Financial Highlights
- Group revenues increase by 16% to £4,604,409; up from £3,972,725
- Profit before taxation rises to £102,613 from £10,846
- Profit after taxation increased by £94,651 to £99,430
- Closing cash balance of £375,015
Operational Highlights
- CallScripter OEM (Original Equipment Manufacturer) licences now exceed 10,000
- CallScripter has 9 language files - the latest addition being Hungarian
- Ansaback billable minutes increased by 21% in the year
- IP3 Telecom has 251 clients live on the Network Platform (2009: 53)
- Commercial Finance Brokers (UK) Limited (an associate company) commenced trading
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Financial Summary
The board is pleased to report an improved performance compared with the difficult economic conditions of the previous year, although our market remains incredibly tough with continued aggressive competition for all business.
In the second half of the year the General Election brought unexpected disquiet with virtually all sectors holding their breath during April and May pending the voting outcome. This caused some aberrations in the contact centre minutes which quickly dipped to 2009 levels, requiring immediate staffing realignments, before returning to higher levels.
In the December interim report we commented that sales of 3rd party software had affected the profitability of the CallScripter division. This issue has now been rectified.
The Group achieved a profit before taxation for the year to June 2010 of £102,613 (2009: £10,846), on a turnover of £4,604,409 (2009: £3,972,725).
The Company has a strong cash position. This has enabled the company to invest during the year under review in the sales team of CallScripter through the recruitment of a senior Sales Executive. The Board also expects to recruit a further senior CallScripter Sales Executive during the current year.
Dividend
The Company will not be declaring a dividend.
Registrars
Due to cost and service considerations the company changed its registrars from Equiniti Limited to Capita Registrars Limited on 26th June 2010.
People
I would like to thank all of the Directors and employees for their efforts during the past year. Their commitment, loyalty and support are appreciated and are vital to achieving further positive progress.
Outlook
The Group has a clear strategy and looks forward to building on the momentum achieved this year. The year ahead is poised to be a defining one for the company and we have now set our sights on pushing forward to improved profitability.
The Group has built a strong position within certain sectors of the contact centre markets and remains well placed to continue building on these, whilst CallScripter has a strong product offering, enhanced with new functionality, which will be driven forwards by the strengthened sales team.
Whilst the outlook remains challenging, the Directors are confident about the future prospects for the Group and I look forward to reporting further progress.
Philip Dayer
12th August 2010
BUSINESS REVIEW
FOR THE YEAR ENDED 30th JUNE 2010
Business Summary
IPPlus PLC operates through two principal subsidiaries, CallScripter Limited and IPPlus (UK) Limited.
The Group trades under three trading styles namely CallScripter, Ansaback and IP3 Telecom.
In addition the company owns a 40% stake in Commercial Finance Brokers (UK) Limited.
CallScripter is an enhanced customer interaction software suite specifically developed for contact centres, telesales and telemarketing operations. Our clients gain major benefits by introducing CallScripter's dynamic scripting environment and advanced reporting software into their organisations. The software facilitates the rapid set-up, handling and reporting of sophisticated inbound, outbound and e-mail campaigns.
Ansaback is a 24 hours a day, 7 days a week bureau telephony service providing order lines, overflow and out of hours call handling, emergency cover, dedicated phone resource, non-geographic, low call and Freephone telephone facilities as well as disaster recovery lines and other ancillary telecommunication services.
IP3 Telecom is the telephony services arm of the Ansaback business providing a range of network level interactive call services. With options for self-sufficiency or fully managed services, the platform gives the user the ability to run a professional call handling operation without the necessity for expensive hardware, installation, and on-going maintenance costs. Clients can route their required services through our web portal, allowing them to monitor their call traffic in real time or have reports sent periodically by email, fax or text.
Commercial Finance Brokers (UK) Limited is a business involved in procuring commercial property finance, and is the exclusive commercial mortgage broker provider to one of the largest networks of independent financial advisors in the country. The rationale behind IPPlus's small investment is to build the business which will in turn increase the utilisation of our contact centre.
The Market
Despite continued turbulence in the UK economy, and more widely in the international market place, contact centres remain an important characteristic of the modern business enterprise. Contact centre technology continues to evolve and the options available to prospective clients are ever changing with the recent trend being to opt for some dedicated fixed seats and then spill over into the bureau thereby maximising the time of the dedicated agents.
