RNS Number:8797M
Asite PLC
27 June 2003
27 June 2003
Asite plc
PRELIMINARY RESULTS ANNOUNCEMENT
YEAR ENDED 31 DECEMBER 2002
Results Highlights:
- Substantial growth in revenue from continuing operations
to #1.6m (2001 #0.3m)
- Reduction in pre-tax losses to #5.4 million (2001 #8.4
million)
- Reduction in operating cash outflow due to increased
revenue and substantial reduction in the cost base
- Software licence acquired so eliminating a significant
liability.
Sir John Egan, Chairman of Asite plc, commented:
"Asite has proven its software integration and product development skills and
experience during the last year, created a clear value proposition to the
market, and is earning a significant customer base.
Given the good work of the executive team in reducing the cost base to a more
sustainable level, I look forward to continuing progress."
For further information please contact:
Asite plc
Tom Dengenis, Chief Executive Tel: 020 7554 5678
Deloitte & Touche Corporate Finance
Robin Binks Tel: 020 7936 3000
Richard Collins
CHAIRMAN'S STATEMENT
Results and dividends
The Group has freed itself from the distractions of the non-core businesses that
were disposed of at the end of the previous year. As a result the Board was
able to focus on organising its principal subsidiary, Asite Solutions Limited ("
Asite") for the long-term. The groundwork for achieving this has now all been
put in place, including significant changes to the structure of the Board, the
Group's underlying cost structure and its technologies.
Software product development will become the foundation of the intellectual
property of the business and the basis of how we progress to serve the market.
Consequently in 2003 the appropriate software product development expenditure
will be recognised in the accounts as a tangible fixed asset.
The Group's pre-tax loss of #5.4m compares with the #8.4m loss of the previous
year. The loss reflects the significant investment made in Asite. The loss per
share was 4.7p compared with 12.3p in the previous year. The directors are
satisfied with the position of the companies within the Group at 31 December
2002 and do not anticipate any significant deterioration in trading in the
coming year.
The Board is not recommending a dividend this year (2001 #nil).
Development of the Group
Following the extensive re-structuring of the Group in previous years, 2002 was
a time for consolidation, adjustment of the cost base and controlled organic
growth. Whilst no specific acquisitions are currently agreed, the market in
which Asite operates is rapidly changing and the Board will consider
opportunities as they arise.
Four Directors remained in post throughout the year, including myself, Walter
Goldsmith (Deputy Chairman), and Non-Executives Peter Rogers of Stanhope plc and
Robert Tchenguiz of Rotch Property Group Limited.
Tom Dengenis joined during the year as Chief Operating Officer, before being
promoted to Group Chief Executive in January 2003. Alastair Mellon has left the
Group to rejoin the construction industry, and Mathew Riley (Commercial
Director, Terminal 5) replaced Andrew Wolstenholme as BAA plc's Non-Executive
Director. Charles Woods moved into the position of Non-Executive Finance
Director.
We completed the cost restructuring of our core technology licence, which
provides Asite's web services and portal management components, the foundation
elements to our technology. The licence is now perpetual and fully paid and so
has eliminated a future liability in excess of #2.8m. Similar restructuring of
the cost of our production hosting service has also now been concluded.
This was driven by a change in emphasis away from a transaction and project
based revenue model towards revenue derived from the provision of services.
These services include collaboration, tender, contract administration, cost
management, community and scheduling as well as buy/supply and other support
applications to the customer enterprise.
This required a substantial increase in investment in our technology and in the
development of these new product offerings. The key objective in doing so was
to own our core technology assets and reduce the emphasis on reseller
agreements.
At the same time turnover from our ongoing business has continued to grow to
#1.6m from #0.3m in the previous year.
Asite's business model is now firmly geared towards the provision of technology
and the development of intellectual property assets, which answer the market's
demand for software that clearly results in competitive advantages for our
customers - in terms of increased profits and reduced process costs.
Operational review
Asite has focused on clarifying its strategic direction, as it refines its
relevance and value to the market it serves - namely facilitating the exchange
of information throughout the construction industry supply chain, enabling the
essential transparency and efficiency that the market continually needs to
improve. Asite has successfully re-engineered its technology platform and
delivered one major new product release (Asite Tender) already in 2003.
