Acquisitions on agenda for Software of Excellence

Attention Business Editors
For Immediate Release
August 19th 2005

Acquisitions on the agenda for Software of Excellence

Dental software company Software of Excellence is actively looking to make further acquisitions, the company’s chairman Jim Syme told shareholders at today’s annual meeting in Auckland.

“At this stage, no decisions have been made, but we are actively looking for acquisitions, particularly in the Professional area.”

He said the company had money in the bank for expansion and was keen to build on its track record of successful Professional acquisitions, but only when such acquisitions make total strategic and business sense.

“We recognise that we need to generate added value for our shareholders and we see that acquisition is one way of achieving this.”

Mr Syme said the company’s management was also looking at ways to further improve returns from the company’s United Kingdom operations by selling additional products and services to its existing customer base.

“This customer base is still growing and we have a solid backlog of Professional orders in the UK, where we are continuing to install at near record levels.”

The Government’s push into Health IT in the UK was proving to be a slow burn for the company rather than a big bang in terms of the major contracts, with the decisions on many of these continuing to be delayed.

However, the Government’s “Options for Change” initiative, which was switching the payment plans for NHS dentists was providing the catalyst to have all legacy Professional sites upgraded.

“This is a large short-term opportunity for us in the UK, which we are currently very focussed on.

He said the company’s first quarter’s Professional sales were very strong in the UK but the company had experienced some delays in sign-off for a number of Enterprise contracts.

“We are expecting these contracts to flow through in the present quarter and subject to that happening we will have a first half result in line with our budgets.”

“Regrettably the stronger state of the New Zealand dollar against the British pound continues to have an impact on the group’s earnings, given that the UK now accounts for 76% of our business.

“Already this year we have seen the NZD / GBP cross rate devalue by approximately 12%.”

He said the company’s board was conscious that many shareholders in New Zealand do invest for dividends and that at the end of this year the first issue of convertible notes would convert to ordinary shares.

The board would undertake a further review of the company’s dividend policy early next year in the light of this conversion of notes and the company’s profit position.

ENDS

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