Final Results

Proteome Sciences PLC
28 June 2004

    
                                    PRESS RELEASE

For immediate release                                               28 June 2004

                     RESULTS FOR THE YEAR ENDED 31 DECEMBER 2003

                                      HIGHLIGHTS
     
•    Results
     (including former Aventis proteomics activities for first time for a full
     period)
          
     -    Headline loss, excluding non-cash operating costs, £4.26 million 
          (2002: £3.08 million loss), as referred to in note 3b to the financial 
          information.
          
     -    Retained loss for the financial year £6.78 million (2002: £4.1 
          million) after charging non-cash operating costs of £1.95 million 
          (2002: £0.71 million).

     -    Cash and cash on deposit balance at year end of £6.16 million (2002:
          £4.26 million).

     -    Cash burn remains at a low and predictable rate and business remains
          well funded.
     
•    Proteomics
          
     -    Sensitizer(R) developed into family of reagents comprising Sensitizer
          (R) Tags, Protein Sequence Tags(R) and Tandem Mass Tags(R). Protein 
          Sequence Tags(R) expected to be deployed first.

     -    Developed DiPPA (differential phosphopeptide arrays) and successfully
          validated through discovery of novel kinase activity as potential new 
          drug targets.

     -    Excellent progress with ProteoSHOP(R) discovery of protein markers in
          Alzheimer's disease (AD) for diagnostic and therapeutic applications.

     -    Acquired well characterised sample sets including BSE, vCJD and AD.

     -    Ten patents granted and seven major new patent applications filed -
          increased asset value and accelerated commercialisation.

     -    Relocation of Frankfurt operations to purpose built facility will
          increase efficiency and reduce cost.

•    Commercial Activity

     -    Stroke marker:
          
          -    Point of care testing - Collaboration progressing well with 
               Biosite Inc. Screening against large panels of stroke patient 
               serum obtained very high levels of sensitivity and specificity.

          -    High throughput screening - Proposals received for exclusive 
               license alongside ongoing discussions with a number of major 
               diagnostics companies on a non-exclusive basis.

     -    Ante-mortem test for BSE with IDEXX Laboratories, Inc., proceeding
          smoothly; enhanced by large collection of new samples.

     -    New vCJD samples from MRC Prion Unit will accelerate validation for
          blood bank screening and vCJD detection.

     -    High sensitivity/specificity panel of diagnostic markers for AD -
          currently there is no objective clinical assay.

     -    Discovery of novel kinase activity as potential drug targets for AD.
          Commercial partners for both AD applications are being actively 
          pursued.

     -    Discussions ongoing to create specialist cancer proteomics entity vs
          outlicensing markers.

     -    Following further work and granting of IP, Sensitizer(R) Family now
          ready to be licensed.


•    Current outlook
          
     -    Widening pipeline of proprietary biomarkers and strategic alliances
          from ProteoSHOP(R).

     -    Commercialisation process well underway, shifting the equilibrium to
          generating sustainable and growing revenue and royalties moving into 
          2005.

•    Veri-Q Inc.
          
     -    Commercialisation of synthetic oligonucleotides getting firmly back on
          track.

•    Intronn, Inc.

     -    High capacity screen for PTM's (pre-transplicing molecules) completed.

     -    Advanced RNA Therapeutic programmes in liver - Haemophilia, AAT and
          dyslipidemia.

     -    Good progress made with focus now on existing therapeutic programmes
          (cystic fibrosis, cancer, Alzheimer's and collagen disease) and 
          substantial new opportunities in molecular imaging.

     -    Increased shareholding to 40% through subscription of US$3.5m in
          internal funding round in June 2004.

     -    Adequate finance for Intronn should enable it to make it through to
          clinical trials and partnering programmes.

Commenting on these results, Christopher Pearce, Chief Executive of Proteome
Sciences, said:

'I am delighted to be able to report that 2003 was a year of considerable
progress across the business and one during which Proteome Sciences firmly
established a world leading position in the field of applied proteomics.  This
has happened at a time when there has also been an exponential increase in the
level of recognition and acceptance within the life sciences industry of
proteomics and the scope of its commercial application and value.

