Final Results

IBNet PLC 7 September 2001 IBNET REPORTS INCREASING DEMAND FOR INTERNET SURVEILLANCE IBNet plc, the UK based corporate intelligence Company, has today announced its preliminary results for the year to 30th June 2001. The Company, which was listed on AIM last year, provides UK and international clients with Internet surveillance, market and corporate intelligence and business analysis services. - Client companies rise to 27 (2000 : 2) - Revenue increased to £402,000 (2000 : 14,000) - Pre tax loss of £1.9m before investment write-off. - Marketing partnerships agreed with AON and Hemscott - Growth continuing into current year Mark Ommanney, Chief Executive commented, 'The turbulence and un-regulated growth of the Internet provides an excellent opportunity for IBNet. As our growing client list shows, companies are beginning to recognise the potential for corporate abuse or damage to their brands. Brand Piracy and negative discussion are just two examples on the sort of activity which concern our clients greatly'. 'Our objective is to use our financial strength to build both organically and, if the opportunity arises, by acquisition, a long term client base and income stream'. 'During the year we announced a number of important developments. In February we launched Sharedetec. This service monitors financial bulletin boards and financial websites. Clients include market makers and public companies who want to protect themselves from share ramping. In May Hemscott, the investor relations company, became a marketing partner for Sharedetec'. 'The opportunity for IBNet is, I believe, strong. Factors such as the un-regulated growth of the Internet and stock market turbulence, demonstrate to potential clients the importance of service and good intelligence. The company is well placed to benefit from this potential and I look forward to reporting further strong progress. We look to the future with confidence'. - ends - Date: 7 September 2001 For further information contact: IBNet PLC City Profile Group Mark Ommanney, Chief Executive Ed Senior 020-7629-7676 Simon Courtenay web: www.ibnetplc.com 020-7448-3244 e-mail: edward.senior@city-profile.com Chairman's Statement I am pleased to report a second year of continued growth for IBNet since our admission to the AIM market in March 2000. Our client base has grown from 2 to 27 companies and brands. Our revenues have grown significantly from £14,000 to £402,000. The increasing need for market intelligence, brand monitoring and protection is developing a strong demand both in the UK and Europe for our services. Our clients are recognising that their brands and intellectual property assets need to be protected on the Internet. Our clients are increasingly aware that there are significant 'bottom line' implications of brand abuse. IBNet offers products and solutions to our clients that monitor the Internet to counter these threats. Companies are now far more pro-active in taking action against threats to themselves, their brands and their image. This is particularly the case with the prevention of fraud, piracy and financial misrepresentation. Increasingly Internet abuse issues are not the concern of Legal, Marketing and Financial departments. This contrasts with the previous 12 months when responsibility lay with client's in-house technology departments. IBNet has established a leading position in the UK and Europe for our services. We believe our managed services, backed by our unique technology are well positioned to serve this developing marketplace. Financial Results The financial results for the year ended 30th June 2001 cover 12 months of trading during which Netdetec and Branddetec performed well, with 80% of our clients signing up for these services. Our Sharedetec service, launched this year, addresses the threats which the Internet poses to listed companies through the misuse of Internet bulletin boards and accounted for the remaining 20% of clients. We believe there is continuing potential for growth in all three products. In the period ended 30th June 2001, turnover was £402,000 (2000: £14,000) and the loss before tax £24.445 million (2000: £595,000). The loss before tax would have been £1,905,000 before the adjustments stated below, which would have been in line with our expectations. At the time of the AIM listing last year the company had to be restructured as a group with a new holding company, IBNet plc. As a result of hiving up the business of the subsidiary a carrying value of £21,976,000 was created together with a related inter company debtor of £564,000. In order to avoid uncertainties in the future arising out of the accounting conventions for investment impairment your board has decided to write off these amounts entirely. There is clearly no cash effect to this accounting adjustment. Business Review During the last 12 months we have established a presence for IBNet's services within the following sectors: * Brand * Entertainment and Media * Financial Services * Legal * Pharmaceuticals * Telecommunications * Logistics and Delivery Services Our clients are major blue chip UK and European companies within each of these sectors. We respect their need for confidentiality and therefore unfortunately we are unable to name the majority of our clients. We are pursuing a strategy of marketing our services to these sectors. I am happy to report that we have increased our sales team in the last quarter of the year. Our four new sales personnel were selected for their experience of both Internet surveillance and the sectors upon which we are focusing. Mike Atkinson, our sales director, has now elected to pursue other interests outside the company and has resigned as a