14/12/2009
GB0009606764
ANS GROUP PLC
("ANS Group" or the "Company")
Interim Results for the period ended 30 September 2009
HIGHLIGHTS
Turnover increased by 7% from £5,142,064 to £5,499,224
Operating Profit £378,533 (£379,912 2008)
Cash Reserves up from £1.5m to £1.6m after £243,000 of share buybacks
EPS 3.2p (3.5p 2008)
Dividend maintained at 1.25p per share
Annual Recurring Revenues increased by 17.6% from £3.4m to £4.0m
Total investment during the period in recruitment, infrastructure and marketing was £138,000
excluding additional salaries.
Increased head count of over 20%
CHAIRMANS STATEMENT
It gives me great pleasure to announce the half year results to 30 September 2009. Your company
has shown tremendous resilience during the difficult and ongoing downturn. These positive results,
delivering turnover growth of 7% to £5.5m with operating profit remaining at the same level as the
first six months to September 2008, come following significant investments in the business. The
results of these investments are already beginning to show through and our order intake for the
period is slightly ahead of the same period last year. We have also seen excellent growth in our
recurring revenues which demonstrates our success in developing our managed services offering.
During this period, when the downward pressure on margins has been significant, your board has
continued to focus on the delivery of key solutions to our customers around business efficiency
and 'Spend to Save'. Your board made a decision to manage the overheads tightly as is prudent
however we also planned to sacrifice some short-term profitability to enable us to continue
investing in the business for the future. We believe that it is important to ensure that we employ
the highest skilled personnel in the industry and, given the general economic outlook, we have
been able to attract talent in abundance that would not have been possible in a different economic
climate.
In January this year two new executive directors joined the company and by the end of this period
we had recruited a further 10 members of staff in sales and technical roles. We are convinced that
despite our increased costs we have a team that can move the business forward at pace now that the
worse of the economic downturn appears to be over.
We have made significant investments in our internal infrastructure with High Definition Video
Conferencing now used to reduce travel costs and increase the efficiency of our executives. We
have also invested in upgrading our demonstration suites as well as increasing our marketing spend
to ensure that our world class business solutions and successful implementations are publicised
and recognised in our marketplace. This infrastructure investment has increased the cost base by
over £100,000 during the period and we believe that this was a necessary step change in cost in
order to facilitate the next phase in our growth strategy.
I am confident that our credentials as a leading innovative systems integrator and managed
services provider, and our highly respected accreditations with our strategic vendors, give the
business a solid platform for future growth.
Paul Sweeney, your Managing Director, has assembled a formidable Sales, Technical and Operations
team.
David Hutton, the Sales Director, has been able to recruit a number of mature and highly
experienced sales professionals who have already shown their abilities in selling business
efficiency solutions.
Andy Barrow heads up a highly talented and well-balanced Technical and Pre-sales consultancy team
and we are confident that the recent investments and additions to this team will serve us well in
the coming 12 months.
Richard Gascoigne has brought both organisational skills and new discipline to the Operations
function. The significant investment of both time and resources brought about a successful ISO9001
quality accreditation following our Cisco Gold Partner Accreditation. These two accolades are
already bringing major benefits to your business and further strengthen our managed services
portfolio.
Finally, our Finance team, led by Chris Malthouse, has been re-shaped and whilst cost controls
have been implemented through excellent housekeeping, they have still managed to allow the board
the freedom to invest for the future.
I am grateful to the Senior Management team and their staff for the hard work, dedication and
professionalism they have displayed in driving the business forward even during the difficult
times we have experienced this last year.
PARTNER ACCREDITATIONS AND AWARDS
The major achievement this year was being invited onto the Cisco UCS (Unified Computing System)
Advanced Technology Program. This provides us with a significant competitive advantage within our
key focus area - the 'next generation data centre'. To be listed alongside Dimension Data,
Computacentre, Logicalis and BT as one of only five partners in the UK to attain the specialised
accreditation is a major achievement in itself. It proves that technical excellence and quality
delivery are imperative if we are to compete at the highest level. To further enhance our product
offering, we have recently signed up with two new partners, RSA and Datacore.
We have continued to invest valuable time with our vendors in order to strengthen our position and
ensure that we continue to adopt the 'best of breed solutions'. In April, we officially became a
NetApp Gold partner and are now well on course to become a NetApp Platinum partner. This would
mean ANS Group would be the first partner to go from Gold to Platinum partner within a calendar
year.
