Pre-Close Business Update

microgen

Information Management Solutions

www.microgen.co.uk

19 December 2002

                           Pre-Close Business Update                           

                       Results In-Line With Expectations                       

In the current market environment, the Board of Microgen plc, the information
management solutions company, believes that it would be helpful to provide a
pre-close period business update on performance for the year ending 31 December
2002. The preliminary results for the Group will be issued in mid-February.

Overall the Board anticipates that:

  * Revenue will be broadly in-line with expectations. The Group's e-services
    business has maintained its growth rate whilst, consistent with the market,
    licence and consultancy revenues have come under pressure.
   
  * Operating profit before interest, goodwill and exceptional items is
    anticipated to be in line with expectations, producing over 70% increase on
    the 2001 result. This strong performance has been achieved through
    stringent cost management and the Group's acquisition integration strategy.
   
  * Gross cash is anticipated to exceed £8 million and net free cash to exceed
    £6 million at 31 December 2002, after spending £1.93 million on the buy
    back of 9.8% of the issued share capital of the Group and £0.56 million on
    the acquisition of Wishstream Ltd during the second half of the year.
   
During 2002, Microgen completed two acquisitions, OST Business Rules Ltd and
Wishstream Ltd. The strategic benefits anticipated at the time of each
acquisition are being achieved and both of these businesses have now been fully
and successfully integrated into the Group, with substantial reductions
achieved in the cost base of both businesses. As a result of integrating these
acquisitions, an exceptional charge of approximately £1.5 million will be taken
in this year, primarily due to a provision for excess property.

While the Group has experienced the impact of the slowdown in the IT sector,
the Board's strong financial management continues to prove effective in
maintaining both profitability and positive operating cash flow. In planning
for 2003, the Board has done so on the assumption that market conditions will
not improve in the year ahead. However the actions taken in integrating the
acquisitions have positioned the Group appropriately for 2003.

In this difficult market environment, during which two acquisitions have been
successfully integrated, the Board is pleased with the performance of the Group
this year and look forward to reporting results in line with expectations.

Contact :

Martyn Ratcliffe, Executive Chairman

Mike Phillips, Group Finance Director 01753-847123

Giles Sanderson, Financial Dynamics

Ben Way, Financial Dynamics 020-7831-3113

www.microgen.co.uk