Rubicon Software - Interim Results

RNS Number:0174R
Rubicon Software Group PLC
31 March 2008

Rubicon Software Group plc

INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007

Rubicon Software Group plc ("Rubicon" or "the Group"; AIM: RUBI), the provider
of smart decisioning and workflow automation software to the financial services
sector, announces its unaudited results for the six months ended 31 December
2007. These interim statements are the first that the Group has prepared under
International Financial Reporting Standards ("IFRS") and include reconciliations
to previously reported numbers prepared under UK GAAP.

KEY POINTS :

• Revenues rose 60% in comparison to prior year levels to £744,000.
Annuity income accounted for 32% of this figure.

• Pre-tax loss of £351,000 (2006: loss of £278,000)

• Loss per share of 0.9p (2006: loss per share of 0.8p)

• Annual licensing model proving attractive to clients

• Regulatory changes leading to increased interest

Commenting on these results, Rob Burnham, Chairman of Rubicon, said:

"The 60% growth in first half revenue shows good progress against a backdrop of
volatility in the financial services industry. We have reacted swiftly to
changing conditions within the UK non-conforming lending industry, paring back
our contracted cost base to levels appropriate to meet current demand. Whilst
the uncertainty in the financial services market means that some existing
customers and new business prospects are reluctant to commit to major capital
expenditure, technology is still seen as key to achieving operational
efficiency. Regulatory changes later this year should also stimulate demand for
Rubicon's solutions. The Board remains convinced that the Group is well
positioned to service these technology needs."

Notes to Editors

About Rubicon

Based near Woking in Surrey, Rubicon is a provider of smart decisioning and
workflow automation software to niche markets within the UK financial services
sector, notably secured loan brokers and building societies. Its core technology
is designed to enhance the effectiveness and efficiency of customer service,
fulfilment and product selection, whilst facilitating business process and
change management. Current clients include First Response Finance,
Loanoptions.co.uk, Market Harborough Building Society, Mortgages plc and Norton
Finance. For more information, please visit www.rubiconsoftware.com.

For further information, please contact:

Rubicon Software Group plc 01276 706900
Alistair Hancock, Chief Executive Officer
Andrew Kirby, Finance Manager

W.H. Ireland 0121 265 6330
Tim Cofman/Katy Birkin

CHAIRMAN'S STATEMENT

As disclosed in last December's trading statement, the operating environment in
the first half of the current financial year has been challenging. With many
lenders and brokers announcing redundancies and even withdrawing from certain
sectors of the lending market, the "credit crunch" inevitably is deferring
significant capital expenditure amongst both our existing clients and new
business prospects.

Despite this, first half revenues of £744,000 were 60% higher than the same
period last year (2006: £464,000). Of this, £241,000 was annuity income (2006:
£166,000), whilst £503,000 was derived from consultancy fees (2006: £298,000).
This is in accordance with our strategy of growing our annuity revenue stream.

Whilst there is less appetite for capital outlay at this time, we remain in
dialogue with our clients and new prospects with a view to providing point
solutions and bespoke enhancements - as well as full implementation of the
Accelerator suite - into those businesses that have been less affected by the
sub-prime crisis. We are also seeing increased interest in our software as a
consequence of recent regulatory changes, specifically those related to the
appropriate selection of loan products for retail customers.

Furthermore, we are now offering our software on a managed service basis with
licence and professional services paid over the course of a 3-5 year contract.
This is proving to be an attractive proposition to our clients, keeping the
initial costs low and giving them certainty of future costs at a time when many
of them have much reduced future growth expectations. We have recently signed
one master broker on this basis and are in dialogue with several others.

The Board is also actively looking to develop partner channels and new revenue
opportunities, with some sizeable new business prospects in the pipeline that,
if successful, have the potential to generate meaningful revenues in the second
half and beyond.

However, due to the current business environment, the Board has deemed it
prudent, given market uncertainties, not to capitalise £193,000 of software
development undertaken in the period. We will continue to monitor demand for our
new and existing offerings with a view to future capitalisation or impairment as
market conditions dictate. Rubicon is committed to significant investment to
maintain its technological edge and generate competitive advantage for our
clients.

The changing business climate has also necessitated that we modify payment terms
for some of our clients to maintain our long-term relationships. This decision
has resulted in bad debt charges of £76,000 for work completed during the period
for which Rubicon will not now be paid.

