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Sage Group PLC (SGE)

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Wednesday 28 November, 2007

Sage Group PLC

Final Results


28 November 2007

SAGE PRE-TAX PROFIT^ INCREASED 14% TO £251.3M FOR YEAR ENDED 30 SEPTEMBER 2007

The Sage Group plc ("Sage"), a leading supplier of business management software
solutions for

small-and-medium sized enterprises ("SMEs"), announces its unaudited results
for the year ended 30 September 2007.

Financial highlights

  * Revenues increased by 30%* to £1,157.6m (2006: £892.4m*)
   
  * EBITA† increased by 20%* to £283.2m (2006: £235.9m*)
   
  * Adjusted pre-tax profit^ rose by 14% to £251.3m (2006: £221.3m)
   
  * Adjusted earnings per share^ increased by 13% to 13.34p (2006: 11.83p)
   
  * Operating cash flow of £317.1m (2006: £267.1m) representing 112% of EBITA
    (2006: 107%)
   
  * Dividend rebased resulting in a 95% increase in the proposed total dividend
    to 7.00p (2006: 3.59p)
   
Operational and strategic highlights

  * Total licence revenue growth of 12%*, total growth in services revenue of
    39%*
   
  * Organic revenue growth of 7%* for the year, resulting from strong growth in
    three of our four geographic regions
   
  * Total revenue for North America increased 54%*, EBITA† increased by 28%*,
    organic revenue growth 4%*
   
  * Customer base expanded to 5.5m businesses (2006: 5.2m)
   
  * Five principal acquisitions completed in the year for a total consideration
    of £73.1m
   
^Pre-tax profit and earnings per share figures stated prior to amortisation of
intangible fixed assets, prior year gain on disposal of £2.7m and
neutralisation of foreign exchange movements. A table reconciling adjusted
pre-tax profit to statutory profit before taxation is shown in Note 3 on page
14.

*Foreign currency results for the year ended 30 September 2006 have been
retranslated based on the average exchange rates for the year ended 30
September 2007 of $1.98/£1 and €1.48/£1 to facilitate the comparison of
results.

†Earnings before interest, tax, amortisation of intangible fixed assets (EBITA)
and prior year gain on disposal in North America of £2.7m.

Regional analysis*

£m                          2007           2006           2007          2006
                         Revenues       Revenues                            
                                                         EBITA         EBITA
                                                                            
UK                          217.7          204.4          81.3          75.6
                                                                            
Mainland Europe             343.9          295.9          80.0          65.7
                                                                            
North America               508.1          329.1         100.0          78.0
                                                                            
Rest of World                76.1           63.0          19.9          16.6
                                                                            
                          1,145.8          892.4         281.2         235.9
                                                                            
Acquisitions:                                                               
                                                                            
UK                            6.4              -           1.3             -
                                                                            
Mainland Europe               5.2              -           0.6             -
                                                                            
Rest of World                 0.2              -           0.1             -
                                                                            
                             11.8              -           2.0             -
                                                                            
Gain on disposal                -              -             -           2.7
                                                                            
Foreign exchange                -           43.2             -          10.7
impact*                                                                     
                                                                            
                          1,157.6          935.6         283.2         249.3

Chief Executive, Paul Walker, commented:

"Sage has had a successful year, once again delivering double digit revenue and
profit growth and substantial cash generation. We have continued to see strong
organic revenue growth whilst expanding our product and services portfolio
through strategic acquisitions.

"We are confident that our consistently strong cash flows and recurring revenue
streams provide a solid foundation for future growth through both organic and
acquisition-led investment. In light of our on-going financial and commercial
strength and our commitment to creating shareholder value, we are rebasing our
dividend and are, as a result, significantly increasing our dividend for the
full year. It is our intention to follow a progressive dividend policy.

"We see many opportunities arising from the changing needs of our core SME
customer base which this year reached 5.5 million. Developments in technology,
a greater demand for customised solutions and the increasing use of value-added
products and services all provide a rich source of long term growth from which
we are well-placed to benefit.

"Going into 2008 we anticipate further good performances in the UK, Mainland
Europe and Rest of World. As we step up investment in our North American
business to accelerate our sustainable organic growth over the medium term, we
expect an impact on margins in 2008. However, in this financial year, we expect
to see the early benefits of the actions taken within this region with a modest
improvement in organic growth.

"The new year has started well, with all regions performing in line with our
expectations. Whilst we recognise the current uncertainties in the
macro-economic situation, the defensive characteristics of our business model
lead us to view 2008 with confidence."

A presentation for analysts will be held at 8.30am today at Deutsche Bank,
Winchester House, 1 Great Winchester Street, London EC2N 2DB. The presentation
will be webcast on www.sage.com. A live audio broadcast of the presentation and
subsequent Q&A will also be available for analysts on the dial-in conference
number +44 (0)1452 555 566, conference ID 24262695.

