Interim Results

Interim Results - 6 months to 31 March 2010

·; Turnover at £2.77 million stabilised (up 2% on H2 2009 but down 11% against H1 2009).

·; Contracted recurring revenues remain strong representing 81% of total revenues.

·; Adjusted operating profit up 8.5% at £330,000 (2009: £304,000) giving an improved operating margin of 11.9% (2009: 9.7%) as prior year cost saving measures took full effect.

·; Hosting revenues now represent 27% of total revenues (2009: 22%).

·; Continued R&D investment of £465,000 in first half (£1.0 million in the full year to 30 September 2009).

·; Interim dividend maintained at 0.713p per share.

·; Group has a strong, debt-free balance sheet and cash balances of £2.5 million.

Michael Heller, Chairman of EDP, said:

"We continue to manage the cost base of the business carefully whilst remaining committed to ensuring that our products remain up to date and relevant to our customers' needs. There have been some signs of improvement in our markets recently but we expect our customers to remain cautious in their attitude towards the recovery for some time yet. We have strengthened our sales and marketing resource over the last 24 months and we are well placed to take advantage of opportunities which arise."

-Ends-

For further information please contact:

www.edp.co.uk

Chairman's Statement

Turnover for the 6 months to 31 March 2010 was £2.77 million (2009: £3.13 million). This represents a reduction of 11% compared with the corresponding period last year. However, during the period to 31 March 2009 we had not yet felt the full effects of the general slow-down in the economy. In comparison with the second half of last year, we have seen an increase in turnover of around 2%.

Adjusted operating profit, before non-cash IFRS charges, was £330,000 (2009: £304,000) representing an operating margin of 11.9% (2009: 9.7%). This increase in underlying operating profit, despite lower turnover during the period, is a direct result of the cost-saving measures which were successfully implemented throughout the business last year.

Statutory pre-tax profit for the period was £227,000 (2009: £340,000). Finance income (representing bank interest receivable) was £83,000 lower at £18,000 due to lower interest rates and the reduction in cash balances after the share buy-back last year. Furthermore, non-cash IFRS charges at £121,000 were £56,000 greater, principally in relation to an increased defined benefit pension scheme charge.

After a period in our markets of postponed or cancelled IT expenditure, we have seen our revenues stabilise over the last six months and grow modestly in comparison with the second half of last year as our customers start to invest in IT once again. There is interest in upgrading to the latest versions of our software products, Quantum VS and Vecta. However, our customers remain cautious about the strength of the recovery generally and we are seeing some downwards pressure on pricing which will partially offset the effect of any increase in volume.

Our contracted recurring revenues remain one of our principal strengths. These relate mainly to annual software licences and hosting fees and have been very resilient during the recession representing 81% of turnover during the period under review (2009: 74%). The visibility of these revenues, which arise under contracts of up to 5 years duration, allows us to manage the business with some certainty.

All of the Group's software products can be delivered either using a traditional licence model or through the Group's hosting centre. We have continued to see the number of customers electing to host their applications grow. We now have 86 hosted customers (2009: 77) representing 27% of our revenues (2009: 22%).

We remain committed to the continued enhancement of our software products. R & D expenditure during the period was £465,000 (£1.0 million in the full year to 30 September 2009).

Group net assets were £6.8 million at 31 March 2010. Operating cash flows remain strong and cash balances at the period end amounted to £2.5 million (£2.4 million at 30 September 2009).

Your Directors have resolved to pay an interim dividend of 0.713p per ordinary share, the same as last year. The interim dividend will be paid on 2 August 2010 to those shareholders on the register on 2 July 2010. The shares will be ex-dividend on 30 June 2010.

We continue to manage the cost base of the business carefully whilst remaining committed to ensuring that our products remain up to date and relevant to our customers' needs. There have been some signs of improvement in our markets recently but we expect our customers to remain cautious in their attitude towards the recovery for some time yet. We have strengthened our sales and marketing resource over the last 24 months and we are well placed to take advantage of opportunities which arise.

Principal Risks and Uncertainties

The Group operates in a changing economic and technological environment that presents risks, many of which are driven by factors that we cannot control or predict. The key risks and uncertainties facing the Group are as follows:

Wider economic factors

As with most other businesses in the UK, the Group's operations can be adversely affected by a significant downturn in the economy. Restricted availability of finance for businesses and a stagnant or recessionary economy could have an adverse effect on the prospects for EDP, as potential customers, particularly in the builders and timber merchants sectors, may scale back their IT plans in response to funding difficulties and/or reduced prospects for their businesses. We seek to mitigate these risks by ensuring that a significant proportion of the Group's revenues are derived from long-term contracts with our customers, by ensuring that our products appeal to businesses operating in a range of business sectors and by generally seeking payment for our recurring licence fees annually in advance.

Competitive Environment

The Group operates in a competitive environment. New entrants to our marketplace and actions taken by existing competitors could have an impact on our levels of business activity and product pricing in the market generally. We endeavour to provide excellent customer support together with high quality products at a competitive price in order to develop and protect strong customer relationships.

Key personnel

In common with all people based businesses, the success of the Group will, to a significant extent, be dependent on the experience of the Board and senior management, the loss of one or more of whom could have a material adverse effect on the Group. The retention of the services of EDP's key employees cannot be guaranteed. Accordingly we are continually focused on the need to recruit, retain, reward and motivate staff with the appropriate skills.

Technological advances

The markets in which the Group operates are characterised by evolving technology, market practices and industry standards. Competitors could develop superior products or more cost effective techniques which could render the Group's products uncompetitive or less acceptable to the market. We have an ongoing commitment to Research and Development which allows us to identify and adapt to any technological and market changes that do occur thereby ensuring that our products continue to meet the demands of our customers.

Systems and networks

The Group's business operations rely significantly on the efficient and uninterrupted operation of its information technology systems and networks. Any such damage or interruption, whether caused externally or through some malicious incident, could have a material adverse effect on the delivery of the Group's products and services or lead to the loss of proprietary information. The Group continually reviews and tests security of internal systems and networks and has developed recovery plans in the event of systems disruption. Where reliance is placed upon externally provided systems and networks, the Group undertakes regular performance ability reviews and ensures that contracts provide for an appropriate level of service maintenance.

Responsibility Statement of the Directors in respect of the half-yearly Financial Report

We confirm that to the best of our knowledge:

• the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union.

• the half-yearly management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

By order of the Board

J M Storey

Secretary

27 May 2010

The Directors who all served throughout the period are: