11 June 2007

KEWILL SYSTEMS PLC

Preliminary results for the year ended 31 March 2007

Kewill Systems plc ("Kewill" or "the Company" or “the Group”), the provider of software and solutions to enable dynamic supply networks, announces its preliminary results for the year ended 31 March 2007 prepared under IFRS.

Financial Highlights

· Revenue increased 31% to £41.6m (2005/6: £31.6m)

· Operating profits before amortisation of intangibles up 56% to £4.7m (2005/6: £3.0m)

· Operating profit of £1.0m (2005/6: £0.9m)

· Adjusted EPS** up 13% to 6.8p (2005/6: 6.0p)

· EPS was 1.9p (2005/6: 3.4p)

· Net cash balance of £5.3m (2005/6: £13.0m) after acquisition payments of £12.0m

· Proposed dividend of 0.5p per share, Kewill’s first dividend payment in 8 years

Operational Highlights

· Acquisitive growth increased our customer base, geographic footprint and offerings:

o CSF in Germany and Switzerland for £3.01m (€4.4m) in cash

o IPACS in Asia for £1.85m in cash

o Innovate IT in the Netherlands and USA for £5.65m cash and £1.37m in shares

o All three acquisitions include contingent consideration

· Order Management and Visibility:

o Increased sales to £10.2m (2005/6: £9.7m), includes two weeks of Innovate IT

o Underlying profits* have increased to £2.7m (2005/6: £2.1m)

o Strong new business from insurance sector replacing lost retail revenues

o New clients this year included Towergate, ARB, eGroups and Glasgow C.C

o New projects with established clients such as Nisa Today, Brakes, Sainsbury’s and J.D. Williams

· Enterprise Shipping Management:

o Revenues increased 13% in constant currency terms, 5% in Sterling to £11.3m (2005/6: £10.7m), including large contract with Purolator Courier Ltd

o Underlying profits* increased to £1.2m (2005/6: £0.7m)

o Sales of Clippership to small & medium sized clients stabilised from last year

o New client wins during the year included Purolator, Diebold and GSI

· International Trade and Logistics:

o Revenues increased 80% to £20.1m (2005/6: £11.2m)

o Underlying profit* increased to £2.8m (2005/6: £1.7m)

o Slower growth than planned from CSF acquisition from delay in mandatory date for electronic filing of export documentation in European Community to 2009

o New client wins during the year included Panalpina, DHL Global Forwarding, Panasonic and NSK Europe

*Underlying profits relates to operating profits before amortisation of intangibles

** Adjusted EPS is based on earnings before amortisation of intangibles and notional interest on contingent consideration.

Paul Nichols, Chief Executive Officer, commented:

“With our best results in 6 years, this year has been an important one. We have made a number of acquisitions which have increased our customer base, geographic footprint and solution offerings. I am particularly pleased by strong sales in the insurance sector which have replaced lost retail revenues and also improved sales of Clippership to small and medium sized customers, which have stabilised after last year’s decline. We have worked hard to eradicate traditionally weak areas and this year all our businesses have demonstrated solid growth. The strength of the business has led the Board to propose the re-initiation of a dividend, the first for 8 years.

“Our performance over the past twelve months and the strategic changes we have made to the business give me confidence that we are now positioned to achieve strong continued growth in both revenue and profits during both the forthcoming year and in future years.”

For further information please contact:

Kewill Systems plc	Tel. 020 8971 6774
Paul Nichols, Chief Executive
Guy Millward, Finance Director

Financial Dynamics	Tel. 020 7831 3113
Edward Bridges / Juliet Clarke / Hannah Sloane

ANNUAL REVIEW

OVERVIEW

I am very proud to open this year’s Annual Review by reporting that Kewill has made tremendous progress during 2006/7 towards its goal of becoming the leading global solution vendor for dynamic supply networks. We have grown our business across all divisions and recorded a 31% increase in revenue, a 56% increase in underlying profits* and a very strong profit to cash conversion of 114% during this financial year. A significant share of this has been reinvested in our most recent acquisitions and a further amount will be distributed to our shareholders in the form of the dividend announced today of 0.5p per share, Kewill’s first dividend payment in 8 years.

