Information  X 
Enter a valid email address

365 Corp PLC (ECK)

  Print          Annual reports

Tuesday 21 December, 1999

365 Corp PLC

2nd Quarter & Interim Results

365 Corporation PLC
21 December 1999

                                       
                              365 Corporation plc
                                       
                   Strong Second Quarter and Interim Results
                  +  unique users up 94%
                  +  internet revenues up 103%
                  +  business revenues up 33%

365  Corporation  plc  ('365' or the 'Company'), the provider  of  destination
content, community and communication services, today announces results for the
second  quarter and the six months ended 30 September 1999 - the first set  of
results since admission to the Official List of the London Stock Exchange on 2
December 1999.  Highlights of the results include:

Second quarter ended 30 September 1999

+ total unique users(1) increased to 779,591 for September, a 94% increase on
  June (401,146 users);
+ turnover of £4,926,000, a 7% increase over the previous quarter
  (£4,609,000);

+ internet revenue increased 103% to £293,000 compared to the previous quarter
  (£144,000);
+ audiotext  minutes(3)  increased  6% to 18.4m  minutes,  compared  to  17.3m
   minutes in the previous quarter;
+ total  business customers(4) as at 30 September 1999 increased 35% to 2,170,
   business  service  revenue  increased by 33%  to  £1,593,000  and  business
   minutes(5) increased by 38% on the previous quarter;

+ the French acquisitions in July of C-Sports Communication SA and Electron
  Libre SARL;

+ the creation and launch of new content and services, including Rugby365 and
  Win365.

Six months ended 30 September 1999

+ turnover increased to £9,535,000 compared to £84,000 in the six months to 30
  September 1998;
+ operating  losses  (before  amortisation  of  goodwill  and  provisions  for
   National Insurance contributions on share options) of
   £233,000 compared to £800,000 for the six months ended 30 September 1998.

Current trading

+ successful debut on the London Stock Exchange;
+ 944,267 unique users for November 1999;
+ brand building and content marketing campaign launched in October;
+ production of the 1999 ITV Rugby World Cup site;
+   created  and  launched  the  online  entertainment  e-zine  for   Guinness
(www.getG.com);
+ continued growth in users, customers and revenues.

Dan Thompson, Chief Executive Officer, commented today:

'I  am  delighted  to present a strong set of results for our  second  quarter
which  demonstrates  our  position as a market  leader  in  the  creation  and
ownership of quality destination content and services.  During this period, we
have  significantly increased our user base, increased revenues in  line  with
our  expectations  and  expanded our range of products  and  services  through
acquisition and internal growth.

The  successful  flotation of 365 on the London Stock  Exchange  earlier  this
month  was  an important milestone for the Company, and provides us with  both
cash  and  a powerful acquisition currency to pursue our expansion  plans  and
maintain our first-mover advantages.'

Notes:
1,3,4,5.  See note 2 to interim financial statements.

For further enquiries, please contact

365 Corporation plc                     Tel: 0171 831 3113    today
Dan Thompson, Chief Executive Officer   Tel: 0171 505 7800    thereafter
Martin Turner, Finance Director         
www.365corp.com                         
                                        
Financial Dynamics                      Tel: 0171 831 3113
Giles Sanderson                         
Edward Bridges                          


Financial and Operating Data Highlights

                            Quarter      6 months       Quarter      6 months
                              ended         ended         ended         ended
                       30 September  30 September  30 September  30 September
                               1999          1999          1998          1998
                              £'000         £'000         £'000         £'000
                                                                
Turnover                      4,926         9,535            36            84
                                                                
Operating expenses          
before amortisation
of goodwill and
provision for NIC on
share options                (5,436)        (9,768)         (418)       (884)
                                                                
Operating loss before         
amortisation of
goodwill and
provision for NIC on
share options                  (510)          (233)          (382)      (800)
                                                                
Operating loss               (1,387)        (1,617)          (382)      (800)



Operating data for 1999

                        March       April         May         June       July
Consumer Division -                                                          
unique users(1)       326,954     352,612     385,935      401,146    526,892
Business Division -                                                          
customers(4)            1,280       1,410       1,492        1,613      1,740


                          Aug        Sept        Oct          Nov
Consumer Division -                                              
unique users(1)       658,996     779,591    934,270      944,267
Business Division -                                              
customers(4)            1,838       2,170      2,366        2,475

Notes:

1,4  See note 2 to interim financial statements.

