Epic Group: interim results
Epic Group, leaders in e-learning, announce interim results for the six months ended 30 November 2001.
2001/2000
Turnover £3.31m/£3.71m
Profit before tax £205,000/£567,000
Basic earnings per share 0.8p/2.3p
Diluted earnings per share 0.7p/2.2p
- E-learning widely accepted as a mainstream method for training
- Balance sheet continues to strengthen
- Cash balances of £7.4 million
- Stable Order Book
- Confident about future financial performance
For further information:
Michael Inwards (Chairman) 01273 728686
Donald Clark (Chief Executive Officer) 01273 728686
Stephen Oliver (Chief Financial Officer) 01273 728686
Brian Coleman-Smith / Jacqui Graves (Binns & Co Public Relations) 020 7786 9600
BACKGROUND NOTE:
MARKET DATA ON THE E-LEARNING MARKET:
IDC estimate that the e-learning market will grow to $18 billion by the year 2005 compared to an estimated $2.3 billion for 2000. In Europe, IDC estimate that the market will grow to $4.0 billion in 2004. The market will be dominated by the UK, Sweden and Netherlands. IDC also estimate that a shift in the e-learning market will occur from IT skills training to the non-IT or business skills segment. In 2000 the business skills segment accounted for 24 percent of the market, but is expected to capture 53.8 percent by 2005.
EPIC'S CLIENTS:
Epic has worked with The Royal Bank of Scotland, Lloyds TSB, Barclays, Credit Suisse and the Chartered Institute of Bankers. In the government sector, it has undertaken work for the Department of Work and Pensions, LearnDirect, Scottish Enterprise, the DETR, Inland Revenue and Customs & Excise. British Airways, BOC, PriceWaterhouseCoopers, Video Arts, Linguaphone and the Industrial Society are also clients.
WEBSITE
www.epic.co.uk
EPIC GROUP PLC
(The UK's leading e-learning company)
INTERIM RESULTS FOR THE SIX MONTHS TO 30 NOVEMBER 2001
Chairman's Statement
Trading results for the six months ended 30 November 2001
Turnover was £3,308,000 (2000: £3,712,000) with profits after tax of £205,000 (2000:£567,000). Due to the operational gearing of the business, the operating profit was £26,000 (2000: £498,000) with Interest receipts of £179,000 (2000: £69,000). Epic remains cash generative with a positive cashflow from operating activities of £600,000 in the period (2000: £100,000) leading to a cash balance of £7,400,000. Basic earnings per share were 0.8p (2000: 2.33p).
The principal market sectors for content development remain financial services (20% of turnover) and the public sector (34% of turnover). Other sectors (31% of revenues) include manufacturing, retail, media and IT. Growth in our consultancy and services (15% of revenues) has occurred.
Against a flat economic backdrop, we have controlled costs, and continue to be the UK market leader in e-learning, with a strong balance sheet, and cash generation.
Core business
Our core business is the delivery of e-learning solutions to major private and public organisations. E-learning uses internet technology to deliver training, learning and performance improvement and cost savings. We offer a full outsource solution that includes consultancy, content development, services and products.
Consultancy
To engage with organisations at a higher and more strategic level we have built a consultancy service that delivers to corporate, government and education clients. This includes e-learning strategies for Scottish Enterprise (for the whole of Scotland); global companies in telecommunications, pharmaceuticals, electronics; major government departments and higher education. From a standing start we have obtained 3% of revenues from this activity this year.
Content development
In the finance sector, we are approved suppliers to The Royal Bank of Scotland and Lloyds TSB, with on-going revenues from Barclays, American Express and other financial clients. Consolidation and the need to reduce costs and increase productivity in this sector will continue to drive revenue in 2002.
The public sector represents our largest market. We are approved suppliers for an enlarged Department of Work and Pensions and the Inland Revenue. On-going revenues also come from the Cabinet Office, Houses of Parliament, Department of Transport, London and the Regions, DTI, Scottish Enterprise and the Welsh Development Agency. In local government work continues with several large local authorities.
Within the public sector we have also established ourselves in the further and higher education sectors. Major contracts have been won with the e-university, along with a project on a Virtual Medical School involving 30 of the world's leading Universities. Work continues in Further Education with the government sponsored National Learning Network.
In other sectors, new clients have been won in media, manufacturing, retail and IT. A major contract is underway at Channel 4. Other contracts secured have been from a major manufacturer, several large UK retailers, a major accountancy firm and one of the world's major suppliers of enterprise-wide software.
Services
Testing and localisation work on e-learning products from the University for Industry, a major US publisher and many others continue. Maintenance contracts for the updating and renewal of previous e-learning projects have also continued with a major retail bank.
Products
2002 sees the extension of our activities by the launch of some innovative second-generation e-learning products. These are targeted at specific audiences with strategic partners. Our leadership software 'Prime', produced in partnership with the Cabinet Office, will be launched this month with potential revenue from a range of major government organisations. Our Peer to Peer learning software is being tested in a major trial with Local Authorities later this year, and a collaborative learning tool 'Platinum' has been developed and implemented across a number of government departments. We have continued our previous prudent policy of writing off all costs associated with these products direct to the profit and loss account.
Investments
We have two investments, Digital Bridges and Cityspace. Digital Bridges successfully raised £12 million in October 2001, while Cityspace completed a £2.2m fund raising exercise in December 2001.
Prospects
The e-learning proposition is becoming widely accepted as a mainstream method of training delivery. The initial trials have given way to annual budgets, a focus on Return on Investment and a consolidated supplier base.
We continue to be the UK market leader as evidenced by a prestigious Brandon-Hall award for e-learning and the Outstanding Achievement in E-learning Award in October at the World Open Learning Conference. These awards are a tribute to the largest and most experienced e-learning production capacity in the UK.
As we stated at the time of our AGM in November, our order book is stable and this gives us confidence about our future financial performance.
Epic remains focused, fast and flexible. Our focus on e-learning, and the more robust financial and public sectors, will continue to deliver core revenue. We were fast in responding to this period of economic pressure, controlling costs as necessary, and are ideally placed to resume growth as demand improves. Our flexibility is shown in the range of consultancy, content development, services and innovative products that we deliver in response to changing demands from customers in this rapidly developing market. Profitable market leadership continues to be our business strategy.