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Fidelity Systems PLC (FID)

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Monday 29 June, 2009

Fidelity Systems PLC

Final Results


Fidelity Systems plc

Chairman's Statement

for the year ended 28th February, 2009

It gives me great pleasure in presenting Fidelity's final results for the
financial year ended 28th February 2009.

Although the overall turnover and profit are not as high as in the previous
financial year, which was an exceptional one, the results nevertheless are
still good.

We suffered as many companies did in the last quarter of our financial year,
with the credit crunch affecting corporate expenditure and the UK economic
downturn starting to bite. December and January are, by tradition usually
fairly quiet in our industry, but this year February was also included.

Results

The group achieved a turnover of £1,425,332 for the year to 28th February 2009
(compared to £1,641,514 for the last financial year to 29th February 2008).

Gross profit margins increased to 75% compared to 2008 (67%). Profit on
ordinary activities before taxation was £240,695 compared to the previous year
(£278,069)

We still have a strong balance sheet with a cash balance at the end of the year
of £1,044,211 after the payment of the dividend and a surplus of current assets
over current liabilities of £1,122,850.

The group's profit after taxation has been added to reserves.

Operating Review

The first half of the financial year saw further University orders, with the
majority of installations taking place over the summer. New Universities added
to our existing client list have included Bangor, Suffolk, Northumbria,
Bournemouth and Bolton with a further seven existing University clients having
new hardware and software installed. In total Fidelity now has its EPoS
hardware and software in a total of fifty seven universities and colleges in
the UK with a further twenty or so having Fidelity software supplied by our
resellers.

As part of our collaboration with the East Riding of Yorkshire Council (ERYC),
Fidelity was awarded a contract in excess of GBP 20,000 for the installation of
new Electronic Point of Sale (EPOS) hardware and software for the Spa Theatre
in Bridlington which reopened in July after a complete rebuild costing in
excess of GBP 20m. A further contract from the ERYC for in excess of GBP 30,000
was for software upgrades to its SureCard Leisure Centre system to enable
residents to be able to use the newly introduced senior citizens bus pass to
gain access to its estate of ten Leisure Centres. This new scheme introduced by
the government in April 2008 utilises smart cards with photo ID and Fidelity
have successfully upgraded the councils system to be able to accept both
magnetic cards and smart cards.

The sales of software via our dealer network performed strongly during the year
with sales of G-POS, Fidelity's touch screen EPoS software performing
particularly well.

Fidelity's card production department also saw strong sales during the period,
one area which has increased year on year with very little marketing spend.

Fidelity currently employs four full time software developers and although
mainly working on existing products still managed to account for in excess of
GBP 70,000 for bespoke software development.

Research & Product Development

We have two new products destined for launch in 2009. The first is a completely
new suite of EPoS back office software, Total Control Premier. This is a high
end product which will enable us to attack a much larger corporate market as
well as giving us opportunities to upgrade our existing clients.

The second is the SQL version of our existing Instant Loyalty software.
Similarly to Total Control Premier, this new version will enable us again to
approach larger clients particularly in the education sector.

We have developed in house a wall mounted cashless revaluer aimed at the school
meals sector. This is was launched in February 2009.

Interim Dividend

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.

Prospects & Outlook

Despite the current economic downturn, we are in the fortunate position of
having clients we supply directly in both the education and the public sectors.
Usually they are the last to be affected. We also have an active dealer network
both in the UK and abroad who are very proactive at selling Fidelity's
products. This is not to say that we are resting on our laurels - far from it
and we are currently investigating new markets to sell our diverse range of
products.

The only dramatic move taken was in September 2008 when we transferred the
majority of the companies cash reserves from HBOS into Northern Rock who's
funds are allegedly 100% safe being backed by the government.

Post Year End

With regard to the financial mess the country is in I shall ensure that in the
short term all expenditure at Fidelity is kept to an absolute minimum. We have
ample cash reserves, no long or short term borrowings, no bank loans or
overdrafts, we own the freehold on our head office property and the majority of
the vehicles are paid for. So saying we are increasing the budget for marketing
this year with a revamp of the company's marketing media plus the new web site
should be live within the next month. Having been in business during two
previous economic downturns, I am making sure that the support level to our
existing clients does not slip and that maximum effort is being made to attract
new ones.

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

Paul Lowsley

Chairman

Fidelity Systems Plc

Audited Group Profit and Loss Account

for the year ended 28th February, 2009

                                                2009               2008       
                                                                              
                                                 £                  £         
                                                                              
Turnover                                                                      
                                                                              
Continuing                               1,425,332          1,641,514         
                                                                              
Acquisitions                                                                  
                                                                              
Total turnover                           1,425,332          1,641,514         
                                                                              
Profit on ordinary activities before     240,695            278,069           
taxation                                                                      
                                                                              
Tax on profit on ordinary activities     21,500             58,558            
                                                                              
Profit on ordinary activities after      219,195            219,511           
taxation                                                                      
                                                                              
Dividends                                                                     
                                                                              
Retained profit for the financial period 219,195            219,511           
                                                                              
Profit per share - basic                 0.71p              0.71p             
                                                                              

Fidelity Systems Plc

Audited Group Balance Sheet

at 28th February, 2009

                                                2009               2008       
                                                                              
                                                 £                  £         
                                                                              
Fixed assets                             297,976            310,939           
                                                                              
Current assets                           1,229,005,         1,184,291         
                                                                              
Current liabilities                      106,155            184,913           
                                                                              
Net current assets                       1,122,850          999,378           
                                                                              
Total assets less current liabilities    1,420,826          1,310,317         
                                                                              
Creditors: amounts falling due after                        -                 
more                                                                          
                                                                              
then one year                                                                 
                                                                              
Provisions for liabilities and charges   (3,037)            (4,164)           
                                                                              
Net assets                               1,417,789          1,036,153         
                                                                              
Capital and reserves                                                          
                                                                              
Called up share capital                  3,086,381          3,073,109         
                                                                              
Share premium account                    651,301            651,301           
                                                                              
Other reserves                           (2,494,050)        (2,494,050)       
                                                                              
Profit and loss account                  174,157            (75,793)          
                                                                              
Equity shareholders' funds               1,417,789          1,036,153         
                                                                              


                                                                     

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