Interim Results
Mondas PLC
14 December 2000
MONDAS PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 31 OCTOBER 2000
Mondas PLC, the e-Business software house specialising in the securities and
banking markets and in Internet software, today announces results for the six
months ended 31 October 2000
Financial
* Revenue increased 37.3% to £881,263 (1999: £641,678) including a three
week contribution from DSR Holdings of £111,421
* Revenue from the underlying Mondas business grew revenues by 20% to £
769,842
* EBITDA of (£136,998) (1999: (£123,787)) after incurring £45,000 legal
fees resolving the Reality warranty claim
* Loss per share 3.4p (1999: 3.1p)
* Cash balances at the end of the period total £2,503,609 (1999: £117,377)
* Deferred income £678,816 (1999: £73,144)
Highlights
* Strategic alliances have been signed with Exchange Data International
('EDI') and NetStore, a leading European ASP
* Mondas continues its development of financial sector securities and
investment solutions including Corporate Actions Processing and Client
Fund Management
* Resource 32000 accounting and management information system provides a
strategic addition to the Mondas technology portfolio.
* Major new business orders for Resource 32000
* Strengthened operational management team with Director of Technical
Operations, and the appointment of a new Director of Sales
* Two new non-executive directors join the Board
* Agreement, in principle, to settle the warranty claim against Reality
vendors.
Tim Simon, Chairman of Mondas commented:
' Mondas has never been better positioned to exploit the opportunity provided
by technological change in the securities market. We now have a suite of
software products and skills that together can deliver a total e-Business
solution. With the focus on marketing and sales this will enable a continued
growth in revenues and creation of shareholder value.'
14 December 2000
ENQUIRIES:
Mondas PLC
Tim Simon, Chairman Tel: 01932 334600
College Hill Associates
Matthew Smallwood
Camilla Glen Tel: 020 7457 2020
Mondas PLC
Interim Results for the Six Months to 31 October 2000
Chairman's Statement
Financial Results
We are pleased to report interim results for the six months ended 31 October
2000. During the period under review turnover increased to £881,263 (1999: £
641,678) of which £769,842 was attributed to the core Mondas PLC ('Mondas',
'the Company' or 'the Group') business, a 20% underlying increase over the
previous period. DSR Holdings Limited ('DSR'), which we acquired on 9 October
2000, contributed £111,421 in revenue and £35,927 in operating profit in the
three-weeks up to the period end. The Group recorded an operating loss
(EBITDA) of £136,998 after charging £45,000 of legal costs in relation to the
warranty claim against the vendors of Reality Communications Scandinavia AS
('Reality'). Loss before tax for the period was £466,426 (1999: £390,090).
Cash balances at the end of the period totalled £2,503,609 including monies
raised in October 2000. Approximately £575,000 of fees and expenses relating
to the acquisition became due for payment in the early part of the second
half. Deferred income at the end of the period was £678,816 (1999: £73,144)
including £126,683 (1999: £48,000) arising from our Norwegian business.
Dividend
The directors are not recommending the payment of a dividend in respect of the
period under review.
DSR
At the EGM on 3 October the shareholders voted to approve the acquisition of
DSR and the raising of £3,153,000 by the issue of equity and a further £
3,000,000 by the issue of 8% convertible unsecured loan stock. The directors
are delighted with this acquisition which has a strong record of profitability
and cash generation. It is showing a good trading momentum including recent
contracts with TFG (The Facilities Group Limited) a division of Saatchi &
Saatchi plc, worth about £80,000 and an order from a consortium of 13 higher
education colleges in Hampshire and Surrey, worth over £170,000. This latter
deal was awarded towards the end of the period and will benefit the second
half.
Sales & Marketing
The Group has continued to develop its existing clients. Our new Corporate
Actions Processing Solution ('CAPS'), which uses workflow technologies to
manage the processes triggered by Stock Exchange Corporate Event Notices, has
been successfully rolled out across more than 370 users in 27 office locations
at Brewin Dolphin Securities Limited. We are currently carrying out a
consultancy projects with Stock Exchange member firms and are in detailed
discussions with others. We have enhanced the capability of the intranet and
extranet solutions delivered to Added Value Group and CIA MediaNetworks, both
subsidiaries of the Tempus Group plc, and Ingersoll Rand Inc.
