Regulatory
Announcement
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RNS Number: 9660F
SQS Software Quality Systems AG
11 July 2006
Embargoed for 7.00am 11 July 2006
SQS Software Quality Systems AG
Half Year Trading Update
SQS Software Quality Systems AG (AIM:SQS.L) the AIM listed supplier of independent software management services, is pleased to announce that trading conditions in SQS's major markets continue to be encouraging, with revenue for the six months to 30 June 2006 up approximately 18%, in line with the Board's expectations. Revenue growth was entirely organic, demonstrating an acceleration over the 12.5% achieved in 2005 and 8.8% in 2004. Approximately 80% of SQS's revenues are repeat revenues with existing clients.
As announced on 4 July 2006, the UK acquisition of Cresta Group Limited has now been completed. This strategic acquisition has increased SQS's UK revenue three fold and has secured SQS's position as the largest independent software testing and quality management company in the UK. Integration is on track and the acquisition is expected to be earnings enhancing in the current financial year.
The March Preliminary results statement highlighted that, in order to take advantage of current market opportunities, SQS would be investing in staff hiring and training programmes. As such the Board is pleased to report that by end June 2006, the number of skilled consultants employed by the Group stood at 383, up 17% year on year.
During the first half, SQS secured contract continuation with its largest client, a blue chip German public accident insurance business. In addition, SQS was pleased to sign up 26 new clients, including two large logistics project clients and a Swiss and a German asset management company. Within the new market area of embedded systems, revenue in the avionics field was up 75% year on year and SQS signed up two new automotive suppliers.
SQS's strategic objective is to consolidate its position as the largest independent provider of software testing and quality management services in Europe and to that end, the Board is pleased with progress made during the first six months of this financial year.
For further information please contact:
| SQS Software Quality Systems AG | www.sqs.de or www.sqs-uk.com |
| Rudolf van Megen (CEO)/Rene Gawron (CFO) | +49 (2203) 91 54 0 |
| Evolution Securities Limited | 020 7071 4300 |
| Jeremy Ellis/Mike Read | |
| Smithfield | 020 7360 4900 |
| Sara Musgrave/Tania Wild |
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Notes to Editors
SQS is the leading independent pan-European provider of quality management and testing services for software development. Headquartered in Cologne, Germany, SQS has over 700 employees with operations across the world including UK, Netherlands, Switzerland, Austria, Ireland and South Africa. SQS also has a minor stake in an operation in Portugal and a partnership operation in Spain. In May 2006, SQS made its first acquisition since joining AIM in September 2005, buying Cresta Group Ltd in the UK for a consideration of up to £18m. The acquisition increased SQS's UK revenue three fold and secured SQS's position as the largest independent software testing and quality management company in the UK. The acquisition is expected to be earnings enhancing in the current financial year.
With over 3,000 completed projects under its belt, SQS has a strong customer base including half of the DAX 30 companies and 30% of the STOXX-50. They include names like Dresdner Bank, Lloyds TSB, Deutsche Telekom, Vodafone, Daimler Chrysler, and Airbus spread across the full range of industries. SQS is the first German company to have a primary listing on AIM, completing its IPO on 20 September 2005 raising £10.8m before expenses at an issue price of 190p. SQS is included in the Software and Computer Services sector (9530) within the Computer Services subsector (9533) and has a RIC code of SQS.L. SQS completed a secondary listing on the Deutsche Boerse in Frankfurt on 2nd December 2005. For further information, please visit www.sqs-uk.com
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