RNS Number:9096O
Macro 4 PLC
28 February 2008
Embargoed 07.00am
Thursday, 28 February 2008
Macro 4 plc
ANNOUNCES STRATEGIC GROWTH PLAN
AND
HALF-YEAR RESULTS FOR THE SIX MONTHS ENDED
31 December 2007
Macro 4 plc (the 'Company' or the 'Group'), the global software company, today
reports its unaudited results for the six months ended 31 December 2007. It is
also pleased to announce the conclusions of its strategic review and the main
elements of its strategic growth plan. These support a clear vision for
transforming the Company into a market-leading player in high-growth niche
markets. In particular, the Company's core products and skill sets will be
evolved and expanded to deliver a unique and integrated application performance
optimisation suite of products and services. These will work across high-profile
and interlinked disciplines such as internet transaction path analysis, end-user
application experience profiling, and computer energy efficiency monitoring and
improvement. We believe that these areas offer substantial and sustainable
growth potential.
* Total revenue �14.1m (2006 �14.9m)
o Recurring revenues up �147k (2%) to �8.875m
o Professional services revenue up �141k (17%) to �984k
o Total new business revenue �5.2m (2006 �6.2m)
* Profit before taxation, amortisation and material one-items �2.135m
(2006 �3.405m)
* Underlying trading profit �1.1m (2006 �2.7m)
* Profit after taxation �6k (2006 �1.0m)
* Cash balance increased �1m (28%) to �4.7m
* Interim dividend maintained at 2.5 pence per share
Commenting on today's announcement, Ronnie Wilson, Group Chief Executive said:
"These results reflect the currently difficult and competitive economic
environment, but do not yet benefit from the significant work which has been
done, and which is ongoing, to reposition and restructure the Company to take
advantage of the new high-growth target markets.
Our strengthened management team has refined and validated our strategic
direction and we have moved into the execution phase, extending our core product
offerings into new channels and growth areas. In parallel, we are restructuring
and repositioning the business to achieve better sales execution and maximise
future potential.
The primary objectives of these initiatives are to evolve Macro 4 into a market
leader in those functional areas where our core competencies will deliver
greatest sustainable growth. Alongside the existing product lines, we are
additionally focusing on the new operational challenges facing the IT functions
today, building a unique, comprehensive solution set to optimise performance of
our customer's IT systems across their key pressure points, areas such as the
end-user application experience, energy efficiency, virtual systems and load
testing.
On the document management side, through further product development, a stronger
sales organisation and increased use of our professional services skills, we are
improving our relationships with channel partners to help them evolve their
offering in line with the demands of those markets.
While much work remains, we are now much better positioned to achieve our plans
and I am confident that we will deliver the significant potential we see ahead".
Key results summary
�m (except per share data) 2007 2006 Change Change%
Revenue 14.1 14.9 (0.8) -6%
Operating expenses (13.6) (13.1) (0.5) -3%
Material one-off items (0.7) (0.5) (0.2) -34%
Operating (loss)/profit (0.2) 1.3 (1.5) -113%
PBTae (Note A) 2.1 3.4 (1.3) -37%
Underlying Trading Profit (Note B) 1.1 2.7 (1.6) -60%
Profit after taxation - 1.0 (1.0) -100%
Basic earnings per share - 4.6p (4.6)p -100%
Dividend per share 2.5p 2.5p - -
Cash 4.7 3.7 1.0 28%
David Smyth, Group Finance Director, commented:
"In the current economic climate we have been affected by elongated investment
decisions amongst potential customers. However, we have also seen many positive
aspects to the results for the period. The increase in recurring revenues, in
Professional Services (PS) revenues and in other areas of the business (such as
the IBM relationship) are all encouraging and helped support the top line
following the delay of a few SMS contracts. These delays resulted in new
business revenues falling to �5.2 million (2006 �6.2 million). Total group
revenue was �14.1 million compared to �14.9 million in 2006.
For the period, DMS revenue represented 43% of total group revenue (2006 40%),
while the DMS new business revenue was 42% of total new business revenue (2006
36%).
Profitability for the period also reflected expenditure and investments in a
number of areas, such as re-branding, additional marketing effort, greater
product development resource and certain material one-off items as we go through
a process of restructuring and repositioning the business for its future needs.
We believe that these investments are essential to improve the quality and
effectiveness of the sales effort and to properly position the Company to
deliver against its strategic plan.
Cost control and cash management have been strong throughout the Company,
helping the period-end cash balance to increase 28% (over the same period last
year) to �4.7 million. We are pleased to confirm that the dividend for the
period will be maintained at 2.5 pence per share."
Operational Results
Revenue
Total revenue for the period was �14.1 million (2006 �14.9 million). Of this,
�5.2 million, or 37%, was from new business (2006 �6.2 million, 42%) while
recurring revenue increased to �8.9 million, 63% of total revenue (2006 �8.7
million, 58%).
The decrease in new business revenue was primarily attributable to the SMS
division, where some anticipated contracts were delayed.
DMS new business revenue was marginally lower at �2.1 million and accounted for
42% of total Group new business revenue (2006 �2.3 million - 36%). Other sources
of new business, including Professional Services, performed well. It is planned
to increase the focus on the PS activities as we see significant customer demand
in this area.
As previously announced, we expect new business revenue to be more heavily
weighted towards the second half than last year. Current expectations are that
H2 will be stronger than H1, more in line with our original plan.
