Final Results

Knowledge Technology Solutions PLC 09 October 2002 9 October 2002 - Embargoed till 7:00am Knowledge Technology Solutions PLC announces preliminary results Knowledge Technology Solutions PLC, the independent provider of real-time data solutions for financial professionals, announces its results for the year ended 30 June 2002. Financial and business highlights: • Completion of QuoteTerminalTM, the UK-only version of MarketTerminalTM product and launch • Operating expenses remain tightly controlled • Strong balance sheet with no debt • Conservative treatment of technology expenditure with all costs written off as incurred • Starting to establish base of renewable revenues from MarketTerminalTM affirming importance of focus on this core product • During the year Knowledge Technology Solutions formed a partnership with CNBC to offer its live European television content on MarketTerminalTM • Appointment of Seymour Pierce as new broker and nominated adviser Commenting on the results, Dr Marc Pinter-Krainer, Chief Executive, said: 'The Company completed the development of its MarketTerminalTM platform last year and, using this platform, we successfully launched QuoteTerminalTM, the brand name for our UK-only version of MarketTerminal, towards the beginning of the second half. Our ability to execute and support much larger enterprise-wide contracts has been progressively developed over the past year and we are confident that the current year will see us close a number of these contracts. As we enter a new financial year, I am firmly convinced that the launch of our significantly broader international product will provide the platform for the transformation of the Company. There are still challenges ahead. However, by seizing on the significant opportunities that exist in our marketplace, I believe we can materially enhance the future performance of Knowledge Technology Solutions.' For press enquiries or further information, please contact: Marc Pinter-Krainer Knowledge Technology Solutions PLC 020 8795 2700 Kirsty Campbell Seymour Pierce Ltd. 020 7648 8700 Neil Boom/Mallika Basu Gresham PR Ltd. 020 7404 9000 Professional users have the opportunity to review QuoteTerminalTM by telephoning 020 8902 1400 and requesting a free trial. Knowledge Technology Solutions PLC Chief Executive's Statement As we enter our third year as a quoted company, I am delighted to be able to report a year of continued progress for Knowledge Technology Solutions PLC (the 'Company'). This encouraging performance has been delivered against a background of poor market conditions, but I am pleased that we have been able to maintain our strategy for growth and have developed our technology platform to deliver world class solutions to an ever larger client base, whilst at the same time moving towards sustainable profitability. Starting to establish renewable revenues We continued to invest in and develop our MarketTerminalTM product, constantly enhancing the rich functionality of our service and striving at all times to deliver the highest standards of customer service and ongoing support. During the year in excess of £250,000 was invested in this platform and we remain confident that this expenditure will improve returns to shareholders over the coming years. As in previous years, the value of our software is not reflected in the Balance Sheet as the costs relating to its development continue to be written off as incurred. Most importantly, the Company completed the development of its MarketTerminalTM platform and, using this platform, we successfully launched QuoteTerminalTM, the brand name for our UK-only version of MarketTerminalTM, towards the beginning of the second half. Customer interest in this product among our target market of first and second tier financial institutions has been strong. Our ability to execute and support much larger enterprise-wide contracts has been progressively developed over the past year and we are confident that the current year will see us close a number of these contracts. The MarketTerminalTM model is based around developing a business with a high level of renewable revenues, a low breakeven hurdle point and a marginal cost to service each new customer. It is important to note that our conservative accounting policies mean that, while sales and marketing expenses are written off as incurred, cash received from customers is not recognised as revenue immediately but spread over the full term of the subscription. The MarketTerminalTM business continued to make progress throughout the year with a number of customers now live. Results for the year reflect just a few months of revenue from early adopters consistent with our conservative income recognition. The current year will see a full twelve month contribution from existing contracts, established customers increasing screen counts and new customers. Strategic Development The capability of MarketTerminalTM (encompassing QuoteTerminalTM) has to date been confined to UK market data. In the near term, our committed policy has been to make an incremental investment in extending the MarketTerminalTM product's capability globally with the addition of international data. The Board and also our tier one customers and shareholders consider this is the key factor if we are to realise our growth aspirations. Our in-depth experience of operating the UK-only service has facilitated the integration of international markets data, initially including Nasdaq, NYSE, Euronext and Frankfurt, into the MarketTerminalTM service during the past few months to address the needs of this much bigger and less competitive market. The first trials for the international product are scheduled to commence in November 2002. In the wake of the stock market's continuing poor performance, with pressure faced by potential customers to reduce fixed costs and to maximise their return on investment through improved technology, we believe that there is a renewed consideration to switch to more cost-effective market data service suppliers. On the back of an open evaluation process with prospective customers, including first tier institutions, MarketTerminalTM has already been designed to be effective and flexible without the need for expensive proprietary hardware. The thin client ASP ('application service provision') structure of our technology enables it to be priced transparently and gives us a genuine competitive advantage against less flexible rival vendors, whose legacy technologies are based around expensive networks. The portability of MarketTerminalTM and our ability to deliver at a cost- effective price to the international market will now further strengthen our proposition. We expect to announce the appointment of a Head of Sales in due course and this will enable us to strengthen our ability to win new contracts significantly. Sharepages.com Limited The Company continues to operate the Sharepages financial information website profitably. This free financial information website is focused on the information and data needs of UK retail investors. The site has an established presence and requires little additional dedicated resource to operate it. Although Sharepages.com is a distinctly non-core business, we are optimistic about the future opportunities for it to grow revenues once stock markets recover and there is a resurgence of investor interest. Financial Review We have a sound balance sheet with no borrowings and a product capable of excellent cash generation. Operating expenses remain tightly controlled. Following initial sales of the MarketTerminalTM product, high quality renewable revenues from this side of the business started to flow during 2002. The financial year just ended also saw us make continued investment in MarketTerminalTM, in particular as we extended this product's capability globally with the addition of international data to ensure our longer-term goals are achieved. The Group produced a net loss after tax of £450,641 consistent with managing this major investment programme. New Shareholders Since moving to AIM in December 2000, Knowledge Technology Solutions has become increasingly aware of strong interest shown by institutional investors, especially for a company of our small size. Last year we were pleased to announce that two of the first tier institutions who trialled the MarketTerminalTM product during its development, HSBC Investment Bank plc and Dresdner RCM Global Investors (UK) Ltd, subsequently became significant shareholders. We are pleased to welcome all shareholders who have acquired shares during the course of the past year, both institutional and private clients. Supply and demand for shares has been regularly out of balance and the average size of share transactions has been very small, which makes it difficult for new shareholders to buy in a reasonable quantity. We were recently approached by Octopus Asset Management who indicated a desire to invest. As an initial phase of this endeavour, we have agreed to issue 2,650,000 new Ordinary Shares to Octopus Asset Management at 4p per share following the Annual General Meeting of the Company to be held on 15 November 2002. Following their recent appointment, we also look forward to working together with Seymour Pierce, our new stockbroker and nominated adviser. Outlook Finally, I would like to thank all members of staff for their support in implementing the Company's strategy and creating the necessary momentum that sets the business on a positive course for the future. As we enter a new financial year, I am firmly convinced that the launch of our significantly broader international product will provide the platform for the transformation of the Company. There are still challenges ahead. However, by seizing on the significant opportunities that exist in our marketplace, I believe we can materially enhance