Final Results

DAT Group PLC 04 April 2005 Strictly embargoed until: 0702h, 4 April 2005 DAT Group plc ('DAT or 'the Company'),a leading developer and licenser of mobile device management software announces maiden results following admission to AIM Preliminary Results for the Year to 31 December 2004 Summary •Development of Tabella with Dangaard Telecom to provide the latest in mobile e-mail •Purchase of Synchronica Software GmbH enhancing the reach and capabilities of DMP and accelerating Tabella •Successful Placing and Admission to AIM raising £6 million •Completion of strategic transition from IT consulting to software development, supply and licensing •Continued development of the DAT Mobility Platform ('DMP') •Substantial growth of the Enterprise Solutions business as interest from System Integrators and Value Add Resellers expands Commenting on the results announcement David Hayes, Chief Executive of DAT Group said: 'DAT Group has made a good start to life as a publicly traded company. We have begun to exploit for shareholders the drivers for growth set out in the AIM Admission document - the software development skills that resulted in the DAT Mobility Platform (DMP), our intimate knowledge of the mobile device industry and the expansion in the addressable market for our products.' He further added, 'Our priorities for the next twelve months are to grow our existing business while increasing the resources, human and financial, behind Tabella. We have many opportunities to pursue arising from the heightened profile of DAT Group and the increasing international reputation of our products. We believe that we are in good shape for the future - an enhanced product offering, a growing and dedicated workforce and a strong and entrepreneurial management team.' For further information please visit www.datgroup.com or contact: David Hayes, CEO Simon Hudson/Clemmie Carr DAT Group plc Tavistock Communications Tel: +44 1580 831 406 Tel: +44 20 7920 3150 DAT Group PLC Preliminary Results for the Year to 31 December 2004 Chairman's Statement Introduction During 2004 the Company completed the transition that has been in progress over the last few years, from an IT consulting business to a developer and licenser of software products targeted at the very fast growing mobile device sector. This successful change in focus was planned and executed using the contacts and expertise gained from the former IT consulting activities. The development of the key components of the new product offering has meant, during this transition period, deliberately foregoing short term revenues, profitability and cash flow. In order to demonstrate the suitability and applicability of the proprietary DAT Mobility Platform (DMP) software product range, the acquisition of key sales contracts with major players was vital. Significant progress was made during the year in winning contracts and implementing products for a number of major customers, particularly in the USA. These contract wins are in an industry that generally has significant lead times for scoping and agreeing new projects. In December 2004 the Company raised £6 million from a placing of new shares upon admission to trading on AIM. The time and commitment required from the senior management team to achieve the placing and AIM admission at the end of 2004 and the development of the Tabella project has resulted in a slower than planned start to 2005. However, substantial progress has been made since, including now the development of the Tabella product offering, recently announced as a joint venture with Dangaard Telecom. In addition, DAT Group announced today the acquisition of Synchronica Software GmbH ('Synchronica'). The technology that the Company has acquired through this acquisition will significantly accelerate the development and reach of the Tabella offering and broaden the DMP technology platform. In its simplest version, Tabella (using the recently acquired SyncML technology) will be aimed at the millions of users of mid range devices who have no way of backing up their contacts. It will also help DAT to address an even larger market for active data synchronisation and device management for large mobile phone operators. Results Turnover for the year to 31 December 2004 was £2.4 million (2003: £3.0 million for the nine months to 31 December). The investment required to develop, market and support the new DMP products resulted in an increased loss for the year of £2.0 million (2003: loss of £1.1 million for the nine months to 31 December). Loss per share was 14.7p (2003: loss of 8.8p for the nine months to 31 December). Cash balances at 31 December 2004 were £5.5 million. Given the current stage of the Company's development and its ongoing investment requirements, the Directors are not recommending a dividend in respect of the year under review. Business progress In February 2005, in a milestone agreement for DAT Group, the Company announced, subject to contract, a new joint-venture with Dangaard Telecom, Europe's largest distributor in the telecommunications industry, to develop, market and sell a new mobile e-mail solution - Tabella. Tabella is specifically designed to meet the growing market demand for managed mobile messaging, initially using the Windows Mobile operating system. DAT set out its plans for growth in the prospectus accompanying the placing and admission to AIM in December 2004. Foremost among these plans was the continued development of DMP so that it can manage, and be compatible with, as many devices and management standards as possible. To this end, the Company announced today the acquisition of Berlin based Synchronica, a privately held software business that has developed and owns proprietary software for the synchronization and management of devices using an industry standard called SyncML. At the same time DAT has bought out certain third party rights to Synchronica's software products. Management In order for DAT to realise its full potential, the Directors believe that the Company must