Interim Results

Mondas PLC 12 December 2001 MONDAS PLC INTERIM RESULTS FOR THE SIX MONTHS TO 31 OCTOBER 2001 Mondas PLC, the financial sector and accounting solutions specialist, today announces interim results for the half year ended 31 October 2001 HIGHLIGHTS * Revenues grew by 96% to £1.7 million (2000: £881,263) as trading volumes rose in both our divisions * Strong pipeline of business for Radica Corporate Action Processing System with significant new contract wins from blue chip customers * Education sector remains buoyant with 18 new orders in the first half and 100 clients in total * Earnings before interest, taxation, depreciation and amortisation (£320,743) (2000: (£136,998)) * Loss before taxation of £1.1 million after £758,000 of non-cash items; loss per share 5.9p (2000: 3.4p) * Post half year end, operational review has resulted in £150,000 charge, but £220,000 of annualised savings * Strategic alliances with Consort and Telekurs have extended the opportunity to sell financial products in UK and international markets. Tim Simon, Executive Chairman of Mondas commented: 'Mondas solutions for the financial sector are gaining credibility and, despite a lengthened sales cycle, we continue to close deals. Resource has a strong position in the education sector, and we believe this will continue to be a buoyant market for Mondas.' 12 December 2001 ENQUIRIES: Mondas PLC Tim Simon, Chairman Tel: 01932 334600 College Hill Associates Matthew Smallwood Tel: 020 7457 2020 Camilla Glen INTERIM RESULTS FOR THE SIX MONTHS TO 31 OCTOBER 2001 Chairman's Statement Introduction The first half of our fiscal year 2001-2 has been a period of development and progress. Mondas PLC is continuing to target the financial sector where we believe that our skills, experience and technology are particularly appropriate and timely. The education sector has proved to be a buoyant market, where our Resource 32000 accounting and management information software ('Resource') continues its success with nearly 100 education establishments as clients. In the finance sector Mondas has sold two new products, Radica Corporate Actions Processing System ('CAPS') and Radica Reconciliations and Exception Control System ('RECS') and gained three new clients, Close Wealth Management Limited ('Close'), Lloyds TSB Stockbrokers Limited ('Lloyds TSB') and Man Securities Limited ('Man'). Results During the period under review our turnover increased by 96% to £1,729,088 (2000: £881,263) and trading volumes rose across both segments of the business compared to the same period in 2000. The Group recorded a loss before interest, depreciation and amortisation of £320,743 (2000: Loss £136,998). Group Operating Loss for the period was £997,541 (2000: Loss £456,524) which was struck after charging goodwill amortisation of £665,701 (2000: £309,329). The loss before tax is a result of our continued investment in research and development, sales, marketing and in the expansion of our professional services practice. Deferred income was £525,644 (2000: £678,816) arising primarily from support and services revenues received in advance. All revenues were recognised in compliance with the US GAAP standard SOP 97-2. The benefit of approximately £190,000 of orders received from Man and Close will commence in the second half of the financial year. Costs were lower than expected due to strict controls. We have conducted a review of operations to streamline and reorganise the Group which has resulted in a once-off restructuring charge of £150,000, which will be reflected in the current period, relating to a small number of redundancies and a closure of facilities. This will give rise to £220,000 of annualised savings. Finance Sector Our decision to enter the institutional market has resulted in a strong pipeline of business at both a national and international level. Following its successful implementation of CAPS, Man has since become the first City organisation to purchase our RECS solution. These two products address key areas of risk mitigation within the financial sector. A Web based version of CAPS is being added to the portfolio of CAPS modules, along with dividend processing and the ability to handle international corporate events. In November 2001 we secured a contract with Lloyds TSB for consultancy services and we became a founding member of the ISITC (International Securities Association for Institutional Trade Communication) Corporate Actions Working Group. Our relationship with Brewin Dolphin Holdings PLC continues to develop with the deployment of a Portfolio Performance Measurement module to be added to their existing Mondas Client and Portfolio Management system. Resource 32000 The education sector continues to be very active with 18 new sites added in the first half of this year taking the total to 100 educational establishments. A notable win comes outside of the education sector, from RSA Films, one of the world's leading film and commercial production companies. Within both the public sector and commercial markets our Web and workflow technologies offer the opportunity