RNS Number:8529J
Sirius Financial Solutions PLC
10 April 2003
FOR IMMEDIATE RELEASE
10th April 2003
SIRIUS FINANCIAL SOLUTIONS PLC
2002 PRELIMINARY RESULTS
REMARKABLE PERFORMANCE IN A CHALLENGING MARKET
Sirius Financial Solutions, the specialist supplier of software and services to
the insurance and financial services industry worldwide, today announces its
preliminary results for the year ended 31 December 2002.
HIGHLIGHTS
* 30.6% increase in group turnover to #22.7m (2001: #17.4m)
* Significant growth in operating profit before goodwill amortisation to
#2.8m (2001: #0.7m). After charging goodwill, operating profit was #1.9m (2001:
operating loss of #0.2m)
* Recurring revenues remained strong at #6.3m (2001: #6.1m)
* Operating cash inflows of #2.6m (2001: #0.5m)
* Gearing* reduced to zero (31 December 2001: 28.1%)
* Dividend levels increased with an interim dividend of 1.0p per share
(2001: 1.0p) and a proposed final dividend of 1.7p per share (2001: 1.5p)
* Strong run-rate sales across all three products: Sirius for
Underwriting, Sirius for Broking and Swift
* Sirius to return to the Alternative Investment Market (AIM), a more
appropriate and cost effective market for a company of its size
* Stephen Verrall to become Chairman and Chief Executive on the retirement
of Ian Yeoman, the current Chairman. A new Executive Director and a new
non-Executive Director to be appointed at the next AGM
*Gearing is defined as debt net of cash reserves divided by net assets excluding
goodwill
Stephen Verrall, Chief Executive of Sirius Financial Solutions, said:
"In 2002 we grew our sales by over 30% on the previous year. This growth was
all organic and driven by the growing success of our products in our chosen
markets. As a result, the Group was able to make significant progress towards
its aim of becoming a leading global supplier of insurance software.
The technology and insurance sectors continue to experience challenging times.
Although we have confidence in our ability to build on our recent successes, we
consider it prudent to set conservative growth expectations for the coming year.
Nevertheless, we aim to achieve increased sales for each of our three products,
and to retain our focus on building a profitable, cash generative business."
Enquiries:
Sirius Financial Solutions (0121 355 3567) Citigate Dewe Rogerson (020 7638 9571)
Stephen Verrall Martin Jackson / Daphne Claude
Richard Bowser
SIRIUS FINANCIAL SOLUTIONS PLC
2002 PRELIMINARY RESULTS
CHAIRMAN'S STATEMENT
REVIEW OF RESULTS
Sirius Financial Solutions embarked upon 2002 with a vision that was scaled up
radically from that of 2001 and a determination to realise the rewards of its
significant investment in product development.
Against the backdrop of increasingly difficult trading conditions in both the
technology and financial services markets, your Board was nevertheless confident
that Sirius would succeed on the global stage. The Group saw strong signals of
business to come from all of its product sectors and it set its operational and
financial targets commensurately high.
I am pleased to report that this confidence was justified and was translated
into a 30.6% increase in Group turnover and significantly improved operating
profits before goodwill amortisation of #2.8m (2001: #0.7m). After charging
goodwill, operating profit was #1.9m (2001: operating loss of #0.2m).
Sirius entered 2002 with a strong order book and visibility of #14.5m of
revenues, which represented approximately two-thirds of the market consensus
forecast. As a result of deferring a sizeable contract from 2001 into 2002,
higher than normal first half revenues and profits were anticipated. This
contributed to the Group achieving record H1 performance with a 17.7% increase
in turnover relative to the same period in 2001.
The Group continued to grow well in the second half of the year, when it
delivered performance which the directors consider to be strong in its own right
and especially pleasing when measured against that of the Group's competitors
and the IT sector in general.
Strong operating cash inflows of #2.6m (2001: #0.5m) were generated during the
year. Consequently, by mid-year the Group had reduced gearing from the 31
December 2001 level of 28.1% to zero. It remains ungeared.
In light of the Group's strong financial performance, but whilst mindful of the
difficult trading backdrop in the IT sector, the directors consider that 2001
dividend levels should be increased slightly. Accordingly they propose payment
of a final dividend for 2002 of 1.7p per share.