'Good progress is being made with our existing commercial agreements and we are
also receiving considerable interest from prospective partners for strategic
collaborative and licensing deals using our ProteoSHOP(R) toolbox.

'The commercialisation process is well underway and having a significant impact
on the business, shifting the equilibrium to generating sustainable and growing
revenue and royalties as we move into 2005.  This will be combined with
increasing visibility of a full and widening pipeline of proprietary biomarkers
and strategic alliances.  Against this background, we can only look forward to
the future with increasing confidence.'

                                      ENDS


Attached: Full text of Chairman's statement, consolidated profit and loss
account, consolidated balance sheet, consolidated cashflow statement and notes
to the financial information.


For further information please contact:

Proteome Sciences plc
www.proteomics.com
Christopher Pearce, Chief Executive   Tel:       [phone]
                                      Email:   [e-mail]

Public Relations for Proteome Sciences
IKON Associates
Adrian Shaw                           Tel:       [phone]
                                      Mobile: [phone]
                                      Email:   [e-mail]

Notes to Editors:

Proteome Sciences plc applies high sensitivity proteomics to identify and
characterise differential protein expression in diseases for diagnostic,
prognostic and therapeutic applications.  It has to date developed sensitive
blood assays for stroke, vCJD, BSE, solid organ transplant rejection and
Alzheimer's disease.

The main focus of its research currently addresses neurological,
neurodegenerative, diabetes/obesity, oncology and cardiovascular conditions.
The process of commercialisation is being actively pursued across the portfolio
of the Company's programmes and to date licensing deals have been signed for the
commercialisation of tests for Stroke and TSEs.

Proteome Sciences is headquartered in Cobham, Surrey in the UK and has
laboratories at King's College Hospital, London and in Frankfurt.  It employs 40
full time scientists in addition to its corporate and business development
staff.  The Company is listed on the Alternative Investment Market.



It gives me great pleasure to report on the progress made in the year under
review, a period when the Company has enjoyed considerable success both
scientifically, corporately and commercially.

Following the acquisition of the proteomics activities of Aventis in Frankfurt
in the third quarter of 2002, Proteome Sciences has successfully completed the
integration of the Frankfurt R&D capabilities with the activities undertaken at
the London research facilities.  This has resulted in a number of integrated
collaborations spanning technology evaluation and implementation, bioinformatics
and disease applications.  Considerable synergies have been achieved through
this process, which will become more clearly evident in due course.

Since acquisition, the Frankfurt activities have been re-focused from technology
development to high-value technology application.  The name of the division has
been changed to Proteome Sciences R&D GmbH & Co. KG (PS R&D) and it operates as
a contract research provider to Proteome Sciences plc, with all non-research
functions including business development, patents, strategic management, R&D and
financial functions undertaken from the UK Head Office.  PS R&D will re-locate
in July from Hoechst Industriepark to a purpose built facility at the new
technology park in Frankfurt - Frankfurt Biotechnology Innovation Centre (FIZ) -
currently under construction to accommodate life sciences and technology
departments from the University of Frankfurt, the new Max Planck Institute and
leading edge technology companies, primarily in the field of life sciences,
proteomics and genomics.  The move will increase the levels of efficiency and
productivity within PS R&D and will result in a reduction in costs and
overheads.

Intellectual property (IP) is a crucial and often overlooked aspect of Proteome
Sciences' activities.  There is no point in pioneering leading edge research to
effect novel discoveries to then find that the IP cannot or has not been
adequately protected.  The Company has embarked on a particularly busy and
fertile period of activity over the last eighteen months, reflected by the
issuance of ten principal patent grants covering a broad range of applications
for the diagnosis and detection of cancer in blood and across a number of
chemical tags and reagents from the 'Sensitizer(R) family'.

