Final Results

Focus Solutions Group PLC
05 June 2006



6th June 2006


                           Focus Solutions Group plc

                                  Final Results
                                        
                                       
Focus Solutions Group plc, a leading provider of customer management solutions
for the financial services industry, today announces its results for the year
ended 31 March 2006.

Key Highlights

   •Turnover up 21% to £6.58 million (FY2005: £5.43 million)

   •Operating profit before reorganisation costs £367,000 (FY2005:£2,000)

   •Operating profit £110,000 (FY2005: £2,000)

   •Profit before tax £128,000 (FY2005: £26,000)

   •Cash of £0.1 million (2005: £1.0 million); debt free

   •Basic and diluted earnings per share of 0.45 pence (2005: 0.1 pence)

   •Appointment of new Chief Executive, Richard Stevenson

   • Significant new contract wins during the year included:

    Life and pensions market

   • Barclays plc
   • HSBC Bank plc

    Mortgage market

   • Home of Choice
   • Capital Home Loans
   • Homeloan Management Limited

    General insurance market

   • Assurant Solutions


   • Global reseller agreement with BEA Systems Inc


Commenting on the results and prospects, Richard Stevenson, Chief Executive,
said:


"This has been a successful year for Focus, with strong growth in turnover and
continued improvement in profitability. Significant contracts were won with new
customers in the bancassurance market, and the UK mortgage market. The mortgage
market now accounts for 30% of turnover and the Group has also made good
progress in the general insurance and government sectors. Recent actions to
restructure the Group have reduced overheads and streamlined delivery. Focus is
now is in a better position to exploit the potential of its existing markets and
blue chip customer base. We also intend to develop our strategy to increase
annuity revenue and accelerate growth through a combination of joint ventures,
partnerships and potentially acquisitions in its target markets."


For further information please contact:


Focus Solutions Group

01926 468300

Richard Stevenson     Chief Executive
Martin Clements       Finance Director

Seymour Pierce Limited

0207 107 800

Mark Percy



Chairman's Statement

Business review

This has been a successful and important year for the Group. Having delivered
our first ever profit as a public company last year, Focus has delivered another
year of much improved results. Sales increased by 21% from £5.4 million in
FY2005 to £6.6 million in FY2006 and operating profits before reorganisation
costs increased to £367,000 from just £2,000 in FY2005. Operating profit before
interest and tax increased from £2,000 in FY2005 to £128,000 in FY2006.

These results represent further proof of the fundamental change in prospects for
the business over the past two years. The majority of the growth has been
generated from our core UK financial services market. Our strategy to grow
revenues outside of the UK financial services market has generated some initial
sales although progress has been slower than we would have liked.

Operations

Focus has built on the progress made last year and delivered another excellent
trading performance. The business won important new customers as well as
increasing revenues generated from the established customer base. Our success in
opening up new sectors within the financial services market has continued as
revenue from the mortgage and general insurance sectors fuelled growth. Revenues
from the mortgage sector in FY2006 totalled £2.0 million, representing 30% of
turnover. This is a hugely important proof point for the Group as it provides
evidence of our ability to transfer our success from one market to another.

The changes in regulations in the life and pensions market have meant some major
financial institutions are now changing their sales processes, and their
supporting technology, to sell products from a range of providers. Focus
e-trading solutions and extensive footprint in the life insurance market has put
it in a strong position to support the organisations who have chosen to become
distributors, or multi-tied, and this has resulted in some major strategic
projects.

During the year, the Group made significant progress on two multi-million pound
projects, with a leading life and pensions provider and with Barclays Bank PLC.
Near the close of the year, we won our first order from HSBC Bank plc. This
project, initially worth £250k, involves the provision of consultancy services
to HSBC to assist in the scoping and establishment of requirements for a major
new project being undertaken by the bank.

Changes in regulations affecting the sales of mortgages have also been driving
demand from organisations across the mortgage sector and the customer base now
includes mortgage providers, distributors and portals.

New customers signed during the year include Home of Choice, Capital Home Loans
and Homeloan Management and revenues have been generated as a result the
strategic partnership signed with Trigold, one of the major industry portals.

During the year, the Group also won its first contract in the general insurance
sector with Assurant Solutions.

