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DJ Netalogue Technologies Plc Interim Results 30 September 2016

 
TIDMNTLP 
 
19th December 2016 
 
 Dear Shareholder, 
 
 The first six months of trading for the financial year 2016-2017 have been 
challenging, principally due to exceptional economic uncertainty in Netalogue's 
target market due to BREXIT. Whilst there is still economic uncertainty we are 
pleased to report substantially increased deal activity in the second half with 
some notable clients now proceeding with their ecommerce project. 
 
Financially the company is very stable with a strong cash position, no debt 
and Intellectual Property that delivers profitable growth. 
 
Key Highlights 
 
·    GBP 317,000 turnover 
 
·    EBITDA has decreased by GBP 269,000 
 
·    Net assets of GBP 508,000 with a strong cash balance and no borrowing 
 
Results commentary 
 
There is no hiding behind the fact that the first six months of trading for 
FY17 have been disappointing however we remain positive about the outcome for 
the full fiscal year.  What makes me make this statement? 
 
Firstly, the lower sales revenues in the first six months were not due to 
losing deals but due to unprecedented uncertainty in the general market 
resulting in businesses taking a cautious approach to committing to new capital 
expenditure projects, the net effect being the delaying of decisions.  There is 
no doubt in our minds that, for our target market, the impact of BREXIT has had 
a significant effect on decision making cycles.  Many of our clients who import 
products and distribute them within the UK are directly affected by the 
uncertainty caused by Britain exiting the EU and common trading area and by the 
falling pound against the Euro and US dollar. 
 
Secondly, the impact of delayed deals can have a significant short term effect 
on organisations whose revenue is not made on the basis of volume of sales but 
on value based selling.  Whilst we always desire to improve our sales volume 
(of deals) we traditionally have been an organisation of low volume but high 
value sales.  Our desire is to build long term profitable, strategic, 
relationships with organisations.  Thus, one tends to see peaks and troughs in 
revenue when any single trading period is examined.  Longer term however the 
trend should be positive. Our sales pipeline looks healthy with a number of new 
deals already signed in the second half but the feedback from our prospects is 
that potential deals will take longer to reach fruition as they assess their 
cost base and attempt to absorb some of the price increases rather than pass 
them directly to their clients. 
 
The Outlook 
 
I mentioned in my previous statement that I have been strategically assessing 
all areas of the business and part of that work has been to look at our 
go-to-market strategy by broadening our channels to market and deepening our 
relationship with a small number of key players. Through wider reach and a more 
diverse spread of prospects the Company can better insulate itself from 
external economic issues. 
 
The market is also changing in terms of technology delivery and payment. 
Increasingly we expect to see greater delivery of the Netalogue platform via 
'the cloud' (private, public or hybrid) and payments to be made on a monthly 
subscription basis.  This will in turn smooth revenue flows and make revenue 
forecasting easier. 
 
I repeat my previous statement that the board feels we have developed a sound 
three-year 
 
business plan, and have started out on the path of execution.  The product 
platform is very 
 
competitive, our pricing is right, we have an excellent base of customers and 
enjoy a strong balance sheet. 
 
As chairman I will continue to review strategies to ensure they drive customer 
satisfaction and in turn, operational efficiency and shareholder value. 
 
Nick Barley 
Chairman 
Netalogue Technologies plc 
 
 
Netalogue Technologies PLC 
Consolidated profit and loss account 
for the period ended 30 September 2016 
 
                                                     Six months    Six months 
                                                  ended 30 Sept ended 30 Sept 
                                                           2016          2015 
 
                                                        GBP'000       GBP'000 
 
Turnover                                                    317           552 
 
Cost of sales                                              (32)          (15) 
 
Gross profit                                                285           537 
 
Net operating expenses                                    (517)         (499) 
 
Operating (loss) / profit before depreciation and         (208)            63 
amortisation 
 
Depreciation                                                (4)           (5) 
 
Amortisation of intangible assets                          (20)          (20) 
 
Operating (loss) / profit on ordinary activities          (232)            38 
before taxation 
 
Tax on loss on ordinary activities                            -           (8) 
 
(Loss) / profit for the period                            (232)            30 
 
 
Netalogue Technologies PLC 
Consolidated balance sheet 
at 30 September 2016 
 
                                                        30 Sept       30 Sept 
                                                           2016          2015 
 
                                                        GBP'000       GBP'000 
 
Fixed assets 
 
Intangible                                                  113            40 
 
Tangible                                                     26            31 
 
                                                            139            71 
 
Current assets 
 
Debtors                                                     156           133 
 
Cash at bank and in hand                                    451           807 
 
                                                            607           940 
 
Creditors:  amounts falling due within one year           (232)         (200) 
 
Net current assets                                          375           740 
 
Total assets less current liabilities                       514           811 
 
Creditors: amounts falling due after more than                -             - 
one year 
 
Provision for liabilities and charges                       (8)           (7) 
 
Net assets                                                  506           804 
 
Capital and reserves 
 
Share capital                                               487           487 
 
Share premium account                                       210           210 
 
Profit and loss account                                   (191)           107 
 
Equity shareholders' funds                                  506           804 
 
The profit and loss account and balance sheet above have been prepared in 
accordance with the accounting policies, as stated in the Group's Annual Report 
and Accounts for the year ended 31 March 2016 and as will be applied in the 
Group financial statements for the year ending 31 March 2017. 
 
The information presented has not been reviewed or audited by the Group's 
auditor. 
 
 
 
END 
 

(END) Dow Jones Newswires

December 19, 2016 05:26 ET (10:26 GMT)