Released: 30/12/2005
RNS Number:2985W
Spiritel PLC
30 December 2005
For immediate release 30 December 2005
SPIRITEL PLC
("Spiritel" or "the Company")
Interim results for the six months ended 31 October 2005
Spiritel plc (AIM: STP), the telecommunications services business, is pleased to
announce its interim results for the six months ended 31 October 2005.
This is the first time that the Company, which joined AIM following a reverse
takeover in July 2004, has issued interim results for a six month period ending
31 October. The interim results to 31 October 2004 comprised an eight month
period. The results originally published for the period ended 31 October 2004
have been restated using the principles of reverse acquisition accounting
adopted and explained in the Company's financial statements for the year ended
30 April 2005.
Highlights
- Trading at Spiritel has proceeded in line with Directors' expectations.
Cash flow from operating activities was positive in the period at £278,000
compared with a cash outflow of £250,000 in the eight months to 31 October
2004 restated. The pre-tax loss was £0.209 million (2004 restated: loss of
£2.47 million) reflecting planned investment in establishing the Company's
VoIP (voice over internet protocol) telephony product suite and network of
reseller partners.
- Significant progress in delivering the Company's strategy of becoming a
leading player in VoIP telephony, which is widely expected to replace
traditional fixed line telephony in coming years.
- Expo Communications, Spiritel's core call termination division, traded
profitably during the period and delivered the majority of the Company's
sales.
- Spiritel Technologies, the Spiritel division that focusses on VoIP
products and services, has developed rapidly during the period under review
having signed a series of reseller agreements and extended its product range
to include broadband telephony services for the residential market and IP
trunking solutions for corporates.
- Since the period end Spiritel Technologies has signed agreements with PNC
Telecom Services Ltd and Swift Internet and also signed a landmark agreement
with Entacall Telecommunications, under which Entacall will deliver 10,000
residential VoIP customers within 12 months.
- In July 2005, Alastair Mills was appointed Chief Executive and Mark
Willard, the Company's founder and former Chief Executive, became President.
Commenting on the results, Lord St John of Bletso, Spiritel's Chairman, said: "
The period under review has been one of substantial progress for the Company. It
was a period of diversification during which the foundations were laid for the
significant growth of Spiritel Technologies' VoIP products and services. The
pace of Spiritel Technologies' development is a reflection of the strength of
Expo Communications, our core call termination division, which trades profitably
and allows us to bundle termination services with a range of VoIP products."
For further information:
Spiritel plc 020 7160 0100
Alastair Mills, Chief Executive
John Vergopoulos, Deputy Chairman
Teather & Greenwood 020 7426 9000
Jeff Keating
Buchanan Communications 020 7466 5000
Mark Court/Mary-Jane Johnson
Notes for Editors:
About Spiritel plc
Spiritel (AIM: STP) is the holding company for a growing group of companies
whose focus is telecommunications services and products. Spiritel, through its
Spiritel Technologies division, has developed a suite of leading-edge VoIP
products, positioning the Company to benefit from the migration from traditional
telephony to VoIP services. Spiritel Technologies' route to market is via
reseller partners. Spiritel's initial trading division, Expo Communications, was
founded in 2000 and is one of Europe's leading call termination businesses
focussing on calls from fixed lines to mobiles. Expo's client base includes
Telewest, Level (3), Colt, One.Tel and Your Communications among others.
Spiritel Technologies' VoIP products are highly complementary to Expo's
termination services as most phone calls made via VoIP require termination in
the same way as calls from traditional fixed line phones.
Spiritel joined the AIM market of the London Stock Exchange in July 2004.
For further information please visit www.spiritelplc.com
CHAIRMAN'S AND CHIEF EXECUTIVE'S REVIEW
The half year to 31 October 2005 has seen strong progress across our business.
An investment phase during the half year has resulted in a platform for the
continued growth of the business during the current half of the financial year
and beyond. The success of our Spiritel Technologies division in launching VoIP
products and forming trading agreements endorses both our business model and our
diversification strategy. Our business model exploits the cash flow from our
core call termination business to help fund investment in VoIP products and our
strategy is to sell bundled services to end users via resellers.