Recurring revenue increased by �0.2 million to �8.9 million (2006 �8.7 million)
with both SMS and DMS divisions showing an increase. Within this, maintenance
revenue showed a 5% increase over this period last year following the stronger
licence sales in the previous year. This was partially offset by a �0.2 million
reduction in licence rental revenue, in line with the established trend of
run-off in the legacy product rental contracts.
Operating Expenses
Total operating expenses increased by �0.5 million to �14.3 million (2006 �13.8
million). Staff costs, the Group's largest type of expense, were down �0.3
million on last year due to sales commissions being �0.1 million lower and
administration staff costs being lower by �0.4 million mainly due to reduced
EDSIP provisions. These reductions were partly offset by an increase of �0.2
million in product development staff costs.
Other operating costs, excluding material one-off items, were �0.6 million
higher than last year with increases in particular in marketing costs, provision
for bad and doubtful debts and infrastructure costs as well as an adverse
movement against last year's foreign exchange gain. There was also a charge for
material one-off items of �0.7 million, relating mainly to reorganisation costs
and the termination cost of a former director. We expect further material
one-off items in the second half as we complete the restructuring programme.
Group profitability and Earnings Per Share
The Group made an Underlying Trading Profit (UTP) of �1.1 million (2006 �2.7
million). Underlying Trading Profit is the adjusted measure of profit before
taxation, after adding back amortisation of intangibles, material one-off items
and share-based payment charges, then deducting capitalised development costs.
The directors believe that this key performance indicator gives a better
understanding of the underlying trading position as it removes the major one-off
and non-cash expenses, except depreciation, and recognises product development
costs in the year in which they are incurred. UTP basic earnings per share were
3.8 pence per share (2006 9.0 pence per share).
Under IFRS reporting standards, the Group reported a profit after taxation of
�6k for the period (2006 �1.0 million).
While it is intended that a replacement long-term Executive Deferred Share
Incentive Plan (EDSIP) will be put in place for this year, there is a
possibility that it will not be in place by the end of the financial year.
Should that be the case, subject to achievement of Company performance targets,
a cash bonus scheme could apply instead. This would affect reported results
under IFRS rules as a cash bonus is chargeable to the Profit and Loss Account as
incurred, rather than over the vesting period for share-based payments. H1 has
been reported on the basis that a replacement EDSIP scheme will be in place.
Balance Sheet and Cash Flow
The Group Balance Sheet continues to be strong and the cash balance improved by
�1 million on the same point last year. At 31 December 2007 the Group had a cash
balance of �4.7 million (31 December 2006 �3.7 million) and no debt. Cash
collections have been maintained at the excellent levels achieved last year and
the Group's Days Sales Outstanding (DSOs) are a respectable 30 days (2006 29
days).
Other than trading activities (including reorganisation and re-branding) and
dividends, there were no significant cash outflows. In the first half of last
year there were payments of �1.3 million for deferred consideration and �1.3
million for the purchase of own shares.
Dividend
The Board has agreed that the interim dividend remain at last year's level of
2.5 pence per share and will be paid on 15 May 2008 to all shareholders on the
register at 25 March 2008.
Capital structure
At 31 December 2007 the Group had 23,031,283 shares in issue (31 December 2006
23,025,781, 30 June 2007 23,026,687) with the increase in the shares in issue
being the new shares issued under the scrip dividend scheme. The market price of
the Company's shares at 31 December 2007 was 145.5 pence per share (31 December
2006 212 pence per share) giving a market capitalisation of �33.5 million (31
December 2006 �48.8 million).
Divisional results
Systems Management Solutions (SMS)
The SMS division experienced a fall in new revenue, down to �3.1 million (2006
�3.9 million).
The IBM OEM relationship continues to perform well, with revenue increasing by
�0.2 million to �0.7 million.
Recurring revenue was consistent at �5.0 million, of which maintenance revenue
accounted for �3.9 million (2006 �3.7 million) and licence rentals accounted for
�1.1 million (2006 �1.3 million). The expected decrease in licence rentals,
which come from our legacy mainframe products, continued as customers cease to
use the old technology from which this income derives. The increase in
maintenance revenue of �0.2 million was mainly due to the increase in previous
years' new contract sales.
SMS divisional costs were slightly down on last year at �3.2 million (2006 �3.3
million).
The revenue and cost performance described above has resulted in an overall
divisional contribution from SMS of �4.8 million, �0.8 million down on the �5.6
million last year.
Document Management Solutions (DMS)
DMS revenue was unchanged at �6.0 million. New revenue was slightly down at �2.1
million (2006 �2.3 million) but this was offset by an increase in recurring
revenue to �3.9 million (2006 �3.7 million).
Licence sales of �1.1 million comprised a number of smaller deals, but, unlike
the last year's �1.4 million, did not benefit from any significant sized deal.
The fall in licence sales was almost matched by an increase in PS revenue. This
increase was particularly the case in mainland Europe with gains in Belgium,
Germany and France. In each case this revenue was the result of licence sales
generated in previous years. This is an area of the business where we shall be
putting greater focus in the future as we have seen a healthy customer demand
that can be leveraged.
DMS costs rose over last year to �4.0 million from �3.7 million, mainly as a
result of additional direct third party costs relating to sales. Staff costs,
in particular product development costs also increased.
Overall divisional contribution from DMS was �2.0 million, �0.3 million down on
the �2.3 million achieved last year.
