Interim Results

Mondas PLC 18 December 2003 MONDAS PLC Interim Results for the six months to 31 October 2003 Mondas PLC, specialist providers of software solutions for the banking & securities sector and the education sector, today announces interim results for the six months to 31 October 2003. Highlights Financial • Turnover increased by 27% to £1.85 million (2002: £1.45 million) • Operating loss before interest goodwill amortisation and depreciation reduced to £455,000 (2002: £754,000) • Cash balances £1.88 million (2002: £0.36 million) • Deferred revenues increased to £1.06 million (2002: £0.85 million) • Loss per share reduced to 4.1p (2002: loss 7.3p) Operational • Banking and securities business has secured the majority of large contracts awarded to date in the UK - £750,000 order secured from HSBC - see separate announcement released today - CSFB goes into production in December 2003 with Radica CAPS - Signs of recovery and higher levels of enquiry on corporate action automation projects • Resource continues to strengthen its position - 17 new contracts won during the period - Of those, 12 in the education sector for the new Resource Learning Management System - First sale of integrated financial and learning management systems Current Trading Mondas has strengthened its financial position and is now well placed to exploit opportunities. The Board is confident of further positive developments in the second half. Tim Simon, Chairman and Chief Executive said: 'Both our businesses are now leaders in their fields. We continue to grow the Resource business unit and are delighted with its progress in the education sector, but the excitement during the current year will be in corporate actions where Mondas is now a credible and leading supplier. As the market recovers, the investment community is turning its attention, and its budgets, to this area. The new HSBC contract, and Credit Suisse First Boston in production with Radica CAPS, are more than concrete evidence that this market is now moving and Mondas is well placed to prosper within it. ' 18 December 2003 ENQUIRIES: Mondas PLC Tel: 020 7392 1300 Tim Simon, Chairman and CEO College Hill Tel: 020 7457 2020 Matthew Smallwood MONDAS PLC Interim Results for the six months to 31 October 2003 Chairman's Statement We are delighted to announce today that HSBC Bank plc, has selected the Mondas corporate actions ('CA') processing solution, Radica CAPS. The contract is worth a minimum of £750,000 for licences, project and support services. The selection process by HSBC has been extremely rigorous with intense competition. This order is viewed as the initial phase of a comprehensive plan for HSBC to offer its operating divisions a single corporate action and dividend processing platform. The participants will initially include 75 users in asset management, trading operations, international investment management and private client services. The sales negotiation was conducted over an extended period, which makes it even more satisfying to have eventually won this contract. This represents a significant milestone for Mondas, and clearly positions the Company as a credible vendor in the global banking and securities market. I am also pleased to report continued progress in the first half of our financial year. Our two business units: Banking & Securities and Resource (which focuses on the public and commercial sectors providing accounting and business software solutions) are both leaders in their respective areas of speciality. The Resource business unit operates in the education sector where it has won significant market share through product innovation. The Banking & Securities business unit has an early advantage within the nascent CA processing market where it has secured the majority of the substantial contracts awarded in the UK. Results Revenue for the six months to 31 October 2003 increased by 27% to £1.85 million (2002: £1.45 million). This is attributable both to sales of new products to the education sector and also our strategic move into markets where operational risk has continued to drive IT spending in the banking and securities sector in spite of the depressed conditions. Revenues were split approximately evenly across the business units. Our operating loss before interest, goodwill, amortisation and depreciation was £455,000 (2002: £754,000). Your Board continues to closely monitor and manage overhead levels, whilst retaining the ability to service both new and existing contracts. Operating costs for the six months were £2.3 million (2002: £2.2 million) Cash balances at 31 October 2003 were £1.88 million (2002: £0.36 million) and deferred revenues contracted, but not yet recognised, increased to £1.06 million (2002: £0.85 million). MONDAS PLC Interim Results for the six months to 31 October 2003 Banking and Securities I am delighted to announce that Credit Suisse First Boston (Europe) Limited has taken Radica CAPS into production parallel. This is the result of two orders announced in January and September 2003 totalling £810,250 for licences, project and support services for their London based international corporate actions operation. The Directors believe that such successful implementations demonstrate the Company's ability to work with our clients to deliver complex projects to demanding timescales and budgets. We further believe that this underpins Mondas' position as a leading supplier of high value CA systems which meet the requirements of the recovering global investment banking community, a key market for Mondas. Whilst it remains frustrating that sales and contractual negotiations progress