Trading Statement

Anite Group PLC
22 May 2003


                               ANITE GROUP plc
                        Full Year Trading Statement


Anite Group plc ('Anite' or 'the Group'), the worldwide IT solutions and
services company, today announces a trading update for its financial year ended
30 April 2003; highlights include:


• Underlying profit before tax* at the lower end of expectations (30
  April 2002: £28.3m)

• Net debt of £16m (30 April 2002: £11.5m), in line with expectations
  and after £27.6m paid in earnouts

• Revenues have grown in line with expectations; strong order intake of
  £220m giving an opening order book of £91m for the current year

• 100% of the Group's total potential earnout liabilities renegotiated
  and capped; only one small acquisition made in the financial year and none
  currently planned

• Goodwill impairment and amortisation of £100m (first half £52.7m);
  plus exceptional items and restructuring costs of approx £10m, mainly in Public
  Sector but with no future cash impact; plus a £16m net loss on disposal/closure
  of businesses including a £14m net loss incurred on disposal of GMO (completed 1
  Jan 2003)

• Christopher Humphrey commenced as new Group Finance Director on 3
  February 2003

• Similar trading pattern expected in current year; however first half
  profits will be less than those of the first half of the previous year as a
  result of further restructuring and continued R&D spending


*continuing businesses, before exceptional items and restructuring costs, and
amortisation of goodwill


• The Board has today separately announced that John Hawkins has ceased to
  be a Director and the Chief Executive of the Company with immediate effect.
  A search for a new Chief Executive will commence immediately and David
  Thorpe, a non-executive Director since June 2002, will assume the
  responsibilities of Chief Executive in the interim period.


Commenting on the trading update, Alec Daly, Chairman of Anite, stated:

'The Group has been undergoing a significant period of transition with
associated one off issues in a very challenging market. Profit has been at the
lower end of expectations affected by a significant increase in development
expenditure

'Two major issues, namely the earnout renegotiations and the appointment of a
new finance director, have now been resolved, in January and February 2003,
respectively.


'Markets remain very tough with no immediate signs of improvement. The focus
will be on organic growth, tightly managing the continuing businesses and
working to position the Group for recovery.'


For further information, please contact:                         www.anite.com

Anite Group plc                                                  0118 945 0129
Alec Daly, Chairman
David Thorpe, Interim Chief Executive
Christopher Humphrey, Group Finance Director

Weber Shandwick Square Mile                                     020 7067 0700
Sara Musgrave


Performance for the year ended 30 April 2003


Anite is a worldwide IT solutions and services company. As was indicated at the
time of the interim results in December 2002, the Group has been undergoing a
significant period of transition with associated one off issues in a very
challenging market, and our underlying performance (profit before tax of
continuing businesses, before exceptional items and restructuring costs, and
amortisation of goodwill) was at the lower end of expectations.


Against this background, we have continued to look critically at our cost base,
the structure of the Group and to review the carrying value of our goodwill. As
a result there has been a further impairment charge and other one off costs
during the period. Exceptional items and goodwill impairment and amortisation
for the year as a whole are thus expected to total around £126m (first half:
£53.6m), which will result in an overall loss being incurred.


Two major issues, namely the earnout renegotiations and the appointment of a new
finance director, have now been resolved, in January and February 2003,
respectively.


Current Trading


Whilst markets remain very tough with no immediate signs of improvement, our
focus will be on organic growth, tightly managing the continuing businesses and
working to position the Group for recovery.


In particular we continue to invest in our Public Sector applications,
particularly in housing solutions, and this, coupled with continued investment
in revenues and benefits applications (Pericles), will enable us to exploit the
opportunities available in this sector.


We therefore expect a similar trading pattern this year, with continued
investment in R&D and the costs of continued restructuring impacting margins
especially in Public Sector, most noticeably in the first half. Overall,
however, a greater second half bias in our profitability is anticipated.


Order Book


The Group has seen strong order intake of £220m for the year just ended with a
healthy Group book to bill ratio of 1.0x giving an opening order book of £91m
for the current year; the order intake last year was as follows:


   •Public Sector - an order intake to revenue ratio of 1.2x giving the
    business a strong opening order book of £48m, up 23%
   •Travel - an order intake to revenue ratio of 0.9x. However, First Choice
    have recently renewed their relationship with Anite for a further 3 years
   •Telecoms - an order intake to revenue ratio of 1.0x
   •International (Consultancy) - an order intake to revenue ratio of 0.9x.
    Approximately 25% of consultancy sales were represented by applications
    management and support on longer term contracts







Key financial and operational points for the year as a whole include:

