Final Results

Flomerics Group PLC
26 February 2001


IMMEDIATE RELEASE                        26 February 2001


                        'Record results for Flomerics'


Flomerics Group PLC, supplier of analysis software to the telecommunications,
semiconductor, and computer industries, and other sectors of the electronics
industries, announces its results for the year ended 31 December 2000.


Key Points


*         Turnover up 35% to £11.8m (1999 : £8.7m). (31% growth at constant
          exchange rates)

*         Operating margins improved from 9.5% to 10.2%

*         Profit Before Tax up 46% -  £1.2m (1999: £0.8m)

*         EPS before amortisation of goodwill up 65% to 33.0p (1999 : 20.0p)

*         Proposed dividend increased by 25% to 5.0p per share (1999 : 4.0p)

*         Flotherm shows impressive 37% growth (32% at constant exchange
          rates)

*         Turnover growth in the Far East of 64% and operations now in China,
          Japan and Singapore.


Commenting on the prospects, David Mann, the Chairman, said:

'As a supplier of virtual-prototyping solutions for two of the most critical
design bottlenecks challenging the electronics industry today, we believe that
Flomerics is faced with major market opportunities.'



For further information please contact:
Flomerics:
David Mann, Chairman                                   020 8941 8810
David Tatchell, Chief Executive
Chris Ogle, Finance Director

Teather and Greenwood:
Rick Thompson                                          020 7426 9073
Jodie Downes                                           020 7426 9011

Buchanan Communications:
Tim Thompson / Nicola Cronk                            020 7466 5000



Chairman's Statement

INCREASED GROWTH AND MARGINS



I am very pleased to report another excellent year of growth for the Company
with turnover up 35% at £11.8 million (1999:£8.7 million), following 26%
growth in 1999. Whilst the Company has benefited from a weaker dollar, at
constant exchange rates the growth was still 31%.



The margin has improved from 9.5% in 1999 to 10.2% in 2000, despite continued
investment in the new areas of the Company's business. Profit before tax has
therefore increased by 46% to £1,182,000 (1999: £807,000).



Earnings per share before amortisation of goodwill increased by 65% to 33.0p
(1999: 20.0p). They benefited in part from the new Research and Development
allowances in the UK, which resulted in a significantly lower tax rate than in
1999 and accounted for 3.4p of this increase.



The Directors propose to pay an increased dividend of 5.0p per share (1999:
4.0p) in respect of the year. Subject to approval by the shareholders, the
dividend will be paid on 7 May 2001 to shareholders on the register at close
of business on 9 March 2001.



IMPRESSIVE PERFORMANCE BY FLOTHERM



In 2000 FLOTHERM accounted for 87% of turnover . FLOTHERM is a simulation
software package which is used to analyse and predict airflow and heat
transfer in electronic equipment. It enables designers to work in a 'virtual'
environment before building physical prototypes. Revenue comes from
consultancy, training and derived add-on modules, as well as from sales of
FLOTHERM itself.



The growth in 2000 of this, the Company's most established business, was very
pleasing. Growth at constant exchange rates was 32% over 1999. This follows
21% in 1999 and 15% in 1998.



As well as continuing expansion in our well-established corporate customers
(Intel, Lucent, Cisco, Fujitsu, among others), we have seen an increasing
level of activity in new start-up operations. The latter often prefer to
out-source thermal design, and so are handled through our Thermal Design
Services, which has tripled its sales during 2000 from £223,000 to £750,000,
and is now established as a major contributor to our business. In addition,
revenue has increased because of a broadening of geographic coverage,
particularly in the Far East, where the contribution to turnover has grown by
64%.



As part of our programme of annual upgrades, FLOTHERM 3.1 was released during
2000, together with various add-on modules, including and in particular 'The
Command Center.' This enables a designer quickly and efficiently to model
multiple variations of his design.



FLOVENT



In 2000 FLOVENT accounted for 8% of Company turnover. FLOVENT performs a
similar analysis to FLOTHERM but is applied to the environment of a building.
It is used in applications relating to heating, ventilation, air-conditioning
and air quality.



