BDI.L Regulatory News (BDI)

14 Mar 2005 07:00

Bond International Software PLC14 March 2005 FOR IMMEDIATE RELEASE 14 March 2005 BOND INTERNATIONAL SOFTWARE PLC Preliminary results for the year ended 31 December 2004 Bond International Software plc, the specialist provider of software for theinternational recruitment and human resources industries, with operations in theUK, USA and Australia, today announces its preliminary results for the yearended 31 December 2004. KEY POINTS • Turnover up 36.1% to £9,578,000 (2003: £7,037,000) - Continuing operations up 22% to £8.620,000 • Operating profit before interest and goodwill amortisation £2,018,000 (2003: £522,000) - Continuing operations £1,367,000 • Pre-tax Profit of £1,881,000 (2003: £451,000) • Earnings per share up 205% to 6.71p (2003: 2.20p) • Increase in cash balances to £3.8m (2003: £1.6m) • Acquisition of EZaccess in March 2004 - Significant impact on turnover and operating profits for the year - Further revenue generation from conversion of former EZaccess clients to Adapt • Post year end in February 2005, acquisition of Prairie Developments Inc - Extending geographical and market coverage in the US as well as increasing recurring revenue from overall customer base Commenting on the results Chief Executive Steve Russell, said: With the continuing improvement in prospects for the worldwide staffingindustry, the start of 2005 looks extremely encouraging. Our prospect list isparticularly strong, with a number of the largest recruitment companies lookingto replace or update their existing systems. Our existing client base is alsocontinuing to provide a significant income stream as their own businesses growand create the need for additional users of our products. The recent acquisition of Prairie Developments Inc has increased our marketshare in the US, added new products to the portfolio and has broadened ourgeographical coverage in this important market. I believe it will prove avaluable addition to the group with a strong income stream and a strongoperational cash flow. All these factors point to a bright future for the company both for 2005 andbeyond." For further information, please contact: Bond International Software Plc:Steve Russell: Group Chief Executive Tel: 01903 707070Bruce Morrison: Group Finance Director Tel: 01903 707070 Mob: 07770 262386 e-mail: bmorrison@bond.co.uk Buchanan Communications: Tel: 020 7466 5000Tim ThompsonNicola CronkTom Carroll Seymour PierceMark Percy Tel: 020 7107 8000 BOND INTERNATIONAL SOFTWARE PLC Chairman's Statement FINANCIAL OVERVIEW I am delighted to announce that 2004 was a record year for the group, reportinga pre-tax profit of £1,881,000 compared with £451,000 for the previous year. Theimprovement is based on a 36% increase in turnover with revenues from ourcontinuing operations growing by 22% and the balance of the increase arisingfrom the acquisition of EZaccess which we completed in March 2004. The growth in revenues has been achieved without the same level of increase inoverheads with the result that earnings per share have grown by 205% from 2.20pto 6.71p per share. The net cash inflow from operating activities in 2004 was £2,180,000 (2003:£1,236,000) and the company raised over £4,000,000 in order to finance theacquisition of EZaccess as well as strengthen our working capital. The netresult was an increase in cash balances to £3,768,000 at 31 December 2004. Our balance sheet has strengthened following the fund raising we undertook atthe time of the acquisition of EZaccess with net assets showing an increase of177% to £8,546,000 compared with £3,081,000 at 31 December 2003. ACQUISITIONS In March 2004 we announced the acquisition of the business of EZaccess. Theacquisition has had a significant impact on the company contributing £958,000 toturnover and £651,000 of operating profit before goodwill amortisation. Furtherrevenues have been generated through the conversion of former EZaccess clientsto Adapt, and this has particularly benefited our US business. Following on from this success, we announced a further acquisition in February2005. Prairie Developments Inc ("PDI"), a company based in Minneapolis, USA andwhich trades under the brand name 'eEmpACT' was established in 1990 to developfront office software for the permanent and temporary staffing agency markets.PDI focuses on small to mid sized recruitment companies and currently has around800 customers. Through its back office system, Express, and a partnershipagreement