Interim Results
Focus Solutions Group PLC
07 December 2007
Embargoed until 7am 7th December 2007
Focus Solutions Group Plc
"Focus" or the "Group"
Interim Results
Focus Solutions Group plc (AIM: FSG), a leading supplier of adaptive software
solutions to the financial services industry, today announces unaudited interim
results for the six months to 30th September 2007 reported under IFRS.
Financial Highlights:
• Total revenues up 43% to £4.0 million (2006: £2.8 million)
• Operating profit before exceptional items £0.5 million (2006: operating
loss before exceptional items £0.1 million)
• Operating profit £0.3 million (2006: operating loss £0.3 million)
• Profit before tax and interest £0.4 million (2006: loss before tax and
interest £0.3 million), trading profitably for the first time in the first
half of the year
• Basic earnings per share 1.21 pence (2006: loss per share 0.71 pence)
• Net cash balances £2.0 million (2006: £0.4 million)
Operating Highlights:
• New contract wins in the period included:
• HSBC Bank plc - Consultancy services to assist in the scoping and
analysis of requirements for the second half of a major new project being
undertaken by the bank
• Openwork Limited - Restructured enterprise licence agreement for the
Openwork Trading Platform and for multiple sales processes covering the
Conduct of Business Rules (COBs)
• Further new contract wins since the period end:
• AEGON Scottish Equitable - contract for IT services including the
development of an intermediary extranet solution to support the sale of
investment bonds and retirement products
Commenting on the results, Richard Stevenson, Chief Executive said:
"I am delighted to announce another period of strong growth for the Group when
we achieved profitability in the first half of the year for the first time.
Customers are still actively investing in new front office technology solutions
to meet competitive pressures and required regulatory changes.
New business enquiries at present are higher than the corresponding period last
year and we remain confident in meeting expectations for the year as a whole."
For further information, please contact:
Focus Solutions Group plc www.focus-solutions.co.uk
Richard Stevenson, Chief Executive Tel: 01926 468 300
Martin Clements, Finance Director
Smithfield Tel: 0207 360 4900
Tania Wild / Reg Hoare
Daniel Stewart Tel: 020 7776 6550
Graham Webster / Chloe Ponsonby
CHAIRMAN'S STATEMENT
Business and Operating Review
Introduction
I am delighted to announce another period of strong growth for the Group. Focus'
financial performance for the first half of the year has been particularly
satisfying, generating a profit for the first half for the first time and with
sales revenues up 43% on the same period last year.
Our technology has enabled us to develop long term client relationships
supporting delivery across multiple channels, responding to changing needs and
our customer base now includes leading financial institutions from retail
banking, life, pensions and mortgage sectors in the UK and Ireland. Focus is
developing into a successful, consistently growing, profitable and cash
generative business.
Contract momentum
During the six months to 30 September 2007, Focus has continued to make good
progress in leveraging business from its customer base and has restructured an
enterprise licence agreement with existing client Openwork Limited, (Openwork is
a directly authorised financial services distribution network with more than
2,600 advisers operating across the UK). The contract is worth between £650,000
and £900,000 over five years, includes licence, support and maintenance fees for
several aspects of the Focus technology product suite and a number of solutions.
The enterprise licence agreement is for the Openwork Trading Platform and for
multiple sales processes covering the Conduct of Business rules for Mortgages
and General Insurance business streams.
Focus has extended its relationship with HSBC with a contract extension of
£322,000 for consultancy services which will be carried out in the current
financial year. The contract was awarded to assist in the scoping and analysis
of requirements for the second half of a major new project being undertaken by
the Bank. This scoping exercise will extend the Point of Sale (POS) solution
that Focus is currently developing, to include the IFA sales process, commercial
planning and offline working.
During the period we have continued to generate further business from existing
customers including Lincoln Financial Group, Irish Life, Home of Choice and BT.
