13th Mar 2006 07:01
Bond International Software PLC13 March 2006 FOR IMMEDIATE RELEASE 13 March 2006 Bond International Software plc 2005 PRELIMINARY 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 preliminary results for the yearended 31 December 2005. KEY POINTS • Turnover up 45% to £13.9m (2003: £9.6m). - Continuing operations up 19% to £11.4m (2004:£9.6m) - Turnover from acquisition £2.6m • Operating profit up by 52% before interest and goodwill amortisation at £3,075,000 (2004: £2,018,000). - Continuing operations up by 37% to £2.76m (2004:£2.02m). • Pre-tax Profit up 42% to £2,668,000 (2004: £1,881,000). • EPS before goodwill amortisation up 19% to 9.2p (2004: 7.7p). • Basic EPS up 19% to 8.00p (2004:6.71p) • Shareholders funds up 25% to £10.6m (2004: £8.5m) • Proposed dividend of 1 pence per share. • Feb 2005 acquisition of eEmpAct Software Inc producing revenues of £2.6m and an operating profit before the amortisation of goodwill of £311,000. Commenting on the results Chief Executive Steve Russell, said: "The group has had a very successful year in 2005, and 2006 already looksextremely promising. Our order books are at a higher level than at the samestage last year and the new versions of Adapt will begin to have a positiveeffect as the year progresses. With the group's cash position and recurringrevenue growing steadily, the future looks very encouraging for 2006 andbeyond." For further information, please contact: Bond International Software plc: Tel: 01903 707070 [email protected] www.bondadapt.comSteve Russell: Group Chief ExecutiveBruce Morrison: Group Finance Director Buchanan Communications: Tel: 020 7466 5000Tim ThompsonNicola Cronk Oriel Securities Limited Tel: 020 7710 7600Nick Hyslop BOND INTERNATIONAL SOFTWARE PLC Chairman's Statement FINANCIAL OVERVIEW I am delighted to present the 2005 annual report and accounts for BondInternational Software plc. It proved to be an extremely successful year withthe group reporting record results again. Group revenues were up by over 45% to £13,924,000 (2004: £9,578,000) through acombination of increasing revenues from our continuing operations which were upby 19% and through the acquisition of eEmpACT Software Inc. This growth in revenues has enabled us to achieve a 52% rise in operating profitbefore goodwill amortisation to £3,075,000 (£2004: £2,018,000) and a 42% rise inpre-tax profits to £2,668,000 (2004: £1,881,000). The net cash inflow from operating activities in 2005 was £3,312,000 (2004:£2,179,000) and shareholders fund have increased by 25% to £10,646,000 (2004:£8,546,000). Earnings per share (before goodwill amortisation) were up 19% to9.2p (2004: 7.7p) with basic earnings per share also up 19% to 8.00p (2004:6.71p). Following these excellent results and the strong prospects for 2006, which arediscussed in more detail below, I am delighted to be able to announce that theboard is, for the first time, recommending the payment of a dividend of 1 penceper share. The dividend will be paid on 12 May 2006 to shareholders on theregister at 18 April 2006. ACQUISITIONS In February 2005 we announced the acquisition of eEmpACT Software Inc (formerlyPrairie Developments Inc) for a total consideration of $2,945, 000 of which$1,696,000 was paid upon completion with a further $1,249,000 payable inFebruary 2006. The business had net liabilities of $1,769,000 at the date ofacquisition including debt of $1,857,000. During the first ten months of our ownership eEmpACT contributed revenues of£2,562,000 and an operating profit before goodwill amortisation of £311,000. STAFF This year has seen our headcount grow significantly and we now employ over 200people in our offices around the world. We welcome the skills and experiencethat the new staff bring to the group. Our employees are vital to the results and continued development of the businessand the board joins me in thanking each one of them for their continued hardwork, loyalty and commitment. PROSPECTS The outlook for the staffing industry is positive both here in the UK and alsoin the US. The group is well placed to take advantage of the upturn in demandwith the recent launch of the next generation of Adapt software and theacquisition of eEmpACT. Our position as market leader in the UK recruitment sector remains unchallenged.Our order book is significantly higher than last year and the start of 2006 hasalready seen us sign thirty three new staffing agencies in the UK alone. We arealso excited about the prospects for our Workforce Management product in the UK.We have eleven reference sites in different vertical markets including suchprestigious names as easyJet, Matalan and Southern Water, and these provide uswith excellent credentials to make significant inroads into the corporate HRmarket. The