RNS Number:5942I
Horizon Technology Group PLC
12 March 2003



                          Horizon Technology Group plc


                              Preliminary Results

                        For the year to 31 December 2002






Horizon meets earnings expectations

and

generates cash of Euro40m



Highlights:


  * Adjusted diluted Earnings Per Share meets market expectations at 4.6 cent
    or 6.97 cent excluding discontinued activities;


  * EBITDA growth from Euro4.4m to Euro8m on revenues of Euro321.4m;


  * Generated cash of Euro40m - that is, moved from net debt of Euro34.7m at start
    of year to net cash of Euro5.1m at year-end;


  * The group has consolidated into four businesses each of which has been and
    continues to be profitable and is a market leader in its area of operation.


Commenting on the results: Samir Naji, Executive Chairman and Chief Executive of
Horizon Technology Group plc said: "2002 was a period of significant progress
for the group. In an uncertain trading environment where confidence is fragile,
the group has generated operating profits, has improved its cash position by
Euro40m thereby eliminating net debt and has consolidated into four core and
profitable businesses. These achievements mark a notable turning point for the
group.


During the year, we have strengthened our customer base in a number of key
market sectors, including public services, manufacturing and retail finance. We
have achieved this by competing aggressively and becoming more efficient than
our competitors, while protecting and increasing our earnings. Customer
satisfaction remains high as we continue to help our customers gain the maximum
return from their new and existing investments in technology.


We have produced growth in operating profits and generated significant cash flow
thereby eliminating net debt and reducing risk profile. We are a profitable
group ready to take advantage of any future upturn in market conditions."




About Horizon:


Horizon Technology Group plc is a leading technical integrator and distributor
of information technology products in the UK and Ireland. Horizon is quoted on
the London and Dublin Stock Exchanges. (Website: www.horizon.ie)

For more information contact;

Paul McSharry,

Financial Dynamics Ireland

Tel:     +353-1-6633633

email;     paulmc@fdireland.ie




                              CHAIRMAN'S STATEMENT


SUMMARY PERFORMANCE

2002 was a period of significant progress for the group. In an uncertain trading
environment with falling demand for IT products and services and fragile
confidence internationally, the group generated operating profits, improved its
cash position by Euro40m thereby eliminating net debt and consolidated back to its
four core and profitable businesses. These achievements mark a notable turning
point for the group:


  * Operating Profits: Revenue for the year to December was 18.5% down on
    calendar year 2001 reflecting the deterioration in market demand. However,
    largely due to the benefits of the cost reduction program, EBITDA has
    increased from Euro4.4m to Euro8m, which is a considerable achievement given
    market conditions.


  * Four profitable businesses: In response to the continued downturn in
    demand for IT related products and services, Horizon continued its
    comprehensive and fundamental restructuring of group-wide operations thereby
    reducing quarterly running costs by a further 48% in 2002 alone. Including
    cost cuts implemented in 2001, the group's cost structure has been cut by
    68% from its peak quarterly cost of Euro17m in March 2001 to current quarterly
    costs of Euro5.5m approximately. Likewise, headcount was reduced from 720 at
    the peak in March 2001 to a current 208. The restructuring process has
    included:


  * the disposal of the group's Cisco training business and smaller
    application consulting businesses;

  * the discontinuation of developmental service lines including that of
    i-Fusion, Horizon's ASP offering;

  * the realignment of cost structures in continuing businesses to reflect
    market demand; and

  * the integration of the remaining applications consulting businesses, a
    fundamental review of consulting service lines, the rationalisation of
    operating premises and the simplification of the supporting group structure.


  * Net cash: The group's cash position was improved by Euro40m. That is, the
    year began with net debt of Euro34.7m and ended with net cash of Euro5.1m. The net
    cash for acquisitions/disposals was Euro3.3m and cash flow from operations
    generated Euro38.1m essentially attributable to a reduction in the group's
    investment in working capital.


The pre tax result for the year is impacted by two one-off items charged to the
profit and loss account - the loss on disposal of the training and consulting
businesses and the exceptional costs incurred in the restructuring process. As a
result of these negative items of a one-off nature, diluted loss per share for
the year is 19.39 cent. However, underlying trading performance (i.e. from
continuing activities excluding amortisation of intangibles and non-operating
exceptional items) shows a diluted earnings per share of 6.97 cent per share.


