MXC Mgc Pharmaceuticals Limited

    Immediate Release: Thursday 10 March 2005

                        Matrix Communications Group plc                        

                           (`Matrix' or the `Group')                           

                       AGM, Acquisition & Trading Update                       

At the Annual General Meeting of the Group held today all resolutions were duly
passed.

Chairman's Statement:

Throughout the year your Board has been successful in proving its ability to
source and complete value-enhancing acquisitions that have led to the creation
of a truly unique communications Group focussing on leading-edge technology
solutions. We continue to make good progress and, following a strong first
quarter, have seen continued growth in the second quarter. Following the
successful completion of our initial acquisition strategy we have now defined
three clear trading divisions specialising in the provision of leading-edge
technologies. This has been achieved by subdividing our core businesses into
Integration and Partner Sales and establishing a newly formed division focusing
on Mobile Operator Sales called Fujin Technology. All three will be separately
branded divisions of the Matrix Communications Group.

Looking forward, I expect to see the Group produce organic growth across all
its divisions as we begin to reap the rewards of the newly established Group
divisional structure and of the cross-selling opportunities it creates.
Additionally, I expect to see our Mobile division begin to gain a significant
level of penetration into the mobile telecommunications sector which offers
very significant commercial opportunities for our suite of leading-edge
technologies. Having already secured a number of high-profile and industry
leading contracts, I have every confidence that Fujin Technology can build on
its successes and industry relationships to deliver the potential that we
believe it has.

Acquisition

As announced this morning we have successfully completed the acquisition of the
entire issued share capital of the trading subsidiaries of Harrier Group plc
which are Harrier Zeuros Ltd, Harrier Zeuros Storage Systems Ltd and Ikan Ltd,
for a total cash consideration of �4.5m. The cost of the acquisition is offset
by cash balances of approximately �1.2m within the acquired companies. All
three subsidiaries will become a part of our Integration division. The
remainder of this year will be taken with consolidating their offices,
administration and operational activities and the Directors expect that this
will show substantial rewards in FY2006.

The Harrier businesses generated total revenues of �9.0m and operating profits
of �309,000 in the year ended 2003 and revenues of �6.1m and operating profits
of �172,000 in the first six months of 2004.

Following the acquisition of the Harrier companies, Matrix now has annualised
recurring revenues in excess of �20m.

Harrier provides a range of information protection, assurance and continuation
security services that enable organisations to maximise the value of their
existing IT investment.

Matrix Communications Group Structure

Integration Division - MXC

Peter Drinkwater will spearhead the development of the Fujin Technology
division and will therefore relinquish his role as Managing Director of the
Integration division. David Grant, who will now remain on the Group Board, will
become MD of the Integration division. Last quarter saw David successfully
complete Bedrock Networks earn-out 6 months ahead of plan. Our first quarter
has also seen Decorum Networks successfully complete their earn-out
consideration 3 months ahead of plan.

Of the Group's current �80m revenue run rate the Integration division now
contributes annualised revenues of circa �30m and today we are able to announce
a further three significant customer wins:

The Sheffield College

This �400,000 contract was awarded through the NHS PASA framework and selects
MXC to supply and support a campus wide LAN for the college's new `state of the
art' Hillsborough campus. The implementation, which is scheduled to complete in
May, will provide the college with a highly resilient, high speed network,
which has the capacity to scale with the anticipated growth in voice, data,
video and wireless application usage. The contract has been awarded on a
five-year framework and includes ongoing support and maintenance.

Pembroke and Derwen NHS Trust - Withybush Hospital

Also won through the NHS PASA framework this �330,000 contract demonstrates the
ongoing ability of the Integration Division to effectively implement the
Group's cross-selling model. Under the contract MXC will deliver a high speed,
scalable and resilient 10Gb core network, secured by firewalls and intrusion
detection services. The solution provides for existing and anticipated growth
in the information flow of medical records and imaging such as x-rays
throughout the Withybush Hospital. MXC is deploying Foundry Networks' Fastiron
SuperX range in conjunction with a high level of security supplied through
Netscreen products. The solution is being maintained by MXC support services
team through the 24/7/365 Network Operation Centre under a five-year support
contract.

The Reed Elsevier Group

The Reed Elsevier Group has named MXC as the preferred partner in the UK and
Europe for the deployment of Tipping Point. The announcement was made following
MXC's implementation of Tipping Point's Intrusion Prevention solution,
providing Reed Elsevier with a high-performance, accurate and reliable defence
system, protecting against both internal and external threats.

Francis Beecheno Director of Global IT Alliances at the Reed Elsevier Group
said "MXC have been identified as a preferred partner for network security
requirements because of their extensive pre and post sales knowledge and
experience. Coupled with their strong partnerships with the vendors, MXC is
able to deliver a valuable level of security expertise. "

Partner Sales Division

With the recent acquisition of Equip Technology, this division now contributes
circa �40m to the Group's �80m annualised revenues. Our expectation is that it
will become recognised as the de facto channel to market for leading-edge
technologies and indeed this is borne out by a number of new product
manufacturers that have entered the fold. These include:

Trapeze Networks - a leading wireless local-area networking company that
enables secure access to business applications and services for mobile
workforces.

 

Proofpoint - specialists in security technology to protect enterprise messaging
solutions against the growing threat of malicious attacks through viruses, spam
and spyware.

SurfControl - Equip Technology has been appointed UK distributor for
SurfControl the world leader in enterprise web and email filtering.

Mobile Division - Fujin Technology

One of the great areas of success for the Group in the last 24 months has been
within the mobile operator sector and the Group now has significant customer
relationships with three of the UK's major mobile service providers. It has
shown technology leadership in many areas but in particular within the field of
mobile Internet content filtering.

In recognition of the business opportunities that exist for the Group in this
area we have created a new, third division with a new brand identity that we
will build to exploit the national and international potential in this field.
With budgeted revenue in excess of �10m for the next 12 months and a number of
significant contracts, this division is well set for future growth in an area
of great opportunity for our business. This division will be headed by Peter
Drinkwater, who was responsible for the global contract announced in December
2004.

Alan Watkins

CHAIRMAN

Ian Smith, CEO, commented:

"It gives me great pleasure to report on what has been a defining year for the
Group as a whole. Throughout the period we have been successful in completing a
number of strategic acquisitions as well as organically growing our core
businesses and widening our Partner Sales network of vendor relationships. As
such we have fully established ourselves as Europe's only full services
leading-edge technology specialists. The Group now boasts an end-to-end
leading-edge technology integrator, the industry's leading-edge technology de
facto channel to market Partner Sales division and most excitingly a newly
formed Mobile Operator Technology division.

The decision to create and brand this latest edition to the Group has been led
by the phenomenal success that we have had in supplying leading-edge technology
solutions to the mobile telecommunications industry. As a result of this
success we have not only secured some significant contracts both here in the UK
and on a Global basis, but also established ourselves as a trusted and
preferred supplier to the industry as a whole in which we have matured a number
of commercial relationships. It is my belief that addressing the mobile
communications market presents a significant growth opportunity for the Group
and I look forward to reporting on Fujin's progress in due course.

I would like to take this opportunity to thank everyone in the Group who have
all contributed to a great year."

                                    -Ends-                                     

Further Information:

Ian Smith, CEO

Matrix Communications Group plc: 0870 737 5000

Andrew Tan

Hansard Communications: 020 7245 1100



END

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