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OneClickHR PLC (OCR)

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Monday 09 May, 2005

OneClickHR PLC

Final Results

OneClickHR PLC
09 May 2005


                                 OneClickHR Plc

            Preliminary results for the year ended 31 December 2004

Chairman's statement

Coming into 2004 we had a number of priorities, which included:

• Successfully launch HR.net, our next generation HR software

• Reorganise the business so that we are capable of selling and implementing 
  enterprise HR solutions

• Reduce UK overheads by removing premises and people costs

• Maintain our client server product, protecting our contracted licence revenue

I am glad to say that we have succeeded in achieving all of these objectives.

In late 2004 we successfully launched HR.net, our new enterprise human resources
solution; the first sales being made before the formal launch of the product in
October. HR.net, with licence revenue ranging from £30,000 to £75,000, is a much
higher sales value than our previous offerings (with average licence values of
£8,000). As well as increasing licence revenues HR.net generates demand for
significantly increased professional services sales. In the past a typical sale
would generate an average of 5 days consulting; with HR.net this increases
significantly to between 20 to 100 consulting days.

The potential for HR.net is demonstrated by the quality of the early adopter
clients, which include Accenture HR Services Ltd, Winterthur Life, Old Mutual,
eBookers and De La Rue plc. Our ability to win more business against our
competitors further confirms the technical advantage that HR.net has given us in
the market. In addition our new technology has opened significant new channel
sales opportunities. In the last months of 2004 we appointed our first HR.net
partners and the first of these delivered business to us in January 2005.

During the past year our contracted support continued to increase and exceeded
£120,000 per month by the final quarter of the year. We expect this to rise
significantly as more HR.net clients come on stream.

As I reported at the half-year sales of our boxed software range, Personnel
Manager, Personnel Director and CaptureIT, slowed in the second quarter of 2004.
This slowdown continued through the second half of the year. We have reorganised
the sales force for these products and have put greater emphasis on selling
through partners thus reducing our sales costs associated with these products.
As a result of this experience in 2004 we have reduced our expectations for this
area of the business in 2005.

In July 2004 we recruited a new team to deliver HR.net consulting in advance of
the launch of the software. This had a negative impact on our gross margin in
the second half year as we trained this new team until they were ready to
deliver billable consulting services to clients. Since the launch of HR.net our
professional services revenue has grown significantly and by the end of the
first quarter of 2005 the team was breaking even month-by-month. We anticipate
that this revenue will continue to grow during 2005 and will contribute profits
to the group this year. At the same time we have strengthened our consultancy
and support teams for our client server products thus securing our support
revenue from these customers. In 2004 we achieved retention of over 90%.

We have continued to invest production capacity as HR.net moves into its
post-launch development phase and we add more functionality to the product.
During the past year we have reduced our development resources on older products
with the priority shifting to providing maintenance upgrades. We continue to
charge all development costs to the profit and loss as incurred; these costs
have increased by £266,000 between 2003 and 2004 to reflect the development
resources committed to HR.net. Our wholly owned development and technical
support centre in India continues to provide us with a high quality service and
a considerable price advantage. As we deploy more HR.net installations we will
be able to capitalise on the lower cost consultancy facility in India with the
creation of an offshore professional services team delivering HR.net consulting
services for customers back in the UK.

During the past year we continue to provide consultancy and training on our own
software products and this revenue has increased from 2003 to 2004 by £192,978.
However through the second half of 2004 we reduced our sales of training on
third party software products, concentrating our efforts of the sales and
support of our own products, in particular HR.net.

We have significantly reduced our overheads in 2004 - down by £500,000 when
compared with 2003, achieved primarily through reduced headcount and premises
costs. This trend in cost reduction has continued into 2005 and since the
beginning of this year our UK work force has been reduced by a further 12% to
73. We now employ more staff in India than the UK. We have consolidated our UK
operations into two locations at Beckenham and Weston Super Mare (at its peak in
2003 we operated from 6 UK premises). We now no longer operate from Stoke,
Salford, Edgware or Sunbury. The combined impact of these changes is a
significantly lower break even point for the business.

