CMO Cmo Group Plc

RNS Number:8411J
Comino Group PLC
12 September 2001

COMINO GROUP PLC


TRADING UPDATE


The Company announced at its AGM on 6 July 2001 that its profits to 31 March
2001 had been in line with expectations and it had shown a 24 per cent growth
in core business. Comino has consistently demonstrated year on year growth.


Whilst historically the Company has experienced stronger performance in the
second half of its financial years, the performance rate in the first half of
the current financial year is proving to be significantly below the Company's
expectation. This is primarily due to a reduction in the number of new local
authority contracts. In addition, the Company has increased development
expenditure in occupational pensions at some cost to short-term profitability.


Local authorities, which have been heavily involved in completing funding
applications to central government for IEG (the Implementation of Electronic
Government), have been slower than expected in awarding new contracts. The
Board believes that these contracts have not been lost to competitors and that
continuing negotiations will still result in significant new business.


The functionality of the occupational pensions product is being extended to
include pensioner payroll and third party administration. The early completion
of these additional modules will significantly enhance the product range in a
sector from which the Company expects to see substantial future growth.
Maintaining quality of service to existing customers, during this period of
additional development, is vital and capacity to undertake new business is
therefore limited in the short-term until available resource is trained.


Comino is experiencing improved performance in its second quarter but this
will be insufficient to prevent a loss at the half year. The Board anticipates
stronger performance in the second half of the year based on its order book
and prospects and expects to make a profit for the year as a whole. However,
this profit will be significantly reduced compared with that achieved to 31
March 2001.


The Company, in anticipation of continued growth has invested in further
people and infrastructure with a consequential increase in overheads. The
Board believes that this investment is still key to that growth.


The Company's investment in Comino Techflow, and its product for the
professional services automation market, has been scaled back but plans remain
to address the market when general economic conditions improve.


The Board believes that the strength of Comino's customer base, the level of
its recurring income, the resilience of its core business and its strong
balance sheet, positions the Company well for future growth.


The Board will keep shareholders fully appraised of further progress and
anticipates making its interim statement as usual in late November 2001.


END

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