ECsoft Announces First Quarter Results.Business Editors LONDON--(BUSINESS WIRE)--April 30, 2001 ECsoft Group plc: Highlights - Continued focus on management controls yields third successive quarter of growth; - First quarter 2001 operating margin increased to 4.4%, versus 0.1% loss in first quarter 2000; - Net income increased to (pound)673,000; - All territories profitable, for the first time since 1999; - Strong cash position of (pound)38.9 million, as at 31 March 2001; - Strategy to focus on increasing scale and market penetration through organic growth and strategic acquisitions. ECsoft Group plc ("ECsoft" or the "Company"; London: ECS See eComStation. ; Nasdaq OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). : ECSGY) today announces results for the first quarter ended 31 March 2001. Consolidated revenues for the first quarter were (pound)18.8 million, compared to (pound)17.7 million for the first quarter of 2000, a growth of 6.2%. Consolidated net income was (pound)673,000, or 5.7 pence pence n. Chiefly British A plural of penny. pence Noun a plural of penny USAGE: Since the decimalization of British currency and the introduction of the abbreviation p, per share for the first quarter of 2001, compared to net income of (pound)111,000 or 0.9 pence per share for the same period in 2000. All earnings per share figures are calculated on a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. before goodwill amortisation Noun 1. amortisation - the reduction of the value of an asset by prorating its cost over a period of years amortization reduction, step-down, diminution, decrease - the act of decreasing or reducing something 2. and exceptional items increased to (pound)836,000 in the first quarter, up from a net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of (pound)13,000 for the same period in 2000. Operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: for the first quarter 2001 increased by 450 basis points over first quarter 2000, to 4.4%. During the first quarter, the Company earned a net profit of (pound)1.9 million resulting from the disposal of ECsoft's Managed Support Business in the UK to Pink Elephant (1) (Pink Elephant Inc., The Netherlands, www.pinkelephant.com) An IT service management provider founded in 1979 with operations throughout North America and the Asia Pacific region. . Commenting on the results, Jerry Ellis, Chief Executive of ECsoft Group plc, said: "We are very pleased to report an operating profit this quarter well in excess of results reported in the first quarter 2000. This represents the third successive quarter of growth and is the first time since 1999 that ECsoft has been profitable in every country. A key contribution towards the Company's continuing improvement was the solid performance of our Norwegian operations, which had suffered heavy losses in the first three quarters of 2000. They achieved break-even in Q4 2000 and, in Q1 2001, continued their recovery with a return to profitability." New customer projects won during the quarter include Hitachi Europe and CDL 1. CDL - Computer Definition anguage. A hardware description language. "Computer Organisation and Microprogramming", Yaohan Chu, P-H 1970. 2. CDL - Command Definition Language. Portion of ICES used to implement commands. Sammet 1969, p.618-620. 3. (Cheshire DataSystems Ltd.), where ECsoft is delivering powerful and flexible `next generation' business systems. In Denmark, ECsoft is project managing an Internet-based mobile phone payment system for Telia, and at Den Danske Bank Danske Bank is a Danish bank. It was founded 5 october 1871 as Den Danske Landmandsbank, Hypothek- og Vexelbank i Kjøbenhavn (The Danish Farmers' Bank, Mortgage and Exchange Bank of Copenhagen). the Company is involved in a large Internet banking integration project. In Norway, ECsoft secured a contract to develop an electronic invoicing in·voice n. 1. A detailed list of goods shipped or services rendered, with an account of all costs; an itemized bill. 2. The goods or services itemized in an invoice. tr.v. system for the Norwegian Public Roads Administration Statens Vegvesen or the Norwegian Public Roads Administration is a Norwegian government agency responsible for the state and county public roads in the country. This includes planning, construction and operation of the state and county road networks, driver training and , and in the Netherlands, ECsoft is implementing a CRM (Customer Relationship Management) An integrated information system that is used to plan, schedule and control the presales and postsales activities in an organization. system for LogiGo.com, an innovative logistics company. The UK operations are winning further e-Government projects with Local Authorities, following on from their significant Modernising Government programme Modernising Government Programme (MGP) is a combination of Administrative Reform, Service Delivery Improvement, Asset Management and Fiscal Reforms initiatives implemented in the Government Departments of Kerala State,India. at the London Borough of Bromley The London Borough of Bromley is a London Borough of outer southeast London, England. It has an area of 59 square miles (153 km²), of which the majority is green belt land. The borough is the largest in Greater London in terms of area. . As announced within our Q4 2000 results, the Company divested its Managed Support Business in the UK to Pink Elephant for up to (pound)9 million in cash, effective 1 March 2001. The transition of work is proceeding ahead of plan with all major customer contracts now transferred and new joint business opportunities being pursued, in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with the strategic co-operation agreement signed by ECsoft and Pink Elephant. ECsoft continues to strengthen its senior management team with experienced individuals. Mr. Wim de Gier joins the company as the Managing Director of the combined Dutch operations, with effect from 1 May 2001. Having previously served as the Managing Director of COLT-Telecom BV as well as Director of Logica's Finance Division in the Netherlands, Mr. de Gier brings over 25 years of IT, sales and management experience to the Company. At 31 March 2001, ECsoft's workforce was 899, a decrease of 17% over the previous quarter. This reduction is primarily as a result of the sale of ECsoft UK's Managed Support Division and the consolidation of the Company's three operations in the Netherlands. Cash reserves Cash reserves See: Cash investments cash reserves Investment funds that are held in short-term assets such as Treasury bills and certificates of deposit until more permanent investment opportunities are available. increased