Final Results

Comino Group PLC
29 May 2002



                         COMINO GROUP PLC: FINAL RESULTS
                          Second half return to profit


Comino Group plc ('Comino'), the provider of software based business solutions
for Social Housing, Local Government (LG) and Occupational Pensions
administration, announces Final Results for the year ended 31 March 2002.

In his report, David Quysner, the Chairman, made the following statements:

'Trading in core operations during the second half-year was profitable and
recovered the losses reported for the first six months. Core operations produced
a small pre-tax profit of £37,000 (2001: £3.62m) for the year as a whole. After
charging amortisation of goodwill of £299,000 (2001: £277,000) and Comino
Techflow costs of £314,000 (2001: £113,000), the reported loss on ordinary
activities before taxation for the year is £576,000 (2001: £3.23m profit).'


Financial Highlights

  • Turnover held up at £20.6m (2001:£21.4m).
  • Gross profit margin of 77% (2001:79%).
  • Final dividend of 1.1 p; Total dividend for the year 3.0 p (2001:5.7p).
  • Cash balances at £5.2m (2001:£8.1m) after spending £1.44m on Dudley
    freehold.


Operational Highlights

  • Social Housing remained profitable at reduced level with outlook
    improving.
  • Significant LG contracts late in the year: Liverpool, Tandridge, South
    Somerset.
  • LG contracts in April: Norwich Connect consortium, North Wiltshire.
  • Second LG Occupational Pensions contract: South Tyneside MBC.
  • Order book (excluding recurring revenues) up 27% compared to last year.


In the Review of Operations, Garth Selvey, Group Chief Executive, commenting on
outlook said:

'After four years of continuous growth, Comino has, in common with many other
fundamentally sound  application companies, experienced a difficult year of
trading. In financial terms, a break even result for such a strong core business
is disappointing. However, unlike many companies, Comino has managed its
investment in people and continued its strategic developments. Recent contract
wins are testimony to the fact that this development has maintained our
competitive edge.

The second half of the year was profitable and we start the new financial year
with a strengthened product portfolio, improved stature within our market
sectors and the confidence that Comino is equipped for growth.'



Enquiries

Comino plc                                                                Binns & Co PR Ltd
Garth Selvey, Chief Executive        Tel: [phone] on the day        Peter Binns, Paul McManus
Paul Clifford, Finance Director      Thereafter: 01628 525 433            Tel: [phone]






Editor's notes:

Comino provides software solutions for Social Housing, Local Government and
Occupational Pensions administration. Comino uses its own computerised, business
process technology, notably workflow and electronic document management software
to provide multi-departmental solutions within these sectors. Workflow and
Electronic Document Management are increasingly regarded as essential to any
successfully automated business process.

Comino provide workflow and electronic data management systems to over 400
organisations in Occupational Pensions, Social Housing and Local Government:

  • Comino serves some 50 organisations looking after more than 1.2
    million pensioners. Three of these organisations manage more than 170,000
    pension accounts each.

  • Comino serves some 250 Registered Social Landlords looking after more than
    800,000 homes and some two million occupants. The largest organisation
    Comino's systems handle has 55,000 homes; the smallest just a few hundred.

  • Comino serves over 70 Local Authority Revenue and Benefit departments
    who look after more than four million council tax payers, business rate 
    payers and benefit recipients.

Comino's operating companies are based near Maidenhead and in Leeds, Croydon and
the West Midlands.



'This is the first step down a brand new road for us and it has proved that our
suppliers, Comino, have come of age. Their service has been absolutely first
class and the technical implementation has been excellent.'

Frank Kay, Director of Business Systems, Shaftesbury Housing Group


'Comino's usage of a modern process based solution in our Revenues & Benefits
department has proved its worth. The authority has decided to extend those
benefits to other departments including Highways & Parks, Cabinet Office and
Traffic & Transport using the same technology.'

