Interim Results

FOR IMMEDIATE RELEASE 23 September 2010

UNAUDITED INTERIM RESULTS

Bond International Software plc ("the Group"), the specialist provider of software for the international recruitment and human resources industries, with operations in the UK, USA and Asia Pacific, today announces its unaudited interim results for the six months to 30 June 2010.

KEY POINTS

Commenting on the results, Group Chief Executive Steve Russell said:

·; Group revenue at £15.1m (2009: £17.1m)

·; No material change in the level of recurring revenues at £9.04m (2009: £9.04m)

·; Continuing successful transition of sales model to improve forward visibility and quality of earnings but causing a short term impact on margins and profit

·; Gross margin at 88% (2009: 92%)

·; Operating profit before amortisation of £1.1m (2009: £2.4m)

·; Pre - tax loss at £680,000 (2009 profit: £799,000)

·; Adjusted EPS of 1.34p (2009: 3.22p)

Commenting on the results, Group Chief Executive Steve Russell said:

"The second half of the year has started off on a more positive note. We are seeing some signs that the market for staffing software is recovering with some more positive decision making seen in our customer base. Whilst none of the evidence of recovery in the staffing market is conclusive and neither does it indicate the speed of recovery, the board firmly believes that the worst is over and that business will start to improve in the last quarter."

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Chairman's Statement

I am pleased to report the unaudited interim results for the six months ended 30 June 2010.

Financials

The market for staffing software has experienced some of the most difficult trading ever seen. As a consequence group revenue for the six months of £15,144,000 is 11.2% less than revenue of £17,057,000 for the equivalent period in 2009. Our gross margin has been adversely affected by the change in the mix of sales between higher margin software licences and lower margin consultancy services and has come down from 92% in 2009 to 88% in 2010. The group has taken steps to mitigate the effect of the fall in revenues and decline in margin by reducing overheads by 8% from £13,354,000 in 2009 to £12,310,000 in 2010. There has been no material change in the level of recurring revenues at £9,042,000 in 2010 (2009: £9,045,000) although recurring revenue now represents 73% of group overheads compared with 68% in 2009.

The group has made an operating profit before share of joint venture and amortisation of intangible assets of £1,062,000 (2009: £2,383,000). The company is reporting a loss before tax of £680,000 in the six months to 30 June 2010 compared with a profit before tax in 2009 of £799,000.

The group's tax credit has been affected by the inclusion of enhanced research & development credits which has resulted in a significant refund of corporation tax since the end of the half year. The adjusted earnings per share (after taking out the amortisation of intangible assets created on acquisition) were 1.34p (2009: 3.22p).

Cash generated from operations was £73,000 following a net working capital outflow of £1,257,000 arising principally from the release of deferred maintenance revenues to the income statement. The group has reduced net capital investment by nearly 11% in line with the fall in sales and the net cash outflow in the six months to 30 June 2010 is £1,796,000 bringing the net overdraft to £4,319,000 and the group's net debt including leases and other borrowings to £4,582,000.

Recruitment Software Division

The Recruitment Software Division, which comprises primarily Adapt and eEmpACT, accounted for 53% of group revenues in the first half of 2010 compared with 56% in 2009. Revenues for this division fell by 16% to £8,000,000 (2009: £9,511,000), analysed by revenue types and geographical areas as follows:

