Final Results

Knowledge Technology Solutions PLC
04 December 2007



RNS Release
4 December 2007


                       KNOWLEDGE TECHNOLOGY SOLUTIONS PLC

              PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2007



Knowledge Technology Solutions PLC (AIM: KTS), provider of market information
services in the finance sector, reports its unaudited results for the year ended
30 June 2007.



Financial and business highlights:



•        Turnover reduced to £1.0m (2006: £1.4 m)

•        Group loss before tax of £1.1m (2006: £1.0m)

•        Completed substantial fund raising amounting to over £1.7 million (net
         of expenses)

•        Continued to make investment in the enhancement of our underlying
         technology

•        Acquisition of Arcontech Limited completed in September 2007

•        In September 2007, announced a significant contract win for CfD and
         Spread Betting trading solution with Hichens Harrison
 


Richard Last, Chairman of Knowledge Technology Solutions, said:



'The addition of Arcontech has brought closer the time by which the Group should
reach profitability.  Cost reductions and the organic growth anticipated from
the KTS Solutions business are also expected to generate financial benefits for
KTS.  The Board's priority and immediate focus is to stem the recurring losses
in the KTS business whilst supporting the organic development of Arcontech.  We
will, however, continue to look for and pursue suitable acquisition
opportunities, which would enhance shareholders' value.'



Enquiries, please contact:


Dr Marc Pinter-Krainer      Knowledge Technology Solutions PLC   020 7256 2300
Mike Coe/Marc Davies        Blue Oar Securities PLC              0117 933 0020
Katie Hunt/Will Henderson   Smithfields                          020 7360 4900





Chairman's Statement



Introduction



This is my first report to you as Chairman.  The period since 30 June 2006 has
been one of considerable change for Knowledge Technology Solutions Plc ('KTS').



During the year KTS completed substantial fund raising amounting to over £1.7
million (net of expenses), which has been used to provide additional working
capital and to substantially strengthen the company's balance sheet.  In
September 2007 the acquisition of Arcontech, a provider of IT solutions for the
CfD and Spread Betting markets, for an initial consideration of £1.24 million in
cash and 45 million new ordinary shares in KTS, has also substantially broadened
and strengthened the Group's trading activities.  Recent sales wins by
Arcontech, including Hichens Harrison, give us confidence that significant
opportunities exist in this area.



As regards the original KTS business, considerable development has been
undertaken to provide solutions for our customers relating to MiFID and internal
data aggregation, and whilst we believe opportunities in these areas remain we
have not yet succeeded in winning any significant orders for these products.  We
are focusing sales effort in these areas to identify the opportunities that may
exist.



The Market Terminal Subscription business has been disappointing with a net
reduction in subscribers over the year and we are presently carrying out a
detailed review of this part of the business.



The results for the year to 30 June 2007 which report a 31% reduction in
turnover to £982,000 (2006 £1,417,000) and an operating loss of £1,191,000 (2006
£1,070,000) are reviewed in detail in the Chief Executive's Review.



Board Appointments



In addition to my own appointment to the Board on 19 February 2007, Louise
Barton also joined on that date.  Louise has over twenty years experience in the
City in both Fund Management and Stockbroking and provides the Board with
excellent support and advice on such issues as fund raising, shareholder
communication and in the areas of customer expectation and needs from our
products.



Andrew Miller, Managing Director of Arcontech, joined the Board of KTS as Chief
Technology Officer following the acquisition of Arcontech on 4 September 2007.
Andrew brings a wealth of knowledge and experience of the IT Solutions market-
place in the City of London.



Employees



I would like to thank all our employees for their hard work and commitment to
the Group over the last year.




Business Development



We propose to continue to develop the Group's business in providing IT Solutions
for data aggregation and dissemination within and between financial
institutions.   The IT solutions provided by Arcontech, particularly in the
Spread Betting and CfD areas will also be a focus for continued development.  We
are confident of organic growth opportunities in these areas.



