Prelims

Lo-Q PLC
23 December 2004



Lo-Q PLC ('Lo-Q' or the Company')

Preliminary Results for the year ended 30 September 2004




The Company has made progress in a number of areas this year, and I have to
thank the loyal support of our staff in having made this an improved operating
season.



The group revenues in the year ended 30 September 2004 were £845,535 (2003 -
£2,315,143). This produced a loss before tax of £348,382 (2003 - £1,408,963).
However, the income derived from renting Q-bots rose by 26.5% when expressed in
dollar terms. Unfortunately, in common with other companies that have large
volumes of trade in the United States, the sterling value of the dollar income
has diminished significantly due to the weakness of the dollar.



Lo-Q supplies its goods and services to theme parks particularly in the United
States. Visitors to parks, where the system is installed, are able to rent a
Q-bot on a daily basis so as to avoid the tedium of waiting for rides in long
queues.



The recovery in attendance levels in theme parks, which fell after 9-11 has been
patchy, with some upturn being noted in the destination parks located in
Orlando. We are looking forward to full optimism returning to the industry and
visitor numbers increasing substantially.



Our major customer, Six Flags sold its collection of European parks and also its
poorly performing park in Ohio. Our system in this park has been removed and the
system can be used in another location.



I am pleased to report that our systems in the other Six Flags parks maintained
their excellent availability record with another year accomplished without a
single day lost for technical reasons. The system has now achieved over 20,000
operational working hours and during the season we served our millionth
customer.



The Company made progress in a number of areas this year, in particular in
increased customer penetration resulting in a good operating season. As an
example, we saw an increase in our Q-bot rental revenue of 28%, in a park whose
attendance grew by 6%. Six Flags have reported a small increase in 'in-park'
spending by their guests in the key July to September quarter and we are pleased
that our activities have been a contributor to this. The Lo-Q product created
over 2 million hours of spare leisure time for these Lo-Q guests in Six Flags
parks, providing them with many opportunities to enjoy, (and spend money on),
other park activities.



The Q-bot became a 'must have' item for an increasing number of guests and is
proving somewhat addictive. Our record user reached 34 daily rentals in the
season!



We improved the product in the following ways:-



*         increased reliability of the system and the efficiency of operation,

*         adding features to the Q-bot aimed at improving sales on quieter days,

*         a new, more rigid and waterproof Q-bot case and improvements to the 
          radio protocol to cope with any interfering radio signals,

*         networking of the park servers into our control centre in Henley 
          giving the system further improved operational up-time to almost 100%.



The proximity marketing feature produced its first income, which should grow
significantly in the coming season, simultaneously enhancing Six Flags guests'
in-park spend.



Later in the year, the Q-bot system was configured so as to be operational in
Europe. A trial system was installed in a couple of days in the Walibi World
park in Holland and then ran for the last 17 days of this season. The Dutch
media found the concept of queuing in cyberspace of great interest and five T.V.
channels featured news items about the system.



Outlook for next Year



The Company is still looking at ways in which the cost base might be further
reduced and, after reducing head count from 35 to 13, costs are being closely
monitored.



We have already identified opportunities to make significant growth in our
revenues from existing Six Flag installations and we are looking for this source
of income to grow. Six Flags expects an increase in attendances driven by the
'Mr Six' advertising campaign, improvements to guest service and new
attractions. We expect that our product will have increased penetration amongst
the higher number of park guests. We are however simultaneously looking to
produce revenue from other parks but our sales campaigns are moving at a slow
pace.



Last year we identified that with the downturn in theme park attendances, allied
with nervousness over the general state of the economy, and with the completion
of the installation of rides ordered in previous years, there was a reluctance
by theme park Company management to contemplate expenditure on long term
projects e.g. queuing systems.





This proved to be especially the case when the growth in guest queue lines was
no longer a major management issue. The problem was being solved by decreased
attendances and more ride capacity.



Our announced 'e-line' product, using wireless networking capability, allows a
major reduction in installation time and cost, as we demonstrated in the Dutch
trial. We are now in a position to offer smaller parks a commercially beneficial
system, which makes better use of our installation resources. We can thus target
a larger prospective customer base. In order to increase the needed sales we
have redoubled our selling energy.



Lo-Q has established its brand awareness, and our end customers are loyally
using the system to experience the joy of being removed from the queue line.



Conclusion



In light of the year's losses the Board does not recommend payment of a dividend
for the year. Whilst the Company's cash position in the short term is very
tight, we expect to be able to continue trading through 2005 and are hopeful
that we will secure further beneficial orders.




Jeff McManus - Chairman






PROFIT AND LOSS ACCOUNT

YEAR ENDED 30 SEPTEMBER 2004


                                                                                 2004                     2003
                                                                                    £                        £
GROUP TURNOVER
Q-Bot Rental Income                                                           845,535                  754,377
Park Installation                                                                   -                1,560,766
                                                                ---------------------    ---------------------
                                                                              845,535                2,315,143

Cost of sales                                                                 149,437                1,892,565
                                                                ---------------------    ---------------------
GROSS PROFIT                                                                  696,098                  422,578

Administrative expenses                                                     1,229,705                1,773,397
Other operating income                                                        (25,483)                       -
                                                                ---------------------    ---------------------
OPERATING LOSS                                                               (508,124)              (1,350,819)

Profit/(loss) on disposal of fixed assets                                     159,849                  (59,167)
                                                                ---------------------    ---------------------
                                                                             (348,275)              (1,409,986)
                                                                         
Interest receivable                                                               351                    1,488
Interest payable                                                                 (458)                    (465)
                                                                            
