eg Solutions PLC Regulatory News (EGS)

eg solutions plc ("eg" or "the Company"; LSE-AIM: EGS), the back office optimisation software company, announces its unaudited results for the year ended 31 January 2013.

Financial Summary:

Key points:

·; Strategic partnership and re-seller agreement with Aspect Software signed 4 February 2013

·; £1.25m investment by Aspect for 10.69% equity holding in eg received 8 February 2013

·; Loss before tax of £458,000 after cost of pilot projects for delayed roll-outs

·; High level of R&D investment maintained with product functionality significantly enhanced

Commenting on current trading and outlook, Rodney Baker-Bates, non-executive Chairman stated:

"Following the Aspect deal, the first half of the current year will benefit from the implementation of delayed roll-outs. Our order pipeline is also benefiting from growing demand as the back office optimisation market continues to develop.

Overall, we are anticipating an improving financial performance for the current year."

CONTACTS

About eg solutions plc

eg solutions plc is a global back office optimisation software company. Our software provides historic, real-time and predictive Operational MI. When implemented with our training programme for managers and team leaders to use this intelligence, we guarantee improvements in operational results in short timescales.

The Company, which is listed on the Alternative Investment Market ('AIM') of the London Stock Exchange, is committed to customer satisfaction and the ongoing development of its operations management solutions.

CHAIRMAN'S STATEMENT

Introduction

eg starts the current financial year in an excellent position to achieve strong, profitable growth and become a significant player in the back office optimisation market. The Company operates in a growing market , with financial institutions around the world continuing their drive to improve operational efficiency, customer service, cost control and risk management. Our technology and products are recognised as market leading in the industry.

In a move which will transform eg's prospects, on 4 February 2013 we announced a 3-year strategic partnership and re-seller agreement with Aspect Software Inc. ("Aspect"), the global provider of customer contact and enterprise workforce optimisation solutions. Aspect has invested £1.25 million of new equity in eg and is now a 10.69 per cent shareholder in the Company. Aspect has the right to invest further in eg through warrants to subscribe for up to 400,000 new eg ordinary shares, exerciseable over the next two years.

Despite the positive anticipated impact of the 3-year strategic partnership with Aspect we are nevertheless disappointed that the financial performance for the year ended 31 January 2013 was significantly below market expectations. This was because, having successfully completed pilot projects on behalf of new clients secured at the start of the year, roll-outs were delayed pending completion of the Aspect partnership. As a result anticipated revenue from the roll-outs will now fall into the current year.

Financial results

Total revenue for the year was £4.95 million (2011/12: £4.71 million). Software licences, maintenance and software services contributed 69 per cent (2011/12: 82 per cent) of total revenue, with the balance coming from implementation and training services.

Overall gross margin for the year was 49.7 per cent (2011/12: 62.8 per cent), reflecting the cost of pilot schemes and delayed roll-outs. This led to a loss before tax for the year of £0.46 million (2011/12 profit before tax: £0.15 million).

The loss after tax was £0.30 million (2011/12 profit after tax: £0.13 million).

At 12 March 2013, net cash was £1.25 million. At 31 January 2013, following investment in research and development of £0.74million (2011/12: £0.86 million) and after the costs associated with pilot schemes and delayed roll-outs, net debt was £0.30 million (2011/12: net cash: £0.06 million).

The Board has decided not to recommend the payment of a dividend.

Board Developments

Under the terms of its agreement with eg, Aspect is entitled to appoint a Non-Executive Director to the Board of the Company and a further announcement will be made in due course.

Current trading and outlook

I am optimistic that the first half of the current year will benefit from the implementation of the delayed roll-outs. Our order pipeline is also benefiting from growing demand as the back office optimisation market continues to develop. The Aspect deal gives eg the opportunity to move forward with our global ambitions.

Overall, we anticipate an improving financial performance for the current year.

