Interim Results for the six months ended 31 March 2007

India Outsourcing Services plc (AIM: IOS), a company formed to capitalise on acquisition and investment opportunities primarily in the business process outsourcing (BPO) market, is pleased to announce its interim results for the six months to 31 March 2007.

 

 

Highlights

 

·         The Company continues to evaluate potential acquisitions, both within and outside of the BPO market, and is currently carrying out due diligence on two potential transactions

 

·         The rising valuations of BPO companies in India, as reported in our full year results, has prompted the Company to broaden its investment search geographically and also to include sectors outside of the BPO market

 

·         Strong balance sheet – net cash of £2.62 million at 31 March 2007, equivalent to 27.9p per share

 

·         Reduced net loss in the period of £127,977 (H1 2006: net loss ££213,808) and loss per share of 1.35p (H1 2006: 7.33p)

 

 

 

Amit Pau, Chief Executive of India Outsourcing Services, said: “Following the rise in valuations of BPO companies in India, we have broadened our investment search to include geographies outside of India and investment opportunities outside of the BPO sector. In consultation with our key investors, we are now moving forward with two potential acquisition opportunities, and  we hope to be in a position to announce further details in respect of one of these in the coming weeks.”

 

 

 

For further information:

 

India Outsourcing Services plc

Tel: 020 7297 0010

Haresh Kanabar, Chairman

 

Amit Pau, Chief Executive

 

 

Teather & Greenwood

Tel: 020 7426 9000

Mark Dickenson           

 

Sindre Ottesen

 

 

Buchanan Communications

Tel: 020 7466 5000

Mark Court

 

 

 

 

 

 

 

 

CHAIRMAN’S STATEMENT

 

 

 

I am pleased to report that, for the six months ended 31March 2007,  we have substantially reduced our post-tax loss to £127,977  compared with the post-tax loss of £213,808 incurred in the corresponding six month period last year. The loss per share has also been significantly reduced, to 1.35p in the period under review compared with a loss per share of 7.33p in the six month period last year.

 

The reduction in losses is a result of very careful cost control at the Company, even though there has been a significant level of activity during the period under review.

 

Our balance sheet remains strong with net cash at the balance sheet date of 31 March 2007 of £2.62 million (H1 2006: £3.42m). This half-year cash balance is equivalent to 27.9 pence per share, representing a very significant premium to the Company’s share price during the period and into the current half.

 

As we indicated in our annual report the business process outsourcing (BPO) market continues to grow strongly but that in India the valuation expectations of vendors were quite high. Valuations of BPO companies in India are continuing at a level where the creation of value from an acquisition is difficult to deliver. 

 

As a result the Board, in consultation with its key shareholders, has decided to widen its search for potential acquisitions and investments to ensure that any transaction that we do carry out will create value for our shareholders.

 

During the period we have looked at various potential projects both in India and elsewhere, within and outside the BPO sector. Most of the initial due diligence on these projects has been carried out in-house, thereby minimising external professional and other costs. After a systematic and detailed review of these potential projects, some of them have failed to meet our criteria and hence we will not be proceeding further with these projects.

 

However, we have been encouraged by some of the potential transactions that we have seen.  In particular we are continuing to carry out due diligence work on two transactions, both of which look promising. Our current expectation, assuming the successful completion of the on-going due diligence, is that we will be able to announce further details on at least one of these opportunities in the next few weeks. We look forward to updating shareholders on progress as appropriate.

 

 

 

 

Outlook

 

India Outsourcing benefits from a strong cash position and an encouraging pipeline of potential deals, which allows us to look forward to the future with confidence. By broadening our investment search into new geographies and sector, we are confident that we will be able to deliver a transaction that will create value for our shareholders.

 

 

 

 

 

Haresh Kanabar

Chairman

26 June 2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

India Outsourcing Services Plc

 

Profit and loss account for the period ended 31 March 2007

 

 

 

6 months ended

6 months ended

Year ended

 

31 March 2007

31 March 2006

30 September 2006

 

(unaudited)

(unaudited)

(audited)

 

£

£

£

 

 

 

 

Administrative expenses

196,241

226,888

960,459

 

 

 

 

 

 

 

 

Operating Loss

(196,241)

(226,888)

(960,459)

 

 

 

 

Net Interest receivable

68,264

13,080

84,904

 

 

 

 

 

 

 

 

Loss on ordinary activities before taxation

(127,977)

(213,808)

(875,555)

 

 

 

 

Tax on loss on ordinary activities

 

-

-

 

 

 

 

 

 

 

 

Loss on ordinary activities after taxation

(127,977)

(213,808)

(875,555)

 

 

 

 

Loss per share- basic and diluted

(1.35p)

(7.33p)

(14.1p)

 

 

 

 

 

All amounts relate to continuing activities.

