FINAL RESULTS
FOR THE YEAR ENDED
31 MARCH 2010
Chairman's Statement
In my statement at the half year I referred to the need to respond to the
challenges of trading during recessionary times. I am pleased to report
continued sales growth for the fifth successive year and a strong second half
for the year. This trend is based on sound and proven policies of responding to
our customers' demands where the Netalogue brand remains strong, building on
high standards of quality, delivery and customer service. The results have,
however, been impacted by a bad debt charge of £36,000 in respect of one of our
customers who has recently gone into liquidation.
Against this background the results for 2009-10 are as follows compared with
last year:
* Sales of £751,000 compared with £706,000
* Profit at EBITDA level of £62,000 compared with £85,000
* Profit at EBITDA level (before exceptional bad debt charge) of £97,000
compared with £85,000
* Operating profit of £49,000 compared with £39,000
* Net profit of £16,000 compared with £39,000
* Strong cash and net asset position
* No borrowings, overdrafts or grants were invoked during the year.
Management approach
Sales are up by 6.5% for the year and by 35% for the second half in comparison
with the same period last year. Margins were maintained to achieve higher
underlying profits (before exceptional bad debt charge) at all levels and the
Directors have taken a diligent approach to ensure no additional borrowings
were sought at any time. Management of cash flow has been positive at all times
with net assets of £392,000, ensuring a sound financial position to take the
company into another year of projected growth. Costs have been tightly
controlled.
Sales continue to be targeted towards larger companies who are themselves
seeking solutions of sustainable quality, coupled with high levels of support.
Netalogue's proven policy of adapting its intellectual property to offer
flexible, tailor-made solutions with value for money distinguishes it from its
competition, and results in higher levels of customer satisfaction.
During the year the company has responded to sector demands which now include
sport and entertainment, adapting its proven intellectual property for new
solutions. Additional employees have been engaged to meet this growth.
The market place
In the coming months Netalogue will remain alert to new opportunities with a
low risk approach, and will continue to build partnerships over longer
contractual periods. The company values its relationships with its customers,
who are in turn able to measure tangible benefits from their solutions.
Netalogue remains committed to longer term developments and particularly the
planned development of achieving energy efficiencies and reductions in CO2.
This was announced last summer on PLUS Market and its timetable has rightly
been managed to ensure the timing is linked to the availability of finance for
the project, market demand and economic confidence in both the private and
public sectors.
The outlook
The management approach outlined above has shown Netalogue to have a resilient
approach in difficult trading times, which we believe will continue in many
sectors. The market place will also remain highly competitive and the company
is confident that its formula will deliver another year of growth.
I wish to express my thanks to my fellow Directors and to all the team for
their hard work throughout the year and maintaining a trend of growth and
development.
I look forward to updating you on continued progress throughout the year.
Gareth J. Williams
Chairman
Consolidated profit and loss account
for the year ended 31 March 2010
2010 2009
£ £
Turnover 751,480 706,092
Cost of sales (99,628) (100,198)
Gross profit 651,852 605,894
Net operating expenses (638,635) (566,579)
Operating profit before depreciation and 61,662 85,099
amortisation
Depreciation (23,195) (20,534)
Amortisation of intangible assets (25,250) (25,250)
Operating profit 13,217 39,315
Interest receivable and similar income 2,913 1,967
Interest payable and similar charges (465) (1,789)
Profit on ordinary activities before 15,665 39,493
taxation
Tax on profit on ordinary activities (5,500) (13,850)
Profit for the year 10,165 25,643
Profit per ordinary share expressed in 0.031 0.053
pence per share - basic
Profit per ordinary share expressed in 0.031 0.050
pence per share - diluted
There were no recognised gains or losses in the financial year other than those
disclosed above.
There are no material differences between the profit on ordinary activities
before taxation and the profit for the year stated above and their historical
cost equivalents.
The turnover and profit for the financial year have been derived from the
continuing activities of the group.
Consolidated balance sheet
at 31 March 2010
2010 2009
£ £
Fixed assets
Intangible 25,126 50,376
Tangible 83,921 78,438
109,047 128,814
Current assets
Stocks 3,343 3,343
Debtors 290,267 235,266
Cash at bank and in hand 183,915 197,175
477,525 435,784
Creditors: amounts falling due within one (179,318) (169,509)
year
Net current assets 298,207 266,275
Total assets less current liabilities 407,254 395,089
Provisions for liabilities and charges (15,000) (13,000)
Net assets 392,254 382,089
Capital and reserves
Share capital 487,464 487,464
Share premium account 209,857 209,857
Profit and loss account (305,067) (315,232)
Equity shareholders' funds 392,254 382,089
Consolidated cash flow statement
for the year ended 31 March 2010
2010 2009
£ £
Net cash inflow from operating activities 26,861 117,412
Returns on investments and servicing of
finance
Interest received 2,913 1,967
Interest paid (465) (1,789)
Net cash inflow from returns on investments 2,448 178
and servicing of finance
Taxation
UK corporation tax paid (6,388) -
Capital expenditure and financial investment
Purchase of tangible fixed assets (28,678) (33,672)
Net cash outflow from capital expenditure and (28,678) (33,672)
financial investment
Cash (outflow)/inflow before financing (5,757) 83,918
Financing
Settlement of borrowings (7,503) (13,752)
Net cash (outflow) from financing (7,503) (13,752)
(Decrease)/increase in cash in the year (13,260) 70,166
Notes to the financial statements
for the year ended 31 March 2010
* Accounting policies
Basis of preparation
The financial statements have been prepared under the historical cost
convention and in accordance with applicable Accounting Standards in the United
Kingdom. A summary of the accounting policies, which have been consistently
applied, are set out below.