John Wordley, ICT Client Services, Cardiff County Council.


'South Tyneside is the second authority to adopt Comino's local government
version of 'Universal Pensions Management'. It is already clear to us that many
other authorities will find the performance of this product attractive.'

Stephen Moore, Head of Pensions, South Tyneside, MBC




Chairmans Statement

I am pleased to report that the second half-year of trading has shown a
considerable improvement over the first six months. As a consequence, Comino has
achieved the return to profitability in the second half that was anticipated in
the Interim Report.

Trading in core operations during the second half-year was profitable and
recovered the losses reported for the first six months. Core operations produced
a small pre-tax profit of £37,000 (2001: £3.62m) for the year as a whole. After
charging amortisation of goodwill of £299,000 (2001: £277,000) and Comino
Techflow costs of £314,000 (2001: £113,000), the reported loss on ordinary
activities before taxation for the year is £576,000 (2001: £3.23m profit).

In a year that proved difficult for many companies in the sector, Comino's
performance was affected by three principal factors, particularly in the first
half-year. These were a slowdown in business generally and particularly local
government; increased development costs to meet customer needs in Occupational
Pensions; and a level of overheads that had been increased to support
anticipated growth. As noted below, there have been improvements in the local
government sector through the year; the pensions development issues are largely
resolved and there are signs of growth in the business generally that justify
the decision to maintain our investment in people and the associated costs.

Turnover for the year did not grow as had been expected but held up at £20.6m,
compared with £21.4m in the previous year. The gross profit margin of 77% was
close to last year's level of 79% and remains indicative of what can be achieved
in a high quality applications software company.

The improved performance in the second half gives grounds for cautious optimism
and a final dividend of 1.1 pence per share is proposed for payment on 26 July
2002  to shareholders on the register  at 28 June 2002. This will take the total
for the year to 3 pence per share, compared with 5.7 pence last year.

Cash balances at the year-end were £5.2m after making payment of £1.44m on our
new freehold office in Dudley. This compares with balances of £8.1 million at
the end of the previous year.

The Social Housing Division, which accounted for approximately half of turnover,
remained profitable for the year, albeit at a reduced level. Recurring revenues
and a high level of service delivery to the customer base were partly able to
compensate for a reduction in new project starts. Considerable progress was made
in the further development and implementation of our new generation products.
Customer interest remains high and adoption rates of this new technology
continue to increase.

The Occupational Pensions Division, which is considered to have high growth
potential, accounted for ten per cent of turnover and ended the full year at
very close to break even. At the half year, this division was forced to slow
down its intake of new business to focus resources on development issues that
represent an important investment in the future. Following the implementation of
the major part of the contract at the West Midlands, the division was able to
win its second local authority customer, South Tyneside.  This installation will
benefit substantially from the development work that has been done during the
year. The prospect list for the pensions product is growing steadily.

After a very poor start, Local Government new contract wins improved towards the
end of the year. In the main, the problem was one of delayed decisions rather
than a loss of orders to the competition. Slow progress in our Local Government
business also affected Saffron, an acquisition that was further integrated into
the main operating company in July 2001. The combined division produced 40
percent of Group turnover but returned a significant loss. However, in the
closing months of the year, the division won a number of contracts including
Liverpool, Tandridge and South Somerset and in April went on to win North
Wiltshire and part of a consortium bid to Norwich Connect, the latter being our
largest ever Local Government contract. Norwich Connect illustrates our
increasing ability to supply corporate, in addition to departmental, solutions
to Local Government. The division was also able to bring forward an upgrade
product for its existing clients in Revenue and Benefits departments and now has
a lower overall dependence on new name business as it moves forward into the new
year.

Comino Techflow continued steadily to develop its products for Professional
Services Automation (PSA) and in the new year expects some modest revenues to
defray its ongoing costs. During the latter half of the year it also contributed
to the development of the pensions payroll product. We continue to believe that
Comino Techflow's products will complement our core activities and that the
company can produce healthy revenues for the Group.