Largely as a result of these items, Rubicon registered a first half pre-tax loss
of £351,000 (2006 loss: £278,000).

Our policy of flexing our workforce by utilising contracted developers has
enabled us quickly to scale back our resources to match the demands from our
customers and the anticipated new business. In addition, the permanent headcount
has been reduced. Any increases in headcount in the second half would be driven
by new business generation.

These interim statements for the six months ended 31 December 2007 are the first
that the Group has prepared under International Financial Reporting Standards
("IFRS") and include reconciliations to the previously reported numbers prepared
under United Kingdom Generally Accepted Accounting Principles ("UK GAAP"). The
most significant change is the recognition of share option expenses as required
by IFRS 2 "Share-based payment", the impact of which is discussed in more detail
in the notes to the financial statements.

Looking forward, the Board retains a positive outlook for the business. Having
grown our revenue significantly in the first half, despite market conditions,
and having reduced our cost base to an appropriate level, we are confident that
we can withstand the current market conditions and resume our strategy for
growth when confidence returns to the market. With sales volumes under pressure,
our clients' success increasingly depends upon the efficiency of their business
processes and the technology that they employ. Larger players in the sector see
the current hiatus as an opportunity to regroup and reassess their technology
requirements so as to emerge in a better shape once the market recovers, whilst
smaller companies seem more open to cost-effective solutions as long as they
form part of the operational budget. Rubicon remains well positioned to service
both of these technology needs.

R. Burnham 31 March 2008
Chairman
Rubicon Software Group plc

CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2007
6 months to 31 6 months to 31 Year to
December 2007 December 2006 30 June
2007
£'000 £'000 £'000
Notes Unaudited Unaudited Unaudited

Revenue 744 464 1,380
Other operating income and charges (1,094) (742) (1,643)
--------- --------- ---------
Operating loss 4 (350) (278) (263)
Finance income 1 2 2
Finance charges (2) (2) (5)
--------- --------- ---------
Loss before tax (351) (278) (266)
Income tax expense - - -
--------- --------- ---------
Loss for the period attributable to equity (351) (278) (266)
shareholders ========= ========= =========

Loss per share (basic) 5 (0.9)p (0.8)p (0.7)p
========= ========= =========

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2007

Share Share Share Profit
capital premium option Merger and loss Total
account reserve reserve account equity
£'000 £'000 £'000 £'000 £'000 £'000

Balance at 30 June 2006 300 - - 596 (684) 212
Loss for the period - - - - (278) (278)
-------- -------- -------- -------- -------- --------
Total recognised income and expense
for the period - - - - (278) (278)
Share options - - 5 - - 5
Issue of share capital 77 393 - - - 470
-------- -------- -------- -------- -------- ---------
Balance at 31 December 2006 377 393 5 596 (962) 409
======== ======== ======== ======== ======== =========

Profit for the period - - - - 12 12

Total recognised income and expense
for the period - - - - 12 12
Share options - - 4 - - 4
-------- -------- -------- -------- -------- ---------
Balance at 30 June 2007 377 393 9 596 (950) 425
======== ======== ======== ======== ======== =========

Loss for the period - - - - (351) (351)
-------- -------- -------- -------- -------- ---------
Total recognised income and expense
for the period - - - - (351) (351)
Share options - - 4 - - 4
-------- -------- -------- -------- -------- ---------
Balance at 31 December 2007 377 393 13 596 (1,301) 78
======== ======== ======== ======== ======== =========

CONDENSED CONSOLIDATED BALANCE SHEET
AT 31 DECEMBER 2007

6 months to 31 6 months to 31 Year to
December 2007 December 2006 30 June 2007
£'000 £'000 £'000
Notes Unaudited Unaudited Unaudited
ASSETS

Non-current assets
Property, plant and equipment 6 40 35 40
Intangible assets 3 228 289 289
--------- --------- ---------
268 324 329
--------- --------- ---------
Current assets
Trade and other receivables 383 370 514
Cash and cash equivalents - 55 57
--------- --------- ---------
383 425 571
--------- --------- ---------
Total assets 651 749 900
========= ========= =========

LIABILITIES

Current liabilities
Trade and other payables (513) (340) (471)
Overdraft (54) - -
--------- --------- ---------
(567) (340) (471)
--------- --------- ---------
Non-current liabilities
Amounts owing under finance leases (6) - (4)
--------- --------- ---------
Total non-current liabilities (6) - (4)
--------- --------- ---------
Total liabilities (573) (340) (475)
--------- --------- ---------
Net assets 78 409 425
========= ========= =========

