Interim Results
Mondas PLC
12 December 2001
MONDAS PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 31 OCTOBER 2001
Mondas PLC, the financial sector and accounting solutions specialist, today
announces interim results for the half year ended 31 October 2001
HIGHLIGHTS
* Revenues grew by 96% to £1.7 million (2000: £881,263) as trading volumes
rose in both our divisions
* Strong pipeline of business for Radica Corporate Action Processing
System with significant new contract wins from blue chip customers
* Education sector remains buoyant with 18 new orders in the first half
and 100 clients in total
* Earnings before interest, taxation, depreciation and amortisation
(£320,743) (2000: (£136,998))
* Loss before taxation of £1.1 million after £758,000 of non-cash items;
loss per share 5.9p (2000: 3.4p)
* Post half year end, operational review has resulted in £150,000 charge,
but £220,000 of annualised savings
* Strategic alliances with Consort and Telekurs have extended the
opportunity to sell financial products in UK and international markets.
Tim Simon, Executive Chairman of Mondas commented:
'Mondas solutions for the financial sector are gaining credibility and,
despite a lengthened sales cycle, we continue to close deals. Resource has a
strong position in the education sector, and we believe this will continue to
be a buoyant market for Mondas.'
12 December 2001
ENQUIRIES:
Mondas PLC
Tim Simon, Chairman Tel: 01932 334600
College Hill Associates
Matthew Smallwood Tel: 020 7457 2020
Camilla Glen
INTERIM RESULTS FOR THE SIX MONTHS TO 31 OCTOBER 2001
Chairman's Statement
Introduction
The first half of our fiscal year 2001-2 has been a period of development and
progress. Mondas PLC is continuing to target the financial sector where we
believe that our skills, experience and technology are particularly
appropriate and timely.
The education sector has proved to be a buoyant market, where our Resource
32000 accounting and management information software ('Resource') continues
its success with nearly 100 education establishments as clients.
In the finance sector Mondas has sold two new products, Radica Corporate
Actions Processing System ('CAPS') and Radica Reconciliations and Exception
Control System ('RECS') and gained three new clients, Close Wealth Management
Limited ('Close'), Lloyds TSB Stockbrokers Limited ('Lloyds TSB') and Man
Securities Limited ('Man').
Results
During the period under review our turnover increased by 96% to £1,729,088
(2000: £881,263) and trading volumes rose across both segments of the business
compared to the same period in 2000.
The Group recorded a loss before interest, depreciation and amortisation of
£320,743 (2000: Loss £136,998). Group Operating Loss for the period was
£997,541 (2000: Loss £456,524) which was struck after charging goodwill
amortisation of £665,701 (2000: £309,329). The loss before tax is a result of
our continued investment in research and development, sales, marketing and in
the expansion of our professional services practice. Deferred income was
£525,644 (2000: £678,816) arising primarily from support and services revenues
received in advance. All revenues were recognised in compliance with the US
GAAP standard SOP 97-2.
The benefit of approximately £190,000 of orders received from Man and Close
will commence in the second half of the financial year. Costs were lower than
expected due to strict controls. We have conducted a review of operations to
streamline and reorganise the Group which has resulted in a once-off
restructuring charge of £150,000, which will be reflected in the current
period, relating to a small number of redundancies and a closure of
facilities. This will give rise to £220,000 of annualised savings.
Finance Sector
Our decision to enter the institutional market has resulted in a strong
pipeline of business at both a national and international level.
Following its successful implementation of CAPS, Man has since become the
first City organisation to purchase our RECS solution. These two products
address key areas of risk mitigation within the financial sector. A Web based
version of CAPS is being added to the portfolio of CAPS modules, along with
dividend processing and the ability to handle international corporate events.
In November 2001 we secured a contract with Lloyds TSB for consultancy
services and we became a founding member of the ISITC (International
Securities Association for Institutional Trade Communication) Corporate
Actions Working Group.
Our relationship with Brewin Dolphin Holdings PLC continues to develop with
the deployment of a Portfolio Performance Measurement module to be added to
their existing Mondas Client and Portfolio Management system.
Resource 32000
The education sector continues to be very active with 18 new sites added in
the first half of this year taking the total to 100 educational
establishments. A notable win comes outside of the education sector, from RSA
Films, one of the world's leading film and commercial production companies.
Within both the public sector and commercial markets our Web and workflow
technologies offer the opportunity for follow-up sales to our existing
customers as well as making our proposition more attractive to new customers.
Strategic Alliances
The marketing agreement, mentioned in my last statement, with Consort
Securities Systems Limited positioning CAPS as the 'best of breed' option for
the Consort user base, has added to the pipeline of business for this product.
A new strategic alliance has been signed with Telekurs (UK) Limited, a major
provider of corporate actions and other securities information from exchanges
around the world.