In May 2002,  the Comino Group increased its shareholding in Comino Montal plc
from 49% to 72% at a cost of £124,000. The name of the company has been changed
to Comino Connect plc and the minority shares are now owned by its senior
employees.  Comino Connect supplies ISP and ASP services as well as remote
network management. Its turnover for the year ended 31 March 2002 was £1.03m
(2001:£554,000) and the company broke even before amortisation of goodwill. The
company is well placed to continue its growth.

Comino has managed its way through a period that has been difficult for many
companies in the industry. Although short-term profitability has been adversely
affected, the Group has continued to invest in its future, through continuing
product development and by remaining responsive to the needs of its customers.
We believe that all divisions are now well positioned to realise the benefits of
the year's substantial effort and investment.

This has been a difficult and hardworking year at all levels and once again I
would like to thank all our employees for their contribution, which has helped
underpin very positive prospects for the future of the Comino Group.


David Quysner
Chairman




Review of Operations


Social Housing

The Social Housing Division accounted for £10m of turnover. The division is now
responsible for all Housing activity other than local government housing
departments and will continue to develop an increased focus on existing Housing
Associations and those formed by stock transfers from local authorities.
Technology and development are shared where appropriate with the Local
Government Division.

The division achieved a similar level of turnover to the previous year but with
increased services to the customer base partly replacing a 26% fall in product
gross profit. In common with other parts of the groups, overheads had been set
to accommodate growth which did not materialise during the year.  However, as
with other divisions, there are signs that  trading is now improving.

Social Housing also applied significant effort to product development in order
to be well prepared to take advantage of improved trading conditions. Progress
has been made not only on workflow and the business process reengineering of
legacy systems but also on the modernisation of the back office transaction
elements of the housing process.



Occupational Pensions

The Occupational Pensions Division is the smallest and contributed £2.1m of the
group's turnover, a 20% reduction on the previous year. This performance
produced a break-even result. The decision was taken early in the year to
increase the focus on development and as a consequence, the capacity to take on
new business was restricted. To do otherwise would have damaged customer
confidence and the high long-term growth potential of the Universal Pensions
Management (UPM) Product.

Occupational Pensions is active on three major fronts; the private sector, the
local government sector and the third party administration sector. The latter is
particularly demanding because it covers a far wider range of pension scheme
rules and processing options.

The development issues were managed and then a logical order of return to new
business established. With highly consistent scheme rules across most
authorities, local government pensions business offers a return to growth
without jeopardising other opportunities. The configuration and installation
work carried out at the West Midlands is widely applicable to other authorities.

Development work being carried out on third party administration is also
spearheading improvements that will save further time on configuration and
installation work as a basis for the next version of the product.

The division is maturing and with the South Tyneside MBC contract win, the
strategy is beginning to take effect with other local authorities registering a
keen interest in developments. With contract wins from Scottish Public Pensions
and the Irish Department of Social Welfare, the division starts the year in a
more balanced position with a good order book and the potential for strong
growth.



Local Government

The Local Government Division accounted for £8.5m of turnover, half of which was
attributable to the integrated Saffron customer base, which was acquired in July
2000. The prospect list remained healthy but new contract completions  were very
slow and only started to improve later in the year. Despite some notable late
success, new project revenue was £1.6m down on the previous year.

Overall, the division produced a significant loss in the first half including
some expected non-recurring losses from the Saffron element. The second half
recovered but left the division in loss for the year as a whole.

Spare resource was absorbed by accelerating development and upgrade products are
now available for local government housing and Revenue & Benefits customers. As
a consequence, there is a lower dependence on new contract wins as we start the
new financial year.

More importantly, the local government operation is now structured and equipped
for both departmental and corporate bids and much work has been completed to
make this possible. In particular, the division now has its own housing
strategy. This shares common technical foundations but differs in a local
authority framework from the needs of Housing Associations which are now the
clear focus of the Social Housing division.

