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Mediasurface PLC (MSR)

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Tuesday 01 May, 2007

Mediasurface PLC

Interim Results

Mediasurface PLC
01 May 2007


                                Mediasurface plc

                         Results for the 6 Months ended 31st March 2007

Mediasurface plc, the AIM listed Content Management Software Author and Vendor,
announces un-audited results for the 6 months ended 31st March 2007.

Company Highlights for Half Year

   •Group revenue up 37% to £6.06 million (2006: £4.43 million).

   •Pre-tax profit up 15% to £0.40 million (2006: £0.35 million).

   •Investment in Pepperio of £0.4m has established strong base to target SME
    sector.

   •Cash position improved to £1.14m (30th September 2006: £1.08m).

   •Group licence sales up 16%.

   •Services up 93% on the same period for last year.

   •Maintenance revenue up 20% on the same period last year, the annual value
    of recurring support revenues is now £2.8m.

   •Group secured two of its largest deals to date - Office of Fair Trading
    and The Foreign & Commonwealth Office.

   •Additional new business includes contract with technology specialist
    Infor, healthcare organisations AZ-Sint Blazius & Meerkanten and publishers
    Springer/ Artsennet.

   •Partnership with Google strengthens enterprise search capabilities.
    Google names Mediasurface 'Best ECM Partner of Year' in recent awards.

   •Two major Morello releases open up Microsoft market with support for
    Microsoft's ASP .Net and SQL Server database.

   •Sales coverage extended with new offices established in Chicago and
    Stockholm.


Chairman's Statement
For the six months ended 31st March 2007

I am pleased to announce the results for the six months ended 31st March 2007
which demonstrate continued and significant revenue growth, profitability growth
and cash generation whilst investing in the future of both Morello and Pepperio.


Morello, which was further strengthened by a new release during the first half,
continued to deliver growth including major deals with Office of Fair Trading,
Prudential and The Foreign & Commonwealth Office which set a new largest deal
record for the company.


Group revenues for the first six months increased by 37% to £6.06 million (2006:
£4.43 million). The Group achieved a pre-tax profit of £0.40 million (2006:
£0.35 million).


During the period £0.4m was invested in Pepperio marketing and sales channel
development to establish a base from which the company can grow a robust and
recurring revenue stream, in the future this will complement our Morello product
revenues. Excluding the effect of planned investment in Pepperio, underlying
profits of the Morello business improved by £0.4m compared with the same period
a year ago.


The Company's cash position improved to £1.14m (30th September 2006: £1.08m).
Net Assets stood at £2.40 million compared with £2.00 million at 30th September
2006.


Prospects for the Company remain positive. Morello continues to attract
significant interest and major new sale opportunities exist for the second half
of the financial year. Pepperio, with a growing sales channel, is also expected
to contribute further revenues in the second half. The Board remains committed
to enhancing shareholder value and believe the Company is well placed to grow
profitably.


Michael Jackson
Chairman
1st May 2007


Chief Executive Officer's Report

For the six months ended 31st March 2007

Once again I am pleased to report that Morello, the company's flagship product,
has driven another half of significant  growth. There is no doubt Morello has
been very competitive in the market, delivering both the largest deal to date 
(£854k in licence) and an overall 16% improvement in licence sales.

Morello product development continued during the first half resulting in the
release of v5.5 which amongst other things  included support for ASP.NET
delivery and the Google Search Appliance. Our next release in early May 2007 -
v5.6 -  includes support for the Microsoft SQL Server Database. This latest
release will enable the company to appeal to a  broad breadth of the market
including Microsoft based organisations who can now benefit from our technology
thus  opening up a new and significant market opportunity for the business.

This continued investment has helped us secure two of our largest contracts to
date with Office of Fair Trading and The  Foreign & Commonwealth Office. We have
also enjoyed success from across our other target markets including technology 
specialist Infor, healthcare organisations AZ-Sint Blazius & Meerkanten and
publishers Springer/Artsennet.