Group Business Services (GBS)
The GBS division comprises the central administrative functions, covering
finance, computer services, executive, legal, human resources and corporate
marketing. The division's costs were �4.8 million, marginally up from last
year's �4.6 million. This increase was due to essential technology upgrades to
the Group's system infrastructure and an adverse movement on last year's foreign
exchange gain, offset by a reduction in the EDSIP scheme costs.
Outlook for full year FY 2008
In the current economic climate, we see the longer lead times in bringing
opportunities to closure continuing. However, as previously announced, we expect
that H2 new business revenues should be in line with plan and accordingly should
be stronger than in H1.
H2 FY2008 will also see the continuation of the reorganisation and restructuring
programme, resulting in further material one-off items as the Company is
repositioned to deliver the potential in the strategic plan.
Strategy and vision
In a comprehensive strategic review of the company, all aspects of the business
were examined, determining the potential for each solutions area. This review
identified significant opportunities for both divisions and management are now
in the process of implementing the necessary changes to drive the Company
forward.
The Board of the Company has been considerably strengthened by the appointment
of Patrick Gallagher as Chairman, Richard Burns as Non-Executive Director, and
David Smyth as Finance Director.
The field sales organisation has been restructured and strengthened with three
new, highly experienced senior sales managers appointed in the USA, UK, and
Europe. The product development, support, and marketing functions have also been
restructured and strengthened and the brand has undergone a complete refresh.
Both divisional product lines have been thoroughly reviewed and clear plans for
delivering their growth potential have been laid down. Execution against these
plans has begun.
DMS
Our portfolio of products and capability within the document printing and
on-line document storage business is already comprehensive. Market demand for
these types of solutions is growing in line with the dramatically increasing
volume of document-based information within organisations.
We believe that success with this portfolio can best be achieved through a very
targeted focus regarding product development, market positioning and route to
market.
Accordingly, Macro 4 DMS Office Printing solutions are now focused almost
entirely on achieving market reach through external sales channels, in
particular the specialist hardware providers to whom large companies are
increasingly outsourcing their office printing needs. These suppliers, such as
Xerox, Ricoh, and HP have a strategic imperative to offer a software-based print
management infrastructure to support their existing hardware offering and
deliver the services required of them.
Macro 4 provides such an infrastructure and our product development, marketing,
and sales resource is aligned to the evolving needs of these suppliers. We
believe that this offers Macro 4 significant growth potential.
The DMS on-line document storage solutions compete in the Enterprise Content
Management (ECM) market, now dominated by IBM and EMC. These companies offer
very sophisticated solutions that deliver enterprise wide solutions to large
companies. However, these solutions are not appropriate (and are too expensive)
for large SMEs. Macro 4 has an outstanding track record within such companies,
providing solutions which support and enhance targeted business processes such
as accounts receivable, payroll, and call centre support. Macro 4 has an
opportunity to become the leading provider in this sector of the market,
providing our solutions to SMEs at an affordable price which delivers quick
returns on investment. The sales organisation is structured towards this end.
SMS
Within the SMS business, we have identified that Macro 4's strengths, which
include our deep domain expertise for mainframe applications fault and
performance management, have many applications beyond the current product set.
The Company recently extended its solution set into the distributed computing
world, with the launch of our A.P.P. platform, an independent performance
monitoring and diagnostics tool specifically aimed at Java based applications.
The internet is now a well established part of modern business applications.
Such applications not only automate and streamline the running of the business,
they are also used for marketing, revenue generation, customer acquisition and
service. They are of critical importance to organisations (and their customers),
and increasingly so.
In this context, applications performance management deals with the reliability
and scalability of the business application, the responsiveness from the end
customer's perspective, and the environmental impact of the application in terms
of resource and energy consumption. No one vendor currently provides this depth
and breath of understanding across all these areas.
This represents a significant opportunity for Macro 4's long-term growth in SMS.
Using its excellent foundation of customers, products and expertise, Macro 4
plans to evolve into an innovator and leader in the high growth Applications
Performance Management area. We will provide a comprehensive software and
services solution to assist the CIOs of large companies optimise the performance
of their business critical applications.
Macro 4 will provide an 'Applications Performance Ecosystem', with end to end
transaction profiling, applications behaviour analysis, end-user experience
monitoring, and energy metering. These services will evolve over the course of
the next three years, considering a combination of product development and
targeted acquisitions.
Our vision will create a unique business model, with long-term strategic
relationships with customers to deliver sustainable, and predictable revenue and
profit growth.
We are excited by the prospects and potential of this vision.
Ends
For more information please contact:
Macro 4 plc Tel: 020 3142 8700 (until12.30pm today)
Ronnie Wilson, Group Chief Executive Officer Tel: 01293 872000 (thereafter)
David Smyth, Group Finance Director
Piper Jaffray Ltd
Nigel Daly Tel: 020 3142 8700
About Macro 4
Macro 4 is a leading software company with operations and customers across the
world. It develops world-class business-enabling software in the areas of:
* Application availability, fault analysis and optimisation
* Application performance management
* Document management, warehousing and delivery solutions
Macro 4's market-leading solutions support complex traditional and e-business
environments across the world, providing customers with clear competitive and
financial advantage.
With 40 years' experience, the Company's key strengths lie in its ability to
provide organisations worldwide with innovative, scalable and competitive
software that is simple to install and operate, but delivers complex solutions
and real business and financial benefit.
