FJET.L Regulatory News (FJET)

6 Sep 2006 07:00

Rubicon Software Group Plc06 September 2006 FOR IMMEDIATE RELEASE 06 September 2006 RUBICON SOFTWARE GROUP plc First Day of Dealings Rubicon Software Group plc (AIM: RUBI) ("Rubicon" or "the Company"), a providerof customer relationship management ("CRM") systems to the UK financial servicessector, announces the first day of dealings of its Ordinary Shares on AIM. The Company has raised £770,000 (before expenses), via a placing at 10p pershare, to increase Rubicon's front-line sales and marketing capabilities and, inparticular, to strengthen the development and delivery team in anticipation ofprojected revenue growth. W.H. Ireland Limited is the nominated adviser and broker to the Company. Alistair Hancock, Chief Executive Officer of Rubicon, commented: "Following the successful placing, we now are able to capitalise on Rubicon'sgrowing reputation within the financial services sector for deliveringcustomer-centric and cost-effective technology solutions by increasing our salesand development capabilities. It also provides us with the additional workingcapital required as we migrate towards annual licence fees. Trading in the yearto date is in line with management expectations and the Board views the futurewith confidence." For further information, please contact: Rubicon Software Group plc 01276 706900Alistair Hancock, Chief Executive OfficerRichard Gordon, Finance Director W.H. Ireland 0121 616 2101Tim Cofman/Katy Birkin Bankside Consultants 020 7367 8888Sue Scott/Sam Allen Placing Statistics: Placing Price 10pNumber of Ordinary Shares being issued under the Placing 7,700,000Gross proceeds of the Placing £770,000Estimated net proceeds receivable by the Company £430,000Number of existing Ordinary Shares prior to the Placing 29,999,995Number of Ordinary Shares in issue immediately followingAdmission 37,699,995Market capitalisation of the Company at the Placing Price £3.77 million BACKGROUND Based near Woking in Surrey and currently with 22 employees, Rubicon is aprovider of CRM systems within the financial services sector. Current clientsinclude First Response Finance Limited, Mortgages plc (now part of MerrillLynch), Market Harborough Building Society, Norton Finance (UK) Limited andUniversal Building Society. Rubicon has built its core product "Accelerator" to be used by financialservices operations with a significant number of retail customers focusing inparticular on clients which provide loan, mortgage, insurance, savings andinvestment products, in a highly regulated environment. Accelerator is designedto enhance the effectiveness and efficiency of customer service and salestargeting whilst offering management greater control of the compliance process.It does this by providing a single view of customers, automating workflowprocesses, providing prompts and scripts, and integrating with clients' backoffice systems. Accelerator is designed to produce a "single view of a customer" that displaysinformation held electronically within an organisation, brought togetherirrespective of whether it originated in the branch, in a call centre, in theback office or via the web. By being knowledgeable about a customer's previousinteractions and their stated requirements, an operator can improve customerservice and offer appropriate new or additional products at the point ofcontact. This approach coupled with the automation of business processes leadsto significant improvements in operational efficiency, cost reduction andcustomer retention. Accelerator is also able to access any number of different databases in realtime, including external data sources. For example, by linking to informationfrom credit reference agencies, the land registry and property valuationsystems, front office staff are able to make appropriate lending decisionsduring the course of a single telephone call, giving Rubicon's customers asignificant competitive advantage. Regulatory initiatives, such as "Know your Customer" and "Treating CustomersFairly", mean that financial services organisations are required to control thecompliance process. Accelerator's workflow processes, ''intelligent prompts''and scripts can be designed to ensure that activities comply with regulation andthat staff adhere to approved business processes. REVENUE MODEL A typical project would provide the following revenues to Rubicon: • Software licence fees: Rubicon charges licence fees either as a one-off perpetual licence or on an annual basis. Licence fees are charged typically according to the number of users. • Support and maintenance: Rubicon typically enters into a support contract which requires the client to make an annual payment to have access to Rubicon's client support function and to receive software updates. Maintenance fees are generally 15 per cent. to 25 per cent. of the licence fee, paid annually, and support costs vary depending on each client's requirement • Implementation fees: Rubicon charges clients for the initial installation of Accelerator and for any additional work it performs such as configuring specific client processes. The