A number of important new customers were acquired, including St George
Securities, Whitbread, Grosvenor Estates and Birse Rail (in partnership with
Network Rail) - and the organisation is dedicating much of its energy towards
developing its business relationships with these early adopters, which are
acknowledged as key to its future.
The Company has also succeeded in retaining the ongoing commitment of many of
its original partners, including BAA, Stanhope and Laing O'Rourke who are now
rolling-out Asite's solutions across their businesses - with measurable results
and clear, direct economic benefits.
With solid growth coming from these deepening relationships (based on a
demonstrable return on the investment in our software), the Board can see
continued strength in our long-term contracted revenues. Having eliminated our
long-term contractual trade liabilities and reduced other key expenses, thus
significantly reducing the cost structure of the business, the Board anticipates
monthly cash flow becoming positive in 2003. As described in note 1 to the
accounts, the Company believes that it has adequate funding in place to reach
the point where it will become self-funding.
Calling of an Extraordinary General Meeting under Section 142 of the Companies
Act 1985
As at 27th June 2003, being the date of signing the Company's balance sheet, the
directors have felt it prudent to make provision in the Company's balance sheet
against loans made available by Asite plc to Asite Solutions Limited of #9.7m.
The effect of this provision is that the net assets of the Company are now less
than half of its called up share capital. The directors are required under
section 142 of the Companies Act 1985 (the "Act") to convene a general meeting
of the company where the net assets of a public company are half or less of its
called up share capital for the purpose of considering whether any, and if so
what, steps should be taken to deal with the situation.
Accordingly, the directors have called an Extraordinary General Meeting to take
place after the Annual General Meeting on 24th July 2003. The annual report
being sent to shareholders will include notice of the Annual General Meeting and
the Extraordinary General Meeting, which will incorporate the business required
under the provisions of section 142 of the Act.
The Company is continuing to operate within its borrowing facilities and Robert
Tchenguiz continues to support the Company as described in note 1. The
directors remain confident that Asite Solutions Limited will move ahead into a
period of profitable trading and that all necessary steps have been taken to
ensure its future success. The Company intends to continue with its current
strategy.
Prospects
An important component of Asite's success will be its Community programme (which
already comprises hundreds of companies and over 3,000 individual users).
Highlights include speakers from Laing O'Rourke and Wolseley at events in the
first half of 2003. I am looking forward to taking part in the programme myself
shortly to speak at our second anniversary dinner.
Asite has proven its software integration skills and experience during the last
year, created a clear value proposition to the market, and is earning a
significant customer base. This will mean we can further reduce the cash
outflows in the business during 2003.
Given the good work of the executive team in reducing the cost base to a more
sustainable level, I look forward to continuing progress. Whilst the
construction industry Asite serves still faces many challenges, there is a
growing appreciation of the role that Asite's technology can play in improving
business performance.
