IEN.L

Intelligent Environments Group plc

Pre-close trading update for the year ended 31 December 2009

Intelligent Environments Group plc (AIM:IEN) ('iE' or 'the Company'), the online financial services software provider, today announces a trading update for the Year ended 31 December 2009.

As previously reported, due to the recent merger of the Chelsea Building Society and the Yorkshire Building Society, a significant order for our IE NetFinace platform was cancelled. As a result, revenues for the full year are expected to be £6.4m with estimated operating profits of £1.0m.

Despite this project cancellation, I am pleased to report that significant progress was achieved across the group. During the period, cash generation remained strong with our cash position at the year-end improving 10% to £1.1 million. This was underpinned by growing recurring revenues, which are now 30% of total revenues up 5% on 2008 and driven by our NS&I saving solution which went live in Quarter 4 2009. 

Our increased investment in R&D meant we were able to launch into 2 new markets in the year, e-statements and mobile banking. Both initiatives have sizeable potential to drive future revenue growth and have resulted in either customer orders or well qualified prospects. The increase in sales and marketing expenditure is responsible for us winning 4 new customers in 2009 and building a strong pipeline of business for 2010.

As we move into 2010, financial institutions will continue to cut costs and upgrade their Online and Mobile banking channels in order to communicate and cross sell to their customers. We are well placed to service this growing need and, as the economy recovers, we will benefit accordingly. 

2010 has started positively with one of our major customers committing to a V4 upgrade involving a 3 year licence extension. The long awaited launch of the Orange credit card happened in early January and has received much praise from the financial press for its innovative features. 

As a result of the new client wins in 2009, a full contribution expected from NS&I as well as additional mobile banking and e-statements opportunities, we anticipate an important uplift in recurring revenues in the year ahead 

Preliminary results will be announced in April 2010.

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