Interim Results

Focus Solutions Group PLC
06 December 2004


For immediate release                                         07 December 2004


                            FOCUS SOLUTIONS GROUP PLC
                                        

     Interim results for the six months ended 30 September 2004 (unaudited)

Focus Solutions Group plc, the leading provider of customer management solutions
for the financial services industry, today announces its interim results for the
six months ended 30 September 2004 (unaudited).

Highlights


• Revenue

    goal:technology licence and related services revenue increased by 
    18% to £1.7 million (2003: £1.4 million) and now represents 87% 
    of total turnover of £1.9 million (2003: 54%; £2.6 million)

• First half costs down 14% on first half 2003 to £2.75 million

• Operating loss before tax and interest £0.8 million (2003: £0.7 million)

• Cash balance £0.5 million (2003: £1.3 million)

• New contract wins with Mortgages plc, Prudential Plc and The Exchange

• Sales pipeline at all time high

• Continued investment in new product development of £0.5 million in first half,
  and further £0.5 million spend planned for second half

• Loss per share 2.8 pence (2003: 2.1 pence)


Commenting on the results, Focus Chief Executive, John Streets said:

"Results for the first half were in line with expectations. We have continued to
make good progress with our goal:technology licence and related services sales
delivering revenues up 18% in the period, while Norwich Union's RIO project now
represents just 13% of total revenues compared to 44% in the same period last
year and 69% in the year before. Our Solutions business continued to win
additional business from established customers in the UK life and pensions
market and we made further progress in enhancing our position in the UK
mortgages market. As the impact of regulatory changes in the UK financial
services markets become clearer, we have seen an increase in high quality
opportunities in our sales pipeline. We expect this to contribute materially to
improving our financial performance in the second half. Going forward, changes
in the Group structure will enable the Software business to develop additional
revenue streams from other markets."


For further information please contact:

Focus Solutions Group plc 01926 468300
John Streets - Chief Executive
Martin Clements - Finance Director




Chairman's Statement

Business Review

The Group made good progress towards its objective of creating a sustainable and
scalable business against a backdrop of continued tough conditions in our core
market, UK life and pensions. Sales of goal:technology licences and services
rose by 18% from £1.4 million to £1.7 million. The continued and expected
run-down in work on Norwich Union's RIO project, with revenue falling from £1.3
million in the first six months of last year to £0.2 million in this period,
contributed directly to the reduction in overall revenue. Sales of 
goal:technology licences and associated services now represent 87% of 
total sales.

During the period we continued to generate new business from established UK life
and pensions customers. We also secured important new contracts with the
Prudential and The Exchange. Our ability to rapidly generate and deploy software
delivering return on investment in exceptionally short timescales remains a
major differentiator. This has enabled Focus to extend its market reach from the
UK life and pensions market into the UK mortgages market.

Following on from our first orders during FY2004 for Multi Channel Advice("MCA")
solutions for the UK mortgage market, during the period we won a new customer, 
Mortgages plc. We worked on a number of enhancements to their web-based 
service for intermediaries in preparation for "M-Day", the 31st October 2004, 
when new regulations to control the mortgage sales process were introduced. 
This project was delivered on time, within budget and transactions processed 
have exceeded Mortgages plc's expectations. Mortgages plc also provide a 
"white-label" service for seven other mortgage lenders. 

Since the end of the period, we have announced a strategic partnership with
Trigold, a leading provider of software to the intermediary mortgage market, to
create a new e-commerce community within the mortgage market. By integrating
goal:technology into Trigold's mortgage sourcing software, advisers will be able
to complete and submit validated electronic mortgage applications. Over 130
mortgage lenders, whose products are available on Trigold, will have the
opportunity to transform their online mortgage offering with an easy to use
electronic application. This capability to enable straight through processing
will provide significant savings in the costs of processing new mortgage
business. This provides us with a significant opportunity going forward.

We are also at an advanced stage of contract negotiations with an established
customer regarding a Point of Sale (POS) system. We are hopeful that we can 
announce some more details in this regard in the next few weeks.

Financial Review

Turnover in the first half of the year was down 25% at £1.9 million (2002: £2.6
million), principally as a result of the Norwich Union RIO POS project moving
from the development phase into ongoing support and enhancement. Operating loss
was £0.8 million, compared to £0.7 million in the same period last year. As in
previous years, we expect revenues to be substantially more in the second half
than in the first half.