Strategic alliances have been signed during this reporting period with
Exchange Data International Limited ('EDI') and NetStore PLC, a leading
European Application Service Provider ('ASP'). We are marketing our CAPS
solution jointly with EDI who have already provided us with a number of
opportunities. EDI provides the information from the Stock Exchange in
electronic form for direct input into CAPS. This information triggers the
actions managed by our software. The relationship with NetStore will provide
leads for in-house solutions that are required alongside the software provided
via the ASP service.
Mondas PLC
Interim Results for the Six Months to 31 October 2000
In August we launched our new web site (www.mondas.com), using our own content
management solution, enabling the site to be continually updated.
Solutions and Technologies
The Group has continued to develop its financial sector securities and
investment solutions including CAPS, and Client Fund Management. Our core
intranet and workflow technologies have also been enhanced. Intralink ST is
now available on the Microsoft SQL Server database, to provide greater
scaleability and the new version of Radica, Version 4, has been successfully
rolled out to existing customers, giving them more flexible modelling and
workflow design facilities.
Resource 32000 accounting and management information system provides a
strategic addition to the Group's technology portfolio. Combined with the
other Mondas core technology its innovative design enables us to offer
financial sector clients a simpler and lower risk legacy migration strategy
for the outdated settlement systems predominant in the London market.
Previously, our legacy migration strategy included a third party accounting
engine, now replaced with Resource 32000, giving us greater control over
development and margin.
Resource 32000 has been ported to use Oracle as its back-end database; so
users now have the choice of Microsoft SQL Server, Sybase Adaptive Server, or
Oracle 8i. We have an order for a major web-enabled timesheet entry system
which we expect to deliver and implement on the customer's intranet in January
2001. We are in the process of obtaining industry accreditations such as
ICAEW, EMU, and BASDA XML.
The design of Resource 32000 allows all three Mondas technologies, intranet,
workflow and accounting to integrate neatly and simply. Together they provide
a comprehensive Straight Through Processing ('STP') solution for financial
markets and e-Business.
Reality Communications Scandinavia AS ('Reality')
The May 2000 closure of the former Reality office in Highgate resulted in some
staff attrition, but those whom we lost have been replaced by people with
similar skills and, collectively, they have achieved much improvement to the
product. We have also strengthened and renewed our alliance with Allaire upon
whose product Intralink ST is based.
Ephorma AS, a reseller of certain Mondas products in Norway, has, in
correspondence, alleged a breach of the reseller agreement by Mondas. Mondas
in turn is alleging breach of the agreement by Ephorma and is seeking a
commercial solution to the dispute.
Mondas PLC
Interim Results for the Six Months to 31 October 2000
Settlement of Litigation
Mondas has accepted, in principle, an out of court settlement with certain of
the vendors of Reality, following the issue of Court proceedings by the
Company in November 2000 for breach of certain warranties given to Mondas at
the time of the acquisition of Reality.
Under the terms of the settlement, a total of 573,722 Mondas ordinary shares
will be delivered to the Company's solicitors, Garretts and thereafter Mondas
will take all necessary steps to cancel or, at Mondas' discretion, arrange for
the sale of the said shares. Any net sale proceeds shall be for the account of
Mondas. The balance of shares issued to certain of the vendors of Reality as
consideration for the acquisition of Reality and which were being held in an
escrow account, will be released to such vendors under the terms of the
settlement.
Management
Colin Peters & Bernard Fairman joined the Board on 31 October 2000 as
non-executive directors. They bring a wealth of corporate and financial sector
experience with them, which will benefit Mondas, both in the Boardroom and in
its target financial markets. At the same time Ken Barnes resigned as
non-executive director to enjoy his retirement. The Board thanks Ken for his
contribution to the development of the Group.
We have strengthened the operational management team with the following
appointments.
Just prior to the start of the reporting period, in March 2000, Graham Ross
joined us as Director of Technical Operations. His responsibilities include
product development, customer projects and technical support.
On 4 December 2000 Jarlath McGee joined us as Director of Sales replacing
Matthew Crook who left the company on 31 October 2000. Jarlath brings with him
a successful track record of over twenty years in IT sales management in the
financial services markets. He has been a Branch Sales Manager with Tandem
Computers, Managing Director of workflow systems developer, WSO Limited, who
provided EAI ('Enterprise Application Integration') and STP solutions for the
securities industry. Latterly he was a General Sales Manager EMEA with Applied
Communications, Systems Solutions providing transaction management systems to
the finance sector. Jarlath is a graduate of Trinity College Dublin.
