Interim Results

IS Solutions PLC
27 September 2004

I S SOLUTIONS PLC

INTERIMS RESULTS

Statement by the Chairman, Barrie Clark

The interim results for the 6 months ended 30th June 2004 are in line with the
Board's expectations, with turnover for the Group at £2.85 million (2003: £3.24
million). Pre-tax profits before goodwill amortisation were £63,000 (2003
comparable loss after excluding profit on the sale of investments: £97,000), and
earnings per share before goodwill amortisation and sale of investments were up
to 0.25p  (2003 loss: 0.57p). Cash remains strong at £1.822 million (31st
December 2003: £1.551 million, 30th June 2003: £1.353 million).

Throughout the first half of 2004 we have experienced a gradual improvement in
the general business climate with our existing clients beginning to implement
small projects that have been held back for so long. We have also won a number
of small pieces of project business from new clients which will be implemented
in the second half of the year.

Both the Financial Products sector of our business and the Outsourcing side
continue to operate profitably and Outsourcing has returned to small growth in
the first half (after dropping in 2003) with the downward pressure on pricing
mentioned at the year end having eased back. The Projects division should also
see a small return to growth in the second half although profitability will lag
slightly as we incur recruitment costs for the increase in work.

Dividend

The Board is pleased to announce a dividend for the half year of 0.1p per
ordinary share, which reflects both the improving trading environment and the
strong balance sheet and cash position of the Company. If performance continues
to improve the Board is hopeful of returning to a progressive dividend policy
for the future whilst retaining the flexibility and stability which the
Company's historic cash positions have ensured. The interim dividend will be
paid on 9th November 2004 to shareholders on the register at the close of
business on 8th October 2004.

Outlook

The outlook continues to improve as we move into the second half of the year
with new projects being won. Although these are not of the size of previous
years it is at least a movement in the right direction and the Board is
optimistic about the Group's prospects.

On behalf of the Board

Barrie Clark, Chairman.
27th September 2004

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 30 JUNE 2004


                                                               Six months          Six months                Year
                                                                    ended               ended               ended
                                                                  30 June             30 June         31 December
                                                                     2004                2003                2003
                                                              (Unaudited)         (Unaudited)           (Audited)
                                            Note                    £'000               £'000               £'000

Turnover                                                            2,849               3,236               5,985
Cost of sales                                                     (1,602)             (1,920)             (3,412)
                                                                 --------            --------            --------
Gross Profit                                                        1,247               1,316               2,573
Distribution costs                                                  (841)               (996)             (1,977)
Administration expenses including
   amortisation of goodwill                                         (584)               (666)             (1,272)
                                                                 --------            --------            --------
Operating loss                                                      (178)               (346)               (676)
Profit on sale of discontinued
   operation                                                            -                   -                   3
Profit on sales of investments                                          -                 455                 455
Interest receivable                                                    27                  10                  30
                                                                 --------            --------            --------

Profit on ordinary activities
   before amortisation                                                 63                 358                 265
Amortisation of goodwill                                            (214)               (239)               (453)
                                                                 --------            --------            --------
(Loss)/profit on ordinary
   activities before taxation                                       (151)                 119               (188)
Tax on (loss)/profit on ordinary
   activities                                                           -               (125)                (42)
                                                                 --------            --------            --------
Loss on ordinary activities after
   taxation                                                         (151)                 (6)               (230)
Equity minority interests                                             (1)                (45)                   9
                                                                 --------            --------            --------
Loss for the period                                                 (152)                (51)               (221)
Dividends                                       2                    (25)                   -                   -
                                                                 --------            --------            --------
Transferred to reserves                                             (177)                (51)               (221)
                                                                 --------            --------            --------
Loss per ordinary share                         3                 (0.61)p             (0.21)p             (0.89)p
                                                                 --------            --------            --------

Earnings per ordinary share
   before goodwill amortisation                                     0.25p               0.76p               0.94p
                                                                 --------            --------            --------
Diluted loss per ordinary share                 3                 (0.61)p             (0.21)p             (0.89)p
                                                                 --------            --------            --------
Dividends per ordinary share                    2                   0.10p                   -                   -
                                                                 --------            --------            --------





CONSOLIDATED BALANCE SHEET AS AT 30 JUNE 2004
                                                                    As at               As at               As at
                                                                  30 June             30 June         31 December
                                                                     2004                2003                2003
                                                              (Unaudited)         (Unaudited)           (Audited)
                                                                    £'000               £'000               £'000
Fixed assets
Intangible assets                                                     350                 833                 591
Tangible assets                                                       286                 366                 319
Investments                                                             4                   4                   4
                                                                 --------            --------            --------

                                                                      640               1,203                 914
Current assets
Debtors                                                             1,593               1,995               1,505
Cash at bank and in hand                                            1,822               1,353               1,551
                                                                 --------            --------            --------

