RNS Number : 4691D
OneClickHR PLC
16 September 2008
Embargoed Release: 07:00hrs Tuesday 16 September 2008
OneClickHR plc
('the "Group")
Interim Results for the six months ended 30 June 2008
OneClickHR, the AIM quoted HR software, training services and solutions provider, is pleased to announce its interim results for the six
months ended 30th June 2008.
Highlights:
* Underlying HR.net sales increase over 30% compared with corresponding period last year, excluding Ceridian transaction;
* 40 new HR.net clients added during the period, compared to 48 clients added over the whole of 2007;
* Support Service revenue reached 40% of total revenue;
* Costs over the period reduced by �700,000 to �2.7m in comparison to the same period last year;
* Cash balances remained stable at �404,000;
Frank Beechinor, OneClickHR's chief executive officer, commented:
"The first six months of the year has shown considerable progress in increasing our client base, reducing costs substantially and very
importantly growing our support services revenue. Although the economy is weakening I believe we will continue to grow our client base in
the second half of the year as we have a healthy pipeline of new license and consultancy opportunities."
Enquiries:
OneClickHR plc www.oneclickhrplc.com +44 (0) 844 7700 250
Frank Beechinor, CEO / Stephen Oliver, CFO
KBC Peel Hunt Ltd, Nominated Adviser and Broker + 44 (0)20 7418 8900
Oliver Scott / Oliver Stratton
Hansard Group + 44 (0) 207 245 1100
Adam Reynolds / Vikki Krause
About HR.net
Designed and developed by OneClickHR plc the software was designed for rapid deployment in a standard web enabled environment. All users
need is an internet browser and connection to the internet.
Available as a traditional licence purchase or as a SaaS (Software as a Service) solution HR.net provides total flexibility to enable
clients to configure their entire HR processes to meet local, national, international and company specific requirements. Annual Appraisals,
Employee Self Service, E-Recruitment, Performance Management, Talent Management and Salary Reviews can all be swiftly implemented with the
confidence of using up to date and accurate data .
CHAIRMAN'S STATEMENT
Financial Review
I am pleased to report that the Group has again traded profitably for the period under review. Importantly, during the period, we have
continued a series of actions to improve the prospects for sustained growth and to drive shareholder value. These measures have led to:
* increased underlying sales of HR.net
* a lower cost base, whilst maintaining our software development capacity and implementation capability
* stronger process and controls within the unified UK and Indian consultancy operations enabling improved service levels
* a healthy pipeline of new license and consultancy opportunities for the second half.
In the comparable period last year, we concluded a transaction for �0.9m with Ceridian UK whereby it purchased a license to use our
HR.net technology within its own client base. This type of sale has not been repeated and, as a consequence, the stated revenue, profits and
cashflow for the period under review are lower than last year. Although this transaction masks the underlying improvement that has occurred,
the effect of the significant actions we have taken to establish the foundations for sustained growth are also demonstrated.
Total revenues generated by HR.net (license sales, consultancy and support) have increased by a third (excluding the Ceridian
transaction) and this product now represents two thirds of our total revenues. As expected revenues of our legacy products, primarily
Personnel Manager and Personnel Director, have declined. Although both are stable and effective products, shareholders will be aware we have
concentrated our most recent efforts into the HR.net range of products.
Support revenues continued to increase and are now approaching 40% of total revenues. Customers who pay for this support receive
extensive helpdesk support in the operation of their software and also upgrades designed to deliver further benefits to the user.
We believe that it is a fundamental strength of HR.net that customers are able to adapt the software, exactly to their needs.
Consequently as their businesses change, HR.net can be adapted to reflect this. Therefore we are seeing improving 'repeat' revenues for the
consultancy team as existing HR.net customers want additional services after initial implementation, ranging from simple training
requirements to complex business processes such as automating performance reviews. With a growing HR.net customer base, this source of
revenue will undoubtedly grow in the future.
The consultancy team is located in both the UK and India. This arrangement gives us a competitive cost structure, reduced delivery times
and the capability to effectively service overseas clients. To ensure that we make the most of this structure and deliver excellence to our
customers, we have strengthened and improved our internal processes.
The architecture of the core HR.net product enables us to offer a SaaS (Software as a Service) version for customers who wish to procure
in this manner. Whilst this means initially that revenues and cashflows maybe lower, when compared to a traditional license sale, it does
increase the level of committed revenue and cashflows going forward.
During 2007 and into 2008 we have re-shaped the business and controlled the cost base in line with our ambition to generate
profitability and cashflow. This has meant that total costs for the six month period were �2.7m (2007: �3.4m) a reduction of �0.7m. This
reduction has been achieved whilst maintaining our software development capability and our implementation capacity. We therefore have a
strong infrastructure already in place and from which we can meet future growth.
