24th Sep 2007 07:02
Gresham Computing PLC24 September 2007 Embargoed until 07.00 HRS (BST)24 September 2007 Gresham Computing plc ("Gresham", the "Group" or the "Company") Interim results for the six months ended 30 June 2007 Gresham, the specialist provider of real-time financial solutions and storagesolutions, today announces its un-audited interim results for the six monthsended 30 June 2007. Highlights • Significant milestone reached with Clareti Payables Financing • Agreed contracts with a major Asia Pacific telecommunications company and launched solution in Australia • First 'FTSE sized' customer is now live • Momentum in Clareti Cash Reporting Service continues to build • Value of transactions grew over 90% to in excess of US $500 billion per day on average • Growing list of providers • Proposed placing of 2.5m shares at 110p per share announced along side the interim results raising £2.75m before expenses. Andrew Walton-Green, Gresham Chief Executive Officer, commented: "This has been an important six months for our business. We have become atrusted party of some of the biggest global banks, handling hundreds of billionsof dollars of transactions a day through our core systems. Crucially, we havenow extended our reach into the trade finance market, initially in Australia,and are already meeting the supply chain financing needs of one of the world'slargest banks and its corporate customers in that region. I am also pleased to announce a proposed placing of new Gresham shares alongside these interim results. As a company, we are committed to buildingrevenues, profitability and reputation in global markets and the proceeds fromthis placing will assist us in our pursuit of this aim." For further information please contact: Gresham Computing plcAndrew Walton-Green +44 (0)20 7653 0228 Financial DynamicsJames Melville-Ross / Matt Dixon +44 (0)20 7831 3113 24 September 2007 GRESHAM COMPUTING plc ("Gresham", the "group" or the "company") Interim results for the 6 months ended 30 june 2007 Gresham, provider of real-time financial solutions and storage solutions,announces its un-audited interim results for the 6 months ended 30 June 2007. Financials - accelerating our product to market In the first half of 2007 we continued the step change in our sales andmarketing investment to enable us to take our core products and solutions tomarket faster. We have more than doubled our sales and marketing team in the 12months to 30 June 2007 to over 30 people. We report revenues for the six monthsended 30 June 2007 of £6.4m and a loss before tax of £1.5m. Cash at the halfyear was £1.1m. Placing - £2.75m before expenses I am pleased to advise that we are today announcing, along side the interimresults, a proposed placing of 2,500,000 million new Ordinary Shares (the'Placing Shares') at a price of 110 pence per share (the 'Placing Price') withinstitutional and other investors in order to raise £2.75 million (beforeexpenses). The funds raised will be used to strengthen the Company's balancesheet, fund ongoing capital requirements and to fund expansion of the business. Clareti Cash Reporting Service ("CCRS") - momentum for SIBOS We assumed primary responsibility for this service from Cable & Wireless in thesecond quarter of 2006. In the 12 months to 30 June 2007 the value oftransactions has grown over 90% to in excess of US $500 billion per day onaverage, reflecting both the growth in the number of users and their increasingdata demands. As a result of the increasing data demands from service users, we have added twonew data providers since April 2007, raising the total number of providers totwenty four, of which: sixteen banks are now integrated to the hub and one bankis undergoing final acceptance testing. We now provide coverage of thefollowing thirteen currencies: AUD, CAD, EUR, GBP, HUF, JPY, NZD, PLN, SEK, THB,TRY, USD and ZAR. Requests for data from both potential and actual users is driving the additionof new providers onto the service. We are currently working with four new banksthat have been asked to provide data to the service at the request of trialusers of the service, which if successful would add a further four currencies tothe service, being: CHF, DKK, FIH and NOK. We have agreements for five "Browser bank users" and five "Direct bank users".As noted above, we are working to satisfy the requirements of prospective andexisting users and anticipate that much of this work will