Westend ICT Plc Stock Exchange Release April 23, 2009, at 8:30 Finnish time
WESTEND ICT INTERIM REPORT 1 JANUARY-31 MARCH 2009 (IFRS)
- Net sales EUR 1.21 million (EUR 0.89 million)
- Operating result EUR 0.11 million (EUR -0.19 million)
- Result before taxes EUR 15 thousand (EUR -0.58 million)
- Equity ratio -95.3% (-94.0%), shareholders' equity/share EUR -0.03
(EUR -0.03)
- Earnings per share EUR 0.0001 (EUR -0.004)
STRUCTURE OF THE GROUP
During the review period, the Westend ICT group consisted of the subsidiary
operating in Finland, Documenta Oy, in which the group had 100% ownership, and
the parent company Westend ICT Plc. The company has one segment and it has
business operations only in Finland.
In its business operations, Westend ICT Plc focuses on developing its customers'
business processes especially by means of document and workflow management
systems and development of quality and customer relationship management, with
the emphasis on the Finnish markets. The company will continue to use the
operating model in which the operative functions have been centralized into the
subsidiary/subsidiaries.
NET SALES
The Westend ICT group's net sales for the review period were EUR 1.21 million
(EUR 0.89 million).
RESULT DEVELOPMENT
The Westend ICT group's operating result for the review period was EUR 0.11
million (EUR -0.19 million). The result for the review period was EUR 15
thousand (EUR -0.58 million).
The financing costs of the review period include an interest cost of EUR 0.06
million for a convertible loan (IAS 32).
The costs for employment benefits on the review period were EUR 0.65 million
(EUR 0.58 million), which equals to 53% of the net sales (65%).
At the end of the review period, the group's equity is negative. The loss of
share capital of the company has been registered in the Trade register on 20
September 2006.
THE NET SALES AND RESULT DEVELOPMENT OF THE SUBSIDIARY
Documenta Oy
Documenta Oy's net sales for the review period 1 January-31 March 2009 were EUR
1.23 million (EUR 0.91 million). The operating result was EUR 0.18 million (EUR
9 thousand), which is 14.7% of the net sales.
Documenta Oy is a provider of electronic workflow and document management,
quality management and work process intensification solutions. The company
offers software, maintenance, operation service and integration solutions for
companies and public administration. In addition to its own products, Documenta
represents in Finland the Software Innovation ASA workflow and document
management solutions and the Group Business Software AG (former Group
Technologies AG) companies' solutions for email archiving and customer
relationship management. The CEO of the company is Asko Ojanen.
SIGNIFICANT EVENTS IN THE REVIEW PERIOD
The company announced on 15 January 2009 that the Supreme Court had passed a
judgment concerning the share issue and sales of Westend ICT Plc (former TJ
Group Plc) in the year 2000.
The Supreme Court increased the corporate fine by EUR 50,000; thus, the
corporate fine is EUR 100,000. The other parts of the decisions of the Helsinki
Court of Appeal were not changed as regards the Company.
EVENTS FOLLOWING THE REVIEW PERIOD
The summons received by the company in 2007 from the Helsinki District Court
concerning the share issue of the year 2000 have been cancelled and the
plaintiffs have dropped their claims in accordance with the settlements that
have been agreed on. The costs for the company resulting from the settlement
agreements are included in the reservation of EUR 0.3 million that was made in
the financial period 2008.
THE CURRENT AUTHORIZATIONS OF THE BOARD OF DIRECTORS
The Annual General Meeting on 19 June 2007 authorized the Board of Directors to
grant new shares against payment in a share issue and to grant special rights in
accordance with the Chapter 10, Section 1 of the Companies Act, including option
rights, which give the right to subscribe shares against payment. The amount of
new shares issued by the company and new shares subscribed on the basis of
special rights can be 26,000,000 at the maximum.
The authorization includes the right to grant shares or special rights entitling
to shares in a directed issue, that is, to deviate from the shareholders
privilege on the basis of the prerequisites specified in the Companies Act. A
directed share issue requires a weighty financial reason on the part of the
company, such as financing or implementing acquisitions or other business
arrangements, implementing incentive systems targeted at the company's
personnel, or other important financial reason for the company specified by the
Board of Directors. On the basis of the authorization, the Board of Directors
has the right to decide on all other terms of the issuing of new shares or
granting of the mentioned special rights, including the recipients of shares or
special rights and the amount of compensation to be paid. The authorization
shall be valid until 31 December 2010.
