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Kalamazoo Comp Grp. (KLMZ)

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Monday 20 December, 1999

Kalamazoo Comp Grp.

Interim Results - 6 Months to 30 Sept 1999, Part 2

Kalamazoo Computer Group PLC
20 December 1999



PART 2
                               
                 KALAMAZOO COMPUTER GROUP PLC
  INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 1999
                               



Consolidated Profit and Loss Account
                                6 months   6 months    12 months
                                   to         to           to
                            30 September  30 September  31 March
                                  1999        1998        1999
                                  £000        £000        £000
Turnover                                            
Continuing operations and                           
share of joint ventures          32,566     31,413      64,766
Less: share of joint ventures       (39)       (16)        (61)
                                 -----------------------------
Continuing operations            32,527     31,397      64,705
Discontinued operations             241        621       1,165
                                 -----------------------------
Total Group turnover             32,768     32,018      65,870
                                 =============================                 
  
Operating charges                                   
Continuing operations                               
      -  other                   32,505     32,128      65,667
      -  exceptional items            -          -       1,493
                                 ----------------------------- 
Continuing operations            32,505     32,128      67,160
Discontinued operations             162        443         810
                                 -----------------------------
Total Group operating charges    32,667     32,571      67,970
                                 =============================                 
  
Operating profit/(loss)                             
Continuing operations                22       (731)     (2,455)
Discontinued operations              79        178         355
                                 -----------------------------
                                    101       (553)     (2,100)
Share of operating                                  
(loss)/profit in                    
   -  joint ventures                (32)       (19)        (34)         
   -  associates                     36         11          78
                                 ------------------------------
                                      4         (8)         44
                                 ------------------------------                
   
Total Group operating               105       (561)     (2,056)
profit/(loss)
                                                    
Profit on sale of business                          
discontinued                      
   -  surplus over net assets     1,137          -          90
   -  less goodwill
previously written off             (533)         -        (217)
                                 -------------------------------
                                    604          -        (127)
                                 -------------------------------
Profit/(loss) on ordinary                           
activities before interest          709       (561)     (2,183)
Interest receivable                  66         39          63
Interest payable                    (21)       (28)        (78)
                                 ------------------------------                
   
Profit/(loss) on ordinary                           
activities before taxation          754       (550)     (2,198)
Tax on profit/(loss) on         
ordinary activities                (203)      (165)         84
                                 -----------------------------
                                                    
Profit/(loss) on ordinary           551       (715)     (2,114)
activities after taxation
Equity minority interest              -          -          67
                                 ------------------------------
Profit/(loss) for the period                        
attributable to shareholders        551       (715)     (2,047)
                                 ==============================                
    
Earnings/(loss) per share            0.9p      (1.1p)      (3.3p)              
          
                                 ------------------------------    
Diluted earnings/(loss) per                           
share                              0.9p      (1.1p)      (3.3p)
                                 ------------------------------
Earnings/(loss) per share                             
excluding exceptional items        0.0p      (1.1p)      (0.7p)                
    
                                 ============================== 


Consolidated Balance Sheet

                                     30 September     31 March
                                           1999           1999
                                           £000           £000
Fixed assets                                      
Tangible assets                           7,958          9,582
Investments:                                      
in joint ventures:                                
  -        share of gross assets            114             27
  -        share of gross liabilities      (193)           (74)
  -        less provision made               79             47
                                      ------------------------ 
                                              -              -
  -        in associates                    139            106
                                      ------------------------ 
                                          8,097          9,688
Current assets                                    
Stocks                                    4,602          4,246
Debtors                                  21,498         16,888
Cash at bank and in hand                  1,558          6,514
                                      ------------------------
                                         27,658         27,648
Current liabilities                               
Creditors: amounts falling due          
within one year                         (21,930)       (24,498)
                                       ------------------------
Net current assets                        5,728          3,150
                                       -----------------------
Total assets less current               
liabilities                              13,825         12,838
                                                  
Creditors: amounts falling due                -            -
after more than one year
Provision for liabilities and           
charges                                  (1,274)        (1,274)
                                        -----------------------
Net assets employed                      12,551         11,564
                                        =======================          
Financed by:                                      
Capital and reserves
                                                  
Called up share capital                   6,254          6,254
Share premium account                    22,942         22,942
Revaluation reserve                       5,102          5,102
Profit and loss account                 (21,747)       (22,734)
                                        -----------------------           
Total Equity Shareholders' Funds         12,551         11,564
                                        ======================


Consolidated Cash Flow Statement

                                6 months   6 months     12 months
                                   to         to           to
                            30 September  30 September  31 March
                                 1999        1998         1999
                                 £000        £000         £000
                                                     
Cash flow from operating         
activities                     (7,416)     (2,812)         333
                                                     
Returns on investments and            
servicing of finance               45          11          (15)
Taxation                          411           -         (136)
Capital expenditure and          
disposals                        (202)       (329)        (737)
Sale of businesses              2,487           -         (115)
                                -------------------------------
                                                     
