CEO 1st Phase Review

Torex Retail PLC
13 November 2006



Monday 13 November 2006




                               Torex Retail plc:

                         CEO 1st Phase Review Feedback



Torex Retail  Plc ('Torex Retail' or 'The Group') a leading supplier of IT
solutions to retail, hospitality and quick service restaurants worldwide today
announces an update which is issued following the appointment of the new Chief
Executive Officer, Neil Mitchell.



Following the completion of Phase 1 of his review and early presentation of
strategic insights, operational review and financial review, the Board of
Directors is pleased to confirm that the Group is in robust health and
continuing to provide a platform for sustainable organic growth.



In the short term, the Board of Directors is also pleased to confirm that the
Group is performing in line with underlying trading forecasts ahead of the
year-end close at the end of December.



The Board of Directors has noted recent market speculation and volatility in the
share price. Therefore, given that the CEO has overseen a diligent investigation
of all aspects of the business, incorporating intensive review of management
processes and financial controls, it is considered to be an appropriate time to
provide updated guidance.



Strategic Insights



The Group's high growth strategy has built a tremendous platform for growth
capable in future of supporting a much larger scale of business development -
the Group has a full technology product suite with some best of breed software
solutions, passionate people, large blue chip client base, strong presence in
its major markets, global reach and a sales pipeline which is substantial with
an increasing number of large and exciting commercial opportunities.



The more recent acquisitions of Savista Inc, TQIPS Ltd and Retail-J Limited have
bedded in well and are helping drive the go-forward product strategy.



Upon completion of the acquisition programme Torex Retail is composed of a
federation of business units which have come through early stage integration but
offer considerable scope for additional cost savings, benefits of scale and
further business development.



There is a need to move to a more clearly developed product strategy, market
segmentation and sales pipeline execution to reflect a shift towards larger
long-term software solutions and systems integration contracts.







Management Changes



The Board continues its search for an independent non-Executive Chairman to lead
and develop a high performing Board in future.   In conjunction with this
process a further announcement will be made at a later date with regard Board
re-structuring.



The Group headquarters are being re-modelled to be business orientated in
support of the operating divisions around the Office of the CEO.   The Board of
Directors is pleased to announce the recruitment of a Corporate Governance &
Investor Relations Manager, Corporate Development Manager and interim Group
Procurement Director. These appointments bring new skills sets to assist in
preparing Torex Retail through corporate governance and management standard
setting for rapid and aggressive growth.



Marcus Leek, in a wider role of Chief Financial Officer, now has responsibility
for Group IT and Group Procurement.



Financial Review



As previously committed, a detailed review of financial policies, procedures and
controls has been completed alongside a detailed examination of the Torex Retail
balance sheet and historic accounting.



This activity has been completed whilst continuing and enhancing the trading
performance and control of the Group.



Policy, Procedure and Control Assessment



The assessment initiated was a process co-ordinated by an independent resource
that focused on all aspects of internal policy and controls including
transaction processing, control and risk management and decision support.



The review has confirmed the solid financial platform that the organisation has
and continues to operate upon. All key business risk areas were and are being
managed within the localised control requirements.



This positive position has been further enhanced by a number of actions
completed over the course of the previous four weeks. These group-wide actions
include:



-         A comprehensive group accounting policy manual including transfer
pricing guidance has been agreed and issued.  This document includes guidance on
finance ethics and vision whilst effectively consolidating existing policies.

-         An accounting package dealing with all aspects of financial
consolidation has been launched.

-         Revised accounting and reporting control deadlines are now being
managed.

-         A detailed IFRS project scoping has been completed. Confirmation of
the external partner that we will work with on an adoption programme will be
issued shortly.

-         A comprehensive IT Infrastructure migration plan has been produced.
This plan has been reviewed, assessed and supported by two external professional
advisors. Activity on this area will commence through Q4 2006 without impact on
overall capital expenditure budgets.



The Board of Directors regard this activity as a further co-ordination of
existing accounting policies and approaches. This is required as the Group moves
into the next phase of growth and maturity.



Accounting Review



A detailed review of historic and forecast financial accounting has been managed
simultaneously and complementary to that of the policy, procedure and control
assessment. The programme involved all key management including that of the
subsidiary entities and assessed historic, current and forecast financial
statements to year end 2006.



The Board of Directors is pleased to confirm that this review has not identified
any material issues within the financial statements of the Group.



There are a small number of very specific contract items that require assessment
and re-alignment. These items require adjustment in the current year. As a
result of this assessment, the Board of Directors feel that it is appropriate
and prudent to offset £4.75m against the 2006 operating profit.



Trading & Cashflow Update



Ongoing, underlying trading in 2006 continues to be encouraging with each
operating division having a detailed delivery plan for both profit and cash
through to the 2006 year end. As a part of this, significant contract wins are
expected over the Q4 period.   There remains, however, the potential for out-
performance based on additional 2006 contract opportunities.



In light of the recent review of the trading position the Board of Directors
wish to revise the 2006 year end Net Debt expectation to £180m inclusive of the
convertible bond of £65M.



The key factor behind this adjustment to forecast debt levels is the delay of
cash receipts associated with the end-loaded profit streams through the
remainder of 2006. The revised expectation continues to maintain and enhance the
Groups' position against agreed facilities.



Prospects for profit and cash in 2006 and beyond remain strong.







Legal Review



A thorough review has been undertaken of legal services to substantiate any
claims, liabilities, disputes, arbitration cases, contract disputes, customer
issues and no significant hitherto undisclosed liabilities were found.



The dispute with Alphameric is now subject to determination by an independent
arbitrator but Torex Retail will retain the right of legal recourse on certain
issues. This is the position despite recent efforts by the Torex Retail CEO to
resolve the dispute amicably without further financial consequences for either
party. At this stage in proceedings the Board of Directors foresee no
significant reduction in earnings per share arising from this matter.