for follow-up sales to our existing customers as well as making our proposition more attractive to new customers. Strategic Alliances The marketing agreement, mentioned in my last statement, with Consort Securities Systems Limited positioning CAPS as the 'best of breed' option for the Consort user base, has added to the pipeline of business for this product. A new strategic alliance has been signed with Telekurs (UK) Limited, a major provider of corporate actions and other securities information from exchanges around the world. We are actively pursuing new strategic alliances to enable connectivity with banking and securities messaging systems, such as SWIFT and CREST, and enterprise integration with other mission critical applications. Such alliances will equip us to compete in the global institutional and fund management marketplace. Management & Staff Jarlath McGee was appointed as Chief Operating Officer of Mondas Information Technology Limited, our trading company, in September 2001. This appointment will allow me to focus on strategic and corporate issues, while Jarlath assumes full responsibility for the operations of the Company. The Directors believe that the key to success is a highly motivated team and therefore all Mondas staff are shareholders or option holders. Litigation On 2 March 2001 we commenced legal proceedings against Mondus Limited for trademark infringement and passing off as we continue to defend our trademark. In my last statement we announced that we had reached an agreement in principle with Ephorma AS, which has enabled us to recognise the £126,000 of previously deferred licence revenue in the period. Dividend The Directors are not recommending the payment of a dividend in respect of the period under review (2000 - nil). Future Prospects The power of Mondas solutions lies in its unique Radica TCMS technology. We continue to enhance this platform, which combines our workflow, Internet and accounting technologies to give our products competitive edge. In addition to our existing securities and investment sector products, we are developing new solutions, based upon Radica TCMS, to replace the legacy systems prevalent across this market. This opportunity is significant in our plans for the future. Our existing and new alliances will give us access to the global institutional market and we will continue to seek acquisition opportunities of complementary technology and customers. Based upon our strong pipeline and revised cost base, the Directors believe that our cash resources are sufficient. We believe that our solutions for the financial sector are gaining credibility and, despite a lengthened sales cycle, we continue to close deals. Resource has a strong position in the education sector, and we believe this will continue to be a buoyant market for Mondas. Mondas is positioned for growth. D.T.A. Simon Chairman INDEPENDENT REVIEW REPORT TO MONDAS PLC Introduction We have been instructed by the company to review the financial information set out on pages 6 to 10. We have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the directors. As a company quoted on the Alternative Investment Market, Mondas PLC has voluntarily elected to follow the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999 /4 issued by the Auditing Practices Board for use in the United Kingdom. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and, based thereon, assessing whether the accounting policies and presentation have been consistently applied, unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit performed in accordance with United Kingdom Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 October 2001. RSM Robson Rhodes Chartered Accountants London, England 11 December 2001 CONSOLIDATED PROFIT AND LOSS ACCOUNT for the six months ending 31 October 2001 Six months Six months Year ended 31 ended 31 ended 30 October 2001 October 2000 April 2001 (Unaudited) (Unaudited) (Audited) £ £ £ Turnover 1,729,088 881,263 2,702,141 Cost of sales (165,989) (363,467) (436,948) Gross profit 1,563,099 517,796 2,265,193 Distribution and (2,560,640) (974,320) (3,667,961) administrative expenses Analysis of group operating losses Operating (loss) before (320,743) (136,998) (381,054) goodwill amortisation and depreciation ('EBITDA') Amortisation of goodwill (665,701) (309,329) (975,172) Depreciation of (11,097) (10,197) (46,542) tangible fixed assets Group operating loss (997,541) (456,524) (1,402,768) Net interest (95,043) (9,902) (101,274) (payable)/receivable Revaluation of (91,795) - - investments Loss before taxation (1,184,379) (466,426) (1,504,042) Taxation - - - Loss for the period (1,184,379) (466,426) (1,504,042) Basic and diluted loss (5.9)p (3.4)p (9.5)p per share There are no recognised gains or losses for the above periods other than those stated above. BALANCE SHEET As at 31 October 2001 As at As at As at 31 October 2001 31 October 30 April 2000 2001 (Unaudited) (Unaudited) (Audited) £ £ £ Fixed assets Intangible assets 4,393,292 5,954,325 5,058,993 Tangible assets 49,278 109,335 61,420 4,442,570 6,063,660 5,120,413 Current