We are actively pursuing new strategic alliances to enable connectivity with
banking and securities messaging systems, such as SWIFT and CREST, and
enterprise integration with other mission critical applications. Such
alliances will equip us to compete in the global institutional and fund
management marketplace.
Management & Staff
Jarlath McGee was appointed as Chief Operating Officer of Mondas Information
Technology Limited, our trading company, in September 2001. This appointment
will allow me to focus on strategic and corporate issues, while Jarlath
assumes full responsibility for the operations of the Company.
The Directors believe that the key to success is a highly motivated team and
therefore all Mondas staff are shareholders or option holders.
Litigation
On 2 March 2001 we commenced legal proceedings against Mondus Limited for
trademark infringement and passing off as we continue to defend our trademark.
In my last statement we announced that we had reached an agreement in
principle with Ephorma AS, which has enabled us to recognise the £126,000 of
previously deferred licence revenue in the period.
Dividend
The Directors are not recommending the payment of a dividend in respect of the
period under review (2000 - nil).
Future Prospects
The power of Mondas solutions lies in its unique Radica TCMS technology. We
continue to enhance this platform, which combines our workflow, Internet and
accounting technologies to give our products competitive edge.
In addition to our existing securities and investment sector products, we are
developing new solutions, based upon Radica TCMS, to replace the legacy
systems prevalent across this market. This opportunity is significant in our
plans for the future.
Our existing and new alliances will give us access to the global institutional
market and we will continue to seek acquisition opportunities of complementary
technology and customers.
Based upon our strong pipeline and revised cost base, the Directors believe
that our cash resources are sufficient. We believe that our solutions for the
financial sector are gaining credibility and, despite a lengthened sales
cycle, we continue to close deals. Resource has a strong position in the
education sector, and we believe this will continue to be a buoyant market for
Mondas.
Mondas is positioned for growth.
D.T.A. Simon
Chairman
INDEPENDENT REVIEW REPORT TO MONDAS PLC
Introduction
We have been instructed by the company to review the financial information set
out on pages 6 to 10. We have read the other information contained in the
interim report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. As a company
quoted on the Alternative Investment Market, Mondas PLC has voluntarily
elected to follow the Listing Rules of the Financial Services Authority which
require that the accounting policies and presentation applied to the interim
figures should be consistent with those applied in preparing the preceding
annual accounts except where 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 issued by the Auditing Practices Board for use in the United Kingdom. A
review consists principally of making enquiries of group management and
applying analytical procedures to the financial information and underlying
financial data and, based thereon, assessing whether the accounting policies
and presentation have been consistently applied, unless otherwise disclosed.
A review excludes audit procedures such as tests of controls and verification
of assets, liabilities and transactions. It is substantially less in scope
than an audit performed in accordance with United Kingdom Auditing Standards
and therefore provides a lower level of assurance than an audit. Accordingly
we do not express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 October 2001.
RSM Robson Rhodes
Chartered Accountants
London, England
11 December 2001
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ending 31 October 2001
Six months Six months Year
ended 31 ended 31 ended 30
October 2001 October 2000 April 2001
(Unaudited) (Unaudited) (Audited)
£ £ £
Turnover 1,729,088 881,263 2,702,141
Cost of sales (165,989) (363,467) (436,948)
Gross profit 1,563,099 517,796 2,265,193
Distribution and (2,560,640) (974,320) (3,667,961)
administrative expenses
Analysis of group
operating losses
Operating (loss) before (320,743) (136,998) (381,054)
goodwill amortisation
and depreciation
('EBITDA')
Amortisation of goodwill (665,701) (309,329) (975,172)
Depreciation of (11,097) (10,197) (46,542)
tangible fixed assets
Group operating loss (997,541) (456,524) (1,402,768)
Net interest (95,043) (9,902) (101,274)
(payable)/receivable
Revaluation of (91,795) - -
investments
Loss before taxation (1,184,379) (466,426) (1,504,042)
Taxation - - -
Loss for the period (1,184,379) (466,426) (1,504,042)
Basic and diluted loss (5.9)p (3.4)p (9.5)p
per share
There are no recognised gains or losses for the above periods other than
those stated above.