PRODUCT
As anticipated, the early 2002 sale to the New Zealand subsidiary of Insurance
Australia Group positioned Sirius to market its underwriting product more
assertively on a global basis. This major project has progressed well and has
put Sirius in a good position to develop further business in this region.
Deployments against the order book were executed, and in November 2002 a
strategically important sale of Sirius for Underwriting was secured in the North
American market.
Market reaction to Sirius for Broking confirmed that the product continues to
have a clear lead over our competition. The Group built on earlier successes and
established itself as the supplier of choice to some of the UK's largest
insurance intermediaries such as Alexander Forbes, The Beckett Group and Country
Mutual Insurance Brokers. Contract signing with Aon was a major landmark. Sirius
for Broking has now been sold to over 150 organisations.
We believe that in 2002, our Swift application established a lead in software
provision to the UK's larger Independent Financial Advisers. Major deployments
were undertaken at the Royal Bank of Scotland and the Co-operative Bank.
Significantly, at the year end a major order had been secured with wealth
management group St. James's Place which will see the future roll-out of Swift
to 1,600 users including its extensive network of partners.
PARTNERSHIPS
For some time, Sirius has felt that in order to scale the organisation
successfully and to achieve its ambitions for global growth, partnerships would
need to play an important role. In 2002, the Group executed a partner strategy
which produced the desired results in terms of business generation, ability to
scale our operations and systems implementation.
Joint bids in partnership with CMG resulted in two sales to UK customers and
this relationship is now opening doors to European opportunities. A partnership
focusing on the financial services sector was established with Logica (now
Logica-CMG) and, in the USA the Group's partnership with Align360 increased
market presence and sales opportunity and expanded our deployment capability.
The Group is pleased to have retained its Microsoft Gold Certified Partner
status and during the year it embraced Microsoft's .NET programme.
EMPLOYEES
In 2002 the Group continued to grow its headcount which was in marked contrast
to some of its direct competitors where continued retrenchment was a feature.
This recruitment has equipped Sirius with a balanced and skilled employee base.
I should like to thank all employees for their efforts and demonstrable
commitment to the Group's vision for high growth and market leadership, and to
commend them for the significant performance they achieved in 2002.
CORPORATE CHANGES
2003 will see a number of changes for the Group as a corporate entity. Firstly,
it has decided to return to the Alternative Investment Market (AIM). The Board
feel that AIM represents a more appropriate and cost effective market for a
Group of our size.
After the forthcoming Annual General Meeting two new appointments to the Board
will be made. Mike Dodd, the Chief Executive of our UK Systems business unit,
will join the Board as an executive director. Mike has a wealth of experience in
the insurance sector, where he has held senior positions for 20 years, and has
been a key member of Sirius' senior management team over the past five years.
Also, we will welcome back Michael Anstee as a non-executive director, a
position he previously held until September 2001 when he left us briefly to
focus on other business and leisure interests. Michael is a recognised figure in
the UK general insurance market, and held business and IT board positions with
London and Edinburgh Insurance Company for 10 years.
Finally, I am retiring as non-executive Chairman, a post I have held for two
years. I leave a Group with market-leading products and a loyal and growing
customer base. Stephen Verrall, the current Group Chief Executive, will take on
the role of Chairman and Group Chief Executive from the date of my retirement.
Ian Yeoman
Chairman
10 April 2003
GROUP CHIEF EXECUTIVE'S STATEMENT
2002 - REMARKABLE PERFORMANCE IN A CHALLENGING MARKET
In my statement this time last year, I said we were 'looking forward to a
rewarding year in 2002'. And with that in mind we embarked upon 2002 with an
ambitious vision to achieve exceptional performance in what was already a
challenging market.
Our confidence was based upon the strength and superiority of our new products,
which were generating run-rate sales and being widely used by intermediaries and
insurance companies globally. In addition we believed we had an exceptional and
dedicated team of employees and a substantial and loyal customer base built up
over the previous 18 years.
Whilst 2002 turned out to be a far more difficult year than many predicted for
both the insurance and IT sectors, I am delighted to report that our confidence
was well founded and that the Group was able to make significant progress
towards its aim of becoming a leading global supplier of insurance software.
In 2002 we grew our sales by over 30% on the previous year. This growth was all
organic and driven by the growing success of our products in our chosen markets.