with Microsoft, PDI can also provide integrated front office/backoffice solutions to customers of varying sizes. This acquisition brings togethera number of US software providers as PDI itself acquired Allegro software in2003 and Dataforce in 2004. The directors believe the acquisition of PDI will strengthen Bond's position inthe small to mid range market. The acquisition will also provide the companywith a presence in the mid west of the USA, extending Bond's geographical andmarket coverage in the US as well as increasing the recurring revenue from theoverall customer base. It is the directors' intention to seek further, similaropportunities as they arise. STAFF The success of the group can only be achieved with the hard work, dedication andskill of all our staff and I would like to thank all employees for the part eachone of them has played in producing the excellent results for the year. PROSPECTS 2005 promises to be an exciting time for the company. Our business continues togrow in line with our strategic objectives, both organically and by acquisitionand our product development program continues apace with new versions of Adaptand EZaccess recently released to the market. The acquisition of eEmpACT addsnew geographic coverage and new market opportunities and the company looksforward to the coming year with confidence. Martin Baldwin Chairman 14 March 2005 BOND INTERNATIONAL SOFTWARE PLC Group Chief Executive's Report Overview This year has seen a record improvement in the company's trading enabling us toreport an operating profit before the amortisation of goodwill of £2,018,000, upfrom £522,000 in 2003. This improvement has been achieved both through organicgrowth in sales of Adapt as well as through the acquisition of EZaccess in March2004. We have achieved considerable success with our existing products and markets,whilst continuing to invest in the expansion of the group both throughacquisition of competitive organisations and through our extensive productdevelopment program. AdaptRecruitment This market leading, innovative system designed specifically for recruitmentconsultancies continues to prove the mainstay of our product portfolio. Revenues generated from the sale of AdaptRecruitment have risen by nearly 31% to£4,844,000 compared with £3,704,000 in 2003. This increase which, reflects therecovery of the staffing market worldwide, has resulted from the sale of systemsto new clients as well as the sale of additional licences, modules andconsulting services to our existing customer base. The sale of new systems has led to an increase of 11% in income from support ofAdaptRecruitment to £2,734,000 compared to £2,464,000 in 2003. AdaptVMS AdaptVMS is a powerful product designed for use in a corporate environment.Using web-based technology it facilitates the interface between all partiesinvolved in the recruitment process including internal HR departments, linemanagers, candidates and external recruitment consultancies. AdaptVMS is alsoused as a platform for staffing agencies in providing outsourced recruitmentservices to corporate clients. The success of this product has led to sales of AdaptVMS having grown by over18% in 2004 compared to 2003. AdaptHR AdaptHR offers a seamless web interface delivering sophisticated workflow andaccessibility to the HR function within corporate clients. It has been developedusing the same tools as AdaptRecruitment and uses proven database and webtechnology offering flexibility and functionality in order to mirror andautomate business processes electronically. The ability to configure the product to a customer's requirements differentiatesthe AdaptHR system from its competitors and enabled us to sell the system to anumber of major corporate clients such as Ginsters, Matalan and The RoyalBrompton & Harefield NHS Trust. EZaccess The financial performance of the EZaccess division in the first nine months ofBond's ownership has exceeded all our expectations with worldwide revenue fromsales and support amounting to £958,000 and an operating profit before theamortisation of goodwill on the acquisition of £651,000. UK & Europe The European operation had an excellent year in 2004 with revenues increasing by41% of which 24% was derived from continuing operations and 17% through theacquisition of EZaccess. This resulted in an operating profit beforeamortisation of £1,373,000 compared with £267,000 in 2003. The EZaccess division in the UK operates with a team of 6 staff and hasdelivered sales of £800,000 and an operating profit of £541,000 during its first9 months of ownership. The income resulting from EZaccess together with the improving support revenue,account management sales and VMS revenues has resulted in around 96% of our UKoverheads now being covered by income from existing clients with the recurringcontracted income approaching 80% of UK overheads. Asia Pacific Our Australian subsidiary had another successful year delivering a 50% increasein profits compared with 2003 through the effective management of theiroverheads. Their VMS sales continue to improve with the result that 73% of theiroverheads are now covered by recurring contracted income. North America I am pleased to say that 2004 has seen a continuing improvement in the financialperformance of our US operation. We announced two major contracts during 2004,one for $1,200,000 in January 2004 with a West Coast staffing company and asecond one in August 2004 for $900,000 with Employbridge. These contractstogether with the acquisition of EZaccess have boosted sales by 32.6% to give anearly 6 fold increase in profits compared with 2003. The board believes that the North American market continues to provide the groupwith its greatest opportunity for future growth which is why we were delightedto announce the acquisition of Prairie Developments Inc in February 2005. Product Development Product development expenditure totalled £1,650,000 representing 17% of sales.Of this £702,000 was spent with a third party on a specific project bringing thetotal spent to date on this project to £1,338,000. The board expects theproject to be concluded in the first half of 2005 reducing our developmentexpenditure significantly going forward. The balance of product development expenditure was spent internally on thecontinuing enhancement of our product range. At the end of 2004 the Groupemployed 19 programmers and 12 system designers representing 24% of theworkforce. We continue to believe that successful product development iscritical to the future success of the group and we will continue to investsignificantly in this area. People At the end of 2004 the Group employed 135 staff around the world. The group'sexcellent year in 2004 is due in no small measure to the hard work andcommitment shown by all our staff and I would take this opportunity to thankthem for their efforts over the last twelve months. Outlook With the continuing improvement in prospects for the worldwide staffingindustry, the start of 2005 looks extremely encouraging. Our prospect list isparticularly strong, with a number of the largest recruitment companies lookingto replace or update their existing systems. Our existing client base is alsocontinuing to provide a significant income stream as their businesses grow andcreate the need for additional users of our products. Furthermore, the first installation of the next generation of AdaptRecuitment isdue to go live in March 2005 in a division of one of the world's largestrecruitment companies. We believe the introduction of this new generation ofproduct will provide significant revenue opportunities with particular appeal tothose larger recruitment companies who are considering an investment in newtechnology. The recent acquisition of Prairie Developments Inc has increased our marketshare in the US, added new products to the portfolio and has broadened ourgeographical coverage in this important market. I believe it will prove avaluable addition to the group with a strong income stream and a strongoperational cash flow. All these factors point to a bright future for the company both for 2005 andbeyond. Steve Russell Group Chief Executive 14 March 2005 BOND INTERNATIONAL SOFTWARE PLC Consolidated profit and loss account for the year ended 31 December 2004 Note 2004 2003 £000 £000Turnover 2 - continuing operations 8,620 7,037- acquisitions 958 - 9,578 7,037Cost of sales (362) (337) Gross profit 9,216 6,700Administrative expenses (7,415) (6,180) Operating profit 2 - continuing operations 1,365 520- acquisitions 436 - 1,801 520 Net interest receivable/(payable) 80 (69) Profit on ordinary activities before taxation 1,881 451Tax on profit on ordinary activities (359) (133) Retained profit for the year 1,522 318 Earnings per share (pence) 3 2004 2003 Basic 6.71p 2.20pDiluted 6.63p 2.19p CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE 2004 2003YEAR ENDED 31 DECEMBER 2004 £000 £000 Profit for the financial year 1,522 318 Currency translation differences on