Chief Executive Officer's Review

On  2  December  1999, we successfully completed our flotation on  the  London
Stock Exchange.  This is the culmination of a period of rapid development  and
expansion for 365, and our emergence as a market leader in the area of digital
content  creation  and ownership.  The results for the  six  months  ended  30
September  1999 represent the results of our final period prior to becoming  a
quoted company.

Since  the  acquisition of Symphony Telecommunications plc on 2 February  1999
and  its  integration into the 365 group, we have accelerated our content  and
convergence strategy.  This is evidenced by a significant increase  in  users,
customers and revenues from our established services, together with  a  number
of  new  content  and  service launches during  this  period.   We  have  also
continued  to  ensure that the quality of our content is not only  maintained,
but  also  improved,  and  we have made significant additional  investment  in
related personnel, technology and infrastructure.

Total  unique users increased to 779,591 in September 1999, a 94% increase  on
the  June total of 401,146 users, and a 138% increase on the March 1999  total
of 326,954 users.

Internet Services

In July, we completed the acquisition of C-Sports Communication SA ('CSports')
and  Electron Libre SARL ('Electron Libre').  CSports owns and operates  Cfoot
(www.cfoot.com),  France's  leading  football  web  site  and  Electron  Libre
supplies web development and hosting services to a number of French companies,
including CSports.  365 issued 700,000 shares (pre the 4-for-1 share split  in
November  1999) as consideration for the acquisition of CSports  and  Electron
Libre.

In  August,  we  launched Rugby365 (www.rugby365.com), which is  available  in
English,  Afrikaans, French and Spanish.  The Rugby365 operation is  based  in
Cape  Town, South Africa.  Shortly after establishing Rugby365, we  agreed  to
develop,  maintain and host ITV's 1999 Rugby World Cup web site.  Total  rugby
users  reached a peak of 128,811 during the World Cup in October  1999,  which
contributed  to  a particularly strong increase in users for that  month.  The
equivalent number of users for November was 66,107.

In   September,   we  launched  Win365  (www.win365.co.uk),  a  multi-platform
competition product

Internet  revenue  increased  to £293,000, a 103%  increase  on  the  previous
quarter  (£144,000) and over eight times the revenue in the  same  quarter  in
1998 (£36,000).

Audiotext Services

We have continued to develop and expand our range of companionship services in
the  UK, and introduced a number of complementary and related brands.  We  are
also  looking  to expand our UK telephony infrastructure in order  to  service
greater  volumes of audiotext traffic, which will enable us to provide  bureau
services to third parties.  However, despite strong UK growth, second  quarter
audiotext  revenue fell by 7% overall due to the decline in several short-term
international audiotext contracts.

In   August,   we  launched  TalkFootball365,  an  audiotext  and   web   site
(www.talkfootball.com)  service which, amongst  other  things,  leverages  the
content created by Football365.  This allows callers the opportunity to listen
to football content and interact with each other.

In  conjunction with Win365, we have also used our telephone infrastructure to
generate revenue from users of some of our web-based competitions.

Business Services

Business  service turnover increased to £1,593,000, compared to £1,199,000  in
the  previous quarter, an increase of 33%.  As at 30 September 1999,  365  had
2,170 business customers, an increase of 35% on 30 June 1999 (1,613 customers)
and 70% on 31 March 1999 (1,280 customers).

We  have  continued to expand and develop our successful Joint Venture program
and  have concluded deals to form four new Joint Ventures - Essential  Network
Solutions  Limited,  Network  Business Call  Limited,  Telenet  Communications
Limited and Unitel Network Services Limited.

In  September,  we introduced and launched two new product ranges  -  business
mobile  phone  services  and  internet access via  our  [email protected]  product,  an
integrated internet access and e-mail service.  These products are part of our
core strategy to provide a 'one-stop-shop', or single point of contact for all
of  our  customers' telecommunications and internet requirements.  We  believe
that expanding our range of business services, with particular emphasis on the
internet,  will maximise revenues from our customer base, and further  enhance
customer loyalty.