be evident in time forSIBOS, the international banking conference, which this year takes place inOctober in Boston, USA. In the banking sector, we note that the Bank of International Settlements issueda consultative report in July 2007 entitled "Progress in reducing foreignexchange settlement risk". The report highlights the need for the wider bankingcommunity to now more rapidly adopt solutions and controls to mitigate large,and often unknown, financial risks associated with cash movements. Our CCRSsolution is currently being used by a number of the largest banks in the worldto assist them in managing the exposures identified in this report. Clareti Payables Financing ("CPF") - significant contract CPF is our patent pending supply chain financing technology. The technology hasbeen designed and built over the last 3 years, designed out of our expertisegained through CCRS. We believe it is world class both in terms of innovationand performance. We are very pleased to announce that we have agreed contracts with a major AsiaPacific telecommunications company to provide our technology solution to market.We expect this deal to build in the short term to then deliver a materialimpact on our future earnings over the next few years. The service has been launched in Australia with a first 'FTSE sized' customerthat is now live. Working alongside our partners, our expectation is that thisservice will be rolled out to a number of other similar-sized businesses inAustralia over the next few years. The supply chain financing service will be provided by the telecommunicationscompany, who in turn will be working closely with a major global bank. Ourconsortium approach brings together Gresham's technology and expertise, theglobal bank's wide reaching competencies in the financial market place and anestablished telecommunications company with existing e-procurement capabilities.Gresham derives revenue on a transaction basis, following the methodology of 'software as a service'. We are pleased to be working with such highly respectedpartners each seeking a mutually beneficial result. We believe that this solution is perfectly placed to capitalise on solving theopposing needs of buyers and suppliers; namely buyers wanting to hold on totheir cash for as long as possible and suppliers who want payment as fast aspossible. By leveraging the buyer's credit rating and working with a global bankand supply chain experts, we are able to assist in unlocking working capital andproviding greater transparency of the physical and financial supply chain.Providing access to real time payment information is an effective solution andworking alongside a service provider and a bank we can provide a full servicesolution. Clareti VTL - growing the sales pipeline VTL stands for Virtual Tape Library. Clareti VTL is a data storage solution thataddresses the market need to more efficiently manage both virtual and physicalmedia (disk and tape), as well as to store and retrieve data in very large andcomplex data storage environments. While the data storage requirements of manycompanies and governmental organisations continue to grow exponentially acrossthe globe, the need to reduce energy consumption and cost per byte of datastored also increases. Clareti VTL Version 2 was released to the market for the second half of 2007.Since release, we have seen significant progress with this solution and expectto see further progress in the back half of 2007. Outlook Given the strength of our existing pipeline we believe that we will begin toreap the rewards of our investment programme during the second half of 2007. Asa result, we believe that trading for the full year to December 2007 will be inline with management's expectations. Alan HowarthChairman21 September 2007 Group income statementFor the period ended 30 June 2007 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited Notes £'000 £'000 £'000 Revenue 2 6,436 7,201 14,522Cost of goods sold (3,152) (3,924) (6,928)Gross profit 3,284 3,277 7,594 Administrative expenses (4,850) (3,761) (8,124)Trading loss 2 (1,566) (484) (530) Finance revenue 70 56 132Finance costs (12) (5) (16) Loss before tax 2 (1,508) (433) (414)Taxation 3 240 50 40Attributable to equity holders of the parent 6 (1,268) (383) (374) Loss per share (total and continuing)Basic loss per share - pence 4 (2.52) (0.76) (0.74)Diluted loss per share - pence 4 (2.52) (0.76) (0.74) Group statement of recognised