NETD.L Regulatory News (NETD)

14 Aug 2008 07:00



NetDimensions (Holdings) Limited

("NetDimensions", the "Group" or the "Company")

Interim Results for the six months ended 30 June 2008

NetDimensions is a software publisher that provides companies, government agencies and other organizations with enterprise-class performance, knowledge and learning management related software and services, enabling its clients to manage the delivery and administration of their training programs. 

NetDimensions delivers a strong trading performance

Financial Highlights

Sales for the six months to 30 June 2008 increased by 37% to US$2.94 million (2007: US$2.15 million) 

First half profit of US$0.09 million

The Group has continued to generate a positive cash flows of US$0.84 million from its operating activities in the last six months 

As at 30 June 2008, the Company had cash at bank of US$6.4 million with no borrowings

Second half results are expected to be stronger, in line with the Company's historical trends

Operations Highlights

Added 47 new clients including DAK Americas LLC, PricewaterhouseCoopers Services Pty Ltd. (Australia), The Miami Herald and Electrabel Nederland 

Formed a joint venture with a leading IT Services company listed on the Singapore Stock Exchange

Released the latest 5.0 version of flagship product, EKP

Launched ISO 9000/9001 Quality Management Program

Roger Durn, Chairman, commented: "I am pleased to present an excellent set of results. We have delivered substantial revenue growth and added 47 new clients in the last six months. We have continued to generate cash, increase revenues and invest for future growth while managing costs in a challenging economic environment.

Given that NetDimensions has traditionally generated the majority of its annual revenues in the second half of the year and that we are seeing continued growth in our target markets, the Company is confident of adding new clients in the second half of 2008 and of continuing to see substantial revenue and profit growth. "

Enquiries:

CHAIRMAN'S STATEMENT

Introduction

We are pleased to present our results for the six months to 30 June 2008. The Company made substantial progress in the first half of the year with sales increased by 37% to US$2.94 million (2007: US$2.15 million), which led to a profit of US$0.09 million for the period. Trading performance was driven by repeat business and sales to 47 new clients. 

Financial Review

For the six months to 30 June 2008, total revenues increased by 37% to US$2.94 million. License revenue increased 31% to US$1.46 million from US$1.11 million in the same period last year and hosting revenue increased 51% to US$0.98 million from US$0.65 million in the same period last year.

The Company has continued to focus on cost management and the development of direct and channel sales capabilities.

The Group's cash position remains strong with cash generated from its operating activities of US$0.84 million during the first half of fiscal 2008. As at 30 June 2008, the Company had cash of US$6.4 million with no borrowings. Deferred revenue at June 30, 2008 increased 48% to US$1.5 million from US$1.0 million in the same period last year.

The Board is currently not recommending the payment of a dividend. 

Strategy

During the period under review, we continued to deliver on the strategy set out at the time of our IPO, focusing on the following three areas:

Creating higher value, more powerful performance, knowledge and learning management, support and assessment technology offerings

Stepping up operations capabilities, sales and marketing efforts and high-end hosted service offerings

Targeting 'best fit' enterprise clients in our core direct sales markets, including aviation and financial services, as well as sales to mid-market companies.

Operations Review

In the six months under review, we added 47 new clients including; DAK Americas LLC, PricewaterhouseCoopers Services Pty Ltd. (Australia), BASF Polyurethane (China), UIC Medical Center (Illinois, USA), The Miami Herald (Florida, USA), Stoke Council (United Kingdom), Yorkshire Housing Association (United Kingdom) and Electrabel Nederland (The Netherlands). New client wins were generated through direct and partner-led sales channels throughout the world. Many of the new clients operate in highly regulated, compliance driven environments and aim to generate efficiencies through the application of NetDimensions products.

The Company took its second step in furthering its commitment to ISO standards adherence by initiating an ISO 9000/9001 quality management program. The first step was to achieve ISO 27001 security certification for hosted services, which the Company achieved in 2007. NetDimensions expects to undergo its first ISO 9000/9001 certification audit by end-2008. Management's plan is to bring the entire Company into ISO standards compliance as soon as is appropriate.

The Company opened a new hosting operation at a data center in the United Kingdom, giving NetDimensions local hosting capabilities in all three of its global trading regions: the Americas, Asia Pacific and the Europe, Middle East and Africa region. 

