Final Results

Evolution Group PLC
04 April 2003

                                                                    4 April 2003



                            The Evolution Group Plc

                       ("Evolution Group" or the "Group")



            Preliminary results for the year ended 31 December 2002



Evolution Group, the AIM listed investment bank and retail fund management
group, today announces its results for the year ended 31 December 2002.



Highlights:



  • 2002 results are principally affected by non recurring items representing
    goodwill impairment, redundancy & restructuring costs and fixed asset
    investment provisions
  • Balance sheet remains strong with positive cash balance of £32 million at
    year end
  • The Group has traded profitably in the first quarter of 2003 on a
    consolidated operating basis



Chairman's statement



Following my appointment as Chairman of the Evolution Group on 30 January 2003,
I am delighted to be reporting the progress that has been made by the Group.
2002 was a year of extraordinary development and growth for the Group.  The
scale and scope of the  business at 31 December 2002 is  very different from
that of a year earlier.



Alex Snow, the Group's Chief Executive Officer, is responsible for all aspects
of the Group's operating businesses and he provides in his report which follows
a full review of the year's results. Two things are clear from these results.
Firstly, there have been significant items that are non-recurring in nature -
provisions against fixed asset investments, redundancy and restructuring costs,
and the impairment of goodwill - accounting for over £21 million of the overall
loss.  Secondly, the performance of our operating businesses was significantly
stronger in the second half than the first, as a result of the merger with the
Beeson Gergory Group in July 2002 and recognition of the related synergies.
Therefore as we entered 2003, the Group's operating businesses were all
structured appropriately with their  costs aligned to the achievement of
profitability going forward.



The Group's merger totally changed our investment banking platform.  Evolution
Beeson Gregory was created and, following a significant restructuring effort, is
now a fully functional independent investment bank servicing the small and
mid-cap sector.  Christows continues its strategy for growth and has returned to
profitability in 2002 following significant restructuring in 2001. IP2IPO, the
Group's Intellectual Property commercialisation company, has made enormous
progress in 2002 with the signing of its second major University partnership
with the University of Southampton and the successful spin-out of further
companies.  I would like to thank my predecessor, Andrew Beeson, on behalf of
the Board, for helping to ensure the integration of the two groups went smoothly
and wish him well in his future endeavours.



Outlook



2002 was a watershed year for the small and mid-cap sector. The current trend
has been for the large integrated investment banks to withdraw from this end of
the market.  This in turn has created significant opportunities for small,
independent, well capitalised companies, such as Evolution Beeson Gregory, who
focus exclusively on this area.  We constantly strive to maintain and improve
our customer service and company coverage to maximise the  opportunities going
forward. A salary cap, along with a new equity participation scheme for
employees, ensures that management's, employees' and shareholders' interests are
aligned in creating capital growth in the future.  Christows has a similar
opportunity in its sector with its focus on client service and innovative
product offerings. Finally, IP2IPO looks forward to this year as one  in which
it gains value from its unique and totally leading edge access to the
commercialisation opportunities through its University partnership agreements.



The Board recognises that all of the businesses in which we operate are people
businesses, where our primary assets are our people. The last year has been one
where our staff have demonstrated real commitment in what have been
circumstances of internal restructuring against a background of external market
turmoil.  I should like to take this opportunity to thank everyone for these
efforts that move us toward the achievement of our goals.  The Group has a very
clear and achievable strategy - revenue maximisation, strict cost management and
asset realisation achieved in a timely and proactive fashion.

The Group has traded profitably in the first quarter of 2003 on a consolidated
operating basis. The Board looks forward to the future with confidence and
conviction.



