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Future Integrated (FUR)

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Thursday 14 December, 2000

Future Integrated

Trading Update

Future Integrated Telephony PLC
14 December 2000

Future Integrated Telephony plc

Trading Update

The Board announced on 11 October 2000 that as a result of the difficulties
experienced with Independent Energy Holdings plc ('IEH'), the company had
implemented its own contingency plans.contingency plans.


The Company stated at that time that it had received commitments from three
organisations/agencies for the connection of 39,500 telephone lines out of the
Group's target of 57,000, but due to these organisations having to review or
re-arrange their electricity and gas supply agreements there was an estimated
delay of one or two months for the connection of these new lines.


The problems encountered by these organisations in dealing with their customer
bases, because of sale of the IEH's business, have become more acute as the
billing errors of that organisation have become more apparent. Whilst these
orders remain valid, the organisations/agencies have not been able to progress
connections in respect of some 24,000 of these orders, and hence no income has
yet been generated from these. As a result of these delays, it is unlikely
that the company will now achieve 132,000 connections by the end of the
financial year. In anticipation of these, and other connections, the company
had increased its facilities and infrastructure resulting in higher overheads.
The consequential delay in receipt of revenues combined with the additional
overheads has delayed the Board's anticipation about when it will return to
profitability. It is currently the Board's view that the Group will become
profitable, on a month on month basis within the three months ending 31 May
2001, the Company's financial period end, but the profit so created will not
be sufficient to achieve the loss anticipated by the market, which is likely
to be substantially higher. The Board has taken the review that it would
damage the future of the business to reduce the infrastructure in order to
make a short-term savings as a result of these external and unexpected
problems.


Despite the above continuing problems as a result of IEH's cessation of trade,
discussions are at an advanced stage with another organisation with the
anticipation of entering into trials in February/March 2001 for an estimated
50,000 additional lines.

.


The Group has now increased its dealers from 29 in August to 61 today.In a
significant step to implement its plan to transform the Company from a
Telecommunications Services Supplier to a Business Services Supplier in the
SME market, the group launched, on time, in November its business portal -
www.fit4business.com. This was further strengthened by the recent announcement
that the Company and Bank of Scotland have signed a 5 year agreement to
provide a 'Business Solutions' Internet offering and this will be available
through the Portal early in the New Year. . SMEs are already able to buy their
Stationary and Computer need through the Portal. Future's own Internet service
is on track to be completed this week month and offered for salae in January
and revenues will flow from March.

In addition the Groups Internet offering is due to be completed this week and
be dispatched by 1st week of January which should start developing a revenue
stream from February 2001.


In the past few months the Company has focussed its attention on those parts
of the business that can generate the anticipated growth and future
profitability and remains confident about the future.


The Board is committed to stabilising and strengthening its base business
while continuing its strategy to add e-commerce distribution to that base.
Progress has been made in improving the back office processes in anticipation
of the increased demand so that growth will not create proportional overhead
growth. The Company will continue to share its progress with the market as
developments occur.


                                                                                
               

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