Interim Results

Ingenta PLC
13 May 2002





Date:         Embargoed until 07.00am, Monday 13th May 2002


Contacts:    Ingenta                           Website: www.ingenta.com
             Mark Rowse, Chief Executive       Tel: [phone] (13/5/02)
                                               Tel: [phone] (thereafter)
             David Callcott, Finance Director  Tel: [phone] (13/05/02)
                                               Tel: [phone] (thereafter)

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



Meetings:    A presentation for analysts will be held today at 9.30am and
a press briefing at 11.00am.

For further information regarding these briefings, please contact Hudson
Sandler, as above, on 020 7796 4133.





                                   Ingenta plc
                                Interim Results


The Board of 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,
announces its interim results.


The Board is pleased to report that in the six months to 31st March 2002 the
Company produced its maiden EBITDA profit, and that it is on target to achieve
its first reported pre-tax profits (excluding goodwill amortisation) for the
full year to 30th September 2002.


During the six months to 31st March 2002 the Company also continued to
experience rapid sales growth in all its markets, further growth in margins and
lower overhead costs.



Highlights



•       Sales up 52%

•       Maiden EBITDA profit of £0.1m (six months to 31st March 2001: £(3.6)m
        loss)

•       Second quarter profitable at the pre-tax level

•       Full year results expected to be profitable before goodwill amortisation
        and in line with expectations

•       Gross profit increased almost 70% from £3.5m to £5.9m

•       Gross margins up from 76% to 83%

•       Pre-tax loss, excluding goodwill amortisation, substantially reduced to
        £(0.6)m (2001: £(5.6)m)

•       Strong forward order book

•       Current trading continues to show substantial growth.



Commenting on the results, Martyn Rose, Chairman, said:



'I am delighted to report that Ingenta has delivered its first reported EBITDA
profit. The strong forward momentum of the business is now producing rapid
profits growth quarter by quarter, with the second quarter profitable at the
pre-tax level. The strong forward order book underpins a continuing and highly
visible trend of profit improvement in the second half of the year and as a
result management is confident that full year profits will be in line with
expectations.'



Mark Rowse, Chief Executive, added:



'To date we have invested in establishing both a leading market position for
Ingenta and also a technology platform that is able to sustain rapid growth
without substantially increasing costs. This

investment is now paying off, as a combination of rapid sales growth, increasing
gross margins and lower overheads drives profits rapidly upwards.'





                                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 - 12 million articles from over 5,400 online
publications and 20,000 fax delivered publications - is accessed by over 5
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.
  • Fees paid by customers for Specialist Website build and maintenance.
  • A share of Pay-Per-View article purchases and website subscription
    revenues.



For more information, see www.ingenta.com.




             Interim results for the six months to 31st March 2002


Financial Review


During the period, turnover increased by 52% to £7.1m (six months to 31st March
2001: £4.6m).  Gross profit increased markedly by almost 70% to £5.9m (2001:
£3.5m) and gross margins grew to 83% from 76% in the equivalent period in 2001.
Overheads were reduced from £7.1m to £5.8m, as a result of increased operational
efficiency following the investment in technology made during the previous
financial year, together with benefits derived from removing duplicated cost
following the integration of acquisitions.



The Company achieved a maiden EBITDA profit, amounting to £0.1m (2001: £(3.6)m).



Pre-tax losses, before goodwill amortisation, were substantially reduced at £
(0.6)m (2001:£(5.6)m), an improvement of £5.0m. Exceptional items of £(0.2)m
were incurred as a result of reducing staff numbers from 217 at 30th September
2001 to 200 at 31st March 2002.



Cash balances at the period end were £2.9m (30th September 2001: £2.2m),
including £1.9m in proceeds from share placings made to fund further development
of the HERON acquisition announced in March 2002.  Completion of the acquisition
has taken place since the period end and integration of HERON's activities into
Ingenta's Oxford and Bath operations is under way and progressing to plan.



Overall, a substantial and increasing proportion of the Company's revenues are
from recurring sources and this trend is expected to continue. In addition, the
Company benefits from an unusually high degree of forward visibility of future
revenues. Together these factors underpin continuing and sustained growth.



For the Company to have generated such a substantial increase in both sales and
margins, while at the same time operating off a lower overhead base, is not just
an endorsement of the business strategy of Ingenta but also a testament to the
hard work and dedication of all our members of staff. The Board would like to
thank all those at Ingenta for the part they have played in delivering this
major step forward for the Company, in achieving EBITDA profitability for the
first time.



Operational 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 for hosting and distributing 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, and a share of subscription revenue paid by third
party end-users to access those websites - Specialist Websites; and



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



Ingenta has long-term contracts with many of its customers, which provides it
with a highly visible and sustainable income stream. Additionally, around 80% of
Pay-Per-View transactions are debited against pre-paid and corporate accounts.



