MSR Mediasurface

    RNS Number : 6100U
  Mediasurface PLC
  16 May 2008
   

    Mediasurface plc

    Results for the 6 Months ended 31st March 2008

    Mediasurface plc, the AIM listed Content Management Software Author and Vendor, announces un-audited results for the 6 months ended 31st
March 2008.

    Company Highlights for Half Year

    *     Group revenue up 16.5% to £7.06 million (2007: £6.06 million).
    *     Pre-tax loss of £0.11million (2007: Profit £0.38 million).

    *     Proforma EBITDA Profit of £1.03 million (2007 : £0.64 million) excluding redundant staff cost, restructuring costs and
non-recurring items.

    *     Cash position £1.40 million (30th September 2007: £1.78 million).
    *     Annual value of recurring support revenues is now £4.5 million
    *     The first half included significant new license deals with Royal Bank of Scotland, Westpac (one of Australia's leading Banks) and
Lord Abbett a major USA Fund Management company. 

    Joint Chairman's & CEO Statement
    For the six months ended 31st March 2008

    The company has enjoyed an improvement in trading since the disappointing six month period to the 30th September 2007 reporting revenues
of £7.06m and a pro-forma EBITDA result after excluding restructuring and non-recurring items amounting to £1.03m (2007: £0.64m)
    The first six months has seen an improvement in the licence revenues associated with the Morello product line which enjoyed a number of
key sales successes and generated licence revenue of £1.6m for the period. This is gratifying and in line with management's expectations.
Morello proved it remains a competitive product within its market and maintenance revenues continued to grow to an annualised rate of £3.3m
demonstrating a high customer retention rate. Similarly, services revenues remained solid with Group wide revenue of £2.2m, reflecting high
demand and utilisation rates.
    With regard to Immediacy acquired last financial year, we are pleased to report that the Immediacy product line has continued to
succeed, contributing overall revenue of £2.3m in line with management's expectations. Immediacy now represents 32% of group revenues and
is a significant contributor to the bottom line of the group (EBITDA £0.5m). Immediacy also enjoyed its first new business wins in the new
Mediasurface territories of USA, NL and Australia, all important milestones.
    During the period, management undertook two phases of significant cost cutting. The first in October centred largely on reducing sales
and marketing spend at the Pepperio business unit. The net effect of this action was to leave the business with a credible software as a
service WCMS offering enabling it to protect its existing customer base as well as to continue adding new customers over the period. After
restructuring, the Pepperio business now has a modest negative impact on the group profitability, pro-forma EBITDA loss of £0.1m for the
period under review.
    The second phase of cost reduction was focused on headcount at Morello, the closure of our California and Chicago offices and an
associated reduction in marketing spend. As a result of these factors the Morello business returned to profit in the first half.
    In summary, Mediasurface enjoyed sales successes in all product lines. The implementation of prudent cost reductions has effectively
reduced the break-even point of the business and therefore reduced the risk to the bottom line.
    Since the beginning of April 2008, the company's pipeline of new business has continued to strengthen. As a result of this and the cost
cutting initiatives implemented since October 2007, particularly in relation to the Morello product line, the Directors are confident that
the prospects are improved. In terms of risk the imperative to close significant deals prior to the financial period end remains, the
competitive landscape in terms of competitor product enhancements and general economic sentiment can affect performance, Notwithstanding
these potential risks, the Directors believe the business will perform in line with management expectations in the current financial year. 
    The Company announced on 24th April 2008 that they had received a preliminary approach that may or may not lead to an offer, from a UK
company that does not compete directly with Mediasurface. The Company is pleased to announce that it has received a formal offer for
Mediasurface Plc further details of which are contained in a separate announcement that is being released to shareholders at the same time
as these interim results.

    Statement of Directors' responsibilities 
    
The Directors confirm that this condensed set of consolidated financial statements has been prepared in accordance with IAS 34 as adopted by
the European Union, and that the interim management report herein includes a fair review of the information required by DTR 4.2.7 and DTR
4.2.8. 
    
The Directors of Mediasurface plc are listed in the Mediasurface Plc Annual Report and Accounts 2007. A list of current directors is
maintained on the Group's website: www.mediasurface.com

    Michael Jackson
    Chairman

    Lawrence Flynn
    Chief Executive Officer
    16th  May 2008


MEDIASURFACE PLC
 
CONDENSED CONSOLIDATED INCOME STATEMENT
    For the six months ended 31 March 2008



      
                                 Note  
                                          Six months ended 31   Six months ended 31          Year  ended 
                                                       March                 March          30 September 
                                                         2008                  2007                  2007
                                                    unaudited             unaudited             unaudited
                                       
                                       
                                                            £                     £                     £
                                       
 Revenue - continuing             2               7,055,193             6,063,604            11,283,530  
 operations                            
                                       
 Cost of sales                                    ( 464,484)            ( 396,862)          ( 1,109,273) 
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