Trading Statement

Synchronica PLC
18 January 2007


18th January 2007

                                Synchronica plc
                        ("Synchronica" or the "Company)

                  Update re. Contract, Cost Reduction Underway


Tunbridge Wells, UK - 18th January 2007 - Further to its announcement of 4th
December, Synchronica, an international provider of mobile device management and
synchronisation solutions based on open standards, is pleased to update the
market as follows.


The Company:

 1. Has signed a non-binding Memorandum of Understanding ("MOU") with a major
    international hardware manufacturer to provide Synchronica's SyncML Gateway
    under an OEM licence. The scope of this potential contract has recently been
    increased by the customer which, while to Synchronica's longer term
    advantage, will in the short term delay signing of the contract. Both
    parties are now targeting completing the contract in quarter one 2007. The
    contract, when concluded, is expected to provide almost immediate revenues
    for Synchronica. The terms of the MOU must, at this time, remain
    confidential; however the Directors believe them to be advantageous to
    Synchronica.

 2. Has begun focusing its development on one software platform, Java, with more
    of the Company's resources being directed towards Synchronica's award
    winning SyncML Gateway where there has been the highest level of customer
    acceptance and where there is the largest addressable market.

 3. Intends to re-implement Synchronica Mobile Manager using the Java 
    programming language on Synchronica's SyncML DM Server during 2007, which 
    will allow Synchronica to support the Unix Operating System and address the 
    entire Smartphone market as well as mass market Feature Phones.

 4. Is continuing discussions with a number of interested parties to provide, 
    for a substantial fee, an exclusive licence for the existing Windows based
    Synchronica Mobile Manager source-code.

 5. Has, following consultation, released 38 members of staff, from a total of
    86, and closed one of its three offices. These measures are expected to lead
    to costs saving of £1.1m per annum with a one-off restructuring cost of
    £300k in 2006.

 6. Will, subject to audit, report revenues of £1.2m for the financial year 
    ended 31 December 2006, when it announces full year results in April.


Given contracts already entered, such as the software licence to iXi Mobile
announced 31 May last year, and the expected translation of the MOU noted above
into a substantial contract by the end of Q1 2007; the directors believe
Synchronica will benefit from a growing, predictable and recurring revenue
stream.


Contacts at Synchronica:
Carsten Brinkschulte, CEO [phone], Mobile [phone]
Angus Dent, CFO, [phone], Mobile [phone]




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