Interim Results

Glen Group PLC
20 June 2005


Issued on behalf of Glen Group plc
20th June 2005




                                 GLEN GROUP plc
                Results for the half year ended 31st March 2005


Edinburgh based, Glen Group plc, the AIM listed IT and communications
integration business today announces its results for the half year ended 31st
March 2005


Highlights

   • First results since admission to AIM in December 2004, reflecting costs
     of admission and increased sales and support team
   • Product and service mix changing with margins increasing
   • Appointment of Head of Sales in May 2005
   • Group set to expand Broadband voice services ('VoIP') and announces
     raising of additional funds to pursue such activities


The Chairman of Glen Group, Eric Hagman, commented:

'I joined the Board of Glen just prior to its AIM Admission, and I am impressed
with the progress that has been made over a very short period. The foundations
of the business have been laid, and your Board is optimistic that there is a
market for a single source supplier, a 'one-stop-shop' that can deliver a range
of business focused IT and communications services and, importantly, ensure that
they all work together as they should.'

Full statement attached

Enquiries:

Glen Group plc
Graham J Duncan, Chief Executive           0845 119 2100
[e-mail]

Walters Associates
Alex Walters                               07771 713608
[e-mail]




                              CHAIRMAN'S STATEMENT

REVIEW

Glen Group plc ('Glen') was incorporated on 14th October last year and it
acquired Glen Communications Limited ('Communications'), our operating company
with effect from 15th November 2004. Our shares were admitted to AIM on 1st
December 2004.

Glen came to the market at a very early stage and it remains a small company.
The operating entity, Communications, was a start-up when it commenced trading
in February 2002 and an admission to AIM was obtained in order to provide
capital to grow the business, both organically and by acquisition. Your Board
intends to develop the company initially by organic growth and will seek
suitable acquisitions when we feel the time is right. We shall also act on
appropriate potential acquisitions on an opportunistic basis, provided we can
see a path to creating shareholder value. The founder and Chief Executive of
Glen is Graham J Duncan, who was the Executive Chairman and founder of the
Atlantic Telecom Group PLC business which, over an 18 year period, grew from a
start up to a significant listed company employing over 1,200 people in four
European countries.

The half year ended 31st March 2005 reflects an increase in the expenses of the
business resulting from the enhanced requirements of running an entity admitted
to AIM and an increase in payroll and other costs as we expand our sales and
support team. As a majority of new staff was not in place until March 2005, the
turnover has yet to benefit from the increased sales activity. Building a
business from a modest base takes time and the growth strategy adopted by the
Board is likely to result in losses until sufficient gross profit is generated
by the increased sales team. We intend, over time, materially to expand our
sales and sales support teams as we move south across the UK. We are now
operational in the North of England, as well as Scotland where we are based, and
we will commence the next phase of our sales roll-out once we are comfortable
that the existing teams are delivering what we expect from them. We are
encouraged by progress to date.

RESULTS

The results for the period are as anticipated and our cash flow is in line with
expectations.

Turnover for the half-year was £182,421 compared to £181,746 for the equivalent
period to 31st March 2004. Although the turnover over the two periods remained
flat, which was expected as we did not have the benefit of an increased sales
presence until very late in the period, the underlying product and services mix
is different as we have expanded our IT business and downscaled our pre-paid
phone card business which is no longer a core activity. This, coupled with
increasing margins in our mobile activities, has resulted in a significant
increase in our gross margin from 37.7% in the half year to 31st March 2004 to
48.0% in the period under review. In the first half, our mobile business was
achieved with just one sales person and much of our IT business derives from a
single individual account manager. The loss for the period was £225,053, which
compares against £68,227 for the equivalent half year period. We estimate that
the one-off and ongoing costs of the admission to AIM, the increased costs of
our Board as a public company and the costs of maintaining the listing, will
impact our cash flow by approximately £375,000 over the first year following
Admission, much of which has already been expended. At 31st March 2005, we had
net cash of £238,888.

The acquisition of Communications by Glen qualified for merger accounting and
the Board has adopted this prudent approach which aggregates the results of Glen
and Communications without creating any acquisition goodwill.

STRATEGY AND OUTLOOK

Our strategy continues to be to develop the breadth and range of IT and
communications services that we can deliver to small and medium sized businesses
and those working from home, using appropriate technologies, many of which are
focussed on Internet Protocol ('IP'). We believe that customers expect to be
able to buy converged products and services managed by a single organisation and
we are working to deliver innovation in our customer products and packaging to
allow us to achieve that capability. Providing a service that 'joins up' the
various technologies is our clear objective.

