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Ultima Networks PLC (UTN)

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Monday 03 December, 2001

Ultima Networks PLC

Interim Results

Ultima Networks PLC
30 November 2001

Ultima Networks PLC
Interim Report
30 June 2001

Chairman's Statement 

Results for the half year

The half year has seen significant restructuring and change within the Group's 
core businesses. This began in February 2001 with changes in management and 
significant cost reduction measures being put into place. The implementation of 
the restructuring programme has continued beyond the half year and culminated 
with Ultima Networks PLC and certain of its subsidiary companies entering into 
Company Voluntary Arrangements in November 2001. Further details of the 
restructuring programme may be found in my Statement in the Annual Report for 
the year ended 31 December 2000.

In the six months ended 30 June 2001 the Group recorded a loss before taxation 
of £599,000 (2000: loss before tax £496,000) on a turnover of £2.77 million 
(2000: £3.89 million). The loss per share of 0.31p compares to a loss per share 
of 0.26p for the first half of 2000. Group borrowings at 30 June 2001 were £3.69
million compared to £3.63 million at 30 June 2000.

Networking Division

The sales of the Networking Division were £2.36 million compared to £3.33 
million in 2000. This resulted in an operating loss of £227,000 compared to an 
operating loss of £265,000 in 2000.

Our UK networking companies recorded sales of £1.73 million (2000: £2.45 
million) resulting in an operating loss of £66,000 (2000: operating loss 
£136,000). The benefits accruing from restructuring are not fully reflected in 
these figures due to their phasing and the costs of restructuring.

Sales at SilCom, our Canadian networking products business, were £0.63 million 
(2000: £0.88 million) resulting in an operating loss of £161,000 (2000: 
operating loss £129,000). A significant proportion of SilCom's turnover in the 
period came from end of life sales of its token ring products. Following the 
Board's decision that SilCom's CATV business was no longer core to the Group the
Board entered into negotiations to sell the business to a third party during the
period but this was ultimately unsuccessful. SilCom is now concentrating on the 
development of its wireless technology which has a better fit with the product 
base of the Group's UK businesses.

Software Division

The sales of the Software Division were £0.41 million compared to £0.56 million 
in 2000. This resulted in an operating loss of £49,000 compared to an operating 
loss of £39,000 in 2000, reflecting redundancy costs in the period. The Division
continues to operate in its specialist legal and publishing markets and has 
continued to develop its product range.

Outlook

The six months to 30 June 2001 saw the instigation of significant changes across
the Group. Whilst the results for the period reflect cost savings made these 
were in part offset by the costs of restructuring. The Group has now downsized 
significantly and is concentrating on the development of a profitable core 
business. As part of the restructuring the Group's legacy costs and liabilities 
have been addressed, primarily through the company voluntary arrangement 
procedure. In addition to focusing on the Group's core business the successful 
completion of these arrangements will be key to the future of the Group.

Humayun A Mughal, Chairman                                      27 November 2001
 
Consolidated profit and loss account
for the six months ended 30 June 2001

                                     (Unaudited)      (Unaudited)     (Audited)
                                   First half 2001   First half 2000  Full year
                                                                           2000
                               Note        £000            £000          £000
                                                            
Turnover - continuing 
  operations                    1         2,768           3,889         6,952
Cost of sales                            (1,424)         (2,055)       (4,416)
                                                            
Gross profit                              1,344           1,834         2,536

Net operating expenses                   (1,803)         (2,203)       (3,857)
Exceptional operating costs                   -               -          (674)
Exceptional credit on provision 
for onerous leases                            -               -         1,614

Operating loss - 
continuing operations           1          (459)           (369)         (381)
Net interest payable                       (140)           (127)         (402)

Loss on ordinary activities
before taxation                            (599)           (496)         (783)
Tax on loss on ordinary activities            -               -             -

Unrecovered loss for the 
financial period                           (599)           (496)         (783)

Loss per share and diluted loss
per share                                 (0.31)p         (0.26)p       (0.41)p


Consolidated balance sheet           (Unaudited)      (Unaudited)     (Audited)
                                   30 June 2001     30 June 2000    31 Dec 2000
                                           £000            £000          £000

Fixed assets                                              

Tangible fixed assets                     2,042           2,695         2,277

                                          2,042           2,695         2,277

Current assets 
                                                           
Stock                                        43             350           215
Debtors                                   1,114           1,601           998
Cash at bank and in hand                    752             272           554

                                          1,909           2,223         1,767

Creditors-amounts due 
within one year                          (6,788)         (5,473)       (6,253)

Net current liabilities                  (4,879)         (3,250)       (4,486)

                                                        
Total assets less current 
liabilities                              (2,837)           (555)       (2,209)

Creditors - amounts due after
one year                                 (1,101)         (1,175)       (1,101)

Provisions for liabilities and 
charges                                    (649)         (1,941)         (679)

Net liabilities                           (4,587)        (3,671)       (3,989)

Capital and reserves

Called up equity share capital             7,434          7,434        7,434

Share premium account                      5,520          5,520        5,520

Acquisition reserve                        1,334          1,334        1,334

Profit and loss account                  (18,875)       (17,959)     (18,277)
                                                         
Deficit on shareholders'
 funds - equity                           (4,587)        (3,671)      (3,989)

                                                     
Consolidated cash flow statement                          
                                     (Unaudited)      (Unaudited)    (Audited)
                                 First half 2001 First half 2000  Full year 2000
                                            £000            £000          £000  
                           
Cash inflow/(outflow) from 
operating activities                         144            (85)         (90)

Returns on Investment and
servicing of finance                        (140)          (127)        (295)

Taxation                                       1              -            5

Capital expenditure and 
financial investment                         138           (100)        (136)

Acquisitions and disposals                     -              -            -

Cash Inflow/(outflow) before 
financing                                    143           (312)        (516)

Financing

Reduction in debt                            (84)           (45)         (57)

Net cash outflow from financing              (84)           (45)         (57)

Increase/(decrease) in cash in 
the period                                    59           (357)        (573)


Notes

1. Segmental analysis

                                      (Unaudited)    (Unaudited)   (Audited)
                                 First half 2001 First half 2000 Full year 2000
                                            £000          £000           £000

  Turnover                                                   

  Networking division - 
  continuing operations                    2,361          3,333        5,870

  Software division - 
  continuing Operations                      407            556        1,082

  Total                                    2,768          3,889        6,952

  Operating loss
  Networking division - 
  continuing operations                     (227)          (265)      (1,287)

  Software division - 
  continuing operations                      (49)           (39)        (196)
                                                             
  Group overheads                           (183)           (65)       1,102

  Total                                     (459)          (369)        (381)

2.Other information

  These interim results are prepared, on the basis of accounting policies
  which are consistent with those set out in the Annual Report for the year     
  ended 31 December 2000.

  The profit and loss accounts for the half years ended 30 June and the
  balance sheets as at 30 June are unaudited.

  The comparative figures for the year ended 31 December 2000 are not the       
  Group's statutory accounts for the financial year. Those accounts
  have been reported on by the Company's auditors and delivered to the
  Registrar of Companies. The report of the auditors was unqualified and
  did not contain a statement under section 237(2) or (3) of the Companies Act  
  1985.

Registered number 1435584

Registered office:

Akhter House,
Perry Road,
Harlow,
Essex
CM18 7PN