Final Results

IS Solutions PLC
07 April 2006


Issued by Citigate Dewe Rogerson Ltd, Birmingham
Date: Friday, 7 April 2006
                                                               Embargoed: 7.00am



IS Solutions plc
Preliminary Statement of results for the year ended 31 December 2005



Highlights

• Pre-tax profits £241k (2004: £108k)

• Profit stated pre-goodwill and provision for historic bad debt and on IFRS basis
  - post bad debt £127k

• Cash increased at year end to £2.087m (2004: £1.910m)

• Final dividend proposed of 0.27p per share (2004: 0.2p per share)

• Ist quarter 2006 turnover & profits up by 20%

• Acquisition of Candric Ltd. Completed March 2006

• Agreements signed with Google & Adobe


Chairman Barrie Clark said:
'As a result of our focus on broadening the product portfolio with software that
allows us to add value through implementation and training services the board
believes that we are now poised to return to significant top line growth.'





                            FULL STATEMENT ATTACHED

Enquiries:
John Lythall, Managing Director
IS Solutions Plc                            Citigate Dewe Rogerson Ltd
Tel: [phone]                           Tel: [phone]
www.issolutions.co.uk


                                      -2-

Statement by the Chairman
Turnover for the full year at £5.085 million (2004: £5.514 million) was in line
with the Board's expectations and pre-tax, pre goodwill impairment profits of
£241k were earned, prior to a provision in respect of a bad debt of £114k. The
Board has decided to take a prudent approach to the overdue debt mentioned at
the half year and reserve for it fully. The debt stemmed from work done in 2002
and whilst the customer continues to trade, IS Solutions retains the ownership
of the IPR of the software developed and will look to sell this to offset some
of the provision, though it is not known at this stage what it may realise.
Taking this into account, declared pre-tax, pre goodwill profits are £127k (2004
: £108k).

Earnings per share were 0.37 pence (2004 :Loss 1.17 pence) with net assets at
31st December 2005 standing at £2.601 million (2004 (restated under IFRS):
£2.573 million). Cash increased in the year to £2.087 million as at 31st
December 2005 (2004: £1.910 million).

At the half year the Board was pleased to announce an interim dividend payment
of 0.13 pence per share reflecting both the improving trading conditions and the
strong balance sheet and cash position of the Group. The second half trading
continued in the same vein and the cash has again improved; the Board therefore
is recommending a final dividend of 0.27 pence per share giving 0.4 pence per
share for the full year (2004: 0.3 pence). Subject to shareholders' approval at
the AGM, to be held on the 18th May 2006, this dividend will be paid on the 24th
May to shareholders on the register at close of business on the 28th April 2006.

In March of this year we purchased Candric Ltd., a small IT Services business
based in Windsor, with turnover of £697k and pre-tax loss of £11k in its last
financial year to August 2005. It is our intention to relocate the business into
our Head Office in Sunbury as quickly as possible and this, coupled with other
cost savings, should allow it to contribute a reasonable level of profit once
the consolidation is completed. Candric was bought for a total consideration of
£200k (made up of £150k cash and the balance in Treasury shares). The purchase
of Candric will strengthen our recurring revenue stream and give us a broader
base from which to grow our Support Services.

IS Solutions has continued its path of broadening its portfolio of software
products from which it earns both reseller and service revenues and during
recent months has made two significant signings: In December of 2005 we were the
first UK company to be signed up by Google to sell and implement their
'Enterprise Search Solution', the market for which is large corporate
organisations requiring the ability to locate information in multiple file
formats across their entire network and, more recently in March of this year, we
signed a distribution agreement with Adobe for their 'Knowledge Worker' products
which include Breeze, LiveCycle and Flex - IS Solutions was chosen for its
ability to add value with implementation, training and support services. Both
these signings are already contributing significant sales this year.

Although there has been a reduction in Financial Feeds project work, other areas
of project work are showing signs of recovery and the recurring revenue streams
generated by web and IT Services continue to cover a substantial proportion of
overheads.

Personnel

Once again the Board would like to express its appreciation and thanks to all
employees for their support through the whole of 2005, it is the teamwork &
commitment to quality shown by the employees that has allowed us to build the
strong & sustainable relationships we have with our clients and suppliers.





continued...

                                      -3-

Outlook

As a result of our focus on broadening the product portfolio with software that
allows us to add value through implementation and training services the board
believes that we are now poised to return to significant top line growth. This
is evidenced by the recent agreements with Adobe and Google, elements of
recovery in traditional project opportunities, and is substantiated by a 20%
growth in turnover in the first quarter of 2006 compared with the same period of
2005. This is accompanied by a similar level of bottom line growth.
For the remainder of the year we will also have the benefit of our recently
announced acquisition of Candric Ltd and will continue to look for other
suitable candidates for acquisition.