Current Trading and Outlook

The current year is expected to continue to show substantial sales revenue and profit growth as compared to 2007. 

Historically, the Group achieves the greater part of its annual revenue and profit in the second half of the year. We expect second-half 2008 revenue and profit numbers to continue to reflect this trend.

We believe our target markets will continue to show demand despite the current economic uncertainties, particularly in highly regulated and compliance driven industries and also in outwardly focused, extended enterprise deployments.

These last six months have been a successful period with the Company recording substantial revenue growth. The Board is confident the Company is positioned to continue to expand.

Roger Durn

Chairman of the Board

14 August 2008

  NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED INCOME STATEMENT 

FOR THE SIX MONTHS ENDED 30 JUNE 2008

The notes on pages 8 to 13 form an integral part of these condensed consolidated interim financial statements.

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED BALANCE SHEET 

AS AT 30 JUNE 2008

The notes on pages 8 to 13 form an integral part of these condensed consolidated interim financial statements.

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 

FOR THE SIX MONTHS ENDED 30 JUNE 2008 (UNAUDITED)

FOR THE SIX MONTHS ENDED 30 JUNE 2007 (UNAUDITED)

FOR THE YEAR ENDED 31 DECEMBER 2007 (AUDITED)

NETDIMENSIONS (HOLDINGS) LIMITED

CONDENSED CONSOLIDATED CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2008

The notes on pages 8 to 13 form an integral part of these condensed consolidated interim financial statements.

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. GENERAL INFORMATION

The Company was incorporated in the Cayman Islands as a limited liability company under the Companies Law (2000) Revision on 10 July 2000.  The registered office of the Company is located at P.O. Box 309, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, British West Indies. Its principal place of business is located at 17/F., Siu On Centre, 188 Lockhart Road, Wan Chai, Hong Kong.

The principal activities of the Company and its subsidiaries (hereinafter collectively referred to as the "Group") are licensing of computer software and the provision of related services. The principal activity of the Company is investment holding.

The Company's shares were admitted to trading on the Alternative Investment Market ("AIM") of the London Stock Exchange. These condensed consolidated interim financial statements are presented in United States Dollars, unless otherwise stated, and were approved for issue by the Board of Directors on 14 August 2008.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The Company has a financial year end date of 31 December.  These condensed consolidated interim financial statements for the six months ended 30 June 2008 have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".  These condensed consolidated interim financial statements should be read in conjunction with the annual financial statements of the Group for the year ended 31 December 2007.

(a) Significant accounting policies

The condensed consolidated interim financial statements have been prepared under the historical cost convention except for certain financial assets and liabilities which are stated at fair values.

The accounting policies and methods of computation used in the preparation of these condensed consolidated interim financial statements are consistent with those used in the annual financial statements for the year ended 31 December 2007 except for the adoption of standards, amendments and interpretations issued by the International Accounting Standards Board mandatory for annual financial periods beginning 1 January 2008.

The adoption of these standards, amendments and interpretations was not material to the Group's results of operations or financial position.

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

3. SEGMENT INFORMATION

The Group operates in three geographic segments, North America, Europe, Middle East and Africa ("EMEA") and Rest of the World. These geographic segments are the basis on which the Group reports its primary segment information, as presented below:

Segmental information for the six months ended 30 June 2008:

Segmental information for the six months ended 30 June 2007:

Segmental information for the year ended 31 December 2007:

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

4. OPERATING LOSS

Operating loss is arrived after charging/(crediting):-

5. EARNINGS/(LOSS) PER SHARE

The calculation of the basic and diluted earnings/(loss) per share is based on the following data:

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

6. INTEREST IN JOINT VENTURE

Particulars of the jointly controlled entity as at 30 June 2008 are as follows: -

A summary of the financial position on the jointly controlled entity with the Company's effective interests, as at 30 June 2008 is as follows:

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

7. SHARE CAPITAL

The movement of issued share capital is as follows:

 (a) Share capital

Pursuant to the terms and conditions of the letter of appointment of the non-executive directors of the Company, on 5 April 2008, an aggregate of 25,000 ordinary shares of the Company was allotted to three non-executive directors of the Company.

(b) Share options scheme

Details of movement of the share options are as follows:

NETDIMENSIONS (HOLDINGS) LIMITED

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

8. CASH FLOWS FROM OPERATING ACTIVITIES