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Stilo International PLC  -  STL   

Interim Results

Released 07:00 16-Aug-2017

RNS Number : 0946O
Stilo International PLC
16 August 2017
 

16th August 2017

                                                                                                                                        

STILO INTERNATIONAL PLC



UNAUDITED INTERIM RESULTS FOR SIX MONTHS ENDED 30 JUNE 2017

 

 

Stilo International plc ("Stilo", the "Group" or the "Company") today announces its unaudited Interim Results for the six months ended 30 June 2017. The Company provides software tools and cloud services that help organisations create and process structured content in XML format, so that it can be more easily stored, managed, re-used, translated and published to multiple print and digital channels.

 

 

FINANCIAL HIGHLIGHTS

 

·    4% increase in sales revenues to £910,000
(2016: £874,000)

·    Post-tax profits of £142,000
(2016: £181,000)

·    Improved cash position of £1,602,000 as at 30 June  2017
(2016: £1,393,000)

·    Payment of an interim dividend of 0.05 pence per Ordinary Share, representing a 25% increase

(2016: 0.04 pence per share)

·    Increased investment in R&D to £290,000

(2016: £259,000)

 

 

BUSINESS HIGHLIGHTS

 

·    18% increase in recurring software maintenance revenues to £465,000 (2016: £394,000)

 

·      34% increase in Migrate revenues

·      Migrate customers for the period include GE, Brocade, Tyco, ITT, Microchip, Tibco, Cisco, Deltek and the RSSB (Rail and Safety Standards Board)  

·    Release of trial version of AuthorBridge v2

·    Release of Migrate JATS for the Scientific and Scholarly Publishing market

·    Launch of new web site (www.stilo.com)

 

 

David Ashman, Chairman, commenting on the Company's performance, stated:

 

"Our total sales revenues for the period increased by 4%, with encouraging increases in Migrate sales and OmniMark maintenance revenues. With continuing profitability and improved cash reserves, I am pleased to announce the payment by Stilo of an increased interim dividend of 0.05 pence per share."

 

 

 

 

 

 

 

ENQUIRIES

 

Stilo International plc
Les Burnham, Chief Executive

T +44 (0)1793 441444

 

SPARK Advisory Partners
(Nominated Adviser)
Neil Baldwin T +44 (0) 203 368 3554
Mark Brady   T +44 (0) 203 368 3551

 

SI Capital (Broker)

Nick Emerson

Andy Thacker

T +44 (0) 1483 413500

 

 

The information communicated in this announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014

CHAIRMAN'S STATEMENT

 

 

Our total sales revenues for the period increased by 4%, with encouraging increases in Migrate sales and OmniMark maintenance revenues.

 

Marketing activities increased during the period as we attended additional conferences and launched a new, much improved web site which has been well received by customers, partners and shareholders. We released a trial version of AuthorBridge v2 to favourable acclaim, along with an initial version of Migrate JATS for the Scientific and Scholarly Publishing market. Additionally, new developers have been recently recruited as we look to push ahead and complete important aspects of AuthorBridge functionality in 2017.

 

With continuing profitability and improved cash reserves, I am pleased to announce the payment by Stilo of an increased interim dividend of 0.05 pence per share.

 

 

 

David Ashman

Chairman

 

 

 

BUSINESS OVERVIEW

 

 

Stilo develops software tools and cloud services that help organisations create and process structured content in XML format, so that it can be more easily stored, managed, re-used, translated and published to multiple print and digital channels.

 

Over recent years, many organisations have adopted industry specific XML standards eg Publishing (DocBook), Aerospace & Defence (S1000D), Finance (XBRL), Life Sciences (SPL), Software and High Tech (DITA).  Stilo made the decision some years ago to focus new product development and marketing efforts on the emerging DITA standard.  This standard originated within IBM to support the publishing of its technical documentation and has been increasingly adopted by other software and high tech companies. DITA is now beginning to make inroads into additional market sectors including Manufacturing, Life Sciences and Publishing.

 

In order to diversify beyond the DITA market, we have recently undertaken research into the XML JATS (Journal Article Tag Suite) market for scientific and scholarly publishers. Initial indications are that this could represent a promising new business opportunity for Stilo, and we will seek to address this through the incremental development of AuthorBridge and Migrate.

 

We continue to build upon our strong reputation for excellent products and supporting technical expertise, resulting from many years of experience in the structured content marketplace. With offices in the UK and Canada, we support clients throughout North America, Europe and Japan.

 

 

 

PRODUCTS and CUSTOMERS

 

 

OmniMark

 

Stilo's core technology is OmniMark, a long-established development platform used to build high-performance content processing applications integral to enterprise publishing solutions.

