Intellego Holdings Plc Financial statements

Intellego Holdings Plc Financial statements

The Company today announces that its audited financial statements for the year ended 31 March 2011, extracts from which are set out below, are being posted to shareholders, and will be available on the website

The Chairman today released the following statement:

Intellego Holdings plc saw positive changes in its position during the year under review, as the business turn-around realised key milestones, making its first ever profit of £146,000, improving gross margins to 71% and reducing current liabilities by £974,000.

Results for the year
In the first quarter of the year we sold the main learning management system customer base to NetDimensions which resulted in us generating cash to:

  • reduce our creditor backlog materially and
  • finance the transition from being a software distributor to a digital content creator.  

At the beginning of the second quarter we agreed Company Voluntary Arrangements (CVAs) for Intellego Holdings Plc and its subsidiary Intellego Group Limited.  These agreements both strengthened the balance sheet.

In parallel we have refocused and are investing in the business.  This has included developing new products, updating our existing portfolio and the recruitment of new people and advisers.  These changes have already started to impact the business and are beginning to make the step-change in contribution we aim to achieve.  Much of that benefit will be felt in the current and subsequent years. But as we can see from the 2011 results we are already making progress. 

There are several measurements and indicators which demonstrate our progress cementing Intellego's turnaround and growth prospects:

  • Improvement in financial performance of each segment of the business - this is due to structured day to day management, reduction of costs, and focusing the team on putting in place processes that achieve higher margins.
  • The company showed its first ever net profit of  £146,000 (2010 loss £1,043,000)
  • Gross margin improved by 27% to 71% (2010 44%)  
  • Sales increasing 8% to £2,006,000 (2010 £1,853,000)
  • Current liabilities fell by £974,000 to £809,000 (2010 £1,783,000)
  •  Intellego continues to build closer relationships with its customers.  This is generating more repeat business and larger sales per client. All our key customers increased their spend with Intellego, some by more than 50% compared with the previous year.
  • Attraction of high quality people and advisers to join us and work with us to help us execute our growth strategy.    
  • Three awards were won for our client work ("brilliant mixed media e-learning solution.")
  • We executed our first 100% share based acquisition in April 2011 when PIXELearning (PIXEL) was acquired.  

I am pleased to report that the changes initiated in the first six months of 2010 have enabled the Company to show a profit for the year and significant improvement across all divisions of the business. 

We continue to recruit talented people with industry experience and to improve the calibre, and quality of the executive management team and advisors supporting us.  Our results show the positive impact that this team is now having on our business.  
The implementation of our business development strategy is designed to generate significant growth organically and by acquisition and to sustain a highly profitable business model, generating shareholder value over the short, medium and long terms.
Our vision is to be a substantial player in the digital learning market-place supplying digitally published products and services to this high growth market. We will be developing this capability by leveraging the Company's existing strengths - delivering content solutions to blue chip customers in the pharmaceutical, retail and financial industries - and by opening up new markets via channel partner relationships.    
Intellego's goal is to grow significantly organically and by strategic acquisitions.
Post balance sheet events
On 28 April 2011 Intellego acquired PIXELearning Ltd. PIXEL is an established player in the use of serious gaming as a learning medium and has published several immersive simulation games on a range of topics such as Finance, Marketing and Leadership.  PIXEL sells into continental Europe and North America and has accumulated a blue chip customer base.  We will be introducing Intellego customers to take advantage of the growing gamification market.   The management and shareholders of Pixel had several options open to them but decided to join Intellego as equity partners with a shared vision for the future.

At the time of the acquisition Andy Hasoon joined the Board of Intellego bringing his twenty years experience in the learning industry.  Andy has built and managed three digital learning companies, which were sold successfully.

The CVA for Intellego Holdings plc was completed on 6 June 2011 satisfying all the pre-CVA liabilities for Intellego Holdings plc.  The original trading subsidiary, Intellego Group Limited, which has no prospect of maintaining its CVA payments from its own business, will be wound up. The result of the winding up is expected to reduce external liabilities by £623,000.  This would have created positive net assets in the group at the year-end of £247,000.

On 2 August 2011 Intellego raised additional funds of £300,000 through a placing of new shares. This funding further strengthens the Company's balance sheet, enabling it to accelerate its research & development plans and corporate merger & acquisition strategies.
Current Trading
The Board expects the Intellego business to trade in the current financial year considerably ahead of last year.  The sales force is currently concentrating on converting several major sales opportunities.
We continue to recruit commercial and experienced people to develop our published content business.  We are upgrading existing products. and focusing our efforts on products which generate the highest margin revenues.  
New channels to market are being developed, through joint venture partnerships, strategic alliances and off-shore distribution arrangements.
The team will focus on both licensing premier quality, scalable products and signing distributors capable of selling actively into target markets.

Firstly, I would like to thank all our shareholders for their support during the year and to acknowledge the contribution of all our employees to the business.

We have made significant changes and without their support we would not have made the positive progress that we have so far.
We look forward to our Company making further significant steps over the next eight months and beyond.  We are setting in place the foundations on which we can become a substantial player in the digital learning market-place.

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