(HSS.L) Highams Systems Services Group PLC Buy/Sell

Ken Ford, Chairman of Highams, commented:

"As anticipated in our preliminary results announced at the end of July, we have produced a profit for the first six months of this financial year despite the difficult trading conditions during the period. We are pleased that the positive effects of the significant cost savings achieved have all come into play and this reduction in our overheads, together with the signs of increased activity within our market have therefore given the expected results so far. With these increased levels in activity, we expect further progress during the following six months and look forward to our future growth."

Enquiries:

Mark de Lacy, Managing Director Tel: 01883 341 144

Highams Systems Services Group plc www.highams.com
Rick Thompson / Carl Holmes Tel: 020 7149 6000

Charles Stanley Securities (Nominated Adviser and Broker)
Tarquin Edwards Tel: 07879 458 364

Peckwater PR

CHAIRMAN'S STATEMENT

Interim results for the six months ended 30 September 2009

Introduction

As anticipated in our preliminary results announced at the end of July, we have produced a profit for the first six months of this financial year despite the difficult trading conditions during the period. We are pleased that the positive effects of the significant cost savings achieved have all come into play and this reduction in our overheads, together with the signs of increased activity within our market have therefore given the expected results so far. With these increased levels in activity, we expect further progress during the following six months and look forward to our future growth.

The market is showing signs of improvement and we believe that we are well placed to deliver quality candidates into our clients at the right time and at the right value. We continue to build excellent client and candidate relationships within our niche market in the insurance sector and we look forward to benefiting from these efforts in the future and in capitalising on the quality of service and delivery associated with our brand.

Financials

With a difficult trading start to the year, Group turnover reduced to £3.77 million (2008: £5.66 million), and gross profit fell to £572,000 (2008: £1.004 million). However the operating profit before interest and tax was £45,000 (2008: loss £227,000), reflecting the significant reduction in our overheads.

The Company will not be declaring an interim dividend.

Summary and Outlook

The current business has been stabilised and there are signs of recovery showing in our niche areas. We are fully focused on continuing to turn our business around and delivering value for all shareholders.

Ken Ford

Chairman

12 November 2009

Consolidated income statement
for the six months ended 30 September 2009 6 months to 6 months to 12 months to
30 Sep 2009 30 Sep 2008 31 Mar 2009
Unaudited Unaudited Audited
Note £'000 £'000 £'000
Revenue 3,768 5,664 10,533
Cost of sales (3,196) (4,660) (8,768)
Gross profit 572 1,004 1,765
Administrative costs (527) (1,231) (2,082)
Operating profit/loss 45 (227) (317)
Finance income - 4 4
Finance costs (5) (38) (57)
Profit/(loss) on ordinary activities before taxation 40 (261) (370)
Profit/(loss) for the period attributable to equity 40 (261) (370)

shareholders

Basic and diluted 2 0.06 p (0.82) p (0.77) p

earnings/(loss) per share

Consolidated statement of comprehensive income
for the six months ended 30 September 2009 6 months to 6 months to 12 months to
30 Sep 2009 30 Sep 2008 31 Mar 2009
Unaudited Unaudited Audited
£'000 £'000 £'000
Profit/loss for the period 40 (261) (370)

Other comprehensive income
Foreign currency translation 1 1 (1)

difference Total comprehensive income for the period
attributable to equity shareholders 41 (260) (371)

Consolidated statement of Share capital Share premium Merger reserve Employee share Total equity
changes in equity benefit reserve

At 30 September 2009
Currency Reserve Retained earnings
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 1 April 2008 1,594 679 90 (61) 4 (2,435) (129)
Currency Adjustments 1 1
Loss to 30 September 2008 (261) (261)
at 1 October 2008 1,594 679 90 (61) 5 (2,696) (389)
Issue of new shares 3 647 650
Associated cost of new shares (87) (87)
Loss to 31 March 2009 - - - - (2) (109) (111)
At 1 April 2009 1,597 1,239 90 (61) 3 (2,805) 63
Currency adjustments - - - - 1 - 1
Profit to 30 September 2009 - - - - 40 40
At 30 September 2009 1,597 1,239 90 (61) 4 (2,765) 104