Enquiries:

The Sage Group plc +44 (0)191 294 3068 Tulchan Communications +44 (0)20 7353   
                                       4200                                    
                                                                               
Paul Walker, Chief Executive           Andrew Grant                            
                                                                               
Paul Harrison, Group Finance Director  Stephen Malthouse                       
                                                                               
Cynthia Alers, Investor Relations                                              
Director                                                                       


Overview

This year Sage significantly surpassed the milestone of £1 billion in revenues,
representing 30%* growth over 2006. This achievement results from a consistent
and focused business strategy, underpinned by continuing investment in our
products, services and underlying systems. Organic revenue growth for the Group
was strong at 7%*.

The UK, Mainland Europe and Rest of World regions all reported excellent
performances for the year. North America delivered good profitability and
substantially expanded its scale in the US through strategically important
acquisitions in 2006. Having expanded rapidly, we initiated a reorganisation of
our North American business into four operating divisions. This will enhance
customer focus, improve organic growth and deliver products and services that
will contribute to our continued success. As part of this process, the Board
concluded that a change in the executive management team was required in order
to achieve the full potential of the North American business, our largest
region. The search for a new CEO for North America is progressing well, and we
anticipate making an appointment in the first half of 2008.

Product and service strategy

Customer demand for combined software and service contracts continues to grow.
This type of offering now makes up 59% of our services revenues and contributed
to our strong 9%* organic growth in services revenue. Customers have shown that
they are willing to pay for excellent, value-added service that helps them to
run their businesses more efficiently. This continuous service model is very
familiar to Sage, and presages potential future changes to our market.
Broadband and internet usage are increasingly evident across our SME customer
base and present exciting opportunities for the deployment of new products and
services.

We have introduced several products which are web-enabled or available as a
hosted "on-demand" service, including Sage 50 Accounts Professional Online in
the UK and SageCRM.com and Accpac ERP in North America. There are very early
signs that customers are increasingly receptive to utilising the efficiencies
that web-based technologies offer in delivering business applications. In
addition, we plan to introduce additional web-enabled and hosted products and
services across the Group in the near future, although we anticipate that
adoption of these will be gradual, and that for the foreseeable future a
combination of desktop applications, web-enabled and hosted systems will be
used by SME customers.

Acquisition strategy

Acquisitions remain an important part of our growth strategy, and we continue
to pursue a number of acquisition opportunities which could expand our product
and service offering to SMEs in both new and existing territories. During the
year, we completed five principal acquisitions, for an enterprise value of £
73.1m. A further acquisition, KCS Global Holdings Limited, was completed in
October 2007 for an enterprise value of £20.0m.

Three acquisitions were in the fast-growing field of HR and payroll services.
The acquisition of Creative with businesses in Singapore and Malaysia
consolidates our position as one of the leading suppliers of HR and payroll
solutions in South East Asia. Snowdrop and KCS build on our existing product
offering in this area in the UK, whilst the acquisition of Protx adds payment
processing capability to our UK solutions. Pro-Concept in Switzerland extends
our accounting solutions in Mainland Europe. XRT, with operations in France and
Spain, as well as South America, complements our existing capabilities in
treasury and cash management which we acquired in 2003 with Concept in Mainland
Europe.

A summary of the acquisitions made over the year is set out in the table below:

Date          Company          Industry specialism    Country         Enterprise
                                                                                
                                                                      value (£m)
                                                                                
November 2006 Protx Group Ltd  Payment processing     UK                  £20.7m
                               services                                         
                                                                                
April 2007    Pro-Concept SA   Accounting: Mid-market Switzerland          £5.8m
                                                                                
May 2007      Snowdrop Systems HR and payroll         UK                  £17.2m
              Ltd                                                               
                                                                                
July 2007     Creative         HR and payroll         Singapore,           £3.1m
              Software Pte Ltd                        Malaysia                  
                                                                                
September     XRT SA           Treasury and cash      France, Spain,      £26.3m
2007                           management             South America             
                                                                                
Total enterprise value                                                    £73.1m
                                                                                
Other smaller acquisitions                                                £11.0m
                                                                                
Payment of deferred consideration on prior year                           £13.2m
acquisitions                                                                    
                                                                                
Deferred consideration on current year acquisitions                      (£1.1m)
                                                                                
Net cash paid                                                             £96.2m

The three principal acquisitions completed in 2006, Verus, Emdeon and Adonix,
have contributed to strong revenue and profit growth, and will, from 2008,
begin to contribute to our organic growth. Adonix was integrated into a new
mid-market division in France. Verus, now renamed Sage Payment Solutions
Division, has completed the integration of its payment solutions into Peachtree
and Emdeon. Emdeon Practice Services, now renamed Sage Healthcare Division, has
strengthened its management team and is focused on improving its operational
efficiency and developing its market position. The search for a permanent CEO
of this division is well advanced, with the division currently under the
experienced management of an interim CEO.

Distribution strength

Our distribution strength remains one of our key competitive advantages, and
our business partners play an important role in promoting our products and
services. As customers demand increasing levels of tailored products and
specialised services, the role of our business partners will continue to
develop. Our business partners are a key component in our customer relationship
strategy.