Since the period end, Focus signed a contract with AEGON Scottish Equitable plc
to provide IT services including the development of an extended intermediary
extranet service to support the sale of investment bonds and retirement
products, and software licence, support and maintenance and consultancy
services.
focus:360
For some time, Focus has realised the potential for "productising" its key
offerings, providing customers with a 'packaged' solution. We have invested in
extending our Point of Sale capabilities to develop "focus:360"- the whole
office solution for financial advisers. The combined assets will provide a
single end-to-end solution encompassing areas such as Training and Competency (T
&C), Sales Performance Management Information (MI), Compliance Monitoring and
Pipeline Tracking within a refreshed POS offering.
focus:360 is aimed at bancassurers, large intermediary firms, pure mortgage
networks and providers with controlled distribution and encompasses a Point of
Sale solution, sales support capability and back office functionality through a
single technology platform that can support the financial advice sales process
across the full suite of financial products. focus:360 enables Focus to
differentiate itself in the market compared to traditional package software
suppliers, enabling a move towards higher margin and more predictable revenues
and away from higher cost, less scalable bespoke development.
The UK intermediary market has previously had to integrate a number of disparate
solutions to meet all their business requirements; the new proposition will
offer clients significant cost benefits. focus:360 has been designed to create
opportunities both in the front and back office with small and large sized
intermediary firms, a potential market size of some 90 organisations.
focus:technology 2007
At the end of the period, we launched a new innovative next generation
technology suite - "focus:technology 2007", a refreshed and redeveloped toolkit
based upon goal:technology. focus:technology enables the rapid creation of
functionally rich user interfaces that can apply business intelligence in the
capture, validation and presentation of data.
During the period, we also announced the development of a new intermediary
solution for the sale of SIPP products and opened an office in Edinburgh.
The Group's intention is to be recognised as the leading provider of front
office solutions to the UK financial services market and the Board has a clear
strategy for both organic and non-organic growth to achieve this. To date, Focus
has concentrated on developing business from our established customer base and
has a strong new business pipeline. The financial services industry is still
heavily regulated and organisations require intelligent technology solutions
that can adapt to changing business or environmental issues. Focus' e-trading
solutions and unrivalled reputation for delivering high quality, successful
implementations has put the Company in a strong position to support this,
particularly in reference to the mortgage market where industry wide standards
are becoming a reality. One of our key objectives is to increase the proportion
of turnover that is represented by annually recurring revenues.
The Group has a clearly defined merger and acquisitions strategy to develop the
organisation further and is looking at organisations that have a complementary
client base and technology to develop a truly integrated solution for the
financial services industry.
Financial Review
Group revenues in the first half of the year were up 43% over the same period
last year at over £4.0 million (2006:£2.8 million). This reflected the progress
made by the Group over the past two years in winning a series of significant new
orders. Operating Profit before Exceptional items was £0.5 million compared to a
loss of £0.1 million in the same period last year.
Gross margins fell from 60% to 57% from the corresponding period last year.
However, while revenues grew by 43%, total costs in the first half increased by
only 20%, at £3.7 million, £0.6 million up on the same period last year. This
reflected the increased proportion of professional services revenue and
continued tight control over overhead expenditure, despite the increasing
activity levels.
At the operating level, we generated a profit before exceptional costs of £0.5
million, as compared to a loss of £0.1 million last year. This reflects the
considerable improvements we have made to the business over the last two years.
Net cash balances at the end of September 2007 were £2.0 million (September
2006: £0.4 million; 31 March 2007: £3.0 million). Overdraft facilities totalling
£0.5 million are available to us from our bankers, HSBC plc. Cash outflow from
operating activities in the first half was £0.8 million (2006: £0.3 million
inflow).
The Directors continually review the funding requirements for the Group and will
ensure that the continued development of the business is properly funded.
The earnings per share of 1.21 pence per share compares to 0.71 pence loss per
share in the same period last year. As in previous periods, the Directors are
not recommending the payment of an interim dividend.
