RNS Number:2619J
Net b2b2 PLC
27 March 2003




Strictly Embargoed until 07.00am Thursday 27 March 2003


                          NETB2B2 PLC INTERIM RESULTS
                   FOR THE SIX MONTHS ENDED 31 DECEMBER 2002


Netb2b2 plc, the AIM traded digital services group, announces its interim
results for the six months ended 31 December 2002.



Highlights (unaudited):



  * Turnover #2.8 million (2001: #2.9 million)
  * Gross Profit #1.8 million (2001: #1.4 million)
  * Ebitda #23,000 (2001: Loss #309,000)
  * Loss before tax #490,000 (2001: Loss #1.6 million)
  * Loss per share 0.18 pence (2001: Loss 0.65 pence)
  * Strategic review of business now substantially complete
  * Increased utilisation of synergies within operating companies
  * Strong business wins in Q1 of 2003



Keith Young, Chairman Netb2b2 plc, commented: "We have continued to focus on the
day to day business of our three operating companies, developing their
profitability and strengthening the synergies between all three businesses, thus
allowing us to capitalise on the technical cross over between the companies.



As the Group develops we anticipate that strategic acquisition opportunities
will be pursued to meet our business model.  These will need to be both
synergistic and of sound financial performance.  Through dedication to
excellence in niche markets, consistent growth and the innovative use of
technologies we expect to drive the Group forward and deliver enhanced
shareholder value."



For further information, please visit www.netb2b2.com or contact:


Keith Young/Geoffrey Griggs     John West/Tracy Young             Alex Borrelli
Netb2b2 plc                     Tavistock Communications          Shore Capital
Tel: 020 7878 1007              Tel: 020 7600 2288           Tel: 020 7408 4090





CHAIRMAN'S STATEMENT



The past six months have been an important period of consolidation for Netb2b2.
In what have been very challenging markets for digital service suppliers to
operate in, we have made substantial progress in our overhaul of the existing
businesses and have concentrated not only on the cost base of each of the
operating companies, but importantly also given each a clear market focus.



This continued concentration on organic growth means that each of the businesses
is now focused on becoming a profitable niche player, offering solutions within
markets that require high levels of delivery within the transformation and
communication of information.  We have also sought to maximise the synergies
between the three businesses with an increasing degree of success.



Financial Results Summary


The unaudited consolidated results for the period can be summarised as follows:


                                                      Six months            Six months           Year Ended
                                                           ended                 ended              30 June
                                                     31 Dec 2002           31 Dec 2001                 2002
                                                            #000                  #000                 #000
Earnings before interest, tax,
  depreciation and amortisation
  ("Ebitda")                                                 23                  (309)                (280)
Depreciation                                               (165)                 (191)                (368)

Trading loss for ongoing group                             (142)                 (500)                (648)
Net interest paid                                           (23)                  (31)                 (62)
Taxation                                                     26                     -                    -
Goodwill amortisation                                      (325)                 (519)               (1140)
Other items                                                   -                  (528)                (528)

Group loss for the period                                  (464)                (1578)               (2378)



Gross profit was #1,758,000 compared with #1,399,000 during the same period in
2001.  Loss per share amounted to 0.18p compared with a loss of 0.65p in 2001.
The Group has continued to be positive at the operating free cash flow level.



Operational Review


During the period the performance of the Group was satisfactory, despite
difficult market conditions and the adverse seasonality of the summer and
Christmas periods. We were particularly pleased with the performance of cScape,
which has continued to benefit from significant business wins within the public
sector arena, one of the few market areas where information technology spend has
continued to increase.



The performance of Blue Sky Communications was somewhat reflective of the
internet and e-commerce industry as a whole during this challenging period.
However, we have now put in place a more focussed sales strategy and in the
first three months of 2003 Blue Sky has won and completed a number of
significant contracts.  In particular, it has consolidated its position within
IBM and added a focus on open source environments.  It has also completed
further projects with Associated Press Television News and recently won
contracts with Citywire, Lever Faberge and Kall Kwik.



cScape Strategic Internet Services has continued to develop as a business
achieving solid income levels during the reported period, which enabled it to
trade profitably.  The company has continued its work with the Chartered
Institute of Personnel Development whilst establishing itself as a key player in
the Local Authority market with new web development contracts such as those for
the Corporation of London, London Borough of Greenwich and Luton Borough
Council.



ITM Graphics benefited from its strategic move to concentrate on the Net Publish
internet enabled infrastructure.  Forecast cost savings are now being realised
with a consequent improvement in margin. The enhanced business functionality of
Net Publish has improved speed of operation for clients and is serving to
develop significant amounts of new business.  Pleasingly, ITM is now working for
a number of new publications with publishing houses including Centaur,
Highbury-WV and Practical Law Company.  The collaboration between ITM and Blue
Sky in developing Net Publish was an important highlight of the period and is an
example of how sharing technology expertise across the operating companies can
lead to increased revenue and improved margin.



Current Trading and Outlook


In summary, the Directors believe that the Group continues to progress in spite
of challenging trading conditions.  The Board has continued to commit its
energies towards developing each business, refining both their cost base and
their market focus, whilst utilising the relevant synergies between the three
trading companies.



As the Group develops we anticipate that strategic acquisition opportunities
will be pursued to meet our business model.  These will need to be both
synergistic and of sound financial performance.  Through dedication to
excellence in niche markets, consistent growth and the innovative use of
technologies we expect to drive the Group forward and deliver enhanced
shareholder value.