income and expenseFor the period ended 30 June 2007 6 months 6 months 12 months ended ended ended 30 June 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited £'000 £'000 £'000 Exchange differences on translation of foreign operations 2 (81) (103) Net income/(expense) recognised directly in equity 2 (81) (103) Attributable loss for the period (1,268) (383) (374) Total recognised income and expense for the period (1,266) (464) (477) Group balance sheetAt 30 June 2007 At At At 30 June 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited Notes £'000 £'000 £'000ASSETSNon-current assetsProperty, plant and equipment 1,362 1,205 1,195Intangible assets 6,036 5,334 5,879 7,398 6,539 7,074Current assetsTrade and other receivables 3,711 2,634 3,543Income tax receivable 464 302 305Other financial assets 20 36 32Cash and cash equivalents 1,116 5,327 3,557 5,311 8,299 7,437 TOTAL ASSETS 12,709 14,838 14,511 EQUITY AND LIABILITIESEquity attributable to equity holders of the parentCalled up equity share capital 6 2,518 2,513 2,518Share premium account 6 10,037 10,009 10,037Other reserves 6 1,039 1,039 1,039Foreign currency translation reserve 6 (130) (110) (132)Retained earnings 6 (7,639) (6,365) (6,383) 6 5,825 7,086 7,079Non-current liabilitiesDeferred income 1,081 2,058 1,562 Current liabilitiesFinancial liabilities 0 28 0Income tax payable 0 109 121Trade, other payables and deferred income 5,803 5,557 5,749 Total liabilities 6,884 7,752 7,432 TOTAL EQUITY AND LIABILITIES 12,709 14,838 14,511 Group cashflow statementFor the period ended 30 June 2007 At At At 30 June 30 June 31 December 2007 2006 2006 Unaudited Unaudited Audited £'000 £'000 £'000Cashflows from operating activitiesTrading loss (1,566) (484) (530)Depreciation and amortisation 276 152 481Share based payment expense / (credit) 12 (9) (36)(Increase)/Decrease in trade and other receivables (166) 2,104 1,321(Decrease)/Increase in trade and other payables (603) 1,903 1,441 Cash (outflow)/inflow from operations (2,047) 3,666 2,677Net income taxes received 101 0 0 Net cash (outflow)/inflow from operating activities (1,946) 3,666 2,677 Cash flows from investing activitiesInterest received 71 56 132Purchase of property, plant and equipment (252) (42) (180)Payments to acquire intangible fixed assets (305) (262) (956) Net cash used in investing activities (486) (248) (1,004) Cash flows from financing activitiesProceeds from issue of ordinary share capital 0 0 33Interest paid (13) (5) (8)Decrease in obligations under finance leases 0 (30) (59) Net cash used in financing activities (13) (35) (34) Net (decrease)/increase in cash and cash equivalents (2,445) 3,383 1,639Cash and cash equivalents at beginning of period 3,557 1,973 1,973Exchange adjustments 4 (29) (55)Cash and cash equivalents at end of period 1,116 5,327 3,557 Notes to the financial information 1 Basis of preparation These interim financial statements are unaudited and do not constitute statutoryaccounts within the meaning of s240 of the Companies Act 1985. The interimfinancial statements have been prepared in accordance with IAS 34 'InterimFinancial Reporting' and the Listing Rules of the Financial Services Authority('FSA'). The accounting polices applied in these interim financial statementsare consistent with those applied in the Group's most recent annual financialstatements. Revenue and administrative expenses for the comparative period ended30 June 2006 has been restated to include the contribution received from Cable &Wireless in line with the treatment adopted in the financial statements for thefull year ended 31 December 2006 and as described in note 26 to those financialstatements. The impact of this change is to increase revenue in the comparativeperiod by £234,000 and increase administrative costs by £234,000. There is nochange to the reported trading loss for that period. The interim financialstatements were approved by the Board on 21 September 2007. The financialstatements for the year ended 31 December 2006, which were prepared inaccordance with International Financial Reporting Standards, as endorsed by theEuropean Union ('IFRS'), and with those parts of the Companies Act 1985applicable to companies reporting under IFRS, have been delivered to theRegistrar of Companies. The auditors' opinion on those financial statements wasunqualified and did not contain a statement made under s237 (2) or (3) of theCompanies Act 1985. These interim financial statements will be forwarded toshareholders shortly. 