The largest cost within exceptional items is provisions for future costs of
vacant properties. Following the sale of the Cisco training businesses and as a
result of the fundamental restructuring implemented, Horizon has substantial
lease obligations for properties that lie vacant. Appropriate provisions have
been made for these future obligations.



OUTLOOK

IT spending shows no signs of improving, with over-capacity in the market and
continuing poor visibility. However, Horizon has strong market positions, both
in the Irish market and in key segments of the UK market, very competitive cost
structures, efficient processes, strong relationships with blue-chip customers
and global IT vendors and a debt-free balance sheet. These competitive
advantages should enable Horizon to grow market share even in challenging market
conditions. Horizon is a profitable group ready to take advantage of any future
upturn in market conditions.




Samir Naji

Chairman

11 March 2003




OPERATING RESULTS

Revenue for the year to December 2002 was 18.5% down on calendar year 2001
reflecting the deterioration in market demand. Excluding discontinued
businesses, revenue fell by 8%. The fall occurred in the distribution division,
which was down 30% reflecting a reduction in both unit price and volume shipped.
Revenue in the IT Services division was up 10.7% on continuing operations
principally because of the very successful development of our UK enterprise
infrastructure operation, which acts as a key infrastructure partner to major
systems integrators and resellers.


Gross profit margin for the year to December 2002 at 12.4% (11.1% on continuing
operations) was down from 16.7% in calendar year 2001. The fall is attributable
to two factors. Firstly, a change in revenue mix, that is the impact of the
turnover growth in the UK enterprise infrastructure and the reduced contribution
from application consulting and training businesses as a result of recent
disposals. Secondly, as the markets have become more competitive, the group has
focused on aggressive pricing at the same time as cutting its cost structure. We
have and will continue to compete aggressively and achieve greater efficiencies
so as to increase revenues and market share while protecting and increasing
earnings.


Despite the falls in revenue and gross profit, EBITDA has increased from Euro4.4m
to Euro8m largely due to the benefits of the group's cost reduction program.
Operating costs as a percentage of revenue have reduced from 15.6% in calendar
year 2001 to 9.9% in calendar year 2002 and EBITDA as a percentage of revenue is
up from 1.1% to 2.5%.




RESTRUCTURING

It is now nearly two years since the fortunes of the IT sector began to reverse
from the exceptional levels of growth experienced for the previous period. When
the downturn first became evident in May 2001, Horizon's operating plans were
designed to exploit the opportunities in a growing market and these plans were
quickly reviewed in the light of the changed circumstances.

The group initiated an examination of all businesses, operations and
expenditures with a view to consolidating back to its core operations and
ensuring that its cost base was appropriate given the deterioration in the
economic environment. In the last two years annualised running costs have been
reduced by 68% through a group-wide comprehensive and fundamental restructuring
which has included disposals, closures and rationalisation. Full time equivalent
staff numbers were reduced from a March 2001 peak of 720 to a current level of
208. During 2002 this fundamental restructuring process included:


  * the disposal of the Cisco training business to Azlan Group plc;

  * the disposal of smaller application consulting businesses, WebFactory and
    Fusion Business Solutions UK;

  * the disposal of the developmental ASP division, iFusion;

  * discontinuation of the group's historic infrastructure business in the UK
    focusing on telcos and service providers;

  * integration and review of the remaining application consulting businesses;

  * the rationalisation of operating premises; and

  * the simplification of the supporting group structures.


As a result of the fundamental restructuring process, the group's pre tax
results have been impacted by two significant items of a one-off nature:


  * a loss on disposal of Euro13.2m inclusive of goodwill write down and
    provisions for future losses and property lease commitments on discontinued
    operations; and

  * redundancy and restructuring provisions of Euro2.1m


The largest item within the exceptional costs is provisions for future lease
obligations on vacant properties. Following the sale of the Cisco training
businesses and as a result of the fundamental restructuring implemented, Horizon
has substantial lease obligations for properties that lie vacant. A program is
underway to sub-let, assign, terminate or otherwise dispose of these obligations
and some minor successes have been achieved. In the unlikely event that this
program were to make no further progress, the present value of all the future
obligations under these leases would be Euro16.6m, the term of the leases range
from two to ten years and the annual cash outflow would be circa Euro2.9m in early
years, reducing as leases expire.