In April 2004 we raised £2.4 million, before costs, to ensure that we had
sufficient cash to launch HR.net most effectively. In addition we took the
opportunity to further strengthen our balance sheet by converting the
outstanding loan stock into share capital.

Change of Name
Our main trading company has always been Vizual Business Tools plc, and in the
market for our software and services we are known as Vizual. It is appropriate
that the group name reflects this and we therefore propose to change the group's
name from OneClickHR plc to Vizual Software plc at the forthcoming AGM.

Outlook for 2005
2005 has begun well for the group. We have achieved monthly profitability for
the first quarter of this year. Our priority is to ensure that we capitalise on
the competitive technical advantage that HR.net has given us over other vendors
in our market. We will focus on migrating as many of our existing customers as
quickly as possible whilst stimulating additional business both from our own
sales team and through our channel partners. The impact of these higher value
HR.net sales on a business with reduced costs will continue to have a positive
impact on our profitability. We will continue to look at ways in which we can
reduce costs further. This will include identifying back office functions that
could be delivered more cost effectively from Chennai and the delivery of HR.net
consulting from India. We expect this offshore consulting capability to have a
further positive impact on our gross margin.

We are looking forward to this year with increased optimism.

Lord Sheppard of Didgemere
Chairman



Consolidated profit and loss account
for the year ended 31st December 2004
                                                     Unaudited         Audited
                                                          2004            2003
                                                             £               £
---------------------------------                    -----------     -----------
Turnover                                             4,764,879       4,797,967
Cost of sales                                       (3,127,743)     (2,269,012)
---------------------------------                    -----------     -----------
Gross profit                                         1,637,136       2,528,955
Administrative expenses                             (3,361,104)     (3,871,773)
---------------------------------                    -----------     -----------
Operating loss                                      (1,723,968)     (1,342,818)
Interest receivable                                     40,274           9,170
Interest payable and similar charges                   (61,510)       (189,795)
---------------------------------                    -----------     -----------
Loss on ordinary activities before taxation         (1,745,204)     (1,523,443)
Tax on loss on ordinary activities                     155,820         118,738
---------------------------------                    -----------     -----------
Loss for the financial year                         (1,589,384)     (1,404,705)
---------------------------------                    -----------     -----------

Basic loss and diluted loss per share                     (1.3p)          (2.5p)
---------------------------------                    -----------     -----------



Statement of total recognised gains and losses
for the year ended 31st December 2004
                                                          2004            2003
                                                             £               £
---------------------------------                    -----------     -----------
Loss for the financial year                         (1,589,384)     (1,404,705)
Exchange differences on foreign currency net
investments                                               (820)        (33,718)
---------------------------------                    -----------     -----------
Total losses recognised during the year             (1,590,204)     (1,438,423)
---------------------------------                    -----------     -----------



Consolidated balance sheet as at 31st December 2004
                                                      Unaudited        Audited
                                                           2004           2003
                                                              £              £
---------------------------------                    -----------     -----------
Fixed assets
Intangible assets                                        17,733         77,557
Tangible assets                                         217,477        272,202
---------------------------------                     -----------    -----------
                                                        235,210        349,759
---------------------------------                    -----------     -----------
Current assets
Stocks                                                   74,311         88,346
Debtors                                               1,500,385      1,280,936
Cash at bank and in hand                              1,182,352        546,382
---------------------------------                     -----------    -----------
                                                      2,757,048      1,915,664
Creditors: amounts falling due within one year       (1,791,404)    (1,601,556)
---------------------------------                     -----------    -----------
Net current assets                                      965,644        314,108
---------------------------------                     -----------    -----------
Total assets less current liabilities                 1,200,854        663,867
Creditors: amounts falling due after more than
one year                                                      -       (998,700)
Provisions for liabilities and charges                        -         (4,800)
---------------------------------                     -----------    -----------
Net assets / (liabilities)                            1,200,854       (339,633)
---------------------------------                     -----------    -----------