In addition to the patents that have now been granted, seven major new patent
applications have been filed incorporating compelling data and results from
candidate proteins showing promise as diagnostics and/or therapeutic targets for
brain disorders, stroke, Alzheimer's disease (both diagnostic markers and novel
drug targets), TSE and chemical tagging and software.  These should considerably
enhance the asset value of the Company and, at the same time, expand and
accelerate the commercial exploitation of the proprietary biomarkers discovered
and the chemical reagents and tags developed in Germany.

Proteomics

It is a commitment of Proteome Sciences to secure access to the next generation
of proteomics technologies which promise to enhance the chances of discovering
biologically and commercially relevant protein markers and targets.  This
implies that in areas where adequate technologies are not currently available,
Proteome Sciences has the ability to develop its own proprietary solutions.

At its Frankfurt R&D site, the Company is developing a 'Sensitizer(R) Family' of
reagents with a common feature: these increase the number of peptides and
proteins that can be identified and quantified from complex protein mixtures.
Whilst the 'Sensitizer(R)' feature is common to all the classes of molecules,
the manner in which they achieve their effect is slightly different in each
case, giving each member of the family a unique application.  Accordingly, the
range of these different molecules are classified as the 'Sensitizer(R) Family'.

These consist of:

Sensitizer(R) Tags        -   Increased sensitivity of signal detection by 
                              MALDI-TOF by improved ionisation of peptides and 
                              subsequent improved protein identification.  
                              CombiSensitizer(TM) tags Sensitizer(R) unite 
                              peptide signal amplification with relative 
                              quantification.


Protein Sequence Tags(R)  -   Increased number of protein identifications and 
                              relative quantifications by reduction of sample 
                              complexity.
PST(R)

Tandem Mass Tags(R)       -   Isobaric multiplexing ability without increasing 
TMT(R)                        complexity combined with accurate, sensitive
                              protein identification and quantification.


The reagents are in various stages of development and validation.  The Protein
Sequence Tags(R) are expected to be the first to be deployed for routine use.

A principal application of the ProteoSHOP(R) toolbox focuses on the discovery
and validation of human diagnostic and prognostic protein markers in easy
accessible body fluids such as for example human serum, plasma and cerebrospinal
fluid (CSF).  The plasma proteome is probably the most complex proteome in the
human body.  This is caused by the presence of numerous post-translationally
modified forms of each protein and by a high variety of distinct
immunoglobulins, but most challenging for analysis remains its enormous dynamic
range.  Proteome Sciences has implemented procedures, including the subtraction
of very high abundant proteins from body fluids, thereby enabling the detection
and analysis of lower abundant components of the proteome and resulting in a
much greater likelihood of relevance and utility for diagnostic and therapeutic
applications.

Post-translational modifications of proteins are critical to convey protein
activity or non-activity and are essential means of 'cellular communication'
that can only be identified by studying the proteins themselves.   Changes in
protein modification patterns have been described in many diseases and tools
which can detect and characterize such alterations in human tissues are of
tremendous value.  Proteome Sciences has developed and implemented a stable
isotope labelling approach termed DiPPA - differential phosphopeptide arrays -
used for the selective monitoring of changes in protein phosphorylation.

The DiPPA approach was presented in May 2004 at the Americal Society for Mass
Spectrometry meeting ('ASMS') in Nashville, USA and has been successfully
validated with the discovery of novel kinase activity as good potential new drug
targets.

Commercialisation

Over recent years, Proteome Sciences' strategy has been to concentrate its main
research effort on the early discovery of differential protein expressions
across a range of the main human diseases and to establish early IP for
diagnostic, prognostic and therapeutic applications and to develop more
sensitive sets of tools to further exploit these differentially expressed
proteins with the intention of maximising their commercial value and utility
through out-licensing.

