RNS Number:8674P
Harrogate Group PLC
17 September 2003
FOR IMMEDIATE RELEASE 17 September 2003
ANNOUNCEMENT TO THE LONDON STOCK EXCHANGE
HARROGATE GROUP PLC ("HARROGATE" OR "THE COMPANY")
PRELIMINARY ANNOUNCEMENT OF RESULTS FOR THE YEAR ENDED 31 MARCH 2003
The Board of Harrogate announces the results of the Company for the year ended
31 March 2003.
Chairman's Statement for the year ended 31 March 2003
In my interim statement for the six months ended 30 September 2002 I reported
Group sales of #185K and operating losses of #482K. The second half of the year
produced sales of #252K and an operating loss of #324K, a marked improvement.
This excludes accounting for sales of #300K to our joint venture company
Realtimetext Limited and a loss of #90K on the sale of The Campus Marketing
Company (UK) Limited ("Campus") each referred to below.
The second full year's trading of the Group has resulted in an operating loss
for the period of #596K on sales of #737K. The Group had cash at bank of over
#400K at end of August 2003 but still has retained losses and therefore cannot
pay a dividend.
The major restructuring of the sales and marketing resource and other staff
reductions at Axiom Software Limited ("Axiom") is expected to effect savings for
the year to March 2004 of approximately #300K and I can report that sales to
date are 50% above the comparable period last year.
In May 2003 I announced the sale of our interest in Campus, the effect of which
would enable us to concentrate our marketing efforts on Axiom's software
products. In March and April of this year I also announced significant new
business developments at Axiom as set out below.
Axiom formed a Canadian company, Axiom Management Systems Limited, for the
purpose of marketing and selling its software products in Canada. I can report
that the Company is now fully operational and making sales. We look forward to
its contribution to the sales increase we forecast for year ending March 2004.
We also expect contributions from Australia and USA where Axiom has distribution
arrangements for the sale of its software products. We have now finalised the
Mexican/Spanish translation of the Discus product.
These new business developments are in their early stages but we are confident
that they will substantially increase our overseas sales. Discus is a
professional behavioural profiling package that provides all the tools needed to
construct, analyse and understand behavioural profiles. It is now available in
eight languages; English, German, Swedish, Norwegian, Brazilian Portuguese,
Traditional Chinese & Simplified Chinese and Spanish and we are doing business
in ten countries namely Canada, Australia, New Zealand, South Africa, Singapore,
Malaysia, China, Brazil, Mexico and USA.
We are presently negotiating a new distribution agreement with a South African
company (our previous distributor's contract having expired). During the course
of next year we will endeavour to secure new distributors in one or more of the
following countries Germany, Sweden, Norway and Spain.
Sales of JobQ as I reported in the interim statement last December, had been
disappointing and resulted in substantial overhead savings being effected. We
announced in April that Axiom had entered into an agreement with easyJet to
provide them with their online recruitment platform using Axiom's JobQ system.
(JobQ is an applicant web-based matching, sifting and assessment platform). We
are presently demonstrating the JobQ system to various large corporations.
Also in my interim Chairman's statement I reported Axiom's software solutions
product for the legal sector. We have a 50% interest in Realtimetext Limited.
The Realtimetext product is a collaborative and instantaneous document creation,
amendment, distribution and storage facility. The other shareholders in
Realtimetext Limited are experienced lawyers who are marketing the product.
Your board was exploring the possibility of Axiom Internet Group Limited
(Axiom's parent company) being distributed or otherwise transferred to the
shareholders of the Company and subsequently trading on the Ofex market. After
analysing various proposals we have decided not to follow this option but, as
explained above, to concentrate on expanding sales of Axiom's products in the UK
and overseas.
During a year where there have been many changes, cost cuttings and staff
reductions, I would like to express my thanks to the Group's customers,
management and employees.