I am particularly pleased to say that, as planned, this growth has been organic as well as acquisitive, with double-digit organic growth (in constant currency) in Enterprise Shipping Management in the US and International Trade and Logistics in both the US and Europe. We have added over 1,000 new customers, a range of complementary products and associated services and a widely enhanced geographic distribution capability through 3 strategic acquisitions in Europe, North America and Asia during the year. Kewill is now a truly global company with 600 employees located in 10 countries across 5 continents supporting tens of thousands of users across 16 time zones. Value to our clients is delivered through our most valuable asset, our employees, 44% of whom have been in our company for over 5 years and as a result offer deep knowledge and domain skills in our chosen areas of focus.

We have continued to move our business model to one that is more balanced between licence and recurring revenue through wider deployment of a Software as a Service (SaaS) model and in doing so have increased the visibility over our future revenues. Acquisitions made during the year have helped us increase our annually contracted revenue as a percentage of the total, in the case of CSF 68% and in the case of Innovate IT all of their customers operate in a managed service environment. During 2006/7 hosted subscriptions and transactional revenue accounted for 19% of Kewill’s business and in 2007/8, with a full year contribution from the new businesses, we expect this to rise to around 26%.

Our performance over the past twelve months and the strategic changes we have made make me feel very confident that we are now positioned to achieve strong continued growth in our business during the forthcoming year and into the future.

Operating and Financial Performance

Group revenues have grown this year by 31% to £41.6m (2005/6: £31.6m) and underlying profits* for the year were up 56% to £4.7m (2005/6: £3.0m). These results would have been 7% higher but for the effect of the weak dollar on the translation of the profits of our US business. Operating profits were £1.0m (2005/6: £0.9m) and through increased efficiencies and profitable acquisitions we have improved our operating margins (17 basis points) from 9.5% to 11.2%. Our cash generation has been very strong with cash from operations in the year at £5.3m (2005/6: £2.1m), a profit to cash conversion rate of 114%.

The International Trade and Logistics business increased revenues to £20.1m (2005/6: £11.2m) with organic revenue growth exceeding 10% (in constant currency) in both the US and Europe and solid performances from our acquisition of CSF in Germany and Switzerland and IPACS in Asia. Underlying profits* grew in line with revenues to £2.8m (2005/6: £1.7m), with operating profits of £0.9m (2005/6: £1.1m). Strong sales of compliance products in the US and our logistics solutions in Europe were responsible for the organic revenue growth. The CSF acquisition grew less strongly than we had planned as a result of the delay to the mandatory date for electronic filing of export documentation in the European Community by 18 months to 2009. Our opportunity in this market for strong growth remains given our dominant market position and we are confident this growth will now be realised during 2007/8 and 2008/9.

The Order Management and Visibility business increased sales to £10.2m (2005/6: £9.7m) with strong new business coming from the insurance sector to replace lost retail revenues as a result of business closure at Allders and Littlewoods Stores and the inclusion of two weeks trading of Innovate IT, purchased on 14 March 2007. Underlying profits* in this division have risen to £2.7m (2005/6: £2.1m), an underlying operating margin of 26% (2005/6: 22%). Operating profits were £2.2m (2005/6: £1.8m).

Enterprise Shipping Management grew revenues 13% (in constant currency) largely as a result of the delivery of the initial phases of the multi-year, multi-million dollar contract signed on 2 October 2006 with Purolator Courier Ltd., Canada’s largest courier company. When reported in sterling revenues rose 5% to £11.3m (2005/6: £10.7m). In addition, sales of Clippership to small and medium sized customers have stabilised after last year’s decline. Underlying profits* increased to £1.2m (2005/6: £0.7m) with operating losses of just £0.03m (2005/6: £0.5m).

