Half year figures 2017: Ctac records continued upward trend in result. Net profit up by 15.5%
Highlights first half
- Turnover declines € 2.1 million, or 5.0%, to € 40.5 million
- Operating result came in 6.3% higher at € 1.1 million (€ 1,127,000 compared with € 1,060,000 in the year earlier period)
- Net profit up 15.5% at € 0.8 million
- Outlook adjusted slightly: Barring unforeseen exogenous circumstances and based on the volume and quality of the order portfolio, Ctac expects to record a higher full-year result for 2017 than in 2016.
Henny Hilgerdenaar, CEO van Ctac:
“The lag in turnover in the first quarter continued in the second quarter. However, the profit and profit margin increased in the first half of 2017, due to the timely adjustments we made in organisation and hiring of third parties to the lower capacity requirement.
The disappointing turnover from the consultancy activities was due to the postponement of three large-scale projects. The contracts for these projects have since been formalised. We expect to see the positive impact of these projects on our results in the third and fourth quarters. In response to specific requests from the market, Ctac has also made innovative investments in products (or templates) that are applicable in the retail and real estate sectors.
The cloud and resourcing activities (turnover and result) continued to grow steadily. We expect this trend to continue in the second half of 2017.
In Belgium, we saw turnover decline slightly to € 7.0 million in the first half of 2017, from € 7.2 million in the first half of 2016. The result was modestly positive, but we see room for improvement on this front. We have taken action to improve results in the second half of 2017.
With respect to Ctac France, we are working to realise a structural solution. In the first half of 2017, it proved impossible to raise the margin on resourcing and licensing activities and by doing so exceed the fixed overhead.
Based on the volume and quality of the order portfolio, Ctac expects to get back on track in the second half of the year, with the effect that the result in this period will be considerably higher than the result recorded in the second half of 2016."
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Turnover and gross margin
Turnover declined by 5.0% or € 2.1 million to € 40.5 million in the first half of 2017, from € 42.6 million in the first half of 2016.
Turnover per division and per segment
(in € million)
|Ctac Cloud Services
|Other activities /eliminations
Thanks to the adequate reduction of third-party hiring in response to the lower turnover in the consultancy business, Ctac was able to limit the decline in the gross margin to € 0.2 million, resulting in a gross margin of € 28.3 million in the first half of 2017.
The operating expenses declined to € 27.1 million in the first half of 2017, down € 0.3 million or 1.0% from € 27.4 million a year earlier. Personnel costs fell by € 0.1 million to € 19.6 million, from €19.7 million in the first half of 2016. Other operating costs were down € 0.1 million at €7.0 million, from € 7.1 million.
The operating result rose to €1.1 million in the first half of 2017 (€ 1,127,000 in the first half of 2017, compared with € 1,060,000 in the first half of 2016), which constitutes an increase of 6.3%.
Financial income and expenses and the tax rate were virtually unchanged on balance. As a result, net profit (attributable to group shareholders) came in at € 0.8 million (€ 843,000) compared to € 0.7 million (€ 730,000) in the first half of 2016, an increase of 15.5%.
This translates into net earnings per ordinary share of approximately € 0.07, based on the weighted average number of 12,655,648 outstanding ordinary shares.
The balance sheet total had increased by € 1.0 million to € 40.8 million at 30 June 2017, from €39.8 million at 31 December 2017, due to a modest increase in working capital.
Net bank debt had increased to € 6.0 million to € 4.3 million at 30 June 2017, from € 1.7 million at 31 December 2016. The seasonal increase was due to the payment of holiday pay, bonuses, dividend and earn-out obligations in the second quarter.
Earn-out obligations had declined to € 0.8 million at 30 June 2017, from € 1.1 million at 31 December 2016.
The solvency ratio improved to 39.0%, compared with 38.8% at year-end 2016.
An (optional) dividend of € 0.07 per share was made available for the financial year 2016. A total of € 364,000 in cash was eventually paid out to shareholders and the share capital increased by 141,151 shares to a total of 12,655,648 shares.
Net cash flow came in at minus € 4.3 million in the first half of 2017, compared with minus € 2.6 million in the first half of 2016, as a result of regular seasonal patterns (holiday pay and bonus payments in May), dividend and paid earn-out obligations. Ctac expects net cash flow for the full year 2017 to be positive.
As a Business & Cloud Integrator, Ctac helps customers realise their ambitions. Ctac creates the required business value through constant innovation. Ctac has a broad portfolio with solutions from SAP and Microsoft on any cloud and provides services in the fields of consultancy, managed services, projects, learning and secondment. Ctac also has a number of its own products, including the XV Retail Suite, which consists of an omni-channel-driven Point-of-Sale & Loyalty platform. Ctac celebrates its 25th anniversary in 2017 and over the past 25 years has built up extensive experience and material know-how in the retail, wholesale, manufacturing and real estate sectors.
