Released: 30/01/2007
RNS Number:3364Q
Spiritel PLC
30 January 2007
For immediate release 30 January 2007
SPIRITEL PLC
("Spiritel" or "the Company")
Interim results for the six months ended 31 October 2006
Spiritel plc (AIM: STP), the telecommunications company, is pleased to announce
its interim results for the six months ended 31 October 2006.
Highlights
- Trading at Spiritel has proceeded in line with Directors' expectations and
the Company is on track to meet full year market forecasts, underpinned by
recent earnings-enhancing acquisitions
- Turnover in the period of £6.84m (H1 2005: £8.12m) with pre-tax loss of
£1.14m (H1 2005: £0.23m)
- Current half has started well with the Company trading at a positive
underlying EBITDA level during the first two months
- Reorganisation of the Company into Spiritel Wholesale and Spiritel Retail
to broaden routes to market and achieve a direct relationship with customers
to complement indirect sales
- Delivery of Spiritel Retail's acquisitive strategy through the purchase
and integration of Callplan Ltd and Networks Direct (UK) Ltd. The timing of
these acquisitions was such that they made only a small contribution to the
period under review
- Spiritel continues to evaluate further potential acquisitions and will
report further progress in due course
- Directory enquiries service 118 918 launched in November 2006 in
partnership with Oxfam, which receives 9p from every call
Commenting on the results, Lord St John of Bletso, Spiritel's Chairman, said: "
We are delighted by the progress made in the first half, which has allowed us to
enter the second half in a much stronger position. Our cash generative
acquisitions completed at the end of the first half will make a full
contribution during the second half. We continue to evaluate further potential
acquisition candidates and have been impressed by the opportunities available to
us. The current half has started well, with the Company trading at a positive
underlying EBITDA level during the first two months, giving us confidence for
the remainder of the year."
For further information:
Spiritel plc 020 7160 0100
Alastair Mills, Chief Executive
Buchanan Communications 020 7466 5000
Mark Court/Mary-Jane Johnson
Notes for Editors:
About Spiritel plc
Spiritel plc (AIM: STP) is a telecommunications group that joined the AIM market
of the London Stock Exchange in July 2004. We have multiple routes to market for
our products and services, which include a range of both traditional and
emerging telecoms technologies. Spiritel's client base includes corporate,
wholesale and retail customers served directly through our value added reseller
division Spiritel Retail, via web portals and through independent resellers.
Spiritel, in partnership with Oxfam, has launched the directory enquiries
service 118 918, from which Oxfam receives 9p from every call made.
For further information please visit www.spiritelplc.com
CHAIRMAN'S AND CHIEF EXECUTIVE'S REVIEW
The half year to 31 October 2006 has been one of considerable progress in terms
of the development of the Company. In July we took the decision to reorganise
the Company's divisional structure into Spiritel Wholesale and Spiritel Retail,
an initiative to support the Company's strategic objective of broadening its
routes to market with a particular emphasis on achieving a direct relationship
with end users of our products and services. The Wholesale division comprises
our call termination business and our VoIP product and services suite. The
Retail division, whose strategy is to acquire cash generative businesses,
comprises the Company's direct to end user initiatives. We are pleased to report
that the delivery of the Retail strategy is well under way, with the first two
acquisitions having already been made and integrated.
Spiritel Retail
We were delighted to deliver on our acquisition strategy soon after stating our
intention to build a Retail division through the purchase of companies that give
us a direct relationship with the end users of our products and services. In
September we announced the acquisition of CallPlan Ltd, a sales agency that
markets products and services in the UK on behalf of Australia's Telstra, one of
the world's largest telecommunications companies. In October we acquired the
highly profitable Networks Direct (UK) Ltd, which provides voice and data
services to more than 300 SMEs across the UK. These earnings-enhancing
acquisitions made only a small contribution in the period under review but will
make their first full six month contribution in the second half. We continue to
review further acquisition opportunities and look forward to providing a further
update in due course.
Spiritel Wholesale
During the period, and after the period end, we continued to provide wholesale
services to most of the leading fixed line telcos in the UK and we were pleased
to add a significant new customer during the period. The great majority of our
revenues in the period derived from our Wholesale business, which experienced
pricing pressure in common with industry peers. Post the period end there has
been some improvement in the Wholesale trading environment, including an easing
of pressure on termination margins. Also, post the period end, we signed a
contract with a major UK reseller in respect of our leading-edge VoIP product
suite.
118 918
In partnership with Oxfam, Spiritel launched the 118 918 directory enquiries
service towards the end of last year. The service is priced at the same level as
the UK's dominant directory services with the unique feature that 9p from every
call goes to Oxfam.
People
In April 2006 we were delighted to welcome Steven Maine, a former Chief
Executive Officer of Kingston Communications plc, to the Board as a
Non-Executive Director. In December 2006 Steven, whose vast experience of the
telecoms sector has been of great value to the development of the Company,
became Deputy Chairman. In October a co-founder of the Company, John
Vergopoulos, stood down from the Board to pursue other business interests
primarily in the private sector.
Financials
Turnover in the period was £6.84m (H1 2005: £8.12m) of which £120,000 (H1 2005:
nil) arose from the two acquisitions towards the period end of Callplan and
Networks Direct. The pre-tax loss was £1.14m (H1 2005: £0.23m), reflecting
restructuring costs and pressure on wholesale prices. The loss per share was
0.57p (H1 2005: 0.17p).
