Interim Results
29 January 2010
Allocate Software plc
("Allocate Software" or "the Company")
Interim Results for the six months ended 30 November 2009
Allocate Software (AIM: ALL), the leading provider of workforce optimisation software applications to
organisations world-wide, today announces strong interim results for the six months ended 30 November 2009.
Financial Highlights
o Revenue increased by 38% to £9.0m (2008: £6.5m)
- Licence revenue increased by 14% to £3.5m (2008: £3.0m)
- Services revenue increased by 59% to £5.5m (2008: £3.4m)
- Healthcare revenue increased by 36% to £6.1m (2008: £4.5m)
o Trading profit* increased by 43% to £1.12m (2008: £0.78m)
o Trading profit* margin of 12.5% (2008: 12.1%)
o Diluted adjusted EPS (excluding share-based payments and amortisation of intangibles) increased by 10% to
1.9p (2008: 1.8p), reflecting an increase in the effective taxation rate
o Cash balances as at 30 November 2009 of £4.7m (2008: £2.8m)
* Trading profit defined as profit before amortisation, share-based payments, interest and tax
Business Highlights
o MAPS Healthroster gained 17 new NHS Trust customers (total at period-end stands at 98) with strong
pipeline for H2
o The customer base for all rostering and bank staff products combined is now 242 Trusts
o The first two sales of our new NHS e-Expenses solution were achieved within 30 days of launch
o The first stand alone sale of BSMS Trinity, the Company's new bank management solution, taking the total
bank management customer base to 146 NHS Trusts
o The first sales of our solution for electronic rostering of junior doctors and medical staff
o Announced a major strategic partnership with NHS Professionals ("NHSP"), the largest provider of flexible
staff managed services to the NHS
o MAPS Maritime Suite selected by the world's leading family entertainment company for its cruise line
business
Post Period Events
o The acquisition of Time Care AB, a leading Swedish-based software provider, to create Europe's leading
provider of workforce management software to the healthcare sector
o Raised £8.3m through a cash placing of 15.1m new ordinary shares at 55 pence per share - the placing was
substantially over subscribed
o Geographic expansion continues into Australasia with first sale of MAPS Healthroster into New Zealand
Ian Bowles, Chief Executive Officer commented: "Allocate Software continues to grow at a significant rate. We
remain focussed on strong organic growth through the expansion of the addressable market within the UK and
internationally, and the integration of the acquired businesses. The Company achieved a robust set of results in
the first half of the fiscal year and all sectors of the business continue to have a strong pipeline of
opportunities entering the second half of the year. As a result, the Directors are confident that the company's
performance for the full year will be in line with their expectations."
Enquiries:
Allocate Software Tel: +44 (0) 20 7355 5555
Ian Bowles - Chief Executive Officer
Numis Securities Tel: +44 (0) 20 7260 1000
Nominated adviser: Michael Meade / Brent Nabbs
Corporate broking: James Black
Hansard Communications Tel: +44 (0) 20 7245 1100
Justine James Tel: +44 (0) 7525 324431
Kirsty Corcoran
Chairman's Statement
Introduction
I am pleased to report continuing success for the group in the first six months of the current financial year.
Allocate Software continues to achieve strong growth as well as broadening its addressable markets within the UK
and internationally.
In 2008, the Company made its first acquisitions when it purchased Key Information Technology Systems Ltd ("KITS")
and Baum Hart & Partners ("BHP"). These acquisitions established our position in the NHS temporary staffing
solutions market and enabled us to offer a fully integrated e-rostering and bank staffing solution to both our own
customers and those of KITS and BHP. These acquisitions also delivered a significant, recurring revenue stream in
the form of support and maintenance, hosting and transaction-based services.
In December 2009, the Company made its third acquisition when it purchased Time Care AB ("Time Care"), a Swedish-
based provider of workforce management software with a strong focus on the healthcare market. The acquisition has
transformed Allocate Software into the leading provider of workforce management software for the healthcare sector
in Europe. To finance the acquisition, the Company successfully raised approximately £8.3 million through a cash
placing of 15.1m new ordinary shares. The placing was substantially over-subscribed.
Overall, the Company continues to deliver on its strategy to be the leading supplier of workforce optimisation
solutions in its chosen markets.