While there is clear evidence of a slow down in IT procurement, both generally
and specifically in the insurance sector, Sirius is developing an enviable
success rate on the deals we bid for. I believe this is due to our ability to
demonstrate a functionally rich package, providing for our customers: value for
money, the ability to deploy rapidly and the opportunity to get an early return
on their investment.
Our sales success was well balanced across all of our key products as we made
further global sales of Sirius for Underwriting, saw Sirius for Broking outsell
all its direct competitors and established Swift as a market leading software
package for larger financial advisers.
BUSINESS REVIEW
In the latter part of the year, the Group was restructured from five to four
business units, which has resulted in better alignment with our target business
segments.
Solutions
The Solutions business unit is responsible for the sale and delivery of our
Sirius and Swift products as larger, higher value 'enterprise' systems, often
with a high degree of systems integration. This is the fastest growing business
within the Group, having been launched in 1999 to capitalise on the arrival of
our then new Sirius products. In 2002 revenue nearly doubled to #8.9m (2001:
#4.9m).
Notable Swift wins included sales to Royal Bank of Scotland, Co-operative Bank
and the wealth management group St. James's Place. The latter will be our
largest deployment of Swift, with 1,600 users located throughout the UK.
Sirius for Broking was sold to NFU's expanding broker business, Country Mutual
Insurance Brokers. Further business was generated by Folgate's continued
expansion and our deployment at AON. We believe that the market sees our
insurance knowledge and its application to the delivery of comprehensive and
flexible software products as our strongest asset.
We consolidated our market position with Sirius for Underwriting. Sales were
made in the Caribbean including those to RSA Curacao and Harmony; in Africa to
Standard Fire; in South America to Insurance Corporation of Belize; in the UK to
Primary Group and New India; and significantly in the US to Professional Risk
Underwriters, a specialist medical liability underwriter.
We have made good progress with our major deployment of Sirius for Underwriting
to IAG (formerly NRMA) in New Zealand, with the system due to go live this
autumn. We are optimistic about further business opportunity with IAG and the
other opportunities around the world that this scalable, high-end version of our
underwriting product presents.
North America
An integral part of our Solutions business is our North American operation which
provides sales and support of our underwriting and agent products in the US and
Caribbean. We started 2002 with the belief that our financial performance would
improve in this strategically important region. Unfortunately the US market
showed few signs of recovery during the year, which was reflected in continued
low buyer confidence. The Group therefore decided to contain costs and to
realign itself against a limited sales strategy focused on existing customers
and on securing recurring revenues. I am pleased to report that this strategy
has resulted in an improvement in financial performance over the previous year
with a small operating profit before goodwill amortisation of #59,911 (2001:
loss of #556,675).
There are signs that the market may be set to improve and we enter 2003 with a
new, recently appointed US Manager, a former member of my UK management team.
Partnerships
A key part of our Solutions business unit strategy for 2002 was the
establishment of an effective
partnership programme. This we considered vital to enable us to more quickly
scale our business and capitalise on the opportunity our products present.
During the year we built on our partnership with Logica CMG and together we
secured two new important customers. We have strengthened our relationship with
US based systems integrators Align 360 who are now working with us on most of
our North American deployments. In New Zealand we continue to work with CGEY,
and our Partner Development Director has initiated a number of new partnership
opportunities.
We continue to enjoy a strong relationship with Microsoft, with whom we worked
during the year to successfully demonstrate the scalability of our applications.
UK Systems
In the autumn of 2002 we merged two of the Group's business units - Systems
(responsible for the sale of our Sirius for Broking and Swift applications as
turnkey systems to the UK's insurance brokers and IFAs), and Insurer
(responsible for the development and distribution of insurer products to the
broker channel). This created UK Systems, a single, larger business unit focused
on delivery to brokers, IFAs and their insurer product providers. The combined
business unit grew 15% during the year to a turnover of #7.0m (2001: #6.1m).
Throughout 2002 the broking market continued to consolidate. A number of strong,
dynamic and acquisitive brokers became even more influential. Others came
together to form informal networks through which they aim to secure a greater
market share. The market is set to undergo further consolidation stimulated
largely by the proposed FSA regulation. This consolidation is being driven by a
number of 'movers and shakers'; entrepreneurial organisations such as The
Folgate Partnership and Country Mutual Insurance Brokers whom I am delighted to
say are using our Sirius for Broking software to underpin their growing
businesses.
