Final Results

Image Scan Holdings PLC
27 January 2005

For Immediate Release                                            27 January 2005



                            IMAGE SCAN HOLDINGS PLC
                        ('Image Scan' or the 'Company')

            PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2004


Image Scan, a leading provider of 3D and multi-view, X-ray imaging technologies
for the security and industrial inspection markets announces preliminary results
for the year ended 30 September 2004.

Key Points
     
•    Commercial sales £425,000 (2003: £351,000, plus £159,000 of funded 
     research);

•    Gross profit £186,000 (2003: £121,000) as margin increases from 24% to 44%;
     
•    Group loss after tax of £1,210,000 (2003: £788,000);

•    Basic and diluted loss per ordinary share at 6.3p (2003: 4.9p);

•    The target of establishing two 'blue chip' reference sites for industrial 
     X-ray inspection systems has been met with one at GE Healthcare Amersham 
     and the other at Johnson Matthey;

•    Formal launch and initial commercial sales of the Rapiscan 3D20 product 
     which contains the Company's market leading 3D X-ray baggage screening
     system;

•    Largest single order - in excess of £600,000 received by the Company in 
     December 2004.


For further information:

Nick Fox, Chief Executive        Image Scan Holdings plc       01664 503 600
Richard Darby/Suzanne Brocks     Buchanan Communications       020 7466 5000



Chairman's Statement

INTRODUCTION

I am pleased to present the results of Image Scan Holdings plc for the year
ended 30 September 2004 and the Board's view of the Company's progress and
prospects.

FINANCIAL RESULTS AND ACCOUNTING POLICY

Commercial sales in the year were £425,000 (2003: £351,000).  In 2003 there were
additional sales of £159,000 relating to one-off funded research projects.  The
change in emphasis from a mixture of commercial and research contracts to
entirely commercial sales has resulted in the recovery of the profit margin to
44% (2003: 24%).  This gave an improvement in gross profit from £121,000 to
£186,000.

The overheads of £1,448,000 (2003: £961,000) included £162,000 written off the
value of the patents licensed from The Nottingham Trent University.  The
Directors felt that the Company's technology had progressed beyond those
original patents such that significant future sales arising from their use was
not anticipated.  Other 'one-off' costs included £60,000 spent on a cost benefit
analysis and £60,000 incurred in professional fees relating to aborted
negotiations for a strategic partner to take a stake in the Company.  Since the
year-end the Directors have taken action to reduce overheads.

Overheads included research and development expenditure of £118,000 (2003:
£150,000), which is expensed as incurred in accordance with the group's
accounting policy.  The lower expenditure in 2004 reflects the move towards
commercial sales, whilst still maintaining a research focus on the next
generation of imaging techniques.

The loss for the year after R&D tax credits amounts to £1,210,000 (2003:
£788,000), being a loss per share of 6.3p (2003: 4.9p).  In accordance with the
current policy there is no dividend.

During the year the Company invested £20,000 in a licence for a castellated
detector patent which represents a key component of the current product range.
Other capital expenditure included £65,000 for two demonstration units; one for
use at exhibitions and the other a prototype for a large area detector for
explosives and ordnance detection.

OUTLOOK

Although the launch and subsequent sales of the Rapiscan 3D20 have been slower
than anticipated, we are now beginning to see the first significant sales
resulting from the Sales and Marketing Agreement with Rapiscan Security Products
Limited (Rapiscan) with the latest order of £90,000 for 6 cameras being received
in October 2004.  This order brings the total number of camera units sold to
Rapiscan to 16 out of the agreed 150 units to be ordered by February 2006 under
the Sales and Marketing Agreement.

Following the launch of the industrial products into the market in October 2003,
we have been delighted to have met our target of establishing two key reference
sites during 2004.  These sites, at GE Healthcare Amersham and Johnson Matthey,
both resulted from an intense evaluation of our technology by the customer and
add significantly to the credibility of our systems.

The calendar year ended on a high note, with turnover in the first quarter
showing a significant improvement at £102,000 compared to £13,000 for the same
period last year.  Furthermore the Company's largest single order to date of
£600,000 was received in December 2004 as a follow-on order from our first
system delivered to Johnson Matthey.

Against this background the Board is seeking to raise additional capital by way
of a rights issue to provide sufficient resources to take advantage of these
emerging commercial opportunities and to continue operations for the foreseeable
future.  For further details, refer to note 2 to this announcement.

