RS2 Software registers 67% increase in revenue in 2011 interim
Software company RS2 Software plc saw its revenue for the first six months of the year increase by 67% over the same period of 2010 to €4,737,968.
Mostly attributable to licence fees concluded during the period, as at end-June 2011 the company met and exceeded projections for new licence contracts for the year.
Licence fees inherently yield higher profit margins than other sources of revenues and consequently this revenue mix has a significant impact on profitability.
Gross profit for the company increased from €646,012 in 2010 to €2,168,436 in 2011. Net profit before tax increased from €266,223 in 2010 to €1,699,157 in 2011.
Gross profit margin for the period under review was 46%, compared with 23% in 2010. The net pre-tax profit margin was 35%, compared with 9% in 2010. The improvements in the profit margin is attributable to the increases in cost of sales not being directly proportionate to increases in revenue.
Net profit before tax for the Group amounts to €1,557,923. Earnings before interest, tax, deprecation and amortisation for the Group stood at €1,933,481, compared to €444,418 for the same period in the previous year. Earnings per share for the Group stood at €0.036 respectively, up from €0.008 in 2010.
But the directors said it was not expected that the significant increases in revenue and profitability be maintained at the same levels as those of the first six months. “We remain confident that more new business can be brought into the company throughout 2011, and expect that this year will compare very well to the results of 2010.”
During the period, RS2 continued to invest in its US subsidiary, albeit with a cautious approach. While the subsidiary remains a loss-making entity, it continues to generate and enhance brand recognition of Bankworks with the US market. As a direct result, the company said it had managed to sign on another US client, processing substantial volumes of transactions by using the Bankworks platform in the United States.
Similar results are also being achieved in the Asian region through the RS2 subsidiary in the Philippines. Whilst this office was initially intended to serve as a cost-efficient support centre for the core development centre in Malta and our clients, it has no also developed into a base from where to market Bankworks in the region.