Other noteworthy sales included those to well-regarded, provincial insurance
brokers such as Hanover Park, Waveney, Charcol and Griffiths & Armour. It is
pleasing to report that we are rapidly approaching our 200th sale of Sirius for
Broking.
Stargate
An important milestone for the Group during 2002 was the success of our Stargate
connectivity initiative. It became a reality with the delivery of the first
phase with AXA; followed with adoption by other leading insurers Zurich, Allianz
Cornhill, Norwich Union and Groupama.
Stargate is a compelling proposition, allowing real time connectivity between
broker and insurer for the placing of commercial lines insurance. Policies can
be quoted and issued in minutes as opposed to weeks. It will take significant
cost out of the insurance market, is likely to change the commercial lines
trading model, and represents an excellent opportunity for Sirius to remain
ahead of its competitors.
In addition to the commitment of the UK's leading general insurers, we are also
working with a number of other organisations such as St. James's Place,
Prudential and Selestia to deliver the much-needed electronic integration
between financial advisers and product providers in the areas of policy
selection, quotation and servicing.
MediQuote
In the past year, we continued to work towards our goal of increasing efficiency
and reducing the cost of product distribution through use of our private medical
insurance portal, MediQuote. Standard Life maintained its support and Norwich
Union and Universal Provident came on board, moves which should increase usage.
Medicash brought cash plan support to the provider panel, BWCA joined for group
SME business and Swiss Life now offers group protection policies.
The number of networks now using MediQuote increased to 12, the number of users
grew during the year by 56%, and the number of quotations processed each month
grew by 68%.
Support Services
Our Support Services business unit handles our customer support operations
including our help desk. Its revenues comprise maintenance contracts, service
management and service level agreements, and added value services such as virus
protection.
During 2002 we implemented a new service management structure with improved
focus on customer needs and segmentation, as well as revenue generation. New
service level agreements that were introduced helped to facilitate improvements
in service delivery and customer perception.
The business unit performed in line with budget with turnover for the year of
#4.2m (2001: #3.9m).
MEDIAmaker
MEDIAmaker provides new media design and build services such as internet,
intranet and e-commerce development for the Group's larger insurance customers,
as well as for a range of other companies in a variety of sectors. 2003 sees the
launch of Sirius Interactive, a portfolio of specialist internet-based software
and services for the insurance sector. The business also provides established
media services such as event and conference planning and execution.
During the year, turnover increased by 6% to #2.6m (2001: #2.5m), assisted by
sales to new blue-chip clients such as Shell, Cadburys and Barclays. MEDIAmaker
also successfully delivered its largest conference ever, for Coors Brewery. The
emerging markets in new media, such as e-learning, did not grow as quickly as
predicted, but there were encouraging breakthroughs with customers such as
Crookes Healthcare.
The business completed its move to larger, much improved premises in October of
2002. Towards the end of 2002, MEDIAmaker secured a three year outsourcing
contract with Boots for the provision of media services. These two developments
should allow the business to accelerate its growth rate during 2003 and beyond.
EMPLOYEES
During the year we saw the number of employees in the Group grow from 230 to
270. This was largely in the area of professional services to resource the many
new projects initiated by the growth in solution sales.
As a Group, we put increased emphasis on human resources in the past year,
particularly on knowledge sharing, training and communication. The opportunity
to learn by experience was also increased including, for some, the opportunity
to work in our overseas offices.
Last year I shared our plans to move our head office operation in Sutton
Coldfield to larger, more appropriate premises. This proved to be more
challenging than was first envisaged. However, we have now identified suitable
accommodation which reflects our status as a global supplier and provides a
modern and effective working environment for our employees. We plan to relocate
during the first half of 2004.
STRATEGY AND OUTLOOK FOR 2003
2002 was undoubtedly an exceptional year for the Group. To a certain extent this
was anticipated with the roll-over of some business from 2001. Nevertheless,
against the backdrop of a difficult market we produced our best ever results.
The Group we are today represents a significant uplift on our 2002 starting
position. I would like to take this opportunity to thank all of Sirius'
employees, and of course our customers, for making this possible.