recruit new technical people and new business managers, in the United States in particular. Jesse Grindeland, President of the Americas for DAT Group is making good progress in turning plans for that region into commercial reality. Outlook Notwithstanding the slower than planned start to the year the pace of activity has stepped up considerably. DAT Group has developed a coherent product strategy and has seen the commercial endorsement of its technology through the Tabella agreement with Dangaard Telecom. The Company has enhanced its operational capability through the acquisition of Synchronica and this acquisition will accelerate the market penetration of Tabella following its launch. This will be DAT's first product that has mass market appeal to end-users and is potentially very significant for the Group. The above developments have put the Group in a position to pursue its aim of becoming an industry leading provider of software for mobile device management. Finally, the Directors wish to thank the many pre-IPO shareholders for their loyal support over the last six years, in particular during the early part of 2004 when they provided further capital (approximately £3 million) to fund the Company whilst certain key contracts were being negotiated. John Gunn Chairman Chief Executive's Review DAT Group has made a good start to life as a publicly traded company. We have begun to exploit for shareholders the drivers for growth set out in the AIM Admission document - the software development skills that resulted in the DAT Mobility Platform (DMP), our intimate knowledge of the mobile device industry and the expansion in the addressable market for our products. In addition, we have identified a new revenue stream from the establishment of a new e-mail solution joint venture - Tabella, with Dangaard Telecom, that has the potential to increase DAT Group's future revenues and profits substantially. The proposed integration of our recent acquisition, Synchronica, will help us broaden DMP's compatibility across the existing customer range (and bring new ones) and it will significantly enlarge the addressable device market for Tabella. Incorporation of this technology into the Tabella offering means a wide range of non-Windows based converged devices will now also be able to take advantage of the product. Without this particular acquisition we had planned to be in the same position sometime toward the end of 2005 or early 2006. DMP Significant progress has been made in the development of DAT Group's core technology to enhance its compatibility with emerging technologies including 3G devices. Our strategic positioning of DMP as the overall core architecture of our products enables the easy integration of current and future technology acquisitions which broaden both reach and depth. We believe that DMP will soon be in a position to meet substantially all the requirements of any global operator by offering support for proprietary device management as well as standards based device management. This will allow DAT to respond with confidence to the increasing number of device management requests for tenders that are being released by mobile operators and enterprises. With the Synchronica acquisition DMP has seen the important addition of support for OMA DM (Open Mobile Alliance, an industry association), device management and device synchronisation standards. In addition, DMP will also be able to accommodate the OMA FOTA (Firmware Over the Air) standard that will enable over-the-air upgrades of device firmware. DMP will continue to be the foundation on which all our solutions are designed and built, giving our customers a consistent long term product roadmap. Enterprise solutions DAT's Enterprise business is growing. Demand from companies, professional service suppliers and organisations for the configuration and management services we can provide is building. As the device management market is gaining pace, new market opportunities are appearing. One that is particularly exciting involves leveraging off existing relationships that System Integrators and Value Add Resellers (VARs) have with enterprises. System Integraters are interested in acquiring DAT software to install as their own delivery platforms to provide device management for their customers as a service. In addition the VAR community are motivated to include DAT software as a core component in solution sales to their business customers. Through flexible arrangements with channel partners, DAT is moving towards being able to address business communities with a wide range of numbers of devices within their businesses. The interest from System Integrators and VARs extends to both the USA and UK markets and a number of key pilot studies are currently being planned. ROM Builder The suite of products within DMP known as ROM Builder is a source of increasing sales to device manufacturers and distributors. Negotiations are in progress to license a major mobile device distributor to start using ROM Builder for the configuration of a range of their distributed devices. Tabella Tabella was a milestone agreement for us. Three versions of Tabella are in developments that have been carefully designed to match the requirements of the consumer, prosumer and small to medium sized businesses. Tabella makes it easy for users to get the best out of their phones. In its simplest version Tabella is aimed at the millions of users of mid range devices who have no way of backing up their contacts. This version uses our recently acquired SyncML technology to synchronise over-the-air contacts and calendars items to our servers. In addition it effortlessly sets up the user's phone to receive email as well. This will be DAT's first product that has mass market appeal to end-users and is potentially very significant for the Group. Tabella Mobile Personal Edition and Business Editions incorporate comprehensive personal information management features and includes leading edge device control that is essential for business phones. This