IFRS
These results are the first to be prepared on the basis of International
Financial Reporting Standards (IFRS). The adoption of IFRS has not had a
significant impact on the underlying financial performance of the Group, other
than the capitalisation of R&D costs totalling £148,000 in the period. The
results for the six months ended 30 September 2006 and for the year ended 31
March 2007 have been restated in accordance with IFRS. The principal change has
been the recognition of an intangible asset relating to some of the Group's
Research and Development expenditure as required under IAS 38 Intangible Assets.
Reconciliations of prior periods' results, balance sheets and cash flows under
IFRS are presented in note 5.
Outlook
Demand in our main markets of Banking and Life and Pensions remains robust. The
current conditions in the mortgage market have had a limited impact on trading
in the year to date. Customers are still actively investing in new front office
technology solutions to meet competitive pressures and required regulatory
changes. New business enquiries at present are higher than the corresponding
period last year and we remain confident of meeting expectations for the year as
a whole.
Focus' reputation in the market and the development of new market propositions,
including focus:360, will enable the Group to differentiate itself from other
vendors and become the benchmark by which other companies are judged.
The Group will continue to develop new business within the financial services
market, increasing our market coverage in the UK and Ireland and extending the
depth of our solution capabilities within this market. Our focus for the year is
to concentrate on improving profitability within the Group and we feel that we
are in a good position moving forward. We have a strong pipeline in place and
the right people, skills and technology to enable Focus to continue its growth.
Alastair M Taylor
Chairman
Consolidated income statement
For the six months ended 30 September 2007
Unaudited Six Unaudited Six Unaudited
months to months to Year ended
30 September 30 September 31 March
2007 2006 2007
As restated As restated
£000 £000 £000
Revenue 4,011 2,806 7,908
Cost of sales 1,722 1,129 2,441
Gross profit 2,289 1,677 5,467
Operating expenses 578 582 1,407
Distribution costs 1,406 1,391 3,070
Administrative expenses
(including exceptional costs
of £212k, 2006:
£181k, FY2007: £209k)
Operating profit/(loss) 305 (296) 990
Operating profit/(loss)
before exceptional costs 517 (115) 1,199
Exceptional costs (212) (181) (209)
Profit/(loss) on ordinary
activities before interest 305 (296) 990
Finance income 52 11 45
Profit/(loss) on ordinary activities 357 (285) 1,035
Taxation - 83 532
Profit/(loss) for the period
attributable to equity shareholders 357 (202) 1,567
Earnings per share Pence per Pence per Pence per
share share share
Basic earnings per share 1.21 (0.71) 5.46
Diluted earnings per share 1.27 (0.71) 5.22
All the above figures relate to the Group's continuing operations, restated to
reflect the adoption of IFRS.
Consolidated balance sheet
For the six months ended 30 September 2007
Unaudited Unaudited Unaudited
Six months to Six months to Year ended
30 September 2007 30 September 2006 31 March 2007
As restated As restated
£000 £000 £000
Assets
Non current assets
Property, plant and equipment 197 110 160
Intangible assets 280 47 58
Trade and other receivables 294 468 221
Deferred income tax assets 450 - 450
Current assets 1,221 625 889
Trade and other receivables 3,153 2,174 3,625
Cash and cash equivalents 2,006 418 3,005
Total assets 5,159 2,592 6,630
6,380 3,217 7,519
Current liabilities
Trade and other payables 1,479 799 2,615
Current tax liabilities 333 271 860
Total liabilities 1,812 1,070 3,475
Net assets 4,568 2,147 4,044
Capital and reserves attributable to equity holders of the Company
Called up share capital 2,946 2,864 2,930
Share premium 9,898 9,832 9,881
Merger reserve 220 220 220
Share option reserve 197 55 62
Profit and loss reserve (8,693) (10,824) (9,049)
4,568 2,147 4,044
Restated to reflect adoption of IFRS.
