FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of September, 2003
COMMISSION FILE NUMBER 0-31082
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VI GROUP PLC
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(Translation of registrant's name into English)
THE MILL, BRIMSCOMBE PORT, STROUD, GLOUCESTERSHIRE GL-52QG, U.K.
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
-
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ____
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- ________
EXPLANATORY NOTE
PURPOSE OF FILING
The purpose of this report on Form 6-K by VI Group plc (the "Registrant") is to
report: (i) the issuance of a press release announcing the appointment of Julie
Langhorne Randall as the Finance Director of the Registrant; and (ii) the
interim financial report of Registrant for the six months ended June 30, 2002.
The unaudited financial statements included therein have been prepared in
accordance with United States generally accepted accounting principles ("US
GAAP") and are presented in US dollars. The Company has released interim
results to the London Stock Exchange which have been prepared in accordance with
United Kingdom generally accepted accounting principles ("UK GAAP") which are
presented in pounds sterling. The UK GAAP interim results have been distributed
to shareholders.
Copies of the aforesaid releases are reproduced herein as follows:
[Monday, 8th September 2003]
VI GROUP PLC
BOARD APPOINTMENT
VI Group plc ("VI"), one of the leading software providers to the mould and die
industry, announced today that Mrs Julie Langhorne Randall (n e Norton), 41, has
been appointed Finance Director with immediate effect. She was previously
Group Financial Controller at VI.
Julie Randall graduated from Sussex University before qualifying as a Chartered
Accountant in 1988. She held a number of senior accounting positions in both
private and public companies in the manufacturing and financial services sectors
before joining VI in June 2002.
There is no additional information that falls to be disclosed under Schedule Two
paragraph (f) of the AIM rules.
Don Babbs Chief Executive of VI, commented:
"Julie has considerable accounting and management experience and has made a
substantial difference to our ability to provide group wide accounting
facilities in a rapidly expanding environment. I have no doubt she will be
equally determined and successful in increasing the awareness of VI's growth
performance."
- End -
FOR FURTHER INFORMATION PLEASE CONTACT:
VI GROUP PLC
Don Babbs, Chief Executive Tel: 01453 732 900
MERLIN FINANCIAL
Paul Downes/Tom Randell Tel: 020 7606 1244
Press Release
15 SEPTEMBER 2003
VI GROUP PLC.
(AIM (VIG) AND AMEX (GVI))
INTERIM RESULTS FOR THE SIX MONTH PERIOD TO JUNE 30TH 2003
VI Group plc ("VI" or "the Group"), one of the leading suppliers of CAD/CAM
software to the mold and die sector, announces today its results for the six
months to 30 June 2003.
Highlights
- Revenue growth of 53% to $7.0 million (2002: $4.6 million) reflecting both
organic growth and increased turnover resulting from past acquisitions.
- Market share increased, with sales performance far outstripping VI's direct
competitors who returned negative or single figure sales growth over the
period.
- Gross Margin increased to $5.4m (2002: $3.5m) and as a percentage of
turnover it rose to 77% (2002: 75%)
- A $0.6m increase in earnings before interest, tax, depreciation and
amortization (EBITDA) to $0.3 million (2002: Loss before interest, tax,
depreciation and amortization of $0.3 million).
- Loss on ordinary activities after taxation of $0.2 million (2002: Loss of
$0.3 million) after amortization of intellectual property charges of $0.15m
associated with the acquisitions are taken into account
- New Tokyo office opened in April responding to increased demand in the
region for VI mold and die design products
Commenting on the interim results, Don Babbs, Chief Executive of VI, said:
"We have put the proceeds of our fundraising of 2002 to good use, producing
excellent sales growth through the first half of the year which was ahead of our
own expectations, despite the general background of poor economic conditions in
our major markets. The new sales and development teams have integrated well into
a VI structure, successfully capitalizing on our investment in product
development and sales channels. Our continued success in what is the harshest
economic environment for more than a decade in the mold and die industry
underlines the strength of the Group."
- Ends -
For further information:
Don Babbs, Chief Executive Tel: +44-1453 732 900
VI Group plc
Elliot Miller, Vice Chairman Tel: 203-255-4646
VI Group plc
Attached: Chairman's Statement
Unaudited consolidated balance sheet
Unaudited consolidated statements of operations
Notes to the interim results
CHAIRMAN'S STATEMENT
I am pleased to announce the Group's interim results for the six months to 30
June 2003 and report on the strategy of the group to date.
As I reported last year we believed that the injection of finance of May 2002
could be readily converted into strengthened sales over the following twelve
months. This has indeed been our experience in spite of a background of poor
economic indicators including the effect of the SARS outbreak that prevented any
expansion in China, a stronger Euro that reduced many of our customer's
manufacturing orders across Europe, and uncertainties surrounding the recovery
of worldwide demand generally. Our competitors have leaned heavily on these
factors when reporting their results recently and have generally reported low
levels of growth often resulting only from currency exchange rate effects. This
compares with 33% revenue achieved by VI Group measured at constant exchange
rates. Encouragingly VI has recently been reported by CIMdata of the USA as the
only supplier included in the top five fastest growing CAM vendors for each of
the past 5 years.