OTHER MATTERS

As a final point I should like to offer my personal thanks and acknowledgement
to the unwavering loyalty and dedication of the staff on a day-to-day basis.  It
is their skill and expertise that has put this Company at the forefront of its
technological sectors.


Ian Johnson
Chairman



IMAGE SCAN HOLDINGS PLC

GROUP PROFIT AND LOSS ACCOUNT
Year ended September 2004
                                                           Note          Unaudited       Audited
                                                                              2004          2003
                                                                                 £             £

TURNOVER                                                                   424,620       509,750
Cost of sales                                                            (239,100)     (389,016)

Gross profit                                                               185,520       120,734

Administrative expenses                                                (1,448,125)     (960,507)

OPERATING LOSS                                                         (1,262,605)     (839,773)

Interest receivable                                                         12,513         8,219

Interest payable                                                           (4,877)       (7,164)

LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION                            (1,254,969)     (838,718)

Taxation                                                                    44,486        50,419

LOSS ON ORDINARY ACTIVITIES ATTRIBUTABLE TO SHAREHOLDERS               (1,210,483)     (788,299)
Dividends                                                                        -             -

RETAINED LOSS FOR THE FINANCIAL YEAR                                   (1,210,483)     (788,299)
Retained reserves brought forward                                      (2,790,643)   (2,002,344)

Revenue reserves carried forward                                       (4,001,126)   (2,790,643)

                                                                             Pence         Pence
Earnings per share
Basic and diluted loss per share                           (i)                 6.3           4.9




NOTE:
     
(i)  EARNINGS PER SHARE
                                                                         Unaudited       Audited
                                                                              2004          2003
                                                                                 £             £

Loss for the year                                                        1,210,483       788,299

Weighted average number of ordinary shares in                           19,073,580    16,250,203
issue

Basic and diluted earnings per share                                          (6.3)        (4.9)


FRS14 requires presentation of diluted earnings per share (EPS) when a company
could be called upon to issue shares that would decrease net profit or increase
net loss per share.  For a loss making company with outstanding share options,
net loss per share would only be increased by the exercise of out-of-the-money
options.  Since it seems inappropriate to assume that option holders would act
irrationally and there are no other diluting future share issues, diluted EPS
equals basic EPS.




IMAGE SCAN HOLDINGS PLC

CONSOLIDATED BALANCE SHEET
As at 30 September 2004
                                                       Note            Unaudited          Audited
                                                                            2004             2003
                                                                               £                £
FIXED ASSETS
Tangible fixed assets                                                    191,579          222,259
Intangible fixed assets                                                   19,594          178,310

                                                                         211,173          400,569

CURRENT ASSETS
Stock and work in progress                                                44,449           26,957
Debtors                                                                  146,189          127,717
Cash at bank and in hand                                                  50,027          209,655

                                                                         240,665          364,329

CREDITORS: amounts falling due
   within one year                                                     (343,722)        (427,251)

NET CURRENT (LIABILITIES)                                              (103,057)         (62,922)

TOTAL ASSETS LESS CURRENT LIABILITIES                                    108,116          337,647

CREDITORS: amounts falling due after more than one
year                                                                    (17,307)         (54,670)

Provisions for liabilities and charges                                  (15,700)                -

                                                                          75,109          282,977


CAPITAL AND RESERVES
Called up share capital                                                  193,356          162,502
Share premium account                                                  3,882,879        2,911,118
Profit and loss account                                              (4,001,126)      (2,790,643)

                                                                          75,109          282,977





IMAGE SCAN HOLDINGS PLC

CONSOLIDATED CASH FLOW STATEMENT
Year ended 30 September 2004
                                                       Note            Unaudited      Audited
                                                                            2004         2003
                                                                               £            £

Net cash outflow from operating activities             (i)           (1,060,615)    (237,723)

Returns on investments and servicing of finance
Interest received                                                         12,513        8,219
Interest payable                                                         (4,877)      (7,164)

                                                                           7,636        1,055
Taxation
Corporation tax recovered                                                 54,431       97,389

Capital expenditure and financial investment
Purchase of tangible fixed assets                                       (90,421)    (189,360)
Purchase of intangible fixed assets                                     (20,182)      (3,655)

                                                                       (110,603)    (193,015)