EQUITY

Equity attributable to equity holders of
the parent
Share capital 377 377 377
Share premium account 393 393 393
Share options 13 5 9
Merger reserve 596 596 596
Profit and loss account (1,301) (962) (950)
--------- --------- ---------
Total equity 78 409 425
========= ========= =========

CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2007

6 months to 6 months to Year to
31 December 2007 31 December 2006 30 June 2007
£'000 £'000 £'000
Notes Unaudited Unaudited Unaudited

Loss before interest and taxation (351) (278) (263)
Adjustments for:
- Share option charges 4 5 9
- Depreciation and amortisation 69 83 180
- Decrease / (increase) in trade and other
receivables 132 91 (51)
- Increase / (decrease) in trade and other
payables 39 (65) 58
--------- --------- ---------
Cash flows from operating activities (107) (164) (67)
Interest paid (2) (2) (5)
Tax paid - - -
--------- --------- ---------
Net cash from operating activities (109) (166) (72)
--------- --------- ---------

Cash flows from investing activities
Interest received - 2 2
Purchase of property, plant and equipment (3) (2) (8)
Software development - (89) (179)
--------- --------- ---------
Net cash used in investing activities (3) (89) (185)
--------- --------- ---------
Cash flows from financing activities
Proceeds from issue of share capital - 470 470
Repayment of loans - (100) (100)
Payment of finance lease liabilities (4) (1) (2)
--------- --------- ---------
Net cash (used in)/generated by investing (4) 369 368
activities
--------- --------- ---------

Net (decrease) / increase in cash and cash (116) 114 111
equivalents
Cash and cash equivalents at beginning of period 51 (60) (60)
--------- --------- ---------
Cash and cash equivalents at end of period (65) 54 51
========= ========= =========

Notes to the financial statements

1. Publication of non-statutory accounts

The financial information set out above does not constitute statutory accounts
as defined in Section 240 of the Companies Act 1985. The figures for the year
ended 30th June 2007 have been extracted from the statutory financial statements
prepared under United Kingdom Generally Accepted Accounting Principles
("UKGAAP"), which have been filed with the Registrar of Companies. The auditors'
report on those financial statements was unqualified. The auditors have issued
an unqualified report on the full financial statement and remuneration report
containing no statement under section 237 (2) or section 237 (3) of the
Companies Act 1985. In the opinion of the Directors, the financial information
presents fairly the financial position, results of operations and cash flows for
the period in conformity with IFRS consistently applied. The interim report for
the six months ended 31 December 2007 was approved by the Directors on 31 March
2008.

Rubicon Software Group plc's consolidated interim financial statements are
presented in Pounds Sterling (£), which is the functional currency of all Group
companies.

Rubicon Software Group plc and its subsidiaries' ('the Group') principal
activity is consultancy and design, development and provision of computer
software. The Group's solutions are sold to customers in the financial services
sector to automate business processes relating to client interaction, workflow
management, Internet, Intranet and Local Area Network based solutions.

Rubicon Software Group plc is the Group's ultimate parent company. It is
incorporated and domiciled in England and Wales. The address of Rubicon Software
Group plc's registered office, which is also its principal place of business, is
Rubicon House, Guildford Road, West End, Woking, Surrey GU24 9PW. Rubicon
Software Group plc's shares are listed on the AIM Market of the London Stock
Exchange.

2. Basis of preparation

These interim condensed consolidated financial statements are for the six months
ended 31 December 2007. They do not include all of the information required for
full annual financial statements, and should be read in conjunction with the
consolidated financial statements of the Group for the year ended 30 June 2007.

They have been prepared in accordance with IAS 34 "Interim Financial Reporting"
and the requirements of IFRS 1 "First-time Adoption of International Financial
Reporting Standards" relevant to interim reports, because they are part of the
period covered by the Group's first IFRS financial statements for the year ended
30 June 2008.

These condensed consolidated interim financial statements (the interim financial
statements) have been prepared under the historical cost convention in
accordance with the accounting policies set out in note 7 which are based on the
recognition and measurement principles of IFRS in issue as adopted by the
European Union (EU) and are effective at 30 June 2008 or are expected to be
adopted and effective at 30 June 2008, the first annual reporting date at which
the Group are required to use IFRS accounting standards adopted by the EU.