A further update will be provided on this legal matter immediately upon the
determination of the independent arbitrator, which is expected within Q4 2006.



Operational Review



Some summary action points from the Phase 1 Operations Review are highlighted
below:



1.      Very encouraging progress in the new Divisional organisation but further
development still required in some areas



2.      Significant opportunity for internal best practice programmes to drive
performance and for group purchase agreements to drive costs and cash



3.      Market segment analysis is now critical for

-         Resource allocation

-         Company decision making/investment priority

-         Growth



4.      Group marketing framework and talent needed to support market
penetration



5.      Group product strategy is fundamental to a re-allocation of costs to
most productive use



-         Develop product operations and capacity models versus divisional/
market 'pull' and a sales-led cost and organisational model

-         Consider developing the organisational model for 'core' product
development, wider implications and assessing implementation timescales

-         Need for standardising software development processes and measures;
best use of agreed software development budget in delivering product strategy



6.      Assessing sales models, sales processes and organisations for efficiency
and capability



7.      Plan for organisation transformation in UK Retail Division, driving
profitable growth and developing good practice process templates and process
measurement systems.  Enabling UK operations consolidation and economies of
scale



8.      Group wide operations strategy and templates needed for customer-led
international expansion; maximising the profit opportunity of the 'follow me'
strategy of customers in Retail, P&C, QSR



9.      Internal Group IT must focus on business infrastructure support



Renewed Customer Focus



We can increase focus on organic growth in all markets through:

-         Migrating massive installed base to own PoS products

-         Cross selling

-         Developing indirect channels

-         Leveraging market leadership position and developing own brand

-         Strategic partnerships and joint bidding on larger client contracts

To achieve high levels of organic growth as a technology company we must
re-orientate ourselves through all aspects of our commercial sales approach to
the business needs of our customers to ensure that we keep enhancing:



-         Blue chip customer base

-         Multi-national customers

-         Long term customer relationships

-         Customer satisfaction

-         Cross selling opportunities

     •   Additional solutions to existing customers

     •   Additional business growth with existing customers

     •   Next generation solutions for many existing customers



Special Initiatives



Following the CEO's early visits to major UK and USA shareholders, completely
new processes for professionally handling all aspects of Investor Relations are
being put into practice.



A new Accelerator Bonus scheme has been introduced in targeting and
incentivising key employees to deliver superior revenue, profit and cash
enhancement by the financial year end.



Administrative and management tasks and non-core activities are currently being
identified and considered for potential out-sourcing contracts.



Discussions have commenced with targeted global IT corporations to enter into
Strategic Vendor Relationships to provide more channels to market and enable the
re-negotiation of supplier agreements.



Special cost savings and efficiency improvement initiatives have been started in
all areas of Procurement, supply chain, inventory and warehousing to ensure that
we take full advantage of the total group purchasing volumes with our supply
partners.



New finance initiatives driven by new business demands have led to the
introduction of an International Cash Management System, and the development of
an IT/MIS Strategy, IT asset security programme, IFRS project and foreign
currency exchange system.



A review of small business units and product lines inherited as part of past
acquisitions and identified as non-core is ongoing. An announcement will be made
in financial year 2006 regarding the prospect of any disposals of non-core
assets.



In addition to providing the focus and leadership for the Management Information
and Process Management needed, the CEO's team will provide a platform for a
formalised risk assessment and ongoing risk management process within Torex.



The Group is beginning to secure a more corporate management style via several
different methods



1.                  Corporate Governance

2.                  Organisational structure

3.                  Management focus

4.                  Business Processes (financial, commercial and personnel)



Commenting on the update, Neil Mitchell, Chief Executive stated:  'With the
support of my internal senior management team and external professional advisors
I have worked tirelessly to completely review the financial and commercial
trading activities of Torex Retail Plc and to my delight I have found a solid
business platform.   As I perceived prior to my appointment, this is a classic
equity play, does everything it says on the box, and has a business model to
drive explosive growth from the existing infrastructure and sales pipeline.



I am therefore driving the business to execute more of the commercial
opportunities to provide for accelerated future growth.



I have launched Phase 2 of the Operational Review and at this stage will
particularly focus on management processes and corporate controls in a
standardised approach across the Group.   It is my intention that by the year
end at December 2006 we will have a Corporate Development Plan clearly outlining
our intentions to focus and re-shape all business around execution of sales
opportunities and delivery of higher customer service levels.



In the meantime the management team is delivery focussed and the respective
Operating divisions are absolutely attuned to delivery of the 2006 targets.



As the largest European player in an industry that is consolidating around us I
am very excited that my team will have the opportunity to take Torex Retail
through the next stage of its evolutionary development with a target to be the
global industry leader with a turnover in excess of £1billion'.



A conference call for UK & US institutional investors will be held today at 15:
00 GMT.



Participant dial in number:             [phone]   USA
                                        [phone] UK



A replay will be available until Wednesday 15 November.



Replay Telephone Number:           [phone]   USA
                                   [phone] UK

Replay Passcode:                   5681408#



                                    - ends -



Enquiries:



Torex Retail Plc

R Neil W Mitchell       Chief Executive Officer
Marcus Leek             Chief Financial Officer

Gavin Palmer Corporate Governance & Investor Relations Manager
0870 300 6061

Gavin Palmer can be contacted directly on 0795 1040558 with Neil Mitchell and
Marcus Leek contactable on the day via Citigate Dewe Rogerson



Citigate Dewe Rogerson

Ginny Pulbrook/Sebastian Hoyle/Freida Moore/Lucie Holloway

020 7638 9571


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