Central costs, including share-based payments, have risen in the year to £2.0m (2005/6: £1.5m) as we invest in the integration of our acquisitions with the strengthening of our group technology and product management as discussed later in the review. As part of this integration we have restructured the organisation of our business on a geographic basis, sharing local resources in back office functions. In future we will report segmental information on this geographic basis to bring it in line with the way the group is now managed and the business is structured.

The Group’s cash balances remained strong at the year end at £5.3m (31 March 2006: £13.0m) despite payments made during the year for the acquisitions. This was as a result of strong cash generation from operations during the year of £5.3m (2005/6: £2.1m). The availability of tax losses carried forward from prior years in both the UK and the US continue to reduce our tax payments.

The progress made this year gives the Board enough confidence in the strength of the business to propose a dividend of 0.5 pence per share, its first dividend payment for 8 years. The dividend will be paid on 1 October 2007 to shareholders on the register as of 7 September 2007. The Group intends to adopt a progressive dividend policy.

Acquisitions

During the year we made three new additions to the Kewill family with CSF in Germany & Switzerland, IPACS in Asia and Innovate IT in the Netherlands and USA. Each of these has brought new customers, new solutions, talented people and immediate additional revenue and profitability to the Kewill Group. With these additions Kewill has been able to build and articulate a strategy for growth in some of the fastest growing parts of the dynamic supply network market.

0n 16 June 2006 we announced the acquisition of CSF GmbH, a privately-owned leading provider of freight forwarding and customs clearance solutions in the German and Swiss markets. The company employs over 70 experienced professionals with offices near Frankfurt, Hamburg, Dusseldorf and Basel in Switzerland. CSF’s customs product Zabis and freight forwarding application B2®Logistik are used by over 700 Logistics Services Providers (LSPs), customs agencies and shippers including DHL/Deutsche Post Group, Wincanton, TNT, FedEx, UPS, Deutsche Bahn/Schenker Group, Panalpina, Hellmann, Yusen and Expeditors Global, airlines such as Lufthansa and Air Canada and enterprise shippers such as Volkswagen, Canon, Samsung and Nintendo.

This global expansion of our international trade and logistics business was completed on 14 February 2007 when we announced the acquisition of IPACS e-Solutions, a leading Asian solution provider in the transportation and logistics industry. Kewill-IPACS employs around 70 staff in offices in Singapore, Hong Kong and Shanghai, the world’s three largest ports, that together serve marketplaces across Southeast Asia, Korea, Japan and Greater China. The IPACS’s freight forwarding solution, Advanced Logistics System (ALS), is designed on an open platform with leading edge Java and J2EE technology that can handle international data and multi-lingual formats. The flexibility and scalability of ALS is allowing its adaptation by Kewill for the varying operational requirements of the North American and European marketplace. The IPACS’s customs product, Tradenet, and freight and logistics applications are used by over 700 LSPs and customs agencies.

Near the close of the year on 14 March 2007, we acquired Innovate IT Holding B.V. based in the Netherlands and the USA, which added a key new growth market of After Sales Service Logistics. Innovate IT currently has 6 direct and 12 indirect customers in the High Tech and Service Logistics sectors. Their business model is a pure hosted SaaS solution with 100% of revenue coming from subscription, transaction fees and associated professional services. In January 2007 Innovate IT signed a contract with HP to provide them with a solution that will be used to manage HP desktop/laptop repair and exchange service programs within the EMEA region. During the year and through their web based service Innovate IT handled close to a million accesses a day on their servers and processed transactions that supported 3.2 million service parts to be shipped. Innovate has recently introduced 24x7x365 support for Call Centres in 9 countries, Regional Distribution Centres in 14 countries, Repair Centres in 6 countries and 942 Field Stocking Locations in support of thousands of engineers.

