RNS Number:2573P
Interactive Investor Intl PLC
10 August 2000


THIRD QUARTER RESULTS TO 30 JUNE 2000


interactive investor international plc ("Interactive Investor"), one of the
UK's leading personal financial services portals, today announces its results
for the third quarter and the nine months ended 30th June, 2000.


Highlights for Q3
*    Revenues for Q3 #1.8m (Q2 2000: #1.8m)
*    Transaction-related revenues #430,000 (Q2 2000: #680,000)
*    Advertising-related revenues #1.0m (Q2 2000: #772,000)
*    Number of registered accounts increased to 1,038,174 (Q2 2000: 939,861)
*    Gross profit #177,000 (Q2 2000: #611,000)
*    Operating loss of #4.8m* (Q2 2000: loss of #7.2m)
*    Cash balance #64m at 30 June 2000
*    Average monthly page impressions over the quarter 45.5m

*including the write back of provisions for option-related expenses of #1.03m

Nine months ended 30 June 2000
*    150% over the prior year
*    Transaction-related revenues for the nine months #1.2m (1999: #346,000),
     an increase of 247%
*    318% increase in registered accounts since 30 June 1999 to 1,038,174
     (1999: 248,581)
*    Gross profit up 33% for the nine months to #897,000 (1999: #675,000)
*    Page impressions up 366% to over 42m in June 2000 (1999: 9m)

Operational Highlights

*    Continued growth in registered accounts

*    Launch of new services:
     -    FundsNow!, Bonds Centre

*    Key agreements signed with:
     -    Britannic Assurance, Xest (execution only broker of Charles Stanley 
          & Co.)
  
*    Strategic alliances, partnerships and commercial arrangements formed
     with:
     -    Yahoo! Finance, Yac.com, Wall St. Strategies

*    Management team further strengthened with appointments of Anthony
     Rawlinson as Chief Commercial Officer and Robert Suttie as Marketing
     Director

*    Interactive Investor voted amongst top internet stocks, achieving first
     time entry into MT/Bain e25 index at number four

  
  
Financial Summary

                          Quarter      Quarter  Nine months  Nine months
                            ended        ended        ended        ended
                          30 June      30 June      30 June      30 June
                             1999         2000         1999         2000
                      (unaudited)  (unaudited)  (unaudited)  (unaudited)
                             #000         #000         #000         #000
                                                                        
   ----------------  -----------      --------     ----------   ----------
  Revenue:                                         
  Commission-share,                                         
  referral fees and                                         
  subscriptions              130          430          346          1,225
  Advertising                180        1,004          512          2,256
  Website                                         
  development,                                         
  hosting and                                         
  consulting                 411          344          965          1,048
   ----------------     ---------    --------     ----------   ----------
  Total revenue              721        1,778        1,823          4,529
                     
  -----------------      ---------    ---------    ----------   ---------
  Gross profit               203          177          675            897
                     
     --------------      ----------   -----------  -----------   --------
  Operating loss          (2,015)      (4,782)      (4,155)      (15,084)
                     
  -----------------     -----------  -----------  ----------   -----------

  Operating Statistics

                                                                 % Change
                                              Month ended       June 2000
                   Month ended  Month ended       30 June   compared with
                 30 April 2000  31 May 2000          2000        Sep 1999
  ------------     -----------  -----------  ------------    ------------
  Page                                                                   
  impressions                                                            
  (000s) (1)        50,908,694   43,437,430    42,164,198            366%
  ----------       -----------  -----------  ------------   -------------
  First Visits                                                           
  (2)                1,438,628    1,327,416     1,308,657            217%
  -----------      -----------  -----------   -----------  --------------
  Total visits                                                           
  (3)                4,138,954    3,835,400     3,946,240            262%
  ----------      ------------  -----------   -----------  --------------
  Registered                                                             
  accounts (4)         982,015    1,012,279     1,038,174            243%
  ------------   -------------   ----------   -----------   -------------
  Average page                                                           
  impressions                                                            
  per visit              12.30        11.33         10.68             29%
  (5)


The figures above are audited by ABC Electronic. Please refer to definitions
set out below.