Major progress has been made during the year in raising the profile of Proteome
Sciences, our biomarkers and technologies to potential pharmaceutical and
diagnostic company partners at a time when proteomics has started to gain a high
level of recognition and acceptance from the life sciences industry.  Much of
this activity has taken place though face to face, in-house meetings but also
through exhibiting, presenting and biopartnering at annual international
biotechnology conferences such as BIO in the US, BIO-Europe, BioSquare and
BioPartnering Europe.  Proteome Sciences is increasingly recognised as a global
leader in applied proteomics and with that acceptance now in place, it expects
to significantly expand the excellent start achieved though the successful
outlicensing of its blood biomarkers in stroke and TSE and to translate its
wider portfolio of protein biomarkers and its ProteoSHOP(R) toolbox into a
highly sustainable and growing revenue stream.

In stroke, Biosite have delivered to Proteome Sciences a substantial number of
antibodies this year against the biomarkers licensed exclusively to Biosite for
point of care (POC) applications.  In parallel, Proteome Sciences is further
validating and introducing different panel combinations for high throughput
applications in large, automated clinical systems.  The validation of Proteome
Sciences' protein markers continues to progress well and final decisions on
Biosite's initial stroke marker panel composition for POC are expected in the
near future.  Recent data from Geneva and the USA from our blood biomarkers
presented at the 5th World Stroke Congress, Vancouver, Canada, 23rd-26th June,
2004 demonstrated the potential of a five biomarker panel for the early
diagnosis of stroke.  These biomarkers have been screened against large panels
of serum taken from stroke patients at various times between 60 minutes and 24
hours following stroke.  By using panels of these markers in different
combinations, very high levels of sensitivity and specificity have been obtained
and will result in the development of rapid and accurate diagnostic tests for a
range of new applications.  Having concluded its agreement with Biosite in POC,
Proteome Sciences' current business development activities in stroke are
primarily concentrated towards exploitation of high throughput screening with
the major global players in the field.  This market accounts for over 90% of the
total, with POC accounting for between 5% and 10%.  The Company has received
proposals to conclude an exclusive license for high throughput applications;
however discussions are currently ongoing with a number of the major names on a
non-exclusive basis.  We are actively exploring the different options available
and we intend to conclude the arrangements expeditely and in the most
appropriate way to maximise commercial revenue and value for our shareholders.

One of the keys to finalising a new collaboration or licensing agreement with a
partner is impressive data and this is ultimately dependent upon having quality
samples in the first place on which to conduct our biomarker research.
Following the Alder Hey scandal in the UK a few years ago, obtaining clinical
samples, which have been collected and stored according to the correct protocol,
has become increasingly difficult but we are pleased to report that we have had
notable success over the last twelve months in a number of important areas.  In
BSE, our strategic collaboration and licence agreement with IDEXX Laboratories,
Inc., announced in April 2003, to develop an ante-mortem blood test for
screening live animals is proceeding very much on track and has been facilitated
by new access to a very large collection of well documented BSE positive and
control samples.  In vCJD, the human form of 'mad cow disease', our publicly
announced collaboration with the Medical Research Council Prion Unit gives us
access to human disease samples, which are in extremely short supply and which
will enable us to confirm data already in our possession for the development of
a diagnostic test for blood-bank screening and for vCJD detection in humans and
to conclude out-licensing agreements for these applications.

Obtaining sufficient samples in organ transplant rejection is also a major
challenge but I am delighted to announce that the company is in the final stages
of agreeing a new collaboration to extend the cardiovascular research undertaken
to date into the renal area. The commercial potential of a diagnostic test for
kidney transplant rejection is considerable and arrangements have been agreed to
access a large retrospective sample bank and supporting data.

With the benefit of applying its ProteoSHOP(R) toolbox, Proteome Sciences has
been able to establish a major position in Alzheimer's disease (AD) for both
diagnostic and therapeutic applications.  With an ageing global population, AD
is one of the fastest growing diseases where there are currently no diagnostics
and where Aricept, the main drug treatment available, targets slowing the
progression of the disease and not its prevention or cure.  The US 2000 Census
projects that the number of AD sufferers will grow sharply to between 11 million
and 16 million people in the US by 2050 compared to the current figure of 4.5
million, with an annual cost of treatment in excess of $100bn.

