Final Results - Year Ended 31 December 1999

BATM Advanced Communications Ld
14 March 2000



             BATM Advanced Communications Limited
       Final Results for the Year Ended 31 December 1999
                               


BATM Advanced Communications Limited, the London Stock
Exchange-listed developer of high speed IP packet based data
communications equipment, announces its results for the year
ended 31 December 1999.

There will be a meeting for analysts at the offices of Dresdner Kleinwort
Benson at 09.30am today, 20 Fenchurch Street, London EC3.

Highlights

Twelve months ended   1999         1998      
31 December
                                        
Turnover             $26.914m      $18.072m     Up 48.9%
Operating profit     $5.890m       $3.119m      Up 88.9%
Pre-tax profit       $8.453m       $3.621m      Up 133.4%
Earnings per share   25.58 cents   11.50 cents  Up 122.4%

Peter Sheldon, Chairman of BATM, said:

'The results show that 1999 was a year of real achievement.
We are also delighted by the Telco Systems acquisition and the
progress of our R&D programme.'

Dr Zvi Marom, Chief Executive of BATM, said:

'We are very encouraged by the trends in the market-place over
the last year which shows that the current is moving strongly
in our direction. We believe that BATM is positioned on the
crest of the new wave in communications.'

Enquiries:

Peter Sheldon, Chairman         0207 216 4448   0208 349 9462
Dr Zvi Marom, Chief Executive   0207 216 4448   00972 3 9386 888
Dresdner Kleinwort Benson
Mark Smith                      0207 475 7379
Shore Capital
Graham Shore                    0207 408 4090
Ludgate Communications
Edward Macquisten               0207 216 4448




Chairman's Statement

Introduction
I take great pleasure in reporting upon a year of real
achievement for the Company.  Not only was there strong growth
in turnover and profitability, but we also established major
new lines of business and made significant progress towards
our plan to become a major player in the global networking
market.


David Goldman MBE
The whole Company, as well as the wider community, has
suffered a major loss with the untimely death in October of my
predecessor, David Goldman.  His wise counsel, based on his
wide business experience, was combined with a clear
understanding of the rapidly changing environment in which we
operate.  We shall miss the important contribution that he
made to our Board deliberations and the humanity, humor and
compassion that he always showed.  We extend our deepest
sympathy to his wife and sons.  Daniel Goldman, ratification
of whose appointment to the Board will be sought at the
upcoming Extraordinary General Meeting, will make an important
contribution in his own right and will maintain our link with
the family, who remain major shareholders in the Company.


Financial Performance
Turnover for the year was $26,914,000 (1998: $18,072,000), an
increase of 49 per cent. We saw significant growth in North
America (131 per cent), largely from increased sales to 3M.

The increase in turnover was largely responsible for an
increase of 89% in Operating Profit at $5,890,000 (1998:
$3,119,000) The gross profit margin increase from 47 per cent
to 49 per cent, reflects the benefit of our investment in R&D
on our new product lines.  Although, selling, general and
administrative expenses increased, as we continue to expand
our marketing capacity, turnover growth meant that they
decreased from 25 per cent to 22 per cent of sales.

Gross research and development expenditure was $3,038,000
(1998: $1,492,000). However, after increased contributions
from the Israeli Chief Scientist, from the European market
Foundation and from our commercial partners, net research and
development expenditure was $1,397,000 (1998: $782,000).

Financial income was $2,466,000 (1998: $342,000).  The
increase is largely a result of the additional cash and
deposits held following the equity issues in June and November
described below.  Profit before tax was $8,453,000 (1998
$3,621,000), up 133 per cent, reflecting the increase in
operating profit and in financial income.

Net profit for the year was $8,387,000 (1998 $3,570,000),
giving earnings per share of 25.58 cents (1998 11.50 cents),
an increase of 122 per cent.  The balance sheet remains strong
with net cash and short-term investments of $228,096,000 at
the year-end. Most of this cash will be committed to the
acquisition of Telco Systems described in the announcement
made on 3 February 2000, further details of which will be
contained in a separate circular expected to be sent to
shareholders shortly.   As the Israeli tax concession enjoyed
by the company encourages the retention of profits, the Board
recommends an unchanged final dividend of 0.5025 cents per
share.