Commenting on the results, Tomas Carruthers, Chief Executive of Interactive
Investor, said:

"Equity market activity earlier in the year was driven by unprecedented levels
of investor participation in both primary issuance and secondary trading.
Whilst no return to such levels can be forecast, we are well positioned for
any upswing in either new issuance or secondary trading.  Our customer base
has a proven propensity to participate in new offerings and remains actively
interested in equity markets and investment products.

"We continue to invest in order to grow and convert our customer base and
increase their use of our services.  The services we have under development,
and the new services delivered in the quarter, add value to our core
proposition as the UK's leading personal financial services portal.  We look
forward to the future with confidence."


Enquiries:

interactive investor international plc
Tomas Carruthers, Chief Executive Officer
Max Ashton, Chief Financial Officer
Candice Hodgson, Corporate Communications Director
Tel: 0207 759 5000

Brunswick
Tom Kyte / Katharine Sharkey
Tel: 0207 404 5959
  

Notes to editors:
*    Interactive Investor was founded in August 1995 and the website launched
     in October of the same year. The company is an Internet financial service
     that provides individuals with the capability to identify, compare,
     transact and monitor a number of investment products and services. The
     company also designs and constructs websites and online trading systems
     and enables investors to access, via third party data providers, the
     information and resources they need to execute on the Internet financial
     transactions with third party providers.

For more information on the Company, news, events, financial results,
shareholder information, metrics and corporate information, please go to our
Investor Relations site. (www.iii.co.uk/investor_relations)

Definitions:

(1)  Page Impressions

As defined by the Internet industry, a unique request for information from a
site by a user. A visit typically involves a number of page impressions.
  
(2) First Visits
  
Represents the number of first visits to our site during the period by all
users. If a user visits the site more than once during the period, only the
first visit by that user is counted. This provides our management with an
approximation of the number of individuals using our site in a period.

(3) Total Visits
  
Represents all visits to our sites during the period by all users.

(4) Registered Accounts
  
Represents the cumulative number of accounts registered with our site since
inception. A particular individual may have one or more accounts. A registered
account may be used by more than one individual. Therefore, the term
"registered accounts" does not represent the number of users on our site.
  
(5) Average Page Impressions
  
Is the number obtained by dividing "page impressions" during the period by the
number of "total visits" during the period.


Third Quarter Results to 30 June 2000

CHIEF EXECUTIVE OFFICER'S REVIEW


During the quarter ended 30 June, we continued to leverage the strength of our
position as one of the UK's leading personal financial services portals to
launch new services and maintain consistently high activity levels on our
site, despite a significant reduction in equity market activity in general. 
At 30 June, we had 1,038,174 registered accounts and activity on the site
during the quarter averaged over 45 million page impressions per month, with
the figure for June being 42 million.  We are also delighted to have been
voted number four in the MT/Bain e-25 index*, which reinforces our position as
one of the UK's leading websites.

Our strategy is to provide a context within which private individuals can
manage the full breadth of their investments and make their transaction
decisions.  We believe the Internet is an opportunity to use technology to put
the 'service' back into financial services, and to create a new relationship
between the customer and financial product providers.  This relationship will
change the dynamics and the economics of transactions between customers and
providers.  The ongoing loyalty of our customers supports our continued
independence from product providers, whilst our scale will increasingly allow
us to offer our users opportunities unavailable to service providers with
narrower scope.


Results

Results  for  the period are in line with expectations following  our  trading
statement on 16 June.  Advertising revenue increased by 30% from the  previous
quarter  whilst transaction revenues decreased by 37% on the previous  quarter
as  equity market activity in London declined from the spring's record  levels
of  private  investor  participation in both primary  issuance  and  secondary
trading.   Website development, hosting and consulting revenues were  in  line
with  expectations.  Following an operational review during  the  quarter,  we
have  decided to close down our operation in Hong Kong. This will be concluded
at minimal cost to us and will result in significant future cost savings.