Its customer base includes many of the world's largest organisations and covers
most business sectors, especially Telecoms, energy, financial services,
utilities, professional services (legal, accounting) and public sector /
government bodies.
The company also provides comprehensive IT professional services, consultancy
and educational training through its dedicated consulting arm.
Macro 4 is listed on the London stock exchange ("MAO").
www.macro4.com
Notes:
Note A - Profit before taxation, amortisation and material one-off items ('
PBTae')
Note B - Underlying Trading Profit, the adjusted measure of profit before
taxation, after adding back amortisation of intangibles, material one-off items
and share-based payment charges, then deducting capitalised development costs.
The directors believe that this key performance indicator gives a better
understanding of the underlying trading position. This is because it removes
all the major one-off and non-cash expenses, except depreciation, and recognises
product development costs in the year in which they are incurred.
Consolidated Half-Year Income Statement (Unaudited)
for the six months ended 31 December 2007
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
Note �000 �000 �000
Revenue
License rentals 1,543 1,744 3,347
Maintenance 7,332 6,984 14,178
Recurring revenue 8,875 8,728 17,525
License sales 3,587 4,610 9,441
Agents' royalties 640 690 1,404
Professional services and other revenue 991 905 1,910
New business revenue 5,218 6,205 12,755
Total revenue 6 14,093 14,933 30,280
Operating expenses before amortisation and 7 (12,064) (11,689) (23,309)
material
one-off items
Amortisation of intangible assets 7 (1,502) (1,535) (3,060)
Redundancy costs (including legal and 8 (247) (140) (657)
professional fees)
Compensation for loss of office for former 8 (339) (317) (317)
director and replacement costs (including
legal and professional fees)
Restructuring and strategy costs 8 (128) (77) (140)
Total operating expenses 7 (14,280) (13,758) (27,483)
Other operating income 20 82 109
Operating (loss)/profit (167) 1,257 2,906
Interest receivable 86 95 174
Interest payable - (16) (38)
(Loss)/profit before taxation (81) 1,336 3,042
Taxation 10 87 (309) (444)
Profit for the period 6 1,027 2,598
Earnings per share
Basic 12 0.0p 4.6p 11.7p
Diluted 12 0.0p 4.4p 11.5p
Dividend per share 11 2.5p 2.5p 7.5p
Under IFRS these financial statements do not reflect the proposed dividend. The
listing rules, however, require the dividend paid and proposed and the rates of
dividends to be shown on the face of the Income Statement for the preliminary
announcement:
6 months 6 months Year
ended ended ended
Per share 31 December 31 December 30 June
FY2008 FY2007 2007 2006 2007
pence pence �000 �000 �000
Ordinary shares of 5 pence each
Final paid 5.25 5.0 1,167 1,110 1,110
Interim proposed 2.50 2.5 555 555 555
7.75 7.5 1,722 1,665 1,665
Underlying Trading Profit
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
�000 �000 �000
(Loss)/profit before taxation (81) 1,336 3,042
Add: Amortisation of intangible assets 7 1,502 1,535 3,060
Add: Material one-off items 8 714 534 1,114
Add: Depreciation of tangible assets 426 460 896
Less: Net interest (86) (79) (136)
Earnings before taxation, interest, 2,475 3,786 7,976
depreciation, amortisation and material one-off
items (EBITDae)
Less: Depreciation of tangible assets (426) (460) (896)
Add: Net interest 86 79 136
Profit before taxation, amortisation and 2,135 3,405 7,216
material one-off items
Add: IFRS2 share-based payments 288 679 745
Less: Capitalised product development costs (1,321) (1,361) (2,739)
Underlying Trading Profit 1,102 2,723 5,222
Consolidated Half-Year Balance Sheet (Unaudited)
as at 31 December 2007
At At At
31 December 31 December 30 June
2007 2006 2007
Note �000 �000 �000
Assets
Non-current assets
Property, plant and equipment 6,453 6,844 6,636
Intangible assets 13 18,138 18,015 18,184
Deferred tax assets 863 1,420 998
Trade and other receivables 14 153 51 108
Total non-current assets 25,607 26,330 25,926
Current assets
Trade and other receivables 14 6,257 7,937 6,294
Current income tax assets 1,273 734 1,471
Cash and cash equivalents 4,709 3,679 6,560
Total current assets 12,239 12,350 14,325
Total assets 37,846 38,680 40,251
Liabilities
Non-current liabilities
Trade and other payables 15 (247) (253) (217)
Deferred tax liabilities (1,708) (1,721) (1,693)
Total non-current liabilities (1,955) (1,974) (1,910)
Current liabilities
Trade and other payables 15 (4,868) (5,825) (5,656)
Deferred income 16 (9,374) (9,304) (10,017)
Current income tax liabilities (332) (467) (475)
Total current liabilities (14,574) (15,596) (16,148)
Total liabilities (16,529) (17,570) (18,058)
Net assets 21,317 21,110 22,193
Equity
Called up share capital 1,152 1,151 1,151
Share premium account 2,460 2,453 2,455
Merger reserve 6,948 6,948 6,948
Capital redemption reserve 162 162 162
Own shares reserve (2,055) (2,042) (1,944)
Translation reserve (125) (216) (259)
Retained earnings 12,775 12,654 13,680
Total equity 21,317 21,110 22,193