FLOVENT turnover grew by 10% in 2000 compared to 24% in 1999. In part this was
attributable to the necessary short-term  greater focus on the new EMC
business.



FLOVENT typically has a longer sales cycle than FLOTHERM and is being sold to
a different user base, often the building services industry, where new
techniques are slower to take hold. Although this market is taking time to
develop, the Company believes that it still offers significant potential. For
example FLOVENT is used to optimise the cooling in rooms housing large
quantities of electronics equipment, which is becoming an increasingly
critical issue for the electronics industry. The Company's strategy is to
create new markets by providing innovative solutions to just such bottlenecks.



ELECTROMAGNETICS PRODUCTS



With the acquisition of Kimberley Communications Consultants Limited (KCC) in
1999 the Company acquired Microstripes, a simulation software product which
analyses high-frequency electromagnetic radiation and is used, for example, in
the application of antenna design. A new version of Microstripes was released
in the second half of 2000 and has been well received.



In addition, the KCC technology is being developed in a new product, called
FLO/EMC for solving the electromagnetic compatibility problem (interference)
experienced by electronics manufacturers. This shares the same customer base
as FLOTHERM and the Company believes that there is a huge potential for this
product in the years to come. During 2000 the first FLO/EMC product was
released and several high profile customers have licensed the product
including  Hewlett Packard, Alcatel and Ericsson Microwave Systems.



2000 has been a year of investment in the electromagnetics products.
Considerable attention has been paid to establishing infrastructure in the US
to support the products. In addition distribution is now being handled
directly rather than through an agent in both the US and Japan.



The integration process of KCC has proceeded well and on 31 December 2000 the
trade of the company was transferred into Flomerics Limited. It will trade
under the name of Flomerics Electromagnetic Division.




SHARE PLACING



In order to support the requirement for increased working capital, due to the
growth of the Company, a share placing of approximately 5% of the Company's
share capital was  undertaken in July 2000. The shares were placed at £8.75, a
premium to the market price, and raised £1.2 million. This has further
broadened the Company's institutional shareholder base.



MANAGEMENT



During the year, Farzad Baban was appointed President of Flomerics, Inc. and a
member of the Flomerics Limited board.  He replaced Zahed Sheikholeslami, who
left the Company to pursue other interests. Farzad has been with Flomerics Inc
for five years and has played a key role in the development of business in the
US.



Dr David Johns, who joined the group as Managing Director of KCC, relocated to
Massachusetts to lead the critical development of the Company's EMC business
in the US market.  Rachid Aitmehdi was recruited to be General Manager of the
Electomagnetics Division in the UK and brought with him extensive experience
in this field.



PROSPECTS



The directors see good prospects for the continuing growth of Flomerics'
businesses.  In the immediate future further investment is required,
particularly in the electromagnetics area. This is likely to prevent a
significant improvement in margins until these products are fully on stream
and to cause a marginal increase in expenditure on research and development as
a percentage of revenue.



As a supplier of virtual-prototyping solutions for two of the most critical
design bottlenecks challenging the electronics industry today, we believe
that, despite the current turbulence in the technology markets, Flomerics is
faced with major market opportunities. We are continuing to strengthen our
current thermal  products; we are creating the new electromagnetics products
and bringing them to market; and we are expanding our global presence,
particularly in the Far East. As a result, we believe that Flomerics is well
positioned to grasp these opportunities.


                                     ---


I am sure that all the shareholders would wish me to congratulate and thank
the management and staff on achieving these record results. The Company has
achieved a profit before tax of over £1 million for the first time and during
the year the size of the very strong team went well past the 100 mark. With
those very capable people around the world, I feel confident that the Company
is well set for the next stage of its development.


David Mann

Chairman

23 February 2001



Chief Executive's Review


MARKET DYNAMICS



As everyone is only too well aware, 2000 has been a turbulent year for
technology companies throughout the world. Following the major 'correction' to
share prices earlier in the year, there has been, in recent months, a flood of
profit warnings and reduced growth forecasts from the technology industry
leaders.



