Interim Results
September 29, 2006
Interim Results. Check it out:(Hugin Via Thomson Dialog NewsEdge) CENTROM GROUP plc Interim results for six months ended 30 June 2006 Chairman and COO Statement Centrom Group plc (AIM:CEN), a supplier of a broad range of innovative IT solutions, with an emphasis on sales to the healthcare and financial services sectors, reports an EBITDA loss for the first six months ended 30 June 2006 of GBP390,000 on revenues of GBP1.8m. In response to rapidly changing market conditions and declining profit margins in Centrom's traditional hardware sales market, identified in the first quarter of 2006, the board and management embarked on a restructuring aiReutersat eliminating loss making and low margin activity and reducing costs. With restructuring complete Centrom will focus on growing high margin business and improving cash flow management with the objective of establishing sustainable profitability. The first quarter to 31 March 2006 was particularly disappointing, with revenues of GBP681,000 and an EBITDA loss of GBP265,000. Restructuring began towards the end of the quarter. On 28 April 2006 Paul Ryder, the CEO and Michael McNamara, the Company Secretary resigned from the Board. Paul Ryder's duties were assuReutersby Mike Boseley, the Chief Operating Officer, and Secretarial Solutions Limited has since assuReutersthe role of Company Secretary. Headcount was reduced from 34 to 27. To consolidate its position the company raised GBP300,000 by way of placing 30m shares at a price of 1p per share. The board is grateful to those investors who provided financial support at an important moment for Centrom. The turnaround strategy of eliminating low margin stand alone hardware sales and reducing costs was in place by mid April. In the second quarter the benefits of restructuring, which gave rise to an exceptional charge of GBP110,000, became immediately apparent. Revenues to 30 June 2006 increased to GBP1,148,000 compared with GBP681,000 in quarter one. EBITDA losses were reduced to GBP15,000 before restructuring costs compared with GBP265,000 in the first quarter. Centrom now has three core activities: Consultancy; Managed Services (Data Centres) and Technical Services (Hardware, Software, installation and maintenance), but only when supplied as part of a wider consultancy solution. In the second quarter the Consultancy sales were GBP242,000, a 25% increase on the first quarter showing a profit margin of 30% and representing 24% of turnover. Managed Services second quarter sales were GBP377,000 an increase of 19% on the first quarter, showing a profit margin of 25% and representing 38% of turnover. Technical Services sales were GBP604,534 an increase of 35% on the first quarter, showing a profit margin of 25% and representing 38% of turnover. In the second quarter significant new projects have been won including Barnsley Metropolitan Borough Council, in partnership with Bull; BG Group; Alea (Insurance); Wagamama and Arch Insurance in partnership with TAH - The Accounting House. In total these contracts have a value of approximately GBP400,000. Sales prospects for the second half are strong and the Board is confident that the improving trend in sales and the higher margins established in the second quarter will be, at least, maintained. Centrom is involved in providing key IT solutions to a number of significant organisations particularly, in the healthcare and financial sectors. Since April 2006 we have established a platform for the growth of Centrom. Gerald Malone Mike Boseley Chairman COO 29 September 2006 Centrom Group plc Group Profit and Loss Account for the six months ended 30 June 2006 +------------------------------------------------------------------ -+ | | Notes | | | Period ended | | | | 6 months ended | | 31 December | | | | 30 June 2006 | | 2005 | |-----------------------+-------+----------------+---+------------- -| | | | (Unaudited) | | (Audited) | |-----------------------+-------+----------------+---+------------- -| | | | GBP | | GBP | |-----------------------+-------+----------------+---+------------- -| | Group turnover | | 1,829,889 | | 1,080,614 | |-----------------------+-------+----------------+---+------------- -| | Cost of sales | | 1,350,928 | | 1,468,227 | |-----------------------+-------+----------------+---+------------- -| | | | | | | | Gross profit/(loss) | | 478,961 | | (387,613) | |-----------------------+-------+----------------+---+------------- -| | Administrative | 2 | 990,236 | | 860,115 | | expenses | | | | | |-----------------------+-------+----------------+---+------------- -| | Exceptional item | 3 | 110,122 | | - | |-----------------------+-------+----------------+---+------------- -| | Other operating | | 750 | | 2,463 | | income | | | | | |-----------------------+-------+----------------+---+------------- -| | | | | | | | Operating loss | | (620,647) | | (1,245,265) | |-----------------------+-------+----------------+---+------------- -| | Interest receivable | | 1,025 | | 2,899 | |-----------------------+-------+----------------+---+------------- -| | Interest payable and | | (1,335) | | (2,483) | | similar charges | | | | | |-----------------------+-------+----------------+---+------------- -| | | | | | | | Loss on ordinary | | | | | | activities before | | | | | | taxation | | (620,957) | | (1,244,849) | |-----------------------+-------+----------------+---+------------- -| | Tax