Interim Results

Clarity Commerce Solutions PLC 12 December 2002 Clarity Commerce Solutions Plc Interim Results for the six months ended 30th September 2002 Financial Review We are pleased to report on the financial and trading results for the period ended 30th September 2002. During the half year, the Group reported turnover of £3,399,000 and a loss before goodwill amortisation and interest of £118,000. This first half year has been devoted to securing new business and projects which will contribute revenue in the second half. This provides the directors with confidence that the Group will return a profit before amortisation in excess of our last full years results. In this period, the Group also acquired the assets of Accronym Ltd, which comprises the Vision application software aimed at the sports and fitness marketplace. Operating Review The six months covered by these results have featured the final implementation of the contract with the Laurel Pub Company. Laurel have successfully rolled out Clarity software in over 600 sites, linked to our Clarity Central estate management software. This has delivered revenues to both Clarity and Microtrain. This has provided Clarity with a key reference customer for the pub sector, and, as evidenced by our recent announcement, significant further opportunities within the pub retailing marketplace. The Group has confidence that there are also a number of further opportunities within the pub retailing sector, and hopes to develop these. Flex has delivered a very good set of results across the period and have experienced a very buoyant trading period. New sales opportunities and continued upgrades from existing customers remain strong with sales up by 32% by comparison to the same period last year (1 April to 30 September). Contracts have been secured with Basildon District Council, with LeisureFlex to be installed at all of their 9 leisure centres. Also, Sandwell Metropolitan Borough Council have contracted LeisureFlex to be installed at 10 leisure centres plus head quarters. Three Rivers District Council at Rickmansworth have also just installed LeisureFlex at its 3 leisure centres. Microtrain has been involved in the final implementation of the sites within the Laurel estate, which generated significant additional revenues across the period. Microtrain staff are also working on the latest projects secured by Clarity, and have a number of further opportunities that are currently being explored. The acquisition of Vision brings access to the private sector health and fitness market, to complement the local authority market which is Flex's main focus. Vision clients include Virgin Active, Fitness Exchange and Next Generation. Current Trading and Prospects There is no doubt that the group is still operating in difficult market conditions, as evidenced by the number of hospitality companies making downbeat trading statements. Despite that, we are confident that the projects undertaken by the Group in the second half of our year will deliver a profit before amortisation in excess of our last full years results. Particular benefit in our next year will be derived from the addition of a significant new level of recurring income secured in conjunction with recent contracts. This provides the Board with confidence that we can continue to grow the bottom line in our next full financial year. It is too early to predict the final outcome for the year with certainty however, the Board anticipates issuing a further trading update in early February 2003. A L R Morton: Group Chairman Tel: 01722 746200 G York: Group Chief Executive Tel: 01722 746200 Date 12 December 2002 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the period ended 30 September 2002 Period Period Period 1 April 2002 to 1 April 2001 to 1 April 2001 to 30 September 30 September 31 March 2002 2001 2002 Unaudited Unaudited Audited Notes £'000 £'000 £'000 Turnover 3,399 2,428 7,620 Cost of sales (1,670) (1,034) (3,645) Gross profit 1,729 1,394 3,975 Operating costs (2,124) (1,647) (4,118) Operating loss after amortisation of goodwill (395) (253) (143) -------- -------- -------- Operating (loss)/profit is analysed between: Operating (loss)/profit before goodwill amortisation (118) (80) 300 Goodwill amortisation (277) (173) (443) Operating loss after goodwill amortisation (395) (253) (143) -------- -------- -------- Interest receivable 90 - 22 Interest payable and similar charges (124) (23) (100) Loss on ordinary activities before taxation (429) (276) (221) Taxation on loss on ordinary activities - - (35) Retained loss for the period (429) (276) (256) (Loss)/earnings per ordinary share 2 - basic (3.08)p (2.92)p (2.51)p - fully diluted (3.08)p (2.84)p (2.51)p - adjusted basic (1.09)p (1.09)p 1.84p Dividends per share 