Trading conditions in our key markets have continued to be difficult and
corporate expenditure decisions are still often delayed; however the
productivity increases offered by VI products outweigh these factors for many of
our customers.
FINANCIAL RESULTS
Group revenues for the six month period increased by 53% to $7.0 million (2002:
$4.6 million). Earnings before interest, tax, depreciation and amortization
(EBITDA) rose to $0.3m (2002: loss of $0.3m). The loss on ordinary activities
before taxation was $0.08 million (2002: loss of $0.44m) after a charge of
$0.15m for amortization of intellectual property in relation to the acquisitions
is taken into account. The loss on ordinary activities after taxation was $0.19
million (2002: loss of $0.31m). The resulting basic and diluted loss per share
was 0.5 cents (2002: loss per share of 1.2 cents).
Cash balances were $2.5 million at 30 June 2003 (31 December 2002: $1.9m).
Accounts receivable fell slightly to $6.3m (31st December $6.7m) and the
underlying trade debtors also fell despite the steep increase in sales revenues.
This is in part due to the particular attention shown to financing sales in
geographic areas such as Italy where extended payment terms are the standard.
TRADING
Nearly all of the sales areas reported first half growth with the stronger
percentage growths coming from the areas where we have invested in new offices
namely France, Japan and Canada. UK sales doubled with respect to last year
helped by the Machining Strategist acquisition and the smaller and emerging
markets also grew strongly following internal investments in indirect sales. Our
largest markets of Germany and Italy grew by nearly 10% but exchange rate
changes damaged the prospects for exports from the Euro zone and remain a
concern for the second half. North America continued to grow with respect to the
same period of last year against a background of slow recovery and a depressed
automotive sector.
Other Business Developments
We opened our Tokyo office in April which assumed technical and commercial
responsibility for the Japanese dealers that had previously been supplied by an
exclusive distributor since 1994. The staff are already familiar with the VI
products and sales channels and will promote sales within the region more
aggressively, having contributed positively to the first half result.
All of our recent acquisitions have now been successfully integrated within the
VI structure and are collectively producing position returns to the business.
The litigation detailed as a contingent liability in the 2002 annual report
arising from the Machining Strategist acquisition is ongoing and VI has, through
it's legal advisors, filed a counterclaim for damages against NCG. VI is
committed to resolving the litigation as quickly and as cost effectively as
possible.
As recently announced I would like to welcome Julie Randall to the position of
group finance director. The decision to promote Julie internally from her
position as group financial controller was taken after an extensive review of
alternative candidates and a gradual increase in her responsibilities which she
has taken in her stride. She is ably supported by a similarly qualified
controller and other suitably qualified staff that will be a formidable
accounting and finance team for our future growth.
PRODUCT DEVELOPMENT
With competitors falling to the general market malaise VI has gained
considerable market share over the period and intends to intensify this assault
with further extensions and improvements to its product lines in the second half
of the year. The introduction of Release 11 of VISI-Series and Release 6 of
Machining Strategist in the near future will add hundreds of new feature to the
product lines and provide further productivity gains for existing users,
generating new prospects customers looking to convert from older solutions.
OUTLOOK
VI will strive for continued growth by virtue of its recent investments in sales
and product development teams. Managing this growth to provide consistent
earnings is a particular challenge in an uncertain economic climate. VI remains
convinced of its twin strategy to grow organically and through acquisition. The
first objective will be aided by a broadening product base and the Group has
commenced a number of innovative research programs to carry it into the next
decade. VI continues to evaluate acquisition possibilities that add product or
distribution synergies in its major markets and the current conditions are
providing a number of opportunities at attractive valuations.