Publisher Services

Growth continued at a strong rate with the number of publishers working with
Ingenta increasing from 183 to 205, including 9 of the world's top 10 scholarly
publishers. In addition, 23 new contracts were concluded with existing customers
for them to take further services from Ingenta.  Revenues from Publisher
Services grew by 48% to £2.1m (six months to 31st March 2001: £1.4m),
representing 29% of turnover. The increased menu of online services offered by
Ingenta has contributed to a substantial increase in the average income per
publication hosted. New customers include the American Economics Association,
the Pan-American Health Organization and the Royal Meteorological Society.



Specialist Websites

The number of Specialist Websites created for publishers, self-publishing
societies and libraries rose from 163 to over 200. Revenues from Specialist
Websites grew by 73% over the comparable period in 2001 from £2.1m to £3.7m,
representing 53% of turnover. There is also a substantial amount of
pre-contracted sales already agreed for the second half of the financial year.
Highlights of the period include a major strategic partnership with the US-based
Gale Group, a business unit of Thomson Corporation, to create a new online
subscription service. The development of this service is on track to launch in
Summer 2002.  In addition, further sites were launched for Reed Educational
Publishing's Heinemann imprint, and further reference works were completed in
the series under development with McGraw-Hill, including Hurst's 'The Heart',
one of the leading cardiology reference works in the US.



An increasing proportion of turnover from Specialist Websites is recurring, as
Ingenta has charging arrangements that are linked to usage of the sites and
revenue-sharing.  The proportion of recurring revenue should continue to
increase in future periods as usage of existing sites grows, and new sites are
launched.



Pay-Per-View

Demand for Ingenta's end user and library services continues to rise with
turnover from this activity up from £1.1m in the six months to 31st March 2001
to £1.3m in the six months to 31st March 2002, representing some 18% of
turnover. Overall cost of delivery is reducing, which is increasing the average
gross margin benefit to the Company.



Current Trading and Prospects



All parts of the Company's activities continue to benefit from continuing strong
growth in sales and improving margins.  Publisher Services deals are being
concluded at record rates with both new and existing customers.  Demand for
Pay-Per-View document  purchasing is up by over 50% since the start of the
financial year and margins continue to improve from this activity.



A number of major new Specialist Websites contracts have been concluded in
recent weeks which, together with further increases in the recurring revenues
from sites already launched and work in progress, will contribute to significant
further growth from this activity in this second half of the year.



Overall, the levels of continuing growth in sales and margins, together with an
overhead base which has stabilised, resulted in the Company generating profits
before tax (excluding goodwill amortisation) in the second quarter of the
financial year.  The continuing forward momentum of the business and its high
quality revenues and forward visibility provide the Board with confidence in a
successful outcome for the year, together with positive cash generation in the
second half of the year.



Martyn Rose                                 Mark Rowse
Chairman                                    Chief Executive



13th May 2002



Ingenta plc
Consolidated Profit and Loss Account
for the 6 months ended 31st March 2002
                                                            6 months ended  6 months ended      Year ended
                                                             31 March 2002   31 March 2001    30 September
                                                                                                      2001
                                                               (unaudited)     (unaudited)       (audited)
                                                                       £'m             £'m             £'m

Turnover                                                               7.1             4.6             9.9
Cost of sales                                                        (1.2)           (1.1)           (1.8)

Gross profit                                                           5.9             3.5             8.1
Gross margin                                                           83%             76%             82%

Overheads                                                            (5.8)           (7.1)          (14.7)

EBITDA before exceptional items                                        0.1           (3.6)           (6.6)

Depreciation                                                         (0.5)           (0.5)           (1.0)

Exceptional items                                                    (0.2)           (1.5)           (3.8)

Loss before tax and goodwill amortisation                            (0.6)           (5.6)          (11.4)

Goodwill amortisation                                                (3.4)           (1.9)           (5.2)

Operating loss                                                       (4.0)           (7.5)          (16.6)
Interest                                                               0.0             0.2             0.3

Loss before tax                                                      (4.0)           (7.3)          (16.3)
Tax                                                                    0.0             0.0             0.1

Loss for the financial period                                        (4.0)           (7.3)          (16.2)


Loss per share (basic and diluted)                                    (7)p           (14)p           (31)p







Ingenta plc
Consolidated Balance Sheet
as at 31st March 2002                                                                             As at 30
                                                            As at 31 March  As at 31 March       September 
                                                                      2002            2001            2001
                                                               (unaudited)     (unaudited)       (audited)
                                                                       £'m             £'m             £'m

Fixed Assets
Intangible assets                                                     16.0            23.3            19.8
Tangible assets                                                        2.3             2.5             2.6
Investments                                                            0.2               -               -
                                                                      18.5            25.8            22.4