FINANCING AND INVESTMENTS
The value of the Westend ICT group's cash and liquid current assets totaled EUR
2.22 million (EUR 1.75 million) at the end of the review period. The equity
ratio of the group was -95.3% (-94.0%).
The Westend ICT group's sales receivables at the end of the review period were
EUR 0.31 million (EUR 0.25 million).
On the review period, the group's gross investments totaled EUR 34 thousand (EUR
8 thousand), which equals to 2.8% (0.9%) of the net sales.
DEVELOPMENT COSTS
The product development expenses have been entered in accordance with the IAS 38
standard in such a way that the development expenses for entirely new products
and new product versions including significant improvements have been activated,
if their future accumulativeness can be reliably verified. Other product
development expenses have been entered as costs in the profit and loss statement
at the time they incurred. During the review period, no product development
expenses have been activated in the balance sheet, but all product development
expenses have been entered as costs. At the end of the review period, the
company's balance sheet contains EUR 122 thousand in activated, undepreciated
product development costs.
PERSONNEL
At the end of the review period, the group had 38 (38) employees. The group
employed an average of 38 (38) persons during the review period.
MANAGEMENT, BOARD OF DIRECTORS, AND AUDITORS OF THE COMPANY
The Board of Directors of Westend ICT Plc consists of the Chairman of the Board
Mikko Salminen and permanent members Hannu Jokela and Jörg Ott.
The auditor selected by the Annual General Meeting is Ernst Young Oy Authorised
Public Accounting Firm with Juha Nenonen (CA) as the principal accountant.
SHARES, SHARE CAPITAL, AND SHAREHOLDERS
Westend ICT Plc's share capital on 31 March 2009 was EUR 2,569,853.92, and the
total number of shares was 128,492,696. The countervalue of a share is EUR 0.02.
Shareholders' equity/share was EUR -0.03. At the end of the review period, the
equities of the group and the parent company were negative. The loss of share
capital of the parent company has been registered in the Trade register on 20
September 2006.
At the end of the review period, the company had 13,538 shareholders.
THE SHARE HOLDING AND WARRANTS OF THE BOARD OF DIRECTORS AND THE MANAGEMENT
On 31 March 2009, the permanent members of the Westend ICT's Board of Directors
and the CEO owned a total of 7,000 company shares, that is, 0.01 percent of the
company's share capital and votes. They do not have any warrants.
For more information on the warrant programs, see the company's web sites at
www.westendict.fi and www.westendict.com.
The company complies to and adapts the Guidelines for Insiders drawn up by
NASDAQ OMX Helsinki Oy.
NEAR-TERM OUTLOOK
The goal for 2009 is to improve the net sales and operating result of the
company as compared to the realized figures of 2008.
However, the uncertainty on the markets due to the current financial situation
is a significant risk that may hamper the realization of that goal.
Forecasting the result of the financial period is difficult as the changes in
the price of the Group Business Software AG shares, registered in other
financial assets and listed in the stock exchange, have had and will continue to
have a major effect on the financial income/costs and thereby on the result of
the financial period.
The interim report of the Westend ICT group for 1 January-30 June 2009 will be
published on 20 July 2009.
Espoo, 23 April 2009
The Board of Directors of Westend ICT
Mikko Salminen, Chairman of the Board
Hannu Jokela
Jörg Ott
CONTACT:
Westend ICT Plc
CEO Hannu Jokela
Tel. +358 207 91 6700
DISTRIBUTION:
NASDAQ OMX Helsinki
Main media
www.westendict.com
The figures in the interim report have not been audited.
In addition to the accounts of the parent company, the interim report of the
Westend ICT group consolidates the accounts of Documenta Oy.
The interim report has been drawn up in accordance with the registration and
assessment principles of the IFRS standards, but the IAS 34 Interim financial
reporting standard has not been observed.
As of 1 January 2009, the group has observed the following new IFRS rules:
IFRS 8 Operating segments and IAS 1 Presentation of financial statements.
Otherwise, the principles presented in the financial report 2008 have been
observed. The implementation of IFRS 8 has not affected reporting. The
implementation of IAS 1 has affected slightly the presentation of the profit and
loss statement and calculation of the change in equity.
The formulas for calculating the key figures have also been presented in the
financial report 2008.
