Active Risk Grp PLC (ARI) - Half Year Results RNS Number : 2708Q Active Risk Group PLC 05 November 2012 AIM: ARI ACTIVE RISK GROUP PLC ("Active Risk" or "the Group") Half Year Results for the six months ended 30 September 2012 Active Risk Group has developed a market-leading risk management software solution, Active Risk Manager ("ARM"). ARM enables enterprises to manage risk more effectively and so enhance business performance. The web-based solution is recognised as the only comprehensive enterprise risk management software available today and is used by leading national and international companies across many industry sectors. Key Points · Results reflect increased sales resource as well as further investment in marketing and product development · Revenue up by 11% to £3.77m (2011: £3.39m) · Significant uplift in recurring revenues; support income up by 26% to £2.27m (2011: £1.80m) · Nine new ARM customers added, contributing to income of £1.06m from software licence sales of ARM (2011: £1.13m) · Loss before share-based payment charges, interest and tax of £0.74m (2011: £0.56m) Statutory loss before tax of £0.80m (2011: loss of £0.63m) · Loss per share of 2.3p (2011: loss per share of 2.0p) · Net cash of £2.3m at 30 Sept 2012 (31 March 2012: £3.3m) · Strategy to broaden the Group's sales pipeline to reduce dependency on major deals is bearing fruit - large deal discussions also remain ongoing Lynton Barker, Chairman of Active Risk, said, "Over the last two years, we have reshaped the business. This has included transforming our sales and marketing teams, re-building our position in the USA and establishing an office in Australia as well as taking out unnecessary cost. We have also sought to respond to changing market conditions. As part of this we revised our approach to new business, directing more of our sales and marketing activity towards generating a broader pipeline of opportunities within our chosen market sectors. Over the last few months our strategy to broaden the sales pipeline has begun to bear fruit and at the same time, we remain in active discussions with various parties over large deals. While market conditions are tough, the Board believes that the investment which the Group has made in marketing and in the sales teams will continue to build the sales pipeline and that this will support growth over the second half and beyond." Enquiries: Active Risk Group plc Lynton Barker, Executive Chairman T: 01628 582500 Andrew Darby, Finance Director Biddicks Katie Tzouliadis T: 020 3178 6378 finnCap Stuart Andrews, Corporate Finance T: 020 7220 0500 Henrik Persson, Corporate Finance Joanna Weaving, Corporate Broking ACTIVE RISK GROUP PLC CHAIRMAN'S STATEMENT Introduction Over the last two years, we have reshaped the business. This has included transforming our sales and marketing teams, re-building our position in the USA and establishing an office in Australia as well as taking out unnecessary cost. We have also sought to respond to changing market conditions. As part of this we revised our approach to new business, directing more of our sales and marketing activity towards generating a broader pipeline of opportunities within our chosen market sectors. Over the last few months our strategy to broaden the sales pipeline has begun to bear fruit and, at the same time, we remain in active discussions with various parties over large deals. We continue to invest in ARM and are due to launch the next release of the product before the end of the calendar year. Our financial position remains strong, with net cash of £2.3m, in line with our internal budgets. Looking ahead, while the economic conditions remain challenging and companies are exercising caution in their procurement, leading to extended sales cycles and delayed decision-making, we believe that the progress we have been making in enlarging our sales pipeline will support growth in the second half and beyond. Results Total revenue for the six months to 30 September 2012 rose by 11% to £3.77m against the same period last year (2011: £3.39m). This was driven by an increased recurring revenue base which saw support revenues up by 26% at £2.27m (2011: £1.80m), with income from software licence sales of ARM at £1.06m (2011: £1.13m) and services revenues at £0.45m (2011: £0.46m). Cost of sales, which includes the costs of our software development, consulting and support resources, was 18% higher than last year at £1.82m (2011: £1.54m) reflecting our continued investment in product development and expansion of the support team to cover Australia. Administrative expenses, adjusted to exclude share-based payments, were in line with last year at £1.02m (2011: £1.01m). A charge of £0.06m for share-based payments (2011: £0.07m) resulted in administrative expenses of £1.08m (2011: £1.08m). Selling and distribution costs were £1.67m (2011: £1.41m), with the