Transactions

The SFA regulated status of our subsidiary, interactive investor trading
limited, has enabled us to launch a number of exciting new services within the
last three months:

*    Launch of FundsNow! Service:

     - A web-based funds marketing and application service with access to 20
     leading fund managers and over 300 funds.  The dedicated centre contains
     a wealth of statistical information and news articles to educate and
     assist consumers who are interested in Unit Trusts and provides    
     comprehensive data on a wide range of Unit Trusts available in the UK.   
     Individuals can then apply online for funds of their choice.
     (http://www.iii.co.uk/fundsnow/).

*The MT/Bain e25 judges British Internet companies on factors such as concept,
innovation and execution as well as traffic, financing and profile.  It is the
UK's only research based tracking index of home-grown Internet start ups and
was first launched in November last year. This is the third quarterly update
and continues to chart the progress of the hottest players and the early
demise of the weaker business models.


*    Launch of Bonds Centre, in conjunction with Britannic Assurance:

     - A centre dedicated to giving users information on, and comparative
       tools with regards to, bonds.  Private investors are also offered the
       opportunity to apply online directly through Britannic for Britannic's
       Portfolio Investment Bond.

*    Xest, the execution-only broker of Charles Stanley & Co, has joined our
      UK online trading centre.

We have also commenced development of applications to support online
transaction systems in a broad range of financial products, as noted in our
interim statement.  These applications will support online mortgage, insurance
and unit trust trading through our site.


Marketing Initiatives

We are pleased to announce that we have entered into an agreement with Yahoo!
Finance to provide access to our UK online trading centre from Yahoo! UK.
Under the agreement, users of Yahoo! and Interactive Investor can now compare
more than 20 UK online brokers.  The toolset enables users to compare and
analyse brokerage services, ranking them according to their rates of
commission using a simple calculator.  The table also gives details of other
charges, together with information on dealing and settlement methods and will
assist the company as we build the prominence of our online trading centre.


Management

Following the quarter end we have strengthened our management team with the
appointment of Anthony Rawlinson as Chief Commercial Officer and Robert Suttie
as Marketing Director.  Anthony joins us from Hollinger Telegraph New Media,
where he was Strategy Director. He was previously a non-executive director of
the Company. Robert joins us from AXA UK, where his roles included E-Business
Director and Information Systems Development Director.

In his role as Chief Commercial Officer, Anthony will have responsibility for
driving the Company's efforts to enhance and develop existing sources of
revenue in addition to new product development.  As Marketing Director, Robert
will assume overall responsibility for the customer experience on the site and
the Company's ability to derive revenues from its strong customer base.
Additional responsibilities include the editorial and customer relationship
management functions.


Current Trading and Outlook

Equity market activity earlier in the year was driven by unprecedented levels
of investor participation in both primary issuance and secondary trading.
Whilst no return to such levels can be forecast, we are well positioned for
any upswing in either new issuance or secondary trading.  Our customer base
has a proven propensity to participate in new offerings and remains actively
interested in equity markets and investment products.


We continue to invest in order to grow and convert our customer base and
increase their use of our services.  Advertising has therefore been targeted
on promoting services new to the site, such as the capability to compare
between, and apply for, a broad selection of unit trusts.  We will continue to
promote the capability to search, select and transact on the site as
transaction services are launched, ensuring at the same time that our cost of
acquiring new users is controlled.

The services we have under development, and the new services delivered in the
quarter, add value to our core proposition as the UK's leading personal
financial services portal.  We look forward to the future with confidence.


Tomas Carruthers
Chief Executive
10 August 2000



Third Quarter Results to 30 June 2000

CHIEF FINANCIAL OFFICER'S REVIEW

Results

The third quarter of the current year saw difficult trading conditions
resulting from the significant decline in equity market activity. We continued
to focus on developing our transaction capability to maximise the long-term
value to be derived from our sizeable user base.


Revenue

Revenue for the quarter ended 30 June 2000 was #1,778,000, which was largely
unchanged from revenues in the quarter ended 31 March 2000 and a 146% increase
over the comparable 1999 period turnover of #721,000.