Consolidated cash flow statement
For the six months ended 30 September 2007
Unaudited Unaudited Unaudited
Six months to Six months to Year ended
30 September 30 September 31 March
2007 2006 2007
As restated As restated
£000 £000 £000
Cash (outflow)/inflow
from operations (766) 261 2,799
Finance income 52 11 45
Income tax received - 83 82
Net cash
(outflow)/inflow from
operating activities (714) 355 2,926
Investing activities
Purchases of property,
plant and equipment (74) (53) (127)
Purchases of intangible
assets (243) (7) (32)
Net cash used in
investing activities (317) (60) (159)
Financing activities
Issue of ordinary
shares 32 - 115
Net cash from financing
activities 32 - 115
Net (decrease)/increase
in cash and cash
equivalents (999) 295 2,882
Reconciliation of net
cashflow to movement in
net funds (999) 295 2,882
(Decrease)/ increase in
cash and cash
equivalents in the
period (999) 295 2,882
Movement in net funds in the
year
Net funds at start of
the period 3,005 123 123
Net funds at end of the
period 2,006 418 3,005
1. Accounting Policies
Basis of preparation
The interim financial statements for the six months ended 30 September 2007 have
not been audited and do not constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985. The Company's statutory accounts for the
year ended 31 March 2007, prepared under UK Generally Accepted Accounting
Principles (UK GAAP) have been delivered to the Registrar of Companies. The
report of the Auditors included in those statutory accounts was not qualified
and did not contain a statement under Section 237 (2) or (3) of the Companies
Act 1985.
Prior to 1 January 2007, the Group was required to prepare its consolidated
financial statements under UK GAAP. For the year ending 31 March 2008, the Group
is required to prepare its annual consolidated financial statements in
accordance with accounting standards adopted for use in the European Union
(International Financial Reporting Standards (IFRS)).
The financial statements for the year to March 2007 were audited. The
restatement of these figures to reflect the introduction of IFRS has not yet
been subjected to audit and as such comparative figures for that period are
disclosed as unaudited.
The interim financial statements for the six months to 30 September 2007 have
been prepared in accordance with the accounting policies set out below, taking
into account the requirements and options set out in IFRS 1 "First time adoption
of International Financial Reporting Standards". In preparing these interim
financial statements the Board has not sought to implement the early adoption of
IAS 34 "Interim Financial Reporting". The transition date for the Group's
application of IFRS is 1 April 2006 and comparative figures for 30 September
2006 and 31 March 2007 have been restated to reflect IFRS. Reconciliations of
the income statement and balance sheet from those previously reported under UK
GAAP to the restated IFRS figures are given later in this report.
The interim financial statements have been prepared on the historic cost basis.
Accounting policies
The principal accounting policies applied by the Group resulting from the
adoption of IFRS are set out below. In all other respects, they are the same as
those applied by the Group in its consolidated financial statements for the year
ended 31 March 2007.
Basis of consolidation
The consolidated financial statements of Focus Solutions Group plc include the
results of the Company and its subsidiaries.
Intra Group transactions are eliminated on consolidation.
Exceptional costs
Items of income and expenditure that are considered material, either by the size
and/or their nature are classified as exceptional. Such items are shown
separately on the face of the profit and loss account within the relevant
consolidated income statement category to which they relate.
Intangible assets
Intangible assets are shown at cost net of depreciation. Depreciation is
calculated so as to write off the cost, less any provision for impairment, of
intangible assets less their estimated residual values over the expected useful
economic lives, as follows:
Computer software between 2 and 4 years
Research and development
Development expenditure is capitalised as an intangible asset only if
development costs can be measured reliably, the product or process is
technically and commercially feasible, future economic benefits are probable and
the Group intends to complete the development and to use and sell the asset
developed. The expenditure capitalised includes the cost of materials, direct
labour and overhead costs directly attributable to preparing the asset for its
intended use. Other development expenditure, as well as expenditure on research,
is recognised in the profit and loss account when incurred.
