28th Feb 2006 14:20
Manpower Software PLC28 February 2006 MANPOWER SOFTWARE PLC INTERIM REPORT FOR THE 6 MONTHS ENDED 30 NOVEMBER 2005 MANPOWER SOFTWARE PLC Interim results for the six months ended 30 November 2005 Executive Summary Manpower Software plc, the provider of workforce planning, staff scheduling andresource optimisation software, today announces its interim results for the sixmonths ended 30 November 2005. Summary Revenue in the first half of the financial year was £2.14m (2004: £2.04m),resulting in a first half loss of £0.84m (2004: £0.74m). In line with theresults achieved in previous years, the revenue and consequent loss figures inthe first half result from the timing of closure of new business. We arepresently in advanced stages of negotiating several new contract opportunitiesfor the sale of our software in each of our target markets and we expect tofinalise most of these in the second half of the financial year. The Company has benefited from key changes introduced during the course of theprevious financial year, particularly the expansion of the sales teams in allmarkets. Manpower Software remains focused entirely on the requirements of itscustomers, in markets that are substantial in size and in which we haveestablished credibility with our product solutions, market knowledge andimpressive reference installations. During the interim period: • Defence. The expanded sales force is now addressing an increasing number of opportunities in NATO and overseas Defence markets, while the UK also remains a target for further expansion. We expect to be able to announce in the second half of this financial year our first overseas defence sale in the Asia Pacific region. • Healthcare. The increasing focus by NHS Trusts on improving staff efficiency has helped to create for us a significant market opportunity. Our careful product positioning, increasing evidence of productivity improvements from within the installed base and the expanded sales team have together combined to increase significantly the number of pipeline sales opportunities. MAPS Healthroster is installed at three NHS trusts and is being evaluated under contract by a further eight. • Maritime. AP Moller-Maersk is now running MAPS live at its Danish and UK operations and we anticipate bringing its Singapore operation on stream during the course of the second half. P&O, Princess and Cunard have each continued to expand the use of MAPS Crew Manning throughout their fleets and global crew manning agents. Norwegian Cruise Line acquired further licences valued at £0.6m to enable the continued rollout of our MAPS software across its fleet. • Services. An increased focus and emphasis on the use of standard and repeatable project implementation processes has improved the quality and rigour of project management and its delivery. A short while ago our Managing Director, Richard Morgan-Evans, sustained aserious injury. I am pleased to say he is making a good recovery but at thisstage it is too early to say exactly when he will return to work. During Richard's absence, the Directors have assumed some additionalresponsibilities and, as an interim measure, have appointed Allen Swann,recently retired President of Chordiant Inc. and a former director of Oracle UK,to assist in the sales process. However, Richard's in depth knowledge of thebusiness and his drive will be missed in this period. Over the last year the Company has invested in its direct sales organisation andin a services business capable of fulfilling the increasing demands of ourtarget markets. This has resulted in a stronger sales pipeline and thecapability to deliver profitable services growth. The Directors believe thestrategic direction of the Company is clear and it will produce long term profitgrowth. In the short term, while the Company is bearing the cost of these investments,it remains highly dependent on a small number of large contracts in marketswhere considerable change is occurring , where the sales cycles are often longand complex, and where forecasting precise timing of closure has become moredifficult. Deferral or acceleration of only a few of these can have asignificant impact on the Company's results. While every effort is beingexpended to bring these contracts to closure and to enable existing stock marketprofit expectations to be achieved, the precise level of profits for the currentyear will depend critically on their timing. In the opinion of the Directors,in the current year the Company should achieve profits at least comparable tothose reported for 2004/5. Further Information Copies of the Interim Report will be sent to all shareholders and are availableto the public at the Company's Registered Office. Further information is available on the