Preliminary results - year ended 30 September 2009

Group turnover for the year to 30 September 2009 was £5.84 million compared with £6.85 million last year. This reduction reflects the harsh economic conditions which have prevailed throughout the UK over the last year.

Pre-tax profit was £456,000 which compares with £1.065 million last year (excluding profit on property disposals). Adjusted operating profit, excluding non-cash IFRS charges and reorganisation costs, was £707,000 (2008: £922,000) giving an operating margin of 12% (2008: 13.5%).

Notwithstanding the overall reduction in sales, it is pleasing to note that our contracted, recurring software revenues are unchanged in absolute terms. These relate to annual software licences and hosting fees and represent 75% of total sales. Our business model is built around maintaining strong, visible recurring revenues from our software products which cover the Group's day to day cash operating costs.

The reduction in non-recurring revenues, which include initial charges for software and professional services, has resulted from customers and prospects generally delaying their discretionary IT expenditure.

We have been actively managing-down the Group's cost base over the last couple of years and this process has continued during the year under review. The substantial cost savings we have achieved have gone some considerable way to mitigate the reduced levels of non-recurring revenue and allow us to report a level of adjusted operating margin which management consider is acceptable in the current climate.

Our application hosting revenues have grown once again this year and they now represent 23% of turnover (2008: 19%).

We face an increased risk of bad debts as do most businesses at the present time and we remain focussed on cash collection and working capital management. It is encouraging to note that since 1 October 2008 we have only lost income of £6,000 per year from one customer going into administration.

Our Research and Development effort has been focussed in two areas: the delivery of our graphical distribution software application, the first release of which was available on schedule during the final quarter of the financial year; and also the browser-based version of our Vecta Sales Intelligence product which remains on schedule to be released at the end of 2009. Total R&D expenditure during the year was £1.04 million (2008: £1.19 million), all of which has been charged in the Income Statement.

During the year your Board took the decision to return approximately £6 million of surplus cash to shareholders by way of a share buyback. The tender offer to buy back 11,991,386 of the Company's shares at a price of 50p per share was completed in April and was fully subscribed. As a result of this the Company's issued share capital was reduced to 12,530,976 shares with a further 1,253,097 shares now being held in treasury.

Group net assets at 30 September 2009 were £7.0 million compared with £14.3 million at 30 September 2008. This reflects the impact of the share buyback together with a reduction of approximately £900,000 in the surplus on the Group's defined benefit pension scheme which is described more fully in the Chief Executive's statement. Even after the share buyback, the Group had cash balances in excess of £2.4 million at the year-end which reflects positive operating cash flows.

The Board is proposing to pay a final dividend of 2.0p per share, the same as last year. This gives a total for the year of 2.713p (2008: 2.713p excluding the 5p special dividend paid following the disposal of properties). If approved by shareholders, the final dividend will be paid on 7 April 2010 to those shareholders on the register at 5 March 2010. The shares will be ex-dividend on 3 March 2010.

I would like to thank all our executive directors and members of staff for their input over the year.

Whilst there are some initial signs of increased activity levels in the markets in which we are involved, these have not yet translated into increased levels of orders. We do not expect trading levels to significantly improve until the economy generally shows signs of sustainable improvement. However, with our latest product releases, strong recurring revenues and a lean cost base we are well positioned for the recovery in our markets.

MICHAEL HELLER
Chairman

26 November 2009.

Annual General Meeting 2010 - Proxy Votes (PDF Document).
Interim Management Statement - 17th Feb 2010 (PDF Document).
Year End 2009 Reports & Accounts (PDF Document).
Preliminary Year End 2009 Reports & Accounts (Word Document).
Interim Management Statement - 19th August 2009 (Word Doc).
Interim 2009 Reports & Accounts (Word Document).
Notice Of Annual General Meeting 2009 Statement (PDF Document).
Interim Management Statement - 17th February 2009 (Word Doc).
Year End 2008 Reports & Accounts (PDF Document).
Interim 2008 Reports & Accounts (Word Document).
Year End 2007 Reports & Accounts (PDF Document).
Interim 2007 Reports & Accounts (Word Document).
Preliminary Year End 2006 Reports & Accounts (Word Document).
Interim 2006 Reports & Accounts (Word Document).
Preliminary Year End 2005 Reports & Accounts (Word Document).