BALANCE SHEET
As at 31 October 2001
As at As at As at
31 October 2001 31 October 30 April
2000 2001
(Unaudited) (Unaudited) (Audited)
£ £ £
Fixed assets
Intangible assets 4,393,292 5,954,325 5,058,993
Tangible assets 49,278 109,335 61,420
4,442,570 6,063,660 5,120,413
Current assets
Stocks - 5,762 417
Debtors 575,506 498,498 684,755
Investments 120,481 - 212,277
Cash at bank and in hand 1,256,262 2,503,609 1,951,087
1,952,249 3,007,869 2,848,536
Creditors: Amounts falling (1,219,809) (1,728,772)
due within one year (1,623,410)
Net current assets 732,440 1,279,097 1,225,126
Total assets less current 5,175,010 7,342,757 6,345,539
liabilities
Creditors: Amounts falling (2,896,017) (2,862,662) (2,883,201)
due after more than one year
Net assets 2,278,993 4,480,095 3,462,338
Capital and reserves
Called up share capital 2,009,501 2,001,344 2,006,056
Share premium account 5,241,078 5,228,342 5,243,489
Profit and loss account (4,971,586) (2,749,591) (3,787,207)
Equity shareholders' funds 2,278,993 4,480,095 3,462,338
The interim accounts were approved by the Board of Directors on 11th December
2001 and signed on its behalf by:
D T A Simon
Chairman
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31 October 2001
Six months Six months Year ended
ended ended 30 April
31 October 31 October 2001
2001 2000
(Unaudited) (Unaudited) (Audited)
£ £ £
Reconciliation of operating loss
to net cash outflow
Operating loss (997,541) (456,524) (1,402,768)
Amortisation of goodwill 665,701 309,329 975,172
Depreciation of tangible fixed 13,522 10,197 46,542
assets
Profit on sale of fixed assets (2,425) - -
Write down of own shares - - 17,212
(Increase)/decrease in stocks 417 (1,550) 3,795
(Increase)/ decrease in debtors 109,249 (73,117) (255,074)
(Decrease)/increase in creditors (403,601) (308,738) (301,121)
Net cash outflow from operating (614,678) (520,403) (916,242)
activities
Cash flow statement
Net cash outflow from operating (614,678) (520,403) (916,242)
activities
Returns on investments and (82,227) (132,117) (127,149)
servicing of finance
Taxation paid - - (138,679)
Capital expenditure and financial 1,046 (9,034) 16,971
investment
Acquisitions and disposals - (2,526,933) (2,745,490)
Cash outflow before financing and (695,859) (3,188,487) (3,910,589)
liquid resources
Management of liquid resources 5,813 (2,125,000) (965,753)
Financing - issue of shares (net 1,034 2,736,741 2,906,321
of costs)
- issue of convertible - 3,000,000 3,000,000
unsecured loan stock
Increase/(decrease) in cash (689,012) 423,254 1,029,979
NOTES TO THE INTERIM FINANCIAL INFORMATION
31 OCTOBER 2001
1. INTERIM REPORT
This interim report was approved by the Board on 11 December 2001. It has
been prepared using accounting policies that are consistent with those
adopted in the statutory accounts for the year ended 30 April 2001.
The figures for the year to 30 April 2001 were derived from the statutory
accounts for that year. The statutory accounts for the year ended 30 April
2001 have been delivered to the Registrar of Companies and received an audit
report which was unqualified and did not contain statements under s237(2) or
(3) of the Companies Act 1985.
2. DIVIDENDS
The directors are not declaring a dividend for the six months ended 31
October 2001.
3. LOSS PER SHARE
Basic loss per share is based on the loss attributed to the members of Mondas
Plc and on the weighted average number of shares outstanding throughout the
six months ended 31 October 2001 of 20,077,785 (2000: 13,057,860). Diluted
loss per share is the same as the basic loss per share because the options
and convertible unsecured loan stock have no dilutive effect.
4. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2001 2000 2001
£ £ £
Change in cash (689,012) 423,254 1,029,979
Cash inflow from increase in debt - (3,000,000) (3,000,000))
Cash outflow from increase in (5,813) 2,125,000 965,753
liquid resources
Change in net debt from cash (694,825) (451,746) (1,004,268)
flows
Opening net (debt)/funds (1,048,913) (229,869) (44,645)
Closing net funds (1,743,738) (681,615) (1,048,913)
5. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Six months Six months Year
ended ended ended
31 October 31 October 30 April
2001 2000 2001
£ £ £
Total recognised losses relating (1,184,379) (466,426) (1,504,042)
to the period
Net proceeds of share issue 1,034 3,437,653 3,457,512
Increase/(decrease) in (1,183,345) 2,971,227 1,953,470
shareholders' funds
Opening shareholders' funds 3,462,338 1,508,868 1,508,868
Closing shareholders' funds 2,278,993 4,480,095 3,462,338
6. INVESTMENTS
As at As at As at
31 October 31 October 30 April 2001
2001 2000
£ £ £
Own shares held 120,481 - 212,277
120,481 - 212,277
Own shares held relates to 573,722 shares recovered from the vendors of
Reality Communications Scandinavia AS which are held by the Company's
lawyers, Garretts. They are valued at the closing mid market price on 31
October 2001.
7. COPIES OF THE INTERIM REPORT
Copies of the interim report are being sent to all shareholders of the
Company and are available to the public from the Company's registered office:
Rosemount House, Rosemount Avenue, West Byfleet, Surrey KT14 6LB and the
offices of John East & Partners Ltd, Crystal Gate, 28-30 Worship Street,
London EC2A 2AH.
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