The directors, having taken external professional advice, have estimated the
level of income that can reasonably be expected to be generated from these
vacant premises and have made an appropriate provision based on their best
estimate of the net cash outflows. The accounts include a non-operating
exceptional charge of Euro7.5m in respect of these vacant premises of which Euro6.1m
is a provision for future costs.




PROFITS OF CONTINUING OPERATIONS

As a result of the one-off items described above, the group had losses before
tax of Euro12.5m and after tax of Euro13.6m. However, excluding the impact of
amortisation, exceptional items and discontinued operations, profit before tax
was Euro6.6m and profit after tax was Euro4.9m. To provide shareholders with full
visibility of the impact of exceptional and one-off costs on the results for the
year, the table below computes the underlying trading performance of continuing
activities - that is, excluding discontinued businesses, exceptional items and
amortisation of intangibles.

                                                                                        Consolidated
                                                                                          continuing
                                                                                         operations,
                                                                       Exceptional         excluding
                                                                         items and    amortisation &
                                                       Discontinued   amortisation      exceptionals
                                        Consolidated     operations
                                               total
                                               Euro'000          Euro'000          Euro'000             Euro'000

                                             
       Turnover                              321,412         11,364              -           310,048

                                              
       Gross profit                           39,814          5,464              -            34,350

                                               
       EBITDA                                  8,017          (811)              -             8,828

                                               
       Operating profit                        3,975        (1,672)        (1,669)             7,316

                                            
       (Loss)/Profit before tax             (12,471)       (15,114)        (3,962)             6,605

                                            
       Retained (loss)/profit               (13,589)       (14,926)        (3,545)             4,882

                                             
       EPS - basic (c)                       (20.93)                                            7.52

                                             
       EPS - diluted (c)                     (19.39)                                            6.97




CASH FLOW, LIQUIDITY AND FUNDING

In a very difficult trading environment, significant progress has been made in
the management of working capital and the group's cash position. The group began
the year with net debt of Euro34.7m and ended with net cash of Euro5.1m, a turnaround
of nearly Euro40m. Cash flow from operations generated Euro38.1m. Since the flotation
date, cash generated by operations equates to 130% of operating profits before
goodwill.


Cash from operating activities                                 Euro'm

EBITDA from continuing operations                              8.8

EBITDA from discontinued operations                            (0.8)

Exceptional costs                                              (2.6)

Reduction in working capital                                   32.7

Cash flow from operating activities                            38.1


The positive cash flow from operations is primarily attributable to a reduction
in working capital of Euro32.7m. In the course of the year, stock was increased by
Euro2.1m but this was offset by a reduction in debtors of Euro25.7m and an increase in
creditors of Euro9m.


Debtors' days were reduced from 64 to 50 days. An element of this reduction
arose because a smaller proportion of the sales in the period arose in the month
of December than in previous years. If a normalised proportion of revenues had
been achieved in December, debtors would have been higher by circa Euro3.5m and
debtors' days would have been 54.


A summary of the improvement from net bank debt of Euro34.7m to net cash of Euro5.1m
is as follows:




Movement in net bank debt                                      Euro'm

Opening net bank debt                                          (34.7)

Cash flow from operating activities                            38.1

Interest and corporation tax payments                          (1.8)

Capital expenditure                                            (0.4)

Net cash for acquisitions/disposals                            3.3

Finance leases relating to disposals                           0.6

Closing net cash balances                                      5.1


Net debt as a percentage of equity reduced from 109% at 31 December 2001 to nil
at 31 December 2002. The net interest charge for the year at Euro977,000 is a
significant improvement over previous periods. The interest charge for the six
months to 31 December 2002 at Euro334,000 compares with Euro643,000 for the previous
six months and Euro1,077,000 for the corresponding July to December period in 2001.


As a result of the extent of one-off exceptional items, interest cover is
negative but it is notable that interest cover on continuing activities
excluding exceptional costs is 10.3 times, a significant improvement over 4.2
times in the corresponding period of the previous year.




