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Fidelity Systems PLC (FID)

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Friday 24 September, 2010

Fidelity Systems PLC

Half-yearly Report



Despite the shaky economy I am pleased to be able to report further growth
resulting in an increase in both turnover and profit during the first half of
the financial year to 31st August 2010.


Turnover was GBP 964,365 compared to the previous year's GBP 706,260, an
increase of 36%. Pre tax profits were GBP 178,033 compared to the previous
year's GBP 127,695, an increase of 39%. Earnings per share have increased to
0.59p from last year's 0.42p. Our balance sheet continues to remain healthy
with a cash reserve of GBP 957,485 as of 31st August 2010.


We have continued to increase our presence in the higher education sector and
Fidelity are now the largest single supplier of EPoS systems to Universities in
the UK. I mentioned in my last year end report that Fidelity, in partnership
with Magna Carta Chipcard Solutions BV, had been successful in a tender for a
new campus cashless card system for Keele University. I am now able to report
that the system was installed during the summer and was completed in time for
the students and staff returning in September. A total of forty-seven PC based
touch screen EPoS terminals with smart card readers were installed in all areas
of the campus where cash is taken. These included the bars, cafeteria's and
shops. Seven wall mounted card revalue stations accepting both cash and credit
cards together with a web portal for card top up were also supplied. A total of
20,000 Mifare cards were printed and distributed to students and staff with a
further twenty-seven card payment terminals linked to printers and
photocopiers. The total value of the order was around GBP 250,000. I believe
this is one of the largest integrated campus card systems in the UK.


We recently finished a project that was a joint partnership with the East
Riding of Yorkshire Council for the development of software that measures
interventions with customers in leisure centres. The project won funding
through the Regional Efficiency and Improvement programme and has received
sponsorship from the NHS. This visual information system for the gym instructor
highlights the chances of the member leaving and prompts for an intervention.
The results have been encouraging with an increase in Gym member retention of
35%, increased satisfaction levels of customers and an increase in gym
memberships of 23%. This product seamlessly integrates with Fidelity's Leisure
Centre software Leisuretouch and is currently being rolled out across the


Since joining the original "Ofex" market in 2000 (now Plusmarket) we have been
disappointed to say the least with the liquidity our shares have received. In
spite of paying dividends for the past three years, having a healthy balance
sheet, having continuous profits and a full order book, the current share price
does not reflect the true value of the company. Over the last few years I have
made many regular announcements regarding the company's progress and
achievements and watched the share price creep up only to see it come crashing
down because of the sale of what amounts to a few hundred pounds worth of
shares. Because of the large number of small shareholders we have, the board is
looking into the possibility of introducing a share buyback or similar scheme
to try and counter the overhang. If the liquidity still does not improve then
we shall look into alternative markets or consider other options.


Until the banks start supporting the business sector I cannot see the economy
improving unless the new coalition addresses this. They seem, on the surface at
least, to have cleaned up their act regarding MP's expenses and I hope they
will be as diligent in supporting the business community. With regard to
Fidelity, we will strive to increase our market penetration in all areas,
improve our existing products and develop cutting edge new ones.

Paul Lowsley


24th September 2010


                                      Half Year               Half Year
                                      31.08.10                31.08.09
                                      unaudited               unaudited

                                        GBP                      GBP

Turnover                              964,365                 706,260

Cost of Sales                         342,736                 149,671

Gross Profit                  (64.5%) 621,629         (78.8%) 556,589

Administration Expenses               448,684                 434,970

Operating Profit / Loss               172,945                 121,619

Interest Receivable                     5,088                   6,076

PROFIT / LOSS ON ORDINARY ACTIVITIES  178,033                 127,695

EARNINGS PER SHARE                     0.59                    0.42p

The interim accounts and comparative figures have been prepared on a basis of
accounting policies consistent with those used in the Group's audited accounts
for the year ended 28th February 2009. The financial results have not been
audited but have been reviewed by the auditors


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