Customer base

Over the year, we added 319,000 new businesses (21,000 resulting from
acquisitions made this year), increasing our customer base to 5.5m (2006:
5.2m). Customer focus is at the heart of our business model which aims to build
customer loyalty through the provision of outstanding service and relevant
product innovation. Customers rely on Sage to help them manage their businesses
more efficiently and to help their businesses continue to develop as they grow.
The loyalty of our customer base remains one of our strongest barriers to
competitive entry.

Regional review

UK

UK revenues grew by 10% overall to £224.1m (2006: £204.4m) with strong organic
growth of 7%. Sage 50, our core UK product, grew by 7%, through the application
of a strategy combining innovation, product quality and high quality service.
Our fully integrated product suite solutions, Sage 200 and Sage 1000, launched
this year, were very well received by both customers and business partners,
reporting strong growth since launch. New products and services in the areas of
HR and payroll, as well as increased functionality in accounting, Customer
Relationship Management ("CRM") and Enterprise Resource Planning ("ERP") also
contributed to our strong growth over the year.

The EBITA margin was maintained at 37% (2006: 37%).

The UK business made two acquisitions in the year, plus an additional
acquisition after the close of the financial year. Protx, the payment solutions
company, has performed strongly, growing revenues by 56% on a like-for-like
basis. Snowdrop, the mid-market HR and payroll services provider, brings a new
mid-market capability to our existing HR services. KCS was acquired in October
2007, after the close of the financial year. KCS further strengthens Sage's
mid-market payroll service, complementing and broadening Snowdrop's HR and
payroll offering. These two acquisitions conform to our strategy of expanding
our product and services offering to our SME customer base and mean that we now
have a powerful product portfolio in HR and payroll.

Mainland Europe

Total revenues in Mainland Europe grew by 18%* overall to £349.1m (2006: £
295.9m*) with strong organic growth of 10%*. France improved its performance in
the second half of the year as expected, reporting 9%* organic growth in H2,
and 6%* for the full year. A strong performance from Sage 100 contributed to
these results. Ciel!, our entry-level product, reported good volume growth and
expanded its premium services offering. Germany/Switzerland benefited from
country-specific fiscal changes which resulted in strong organic growth of 8%*,
particularly at the entry-level. Germany also began to show the benefits of the
strategic investments made in CRM and industry-specific solutions in HR and
public sector solutions. Spain recorded another year of strong organic growth
of 19%*, with excellent progress in developing the full spectrum of support
offering and strong migration strategies. Poland enjoyed another excellent year
with 21%* organic growth driven by uptake in the new service contract model.

The EBITA margin increased to 23% (2006: 22%*), helped by the strong
performance in Germany/Switzerland and continued growth in Spain.

Three principal acquisitions were made in this region over the year.
Pro-Concept, a mid-market accounting solutions provider based in Switzerland
expands our mid-market ERP business and complements our existing Simultan
business. The acquisition of XRT, a leading supplier of treasury management
software in France, Spain and South America, strengthened our solutions in
treasury and cash management.

North America

Total revenues in North America grew by 54%* to £508.1m (2006: £329.1m*),
benefiting from the contribution from acquisitions made in 2006. Organic
revenue growth was 4%* for the year.

The Small Business Division grew organically by 3%*. Simply, the market leader
in Canada, again recorded good growth, with double digit growth in bundled
annual software/service contracts. Peachtree Quantum continued to show strong
revenue growth, as customers migrated from the Peachtree line. Peachtree 2008
showed continued growth in support services, although licence sales of the new
upgrade, which has historically driven revenue, proved somewhat disappointing,
as customers chose to remain on older versions of Peachtree. ACT! revenue was
affected by a lack of large corporate contracts relative to the prior year.

The Mid-Market Division recorded organic growth of 4%*, reflecting improved 5%*
organic growth in the second half of the year which was driven by improved
performances in Timberline, Nonprofit, ACCPAC and in CRM. MAS 90 4.2's new
release was well-received by the market and by business partners.

The EBITA† margin decreased to 20% (2006: 24%*) due to the dilutive effect of
acquisitions made in 2006. Excluding acquisitions made in 2006, North America's
EBITA† margin was maintained at 23% (2006: 23%*).

Of the 2006 acquisitions, Verus, now Sage Payment Solutions Division, performed
in line with our expectations over the year reporting 14%* revenue growth on a
like-for-like basis and increased margins of 42%. Emdeon, now Sage Healthcare
Division, reported slower than anticipated revenue growth of 1%* on a
like-for-like basis, however, with an improved margin of 7%.  Over the past
year, there have been operational and management issues which will continue to
impact revenue growth in the short term.  These issues are being addressed, and
we remain confident that Sage Healthcare Division provides the Group with a
leading position in a highly attractive market with good growth potential over
the longer term.

