Interim Results

Focus Solutions Group PLC
05 December 2006


FOCUS SOLUTIONS GROUP PLC

Interim results for the six months ended 30 September 2006 (unaudited)



Focus Solutions Group Plc ("Focus" or "the Group"), a leading provider of
adaptive software solutions, today announces its interim results for the six
months ended 30 September 2006.

Highlights


   • Trading for first half in line with expectations
   • £0.4 million improvement in Operating Profit before Reorganisation Costs
     compared to last year
   • Total revenues up 3% to £2.8 million (2005: £2.7 million)
   • Operating Loss before reorganisation costs £0.1 million (2005: £0.5 million)
   • Operating loss before tax and interest £0.3 million (2005: £0.6 million)
   • Cash balances £0.4 million (2005: £0.3 million) and debt free
   • Cash generated from operating activities in period £0.3 million (2005: £0.7
     million) outflow
   • New contract wins in the period included:
     - Consultancy and development services for HSBC Bank Plc
     - Initial £60k software licence agreement with the UK subsidiary of a major 
       US provider of life, pensions and investment products
   • Further new contract wins since the period end:
     - Our largest ever contract win with HSBC worth £6.0 million over the next 
       18 months
     - First contract with BT worth £120k for the development of an online
       registration solution in Central Government
   • Loss per share 0.71 pence (2005: loss 2.0 pence)



Commenting on the results, Focus Chief Executive, Richard Stevenson said:

"The results for the first half of FY2007 show that the Company is continuing to
move forward. Revenues were up 3%, however with careful management of the cost
base we delivered a significantly improved performance. Over the past few months
we have announced a series of major contract wins. The latest HSBC contract win
is the most significant, awarded following eight months of consultancy work.
Further contract wins for the UK subsidiary of a major US Insurance Company and
from the established customer base have consolidated our position as the leading
Point of Sale solution provider to the UK Financial Services market.
Furthermore, the award of a contract from BT has provided further proof of the
applicability of our technology in other markets, particularly Government.
I am extremely pleased with the recent progress of the Company since becoming
CEO in March which gives me confidence that we will continue to build strength
in the business and enjoy further success in the short to medium term."

For further information
Focus Solutions Group plc

01926 468300

Richard Stevenson - Chief Executive
Martin Clements - Finance Director



Chairman's Statement

Business Review

It is with some pleasure that I report that the Group's results for the first
half of FY2007 continue to demonstrate strong progress in our business. Sales
revenues are up 3% on the same period last year. Our order backlog, as we enter
the second half of the year, stands at a record level and we remain confident we
will meet market expectations.

Richard Stevenson joined the Group as Chief Executive as at the start of March
2006. His impact has been immediate, with the reorganisation of the management
team in line with our strategic objectives, refocusing of effort on the
business's key strengths, improved efficiencies within the organisation, and
developing the team and company ethos which he believes will ensure the future
success of the business. The Board is exceptionally pleased with the impact
Richard has made since joining us and is confidently expecting further positive
developments in the Group's future.

Focus has continued to win business against major competition in the Point of
Sale market, with a strong record in the Life and Pensions, Bancassurance and
Mortgage sectors. With highly successful solutions delivered to the likes of
Norwich Union, Openwork and Barclays Bank in recent years, leading UK financial
services business will naturally call on the expertise of Focus when new front
end systems are required. Our ability to rapidly generate and deploy software,
delivering return on investment in exceptionally short timescales, remains the
major differentiator.

Since the start of FY2007, we have seen further progress with the award of a
series of consultancy services contracts from HSBC Bank plc worth £1.28 million
in aggregate. Our ability to deliver consultancy services to HSBC's timetable
led to the award of a contract in November worth approximately £6.0 million over
the next two years. This is the Company's largest ever contract win.

The Group has also won business from two new customers in its core UK life and
pensions market. In October, we won a one year licence, worth £60,000 for the
supply of our Focus technology software to the UK subsidiary of a major US
provider of life, pensions and investment products. This followed the award of
an initial consultancy contract in the first half and has been followed by
further orders for consultancy services. It is expected that this will lead to a
further significant contract for the delivery of an extranet solution providing
support for financial advisers selling and servicing retirement products.

During the period we have continued to win further business from established
customers including Openwork, Barclays, Home of Choice, Prudential, Scottish
Equitable and the Co-Operative Bank. A prudent approach to revenue recognition
will also lead to a significant increase in software licence revenues in the
second half of FY2007.