Keith Young                                                        27 March 2003
Chairman




Consolidated profit and loss account for the six months ended 31 December 2002

                                                                                                
                                  Six months    Six months          Year 
                                       ended         ended         ended 
                                  31.12.2002    31.12.2001    30.06.2002 
                                   Unaudited     Unaudited       Audited 
                                           #             #             # 
Turnover                                                                
Continuing operations              2,763,546     2,909,645     6,014,072
Discontinued operations                    0        11,849        11,849
                                   2,763,546     2,921,494     6,025,921
Cost of sales                     (1,004,622)   (1,522,345)   (2,310,195)
Gross profit                       1,758,924     1,399,149     3,715,726
Administrative expenses           (1,901,007)   (2,426,495)   (4,891,137)
Amortisation of goodwill            (324,932)     (519,494)   (1,140,112)
Operating loss                                                          
Continuing operations               (467,015)   (1,335,866)   (2,104,549)
Discontinued operations                    0      (210,974)     (210,974)
                                    (467,015)   (1,546,840)   (2,315,523)
Interest receivable                      719         1,343         2,659
Interest payable                     (23,914)      (32,392)      (64,440)
Loss on ordinary activities                                             
before taxation                     (490,210)   (1,577,889)   (2,377,304)
Tax on loss on ordinary               26,132             0             0
activities                                                              
Loss for the financial period       (464,078)   (1,577,889)   (2,377,304)
Loss per share                        (0.18p)       (0.65p)       (0.95p)




Consolidated balance sheet as at 31 December 2002 

                                                                                                     
                                           Six months     Six months           Year 
                                                ended          ended          ended 
                                           31.12.2002     31.12.2001     30.06.2002 
                                            Unaudited      Unaudited        Audited 
                                                    #              #              # 
Fixed assets                                                                       
Intangible assets                           1,418,556      2,327,912      1,743,488
Tangible assets                               563,536        833,055        710,850
                                            1,982,092      3,160,967      2,454,338
Current assets                                                                     
Stocks                                         88,504        103,151        103,401
Debtors                                     1,053,919      1,511,661      1,124,126
Cash at bank                                  169,208         64,597         82,886
                                            1,311,631      1,679,409      1,310,413
Creditors:                                                                         
Amounts falling due within one year                                                
Bank loans and overdrafts                    (351,578)      (780,753)      (414,214)
Trade and other creditors                  (2,016,279)    (1,707,488)    (1,931,732)
                                           (2,367,857)    (2,488,241)    (2,345,946)
Net current liabilities                    (1,056,226)      (808,832)    (1,035,533)
Total assets less current liabilities         925,866      2,352,135      1,418,805
                                                                                                     
Creditors:                                                                         
Amounts falling due over one year                                                  
Bank loans                                          -        (68,838)        (3,208)
Other loans                                  (102,518)      (196,455)      (128,169)
                                             (102,518)      (265,293)      (131,377)
                                              823,348      2,086,842      1,287,428
Capital and reserves                                                               
Called up share capital                     2,645,807      2,595,807      2,645,807
Share premium account                       9,725,151      9,687,651      9,725,152
Shares to be issued                                 -         87,500              -
Profit and loss account                   (11,547,610)   (10,284,116)   (11,083,531)
                                              823,348      2,086,842      1,287,428
 

Notes to the financial information 

1. Financial information 

The financial information is for the six months ended 31 December 2002 and is
neither audited nor reviewed as defined by APB Bulletin 1999/4. The balance
sheet and profit and loss account do not constitute statutory statements within
the meaning of Section 240 Companies Act 1985. The results for the year ended 30
June 2002 have been extracted from the financial statements of the Group on
which an unqualified report from the auditors has been received and which have
been filed with the Registrar of Companies.

2. Basis of preparation 
 
The interim financial information has been prepared on the basis of the
accounting policies adopted for the audited accounts for the year ended 30 June
2002 under the historical cost convention and in accordance with applicable
accounting standards.


3. Segmental information 
The turnover, loss before taxation and net assets are wholly attributable to the
principal activities of the Group and arise solely within the United Kingdom.


4. Goodwill 

Goodwill represents the excess of the cost of acquisition over the fair value of
the separable net assets acquired. Goodwill is amortised through the profit and
loss account in equal instalments over its estimated useful life. During the
period the life of the goodwill remaining from the acquisition of cScape
Strategic Internet Services Ltd was extended to 12 years from the date of
acquisition.


5. Taxation 

No liability to UK corporation tax arose on ordinary activities for the period 
owing to the losses incurred.


6. Loss per ordinary share 

Basic loss per share is calculated by dividing the loss attributable to
shareholders by the weighted average number of ordinary shares during the
period. Diluted loss per share has not been calculated since the share options
granted do not have a significant dilutive effect in the current period.
                                       
                                                            
                                   Six months to   Six months to       Year to
                                      31.12.2002      31.12.2001    30.06.2002

Basic earnings attributable to         (464,078)     (1,577,889)   (2,377,304)
ordinary shareholders                                                        

Weighted average number of          264,580,599     241,988,207   251,060,151
ordinary shares                                                              

Loss per share                           (0.18p)         (0.65p)       (0.95p)


7. Statement of recognised gains and losses 

There are no recognised gains or losses other than those recorded in the profit 
and loss account.

8. Copies of the interim report 

Copies of the interim report are available from www.netb2b2.com or the company 
secretary at Netb2b2 plc, 20-26 Brunswick Place, London, N1 6DZ.

 
END  



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