GLOUCESTERSHIRE, U.K., Sept. 13, 2004 (PRIMEZONE) -- VI Group plc ("VI" or "the Group"), one of the leading suppliers of CAD/CAM software to the mould and die sector, announces today its results for the six months to 30 June 2004.
Summary
-- Turnover growth of 16% to GBP5.1 million (2003: GBP4.4 million
reflecting both organic growth and increased turnover resulting
from an acquisition earlier this year.
-- Increased market share with sales performance again exceeding that
of VI's direct competitors.
-- The period saw the launch of a new range of advanced VISI five axis
solutions for the Computer Aided Manufacturing (CAM) market
-- Gross Margin increased to GBP4.5m (2003: GBP3.8m) and as a
percentage of turnover it rose to 90% (2003: 87%)
-- A GBP0.1m increase in earnings before interest, tax, depreciation
and amortisation (EBITDA) to GBP0.3 million (2003: GBP0.2 million).
-- Loss on ordinary activities after amortisation of goodwill and
taxation of GBP0.2 million (2003: loss of GBP0.3 million)
Commenting on the interim results, Don Babbs, Chief Executive of VI, said:
"We have again produced excellent sales growth through the first half of the year, despite the effect of the weaker dollar and Euro. VI has continued to build successfully on its investments in new sales channels and this, together with the release of exciting new products in the second half of the year means that we are well positioned to produce further growth."
Attached: Chairman's Statement
Unaudited consolidated profit & loss account
Unaudited consolidated balance sheet
Notes to the interim results
Chairman's Statement
I am pleased to announce VI Group's interim results for the six months to 30 June 2004 and to report on the progress of the Group to date.
We have continued to build successfully on our investments and acquisitions over the past two years. Despite difficult trading conditions in Europe our turnover growth has continually and consistently outstripped both sector and competitor levels.
We are broadening the product line while keeping costs under control through the measures announced earlier in the year to provide increasing margins and are continuing to invest in the necessary product development to achieve this.
Financial results
Group turnover for the six month period increased by 16% to GBP5.1 million (2003 GBP4.4 million). The growth in turnover is in excess of 18% measured in constant currency terms. Earnings before interest, tax, depreciation and amortisation (EBITDA) rose to GBP0.3m (2003: GBP0.2m). The loss on ordinary activities before taxation was GBP0.1 million (2003: loss of GBP0.2m) after a charge of GBP0.25m for amortisation of goodwill is taken into account (2003: GBP0.24m). The loss on ordinary activities after taxation was GBP0.2 million (2003: loss of GBP0.3 million). The resulting basic loss per share was 0.60 pence (2003: loss per share of 0.78 pence).
Cash balances were GBP0.9 million at 30 June 2004 (31 December 2003: GBP0.5m). Debtors fell by GBP1m to GBP5.2m (31st December 2003: GBP6.2m) and the underlying trade debtors also reduced.
Trading
We returned strong growth figures in all of the major industrial markets except the UK where the outlook among manufacturers remains uncertain. The principal European markets of Italy, Germany and France all produced growth despite difficult economic conditions in each country and collectively increased revenues by 18%. Japan and North America were the fastest growing sales areas with growth in constant currency terms in excess of 30% as a result of expanded sales channels and greater confidence within the manufacturing sector.
Other Business Developments
The savings from the decision to delist from AMEX coupled with cost reductions in France and the administrative savings at Group level only marginally influenced the first half result but will have a greater effect during the coming months and in particular next year.
The acquisition of our Northern Italian partners in Brescia at the end of December contributed to the growth of the Italian business in the first half and has significantly grown the VI business in this important area.
The success of our North American and Japanese offices has led us to expand their operations as we allocate our resources more towards the world's largest economies and their mould and die markets. The Tokyo office has been particularly successful in attracting new resellers for VI products at a time when smaller Japanese manufacturers and exporters are regaining confidence. Sales to larger companies have again increased and contracts with Kawasaki Heavy Industries and Brother Industries in Japan and Rolls Royce Aero Engines in the UK have all contributed to revenues.
VI's much publicised assistance with the shape design and stonework manufacture of the Princess Diana Memorial Fountain provided some interesting application news during the period and was a particularly successful aspect of the project.
Product development
VI announced a new range of five axis CAM products during the first half of the year and will be shortly introducing Release 12 of the VISI-Series line and Release 6.1 of the Machining Strategist product.
The five axis range of CAM products provides one of the few methods of driving the latest generation of computer numerically controlled machine tools that are growing in popularity and extending their application. The package is designed to satisfy the specific needs of the aerospace and automotive sectors as well as mould and die applications. The Machining Strategist product acquired in 2002 from NCG has now been further enhanced and tailored for its target market whilst also being integrated within the VISI-Series product.