Capital and reserves
Called up share capital                               1,487,601        582,336
Share premium account                                10,903,502      7,875,993
Other reserves                                          167,062        969,145
Profit and loss account                             (11,357,311)    (9,767,107)
---------------------------------                     -----------    -----------
Equity shareholders' funds / (deficit)                1,200,854       (339,633)
---------------------------------                     -----------    -----------



Consolidated statement of cash flows
for the year ended 31st December 2004
                                                        Unaudited      Audited
                                                             2004         2003
                                                                £            £
---------------------------------                       -----------  -----------
Net cash outflow from operating activities             (1,428,708)    (658,057)
---------------------------------                       -----------  -----------
Returns on investments and servicing of finance
Interest received                                          40,274        9,170
Interest paid                                             (61,510)     (39,415)
Interest element of finance lease payments                      -         (519)
---------------------------------                       -----------  -----------
Net cash outflow on investments and servicing of
finance                                                   (21,236)     (30,764)
---------------------------------                       -----------  -----------
Taxation
Corporation tax paid                                         (945)           -
Corporation tax recovered                                 156,765      124,145
---------------------------------                       -----------  -----------
                                                          155,820      124,145
---------------------------------                       -----------  -----------
Capital expenditure
Proceeds on disposal of tangible fixed assets               9,121            -
Payments to acquire tangible fixed assets                (132,579)     (83,152)
---------------------------------                       -----------  -----------
                                                         (123,458)     (83,152)
---------------------------------                       -----------  -----------
Acquisitions and disposals
Purchase of subsidiary undertakings - payment of
deferred consideration                                          -     (200,112)
---------------------------------                       -----------  -----------
Net cash outflow before use of liquid resources and
financing                                              (1,417,582)    (847,940)
---------------------------------                       -----------  -----------
Management of liquid resources
(Increase) / decrease in short term deposits with
banks                                                    (548,777)      66,625
---------------------------------                       -----------  -----------
Financing
Issue of ordinary share capital                         2,400,000      160,000
Issue of warrants                                               -      312,500
(Repayment) / issue of loan stock                        (150,000)     312,500
Share issue costs                                        (196,836)      (3,012)
Capital element of finance lease payments                       -       (6,231)
---------------------------------                       -----------  -----------
Net cash inflow from financing                          2,053,164      775,757
---------------------------------                       -----------  -----------
Increase / (decrease) in cash                              86,805       (5,558)
---------------------------------                       -----------  -----------


Reconciliation of operating loss to net cash outflow from operating activities

                                                          2004            2003
                                                             £               £
---------------------------------                    -----------     -----------
Operating loss                                      (1,723,968)     (1,342,818)
Depreciation charge                                    194,528         282,162
(Profit) / loss on disposal of fixed assets             (3,663)          2,292
Amortisation and impairment                             59,824         523,342
Decrease in stocks                                      14,035          46,532
(Increase) / decrease in debtors                      (219,449)        338,550
Increase / (decrease) in creditors                     254,785        (493,277)
Decrease in other reserves and provisions               (4,800)        (14,840)
---------------------------------                    -----------     -----------
Net cash outflow from operating activities          (1,428,708)       (658,057)
---------------------------------                    -----------     -----------


Analysis of changes in net funds / (debt)

               At 31 December       Cash  Non-cash    Exchange At 31 December
                         2003       flow     items   movements           2004

                                       £         £           £
------------         ---------- ---------- ---------  ----------     ----------
Cash at bank
and in hand           178,620     86,805         -         388        265,813
Bank deposits         367,762    548,777         -           -        916,539
------------         ---------- ---------- ---------  ----------     ----------
                      546,382    635,582         -         388      1,182,352
Loan stock           (998,700)   150,000   848,700           -              -
------------         ---------- ---------- ---------  ----------     ----------
Net funds /
(debt)               (452,318)   785,582   848,700         388      1,182,352
------------         ---------- ---------- ---------  ----------     ----------



1. Notes
The results were approved by the Board on 6th May 2005 and relate entirely to
continuing operations.

There is no difference between the loss on ordinary activities before taxation
and the loss for the financial year as stated above and their historical cost
equivalents.