The policies have changed from the previous year when the financial statements
were prepared under applicable UK GAAP. The comparative information has been
restated in accordance with IFRS. The changes to accounting policies are
explained in note 7, together with an illustration of the effects of the
transition to IFRS in note 8. The date of transition to IFRS was 1 July 2006
(transition date).

The accounting policies that have been applied in the opening balance sheet have
also been applied throughout all periods presented in these financial
statements. These accounting policies comply with each IFRS that is mandatory
for accounting periods ending on 30 June 2008.

3. Research and development

Research and development costs incurred in the period amounted to £193,000 all
of which has been expensed, as the IFRS recognition criteria cannot currently be
met. In 2006, £89,000 of research and development cost was capitalised.

4. Operating loss

The Group operates a share-based compensation plan. The fair value of the
employee services received under the plan is recognised as an expense in the
condensed consolidated income statement. Fair value is determined using the
Black-Scholes Option Pricing Model. The amount to be expensed over the vesting
period is determined by reference to the fair value of share options.

The operating loss is stated after adoption of IFRS 2 "Share-based payment". The
Group recognised total expenses of £5,000 for the six months ending 31 December
2006 and £4,000 for the six months ending 31 December 2007. The financial effect
of these adjustments is shown below:

Condensed consolidated income statement
6 months to 6 months to Year to
31 December 31 December 30 June
2007 2006 2007
£'000 £'000 £'000
Unaudited Unaudited Unaudited

Revenue 744 464 1,380
Other operating income and charges (1,091) (737) (1,634)
---------- ---------- ----------
Operating loss before share-based payments (347) (273) (254)
Share-based payment expense (4) (5) (9)
---------- ---------- ----------
Operating loss (351) (278) (263)
---------- ---------- ----------

5. Loss per share

The relevant figures used in the calculation are stated below:

6 months to 6 months to Year to
31 December 31 December 30 June
2007 2006 2007
£'000 £'000 £'000
Unaudited Unaudited Unaudited

Loss attributable to shareholders (351) (278) (263)

Weighted average number of shares outstanding 37,699,995 34,854,343 36,265,474

At 31 December 2007, the Company had 1,789,875 share options outstanding. None
of these options were exercised in the period so there is no dilutive effect on
the Group's earnings per share.

6. Property, plant and equipment

During the period the Group acquired £7,000 of computer hardware (2006: £6,000)

7. Accounting policies

Basis of consolidation

The Group financial statements consolidate those of the company and all of its
subsidiary undertakings up to 31 December 2007. Subsidiaries are entities over
which the Group has the power to control the financial and operating policies so
as to obtain benefits from its activities. The Group obtains and exercises
control through voting rights.

Intra-group transactions are eliminated on consolidation and all figures relate
to external transactions only. Amounts reported in the financial statements of
subsidiaries have been adjusted where necessary to ensure consistency with the
accounting policies adopted by the Group.

Business combinations completed prior to the date of transition to IFRS

The Group has elected not to apply IFRS 3 Business Combinations retrospectively
to the business combinations prior to the date of transition.

Accordingly the classification of the combination (acquisition, reverse
acquisition or merger) remains unchanged from that used under UK GAAP. Assets
and liabilities are recognised at the date of transition if they would be
recognised under IFRS, and are measured using their UK GAAP carrying amount
immediately post-acquisition as deemed cost under IFRS, unless IFRS requires
fair value measurement.

Reverse acquisition accounting

In June 2006 the Company became the legal parent of Rubicon Software Limited and
its subsidiaries in a share for share transaction. The Company's continuing
operations and executive management were those of Rubicon Software Limited.
Accordingly, the substance of the combination was that Rubicon Software Limited
had acquired Rubicon Software Group plc in a reverse acquisition.

Under the requirements of the Companies Act 1985, it would normally be necessary
for the Company's consolidated accounts to follow the legal form of the business
combination. In that case the pre-combination results would be those of the
acquired Rubicon Software Group plc and Rubicon Software Limited would be
included only in relation to its performance from 8 June 2006. However, this
would portray the combination as the acquisition of Rubicon Software Limited by
Rubicon Software Group plc and would, in the opinion of the directors, fail to
give a true and fair view of the substance of the business combination.
Accordingly, the directors have adopted reverse acquisition accounting as the
basis for consolidation in order to give a true and fair view.

