Interim Results

Netcall PLC
06 February 2006


6 FEBRUARY 2006

                                  NETCALL PLC
                          ('Netcall' or 'the Company')


             Interim Results for 6 months ended 31st December 2005


Netcall provides telephony solutions, including its innovative flagship product
QueueBuster(TM), which enables call centres to manage call queuing, reduce costs
and enhance customer service.

                                   HIGHLIGHTS

Financial

  • Sales of £1.59 million (H1 FY2005: £1.43 million), representing
    year-on-year growth of 11.2%

  • Gross profit of £1.36 million (H1 FY2005: £1.16 million), an increase of
    17.3%

  • Gross margin improved 5% to 86% (H1 FY2005: 81%)

  • Profit before tax up approximately 200% to £149,100 (H1 FY2005: £50,600)

  • Cash position of £1.7 million (H1 FY2005: £1.1 million)


Operational

  • Increased sales led by continuing strong growth in the Hosted Service .

  • Increasing visibility of revenue stream

  • Launch of enhanced product range and new branding

  • New customers and repeat orders from customers in the Financial,
    Telecommunications and Government sectors

Ron Elder, Chairman of Netcall, commented:

'These results represent another positive step forward in the performance of the
Company. To an extent, much of the progress made is foundation building for the
future, no more so than in the hosted services side of the business which is
showing real potential. This success and a move towards a more robust business
model will serve to enhance the predictability of the revenue stream. Based on
this change and significant market interest, we look forward to a successful
outcome for the year.'


                              CHAIRMAN'S STATEMENT

Results

We are pleased to report that we have made another positive step forward during
the first half of the current financial year. This has resulted in an
improvement in business fundamentals and, importantly, the fourth consecutive
half of growing profits which is evidence of the improving health of the
business. Of particular note, our hosted service offering has continued to gain
market traction in the half. This is a great endorsement of the underlying
technology and service offering that will underpin our stability and future
growth.

Turnover for the 6 months ended 31 December 2005 was £1.59 million, compared to
£1.43 million in the corresponding period in 2004, an increase of 11.2%. Growth
in turnover was to a large degree the result of a significant increase in
services revenue which showed an increase of 112% in comparison with the same
period last year and which has grown for the fourth consecutive half year.

During this half year the gross margin achieved was similar to that achieved in
the second half of last year. This sustained margin reflects a year on year
margin improvement of 5% and resulted in gross profits increasing by 17.3% to
£1.36m (2004: £1.16m).

Operating costs increased by 10.5% reflecting an increased level of investment
in marketing, which included product re-branding, and costs associated with the
re-organisation of operations.

These figures are encouraging and show that we have been able to generate
increased profits from a stable cost base. Accordingly, profits before tax
increased by 195% from £50,000 in H1 FY2005 to £149,000 in the first half of
FY2006.

Earnings per share were 0.2p ( FY2005: 0.1p). Our cash position remains strong,
with £1.7m of cash as at 31st December 2005 as a result of the cash generative
nature of the business.



Operational Review

QueueBuster

The main area of progress in the half was the increase in contribution to sales
of the hosted version of QueueBuster. This is due to the addition of new
customers as well as the requirement from existing customers for increased
capacity. During the first half we have continued to see significant levels of
interest in this solution. The significant benefits of using the hosted service
are such that many new customers are now taking advantage of the flexibility
associated with this solution. New hosted service customers included those from
the Financial, Telecommunications and Government sectors.


Launch of QueueBuster Version 3

In addition, we launched in the half a new version of our flagship product,
QueueBuster, which has a number of enhanced features and functionality, all
aimed at helping businesses to roll out a solution that fits their needs while
continuing to increase staff productivity and improve customer satisfaction.
QueueBuster Version 3 is, we believe, the most advanced solution currently
available both as a hosted service and as a solution installed 'in house' at a
customer's premises. QueueBuster Version 3 offers a fully managed system,
creating an easy-to-install and low-risk solution for businesses. This enables
businesses to choose a solution which best matches their needs.

In November, we also launched our Intelligent Communications PlatformTM (ICP)
which incorporates a series of enhanced products including Netcall CallMeBack,
InTouch and Identifier. They are designed for organisations of any size and
provide flexible ways to boost call handling efficiency as well as improving
customer service.

Based on run rate revenues from hosted services and the contracted revenue
relating to existing maintenance contracts, we currently have visibility of
approximately £1.0m for the remainder of the financial year.

Expansion of channel sales operation

We continue to see the growth in revenues generated through our channels as
being key to enabling the Company to best leverage its technology. I am pleased
to report that during this half growth in channel generated service revenues
contributed a significant proportion of the overall increase over the second
half of last year. Overall sales through our channels represented 24% of the
companies total revenues.

New branding and marketing campaign

In conjunction with the expansion of our sales channel operation and the
launching of new products we have focused resources on the marketing and
branding of our product offerings. The new branding provides much greater
clarity as to the benefits to customers of employing Netcall technology. It is
accompanied by a new corporate and product identity and logos, and currently we
are executing a number of marketing related activities to stimulate lead
generation and sales.

Outlook

These results represent another positive step forward in the performance of the
Company. To an extent, much of the progress made is foundation building for the
future, no more so than in the hosted services side of the business which is
showing real potential. This success and a move towards a more robust business
model will serve to enhance the predictability of the revenue stream. Based on
this change and significant market interest, we look forward to a successful
outcome for the year.