The diversity of clients using CallScripter software does however provide a cushion from being too sector specific. Our contact centre, which operates as a 24/7 bureau service, is also well positioned as its broad range of clients require different services which again provides a similar degree of insulation from movements in specific markets.
IP3 Telecom now has 251 clients on the network platform giving the customer the ability to set up sophisticated call ringing plans whereby we can route their calls at network level from office to office and then if needed to field workers with some calls being diverted to home workers or ultimately an outsourced contact centre such as Ansaback. In addition supplementary services such as IVR (Interactive Voice Response) and call recording enhance the sticky nature of the service. Whilst the market for this type of service is quite mature the key to winning clients is quality and ease of the service provision.
Risks
The risks to the CallScripter division remain unchanged - principally the ability of our sales team and the partner resellers to achieve market penetration. The channels to market, be they via OEM arrangements, or integrated with a dialler as part of a tailored call handling solution need constant attention to preserve existing market share and avoid competitors offering more favourable and solicitously advantageous offers.
The main risk within Ansaback is the exposure to the failure of a major client, as the top 20 clients represent 62% of turnover. Continued vigilance is taken with credit control to minimise this exposure, with Bad Debts remaining at a low level in the year.
Additional risks include the technology utilised in the contact centre and as such we have installed a 'state of the art' modern telephone switch. This new switch includes fail-over systems to further increase our business continuity/disaster recovery readiness whilst also enabling us to offer additional services to clients. Looking at other risks, to lower our susceptibility to power outages, we have a standby generator in case of power cuts, whilst our main computer systems have been upgraded to improve their resilience and minimise any down-time should a problem arise.
IP3 Telecom could be affected if there was a major carrier breakdown affecting the entire network.
Review of Operations
In a challenging year for global markets, we are pleased to announce continued growth in turnover of the Group. A summary of the operational highlights in the year to 30th June 2010 follows.
CallScripter
The division sells our software to other call and contact centres, both domestically and internationally, on a direct basis and through various reseller channels. CallScripter OEM licence sales now exceed 10,000 seats and are set to continue to grow with both ININ (Interactive Intelligence, Inc.) and Nixxis Group SA adding our scripting solution more regularly to their package. CallScripter now has 9 language files, the latest addition being Hungarian. The language files provide localisation, which enhances its appeal, and we expect further languages to be added as more contact centres start up to serve emerging markets. Whilst language itself is not a unique selling point, the ability to convert a new language file quickly is a major benefit to the sales team.
With its comprehensive functionality and ease of use, CallScripter's solutions address the requirements for the most demanding clients using the most up to date applications. Our solutions are proven and tested in some of the most frenetic business environments and regularly enhanced in line with both the latest industry standards and the evolving needs of our customers. These can be seamlessly integrated with other business applications, such as order entry systems and accounting systems, and linked to external data sources providing key management information, improved data quality and better time management tools.
As previously we still consider that attending selected trade conferences pays dividends in enhancing brand awareness and acquiring genuine new enquiries. This year followed a similar pattern with attendance at both the Call Centre Expo in Birmingham, the Call Centre Expo in Berlin and the Government Contract Expo, which pleasingly led to some serious enquiries from Government departments anxious to consider software that could improve departmental efficiencies.
Part of CallScripter channels to market is the network hosted ASP (Application Service Provider) route now commonly referred to as SaaS (Software as a Service) which allows businesses to use the product on a "needs basis" without either complex licensing or in house
technical support. Clients who use this method have access to a low cost entry model which suits a number of organisations where internal IT resources are limited. Internationally this also enables us to offer a low cost direct channel and, like many other software vendors, we anticipate further growth via this route in the coming years.
Professional Services
Using proven methodologies our highly experienced team of consultants provide the guidance and expertise to ensure a successful implementation. We are committed to expediting a rapid return on investment for the clients buying our solution by offering a comprehensive range of services that help them achieve results.
Educational Services
CallScripter provides dedicated classroom and on-site training as well as optional customised training courses that can be developed to meet the client's specific business users' requirements.
Support & Maintenance
CallScripter offers a range of support packages, providing fast, efficient and comprehensive support designed to match the particular needs of our client's organisation and complement their existing skills and resources.
Outlook
Despite the market being nervous, the outlook for our contact centre software division remains positive as contact centres look to their software solution providers for increasing agent performance and maximising their profitability. The sales force has also been strengthened and an air of optimism pervades the division.
Ansaback
Turnover has risen with continued client loyalty and new clients increasing the billable minutes which, when combined with diligent cost control, has assisted the increase in the Group's profitability.
