Epic Group, the developer of internet training programmes, is still planning to expand after unveiling a 21 per cent drop in full-year profits.

The e-learning company, based in Old Steine, Brighton, said it would not be rushed into making an acquisition "for the sake of it", however.

The firm said heavier tax charges had contributed to a pre-tax profit of £1.5 million for the period ending May 31 - down £400,000 on last time.

Turnover decreased by 16 per cent to £7.3 million while fully taxed earnings per share fell by 20 per cent to 3.9p.

But there was improvement in the firm's cash balances. Epic now has £12.5 million sitting in the bank - an increase of seven per cent on last year.

Company chairman Michael Inwards said despite the company's strong financial position it had failed to make an acquisition in the last 12 months.

The board was still keen to make a purchase that would add value to the company but was prepared to sit and wait for the right buy.

He said: "We continue to look for suitable value-adding acquisitions. We do not intend to be rushed into acquiring for the sake of acquiring and will be careful in our choice."

Despite a drop in profits, Epic, listed on the Alternative Investment Market, is still the market leader, having won new contracts within the defence and health sectors.

Its work in the public sector has continued to flourish, particularly in education where it expects to see an increase in revenues next year.

Mr Inwards expects Government spending on e-learning to continue, particularly in education, health and defence.

He said: "We have deliberately targeted these areas where spending is predicted to be at its strongest."

In the private sector, the firm's three main bank clients, Royal Bank of Scotland, Barclays and Lloyds TSB, have all continued to spend on e-learning.

Epic, founded 21 years ago, has won several new clients in the retail sector while benefiting from high levels of repeat business.

Earnings per share are down 41 per cent to 4p. The board is recommending a final year dividend of 1p per share, payable in November.

E-learning is a broad term which applies to companies or public bodies which use internet-based training programmes for their staff.

Tuesday July 20, 2004