Final Results

Ingenta PLC
10 December 2002

Date:            Embargoed until 07.00,  10th December 2002

Contacts:        Ingenta                            Website:  www.ingenta.com
                 Martyn Rose, Chairman              (On 10/12/02): 020 7796 4133
                 Mark Rowse, Chief Executive        Thereafter: 01865 799010
                 William Finlay, Finance Director               01225 361020

                 Hudson Sandler
                 Alistair Mackinnon-Musson          Tel:  [phone]
                 Philip Dennis                      email:  [e-mail]



Meetings:        A presentation for analysts and a separate briefing for
press will be held today.  For further information, please contact Hudson
Sandler, as above, on 020 7796 4133.


                                Ingenta plc

        Preliminary Results for the 12 months ended 30th September 2002


Ingenta plc, which manages and distributes published scientific, professional
and academic research via the Internet and develops and maintains specialist
websites for publishers, self-publishing societies and libraries, is pleased to
announce its preliminary results for the 12 months to 30th  September 2002.



Ingenta derives its revenue from three main divisions, namely Publisher
Services, Specialist Websites and Pay-Per-View.



Highlights

•         Results

            o        Turnover £9.3m (2001:£9.9m)

            o        £4.6m reduction in losses before goodwill amortisation to 
                     £(6.4)m (2001: £(11.0)m)

            o        Loss per share excluding goodwill amortisation and tax 
                     (11.1)p (2001: (20.7)p)

•         Unaudited interim results restated on equivalent basis show reduction
          of turnover of £2.6m of which

            o        £1.9m will be recognised in future periods

            o        £0.4m recognised as 'other income' or reduction of 
                     overheads



•         Reorganisation has removed £3.3m of annualised cost

•         Number of publisher customers up by 26% to 230 over the year

•         Number of Specialist Websites increased by 35% to 220 over the year

•         User sessions up over 130% to 6.5m in September 2002 (September 2001:
          2.8m)

•         Ingenta is one of the 10 largest web site providers in the UK



Commenting on the results, Mark Rowse Chief Executive, said:

'Ingenta remains a successful and dynamic business serving a growing
marketplace. The group's strong underlying organic growth in business generated
during the year demonstrates the ongoing level of demand for the Group's
services.'



Martyn Rose, Non-Executive Chairman, added:

'Ingenta continues to make substantial progress in its underlying trading
activities. The Board responded rapidly to a slowing rate of new business
acquisition earlier in 2002 through reorganisation and the introduction of new
management. The changes in accounting practice introduced by the new team should
not distract attention from the progress that the Group has made. It has
generated a £4.6m reduction in losses, and the changes introduced in presenting
results will have a substantial benefit on the results for the 2003 year and
beyond. The Board is therefore confident that a further substantial improvement
in earnings can be achieved in the current year.'




Notes to Editors



Ingenta is the global market leader in the management and distribution of
published scientific, professional and academic research via the Internet, and
develops and maintains specialist websites for publishers, self-publishing
societies and libraries.



For publishers of scientific, professional and academic periodicals, journals
and reference works, Ingenta provides a suite of publisher services including
data conversion, secure online hosting, access control and distribution
services.  This research content - 13.9 million articles from over 5,500 online
publications and 20,000 fax delivered publications - is accessed by over 6
million researchers a month via ingenta.com and other websites, making Ingenta
one of the 10 largest web service providers in the UK.



Ingenta's revenue streams derive from:



•          Fees paid by customers for publisher services ('Publisher Services')

•          Fees paid by customers for specialist website build and maintenance
           ('Specialist Websites')

•          A share of pay-per-view article purchases and website subscription
           revenues ('Pay-Per-View')

For more information, see www.ingenta.com.

          Preliminary results for the 12 months to 30th September 2002


During the year to 30th September 2002 Ingenta continued to make significant
progress in all its core markets.



