Final Results

Clarity Commerce Solutions PLC
03 September 2007

Clarity Commerce Solutions plc



Board Statement



Clarity Commerce Solutions plc (AIM:CCS), a leading supplier of management
software solutions for the entertainment, ticketing, hospitality, retail and
leisure sectors, announces its preliminary results for the year ended 31 March
2007.



•          Turnover increased 10% to £20.8m (2006: £18.9m)

•          Recurring revenue increased by 10% to £9.1m (2006: £8.3m)

•          Gross margin increased slightly at 62% (2006: 61%)

•          Pre-tax loss of £458,000 (2006: profit £953,000)

•          Basic loss per share of 3.96p (2006: earnings per share 5.81p)

•          Acquisition of MATRA Systems (Holdings) Ltd in April 2006, expanding
           the Group's offering





Enquiries:


Clarity Commerce Solutions
    Ken Smith, Chief Financial Officer,                            01932 778000

Grant Thornton (Nominated Adviser)
    Fiona Kindness, Director                                       020 7728 3414

SVS Securities plc (Broker)
    Jon Cable                                                      020 7638 5600






A FORMATTED VERSION OF THIS ANNOUNCEMENT WILL BE AVAILABLE SHORTLY ON THE
COMPANY'S WEBSITE: WWW.CLARITYCOMMERCE.COM


Overview



Clarity has a wide product portfolio covering a range of market sectors and
geographies.  The acquisition of MATRA (described below) in April 2006 created a
stronger business that has brought considerable advantages to the combined
Group.  Clarity software is installed in many vertical markets, and consumers
experience our products every day, whether they are buying tickets, visiting a
health club or golf course, in a restaurant or bar, booking into a hotel or
making a purchase from a retailer.



However, Clarity has nevertheless suffered a difficult year as a result of
contract slippage and cost over-runs in a number of subsidiaries, resulting in
poorer performance across the second half of the year, despite a profitable
first half.  Shareholders will be aware that, shortly after the year-end, a
number of shareholders requisitioned an EGM in order to effect certain key
changes which they felt would improve the Group's performance.  Although each of
the resolutions voted on at the EGM held on 31 May 2007 was defeated, the
publicity which the process generated served to dent customer confidence, with
the result that several prospective contracts were lost or delayed in the
process, and internal morale was also damaged.  Furthermore, the process proved
expensive in terms of advisor and other costs, as well as diverting management
focus from the day to day operations of the business for several months, and all
of these factors will continue to have a material effect on results in 2007/8.



The Board does, however, recognise the validity of certain issues raised during
the EGM process, and has actively been making moves to address these concerns.



As a direct result of this process, a number of changes were made to strengthen
the Clarity Board, with the appointment of a new Chairman, new Deputy Chairman
and a Chief Financial Officer, each of whom has strong experience of improving
under-performing businesses, thus increasing the Board to four members,
inclusive of two non-Executives.  Brief biographies of each appointee are shown
below.



John O'Hara, Chairman, brings with him a wealth of relevant experience. John led
the negotiations for Total Hospitality Solutions Limited and Total Hospitality
Solutions (UK) Limited, which were acquired by Clarity on 22 May 2007. He has
had over 20 years experience across the technology sector in the UK, New Zealand
and the US. During that time he has founded, grown and successfully exited three
technology companies; one was sold privately, one listed in the US on NASDAQ and
one was publicly listed in New Zealand. In 2005 John released a book titled
Commercialising Innovation and he holds an honorary Master of Business
Innovation and Entrepreneurship degree.



Sir Colin Chandler, Deputy Chairman, has many years of valuable experience in
the public company arena.  He joined easyJet plc in April 2002 and was appointed
Chairman in 2002.  Until November 2004, he was Non-Executive Deputy Chairman of
Smiths Group plc, having been a Non-Executive Director of TI Group since 1992.
Sir Colin has been variously Managing Director, Chief Executive and then
Chairman of Vickers plc.  Earlier in his career, Sir Colin was seconded from
British Aerospace to the role of Head of Defence Export Services, Ministry of
Defence.  He was Chairman of Racal Electronics plc.  He is Chairman of TI
Automotive Limited, Chairman of Automotive Technik Limited, and is
Pro-Chancellor of Cranfield University.  He was Knighted in June 1988 for
services to export.