Outlook
We are delighted by the progress made in the first half, which has allowed us to
enter the second half in a much stronger position. Our cash generative
acquisitions completed at the end of the first half will make a full
contribution during the second half. We continue to evaluate further potential
acquisition candidates and have been impressed by the opportunities available to
us. The current half has started well with the Company trading at an underlying
EBITDA positive level during the first two months giving us confidence for the
remainder of the year.
Lord St John of Bletso Alastair Mills
Chairman Chief Executive
29 January 2007
SPIRITEL PLC
CONSOLIDATED SUMMARISED PROFIT AND LOSS ACCOUNT
For the six months ended 31 October 2006
Restated
Six months six months
ended 31 ended 31
October 2006 October 2005
Unaudited Unaudited
Note £'000 £'000
Turnover - continuing operations 6,717 8,117
- acquisitions 120 -
6,837 8,117
Cost of sales (6,173) (6,885)
Gross profit 664 1,232
Administrative expenses (1,695) (1,398)
Operating (loss)/profit
Continuing operations (1,067) (166)
Acquisitions 36 -
(1,031) (166)
Share of operating loss of joint venture (18) -
(1,049) (166)
Net interest payable (90) (63)
Loss on ordinary activities before taxation (1,139) (229)
Tax on loss on ordinary activities - (11)
Loss on ordinary activities after taxation (1,139) (240)
Minority interest 134 -
Loss for the financial period (1,005) (240)
Loss per ordinary share in pence 4 (0.57) (0.17)
There were no recognised gains or losses other than the loss for the financial
period.
SPIRITEL PLC
CONSOLIDATED SUMMARISED BALANCE SHEET AT 31 OCTOBER 2006
31 October Restated 31
2006 October 2005
Unaudited Unaudited
£'000 £'000
Fixed assets
Tangible Assets 748 944
Intangible Assets 2,457 -
3,205 944
Current assets
Debtors 1,059 954
Cash at bank and in hand 252 92
1,311 1,046
Creditors: amounts falling due within one year (4,052) (1,359)
Net current liabilities (2,741) (313)
Total assets less current liabilities 464 631
Creditors: amounts falling due after more than one year 4,695 6,757
Provision for liabilities 18 84
4,713 6,841
Capital and reserves
Called up share capital 2,195 1,378
Share premium account 3,630 1,128
Reverse acquisition reserve (5,763) (5,763)
Profit and loss account (4,311) (2,953)
Shareholders' deficit (4,249) (6,210)
464 631
SPIRITEL PLC
CONSOLIDATED SUMMARISED CASHFLOW STATEMENT
For the six months ended 31 October 2006
Restated
Six months ended six months ended
31 October 2006 31 October 2005
Unaudited Unaudited
£'000 £'000
Net cash (outflow) / inflow from operating activities (Note 6) (755) 258
Returns on investments and servicing of finance 2 -
Taxation 17 (120)
Capital expenditure (76) (496)
Acquisitions and disposals (907) -
Financing 1,873 20
Increase / (decrease) in cash (Note 7) 154 (338)
NOTES TO THE INTERIM FINANCIAL INFORMATION
For the six months ended 31 October 2006
1). INTERIM FINANCIAL INFORMATION
The interim financial information covers the six months ended 31 October 2006,
is unaudited and does not constitute statutory financial statements.
2). PRINCIPAL ACCOUNTING POLICIES
The interim financial information has been prepared using the same accounting
policies as set out in the financial statements for the year ended 30 April
2006, except for the mandatory adoption of FRS 20 "Share based payments" and FRS
26 "Financial Instruments - measurement".
FRS 20 - Share based payments
FRS 20 requires the recognition of a charge for share based payment transactions
which includes share options. The charge to the profit and loss account in the
six months ended 31 October 2006 was £39,000. The adoption of FRS 20 has also
resulted in a prior period adjustment in respect of the comparative six month
period ended 31 October 2005. The charge to the profit and loss account for the
six month period to 31 October 2005 was £20,000 and the comparative figures have
been restated accordingly.
FRS 26 - Financial instruments - measurement
The directors do not consider that the adoption of FRS 26 has had a material
impact on the financial statements of the group, and hence no prior period
adjustment has been made.
3). DIVIDENDS
The Directors do not recommend the payment of a dividend.
4). LOSS PER ORDINARY SHARE
The loss per share is based on the equity losses of £1,005,000 (2005: loss
£240,000) and 176,477,807 (2005: 137,819,803) ordinary shares of 1p each, being
the weighted average number of ordinary shares in issue during the period.
NOTES TO THE INTERIM FINANCIAL INFORMATION (CONTINUED)
For the six months ended 31 October 2006
5). 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 (2005: £4,100,000).
6). NET CASH (OUTFLOW) / INFLOW FROM OPERATING ACTIVITIES
Restated
Six months ended six months ended
31 October 2006 31 October 2005
Unaudited Unaudited
£'000 £'000
Operating loss (1,031) (166)
Depreciation & amortisation 225 191
Decrease / (increase) in debtors 132 (20)
(Decrease) / increase in creditors (81) 253
Net cash (outflow) / inflow from operating activities (755) 258
7). RECONCILIATION OF NET CASH FLOW TO MOVEMENT OF NET DEBT
Six months ended Six months ended
31 October 2006 31 October 2005
Unaudited Unaudited
£'000 £'000
Increase / (decrease) in cash in the financial period 154 (338)
Loans received (1,250) -
Other non-cash items (92) (63)
Movement in net debt in the financial period (1,188) (401)
Net debt at 1 May 2006 (5,046) (6,264)
Net debt at 31 October 2006 (6,234) (6,665)
This information is provided by RNS
The company news service from the London Stock Exchange
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