NTY Network Tech.

RNS No 3179r
NETWORK TECHNOLOGY PLC
10 September 1999

                    Chairman's Statement

                                         10th September 1999
                                                            
This  has  been  the most difficult trading  period  in  our
history  as a public company  There are two reasons for  the
losses  that we have incurred during the period  covered  by
this report, namely the period from 1st October 1998 to 31st
March 1999.

Firstly,  the  Japanese market for our  printservers  turned
down  to virtually 10% of its original size compared to  the
previous year, which fell far short of our own expectations,
and,  secondly, the level of investment made for the further
development of the CD/DVD based Data Storage Server product,
which following the change in accounting policy last year is
now  fully  written off in the year in which it is incurred.
As  a  direct result we had to issue several profit warnings
during this time.

The final figures show that we incurred unaudited losses  to
the  tune  of   #2.5  million after tax  in  the  half  year
September 98 to March 1999.  In order to allow us to account
for tax due and tax losses in the period we have changed our
financial  year-end to March.  The loss per  share  was  6.9
pence.

The groups ability to continue trading as a going concern is
dependent  on  the  continued support of its  bankers.   The
directors  are  negotiating  with  the  bankers  for   their
continued  support and to raise additional finance  to  fund
the  activities  of the group.  Our auditors have  indicated
that  without  the resolutions of these uncertainties  their
report will refer to this situation.

In May this year I have taken over as Executive Chairman and
requested  Hanne  Bollmann to take  responsibility  for  the
finances.  We have since restructured the Board as  well  as
all other aspects of the operations in the various companies
to  adjust the cost of sales to the level of sales that  can
be achieved at this time.

The strategy to bring the Data Storage Server to market will
continue  and I expect the benefits of this to show  in  the
first  half of the year 2000. Delays in companies purchasing
patterns  due  to  the  year 2000 fears  especially  in  the
banking and insurance sector was initially not factored into
our  forecasts which led us to believe that an upturn  could
be achieved in the second half of 1999.  We have now brought
the  Storage Server technology to a mass-manufacturing state
and  will  be  ready  to  fill the  demand  as  soon  as  it
materializes.

We  further believe that we understand our markets very well
and  have  a significant technology with our Storage  Server
product  and  the Software that we created for  the  Storage
Server  to  provide turn key solutions to a wide variety  of
applications.  We are therefore well placed to take  a  part
of  the  near-line  storage  and HSM  (Hierarchical  Storage
Management) systems market.

Chairman
Klaus Bollmann

Network Technology PLC
Preliminary figures for the 6 months ended 31 March 1999


                                              6 months        Year
                                                    to       ended
                                               31.3.99     30.9.98
                                           (unaudited)   (audited)
                                                                  
Net turnover (#'000)                             4,970      18,203
                                                 =====       =====
Profit / (Loss) before tax (#'000)              -2,947       1,012
                                                 =====       =====
Tax credit / (Charge) (#'000)                      470        -642
                                                 =====       =====
Profit / (Loss) after tax (#'000)               -2,477         370
                                                 =====       =====
Rate of dividend (pence per share)                   0        1.10
                                                 =====       =====
Amount of Dividend (#'000)                           0         396
                                                 =====       =====
Earnings per share (pence per share)             -6.85        1.03
                                                 =====       =====
                                                                  
END

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