RNS Number:5363I
Bond International Software PLC
11 March 2003
11 March 2003
BOND INTERNATIONAL SOFTWARE PLC
PRELIMINARY RESULTS
Bond International Software plc, the specialist provider of software for the
international recruitment and human resources industries, with operations in the
UK, USA and Australia, today announces its preliminary results for the year
ended 31 December 2002.
KEY POINTS
* Turnover down 44% to #6.4m (2001: #11.4m)
* Pre-tax Loss of #1.97 million (2001: Profit #1.26m).
* Operating profit in second half of #161k (First Half Loss #2,006k)
* Sales of Adapt VMS exceed #500k in first full year of operation
* Loss per share on ongoing operations 13.33p (2001: Earnings per
share 8.03p)
Commenting on the results Chief Executive Steve Russell, said:
"Business conditions continue to improve slowly; however, the market outlook for
the early part of 2003 does still not look particularly encouraging. The steps
taken to reduce our cost base together with the improvement in recurring
revenue, the slowly improving rate of order intake and the success of the
concentration on niche markets in the USA leave us in a strong position to
weather the storm. This, in conjunction with our major product development
program, puts us in a position to benefit strongly from what we all hope will be
a more benign economic environment."
For further information, please contact:
Bond International Software Plc:
Steve Russell: Group Chief Executive Tel: 01903 707070
Martin Clements: Finance Director Tel: 01903 707070
Mob: 07808 736 111
e-mail: mclements@bond.co.uk
Buchanan Communications: Tel: 020 7466 5000
Tim Thompson
Nicola Cronk
Chairman's Statement
2002 was a difficult year for us. When I reported to you last August on the
very disappointing results for the first half year I said that we were looking
forward to profitability when the market returns.
The market has not yet returned for the larger new orders which have
traditionally been a feature of our business but we have been able to
restructure our cost base to the point where this is essentially covered by the
income stream from supporting our existing customers and our managed services
business. Sales for the year at #6.4 million were down from #11.4 million the
previous year but, as a result of the changes we made, we traded marginally
profitably in the second half of the year.
We are continuing to invest in developing our primary product, Adapt, which
remains the world's leading software for the recruitment industry and the human
resource departments of large companies. This is important as it will ensure
that we have the most appropriate product when business confidence returns but
it will mean that profitability will suffer particularly in the first half of
2003. For the year as a whole we are looking for a modest profit.
I take this opportunity to thank all our employees for supporting and guiding
the company through this most difficult period.
Martin Baldwin
Chairman
10 March 2003
Group Chief Executive's Report
OVERVIEW
This has been a year of considerable upheaval for the group. During the year our
trading operations in the U.K. and North America have both suffered
unprecedented declines in revenues. In the wake of September 11th and the
subsequent economic uncertainties, many of our major prospects have delayed new
implementations, leading to a significant fall in average order value.
Having delayed cutting the cost base in the hope that the fall out from
September 11th would be reasonably short lived, we took action to restructure
both the UK and US businesses in June 2002, reducing our overall headcount by
34%. This process has necessitated the closing of several of our offices but we
still operate from premises in the UK, the USA and Australia. As a result of the
actions taken, our cost base has been reduced by over #2 Million on an
annualised basis.
I have previously reported to you that, in the first six months of 2002, The
Group made an operating loss of #2,006k on sales of #3,175k. I am pleased to
report that as a consequence of the restructuring, The Group has returned to
profit in the second half with an operating profit of #161k on a similar level
of sales.
Though it may have been tempting during these difficult times to cut back
investment on product development we have actually chosen to increase our
commitment in order to continue enhancing our product line, ensuring that we
continue to offer the staffing market the best possible solutions to their
software needs.
At the end of such a difficult year, we now face 2003 with a lean business,
perfectly positioned to take advantage of any recovery in the UK and US markets.
ADAPT RECRUITMENT
Adapt Recruitment, with over 27,000 users in 36 countries worldwide, remains the
leading product in its market. Our policy of continuing development has allowed
us to enhance significantly its existing functionality and to add new modules
furthering its use of emerging new technologies. These allow much wider access
to the systems on a self service basis.
UK AND EUROPE
Sales in the UK and Europe fell by 30% as the major recruitment companies
delayed their investment programs. Though the average value has fallen, new
order volumes have been maintained reflecting the company's aggressive pursuit
of the business that has been available. Encouragingly, an increase in the
company's repeat business and the effects of cost control now results in 66% of
the company's overheads being covered by assured income.