launch of the latest version of Adapt should be the springboard to greatersuccess in winning significant business in the US. The technologicaladvancements provided by the new product will put us in a much stronger positionwhen tendering for the major accounts and we are excited by the prospect ofmaking significant inroads into the US market in the next twelve to eighteenmonths. Furthermore, with eEmpACT continuing to grow in the market for small tomid range systems, the group is well placed to become the leading provider ofsoftware solutions to the staffing industry in the US. The multilingual capabilities of the latest version of Adapt also afford thegroup the opportunity to expand into markets previously unattainable to us,particularly in areas of continental Europe and also the Far East. Whilst wehave systems in many countries around the world, they tend to be in offices ofthe major international staffing companies rather than local businesses. Adapt'smultilingual capabilities allow us to sell directly into the local markets incountries such as France, Spain and most excitingly China and other developingcountries in the Far East. Martin BaldwinChairman10 March 2006 BOND INTERNATIONAL SOFTWARE PLC Group Chief Executive's Report Overview I am delighted to report another record year for the group with an operatingprofit before the amortisation of goodwill of £3,075,000, compared with£2,018,000 in 2004. This improvement is as a result of both organic growth insales of Adapt and the successful acquisition of eEmpACT. We have achieved considerable success with our existing products and markets andcontinued to invest in the expansion of the group through acquisition andthrough our product development programme. We have also undertaken an extensive rebranding exercise which coincided withthe launch of the next generation of Adapt at the American Staffing Associationtrade show in October 2005. Adapt Recruitment This market leading innovative system, designed specifically for recruitmentconsultancies continues to prove the mainstay of our product portfolio. AdaptRecruitment is a flexible system for use in search and selection, permanentrecruitment, temporary recruitment and interim personnel. Revenues generated from the sale of Adapt Recruitment have risen by 17% to£5,670,000 compared with £4,844,000 in 2004. This has resulted from the sale ofsystems to new clients as well as the sale of additional licences, modules andconsulting services to our existing customer base. The sale of new systems has led to an increase of 13% in income from ourcustomer support of Adapt Recruitment systems to £3,085,000 compared to£2,734,000 in 2004. Adapt Vendor Managed Service Adapt VMS is a powerful product designed for use in a corporate environment.Using web-based technology, it facilitates the interface between all partiesinvolved in the recruitment process including internal HR departments, linemanagers, candidates and external recruitment consultancies. Adapt VMS is alsoused as a platform for staffing agencies in providing outsourced recruitmentservices to corporate clients. The success of this product has led to sales of Adapt VMS having grown by over53% in 2005 compared to 2004. Adapt Workforce Management Adapt Workforce Management offers seamless web interfaces to deliversophisticated workflow and accessibility to line managers and employees in acorporate environment. It has been developed using the same tools as AdaptRecruitment to optimise the HR function in the most practical way with ApplicantTracking, Absence Management, Training & Development, Health & Safety andPerformance Management. Proven database and web technology are used to offerflexibility and functionality that mirrors and automates business processeselectronically. The ability to configure the product to a customer's requirements differentiatesthe Adapt Workforce Management system from its competitors and enabled us toimplement the system at a number of major corporate clients in 2005 such asMatalan, easyJet and Southern Water. EZaccess The financial performance of the EZaccess division has continued to exceed ourexpectations with revenues of £1,207,000 and an operating profit before theamortisation of goodwill of £766,000. Recurring contracted income for supportrepresents 73% of revenues and 200% of the overheads associated with theEZaccess business. eEmpACT The board has been extremely pleased with progress at eEmpACT since we acquiredthe company in February 2005. The operation, which is based in Minneapolis andAtlanta, provides us with increased geographical coverage as well as sellingsystems into small to medium sized staffing agencies. The company has had anextremely busy first year as part of the group, selling 123 new systems andadding 1,350 users. With revenues of £2,562,000 and an operating profit beforethe amortisation of goodwill of £311,000, eEmpACT has proved to be an excellentaddition to the group's product portfolio.