Rodney Baker-Bates

Non-executive Chairman

20 March 2013

CHIEF EXECUTIVE OFFICER'S STATEMENT

Overview

During the year ended 31 January 2013 eg enhanced its back office optimisation software product with additional functionality providing a more complete solution than competing offerings. Having completed the re-engineering of the eg operational intelligence® software suite, we were able to target global enterprise businesses and were successful in winning new customers.

eg is operating in a favourable business environment with financial institutions continuing to focus on minimising back office costs and improving operational control and there is increasing evidence from workforce management vendors of the back office optimisation market gaining traction.

Following an encouraging first half, it became apparent that eg would benefit from a partnership with a major player, particularly in winning and executing projects with global enterprise customers. This led to a strategic partnership and re-seller agreement with Aspect being signed just after the year end.

Whilst discussions with Aspect were underway, certain roll-outs were delayed, resulting in anticipated revenues from these roll-outs falling into the current financial year. Consequently whilstthere was a negative impact on last year's revenues and profitability, the upside from the Aspect deal is considered to be substantial with the impact starting in the current year.

Through our relationship with Aspect in addition to strengthening our capabilities for existing customers, we can accelerate the expansion of our customer base and geographic reach. Based on experience since completion of the Aspect deal we are confident that we will see significant benefits, including further contracts with our global enterprise clients, as well as targeting new enterprise customers and new geographic markets.

Strategic partnership & re-seller agreement with Aspect

On 4 February 2013 we announced a 3-year strategic partnership and re-seller agreement with Aspect, the global provider of customer contact and enterprise workforce optimisation solutions. Aspect has subscribed for 1,712,392 new eg ordinary shares at a price of 73 pence each, giving Aspect a 10.69 per cent equity stake in the Company.

In addition, Aspect has been granted a conditional right to subscribe for up to 400,000 Ordinary Shares ("Warrants), such Warrants to be determined by the achievement of annual gross revenue targets ("Targets") for the 395 days from the date of the Agreement ("Year 1") and the 12 months following Year 1 ("Year 2"). Subject to achieving the Targets, Aspect shall be granted Warrants over up to 200,000 Ordinary Shares for Year 1 and up to a further 200,000 Ordinary Shares for Year 2. Warrants shall be exercisable at a price of 79 pence per share. Once granted Warrants may be exercised within two years of Year 1 or Year 2, as appropriate.

Aspect has exclusive distribution rights for the eg operational intelligence® software suite in Asia Pacific and the Americas and is working jointly with eg in Europe, the Middle East and Africa. The Company's eg operational intelligence® software is being integrated with Aspect's eWorkforce Management and Performance Management products to provide a single back office optimisation solution. The combined product set will be available in the summer of 2013.

Aspect has allocated resources in sales, sales support and delivery, as well as providing 24x7 international support for eg's global customers. In addition to exclusivity for eg operational intelligence®, the Company is providing training and sales support, including awareness training for Aspect's entire sales team and specialist training and sales support for its back office optimisation team.

Operational review

A major focus of management and financial resources during the year was on pilot projects following significant new client wins, including global enterprises with the potential to transform eg's financial performance. The Company completed a number of pilot projects which achieved more than the anticipated benefit targets for clients. As a result of the strategic partnership and re-seller agreement being signed after the year end, the anticipated revenues from these roll-outs will fall into the current year.

The investment to support these pilot projects during the year is reflected in a short-term reduction in margins and profitability. It also led to the deferral of certain business development activities, notably in South Africa, where revenues for the period were below the level achieved last year.

New business won for the eg operational intelligence® software suite during the period includes:

·; BGL Group, a new customer, for a total of 1,000 back office and call centre users (announced in July 2012);

·; a £340,000 contract from an existing enterprise client;

·; two pilot projects from an existing global financial services client; and

·; a roll-out for another existing global financial services client following a successful pilot of the Company's integrated software suite.

Technology and product development remains critical to our continued success and we invested £0.74 million in this area during the year. These developments have been client-led, with key customers actively involved in design and testing and are based on our re-engineered product platform completed in 2011. They include:

·; Major enhancements to our strategic planning and forecasting solution, eg forecasting™.  These include improved modeling features enabling planners to model staff and resource forecasts based on complex business scenarios, and the continued monitoring and comparison of actual staffing needs versus forecast plans.

