Interim Results

Ingenta PLC
29 June 2004



Date:                Immediate, Tuesday 29 June 2004

Contacts:            Martyn Rose, Non-Executive Chairman

                     Mark Rowse, Chief Executive

                     Ingenta

                     Tel:  [phone] (29/6/04)

                     Tel:  [phone] (thereafter)

                     Website:  www.Ingenta.com



                     Alistair Mackinnon-Musson

                     Philip Dennis

                     Hudson Sandler

                     Tel:  [phone]

                     Email:  [e-mail]





                                  Ingenta plc

                                Interim Results





Ingenta plc, the technology and services provider to the publishing and
information industries, is pleased to announce its Interim Results for the six
months to 31 March 2004.



The key points are:



•        improved profit margins

•        further reduction in overheads and

•        strengthened balance sheet



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

'Ingenta continued to make good progress in the first six months and the Board
is confident of continuing improvements in the second'.




                                  Ingenta plc



        UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2004



Financial Review





Ingenta continued to make progress towards profitability in the 6 months to 31
March 2004.



The group's exposure to the US$ largely contributed to slightly lower sales in
the period (£3.6 million) when compared to the second half of the 2003 fiscal
year (£3.9 million) and represented a 22 per cent. reduction on the similar
period of 2003 (£4.6 million). Increased profit margins of 81 per cent. (2003:
74 per cent.) and a further £1.4 million reduction in overheads to £3.3 million
in the first half (2003: £4.7 million) resulted in substantially reduced losses
before tax of £(0.7) million (2003: £(1.8) million).



The balance sheet was strengthened by the successful Placing undertaken in March
2004 which raised £3 million, net of expenses, and the group had cash resources
of £1.5 million at 31 March 2004 (30 September 2003: borrowings of £(0.3)
million).



Having taken advice on the effects of new International Reporting Standards
which are likely to affect the current financial year, the Board has concluded
that under the group's accounting policies, software design and development
costs will be treated as additions to tangible fixed assets where reasonable
estimates of the economic benefits can be made and an enduring asset is created.




As a result, costs incurred in this category during the period amounting to
some £0.4 million have been capitalised and depreciation will be charged on a
straight line basis over three years from the point when the asset is brought
into use.





The group's trading performance in the period remained affected by the '
knock-on' effect of the previously reported slowdown in order intake and
customer cancellations experienced during 2003. Trading during the first half of
fiscal 2004 has, however, shown substantial improvement, with contracts
concluded and business indicated from existing and new customers for an
aggregate value of over £2 million of new business. The benefits of these new
business wins will begin to flow through in the second half of the current year.



A summary of the activities in each of the group's main business areas is set
out below.



Publisher Services



The number of publishers working with Ingenta again increased, from 254 at 30
September 2003 to 270, including seven of the world's top eight scholarly
publishers. Overall, almost 70 new contracts were concluded with existing and
new customers during the period.



Renewal rates were encouraging, with over 98 per cent. of customers whose
contracts expired during the period choosing to renew. As a result, revenues
increased by 7 per cent. when compared to the second half of fiscal 2003, to
represent 45 per cent. of group sales.



Specialist Websites



The number of Specialist Websites being operated by Ingenta on behalf of
publishers and self-publishing societies remained broadly similar during the
period at 90, while the number of websites operated for libraries reduced from
161 to 107, due to a consolidation of the services provided to library consortia
members.



Revenues from Specialist Websites, representing 36 per cent. of group turnover,
reduced during the period due to a lower number of new sites launched. Work
undertaken on a number of new contract wins during the period has not yet been
recognised as turnover in these results but will contribute to the substantial
amount of pre-contracted sales and recurring revenues to be recognised in the
second half of the financial year and beyond.





Pay-Per-View



Demand for Ingenta's online document services remained steady compared to the
second half of fiscal 2003, at 19 per cent. of turnover. Overall cost of sales
in this operation further reduced as users chose to switch from selecting low
margin fax delivery of their articles to higher margin online delivery, thereby
increasing the average gross margin contribution to the group.