Recent and Forthcoming Developments

The  combination of the launch of new products and services with  a  marketing
campaign  which  was initiated in October, has seen a strong growth  in  total
unique  users to 944,267 in November which reinforces our belief that  quality
content and services will continue to attract and retain regular users.

Our  commitment  to  producing  quality  content  has  also  resulted  in  new
commercial  opportunities  during the period.  We  created  and  hosted  ITV's
official  rugby web site during the October 1999 Rugby World Cup. We are  also
the  producers of all the content in 'G', a new internet e-zine, on behalf  of
Guinness  (www.getG.com). Most recently we created and launched  the  official
BRIT  Awards  web  site (www.brits .co.uk) in preparation for  the  2000  BRIT
Awards.

Our recent listing on the London Stock Exchange provides us with the strategic
acquisition currency that we sought and we are actively searching for suitable
acquisition targets that will enable us to accelerate our growth strategy  and
capitalise on our first-mover advantages.

Current Trading

Growth  in users and customers has accelerated into the third quarter and  the
marketing  campaign initiated in October has successfully contributed  to  the
growth in users.

In October, we launched two new internet lifestyle products - our first online
companionship  product, Personals365 (www.personals365.com) and  'The  Switch'
(www.theswitch.co.uk), a cross-platform convergence product (telephone and web
site)  offering  companionship services on a regional or national  basis.   In
November  L!VETV closed and the audiotext business lost one of its sources  of
advertising  space,  but  is  in  the process of  securing  alternative  media
outlets.

Business services is maintaining its impressive rates of growth and the launch
of  mobile  and  internet  access services have been  well  received  by  both
existing  and  new  customers.   We also continue  to  seek  acquisitions  and
distribution partners.

We are confident about the future trading prospects of 365.


Financial Review

The  Company's first accounting period ran from incorporation on 12  September
1997   to   31   July   1998.    Following   the   acquisition   of   Symphony
Telecommunications plc on 2 February 1999, the Company adopted 31 March as its
financial  year end, and its second financial period covered the eight  months
from  1 August 1998 to 31 March 1999.  The results of 365 set out below  fully
consolidate the results of operations of Symphony Telecommunications plc  from
the date of its acquisition.

Results of Operations

Turnover  for  the  second  quarter ended 30 September  1999  was  £4,926,000,
representing a 7% increase from £4,609,000 in the first quarter ended 30  June
1999.

365  currently  derives  Internet turnover from advertising,  sponsorship,  e-
commerce  and  contract  publishing.  These  revenues  increased  by  103%  to
£293,000  during the second quarter (first quarter - £144,000),  reflecting  a
significant  increase  in  advertising  and  sponsorship  during  the  period.
Internet turnover for the comparable period in 1998 was £36,000.

Audiotext turnover fell during the quarter by 7% to £3,040,000 (first  quarter
-  £3,266,000) due to the expected decline in several short-term international
audiotext  contracts.  These contracts accounted for turnover of  £432,000  in
the  first quarter and £15,000 in the second quarter, and are not expected  to
generate  significant  turnover in subsequent  financial  periods.   Excluding
these  contracts, audiotext turnover grew by 7% during the quarter.  Audiotext
was not provided by 365 in 1998.

Business   services  turnover  increased  to  £1,593,000  (first   quarter   -
£1,199,000)  in  the second quarter, an increase of 33%.  As at  30  September
1999,  365 had 2,170 business customers, and the increase in revenues  was  in
line  with  a  35% increase in customers during the second quarter.   Business
services were not provided by 365 in 1998.

Cost  of  sales  increased by 1% in the second quarter  to  £2,591,000  (first
quarter - £2,572,000) and gross margin increased to 47% from 44% in the  first
quarter.    This  reflects  the  significant  decline  of  365's  low   margin
international audiotext contracts.

Administrative  expenses  (before the amortisation of  goodwill  and  National
Insurance  provisions in relation to staff share options) rose  to  £2,845,000
during  the  second quarter (first quarter - £1,760,000) as 365 increased  its
investment  in  new  content  and services, its internet  publishing  systems,
infrastructure  and  technology,  professional  services  and  personnel.   In
particular,  second  quarter administrative costs include  those  incurred  in
connection  with the construction of its My365 and Business365  content  hubs,
the  opening of the South African office, expansion of the Chilean  office  in
Santiago  to  produce a Spanish-language internet football service (Futbol365)
and costs incurred in relation to the operations of CSports in France.

