KEY CONCEPTS

Please find below the key concepts I have gathered from IR’s annual report.

• IR achieved an annual profit after tax result of $9.1 million – marginally up against the prior year result of $9.0 million.

• Profitability in the first half was down 23% as a result of the delay in key service provider licence contracts.  The second half was much stronger with profit growing 16% in this period as the key licence contracts were completed.

• Revenue for the year was $48.9 million, an increase of 1% over 2012.

• Integrated Research was selected as the 2013 Avaya DevConnect Technology Partner of the Year, the only company to be awarded this title. 

• IR’s consulting services business grew for a fourth consecutive year, with revenue increasing 35% to $4.5 million as customers increasingly look to extend their Prognosis solutions.

• The company continued to focus on expanding its capabilities and improving productivity.  The number of staff at the end of 2013 was 200 (2012:186).

• Total expenses were $38.3 million, up 2% against the prior year with a higher investment in research and development.  The major development issue that occurred during the 2013 financial year was on Prognosis 10 which is set to be released during the first half of the 2014 financial year. 

• The company’s balance sheet remains in a strong position with $14.8 million in cash and cash equivalents as a result of continuing strong cashflow from operations.

FINANCIAL SUMMARY

In millions of AUD (except earnings per share)

Year ended 30 June	2013	2012	% Change
Revenue from licence fees	26.6	28.9	↓ (8)%
Total revenue	48.9	48.6	↑ 1%
Net profit after tax	9.1	9.0	↑ 0%
Net assets	30.0	29.2	↑ 3%
Cash at balance date	14.8	12.0	↑ 23%
Americas revenue	34.4	31.9	↑ 8%
Europe revenue	6.9	7.2	↓ (3)%
Asia Pacific revenue	7.5	8.7	↓ (14)%
Earnings per share (cents per share)	5.4	5.4	↓ (0)%

Integrated Research reported a solid performance for the financial year to June 2013.  Although competition exists in the software and services industry, IR remains focused on sustaining its competitive advantage through continuing innovation that comes from its research and development program.  The company’s growth strategy is to create, sell and support Prognosis based products and services that deliver profitable growth from existing markets and customers, as well as creating new profits that open new markets.  The company’s pipeline is strong and the fundamentals of its key markets are sound, as it continues to produce world class products that manage the performance of its customers’ Unified Communications, Payments and IT infrastructure.