The organisation has a balanced workforce in terms of age, expertise and experience. Working together to realised common goals is a high priority for the company.
Ctac is listed on the Euronext Amsterdam stock exchange (ticker: CTAC) and its head office is located in ’s-Hertogenbosch, the Netherlands. As per end of March 2017 Ctac had 452 employees. Ctac is also active in Belgium and France. For more information: www.ctac.nl.
For more information:
5216 TZ ‘s-Hertogenbosch
5201 AT ’s-Hertogenbosch
Henny Hilgerdenaar – CEO
Douwe van der Werf – CFO
T. +31 (0)73 - 692 06 92
Condensed consolidated profit & loss account
Condensed consolidated balance sheet
Condensed consolidated cash flow statement (1st half)
Condensed consolidated statement of changes in equity
Segmented results per country
Segmented results per product group
Notes to the consolidated half year report
NOTES TO THE CONSOLIDATED HALF YEAR REPORT
General information about Ctac
Ctac N.V. is a limited company, established and situated in the Netherlands, with its head offices and statutory seat at Meerendonk 11 5216 TZ in 's Hertogenbosch (the Netherlands). The consolidated first-half year report comprises the company and all its subsidiaries (together referred to as "Ctac").
The group financial year follows the calendar year. The consolidated half year results for the first 6 months, ending 30 June 2016, were approved for publication by both the Executive Board and the Supervisory Board on 7 August 2017.
Statement of compliance
This consolidated half year report regarding the first 6 months of the year, ending 30 June 2017, was prepared in line with IAS 34 "Interim financial reporting" and does not comprise all information and explanatory notes required for drawing up full annual accounts. The consolidated half year report should be viewed in combination with the consolidated annual accounts for 2015, which were drawn up in accordance with IFRS as accepted within the European Union.
Accounting principles (condensed)
The accounting principles for financial reporting as applied in this half year report and the calculation methods used are the same as those in the consolidated accounts for the 2016 financial year.
The impact of the difference in numbers of working days between the quarters, means that the company's activities have a slightly seasonal character, which is mainly reflected in turnover from consultancy activities.
Ctac conducts an impairment test once a year in February. The realized results over the first half year and the expectations for the development of results do not give cause for a second impairment test within the year.
Ctac identifies various financial risks, such as market risk, credit risk and liquidity risk. The general risk management within Ctac, steered from the Executive Board, extends further to a broader field than financial risks. For a more detailed explanation of this subject, see the risk section of the 2016 annual accounts. Risk management focuses on identifying and cataloguing the most significant risks and the management of same on the basis of guidelines, procedures, systems, best practises, checks and audits.
The most important current risk is the impact of the general economic economy climate on opportunities and the willingness of our (potential) clients to invest in their IT environment. In this respect, a lot of attention is devoted to limiting the risk related to non-collectable receivables.
Parties related to Ctac include the group companies, the members of the Supervisory Board and the members of the Executive Board. Transactions with related parties are conducted on a professional basis.
"Forward looking statement"
The half year report contains information, as required by articles 5:59 in juxtaposition with 5:53, 5:25d and 5:25w of the Act on Financial Supervision (Wet op Financieel Toezicht). Forward looking statements, which could form a part of this report refer to future events and can be expressed in a variety of ways.
Ctac has based these forward looking statements on its current expectations and projections with respect to future events. Ctac's expectations and projections could change and Ctac's actual results could differ from the results indicated or implied by these forward looking statements, as a result of the potential risks and uncertainties and other significant factors which Ctac can neither control, nor predict, and certain risks and uncertainties outside Ctac's sphere of influence.
Due to these uncertainties, Ctac cannot with any certainty predict its future results and/or financial position.
Statement by the Executive Board
The Executive Board of Ctac declares, in accordance with the requirements of article 5:25d of the Act on Financial Supervision, that to the best of its knowledge:
'the consolidated half year report gives a true picture of the assets, liabilities and the financial position as per 30 June 2017 and of the result of our consolidated activities in the first half of 2017 and those of the businesses included in the consolidation'; and 'that the consolidated half year report gives a true picture of the financial position as per 30 June 2017, of the course of events in the first half of 2017 within the company and in the businesses included in the consolidation, and of the expected risks and developments in the remaining months of 2017.
’s-Hertogenbosch (the Netherlands), 10 August 2017
Henny Hilgerdenaar - CEO
Douwe van der Werf - CFO