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Total Systems PLC (TTS)

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Thursday 22 December, 2005

Total Systems PLC

Interim Results

Total Systems PLC
22 December 2005



                               TOTAL SYSTEMS plc


      Unaudited Interim results for the half year ended 30 September 2005


Total Systems plc ('Total' or 'the Company'), suppliers of cost effective
flexible software systems for the financial services industry, primarily in the
insurance, warranty and pension fund management sectors, announces its
preliminary results for the half year ended 30 September 2005.





Financial Summary


  • Turnover                         £ 1.419m            (2004: £ 1.697m)
  • (Loss)/Profit before tax         £    (61)k          (2004: £ 137k)
  • Basic Loss per share/EPS         (0.44)p             (2004: 1.04p)
  • Interim dividend                 0.525p              (2004: 1.05p)
  • Gearing                          Nil                 (2004: Nil)
  • Net assets per share             37.86p              (2004: 38.63p)
  • Cash per share                   31.70p              (2004: 32.75p)




Business Highlights



Ultima, the complete policy lifecycle solution, continues to bring significant
business benefits to clients including:



  • Rapid translation of client needs into cost-effective solutions.
  • Robust and reliable software with proven long-term support.
  • Flexible and designed for change.
  • Easy integration with external systems.
  • Individual components of Ultima system available to meet niche
    requirements.



Total Fund Manager is a multi-fund, multi-currency investment management and
administration system for the pension and fund management industry.



Regarding the Company's current trading and outlook, Terry Bourne commented:



'We now have an experienced and professional sales organisation in place that
should build significant new business in the medium and long term. This will
include the identification and development of new revenue streams. However it is
unlikely that such business will be obtained within the current financial year.



The Company's finances remain on a sound footing with costs being held under
strict control. Our strong balance sheet will enable us to take advantage of
opportunities as they occur. Your Board will take all necessary measures to
ensure the long term prospects of the Company and this will include a continuing
review of dividend payments.'



E-mail: [email protected]     web site: www.totalsystems.co.uk

Enquiries:
Terry Bourne, Chairman              Total Systems plc        020 7294 4888
Granville Harris, Finance Director  Total Systems plc        020 7294 4888






Notes for Editors:



Based in the City of London Total provides cost effective flexible software
systems for the financial services sector, primarily in the insurance, warranty
and pension fund management sectors, as well as complementary IT consultancy,
development, integration and support services.



The Company gained a full listing on the London Stock Exchange in 1995.



Significant investment has been made by the Company in developing the Ultima
(General insurance system for personal and commercial lines) and Total Fund
Manager (Investment management, accounting and administration system).



Examples of Total's clients for Ultima include Axa Insurance Services (Denplan),
Bluesure, Dixons, HSBC Insurance and Zurich Insurance Company (Navigators &
General).



Chairman's Statement




Results



Turnover for the half year was £ 1,419,101 (2004: £1,696,642) and loss before
tax was £61,309 (2004 profit: £136,878) resulting in a loss per share of 0.44p
(2004: earnings per share 1.04p).



Financial



Zero gearing and net assets of 37.86p per share (2004: 38.63p), of which 31.70p
per share (2004: 32.75p) is represented by cash continues to demonstrate our
financial strength during this difficult trading period.



Dividend



Your Board proposes a payment of an interim dividend of 0.525 pence per share.
This is half the figure paid last year and is a reflection of the reduced
performance of the Company and its immediate prospects for the remainder of this
financial year.



The dividend will be paid on 8 February 2006 to all shareholders on the register
on 6 January 2006.



Strategy



Our strategy is to provide software, support and expertise to help financial
services companies achieve their objectives, particularly in terms of reducing
the time taken to bring new products to market, improving operational efficiency
and reducing total cost of ownership. Your Company concentrates on the
insurance, warranty and fund management sectors of the financial services
industry and has continued to invest significantly in the development of the
Ultima product.



As reported in July the Board has taken action to improve the sales and
marketing team and I would like to take this opportunity to welcome Colin Fox to
the Board as Sales Director. Experienced and successful sales and marketing
executives have now been recruited and this new team is making solid progress in
developing the sales pipeline required for the future success of the Company. In
addition, a specialised account management function has been created, reporting
to the Sales Director. The aim is to build on the strong relationships we have
with our customers to provide additional services and to use these links to
extend the breadth of the Ultima product to mutual benefit.



In order to assist the Company's future development we have continued investment
in our infrastructure by purchasing necessary computer equipment and, since 30th
September, by commencing the refurbishment of our premises to create a better
working environment for our staff and clients.



Products



Your Company markets two complementary products. Ultima is a customer oriented
policy management system for complete insurance and warranty policy lifecycle
management, encompassing quotations, underwriting, claims, accounting, broker
management, management information and reporting. Total Fund Manager (TFM) is a
multi-fund, multi-currency, administration and accounting system for the pension
and fund management industry with extensive performance measurement, compliance
and reporting capabilities.



