6pm Holdings plc - Interim Results Review

6pm Holdings plc published its interim results to 30 June 2008 following a Board of Directors’ meeting held on 26 August.

The Directors did not recommend the payment of an interim dividend.

The 2008 interim results of 6pm Holdings plc cannot be compared to the half-year results of 2007 since the holding company was set up in July 2007 and previously operated independently as 6pm Limited (Malta) and 6pm Management Consultancy (UK) Limited. The pro forma historical financial information was not provided for the first half of 2007 to enable us to analyse the performance from one period to the next.

During the first half of 2008, 6pm generated a turnover of £2.6 million.  Revenue from its ‘resourcing’ clients, including CapGemini, totalled £1.1 million representing 43% of total income. The other revenue streams emanated from the UK Health Sector (£959,874), development and other income (£285,400) and EDMS (£258,300). As foreseen by the Company’s Directors market trends moved towards business intelligence resulting in declining revenues from ‘resourcing’ when compared to the July to December 2007 period. In response to this the Group, as stated in its 2007 annual report, repositioned its strategy towards business intelligence and targeted higher margin business. In this respect the Company managed to attract new business from the UK Health Sector and through EDMS with income from these two sectors representing 46% of the turnover registered in the first half of 2008 highlighting the importance of the Company’s refocus of its business. Furthermore the Group continued to reduce its dependency on CapGemini which declined to 19.4% of revenue in the first half of 2008 from the 50% level as at December 2007 and from 77% in 2006.

After deducting £1.5 million in cost of sales, the Group registered a gross profit of £1.2 million representing a gross profit margin of 45.2%. Administrative expenses amounted to £1.1 million. 6pm registered an earnings before interest, tax, depreciation and amortisation (EBITDA) of £150,956. Depreciation amounted to £43,511, resulting in an operating profit of £0.1 million with an operating profit margin of 4.06%. The Group incurred £17,026 in finance costs resulting in a pre-tax profit of £90,418. After accounting for taxation of £9,369, 6pm registered a profit for the first half of the year of £99,787, substantially lower than the profit registered in the first 5 months of the Company’s operations, between July and December 2007 of £314,265.

Total assets as at 30 June 2008 amounted to £4.97 million with shareholders’ funds at £1.89 million. Based on the total number of shares in issue of 7,500,000, 6pm’s net asset value per share is of £0.252. The annualised post-tax return on equity (profit after tax dividend by shareholders’ funds) is of 10.55% with annualised return on assets (pre-tax profit divided by total assets) of 3.63%. The Group’s net debt stands at £2.2 million representing a gearing ratio of 114.1%.

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