Outlook



The addition of Arcontech has brought closer the time by which the Group should
reach profitability.  Cost reductions and the organic growth anticipated from
the KTS Solutions business are also expected to generate financial benefits for
KTS.  The Board's priority and immediate focus is to stem the recurring losses
in the KTS business whilst supporting the organic development of Arcontech.  We
will, however, continue to look for and pursue suitable acquisition
opportunities, which would enhance shareholders' value.



Richard Last



Chairman

4 December 2007






Chief Executive's review



It has been an exciting period for KTS since our last report, marked by the
successful acquisition of Arcontech, the award-winning specialist middleware
software company, as well as further development work focused on solutions which
are designed to address the changing market requirements, particularly in the
light of opportunities presented by the Markets in Financial Instruments
Directive (MiFID).



During the year ended 30 June 2007, turnover continued to be solely attributable
to the MarketTerminal subscription service which continues to address a
challenging market place. Turnover dropped 31% to £981,745 (2006: £1,417,063) in
part as a result of the discontinuation of international market coverage, which
took effect from 1 January 2007. Although costs decreased by £314,389 compared
to the previous year, this was not sufficient to compensate for the decrease in
subscription revenue and as a result, pre-tax losses increased by 12% to
£1,140,518 (2006: £1,016,166).



We have continued to make significant investment in the enhancement of our
underlying technology to reduce latency, increase stability and reduce total
cost of ownership.



The acquisition of Arcontech, completed on 4 September 2007, provides us with a
basis for offering complete solutions combining front-end display components
based on our proven MarketTerminal application and the award-winning middleware
solutions in which Arcontech specialises. Arcontech's middleware products
currently provide a broad base of blue chip customers including major investment
banks, data vendors and leading spread betting and Contracts for Difference
(CfD) brokerages with leading edge solutions for real time calculation,
publishing, distribution and aggregation of financial data, as well as a
complete online trading platform.



Arcontech's trading platform (AXE), which comprises a low latency price
calculation engine, order management and position keeping, as well as a full
back office administration system, allows Arcontech to exploit the fast growing
CfD and Spread Betting markets. In September 2007, we announced a significant
contract win for the provision of this trading solution to Hichens Harrison.



We are currently looking at ways to capitalise on our investment in the
MarketTerminal technology to provide customised solutions to financial
institutions.



The increased resources, technology and blue-chip client base brought to the
Group through the acquisition of Arcontech provides a solid base to address the
increasing demand for sophisticated real-time, on-line and web-based data
distribution and trading systems.



Marc Pinter-Krainer



Chief Executive

4 December 2007






Consolidated Profit and Loss Account

For the year ended 30 June 2007
                                                                        Note       Year ended          Year ended
                                                                                 30 June 2007        30 June 2006
                                                                                            £                   £
Turnover                                                                 1            981,745           1,417,063
Distribution costs                                                                (1,043,738)         (1,316,988)
Administrative costs                                                              (1,129,359)         (1,170,498)
Operating loss                                                                    (1,191,352)         (1,070,423)
Interest receivable                                                                    50,834              54,257
Loss on ordinary activities before taxation                                       (1,140,518)         (1,016,166)
Taxation                                                                 2                  -                   -
Loss on ordinary activities after taxation                                        (1,140,518)         (1,016,166)
Dividends                                                                3                  -                   -
Retained loss for the year                                                        (1,140,518)         (1,016,166)
Loss per share                                                           4            (0.45)p             (0.69)p
Diluted loss per share                                                   4            (0.45)p             (0.69)p



All of the results relate to continuing operations.



There are no recognised gains or losses other than the loss for the year.