DIVISIONAL ANALYSIS

The group operates through two separate trading divisions, namely IT Services
and Distribution and Channel Services. The performance of each division is
detailed below.




IT SERVICES DIVISION

                                                                 Year ended      Six months ended
                                                               December 2002       December 2001
                                                                   Euro'000               Euro'000
Turnover                                                          213,997             101,200
Gross profit                                                       32,701             24,382
Gross margin                                                       15.3%               24.1%


The division assists customers in implementing their IT strategies through the
provision of infrastructure, development and consulting services, predominantly
to blue-chip corporate clients and government departments. The division has
enterprise infrastructure businesses in Ireland and the UK and an application
consulting business in Ireland. It has a current full time equivalent headcount
of 146.

In the year to December 2002, the division's turnover was Euro214m, down 10.7% on
calendar year 2001. Excluding discontinued businesses, the division's turnover
grew 10.7% principally because of the very successful development of our UK
enterprise infrastructure operation, which acts as a key infrastructure partner
to major systems integrators and resellers. While the revenue of the Irish
enterprise infrastructure operation was well down on its peak, it has
experienced growth in the second half of 2002, up 12.6% on the equivalent period
in 2001.

Application consulting revenue from continuing activities reduced principally
because of a weakness in demand for new SAP implementation projects. However,
data warehousing and customer relationship management services were particularly
strong with a number of new projects completed successfully during 2002.

The IT Services division continued to broaden its customer base in 2002 with
strong market share gains in the key mid-range and high-end of the market.
Sectors which experienced significant wins included public service,
manufacturing and retail finance, in which a number of large systems projects
were completed in 2002. The telecommunications sector now accounts for less than
20% of revenues, down from circa 50% at its peak in 2000. We continue to have an
exceptionally high level of customer retention, with over 80% of our business
coming from repeat customers.

The reduction in the division's gross profit margin is primarily attributable to
a change in mix brought about by the growth in enterprise infrastructure
turnover and the reduced contribution from application consulting businesses as
a result of the recent disposals. Also, as the market becomes more competitive,
the group has focused on aggressive pricing at the same time as cutting its cost
structure. Horizon has and will continue to compete aggressively and achieve
greater efficiencies so as to increase revenues and market share while
protecting and increasing earnings.




DISTRIBUTION AND CHANNEL SERVICES DIVISION

                                                                 Year ended      Six months ended
                                                               December 2002       December 2001
                                                                   Euro'000               Euro'000
Turnover                                                          107,128             66,525
Gross profit                                                       7,063               4,027
Gross margin                                                        6.6%               6.1%


Clarity Distribution is Ireland's leading value added distributor of volume IT
products and offers leading edge supply chain management services to global IT
vendors and resellers. This division operates in the Irish market and has a
current full time equivalent staff count of 52.

Turnover of the division fell by 30% in 2002 on calendar year 2001 reflecting
both the decrease in PC unit shipments in Ireland and the reduction in unit
price during the year. Clarity's gross profit margin has been reducing for some
time but this trend was reversed in 2002 as the division increased custom,
configuration and staging work for larger resellers and continued the
development of its customer segmentation program. This increase in gross profit
margin and a reduction in operating costs protected the division's EBIT margins.

The merger of HP and Compaq to become the world's second largest IT manufacturer
represents a significant development in the consolidation of this market and has
been of benefit to the group's distribution division. Horizon is the leading
distributor of the combined HP and Compaq product range in Ireland and Northern
Ireland and has further expanded its market share in this area following the
merger.