Administration costs of £2.7 million are £0.6 million down on the same period
last year, a reduction of 18%. The reduction in costs reflects continued tight
management control over discretionary spending and some reduction in headcount
numbers during the period. Over the course of the last year, our administration
costs have fallen from an annualised rate of £6.6 million to £5.4 million.

Cash balances at the end of September were £0.5 million (2003: £1.3 million; 31
March 2004: £1.5 million). We remain debt free, although we do have overdraft
facilities totalling £350k with our bankers, HSBC plc. Cash burn from operating
activities in the first half was £973k (2003: £1,037k). With the expected
improvement in trading in the second half, we anticipate that the business will
be cash generative in the second half.

The loss per share of 2.8 pence per share compares to 2.1 pence per share in the
same period last year.

Operational Review

Whilst life and pensions companies remain cautious about committing to new
investment, the strategic drive to cut costs and improve customer service
through the introduction of electronic trading remains. During the period,
important contracts were signed with the Prudential and The Exchange and we
continued to make progress extending the uptake of our products and services
within our customer base.

This established base, coupled with new opportunities in the mortgage sector,
continues to offer excellent prospects for growth. The changes in the way life
and pensions products will be distributed, introducing multi-tied sales
channels, has contributed to a growing pipeline of prospective sales orders from
UK life and pensions organisations and we expect to secure other significant
contract wins in the near future, a large proportion of which will be billable
in the second half of the year.

Investment in development has continued, extending the breadth of the product
range offered to our customers and in new technologies. This supports the
Group's move into other market sectors, such as the UK mortgage market and
protects its user base. We are committed to keeping Focus at the forefront of
technology offerings available to the UK financial services market.

During the period, we announced that we were working together with BEA Systems
Inc to provide a joint solution aimed at enabling customers to rapidly create
XML user interfaces that extend the BEA WebLogic Platform TM front-end 
capability. We continue to work closely with BEA on this project. We believe 
that developing relationships with technology partners is of paramount 
importance to our business and expect that significant revenues will be 
generated from these relationships in future years.

Group Structure

It is our strategy to create a sustainable and scalable business. Over the past
year, it has become increasingly clear that a change in the Group's operating
structure was required to achieve that objective. To achieve further growth, the
Board believes there is significant opportunity in exploiting goal:technology
software more widely, through developing partnership agreements with
organisations operating in different geographical and vertical markets.

During the period we undertook the formal split of the business into two
divisions; Solutions and Software. These two operating businesses now have
separate, discrete management structures, supported by central services.

Outlook

The fundamental drivers for the business remain unchanged. Our customers operate
in extremely competitive and heavily regulated markets and we believe that to
maintain competitive advantage, they must continue to invest in electronic
trading. These drivers are already having an impact on the UK mortgage market
and similar changes in regulation in the general insurance market will take
effect in 2005. The introduction of depolarisation in December 2004, creating a
multi-tied distribution channel for the sale of insurance and pensions products,
has contributed to an increase in levels of activity in our core market. We have
a strong competitive position in this sector and are bidding for a number of
substantial contracts. Our sales pipeline has never been higher and these higher
activity levels will contribute to a significant improvement in financial
performance in the second half. We are starting to recruit additional staff, for
the first time for two years, and research and development spend will be
maintained.

Alastair Taylor
Chairman

Focus Solutions Group plc
Summarised Consolidated Profit and Loss Account
For the six months ended 30 September 2004

                                      6 months        6 months        Year
                                        ended           ended         ended
                                    30 September    30 September    31 March
                                        2004            2003          2004
                                        £000            £000          £000

Turnover                                1921            2581          5388
                                        ----            ------       -----
                                        1921            2581          5388

Operating loss before                   (829)           (589)         (470)
re-organisation costs
Re-organisation costs                      -             (90)         (119)
                                        ------           ----         -----

Operating loss                          (829)           (679)         (589)
Gain on disposal of US operations          -               -           167
                                        -----           -----          ----

Loss on ordinary activities             (829)           (679)         (422)
Before interest                     
Net interest receivable                   20              16            40
                                         ----            ----          ----

Loss on ordinary activities before
taxation                                (809)           (663)         (382)
Taxation                                   -             100           100
                                         ---            ----           ---

Loss on ordinary activities after
taxation and retained loss for the 
period                                  (809)           (563)         (282)
                                        ======          =====         =====
                                                        
Basic and diluted loss per ordinary
share (note 2)                         (2.8p)          (2.1p)         (1.0p)
                                       ======          ======         ======
                                                        

No separate statement of total recognised gains and losses has been presented as
all such gains and losses have been dealt with in the profit and loss account.


