Xpertise Group PLC - preliminary results for 2001
Despite difficult trading conditions in the UK IT training market, turnover in the continuing business of Xpertise Training improved by 9% to £4.1 million compared with last year.
Xpertise Group PLC ("Xpertise" or "Company")
Xpertise Group, through Xpertise Training, is a leader in IT training in the UK, operating from centres in the North West, Midlands and the North East.
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2001
MAIN POINTS
- Turnover from continuing operations up by 9% against the previous year
- 18% improvement in outstanding order position at 31 December 2001 compared with previous year
- Operating profit before allocation of group overhead costs at Xpertise Training of £146,000 (2000: £107,000)
- Operating loss before goodwill, exceptional and non-recurring items from continuing operations of £245,000 (2000: profit £28,000)
- Loss on disposal of non-core businesses of £0.9 million
- Loss on ordinary activities before tax of £1.57 million (2000: loss of £4.0 million)
- Group board and senior management team strengthened
- £1 million raised to establish a new national training projects and consultancy business based in London and the Thames Valley
- Encouraging start to 2002
- Microsoft Gold Partner status achieved
XPERTISE GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECMBER 2001
CHAIRMAN'S STATEMENT
RESULTS
This is my first statement following my appointment as Chairman in December 2001 and I am pleased to report results in line with expectations.
Despite difficult trading conditions in the UK IT training market, turnover in the continuing business of Xpertise Training improved by 9% to £4.1 million compared with last year. Operating profit at Xpertise Training, before the allocation of central group costs, improved from £107,000 to £146,000.
After central overhead costs, the group operating loss on continuing activities, before goodwill amortisation and exceptional items relating to management restructuring costs, was £245,000 (2000: profit of £28,000).
The group completed the disposal of Direct Computer Training Limited and DCT Resources Limited on 8 August 2001. These businesses had been only partially successful in securing new contracts for the provision of unemployed adult and youth education for the period commencing in April 2001 and as a result faced an uncertain future. The results of these businesses and the loss on disposal of £930,000 are shown in the financial statements as discontinued activities.
Following goodwill charges of £202,000 (2000: £4,033,000) and net interest costs of £61,000 (2000: £80,000) the group loss before tax was £1,571,000 (2000: loss of £4,000,000).
DIVIDEND
No dividend is proposed.
FUND-RAISING
On 14 December 2001 the company successfully completed a placing of 40,560,000 new ordinary shares at 3p per share and raised £1.08 million (net of expenses) primarily to fund the establishment of a new national training projects and consultancy business in London and the Thames Valley.
BUSINESS REVIEW
Xpertise Training
Orders taken for technical training in 2001 were 10% ahead of the previous year at £4.2 million. This contributed to a 9% improvement in delivered sales and to an 18% improvement in the order book at 31 December 2001 compared with the previous year. Some of our competitors have reported declining revenues in 2001 in the difficult conditions affecting our sector, so it is particularly pleasing to report this increase.
The partnerships established during 2001 with Aris Education and Global Knowledge have contributed to the improvement in orders and delivered sales. These partnerships allow the provision of courses to customers in areas of the country where we do not currently have training centres.
Xpertise Training operates training centres in the North West, Midlands and North East regions of England. It remains a priority to expand this geographic coverage and your Board is constantly looking for opportunities to achieve this goal at a level of investment which will produce enhanced returns for shareholders.
Various new products have been introduced to the portfolio of courses mainly in the field of developer education with specific emphasis on Microsoft .Net technologies.
In January 2002, Xpertise Training created a blended learning solution for the new Microsoft Certified Systems Administrator certification. This new training programme combines classroom training with e-learning and is aimed at systems administrators employed in corporate IT departments.
In March 2002, Xpertise Training became only the fourth "Microsoft Gold Certified Partner for Learning Solutions" in the UK. This prestigious accreditation recognises the Company's expertise in delivering Microsoft .Net developer, IT infrastructure and customised training solutions to medium to large enterprise organisations.
National Training Projects and Consultancy
We have made good progress in establishing the foundations for the new national training projects and consultancy division.
Bill Walker and Ben Pike have been recruited to form the core team to develop this business. They both have strong training backgrounds, having been Technical Director and Strategic Business and Operations Director respectively at QA Training, one of the leading companies in our sector.
In addition, we have recruited James Cook, a founder of Anthony Cook Associates, to develop intranet based training, e-learning and web based training and hosting projects, within this new business. James has experience of winning contracts at major financial institutions for the delivery of high quality, bespoke, blended learning programmes.
BOARD CHANGES
There have been a number of changes during the year. Peter Waller and I were appointed as non-executive directors on 21 March 2001 and I succeeded Clive Richards as Chairman on 14 December 2001. Clive remains as a non-executive director.
Malcolm Jessop's term of office expired on 18 July 2001 when he retired from the Board.
Following the disposal of Direct Computer Training Limited and DCT Resources Limited, Jillian Cutbill and Paul Western resigned from the Board on 8 August 2001.
Jim Pickup retired from the Board on 14 December 2001. I would like to thank Jim for his valuable contribution to the group over the past three years.
Jim was succeeded as Chief Executive by Bob Bradley who was appointed on 18 December 2001. Bob joined from QA Training where he was Managing Director of a company with a turnover of £45 million and 450 staff.
The appointments of Bob Bradley as Chief Executive, supported by Bill Walker, Ben Pike and James Cook, complement the existing Xpertise management to provide a core operational team which has tremendous experience and has achieved significant success in the group's market. I am confident this team will enhance the group's reputation and will achieve the demanding targets we have set.
EMPLOYEES
The skills and dedication of our employees are key to the future success of the group and I would like to record my thanks to them for their contributions during the year.
BUSINESS DEVELOPMENT
It is the intention of the group to focus on expanding its share of the market for corporate IT training.
The group has a good core business in Xpertise Training but it currently lacks the scale and geographic coverage to compete at the highest level in this market.
The extension of our business through the national training projects and consultancy division will partially, but not completely, address this question of scale. The group is also seeking a complementary acquisition with an operational base and training schedule in the south of England and we are pursuing various options to achieve this objective.
OUTLOOK
The market for IT training in the UK remains very competitive and challenging.
We have made an encouraging start to the year and orders received in the first two months are 2.7% ahead of last year. Good progress has also been made in establishing the foundations of the new training projects and consultancy business.
In the longer term, the Board is confident that the new executive and management team will realise the undoubted potential of consolidation and growth within our market.
Mike McGoun
Chairman
21 March 2002