About Asite : News : Final Results

Press release

Final Results
25th April 2007

ASITE PLC("ASITE", THE "GROUP")
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER
2006

Highlights:

• Loss before charges for share based payments, amortisation of research and development costs and depreciation reduced to £0.514m (2005: £0.919m)
• l Administration expenses reduced to £1.606m from £2.189m
• Loss per share reduced to 0.5 pence (2005: 0.7 pence)
• Net cash outflow from operating activities reduced from £0.881m to £0.594m

Colin Goodall, Chairman of Asite plc comments:

“Gross operating margins have increased and operating costs reduced significantly. It is most pleasing to note that the loss, pre share option charge, recorded in 2006 fell to £0.815m, being an improvement of £0.505m over the comparative loss recorded in 2005. Like last year, we invested heavily in our product base during 2006 and as a result continue to see improved demand for our collaboration and sourcing solutions in the first quarter of 2007. The actions taken to improve margins and reduce costs over the past two years continue to have a very real impact on the Group’s performance, which is moving towards profitability and sustainable trading.”

Enquiries
For further information, please contact:

CHAIRMAN'S STATEMENT

Results and dividends

The Group’s performance improved on the previous year with operating losses reducing to £0.857m, an improvement of £0.552m (2005: loss £1.409m). This operating loss is after charging research and development (“R&D”) costs of £0.622m (2005: £0.731m) during the year. The Group continued to invest in its core technology, the Asite Business Operating System (“ABOS”) and the Board believes that this investment will allow the Group to differentiate itself in its markets which will lead to sustainable trading in due course. Operating costs include £0.182m (2005: £0.182m) relating to amortisation of capitalised R&D costs from previous years and £0.119m (2005: £0.226m) relating to depreciation of fixed assets, accordingly the group made an operating profit before depreciation, amortisation and R&D costs of £0.066m, a significant improvement on the position as at 31 December 2005 (loss of £0.270m). The Group continues to make considerable progress towards profitability. In line with the Group’s reduced losses, the net cash outflow before financing fell from £0.985m to £0.635m. The loss per share was 0.5 pence compared to 0.7 pence for the previous year. The Board is not recommending a dividend this year (2005: £nil).

Development of the Group

The Group successfully released version 2.0 of the ABOS platform in February 2006 and continued to invest in two new core technologies to complete its product stable, namely, Asite Workspace (“AWS”) and the Asite collaborative Building Information Model (“cBIM”). These new products were released in the first part of 2007 and have significantly improved the Groups position in its markets. The AW brings the existing platform to a wider audience enabling lower cost of entry and ease of use. cBIM is a highly innovative Information Modelling tool. Utilisation of the system increased throughout the year, during January 2006 18,718 users accessed the system from 2,781 organisations whereas at the end of 2006 the comparative figures were 24,716 (up 32%) and 3,457 (up 29%) respectively.

Take up of our ABOS platform was extremely encouraging in 2006. 848,167 documents were published on the system. Users accessing the system increased by 32% and 676 new companies entered the Asite community. The Group is considering ways in which its pricing model can be changed to improve revenues across the different user classes of its client community and the Board believes that benefits from this will begin to be seen in 2007, in particular the Group is considering the introduction of a per user price model. Finally our trading hub saw an increase in trading volumes of 34%.

By June 2006 the Group had completed its cost reduction exercise with the resultant reductions in operating losses as noted above. The focus of the Group since then has been in sales and marketing, and product development.

Following the appointment of Mr Gordon Ashworth as a Non Executive Director in June 2006, Mr Tony Ryan was appointed Group Chief Executive and the Board is pleased with the progress made since this time.

I am a Non-Executive director of four other companies. It is the opinion of the Board that these roles do not constitute any impediment to me being able to discharge my duties at Asite.

Operational review

We have continued to focus our sales resource on our major client relationships including Laing O’Rourke, Stanhope, Grosvenor Estates and BAA. In the early part of 2006 the Group was pleased to be awarded a contract for the provision of collaboration services to the Lansdowne Road Stadium Development Company Limited (Dublin) and subsequently to the Dublin Airport Authorities Pier D project at Dublin Airport. In August 2006 Asite was designated as preferred supplier to the Welsh Health Estates “Designed for Wales” initiative. This has seen five contracts awarded already and a steady pipeline for 2007.

The focus for the Group for 2007 and beyond is to concentrate on growing sales and we started the year with a significant win in Abu Dhabi – Al Raha Beach Resort. This project, a new city district on 6.8m square metres of reclaimed land, will run for 12 years at a construction spend of US$14.700bn.

Outlook

The Group made further steps towards profitable and sustainable trading in the second half of 2006. The directors are satisfied with the financial position of the companies within the Group at 31 December 2006. The Group entered 2007 with a contracted pipeline of £5.811m (2006: £3.100m). These factors, along with the planned investment in our sales capacity, position Asite well for the future.

Mr Colin Goodall
Chairman

24 April 2007

ASITE PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 31 December 2006

All transactions are derived from continuing operations. There are no material differences between the loss on ordinary activities before taxation and the loss for the financial year stated above and their historic cost equivalents.