The development of the business outside UK financial services has been a central
plank of our strategy for some time. The highlights in this regard for the year
included further development of the relationship with BEA Systems Inc with the
signing of a global reseller agreement in November 2005, the signature of our
first distribution agreement with Geoff Smith Associates (GSA), a major supplier
of document management systems to the UK police market, and the development of
relationships with a number of potential partners and systems integrators.

During the year, it has become clear that government targets for e-government
are driving the public sector to look at how, and where, it captures the data
for any services it makes available electronically. The characteristics and
capabilities of our XML toolkit, goal technology, could provide highly effective
solutions to these problems so we have focused attention on building
relationships with established suppliers to the public sector and the initial
results have been encouraging.

Management and staff

The past year has seen a major change in the management structure of the Group,
with the aim of taking the business forward to the next stage in its
development. In March 2006, Richard Stevenson replaced John Streets as Group
Chief Executive. Richard joined Focus after a successful career in the software
sector, with particular exposure to the retail banking, insurance and public
sectors. Richard has a record of creating significant revenue growth and brings
with him a strong business development ethos. I am confident that Richard will
bring particular benefit to the business in the further development and
execution of Group strategy.

John, the Group's founder, remains with Focus as a Non-Executive Director. I
thank him for his vision and his exceptional efforts over the past ten years to
turn his vision into a successful business. In April 2006 we announced that Mark
Thelwell was leaving the Group after nearly 8 years service. We wish Mark well
in his future endeavours.

The enthusiasm and resilience of our staff over a number of difficult years has
started to pay off with major new customer wins, top line growth and an improved
product offering. I thank everyone for their continued loyalty and hard work.

Funding

Over the past three years, the business has largely, with the exception of a
small secondary placing, been funded out of trading. We have won several large
value, long term contracts and this has underpinned the improvement in the
financial performance of the business and transformed our prospects. However, it
has also had an impact on our working capital requirements as we have had to
agree deferred payment terms with some major customers. As a result, while the
profitability of the business has continued to improve, it has remained cash
absorbing in the short term. We expect this profile to start to change during
the forthcoming year.

The Board will continue to review the business's funding requirements and will
ensure that it has the appropriate funding structure to be able to achieve its
strategic objectives.

Outlook

Current trading remains in line with expectations, underpinned by the changes we
have made to reduce overheads and streamline the business. Our sales efforts are
focussed on well defined opportunities within the wider UK financial services
market, where regulation change continues to drive demand, and in the UK
government sector via our partnerships with a limited number of major systems
integrators. In addition, our established customer base continues to provide
significant opportunities.

The Group's management team have a clear strategy for both organic and
non-organic growth and the prospects remain good for the business. Following two
successive years of profitable trading, the Board is now seeking to accelerate
the growth in its business by a combination of partnerships, joint ventures and,
potentially, acquisitions.

Alastair M Taylor
Chairman


Chief Executive's Statement

Overview

I joined the Group towards the end of FY2006 and have been pleased with the
outcome of my initial review of the business, in particular with the Group's
reputation with its key customers and the quality, expertise and commitment of
its employees. However, there is much more to be done to bring direction and
momentum to all parts of the Group's business and to build upon the progress
made in FY2006.

Financial performance

In my first Chief Executive's statement, it gives me great pleasure to be able
to report, that the Group achieved record sales and profits in FY2006. At the
trading level, operating profits before re-organisation costs increased from
£2,000 to £367,000. Turnover increased by 21% from £5.4 million in FY2005 to
£6.6 million in FY2006, driven principally by the strong sales performance in
the UK financial services market. Gross profit increased by a more modest 11%
from £4.1 million to £4.5 million, reflecting a change in sales mix, with a
further move towards professional services. This resulted in a reduction in
gross margins, from 75% towards 69%. During the first half of FY2006 we suffered
from a shortage of sufficiently qualified full time staff. As a result, for
several months, we employed a number of contractors at a higher cost to the
business than permanent staff. Over the course of the year, almost all
contractors were replaced.

Despite making great progress in a number of areas, revenues outside the
financial services market in FY2006 were disappointing. We have therefore
reduced costs in line with our revised expectations. Direct management costs
have been reduced and both sales management and service delivery are now managed
from a Group level.

As at 31st March 2006, cash deposits totalled £0.1 million (FY2005: £1.0
million), reflecting the timing of payments on a number of major projects. The
Group also has bank facilities totalling £350,000 should we require them. The
balance sheet remains debt free.

