Netcall Regulatory News (NET)

20 May 2005 07:00

Netcall PLC20 May 2005 20 May 2005 NETCALL PLC ("Netcall" or "the Company") Trading Update Contract to supply QueueBuster to leading international financial institution Netcall sells telephony solutions, including its innovative flagship productQueueBuster TM, which enables call centres to manage call queuing, reduce costsand enhance customer service. St. Ives, England: Netcall plc (AIM: NET) today provides an update on trading asit approaches the end of its current financial year. A cornerstone in Netcall's strategy is building the Company's hosted servicesbusiness focussed on QueueBuster. This service allows users to route callsthrough Netcall's own systems without the need to install the product on site. Ahosted services implementation can be deployed more simply without large capitalinvestments, and the sales cycles has to date proven to be significantly shortercompared to the QueueBuster product, which is installed on customer premises. The hosted services opportunity, targeting both large and small customers,therefore addresses a much bigger market, compared to the QueueBuster productoffering, which predominantly addresses the largest call centres. The size andnumber of businesses already using the QueueBuster service confirms thisopportunity. Additionally, from Netcall's perspective, as the customer base grows, the morepredictable our revenue streams become and the less reliance Netcall will haveto place on larger contracts to install its QueueBuster products on site, whichby nature are volatile and difficult to predict. Netcall is therefore pleased to report that the hosted services business hasbeen performing strongly during the second half of the financial year and iscontinuing to show healthy quarter over quarter growth. Revenues fromQueueBuster Service have been growing at a monthly rate of 20% over the past 2quarters and hosted services revenues overall have maintained a healthy rate ofquarter-on-quarter growth over the last year. New contracts include customersacquired via sales channels, and prospects for continued growth are encouraging,giving Netcall long term confidence in the stability and quality of theCompany's revenue base. For the QueueBuster product, Netcall is also pleased to announce that it hassigned a three year Global Framework Agreement with an international financialservices company to provide its QueueBuster technology to support the company'stelephony operations. The customer, who cannot be named for reasons of confidentiality, has trialledand subsequently installed QueueBuster in a call centre which handles customertelephone calls for a number of countries within the Europe, Middle East andAfrica region, helping to increase customer satisfaction and enhanced callhandling. The complex nature and consequent extension of the negotiations of the agreementhas, however, caused an inevitable delay in the roll-out of the product beyondthe end of the current financial year. This is the type of volatility that Netcall previously highlighted and isseeking to avoid with an increased focus on the hosted services model. Netcall'slong term intention is for the business model not, as in the past, to be solelyreliant on sales of the QueueBuster product but instead to consist of a longterm annuity stream based on the provision of hosted services includingQueueBuster Service to a broad customer base. The short-term result of the roll-out delays will be that revenues and profitsfor the current financial year are likely to be less than those currentlyforecasted. This does not detract from the fact that Netcall has made significant progressand has signed its first international agreement, which lasts for a minimum ofthree years, with one of the world's largest financial organisations and thecontract has the potential to generate significant revenues moving forward. TheCompany's expenses remain under control, gross margins are being maintained andthe cash position is currently £1.4 million. Combined with the continued growthof the hosted services business, long term prospects are still thereforefavourable, and there is growing evidence that QueueBuster provides solutions tomajor customer challenges and has a demonstrable impact on user efficiency andproductivity. ENQUIRIES Netcall plc (www.netcall.com) Tel. +44(0)1480 495300Ron Elder, ChairmanHenrik Bang, Chief Executive ICIS Tel. +44 (0)20 7651 8688Archie Berens or +44 (0)7802 442486 This information is provided by RNS The company news service from the London Stock Exchange