Rolfe & Nolan Operating Profit Rises 73%; Merlin Investment to Rise 50%

London, March 1st 2005. Rolfe & Nolan, the leading independent supplier of specialist software and services to the exchange-traded derivatives market, has announced preliminary results for the year ended 28th February 2005. The company anticipates a record operating profit of £5.2m on turnover of £24.4m, up by 12%. This is a 73% increase on the previous year's best ever operating profit of £3.0m (on turnover of £21.8m).

Bob Freeman, Chief Executive, commented: "This is the end of our second full year since we completed our Management Buy Out in early 2003 with the backing of HgCapital. The preliminary numbers speak for themselves and reflect our strong position in the marketplace built over the last 30 years, and also the focus we have been able to apply since we became a private company".

The company will now increase further its investment in its principal new product initiatives, Merlin and EDGE / RANorder as well as continue to improve its core back-office solutions and services across all regions.
Freeman continued: "For the past couple of years we have been carefully consolidating the turnaround in the business and we are now pursuing our growth strategies with the enthusiastic backing of our majority shareholder, HgCapital. Last year's pure development spend on our flagship new system, Merlin, was well over £1 million and on the back of our exceptional performance we are increasing that investment by over 50% in the coming year. Specifically, the money will be deployed on advancing the roll-out of the Trade & Position Management central core of the new system. In addition, we will be providing new components to handle increasingly complex exchange fee structures, risk management and also U.S. exchange links as those markets move increasingly to FIXML standards.

Merlin is the modern technology and multi-asset capable system that our market is looking for. All the rival derivatives back office systems are at least 15 years old. We are the only vendor with a long-term perspective and who are investing in a brand new system as our competitors are either too small, or are tied to maintaining earnings in a marketplace which is demanding investment. At the same time we are putting more investment into our Order Routing initiative, RANorder, which is experiencing rapid market adoption on the back of our unique ASP capability and brand new front end, EDGE. The market also appreciates that we are a stable and profitable supplier in the uncertain ISV space. Revenues from RANorder grew by 27% in the year and we have ambitious plans for the forthcoming year".

Nic Humphries, Director of HgCapital, said "We are proud to have backed the management and staff at Rolfe & Nolan. Prior to the buy-out revenues were flat and profits were only between £1m and £2m a year. Since the buy-out profits have risen to more than £5m, but even more importantly, we have doubled R&D investment in new products which has raised revenue growth to over 12%. As a result, Rolfe & Nolan is growing faster and more profitably than at any time in its history".

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