At our interim results, we announced a reorganisation of the North American
business into four operating divisions: Business Management Division (all
accounting products and CRM), Industry Specific Solutions Division (verticals,
HR and payroll), Sage Healthcare Division and Sage Payment Solutions Division.
From 1 October 2007, we will begin reporting results along the business lines
of these four divisions. We anticipate that this reorganisation will improve
customer focus, commercial agility and product innovation.

Rest of World

Total revenues in Rest of World were £76.3m (2006: £63.0m*) with organic growth
of 17%*. South Africa had another impressive year, with excellent growth in new
licences, migration and support service contracts. Australia again reported
strong growth in licences and services. Australia and South Africa continue to
build a successful business on the principles of innovation, simplicity,
customer focus and agility to bring new ideas to life. This entrepreneurial and
customer-centric strategy helped South Africa win two major awards over the
year for customer service.

The EBITA margin was maintained at 26% (2006: 26%*).

In July 2007, we acquired Creative Software, a HR and payroll solutions
provider in both Malaysia and Singapore, complementing our acquisition in 2006
of UBS Corporation Berhad, the leading vendor of business management software
solutions for SMEs in Malaysia.

CRM

North America, our largest market for CRM, reported a mixed performance from
the three core products. SageCRM delivered strong growth, albeit off a small
base. This good performance was offset by the performance of ACT! where fewer
large corporate contracts were closed compared to the prior year. The new
release of SalesLogix was well received, although sales are building more
slowly than forecast.

In the UK, our second largest market for CRM, ACT!, SalesLogix and SageCRM all
reported very strong growth, as demand for customer relationship management is
firmly established, and our CRM products are increasingly integrated into the
Sage 50, Sage 200 and Sage 1000 product suites.

CRM had a good year in France and Germany, where mid-market demand for CRM is
growing rapidly, although the market is still immature relative to North
America. Investments were made in resources and marketing over the year to
position the business for further growth in CRM in the near future.

Financial review

In order to assess like-for-like performance, regional and Group growth trends
are shown on a currency neutral basis throughout this statement, unless
otherwise stated. An indication of the impact of foreign exchange movements is
shown in the table in Note 3 on page 14.

It is Sage's policy to hedge currency exposure to cash flows. This is largely
achieved by aligning the currency denominations of our debt with the cash flows
arising from our trading activities in those same currencies. We do not hedge
pure translational exposure resulting from conversion for accounting purposes
of overseas companies' results into Sterling.

Over the year, we saw significant movement in foreign currency exchange rates.
In particular, rates for the US Dollar to Sterling declined 10% from £1 = $1.80
to £1 = $1.98. The Euro also declined from £1 = €1.46 to £1 = €1.48. This has
had a significant translational impact on our financial results, although
underlying economic trends remain healthy.

Revenues

Revenues increased 30%* to £1,157.6m (2006: £892.4m*), reflecting strong
organic growth and a significant contribution from prior year acquisitions,
which contributed 24% of total revenues, or £283.4m. Organic revenue growth for
the year was 7%*, as reported in both the first and second halves of the year.
Organic revenue growth excludes the contributions of current year and prior
year acquisitions (together 26% of total revenues) and non-core products (2% of
total revenues).

Total software licence revenues were £343.7m (2006: £308.1m*), with organic
growth of 4%*. Total services revenues increased to £813.9m (2006: £584.3m*),
benefiting from strong organic growth of 9%* for the year. Over 59% of our
annual service contracts now include a software licence element, which is
recorded in service revenues. This trend is a response to customer demand for a
bundled service. From a financial reporting perspective, it is not practical to
separate these bundled offerings into software and services. Therefore, all
bundled revenue resulting from these contracts is recorded in service revenues.
Underlying growth in software licence revenue is therefore higher than the 4%*
organic growth reported.

Following the acquisition of Verus, services revenues now include three
categories of revenues, maintenance and support (67% of services revenue),
payment solutions (6% of services revenue) and other (network services in Sage
Healthcare Division, business forms, professional services and hardware
representing 27% of services revenue). Maintenance and support revenues grew by
10%* organically. Payment Solutions comprises Verus and Protx. The category of
other services grew by 6%* organically.

Profitability

EBITA† increased 20%* to £283.2m (2006: £235.9m*) and adjusted pre-tax profit^
rose 14% to £251.3m (2006: £221.3m). Adjusted earnings per share^ grew 13% to
13.34p (2006: 11.83p). The results for 2006 include a gain of £2.7m on the
disposal of a small North American business unit in January 2006.

The Group's EBITA† margin was reduced by 2% to 24% (2006: 26%*) due to the
initial dilutive effects from acquisitions, principally in Sage Healthcare
Division.

The Group's effective tax rate for the year was 31% (2006: 31%).

Cash flow

The Group remains highly cash generative with operating cash flow of £317.1m,
representing 112% of EBITA (2006: 107%). At 30 September 2007, net debt stood
at £509.7m (2006: £593.6m).

