First Day of Dealings on AIM

RNS Number:5658L
March Networks Corporation
27 April 2005

For Immediate Release 27 April 2005

Not for release distribution or publication in whole or in part in or into the
United States, Australia, South Africa or the Republic of Ireland.

MARCH NETWORKS CORPORATION

("March Networks" or "the Company")

First Day of Dealings on AIM & TSX

March Networks, a leading provider of Internet Protocol (IP)-based digital video
surveillance solutions focused on the security industry, is pleased to announce
the commencement of trading in the Company's shares on the AIM of the London
Stock Exchange and the Toronto Stock Exchange.

Shares will commence trading at 14.30 (BST), on Wednesday 27th April 2005 on the
AIM of the London Stock Exchange (under the symbol MNW) and the Toronto Stock
Exchange (under the symbol MN).

At the issue price of 504 pence per share (and before the over-allotment option)
the Company raised #25.2 million (CDN$60 million) before expenses through an
institutional placing of 5,000,000 ordinary shares. On Admission and at the
issue price, the market capitalisation will be approximately #77.3 million
(CDN$184 million).

The Company's comprehensive suite of purpose-built digital video recorders
(DVRs) and network management and application software enables end-users to
capture and manage video and transactional data. The Company's software also
allows the Company and its end-users to perform remote system management and
diagnostics to proactively maintain and upgrade video surveillance systems from
a central location.

March Networks is focused on three key market sectors - banking, retail and
transportation - that it believes offer long-term growth potential. It has
developed sector-specific application software for its target markets to
leverage information collected from third-party equipment such as automated
teller machines, point of sale systems and global positioning system devices.
The Company is also developing video analytics software to address the emerging
market for business intelligence applications as businesses increasingly seek to
integrate and analyze video and data.

Evolution Securities is the Nominated Advisor and Broker to March Networks and
is acting as agent for the Company on the Placing in the UK and RBC Dominion
Securities Inc. and BMO Nesbitt Burns Inc. were joint underwriters for the
offering.

Sir Terence Matthews OBE, Chairman of March Networks, commenting on the
commencement of trading said;

"March Networks has developed a robust and compelling IP-based digital video
surveillance product portfolio, and an impressive list of customers world wide.
I am pleased with what the company has accomplished and I feel confident about
the future business prospects."

Peter Strom, President and Chief Executive said;

"March Networks has achieved an important milestone towards our next phase in
growth. I am delighted to be able to bring this company to the public markets as
a proven and profitable business and look forward to working with the entire
March Networks team as we continue to establish March Networks as a leading
provider of IP-based digital video surveillance solutions."

There will be an analyst presentation at 11am today, where President and Chief
Executive Peter Strom will present the business fundamentals for March Networks.
It will be held at Buchanan Communications, 107 Cheapside, London, EC2 - please
contact James Strong on 020 7466 5000 if you wish to attend.

OFFERING STATISTICS (1)

Offering price (2) 504p
Number of new common shares being issued pursuant to the Offering 5,000,000
Number of existing common shares being sold pursuant to
the Offering 736,850
New common shares being issued pursuant to the Offering
as a percentage of the Corporation's issued common share capital as
enlarged by the Offering 32.62%
Gross proceeds raised by the Offering of new common shares (2) #25,212,203
Estimated net proceeds of the Offering receivable by the Company (2)#22,468,275
Common shares in issue post offering 15,329,745

Notes:

1. These statistics do not take account of any exercise of the over-allotment
option referred to below.
2. Based on exchange rate of CDN$2.3798 to GBP#1 being the Bank of Canada's
daily closing rate as at 20 April, 2005 and rounded up to the nearest whole
figure.

OVER-ALLOTMENT OPTION AND STABILISATION TRANSACTIONS

In connection with the Offering the Underwriters may engage in over-allotment
and stabilising transactions in relation to the common shares. Over-allotment
transactions involve sales in excess of the number of shares made available in
the Offering which create a short position for the Underwriters. Stabilising
transactions involve bids to purchase common shares in the open market for the
purpose of pegging, fixing or maintaining the price of common shares. Such
activities if commenced may cause the price of the common shares to be higher
than it would otherwise be in the absence of such transactions. Such
transactions, if commenced, may be discontinued at any time.