As previously announced, the management conducted a reorganisation of the
business in September 2002 and following this it also reviewed the group's
financial reporting procedures. Although no major areas of concern were
identified, following the year-end audit review the Directors decided to review
the Company's revenue recognition policies and a number of changes have
therefore been made in the way in which Ingenta's accounts are now presented
when compared with the treatment of the unaudited interim results for the 6
months to 31st March 2002.



As a result of this changed treatment, some £2.6m of items recognised as
turnover in the interim results has been restated.  £1.9m will be recognised as
turnover in future periods and a further £0.4m has been included as other income
or as reduction of overheads in the year ended 30th September 2002.



Turnover for the group was £9.3m (2001: £9.9m) and the group generated a £4.6m
reduction in losses, excluding goodwill amortisation and write-off, to a loss of
£(6.4)m (2001: (11.0)m).



Within the group's Publisher Services operation, Ingenta converts 'raw' text and
data into an 'intelligent' format for use on the web and also provides online
hosting, digital rights management and distribution services. During the year,
the group's customer base of publishers and self-publishing societies using
these services grew by 26%, bringing the total number of clients to 230 -
including 7 of the World's top 8 scientific and academic publishers.



Although, as previously announced, some slippage was experienced in the group's
Specialist Website division in the signing of certain major new contracts that
were expected to conclude in the second half of the year, as announced at the
beginning of August, new business was won at a steady rate through the year.  As
a result, the group launched a further 57 websites during the year, taking the
total number of customised 'white label' journal collection and reference work
websites it operates for publishers and libraries to over 220.  This represents
an increase of 35% over the year.



Pay-per-view download of professional and academic articles via Ingenta's
website (www.ingenta.com) also increased. The overall usage of Ingenta's own
branded sites in September 2002 was more than 2.6 million visits, which compares
with some 1.4 million visits in September 2001. Together with its Specialist
Websites, Ingenta delivered over 6.5 million visits in September, making the
group one of the 10 largest web service providers in the UK.



Ingenta has been successful in developing its customer relationships so that an
increasing number of its clients are now purchasing services from more than one
of the group's divisions.  For example, of the group's 230 publisher customers,
143 are taking services from 2 divisions and 73 from all 3 divisions.  Typically
a new customer relationship with Ingenta will begin through the Publisher
Services division and then extend progressively via Pay-Per-View to the highest
value area of Specialist Websites.  The evidence that this planned customer life
cycle is actively being realised is most encouraging to the Board.




Management Changes and Reorganisation



Whilst all divisions have made substantial progress over the year, the rate of
new business reaching contract stage in the Specialist Websites area was lower
than that originally expected for the second half of the year, as previously
mentioned above and announced to shareholders in August.  This was the result of
a more cautious approach being adopted by some clients to investment in new
product development.  As a consequence, Ingenta's management moved rapidly to
significantly and fundamentally reorganise its operations to reflect a more
prudent view of likely growth rates going forward and to generate increased
efficiencies.  This series of changes, including the promotion of Simon Dessain
to Chief Operating Officer and the appointment of William Finlay as Finance
Director, was announced to shareholders in September.



Execution of the reorganisation was largely carried out prior to the year end,
and further significant progress has been made since then in implementing the
details of these changes. The costs of this reorganisation, including provisions
and other non-recurring items, amount to £1.4m and, together with £3.3m of
expenses incurred during the year but which will not recur in 2003 as a result
of the reorganisation, have been fully provided for in the accounts for the year
to 30 September 2002.



Financial Review



As referred to above, following a review of Ingenta's financial reporting
procedures the Directors decided to review the Company's revenue recognition
policies and a number of changes have therefore been made in the way in which
Ingenta's accounts are now presented when compared with the treatment of the
unaudited interim results for the 6 months to 31st March 2002.  None of these
changes have a material effect on the audited results for the year to 30th
September 2001.



