City Announcements
Interim results, six months ended 31 December 2006
Morse plc ("the Group"), announces its interim results for the six months ended 31 December 2006.
The Group has two discrete operating businesses:
- Morse consulting ("Morse"), an advisory and execution professional services firm operating under a single brand
- Monitise Group ("Monitise"), the Group’s secure mobile banking applications business
Financial Highlights
- Separation of the Group into two businesses in August 2006 and a possible next stage of separation now being considered
- Operating profit before exceptional items and discontinued operations for Morse up 21% to £5.8 million (2005: £4.7 million excluding discontinued operations)
- Investment in Monitise of £2.9 million in the period (including share of JV loss of £0.2 million); planned investment of approximately £5.0 million during the second half, as previously announced
- Group profit before tax £3.7 million (2005: £6.1 million)
- Group profit after tax £2.7 million (2005: £1.8 million)
- Basic earnings per share 1.7p (2005: 1.1p)
- Closing cash balance at half-year end £18.1 million (30 June 2006: £17.8 million)
- Interim dividend of 1.25p (2005: 1.20p)
Morse consulting ("Morse") Highlights*
- Morse is a ‘Top 15’ firm in the overall UK consultancy market and a ‘Top 5’ firm within the UK financial services consulting market, with strong international reach
- Operating margin before exceptional items and discontinued operations for Morse up by 1.3% from 3.1% for the period to 31 December 2005 to 4.4% for the period ended 31 December 2006
- Single brand launched today as Morse becomes a unified services company
- Key goals for Morse over the medium-term remain to
- match or exceed industry benchmarks
- double the percentage operating margin to 7.2% from 30 June 2006
- Continuing to focus on higher margin services contracts
*Following the disposal of our businesses in Germany and Austria in July 2006, the performance figures in this commentary relating to the six months ended 31 December 2005 for Morse’s European infrastructure consulting business and for the Group as a whole have been adjusted for the purpose of easier comparison. For the half-year ended 31 December 2005, Germany and Austria contributed £34.4 million of Group turnover with nil contribution to Group operating profit before exceptional items.
Monitise Group ("Monitise") Highlights
- Monitise emerging as the market leader in secure mobile banking applications in the UK and making progress internationally
- Recent discussions regarding the valuation of Monitise with independent advisers have confirmed the Group’s confidence that the current value of Monitise is significantly in excess of the funds invested to date to build the business
- The Morse plc Board is considering a possible next stage of separation at a point when the significant opportunity around Monitise might be more effectively exploited outside the Group
Commenting on the results, Duncan McIntyre, Chief Executive of Morse plc, said:
"Both Morse and Monitise have made excellent progress during the period.
"Morse is now a unified services company operating under a single brand. Its inherent strength was demonstrated in the period with operating profit before exceptional items and discontinued operations up 21% and we remain focused on our goal of doubling its percentage operating margin before exceptional items and discontinued operations to 7.2% from 30 June 2006 over the medium-term. Following the period end, demand for its services has remained healthy and the business continues to perform in line with expectations.
"Monitise is now emerging as the market leader in secure mobile banking applications in the UK and making progress internationally. Opportunities for this business are strong and we expect to make further customer signings as MONILINK™ is rolled out."
Richard Lapthorne, Chairman of Morse plc, added:
"We remain focused on ensuring that both businesses, Morse and Monitise, operate in an environment which maximises their individual chances of fulfilling their potential. In order to best achieve this, the Morse plc Board is currently considering a possible next stage of separation of the two businesses at a point when the significant opportunity around Monitise might be more effectively exploited outside the Group. No decision has yet been made as to what form that separation may take.
"In the past year we believe we have added significantly to the value of the business and every announcement extending the adoption of the platform by leading banks will further increase this value.
"We have set our dividend policy in the light of the results and prospects of Morse, excluding our investment in Monitise, and hence the Board has no difficulty in approving a 4.2% increase in the interim dividend."
For a full copy of the Interim Results click here
Contacts:
Morse plc
Duncan McIntyre, Chief Executive Officer
Eric Dodd, Group Finance Director
Tel: 020 8380 8000
Financial Dynamics
Giles Sanderson
Harriet Keen
Haya Chelhot
Tel: 020 7831 3113