                                      -4-

  1.  Audited consolidated income statement for the year ended 31st December 2005

                                                                 2005     2004
                                                                £'000    £'000
---------------------------------------------------------------------------------
      Continuing operations
                               Turnover                         5,085    5,514
                               Cost of sales                   (2,652)  (3,038)
---------------------------------------------------------------------------------
      Gross profit                                              2,433    2,476
                               Distribution costs              (1,453)  (1,709)
                               Administration expenses           (971)  (1,167)
---------------------------------------------------------------------------------
      Profit/(loss) from operations                                 9     (400)

                               Investment income                   99       72
--------------------------------------------------------------           --------
      Profit/(loss) before tax                                    108     (328)
                               Tax                                (20)      72
---------------------------------------------------------------------------------
      Profit/(loss) for the period                                 88     (256)
---------------------------------------------------------------------------------

      Attributable to:
--------------------------
                               Equity holders of the parent        88     (290)
                               Minority interests                   -       34
---------------------------------------------------------------------------------
                                                                   88     (256)
---------------------------------------------------------------------------------

      Earnings per share
                               Basic                             0.37    (1.04)
                               Diluted                           0.35    (1.04)
---------------------------------------------------------------------------------

                                      -5-
      Consolidated statement of recognised income and expense for the year
---------------------------------------------------------------------------------
      There is no difference between the profit/loss for the period shown in the
      consolidated income statement and the total recognised income and expense
      for the period in both the current and preceding year.

  2.  Audited consolidated balance sheet as at 31st December 2005

                                                                 2005     2004
                                                                £'000    £'000
---------------------------------------------------------------------------------
      Non-current assets
                        Goodwill                                  100      100
                        Property, plant and equipment             223      299
---------------------------------------------------------------------------------
                                                                  323      399
---------------------------------------------------------------------------------
      Current assets
                        Trading investments                        75       51
                        Trade and other receivables               999    1,404
                        Tax repayable                           -           33
                        Cash and cash equivalents               2,087    1,910
---------------------------------------------------------------------------------
                                                                3,161    3,398
---------------------------------------------------------------------------------
      Total Assets                                              3,484    3,797
---------------------------------------------------------------------------------
      Current liabilities
                        Trade and other payables                 (863)  (1,224)
                        Tax liabilities                           (20)       -
---------------------------------------------------------------------------------
                                                                 (883)  (1,224)
      Non-current liabilities                                       -        -
---------------------------------------------------------------------------------
      Total liabilities                                          (883)  (1,224)
---------------------------------------------------------------------------------
      Net assets                                                2,601    2,573
---------------------------------------------------------------------------------

      Equity
                        Share capital                             496      496
                        Share premium account                   1,783    1,783
                        Own shares                               (102)    (102)
                        Retained earnings                         424      415
---------------------------------------------------------------------------------
      Attributable to equity holders of the parent              2,601    2,592

                        Minority interests                          -      (19)
---------------------------------------------------------------------------------
      Total equity                                              2,601    2,573
---------------------------------------------------------------------------------

                                      -6-

    3.  Consolidated cash flow statement for the year ended 31st December 2005

                                                               2005       2004
                                                              £'000      £'000
---------------------------------------------------------------------------------
        Operating activities
            Profit/(loss) from operations                         9       (400)
        Adjustments for:
            Depreciation of property, plant and equipment       108        137
            Amortisation of intangible assets                     -         55
            Impairment of goodwill                               19       (100)
            Decrease in debtors                                 405     (1,404)
            (Decrease)/increase in creditors                   (361)     1,224
---------------------------------------------------------------------------------
        Cash generated by operations                            180       (488)
            Income taxes repaid                                  33         39
---------------------------------------------------------------------------------
        Net cash from operating activities                      213       (449)
---------------------------------------------------------------------------------
        Investing activities
            Interest received                                    75         61
            Proceeds on disposal of trading investments           -         19
            Purchase of tangible fixed assets                   (61)      (129)
            Sale of tangible fixed assets                        29         12
---------------------------------------------------------------------------------
        Net cash from/(used in) investing activities             43        (37)
---------------------------------------------------------------------------------
        Financing activities
            Dividends paid                                      (79)       (25)
            Purchase of own shares                                -       (102)
---------------------------------------------------------------------------------
        Net cash used in financing activities                   (79)      (127)
---------------------------------------------------------------------------------
        Net /increase in cash and cash equivalents              177       (613)
            Cash and cash equivalents at start of year        1,910          -
---------------------------------------------------------------------------------
        Cash and cash equivalents at end of year              2,087       (613)
---------------------------------------------------------------------------------

                                      -7-

4.  Dividends                                           2005              2004
    Amounts recognised as distributions to equity      £'000             £'000
    holders                                          ----------------------------
      Final dividend for the year ended 31st              48                 -
      December 2004 of 0.20p (2003: 0.00p)

      Interim dividend for the year ended 31st            31                25
      December 2005 of 0.13p (2004: 0.10p)
                                                     ----------------------------
                                                          79                25
                                                     ----------------------------
      Proposed final dividend for the year ended          65
      31st December 2005 of 0.27p                    ---------

    The proposed final dividend is subject to shareholders' approval at the AGM
    and has not been included as a liability in these financial statements.

5. The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2005 or 2004. Statutory
accounts for 2004, which were prepared under UK GAAP, have been delivered to the
Registrar of Companies, and those for 2005 prepared under accounting standards
adopted by the EU, will be delivered following the company's annual general
meeting. The auditors have reported on those accounts; their report was
unqualified and did not contain statements under Section 237(2) or (3) of the
Companies Act 1985. but is derived from those accounts having restated 2004 as a
result of adopting IFRS.

6. The Annual General Meeting will be convened for Thursday 18th May 2006.

7. Copies of the Report and Accounts will be posted to Shareholders on 26th
April 2006 Further copies will be available after that date from the company's
registered office: Windmill House, 91-93 Windmill Road, Sunbury-on-Thames,
Middlesex, TW16 7EF.



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