Electronic Data Processing : Final Annual Report & Accounts 30 September 2016 (2MB PDF Document)

2016

Annual Report and Accounts

Electronic Data Processing PLC

30 September 2016

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 2016

Strategic report

Key Highlights

>Turnover £4.96 million (2015: £5.16 million) >Contracted recurring revenues remain strong, representing 82% of total revenues (2015: 79%)

Governance

>Hosting revenues amounted to 59% of total revenues (2015: 51%), strengthening our recurring revenues and therefore visibility >Adjusted operating profit broadly maintained at £430,000 after margin improvements and targeted overhead savings (2015: £459,000), giving an operating margin of 8.7% (2015: 8.9%) >Pre-tax profit of £244,000, after one-off charges of £114,000 in relation to property disposed of after the year end (2015: £347,000)

Financial statements

>R&D expenditure was £982,000 in the year (2015: £1,067,000) reflecting continuing enhancement of Quantum VS and Vecta products >Strong debt-free balance sheet; cash balances of £5.40 million at 30 September 2016 (2015: £5.55 million) >Last remaining surplus freehold property sold after the year end for £1.2 million

Notice of meeting

>Final dividend 3.0p per share, meaning overall dividend maintained at 5.0p for the full year In this report Visit us online

Strategic report

1. Key Highlights

2. Chairman's Statement

3. Chief Executive's Statement

1. Key Performance Indicators

2. Principal Risks and Uncertainties

1. Environmental, Employee, Social, Community and Human Rights Matters

   Governance

2. Directors and Advisers

3. Directors' Report

12 Corporate Governance

1. Audit Committee Report

2. Directors' Remuneration Report

1. Statement of Directors' Responsibilities

   Financial statements

2. Independent Auditor's report

1. Consolidated Income Statement

2. Consolidated Statement of Comprehensive Income

3. Consolidated Balance Sheet

4. Consolidated Statement of Changes in Equity

5. Consolidated Cash Flow Statement

6. Notes to the Consolidated Financial Statements

1. Company Balance Sheet

2. Company Statement of Changes in Equity

3. Company Cash Flow Statement

4. Notes to the Company Financial Statements

67 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 2016 1

Chairman's Statement

Sir Michael Heller

Summary

• Adjusted operating profit was £430,000 compared with £459,000 last year. The reduction in turnover was largely offset by improved margins and

  lower overheads.

• Since the year end we have completed the sale of our surplus freehold property in Milton Keynes for £1.2 million.

  Turnover for the year to 30 September 2016 was £4.96 million compared with £5.16 million the previous year. This resulted from a quiet end to the financial year as decisions on a discrete number of sales opportunities were delayed by customers. This is dealt with further in the Chief Executive's statement.

  Adjusted operating profit (which excludes non-cash IFRS items and exceptional

  non-trading costs and is reconciled to statutory

  Operating cash flows were strong and at the year end cash and short-term deposits (classified as investments in the balance sheet) totalled £5.4 million (2015: £5.55 million). This is after dividends paid during the year of £631,000 but this does not include the cash from the property disposal which

  was received after the year end.

  Net assets at 30 September 2016 were

  £3.19 million compared to £4.96 million at

  profit before tax in note 3 to the consolidated

  30 September 2015. The reduction is due

• The Directors are proposing to pay a final dividend of 3.0p per share (2015: 3.0p) giving a total dividend for the year of 5.0p, the same as last year. Total cash dividends paid to shareholders will

therefore amount to £631,000.

financial statements) was £430,000, compared with £459,000 last year. The reduction in turnover was largely offset by improved margins and lower overheads.

Statutory pre-tax profit for the year was

£244,000 (2015: £347,000) after charges of £114,000 in relation to property matters which are referred to below.

Contracted recurring revenues, which comprise income from annual software licence fees and hosting subscription charges, amounted to 82% of total revenue compared with 79% in the previous year. Revenues generated through the hosting centre also increased to 59% of total revenues, up from 51%.

R&D expenditure for the year was

£982,000 (2015: £1,067,000) as we

continued to enhance our key products, Quantum VS and Vecta.

I am pleased to confirm that since the year end we have completed the sale of our

surplus freehold property in Milton Keynes for £1.2 million. Net of disposal costs the proceeds amounted to £1.17 million. This resulted in a £10,000 reduction in the carrying value of the property at the year end. As reported at the half year stage, we incurred an exceptional charge of £104,000 relating to repairs to the roof of this property following storm damage.

to a further increase in the liability relating to our defined benefit pension scheme under IAS 19. Net of deferred tax we have made a non-cash provision during the year of £1.4 million following a further significant decrease in the discount rate used to value liabilities under IAS 19. This is discussed further in the Chief Executive's Statement.

The Directors are proposing to pay a final dividend of 3.0p per share (2015: 3.0p) giving a total dividend for the year of 5.0p, the same as last year. Total cash dividends paid to shareholders will therefore amount to £631,000. If approved by shareholders, the final dividend will be paid on 6 April 2017 to those shareholders on the register at

10 March 2017. The shares will be ex-dividend on 9 March 2017.

We announced earlier in the year that we are carrying out a strategic review of the business and that process is continuing. We will report the conclusions of the review to shareholders in due course.

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 and a strong debt-free balance sheet I remain confident about the future.

This sale completes a process that we

started some years ago, to dispose of six freehold properties which had become surplus to operating requirements. Overall this process has generated more than

£7 million of cash which has supported distributions to shareholders totalling

£11 million over the same period.

Sir Michael Heller

Chairman

19 December 2016

2 Electronic Data Processing PLC Annual Report and Accounts 2016