Ultima is targeted at insurers and warranty providers seeking to facilitate
maximum efficiency while assuring regulatory compliance and enabling clients to
quickly adapt to changing business conditions. Ultima can run over 30 lines of
business concurrently and is noted for its flexibility and reliability. Ultima 9
is now available as is the offering of Ultima on a Service Oriented Architecture
basis which means that individual business components of Ultima can be deployed
even more cost effectively. The Business Configurator facility enables customers
to make their own enhancements and launch new or enhanced products without the
need for programming work. Ultima has been recently developed to include
workflow and integrated document imaging as well as other useful enhancements.



TFM is suitable for any fund manager looking for a cost-effective reliable
solution for administration and accounting of a virtually unlimited number of
funds under management.



Operations



The first phase implementation of Ultima at HSBC Insurance has gone live. Our
other clients have continued to develop and upgrade their installations.
Additional development projects with existing clients are being undertaken as
they successfully use the strengths of Ultima to expand their facilities and
introduce new products into their markets. An Ultima user group meeting, held in
November, provided positive feedback and the new developments to Ultima were
greeted with enthusiasm.



Market place



Our perception is that the marketplace is improving and companies are starting
to invest. The Board is increasingly confident that new contracts will be
secured over the next twelve months.



Staff



Our staff  have continued to show their outstanding professionalism and have
thrived on helping our clients realise their vision. Your Company is continuing
to recruit and develop first class people within the technical department. I
would like to thank them all for their loyalty, dedication, enthusiasm and
commitment and look forward to working with them in the future.



Current trading and outlook



We now have an experienced and professional sales organisation in place that
should build significant new business in the medium and long term. This will
include the identification and development of new revenue streams. However it is
unlikely that such business will be obtained within the current financial year.



The Company's finances remain on a sound footing with costs being held under
strict control. Our strong balance sheet will enable us to take advantage of
opportunities as they occur. Your Board will take all necessary measures to
ensure the long term prospects of the Company and this will include a continuing
review of dividend payments.






Terence Bourne

Chairman

21 December 2005

LTS



                     Consolidated Profit and Loss Account

                   for the half year ended 30 September 2005


                                                                         Unaudited       Unaudited         Audited
                                                                          6 Months        6 Months       12 Months
                                                                             ended           ended           ended
                                                                      30 September    30 September        31 March
                                                                              2005            2004            2005
                                                          Note                   £               £               £

Turnover: continuing operations                              2           1,419,101       1,696,642       3,451,633

Operating (Loss)/Profit: continuing operations                           (139,390)          57,432         337,695
Interest receivable and similar income                                      78,087          79,446         158,403
Interest payable and similar charges                                           (6)               -               -

(Loss)/Profit on ordinary activities before taxation                      (61,309)         136,878         496,098

Tax credit/(charge) on (loss)/profit on ordinary                            15,055        (27,856)       (121,472)
activities

(Loss)/Profit on ordinary activities after taxation
attributable to shareholders                                              (46,254)         109,022         374,626

Dividend paid                                                5           (189,352)       (189,352)       (299,807)

Retained (loss)/profit for the period                                    (235,606)        (80,330)          74,819

Basic (loss)/earnings per ordinary share                     6             (0.44)p           1.04p           3.56p
Diluted (loss)/earnings per ordinary share                   6             (0.44)p           1.03p           3.56p
Dividend per ordinary share                                  5              0.525p           1.05p           2.85p




                            Consolidated Balance Sheet

                            as at 30 September 2005


                                                                          Unaudited        Unaudited         Audited
                                                                              as at            as at           as at
                                                                       30 September     30 September        31 March
                                                                               2005             2004            2005
                                                                                 £                £               £
ASSETS
Non-current assets
Property, furniture and equipment                                           653,522          669,357         660,840

Current assets
Trade and other receivables                                                 607,739          622,643         724,499
Cash and cash equivalents                                                 3,335,457        3,445,626       3,565,044
                                                                          3,943,196        4,068,269       4,289,543
TOTAL ASSETS                                                              4,596,718        4,737,626       4,950,383

LIABILITIES
Current liabilities
Trade and other payables                                                    492,387          450,896         610,446
Current tax liabilities                                                     121,473          223,415         121,473

TOTAL LIABILITIES                                                           613,860          674,311         731,919

NET ASSETS                                                                3,982,858        4,063,315       4,218,464

CAPITAL AND RESERVES
Called up share capital                                                     525,978          525,978         525,978
Share premium account                                                        83,004           83,004          83,004
Profit and loss account                                                   3,373,876        3,454,333       3,609,482

SHAREHOLDERS FUNDS                                                        3,982,858        4,063,315       4,218,464




                        Consolidated Cash Flow Statement

                   for the half year ended 30 September 2005



                                                                              Unaudited    Unaudited      Audited
                                                                               6 Months     6 Months    12 Months
                                                                                  ended        ended        ended
                                                                           30 September 30 September     31 March
                                                                   Note            2005         2004         2005
                                                                                      £            £            £
Operating activities
Cash received from customers                                                  1,885,123    2,101,539    4,181,560
Cash payments to suppliers                                                    (357,175)    (352,026)    (654,465)
Cash payments to employees                                                    (891,516)    (902,742)  (1,556,684)
Cash paid for PAYE and
National Insurance                                                            (455,519)    (575,218)  (1,025,857)
Cash paid for VAT                                                             (255,819)    (297,574)    (604,865)
Other business payments                                                        (15,629)     (42,717)     (33,017)