Flomerics, as a major supplier to the technology industry - more specifically,
to major electronics companies - could appear likely to be vulnerable to such
industry-wide setbacks. However, Flomerics is now reporting record results for
2000. Not only have revenues and profits reflected continuing strong
performance - but growth has accelerated, to levels higher than Flomerics has
hitherto achieved in its five years as a public company. Most noteworthy, and
most gratifying, is the accelerated growth in revenues from FLOTHERM - our
core thermal-design product, focussed entirely on the electronics industries.



So what is going on here? Is there some underlying market dynamic which means
that companies will continue to invest in Flomerics' products even during a
downturn? And what about the prognosis for the future - can Flomerics expect
to continue to achieve strong growth despite the continuing, well-publicised
problems in technology market sectors?



Broadly we believe that the answers to these questions are 'Yes'. Our view is
that there are good reasons to believe that Flomerics' business is less
sensitive than might be supposed to the business cycles in its key electronics
markets - and to be confident about future prospects. Let me try to explain
why.



ADDRESSING CRITICAL DESIGN BOTTLENECKS



Flomerics' business is the provision of what is described as 'virtual
prototyping' software, used by engineers to assess their designs by analysis
before construction of physical prototypes. This provides an alternative to
traditional 'build and test' design processes. It enables engineers to get
their designs 'right first time' - meaning, when they build and test a
prototype, it works without further modification. The benefits are clear -
considerable cost savings are achieved - and, much more importantly, time is
saved.



More specifically - until recently Flomerics has focused on aspects of
industrial design concerned with heat transfer and airflow - in electronics
equipment (FLOTHERM) and buildings (FLOVENT). Via FLOTHERM we have, over the
last decade, established a dominant position as the premier supplier of
thermal software to the electronics industries, with virtually all major
electronics manufacturers now dependent on FLOTHERM for their thermal design
needs.



Flomerics' strategy is now to broaden this business to encompass other
critical electronics design needs, and thereby to reposition ourselves as the
major supplier of analysis software used in the 'physical design' of
electronics - that is, all aspects of design concerned with the physical
hardware itself rather than the electronics circuitry.



Our acquisition of Kimberley Communications Consultants Limited (KCC) in 1999
represented a major step in this direction. KCC provides software for the
analysis of high-frequency electromagnetic processes, which complements
Flomerics' previous thermal and airflow capabilities. Apart from the
opportunities associated with the marketing of the existing KCC product,
Microstripes, this opens up a major new opportunity for Flomerics - the
creation of a new product (FLO/EMC) aimed at the electromagnetic compatibility
(EMC) design needs of electronics designers. FLO/EMC complements FLOTHERM, and
will be sold to essentially the same customer base. Together they address the
two most critical design bottlenecks in the physical design of electronics



'TIME IS OF THE ESSENCE'



In our target sectors of electronics equipment manufacturing, 'time to market'
is almost always the major competitive driver. It is well established that the
supplier which is first to market with a new generation product locks up the
bulk of the profits. Consequently, if a semiconductor, computer, or telecoms
company can launch its next-generation equipment ahead of its competitors, it
can achieve a major competitive edge - and there are consequently enormous
pressures on these companies to achieve reductions in time to market of even a
week or two.



This means that virtual-prototyping software of the kind supplied by Flomerics
becomes a necessity. Even during an industry downturn of the kind currently
being experienced, any company which anticipates a long-term future will
continue to invest in critical enabling technology of this kind, otherwise it
can lose its competitive edge overnight. It is, in other words, a 'must have'
rather than a 'nice to have'.



THE TECHNOLOGY JUGGERNAUT POWERS ON



Despite the recent bad press for many major electronics companies, it is clear
that the underlying industry trends remain strong. Companies are reporting
reductions in forecast growth rates - but even in the short-term, are still
anticipating continuing, positive growth. And the medium to long term drivers
support the view that - disregarding for the moment short-term setbacks - the
technology boom is far from over.



Central to all this - both as an enabler, and as itself a major part of the
technology sector - the ongoing communications revolution shows no signs of
diminishing. For example - the investment in internet hardware infrastructure
is currently (for 2000) reported as running at almost £200 billion annually,
and has been increasing at over 50% per year(1). And the future investment in
infrastructure to support third-generation mobile telephony in Europe alone
has been estimated as approaching £100 billion(2).