Expo Communications
Expo Communications has performed in line with Directors' expectations during
the period. It has traded profitably and delivered the majority of the Company's
sales. The run-rate sales figure is lower than at the same time last year
reflecting the continued impact of the OFCOM price control determination in the
autumn of 2004. However the gross margin has improved to 13.6 per cent (2004
restated: 11.6 per cent), underlining the solid performance by Expo
Communications in a competitive marketplace.
Spiritel Technologies
We have been delighted by the progress at Spiritel Technologies in the period in
terms of product development and execution of the channel strategy with reseller
partners. As a result, we are benefiting from both the speed to market of our
VoIP products and also from reach in that our resellers have access to customer
bases ranging from residential customers through SMEs to corporates. We continue
to expect a significant contribution from Spiritel Technologies as the migration
from traditional telephony to VoIP accelerates. We are also continuing to pursue
opportunities with further strategic partners within the UK, in mainland Europe
and in Asia.
Board changes
In July 2005, Alastair Mills was appointed Chief Executive and Mark Willard, the
Company's founder and former Chief Executive, became President. It is announced
today that John Vergopoulos, the Company's Executive Deputy Chairman, will
become Non-Executive Deputy Chairman.
Financials
The overall gross margin for the six months ended 31 October 2005 improved to 15
per cent (2004 restated: 12 per cent) even though turnover fell to £8.12 million
(2004 restated: £15.87 million) resulting from last year's OFCOM price control
determination. The operating loss for the period was £0.15 million compared with
a loss of £2.44 million in 2004. The 2004 figure includes an exceptional cost of
£2.56 million in relation to amortisation of goodwill on the reverse
acquisition. Net cash inflow from operating activities in the period was £0.28
million compared with a net cash outflow figure of £0.25 million in 2004. The
loss per share in the period was 0.16p (2004 restated: loss of 1.94p).
Outlook
The first half of the year has been one of investment in Spiritel Technologies
and we look forward to reaching profitability during the second half of the
current financial year. Through this investment we have developed a VoIP
platform, complemented by call termination, and we have also established, and
continue to establish strategic routes to market. We anticipate significant
revenues from our VoIP products in the year to 31 April 2007. In the past few
weeks, we have been encouraged by the appetite among resellers for selling VoIP
products and by our pipeline of further potential strategic partners, giving us
confidence in our future prospects. Our growth strategy will remain focussed on
organic and acquisitive growth and we continue to evaluate potential
acquisitions to leverage the Company's product and skill sets and to further
extend routes to market.
Lord St John of Bletso Alastair Mills
Chairman Chief Executive
SPIRITEL PLC
CONSOLIDATED SUMMARISED PROFIT AND LOSS ACCOUNT
For the six months ended 31 October 2005
Six months Eight months
ended 31 October ended 31 October
2005 2004
Unaudited Unaudited
Note £'000 £'000
Turnover - continuing operations 8,117 15,874
Cost of sales - continuing operations (6,885) (14,031)
Gross profit - continuing operations 1,232 1,843
Other administrative expenses (1,378) (1,726)
Exceptional items - (2,557)
Administrative expenses (1,378) (4,283)
Operating (loss) / profit 3
Continuing operations 140 426
Acquisitions (286) (2,866)
(146) (2,440)
Net interest payable (63) (29)
Loss on ordinary activities before taxation (209) (2,469)
Tax on loss on ordinary activities (11) -
Loss transferred from reserves (220) (2,469)
(Loss) per share in pence 5 (0.16) (1.94)
There were no recognised gains or losses other than the loss for the financial
period.