Capitalised development expenditure is measured at cost less accumulated
amortisation and accumulated impairment losses.
Amortisation is recognised in the profit and loss account on a straight line
basis over the estimated useful lives of the relevant product.
Taxation
Current tax is based on the taxable profit for the period. The Group's liability
for current tax is calculated using tax rates that have been enacted or
substantively enacted by the balance sheet date.
Deferred income tax is provided for in full using the liability method, on
temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the consolidated financial statements. Deferred
income tax is determined using tax rates (and laws) that have been enacted or
substantially enacted by the balance sheet date and are expected to apply when
the deferred income tax asset is realised. Deferred income tax assets are
recognised to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilised.
Deferred tax assets and liabilities are not discounted. Deferred tax assets and
liabilities may be set off against each other provided there is a legal right to
do so and it is managements' intention to do so.
Property, plant and equipment
Property, plant and equipment is shown at cost, net of depreciation.
Depreciation is calculated so as to write off the cost, less any provision for
impairment, of plant, property and equipment, less their estimated residual
values over the expected useful economic lives of the assets concerned. The
principal annual rates used for this purpose are:
Fixtures and fittings Between 3 and 4 years
Computer Equipment Between 2 and 4 years
2. Exceptional Items
As stated in the Group's accounting policies the Directors regard certain
material items as exceptional.
The analysis of exceptional items is as follows.
Unaudited Unaudited Unaudited
Six months to Six months to Year ended
30 September 2007 30 September 2006 31 March 2007
£000 As restated As restated
£000 £000
Restructuring costs 34 181 196
FRS 20 Share Based
Payment Charge 135 - 13
Aborted acquisition
costs 43 - -
---------- ------------ -----------
212 181 209
---------- ------------ -----------
Restructuring costs relate to the reorganisation of the Group's trading
operations and include the costs of compensation for loss of office.
FRS 20 share based payment charge is shown as exceptional because of the
materiality of the amount charged in the period.
Aborted acquisition costs relate to the costs incurred by the Group in relation
to a possible acquisition that was not completed.
3. Income tax expense
Unaudited Unaudited Unaudited
Six months to Six months to Year ended
30 September 2007 30 September 2006 31 March 2007
£000 As restated As restated
£000 £000
Current taxation - 83 82
Deferred taxation - - 450
Total - 83 532
4. Earnings per ordinary share
Basic earnings per ordinary share is based on the profit for the period and on
29,268,963 (September 2006: 28,642,358, March 2007: 28,717,745) ordinary shares,
being the weighted average number of ordinary shares in issue during the period.
Diluted basic earnings per ordinary share is based on the profit for the period
and on 31,135,691 (September 2006: 28,682,482; March 2007: 30,022,619) ordinary
shares, being the weighted average number of ordinary shares which would have
been issued if the outstanding options to acquire shares in the Group had been
exercised at the average price during the period.
5. Transition Statements
Focus Solutions Group plc
IFRS transition statements
Income statements
Consolidated income statement for the six months ended 30th September 2007
As reported under UK IAS 38 Restated under
GAAP IFRS
Intangible
Assets
£000 £000 £000
Revenue 4,011 - 4,011
Cost of sales 1,838 116 1,722
-------- --------- --------
Gross profit 2,173 116 2,289
Operating expenses
Distribution costs 578 - 578
Administrative expenses 1,226 32 1,194
-------- --------- --------
Operating profit
before exceptional costs 369 148 517
Exceptional costs 212 - 212
-------- --------- --------
Operating profit 157 148 305
Finance income 52 - 52
-------- --------- --------
Profit on ordinary
activities before taxation 209 148 357
Income tax expense 0 - 0
-------- --------- --------
Profit for the
period attributable
to equity
shareholders 209 148 357
======== ========= ========
Earnings per ordinary
share
Basic 0.71 0.50 1.21
Diluted 0.67 0.48 1.14
All the above figures relate to the Group's continuing operations, restated to
reflect the adoption of IFRS.