Results
Revenue in the first half of the financial year was £8.97m (2008: £6.48m), an increase over the same period last
year of 38%. Trading profit for the period, before adjustments for share-based payments and the amortisation of
intangible assets, was £1.12m (2008: £0.78m), an increase over last year of 43%. The resulting trading profit
margin was 12.5% (2008: 12.1%). Diluted adjusted EPS (excluding share-based payments and amortisation of
intangibles) increased by 10% to 1.9p (2008: 1.8p).
Licence revenue grew by 14% to £3.5m in comparison to the first half of 2008 (£3.0m), while Services revenue grew
by 59% to £5.5m (2008: £3.4m). By sector, Healthcare revenue in the period increased by 36% to £6.1m (2008:
£4.5m), reflecting the Company's continuing expansion within the NHS and its position as the supplier of choice
for nurse rostering products. Defence revenues in the period were flat at £1.4m (2008: £1.4m) as the Company
continued to deliver services to its existing customer base in this market sector. Maritime revenues increased by
86% to £1.2m (2008: £0.6m), reflecting the sale of new licences to two existing customers and one new customer -
the world's leading family entertainment company.
Cost of sales in the period increased from £4.6m to £6.2m, reflecting the acquisition of BHP, growth of our
Services business, strengthening of our sales capability and increased investment in research and development.
Administrative costs in the period rose from £1.0m to £1.6m, reflecting the acquisition of BHP, the relocation of
the Company's head office and an increase in administrative headcount needed to support the growth of the
company's operating activities.
Cash balances at the period-end were £4.7m (2008: £2.8m). Compared with the cash balance of £3.7m at the end of
the previous financial year, 31 May 2009, the net increase of £1.0m substantially reflects cash generated from
operations.
Organic growth
Excluding the acquisition of BHP made in December 2008:
o Revenue in the first half of the financial year was £8.2m (2008: £6.5m), an increase over the same period
last year of 27%;
o Licence revenue grew 7% in comparison to the first half of 2008;
o Services revenue grew by 44%; and
o Healthcare revenue increased 27%.
BHP is now an integral part of the Company's business. As a result, the costs of BHP are not identified
separately and it is not possible to state how much of the period's trading profit and margin are separately
attributable to BHP.
Significant activity in the period
The following significant activity occurred during the six month period ended 30 November 2009:
o Healthcare. We added 17 new NHS Trusts to our e-Rostering customer base, making a total at the period-end
of 98. This represents a 66% increase against the number of NHS Trusts who were customers 12 months ago (30
November 2008: 59) and it continues the sequential growth reported in prior periods. The addressable market for
MAPS Healthroster is Acute, Mental Health and Primary Care NHS Trusts for nurses, junior doctors, consultants and
ancillary staff. Key to choosing MAPS Healthroster is its ability to provide a better understanding of demand
versus supply of all hospital staff groups, how this is balanced against efficient use of available budgets and
how it helps reduce the administrative burden for HR, clinical and payroll staff, thereby improving patient care.
Overall, MAPS Healthroster reduces costs significantly and enhances Clinical Governance.
In October 2009, we launched our new temporary staffing solution, BSMS Trinity, which combines the three
existing temporary staffing solutions - our own MAPS Bank, BSMS which came with the acquisition of KITS and
StaffBank which came with the acquisition of BHP - to provide a best of breed solution for bank staff
management in NHS Trusts. BSMS Trinity automates the planning of bank and agency staff. It offers
innovative high performance, is simple to use ("one screen, one click") and is interoperable with ESR
(electronic staff records). The solution improves the continuity of care, ease of reporting, saves time and
reduces errors, while promoting regulatory compliance and enhancing financial returns. Three sales of BSMS
Trinity were made in the interim period, taking the total bank management customer base to 146 NHS Trusts.
In November 2009, we announced the launch of our new e-Expenses module. The module was developed in
partnership with existing customers to respond to a specific NHS problem, the need to ease the administrative
burden for staff entering, approving and processing expense claims, whilst delivering more accurate and
timely payment of expenses. This module enables staff to efficiently prepare and submit their expense claims
and streamlines the approval and payment process for managers and payroll. Two customers chose the new e-
Expenses module within 30 days of its launch to the market.
