TIDMBCT
RNS Number : 8861Z
Business Control Solutions Grp PLC
30 September 2009
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30 September 2009
BUSINESS CONTROL SOLUTIONS GROUP PLC
Interim results
Business Control Solutions Group plc (the "Group" or the "Company") (BCT.L), the
AIM listed provider of consultancy and software control solutions to the
financial services sector announces its unaudited interim results for the six
months ended 30 June 2009.
+----------------------+--------------+--------------+
| | Six months | Six months |
| | to 30 June | to 30 June |
| | 2009 | 2008 |
| | GBP'000 | GBP'000 |
+----------------------+--------------+--------------+
| Revenue | 4,497 | 4,548 |
+----------------------+--------------+--------------+
| Gross profit | 1,263 | 1,564 |
+----------------------+--------------+--------------+
| (Loss) / Profit | (414) | 29 |
| before tax | | |
+----------------------+--------------+--------------+
| Adjusted* loss | (434) | (263) |
| before tax | | |
+----------------------+--------------+--------------+
| (Loss) / Profit per | (0.2)p | 0.0p |
| share | | |
+----------------------+--------------+--------------+
| Cash | 1,994 | 2,308 |
+----------------------+--------------+--------------+
* Adjusted for capitalisation and amortisation
Financial Highlights:
* Group turnover down 1%:
* Consulting revenues up 0.4%
* Software revenues down 11%
* Recurring revenues up to 90% of Software revenue (2008: 65%)
* Adjusted loss before tax after removing the impacts of development cost
capitalisation and amortisation GBP434,000 (H1 2008: loss of GBP263,000)
* Strong cash position of GBP2.0m (H1 2008: GBP2.3m)
Operating Highlights:
· Consulting division:
o Proved its resilience in a challenging market
- Q1 revenues down 5% on prior year but Q2 revenues up 8%
o Consultancy utilisation rate continues at above 85%
o Now actively
hiring
· Software division:
o Next version of our strategic product Arc
now live at two Tier 1 banks
o Investment continues in enhancing the
functionality of both Integrity and Arc
o Recurring revenues up 23%
Possible delisting from AIM
* Board currently considering merits of continuing with AIM listing
Commenting on the results, Nigel Walder, CEO of Business Control Solutions Group
plc said:
"The first half of the year has seen us face up to extremely challenging market
conditions. Our Consulting business, after a disappointing first quarter, in
which sales declined, saw strong growth in Q2 as we saw increased demand for our
services. In response to this increased demand we are now looking to recruit at
varying levels within the division. In our Software business, interest in our
core strategic technology products, Integrity and Arc remains strong. We
continue to face lengthening sales cycles as our prospective customers wrestle
with the need for increased control and their own internal budgetary pressures.
Even so, given our strong market position and sales pipeline, we
remain cautiously confident about the outlook for the remainder of the year."
Ends
For further information, please contact:
+--------------------------------------+----------+------------------------+
| Business Control Solutions Group plc | | 0207 648 2050 |
+--------------------------------------+----------+------------------------+
| Nigel Walder, CEO | | |
+--------------------------------------+----------+------------------------+
| Roger Shepherd, Finance Director | | |
+--------------------------------------+----------+------------------------+
| | | |
+--------------------------------------+----------+------------------------+
| Financial Dynamics Limited | | 0207 831 3113 |
+--------------------------------------+----------+------------------------+
| James Melville-Ross | | |
+--------------------------------------+----------+------------------------+
| Haya Chelhot | | |
+--------------------------------------+----------+------------------------+
| | | |
+--------------------------------------+----------+------------------------+
| Arbuthnot Securities Limited | | 020 7012 2000 |
+--------------------------------------+----------+------------------------+
| Tom Griffiths | | |
+--------------------------------------+----------+------------------------+
Chairman's Statement
We began the year facing a good deal of uncertainty. The financial crisis and
its aftermath saw many of our clients facing unprecedented challenges and
pressures. Many of them cancelled or postponed planned projects and became
internally focused on identifying and making cost savings.
