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Embargoed Release: 07:00hrs Friday 27 March 2009

OneClickHR plc

 ('OneClickHR' the 'Group')

Preliminary Results for the year ended 31 December 2008 

OneClickHR, the AIM quoted HR software, training services and solutions provider, is pleased to announce its preliminary results for the year ended 31st December 2009 (the 'period').  

Highlights: 

• Pre-tax profits of £304,000, ahead of market expectation (2007: pre-tax loss of £46,000). 

• Earnings per share (both basic and diluted) at 0.19p (2007: loss per share 0.03p)

• Cash balances strengthened to £861,000 (2007:£422,000)  

• 73 new HR.net clients added in 2008 (2007: 48)

• New blue chip clients including: Hilton Hotels, Savills, Foster Wheeler, EMI Music, Rentokil Initial

Frank Beechinor, OneClickHR's chief executive officer, commented:

'In 2008, we achieved our goals of profitability and cash generation. Our HR software solution HR.net is attracting new multinational corporations and its SaaS offering maintains strong appeal. We remain careful with our costs and combined with our strengthened cash balances and debt-free position, we believe we can continue to grow successfully in 2009.'

Enquiries:

OneClickHR plc  www.oneclickhrplc.com                                    +44 (0) 844 7700 250

Frank Beechinor, CEO / Stephen Oliver, CFO

KBC Peel Hunt Ltd, Nominated Adviser and Broker                  +44 (0)20 7418 8900

Oliver Scott / Oliver Stratton

Hansard Group                                                                               +44 (0) 207 245 1100

Adam Reynolds / Vikki Krause

About HR.net

Designed and developed by OneClickHR plc the software was designed for rapid deployment in a standard web enabled environment, all users need is an internet browser.

Available as a traditional licence purchase or as a SaaS (Software as a Service) solution HR.net provides total flexibility to enable clients to configure their entire HR processes to meet local, national, international and company specific requirements. Annual Appraisals, Employee Self Service, E-Recruitment, Performance Management, Talent Management and Salary Reviews can all be swiftly implemented with the confidence of using up to date and accurate data .

Chairman's statement

Financial review

I am delighted to report that in 2008 the Group delivered its stated financial objectives of profitability and cash generation whilst simultaneously developing and expanding the market for both HR.net, our flagship enterprise level HR solution, and the underlying HR.net technology. 

During the period, the Group recorded a pre-tax profit of £304,000 compared to a loss of £46,000 in 2007. The Figure represents a siginificant improvement and the turnaround was driven by ensuring our cost base was commensurate with our revenues. This re-alignment was carefully  undertaken to enable the maintenance of an operational infrastructure that will support progress and growth in the future.

Our commitment to the future growth of the business is evident in our continued spending on software development. At 13% of total revenue (2007:14%) we believe that investing in this level of innovation and development is important to our customers and highlights our commitment to work and grow in partnership with them.

In total terms, revenues decreased to £5,851,000 for the year (2007: £6,338,000). However the decrease was partly anticipated; 2007 revenues included a one-off licence sale to a large payroll provider. On a like-for-like basis, excluding this exceptional item, revenues advanced by 7%. The initial sale of a software licence leads to additional revenues from implementation consultancy services and annual support fees. Both our Professional Service and Support teams were more active as the customer base they support grew.

In the period, our balance sheet strengthened substantially; cash generation was £424,000 (2007: £80,000) and year-end cash balances grew to £861,000 (2007: £422,000). The Group remains entirely debt-free, establishing a healthy position to weather the current economic conditions.

Operating review

In spite of the economic turbulence experienced during 2008 and, in particular, the second half of the year, the market for HR.net remained steady. Businesses recognise the need to reduce costs and increase efficiencies. In many organisations, workforce performance improvements can have a major impact on their ability to trade successfully at this time.

In 2008, our HR.net user base increased with the addition of 73 clients (48 new clients in 2007). As you would expect from an enterprise solution we have secured an increased number of respected clients. These included Savills, the UK's largest property management company; Foster Wheeler the international engineering services group with 9,000 employees worldwide; Matheson Ormsby Prentice, Ireland's largest law firm; ED&F Man, the commodities trading company; Rentokil Initial and EMI Music. Many other customers have also chosen HR.net for its ease of use, flexibility and extensive functionality.

These wins confirm our increased confidence in the competitiveness of HR.net in the enterprise HR software market. The geographical and sector spread of customers achieved in 2008 demonstrates that we are not overly dependent on any one vertical market. Many of our customers are multi-country deployments further strengthening our assertions regarding HR.net's reputation as an international HR solution, providing a very clear differentiator from competitor products.

We already work with companies in Australia, the Caribbean, Europe and the Middle East. During the year we secured our first HR.net customer in New Zealand through our local partner. Our model of working with local partners in overseas territories is one we believe will continue to be effective going forward as it reduces both the risk and the cost of expanding our addressable market.

