RNS Number:0954P
Mediasurface PLC
08 January 2007
Mediasurface plc ('MSR') - Company Registration Number - 4016495
Results for the Year Ended 30th September 2006
Mediasurface plc, the AIM listed Content Management Software Author and Vendor
announces results for the year ended 30th September 2006.
Financial and Operating Highlights-
* Turnover up 42% to #9.67 million (2005 :#6.80 million)
* UK achieved revenue growth of 58%
* USA revenues doubled
* License revenue growth of 61%
* Annualised recurring revenue up 28% at #2.5 million (2005 : #1.95
million)
* Reported operating profit before operating exceptionals of #0.81 million
(2005 : loss of #0.54 million)
* Cash of #1.1 million as at 30th September 2006 (2005 : #0.3 million)
* Bank facility increased to #0.5m (2005 : #0.35 million) to provide
additional working capital headroom
* Continued investment in software development of #1.37 million (2005 :
#1.25 million)
* Released a new version of Mediasurface Morello (5.4) in July 2006
* Pepperio, a new product for the SMB market place, was officially
launched in May 2006
* Established a software development centre in Bangalore, India in April
2006
* Established a sales office on the West Coast of the USA
* Pipeline opportunities continue to increase both in quantity and quality
Chairman's Statement
The Group achieved revenues of #9.7m (2005: #6.8m), up 42% compared to last
year. This growth was driven by the company's flagship product Morello, license
sales increased by an impressive 61% compared to last year which gained further
market share in our key verticals. This success is a key driver for consulting
and support revenues growth going forward.
During the financial year the Group reported a profit for both the first and
second halves. A profit of #0.8m (2005: Loss #0.5m excluding non-cash
exceptionals) is reported for the full year. The financial year included major
new business wins with the ODPM, Department for Transport, Newstar Asset
Management, UCAS and a major pharmaceutical company in addition to numerous
mainstream deals.
The Group's cash position stood at #1.1m at year end having generated cash of
#0.8m during the year. Given the company also has a #0.5m overdraft facility the
financial health and working capital headroom of the Group is the best since
flotation.
The Group also launched its new product called Pepperio in May 2006 which is
designed to bring the power of content management to the small and medium sized
business sector. The product has already been adopted by a growing partner
channel and has been successfully implemented by numerous new customers. The
revenue stream, which is on a low cost monthly rental basis, represents a new
robust revenue stream for the Group.
The Group, as announced at the interims, invested heavily during the second half
in Sales & Marketing infrastructure to fully exploit market opportunities for
both Morello and Pepperio including expansion in the USA together with
aggressive Marketing activities. In addition, the Group continued to invest in
software development and established a software development centre in Bangalore,
India which now gives the company a lower cost alternative to develop new
product innovations.
In line with stated policy, earnings for the foreseeable future will be
reinvested to finance the growth of the Group and acquisition strategy.
Consequently the Directors do not recommend the payment of a dividend. (2005 :
#Nil)
I am pleased the Group has demonstrated significant growth in the year in terms
of revenue, profits and cash whilst increasing investment to grow revenues in
the future. The Directors believe the current strategy will continue to drive
growth in the next financial year.
Michael Jackson
Chairman
8th January 2007
Chief Executives Statement
I am very pleased to report that the year ended 30th September 2006 represented
the fourth consecutive year of growth in revenues, profits and cash since the
new management team was appointed in 2002.
The company remained focussed on the activities and markets it has been
addressing since 2002, namely the provision of Web Content Management (WCM)
software to business and the public sector. The overall WCM sector according to
Oracle is worth $3.6bn worldwide and growing at 13%, however, Mediasurface is
outstripping this growth by a factor of 3. The basis of the company's trading
success was the competitiveness of its flagship Enterprise Web Content
Management (EWCM) product - Morello. Morello licence revenues increased by 61%
which we believe, makes us the fastest growing provider of EWCM software
globally. The product has continued to be highly competitive enabling
Mediasurface to contest and win business at some of the largest companies and
organisations against much larger and more established players. In so doing the
company has been able to drive a 38% increase in the average value of new
business licence transactions proving the increased value of this type of
technology to major companies and organisations. Simply put, the Morello product
is best of breed and has given Mediasurface the competitive edge to win market
share.
On a geographic basis the company continued to operate in its 3 established
markets of UK, Netherlands and the USA with the majority of investment for
growth being in the USA which performed well achieving 99% growth for the full
year. Looking forward to the FY07 year the company intends to remain focussed on
this strategy together with further US based expansion and additional growth
planned in the Nordic and Asia Pacific markets.