All of DSR's staff, with the exception of the Chairman, Duncan Ritchie, who
retired due to ill health, have joined the Mondas team. The directors believe
that there is real commitment, across the Group, to building customer and
shareholder value. The directors believe that the key to this is a highly
motivated team and therefore Mondas offers incentive share options to all
staff.
Mondas PLC
Interim Results for the Six Months to 31 October 2000
Future Prospects
The acquisition of DSR and the associated fundraising gives Mondas the
opportunity to accelerate its expansion into the securities sector whilst
establishing a strong presence in the business systems market.
We will provide STP and e-Business solutions to financial markets and
e-Business solutions to certain other vertical markets, predominantly through
Resource 32000. We are exploring alternative routes to market, particularly
focusing on an indirect channel for Resource 32000 and ASP opportunities.
Our focus in the second half of this year will be on sales and marketing,
integration of products with Resource 32000 and the further development of our
financial sector applications. We shall continue to strengthen our staff with
securities professionals (new recruits are scheduled to join in January 2001)
and the integration of the DSR/Resource business unit. Planned investments in
people, product and marketing should enable greater revenue growth during the
next financial year. The Company is focused on creating shareholder value and
taking full advantage of this very real opportunity.
Our expertise in financial and securities markets combine with the quality
Resource 32000 offering to give Mondas the opportunity to continue to develop
and exploit the real changes that are necessary to give Mondas customers
competitive edge in the UK securities markets.
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 7 to 12. We have also 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.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999
/4 issued by the Auditing Practices Board. 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,
includes an assessment of 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 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 2000.
RSM Robson Rhodes
Chartered Accountants
London
13th December 2000
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ending 31 October 2000
6 months 6 months 6 months 6 months 12 months
ended 31 ended 31 ended 31 ended 31 ended
October October October October 30 April
2000 2000 2000 1999 2000
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)
Acquisitions Continuing Total
operations
£ £ £ £ £
Turnover 111,421 769,842 881,263 641,678 1,358,811
Cost of sales (18,918) (344,549) (363,467) (244,756) (499,281)
Gross profit 92,503 425,293 517,796 396,922 859,530
Distribution and
administrative (116,380) (857,940) (974,320) (792,761) (1,725,309)
expenses
Analysis of group
operating losses
Operating profit/
(loss)
before goodwill
amortisation and
depreciation (EBITDA) 35,927 (172,925) (136,998) (123,787) (330,183)
Amortisation of (56,518) (252,811) (309,329) (258,000) (503,797)
goodwill
Depreciation of
tangible
fixed assets (3,286) (6,911) (10,197) (14,052) (31,799)
Group operating loss (23,877) (432,647) (456,524) (395,839) (865,779)
Net interest
(payable)/receivable (9,902) 5,749 8,206
Loss before taxation (466,426) (390,090) (857,573)
Taxation - - -
Loss for the period (466,426) (390,090) (857,573)
Basic and diluted (3.4)p (3.1)p (6.8p)
loss per share
There are no recognised gains or losses for the above periods other than those
stated above.