Stephen Palframan
Chairman
15 September 2003
This Release contains forward-looking statements relating to the Company's
operations that are based on management's current expectations, estimates and
projections about the CAD/CAM software business in the mechanical engineering
sector. Words such as "anticipates", "expects", "intends", "plans", "targets",
"believes", "seeks", "estimates", and similar expressions are intended to
identify such forward-looking statements. These statements are not statements
of fact or guarantees of future performance and are subject to certain risks,
uncertainties and other factors, some of which are beyond our control and are
difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such forward-looking
statements. You should not place undue reliance on these forward-looking
statements, which speak only as of the date of this Release. Unless legally
required, the Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
VI Group plc
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2003 AND DECEMBER 31, 2002
($ AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
June 30, 2003 December 31, 2002
(Un-audited) (Audited)
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ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,502 $ 1,907
Accounts receivable 6,317 6,673
Inventory 36 32
Prepaid expenses and other assets 2,925 2,343
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TOTAL CURRENT ASSETS 11,780 10,955
Property, plant and equipment, net 921 1,024
Accounts and notes receivable 42 118
Goodwill 1925 1,864
Software licenses 1322 1,352
Other intangible assets 26 69
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TOTAL ASSETS $ 16,016 $ 15,382
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Bank overdraft and other short term debt $ 215 $ 758
Current portion of long term debt 107 122
Accounts payable 863 923
Accrued liabilities 2,508 2,506
Debenture loan 1,000 -
Income taxes 530 396
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TOTAL CURRENT LIABILITIES 5,223 4,705
Capital lease obligations 230 223
Bank and Mortgage loans 13 13
Accrued liabilities 398 389
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TOTAL LIABILITIES 5,864 5,330
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SHAREHOLDERS' EQUITY
Common stock 292 292
Additional paid in capital 8,922 8,922
Retained earnings 459 646
Accumulated other comprehensive income 479 192
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SHAREHOLDERS' EQUITY 10,152 10,052
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 16,016 $ 15,382
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VI GROUP PLC
UN-AUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2002
($ AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
2003 2002
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NET REVENUE
Product revenue $ 4,214 $ 3,117
Service revenue 2,805 1,483
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TOTAL NET REVENUE 7,019 4,600
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COST OF REVENUE
Cost of product (894) (719)
Cost of service (711) (409)
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TOTAL COST OF REVENUE (1,605) (1,128)
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GROSS PROFIT 5,414 3,472
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OPERATING EXPENSES
Selling expenses (2,522) (1,818)
General and administration (1,513) (1,162)
Product development (1,061) (772)
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TOTAL OPERATING EXPENSES EXCLUDING
DEPRECIATION AND AMORTIZATION (5,096) (3,752)
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EARNINGS (LOSS) BEFORE INTEREST, TAX,
DEPRECIATION AND AMORTIZATION (EBITDA) 318 (280)
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Depreciation (193) (136)
Amortization of intangible assets (148) (23)
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TOTAL OPERATING EXPENSES (5,437) (3,911)
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INCOME (LOSS) FROM OPERATIONS (23) (439)
OTHER EXPENSES
Net interest expense (59) (2)
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TOTAL OTHER EXPENSE (59) (2)
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INCOME (LOSS) BEFORE INCOME TAXES (82) (441)
INCOME TAX (105) 130
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NET (LOSS) $ (187) $ (311)
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(Loss) per share
- Basic (cents) (0.5)c (1.2)c
- Diluted (cents) (0.5)c (1.2)c
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Shares used in computing earnings per share (thousands)
- Basic 37,261 25,731
- Diluted 37,261 25,731
VI GROUP PLC
NOTES TO UN-AUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Interim Accounting Policy
The accompanying un-audited consolidated financial statements include all
adjustments, consisting only of normal recurring adjustments, necessary to
present fairly in accordance with accounting principles generally accepted
in the United States the financial position of the Company and the results
of operations and cash flows for the six months ended June 30, 2003 and
2002. Although the Company believes that the disclosure in these financial
statements is adequate to make the information presented not misleading,
certain information and footnote information normally included in interim
financial statements prepared in accordance with generally accepted
accounting principles has been condensed or omitted pursuant to the rules
and regulations of the Securities and Exchange Commission. Results of
operations for the six months ended June 30, 2003 and 2002 are not
necessarily indicative of what operating results may be for the full year.
In addition, these un-audited consolidated financial statements and notes
thereto should be read in conjunction with the audited consolidated
financial statements presented in our Form 20-F which has been filed with
the Securities and Exchanges Commission.
2. Debenture loan
On 10 January 2003 the company entered into a Loan and Investment Agreement
("Agreement") with Hemisphere Capital LLC, a private equity investor that
focuses on fast growing Western European ICT businesses. Under the terms of
the Agreement, Hemisphere Capital has invested approximately $1m to acquire
a convertible debenture.
The convertible debenture, which bears interest at 9% per annum, is
convertible in certain circumstances into American Depository Receipts
("ADR"s) of the company at a price of $4.5429 per ADR (1 ADR representing
20 ordinary VI shares) and will mature no later than 10 January 2006. The
convertible debenture will, subject to anti-dilution and other similar
adjustment, constitute 4,402,460 ordinary shares on conversion. The future
financing by convertible preferred equity is subject to shareholders'
approval to be sought in an Extraordinary General Meeting together with
further discretionary due diligence and approval by Hemisphere Capital.
3. The Directors do not propose any payment of a dividend.
4. Earnings per share figures have been calculated on the profit for the
period divided by the weighted average number of shares.
5. Copies of the interim report will be posted to shareholders and made
available to the public at the Company's registered office: VI Group plc,
The Mill, Brimscombe Port, Stroud, Gloucestershire GL5 2QG, or by accessing
the Company's website (www.vero-software.com).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
VI GROUP PLC
BY S/ELLIOT I. MILLER
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Elliot I. Miller
Director and Deputy Chairman
of VI Group plc
Date: September 17, 2003