Revenue for the quarter ended 30 June 2000 is split by main business activity
as follows: Commission-shares, referral fees and subscriptions ("transaction-
related revenues") #430,000; advertising #1,004,000; website development,
hosting and consulting ("consulting") #344,000.

Transaction-related revenues for the quarter ended 30 June 2000 declined by
37% compared with the previous quarter, while increasing by 231% from the
comparable 1999 period.  The decline in transaction revenues from the previous
quarter was largely due to the significant decline in equity market activity
from the record levels experienced in the previous quarter, together with the
fact that the previous quarter is seasonally strong being the last quarter of
the UK tax year. This has depressed equity transaction revenues over the site
and the retail placement of shares in initial public offerings.

Advertising revenue for the quarter ended 30 June 2000 increased by 30% over
the previous quarter and 457% over the comparable 1999 period.

Consulting revenues for the quarter ended 30 June 2000 were unchanged from the
previous quarter and declined by 16% from the comparable 1999 period.


Costs

We have continued to invest heavily in developing our brand, transactional
capabilities and infrastructure in order to continue to offer premium services
to our users.  Our operating loss was #4,782,000 (including the write back of
provisions for option-related expenses of #1,030,000) in the quarter ended 30
June 2000 compared to a loss of #7,197,000 (including provisions for option
related
expenses of #4,101,000) in the quarter ended 31 March 2000.


Cost of revenues increased to #1,601,000 in the quarter ended 30 June 2000
from #1,184,000 in the previous quarter and #518,000 in the comparable 1999
period. This increase is largely due to additional content being made
available over the site and increased investment in our transaction
capability. All development costs are written off as incurred and as such can
result in fluctuations on a quarter-by-quarter basis.

Sales and marketing expenses increased to #3,006,000 in the quarter ended 30
June 2000 from #1,553,000 in the previous quarter and #598,000 in the
comparable 1999 quarter. The increase in expenditure over the previous quarter
is accounted for by the television, radio and billboard campaign we ran in
April and May in order to continue to build the company's brand and to inform
the public of the transaction capability offered over the site.  The company
continues to closely monitor the success of different media to extract maximum
value from our marketing spend.

Technology and development costs increased to #1,191,000 in the quarter ended
30 June 2000 from #1,028,000 in the previous quarter and #718,000 in the
comparable 1999 quarter. This is a result of increased staff and contractor
costs arising from expansion and development of the website.

General and administration costs increased to #1,792,000 in the quarter ended
30 June 2000 from #1,126,000 in the previous quarter and #902,000 in the
comparable 1999 quarter.  The increase is in line with the company's
expectations and included a significant one-off expense relating to the
company's relocation to new premises in the period.

The reported results include a credit of #1,030,000 relating to the National
Insurance expense on options granted and the accounting cost of providing
share-based compensation to employees. The National Insurance write back of
#1,428,000 is based on the difference between the market value of our shares
at 30 June 2000 (46p) and 31 March 2000 (194p). Share-based compensation
charged in the quarter of #398,000 represents an accounting adjustment to
recognise the deemed cost for providing share options to employees. The charge
does not represent a cash liability.

The net loss for the quarter ended 30 June 2000 was #3,758,000 (after the
option credit detailed above) compared to #6,515,000 in the previous quarter
and #2,003,000 in the comparable 1999 quarter.

The company had cash resources of #64 million at 30 June 2000 compared to #73
million at 31 March 2000.  Cash expenditure in the quarter ended 30 June 2000
included one-off IPO-related expenditure of #3 million and capital expenditure
of #1.1 million.


Max Ashton, Chief Financial Officer
10 August 2000


interactive investor international plc
Consolidated Income Statement                               
for the quarter and nine months ended 30                   
June 2000
                                               Nine months   Nine months
                Quarter ended   Quarter ended        ended         ended
                 30 June 1999    30 June 2000      30 June  30 June 2000
                                                      1999
                    Unaudited       Unaudited    Unaudited     Unaudited
                        #'000           #'000        #'000         #'000
                                                             
Net revenues              721           1,778        1,823         4,529
Cost of                                                      
revenues                 (518)         (1,601)      (1,148)       (3,632)
                                                             
