Interim Results

RNS Number:8266L
Mediasurface PLC
04 May 2005


                                Mediasurface plc

                 Results for the 6 Months ended 31st March 2005

Mediasurface plc, the AIM listed Content Management Software Author and Vendor,
announces unaudited results for the 6 months ended 31st March 2005.

Chairman's Statement
For the six months ended 31st March 2005

I am pleased to announce the results for the six months ended 31st March 2005.
The results which were ahead of expectations clearly demonstrate that our
strategy to empower the business user of Web Content Management Systems is
proving to be a success.

At the time of my previous statement in the Annual Report I indicated that
Morello, the companies innovative software product, was set to drive revenue
growth, I am pleased to report this has indeed been the case over the past 6
months as is evidenced by a number of major wins including Inter-Continental
Hotels Group, Citigroup, The Home Office, ESPN and Aegon Holdings.

Group revenues for the first six months increased by 29% to #3.66 million (2004
: #2.83 million). The Group achieved a pre-tax profit of #0.14 million (2004 :
Pre-tax Loss #0.15). Net Assets stood at #1.67 million compared with #1.46
million at 30th September 2004.

In-line with our stated policy, earnings for the foreseeable future will be
re-invested to finance the growth of the business. The Director's therefore do
not recommend the payment of a dividend.

On the 7th April 2005 the company concluded the acquisition of Class-Act BV in
the Netherlands. The acquisition brings to Mediasurface a new software product
aimed at Small to Medium Enterprises, being a market the company has hitherto
not addressed. The acquisition is expected to be modestly profit enhancing and
will complement the company's product portfolio.

Prospects for the Company as a whole remain positive. Morello continues to
attract significant interest and major new sale opportunities exist for the
second half of the financial year. The Board remains committed to enhancing
shareholder value and believe the Company is well placed to grow profitably.

Michael Jackson
Chairman
3rd May 2005

Chief Executive's Report
For the six months ended 31st March 2005

As you will appreciate from the Chairman's statement the results are ahead of
market expectations both in terms of revenue and profitability. Behind these
headline numbers the company is pleased to report that all of its revenues
streams showed growth on the same period last year with:

   * licence sales up 36%,
   * consultancy and training up 44%
   * recurring revenues on an annualised basis up from #1.72m to #1.91m, up
     11%.

These growth figures evidence the impact of the company's R&D efforts on its
competitiveness in the market as is evidenced by significant new business wins
with blue chip customers such as Citigroup, Inter-Continental Hotels Group,
Aegon Holdings, ESPN and The Home Office. It is my firm belief that these
organisations selected Mediasurface because of our innovative flagship product
Morello which clearly differentiates us in the market. Our business strategy of
developing and marketing innovative applications targeted at the business user
yet robust enough to be used to build and run very significant web-applications
has certainly paid off over the period and the average new business sales
transaction has more than doubled.

The company intends to continue with this strategy to power growth and has an
exciting series of product releases planned for the second half of the company
year. Beyond this further releases can be expected which again continue to
demonstrate useful innovation and separation from our competitors.

As part of the company's non-organic growth strategy on April 7th 2005 the
company acquired Class-Act BV, a software developer based in the Netherlands.
The company has already developed a Web Content Management application suitable
for Small to Medium sized Businesses (SMB's) and has approximately 80 customers
in the Netherlands. The acquisition is expected to be immediately, though
modestly, earnings enhancing. Strategically the company has gained access to the
SMB market through this acquisition as well as having an ideal solution to offer
on a hosted rental or ASP basis to this market. The SMB market does appear to
have a preference for hosted solutions of this type to diminish the risks of
having to maintain their own infrastructure and associated skill sets. It is a
proven product and when enhanced through Mediasurface's experience in creating
Business focussed tools and when marketed through Mediasurface's emerging
channel network is expected to make a sound contribution to our recurring
revenues.

I trust you will enjoy reading the detail of our interim results which I believe
make good reading and should provide some comfort that your investment has been
well rewarded through the efforts of the management team and employees.

Lawrence Flynn
Chief Executive Officer
3rd May 2005


Consolidated Profit & Loss Account
For the 6 months ended 31st March 2005

                                      6 Months to     6 Months to   12 months to
                                  31st March 2005 31st March 2004 30th September
                                      (unaudited)       (audited) 2004 (audited)
                              Note              #               #              #

Turnover                                3,661,081       2,839,562      5,403,482
Cost of Sales                           (104,802)        (75,083)      (142,533)

Gross Profit                            3,556,279       2,764,479      5,260,949

Administrative Costs                  (3,432,373)     (2,910,367)    (5,993,342)

Operating Profit                          123,906       (145,888)      (732,393)

Interest Receivable and similar            23,480           2,050          7,603
income
Interest Payable                          (8,639)         (9,628)       (12,604)