Goodwill amortisation increased to £622,000 during the second quarter compared
to  £507,000 in the first quarter.  This increase reflects the amortisation of
goodwill  in relation to the acquisition of CSports and Electron Libre,  which
is being written off over 18 months.

Liquidity and Capital Resources

Since  inception in September 1997, 365 has financed its operations  primarily
through  the  private placement of ordinary shares and during the  six  months
ended  30  September 1999 the Company raised £2,603,000 (net of  expenses)  by
these means.

During  the  three  months  ended 30 September 1999,  net  cash  outflow  from
operating  activities  totalled  £272,000,  compared  with  £641,000  for  the
previous quarter.  At 30 September 1999, the Company had £6,729,000 of cash at
bank and in hand, compared to £5,316,000 at 31 March 1999.

On  2  December  1999,  365 was admitted to the London  Stock  Exchange.   The
initial  public  offering  raised  net proceeds of approximately  £50  million
subject  to  finalisation of flotation expenses.  In  addition  the  Company's
Sponsor,  Cazenove & Co, exercised its over-allotment option  to  purchase  an
additional 5,184,375 shares on 15 December 1999 to raise a further  £7.9m  for
the Company, net of expenses.

365 is using the net proceeds from the offer for the following purposes:

+   Content:  investing to maintain and improve existing products and services
and develop new products and services covering
additional passion centres;

+   Convergence:   developing 365's content and services to  ensure  they  are
compatible with, and provided across, relevant digital platforms;

+   International  expansion:  development  and  expansion  of  the  Company's
international structure and operations;

+  Marketing and brand development: investing in the promotion of 365's brands
and products;

+    Acquisition   and   strategic   partnerships:   undertaking   appropriate
acquisitions,  investments  and  strategic  partnerships  to  complement   the
Company's strategy;

+  Infrastructure:  investing in 365's infrastructure to support the Company's
strategy;

+   General  corporate  purposes:  increasing the  working  capital  generally
available to the Group.



Consolidated profit and loss account
for the quarter and 6 months ended 30 September 1999

                                    Quarter   6 months    Quarter   6 months
                                   ended 30   ended 30   ended 30   ended 30
                                  September  September  September  September
                                       1999       1999       1998       1998
                                  unaudited  unaudited  unaudited  unaudited
                           Note       £'000      £'000      £'000      £'000
                                                                            
Turnover                     3       4,926      9,535      36        84
Cost of sales                       (2,591)    (5,163)    (1)       (3)
Gross profit                         2,335      4,372      35        81
Administrative expenses                                           
before amortisation of                                            
goodwill and provision for                                        
NIC on share options                 2,845      4,605      417       881
Amortisation of goodwill             622        1,129      -         -
Provision for NIC on share                                        
options                              255        255        -         -
Total administrative                                              
expenses                             3,722      5,989      417       881
                                                                  
Operating loss before                                             
goodwill amortisation and                                         
provision for NIC on share                                        
options                      3       (510)        (233)    (382)     (800)
Operating loss                       (1,387)    (1,617)    (382)     (800)
Net interest                             69        132       10        20
Loss on ordinary                                                    
activities before taxation                                        
                                     (1,318)    (1,485)    (372)     (780)
Taxation                                  -          -       (2)       (4)
Loss on ordinary                                                  
activities after taxation            (1,318)    (1,485)    (374)     (784)
Minority interests                       36         59         -         -
Retained loss for the                (1,282)    (1,426)    (374)     (784)
period
                                                                            

Loss per ordinary share      4                                              
Basic loss per share                                                        
before amortisation of                                                      
goodwill and provision for                                                  
NIC on share options                    0.3p      0.0p       0.8p       1.7p
Diluted loss per share                                                      
before amortisation of                                                      
goodwill and provision for                                                  
NIC on share options                    0.3p      0.0p       0.7p       1.6p
Basic loss per share                    0.9p      1.0p       0.8p       1.7p
Diluted loss per share                  0.9p      1.0p       0.7p       1.6p
                                                                            


Statement of total recognised gains and losses
for the quarter and 6 months ended 30 September 1999

