Electronic Data Processing Announcements

Electronic Data Processing PLC
14 December 2007

Electronic Data Processing PLC (EDP)

Preliminary results for the year ended 30 September 2007
EDP is a leading IT solution provider to the UK wholesale distribution industry.
Highlights:
? Turnover up 5% at £6.6 million (2006: £6.3 million).

? Operating profit up 147% at £411,000 (2006: £166,000).

? Pre-tax profit up 57% at £700,000 (2006: £446,000 excluding profit on
sale of property).

? Increased number of hosting customers. Now 16% of revenues (2006: 11%).

? Continued R&D expenditure of £1.3 million in year.

? Contracted recurring revenues represent 69% of total.

? Integration of Vecta acquisition successfully completed during the
year and on track to be earnings enhancing in 2007/8.

? Cash balances of £6.0 million. Strong operating cash flows.

? Final dividend of 2.0p per share (2006: 1.9p). Overall dividend up 3.8%.

Michael Heller, Chairman of EDP, said:

"The market sector that the Group addresses remains very competitive. However,
we are seeing increased demand for our software products and hosting services
which, in turn, will translate into increased professional services revenues.
Accordingly I look forward to the coming year with confidence."

For further information please contact:
Julian Wassell Toby Mountford
Acting Chief Executive Citigate Dewe Rogerson
0114 2622007 020 7638 9571
www.edp.co.uk 07710 356611
Chairman's Statement

I am pleased to report a 5% increase in Group revenue for the year to 30
September 2007 to £6.6 million (2006: £6.3 million). Group pre-tax profit was
£700,000 compared with £446,000 (excluding £420,000 profit on the disposal of
our East Grinstead property last year).

These results reflect increased demand for our Quantum VS and Vecta software
products, set against the continued impact of our planned exit from the computer
maintenance business which now accounts for less than 5% of Group revenue. Our
cost base has been actively managed to reflect this exit and the number of
employees in the Group has fallen to 102 at the end of the financial year from
111 at the start.

We are continuing to see growth in our application hosting operation with more
customers electing to outsource their IT facilities on long-term contracts with
the Group. We currently host 56 customers and the revenue from this source now
accounts for 16% of our turnover (2006: 11%).

Contracted recurring revenues, which relate mainly to annual software licences
and hosting fees, account for 69% of total revenues. Our investment in Research
& Development has been maintained and £1.3 million has been charged in the
Income Statement during the year. This has largely been focussed on the
continued development of our distribution software applications together with
their integration with our Quantum VS software products.

In October 2006 we acquired the business and assets of Vecta Software
Corporation Limited, a leading provider of complementary Sales Intelligence
solutions. I am pleased to report that the acquisition of Vecta has been broadly
earnings neutral, in line with our expectations, and that we expect it to be
earnings enhancing in 2007/8. Vecta is discussed in more detail in the
Operating and Financial review. The Group continues to seek further compatible
acquisition opportunities.

The Group balance sheet remains strong with net assets of £13.9 million as at 30
September 2007. The Group continues to be very cash generative from operations.
Cash balances were £6.0 million compared with £6.4 million at 30 September
2006 which in part reflects the £919,000 cost of acquiring Vecta. A substantial
part of the Group's balance sheet is represented by our freehold properties.
The Board is currently reviewing the use of these properties with two of them
being marketed for sale or to let.

The Board is proposing to pay a final dividend of 2.0p per share which, together
with the interim dividend, would make a total for the year of 2.713p (2006:
2.613p), an increase of 3.8%. If approved by shareholders, the final dividend
will be paid on 7 April 2008 to those shareholders on the register at 7 March
2008. The shares will be ex-dividend on 5 March 2008.

On behalf of shareholders I would like to thank all our members of staff for
their input over the year particularly following the very sudden death of
Richard Jowitt on 23 May.