Wesley Clover Corporation and the Company have granted the Underwriters an
over-allotment option, exercisable for a period of 30 days from the date on
which the Offering closes. Under the option the Underwriters may purchase up to
416,667 common shares from Wesley Clover and up to 443,860 common shares from
the Company. To the extent that this over-allotment is exercised, it will be
exercised first to purchase shares from Wesley Clover and the balance, if any,
will be purchased from the Company. The Underwriters may exercise the
over-allotment option in whole or in part. Any shares acquired by the
Underwriters under the over-allotment option will be acquired on the same terms
(save as to timing) as under the Offering, that is to say at the Offering price
payable in cash against delivery of the certificates representing the acquired
shares.

For further details please contact:
March Networks Corporation
Peter Strom, President & Chief Executive On the Day Tel: +44 (0)20 7466 5000
Ken Taylor, Chief Financial Officer Thereafter Tel:+1 613 591 8181

Evolution Securities Limited
Rob Collins / Chris Crawford Tel: +44 (0)20 7071 4300

Buchanan Communications
Bobby Morse / Jeremy Garcia / James Strong Tel: +44 (0)20 7466 5000

The following is a summary of the principal features of this distribution and
should be read together with the more detailed information and financial data
and statements contained in the Prospectus available at www.sedar.com.

Company Overview and History

March Networks is a leading provider of IP-based digital video surveillance
solutions focused on the security industry. The Company's comprehensive suite of
purpose-built digital video recorders ("DVRs") and network management and
application software enables end-users to capture and manage video and
transactional data. The Company's software also allows the Company and its
end-users to perform remote system management and diagnostics to proactively
maintain and upgrade video surveillance systems from a central location.

The Company's sales effort focuses on the banking, retail and transportation
sectors and the requirements of large enterprises within those sectors for
reliable, scalable and centrally managed video surveillance solutions.

March Networks has developed sector-specific application software for its target
markets to leverage information collected from third-party equipment such as
automated teller machines ("ATMs"), point of sale ("POS") systems and global
positioning system devices ("GPS"). The Company is also developing video
analytics software to address the emerging market for business intelligence
applications as businesses increasingly seek to integrate and analyze video and
data.

In 2000, Dr. Terence Matthews, the founder of Newbridge Networks Corporation, a
data networking company, acquired control of the Company and refocused the
Company's business plan to exploit the emergence of broadband-based video
applications. In order to capitalize on the emerging replacement cycle of
industrial analogue video cassette recorders ("VCRs"), Dr. Matthews focused the
Company's networking and video processing expertise on developing an advanced
suite of networked DVRs.

The Company launched its current suite of DVR products in 2002. These products
incorporate advanced video processing software that improves reliability and
optimizes cost savings for the end-user through efficient use of bandwidth and
storage. Since the introduction of its current suite of DVRs, the Company has
achieved significant revenue and unit sales growth, with compound quarterly
revenue growth of 39% over the last six quarters. As of January 31, 2005, the
Company had an installed base of over 10,700 DVRs, of which over 7,800 were
shipped during the last six quarters. The Company believes that it has
established itself as a technology leader in the video security industry and is
well-positioned to capitalize on the growing demand for digital video
surveillance solutions.

Industry Overview

The global security market for products and services has experienced a sharp
increase in investment over the last three years, reaching US$120 billion in
2004 (Jeffrey T. Kessler, Lehman Brothers equity research report, Security
Industry Annual Report 2004). Security equipment is estimated to represent
US$54.8 billion of the global security market and includes products used for a
variety of security applications such as access control, alarm monitoring and
video surveillance.

