Interim Results - Pre-tax Profit Up 26%

Text 100 Group PLC 27 April 2000 'Strong maiden performance at Interims' * Turnover up 61% to £15 million * Pre-tax profit, before exceptionals, up 26% at £0.95 million * Good organic growth fuelled by new clients from blue chip new economy clients and technology companies * Two new brands established and Bite launched internationally * Strong start to second half of the year Tom Lewis, Chairman of Text 100 Group plc, the recently quoted international technology pr company, said: 'I am pleased to report a strong performance at Interims, following our enthusiastic reception in the City at flotation. We have continued to demonstrate our capacity for organic growth - both by adding new clients and establishing new start-ups. 'The Group has made a strong start to the second half of the year, and demand for our services remain high in all our geographic markets. As a result, the Board is confident that the Group will continue to show further progress at the full year.' Text 100 Interims The first six months to 31st January 2000 have undoubtedly been the most exciting and demanding in the Text 100 Group's 19 year history. The decision to float on the LSE in the immediate run up to the Millennium and amid all the anxiety about Y2K was not an easy or obvious choice, but it turned out to be well judged, and the company enjoyed an enthusiastic reception in the City - with twenty seven institutions applying to take stock. Text 100 has produced a strong performance at the interim stage, with turnover up 61% at £15 million and pre-tax profit up 26% at £951k, before exceptional flotation expenses of £434k. EPS on an adjusted basis rose 3% to 2.55p, and the interim dividend increased 50% to 0.6p. This level of increase of the dividend at the interim stage is the result of the move to a twice-yearly dividend from the previous quarterly payment. The Board will continue to recommend a progressive increase in the full-year dividend whilst meeting the reinvestment needs of the business. The rate of growth in turnover again demonstrates the Group's capacity for organic growth - both in terms of winning new clients across the globe and establishing new start-up operations as appropriate. Growth in pre-tax profits is also strong, but restrained by the inevitable losses incurred by new start-up subsidiaries in their early months. There has also been substantial investment in recruitment and training needed to sustain continuing growth. During the first six months of the year the group has established a totally new brand in London and Sydney - AUGUST.ONE COMMUNICATIONS. Two of the Group's existing brands set up new overseas start-up operations. In September, the Text 100 brand established an operation in Hong Kong, while in October Bite Communications opened its first overseas subsidiary in San Francisco. This was a milestone for the Group and demonstrates Bite's capability of becoming an international PR company in its own right. In addition the company launched a specialist online marketing consultancy in the US called BrandX. Much of the Group's growth has come from the addition of new clients. These include a good mix of blue chip new economy companies such as AltaVista, Virgin Biznet, Phone.com, AskJeeves.com and Getty Images as well as work for some of the world's prestigious technology companies including Handspring, Compaq, Network Associates, Unisphere, MCI Worldcom and Motorola. Recently the Group appeared at No. 19 in a calendar 1999 league table of international pr firms with significant operations in the USA, researched and prepared by the Council of PR firms and published by O' Dwyer. This table again confirmed the Text 100 Group as the largest independent and international technology-specialist PR group. The Group has made a strong start to the second half of the year, and demand for its services remains high in all of its geographical markets. As a result, the Board is confident that the Group will continue to show further progress at the full year. For further information, contact: Tom Lewis, Chairman, Text 100 Group 020 8242 4100 David Dewhurst, Finance Director 020 8242 4100 Nick Denton, Hogarth Partnership 020 7357 9477 TEXT 100 GROUP PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 31 JANUARY 2000 Six Six Year Months Months ended ended ended 31 January 31 January 31 July 2000 1999 1999 (UNAUDITED) (UNAUDITED) (AUDITED) £'000 £'000 £'000 Turnover (Note 3) 15,015 9,324 22,771 Other external charges (2,520) (931) (3,882) ------- ------- ------- Turnover less other external charges 12,495 8,393 18,889 Staff costs 7,945 5,508 11,027 Depreciation 435 292 653 Other