SDL
03/02/2012 13:29
HALFYR
REL: 1329 HRS Solution Dynamics Limited
HALFYR: SDL: Solution Dynamics Limited Interim Report to 31 December '11
The Directors of Solution Dynamics announce the Company's results for the
six-month period to 31 December 2011.
Summary Comparison
Earnings before interest, tax, depreciation and amortization were up 11% on
revenues up 3%. The result was slightly ahead of budget.
Trading six months to December 2011 v. same period to December 2010 ($000)
2011 2010 % change
Revenues - Software 1,478 1,299 14%
Revenues - Services 5,453 5,282 3%
Revenues - Eliminations (567) (413) (37%)
Total REvenue 6,364 6,168 3%
EBITDA 458 413 11%
Depreciation 137 136 1%
Amortisation 184 104 77%
EBIT 137 173 (21%)
Interest 43 52 (17%)
Net profit after tax 94 121 (22%)
Services
Services performed well again. Revenues increased 3%. Contribution was down
2% on last year but ahead of budget.
Although the traditional transactional volumes continue to decline, SDL
continues to increase revenues through services and technology based
revenues. There were several new business wins during the first half and the
most significant win was the valuation mailing for Auckland Council.
We recognized the global trend of larger organisations moving document
composition IP in-house. SDL now supports print ready files and offers
composition solutions in both SaaS and licence models.
SDL has also added a procurement management offering in SaaS and Licence
versions. This is an extremely competitive offering, which will
revolutionize the traditional print management market.
Software
Software revenues reflect lumpy licence sales and annuity revenues from
service contracts at installations. In the six months to December 2011
annuity revenues lifted 13% over 2010 to $626,000; licence sales increased
14% to $852,000. In the second half contracted recurring revenues are
expected to increase by a further 22% to $1.5 million per anum, as result of
recent wins in the European market and FujiFilm.
Superficially this looks like a steady outcome but it belies the battle to
secure licence sales. While the prospects list in Europe is very healthy the
uncertainty in that market may be lengthening the sales cycle. There are
qualified prospects in Banking, Insurance, Local bodies, Retail and Education
sectors totaling around $3m. We still do not lose sales to competitors. As
noted previously the only real constraint is our ability to build our
distribution and sales force to increase properly qualified customers.
Our FujiFilm partnership in Australia has not matured as we had hoped, yet.
It holds great promise. Both FujiFilm and our people are working hard to
realize the promise.
Balance Sheet
At December 2011 the balance sheet shows bank debt of $271,000. This rather
understates the true debt position of the company. A special arrangement
with a customer for the delivery of services has resulted in this temporary
reduction. The amount involved is approximately $250,000. Reflecting this
arrangement December 2011 trade creditors at $800,000 compare with $650,000
at December 2010.
Allowing for this special arrangement total debt is $349,000 lower than
December 2010 and working capital has improved by $448,000.
Summary
We are on budget for the six months year to date and on that basis management
remains confident about hitting our EBITDA budget for the full year of $1.1m.
This would be 25% ahead of the 12 months to June 2011.
The board noted how hard management had to scramble for sales to produce the
six month result. The upheavals in Europe and financial markets worldwide do
not necessarily have to affect a small company like ours with emerging
technology, but it may prove difficult to achieve our targets.
On behalf of the board
Colin Giffney, Chairman
Nelson Siva, Managing Director - +64-21-415027
Solution Dynamics Limited (SDL) is a company offering a range of integrated
solutions encompassing data management, electronic digital printing, document
distribution, web presentment and archiving, fulfillment, traditional print
services, scanning, data entry and Communication Management Systems.
SDL's Communication Management Systems. 'CMS' software products streamline
the creation, formatting, personalisation, and production of compelling
customer communications derived from defined data sources. They also simplify
storage and distribution of these messages in any media through multiple
marketing channels.
Users of the products and services include banks, insurance companies,
airlines, large mailing house and marketing fulfilment companies, local
government, brown and white goods manufacturers and wholesalers, and
retailers with multiple outlets.
Today digital media is becoming an ever more important part of external
customer communications with all types of public and private organisations.
SDL products are specifically designed to enable the management of these
underlying digital assets, and their rapid distribution as well as efficient
storage for immediate access or archival purposes.
End CA:00219174 For:SDL Type:HALFYR Time:2012-02-03 13:29:02
