Interim Results

Brainspark PLC
28 August 2001

BRAINSPARK PLC 2001 INTERIM RESULTS

August 28th 2001. Brainspark plc today announced its Interim Results for the
six months ended 30 June 2001. Brainspark is an incubator focused on
germinating and developing technology and internet-related businesses.



HIGHLIGHTS



* Two follow-on funding rounds in the period of £1.05 million into Smile-On
and £3.25 million into Metapack.

* Cash reserves of £7m.

* Consolidated net-asset value of £12.4 million.



Don Caldwell, Chairman, commented:

'The changes outlined in Brainspark's Financial Statements for the year ended
31st December 2000, including my own appointment, have been implemented. I am
glad to say that Brainspark's underlying operating cash requirement is now
broadly in line with the level forecast at that time. However, the mid-market
price at 30 June 2001 of 7.0p valued the company's issued share capital at £
8.6m against a consolidated net asset value of £12.4m. I believe that this
insufficiently values the company's investment portfolio and the future
potential of the business.

Discussions with a number of parties which may or may not lead to an offer
being made to the Company are ongoing and shareholders will be kept informed
of developments.'



Enquiries:

Brainspark (020 7843 6600)

Jasper Judd (Chief Financial Officer)

David Hart (Director of marketing and communications)

Citigate Dewe Rogerson (020 7638 9571)

Martin Jackson / Charles Vivian



BRAINSPARK PLC

INTERIM REPORT AND ACCOUNTS

FOR THE SIX MONTHS ENDED 30 JUNE 2001



Brainspark Plc

Chairman's statement

In her statement issued with the Brainspark's Financial Statements for the
year ended 31 December 2001, my predecessor Barbara Thomas announced various
operational changes within Brainspark taken in the light of the negative
sentiment afflicting the technology investment market, particularly that for
early stage companies.

Those changes, including my own appointment, have been implemented, and I am
glad to say that Brainspark's underlying operating cash requirement is now
broadly in line with the level forecast at that time.

The Board, however, continues to look carefully at all ways in which the
company's value can be preserved and enhanced.



Financial Summary



The consolidated net asset value at 30 June 2001 was £12.4m, down from £20.5m
at 31 December 2000. Of the fall of £8.1m, £2.3m is attributable to recurring
operating expenses and the remainder (£5.8m) principally to exceptionals and
share of results of associates, net of interest.

The fall in Brainspark's share price to a bid price of 6.0p on 30 June 2001
contributed £2.1m to the above figure of £5.8m, being principally in respect
of non-cash provisions relating to the Employee Benefit Trust.



Investments Review

If anything, market conditions have been worse than those most commentators
had predicted, and it has been extremely hard for early stage technology
businesses to raise further funds. Accordingly, we were very pleased that both
Metapack and Smile-On successfully completed financings of £3.25m and £1.05m
respectively in the period.

Unfortunately, the period also involved the closures of EC1 Media and
Gasworld, and the sale of the Petspark and (in July 2001) the Leisurehub
businesses. A provision for disposal has also been made against Globe-Rail.

On the positive side, Propex has made real progress towards becoming the key
marketplace for major UK commercial property deals, having achieved the buy-in
of some of the biggest players in the sector.

The Usability Company, for which Brainspark provided seed funding in February
2001, has had a very encouraging start and looks set imminently to become
self-sustaining.

Brainspark's remaining active investments, Easyart, Fortune-Cookie, iProx,
Kerb, Que Pasa Media and Traderserve are all at important stages in their
development and the next few months should tell us much about their long-term
prospects.



Outlook

The mid-market price at 30 June 2001 of 7.0p valued the company's issued share
capital at £8.6m against a consolidated net asset value of £12.4m. I believe
that this insufficiently values the company's investment portfolio and the
future potential of the business.

Your Board remains committed to looking for value-creation opportunities and
with £7.0m in cash at the end of June 2001, Brainspark remains positioned to
withstand an extremely difficult market environment.