Our Consulting division, which has been the bedrock of our business, came under
pressure particularly in the latter part of '08 and in Q1 of this year. Both day
and utilisation rates suffered through a worsening market for our services. I am
pleased to say that we appear to have successfully managed our way through this
period. The importance we have attached to the quality of our execution and in
building our client relationships have paid dividends and so we are cautiously
optimistic about the division's prospects for the remainder of the year.
In our Software division we have continued to invest in our strategic products.
A new version of our Arc product is now live at two tier 1 banks and Integrity
now has 3,000 users worldwide at a tier one European bank. We remain encouraged
by the level of interest shown in our strategic products, but have been faced
with lengthening sales cycles as the widespread market uncertainty has led to
hesitancy. Our challenge remains one of converting this interest into sales. We
have sought to address this by increasing our sales resource and through
aligning sales resource behind our strategic products.
The next twelve months are key in terms of proving the viability of our
strategic software products. The sales re-organisation has improved the strength
and quality of our sales pipe and we remain confident in the division's future.
Within our clients, the demand for increased visibility and control has retained
its high profile, triggering interest in both Arc and Integrity. Arc offers the
potential for significant cost savings at a time when our clients are under
pressure to become more efficient.
The market for our Consulting services has improved in recent months as our
clients are now returning to business as usual and in some instances are finding
themselves lacking in resource. Looking further out, we believe the demand for
our services and products will build as the pressure grows on our customers to
become more efficient and increase their level of internal control.
We would also like to advise our shareholders that the Board is currently
considering the merits of continuing with the Company's AIM listing. For some
time, the Board has felt that the Company's valuation does not accurately
reflect the strategic progress made in recent years. This, together with the
shares' low liquidity and the costs of the listing, have lead us to believe that
BCS's plans might be better served as a private entity. The Board is currently
exploring how a delisting might be best achieved and is also deliberating the
most appropriate and practical mechanism that would allow shareholders who do
not or cannot hold shares in an off market company to sell some of their
holdings. We will advise shareholders of our plans in due course.
I'd like to finish by thanking all of our staff for their continued hard work
and commitment in the first half of 2009.
Steve Russell
Chairman
30 September 2009
Chief Executive's Review
Consulting revenues recovered from a slow start to the year to end the period
marginally up on H1 2008. Software revenues have again fallen back as we
continue to focus on our strategic products: Integrity and Arc. Whilst we are
encouraged by the levels of interest shown in both Integrity and Arc, the
challenge remains for us to convert this interest into contracted sales.We have
remained mindful of the need to conserve our cash balance in what has been a
volatile market and through cost reduction measures taken largely in '07 and '08
we have retained a healthy cash balance.
Financial Performance
Revenue
Group revenues for the half year fell back 1% on 2008 to GBP4,497,000.
Consulting revenues for the half year on a day adjusted basis grew by 1% whilst
Software revenues declined by 11%.
In our Consulting division, after a disappointing start to the year, we saw
revenues recover strongly with Q2 average daily sales being 11% higher than
those experienced in Q1.2008 saw us experience a weakening in demand for our
services as our customers began to feel the effects of the financial crisis and
this impact continued into the early part of 2009. The strength of our
relationships and agility due to our size have allowed us to emerge relatively
unscathed from what has been an extremely challenging period.
+-------------------+---------+---------+---------+---------+---------+---------+
| | Q1 '08 | Q2 '08 | Q3 '08 | Q4 '08 | Q1 '09 | Q2 '09 |
+-------------------+---------+---------+---------+---------+---------+---------+
| Average Daily | 31,823 | 31,143 | 29,615 | 29,844 | 30,175 | 33,623 |
| Sales GBP | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+
| Change on prior | 17% | 2% | -1% | -7% | -5% | 8% |
| year | | | | | | |
+-------------------+---------+---------+---------+---------+---------+---------+
Revenues in the Software division fell by 11%. This fall reflects our strategy
of focusing the Software division on generic products rather than bespoke
solutions. We have not looked to sell in enhancements to our installed solutions
base and revenue from these services is down by GBP160,000 on H1 '08. Our
efforts to improve the visibility of the Company's forward revenue streams have
led to the division's recurring revenues increasing 23% to GBP497,000, now
representing 90% of the division's revenue.