Operations and Staff





Further progress was made in streamlining operations at the group's UK and US
locations as a result of continuing investment in technology. Together with the
positive effect of exchange rate movements, this resulted in overheads being
reduced by a further £1.4 million when compared with the same period the
previous year.



Overall staff numbers were slightly up from 127 at 30 September 2003 to 130 at
31 March 2004. The Board would like to thank all members of Ingenta's staff for
their continuing hard work in delivering high levels of service to our
customers.



Change of Financial Year





Most of the group's customers operate on a fiscal cycle from January to
December, equivalent to the usual subscription period for their publications.
This is reflected in the contracts which Ingenta has with its customers, which
tend to operate on a calendar year basis.



Decisions by customers about purchasing new services are usually made in the
first half of the calendar year, for delivery during the autumn. The consequence
of this is that decisions taken in one fiscal year for Ingenta often affect the
group's following financial year, and that revenue on new service launches is
often recognised close to the group's current year end of 30 September, making
forecasting of revenues and profits more difficult. The Board has therefore
decided that in order to bring the reporting of the group's results more into
line with its activities and those of its customers, its fiscal year should run
from 1 January to 31 December and that the current financial reporting period
should be extended to 31 December 2004. As a result, the group will next report
audited results in March, 2005 for the 15 months to 31 December 2004.
Appropriate guidance will also be provided to enable year-on-year comparisons to
be made for the year ending 30 September 2004.



Strategy





As announced in the circular to Shareholders dated 24 February 2004, the Company
has been seeking to accelerate growth in turnover and profits both organically
and through acquisition. With a reduced operating cost base, strengthened sales
activities and high operating margins, any incremental increase in turnover has
the potential to deliver rapidly increasing profits.



The Board of Ingenta has therefore adopted a strategy of accelerating the
Company's growth in two ways:



•        by broadening the range of technology services offered by Ingenta to
publishers to manage the publishing process, both for online and printed
content; and



•        by broadening the range of publishing market segments currently
targeted by the Company beyond the academic and professional publishers which
form the bulk of Ingenta's 280-strong customer list today.



The results of this strategy will be to significantly increase the Company's
addressable market, whilst building on its proven track record of delivery of
technology-based services to the publishing industry.



Current Trading and Prospects





Results for the second half of the current financial year will benefit from a
combination of deferred revenue to be recognised during the period, further
invoicing under recurring contracts and work in progress which, in aggregate,
equate to some £4.4 million for the second half of the year. Taken together with
additional new business expected to be closed during the second half, the Board
is confident that the group will continue to demonstrate continued improvements
in trading.






UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2004


Ingenta plc
Consolidated Profit and Loss Account
for the 6 months ended 31 March 2004
                                                            6 months ended  6 months ended      Year ended
                                                             31 March 2004   31 March 2003    30 September
                                                                                                      2003
                                                               (unaudited)     (unaudited)       (audited)
                                                                       £'m             £'m             £'m

Turnover                                                               3.6             4.6             8.5
Cost of sales                                                        (0.7)           (1.2)           (2.0)

Gross profit                                                           2.9             3.4             6.5

Overheads                                                            (3.6)           (5.2)           (9.3)

Loss before tax                                                      (0.7)           (1.8)           (2.9)
Tax                                                                      -               -             0.9

Loss for the financial period                                        (0.7)           (1.8)           (2.0)

Loss and diluted loss per share                                     (0.6)p            (3)p            (2)p








Ingenta plc
Consolidated Balance Sheet
as at 31 March 2004
                                                            As at 31 March  As at 31 March        As at 30
                                                                                                 September
                                                                      2004            2003            2003
                                                               (unaudited)     (unaudited)       (audited)
                                                                       £'m             £'m             £'m