director. We wish him well in the future. In March 2001 we added the role of Head of Marketing to take control of all the elements required to develop and implement our strategy. We are delighted to welcome David Bickers into this role. David has been with us as a consultant since September 1999 and has been key in implementing our marketing strategies. In addition we have broadened IBNet's sales distribution for Netdetec by entering into a relationship with 'Reach U', a division of insurance giant AON. The Reach U network of partners provide considerable breadth of services to protect brand, secure systems, data and intellectual property. Netdetec features as part of the Reach U offer and will be sold though AON's UK sales force directly into their extensive client base. The full effect of these initiatives should make their returns in 2002. This year we have exhibited once again at the Brand Licensing Show in New York. We launched an initiative at the show in association with LIMA - the official association for the Licensing industry of whom we are members - and leading IP legal firm Wragge & Co, to take action against the growth in links from children's cartoon characters and entertainment favourites to unsavoury sites. This initiative will be developed over the next six months. Product Developments The last 12 months have seen the continuing evolution of our product offering. We are evolving IBNet from being simply a 'monitoring' tool to a corporate intelligence service. IBNet is becoming an essential part of the intelligence and research resources of our clients. To support this evolution we have expanded our research and account handling departments during the year. More recently we have introduced a new business analyst department. This area conducts research into client specific areas, analyses the results found by our technology and delivers a set of recommendations to our client companies. We see this as a valuable service to clients who do not have the resources in house to analyse and exploit the data delivered to them. This in turn will help us to develop our business in new market areas. This year has seen the successful launch of our Sharedetec service, which addresses the threats the Internet pose to listed companies through the misuse of Internet bulletin boards. We announced a sales association with Hemscott in May of this year for Sharedetec and we see sales from this relationship growing positively over the next 12 months. Our technical development is also progressing well. A key element of the construction of our technology is that it gives us the flexibility to respond rapidly to client requirements. During the course of the year we have responded to a number of client specific needs, which has in turn provided our customers with many additional features. Over the last 12 months we further developed our technology and continue to develop and improve it to our own exacting standards. Netdetec version 2, with additional functionality giving clients added value will be launched prior to the end of 2001. We have promoted Mike Patton to Chief Technical Officer. This has allowed our Technical Director Rob Nayler to focus on developing future new product concepts and territorial market opportunities. Mike has a team of ten people tasked to ensure our service is meeting client expectations. We have now completed our 'back up' support transfer to a location at Heathrow guaranteeing our clients additional security. Additionally, it is our intention during the next 12 months to further develop our Newsdetec media monitoring proposition. This is a bespoke service that visits Internet communities and other specific sites on a regular basis to alert companies to changing comments and interest in their brands and services. We see this service developing into a unique marketing intelligence tool and are currently in discussion with a number of UK based potential partners for this product. Future Prospects The last 12 months has seen us grow in strength and depth - launching Sharedetec, adding new sales, technical, research, and analyst personnel and creating new senior management positions. Our infrastructure is in place to accommodate the continuing growth of our business. We are also considering options to expand our business by possible acquisition in related areas. This would enable us to position ourselves as a broadly based company serving the field of corporate intelligence and information management. We are continuing to develop IBNet's business in line with our expectations. Our service is evolving from being simply a 'monitoring' tool to a corporate intelligence service. We believe that there is a great deal of potential for our Internet monitoring products, and that we are excellently placed to exploit this market. We look forward to meeting the market demand with our improved service offer, new products and new partnerships and to further expand our position as dominant provider in the UK and Europe. I would like to thank my Board and all my colleagues at IBNet for their substantial contributions to our development and growth. We look forwards to a further year of growth for IBNet and I look forward to reporting further strong progress. David Heynes Chairman Profit and Loss for the year ended 30 June 2001 Note 24 Weeks 2001 2000 £'000 £'000 £'000 £'000 Turnover 1 402 14 Cost of sales (48) - ________ ________ Gross profit 354 14 Administrative Expense Fixed assets investment impairment (21,976) - Other administrative Expenses (3,008) 694 _______ ______ Total administrative Expenses (24,984) (694) ________ ________ Operating loss (24,630) (680) Net interest 185 85 ________ ________ Loss on ordinary activities before