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Workplace Tech PLC (WPL)

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Thursday 19 August, 1999

Workplace Tech PLC

Interim Results

WORKPLACE TECHNOLOGIES PLC
19 August 1999


INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 1999


Chairman's statement

Offer for Workplace Technologies by NTL Incorporated

It was announced today that agreement had been reached on the terms
of a recommended offer for Workplace Technologies of 228p in cash,
with a loan note alternative, ('the Offer') to be made by Morgan
Stanley & Co. Limited on behalf of NTL Incorporated.

Full details of the offer will be contained in the offer document
which is expected to be sent to shareholders shortly.  The Board
will unanimously recommend the Offer and its reasons for doing so
will be set out in the offer document.

Results

The results for the first six months of 1999 include the results of
the LanBase group for this period and reflect the costs of
financing the acquisition of LanBase.  Accordingly, the 1999
results are not readily comparable with the 1998 results.

Strong revenue growth from all parts of the Group meant that
turnover grew to £56.2 million (£40.0 million) for the period.
Gross margins also increased to 26.7 per cent. (1998: 23.6 per
cent.), reflecting an increasing proportion of total revenue from
network support services, which commands higher margins. However,
the significant expected costs of the LanBase integration and the
unexpected cost of retaining a key account restricted headline
operating profit to £2.1 million (1998: £2.0 million).

Following the acquisition of LanBase, the Group amortised £1.5
million (1998: £0.5 million) of goodwill and interest payable was
£0.8 million (1998: £0.2 million).  As a result of these increased
charges, the Group made a pre-tax loss of £0.3 million compared to
a £1.3 million profit in 1998.

Following the issue of 6.5 million shares upon the completion of
the acquisition of LanBase, the basic loss per share was 2.34 pence
and diluted headline earnings per share were 2.37 pence compared
with earnings per share of 2.44 pence and 4.06 pence respectively
in 1998.

During the period, the net cash outflow was £4.0 million after
making the final payment of £3.0 million on the acquisition of
LanBase. The collection of the debt owed by the Hong Kong Airport
Authority continues to progress. Cash receipts from the Hong Kong
Airport Authority totalled £1.1 million in the period and despite
an addition to our claim of £0.75 million, the debt reduced to £4.2
million.  Further significant receipts are expected in the second
half of the year. Overall, the debt to equity ratio has
improved from 81 per cent. as at 31 December 1998 to 79 per cent. 
as at 30 June 1999.

Review of Operations

During the first half of 1999 we continued to deliver the network
service requirements of customers, both large and small, while
expanding into new sectors and increasing our penetration of
existing sectors.
Many new major organisations were added to our client list during
the period, particularly in the commercial sector, so we now serve
customers in the financial services, media, retail and utilities
sectors, as well as education and central and local government. In
addition, the Pathway project implementation is progressing well.

We remain the dominant networking services company in Scotland,
working with many of Scotland's major blue chip organisations.
Workplace Technologies Ireland also continues to establish its
position as a leading player in the Irish market.

The network services business is growing strongly and revenue
should be in excess of 12 per cent. of total Group revenue in the
year. As this revenue stream grows, increasing economies of scale
should become evident in the results of the division.

Dividend

The Directors have declared an interim dividend of 0.6 pence per
share (net) which will be paid to shareholders on the register at
the close of business on 6 September 1999 on 8 October 1999 or, if
earlier, within 14 days of the Offer becoming or being declared
unconditional in all respects.

Outlook

As has been the case historically, the second half of the Group's
financial year remains the more important, both in terms of revenue
and profits.  Trading is in line with expectations and with the
current high level of tendering activity, allied to recent wins,
the Board believes that the Group is well positioned for the
remainder of 1999 and into 2000.

Philip Sellers
Chairman

Consolidated profit and loss account
for the period ended 30 June 1999

                                   Unaudited  Unaudited    Audited
                                    6 months   6 months       Year
                                       ended      ended      ended
                                     30 June    30 June         31
                             Note       1999       1998   December
                                        £000       £000       1998
                                                              £000

Turnover                              56,206     39,977     82,964
Cost of sales                       (41,223)   (30,557)   (62,171)
Gross profit                          14,983      9,420     20,793
Adminstrative expenses              (14,426)    (7,885)   (17,038)
Headline operating profit              2,056      2,001      4,893
Amortisation of goodwill             (1,499)      (466)    (1,138)
Operating profit                         557      1,535      3,755
Interest receivable and                    -         15         60
similar income

Interest payable and similar           (837)      (233)      (540)
charges

(Loss)/profit on ordinary              (280)      1,317      3,275
activities before taxation

Tax on (loss)/profit on      2         (390)      (638)    (1,441)
ordinary activities

(Loss)/profit for financial            (670)        679      1,834
period

Dividends of equity shares   3         (206)      (167)      (501)

Retained (loss)/profit for             (876)        512      1,333
the period

Unrealised exchange loss on             (33)          -          -
overseas subsidiary

(Loss)/profit transferred to           (909)        512      1,333
reserves

Earnings per share - basic   4       (2.34)p      2.44p       6.6p
Earnings per share - diluted 4       (2.29)p      2.41p       6.5p
Headline earnings per share  4         2.37p      4.06p      10.3p
- diluted

There were no other recognised gains or losses during the current
or preceding periods.


