Half-year operating profits at futures and options back office systems vendor Rolfe & Nolan have dropped by almost half to £602,000 from £1.19 million in the equivalent period last year.
Turnover in the six months to 31 August 2002 was also down at £10.7 million against £12 million in 2001. Net of charges and interest, profit before tax was £77,000 (2001: loss of £680,000).
Describing the results as "encouraging" Tim Hearly, Rolfe & Nolan chairman notes: "We expected that licence sales would occur predominantly in the second half of the year and, while this remains the case, we have achieved six new or renewal signings in the first six months."
He also points to continued strong cash flow and a subsequent reduction in the group's net borrowings to £1.8 million (August 2001: £3.2m, February 2002: £3.2m). "We also have substantial unused banking facilities," notes Hearly.
As a result, the group has decided to press ahead with funding the modular development of the next-generation Merlin technology project from its own resources, with a view to completing the project within the next two years.
The project was initially launched on the back of secured funding from prospective customers. The first module was delivered to sponsor banks UBS Warburg and Deutsche Bank for acceptance testing last month. Work has begun on the second module with a view to completion by the end of the year. One sale of this module has already been agreed and talks are at an advanced stage with a second client, says Rolfe & Nolan.
The success of Merlin is judged critically important to Rolfe & Nolan's future, providing the vendor with a new generation of Web-based technology and the foundation to move into new asset classes alongside its traditional stronghold in futures and options processing.