Advances in technology coupled with heightened security concerns of government
and business since the events of September 11, 2001 have resulted in an
acceleration of the technology replacement cycle of existing video surveillance
systems. DVRs are a fundamental component of new video surveillance systems. The
market for DVR manufacturers was estimated to be US$0.9 billion in 2004 and is
expected to exceed US$3.0 billion by 2010, representing a compound annual growth
rate of 22.1% (World Video Surveillance Equipment Markets, Frost & Sullivan
(2005)).

North America represents the largest DVR market globally with 46% of worldwide
sales in 2004. Europe was the second largest market for DVRs with 34% of
worldwide sales in 2004, while Asia-Pacific and the rest of the world comprised
the remaining 20% of the world market.

The DVR market consists of three primary segments: commercial, government and
residential. The commercial segment includes all corporate and manufacturing
installations, banking, retail, gaming, private healthcare and academic
institutions and represents the largest single segment of the DVR market. The
government segment includes airport and other transportation installations,
office installations, government funded hospitals and public places, such as
city halls.

Key Trends in the Digital Video Surveillance Industry

Convergence of Security and IT

The increasing bandwidth and storage requirements of digital video surveillance
systems operating over enterprise networks, together with network security
concerns, have led to the involvement of IT network professionals in security
decisions. As a result, end-users are demanding that digital video solutions
offer reliability, efficient use of bandwidth and storage, data encryption,
firewall protection and flexibility to expand and add new applications to
address future needs.

The convergence of security and IT network functions is having a fundamental
impact on the video surveillance industry and has posed a challenge to
traditional video equipment vendors who often lack the networking expertise and
product sophistication to meet the requirements of the changing marketplace.
This convergence is creating an opportunity for suppliers with IT expertise to
compete for enterprise end-users.

New Industry Entrants

As demand for video surveillance grows, many large technology corporations are
attempting to capitalize on their networking expertise, customer base and market
presence to enter the security industry. Examples of the types of companies
entering the security industry include:

* Network Service Providers: Many of the leading telecommunication service
providers such as BCE Inc.,BT Group plc and Sprint FON Group have recently
announced initiatives in the security industry with the objective of
generating revenue through network connectivity and managed network
services.

* Network and IT Equipment Providers: Recognizing the growing demand for
networked video, global network equipment providers, including Alcatel,
Cisco Systems Inc., Dell Inc. and Storage Technology Corporation, are
entering the security industry to bundle video equipment, storage servers
and networking equipment.

* Business Systems Integrators: Leading business systems integrators such as
Hewlett Packard Co. and IBM Corp. have announced marketing initiatives in
the video surveillance industry. These companies are targeting enterprise
end-users with complete system solutions consisting of video surveillance,
networking, storage, POS systems and services.

As the security industry becomes increasingly IP-network focused, these new
entrants are focusing on supplying the most advanced digital video surveillance
solutions and are well-positioned to capitalize on emerging digital video
opportunities. Many of these entrants are partnering with leading video
technology companies to leverage their expertise to compete with traditional
security integrators for large projects.

Emergence of Video-Based Business Intelligence

As enterprises strive to gain competitive advantage and improve profitability,
worldwide expenditures on business intelligence tools are expected to increase
from $3.8 billion in 2001 to $7.5 billion in 2006, representing a compound
annual growth rate of 14.6% (International Data Corporation, 2004). Video
captured from the monitoring of premise activity is becoming an important
component of enterprise business intelligence systems. The development of
advanced video analytics software enables the automated, real-time analysis of
video and

data and provides valuable insight into customer and employee activities and
overall operations across many market sectors. Examples of business intelligence
applications using video analytics include:

* ATM and POS transaction capture;
* customer traffic patterns;
* queue/wait time monitoring;
* customer/employee interactions;
* product placement optimization; and
* on-shelf inventory management.

The Company believes that continuing pressures to streamline operations and gain
competitive advantage will further drive demand for video-based business
intelligence. As businesses leverage their investment in digital video
surveillance systems for business intelligence purposes, suppliers that possess
IT infrastructure expertise, knowledge of business needs and advanced software
development capabilities will have a competitive advantage in addressing this
market.