Gross margin
Gross margin for the Group for the half year was 28%, down from 34% last year.
In the Consulting division, margins were off by 6% on H1 '08. The consultancy
margin in Q1 was badly affected by a higher and heavier bench than we have
become used to, with senior resource being under utilised. Q2 has seen
utilisation recover to recent historical levels contributing to an improvement
in the Q2 margin of 8% on Q1. Margins have additionally come under rate pressure
from some of our customers and our lack of confidence in the market resulted in
us servicing opportunities through our associate network rather than recruiting
permanent staff. Margins from our associates are typically well below those
achieved from our permanent staff. In the Software division margins retreated
slightly (2%) largely in response to the reduction in the level of enhancement
activity to our installed solutions base which is primarily billed on a T&M
basis.
Operating expenses
Operating expenses for the half year increased by GBP108,000 on H1 '08. This is
largely down to the fact that amortisation of Integrity did not commence until
June '08. Removing the impact of both amortisation and capitalisation, operating
expenses reduced by GBP164,000.The saving can largely be attributed to headcount
related savings from within the Software division.
Finance income
Finance income for the period dropped to GBP13,000 from GBP50,000 primarily as a
result of the fall in interest rates.
Loss before tax
The Group reported a loss before tax for the half year of GBP414,000 against a
profit in H1 '08 of GBP29,000. Removing the impact of development cost
capitalisation and amortisation then the loss for the half year rose from
GBP263,000 in H1 '08 to GBP434,000.
Balance sheet
Intangible assets include GBP975,000 of capitalised development costs (2008:
GBP881,000). Our investment in the new version of Arc accounts for the increase
in the carrying value in the period.
Debtor days outstanding have improved to 50 (H1 2008: 61) due to better credit
control and changes in the customer and sales mix.
Cash flow
The period saw us use GBP788,000 (H1 '08 GBP458,000) of cash. Q1 sees us meet
our annual bonus obligation in our Consulting division, in respect of the
previous year. Although debtor days improved significantly on June '08 they fell
back on December '08, had they remained at December's level then cash would have
been c.GBP350,000 higher. We additionally invested a further GBP186,000 in
building our strategic products, principally Arc.
Dividends
The Directors do not propose the payment of an interim dividend for the six
months to 30 June 2009 (2008: nil).
Consulting Division
The division began the year facing a number of challenges: customer pressure on
rates; a number of engagements coming to an end; a higher bench and a thin sales
pipe. The division reacted to these challenges by swapping reduced rates for
increased tenure; accepting reduced rates for 'benched' staff; freezing
recruitment; and passing on any rate reductions where possible to our
associates. These measures plus the strength of our client relationships allowed
us to negotiate our way through the challenging environment and we will be in a
position to move forward once market conditions improve. In Q2, we saw
utilisation levels return to, and settle above, 85% with daily revenues
consistently above GBP30,000.
In Q1, short term confidence levels were low and consequently rather than
recruit speculatively we reacted to any opportunities by drawing on our
associate network. This had a knock on negative effect on margins as the margin
earned from an associate is significantly below that from a permanent employee.
Our average chargeable headcount in the period remained unchanged on H1'08 at
55, however the percentage mix between permanent staff and associates swung from
71:29 to 60:40. We are now more confident in our immediate prospects and are
currently recruiting selectively. One impact of this should be a redressing of
the balance between permanent staff and associates and a resultant positive
impact on the margin.
Our strategy in this division is to continue to concentrate our efforts on
delivering a focused quality consulting proposition to our targeted customer
base. We remain focused on the financial markets sector where we continue to
target the wholesale banking sector, specifically Investment Banks, Asset
Management and Service Provider organisations where we are able to leverage our
domain experience. We have continued to build our reputation as an execution
focused management consultancy firm. Our core offer is concentrated around the
themes of cost reduction and business transformation. Within our cost reduction
offering we look to identify and capture operational savings through our
understanding of an organisation's enterprise architecture requirements. Under
business transformation we have considerable experience in designing and
implementing large change programmes for a variety of financial sector
organisations in operations, finance and technology functions.