BALANCE SHEET
at 31 October 2000
At At At
31 October 31 October 30 April
2000 1999 2000
(Unaudited) (Unaudited) (Audited)
£ £ £
Fixed assets
Intangible assets 5,954,325 1,782,481 1,536,684
Tangible assets 109,335 43,728 25,741
6,063,660 1,826,209 1,562,425
Current assets
Stocks 5,762 4,132 1,810
Debtors 498,498 290,647 318,166
Cash at bank and in hand 2,503,609 117,377 8,742
3,007,869 412,156 382,718
Creditors: Amounts falling due
within
one year (1,728,772) (262,013) (382,275)
Net current assets/ 1,279,097 150,143 (53,557)
(liabilities)
Total assets less current 7,342,757 1,976,352 1,508,868
liabilities
Creditors: Amounts falling due
after
more than one year (2,862,662) - -
Net assets 4,480,095 1,976,352 1,508,868
Capital and reserves
Called up share capital 2,001,344 1,261,185 1,261,185
Share premium account 5,228,342 2,530,849 2,530,848
Profit and loss account (2,749,591) (1,815,682) (2,283,165)
Equity shareholders' funds 4,480,095 1,976,352 1,508,868
The interim accounts were approved by the Board of Directors on 13 December
2000 and signed on its behalf by:
D T A Simon
Chairman
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 31 October 2000
Six months Six months 12 months
ended Ended Year ended
31 October 31 October 30 April
2000 1999 2000
(Unaudited) (Unaudited) (Audited)
£ £ £
Reconciliation of operating loss to
net
cash outflow
Operating loss (456,524) (395,839) (865,779)
Amortisation of goodwill 309,329 258,000 503,797
Depreciation of tangible fixed 10,197 14,052 31,799
assets
Increase in stocks (1,550) (2,955) (633)
Increase in debtors (73,117) (47,926) (77,591)
Decrease/(increase) in creditors (308,738) 36,795 103,670
Net cash outflow from operating (520,403) (137,873) (304,737)
activities
Cash flow statement
Net cash outflow from operating (520,403) (137,873) (304,737)
activities
Returns on investments and servicing (132,117) 5,749 8,205
of finance
Taxation paid - - 2,146
Capital expenditure and financial (9,034) 3,181 3,421
investment
Acquisitions and disposals (2,526,933) - -
Cash outflow before financing and (3,188,487) (128,943) (290,965)
liquid resources
Management of liquid resources (2,125,000) - -
Financing - issue of shares (net of 2,736,741 1,034 1,034
costs)
- issue of convertible
unsecured loan stock 3,000,000 - -
(Increase)/decrease in cash 423,254 (127,909) (289,931)
NOTES TO THE INTERIM FINANCIAL INFORMATION
31 October 2000
1. INTERIM REPORT
This interim report was approved by the Board on 13 December 2000. It
has been prepared using accounting policies that are consistent with
those adopted in the statutory accounts for the year ended 30 April
2000.
The figures for the year to 30 April 2000 were derived from the
statutory accounts for that year. The statutory accounts for the year
ended 30 April 2000 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
2000.
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 2000 of 13,057,860 (1999:
12,577,963). 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
2000 1999 2000
£ £ £
Change in cash 423,254 (127,909) (289,931)
Cash inflow from increase in debt (3,000,000) - -
Cash outflow from increase in 2,125,000 - -
liquid resources
Change in net debt from cash flows (451,746) (127,909) (289,931)
Opening net (debt)/funds (229,869) 60,062 60,062
Closing net debt (681,615) (67,847) (229,869)
5. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Six months Six months 12 months
Ended Ended Ended
31 October 31 October 30 April
2000 1999 2000
£ £ £
Total recognised losses relating to (466,426) (390,090) (857,574)
the period
Net proceeds of share issue 3,437,653 1,034 1,034
Increase/(decrease) in shareholders' 2,971,227 (389,056) (856,540)
funds
Opening shareholders' funds 1,508,868 2,365,408 2,365,408
Closing shareholders' funds 4,480,095 1,976,352 1,508,868
6. ACQUISITION OF SUBSIDAIRY
Mondas PLC acquired the entire share capital of DSR Holdings Limited
on 9 October 2000. The Directors have conducted a provisional fair
value exercise and on that basis purchased goodwill of £4,726,970
arose on acquisition. The fair values will be finalised when the
statutory financial statements for the year ending 30 April 2001 are
prepared. Goodwill for this acquisition is being amortised over five
years.
Provisional
fair values and
book values
£
Tangible fixed assets 84,757
Stock 2,402
Trade debtors 87,658
Other debtors 19,557
Cash at bank and in hand 725,350
834,967
Creditors: amounts falling due after more than one (1,693,499)
year
Net current liabilities (858,532)
Net assets (773,775)
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 until 30 December 2000.
8. POST BALANCE SHEET EVENT
The interim report has not been adjusted for the following:
Mondas has accepted, in principle, an out of court settlement with
certain of the vendors of Reality following the issue of Court
proceedings by the Company in November 2000 for breach of certain
warranties given to Mondas at the time of the acquisition of Reality.
Under the terms of the settlement, a total of 573,722 Mondas ordinary
shares will be delivered to the Company's solicitors, Garretts
thereafter Mondas will take all necessary steps to cancel or, at
Mondas' discretion, arrange for the sale of the said shares. Any net
sale proceeds shall be for the account of Mondas. The balance of
shares issued to certain of the vendors of Reality as consideration
for the acquisition of Reality and which were being held in an escrow
account, will be released to such vendors under the terms of the
settlement.
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