extremely slowly, we remain encouraged by the number of enquiries from both our domestic market and internationally from the United States and Europe. Over recent months, we have identified many organisations actively planning CA automation projects with corresponding budgets in place. Resource Our strategy in this business unit is to capitalise upon its market position within the education sector by creating an integrated management information solution for colleges. This includes modules for accounting, human resources, payroll, continuing professional development and learning management. Our first integrated solution sale was achieved in June 2003 for Richmond Adult Community College ('RACC'). This sale combined the new Resource Learning Management System ('Resource LMS') and the accounting and finance solution, Resource 32000, in an agreement worth approximately £100,000. Resource 32000 has already been implemented successfully at RACC and Resource LMS is on track to go live in the near future. This strategy is bearing fruit with seventeen new contracts won during the period, of which twelve are for the new Resource LMS, and still more in negotiation. The additional modules have enabled increased sales to our user base which now represents approximately a 20% share of the further education market. Placing In July we announced a placing of 5,000,000 ordinary shares raising £1.423 million net of expenses. This has enhanced our ability to exploit potential acquisition opportunities and accelerate Mondas' product development and expansion plans. This placing also enabled Mondas to widen its institutional shareholding base, with both new and existing institutions participating. MONDAS PLC Interim Results for the six months to 31 October 2003 Dividend The Directors are not recommending the payment of a dividend in respect of the period under review (2002: nil). Outlook Sales pipelines in both divisions have strengthened. The Resource business unit continues to deliver a steady stream of orders, increasing in value, from both existing and new clients. In the Banking & Securities business unit, renewed levels of activity are evident, underlining our confidence in the opportunities for Radica CAPS. We acknowledge that some orders forecast for the first half have slipped and this may affect our ability to recognise some revenues expected in the year. With a growing client base across the Company, Mondas continues to increase its revenue and pipeline of additional business from our existing customers. This is apparent within the Banking & Securities unit, where Radica CAPS clients include large organisations like HSBC, Credit Suisse First Boston, Credit Suisse Asset Management, Close Wealth Management, Brewin Dolphin and GNI, part of the Man Group. Our successful initial deliveries follow a pattern of creating long-term relationships with clients, generating a revenue stream over extended periods. Mondas has strengthened its financial position and is now well placed to exploit opportunities. The Board is confident of further positive developments in the second half. Tim Simon Chairman 18 December 2003 MONDAS PLC Interim Results for the six months to 31 October 2003 INDEPENDENT REVIEW REPORT TO MONDAS PLC Introduction We have been instructed by the company to review the financial information set out on pages 4 to 8. 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. This report is made solely to the company in accordance with guidance contained in Bulletin 1999/4 'Review of interim financial information' issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our work, for this report, or for the conclusions we have formed. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim report in accordance with the AIM rules. The directors are also responsible for ensuring that the accounting policies and presentation applied to the interim figures are 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 2003. RSM Robson Rhodes LLP Chartered Accountants London, England 18 December 2003 MONDAS PLC Interim Results for the six months to 31 October 2003 Consolidated Profit and Loss Account for the six months ending 31 October 2003 6 months ended 6 months 12 months ended 31 October 2003 ended 31 30 April 2003 October 2002 £ £ £ Turnover 1,847,452 1,452,981 3,713,353 Cost of sales (71,556) (67,624) (170,628) ---------- ---------- ----------- Gross profit 1,775,896 1,385,357 3,542,725 --- --- Administrative expenses excluding restructuring charge (2,744,838) (2,793,236) (5,501,682) Restructuring Charge - - (154,149) --- --- ----------- Analysis of group operating losses Operating (loss) before goodwill amortisation and depreciation (454,993) (754,503) (679,973) Amortisation of goodwill (472,698) (638,418) (1,391,392) Depreciation of tangible fixed assets (41,251) (14,958) (41,741) Operating loss (968,942) (1,407,879) (2,113,106) Net interest (payable) (121,626) (121,795) (246,364) Other operating income - - 134,825 --- --- --------- --- --- --- Loss on ordinary activities before taxation (1,090,568) (1,529,674) (2,224,645) Taxation 147,748 72,605 162,496 --------- -------- --------- Loss for the period (942,820) (1,457,069) (2,062,149) ----------- ------------- ------------- Basic loss per share (4.1p) (7.3)p (10.1)p -------- -------- --------- === === === There are no recognised gains or losses for the above periods other than those stated above. MONDAS PLC Interim Results for the six months to 31 October 2003 Balance Sheet at 31 October 2003 At At At 31 October 2003 31 October 30 April 2002 2003 £ £ £ Fixed assets Intangible assets 1,890,784 3,139,372 2,363,483 Tangible assets 223,662 