Three main events have taken place.  In February 2004, Proteome Sciences,
together with the Institute of Psychiatry, King's College London, announced a
£1.3m DTI-Link grant for the early detection of AD in blood and the discovery of
new targets for therapy.  At the end of March, a panel of CSF biomarkers for AD
discovered by our collaborators at the University Cantonal Hospital, Geneva,
Switzerland (HCUG) was in-licensed to complement our internal biomarker
programme.  This enabled the Company to announce a panel of high sensitivity and
specificity protein biomarkers (90% sensitivity/100% specificity) to be used for
the objective diagnosis of AD.  In May 2004, Proteome Sciences announced at the
American Society for Mass Spectrometry Meeting, Nashville, USA that it had
discovered novel kinase activity involved in the early development of AD as
potential new drug targets which would allow the development of new classes of
drugs to prevent and/or delay the progression of AD.  Patent applications for
the novel targets and the diagnostic markers have been filed.  Most recently, a
number of new serum markers have been identified for AD and a patent filing is
in preparation.  Commercial partners for both the diagnostic and therapeutic
applications are being actively pursued, with the therapeutic strategic alliance
at this time likely to be ahead of the diagnostic.

Our position in neurodegenerative diseases has gone from strength to strength,
partly due to the outstanding relationships that have developed with a number of
different groups at the Institute of Psychiatry, King's College London.  In
February 2004, Proteome Sciences was successful in an EU 6th Framework Grant
Application, GENDEP, to address patient response to drugs for depression.  This
is the first large scale multi-centre study to combine pharmacogenomics and
pharmacoproteomics to establish drug responder profiles, with a total budget of
€7.5m.  Most importantly, it provides long term access to well characterised
samples from specialist groups across Europe and to the platform to identify new
targets for drug discovery and for the early diagnosis of disease, as well as to
predict responders and non-responders to anti-depressant treatments.

The Company has been granted two key patents in November 2003 and January 2004
for a new class of cancer biomarkers in blood for lung, breast and oesophageal
cancer and for neuroblastoma and glioma respectively.  These patents confirm the
utility and importance of proteomics to provide a new generation of products in
human disease and the global requirement for more sensitive and specific tests
for early detection and treatment of these types of cancer.  The grant of these
patents coincides at a time of increasing importance for protein microarrays in
cancer diagnostics.  Discussions have been ongoing with various prospective
partners to explore the merits of setting up a specialist cancer proteomics
entity from early detection through to treatment, as opposed to straightforward
out-licensing of the biomarkers/technology on an individual application basis.
Shareholders will be kept informed of developments.

As discussed earlier, the size and different opportunities afforded to us from
the Sensitizer(R) Family is considerably greater and more diverse than we had
anticipated when we first talked about Sensitizer(R) in March 2003.  We had
hoped to come back to shareholders at the end of 2003 with further news on
commercialisation but we have been required to do considerable additional work
to address specific applications for the different types of chemical tags and
have also been forced to wait for certain key IP prosecution dates to be
attained before we could move forward with commercialisation.  These matters
have now been resolved and it is expected that we can now progress quickly and
conclude the licensing process for at least one, perhaps more, of the Sensitizer
(R) Family.

Veri-Q Inc.

In the Interim Statement it was reported that further development was underway
at Veri-Q relating to the research into the protecting/de-protecting groups in
synthetic oligonucleotides, this research being undertaken at North Carolina
State University (NCSU).  The development of antibodies (MAbs) had been
contracted out to a specialist monoclonal antibody company who were decidedly
slow in producing the MAbs and on receipt the sensitivity was inadequate; these
have been returned and new MAbs are in production.  This was further exacerbated
when an NCSU technician departed and a new appointment was not made until the
end of 2003.  Things have returned to normal in 2004 and results are currently
awaited from the collaboration set up with Duke University, Raleigh-Durham, USA
in 2003 for applications with DNA chips.  With satisfactory results and access
to the new MAbs, commercialisation should rapidly get back on track.