We have continued the process of investing in our people and have seen staff
attrition rates improve significantly. Having identified business development
skills as a key area for improvement in '08 we have implemented both training
and coaching programmes. We believe we are now beginning to reap the benefits
of the investments we have made in recruiting and in training high calibre
personnel, which, are now showing through in the quality of our service
delivery.
Software Division
In Software, we remain focused on building and establishing our strategic
products as industry leading and through our move to an annuity revenue model we
aim to create a more stable business model. The first half of the year has
again been particularly challenging for the Software division. The market for
our products has been at best uncertain with many of our customers operating
under strict budgetary constraints. Our products aim to deliver both increased
levels of control and cost savings and continue to generate strong interest. The
division has increased its focus on its strategic products recruiting a senior
account manager dedicated to Integrity. We now have dedicated sales resource
behind both Integrity and Arc and have worked hard at improving the quality of
our sales pipe. We now have greater confidence in our conversion prospects.
Our development focus in the first half has been very much on delivering the new
version of our Arc product. This version has recently gone live at two tier 1
global banks and is now the leading enterprise solution in agent bank fee
management. In the first six months of the year we capitalised GBP186,000 (H1
'08 GBP316,000) of labour development costs, the bulk of which
being attributable to Arc. Development effort in the second half will now be
targeted at sales led enhancements to Integrity and Arc and sales support
activities.
We have continued to manage the division's cost base tightly with costs
down, after removing the impact of amortisation and capitalisation, GBP116,000
(13%) on H1 '08. The savings having been achieved through a reduction of two in
the average number of heads employed as we continue to narrow our focus.
Current Trading and Outlook
Market trends for our Consulting division in the near to mid term appear
encouraging with the financial crisis having postponed a number of client
initiatives which are now being resurrected. Another fall out from the
financial crisis has been the wave of increased regulation requiring clients to
make significant changes to their internal processes. This allied to the need
for our clients to be more efficient, we believe, is likely to see increased
demand for consulting services. Whilst visibility of future revenues in our
Consulting division is relatively short we are confident of our prospects in the
remainder of the year.
The second half of the year is very important for our Software business. Our two
strategic products Integrity and Arc are now ready for sale and are subject to
high levels of customer interest. Having taken the decision to invest in
additional sales resource in H1 we expect to close out a number of opportunities
in the year ahead. The quality and strength of our sales pipeline provides us
with confidence in the division's future.
ND Walder
Chief Executive
30 September 2009
Condensed Consolidated Statement of Comprehensive Income
for the six months to 30 June 2009
+---------------------------+-------+-------------+-------------+--------------+
| |Notes | Unaudited | Unaudited | Audited |
| | | Six months | Six months | Year |
| | | to | to | to |
| | | 30 June | 30 June | 31 December |
| | | 2009 | 2008 | 2008 |
+---------------------------+-------+-------------+-------------+--------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+-------+-------------+-------------+--------------+
| Revenue | | 4,497 | 4,548 | 9,030 |
+---------------------------+-------+-------------+-------------+--------------+
| Cost of sales | | (3,234) | (2,984) | (5,757) |
+---------------------------+-------+-------------+-------------+--------------+
| Gross profit | | 1,263 | 1,564 | 3,273 |
+---------------------------+-------+-------------+-------------+--------------+
| Operating expenses | | (1,690) | (1,582) | (3,333) |
+---------------------------+-------+-------------+-------------+--------------+
| (Loss) before | | (427) | (18) | (60) |
| interest and taxation | | | | |
+---------------------------+-------+-------------+-------------+--------------+
| Finance income | 4 | 13 | 50 | 99 |
+---------------------------+-------+-------------+-------------+--------------+
| Finance costs | | - | (3) | (2) |
