EXHIBIT 99.2
1
SMARTLOGIK GROUP PLC
2001 Q2 RESULTS & INTERIM RESULTS FOR SIX MONTHS TO 30 JUNE 2001
London, England - 7/th/ August 2001: Smartlogik Group plc (LSE: SLK; NASDAQ:
SLGK) the provider of knowledge management and information discovery solutions,
today announced second quarter results for the three month period ending June
2001, and interim results for the six months to 30 June 2001.
The refinancing of the Group (previously called Bright Station plc), its
restructuring as a pure knowledge management and information discovery solutions
business though the Group's then subsidiary Smartlogik Ltd., the change of name
to Smartlogik Group plc, and the appointment of the Directors of Smartlogik Ltd.
to the Group Board, were approved by shareholders at the Extraordinary General
Meeting on 6 July.
The results reported today therefore reflect the period prior to the
restructuring, refinancing and management changes taking effect.
Stephen Hill, Chief Executive of Smartlogik Group plc, commented:
"These results represent something of a historical footnote, reflecting the
period prior to the completion of the wide ranging changes to the Group's
structure, financial profile and senior management. I would like to record my
thanks to those staff and advisors who succeeded in closing or disposing so
quickly of those other businesses that previously comprised Bright Station plc.
"Despite the considerable disruption and uncertainty during the period,
Smartlogik continued to make important operational progress on a number of
fronts, increasing the number and breadth of our customers and delivering
significant product enhancements to those customers. The Smartlogik business has
traded satisfactorily given the uncertainty during the last quarter regarding
the financial future of the company. My fellow Directors and I are firmly of the
opinion that we are now in an excellent position to move forward under new
management and in an exciting and growing market sector.
"We recognise that the IT industry is currently experiencing difficult times
with many companies delaying or deferring expenditure on new systems unless
there is a relatively short-term payback. However, we believe we have recognized
the trend early and have consequently taken steps to ensure that we emphasize in
our negotiations our ability to generate a real and substantive ROI for our
customers. We have also focused our sales efforts on those organisations for
which information management is mission-critical. To date, the Board has been
encouraged by the customer response to these initiatives. I look forward in my
new role to being able to report continuing progress in the future"
For further information, please contact:
Smartlogik Group plc 020 7930 6900
Stephen Hill, Chief Executive
Simon Canham, Finance Director
Hogarth Partnership 020 7357 9477
John Olsen
Tom Leatherbarrow
2
Results summary
Group (all businesses within the former Bright Station plc)
Group turnover for the six months to 30 June 2001 was (pounds)4.78 million
(2000: (pounds)52.56 million). Turnover in the first half of 2000 included
revenues of the information services division of Bright Station plc, divested in
May 2000. Operating losses were (pounds)13.98 million (2000: (pounds)5.29
million).
As a part of the recent restructuring process, the disposal or closure of all
Bright Station businesses apart from Smartlogik was initiated during the period.
The final steps in this process, the closure of the Sparza and OfficeShopper
businesses, were completed in June 2001. The Board will be attempting to dispose
of the remainder of the Sparza technology assets. Webtop, the search engine
business, was incorporated into Smartlogik during the period.
Group pre-tax loss for the period was (pounds)16.61 million (2000:
(pounds)112.02 million). The loss for the first half of 2000 included a
(pounds)100.43 million loss on the disposal of the information services
division.
Continuing business (Smartlogik Group plc)
Turnover for the continuing business for the six months to 30 June 2001 rose 56%
to(pounds)3.95 million (2000:(pounds)2.52 million). Gross margins for the period
were 89.4% (2000: 88.5%). Operating losses were(pounds)11.2 million
(2000:(pounds)4.04 million). 2001 includes(pounds)1.6 million of exceptional
refinancing costs.
Turnover for the second quarter, at (pounds)1.65 million, was 28% lower than the
first quarter, reflecting the considerable disruption and uncertainty associated
with the restructuring and refinancing process. Gross margins for the second
quarter were 89.0%, ahead of the 88.6% recorded in the first quarter.
NASDAQ Listing: Future reporting calendar
In line with the requirements of the London Stock Exchange and in order to
reduce administrative overheads, it is the Company's intention to revert to six
monthly, rather than quarterly reporting with immediate effect. The next results
reported therefore will be the preliminary results for the year to 31 December
2001, which the Company expects to announce by the end of March 2002.