The market sector that the Group addresses remains very competitive. However,
we are seeing increased demand for our software products and hosting services
which, in turn, will translate into increased professional services revenues.
Accordingly I look forward to the coming year with confidence.
Michael Heller
Chairman
13 December 2007

Operating and Financial Review

The increase in turnover and operating profit during the year is very welcome
after a number of years of consolidation. Whilst we have seen continued
reductions, as expected, in certain traditional revenues such as hardware and
maintenance, this has been more than offset by increased software sales,
particularly of the new Vecta product. The Group's cost base continues to be
actively managed to reflect the changing requirements of the business.

I would very much like to thank all our members of staff for their hard work and
dedication over the last 12 months. Their efforts are essential to the
successful delivery of our software products and services and the continued
development of the Group in the future.

Operational Review

Existing operations

Competition in the marketplace for our four core distribution software
applications: Merchant, Charisma, Esprit and The Business Programme, remains
robust. However, the continued development of these products ensures that they
provide the additional functionality that our customers require. New releases
of the applications are delivered to underpin our software recurring revenue
streams.

Our customers are increasingly keen to obtain greater benefits from the use of
their existing EDP distribution applications by integrating our other software
products: Quantum VS Financials; QVS2, our e-business and catalogue management
product; and Quantum Highway, our XML-based system integration tool.

The integration of these products with the EDP back-office applications has been
one of the main areas of focus for our development teams over the last year.
There has been a satisfactory increase in the number of customer demonstrations
that we are currently involved in with the Quantum VS products.

Demand for our application hosting service, which operates out of our Milton
Keynes location, has remained strong. This revenue stream now represents 16% of
Group revenues, up from 11% last year. Where our customers elect to take
advantage of this facility and outsource their IT requirements, they are able to
effectively free themselves from the day-to-day issues involved in managing
increasingly complex IT solutions. The Group's recurring revenue stream is
strengthened through the long-term contracts associated with hosting, typically
between 3 and 5 years.

We are in the process of upgrading the infrastructure supporting the hosting
centre to allow us to accommodate increased customer numbers.
Vecta acquisition

As we reported last year, on 16 October 2006 we acquired the business and assets
of Vecta Software Corporation Limited, a leading provider of Sales Intelligence
solutions used by more than 200 companies. The Vecta business has been fully
integrated into the Group and now operates out of our Milton Keynes location.
The product utilises the Microsoft SQL database and is therefore readily adopted
within the marketplace.

Over the past year, as part of a deliberate strategy, we have continued to offer
software support to all existing users of the Vecta product, whether or not they
have re-contracted with the Group. By the year end a total of 73 Vecta
customers had entered into new agreements with the Group and we expect to see
additional existing users of the product renewing their licences and support
contracts with us for the first time over the coming year. As a result we
continue to expect the run-rate of sales to existing users to steadily increase.

The reported turnover of £504,000 relates only to newly signed software licences
and related professional services. Of this £169,000 arose in the first half and
£335,000 in the second half.

The Vecta OnDemand service was introduced during the year as planned whereby
customers are able to outsource delivery of the product using our application
hosting facility.

In November 2007 we have also taken on additional sales resource in order to
develop new business opportunities for both our Quantum VS product set and our
Vecta product which we believe will contribute to revenue in the second half of
the year.
Financial Review

Group pre-tax profit for the year was £700,000 which is after an amortisation
charge of £50,000 associated with the acquisition of the Vecta business.
Accordingly profit before tax and this amortisation charge was £750,000 for the
year which compares with profit before tax (excluding profit on the disposal of
our East Grinstead property of £420,000) last year of £446,000.

Operating profit at £411,000 compares with £166,000 last year. Our operating
margin has improved to 6.2% from 2.6% and our strategy is to see this improved
further.

Interest income for the year was £289,000 compared with £280,000. Whilst
underlying cash flow was strong, overall cash balances fell due to the cost of
acquiring Vecta. However, the effect of this has been more than offset by
higher interest rates.