The retail sector bounced back in our seasonal run up to Christmas and some snowy weather in early January helped to push the minutes up. Despite our Call Centre Partners handling more calls themselves, resulting in less overflow traffic, the sectors all held up well. The majority of the call centre partners continue using Ansaback for overflow, weekend, business continuity and disaster recovery plans.
The outlook for new business remains positive allowing us to continue growing the division. These contracts, along with the retention of our Blue Chip client base, are key to the continued profitable progress.
Our client services team takes responsibility for ensuring the smooth flow of data and day to day account management with their respective client counterparts - we see this close co-operation as pivotal in retaining major clients. Price may be important but for some clients quality of service is always going to be the deciding factor. We have steered away from the high volume churn and burn philosophy and whilst at peak periods of the day our agents may talk for 45 minutes in the hour, the average is somewhat less resulting in us having a lower than average staff churn. This ultimately benefits our clients who know the workforce is knowledgeable and stable.
We naturally use our in-house developed CallScripter software package, which enables our agents to handle the vast array of calls presented. Scripts have a client graphic or picture on the front screen providing an auto-cognitive focus helping the agent identify with the client's business activity. We continue to provide clients with detailed data and Ansaback is monitored and controlled on the actual and predicted billable minutes. This Key Performance Indicator, as well as the number of agent call minutes per hour, is reviewed on a daily basis to ensure the correct levels of staff efficiencies within the contact centre. We also scrutinise our Grade of Service and Percentage of Calls Answered to maintain our contracted Service Level Agreements of answering 80% of calls presented within 20 seconds.
As in previous years we have made additional investment in new infrastructure with the network being upgraded and the new telephony switch now fully commissioned.
IP3Telecom
IP3Telecom is the telecoms arm of the Ansaback Division. We have made good progress and currently provide a range of network based interactive call services to 251 clients. With this service our platform clients can manage to route their call requirements through our web portal. This allows fast and efficient configuration of services with detailed logging for reviewing changes. Our services are hosted across resilient platforms with triple redundancy for location, infrastructure and service providers. Web access allows remote management from anywhere in the world, without any proprietary software requirements. Clients have the ability to monitor call traffic in real time or have periodic reports sent via e:mail. This adds another layer of resilience to the Ansaback disaster recovery plan. Overall we are now routing over 190,000 minutes per month through our telephony portals.
In addition, the most exciting development of recent months has been the IP3/CallScripter hosted contact centre solution, combining hosted telephony and hosted scripting into one easy-to-use, low-cost contact centre package. We sold our first IP3/CallScripter integrated package in December 2009.
The business appears to be on a firm footing and we expect continued growth from this niche service.
Employee Relations and Social Responsibilities
The Group was delighted to have its Investor in People award renewed. The report was very complimentary about the work environment as well as the open management style and employee involvement.
The Group's employees support a designated charity every year and raised £911 for the East Anglian Children's Hospice (EACH). In addition we launched the bike to work initiative which encourages employees to cycle to work by funding the acquisition of a new bike. We currently have had 5 members of staff who have taken up this scheme.
Office Lease
The office lease was renegotiated and signed in the new financial year. This was agreed at a reduced rate of £80,000 per annum over ten years, with a five year break clause, along with the return of our rent deposit (£81,075).
Summary and Outlook
The Board is satisfied with the Group's progress in 2010. The investments made in the Group's sales and delivery capability and the increased commercial focus prepares a strong foundation to support further growth in 2010 and beyond.
William A Catchpole
12th August 2010
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30th JUNE 2010
| Note | 2010 | 2009 | |
| £ | £ | ||
| Revenue | 4,604,409 | 3,972,725 | |
| Cost of sales | (2,634,201) | (2,201,305) | |
| Gross profit | 1,970,208 | 1,771,420 | |
| Administrative expenses | (1,868,199) | (1,768,348) | |
| Operating profit | 102,009 | 3,072 | |
| Finance income | 764 | 9,028 | |
| Finance expenditure | (160) | (1,254) | |
| Profit before taxation | 102,613 | 10,846 | |
| Income tax expense | (3,183) | (6,067) | |
| Profit and total comprehensive income attributable to equity holders of the parent company | 99,430 | 4,779 | |
| Basic & diluted earnings per share | 0.33p | 0.02p |
All activities of the Group are classed as continuing.
There were no recognised gains or losses for the year other than the profit disclosed above.