·; New releases of our real time work management product eg work manager®, with enhancements to the real-time capture of task times, staff attendance management and reporting, case management and search, and work allocation.

·; The launch of a new eg work manager® email integration product, enabling the automatic capture of inbound emails as a work source directly into eg work manager® based on user defined rules, further extending our multi-channel transaction capture capability.

·; Improvements to eg work manager® file import, extending both the type of data that can be imported and the ability to handle complex data feeds from work sources using easy to configure script based rules. These improvements significantly simplify the system setup and maintenance for large scale deployments, as well as extending the range of transaction data sources that can be directly captured into eg work manager®.

In August 2012 eg also entered into an OEM and partner agreement with Cicero Inc to provide the data capture functionality for the eg operational intelligence® software suite. The Cicero software replaced the failed component previously provided by another party. It has successfully been integrated into the eg software suite and is delivering the functionality required.

In July 2012 eg won the Technology Provider Award at the Insider Midlands International Trade Awards. The award recognised the international growth eg has achieved over the past few years, which today accounts for approximately a third of its business.

People

In a move to tackle the skills shortage in the IT industry as well as to attract new talent into the business, in February 2013 eg joined forces with IT services company DorISCentral (DorIS) to discover and mentor graduates from all over the UK. eg has contracted 5 graduates for an initial six months during which DorIS will support and train them in conjunction with the UK National Skills Academy. Each graduate will be mentored by experienced IT professional service and project managers with proven track records. DorIS and eg will continue to work together to source graduate level talent, giving eg nationwide access to young IT talent and much needed development opportunities for these young people.

The whole eg team worked extremely hard during the year to deliver excellent project results for our customers throughout the world and I would like to thank them for their contribution and continuing commitment.

Elizabeth Gooch

Chief Executive Officer

20 March 2013

UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 JANUARY 2013

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 JANUARY 2013

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 JANUARY 2013

UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

The share based payment reserve is a reserve to recognise those amounts in retained earnings in respect of share based payments.

The own shares held reserve shows movements in the shares held in trust by the eg solutions Employee Benefit Trust.

Retained earnings include the accumulated profits and losses arising from the consolidated statement of comprehensive income excluding foreign exchange differences.

The foreign exchange reserve comprises all exchange differences arising from the translation of the financial statements of overseas operations.

Other reserves represent the equity component of the convertible loan notes.Notes:

1. Basis of Preparation

The accounts for the year ended 31 January 2013 are in the final stages of completion.

The information in this preliminary results announcement has been prepared on the basis of the accounting policies which will be set out in the Group accounts for the year ended 31 January 2013 and does not constitute statutory accounts within the meaning of Section 434 of the Companies Act 2006. Full accounts of eg solutions plc for the year ended 31 January 2012, which were prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, have been reported on by the Company's auditors and delivered to the Registrar of Companies. The report of the auditors was unqualified and did not contain statements under Section 498(2) or (3) of the Companies Act 2006.

The preliminary results announcement for the year ended 31 January 2013 was approved by the Board of Directors on 20 March 2013.

2. Revenue

3. Profit from operations

4. Earnings per ordinary share

EPS has been calculated using the following methodology:

Basic earnings per share are calculated by dividing the earnings attributable to ordinary shareholders by the number of weighted average ordinary shares during the period. The number of shares excludes shares held by an Employee Benefit Trust.

For diluted earnings per share, the number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. These represent share options granted to employees and, in 2012, the 5% Convertible Loan Notes.

When the Basic EPS is a negative value, the effects of anti-dilutive potential ordinary shares are ignored in calculating diluted EPS.

5. Reconciliation of group profit before tax to net cash generated by operations

Copies of this announcement are available on the Company's website: www.eguk.co.uk. The Annual Report & Accounts and Notice of Annual General Meeting will be sent to shareholders in due course and will also be available on the Company's website from the date of posting.