Consolidated Balance Sheet

As at 30 June 2007
                                                                                      2007              2006
                                                                                         £                 £
Fixed assets
Tangible assets                                                                    122,226           158,527
Investments                                                                              -                 -
                                                                                   122,226           158,527
Current assets
Debtors                                                                            216,641           229,059
Cash at bank and in hand                                                         1,473,451           961,878
                                                                                 1,690,092         1,190,937
Creditors: amounts falling due within one year                                   (442,542)         (562,723)
Net current assets                                                               1,247,550           628,214
Net assets                                                                       1,369,776           786,741
Capital and reserves
Called up share capital                                                            332,532           148,275
Share premium account                                                            6,316,870         4,777,574
Profit and loss account                                                        (5,279,626)       (4,139,108)
Equity shareholders' funds                                                       1,369,776           786,741



Approved on behalf of the board on 4 December 2007 by:


Marc Pinter-Krainer                   Michael Levy
Chief Executive Officer               Group Finance Director






Consolidated Cash Flow Statement

For the year ended 30 June 2007
                                                                                   Year ended       Year ended
                                                                                 30 June 2007     30 June 2006
                                                                                            £                £
Net cash outflow from operating activities                                         (1,254,885)       (778,952)
Returns on investments and servicing of finance
Interest received                                                                       50,834          54,257
Net cash inflow from returns on investments and servicing of finance                    50,834          54,257
Purchase of tangible fixed assets                                                      (8,971)        (29,480)
Sale of tangible fixed assets                                                            1,042               -

Net cash outflow from capital expenditure and financial investment                     (7,929)        (29,480)
Net cash outflow before financing                                                  (1,211,980)       (754,175)
Financing
Issue of share capital                                                               1,842,571               -
Expenses paid in connection with share issue                                         (119,018)               -
Net cash inflow from financing                                                       1,723,553               -
Increase/(Decrease) in cash in the year                                                511,573       (754,175)



All cash flows relate to continuing operations.






Notes to the Preliminary Statement



1    Turnover



Turnover is attributable to the principal activities of the Group being the sale
of real-time data and analysis services, together with advertising and
sponsorship revenue.  All turnover arises within the UK.



Income is recognised over the contract period.



2    Taxation on loss on ordinary activities



As a result of the losses available, no liability to UK corporation tax arose on
the ordinary activities for the year ended 30 June 2007.



3    Dividends



      The Directors do not recommend the payment of a dividend.



4    Loss per ordinary share



      The loss per Ordinary Share has been calculated by dividing the loss on
ordinary activities after tax attributable to shareholders by 254,113,141 (2006:
148,274,732), being the weighted average number of Ordinary Shares in issue
during the year, which carry the right to receive a dividend.  As a result of
the loss for the year there is no difference between the basic and diluted loss
per share.



5    Post balance sheet events



On 7th August 2007 the Company exchanged a conditional contract for the
acquisition of the entire issued share capital of Arcontech Limited. The
acquisition was completed on 4th September 2007. The initial consideration was
satisfied with cash of £1,239,933 and the issue of 45 million Ordinary shares of
0.1 pence. In addition, deferred consideration capped at £300,000 is payable in
cash or shares if Arcontech Limited achieves turnover over £1.2 million and up
to £2.2 million in the twelve month period immediately following the completion
of the acquisition.



The Company allotted Ordinary Shares of 0.1 pence each as follows:


Date                                      Number

3 September 2007                          111,111,111 shares at 0.9 pence per share
4 September 2007                          45,000,000 shares at 0.9 pence per share




6    Annual report and accounts



      The foregoing financial information does not amount to full accounts
within the meaning of Section 240 of the Companies Act 1985 and has not been
reported on but has been agreed with the Company's auditors.  The Annual Report
and Accounts will be filed at Companies House following the Annual General
Meeting and will be posted to shareholders shortly. Copies will be available
from the Company Secretary at 8th Floor, Finsbury Tower, 103-105 Bunhill Row,
London, EC1Y 8LZ.



7    Annual General Meeting



      The AGM will be held at 8th Floor, Finsbury Tower, 103-105 Bunhill Row,
London, EC1Y 8LZ, on 28 December 2007 at 10 am.




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