Basic and diluted earnings per share for the year ended 31st March 2006 were
0.45 pence per share, compared with 0.1 pence for the year ended 31st March 2005

The Board's primary objective is to provide the resources necessary for the
business to grow and create a business of sustained profitability. In the long
term this represents the best opportunity for return on investment. Accordingly,
we currently have no plans to pay a dividend in the near future.

During the year the Group undertook a project reviewing the possibility of
outsourcing some of our service delivery capability to an Indian outsourcing
company. Unfortunately, despite the best efforts of both parties, it became
apparent that such a delivery mechanism was inappropriate for our Rapid
Application Development approach and as a consequence we terminated the project
in March 2006. However, having undertaken the review, we have re-structured our
service delivery organisation which has led to us adopting a more efficient and
cost effective approach.

Developing our financial services business

The majority of our revenue during the year has again been generated by
delivering online and offline Point of Sale solutions and mortgage extranets to
UK financial service companies to help them comply with regulatory requirements,
improve their efficiency and reduce the cost of the sales process. From our
initial stronghold in the life and pensions sector, we have successfully
broadened our market coverage to the mortgages sector where new regulation is
bedding in.

Our solutions support the customer facing, front office elements of the sales
process. To enhance our propositions we have begun to partner with other best of
breed suppliers, particularly those who focus on the back-office elements of the
process within the life, pensions and mortgage markets. Over the past year there
has been considerable consolidation in our market and we believe that this
approach allows us to provide a compelling alternative to the offerings that our
competitors are aiming to bring to the market.

The life and pensions market

In recent years, changes in legislation in the life and pensions market directly
led to high investment in technology to support the new distribution models that
have begun to evolve. As a result the level of new business activity in FY2006
was at an all time high. We built on an exceptionally strong customer base,
adding new business from blue-chip companies such as Co-Operative Financial
Services and HSBC while strengthening our relationships with new projects at
existing customers such as Barclays and Scottish Equitable.

The growth of business with major financial institutions Barclays, HSBC and
Co-Operative Financial Services is particularly significant for the Group. All
three are new customers to the Group over the past two years. Since the start of
depolarisation in December 2004, the leading UK retail banks have taken an
increasing share of the life and pensions market.

The contract with Barclays relates to the development of an electronic Point of
Sale solution to support the sale of regulated life and pensions products for
Barclays corporate and personal customers. This solution has been integrated
with the leading industry portal, Assureweb, linking the quotation and new
business processes. The HSBC contract relates to the provision of consulting
services which will be carried out in the main during FY2007. The Co-Operative
Financial Services contract relates to the licencing of goal:technology,
although we are hopeful this will lead to further value-add services in the
future.

The mortgage market

The mortgage market continued to prove a good source of new clients as lenders
responded to the changes in regulation introduced in November 2004 with "M-Day".
Mortgages plc continued to invest in its Extranet while Capital Home Loans and
Homeloan Management started developing new e-commerce facilities with Focus. The
strategic partnership with Trigold delivered its first new clients for Focus
including The Woolwich, West Bromwich Building Society and Future Mortgages. A
strong pipeline is now in place with Trigold to bring further new names on
board.

The general insurance market

In January 2005, the Financial Services Authority's regulatory powers were
extended to cover general insurance. This extension of the regulatory
environment has opened up new opportunities for Focus. During the year, we
delivered our first Point of Sale system to the general insurance market, with
Assurant Solutions our first customer in the general insurance sector. This POS
solution delivers a single electronic application that will help intermediaries
sell a compliant suite of protection products in the most efficient manner.

Building an entry strategy for the government market

In the last year, we have entered the government market with our goal:technology
product set. Our expertise in financial services has been well received by both
direct government customers, and by suppliers of e-government solutions. We have
identified these e-government solutions suppliers as our preferred channel to
the government market place to enable us to distribute our products widely,
whilst mitigating the risk of entry into this complex market.

Driven by legislative requirements for lower cost of development and ownership,
together with increasingly onerous e-government targets, goal:technology
solutions have wide appeal in central government, local government and in some
specialist functions such as police forces.

We have developed a set of offerings around the products, which give our
distribution partners a wide choice of technologies, platforms and channels for
the delivery of rich citizen-facing applications. These range from "stop and
search" applications using digital pen technology to advanced portal processing
for a major government department. All solutions are delivered using the goal:
technology architecture.

