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Fidelity Systems PLC (FID)

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Thursday 19 June, 2008

Fidelity Systems PLC

Final Results

Fidelity Systems plc

Chairman's Statement for the year ended 29th February, 2008

It gives me great pleasure in presenting Fidelity's final results for the
financial year ended 29th February 2008. I am pleased to be able to report
further strong growth for the group with a significant increase in both
turnover and profit for the year.


The group achieved a turnover of £1,641,514 for the year to 29th February 2008
(compared to £1,156,114 for the last financial year to 28th February 2007) an
increase of 41.9%.

Gross profit margins of 67% were broadly consistent with 2007. Profit on
ordinary activities before taxation was £278,069 compared to the previous year
(£50,663) an increase of £227,406. The group's profit after taxation of 
£219,511 (£45,974) has been added to reserves.

Operating Review

The year has seen sustained growth in all areas within the company with sales
of hardware and software to our educational clients more than doubling compared
to the same period last year.

Following a successful exhibition at the annual NUSSL (National Union of
Student Services Ltd) show in Telford in June and due to ongoing negotiations,
I was pleased to be able to report that seventeen Universities placed orders
with Fidelity for either new systems or upgrades to existing systems for
installation over the summer of 2007. Fidelity now has its EPoS solution in
approx 40% of UK Universities.

The largest so far has been the University of Leeds with over fifty EPoS
terminals with Fidelity's G-POS touch screen software being installed in the
many bars and retail outlets across the campus. This was complemented by
Fidelity's back office software, Total Control. August 2007 was the best month
so far in the company's history with total value of invoiced sales exceeding 
£270,000. During this period across the summer, Hull experienced the worst
flooding in the city's history with over 17,000 homes and businesses being
affected, including many of Fidelity's staff. It is to the staff's credit that
they put the Company first and their own personal accommodation problems
second during what turned out to be the busiest three months of the company to

Residential retirement villages are a new vertical market for Fidelity and we
won contracts for villages in Yorkshire, Northamptonshire and Cornwall. These
are all "closed" sites with the residents living in purpose built accommodation
with many amenities on site including restaurants, bars, fitness centres and
shops. Fidelity is supplying all hardware and software to give management full
control over all of the amenities including the provision of cashless catering
and access control.

To start the New Year I was pleased to be able to announce a new contract worth
in excess of £100, 000 to supply a chain of 54 South Yorkshire pharmacy stores
with new EPoS hardware and software. The client currently uses Fidelity's back
office EPoS software and this latest contract is for PC based touch screens
running Fidelity's G-PoS software. The roll out began in January 2008 and the
contract was finished on schedule during March. Running alongside this was a
contract to supply another pharmacy chain with the same system. The second
client, based in the West Midlands currently has 24 stores all of which had the
Fidelity system installed. Since its launch in 2006, over two thousand copies
of our G-PoS software have been sold worldwide for use with retail and
hospitality EPoS touch screens.

To cope with this increase in business, Fidelity's support call centre has been
expanded and further technicians have been recruited although many of the
Southern area installations have taken place using engineers from our
Northampton office.

The sale of software to our dealers is also well up on the previous year with
sales of Fidelity's touch screen software, G-POS, accounting for the majority
of the increase. We had an extremely successful launch of the company's G-POS
touch screen software in Australia. Being a graphics based product, G-POS has
the facility to be configured to run in the many different languages of this
cosmopolitan country. Working in conjunction with Uniwell POS Australia,
Fidelity's Sydney based distributor, we recruited over twenty new resellers
during their annual dealer seminar. Uniwell POS Australia has a comprehensive
dealer network throughout Australia and the Pacific Islands and currently
distributes Fidelity's existing range of EPoS back office software.

Fidelity's chip & pin solution has been further extended by partnering with a
second provider, Commidea. Commidea is the UK's leading developer and provider
of debit and credit card payment processing systems and services. The company
has developed a range of unique, high performance and versatile systems for
virtually every working environment including high street retail, e-commerce,
mail order, telesales, memberships and hotels, leisure and hospitality.
Fidelity's G-POS touch screen software links seamlessly to Commidea's Ocius
product and it compliments Fidelity's range of software completely.

