Interim Results

Telecom Plus PLC
7 November 2000

                               TELECOM plus PLC

                               Interim Results


Chairman's Statement


I am pleased to report a further quarter of sustained growth across all our
principal activities, with overall pre-tax profits rising by more than 37% to
£527,000 compared with the previous quarter, and to £910,000 for the half-year
(1999: £648,000 loss).


On 26th July 2000 the Company's issued Share Capital was admitted to trading
on the Official List of the London Stock Exchange, which represented an
important milestone in the development of the Company. The Company raised
approximately £3.5 million (net of expenses), which significantly strengthens
our capital base, and will enable us to expand the range of services currently
available to our customers.


I am delighted that so many shareholders have chosen to take advantage of the
Shareholder Discount Scheme introduced following our successful flotation, and

I take this opportunity of reminding other shareholders of the valuable
savings this provides on our services.


Our trials of gas and electricity are progressing, with around 50 independent
distributors and employees now being supplied. We hope to begin offering these
services to the remainder of our distributors shortly, and to our customers
during the early part of next year.


During this quarter, turnover from our Virtual Network Business rose by 11% to
£5.98 million (Q1:£5.41 million), with profitability rising by 24% to £1.2
million (Q1:£980,000), reflecting the steady increase in our customer base
during the summer months. This brings the total profit from providing services
to our customers for the first half of the current year to £2.2 million (1999:
£488,000).


In view of the Company's strong cash flow and rising profitability, the Board
have decided to pay a maiden interim dividend of 0.5p and it is intended to
recommend a final dividend which is expected to be paid in August 2001. The
Interim dividend will be paid on 22nd December 2000 to shareholders on the
register at 24th November 2000.


I remain extremely confident in the prospects for the company.


Peter Nutting
Chairman                                                 7 November 2000



Profit & Loss Account
                                            3 months      6 months    6 months
                                               ended         ended       ended

                                        30 September  30 September 30 September
                                                2000          2000        1999
                                         (unaudited)   (unaudited) (unaudited)
                                               £'000         £'000       £'000
Turnover                                       7,091        13,773       8,071
Cost of sales                                (4,760)       (9,372)     (6,317)
Gross profit                                   2,331         4,401       1,754
Sales and marketing costs                      (549)       (1,132)       (925)
Administrative expenses                      (1,276)       (2,362)     (1,454)
Operating profit/(loss)                          506           907       (625)
Interest receivable                               88           139          72
Interest payable                                (67)         (136)        (95)
Profit/(loss) before taxation                    527           910       (648)
Taxation                                        (18)          (28)           -
Profit/(loss) after taxation                     509           882       (648)
Dividends                                      (267)         (267)           -
Retained profit/(loss)                           242           615       (648)
Earnings/(loss) per ordinary share              1.0p          1.7p      (1.4)p
Diluted earnings/(loss) per ordinary            0.9p          1.6p      (1.4)p
share



Segmental Analysis
                                  3 months ended        6 months      6 months
                                    30 September           ended         ended
                                            2000    30 September  30 September
                                                            2000          1999
                                             £'000         £'000         £'000
Virtual Network
Turnover                                     5,979        11,389         5,405
Operating costs                            (4,764)       (9,198)       (4,917)
Operating profit                             1,215         2,191           488
Distribution
Turnover                                     1,112         2,384         2,666
Operating costs                            (1,821)       (3,668)       (3,779)
Operating loss                               (709)       (1,284)       (1,113)
Total
Turnover                                     7,091        13,773         8,071
Operating costs                            (6,585)      (12,866)       (8,696)
Operating profit /                             506           907         (625)
(loss)


Cash Flow Statement
                                       3 months ended 30   6 months   6 months
                                               September      ended      ended
                                                    2000         30         30
                                                          September  September
                                                               2000       1999
                                             (unaudited) (unaudited) (unaudited)
                                                   £'000      £'000      £'000

Cash inflow/(outflow) from                           779        547      (613)
operating activities
Return on investments and servicing
of finance
Interest received                                     88        139         73
Interest paid                                        (7)      (135)       (16)
Net cash flow from return on                          81          4         57
investments
and servicing of finance
Capital expenditure and financial
investment
Purchase of tangible fixed assets                  (124)      (408)       (89)
Sale of tangible fixed assets                          -          -          -
Net cash flow from capital                         (124)      (408)       (89)
expenditure and
financial investment
Financing
Issue of ordinary shares                           4,073      4,073      2,385
Issue of loan stock                                    -          -      2,650
Expenses in connection with share                  (562)      (562)      (235)
issue
Capital element of hire purchase                    (33)       (68)       (56)
repayments
Net cash flow from financing                       3,478      3,443      4,744
Increase/(decrease) in cash in the                 4,214      3,586      4,099
period



Balance Sheet
                                                 As at       As at       As at
                                                    30          30          30
                                             September   September   September
                                                  2000        2000        1999
                                           (unaudited) (unaudited) (unaudited)
                                                 £'000       £'000       £'000
FIXED ASSETS
Tangible assets                                  1,400       1,107         368
CURRENT ASSETS
Stocks                                           2,057       2,271       1,216
Debtors                                          2,459       1,909       1,438
Cash at bank and in hand                         7,537       3,951       4,451
                                                12,053       8,131       7,105
CREDITORS
Amounts falling due within one year            (4,573)     (4,479)     (2,928)
NET CURRENT ASSETS                               7,480       3,652       4,177
TOTAL ASSETS LESS CURRENT LIABILITIES            8,880       4,759       4,545
CREDITORS
Amounts falling due after more than one        (2,424)     (2,521)     (2,637)
year
                                                 6,456       2,238       1,908
CAPITAL AND RESERVES
Called up share capital                          2,668       2,536       2,532
Share premium account                            3,492          21       3,062
Profit and loss account                            296       (319)     (3,686)
Shareholders' funds                              6,456       2,238       1,908