In particular, within the statutory profit and loss account presented below,
£1.2m of revenue invoiced and received under the group's arrangements with Gale
Group, and previously included within the group's turnover for the 6 months to
31st March 2002, will now be recognised over the next 5 years. A further £0.4m
has been re-classified as 'Other Income' or as a reduction of overheads within
the period. The Directors expect an additional £1.4m relating to administration
charges for library deposit accounts following the introduction of revised terms
and conditions, of which some £0.7m was included within the interim results for
the 6 months to 31st March, 2002, to be recognised in future years.



Gross profit for the period was £7.4m (2001: £8.1m) and gross margins were
broadly stable at 80% (2001: 82%).



The group generated a £4.6m reduction in losses, excluding goodwill amortisation
and write-off, to a loss of £(6.4)m (2001: £(11.0)m.



Cash outflow was substantially reduced over the year to £(4.5)m (2001: outflow £
(9.8)m).  The year end cash balance was £1.2m (2001: £2.2m).



Following an impairment review of goodwill, the Directors have decided to write
off all outstanding goodwill at 30th September 2002, resulting in a total charge
for amortisation and write-down of £19.4m.


Operations Review



Ingenta's revenue is derived from three core areas, namely:



1)      fees from scientific, professional and academic publishers and
self-publishing societies for the conversion of 'raw' data into a web usable
format and providing hosting, digital rights management and distribution
services for that content over the Internet - Publisher Services;



2)      fees from scientific, professional and academic publishers,
self-publishing societies and libraries for the development and maintenance of
custom-developed websites, including build and access control, the maintenance
of those websites and a share of subscriptions paid to accessthem - Specialist
Websites; and



3)      revenue from end-users on a per article basis for downloading material
to which they do not currently have access - Pay-Per-View.



Ingenta has long-term contracts with many of its customers.  Additionally, for
around 80% of pay-per-view transactions, Ingenta debits the cost to customers
against pre-paid and corporate accounts.



Publisher Services



Growth in this division continued to be strong. Ingenta now provides services
for over 5,500 publications to 230 publishers, an increase of almost 50 during
the year.  In order to ensure a continuing strong level of service provision,
the client and content management operations for existing customers have been
restructured and separated from the new business activity.  During the year
progress continued in developing and streamlining the group's service offering
to ensure Ingenta can continue to provide a menu of services with price points
to suit the needs of all publishers within its target market.



Publisher Services revenues also benefited from the launch of ConsortiaLink, a
new service that assists publishers in negotiating licence sales to consortia of
libraries.  Significant further growth is expected from this activity, although
margins are relatively low as the majority of licence fee income is remitted
back to the publisher.



Specialist Websites



The Specialist Websites area also showed ongoing growth. A number of new sites
and enhancements were launched including the InfoTrac Plus service launched with
Gale Group during July; a multi-journal site for Ashley Publications' journal
collection; a French language version of the OECD site; new features for
Emerald's management and library journal site and a number of new sites for Reed
Education Publishing.



At 30 September 2002 Ingenta had launched in total some 220 websites for its
customers, including 60 major publication websites for reference works and
journal collections.  Of these, 57 sites were launched during the year, with 37
in the first half and the remaining 20 in the second.



Customers are attracted to Ingenta's Specialist Website services as it enables
them to build on their investment in the Publisher Services area and develop a
series of new online subscription products, and therefore derive new streams of
income, from their existing portfolio of publications. A further attraction is
Ingenta's ability to control user access to those websites on behalf of the
client through its proprietary access control software.



Specialist Websites again represented the largest contributor to the group's
activities, accounting for 44% of Ingenta's turnover for the year to 30
September 2002 (2001: 53%).  The average income for the division from the 57
sites launched during the year was £54,000 per site, although within this figure
there is a wide range of variation.



Even though some substantial client prospects, expected to be contracted in the
second half of the year, were delayed as referred to elsewhere, the new business
win rate was achieved in roughly equal amounts throughout the year on a straight
line basis.  Previously it was anticipated the rate would increase as the year
progressed.