------------------- Analysis of turnover and operating profit by geographical region Operating profit before goodwill Turnover amortisation 2005 2004 2005 2004 £000 £000 £000 £000 United Kingdom 8,199 6,859 2,209 1,187Asia Pacific 596 573 122 161North America 5,129 2,146 744 670 13,924 9,578 3,075 2,018 UK The UK operation had an excellent year in 2005 with a 20% increase in revenuesand an 86% growth in operating profit before the amortisation of goodwill. The sale of licences and services is up 22% on 2004 with the group taking ordersfor seventy five new systems representing 1,933 new users of Adapt. This bringsthe total number of clients in the UK to 500 and users to 25,000. The sale of new systems has also enabled us to increase support revenue by 15%compared to 2004 and this will continue to increase as further systems aredeployed in 2006. It has been our strategy to increase the level of recurring income throughrental agreements for VMS, Workforce Management and an ASP version of AdaptRecruitment. The result is an increase of nearly 45% in rental income to£1,012,000 (2004: £699,000). We now have thirty four corporate clients eitherdirectly or indirectly and twenty one ASP clients. The increasing support revenue, account management sales and VMS revenues haveresulted in 118% of our UK overheads being covered by income from existingclients with recurring contracted income representing 82% of UK overheads. Asia Pacific Our Australian subsidiary had a moderate year delivering a 4% increase inrevenues compared with 2004 but with overheads increasing by more than this theoperating profit declined slightly. North America Our US operation has been strengthened by the acquisition of eEmpACT. This hasmore than doubled revenues to £5,129,000 (2004: £2,146,000) although operatingprofit before the amortisation of goodwill has only increased to £744,000 (2004:£670,000). This is as a result of an increase in the workforce in the USoperation in preparation for the launch of the new product in October 2005 andthe marketing costs associated with that launch. The benefits of this largerworkforce will be felt in 2006 as sales of the new product start to materialise. Taking our existing US operation together with the acquisition of eEmpACT, wenow have around 850 clients in North America, with approximately 11,500 users. Product Development Product development expenditure totalled £2,011,000 representing 14.5% of sales.Of this £836,000 was spent on the new generation of Adapt bringing the totalspent to date on this project to £2,174,000. The balance of product developmentexpenditure was spent on the continuing enhancement of our product range. At theend of 2005 the group employed twenty four programmers and fifteen systemdesigners representing 19% of the workforce. We believe that successful productdevelopment is critical to the future success of the group and we will continueto invest significantly in this area. People At the end of 2005 the group employed 202 staff around the world. The group'sexcellent year in 2005 is due to their hard work and commitment and I would takethis opportunity to thank them for their efforts over the last twelve months.------------------- Outlook With the worldwide staffing industry continuing to look buoyant, the group'sprospects for 2006 are very good. Our order book is higher than at the samestage last year and our prospect list looks as strong as ever. 2006 will see thestart of the wide scale deployment of our new Adapt products which will begin togenerate significant revenues for the group. I am also excited by the continuing development of our corporate businessthrough the deployment of VMS and Workforce Management systems. This is asignificant area for potential growth in the future. Steve RussellGroup Chief Executive 10 March 2006 BOND INTERNATIONAL SOFTWARE PLC Consolidated profit and loss account for the year ended 31 December 2005 Note 2005 2004 £000 £000Turnover - continuing operations 2 11,362 9,578- acquisitions 2,562 - 13,924 9,578 Cost of sales (838) (362) Gross profit 13,086 9,216 Administrative expenses (10,421) (7,415) Operating profit - continuing operations 2 2,473 1,801- acquisitions 192 - 2,665 1,801 Net interest receivable 3 80 Profit on ordinary activitiesbefore taxation 2,668 1,881 Tax on profit on ordinary activities (649) (359) Retained profit for the year 2,019 1,522 Earnings per share (pence) 3 2005 2004 Basic 8.00p 6.71p Diluted 7.82p 6.63p CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 2005 200431 DECEMBER 2005 £000 £000 Profit for the financial year 2,019 1,522 