on loss on | | - | | (284,150) | | ordinary activities | | | | | |-----------------------+-------+----------------+---+------------- -| | | | | | | | Loss on ordinary | | | | | | activities after | | | | | | taxation | | (620,957) | | (960,699) | |-----------------------+-------+----------------+---+------------- -| | Minority interest | | - | | 2,381 | |-----------------------+-------+----------------+---+------------- -| | | | | | | | Loss on ordinary | | | | | | activities after | | | | | | taxation | | GBP(620,957) | | GBP(958,318) | |-----------------------+-------+----------------+---+------------- -| | | | | | | |-----------------------+-------+----------------+---+------------- -| | Basic loss per share | 4 | 0.33p | | 0.59p | | (pence) | | | | | |-----------------------+-------+----------------+---+------------- -| | Diluted loss per | 4 | 0.33p | | 0.59p | | share (pence) | | | | | +------------------------------------------------------------------ -+ Centrom Group plc Consolidated Balance Sheet at 30 June 2006 +------------------------------------------------------------------ -+ | | | | | | 31 | | | | | | | December | | | 30 June 2006 | | 30 June 2005 | | 2005 | |----------------+--------------+---+--------------+---+----------- -| | | (Unaudited) | | (Unaudited) | | (Audited) | |----------------+--------------+---+--------------+---+----------- -| | | GBP | | GBP | | GBP | |----------------+--------------+---+--------------+---+----------- -| | Fixed assets | | | | | | |----------------+--------------+---+--------------+---+----------- -| | Intangible | 7,547,460 | | 6,549,911 | | 7,731,727 | | assets | | | | | | |----------------+--------------+---+--------------+---+----------- -| | Tangible | 168,780 | | 223,158 | | 209,437 | | assets | | | | | | |----------------+--------------+---+--------------+---+----------- -| | | 7,716,240 | | 6,773,069 | | 7,941,164 | |----------------+--------------+---+--------------+---+----------- -| | Current assets | | | | | | |----------------+--------------+---+--------------+---+----------- -| | Stocks & WIP | 10,203 | | - | | 16,600 | |----------------+--------------+---+--------------+---+----------- -| | Debtors | 1,073,280 | | 1,159,836 | | 901,482 | |----------------+--------------+---+--------------+---+----------- -| | Cash at bank | - | | 760,035 | | 492,989 | | and in hand | | | | | | |----------------+--------------+---+--------------+---+----------- -| | | 1,083,483 | | 1,919,871 | | 1,411,071 | |----------------+--------------+---+--------------+---+----------- -| | Creditors: | | | | | | | amounts | | | | | | | falling due | | | | | | | within one | | | | | | | year | 1,687,432 | | 1,308,954 | | 1,918,987 | |----------------+--------------+---+--------------+---+----------- -| | | | | | | | |----------------+--------------+---+--------------+---+----------- -| | Net current | (603,949) | | 610,917 | | (507,916) | | liabilities | | | | | | |----------------+--------------+---+--------------+---+----------- -| | Creditors: | | | | | | | amounts | | | | | | | falling due | | | | | | | after one year | - | | 200,038 | | - | |----------------+--------------+---+--------------+---+----------- -| | | | | | | | | Net assets | GBP7,112,291 | | GBP7,183,948 | | GBP7,433,248 | |----------------+--------------+---+--------------+---+----------- -| | | | | | | | |----------------+--------------+---+--------------+---+----------- -| | Capital and | | | | | | | reserves | | | | | | |----------------+--------------+---+--------------+---+----------- -| | Called-up | 2,087,838 | | 1,524,130 | | 1,787,838 | | equity share | | | | | | | capital | | | | | | |----------------+--------------+---+--------------+---+----------- -| | Share premium | 6,462,411 | | 5,659,818 | | 6,462,411 | | account | | | | | | |----------------+--------------+---+--------------+---+----------- -| | Profit and | (1,579,275) | | - | | (958,318) | | loss account | | | | | | |----------------+--------------+---+--------------+---+----------- -| | | | | | | | |----------------+--------------+---+--------------+---+----------- -| | Equity | 6,970,974 | | 7,183,948 | | 7,291,931 | | shareholders' | | | | | | | funds | | | | | | |----------------+--------------+---+--------------+---+----------- -| | Minority | 141,317 | | | | 141,317 | | interests | | | | | | |----------------+--------------+---+--------------+---+----------- -| | | | | | | | |----------------+--------------+---+--------------+---+----------- -| | | | | | | | | Capital | | | | | | | employed | GBP7,112,291 | | GBP7,183,948 | | GBP7,433,248 | +------------------------------------------------------------------ -+ Centrom Group plc Group Cash Flow Statement the six months ended 30 June 2006 +------------------------------------------------------------------ -+ | | Notes | 6 months | | Period | | | | ended 30 June | | ended 31 | | | | 2006 | | December | | | | | | 2005 | |---------------------------+-------+---------------+---+---------- -| | | | (Unaudited) | | (Audited) | |---------------------------+-------+---------------+---+---------- -| | | | GBP | | GBP | |---------------------------+-------+---------------+---+---------- -| | Net cash outflow from | 7 | (888,245) | | (1,574) | | operating activities | | | | | |---------------------------+-------+---------------+---+---------- -| | Returns on