Financial highlights
- Total turnover of £49.8m (2003: £56.0m)(1)
- Adjusted pre-tax profit of £1.7m (2003: £2.6m)(2)
- Reported pre-tax loss of £4.8m (2003: restated loss of £3.1m)(3)
- Adjusted diluted earnings per share of 0.5p (2003: 0.9p)(3)
- Reported diluted loss per share of 2.3p (2003: restated loss per share of 1.7p)(3)
- Net cash of £12.4m (2003: £14.7m)
- 2004 and 2005 turnover visibility just over £95m and around £65m respectively(4)
Operational highlights
During the period Marlborough Stirling secured major mortgage software contracts for Bradford & Bingley and CIBC as well as life and pensions outsourcing new business wins with Royal Liver and Chesnara. Additional outsourced review work was secured with Sun Life Financial of Canada.
New electronic trading services were launched on The Exchange’s Exweb portal and Exweb’s subscriber numbers were 19,926 compared to 18,219 and 18,401 at 30th June 2003 and 31st December 2003 respectively. Exweb’s quote volumes in the first half of 2004 were 44m which compares with 49m and 42m in the first and second halves of 2003 respectively
Marlborough Stirling realigned its business units to provide greater clarity of responsibility and accountability. As a result, headcount was reduced by 70 and three loss-making operations have been closed in Italy, South Africa and Spain, leading to combined annualised savings of over £3m from the second half of 2004.
Strategic review
For each of its three business units, Marlborough Stirling undertook a thorough review of its positioning by questioning customers, prospects and competitors. The company formulated views on recent market trends and has looked at potential drivers for future change. The main conclusions were:
Chairman
Paul Fullagar has been appointed to the position of non-executive chairman and consequently Huw Evans will be retiring from the position of chairman and from the Board, effective from tomorrow. Paul has been a member of the Board since 2000 and is currently the senior independent non-executive director of the Group. As former Chairman of Staffware plc and Finance Director of Ellerman Lines plc he will provide huge experience and proven leadership.
Commenting on the results, Mike O’Leary, chief executive, said:
“First half results are in line with market expectations. Our strategic review has identified a large and exciting opportunity in outsourcing for our life and pensions business and a transition has begun to take advantage of this. Until the transition is complete, we continue to carry forward some uncertainty in predicted short-term life and pensions software revenues. Focusing on outsourcing will enable us to attack much larger markets and generate growth and greater stability of earnings across the Group as a whole. Our mortgage business and The Exchange have both made good progress.”