2003
In 2003 we intend to build on our success. Specifically we will:
* maintain our primary aim to become a global leader in the provision of
insurance software;
* raise our profile with the larger players in the insurance
underwriting market, with the assistance of our partners;
* aim to retain and strengthen our position as a leading supplier to the
UK's insurance brokers, backed by our biggest marketing campaign to date;
* further develop and exploit our Stargate technology for both
commercial lines insurance and the financial services sector;
* evaluate the opportunity to open a new office in either Australia or
New Zealand, to coincide with the implementation of our IAG system, thus
providing local sales resource and support to prospective customers in this
region;
* continue with our commitment to research and development activity,
much of which will be sponsored by specific customer projects.
Managed Service Provision (MSP)
The Group has identified a significant opportunity to grow its business in the
area of managed services. This will facilitate the outsourcing to a Sirius
managed service of all, or part, of our larger customers' Sirius applications,
third party applications and IT infrastructure. MSP is a configurable offering
that frees our customers to focus on their principal business activity whilst
Sirius manages their IT needs. Our MSP service optionally provides hosting at a
data centre, or at the customer's own hosting centre. I can report considerable
interest in this new proposition. In addition, this will allow us to more widely
offer an Application Service Provider (ASP) deployment model.
The first half of 2003 will see a period of investment in our MSP offering, as
we put in place the necessary infrastructure and resources. This may result in
the Group incurring some one-off set up costs. An MSP capability will strengthen
the Group by allowing us to sell additional services into our customer base,
tender for new contracts and importantly build on our recurring revenue base by
creating long term added value contracts.
Acquisitions
Throughout 2002 we identified and evaluated a number of acquisition
opportunities. Whilst we are confident of the Group's ability to generate
organic growth, there will undoubtedly be further consolidation in our sector.
We will continue to assess acquisition opportunities, and our move back to the
AIM market will allow the Group to complete suitable acquisitions on a more cost
effective basis.
SUMMARY
The technology and insurance sectors continue to experience challenging times.
Although we have confidence in our ability to build on our recent successes, we
consider it prudent to set conservative growth expectations for the coming year.
Nevertheless, we aim to achieve increased sales for each of our three products,
and to retain our focus on building a profitable, cash generative business.
Stephen J Verrall
10 April 2003
SIRIUS FINANCIAL SOLUTIONS PLC
2002 PRELIMINARY RESULTS
GROUP PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2002
As restated
2002 2001
Notes # #
Turnover 3 22,683,192 17,373,850
Cost of sales (12,723,927) (9,875,848)
Gross profit 9,959,265 7,498,002
Distribution costs (2,444,687) (2,601,612)
Administrative expenses:
- goodwill amortisation (871,478) (891,856)
- depreciation (457,274) (514,469)
- other (4,259,348) (3,726,861)
- total administrative expenses (5,588,100) (5,133,186)
Operating profit before goodwill amortisation 2,797,956 655,060
Goodwill amortisation (871,478) (891,856)
Operating profit/(loss) 1,926,478 (236,796)
Interest receivable 103,637 101,421
Interest payable and similar charges (136,595) (145,626)
Profit/(Loss) on ordinary activities before taxation 1,893,520 (281,001)
Tax on profit/(loss) on ordinary activities (895,555) (365,453)
Profit/(Loss) on ordinary activities after taxation 997,965 (656,454)
Equity dividends on ordinary shares 4 (472,449) (407,124)
Retained profit/(loss) for the financial year 525,516 (1,053,578)
Earnings/(Loss) per share: 5
- basic 6.0p (4.0)p
- diluted 5.9p (4.0)p
- adjusted 16.7p 4.1p
EBITDA 3,255,230 1,169,529
GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the year ended 31 December 2002
As restated
2002 2001
# #
Profit/(Loss) for the financial year 997,965 (646,454)
Exchange difference on retranslation of net assets of subsidiary undertaking (15,251) (18,240)
Total recognised gains and losses relating to the year 982,714 (664,694)
Prior year adjustment (note 2) 121,692
Total recognised gains and losses since the 2001 annual report and accounts 1,104,406