We also announced in November 2009 a strategic partnership with NHS Professionals ("NHSP") to deliver long-
term integrated services to NHS Trusts. NHSP is a Special Strategic Health Authority and the largest
provider of flexible staff managed services to the NHS. Following a competitive tendering process for an e-
Rostering partner, NHSP chose Allocate Software to deliver these services exclusively. By adding e-Rostering
to its core offering of managed flexible staff services, NHSP will be able to offer a complete managed
workforce service. The partnership is significant because it will deliver tangible benefits to NHS Trusts by
helping them to achieve major cost savings across their substantive and flexible clinical and administrative
workforce, while continuing to maintain optimum standards of clinical care. The partnership promises to
reduce and in some cases eliminate the paperwork involved in rostering and timesheets through to payroll.
In the interim period, we also achieved the first sales of our solution for electronic rostering of junior
doctors and consultants. The management of the rotas of junior doctors and consultants is a highly complex
process, which has been complicated still further by the new legislative requirements of the European Working
Time Directive ("EWTD"). The solution enables Trust Management to make objective staffing decisions,
refocusing the delivery of services to meet patient needs, to monitor and track annual leave through
increased transparency of the rotas, and ensure more equitable management of staff. Trusts are also able to
achieve 100% compliance with the EWTD.
Also in the interim period, we added additional Location Based Rostering ("LBR") functionality to MAPS
Healthroster. LBR enables staff to be rostered across multiple locations in a single roster, which is
critical for more complex areas such as theatres, clinics and medical staff rotas. It is often referred to
by our clients as "3D rostering", since it adds an extra dimension - not just who is working and when but
also where they are working. When staff work in multiple locations, such as one of many theatres or clinics,
this view of where staff are working and, as importantly, which locations are not fully staffed, is critical.
These new product and additional functionality introductions enable us to significantly increase our
addressable market, to further service the requirements of our installed base of 242 NHS customers and four
Private Healthcare customers and, therefore, to drive shareholder value.
o Defence. During the period we continued to enjoy success providing services to our UK and overseas
customers.
HQ Land Forces now use the enhanced MAPS Defence Suite products across their integrated business processes,
from Distributed Individual Training for Reserves, through to Collective Training with resource and cost data
capture, feeding into the Operational Commitments Plot. Substantial savings have been identified in the
Training budgets through improved efficiency using MAPS and further developments to the product are planned
to support this goal.
The Royal Navy successfully completed its "Global Squad Pooling Trial", which demonstrated enhanced
effectiveness in manpower utilisation in a representative sample of the Fleet. Discussions are now under way
to widen the benefits realised.
The Royal Fleet Auxiliary now uses the latest MAPS Defence Suite V6 product to support all its required ship
and shore-side business processes, resulting in the ability to achieve far greater throughput with fewer
admin staff.
In Europe, NATO uses MAPS Defence Suite for its Force Generation process and this capability has recently
been extended to provide access by all NATO Allies. MAPS Defence Suite is the single authoritative system
that holds current data on all national contributions for NATO operations and the NATO Response Forces.
Through MAPS Defence Suite, NATO Allies can monitor the assignment of all force offerings and manage their
own contributions to ensure equitable, transparent burden sharing. NATO also uses MAPS Defence Suite as an
HR system to manage its Peacetime establishment. In addition, MAPS Defence Suite is used to manage
operations and training at the NATO Special Forces Headquarters, based at Supreme Headquarters ("SHAPE") in
Mons, Belgium, for Operations Planning and Training Management.
In Australia, the Royal Australian Navy continues with the successful roll out of MAPS Defence Suite across
its entire Fleet; the project is proceeding on time and within budget.
o Maritime. In August 2009, the world's leading family entertainment company selected MAPS Maritime Suite
for its cruise line business to better manage its shore-side crew operations over the coming years and to provide
an effective crew rostering solution for both current and future ships. The requirement included an effective job
scheduling solution for both current and future new ships. Key to choosing MAPS Maritime Suite was its "out-of-
the-box" functionality, the flexibility to customise the solution to meet precise business processes and the
strength of Allocate Software as a reliable, professional and solid supplier.
