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24 February 2009

Invu plc

Trading Update 

The Board of Invu plc (LSE, AIM: INVU) provides the following update on trading following the end of its financial year to 31 January 2009.  

Since its announcement on 22 December 2008, Invu Plc ('Invu' or the 'Group') has completed the cost cutting exercise and reduced operating overheads by 20%, equating to annual savings of £1.2m. A review of the Group's revenue recognition policy, in conjunction with its auditors, has resulted in the adoption of a new policy as from 1 February 2009 where revenue will be recognised on the earlier of either cash payment or shipment of product for a specific end user order. The Board believes that this revenue recognition policy will bring greater visibility of the performance of the Group's reseller channel.

At the same time as adopting this new policy, the Board has decided that significant other measures are necessary to commence the new trading year from an unequivocal and unhindered starting point. To this end, the Group plans to make £7.3m of debt provisions against all debts that are greater than 6 months old and for which payment cannot be guaranteed by April 30, 2009. These provisions will appear in the Group's profit and loss account for the year to 31 January 2009 and will result in it reporting a loss for the year of approximately £9.3m on sales of approximately £3.8m. The Group continues to operate within its banking facilities and the cash position is improving.

Trading to date in calendar 2009 is in line with management's expectations. However, there is no material change in the underlying market conditions and customers are still taking longer to make purchasing decisions.  The Group's Series 6 product is now receiving very high satisfaction levels among the Group's reseller and customer base, which continues to grow. A number of additional integration products will be added to the product suite to further enhance sales opportunities.  

The Board is also exploring further revenue enhancing opportunities with regards to business continuity managed services and a SaaS document management suite, both based on monthly subscription models. Negotiations are also underway with potential distribution partners and the Group plans the imminent launches of Invu for Enterprise and Invu for Accountants.

  

Outlook

The Board fully recognises the impact of the global economic downturn and the challenges that the Group faces. Nevertheless the Board is heartened by the continuing recognition of the benefits of the Group's product to its core customer base, the continuing demand for document management solutions in response to regulatory and compliance requirements, as well as recent indicators (particularly from IDC*) that the document technology market sector is still growing at a significant rate.

Despite the extremely disappointing performance for the year ended 31 January 2009, the Board is confident that the cost cutting undertaken and changes announced to the revenue recognition policy will provide the Group with a sound corporate structure. This should provide a core from which the business, with additional strategies of complementary products and new distribution opportunities, can develop, with a view to returning the Group to growth and profitability as soon as reasonably practicable.  However, the Board remains mindful of the difficult trading environment and continues to assess the Group's cost base and its strategy relative to its operational requirements.

Daniel Goldman, Invu Chairman, said, 

'We have taken the first steps in the last couple of months to strengthen the business. We have now reduced costs across the Group and have adopted a revenue recognition policy which will provide greater visibility of trading across the Group. Although the economic backdrop continues to be challenging, the Board believes that the recent measures taken will put the Group in a better position for the year ahead and beyond.'

*IDC, Worldwide Capture and Inage Management Software 2008-2012 Forecast and Analysis, Melissa Webster, December 2008

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Enquiries:

Invu plc	01604 859893
Daniel Goldman, Non Executive Chairman
Bernard Fisher, Interim CEO
John Agostini, CFO
Financial Dynamics	020 7831 3113
Juliet Clarke / Haya Chelhot / Emma Appleton
Arbuthnot Securities	020 7012 2000
Tom Griffiths  / Ben Wells

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