Operating Charges: Exceptional Flotation Costs (Note 4) 434 - - Other Operating Charges 3,160 1,808 5,412 Total other operating charges 3,594 1,808 5,412 ------- ------- ------- (11,974) (7,608) (17,092) ------- ------- ------- Operating Profit 521 785 1,797 Interest receivable and similar income 6 - 14 Interest payable and similar charges (10) (30) (111) ------- ------- ------- Profit on Ordinary Activities before Taxation 517 755 1,700 Tax on profit on ordinary activities (421) (258) (801) ------- ------- ------- Profit on Ordinary Activities after Taxation 96 497 899 Minority Interests (44) (29) (46) ------- ------- ------- Profit Attributable to Members of the Holding Company 52 468 853 Equity dividends paid and proposed (Note 6) (119) (83) (309) ------- ------- ------- Retained (Loss)/Profit for the Period (67) 385 544 ======= ======= ======= Basic Earnings per Share (Note 7) 0.27p 2.48p 4.52p Diluted Earnings per Share (Note 7) 0.25p 2.39p 4.35p Adjusted Earnings per Share (Note 7) 2.55p 2.48p 4.52p The profit and loss account for the six months ending 31 January, 2000 and 31 January, 1999 and the year ended 31 July 1999 relate to the continuing activities of the Group. TEXT 100 GROUP PLC CONSOLIDATED BALANCE SHEET AS AT 31 JANUARY 2000 January July January 2000 1999 1999 --------- -------- --------- (UNAUDITED) (AUDITED) (UNAUDITED) £'000 £'000 £'000 FIXED ASSETS Tangible assets 2,314 1,741 1,667 Investments (Note 8) 1,509 1,509 844 ------- ------- ------- 3,823 3,250 2,511 CURRENT ASSETS Debtors 8,227 6,469 6,057 Cash at bank and in hand 646 562 694 ------- ------- ------- 8,873 7,031 6,751 CREDITORS - Amounts falling due within one year (5,814) (5,538) (5,316) ------- ------- ------- NET CURRENT ASSETS 3,059 1,493 1,435 ------- ------- ------- TOTAL ASSETS LESS CURRENT LIABILITIES 6,882 4,743 3,946 CREDITORS - Amounts falling due after more than one year (953) (409) (395) PROVISIONS FOR LIABILITES AND CHARGES - Deferred tax - (22) - ------- ------- ------- NET ASSETS 5,929 4,312 3,551 ======= ======= ======= EQUITY CAPITAL AND RESERVES Called up share capital 1,121 1,071 1,071 Share premium account 2,711 1,162 604 Profit and loss account 1,985 2,009 1,819 ------- ------- ------- TOTAL EQUITY SHAREHOLDERS' FUNDS 5,817 4,242 3,494 MINORITY INTERESTS 112 70 57 ------- ------- ------- 5,929 4,312 3,551 ======= ======= ======= TEXT 100 GROUP PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 JANUARY 2000 Six Six Year Months Months ended ended ended 31 January 31 January 31 July 2000 1999 1999 (UNAUDITED) (UNAUDITED) (AUDITED) £'000 £'000 £'000 Net Cash (Outflow)/Inflow from Operating Activities (Note 9 (1)) (405) 751 2,225 Returns on Investments and Servicing of Financing Interest received 6 - 13 Interest paid (10) (30) (111) Minority interest dividends paid - - (7) ------- ------- ------- Net Cash Outflow from Returns on Investments and Servicing of Finance (4) (30) (105) Net Cash Outflow from Taxation Corporation tax paid (531) (360) (604) Capital Expenditure and Investing Activities Payments for long term deposits (28) (19) (52) Payments to acquire own shares - - (200) Payments to acquire tangible fixed assets (1,007) (720) (1,102) Receipts from sales of tangible fixed assets 137 78 112 ------- ------- ------- Net Cash Outflow from Capital Expenditure and Investing Activities (898) (661) (1,242) Equity Dividends Paid (133) (96) (306) ------- ------- ------- Net Cash Outflow before Financing (1,971) (396) (32) Financing Long term bank loan 700 - - Issue of share capital 1,599 - - Net Capital (Outflow)/Inflow on hire purchase contracts (22) 160 297 ------- ------- ------- Net Cash Inflow from Financing 2,277 160 297 ------- ------- ------- Increase/(Decrease) in Cash for the Period (Note 9 (2)) 306 (236) 265 ======= ======= ======= NOTES TO THE INTERIM ACCOUNTS FOR THE SIX MONTHS ENDED 31 JANUARY 2000 1) FINANCIAL INFORMATION The financial information is for the six months ended 31 January 2000 and is neither audited nor reviewed as defined by APB Bulletin 1993/1 and 1998/6. The balance sheet and profit and loss account do not constitute statutory statements within the meaning of Section 240 of the Companies Act 1985 (as amended). The results for the year ended 31 July 1999 have been extracted from the financial statements of the Group on which an unqualified report from the auditors has been received and which have been filed with the Registrar of Companies. 