4th Sep 2006 07:01
Bond International Software PLC04 September 2006 FOR IMMEDIATE RELEASE 4 September 2006 BOND INTERNATIONAL SOFTWARE PLC INTERIM 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 interim results for the six months to30 June 2006. KEY POINTS - Sales increased 27% to £7.4m (2005: £5.8m) - Operating profit before amortisation of goodwill and share based payments up 21% to £1.5m (2005: £1.2m) - Pre-tax profit increased 19.5% to £1.2m (2005: £1.0m) - Earnings per share increased 14% to 3.45p (2005: 3.02p) - Planned expansion into the Far East market progressing strongly Commenting on the results, Group Chief Executive Steve Russell, said: "We have been pleased with the robust performance during the first half of theyear. Our markets are all performing extremely strongly and we are particularlyexcited about the opportunity in the Far East. Our sales pipeline is encouragingand we look forward to the second half with confidence." For further information, please contact: Bond International Software Plc: Tel: 01903 707070Steve Russell: Group Chief Executive e-mail: [email protected] Morrison: Finance Director Buchanan Communications: Tel: 020 7466 5000Tim Thompson e-mail : [email protected] Cronk Oriel Securities Limited: Tel: 020 7710 7600Andrew Edwards Bond International Software Plc and Subsidiary Companies Chairman's Statement I am delighted to announce record results for the six months ended 30 June 2006.Group revenues increased by more than 27% to £7,434,000 (2005: £5,831,000)resulting in a 21% rise in operating profit (before the amortisation of goodwilland the impact of the new accounting standard on share based payments) to£1,507,000 (2005: £1,249,000). The rise in revenues has been driven by a 40% increase in the sale of softwareand services to £3,923,000 (2005: £2,801,000). This in turn has led to anincrease in income from software support of 21% to £2,669,000 (2005:£2,213,000)as new customers go live. Rental income from AdaptVMS and our ASP clientscontinued to grow in the first half of 2006, up 16% to £676,000 (2005:£579,000). We have experienced growth in all the major geographical markets in which weoperate compared to the same period last year with revenues in the UK up by 33%to £4,167,000 (2005: £3,131,000), in North America up by 23% to £2,609,000(2005:£2,117,000) and in Asia Pacific up by 48% to £400,000 (2005: £270,000). The financial position of the group was further strengthened by the placing of£3,000,000 of new shares with institutional shareholders. The decision toproceed with the placing was based on the need to satisfy institutional demandand to provide funding to assist the group in pursuing its strategy for growth,both through acquisition and product development. The board was delighted withthe confidence shown in the group by the institutional investors who took up thenew shares. The placing has allowed the group to increase its net cash by £1,459,000 despitethe exceptional demands on the group's cash flow in the first six months of2006. With debtor days up slightly on the year end, the group's working capitalrequirement has increased during the first half and this coupled with thepayment of the deferred consideration of £718,000 and the company's firstdividend of £252,000 has led to a net cash outflow before financing of£1,409,000 in the period to 30 June 2006. The board believes the company willexperience strong cash flow in the second half of the year. UK & Europe Sales in the UK & Europe have increased by nearly 29% to £4,401,000 in the firsthalf of 2006 (2005: £3,417,000). The strong growth in sales has been driven bothby revenue from new clients and from existing clients through the sale ofadditional licences and services, rental income and support. In the first six months of 2006 we sold 64 new systems covering 830 users, and19 ASP deals covering 58 users. These deals were worth £1,230,000 in capitalsales and once they are all installed they will provide £241,000 of recurringincome, either through monthly rentals or annual support agreements. When taken together with the revenue from existing clients, the sale of softwareand services produced revenues of £2,267,000 in the period to 30 June 2006 whichwere 61% up on the same period last year (2005: £1,409,000). Our corporate business continues to develop with such notable new orders as BAConnect and Yorkshire Water. North America The growth of our North American operation continues apace with sales up 23% inthe six months to 30 June 2006 to £2,609,000 (2005: £2,117,000). The companyrecently established