Cash balances at �404,000 are little changed from December 2007 with a net outflow of �14,000 for the six month period, again
demonstrating the benefits of a revised and re-structured cost base.
Operating review
We continued to increase our HR.net customer base and during the period we added a further 40 HR.net clients compared to 48 in the whole
of 2007. These contracts demonstrate the competitiveness of our product, increasing success in particular vertical markets, the strengths of
HR.net in a multinational environment and the utilisation of HR.net by customers to optimise their workforce investment in a weakening
economic climate. Many of these customer wins are against much larger competitors illustrating the growing acceptance of HR.net as a
market-leading technology.
New clients during the period include Foster Wheeler, an international engineering services group with a six figure deal value. This
significant contract again demonstrates the flexibility of HR.net in a multi-national environment. During the period we secured a number of
other clients in the oil services sector including our first customer in Yemen. Savills, the UK's largest property management group,
selected HR.net to manage their workforce administration and now 8 of the UK's top 20 property management companies now use HR.net to manage
their workforce data.
We have added a number of new distribution partners and we have secured our first HR.net customer in New Zealand.
In the first half there has been a good performance from our consulting team. As well as improving management process, we have improved
our client facing activities and consequently increased business from existing customers. Examples of this repeat business include a project
from Digicel, who already use our technology in the Caribbean, to deploy HR.net in Fiji, and the development of a worldwide performance
management solution for Aberdeen Asset Management.
In May we hosted our latest user group in London with over 150 attendees from 6 countries, again underling the strength of our products
and demonstrating how technology can help with their HR requirements.
Our offshore operation in India continues to do well and we have paid particular attention to building our quality assurance experience
to improve the speed at which we can develop software. The offshore consulting capability gives us significant consulting capacity at a
lower cost than our competitors.
The software development teams have retained their Microsoft certification. Our HR.net product is built upon Microsoft technologies and
as a consequence we seek to operate at a recognised level, Microsoft Certified Gold Partner, with particular expertise recognised in Custom
Development Solutions. The development teams regularly release new versions of HR.net to reflect the changes in the core Microsoft
technologies and also to improve and increase the functionality of our software.
My thanks go to all our staff, for their contribution towards these results.
Outlook
We go into the second half of 2008 with a stronger sales pipeline of prospective HR.net licence customers compared to last year. A
number of these prospects are well known brand names in existing and new markets. Added to this, we have a growing pipeline of consulting
business from existing customers and improved contracted support revenues from the growing HR.net user base.
Although the increased sales pipeline is very satisfactory, the Board recognise that there is a risk of customers deferring purchase
decisions. However the sales pipeline combined with the cost reductions previously initiated give good grounds for confidence in a
satisfactory result for the year.
Lord Sheppard of Didgimere
Chairman
15 September 2008
CONSOLIDATED INTERIM INCOME STATEMENT
Unaudited results
Six months ended Year to
30 June 30 June 31 Dec
Note 2008 2007 2007
�*000 �*000 �*000
Revenue 1 2,725 3,469 6,338
Cost of sales (1,495) (1,859) (3,593)
Gross profit 1,230 1,610 2,745
Administrative expenses (1,213) (1,530) (2,813)
Operating profit / (loss) 2 17 80 (68)
Finance income 6 10 22
Profit / (loss) before taxation 23 90 (46)
Income tax expense 3 (16) - -
Profit / (loss) for the period attributable 7 90 (46)
to shareholders
Earnings / (loss) per ordinary share 4
Basic 0.0p 0.1 p (0.03)p
Diluted 0.0p 0.1 p (0.03)p
The above results relate to continuing operations
CONSOLIDATED INTERIM STATEMENT OF RECOGNISED INCOME AND EXPENSE
Unaudited
Six months ended Year to
30 June 30 June 31 Dec
2008 2007 2007
�'000 �'000 �'000
Currency translation differences (77) 43 74
Net (losses) / profits recognised directly in (77) 43 74
equity
Net profit / (loss) for period 7 90 (46)
Total recognised income and expense for the (70) 133 28
period attributable to shareholders
CONSOLIDATED INTERIM BALANCE SHEET
Unaudited
30 June 30 June 31 Dec
Notes 2008 2007 2007
�'000 �'000 �'000
ASSETS
Non-current assets
Property, plant and equipment 173 175 217
Intangible assets 178 132 155
351 307 372
Current assets
Inventories 31 38 31
Trade and other receivables 5 1,969 2,096 1,969
Cash and cash equivalents 404 917 422
2,404 3,051 2,422
LIABILITIES
Current liabilities
Trade and other payables 6 1,480 1,815 1,479
Current income tax liabilities 236 383 235
Total liabilities 1,716 2,198 1,714
TOTAL NET ASSETS 1,039 1,160 1,080