Our existing customer, Norwegian Cruise Line, purchased new software licences and support for its ship, the
Norwegian Epic.
o Service and Support. Client Services continued to focus on delivering value and return on investment to
the customer base. Revenues grew 59%, driven both by deliveries to new customers and by growth in the installed
base. At the same time as managing the expansion of our client base, we have maintained high levels of client
satisfaction with regards to our staff, products and effective approach to implementation. There remains a strong
pipeline of work to be delivered across all market sectors.
The Healthcare installed base provides a significant source of on-going services work. Currently, over 100
NHS Trusts have signed contracts for the implementation of MAPS Healthroster in wards, theatres, intensive
care and other specialty areas. Our portfolio has expanded to include Location Based Rostering and Doctor
Rostering, where we have delivered several successful projects, achieving excellent results. Location based
rostering gives us greater flexibility to cover a plethora of healthcare disciplines and specialties, in
particular within Primary Care Trusts. Doctor Rostering has been extremely well received. It is compliant
with the requirements of the European Working Time Directive and has significantly enhanced the time and
capacity management of Consultants and Junior Doctors. We commenced delivery of a new product, e-Expenses,
which ensures that Healthcare Managers are able to make informed decisions for Payroll and Budgets. Our
Roster Administrator training course for nursing staff has been officially accredited by the Royal College of
Nursing as an achievement towards their continuous professional development. Completion of the four day
course counts as 24 hours Post Registration Education and Practice.
The Defence sector has many installations throughout the British Armed Forces, where there are over 6,000
users of MAPS Defence Suite. Other worldwide installations include NATO and the Royal Australian Navy, which
is supported from our new office in Sydney.
The MAPS Maritime Suite continues to be used by some of the world's largest shipping companies and cruise
lines to manage the workforce planning and associated costs of over 100,000 personnel operating on over 500
vessels throughout the world. It is also used in the Offshore Oil and Gas Exploration and Production sector
by companies such as Acergy and Maersk Oil Qatar. We are now delivering our software to the world's largest
family entertainment company.
Significant activity since the period-end
The following significant activity has occurred since the period-end:
o On 15 December 2009, we completed our third acquisition, that of Time Care, a Swedish-based provider of
workforce management software, with a strong focus on the healthcare market, for a net consideration of SEK 100
million (approximately £8.7 million). To help fund the acquisition, we successfully raised approximately £8.3
million (approximately £8.0 million net of expenses) through a cash placing of 15.1m new ordinary shares at 55.0
pence per share, with the balance being satisfied from the Company's existing cash resources.
The acquisition of Time Care provides Allocate Software with a strong geographic footprint in the Nordic
region. In Sweden, Time Care has customer relationships with some 57 of Sweden's 115 hospitals and 110 of
Sweden's 290 municipalities, all of which are attributable to the delivery of healthcare into the local
market. Time Care is the largest provider of workforce optimisation software in the Swedish healthcare
market.
o After a twelve month extensive evaluation of suppliers of e-rostering software products, the NHS London
Procurement Programme ("LPP"), acting as a procurement hub on behalf of all NHS Trusts in London, announced that
Allocate Software has achieved the status of top ranked supplier for both e-Rostering and Temporary Staff
Management solutions. A framework for the procurement of e-Rostering and Temporary Staff Management software has
been agreed for use by all Trusts in the London Strategic Health Authority. It will also be adopted in the North
West Strategic Health Authority.
o We are delighted to announce our first contract in New Zealand with Capital and Coast District Health
Board ("CCDHB"). CCDHB is the leading provider of specialist health services in the central region of New
Zealand. It operates Wellington Hospital, Kenepuru Hospital and the Kapiti Health Centre, in addition to
contracting hundreds of services from community-based health professionals. It serves about 250,000 people living
in Wellington City and its suburbs, as well as providing specialist tertiary-level care to a wider population of
approximately 900,000. CCDHB employs 3,600 full time equivalent staff with an annual payroll of more than NZD 300
million. The contract is for the provision of MAPS Healthroster across all the Tertiary and Secondary services
including Mental Health services. The contract was achieved following an intense two week on-site assessment,
which was undertaken in conjunction with our strategic alliance partner PricewaterhouseCoopers. Significantly,
the implementation of MAPS Healthroster will replace CCDH's existing e-rostering solution and interface with their
existing payroll.