ASIA PACIFIC
Despite the difficulties in the general world markets, our Australian subsidiary
had a very successful 2002, increasing sales by 45% and generating an operating
profit before management charges of nearly #100,000. We have opened an
additional office in Melbourne and have recently obtained our first business as
a result. Our strong relationship with Hays extends to this region and we have
recently, through them, won our first Australian VMS contract, with Vodafone.
NORTH AMERICA
After returning the best sales performance in nearly six years during the first
eight months of 2001, the US subsidiary has been particularly badly hit by the
uncertainties caused by the general market slowdown. New orders during the first
half of 2002 were virtually non existent resulting in our sales for the year
being 71% below the previous year. However, we have identified particular niches
within the staffing market which continue to thrive and it has been our strategy
to evolve in order to maximize our attractiveness in these areas. I am pleased
to say that this is beginning to show dividends. The USA remains our largest
potential market and with our new product versions becoming available, we feel
confident of our future performance when the climate improves.
ADAPT VMS
This is a powerful and flexible system designed for use within the managed
services environment and is therefore very attractive to the larger corporate
client. It facilitates the relationship management between all parties involved
in corporate recruitment including line managers, HR or procurement departments
and external recruitment consultancies. Launched in 2001, the business generated
by this exciting product has continued to grow and VMS sales have now exceeded
#500,000. Since the year end our US office has signed its first VMS Client,
Vedior.
ADAPT CAREERS
Adapt Careers services the needs of the Careers Service and is able to provide
all the data required for Government Statistical returns. Set up in 2001, the
division has had another good year despite the adverse trading conditions.
ADAPT HR
Once involved with HR departments because of Adapt VMS, it seemed logical to
extend the capabilities of our product range to cater for the recording needs of
the HR Department itself. Launched in late 2002 this new development has already
provided its first client.
PRODUCT DEVELOPMENT
Product development expenditure totalled #1.2 million in 2002, representing 18%
of sales. Of this, #372K was spent with third parties on a specific project
which should be completed by the end of 2003. The balance was spent internally
on the continuing enhancement of our product range. At the end of 2002 Bond
employed 16 programmers and 8 system designers representing 23% of the total
workforce.
PEOPLE
At the end of 2002 the Group employed 106 staff in five locations on three
continents. These people have faced difficult times with determination and with
certainly no small amount of loyalty to the Company and each other and I would
take this opportunity to thank them for the hard work and commitment that they
have shown over the last twelve months.
OUTLOOK
Business conditions continue to improve slowly; however, the market outlook for
the early part of 2003 does still not look particularly encouraging. The steps
taken to reduce our cost base together with the improvement in recurring
revenue, the slowly improving rate of order intake and the success of the
concentration on niche markets in the USA leave us in a strong position to
weather the storm. This, in conjunction with our major product development
program, puts us in a position to benefit strongly from what we all hope will be
a more benign economic environment.
Steve Russell
Chief Executive
10 March 2003
Consolidated Profit and Loss Account for the year ended 31 December 2002
Note 2002 2001
# #
Turnover
Continuing operations 6,399,629 10,870,419
Discontinued operations - 495,576
6,399,629 11,365,995
Cost of sales (457,396) (711,860)
Gross profit 5,942,233 10,654,135
Administrative expenses (7,787,144) (9,192,166)
Operating (loss)/profit
Continuing operations (1,844,911) 1,598,137
Discontinued operations - (136,168)
(1,844,911) 1,461,969
Loss on disposal of discontinued operations (66,000) (179,483)
(Loss)/profit on ordinary activities before interest (1,910,911) 1,282,486
Net interest payable (61,875) (25,877)
(Loss)/profit on ordinary activities before taxation (1,972,786) 1,256,609
Tax on profit on ordinary activities 1,563 (382,787)
(Loss)/profit on ordinary activities after taxation (1,971,223) 873,822
Retained (loss)/profit for the year (1,971,223) 873,822
2002 2001
# #
(Loss)/earnings per share 2
Basic - continuing operations (13.33p) 8.03p
