - - - -
of current
asset
investments
Net Interest 118 - 118 104 - 104
receivable
Investment - - - 1 - 1
income ----- ------- ------- ------ ------- -------
(Loss)/Profit (266) (155) (111) 93 (377) 470
on ordinary
activities
before
taxation
Tax on (loss)/ 25 - 25 (67) - (67)
(profit) on ----- ------- ------- ------ ------- -------
ordinary
activities
(Loss)/Profit/ (241) (155) (86) 26 (377) 403
on ordinary
activities
after
taxation
Equity 5 - 5 (65) - (65)
minority ----- ------- ------- ------ ------- -------
interests
(Loss)/profit (236) (155) (81) (39) (377) 338
for the
financial
year
Dividends (61) - (61) (61) - (61)
----- ------- ------- ------ ------- -------
Transfer (297) (155) (142) (100) (377) 277
(from)/to ----- ------- ------- ------ ------- -------
reserves
Basic earnings (1.9p) (1.3p) (0.6p) (0.3p) (3.1p) 2.8p
per share
Diluted (1.9p) (1.3p) (0.6p) (0.3p) (3.1p) 2.8p
earnings per
share
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 28 February 2003 continued
Year ended 31 August
Notes 2002 2002 2002
#000 #000 #000
Total Exceptional Before
items and exceptional
goodwill items and
amortisation goodwill
amortisation
#000 #000 #000
Turnover
Continuing operations 24,472 - 24,472
Discontinued operations - - -
----- ------- -------
24,472 - 24,472
Operating (loss)/profit
Continuing operations 2 (885) (1,189) 304
Discontinued operations - - -
----- ------- -------
(885) (1,189) 304
Profit on sale of tangible - - -
fixed assets
Profit on sale of fixed - - -
asset investments
Profit on sale of current 26 26 -
asset investments
Net Interest receivable 201 - 201
Investment income - - -
----- ------- -------
(Loss)/Profit on ordinary (658) (1,163) 505
activities before taxation
Tax on (loss)/(profit) on (77) 166 (243)
ordinary activities ----- ------- -------
(Loss)/Profit/ on ordinary (735) (997) 262
activities after taxation
Equity minority interests (42) - (42)
----- ------- -------
(Loss)/profit for the (777) (997) 220
financial year
Dividends (183) - (183)
----- ------- -------
Transfer (from)/to (960) (997) 37
reserves ----- ------- -------
Basic earnings per share (6.4p) (8.2p) 1.8p
Diluted earnings per share (6.4p) (8.2p) 1.8p
Consolidated Statement of Total Recognised Gains and Losses
There are no gains or losses in the six month period ending 28 February 2003
other than those shown in the Consolidated Profit and Loss Account
Consolidated Balance Sheet at 28 February 2003
Six months ended 28 February Year Ended
31st August
2003 2002 2002
#000 #000 #000
Fixed Assets
Intangible Assets 2,533 2,993 2,687
Tangible Assets 2,692 3,095 2,845
Investments 27 27 27
---------- ---------- ---------
5,252 6,115 5,559
Current Assets
Work in Progress - 5 -
Debtors 8,908 8,777 7,839
Cash at bank and in hand 6,103 6,019 6,439
---------- ---------- ---------
15,011 14,801 14,278
Current liabilities
Creditors: amounts falling due within one 4,684 4,092 3,862
year
---------- ---------- ---------
Net Current Assets 10,327 10,709 10,416
Provisions for liabilities and - - 94
charges ---------- ---------- ---------
Total Assets Less Current Liabilities 15,579 16,824 15,881
---------- ---------- ---------
Capital and Reserves
Called up share capital 609 609 609
Share premium account 3,045 3,045 3,045
Other reserves 297 297 297
Profit and loss account 11,465 12,622 11,762
---------- ---------- ---------
Equity shareholders' funds 15,416 16,573 15,713
Equity minority interests 163 251 168
---------- ---------- ---------
15,579 16,824 15,881
---------- ---------- ---------
Group Cash Flow Statementfor the six months ended 28 February 2003
Six months ended 28 February Year ended
31st August
2003 2002 2002
#000 #000 #000
Net cash flow from operating (301) (562) 18
activities
Returns on investment and 117 105 201
servicing of finance
Taxation 6 590 487
Capital Expenditure and financial (38) 15 (77)
investment
Acquisitions and disposals - - -
Equity dividends paid (122) (61) (122)
-------- ----- -------- ----- --------
Cash (outflow)/inflow before use (338) 88 507
of liquid resources
and financing
Management of liquid resources (552) (230) (494)
Financing - - -
-------- -------- --------
Increase/(decrease) in cash (890) (143) 13
======== ======== ========
Reconciliation of Net Cash Flow to Movement in Net Funds
Increase/(Decrease) in cash (890) (143) 13
Increase/(Decrease) in liquid 552 230 494
resources
Change in net debt resulting from (338) 88 507
cashflows
Translation difference 2 (1) -
-------- -------- --------
Movement in net funds (336) 87 507
Net Funds at 1st September 2002 6,439 5,932 5,932
-------- -------- --------
Net Funds at 28th February 2003 6,103 6,019 6,439
======== ======== ========
Reconciliation of operating (loss)/profit to net cash
(outflow)/inflow from operating activities
Operating loss (391) (62) (885)
Depreciation of tangible fixed assets 204 335 635
Amortisation of goodwill 155 304 610
Profit on sale of tangible fixed assets - - 23
(Increase)/decrease in debtors (1,153) 22 587
Increase/(decrease) in creditors 884 (1,162) (1,052)
Increase in provisions - - 94
Decrease in stocks - 1 6
------- ------- --------
Net cash (outflow)/inflow from operating (301) (562) 18
activities ======= ======= ========
Notes
1. The financial information on pages 1 to 7 and the notes, for the six months
ended 28th February 2003 have not been audited, but have been reviewed by
Ernst and Young LLP and their report is set out on page 9. The financial
information has been prepared on the basis of the accounting policies set
out in the Group's statutory accounts for the year ended 31st August 2002,
which have been delivered to the Registrar of Companies. The auditor's
report in respect of these accounts was unqualified.
The financial information set out in this report does not constitute
statutory accounts within the meaning of the Companies Act 1985.
2. Operating exceptional items and amortisation of goodwill
Six months ended 28 Year ended
February 31 August
2003 2002 2002
#000 #000 #000
-------- ------- ------- ------- ---------- -------- ---------
Operating exceptional items:
Costs relating to restructure of - 72 579
operations ---------- -------- ---------
------------------------
- 72 579
Amortisation of goodwill (not 155 305 610
exceptional) ---------- -------- ---------
------------------------
155 377 1,189
3. Taxation has been provided on the basis of estimated rates for the
financial year as a whole.
4. The calculation of loss per Ordinary share is based on a loss after
taxation and goodwill amortisation of #236,971 (February 2002 a loss of
#39,945, August 2002 a loss of #777,000 and on 12,178,192 Ordinary shares
(February 2002 - 12,178,192 Ordinary shares, August 2002 - 12,178,192
Ordinary shares), being the weighted average number of Ordinary shares in
issue during the year.
There are no dilutative potential shares in February 2003.
The additional earnings per share figures shown on the profit and loss
account are calculated based on earnings before exceptional items and
goodwill amortisation. They are included as they provide a better
understanding of the underlying trading performance of the Group.
5. Copies of the interim results are being sent to shareholders. Further
copies can be obtained from the Company's registered office at 14 Angel
Gate, City Road, London, EC1V 2PT.
This information is provided by RNS
The company news service from the London Stock Exchange
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