Launch of the Titan Family
We launched the Titan T4, first of the Titan family of
Ethernet and Internet Protocol (IP) switches, in the first
half of 1999.  We had built up a considerable backlog of
orders and the product therefore accounted for a substantial
proportion of our turnover in the second half as we went into
full production.  There is now little doubt that this product
meets a market need and its ability to handle both copper and
fibre connections (including 3M's Volition interface),
modularity and stackability have been well received.

Responding to customer demand, we developed and launched in
November 1999 an upgraded version of the T4, the T5, with
twice the capacity.  This too has built up a backlog of strong
orders.

More recently in January, we announced a variant of the T5
aimed particularly at the telco market, the Titan T5 QS, which
offers advanced load management and quality of service
features.  This is particularly targeted at users of mixed
traffic networks that seek quality of service whether the
traffic is voice, video or data over IP.  It represents an
advanced self-routing switch delivering a multitude of
features including packet connections over SONET/SDH and VDSL.
We expect to begin production by the end of June 2000.

VDSL
In October 1999 we announced that we had developed a product
line offering the potentially revolutionary Very-high-data-
rate Digital Subscriber Line (VDSL) technology.  Our VDSL
offering, provided as modules of the T4 and T5, is designed to
supply an end to end high bandwidth connection to a SOHO or
residential customer's premises over existing telephone wire
infrastructure.  The connection achieved is 10Mbps in the home
and 8 or 10Mbps back to the telephone exchange, i.e. full
standard LAN speed.  This would enable two-way high quality
video conferencing as well as other fast internet services.
The system is based on standard QAM software and is therefore
fully compliant with ETSI and ANSI VDSL standards.

This product offering has generated strong interest
from major telephone companies.  We announced at the end of
November that we received orders on behalf of two major telcos
for VDSL equipment for field trials which are now progressing.

Co-operation with 3M
On 2nd June 1999, BATM and 3M announced their agreement to
form an even closer working relationship focusing on mass IP
traffic, especially the Next Generation Internet, using fibre
optic and photonic networking.   3M invested $10 million in
new equity in the Company and holds an option to increase its
holding to up to 9.9%.

On 10th September 1999, we announced a further major order
from 3M to supply additional equipment supporting fibre
optical connections to the value of $18.5 million, with
shipments beginning in early 2000 and the order to be
fulfilled by the end of the year.

On 13th December 1999, we announced arrangements with 3M for
the joint funding of a programme to develop a fully functional
IP telephone handset.  This is to be offered in conjunction
with the Titan T4 and T5 products.  BATM has written in-house
management software for the Titan family to support normal
PABX functionality with speech quality comparable to standard
circuit switched telephone systems.

Research and Development
Our research and development efforts are focused on bringing
the electro-optic Titan T6 and photonic T8 switches to market
and supplying full supporting software to enable them to
deliver complete IP switch/router solutions.

T6
The Titan T6 was demonstrated by CERN as a working prototype
at Telecom Geneva in October 1999 and progress with the
product continues to be on or ahead of schedule.  The product
will deliver up to 256 Gbps of capacity through its non-
blocking, scalable and modular design and is aimed at the
telco market.  We expect to ship the first Titan T6 production
by the end of 2000.

T8
Work on the Titan T8 photonic switch is proceeding well.  In
conjunction with our partner Lynx Photonics, BATM demonstrated
a working prototype device incorporating Lynx's 8 x 8 photonic
crossbar at CeBIT, Hannover at the end of February 2000.
Progress in this area encourages us to believe that the first
version of the Titan T8 will be offered earlier than
previously anticipated.

Official List and November Share Placing
The Company joined the Official List of the London Stock
Exchange on 8th July 1999.  In November 1999, we completed a
placing of 3,926,740 new ordinary shares, approximately 9.99
per cent of the existing issued share capital, with
institutional investors raising £122.4 million (approximately
US$193.6 million) net of expenses of the Offering.  The
purpose of the Offering was to provide the financial resources
to enable us to move quickly if a complementary acquisition
opportunity in the US telco equipment market came available.