Ken Smith, CFO, is a member of the Institute of Chartered Accountants of
Scotland. Qualifying with Deloittes in Glasgow he spent four years with the
firm's Nairobi practice as Senior Manager. Following his return to the UK in
1986, as Group Finance Director of Alphameric plc, he was instrumental in that
company's turnaround and return to profitable growth. Since leaving Alphameric
in 1996, he has been part-time financial director, or consultant, to a variety
of companies in the IT sector, with particular emphasis on fundraising and
turnarounds. He was closely involved in the acquisition of Cyntergy Services
Limited, which Clarity acquired in 2003.



Clarity intends to further strengthen the Board over the forthcoming months in
order to reflect its wider portfolio and increased size since the MATRA
acquisition.



Since its formation on 26 June 2007, the newly-constituted Board has been
reviewing the Group's structure, people and processes, as well as its product
and marketing strategies.  Although this strategic review is not formally
complete at this time, it is the Board's intention to ensure the Company is on
track for growth in the second half of the 2007/8 financial year.



The Board has also begun to review strategy and focus on reducing costs and
improving the accountability of individual business units within the Group. The
Group is in the process of implementing the selection of suitable business unit
managers who are strongly motivated and incentivised to achieve profit and cash
generation in their respective market sectors.



Financial Highlights



After several years of improving financial performance the past financial year
saw a dip in Clarity's fortunes, with a loss before tax of £458,000 (2006 profit
- £953,000).  The loss resulted from delays in the completion of new product
development, a slippage of several anticipated contracts and increased costs in
a number of divisions.



Revenues increased from £18.9m to £20.8m, and gross margin improved slightly to
62% (2006 61%).  Gross margins were adversely impacted as a direct result of low
margin hardware supplied in terms of roll-out business to a key client; the
adjusted gross margin for the Group, excluding this supply, would have been
63.5%.



Operating costs increased from £10.4m to £13.0m which gave rise to an Operating
Loss of £148,000 (2006 Operating Profit - £1.1m).  This increase was almost
exclusively due to the inclusion of MATRA within the Group from May 2006
onwards. MATRA added £3.55m to Operating Costs and the Group therefore, on a
like for like basis, reduced costs by £950,000 across its continuing operations.



However, primarily as a result of trading underperformance and revenue slippage,
this meant there was no commensurate increase in turnover in tandem with the
increased cost base, and hence the Group recorded a Loss before Tax of £458,000.



MATRA acquisition



MATRA, a global software and solutions provider was acquired on 29 April 2006
for an initial consideration of £2.5m, and a further £500,000 which has been
satisfied by the issue of Clarity shares.  In addition, a further £500,000 of
Clarity shares were issued during the year in relation to the  three year earn
out arrangement.



MATRA brings to the Group an up to date product range that spans many aspects of
the retail sector.



MATRA's FREEDOM products, which include point of sale (POS) and related
software, have been successfully deployed in Europe, North America, Asia and
South Africa.  The acquisition therefore strengthens Clarity's international
presence, and will help build Clarity's critical mass as a solutions provider in
the POS market.



MATRA clients operate in the grocery, department store, general merchandising
and entertainment chains.  Customers include Coop Denmark, Six Flags,
Somerfield, Compagnie des Alpe, MoviePark, The John Lewis Partnership, The HMV
and Waterstones Group, Focus and Woolworths in South Africa.  Their software is
a true 'multi-channel' offering, allowing transactions to take place through a
variety of devices and technologies.



The combination of Clarity and MATRA strengthens the Group's senior management
and has added considerable technical expertise.



Total Hospitality Solutions acquisition



Shortly after the year end, Clarity acquired Total Hospitality Solutions (THS)
for an initial consideration of £2.2m, satisfied by the issue of Clarity shares.
  In addition there is a two year earn out, and the total consideration will not
exceed £4m.



THS comprises an established New Zealand business, and relatively new UK
business, both operating in the provision of property management systems to the
hospitality, hotel and events management industry.