Needs such as these draw on the semiconductor, computer and telecoms/
networking sectors to provide the critical hardware - servers, routers,
switches, hubs, base stations, and so on - which provides the backbone of our
communication systems.



And consider the design trends in these technologies. The overwhelming demands
are for speed and volume - more data, faster. For the electronics devices
within these classes of equipment this means higher clock speeds (now over one
gigahertz and rising) and increased density (more gates per device). All of
this conforms to the well-known prediction of Moore's law - that the power of
microprocessors will double every eighteen months for the foreseeable future.
These accelerating trends drive up power density - and hence intensify thermal
problems - and, additionally, lead to greater problems of electromagnetic
emissions.



The semiconductor, computer and telecoms/networking sectors - which are
Flomerics primary markets - are therefore experiencing intensifying thermal
and EMC design challenges. Not surprisingly, they have contributed the major
part of Flomerics' excellent growth during 2000 - and all appear likely to
continue to be major contributors in the future.



THERMAL BUSINESS UNDERPINS STRONG GROWTH



As explained in the Chairman's Statement, the main contributor to growth in
2000 has been FLOTHERM. Driven by the intensification of thermal design
problems highlighted above, we have seen strong demand in all sectors and in
all territories.



This further strengthening and consolidation of FLOTHERM as the leading tool
for thermal analysis in electronics, and as the 'industry standard', is doubly
important to Flomerics. Firstly, it provides a sound core business, which, as
explained above, offers continuing strong growth prospects. And secondly,
Flomerics' positioning as a leading supplier to the global electronics
industries provides an ideal foundation for the introduction and cross-selling
of the new FLO/EMC product.



EMC - OPPORTUNITIES AND PROGRESS



It is worth reflecting on how Flomerics - a small UK company - has achieved
this globally dominant position in its niche thermal market.



The key here is Flomerics' underlying business model. This is, that we aim to
create new markets for virtual-prototyping software by identifying a new,
emerging industrial need, matching it to appropriate, best-in-class analysis
technology, creating the required software product and, by achieving an early
market leadership, building a strong long-term position as the 'industry
standard' product. This is what we have done in electronics thermal - and we
now see an opportunity to repeat the process in EMC.



One of our benefits as a supplier to the worlds' leading electronics companies
is what we can learn from talking to - and listening to - our customers. And
the main thing we have learned is that EMC - the reduction of electromagnetic
emissions from electronics equipment - is increasingly becoming one of the
most critical and troublesome aspects of electronics design.



As processing power and clock speeds rise, so containment of the associated
electromagnetic radiation becomes more critical and more difficult. And,
furthermore, unlike thermal design, EMC is governed by stringent EU and US FCC
regulations, which limit permitted levels of emission from all classes of
electronics equipment. Failure of the standard emissions tests will prevent
shipment of new equipment until the problem is resolved - causing
sometimes-substantial delays in product release. There is therefore an
overwhelming need for virtual prototyping software able to address the
problems of EMC design. Hitherto none has existed. With the acquisition of KCC
in 1999 Flomerics is now in a position to address this need.



Our strategy has been to adapt the existing KCC product, Microstripes,
specifically for EMC design, and, in due course, to merge it with FLOTHERM.
During 2000 we have made good progress along this track. The first product
release of FLO/EMC V1 was achieved in October 2000, and development is now
continuing towards an upgrade later this year.



The reception of our EMC initiative has been outstanding. The product has
already been adopted by a number of our major customers - Hewlett Packard,
Alcatel, Ericsson Microwave Systems, 3 Com, and Otis among others. All market
feedback would confirm the existence of a major untapped market for the EMC
product - which, it is clear, is potentially of at least the size of our
existing thermal market.



For 2001 we are continuing to refine and tailor the FLO/EMC product based on
feedback from the early-adopter customers. Our strategy is to establish close
relationships with these strategically important companies, to work closely
with them to ensure their success and understand their needs, and to ensure
that their feedback is captured in future product releases. In parallel we are
building up our EMC technical support infrastructure in all key locations, and
successively widening our marketing of the product.



