Electronic Data Processing : Interim Results - 6 months to 31 March 2016

2 June 2016

Electronic Data Processing PLC (EDP) Half-year results - 6 months to 31 March 2016EDP is an IT solution provider to the UK wholesale distribution industry and a supplier of Sales Intelligence software solutions more widely.Financial Highlights

• Turnover £2.51 million (2015: £2.52 million)
• Adjusted operating profit increased by 19% to £240,000 (2015: £202,000), resulting in an operating margin of 9.5% (2015: 8%)
• Hosting revenues represent 58% of total revenues (2015: 50%)
• Contracted recurring revenues represent 81% of total revenues (2015: 80%)
• R&D expenditure amounted to £500,000 in first half (2015: £540,000)
• Strong, debt-free balance sheet with total cash balances and short-term investments of

• £5.4 million

• Interim dividend of 2p per share, the same as last year, returns £252,000 to shareholders
• Recently announced strategic review, which is at an early stage, is continuing. We will report conclusions to shareholders in due course

Sir Michael Heller, Chairman of EDP, said:

"Whilst we expect trading conditions to remain competitive, with our ongoing investment in our key products and robust business model, we remain confident about the outlook for the remainder of the year."

-Ends-

For further information please contact:

Julian Wassell	James Storey	Toby Mountford
Chief Executive	Finance Director	Citigate Dewe Rogerson
0114 262 2010	0114 2622010	020 7638 9571 07710 356611

www.edp.co.uk

Chairman's StatementTurnover for the half-year ended 31 March 2016 at £2.51 million was broadly comparable with the same period last year (2015: £2.52 million). Our adjusted operating profit (which excludes one-off costs and non-cash IFRS adjustments) increased by 19% to £240,000 (2015: £202,000). This represents an operating margin of 9.5% compared with 8% in the prior period.

Our statutory pre-tax profit for the six months was £116,000 (2015: £179,000). However, this was after an exceptional charge of £98,000 relating to repairs to our surplus property in Milton Keynes. Interest income during the period was £26,000 (2015: £20,000).

The tax charge for the period includes £24,000 of current year taxation together with a deferred tax charge of £18,000, which principally relates to the recalculation of the deferred tax balances at the future rate of corporation tax (18%). Current year taxation represents an effective rate of 21%.

Although trading conditions remain competitive, we have secured a number of new customers for our flag-ship Quantum VS and Vecta products. In the case of Quantum VS, it is pleasing to note continued success in migrating customers from our legacy software applications. We are also seeing good interest in our new Quantum e-business module. We remain committed to increasing the number of customers who receive their software through the hosting service. Hosting offers significant benefits to our customers in terms of data backup and security, business continuity and savings in IT personnel and infrastructure expenditure. During the period hosting revenues represented 58% (2015: 50%) of total revenues.

Contracted recurring revenues, which relate to annual software licences and hosting fees, were a strong 81% of total revenues (2015: 80%).

We remain committed to enhancing our key software products, Quantum VS and Vecta, and expenditure on product R&D during the period amounted to £500,000 (2015: £540,000). The second half of the financial year will see the release of a new mobile app for our Vecta CRM and Business Intelligence product.

We previously reported in the preliminary announcement in December that we had accepted an offer for £1.2 million on our last remaining surplus property in Milton Keynes. The sale is progressing albeit at a much slower pace than originally anticipated. The property is currently let on a short term lease, which, whilst not generating significant rental income, does mitigate £53,000 p.a. of rates. Should the sale complete then we would expect to save a further £35,000 a year of costs in relation to the property. We will of course report any further progress to shareholders in due course.

Group net assets were £4.50 million at 31 March 2016 compared with £4.96 million at the end of the previous financial year. This partly reflects an increase of £217,000, net of deferred tax, in the liability under IAS19 in the Group's defined benefit pension scheme. The IAS19 liability net of deferred tax amounts to £2.03 million. This increase is due principally to a further reduction in the interest rate used to discount the value of the scheme's liabilities under IAS 19. As we have previously reported, the last full actuarial valuation of the scheme as at 31 July 2013 showed a small surplus; the difference in valuations arises principally because under IAS19 the asset value does not take into account the guaranteed annuity rates which have been secured and which are included within the ongoing funding valuation. The scheme is closed to further service accrual and we are not currently required to make any ongoing contributions to the scheme. A full triennial review of the scheme will be carried

out as at 31 July this year. Further details relating to the scheme valuation are provided in note 4 to this interim statement.

Cash and short-term investments (which represent fixed term deposits with maturity in excess of three months) amount to £5.36 million (2015: £5.22 million).

Your Directors have resolved to pay an interim dividend of 2p per share, the same as last year. Last year's total dividend was 5p per share which based on the share price at the date of this report represents a yield of 7.0%. The interim dividend will be paid on 1 August 2016 to those shareholders on the register on 1 July 2016. The shares will be ex-dividend on 30 June 2016.

As ever I would like to thank our staff for their hard work and commitment.

We have recently announced that we are carrying out a strategic review and that process, which is in its early stages, is continuing. We will report the conclusions of the review to shareholders in due course.

Whilst we expect trading conditions to remain competitive, with our ongoing investment in our key products and robust business model, we remain confident about the outlook for the remainder of the year.

Sir Michael Heller	1 June 2016
Chairman

Principal Risks and Uncertainties

We operate 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 EDP and the measures taken to mitigate these risks are as follows:Systems and networksRisk

EDP's business operations rely significantly on the efficient and uninterrupted operation of its information technology systems and networks.

Our computer network may be vulnerable to unauthorised access, viruses and other disruptive problems.

Potential impact

Any damage or interruption to EDP's networks, however caused, could have a material adverse effect on the delivery of our products and services.

A party that is able to override security measures could misappropriate proprietary information or cause disruption to our operations.

Mitigation

We continually review and test the security of internal systems and networks and have developed recovery plans in the event of systems disruption. We use a third party to internally and externally scan our network to identify any potential vulnerability.

Where reliance is placed upon externally provided systems and networks we undertake regular performance ability reviews and ensure that contracts provide for an appropriate level of service maintenance.

Product technology advancesRisk

The markets in which EDP operates are characterised by evolving technology, market practices and industry standards.

Potential impact

Competitors could develop superior products or more cost-effective techniques which could render our products uncompetitive or less acceptable to the market. This could result in the loss of new revenue opportunities or the non-renewal of contracts by existing customers.

Mitigation

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.