The adoption of reverse acquisition accounting impacts the financial statements
in a number of different ways. The principle effect is for the consolidated
income statement to incorporate a full year's trading results of Rubicon
Software Limited and its subsidiary undertakings and 4 months of Rubicon
Software Group plc which had previously been a shell company. The directors
believe that by adopting reverse acquisition accounting, the consolidated income
statement more accurately reflects the actual trading results of the Group.

Under reverse acquisition accounting an adjustment within shareholders funds is
required to eliminate the cost of acquisition in the issuing company's books,
and introduce a notional cost of acquiring the smaller issuing company based on
the fair value of its shares. A further adjustment is required to show the share
capital of the legal parent in the consolidated balance sheet rather than that
of the acquirer. The resulting differences have been debited to the Merger
Reserve.

Revenue

Revenue is the total amount receivable by the Group for goods supplied and
services provided, excluding VAT and trade discounts. Revenue is recognised on
goods and services as set out below:

Consultancy and software development contracts

Consultancy and software development contracts are recognised in line with the
performance of the contract, typically:

• For time and materials contracts, the number of days worked in the
period at the contracted rates and any materials consumed in the period.

• Where a contract involves delivery of several different elements and is not
fully delivered or performed by the year end, revenue is recognised based
on the proportion of the fair value of the elements delivered to the fair
value of the overall contract.

Licence income - perpetual

If the sale is unconditional and the revenue earned is non-refundable, the value
of software licence income is taken to the income statement in full upon
delivery of the software to the client as this point represents full performance
of the sale. If the sale is conditional then the value of the software licence
income is taken to the income statement once User Acceptance (UAT) has been
achieved, which binds the transaction as non-refundable.

Licence income - periodical

Annual software licence income is recognised evenly over the contracted licence
period.

Support and maintenance

Support and maintenance income is recognised evenly over the contract term.

Share-based payments

The company issues equity-settled share-based payments to certain employees
(including directors). Equity-settled share-based payments are measured at fair
value at the date of grant. The fair value determined at the grant date of the
equity-settled share-based payments is expensed to the income statement on a
straight-line basis over the vesting period, together with a corresponding
increase in equity (via a credit to the share option reserve), based upon the
company's estimate of the shares that will eventually vest.

Fair value is measured using the Black-Scholes pricing model. The expected life
used in the model has been adjusted, based on management's best estimate, for
the effects of non-transferability, exercise restrictions and behavioural
considerations.

Upon exercise of share options, the proceeds received net of attributable
transaction costs are credited to share capital, and where appropriate to share
premium.

Where the terms of an equity-settled transaction are modified, as a minimum an
expense is recognised as if the terms had not been modified. In addition, an
expense is recognised for any increase in the value of the transaction as a
result of the modification, as measured at the date of modification.

Where an equity-settled transaction is cancelled, it is treated as if it had
vested on the date of cancellation, and any expense not yet recognised for the
transaction is recognised immediately. However, if a new transaction is
substituted for the cancelled transaction, and designated as a replacement
transaction on the date that it is granted, the cancelled and new transactions
are treated as if they were a modification of the original transaction, as
described in the previous paragraph.

Pension costs

The Company operates a money purchase pension scheme for all Directors and
employees. The assets of the scheme are held separately from those of the Group.
The annual contributions payable are charged to the income statement.

Intangible assets

Expenditure on research (or the research phase of an internal project) is
recognised as an expense in the period in which it is incurred.

Development costs incurred on specific projects are capitalised when they can be
reliably measured and the project to which they are attributable are separately
identifiable, are technically feasible, demonstrate future economic benefit, and
will be used or sold by the Group once completed. Development costs not meeting
the criteria for capitalisation are expensed as incurred. Following completion
of the development the capitalised cost is amortised on a straight line basis
over the period during which the Group is expected to benefit, typically three
years.

The cost of internally generated software comprises all directly attributable
costs necessary to create, produce, and prepare the asset to be capable of
operating in the manner intended by management. Directly attributable costs
include third party costs and employee costs incurred on software development,
along with an appropriate portion of relevant overheads.

Careful judgement by the directors is applied when deciding whether the
recognition requirements for development costs have been met. This is necessary
as the economic success of any product development is uncertain and may be
subject to future technical problems at the time of recognition. Judgements are
based on the information available at each balance sheet date. In addition, all
internal activities related to the research and development of new software
products are continuously monitored by the Directors.