GO EAST ...



A major factor - we believe - in achieving our strong overseas presence has
been Flomerics' commitment, wherever possible, to establishing local Flomerics
operations to support overseas markets. This has enabled us to ensure the best
possible quality in our sales and support operations, and has resulted in
close relationships with our customers throughout the world. This 'direct
sales' approach has been a major factor in enabling us to achieve and maintain
our global market leadership.



This is reflected in the strong, direct presence we have built up over the
years in North America and Europe, with four offices in the US, and one each
in France, Germany and Italy. On the other hand, we have - mainly due to the
logistical difficulties of doing otherwise - so far addressed the Far East
indirectly, via close relationships with small, local operations which act as
Flomerics' distributors.



Recognizing the increasing importance of the Far East markets, and in
particular the new opportunities in the emerging market in China, we have
recently adopted a strategy of focussing on this region, and beginning to
create a direct Flomerics presence in key locations.



Most importantly, during the early part of 2000 we launched a Flomerics
operation in China, based in Shanghai. This has proved to be an outstanding
success. We have already begun opening up this new market, our early successes
including establishing FLOTHERM within the leading indigenous telecoms and
computer companies in China.



In addition, we have, as of 1 January 2001, established a Flomerics operation
in Tokyo, responsible for business with our Microstripes electromagnetic
product in Japan. This will operate alongside the existing FLOTHERM
distributor in Japan.



And we have, also as of January 2001, launched a new operation in Singapore,
to address the increasingly important market in South East Asia.



TO ROUND OFF...



Despite the recent, apparent, setbacks in the technology markets and
technology businesses, we feel confident about the future.



Driven largely by the growth in 'communications', investment in electronics
appears certain to grow - and to lead to more-challenging design needs. We
therefore foresee a continuing, and intensifying, need for the key enabling
technologies - thermal and EMC - which Flomerics provides. We are committed to
consolidating our dominant global position in the thermal market, and, with
this as a foundation, to establishing global leadership in the new EMC market.



David Tatchell

Chief Executive



23 February 2001


Finance Director's Review



PROFIT AND LOSS ACCOUNT

Turnover has increased by 35% compared to 1999 at £11.8 million. Operating
profit has increased by 45% from £826,000 to £1,194,000. Because a significant
proportion of the Group's revenue is generated in the US (56%), there has been
a marked impact on turnover and profit from the weaker dollar. The average
pound / dollar exchange rate in 1999 was 1.61 and in 2000 it was 1.51. The
effect on turnover was £412,000 and on profit it was £153,000.

Without the exchange rate effect there has been a 31% growth in revenues from
the US, which has seen excellent growth in new licenses and in consultancy
revenues. With a very good performance in the last few months of the year,
there was little evidence of Flomerics' business being affected by a
slow-down.

The rest of the world saw similar growth, but the Far East was the best
performing region with growth of over 64% from £931,000 to £1,530,000. Japan
in particular had a very good year with over 70% growth over 1999. The
business model in the Far East is different, with a greater proportion of
perpetual licences being sold, and we do not expect to see similar growth in
2001. The office in China was established in April 2000 and in the first year
of its operation contributed turnover of £164,000 compared to just £36,000
from this region before an office was established.

The operating margin has improved from 9.5% to 10.2%. Given the investment in
infrastructure that has taken place, in particular to support the new
electromagnetic products, this is a good result. More investment will be
needed and it is not expected that the margins can be improved significantly
over the short term. Looking further forward, however, the directors are
committed to aiming to increase the margin when the electromagnetic products
are fully on stream.

The earning per share (eps) before amortisation of goodwill has increased by
65% from 20p to 33p. The eps has benefited from a low tax rate this year of
27%. This was mostly because of the ability to claim the new Research and
Development Allowances, with effect from 1 April 2000, at a rate of 150%. This
alone has brought the UK tax rate down by 10% and has benefited the eps by 3.4
p. Without this the increase in eps would be 48%.