GROUP RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
For the year ended 31 December 2002
As restated
2002 2001
# #
Total recognised gains and losses 982,714 (664,694)
Dividends (472,449) (407,124)
Shares issued net of expenses and amounts accrued - 212,219
Deferred consideration paid in the form of cash rather than shares (118,750) -
Total movements during the year 391,515 (859,599)
Shareholders' funds at 1 January (2001: as previously reported) 11,624,357 12,128,691
Prior year adjustment (note 2) - 355,265
Shareholders' funds at 31 December 12,015,872 11,624,357
GROUP BALANCE SHEET
At 31 December 2002
As restated
2002 2001
# #
Fixed assets
Intangible assets 6,466,973 7,338,451
Tangible assets 1,663,471 1,521,737
8,130,444 8,860,188
Current assets
Stocks 16,052 46,134
Debtors 9,338,619 7,356,102
Cash at bank and in hand 1,043,744 132,683
10,398,415 7,534,919
Creditors: amounts falling due within one year (5,362,665) (3,511,157)
Net current assets 5,035,750 4,023,762
Total assets less current liabilities 13,166,194 12,883,950
Creditors: amounts falling due after more than one year (714,492) (951,292)
Accruals and deferred income (435,830) (308,301)
Net assets 12,015,872 11,624,357
Capital and reserves
Called up share capital 172,103 163,117
Share capital to be issued - 950,000
Share premium account 4,162,733 4,162,733
Merger reserve 5,891,572 5,069,308
Profit and loss account 1,789,464 1,279,199
12,015,872 11,624,357
Shareholders' funds
Equity 12,013,757 11,622,242
Non-equity 2,115 2,115
12,015,872 11,624,357
GROUP STATEMENT OF CASH FLOWS
For the year ended 31 December 2002
As adjusted
2002 2001
Notes # #
Net cash inflow from operating activities 6(a) 2,597,040 549,228
Returns on investments and servicing of finance
Interest received 103,637 101,421
Interest paid (126,083) (116,366)
Interest element of finance lease rental payments (7,301) (26,195)
Issue costs on long-term loans - (6,375)
(29,747) (47,515)
Taxation
Corporation tax paid (including advance corporation tax) (81,149) -
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (634,536) (316,935)
Receipts from sales of tangible fixed assets 33,305 70,485
(601,231) (246,450)
Acquisitions
Deferred consideration paid (118,750) -
Equity dividends paid (424,971) (401,090)
Net cash inflow/(outflow) before financing 1,341,192 (145,827)
Financing
Issue of ordinary share capital 6(d) - 7,840
New long-term loans - 750,000
Repayment of long-term loans (205,000) (259,167)
Repayment of capital element of finance leases and hire
purchase contracts (225,131) (248,708)
(430,131) 249,965
Increase in cash 6(b) 911,061 104,138
NOTES TO THE ACCOUNTS AT 31 DECEMBER 2002
1. BASIS OF PREPARATION
The financial information set out above does not constitute the full statutory
accounts of Sirius Financial Solutions PLC for the years ended 31 December 2002
and 31 December 2001 respectively, but is derived from those accounts. Statutory
accounts for 2001 have been delivered to the Registrar of Companies, and those
for 2002 will be delivered following Sirius Financial Solution's Annual General
Meeting on 19 May 2003. The auditors have reported on those accounts; their
reports were unqualified and did not contain statements under section 237(2) or
(3) of the Companies Act 1985.
The results for the year ended 31 December 2002 set out in this document have
been prepared on a basis consistent with the accounting policies adopted by
Sirius Financial Solutions for the prior period, with the additional application
of Financial Reporting Standard 19 (Deferred Taxation).
2. PRIOR YEAR ADJUSTMENT
The adoption of Financial Reporting Standard 19 (Deferred Taxation) has required
changes in the method of accounting for deferred tax assets and liabilities. As
a result of these changes in accounting policy the year 2001 comparatives have
been restated as follows:
Profit and loss
Deferred tax account Shareholders'
asset reserve funds
# # #
2001 as previously reported - 1,157,507 11,502,665
Adoption of FRS 19 at 1 January 2001 355,265 355,265 355,265
During year ended 31 December 2001 (233,573) (233,573) (233,573)
Impact of adoption of FRS 19 at
31 December 2001 121,692 121,692 121,692
2001 as restated 121,692 1,279,199 11,624,357
The impact on the current year profit and loss account is #9,517.
3. TURNOVER AND SEGMENTAL ANALYSIS
The Group operates in one principal area of activity, that of the
development and supply of insurance specific application software both as a
package and as a solution.
Turnover originates from two geographical markets, the United Kingdom
and North America.