                                                                ---------------------    ---------------------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION                                  (348,382)              (1,408,963)

                                                                              (37,328)                 (97,881)

                                                                ---------------------    ---------------------
LOSS FOR THE FINANCIAL YEAR                                                  (311,054)              (1,311,082)
                                                                ---------------------    ---------------------
Earnings per share (pence)                                                      (2.17)                   (9.14)
                                                                ---------------------    ---------------------





GROUP BALANCE SHEET

30 SEPTEMBER 2004


                                                 2004                         2003
                                                   £              £              £                £
FIXED ASSETS
Tangible assets                                              51,157                         175,237


CURRENT ASSETS


Stocks                                       198,448                      219,790
Debtors                                      433,449                      577,180
Cash at bank and in                          259,297                      287,033
hand
                                       -------------               --------------
                                             891,194                    1,084,003
CREDITORS: Amounts                           110,421                      131,120
falling due within one
year
                                       -------------               --------------
NET CURRENT ASSETS                                          780,773                          952,883
                                                      -------------                   --------------
TOTAL ASSETS LESS CURRENT LIABILITIES                       831,930                        1,128,120
                                                      -------------                   --------------
CAPITAL AND RESERVES
Called-up equity share capital                              143,478                          143,478
Share premium account                                     4,971,617                        4,971,617
Other reserves                                               12,473                           12,473
Profit and loss account                                  (4,295,638)                      (3,999,448)
                                                      -------------                   --------------
SHAREHOLDERS' FUNDS                                         831,930                        1,128,120
                                                      -------------                   -------------- 






GROUP CASH FLOW STATEMENT

30 SEPTEMBER 2004




                                               2004                          2003
                                                  £               £             £                 £
NET CASH (OUTFLOW)/INFLOW                                  (357,138)                         19,098
FROM OPERATING ACTIVITIES

RETURNS ON INVESTMENTS
AND SERVICING OF FINANCE
Interest received                               351                         1,488
Interest paid                                  (458)                         (465)
                                       -------------               --------------
NET CASH (OUTFLOW)/INFLOW                                     (107)                           1,023
FROM RETURNS ON
INVESTMENTS AND SERVICING
OF FINANCE

TAXATION                                                    124,730                           1,023

CAPITAL EXPENDITURE
Payments to acquire                         (35,204)                      (60,678)
tangible fixed assets
Receipts from sale of                       223,648                         3,422
fixed assets
                                       -------------               --------------
NET CASH INFLOW/(OUTFLOW)                                   188,444                         (57,256)
FROM CAPITAL EXPENDITURE
                                                       -------------                 --------------
(DECREASE)/INCREASE IN                                      (44,071)                        112,923
CASH                                                   -------------                 --------------
                                                     









RECONCILIATION OF OPERATING LOSS TO NET CASH (OUTFLOW)/INFLOW

FROM OPERATING ACTIVITIES


                                                                          2004                         2003
                                                                             £                            £
Operating loss                                                       (508,124)                  (1,350,819)
Depreciation                                                            94,014                      157,834
Decrease in stocks                                                      21,342                    1,606,968
Decrease in debtors                                                     56,329                       28,327
Decrease in creditors                                                 (20,699)                    (423,212)


                                                   ----------------------------    ------------------------
Net cash (outflow)/inflow from operating                              (357,138)                     19,098
activities
                                                  -----------------------------    ------------------------



RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS


                                                                               2004                   2003
                                                                                  £                      £

(Decrease)/Increase in cash in the period                                  (44,071)                112,923
Translation differences                                                      16,335                 14,050
                                                          -------------------------    -------------------
Movement in net funds in the period                                        (27,736)                126,973
                                                          -------------------------    -------------------
Net funds at 1 October 2003                                                 287,033                160,060
                                                          -------------------------    -------------------
Net funds at 30 September 2004                                              259,297                287,033
                                                          -------------------------    -------------------














NOTES TO THE FINANCIAL STATEMENTS

YEAR ENDED 30 SEPTEMBER 2004



1.       GOING CONCERN



          The Company meets its day to day working capital requirements from the
internal generation of revenues and has no agreed bank overdraft facilities.
The nature of the Company's business is such that receipts from the theme park
revenues are of a seasonal nature, and significant future income will not be
generated from this source until April 2005 onwards.  Although the Company has
taken steps to reduce its expenditure, the cash flow projections indicate that
further finance will be required before April. The directors have expectations
of obtaining sufficient financial support, should this prove to be necessary.
On this basis, the directors consider it is appropriate to prepare the financial
statements on a going concern basis. Should the Company not receive such
financial support it would need to find alternative sources of funding. The
financial statements do not include any adjustments that would result from a
failure to obtain necessary finance.





2.       EARNINGS PER SHARE


                                             2004                      2003
                                             pence                     pence


Earnings per ordinary share                  (2.17)                   (9.14)
                                             ------------------------------           


          Basic loss per ordinary share is calculated by dividing the loss
attributable to ordinary shareholders of £311,054 (2003 - £1,311,082) by the
weighted average number of shares in issue during the relevant financial period
of 14,347,837 (2003 - 14,347,837).



          The loss attributable to ordinary shareholders and the weighted
average number of ordinary shares for the purpose of calculating the diluted
earnings per ordinary share are identical to those used for basic earnings per
ordinary share. This is because the exercise of share options would have the
effect of reducing the loss per ordinary share and is therefore not dilutive
under the terms of FRS14.





3.       Copies of the accounts for the year ended 30 September 2004 will be
sent to shareholders in due course and will be available from the Company's
office at New Close, Greenlands, Henley-on-Thames, Oxfordshire RG9 3AL




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