Net cash outflow before management of liquid resources               (1,109,151)    (332,294)

Management of liquid resources
Withdrawal of short term deposits                                              -       42,924

Financing
Issue of ordinary share capital                                          986,885            -
Bank loans repaid                                                       (37,362)     (36,172)

                                                                         949,523     (36,172)

Decrease in cash in the year                           (ii), (iii)     (159,628)    (325,542)




NOTES TO THE CASH FLOW STATEMENT
Year ended 30 September 2004
     
i)   RECONCILIATION OF OPERATING CASH FLOWS
                                                                          Unaudited     Audited
                                                                               2004        2003
                                                                                  £           £

Operating loss                                                          (1,262,605)   (839,773)
Depreciation                                                                121,101      76,151
Amounts written off intangible fixed assets                                 178,898      17,805
(Increase)/decrease in stock                                               (17,492)      42,974
(Increase)/decrease in debtors (excluding corporation tax                  (12,686)     195,533
recoverable)
(Decrease)/increase in creditors                                           (67,831)     269,587

Net cash outflow from operating activities                              (1,060,615)   (237,723)




IMAGE SCAN HOLDINGS PLC

NOTES TO THE CASH FLOW STATEMENT
Year ended 30 September 2004
     
ii)  ANALYSIS OF NET FUNDS
                                                                               2004        Other
                                                               Audited         Cash     non-cash    Unaudited
                                                                  2003         flow      charges         2004
                                                                     £            £            £            £

Cash at bank and in hand                                       209,655    (159,628)                    50,027

Debt due within one year                                      (37,363)       37,362     (37,362)     (37,363)
Debt due after one year                                       (54,669)                    37,362     (17,307)

                                                               117,623    (122,266)            -      (4,643)

     
iii) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET (DEBT)/FUNDS
                                                                                       Unaudited      Audited
                                                                                            2004         2003
                                                                                               £            £

Decrease in cash in the period                                                         (159,628)    (325,542)
Cash outflow from decrease in debt                                                        37,362       36,172
Cash outflow from decrease in liquid resources                                                 -     (42,924)

Change in net debt resulting from cash flows                                           (122,266)    (332,294)

Net funds at 1 October                                                                   117,623      449,917

Net (debt)/funds at 30 September                                                         (4,643)      117,623






IMAGE SCAN HOLDINGS PLC

NOTES TO THE ANNOUNCEMENT
Year ended 30 September 2004


 1. The financial information set out above does not constitute the Company's
    statutory accounts for the years ended 30 September 2004 or 2003.  The
    financial information for the year ended 30 September 2003 is derived from
    the statutory accounts for that year which have been delivered to the
    Registrar of Companies.  The auditors have reported on those accounts; their
    report was unqualified and did not contain a statement under section 237(2)
    or (3) of the Companies Act 1985.  The statutory accounts for the year ended
    30 September 2004 will be finalised on the basis of the financial
    information presented by the directors in this preliminary announcement and
    will be delivered to the Registrar of Companies following the Company's
    Annual General Meeting.  The financial information has been prepared in
    accordance with the accounting policies adopted for the 2003 accounts.

 2. On 15th November 2004 the Company issued £200,000 9% secured loan stock
    repayable at par on 14th November 2005 or on the date of a debt or equity
    fundraising by the Company which raises not less than £1 million gross,
    whichever is earlier.  £200,000 of warrants were issued with the loan stock
    at a subscription price of the lower of 10p per share or the price at which
    the Company next issues new ordinary shares in an open offer, placing or
    rights issue to ordinary shareholders of the Company.

    The Company hopes to shortly announce a rights issue to raise £1 million of
    additional working capital.  Negotiations are underway by the brokers to
    secure underwriters to the issue.

    Based on a successful rights issue the Board believes the Company will have
    sufficient resources to continue in operational existence for the
    foreseeable future and therefore have prepared this announcement on a
    going-concern basis.

 3. It is intended that the financial statements for the year ended 30 September
    2004 will be posted to shareholders in March 2005 and will also be available
    thereafter at the registered office, Pera Innovation Park, Nottingham Road,
    Melton Mowbray, Leicestershire, LE13 0PB.

 4. The Annual General Meeting will be held in April 2005, at the registered
    office, Pera Innovation Park, Nottingham Road, Melton Mowbray,
    Leicestershire, LE13 0PB.



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