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Knowledge Support (KSS)


Tuesday 08 May, 2001

Knowledge Support

AGM Statement

Knowledge Support Systems Group Plc
8 May 2001

     8 May 2001

                        Knowledge Support Systems plc

                              AGM Trading Update

In line with general market conditions the Company is experiencing a continued
slowdown in the rate of conversion of sales prospects into significant revenue
generating contracts.  However the Company is able to report that the rate of
growth of pilot and other projects actively being evaluated by prospective
customers continues to grow and remains either on target or in certain product
areas ahead of expectation.

In the retail sector, it had already become apparent that a more mature market
exists in America where the need for market adaptive pricing solutions to
support sophisticated pricing strategies is more generally accepted. Resources
have been re-directed to support significant opportunities there and the
recruitment of a Senior Vice President located in the United States is
underway to replace the recently departed UK based Senior Vice President.

The Company continues to believe that the recently announced move from
pursuing large up front perpetual licence fees in the retail sector to seeking
progressive licence fees linked more closely to customers' ability to
implement will be a key driver for increasing product uptake in both the US
and other markets.

Discussions continue with certain major retailers in the UK and the Company
remains confident that at least one of the projects which has already
completed its initial pilot phase will be converted into a contract before the
year end.

The Company's activities in the Petroleum sector are generating significant
levels of interest from existing and new companies with project activities
commencing with several new operators. The readiness of customers in this
market to adopt market adaptive pricing technologies is increasingly apparent.

The Company continues its strong relationship with Alcatel and is pleased to
report that the change of the marketing relationship to a non-exclusive basis
has now been finalised. This will enable the Company through its direct sales
activity to maximise the revenue stream for its telecommunication products.

Whilst the management remain confident about the prospects for the full year
and for the business in the medium term, due to the current instability in the
business climate for IT spend and the later than planned start of the project
activities, the first half revenues may well fall short of market

The Board has decided that it is now appropriate to strengthen the management
team and initiate the recruitment of a Chief Executive Officer to work closely
with Madan Singh, the founder, in taking KSS forward. Madan will then assume
the role of Executive Chairman.

The Company's cash balance remains strong at £29.0m.

For further information, please contact:
Madan Singh, Chief Executive Officer                  Tel: 0161 228 0040

Iain Cockburn, Finance Director
Buchanan Communications

Tim Thompson / Nicola Cronk                           Tel: 020 7466 5000


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