THE BALANCE SHEET

The balance sheet has been strengthened by the share placing in July which
raised £1.2 million. This has increased shareholders' funds and has meant that
net debt at 1 January 2000 of £381,000 has been converted into positive funds
of £689,000 at the year end. The Group experiences significant peaks and
troughs in the cash flow, as a consequence of the emphasis on the renewals in
the second half of the year, and these additional funds will enable the
company to grow, for sometime, unhindered by its working capital requirements.

Cash out flows included £308,000 of corporation tax. Additional tax has been
paid out in the UK because of the new Corporation Tax Self Assessment regime,
whereby tax has to be paid on account during the course of the year rather
than nine months after the year end.  Capital expenditure was £727,000
compared to £447,000 in 1999; £452,000 of this was on new hardware and £
159,000 on fixtures and fittings, which included a refurbishment of the
Hampton Court office. The US office also relocated to new premises during
2000. New finance leases amounting to £232,000 were entered into during the
year. A dividend of £110,000 was paid and a loan of £191,000 relating to the
acquisition of KCC was repaid.

Because of the large amount of renewal business that happens in the last
quarter of the year, the Group's trade debtors are always very high at 31
December. This year the figure was £4,728,000 (40.2% of turnover) compared to
£3,522,000 (40.4%) in 1999. Debt collection since the year end has been good
and it has not been considered necessary to make any material provisions for
bad debts.

Because of the weaker dollar the net assets held in the US are translated at a
lower rate. This movement has been taken to reserves and shareholders funds
have benefited from exchange movements arising from the re-translation of
opening balances by £93,000.

After allowing for the proposed dividend of £146,000, shareholders' funds have
increased by over £2 million to £4.4 million from £2.4 million.

FINANCIAL INSTRUMENTS

As highlighted above, because of the significant contribution from the US, the
Group is significantly exposed to the pound / dollar exchange rate. In order
to reduce the impact of this in 2000 and in 2001, forward exchange rate
contracts have been taken out based on the expected royalty streams payments
to the UK from the US. Hedging contracts are not taken out on the net assets
of the US operation. Other exchange rates are monitored but not hedged.

As the Group is now in a positive cash position, it is not significantly
exposed to movements in interest rates. Finance leases were taken out in 2000
for significant items of hardware expenditure and these are contracted at
fixed exchange rates, generally over a period of three years.

RESEARCH AND DEVELOPMENT EXPENDITURE

Research and development in 2000 amounted to £2.2 million or 19% of turnover
compared to £1.6 million in 1999 or 18% of turnover.  It is anticipated that
this will increase marginally again in 2001 as a percentage of turnover.


Chris Ogle

Finance Director

23 February 2001




FLOMERICS GROUP  PLC

CONSOLIDATED PROFIT  AND LOSS ACCOUNT

FOR THE YEAR ENDED 31 DECEMBER 2000


                                               2000       2000   1999     1999
                                              £'000      £'000  £'000    £'000
                                       

Turnover                                                11,763           8,713
Cost of sales                                            (550)           (525)

                                                     _________         _________
                                                                         8,188

Gross  profit                                           11,213

Administrative expenses                     (9,937)            (7,328)
Goodwill amortisation                          (82)               (34)


                                           ________            ________
                                                      (10,019)         (7,362)

                                                      ________         ________

Operating profit                                         1,194             826
Other interest receivable and similar                       43              30
income
                                                          (55)            (49)
Interest payable and similar charges
                                                     _________         _________



Profit on ordinary activities before                     1,182             807
taxation (Note 3)

Tax on profit on ordinary activities                     (323)           (313)

                                                     _________         _________



Profit for the financial year                              859             494


Dividends                                                (146)           (110)

                                                     _________         _________


Retained Profit for the financial year                     713             384




Earnings per share (Note 4)                              30.1p           18.7p
Diluted earnings per share (Note 5)                      30.0p           18.5p
Earnings per share before amortisation of                33.0p           20.0p
goodwill



FLOMERICS  GROUP  PLC

CONSOLIDATED  BALANCE  SHEET

AT 31 DECEMBER 2000


                                          2000                 1999
                                         £'000       £'000    £'000       £'000
Fixed assets
Intangible assets                                      704                  786