                   -----------     ----------      --------     ----------
Gross profit              203             177          675           897
                    -----------     -----------     ---------    ---------
Operating                                                    
expenses               (2,218)         (4,959)      (4,830)      (15,981)
                    -----------     -------------   ----------   -----------
Operating loss         (2,015)         (4,782)      (4,155)      (15,084)
                                                             
Net interest                                                 
receivable                 12           1,024           65         1,695
                                                             
Loss on                                                      
ordinary
activities
                     ---------       -----------     --------     ----------
before taxation        (2,003)         (3,758)       (4,090)      (13,389)
                                                             
Tax on loss on                                               
ordinary                                                   
activities                   -              -              -            -
                      ---------       ---------       -----------  ---------
Retained loss          (2,003)         (3,758)       (4,090)      (13,389)
                    ============    ==========      ========     ==========


The consolidated results for each of the periods shown above are
derived from continuing operations
                                                               
Net revenues above                                             
analysed as:
Commission-shares,                                             
referral
fees and subscriptions       130            430        346        1,225
Advertising                  180          1,004        512        2,256
Web site development,                                          
hosting
and consulting               411            344        965        1,048
                           --------     --------     -------    ---------
                             721          1,778      1,823        4,529
Operating expenses above    -------      --------   --------     --------
analysed as:
Sales and marketing          598          3,006      1,330        5,891
Technology and                                                 
development                  718          1,191      1,516        3,008
General and                                                    
administration               902          1,792      1,984        4,011
Options - National                                             
Insurance charge              -          (1,428)        -           366
Options - compensation                                         
expense                       -             398         -         2,705
                           -------      --------     ---------  ---------
                           2,218          4,959      4,830       15,981
Loss per equity share     --------     ---------    --------   ---------
(basic and
diluted) (1)                                                   
Loss after taxation        2,003          3,758      4,090       13,389
Weighted average number                                        
of
ordinary shares                                                
outstanding ('000)        77,291        165,014     71,082      133,428
Net loss per share -                                           
basic and diluted            2.6             23        5.8         10.0

(1)   Prior period comparatives restated to reflect the    
effective 3-for-1 share split in January 2000

interactive investor international plc
Consolidated Balance Sheet                                                 
at 30 June 2000                                                       
                                    As at         As at          As at
                        30 September 1999  30 June 1999   30 June 2000
                                  Audited     Unaudited      Unaudited
                                    #'000         #'000          #'000
Fixed assets                                                
Tangible fixed assets                 932           726          3,303
                              -------------    ---------       ---------
Current assets                                              
Debtors                               881         1,343           3,928
Cash at bank and in                                         
hand                                  109           242          64,276
                             -------------     ---------       -----------
                                      990         1,585          68,204
Creditors: amounts                                          
falling due
within one year                                             
Creditors and                                               
provisions                         (2,430)       (1,949)         (7,581)
Other loans                          (900)          -               -
                               ------------     ------------  -----------
                                   (3,330)       (1,949)         (7,581)
                                ------------    ----------    -----------
Net current                                                 
assets/(liabilities)               (2,340)         (364)         60,623
                               ------------      ---------    ----------
Net assets/                                                 
(liabilities)                      (1,408)          362          63,926
                               ============      ==========      ===========
Capital and reserves                                        
Share capital                        260            258           1,653
Shares to be issued                  532            268             -
Share premium                      6,714          6,579          81,871
Warrant reserve                       48            -                48
Profit and loss account           (8,962)        (6,743)        (19,646)
                               -----------      ---------      ----------
Equity shareholders'                                        
funds/(deficit)                   (1,408)           362          63,926
                              =============    ==========      ============

interactive investor international plc
Consolidated Cashflow Statement                                    
for the nine months ended 30 June 2000
                                           Nine months     Nine months
                             Year ended          ended           ended
                           30 Sept 1999   30 June 1999    30 June 2000
                                Audited      Unaudited       Unaudited
                                  #'000          #'000           #'000
                                                          
Net cash outflow from                                     
operating activities            (4,261)         (3,327)        (10,580)
                                                          