Acquisitions
The Company has now made three acquisitions in the past two years. Each acquisition has been made against well
defined criteria that support our strategic objectives. The acquisition of KITS established our position in the
NHS temporary staffing solutions market and enabled us to offer a fully integrated e-rostering and bank staffing
solution to both our own customers and those of KITS. The acquisition of assets from BHP consolidated our
position in the NHS temporary staffing solutions market and brought with it a substantial source of recurring
revenue. The acquisition of Time Care has made Allocate Software the leading provider of workforce management
software for the healthcare sector in Europe. Time Care will be used as the platform from which the group will
sell its software applications into Scandinavia and Northern Europe.
While we remain focused on strong organic growth, the directors of Allocate Software believe that an acquisition-
led strategy to enter certain new geographic markets is beneficial, particularly where the target companies have
significant existing customer bases, as was the case with BHP and Time Care. It is therefore the intention of the
directors to supplement the strategy of organic growth with a policy to make further acquisitions which meet our
long standing criteria and enable us to drive long term shareholder value.
Strategy
We continue to combine a resolute focus on the four core financial and structural elements of a successful
software business with rapid commercial development:
o Consistency of revenue growth through consecutive periods. The volume of licence revenue contracts,
combined with recurring support revenues and long term services revenue agreements, gives excellent visibility for
future periods. A strong forward pipeline exists for the second half of the current financial year.
o Strong margins in service and support revenues. Revenues from services and support accounted for 61% of
total group revenues and grew by 59% compared with the first half of FY09, delivering strong operating margins
across the financial year as well as significant recurring revenue.
o Investments in high productivity activities. The close monitoring of performance and use of appropriate
incentive structures throughout the Company have helped drive investment that achieves customer satisfaction and
secures revenue growth in areas that can support high operating margins. In addition, the acquisitions of KITS,
BHP and Time Care provide an additional source of recurring revenue and growth prospects.
o Diligent expense management. The Company has established long-term targets for all categories of
expenditure. Investments in sales and marketing, services and support, and research and development are carefully
managed to enable revenue growth and margin improvements, whilst fulfilling the criteria which the Board believes
are appropriate for a world class software company. We are currently undertaking an accelerated development
programme to enhance our product platform. This will increase scalability, improve productivity and quality, and
enable wider and faster product development to support future growth. Additional development costs incurred in
relation to this programme during the interim period amounted to £0.2m (2008: £0.04m). These costs have been
written off in full in accordance with our accounting policies. We expect to incur further costs in this respect
during 2010 amounting to £0.3m (compared with £0.3m in the second half of last year) and £0.7m in the year ended
31 May 2011. These are one-time costs above our normal levels of expenditure on development.
Achievements with each of these important structural aspects have ensured the company's profitability across all
parts of its business, while also achieving exceptionally high levels of customer satisfaction.
Directorate changes
The Directors are pleased that the three year strategy defined in 2007, which focussed on profitable growth,
leadership in the Healthcare Industry, increased opportunity via new products, acquisitions and partnerships, and
targeted international markets has been successful. Today, the Company's skills and capabilities are greatly
enhanced as we enter the next strategic period and our opportunity is that much greater. However, to meet the
Company's ambitious plans over the next strategic period, the Board recognises the need for a wider set of
financial management skills allied with experience of international acquisitions. Accordingly, Simon Thorne will
step down as chief financial officer and from the Board of Allocate Software with immediate effect, and will
instead take up a new role as group financial director where he will continue to make a major contribution to the
Company's success, as he has done over the last 11 years.
The Board is pleased to announce the appointment of Chris Gale as chief financial officer, who will join the Board
and the top management team effective 15 February 2010. Chris has held senior financial roles in international
public companies within the IT industry including: Apple Inc (in USA & European HQ), Cooper and Chyan Technology
Inc (USA), Cadence Design Systems (USA & Europe), Interwoven and Clearswift (UK). In his most recent corporate
role, Chris was CFO and acting CEO of GFI, a global software and hosted solutions company.
The information that the Company is required to disclose under schedule 2(g) of the AIM rules for companies in
relation to the appointment of Chris Gale as a director of Allocate Software is set out in Appendix 1 to this
announcement.
