Civica plc. Good profits growth and strong momentum in core markets

Civica plc (“Civica” or “the Group”), the software and services group focused on the public sector, announces its preliminary results for the year ended 30 September 2006.

Key Financials

• Operating profit* up 46% to £18.5 million (2005: £12.7 million)
• Gross profit up 48% to £66.5 million (2005: £44.9 million) Turnover up 18% at £125.0 million (2005: £106.0 million)
• Turnover related to own software products up 52% to £73.7 million (2005: £48.6 million)
  - Consulting revenue up 58% to £26.2 million
  - Owned software applications revenue up 28% to £21.5 million
  - Managed services revenue up 70% to £26.0 million
• Order book up 67% at £91 million (2005: £54.5 million)
• Statutory results for the year were turnover of £125.0 million (2005: £106.0 million) and operating profit of £1.4 million (2005: £4.8 million). Basic loss per share was 3.2p (2005 earnings per share: 0.9p)
• Good cash generation with net cash flow from operating activities and before the cash effect of exceptional items at 97% of operating profit*
• Basic* adjusted earnings per share growth of 31% to 20.9p
• Proposed final dividend of 1.45p making a total for the year of 2.18p (2005 1.98p)
• Successful completion of the Comino acquisition which has delivered operational benefits ahead of expectations; with exceptional costs of £7.1 million (2005: nil) related to the integration
• The continued strategy of expanding the scope and scale of contracts around core areas of process and software expertise provided good momentum in the period. Highlights included.
  - Growth in process-led consultancy targeting service delivery outcomes, together with engagements around new legislation including a postal services review across 18 local authorities to deliver cashable efficiency savings
  - Sustained new business in the local government and housing markets with more than 50 new software contracts, together with expansion into new areas, including social care with projects for Liverpool City Council and the London Borough of Hackney
  - Good progress in education, as ICT partner in the preferred consortium for Sheffield’s ‘Building Schools for the Future’ programme, and successful entry into the UK library market with the £1.5m South East Library Management (SELMS) shared service contract
  - Managed services contracts for a further 27 public sector organisations in local government, enforcement and education sectors including 5 new customers in Australia
  - Selection by the UK Office of Government Commerce as a solutions provider within its national ‘Catalist’ procurement framework

* before goodwill amortisation, exceptional items and LTIP charges.

Commenting on the results, Simon Downing, Chief Executive, said:

“This year has seen further significant progress in the UK and internationally for Civica. I am pleased that we have once again delivered strong operating profit growth fuelled by our proprietary software solutions. The integration of recent acquisitions and expansion in existing and related public sector markets continues to strengthen the Group’s market position. With customers expected to continue investment in process improvement, integrated services and of course efficiency, the outlook for the Group remains positive.”

Trading Results

During the year to 30 September 2006, turnover grew 18 per cent to £125.0 million, with operating profit* of £18.5 million, which represents an increase of 46 per cent over the previous year.

Our focus on higher margin activities related to Civica’s own software applications saw turnover in this area (including consulting, software and managed services) grow by 52 per cent over the previous year to £73.7 million, driven by organic growth of 10.4 per cent and the inclusion of the Comino business. An improved mix towards more own software sales contributed to a total gross profit for the period of £66.5 million, which represents a year-on-year increase* of 48 per cent. 

Work carried out under long term contracts is an increasing feature of our business. As at 30 September 2006 the order book stood at £91 million (2005: £54.5 million), of which some 70 per cent is deliverable in the current financial year, and our pre-contracted recurring licence and support revenues now account for 50 per cent of owned software related activities.

A full press release detailing full preliminary results can be downloaded here...