Consolidated Half-Year Statement of Changes in Shareholders' Equity (Unaudited)
for the six months ended 31 December 2007
Share Own Translation Retained Other Total
capital shares reserve earnings reserves equity
�000 �000 �000 �000 �000 �000
Balance at 1 July 2006 1,117 (740) (101) 12,232 9,567 22,075
Profit for the period - - - 1,027 - 1,027
Foreign exchange adjustment - - (115) - - (115)
Total recognised income for the period - - (115) 1,027 - 912
IFRS2 credit in respect of share options - - - (14) - (14)
IFRS2 credit in respect of EDSIP - - - 678 - 678
EDSIP share capital 34 - - (34) - -
Purchase of own shares - (1,328) - - - (1,328)
Cash paid for unapproved share option - - - (111) - (111)
schemes
Share option cash received - 12 - - - 12
Transfer from own shares on exercise of - 14 - (14) - -
share options
Scrip dividend - share premium account - - - - (4) (4)
Dividend paid - - - (1,110) - (1,110)
Balance at 31 December 2006 1,151 (2,042) (216) 12,654 9,563 21,110
Profit for the period - - - 1,570 - 1,570
Foreign exchange adjustment - - (43) - - (43)
Total recognised income for the period - - (43) 1,570 - 1,527
IFRS2 credit in respect of share options - - - 25 - 25
IFRS2 credit in respect of EDSIP - - - 56 - 56
Cash settlement of share options - - - (191) - (191)
Share option cash received - 46 - - - 46
Transfer from own shares on exercise of - 52 - (52) - -
share
Options
EDSIP and share options deferred - - - 173 - 173
taxation credit
Scrip dividend - share premium account - - - - 2 2
Dividend paid - - - (555) - (555)
Balance at 30 June 2007 1,151 (1,944) (259) 13,680 9,565 22,193
Profit for the period - - - 6 - 6
Foreign exchange adjustment - - 134 - - 134
Total recognised income for the period - - 134 6 - 140
IFRS2 credit in respect of share options - - - 7 - 7
IFRS2 credit in respect of EDSIP - - - 311 - 311
Purchase of own shares - (147) - - - (147)
Cash settlement of share options - - - (7) - (7)
Share option cash received - 19 - - - 19
Transfer from own shares on exercise of - 17 - (17) - -
share options
EDSIP and share options deferred - - - (38) - (38)
taxation credit
Scrip dividend - share premium account 1 - - - 5 6
Dividend paid - - - (1,167) - (1,167)
Balance at 31 December 2007 1,152 (2,055) (125) 12,775 9,570 21,317
Consolidated Half-Year Cash Flow Statement (Unaudited)
for the six months ended 31 December 2007
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
Note �000 �000 �000
Cash flows from operating activities
Profit after taxation 6 1,027 2,598
Adjustments for:
Depreciation of tangible assets 7 426 460 896
Amortisation of intangible assets 249 315 617
Amortisation of product development 1,253 1,220 2,443
Share option charge/(credit) 7 (14) 11
EDSIP charge 311 678 734
Foreign exchange adjustment 101 6 6
Loss on sale of fixed assets 1 - 7
Interest receivable (86) (95) (174)
Interest payable - 16 38
Taxation (credit)/charge 10 (87) 309 444
Cash generated from operations before changes in working 2,181 3,922 7,620
capital
Decrease/(increase) in trade and other receivables 321 (1,670) (139)
(Decrease)/increase in deferred income (1,030) (440) 368
Decrease in trade and other payables (860) (945) (862)
Cash generated from operations 612 867 6,987
Income tax received/(paid) 257 (275) (571)
Net cash generated from operating activities 869 592 6,416
Cash flows from investing activities
Purchase of property, plant and equipment (227) (324) (564)
Proceeds from sale of property, plant and equipment 2 - -
Purchase of intangible assets (121) (637) (1,093)
Payment of deferred consideration on intangible assets - (1,314) (1,542)
Capitalised product development costs (1,321) (1,361) (2,739)
Interest received 86 95 174
Net cash used in investing activities (1,581) (3,541) (5,764)
Cash flows from financing activities
Dividends paid (1,216) (1,188) (1,669)
Purchase of own shares (147) (1,328) (1,328)
Interest paid - (16) (38)
Scrip dividend legal costs written off share premium (5) (13) (12)
account
Cash paid in lieu for unapproved share option schemes (7) (111) (303)
Share option cash received 19 12 58
Net cash used in financing activities (1,356) (2,644) (3,292)
Net decrease in cash and cash equivalents (2,068) (5,593) (2,640)
Cash and cash equivalents at the beginning of period 6,560 9,452 9,452
Effect of exchange rate fluctuations in cash held 217 (180) (252)
Cash and cash equivalents at end of period 4,709 3,679 6,560
Notes to the Group Results (Unaudited)
for the six months ended 31 December 2007
1 Basis of preparation
Macro 4 plc (the 'Company') is a company incorporated in England and Wales. The
financial statements are presented in Pound Sterling, rounded to the nearest
thousand.
The unaudited condensed accounts of the Company for the six months ended 31
December 2007 comprise the Company and its subsidiaries (together referred to as
the 'Group'). There are no associates or joint ventures to be consolidated.
In accordance with Section 240(3) of the Companies Act 1985, such unaudited
results do not constitute statutory financial statements of the Company or the
Group.