3 - - - CONSOLIDATED BALANCE SHEET At 30 September 2002 At At At 30 September 30 September 31 March 2002 2001 2002 Unaudited Unaudited Audited £'000 £'000 £'000 Fixed assets Tangible assets 302 166 363 Intangible assets 7,207 4,394 7,287 ------- ------- ------- 7,509 4,560 7,650 ------- ------- ------- Current assets Stocks 590 353 425 Debtors 2,170 1,848 2,783 Cash at bank and in hand 732 58 1,546 ------- ------- ------- 3,492 2,259 4,754 ------- ------- ------- Creditors: amounts falling due within one year (2,258) (1,674) (3,195) Net current assets 1,234 585 1,559 Total assets less current liabilities 8,743 5,145 9,209 Creditors: amounts falling due after more than one year (1,805) (1,023) (1,842) -------- --------- --------- Net assets 6,938 4,122 7,367 -------- --------- --------- Capital and reserves Called up share capital 3,481 2,361 3,481 Share premium account 5,287 3,148 5,287 Profit and loss account (1,830) (1,387) (1,401) -------- -------- -------- Equity shareholders' funds 6,938 4,122 7,367 -------- -------- -------- CONSOLIDATED CASHFLOW STATEMENT For the period ended 30 September 2002 Period Period Period 1 April 2002 to 1 April 2001 to 1 April 2001 to 30 September 30 September 31 March 2002 2001 2002 Unaudited Unaudited Audited £'000 £'000 £'000 Net cash outflow from operating activities (249) (402) (871) Returns on investments and servicing of ------- ------- ------- finance Interest received 90 - 22 Interest paid and similar charges (124) (23) (40) Net cash outflow from returns on investments and servicing of finance (34) (23) (18) Taxation - - (39) Capital expenditure and financial investment Purchase of tangible fixed assets (4) (9) (52) Sale of tangible fixed assets 10 - 19 ------- ------- ------- Net cash inflow/(outflow) from capital expenditure and financial investment 6 (9) (33) Acquisitions and disposals Purchase of subsidiary undertakings (196) - (498) Cash at bank acquired with subsidiary - - 344 ------- ------- ------- Net cash outflow from acquisitions (196) - (154) ------- ------- ------- Net cash outflow before financing (473) (434) (1,115) Management of liquid resources Deposit in blocked cash collateral account - - (1,733) Financing Issue of share capital (net of costs) - - 2,359 Repayment of loan notes (308) - - Capital element of finance leases (33) (13) (15) Bank loan repayments - (20) (201) Net cash (outflow) in flow from financing (341) (33) 2,143 ------- ------- ------- Decrease in cash in the period (814) (467) (705) ------- ------- ------- 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 2002. The results for the period from 1 April 2001 to 30 September 2001 and period to 31 March 2002, are extracted from the previous year's interim and final accounts respectively. The results for the six months ended 30 September 2002 and the period from 1 April 2001 to 30 September 2001 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 2002 are in abridged version of the full statutory accounts that have an unqualified audit report and have been delivered to the Registrar of Companies. 2. Earnings per share Basic loss per share for the period ended 30 September 2002 is calculated by dividing the loss for the period of £429,000 (period ended 30 September 2001: £276,000, period ended 31 March 2002: £256,000) by 13,927,402 (period ended 30 September 2001: 9,445,987, period ended 31 March 2002: 10,181,479) being the weighted average number of shares in issue during the period. The adjusted basic loss per share for the period ended 30 September 2002 is calculated by dividing the loss for the period before amortisation of goodwill of £277,000 (period ended 30 September 2001 : £173,000, period ended 31 March 2002: £443,000) by 13,927,402 (period ended 30 September 2001: 9,445,987, period ended 31 March 2002: 10,181,479) being the weighted average number of shares during the period. The share options in place had no dilutive effect on the basic earnings per share calculation for the six months ended 30 September 2002. The diluted loss per share for the six months ended 30 September 2001 has been calculated on the basic loss and the weighted average number of shares in issue during that period of 9,445,987 plus an additional 280,328 shares. The share options in place had no dilutive effect on the basic earnings per share calculation for the twelve months ended 31 March 2002. 3. The Company does not propose the payment of a dividend. 4. Copies of this interim report are being sent to shareholders and are available from the Company's registered office: Number One, Netherhampton Business, Centre, Netherhampton, Salisbury, Wiltshire SP2 8PU. This information is provided by RNS The company news service from the London Stock Exchange

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