Tangible Assets                                      1,027                  815

Investments                                             19                   19

                                                   _______             ________
                                                     1,750                1,620
Current assets
Debtors                                  5,626                3,860
Cash at bank and in hand                 1,136                  506

                                       _______             ________
                                         6,762                4,366

Creditors:  amounts falling due
within one year
                                       (3,941)              (3,489)

                                     _________             _________


Net current assets                                   2,821                  877

                                                  ________             ________


Total assets less current                            4,571                2,497
liabilities
Creditors: amounts falling due
After more than one year                             (136)                (109)
Provisions for liabilities and                        (30)                    -
Charges

                                                  ________             ________
Net assets (Note 3)                                  4,405                2,388




Capital and reserves
Called up share capital                                 29                   27
Share premium account                                1,733                  524
Other reserves                                         759                  759
Profit and loss account                              1,884                1,078

Equity shareholders'funds                         ________             ________

                                                     4,405                2,388



FLOMERICS  GROUP  PLC

SUMMARY CONSOLIDATED  CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2000

                                                                        
                                                         2000              1999
                                                        £'000             £'000

Net cash inflow from operating                            923               800
activities

Net cash outflow from returns
on investment and servicing of
finance                                                  (12)              (18)

Tax paid                                                (308)             (121)

Net cash outflow for capital
expenditure and financial
investment                                              (727)             (447)

Net cash outflow from                                      -              (164)
acquisitions

Equity dividend paid                                    (110)              (85)
                                                     ________          ________
Net cash outflow before                                 (234)              (35)
financing

Net cash inflow (outflow) from                          1,093              (67)
financing
                                                     ________          ________
Increase/ (decrease) in cash                              859             (102)
                                                     ________          ________


Notes:


1.        The Group recognised unrealised gains on translation of foreign
currency net investments of £93,000 in the year which were taken to reserves
and are not included in the profits above.



2.        The financial information shown for the years ended 31 December 2000
and 1999 set out above does not constitute statutory accounts but is derived
from those accounts. Statutory accounts for 1999 have been delivered to the
registrar of Companies whereas those for 2000  will be delivered following the
Company's AGM. The auditors have reported on those accounts; their reports
were unqualified and did not contain a statement under section 237 (2) or (3)
of the Companies Act 1985. Copies of this announcement are available at the
registered offices of the Company (81 Bridge Road, Hampton Court, Surrey, KT8
9HH) and at the offices of the company's nominated advisors, Teather &
Greenwood Ltd. (Beaufort House, 15 St Boltolph Street, London EC3A 7QR) for a
period of 14 days from the date hereof.



3.        The group's turnover and profit before tax for each geographic area
of operation is:


                           Turnover                    Profit Before Taxation

                                  2000            1999         2000        1999

                                 £'000           £'000        £'000       £'000
United States of America         6,555           4,690          195          42
Europe                           5,208           4,023          987         765
                             ---------      ---------- ------------  ----------
                                11,763           8,713        1,182         807
                            ----------   ------------- ------------  ----------


Included within the turnover figure for Europe is £1,530,000 (1999:£931,000)
of turnover that was invoiced in Europe but related to business generated in
the Far East.


The net assets attributable to each geographic area are:


                                                    2000                  1999
                                                   £'000                 £'000

United States of America                             443                   305
Europe                                             3,962                 2,083
                                            ------------         -------------
                                                   4,405                 2,388
                                           -------------         -------------


4.        The earnings per share figure for 2000 has been calculated based on
the profit on ordinary  activities after taxation and the weighted average
number of shares in issue of 2,850,000 (1999: 2,639,000).



5.        In accordance with FRS14 issued in October 1998 the fully diluted
earnings per share was 30.0 pence per share (1999: 18.5p). The diluted number
of shares was 2,866,000 (1999: 2,661,000)



6.        The AGM will be held at 10.30 am on 18 April 2001 at the registered
office of the company  (81 Bridge Road, Hampton Court, Surrey, KT8 9HH).



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(1) 'Measuring the Internet Economy', January 2001,
www.internetindicators.com.




(2) Financial Times Supplement 17 January 2001, Survey on Telecoms.