Company's web sitewww.manpowersoftware.com. Enquiries: Manpower Software plc Simon Thorne, Finance Director 020 7389 9500 Shore Capital Alex Borrelli 020 7408 4090 28 February 2006 Manpower Software plc (the "Company") Interim results for the six months ended 30 November 2005 Chairman's Statement Introduction Our strategy remains to become the leading provider of workforce planning, staffscheduling and resource optimisation software products to our chosen markets andmanagement continues to establish the foundations for profitable growth asoutlined in the 2005 Annual Report. During the period we have increased the sales and delivery capability of theCompany, enabling us to address the increasing opportunities in the globalDefence and UK NHS markets. The direct sales force is now double that comparedwith the position a year ago. We are also actively seeking new partnerships toassist with sales and delivery in these markets. The result is that thepipeline of sales opportunities for our software products in both verticalmarkets has increased significantly. In Maritime, we have expanded within ourinstalled base and are seeking further penetration into the cruise and shippingmarkets. Results Revenue in the first half of the financial year was £2.14m (2004: £2.04m),resulting in a first half loss of £0.84m (2004: £0.74m). Similar to last year,the result reflects a period-end cut-off. We are presently in advanced stagesof negotiating several new contract opportunities for the sale of our softwarein each of our target markets. We expect to finalise most of these in thesecond half of the financial year. Selling and operational expenses increasedfrom £1.5m to £1.86m, as the Company grew its sales and delivery capabilities todrive extra demand for its products. Office and administrative costs fell from£0.73m to £0.67m. Operational Review Defence During the first half, management has focused on working with our existingdefence customers in the UK and NATO to increase their use of our products,developing our sales and delivery capabilities and expanding the pipeline ofopportunities overseas. Overall, the Defence market offers significantopportunities for growth as defence forces worldwide re-align to address newstrategic objectives and, as a result, recognise the increasing relevance of theMAPS software. We have also to date signed two new contracts with NATO, together valued at£0.2m. The first extends the use of MAPS throughout its peacetime establishmentand the second enables us to support Allied Command Transformation in therequirements for global force generation. NATO's role has changed with the newera of 21st century warfare. Working with Allied Command Transformation, wehave developed a software solution that shows how technology may be used by NATOfor force generation. Our MAPS system was used by NATO at its Global ForceGeneration conference in November 2005. We are now working with NATO to offer apermanent solution to address these challenges and those of its member nations. We expect to be able to announce in the second half of this financial year ourfirst overseas defence sale in the Asia Pacific region. Our MAPS Crew Manningsoftware is currently being installed on two ships, with the intention beingthat it will be rolled-out to the nation's Fleet under contract this year. Thecontract will be for software licences and first year support, the majority ofwhich will be capable of recognition as revenue in the second half. Healthcare In Healthcare, the existing live installations are generating strongreferenceable results and our software is now being evaluated under contract bya further eight Trusts. These Trusts will use MAPS Healthroster to control the amounts spent ontemporary staff, agency nurses and overtime, to reduce administration overheadand improve the use of staff time, to provide greater management control, costtransparency and patient care, and to comply with clinical governancerequirements. Manpower Software has been chosen by all its customers in the NHSbecause we are uniquely positioned to offer a practical solution to theseproblems. Management is focused on expanding the direct and indirect sales capabilities,refining the product proposition and shortening product procurement timescales.Our MAPS Healthroster product addresses a major structural requirement withinevery NHS Trust - to control staff costs (particularly permanent and temporaryagency spend), to fulfil staff requirements more efficiently and to improvepatient care through the efficient deployment of staff. As the NHS and eachTrust Board increasingly focus on employee cost productivity and patient care,the potential for the MAPS Healthroster product is becoming increasinglysignificant.ealthroster product addresses aHH Maritime In the Maritime sector, we have continued to focus on our existing installedclient base, are seeking further penetration into the cruise market andextending our sales pipeline into the broader shipping market following oursuccesses at AP Moller-Maersk. AP Moller-Maersk is now running MAPS live at its Danish and UK operations and weexpect to bring the Singapore operation on stream during the course of thesecond half. We have agreed terms with AP Moller-Maersk for the supply of a 12month fixed term services agreement, value £0.5m, which will help the Companyunderpin its services revenues in the second half of this financial year and thefirst half of next. We also anticipate the requirement from them for additionallicences as they expand their business by acquisition. During the interimperiod the Company delivered additional software licences to Norwegian CruiseLine (£0.6m). P&O, Princess and Cunard have also continued to expand the use ofMAPS Crew Manning throughout their fleets and global crew manning agents. Partner Programme During the period under review the Company signed partnership agreements withthe organisations for NHS Finance and HR Directors, both of which have endorsedour MAPS software for use by their members. Work is underway with them todevelop joint branding for the NHS market. These relationships are alreadyproving productive, with a number of new leads and enhanced contact across theNHS. Discussions continue with other NHS related organisations and establishedservice providers under the NHS "Local Service Provider" programme. Client Services During the period, the Client Services team placed an increased focus andemphasis on the use of standard and repeatable project implementation processes,improved quality of project delivery and rigorous project management. First half successes included, in Defence, major projects being delivered for HQLand Command (British Army), NATO and an overseas pilot. In Maritime, implementations of MAPS were successfully completed for A.P.Moller-Maersk in their Copenhagen and London operations. This resulted in A.P.Moller-Maersk signing a new twelve month Services agreement, ensuring ClientServices support for their plans to expand the use of MAPS to other operationalareas of their organisation. P&O Cruises and Princess Cruise Line havecontinued to expand their use of MAPS Crew Manning to their fleet of ships andglobal manning agents. Norwegian Cruise Line has continued to use and expandthe use of MAPS Crew Manning within its organisation. Carnival Cruisescontinues to work with us to implement MAPS Crew Manning both shore-side andship-side, with the initial shore-side implementations planned to completeduring the first half of 2006. In Healthcare, the MAPS implementations at the Plymouth Hospitals, Ashford & StPeter's and Hartlepool NHS Trusts are now delivering tangible benefits to thosecustomers. In addition, pilot projects are being successfully completed inother NHS trusts, which is leading to a significant pipeline of services revenuefor the second half of this financial year and the first half of next. Outlook In Defence, there is a high level of interest in Manpower Software's productsfrom many defence organisations in the UK and overseas. We are currentlyseeking to exploit the opportunities in domestic and overseas defence marketsand are committed to achieving our objective of being the leading provider offorce generation and deployment software products. In Healthcare, we anticipate that the increasing focus throughout the NHS onimproving employee cost productivity, reducing agency spend and improvingpatient care, the increase in the sales team and the completion of currentpilots will lead to continuing expansion of the sales pipeline and further salesof the MAPS Healthroster product to other NHS Trusts. In Cruise and Maritime, we remain focused upon achieving successful rollouts toour existing customers. We are also seeking further penetration into the cruisemarket and to extend our sales pipeline into the broader shipping market. Over the last year the Company has invested in its direct sales organisation andin a services business capable of fulfilling the increasing demands of ourtarget markets. This has resulted in a stronger sales pipeline and thecapability to deliver profitable services growth. The Directors believe thestrategic direction of the Company is clear and it will produce long term profitgrowth. In the short term, while the Company is bearing the cost of these investments,it remains highly dependent on a small number of large contracts in marketswhere considerable change is occurring , where the sales cycles are often longand complex, and where forecasting precise timing of closure has become