 

Users include Boeing, Pratt and Whitney, EADS, Thomson Publishing, and Wolters Kluwer. Sales for the period included orders from the European Parliament, Japan Patent Office and Embraer in Brazil.

 

 

 

Migrate

 

Migrate is the world's first cloud XML content conversion service, and utilises OmniMark technology. Through advanced levels of automation, it enables organisations to improve turnaround times, reduce operating costs and take direct control of their work schedules, providing an attractive alternative to traditional outsourced conversion services.

 

Migrate users include IBM, Cisco, EMC and Oracle. Sales for the period include orders from GE, Brocade, Tyco, ITT, Microchip, Tibco, Cisco, Deltek and the RSSB (Rail and Safety Standards Board). Using Migrate, we have helped our customers convert over one million pages of content to the DITA format.

 

We have recently completed the development of a JATS version of Migrate and have just commenced the process of introducing it to the Scientific and Scholarly Publishing market. This is a market characterised by long-established workflows with outsourced conversion vendors, and will hopefully represent a significant new business opportunity for Stilo in the years ahead.

 

 

AuthorBridge

 

AuthorBridge is a web-based XML authoring tool, designed for occasional content contributors who have no knowledge of XML or its complexities. It is currently targeted at large enterprises, which are looking to extend the use of DITA across different business units and potentially support thousands of users.

 

Development of AuthorBridge is progressing well, albeit with some slippage against original schedules. Its initial adoption by the central Information Developer Tools team at IBM in the USA and the Nuclear Regulatory Commission in Washington D.C. provides a good foundation upon which we can build future sales.

 

A trial version of AuthorBridge v2 was released in February 2017 to favourable acclaim and new developers have recently been recruited as we look to complete important aspects of AuthorBridge functionality in 2017.

 

 

OPERATIONS

 

 

Stilo operates from offices located in Swindon, UK and Ottawa, Canada.  The technical team is based in our Ottawa office.

 

As of 30 June 2017, there were 18 permanent employees in the Company, complemented by the use of contractors. We will continue to consider the recruitment of additional development personnel in 2017, but it is not anticipated that we will be growing headcount significantly, as we look to contain our costs and scale the business through technology sales.

 

 

FINANCIAL RESULTS

 

 

The results for the six months ended 30 June 2017 have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted by the European Union.

 

In 2017, the interim results for Stilo show a reduction in post-tax profits to £142,000 (2016: £181,000).

 

Total sales revenues for the period increased by 4% to £910,000 (2016: £874,000). Significant growth in Migrate revenues were offset by lower OmniMark software sales, which was expected.  The Company continued to benefit from recurring revenue from software maintenance contracts of £465,000 (2016: £394,000) which represents a very encouraging 18% annual increase.

 

The Company maintains careful control over all operating costs. Investments in additional staff, a new web site, and attendances at new JATS-related conferences, contributed to an increase in operating costs during the period, excluding capitalised development costs, to £759,000 (2016: £691,000).

Investment in R & D continued in 2017, with total expenditure for the period of £290,000 (2016: £259,000). As a result of this investment, Stilo continues to benefit from research and development tax credits.

 

Of this expenditure, £91,000 relating to the development of AuthorBridge has been capitalised (2016: £83,000), and the total accumulated capitalised costs will be depreciated over a 10 year period, commencing later in 2017.

 

There was an improved cash balance of £1,602,000 as at 30 June 2017 (30 June 2016: £1,393,000), and Stilo remains entirely un-geared. This balance sheet stability provides a sound financial base for the Company and will support continued investment in product development, sales and marketing.

 

 

DIVIDENDS

 

 

During the period, the final dividend for the year ended 31 December 2016 was paid, of 0.05 pence per share, providing an increased total dividend of 0.09 pence for the year (2015: total 0.08 pence).

 

The Board is pleased to declare the payment of an Interim dividend for the year ended 31 December 2017 to shareholders of 0.05 pence per share (2016: 0.04 pence per share) which will be paid on 21 November 2017 to those shareholders on the register as 20 October 2017. The shares will be marked ex-dividend on 19 October 2017.

 

The Board's policy is to maintain payment of a steady and progressive dividend, well covered and paid subject to maintaining sufficient funds within the business with regard to prudent forecasts of future capital requirements, without the need for debt funding.

 

 

OUTLOOK

 

 

The global market for dynamically publishing structured content to multiple channels continues to grow, which in turn drives the market for XML content conversion and authoring tools.

Following the launch of AuthorBridge v2 in February 2017, we have been receiving very encouraging feedback from trial users. There are still some important aspects of development that need to be undertaken over the coming months and this continues to be a high priority activity for the Company. As a consequence, AuthorBridge is not expected to contribute significantly to sales revenues in 2017.