EQUITY
Capital and reserves attributable to the 7
Company's equity holders
Share capital 1,487 1,487 1,487
Share premium 10,922 10,922 10,922
Cumulative translation reserve (37) 9 40
Retained earnings (11,333) (11,258) (11,369)
TOTAL EQUITY 1,039 1,160 1,080
CONSOLIDATED INTERIM CASH FLOW STATEMENT
Unaudited
Six months ended Year to
30 June 30 June 31 Dec
Note 2008 2007 2007
�'000 �'000 �'000
Cash flows from operating activities
Net cash inflows from operations 8 179 729 422
Net interest received 6 10 22
Taxation paid (16) - -
Net cash from operating activities 169 739 444
Net cash outflows from investing activities
Purchase of property, plant and (9) (17) (82)
equipment
Purchase of intangible assets (8) (39) (35)
Capitalised development expenditure (166) (106) (247)
Net cash used in investing activities (183) (162) (364)
Net (decrease)/increase in cash and cash (14) 577 80
equivalents
Effects of exchange rate changes on cash (4) 2 4
and cash equivalents
Cash and cash equivalents at beginning 422 338 338
of period
Cash and cash equivalents at end of 404 917 422
period
ACCOUNTING POLICIES
Basis of preparation
The Group has prepared its consolidated financial statements in acordance with International Financial Reporting Standards as adopted by
the European Union ('IFRS'). Accordingly, this interim financial report for the period 1 January 2008 to 30 June 2008 has been prepared
using accounting policies consistent with those which the Group expects to apply in the IFRS Annual Report and Accounts for the year ending
31 December 2008.
The accounting policies are based on the recognition and measurement principles of IFRS in issue and expected to be effective at 31
December 2008. IFRS currently in issue are subject to ongoing review and endorsement by the European Commission and are therefore subject to
possible change. Further standards or interpretations may also be issued that could be applicable for the full year consolidated financial
statements. These potential changes could result in the need to change the basis of accounting or presentation of certain financial
information from that presented in this document.
The interim financial information has not been audited but has been reviewed under Bulletin 99/4 of the Auditing Practices Board.
The above unaudited financial information does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985.
Statutory accounts for the year ended 31 December 2007, which included an unqualified auditors' report, have been filed with the Registrar
of Companies.
In the light of the previous trading losses of the Group, the directors keep the going concern position under constant review by
reference to the actual trading performance, the expected future trading performance and the sources of funding available to the Group.
Accordingly the Group continues to adopt the going concern basis in preparing these financial statements.
This statement was approved by the directors on 15 September 2008.
Accounting policies
The principle accounting policies adopted by the Group are set out in the annual accounts for the year ended 31 December 2007. There
have been no material changes in the period.
NOTES TO THE FINANCIAL REPORT 30 June 2008
1 Segment reporting
The Group manages its operations on the basis of the products and services supplied to customers. It considers that the sale of
software, its implementation and the subsequent customer support forms the major business segment. Other products and services include the
provision of HR and Training services and the sale of business forms. The major business segment accounts for in excess of 90% of revenues,
costs and assets. Accordingly the Group has not separately disclosed segmental information about its operations.
Geographically, the Group operates from offices in the UK and India, with a direct sales force based in the UK. Consequently the
majority of sales are made to UK based customers, although these may be serviced by staff based both in the UK and India.
Six months ended Year to
30 June 30 June 31 Dec
2008 2007 2007
Sales to external customers by location of
customer
�'000 �'000 �'000
United Kingdom 2,637 3,302 5,875
European Union (excluding UK) 57 96 236
Rest of the World 31 71 227
2,725 3,469 6,338
Assets by geographic area
United Kingdom 2,507 3,065 2,468
India 248 293 326
2,755 3,358 2,794
Liabilities by geographic area
United Kingdom 1,654 2,176 1,630
India 62 22 84
1,716 2,198 1,714
Expenditure on property, plant, equipment and
purchased software by geographic area
United Kingdom 9 30 47
India 8 26 70
17 56 117
2 Operating profit / (loss)
The following items have been charged/(credited) in arriving at operating profit / (loss):
Six months ended Year to
30 June 30 June 31 Dec
2008 2007 2007
�'000 �'000 �'000
Foreign exchange differences (42) 27 60
Depreciation of tangible assets 45 56 96
Amortisation of purchased software 10 21 23
Research and development
expenditure
Actual costs incurred 413 436 945
Amounts capitalised (166) (106) (247)
Amortisation for period 139 93 206
Net amount charged to income 386 423 904
statement
3 Income tax expense
The taxation charge for the period is based upon the estimated effective rate for the full year. During the period, the Group charged
overseas taxes of �16,000 (2007: nil) to the income statement.
