ANS Group Plc

December 16, 2010 02:00 ET

Interim Results for the six months ended 30 September 2010

                                                                                  16 December 2010
                                           ANS GROUP PLC
                                          (PLUS: ANS.PL)
                                  ("ANS Group" or the "Company")

                    Interim Results for the six months ended 30 September 2010


Turnover increased by 63% from £5.50 million to £8.98 million

Gross Profit increased by 31% from £1.75 million to £2.30 million

Operating Profit increased by 78% from £0.38 million £0.68 million

Overhead increased by 18% from £1.38 million to £1.63 million

Profit Before Tax increased by 38% from £0.49 million to £0.68 million

Cash Reserves increased by 50% from £1.6 million to £2.4 million

Annualised Recurring Revenues increased by 30% from £4.0 million to £5.2 million

EPS           4.2      (3.2p 2009)
Diluted EPS   4.0      (2.9p 2009)

Dividend increased to 1.50p per share (1.25p 2009)

Acquisition of Alpha Business Computers Limited on 1 November 2010

Chairman's Statement

It  is  with great pleasure that I announce the excellent half year results to 30 September  2010.
Your  Company  has  shown  tremendous resolve during a difficult recessionary  period  to  achieve
positive  results  for  its shareholders: turnover has grown by 63% to £8.98  million  and  profit
before tax has increased 38% to £0.68 million. The results follow the significant investments made
in  the  business  during the year ended March 2010. We have also seen the  continued  growth  and
development of our managed services business, and our annualised recurring revenues have grown  by
30%  to  £5.2 million. This further demonstrates our success in developing our long-term  business

During this period, as the downward pressure on margins has remained considerable, your board  has
continued  to focus on the delivery of key solutions that demonstrate positive business-efficiency
improvements with real cost savings. We move into the second half of the year with a healthy order
book  which we expect to flow through to the bottom line prior to the year end. Our success relies
upon our solution-focused delivery teams whose professional dedication means that solutions of the
highest quality and value for money are delivered to our customers. This commitment has led  to  a
high level of positive customer feedback.

We  have  recruited eight additional members of staff since 1 April 2010 and still have  vacancies
for  sales  and  technical people of the right calibre. I am confident that our credentials  as  a
leading  and  innovative systems integrator and managed services provider, along with  our  highly
respected  reputation  with  our  strategic vendors, provide the business  a  solid  platform  for
continued growth.

Financial Report

We are delighted that the major investment made in the business during the previous financial year
has contributed to an excellent performance, delivering growth in turnover of 63% to £8.98 million
and in gross margin of 31% from £1.75 million to £2.30 million. The increase in turnover shows our
determination  to expand the business in difficult times while continuing to focus  on  profitable
growth.  Although our gross margin percentage has seen a reduction of approximately 6%  to  25.7%,
this  has  been  mainly  due  to our growing deal size with increased  product  content,  and  the
introduction  of  product  business won through the  Buying Solutions  Framework.  The  continuing
overall  downward pressure on product margins is also a contributory factor. However, I am pleased
to  report that the service margins have held up particularly well during the period, allowing  us
to achieve 31% gross margin growth in absolute terms.

Following the end of the current period we acquired Alpha Business Computers Ltd as the next  step
in  our growth strategy. While the acquisition brings new scalability to the operation, there will
inevitably  be a period of consolidation for the new entity: we are well ahead of the  integration
schedule but we expect that it will still take time for all of the cost-saving synergies  to  flow
through.  Further detail in relation to the acquisition is provided below.

Our  focus  on developing our managed services business and recurring revenues has been successful
and  we  believe that this area of the business will continue to grow significantly in the future.
We  have  seen  our annualised recurring revenues increase by 30% to £5.2m.  The operating  profit
increased  by  78%  to £0.68m which, given the ongoing economic environment, is  a  very  pleasing
outcome which has resulted from the investment made by your Board.

I  am  pleased to report that the business has also grown its cash reserves by 50% from  £1.6m  to
£2.4m during the period.


The  Board  is  pleased  to announce that the interim dividend will be increased  to  1.50p  (2009
1.25p).  The dividend will be paid by 31 January 2011 to those members on the register as  at  the
close  of  business on 24 December 2010 (record date). The ex-dividend date is to be  22  December

The  Board  continues to monitor the level of cash required for operations and to  fund  strategic
acquisitions,  and the future dividend policy will be kept under review in the light  of  forecast
cash requirements.

Acquisition of Alpha Business Computers

On  1  November  2010,  ANS acquired the entire issued share capital of Alpha  Business  Computers
Limited  for  approximately £4.85 million (includes £2.1million deferred consideration  paid  over
various dates over the next 30 months).

Alpha  is a leading independent data-management, storage, backup, virtualisation and data-recovery
solutions  provider.  Alpha's operations are currently being consolidated into  ANS  Group.  Simon
Birney,  Alpha's Sales Director, and Howard Johnson, Alpha's Technical Director, have  joined  the
ANS Group management team to assist with the future development of the enlarged business.

The  acquisition has made the ANS Group one of the most capable independent mid-market IT solution
providers  in the UK, expanding both its Manchester headquarters and London city office.  Combined
annual  revenues of the enlarged group are anticipated to exceed £35 million, and the  merging  of
the teams has increased the employee head-count to over 100 with further recruitment planned.  The
acquisition  of  Alpha  brings  several new accreditations to the  Group,  including  NetApp  Star
Partner,  making  ANS  Group  one of only two UK based partners  to  hold  the  highest  level  of
accreditation  with  both  Cisco and NetApp. We have also recently been  recognised  as  a  VMware
Premier Partner.