The accompanying accounting policies and notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30th JUNE 2010
| Note | 2010 | 2009 | |
| £ | £ | ||
| ASSETS | |||
| Non-current assets | |||
| Plant and equipment | 193,292 | 215,542 | |
| Other intangible assets | 249,271 | 240,910 | |
| Investment in associate company | 40 | - | |
| Deferred taxation | 280,000 | 280,000 | |
| Non-current assets | 722,603 | 736,452 | |
| Current assets | |||
| Trade and other receivables | 965,994 | 851,155 | |
| Cash and cash equivalents | 375,015 | 421,119 | |
| Current assets | 1,341,009 | 1,272,274 | |
| Total assets | 2,063,612 | 2,008,726 | |
| LIABILITIES | |||
| Current liabilities | |||
| Trade and other payables | (584,203) | (628,149) | |
| Current portion of long-term borrowings | - | (3,781) | |
| Current liabilities | (584,203) | (631,930) | |
| Non-current liabilities | |||
| Deferred taxation | (67,410) | (64,227) | |
| Non-current liabilities | (67,410) | (64,227) | |
| Total liabilities | (651,613) | (696,157) | |
| Net assets | 1,411,999 | 1,312,569 | |
| EQUITY | |||
| Equity attributable to equity holders of the parent | |||
| Share capital | 297,908 | 297,908 | |
| Other reserves | 18,396 | 18,396 | |
| Profit and loss account | 1,095,695 | 996,265 | |
| Total equity | 1,411,999 | 1,312,569 | |
The accompanying accounting policies and notes form an integral part of these financial statements.
The Board of Directors approved and authorised the issue of the financial statements on 12th August 2010.
W A Catchpole | Director | |
R S M Gordon | Director |
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30th JUNE 2010
| Note | 2010 | 2009 | |
| £ | £ | ||
| Cash flows from operating activities | |||
| Profit after taxation | 99,430 | 4,779 | |
| Adjustments for: | |||
| Depreciation | 76,237 | 55,412 | |
| Amortisation of intangible assets | 116,357 | 103,151 | |
| Interest income | (764) | (9,028) | |
| Interest expense | 78 | 298 | |
| Interest element of finance leases | 82 | 956 | |
| Deferred tax provision | 3,183 | 6,067 | |
| Profit on sale of fixed assets | (225) | - | |
| (Increase)/decrease in trade and other receivables | (114,839) | 92,671 | |
| (Decrease)/increase in trade and other payables | (33,263) | 92,640 | |
| Cash generated from operations | 146,276 | 346,946 | |
| Interest paid | (78) | (298) | |
| Interest element of finance leases | (82) | (956) | |
| Net cash generated from operating activities | 146,116 | 345,692 | |
| Cash flows from investing activities | |||
| Purchase of property, plant & equipment | (64,670) | (90,523) | |
| Capitalisation of development costs | (124,718) | (121,809) | |
| Interest received | 764 | 9,028 | |
| Investment in associate company | (40) | - | |
| Proceeds from sale of fixed assets | 225 | - | |
| Net cash used in investing activities | (188,439) | (203,304) | |
| Cash flows from financing activities | |||
| Repayment of borrowings | - | (15,000) | |
| Payment of finance lease liabilities | (3,781) | (15,783) | |
| Net cash used in financing activities | (3,781) | (30,783) | |
| Net (decrease)/ increase in cash | (46,104) | 111,605 | |
| Cash and cash equivalents at beginning of year | 421,119 | 309,514 | |
| Net (decrease)/ increase in cash | (46,104) | 111,605 | |
| Cash and cash equivalents at end of year | 375,015 | 421,119 | |
The accompanying accounting policies and notes form an integral part of these financial statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30th JUNE 2010
| Share Capital | Other Reserves | Profit and Loss Account | Total Equity | |
| £ | £ | £ | £ | |
| Balance at 1st July 2008 | 297,908 | 18,396 | 991,486 | 1,307,790 |
Profit and total recognised income and expense for the year | - | - | 4,779 | 4,779 |
| Balance at 30th June 2009 | 297,908 | 18,396 | 996,265 | 1,312,569 |
| Profit and total recognised income and expense for the year | - | - | 99,430 | 99,430 |
| Balance at 30th June 2010 | 297,908 | 18,396 | 1,095,695 | 1,411,999 |
The accompanying accounting policies and notes form an integral part of these financial statements.