Consolidated balance sheet As at 30 September 2009
6 months to 6 months to 12 months to
30 Sep 2009 30 Sep 2008 31 Mar 2009
Unaudited Unaudited Audited
£'000 £'000 £'000

Assets Non-current assets
Intangible assets - 6 3
Property, plant and equipment 10 11 12
Total 10 17 15

Current assets
Trade and other receivables 1,010 1,563 1,343
Cash and cash equivalents - - -
Total 1,010 1,563 1,343
Total assets 1,020 1,580 1,358

Liabilities Current liabilities
Borrowings (132) (670) (256)
Trade and other payables (784) (1,299) (1,039)
Total (916) (1,969) (1,295)
Net assets/(liabilities) 104 (389) 63

Equity
Share capital 1,597 1,594 1,597
Share premium account 1,239 679 1,239
Merger reserve 90 90 90
Employee share benefit trust (61) (61) (61)

reserve
Currency reserve 4 5 3
Retained earnings (2,765) (2,696) (2,805)
Total equity 104 (389) 63

Consolidated Cash Flow Statement for the six months ended 30 September 2009
6 months to 6 months to 12 months to
30 Sep 2009 30 Sep 2008 31 Mar 2009
Unaudited Unaudited Audited
£'000 £'000 £'000

Operating activities
Profit/(loss) before taxation 40 (261) (370)
Depreciation of 2 5 10
property, plant and
equipment
Amortisation of 3 5 8
intangible assets
Net finance costs 5 34 53
Changes in trade and 333 710 930
other receivables
Changes in trade and (254) 63 (198)
other payables
Net cash used in operating activities 129 556 433

Cash flows from investing activities
Purchase of property plant and equipment - - (10)
Proceeds of property plant and equipment - 4 7
interest received - 4 4
Net cash used in investing activities - 8 1

Financing activities
Reduction in borrowings (58) (526) (890)
Proceeds from issue of share capital - - 650
Associated cost of share issue - - (87)
Interest paid (5) (38) (57)
Net cash from financing activities (63) (564) (384)
Net changes in cash and cash equivalents (66) - 50
Cash and cash equivalents, beginning of (119) - (169)

period

Cash and cash equivalents at end of period (53) - (119)

Notes to the Interim Report

1. Basis of Preparation

This unaudited consolidated interim financial information has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively EU IFRSs). The principal accounting policies used in preparing the interim results are those it expects to apply in its financial statement for the year ended 31 March 2010 and are unchanged from those disclosed in the group's Annual Report for the year ended 31 March 2009.

The financial information for the six months ended 30 September 2009 and 30 September 2008 is unreviewed and unaudited and does not constitute the group's statutory financial statements for those periods. The comparative financial information for the full year ended 31 March 2009 has, however, been derived from the audited statutory financial statement for that period. A copy of those statutory financial statements has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 237(2)-(3) of the Companies Act 1985. The financial information in the Interim Report is presented in Sterling and all values are rounded to the nearest thousand pounds (£'000) except when otherwise indicated.

2. Earnings per share

6 months to 6 months to 12 months to
30 Sept 2009 30 Sept 2008 31 March 2009
Unaudited Unaudited Audited

Earnings/(loss) per share
Weighted Weighted Weighted
average average average
number of Earnings number of Loss number of (loss)
Earnings shares per share Loss shares per share Loss shares per share
£'000 '000 p £'000 '000 p £'000 '000 p

Basic earnings/loss per share
40 68,834 0.06 (260) 31,692 (0.82) (370) 47,770 (0.77)

This information is provided by RNS The company news service from the London Stock Exchange

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