Taxation 1 (24,445) (595) Tax on loss on ordinary activities 2 - - ________ ________ Loss on ordinary activities after taxation (24,445) (595) deducted from reserves ====== ====== Basic and fully diluted loss per share 3 44.48p 1.50p ====== ====== There are no other recognised gains or losses other than the loss for the period. All operations are continuing. Balance Sheet as at 30 June 2001 Note 2001 2000 £'000 £'000 Fixed assets Investment 4 - 21,976 Tangible fixed assets 449 266 ________ ________ 449 22,242 Current assets Debtors: amounts recoverable in one year 253 228 Debtors: amounts recoverable in more than one year - 564 Cash at bank and in hand 2,041 4,044 ________ ________ 2,294 4,836 Creditors: amounts falling due within one year (426) (316) ________ ________ Net current assets 1,868 4,520 ________ ________ Total net assets less current liabilities 2,317 26,762 ________ ________ Capital and reserves Called up share capital 13,738 13,738 Share premium account 13,619 13,619 ________ ________ Profit and loss account (25,040) (595) ________ ________ Equity shareholders' funds 2,317 26,762 ________ ________ Cash Flow Statement for the year ended 30 June 2001 2001 2000 Note £'000 £'000 £'000 £'000 Net cash outflow from operating activities 5 (1,890) (662) Returns on investments and servicing of finance Interest received 185 86 Interest paid - (1) ________ ________ Net cash inflow from returns on 185 85 investments and servicing of finance Capital expenditure and financial investment Purchase of tangible fixed assets 298 169 ________ ________ Net cash outflow from capital expenditure and (298) (169) financial investment Acquisitions and disposals - 3 Net cash acquired with subsidiary ________ ________ Net cash inflow from acquisitions and - 3 disposals ________ ________ Net cash outflow before financing (2,003) (743) Management of liquid resources Cash placed on fixed term deposit account 2,300 (4,000) Financing Issue of shares - 6,050 Repayment of loan capital - (594) Expenses paid in connection with share issues - (669) ________ ________ Net cash inflow from financing - 4,787 ________ ________ Increase in cash 6 297 44 ________ ________ Notes to the Financial Statements for the year ended 30 June 2001 1 TURNOVER AND LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION The turnover is attributable to the principal activity which is carried on in the United Kingdom. The loss on ordinary activities before taxation is stated after charging: 24 weeks 2001 2000 £'000 £'000 Auditors, remuneration Audit services 16 17 Non-audit services 5 3 Depreciation and amortisation Tangible fixed assets 115 19 Operating lease rentals -land and buildings 37 9 Fixed assets investment -impairment loss 21,976 - Amount provided against amounts receivable From subsidiary undertaking 564 - ________ ________ 2 TAX ON LOSS ON ORDINARY ACTIVITIES There are tax losses of approximately £2,765,000 (2000: £649,000) to carry forward and use against future profits of the same trade. 3 LOSS PER SHARE The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. Reconciliations of the loss and weighted average number of shares used in the calculations are set out below: Computation of loss per share: Loss Weighted Amount Loss Weighted Amount average number pence per average number pence per of shares share of shares share 2001 2001 2001 2000 2000 2000 £'000 £'000 Basic and diluted Loss per share Loss attributable 24,445 54,952,000 44.48 595 38,530,543 1.50 to Ordinary Shareholders There was no dilutive effect of the options in place at 30 June 2001 and 30 June 2000, in view of the loss for the year. 4 FIXED ASSET INVESTMENT Subsidiary undertakings: 2001 £'000 Cost At 1 July 2000 21,976 Impairment losses (21,976) ________ Net book amount at 30 June 2001 - ________ Net book amount at 30 June 2000 21,976 ________ At 30 June 2001 the undertaking in which the company held 20%or more of the share capital of: Name of subsidiary Country of Class of share Proportion Nature of undertaking incorporation capital held held business IBNet (UK)Limited England &Wales Ordinary shares 100% Dormant At 30 June 2001 the aggregate capital and reserves of IBNet (UK) Limited amount to a deficit of £564,000 (2000: £564,000) and the loss for the year to 30 June 2001 was £nil (2000:£565,000). IBNet (UK) Limited was dormant throughout the year ended 30 June 2001. 5 NET CASH OUTFLOW FROM OPERATING ACTIVITIES 2001 2000 £'000 £'000 Operating loss (24,630) (680) Depreciation 115 19 Fixed asset impairment 21,976 - Decrease/(increase)in debtors 539 (187) Increase in creditors 110 186 ________ ________ Net cash outflow from operating activities (1,890) (662) ________ ________ 6 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2001 2000 £'000 £'000 Increase in cash in the period 297 44 Cash to repurchase debentures - 594 Cash (inflow)/outflow from (decrease)/increase in liquid (2,300) 4,000 resources ________ ________ Change in net debt resulting from cashflows (2,003) 4,638 Debentures acquired with subsidiary - (594) Net funds at 1 July 2000 4,044 - ________ ________ Net funds at 30 June 2001 2,041 4,044 ________ ________ 7 NATURE OF THE FINANCIAL INFORMATION The foregoing financial information does not amount to full accounts within the meaning of Section 240 of the Companies Act 1985. The financial information has been extracted from the Company's Annual Report & Accounts for the year ended 30 June 2001 on which the auditors have given an unqualified report. Copies of the annual report and accounts will be posted to shareholders shortly and will be available from the Company's registered office at 11 High Street, Egham, Surrey, TW20 9EA.

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