Intronn Inc.

Intronn's SMaRT(R) technology represents an entirely new approach to gene
therapy at the pre m-RNA level and has broad applications across medicine and
biology.  Principal applications include therapeutics, molecular imaging,
molecular evolution and genomics.  Pre-trans-splicing molecules (PTMs) are the
core of SMaRT(R) technology and Intronn has developed a high capacity screen to
select the best PTM from millions of candidates using molecular libraries.
Intronn's technology has progressed considerably over the last three years and
has recenty shown in-vitro and in-vivo proofs of principle in the liver, in
addition to its established positions in cystic fibrosis, human papilloma virus,
AD and collagen disease.  The company has gained significant recognition from
scientific publications and at scientific meetings in 2003 and has been awarded
a further two Phase 1 SBIR grants in haemophilia A and in cystic fibrosis,
totalling $1.14m.

Intronn's main focus is its therapeutic pipelines, building a franchise in RNA
therapeutics for the liver to address haemophilia, hypercholesterolemia and AAT
deficiency (alpha 1-antitrypsin), as well as addressing substantial commercial
opportunities in cancer and molecular imaging.

Proteome Sciences increased its shareholding in June 2004 to a fully diluted
level of approximately 40% (compared to its previous holding of 30%) through the
subscription of US$3.5m.  This was financed through the issuance and placing of
1.85m shares in Proteome Sciences.  As in the past, the Intronn shareholding
will be held as a strategic investment.

The recent funding should enable Intronn to finance its progress through to
clinical trials, by which time it intends to enter into partnering programmes,
where significant portions of clinical and commercial development, including
upfront payments and sponsored research collaborations, will be provided by
strategic partners.

Results

The financial results for the twelve month period ended 31st December 2003,
which include the former Aventis proteomics activities in Frankfurt for the
first time for a full period, show a headline loss (being the operating loss
excluding non-cash operating costs and share of associate company's losses) of
£4,259,998 compared with £3,076,926 in 2002.  Non-cash operating costs
(amortisation of goodwill, depreciation and National Insurance on notional share
option gains, as extracted from the profit and loss account) were £1,948,137
against £710,532 in 2002.  The period to 31st December 2003 also contains a
share of associates' losses at Intronn, Inc. of £573,024 (2002: £322,128)  The
loss on ordinary activities after taxation for the twelve month period ended
31st December 2003 was £6,781,159 (2002: £4,109,586).

At the year end, cash at bank and cash held on deposit stood at £6,160,384
(2002: £4,255,750).  This figure includes £5.8m raised on 26th June 2003 by way
of a 5% placing with institutional investors.  The Company continues to be well
funded and has a low and predictable rate of cash burn from its proteomic
activities, with no major capital expenditure envisaged for the foreseeable
future.

As noted above, on 4th June 2004, the Company announced that it intended to
increase its shareholding in its US associate, Intronn, Inc., to a fully diluted
level of approximately 40% (compared to its existing holding of 30%) through the
subscription of US$3.5m as part of a funding round with other existing investors
in Intronn.  This was funded by a placing of 1,848,739 new ordinary shares,
representing approximately 1.5% of the existing issued share capital, at 119p
with institutional investors.

Current outlook

The Company has made considerable progress over the last twelve months.  With
the successful integration of the Frankfurt operations and the broadening of the
executive management team completed, Proteome Sciences is extremely well placed
to capitalise on the outstanding prospects for proteomics.  The
commercialisation process is well underway and having a significant impact on
the business, shifting the equilibrium to generating sustainable and growing
revenue and royalties as we move into 2005.  This will be combined with
increasing visibility of a full and widening pipeline of proprietary biomarkers
and strategic alliances from the leading position that we have established in
applied proteomics through ProteoSHOP(R) and the long-standing and strong
relationships developed with our academic collaborators.  Against this
background, we look forward to the future with increasing confidence.

As a closing comment, I would like to thank all the employees, scientists,
collaborators and consultants for their vision, their diligence and contribution
to Proteome Sciences over the period.

