Cedar Group Ends Successful Financial Year.

Business/Technology Editors

HAVERHILL, Mass.--(BUSINESS WIRE)--June 16, 2000

The following excerpts come from announcements issued by Cedar Group plc, London, UK, parent company of Cedar Group US, the Haverhill, Massachusetts-based software vendor and application service provider (ASP).

Best known for its suite of financial applications, Cedar Group US now offers a wide range of Oracle-based enterprise business solutions, including fleet, time, and knowledge management and document imaging and workflow.

The Cedar Group plc announcements are available in their entirety on the Cedar Group US web site, www.cedargroupus.com. Cedar Group US is headquartered at 57 Wingate Street, Haverhill, MA 01832, telephone [phone].

SUMMARY OF CEDAR GROUP PLC FINANCIAL RESULTS

Preliminary Results for the year ending March 31, 2000

Revenue 36.3m pound sterling ($54.7m)

(23.0m pound sterling ($34.6m) 1999)

Operating Profit 6.3m pound sterling ($9.5m)

(3.2m pound sterling ($4.8m) 1999)

License revenues increased by 83%

Recurring services revenues increased by 120%

Maintenance revenues increased by 28%

Statement from Mike Harrison, managing director, Cedar Group plc: "It is our intention to be recognized as a successful supplier of software solutions and services that enable our customers to solve enterprisewide business problems."

EXCERPTS FROM CEDAR GROUP PLC CHAIRMAN'S STATEMENT

Accompanying Preliminary Results for the Year Ended March 31, 2000

Brian Wilson, chairman, Cedar Group plc

Cedar Group has achieved considerable success by selling and implementing software that aims to satisfy business problems requiring a system solution spanning the enterprise. It is now well positioned to exploit the enterprise-computing market where an increasing number of companies have recognized a need to build knowledge based business solutions.

This market has been poorly served historically. The Group believes that its investments in product, people, and infrastructure have created the opportunity to build an even more substantial business, initially in both the UK and US, that will significantly increase the value and quality of the Group.

The strong performance throughout the year was a result of increased sales of licenses and related services as well as solid contributions from businesses acquired in the second half. The increased focus on the commercial sectors means that, as well as achieving higher overall contract values and better day rates for the consultancy business, the company as a whole is better balanced in terms of its market focus. A solid and sustainable increase in services and maintenance revenues also means that the company is now generating higher quality and recurring revenues to complement license sales. Appropriate control of expenditure has meant that the Group has generated an operating profit of 6.3m pound sterling ($9.5m) its sales of 36.3m pound sterling ($54.7m)...

Financial Results

The Group's (revenue) of 36.3m pound sterling ($54.7m) (23.0m pound sterling ($34.6m) 1999) was an increase of 58%. License revenues increased by 83%, the recurring services and maintenance revenues increased by 120% and 28% respectively. License revenues now account for 50% of revenues, services and maintenance 47% and other revenues 3%.

Operating profit for the year was 6.3m pound sterling ($9.5m) (before NIC provision of 0.5m pound sterling ($0.8) and amortization of goodwill of 1.0m pound sterling ($1.5m)) (1999: 3.2m pound sterling ($4.8m)), representing continued strong organic growth and a six month contribution from the acquisition of PMPL Limited and Firman Jack Limited. Profit before tax was 4.8m pound sterling ($7.2m)(after taking account of NIC provision) (1999: 2.8m pound sterling ($4.2m)).

Earnings per share of 5.5p ($0.83) compares to last years 5.6p ($0.84) per share after taking account of the National Insurance expense. Without for this expense the Earnings per share would have been 6.3p ($0.95), an increase of 13%...

Cedar Group US

The acquisition of our American distributor is consistent with our geographic strategy to build a solid position in the UK, and through an established US business create a significant presence throughout North America from which the world's largest market for the Group's product can be exploited.

Cedar US now has a critical mass upon which to build. The recently appointed CEO, Tom Rump, has a strong team that is working from four locations to support the distribution activities.

With an existing customer base of 150 organizations, Cedar US is currently developing its market with a multi-product offering leveraging the Group's software products and know-how. A number of new customers have been won, including Siemens Power Corporation who purchased Cedar Businessflow, the Group's integrated document management and business process product. Ultea Leasing Inc. who provide vehicle and equipment leasing and have purchased Cedar Financials integrated with a Cedar partners' leasing product; and ResourcePhoenix Inc...

The partnership established between Recognition Systems plc and Cedar Group also represents an opportunity for accelerated growth into the financial-services sector of the US market.

Given the Group's ambition and geographic strategy, the Directors believe it will be necessary to raise its profile with US investors and customers. Consequently one of the activities undertaken this year will be to evaluate the benefits, and possible timing of a US Listing.

Outlook

Having built a solid business in the UK, the Group intends to extend its distribution capability in both the UK and increasingly the US in pursuit of greater revenue and profit growth. To support this, it will continue to source complementary products and access effective distribution channels. As the market develops, the Group expects to sell and implement an increasing number of integrated solutions, which combines a number of the Group's products.

The market opportunity for the information-technology industry to solve enterprisewide business problems is global and significant over the next decade. Cedar Group is now well positioned to take advantage of this opportunity and in order to capitalize upon it a new division has been created. Advanced Business Solutions will focus on the areas of data warehousing, image, document management and business process and call centers, often integrated with financial systems. The objective is to improve any business's ability to manage its enterprise knowledge base to enhance Customer Relationship Management (CRM), and other key business processes, through traditional and e-Commerce channels.

The market opportunity has been enabled by the introduction of the internet, falling telecommunication prices and the general development of the information-technology sector itself. These conditions create the opportunity for Cedar; within which its ability to deliver applications using the application service provider (ASP) business model will give competitive advantage over larger and less flexible competitors.

As it strives to meet its objectives and longer term ambitions Cedar is dependent upon the continued involvement and development of its people. It is therefore committed to creating opportunities and providing the resources necessary for a successful and rewarding environment.

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