moredifficult. Deferral or acceleration of only a few of these can have asignificant impact on the Company's results. While every effort is beingexpended to bring these contracts to closure and to enable existing stock marketprofit expectations to be achieved, the precise level of profits for the currentyear will depend critically on their timing. In the opinion of the Directors,in the current year the Company should achieve profits at least comparable tothose reported for 2004/5. Terry Osborne Chairman 28 February 2006 INDEPENDENT REVIEW REPORT TO MANPOWER SOFTWARE PLC INTRODUCTION We have been instructed by the company to review the financial information forthe six months ended 30 November 2005 which comprises the consolidated profitand loss account, the statement of total recognised gains and losses, theconsolidated balance sheet, the consolidated cash flow statement and the relatednotes 1 to 8. We have read the other information contained in the interim reportwhich comprises only the Chairman's Statement and considered whether it containsany apparent misstatements or material inconsistencies with the financialinformation. Our responsibilities do not extend to any other information. This report is made solely to the company's members, as a body, in accordancewith guidance contained in APB Bulletin 1999/4 "Review of Interim FinancialInformation". Our review work has been undertaken so that we might state to thecompany's members those matters we are required to state to them in a reviewreport and for no other purpose. To the fullest extent permitted by law, we donot accept or assume responsibility to anyone other than the company and thecompany's members as a body, for our review work, for this report, or for theconclusion we have formed. DIRECTORS' RESPONSIBILITIES The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directorsare responsible for preparing the interim report and ensuring that theaccounting policies and presentation applied to the interim figures should beconsistent with those applied in preparing the preceding annual accounts exceptwhere any changes, and the reasons for them, are disclosed. REVIEW WORK PERFORMED We conducted our review in accordance with guidance contained in Bulletin 1999/4"Review of Interim Financial Information" issued by the Auditing Practices Boardfor use in the United Kingdom. A review consists principally of makingenquiries of management and applying analytical procedures to the financialinformation and underlying financial data and, based thereon, assessing whetherthe accounting policies and presentation have been consistently applied unlessotherwise disclosed. A review excludes audit procedures such as tests ofcontrols and verification of assets, liabilities and transactions. It issubstantially less in scope than an audit performed in accordance with UnitedKingdom auditing standards and therefore provides a lower level of assurancethan an audit. Accordingly, we do not express an audit opinion on the financialinformation. REVIEW CONCLUSION On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 November 2005. GRANT THORNTON UK LLPCHARTERED ACCOUNTANTSLONDON 28 FEBRUARY 2006 MANPOWER SOFTWARE PLC (Unaudited) (Unaudited) (Unaudited) 6 months ended 30 6 months ended 6 months ended Nov 2005 31 May 2005 30 Nov 2004CONSOLIDATED PROFIT AND LOSS ACCOUNT For the 6 months ended 30 NOVEMBER 2005 Note £ £ £ Turnover 2,144,974 3,866,345 2,043,121 Cost of sales:Third party costs (12,967) (32,203) (65,362)Selling and operational expenses (2,328,011) (2,063,935) (1,987,344) Gross (loss)/profit (196,004) 1,770,207 (9,585) Administrative expenses (655,104) (696,692) (735,193) Operating (loss)/profit (851,108) 1,073,515 (744,778) Interest receivable 9,176 1,547 6,187 Interest payable - - (332) (Loss)/profit on ordinary activities before (841,932) 1,075,062 (738,923)taxation Taxation (854) (1,439) (6,044) (Loss)/profit on ordinary activities after (842,786) 1,073,623 (744,967)taxation Dividends - - - (Loss)/profit retained (842,786) 1,073,623 (744,967) (Loss)/earnings per share Basic 3 (1.90)p 2.38p (1.68)pDiluted 3 n/a 2.33p n/a STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES (Unaudited) (Unaudited) (Unaudited) 6 months 6 months 6 months ended 30 ended 31 ended 30 Nov 2005 May 2005 Nov 2004 £ £ £ (Loss)/profit for the financial period (842,786) 1,073,623 (744,967)Currency differences on opening reserves (1,452) 10,545 3,355 (844,238) 1,084,168 (741,612) MANPOWER SOFTWARE PLC (Unaudited) (Unaudited) (Unaudited) As at As at As atCONSOLIDATED BALANCE SHEET 30 Nov 2005 31 May 2005 30 Nov 2004 AT 30 NOVEMBER 2005 £ £Fixed assetsTangible assets 104,479 119,182 152,202 Current assetsDebtors 2,920,338 2,985,472 2,316,399Cash at bank and in hand 266,690 1,465,837 