increase on last year resulting from the investments we made in the sales and marketing teams over the last year. Before share-based payment charges, interest and tax, the loss before tax ("LBIT") was £0.74m (2011: LBIT of £0.56m).The Group's statutory loss before tax was £0.80m (2011: loss before tax of £0.63m) and the loss per share was 2.3p (2011: loss of 2.0p). The Group's balance sheet remains strong. Net cash at 30 September 2012 stood at £2.3m, in line with management budgets (31 March 2012: £3.3m). Dividend As in previous years, the Group will not be paying an interim dividend. Our focus is to build cash reserves that are appropriate for the scale of our business. Operating Review Software licence sales We continued to make progress in both signing new ARM customers and selling additional licences to existing customers. During the period, the Group won contracts with nine new customers. Our new wins for ARM included the following: · The Habtoor Leighton Group, one of the leading diversified international contractors in the Middle East and North Africa · Orascom, the diversified conglomerate based in Egypt · Mongolian Mining Corporation, the largest producer and exporter of high-quality hard coking coal in Mongolia Existing customers continue to purchase additional product and we were pleased to receive orders from: · CH2MHill · Transpacific · Urenco Sales Pipeline The sales pipeline continues to strengthen as we have broadened our focus within our target markets to create a larger pool of opportunities in order to reduce the Group's dependency on larger deals. At the same time, we remain actively engaged with various parties over larger deals. The investment we have made in marketing has been primarily about increasing in-bound enquiries by creating out-bound contact and as part of this, we launched the first ever World Risk Day in June. Its success exceeded our expectations and we are planning to repeat this event in 2013. In addition, we have focused our sales resources on our core industries and re-launched our website, both with a positive impact on our sales pipeline. Product Development We continue to invest in ARM and are due to launch the next release of the product before the end of the calendar year. Outlook While market conditions are tough, the Board believes that the investment which the Group has made in marketing and in the sales teams will continue to build the sales pipeline and that this will support growth over the second half and beyond. Lynton Barker Executive Chairman ACTIVE RISK GROUP PLC Consolidated Statement of Comprehensive Income for the six months ended 30 September 2012 Six months ended Six months ended Year ended 31 30 September 30 September March 2012 2012 (Unaudited) 2011 (Unaudited) (Audited) Notes £000s £000s £000s Revenue 3,774 3,388 7,252 Cost of sales (1,824) (1,536) (3,497) Gross profit 1,950 1,852 3,755 Administrative (1,084) (1,075) (2,281) expenses Selling and (1,671) (1,408) (3,196) distribution costs Group operating loss (805) (631) (1,722) Analysed as follows: Group operating loss (742) (563) (1,607) before share based payments Share based payments (63) (68) (115) Finance income 6 7 15 Finance costs (1) (1) (2) Net finance income 5 6 13 Loss before income tax (800) (625) (1,709) Income tax credit/ 2 58 (6) (43) (expense) Loss and total comprehensive income for the period attributable to owners of the parent (742) (631) (1,752) Loss per share attributable to the owners of the parent during the period Basic and diluted 3 (2.3p) (2.0p) (5.6p) ACTIVE RISK GROUP PLC Consolidated Statement of Financial Position at 30 September 2012 30 31 Note September 2012 30 September 2011 March 2012 (Unaudited) (Unaudited) (Audited) £000s £000s £000s Non-current assets Property, plant and 187 207 229 equipment Prepayments 69 69 69 Total non-current assets 256 276 298 Current assets Trade and other 1,742 2,386 2,137 receivables Cash and cash equivalents 2,342 3,896 3,343 Total current assets 4,084 6,282 5,480 Total assets 4,340 6,558 5,778 Liabilities Current liabilities Trade and other payables (2,871) (3,256) (3,606) Current income tax (17) - (19) liabilities Total current liabilities (2,888) (3,256) (3,625) Non-current liabilities Deferred income and bank (43) (140) (65) loans Total liabilities (2,931) (3,396) (3,690) Net assets 1,409 3,162 2,088 Equity Capital and reserves attributable to equity holders of the company Ordinary shares 4 333 333 333 Share premium 4 4,654 4,654 4,654 Merger reserve 486 486 486 Own Shares 4 (14) (14) (14) Retained earnings (4,050) (2,297) (3,371) Total equity 1,409 3,162 2,088 ACTIVE RISK GROUP PLC Consolidated statement of cash flows for the six months ended 30 September 2012 Year ended Six months ended Six months ended 31 March 2012 30 September 2012 30 September 2011 (Unaudited) (Unaudited) (Audited) £000s £000s £000s Cash flows from operating