two new offices on the West Coast, one in San Francisco andone in San Diego, to improve access to the estimated 3,500 staffing companiesbased in California. Our US operation sold 20 new Adapt systems covering 585 new users and 50 neweEmpACT systems representing 239 new users. Australia and Asia Pacific Our Australian operation had a record first half of 2006 with sales up 48% to£400,000 (2005: £270,000) as we continue to strengthen our position in theAustralian and Asia Pacific markets. We sold 8 new systems covering 66 licencesin the first six months and have experienced strong demand for new licences andservice as our existing clients expanded. Furthermore we are using our operation in Australia as a platform from which tolaunch our planned expansion into the Far East market and we recently announcedthe opening of our new office in Hong Kong. Although the group already hasclients in China, Hong Kong, Malaysia, Singapore, Thailand and Japan, we haveestablished the new office to provide full local technical support and expandour sales opportunities throughout the region. We have also signed our firstcontract to deploy Adapt in Chinese. We have also recently launched the latest version of Adapt Recruitment Softwarewhich, for the first time, is capable of handling Asian languages and charactersets. It is now able to provide integrated staffing systems throughout the FarEast using the local languages and we have signed our first agreement to providesuch a system. Product Development Product development expenditure totalled £1,068,000, representing 14.4% ofsales. Of this, £444,000 was spent on the new generation of Adapt bringing thetotal spent to date on this project to £2,617,000. The balance of thedevelopment expenditure was spent on the continuing enhancement of our existingproduct range. In the US we have developed Starsearcher, a corporate applicant tracking systembased on our eEmpACT product line and aimed at US companies with between 50 and2,500 employees. The product was launched in July 2006 at the Microsoft GlobalPartner Channel Conference and will be sold using the Microsoft Partner Networkrather than directly to customers. Prospects The outlook for the staffing industry remains positive worldwide and the groupis well placed to capitalise on the continuing growth in recruitment. Wecontinue to take orders at an encouraging rate and our sales prospect listcontains a healthy mix of medium to large sized staffing companies. Martin BaldwinChairman4 September 2006 Bond International Software Plc and Subsidiary CompaniesConsolidated profit and loss account for the six months ended 30 June 2006 Six months Year ended ended 30 June 31 December Note 2006 2005 2005 £000 £000 £000 (unaudited) (restated) (restated) (unaudited) Turnover - continuing 2 7,434 5,831 13,633operations Cost of sales (329) (324) (809) --------- --------- ----------- Gross profit 7,105 5,507 12,824 Administrative expenses (5,893) (4,493) (10,309) --------- --------- ----------- Operating profit -continuing 1,212 1,014 2,515operations Net interest receivable 8 7 5 --------- --------- ----------- Profit on ordinaryactivities 1,220 1,021 2,520before taxation Tax on profit on ordinaryactivities (328) (259) (616) --------- --------- ----------- Profit on ordinaryactivities after 892 762 1,904taxation ========= ========= =========== Earnings per share 4 Basic 3.45p 3.02p 7.55p --------- --------- ----------- Fully diluted 3.36p 2.96p 7.37p --------- --------- ----------- Bond International Software Plc and Subsidiary CompaniesConsolidated balance sheet at 30 June 2006 At 30 June At 31 December 2006 2005 2005 Note £000 £000 £000 (unaudited) (restated) (restated) (unaudited) --------- --------- ----------Fixed assets 7,470 7,020 7,352Intangible assets 2,671 2,830 2,647Tangible assets --------- --------- ---------- 10,141 9,850 9,999 ========= ========= ========== --------- --------- ----------Current assets 4,156 2,338 3,480Debtors 4,746 3,372 3,511Cash at bank and in hand --------- --------- ---------- 8,902 5,710 6,991 Creditors: amounts fallingdue (4,478) (5,210) (5,682)within one year --------- --------- ---------- Net current assets 4,424 500 1,309 --------- --------- ---------- Total assets less currentliabilities 14,565 10,350 11,308 Creditors: amounts fallingdue (454) (881) (598)after more than one year --------- --------- ---------- Net assets 14,111 9,469 10,710 ========= ========= ========== --------- --------- ----------Capital and reserves 5 278 252 252Share capital 5 9,086 6,207 6,209Share premium account 5 262 121 189Equity