Half-year Report

Dillistone Group Plc
("Dillistone", the "Company" or the "Group")
Interim Results

Dillistone Group Plc, the AIM quoted supplier of software and services for the recruitment sector, is pleased to announce its interim results for the six months ended 30 June 2016.
Dillistone Systems Division

  • Encouraging success with FileFinder Anywhere

o  New business orders in January - August already significantly ahead of the equivalent value for the whole of 2015
o  May 2016 saw record month for implementations of FileFinder licences
o  Launch of a standalone browser based app in March - a first for the mainstream executive search software sector

  • Recurring revenues recovered from poor performance in 2015 and account for 71% of divisional revenue

Voyager Software Division

  • Incoming new business order values already ahead of equivalent figure for the whole of 2015
  • Infinity SaaS delivering increased recurring revenues which were up 6% and account for 70% of divisional revenue
  • New product announcements expected in September 2016


  • Revenue up 2% to £4.811m
  • Recurring revenues represent 70% of total revenue and cover 100% of administrative expenses excluding acquisition related items
  • Profit for the period up 3% to £0.489m (2015: £0.476m)
  • Adjusted EBITDA1 up 2% to £1.204m
  • Basic EPS up 1% to 2.48p
  • First half performance exceeded second half of 2015 as previously foreseen
  • Cash balances of £1.611m at 30 June 2016 (2015: £1.335m) and debt of £0.242m (2015: £0.406m)
  • 2% increase in interim dividend to 1.375p (2015: 1.35p)
  • Expectation of revenue and profits growth for full year in line with expectations

1 Adjusted EBITDA is adjusted operating profit with depreciation and amortisation added back.


Commenting on the results and prospects, Mike Love, Non-Executive Chairman, said:
"After a challenging 2015, we are very happy to deliver an encouraging set of results for the first half of the year, with the recently announced record implementations and orders expected to underpin future periods. 
"Despite the uncertain economic horizons, we have delivered both revenue and profit after tax growth.  Very significant increases in new business orders across the Group suggests that we are taking market share from our competitors and demonstrates the success of our ongoing product development strategy.  The recent slide in the value of sterling is having a positive impact on revenues, partially offset by a negative effect on costs.
"We will continue to invest in our products, services and infrastructure across the Group as this is essential to delivering long term shareholder value and to strengthening Dillistone's position in its chosen markets.
"Our confidence in the future has allowed us to declare a 2% increase in our interim dividend."
Investor Access Event:

The Directors will be holding an Investor Access event for Private Investors, Private Client Investment Managers and Institutional Investors to introduce the Dillistone Group, review the Interim Results and expand on opportunities at 3.15pm on Monday 26 September 2016 at the Tower of London.  Presentations will be given by the Directors of Dillistone and the Research Analyst from WH Ireland.

Investors will have access to the Directors and customers of Dillistone at a drinks reception to be held later that day at 4pm at the Tower of London in conjunction with the 2016 World Executive Search Congress, an annual event for the Executive Search industry hosted by Dillistone Systems, a division of Dillistone Group.  In addition, guests will be offered the opportunity to visit the Crown Jewels as part of the visit to the historic site.

Those wishing to attend should contact Tom Cooper on or 020 7933 8780 or 0797 122 1972 for further details.


Mike Love (Chairman) Dillistone Group Plc 020 7749 6100
Jason Starr (Chief Executive) Dillistone Group Plc 020 7749 6100
Julie Pomeroy (Finance Director) Dillistone Group Plc 020 7749 6100
Chris Fielding (Nominated Adviser) WH Ireland Limited 020 7220 1650

Tom Cooper/Paul Vann

Walbrook PR

020 3176 4722
0797 122 1972

Notes to Editors:

Dillistone Group Plc ( is a leader in the supply and support of software and services to the recruitment industry. It has four trading businesses operating through two divisions: Dillistone Systems, which targets the executive search industry (; and Voyager Software, which targets other recruitment markets (

Dillistone has made three acquisitions: Voyager Software in September 2011, FCP Internet in July 2013 and ISV Software in September 2014.  The Group operates under the FileFinder, Infinity, Evolve and ISV brands.

Dillistone was admitted to AIM, a market operated by the London Stock Exchange plc, in June 2006.  The Group employs over 100 people globally with offices in London (head office) Basingstoke and Southampton, Frankfurt, New Jersey and Sydney.