Cash (outflow)/inflow from operating activities                       8        (90,535)     (68,738)      306,672

Corporation tax paid                                                                  -            -    (195,559)

Net cash (outflow)/inflow from operating activities                            (90,535)     (68,738)      111,113

Cash flows from investing activities

Interest received                                                                78,087       79,446      158,403
Purchase of furniture and equipment                                            (27,781)     (50,533)     (79,468)

Net cash inflow from investing activities                                        50,306       28,913       78,935

Cash flows from financing activities

Proceeds from exercise of share options                                               -          936          936
Interest paid                                                                       (6)            -            -
Equity dividends paid                                                         (189,352)    (189,352)    (299,807)

Net cash outflow from financing activities                                    (189,358)    (188,416)    (298,871)

Net change in cash and cash equivalents                                       (229,587)    (228,241)    (108,823)

Opening cash and cash equivalents                                             3,565,044    3,673,867    3,673,867

Closing cash and cash equivalents                                             3,335,457    3,445,626    3,565,044




                          Notes to the Interim Report:



1.                    The financial information contained in this statement does
not constitute the statutory accounts as defined in section 240 of the Companies
Act 1985. The abridged information for the 12 months ended 31 March 2005 has
been extracted from the Group's statutory accounts for that period, which have
been filed with the Registrar of Companies. The auditors report on the Group's
accounts for that period were unqualified and did not contain a statement under
Section 237(2) or Section 237(3) of the Companies Act 1985. Prior year
comparatives have been restated for International Financial Reporting Standards
('IFRS') conversion adjustments and remain unaudited.



2.                    The Group's turnover is derived from the writing and
supply of computer software and supply of third party software both with related
hardware in the United Kingdom. All activities derive from continuing
operations.



3.                    The accounting policies followed in the Interim Financial
Report are in accordance with IFRS. There were no significant changes in
accounting policies following the adoption of IFRS compared to the policies
consistently applied previously under UK GAAP. A full list of the accounting
policies under UK GAAP was disclosed in the Group's statutory accounts for the
year ended 31 March 2005.



4.                    The Group's transition date for the adoption of IFRS is 1
April 2004. This transition date has been selected in accordance with IFRS 1 '
First-time adoption of International Financial Reporting Standards'. The only
difference for the Group between reporting under IFRS and UK GAAP is that the
Group no longer recognises dividends payable to shareholders prior to their
approval by the Annual General Meeting in the case of the final dividend and by
the Board in the case of the interim dividend. The next annual financial
statements of the Group will be prepared in accordance with IFRS.  The financial
information contained in this Interim Financial Report has been prepared on the
basis of IFRS that the directors expect to be applicable at 31 March 2006. The
net impact to net assets on the adoption of IFRS is set out in note 9. The
adoption of IFRS has no impact on the net income of the Group.



5.                    The interim dividend of 0.525 pence per share (2004: 1.05
pence per share) is payable on 8 February 2006 to shareholders registered at the
close of business on 6 January 2006 and will amount to £ 55,228 (2004: £
110,455).



6.                    The calculation of basic (loss)/earnings per share is
based on a loss after taxation of £ 46,254 (2004 profit: £109,022) and a
weighted average of 10,519,553 shares (2004: 10,517,617) in issue during the
period. The calculation of diluted (loss)/earnings per share is based on a
weighted average of 10,522,186 shares (2004: 10,536,448).



7.                    It is intended to post this Interim Report to shareholders
on 28 December 2005. Copies will also be available from the Registered Office of
the Group at 394 City Road, London, EC1V 2QA.


Notes to the interim report



8.         Reconciliation of operating (loss)/profit to net cash (outflow)/
           inflow from operating activities



                                                                         Unaudited          Unaudited         Audited
                                                                          6 Months           6 Months       12 Months
                                                                             ended              ended           ended
                                                                      30 September       30 September        31 March
                                                                              2005               2004            2005
                                                                                 £                  £               £

Operating (loss)/profit                                                  (139,390)             57,432         337,695
Depreciation charges                                                        35,099             37,812          74,826
                                                                                                               
Gain on sale of equipment                                                        -              (438)               -
Decrease in trade and other receivables                                    131,815            215,416         113,560
Decrease in current liabilities                                          (118,059)          (378,960)        (219,409)

Cash (outflow)/inflow from operating activities                           (90,535)           (68,738)         306,672




9.         Adoption of International Financial Reporting Standards

                                                                         Unaudited          Unaudited         Audited
                                                                          6 Months           6 Months       12 Months
                                                                             ended              ended           ended
                                                                      30 September       30 September        31 March
                                                                              2005               2004            2005
                                                                                 £                  £               £
Net assets under UK GAAP                                                 3,927,630          3,952,860       4,029,112
Dividend Recognition                                                        55,228            110,455         189,352
Net assets under IFRS                                                    3,982,858          4,063,315       4,218,464






ENDS


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