+---------------------------+-------+-------------+-------------+--------------+
| Profit / (Loss) before | | (414) | 29 | 37 |
| taxation | | | | |
+---------------------------+-------+-------------+-------------+--------------+
| Taxation | | - | - | - |
+---------------------------+-------+-------------+-------------+--------------+
| Profit / (Loss) for the | | (414) | 29 | 37 |
| period attributed to | | | | |
| equity shareholders | | | | |
+---------------------------+-------+-------------+-------------+--------------+
| | | | | |
+---------------------------+-------+-------------+-------------+--------------+
| Other comprehensive | | - | - | - |
| income for the period | | | | |
+---------------------------+-------+-------------+-------------+--------------+
| Total comprehensive | | (414) | 29 | 37 |
| income for the period | | | | |
| attributable to equity | | | | |
| holders of the parent | | | | |
+---------------------------+-------+-------------+-------------+--------------+
| | | | | |
+---------------------------+-------+-------------+-------------+--------------+
| Basic and diluted | 5 | (0.2p) | 0.0p | 0.01p |
| profit/(loss) per share | | | | |
+---------------------------+-------+-------------+-------------+--------------+
Condensed Consolidated Statement of Financial Position
as at 30 June 2009
+--------------------------+--------+-------------+-------------+-------------+
| | Notes | Unaudited | Unaudited | Audited |
| | | 30 June | 30 June | 31 December |
| | | 2009 | 2008 | 2008 |
+--------------------------+--------+-------------+-------------+-------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+--------+-------------+-------------+-------------+
| Assets | | | | |
+--------------------------+--------+-------------+-------------+-------------+
| Non current assets | | | | |
+--------------------------+--------+-------------+-------------+-------------+
| Intangible assets | 6 | 996 | 924 | 974 |
+--------------------------+--------+-------------+-------------+-------------+
| Property, plant and | | 117 | 175 | 155 |
| equipment | | | | |
+--------------------------+--------+-------------+-------------+-------------+
| | | 1,113 | 1,099 | 1,129 |
+--------------------------+--------+-------------+-------------+-------------+
| Current assets | | | | |
+--------------------------+--------+-------------+-------------+-------------+
| Trade and other | 7 | 1,767 | 1,767 | 1,390 |
| receivables | | | | |
+--------------------------+--------+-------------+-------------+-------------+
| Cash and cash | | 1,994 | 2,308 | 2,781 |
| equivalents | | | | |
+--------------------------+--------+-------------+-------------+-------------+
| | | 3,761 | 4,075 | 4,171 |
+--------------------------+--------+-------------+-------------+-------------+
| Total assets | | 4,874 | 5,174 | 5,300 |
+--------------------------+--------+-------------+-------------+-------------+
| Liabilities | | | | |
+--------------------------+--------+-------------+-------------+-------------+
| Current liabilities | | | | |
+--------------------------+--------+-------------+-------------+-------------+
| Trade and other payables | 8 | (1,363) | (1,292) | (1,401) |
+--------------------------+--------+-------------+-------------+-------------+
| Non-current liabilities | | | | |
+--------------------------+--------+-------------+-------------+-------------+
| Deferred tax | | (2) | (2) | (2) |
+--------------------------+--------+-------------+-------------+-------------+
| Net assets | | 3,509 | 3,880 | 3,897 |
+--------------------------+--------+-------------+-------------+-------------+
| | | | | |
+--------------------------+--------+-------------+-------------+-------------+
| Equity | | | | |
+--------------------------+--------+-------------+-------------+-------------+
| Issued capital | | 2,714 | 2,714 | 2,714 |
+--------------------------+--------+-------------+-------------+-------------+
| Share premium | | 3,303 | 3,303 | 3,303 |
+--------------------------+--------+-------------+-------------+-------------+
| Shares to be issued | | 577 | 541 | 552 |
+--------------------------+--------+-------------+-------------+-------------+
| Other reserves* | | (308) | (308) | (308) |
+--------------------------+--------+-------------+-------------+-------------+
| Retained earnings | | (2,777) | (2,370) | (2,364) |
+--------------------------+--------+-------------+-------------+-------------+
| Total equity | | 3,509 | 3,880 | 3,897 |
+--------------------------+--------+-------------+-------------+-------------+
*Other reserves includes Warrant, Merger and Capital Reserves.