In our first few months of operation, we have achieved a small but significant
foothold in the UK government market. Our pipeline in these markets is growing,
as is our partner base. Our partners already include two major systems
integrators to the UK government. We have also acquired as a distribution
partner a highly regarded solution specialist in the police market, Geoff Smith
Associates.

Research and development

After the year end, our negotiations with Her Majesty's Revenue and Customs
regarding our claims for R&D tax credits for FY2003 and FY2004 were finally
concluded and a refund of £179k has been received.

Meanwhile, our expenditure on research and development remains significant in
relation to our size. It is essential for the future prosperity of the Group
that we continue this investment. Goal:technology is one of our clear
differentiators against our competition, both in our established markets and in
the new sectors we are moving into. Combining goal:technology with our business
process knowledge and delivery expertise puts us in a strong position to win new
business.

IFRS

As an AIM listed company, the Group is required to adopt International Financial
Reporting Standards (IFRS) for accounting periods starting after 1st January
2007. When the FY2008 results are reported, the FY2007 results will be restated
under IFRS. The first statements to be reported under IFRS will be the Interim
Results for the six months ending 30th September 2007.

We will work with our auditors to assess the impact of IFRS on our accounts. We
have not yet quantified the impact, but we expect the greatest change to be in
the area of research and development costs where some expenditure may have to be
capitalised in future if certain criteria are met.

Strategy

The Group's strong position in the UK financial services sector is currently
underpinning our growth and profitability. The structural changes in the market
as a result of competition and the regulatory environment are continuing and we
plan to increase our penetration of both the life and pensions and mortgage
market by exploiting our expertise in these sectors. Focusing on winning a small
number of high value contracts helps us develop close relationships with major
financial institutions and leads to considerable on-going business. One of our
key objectives in 2007 is to increase the proportion of our turnover that is
represented by annually recurring revenues. These currently represent only a
very small proportion of total revenues.

Our established strategy, to exploit opportunities outside of the UK financial
services market by making inroads into the Government market, is gaining
traction as we build on the partner relationships we have established this year
and continue to grow the specialist knowledge and resources we need to make
progress in this market.

We recognise that in today's market, Focus must grow faster to build a
sustainable business. One of our goals for FY2007 is to evaluate complementary
partnerships, joint ventures and potential acquisitions which will strengthen
our product and market coverage in the point of sale solutions market, with
particular emphasis on the mortgage market.

We aim to deliver much more than just technology. Our objective is to fully
understand our customers' business processes and to deliver significant added
value to our customers by developing solutions that dramatically reduce their
costs and enhance their ability to adapt to changes in their markets.

Richard Stevenson
Chief Executive

Consolidated Profit and Loss Report
31st March 2006 

                                                          Year ended  Year ended
                                                            31 March    31 March
                                                              2006        2005

                                                   Notes
                                                              £'000      £'000

Turnover                                               2      6,585      5,431

Cost of sales                                                (2,055)    (1,361)
                                                           ________   ________
Gross profit                                                  4,530      4,070

Overheads
Distribution costs                                           (1,424)    (1,221)
Administrative expenses (including
re-organisation costs of £257k, FY 2005: nil)                (2,996)    (2,847)
                                                           ________   ________

                                                             (4,420)    (4,068)
                                                           ________   ________

Operating profit                                                110          2
                                                           ________   ________
________________________________________________________________________________                           
Operating profit before                                         367          2
re-organisation costs

Re-organisation costs                                          (257)         -
                                                           ________   ________

Operating profit after                                          110          -
Re-organisation costs
                                                           ________   ________
________________________________________________________________________________

Profit on ordinary activities before interest                   110          2

Net interest receivable                                          18         24
                                                           ________   ________
Profit on ordinary activities before taxation                   128         26

Taxation                                                          -          -
                                                           ________   ________
Profit on ordinary activities after taxation being
retained profit for the year                                    128         26
                                                           =========    =======

Earnings per ordinary share
Basic                                                  3       0.45p       0.1p
Diluted                                                3       0.45p       0.1p

The operating profit for both years arises from the company's continuing
operations.


No separate statement of total recognised gains and losses has been presented as
all gains and losses have been dealt with in the profit and loss account.


