Diligent Preliminary Half year announcement
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Diligent Board Member Services INC (DIL) | 12:54 pm, Thursday 28 August 2008 | DIL | 0.150 |
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Diligent Board Member Services Inc
Results for announcement to the market
Reporting Period
Six months to 30th June 2008
Previous Reporting Period
Three months to 31st December 2007
Amount (000s)
Percentage change
Revenue from ordinary activities
USD 1,292
% n/a
Profit (loss) from ordinary activities after tax attributable to security
holder.
(USD 5,853)
% n/a
Net profit (loss) attributable to security holders
(USD 5,853)
% n/a
Interim/Final Dividend
Amount per security
Imputed amount per security
No dividend is payable
Record Date
Not applicable
Dividend Payment Date
Not applicable
Comments:
[To be followed by the balance of the information required in the report
pursuant to Appendix 1]
Diligent Board Member Services Inc
Floor 4
69 Cambridge Terrace
Christchurch
Phone: 03 977 5599
Fax: 03 366 1953
www.boardbooks.com
20 August 2008
Chairman's Half Year Report
It is our pleasure to present the following half year results of Diligent
Board Member Services Inc. (Diligent) for the period ending 30 June 2008.
The period represents our first six months of trading as a company listed on
the New Zealand stock exchange. Whilst our performance is significantly
ahead of where we were at the same time last year, we are still
disappointingly behind where we had hoped to be when we listed on 12 December
2007.
As a US based company, we are acutely aware of the impact the global credit
crunch is having on organisations. This has certainly had an influence on our
business leading to an announcement in May that we no longer believed that we
would be able to meet the 2008 financial year sales and growth projections
set forth in our listing Investment Statement and Prospectus.
Unfortunately, that still remains the case as market conditions in our
biggest market, the US, continue to be challenging and are likely to remain
so for some time yet. However, there are encouraging signs that give the
board confidence going forward that our sales strategies will bear fruit in
reasonable time.
Highlights from the first six months of trading in our 2008 financial year
were:
A net 43 licenses added in the six months to 30 June 2008 compared to
11 in the same period a year earlier
A pickup in sales momentum after a slow start to the financial year,
reflecting that the benefits from our investment in sales and marketing were
starting to take effect - Diligent now has a fully trained sales force of 16,
which compares to 3 at the same time last year Net sales of $US1.29 million
in the first half (2007/$US789,000) and Annualized License Fees (which
reflect the ongoing yearly value of licenses that are in effect as of a given
date) of $US810,000 (2007/ $US313,000) A sales pipeline (all the prospects
who have expressed interest in Diligent) approximately tripling during the
first half of 2008 Client feedback continuing to be very positive regarding
the Boardbooks product
Diligent achieving its revised May forecast sales targets
As a result of the first half sales, Diligent now has 117 license agreements
(compared to 45 this time last year) generating ongoing annuity income of
$US2.87 million.
A net loss before taxation of $US5.836 million was recorded for the six
months ended 30 June 2008. This was in line with expectations. However, given
the continued uncertainty around market conditions, contributing to sales not
coming through as hoped, conservative measures are being taken to scale
Diligent's operating expenses.
As we have noted previously, in the likely event that we do not hit the
Annualized License Fee target outlined in the IPO prospectus, the warranty by
the Company's founding shareholder, DBMS LLC, will be triggered in whole or
part. This will result in the surrender to the Company of up to 14 million
shares, currently owned by DBMS LLC, into treasury stock. The net effect of
this would be an increase in the pro rata shareholdings of all other
shareholders of up to 16 percent.
Looking forward, we do not expect to see a let up in current market
environment for at least the rest of the year. We are, however, optimistic
that sales momentum will continue to build. The fact that we are still making
sales in such tough economic conditions (that some say are the worst in
decades) is a true indicator of the quality and acceptance in the market of
the Boardbooks product, and a credit to Diligent's staff.
Rick Bettle
Chairman
Diligent Board Member Services, Inc.
