Dillistone Systems: Record Interim Results – Delivering Reach, Quality & Quantity

Dillistone Systems, the AIM listed supplier of Recruitment Software, is pleased to announce its record Interim results for the six months that ended on 30th June 2008.

- The Group is debt free
- Recurring revenues as a %age of total revenue increased to 43%, 31% up on 2007
- Group operating margins increased to 37% from 34% in H1 2007
- Sales growth by region; Asia - 47%, Europe - 36%, UK - 29%, USA - 21%
- Dillistone working with clients in over 55 countries worldwide
- Further take up of our ëSoftware as a Serviceí product (ëSaaSí)
- Cash inflow of 767k in period

Commenting on the results, Jim McLaughlin, Chairman and Finance Director, said: ìDespite recent uncertainties in global markets, Dillistone has achieved growth across all areas of our business; revenue, profit, cash, earnings per share, market share and geographic expansion. This represents our best performance to date.î

Jason Starr, Managing Director of Dillistone Systems, reported: ìWe are delighted with Dillistoneís continued development and the performance at the half year. While we are optimistic about the full year result, we are still mindful of the ongoing economic uncertainty.î

Chairmanís Statement
I am very pleased to be able to report further significant progress in the 6 Months ended 30th June 2008, with record Interim results for the Group, and continued cash generation during the period.

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 30% over the same period in 2007, underpinned by an increase of some 30% in non recurring revenues partly as a result of orders taken towards the end of 2007 which were implemented during the early part of 2008. Recurring revenues, mainly support contracts, increased by some 31% over the same period in 2007, and now comprise 43% of total revenues.

Total turnover in the period increased by 30% to 2,515,902 (6 Months ended 30 June 2007 1,927,943), and profits before tax increased by 44% to 948,577 (2007 - 658,853). Geographically, sales in all operations grew well, with Asia posting an impressive increase of 47% over the same period last year, Europe 36%, the UK 29% and the USA a more modest 21%. However the nature of the US operation is now benefiting significantly from our initiative to offer our ëSaaSí product in the region, and now some 57% of the revenues in this region are recurring, which has contributed to an increase in profits attributable of some 82%.

The UK, which now has a higher level of costs than the rest of the Group increased its revenues by 29%, and operating profits by 33%. Overall Group operating margins increased from 34% in the first half of 2007 to 37% in the current year.

Cashflow has continued to reflect the profitable performance of the business, and at the end of the period we held net cash balances of 2,041,885, compared with 1,533,649 at the year end. There was a cash inflow of over 767,000 in the period (excluding foreign exchange effects), after the payment of corporation tax of some 250,000 reflecting the Groupís tight controls over its working capital. The Group continues to have no borrowings whatsoever, and from this inflow paid a dividend of 324,000 in May 2008.

Earnings per share amounted to 12.3p in the period (2007 – 8.42p) an increase of 46% over the same period in 2007, and the Board has decided to pay an interim dividend of 3.5p per share on 3rd October 2008 to holders on the register on 12th September 2008. The cost of this dividend will be 189,000 and will be met from the cash resources of the Group. Shares will trade ex-dividend from 10th September 2008. In the absence of unforeseen circumstances, a further dividend of some 6.5p per share is expected to be paid following the publication of the final accounts and approval of shareholders at the Annual General Meeting.

Prospects
We enjoyed a very high level of orders towards the end of 2007 and our strong performance in the first half of 2008 reflects this. Whilst there is general economic uncertainty, and I do not expect our performance in the second half to match that of the first half, I do however anticipate that trading for the full year will be somewhat ahead of current market expectatioDavid HurstDear David Hurst,Dear David Hurst,DavidHurstns. Following the launch of our latest product release, FILEFINDER 8, we have increased our market share and have won some significant and highly regarded new clients.