Consolidated Balance Sheet
31st March 2006

                                                                   2006    2005
                                                                  £'000   £'000

Fixed assets

Tangible assets                                                     135     137
                                                                   _____   ____ 

Current assets

Debtors                                                           4,147   2,665

Cash at bank and in hand                                            123   1,007
                                                                  ______  ______
 
                                                                  4,270   3,672
                                                                  ______  ______
             
Creditors: Amounts falling due within one year                   (2,056) (1,598)
                                                                 _______ _______


Net current assets                                                2,214   2,074
                                                                 ______   ______


Total assets less current liabilities being net assets            2,349   2,211
                                                                  =====   =====  


Capital and reserves

Called up share capital                                           2,864   2,859

Share premium                                                     9,832   9,827

Merger reserve                                                      220     220

Profit and loss account                                         (10,567)(10,695)
                                                               ________ ________


Shareholders' funds - equity interests                            2,349   2,211

                                                                 ======   =====
Approved by the Board on 5 June 2006



R J Stevenson                 M J Clements

Director                     Director


Consolidated Cash Flow Statement for the year ended 31st March 2006

                                                           Year ended Year ended
                                                            31 March    31 March
                                                               2006        2005
                                                              £'000       £'000

Net cash outflow from operating activities                     (833)       (454)

Returns on investments and servicing of finance                  18          24

Taxation                                                          -           -

Capital expenditure and financial investment                    (79)        (63)

                                                            ________    ________
  
Cash outflow before management of liquid
resources and financing                                        (894)       (493)

Management of liquid resources                                    -         250

Financing                                                        10          16
                                                            ________    ________

Decrease in cash in the year                                   (884)       (227)
                                                            ========      ======

Reconciliation of net cashflow to movement in net funds

                                                           Year ended Year ended
                                                            31 March   31 March
                                                               2006       2005
                                                              £'000      £'000

Decrease in cash in the period                                 (884)      (227)

Cash outflow from decrease in liquid resources                    -       (250)
                                                            ________     _______


Movement in net funds in the year                              (884)      (477)


Net funds at start of year                                    1,007      1,484
                                                             ________   ________

Net funds at end of year                                        123      1,007
                                                              ======     ======


Notes to the Accounts

1. The financial information set out above does not constitute statutory
accounts for the years ended 31 March 2006 and 2005, but is derived from those
accounts. Statutory accounts for the year ended 31 March 2005 have been
delivered to the Registrar of Companies and those for the year ended 31 March
2006 will be delivered following the Company's annual general meeting. The
auditors have reported on those accounts; their reports were unqualified and did
not contain statements under s237(2) or (3) Companies Act 1985.

In order to be consistent with standard industry practice, the format of the
Consolidated Profit and Loss account has been changed. The prior year numbers
have been restated in accordance with the revised format.

2.      Turnover

The geographical analysis of turnover by destination is:

                                                    2006                  2005
                                                    £000                  £000

United Kingdom                                     6,560                 5,381
North America                                         25                    50
                                                    ____                 _____
                                                   6,585                 5,431
                                                   _____                 _____ 


3.      Earnings/(loss) per share


The basic earnings per share is based on attributable profit for the year of
£128,000 (FY2005: £26,000) and on 28,629,000 ordinary shares (FY2005:
28,588,000) being the weighted average number of ordinary shares in issue during
the year.


The diluted earnings per share is based on attributable profit for the year of
£128,000 (FY2005: £26,000) and on 28,852,000 shares (FY2005: 29,150,000)
calculated as follows:



                                                        Year             Year

                                                       ended            ended

                                                    31 March         31 March

                                                        2006             2005

                                                       000's            000's



Basic weighted average number of ordinary shares      28,629           28,588


Dilutive potential ordinary shares:


Share Options                                            223              562
                                                     _______          ________


                                                      28,852           29,150

                                                    ========           =======

4.      Report and Accounts


Copies of the Report and Accounts will be circulated to shareholders shortly and
may be obtained after the posting date from the Company Secretary, Focus
Solutions Group Plc, Cranford House, Kenilworth Road, Leamington Spa, CV32 6RQ.


5.      AGM

The AGM will be held at 4.30 pm on 2 August 2006 at the registered office of the
Company (Cranford House, Kenilworth Road, Leamington Spa, CV32 6RQ).




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