Basis of consolidation
The consolidated financial statements include the company and its subsidiary
companies. Inter-company sales and profits are eliminated on consolidation. The
financial statements of the subsidiary companies are made up to 31 March 2010.
Consistent accounting policies are used by all companies in the group.
Turnover
Turnover, which excludes value added tax, represents the invoiced value of
goods and services supplied. Turnover on sales of software products is
recognised on the delivery and acceptance of the systems. Turnover on software
support is recognised over the period in which the support is available to the
customer.
Equipment leased to customers
Equipment leased to customers under finance leases is deemed to be sold at
normal selling value which is taken to turnover at the inception of the lease.
Debtors under finance leases represent outstanding amounts due under these
agreements less finance charges allocated to future periods. Finance lease
interest is recognised over the primary period of the lease so as to produce a
constant rate of return on the net cash investments.
Investments
The investment in the subsidiary company which includes the investment in the
subsidiary's share capital and loans to the subsidiary is stated at cost less
provisions for any losses incurred by the subsidiary company in the period
since its incorporation.
Tangible fixed assets
Tangible fixed assets are included at their purchase cost, together with any
incidental expenses of acquisition.
Depreciation
Depreciation is calculated to write off the cost of tangible fixed assets on a
reducing balance basis over the expected useful economic lives of the assets
concerned. Plant and machinery and computer software is depreciated at the rate
of 25% per annum.
Goodwill and amortisation
Purchased goodwill (representing the excess of the fair value of the
consideration given over the fair value of the separable net assets acquired)
arising on consolidation in respect of acquisitions is capitalised. Goodwill is
amortised on a straight line basis over its estimated useful economic life. The
estimated useful economic life is calculated having regard to the period over
which the Group expects to derive economic benefits from the assets. The
directors consider the estimated useful economic life of the purchased goodwill
to be 10 years.
Licences and trademarks
Licences and trademarks are capitalised at their purchased cost, together with
any incidental costs of acquisition. They are amortised on a straight line
basis over their estimated useful economic life. The directors consider the
estimated useful life of the licences and trademarks to be 3 years.
Stocks
Stocks and work in progress are valued at the lower of cost and net realisable
value.
Research and development
Costs relating to research and development are charged to the profit and loss
account as incurred.
Deferred taxation
Provision for deferred taxation is made in respect of all material timing
differences that have originated but not reversed by the balance sheet date.
Timing differences represent differences between gains and losses recognised
for tax purposes in periods different from those in which they are recognised
in the financial statements. No deferred tax is recognised on permanent
differences between the company's taxable gains and losses and its results as
stated in the financial statements. Deferred tax assets and liabilities are
included without discounting. No deferred tax assets are recognised at the end
of the financial year since their recoverability is uncertain.
Operating leases
Costs in respect of operating leases are charged to the profit and loss account
as incurred.
Share-based incentives
In accordance with FRS20, the fair value of equity-settled share-based payments
to employees is determined at the date of grant and is expensed on a
straight-line basis over the vesting period, based on the group's estimate of
shares or options that will eventually vest. In the case of options granted,
fair value is measured by a Black-Scholes pricing model. Further details are
set out in note 7.
Dividends
The directors do not recommend the payment of a dividend in respect of the year
ended 31 March 2010 (2009 : £Nil).
Status of Financial Information
The financial information has been extracted from the audited accounts for the
year ended 31 March 2010, which will be posted to shareholders shortly, and are
available for inspection for one month, free of charge, at the registered
office of the company at Russell House, Russell Street,Swansea,SA1 4HR.
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 March 2010 will be delivered to the Registrar of Companies in due
course. The company's auditors have reported on the statutory accounts under
section 235 of the Companies Act 1985. The report was unqualified.
4 Approval
This announcement was approved by the board on 30 June 2010.
ENDS
Enquiries
NETALOGUE TECHNOLOGIES PLC TEL 0845 222 0350
Andrew Robathan
1
END
NETALOGUE TECHNOLOGIES PLC
