ELECTRONIC DATA PROC Annual Report and Accounts
Electronic Data Processing PLC30 September 2015
About EDP
Electronic Data Processing PLC is a leading supplier of advanced technology Software Solutions. These include ERP solutions for the Merchanting/Wholesale Distribution Industry, e-business, application hosting and Sales Intelligence Solutions together with
a comprehensive range of customer support and education services.
Our values
>We believe in conducting our business activities with integrity, building mutually beneficial long-term relationships with all our customers, providing the highest levels of professional service at every stage.
>We are committed to delivering superior value in our products and services to our customers, on a continuing basis.
>We respect the individuality of each member of our staff, fostering an environment where creativity and productivity are encouraged, valued and rewarded.
>We are dedicated to creating value for shareholders by performing in a manner which will enhance return on investment.
Electronic Data Processing PLC is incorporated in England and Wales under Registration Number 853560
4 Electronic Data Processing PLC annual report and accounts 2011
Strategic report
Key Highlights>Turnover £5.16 million (2014: £5.51 million)
Governance
>As anticipated, overall revenue impacted following the acquisition of a competitor software business during 2014 by one of our major customers. Underlying revenue was broadly comparable with 2014, and revenue in the second half of 2015 was 5% higher than the first half
>Contracted recurring revenues remain strong, representing 79% of total revenue (2014: 80%)
>Hosting revenues continue to exceed 50% of total revenues; the Company now has 200 hosted customers (2014: 184), demonstrating the success of its strategy to grow the hosting/cloud side of the business
Financial statements
>Adjusted operating profit £459,000 (2014: £553,000), gives an operating margin of 8.9% (2014: 10.0%)
>Sale of surplus freehold property in Sheffield completed in July for
£425,000, generating a profit on disposal of £117,000 and annualised cost savings of £27,000
>Offer of £1.2 million accepted on remaining surplus freehold property; carrying value written down by £189,000
Notice of meeting
>Pre-tax profit £347,000 (2014: £401,000). Excluding property transactions, pre-tax profit was £419,000, an underlying increase of 4%
>R&D expenditure increased by 9% to £1,067,000 in the year (2014: £981,000) reflecting continuing enhancement of Quantum VS and Vecta products
>Strong debt-free balance sheet; cash balances of £5.55 million at
30 September 2015 (2014: £5.0 million) will be used to further develop the business
>Final dividend 3.0p per share, meaning overall dividend maintained at 5.0p for the full year
>Future dividends will be reviewed according to acquisition opportunities and the overall cash position at the time. However, in view of the Company's relatively large cash balances, it is the Board's current intention to pay an interim dividend of 2p per share and a final dividend of 3p per share in future years
Strategic report
Key Highlights
Chairman's Statement
Chief Executive's Statement
Key Performance Indicators
Principal Risks and Uncertainties
Environmental, Employee, Social, Community and Human Rights Matters
Governance
Directors and Advisers
Directors' Report
12 Corporate Governance
Audit Committee Report
Directors' Remuneration Report
Statement of Directors' Responsibilities
Financial statements
Independent Auditor's Report
26 Consolidated Income Statement
Consolidated Statement
of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Consolidated Financial Statements
Company Balance Sheet
Notes to the Company Financial Statements
56 Five Year Statistical Record
More information for investors, including reports, announcements and notices, atwww.edp.co.uk
Electronic Data Processing PLC Annual Report and Accounts 2015 1
Chairman's StatementSir Michael Heller
Adjusted operating profit was £459,000, compared with £553,000, which reflects the impact of the reduction in turnover offset by significant cost savings
Hosting revenues continue to represent in excess of half of total revenues during
the year under review
Contracted recurring revenues, which include annual software licence fees and hosting charges, amounted to 79% of total revenue
The Directors are proposing to pay a final dividend of 3p per share maintaining the total dividend for the year at 5.0p. Total dividends paid to shareholders
will therefore be £631,000
Turnover for the year to 30 September 2015 was £5.16 million compared with £5.51 million the previous year. As we reported last year, one of our major customers acquired a competitor software business and subsequently transferred to that company's software product. The above figures reflect the full year impact of this.
However, it is pleasing to report that second half revenues were up on the first half by
£120,000 or 5%.
Adjusted operating profit was £459,000, compared with £553,000, which reflects the impact of the reduction in turnover offset by significant cost savings. (Adjusted operating profit excludes non-cash IFRS charges
and credits together with one-off restructuring costs.)
Our statutory pre-tax profit for the year was
£347,000 (2014: £401,000) after a net charge of £72,000 in relation to two property matters referred to below.
We have continued to enhance our main products, Quantum VS and Vecta, and the operating result for the year is after increasing R&D expenditure by 9% to £1,067,000 (2014: £981,000).
Hosting revenues continue to represent in excess of half of total revenues during the year under review. Contracted recurring revenues, which include annual software licence fees and hosting charges, amounted to 79% of total revenue compared with 80% in the previous year.
I am pleased to report that in July we sold our surplus freehold warehouse in Sheffield for a cash consideration of £425,000, generating a profit after disposal costs
of £117,000. This will result in annual cost savings of approximately £27,000. We now have one remaining surplus freehold property which is located in Milton Keynes on which we have recently accepted an offer of
£1.2 million. Whilst this is lower than its previous carrying value, this property has been on the market for some time and accordingly we have written the property down by £189,000 to reflect the expected net sale proceeds. We are early in the sale process but, if it proceeds, the sale would result in annual cost savings of approximately
£35,000. We will update shareholders further in due course.
Cash flows during the year were strong and at the year end our cash balances were
£5.55 million (2014: £4.98 million). This is after £425,000 proceeds from the property disposal and dividends paid during the year of £504,000. We continue to be interested in using our cash balances should opportunities to acquire similar software-producing businesses arise.
Net assets at 30 September 2015 were
£4.96 million compared to £5.34 million at 30 September 2014. This in part reflects a further provision of £232,000, net of deferred tax, against the liability relating to our defined benefit pension scheme following a further decrease in the discount rate used to value liabilities under IAS19. This is discussed further in the Chief Executive's Statement.
The Directors are proposing to pay a final dividend of 3p per share (2014: 2p)
maintaining the total dividend for the year at 5.0p. Total dividends paid to shareholders will therefore be £631,000. If approved by shareholders, the final dividend will be paid
on 6 April 2016 to those shareholders on the register at 4 March 2016. The shares will be ex-dividend on 3 March 2016.
We will review future dividends according to the acquisition opportunities that arise and our overall cash position at the time. However, in view of our relatively large cash balances, it is our current intention to pay an interim dividend of 2p per share and a final dividend of 3p per share in future years.
At the year-end share price of 65.5p this is equivalent to a yield of 7.6%.
I would like to thank all our members of staff and my colleagues on the Board for their contribution during the year.
With a robust, cash generative business model combined with a strong balance sheet I remain confident about the future.
Chairman
10 December 2015
2 Electronic Data Processing PLC Annual Report and Accounts 2015
EDP - Electronic Data Processing plc issued this content on 19 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 28 January 2016 10:02:02 UTC
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