Interim Results

Clarity Commerce Solutions PLC
23 November 2006

23 November 2006



Clarity Commerce Solutions plc



Clarity Commerce Solutions plc, a leading supplier of management software
solutions for the entertainment, ticketing, hospitality, retail and leisure
sectors, announces its interim results for the six months ended 30 September
2006.

•   Turnover increased by 14% to £9.6m (2005: £8.4m).

•   Recurring revenue increased by 12% to £3.94m (2005: £3.51m)

•   Gross margins increased to 69% from 65% in H12005 and from 61% in FY06

•   Operating profit increased by 4% to £409,000 (2005: £395,000)

•   Basic earnings per share at 1.22p (2005: 1.48p)

•   Research and Development, for product development and integration, at
    £1.4m  (2005: £680,000)

•   Integration of the MATRA business and products continues to progress well

•   Confident on prospects for the second half and meeting full year
    expectations

(The above figures include 5 months from MATRA Systems, acquired in April 2006)



Graham York, Clarity Commerce Solutions, Chief Executive, said:



'We are pleased with the performance of the Group over the last six months. The
progress made in working with clients and new prospects sets us up for a
positive second half performance.



The Group is also very pleased with the MATRA acquisition. The two companies are
working very well together and cross selling opportunities are already starting
to appear.'




Enquiries:


Clarity Commerce Solutions
    Graham York, Chief Executive Officer                          0870 44 44 234

College Hill
    Carl Franklin / Ben Way                                       020 7457 2020







Financial Review



The Clarity Board is pleased to report that the Group's operating profits for
the half year ended 30 September 2006 were £409,000 (2005 £395,000), while
corresponding revenues grew to £9.6m (2005: £8.41m). These reported numbers
include a 5 month contribution from MATRA Systems, acquired in April 2006.



Gross margins increased to 69% from 65% in the first half of 2005 and 61% from
the full year 2006 as gross profits increased to £6.6m from £5.5m. Profit before
tax was at £271,000 (2005: £323,000).



The net assets of the Group have increased to £12,868,000 (2005: £9,728,000) and
adjusted basic earnings per share were 1.22p (2005: 1.48p).



Operating review



MATRA Systems acquisition



On 29th April 2006, Clarity completed the acquisition of MATRA Systems. We are
very pleased with progress made towards capitalising on the opportunity this
presents, and as we originally stated, the initial focus has been on business
and product integration.



We anticipate that the software integration task will be close to completion by
the year end, and we shall soon be in a position to market a combined product,
boosting sales opportunities across all market sectors.



Operating costs



The Board is pleased to announce that good progress has been made in reducing
the core operating costs of the business in the first half of the year and looks
forward to continuing with this effort.



This cost reduction has come from the integration of businesses into central
functions, and this centralisation is enabling us to offer more consistent,
customer focused service levels across all of the markets in which we operate.



The Group continues to make a significant investment in R&D, as part of the
ongoing process of creating innovative new software that strengthens our product
offerings.



Net asset and debtor levels



The Group's net asset position has strengthened and there has also been an
improvement made to the Group's net current assets of £1.5m.



Debtor levels were unusually high at Clarity's half year point, however cash
collection since that time has been high. The centralisation of our finance
function is nearly completed, and has enabled a focus on processes and increased
client contact, and we expect this to result in an ongoing reduction in debtor
levels over time.



Prospect levels



During the period, prospect enquiry levels were robust and bid request volumes
high across all Clarity's key market sectors. This degree of interest reinforces
the company's confidence that our integrated product strategy based on the
Microsoft .Net platform is the right approach.



The leisure sector awaits our next generation software, which is currently under
development. Across all markets, we anticipate some conversion of prospects in
the second half, which in turn will support future trading growth.



Future growth



The Board is confident that Clarity's more efficient operational cost base will
be accompanied by ongoing business wins across all sectors, fuelling profit
growth. With increasingly mature software and a more centralised business, we
are entering the next phase of our growth, focused more on sales and market
development.



Outlook



Clarity's trading pattern is normally weighted towards the second half of the
financial year. This year, that effect is more pronounced than normal, with many
orders scheduled for the second six months. Taking this into account, and in
view of our promising sales pipeline, the Clarity Board remains confident of
achieving market forecasts for the full year.




Consolidated profit and loss account
for the period ended 30 September 2006


                                                                   1 April 2006        1 April 2005        1 April 2005
                                                              30 September 2006   30 September 2005       31 March 2006
                                                                      Unaudited           Unaudited             Audited
                                                                          £'000               £'000               £'000
Turnover
- continuing operations                                                   7,730               8,415              18,884
- acquisitions                                                            1,850                   -                   -
                                                                          9,580               8,415              18,884
Cost of sales                                                           (2,964)             (2,928)             (7,361)
Gross profit                                                              6,616               5,487              11,523
Operating costs                                                         (6,207)             (5,092)            (10,414)
Operating profit
- continuing operations                                                     337                 395               1,109
- acquisitions                                                               72                   -                   -
                                                                            409                 395               1,109

Operating profit is analysed between:
Operating profit from continuing operations before                        
impairment of goodwill                                                      337                 395               1,358
Continuing operations - impairment of goodwill                                -                   -               (249)
Operating profit from acquired operations                                    72                   -                   -
Operating profit after impairment of goodwill                               409                 395               1,109