Ron Elder
Chairman
6 February 2006




NETCALL PLC

Consolidated Profit and Loss Account

                             Six Months to      Six Months to         Year Ended
                             31st Dec 2005      31st Dec 2004     30th June 2005
                                     £'000              £'000              £'000

Turnover                           1,592.7            1,432.0            2,822.1
                               -----------        -----------        -----------
Product                            1,053.9            1,178.5            2,172.0
Services                             538.8              253.5              650.1
                               -----------        -----------        -----------

Cost of Sales                      (228.1)            (269.4)             (469.1)
                               -----------        -----------         -----------
Gross profit                      1,364.6            1,162.6             2,353.0

Administrative expenses           (1249.9)          (1,130.8)           (2,233.0)
Other operating income               10.5                  -                 7.9
                              -----------        -----------         -----------

Operating profit before
Interest                            125.2               31.8               127.9
Interest receivable                  28.9               20.8                44.6
Interest payable                     (5.0)              (2.0)              (14.4)
                              -----------        -----------         -----------
Profit before taxation              149.1               50.6               158.1
Taxation                                -                  -                   -
                              -----------        -----------         -----------
Net profit                          149.1               50.6               158.1
                              ===========        ===========         ===========

Profit per ordinary share            0.2p               0.1p                0.2p





Consolidated Balance Sheet

                                          As at           As at            As at
                                  31st Dec 2005   31st Dec 2004   30th June 2005
                                          £'000           £'000            £'000
Fixed Assets
Intangible assets                             -           26.3                 -
Tangible assets                           189.0          108.5             172.4
                                       ---------      ---------       ----------
                                          189.0          134.8             172.4
Current assets
Stock                                      18.2           96.0              19.5
Debtors due within one year             1,023.9        1,239.3           1,079.3
Cash at bank and in hand                1,735.7        1,068.5           1,393.4
                                      ---------       ---------       ----------
                                        2,777.8        2,403.8           2,492.2
Creditors: amounts falling due
within one year
Trade creditors                           297.4          147.9             128.6
Deferred revenue                          629.2          663.6             233.1
Other creditors including
taxation                                  453.5          387.2             856.2
and social security
                                       ---------      ---------       ----------
                                        1,380.1        1,198.7           1,217.9

Net current assets                      1,397.7        1,205.1           1,274.3
                                      ---------      ---------        ----------
Total assets less current
Liabilities                             1,586.7        1,339.9           1,446.7
Creditors: amounts falling due
after one year                             72.5          102.5              87.5
                                       ---------      ---------       ----------
                                        1,514.2        1,237.4           1,359.2
                                      =========      =========       ==========
Capital and Reserves
Called up share capital                 3,289.6        3,275.5           3,285.6
Share premium account                  15,121.8       15,115.5          15,120.0
Special and capital reserves              245.0          245.0             245.0
Profit and Loss Account               (17,142.2)     (17,398.6)        (17,291.4)
                                       ---------      ---------       ----------
                                        1,514.2        1,237.4           1,359.2
                                       =========      =========       ==========


Consolidated Cash Flow

                                Six Months to    Six Months to       Year Ended
                                31st Dec 2005    31st Dec 2004   30th June 2005
                                        £'000            £'000            £'000
Net cash outflow from
operating activities                    388.6           (158.8)           208.1

Returns on investments and
servicing of finance                     21.9              2.7             30.1

Capital expenditure and
financial investment                    (59.1)           (17.2)           (86.3)
                                      ---------       ---------       ----------
Cash outflow before financing           351.4           (173.3)           151.9

Financing                                (9.2)           (15.0)           (15.4)
                                      ---------       ---------       ----------
Increase/ (Decrease) in cash            342.2           (188.3)           136.5
                                      ---------       ---------       ----------




Notes to the Interim Statement


1. For the purposes of Section 240 of the Companies Act 1985:

(a) This Interim report does not constitute a set of statutory accounts. The
    interim financial information has been prepared on the basis of the 
    accounting policies which were applied in preparation of the annual 
    financial statements to 30th June 2005. The results for the six months to 
    31st December 2004 have been restated to the reporting utilised in the 
    audited results for the year ended 30th June 2005

(b) Statutory accounts in respect of the year to 30th June 2005 have been
    delivered to the Registrar of Companies and those accounts were subject to 
    an unqualified report by the Auditors. Accounts for the six month period 
    ended 31st December 2004 and 31st December 2005 have not been delivered to 
    the Registrar of Companies.

2. The Board has not declared an interim dividend to shareholders (2004: 0 pence 
   per share).

3. The profit per ordinary share is calculated by dividing the net profit for the 
   period attributable to ordinary shareholders by the weighted average number 
   of 65,790,936 ordinary shares in issue during the six months ended 31st 
   December 2005 (31st December 2004: 65,509,270 and 30th June 2005:65,592,187).

4. Administration and other operating expenses includes £48,500 relating to 
   reorganisation costs (31st December 2004: £16,000 and 30th June 2005: 
   £21,160).

Copies of this interim report are being sent to all shareholders on the Register
of Members on the 6th February. Further copies of the Interim Statement are
available from the Registered Office of the Company: 10 Harding Way, St. Ives,
Cambridgeshire, PE27 3WR and from the Company's web site: www.netcall.com










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