For some time, we have recognised the value of our software and the value of its
potential application outside of the UK financial services market, and to this
end there has been significant new progress in terms of identifying
opportunities, securing long term contracts with partners and developing a sales
pipeline. For example, last month, we announced the award of a potentially
significant order from BT, worth £120,000 initially, for the delivery of an
online registration solution to enable businesses to electronically register
company incorporations. The Focus software will form part of a framework
available for other business to Government transactions. This agreement gives
the Group a real platform for growth outside of UK financial services.


Financial Review

Turnover in the first half of the year was up 3% at £2.8 million (2005:£2.7
million).

An Operating Loss before Reorganisation Costs of £0.1 million compared to a loss
of £0.5 million in the same period last year. As in previous years, we expect
revenues to be substantially greater in the second half than in the first half.

Total costs in the first half were £3.1 million, £0.2 million down on the same
period last year, a decrease of 7%. This reflected the continued tight control
over expenditure, despite the increasing activity levels. We expect some
additional costs in the second half as the business gears up to deliver the
order book. However, we would also expect to see the benefits of increased
economies of scale to be felt in the second half.

There were a number of one-off or exceptional costs relating to the
reorganisation of the Group which were incurred in the first half and which
totalled £181k. Operating Loss after reorganisation costs and before tax was
£0.3 million compared to £0.6 million last year. This was in line with
expectations.

We are now generating cash on an improved basis and remain debt free. Cash
balances at the end of September were £0.4 million (2005: £0.3 million; 31 March
2006: £0.1 million). Overdraft facilities totalling £500k are available to us
from our bankers, HSBC plc. Cash inflow from operating activities in the first
half was £261k (2005: £724k outflow). With the expected improvement in trading
in the second half, we anticipate that the business will be cash generative in
the second half. The Directors continually review the funding requirements for
the Group and will ensure that the continued development of the business is
properly funded.

The loss per share of 0.71 pence per share compares to 2.0 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.


Operational Review

Focus has built on the progress made last year. We have won important new
customers as well as winning additional business from our established customer
base.

The changes in regulations in the life and pensions market have certainly led to
some major financial institutions changing their sales processes, and their
supporting technology, to sell products from a wide range of providers. Focus'
e-trading solutions and extensive footprint in the life assurance market has put
the Company in a strong position to support the organisations who have chosen to
become distributors, or multi-tied, and this has resulted in major strategic
projects.

Changes in regulations affecting the sales of mortgages have also been driving
demand from organisations across the mortgage sector and the customer base now
increasingly reflects mortgage providers, distributors and portals.

The development of the business outside UK financial services has been a central
plank of our strategy for some time. The highlight in this regard has
undoubtedly been the contract win with BT. Government targets for e-Government
are driving the public sector to look at how, and where, it captures the data
for any services it makes available electronically. The characteristics and
capabilities of our XML toolkit, goal:technology, provides highly effective
solutions to these problems. We have therefore focused attention on building
relationships with established suppliers to the public sector and the initial
results have been encouraging.

Investment in development continues, extending the breadth of the product range
offered to our customers and in new technologies.


Outlook

It remains our strategy to create a sustainable and scalable business. 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.

With the strengthening of the Group's balance sheet, the management team have a
clear strategy for both organic and non-organic growth and is looking to broaden
the Company's portfolio where and when appropriate.

Our sales pipeline is at its highest level to date and we expect this to
contribute to a further improvement in financial performance in the second half.

Alastair M. Taylor
Chairman



Focus Solutions Group plc
Summarised Consolidated Profit and Loss Account
For the six months ended 30 September 2006

                                        (Unaudited)    (Unaudited)    (Audited)
                                          6 months       6 months         Year
                                             ended          ended        ended
                                      30 September   30 September     31 March
                                              2006           2005         2006
                                             Total          Total        Total
                                              £000           £000         £000

Turnover                                     2,806          2,731        6,585
Cost of sales                               (1,129)        (1,040)      (2,055)
Gross profit                                 1,677          1,691        4,530

Overheads
Distribution costs                            (582)          (678)      (1,424)
Administrative expenses (including
re-organisation costs of £181k,
2005:£120k, FY2006 £257k)                   (1,391)        (1,615)      (2,996)
                                            (1,973)        (2,293)      (4,420)
Operating (Loss)/ Profit                      (296)          (602)         110
                                         -----------   ------------ ------------
Operating (Loss)/ Profit before
reorganisation Costs                          (115)          (482)         367
reorganisation costs                          (181)          (120)        (257)
Operating (Loss)/ Profit after
reorganisation costs                          (296)          (602)         110
                                         -----------   ------------ ------------
Net Interest receivable                         11             17           18
(Loss)/ Profit on ordinary activities
before taxation                               (285)          (585)         128
Taxation                                        83              -            -
(Loss)/ Profit on ordinary activities
after taxation and retained loss for
the period                                    (202)          (585)          26
                                          ==========   ============== ==========
Basic and diluted (Loss)/ Earnings
per ordinary share (note 2)                  (0.71p)         (2.0p)        0.1p
                                          ==========   ============== ==========