option reserve 5 (108) 91 115Currency translation reserve 4,593 2,798 3,945Profit and loss account --------- --------- ---------- Equity capital and reserves 14,111 9,469 10,710 ========= ========= ========== Bond International Software Plc and Subsidiary CompaniesConsolidated cash flow statement for the six months ended 30 June 2006 Six months Year ended ended 30 June 31 December 2006 2005 2005 Note £000 £000 £000 (unaudited) (restated) (restated) (unaudited) Net cash inflow from operatingactivities 3 550 1,432 3,300 --------- --------- --------- --------- --------- ---------Returns on investments andservicing of finance 47 44 85Interest received (39) (37) (79)Interest paid --------- --------- --------- 8 7 6 --------- --------- ---------Taxation (333) - (596)UK Corporation tax paid (39) (40) (63)Overseas tax paid --------- --------- --------- (372) (40) (659) --------- --------- ---------Capital expenditure (540) (304) (836)Payments to acquire intangiblefixed assets (85) (284) (434)Payments to acquire tangiblefixed assets --------- --------- --------- (625) (588) (1,270) --------- --------- ---------Acquisitions (718) (1,010) (1,114)Payments to acquire subsidiary - 101 101Cash acquired with subsidiary --------- --------- --------- Net cash outflow from (718) (909) (1,013)acquisitions --------- --------- --------- Equity dividends paid (252) - - --------- --------- --------- Net cash outflow before (1,409) (98) 364financing --------- --------- --------- --------- --------- ---------Financing 3,000 3 5Issue of new ordinary shares (96) - -Expenses of share issue 44 69 62New hire purchase loans (42) (274) (341)Repayment of bank loans (166) (118) (358)Repayment of other loans (24) (36) (66)Repayment of hire purchaseloans --------- --------- --------- Net cash inflow/ (outflow) fromfinancing 2,716 (356) (698) --------- --------- --------- Increase/ (decrease) in cashfor 1,307 (454) (334)the period ========= ========= ========= Reconciliation of net cash flow to movement in net funds Increase/ (decrease) in cash 1,307 (454) (334) Decrease in bank loans 42 274 341 Decrease in other loans 197 77 279 Loans and HP contracts acquiredwith subsidiary - (974) (974) (Increase)/decrease in hirepurchase loans (20) (34) 4 --------- --------- ---------Change in net funds 1,526 (1,111) (684)Foreign currency translationdifferences (67) 59 49 Net funds at 1 January 2006 2,370 3,005 3,005 --------- --------- ---------Net funds at 30 June 2006 3,829 1,953 2,370 ========= ========= ========= Bond International Software Plc and Subsidiary CompaniesNotes to the financial statements 1. Basis of preparation The interim financial statements have been prepared on the basis of theaccounting policies set out in the Company's 2005 statutory accounts subject tothe following changes: (i) The adoption of Financial Reporting Standard 23, The Effects ofChanges in Foreign Exchange Rate, which requires the translation of the resultsof overseas subsidiaries into sterling at the actual rate (for which the averagerate for the period is permitted as an approximation) rather than at the closingrate as previously applied under SSAP20. In addition the goodwill arising on the acquisition of overseas subsidiariessince 1 January 2005 is now treated as an asset of the overseas subsidiary andexpressed in the currency of the overseas subsidiary. The resulting gains orlosses on retranslation are charged or credited directly to the currencytranslation reserve. In accordance with the exemption permitted under Financial Reporting Standard23, the cumulative translations differences on the net investment in overseassubsidiaries are assumed to be zero at 1 January 2005. (ii) The adoption of Financial Reporting Standard 20, Share BasedPayments, which requires the company to reflect in its profit and loss accountthe effects of share based payments such as employee share options. Thecompany's accounting policy is to charge the value of share options grantedsince 7 November 2002 to the profit and loss account on a straight line basisover the period from grant to vesting. The comparative figures for the six months ended 30 June 2005 and the year ended31December 2005 have been restated to reflect these changes of accountingpolicy. These statements are unaudited and were approved by the board of directors on 1September 2006. The financial information contained in these statements does notconstitute statutory accounts as defined in Section 240 of the Companies Act1985. The financial information for the year to 31 December 2005 has beenextracted from the statutory accounts for that year, as adjusted for the changesin accounting policy referred to above. The statutory accounts for the yearended 31 December 2005, which received an unqualified audit report, have beenfiled with the Registrar of Companies. 