As a result of these and our other acquisitions over the last few years Kewill’s Dynamic Supply Network suite has grown to include all aspects of international supply chain management with applications for order management, supplier enablement, enterprise shipping, transportation management, customs handling including import, export and compliance, warehouse management, international trade and logistics and business integration. During this year we have strengthened our solution offerings in the high growth markets of global freight forwarding and after sales service logistics and added employees, customers and expertise in China, Germany, Hong Kong, Japan, Malaysia, Philippines, Singapore, Sri Lanka, Switzerland, Taiwan and Thailand.

The Dynamic Supply Network Market

Over the last decade the supply chain has become a competitive differentiator for all businesses. Over the same period most supply chains have become broader, more complex and significantly more global. This has driven a transition in focus on improving the supply chain from planning to execution and now businesses are looking to enhance these elements by providing flexibility, visibility, responsiveness and compliance.

Most companies will face significant challenges in navigating the complex regulatory, financial and logistics environments created as crossborder trade increases in volume and complexity. Global trade has become a source of competitive differentiation, so companies must begin mapping its effects on their business functions, activities and process landscapes. However, technology is now removing barriers that have constrained world trade and hence the demand for global trade management solutions is growing. As reported by Forrester Research, “As globalization becomes a reality for any manufacturer or retailer looking to expand internationally, firms struggle to quantify the costs associated with a highly distributed global supply network. Costs can range from direct setup and ongoing management costs to indirect costs resulting from losses in supply chain adaptability.

Any company looking to expand globally must view global trade as a business goal that will undoubtedly have an impact on most functional areas. To better plan for global expansion firms must gauge the longterm fit of their products in new markets, make the necessary changes to functional groups responsible for global trade, and invest in the best solutions for continuous global trade management.

In a study of trends in the Transportation Management Systems (TMS) market ARC Advisory Group state that the market grew to nearly $990m in 2005 and is forecast to exceed $1.3bn by 2010 representing a Cumulative Annual Growth Rate (CAGR) approaching 7%. Within that growth TMS sales to LSPs are growing at 11% and sales of Global Trade Management solutions at 12.7%. These are both focus areas for Kewill and one of the reasons why we are experiencing double digit growth in our international businesses.

Kewill’s Global Growth and Markets

Kewill has benefited from this growth in our key international trade markets, not just in the financial figures quoted earlier in this review, but also in the Key Performance Indicators (KPIs) we use to measure our business internally. In addition to this growth in our core business, in order to reduce the risk to Kewill’s future business from any one vertical market or geography we have also diversified through our own software development and recent acquisitions into new markets and new geographies.

In the UK we made a concerted drive to capitalise on the customer base acquired during 2005/6 in financial services with a specific campaign focussed on the insurance segment. Towergate is the fastest growing insurance intermediary in the UK, offering 200 specialist insurance products and employing more than 3,000 people in 100 offices. During 2006/7 Kewill entered a three year agreement to provide a hosted system to manage the electronic communications within Towergate’s underwriting business. Using the Kewill Insurance Xchange (KIX) technology, Towergate can now communicate product information in real-time to brokers across a common platform. Because KIX allows for straight-through processing across any technology, it also allows brokers to trade electronically and supports compliance to regulatory bodies.

A second new vertical market in the UK has been opened up by us adapting our Kewill MessageBroker solution to meet the needs of local government authorities. During 2006/7 we won an initial contract with Glasgow City Council (GCC) as part of one of the largest eProcurement programmes undertaken in the UK’s public sector. GCC has approximately 35,000 employees and is the largest of the 32 local authorities in Scotland responsible for the delivery of services to the city and its 600,000 residents. The council and Kewill have worked together to successfully transform the way that the authority procures and pays for goods and services. When the system is complete it is expected to save some £0.5m per annum in invoice processing alone.