Outlook
We are passionate about our customers and their success. By assisting our customers to meet their business
objectives, improve their internal processes and achieve proven return on investment, we aim to create a long-term
mutually beneficial relationship that delivers sustainable value.
In the first half of this financial year, there has been a particularly strong performance in the Healthcare
sector. While we remain focused on strong organic growth and the full integration of the recent acquisitions,
further acquisition opportunities are being considered against the well defined criteria that support our strategic
objectives. All sectors of the business have a strong pipeline of opportunities entering the second half and, as a
result, the Directors are confident that the Company's performance for the full year will be in line with their
expectations.
Finally, I would like to thank and recognise all Allocate Software's people for their total commitment and
contribution to the Company's continuing success.
Terry Osborne
CHAIRMAN
29 January 2010
Condensed Consolidated Income Statement
6 months to 6 months to Year to
30 November 30 November 31 May
2009 2008 2009
£'000 £'000 £'000
(unaudited) (unaudited)
Note
Revenue 8,968 6,481 15,774
Selling and operational expenses (6,245) (4,648) (10,702)
Gross profit 2,723 1,833 5,072
Administrative expenses (1,605) (1,049) (2,541)
Profit before amortisation, share-based payment, 2,531
interest and tax 1,118 784
Amortisation of intangible assets (406) (145) (678)
Share-based payment (39) (52) (97)
Total administrative expenses including share-
based payments (2,050) (1,246) (3,316)
Operating profit 673 587 1,756
Finance income 4 71 80
Finance charge (3) - (6)
Net finance income 1 71 74
Profit for the period before taxation 674 658 1,830
Tax on profit for the period (191) (23) 1,217
Profit for the period 483 635 3,047
Earnings per share 4
Basic (pence per share) 1.1p 1.4p 6.8p
Diluted (pence per share) 1.0p 1.3p 6.5p
Consolidated statement of comprehensive income
for the 6 months ended 30 November 2009
6 months to 6 months to Year to
30 November 30 November 31 May
2009 2008 2009
£'000 £'000 £'000
(unaudited) (unaudited)
Income per the income statement 483 635 3,047
Other comprehensive income:
Exchange differences on translation of foreign
operations (11) 14 21
(11) 14 21
Total comprehensive profit for the period
472 649 3,068
Condensed Consolidated Balance Sheet
30 November 30 November 31 May
2009 2008 2009
£'000 £'000 £'000
(unaudited) (unaudited)
Non-current assets
Intangible assets 2,317 650 2,723
Property, plant and equipment 652 566 673
Trade and other receivables - 102 -
Deferred tax asset 1,199 - 1,386
Total non-current assets 4,168 1,318 4,782
Current assets
Trade and other receivables 5,676 4,288 5,939
Cash and cash equivalents 4,655 2,842 3,664
Total current assets 10,331 7,130 9,603
Total assets 14,499 8,448 14,385
Equity and liabilities
Equity
Share capital 2,236 2,235 2,235
Share premium account 2 6,493 6,493
Shares to be issued - 159 213
Share-based payment reserve 367 365 328
Foreign exchange reserve 73 77 84
Retained earnings 5,091 (4,464) (1,885)
Total equity 7,769 4,865 7,468
Non-current liabilities
Borrowings 181 185 180
Total non-current liabilities 181 185 180
Current liabilities
Trade and other payables 6,502 3,351 6,690
Corporation tax 47 47 47
Total current liabilities 6,549 3,398 6,737
Total liabilities 6,730 3,583 6,917
Total equity and liabilities 14,499 8,448 14,385
Condensed Consolidated Statement of Changes in Equity
Share Share Shares Share Foreign Retained Total
capital premium to be based exchange earnings equity
issued payment reserve
reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 31 May 2008 2,235 6,493 159 314 63 (5,099) 4,165
Exchange differences on opening
reserves 14 14
Net income recognised directly in
equity 14 14
Result for the period 635 635
Total recognised income and 14 635 649
expense
Equity settled share options 51 51
At 30 November 2008 2,235 6,493 159 365 77 (4,464) 4,865
Exchange differences on opening
reserves 7 7
Net income recognised directly in
equity 7 7
Result for the period 2,412 2,412
Total recognised income and 7 2,412 2,419
expense
Options transfer on exercise (83) 83 -
Deferred consideration 54 54
Share based payment deferred tax
recognised directly in equity 84 84