The underlying Morello business not only grew in software sales but also in
services, up 93% and recurring maintenance, up 20% on the same period for last
year with recurring revenues run rate now at £2.8m. It is gratifying to witness
the user base continuing to grow as more and more web projects are delivered and
go live including the Department for Transport, the Department for Communities &
Local Government, Talarius, Office of Fair Trading, Brussels International
Airport, AEGON and more. Demand remains strong for our products and services
offerings and we have enhanced our delivery capabilities through partnerships
such as that with LogicaCMG and Verizon.


As previously indicated, the company is keen to exploit additional markets for
Web Content Management specifically the small to medium sized business market
with our 'software as a service' offering, Pepperio. During the half year
considerable investments have been made in support of this initiative in terms
of sales, marketing and infrastructure. The product enjoyed two major releases
during the half, further enhancing its capabilities in relation to customer and
partner demand. Sales demand has been strong, in line with internal expectation,
and we now have over 40 partners and 100 end-user customers for Pepperio. The
next marketplace to be developed will be the USA which will lag the UK by some 5
months. There is strong evidence of accelerating user adoption in the UK which
is now enjoying a current run rate of 15-20 sites per month. We will continue to
support the investment in Pepperio as planned and remain encouraged about its
long term positive impact on the growth, revenue mix and profitability of the
company.


The Company's focus on Web Content Management seems to be well advised as there
is continued evidence of growth in the sector and new products such as
Microsoft's Sharepoint Server 2007 (MOSS) and the uptake of Web 2.0 initiatives
will result in additional opportunities which the Company is well placed to
exploit.


Lawrence Flynn
Chief Executive Officer
1st May 2007



Consolidated Profit & Loss Account
For the six months ended 31st March 2007

                           31st March 2007     31st March 2006    30th September
                                                                            2006
                                 Unaudited           Unaudited           Audited
                   Note
TURNOVER                       6,063,604           4,438,840         9,670,713
Cost of Sales                   (396,862)            (99,393)         (355,044)
                                 ---------           ---------       -----------
GROSS PROFIT                   5,666,742           4,339,447         9,315,669
                                 ---------           ---------       -----------
Operational Costs             (5,272,725)         (3,999,591)       (8,516,644)
OPERATIONAL
PROFIT                           394,017             339,856           799,025
Interest
Received/similar
income                             9,831              12,237             7,322
Interest payable                  (1,908)             (1,751)              (78)
                                 ---------           ---------       -----------
PROFIT/(LOSS) ON
ORDINARY
ACTIVITIES                       401,940             350,342           806,269
                                 ---------           ---------       -----------
Tax on
profit/(loss)                          0                   0           (54,314)
                                 ---------           ---------       -----------
Profit/(loss) on
ordinary
activities                       401,940             350,342           751,955
                                 =========           =========       ===========

Earnings per
share - basic         4              0.5p                0.5p              1.0p
Earnings per
share - diluted       4              0.5p                0.4p              0.9p



Consolidated Balance Sheet
As at 31st March 2007

                        31st March 2007       31st March 2006     30th September
                                                                            2006
                              Unaudited             Unaudited            Audited

FIXED ASSETS
Goodwill                       86,413               261,804            161,419
Tangible Assets               301,301               166,114            231,639
                             ----------             ---------        -----------
                              387,714               427,918            393,058
                             ----------             ---------        -----------
CURRENT ASSETS
Debtors                     3,548,628             3,503,345          3,499,892
Cash at Bank                1,143,950               723,052          1,080,487
                             ----------             ---------        -----------
                            4,692,578             4,226,397          4,580,379
                             ----------             ---------        -----------
                             ----------             ---------        -----------
CREDITORS DUE IN ONE
YEAR                       (2,676,568)           (2,941,570)        (2,968,698)
                             ----------             ---------        -----------
NET CURRENT ASSETS          2,016,010             1,284,827          1,611,681
                             ----------             ---------        -----------
TOTAL ASSETS LESS
LIABILITIES                 2,403,724             1,712,745          2,004,739
                             ----------             ---------        -----------
CREDITORS DUE OVER
ONE YEAR                       (1,039)              (77,552)            (3,994)
                             ----------             ---------        -----------
NET ASSETS                  2,402,685             1,635,193          2,000,745
                             ==========             =========        ===========