STATEMENT OF GROUP TOTAL RECOGNISED GAINS AND LOSSES

ASITE PLC
CONSOLIDATED BALANCE SHEET
Year ended 31 December 2006

ASITE PLC
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 December 2006

ASITE PLC
NOTES TO THE ACCOUNTS
Year ended 31 December 2006

1. BASIS OF PREPARATION

Going concern

The early stage of development of the Group’s business is such that there can be considerable unpredictable variation in the amount of revenue and timing and amounts of cash flows. The directors have projected cash flow information for the period to 31 December 2008. On the basis of this cash flow information, the directors are of the opinion that additional funding will be required. The directors are working towards bringing the Group to a level of profitable trading. In doing so, they are assessing, on a regular basis, cost levels, sales activities and research and development expenditure.

Over the past twenty four months, Mr Robert Tchenguiz has provided the Group with the financial support it has required in the form of a loan from R20 Limited, of which Mr Robert Tchenguiz is a director. The directors believe that Mr Robert Tchenguiz will continue to provide the funding required and have received written confirmation from him in the form of a loan facility, of £2.507m, and that he will not call for the repayment of this new loan before 31 December 2008.

There is inherent uncertainty as to the realisation of the forecasts. The directors consider that in preparing the financial statements they have taken into account the uncertainty and all information that could reasonably be expected to be available. On this basis, the directors have formed a judgement at the time of approving the financial statements that they consider it appropriate to prepare these financial statements on the going concern basis. The financial statements do not include any adjustments that would result should the going concern basis of accounting no longer be appropriate.

If the Group were unable to continue in operational existence for the foreseeable future, adjustments would have been made to reduce the balance sheet values of assets to their recoverable amounts, to provide for further liabilities that might arise and to reclassify assets and long-term liabilities as current assets and liabilities.

2. ACCOUNTING POLICIES

The financial information contained in these preliminary results does not constitute statutory financial statements within the meaning of section 240 of the Companies Act 1985. The financial information disclosed for the year ended 31 December 2006 is an abridged version of the Group’s financial statements which have been reported on by the auditors and which will be despatched to shareholders shortly.

The financial information is presented on the basis of the accounting policies of the Group set out in the Annual Report for the year ended 31 December 2005 (under the historical cost convention and in accordance with applicable accounting standards in the United Kingdom) apart from the following changes to accounting policies:

i. The adoption of Financial Reporting Standard 20, Share Based Payments (“FRS 20”). The adoption during the period of FRS 20 requires that the cost of share based payments be recognised in the profit and loss account. The only type of payment made by the Group that is a share based payment is the cost of share options granted to employees and directors. The Black Scholes valuation model has been used to calculate the fair value of the share options at the date of grant. This fair value is then charged to the profit and loss account over the vesting period of the options. Since this charge is not a cash item (no effect on Consolidated Cash Flow Statement) nor a diminution in asset value, there is an equal and opposite credit to reserves of the amount of the share option charge with the result that there is no net change in shareholders’ funds. This credit is reported in the Reconciliation of Movements in Shareholders’ Funds.

In accordance with the transitional provisions of FRS 20, the standard has been applied retrospectively to all options granted after 7 November 2002 that were not yet vested as of 1 January 2006. The charge for the year ended 31 December 2006 was: £42,000. Comparatives for the year ended 31 December 2005 have been restated as shown below:

ii. During the period the Directors reviewed the policy with respect to the classification of revenue which has not yet been invoiced to customers and minority interests. These were previously classified as work in progress and within net liabilities respectively. The Directors have determined that this it is more appropriate to classify this revenue in amounts recoverable on contracts within debtors and minority interests within Capital and Reserves and have restated the 2005 balance sheet accordingly. The result of this change is that £29,000 (2005:£104,000) is included as amounts recoverable on contracts within debtors that would have been shown as work in progress and £nil (2005: £9,000) is shown as minority interest in Capital and Reserves that would have been included in net liabilities under the previous policy.

iii. During the period the Directors reviewed the policy with respect to amounts classified as provisions. Provisions are liabilities that are uncertain in timing and amount. As a result £14,000 (2005: £39,000) is included in accruals within creditors that would previously have been classified as a provision.

The financial information for the year ended 31 December 2005 has been extracted from the statutory financial statements for that year, but has been restated for the impact of the two changes in accounting policy explained above, which contained an unqualified audit report and no adverse statement under Section 237(2) or (3) of the Companies Act 1985. The auditors provided an emphasis of matter in their opinion on the statutory accounts for the years ended 31 December 2005 and 31 December 2006 on the basis of the ability of Asite to continue as a going concern as detailed in note 1.

3. LOSS PER SHARE

Earnings per share is calculated by dividing the net loss for the year, adjusted for minority interest, by the weighted average number of ordinary shares outstanding during the year.

FRS 22 (IAS 33) Earnings per Share requires presentation of diluted loss per share when a company could be called upon to issue shares that would decrease net profit or increase net loss per share. For a loss making company with outstanding share options, net loss per share would only be decreased by the exercise of out-of-the-money share options. No adjustment has been made to diluted loss per share for out-of-the-money share options and there are no other diluting future share issues, therefore diluted loss per share is identical to the basic loss per share.

4. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' (DEFICIT) / FUNDS

5. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW

6. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT

7. ANALYSIS OF NET (DEBT) / FUNDS

8. APPROVAL OF THIS PRELIMINARY ANNOUNCEMENT

The preliminary report, including the financial information contained therein, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the report in accordance with the AIM rules issued by the London Stock Exchange which require that the accounting policies and presentation applied to the preliminary figures should be consistent with those applied in preparing the preceding annual financial statements.

This announcement was approved by the Board of Directors on 24 April 2007.

Back to AIM Notifications
Back to News Index
Copyright © Asite Ltd. All rights reserved.