Basic - all operations (13.79p) 6.11p
Diluted (13.79p) 6.11p
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE YEAR ENDED 31 DECEMBER 2002
2002 2001
(Loss)/profit for the financial year (1,971,223) 873,822
Currency translation differences on foreign currency net
investments (154,218) 10,490
Total (losses)/gains recognised since the last annual report (2,125,441) 884,312
Consolidated Balance Sheet as at 31 December 2002
2002 2001
# # # #
Fixed assets
Intangible assets 171,783 75,650
Tangible assets 2,623,826 2,853,359
2,795,609 2,929,009
Current assets
Stocks and work in progress 43,913 280,104
Debtors 1,891,482 3,267,309
Cash at bank and in hand 1,242,552 2,383,033
3,177,947 5,930,446
Creditors:
Amounts falling due within one year (2,551,663) (3,133,653)
Net current assets 626,284 2,796,793
Total assets less current liabilities 3,421,893 5,725,802
Creditors:
Amounts falling due after more than one
year 746,461 912,929
Provisions for liabilities and charges 49,000 61,000
(795,461) (973,929)
Net assets 2,626,432 4,751,873
Equity capital and reserves
Called up share capital 142,972 142,972
Share premium account 2,293,686 2,293,686
Capital reserve on consolidation 27,848 27,848
Profit and loss account 161,926 2,287,367
Equity shareholders' funds 2,626,432 4,751,873
Consolidated Cash Flow Statement for the year ended 31 December 2002
2002 2001
# # # #
Net cash inflow from operating activities 65,153 1,039,503
Currency translation adjustments (115,656) 4,668
Returns on investments and servicing of finance
Interest received 24,577 40,881
Interest paid (86,452) (66,758)
Net cash outflow from returns on investments and
servicing of finance (61,875) (25,877)
Taxation
Corporation tax (paid)/recovered (376,836) (221,225)
Overseas taxation paid (2,578) (9,019)
(379,414) (230,244)
Capital expenditure
Payments to acquire intangible fixed assets (98,213) (35,086)
Payments to acquire tangible fixed assets (232,405) (581,269)
Receipts from sales of tangible fixed assets 16,793 21,335
(313,825) (595,020)
Acquisitions and disposals
Purchase of minority interest in subsidiary - (50,275)
Receipts from disposal of subsidiary - 22,644
Net bank overdraft of subsidiary sold - 43,844
- 16,213
Net cash (outflow)/inflow before financing (805,617) 209,243
Financing
New bank loans - 275,000
New other loans - 89,329
New hire purchase loans 50,710 28,912
Repayment of bank loans (151,148) (159,080)
Repayment of other loans (40,017) (21,597)
Repayment of hire purchase loans (42,306) (50,572)
Net cash (outflow)/inflow from financing (182,761) 161,992
(Decrease)/increase in cash (988,378) 371,235
Reconciliation of net cash (outflow)/inflow to 2002 2001
Movement in net cash/(debt) # #
(Decrease)/increase in cash (988,378) 371,235
Decrease/(increase) in bank loans 151,148 (115,920)
Decrease/(increase) in other loans 40,017 (67,732)
(Increase)/decrease in hire purchase loans (8,404) 21,660
Change in net cash/(debt) (805,617) 209,243
Net cash/(debt) at 1 January 2002 779,326 570,083
Net cash/(debt) at 31 December 2002 (26,291) 779,326
Notes to the Accounts
1. The above financial information does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
above figures for the year ended 31 December 2002 are an abridged version of the
Company's audited accounts which will be reported on by the Company's auditors
before despatch to the shareholders and filing with the Registrar of Companies.
2. Earnings per share
The basic (loss)/earnings per share for continuing operations is
based on attributable loss from continuing operations for the year of #1,905,223
(2001 profit - #1,148,623) and on 14,297,232 ordinary shares (2001 - 14,297,232)
being the weighted average number of ordinary shares in issue during the year.
The calculation of basic (loss)/earnings per share is based on attributable loss
for the year of #1,971,223 (2001 profit - #873,822) and on 14,297,232 ordinary
shares (2001 - 14,297,232) being the weighted average number of ordinary shares
in issue during the year.
The diluted loss per share is the same as the basic loss per share. The diluted
earnings per share in 2001 was based on attributable profit for the year of
#873,822 and on 14,302,456 ordinary shares, calculated as follows:
Number
Basic weighted average number of shares 14,297,232
Dilutive potential ordinary shares:
Share options 5,224
14,302,456
3. Report and Accounts
Copies of the Report and Accounts will be circulated to shareholders shortly and
may be obtained after the posting date from the company secretary, Bond
International Software Plc, Courtlands, Parklands Avenue, Worthing, West Sussex,
BN12 4NQ.
This information is provided by RNS
The company news service from the London Stock Exchange
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