Revenue by type

The financial performance of the recruitment software division has been directly affected by a general downturn in the market for staffing software which dates back to 2009. Whilst the staffing industry is seeing significant and sustained signs of a recovery, this has yet to be reflected in demand for staffing software. As a result we have seen revenues fall by 16% in this division almost all of which is in the sale of staffing software and services with recurring revenues from software support and software rental only down by 4%. The effect on the business has been compounded by the fact that the sales of high margin software licences totalled only £750,000 in 2010 compared with £2,020,000 for the same period in 2009. The decline in software licence sales can partly be explained by lack of activity but also by the fact that the vast majority of new deals signed up in 2010 are on a rental basis which will bring benefits in the future. Revenues in our US operation have fallen by 26% to £2,956,000 (2009: £4,006,000) which is partly due to a fall in the level of new business sales and partly due to the completion of a major project in the final quarter of 2009. The shortfall has also been exaggerated by the change in the business model in the US which has seen upfront licence sales replaced by future rental. In 2010 almost every new deal signed in the first six months has generated very little in the way of upfront revenues. We have taken steps to reduce our operating costs in the US but we do not want to damage the longer term prospects for growth in the business by cutting back too far. In Asia Pacific our Japanese operation is growing with the first few contracts signed in early 2010. Whilst it will be a while before the operation is profitable, the staffing industry in Japan is of such a size that maintaining a presence here is very important for the future development of the business in the that region. Since the end of June the group has started to see some signs of improvement in the market for staffing software although it is difficult to project how quickly the demand will grow at this stage. The rate at which software support revenues are declining has reduced and we have received a number of orders for software licences and upgrades. The division already has an expectation that rental income will increase significantly during the last quarter when a number of major projects currently in deployment will be completed. Furthermore the division will benefit from the launch of two new products before the end of the year. Bond Talent is a product designed to manage the recruitment processes for corporates and enhances our existing product offering in this area. Bond Vantage is a product specifically developed for the Executive Search market.   HR and Payroll Software Division The HR and Payroll Software Division provides a range of HR and payroll products including an integrated HR, Payroll and Time & Attendance solution, an out-of-the box HR solution and a fully accredited payroll-only solution which is suitable for small and medium sized companies. The division saw revenues fall by 11% from £2,899,000 for the six months to 30 June 2009 to £2,573,000 for the same period in 2010 but improved margins from 27.6% in 2009 to 28.7% in 2010 through effective management of overheads. Around 70% of revenues in this division are recurring in nature under annually renewable maintenance contracts compared with 64% in 2009. Since 30 June 2010 the division has seen a further reduction in its operating costs although the full benefit will not be felt until 2011.  Outsourced HR & Payroll Services The division comprises Strictly Education which provides outsourced services to the state school sector and Bond Payroll Services which provides outsourced payroll services to a range of private and public sector organisations. The division has seen a 9% growth in revenues to £2,598,000 (2009: £2,382,000) all of which is organic. The division has also seen its operating margin improve from 13.5% to 16.4% through increasing the average revenue per employee in 2010. This led to operating profit rising by 33% to £427,000 in the six months to 30 June 2010 compared with £321,000 for the same period last year. Since the half year the group has taken a decision to consolidate two offices which has resulted in increased efficiencies, the benefits of which will flow through in 2011. During the first half of 2010 Strictly Education was also a partner in a joint venture, Strictly Education Solutions which acquired contracts to provide outsourced services to schools in Waltham Forest. The group's share of the joint venture's profit in the six months to 30 June 2010 was £91,000. In July 2010 the group bought out the joint venture partner for a total cost of £160,000 payable in instalments over a year. The company generated revenues of £4.1m in its first 12 months of operation and an operating profit of £42,000. The acquisition allows Strictly Education to extend the range of services it provides to the education sector in areas such as ICT support, grounds maintenance, cleaning services and the provision of specialist staff such as Special Needs Assistants. Web Services The Web Services Division trades as Abacus e-media, a leading online developer specialising in the design and construction of websites, primarily for facilitating online publishing by leading media organisations such as Thomson and UBM as well as providing digital services to local authorities including e-recruitment solutions.  Although the division has seen revenues fall by 13% to £1,973,000 (2009: £2,265,000) we remain optimistic about the prospects. Recurring revenues remained at around 22% of overall revenues. The operating margin has reduced from 14.2% to 13.2% despite the requirement to relocate both the company's operations to new premises during the first half of 2010. Order intake from existing clients in the publishing sector has remained strong as the requirement to move their products on line continues and whilst it is proving difficult to secure new customers, the business currently has a healthy prospect list. The division is also looking to extend its product offering beyond its traditional B2B markets into Consumer Publishing as well looking at software to assist customers manage audience development. Product Strategy Since the group took the decision to develop Version 11 of Adapt, we have invested significant sums in research and development both in this and other products in the group. This level of expenditure has continued throughout the recession when perhaps it would have been easy to cut back with the result that the group now has a world class range of products which leave us well placed to exploit the expected upturn in our markets. Expenditure on development totalled £2,414,000 in the six months to 30 June 2010 (2009: £2,532,000). As the group reaches the end of the current development cycle we are looking at ways in which development expenditure can be reduced. The group has a number of offshore partners who provide outsourced development, the benefit of which is the ability to increase or decrease the level of resource in line with demand. Current trading and future prospects The second half of the year has started off on a more positive note. Whilst the staffing division has experienced difficult trading conditions the other divisions have proved more resilient to the effects of the recession primarily as a result of their high levels of recurring income. Consequently as the market for staffing software returns the group's revenues and profitability should improve. We are seeing some signs that the market for staffing software is recovering. The rate at which customers are reducing or cancelling maintenance has fallen to virtually nothing and, as their businesses start to grow again some of our customers have started to purchase additional user licences or upgrades. Furthermore whilst our prospect lists have remained strong throughout the recession the most common decision we have faced from customers has been to postpone the proposed investment in our software. We are now starting to see some more positive decision making. Whilst none of the evidence of recovery in the staffing market is conclusive and neither does it indicate the speed of recovery, the board firmly believes that the worst is over and that business will start to improve in the last quarter.  Chairman21 September 2010