means that as well as having email, calendar and contact information, there will also be facilities to manage individual or groups of devices from a Tabella web portal. This portal will allow easy setup of email accounts, and incorporate premium rate features such as to uploading backgrounds or ring tones and has inherent security features such as the ability to send a signal to lost phones that locks them, preventing unauthorised use. The Tabella service combines our device management software with Dangaard Telecom's highly efficient logistics and distribution capabilities. Dangaard has a well established supply chain originating from its close relationships with device manufacturers through to retailers, thus providing Tabella with multiple channels to market. Synchronica Synchronica's SyncML device synchronisation products mean that Tabella will shortly be able to support all OMA compatible devices as well as those using Windows Mobile. Based in Berlin, Synchronica's products are already in the market today. Combined with DAT's existing DMP products, we will be able to supply the configuration and management systems that manufacturers, distributors and operators need today. The Synchronica acquisition also brings an OMA compliant FOTA server capable of performing hardware updates to devices already deployed in the field with subscribers, allowing those devices to be updated with essential fixes without being returned to a service centre. The acquisition of Synchronica is of great significance to DAT and the mobile device synchronisation and management community. DAT now has an exceptionally broad and comprehensive reach into device manufacturers, mobile operators and consumers for push email, device synchronisation, device management, and device firmware updates, which exceeds our current competitors' offerings. People The Company now has representation on both the East and West coasts of America in addition to its head office in East Sussex and Synchronica's base in Berlin. The exciting potential being created for DAT Group is a result of the hard work and enthusiasm of everyone in the Company. All staff can be proud of their contributions and on behalf of the Board I thank all of them for their efforts. Prospects Our priorities for the next twelve months are to grow our existing business while increasing the resources, human and financial, behind Tabella. We have many opportunities to pursue arising from the heightened profile of DAT Group and the increasing international reputation of our products. We have a business model - product based license revenues, sales and royalties - that we believe will deliver value to shareholders over the medium term. We plan to add further upside to the Company through the periodic acquisition of small, cutting edge businesses in complementary markets, which have been carefully identified. We believe that we are in good shape for the future - an enhanced product offering, a growing and dedicated workforce and a strong and entrepreneurial management team. David Hayes Chief Executive DAT Group plc Summarised Consolidated Profit and Loss Account for the year ended 31 December 2004 Note Year Nine months ended ended 31 Dec 2004 31 Dec 2003 £ '000 £ '000 Group turnover 2,424 2,962 ----------------------- Total operating loss (2,271) (1,067) Net interest payable (105) (78) ----------------------- Loss on ordinary activities before taxation (2,376) (1,145) Tax on loss on ordinary activities 1 406 - ----------------------- Loss for the year (1,970) (1,145) ======================= Basic and diluted loss per ordinary share 2 (14.7)p (8.8)p ======================= Dividends per share - - ======================= Summarised Consolidated Balance Sheet at 31 December 2004 2004 2003 £ '000 £ '000 Fixed assets Tangible assets 108 80 ---------------------- Current assets Stocks and work in progress 29 56 Debtors 663 916 Cash at bank and in hand 5,512 42 ---------------------- 6,204 1,014 Creditors: Amounts falling due within one year (1,203) (2,044) ---------------------- Net current assets/(liabilities) 5,001 (1,030) ---------------------- Total assets less current liabilities 5,109 (950) Creditors: Amounts falling due after more than one year (16) (82) ---------------------- 5,093 (1,032) ====================== Capital and reserves 5,093 (1,032) ====================== Summarised Consolidated Cash Flow Statement for the year ended 31 December 2004 Year Nine months ended ended 31 Dec 2004 31 Dec 2003 £ '000 £ '000 Net cash outflow from operating activities (1,726) (708) ---------------------- Returns on investments and servicing of finance (119) (78) UK corporation tax received 410 - Capital expenditure and financial investment (41) (7) ---------------------- Cash flow before financing (1,476) (793) Financing 6,970 1,195 ---------------------- Increase in cash 5,494 402 ====================== DAT Group plc Notes to the Preliminary Statement 1. Taxation 12 Months 9 Months to 31st to 31st Dec '04 Dec '03 £'000 £'000 Current taxation Overseas Corporation tax (4) - Research and development tax credit 410 - ----------------------- Current taxation 406 - ======================= 2. Loss per share The loss per ordinary share has been calculated based on the weighted average number of ordinary shares in issue during the year. 12 Months 9 Months to 31st to 31st Dec '04 Dec '03 Loss for the financial period £(1,970,000) £(1,145,000) ============================= Weighted average number of ordinary shares 13,375,672 12,997,562 ============================= Basic and diluted loss per ordinary share (14.7)p (8.8)p ============================= 3. Preliminary statement This preliminary statement was approved by the Board on 1 April 2005. It is not the company's statutory accounts. The statutory accounts for the year ended 31 December 2004 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. This information is provided by RNS The company news service from the London Stock Exchange

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