Additionally, the Company intends to amend the ratio of Ordinary shares
underlying its American Depositary Shares listed on NASDAQ from 1:4 to 1:40
(ADS:Ord. shares) in order to ensure compliance with the Bid Price maintenance
standard of the NASDAQ market. Further details of this change and the relevant
record date will be announced in due course as soon as the necessary
administrative and regulatory steps are completed.
-ENDS-
3
NOTES TO EDITORS:
Smartlogik - business and strategy
Smartlogik is a knowledge management solutions business, providing intelligent
information solutions and consultancy services to organisations,
internationally.
Smartlogik enables organisations to reduce administrative costs, enhance staff
productivity and create real competitive advantage through the implementation of
intelligent search and tailored categorisation solutions designed to leverage
human insight and expertise. Smartlogik's solutions are tailored to meet the
unique requirements of each customer.
Smartlogik's search and categorisation solutions are used as core technologies
for a variety of knowledge management applications such as customer relationship
management, document management, content management, customer intelligence, risk
management, business intelligence, human resources and enterprise resource
planning.
Smartlogik's solutions are highly scalable and designed to be readily integrated
with other applications.
Smartlogik's strategy is to generate increasingly profitable growth from its
solutions by:
. focusing on selected vertical markets for whom extracting full value from
enormous volumes of information is mission-critical. The market sectors on
which particular emphasis is currently being placed are the media,
financial services, life sciences, directories and government markets;
. selling directly in the UK and the US and, in other territories, through
appointed Master Resellers with local market knowledge and expertise.
Smartlogik's approach is to work closely with each Master Reseller to drive
maximum value out of the relationship for all parties involved;
. using a `sell with' approach to partnerships by marketing and selling with
a managed number of key partners within the areas of Smartlogik's focus.
This select group of partners includes specialist hardware vendors,
applications vendors, systems integrators and professional services firms.
Smartlogik's approach is to dedicate resources to work closely with these
select group of partners to drive maximum value out of each relationship;
. leveraging the intellectual property and expertise contained within key
existing customer applications;
. providing customers with consultancy services designed to enable them to
leverage maximum benefit from their overall knowledge management
strategies;
. expanding the provision of `managed services' within select vertical
markets; and
. expanding the product suite through developing or acquiring technologies
and applications around Smartlogik's core search and structure
technologies.
Smartlogik has 168 staff with offices in London, Cambridge (UK), Alexandria
(USA) and San Francisco, and representation in Oslo and Madrid.
4
Smartlogik Group plc
Consolidated Profit And Loss Account (unaudited)
For the 3 months ended 30 June 2001
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
------------ ------------ ------------- ------------- ------------ ------------
2001 2001 2001 2000 2000 2000
------------ ------------ ------------- ------------- ------------ ------------
(pounds)000 (pounds)000 (pounds)000 (pounds)000 (pounds)000 (pounds)000
Turnover 1,652 86 1,738 1,413 11,294 12,707
Cost of sales (180) (72) (252) (144) (5,233) (5,377)
------------ ------------ ------------- ------------- ------------ ------------
Gross profit 1,472 14 1,486 1,269 6,061 7,330
Distribution costs (1,540) (106) (1,646) (350) (1,965) (2,315)
Administrative expenses
Exceptional refinancing costs (1,162) - (1,162) - - -
Other (5,558) (970) (6,528) (4,748) (5,111)
------------ ------------ ------------- ------------- ------------ ------------
Operating loss (6,788) (1,062) (7,850) (3,829) (1,015) (4,844)
Exceptional items
Restructuring costs (851) (1,458) (2,309) - - -
Loss on disposal of Information Services
Division - - - - 5,614 5,614
------------ ------------ ------------- ------------- ------------ ------------
Loss on ordinary activities after exceptional
items (7,639) (2,520) (10,159) (3,829) 4,599 770
------------ ------------ ------------- ------------
Interest receivable 58 226
Amounts written off investments (310) -
Interest payable (27) (1,906)
------------- ------------
Loss on ordinary activities before taxation (10,438) (910)
Taxation on loss on ordinary activities - 11
------------- ------------
Loss on ordinary activities after taxation (10,438) (899)