ANS Group was named as the 'Manchester Evening News Business of the Year.' This is a tremendous
achievement for the Company and the staff, and through the regional PR surrounding the event, this
has further raised the Company's profile in the North West Region. We believe this recognition
will help us on our way to becoming the Leading IT Solution Provider in the North West. Your
Chairman, Scott Fletcher, also walked away with another award, this time from EN Magazine, who
named him Technology Entrepreneur of the Year.
FINANCIALS
The increase in turnover of 7% to £5.5m shows the determination to grow the business in difficult
times whilst still focussing on profitability. This growth has been partially offset by a
reduction of about 1.5% to 31.9% in gross margin. This has been mainly due to the hardware product
margins being placed under severe competitive pressure whilst service margins have held up well.
Overall, I am pleased that we have still managed to grow our Gross Profit by 2% in absolute terms.
Recurring revenues have continued to grow and now represent about 50% of the gross margin. In
addition to this, the average length of contracts also continues to increase with virtually all
contracts running for a minimum of 12 months and extending up to three years.
Despite the sizeable investment of £138,000 during the period in people, infrastructure and
marketing, the overhead increase has been limited to 3% with a number of efficiency savings
reducing the net effect of the sizeable investments. Some of this investment is likely to continue
and we are already seeing immediate and positive returns through increased sales activity and an
increased order pipeline.
Operating profit has remained steady at £379,000 which, given the investments made and the
economic environment, is an excellent result.
Profit before tax has fallen £43,000, due mainly to lower interest receivable. Interest rates are
likely to remain low in the short term; hence we will continue to seek alternative higher yielding
investments. The £91,000 profit on disposal results from the Company's investment in Viapost,
which it acquired and disposed of during the period.
I am pleased to report that, despite the continuing recession, the business has grown its cash
reserves from £1.5m to £1.6m during the period after spending £243,000 as part of the Company's
ongoing policy of buying back its own shares.
DIVIDEND
The Board is pleased to announce that the interim dividend will be maintained at 1.25p (2008
1.25p). The dividend will be paid by 31 January 2010 to those members on the register as at 18
December 2009.
The Board continues to monitor the level of cash required for operations and to fund strategic
acquisitions and the future dividend policy will be kept under review in the light of forecast
cash requirements.
ANS GROUP OUTLOOK
Although these tough trading conditions continue to challenge us, we believe that the worst is now
behind us and I have the confidence that we can continue to buck the trend through to the end of
the financial year. I can promise that from the Board down, every member of the ANS workforce will
give their total commitment to get through this downturn with the best possible results being
achieved. Through the high levels of investment in talent, infrastructure being upgraded
constantly to provide a platform to deliver our growth alongside our £1.6m of cash reserves, I
have the confidence that the business is in the right shape to succeed. We are seeing positive
returns from the recent investments, and the continued focus on growing our recurring revenues
through our fast developing managed services. We believe that we are nearing the end of one of the
longest downturns in history, and the Company is extremely well placed to take advantage of the
upturn when it comes.
UNAUDITED PROFIT & LOSS 6 MONTHS TO *6 MONTHS
30/9/09 TO 30/9/08
GBP GBP
TURNOVER 5,499,224 5,142,064
Cost of Sales 3,744,620 3,422,522
Gross Profit 1,754,604 1,719,542
Administrative Expenses 1,376,070 1,339,630
OPERATING PROFIT 378,534 379,912
Profit On Disposal of Investments 91,177 104,000
Interest Receivable 26,030 54,573
Interest Payable 0 0
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 495,741 538,485
Taxation -108,662 -123,852
PROFIT ON ORDINARY ACTIVITIES AFTER
TAXATION 387,079 414,633
Earnings per ordinary share 3.2 3.5
Diluted earnings per ordinary share 2.9 3.1
UNAUDITED BALANCE SHEET
AS AT AS AT
30/9/09 30/9/08
GBP GBP
Fixed Assets Including Goodwill 1,165,016 1,139,860
Current Assets 5,030,875 4,016,860
Current Liabilities -3,743,408 -2,887,875
2,452,483 2,268,845
Share Capital 119,608 126,363
Reserves 2,332,875 2,142,482
Shareholders Funds 2,452,483 2,268,845
The Directors of ANS Group Plc are responsible for the contents of this announcement.
ENQUIRIES
ANS Group Plc Tel: 0161 227 1000
Scott Fletcher, Chairman
enquiries@ansgroup.co.uk
St Helens Capital Partners LLP Tel: 020 7368 6959
Duncan Vasey or Mark Anwyl
MC2 Tel: 0161 236 1352
Claire Tennant
clairet@mcmc.co.uk
*The figures for the six months 30 September 2008 represent the consolidated results of ANS Group.
The company is not required to consolidate its results for the six month period to 30 September
2009.
ANS Group Plc