Dividend

The Board is strongly committed to enhancing shareholder value. Over the past
year, the Board reviewed Sage's capital requirements, including future
investment in our products and services, potential acquisition funding and
on-going commitment to creating shareholder value. Following that review, we
are pleased to announce a rebasing of our dividend. We believe that our
consistently strong cash flows and recurring revenue streams provide the basis
for a progressive dividend policy, whilst ensuring that the Board can continue
to maintain the appropriate levels of organic and acquisition-led investment.

As a result of the rebasing of the dividend, the proposed final dividend is
being raised to 5.73p per share (2006: 2.51p per share), giving a full year
dividend of 7.00p per share (2006: 3.59p per share), an increase of 95%.

The final dividend will be payable on 7 March 2008 to shareholders on the
register at close of business on 8 February 2008.

Corporate developments

People

We now employ over 13,900 people (2006: 13,000), and our employees are at the
heart of our customer experience. We take pride in the awards our employees
regularly win, including this year National Sales Trainer of the Year (UK),
National Payroll Consultant of the Year (Australia), Customer Relations Trophy
(Business to Business - France) and CRM Excellence Award (North America). These
awards won by our employees demonstrate the integrity and commitment of our
employees. We thank everyone for their excellent contribution to our success.

Community

Sage businesses continue to foster close relationships with many communities
through local initiatives and numerous donations have been made to local,
national and international charities and community foundations. Both our UK and
North American businesses offered their contact centres to support charity
telethons. Softline in South Africa has supplied 5,000 secondary schools
throughout South Africa with free educational accounting software and educator
training to improve the talent pool in IT for the long term.

In North America, our Healthcare team volunteered many hours to work in health
centres for disadvantaged communities who cannot afford health insurance. In
Spain, employees and the business helped to create a library for a Nicaraguan
community with no such facilities. This work is locally driven and employees
select the causes that we help support.

Board changes

On 26 April 2007, Sir Julian Horn-Smith resigned as non-executive Chairman and
as a director of Sage. Tony Hobson, a non-executive director and Chairman of
the Audit Committee, was appointed Chairman on 25 May 2007. We thank Sir Julian
for his contribution to the Sage Board during his tenure and welcome Mr Hobson
to his new role.

David Clayton joined the Board on 1 October 2007 as Group Strategy and Mergers
& Acquisitions Director, an executive board position. Mr Clayton will focus on
long term strategic planning and acquisition strategy. He was previously a
non-executive director of Sage and Senior Independent Director. Tim Ingram,
non-executive director of Sage, became Senior Independent Director, taking over
from Mr Clayton on 25 July 2007.

On 11 October 2007, as part of the reorganisation of our North American
business, Ron Verni (CEO, North America) stepped down from the Sage Board as
executive director. We thank Mr Verni for his long service to Sage and for
successfully developing our North American business.

On 1 November 2007, Ian Mason, Chief Executive of Electrocomponents plc, joined
the Board as a non-executive director. As announced separately today, Mark
Rolfe, Finance Director of Gallaher Group plc, will join the Board on 1
December 2007 as a non-executive director and will from 1 April 2008 chair the
Audit Committee. We welcome Messrs Mason and Rolfe to the Board and look
forward to their valuable contributions.

Outlook

Sage has had a successful year, once again delivering double digit revenue and
profit growth and substantial cash generation. We have continued to see strong
organic revenue growth whilst expanding our product and services portfolio
through strategic acquisitions.

We are confident that our consistently strong cash flows and recurring revenue
streams provide a solid foundation for future growth through both organic and
acquisition-led investment. In light of our on-going financial and commercial
strength and our commitment to creating shareholder value, we are rebasing our
dividend and are, as a result, significantly increasing our dividend for the
full year. It is our intention to follow a progressive dividend policy.

We see many opportunities arising from the changing needs of our core SME
customer base which this year reached 5.5 million. Developments in technology,
a greater demand for customised solutions and the increasing use of value-added
products and services all provide a rich source of long term growth from which
we are well-placed to benefit.

Going into 2008 we anticipate further good performances in the UK, Mainland
Europe and Rest of World. As we step up investment in our North American
business to accelerate our sustainable organic growth over the medium term, we
expect an impact on margins in 2008. However, in this financial year, we expect
to see the early benefits of the actions taken within this region with a modest
improvement in organic growth.

The new year has started well, with all regions performing in line with our
expectations. Whilst we recognise the current uncertainties in the
macro-economic situation, the defensive characteristics of our business model
lead us to view 2008 with confidence.