activities Loss for the year (742) (631) (1,752) Adjustments for: Depreciation of property, plant and 75 86 165 equipment Impairment loss on - - 97 trade receivables Loss on disposal of property, plant and - - 3 equipment Share based payment 63 68 115 transactions Income tax (credit)/ (58) 6 43 expense Net finance income (5) (6) (13) (667) (477) (1,342) Changes in working capital: Trade and other 395 1,662 1,804 receivables Trade and other (725) (886) (579) payables (997) 299 (117) Interest paid (1) (1) (2) Income tax received/ 55 (16) (27) (paid) Net cash (used in)/ generated from operating activities (943) 282 (146) Cash flows from investing activities Purchases of property, (33) (44) plant and equipment (148) Proceeds from sale of property, plant and - - equipment 1 Interest received 6 7 15 Net cash used in (27) (37) (132) investing activities Cash flows from financing activities Repayments on bank loan (31) (30) (60) Proceeds from issue of - 3 3 share options Proceeds from issuance of ordinary shares - 1,362 1,362 Net cash (used in)/generated from (31) 1,335 1,305 financing activities Net (decrease)/ increase in cash and cash equivalents (1,001) 1,580 1,027 Cash and cash equivalents at the beginning of the period/ year 3,343 2,316 2,316 Cash and cash equivalents at end of period/ year 2,342 3,896 3,343 ACTIVE RISK GROUP PLC Consolidated Statement of Changes in Equity for the six months ended 30 September 2012 Ordinary Share Merger Retained Total shares premium reserve Own shares earnings equity £000s £000s £000s £000s £000s £000s At 1 April 303 3,319 486 (1,734) 2,360 2011 (14) Total (631) (631) comprehensive income - - - - Issue of share capital 30 1,335 - - - 1,365 Share based 68 68 payment - - - - transactions At 30 September 2011 333 4,654 486 (2,297) 3,162 (Unaudited) (14) Ordinary Share Merger Retained Total shares premium reserve Own shares earnings equity Note £000s £000s £000s £000s £000s £000s At 1 April 303 3,319 486 (1,734) 2,360 2011 (14) Total - - (1,752) (1,752) comprehensive - - income Issue of 30 1,335 - 1,365 share capital - - Share based 115 115 payment - - transactions - - At 31 March 333 4,654 486 (14) (3,371) 2,088 2012 (Audited) Total (742) (742) comprehensive income - - - - Share based 63 63 payment transactions - - - - At 30 333 4,654 486 (14) (4,050) 1,409 September 2012 (Unaudited) Notes to the Accounts 1. Basis of preparation The unaudited interim accounts were approved by the Board of Directors on 2 November 2012 and have been prepared under the accounting policies set out in the 2012 annual report and in accordance with IAS34. The financial information contained in this interim report does not constitute statutory accounts, as defined by S434 of the Companies Act 2006. Statutory accounts for Active Risk Group plc for the year ended 31 March 2012, on which the auditors gave an unqualified opinion, have been delivered to the Registrar of Companies. The Directors confirm that the Group has adequate resources to continue its operational existence for the foreseeable future and therefore continue to adopt the going concern basis for the preparation of the Interim Results. The Directors believe that there is only one reportable segment and, therefore, no segmental disclosures required under IFRS 8 'Operating Segments' have been presented. 2. Taxation Six months ended 30 Six months ended Year ended 31 September 2012 (Unaudited) 30 September 2011 March 2012 (Unaudited) (Audited) £000s £000s £000s Income tax (58) 6 43 (credit)/expense 3. Loss per share Six months ended 30 Six months ended 30 Year September 2012 September 2011 (Unaudited) (Unaudited) ended 31 March 2012 (Audited) £000s £000s £000s Loss attributable to (742) (631) (1,752) equity holders of the company Number Number Number Weighted average number of shares in issue 31,917,300 30,789,377 31,266,133 Dilution effect of share - - - options Diluted weighted average number of shares in issue 31,917,300 30,789,377 31,266,133 Basic and diluted loss per share Attributable to the ordinary equity holders of the company (2.3p) (2.0p) (5.6p) 4. Share capital Allotted, called up and No. of fully paid shares Share capital Share premium Total 000s £000s £000s £000s Ordinary shares of 1p each as at 1 April 2012 and 30 September 2012 31,917 319 4,654 4,973 Treasury shares held by Employee Benefit Trust 1,429 14 - 14 33,346 333 4,654 4,987 5. Interim statement A copy of this interim statement will be sent to shareholders who have requested a paper copy. Copies are available on the Group's website, www.activerisk.com, or on request from the Group's registered office: 1 Grenfell Road Maidenhead Berkshire SL6 1HN This information is provided by RNS The company news service from the London Stock Exchange END IR BRBDBDXGBGDD -0- Nov/05/2012 07:00 GMT
Active Risk Grp PLC ARI Half Year Results
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