D. Caldwell - Chairman
Brainspark Plc
Consolidated
Profit and Loss Account
(unaudited)
             Notes        Six months            Six months           Year ended
                     to 30 June 2001       to 30 June 2000     31 December 2000
                                £000                  £000                 £000
Turnover       2a)                 -                     -                    -
Net                           (2336)                (2868)               (5644)
operating
expenses -
recurring
Net            2b)            (3505)                (2961)               (4054)
operating
expenses -
exceptional
                   --------------------     -----------------
------------------Total net                     (5841)                (5829)    
          (9698)
operating
expenses/ group
operating
loss - continuing
Share of         3            (1873)                (1667)               (4548)
operating
loss of
associated
undertakings
                   -------------------    ------------------ -------------------
Total                         (7714)                (7496)              (14246)
operating
loss : group
and share of
associated
undertakings
Exceptional
items:
Profit on      2c)               370                  1221                 1379
deemed
disposal of
interests in
associated
undertakings
Loss on        2c)            (1227)                     -               (2433)
disposal and
provisions
for loss on
disposal of
interests
in associated
and subsidiary
undertakings
                    ----------------     -----------------   ------------------
Loss on                       (8571)                (6275)              (15300)
ordinary
activities
before interest
Net interest                     251                   328                  736
receivable
                   -----------------     -----------------    -----------------
Loss on                       (8320)                (5947)              (14564)
ordinary
activities
before taxation
Tax on loss                        -                  (27)                 (27)
on ordinary
activities
                   ------------------     ----------------- --------------------
Loss on                       (8320)                (5974)              (14591)
ordinary
activities
after taxation
Equity                            34                     -                   37
minority interests
                   ------------------      ----------------  -------------------
Retained                      (8286)                (5974)              (14554)
loss for the
financial
period
                           =========              ========            =========
Loss per 1p
ordinary share
- basic and      4           (6.7) p               (5.6) p             (14.9) p
diluted
                       -------------          ------------        -------------
Consolidated
Statement of
Total Recognised
Gains and Losses
Loss for the                  (8286)                (5974)              (14554)
financial period
Revaluation                       34                   719                  719
of fixed asset
investments
                      --------------     -----------------        -------------
Total
recognised
gains and
losses for
the period                    (8252)                (5255)              (13835)
                              =========            ========            ========

There are no differences between the results disclosed
above and the historical cost equivalents.




Brainspark Plc
Consolidated Balance Sheet
(unaudited)
                              Notes     At 30 June    At 30 June At 31 December
                                              2001          2000           2000
                                              £000          £000           £000
Fixed assets
Tangible assets                                943           812           1135
Investments in associated         5           2201          8304           4987
undertakings
Other investments                 6           1602          1568           1568
Investment in own shares          7            253          4342           2445
                                    ---------------     ---------       --------
                                             4999         15026          10135
                                    -------------- -------------- --------------
Current assets
Debtors                                       1024          2087           1609
Cash at bank and in hand                      6978         14020           9766
                                    ---------------  ------------        -------

                                              8002         16107          11375
Creditors : amounts falling                  (469)        (1379)          (586)
due within one year
                                    ---------------------- ---------------------
Net current assets                            7533         14728          10789
                                    --------------- ---------------
------------Total assets less current                    12532         29754    
     20924
liabilities
                                     -------------- ---------------
------------Provisions for liabilities                   (153)        (1044)    
     (385)
and charges
                                    --------------- -------------- -------------

Net assets                                   12379         28710          20539
                                        ==========   ===========     ==========
Capital and reserves
Called up share capital                       1233          1231           1233
Share premium account                        26442         26312          26442
Revaluation reserve                            753           719            719
Other reserves                                6813          6813           6813
Profit and loss account                    (22862)        (6365)        (14702)
(deficit)
                                    ---------------   -----------  -------------
Total equity shareholders'                   12379         28710          20505
funds
Equity minority interests                        -             -             34
                                    --------------   -------------   
----------Capital employed                             12379         28710      
   20539
                                        ==========   ===========     ==========
Reconciliation of Movements
in Consolidated Equity
Shareholders' Funds
Loss for the period                         (8286)         (5974)        (14554)
New share capital issued for                     -         26667          26799
cash
Revaluation of fixed asset                      34           719            719
investments
Charge for issue of shares at                  126           152            395
below market value
                                    ---------------    ------------  
----------Net addition to shareholders'               (8126)         21564      
   13359
funds
Opening shareholders' funds                  20505          7146           7146
                                    ---------------  ------------- -------------
Closing shareholders' funds                  12379         28710          20505
                                      ============   ===========     ==========