Otherwise, the outlook for Migrate conversion services and OmniMark software remains promising for the remainder of the year, and overall Company trading is in line with management expectations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Unaudited Group Income Statement

for the six months ended 30 June 2017


Six months
to 30 June
2017
Unaudited
£'000

Six months
to 30 June
2016
Unaudited
£'000

Year to
31 December
2016
Audited
£'000





Revenue - Continuing Operations

910

874

1,761





Cost of sales

(7)

(6)

(12)


--------------

--------------

--------------

Gross profit

903

868

1,749





Operating costs

(759)

(691)

(1,437)

Amortisation of intangible assets

-

-

-


--------------

--------------

--------------

Operating profit

144

177

312





Finance income

3

4

6


--------------

--------------

--------------

Profit before tax

147

181

318

Income tax

(5)

-

13


--------------

--------------

--------------

Profit for the period attributable to the equity shareholders of the parent company

 

142

 

181

 

331


=======

=======

=======

Earnings per share

- basic  (note 4)

0.12p

0.16p

0.29p

- diluted  (note 4)

0.12p

0.15p

0.28p


--------------

--------------

--------------

Dividends




- dividends paid per share

0.05p

0.04p

0.09p


--------------

--------------

--------------

 

 



 

Unaudited Group Statement of Comprehensive Income
for the six months ended 30 June 2017


Six months
to 30 June
2017
Unaudited
£'000

Six months
to 30 June
2016
Unaudited
£'000

Year to
31 December
2016
Audited
£'000

 




Profit for the period

142

181

331


--------------

--------------

--------------





Other comprehensive income

Items that may subsequently be reclassified to profit and loss




Foreign currency translation differences

(17)

160

200


--------------

--------------

--------------

Total other comprehensive income

(17)

160

                 200


--------------

--------------

--------------





Total comprehensive income relating to the period

 125

 341

 531

 

--------------

--------------

--------------

 

 

All comprehensive income is attributable to equity shareholders of the parent company.



Unaudited Group Statement of Financial Position

as at 30 June 2017


As at
30 June

2017
Unaudited

£'000

As at
30 June
2016
Unaudited

£'000

As at
31 December
2016

Audited

£'000

Non-current assets




Goodwill

1,660

1,678

1,660

Other Intangible assets

566

349

482

Plant and equipment

16

24

18

Deferred tax assets

50

50

50


--------------

--------------

--------------


2,292

2,101

2,210

Current assets




Trade and other receivables

280

373

390

Income tax asset

-

-

59

Cash and cash equivalents

1,602

1,393

1,466


--------------

--------------

--------------


1,882

1,766

1,915


--------------

--------------

--------------

Total Assets

4,174

3,867

4,125


=======

=======

=======

Current liabilities:

Trade and other payables

 

523

 

545

 

589

Non-current liabilities:

Other payables

 

26

 

-

 

9


--------------

--------------

--------------

Total liabilities

549

545

598





Equity attributable to equity shareholders of the parent company

 




Called up share capital

1,139

1,124

1,138

Share premium

29

13

29

Merger reserve

658

658

658

Retained earnings

1,799

1,527

1,702


--------------

--------------

--------------

Total equity

3,625

3,322

3,527


--------------

--------------

--------------





Total Equity and Liabilities

4,174

3,867

4,125


=======

=======

=======

 



Unaudited Group Statement of Changes in Equity

for the six months ended 30 June 2017

 

 



Attributable to equity shareholders of the parent company

 


Called up share capital

£'000

Share premium account £'000

Merger reserve

£'000

Retained earnings

£'000

Total

£'000







Balance at 1 January 2016 (audited)

1,124

13

658

1,227

3,022







Comprehensive income






Profit for the period

-

-

-

181

181

Other comprehensive income






Exchange adjustments - may recycle to profit and loss account

-

-

-

160

160

Total comprehensive income

-

-

-

341

341

Transactions with owners






Shared based transactions

-

-

-

15

15

Dividend paid

-

-

-

(56)

(56)

Total transactions with owners

-

-

-

(41)

(41)







Balance at 30 June 2016 (unaudited)

1,124

13

658

1,527

3,322







Comprehensive income






Profit for the period

-

-

-

150

150

Other comprehensive income






Exchange adjustments - may recycle to profit and loss account

-

-

-

40

40

Total comprehensive income

-

-

-

190

190

Transactions with owners






Share based transactions

-

-

-

31

31

Shares issued

14

16

-

-

29

Dividend paid

-

-

-

(46)

(46)

Total transactions with owners

-

-

-

(15)

15







Balance at 31 December 2016 (audited)

1,138

29

658

1,702

3,527

 