We continue to build our SaaS ('Software as a Service') offering; as recently announced we signed a significant deal with Hilton Hotels on this basis to meet their needs as they undertake substantial business process change. We have also migrated customers from our older technology, Personnel Manager and Personnel Director, to HR.net, building our annuity revenue from these customers. 

During the year we released the latest versions of HR.net on schedule and our development organisation in India has gone from strength to strength. The implementation consultancy services team which operates through an onshore/offshore model performed particularly well with increased revenue and profitability and with a strong flow of repeat business from existing customers. The client feedback for our support desk services was again very complimentary.

Outlook

During 2009, the current HR.net offering will be re-branded as HR.net Enterprise and we will introduce HR.net Lite, HR.net Express and HR.net Professional. These new products will replace our legacy products which have historically been aimed at small- and medium-sized enterprises. The principle target audience for these products will be our large established customer base who currently use Personnel Manager and Personnel Director, but who have not yet migrated to HR.net. Having such a large customer base for these new products is expected to mitigate the need to solely source new business in the current difficult economic climate.

We also plan to release these new products to the general market providing us with a low cost offering where budget is a priority ahead of functionality and flexibility. We expect sales of the new products to add to our recurring revenue and consulting revenue streams.

The Group will continue to enter new territories through the strategy of identifying and working with strong local partners who already operate with complementary products. This minimises our costs of market entry and maximises the incremental revenues from these markets. 

In 2009, we expect that prospective clients' overall budgets for enterprise technology will reduce, however buyers will give greater consideration to vendors such as ourselves. Our established credentials as specialists in the HR field, supported by a blue chip client list confirm that we have a strong proposition for customers. The Group offers a combination of powerful technology, attractive pricing and a low cost base. These factors combined with our high levels of product investment put us in a very strong position compared to other vendors in the enterprise market. Our ability to take these advantages into a new, lower price point market means that we are well prepared for the coming year. 

Lord Sheppard of Didgemere

Chairman

26 March 2009

Consolidated Income Statement 

for the year ended 31 December 2008

	Notes	2008	2007
		£'000	£'000
Revenue	3	5,851	6,338
Costs of sales		(3,091)	(3,593)
Gross profit		2,760	2,745
Administrative expenses		(2,470)	(2,813)
Operating profit / (loss)		290	(68)
Finance income		14	22
Profit / (loss) before taxation		304	(46)
Tax expense	5	(24)	-
Profit / (loss) attributable to shareholders		280	(46)
Earnings / (loss) per ordinary share	6
Basic		0.19p	(0.03)p
Diluted		0.19p	(0.03)p

The above results relate entirely to continuing operations. 

Consolidated Statement of Recognised Income and Expense
for the year ended 31 December 2008

		2008	2007
		£'000	£'000
Currency translation differences		40	74
Net income recognised directly in equity		40	74
Profit / (loss) for the financial year		280	(46)
Total recognised income and expense for the year attributable to shareholders		320	28

Consolidated Balance Sheet as at 31 December 2008

	Notes	2008	2007
		£'000	£'000
ASSETS
Non-current assets
Intangible assets	7	194	155
Property, plant and equipment		176	217
		370	372
Current assets
Inventories		18	31
Trade and other receivables	8	2,025	1,969
Cash and cash equivalents		861	422
		2,904	2,422
LIABILITIES
Current liabilities
Trade and other payables	9	1,768	1,714
Current tax liabilities		37	-
Total liabilities		1,805	1,714
TOTAL NET ASSETS		1,469	1,080
EQUITY
Capital and reserves attributable to the Company's equity holders
Share capital	10	1,487	1,487
Share premium	10	10,922	10,922
Cumulative translation reserve	10	80	40
Retained earnings	10	(11,020)	(11,369)
TOTAL EQUITY	10	1,469	1,080

Consolidated Statement of Cash Flows

for the year ended 31 December 2008

	Notes	2008	2007
	Notes	2008	2007
		£'000	£'000
Operating activities
Net cash inflows from operations	11	880	422
Interest received		14	22
Interest paid		-	-
Taxation paid		(65)	-
Net cash from operating activities		829	444
Investing activities
Purchase of property, plant and equipment		(42)	(82)
Purchase of intangible assets		(25)	(35)
Capitalised development expenditure		(338)	(247)
Net cash used in investing activities		(405)	(364)
Net increase in cash and cash equivalents		424	80
Effects of exchange rate changes on cash and cash equivalents		15	4
Cash and cash equivalents at the beginning of period		422	338
Cash and cash equivalents at end of period		861	422

 

As required by the AIM regulations, the consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.

OneClickHR plc is the Group's ultimate parent company. It is incorporated in England and has its registered office at 2 Bromley Road, Beckenham, Kent BR3 5JE. The Group operates from the registered address as well as locations in Weston super Mare (UK), Stoke on Trent (UK) and Chennai (India).

The shares of OneClickHR plc are listed on the AIM market which is regulated by the London Stock Exchange.

The financial statements for the year ended 31 December 2008 were approved by the board of directors on 26 March 2009. 

