A BUSINESS TRANSFORMED May 2006 1 Financial Highlights ▬ ▬ ▬ ▬ ▬ Turnover up 76% to £6.91m (2005: £3.92m) Operating profit up 30% to £1.00m (2005: £0.77m) Profit before tax up 20% £0.94m (2005: £0.78m) Net profit up 117% to £1.70m (2005: £0.78m) Strong organic growth of 29% from continuing operations ▬ Acquisitions: £0.53m turnover and £0.15m operating profit ▬ ▬ ▬ Strong cash generation of £0.95m Earnings per share up 64% to 16.39p (2005: 10.02p) Maiden dividend of 0.75p 2 Corporate Highlights ▬ £4.0m acquisition of Mount Lane: November 2005 ▬ £1.0m acquisition of Customer Projects: February 2006 ▬ Group reorganised into one Best Practice operating unit ▬ Growing market share • • ▬ PRINCE2 95% up. Market growth of 30% ITIL 157% up. Market growth of c.100% ILX Group unique offering: • • • computer based training, classroom based training project management implementation consultancy services 3 The ILX Group ▬ ▬ ▬ Vocational Education & Training Specialists Business transformed over past four years Five successful acquisitions since February 2004: 1. 2. 3. 4. 5. ▬ Key Skills (PRINCE2 & ITIL Computer based training) Computa-Friendly (IT Classroom training) Mindscope (PRINCE2 & ITIL classroom training) Mount Lane (Desktop migration projects) Customer Projects (Project Management consultancy) Strong organic growth ▬ 30% pa in past 2 years ▬ Now reorganised around Best Practice market 4 Key Markets Served BEST PRACTICE ▬ PRINCE2 project management industry standard: • • • • ▬ Market for training worth over £100m Growing at 25-30% p.a. Main markets UK, Europe, Asia Pacific & Australasia Classroom training currently dominates market ITIL (IT Infrastructure Library) industry standard for service management: • • • • Market for training larger globally than PRINCE2 Market virtually doubled in 2005 Major demand from Europe, North America, Asia Pacific, Australasia Classroom training still predominant 5 ILX Current Activities Best Practice • PRINCE2 & ITIL computer-based training • PRINCE2 & ITIL classroom training • Project Management implementation consultancy • Desktop Migration Projects & Helpdesk Support Finance • • Financial awareness e-learning Global demand driven by competitive pressures & regulation Bespoke Training Solutions • Built to order e-Learning & classroom training 6 ILX – Leading Clients Over 2,000 customers served in last financial year Ministry of Defence 7 ILX Group Results Year ended March 2004 Year ended March 2005 Year ended March 2006 1,606 3,924 6,913 Cost of sales (299) (957) (2,336) Gross profit 1,307 2,967 4,578 81% 76% 66% (1,336) (2,122) (3,577) (29) 725 1,001 (63) 57 (59) (92) 782 942 - - 758 (257) 782 1,699 (2.7)p 10.0p 16.4p Income Statement £000s Revenue % sales Distribution and administration costs Profit from operations Interest Profit before yax Tax Profit for the period Earnings per share (basic) (UK GAAP) (IFRS – As restated) (IFRS) 8 ILX Group Financials Balance Sheet £000s As At End March 2004 As At End March 2005 As At End March 2006 220 262 133 4,790 6,817 12,386 5,010 7,079 12,519 (UK GAAP) Tangible assets Intangible assets Fixed assets Deferred tax asset (IFRS as restated) (IFRS) - - 789 Trade and other receivables 558 1,059 2,031 Cash and cash equivalents 544 672 646 Trade and other payables (756) (674) (1,735) - (305) (237) (221) (449) (146) Deferred consideration Debt due in 1 year Net current assets Debt due after 1 year Contingent consideration Net Assets Share capital & other reserves Retained earnings Total Equity 125 303 1,348 (1,543) (921) (677) - - (270) 3,592 6,461 12,920 9,107 11,238 10,857 (5,515) (4,777) 2,063 3,592 6,461 12,920 9 ILX Group Financials Year ended March 2004 Year ended March 2005 Year ended March 2006 (298) 646 953 (63) (159) (246) (2) (28) (90) Product development - (198) (474) Sale of fixed assets - - 206 (1,759) (3) (840) 1,589 465 721 Increase in / (repayment of) borrowings 893 (595) (255) Change in cash 360 128 (25) As At End March 2004 As At End March 2005 As At End March 2006 Closing cash 544 672 646 Closing debt (1,771) (1,076) (821) (1,227) (404) (175) Cash Flow £000s Cash from operating activities Interest and tax Capital expenditure Acquisitions Net proceeds of share issues Net Debt £000s Closing net debt (UK GAAP) (IFRS as restated) (IFRS) 10 ILX Group Strategy ▬ Build market leading presence in vocational training • • ▬ ▬ ▬ High end training well defined markets Fragmented market; numerous acquisition opportunities Best Practice markets offer major potential for growth Reputation for delivery, helping to drive market share gains 11 Strategic Driver 1 - Organic Growth ▬ Keep pedal on organic growth • • • ▬ Organic Growth 30% pa over past two years PRINCE2 and ITIL market growth high and sustained Continue investing in higher growth areas Innovate to stay ahead • • • Product & proposition Thinking bigger and broader; not just another training supplier Delivery and after sales crucial to reputation and credibility 12 Strategic Driver 2 - Acquisitions ▬ Vocational Training Sector • • • ▬ Highly fragmented Many players struggling with legacy business models Successful business owners often have no natural exit route Options include: • • • Continue consolidating in Best Practice activities Open new front with divergent acquisition Look for weightier targets 13 The ILX Target Market – Vocational Training • High end training • well defined markets Best Practice Gov’t backed Skills Initiatives HR Compliance Banking & Finance FSA Compliance 14 Current trading and outlook ▬ First two months of trading very encouraging ▬ Significant organic growth on like-for-like figures ▬ Outlook very positive 15