March Networks Target Markets

The Company is focused on three key sectors - banking, retail and transportation
- that it believes offer long-term growth potential. The Company believes that
these sectors are in the early stages of deployment of digital video
surveillance solutions and represent the most significant market opportunities
for the Company.

Banking

Video surveillance is critical to banks for the investigation of fraud and
theft, resolution of ATM transaction disputes and the security of its personnel,
customers and assets. Banks are installing DVRs across their bank branches, ATMs
and cash vaults. With more than 85,000 bank branches and 425,000 ATMs, North
America accounts for approximately 30% of the global opportunity for DVR
deployments in the banking sector. The Company has deployments in three of the
largest five banks in the United States, three of the largest six banks in
Mexico and the largest bank in Canada, as measured by number of locations. The
Company was awarded the Frost & Sullivan Vertical Penetration Award for 2004 in
recognition of its success in the banking sector (World Video Surveillance
Equipment Markets, Frost & Sullivan (2005)).

Retail

Retail enterprises are increasingly using digital video surveillance technology
for loss prevention, risk and litigation management, increased security for
customers and employees and analysis of customer and employee behaviour.
Inventory shrinkage alone resulted in costs to U.S. retailers of over US$33.6
billion in 2003 (2003 National Retail Security Survey, University of Florida).
The retail sector includes department stores, food and drug stores, apparel
retailers, specialty chains, restaurants and convenience store chains. There are
in excess of 1.1 million retail locations in the United States (World Video
Surveillance Equipment Markets, Frost & Sullivan (2005)). The Company is
currently deploying its video surveillance solutions to several large retail
businesses, including one of the largest U.S. retail enterprises.

Transportation

Public safety and litigation are critical concerns in the transportation sector
and are leading to increased adoption of digital video surveillance systems by
transit agencies. The sector comprises public transit, including rail, subway
and buses, freight rail and school buses. The Company estimates that these
agencies operate in excess of 350,000 vehicles in the United States. Video
surveillance systems for the transportation sector must provide reliability in
harsh environments and vehicle tracking capabilities. Growing demand for mobile
video management and real-time access are also increasing the need for mobile
DVRs to interoperate over wireless networks. The Company has successfully
entered the transportation sector with its industry-leading, ruggedised mobile
DVR.

In addition to the Company's success in its target markets, the Company is
deploying its solutions to large enterprises in the following sectors:
government and education facilities, emergency services and other commercial
sectors.

End-Users

The Company's current end-users include some of the largest enterprises within
their respective market sectors. The following is a partial list of the
Company's end-users:
Banco de Chile ADS Fifth Third Bank Sheetz, Inc.
Grupo Financiero Banorte Foodstuffs (Auckland) Ltd. Singapore Mass Rapid Transit
S.A. de C.V. Goodwill International TELUS Corporation
Cadillac Fairview Corporation Industries Inc. US Bancorp
Caminos y Puentes Federales Orange plc Vodafone Group plc
City of Ottawa Royal Bank of Canada Wachovia Corporation
Coborn's, Inc. Sandia National Laboratories
DHL International GmbH San Francisco Municipal
Transportation Authority

The Company provides its products and services to end-users through the
combination of a ''pull-through'' sales strategy and channel partner initiated
sales. This approach enables the Company to meet the requirements of end-users
for turnkey surveillance solutions and to maximize the Company's market coverage
on a cost-effective basis. The Company has assembled a sales team of networking
specialists to identify and target the largest end-user deployment opportunities
for the Company in each of its target sectors, and to provide the Company's
channel partners with technical product-related expertise and sales assistance.
Once selected by an end-user, the Company works with its channel partners to
complete the sale of the Company's products. The Company's channel partners
include leading systems integrators such as Alcatel, ADT Security Services,
Inc., Diebold, Incorporated, Securitas Security Systems USA, Inc. and Siemens
Building Technologies, Inc.

Financial Performance

The Company entered fiscal 2005 with a growth strategy dedicated to its core
business of IP-based digital video surveillance solutions, having completed the
divestment of certain non-core businesses in fiscal 2004. The key goals of this
strategy from a financial perspective were to invest in its pull-through sales
strategy that complements the Company's channel partners in order to secure the
largest deployment opportunities in the banking, retail and transportation
sectors and to generate positive cash flow and operating profit (see "Growth
Strategy" below).