494,394 3,187,028 4,451,309 2,810,793 Creditors: amounts falling due within one year (1,485,230) (1,919,976) (1,396,648) Net current assets 1,701,798 2,531,333 1,414,145 Total assets less current liabilities 1,806,277 2,650,515 1,566,347 Creditors: amounts falling due after more than - - -one yearNet assets 1,806,277 2,650,515 1,566,347 Capital and reservesCalled up share capital 2,223,154 2,223,154 2,223,154Share premium account 6,456,299 6,456,299 6,456,299Profit and loss account (6,873,176) (6,028,838) (7,133,106)Equity shareholders' funds 1,806,277 2,650,515 1,566,347 MANPOWER SOFTWARE PLC (Unaudited) (Unaudited) (UnauditedCASH FLOW STATEMENT 6 months 6 months 6 months ended 30 ended 31 ended 30 For the 6 months ended 30 NOVEMBER 2005 Note Nov 2005 May 2005 Nov 2004 £ £ £ Net cash (outflow)/inflow from operating activities 6 (1,179,807) 1,008,184 (926,371) Returns on investments and servicing of financeInterest received 9,176 1,547 6,187Interest paid - - (167)Finance lease interest paid - - (165)Net cash inflow from returns on investments and 9,176 1,547 5,855servicing of finance Taxation (854) (1,439) (6,044) Capital expenditure and financial investmentPayments to acquire tangible fixed assets (27,662) (23,864) (46,094)Cash (outflow)/inflow before financing and management (1,199,147) 984,428 (972,654)of liquid resources Management of liquid resourcesSale of short term deposits - - 1,267,840 FinancingIssue of shares - - 37,320Loan repayments - - (15,160)Capital element of finance lease rentals - (12,985) -Net cash (outflow)/inflow from financing - (12,985) 22,160 (Decrease)/increase in cash (1,199,147) 971,443 317,346 MANPOWER SOFTWARE PLC NOTES TO THE INTERIM REPORT For the 6 months ended 30 NOVEMBER 2005 1 BASIS OF PREPARATION The interim financial statements have been prepared in accordance withapplicable accounting standards and under the historical cost convention. Theprincipal accounting policies of the Group have remained unchanged from thoseset out in the Group's 31 May 2005 annual report and financial statements. Theinterim financial statements have been reviewed by the Group's auditors. A copyof the auditors' review report is attached to this interim report. 2 TAXATION The tax charge for the interim period relates to profits made in the UnitedStates of America. 3 EARNINGS PER SHARE 6 months ended 6 months ended 6 months ended 30 November 2005 31 May 2005 30 November 2004 £ £ £ (Loss)/profit for the financial period (842,786) 1,073,623 (744,967) Weighted average number of shares Number Number Number of shares of shares of shares For basic earnings per share 44,463,086 44,383,053 44,245,086For diluted earnings per share N/A 45,702,541 N/A 4 DIVIDENDS No dividends have been paid or proposed for the period. 5 PUBLICATION OF NON-STATUTORY ACCOUNTS The financial information set out in this interim report does not constitutestatutory accounts as defined in Section 240 of the Companies Act 1985. Thefigures for the period ended 31 May 2005, have been calculated from thestatutory financial statements for the year ended 31 May 2005, which have beenfiled with the Registrar of Companies. The auditors' report on those financialstatements was unqualified and did not contain a statement under Section 237(2)of the Companies Act 1985. 6 NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (Unaudited) (Unaudited) (Unaudited) 6 months ended 6 months ended 6 months ended 30 Nov 2005 31 May 2005 30 Nov 2004 £ £ £ Operating (loss)/profit (851,108) 1,073,515 (744,778)Depreciation and amortisation charges 43,658 55,778 92,800Exchange differences written off 12,469 42,022 (25,982)Decrease/(increase) in debtors 65,134 (669,073) (679,558)(Decrease)/increase in creditors (449,960) 505,942 431,147Net cash (outflow)/inflow from operating activities (1,179,807) 1,008,184 (926,371) 7 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT (Unaudited) (Unaudited) (Unaudited) 6 months ended 6 months ended 6 months ended 30 Nov 2005 31 May 2005 30 Nov 2004 £ £ £ (Decrease)/increase in cash in the period (1,199,147) 971,443 317,346Capital outflow from decrease in debt and finance - - 28,145leasesChange in net debt resulting from cash flows (1,199,147) 971,443 345,491Decrease in liquid resources - - (1,267,840)Movement in net debt in the year (1,199,147) 971,443 (922,349)Net funds at the beginning of the period 1,465,837 494,394 1,416,743Net funds at the end of the period 266,690 1,465,837 494,394 8 ANALYSIS OF CHANGES IN NET DEBT (Unaudited) (Unaudited) (Unaudited) 6 months ended 6 months ended 6 months ended 30 Nov 2005 31 May 2005 30 Nov 2004 £ £ £ Cash at bank and in hand 266,690 1,465,837 494,394 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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