Telco Systems
We are delighted to report that we reached agreement subject
to conditions to acquire Telco Systems, a leading US
manufacturer of network transport and access systems for
leading telecommunication companies, for a total consideration
of US$326.6 million (£206.4 million).  The detailed terms of
the acquisition will be fully described in a separate
circular.  As part of the transaction funding, BATM is
intending to place an amount of shares to cover part of the
acquisition cost and expenses and enable the company to fund
additional bolt-on acquisitions when they arise. The fund
raising will also allow the Company some flexibility to
finance further small acquisitions without recourse to
shareholders.

The transaction delivers a strong strategic fit:

-    BATM has a pipeline of new IP products aimed at telcos

-    explosive internet growth is moving telcos from circuit
     to packet (IP) equipment

-    Telco Systems is strong in sales, distribution and
     technical support to US telcos

-    Telco Systems has a broad high quality customer base

-    the transaction expands and strengthens BATM's product
     base

-    the technology is complementary

-    the acquisition adds an experienced US management team to
     BATM

On completion of the acquisition, World Access, the vendor of
Telco Systems, will enter into a letter of intent to purchase
a range of BATM's products. In addition World Access will
retain 960,000 shares of BATM for a minimum period of 1 year.


Marketing
The acquisition of Telco Systems will enable BATM to expand
rapidly and develop our principal channels of distribution in
North America, particularly to telcos, competing local
exchange carriers and internet service providers. We are also
pleased with the development of our marketing arrangements to
other parts of the market and other parts of the world over
the last year.

Central Europe has been a major area of expansion for us and
we now have offices in Dusseldorf, Vienna and Warsaw and a
close working relationship with a major telco in the German
speaking world.  This is in addition to our already strong
distribution network for LAN products.  We continue to build
presence elsewhere in Europe, and have had our first successes
in the Far East.  We have established distribution
arrangements in China - our equipment was installed in the
Chinese Parliament building in Beijing, whilst the Far East
has strong potential for the future.  North American sales of
LAN equipment were strong, largely as a result of our
partnership with 3M.

New Manufacturing/R&D Facility
Work on the construction of our new manufacturing/R&D facility
in Yokneam is in the final stages of completion and we expect
to begin to occupy the complex in late April 2000. In all the
building will offer 6,200 square metres of high quality
factory, warehousing and office space which will enable the
company to maintain and expand its R&D programme as the growth
of the company continues.

Current Trading and Outlook
Current trading is in line with our expectations and the
benefits of the new product launches and wider marketing and
distribution are becoming apparent.  We are particularly
excited by customers' response to the Titan T5, QS and Spartan
product announcements and anticipate strong interest, as these
products become available.  We also expect a major boost to
our business as we benefit from the Telco Systems distribution
network.

Looking further ahead, the launch of the Titan T6 will
represent a major milestone, although the product is unlikely
to generate significant turnover this year.

Extensive research in optical networking and broadband
communication represent important steps in the company's
future. The quality and the size of our customers are
continually improving and we look forward to the future with
confidence.


Peter Sheldon
Chairman




CONSOLIDATED PROFIT AND LOSS ACCOUNT


                           Year ended  December 31                            
                             1 9 9 9      1 9 9 8
                               US$ in thousands
                                          
Turnover                      26,914       18,072
                                          
Cost of sales                 13,648        9,564
                              -------     -------
Gross profit                  13,266        8,508
                              -------     -------
                                          
Operating expenses                       
Research and development       3,038        1,492
costs
Less - participation           1,641          710
                              -------     -------
Research and development       1,397          782
costs,  net
                                          
Selling, general and           5,979        4,607
administrative expenses       -------     -------
                                          
 Total operating expenses      7,376        5,389
                              -------     -------
 Operating profit              5,890        3,119
                                          
 Financial income, net         2,466          342
 Other income, net                97          160
                              -------     -------
 Profit before taxes on        8,453        3,621
 income
                                          