by 7.6% to (pound)38.9 million, as at 31 March 2001, from (pound)36.2 million at 31 December 2000. The Company is committed to increasing its scale and market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" , both through organic growth and strategic acquisitions, currently focused on the core IT solutions business in the UK. Despite the downturn in general business confidence in the US, and more recently in Europe, the Board remains comfortable with the continued improvement in performance of our operations. With a strong senior management team now in place, a clear focus on our core business and our experienced and high calibre calibre see caliber. employees, we are confident that we can sustain this strengthening business performance. About ECsoft Group plc: ECsoft Group plc (London: ECS; Nasdaq OTC: ECSGY) is an independent IT consultancy, systems integrator An individual or organization that builds systems from a variety of diverse components. With increasing complexity of technology, more customers want complete solutions to information problems, requiring hardware, software and networking expertise in a multivendor environment. and IT solutions provider, specialising in the development and delivery of innovative mission-critical business solutions. ECsoft's mission is to transform business vision into technical reality and it achieves this by investing in and exploiting innovative and emerging technologies, concepts and processes from around the world. ECsoft's customers include many of Europe's top 500 companies as well as government and public organisations. With offices in the UK, the Netherlands, Germany, and Scandinavia, ECsoft is a leader in the practical application of advanced technology. More information about ECsoft can be found at www.ecsoft.com Introduction to Accounts The ECsoft Group plc first quarter results for 2001 are published in accordance with the Listing Rules of the London Stock Exchange London Stock Exchange London marketplace for securities. It was formed in 1773 by a group of stockbrokers who had been doing business informally in local coffeehouses. . The preliminary financial information it contains has been prepared according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in the United Kingdom ("UK GAAP UK GAAP United Kingdom Generally Accepted Accounting Principles "). These first quarter results will be filed under Form 6-K with the U.S. Securities and Exchange Commission. Forward Looking Statements: Statements contained in this release that are not historical facts may contain forward-looking information with respect to the plans, projections or future performance of the Company, the occurrence of which involve certain risks and uncertainties. Potential risks and uncertainties include, without limitation, significant fluctuation Fluctuation A price or interest rate change. in quarterly operating results; continued competitive pressures in the market place; reliance on attracting and retaining technically skilled professional staff; successful integration of acquired companies; managing risks associated with customer projects; the Company's ability to manage its growth; dependence on trends towards open systems computing computing - computer architecture and outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. ; reliance on key executives; reliance on relationships with third parties; and the Company's ability to develop information technology solutions that keep pace with rapid and continuing changes in computing technology, evolving industry standards and changing customer preferences. More information on potential factors that could affect the Company's financial results are included in the Company's filings with the Securities and Exchange Commission, particularly in its Annual Report on Form 20-F.
ECSOFT GROUP PLC
SUMMARISED PROFIT AND LOSS ACCOUNT
(prepared in accordance with UK GAAP)
Un-audited Un-audited
3 months 3 months
31 March 31 March
2001 2000
(pound)000 (pound)000
TURNOVER 18,788 17,695
COST OF SALES (13,900) (13,752)
---------- ----------
GROSS PROFIT 4,889 3,943
SALES AND DISTRIBUTION COSTS (1,633) (1,727)
ADMINISTRATIVE EXPENSES (2,420) (2,229)
---------- ----------
OPERATING PROFIT before goodwill
amortisation and exceptional items 836 -13
Goodwill amortisation (569) (582)
Exceptional items (229) (384)
---------- ----------
OPERATING PROFIT after goodwill
amortisation and exceptional items 38 (979)
Profit on disposal of sale of business
and investments 1,927 1,815
---------- ----------
Profit on ordinary activities before
interest and taxation 1,964 836
Bank interest receivable 506 389
Interest payable and similar charges (7) (10)
---------- ----------
499 379
Profit on ordinary activities
before taxation 2,464 1,215
Tax on profit on ordinary activities (1,789) (1,160)
---------- ----------
Profit on ordinary activities
after taxation 675 55
Minority interests (2) 56
---------- ----------
Retained profit for the period 673 111
========== ==========
Earnings per share (pence) - basic 5.8 1.0
- fully diluted 5.7 0.9
ECSOFT GROUP PLC
SUMMARISED BALANCE SHEET
(prepared in accordance with UK GAAP)
Un-audited Audited
31 March 31 December
2001 2000
(pound)000 (pound)000
FIXED ASSETS
Intangible assets 33,211 36,760
Tangible assets 2,337 3,185
Investments - -
---------- ----------
35,548 39,945
========== ==========
CURRENT ASSETS
Debtors 22,729 19,031
Cash at bank and in hand 38,942 36,207
---------- ----------
61,671 55,238
CREDITORS: amounts falling due within
one year (18,595) (16,886)
---------- ----------
NET CURRENT ASSETS 43,076 38,352
---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 78,624 78,297
---------- ----------
CREDITORS: amounts falling due after
more than one year (93) (99)
PROVISION FOR LIABILITIES AND CHARGES (392) (709)
---------- ----------
78,139 77,489
Equity minority interests 8 10
---------- ----------
78,147 77,499
========== ==========
CAPITAL AND RESERVES
Called up share capital 5,821 5,804
Share premium 3,307 3,114
Capital redemption reserve 143 143
Special reserve 43,437 43,437
Other reserves 15,176 15,176
Profit and loss account 10,263 9,825
---------- ----------
Shareholders' funds: equity 78,147 77,499
========== ==========
Registered office: 101 Wigmore Street Wigmore Street is a street in the City of Westminster, in the West End that runs for about 600 yards parallel and to the north of Oxford Street between Portman Square to the west and Cavendish Square to the east. , London W1U 1QU, ENGLAND tel: +44 (0)20 7355 1101 fax: +44 (0)20 7355 9001 www.ecsoft.com ECsoft and the ECsoft logo are trademarks of ECsoft Group plc |
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