Returns on investment                                     
and servicing of
finance
Interest received                   73              65           1,340
Interest paid                       -               -              (45)
                           -----------        ------------    ------------
Net cash inflow from                                      
returns on investment                                   
and servicing of                                        
finance                             73              65           1,295
                           ------------       -------------   ------------
Capital expenditure                                       
and financial
investment
Payments to acquire                                       
tangible fixed assets             (892)           (599)         (2,177)
                          -------------      -----------     ------------
                                  (892)           (599)         (2,177)
                            -------------      ----------      -----------
Cash outflow before                                       
management of liquid                                    
resources and                                           
financing                       (5,080)          (3,861)       (11,462)
Management of liquid                                      
resources
Cash on short term                                        
deposit                             -               -          (63,462)
                         --------------     -------------   --------------
Net cash outflow after                                    
management of liquid                                    
resources                       (5,080)          (3,861)       (74,924)
Financing                                                 
Issue of ordinary                                         
shares                           5,751            5,566         85,854
Expenses paid in                                          
connection with share                                   
issues                             -                 -          (9,325)
Redemption of debt               (288)           (1,188)          (900)
                           -------------      -----------     -----------
Net cash inflow from                                      
financing                       5,463             4,378              -
                           ------------       ---------       -----------
Increase in cash                  383               517            705
                          =============      =============   =============


Notes to the Interim Financial Statements

1. Basis of preparation

The consolidated financial statements have been prepared in conformity with
accounting principles generally accepted in the United Kingdom (UK GAAP),
under the historical cost convention, and in accordance with applicable
accounting standards. The accounting policies are consistent with those
adopted in the Initial Public Offering prospectus and prior year financial
statements except for those identified below.

2. Earnings per share

Comparative earnings per share figures for the nine months ended June 30, 1999
have been restated to reflect the Company's effective 3-for-1 share split in
January 2000 and calculated in accordance with FRS14.

3. National Insurance on stock options

Full provision is made on the grant of employee share options for any National
Insurance liability in accordance with ASB practice note 162, which may be
incurred on a gain in the Company's share price. This provision is revised to
take account of the movement in the company's share price at each reporting
date.

4. Reconciliation of operating loss to net cash outflow from operating
activities

                                  30 June 1999      30 June 2000
                                    ----------      ------------
                                         #000s             #000s
                                                
Operating loss                         (4,155)          (15,084)
Depreciation charges                      341               642
Expenditure paid by the issue of          268               467
shares
Deferred compensation expense               0             2,705
Increase in debtors                      (733)           (2,647)
Increase in creditors                     952             3,337
                                         -----------    ----------
Net cash outflow form operating                 
activities                             (3,327)          (10,580)
                                      ============    ===========

5. Reconciliation of movement in net cash flows to movement in net debt

                                                    30 June 2000
                                                   -------------
                                                           #000s
                                                
Increase in cash in the period                              705
                                                
Cash used to repurchase debt                                900
Cash used to increase liquid resources                   63,462
                                                     -----------
Change in net debt                                       65,067
                                                
Net debt as at 30 September 1999                           (791)
                                                
                                                      -----------
Net funds as at 30 June 2000                             64,276
                                                     ============


6. Summary of significant differences between United Kingdom and United States
generally accepted accounting principles

Share option schemes
Under US GAAP (APB No 25, Accounting for Stock Issued to Employees)
compensation expense on variable option plans is calculated as the difference
between the exercise price of the option and the market price at the date of
the exercise of the option. The market price at date of exercise is derived
using the Black Scholes model. Under UK GAAP the compensation expense on
variable option plans is calculated as the difference between the exercise
price of the option and the market value at the date of granting the option.
Under both methods the compensation expense is recognised over the vesting
period as the options are issued in exchange for future services.