Richard Griffiths
Chairman



Chief Executive Officer's Report







Key financial information

                                                    1st Half         2nd Half*           31 December        31 December
                                                        2002              2002                  2002               2001


                                                       £'000             £'000                 £'000              £'000
Group turnover                                         5,117            10,240                15,357              7,580
Commissions payable                                    (885)             (746)               (1,631)            (1,386)

Gross profit                                           4,232             9,494                13,726              6,194
Other operating income                                     5                87                    92                 31

Operating costs                                      (6,249)          (10,836)              (17,085)           (12,343)
Operating loss before non-recurring costs,
profits on /and provisions against fixed asset
investments and goodwill write off                   (2,012)           (1,255)               (3,267)            (6,118)


Profit on sale of fixed asset investments                                                         19              7,003
Provision against fixed asset investments                                                    (9,712)            (4,739)
Non-recurring costs                                                                          (1,276)            (1,767)
Goodwill written off                                                                        (10,865)            (7,144)

Operating loss                                                                              (25,101)           (12,765)



* The second half of the year includes the results of the Beeson Gregory Group
after its acquisition on 11 July 2002









Review of the year ended 31 December 2002

Investment banking



 At the start of 2002, we had just commenced trading  as Evolution Capital, a
newly established and regulated company with nascent equity sales, trading and
research functions.  The brand was quickly established and revenues developed
over the first few months of the year as we set about providing our
institutional clients with the service they wanted. It was clear as we announced
last year's results that the sector offering investment banking services to
small and mid cap companies was one where change and consolidation were
inevitable.

We established our strategy to set about leading this development and identified
the established business of Beeson Gregory Group as one where opportunities as a
business combination were maximised. The offer by the Group to acquire the
entire share capital of Beeson Gregory became unconditional on 11 July 2002 and
from that point forward we set about achieving our goals of integrating the two
companies to form Evolution Beeson Gregory, rationalising the cost base and
growing the revenue line.

The integration process was largely completed by the year end with annualised
ongoing costs reduced from a combined level of £15m at completion to £10m
currently.  A major part of this saving was achieved by reducing the combined
headcount from 128 at completion to 84 at 31 December 2002 and introducing caps
to salaries, which significantly reduced the average salary levels across the
company. At the same time we have reviewed the equity participation available to
our key staff and implemented at the beginning of 2003 the Key Performers' Share
Incentive Plan. Revenue growth has also been achieved and the combined business
produced revenue in the second half of 2002 of £7.5m, which was in excess of our
budgets against a background of extraordinarily difficult market conditions.

Evolution Beeson Gregory has continued to grow its portfolio of retained
corporate broking and advisory clients over the course of the second half of
2002. In total, 16 new retained corporate clients were added.  Evolution Beeson
Gregory had 104 retained corporate clients at the end of the year. The retainer
income derived from these corporate clients totals over 25% of the projected
overall investment banking annual cost base. As the wholesale withdrawal from
the small and mid-cap marketplace continues by the global investment banks, it
is expected that the rate of growth of new corporate clients will be maintained.

A key area of synergy arising from the merger resulted from Evolution Capital's
secondary market expertise. The combined secondary market sales commission
revenue has grown sharply during a period when transaction volumes and
transaction value in the small and mid-cap market have reduced sharply. Indeed,
official market share data confirms that Evolution Beeson Gregory's market share
has risen significantly in the FTSE Fledgling, FTSE small-cap and FTSE 250.

Private client stockbroking and fund management

Christows' overall performance during 2002 was impressive when compared with a
year earlier and, against the background market conditions, this is particularly
encouraging.  The overall result was a retained profit of £210,000 compared with
a loss of £2.0m for 2001, a turnaround of £2.2m.

Within this overall performance the revenue from all classes of transaction
based commissions and management fees have clearly been under pressure as the
conditions in the underlying equity markets took their effect.  However, we were
able to maintain the revenue against the previous year's level by the
introduction of new clients bringing significant new discretionary funds under
management.  These came principally via our continued drive of sales through the
intermediary market of independent financial advisers with new funds of £54m
being introduced compared with £44m in 2001 from this source.  Sales to this
market comprise the very successful Private Portfolio Account and also, since
its introduction in November 2002, the Multi-Manager Portfolio Service.