Fixed Assets
Tangible assets                                                        1.1             1.3             1.1
Investments                                                            0.2             0.2             0.2
                                                                       1.3             1.5             1.3
Current assets
Debtors                                                                2.0             2.4             2.4
Cash at bank and in hand                                               1.5             1.6               -
                                                                       3.5             4.0             2.4
Creditors: amounts falling due within one year                       (4.6)           (7.6)           (5.7)
Net current liabilities                                              (1.1)           (3.6)           (3.3)

Total assets less current liabilities                                  0.2           (2.1)           (2.0)

Creditors: amounts falling due after more than one year              (0.5)           (0.8)           (0.6)
Provisions for liabilities and charges                               (0.3)           (0.6)           (0.5)
Net liabilities                                                      (0.6)           (3.5)           (3.1)

Capital and reserves
Called up share capital                                                6.7             5.2             5.4
Share premium account                                                 19.8            17.8            18.1
Merger reserve                                                        11.0            11.0            11.0
Reverse acquisition reserve                                           12.7            12.7            12.7
Profit and loss account                                             (50.8)          (50.2)          (50.3)

Equity shareholders' deficit                                         (0.6)           (3.5)           (3.1)






Ingenta plc
Consolidated Cash Flow
6 months ended 31 March 2004
                                                        6 months ended   6 months ended       Year ended
                                                         31 March 2004    31 March 2003     30 September
                                                                                                    2003
                                                           (unaudited)      (unaudited)        (audited)
                                                                   £'m              £'m              £'m

Cash flow from continuing operating activities
Operating loss                                                   (0.7)            (1.8)            (2.8)
Depreciation charge                                                0.3              0.5              0.7
Foreign exchange adjustment                                        0.1                -              0.2
Decrease in debtors                                                0.1              0.1              0.5
Decrease in creditors                                            (0.7)                -            (2.5)
Decrease in provisions                                           (0.2)            (0.1)            (0.1)

Net cash outflow from operating activities                       (1.1)            (1.3)            (4.0)

Tax received                                                       0.4                -              0.5
Capital expenditure and financial investments
Purchase of tangible fixed assets                                (0.4)                -            (0.1)
Net cash (outflow)/inflow from acquisitions                                           -                -

Net cash outflow before financing                                (1.1)            (1.3)            (3.6)

Financing
Issue of shares net of expenses                                    3.0              1.8              2.3
Repayment of principal under finance leases                      (0.1)            (0.2)            (0.3)
Net cash inflow from financing                                     2.9              1.6              2.0

Increase / (decrease) in cash in the period                        1.8              0.3            (1.6)




Statement of group total recognised gains and losses
for the six months ended 31 March 2003
                                                        6 months ended   6 months ended       Year ended
                                                         31 March 2004    31 March 2003     30 September
                                                                                                    2003
                                                           (unaudited)      (unaudited)        (audited)
                                                                   £'m              £'m              £'m

Loss for the financial period                                    (0.7)            (1.8)            (2.0)
Currency translation differences on foreign currency               0.1                -              0.1
net investments
Total recognised losses for the period                           (0.6)            (1.8)            (1.9)





Ingenta plc

Notes to the Unaudited Interim Report

for the six months ended 31 March 2004



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 30 September 2003 which have remained unchanged.



2                    Reconciliation of reported share capital in the
consolidated balance sheet


                                                                                               £
Allotted, called up and fully paid share capital of Ingenta plc at 1 October 2003           5,414,372
Issue of 26,250,000 ordinary shares for cash on 18 March 2004                               1,312,500

Allotted, called up and fully paid share capital of Ingenta plc at 31 March 2004            6,726,872



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.  Statutory accounts for the
year ended 30 September 2003 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 110,295,560 (6 months to 31 March
2003 : 63,764,927; year ended 30 September 2003 : 84,906,207) in issue during
the 6 month period ended 31 March 2004.  The company had no dilutive ordinary
shares in issue in any of the periods and there is therefore no difference
between the loss per ordinary share and the diluted loss per ordinary share.



5                   Copies of Announcement



Copies of this announcement will be available from the company's registered
office at 23-38 Hythe Bridge Street, Oxford OX1 2ET.


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