Interim Results

Knowledge Technology Solutions PLC 26 March 2002 26 March 2002 Interim Results for the period ended 31 December 2001 - a period of strong progress Knowledge Technology Solutions plc, the data solutions company which provides real-time MarketTerminal(TM) for financial professionals, today announced its unaudited results for the six months to 31 December 2001. Key points • Completion of MarketTerminal(TM) product and launch • Conservative treatment of technology capital investment with all costs written off as incurred • Group loss before tax of £100,545, reflecting further investment in research and development within our Cognita business • Focus on account management and partnership management • First orders received from first tier customer during start of second half • Strong pipeline of new business prospects for MarketTerminal(TM) confirms importance of focus on this core product and expertise Chief Executive, Marc Pinter-Krainer said: 'Just over twelve months ago the company set an objective of achieving its first sale of MarketTerminal(TM) in 2002. It was with this goal in mind and in order to increase our profile with our customers that the shares were admitted to trading on AIM. With revenues from MarketTerminal(TM) now starting as planned, your company has a longer-term strategy to ensure revenue growth will be achieved year on year, and that this growth will be profitable and sustainable over time.' For further information, please contact: Dr Marc Pinter-Krainer Knowledge Technology Solutions PLC 020 8795 2700 Roland Cornish Beaumont Cornish Limited 020 7628 3396 Neil Boom Gresham PR Ltd. 020 7329 7555 Professional users have the opportunity to review MarketTerminal(TM) by telephoning 020 8902 1400 and requesting a trial. UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2001 Chief Executive's statement Review of operations These results are a reflection of the progress we are continuing to make in focusing on the development of our proprietary technology. This is a key objective as we work towards improving the range and quality of services we offer to our customers and enhancing potential returns for shareholders. This past six-month period has been one of substantial change for your company. The highlight has been the launch of our financial information product, MarketTerminal(TM) , developed by our wholly owned subsidiary company Cognita Technologies. We recently announced our first orders for this product, and are confident that over the next few months we will be able to report an increasing customer base among our target market of first and second tier financial institutions. To exploit our projected growth, we spent much of the past six months continuing our IT implementation and establishing our account management infrastructure. In order to maximise the value of our extensive intellectual property across all platforms (Internet, PC and mobile phone), we are continuing to strengthen our sales and marketing team, to accelerate the rollout of suitable product offerings for different market segments. Given the complexity of the many new initiatives we are launching, it has also been important to focus on partnership management, developing strategic relationships with 'best of breed' content providers, who see the benefits of our technology. MarketTerminal(TM) now offers products to support traders and analysts in the equity markets, allowing personalised and seamless access to a wide range of high-value news and market data, complex analysis and decision support tools. The role of Market Terminal(TM) has always been intended to enable our prospective customers, the financial institutions, to achieve stakeholder value through their own talent, their people. MarketTerminal(TM) has been designed through a transparent evaluation process with these prospective customers, including first tier institutions, to be effective and flexible. The modular ASP structure of our technology enables it to be priced transparently and to compete strongly against our less flexible and more expensive rival vendors, whose legacy technology is often based around expensive dedicated networks. The move to Internet delivery for these vendors is logical but will require rethinking in the way many are organised. Our advanced ASP technology makes MarketTerminal(TM) a highly cost-effective solution. Worsening stock market conditions have increased the pressure faced by our customers to reduce their fixed costs and maximise the return on investment. Their purchasing decisions increasingly demand more sophisticated and intelligent solutions. MarketTerminal(TM) has been designed to address those needs and we remain convinced that MarketTerminal(TM) has a role to play under the combined pressures of the need for improved technology and lower costs. It was particularly encouraging that some of the first tier institutions who trialled the product during its development subsequently became significant shareholders in Knowledge Technologies. They too share our vision in the market opportunity for MarketTerminal(TM). Sharepages.com Limited We are determined to remain focussed on our core area and expertise of Cognita. However, we continue to operate the Sharepages financial information website with little additional dedicated resource. Our use of flexible and innovative technology continues to be our differentiator in the marketplace. As we predicted, a number of competitive sites have been closed, sold or merged and therefore the evolution in the marketplace has moved from being a competitive threat to an opportunity. Traffic is polarised into the hands of just a few key players which may in due course emerge as market leaders once there is a resurgence of investor interest. Sharepages remains one of the main free financial information websites for retail investors in the UK. Financials Operating expenses remain tightly controlled. Revenues for Cognita have now started to flow following initial sales of the MarketTerminal(TM) product, although as anticipated, Cognita was not a contributor to sales in the first half. 