(SVR) ServicePower Technologies

Operational Highlights

· Company-wide restructuring programme completed in the second half of the year resulting in ongoing costs and overheads now in line with recurring revenue streams.

· 3 contracts signed in the US in the year for SERVICEOutsourcing: the key business strategy for ServicePower.

· Sales and marketing focused strategy resulted in new contract wins across all of ServicePower's product range.

· Launched ServiceStore in the US, a buying group for the independent servicer network which also offers a range of ServicePower products to the servicers.

Mark Duffin, CEO, ServicePower said, "ServicePower has had a productive year in spite of a difficult market place throughout the year. The Board completed a substantial Group-wide restructuring programme which is expected to result in considerable cost savings for the Group going forward. The business now has a good platform for growth, both organic and through very selective acquisitions.

"The sales and marketing focus has led to not only to the development of a healthy pipeline but we can report contract wins during the period across all of ServicePower's product range. We are particularly delighted to announce the signing of 3 contracts for the SERVICEOutsourcing offering which gives us much confidence in this as a key strategy for the future.

"We continue to believe that we offer a unique proposition within the outsourced services industry, a view which is being supported by these contract wins and we therefore look forward to the future with optimism."

For further information, please contact:

ServicePowerTechnologies Plc FinnCap
Tel: +1 410 571 6333 Tel: 020 7600 1658
Mark Duffin, Chief Executive Officer Marc Young
Charlotte Stranner

About ServicePower

ServicePower, publicly traded on the AIM market operated by the London Stock Exchange (AIM:SVR), allows companies to locate their employed field resources in the right geography, ensure they have the right mix of skills, and outside this geography create a network of independent, authorised service contractors whose costs are efficiently managed by our sophisticated warranty management software. The schedules and routes for both the employed field resources and the independent servicers are optimised by ServicePower's technology to ensure the right balance between the cost of operations and ensuring customers receive a superior service experience.

Joint statement of the Chairman and Chief Executive

________________________________________________________________________________ _________

Introduction

ServicePower is pleased to announce that 2009 was a constructive year for the Company as it restructured and re-aligned the business for incremental growth. The Company undertook a wide-reaching and successful cost-cutting and restructuring programme that brought the Company's ongoing overheads in line with its recurring revenue streams. This achievement would not have been possible without the hard work and dedication of the staff at ServicePower.

While the market place remained very tough the board believes that the business will be well placed to benefit from any upturn in economic sentiment while being well positioned to weather difficult markets. The Board considers that the business now resembles an excellent platform to grow the business both organically and through very selective acquisitions.

The strategy of the Company remains that of the last two years, namely as a sales and marketing led business which is focussed on outsourced field management services with a dual offering of either a software licence solution or fully managed service for its clients.

The Company remains focussed on increasing regular transactional business, thereby improving visibility of revenue and costs, ensuring that ServicePower will continue to be a leading supplier of scheduling and full service solutions for the field service market place.

Financial Review

The Company has two segments, Service Operations and Service Scheduling.

Total revenue for the year increased by 16% to £18.1 million (2008: £15.6 million). Service Operations revenue increased by 13% to £10.3 million (2008: £9.1 million) whilst Service Scheduling licence and consultancy revenue increased by 20% to £7.8 million (2008: £6.5 million).

A breakdown of revenue from the Service Operations segment is as follows:

£ million £ million
Hosting / SaaS 2.9 2.7
Operations US 2.9 3.9
Operations UK 4.5 2.5
Total 10.3 9.1

A breakdown of revenue from the Service Scheduling segment is as follows:

£ million £ million
Licences 2.4 2.5
Implementation / Support 4.8 3.1
Mobility 0.6 0.9
Total 7.8 6.5

The Company continued to invest in enhancement of functionalities across all of its product range, investing £0.6 million in 2009 (2008: £1.2 million).

Gross profit for the period increased at a similar rate to revenue, up by 17% to £6.3 million (2008 restated: £5.4 million) such that margin remained steady at 35%.