The announcement set out above does not constitute a full financial statement of the group's affairs for the year ended 31 December 2008. The group's auditors have reported on the full accounts for the year ended 31 December 2008 and have issued an unqualified audit report. The full accounts have yet to be delivered to the Registrar of Companies.

The annual report and accounts will be posted to all shareholders and be available at www.OneclickHRplc.com in due course.

The principle accounting policies of the group are set out in the annual accounts for the year ended 31 December 2007. There have been no material changes in the accounting policies during 2008. 

 

The Group manages its operations on the basis of the products and services supplied to customers. It considers that the sale of software, its implementation and the subsequent provision of customer support forms the primary business segment. The primary business segment accounts for in excess of 90% of revenues, costs and assets. Accordingly the Group has not disclosed segmental information about its operations analysed by business segment.

Geographically, the Group operates from offices in the UK and India, with its sales force based in the UK serving all markets. Services are supplied to customers from both the UK and India.

	2008	2007
	£'000	£'000
Sales to external customers by location of customer
United Kingdom	5,743	5,875
European Union (excluding UK)	73	236
Rest of the World	35	227
	5,851	6,338

 

Included within Cost of Sales are the costs that the Group has incurred in relation to the design, programming, testing and general development of software products.

	2008	2007
	£'000	£'000
Actual costs incurred	809	945
Amounts capitalised	(338)	(247)
Amortisation for period	303	206
Amount charged to income statement	774	904

 

At 31 December 2008 there is a deferred tax asset in relation to carried forward trading losses in the UK of approximately £2.6m (2007: £2.6m). The group also has deferred tax assets in the UK of £102,000 (2007: £117,000) arising from the difference in accounting and tax treatment of plant, property and equipment assets. These deferred tax assets have not been recognised in the accounts as the Group cannot be certain that it will be sufficiently profitable in the future to utilise them.

The taxation charge in the consolidated income statement arises from overseas taxation that cannot be offset against the tax losses of the group.

 

Earnings per share have been calculated by dividing the net result attributable to shareholders by the weighted average number of shares in issue during the year. For diluted earnings per share, the weighted average number of shares in issue is adjusted for employee share options that are in issue and expected to vest. During 2007 the option exercise prices were in excess of the average open market value of the ordinary shares and therefore there was considered to be no dilution arising from share options.

	2008	2007
	£'000	£'000
Earnings
Result for the year attributable to shareholders	280	(46)
	Number ('000)	Number ('000)
Weighted average number of shares in issue
For basic earning per share	148,760	148,760
Potentially dilutive shares	618	-
For diluted earning per share	149,378	148,760
	Pence	pence
Earnings per share
Basic	0.19p	(0.03)p
Diluted	0.19p	(0.03)p

		Purchased software	Capitalised Development Expenditure	Total
		£'000	£'000	£'000
Cost
At 1 January 2007		78	158	236
Additions		35	247	282
Net exchange differences		6	-	6
At 31 December 2007		119	405	524
Additions		25	338	363
Net exchange differences		11	-	11
At 31 December 2008		155	743	898
Amortisation
At 1 January 2007		63	77	140
Amortisation		18	206	224
Net exchange differences		5	-	5
At 31 December 2007		86	283	369
Amortisation		24	303	327
Net exchange differences		8	-	8
At 31 December 2008		118	586	704
Net Book Value
At 1 January 2007		15	81	96
At 31 December 2007		33	122	155
At 31 December 2008		37	157	194

 

			2008	2007
			£'000	£'000
Trade receivables			1,161	1,478
Accrued income			513	234
Other receivables and prepayments			351	257
			2,025	1,969

			2008	2007
			£'000	£'000
Trade payables			140	205
Accruals and other payables			397	325
Payroll and sales taxes			279	235
Deferred income			952	949
			1,768	1,714

 

	Share  Capital	Share premium	Cumulative translation reserve	Retained Earnings	Total  Equity
	£'000	£'000	£'000	£'000	£'000
Balance at 1 January 2007	1,487	10,922	(34)	(11,374)	1,001
Loss for the year	-	-	-	(46)	(46)
Currency translation	-	-	74	-	74
Total recognised income and expense for the year	-	-	74	(46)	28
Share based compensation	-	-	-	51	51
Balance at 31 December 2007	1,487	10,922	40	(11,369)	1,080
Profit for the year	-	-	-	280	280
Currency translation	-	-	40	-	40
Total recognised income and expense for the year	-	-	40	280	320
Share based compensation	-	-	-	69	69
Balance at 31 December 2008	1,487	10,922	80	(11,020))	1,469

 

Reconciliation of profit / (loss) after tax to cash generated from operations

			2008	2007
			£'000	£'000
Profit / (loss) profit after tax			280	(46)
Net interest receivable			(14)	(22)
Amortisation and depreciation			422	325
Tax expense			24	-
Movements in inventories			13	11
Decrease in receivables			22	382
Increase / (decrease) in payables			64	(279)
Share based compensation			69	51
Net cash inflow from operations			880	422

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