Condensed Consolidated Statement of Changes in Equity
for the six months to 30 June 2009
+----------------------+---------+---------+---------+----------+----------+---------+
| | Share | Share | Shares | Other | Retained | Total |
| | capital | Premium | to | reserves | earnings | |
| | | account | be | | | |
| | | | issued | | | |
+----------------------+---------+---------+---------+----------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------+---------+---------+---------+----------+----------+---------+
| 1 January 2008 | 2,714 | 3,303 | 529 | (308) | (2,400) | 3,838 |
+----------------------+---------+---------+---------+----------+----------+---------+
| EBT adjustment | | | | | 1 | 1 |
+----------------------+---------+---------+---------+----------+----------+---------+
| Options charge | | | 12 | | | 12 |
+----------------------+---------+---------+---------+----------+----------+---------+
| Profit for the year | | | | | 29 | 29 |
+----------------------+---------+---------+---------+----------+----------+---------+
| 30 June 2008 | 2,714 | 3,303 | 541 | (308) | (2,370) | 3,880 |
| (unaudited) | | | | | | |
+----------------------+---------+---------+---------+----------+----------+---------+
| EBT adjustment | | | | | (1) | (1) |
+----------------------+---------+---------+---------+----------+----------+---------+
| Options charge | | | 11 | | | 11 |
+----------------------+---------+---------+---------+----------+----------+---------+
| Profit for the | | | | | 7 | 7 |
| period | | | | | | |
+----------------------+---------+---------+---------+----------+----------+---------+
| At 31 December | 2,714 | 3,303 | 552 | (308) | (2,364) | 3,897 |
| 2008 (audited) | | | | | | |
+----------------------+---------+---------+---------+----------+----------+---------+
| Options charge | | | 25 | | | 25 |
+----------------------+---------+---------+---------+----------+----------+---------+
| Loss for the period | | | | | (414) | (414) |
+----------------------+---------+---------+---------+----------+----------+---------+
| 30 June 2009 | 2,714 | 3,303 | 577 | (308) | (2,777) | 3,509 |
| (unaudited) | | | | | | |
+----------------------+---------+---------+---------+----------+----------+---------+
Condensed Consolidated Cash Flow Statement
for the six months to 30 June 2009
+--------------------------------------+------------+------------+--------------+
| | Unaudited | Unaudited | Audited |
| | Six months | Six months | Year |
| | to | to | to |
| | 30 June | 30 June | 31 December |
| | 2009 | 2008 | 2008 |
+--------------------------------------+------------+------------+--------------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------------+------------+------------+--------------+
| Cash flows from operating activities | | | |
+--------------------------------------+------------+------------+--------------+
| Loss before interest & taxation | (427) | (18) | (60) |
+--------------------------------------+------------+------------+--------------+
| Adjustments for: | | | |
+--------------------------------------+------------+------------+--------------+
| Depreciation of property, plant and | 48 | 50 | 93 |
| equipment | | | |
+--------------------------------------+------------+------------+--------------+
| Amortisation of intangible assets | 166 | 37 | 169 |
+--------------------------------------+------------+------------+--------------+
| Share options expense | 25 | 12 | 23 |
+--------------------------------------+------------+------------+--------------+
| Cash consumed from operations | (188) | 81 | 225 |
| before changes in working capital | | | |
+--------------------------------------+------------+------------+--------------+
| Movement in trade and other | (376) | 364 | 741 |
| receivables | | | |
+--------------------------------------+------------+------------+--------------+
| Movement in trade and other payables | (39) | (554) | (445) |
+--------------------------------------+------------+------------+--------------+
| Cash consumed from operations | (603) | (109) | 521 |
+--------------------------------------+------------+------------+--------------+
| Income tax paid | | | |
+--------------------------------------+------------+------------+--------------+
| Interest paid | - | (3) | (3) |
+--------------------------------------+------------+------------+--------------+
| Net cash consumed from operating | (603) | (112) | 518 |
| activities | | | |
+--------------------------------------+------------+------------+--------------+