In Europe we won several contracts for our integrated TMS/WMS/Customs systems with European customers such as Gondrand, TNT, NSK and Vredestein. Gondrand has been a long time customer of Kewill in multiple countries and during 2005/6, after evaluating the market, the Board of Gondrand selected Kewill to roll out its integrated logistics solution, Kewill Chainware, to all subsidiaries for their transport and global forwarding activities. TNT Special Services, following a successful pilot project in Italy utilising the Kewill Warehousing product, selected us for worldwide use in their Storapart operations.

TNT will now operate our offering across Europe, Middle East, Africa, Latin America and Asia. In the automotive sector, NSK and Vredestein, both large shippers of products, selected Kewill Chainware for their warehouse, transport and customs needs. In North America we used our market leading Kewill Flagship solution to win a major contract with the leading Canadian overnight courier company Purolator Courier Ltd. Over the next few years this solution will be rolled out to over 5,000 Purolator customers to replace their existing old technology installations. This next generation enterprise shipping solution will provide systems for customers across a variety of size and shipping needs and also allow Purolator to enhance its support of all customers with instant communications. Canada is a key trading partner with the USA and our Kewill Trade & Logistics business implemented our enterprise wide Kewill Alliance solution for A.N. Deringer, a major provider of customs house brokerage services (specialising in cross border transactions), international freight forwarding and distribution services throughout the US. The deployed Kewill solution included customs clearance and freight forwarding as well as newly designed dashboard and imaging solutions that are at the forefront of the industry. This solution is now supporting hundreds of users clearing thousands of transactions a day and providing visibility and accelerated clearance for A.N Deringer customers.

Further new markets have been opened through our acquisition strategy. These include new geographic markets in Germany and Switzerland through CSF and in Asia through IPACS. Both these businesses are heavily involved in the provision of leading edge customs automation software and services in their respective geographies as these countries go through the process of automating their export systems. In the German market we have seen our customers preferring the delivery of our solutions via a hosted model with the positive effect of increasing our recurring revenue. In the last year DHL Global Forwarding and TNT Express have changed from licensing and running the software themselves to a hosted solution from Kewill.

In Europe, our membership of the European Trade Network (ETN) through Kewill CSF, was rewarded when the ETN was awarded project of the month in April 2007 by the European Commission. ETN provides online electronic services through an interconnected network for trans-European customs and trade information exchange and handles different national customs regulations. This gives Kewill an important positioning because, as the main technical solution provider in the ETN, we are able to participate in many different European working groups relating to customs administration.

In Singapore, TradeXchange is the name of the Singapore government’s initiative to promote the country as an e-logistics hub, providing the IT infrastructure for an information gateway for the trade and logistics industry. Functions provided include customs clearance solutions for Asian, North American and Australian customs clearance, B2B document exchange compliant to all standards including RosettaNet, EDIFACT, ANSI and direct links to shipping lines and airline portals. Kewill - IPACS has been selected as one of the preferred TradeXchange Value Added Service (VAS) suppliers for logistics service providers.

Product Innovation and Investment

As a software and services supplier keeping ahead of the market in terms of products and solutions for our clients is a key area of focus and in 2006/7 we invested 9% (2005/6: 9%) of our revenue in new product development. Included in this investment was the move of our software development teams in India into an outsourced partnership with GlobalLogic. This arrangement provides us with improved flexibility and scalability in our ever changing development needs and will ensure that we take advantage of best practice in managing the complex process of onshore and offshore development.

During 2006/7 Kewill added a Chief Technology Officer (CTO) to its group management team to ensure that we take full advantage of the recent acquisitions by laying out a future technology path that maximises our opportunities for cross-selling products around the globe. This plan involves the use of modern techniques, such as Service Oriented Architecture (SOA) and Agile development methodology, to create a Dynamic Supply Network suite. This will enable us to migrate our products onto a common platform so that multiple products can be combined into new solutions for sale into existing and new clients. This process will also reduce the number of disparate technologies that we are required to support and thereby help us to continue to improve group margins.