Pay-Per-View



Pay-Per-View revenue represented 14% of turnover (2001: 17%). Ingenta delivered
over 14.9m documents online through its own brand sites during the year to 30
September 2002 and usage of those sites in September 2002, at over 2.6 million
visits, represented an 86% increase over September 2001.



Staff



Following the group's reorganisation in September 2002 to more appropriately
support the Board's revised outlook for growth, staff numbers at 30 September
2002 were 166 compared with 217 at the September 2001 year-end.  The Board is
confident this overall level of staffing will be broadly sufficient to sustain
the group's plans for the foreseeable future.



In addition, the group's management has been significantly strengthened at all
levels by new appointments into the sales, operational and financial areas.  In
particular, key appointments and promotions have been made of a new CTO and a
new VP, Marketing and User Services in September 2002; a new Financial
Controller in October 2002; a new Director of Client Management in November
2002; and a new VP, New Business in December 2002.



The staff and management at every level should be proud of what has been
achieved during the year and on the Board's behalf we would like to thank
everyone for their dedication and effort.



Summary, Current Trading and Outlook



To have continued to provide high levels of service to a growing number of
customers while also producing substantial organic  growth in business generated
during the year is a very considerable achievement. The year, however, was not
without its challenges, particularly the second-half slow down in anticipated
growth in the Specialist Website division, as a result of general economic
uncertainty. The benefits of the resulting decision to cut significantly the
group's cost base, to re-organise its operations and to strengthen its
management to deal with this new environment will flow through in the current
year.



Ingenta is a successful and dynamic market leader in a growing marketplace.
Essentially it provides publishers with, among other things, new products from
which they can derive new income streams, particularly the case in the
Specialist Website area.  The group also remains successful in growing its
customer base and providing them with progressively more services across its
three divisions.




The repeat nature of certain of the group's revenue streams (for example from
maintenance and upgrade contracts and revenue sharing) means the base of
actually contracted income (or that which is firmly anticipated) going into the
new financial year has increased significantly as a result of new business won
during the 2002 financial year and the review of revenue recognition policy
described above. The Board believes the figure going into the current financial
year to 30th September 2003 is substantially higher than the £9.0m it had
achieved going into the last financial year.



The above factors, taken together with the group's market position and overall
market potential, its relatively high margins, stable operating costs,
strengthened management team and re-organised operations, provides the Board
with confidence that the Group will move into reported profits for the current
year.  As well as aiming to deliver substantially increased trading performance,
the Board will actively seek additional ways of building shareholder value in
the coming financial period.





Martyn Rose                             Mark Rowse
Non-Executive Chairman                  Chief Executive

10th December 2002

Consolidated profit and loss account for the year ended 30th September 2002

                                                                                                                     
                                                       Year Ended   Year Ended
                                                       30/09/2002   30/09/2001
                                                        Unaudited      Audited
                                                               £m           £m
   Turnover                                                   9.3          9.9
   Cost of sales                                            (1.9)        (1.8)
   Gross Profit                                               7.4          8.1

   Operating costs (Note 1)                                (12.2)       (12.7)
   Exceptional items                                        (1.4)        (5.9)
   Depreciation                                             (1.1)        (1.0)
   Goodwill amortisation and write-off                     (19.4)        (5.2)
   National Insurance on share options                          -          0.1
   Total operating costs                                   (34.1)       (24.7)
   Other operating income                                     0.3            -

   Operating loss                                          (26.4)       (16.6)
   Interest receivable                                          -          0.3
   Loss on ordinary activities before taxation             (26.4)       (16.3)
   Tax on loss on ordinary activities                         0.6          0.1

   Loss for the financial year                             (25.8)       (16.2)

   Loss per share (basic and diluted)                      (44.7)p      (30.5)p

   Loss, excluding goodwill amortisation and 
   exceptional and non-recurring items                     £(6.4)m     £(11.0)m

   Loss per share, excluding goodwill amortisation 
   and exceptional and non-recurring items                 (11.1)p      (20.7)p

Note 1:     Included within Operating costs are £3.3m of expenses incurred 
during the year which will not recur in 2003 as a result of reorganisation 
during the year.