The tax charge for the year amounted to £222,000, an effective tax rate of
31.7%. This is higher than the current rate of UK Corporation Tax reflecting
disallowable depreciation on certain buildings. Last year's tax charge at
£29,000 (3.3%) was unusually low. This was due to a tax credit of £98,000
relating to prior periods, and a very low tax charge on the profit on disposal
of property caused by indexation.

Earnings per share (EPS) amounted to 1.95p. Last year's basic EPS was 3.42p,
however this included profit on disposal of property and one-off tax credits.
Adjusting for these items gives a normalised EPS last year of 1.16p.

The level of Group recurring revenue, a principal key performance indicator,
remained strong in relation to the Group's costs. Contracted recurring revenue
at £4.54 million represented 69% of total Group revenue and compares with £4.61
million last year. Our planned exit from hardware maintenance reduced recurring
revenue by £150,000 whereas recurring revenues from software licences and
hosting increased by £80,000.

Cash balances were £5.96 million at 30 September 2007 compared with £6.44
million at 30 September 2006. Including professional costs the Vecta
acquisition accounted for £919,000. Cash inflows from operating activities were
strong at £713,000 (2006: £231,000). Other significant cash movements were
dividend payments of £639,000 and the deferred receipt of £200,000 relating to
the disposal of a property in the previous financial year.

Group net assets have increased to £13.9 million from £13.1 million at 30
September 2006. This is largely due to the recognition under IAS 19 (Employee
Benefits) of a surplus on the Group's defined benefit pension scheme of £823,000
less an associated deferred tax liability of £230,000. At 30 September 2006 the
position was a scheme deficit of £579,000 together with a deferred tax asset of
£174,000.

The Vecta acquisition resulted in an increase in intangible assets of £868,000
at 30 September 2007.

Net assets per share were 56.7p at 30 September 2007 compared with 53.5p. A
final dividend of 2.0p per share is proposed which, together with the interim
dividend of 0.713p, gives a total dividend for the year of 2.713p per share, an
increase of 3.8%.
Outlook

The Group has a strong portfolio of software products which has been
complemented during the year by the introduction of Vecta. The current year has
started well and, although we continue to face significant competition in our
marketplace, we are well positioned to take advantage of new business
opportunities.

Julian Wassell
Acting Chief Executive

13 December 2007

Consolidated Income Statement
for the year ended 30 September 2007

2007 2006
£'000 £'000
Revenue 6,618 6,325
Gross profit 6,089 5,762

Administrative expenses (5,678) (5,596)

Operating profit 411 166

Profit on sale of property - 420
Finance revenue 289 280

Profit before tax 700 866

Income tax expense (222) (29)

Profit for the period attributable to equity holders
of the parent 478 837
Earnings per share - basic and diluted 1.95p 3.42p
Dividends per share 2.713p 2.613p
Net assets per share 56.7p 53.5p
Consolidated Statement of Recognised Income and Expense
for the year ended 30 September 2007
2007 2006
£'000 £'000

Actuarial gains/(losses) on defined benefit pension scheme 1,352 (364)
Tax on items recognised directly in equity (391) 109
Foreign exchange translation difference (5) (1)

Net income/(expense) recognised directly in equity 956 (256)
Profit for the period 478 837

Total recognised income and expense attributable to equity
holders of the parent 1,434 581
Consolidated Balance Sheet
at 30 September 2007

2007 2006
£'000 £'000

Non-current assets
Property, plant and equipment 6,480 6,648
Investment property 660 668
Deferred tax asset 15 205
Employee benefits 823 -
Intangible assets 924 71
8,902 7,592
Current assets
Assets held for sale 1,082 1,082
Inventories 162 210
Trade and other receivables 2,436 2,276
Cash and cash equivalents 5,963 6,439
9,643 10,007
Current liabilities
Deferred income (2,528) (2,347)
Income tax payable (154) (19)
Trade and other payables (1,333) (1,444)
(4,015) (3,810)

Net current assets 5,628 6,197

Total assets less current liabilities 14,530 13,789

Non-current liabilities
Deferred income (242) (22)
Employee benefits - (579)
Deferred tax liability (375) (106)
(617) (707)