                      CONSOLIDATED PROFIT AND LOSS ACCOUNT

                      for the year ended 31 December 2002

                                                                                                            Total
                                                                                            Total      Six months
                                                        Continuing   Discontinued      Year ended           ended
                                                        operations     operations     31 Dec 2002     31 Dec 2001
                                              Note           Euro'000          Euro'000           Euro'000           Euro'000

TURNOVER                                         2         310,048         11,364         321,412         168,156

Variation in stocks of finished goods and                    

work-in-progress                                             1,777          (140)           1,637         (3,241)
Purchases                                                (277,475)        (5,760)       (283,235)       (136,397)
Staff Costs                                               (15,546)        (3,628)        (19,174)        (18,530)
Other operating charges                                    (9,976)        (2,647)        (12,623)        (10,136)
                                                          ________       ________        ________        ________
EARNINGS BEFORE INTEREST
DEPRECIATION, AMORTISATION
AND GOODWILL IMPAIRMENT                                      8,828          (811)           8,017           (148)
Depreciation                                               (1,512)          (770)         (2,282)         (2,374)
Amortisation of intangibles                                (1,669)           (91)         (1,760)         (1,935)
Goodwill impairment                                              -              -               -         (9,692)
                                                          ________       ________        ________        ________
OPERATING PROFIT/(LOSS)                                      5,647        (1,672)           3,975        (14,149)
NON OPERATING EXCEPTIONAL ITEMS:
Costs of fundamental restructuring                         (2,132)              -         (2,132)           (760)
Disposal and termination of business units                       -       (13,176)        (13,176)         (6,884)
Diminution in value of long term investments                 (161)              -           (161)               -
                                                          ________       ________        ________        ________
                                                             3,354       (14,848)        (11,494)        (21,793)
                                                          ________       ________
Net interest charge                                                                         (977)         (1,077)
                                                                                         ________        ________
LOSS ON ORDINARY ACTIVITIES BEFORE                                                       (12,471)        (22,870)
TAXATION
Tax on loss on ordinary activities                                                        (1,109)           1,336
                                                                                         ________        ________
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION                                               (13,580)        (21,534)
Minority interests (including non-equity                                                      (9)               -
minority interests)
                                                                                         ________        ________
LOSS RETAINED FOR THE FINANCIAL PERIOD AND                                               (13,589)        (21,534)
ATTRIBUTABLE TO MEMBERS OF THE PARENT
COMPANY
                                                                                         ________        ________
Earnings per share:                              3
Basic earnings per ordinary shares (cents)                                                (20.93)         (34.46)
Basic earnings per ordinary shares                                                           
adjusted* (cents)                                                                            4.97          (3.61)
Basic earnings per ordinary shares                                                           
adjusted^ (cents)                                                                            7.52          (0.20)
Diluted earnings per ordinary shares                                                      
(cents)                                                                                   (19.39)         (34.00)
Diluted earnings per ordinary shares                                                         
adjusted* (cents)                                                                            4.60          (3.56)
Diluted earnings per ordinary shares                                                         
adjusted^ (cents)                                                                            6.97          (0.20)

*Earnings per share adjusted for operating and non-operating exceptional items
and amortisation of intangibles

^Earnings per share adjusted for all exceptional items, amortisation of
intangibles, and discontinued operations in order to give a better indication of
the underlying performance of the group.


              GROUP STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES

                      for the year ended 31 December 2002


                                                                            Year ended        Six months ended
                                                                      31 December 2002        31 December 2001
                                                                                 Euro'000                   Euro'000

Loss attributable to members of the parent company                            (13,589)                (21,534)

Exchange difference on retranslation of net assets of
subsidiary undertakings and deferred trading balances                          (1,001)                   (736)
                                                                            __________              __________
TOTAL RECOGNISED LOSSES RELATING TO
THE PERIOD                                                                    (14,590)                (22,270)
                                                                            __________              __________




                      RECONCILIATION OF SHAREHOLDERS FUNDS

                      for the year ended 31 December 2002
                                                                            Year ended        Six months ended
                                                                      31 December 2002        31 December 2001
                                                                                 Euro'000                   Euro'000

Total recognised losses                                                       (14,590)                (22,270)

Expenses on share issue                                                           (34)                    (33)

Re-instatement of goodwill previously written off                                  947                       -

Shares to be issued by way of deferred
consideration on acquisitions                                                  (4,563)                   1,491
                                                                            __________              __________

Total movements during the period                                             (18,240)                (20,812)

Shareholders' funds at beginning of period                                      31,917                  52,729
                                                                            __________              __________

Shareholders' funds at end of period                                            13,677                  31,917
                                                                            __________              __________