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. Going forward we will continue to make further investment in MarketTerminal(TM) this year, in particular as we extend this product's capability globally with the addition of international data to ensure our longer-term goals are achieved. Outlook We look forward to building upon the important work we have done so far and have a positive outlook for the coming year. We have a sound balance sheet with no borrowings, a product capable of excellent cash generation plus the right people in place. With revenues from MarketTerminal(TM) just beginning, your company has a longer-term strategy to ensure that, not only will revenue growth be achieved year on year, but also that our growth will be profitable and sustainable over time. There is still much to be done and we look forward to this challenge. Dr Marc Pinter-Krainer Chief Executive Officer MarketTerminal is a registered trademark of Cognita Technologies Limited KNOWLEDGE TECHNOLOGY SOLUTIONS PLC CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE SIX MONTHS ENDED 31 DECEMBER 2001 Period ended Period 24 August 2000 Period 24 August 2000 31 December 2001 to 31 December 2000 to 30 June 2001 (unaudited) (unaudited) (audited) Notes £ £ £ Turnover 3 49,109 31,102 150,583 Cost of sales (45,786) (26,113) (54,531) Gross profit 3,323 4,989 96,052 Administration expenses (239,831) (69,908) (295,242) (236,508) (64,919) (199,190) Other operating income 4 125,000 - - Operating loss (111,508) (64,919) (199,190) Interest receivable 10,963 591 5,329 Loss on ordinary activities before (100,545) (64,328) (193,861) taxation Taxation on loss on ordinary 5 - - - activities Loss on ordinary activities after (100,545) (64,328) (193,861) taxation Dividends 6 - - - Retained loss (100,545) (64,328) (193,861) Basic earnings per ordinary share 7 (0.13) (0.22) (0.38) Diluted earnings per ordinary share 7 (0.13) (0.22) (0.38) All operations are continuing and there are no recognised gains and losses other than the loss for the period. KNOWLEDGE TECHNOLOGY SOLUTIONS PLC CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2001 As at As at As at 31 December 2001 31 December 2000 30 June 2001 (unaudited) (unaudited) (audited) Notes £ £ £ Fixed assets Tangible fixed assets 39,120 16,664 16,601 Current assets Debtors 218,614 123,502 61,081 Cash at bank and in hand 620,119 430,379 440,946 838,733 553,881 502,027 Creditors: amounts falling due within one (126,113) (130,933) (83,549) year Net current assets 712,620 422,948 418,478 Total assets less current liabilities 751,740 439,612 435,079 Capital and reserves Called up share capital 80,472 65,342 70,342 Share premium account 965,674 438,598 558,598 Profit and loss account (294,406) (64,328) (193,861) Equity shareholders' funds 11 751,740 439,612 435,079 KNOWLEDGE TECHNOLOGY SOLUTIONS PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 DECEMBER 2001 Period ended Period 24 August Period ended 31 December 2001 To 31 December 2000 30 June 2001 (unaudited) (unaudited) (audited) Notes £ £ £ Net cash outflow from operating activities 8 (223,577) (52,591) (169,302) Returns on investment and servicing of finance Interest received 10,963 591 5,329 Net cash inflow from returns on investments and servicing of finance 10,963 591 5,329 Capital expenditure Purchase of tangible fixed assets (25,419) - (2,462) Net cash outflow from capital expenditure (25,419) - (2,462) Acquisitions and disposals Cash acquired with subsidiary - 57,737 57,737 Net cash inflow from acquisitions and disposals - 57,737 57,737 Net cash outflow before financing (238,033) 5,737 (108,698) Financing Issue of ordinary share capital 429,132 671,904 796,906 Share issue costs (11,926) (247,262) (247,262) Net cash inflow from financing 417,206 424,642 549,644 Increase in cash 9 179,173 430,379 440,946 KNOWLEDGE TECHNOLOGY SOLUTIONS PLC NOTES TO THE INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2001 1 Basis of preparation The interim financial information in respect of the six months ended 31 December 2001 is unaudited and has been prepared on the basis of the accounting policies set out in the company's audited accounts for the period ended 30 June 2001. The financial information contained in this statement does not constitute statutory accounts. Statutory accounts for the period ended 30 June 2001 received an unqualified audit report and have been filed with the Registrar of Companies. 2 Continuing activities The company was incorporated on 24 August 2000 and, with the exception of the issue of ordinary shares on incorporation, the group did not trade until the acquisition of the entire issued ordinary share capital of Sharepages.com Limited on 27 October 2000. All of the activities are continuing. 3 Turnover All of the turnover arises in the United Kingdom. 4 Other operating income Period ended Period 24 August 2000 Period 24 August 2000 31 December 2001 to 31 December 2000 to 30 June 2001 £ £ £ Contribution towards Infrastructure 125,000 - - expenditure 5 Taxation As a result of losses available no liability to corporation tax is expected to arise. 6 Dividends The Directors do not recommend the payment of an interim dividend. 7 Earnings per ordinary share The basic earnings per ordinary share has been calculated by dividing the loss on ordinary activities after tax attributable to shareholders by the weighted average number of ordinary shares in issue during the period which carry the right to receive a dividend. The diluted earnings per ordinary share has been calculated as above on the basis of full exercise of warrants. 8 Reconciliation of operating loss to net cash outflow from operating activities Period ended Period 24 August 2000 Period 24 August 2000 31 December 2001 to 31 December 2000 to 30 June 2001 £ £ £ (unaudited) (unaudited) (audited) Operating loss (111,508) (64,919) (199,190) Depreciation charges 2,900 2,849 5,372 Increase in debtors (157,533) (104,524) (42,103) Increase in creditors 42,564 114,003 66,619 Net cash outflow from operating (223,577) (52,591) (169,302) activities 9 Reconciliation of net cash flow to movement of liquid funds Period ended Period 24 August 2000 Period 24 August 2000 31 December 2001 to 31 December 2000 to 30 June 2001 £ £ £ Increase in cash for the period 179,173 430,379 440,946 Net funds at start of period 440,946 - - Net funds at end of period 620,119 430,379 440,946 10 Analysis of net funds As at As at As at 31 December 2001 31 December 2000 30 June 2001 £ £ £ Cash at bank and in hand 620,119 430,379 440,946 11 Reconciliation of movement in shareholders' funds Period ended Period 24 August 2000 Period 24 August 2000 31 December 2001 to 31 December 2000 to 30 June 2001 £ £ £ Loss for the period (100,545) (64,328) (193,861) New share capital issued less costs 417,206 503,940 628,940 Net additions during the period 316,661 439,612 435,079 Opening shareholders' funds 435,079 - - Closing shareholders' funds 751,740 439,612 435,079 This information is provided by RNS The company news service from the London Stock Exchange

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