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| CONSOLIDATED PROFIT & LOSS | | | |
| STATEMENT | | | |
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| | | | |
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| (EUR thousand) | | | |
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| | 1.1.- | 1.1.- | 1.1.- |
| | 31.3.2009 | 31.3.2008 | 31.12.2008 |
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| | 3 months | 3 months | 12 months |
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| Net sales | 1 212 | 890 | 3 837 |
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| Change in work in | 18 | 4 | 0 |
| progress,inc(+),dec(-) | | | |
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| Other operating income | 69 | 0 | 348 |
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| Materials and services | 190 | 123 | 436 |
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| Employee benefits expenses | 648 | 580 | 2 375 |
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| Depreciations | | | |
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| Depreciations according to plan | 39 | 40 | 171 |
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| Rents | 47 | 50 | 223 |
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| Marketing expenses | 58 | 59 | 111 |
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| Other operating expenses | 211 | 236 | 1 143 |
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| Unprofitable agreements | | 0 | 0 |
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| Operating profit/loss | 106 | -194 | -274 |
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| | | | |
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| Financial income and expenses | | | |
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| Interest income and other | 8 | 13 | 295 |
| financial income | | | |
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| Interest expenses and other | -99 | -394 | -857 |
| financial expenses | | | |
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| | | | |
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| Profit/loss for the period | 15 | -575 | -836 |
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| Total comprehensive income | 15 | -575 | -836 |
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| | | | |
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| Total comprehensive income | | | |
| distributable | | | |
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| to equity holders of the parent | 15 | -575 | -836 |
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| | | | |
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| Earnings per share calculated on | | | |
| profit/loss | | | |
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| attributable to equity holders of | | | |
| the parent | | | |
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| Earnings per share (undiluted), | 0,0001 | -0,004 | -0,007 |
| EUR | | | |
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| Earnings per share (diluted), EUR | 0,0001 | -0,004 | -0,007 |
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| CONSOLIDATED BALANCE SHEET | | | |
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| (EUR thousand) | | | |
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| ASSETS | 31.3.2009 | 31.3.2008 | 31.12.2008 |
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| NON-CURRENT ASSETS | | | |
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| Intangible assets | | | |
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| Intangible rights | 134 | 209 | 150 |
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| Tangible assets | 121 | 131 | 110 |
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| Other capitalized expenditure | 817 | 1 064 | 799 |
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| Non-current assets total | 1 072 | 1 404 | 1 059 |
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| CURRENT ASSETS | | | |
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| Work in progress | 18 | 4 | 0 |
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| Trade receivables | 309 | 253 | 1 460 |
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| Other current assets | 144 | 142 | 50 |
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| Cash and cash equivalents | 2 217 | 1 749 | 1 339 |
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| Current assets total | 2 688 | 2 148 | 2 849 |
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| TOTAL ASSETS | 3 760 | 3 552 | 3 908 |
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| | | | |
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| SHAREHOLDERS' EQUITY AND LIABILITIES | 31.3.2009 | 31.3.2008 | 31.12.2008 |
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| Equity attributable to equity | | | |
| holders | | | |
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| of the parent | | | |
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| Share capital | 2 570 | 2 570 | 2 570 |
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| Premium reserve | 0 | 65 142 | 0 |
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| Retained earnings | -6 124 | -70 430 | -5 288 |
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| Profit/loss for the period | 15 | -575 | -836 |
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| TOTAL SHAREHOLDERS' EQUITY | -3 539 | -3 293 | -3 554 |
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| | | | |
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| Long-term liabilities | | | |
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| Interest-bearing liabilities | 1 620 | 1 613 | 1 621 |
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| Long-term liabilities total | 1 620 | 1 613 | 1 621 |
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| Current liabilities | | | |
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| Convertible loans | 4 316 | 4 500 | 4 255 |
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| Interest-bearing liabilities | 17 | 19 | 23 |
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| Trade payables | 125 | 120 | 68 |
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| Other current liabilities | 118 | 127 | 372 |
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| Accrued liabilities | 1 103 | 466 | 1 123 |
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| Current liabilities total | 5 679 | 5 232 | 5 841 |
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| TOTAL SHAREHOLDERS' EQUITY AND | 3 760 | 3 552 | 3 908 |
| LIABILITIES | | | |
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| CONSOLIDATED CASH FLOW STATEMENT | | | |
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| (EUR thousand) | 1.1.-31.3.2 | 1.1.- | 1.1.- |