CAPITAL AND RESERVES
Called up equity
share capital                 772,448               772,448            772,448
Share Premium
Account                     9,638,377             9,638,377          9,638,377
Shares to be issued           505,326               490,950            505,326
Capital Redemption
Reserve                    13,083,244            13,083,244         13,083,244
Merger Reserve             27,297,412            27,297,412         27,297,412
Profit & Loss
Account                   (48,894,122)          (49,647,238)       (49,296,062)
                             ----------             ---------        -----------
SHAREHOLDERS FUNDS          2,402,685             1,635,193          2,000,745
                             ==========             =========        ===========



Consolidated Cashflow Statement
For the six months ended 31st March 2007

                        31st March 2007       31st March 2006     30th September
                                                                            2006
                              Unaudited             Unaudited            Audited

NET CASH
INFLOW/(OUTFLOW)
FROM OPERATING
ACTIVITIES                    197,634               446,117            945,112

Returns from
Investment and
service finance                 7,923                10,486              7,244
Taxation                            0                     0             49,933
Capital Expenditure          (142,094)              (36,357)          (168,976)
Acquisitions                        0                     0                  0
                              ---------             ---------        -----------
CASH INFLOW BEFORE
FINANCING                      63,463               420,246            833,313
                              ---------             ---------        -----------
Financing                           0                     0             (5,195)
                              ---------             ---------        -----------
INCREASE IN CASH IN
THE PERIOD                     63,463               420,246            828,118
                              =========             =========        ===========



Notes


 1. The interim financial information for the six months ended 31st March 2007
    and 31st March 2006 has been prepared in accordance with applicable United
    Kingdom accounting standards and under the historical cost convention in
    accordance with the Group's accounting policies published in the Annual
    Report for the year ended 30th September 2006.


    The financial information set out above does not constitute the company's
    statutory accounts as defined by section 240 of the Companies Act 1985. It 
    is an extract from the accounts for the year ended 30th September 2006 which 
    have been filed with the Registrar of Companies. The auditors' report was 
    unqualified. The auditors' report does not contain a statement under either 
    section 237(2) or (3) of the Companies Act 1985. The Group's auditors have 
    reported on those accounts as required by section 235 of the Companies Act 
    1985.

 2. These interim accounts do not include any provision for non-cash related
    share option charges under UITF17 which will be recognised in the full year
    accounts.


 3. The tax charge during the year ended 30th September 2006 related to
    disallowed R&D tax credits for the years ended 30th September 2003 and 30th
    September 2004. Given the Company's brought forward tax losses there is no
    tax charge for the 6 months ended 31st March 2007.


 4. Earnings per Share


    The profit/(loss) per ordinary share is calculated by reference to the 
    profit/(loss) attributable to ordinary shareholders divided by the weighted 
    average number of shares in issue during each period as follows :

                         6 months to            6 months to         12 months to
                     31st March 2007        31st March 2006       30th September
                                                                            2006
                       (unaudited)            (unaudited)            (audited)

Profit/(loss)
for the period             401,940                350,342              751,955

Basic -
Weighted
average
number of
shares                  77,244,842              77244,842           77,244,842

Basic -
Profit/(loss)
per share                      0.5p                   0.5p                 1.0p

Fully diluted
- Weighted
average number
of shares               85,135,476             84,519,993           84,714,632

Fully diluted
- Profit/(loss)
per share                     0.5p                   0.4p                 0.9p



5. A copy of the unaudited interim accounts of the Company will be sent to all
    shareholders within the next 3-4 weeks and will be available for download
    from the company's website www.mediasurface.com.


For further information, please contact:


Lawrence Flynn, CEO or David Deacon, CFO
Mediasurface plc                            01635 262000


Adam Reynolds                    
Hansard Group                               020 7245 1100



                      This information is provided by RNS
            The company news service from the London Stock Exchange
                                                                                                                                                 

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