Equity settled share options 45 45
At 31 May 2009 2,235 6,493 213 328 84 (1,885) 7,468
Exchange differences on opening
reserves
(11) (11)
Net income recognised directly in (11)
equity (11)
Result for the period 483
483
Total recognised income and 483
expense (11) 472
Deferred consideration (213) (213)
Issue of shares 1
2 3
Share premium transfer (6,493) 6,493
Equity settled share options 39
39
At 30 November 2009 2,236 2 - 367 73 5,091 7,769
Condensed Consolidated Cash Flow Statement
6 months to 6 months to Year to
30 November 30 November 31 May
2009 2008 2009
£'000 £'000 £'000
(unaudited) (unaudited)
Cash flow from operating activities
Profit for the period 483 635 3,047
Adjustments for:
Finance charges (1) (71) (74)
Income tax charge 191 23 85
Deferred tax 188 - (1,302)
Depreciation 115 71 169
Amortisation 406 145 678
Share-based payment 39 52 97
Decrease / (increase) in trade and other receivables 50 (1,723) (3,271)
(Decrease) / increase in trade and other payables (187) (541) 2,381
Net cash generated from / (used in) operations 1,284 (1,409) 1,810
Interest expense (3) - (6)
Income tax (expense) (191) (23) (85)
Net cash generated from / (used in) operating 1,090 (1,432) 1,719
activities
Cash flows from investing activities
Interest received 5 71 80
Payment for intangible assets - - (2,136)
Payments for property, plant and equipment (88) (114) (318)
Net cash used in investing activities (83) (43) (2,374)
Cash flows from financing activities
Repayment of borrowings - (11) (16)
Proceeds from the issue of equity shares 2 - -
Net cash generated by / (used in) financing 2 (11) (16)
activities
Net increase / (decrease) in cash and cash 1,009 (1,475) (671)
equivalents
Foreign exchange differences (18) 11 18
Cash and cash equivalents at the start of the period 3,664 4,317 4,317
Cash and cash equivalents at the end of the period 4,655 2,842 3,664
Notes to the Interim Financial Information
1. Legal status and activities
The principal activities of the group are the sale and support of workforce optimisation solutions, and the
provision of related IT services to major government, industrial and commercial customers.
The principal trading subsidiaries of the group are: Allocate Software Worldwide Limited, Allocate Software
Technology Systems Limited and Allocate Software Sdn Bhd, companies which are involved in the sale,
implementation and support of workforce optimisation solutions, and Allocate Software Inc, a company which is
involved in the sale and support of workforce optimisation solutions.
The company is a public limited liability company, incorporated and domiciled in England and Wales. The address of
its registered office is 180 Piccadilly, London W1J 9ER.
The company has its listing on the Alternative Investment Market ("AIM") of the London Stock Exchange.
2. Basis of preparation
These unaudited interim condensed consolidated financial statements are for the six month period ended 30 November
2009. They do not include all the information required for full annual financial statements and should be read
in conjunction with the consolidated financial statements of the group for the year ended 31 May 2009, which
were prepared under IFRS as adopted by the European Union (EU).
The accounting policies adopted in this report are consistent with those of the annual financial statements for the
year ended 31 May 2009 as described in those financial statements except for the adoption of IAS 1 Presentation
of Financial Statements (Revised 2007).
The following new accounting standards and amendments to existing standards are effective for the annual period
beginning on or after 1 January 2009 and have not been early adopted by the group:
IFRS 8 'Operating Segments'
IAS 23 (Revised) 'Borrowing Costs'
IFRS 3 (Revised) 'Business Combinations'
The interim financial statements have not been audited, nor have they been reviewed under ISRE 24/10 of the
Auditing Practices Board. The financial information presented does not constitute statutory accounts as
defined by section 434 of the Companies Act 2006. The group's statutory accounts for the year ended 31 May
2009 have been filed with the Registrar of Companies. The auditors, Grant Thornton UK LLP reported on these
accounts and their report was unqualified and did not contain a statement under section 237(2) or 237(3) of the
Companies Act 1985.
