BDI.L Regulatory News (BDI)

5 Sep 2005 07:01

Bond International Software PLC05 September 2005 FOR IMMEDIATE RELEASE 5 SEPTEMBER 2005 BOND INTERNATIONAL SOFTWARE PLC INTERIM RESULTS 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 interim results for the six months to30 June 2005. KEY POINTS • Sales increased 40% to £5.9m (2004: £4.2m) • Operating profit before amortisation of goodwill up 59% to £1,255k (2004: £788k) • Pre-tax profit increased 50% to £1,070k (2004: £711k) • Earnings per share increased 31% to 3.16p (2004: 2.42p) • Cash balances of £3.4m • Successful acquisition of Prairie Developments Inc ("PDI") strengthening our customer base and widening geographical coverage in USA. Commenting on the results, Group Chief Executive Steve Russell, said: "We are delighted with the progress Bond has made over the first six months ofthis year both organically and through our acquisition. PDI is performingstrongly and organic growth in the key geographical markets has been veryencouraging with the winning of several high profile contracts. We are confidentabout our prospects for the remainder of the year and beyond." For further information, please contact: Bond International Software Plc: Tel: 01903 707070Steve Russell: Group Chief Executive e-mail: bmorrison@bond.co.ukBruce Morrison: Finance Director Buchanan Communications: Tel: 020 7466 5000Tim Thompson e-mail : nicolac@buchanan.uk.comNicola Cronk Seymour Pierce Limited: Tel: 020 7107 8000Mark Percy Bond International Software Plc and Subsidiary Companies Chairman's Statement I am pleased to announce record results for the six months ended 30 June 2005.Our turnover increased by nearly 40% to £5,924,000 (2004: £4,239,000) with a 16%increase resulting from continuing operations and the balance from our recentacquisition of Prairie Developments Inc ("PDI"). Operating profit before theamortisation of goodwill rose by 59% to £1,255,000 (2004: £788,000) and pre-taxprofits increased by 50% to £1,070,000 (2004: £711,000). The net cash inflow from operating activities was £1,456,000 during the firstsix months of 2005 (2004: £1,037,000) which enabled us to continue our extensiveprogramme of product development and complete the acquisition of PDI withoutsignificantly reducing our cash balances. Acquisition In February 2005 we announced the acquisition of PDI for a total considerationof $2.8m of which $1.7m was paid upon completion with a further $1.1m payable inFebruary 2006. PDI had net liabilities of $2.1m including debt of $1.4m and abank loan of $0.5m which had been used by PDI to acquire one of its competitorsin 2004. The acquisition has given rise to goodwill of £2.8 million which willbe amortised over its estimated useful life of 20 years. PDI, which is based in Minneapolis and Atlanta, develops front and back officesoftware, under the brand name eEmpACT, for the permanent and temporary staffingagency markets, focussing primarily on the small to mid sized recruitmentcompanies. The acquisition has strengthened the Company's position in the lowerrange market and broadened its geographical coverage in the USA. UK & Europe The European operation had an extremely busy first half of the year takingorders for the sale of Adapt and related services in excess of £2.1m. This hascontributed to a 16% increase in revenues in the European operation to £3.4m(2004: £2.94m) as well as significantly increasing the order book. The Companytook orders for 34 new installations providing nearly 800 new users ofAdaptRecruitment and we continued to see a significant demand from our existingclient base for additional licences and services. In May 2005 we announced a sixfigure contract to deploy Adapt across the UK branch network of RandstadLimited, one of the world's largest recruitment agencies. AdaptVMS, our product designed as a platform for staffing agencies to provideoutsourced recruitment services to corporate clients, continued to prosper with22 clients using the system in the UK leading to an increase of almost 50% inrevenues from this product compared to 2004. The Company has also continued to develop its Corporate Applicant TrackingSystem, which allows corporate clients to automate their recruitment processes.In July 2005 we announced a three year agreement with easyJet plc and a contractwith Matalan and more recently we signed a contract with Southern Water. Thesethree new customers join a growing band of prestigious corporate clients whohave chosen