                               Quarter     6 months      Quarter   6 months
                              ended 30     ended 30     ended 30   ended 30
                             September    September    September  September
                                  1999         1999         1998       1998
                             unaudited    unaudited    unaudited  unaudited
                                 £'000        £'000        £'000      £'000
                                                                           
Retained loss for the                                            
period                        (1,282)        (1,426)     (374)        (784)
Exchange adjustments               8              4         -            - 
Total recognised losses                                          
for the period                (1,274)        (1,422)     (374)        (784)

Consolidated balance sheet
As at 30 September 1999

                                   30 September   30 September     31 March
                                           1999           1998         1999
                                      unaudited      unaudited      audited
                             Note         £'000          £'000        £'000
                                                                           
Fixed assets                                                               
Intangible fixed assets               9,611        -              9,798
Tangible fixed assets                 957          87             728
                                      10,568       87             10,526
                                                               
Current assets                                                 
Stock - goods for resale              33           -              16
Debtors                               3,421        105            2,482
Cash at bank and in hand              6,729        485            5,316
                                     10,183        590            7,814
                                                               
Creditors: amounts falling                                     
due within one year                  (3,955)      (120)          (3,750)
Net current assets                    6,228        470            4,064
                                                               
Total assets less current                                      
liabilities                          16,796       557            14,590
                                                               
Creditors: amounts falling                                     
due after more than one                                        
year                                    (15)        -              (25)
Provision for liabilities     9        
and charges                            (255)        -                 -     
Net assets                           16,526       557            14,565
                                                                  
Capital and reserves          5                                
Called up share capital                 355        123             319
Share premium account                14,091      1,729          11,517
Other reserves                        5,770          -           4,937
Profit and loss account              (3,566)     (1,295)        (2,144)
Total equity shareholders'                                     
funds                         6      16,650       557            14,629
                                                               
Minority interests                     (124)        -              (64)
                                                               
Capital employed                     16,526       557            14,565


Consolidated cash flow statement
for the quarter and 6 months ended 30 September 1999


                                   Quarter   6 months    Quarter   6 months
                                  ended 30   ended 30   ended 30   ended 30
                                 September  September  September  September
                                      1999       1999       1998       1998
                                 unaudited  unaudited  unaudited  unaudited
                           Note      £'000      £'000      £'000      £'000
                                                                           
Net   cash  outflow  from   7                                    
operating activities             (272)      (912)     (387)      (864)
                                                                 
Returns on investment and                                        
servicing of finance
Net interest                     69         132       10         20
                                                                 
Capital  expenditure   and                                       
financial investment
Purchase    of    tangible                                       
fixed assets                     (339)      (405)     (21)       (38)
                                                                 
Acquisitions                                                     
Net   cash  acquired  with                                       
subsidiaries                     12         12        -          -
Purchase of subsidiaries     8   (17)       (17)      -          -
                                 (5)        (5)       -          -
Cash outflow before                                       
financing                        (547)      (1,190)   (398)      (882)
                                                                 
Financing                                                        
Issue of shares                  566        2,603     559        559
                                                                 
Increase/(decrease) in                                       
cash in the period               19         1,413     161        (323)
                                                                 
                                                                 

Notes to interim financial statements

1.   Basis of preparation

The  interim financial statements for the second quarter and six months  ended
30 September 1999 have been prepared using accounting policies consistent with
those  set  out in the Company's consolidated 1999 statutory accounts.   These
statements do not constitute statutory accounts within the meaning of  section
240 of the Companies Act 1985 and are unaudited.

Financial  information for the three months and six months ended 30  September
1998  have been extracted from the accounting records of the Company,  and  is
also unaudited.  It does not consolidate any results of operations of Symphony
Telecom, which was acquired on 2 February 1999.

The  balances  as  at 31 March 1999 have been extracted from the  accountants'
report included in the prospectus. The accountants' report was extracted  from
the  statutory accounts which have been filed with the Registrar of Companies.
The auditor's report on those accounts was unqualified and did not contain any
statement under section 237 of the Companies Act 1985.

The  interim financial statements for the second quarter and six months  ended
30  September 1999 were approved by the Board on 20 December 1999 and will  be
posted to shareholders on 23 December 1999.

