Bond Announce Unaudited Interim Results

KEY POINTS

  • Revenue of £17.4m (2011: £18.4m)
  • Recurring revenue of £11.7m (2011: £11.0m)
  • Administration expenses reduced 3.6% to £13.1m (2011: £13.6m)
  • Operating profit £1.0m (2011:  £1.4m)
  • Diluted earnings per share 0.43p (2011: 0.01p)
  • Adjusted earnings per share 2.07p (2011: 2.85p)
  • Significant new contracts won in Australia and Japan resulting in a 63% increase in revenues in our Asia Pacific operation
  • Strong growth in Outsourcing Division

Commenting on the results, Group Chief Executive Steve Russell said:

“The staffing software market remains challenging and while we remain cautious about the UK and USA, the group is well placed to take advantage of continued growth in key emerging markets and to prosper when growth returns to the economy.

In the last six months Bond has continued to invest in, and expand operations, in Asia Pacific, leading to a significant contract win in Japan, showing continued confidence in our service offering and strength in this market.”

We are pleased to report the unaudited interim results for the six months ended 30 June 2012.

Overview

Although the Group’s recurring revenues have shown healthy growth, sales of software, in particular to the UK staffing industry, reflect the lack of IT investment being made by some of the larger recruitment companies.  They also reflect the on going change in business model from the traditional licence sale to the provision of software on the basis of Software as a Service (“SaaS”). This has resulted in total revenues for the group showing a 5% drop for the six months from £18,375,000 in 2011 to £17,443,000 in 2012.

The increase in recurring revenue means that 89% of administrative expenses (excluding the amortisation of development costs) are covered compared with 82% for the same period last year.

With a reduction of 3.6% in administrative expenses the group operating profit, before the amortisation of acquired intangibles, was £995,000 (2011: £1,393,000) and basic earnings per share from continuing operations were 0.48p per share compared with 1.25p for the same period in 2011.  The adjusted basic earnings per share from continuing operations were 2.07p for the first six months (2011: 2.85p) and adjusted diluted earnings per share were 1.83p (2011: 2.52p).

The group generated cash of £991,000 from operating activities in the period (2011: £1,534,000).  Overall the company has increased net debt by £995,000 after capital expenditure of £1,973,000, mainly in on going product development.

Recruitment Software Division

Whilst the Recruitment Software Division has experienced difficult market conditions, we have been encouraged by continuing growth in recurring income from software support and SaaS which is up by 6.4% from 2011 to 2012.

Our Asia Pacific operation has made great strides in the first half of 2012 announcing the largest deal ever signed by us in Australia and the first contract of note through our Japanese office, both of which have had a positive impact on the first half of 2012 with revenues up by 63% and an operating loss of £89,000 in 2011 has been turned into an operating profit of £167,000 in 2012.  The contracts should also have a further positive impact in the second half of 2012 and 2013 when the deployments are completed and more revenue is recognised.

In the US the process of merging the three separate operations has continued into 2012 so that whilst revenues have fallen by 8%, the operating profit before amortisation from this region has increased by 44% to £892,000 from £621,000.

Market conditions have been the most difficult in the UK where there has been an absence of sizeable licence sales during 2012.  For this reason the operating profit before amortisation of development costs has fallen to £237,000 compared with £973,000 in 2011. The Company has a number of significant sales prospects but there is no question that the lead time for decision making has lengthened. To counter this, the company is considering a number of proposals to reduce the UK operating costs.

Analysis of Recruitment Software Division revenues

HR and Payroll Software Division

The HR & Payroll division supports two HR packages, a payroll and an integrated HR and payroll solution. Their target market is small to medium sized enterprises in both the private and public sector.

The division made an operating profit before amortisation of intangible assets of £867,000 representing a very healthy operating margin of 37% as costs have been adjusted to provide on-going support on all HR and payroll products as well as moving the strategic products forward.

Outsourced HR & Payroll Services

This division comprises two separate operations, Strictly Education which provides outsourced HR, payroll and other services to schools in the UK state sector, and Bond Payroll Services which provides payroll bureau services to organisations in both the private and public sectors.

The revenues for the division are a combination of monthly fees under annual contracts for a variety of outsourced services together with fees payable in respect of consulting services for projects undertaken on behalf of customers.

Strictly Education has seen an 11% increase in revenues from 2011 to 2012.  Underpinning this growth is an increase of 18% in recurring income from annually renewable contracts. Consultancy revenues have remained flat as the UK Government cuts back on state spending on schools.  Operating margins have remained the same at 12% resulting in an operating profit of £475,000 in 2012 (2011: £446,000).

Bond Payroll Services has seen a 2% increase in revenues year on year to £979,000 and operating profit is at a similar level to the first half of 2011 at £250,000.  The business is now processing an average of 57,000 payslips per month which represents a 5% increase on last year. This follows additional investment in staff to improve customer service and retention rates as well as to generate new business through a greater sales and marketing effort.  The business will see the benefits in the second half of 2012.

Product Strategy

The group continues to invest a significant proportion of revenues in enhancing its product portfolio although overall expenditure on development fell slightly to £2,530,000 in 2012 compared with £2,575,000 for the same period last year.

Current trading and future prospects

Whilst the market for staffing software in the UK remains slow, the group has significant prospects both in the UK and abroad, although these are likely to be SaaS and may not have a material impact on the short term results. Trading has improved since the half year end and the recent opening of an office in Singapore demonstrates our confidence in the Asia Pacific region and its prospects for growth. The HR and Payroll division continues to produce high returns and the Outsourcing Division continues to grow at a satisfying rate.

It is true that there is much uncertainty surrounding the prospect for the global economy but the group is well placed to take advantage of the growth areas that do exist and to prosper when growth returns to the world at large.