Glen sits at the customer end of the market and is therefore developing a sales
and sales support organisation, backed up by skills in targeting our marketing
efforts. Since Admission to AIM, we have started to build our sales and
marketing structures. Following the half year end, we have recruited an
experienced Head of Sales, based in Sheffield, and currently have a sales team
of seven. We have also doubled the size of our dedicated marketing team.

In general terms, we manage the customer relationship and use whatever networks
we believe are most suitable for the customer solution that we propose. Our
portfolio covers a wide variety of products and services from complex IT systems
to a single telephone line. Increasingly, we find customers want mobile
solutions and we have developed significant expertise in this area. We were
pleased to have been appointed a Business Partner to one of the major UK mobile
networks during the half-year to add to the relationships which we have with the
other mobile network providers.

We are also interested in developing our sales and marketing structure to
support specialist software products and related services. During the period, we
were appointed resellers for a customer relationship management software
product, which we have also successfully deployed internally; and sales agents
for a software product designed to trace, and measure accurately, ingredients in
food processing and manufacturing. This is a highly topical subject, as
legislation requires the food industry to maintain full 'traceability'. We have
also completed programming work for an intermediate mortgage lending company
with a broker network of over 8,000 independent financial advisors. We are
working with this company to develop a range of value added services that can be
packaged and offered to their network. Not the least of these services is Voice
over IP ('VoIP'), or broadband voice, which allows voice traffic to be carried
over a broadband connection. We intend, over time, to develop the capabilities
of our sales organisation in further specialised areas.

Broadband voice is one of a number of services that we are seeking to host,
using a third party data centre, and we now have a small number of live VoIP
customers whose voice services are hosted in this way. These customers have been
obtained ahead of a commercial service launch and following a successful
deployment of VoIP services in-house. Our view is that VoIP will be a radical
technology in the telecommunications world, and your Board has decided to place
greater emphasis in this area as many analysts believe that as much as 30% to
40% of traditional telecommunications traffic could migrate to VoIP over the
next few years. We believe that this makes the opportunity a significant one.
VoIP allows calls that stay on a broadband network to be delivered anywhere in
the world free of charge. We have concluded arrangements with an independent
telecommunications operator to carry, at competitive rates, conventional calls
that need to be terminated or originated on the public switched telephone
network. The pricing that we have secured allows us to offer, for example,
interconnected UK calls at just 1.2 pence per minute daytime plus VAT. We
believe that this makes us one of the most competitive providers in the UK
focused on the small and medium sized business markets and those that work from
home.

We have made a great deal of progress since December 2004 and we now intend to
expand our activity in the area of broadband voice where, as stated above, we
see early mover advantage. I am announcing today that we have raised a further
£300,000, before costs, by the issue of 10,000,000 ordinary shares of 1 penny
each issued at 3.00 pence per share.. These shares represent 16.67% of our
enlarged share capital. The shares have been placed with clients of Seymour
Pierce Ellis Limited, our brokers, and application has been made for the new
shares to be admitted to AIM with dealings expected to commence on 21st June
2005. The net proceeds will be utilised to market the business, continue to
build our sales and sales support organisation and develop our VoIP services,
among other things.

I joined the Board of Glen just prior to its AIM Admission, and I am impressed
with the progress that has been made over a very short period. The foundations
of the business have been laid, and your Board is optimistic that there is a
market for a single source supplier, a 'one-stop-shop' that can deliver a range
of business focused IT and communications services and, importantly, ensure that
they all work together as they should.


Eric M Hagman
CHAIRMAN
20th June 2005


                      CONSOLIDATED PROFIT AND LOSS ACCOUNT

for the six months ended 31st March 2005

                                    6 months to   6 months to     12 months to
                                     31st March    31st March   30th September
                                           2005          2004             2004
                                              £             £                £

TURNOVER                                182,421       181,746          373,848
Continuing operations
Cost of sales                           (94,939)     (113,167)        (243,870)
                                      ----------    ----------       ----------
Gross profit                             87,482        68,579          129,978
Other operating charges                (311,422)     (136,857)        (333,994)
                                      ----------    ----------       ----------
LOSS ON ORDINARY ACTIVITIES BEFORE
INTEREST                               (223,940)      (68,278)        (204,016)
Net interest                             (1,113)           51           (1,033)
                                      ----------    ----------       ----------
LOSS ON ORDINARY ACTIVITIES BEFORE
TAXATION                               (225,053)      (68,227)        (205,049)
Tax on loss on ordinary                       -             -                -
activities
                                      ----------    ----------       ----------
RETAINED LOSS FOR THE PERIOD           (225,053)      (68,227)        (205,049)
                                      ==========    ==========       ==========
Loss per share                            (0.45)p       (0.14)p          (0.41)p
                                      ==========    ==========       ==========