foreign currency 9 51net investments Total gains recognised since the last annual report 1,531 369 BOND INTERNATIONAL SOFTWARE PLC Consolidated balance sheet at 31 December 2004 2004 2003 £000 £000 £000 £000Fixed assetsIntangible assets 4,026 673Tangible assets 2,520 2,541 6,546 3,214Current assetsStock and work in progress 41 43Debtors 2,349 1,512Cash at bank and in hand 3,768 1,583 6,158 3,138Creditors:amounts falling due within one year (3,501) (2,529)Net current assets 2,657 609 Total assets less current liabilities 9,203 3,823 Creditors:amounts falling due after more than one year (629) (713)Provisions for liabilities and charges (28) (29) (657) (742)Net assets 8,546 3,081 Equity capital and reservesCalled up share capital 252 147Share premium account 6,204 2,375Capital reserve on consolidation 28 28Profit and loss account 2,062 531 Equity shareholders' funds 8,546 3,081 BOND INTERNATIONAL SOFTWARE PLC Consolidated cash flow statement for the year ended 31 December 2004 2004 2003 £000 £000 £000 £000 Net cash inflow from operating activities 2,180 1,236 Returns on investments and servicing offinanceInterest received 143 19Interest paid (63) (88) Net cash inflow/(outflow) from returns oninvestments and servicing of finance 80 (69) TaxationCorporation tax paid (74) (32)Overseas taxation paid (30) (6) (104) (38)Capital expenditurePayments to acquire intangible fixed assets (702) (503)Payments to acquire tangible fixed assets (310) (248)Payments to acquire business (2,539) -Receipts from sale of tangible fixed assets 18 25 (3,533) (726) Net cash (outflow)/inflow before financing (1,377) 403 FinancingIssue of ordinary shares 4,157 85Expenses of share issue (223) -New hire purchase loans 55 111Repayment of bank loans (141) (165) Repayment of other loans - (25)Repayment of hire purchase loans (34) (67) Net cash inflow/(outflow) from financing 3,814 (61) Increase in cash 2,437 342 Reconciliation of net cash inflow to 2004 2003movement in net funds £000 £000 Increase in cash 2,437 342Decrease in bank loans 141 165 Decrease in other loans - 25Increase in hire purchase loans (21) (44) Change in net funds/(debt) 2,557 488Foreign currency translation differences (9) (6)Net funds/(debt) at 1 January 2004 457 (25) Net funds at 31 December 2004 3,005 457 BOND INTERNATIONAL SOFTWARE PLC Notes to the Accounts 1. The above financial information does not constitute statutory accountsas defined in section 240 of the Companies Act 1985. The above figures for theyear ended 31 December 2004 are an abridged version of the Company's auditedaccounts which will be reported on by the Company's auditors before despatch tothe shareholders and filing with the Registrar of Companies. 2. Turnover (a) The geographical analysis of turnover by destination is: 2004 2003 £000 £000 United Kingdom 6,271 4,532 Rest of Europe 546 154 Asia & Australasia 588 638 Africa 31 30 North & South America 2,142 1,683 9,578 7,037 (b) Sales by product are: 2004 2003 £000 £000 Software sales & services 5,065 3,704 Software support 3,472 2,464 Vendor managed services 880 744 Software revenue 9,417 6.912 Hardware & other sales 161 125 9,578 7,037 (c) Analysis of group results 2004 2003 Continuing Acquisition Continuing operations Total operations £000 £000 £000 £000 Turnover 8,620 958 9,578 7,037 Cost of sales (357) (5) (362) (337) Gross profit 8,263 953 9,216 6,700 Administrative expenses (6,896) (302) (7,198) (6,178) 1,367 651 2,018 522 Goodwill amortisation (2) (215) (217) (2) Operating profit 1,365 436 1,801 520 3. Earnings per share The basic earnings per share is based on attributable profit for theyear of £1,522,000 (2003: £318,000) and on 22,673,695 ordinary shares (2003:14,477,183) being the weighted average number of ordinary shares in issue duringthe year. The diluted earnings per share is based on attributable profit for the year of£1,522,000 (2003: £318,000) and on 22,940,256 ordinary shares (2003: 14,540,112)calculated as follows: 2004 2003 Number Number Basic weighted average number of shares 22,673,695 14,477,183 Dilutive potential ordinary shares: Share options 266,561 62,929 22,940,256 14,540,112 4. Report and Accounts Copies of the Report and Accounts will be circulated to shareholders shortly andmay be obtained after the posting date from the Company Secretary, BondInternational Software Plc, Courtlands, Parklands Avenue, Goring by Sea,Worthing, West Sussex, BN12 4NG. This information is provided by RNS The company news service from the London Stock Exchange