The Board recognises obvious synergies between THS and its existing leisure and
hospitality businesses.  This has already been evidenced by a combined sale of
the Group's Baron product offering with the THS product offering.  It is the
intention to fully investigate and exploit the opportunities that this
represents.



Products and Services



Clarity's new .Net ticketing software has recently been accepted in live trading
environments in the US, and interest from other outlets in the US is developing
rapidly.  The Group believes that its product is ideal for this market, and is
currently building its sales strategy whilst in close discussion with a number
of prospects.



The integration of golf, spa, hotels and our food and beverage software into a
single division will not only offer cross market sales, but a more integrated
product range.  This is evidenced by the recent combined Baron/THS sale referred
to above.  Although the hospitality market has recently been quiet, we are now
seeing evidence of interest in replacement solutions.



In the leisure sector, our customer base awaits our new leisure solution based
on the Microsoft .Net platform.  Elements of this software are now working in a
live trading environment with a private sector customer, and we have received
initial orders from public sector clients.



In the retail arena, the integration of Clarity Central with MATRA's software is
progressing according to plan with the imminent implementation of the first
release with an existing customer.  Feedback from our customer base is positive
and is helping to prioritise our road map for the further integration work
planned.



Dividend Policy



In view of the loss incurred during the year, no dividend is proposed.  Once
financial performance has improved it remains the Board's intention to pursue a
progressive dividend policy.  This is unlikely to occur in the 2007/8 financial
year, but remains under constant review.



Outlook



Clarity has experienced a difficult year.  The EGM was inevitably a distraction
to the business, diverting management focus from operations for a number of
months.  It also had the effect of adding costs, and having an adverse impact on
revenues and trading during the first half of the current year, mainly due to
heightened uncertainty during and immediately after the process.



Having due acknowledgement for the concerns raised by the requisitionists, and
by implementing our own strategy, confidence is slowly returning and the Board
anticipates that the cost-reduction programme commenced in July 2007, together
with the revised strategy being introduced, will result in an enhanced Group
performance in the medium term.



Despite concerns as a result of the adverse publicity surrounding the EGM,
discussions are currently under way with a number of key prospects.  The Board
expects to announce some successes in the near future.



With the appointment of Grant Thornton as Nominated Advisor and SVS Securities
as stockbroker, and the empowerment of some highly talented individuals within
the Group, the Directors believe that a strong core team is in place, with the
requisite skills and experience to achieve a significant improvement in the
Group's financial performance and subsequent results.



The Board would particularly like to take the opportunity to thank Clarity's
staff for their patience and commitment during a difficult period.


Clarity Commerce Solutions plc.



Consolidated Profit and Loss Account FOr the Year Ended 31 March 2007


                                                                         Year ended           Year ended
                                                                      31 March 2007        31 March 2006
                                                                             £' 000               £' 000
Turnover
- continuing operations                                                      16,401               18,884
- acquisitions                                                                4,402                    -
                                                                             20,803               18,884
Cost of sales                                                               (7,919)              (7,361)
Gross Profit                                                                 12,884               11,523

Operating costs                                                            (13,032)             (10,414)
Operating (loss)/profit                                                       (148)                1,109

Operating (loss)/profit analysed between:
- continuing operations                                                       (581)                1,109
- acquisitions                                                                  433                    -
                                                                              (148)                1,109

Operating (loss)/profit from continuing operations before                     (581)                1,358
impairment of goodwill
Continuing operations - impairment of goodwill                                    -                (249)
Operating profit from acquired operations                                       433                    -
Operating (loss)/profit after impairment of goodwill                          (148)                1,109

Interest receivable                                                             560                  506
Interest payable                                                              (870)                (662)
                                                                              (310)                (156)

(Loss)/Profit on ordinary activities before taxation                          (458)                  953

Taxation on profit on ordinary activities                                     (332)                  (3)
Retained (loss)/profit for the year                                           (790)                  950


(Loss)/Profit on ordinary activities before impairment of                     (458)                1,202
goodwill and taxation
Impairment of goodwill                                                            -                (249)
(Loss)/Profit on ordinary activities before taxation                          (458)                  953

(Loss)/Profit per ordinary share

- basic                                                                     (3.96)p                5.81p
- diluted                                                                   (3.96)p                5.80p

Dividends per share                                                               -                    -








Clarity Commerce Solutions plc.

