Norkom Announces Interim Results for the Six Months Ended 30 September 2010

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Norkom Group plc (AIM: NORK.L, ESM: NORK.IE), a leading provider of software that helps financial institutions comply with regulations and assists in detecting and preventing financial crime, today announces its results for the six months ended 30 September 2010. 

The company reports the following key financials:

• Results marginally ahead of guidance given in September 2010 trading update

•Group remains profitable with a strong balance sheet and cash position

•Strong growth in Post Contract Support (PCS), up 28% to €4.2 million (2009: €3.3 million)

•Revenue €22.6 million (2009: €24.6 million)

•EBITDA including IFRS 2 €0.8 million (2009: €4.3 million)

•EBITDA excluding IFRS 2 €1.6 million (2009: €4.5 million)

•Adjusted earnings per share 1.60 cents (2009: 4.22 cents)

•Cash position at 30 September 2010 €37.3 million (2009: €31.7 million)

Half Year Results

 

 €m

 H1 FY2011

 H1 FY2010

 Revenue

 22.6

 24.6

 EBITDA (excluding
 IFRS 2)

 1.6

 4.5

 Adjusted Diluted EPS

 1.6 cent

 4.22 cent

 Cash Balance

 37.3

 31.7

 Key operational highlights for the period include the following:

•Addition of five new clients in target markets including Fifth Third Bank (North America), Lombard International Assurance (Europe) and RHB Bank (Asia).

•Continued expansion of existing client relationships, which delivered over 90% of total revenue during the period (2009: 89%) through follow-on investment in Norkom solutions.

•Sales pipeline volume and activity higher than the first half of last year, however sales cycles have lengthened due to a slowdown in the contracting cycle and delays in the introduction of new regulations, particularly in Asia.

•Continued investment in our Packaged Applications with enhancements to our electronic payments, debit card and internal fraud applications.

•Key North American market continues to recover with revenues up 2% to €9.2 million (2009: €8.9 million) on the same period last year.

•Norkom associate, Digital Harbor, making strong progress in the US healthcare fraud solutions industry.

Paul Kerley, Chief Executive Officer of Norkom Group plc, commented:

“As outlined in our trading update in September, we have experienced changes in market behaviour during the first half of the financial year, with customers now preferring an incremental approach to procurement and engaging in longer sales cycles. Whilst this impacted our view of what is achievable in terms of operating performance for the full year, the pipeline for new business remains strong and the fundamental market drivers are still present. We therefore believe the correct strategy is to continue to invest in the business, reflecting our confidence in the future growth of Norkom. Our financial strength, expanding global client base and market leading fraud management and compliance solutions provide Norkom with a strong position from which to benefit from any future upturn in the market.”

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