The successes of the Morello product sales were additionally reflected in the
other two traditional revenue streams of the company, namely professional
services and the recurring annual maintenance stream. The services business grew
at 40% and recorded its best ever results. The demand for Morello driven
professional services was and remains high as a number of customers have enjoyed
successful implementation projects and more still have successfully upgraded to
the company's latest software releases. The company has both recruited
additional resources to meet demand and successfully partnered with larger
services organisations such as Logica CMG and Pink Roccade for specific
customers and vertical markets. The company will continue the dual strategy of
internal resources and partnering to best deliver the customer's requirements.
Annual maintenance revenues continued to grow reaching an annual run rate of
#2.5m by year end. In addition to the support of our existing customers the
company's growth into the India and Australasia marketplaces offers more
flexible solutions for 24x7 support in a "follow the sun" model.
The year saw the launch of the company's new product set Pepperio. Having
acquired the SilverBullet product via the acquisition of Class Act BV last year
the company invested additional R&D in the product first before re-launching
under the new name - Pepperio. This product is not marketed in the same fashion
as Morello and is aimed at a different audience. The product is targeted at the
Small to Medium sized Business (SMB) sector which has little or no internal IT
resources available to deploy and run their websites. For these customers it
removes any IT issues as the solution is provided to them as a service from
Mediasurface who takes care of all the hosting and other IT matters.
Additionally, the product is not sold directly by Mediasurface but by a network
of value adding design agencies who can ensure that the customer has a well
designed, professional and brand supporting website. Finally, the customer gets
access to the Pepperio management tool through their browser and can therefore,
with little or no training, maintain their own websites and keep all of their
content freshly up to date. The customer therefore gets a professionally
designed website delivered from a secure hosted environment with the ability to
control the content themselves and all for a modest setup and design fee
followed by a low monthly rental.
Pepperio represents a new and annuity based revenue stream, access to a new tier
of the marketplace and a highly cost effective platform for geographic
expansion. Early signs of success are present with a network of agencies being
successfully recruited and a number of customer sites already live. The impact
on the company's revenue numbers for the year was very modest but as the channel
continues to grow we can look forward to a valuable, high quality addition to
the company's revenues and profits.
Since R&D is essential to a growing software company Mediasurface continued its
investment in product throughout the financial year bringing to the market two
exciting major releases of the Morello product and two of the Pepperio product.
This is a trend the company intends to continue however the opening of our
Bangalore based R&D centre has given the company a much more cost effective and
scalable model than typically available to a company of comparable size. FY07
will see a number of new and exciting product releases for both product lines
including, in particular, the Morello product providing support of Microsoft
technologies and Pepperio adding important e-commerce and analytics capabilities
to its product mix.
During FY07, the company will remain focussed on executing its R&D, marketing,
sales growth, geographic growth and customer service goals. I remain confident
that the company is well placed to deliver growth from its two well
differentiated and strong product offerings.
Lawrence Flynn
Chief Executive Officer
8th January 2007
Consolidated Profit and Loss Account
Year ended 30th September 2006
2006 2005
# #
TURNOVER
Existing operations 9,670,713 6,716,393
Acquisition - 80,040
-------- --------
Continuing operations 9,670,713 6,796,433
Cost of sales (355,044) (210,823)
-------- --------
Gross profit 9,315,669 6,585,610
Operating expenses (8,516,644) (7,440,442)
------------------------------- -------- --------
OPERATING PROFIT/(LOSS )BEFORE EXCEPTIONAL 813,401 (543,951)
OPERATING EXPENSES
Exceptional Operating Expenses :
- Provision for UITF17 Share Option Cost (14,376) (519,522)
- Release of Sundry Creditor - 208,641
------------------------------- -------- --------
OPERATING PROFIT/(LOSS)
- Existing Operations 799,025 (847,575)
- Acquisition - (7,257)
-------- --------
799,025 (854,832)
Interest receivable 7,322 43,246
Interest payable and similar charges (78) (23)
-------- --------
PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE 806,269 (811,609)
TAXATION
Tax charge on profit/(loss) on ordinary (54,314) -
activities -------- --------
PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTER 751,955 (811,609)
TAXATION AND FOR THE FINANCIAL YEAR ======== ========
------------------------------- -------- --------
Profit/(Loss) per share - basic 1.0p (1.1)p
Profit/(Loss) per share - diluted 0.9p (1.0)p
------------------------------- -------- --------
Consolidated Balance Sheet
30th September 2006
2006 2005
# #
FIXED ASSETS
Intangible Assets 161,419 285,804
Tangible assets 231,639 170,890
393,058 456,694
CURRENT ASSETS
Debtors 3,499,892 2,463,304
Cash at bank and in hand 1,080,487 302,806
4,580,379 2,766,110
CREDITORS: amounts falling due (2,968,698) (1,860,401)
within one year
NET CURRENT ASSETS 1,611,681 905,709
TOTAL ASSETS LESS CURRENT LIABILITIES 2,004,739 1,362,403
CREDITORS: amounts falling due after more (3,994) (77,552)
than one year
NET ASSETS 2,000,745 1,284,851
CAPITAL AND RESERVES
Called up equity share capital 772,448 772,448
Share premium account 9,638,377 9,638,377
Shares to be issued 505,326 490,950
Capital redemption reserve 13,083,244 13,083,244
Merger reserve 27,297,412 27,297,412
Profit and loss account (49,296,062) (49,997,580)
EQUITY SHAREHOLDERS' FUNDS 2,000,745 1,284,851
Consolidated Cashflow Statement
Year ended 30th September 2006
2006 2005
# #
Net cash inflow/(outflow) from operating 945,112 (1,015,037)
activities
Returns on investments and servicing of finance 7,244 43,223
Taxation 49,933 -
Capital expenditure (168,976) (76,543)
Acquisitions - (90,780)
Cash inflow/(outflow) before financing 833,313 (1,139,137)
Financing (5,195) (2,280)
Increase/(Decrease) in cash in the year 828,118 (1,141,417)
Notes :
1. The financial information set out above does not constitute the Group's
statutory accounts as defined by section 240 of the Companies Act 1985 for the
years ended 30 September 2006 or 30 September 2005 but is derived from these
accounts. Statutory accounts for 2005 have been delivered to the Registrar of
Companies in England and Wales and those for 2006 will be delivered following
the Company's Annual General Meeting.
The auditors have reported on the 2005 and 2006 accounts. Their reports for both
years were unqualified and did not contain statements under section 237 (2) or
(3) of the Companies Act 1985.
2. The preliminary announcement of results has been prepared under the
historical cost convention in accordance with the Group's accounting policies
for the year ended 30th September 2006.
3. Earnings per Share
The loss per ordinary share is calculated by reference to the loss attributable
to ordinary shareholders divided by the weighted average number of shares in
issue during each period as follows:
2006 2005
# #
Profit/(Loss) for the year 751,955 (811,609)
Basic - weighted average number of shares 77,244,842 76,822,353
Basic - profit/(loss) per Share 1.0p (1.1)p
Fully diluted - weighted average number of 84,714,632 84,047,504
shares
Fully diluted - profit/(loss) per Share 0.9p (1.0)p
4. The Annual General Meeting is scheduled to be held at 10am Thursday 22nd
February 2007 at the Company's Head Office in Newbury.
5. Copies of the published accounts of the Company will be sent to all
shareholders within the next 3-4 weeks.
Latest News
Google and Mediasurface to Bring Improved Search Capability to the Enterprise
Mediasurface and Google have signed a distribution agreement in which
Mediasurface will bundle the Google Search Appliance with Morello, its award
winning web content management system, enabling the two organisations to provide
best of breed web content management and corporate-strength search facilities in
one offering. The two organisations already had a number of joint customers and
this formal agreement is a natural progression of that relationship.
The Google Search Appliance delivers similar results for enterprise information
that Google.com achieves for information on the internet and this new
relationship with Google will help Mediasurface deliver even more value to its
users.
Mediasurface Releases Morello 5.5 and Delivers Support of Microsoft .NET
Developers
Mediasurface also announces today the latest release of Morello, v5.5 which
includes Microsoft ASP.NET delivery opening up the extensive Microsoft market to
Mediasurface and bringing the benefits of Morello to Microsoft developers.
The new release also includes support of the open source Linux operating system,
again extending the market for Morello. It also includes many new features such
as the innovative Document Conversion facility that allows users to drag and
drop Word documents into the Morello repository then automatically convert them
to web pages whilst ensuring that metadata and other attributes are seamlessly
handled by Morello.
For further information please contact:
Lawrence Flynn Chief Executive Officer
David Deacon Chief Financial Officer
Telephone : 01635 262000
Fax : 01635 262001
Address : Mediasurface House
Newbury Business Park
London Road
Newbury RG14 2QA
Adam Reynolds Hansard Group
Telephone : 020 7245 1100
This information is provided by RNS
The company news service from the London Stock Exchange
END
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