The total loss before tax was £4.0 million, from a profit of £0.6 million in 2008. This includes the following;

£ million £ million
One-time cost for restructuring (0.9) -

Reported (loss)/gain on currency
translation (1.2) 3.1

Impairment loss on intangible
assets (0.8) -

Total one-time costs and currency translation
(expense)/income (2.9) 3.1

Adjusted loss for one-off
costs and currency translation (1.1) (2.5)

Basic loss per share for the year was 2.2p (2008: earnings per share of 2.4p).

Cash balances decreased to £3.5 million at 31 December 2009 from £4.0 million at 31 December 2008. The directors cannot recommend the payment of a dividend at this time. Further information on the going concern basis of preparation is included in note 2.

Operational Review

Restructuring

As reported in the interim statement, ServicePower executed a wide-reaching restructuring programme during the year. This had long been deemed necessary by the Board but the scale of the implementation of these changes had previously proved restrictive. However, the prior restructuring and fund-raising in 2008 gave ServicePower the resources required to see the changes through and this, coupled with the need to react to recessionary markets, expedited the process.

The restructuring included the reduction of staff numbers from headcount of 128 at the beginning of the year to 90 by the end. Most of the redundancies took place in the second half of the year due to contractual obligations. As a result of the staff cuts the management structure has been streamlined and a pay review, also implemented during the year, resulted in a number of salary reductions.

However, ServicePower recognises that it operates in a knowledge-based industry and requires a highly skilled workforce particularly within the product development teams. Consequently to maintain skill levels, flexibility and an ability to respond to market and client demands promptly, ServicePower has developed a partnership with an offshore software development company. The in-house product development teams will take care of upgrades and maintenance, while any customer funded functionality upgrades will be produced in partnership with the outsourced development centre. The customer support team, unaffected by the cost cutting, remains in-house.

The cost of the redundancies accounted for approximately £0.8 million of the total £0.9 million one-off costs in the year and, in actual terms, cost savings resulting directly from staff cuts are expected to equate to approximately £2.2 million per annum from the beginning of 2010.

In addition, at the year end, the Board reviewed the business strategy of the Company. The review included the project known as Field Service in a Box, which is an application first developed in 2005 for the small independent servicer market, and receives job details, driving instructions and GPS tracking via a mobile phone. It was concluded that as management regard the future revenues from this project to be unknown, and there can be no certainty, at this stage, regarding future cashflows to be generated, the development costs incurred in prior years of £0.8 million should be fully impaired. The impairment is a non-cash adjustment. The product will continue to be developed on a smaller scale in-house and the strategy to market for the product will be through SERVICEStore.

Product Review

In North America, ServicePower released a new product called SERVICEStore. It is a buying group for the Company's independent servicers, and provides access to product discounts aimed at reducing their back office costs while also offering a range of ServicePower products previously not marketed to servicers due to cost, but now affordable through a SaaS offering. This powerful platform will enable the Company to create a servicer community and establish an elite servicer group across many trades, which will open up new markets for the business.

SERVICEStats, a management information system, was launched in 2008 and this compelling offering has been developed and sold to a number of existing clients. Going forward the Company plans to sell the offering both on a traditional licence basis and as a SaaS offering. The future opportunity for ServicePower is to be able to offer a wider business intelligence offering around field service and outsourced management.

SERVICEOutsourcing was also launched in 2008. This is a unique, turnkey solution which offers customers a fully outsourced, white-labelled, field-service network. The SERVICEOutsourcingservice recruits, trains, certifies and optimises the performance of a network of independent field service personnel. This can be offered to any organisation in any industry or geography that either desires a field service network but cannot build one, or wishes to outsource its existing field service operations.

The Company has established new independent servicer networks in four trades during the year in the North American home improvement market. Home improvement retailers will access the servicer network via SERVICEOutsourcing to offer an installation service to customers who have purchased their goods. The Company is encouraged by the market opportunity and is developing a new software platform that will have global functionality for both installation and warranty claims.