Brainspark Plc
Consolidated Cash Flow
Statement
(unaudited)                                    394
                              Notes  Six months to Six months to     Year ended
                                      30 June 2001  30 June 2000    31 December
                                                                           2000
                                              £000          £000           £000
Net cash outflow from             8         (2248)        (3605)         (6260)
operating
activities
                                    ---------------   -------------  -----------
Returns on investments and
servicing
of finance
Interest received (net)                        237           320            723
                                    --------------- -------------- -------------
Net cash inflow from returns
on investments and servicing of                237           320            723
finance
                                    --------------- -------------- -------------
Capital expenditure and
financial
investment
Purchase of tangible fixed                     (5)         (960)         (1392)
assets
Purchase of other investments                    -         (849)          (849)
Purchase of own shares                           -        (5323)         (5322)
Disposal of fixed assets                         2             -              -
                                    ---------------- -------------- ------------
Net cash outflow from capital
expenditure and financial                      (3)        (7132)         (7563)
investment
                                    --------------- --------------- ------------
Acquisitions and disposals
Purchase of subsidiary                           -             -          (550)
undertaking
Cash acquired with subsidiary                    -             -            550
undertaking
Closure of subsidiary                         (49)             -              -
undertaking
Purchase of investments in                   (310)        (5603)         (6800)
associated undertakings
Loans to associated                          (415)         (274)          (780)
undertakings
                                    -------------- ------------- ---------------
Net cash outflow from
acquisitions
and disposals                                (774)        (5877)         (7580)
                                    --------------- -------------- -------------
Net cash outflow before                     (2788)       (16294)        (20680)
financing
                                    -------------- ---------------- -----------
Financing
Issue of ordinary share                          -         26667          26799
capital
                                    --------------  ----------------
-----------Net cash inflow from                             -         26667     
    26799
financing
                                    -------------- ---------------
-------------(Decrease) increase in net                  (2788)         10373   
       6119
cash for the period
                                        ==========    ==========     ==========
Reconciliation of net cash
flow to
movement in net cash
Net cash at beginning of                      9766          3647           3647
period
(Decrease) increase in net                  (2788)         10373           6119
cash in the period
                                    -------------- ---------------    ----------

Net cash at end of period                     6978         14020           9766
                                       ===========  ============    ===========




Brainspark Plc
Notes to the Financial Statements

1.  Basis of preparation
    The interim financial statements have been prepared on the basis of the
    accounting policies set out in the Group's 2000
    Annual Report and Accounts.Fixed annual charges are apportioned to the
    interim period on the basis of time elapsed and
    other expenses are accrued in accordance with the same principles used in
    the preparation of the annual accounts.
    The financial information contained in this interim statement is unaudited
    and does not constitute statutory accounts as
    defined in Section 240 of the Companies Act 1985. The comparative
    information for the year ended 31 December 2000 is
    an abridged version of the statutory accounts for that year and those
    accounts,upon which the auditors issued an
    unqualified opinion,have been filed with the
    Registrar of Companies.

2.  Profit and loss account
                                          Six months   Six months       Year to
                                                  to           to
                                        30 June 2001 30 June 2000   31 December
                                                                           2000
    a) Turnover                                 £000         £000          £000
    Group turnover including share of            495          383          1239
    associated undertakings
    Less: share of associated                  (495)        (383)        (1239)
    undertakings
                                        ----------------- ----------------- ----
                                                  -            -             -
                                            ========    =========     =========
    b) Net operating expenses -
    exceptional
    National Insurance on                        242       (1980)        (1177)
    warrants
    Provision against investment in own       (2192)        (981)        (2877)
    shares (note 7)
    Provisions against loans to                (595)            -             -
    associated undertakings
    Goodwill valuation adjustment on           (500)
    associated undertakings
    Restructuring and                          (460)            -             -
    closure costs
                                        ------------- ------------ -------------
                                              (3505)       (2961)        (4054)
                                           =========     ========     =========
    c) Exceptional
    items
    Profit on deemed disposal of                 370         1221          1379
    interests in associated
    undertakings
                                        -------------- ------------- -----------
    Loss on disposal and provisions for       (1227)            -        (2433)
    loss on disposal of
    interests in associated and
    subsidiary undertakings
                                           =========    =========     =========
    The profit on deemed disposal of interests in associated undertakings
    comprises principally the profit on the dilution of the Group's interest in 
    Smile-on when it raised second round funding from third parties.
    The losses on disposal and provisions for losses on disposal of interests
    in associated and subsidiary undertakings comprise principally Leisurehub,  
    Gasworld, Globe Rail, EC1 Media and a further provision in
    respect of the disposal of Perfectday which took place during the year
    ended 31 December 2000.

3.  Share of operating loss of
    associated undertakings
                                          Six months   Six months       Year to
                                                  to           to
                                        30 June 2001 30 June 2000   31 December
                                                                           2000
                                                £000         £000          £000
    Share of operating loss of                  1099         1026          2680
    associated undertakings
    Amortisation of goodwill on                  774          641          1868
    acquisition
                                          ----------- ------------ ------------
                                                1873         1667          4548
                                           =========    =========    ==========
Brainspark Plc
Notes to the Financial
Statements
4.  Loss per 1p ordinary share