investments | | (310) | | 416 | | and servicing of finance | | | | | |---------------------------+-------+---------------+---+---------- -| | Taxation | | - | | (18,110) | |---------------------------+-------+---------------+---+---------- -| | Capital expenditure and | | (5,054) | | (222,405) | | financial investment | | | | | |---------------------------+-------+---------------+---+---------- -| | Acquisitions and | | - | | 660,169 | | disposals | | | | | |---------------------------+-------+---------------+---+---------- -| | | | | | | |---------------------------+-------+---------------+---+---------- -| | Cash outflow before | | (893,609) | | 418,496 | | financing | | | | | |---------------------------+-------+---------------+---+---------- -| | Financing | | 300,000 | | (2,892) | |---------------------------+-------+---------------+---+---------- -| | | | | | | |---------------------------+-------+---------------+---+---------- -| | | | | | | | (Decrease)/increase in | | | | | | cash | | (593,609) | | 415,604 | |---------------------------+-------+---------------+---+---------- -| | | | | | | +------------------------------------------------------------------ -+ Centrom Group plc Notes to the financial information 1. Basis of preparation The financial information set out in this report does not constitute full accounts for the purposes of Section 240 of the Companies Act 1985. The interim accounts for the six months ended 30 June 2006 and the figures for 30 June 2005 are unaudited. The figures for the period ended 31 December 2005 have been extracted from the audited accounts for that period. The accounts for the period ended 31 December 2005 contained an unqualified auditors' report and have been filed with the Registrar of Companies. The interim accounts have been prepared on the basis of the accounting policies set out in the report and accounts for the period ended 31 December 2005. The taxation charge has been calculated using the Directors' best estimate. In view of the losses incurred no provision has been made for taxation or for tax recoverable during the period. Centrom Group plc was incorporated on 14 March 2005 and on 9 June 2005 acquired the whole of the issued share capital of Centrom Limited in a share for share transaction. Prior to the share for share transaction the group had not traded. The Directors consider that trading results in the period from 9 June 2005 to 30 June 2005 are not significant. The Company has not extracted these details nor produced a Consolidated Profit and Loss Account or Cash Flow Statement for this period. The interim accounts were approved by the Directors on 29 September 2006. 2. Administrative expenses Administrative expenses include an amount of GBP184,267 (2005 - GBP168,091) in respect of goodwill written off. 3. Exceptional item The exceptional item relates to restructuring costs arising on the closure of the Enterprise division supplying stand alone hardware and software products. Hardware and software products are only supplied as part of an overall solution where services are also provided. 4. Earnings per share Earnings per share have been calculated on the net basis on the loss on ordinary activities before taxation of GBP620,957 (2005 - GBP958,318) using the average number of 1p ordinary shares in issue of 188,397,060 (2005 - 160,948,099). The diluted earnings per share is based on a loss for the six months of GBP620,957 (2005 - GBP958,318) using the average number of 1p ordinary shares of 188,397,060 (2005 - 161,836,988) after adjusting for diluting options. 5. Dividends No interim dividend is proposed. 6. Loss per share The calculation of loss per share is based on the loss for the period and on the weighted average number of ordinary shares in issue set out below. At 30 June 2006 there were 208,783,400 ordinary shares in issue. 6 months ended 30 Period ended 31 June 2006 December 2005 (Unaudited) (Audited) Loss for the period GBP(620,957) GBP(958,318) Weighted average number of shares in issue 188,397,060 160,948,099 Diluted loss per share is based on the loss for the period and on the weighted average number of ordinary shares in issue set out below. 6 months ended 30 June Period ended 31 2006 December 2005 (Unaudited) (Audited) Loss for the period GBP(620,957) GBP(958,318) Weighted average number of shares in issue 188,397,060 160,948,099 Dilutive effect of share options - 888,889 Fully diluted weighted average number of shares in issue 188,397,060 161,836,988 7. Reconciliation of operating loss to net cash inflow 6 months ended Period ended 30 June 2006 31 December 2005 (Unaudited) (Audited) GBP GBP Operating loss (620,647) (1,245,265) Amortisation 184,267 168,091 Depreciation 45,711 78,540 Loss on disposal of fixed assets - 709 Decrease/(increase) in stocks 6,397 (16,600) (Increase)/decrease in debtors (171,798) 673,037 (Decrease)/increase in creditors (332,175) 339,914 Net cash outflow from operating (888,245) (1,574) activities 8. Issue of equity On 4 May 2006 the Company issued 30,000,000 ordinary shares for cash at a price of 1p per ordinary share. Copies of this interim report will be sent to shareholders and may be obtained from the Company's registered office, Centrom House, 16 Church Road, Fleet, Hampshire GU51 3RH. ---END OF MESSAGE---
Copyright 2006 All Material Subject to Copyright
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