SERVICEOutsourcing is the key business strategy for ServicePower and the Company is experiencing huge interest in the potential of the offering, with the four trade networks in place; tier 2 and 3 clients will be targeted in the first instance.

Partnerships and Customers

During the year ServicePower has signed a number of important strategic partnerships with Guidewire Software, Point X, and Jigsaw Business Networks, all of which give the Company an opportunity to sell to a wider market. This strategy will remain core to the company throughout 2010 and the business will branch into other countries during the year through this strategy. As well as helping ServicePower win new contracts the partnerships have greatly increased the Company's capacity to execute transactional SaaS business which is a fundamental element of ServicePower's strategy.

North America

ServicePower's sales and marketing focus on existing products also continues to produce results. During the year ServicePower won two new contracts in North America for its hosted software and services solution; Flextronics and a leading U.S. based supplier of extended warranty service contracts both signed contracts for three year terms. GEC&I, the global consumer appliance supplier, has been a key customer and partner of ServicePower for a number of years and has renewed its original agreement with ServicePower which covers repair work within its appliance division in the U.S for another three years.

Several new contracts were also entered into with global consumer electronics, appliances, insurance and service companies in North America, which have the potential value in excess of $1million over the next three years. ServicePower has also signed three exclusive five year contracts for SERVICEOutsourcing service; these are with International Greenhouse Contractors (IGC), a North American distributor of greenhouses, Systems Trading Corporation, also a North American distributor of greenhouses and Hubbell Electric Heaters, a North American manufacturer of water heaters, to provide a fully outsourced field service network for the installation of their products.

In addition, two service scheduling licence contracts were signed in 2009, both in North America; SGS Inc, schedule inspection engineers and a company who schedule maintenance engineers for their battery and generator products.

United Kingdom and Europe

In the UK, a contract commenced in September 2009 to manage the despatch of jobs using ServicePower's hosted software to manage independent servicers who provide 24 hour home emergency services on behalf of a major insurance company and domestic bank.

In addition, as announced in 2008, ServicePower signed a contract with E.ON Property Services UK to provide a total end to end solution for their entire service operation. The provision of all the services was completed in June 2009 and the project is now fully operational.

Growth Strategy

The Company has maintained a constant and cost effective sales and marketing strategy in relation to existing products in its traditional consumer appliance sector. However the products are versatile and can be sold in a variety of other markets and as such ServicePower is now targeting additional markets where the opportunities are regarded to be the greatest.

SERVICEOutsourcing is the core product to this strategy as ServicePower believes there is significant demand for this unique service, particularly in the retail markets. The strategy will be to target successive market sectors to enable growth to be at a consistent and manageable pace. ServicePower is currently targeting the home improvement sector and has signed four contracts to date to provide installation services.

Board and Management changes

In July 2009, Nan Kreamer stepped down as Interim CFO and in October 2009 ServicePower appointed Sally Gillings to the Board as Finance Director. Sally has been with the company as Financial Controller for 8 years and her first-hand experience and knowledge of the Company will be of great value to ServicePower in driving the restructured and more financially efficient business.

Outlook

ServicePower has had a productive year, undertaking a major restructuring that allows the business to be in charge of its own destiny. The Company has successfully forged new partnerships with leading retailers and manufacturers who are increasingly recognising the quality of its products and services. With new products and a focussed strategy the Company has built up a healthy pipeline of potential business and the Board looks forward with confidence to the opportunities for 2010 and beyond.

Lindsay Bury, Chairman Mark Duffin, CEO

18 March 2010

Consolidated income statement for the year ended 31 December 2009

Note 2009 2008
£'000 £'000
Revenue -Service Scheduling 7,793 6,536

(Loss)/profit per share
Basic 5 (2.2)p 2.4p
_________ _________
Diluted 5 (2.2)p 2.2p

_________ _________

All amounts relate to continuing activities.