Consolidated balance sheet
at 30 June 1999

                              Unaudited  Unaudited    Audited 
                               6 months   6 months       Year
                                  ended      ended      ended
                                30 June    30 June         31
                                   1999       1998   December
                                   £000       £000       1998
                                                         £000 
Fixed assets
Intangible assets                26,950      8,640     28,357
Tangible assets                   1,462        895      1,531

                                 28,412      9,535     29,888

Current assets
Stocks                            9,618      6,146      9,222
Debtors                          30,437     11,344     27,685
Cash at bank and in hand              -      1,343          -

                                 40,055     18,833     36,907

Creditors: amounts falling     (38,253)   (16,848)   (34,029)
due within one year

Net current assets                1,802      1,985      2,878

Total assets less current        30,214     11,520     32,766
liabilities

Creditors: amounts falling     (11,301)    (2,497)   (12,944)
due after more than one year

Net assets                       18,913      9,023     19,822

Capital and reserves                                        -
Called up share capital           1,773      1,448      1,448
Share premium account            16,033      6,380      6,380
Shares to be issued                   -          -      9,978
Capital redemption reserve           59         59         59
Profit and loss account           1,048      1,136      1,957

Shareholders' funds - equity     18,913      9,023     19,822


Consolidated cash flow statement
for the period ended 30 June 1999

                              Unaudited  Unaudited    Audited
                               6 months   6 months       Year
                                  ended      ended      ended
                                30 June    30 June         31
                                   1999       1998   December
                                   £000       £000       1998
                                                         £000

Cash flow from operating          1,856      3,067    (2,920)
activities

Returns on investments and        (724)      (228)      (478)
servicing of finance

Taxation                          (153)      (251)      (627)

Capital expenditure and           (357)      (245)      (682)
financial investment

Acquisition                     (3,046)          -    (7,183)

Equity dividends paid             (334)       (75)      (242)

Cash (outflow)/inflow before    (2,758)      2,268   (12,132)
financing

Financing                       (1,272)      (350)     11,384

(Decrease)/increase in cash     (4,030)      1,918      (748)
in the period

Reconciliation of net cash flow to movement in net debt

Decrease in cash in the         (4,030)      1,918      (748)
period

Cash inflow/(outflow) in          1,271        357   (11,384)
debt and lease financing

Change in net debt resulting    (2,759)      2,275   (12,132)
from cash flows

Arising on acquisition of
LanBase European Holdings             -          -      (212)
Limited

Other non cash movements           (10)          -      (917)

Movement in net debt in the     (2,769)      2,275   (13,261)
period

Net debt at the start of the   (17,398)    (4,137)    (4,137)
period

Net debt at the end of the     (20,167)    (1,862)   (17,398)
period


Reconciliation of operating profit to operating cash flows

Operating profit                    557      1,535      3,755
Depreciation charge                 427        381        587
Goodwill amortisation             1,499        466      1,138
Loss on sale of fixed assets          -          2          4

Unrealised exchange loss on        (33)          -          -
overseas subsidiary

(Increase) in stocks              (396)    (1,233)    (1,861)

(Increase)/decrease in          (2,751)      2,161    (7,911)
debtors

Increase/(decrease) in            2,553      (245)      1,368
creditors

Net cash inflow from              1,856      3,067    (2,920)
operating activities


Notes to the accounts

1. Basis of preparation
The interim financial information has been prepared on the basis of
the accounting policies set out in the Group's annual report and
financial statements for the year ended 31 December 1998.

The interim report and results are unaudited and do not constitute
full accounts within the meaning of section 240 of the Companies
Act 1985.

The comparative figures for the year ended 31 December 1998 have
been extracted from the Group's annual report for the year ended 31
December 1998 which has been filed with the Registrar of Companies.
The auditors' opinion on those financial statements was unqualified
and did not include a statement under section 237(2) or (3) of the 
Companies Act 1985.

The comparative figures for the six months ended 30 June 1998 have
been extracted from the unaudited interim financial information for
that period as set out in the interim report for the six months
ended 30 June 1998.

2. Taxation
The charge for taxation for the six months to 30 June 1999 is based
on a rate of 30.25% (1998: 31%).

The UK tax charge for the period has been increased by the effect
of disallowable amortisation of goodwill of £1,499,000 (1998: £466,000).

3. Dividends
The Employee Trust has waived its right to receive dividends on the
shares owned by it, amounting in aggregate to £6,445 (1998: £6,750).

4. Earnings per share
The basic earnings per share for the six months to 30 June 1999 is
based on the loss of £670,000 (1998: profit of £679,000) divided by
28,672,810 shares (1998: 27,832,106), being the weighted average
number of shares in issue and ranking for dividend during the
period after adjustment to exclude those shares held by the Employee Trust.

The diluted calculation assumes that the options over 622,236 
shares (1998: 364,156) were exercised.

Headline earnings per share calculations are based on headline
operating profit which exclude amortisation of goodwill of
£1,499,000 for the six months to 30 June 1999, £466,000 for the six
months to 30 June 1998, and £1,138,000 in the year ended 31
December 1998.

Enquiries

Workplace Technologies plc               Tel:  020 7665 4500 
Andrew Vaughan, Managing Director
Steve Kent, Finance Director


                                           

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