B K Chadwick
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 March 2003
Year ended Year ended
31 March 31 March
2003 2002
# #
TURNOVER
Continuing operations 735,405 551,114
Acquisitions 2,080 -
737,485 551,114
Cost of sales (84,630) (236,662)
GROSS PROFIT 652,855 314,452
Administrative expenses (1,230,974) (7,956,738)
Other operating income 12,488 12,488
OPERATING LOSS
Continuing operations (549,818) (7,629,798)
Acquisitions (15,813) -
(565,631) (7,629,798)
Share of operating loss in joint ventures (29,906) -
GROUP OPERATING LOSS (595,537) (7,629,798)
Amounts written off investments - (790,117)
Interest receivable 27,703 79,710
Interest payable (147) -
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (567,981) (8,340,205)
TAX ON LOSS ON ORDINARY ACTIVITIES 23,318 99,567
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (544,663) (8,240,638)
RETAINED LOSS FOR THE FINANCIAL YEAR (544,663) (8,240,638)
Retained loss for the financial year
LOSS PER SHARE
Basic and diluted (0.12)p (1.78)p
There were no recognised gains and losses for 2003 or 2002 other than those
included in the profit and loss account.
CONSOLIDATED BALANCE SHEET
As at 31 March 2003
2003 2002
# # # #
FIXED ASSETS
Intangible fixed assets 15,978 13,596
Tangible fixed assets 178,718 203,444
Investments - -
194,696 217,040
CURRENT ASSETS
Debtors 576,778 369,973
Cash at bank and in hand 582,394 1,090,834
1,159,172 1,460,807
CREDITORS: amounts falling due within one
year (212,812) (132,032)
NET CURRENT ASSETS 946,360 1,328,775
TOTAL ASSETS LESS CURRENT LIABILITIES 1,141,056 1,545,815
PROVISIONS FOR LIABILITIES AND CHARGES
Investments in joint ventures
-Goodwill on acquisition 151,162 -
-Share of gross assets 8,045 -
-Share of gross liabilities (169,111) -
Share of net liabilities (9,904) -
NET ASSETS 1,131,152 1,545,815
CONSOLIDATED BALANCE SHEET
As at 31 March 2003
2003 2002
# # # #
CAPITAL AND RESERVES
Called up share capital 4,760,000 4,630,000
Share premium account 6,047,701 6,047,701
Other reserves (274,998) (274,998)
Profit and loss account (9,401,551) (8,856,888)
SHAREHOLDERS' FUNDS - ALL EQUITY 1,131,152 1,545,815
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 March 2003
Year ended Year ended
31 March 31 March
2003 2002
# #
Net cash flow from operating activities (591,543) (1,069,374)
Returns on investments and servicing of finance 27,556 79,710
Taxation 99,477 (5,000)
Capital expenditure and financial investment (31,830) (322,591)
Acquisitions and disposals (20,002) -
DECREASE IN CASH IN THE PERIOD (516,342) (1,317,255)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
For the year ended 31 March 2003
Year ended Year ended
31 March 31 March
2003 2002
# #
Decrease in cash in the period (516,342) (1,317,255)
MOVEMENT IN NET DEBT IN THE PERIOD (516,342) (1,317,255)
Net funds at 1 April 2002 1,079,286 2,396,541
NET FUNDS AT 31 MARCH 2003 562,944 1,079,286
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985. The summarised balance sheet at 31 March 2003, the summarised profit and
loss account and summarised cashflow statement for the period then ended have
been extracted from the Company's 2003 statutory financial statements upon which
the auditors' opinion is unqualified and does not contain any statement under
section 237 of the Companies Act 1985.
The audited financial statements of the Company for the year ended 31 March 2003
have been published today and are being despatched to Harrogate shareholders.
Copies of these financial statements will be available for one month from
today's date from the Company's head office at Empress Buildings, 380 Chester
Road, Manchester M16 9EA.
Enquiries:
Keith Chadwick, Harrogate Group PLC 01772 550600
Robert Lo, Nabarro Wells & Co. Limited 020 7710 7407
- ENDS -
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