Research & Product Development

The majority of Fidelity's software is aimed at the retail, hospitality and
leisure centre markets. However, we are currently working on another product
aimed at a wider market based on RFID technology (Radio Frequency
Identification). This has not been a speculative exercise as we have been led
by existing client requests and have many potential orders waiting. I look
forward to bringing further news within the next few months.

Recent staff appointments

I am pleased to announce the appointment of Warren Ferguson as the new Managing
Director of ACR Fidelity, our Northampton based subsidiary. This took effect
from 1st February 2008 following the retirement of Allan Baxter, the current
Managing Director. Warren has been in the EPoS industry for over ten years and
brings with him a wealth of experience in our vertical market. I should like to
take this opportunity to thank Allan Baxter for his hard work and effort during
his time as MD and wish him well with his retirement.

Fidelity currently supply and support over fifty universities with our various
hardware and software products and are striving to increase this number. I am
pleased therefore to announce the appointment of Barry Halstead into the newly
created role of National University Account Manager. Barry brings to Fidelity
many years of University experience due to his previous position as Commercial
Services Manager at Leeds Metropolitan University. Supervising both the retail
and hospitality operations at Leeds Met, Barry has extensive working knowledge
of Fidelity's software plus many personal contacts with other Universities.

Change of Auditors

In line with company rotational policy we have changed auditors after five
years with Smailes Goldie Chartered Accountants to Sadofskys Chartered
Accountants. I should like to thank Smailes Goldie for their assistance and
professionalism over this period.

Change of Company Secretary

Chris Burton, our company secretary since the start has regrettably decided to
leave the legal profession and has resigned as company secretary of Fidelity
Systems plc. Chris has been invaluable to us over the years and will be greatly
missed. We have appointed Paul Plaxton, also of Gosschalks Solicitors to be our
new Company Secretary. We wish Chris the very best of luck for the future and
we welcome Paul to his new role.

Interim Dividend

Although post year end I was pleased to be able to announce that an interim
dividend of 0.35p net per 10p ordinary share was to be paid on Wednesday 30th
April 2008 to shareholders on the register at the close of trading on Friday
11th April 2008. No final dividend is to be paid.

Prospects & Outlook

The last year has seen Fidelity again strengthen its position in the market and
although we have increased our technical staff slightly we have made savings in
other areas and I will continue to keep a tight hold on expenditure.

I look forward to be able to announce further progress in the first half of our
new financial year.

Paul Lowsley


Fidelity Systems Plc

Audited Group Profit and Loss Account

for the year ended 29th February, 2008

                                           2008               2007       
                                            £                  £         
Continuing                               1,641,514          1,156,114         
Total turnover                           1,641,514          1,156,114         
Profit on ordinary activities before       278,069             50,663            
Tax on profit on ordinary activities        58,558              4,689             
Profit on ordinary activities after        219,511             45,974            
Dividends                                    -                  -                
Retained profit for the financial period   219,511             45,974            
Profit per share - basic                     0.71p              0.15p             

Fidelity Systems Plc

Audited Group Balance Sheet

at 29th February, 2008

                                            2008                2007       
                                             £                   £         
Fixed assets                               310,939            325,579           
Current assets                           1,184,291            866,085           
Current liabilities                        184,913             91,150            
Net current assets                         999,378            774,935           
Total assets less current liabilities    1,310,317          1,100,514         
Creditors: amounts falling due after        -                  (1,330)           
more than one year                                                                 
Provisions for liabilities and charges      (4,164)           (12,542)          
Net assets                               1,306,153          1,086,642         
Capital and reserves                                                          
Called up share capital                  3,073,109          3,073,109         
Share premium account                      651,301            651,301           
Other reserves                          (2,494,050)        (2,494,050)       
Profit and loss account                     75,793           (143,718)         
Equity shareholders' funds               1,306,153          1,086,642         


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