Interest receivable                                                         167                 331                 506
Interest payable                                                          (305)               (403)               (662)
                                                                          (138)                (72)               (156)
Profit on ordinary activities before taxation                               271                 323                 953
Taxation on profit on ordinary activities                                  (41)                (82)                 (3)
Retained profit for the year                                                230                 241                 950

Earnings per ordinary share
- basic                                                                   1.22p               1.48p               5.81p
- diluted                                                                 1.12p               1.47p               5.80p
Dividends per share                                                           -                   -                   -




Consolidated balance sheet
as at 30 September 2006


                                                                          As at               As at               As at
                                                              30 September 2006   30 September 2005       31 March 2006
                                                                      Unaudited           Unaudited             Audited
                                                                          £'000               £'000               £'000
Fixed assets
Intangible assets                                                        17,460              11,277              11,352
Tangible assets                                                             579                 560                 563
                                                                         18,039              11,837              11,915
Current assets
Stocks                                                                      598               1,027                 600
Debtors                                                                   5,650               4,093               6,778
Cash at bank and in hand                                                    399                 990                 852
                                                                          6,647               6,110               8,230

Creditors: amounts falling due within one year                          (5,062)             (5,996)             (8,100)
Net current assets                                                        1,585                 114                 130
Total assets less current liabilities                                    19,624              11,951              12,045
Creditors: amounts falling due after more than one year                 (6,722)             (2,223)             (1,691)
Provisions for liabilities and charges                                     (34)                   -                (34)
Net assets                                                               12,868               9,728              10,320

Capital and reserves
Called up share capital                                                   4,835               4,084               4,084
Shares to be issued                                                         500                   -                   -
Share premium account                                                     7,040               5,974               5,974
Profit and loss account                                                     493               (330)                 262
Equity shareholders' funds                                               12,868               9,728              10,320




Consolidated cash flow statement
for the period ended 30 September 2006


                                                                   1 April 2006        1 April 2005        1 April 2005
                                                              30 September 2006   30 September 2005       31 March 2006
                                                                      Unaudited           Unaudited             Audited
                                                                          £'000               £'000               £'000

Net cash inflow from operating activities                                 (453)                 (1)                 884

Returns on investments and servicing of finance
Interest received                                                           167                 331                 506
Interest paid and similar charges                                         (257)               (402)               (595)
Interest element of hire purchase and finance leases                        (2)                 (1)                 (2)
Net cash outflow from returns on investments and servicing                
of finance                                                                 (92)                (72)                (91)

Taxation                                                                   (95)                   -                (10)

Capital expenditure and financial investment
Purchase of tangible fixed assets                                          (36)               (115)               (200)
Sale of tangible fixed assets                                                 -                   4                   -
Net cash outflow from capital expenditure and financial                 
investment                                                                 (36)               (111)               (200)

Acquisitions
Purchase of subsidiary undertakings                                     (2,875)                   -               (110)
Cash at bank acquired with subsidiary                                       370                   -                   -
Net cash outflow from acquisitions                                      (2,505)                   -               (110)
Net cash (outflow) / inflow before management of liquid              
resources and financing                                                 (3,181)               (184)                 473

Management of liquid resources
Movement in blocked cash collateral account                                 264               (331)                  75

Financing
Issue of share capital                                                    1,817                   -                   -
Repayment of loan notes                                                   (473)                   -               (646)
Capital element of finance leases                                           (2)                 (8)                 (5)
New loans                                                                 2,425                   -                   -
Bank loan repayments                                                    (1,039)               (152)               (304)
Net cash inflow / (outflow) from financing                                2,728               (160)               (955)
Decrease in cash                                                          (189)               (675)               (407)

NOTE: Analysis of cash movements
Movement in total Group cash                                              (453)               (344)               (482)
Movement in blocked cash collateral account                                 264               (331)                  75
Movement in total cash availability                                       (189)               (675)               (407)




Notes to the financial statements



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 2006.

The results for the period from 1 April 2005 to 30 September 2005 and year to 31
March 2006 are extracted from the previous year's interim and final accounts
respectively.

The results for the six months ended 30 September 2006 and the period from 1
April 2005 to 30 September 2005 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 2006 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

The taxation charge for the six months ended 30 September 2006 and 2005 is based
on the anticipated tax position for the full year.

3     Earnings per share

Basic earnings per share for the period ended 30 September 2006 is calculated by
dividing the profit for the period of £230,000 (period ended 30 September 2005
profit of £241,000, year ended 31 March 2006 profit of £950,000) by 18,895,463
(period ended 30 September 2005: 16,338,086, year ended 31 March 2006:
16,338,086) being the weighted average number of shares in issue during the
period.

The diluted earnings per share has been calculated by dividing the profit for
the period to 30 September 2006 of £230,000 (period ended 30 September 2005:
£241,000, year ended 31 March 2006: £950,000) by the weighted diluted average
number of shares being 20,577,169 (period ended 30 September 2005: 16,398,791,
year ended 31 March 2006: 16,381,088).

4     Dividend

The Company does not propose the payment of an interim dividend, which continues
to be reviewed on an on-going basis.










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