Current assets
Stocks and work in progress                                            0.5               -             0.2
Debtors: amounts falling due within one year                           2.1             2.4             2.2
Cash at bank and in hand                                               2.9             8.6             2.2
                                                                       5.5            11.0             4.6
Creditors: amounts falling due within one year                       (6.7)           (7.9)           (6.7)
Net current (liabilities) / assets                                   (1.2)             3.1           (2.1)

Total assets less current liabilities                                 17.3            28.9            20.3

Creditors: amounts falling due after more than one year              (0.2)           (0.3)           (0.3)
Provisions for liabilities and charges                                   -           (0.1)               -
Net assets                                                            17.1            28.5            20.0

Capital and reserves
Called up share capital                                                3.0             2.7             2.7
Shares to be issued                                                      -             5.5             5.5
Share premium account                                                 17.0            10.2            10.2
Merger reserve                                                        11.1            11.1            11.1
Reverse acquisition reserve                                           12.7            12.7            12.7
Profit and loss account                                             (26.7)          (13.7)          (22.2)

Equity shareholders' funds                                            17.1            28.5            20.0






Ingenta plc
Consolidated Cash Flow
as at 31st March 2002
                                                        6 months ended   6 months ended       Year ended
                                                         31 March 2002    31 March 2001     30 September
                                                                                                    2001
                                                           (unaudited)      (unaudited)        (audited)
                                                                   £'m              £'m              £'m

Cash flow from continuing operating activities
Operating loss                                                   (4.0)            (7.5)           (16.6)
Depreciation charge                                                0.5              0.4              1.0
Amortisation of goodwill                                           3.4              1.9              5.2
Foreign exchange adjustment                                      (0.4)                -              0.1
Increase in stocks and work in progress                          (0.2)                -            (0.2)
(Increase) / Decrease in debtors                                 (0.1)              0.7              1.2
Increase / (Decrease) in creditors                               (0.8)              0.7            (0.4)
Decrease in provisions                                               -            (0.1)            (0.1)

Net cash outflow from operating activities                       (1.6)            (3.9)            (9.8)

Returns on investments and servicing of finance
Net interest received                                                -              0.2              0.2
Tax received /(paid)                                               0.1            (0.1)            (0.1)
Capital expenditure and financial investments
Purchase of tangible fixed assets                                (0.2)            (0.8)            (1.3)
Net cash outflow from acquisitions                               (0.2)            (1.3)            (1.2)

Net cash outflow before financing                                (1.9)            (5.9)           (12.2)

Financing
Issue of shares at a premium                                       2.8              6.9              6.9
Repayment of principal under finance leases                      (0.2)            (0.1)            (0.2)
Net cash inflow from financing                                     2.6              6.8              6.7

Increase / (Decrease) in cash in the period                        0.7              0.9            (5.5)




Statement of group total recognised gains and losses
for the six months ended 31 March 2002
                                                        6 months ended   6 months ended       Year ended
                                                         31 March 2002    31 March 2001     30 September
                                                                                                    2001
                                                           (unaudited)      (unaudited)        (audited)
                                                                   £'m              £'m              £'m

Loss for the financial period                                    (4.0)            (7.3)           (16.2)
Currency translation differences on foreign currency             (0.4)            (0.1)              0.2
net investments
Total recognised losses for the period                           (4.4)            (7.4)           (16.0)







Ingenta plc
Notes to the Unaudited Interim Report
for the six months ended 31st March 2002



1  Basis of preparation

The Interim Financial Information has been prepared on the basis of the
accounting policies set out in the Group's Annual Report and Accounts for the
year ended 30th September 2001.


2  Reconciliation of reported share capital in the consolidated balance sheet
                                                                                                £'000
Allotted, called up and fully paid share capital of Ingenta plc at 1 October 2001               2,747
Issue of 1,330,000 ordinary shares for cash on 28 March 2002                                       67
Shares issued on exercise of share options during the period                                       33
Shares issued as deferred consideration for the acquisition of Catchword Ltd in prior             153
year
Allotted, called up and fully paid share capital of Ingenta plc at 31 March 2002                3,000


3  Publication of Non-Statutory Accounts

The financial information contained in this interim report is unaudited and has
not been reviewed by the auditors.  It does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985.  The comparative financial
information for the six months ended 31st March 2001 was neither audited nor
reviewed by the auditors.  Statutory accounts for the year ended 30th September
2001 incorporating an unqualified audit report have been filed with the
Registrar of Companies.


4  Basis of EPS Calculation

The basic loss per share has been calculated by dividing the loss for the period
by the weighted number of ordinary shares of 55,164,498 (6 months ended 31st
March 2001: 51,251,121; year ended 30th September 2001: 53,077,573) in issue
during the six month period to 31 March 2002.  The Company had no dilutive
ordinary shares in any of the periods and there is therefore no difference
between the loss per ordinary share and the diluted loss per ordinary share.










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