Interim Results

Clarity Commerce Solutions PLC
29 November 2001

Clarity Commerce Solutions Plc

Interim Statement

Financial Review

We are pleased to report that the Group has made excellent progress during the
half year, ending 30th September 2001. Our results show a significant
improvement over the corresponding period for last year.


We are pleased to report that during the half year, the Group approached
breakeven, producing a much reduced operating loss of £80,000 (2000: £312,000)
before goodwill amortisation of £173,000 (2000: £132,000), and interest
payable of £23,000, (2000: £58,000). Turnover for the half year was up by 68%
to £2,428,000. (2000: £1,448,000)


Clarity has continued its stated strategy of building the business through
organic growth with some major contracts secured, and through acquisition,
successfully acquiring Flex Systems which brings further market and software
synergy to the Group.


In October, despite the difficulties in the stock market occasioned by world
events in September, Clarity raised £2,560,000 gross in a Rights Issue which
reflected strong support for the Group despite the turmoil.


The Rights Issue monies will be used for working capital requirements, in
order to fund Clarity for the next stage of its growth, that of resourcing to
win and deliver major accounts.


Operating Review


The six months covered by these results have featured sustained sales and
marketing effort. This has resulted in some excellent contract wins, and
increased the awareness of Clarity throughout the hospitality industry.


A key win for the group has been the contract with Laurel Pub Company
announced earlier today, which will contribute £2,400,000 of software and
hardware revenues over the next year. Microtrain has also been appointed by
Laurel for the implementation of the above contract, which is expected to be
worth circa £900,000.


A further immediate win for the Group has been the selection by Grey Archer of
Clarity systems for their planned five year rollout of their on-line
procurement exchange in 15,000 tenanted pubs commencing January 2002. Our
solutions will be offered to Grey Archer's customer base as an added value
product by their sales force.


The product offering within the hospitality market has been widened through
the recent acquisition of Flex Systems, completed on 15th October, for an
initial consideration of £2,100,000.


Flex specialises in leisure management systems, primarily for the local
authority marketplace. Their software enables council run sport and leisure
facilities to deal with admissions, bookings, and memberships, and provide the
high level of reporting required by local authorities.


Flex is a profitable company in a robust market area and its existing Board,
all of whom are retained, are committed to maintain their profit growth in
their present market. In addition, work has commenced on developing the
synergies between Clarity and Flex, with the aim of addressing the needs of
the privately owned leisure facility market.


The Board has now successfully integrated Microtrain, and we are now seeing
the benefits and synergies coming through.


The recent win with Laurel Pub Company is a clear demonstration of that
synergy, with Microtrain providing key support services for Clarity software.


The Group is also currently undertaking additional pilots in other hospitality
groups that could lead to further business.


Employees


We would like to take this opportunity of welcoming the Flex Directors and
their staff to this fast growing Group, and to thank all those within Clarity
and Microtrain for their sustained and successful efforts.


Current trading and Prospects


The hospitality market has been resilient in the face of recent economic
events, although some sectors such as restaurants and hotels have clearly
suffered. There is evidence of some postponement of IT spending, but the Board
is confident that our share of the hospitality solutions market will continue
to grow. It is also noteworthy that many groups are seeing Clarity systems as
vital to the protection of margins and profits.


A number of Clarity contracts feature the added benefit of continuous rollout
and recurring income. We continue to roll solutions out with the Punch
development division and Signature Restaurants (previously Belgo). Since being
chosen by the National Union of Students as the preferred supplier, four
universities have installed Clarity systems.


Other installations have been in Spain with Pizza Express's expansion of the
San Marzano pizza brand, and the Hartford Group which includes the famous
Pharmacy restaurant.


All these recent developments support the view of the board, namely that the
Group is firmly on track to establish itself as the leading provider of
software solutions in the hospitality market.


Current trading is in line with expectations and the Board looks forward to a
satisfactory result for the year.




A L R Morton

Group Chairman


G York

Group Chief Executive




CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the period ended 30 September 2001





                                                 Period       Period     Period
                                                1 April   24 January 24 January
                                                   2001         2000       2000
                                                     to           to         to
                                           30 September 30 September   31 March
                                                   2001         2000       2001
                                              Unaudited    Unaudited    Audited

                                     Notes        £'000        £'000      £'000

Turnover                                          2,428        1,448      3,552
Cost of sales                                     1,034          825      1,881
Gross profit                                      1,394          623      1,671
Operating costs                                 (1,647)      (1,067)    (2,699)
Operating loss after amortisation
of goodwill                                       (253)        (444)    (1,028)

Operating loss is analysed between:
Operating loss before goodwill
amortisation                                       (80)        (312)      (724)
Goodwill amortisation                             (173)        (132)      (304)
Operating loss after goodwill
amortisation                                      (253)        (444)    (1,028)

Interest receivable                                   -            -         15
Interest payable and similar charges               (23)         (58)       (98)

Loss on ordinary activities before
taxation                                          (276)        (502)    (1,111)
Taxation on loss on ordinary
Activities                           2                -            -          -
Retained loss for the period                      (276)        (502)    (1,111)

Loss per ordinary share              3
- basic                                         (2.92)p       (8.9)p   (15.35)p
- fully diluted                                 (2.84)p       (8.4)p   (14.75)p
- adjusted basic                                (1.09)p       (4.8)p    (9.42)p
Dividends per share                  4                -            -          -