CONSOLIDATED INCOME STATEMENT

For the year ended 30 September 2007

                                                             Year          Year
                                                                               
                                                         ended 30      ended 30
                                                        September     September
                                                                               
                                                             2007          2006
                                                                               
                                                      (Unaudited)     (Audited)
                                                                               
                                           Note                £m            £m
                                                                               
Revenue                                      2            1,157.6         935.6
                                                                               
Cost of sales                                             (103.7)        (80.4)
                                                                               
Gross profit                                              1,053.9         855.2
                                                                               
Selling and administrative                                (798.7)       (619.4)
expenses                                                                       
                                                                               
Operating profit                             2              255.2         235.8
                                                                               
Finance income                                                3.6           3.5
                                                                               
Finance expenses                                           (35.5)        (18.1)
                                                                               
Net finance expenses                                       (31.9)        (14.6)
                                                                               
Profit before taxation                                      223.3         221.2
                                                                               
Taxation                                     5             (69.2)        (68.6)
                                                                               
Profit for the year                                         154.1         152.6
                                                                               
Attributable to:                                                               
                                                                               
Equity shareholders                                         154.1         152.5
                                                                               
Minority interest                                               -           0.1
                                                                               
Profit for the year                                         154.1         152.6
                                                                               
Earnings per share (pence) - basic*          7             11.85p        11.81p
                                                                               
Earnings per share (pence) - diluted*        7             11.79p        11.73p
                                                                               
* After intangible amortisation and net                                        
development                                                                    

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE

For the year ended 30 September 2007

                                                             Year          Year
                                                                               
                                                         ended 30      ended 30
                                                        September     September
                                                                               
                                                             2007          2006
                                                                               
                                                      (Unaudited)     (Audited)
                                                                               
                                                               £m            £m
                                                                               
Profit for the year                                         154.1         152.6
                                                                               
Net exchange adjustments offset in                         (61.0)        (30.8)
reserves                                                                       
                                                                               
Actuarial gain on post-employment                             0.6             -
benefits                                                                       
                                                                               
Total recognised income for                                  93.7         121.8
the year                                                                       
                                                                               
Attributable to:                                                               
                                                                               
Equity shareholders                                          93.7         121.7
                                                                               
Minority interest                                               -           0.1
                                                                               
Total recognised income for                                  93.7         121.8
the year                                                                       

CONSOLIDATED BALANCE SHEET

As at 30 September 2007

                                                   30 September    30 September
                                                                               
                                                           2007            2006
                                                                               
                                                    (Unaudited)       (Audited)
                                                                               
                                                             £m              £m
                                                                               
Goodwill                                                1,572.1         1,561.9
                                                                               
Other intangible assets                                   195.5           185.6
                                                                               
Property, plant and equipment                             130.5           133.8
                                                                               
Deferred tax assets                                         8.3            26.3
                                                                               
Total non-current assets                                1,906.4         1,907.6
                                                                               
Inventories                                                 5.5             5.6
                                                                               
Trade and other receivables                               230.3           215.7
                                                                               
Cash and cash equivalents                                  65.6            82.0
                                                                               
Total current assets                                      301.4           303.3
                                                                               
                                                                               
                                                                               
TOTAL ASSETS                                            2,207.8         2,210.9
                                                                               
Trade and other payables                                (212.3)         (190.3)
                                                                               
Current tax liabilities                                  (56.3)          (63.5)
                                                                               
Financial liabilities                                                          
                                                                               
- Borrowings                                              (0.3)           (1.0)
                                                                               
Deferred consideration                                    (8.5)          (21.5)
                                                                               
Deferred income                                         (300.2)         (282.1)
                                                                               
Total current liabilities                               (577.6)         (558.4)
                                                                               
Financial liabilities                                                          
                                                                               
- Borrowings                                            (562.0)         (662.8)
                                                                               
Retirement benefit obligations                            (1.4)           (2.1)
                                                                               
Deferred tax liabilities                                 (14.2)          (10.0)
                                                                               
Total non-current liabilities                           (577.6)         (674.9)
                                                                               
                                                                               
                                                                               
TOTAL LIABILITIES                                     (1,155.2)       (1,233.3)
                                                                               
                                                                               
                                                                               
NET ASSETS                                              1,052.6           977.6
                                                                               
Share capital                                              13.0            12.9
                                                                               
Share premium account                                     478.2           462.8
                                                                               
Other reserve                                              61.1            61.1
                                                                               
Currency translation reserve                             (78.4)          (17.4)
                                                                               
Retained earnings                                         578.7           458.1
                                                                               
Total shareholders' equity                              1,052.6           977.5
                                                                               
Minority interest in equity                                   -             0.1
                                                                               
TOTAL EQUITY                                            1,052.6           977.6

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 30 September 2007

                                                              Year         Year
                                                                               
                                                          ended 30     ended 30
                                                         September    September
                                                                               
                                                              2007         2006
                                                                               
                                                       (Unaudited)    (Audited)
                                                                               
                                            Note                £m           £m
                                                                               
Cash flows from operating                                    317.1        267.1
activities                                                                     
                                                                               
Interest received                                              3.6          3.5
                                                                               
Interest paid                                               (34.4)       (17.5)
                                                                               
Tax paid                                                    (66.1)       (60.3)
                                                                               
Net cash from operating                                      220.2        192.8
activities                                                                     
                                                                               
Cash flows from investing                                                      
activities                                                                     
                                                                               