All recognised gains and losses for the period have been included in the profit and loss account.

 

 

 

 

 

India Outsourcing Services Plc

 

Balance sheet at 31 March 2007

 

 

 

 

6 months ended

6 months ended

Year ended

 

31 March 2007

31 March 2006

30 September 2006

 

(unaudited)

(unaudited)

(audited)

 

£

£

£

 

 

 

 

Fixed assets

 

 

 

Tangible assets

15

2,609

1,141

 

 

 

 

Current assets

 

 

 

Debtors

27,921

44,777

24,404

Cash at bank and in hand

2,624,866

3,373,237

2,800,000

 

2,652787

3,418,014

2,824,404

 

 

 

 

Creditors falling due within one year

(142,011)

(111,843)

(186,777)

 

 

 

 

 

 

 

 

Net current assets

2,510,776

3,306,171

2,637,627

 

 

 

 

Net assets

2,510,791

3,308,780

2,638,768

 

 

 

 

 

 

 

 

Capital and reserves

 

 

 

Called up share capital

947,917

947,917

947,917

Share premium account

2,999,775

2,999,040

2,990,775

Profit and loss account

(1,427,901)

(638,177)

(1,299,924)

 

 

 

 

Shareholders' funds

2,510,791

3,308,780

2,638,768

 

 

India Outsourcing Services Plc

 

Cash flow statement for the period ended 31 March 2007

 

 

 

6 months ended

6 months ended

Year ended

 

31 March 2007

31 March 2006

30 September 2006

 

(unaudited)

(unaudited)

(audited)

 

£

£

£

 

 

 

 

Net cash outflow from operating activities

(206,253)

(259,330)

(933,272)

 

 

 

 

Returns on investments and servicing

of finance

 

 

 

Interest received

68,264

13,080

84,904

 

 

 

 

 

 

 

 

Net cash inflow from returns on investments and servicing of finance

68,264

13,080

84,904

 

 

 

 

 

 

 

 

Capital expenditure

 

 

 

Purchase of tangible fixed assets

-

-

-

 

 

 

 

Net cash outflow for capital expenditure

 

 

 

 

 

 

 

Net cash outflow before financing

(137,989)

(246,250)

(848,368)

 

 

 

 

 

 

 

 

Financing

 

 

 

 

Issue of ordinary shares

 

3,500,000

3,500,000

Expenses paid in connection with share issues

 

(240,308)

(248,572)

 

 

 

 

Cash inflow from financing

 

3,259,692

3,251,428

 

 

 

 

 

 

 

 

Increase (decrease) in net cash

(137,989)

3,013,442

2,403,060

 

 

 

 

 

 

 

 

 

India Outsourcing Services Plc

 

Notes to the Interim Report

 

1. Basis of preparation

 

The interim accounts for the six months ended 31 March 2007 are unaudited and do not constitute statutory accounts in accordance with section 240 of the Companies Act 1985.

 

The financial statements have been prepared in accordance with currently applicable Accounting Standards in the United Kingdom, which have been applied consistently, and under the historical cost convention.

 

Accounting policies consistent with those applied in the financial statements for the year ended 30 September 2006 have been used in preparing the unaudited interim financial statements for the 6 months ended March 2007.

 

2. Taxation

 

There is no tax charge for the period due to the loss arising.

 

3. Dividends

 

The Directors are not declaring a dividend for the six months ended 31 March 2007.

 

4. Loss per ordinary share

 

The calculation of basic and diluted loss per share of 1.35 (2006 – 7.33) pence is based on the loss for the period of £127,977 (2006 - £213,808 and on 9,479,167 (2006 -2,915,064) ordinary shares, being the weighted average number of ordinary shares in issue during the period ended 31 March 2007.

The effect of all potential ordinary shares is antidilutive and therefore dilutive EPS is the same as basic EPS.

 

5. Copies of interim results

 

Copies of the interim results are available from the Company’s office, 22 Soho Square, London W1D 4NS, and from the Company’s website.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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