We have continued through the year to focus extremely hard on cost management.
We have worked with our outsourced service providers to reduce the costs of our
business at current volume levels and to provide for reduced marginal costs as
transaction volumes grow.

Christows continues to attract new discretionary funds under management and the
launch of our Multi-Manager Portfolio Service widens our product offering. The
concentration of effort continues to offer a traditional private client service,
whilst striving to offer new innovative products to our growing client base.

IP2IPO

At the end of 2002, the Group had a majority stake totalling 84% in IP2IPO Group
Limited, an Intellectual Property commercialisation company.

IP2IPO has continued through the second half of 2002 to make enormous progress
in the creation and development of spin out ventures from its two university
partnerships with Oxford University's Chemistry department and The University of
Southampton.

The three spin-outs completed in the second half of 2002; Glycoform, Capsant
Neurotechnologies and Southampton Polypeptides, added to those previously
established give IP2IPO significant equity stakes in a total of seven companies
derived from its two partnerships.  There is no doubt that IP2IPO offers the
Group a strong pipeline of assets spun-out of universities for a significant
period of time and these provide both capital appreciation and corporate
advisory revenue opportunities to the Group.

IP2IPO has many unique features.  The exclusive ownership of long term
intellectual property assets from Oxford University's Chemistry department and
The University of Southampton has enormous, as yet unrealised, value. The
embedded value of the existing intellectual property in these two institutions
is substantial.  In addition, the ongoing spend by third parties develops even
more leading edge intellectual property, creating further commercial
opportunities.

We are very confident that IP2IPO will deliver substantial value for
shareholders.

Non-recurring costs

Within 2002 there were significant exceptional costs that the Board does not
expect to be repeated.  The most significant of these is the impairment charge
of £10.9m against the goodwill arising on the acquisition of the Beeson Gregory
Group.  As we detailed in the circular at the time of the Group's share capital
reduction process in November 2002, this revaluation principally resulted from
the extreme downward movements in investment banking shares that occurred after
the transaction was completed, together with a reduction in the valuations
ascribed to certain private equity assets within Beeson Gregory's portfolio. The
restructuring costs within the Group totalled £1.3m, consisting of a redundancy
programme, professional fees associated with streamlining the Group's legal
entities following the merger and costs of arranging the share capital reduction
process.

Investment Provisions

The Board outlined at the half year results and in November's circular that the
valuations of the Group's legacy investments in private equity ventures had been
significantly reduced.  In total for the full year we have made further
provisions during 2002 of £4.5m and at the year end the portfolio has a value of
£1.5m.  As we have stated, the Group is now no longer actively involved in
principal private equity investment and will simply seek to extract some value
from exits from this portfolio.  Events subsequent to the year end have shown
that the value of the Group's investment in Inter-Alliance Group PLC  has been
reduced and the Board has decided it is prudent to recognise a write off of
£4.5m as at the balance sheet date.



Balance sheet strength



The Group continues to maintain its focus on the strength of its balance sheet.
As at 31 December 2002, the Group had a cash balance of £32m, had taken all
steps to ensure fixed asset investments were fully provided for where
appropriate and performed an impairment review of its goodwill balances.



Alex Snow
Chief Executive Officer









CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER


                                                  Continuing operations                  Total             Total
                                                               Acquisitions
                                                      2002              2002              2002              2001
                                                     £'000             £'000             £'000             £'000



Turnover                                             8,209             7,148            15,357             7,580

Commissions payable                                (1,631)                 -           (1,631)           (1,386)


Gross profit                                         6,578             7,148            13,726             6,194


Administrative expenses:
Administrative expenses before                    (10,790)           (7,571)          (18,361)          (14,110)

impairment of goodwill
Impairment of goodwill                            (10,865)                 -          (10,865)           (7,144)
                                                  (21,655)           (7,571)          (29,226)          (21,254)
Other operating income                                   2                90                92                31
Profit on sale of fixed asset

investments                                             19                 -                19             7,003
Provision against fixed asset

investments                                        (9,062)             (650)           (9,712)           (4,739)