assets Stocks - 5,762 417 Debtors 575,506 498,498 684,755 Investments 120,481 - 212,277 Cash at bank and in hand 1,256,262 2,503,609 1,951,087 1,952,249 3,007,869 2,848,536 Creditors: Amounts falling (1,219,809) (1,728,772) due within one year (1,623,410) Net current assets 732,440 1,279,097 1,225,126 Total assets less current 5,175,010 7,342,757 6,345,539 liabilities Creditors: Amounts falling (2,896,017) (2,862,662) (2,883,201) due after more than one year Net assets 2,278,993 4,480,095 3,462,338 Capital and reserves Called up share capital 2,009,501 2,001,344 2,006,056 Share premium account 5,241,078 5,228,342 5,243,489 Profit and loss account (4,971,586) (2,749,591) (3,787,207) Equity shareholders' funds 2,278,993 4,480,095 3,462,338 The interim accounts were approved by the Board of Directors on 11th December 2001 and signed on its behalf by: D T A Simon Chairman CONSOLIDATED CASH FLOW STATEMENT for the six months ended 31 October 2001 Six months Six months Year ended ended ended 30 April 31 October 31 October 2001 2001 2000 (Unaudited) (Unaudited) (Audited) £ £ £ Reconciliation of operating loss to net cash outflow Operating loss (997,541) (456,524) (1,402,768) Amortisation of goodwill 665,701 309,329 975,172 Depreciation of tangible fixed 13,522 10,197 46,542 assets Profit on sale of fixed assets (2,425) - - Write down of own shares - - 17,212 (Increase)/decrease in stocks 417 (1,550) 3,795 (Increase)/ decrease in debtors 109,249 (73,117) (255,074) (Decrease)/increase in creditors (403,601) (308,738) (301,121) Net cash outflow from operating (614,678) (520,403) (916,242) activities Cash flow statement Net cash outflow from operating (614,678) (520,403) (916,242) activities Returns on investments and (82,227) (132,117) (127,149) servicing of finance Taxation paid - - (138,679) Capital expenditure and financial 1,046 (9,034) 16,971 investment Acquisitions and disposals - (2,526,933) (2,745,490) Cash outflow before financing and (695,859) (3,188,487) (3,910,589) liquid resources Management of liquid resources 5,813 (2,125,000) (965,753) Financing - issue of shares (net 1,034 2,736,741 2,906,321 of costs) - issue of convertible - 3,000,000 3,000,000 unsecured loan stock Increase/(decrease) in cash (689,012) 423,254 1,029,979 NOTES TO THE INTERIM FINANCIAL INFORMATION 31 OCTOBER 2001 1. INTERIM REPORT This interim report was approved by the Board on 11 December 2001. It has been prepared using accounting policies that are consistent with those adopted in the statutory accounts for the year ended 30 April 2001. The figures for the year to 30 April 2001 were derived from the statutory accounts for that year. The statutory accounts for the year ended 30 April 2001 have been delivered to the Registrar of Companies and received an audit report which was unqualified and did not contain statements under s237(2) or (3) of the Companies Act 1985. 2. DIVIDENDS The directors are not declaring a dividend for the six months ended 31 October 2001. 3. LOSS PER SHARE Basic loss per share is based on the loss attributed to the members of Mondas Plc and on the weighted average number of shares outstanding throughout the six months ended 31 October 2001 of 20,077,785 (2000: 13,057,860). Diluted loss per share is the same as the basic loss per share because the options and convertible unsecured loan stock have no dilutive effect. 4. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Six months Six months Year ended ended ended 31 October 31 October 30 April 2001 2000 2001 £ £ £ Change in cash (689,012) 423,254 1,029,979 Cash inflow from increase in debt - (3,000,000) (3,000,000)) Cash outflow from increase in (5,813) 2,125,000 965,753 liquid resources Change in net debt from cash (694,825) (451,746) (1,004,268) flows Opening net (debt)/funds (1,048,913) (229,869) (44,645) Closing net funds (1,743,738) (681,615) (1,048,913) 5. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Six months Six months Year ended ended ended 31 October 31 October 30 April 2001 2000 2001 £ £ £ Total recognised losses relating (1,184,379) (466,426) (1,504,042) to the period Net proceeds of share issue 1,034 3,437,653 3,457,512 Increase/(decrease) in (1,183,345) 2,971,227 1,953,470 shareholders' funds Opening shareholders' funds 3,462,338 1,508,868 1,508,868 Closing shareholders' funds 2,278,993 4,480,095 3,462,338 6. INVESTMENTS As at As at As at 31 October 31 October 30 April 2001 2001 2000 £ £ £ Own shares held 120,481 - 212,277 120,481 - 212,277 Own shares held relates to 573,722 shares recovered from the vendors of Reality Communications Scandinavia AS which are held by the Company's lawyers, Garretts. They are valued at the closing mid market price on 31 October 2001. 7. COPIES OF THE INTERIM REPORT Copies of the interim report are being sent to all shareholders of the Company and are available to the public from the Company's registered office: Rosemount House, Rosemount Avenue, West Byfleet, Surrey KT14 6LB and the offices of John East & Partners Ltd, Crystal Gate, 28-30 Worship Street, London EC2A 2AH.

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