Profit/(Loss) on Ordinary                 138,747       (153,466)      (737,394)
Activities

Tax on Profit/(loss) 2                     50,000         227,044        331,273

Profit/(Loss) on Ordinary                 188,747          73,578      (406,121) 
Activities after Tax

Earnings per Share - Basic 3                 0.2p            0.1p         (0.7)p
Earnings per Share - Diluted 3               0.2p            0.1p         (0.6)p



Consolidated Balance Sheet
As at 31st March 2005
                              Note     31st March      31st March 30th September
                                             2005            2004           2004 
                                      (unaudited)       (audited)      (audited)
                                                #               #              #

FIXED ASSETS
Goodwill                                        -          22,895              -
Tangible assets                           180,777         177,044        177,969

                                          180,777         199,939        177,969

CURRENT ASSETS
Debtors                                 2,786,869       1,629,410      2,173,866
Cash at bank and in hand                1,040,181         201,540      1,395,558

                                        3,827,050       1,830,950      3,569,424



CREDITORS: amounts falling due        (2,330,484)     (1,679,958)    (2,276,041)
within one year

NET CURRENT ASSETS                      1,496,566         150,992      1,293,383

TOTAL ASSETS LESS CURRENT               1,677,343         350,931      1,471,352
LIABILITIES

CREDITORS: amounts falling due           (11,428)        (16,623)       (14,384)
after more than one year

NET ASSETS                              1,665,915         334,308      1,456,968

CAPITAL AND RESERVES
Called up equity share capital            764,757      13,474,032        764,738
Share premium account                   9,574,782       8,317,666      9,574,782
Capital Redemption Reserve             13,083,244               -     13,083,244
Merger reserve                         27,297,412      27,297,412     27,297,412
Profit and loss account              (49,054,280)    (48,754,802)   (49,263,208)

SHAREHOLDERS' FUNDS                     1,665,915         334,308      1,456,968



Consolidated Cashflow Statement
For the 6 months ended 31st March 2005

                                      6 months to     6 months to   12 months to
                                  31st March 2005      31st March 30th September
                                      (unaudited)            2004           2004
                                                #       (audited)      (audited)
                                                                #              #

Net cash outflow from operating         (389,473)       (795,492)    (1,170,202)
activities

Returns on investments and servicing       14,841         (7,578)        (5,001)
of finance
Taxation                                   50,000         227,044        227,044
Capital expenditure                      (30,764)        (48,556)       (80,816)
                                                                        
Cash outflow before financing           (355,396)       (624,582)    (1,028,975)

Financing                                      19        (53,284)      1,572,606

Increase/(decrease) in cash in the      (355,377)       (677,866)        543,631
year

Notes:

1. The interim financial information for the six months ended 31st March 2005
has been prepared in accordance with applicable United Kingdom accounting
standards and under the historical cost convention in accordance with the
Group's accounting policies published in the Annual Report for the year ended
30th September 2004.

The financial information for the 6 months ended 31st March 2004 has been
extracted from audited accounts prepared for and included in the Admission
document published 26th August 2004.

The financial information set out above does not constitute the company's
statutory accounts as defined by section 240 of the Companies Act 1985. It is an
extract from the accounts for the year ended 30 September 2004 which have been
filed with the Registrar of Companies. The auditors' report was unqualified. The
auditors' report does not contain a statement under either section 237(2) or (3)
of the Companies Act 1985. The group's auditors have reported on those accounts
as required by section 235 of the Companies Act 1985.

2. The tax on loss on ordinary activities represents Research & Development tax
credits. For the purposes of the Interim Accounts for the 6 months ended 31st
March 2005 an estimated Research and Development tax credit has been recognised.

3. Earnings per Share
The loss per ordinary share is calculated by reference to the profit/(loss)
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during each period as follows:

                                      6 months to     6 months to   12 months to
                                  31st March 2005 31st March 2004 30th September
                                      (unaudited)       (audited) 2004 (audited)
                                                #               #              #

Profit/(Loss) for the year                188,747          73,578      (406,121)

Basic - Weighted average number        76,474,372      59,356,184     61,450,900
of shares
Basic - Profit/(Loss) per Share              0.2p            0.1p         (0.7)p

Fully diluted - Weighted average       83,605,770      59,356,184     62,154,270
number of shares
Fully diluted - Profit/(Loss) per            0.2p            0.1p         (0.6)p
Share


4. A copy of the unaudited interim accounts of the Company will be sent to all
shareholders within the next 4 weeks.


For further information please contact:

Lawrence Flynn                 Chief Executive Officer
David Deacon                   Chief Financial Officer

Telephone      : [phone]
Fax            : 01635 262001
Address        : Mediasurface House
                 Newbury Business Park
                 London Road
                 Newbury RG14 2QA



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