Pre-close update

3 December 2003

              Pre-Close Update on Trading and Integration of MMT               

Microgen plc provides a pre-close period update on current trading for the year
ending 31 December 2003 and also on the progress of the integration of MMT
Computing plc ('MMT'), the offer for which was declared wholly unconditional on
7 November 2003. Compulsory purchase provisions have been initiated and the
cancellation of trading in MMT shares is anticipated to take effect on 17
December 2003.

Trading Update

Market conditions for IT companies generally continue to be unpredictable and
the Board of Microgen continues to manage the business accordingly. In the
current year, Microgen's trading performance generally has continued to track
management's expectations except that the fourth quarter has benefited from a
substantial one-off payment by a large customer of the Group's hosted document
database business resulting in a material increase in profit contribution from
this division. As a result, the Board anticipates issuing results for the year
ending 31 December 2003 which will show profit before tax and goodwill
amortisation from continuing operations that is materially ahead of current
market expectations.

Integration of MMT

The integration of MMT into the Microgen Group is progressing rapidly and
satisfactorily. A strategic review of each MMT business is in progress and a
clear strategy is being implemented for each business sector.

IT Consultancy

The integration of the MMT consultancy activities into the Microgen-Solutions
division is well advanced and on schedule to be completed in the first quarter
of 2004, including :

  * Rebranding of all activities under the Microgen brand,
   
  * Consolidation of the consultancy resources under single management,
   
  * Consolidation of the MMT SSD and Microgen-Solutions Sales organisations,
   
  * Integration of MMT Hypnosis as a consultancy expertise, rather than a
    stand-alone business,
   
  * Integration of the MMT MVS business as a consultancy expertise, rather than
    a stand-alone business. (This business will be relocated from Oxford and
    the Oxford freehold building is to be marketed for sale.)
   
The clearer strategy differentiating IT Consultancy from low value-add
contractor placement is already producing margin improvements as consultancy
fee rates are renegotiated to market norms. However, there are also a number of
staff 'on-the-bench' with a mismatch between skills and cost, and a redundancy
process has therefore been initiated. Upon completion, the software and
services business of the Microgen-Solutions division will be based in London at
MMT's Angel Gate offices. The former Microgen London office will be vacated
through this consolidation.

Contractor Resourcing

The Contractor Resourcing business within MMT accounted for revenue of
approximately £2.25 million in the third calendar quarter of 2003 and had gross
margins of less than 10%. The two largest customers accounted for approximately
45% of the contractor revenue, but gross margins on these accounts were below
6%. Whilst nearly all IT consultancies benefit from the use of contractor
resources from time-to-time, such integral activities are very different from
the business model for low margin, commodity services of contractor placement.
By combining this low margin commodity activity with the MMT consultancy
business, MMT had experienced a general deterioration in fee rates and margins
as the positioning of the consultancy operations had become increasingly
confused and margins had migrated downwards.

It was apparent that the MMT contractor placement activity would not fit with
Microgen's strategy of providing value-added IT Services and Solutions. As a
result, a number of options for this business are being explored including
transitioning customers to more value-added services or exiting the
relationship where the services are purely commodity placement. As part of this
process, it has already been determined not to tender for the renewal of a
contractor placement contract of a large MMT customer.

Applications Management & Support

The Application Management businesses from Microgen and MMT have been combined
into a single operation, based in Welwyn Garden City. In June 2003, MMT made an
announcement that certain customer contracts had not been renewed on expiry. In
some cases the impact on MMT will only take effect in the first half of 2004.
This will produce a reduction in revenue but the consolidation being
implemented reduces costs accordingly, whilst also providing the benefits of
greater scale to the Group's customers with a wider skill base and increased
resource availability.

Help-desk services, previously provided by each business area, will also now be
consolidated into a single support capability. This will provide a more
efficient and cost-effective first-line support for the Group's customers.

In addition, the support of the MMT Pharmacy software has now been transferred
into the Applications Management function, reducing cost and providing greater
resource to support this legacy application.

Energy

The MMT Energy business is being relocated to London from Ipswich. The small
satellite development operation in Bristol will also be consolidated into the
relocated London base. This relocation will significantly reduce the cost base
through the use of shared support functions and enabling resource levels to be
adjusted to be consistent with the current business activity. However, through
the benefits of consolidation and scale, access to additional technical/
consultancy resources will be available should the business growth demand.

Summary

As indicated at the time of the Offer for MMT, the opportunities for
rationalisation of duplicated infrastructure costs have been significant,
including the closure of 3 office facilities. Shared functions, such as Group
management, IT infrastructure support, Finance and HR/payroll, have been
consolidated across the enlarged Microgen Group. In addition, there has been
significant progress in restructuring the enlarged Group, to position the cost
base in line with the revenue anticipated and to achieve the benefits of scale
from the consolidation of the businesses.

The actions taken since the acquisition will result in a headcount reduction in
the order of 50, equivalent to approximately 11% of the headcount of the
enlarged Group. The cost savings derived from these actions are estimated to be
in the range of £2.5 million to £3.0 million. A restructuring cost estimated at
£1.0 million to £1.5 million is anticipated to be incurred in 2003, as an
exceptional charge. The restructuring actions are well advanced and currently
scheduled to be completed by the end of the first quarter of 2004.

In summary, the Board is pleased that the Group is on track to deliver another
strong financial operating performance for 2003 despite the difficult market
conditions experienced during the year. Furthermore, the integration of MMT is
progressing well, with the anticipated revenue decline being more than offset
by the cost reductions being achieved from the consolidation of the businesses.

The Board of Microgen anticipates issuing the Preliminary Results for the year
ending 31 December 2003 in late February 2004.

Contact :

Microgen plc                            01753-847122                           
                                                                               
Martyn Ratcliffe, Executive Chairman                                           
                                                                               
Mike Phillips, Group Finance Director                                          
                                                                               
Financial Dynamics                      020-7831-3113                          
                                                                               
Giles Sanderson                                                                
                                                                               
Ben Way                                                                        

www.microgen.co.uk