The Statement from the Chairman, A L R Morton, appears here in full
Introduction
This is the first Annual Report and Accounts covering the period from incorporation 9 April 1999 to 31 August 2000. Trading commenced 1 August 1999.
We have continued to make good progress in laying the foundations for Baron Corporation plc to become a leading player in the International golf and leisure markets, we are rapidly expanding our customer base and forging key strategic partnerships.
The integration of our Irish acquisitions, Smartgolf and Club Systems Ireland, has resulted in Baron being awarded the contract to supply a centralised handicapping system to the Golf Union of Ireland. This opportunity to connect 400 clubs creating a “golfing community” will generate income from communications, smart card technology and affinity programmes.
Our international distribution network has continued to increase with the addition of Golf Link Asia Pte Ltd, covering such countries as China, Singapore, Malaysia, Hong Kong and many more. We have also signed Golf Italia Inc as part of our expansion plans into Europe and are currently in discussions with several organisations which cover major areas of Europe.
We continue to invest in our internet offering ‘Golfagent’ as our market research and feed back from our partner network substantiate that “on-line” bookings will play a major role in the future of golf and travel businesses.
The Company has spent the year developing a range of products aimed at expanding into other leisure markets, whilst at the same time offering its current customers more features and added functionality. The products will carry a more identifiable “pillar brand” and will range from stand alone smart club systems to a complete ASP model. These products will reinforce Baron’s position as a leading company that is delivering Membership Relationship Management systems to a growing leisure market.
Results for the period ending 31 August 2000
The results for the period relate to the leisure management systems and the on-line service www.golfagent.com and include our recent acquisitions Smartgolf and Club Systems Ireland.
Turnover £3,294,936
Gross Profit £ 1,831,162
Net Operating Loss before Goodwill Amortisation £ 359,229
Loss per share 16.0p
The last six months results compared to the previous six months are as follows:-
Turnover £1,779,577 (28% increase )
Gross Profit £1,042,527 ( 48% increase )
Net Operating Loss before Goodwill Amortisation £ 217,675 ( £126,472 increase )
Turnover and gross profit reflects the increased activity and greater gross margin that Baron have achieved in the last six months. Gross margin achieved was 59% of sales compared to 50% previously attained.
The increase in overheads is as a result of a combination of factors, namely:-
Costs relating to the integration of the acquisition in Ireland.
Investment in the infrastructure through people and technology in the areas of sales and marketing and professional services.
Development of International Partners
Creating “Golfagent” as a global booking system for golf.
New product development and an ASP offering.
These investments will enable Baron to strengthen and enhance its position in its chosen markets.
Share Capital
On 24 July 2000 the Company placed 500,000 ordinary shares at £1.50 per share raising £750,000 for the development of the business and funding increased working capital.
Employees
On behalf of the Board I would like to express our appreciation and thanks to all our employees for their support and commitment during a year of continuous development and growth.
Current trading and future prospects
The significant investment we have made in developing an “on-line” internet centralised handicapping system for the Irish Golf Union offers Baron a recurring revenue stream. We are currently using the same technology in our negotiations with our partner network and would expect to see other Golfing Unions adopting our “on-line” handicapping system.
The acquisition and integration of Smartgolf Limited and Club Systems Ireland has strengthened our position in Ireland. We are currently developing a platform for clubs to communicate more effectively with their members “on –line”, utilising the internet, this will be based on touch screen technology using kiosk systems. A feature of the system will be the use of Content Management Software that will provide clubs and sponsors/advertisers remote access to update their information. A Pilot scheme is currently underway and roll out is expected early 2001.
We have contracted our first ASP model, which has gone live. It has been adopted by a leisure management company and is being installed at 30 locations throughout the UK. The technology will facilitate the organisations future expansion plans into Europe. We believe that we are the first company to deliver this solution to the golf and leisure market providing the widely accepted benefits of a centrally administered system giving timeliness of installation, reduced training requirements and reducing the total cost of ownership. This model has already generated considerable interest within our industry and customer base and we envisage significant uptake by organisations that are operating or planning to operate multiple sites.
In response to the Government’s Modernising White Paper on IT, Baron will be releasing a suite of applications to assist the public sector in delivering best value, coupled with improved service, to its customers. Baron’s integrated suite of applications links its ASP service with unique modular leisure management systems. An integral part of the offering will be Smart cards, with photograph or unique swipe codes, to act as user ID’s or internal charge cards. This will provide each citizen with access to a range of public leisure facilities and, as applicable, the Smart cards can be extended to other transactions.
Current trading is in line with expectations and the sales prospects are well ahead of last year due to the broadening of our product range which reflects the increasing requirements, particularly in leisure, for our management software and services and we look forward to the future with confidence.