SPIRITEL PLC
CONSOLIDATED SUMMARISED BALANCE SHEET AT 31 OCTOBER 2005
31 October 2005 31 October 2004
Unaudited Unaudited
£'000 £'000
Fixed assets 944 412
Current assets
Debtors 954 621
Cash at bank and in hand 92 225
1,046 846
Creditors: amounts falling due within one year 1,359 1,056
Net current liabilities (313) (210)
Total assets less current liabilities 631 202
Creditors: amounts falling due after more than one year (Note 6) 6,757 6,633
Provision for liabilities and charges 84 126
6,841 6,759
Capital and reserves
Called up share capital 1,378 1,327
Share premium account 1,128 302
Reverse acquisition reserve (5,763) (5,763)
Profit and loss account (2,953) (2,423)
Shareholders' deficit (6,210) (6,557)
631 202
SPIRITEL PLC
CONSOLIDATED SUMMARISED CASHFLOW STATEMENT
For the six months ended 31 October 2005
Six months Eight months
ended 31 October ended 31 October
2005 2004
Unaudited Unaudited
£'000 £'000
Net cash inflow / (outflow) from operating activities (Note 7) 278 (250)
Returns on investments and servicing of finance - 4
Taxation (120) (18)
Capital expenditure (496) (122)
Acquisitions and disposals - (237)
Financing - 146
(Decrease) in cash (Note 8) (338) (477)
NOTES TO THE INTERIM RESULTS
For the six months ended 31 October 2005
1). INTERIM FINANCIAL INFORMATION
The interim financial information covers the six months ended 31 October 2005,
is unaudited and does not constitute statutory financial statements.
Spiritel joined the Alternative Investment Market (AIM) on 28 July 2004 via the
reverse takeover by Expo Communications Limited of Roshni Investments plc, an
acquisition vehicle that joined AIM in March 2004. The comparative figures in
these statements cover the eight month period ended on 31 October 2004. The
results originally published for the period ended 31 October 2004 have been
restated using the principles of reverse acquisition accounting adopted and
explained in the Company's financial statements for the period ended 30 April
2005.
2). PRINCIPAL ACCOUNTING POLICIES
The interim financial information has been prepared using the same accounting
policies as set out in the Annual Report and Accounts for the period ending 30
April 2005 apart from the adoption of FRS 25 Financial Instruments: Disclosure
and Presentation, whereby preference shares have been reclassified as financial
liabilities within Creditors: amounts falling due after more than one year.
3). EXCEPTIONAL ITEMS
The following exceptional costs were charged in arriving at the operating loss
of the Group:
Six months Eight months
ended 31 October ended 31 October
2005 2004
Unaudited Unaudited
£'000 £'000
Amortisation of goodwill acquired in reverse takeover - 2,557
4). DIVIDENDS
The Directors do not recommend the payment of a dividend.
5). EARNINGS PER SHARE
The loss per share is based on the equity losses of £220,000 (2004: loss of
£2,469,000) and 137,819,803 (2004: 127,416,000) ordinary shares of 1p each,
being the weighted average number of ordinary shares in issue during the period.
The weighted average number of ordinary shares for the eight months ended 31
October 2004 assumes that the 124,000,000 ordinary shares issued in relation to
the reverse acquisition of Spiritel plc by Expo Communications Limited existed
for the entire period. Spiritel plc shares have been included since 28 July
2004, the date of the reverse takeover, and all other shares have been included
in the computation based on the weighted average number of days since issuance.
6). PREFERENCE SHARES
4,100,000 redeemable preference shares of £1 each have been classified as
financial liabilities and included within Creditors: amounts falling due after
more than one year (2004: £4,100,000).
7). NET CASH (OUTFLOW) / INFLOW FROM OPERATING ACTIVITIES
Six months Eight months
ended 31 October ended 31 October
2005 2004
Unaudited Unaudited
£'000 £'000
Operating (loss) (146) (2,440)
Depreciation & amortisation 191 2,710
(Increase) in debtors (20) (483)
Increase / (decrease) in creditors 253 (37)
Net cash inflow / (outflow) from operating activities 278 (250)
8). RECONCILIATION OF NET CASH FLOW TO MOVEMENT OF NET DEBT
Six months Eight months
ended 31 October ended 31 October
2005 2004
Unaudited Unaudited
£'000 £'000
(Decrease) in cash in the financial period (338) (477)
Loan notes issued in connection with acquisition - (2,500)
Preference shares issued in connection with acquisition - (4,100)
Other non-cash items (63) (33)
Movement in net (debt) / funds in the financial period (401) (7,110)
Net (debt) / funds at 1 May 2005 (6,264) 702
Net (debt) / funds at 31 October 2005 (6,665) (6,408)
This information is provided by RNS
The company news service from the London Stock Exchange
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