During the year our Enterprise Shipping division initiated an aggressive product enhancement programme that is bringing current and future enterprise level customers into the next generation of shipping management. In addition to achieving global certification with FedEx we delivered two major new releases of our Kewill Flagship software during the year and announced four further releases for 2007/8. We have also recently launched support for hazardous materials, an enhanced user interface, improved configurability and shape-based rating functionality, which has come at a time of major change in the shipping industry. During 2006/7 the US parcel carriers altered the methodologies they use to charge for their services, highlighting the importance of a flexible parcel shipping solution such as Kewill’s as a pre-requisite for intelligent distribution management.

Kewill Alliance has been enriched with the addition of market-leading dashboard and imaging modules that significantly expand the functionality and managerial capability of our customs house brokerage (CHB) solution. Other enhancements in this area focused on the release of a “hands-free” entry process allowing brokers to maximize productivity by using EDI shipment data for customs releases without human intervention. In the compliance area the re-entry product was expanded to include a major new module to allow shippers to enter commercial invoice information over the web allowing shipments to be expedited by a broker. On the export side the compliance product continued its growth in expanding into new countries with new country content and forms. Specifically for the German market we made two major releases during the year to handle the new Automated Export System (AES) which is being mandated for use for all exports by July 2009. The team also completed development of an enhancement named “AES Cockpit for SAP”, to enable Kewill customers to connect different national customs services directly to SAP systems.

Our Kewill Chainware Logistics solution saw continued product enhancement with a new major release developed using the latest Java/AJAX web technology and the industry leading Service Oriented Architecture (SOA). This release saw the addition of refined internationalisation, the integration of a third party CRM product and a new Graphical User Interface (GUI). In the areas of Transport and Warehouse Management we added new onboard Computer Integrated Technology (CIT) for mapping and integration with external advanced planning systems and the introduction of modern VoiceXML based tools in the picking process. Our freight forwarding solution benefited from improved container structure and handling and with the addition of IPACS in Singapore we added a new Java based product, ALS, that will be an important part of our Kewill Dynamic Supply Network Suite as we integrate our solutions around the world.

In the local Asian markets ALS has been selected by the Singapore government to be part of the TradeXchange service offerings planned to be launched in October 2007. TradeXchange will deliver a tighter integration between business flows of trade and logistics communities by providing direct connections to many critical supply chain portals such as U.S. Customs for Advanced Manifest Submission (AMS), Canada Customs for ACI submission, Australia for CMR submission, INTTRA and GT*Nexus for cargo space reservation. It also enables manufacturers, suppliers and traders to exchange purchase order data with logistics players using RosettaNet messaging standards. Kewill-IPACS has already established ALS in China, Hong Kong, Japan and Singapore. In subsequent releases ALS will be further enhanced to meet the needs and requirements of North American and European markets. This will include interfacing with customs solutions in those geographies and connectivity with harbour systems and shipping companies in the US to support denied party screening and to handle local issues such as VAT in the European Community.

Additional Routes to Market

The acquisitions we made this year have added new vertical markets and new geographies to our portfolio. In addition to this we have strengthened our sales and marketing resources in our traditional markets including the addition of experienced enterprise level sales executives into our North America and European sales teams. The growing compliance market in the US has been a beneficiary of this focus with increases in licence revenue of 61%, hosted fees of 64%, maintenance of 15% and professional services of 116%. We have also added to our inside sales teams to grow the revenue from within our large existing customer base around the world. In North America we have recruited two seasoned professionals to expand our focus on the Value Added Reseller and partner channels and this has ensured a return to growth in the sales of licences to our Small & Medium Enterprises (SME) customers with Clippership licence revenue growing over 7% year on year and we would expect to see continued growth this financial year.