Net assets 13,913 13,082

Equity
Issued capital 1,226 1,222
Share premium 119 87
Capital redemption reserve 88 88
Translation reserve (3) 2
Retained earnings 12,483 11,683

Total equity attributable to equity holders of the parent 13,913 13,082
Consolidated Cash Flow Statement
for the year ended 30 September 2007
2007 2006
£'000 £'000
Cash flows from operating activities
Profit for the period 478 837
Adjustments for:
Depreciation 292 370
Amortisation 88 34
Net loss/(profit) on disposal of property, plant and 9 (416)
equipment
Pension charge 140 117
Pension fund payments (190) (297)
Finance revenue (289) (280)
Income tax expense 222 29
Change in inventories 48 36
Change in receivables (287) (141)
Change in payables (199) 109
Change in deferred income 401 (167)

Cash received from operations 713 231
Interest received 285 272
Income taxes (paid)/received (19) 41

Net cash from operating activities 979 544

Cash flows from investing activities
Acquisition of business (919) -
Purchase of property,plant and equipment (115) (96)
Purchase of intangible assets (23) -
Proceeds from sale of property, plant and equipment 210 1,302

Net cash (used in)/generated from investing activities (847) 1,206

Cash flows from financing activities
Sale of own shares 36 -
Dividends paid (639) (580)

Net cash used in financing activities (603) (580)

Net (decrease)/increase in cash and cash equivalents (471) 1,170
Cash and cash equivalents at beginning of period 6,439 5,269
Effect of exchange rate fluctuations on cash held (5) -

Cash and cash equivalents at end of period 5,963 6,439
Notes

The financial information set out above does not constitute the Company's
statutory accounts for the years ended 30 September 2007 or 30 September 2006
but is derived from those accounts.

Statutory accounts for 2006 have been delivered to the Registrar of Companies,
and those for 2007 will be delivered following the Company's Annual General
Meeting. The auditors have reported on those accounts; their report was
unqualified and did not contain a statement under section 237 (2) or (3) of the
Companies Act 1985.
Earnings per share

Earnings per share is calculated by dividing the profit for the period
attributable to equity holders of the parent of £478,000 (2006: £837,000) by
24,460,800 (2006: 24,432,362), being the weighted average number of shares in
issue during the year. Basic and diluted earnings per share are both 1.95p
(2006: 3.42p).
Reconciliation of movement in equity and reserves
Issued Share Capital Translation Retained Total
capital premium redemption reserve earnings
reserve
£'000 £'000 £'000 £'000 £'000 £'000

At 1 October 2006 1,222 87 88 2 11,683 13,082

Arising on shares 4 32 - - - 36
issued during the year

Total recognised income - - - (5) 1,439 1,434
and expense

Dividends paid - - - - (639) (639)
At 30 September 2007 1,226 119 88 (3) 12,483 13,913

Acquisition

On 16 October 2006 the Group acquired the business and certain assets of Vecta
Software Corporation Limited for £900,000 cash and costs of £19,000. The
business is a provider of Sales Intelligence solutions. For the period to 30
September 2007, the business contributed £504,000 to Group turnover and made a
profit of £59,000. If the acquisition had taken place on 1 October 2006,
management estimates that the impact on Group results would not have been
significantly different.

The acquisition had the following effect on the Group's assets and liabilities
on acquisition date:
Values
recognised on
acquisition

£'000

Property, plant and equipment 20
Intangible assets 918
Trade and other receivables 69
Trade and other payables (88)

Net identifiable assets and 919
liabilities

Consideration paid, satisfied in cash 919

Pre-acquisition carrying amounts were determined based on applicable IFRS
immediately before the acquisition. The book values of assets and liabilities
recognised on acquisition are their estimated fair values. No fair value
adjustments to the pre-acquisition carrying amounts were required. Intangible
assets identified above relate to software intellectual property rights.

This preliminary announcement was approved by the Board of Directors on 13
December 2007.

This information is provided by RNS
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