Northgate Information Solutions announces record results

Northgate Information Solutions plc (Northgate/the Group) announces its preliminary results for the year ended 30 April 2004.

Financial Results*:

2003/04 - m
Turnover - 136.5 (cf. 2002/03 85.2)
Operating profit - 11.6 (5.1)
Profit before tax** - 4.1 (5.7)
Adjusted basic EPS - 2.81p (1.83p)

Statutory results
(Loss)/Profit before tax: (10.1) 2003/04; 28.1 2002/03
Basic EPS: (2.96)p 2003/04; 10.45p 2002/03

* Management use results that exclude goodwill amortisation and exceptional items as the primary measure to provide a better comparison of underlying business performance. Exceptional items for 2004 include 11.2m of restructuring costs. The prior year included an exceptional profit of 28.5m relating to the sale of the healthcare business.

** Including goodwill amortisation, but excluding exceptional items

Highlights

- Good organic revenue growth has been achieved across the group: 13% in public services, 19% in HR and 6% in corporate, delivering increased market share

- Strong organic growth in EBITA: 47% in public services, 43% in HR and 20% in corporate

- Acquisitions contributed 4.5m of EBITA

- 5 acquisitions have been delivered; Northgate now has market-leading positions in human resources systems and public services

- Carapeople, blue8, Hays CSG and PWA have all successfully integrated into the Group; the integration of RebusHR is ahead of schedule and largely complete

- Northgate has a strong, high quality customer base with excellent retention rates 11.6m of EBITA produced 13.7m of cash, a conversion ratio of 118%

Commenting on the results, Chris Stone, Chief Executive of Northgate, said:

This has been a transformational year for Northgate Information Solutions and we are delighted with this set of results - the Group has seen growth from both its organic businesses and those acquired during the year and we believe we have now attained our goal of being the UK market-leading software and services provider to the Human Resources and public safety markets. The Group is now seeing the benefits of its increased scale, as it can compete for, and win, far broader contracts. The outlook is very positive for Northgate.

Nick Irens, Chairman, added:

Northgate has demonstrated that it can integrate acquisitions quickly and successfully to deliver superior growth for its shareholders. We remain confident that there are significant growth opportunities available to the company in its chosen markets.