Europe and North America
United Kingdom and Caribbean Rest of World Total
2002 2001 2002 2001 2002 2001 2002 2001
# # # # # # # #
Group turnover
Turnover by
destination:
Sales to third 19,269,573 13,541,091 931,691 1,933,984 2,481,928 1,898,775 22,683,192 17,373,850
parties
Turnover by origin:
Sales to third 21,952,784 15,439,866 730,408 1,933,984 - - 22,683,192 17,373,850
parties
Profit
Segment operating
profit/(loss)
before
goodwill 3,002,003 1,564,197 59,911 (556,675) - - 3,061,914 1,007,522
amortisation
Goodwill (732,346) (751,917) (139,132) (139,939) - - (871,478) (891,856)
amortisation
Interest receivable 103,447 101,312 190 109 - - 103,637 101,421
Interest payable
and similar (136,595) (145,626) - - - - (136,595) (145,626)
charges
Segment profit/
(loss)
before central
group
costs and taxation 2,236,509 767,966 (79,031) (696,505) - - 2,157,478 71,461
Central group costs (263,958) (352,462)
Profit/(Loss) on
ordinary
activities before 1,893,520 (281,001)
taxation
Net assets
Net assets/
(liabilities)
by segment 12,899,647 12,697,173 (833,775) (1,072,816) - - 12,015,872 11,624,357
4. DIVIDENDS AND OTHER APPROPRIATIONS
2002 2001
# #
Equity dividends on ordinary shares:
Final proposed 1.7p per share (2001 : 1.5p) 288,981 241,503
Interim paid 1p per share (2001 : 1p) 169,988 165,621
Additional amount paid in respect of 2001 final dividend 13,480 -
472,449 407,124
Subject to shareholder approval, the proposed 2002 Final Dividend will be paid
on 30 May 2003.
5. EARNINGS PER ORDINARY SHARE
The calculation of basic earnings/(loss) per ordinary share is based on profits
of #997,965 (2001: loss of #646,454) and on 16,755,125 (2001: 16,035,175)
ordinary shares, being the weighted average number of ordinary shares in issue
during the year.
The diluted earnings per share is based on the profit for the year of #997,965
and on 17,038,452 ordinary shares, calculated as follows:
2002
No.
Basic weighted average number of shares 16,755,125
Dilutive potential ordinary shares:
Executive share options and employee SAYE schemes 283,327
17,038,452
A 2001 comparative for diluted earnings per share is not given as the exercise
of share options would have the effect of reducing the loss per ordinary share
and is therefore not dilutive under the terms of FRS 14.
Adjusted earnings per share
The adjusted earnings per share is calculated from operating profit before
goodwill amortisation of #2,797,956 (2001: #655,060) and on 16,755,125 (2001:
16,035,175) ordinary shares of 1p each being the weighted average number in
issue during the year.
The directors have chosen to present this adjusted earnings per share as they
believe that it provides a more meaningful indicator of the performance of the
Group.
6. NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation of operating profit/(loss) to net cash inflow from
operating activities
2002 2001
# #
Operating profit/(loss) 1,926,478 (236,796)
Depreciation of tangible fixed assets 457,274 514,469
Amortisation of goodwill 871,478 891,856
Profit on sale of fixed assets (2,532) (4,451)
Decrease in deferred payment debtor 678,804 464,937
Increase in other debtors (2,580,838) (1,254,527)
Decrease/(Increase) in stocks 30,082 (1,429)
Increase in creditors 1,216,294 175,169
Net cash inflow from operating activities 2,597,040 549,228
(b) Analysis of net funds/(debt)
At At
1 January Cash 31 December
2002 flow Other 2002
# # # #
Cash at bank and in hand 132,683 911,061 - 1,043,744
132,683 911,061 - 1,043,744
Bank loans (1,111,479) 205,000 (3,211) (909,690)
Finance leases (225,131) 225,131 - -
(1,203,927) 1,341,192 (3,211) 134,054
(c) Reconciliation of net cash flow to movement in net debt
2002 2001
# #
Increase in cash in the year 911,061 104,138
Cash outflow/(inflow) from movement in debt and lease financing 430,131 (242,125)
Change in net debt arising from cash flows 1,341,192 (137,987)
Other non-cash movements (3,211) 3,310
Movement in net debt in the year 1,337,981 (134,677)
Net debt at 1 January (1,203,927) (1,069,250)
Net funds/(debt) at 31 December 134,054 (1,203,927)
(d) Non-cash transactions
During the year the Company issued shares to the vendors of acquired businesses
with a fair value on issue of #831,250.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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