Novasoft AG
Novasoft AG announces second-quarter 2004 figures
Ad-hoc-announcement transmitted by DGAP.
The issuer is solely responsible for the content of this announcement.
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Novasoft AG announces second-quarter 2004 figures
·Revenue totaled EUR 14,300,000, as against EUR 14,500,000 the prior quarter.
·With retrospective effect as of 1 January, 2004, Novasoft has been applying
the new IFRS 3 standard passed in March 2004, meaning that no amortisation of
goodwill is charged. As such EBIT for Q2 stood at EUR 751,000 (adjusted figure
for Q1/04 EUR 1,300,000). This translates to an EBIT margin of 5.2 percent
(adjusted Q1 figure 9.1%).
·EBT totaled EUR 839,000, which spells an EBT margin of 5.9 percent. The
comparable IFRS prior-quarter figure totaled EUR 1.5 million, or 10.5%).
·The net income for the period fell to EUR 200,000, whereas the comparable
figure for the first quarter was EUR 871,000. Net income per share came to
EUR 0.01, down from the comparable prior-quarter figure of EUR 0.05.
·As of 30 June, 2004 the order backlog increased slightly and now stands at over
five months.
·An increase in revenue in the second half-year and therefore a marked increase
in EBIT margin at the end of the year are still realistic targets.
end of ad-hoc-announcement (c)DGAP 04.08.2004
Issuer’s information/explanatory remarks concerning this ad-hoc-announcement:
Second-quarter 2004 saw the first signs of a revival in the IT market.
Consequently Novasoft was able to close out more large-scale projects with
clients and at the same time avoid the price squeeze of the prior year when
signing contracts. As a result of the positive trends in the second quarter, the
order backlog has at 30 June, 2004 increased slightly to over five months, and
is holding at a consistently high level. Nonetheless in Q2/04 we were still
feeling the effects of the tough negotiations in 2003, meaning that revenue of
EUR 14,300,000 million fell EUR 200,000 on the prior quarter.
With retrospective effect as at 1 January, 2004 Novasoft has been the new
IFRS 3 standard passed in March 2004, as well as newly revised IAS regulations
36 and 38. The switch to IFRS means that no amortisation of goodwill is charged.
There are no signs of a decline in value, meaning that there was no need for
extraordinary amortisation.
As a result of our continuing success and further rosy prospects in the Russian
market, Novasoft will be opening a local representative office there, most
probably during the current quarter. In Germany the organisational integration
of our Rüsselsheim company into the Group was completed in the second quarter.
In addition, the last General Meeting approved the proposed control and profit
agreement for our Böblingen company. These structural alterations will have no
significant impact on the figures of companies within the Group.
Revenue by region
Revenue for the second quarter totaled EUR 14,300,000, a drop of EUR 200,000 on
the prior-quarter figure; half-year revenue amounts to EUR 28,900,000, as
opposed to EUR 31,400,000 for the same period in 2003.
Revenue of EUR 4,500,000 from the German market in Q2 2004, as opposed to EUR
4,800,000 in Q1 2004, attest to reluctance among clients to invest, and the
resulting pressure on prices. In the period under review, however, we once again
managed to sign follow-up and new contracts at attractive prices, and the order
backlog has grown considerably. Revenue from the German market in the first
half-year totaled EUR 9,400,000, EUR 3,000,000 down on the same period one year
earlier.
Novasoft’s European operations outside Germany scored the highest quarterly
revenue to date. It totaled EUR 8,800,000 and was thus about five percent up on
the prior quarter’s figure of EUR 8,400,000. Prospects for the coming quarters
are very encouraging here: In addition to consistently high revenue in England,
the second large retail project will result in revenue in Russia being generated
for the most part in the second half-year. Furthermore in Spain Novasoft has
begun setting up a technology advice service, and expects this new venture to be
contributing to the overall profitability of the Group as early as next
quarter.
In the first six months of 2004 Novasoft posted revenue for European countries
outside Germany of EUR 17,200,000 compared with EUR 16,400,000 in the year-
before period.
Countries outside Europe continue to have little impact on total revenue.
Compared with the Q1 2004 figure of EUR 1,200,000 revenue dropped slightly to
EUR 1,100,000; first half-year revenue amounted to EUR 2,300,000, as opposed to
EUR 2,600,000 in the same period the year before.
Income
The consequences of the downward pressure on prices in the last business year
have resulted in lower EBIT of EUR 751,000 in Q2/04 – after adjusting for
changes in accounting methods the figure for Q1 was EUR 1,300,000, whereas that
reported was EUR 899,000. The EBIT for Q2/04 translates into an EBIT margin of
5.2 percent (the adjusted Q1 figure was 9.1%, whereas that officially published
was 6.2%).
Second-quarter EBT was EUR 839,000; the adjusted figure for Q1 was EUR
1,500,000. This results in increased deferred tax liabilities, which are
distributed proportionally over the first two quarters. Whereas the tax rate for
the first quarter dropped to 36.8 percent (published as 44.3%), it rose to 70.6
percent in the second quarter. This difference is due to the fact that deferred
tax assets were not formed in all companies in the second quarter and that as a
result of loss carryforwards from prior years, for which no deferred tax
expenses had been charged, there was a very low tax rate for the first quarter.
The tax rate for first-half 2004 totals 48.8 percent and is in line with
expectations.
Net financial income for the second quarter amounted to EUR 88,000, considerably
lower than the prior-quarter figure of EUR 208,000. The main reason: dwindling
interest income and revenue from other securities, which due to market trends in
Q2, came to EUR 81,000 and was thus down on the Q1 figure of EUR 153,000. As
expected there was a surplus in income from exchange rates differences, which
totaled EUR 23,000 (Q1/04: EUR 66,000).
Novasoft posted net income for the second quarter of EUR 200,000 (Q1/04 reported
figure: EUR 525,000, adjusted figure EUR 871,000).
Outlook
In conjunction with further market recovery (which, given the number of projects
about to be closed out, appears to be very realistic) the forecast increase in
revenues as well as a consequent marked rise in the EBIT margin by the end of
the year still appear to be achievable goals.
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WKN: 677890; ISIN: DE0006778905; Index:
Listed: Geregelter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin-
Bremen, Düsseldorf, Hamburg, Hannover, München und Stuttgart
040704 Aug 04
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