Kewill is also partnering with other software vendors to extend our routes to market and to add new products to meet our customer’s needs. During 2006/7 specific new partnerships have been signed with Optima for their new US truck manifest solution, Icarus in Ireland as a reseller of the Kewill Export Compliance System (ECS), a new 3 year agreement with GXS for TradingGrid Messaging Services, becoming a Sponsor partner of GS1 and Agentrix for Global Data Synchronisation (GDS). This is in addition to our existing partnerships, including SAP, whereby their US distributors will be selling our Clippership product as part of the SAP Business One suite to their SME customers.

Strengthened Management & Processes

One of Kewill’s key assets is its people and their skill and experience, both in the specific domains and vertical markets in which we operate and also in their knowledge of software and service processes. During 2006/7 we grew our employee base around the world to 600 people and in India we are supplementing this with up to 100 contractors from our partner GlobalLogic for software development of our Flagship product and in support of our contract with Purolator Courier Ltd. The depth of experience in our chosen markets can be seen from the fact that 44% of our employees have over 5 years and 19% have over 10 years of service in the company. This is a clear differentiator of our company and a barrier to entry for potential competitors in the highly regulated and complex markets relating to logistics, customs operations and compliance.

We have added to our management depth and capability through the hiring of a CTO and the deployment of several existing executives into group-wide marketing and product management roles specifically to focus on the creation of our global Dynamic Supply Network Suite. Our North America business hired several seasoned executives from the industry with significant enterprise level experience including new Vice Presidents for Professional Services, Development, Product Marketing, Finance and Sales. In the UK we added experienced marketing executives to focus on new business and lead generation particularly in the new verticals such as Insurance. Finally, across the group we added delivery resources to meet the growth in business in professional services and particularly in support of our fast-growing managed services business.

Future Prospects / Outlook

This has been an exciting year for Kewill with a number of key acquisitions broadening and strengthening both our geographical and solution coverage and a return to growth in our traditional businesses. Through our focus on high growth, high margin sectors we have positioned ourselves to continue to grow into the future. I feel very confident in our future and look forward to continued growth in all aspects of our business and across all geographies as the opportunities for cross selling increase and we integrate our products and businesses.

Finally I would like to thank our shareholders and customers for their continued support and all of our employees around the globe for their efforts in helping us in our mission to become the leading global supplier of Dynamic Supply Network solutions.

Paul Nichols

Chief Executive Officer

Kewill Systems plc

8 June 2007

Consolidated income statement

for the year ended 31 March 2007

	2007	2006
	£000	£000

Revenue – continuing operations	41,583	31,648
Cost of sales	(3,820)	(3,043)
Gross profit	37,763	28,605
Total net operating expenses	(36,748)	(27,675)
Operating profit	1,015	930
Analysed as:
Operating profit before amortisation	4,681	3,009
Amortisation of intangibles	(3,666)	(2,079)
Operating profit	1,015	930
Net interest receivable on cash and short term deposits	362	671
Interest payable - notional interest on contingent consideration	(242)	-
Profit before taxation	1,135	1,601
Taxation	328	1,172
Profit for the year from continuing operations	1,463	2,773
Discontinued operations
Net loss from discontinued operations	-	(92)
Profit for the year	1,463	2,681


Basic earnings per share	1.9p	3.4p
Diluted earnings per share	1.8p	3.3p
Basic earnings per share from continuing operations	1.9p	3.5p
Diluted earnings per share from continuing operations	1.8p	3.4p

Consolidated statement of changes in shareholders' equity

for the year to 31 March 2007

	Share	Share	Merger	Translation	Profit and
	capital	premium	reserve	reserve	loss	Total
Group	£000	£000	£000	£000	£000	£000

At 1 April 2005	787	38,239	976	(191)	(15,769)	24,042
Currency translation differences	-	-	-	413	-	413
Net income recognised directly in equity	-	-	-	413	-	413
Retained profit for the year	-	-	-	-	2,681	2,681
Total recognised income for the year	-	-	-	413