| Cash flows from investing activities | | | |
+--------------------------------------+------------+------------+--------------+
| Purchase of plant and equipment | (11) | (28) | (50) |
+--------------------------------------+------------+------------+--------------+
| Purchase of software | (1) | (33) | (17) |
+--------------------------------------+------------+------------+--------------+
| Interest received | 13 | 50 | 99 |
+--------------------------------------+------------+------------+--------------+
| Product development | (186) | (316) | (514) |
+--------------------------------------+------------+------------+--------------+
| Net cash used in investing | (185) | (327) | (482) |
| activities | | | |
+--------------------------------------+------------+------------+--------------+
| Cash flows from financing activities | | | |
+--------------------------------------+------------+------------+--------------+
| Repayment of loan | - | (19) | (20) |
+--------------------------------------+------------+------------+--------------+
| Net cash consumed in financing | - | (19) | (20) |
| activities | | | |
+--------------------------------------+------------+------------+--------------+
| Net (decrease)/increase in cash | (788) | (458) | 16 |
| and cash equivalents | | | |
+--------------------------------------+------------+------------+--------------+
| Cash and cash equivalents at 1 | 2,782 | 2,766 | 2,766 |
| January | | | |
+--------------------------------------+------------+------------+--------------+
| Cash and cash equivalents at end of | 1,994 | 2,308 | 2,782 |
| period | | | |
+--------------------------------------+------------+------------+--------------+
Notes to the consolidated financial statements
1. Basis of preparation
This announcement was approved by the Board on 30 September 2009. The financial
statements have been prepared in accordance with IFRS and IFRICS in issue that
have been endorsed by the EU and the Companies Act 2006 applicable to the period
ended 30 June 2009.
IAS 1 'Presentation of Financial Statements (revised 2007)' has been applied in
the preparation of these condensed Group financial statements. The revised
standard requires the presentation of a statement of changes in equity in the
primary statements with information previously disclosed in a Capital and
reserves note in the financial statements. In addition, the Group has elected to
present a separate statement of comprehensive income. The revised standard also
suggests certain changes in terminology which have been adopted in these
condensed Group financial statements. The balance sheet has been renamed
statement of financial position and the statement of recognised income and
expense has been renamed statement of comprehensive income.
The accounting policies applied are consistent with those set out in the
financial statements of the Group for the year ended 31 December 2008. The
financial information for the periods to 30 June 2009 and 30 June 2008 is
unaudited. The financial information for the year ended 31 December 2008 is
taken from the statutory accounts for that year, which have been delivered to
the Registrar of Companies. The auditors gave an unqualified opinion on those
2008 accounts.
Business Control Solutions Group plc through its subsidiaries provides
management consultancy services and operational control software to financial
institutions. The Company's registered number is 02089155.
2. Segmental reporting
The Group's operations are managed and monitored in two business segments:
Consultancy Services and Software Solutions. Certain support activities are
monitored centrally and have been allocated on an estimated usage basis to the
business segments to produce the result below.
The directors consider the Group to trade in one geographical segment, the UK.
+--------------------------------+-------------+-------------+-------------+
| For the six months to 30 June | Consultancy | Software | Total |
| 2009 | Services | Solutions | |
| Unaudited | | | |
+--------------------------------+-------------+-------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+-------------+-------------+-------------+
| Segment revenue | 3,952 | 545 | 4,497 |
+--------------------------------+-------------+-------------+-------------+
| Segment result | 161 | (575) | (414) |
+--------------------------------+-------------+-------------+-------------+
During the period there was no inter-segmental revenue (2008: GBPnil).