The Norwich Connect contract, which was secured in April, involves Comino
supplying the software and business process tools to Norwich City Council as
part of a consortium involving Integris (now known as Steria), KPMG and BT.
Comino's £5m contract will provide  workflow, electronic document management and
citizen relationship management software and services over a fifteen year
period. Comino has previously provided workflow and document management systems
to Norwich City Council for use in its Revenues and Benefits department.

The Norwich Connect project has also been given Pathfinder Status by the
Treasury, which means that it may be used as a blueprint by other local
authorities to help modernise working methods. We believe that this is the first
full scale e-government project of its type and such projects are at the heart
of Comino's ongoing local government strategy to enhance service delivery and
performance within all local government departments.

Over one hundred local authorities now use our Housing or Revenue & Benefits
products. Some may take an approach similar to Norwich Connect, others will seek
improved efficiency on a department by department basis. Comino supports both
routes effectively.



Other Activity

The newly renamed Comino Connect (formerly Comino Montal) became a subsidiary of
the group in May 2002. In the near term the company will continue to develop its
business and be broadly neutral in profit and loss  terms. It has a turnover of
£1m, a large proportion of which is recurring annual revenue from 150 customers,
60 of whom are in the Housing sector. Its product portfolio includes the
provision of ISP services with guaranteed business bandwidth, ASP and server
management, remote network management and the provision of VPN (virtual private
network) circuits for homeworking.

Comino Consulting is a small but growing group of professional consultants
involved in such areas as business process reengineering, on-line procedural
documentation and system performance reviews. Comino Consulting is largely
autonomous from the core  Divisions in its operation and brings added value to
the implementation and efficiency of any business process.

Comino Techflow is continuing its development of Professional Services
Automation and is seeking some early customer involvement to further that
development and produce a controlled amount of revenue. Much of the Comino
Group's business is increasingly of a Customer Relations Management ('CRM')
nature although we refer to it within our traditional sectors as 'Business to
Public'. PSA is similarly to do with the processes, both back and front office,
that reinforce the service relationship with customers.

The development of our core Electronic Document Management (EDM) and Workflow
technology has continued to keep pace with increasing demands from all the
group's divisions. The group correctly emphasises the overall value of its
solutions but this technology increasingly contributes to that value in its own
right.



The Outlook

After four years of continuous growth, Comino has,  in common with many other
fundamentally sound  application companies, experienced a difficult year of
trading. In financial terms, a break even result for such a strong core business
is disappointing. However, unlike many companies, Comino has managed its
investment in people and continued its strategic developments. Recent contract
wins are testimony to the fact that this development has maintained our
competitive edge.

The second half of the year was profitable and we start the new financial year
with a strengthened product portfolio, improved stature within our market
sectors and the confidence that Comino is equipped for growth.


Garth Selvey
Group Chief Executive




Consolidated Balance Sheet
At 31 March 2002

                                                                                    2002                 2001
                                                                                    £000                 £000
Fixed Assets
Intangible assets                                                                  2,441                1,991
Tangible assets                                                                    3,077                1,421
Investment in associate                                                              987                1,021
                                                                                   6,505                4,433


Current assets
Stocks                                                                               130                   67
Debtors                                                                            7,787                9,535
Cash at bank and in hand                                                           5,161                8,136
                                                                                  13,078               17,738

Creditors:  amounts falling due within one year                                  (4,424)              (6,349)

Net current assets                                                                 8,654               11,389

Total assets less current liabilities                                             15,159               15,822

Deferred income                                                                  (6,447)              (6,763)

                                                                                   8,712                9,059

Capital and reserves
Called up share capital                                                              694                  690
Share premium account                                                              4,773                4,511
Shares to be issued                                                                  360                    -
Profit and loss account                                                            2,915                3,824
Shareholders' Funds                                                                8,742                9,025

