Software company RS2 has reported a profit before tax of €4.2 million, although income tax of €1.4 million reduced the figure to €2.8 million.

The group explained that the €1.4 million was made up of €1.3m in current tax charge and €0.1m in deferred tax charge, the latter being a non-cash item.

“2014 is the first year in which the group will be paying income tax in cash since it has made full use of the investment tax credits brought forward from prior years.

“New investment tax credit on investment carried out during the year was accumulated, however, this was also fully used up by the income tax payable, leaving a tax balance of €1.4 million payable in cash,” the company said in its reports.

An increase of 84 per cent in service fees across the group

“The amount of income tax that would have been payable in the absence of such investment tax credit would have been €1.9 million.

“Nevertheless, we highlight that there is still a significant balance of profits that have been relieved from tax by way of investment tax credit in the past and which remain tax free in the hands of the shareholders when distributed as dividends.”

RS2 saw revenue grow to €15.2 million, an increase of just under 8.0 per cent over 2013. Consistent with prior years the revenue is composed of licence fees for the use of its Bankworks software solution, maintenance fees, service fees and processing fees.

In comparison with 2013, licence fees decreased by 46 per cent, even though it secured its largest contract to date, with a total value of €16.5 million, as part of the licence fee will be recognised over the coming years.

The decrease in licence fees was more than made up for by an increase of 84 per cent in service fees across the group.

The group said that there were other contracts in the pipeline with subsidiary RS2 Smart Processing confirming two new clients during the year, with their revenue to be earned over 2015.

Earnings before interest, tax, depreciation and amortisation (Ebitda) of the group for 2014 amounts to €6.1 million, which represents an increase of 7.0 per cent over 2013.

The total equity attributable to shareholders was €23 million, an increase of €1.4 million over 2013.