Consolidated Balance Sheet as at 31 March 2007


                                                                              As at               As at
                                                                      31 March 2007       31 March 2006
                                                                              £'000               £'000
Fixed assets
Intangible assets                                                            16,496              11,352
Tangible assets                                                                 583                 563
                                                                             17,079              11,915
Current Assets
Stocks                                                                711                 600
Debtors                                                             5,731               6,778
Cash at bank and in hand                                              351                 852
                                                                    6,793               8,230

Creditors: amounts falling due within one year                    (7,399)             (8,100)

Net current (liabilities)/assets                                              (606)                 130
Total assets less current liabilities                                        16,473              12,045

Creditors: amounts falling due after
more than one year                                                          (4,177)             (1,691)
Provisions for liabilities and charges                                         (41)                (34)
                                                                             12,255              10,320
Capital and reserves
Called up share capital                                                       5,271               4,084
Share premium account                                                         7,742               5,974
Profit and loss account                                                       (758)                 262
Equity shareholders' funds                                                   12,255              10,320





Clarity Commerce Solutions plc.

CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2007


                                                                         Year ended           Year ended
                                                                      31 March 2007        31 March 2006
                                                                             £' 000               £' 000
Net cash inflow from operating activities                                       134                  884

Returns on investments and servicing of finance
Interest received                                                               528                  506
Interest paid                                                                 (772)                (595)
Interest element of hire purchase and finance leases                            (4)                  (2)
Net cash outflow from returns on investments and servicing of
finance                                                                       (248)                 (91)

Taxation                                                                       (51)                 (10)

Capital expenditure and financial investment
Purchase of tangible fixed assets                                             (138)                (200)
Sale of tangible fixed assets                                                     8                    -
Net cash outflow from capital expenditure and financial
investment                                                                    (130)                (200)

Acquisitions
Purchase of subsidiary undertakings                                         (3,151)                (110)
Cash at bank acquired with subsidiaries                                         374                    -
Net cash outflow from acquisitions                                          (2,777)                (110)
Net cash (outflow)/inflow before management of liquid
resources and financing                                                     (3,072)                  473

Management of liquid resources
Movement in blocked cash collateral account                                     582                   75

Financing
Issue of share capital (net of costs)                                         1,817                    -
New secured loan                                                              2,425                    -
Repayment of loan notes                                                       (699)                (646)
Capital element of finance leases                                               (7)                  (5)
Bank loan repayments                                                        (1,339)                (304)
Net cash inflow/(outflow) from financing                                      2,197                (955)
Decrease in cash                                                              (293)                (407)




Notes to the Financial Statements:



1.       These preliminary results have been prepared in accordance with UK
         GAAP.

2.       UK Corporation Tax has been provided on the results for the year at 30%
         and overseas tax at applicable rates.

3.       The Directors do not recommend the payment of a dividend.

4.       Earnings per ordinary share:


         Basic loss per share for the year ended 31 March 2007 is calculated by 
         dviding the loss for the year of £790,000 (2006: profit £950,000) by 
         19,955,595 (2006: 16,338,086) being the weighted average number of 
         shares in issue during the year.


         The weighted average number of ordinary shares in issue has been 
         adjusted to assume conversion of those shares to be issued as well as      
         all dilutive potential ordinary shares. Diluted earnings per share is 
         calculated by dividing the loss for the year of £790,000 (2006: profit 
         £950,000) by the weighted diluted average number of shares being      
         19,955,595 (2006: 16,381,088).


5.       The Annual General Meeting will be held on 29 November 2007.


6.       The Annual Report and Accounts will be posted to shareholders shortly.
         Further copies will be available on request from the Company's Registered
         Office: Clarity Commerce Solutions plc, Hooper House, Hatch Warren Farm, 
         Hatch Warren Lane, Hatch Warren, Basingstoke RG22 4RA.


7.       The financial information set out above does not comprise the Company's
         full statutory accounts within the meaning of Section 240 of the 
         Companies Act 1985.




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