As the Group has tax losses of approximately �3.6m in the UK it is considered that no tax charge will arise for the period on UK
operations. A deferred tax asset is not recognised in respect of the tax losses, as the Group cannot be certain that sufficient taxable
profits will be generated to utilise the tax losses.
4 Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to shareholders of by weighted average number of ordinary
shares in issue during the period.
Diluted earnings per share are calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary
shares in issue during the period, adjusted to take account of the potential dilutive effect of outstanding share options. Share options are
not considered dilutive where the exercise price is higher than the prevailing market price.
Six months ended Year to
30 June 30 June 31st Dec
2008 2007 2007
Profit attributable to shareholders (�'000)
Profit / (loss) after tax 7 90 (46)
Weighted average number of shares ('000s)
For basic earnings per share 148,760 148,760 148,760
Effect of potential dilutive share options - 4,311 -
For diluted earnings per share 148,760 153,071 148,760
5 Trade and other receivables
30 June 30 June 31 Dec
2008 2007 2007
�'000 �'000 �'000
Trade receivables 1,191 1,311 1,478
Accrued income 486 382 234
Other receivables and prepayments 292 403 257
1,969 2,096 1,969
6 Trade and other payables
30 June 30 June 31 Dec
2008 2007 2007
�'000 �'000 �'000
Trade payables 329 378 205
Accruals and other payables 275 497 325
Deferred income 876 940 949
1,480 1,815 1,479
7 Statement of Changes in Equity
Share capital Share premium Cumulative Retained earnings Total Equity
translation reserve
�'000 �'000 �'000 �'000 �'000
At 1 January 2007 1,487 10,922 (34) (11,374) 1,001
Retained profit for the period - - - 90 90
Currency translation - - 43 - 43
differences
Total of recognised income and - - 43 90 133
expense for the period
Share based payments 26 26
At 30 June 2007 1,487 10,922 9 (11,258) 1,160
Retained loss for the period - - - (136) (136)
Currency translation - - 31 - 31
differences
Total of recognised income and - - 31 (136) (105)
expense for the period
Share based payments 25 25
At 31 December 2007 1,487 10,922 40 (11,369) 1,080
Retained profit for the period - - - 7 7
Currency translation - - (77) - (77)
differences
Total of recognised income and - - (77) 7 (70)
expense for the period
Share based payments - - - 29 29
At 30 June 2008 1,487 10,922 (37) (11,333) 1,039
8 Net cash flow from operations
Reconciliation of profit / (loss) after tax to cash generated from operations:
Six months ended Year to
30 June 30 June 31 Dec
2008 2007 2007
Profit / (loss) after tax 7 90 (46)
Net interest receivable (6) (10) (22)
Amortisation and depreciation 194 170 325
Movements in inventories - 4 11
Decrease in receivables - 302 382
(Decrease) / increase in current liabilities (61) 147 (279)
Tax charge for period 16 - -
Share based payments 29 26 51
Net cash inflow from operations 179 729 422
9 Interim Report
Copies of the Interim Report will be available from the registered office and at the Group's website
www.OneClickHRplc.com
Independent review report to OneClickHR plc
Introduction
We have been engaged by the company to review the financial information in the half-yearly financial report for the six months ended 30
June 2008 which comprises the consolidated interim income statement, consolidated interim balance sheet, consolidated interim statement of
recognised income and expense, consolidated interim cash flow statement, accounting policies and related notes 1 to 9. We have read the
other information contained in the half yearly financial report which comprises only the Chairman's statement and considered whether it
contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.
This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, 'Review of Interim
Financial Information performed by the Independent Auditor of the Entity'. Our review work has been undertaken so that we might state to the
company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusion we
have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock
Exchange require that the accounting policies and presentation applied to the interim figures are consistent with those which will be
adopted in the annual accounts having regard to the accounting standards applicable for such accounts.
As disclosed in Accounting Policies, the annual financial statements of the group are prepared in accordance with the basis of
preparation.
Our responsibility
Our responsibility is to express to the Company a conclusion on the financial information in the half-yearly financial report based on
our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim
Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United
Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the financial information in the half-yearly
financial report for the six months ended 30 June 2008 is not prepared, in all material respects, in accordance with the basis of accounting
described in Accounting Policies.
GRANT THORNTON UK LLP
AUDITOR
Gatwick
15 September 2008
This information is provided by RNS
The company news service from the London Stock Exchange
END
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