Minority interest - equity                                                          (30)                   34

                                                                                   8,712                9,059




Consolidated Profit and Loss Account
For the year ended 31 March 2002

                                                                                    2002                 2001
                                                                                    £000                 £000
Turnover
Continuing operations                                                             20,560               17,984
Acquisitions                                                                           -                3,452
                                                                                  20,560               21,436

Cost of sales                                                                    (4,692)              (4,517)

Gross profit                                                                      15,868               16,919
Administrative expenses                                                         (16,566)             (14,052)

Operating (loss)/profit
Continuing operations                                                              (698)                3,200
Acquisitions                                                                           -                (333)
                                                                                   (698)                2,867

Share of operating (loss)/profit of associate                                       (34)                    1

Interest payable                                                                       -                 (19)

Interest receivable                                                                  156                  384

(Loss)/profit on ordinary activities before taxation                               (576)                3,233

Tax on loss/profit on ordinary activities                                             55                (990)

(Loss)/profit on ordinary activities after taxation                                (521)                2,243

Minority interest                                                                     30                   46

(Loss)/profit for the financial year                                               (491)                2,289

Dividends                                                                          (418)                (785)

(Loss)/profit retained for the financial year                                      (909)                1,504



Basic (loss)/earnings per share                                                   (3.8)p                16.7p

Diluted (loss)/earnings per share                                                 (3.8)p                16.3p

Adjusted (loss)/earnings per share                                                (1.6)p                18.7p



There were no recognised gains or losses other than the loss for the year.





Consolidated Cash Flow Statement
For the year ended 31 March 2002

                                                                                        2002             2001
                                                                                        £000             £000

Net cash inflow from operating activities                                                324            2,172

Returns on investments and servicing of finance
Interest received                                                                        156              384
Interest paid                                                                              -             (19)

Net cash inflow from returns on investments and servicing of finance                     156              365

Taxation                                                                               (347)          (1,927)

Capital expenditure and financial investment
Purchase of tangible fixed assets                                                    (2,325)            (681)
Sale of tangible fixed assets                                                             43               12

Net cash outflow from capital expenditure and financial investment                   (2,282)            (669)

Acquisitions and disposals
Purchase of subsidiary undertaking                                                      (29)          (2,640)
Cash and overdrafts acquired                                                               -                1
Investment in associate                                                                    -          (1,020)

Net cash outflow from acquisitions and disposals                                        (29)          (3,659)

Equity dividends paid                                                                  (791)            (684)

Financing
Issue of shares                                                                            -              143
Capital element of finance lease rentals                                                 (6)             (39)

Net cash (outflow)/inflow from financing                                                 (6)              104

Decrease in cash                                                                     (2,975)          (4,298)




Notes


1. The loss per ordinary share has been calculated on the loss for the
financial year of  £521,000 after taxation and minority interest and on
13,863,302 ordinary shares being the weighted number of ordinary shares in issue
during the year.  The calculation of diluted loss per share takes account of
share options that do not currently rank for dividends but may do so in the
future.  The adjusted loss per share excludes amortisation of goodwill of
£299,000.


2. The financial information set out above does not constitute the
statutory accounts for the period ended 31 March 2002 within the meaning of
Section 240 of the Companies Act 1985.  Statutory accounts for the year will be
delivered to the Registrar of Companies following the Company's Annual General
Meeting.


3. The annual report and accounts will be posted to shareholders on 11
June 2002 and will also be available on request from the company's registered
office, Comino House, Furlong Road, Bourne End, Buckinghamshire SL8 5AQ.


4. The directors are recommending a final dividend of 1.1p per share
which, if approved, will be paid on 26 July 2002 to shareholders on the register
on 28 June 2002.


5. The Annual General Meeting will be held at Binns & Co., 16 St Helen's
Place, London EC3A 6DF on Friday 5 July 2002 at 11.30 am.



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