Adapt to handle their recruitment and HR processes. In addition to the sale of licences and services to both new and existingclients, we have seen an increase in the recurring income in the UK frommaintenance agreements and long term rental agreements which represented 91% ofUK operating costs in the first half of the year. North America Our presence in North America has been bolstered by the acquisition of PDI withthe result that the combined operation is probably the largest provider ofsoftware solutions to the staffing industry in the USA in terms of the number ofcustomers. The result is that revenues from the North American market grew bynearly 120% to £2.2m (2004: £1.0m) and operating profit increased from £81,000in 2004 to £237,000 in 2005.The launch of the next release of Adapt scheduled for October 2005 gives greatcause for optimism that the US operation will go from strength to strength overthe next few years. Australia and Asia Pacific Our Australian business delivered another solid result growing revenues by 5%compared to 2004. The operation is well placed to move into the potentiallylarge South East Asia market, with the launch of the next release of Adapt, andis already talking to prospects in China and Japan. Product Development Product development expenditure totalled £984,000 in the first half of the yearrepresenting 16.6% of sales. Of this £308,000 was spent with a third party ondeveloping the next generation of Adapt bringing the total spent on the projectto date to £1,646,000. This expenditure is now substantially complete. The balance of product development expenditure was spent internally on thecontinuing enhancement of our existing product range. Prospects Our order book in the UK is at its highest level for nearly five years whichtaken together with the contracted recurring income gives us reason to beoptimistic for the Company's prospects for the second half of 2005. Furthermorewe are currently installing the next generation of Adapt in the UK and webelieve that the introduction of this new generation of product will provide uswith significant global revenue opportunities in 2006 and beyond. Martin BaldwinChairman2 September 2005 Bond International Software Plc and Subsidiary Companies Consolidated profit and loss account to 30 June 2005 Year ended Six months ended 30 June 31 December 2005 2004 2004 £000 £000 £000 (unaudited) (unaudited) (audited) Turnover - continuing operations 4,894 4,239 9,578- acquisitions 1,030 - - --------- --------- ----------- 5,924 4,239 9,578 Cost of sales (333) (150) (362) --------- --------- ----------- Gross profit 5,591 4,089 9,216 Administrative expenses (4,528) (3,374) (7,415) --------- --------- -----------Operating profit - continuing operations 968 715 1,801- acquisitions 95 - - --------- --------- ----------- 1,063 715 1,801 Net interest receivable/(payable) 7 (4) 80 --------- --------- ----------- Profit on ordinary activities before 1,070 711 1,881taxation Tax on profit on ordinary activities (272) (224) (359) --------- --------- ----------- Retained profit for the period 798 487 1,522 ========= ========= =========== Earnings per share - basic 3.16p 2.42p 6.71p Earnings per share - fully diluted 3.10p 2.40p 6.63p Bond International Software Plc and Subsidiary Companies Consolidated balance sheet at 30 June 2005 At At 30 June December 2005 2004 2004 £000 £000 £000 (unaudited) (unaudited) (audited) -------------------------------- Fixed assetsIntangible assets 6,958 3,930 4,026Tangible assets 2,830 2,508 2,520 --------- --------- ----------- 9,788 6,438 6,546 ========= ========= =========== Current assetsStock and work in progress 43 41 41Debtors 2,280 1,784 2,349Cash at bank and in hand 3,372 2,892 3,768 --------- --------- ----------- 5,695 4,717 6,158 Creditors: amounts falling due within one year (5,210) (2,967) (3,501) --------- --------- -----------Net current assets 485 1,750 2,657 --------- --------- ----------- Total assets less current liabilities 10,273 8,188 9,203 Creditors: amounts falling due after more thanone year (881) (684) (629) Provisions for liabilities and charges (21) (24) (28) --------- --------- -----------Net assets 9,371 7,480 8,546 ========= ========= =========== Capital and reservesShare capital 252 252 252Share premium account 6,207 6,204 6,204Capital reserve 28 28 28Profit and loss account 2,884 996 2,062 --------- --------- -----------Equity capital and reserves 9,371 7,480 8,546 ========= ========= =========== Bond International Software Plc and Subsidiary Companies Consolidated cash flow statement to 30 June 2005 Year ended Six months ended 30 June 31 December 2005 2004 2004 £000 £000 £000 (unaudited) (unaudited) (audited) Net cash inflow from operating activities 1,456 1,037 2,179 --------- --------- ----------- --------- -----------Returns on investments and servicing offinanceNet interest 6 (4) 80 --------- --------- ----------- TaxationUK Corporation tax paid - - (74)Overseas tax paid (40) (28) (30) --------- --------- ----------- (40) (28) (104) --------- --------- ----------- Capital expenditurePayments to acquire intangible fixed assets (304) (322) (702)Payments to acquire tangible fixed assets (288) (144) (309)Receipts from sales of tangible fixed assets - 16 18 --------- --------- ----------- Net cash outflow from capital expenditure (592) (450) (993) --------- --------- ----------- AcquisitionsPayments to acquire business - (2,880) (2,539)Purchase of subsidiary undertaking (1,010) - -Cash acquired with subsidiary 108 - - --------- --------- ----------- Net cash outflow from acquisitions (902) (2,880) (2,539) --------- --------- ----------- Net cash outflow before financing (72) (2,325) (1,377) --------- --------- ----------- FinancingIssue of new ordinary shares 3 4,157 4,157Expenses of share issue - (223) (223)New hire purchase loans 69 55 55Repayment of bank loans (289) (85) (141)Repayment of other loans (123) - -Repayment of hire purchase loans (36) (15) (34) --------- --------- ----------- Net cash (outflow)/inflow from financing (376) 3,889 3,814 --------- --------- ----------- (Decrease)/increase in cash for the period (448) 1,564 2,437 ========= ========= =========== Bond International Software Plc and Subsidiary Companies Notes to the financial statements 1. Basis of preparation The interim financial statements have been prepared on the basis of theaccounting policies set out in the Company's 2004 statutory accounts. These statements are unaudited and were approved by the Board of Directors on 2September 2005. The financial information contained in these statements does notconstitute statutory accounts as defined in Section 240 of the Companies Act1985. The financial information for the year to 31 December 2004 has beenextracted from the statutory accounts for that year. These accounts, whichreceived an unqualified audit report, have been filed with the Registrar ofCompanies. 2. Turnover analysis (a) The geographical analysis of turnover by destination is: Year ended Six months ended 30 June 31 December 2005 2004 2004 £000 £000 £000 (unaudited) (unaudited) (audited) United Kingdom 3,131 2,808 6,271Europe 286 141 546Asia Pacific 277 264 588Africa 27 19 31North & South America 2,203 1,007 2,142 --------- --------- ----------- 5,924 4,239 9,578 ========= ========= =========== (b) Sales by product are: Year ended Six months ended 30 June 31 December 2005 2004 2004 £000 £000 £000 (unaudited) (unaudited) (audited) Software sales &services 2,856 2,121 5,065Software support 2,241 1,689 3,472Vendor managed services 583 391 880 --------- --------- -----------Software revenue 5,680 4,201 9,417Hardware & other sales 244 38 161 --------- --------- ----------- 5,924 4,239 9,578 ========= ========= =========== Notes to the financial statements (continued) 3. Reconciliation of operating profit to net cash inflow fromoperating activities Year ended Six months ended 30 June 31 December 2005 2004 2004 £000 £000 £000 (unaudited) (unaudited) (audited)Operating profit 1,063 715 1,801Depreciation of tangiblefixed assets 174 144 286Amortisation of goodwill 192 73 217Loss on sale of tangiblefixed assets - 11 11Decrease in stocks - 2 5Decrease/(increase) indebtors 200 (291) (801)(Decrease)/increase increditors (173) 383 660 --------- --------- -----------Net cash inflow fromoperating activities 1,456 1,037 2,179 ========= ========= =========== 4. Earnings per share The basic earnings per share is based on attributable profit for the period of£798,000 (June 2004: £487,000; year ended 31 December 2004: £1,522,000) and on25,218,770 ordinary shares (June 2004: 20,116,685, year ended 31 December 2004:22,673,695) being the weighted average number of ordinary shares in issue duringthe periods. The adjustment to the earnings per share from basic to fullydiluted relates entirely to share options. This information is provided by RNS The company news service from the London Stock Exchange