Cash inflow/(outflow)          (4,675)     (3,130)        (670)
before financing
                                                     
Financing                                            
  - reduction in debt            (186)       (203)        (230)
                               --------------------------------
                                 (186)       (203)        (230)
                               --------------------------------
(Decrease)/increase in cash 
in period                      (4,861)     (3,333)        (900)
                               ================================                
        
                                                     
Reconciliation of net cash                           
flow to movement in net debt    
                                                     
Decrease in cash in period     (4,861)     (3,333)        (900)
Cash outflow from decrease in                        
debt and lease financing          186         203          230
                               -------------------------------
Change in net debt resulting    
from cash flows                (4,675)     (3,130)        (670)
Translation difference            (95)        142          231
                               -------------------------------                 
     
Movement in net cash/(debt) in   
period                         (4,770)     (2,988)        (439)
Net (debt)/cash at beginning     
of period                       6,326       6,765        6,765
                               -------------------------------
Net (debt)/cash at end of        
period                          1,556       3,777        6,326
                               ===============================
Notes:

1.In addition to the profit for the period there is a foreign
  exchange translation loss of £95,000 which is included in
  the total recognised gains and losses for the period.

2.The  interim  results for the six months ended 30  September
  1999  have  neither been reviewed nor audited and have  been
  prepared on the basis of accounting policies consistent with
  those adopted for the year ended 31 March 1999 as set out in
  the  financial  statements  of  the  Group.   The  financial
  information  contained herein does not constitute  statutory
  accounts  within the meaning of section 240 of the Companies
  Act  1985.  Statutory accounts for the year ended  31  March
  1999,  incorporating an unqualified audit report, have  been
  filed with the Registrar of Companies.

3.The earnings/(loss) per share of 0.9p (30 September 1998, loss
  per  share 1.1p) is calculated on the profit of £551,000 (30
  September 1998 - loss of £715,000) and the average number of
  shares in issue 62,539,186 (30 September 1998 - 62,539,186).

  The  diluted  earnings/(loss) per share of 0.9p (30  September
  1998,  loss per share 1.1p) is calculated on the  profit  of
  £551,000  (30  September 1998 - loss of  £715,000)  and  the
  average  number of shares in issue 62,539,186 (30  September
  1998 - 62,539,186) plus the number of shares that would have
  been  issued on the conversion of all the dilutive potential
  shares  into ordinary shares, 228,315 (30 September  1998  -
  228,315).

4.The  Group has given serious consideration to the impact  of
  the  year  2000 on the systems that it uses to  conduct  its
  business.  New software was implemented in April 1999 and at
  the same time various PC's were replaced to provide enhanced
  performance.  The running cost of these operations, based on
  the  cost  of third party products and replacement  hardware
  was £1 million which will be paid over a five year operating
  lease that commenced in April 1999.

5.The profit and loss account, balance sheet  and  cash  flow
  statements have been prepared on a basis consistent with the
  statutory financial statements for the year to 31 March 1999
  except  that  FRS  15  transitional  provisions  have   been
  applied.  This allows for the Group's revalued assets to  be
  frozen.   The  assets previously re-valued will retain  this
  value at modified historic cost.  This has no effect on  the
  Interim Financial statements.

6.Reconciliation of operating profits to operating cash flows

                                6 months     6 months   12 months
                                   to           to         to
                             30 September  30 September 31 March
                                  1999         1998       1999
                                  £000         £000       £000
                                                     
Operating profit/(loss)            101         (553)    (2,100)
Depreciation charge                592          633      1,382
(Increase)/decrease in stocks     (365)         (64)        78
(Increase)/decrease in debtors  (4,031)      (1,150)    (2,801)
Increase/(decrease) in          
creditors                       (3,713)      (1,678)     3,774
                                ------------------------------
Net cash (outflow)/inflow                       
from operating activities       (7,416)      (2,812)       333
                                ==============================
7.  Analysis of net funds
                                                             30
                            1 April  Cash     Exchange  September
                              1999    Flow     Movement     1999
                              £000    £000       £000       £000
                                                     
Cash at bank and in hand     6,514  (4,861)       (95)     1,558
Debt due within one year      (185)    185          -         -
Finance leases                  (3)      1          -         (2)
                             ------------------------------------              
            
Total net funds              6,326  (4,675)       (95)     1,556
                             ===================================

8.  Sale of Business

                                6 months   6 months     12 months
                                   to         to            to
                            30 September  30 September   31 March
                                 1999        1998          1999
                                 £000        £000         £000
Net assets disposed of:                              
   -  Tangible fixed assets     1,234          -            -
   -  Stocks                        9          -            -
   -  Debtors                     185          -            -
   -  Cash at bank                 -           -            23
   -  Trade creditors             (78)         -          (113)
                            ----------------------------------- 
                                1,350          -           (90)
Profit on disposal              1,137          -            90
                            -----------------------------------
                                2,487          -            -
                            ===================================
Satisfied by:                                        
Cash:                           2,487          -            -
                            ===================================

9.  The  interim report will be mailed to shareholders  within
  the  next three days.  Copies may also be obtained from  the
  Company  Secretary, Legal and Secretarial  Dept.,  Kalamazoo
  Computer Group plc, Northfield, Birmingham, B31 2RW.


                                                                                                                                                                                                                     

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