Martin Baldwin
Chairman
24 September 2012

For further information, please contact:

Bond International Software Plc: 
Tel: 01903 707070
Email: ir@bond.co.uk
Steve Russell: Group Chief Executive
Bruce Morrison: Finance Director

Buchanan:
Tel: 0207 466 5000
Email: timt@buchanan.uk.com
Tim Thompson
Nicola Cronk
Gabriella Clinkard

Cenkos Securities plc:  
Tel: 020 7397 8900

Three Ways To Increase Win Rates

Bond is the backbone to our business says Wilkinson Dwyer

Bond International Software, the global provider of recruitment & human capital management software and services, today announces it has signed an ongoing agreement with Wilkinson Dwyer, a start-up recruitment consultancy that specialises in the tax recruitment marketplace, to deploy Bond Adapt – the specialist portfolio of recruitment software applications.

Wilkinson Dwyer is a start-up recruitment consultancy founded by two directors with approximately 15 years’ combined experience in the tax recruitment marketplace. Based in London, the consultancy specialises in placing candidates within in-house tax vacancies for banks and large cooperates, as well as accounting and legal firms. Its focus is described as a ‘blend of executive search and contingent work’ with its consultants looking to place candidates with salary bandings between £80,000 – £1,000,000.

As a start-up business, Wilkinson Dwyer was keen to sign with a recruitment software provider that offered not only the best customer service in terms of quality of the software, but also with regards to price. After a thorough review of the market, Wilkinson Dwyer found Bond Adapt to be the most cost effective solution compared to its competitors, as well as the most flexible solution – a quality needed to cater for its specific requirements and imminent growth plans.

In preparation for an April 2012 ‘go-live’ date, the recruitment software has already been implemented and will form the foundation of the business. Indeed, Bond Adapt will provide Wilkinson Dwyer’s entire recruitment process infrastructure as the software processes and stores all client, candidate and vacancy details. Furthermore, Wilkinson Dwyer will use functionality within Bond Adapt to manage back-office processes, such as invoice generation and calendar management. The recruitment software – hosted by Bond and accessed online by the agency – will provide Wilkinson Dwyer’s consultants with remote functionality, an essential requirement for allowing ‘recruitment on the move’. Furthermore, Wilkinson Dywer will be taking advantage of Bond Adapt’s LinkedIn integration service to proactively export data onto its database to create more comprehensive candidate profiles.

Commenting on the cost effectiveness of its recruitment solution from Bond Adapt, Thomas Wilkinson, Director, Wilkinson Dwyer, comments, “As a start-up recruitment consultancy, the driving force for us was price and as a consequence, we were expecting to have to sacrifice on quality. We were keen to implement the very best software within our budget and, after thoroughly researching the market, we found Bond to come in well below its competitors in terms of price and yet in many ways far ahead in functionality. Furthermore, the team from Bond was very flexible in the way that the recruitment system was packaged up for us – indeed, we believe Bond Adapt met our specific business requirements entirely, predominantly because they paid attention to our precise situation and needs.”

Wilkinson continues, “We operate in a candidate-short market where high calibre tax candidates are very often difficult to source and yet demand is high. This means we absolutely must have immediate access to candidate and vacancy information as quickly as possible. We are entirely confident that in Bond Adapt, we are more than adequately equipped – in a single, easily affordable package, we can now manage all our back-office activity and stay ahead in the ‘CV race’. In short, we now have the ideal backbone for our business.”

Tim Richards, Managing Director, Bond International Software UK, concludes “Bond prides itself on its flexibility of service, tailoring packages to the individual needs of each customer. Whether it be a multinational corporate, or a start-up such as Wilkinson Dwyer, we work closely with each customer to establish their needs and provide a package that best suits their requirements. It is this commitment to service and adaptability that means the business is continuing to enjoy dramatic success in the industry.”

Bond Sponsors The Global Recruiter’s First Asia Pac Recruitment Summit

GR Asia Pac 200x200Bond International Software, the global provider of recruitment & human capital management software & services, today announces its sponsorship of The Global Recruiter’s first Asia Pacific Recruitment Summit, “Brave New World”.

The summit will be held at Marina Bay Sands, Singapore, on the 5th and 6th September 2012, uniting the recruitment industry in and around Singapore, Hong Kong, Australia, Japan and the other main Asia Pacific jurisdictions. These hubs are among the fastest growing recruitment marketplaces in the world and The Global Recruiter’s summit provides a unique opportunity for recruitment professionals in the area to share expertise and experience.

The two-day summit includes plenary sessions, masterclasses and a selection of seminar tracks, while simultaneously providing the opportunity to investigate supportive products and services.

Bond’s sponsorship of the event demonstrates its ongoing commitment to supporting business growth in this region. Indeed, in the past 12 months alone, Bond has seen a 24% revenue increase across Asia Pacific, following its expanding network of local offices since opening its first in Hong Kong in 2006, and the development and localisation of its benchmark recruitment software – Bond Adapt – for the Asian market.

Bond Adapt is already in wide use globally and this latest version has been most recently awarded “Highly Commended” for Best Innovation in The Asia Pacific Global Recruiter Industry Awards 2012, principally due to its localisation, scalability, platform independence and inherent flexibility. Bond will showcase the new version of Bond Adapt at the summit, which is available in Japanese, Chinese and Korean and has been specifically tailored for the legislative requirements of  local markets – a first for global recruitment software.

Steve Russell, CEO, Bond International Software, comments, “The Global Recruiter is providing enormous support to the AsiaPAC recruitment market by facilitating the development of connections and networks of shared knowledge that are rapidly developing.. Having been involved in the global recruitment industry for nearly four decades and being established in the Asia Pacific region for many years now, we welcome the opportunity to meet leading firms and discuss their immediate needs and ambitions.”