Consolidated income statement for the six months ended 30th September 2006
As reported under UK IAS 38 Restated under
GAAP IFRS
Intangible
Assets
£000 £000 £000
Revenue 2,806 - 2,806
Cost of sales 1,129 - 1,129
-------- --------- --------
Gross profit 1,677 - 1,677
Operating expenses
Distribution costs 582 - 582
Administrative
expenses 1,391 - 1,391
-------- --------- --------
Operating loss (296) (296)
Operating loss
before exceptional
costs (115) - (115)
Exceptional costs (181) - (181)
-------- --------- --------
Operating loss (296) - (296)
Finance income 11 - 11
-------- --------- --------
Loss on ordinary
activities before
taxation (285) - (285)
Income tax expense 83 - 83
-------- --------- --------
Loss for the period
attributable to
equity shareholders (202) - (202)
======== ========= ========
Loss per ordinary
share
Basic 0.71 - 0.71
Diluted 0.71 - 0.71
All the above figures relate to the Group's continuing operations, restated to
reflect the adoption of IFRS.
Consolidated income statement for the year ended 31st March 2007
As reported under UK IAS 38 Restated under
GAAP IFRS
Intangible
Assets
£000 £000 £000
Revenue 7,908 - 7,908
Cost of sales 2,441 - 2,441
-------- --------- --------
Gross profit 5,467 - 5,467
Operating expenses
Distribution costs 1,407 - 1,407
Administrative
expenses 3,070 - 3,070
-------- --------- --------
Operating profit 990 990
Operating profit
before exceptional
costs 1,199 - 1,199
Exceptional costs 209 - 209
-------- --------- --------
Operating profit 990 - 990
Finance income 45 - 45
-------- --------- --------
Profit on ordinary
activities before
taxation 1,035 - 1,035
Income tax 532 - 532
-------- --------- --------
Profit for the
period attributable
to equity
shareholders 1,567 - 1,567
======== ========= ========
Earnings per ordinary
share
Basic 5.46 - 5.46
Diluted 5.22 - 5.22
All the above figures relate to the Group's continuing operations, restated to
reflect the adoption of IFRS.
Consolidated balance sheet as at 30th September 2006
As reported under UK IAS 38 Restated under
GAAP IFRS
Intangible
Assets
£000 £000 £000
Fixed assets
Non current assets
Property, plant and
equipment 110 - 110
Intangible assets 47 - 47
Trade and other
receivables 468 - 468
Deferred income tax - - -
assets -------- --------- --------
625 - 625
Current assets
Trade and other
receivables 2,174 - 2,174
Cash and other
equivalents 418 - 418
-------- --------- --------
2,592 - 2,592
-------- --------- --------
Total assets 3,217 - 3,217
-------- --------- --------
Liabilities
Non-current
liabilities
Provisions - - -
Trade and other - - -
payables -------- --------- --------
- - -
Current liabilities
Trade and other
payables 799 - 799
Current tax
liabilities 271 - 271
-------- --------- --------
Total current
liabilities 1,070 - 1,070
-------- --------- --------
Net assets 2,147 - 2,147
======== ========= ========
Capital and reserves attributable to equity holders of the Company
Called up share capital 2,864 - 2,864
Share premium 9,832 - 9,832
Merger reserve 220 - 220
Share option reserve 55 - 55
Profit and loss account reserve (10,824) - (10,824)
-------- -------- --------
Total equity 2,147 - 2,147
======== ======== ========
Restated to reflect the adoption of IFRS.