Advertising acquired with stock warrants
In connection with the Hollinger financing on November 24, 1998, the company
agreed to issue 1,613,344 ordinary shares in exchange for advertising service
totalling #1,000,000. The fair value of the shares was #3,371,889, as
determined by reference to an independent valuation of 70 pence per share.
This results in an additional charge of #2,371,889 under US GAAP. In the
period ended June 30, 2000 advertising services with an invoice cost of
#467,000 (#268,000) were provided to the Group, and recorded in the financial
statements as expenses under UK GAAP. Under US GAAP, expenses totalling
#1,108,000 (#636,000) should be recorded for that period based on the fair
market value of the shares to be issued on the date the services are provided
as specified by EITF 96-18.

Interest expense
Under US GAAP, additional interest expense of #270,520 has been recorded for
the difference between the conversion price and the fair market value of
shares issued to holders of convertible loan stock. This difference represents
a 20% discount from the per share amount paid on November 24, 1998 by
Hollinger Digital Inc. in order to incentivise the convertible bond holders to
approve the Hollinger Digital, Inc. financing. Under UK GAAP, no expense is
recorded in relation to this discount.

National Insurance
Under UK GAAP, a full provision is made for the national insurance liability
on all unexercised options granted after 5 April 1999 in accordance with ASB
practice note 162.  Under US GAAP, the provision for this liability has been
accrued over the vesting period of the options in accordance with best
practice in the US.

7. Reconciliation of movement in shareholders' (deficit)/funds
                                                             As at
                                                      30 June 2000
                                                     -------------
                                                             #000s
Opening shareholders' deficit                              (1,408)
                                                   
Shares issued prior to IPO                                  8,300
IPO proceeds                                               78,000
IPO costs offset against share premium                    (10,282)
Write back of deferred compensation expense                 2,705
Loss for the period                                       (13,389)
                                                   --------------
Closing shareholders' funds                                63,926
                                                     ============

8. Effect on net profit/(loss) of difference between UK and US GAAP
                                                                  
                                     Nine months       Nine months
                                           ended             ended
                                    30 June 1999      30 June 2000
                                     -----------    --------------
                                           #000s             #000s
                                                      
Loss on ordinary activities before                    
taxation under UK GAAP                   (4,090)          (13,389)
US GAAP adjustments:                                  
Interest expense                           (271)                0
Share compensation expense                 (171)          (10,268)
National Insurance                            0               117
Advertising purchased with stock                      
warrants                                   (636)           (1,108)
                                      ------------      -----------
Loss on ordinary activities before                    
taxation under US GAAP                   (5,168)          (24,648)
                                      ===========       ============
Weighted average shares outstanding                   
adjusted to reflect 13 January 2000                  
bonus issue                          71,082,387       133,428,492
                                                      
Net loss per ordinary share (p)                       
basic and diluted under US GAAP                      
(APB 25) adjusted to reflect 13                      
January 2000 bonus issue                   7.3              18.5
                                         ==========        ==========

9. Shareholders funds/deficit
                                             As at           As at
                                           30 June         30 June
                                              1999            2000
                                         ---------      ----------
                                             #000s           #000s
                                                         
Shareholders' funds/(deficit) reported                   
under UK GAAP                                 362           63,926
US GAAP adjustments *                           0              117
                                            ---------       --------
Shareholders' funds/(deficit) in                         
conformity with US GAAP                       362           64,043
                                            ======          =======
Total assets under US GAAP                  2,431           72,393
                                            ======          ========

* The only difference between UK GAAP and US GAAP affecting
shareholders funds relates to the National Insurance provision. In
all other instances there was no effect on shareholders funds as
these differences resulted in recording an increase to expense and
a corresponding increase to additional share premium account.

10. Statement of cashflows under US GAAP
                                                                  
                                             As at           As at
                                      30 June 1999    30 June 2000
                                      ------------    ------------
                                             #000s           #000s
                                                      
Net cash provided by operating                        
activities                                 (3,262)          (9,285)
Net cash used in investing activities        (599)          (2,177)
Net cash provided by financing                        
activities                                  4,378           75,629
                                         ---------       -----------
Net increase/(decrease) in cash and                   
cash equivalents                              517           64,167
                                        ===========     ===========
Cash and cash equivalents at                          
beginning of year                            (275)             109
                                         ===========     ==========
Cash and cash equivalents at end of                   
period                                        242           64,276
                                         ==========      =============



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