Operating loss                                    (24,118)             (983)          (25,101)          (12,765)


Interest receivable and similar

income                                               1,116               230             1,346             1,896
Interest payable and similar

charges                                               (12)               (3)              (15)               (9)

Loss on ordinary activities

before taxation                                   (23,014)             (756)          (23,770)          (10,878)


Tax on loss on ordinary activities                   (117)                 -             (117)               369

Loss on ordinary activities

after taxation                                    (23,131)             (756)          (23,887)          (10,509)


Minority interest                                        -                51                51               (1)

Loss for the financial year

attributable to the members of                    (23,131)             (705)          (23,836)          (10,510)

The Evolution Group Plc












CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER


                                                                               2002                  2001
                                                                              £'000                 £'000
Fixed assets

Intangible assets                                                            11,432                     -
Tangible assets                                                                 973                 1,016
Investments                                                                  27,640                 4,764
Own shares                                                                      484                     -
                                                                             40,529                 5,780
Current assets

Debtors                                                                      18,721                 3,983
Equity shares                                                                 2,664                    64
Investments                                                                     176                     -
Cash at bank and in hand                                                     31,988                35,969
                                                                             53,549                40,016

Creditors: Amounts falling due within one year                             (17,706)               (2,413)


Net current assets                                                           35,843                37,603


Total assets less current liabilities                                        76,372                43,383


Provisions for liabilities and charges                                        (396)                 (414)


Net assets                                                                   75,976                42,969




Capital and Reserves

Called up share capital                                                       2,404                 8,153
Shares to be issued                                                             508                     -
Share premium account                                                        23,892                66,150
Merger reserve                                                               57,261                 6,031
Profit and loss account                                                    (12,053)              (37,367)

Total shareholders' funds                                                    72,012                42,967


Shareholders' funds - Equity                                                 72,012                35,996
Shareholders' funds - Non-equity                                                  -                 6,971

Minority interests - Equity                                                   3,964                     2

Minority interests & shareholders' funds                                     75,976                42,969












SUMMARY CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER


                                                                               2000                  2001
                                                                              £'000                 £'000


Net cash outflow from operating activities                                  (3,999)               (8,698)


Net cash inflow from returns on investments                                   1,306                 1,945
and servicing of finance

Taxation                                                                      (295)                 (106)


Net cash (outflow) / inflow from capital                                   (11,824)                 1,678
expenditure and financial investments

Acquisitions and disposals                                                   11,075                 2,300



Cash outflow before management of liquid                                    (3,737)               (2,881)
resources and financing


Net cash (outflow) / inflow from financing                                    (244)                 1,479


Decrease in cash in the year                                                (3,981)               (1,402)









Other information



The financial information in this statement has been prepared on the historical
cost basis, modified by the revaluation of certain assets held for trading
purposes. It does not constitute the Group's statutory accounts for the year
ended 31 December 2002 within the meaning of Section 240 of the Companies Act
1985. The statutory accounts for 2002 will be finalised on the basis of the
financial information presented by the Directors in this preliminary
announcement and will be delivered to the Registrar of Companies following the
Company's Annual General Meeting,



The Group will be circulating the full annual report and accounts to
shareholders and copies will be available from the Registered Office of the
Company, The Registry, Royal Mint Court, London EC3N 4LB from the date of
despatch to shareholders for one month.



Annual General Meeting



The arrangements for, and notification of business to be transacted at, the
Company's Annual General Meeting will be provided in the annual report and
accounts circulated to shareholders.



                                     -Ends-



For further information please contact:


The Evolution Group Plc                                           020 7488 4040
Richard Griffiths, Chairman
Alex Snow, Chief Executive Officer
Graeme Dell, Finance Director


Hogarth Partnership Limited                                       020 7357 9477
Andrew Jaques / Georgina Briscoe




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