145,274 193,845 --------- --------- --------- 2,114,446 3,284,646 2,557,328 ----------- ----------- ----------- Current assets Stocks - 306 - Debtors 709,907 543,534 749,272 Cash at bank and in hand 1,884,733 363,083 977,943 ----------- --------- --------- 2,594,640 906,923 1,727,215 --- --- --- Creditors: Amounts falling due within one year (1,686,369) (1,294,292) (1,769,407) ------------- ------------- ------------- Net current assets/(liabilities) 908,274 (387,369) (42,192) --------- ----------- ---------- Total assets less current liabilities 3,022,720 2,897,277 2,515,136 Creditors: Amounts falling due after more than one year (2,950,385) (2,922,584) (2,936,485) ------------- ------------- ------------- Net assets/(liabilities) 72,335 (25,307) (421,349) ======== ========== =========== Capital and reserves Called up share capital 2,614,164 2,009,501 2,109,976 Share premium account 6,281,957 5,241,078 5,349,641 Profit and loss account (8,823,786) (7,275,886) (7,880,966) ------------- ------------- ------------- Equity shareholders' funds 72,335 (25,307) (421,349) ======== ========== =========== The interim accounts were approved by the Board of Directors on 18.December 2003 and signed on its behalf by: D T A Simon Chairman MONDAS PLC Interim Results for the six months to 31 October 2003 Consolidated Cash Flow Statement for the six months ended 31 October 2003 Six months Six months 12 months ended ended Year ended 31 October 31 October 30 April 2003 2002 2003 £ £ £ Net cash outflow from operating activities (498,668) (1,043,711) (438,343) Returns on investments and servicing of finance (107,726) (106,909) (218,564) Taxation received 147,748 197,948 162,496 Capital expenditure and financial investment (71,068) (104,997) (157,434) ---------- ----------- ----------- Cash outflow before financing and liquid resources (529,714) (1,057,669) (651,845) Management of liquid resources (1,209,207) 800,000 556,212 Financing 1,513,304 - 236,115 issue of ordinary shares (76,800) - (27,079) expenses paid in connection with share issue 1,436,504 - 209,036 Cash inflow from financing (Decrease) in cash (302,417) (257,669) 113,403 =========== =========== ========= Notes to the Consolidated Cash Flow Statement Six months Six months 12 months ended ended Year ended 31 October 31 October 30 April 2003 2002 2003 £ £ £ 1. Reconciliation of operating loss to net cash outflow Operating loss (968,942) (1,407,879) (2,113,106) Amortisation of goodwill 472,698 638,418 1,170,433 Impairment of goodwill - - 220,959 Depreciation of tangible fixed assets 41,251 14,958 41,741 Other income - - 134,825 (Increase)/decrease in stocks - (70) 236 Decrease in debtors 39,365 180,862 100,467 Decrease in creditors (83,040) (470,000) 6,102 ---------- ----------- ------- Net cash outflow from operating activities (498,668) (1,043,711) (438,343) =========== ============= =========== MONDAS PLC Interim Results for the six months to 31 October 2003 Notes 1. Interim Report This interim report was approved by the Board on 18 December 2003. It has been prepared using accounting policies that are consistent with those adopted in the statutory accounts for the year ended 30 April 2003. The figures for the year to 30 April 2003 were derived from the statutory accounts for that year. The statutory accounts for the year ended 30 April 2003 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. The above financial information does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The accounts have been prepared on a going concern basis as the Directors believe that current sales prospects combined with existing working capital resources will ensure that Mondas has adequate working capital to service its existing business for the foreseeable future. 2. Dividends The directors are not declaring a dividend for the six months ended 31 October 2003. 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 2003 of 22,988,717 (2002: 20,095,600). 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. Reconcilation of net cash flow to movement in net debt Six months Six months 12 months ended ended ended 31 October 31 October 30 April 2003 2002 2003 £ £ £ Change in cash (302,417) (257,669) 113,403 Cash outflow from (decrease) in liquid resources 1,209,207 (800,000) (556,212) ----------- ----------- ----------- Change in net debt from cash flows 906,790 (1,057,669) (442,809) --- --- --- Amortisation of Convertible Unsecured Loan Stock (13,900) (13,899) (27,800) Opening net (debt)/funds (1,958,542) (1,487,933) (1,487,933)) ------------- ------------- -------------- Closing net funds (1,065,652) (2,559,501) (1,958,542) ============= ============= ============= === === === 5. Reconciliation of movements in shareholders' funds Six months Six months 12 months ended ended ended 31 October 31 October 30 April 2003 2002 2003 £ £ £ Losses for the financial year (942,820) (1,457,069) (2,062,149) Issue of ordinary shares at par 504,188 - 100,475 Costs of Issue (76,800) - - Premium on new shares issued 1,009,116 - 108,563 ----------- --- --------- Increase/(Decrease) in shareholders' 493,684 (1,457,069) (1,853,111) funds Opening shareholders' funds (421,349) 1,431,762 1,431,762 ----------- ----------- ----------- Closing shareholders' funds 72,335 (25,307) (421,349) ======== ========== =========== === === === 6. 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: 17-29 Sun Street, London, EC2M 2PT and the offices of John East & Partners Ltd, Crystal Gate, 28-30 Worship Street, London EC2A 2AH. This information is provided by RNS The company news service from the London Stock Exchange

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