 Taxes on income                 (66)       ( 32)
                              -------     -------
 Profit after taxes on income  8,387       3,589
                                          
Company's share in loss of                
  associated company              --         (19)
                              -------     -------
                                          
Net profit for the year        8,387       3,570
                                          
 Dividends                      (183)       (155)
                              -------     -------
Retained profit for the year   8,204        3,415
                              =======     =======
Earnings per share (in cents)  25.58        11.50
                              =======     =======
                                          
                                                          
                                                              
                                                              
CONSOLIDATED BALANCE SHEET

                                  December 31,       
                              1 9 9 9    1 9 9 8
                                US$ in thousands
Fixed assets                             
Tangible assets                 5,054       1,846
                                         
Goodwill                          907         132
                              -------     -------
  Total fixed assets            5,961       1,978
                                         
Current assets                           
  Stocks                        2,614       2,338
  Debtors                       8,638       5,434
  Short term investments       93,249       2,130
  Cash and cash equivalents   134,847      13,308
                              -------     -------
                              239,348      23,210
                                         
Creditors: amounts falling               
  due within one year           6,190       3,953
                              -------     -------
  Net current assets          233,158      19,257
                                         
Investments in associated       2,087       2,050
companies
                              -------     -------
Total assets less current     241,206      23,285
liabilities
                                         
 Non-current liabilities                 
                                         
Severance pay fund, net of       (212)        (78)
provision
                                         
Creditors: amounts falling               
  after more than one year               
  Long-term loan                   --         (40)
                              -------      -------
                                 (212)       (118)
                              -------      -------
 Net assets                   240,994      23,167
                              =======      =======
                                         
Capital and reserves                     
Share capital                   1,122         989
Additional paid-in capital    220,518      10,988
Receipts on account of share       --          40
capital
Foreign currency translation       16          16
adjustment
Profit and loss account        19,338      11,134
                              -------     -------
Shareholders' funds           240,994      23,167
                              =======     =======

CONSOLIDATED CASH FLOW STATEMENT


                             Year ended  December 31,       
                               1 9 9 9    1 9 9 8
                                 US$ in thousands


Net cash inflow from 
operating activities             5,917      2,229
                                ------     ------

Investing activities
Acquisition of shares in 
 a company                         (37)       (50)
Acquisition of shares
 in subsidiary                     154        (22)
Acquisition of shares in
 subsidiary (connectronix)        (184)    
Acquisition of fixed
 tangible assets                (3,641)      (685)
Proceeds from sale of
 tangible fixed assets             187         77
Investment in short term
 bank deposits                 (90,739)        --
Investment in marketable
 securities, net                   636     (1,625)
                               -------     -------
Net cash outflow from
 investing activities          (93,624)    (2,305)
                               -------     -------


Financing activities
Issue of share capital         208,380         --
Exercise options by
 employees and advisors          1,243         --
Repayment of short-term
 credit, net                      (222)       (11)
Dividend paid, net                (155)      (155)
                               --------    -------
Net cash inflow (outflow)
 from financing activities     209,246       (166)
                               --------    -------

Increase (decrease) in 
 cash and cash equivalents     121,539       (242)

Cash and cash equivalents
 at the beginning of the year   13,308     13,550    

Cash and cash equivalents
 at the end of the year        134,847     13,308
                              ========     =======



1.The financial information for the years ended 31 December
  1999 and 31 December 1998 is extracted from the Company's
  audited financial statements for those periods which carried
  an unqualified audit report. The 1999 annual report and
  audited financial statements will be sent to shareholders
  shortly.

2.Earnings per share for the years ended 31 December 1999
  and 31 December 1998 are calculated using the weighted average
  number of shares 32,785,430 and 31,056,112 shares in issue
  throughout the period.

3.The final dividend for the year ended 31 December 1999
  will be payable on 21 June 2000 to shareholders on the
  register on 14 May 2000.

4.Further copies of this announcement are available from the
  offices of Ludgate Communications, 111 Charterhouse Street,
  London EC1M 6AW.