("Epic")
(The UK's leading e-learning company)
- Delayed order intake means full year result likely to be below
market expectations
- Cash position remains strong
- Interim dividend to be increased by 100%
At the Annual General Meeting of the Company, to be held at 12.00
p.m. today, 14 October 2003, Michael Inwards, Chairman of Epic,
will make the following comments on current trading:
Following a set of very strong results for the last financial year
with increases in revenues, profits and cash generation, we are
now experiencing a period of consolidation and reflection in our
market. During the latter part of the last financial year we recruited
additional sales staff and consequently have increased sales pipeline
activity. However, despite increasing our sales activities we are
experiencing some delays in actual orders being placed.
Performance for the half year to the end of November 2003 is likely
to be only slightly below budget. However, extended consultation
on the government's published e-learning policy has delayed the
decision making of many government departments and agencies over
the summer period. As nearly 60 per cent of our revenues are derived
from the public sector, this delayed order intake is likely to impact
our performance in the second half of the current year. In the private
sector, financial services activity has also been weaker than expected.
Unless there is a sustained improvement in sales orders in the coming
months, our full year results will be below current market expectations.
Online learning has become an accepted practice. A consequence
of this, and therefore a factor in the growth of our market, is
the extent to which it is 'blended' together with other training
methods to deliver the most effective learning solutions. In a market
characterised by static training revenues, online learning represents
a shift in expenditure patterns to a more strategic level, creating
a potential delay in the procurement process. However, the American
Society for Development and Training (ASDT) reports that, despite
the pressure on training budgets caused by the poor economy, there
is substantial growth in e-learning within the overall training
blend.
Because of our confidence in the medium to long-term prospects,
and our strong cash position, we have decided to increase the interim
dividend by 100% to 0.8p per share when we declare the interim financial
results in February 2004.
As regards the potential acquisition of other companies, in the
past few months we have been in dialogue with several target companies,
but our acquisition activity has not yet resulted in a suitable
transaction being identified. We remain cautious and will only make
an acquisition which we believe will be earnings enhancing and offer
long term benefits to our shareholders.
In summary, we feel that we are between the peaks of a double-dip
market, having steered ourselves successfully through the first
phase of this market, we are now in a period of reflection, just
prior to the next phase of solid and consistent spend. Increased
activity in our consultancy business confirms this, with strong
activity in strategic and planning contracts, in both the private
and public sectors. We expect to return to growth next year.
For further information:
Epic
Michael Inwards (Chairman) 01273 728686
Donald Clark (Chief Executive Officer) 01273 728686
Stephen Oliver (Chief Financial Officer) 01273 728686
Beattie Financial
Brian Coleman-Smith / James Chandler / Gemma Smith 020 7398 3300
BACKGROUND NOTE: ABOUT EPIC
Epic is the leading e-learning company in the UK. For nearly 20
years Epic has been a consistent leader and innovator, producing
ground-breaking and award winning work. Services range from consultancy
through content production and technology solutions (both bespoke
and generic) to testing and localisation.
Epic's extensive client list includes:
Government - DWP, Inland Revenue, Customs & Excise,
Environment Agency, Cabinet Office, LearnDirect (Ufi), I&DeA
Education - HEFCE, BECTA, SEEDA, Cambridge University, NLN
Health - NHSU, NPSA, PCTs, Department of Health, BUPA
Financial Services - The Royal Bank of Scotland, Lloyds TSB,
Barclays, PwC, AIB, AMEX, Deloittes, FSA
Telcos, Media - SAP, ntl, Cable&Wireless, Orange, BT, BBC
Retail - B&Q, Whitbread, Diageo, British Airways, Virgin
Atlantic, Kimberly Clark, Kraft
WORLDWIDE MARKET
IDC: 'Begin Act II: Worldwide and U.S. Corporate eLearning Forecast,
2002-2006' (2003)
- Worldwide corporate e-learning market $6.6 billion for 2002;
35% compound growth rate for e-learning through 2006
- Worldwide IT education & training market $23.7 billion by
2006
THE EUROPEAN MARKET
IDC:
- European Business Skills market to reach $13 billion by 2006
- Five-year compound annual growth rate (CAGR) of 14.9%
- 27% of business skills training provided via e-learning by 2005
- Most advanced markets; UK, the Netherlands and Scandinavia
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