the future performance of your Company. Dr Marc Pinter-Krainer Chief Executive 8 October 2002 Knowledge Technology Solutions PLC Consolidated Profit and Loss Account Year ended 30 June 2002 Period Note Year ended 24 August 2000 30 June 2002 to 30 June 2001 £ £ Turnover 1 76,539 150,583 Distribution costs (184,532) (54,531) Administrative costs (487,532) (295,242) (595,525) (199,190) Other operating income 125,000 - Operating loss (470,525) (199,190) Interest receivable 19,884 5,329 Loss on ordinary activities before taxation (450,641) (193,861) Taxation 2 - - Loss on ordinary activities after taxation (450,641) (193,861) Dividends 3 - - Retained loss for the year (450,641) (193,861) Loss per share 4 (0.57)p (0.38)p Diluted loss per share 4 (0.57)p (0.38)p All of the results relate to continuing operations. There are no recognised gains or losses other than the loss for the year. In respect of the results for the period ended 30 June 2001 cost of sales in the sum of £54,531 have been reclassified as distribution costs as in the opinion of the directors this gives a fairer reflection of the results for the year. This has no impact on reported loss. Knowledge Technology Solutions PLC Consolidated Balance Sheet As at 30 June 2002 Group Group 2002 2001 £ £ FIXED ASSETS Tangible assets 36,788 16,601 Investments - - 36,788 16,601 CURRENT ASSETS Debtors 120,808 61,081 Cash at bank and in hand 366,074 440,946 486,882 502,027 CREDITORS Amounts falling due within one year (82,168) (83,549) NET CURRENT ASSETS 404,714 418,478 NET ASSETS 441,502 435,079 CAPITAL AND RESERVES Called up share capital 81,606 70,342 Share premium account 1,004,398 558,598 Profit and loss account (644,502) (193,861) Equity shareholders' funds 441,502 435,079 Approved on behalf of the board on 8 October 2002 by: Marc Pinter-Krainer Michael Levy Chief Executive Group Finance Director Knowledge Technology Solutions PLC Consolidated Cash Flow Statement Year ended 30 June 2002 Period Year ended 24 August 2000 30 June 2002 to 30 June 2001 £ £ Net cash outflow from operating activities (480,980) (169,302) Returns on investments and servicing of finance Interest received 19,884 5,329 Net cash inflow from returns on investments and servicing of finance 19,884 5,329 Capital expenditure and financial investment Purchase of tangible fixed assets (30,038) (2,462) Net cash outflow from capital expenditure and financial investment (30,038) (2,462) Acquisitions and disposals Net cash acquired with subsidiary undertakings - 57,737 Net cash inflow from acquisitions and disposals - 57,737 Net cash outflow before financing (491,134) (108,698) Financing Issue of share capital 434,755 796,906 Expenses paid in connection with share issues (18,493) (247,262) Net cash (outflow)/inflow from financing (416,262) 549,644 (Decrease)/increase in cash in the year (74,872) 440,946 All cash flows relate to continuing operations. Notes to the Preliminary Statement 1 Turnover Turnover is attributable to the sale of real-time data and analysis services, together with advertising and sponsorship revenue. 2 Taxation on loss on ordinary activities As a result of the losses available, no liability to UK corporation tax arose on the ordinary activities for the year ended 30 June 2002. 3 Dividends The Directors do not recommend the payment of a dividend. 4 Loss per ordinary share The loss per ordinary share has been calculated by dividing the loss on ordinary activities after tax attributable to shareholders by 78,588,504 (2001: 50,455,544), being the weighted average number of ordinary shares in issue during the year, which carry the right to receive a dividend. The diluted loss per ordinary share has been calculated by dividing the loss on ordinary activities after tax attributable to shareholders by 79,506,110 (2001: 50,455,544), being the theoretical ordinary shares that would have been issued, based on average market value if all outstanding options and warrants were exercised. 5 Post balance sheet events Subsequent to the end of the year, the company has conditionally agreed to allot 2,650,000 ordinary shares at 4 pence per share with an institutional investor. 6 Annual report and accounts The foregoing financial information does not amount to full accounts within the meaning of Section 240 of the Companies Act 1985 and has not been reported on but has been agreed with the Company's auditors. The Annual Report and Accounts will be filed at Companies House following the Annual General Meeting and will be posted to shareholders shortly. Copies will be available from the Company Secretary at Wembley Point, 1 Harrow Road, Wembley, Middlesex HA9 6DE. 7 Annual General Meeting The AGM will be held at Wembley Point, 1 Harrow Road, Wembley, Middlesex HA9 6DE, on Friday 15 November 2002 at 2.00 p.m. END This information is provided by RNS The company news service from the London Stock Exchange

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