                           CONSOLIDATED BALANCE SHEET

                              at 31 December 2002
                                                                                  2002                   2001
                                                                                 Euro'000                  Euro'000
FIXED ASSETS
Intangible assets                                                                9,899                 17,988
Tangible assets                                                                  4,787                 11,590
Financial assets                                                                     -                    161
                                                                            __________             __________
                                                                                14,686                 29,739
                                                                            __________             __________
CURRENT ASSETS
Stocks                                                                          18,137                 16,693
Debtors                                                                         41,293                 71,675
Cash at bank and in hand                                                         9,330                  8,552
                                                                            __________             __________
                                                                                68,760                 96,920
CREDITORS: amounts falling due within one year                                (62,087)               (85,850)
                                                                            __________             __________
NET CURRENT ASSETS                                                               6,673                 11,070
                                                                            __________             __________
TOTAL ASSETS LESS CURRENT LIABILITIES                                           21,359                 40,809

CREDITORS: amounts falling due after more than one year                        (1,417)                (8,686)

PROVISIONS FOR LIABILITIES AND CHARGES                                         (6,148)                   (89)
                                                                            __________             __________
                                                                                13,794                 32,034
                                                                            __________             __________
FINANCED BY CAPITAL AND RESERVES
Called up share capital                                                          4,754                  4,524
Shares to be issued after period end                                             3,200                 10,823
Share premium                                                                   66,960                 64,164
Profit and loss account                                                       (45,690)               (32,047)
Cost of shares of the company held in an ESOP                                 (15,547)               (15,547)
                                                                            __________             __________
Shareholders' funds (all equity interests)                                      13,677                 31,917
Minority interests:
Non equity                                                                         117                    117
                                                                            __________             __________
                                                                                13,794                 32,034
                                                                            __________             __________



                        CONSOLIDATED CASH FLOW STATEMENT

                      for the year ended 31 December 2002

                                                                               Year ended     Six months ended
                                                                         31 December 2002     31 December 2001
                                                               Note                 Euro'000                Euro'000

CASH INFLOW FROM OPERATING ACTIVITIES                             4                38,083                  110
                                                                               __________           __________
RETURNS ON INVESTMENT AND
SERVICING OF FINANCE
Net interest paid                                                                 (1,021)                (933)
Dividends paid to minority interests                                                  (9)                    -
Interest element of finance lease rental payments                                   (109)                 (77)
                                                                               __________           __________
NET CASH OUTFLOW FROM RETURNS ON
INVESTMENTS AND SERVICING OF FINANCE                                              (1,139)              (1,010)
                                                                               __________           __________
TAXATION
Irish corporation tax paid                                                        (1,443)                (178)
Overseas taxation refund/(paid)                                                       824                (160)
                                                                               __________           __________
NET CASH OUTFLOW FROM TAXATION                                                      (619)                (338)
                                                                               __________           __________
CAPITAL EXPENDITURE
Payments to acquire tangible fixed assets                                           (852)              (1,655)
Payments to acquire intangible fixed assets                                             -                (207)
Receipts from sales of tangible fixed assets                                          422                   50
                                                                               __________           __________
NET CASH OUTFLOW FROM INVESTING ACTIVITIES                                          (430)              (1,812)
                                                                               __________           __________
ACQUISITIONS AND DISPOSALS
Purchase of subsidiary undertakings                                               (3,823)                (303)
Net cash transferred with subsidiaries sold                                         (891)                    -
Sale of subsidiary                                             5(d)                 8,046                    -
                                                                                _________           __________
NET CASH INFLOW/(OUTFLOW) FROM
ACQUISITIONS AND DISPOSALS                                                          3,332                (303)
                                                                                _________           __________
CASH INFLOW/(OUTFLOW) BEFORE USE
OF LIQUID RESOURCES AND FINANCING                                                  39,227              (3,353)
CASH INFLOW FROM MANAGEMENT OF LIQUID                                               1,016                    -

RESOURCES
NET CASH OUTFLOW FROM FINANCING                                5(c)              (10,723)              (3,392)
                                                                               __________           __________
INCREASE/(DECREASE) IN CASH                                    5(b)                29,520              (6,745)
                                                                               __________           __________




                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                      for the year ended 31 December 2002





1.     BASIS OF PREPARATION

The results incorporated in the preliminary announcement have been prepared in
accordance with accounting policies consistent with previous years.


