Norkom Announces 53% Increase in Revenue and 50% in EBITDA for the Six Months Ended 30 September 2007

    DUBLIN, Nov. 13 /CNW/ - Norkom has announced a 53% increase in revenue to
EUR17.6 million and a 50% improvement in EBITDA (Earnings before interest,
tax, depreciation and amortisation) to EUR3.1 million for the half year ended
30 September 2007 (2007). This period has included the acquisition of Digital
Harbor on 31 July 2007 for EUR26.7 million (US$36.5 million) (excluding
acquisition costs). The Group has executed on its previously stated M&A
strategy whilst continuing to deliver strong organic revenue growth of 45% in
2007. This has resulted in the addition of 19 new clients in 2007, nine of
which stem from organic growth combined with ten clients coming from Digital
Harbor mainly from the tier one US financial services sector.
    Norkom's strong performance has been attributed to good sales success
particularly in North America and also the addition of revenue from our Asia
Pacific region in this period.

    The company reports the following key financial highlights:

    -   Revenue up 53% to EUR17.6 million; (2006: EUR11.5 million)

    -   Gross profit margin increased to 66%; (2006: 65%)

    -   EBITDA up 50% to EUR3.1 million (18% margin); (2006: EUR2.1 million,
        18% margin)

    -   Adjusted EPS up 54% to 3.35 cents; (2006: 2.17 cents)

    -   Net cash balance at 30 September 2007 of EUR21.7 million;
        (2006: EUR26.4 million)

    -   Successful placing raising EUR15.5 million to part-fund acquisition
        of Digital Harbor for EUR26.7 million (US$36.5 million)

    -   Net cash inflow from operating activities increased to EUR3.0 million
        (2006: EUR1.7 million)

    Key business highlights for the half year included the following:

    -   Norkom acquired Digital Harbor in July 2007 whilst also delivering on
        its strategy of organic growth with profits.

    -   Following a review of Digital Harbor's business, Norkom has reached
        agreement with the Digital Harbor founder to transfer the government
        business into a separate entity in which Norkom will make a
        EUR2.15 million (US$3.15 million) investment.

    -   Norkom's market franchise continues to rise with 19 new clients added
        during the period including Washington Mutual, Union Bank of
        California, Permanent TSB, Westpac, Bendigo Bank and St George.

    -   Norkom is evolving its partner channel strategy and has established
        new relationships with IBM, eFunds and Bearing Point in the period,
        to add to existing relationships with Capgemini and Accenture.

    -   Norkom has gained market recognition as an effective enterprise-wide
        financial crime management solution provider most recently by the
        analysts, Gartner.

    Commenting on the interim results Norkom's chief executive officer Paul
Kerley said:
    "When we came to the public markets we articulated a strategy of
delivering strong organic growth with profits while pursuing complementary
acquisitive growth. We are pleased with the progress we have made against this
strategy during this financial period. A strong financial performance has been
achieved across all our regions at a time when the company has been involved
in growing new markets, completing a complex acquisition and raising further
funds on the public markets. In the past couple of years Norkom has invested
heavily in building out its senior management capacity across all our markets
in anticipation of the organic and acquisitive strategy that we would pursue.
It is good to see those investments now paying off. Such success is tangible
evidence of our strategy at work as we consolidate our position as a global
market leader and gain recognition as a provider of innovative enterprise-wide
financial crime and compliance solutions dedicated to the financial services
    The global market for financial crime and compliance solutions continues
to grow by an estimated 24% annually, rising from US$480 million in 2007 to
US$917 million by 2010. This growth is fuelled by a number of factors
including an increase in international anti-money laundering and
counter-terrorist financing regulation, for example the introduction of the
third EU Money Laundering Directive which enters into force on 15 December
this year. In addition, more stringent worldwide enforcement of such
regulations has resulted in over US$222 million being levied in fines to 20
institutions for failing to prevent money laundering in the last two years. On
top of these penalties, the true impact to those organisations affected is
many multiples greater again due to the costs associated with operational
disruption, reputation damage and business recovery.
    Norkom's strategy focuses on providing clients with an end to end,
enterprise financial crime and compliance solution which is underpinned by a
common technology infrastructure enabling them to evolve their use of the
solution in line with both market and business needs. Our approach safeguards
clients' technology investments, increases the effectiveness of their
operations and protects them from escalating losses to fraud. The ability of
Norkom's solutions to impact financial losses while decreasing operational
costs is proving attractive to a market where an estimated 84% of total spend
is attributable to administration and personnel costs. Industry analysts
forecast that technologies, such as Norkom's, can address this issue reducing
operational costs by 15% annually.

For further information:

For further information: Hilary Duffy - Marketing Manager, Email -, Telephone: +353-1-873-9600

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