The six months' results for both years are unaudited. The results for the year
ended 30 June 2007 are an abridged version of the financial statements for that
year. These accounts are not the Company's statutory accounts for that
financial year. The statutory financial statements for that year have been
delivered to the Register of Companies; the report of the Auditors was
unqualified and did not contain a statement under Section 237(2) or Section 237
(3) of the Companies Act 1985.
2 Statement of compliance
These condensed half-year financial statements have been prepared in accordance
with IAS34 Interim Financial Reporting. They do not include all of the
information required for full annual financial statements and should be read in
conjunction with the consolidated financial statements of the Group for the year
ended 30 June 2007.
The condensed half-year financial statements were approved by the Board on 27
February 2008.
3 Significant accounting policies
The accounting policies and presentation applied by the Group in these condensed
half-year financial statements are the same as those applied by the Group in its
consolidated financial statements for the year ended 30 June 2007. These
accounting policies are drawn up in accordance with International Accounting
Standards (IAS) and International Financial Reporting Standards (IFRS) as
adopted by the European Union (adopted IFRS). The policies have been
consistently applied to all the periods presented.
4 Accounting estimates and judgements
The preparation of half-year financial statements requires management to make
judgements, estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and expenses. Actual
results may differ from these estimates.
In preparing these consolidated half-year financial statements, the significant
judgements made by management in applying the Group's accounting policies and
the key sources of estimation were the same as those applied to the consolidated
financial statements for the year ended 30 June 2007.
5 Risks and uncertainties
The principal risks and uncertainties affecting the business activities of the
Group remain those detailed on pages 15 to 17 of the Annual report and accounts
2007.
6 Revenue and segmental analysis
Segment information is presented in respect of the Group's geographical and
divisional segments. The primary format, geographical segments, is based on the
Group's corporate and internal reporting structure.
Revenue by geography
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
�000 �000 �000
United States of America 3,495 4,079 8,183
United Kingdom 5,282 4,566 10,028
Rest of Europe excluding Germany and France 2,255 2,537 4,949
Germany 1,854 1,954 3,981
France 1,207 1,797 3,139
14,093 14,933 30,280
Segmental analysis by geography
6 months ended Consol
31 December 2007 UK USA Germany France Other adjustment Total
�000 �000 �000 �000 �000 �000 �000
Segment revenue 5,282 3,495 1,854 1,207 2,255 - 14,093
Segment result (694) 1,884 509 234 1,052 - 2,985
Product development (1,502)
amortised
General business costs (850)
Material one-off items (see note 8) (714)
Loss before taxation (81)
Segment assets 26,542 3,766 1,393 1,009 2,359 2,777 37,846
Segment liabilities (8,772) (3,065) (1,363) (1,259) (2,070) - (16,529)
6 months ended
Consol
31 December 2006 UK USA Germany France Other adjustment Total
�000 �000 �000 �000 �000 �000 �000
Segment revenue 4,566 4,079 1,954 1,797 2,537 - 14,933
Segment result (356) 2,252 578 951 1,215 - 4,640
Product development (1,535)
amortised
General business costs (1,235)
Material one-off items (see note 8) (534)
Profit before taxation 1,336
Segment assets 25,965 3,820 1,457 2,011 2,597 2,830 38,680
Segment liabilities (9,997) (3,026) (1,285) (1,142) (2,066) (54) (17,570)
Consol
Year ended 30 June 2007 UK USA Germany France Other adjustment Total
�000 �000 �000 �000 �000 �000 �000
Segment revenue 10,028 8,183 3,981 3,139 4,949 - 30,280
Segment result (648) 4,512 1,508 1,373 2,559 - 9,304
Product development (3,060)
amortised
General business costs (2,088)
Material one-off items (1,114)
Profit before taxation 3,042
Segment assets 27,986 3,688 1,635 1,360 2,805 2,777 40,251
Segment liabilities (9,365) (2,894) (1,862) (1,323) (2,614) - (18,058)
Segmental analysis by division
6 months ended 6 months ended Year ended
31 December 2007 31 December 2006 30 June 2007
DMS SMS Total DMS SMS Total DMS SMS Total
�000 �000 �000 �000 �000 �000 �000 �000 �000
Revenue
License rentals 444 1,099 1,543 493 1,251 1,744 949 2,398 3,347
Maintenance 3,423 3,909 7,332 3,272 3,712 6,984 6,614 7,564 14,178
Recurring revenue 3,867 5,008 8,875 3,765 4,963 8,728 7,563 9,962 17,525
License sales 1,097 2,490 3,587 1,366 3,244 4,610 3,518 5,923 9,441
Agents' royalties 156 484 640 168 522 690 278 1,126 1,404
Professional services and 913 78 991 726 179 905 1,637 273 1,910
other revenue
New business revenue 2,166 3,052 5,218 2,260 3,945 6,205 5,433 7,322 12,755
Gross revenue 6,033 8,060 14,093 6,025 8,908 14,933 12,996 17,284 30,280
Direct third party costs (527) (313) (840) (260) (458) (718) (529) (870) (1,399)
Gross margin 5,506 7,747 13,253 5,765 8,450 14,215 12,467 16,414 28,881
Sales related commissions (102) (168) (270) (140) (259) (399) (350) (469) (819)
Net revenue 5,404 7,579 12,983 5,625 8,191 13,816 12,117 15,945 28,062
Other direct operating (3,440) (2,751) (6,191) (3,325) (2,584) (5,909) (6,784) (5,196) (11,980)
expenses excluding
amortisation and material
one-off items
Gross contribution 1,964 4,828 6,792 2,300 5,607 7,907 5,333 10,749 16,082
Indirect operating expenses (3,893) (3,346) (6,914)
excluding
amortisation and material
one-off items
Net contribution 2,899 4,561 9,168
General business costs (850) (1,235) (2,088)
Net interest receivable 86 79 136
Profit before taxation, 2,135 3,405 7,216
amortisation
and material one-off
items
Amortisation (1,502) (1,535) (3,060)
Profit before taxation and 633 1,870 4,156
material one-off items
Material one-off items (see (714) (534) (1,114)
note 8)
(Loss)/profit before (81) 1,336 3,042
taxation
Due to the Group's corporate and internal reporting structure, segment assets
and liabilities for divisional segments cannot be reported.