2) CHANGE OF ACCOUNTING POLICY There has been a change of accounting policy in relation to exchange rates. In order to increase accuracy of reporting for the profit and loss report only, an average rate has been used for the period ending January 31 2000. In previous accounts reported, the period closing rate has been used as is used in balance sheet reporting. The Directors do not consider that this change has had a material effect on the reported profit, therefore the comparatives have not been restated. 3) SEGMENTAL INFORMATION Analysis of turnover, profit before taxation and net assets by geographic origin and destination. Europe, North Asia Total Middle East America Pacific & Africa £'000 £'000 £'000 £'000 Six Months ended January 31, 2000 Turnover 11,216 2,901 898 15,015 Profit before taxation 85 * 471 (39) 517 Net Assets 5,456 802 (329) 5,929 Year ended July 31, 1999 Turnover 18,450 3,481 840 22,771 Profit before taxation 1,261 705 (266) 1,700 Net Assets 3,813 537 (38) 4,312 Six Months ended January 31, 1999 Turnover 7,744 1,443 137 9,324 Profit before taxation 673 204 (119) 755 Net Assets 3,228 403 (80) 3,551 * Note: Profit for the six months ended January 31, 2000 in EMEA was significantly reduced due to the expenses of the share float process. Fees of approximately £535k were incurred as a result during November and December 1999 of which £434k were charged through the profit and loss account. The turnover relates to one class of business. The Directors consider these regions to be separate geographic markets and the markets within which the group operates. 4) EXCEPTIONAL FLOTATION COSTS Exceptional flotation costs of £535k represent the fees and related expenses incurred in the process of obtaining a listing on the London Stock Exchange. Of these, £101k has been netted against share premium in accordance with section 130 of the Companies Act 1985 (as amended). 5) TAX ON PROFIT ON ORDINARY ACTIVITIES The tax charge is disproportionately high due to higher rates of tax in some overseas territories where profits are significantly higher than last year and losses in certain subsidiaries which cannot be offset against the profit of group companies in other countries. 6) DIVIDENDS An interim dividend of 0.6p (1999: 0.4p) per share will be paid on 31 May 2000 to shareholders on the register of members on 12 May 2000. 7) EARNINGS PER SHARE Earnings per share has been calculated in accordance with FRS14, using earnings of £ 52k (1999 full year: £853k and 1999 interim: £ 468k) and the weighted average number of shares in issue of 19,077,221 (1999 year end: 18,845,187 and 1999 interim 18,848,519). Diluted earnings per share has also been calculated on the weighted average number of shares in issue, as adjusted by potential ordinary shares of 20,667,096 (1999 year end: 19,582,528 and 1999 interim 19,556,427). The adjusted EPS has been calculated by adding £434k of flotation costs back to the Profit attributable to shareholders of £52k. 8) INVESTMENTS This represents investment in own shares and is the cost of shares held by the Company Employee Share Ownership Plan Trust (ESOP) in the Company. The market value at 31 January 2000 was £ 10,427k (31 July 1999 was £2,510k). 9) NOTES TO THE CASH FLOW STATEMENT (1) Reconciliation of Operating Profit to Net Cash Inflow from Operating Activities. Six Months Six Months Year ended ended ended Jan 31 2000 Jan 31 1999 July 31 1999 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Operating profit 521 785 1,797 Depreciation 435 293 653 Exchange Movements 12 4 7 Profit on sale of tangible fixed assets (32) (16) (84) Increase in debtors (1,225) (1,082) (1,461) (Decrease)/Increase in creditors (116) 767 1,313 ---------------- ----------- ------------ Net cash (Outflow)/Inflow from operating activities (405) 751 2,225 ================ =========== ============ (2) Reconciliation of Net Cash Flow to movement in Net Funds. Six Months Six Months Year ended ended ended Jan 31 2000 Jan 31 1999 July 31 1999 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Increase in cash at bank and in hand in the year 84 348 216 Cash inflow/(outflow) from decrease in bank account 222 (584) 49 ---------------- ----------- ------------ Increase/(decrease) in cash for the year 306 (236) 265 Cash outflow from bank loan (700) - - Net cash inflow/(outflow) under hire purchase contracts 37 (152) (268) ---------------- ----------- ------------ Changes in net funds from cash flows (357) (388) (3) ---------------- ----------- ------------ Interest element of hire purchase contract payments (15) (9) (29) ---------------- ------------ ------------ Movement in net debt in the year (372) (397) (32) Net debt at period beginning (578) (546) (546) ---------------- ------------ ------------ Net debt at period end (950) (943) (578) ================ =========== ============

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