The board of directors approved the preliminary announcement for the year to 31
December 2002 on 11 March 2003. The financial information set out above does not
constitute statutory accounts for the year ending 31 December 2002 or the six
months ending 31 December 2001. The full accounts for the six months ended 31
December 2001, which received an unqualified audit report, have been filed with
the Irish Companies Registration Office.



2.     SEGMENTAL INFORMATION

An analysis by geographical location, class of business and gross profit is set
out below:



                                                                     Year ended      Six months ended
                                                               31 December 2002      31 December 2001
                                                                          Euro'000                 Euro'000
Turnover (by source)
Republic of Ireland                                                     164,704                94,746
Britain and Northern Ireland                                            153,858                70,442
Mainland Europe                                                           2,850                 2,968
                                                                     __________            __________
                                                                        321,412               168,156
                                                                     __________            __________
Turnover (by destination)
Republic of Ireland                                                     123,201                81,094
Britain and Northern Ireland                                            192,465                82,841
Mainland Europe                                                           5,521                 2,158
Rest of World                                                               225                 2,063
                                                                     __________            __________
                                                                        321,412               168,156
                                                                     __________            __________
Turnover (by class of business)
IT services division                                                    213,997               101,200
Distribution and channel services division                              107,128                66,525
Application service provider division                                       287                   431
                                                                     __________            __________
                                                                        321,412               168,156
                                                                     __________            __________
Gross profit (by class of business)
IT services division                                                     32,701                24,382
Distribution and channel services division                                7,063                 4,027
Application service provider division                                        50                   109
                                                                     __________            __________
                                                                         39,814                28,518
                                                                     __________            __________


        An analysis of group net profit and net assets by geographic region and
        class of business is not provided as the directors believe that the
        disclosure of this information would be prejudicial to the interests of
        the group.





        3.      EARNINGS PER ORDINARY SHARE

                                                                                      

                                                                      Year ended      Six months ended
                                                                31 December 2002   31 December 2001(i)
The computation of basic and diluted earnings                              Euro'000                 Euro'000
per share is set out below:
Numerator
Loss after tax and minority interests                                   (13,589)              (21,534)
Non operating exceptional items                                           15,052                 7,649
Amortisation of goodwill and intangibles                                   1,760                11,627
                                                                      __________            __________
Adjusted profit before exceptional items and amortisation                  3,223               (2,258)
Discontinued operations                                                    1,659                 2,132
                                                                      __________            __________
Adjusted profit before exceptional items, amortisation,
and discontinued operations                                                4,882                 (126)
                                                                      __________            __________
Denominator
Weighted average number of shares in issue for the period                 64,912                62,492
('000)
Dilutive potential ordinary shares:
Deferred consideration                                                     4,971                   784
Employee share options                                                       190                    59
                                                                      __________            __________
Diluted weighted average number of ordinary shares ('000)                 70,073                63,335
                                                                      __________            __________
Earnings per share:
Basic earnings per ordinary shares (cents)                               (20.93)               (34.46)
Basic earnings per ordinary shares adjusted* (cents)                        4.97                (3.61)
Basic earnings per ordinary shares adjusted^ (cents)                        7.52                (0.20)
Diluted earnings per ordinary shares (cents)                             (19.39)               (34.00)
Diluted earnings per ordinary shares adjusted* (cents)                      4.60                (3.56)
Diluted earnings per ordinary shares adjusted^ (cents)                      6.97                (0.20)


        *Earnings per share adjusted for operating and non-operating
        exceptional items and amortisation of intangibles.


        ^Earnings per share adjusted for all exceptional items, amortisation of 
         intangibles, and discontinued operations in order to give a better 
         indication of the underlying performance of the group.


        (i) In accordance with FRS 14 the weighted average number of shares
        in issue for the period and the diluted weighted average number of
        ordinary shares have been restated for the period ended December 2001,
        as the potential ordinary shares outstanding at that date were changed
        by events since that date.


        For diluted earnings per share, the weighted average number of
        ordinary shares in issue is adjusted to assume conversion of all
        dilutive potential ordinary shares, namely share options and future
        contingent share issues.