Consolidated statement of comprehensive income for the year ended 31 December 2009

£'000 £'000

Exchange differences on translation of foreign 659 (2,314)

operations
Net income/(loss) recognised directly in equity 659 (2,314)

(Loss)/profit for the year (4,182) 848

Total comprehensive income for the year (3,523) (1,466)

Consolidated statement of changes in equity for the year ended 31 December 2009

Equity attributable to equity holders of the Company
Share capital Share premium Share scheme reserve Exchange translation reserve Equity reserve Merger reserve Retained reserves Total
account
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000

Balance at 1 January 2008 8,926 15,206 414 343 - (3,008) (19,787) 2,094
Profit for the period - - - - - - 848 848

Other comprehensive income
for the period - - - (2,314) - - - (2,314)

Total comprehensive income
for the period - - - (2,314) - - 848 (1,466)

Issue of share capital 1,000 3,420 - - - - - 4,420

Credit to equity for equity-settled
share-based payments - - 64 - - - - 64

Equity component of convertible
loan notes - - - - 13 - - 13

Balance at 31 December 2008 9,926 18,626 478 (1,971) 13 (3,008) (18,939) 5,125

Loss for the period - - - - - - (4,182) (4,182)

Other comprehensive income
for the period - - - 659 - - - 659

Total comprehensive income
for the period - - - 659 - - (4,182) (3,523)

Credit to equity for equity-settled
share-based payments - - 80 - - - - 80

Balance at 31 December 2009 9,926 18,626 558 (1,312) 13 (3,008) (23,121) 1,682

Consolidated balance sheet at 31 December 2009

£'000 £'000 £'000

Assets Non-current assets
Intangible assets 409 1,770 1,550
Property, plant and equipment 369 317 180
_________ _________ _________
778 2,087 1,730
_________ _________ _________

Current assets
Inventories 51 65 -
Finance lease receivables - - 88
Trade and other receivables 4,005 4,808 2,955
Cash and cash equivalents 3,543 3,956 1,520
_________ _________ _________
7,599 8,829 4,563
_________ _________ _________
Total assets 8,377 10,916 6,293
_________ _________ _________

Current liabilities
Trade creditors and accruals (3,427) (2,674) (2,697)
Deferred revenue (2,005) (1,942) (1,430)
Other creditors (30) (120) (72)
Convertible loan note (1,233) (1,055) -
_________ _________ _________
(6,695) (5,791) (4,199)
_________ _________ _________
_________ _________ _________
Net assets 1,682 5,125 2,094
_________ _________ _________

Equity
Share capital 9,926 9,926 8,926
Share premium account 18,626 18,626 15,206
Share scheme reserve 558 478 414
Exchange translation reserve (1,312) (1,971) 343
Equity reserve 13 13 -
Merger reserve (3,008) (3,008) (3,008)
Retained earnings deficit (23,121) (18,939) (19,787)
_________ _________ _________
Total equity 1,682 5,125 2,094
_________ _________ _________

The financial statements of Servicepower Technologies plc, registration number 3941006 were approved by the Board of Directors and authorised for issue on 18 March 2010. They were signed on its behalf by:

M Duffin

Director

18 March 2010

Consolidated cash flow statement for the year ended 31 December 2009

Note 2009 2008
£'000 £'000
Net cash outflow from operating activities 6 (122) (3,165)
_________ _________

Investing activities
Interest received 2 50
Purchases of property, plant and equipment (244) (223)
Expenditure on intangible assets (62) (128)
Receipt from sale of tangible fixed assets - 7
_________ _________
Net cash used in investing activities (304) (294)
_________ _________

Financing activities
Proceeds on issue of shares - 4,420
Proceeds on issue of convertible bridging loan - 1,000
________ _________
Net cash from financing activities - 5,420
_________ _________
Net (decrease)/increase in cash and cash (426) 1,961

equivalents

Cash and cash equivalents at beginning of year 3,956 1,520
Effect of exchange rate changes 13 475
__________ _________
Cash and cash equivalents at end of year 3,543 3,956
_________ _________

Notes to the financial statements for the year ended 31 December 2009

________________________________________________________________________________ _________

1 Basis of accounting

The financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the European Union. Whilst the financial information included in this preliminary announcement has been computed in accordance with International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company expects to publish full financial statements that comply with IFRSs in May 2010.

