NNG Newport Network

    RNS Number : 8451Y
  Newport Networks Group PLC
  11 July 2008
   

    Newport Networks Group PLC (the "Company")


    Trading Update and Strategic Review

    Despite the fact the Company has signed several distribution contracts with major telecommunication suppliers the Directors are
extremely disappointed by recent trading and by the near term business prospects with the Group's current technology. Even though the
Company has been pursuing a long list of potential clients, sales for the first six months of this year were restricted to just maintenance
revenues. Losses for the same period amounted to approximately � 4.3 million. 

    As at this time the expense run rate for the Group has been drastically reduced and the Chairman continues to fund the ongoing
operations through Wesley Clover Corporation's loan facility with the Company. 

    The Board is conducting a review of the prospects for the Company and its technology using an independent expert team funded directly by
the Chairman. This review has revealed that Telecom Service providers and equipment makers are going through a very difficult period -
characterised by intense competition, substantial technology change and delays in decision-making regarding Next Generation Networks (NGN)
and IMS (IP Multimedia Subsystem) deployments. NGN and IMS represent the basis of future broadband-based services and it is this core
network environment that the Newport Networks technology was designed to address. The Company built a large-scale product for these
deployments and continuing rollout delays have left Newport Networks without the revenue levels expected. These delays have also affected
the major telecommunication suppliers who have agreements with the Company. The Directors have instructed the engineering team to
concentrate on a mainly software-based product line, using industry standard computer platforms.

    The independent review of the business for Newport Networks technology has revealed that our Border Gateway is now being challenged by
developments undertaken by the main router vendors, whereby they are indicating to clients that they intend to add this capability to their
existing products. This further undermines the Company's prospects. In addition, the development costs required to stay competitive in the
Session Border Control sector are high.

    The operations continue to be funded through the Wesley Clover Corporation loan facility and the directors are looking for ways to turn
the company around although a further reduction in headcount and spending is inevitable over and above the levels previously announced. The
Board continues to look at all strategic options for the Company one of which could be an offer for the entire issued share capital of the
Company. However, this review is at an early stage and there can be no certainty that an offer for the Company will be forthcoming.   

    Enquiries:
          
 Newport Networks Group PLC               Tel: 01291 435 700  
 John Everard, Chief Executive 
 John Ackroyd, Finance Director  

 Evolution Securities                     Tel: 020 7071 4300
                                           
 Robert Collins/Tim Redfern/Neil Elliot 


    Relevant Securities in Issue
    In accordance with Rule 2.10 of the City Code on Takeovers and Mergers, Newport Networks Group PLC confirms that it has 366,582,833
ordinary shares of 0.1 pence each in issue and is admitted to trading on AIM under the ISIN GB00B00ST620. 

    Dealing Disclosure Requirements 

    Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the 'Code'), if any person is, or becomes, 'interested'
(directly or indirectly) in 1% or more of any class of 'relevant securities' of Newport Networks Group PLC, all 'dealings' in any 'relevant
securities' of that company (including by means of an option in respect of, or a derivative referenced to, any such 'relevant securities')
must be publicly disclosed by no later than 3.30pm (London time) on the London business day following the date of the relevant transaction.
This requirement will continue until the date on which the offer becomes, or is declared, unconditional as to acceptances, lapses or is
otherwise withdrawn or on which the 'offer period' otherwise ends. If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire an 'interest' in 'relevant securities' of Newport Networks Group PLC, they will be
deemed to be a single person for the purpose of Rule 8.3. 

    Under the provisions of Rules 8.1 of the Code, all 'dealings' in 'relevant securities' of Newport Networks Group PLC by a potential
offeror, or Newport Networks Group PLC, or by any of their respective 'associates', must be disclosed by no later than 12.00 noon (London
time) on the London business day following the date of the relevant transaction. 

    A disclosure table, giving details of the companies in whose 'relevant securities' 'dealings' should be disclosed, and the number of
such securities in issue, can be found on the Takeover Panel's website at www.thetakeoverpanel.org.uk . 

    'Interests in securities' arise, in summary, when a person has long economic exposure, whether conditional or absolute, to changes in
the price of securities. In particular, a person will be treated as having an 'interest' by virtue of the ownership or control of
securities, or by virtue of any option in respect of, or derivative referenced to, securities. 

    Terms in quotation marks are defined in the Code, which can also be found on the Panel's website. If you are in any doubt as to whether
or not you are required to disclose a 'dealing' under Rule 8, you should consult the Panel.


    11 July 2008


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