3. Segmental reporting
The group's primary reporting analysis is by business stream. The group's principal activities are:
a) the provision of software under a licence agreement; and
b) the provision of services such as installation, consulting, training and product support.
Revenue
30 November 30 November 31 May
2009 2008 2009
£'000 £'000 £'000
Licences 3,471 3,043 7,599
Services 5,472 3,438 7,984
Hardware and consumables 25 - 191
8,968 6,481 15,774
Attributable expenses cannot be allocated on a reasonable basis to the revenue streams above. As a result, the
segmental analysis is limited to the group revenue and the group is unable to show operating profit for the
primary segmental analysis.
In addition to the above the directors present a schedule of revenue analysed by vertical business sector:
Revenue
30 November 30 November 31 May
2009 2008 2009
£'000 £'000 £'000
Healthcare 6,090 4,467 11,073
Defence 1,361 1,371 3,007
Maritime 1,196 643 1,555
Local Government and Education 321 - 139
8,968 6,481 15,774
The internal reporting of the group's performance does not require that balance sheet information is gathered on
the basis of the business streams 'Licenses' and 'Services' reported above. This information is therefore not
accessible and as a result the segmental analysis does not include balance sheet details.
4. Earnings per share
30 November 30 November 31 May
2009 2008 2009
£'000 £'000 £'000
3,047
Profit for the year 483 635
Earnings per share
Basic (pence per share) 1.1p 1.4p 6.8p
Diluted (pence per share) 1.0p 1.3p 6.5p
Weighted average number of shares Number Number Number
of shares of shares of shares
Shares in issue at opening 44,702,625 44,702,625 44,702,625
Shares issued during the period 23,000 - -
Shares at closing 44,725,625 44,702,625 44,702,625
Weighted average shares for basic earnings per share 44,712,521 44,702,625 44,702,625
Effect of dilutive potential ordinary shares 3,183,859 2,579,091 2,348,181
Weighted average shares for diluted earnings per share 47,896,380 47,281,716 47,050,806
Adjusted earnings per ordinary share
An adjusted earnings per share has been calculated in addition to the post tax earnings per share, which eliminates
the effects of share-based payments, goodwill, amortisation of intangibles and restructuring costs attributable
to acquisitions. It has been calculated to allow shareholders to gain a clearer understanding of the trading
performance of the group. The basis of the calculation of the basic and adjusted profit per share is set out
below:
30 November 30 November 31 May
2009 2008 2009
£'000 £'000 £'000
Profit for the year attributable to shareholders 483 635 3,047
Amortisation of intangibles 406 145 678
Share-based payment 39 52 97
Deferred tax adjustment - - (1,302)
Adjusted profit for the year attributable to shareholders 928 832 2,520
Basic adjusted earnings per share 2.1p 1.9p 5.64p
Diluted adjusted earnings per share 1.9p 1.8p 5.36p
5. Related party transactions
The group had no related party transactions in the interim period for either 2009 or 2008.
6. Events after the balance sheet date
On 15 December 2009, the Company completed the acquisition of Time Care AB ("Time Care"), a Swedish-based provider
of workforce optimisation software for a net consideration of SEK 100 million (approximately £8.7 million). To
help fund the acquisition, the Company successfully raised approximately £8.3 million (approximately £8.0
million net of expenses) through a cash placing of 15.1m new ordinary shares at 55.0 pence per share, with the
balance being satisfied from the Company's existing cash resources.
APPENDIX 1
The Company is required to disclose under the AIM Rules for Companies the following information in relation to the
appointment of Christopher Davis Gale (age 54) as a director of the Company.
Current Directorships and Partnerships held by Mr Gale Directorships and Partnerships held by Mr Gale in
the last five years
CDG Financial Solutions Limited Bee Automobiles Limited
Clearswift Limited
Clearswift Systems Limited
Clearswift Sales Services Limited
Content Technologies Holdings Limited
Net-Tel Computer Systems Limited
GFI Software Limited
Other than as disclosed above, there is no further information in connection with the appointment of Mr Gale to the
Board of Allocate Software which is required to be disclosed in accordance with Rule 17 and Schedule 2(g) of the
AIM Rules for Companies.
Allocate Software plc
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