FJET.L Regulatory News (FJET)

26 Sep 2007 07:01

Rubicon Software Group PLC26 September 2007 FOR IMMEDIATE RELEASE 26 September 2007 Rubicon Software Group Plc PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2007 Rubicon Software Group plc ("Rubicon" or "the Group"; AIM: RUBI), the providerof smart decisioning and workflow automation software to the UK financialservices sector, announces its audited results for the year ended 30 June 2007.These are Rubicon's first full-year results since its flotation on AIM on 6thSeptember 2006. Financials: • Total operating income of £ 1,445,000 (2006: £1,418,000) • Loss before tax of £257,000 (2006: PBT - £60,000) • Loss per share of 0.71p (2006: EPS - 0.36p) •The Group ended the year with positive cash balances of £57,000 Operational highlights: • Second half recovery, due to faster project delivery and improved staff utilisation, which led to the Group achieving a small profit in the six month period; • New contract wins included secured loan sourcing system for Loanoptions.co.uk; repeat business from First Response Finance; • Annual recurring revenues of c.£750,000, double prior-year levels. Commenting on the Group results, Rob Burnham, Rubicon's Chairman, said: "These results mask the undoubted progress that Rubicon has made in its firstyear as a plc. There is growing awareness and acceptance of our solutions withinthe marketplace and the successful migration of our licensing model to an annualbasis gives us greater visibility of future revenues. Additionally, we arelooking to augment our revenue streams via the introduction of a transactionalrevenue model and a "software as a service" offering. ### Notes to Editors About RubiconBased near Woking in Surrey, Rubicon is a provider of smart decisioning andworkflow automation software to niche markets within the UK financial servicessector, notably secured loan brokers and building societies. Its core technologyis designed to enhance the effectiveness and efficiency of customer service,fulfillment and product selection, whilst facilitating business process andchange management. Current clients include First Response Finance,Loanoptions.co.uk, Market Harborough Building Society, Mortgages plc, and NortonFinance. For more information, please visit www.rubiconsoftware.com. For further information, please contact: Rubicon Software Group Plc 01276 706900Alistair Hancock, Chief Executive OfficerRichard Gordon, Finance Director W.H. Ireland Limited 0121 616 2101Tim Cofman/Katy Birkin Bankside Consultants 020 7367 8888Sue Scott/Louise Davis CHAIRMAN'S STATEMENT In the year to 30 June 2007, Rubicon generated total operating income of£1,445,000, marginally ahead of prior-year levels. As envisaged at the interimstage, we achieved a small profit in the second half, resulting in an overallloss for the year of £ 257,000 compared to a profit of £60,000 in 2006. Operational Review As previously noted, the first half of the year was impacted by delays inimplementation of a major project. However, faster project delivery and improvedstaff utilisation led to a marked recovery in the second half, with revenuesincreasing by 85% in comparison with the first half. In the second half, wesucceeded in securing three new annual licence contracts that resulted in adoubling of annual recurring revenues year-on-year to almost £750,000. This isentirely consistent with the strategy outlined in the Group's AIM AdmissionDocument. There is growing acceptance of the ease of use of our software and the factthat, as it can be easily configured to fit exact business requirements, itenables our customers to retain control of their processes. We are currentlyworking on ten client assignments, which is greater than at any time inRubicon's history to date. As a small business this brings a new set ofchallenges but we continue to make good progress in project delivery and staffutilisation in order to drive project profitability. We are pursuing a prudent,yet flexible HR policy, increasing our permanent headcount whilst also deployingcontract professionals where appropriate. Trading during the second half was encouraging, with several sizeable contractwins and newly-developed partnership channels making a contribution. We haverecently completed delivery within two months of engagement of a secured loansourcing system to Loanoptions.co.uk, a leading Master broker, which providesintermediaries with access to the latest quotes across its panel of lenders. Wehave also delivered a full case management system to First Response Finance,within timescales and budget, as a follow-up to the original implementation. Inaddition to applications delivery to our clients, we have also made significantprogress in migrating our