  • At the Group level, organic revenue growth has been achieved but margins
    have been impacted, as expected, by higher R&D costs of approx £10m (2002:
    £6.2m) and tough market conditions, leading to performance at the lower end
    of the range of expectations
  • Restructuring to focus the business continues:
      - during the year - there has been a headcount reduction of c.100
        principally in Public Sector but also in other divisions
      - current year - because of market uncertainties we will continue to
        focus on operating costs in all businesses
  • Earnouts:
      - 100% of the Group's total potential earnout liabilities have now been
        renegotiated and capped, resulting in a reduction in the number of
        shares needing to be issued
      - as a result of the renegotiations, over the three year period ending 30
        April 2005 the actual number of shares in issue is expected to increase 
        by around 14% to 350.1m when compared to the number in issue at the year 
        ended 30 April 2002 of 306.8m. The actual number of shares in issue at 
        30 April 2003 was 340.5m
  • Net debt:
      - there has been strong cash generation and control of working capital
        during the year and the Group is operating comfortably within its
        banking facilities
      - at the year end - net debt (including outstanding loan notes) stood
        at around £16m (30 April 2002: £11.5m), after £27.6m of earnout
        payments.
      - current year - payment in respect of loan notes issued and remaining
        earnouts are expected to be a maximum of £14m based on performance,
        leaving a further maximum of £11.5m in future years
   • Goodwill:
      - the total goodwill charge is expected to be £100m for the year as a
        whole, made up as follows:
            - goodwill amortisation for the year is expected to be £25m (2002:
              £24.3m)
            - goodwill impairment for the year is expected to be:
              > first half - c.£39m was included in the interim results,
                principally Anite Calculus
              > second half - a further £36m principally relating to reviews
                of acquisitions in Public Sector and of Datavance
      -  after the above, total net carrying value of goodwill will be £107m
  •  Exceptional items:
      - the total exceptional items are expected to be £26m of which £16m
        relates to losses and closures of businesses (£14m relating to GMO
        disposal completed 1 Jan 2003)
          - first half: redundancy costs as previously reported
          - second half:
              > write off of Dati option including accumulated associated
                costs
              > write down of own shares held to market value
              > costs of closure and restructuring of businesses including
                redundancy costs, including those previously reported, of £1.6m
              > impairment of product software licences and contracts
  •  Tax:
      - the Group benefited from an exceptional tax credit of approximately
        £2m
      - the tax rate for the year was 24%, which level is expected to be
        maintained for the immediate future
  •  Total R&D costs for the Group:
      - during the year - approx £10m (2002: £6.2m)
      - current year - an increased level of spending is expected

Divisional review

Public Sector
Public Sector has seen a combination of strong organic and acquisition led
revenue growth, although, as indicated at the time of the interim results, its
profitability was significantly impacted during the year by restructuring,
increased R&D and the timing of deliveries.

The integration of the thirteen acquisitions made in the division in recent
years and the requirement to continue to invest in our products has proved a
greater task than was anticipated. We have continued to focus and restructure
its activities and organisation (around its seven principal product streams,
across its three markets focused respectively on local and regional government,
central government and Scotland) whilst maintaining a high level of R&D in order
to complete existing and new generation products in revenues and benefits
(Pericles), and more recently a new housing application (included in the State
of Victoria contract). These applications will enable us to exploit market
opportunities over the coming years.

The current year is therefore expected to see a similar pattern of influences as
last; revenue growth in line with or better than the growth in its markets and a
focus on its cost base, whilst completing product development, with an
inevitable impact on short term margins. Therefore the underlying margins we
have targeted from Public Sector will be only realisable once the investment in
new products has finished and R&D begins to reduce.

Travel
During the year Travel benefited from the integration of the FSS acquisition and
cost savings made and its performance for the year as a whole was satisfactory
and was maintained in the second half. However, market conditions have worsened
into one of the most uncertain periods ever experienced by the travel industry,
and that is inevitably leading to the deferral of major customer projects.

Our long-term managed services contract for MyTravel continues to be implemented
successfully and without interruption and this customer in return continues to
meet all its obligations to us. First Choice, our largest customer, has recently
renewed two contracts for 2 and 3 years respectively, with significant multi
million pound revenues expected over that period.

Telecoms
The core testing business, which represents over 90% of the turnover of this
business, continues to grow its revenues but reported a reduction in its
profitability for the second half and the year as a whole, due to pricing
pressure in a highly competitive market. 2G sales remained very strong and R&D
investment in 3G solutions continued to be high. Calculus, the other part of the
continuing Telecoms' business, returned to profit in the second half.

As part of the Group's restructuring, we have exited from the loss making
Networks products business through a combination of closure and disposal, thus
allowing management to focus on developing the two continuing businesses.
Profitability in the short term is not expected to improve because of continued
sector issues and restructuring against a background of yet to be fulfilled
prospects for 3G.

International
The International business now consists of our overseas consultancy businesses
and our applications management and support operations outside the UK. The
business had a creditable year in the circumstances with the margin of its
continuing business following the disposal of GMO being sustained in double
digits despite a tough trading background. It has continued to benefit from its
application and management support contracts, public sector contracts and
annualised application management contracts in Germany.

The continuing German businesses performed well following the sale completed on
1 January 2003 of our loss making German subsidiary, Anite Consulting GmbH,
previously known as GMO, which was sold to its management team for a nominal
consideration.

The overall market for consultancy services remains very difficult with
continued pressure on day rates, especially in the Netherlands. The division
therefore continues to focus on its utilisation levels and costs, in order to
sustain profitability and generate cash.

Offshore development
We have decided not to proceed, on its original terms, with the acquisition of
Dati, the Latvian based software development group. This resulted in a write off
of the option and associated accumulated costs of £0.9m. However, we continue to
trade with Dati and to utilise their development teams who are involved with a
number of projects in Public Sector and other divisions. We may consider
structuring a more appropriate deal in the future.


                                    - Ends -


The Group intends to announce its preliminary results for the period on Friday,
11 July 2003.



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