Financial results for the first nine months of fiscal 2005 indicate that the
Company has been successful in accomplishing these goals. Revenue for the first
nine months of fiscal 2005 was $29.2 million compared to $7.6 million for the
first nine months of fiscal 2004. Net earnings in the first nine months of
fiscal 2005 were $3.5 million compared to a net loss before discontinued
operations of $5.5 million in the same period in fiscal 2004. Cash flow
generated by operating activities in the nine months ended January 31, 2005 was
$2.6 million compared to net cash consumed by operations of $5.5 million in the
same period last year. Revenue during the first nine months of fiscal 2005,
which represented 3.8 times the revenue achieved in the same period a year
earlier, was achieved primarily through major end-user contracts in the banking
sector in the United States and Latin America as well as in the retail sector in
the United States. Success with these major end-users was a result of the joint
efforts of the Company's expanded sales team (a new vice president of sales
joined the Company mid-way through fiscal 2004 and three direct sales people
were hired in late fiscal 2004) working together with channel partners.

Nine Months Ended Year Ended April 30
(CDN$'000) January 31
2005 2004 2004 2003 2002
(Unaudited)

Revenue 29,153 7,558 11,788 9,492 9,379

Cost of revenue 14,220 3,845 5,247 7,644 6,266

Gross margin 14,933 3,713 6,541 1,848 3,113

Net earnings (loss) 3,474 (4,209) (4,118) (15,435) (47,415)

GROWTH STRATEGY

The Company's objective is to take advantage of the current technology
replacement cycle to rapidly establish itself as the leading provider of digital
video surveillance solutions to large enterprises within its target sectors, and
to leverage its installed base of DVRs to sell additional software and managed
video network services. The specific elements of its growth strategy are as
follows:

Extend Deployment to Existing End-Users - The Company intends to continue to
focus on its existing end-users to increase its installed base of DVRs. The
Company believes that its largest end-users are in the early stages of long-term
technology replacement programs. These end-users represent a significant growth
opportunity for the Company.

Obtain New Enterprise Accounts - The Company believes that it is well-positioned
to continue its success in its vertical sectors as it targets the largest 100
banks, retailers and transportation authorities worldwide that are at an early
stage in the replacement cycle for video surveillance systems. In addition, the
Company intends to expand its end-user base to large enterprises in other
high-growth market sectors such as government and education facilities,
emergency services and other commercial sectors.

Expand Global Sales and Distribution Capabilities - The Company intends to
leverage its relationships with its channel partners to increase the Company's
global sales and distribution capabilities. In addition, the Company plans to
extend its pull-through sales strategy by significantly expanding its sales and
support operations in North America and selected markets in Latin America,
Europe and Asia-Pacific.

Broaden Software Offering - The Company intends to continue to develop
additional application software and to leverage its experience in video
processing technology to continue to develop video analytics software for
business intelligence purposes. The Company's growing installed base of DVRs
represents an opportunity for the Company to deploy these advanced software
applications to extend the functionality of its end-users' video surveillance
solutions.

Expand Managed Video Network Services - The Company provides advanced, managed
video network services to its end-users, including proactive diagnostic
monitoring and network maintenance. The Company believes that large enterprises
will increasingly outsource the management of their video surveillance systems
as the size and complexity of networks increase. The Company intends to exploit
its network expertise to provide a full range of managed video network services
in order to secure recurring revenue streams for the Company.

Pursue Selective Acquisition Strategy - The Company believes that it can
significantly accelerate its growth through the execution of selective
acquisitions of, or investments in, complementary products, technologies and
businesses. The Company intends to actively pursue selective strategic
acquisition opportunities that it believes will accelerate the development and
deployment of new product and service offerings, enhance its market
opportunities and accelerate the Company's entry into attractive geographical
markets.

This information is provided by RNS
The company news service from the London Stock Exchange
END

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