                                       Six months to   Six months       Year to
                                                               to
                                        30 June 2001 30 June 2000   31 December
                                                                           2000
                                                £000         £000          £000
    Loss attributable to ordinary             (8286)       (5974)       (14554)
    shareholders
    Effect of dilutive share                       -            -             -
    options
                                      -------------  ------------ ------------
    Adjusted loss                             (8286)       (5974)       (14554)
                                            ========     ========     =========
    Weighted average number of                123258       106352         97555
    ordinary shares
    Dilutive share                              1817         9713          8318
    options
                                      ----------------- ----------- -----------
    Adjusted weighted average number          125075       116065        105873
    of ordinary shares
                                            ========     ========     =========
    Basic loss per share                     (6.7) p      (5.6) p      (14.9) p
                                           =========     ========    ==========
    Diluted loss per                         (6.7) p      (5.6) p      (14.9) p
    share
                                           =========     ========     =========
    The Group has one class of dilutive potential ordinary shares being those
    share options granted where the exercise price is less than the average     
    market price of the Company's ordinary shares during the period. However    
    these are not considered dilutive as their conversion to ordinary shares    
    would reduce the net loss per share from continuing operations.

5.  Investments in associated
    undertakings
                                       Six months to   Six months       Year to
                                                               to
                                        30 June 2001 30 June 2000   31 December
                                                                           2000
                                                £000         £000          £000
    Share of net assets
    At 1 January                                1084          402           402
    Additions                                    310         1453          1912
    Disposals                                  (371)            -            44
    Share of profit (loss) for                (1099)       (1045)        (2653)
    the period
    Profit on deemed                             370         1221          1379
    disposals
                                      ------------- ------------- -------------
    At period end                                294         2031          1084
                                            ========     ========     =========
    Goodwill
    At 1 January                                3323         2764          2764
    Arising on                                   611         4150          4975
    acquisition
    Disposals                                  (753)            -        (2548)
    Valuation adjustment                       (500)            -             -
    Amortisation of                            (774)        (641)        (1868)
    goodwill
                                      -------------  ------------- -------------
    At period end                               1907         6273          3323
                                           =========     ========     =========
    Loans to associated
    undertakings
    At 1 January                                 580            -            86
    Additions                                    415            -           780
    Loans capitalised                          (400)            -          (86)
    Provisions against loans                   (595)            -         (200)
    and disposals
                                      ------------------ ---------- ------------
    At period end                                  -            -           580
                                           =========    =========    ==========
    Net book amount at period                   2201         8304          4987
    end
                                            ========     ========     =========




Brainspark Plc
Notes to the Financial
Statements
6.  Other investments
                          Six months to           Six months to         Year to
                           30 June 2001            30 June 2000     31 December
                                                                           2000
                                   £000                    £000            £000
    Cost or valuation
    At 1 January                   1568                       -               -
    Additions                         -                     849             849
    Revaluation                      34                     719             719
                        ------------------    -------------------- ------------
    At period end                  1602                    1568            1568
                               ========                ========        ========
    Other investments comprise interests in Metapack and Propex at
    valuation.
7.  Investment in own
    shares
                        Six months to     Six months to                 Year to
                         30 June 2001      30 June 2000        31 December 2000
                                 £000              £000                    £000
    Cost / valuation
    At 1 January                 2445                 -                       -
    Additions                       -              5322                    5322
    Provision against          (2192)             (980)                  (2877)
    investment
                      ---------------     -------------        ----------------
    At period end                 253              4342                    2445
                           ----------         ---------              ----------
  The investment in own shares represents a loan of £5.3 million made to an
  Employee Benefit Trust which invested the proceeds wholly in 4,236,329 company
  shares.  The trust was established to cover actual and potential national
  insurance liabilities on the exercise of warrants held by employees and
  partner company managers at the time of the flotation.  The provision arises  
  from the reduction in the company's share price from 125p at flotation to the 
  bid price of 6.0p at 30 June 2001.

8. Reconciliation of operating loss to net cash outflow from operating
  activities
                                                     Six months to Six  Year to
                                                                   months
                                                      30 June 2001  to       31
                                                                       December
                                                                    30     2000
                                                                   June
                                                                   2000
                                                              £000   £     £000
                                                                   000
  Operating loss                                          (5841) (5829)   (9698)
  Depreciation Charge                                          191 155      257
  Goodwill written off on acquisition of                         -   -       71
  subsidiary undertaking
  Goodwill valuation adjustment on associated                  500   -        -
  undertakings
  Provision against loans to associated                        595   -        -
  undertakings
 Provision against investment in own shares                   2192 981     2877
 Loss on disposal of fixed assets                                -   -        7
 Decrease (increase) in debtors                              344 (1373)   (1025)
 (Decrease) increase in creditors                            (123) 1265      471
 Charge for issue of shares at below market value              126  152      395
 (Decrease) increase in provisions                           (232) 1044      385
                                                       ---------- -----   ------
                                                          (2248) (3605)   (6260)
                                                        ======== ======   ======