2017-18 HALF-YEAR EARNINGS
- Revenues1 stable proforma and up 9% consolidated
- Current operating income impacted by redeployment costs
At the Board meeting on December 21, 2017, the Directors reviewed and approved the 2017-18 half-year FINANCIAL statements for the period ended September 30, 2017.
|€M||Sep 30, 2017
|Sep 30, 2016
|Mar 31, 2017
|Current operating income||(0.96)||0.21||(1.28)|
|Pre-tax current income||(2.18)||(0.42)||(5.68)|
|Consolidated net income||(2.38)||(0.27)||(6.38)|
|Net income (Group share)||(2.07)||(0.57)||(5.75)|
The consolidated half-year financial accounts at September 30, 2017 for the GECI International Group (“the Group”) take into account six months of business for ETUD Integral, the company acquired at the end of June 2016, compared with three months at September 30, 2016. This integration's impact on the consolidated accounts is marginal.
During this half-year period, the Group continued moving forward with its reorganization. The measures rolled out to restructure Eolen and ETUD Integral have started to deliver benefits in some of the Group's business divisions, with developments focused primarily on buoyant market segments (engineering, operational consulting, project management, etc.), alongside its withdrawal from certain segments with limited visibility (infrastructure, support, etc.).
This strategy is notably reflected in the positive development of the “IT and Telecoms” division, as well as sustained growth for international operations, in both Brazil and South Africa. The “Engineering” division has consolidated its positions by further strengthening its relations with major contracting authorities and expanding its range of services, particularly with new solutions for urban and interurban mobility.
Following its reorganization and gradual withdrawal from certain low value-added services, the “Finance” business has seen a contraction in its sales. Compared with 440 staff at end-March 2017, the Group had 420 staff at September 30, 2017, with revenues up 9%.
The Group's half-year revenues at September 30, 2017 are up 9% to €12.491 million and stable proforma (€12.51 million), with 23% generated internationally. The breakdown of the Group's operations between its various markets is as follows: 28% for engineering, 55% for IT and telecoms, and 17% for finance.
Current operating income is negative, coming in at €(0.9) million, compared with a positive result of €0.2 million for the first half of the previous year. This performance primarily reflects i/ the ramping up of commercial investments to support the subsidiaries' redeployment, ii/ the reduction in the research tax credit, and iii/ the costs of the restructuring drive, which will deliver savings from next year.
Net income (Group share) shows a €(2.1) million loss, compared with a €(0.6) million loss at September 30, 2016. This result factors in several non-recurring items, including: i/ €0.4 million of provisions for liabilities and charges linked to tax inspections concerning the Eolen companies, ii/ €0.1 million of provisions for the impairment of goodwill for ETUD Integral, iii/ €0.15 million of provisions for the Brazilian subsidiary's accounts, iv/ a €0.3 million write-down of client relationships, and v/ €(0.3) million for a readjustment of deferred taxes.
After factoring in earnings for the year, shareholders' equity (Group share) represents €(7.1) million, compared with €(6.2) million at March 31, 2017. This includes a total of €1.2 million for the capital increases carried out through (i) the exercising of free BSA warrants2 distributed following the general meeting on March 29, 2016, (ii) the conversion of part of the ORNANE bonds3 issued on December 19, 2016 and July 31, 2017, and (iii) the exercising of the BSAR A redeemable warrants4 freely distributed following the general meeting on July 28, 2017.
At September 30, 2017, the Group's net debt came to €(13.9) million, with €1.3 million of cash and cash equivalents. The accounts at September 30, 2017 have been prepared in accordance with a going concern principle insofar as the operations must be assessed over a period of 12 months from the closing date, ie until September 30, 2018. The Group's cash flow plan5, which is monitored on a daily basis, shows a surplus at the end of the 12-month period, considering the rationalized overheads and the reasonable outlook of the operating companies.
The medium-term financing set up as decided by the general meeting on July 28, 2017 is expected to help restructure the Group's financial debt, while enabling it to cover its net working capital requirements and move forward with its development projects.
The Group's actions are focused on further strengthening the quality of its offers, expanding its client base and optimizing costs across its subsidiaries with a view to ensuring its profitability and sustainability. Its repositioning around buoyant market segments will also enable it to capitalize on technological breakthroughs in the engineering, telecoms and IT sectors to support major industrial firms, SMEs and startups, ensuring the success of their digital transformation and designing smart services and solutions.
The consolidated half-year financial statements have been subject to a limited review by the statutory auditors, in line with the regulations in force. The half-year financial report is available on the Group's site: www.geci.net.
- 2017-18 third-quarter revenues on Thursday February 15, 2018 (after close of trading)
GECI International: Smart Solutions for a Smart World
The GECI International Group, created in 1980, has established itself as a high-tech engineering specialist. Today, GECI International is targeting high-growth, strong value-added market segments, focusing in particular on engineering, IT, telecommunications and smart products and services. With its world-renowned credibility for advisory services, its expertise and its ability to deploy the most qualified skills, GECI International is supporting businesses with their digital transition and their efforts to design and develop new smart services and solutions.
The ORNANE bonds are presented in a publication on the geci.net site. A tracking table is constantly updated on http://www.geci.net/fr/ornane.html.
GECI International - French limited company (société anonyme) with capital of €775,264.18
Registered office: 48 bis Avenue Kléber - 75116 Paris - France - Paris trade and companies register: 326 300 969
GECI International is listed on the regulated market Euronext Paris - Compartment C
isin (shares): FR0000079634 - GECP
ISIN (equity warrants): FR0013141249 - GECBS
Tel: +33 (0)1 44 34 00 20
Tel: +33 (0)1 53 65 68 68
1 after adjustment following the subsidiaries financial statements compared to the Group's half-year revenues reported on November 15, 2017
2 Distributed freely following the combined general meeting on March 29, 2016, 18,981,228 BSA warrants, representing 83.39% of the potential maximum total, were exercised following the operation, with 18,981,228 new shares created and a total gross subscription of €1,138,873.68.
3 On December 19, 2016, the Group issued, followed by an amendment signed on February 15, 2017, €1 million of ORNANE bonds, combined with BSA warrants within a maximum total commitment of €10 million. The extraordinary general meeting on July 28 authorized the issuing, in several tranches, of ORNANE bonds for a maximum of €9 million. On July 31, 2017, the Group MADE a first drawdown, exercising 300 ORNANE bond warrants, with a nominal value of €3 million. On December 18, 2017, 230 ORNANE bonds were converted (70 remaining) and led to the creation of 21,525,227 new shares (tracking table online on http://www.geci.net/files/ORNANE/FRPDF20171218_SUIVI_ORNANE.pdf).
4 As authorized by the extraordinary general meeting on July 28, the Group freely awarded 77,326,418 BSAR A warrants to the Company's shareholders on July 31. At the end of November 2017, 403,064 BSAR A warrants were exercised, with 100,766 new shares created and a total gross of €27,206.82. The BSAR A warrants are listed on Euronext.
5 The going concern principle is set out on page 37, chapter 3.2.3, of the half-year financial report available on the Group's website: www.geci.net.