Steve Harris
Chairman
                                                                  28th June 2004



                                                                  2003                      2002
                                                                     £                         £

Turnover - continuing operations                               170,051                   171,401
Cost of sales                                                 (82,924)                 (131,753)
                                                            __________                __________
Gross profit                                                    87,127                    39,648

Administrative expenses excluding non-cash items           (5,021,346)               (3,527,300)
Amortisation of goodwill                                     (648,960)                 (324,480)
Depreciation                                                 (585,234)                 (369,845)
N.I. on notional share option gains                          (713,943)                  (16,207)

Administrative expenses                                    (6,969,483)               (4,237,832)
                                                            __________                __________
Operating loss - continuing operations                     (6,882,356)               (4,198,184)
Share of associate's operating loss                          (573,024)                 (322,128)
                                                            __________                __________
Group operating loss - continuing operations               (7,455,380)               (4,520,312)
Interest receivable and similar income                         124,682                    85,259
Interest payable and similar charges                           (5,905)                  (11,018)
                                                            __________                __________
Loss on ordinary activities before taxation                (7,336,603)               (4,446,071)
Tax credit on loss on ordinary activities                      555,444                   336,485
                                                            __________                __________
Loss for the financial year                                (6,781,159)               (4,109,586)
                                                            __________                __________
Headline loss                                              (4,259,998)               (3,076,926)
                                                            __________                __________
Loss per share
Basic and diluted loss per share (note 3a)                     (5.81p)                   (3.96p)
Headline loss per share (note 3b)                              (3.65p)                   (2.97p)
                                                            __________                __________


Unaudited reconciliation of loss per share to headline loss per share
For the year ended 31st December 2003

The headline loss and headline loss per share is considered by the Directors to
be a more meaningful measurement of financial performance than the basic loss
per share as it excludes goodwill amortisation and other non-cash items and
better reflects the cash outflow of the business.

                                                   2003          2003          2002          2002
                                                             Loss per                    Loss per
                                                                share                       share
                                                      £         pence             £         pence

Loss for the financial year                   6,781,159          5.81     4,109,586          3.96
Add back:
Amortisation of goodwill                      (648,960)        (0.55)     (324,480)        (0.31)
Depreciation                                  (585,234)        (0.51)     (369,845)        (0.36)
National Insurance on notional

share option gains                            (713,943)        (0.61)      (16,207)        (0.01)
Share of associate's operating loss           (573,024)        (0.49)     (322,128)        (0.31)
                                             __________     _________    __________    __________
Headline loss                                 4,259,998          3.65     3,076,926          2.97
                                             __________     _________    __________    __________



                                                                           2003               2002
                                                                              £                  £

Fixed assets
Intangible assets                                                     5,516,161          6,165,121
Tangible assets                                                       1,073,029          1,503,311
Investments in associates                                               282,026            949,863
Other investments                                                       225,756            225,756
                                                                     __________         __________
                                                                      7,096,972          8,844,051
                                                                     __________         __________
Current assets
Debtors                                                               1,169,824            725,225
Cash held on deposit as short term investment                         4,795,161          3,349,255
Cash at bank and in hand                                              1,365,223            906,495
                                                                     __________         __________
                                                                      7,330,208          4,980,975
                                                                     __________         __________

Creditors: Amounts falling due within one year                      (1,742,403)        (1,840,698)
                                                                     __________         __________

Net current assets                                                    5,587,805          3,140,277
                                                                     __________         __________

Total assets less current liabilities                                12,684,777         11,984,328
Creditors: Amounts falling due after more than one year               (110,000)          (143,430)
Provisions for liabilities and charges                                (730,882)                  -
                                                                     __________         __________

Net assets                                                           11,843,895         11,840,898
                                                                     __________         __________

Capital and reserves
Called-up share capital                                               1,205,522          1,141,153
Share premium account                                                22,049,294         15,516,629
Other reserve                                                        10,755,000         10,755,000
Profit and loss account                                            (22,165,921)       (15,571,884)
                                                                     __________         __________
Equity shareholders' funds                                           11,843,895         11,840,898
                                                                     __________         __________