                                                                    3,415               3,348               3,056
Creditors
Amounts falling due within one year                               (1,330)             (1,427)             (1,069)
                                                                 --------            --------            --------
Net current assets                                                  2,085               1,921               1,987
                                                                 --------            --------            --------
Total assets less current
   liabilities                                                      2,725               3,124               2,901

Equity minority interests                                              52                   -                  53
                                                                 --------            --------            --------
Net assets                                                          2,777               3,124               2,954
                                                                 --------            --------            --------
Capital and reserves
Called up share capital                                               496                 496                 496
Share premium account                                               2,133               2,133               2,133
Profit and loss account                                               148                 495                 325
                                                                 --------            --------            --------
Equity shareholder's funds                                          2,777               3,124               2,954
                                                                 --------            --------            --------


CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2004

                                                                Six months          Six months                Year
                                                                     ended               ended               ended
                                                                   30 June             30 June         31 December
                                                                      2004                2003                2003
                                                               (Unaudited)         (Unaudited)           (Audited)
                                                                     £'000               £'000               £'000

Net cash flow from operating
   activities                                                          278               (166)                  16
                                                                  --------            --------            --------
Returns on investments and servicing
   of finance
Interest received                                                       27                  10                  30

Taxation                                                                 1                 (3)                  48
Capital expenditure
Purchase of tangible fixed assets                                     (47)                (64)               (125)
Sale of tangible fixed assets                                           12                  17                  20
Sale of investments                                                      -                 480                 480
                                                                  --------            --------            --------
Net capital expenditure                                               (35)                 433                 375
Acquisitions and disposals
Sale of subsidiary                                                       -                   -                   3

                                                                  --------            --------            --------

Increase in cash in period                                             271                 274                 472
                                                                  --------            --------            --------


NET CASH FLOW FROM OPERATING ACTIVITIES

                                                                Six months           Six months               Year
                                                                     ended               ended               ended
                                                                   30 June             30 June         31 December
                                                                      2004                2003                2003
                                                               (Unaudited)         (Unaudited)           (Audited)
                                                                     £'000               £'000               £'000

Operating loss                                                       (178)               (346)               (676)
Net depreciation charge                                                 95                 136                 258
Amortisation of goodwill                                               214                 239                 453
Change in working capital                                              147               (195)                (19)
                                                                  --------            --------            --------
Net cash flow from operating activities                                278               (166)                  16
                                                                  --------            --------            --------


RECONCILIATION OF NET CASH FLOW TO MOVEMENTS IN NET FUNDS

                                                                Six months          Six months                Year
                                                                     ended               ended               ended
                                                                   30 June             30 June         31 December
                                                                      2004                2003                2003
                                                               (Unaudited)         (Unaudited)           (Audited)
                                                                     £'000               £'000               £'000

Increase in cash in the period                                         271                 274                 472
Translation differences                                                  -                (15)                (15)
                                                                  --------            --------            --------
Movements in net funds in the period                                   271                 259                 457
Net funds at start of period                                         1,551               1,094               1,094
                                                                  --------            --------            --------
Net funds at end of period                                           1,822               1,353               1,551
                                                                  --------            --------            --------

STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

                                                                Six months          Six months                Year
                                                                     ended               ended               ended
                                                                   30 June             30 June         31 December
                                                                      2004                2003                2003
                                                               (Unaudited)         (Unaudited)           (Audited)
                                                                     £'000               £'000               £'000


Loss for the period                                                  (152)                (51)               (221)
Currency translation differences                                         -                (15)                (15)
                                                                  --------            --------            --------
Total recognised gains and losses                                    (152)                (66)               (236)
                                                                  --------            --------            --------

1.         Basis of preparation

The interim financial information for the six months ended 30 June 2004 and 30
June 2003 does not constitute statutory accounts within the meaning of section
240 of the Companies Act 1985 and has not been audited by the Group's auditors.
The financial information for the year ended 31 December 2003 has been extracted
from the statutory accounts for that year which have been filed with the
Registrar of Companies and which contain an unqualified audit report and did not
contain a statement under s237(2) or (3) of the Companies Act 1985.

The interim financial information has been prepared on the basis of the
accounting policies set out in the statutory accounts for the year ended 31
December 2003.

2.         Dividends

The directors recommend an interim dividend of £24,793 (2003: interim dividend
£nil, final dividend £nil).

3.         Loss per ordinary share

The basic loss per share figure of (0.61)p (2003: interim (0.21)p, final (0.89)
p) has been calculated on the basis of a loss for the period of £152,000 (2003:
interim £51,000, final £221,000) and the weighted average number of shares in
issue of 24,793,190 (2003 interim and final: 24,793,190).  The share options in
issue have no dilutive effect on the loss per ordinary share in any of the
periods disclosed.



END


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