Outlook
The release of new technologically advanced products such as the VISI-Series Release 12 enhancements and additions in the second half of the year will provide increased opportunities for sales to both new and existing customers.
Our installed user base is now four times its size before VI's flotation in 1998. The increasing number of regular end user customers and our global presence provide further opportunities for recurring revenues from services and the enlarged product base.
Our objective is to build further on the investments in new products and distribution networks made to date whilst maintaining the cost base at a level that enables growth in margins ahead of revenues to produce a sustainable bottom line profit.
Confidence in the global economy will be an important factor in the second half of the year with our markets influenced by the uncertainties arising from the continuing situation in the Middle East and the high level of world oil prices but also by the increasing need to reduce design and manufacturing costs and lead times, a requirement comprehensively addressed by our products.
Stephen Palframan
Chairman
13 September 2004
Unaudited Consolidated Profit and Loss Account
Six months to Six months to Year ended
30 June 2004 30 June 2003 31 Dec 2003
Unaudited Unaudited Audited
GBP'000 GBP'000
Turnover 5,053 4,365 8,823
Cost of sales (516) (556) (1,145)
--------- --------- ---------
Gross profit 4,537 3,809 7,678
Selling expenses (2,451) (2,011) (4,296)
Administrative
expenses (1,146) (941) (1,970)
Product development (675) (722) (1,450)
Net other operating
income 39 62 282
--------- --------- ---------
Earnings before
interest, tax,
depreciation and
amortisation
('EBITDA') 304 197 244
Depreciation (102) (120) (233)
Amortisation of
goodwill and other
intangible assets (256) (244) (500)
--------- --------- ---------
Operating (Loss)
profit (54) (167) (489)
Net interest and
similar charges (45) (60) (761)
--------- --------- ---------
(Loss) profit on
ordinary activities
before taxation (99) (227) (1,250)
Taxation on profit
on ordinary
activities (125) (65) (210)
--------- --------- ---------
(Loss) Profit on
ordinary activities
after taxation (224) (292) (1,460)
========= ========= =========
(Loss) earnings per
share
-- basic (pence) (0.60)p (0.78)p (3.92)p
-- diluted (pence) (0.60)p (0.78)p (3.92)p
Shares used in
computing earnings
per share (thousands)
-- basic 37,261 37,261 37,261
-- diluted 37,261 37,261 37,261
Unaudited Consolidated Statement of Total Recognised Gains and Losses
Six months to Six months to Year ended
30 June 2004 30 June 2003 31 Dec 2003
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
(Loss) profit for
the period (224) (292) (1,460)
Exchange movements (45) 10 (4)
--------- --------- ---------
Total recognised
(losses) gains (269) (282) (1,464)
========= ========= ========
Unaudited Consolidated Balance Sheet
As at 30 June As at 30 June As at 31 Dec
2004 2003 2003
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Fixed assets:
Intangible
fixed assets 1,530 1,724 1,781
Tangible fixed assets 475 557 564
--------- --------- ---------
2,005 2,281 2,345
--------- --------- ---------
Current assets:
Stock 34 22 63
Debtors 5,198 5,495 6,150
Cash at bank and in hand 924 1,514 501
--------- --------- ---------
6,156 7,031 6,714
Creditors: amounts
falling due
within one year (3,151) (3,040) (3,910)
--------- --------- ---------
Net current assets 3,005 3,991 2,804
--------- --------- ---------
Total assets less
current liabilities 5,010 6,272 5,149
Creditors: amounts
falling due after more
than one year (267) (124) (127)
Provisions for
liabilities and charges (309) (263) (319)
--------- --------- ---------
Net Assets 4,434 5,885 4,703
========= ========= =========
Capital and reserves:
Share capital and
share premium 6,046 6,046 6,046
Other reserves 10 10 10
Profit and loss account (1,622) (171) (1,353)
--------- --------- ---------
Equity shareholders'
funds 4,434 5,885 4,703
========= ========= =========
Notes to the interim results
1. The unaudited results for the six months to 30 June 2004 have been prepared on the basis of accounting policies consistent with those adopted for the year ended 31 December 2003, as stated in the report and accounts for the Group, and are presented to United Kingdom generally accepted accounting principles. The financial information does not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 December 2003, incorporating an unqualified audit report, have been filed with the Registrar of Companies.
2. The Directors do not propose any payment of a dividend.
3. Earnings per share figures have been calculated on the profit for the period divided by the weighted average number of shares.
4. The litigation with NC Graphics (Cambridge) Limited, referred to in the 2003 Annual Report, is ongoing.
5. Copies of the interim report will be posted to shareholders and made available to the public at the Company's registered office: VI Group plc, The Mill, Brimscombe Port, Stroud, Gloucestershire GL5 2QG, or by accessing the Company's website (www.vero-software.com).
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