Consolidated balance sheet as at 30th September 2002

                                                                                                               
                                                     Year Ended   Year Ended
                                                     30/09/2002   30/09/2001
                                                      Unaudited      Audited
                                                             £m           £m
        Fixed Assets                                                                                           
                      Intangible assets                       -         19.8
                      Tangible assets                       1.7          2.7
                      Investments                           0.2            -
                                                            1.9         22.5
        Current Assets                                                                                         
                      Stocks and work in progress             -          0.2
                      Debtors                               2.7          2.2
                      Cash & bank                           1.2          2.2
                                                            3.9          4.6
        Creditors: amounts falling 
        due within one year                               (8.2)        (6.7)

        Net Current (liabilities)                         (4.3)        (2.1)

        Total assets less current liabilities             (2.4)         20.4

        Creditors: amounts falling 
        due after more than one year                      (1.1)        (0.4)

        Net (liabilities)/assets                          (3.5)         20.0


        Capital and reserves                                                                                   
                      Called up share capital               3.1          2.7
                      Shares to be issued                                5.5
                      Share premium account                18.1         10.3
                      Merger reserve                       11.1         11.1
                      Reverse acquisition reserve          12.7         12.7
                      Profit and loss account            (48.5)       (22.3)

        Equity shareholders' (deficit)/funds              (3.5)         20.0



Consolidated cash flow statement for the year ended 30th September 2002

                                                                                                                      
                                                         Year Ended   Year Ended
                                                         30/09/2002   30/09/2001
                                                          Unaudited      Audited
                                                                 £m           £m
  Cash flow from operating activities                                                                                 
     Operating loss (Note 2)                                 (26.4)       (16.6)
     Depreciation charge                                        1.1          1.0
     Profit on disposal of assets                             (0.2)             
     Amortisation/write-off of goodwill                        19.4          5.2
     Foreign exchange adjustment                              (0.3)          0.1
     (Increase)/Decrease in stocks and work in                  0.2        (0.2)
     progress                                                                   
     (Increase)/Decrease in debtors                           (0.5)          1.2
     Increase/(Decrease) in creditors                           2.2        (0.5)

  Net cash outflow from continuing operations                 (4.5)        (9.8)

  Returns on investments & servicing of finance                                                                       
     Net interest received                                        -          0.3
     Tax received/(paid)                                        0.7        (0.1)

  Capital expenditure & financial investments                                                                         
     Purchase of fixed assets                                 (0.2)        (1.4)
     Net cash inflow/(outflow) from acquisitions                0.1        (1.2)

  Net cash outflow before financing                           (3.9)       (12.2)

  Financing                                                                                                           
     Issues of shares at a premium                              3.2          6.9
     Repayment of principal under finance leases              (0.3)        (0.2)

  Net cash inflow from financing                                2.9          6.7

  Decrease in cash in the year                                (1.0)        (5.5)

  Note 2:                                                                                                             
     Cash flow from operations                               (21.7)       (10.7)
     Exceptional items                                        (1.4)        (5.9)
     Eliminated operating costs (see Note 1)                  (3.3)            -
     Operating loss                                          (26.4)       (16.6)
 
 
Statement of total recognised gains and losses for the year ended 30th September 2002
 

                                                                                             
                                                        Year Ended   Year Ended
                                                        30/09/2002   30/09/2001
                                                         Unaudited      Audited
                                                                £m           £m
  Loss for the financial period                              (25.8)       (16.2)
  Currency translation differences on                         (0.4)          0.2
  foreign currency net investments                                
  Total recognised losses for the period                     (26.2)       (16.0)
 
 



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