 There have been no recognised gains or losses attributable to the shareholders
    other than the loss for the current financial period and accordingly no
            statement of total recognised gains and losses is shown

                           CONSOLIDATED BALANCE SHEET

as at 31st March 2005

                                            31st March     30th September 2004
                                                  2005                       £
                                                     £
FIXED ASSETS
Intangible assets                               18,977                  18,977
Tangible assets                                 36,704                  11,529
                                             ----------              ----------
                                                55,681                  30,506
CURRENT ASSETS
Stocks                                           4,873                   8,236
Debtors: amounts falling due                    96,232                  62,860
within one year
Cash at bank                                   274,842                      26
                                             ----------              ----------

CREDITORS
Amounts falling due within one year           (214,393)               (143,788)
                                             ----------              ----------
NET CURRENT ASSETS / (LIABILITIES)             161,554                 (72,666)
                                             ----------              ----------
TOTAL ASSETS LESS CURRENT LIABILITIES          217,235                 (42,160)
CREDITORS
Amounts falling due after more than one
year                                           (65,000)               (101,730)
                                             ----------              ----------
                                               152,235                (143,890)
                                             ==========              ==========
CAPITAL AND RESERVES
Called up share capital                        500,000                       2
Share premium account                          771,180                       -
Merger reserve                                (101,914)                      -
Other reserves                                       -                 648,086
Profit and loss account                     (1,017,031)               (791,978)
                                             ----------              ----------
                                               152,235                (143,890)
                                             ==========              ==========

                        CONSOLIDATED CASH FLOW STATEMENT

for the six months ended 31st March 2005

                                               6 months     6 months   12 months to
                                                     to           to           30th
                                             31st March   31st March      September
                                                   2005         2004           2004
                                                      £            £              £
RECONCILIATION OF OPERATING LOSS TO
NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
Operating loss from continuing
activities                                     (223,940)     (68,278)      (204,016)
Depreciation                                      6,332        2,830          6,497
Decrease in stock                                 3,363        1,452            447
Increase in debtors                             (28,623)     (18,928)       (14,504)
Increase in creditors                            41,643        4,000         41,456
                                                ----------   ----------   ----------

Net cash outflow from continuing
operating activities                           (201,225)     (78,924)      (170,120)

RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE
Interest received                                 5,157           51            110
Interest paid                                    (6,270)           -         (1,143)
                                               ----------   ----------   ----------
Net cash (outflow)/ inflow from
returns on                                       (1,113)          51         (1,033)
investments and servicing of finance

CAPITAL EXPENDITURE AND
FINANCIAL INVESTMENT
Purchase of tangible fixed assets               (31,507)      (1,942)        (8,175)
Sale of tangible fixed assets                         -            -            698
                                                ----------   ----------   ----------
                                                (31,507)      (1,942)        (7,477)
Net cash outflow from capital
expenditure
and financial investment

FINANCING
Issue of shares                                 750,000            -         55,678
Receipt of bank finance                               -            -        100,000
Repayment of borrowing                          (10,000)           -         (5,000)
Receipt from/(repayment of)
shareholders loans                                7,270       76,531        (23,528)
Expenses paid in connection with
share issue                                    (228,820)           -              -
                                                ----------   ----------   ----------
Net cash inflow/(outflow) from
financing                                       518,450       76,531        127,150
                                               ----------   ----------   ----------
INCREASE / (DECREASE) IN CASH                   284,605       (4,284)       (51,480)
                                               ==========   ==========   ==========


                  NOTE TO THE CONSOLIDATED CASH FLOW STATEMENT

ANALYSIS OF NET FUNDS / (DEBT)

                      At 30th September         Cash Flows        At 31st March
                                   2004                  £                 2005
                                      £                                       £

Cash                                 26            274,816              274,842
Bank overdraft                  (45,743)             9,789              (35,954)
                              ----------         ----------           ----------
                                (45,717)           284,605              238,888
                              ----------         ----------           ----------
Debt                           (127,730)             2,730             (125,000)
                              ----------         ----------           ----------
Net (debt)/funds               (173,447)           287,335              113,888
                              ==========         ==========           ==========