In the current financial year, the Group has adopted International Financial Reporting 8 "Operating Segments" and International Accounting Standard 1 "Presentation of Financial Statements" (revised 2007).

Upon adoption of IFRS 8, there have been no changes to the segments reported in the financial statements. However, there has been a change in the allocation of expenses between cost of sales and administrative expenses, to ensure consistency with the manner in which costs are allocated and reported to the Board and Chief Executive. The prior year comparatives have been restated as shown in note 3.

2 Going concern

A significant portion of cash receipts comes from the sale of large software licences. The signing of contracts by large corporate customers can be difficult to predict due to long procurement cycles and therefore there is uncertainty in forecasting the timing and quantum of cash receipts from these customers.

During the year, the Group has continued its SERVICEOperations business which provides a regular revenue stream and cash funding to the Group. During the period the Group implemented a wide-ranging cost cutting programme in order to conserve cash. The annualised savings as a result of the restructuring amounts to £2,200,000.

In addition, in the prior year, it raised £5.4 million of cash, net of expenses, through the issue of shares and convertible loan notes to strengthen the Group's financial position and enable it to expand its operations. At 31 December 2009 the Group had net assets of £1,682,000 including £3,543,000 of cash and cash equivalents (31 December 2008 - net assets of £5,125,000 including £3,956,000 of cash and cash equivalents).

Based on cashflow forecasts which take into account current sales orders and opportunities, expenditure forecasts and the Group's current cash balance, the directors consider it appropriate to prepare the Group's financial statements on the going concern basis.

3 Business segments

In prior periods, segment information reported externally was analysed on the basis of the Group's business streams namely, software licences which provide scheduling solutions and service operations which provides claims and despatch processing in the consumer electronics market. This method of segment analysis is also used to report to the Board and the Chief Executive.

Segment information about these businesses is presented below:

2009 Service Service Group
Scheduling Operations Total

£'000 £'000 £'000
Revenue from external sales 7,793 10,315 18,108
Segment profit before impairment 2,974 1,106 4,080
Impairment loss - (822) (822)
Segment profit after impairment 2,974 284 3,258
Central administration costs - other (5,004)
Foreign exchange loss (1,196)
Restructuring costs (900)
Total central administration costs (7,100)
Investment income 2
Finance costs (177)
Loss before tax (4,017)
Taxation (165)
Loss after tax (4,182)

2008 restated
Service Service Group
Scheduling Operations Total

£'000 £'000 £'000
Revenue from external sales 6,536 9,102 15,638
Segment profit/(loss) 2,540 (39) 2,501
Central administration costs - other (4,989)
Foreign change gain 3,060
Total central administration costs (1,929)
Investment income 50
Finance costs (69)
Profit before tax 553
Taxation 295
Profit after tax 848

The accounting policies of the reportable segments are the same as the Group's accounting policies described in note 1. Segment profit represent the profit earned by each segment without allocation of the share of the profits of associates, central administration costs including directors' salaries, investment revenue and finance costs, and income tax expense. This is the measure reported to the Group's Chief Executive for the purpose of resource allocation and assessment of segment performance.

The Group sells software licences to global organisations which may have lengthy procurement processes. For this reason forecasting revenue relating to these contracts is unpredictable and the cash receipts therefore uneven.

Segment assets

£'000 £'000
Service scheduling 1,730 3,581
Service operations 3,090 3,350
Total segment assets 4,820 6,931
Unallocated assets 3,557 3,985

Total consolidated assets 8,377 10,916

For the purposes of monitoring segment performance and allocating resources between segments the Group's Chief Executive monitors the tangible, intangible and financial assets attributable to each segment. All assets are allocated to reportable segments with the exception of other financial assets (except for trade and other receivables) and tax assets.