2.   Operating data for 1999

                                   March            April                 May
Consumer Division                                                            
Unique users(1)                                                              
Sport                                                                        
   Football                      160,618          173,894             191,393
   Cricket                        69,157           78,803              92,179
   Rugby                                                                     
   Other                                                                     
Total Sport                      229,775          252,697             283,572
Entertainment                     31,750           33,189              33,485
Lifestyle                         65,429           66,726              68,878
Total unique users               326,954          352,612             385,935
User sessions(2)                                                             
Sport                                                                        
   Football                    1,831,348        1,874,676           2,102,564
   Cricket                     2,143,867        2,364,090           2,857,549
   Rugby                                                                     
   Other                                                                     
Total Sport                    3,975,215        4,238,766           4,960,113
Entertainment                    126,605          133,753             150,628
Lifestyle                        559,254          481,852             484,024
Total user sessions            4,661,074        4,854,371           5,594,765
Audiotext minutes(3)           5,826,875        5,829,453           5,339,713
                                                                             
Business Division                                                            
Business customers(4)              1,280            1,410               1,492
Business minutes(5)            5,631,912        5,495,010           6,434,351


                                    June             July                 Aug
Consumer Division                                                            
Unique users(1)                                                              
Sport                                                                        
   Football                      186,537          266,472             366,401
   Cricket                       101,688          143,835             145,745
   Rugby                                                                6,759
   Other                                                                     
Total Sport                      288,225          410,307             518,905
Entertainment                     34,919           34,110              46,894
Lifestyle                         78,002           82,475              93,197
Total unique users               401,146          526,892             658,996
User sessions(2)                                                             
Sport                                                                        
   Football                    2,182,961        2,681,722           3,196,288
   Cricket                     3,050,625        4,458,870           4,518,080
   Rugby                                                               16,796
   Other                                                                     
Total Sport                    5,233,586        7,140,592           7,731,164
Entertainment                    147,952          156,347             187,589
Lifestyle                        526,092          518,980             577,147
Total user sessions            5,907,630        7,815,919           8,495,900
Audiotext minutes(3)           6,097,658        6,152,836           6,136,871
                                                                             
Business Division                                                            
Business customers(4)              1,613            1,740               1,838
Business minutes(5)            6,948,406        8,118,687           7,910,244


                                    Sept              Oct                 Nov
Consumer Division                                                            
Unique users(1)                                                              
Sport                                                                        
   Football                      376,161          394,449             439,945
   Cricket                       148,354          146,807             148,128
   Rugby                          38,719          128,811              66,107
   Other                           2,540              833                 413
Total Sport                      565,774          670,900             654,593
Entertainment                    117,837          143,402             151,201
Lifestyle                         95,980          119,968             138,473
Total unique users               779,591          934,270             944,267
User sessions(2)                                                             
Sport                                                                        
   Football                    3,275,769        3,482,203           3,633,080
   Cricket                     4,598,974        4,551,017           4,443,840
   Rugby                          69,603          402,091             279,699
   Other                           3,429            1,029                 488
Total Sport                    7,947,775        8,436,340           8,357,107
Entertainment                    248,240          457,136             462,265
Lifestyle                        571,906          662,849             770,147
Total user sessions            8,767,921        9,556,325           9,589,519
Audiotext minutes(3)           6,072,885        6,758,761           5,874,780
                                                                             
Business Division                                                            
Business customers(4)              2,170            2,366               2,475
Business minutes(5)           10,047,227       10,348,644          10,969,562

Notes:

  1.   365 defines the number of unique users in a month as the number of
people who visit one of 365's web sites (including those web sites created and
hosted by 365 for third parties) during a month, telephone one of 365's
audiotext telephone services during a month or are registered to receive an 
e-mail product at a selected mid-month date.  If a person uses the same 365
service more than once in a month they are counted only once as a unique user.
 If, however, that person uses more than one 365 service during that month,
they are counted as a unique user once for each service used.

2.   365 defines the number of user sessions in a month as the number of times
that each 365 service is used.  If a user leaves a web site and returns more
than 30 minutes later the return visit is counted as a separate user session.
E-mail user sessions represent the number of registered subscribers at the
date selected to determine the number of unique e-mail users multiplied by the
number of issues in that month of the e-mail service they are registered to
receive.  Each incoming call to 365's audiotext telephone services represents
a user session.

3.   365 defines the number of audiotext minutes in a month as the number of
minutes  recorded by 365 and its carriers in respect of  calls  to  365's
audiotext services in that month.