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 2006

                                                                      Restated
                                       (Unaudited)   (Unaudited)      (Audited)
                                         6 months      6 months           Year
                                            ended         ended          ended
                                     30 September  30 September       31 March
                                             2006          2005           2006
                                             £000          £000           £000 

Fixed Assets                                  157           144            135
Tangible Assets                               157           144            135
Current Assets                              2,642         2,378          4,147
Debtors                                       418           262            123
Cash at bank and in hand                    3,060         2,640          4,270
Creditors: amounts falling
due within one year                        (1,070)       (1,149)        (2,056)
                                          -------       -------        --------
Net Current Assets                          1,990         1,491          2,214 

Total Assets less current
liabilities                                 2,147         1,635          2,349

Creditors: amounts falling due in               -             -              -
more than one year
                                         --------       -------         -------
Net Assets                                  2,147         1,635          2,349
                                         ========       =======         =======     

Capital and Reserves

Called up share capital                     2,864         2,864          2,864
Shares to be issued                             -             -              -
Share premium                               9,832         9,833          9,832
Merger reserve                                220           220            220
Share option reserve                           55             -             55
Profit and Loss Account                  (10, 824)      (11,282)       (10,622)
                                          -------        ------         ------ 
Shareholders' funds                         2,147         1,635          2,349
Equity interest
                                          =======        ======         ======


Focus Solutions Group plc
Summarised Consolidated Cash Flow Statement
For the six months ended 30 September 2006

                                        (Unaudited)   (Unaudited)   (Audited)
                                          6 months      6 months        Year
                                             ended         ended       ended
                                           30 Sept       30 Sept    31 March 
                                              2006          2005        2006
                                              £000          £000        £000

Net cash inflow/ (outflow) from                261          (724)       (833)
operating activities
Returns on investments and                      11            17          18
servicing of finance
Taxation                                        83             -           -
Capital expenditure and                        (60)          (48)        (79)
financial investment

Cash inflow/ (outflow) before
management of                                  295          (755)       (894)
liquid resources and financing   

Financing                                         
Increase / (Decrease) in cash                    -            10          10
Change in net debt resulting from cash
flows                                          295          (745)       (884)
Increase/ (Decrease) in cash in the
period                                         295          (745)       (884)
Cash outflow from increase in liquid             -             -           -
resources

Movement in net funds in the period            295          (745)       (884)

Net funds at start of year                     123         1,007       1,007
Net funds at end of period                     418           262         123




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 2006, which
received an unqualified audit report, have been delivered to the Registrar of
Companies.

The unaudited financial information has been prepared on a consistent basis with
the accounting policies set out in the Group's 31 March 2006 audited statutory
accounts with the exception of FRS 20 (see below) and are consistent with those
which will be adopted in the accounts for the year ending 31st March 2007.

2.      Loss per ordinary share

                                          30 September 30 September  31 March
                                                  2006         2005      2006
                                                 £'000        £'000     £'000

Earnings attributable to ordinary
shareholders

(Loss)/ Profit for the financial
period                                            (202)        (585)      128

Weighted average number of ordinary
shares issued during the year (000's)           28,642       28,615    28,629

Dilutive effect of share options                     -            -       223

Basic and Diluted earnings per share             (0.71p)       (2.0p)    0.45p



3.      Reorganisation costs

Reorganisation costs related to the restructuring of the business into two
separate business streams and to management reorganisation.



4.      Reconciliation to shareholders' funds organisation costs

               Share     Share    Merger        Share   Profit and     Total
             Capital   Premium   Reserve       Option         Loss     
                                              Reserve      account
               £'000     £'000     £'000        £'000        £'000     £'000

As at 1
April
2006 as
previously     2,864     9,832       220            -      (10,567)    2,349
reported

Transferred
to
Share Option       -         -         -           55          (55)        -
Reserve

Loss for the
period             -         -         -            -         (202)     (202)
             _______   _______   _______      _______       _______   _______
At 30
September      2,864     9,832       220           55      (10,824)    2,147
2006         _______   _______   _______      _______       _______   _______   


Opening reserves have been restated as a result of the adoption of FRS20 - share
based payments. This has created a share option reserve at 31 March 2006 of £55k
and increased the retained loss brought forward to £10.622 million.




                      This information is provided by RNS
            The company news service from the London Stock Exchange