Comprehensive income






Profit for the period

-

-

-

142

142

Other comprehensive income






Exchange adjustments - may recycle to profit and loss account

-

-

-

(17)

(17)

Total comprehensive income

-

-

-

125

125

Transactions with owners






Share based transactions

-

-

-

29

29

Dividend paid

-

-

-

(57)

(57)

Shares issued

1

-

-

-

1

Total transactions with owners

-

-

-

(28)

(27)







Balance at 30 June 2017 (unaudited)

1,139

29

658

1,799

3,625



Unaudited Group Cash Flow Statement

for the six months ended 30 June 2017


Six months
to 30 June
2017
Unaudited
£'000

Six months
to 30 June
2016
Unaudited
£'000

Year to
31 December
2016
Audited
£'000

Cash flows from operating activities




Profit before taxation

147

181

318

Adjustment for depreciation and amortisation

6

7

15

Adjustment for investment income

(3)

(4)

(6)

Adjustment for share based payments

29

15

46

Adjustment for foreign exchange differences

11

73

124


--------------

--------------

--------------

Operating cash flows before movements in working capital

191

272

497

Decrease/(increase) in trade and other receivables

105

(170)

(187)

(Decrease)/increase in trade and other payables

(48)

71

97


--------------

--------------

--------------

Cash generated from operations

247

173

407

Tax paid

(1)

-

(45)

Tax credit received

58

49

49


--------------

--------------

--------------

Net cash from operating activities

304

222

411





Cash flows from investing activities




Finance income

3

4

6

Development costs capitalised

(91)

(83)

(204)

Purchase of plant and equipment

(4)

(12)

(11)


--------------

--------------

--------------





Net cash used in investing activities

(92)

(91)

(209)

 




Financing Activities

                

                


Dividends paid

(57)

(56)

(102)

Issue of ordinary share capital

1

-

30


--------------

--------------

--------------

Net cash used in financing activities

(56)

(56)

(72)


--------------

--------------

--------------

Net increase in cash and cash equivalents

 

156

 

75

 

130

Cash and cash equivalents at beginning of period

Exchange (losses)/gains on cash and cash equivalents

1,466

 

(20)

1,318

 

-

1,318

 

18


--------------

--------------

--------------

Cash and cash equivalents at end of period

1,602

1,393

1,466


=======

=======

=======

 



Notes to the Interim Results

for the six months ended 30 June 2017

 

 

1.   The interim results (approved by the Board of Directors and authorised for issue on 16 August 2017) are neither audited nor reviewed and do not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006.  The financial information for the full preceding year is extracted from the statutory accounts for the financial year ended 31 December 2016.  Those accounts, upon which the auditors issued an unqualified opinion, and did not contain a statement under Section 498 (2) and (3) of the Companies Act 2006, have been delivered to the Registrar of Companies.  As permitted, this interim report has been prepared in accordance with UK AIM listing rules and not in accordance with IAS 34 'Interim Financial Reporting', therefore it is not fully in compliance with IFRS.

 

2.   Stilo International plc is a public limited company incorporated in the United Kingdom.  The Company is domiciled in the United Kingdom and its ordinary shares are traded on the AIM market of the London Stock Exchange plc.  Stilo provides specialist software and professional services.

 

The consolidated interim results have been prepared in accordance with the recognition and measurement principles of IFRS including standards and interpretations issued by the International Accounting Standards Board, as adopted by the European Union.  They have been prepared using the historical cost convention.

 

The preparation of the interim results requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date.  If in the future such estimates and assumptions, which are based on management's best judgement at the reporting date, deviate from the actual circumstances, the original estimates and assumptions will be modified as appropriate in the year in which the circumstances change.  The interim results are presented in sterling and all values are rounded to the nearest thousand pounds (£'000) except where otherwise indicated.

 

The interim results of the Group for the period ended 30 June 2017 have been prepared in accordance with the accounting policies expected to apply in respect of the financial statements for the year ended 31 December 2017.

 

3.   There is no tax charge for the period due to the availability of tax losses brought forward.

 

4.   The basic earnings per share is calculated on the weighted average number of shares in issue during the period.  The fully diluted earnings per share takes account of outstanding options.  The weighted average number of ordinary shares in issue for the six months to 30 June 2017 was 113,778,887 shares (30 June 2016: 112,408,470 and 31 December 2016: 112,846,662 shares).  The weighted average number of ordinary shares in issue for the six months to 30 June 2017, for the fully diluted earnings per share, taking account of outstanding options was 119,858,713 (30 June 2016: 119,184,584, 31 December 2016: 118,276,189).

 

5.   Copies of this report will be available to download from the investor relations section of the Company's website www.stilo.com.

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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Interim Results - RNS