                          NOTES TO THE INTERIM REPORT

1. Preparation of Interim Report

The interim financial information for the six months ended 31st March 2005 was
approved by the directors on 20th June 2005. The results shown in this statement
are pro-forma, incorporating the results of Glen Communications Limited
('Communications') for the period from 1st October to 14th November 2004 and the
consolidated results of Glen Group plc ('Glen') and its subsidiaries ('Group')
for the period from 15th November 2004 to 31st March 2005. The comparative
figures for the six months ended 31st March 2004 are the actual unaudited
results of Communications for that period and the comparatives for the 12 months
to 30th September 2004 are extracted from the audited financial statements of
Communications. The balance sheet as at 31st March 2005 is the consolidated
balance sheet of Group. The comparative consolidated balance sheet at 30th
September 2004 is pro-forma and is derived from the audited balance sheet of
Communications with the capital structure adjusted to that of Glen with
subscriber shares only at the date of incorporation.

The merger of Communications and Glen qualified for merger accounting which
aggregates the results of Glen and Communications without creating any
acquisition goodwill. As a result the negative balance on the profit and loss
account shown in the consolidated balance sheets at both 31st March 2005 and
30th September 2004 represents the aggregation of accumulated losses since both
companies were incorporated. In the case of Communications, £293,277 of the
combined balance arises from periods prior to the commencement of trading as a
communications company in February 2002.

The interim financial information has been prepared in accordance with relevant
accounting standards applied on a consistent basis using accounting policies set
out in the 2004 financial statements of Communications and the Placing and
Admission to AIM document dated 25th November 2004 in respect of Glen. In
addition to those policies the Group has applied a policy on goodwill as noted
below. The interim financial information is unaudited but has been reviewed by
the auditors and their report is set out on page 9.

2. Goodwill

Positive goodwill arising on acquisitions is capitalised, classified as an
Intangible Asset on the Balance Sheet and amortised on a straight line basis
over its useful economic life, which is estimated at 10 years. It is reviewed
for impairment at the end of its first full financial year following the
acquisition and in other periods if events or changes in circumstances indicate
that the carrying value may not be recoverable. If a subsidiary is subsequently
sold, any goodwill arising on acquisition that has not been amortised through
the Profit and Loss Account is taken into account in determining the profit or
loss on sale.

3. Financial information

The financial information set out on pages 4-8 does not constitute full
financial statements for the purposes of section 240 of the Companies Act 1985.
Comparative figures for the year ended 30th September 2004 are extracted from
the full financial statements of Communications, which have been delivered to
the Registrar of Companies. The report of the auditors on those financial
statements was unqualified and did not contain a statement under section 237 of
the Companies Act 1985.

4. Loss per share

The loss per share is based on the loss attributable to the Ordinary
Shareholders of £225,053 (30th September 2004 - loss of £205,049) and on the
pro-forma weighted average number of Ordinary Shares in issue during the period
of 50,000,000 (30th September 2004 - 50,000,000 on a proforma basis).

5. Dividend

In view of the deficit on reserves the directors cannot recommend a dividend and
the loss for the period has therefore been transferred to reserves.


Copies of this interim report are being sent to shareholders and can be obtained
from the company's head office at Unit 32/7, Hardengreen Industrial Estate,
Dalkeith, Midlothian. EH22 3NX


                      REVIEW REPORT BY THE AUDITORS TO THE
                           MEMBERS OF GLEN GROUP plc


Introduction

We have been instructed by the company to review the financial information for
the six months ended 31st March 2005 which comprise the principal accounting
policies, the profit and loss account, the balance sheet, the cash flow
statement and the related notes. We have read the other information contained in
the interim report which comprises only the Chairman's Statement and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information. Our responsibilities do not extend to any other
information.

This report is made solely to the company, in accordance with guidance contained
in APB Bulletin 1999/4 'Review of Interim Financial Information'. Our review
work has been undertaken so that we might state to the company those matters we
are required to state to it in a review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to
anyone other than the company, for our review work, for this report, or for the
conclusion we have formed.

Directors' Responsibilities

The interim report including the financial information contained therein is the
responsibility of, and has been approved by, the directors. The directors are
responsible for preparing the interim report and ensuring that the accounting
policies and presentation applied to the interim figures are consistent with
those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.

Review Work Performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4
'Review of Interim Financial Information' issued by the Auditing Practices Board
for use in the United Kingdom. A review consists primarily of making enquiries
of group management and applying analytical procedures to the financial
information and underlying financial data and based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets, liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with United
Kingdom auditing standards and therefore provides a lower level of assurance
than an audit. Accordingly, we do not express an audit opinion on the financial
information.

Review Conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31st March 2005.

GRANT THORNTON UK LLP
CHARTERED ACCOUNTANTS

Edinburgh
20th June 2005






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