Minority equity interests - (16)
------------- ------------
Retained loss (10,438) (915)
------------- ------------
------------- ------------
Loss per share (pence) (6.0) (0.6)
------------- ------------
Shares used in computing loss per share
(thousands) 172,615 165,871
5
Smartlogik Group plc
Consolidated Profit And Loss Account (unaudited)
For the 6 months ended 30 June 2001
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
----------- ------------ ----------- ----------- ------------ -----------
2001 2001 2001 2000 2000 2000
----------- ------------ ----------- ----------- ------------ -----------
(pounds)000 (pounds)000 (pounds)000 (pounds)000 (pounds)000 (pounds)000
Turnover 3,945 834 4,779 2,515 50,045 52,560
Cost of sales (442) (492) (934) (290) (22,610) (22,900)
----------- ------------ ----------- ----------- ------------ -----------
Gross profit 3,503 342 3,845 2,225 27,435 29,660
Distribution costs (3,251) (281) (3,532) (560) (7,800) (8,360)
Administrative expenses
Exceptional refinancing costs (1,162) - (1,162) - - -
Other (10,243) (2,888) (13,131) (5,728) (20,866) (26,594)
----------- ------------ ----------- ----------- ------------ -----------
Operating loss (11,153) (2,827) (13,980) (4,063) (1,231) (5,294)
Exceptional items
Restructuring costs (851) (1,458) (2,309) - - -
Loss on disposal of Information Services
Division - - - - (100,431) (100,431)
----------- ------------ ----------- ----------- ------------ -----------
Loss on ordinary activities after exceptional
items (12,004) (4,285) (16,289) (4,063) (101,662) (105,725)
----------- ------------ ----------- ------------
Interest receivable 201 306
Amounts written off investments (491) -
Interest payable (30) (6,601)
----------- -----------
Loss on ordinary activities before taxation (16,609) (112,020)
Taxation on loss on ordinary activities - (271)
----------- -----------
Loss on ordinary activities after taxation (16,609) (112,291)
Minority equity interests - (37)
----------- -----------
Retained loss (16,609) (112,328)
----------- -----------
----------- -----------
Loss per share (pence) (9.6) (70.0)
----------- -----------
Shares used in computing loss per share (thousands) 172,615 160,466
6
Smartlogik Group plc
Consolidated Balance Sheet (unaudited)
As at 30 June 2001
30 June 30 June 31 December
2001 2000 2000
(pounds)000 (pounds)000 (pounds)000
FIXED ASSETS
Intangible assets - 300 -
Goodwill 2,303 6,498 2,364
Tangible assets 1,694 2,275 1,445
Investments 190 3,424 600
---------------------------------------------
4,187 12,497 4,409
---------------------------------------------
CURRENT ASSETS
Debtors 3,501 8,484 3,310
Cash at bank and in hand 2,060 20,128 16,334
---------------------------------------------
5,561 28,612 19,644
CREDITORS (amounts falling
due within one year) (9,299) (4,392) (7,354)
---------------------------------------------
NET CURRENT (LIABILITIES)/ASSETS (3,738) 24,220 12,290
---------------------------------------------
TOTAL ASSETS LESS CURRENT LIABILITIES 449 36,717 16,699
CREDITORS (amounts falling due after more
than one year) (351) - (17)
PROVISIONS FOR LIABILITIES AND CHARGES - (851) -
---------------------------------------------
98 35,866 16,682
---------------------------------------------
CAPITAL AND RESERVES
Called up share capital 1,733 1,726 1,726
Share premium account 184,184 184,067 184,057
Shares to be issued - 134 134
Profit and loss account (185,819) (150,061) (169,235)
---------------------------------------------
Total equity shareholders' funds 98 35,866 16,682
---------------------------------------------
7
Smartlogik Group plc
Consolidated Cash Flow Statement (unaudited)
For the 6 months ended 30 June 2001
2001 2000
(pounds)000 (pounds)000
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (13,704) (3,095)
----------- -----------
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 289 394
Interest paid on bank loans and overdrafts (30) (7,953)
Interest paid on finance leases - (25)
----------- -----------
259 (7,584)
----------- -----------
TAXATION PAID (61) (248)
----------- -----------
CAPITAL EXPENDITURE
Payments to develop intangible assets - (2,907)
Payments to acquire tangible fixed assets (934) (1,994)
Receipts from sale of tangible fixed assets 330 -
Payments to acquire fixed asset investments (220) (100)
Receipts from sale of fixed asset investments 69 -
----------- -----------
(755) (5,001)
----------- -----------
ACQUISITIONS AND DISPOSALS
Cash transferred with sale of division - (4,813)
Payment of deferred consideration - (1,261)
Expenses in connection with sale of division - (4,435)
Proceeds from sale of division - 180,780
----------- -----------
- 170,271
----------- -----------
CASH (OUTFLOW)/INFLOW BEFORE THE USE OF
LIQUID RESOURCES AND FINANCING (14,261) 154,343
