NAK.L Regulatory News (NAK)

 For release at 0700 on 5th July 2011

Highams Systems Services Group plc (AIM: HSS)

("Highams" or "the Group")

The AIM quoted recruitment consultancy and leading niche provider of technology, business and professional services to the insurance and financial services sectors.

Preliminary Results

for the year ended 31 March 2011

Highlights

Ø Increase in revenue, gross margin and profit

Ø Group revenue at £9m (2010: £7.5m)

Ø Group profit before taxation £303,000 (2010: £131,000)

Ø Profit margins improved to 18 per cent. (2010: 16.8 per cent.)

Ø Earnings per share 0.73p (2010: 0.34p)

Ø Market activity continues to improve

Ø Increase number of contractors on site and permanent placements

Ø Stronger Highams team, both in size and delivery capability

Ø Increase in new clients in specialist areas

Ken Ford, Chairman of Highams, commented:

"I am pleased to report our full year results to 31 March 2011, which have seen an encouraging and sustained increase in revenue, gross margin and profit and the continued turnaround and growth of our business.

The Group's financial performance, along with an improved balance sheet and cash position, now provide Highams with the opportunity to build on its existing strong client base and to move into new specialist areas within the financial services arena."

Enquiries:

Chairman's Statement

Introduction

I am pleased to report our full year results to 31 March 2011, which have seen an encouraging and sustained increase in revenue, gross margin and profit and the continued turnaround and growth of our business.

The Group's financial performance, along with an improved balance sheet and cash position, now provide Highams with the opportunity to build on its existing strong client base and to move into new specialist areas within the financial services arena.

Contractor numbers have increased steadily over the period and permanent revenue has continued to be strong.

Our strategy is to build in our specialist areas ensuring delivery to our niche market within the insurance and financial services sector. Selective recruitment of new staff into the company has continued from the prior period, enhancing the levels of activity required to meet the needs of our clients and delivery of our specialist services. We believe that the Highams offering and quality of our service is based upon our staff's deep understanding and knowledge of our clients' requirements and their markets.

We are also focussed on re-opening a London presence to be able to offer increased visibility to our City clients and applicants and Highams continues to explore the possibility of growing strategically by acquisition along with assistance from our Nominated Adviser, Seymour Pierce.

Financial Results 

Group revenue increased by 20 per cent. to £9m (2010: £7.5m), primarily reflecting an increase in the number of contractors working on client sites during the year.

Gross profit improved by 29 per cent. to £1.63m (2010: £1.26m), with profit margins increased again to 18 per cent (2010: 16.8 per cent).

Group profit before taxation increased substantially by 131 per cent. to £303,000 (2010: £131,000). The Directors are not recommending the payment of a final dividend for the year to 31 March 2011 (2010: nil), but a resumption in future dividend payments will be kept under review.

Executives and Staff

We remain a strong team of very knowledgeable long serving staff and we look forward to continuing to build Highams. I would like to acknowledge the loyalty and commitment of all the staff to the group and am extremely grateful for their efforts. Again I extend a very warm welcome to all new members of the team and I look forward to their development and the future success of Highams.

Outlook

I am pleased by the substantial progress seen during the year and the considerable achievement by all at Highams. We look forward to continuing this progress over the coming financial year.

Consolidated income statement

For the year ended 31 March 2011

Profit per share 

All of the above relate to continuing operations.

Consolidated statement of comprehensive income

For the year ended 31 March 2011

Consolidated balance sheet

At 31 March 2011

Company number 1700310

Consolidated statement of changes in equity

As at 31 March 2011

Consolidated statement of cash flows

For the year ended 31 March 2011

1. Profit per share

The weighted average number of shares excludes 183,953 (2010: 183,953) shares held by the Employee Share Benefit Trust.

2. The financial information in this preliminary announcement does not constitute the Group's statutory accounts for the years ended 31 March 2011 or 2010 as defined in section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2010 have been delivered to the Registrar of Companies and those for the year ended 31 March 2011 will be delivered following the Group's annual general meeting. The auditors have reported on those accounts, their reports were unqualified and did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their reports. Their report for the year ended 31 March 2011 or 2010 did not contain statements under s498 (2) or (3) of the Companies Act 2006.

3. Copies of the statutory accounts for the year ended 31 March 2011 will be posted to all shareholders. Additional copies will be available from the Company Secretary, Highams Systems Services Group plc, Quadrant House, 33/45 Croydon Road, Caterham, Surrey, CR3 6PB and will be available to download from the investor relations section on the Company's website www.highams.com