Other segment information
Depreciation and amortisation and Additions to non-current assets
impairment losses

£'000 £'000 £'000 £'000

Service scheduling 65 84 53 258
Service operations 1,350 416 253 93
Group total 1,415 500 306 351

Revenues from major products and services were as follows:

The Group's revenues from its major products and services were as follows:

£'000 £'000
Service scheduling 7,793 6,550
Service operations 10,315 9,088
Group total 18,108 15,638

Geographical information

The Group's operations are located in the United States of America, the United Kingdom and the rest of Europe. The Group's revenue from external customers and information about its segment assets by geographical location are detailed below irrespective of the origin of the services:

Revenue from external customers Non-current assets

£'000 £'000 £'000 £'000
United States of America 10,241 11,807 1,497 1,970
United Kingdom 7,788 3,753 103 117
Rest of Europe 79 78 - -
18,108 15,638 1,600 2,087

Information about major customers

£'000 £'000

Net foreign exchange losses/(gains) 1,196 (3,060)
Research and development costs 645 1,219
Depreciation of property, plant and equipment 144 117
Amortisation of internally generated intangible assets 423 383
Staff costs 7,357 7,079
Impairment loss recognised on trade receivables and finance 68 543

lease
Impairment loss recognised on intangible assets 822 -
Cost of inventories recognised as an expense 7 254
Cost of restructuring (see below) 900 -
Auditors' remuneration for audit services 71 82

Amounts payable to Deloitte LLP and their associates by the Group in respect of non-audit services were £43,000 (2008: £117,000).
During the second half of the year, a Group-wide restructuring was carried out which resulted in the average number of staff employed during the year reduce to 104 compared to 137 in the previous year.
The staff termination costs amounted to £761,000 (2008: nil) and a provision for an onerous lease amounted to £139,000 (2008:nil).
At the end of the year, the Board, having reviewed the business strategy for a project known as FSS in a box, concluded that the product development expenditure held as an intangible asset, to the value of £822,000 should be fully impaired.

5 Loss per share

The calculation of the basic and diluted earnings per share is based on the following data:

(Loss)/Earnings

£'000 £'000
(Loss)/earnings for the purposes of basic earnings per share being
net profit attributable to equity holders of the parent (4,182) 848

Effect of dilutive potential ordinary shares:

Interest on convertible loan notes (net of tax) - 46
________ ________

(Loss)/earnings for the purposes of diluted earnings per share (4,182) 894
_________ _________
Number of shares 2009 2008
Number Number
Weighted average number of ordinary shares for the purposes of
basic (loss)/earnings per share 189,526,299 35,278,764

Effect of dilutive potential ordinary shares:

Convertible bridging loan - 5,489,649
________ ________

189,529,299 40,768,413
_________ _________

(Loss)/earnings per share

pence pence
Basic (loss)/earnings per share (2.2)p 2.4p
________ ________
Diluted (loss)/earnings per share (2.2)p 2.2p
_________ _________

In the current year, as the Group is loss making, the share options and convertible loan notes are anti-dilutive.

6 Notes to the cash flow statement

£'000 £'000

(Loss)/profit from operations (3,842) 572

Adjustments for:
Depreciation of property, plant and equipment 144 117
Amortisation of intangible assets 423 383
Impairment losses on intangible assets 822 -
Bad debt expense 83 471
Share-based payments provision 80 64
Loss on disposal of property, plant and equipment 24 -

Operating cash flows before movements in working capital (2,266) 1,607
Decrease/(increase) in inventories 7 (65)
Decrease/(increase) in receivables 55 (2,265)
Increase/(decrease) in payables 1,932 (2,442)

Cash used by operations (272) (3,165)
Income taxes received 150 -

Net cash used in operating activities (122) (3,165)

7 Non statutory information note

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 December 2009 or 2008, but is derived from those accounts. Statutory accounts for 2008 have been delivered to the Registrar of Companies and those for 2009 will be delivered following the Company's annual meeting. The auditors reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis and did not contain statements under s498 (2) or (3) Companies Act 2006 or the equivalent preceding legislation.

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

FR GMGMFNNNGGZM