Acquisitions of subsidiaries (net                           (96.2)      (617.5)
of cash acquired)                                                              
                                                                               
Disposal of subsidiaries                                       0.9          7.8
                                                                               
Purchase of property, plant and                             (22.1)       (23.8)
equipment                                                                      
                                                                               
Proceeds from sale of property, plant                          0.2          2.9
and equipment                                                                  
                                                                               
Purchase of intangible assets                               (15.9)        (3.2)
                                                                               
Development expenditure                                          -        (0.1)
                                                                               
Net cash used in investing                                 (133.1)      (633.9)
activities                                                                     
                                                                               
Cash flows from financing                                                      
activities                                                                     
                                                                               
Net proceeds from issue of                                    15.0         11.7
ordinary share capital                                                         
                                                                               
Purchase of treasury shares                                      -       (13.3)
                                                                               
Finance lease principal payments                             (0.2)        (0.3)
                                                                               
Issue costs on loans                                         (0.2)        (2.2)
                                                                               
Repayment of borrowings                                    (189.0)      (631.7)
                                                                               
New borrowings                                               122.2      1,131.1
                                                                               
Dividends paid to shareholders                              (49.0)       (39.1)
                                                                               
Net cash (used in)/from financing                          (101.2)        456.2
activities                                                                     
                                                                               
Net (decrease)/increase in cash              4              (14.1)         15.1
and cash equivalents (before                                                   
exchange rate changes)                                                         
                                                                               
Effects of exchange rate changes             4               (2.3)        (2.2)
                                                                               
Net (decrease)/increase in cash                             (16.4)         12.9
and cash equivalents                                                           
                                                                               
Cash and cash equivalents at 1               4                82.0         69.1
October                                                                        
                                                                               
Cash and cash equivalents at 30              4                65.6         82.0
September                                                                      

NOTES

For the year ended 30 September 2007

1 Basis of preparation

The financial information has been prepared in accordance with International
Financial Reporting Standards ("IFRS") and IFRIC interpretations as adopted by
the European Union and with those parts of the Companies Act 1985 that are
applicable to companies reporting under IFRS.

The Preliminary Announcement was approved by the Board of Directors on 27
November 2007.

2 Analysis of results*

                                 Year ended                       Year ended          
                                                                                      
                              30 September 2007                30 September 2006      
                                                                                      
                        Revenues       EBITA   Operating Revenues*    EBITA* Operating
                                                  profit                       profit*
                     (Unaudited) (Unaudited)             (Audited) (Audited)          
                                             (Unaudited)                     (Audited)
                                                                                      
                              £m          £m          £m        £m        £m        £m
                                                                                      
UK                         217.7        81.3        81.0     204.4      75.6      76.3
                                                                                      
Mainland Europe            343.9        80.0        70.9     295.9      65.7      58.1
                                                                                      
North America              508.1       100.0        83.4     329.1      78.0      71.5
                                                                                      
Rest of World               76.1        19.9        19.7      63.0      16.6      16.5
                                                                                      
                         1,145.8       281.2       255.0     892.4     235.9     222.4
                                                                                      
Acquisitions:                                                                         
                                                                                      
UK                           6.4         1.3       (0.2)         -         -         -
                                                                                      
Mainland Europe              5.2         0.6         0.3         -         -         -
                                                                                      
Rest of World                0.2         0.1         0.1         -         -         -
                                                                                      
                            11.8         2.0         0.2         -         -         -
                                                                                      
                                                                                      
                                                                                      
Gain on disposal               -           -          -          -       2.7       2.7
                                                                                      
Impact of foreign              -          -           -       43.2      10.7      10.7
exchange*                                                                             
                                                                                      
                         1,157.6       283.2       255.2     935.6     249.3     235.8

*The 2007 trading results from businesses located outside the UK were
translated into Sterling at the average exchange rates for the year. For our
two most significant foreign operating currencies, the US Dollar and the Euro,
the resulting rates were £1=$1.98 and £1=€1.48 respectively. Results for the
year ended 30 September 2006 have been retranslated at these exchange rates to
facilitate the comparison of results. The Group does not hedge this
translational exposure.

EBITA includes a charge for share-based payments of £8.8m (2006: £8.9m).

The Board measures Group and regional performance by using EBITA (earnings
before interest, tax and amortisation, which includes the effects of
amortisation of acquired intangible assets and the net amortisation or
capitalisation of software development expenditure) on a foreign currency
neutral basis.