7 Operating expenses
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
�000 �000 �000
Staff costs
Sales, marketing and professional services
Sales related commissions 270 399 819
Fixed staff costs 2,708 2,678 5,456
Total sales, marketing and professional services 2,978 3,077 6,275
Development 675 475 876
Support 1,223 1,161 2,400
General and administration 2,499 2,928 5,629
Total staff costs 7,375 7,641 15,180
Depreciation of tangible assets 426 460 896
Direct third party costs 840 718 1,399
Other operating charges 3,423 2,870 5,834
Operating expenses before amortisation and material 12,064 11,689 23,309
one-off items
Amortisation of intangible assets 1,502 1,535 3,060
Material one-off items 714 534 1,114
Total operating expenses 14,280 13,758 27,483
8 Material one-off items
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
�000 �000 �000
Redundancy costs (including legal and professional 247 140 657
fees)
Compensation for loss of office for former director and 339 317 317
replacement costs (including legal and professional
fees)
Restructuring and strategy costs 128 77 140
714 534 1,114
Unusual items that are material in size and infrequent in nature are presented
as material one-off items in the Income Statement. The directors are of the
opinion that the separate recording of material one-off items provides helpful
information about the Group's underlying business performance.
9 Share-based payments
A description of each type of share-based payment can be obtained from the 2007
Annual Report.
All share incentives are over ordinary shares of the Company. The Group grants
share incentives to employees in the form of share options and share bonuses.
The fair value of all share options granted since 7 November 2002 and not vested
at 31 December 2007 is recognised as a staff cost with a corresponding increase
in equity. The employee expense is recognised equally over the time from grant
until vesting of the incentive. The employee expense in the period to 31
December 2007 was a charge of �7,000 (31 December 2006 �14,000 credit; 30 June
2007 �11,000 charge). The fair values have been measured using the binomial
model. The expected volatility is based on the historic volatility adjusted for
any expected changes to future volatility.
The share bonuses relate to the Executive Deferred Share Incentive Plan (EDSIP).
The fair value of the EDSIP is calculated based on the shares awarded at the
grant price and recognised as a staff cost with a corresponding increase in
equity over the period from the grant date to the date the shares are fully
realised.
10 Taxation
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
�000 �000 �000
United Kingdom corporation tax at 29.5% (2006 30%)
Current taxation (credit)/charge on income for the (298) 3 (552)
period
Over provision in respect of prior years (11) - (55)
(309) 3 (607)
Overseas taxation
Current taxation charge on income for the period 36 53 229
Under provision in respect of prior years - - 34
36 53 263
Total current taxation (credit)/charge (273) 56 (344)
Deferred taxation
Current year - United Kingdom 186 253 821
- Overseas - - 46
186 253 867
Under provision in respect of prior years - - (79)
Total deferred taxation 186 253 788
Taxation (credit)/charge on profit on ordinary (87) 309 444
activities
11 Dividends
6 months 6 months Year
ended ended ended
Per share 31 December 31 December 30 June
2008 2007 2007 2006 2007
pence pence �000 �000 �000
Ordinary shares of 5 pence each
Final 2006 - 5.0 - 1,110 1,110
Interim 2007 - 2.5 - - 555
Final 2007 5.25 - 1,167 - -
Interim 2008 2.50 - - - -
7.75 7.5 1,167 1,110 1,665
An interim dividend of 2.5 pence per share (2006 2.5 pence per share) will be
paid on 15 May 2008 to shareholders on the register on 25 March 2008. Under
adopted IFRS these financial statements do not reflect this dividend payable.