4.   365 defines the number of business customers at each month end as the
total number of customers at that month end who have been billed for that
month.

5.    365 defines the number of business minutes in a month as the number of
     minutes tracked by the carriers' systems which are billed to the Business
     Division's customers in that month.


3.   Segmental analysis

Turnover and loss or profit before amortisation of goodwill and provision  for
NIC  on  share  options are classified below by geographical area  by  origin,
which  is not materially different from geographical area by destination,  and
by class of business.



                                          Turnover
                        Quarter    6 months        Quarter        6 months
                       ended 30    ended 30       ended 30        ended 30
                      September   September      September       September
                           1999        1999           1998            1998
                          £'000       £'000          £'000           £'000
                                                           
Geographical                                               
analysis
United Kingdom            4,807       9,276             36              84
France                       17          17              -               -
Germany                      19          92              -               -
Chile                        83         150              -               -
South Africa                  -           -              -               -
                          4,926       9,535             36              84
                                                                          
                                                                          
Busines Analysis                                                          
  Audiotext               3,040       6,306              -               -
  Business Services        1,593       2,792              -               -
  Internet                  293         437             36              84
                          4,926       9,535             36              84
                                                           

                            (Loss)/profit before goodwill and NIC
                        Quarter    6 months        Quarter        6 months
                       ended 30    ended 30       ended 30        ended 30
                      September   September      September       September
                           1999        1999           1998            1998
                          £'000       £'000          £'000           £'000
                                                           
Geographical                                               
analysis
United Kingdom            (298)        (31)          (382)           (800)
France                    (124)       (124)              -               -
Germany                    (14)           3              -               -
Chile                         7           -              -               -
South Africa               (81)        (81)              -               -
                          (510)       (233)          (382)           (800)
                                                                          
                                                                          
Busines Analysis                                                          
  Audiotext                 896       1,945              -               -
  Business Services       (162)       (293)              -               -
  Internet              (1,244)     (1,885)          (382)           (800)
                          (510)       (233)          (382)           (800)
                                                                          




4.   Loss per ordinary share of 0.25p each
  
                              Quarter    6 months     Quarter     6 months
                                ended       ended       ended        ended
                                   30 30 September          30 30 September
                            September        1999   September         1998
                                 1999       £'000        1998        £'000
                                £'000                   £'000
Loss for the period                                           
before amortisation of                                        
goodwill and provision                                        
for NIC on share options        (405)        (42) (374)       (784)
Goodwill amortisation           (622)     (1,129) -           -
Provision for NIC on            (255)       (255) -           -
share options
Loss for the period           (1,282)     (1,426) (374)       (784)
                                                                          
Weighted average number                                                   
of shares in the period:
Basic                     140,603,609   136,473,008   48,548,083   46,394,697
Diluted                   142,505,126   138,338,174   50,159,172   47,961,354
                                                                          
Basic loss per share                                                      
before amortisation of                                                    
goodwill and provision                                                    
for NIC on share options         0.3p        0.0p        0.8p         1.7p
Goodwill amortisation            0.4p        0.8p           -            -
Provision for NIC on                                                      
share options                    0.2p        0.2p           -            -
Basic loss per share             0.9p        1.0p        0.8p         1.7p
                                                                          
Diluted loss per share                                                    
before amortisation of                                                    
goodwill and provision                                                    
for NIC on share options         0.3p        0.0p        0.7p         1.6p
Goodwill amortisation            0.4p        0.8p           -            -
Provision for NIC on                                                      
share options                    0.2p        0.2p           -            -
Diluted loss per share           0.9p        1.0p        0.7p         1.6p

The weighted average number of shares have been restated to reflect the
effective 4-for-1 share split in November 1999.
5.   Share capital and reserves

                               Ordinary       Share     Merger  Profit and
                                  share     premium    reserve        loss
                                capital     account      £'000     account
                                  £'000       £'000                  £'000
                                                                          
At 1 April 1999                     319      11,517      4,937    (2,144)
Retained loss for the period          -           -          -    (1,426)
Exchange adjustments                  -           -          -         4
Shares issued in respect of                                    
various fund raising                                           
exercises                            29       2,574          -         -
Shares issued in respect of                                    
the acquisition of CSports            
and Electron Libre                    7           -        833         -
At 30 September 1999                355      14,091      5,770     (3,566)

On  24 July 1999, 700,000 ordinary shares in the Company (prior to the 4-for-1
share split in November 1999) were issued in consideration for the acquisition
of  C-Sports  Communication SA and Electron Libre  SARL.  The  merger  reserve
reflects the difference between the fair value and nominal value of the shares
issued.

