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Active Risk Grp PLC ARI Half Year Results



  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
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