1 September 2016
STILO INTERNATIONAL PLC
Stilo International plc (“Stilo” or the “Company”), the AIM quoted provider of XML cloud content conversion, content processing and authoring tools, today announces its unaudited Interim Results for the six months period ended 30 June 2016.
FINANCIAL PERFORMANCE
- Sales revenues for six months to 30 June 2016 increase by 11% to £874,000
(2015: £784,000) - Increase in EBITDA* by 11% to £184,000
(2015: £166,000) - Operating costs, net of capitalised development costs, £691,000
(2015: £617,000) - Cash position increased by 30% to £1,393,000 as at 30 June 2016
(2015: £1,072,000) - Payment of an increased interim dividend of 0.04 pence per share
(2015: 0.03 pence per share)
* EBITDA comprises profit before taxation, interest, depreciation and the amortisation of software development costs.
BUSINESS HIGHLIGHTS
- Increase in OmniMark revenues offset by reduction in Migrate sales
- Migrate customers for the period include Dell, Locamation, Informatica, Teradata, Qualcomm and Silicon Labs
- Significant OmniMark software orders received from Toshiba Solutions (Japan) and the European Parliament
- Recurring OmniMark maintenance revenues increase by 7%
- Successful initial deployment of AuthorBridge by central Information Developer Tools team at IBM
David Ashman, Chairman, commenting on the Company’s performance, stated:
Our trading results for the first half of 2016 showed an overall improvement over the previous year, as an increase in OmniMark sales was offset by a reduction in Migrate revenues.
It was very pleasing to see the successful initial deployment of AuthorBridge in a production environment at IBM during June 2016. It represents a significant milestone for Stilo and serves as a very influential reference account for future sales into the XML DITA authoring tools market.
The Company remains un-geared, and with a continued improvement in our cash position, growth in both revenue and profits, and continued advances in the development of our technology, I am pleased to announce the declaration of an increased interim dividend of 0.04 pence per share.
Download a PDF of the 2016 Interim Results, including the Group Income Statement
BUSINESS REVIEW
Large organisations need to process ever increasing amounts of digital content and publish information to multiple media channels including print, web, CD-ROM, smartphones, ebook readers and mobile devices.
These organisations often need to author and publish content in multiple languages, and re-use that content in many different ways, across different publications and document types. Innovative web applications dynamically assemble and deliver content to users that is tailored to their individual purchasing requirements, reading preferences or personal interests.
The content management systems that support such digital publishing applications typically necessitate that content is stored and processed in a ‘neutral’ XML (Extensible Markup Language) format prior to publication.
The business opportunity for XML content conversion technology and services is global and growing, and it is Stilo’s strategic objective to be a leading supplier to this market sector. Our tools are used by commercial publishers, technology companies and government agencies, and include organisations involved in the production and maintenance of technical documentation.
Products and Customers
Stilo’s core technology is OmniMark, a leading content processing platform used by customers over many years to develop high-performance, content processing solutions that support large scale publishing applications. Users include Boeing, Pratt and Whitney, EADS, Thomson Publishing, and Wolters Kluwer. Sales for the period included orders from the European Parliament and Toshiba Solutions (Japan).
Over recent years, the Company has made a significant investment in the development of Migrate, the world’s first cloud XML content conversion service, based upon OmniMark technology. Through advanced levels of automation, it enables our customers to improve turnaround times, reduce operating costs and take direct control of their conversion processes, providing them with an attractive alternative to traditional in-house or outsourced conversion services.
Migrate customers include IBM, Qualcomm, Cisco Systems, Oracle and Micron Technology. New customers in 2016 include Dell, Locamation, Informatica, Harmonic and Silicon Labs. In order to diversify beyond the XML DITA market, we have recently undertaken research into the XML JATS (Journal Article Tag Suite) market for scientific and scholarly publishers. Initial indications are that this could represent a promising new business opportunity for Stilo, and we will seek to address this through the incremental development of Migrate.
Development of AuthorBridge, our new web-based XML DITA authoring tool, is progressing well, albeit with some slippage against original schedules. Its initial deployment in production at IBM, following extensive co-operation and testing by the central Information Developer Tools team, serves as a good foundation upon which we can build. The ongoing development of AuthorBridge continues unabated, as we add functionality that is necessary to advance sales more generally in 2017.
OPERATIONS
At 30 June 2016, Stilo employed 17 permanent staff, based in the UK and in Canada. We plan to make further investments in the recruitment of additional personnel and contractors to assist with AuthorBridge developments, but otherwise we do not anticipate expanding the headcount significantly in the near future.
FINANCIAL PERFORMANCE
EBITDA for the first six months of the year increased to £184,000 (2015: £166,000), and pre-tax profits were £181,000 (2015: £161,000).
Total sales revenue for the period increased by 11% compared to the same period last year to £874,000 (2015: £784,000), with an uplift in OmniMark sales being offset by a reduction in Migrate revenues. Recurring revenues generated from software maintenance contracts increased to £383,000 (2015: £358,000)
The Board continues to maintain careful control over operating costs, although investment in additional development meant that costs rose in the period to £691,000, net of capitalised development expenditure (2015: £617,000). Total development expenditure, including capitalised costs, was £259,000 (2015: £216,000).
Staff costs and other expenditure which were directly attributable to the development of AuthorBridge in the period were £83,000 (2015: £77,000) and these costs have been capitalised and recognised as an intangible asset.
The Company continues to further strengthen its balance sheet, and remains entirely un-geared with a cash balance increased to £1,393,000 as at 30 June 2016 (31 December 2015: £1,318,000, 30 June 2015: £1,072,000).
The results for the period ended 30 June 2016 have been prepared in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted by the European Union.
DIVIDENDS
During the period, the final dividend for the year ended 31 December 2015 was paid, of 0.05 pence per share.
The Board is pleased to declare the payment of an Interim dividend for the year ended 31 December 2016 to shareholders of 0.04 pence per share (2015: 0.03 pence per share), an increase of 33%, which will be paid on 24 October 2016 to those shareholders on the register as at 23 September 2016 (the Record date). The shares will be marked ex-dividend on 22 September 2016.
The Board’s policy is to maintain the payment of a steady and progressive dividend, well-covered and paid subject to maintaining sufficient funds within the business with regard to prudent forecasts of future capital requirements, without the need for debt funding.
OUTLOOK
The global market for dynamically publishing digital content to multiple channels continues to grow, which in turn drives the market for XML content conversion and authoring tools.
Trading in 2016 continues in line with management expectations overall, with a reduction in Migrate sales being offset by an increase in OmniMark revenues. We continue to invest in the development of innovative new products that will serve to underpin our future growth.
ENQUIRIES
Stilo International plc
Les Burnham, Chief Executive
T +44 1793 441 444
SPARK Advisory Partners Limited (Nominated Adviser)
Neil Baldwin T +44 203 368 3554
Mark Brady T +44 203 368 3551
SI Capital (Broker)
Andy Thacker
Nick Emerson
T +44 1483 413500