technology platform to Microsoft .NET. A fundamental element of the Group's strategy is to establish a solid base ofrecurring income. Hence we are in discussions with a number of our partnersregarding the introduction of a transactional revenue model. We are also workingon a "software as a service" offering for smaller brokers and packagers as webelieve they will be highly receptive to a flexible service specificallydesigned to reduce operational costs and improve conversion rates, charged on amonthly basis rather than via a large up-front licence fee. AIM Flotation On 6 September 2006, Rubicon issued 7,700,000 ordinary shares raising £430,000net of expenses, by means of a placing accompanied by admission of the Group'sordinary shares to AIM. Dividends Distributable reserves are not available and the Directors do not propose to paya dividend for the period. As stated at the time of the flotation, it is theBoard's intention to initiate a progressive dividend policy once recurringrevenues are sufficient to cover the Group's fixed costs. Management As previously announced, Gavin Jones, the Group Operations Director, resignedfrom the Board on 21 December 2006 and, following a period of garden leave, leftthe Group at the end of June 2007. Richard Gordon, Rubicon's part-time Finance Director, will be leaving the Groupon 30 September 2007 to join a larger organisation in a full time role. TheBoard would like to thank Richard for his excellent support during the flotationprocess and his contribution to establishing the internal financial rigourdemanded of a public company. We have appointed a new full-time Finance Directorwho will be starting with the Group in early November, when a formalannouncement will be made. Outlook There has been much recent commentary regarding the state of the sub-prime loansmarket and its potential to disrupt the wider economy. It is too early for us toassess the impact of the current market uncertainty. Whilst there is evidencethat financial services organisations may defer major capital projects, the factthat lenders need to adjust their lending criteria is likely to generate morechargeable work for us near-term, as we maintain these rules on behalf of anumber of our broker and packager clients. Looking further out, we believe thatthe use of smart technology increasingly will be the key competitivedifferentiator between existing brokers and packagers, driving ongoing demandfor class-leading products, such as ours, that are focused on deliveringoperational efficiency. Overall, the Board believes that Rubicon is wellpositioned to take advantage of the opportunities presented by the changingenvironment within its target markets. Rob Burnham 25 September 2007ChairmanRubicon Software Group plc GROUP PROFIT AND LOSS ACCOUNTFOR THE YEAR ENDED 30 JUNE 2007 Year ended Year ended 30 June 30 June 2007 2006 Notes £'000 £'000 Turnover 1,380 1,377Other operating income 65 41 ----- ----- 1,445 1,418 Operating costs:Staff costs (868) (620)Depreciation and amortisation (180) (167)Other operating charges (651) (565) --- ----Operating (loss)/profit (254) 66 Interest income 2 -Interest payable and similar charges (5) (6) Profit/(loss) on ordinary activities before --- ----taxation (257) 60Tax on profit/(loss) on ordinary activities 2 - - --- ----Retained profit/(loss) for the financial period (257) 60 ==== ==== Basic earnings per ordinary 1p share (p) 3 (0.71) 0.36 ==== ==== All of the activities of the group are classified as continuing. The group has no recognised gains or losses other than the results for theperiods as set out above. GROUP BALANCE SHEETAS AT 30 JUNE 2007 Year ended Year ended 30 June 30 June 2007 2006 Notes £'000 £'000 Fixed assetsIntangible assets 289 276Tangible assets 40 40 --- --- 329 316 --- ---Current assetsStocks - 37Debtors 514 424Cash at bank and in hand 57 - --- --- 571 461 Creditors: amounts falling due within one year (471) (465) --- ---Net current assets/(liabilities) 100 (4) --- --- Total assets less current liabilities 429 312 Creditors: amounts falling due after more than one year (4) (100) --- ---Net assets 425 212 === === Capital and reservesCalled up share capital 377 300Share premium account 393 -Merger reserve 596 596Profit and loss account (941) (684) --- ---Shareholders' Funds 4 425 212 === === GROUP CASH FLOW STATEMENTFOR THE YEAR ENDED 30 JUNE 2007 Year ended Year ended 30 June 30 June 2007 2006 Notes £'000 £'000 Net cash (outflow)/inflow from operatingactivities 5 (67) 100 Returns on investments and servicing of financeInterest paid (5) (6) --- ---Net cash outflow from returns on investments andservicing of finance (5) (6) Taxation - 62 Capital expenditure and financial investmentPayments to acquire tangible assets (8) (13)Payments to acquire intangible assets (179) (188) ---- ----Net cash outflow from capital expenditure andfinancial investment (187) (201) ---- ----Cash outflow before financing (259) (45) FinancingIssue of equity share capital 77 29Share premium on issue of share capital 393 86Repayment of loans (100) (97)Capital element of finance lease and hirepurchase agreements (2) (4) --- ---Net cash inflow from financing 368 14 --- ---(Decrease)/increase in cash 6 109 (31) === === Notes to the financial statements 1. Basis of preparation The financial statements have been prepared under the historical costconvention. The financial statements have been prepared on the going concern basis as thedirectors believe this to be appropriate because the company's forecastsindicate that the facilities available from the company's lenders and the agreedterms of repayment for company shareholder and other loans will result in thecompany having sufficient financial resources to enable it to meet its cash flowrequirements over the next 12 months. The directors are confident that the company will be able to meet liabilities asthey fall due, and therefore the financial statements do not include anyadjustments that would arise as a result of not being able to do so. 2. Taxation There is no charge in the year as a result of losses incurred. The Group has unrelieved tax losses at 30 June 2007 of £824,000 (2005 -£543,000) which remain available to offset against future taxable tradingprofits. 3. Earnings per share The calculation of earnings per share is based upon the (loss)/earnings aftertaxation. The relevant figures used in the calculation are stated below: 2007 2006 £'000 £'000 (Loss)/earnings attributable to shareholders (257,000) 60,000Weighted average number of shares in issue duringthe year 36,265,474 16,608,876Average fair value of one ordinary share during theyear 7.45p n/aNumber of shares under option during the year 311,500 n/aWeighted average exercise price for shares underoption during the year 6.00p n/a ------------- 2007 ------------- ------------ 2006 ------------- Weighted Earnings Weighted Earnings Earnings Average per share Earnings Average per share (Loss)/earnings (257) - - 60 - -attributable to shareholders Weighted - 36,265,474 - - 16,608,876 -averagenumberof shares inissue during the year Basic (loss)/ - (0.71) - - 0.36earnings ----- ---- per share Number of 311,500shares underoption Number ofshares that (250,957)would havebeen issuedat fair value Diluted ---- ---------- ----- -- ---------- ----(loss)/ (257) 36,326,017 (0.71) 60 16,608,876 0.36earnings ==== ========== ===== == ========== ====per share 4. Reconciliation of movements in shareholders' funds 2007 2006 £'000 £'000 Profit/(loss) for the financial year (257) 60New ordinary share capital subscribed in subsidiary company 470 333 ---- ----Net addition/(reduction) to shareholders' funds 213 393Opening shareholders' funds 212 (181) ---- ----Closing shareholders' funds 425 212 ==== ==== 5. Reconciliation of operating (loss)/profit to net cash inflow/(outflow)from operating activities 2007 2006 £'000 £'000 Operating (loss)/profit (252) 66Depreciation and amortisation 180 167Decrease in stocks - 4Increase in debtors (53) (230)Increase in creditors 58 93 --- ----Net cash (outflow)/inflow from operating activities (67) 100 === ==== 6. Reconciliation of net cash to movement in net debt 2007 2006 £'000 £'000 Increase/(decrease) in cash in period 109 (31)Net cash outflow from other loans 100 97Loan to equity conversion in subsidiary company - 218Other non-cash items (6) -Capital element of finance lease and hire purchase contracts 2 4 --- ---Change in net debt 205 288Net debt at the start of the year (154) (442) --- ----Net debt at the end of the year 51 (154) === ==== 7. Publication of non-statutory accounts The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in Section 240 of the Companies Act1985. The summarised balance sheet at 30 June 2007 and the summarised profit and lossaccount, summarised cash flow statement and associated notes for the period thenended have been extracted from the Group's 2007 statutory financial statementsupon which the auditors opinion is unqualified and does not include anystatement under Section 237 of the Companies Act 1985. The accounts for the period ended 30 June 2007 will be posted to shareholdersand laid before the company at the Annual General Meeting on 18 December 2007.Copies will also be available from Rubicon Software Group Plc's RegisteredOffice: Rubicon House, Guildford Road, West End, Surrey, GU24 9PW and via thewebsite (www.rubiconsoftware.com) in accordance with AIM Rule 26. ENDS This information is provided by RNS The company news service from the London Stock Exchange