Property, plant and equipment

Property, plant and equipment is stated at cost, net of depreciation and any
provision for impairment.

Depreciation

Depreciation is calculated to write off the cost of an asset, less its estimated
residual value, over the useful economic life of that asset as follows:

Leasehold properties 10%
Office equipment 25%

Material residual value estimates are updated as required, but at least
annually, whether or not the asset is revalued.

Leased assets

In accordance with IAS 17, the economic ownership of a leased asset is
transferred to the lessee if the lessee bears substantially all the risks and
rewards related to the ownership of the leased asset. The related asset is
recognised at the time of inception of the lease at the fair value of the leased
asset or, if lower, the present value of the minimum lease payments plus
incidental payments, if any, to be borne by the lessee. A corresponding amount
is recognised as a finance leasing liability.

The interest element of leasing payments represents a constant proportion of the
capital balance outstanding and is charged to the income statement over the
period of the lease.

All other leases are regarded as operating leases and the payments made under
them are charged to the income statement on a straight line basis over the lease
term. Lease incentives are spread over the term of the lease.

Operating leases

Leases in which a significant portion of the risks and rewards of ownership are
retained by the lessor are classified as operating leases. Costs in respect of
operating leases are charged to the income statement on a straight line basis
over the lease term. Rent free periods received in entering into a lease are
also accounted for over the lease term.

Taxation

Current tax is the tax currently payable based on taxable profit for the year.

Deferred income taxes are calculated using the liability method on temporary
differences. Deferred tax is generally provided on the difference between the
carrying amounts of assets and liabilities and their tax bases. However,
deferred tax is not provided on the initial recognition of goodwill, nor on the
initial recognition of an asset or liability unless the related transaction is a
business combination or affects tax or accounting profit. Deferred tax on
temporary differences associated with shares in subsidiaries and joint ventures
is not provided if reversal of these temporary differences can be controlled by
the group and it is probable that reversal will not occur in the foreseeable
future. In addition, tax losses available to be carried forward as well as
other income tax credits to the group are assessed for recognition as deferred
tax assets.

Deferred tax liabilities are provided in full, with no discounting. Deferred
tax assets are recognised to the extent that it is probable that the underlying
deductible temporary differences will be able to be offset against future
taxable income. Current and deferred tax assets and liabilities are calculated
at tax rates that are expected to apply to their respective period of
realisation, provided they are enacted or substantively enacted at the balance
sheet date.

Changes in deferred tax assets or liabilities are recognised as a component of
tax expense in the income statement, except where they relate to items that are
charged or credited directly to equity (such as the revaluation of land) in
which case the related deferred tax is also charged or credited directly to
equity.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits.

Trade receivables

Trade receivables are recognised initially at fair value. A provision for
impairment of trade receivables is established when there is objective evidence
that the Group will not be able to collect all amounts due according to the
original contractual terms. The amount of the provision is the difference
between the asset's carrying value and the value of the estimated future cash
flows. The amount of the provision is recognised in the income statement within
other operating charges.

Equity

Equity comprises the following:

"Share capital" represents the nominal value of equity shares.

"Share premium" represents the excess over nominal value of the fair value of
consideration received for equity shares, net of expenses of the share issue.

"Share options reserve" represents equity-settled share-based employee
remuneration until such share options are exercised.

"Merger reserve" represents the difference between the nominal and fair value of
shares issued for the acquisition of subsidiary undertakings in accordance with
section 131 of the Companies Act 1985.

"Profit and loss reserve" represents retained profits.

8. Effect of transition to IFRS
6 months to 31 6 months to Year to 30
December 31 December June
2007 2006 2007
£'000 £'000 £'000
Unaudited Unaudited Unaudited

Total equity under UKGAAP 65 404 416
IFRS adjustment value 13 5 9
Total equity under IFRS 78 409 425

Operating loss under UKGAAP (347) (273) (254)
IFRS adjustment value (4) (5) (9)
Operating loss under IFRS (351) (278) (263)

The IFRS adjustments relate solely to share options expensed in each period and
the corresponding movement in reserves.

9. Availability of Interim Report

Copies of this interim report are available from the Company's Registered Office
at Rubicon House, Guildford Road, West End, Surrey, GU24 9PW or via the
Company's website (www.rubiconsoftware.com).

This information is provided by RNS
The company news service from the London Stock Exchange
END

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