CONSOLIDATED BALANCE SHEET

At 30 September 2001

                                                       At           At       At
                                             30 September 30 September 31 March
                                                     2001         2000     2001
                                                Unaudited    Unaudited  Audited

                                       Notes        £'000        £'000    £'000

Fixed assets
Tangible Assets                                       166          208      190
Intangible assets                                       3           19        5
Goodwill                                            4,391        4,775    4,564
                                                   ------       ------   ------
                                                    4,560        5,002    4,759
                                                   ------       ------   ------

Current assets
Stocks                                                353          265      215
Debtors                                             1,848        1,134    1,268
Cash at bank and in hand                               58        1,060      555
                                                   ------       ------   ------
                                                    2,259        2,459    2,038
                                                   ------       ------   ------

Creditors: amounts falling due
within one year                                   (1,674)      (1,474)  (1,354)
Net current assets                                    585          985      684
Total assets less current liabilities               5,145        5,987    5,443
Creditors: amounts falling due after
more than one year                                (1,023)        (980)  (1,045)
                                                   ------       ------   ------
Net assets                                          4,122        5,007    4,398
                                                   ------       ------   ------
Capital and reserves
Called up share capital                             2,361        2,361    2,361
Share premium account                               3,148        3,148    3,148
Profit and loss account                           (1,387)        (502)  (1,111)
                                                   ------       ------   ------
Equity shareholders' funds                          4,122        5,007    4,398
                                                   ------       ------   ------


CONSOLIDATED CASH FLOW STATEMENT

For the period ended 30 September 2001
                                                 Period         Period   Period
                                           1 April 2001     24 January       24
                                                     to        2000 to  January

                                           30 September   30 September  2000 to

                                                                       31 March
                                                   2001           2000     2001
                                              Unaudited      Unaudited  Audited

                                     Notes        £'000          £'000    £'000

Net cash outflow from operating
activities                                        (402)          (895)    (922)
Returns on investments and servicing
of finance
Interest received                                     -              -       15
Interest paid and similar charges                  (21)           (42)     (80)
Interest element of hire purchase
and
finance leases                                      (2)            (5)      (8)

Net cash outflow from returns on
investments and servicing of
finance                                            (23)           (47)     (73)
Taxation                                              -              -     (88)
Capital expenditure and financial
investment
Purchase of tangible fixed assets                   (9)           (47)     (73)
Sale of tangible fixed assets                         -            166      162

Net cash (outflow)/inflow from
capital
expenditure and financial
investment                                          (9)            119       89
Acquisitions and disposals
Purchase of subsidiary undertakings                   -        (1,438)  (1,438)
Cash at bank acquired with
subsidiary                                            -            246      246

Net cash outflow from acquisitions                    -        (1,192)  (1,192)
Net cash outflow before financing                 (434)        (2,015)  (2,186)
Financing
Issue of share capital (net of                        -          2,890    2,890
costs)
Issue of loan notes                                   -            399      399
Repayment of loan notes                               -          (490)    (490)
Capital element of finance leases                  (13)           (21)     (54)
Bank loan repayments                               (20)           (30)     (41)
Cash placed on short-term deposit                     -          (650)        -

Net cash (outflow)/inflow from                     (33)          2,098    2,704
financing
(Decrease)/Increase in cash in the               ------         ------   ------
period                                            (467)           (83)      518
                                                 ------         ------   ------



NOTES

 1. Nature of the financial information

    The Company prepares statutory accounts annually to 31 March. These are
    the interim accounts covering the six months ended 30 September 2001.


    The results for the period from 24 January 2000 to 30 September 2000 and
    period to 31 March 2001, are extracted from the previous year's interim
    and final accounts respectively.


    The results for the six months ended 30 September 2001 and the period from
    24 January 2000 to 30 September 2000 are unaudited, and have been prepared
    in accordance with the accounting policies set out in the Company's annual
    report.


    The financial information set out above does not constitute statutory
    accounts within the meaning of section 240 of the Companies Act 1985. The
    results for the year ended 31 March 2001 are an abridged version of the
    full statutory accounts that have an unqualified audit report and have
    been delivered to the Registrar of Companies.


 2. Taxation


    There is no taxation charge on the loss on ordinary activities due to
    trading losses during the

    current period.


 3. Earnings per share


    Basic loss per share for the period ended 30 September 2001 is calculated
    by dividing the loss for the period of £276,000 (period ended 30 September
    2000: £502,000, period ended 31 March 2001: £1,111,000) by 9,445,987
    (period ended 30 September 2000: 5,626,561, period ended 31 March 2001:
    7,235,671) being the weighted average number of shares in issue during the
    period.


    The adjusted basic loss per share for the period ended 30 September 2001
    is calculated by dividing the loss for the period before amortisation of
    goodwill of £173,000 (period ended 30 September 2000: £370,000, period
    ended 31 March 2001: £807,000) by 9,445,987 (period ended 30 September
    2000: 7,686,558, period ended 31 March 2000: 8,563,862) being the weighted
    average number of shares during the period.


    The diluted loss per share has been calculated on the basic loss and the
    weighted average number of shares in issue during the period 9,445,987
    plus an additional 280,328 (period ended 30 September 2000 and 31 March
    2001: 299,074) shares representing the fair value of the weighted average
    number of shares under option during the period.




    4.      The Company does not propose the payment of a dividend.