                                                                        2003                 2002
                                                                           £                    £

Net cash outflow from operating activities                       (5,181,372)          (3,494,131)
Returns on investments and servicing of finance                      118,777               74,241
Taxation                                                             186,751              146,485
Capital expenditure and financial investment                           4,831             (47,546)
Acquisitions and disposals                                                 -            3,637,730
                                                                  __________           __________
Cash (outflow)/inflow before use of liquid resources
and financing
                                                                 (4,871,013)              316,779
Management of liquid resources                                   (1,445,906)          (2,549,255)
Financing                                                          6,529,975            2,581,467
                                                                  __________           __________
Increase in cash in the year                                         213,056              348,991
                                                                  __________           __________


Reconciliation of operating loss to operating cash flows
                                                                        2003                 2002
                                                                           £                    £

Operating loss                                                   (6,882,356)          (4,198,184)
Depreciation charges                                                 585,234              369,845
Amortisation charges                                                 648,960              324,480
National Insurance on notional share option gains                    713,943                    -
Loss/(profit) on sale of tangible fixed assets                        16,040                (331)
Increase in debtors                                                 (68,364)             (79,545)
(Decrease)/increase in creditors                                   (194,829)               89,604
                                                                  __________           __________
Net cash outflow from operating activities                       (5,181,372)          (3,494,131)
                                                                  __________           __________

     
1.   There has been no change to any of the accounting policies set out in the 
     2002 statutory accounts.
     
2.   Following the loss of £6,781,159 incurred in the period, the Directors do 
     not recommend the payment of a dividend.
          
3.   a.   The calculation of the loss per share for the year ended 31st 
          December 2003 is based on the loss for the financial period of
          £6,781,159 and on 116,739,021 Ordinary Shares, being the weighted 
          average number of shares in issue and ranking for dividend during the 
          period (year ended 31st December 2002 - loss £4,109,586, weighted 
          average number of Ordinary Shares in issue and ranking for dividend, 
          103,672,012).
          
     b.   The losses used to calculate the headline loss per share are as 
          follows:

                                        Year Ended     Loss per       Year Ended     Loss per
                                     31st December        share    31st December        share
                                              2003         2003             2002         2003
                                                 £        pence                £        pence                      

Loss for the Financial Period          (6,781,159)         5.81      (4,109,586)         3.96                     
                                                                    
Add back:

Amortisation of Goodwill                   648,960       (0.55)          324,480       (0.31)              
                                                                         
Depreciation                               585,234       (0.51)          369,845       (0.36)            
                                                                         
National Insurance on

Notional Share Option Gains                713,943       (0.61)           16,207       (0.01)             

                                                                          
Share of Associate's                       573,024       (0.49)          322,128       (0.31) 

Operating Loss                                                        
                                                                         
Headline Loss                          (4,259,998)         3.65      (3,076,926)         2.97                    
                                                                    
     
     The Headline Loss per share is considered by the Directors to be a more 
     meaningful measurement of financial performance than the basic loss per
     share as it excludes goodwill amortisation and other non-cash items and 
     better reflects the cash outflow of the business.
     
4.   The preceding financial information does not constitute statutory accounts 
     as defined in Section 240 of the Companies Act 1985.  The financial 
     information for the year to 31st December 2002 is based on the statutory 
     accounts for that year.  These accounts, upon which the auditors issued an 
     unqualified opinion, and which did not contain any statement under Section 
     237(2) or (3) of the Companies Act 1985, have been delivered to the 
     Registrar of Companies.

     The statutory accounts for the year ended 31st December 2003 will be 
     finalised on the basis of the financial information presented by the 
     Directors in this preliminary announcement and will be posted to 
     shareholders this month.  After that time, they will also be available at 
     the Company's registered office: Coveham House, Downside Bridge Road, 
     Cobham, Surrey  KT11 3EP.



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