Sir John Egan
Chairman
27 June 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2002
2002 2001
#'000 #'000
TURNOVER
Continuing operations 1,575 307
Discontinued operations 24 4,779
1,599 5,086
Revenue share (469) (130)
Change in work in progress - discontinued - (474)
Net turnover 1,130 4,482
Staff costs 2,377 5,741
Depreciation and amortisation 2,245 1,307
Other operating charges 1,859 3,763
6,481 10,811
OPERATING LOSS
Continuing operations (5,283) (5,991)
Discontinued operations (68) (338)
(5,351) (6,329)
Loss on disposal of discontinued operations (11) (1,991)
Interest payable less receivable (29) (34)
LOSS ON ORDINARY ACTIVITIES (5,391) (8,354)
BEFORE TAXATION
Tax credit on loss on ordinary activities 71 27
LOSS ON ORDINARY ACTIVITIES (5,320) (8,327)
AFTER TAXATION
Equity minority interest 761 358
LOSS FOR THE FINANCIAL YEAR (4,559) (7,969)
Loss per share
- basic (4.7)p (12.3)p
CONSOLIDATED BALANCE SHEET
at 31 December 2002
2002 2001
#'000 #'000
FIXED ASSETS
Tangible fixed assets - 4,720
- 4,720
CURRENT ASSETS
Stock - 22
Debtors 564 800
Cash at bank 89 358
653 1,180
CREDITORS: amounts falling due
within one year (1,936) (2,699)
NET CURRENT LIABILITIES (1,283) (1,519)
TOTAL ASSETS LESS CURRENT LIABILITIES (1,283) 3,201
CREDITORS: amounts falling due (2,632) (2,742)
after more than one year
MINORITY INTERESTS 1,761 999
NET (LIABILITIES) /ASSETS (2,154) 1,458
CAPITAL AND RESERVES
Called up share capital 10,291 9,344
Share premium account 2,442 2,442
Profit and loss account (14,887) (10,328)
EQUITY SHAREHOLDERS' (DEFICIT)/FUNDS (2,154) 1,458
1. BASIS OF PREPARATION
The directors have prepared projected group cash flow information for the
current financial year and for the first half of the following year to 30 June
2004. The early stage of development of the Group's business is such that there
can be considerable unpredictable variation in the amount of revenue and the
timing and amount of cash flows. On the basis of this Group cash flow
information, the directors are aware that additional funding will be required.
Over the last 12 months, Mr. Robert Tchenguiz has provided the Group with the
financial support required. The directors believe Mr. Robert Tchenguiz will
continue to provide the funding required and have received a written
confirmation from him that he intends to provide this funding in the form of a
new loan amounting to #750,000 and that he will not call for the repayment of
this new loan or any existing loans before 30 June 2004.
This new loan has been agreed to be provided in the expectation that the Group
achieves its forecast cash flows in the period to 30 June 2004. However, there
is inherent uncertainty as to the realisation of the forecast and consequently
uncertainty as to the continuing support of Mr. Robert Tchenguiz.
On the basis of this cash flow information and discussions with Mr. Robert
Tchenguiz, the directors formed a judgement at the time of approving the
financial statements that they considered it appropriate to prepare the
financial statements on the going concern basis. The financial statements do
not include any adjustments that would result should support from Mr. Robert
Tchenguiz or other sources no longer be available.
2. TURNOVER
Turnover Operating Loss
2002
2002 2001 #'000 2001
#'000 #'000 #'000
Class of business:
Property services - discontinued - 4,779 - (338)
e-commerce portal and services- 1,575 307 (5,283) (5,991)
continuing
Lighting distribution - discontinued 24 - (68) -
1,599 5,086 (5,351) (6,329)
The analysis of net assets employed by class of business is:
Class of business:
e-commerce portal and services (2,154) 1,458
3. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' (DEFICIT)/FUNDS
2002 2001
#'000 #'000
Loss for the period (5,320) (8,327)
Net proceeds of issues of new share capital 947 5,006
Minority interest 761 999
Merger reserve adjustment - 1,871
(3,612) (451)
Opening shareholders' funds 1,458 1,909
Closing shareholders' (deficit)/funds (2,154) 1,458
4. STATUS OF FINANCIAL INFORMATION IN THIS ANNOUNCEMENT
The financial information contained in this report does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985, but is
derived from those accounts.
The year ended 31 December 2001 comparative figures have been extracted from the
audited accounts. The audit report issued in respect of the accounts for the
year ended 31 December 2001 contained an unqualified audit opinion except for a
limitation of scope in respect of work relating to the results and disposal of
Foremans Limited, as the auditors:
a) did not obtain all the information or explanations that they
considered necessary for the purposes of their audit; and
b) were unable to determine whether proper accounting records had
been kept.
In addition the auditors drew attention to the uncertainty as to the continuing
availability of financial support from Mr. Robert Tchenguiz.
The accounts for the year ended 31 December 2001 have been delivered to the
Registrar of Companies.
The statutory accounts for the year ended 31 December 2002 will be delivered to
the Registrar of Companies following the Company's Annual General Meeting. The
auditors have drawn attention to the uncertainty as to the continuing
availability of financial support from Mr. Robert Tchenguiz.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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