6.   Reconciliation of movements in shareholders' funds

                              Quarter    6 months    Quarter     6 months
                                ended       ended      ended        ended
                                   30          30         30           30
                            September   September  September    September
                                 1999        1999       1998         1998
                                £'000       £'000      £'000        £'000
Opening shareholders'          16,523     14,629         931          782
funds
Loss for the period            (1,282)    (1,426)       (374)        (784)
Proceeds from the issue of                                    
shares                          1,401      3,443           -          559
Exchange adjustments                8          4           -            -
offset in reserves
Closing shareholders'                                         
funds                          16,650     16,650         557          557

7.   Net cash outflow from operating activities

                              Quarter    6 months    Quarter     6 months
                             ended 30    ended 30   ended 30     ended 30
                            September   September  September    September
                                 1999        1999       1998         1998
                                £'000       £'000      £'000        £'000

Operating loss before          
interest and minorities      1,387)    (1,617)     (382)       (800)
Depreciation                   111        189         9           15
Amortisation of goodwill       622        1,129       -           -
(Increase) in stock            (10)       (17)        -           -
(Increase) in debtors         (257)      (836)       (1)         (20)
Increase/(decrease) in         649        240         (13)        (59)
creditors/provisions
                              (272)      (912)       (387)       (864)

8.  Acquisitions

On  24  July  1999, 365 acquired 100% of the issued share capital of  C-Sports
Communication  SA  and  Electron Libre SARL for a consideration  of  £857,423,
consisting of a consideration of £840,000 which was financed by the  issue  of
700,000  ordinary shares in the Company (prior to the 4-for-1 share  split  in
November 1999), and acquisition costs of £17,423.

                                                              £'000
Assets acquired                                                    
   Electron Libre                                                25
   CSports                                                     (81)
                                                               (56)
Goodwill                                                        913
Cost of acquisition                                             857
                                                                   
Comprising:                                                        
     Consideration satisfied by shares issued                   840
     Professional fees incurred on acquisition                   17
                                                                857

Goodwill arising on the acquisition of CSports and Electron Libre is being
amortised on a straight line basis over the estimated economic useful life of
18 months.

9.   Future liabilities

On  exercise of share options issued after 6 April 1999, the Company  will  be
required  to  pay  National Insurance on the difference between  the  exercise
price  and  market  value  of  the shares issued.   The  Company  will  become
unconditionally  liable to pay the National Insurance  upon  exercise  of  the
options,  which  are exercisable over a period of up to seven years  from  the
date  of  the  grant.  The Company therefore makes a provision  following  the
grant of options, as opposed to on vesting or on exercise.

The  amount  of  the National Insurance payable will depend on the  number  of
employees  who remain with the Company and exercise their options, the  market
price  of  the  Company's  ordinary shares at the time  of  exercise  and  the
prevailing National Insurance rates at the time.  For the first quarter to  30
June 1999 no provision has been made in the accounts as any such provision was
considered  to  be immaterial.  In the second quarter to 30 September  1999  a
provision  of  £255,000  has been made taking into account  movements  in  the
market value of the Company's shares up to 30 September 1999 and further share
options  issued during the second quarter.  The accounts for the third quarter
will  include  any  adjustment  required arising  from  any  movement  in  the
Company's share price between 30 September and 31 December 1999.  Based  on  a
the  mid-market closing share price of 220.5 pence on 17 December  1999,  this
would result in a charge in the third quarter of £2,159,000.

On 10 November 1999 the Company allotted 400,000 ordinary shares of 1p each to
two  Directors at nominal value (prior to the 4 for 1 share split).  This will
result  in an employer's National Insurance liability of up to £300,000 (which
is  payable in the quarter ending 31 December 1999), and a non-cash charge  of
up to £2,500,000 in the profit and loss account in the third quarter.


                                                                                                                                                                                                                                  

a d v e r t i s e m e n t