Â·A significant commercial arrangement is being negotiated with a large US company
Â·Significant reduction of operating costs going forward
Â·John Unwin appointed as Technical Director
Â·Turnover increased by 55% to Â£473,465 compared with the same period last year (Q3,1999: Â£305,512)
Â·Core product portfolio now substantially complete
Markets and Connectivity
Â·Continued improvement and development of trading software
Â·Preferred solution status with ADX, launched in January 2001
Â·EasyMinder installed at ten client sites
Â·EasyCell now in alpha testing
Â·EasyRouter performing very well under quality assurance testing
Philip Docker, Chairman of EasyScreen, commented "Our revenues continue to increase whilst our overheads will be significantly reduced going forward. We are concentrating on selling and delivering our existing products to clients and we are receiving an increasing number of enquiries from Europe, America and Asia."
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During the third quarter we completed a number of significant development projects, and as a result we have been able to reduce future overheads considerably. With the core EasyScreen product portfolio now substantially complete, we are able to focus our resources on selling and delivering our existing products to clients.
At the time of our interim results announcement in November 2000 we stated our intention of further strengthening the Group’s balance sheet. We have addressed this by the negotiation of a significant commercial deal with a large US company. A confidentiality clause prevents us from disclosing the details, but contractual negotiations are reaching the final stage. Annnoucements as to the outcome of these negotiations will be made as soon as practicable. In addition, we have reduced our overhead base, which in turn will reduce our rate of cash outflow.
We are extremely encouraged by the continued loyalty shown by our existing clients. Turnover in the third quarter was up 55% from the same quarter in the previous year. In addition, both turnover and customer numbers are higher than the second quarter, with a number of new customers gained following the migration of LIFFE Commodity products to LIFFE CONNECT at the end of November 2000.
EasyScreen has implemented the first stage of the cost-cutting programme announced in the strategy update of November 2000. This has achieved significant savings, which will be evident in the next quarters’ overheads. Given that our core product portfolio is now substantially complete, we believe that these reductions do not materially compromise our ability to maintain and enhance our existing products or our ability to respond to new global developments. We continue to examine our cost base for further cost reduction opportunities.
Overall, our restructuring strategy has given us a lower cost base and a strong focus on the sales and marketing of our exciting and developing range of products.
The company has also made some changes in its management structure. We are delighted to announce the appointment, with immediate effect, of John Unwin as Technical Director. He is highly experienced and respected within the industry, and has been closely involved with EasyScreen’s product development for some time. His appointment will strengthen our IT expertise at board level and he will be of great assistance in progressing other global technology opportunities as they arise.
We are sorry to announce that James Adam has decided to resign as a director of the company with immediate effect in order to pursue other interests. The board would like to thank James for his contribution to the company during his time as a director and wishes him every success for the future. I have taken on his responsibilities and appointed a small internal senior management team to assist me in putting our plans into effect.
Product and Connectivity Update
EasyScreen continued to improve and develop its current range of trading software in this period, and the changes are outlined below.
The launch of ADX, which was postponed from its original date of October 2000, went ahead successfully on Friday 12 January 2001. EasyScreen has been granted "preferred solution" status by the Australian exchange and our product was ready to capitalise on the opportunity to work with the new exchange from its inception.
EasyMinder, the EasyScreen risk management system, has now been installed at ten client sites and is performing to expectation. Spread permissioning functionality was added to EasyMinder in the last quarter and this has been very well received by customers.
EasyCell, our sophisticated trading tool which takes exchange data from EasyTrade and links it to Microsoft Excel™ for further calculation, is now is attracting much interest. This allows the trading of spreads and outrights implicitly and explicitly, even when implied pricing is not supported by the host.
The user interface to our Automated Market Making system for options (AMM) is currently being enhanced in response to customer feedback.
EasyRouter, our product that provides access to our exchange drivers, is performing very well under quality assurance testing and will provide the resilient and scaleable foundation necessary for server based access to our exchange drivers, the web product and third party connectivity.
The EasyScreen web front end has undergone revision based on its exposure to customers and now supports true real-time prices.
The EasyScreen data centre is now available and awaiting exchange connectivity to be installed. It is situated in London and will initially support LIFFE and EUREX Futures access through CITRIX. We expect to have a trial operational within the next two weeks, subject to client’s approval.
Development work on EasyScreen connectivity to the Singapore Exchange (SGX) is now complete, technical conformance has been achieved, and we are expecting final exchange certification shortly.
In November we achieved certification to connect into the Sydney Futures Exchange (SFE) SYCOMÂ® Interface, enabling our flexible connectivity options to provide a gateway for domestic and international financial institutions to electronically access the SFE markets.
Current Trading and Outlook
Negotiations regarding a significant commercial deal with a large US based company are nearing completion. Discussions on the full legal contract are currently underway and are progressing well. A further announcement is expected to be made as soon as practicable.
In light of this and a number of other prospects that are in the pipeline, we intend to progress these opportunities before looking to strengthen further our balance sheet by other means. We consider that at present the interests of the company and its shareholders are better served by continuing on this course.
As existing electronic Exchanges develop new contracts and additional Exchanges move away from open outcry, we expect that both our client base and demand for our products will continue to increase.
Our present and potential clients now increasingly seek our assistance in customisation of their software, both for themselves and for use by their clients. We intend to pursue this requirement and are confident that our involvement in this area will result in a new source of revenue.
We are receiving an increasing number of enquiries concerning our products from Europe, America, and Asia. Our overseas offices are well placed to respond to this, and we are focusing sharply on new sales in these regions.
Finally, the Board would like to take this opportunity to thank our staff for their continuing drive and enthusiasm. Their commitment to the success of our business worldwide is much appreciated.
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Tel: 020 7645 4600