implementation process can take from two to ten months, depending on the complexity and phasing of the client's processes, and would generally result in fees to Rubicon similar to the licence revenue. MARKET OPPORTUNITIES Within the financial services sector, technology is playing an increasinglyimportant role in adapting business models for managing customer and regulatorydemands. The Directors believe that increasing regulation of the lending marketwill give rise to greater demand for automation and control of front officebusiness processes and customer relationship management, the key areas whichAccelerator has been designed to address. Rubicon currently focuses its salesattention on retail finance organisations. Rubicon has already identified thefollowing niches for which the Directors believe Accelerator will be well suitedin the current phase of Rubicon's development: • Building Societies: TietoEnator, a leading European IT services provider, has partnered with Rubicon in the UK for over three years to provide an integrated CRM solution with the TietoEnator Mortgage Finance and Savings Suite of products, known as SUMMIT. • Automated loan decisioning and processing companies e.g. loan and mortgage brokers and packagers • Companies using risk-based pricing e.g. consumer finance organisations The Board believes that the AIM admission, in addition to providing the workingcapital required to roll-out Accelerator further, will benefit the Group'scorporate profile within its target markets and increase opportunities to winnew customers. Additionally, it will enable Rubicon to incentivise and retaintalent via employee share option schemes. It also affords increased flexibilityin financing the growth of the business and any possible acquisitions in thelonger-term. DIRECTORS Rubicon's management team combines IT industry and City experience and hascomplementary skill-sets and backgrounds. The directors' biographies areoutlined below: Alistair Hancock, Chief Executive, (36)Alistair founded Rubicon in 1989 whilst completing his Computer Science degreeat St John's College, Cambridge. Alistair has been integral to the developmentof Accelerator and continues to lead its development in addition to hisresponsibilities as Chief Executive Officer. Richard Gordon, Finance Director, (52)Richard is a Chartered Accountant who, from 1991 until April 2006, was FinanceDirector at Broadcastle plc, a fully listed company which was acquired bySiemens AG in 2005. Richard was appointed Finance Director and Company Secretaryof the Group in April 2006. Between 1977 and 1982, Richard acted as a consultantproviding finance and IT-related services to a number of finance companies andbrokers. In 1982 he became a full time employee of Broadcastle Leasing Ltd. Rob Burnham, Non-executive Chairman, (57)Rob has worked in the IT services and telecoms sector for over 25 years and hasheld a variety of executive and management positions, including as a director ofLorien plc and as a director of Skillsgroup plc (renamed QA plc in April 2001).Rob now has non-executive roles with a number of private technology companies.He became Non-executive Chairman of Rubicon in November 2005. Mark Peters, Commercial Director (37)After graduating with a degree in Mathematics from the University of Bristol,Mark joined BoatComm GB Co Limited in 1992, becoming a Director in 1994. Hejoined Rubicon as Commercial Director in March 2000. Gavin Jones, Operations Director (38)Prior to joining Rubicon as Operations Director in April 2001, Gavin workedin software development and consultancy with Berkley Software where he becameOperations Director in 1999. He has an MBA from the Open University BusinessSchool. David Webber, Non-executive Director, (41)David was appointed Chief Executive of Patsystems PLC in January 2006. He wasformerly Chief Executive of AttentiV Systems Group, where he led the managementbuyout and subsequent AIM flotation of the business and was retained as ChiefExecutive when AttentiV Systems Group plc was acquired by TietoEnator in May2005. Richard Blakesley, Non-executive Director, (40)Richard has fifteen years of international investment banking experience,working as a mergers and acquisitions specialist for Lehman Brothers, ChaseManhattan and JP Morgan (where he was a Managing Director in charge of mergersand acquisitions for the TMT sector in Europe). In 2003 Richard co-founded atelecoms service provider, AdEPT Telecom, which was admitted to trading on AIMin February 2006. He is also a Director of two private companies. Substantial Shareholders upon Admission Shareholders No. of % of No. of % of Ordinary Ordinary Ordinary Enlarged Shares held Shares Shares held Share Capital prior to following on Admission Admission Admission Alistair Hancock 11,438,572 38.13 11,438,572 30.34Richard Blakesley 10,440,041 34.80 11,950,041 31.70Mark Peters 3,574,553 11.92 3,574,553 9.48Wills & Co. - - 2,000,000 5.31Gavin Jones 1,429,821 4.77 1,429,821 3.79Charles Stanley & Co. Ltd - - 1,380,000 3.66 ENDS This information is provided by RNS The company news service from the London Stock Exchange