| | 009 | 31.3.2008 | 31.12.2008 |
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| | 3 months | 3 months | 12 months |
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| Cash flow from operating | | | |
| activities | | | |
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| Operating profit/loss | 106 | -194 | -274 |
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| Amendments: | | | |
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| Depreciations | 39 | 40 | 171 |
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| Change in working capital: | | | |
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| Change in trade and other | 1057 | 957 | -158 |
| receivables | | | |
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| Change in trade and other | -217 | -472 | 378 |
| payables | | | |
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| Interests received | -18 | -4 | 0 |
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| Interests paid | 8 | 13 | 50 |
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| Other financial items | -56 | -66 | -264 |
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| Cash flow from operating | 919 | 274 | -97 |
| activities total | | | |
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| Cash flow/investments | | | |
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| Investments in intangible and | -34 | -8 | -59 |
| tangible assets | | | |
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| Cash flow/investments total | -34 | -8 | -59 |
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| Cash flow/financing | | | |
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| Repayment of loans | -7 | -7 | 0 |
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| Increasing of loans | 0 | 0 | 5 |
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| Cash flow/financing total | -7 | -7 | 5 |
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| Change in liquid funds | 878 | 259 | -151 |
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| according to the cash flow | | | |
| statement | | | |
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| Change in liquid funds | 878 | 259 | -151 |
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| Liquid funds opening balance | 1 339 | 1 490 | 1 490 |
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| Liquid funds closing balance | 2 217 | 1 749 | 1 339 |
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| KEY FIGURES | | | |
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| | 1.1.-31.3.2 | 1.1.-31.3.200 | 1.1.-31.12.20 |
| | 009 | 8 | 08 |
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| | 3 months | 3 months | 12 months |
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| Net sales, EUR million | 1,21 | 0,89 | 3,84 |
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| Operating profit/loss, EUR | 0,11 | -0,19 | -0,27 |
| million | | | |
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| % of net sales | 8,7% | -21,8% | -7,1 % |
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| Cash flow from operations, EUR | 0,92 | 0,27 | -0,10 |
| million | | | |
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| Return on equity, % 1) and 2) | -1,7 % | 76,5 % | 26,7 % |
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| Return on investment, % 1) | 19,2 % | -23,1 % | 0,7 % |
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| Interest bearing net debt, EUR | 3,7 | 4,4 | 4,6 |
| million | | | |
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| Net debt to equity (Net | -105,6 % | -133,1 % | -128,3 % |
| Gearing), % | | | |
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| Equity ratio, % | -95,3 % | -94,0 % | -94,3 % |
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| Gross investments | 0,03 | 0,01 | 0,06 |
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| % of net sales | 2,8 % | 0,9 % | 1,5 % |
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| Personnel at the end of the | 38 | 38 | 38 |
| period | | | |
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| Personnel average | 38 | 38 | 38 |
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| Employee benefits | 17 | 15 | 63 |
| expenses/person, | | | |
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| EUR thousand | | | |
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| | | | |
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| KEY FIGURES PER SHARE | | | |
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| Earnings/share, euro | 0,0001 | -0,004 | -0,007 |
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| Shareholders' equity per | -0,03 | -0,03 | -0,03 |
| share, euro | | | |
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| | | | |
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| 1) Both indicator and devider | | | |
| are negative | | | |
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| in 2008. | | | |
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| 2) The percentages for return | | | |
| on equity and return on | | | |
| investment have been | | | |
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| adjusted to reflect the | | | |
| figures for a 12-month period. | | | |
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| | | |
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| STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY | | |
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| | Share | Share | Retained | |
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| (EUR thousand) | capita | premium | earnings | Total |
| | l | | | |
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| SHAREHOLDERS' EQUITY 1 Jan 2009 | 2 570 | 0 | -6 124 | -3 554 |
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| Comprehensive income | | | | 15 |
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| SHAREHOLDERS' EQUITY 31 Mar 2009 | 2 570 | 0 | -6 124 | -3 539 |
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| | Share | Share | Retained | |
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| (EUR thousand) | capita | premium | earnings | Total |
| | l | | | |
--------------------------------------------------------------------------------
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| SHAREHOLDERS' EQUITY 1 Jan 2008 | 2 570 | 65 142 | -70 430 | -2 718 |
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| Comprehensive income | | | | -836 |
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| Usage of premium reserve | | -65 142 | 65 142 | 0 |
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| to cover the accumulated losses | | | | |
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| SHAREHOLDERS' EQUITY 31 Dec 2008 | 2 570 | 65 142 | -5 288 | -3 554 |
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