Interim results to March 31 2004 - Revenue increased by 41%; EBITA increased by 212%

Intec Telecom Systems PLC (“Intec” or “the Company”), the leading global provider of telecoms Operations Support Systems (“OSS”) products, is pleased to announce its unaudited results for the six months ended 31 March 2004, (“HY 2004”). A combination of strong new licence sales across Intec’s main product lines, increased revenues from both professional services and recurring business, and generally improved trading conditions in the telecoms sector have driven a 41% increase in turnover and an increase in adjusted earnings per share of 130%. Trading conditions continue to be healthy, and providing these remain stable the Board is confident of satisfying full year expectations. In addition the Company is engaged in several major opportunities which, should they conclude and be recognisable in the current year, will enhance Intec’s financial performance for the full year.

HIGHLIGHTS

• Turnover of £31.4 million increased by 41%  (6 months ended 31 March 2003 (“HY 2003”): £22.3 million) with organic and acquisition-driven growth in all key activities.
• Earnings before interest, tax, and amortisation (“EBITA”) increased to £3.1 million compared with £1.0 million in HY 2003.
• Adjusted EPS increased by  130% to 1.15p  (HY 2003: 0.50p).
• 42 new contracts of which 38 are with new customers. 20 new licences signed in the period plus 22 new bureau customers (HY 2003: 27 new contracts signed, plus 31 through acquisitions).
• Notable customer wins announced  in Africa, Brazil, China, Eastern Europe, Russia, the UK and the USA.
• Revenue and earnings adversely affected by US dollar depreciation, estimated at £1.3 million and £0.6 million respectively.
• Operating cash outflow of £0.3 million (HY 2003: inflow of £2.6 million) after working capital investment in Digiquant and to support business growth.
• Loss before tax reduced to £1.0 million (HY 2003: loss of £2.3 million), after depreciation and amortisation of goodwill and intangible assets of £5.3 million (HY 2003: £4.4 million).
• Customer installations reach 574 in 400 operators.
• Intec retains balance sheet strength with cash and cash equivalent investments of £12.8 million
  (HY: 2003 £12.3 million).

“Intec continues to set the pace in the OSS industry worldwide, with a very strong set of half year results and some notable customer wins,” said Intec’s Executive Chairman, Mike Frayne. “While investment by our carrier customers remains cautious, there is little doubt that a recovery is underway in the telecoms sector. Improved operating results and an increase in corporate activity are clear signals of a return to more optimism among carriers and suppliers. New licences sales, professional services and recurring revenue have all demonstrated healthy growth, and with ongoing cost control we have been able to convert this into substantially increased earnings. We believe there are strong opportunities for further success for our expanding product portfolio, as well as interesting consolidation and expansion possibilities through acquisitions. Intec is winning greater market share and raising its profile worldwide, and I believe that Intec can deliver another strong performance for the full year.”

“Intec signed 42 customer contracts in the first half, including several multi-million pound deals,” added Chief Executive Kevin Adams. “The depreciation of the dollar continues to impact us in North America, but we have still seen strong contributions from all regions, with particularly impressive growth in Asia-Pacific and Latin America. Our ability to secure major contracts is growing steadily and I am pleased to note that we have won a number of high value, multi-product deals from our enlarged OSS portfolio.”

For further information:

Kevin Adams, CEO
Intec Telecom Systems PLC
+44 (0) 1483 745800
kevin.adams@intec-telecom-systems.com

Andrew Rodaway
Intec Telecom Systems PLC
+44 (0) 7768 808082
andrew.rodaway@intec-telecom-systems.com

Edward Bridges/James Melville-Ross/Cass Helstrip
Financial Dynamics
+44 (0) 20 7831 3113
james.m-ross@fd.com

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