2. Turnover analysis (a) The geographical analysis of turnover by destination is: Six months Year ended ended 30 June 31 December 2006 2005 2005 £000 £000 £000 (unaudited) (restated) (restated) (unaudited) United Kingdom 4,167 3,131 7,375Europe 234 286 778Asia Pacific 400 270 619Africa 24 27 11North & South America 2,609 2,117 4,850 --------- --------- ----------- 7,434 5,831 13,633 ========= ========= =========== Bond International Software Plc and Subsidiary CompaniesNotes to the financial statements (continued) (b) Sales by product are: Six months Year ended ended 30 June 31 December 2006 2005 2005 £000 £000 £000 (unaudited) (restated) (restated) (unaudited)Software sales &services 3,923 2,801 7,017Software support 2,669 2,213 5,014Vendor managed services 676 579 1,334 --------- --------- -----------Software revenue 7,268 5,593 13,365Hardware & other sales 166 238 268 --------- --------- ----------- 7,434 5,831 13,633 ========= ========= =========== 3. Reconciliation of operating profit to net cash inflow fromoperating activities Six months Year ended ended 30 June 31 December 2006 2005 2005 £000 £000 £000 (unaudited) (restated) (restated) (unaudited) Operating profit 1,212 1,014 2,515Depreciation of tangiblefixed assets 133 176 338Amortisation of goodwill 214 191 403Share based paymentexpense 81 44 117Decrease in stocks - 43 43(Increase)/decrease indebtors (648) 157 (556)(Decrease)/increase increditors (442) (193) 440 --------- --------- ----------- Net cash inflow fromoperating activities 550 1,432 3,300 ========= ========= =========== 4. Earnings per share The basic earnings per share is based on attributable profit for the period of£892,000 (June 2005: £762,000; year ended 31 December 2005: £1,904,000) and on25,876,041 ordinary shares (June 2005: 25,218,770, year ended 31 December 2005:25,221,981) being the weighted average number of ordinary shares in issue duringthe periods. The adjustment to the earnings per share from basic to fullydiluted relates entirely to share options. Bond International Software Plc and Subsidiary CompaniesNotes to the financial statements (continued) 5. Reserves Share Equity Currency Profit Total Premium option translation and loss reserve reserve account £000 £000 £000 £000 £000 -------- -------- -------- -------- --------At 1 January 2006 (aspreviously 6,209 - - 4,185 10,394reported)Prior year adjustments - 189 115 (240) 64 -------- -------- -------- -------- --------At 1 January 2006 restated 6,209 189 115 3,945 10,458Currency translation - - (223) - (223)adjustmentsIssue of new ordinary shares 2,877 - - - 2,877Share based payments - 81 - - 81Share options lapsed or - (8) - 8 -exercisedProfit for the period - - - 892 892Dividend - - - (252) (252) -------- -------- -------- -------- --------At 30 June 2006 9,086 262 (108) 4,593 13,833 -------- -------- -------- -------- -------- Share Equity Currency Profit Total Premium option translation and loss reserve reserve account £000 £000 £000 £000 £000 -------- -------- -------- -------- --------At 1 January 2005 (as 6,204 - - 2,090 8,294previously reported)Prior year adjustments - 78 - (55) 23 -------- -------- -------- -------- --------At 1 January 2005 restated 6,204 78 - 2,035 8,317Currency translation - - 91 - 91adjustmentsIssue of new ordinary shares 3 - - - 3Share based payments - 44 - - 44Share options lapsed or - (1) - 1 -exercisedProfit for the period - - - 762 762 -------- -------- -------- -------- --------At 30 June 2005 6,207 121 91 2,798 9,217 -------- -------- -------- -------- -------- Share Equity Currency Profit Total Premium option translation and loss reserve reserve account £000 £000 £000 £000 £000 -------- -------- -------- -------- --------At 1 January 2005 (aspreviously 6,204 - - 2,090 8,294reported)Prior year adjustments - 78 - (55) 23 -------- -------- -------- -------- --------At 1 January 2005 restated 6,204 78 - 2,035 8,317Currency translation - - 115 - 115adjustmentsIssue of new ordinary shares 5 - - - 5Share based payments - 117 - - 117Share options lapsed or - (6) - 6 -exercisedProfit for the year - - - 1,904 1,904 -------- -------- -------- -------- --------At 31 December 2005 6,209 189 115 3,945 10,458 -------- -------- -------- -------- -------- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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