Back office vendor Rolfe & Nolan is reporting a £0.7 million loss before tax for the six months ended 31 August 2001. Redundancy costs of £0.4 million and an initial outlay of £0.8 million against the next generation Merlin project helped drag the company into the red.
The results reflect a difficult period for Rolfe & Nolan which replaced its chief executive John Lodge in September amid board-level concerns about the company's ability to win client support and funding for the Merlin project - a Web-enabled version of its product suite considered critical to the company's future success.
In the six months to 31 August 2001 the group achieved an operating profit before operating exceptionals and goodwill amortisation of £1.2m (2000: £0.4m), on turnover of £12.0m (2000: £12.3m). Loss before tax was £0.7m (2000: profit £1.0m).
During the period the group signed twelve new or renewal licences including two financial exchange licences. These contribute £2.3m collectively and will add £2.2m to recurring revenues during the next 5 years. The level of recurring revenues across the group was sustained at £7.8m, which now represents some 65% of sales.
A dip in revenues and profits in Europe was compensated for by a slightly stronger performance in the US, where profits held steady at £0.2 million. Rolfe & Nolan says it is reviewing its business activities in Singapore where difficult trading conditions have prevented the company from completing a number of prospective licence sales.
Reporting on progress with Project Merlin, Rolfe & Nolan says the first modules for the new system will be available some time next year. The system is being constructed in a modular form to provide an evolutionary migration path for the group's 300-strong customer base.
"The system will operate on a 24-hour/7 days per week basis with multi-location and multi-time zone functionality and offer our clients cost savings through its workflow facilities," states the company.