Reconciliation of EBITA to operating              Year                     Year
profit                                                                         
                                              ended 30                 ended 30
                                                                               
                                             September                September
                                                                               
                                                  2007                     2006
                                                                               
                                           (Unaudited)                (Audited)
                                                                               
                                                    £m                       £m
                                                                               
EBITA                                            283.2                    249.3
                                                                               
Net development                                                                
                                                                               
Development cost capitalised          -                     0.9                
                                                                               
Development amortisation          (0.8)                   (0.8)                
                                                                               
                                                 (0.8)                      0.1
                                                                               
Amortisation of acquired                        (27.2)                   (13.6)
intangible assets                                                              
                                                                               
Operating profit                                 255.2                    235.8

3 Reconciliation to statutory revenue and profit before taxation

Reconciliation of revenue

                                                   Year         Year          
                                                                              
                                               ended 30     ended 30          
                                              September    September          
                                                   2007         2006          
                                                                              
                                            (Unaudited)    (Audited)    Growth
                                                                              
                                                     £m           £m         %
                                                                              
Revenue on foreign currency exchange rate       1,157.6        892.4       30%
neutral basis                                                                 
                                                                              
Impact of movements in foreign currency               -         43.2          
exchange rates                                                                
                                                                              
Statutory revenue                               1,157.6        935.6       24%

Reconciliation of profit before taxation

                                                   Year         Year          
                                                                              
                                               ended 30     ended 30          
                                              September    September          
                                                   2007         2006          
                                                                              
                                            (Unaudited)    (Audited)    Growth
                                                                              
                                                     £m           £m         %
                                                                              
Profit before taxation on foreign currency        251.3        221.3       14%
exchange rate neutral basis, before                                           
amortisation of intangible assets and                                         
before 2006 gain on disposal                                                  
                                                                              
Gain on disposal                                      -          2.7          
                                                                              
                                                  251.3        224.0       12%
                                                                              
Impact of movements in foreign currency               -         10.7          
exchange rates                                                                
                                                                              
                                                  251.3        234.7        7%
                                                                              
Amortisation of intangible assets and net        (28.0)       (13.5)          
development                                                                   
                                                                              
Statutory profit before taxation                  223.3        221.2        1%

4 Analysis of change in net debt

                                         At 1              Exchange       At 30
                                                          movement/   September
                                      October                                  
                                         2006                              2007
                                                                               
                                    (Audited) Cash flow       other (Unaudited)
                                                                               
                                           £m        £m          £m          £m
                                                                               
Cash and cash equivalents                82.0    (14.1)       (2.3)        65.6
                                                                               
Loans due within one year               (0.9)       0.7           -       (0.2)
                                                                               
Finance leases due within one           (0.1)         -           -       (0.1)
year                                                                           
                                                                               
Loans due after more than one         (661.7)      70.1        30.5     (561.1)
year                                                                           
                                                                               
Finance leases due after more           (0.2)       0.2       (0.1)       (0.1)
than one year                                                                  
                                                                               
Cash collected from customers          (12.7)     (2.1)         1.0      (13.8)
                                                                               
                                      (593.6)      54.8        29.1     (509.7)

Included in cash above is £13.8m (2006: £12.7m) relating to cash collected from
customers, which we are contracted to pay onto another party. A liability for
the same amount is included in trade and other payables on the balance sheet
and is classified within net debt above.

5 Taxation

The taxation charge for the year comprises:

                                      Year                Year
                                                              
                        ended 30 September  ended 30 September
                                                              
                                      2007                2006
                                                              
                               (Unaudited)           (Audited)
                                                              
                                        £m                  £m
                                                              
UK taxation                           23.1                22.6
                                                              
Overseas taxation                     46.1                46.0
                                                              
                                      69.2                68.6

The taxation charge gives an effective rate of 31% (2006: 31%).

6 Statutory accounts

The unaudited financial information set out above does not constitute the
Company's statutory accounts for the year ended 30 September 2007. The
Company's statutory accounts for the year ended 30 September 2006 have been
delivered to the Registrar of Companies.

The Group results for the year ended 30 September 2006 have been extracted from
those statutory accounts. The Auditors' Report on the accounts to 30 September
2006 was unqualified and did not contain a statement under Section 237 of the
Companies Act 1985. Accounts to 30 September 2007 will be delivered in due
course.

7 Earnings per share

The calculation of basic earnings per ordinary share is based on earnings,
after amortisation, of £154,075,000 (2006: £152,503,000) being the profit for
the year and on 1,299,874,688 ordinary 1p shares (2006: 1,290,759,040) being
the weighted average number of ordinary shares in issue during the period.

The diluted earnings per ordinary share is based on profit for the period of £
154,075,000 (2006: £152,503,000) and on 1,306,973,183 ordinary 1p shares (2006:
1,299,714,922).

8 Dividends

The final dividend proposed for approval at the Annual General Meeting on 28
February 2008, of 5.73 pence per share will be paid on 7 March 2008 to
shareholders on the register at the close of business on 8 February 2008.

A summary of dividends paid and proposed is set out in the table below:

                                     Year                Year
                                                             
                       ended 30 September  ended 30 September
                                                             
                                     2007                2006
                                                             
                              (Unaudited)           (Audited)
                                                             
                                    pence               pence
                                                             
Interim dividend                     1.27                1.08
                                                             
Final dividend                       5.73                2.51
                                                             
                                     7.00                3.59

                                                                                                                                                                                                                                         

a d v e r t i s e m e n t