World Careers Network investments lower year end profit
Charles EH Hipps, chairman of the company released the following statement.
As set out in the announcement on 20 April 2015 of the Interim Statement for the six months to 31 January trading has improved compared to the first half of the year, however, sales and profits remain below the levels achieved in 2013-14. Sales were £7.9m, 9% below those of 2013-14 (£8.6m) and profits were £1.20m compared to £2.47m achieved in 2013-14. The profit represents basic earnings per share of 12.29p (2014 - 25.25p).
The Board will be seeking at the Annual General Meeting the extension of the authority granted last year to make market purchases of ordinary shares, within the usual limits for a listed company. In assessing whether in practice to use this authority, the Board will take into account all relevant factors including the effect on earnings per share and assets per share ratios and other benefits to shareholders.
The directors are pleased to recommend the payment of a dividend of 3.5p per share, which is the same as that paid in respect of the previous year. This dividend will be subject to the approval of shareholders at the Annual General Meeting to be held at 5-7 Bridgeworks, The Crescent, London SW19 8DR at 10.30 am, on 14 December 2015, and, if approved, will be payable on 16 December 2015 to shareholders on the register as at 20 November 2015
Sales fell principally as a result of the renewal of a major contract at a significantly lower fee. New business performed relatively well, but only partly offset this fall in revenues. Increased sales in the second half of the year (£4.4m) versus the first half year (£3.5m) reflect these new contracts coming online.
At the same time we significantly increased our cost base as we made widespread investments in product development, delivery and customer support, sales and marketing and overseas expansion in order to provide a sound basis for the long term future of the business.
Principal risks and uncertainties
Competitive pressure and economic instability is a continuing risk for the company. The company manages this risk by providing leading edge products and high levels of customer service, by managing resource levels and pursuing opportunities for continuous improvement.
The business is dependent upon clients' ability to safely access data held on our servers. In order to ensure that this is not affected by a breakdown in power supplies or by other physical hazards our servers are housed offsite in secure facilities on the premises of a specialist provider of such facilities. Third party security experts are also regularly engaged to advise on data security.
WCN has long term relationships delivering significant value to our clients and a world class product. which, together with our ongoing investments, provide a good foundation for success in a highly dynamic and competitive market place.
Inevitably it will take some time for our investments to generate a meaningful return and for the coming year, we expect to see a continued and significant reduction in profitability as the full year impact of last year's cost increases and the further investments we are currently making impact upon the business.
During the year the team have continued to provide high levels of client support, to work agilely and continuously to release updated versions of our software and at the same time have successfully launched a number of large scale client projects. I would like to thank the whole team for their tireless efforts.