ARC International plc: Trading Statement

ARC International plc: Trading Statement 

    LONDON--(BUSINESS WIRE)--Oct. 1, 2002--

                ARC Announces Consolidation of Software
            Engineering Teams and Provides a Trading Update

                  Consolidation of Engineering Teams

ARC International plc, (LSE:ARK), a world leader in semiconductor
and software technology licensing, today announces that it is to
consolidate its software engineering teams to promote synergies in
software product development and reduce the overall cost structure of
the Group.

ARC's engineering facility in Ottawa will close and it is expected
that a portion of the Ottawa-based RTOS and Protocol Software group
will be relocated to Santa Cruz, California, where ARC's Software
Development team is headquartered. The Elstree operations in the UK
and the Nashua, New Hampshire engineering locations will not be
affected.

The transition will begin immediately and ARC expects it to be
completed by January 2003. As a result of these initiatives and a
small number of other redundancies, the Company will take an
exceptional charge in the range of £2.4 million, of which
approximately £1.4 million will be charged to the cash balance. The
charge will cover reduction in the workforce, closure of facilities,
disposal of equipment and goodwill write-offs. Overall, the Company
expects headcount to decrease by approximately 7%.

Today's announcement will neither delay the development of new
products nor affect the support and service provided for ARC's
software customers.

ARC International will be announcing third quarter results for the
period ended 30th September 2002, on Thursday 24th October 2002 at
which time further details will be given.

Mike Gulett, CEO of ARC International commented:

"We believe that our decision to relocate our software engineers
into one facility will improve our ability to provide optimized,
integrated SoC IP solutions, will generate significant cost savings,
and will move us closer towards our goal of reaching profitability."

Trading Update

Due to a 6% adverse impact from exchange rate movements and the
deferral of several deals, the Company expects Group revenues for the
third quarter to be slightly below market expectations. Prior to
currency translation, with virtually all of the sales denominated in
US dollars, the company expects to report sales that are broadly flat
to the prior quarter. 

Management expects to close these deferred deals
during the fourth quarter and is encouraged by the strong forward
pipeline. The company is therefore confident that its financial
performance for the year ended 31 December 2002 will fall within the
current range of published analyst forecasts.

-- ENDS ---

For further information, please contact:
ARC International plc
Mike Gulett, CEO                                  +011 [phone]
Monica Johnson, CFO                               +011 [phone]
Natalie Godfrey, Senior Communications Executive,[phone]

Tulchan Communications
Julie Foster, Consultant                         [phone]
*T

   Short Name: Arc Intl PLC
   Category Code: TST
   Sequence Number: 00000869
   Time of Receipt (offset from UTC): 20021001T065335+0100