AGM Business Update

microgen

Information Management Solutions

www.microgen.co.uk

23 April 2002

                            EMBARGOED UNTIL 7.00AM                             

                             AGM - Business Update                             

Martyn Ratcliffe, Executive Chairman of Microgen plc, will provide the
following business update at the Annual General Meeting to be held at 9-00am
this morning.

'While the general IT market continues to be depressed, the Group's disciplined
approach has enabled Microgen's financial performance in Q1 to be maintained in
line with the Board's expectations.

In reviewing the first quarter, there are a number of items of note :

  * In February the acquisition of OST Business Rules was completed to form a
    new division, Microgen-OST ('OST'), and the integration is progressing
    satisfactorily. The prospect bank for software licences remains healthy and
    the consultancy operations retain high levels of utilisation.
   
  * Within Microgen-Kaisha ('Kaisha'), technical consultant utilisation has
    also remained at high levels. However, the utilisation of business analysts
    has declined, consistent with reports from other IT consultancies, as
    companies increasingly use internal resources for project definition. As a
    result, action has been taken to reduce exposure to these areas in order to
    ensure divisional profitability is maintained.
   
  * The Microgen-Telesmart ('Telesmart') division continues to perform
    satisfactorily. The recently announced contract with the Royal Bank of
    Scotland to provide business-to-business e-billing to its customers
    provides a new distribution channel and endorsement of the Group's hosted
    e-services model. Under the terms of the agreement, RBS and NatWest will
    promote Microgen to their corporate customers as their recommended supplier
    of B2B e-billing services.
   
The anticipated benefits of the acquisition of OST are already being realised
with cross-selling of Kaisha consultancy services into the financial services
sector and the development of the next generation of Telesmart payment solution
software products to be undertaken at the OST development operation in Wroclaw.

Overall, excluding the legacy print business which continues as forecast, the
consultancy operations in the OST and Kaisha divisions now account for over 50%
of the Group revenue, with managed e-services and applications software
contributing the additional turnover. The Board consider that this business mix
provides a balanced structure and a model for the future development of the
Group.'

Contact :

Mike Phillips, Group Finance Director 01753-847123

Giles Sanderson, Financial Dynamics 020-7831-3113