The directors do not recommend the payment of a dividend (2003:£nil).

2. Nature of financial information
The financial information has been prepared on the basis of the accounting
policies set out in the group's 2003 published accounts.

The financial information set out above, which is presently unaudited, does not
constitute the group's statutory accounts for the year ended 31st December 2004.
Statutory accounts for 2003 have been filed with the Registrar of Companies,
whereas those for 2004 will be delivered following the company's Annual General
Meeting. The company's auditors, PricewaterhouseCoopers LLP, gave an unqualified
opinion on the 2003 accounts in accordance with section 235 of the Companies Act
1985, and the financial information for the year ended 31st December 2003 is
derived from those accounts.

The unaudited group results incorporate the unaudited results of the company and
all its subsidiaries for the year ended 31st December 2004. In accordance with
s240(3) of the Companies Act 1985, such unaudited results do not constitute
financial statements of the group or of the company.

3. Segmental information

An analysis of turnover by geographical market is given below:
                                                         2004             2003
                                                        £'000            £'000
---------------------------------                    ----------       ----------
Geographical analysis
United Kingdom                                          4,612            4,586
European Union (excluding UK)                              46               71
Rest of the World                                         107              141
---------------------------------                    ----------       ----------
                                       Total            4,765            4,798
---------------------------------                    ----------       ----------

An analysis of turnover, profit/(loss) before tax and net assets by origin is
given below:

               Turnover       Profit/(loss) before tax    Net assets / (liabilities)
              2004     2003          2004          2003      2004               2003
             £'000    £'000         £'000         £'000     £'000              £'000
----------- -------- --------      --------      --------  --------           --------
UK           4,765    4,798        (1,823)       (1,498)      675               (801)
India            -        -            78           (25)      526                461
----------- -------- --------      --------      --------  --------           --------
    Total    4,765    4,798        (1,745)       (1,523)    1,201               (340)
----------- -------- --------      --------      --------  --------           --------

4. Loss per share
The basic loss per ordinary share is based on the loss after tax of £1,589,384
(2003: £1,404,705) and on 122,673,176, ordinary shares (2003: 55,269,225
ordinary shares) being the weighted average number of ordinary shares in issue
during the year.

Diluted loss per share is calculated by adjusting the weighted average number of
ordinary shares in issue for the dilutive effect of options and warrants. Due to
the losses incurred in both 2004 and 2003, none of the share options or warrants
in issue have the effect of increasing the loss per share, were they to be
issued, and accordingly the options and warrants have no dilutive effect on the
reported loss per share.

                                                       2004               2003
                                                          £                  £
--------------------------------                  -----------         ----------
Attributable losses                              (1,589,384)        (1,404,705)
Loss per 1p share                                      (1.3)p             (2.5)p
--------------------------------                  -----------         ----------

5. Taxation
No provision for taxation is required as the group has current period losses.
The deferred tax asset in relation to these losses has not been recognised in
accordance with the group's stated accounting policy. The group recognises tax
credits in relation to research and development where the amount is virtually
certain.
6. Interest payable
Includes notional and actual interest payable on loan stock supported by share
warrants of £44,613 and £16,587 respectively (2003; £144,534 and £40,457). In
April 2004 the loan stock was repaid and the warrants converted into ordinary
shares.

7. Report and Accounts
A copy of this preliminary announcement is available from the Company Secretary
at 2, Bromley Road, Beckenham, BR3 5JE, tel 020 8663 1330, e-mail
angus@vizual.co.uk .

A copy of the Report and Accounts, containing the notice of the AGM, will be
posted to shareholders in May and will be available from the Company's
Registered Office.



                      This information is provided by RNS
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