Currency translation differences on foreign currency net investments 76 9 Total recognised gains for the year 2,095 1,531 BOND INTERNATIONAL SOFTWARE PLC Consolidated balance sheet at 31 December 2005 2005 2004 £000 £000 £000 £000Fixed assets Intangible 7,343 4,026assets Tangible assets 2,647 2,520 9,990 6,546 Current assets Stock and work in progress - 41 Debtors 3,455 2,349 Cash at bank and in hand 3,511 3,768 6,966 6,158 Creditors: amounts falling due within one year (5,680) (3,501) Net current assets 1,286 2,657 Total assets less current liabilities 11,276 9,203 Creditors: amounts falling due after more than one year (598) (629) Provisions for liabilitiesand charges (32) (28) (630) (657) Net assets 10,646 8,546 Equity capital and reserves Called up share capital 252 252 Share premium account 6,209 6,204 Capital reserve on consolidation - 28 Profit and loss account 4,185 2,062 Equity shareholders' funds 10,646 8,546 BOND INTERNATIONAL SOFTWARE PLC Consolidated cash flow statement for the year ended 31 December 2005 2005 2004 £000 £000 £000 £000 Net cash inflow fromoperating activities 3,312 2,179 Returns on investmentsand servicing of finance Interest received 87 143 Interest paid (84) (63) Net cash inflow from returns oninvestments and servicingof finance 3 80 Taxation Corporation tax paid (596) (74) Overseas taxation paid (64) (30) (660) (104) Capital expenditure Payments to acquire intangiblefixed assets (836) (702) Payments to acquire tangible fixed assets (442) (309) Receipts from sale of tangible fixed assets - 18 (1,278) (993) Acquisitions Payments to acquirebusiness (1,114) (2,539) Cash acquired withsubsidiary 112 - (1,002) (2,539) Net cash inflow/(outflow) beforefinancing 375 (1,377) Financing Issue of ordinary shares 5 4,157 Expenses of share issue - (223) New hire purchase loans 62 55 Repayment of bank loans (341) (141) Repayment of other loans (359) - Repayment of hirepurchase loans (65) (34) Net cash (outflow)/inflow fromfinancing (698) 3,814 (Decrease)/Increase in cash (323) 2,437 Reconciliation of net cash flowto movement in net funds 2005 2004 £000 £000 (Decrease)/Increase in cash (323) 2,437 Decrease in bank loans 341 141 Decrease in other loans 359 - Loans and HP contractsacquired with subsidiary (1,081) - Decrease/(Increase) in hirepurchase loans 3 (21) Change in net funds (701) 2,557 Foreign currency translationdifferences 66 (9) Net funds at 1 January 2005 3,005 457 Net funds at 31 December 2005 2,370 3,005 BOND INTERNATIONAL SOFTWARE PLC Notes to the Accounts 1. The above financial information does not constitute statutory accountsas defined in section 240 of the Companies Act 1985. The above figures for theyear ended 31 December 2005 are an abridged version of the company's auditedaccounts which have received an unqualified report from the company's auditorsand will be depatched to the shareholders and filed with the Registrar ofCompanies shortly. 2. Turnover (a) The geographical analysis of turnover by destination is: 2005 2004 £000 £000 United Kingdom 7,375 6,271Rest of Europe 778 546Asia Pacific 631 588Africa 11 31North & South America 5,129 2,142 13,924 9,578 (b) Sales by product are: 2005 2004 £000 £000 Software sales & services 7,173 5,065Software support 5,123 3,472Vendor managed services 1,347 880 Software revenue 13,643 9,417Hardware & other sales 281 161 13,924 9,578 (c) Analysis of group results 2005 2004 Continuing Acquisition Continuing operations Total operations £000 £000 £000 £000 Turnover 11,362 2,562 13,924 9,578Cost of sales (395) (443) (838) (362) Gross profit 10,967 2,119 13,086 9,216Administrative expenses(excluding goodwillamortisation) (8,203) (1,808) (10,011) (7,198) 2,764 311 3,075 2,018 Goodwill amortisation (291) (119) (410) (217) Operating profit 2,473 192 2,665 1,801 3. Earnings per share The basic earnings per share is based on attributable profit for theyear of £2,019,000 (2004: £1,522,000) and on 25,221,981 ordinary shares (2004:22,673,695) being the weighted average number of ordinary shares in issue duringthe year. The diluted earnings per share is based on attributable profit for the year of£2,019,000 (2004: £1,522,000) and on 25,828,497 ordinary shares (2004:22,940,256) calculated as follows: 2005 2004 Number Number Basic weighted average number of shares 25,221,981 22,673,695Dilutive potential ordinary shares:Share options 606,516 266,561 25,828,497 22,940,256 4. Report and Accounts Copies of the Report and Accounts will be circulated to shareholders shortly andmay be obtained after the posting date from the Company Secretary, BondInternational Software Plc, Courtlands, Parklands Avenue, Goring by Sea,Worthing, West Sussex, BN12 4NG. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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