+--------------------------------+-------------+-------------+-------------+
| For the six months to 30 June | Consultancy | Software | Total |
| 2008 | Services | Solutions | |
| Unaudited | | | |
+--------------------------------+-------------+-------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+-------------+-------------+-------------+
| Segment revenue | 3,934 | 614 | 4,548 |
+--------------------------------+-------------+-------------+-------------+
| Segment result | 342 | (313) | 29 |
+--------------------------------+-------------+-------------+-------------+
+--------------------------------+-------------+-------------+-------------+
| For the year to 31 | Consultancy | Software | Total |
| December 2008 | Services | Solutions | |
| Audited | | | |
+--------------------------------+-------------+-------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+-------------+-------------+-------------+
| Segment revenue | 7,771 | 1,260 | 9,030 |
+--------------------------------+-------------+-------------+-------------+
| Segment result | 832 | (796) | 37 |
+--------------------------------+-------------+-------------+-------------+
3. Employee numbers
+------------------------------------+-------------+------------+--------------+
| | Six months | Six months | Year to |
| | to | to | 31 December |
| | 30 June | 30 June | 2008 |
| | 2009 | 2008 | |
+------------------------------------+-------------+------------+--------------+
| | No. | No. | No. |
+------------------------------------+-------------+------------+--------------+
| The average number of persons | | | |
| employed during the year was: | | | |
+------------------------------------+-------------+------------+--------------+
| Non-executive directors | 3 | 3 | 3 |
+------------------------------------+-------------+------------+--------------+
| Office and management | 13 | 12 | 12 |
+------------------------------------+-------------+------------+--------------+
| Sales and marketing | 2 | 3 | 2 |
+------------------------------------+-------------+------------+--------------+
| Programming and solution delivery | 24 | 26 | 26 |
| staff | | | |
+------------------------------------+-------------+------------+--------------+
| Consultants | 31 | 40 | 38 |
+------------------------------------+-------------+------------+--------------+
| | 73 | 84 | 81 |
+------------------------------------+-------------+------------+--------------+
4. Finance income
+-------------------------------------+------------+------------+---------------+
| | Unaudited | Unaudited | Audited |
| | Six months | Six months | Year |
| | to | to | to |
| | 30 June | 30 June | 31 December |
| | 2009 | 2008 | 2008 |
+-------------------------------------+------------+------------+---------------+
| | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------------+------------+------------+---------------+
| Bank interest receivable | 13 | 50 | 99 |
+-------------------------------------+------------+------------+---------------+
5. Profit / (Loss) per share
Basic profit/(loss) per share is calculated by dividing the Group's loss after
taxation of GBP414,000 (2008: profit of GBP29,000) by the weighted average
number of shares in issue less the weighted average number of shares held by the
EBTs during the year of 270,042,705 (2008: 269,657,772).
6. Intangible assets
Research expenditure is recognised as an expense as incurred. Costs incurred on
product development relating to the design, programming and testing of new or
enhanced products are capitalised as intangible assets after considering: the
probability that the development will provide economic benefits; its commercial
and technological feasibility; resource availability and whether costs can be
measured reliably. The expenditure capitalised is the direct employment costs
and is managed and controlled centrally. Other development costs are recognised
as an expense as incurred.
During the six months to 30 June 2009 GBP186,000 of development costs were
capitalised (2008: GBP316,000). During the six months to 30 June 2009 the
amortisation charge was GBP166,000 (2008: GBP24,000).
7. Trade and other receivables
+-------------------------------+-------------+-------------+-------------+
| | Unaudited | Unaudited | Audited |
| | 30 June | 30 June | 31 December |
| | 2009 | 2008 | 2008 |
+-------------------------------+-------------+-------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------+-------------+-------------+-------------+
| Trade receivables | 1,454 | 1,529 | 1,108 |
+-------------------------------+-------------+-------------+-------------+
| Other receivables | 313 | 238 | 282 |
+-------------------------------+-------------+-------------+-------------+
| | 1,767 | 1,767 | 1,390 |
+-------------------------------+-------------+-------------+-------------+
8. Trade and other payables
+-------------------------------+--------------+--------------+-------------+
| | Unaudited | Unaudited | Audited |
| | 30 June | 30 June | 31 December |
| | 2009 | 2008 | 2008 |
+-------------------------------+--------------+--------------+-------------+
| | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------+--------------+--------------+-------------+
| Trade payables | 344 | 292 | 176 |
+-------------------------------+--------------+--------------+-------------+
| Other payables | 1,019 | 1,000 | 1,225 |
+-------------------------------+--------------+--------------+-------------+
| | 1,363 | 1,292 | 1,401 |
+-------------------------------+--------------+--------------+-------------+
9. Circulation
Copies of this announcement will be available from the Company's registered
office: Ground Floor, Churchgate, New Road, Peterborough PE1 1TT and on the
Company's website www.bcsplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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