Dillistone Group Plc: Record Interim Results

Dillistone Group Plc, the AIM listed supplier of recruitment software, announces record interim results for the six months ended 30th June 2007.

Commenting on these results, Jason Starr, Managing Director at Dillistone said:

The results for the six months ended 30th June 2007 show excellent growth in both sales and profitability. Recurring revenues represent a greater proportion of our headline sales figure, 33% up on the same period in 2006, which gives us greater visibility and quality of earnings. Every sales region has shown good sales and profit growth. Particular note must be given to the Australia and Asia Pacific region where profits grew by an outstanding 49%. We are very encouraged by the conversion of our enquiries into orders and this is reflected in these results.î

Six months ended 30th June - June í07 June ë06
Turnover 1.92m 1.68m 14%
Profit before tax 0.658m 0.560m 18%
Profit after tax 0.454m 0.397m 14%
Earnings per share 8.42p 7.62p 10%

ï Strong sales growth from all regions, exceptional performances being seen particularly in overseas operations

ï Dillistone now working with clients in 50 countries worldwide

ï Gross operating margins further improved to 33%

ï Cash flow helped by substantial increase in recurring revenues ñ cash balances of 1.2m at period end

ï Interim dividend of 2.5p per share

ï Strong order intake (up 18%) and support contract renewals (up 24%) on corresponding period in 2006.

Recent contract wins post period end include Norman Broadbent

On current trading and prospects, Mr Starr added: ìThe second half of the year has started well with significant new contracts being won. The global recruitment industry continues to grow and we expect to benefit from this trend as well as to increase our market share. Dillistone continues to be strongly cash generative and is confident of producing substantial growth for the full year

Chairmanís Statement
I am very pleased to be able to report further significant progress in the 6 Months ended 30th June 2007, and excellent prospects for the remainder of the year and in the longer term.

Financial Performance
The financial results for the 6 Months ended 30th June show excellent growth in both sales and profitability. Overall sales increased by some 14% over the same period in 2006, underpinned by an increase of some 33% in recurring revenues partly as a result of a new sales alternative for clients in the USA, and excellent customer retention through support contracts. Non recurring revenues, which in 2006 were flattered to the extent of some 80,000 as a result of the completion of a large order, started in late 2005, increased by some 4% over the equivalent period in 2006. There is an encouraging trend towards recurring system sales, enhancing visibility of longer term revenues.

Total turnover in the period increased by 14% to 1,927,943 (6 Months ended 30 June 2006 1,685,121), and profits before tax increased by 18% to 658,853 (2006 Restated - 560,497). Geographically, sales in all the overseas operations grew well, with Europe posting a 24% increase, and the USA and Australia and Asia Pacific regions both showed an 18% increase. Profits in the overseas operations grew by 32% in Europe, 27% in the USA, which continues to suffer from the effects of the weakness in the dollar, and in Australia and Asia Pacific, profits grew by a very commendable 49%.

The UK, which now has a higher level of costs following the relocation of the London headquarters in August of 2006, still managed to post a satisfying 15% increase in profits, notwithstanding its increased cost base. The overall group operating margin improved further to 33.8%, despite the effect of the increase in the cost base from the second half of 2006, and the large contract which flattered last years figures.

Cashflow has continued to reflect the profitable performance of the business, and at the end of the period we held cash balances of 1,190,608, compared with 538,591 at the year end. This is a cash inflow of over 663,000 in the period (excluding foreign exchange effects), reflecting the Groupís tight controls over its working capital. The Group has no borrowings whatsoever.

Earnings per share amounted to 8.42p in the period (2006 restated- 7.62p),and the board has decided to pay an interim dividend of 2.5p per share on 19th October 2007 to holders on the register on 28th September 2007. The cost of this dividend will be 135,000 and will be met from the cash resources of the Group. Shares will trade ex-dividend from 26th September 2007. A further dividend of some 5p per share is expected to be paid following the publication of the final accounts and approval of shareholders at the Annual General Meeting.

Prospects
Following the launch of a new version of our Filefinder software in March, we have already announced some significant orders, many of which are due to be installed during the second half of 2007. In the 6 months to June, order intake was some 18% ahead of the same period in 2006. Additionally, support renewals in June were some 24% ahead of the same time last year. These factors provide comfort that the excellent performance in the first half will continue through the second half, and the cash reserves of the group provide it with a strong base for further growth.

Recent data published by the AESC for the first half of 2007 reports that the worldwide executive recruitment industry remains in a buoyant state, with an increase in the revenues per consultant of 6.7%, and an increase in overall revenues of some 20% compared to the same period in 2006. The report recognises the importance of emerging markets, and I am pleased that we were able to announce in June that we had clients in 50 countries around the world.

Filefinder is now used in more than 850 clientsí sites in 50 countries around the world, and by some of the largest and most successful search firms as their main business system. The trend for its use in corporate clients is growing, particularly in the USA. These factors support the boardís belief that the prospects for the group remain excellent, and that the new version of Filefinder will continue to be well received by the executive recruitment industry.