Operations Update

Our  delivery teams have delivered outstanding productivity and quality of technical  work  during
the  period.  We are under no illusion that even with the increased resource of the new  business,
recruitment and staff retention will still be a key element, and possible limiting factor, to  the
speed of organic growth. As the size of our deals has increased significantly, we must ensure that
the business has the scalability to accommodate the growth, and to capitalise on the cross selling
opportunities that will undoubtedly flow through following the acquisition.

The  significant  investment  of  both  time and resources  in  achieving  the  ISO  9001  quality
accreditation, ISO 14001, and our ambition to achieve ISO 27001 by year end, has been challenging.
Following our Cisco Gold Partner Accreditation and Cisco Customer Service awards we see all of our
accreditations  bringing true value and major benefits to your business  as  we  look  to  further
strengthen our managed services portfolio.

I  am  grateful  to the Senior Management team and their staff for the hard work,  dedication  and
professionalism they have displayed in driving the business forward during the continued difficult
economic times.


The  continued success of our ground-breaking Infrastructure 3.0 architecture has led us to extend
the  message  and develop Security 3.0. This is our go-to-market security architecture  that  uses
Cisco,  Cisco IronPort and RSA to build a unified security infrastructure that enables a  flexible
yet  borderless  security network that can be maintained and managed at a single point.   Security
3.0  provides  complete control over all of the components that are required to keep organisations
protected,  using cutting-edge technology to safeguard business-critical data with  a  modern  and
advanced approach to businesses' security needs.

Our  innovative  approach to these award-winning technologies, coupled with our  vast  experience,
means that we can once again 'achieve more with less'. The Security 3.0 message is fully supported
by all three vendors.

Our  relationship with Cisco continues to flourish. Our Cisco Gold Star for customer satisfaction,
which is reviewed quarterly, has been held since our Gold accreditation in June/July 2008.

We  have  achieved  NetApp ASP which provides us with priority routing to NetApp Global  Technical
Support Centres and means our support team receives fast, high-quality backup support from NetApp.
Following the Alpha acquisition we are now a NetApp Star Partner.

ANS Group Outlook

Our  impressive first half performance has ended with an order pipeline that is larger than at any
time  during our history. As we move into the second half of the year, which traditionally is  our
busiest  6  months due to normal public sector spending plans, we are faced with some  uncertainty
caused  by  the  much  publicised public expenditure cuts. Although we have  seen  a  slowdown  in
decision making from our NHS and local government customers, business remains buoyant and we  have
seen  a quickening of the decision making process in the  commercial sector, as the economy begins
to show a gradual improvement in trading conditions.

I  have  every confidence that ANS Group will continue to show controlled growth, with  good  cash
management, and costs well managed to provide a platform for the future growth.

 UNAUDITED PROFIT AND LOSS ACCOUNT                                             
 HALF YEAR ENDED 30th SEPTEMBER 2010                                           
                                                                  6 months to      6 months to
                                                                   30/09/2010       30/09/2009
                                                                     £                £
 Turnover                                                           8,981,003        5,499,224
 Cost of sales                                                      6,677,014        3,744,620
 Gross Profit                                                       2,303,989        1,754,604
 Administrative expenses                                            1,628,929        1,376,070
 Operating Profit                                                     675,060          378,534
 Profit on disposal of investments                                          0           91,177
 Interest receivable and similar income                                 7,367           26,030
                                                                      682,427          495,741
 Interest payable and similar charges                                       0                0
 Profit on ordinary activities before taxation                        682,427          495,741
 Tax on profit on ordinary activities                                 191,080          108,662
 Profit on ordinary activities after taxation                         491,348          387,079
 Profit for the financial year                                        491,348          387,079
 Earnings per ordinary share                                              4.2              3.2
 Diluted earnings per ordinary share                                      4.0              2.9

 UNAUDITED BALANCE SHEET                                                 
                                                                 As at          As at
                                                            30/09/2010     30/09/2009
                                                               £              £
 Fixed assets                                                            
 Intangible assets                                             724,690        724,690
 Tangible assets                                                87,422        108,456
 Investments                                                    38,567         38,567
                                                               850,679        871,713
 Current assets                                                                      
 Debtors: due after more than 1 year                           550,000        300,000
 Debtors                                                     4,471,977      3,162,271
 Investments                                                     1,998          9,811                       
 Cash at bank and in hand                                    2,430,565      1,558,794

                                                             7,454,540      5,030,876
 Creditors: amounts falling due within one year            (5,930,642)    (3,764,456)
 Net current assets                                          1,523,898      1,266,420
 Total assets less current liabilities                       2,374,577      2,138,133
 Capital and Reserves                                                           
 Called up share capital                                       120,989        119,608
 Share premium account                                       1,314,972      1,264,645
 Employee Benefit trust share reserve                        (522,480)      (522,480)                        
 Other reserves                                                264,403        264,403
 Profit and loss account                                     1,196,693      1,011,957
 Shareholders' funds                                         2,374,577      2,138,133

The Directors of ANS Group are responsible for the contents of this announcement.


Scott Fletcher, Chairman
Tel: 0161 227 1000

St Helens Capital Partners LLP
Tel: 020 7368 6959
Mark Anwyl or Duncan Vasey

Contact Information

  • ANS Group Plc