Chairman's statement

The Chairman read out the following statement at the start of the AGM today:

Following a year in which the DRS Group achieved record sales, I am pleased to confirm that 2007 quarter one sales are similar to the same period last year. DRS Data Services Limited sales are 4% down on the previous year, however, an increase in Peladon’s comparable sales of 35% plus the inclusion of January’s results in the Group figures this year, offsets the movement in sales in DRS Data Services Limited.

2007 quarter two sales are dominated by the Scottish election in which DRS Data Services Limited was contracted to count the votes for the entire Scottish election. Overall, the e-Counting solution provided by DRS worked well and all the counts were delivered successfully in a fraction of the time that a manual count would have taken and with a level of accuracy that could not have been achieved by hand counting. The high number of spoilt ballot papers arose from circumstances outside of DRS’ control and did not arise as a consequence of the use of e-Counting.

As a result of strong trading activity in the first quarter coupled with the additional election business in the second quarter, sales for the first half year will be in excess of £12m (2006: £9m).  The first half year Group profit before tax is expected to be significantly higher than for the same period in 2006.

Final preparations are being made for the AQA summer series examination marking work which is due to commence in the next few days and involves handling increased script volumes to last year.  This revenue will be recognised in the second half of the year.

In keeping with previous years’ seasonality trends, business expectations for the second half of this year are similar to that of last year, both in respect of sales and profitability.  The board is confident about the Group’s prospects and looks forward to achieving an annual turnover in excess of £20m for the first time.

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For further information please contact, Mark Tebbutt, Company Secretary, on 01908 666088

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