On 18 November RS2 Software plc issued its Interim Directors’ Statement explaining that revenue from the two Comprehensive Agreements signed earlier this year have started taking their full effect during the second half of the year. This income is however being offset by reduced requests for RS2’s services by existing clients who are reducing their spending due to the current economic environment. The Company believes that this cautious approach taken by these existing clients may persist for the short-term and it will take some time before the previous momentum is regained.
The Directors stated that profitability for the second half of the year is expected to remain on the same levels as that registered in the first half of 2009. During the first six months of the year the Group generated a profit after tax of €0.2 million, which represented a decrease of 91% over the first half of 2008 due to the reduction of license and service fees recognized during the period. However, the Directors reassured shareholders that Comprehensive Package and Maintenance Agreements are providing regular revenue streams which give the Company the necessary resilience to sustain this slowdown period.
The Directors stated that there have been no defaults by any of its clients and it has maintained a good working relationship with its key clients. RS2 also explained that negotiations with prospective clients continue with encouraging prospects whilst its marketing efforts are generating positive reactions from the market which in turn is increasing interest in RS2’s software platform.
The Company also confirmed that following the successful set up of its Jordan office as a regional base to service its Middle Eastern clients, RS2 has also commenced operations from the new subsidiary in the Philippines which acts as a support centre and also provides the Company with a presence in the Asian market.