2 Segmental informationRevenue by source Period ended 30 June 2007 Period ended 30 June 2006 Sales to Inter- Sales to Segment Inter-segment External Segment Segment external revenue sales customers revenue sales customers £'000 £'000 £'000 £'000 £'000 £'000Asia Pacific 876 (338) 538 1,219 (121) 1,098EMEA 3,883 0 3,883 4,212 0 4,212North America 2,015 0 2,015 1,891 0 1,891 6,774 (338) 6,436 7,322 (121) 7,201 Result by segment Period ended 30 June 2007 Period ended 30 June 2006 Asia EMEA North Total Asia EMEA North Total Pacific America Pacific America £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000Segment result (254) (435) 69 (620) 36 147 384 567Unallocated expenses (946) (1,051)Trading loss (1,566) (484)Net finance revenue 58 51Loss before income tax (1,508) (433)Income tax credit 240 50Net loss for the year (1,268) (383) Revenue by business segment Period ended Period ended 30 June 2007 30 June 2006 £'000 £'000 £'000 £'000Real Time Financial Solutions Real Time Financial Solutions 3,676 3,921 IT Staff placement business 1,445 1,965 5,121 5,886Storage Solutions 1,315 1,315 6,436 7,201 Result by business Period ended 30 June 2007 Period ended 30 June 2006segment RTFS Storage Total RTFS Storage Total £'000 £'000 £'000 £'000 £'000 £'000Segment result (809) 189 (620) 609 (42) 567Unallocated expenses (946) (1,051)Trading loss (1,566) (484)Net finance revenue 58 51Loss before income tax (1,508) (433)Income tax credit 240 50Net loss for the year (1,268) (383) 3 Taxation Six months Six months Year ended ended ended 30 June 30 June 31 December 2007 2006 2006UK taxResearch and development credit (265) (50) (90)Foreign taxCorporation tax - - -Witholding tax charge 25 - 50Tax credit (240) (50) (40) 4 Loss per ordinary share Basic loss per share amounts are calculated by dividing net loss or profit forthe period attributable to ordinary equity holders of the parent by the weightedaverage number of ordinary shares outstanding during the period. Diluted loss per share amounts are calculated by dividing the net loss or profitattributable to ordinary equity holders of the parent by the weighted averagenumber of ordinary shares outstanding during the period plus the weightedaverage number of ordinary shares that would be issued on the conversion of allthe dilutive potential ordinary shares into ordinary shares. The following reflects the loss and share data used in the basic and dilutedloss per share computations: Six months Six months ended ended Year ended 30 June 30 June 31 December 2007 2006 2006 £'000 £'000 £'000Net loss attributable to equity holders of the parent (1,268) (383) (374) Number Number NumberBasic weighted average number of sharesDilutive potential ordinary shares: 50,350,890 50,269,809 50,293,800 Employee share options - - -Diluted weighted average number of shares 50,350,890 50,269,809 50,293,800 The employee share options are not dilutive because they would reduce the lossper share in both years. There have been no other transactions involving ordinary shares or potentialordinary shares between the reporting date and the date of completion of thisinterim statement. 5 Dividends paid and proposed No dividends were declared or paid during the period or comparative periods. 6 Reconciliation of movements in equity Share Share Other Currency Retained Total capital premium reserves translation earnings reserves £'000 £'000 £'000 £'000 £'000 £'000 At 1 January 2006 2,513 10,009 1,039 (29) (5,973) 7,559 Exchange differences on translation of foreign 0 0 0 (81) 0 (81)operationsShare based expense recognised in the income 0 0 0 0 (9) (9)statementIssue of shares 0 0 0 0 0 0Attributable loss for the period 0 0 0 0 (383) (383) At 30 June 2006 2,513 10,009 1,039 (110) (6,365) 7,086 Exchange differences on translation of foreign 0 0 0 (22) 0 (22)operationsShare based expense recognised in the income 0 0 0 0 (27) (27)statementIssue of shares 5 28 0 0 0 33Attributable profit for the period 0 0 0 0 9 9 At 31 December 2006 2,518 10,037 1,039 (132) (6,383) 7,079 Exchange differences on translation of foreign 0 0 0 2 0 2operationsShare based expense recognised in the income 0 0 0 0 12 12statementIssue of shares 0 0 0 0 0 0Attributable loss for the period 0 0 0 0 (1,268) (1,268) At 30 June 2007 2,518 10,037 1,039 (130) (7,639) 5,825 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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