 4. RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH INFLOW FROM OPERATING
    ACTIVITIES

                                                             Year ended          Six months ended
                                                       31 December 2002          31 December 2001
                                                                  Euro'000                     Euro'000

Operating profit/(loss)                                           3,975                  (14,149)

Non operating exceptional items                                (15,469)                   (7,644)

Non - cash exceptional items                                     12,919                     5,461

Depreciation, amortisation and impairment                         4,042                    14,001

Loss on disposal of tangible fixed assets                            25                        18

Decrease in debtors                                              25,646                    18,225

(Increase)/decrease in stocks                                   (2,056)                     3,241

Increase/(decrease) in creditors                                  9,001                  (19,043)
                                                            ___________               ___________

Net cash inflow from operating activities                        38,083                       110
                                                            ___________               ___________




        5.     ANALYSIS OF NET DEBT AND FINANCING AND RECONCILIATION OF NET CASH
               FLOW TO MOVEMENT IN NET DEBT

                (a)      Analysis of debt

                          31/12/2001      Cashflow      Non-cash     Disposals  Translation    31/12/2002
                             Opening                     Changes                 Adjustment       Closing
                               Euro'000         Euro'000         Euro'000        Euro'000         Euro'000         Euro'000

Cash                           7,536         1,956             -            -         (162)         9,330

Overdraft                   (31,274)        27,564             -            -            22       (3,688)
                            ________      ________      ________     ________      ________      ________

                            (23,738)        29,520             -            -         (140)         5,642

Liquid resources*              1,016       (1,016)             -            -             -             -

Short term loans             (3,830)         3,810             -            -             -          (20)

Long term loans              (1,029)           930             -            -             -          (99)

Finance lease                (2,139)         1,058          (25)          702            14         (390)
obligations

Acquisition loan notes       (4,933)         4,891             -            -             2          (40)
                            ________      ________      ________     ________      ________      ________

                            (34,653)        39,193          (25)          702         (124)         5,093
                            ________      ________      ________     ________      ________      ________


             * Liquid resources include monies held on deposit, which were
               pledged as security on borrowings. These have subsequently been 
               repaid.



                (b)  Reconciliation of net cash flow to movement in net debt

                                                                                        Euro'000

Increase in cash in year                                                               29,520

Cash outflow from decrease in debt and lease financing                                 10,689

Cash inflow from decrease in liquid resources                                         (1,016)
                                                                                   __________

Change in net debt resulting from cash flows                                           39,193

Finance leases disposed of with subsidiaries                                              702

New finance leases                                                                       (25)

Translation adjustment                                                                  (124)
                                                                                   __________

Movement in net debt in the year                                                       39,746

Net debt at 31 December 2001                                                         (34,653)
                                                                                   __________

Net debt at 31 December 2002                                                            5,093
                                                                                   __________


                (c)      Net cash outflow from financing


                                                                                         
                                                                   2002                  2001
                                                                                        
                                                                  Euro'000                 Euro'000

Net movements in short term borrowings                          (8,701)               (2,198)

Net movement in long term borrowings                              (930)                 (190)

Expenses on issue of ordinary share capital                        (34)                  (33)

Capital element of finance lease rental payments                (1,058)                 (971)
                                                            ___________           ___________

Net cash outflow from financing                                (10,723)               (3,392)
                                                            ___________           ___________


                (d)     Disposal of subsidiary undertakings



                                                                                        Euro'000

Net assets disposed of                                                                 10,616

Diminution in value of tangible fixed assets                                            2,852
                                                                                  ___________

                                                                                       13,468

Loss on disposal                                                                      (4,788)
                                                                                  ___________

Total cash receipts                                                                     8,680
                                                                                  ___________
Satisfied by:

Cash consideration (including expenses)                                                 8,046

Deferred cash consideration (including expenses)                                          634
                                                                                  ___________

Total cash receipts                                                                     8,680
                                                                                  ___________


        The businesses sold during the period had cash outflows from operating
        activities of Euro712,000, paid Euro251,000 in respect of net returns on
        investments and servicing of finance, paid Euro8,000 in respect of taxation
        and utilised Euro21,000 for capital expenditure.



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

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