Financial Report - Annual Results for 30th September 2000

Chairman's Statement

Group pre-tax profit for the year to 30 September 2000, including exceptional items, was £1.1 million compared with £2.4 million. Turnover at £8.4 million compares with £10.5 million for 1999. These results continue to reflect lower business activity levels post completion of Year 2000 programmes and uncertainty among SMEs in the short-term regarding the implementation of e-business solutions.

Pre-tax profit for the year was arrived at after charging some £1.8 million to the profit and loss account (1999: £1.8 million), representing our continued substantial investment in Research & Development. Particular emphasis has been placed on our Quantum VS e-business solution further details of which are given by Richard Jowitt, our Chief Executive, in his statement. We attach great importance to our ownership of our intellectual property.

During the year the Group acquired two businesses both of which were previously competitors to EDP. The first of these was Disys Associates Limited which was acquired on 26 June for £226,000. This was followed by the purchase of the trade and certain assets and liabilities of BCT Business Systems Limited on 19 September for £400,000. Together Disys and BCT bring more than 200 customers to the Group. These customers will benefit from our extensive portfolio of software products and services, in particular our Quantum VS e-business Solution and Application Hosting Services. These acquisitions establish the EDP Group as the largest IT Solution provider to the UK independent Builders and Timber Merchants market place and a leading supplier to the wholesale distribution industry.

The Group's balance sheet remains strong with cash balances in excess of £9 million at 30 September 2000. We continue to be interested in utilising these cash balances for the acquisition of compatible software solution providing businesses where opportunities exist to further expand the Group's operations in the markets we address.

As I reported in my Interim Statement the litigation brought against our subsidiary, BML (Office Computers) Limited, by a former customer was dismissed when judgement was handed down on Wednesday, 1 March 2000 in the High Court. The matter of costs has now been finalised with the Group recovering some £527,000, which represents a substantial proportion of the total expenditure on this case and which was received in cash prior to the year end.

Your Directors have resolved to pay a final dividend of 1.533p per share, the same as last year, on 6 April 2001 to shareholders on the register at 9 March 2001. The shares will be ex-dividend on 7 March 2001.

Whilst trading conditions remain challenging the infrastructure that we have put in place over the last two years has been in recognition of the fundamental changes taking place in our industry. This preparation will enable us to take full advantage of market opportunities. Our financial and technical strengths provide long term security for our customers creating the opportunity for improvement in shareholder value. I therefore remain cautiously optimistic .

MICHAEL HELLER

Chairman

13th December 2000.