According to preliminary figures, in the first three months of 2007 the Group achieved sales of EUR 23.56 million (previous year: EUR 22.14 million) and the EBITDA (earnings before interest, tax, depreciation and amortization) was EUR 0.40 million (previous year: EUR1.98 million). While EBIT (earnings before interest and tax) was EUR -0.69 million (previous year: EUR 1.17 million), EBIT adjusted for depreciation for purchase price allocation (pursuant to IFRS 3) was EUR -0.35 million. Earnings per share are EUR -0.08 (previous year fully diluted earnings per share EUR 0.05).
Operating cash flow of EUR 0.69 million saw a YoY growth of EUR 0.28 million (previous year: EUR 0.41 million). Net current assets as at March 31, 2007 were EUR 10.42 million.
The result for the first quarter was adversely affected by a profit of more than EUR 1 million being delayed to subsequent quarters. For instance, the development of major new operations in connection with the upgrade of the beusen KNV software on Net Organizer took longer than anticipated. As a consequence, potential income of EUR 500 thousand resulting from licences will only be realised in the coming months. In the banking business, a project for a large customer was late in being launched (order volume: EUR 1.25 million) so that sales of EUR 300 thousand will be achieved at a later point in time. Finally, the sales agreement with NetOptics (anticipated sales in 2007: EUR 5 million) was only signed late in March, which caused a profit delay of another EUR 250 thousand.
In spite of the fact that various major orders have been delayed until the second half of the year and ongoing negotiations for large orders and agreements will come into effect later in 2007, the Group sees no point in adjusting their forecast, i.e., sales of EUR 116 million, EBITDA of EUR 11.5 million and EBIT of EUR 6.4 million for the overall year.
The Group is on the brink of finalizing other large deals. BRAIN FORCE is about to secure from a competitor a major order package including the take-over of a software tool for financial services. A managed application order for EUR 2.5 million is about to be renewed. Furthermore, with the start of the Vista migration, the Company was able to strengthen sales partnerships with Atos Origin, Getronics and Logica CMG which has already brought an increase in order intake in this segment.
The orders in hand as at March 31, 2007 is EUR 27.88 million (as at March 31, 2006: EUR 24.74million; December 31, 2006: EUR 25.60 million), which is 12.7 percent above the figure for the previous year and 8.9 percent above the orders in hand at the end of the 2006 financial year.
What is more, the Group will further forge ahead with its growth strategy in 2007. For instance, BRAIN FORCE has signed letters of intent with two potential acquisition targets. Through this move, the firm plans to strengthen its position in the managed services market with intellectual property rights in the IT management software area and to tackle at the same time the topic of the future "Software as a Service (SaaS)”, which, according to Gartner Research, is the largest growth market in the software industry. The Group is sure that following a due diligence check, a positive decision will be reached by mid 2007.