12 Earnings per share
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
�000 �000 �000
Profit attributable to ordinary shareholders 6 1,027 2,598
Amortisation of intangible assets adjusted for 1,078 1,074 2,426
taxation
Capitalised development costs adjusted for (951) (953) (2,236)
taxation
EDSIP and share options adjusted for taxation 203 475 492
Material one-off items adjusted for taxation 507 371 823
Underlying Trading Profit attributable to 843 1,994 4,103
ordinary shareholders
Number Number Number
Weighted average number of shares (net of own 22,241,630 22,158,491 22,166,247
shares)
Effect of dilutive share options 297,780 1,148,534 506,772
Adjusted diluted weighted average 22,539,410 23,307,025 22,673,019
Earnings per share
Basic 0.0p 4.6p 11.7p
Diluted 0.0p 4.4p 11.5p
Basic - Underlying Trading Profit 3.8p 9.0p 18.5p
Diluted - Underlying Trading Profit 3.7p 8.6p 18.1p
13 Intangible assets
Goodwill Product
on purchase of development
subsidiary Purchased �000
undertakings software Total
�000 �000 �000
Cost
At 1 July 2006 24,891 6,159 13,205 44,255
Foreign exchange adjustment (295) - - (295)
Additions - 739 1,361 2,100
At 31 December 2006 24,596 6,898 14,566 46,060
At 1 January 2007 24,596 6,898 14,566 46,060
Foreign exchange adjustment (122) - - (122)
Additions - 354 1,378 1,732
At 30 June 2007 24,474 7,252 15,944 47,670
At 1 July 2007 24,474 7,252 15,944 47,670
Foreign exchange adjustment 46 - - 46
Additions - 121 1,321 1,442
At 31 December 2007 24,520 7,373 17,265 49,158
Accumulated amortisation
At 1 July 2006 13,212 3,853 9,650 26,715
Foreign exchange adjustment (205) - - (205)
Charge for the year - 315 1,220 1,535
At 31 December 2006 13,007 4,168 10,870 28,045
At 1 January 2007 13,007 4,168 10,870 28,045
Foreign exchange adjustment (84) - - (84)
Charge for the year - 302 1,223 1,525
Transfer 36 (36) - -
At 30 June 2007 12,959 4,434 12,093 29,486
At 1 July 2007 12,959 4,434 12,093 29,486
Foreign exchange adjustment 32 - - 32
Charge for the year - 249 1,253 1,502
At 31 December 2007 12,991 4,683 13,346 31,020
Net book value
At 31 December 2007 11,529 2,690 3,919 18,138
At 31 December 2006 11,589 2,730 3,696 18,015
At 30 June 2007 11,515 2,818 3,851 18,184
14 Analysis of trade and other receivables
At At At
31 December 31 December 30 June
2007 2006 2007
�000 �000 �000
Non-current assets
Non-trade receivables 153 51 108
153 51 108
Current assets
Trade receivables 5,228 7,089 5,290
Prepayments 907 755 957
Other receivables 122 93 47
6,257 7,937 6,294
Total receivables 6,410 7,988 6,402
Trade and other receivables analysis
Instalment sale receivables
Falling due within one year - 9 -
- 9 -
Normal trade receivables
Falling due within one year 5,228 7,080 5,290
Days sales outstanding 30 days 29 days 33 days
Total trade receivables 5,228 7,089 5,290
Total other receivables 1,182 899 1,112
Total receivables 6,410 7,988 6,402
15 Analysis of trade and other payables
At At At
31 December 31 December 30 June
2007 2006 2007
�000 �000 �000
Non-current liabilities
Staff severance pay 240 242 207
Other payables 7 11 10
247 253 217
Current liabilities
Accruals 2,261 2,790 3,238
Other taxation and social security 1,332 1,598 1,236
Deferred consideration - 330 -
Trade and other payables 1,275 1,107 1,182
4,868 5,825 5,656
Total trade and other payables 5,115 6,078 5,873
16 Deferred income
At At At
31 December 31 December 30 June
2007 2006 2007
�000 �000 �000
Amounts falling due within one year 8,173 8,174 8,913
Amounts falling due after more than one year 1,201 1,130 1,104
9,374 9,304 10,017
17 Foreign exchange rates
At At At
31 December 31 December 30 June
2007 2006 2007
The following exchange rates have been used for
translation of period end balances into Sterling:
US dollars 1.99 1.96 2.01
Euro 1.36 1.48 1.49
Swiss francs 2.25 2.39 2.46
The following exchange rates have been used for
translation of period Income Statement into
Sterling:
US dollars 2.04 1.91 1.95
Euro 1.43 1.48 1.48
Swiss francs 2.38 2.36 2.39
18 Financial calendar
Interim dividend 2008 - ex-dividend date 19 March 2008
- record date 25 March 2008
- scrip date 25 April 2008
- payment date 15 May 2008
Financial year end 30 June 2008
19 Reconciling information
Internally, management focuses on increasing market-share and improving
operating efficiencies through tight cost control. An important measure is
profit before taxation, amortisation and material one-off items, if applicable
(PBTae). The directors believe that recording costs under IFRS and UK GAAP's
FRS20 Share-based Payment, can obscure the underlying trading of the business,
especially development costs and hence are only used for statutory reporting
purposes.
The following table reconciles the Group's Underlying Trading Profit reported on
the basis that is used internally for evaluating performance with the results
under UK GAAP and IFRS:
6 months 6 months Year
ended ended ended
31 December 31 December 30 June
2007 2006 2007
Underlying Trading Profit (UTP) �000 �000 �000
PBTae for the period per management accounts 375 2,028 5,287
FRS20 adjustment in respect of share-based payments 318 (126) (854)
Other - - (1)
PBTae for the period reported under UK GAAP 693 1,902 4,432
Holiday pay - expensed to Income Statement 121 142 45
IFRS2 share-based payments 288 679 745
IFRS movement 409 821 790
Management accounts total movement 727 695 (65)
UTP for the period reported under IFRS 1,102 2,723 5,222
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR BRGDDSSDGGIR
Macro 4 (LSE:MAO)
Gráfica de Acción Histórica
De May 2024 a Jun 2024
Macro 4 (LSE:MAO)
Gráfica de Acción Histórica
De Jun 2023 a Jun 2024