Focus Solutions Group plc
Summarised Consolidated Balance Sheet
For the six months ended 30 September 2004

                                          6 months       6 months       Year
                                           ended          ended        ended
                                        30 September   30 September   31 March
                                            2004           2003         2004
                                            £000           £000         £000
Fixed assets                               
Tangible assets                              152            134          171  
                                             ----           ---          ---

                                             152            134          171

Current assets  
 Debtors                                    1529           1626         1845
 Short term investments - money market
 deposits                                    250            752          250
 Cash at bank and in hand                    263            568         1234
                                            ------         ----         ----
                                            2042           2946         3329
Creditors: amounts falling due within
one year                                    (818)         (1239)       (1331)
                                            -----         ------       ------

Net current assets                          1224           1707         1998
                                            ----           ----         ----

Total assets less current liabilities       1376           1841         2169
                                            ----           ----         ----
  
Creditors: amounts falling due in more        -             -            -
than one year                               ----           ----         ---

Net assets                                  1376           1841         2169
                                            ====           =====        ====
                                                     
                                             

Capital and reserves  
 Called up share capital                    2859           2824         2851
 Shares to be issued                          -              -           -
 Share premium                              9828           9799         9819
 Merger reserve                              220            220          220
 Profit and loss account                  (11531)        (11002)      (10721)
                                          -------        -------      -------

Shareholders' funds                        
 Equity interest                            1376           1841         2169
                                           ======          ====         ====



Focus Solutions Group plc
Summarised Consolidated Cash Flow Statement
For the six months ended 30 September 2004

                                          6 months       6 months       Year
                                           ended          ended        ended
                                        30 September   30 September   31 March
                                            2004           2003         2004
                                            £000           £000         £000
Net cash outflow from                       
operating activities                        (973)         (1037)        (927) 

Returns on investments and                   
servicing of finance                          20             16           40

Taxation                                      -              56           56

Capital expenditure and                         
financial investment                         (34)           (38)         (56)
                                             ====           ====         ====

Cash outflow before management of           
liquid resources and financing              (987)         (1003)        (887)
  
Management of liquid resources                 -            (96)         406                  
                                         
Financing                                     16            628          676                                       
                                             ----          -----        -----

 Decrease)/increase in cash                 (971)          (471)         195
                                            =====          =====         ===

Change in net debt resulting from cash
flows
(Decrease)/increase in cash in the
period                                      (971)          (471)         195

Change in net funds resulting from                 
financing                                      -              -           -

Cash outflow from increase in liquid
resources                                      -             96         (406)
                                            =========       ====        =====

Movement in net funds in the period          (971)          (375)       (211)

Net funds at start of year                   1484           1695        1695
                                            -----          ------       ----

Net funds at end of period                    513           1320        1484
                                             -----          ----        ----


Focus Solutions Group plc
Notes to the interim financial statements

1.      Basis of preparation

The summarised half year financial information is unaudited and does not
constitute statutory accounts for the purposes of section 240 of the Companies
Act 1985. The statutory accounts for the year ended 31 March 2004, which
received an unqualified audit report, have been delivered to the Registrar of
Companies.

The unaudited financial information has been prepared on the basis of the
accounting policies set out in the Group's 31 March 2004 audited statutory
accounts.

2.      Loss per ordinary share

                                        30 September   30 September   31 March
                                            2004           2003         2004
                                            £'000          £'000        £'000
Earnings attributable to ordinary
shareholders
Loss for the financial period                (809)          (563)        (282)
                                             -----          -----        -----
Weighted average number of ordinary
shares issued during the year (000's)      28,581         26,621       27,504
Dilutive effect of share options                -              -            -
                                            -----         ------        -----

Basic earnings per share                    (2.8p)          (2.1p)       (1.0p)
                                           ------           ------       ------

FRS 14 requires presentation of diluted EPS when a company could be called upon
to issue shares that would decrease net profit or increase net loss per share.
For a loss making company with outstanding share options, net loss per share
would only be increased by the exercise of underwater share options. Since it
seems inappropriate to assume that option holders would exercise underwater
share options, and there are no other diluting future share issues, diluted EPS
has not been presented.
















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