 Consolidated income statement for the six months ended 30 June 2010 (unaudited)

The operating (loss)/profit for the period arises from the Group's continuing operations.

Consolidated statement of comprehensive income for the six months ended 30 June 2010 (unaudited)

There are no taxation effects in respect of the foreign currency translation differences made.

Consolidated balance sheet at 30 June 2010 (unaudited)

For the purposes of the cash flow statement, cash includes deposits at call with financial institutions less bank overdrafts forming part of the working capital management.

Consolidated statement of changes to shareholders' equity for the six months ended 30 June 2010 (unaudited)

1. Basis of preparation

Bond International Software plc is incorporated in England and domiciled in the United Kingdom. Its registered office is Courtlands, Parklands Avenue, Goring, West Sussex BN12 4NG and its principal activities are the provision of software solutions to companies operating in the recruitment industry, the provision of HR and payroll software and the provision of outsourced services. The financial statements are prepared in pounds sterling.

The interim financial statements do not include all of the information required for full annual financial statements and do not comply with all the requirements of International Accounting Standard (IAS) 34 'Interim Financial Reporting'.

The interim financial statements are unaudited and were approved by the Board of directors on 13 September 2010. The financial information contained in these statements does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The financial information for the year ended 31 December 2009 has been extracted from the statutory accounts for that year which received an unqualified audit report and did not contain a statement made under Section 498(2) and (3) of the Companies Act 2006, and have been filed with the Registrar of Companies.

Following publication of these results, the company is in breach of one of the financial covenants on its bank facilities. As required by IAS1 'Presentation of Financial Statements', the company's bank loan has been reclassified as repayable within one year. Discussions are currently taking place with the company's bankers to resolve the breach and the company expects to announce a resolution to this matter before the end of the year. The directors believe, based on the current forecasts and order book, the breach will have no impact on the group's ability to continue to trade as a going concern.

2. Segmental Review

(i) Operating segments

Segmental information is presented in respect of the Group's business segments. The primary business segments are based on the Group's reporting structure.

Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate and head office expenses.

2. Segmental review (cont'd)

(ii) Segmental analysis by location of operating company

(iii) Revenues by income type are:

3. Income tax (credit)/expense

4. (Loss)/earnings per share

The basic loss (six months ended 30 June 2009: earnings; year ended 31 December 2009: earnings) per share are based on the attributable loss for the period of £82,000 (six months ended 30 June 2009: profit £521,000; year ended 31 December 2009: profit £171,000) and on 33,079,000 ordinary shares (six months ended 30 June 2009: 33,009,000; year ended 31 December 2009: 33,017,000) being the weighted average number of ordinary shares in issue during the periods.

The diluted earnings per share is based on the attributable loss for the period of £82,000 (six months ended 30 June 2009: profit £521,000; year ended 31 December 2009: profit £171,000) and on 33,219,000 ordinary shares (six months ended 30 June 2009: 33,023,000; year ended 31 December 2009: 33,035,000), calculated as follows:

The Chairman's Statement refers to the earnings per share adjusted for the impact of the amortisation of certain intangible assets and share based payments. The adjusted earnings per share are based on the adjusted attributable profit calculated as follows:

5. Dividend

The proposed final dividend for 2009 of 0.8p per share was approved by the Board of Directors on 13 April 2010 and paid to shareholders on 6 August 2010. 6. Reconciliation of (loss)/profit before tax to net cash generated from operating activities

7. Post balance sheet events

On 15 July 2010 the company acquired the remaining 50% of Strictly Education Solutions Limited, formerly a joint venture, from the joint venture partner for a total consideration of £250,000 with £80,000 payable on completion and the balance in quarterly instalments over the next year. The company had revenues of £4.1m and made an operating profit of £42,000 in 2009.