----------- -----------
FINANCING
Net proceeds on issue of Ordinary share capital - 28,233
Debt due within one year
-increase in short term borrowing - -
-increase in lease financing - -
-repayment of loans (172,522)
Debt due after one year -
-increase in short term borrowing - -
-increase in lease financing - -
-repayment of loans - -
Expenses on raising of debt -
Repayment of capital element of finance lease rental payments (12) (642)
----------- -----------
(12) (144,931)
----------- -----------
(DECREASE)/INCREASE IN CASH (14,273) 9,412
----------- -----------
RECONCILIATION OF NET CASH FLOW TO MOVEMENT
IN NET FUNDS/(DEBT)
Increase/(decrease) in cash in the period (14,273) 9,412
Cash used to decrease lease financing 12 642
Cash used to repay loans - 172,522
----------- -----------
Change in net (debt)/funds resulting from cash flows (14,261) 182,576
Other non-cash changes (ie amortisation of debt fees) - (6,125)
Finance leases transferred with disposal of division - 5,724
Translation differences - (5,068)
----------- -----------
Movement in net funds/(debt) in period (14,261) 177,107
Net funds/(debt) at beginning of period 16,297 (156,979)
----------- -----------
Net funds at end of period 2,036 20,128
----------- -----------
8
Smartlogik Group plc
For the 6 months ended 30 June 2001
1 Analysis of Revenues
-------------------------------------------------------------------------------
2000
-------------------------------------------------------------------------------
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total
(pounds)000 (pounds)000 (pounds)000 (pounds)000 (pounds)000
Continuing Operations
Smartlogik 691 994 1,017 1,441 4,143
Other 411 419 476 498 1,804
-------------------------------------------------------------------------------
Total continuing operations 1,102 1,413 1,493 1,939 5,947
Discontinued operations 38,751 11,294 875 775 51,695
------------------------------------------------------------------------------
Total revenues 9,853 12,707 2,368 2,714 57,642
------------------------------------------------------------------------------
------------------------------------------------------------------------------
2001
------------------------------------------------------------------------------
Qtr 1 Qtr 2 Qtr 3 Qtr 4 Total
(pounds)000 (pounds)000 (pounds)000 (pounds)000 (pounds)000
Continuing Operations
Smartlogik 1,746 1,174 2,920
Other 547 478 1,025
------------------------------------------------------------------------------
Total continuing operations 2,293 1,652 - - 3,945
Discontinued operations 748 86 834
------------------------------------------------------------------------------
Total revenues 3,041 1,738 - - 4,779
------------------------------------------------------------------------------
2 Reconciliation of operating loss to net cash outflow from operating
activities
30 June 30 June
2001 2000
(pounds)000 (pounds)000
Operating loss
(13,980) (5,294)
Depreciation charges 468 2,145
Amortisation of goodwill 62 302
Amortisation of development costs - 3,862
Loss on disposal of fixed asset investments 61 -
Profit/(loss) on disposal of tangible fixed assets 13 209
Increase in debtors (448) (2,386)
Increase/(decrease) in creditors 164 (1,237)
Exchange variances 3 (230)
Cash cost of restructuring (47) (472)
Other working capital movements - 6
Net cash outflow from operating activities (13,704) (3,095)
9
Smartlogik Group plc
For the 6 months ended 30 June 2001 (unaudited)
3 Discontinued Activities
Amounts classified in the quarter as discontinued activities represent
the operations of the Sparza and Officeshopper trading entities, which
were either terminated or disposed of during the quarter.
4 Exceptional items
Exceptional items represent costs incurred in restructuring the group
through the termination or disposal of trading activities and the
curtailment of head office operations. These costs are primarily in
respect of redundancies, professional fees and property costs.
5 Post Balance Sheet Events
At an extraordinary general meeting held on the 6th July 2001, a placing
an open offer for (pounds)13.5 million ((pounds)12 million net of
expenses) was approved by the shareholders. Funds were received on the
11th July 2001.
These results are unaudited and do not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985. The financial statements for
the year ended 31 December 2000 have been reported on by PricewaterhouseCoopers
and are in the process of being filed with the Registrar of Companies. The audit
report was unqualified but contained an explanatory paragraph relating to a
fundamental uncertainty concerning the going concern basis of preparation for
the financial statements being dependent upon the successful completion of the
Placing and Open offer.