Chairman's Statement
Our financial results show that the Group has made good progress in the first half.  As expected, we have returned to revenue growth as our continued investment in product development is progressively delivering positive results.  Investment in our products remains key to the future success of the business.  We are increasingly selling SaaS based products which have less short term revenue impact but favour longer term recurring revenue.  The advantage to this style of contract is recurring revenue visibility, albeit that it often appears that there is a delay in these new contracts reflecting the Group's results.
We also continue to pursue growth through targeting complementary acquisitions.  This is a strategy that has served us well in the past and which remains part of our core strategy at this time.
Revenues increased by 2% over the 6 months to June 2015 with recurring revenues up 4% and now representing 70% of total revenues.  The growth in new business orders across both divisions in H1 has been very pleasing to see.
Profit after tax was up 3% to £0.489m (2015: £0.476m).
Divisional review
We are pleased to report a turnaround in the performance of our Dillistone Systems division.  After a challenging 2015, we had stated that we faced a more competitive market than in previous years and, as a result, we felt it necessary to increase investment in the Division.  It was our expectation that we would return to both revenue and profit growth in 2016.  The performance in 2015 meant that we began the period with recurring revenues at a lower level that those seen at the same stage in the previous year, but over the reporting period we have wiped out this deficit.  Despite economic turbulence, it remains our expectation that the Division will deliver growth in the full year.
Dillistone Systems ( reported revenues of £2.265m (2015: £2.306m) with recurring revenues up 2% to £1.614m and non-recurring revenues down £0.072m in part due to the move in timing of the World Executive Search Congress which is being held in H2 2016 (in H1 2015).
The latest release of the FileFinder Anywhere platform has been extremely well received by both existing and new clients.  Evidence of this can be seen in our record month of licence implementations in May and the contract that we announced post the period end with the global search firm Alexander Hughes International headquartered out of Paris for circa 200 new licences.  By the end of August, we had won new business contracts worth significantly more than our total new business order book for the whole of 2015.  Our challenge now is to implement the increased demand for our services while maintaining our performance standards. 
As anticipated, Divisional profits are down by £0.063m in the period.
Voyager Software ( has also enjoyed a good trading period with revenue 6% ahead of 2015 at £2.546m (2015: £2.400m). We are particularly pleased with the performance of our Infinity SaaS platform, launched a year ago, and the continued growth in our FCP Evolve Platform.  The performance of both of these products gives us improved visibility over future revenues.
The Division continues to invest in product development and a series of product enhancements will be announced later this month.  Divisional profits increased 5% to £0.412m in the period.
Financial Performance
Revenue in the six months ended 30 June 2016 increased by 2% to £4.811m (2015: £4.706m).  Recurring revenues increased by 4% to £3.384m over the comparable period last year (2015: £3.257m) and represented 70% of total revenues (2015: 69%).  Non-recurring revenues were down at £1.129m (2015: £1.202m). 
Cost of sales increased by 5% in H1 2016 mainly due to the continued roll-out of third party data centres for hosting our cloud products.  Administration expenses rose 3% in H1 2016, in part due to increased depreciation and amortisation charges, relating primarily to investment in product development.  Excluding depreciation and amortisation, administrative expenses rose 2% over H1 2015.  Administrative costs also include £0.189m (2015: £0.189m) relating to the amortisation of acquisition intangibles.
EBITDA grew 2% to £1.204m (2015: £1.185m).  Total depreciation and amortisation, including amortisation of acquisition intangibles, increased to £0.656m (2015: £0.599m) resulting in profit before tax being down 5% to £0.538m (2015: £0.566m). 
The tax charge fell to £0.049m in the period to 30 June 2016 (2015: £0.90m). This gave an effective global tax rate of 9.2% (2015: 15.9%).  Excluding acquisition-related items the tax rate was 11.34%.  The 2015 and 2016 rates have been reduced by claims in the UK for research and development tax credits reflecting the continuing development of our products.  The falling UK tax rates have also had a positive impact on the charge, which is offset by the higher rates of corporation tax payable in the US and Australia.
Basic EPS increased by 1% to 2.48p (2015: 2.45p).
Cash generated from operating activities remained strong at £1.347m (2015: £1.111m).  Total cash flow in the 6 months ended 30 June 2016 showed a net cash outflow of £0.070m (2015: outflow £0.560m).  The main elements of non-operating expenditure related to dividends paid in the period of £0.541m (2015: £0.528m) and investment in new product development of £0.539m (2015: £0.464m) and deferred and contingent consideration payments in respect of acquisitions £0.212m (2015: £0.666m).  At 30 June2016 we had cash reserves of £1.611m (2015: £1.335m) and £0.242m in borrowings (2015: £0.406m).
We continue to follow a progressive dividend policy and, reflecting this, the Board has declared an increase in the interim dividend for 2016 of 2%.  Accordingly, a dividend of 1.375p per share (2015: 1.35p) will be paid on 17 November 2016 to holders on the register on 14 October 2016.  Shares will trade ex-dividend from 13 October 2016. 
The Group remains committed to the continued investment in our core products as a means of delivering organic growth.  It will also continue to target appropriate acquisitions in its current or related sectors. 
The Board is pleased to see that the Group's investment in the FileFinder Anywhere platform is starting to show real signs of success.  Although economic turbulence has had some impact on the number and size of the opportunities available to us, our improved market position has seen an increase in both conversion rates and in average order values.  The Dillistone Systems division plans to announce further improvements to the product suite in September 2016 and as a result expects to maintain its improved market performance.
Our Voyager Software division has shown growth at both the revenue and the pre-tax profit level, and we expect this to continue.  Our Infinity SaaS product, launched in 2015, has proved increasingly popular, though this model does mean that revenue is not recognised as quickly as in the traditional licence sale but has longer term benefits.  The Division also plans various product launches and upgrades in the remainder of 2016.
The last few months have seen some volatility in the recruitment market.  This has led to a reduction in additional licence purchases amongst some of our existing client firms.  This has been more than offset by growth in our new business sales and upgrades for existing clients and we expect this trend to continue.  However, we would not be immune to a more significant economic slowdown.  Nevertheless, with our recurring revenues covering our administrative expenses (excluding acquisition related items), the Group remains in a very solid position.  As a result, in H2 of2016 the Board expects the Group to make further progress and results are anticipated to be in line with market expectations with the Group delivering both revenue and operational profit growth in the full year.
The Board, therefore, remains confident in the future prospects of the Group and has declared an increase in the interim dividend to 1.375p per share.
Mike Love