RS2 Software plc - Interim Results

Friday, August 14th, 2015

On 14 August, RS2 Software plc published its interim results covering the first six months of 2015.

Performance Overview

During the period under review, the RS2 Group reported a 48.5% increase in revenue. The company informed that this increase was attributable to the recognition of new licence fees and an increase in service fees, noting in particular the new licence agreement that was concluded earlier this year with a bank in Vietnam, which is considered strategic to the Group in tapping the Asian market. Additionally, maintenance fees for new and existing clients also contributed to the increased revenue figure, as did the 16% increase in processing services.

The increase of 21.6% in cost of sales was attributable directly to an uplift in HR costs in view of increased staff requirements to maintain service levels to the company’s growing client base.

Despite the increase in cost of sales, gross profit was nonetheless up by 75.6% to €6.8 million, translating into a gross profit margin of 59%, up from 50% a year earlier.

Marketing and administrative expenses increased by 11.9% and 21.9% respectively while capitalised development costs for the continuous maintenance and upgrade to the BankWORKS platform amounted to €0.4 million. After accounting for a net income of €0.6 million, the Group’s operating profit stood at €6.5 million, an increase of 112.7% over the comparable reporting period. Consequently, EBITDA was up 89% to €7.2 million (1H2014: €3.8 million).

During the six months ending 30 June 2015, the Company reported a net finance income position of €0.09 million compared to the net finance cost position a year earlier of €0.07 million, as the company continued reduce debt levels.

Overall, the RS2 Group registered a significant improvement in pre-tax profits to €6.56 million compared to €2.96 million during the first six months of 2014. After accounting a for a tax expense of €1.8 million (H1 2014: €0.74 million), the Group’s net profit for the period under review amounted to €4.74 million compared to the €2.22 million registered during the first six months of 2014.

The Statement of Financial Position shows a 13.8% increase in total assets to €36.6 million since 31 December 2014 largely due to the increases in property, plant and equipment and trade receivables which in turn reflect the rising levels of business activity. The 15.7% increase in the Group’s cash balance since the 2014 financial year end to €5.2 million also contributed to the aforementioned increase in total assets. Similarly, compared to the 2014 year-end figures, total liabilities increased by 18.3% to €10.9 million as the increases in trade and tax payables offset the further €0.2 million reduction in total debt to €3.3 million. Shareholders’ funds also improved by 12.1% to €25.7 million largely reflecting the profit registered during the period under review.

Dividend

The Directors did not declare an interim dividend given the further substantial investment required in the Group’s infrastructure and business development.

Outlook

In conclusion, the Directors noted that they maintain a positive growing outlook for the remainder of 2015. 

Download

RS2 Software plc – Interim Financial Statements covering the six months ended 30 June 2015.

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