Consolidated balance sheet as at 31st March 2007
As reported under UK IAS 38 Restated under
GAAP IFRS
Intangible
Assets
£000 £000 £000
Fixed assets
Non current assets
Property, plant and
equipment 160 - 160
Intangible assets 58 - 58
Trade and other
receivables 221 - 221
Deferred income tax
assets 450 - 450
-------- --------- --------
889 - 889
Current assets
Trade and other
receivables 3,625 - 3,625
Cash and other
equivalents 3,005 - 3,005
-------- --------- --------
6,630 - 6,630
-------- --------- --------
Total assets 7,519 - 7,519
-------- --------- --------
Liabilities
Non-current
liabilities
Provisions - - -
Trade and other - - -
payables -------- --------- --------
- - -
Current liabilities
Trade and other
payables 2,615 - 2,615
Current tax
liabilities 860 - 860
-------- --------- --------
Total current
liabilities 3,475 - 3,475
-------- --------- --------
Net assets 4,044 - 4,044
======== ========= ========
Capital and reserves attributable to equity holders of the Company
Called up share capital 2,930 - 2,930
Share premium 9,881 - 9,881
Merger reserve 220 - 220
Share option reserve 62 - 62
Profit and loss reserve (9,049) - (9,049)
-------- -------- -------
Total equity 4,044 - 4,044
======== ======== ========
Restated to reflect the adoption of IFRS.
Focus Solutions Group plc
IFRS transition statements
Balance sheets
Consolidated balance sheet as at 31st March 2006
As reported under UK IAS 38 Restated under
GAAP IFRS
Intangible
Assets
£000 £000 £000
Fixed assets
Non current assets
Property, plant and
equipment 81 - 81
Intangible assets 54 - 54
Trade and other
receivables 490 - 490
Deferred income tax - - -
assets -------- --------- --------
625 - 625
Current assets
Trade and other
receivables 3,657 - 3,657
Cash and other
equivalents 123 - 123
-------- --------- --------
3,780 - 3,780
-------- --------- --------
Total assets 4,405 - 4,405
-------- --------- --------
Liabilities
Non-current
liabilities
Provisions - - -
Trade and other - - -
payables -------- --------- --------
- - -
Current liabilities
Trade and other
payables 1,393 - 1,393
Current tax
liabilities 663 - 663
-------- --------- --------
Total current
liabilities 2,056 - 2,056
-------- --------- --------
Net assets 2,349 - 2,349
======== ========= ========
Capital and reserves attributable to equity holders of the Company
Called up share capital 2,864 - 2,864
Share premium 9,832 - 9,832
Merger reserve 220 - 220
Share option reserve 49 - 49
Profit and loss reserve (10,616) - (10,616)
-------- -------- --------
Total equity 2,349 - 2,349
======== ======== ========
Restated to reflect the adoption of IFRS.
Independent review report to Focus Solutions Group plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
September 2007, which comprises the income statement, balance sheet, cash flow
statement and related notes. We have read the other information contained in the
half-yearly financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed
set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been approved
by, the directors. The directors are responsible for preparing the half-yearly
financial report in accordance with the AIM Rules for Companies which require
that the financial information must be presented and prepared in a form
consistent with that which will be adopted in the Company's annual financial
statements.
This interim report has been prepared in accordance with the basis set out in
Note 1. As disclosed in Note 1, the next annual financial statements of the
Company will be prepared in accordance with IFRS as adopted by the European
Union. The accounting policies are consistent with those that the directors
intend to use in the next annual financial statements.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review. This report, including the conclusion, has been prepared for and only
for the Company for the purpose of the AIM Rules for Companies and for no other
purpose. We do not, in producing this report, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or
into whose hands it may come, save where expressly agreed by our prior consent
in writing.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information
Performed by the Independent Auditor of the Entity' issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 30 September 2007 is not prepared, in all
material respects, in accordance with the basis set out in Note 1 and the AIM
Rules for Companies.
PricewaterhouseCoopers LLP
Chartered Accountants
7 December 2007
Birmingham
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