RNS Number:9734H
Project Telecom PLC
26 February 2003

                                 Press Release

                          Wednesday, 26 February 2003

           10th successive year of profits growth for Project Telecom



Financial highlights (figures in #millions)


Year ended 31 December                                                 2002         2001

Turnover
     -  Continuing                                                    130.2         89.0          +46%
     -  Discontinued                                                  185.1        240.9
     -  TOTAL                                                         315.3        329.9

Operating profit (pre-goodwill amortisation & exceptional items)
     -  Continuing
     -  Discontinued                                                   14.1          8.5          +66%
     -  TOTAL                                                           1.9          3.3
                                                                       16.0         11.8          +35%

Goodwill                                                               (3.8)        (2.9)
Operating profit                                                       12.2          9.0          +36%
Exceptional items (includes loss on closure of
discontinued activities)                                               (0.3)         0.1
Net interest                                                            0.6          0.9
Profit before taxation (after exceptional items)                       12.5          9.9          +26%
Basic earnings per ordinary share (pence)                              3.41         2.79          +22%
Dividend per share (pence)                                             0.78p*       0.65p         +20%


* Includes the proposed final dividend of 0.48p to be approved at AGM 25/4/03


     *  Profit before taxation for 2002 (after exceptional items) up by 26%.

     *  Corporate Services division achieved strong organic growth in a 
        challenging market environment.

     *  Retail Services division successfully closed at less than half the cost 
        anticipated in the interim statement.

     *  Signed strategic distribution and customer management agreement with 
        Energis - an important step to building a significant fixed line
        customer base

     *  Completed #6m investment in building a new customer management centre in 
        Newark and installing a state-of-the-art billing and customer management 
        platform scheduled to go live during first half of 2003.

     *  Strong financial position with net cash of #14.2 million at year end.


Chief Executive, Tim Radford said:

"Project Telecom's management has set ambitious targets for the next three years
during which we plan to establish a clear lead in our chosen market of providing
telecom services to businesses.  We have invested heavily in our infrastructure,
our people and our systems and are now well positioned to achieve further strong
growth.  We are excited by the opportunities that await us and look forward to
the future with considerable confidence."



For further information contact:

Tim Radford
Chief Executive, Project Telecom
Tel: 07831 642911

Richard Cunningham
Finance Director, Project Telecom
Tel: 07785 707070

Simon Bloomfield
Partner, Bankside Consultants
Tel: 020 7444 4140
Mobile: 07771 758517




Full text of 2002 preliminary results announcement follows

Chairman's Statement

Introduction

I am delighted to report a very successful year for Project Telecom. The Group
has delivered another set of outstanding financial results, reflecting our
proven strategy of focusing on the business telecommunications market and the
development of our virtual network and customer management platform.

2002 has been a significant year for the Group. During the year the Board
decided that the Group should concentrate on the further development of the
Corporate Services division . This resulted in the withdrawal from the
distribution of prepaid vouchers and handsets and the closure of the Group's
Retail Services division, a high turnover but low margin business. This
difficult decision resulted in considerable operational challenges for the
business which, I am delighted to report were executed efficiently, with costs
associated with the withdrawal well within the management's expectations.

This decision leaves the Group focused on the business market, developing its
channels to market and its services to customers. During a period when the
telecommunications industry continues to go through considerable structural and
technological change, I believe Project Telecom is well positioned to ensure it
continues to take full advantage of the opportunities that arise.

The further growth of its customer base and the development of the services sold
to them remain the key to the continued success of the Group. In addition the
Group continues to deliver the highest levels of customer service that
differentiates Project Telecom in a highly competitive market place.

Results and dividend

Turnover for the year to 31 December 2002 fell by 4.4% to #315 million (2001 -
#330 million), reflecting the closure of Retail Services during the second half.
Continuing operations grew strongly with turnover up 46% to #130 million (2001 -
#89 million) and operating profit, before goodwill amortisation and exceptional
items, up 66% to #14.1 million (2001 - #8.5 million). Group profit before tax
was up 26% to #12.5 million (2001 - #9.9 million). Basic earnings per share rose
22% to 3.41 pence (2001 - 2.79 pence)

Following the closure of Retail Services the shape of the Group has changed
materially and reflects the continuing development of the core Corporate
Services division.  Although the Group has lost substantial revenue and negative
working capital from Retail Services, the division's contribution to operating
profits was marginal and declining.  Looking forward, the Board believes the
Group is strongly positioned to develop its telecommunication services into the
business market.

The Group incurred an exceptional charge of #0.3m largely associated with the
closure of Retail Services.  The exceptional costs were well under management's
previously announced expectations as a result of successfully realising the
stock and collecting the outstanding debts of Retail Services.

In light of these results the Board recommends a final dividend of 0.48 pence
per share making a total for the year of 0.78 pence (2001 - 0.65 pence per
share). Subject to approval by shareholders, the final dividend will be paid on
30 May 2003 to shareholders on the register at 17 April 2003.

I would like to thank all of our staff for helping to deliver another set of
excellent results.

Board Changes

Patrick Radford has indicated that he does not wish to stand for re-election at
the AGM and has decided to retire.  I would like to express my appreciation for
Patrick's support and advice over the last few years and on behalf of all our
shareholders to thank him for the significant contribution that he has made in
the development of the business over the last 12 years

To replace Patrick, I am delighted to welcome Peter Godfrey to the Board. Coming
from a background of banking and financial services, Peter brings a wealth of
experience and a strong track record in business to business marketing and
customer relationship management that will be invaluable to Project Telecom as
it enters the next phase of its development.

Outlook

The Board is excited by the growth prospects for the Group and is confident that
our decision to focus on the core business and to concentrate on the growth of
our customer base is the right strategy and will create significant value. We
will continue to look for growth opportunities and to extend our service
proposition.

In the first half of 2003 we will invest significantly in growing the business.
We are expanding our sales and distribution capabilities and we are in the
process of implementing a new billing and customer management system which will
accommodate significant future growth.

Although market conditions remain challenging these investments will position
the Group to achieve continued growth.


Philip Rogerson
Chairman



Chief Executive's Statement

Introduction

2002 was another year of growth and development for Project Telecom. In
difficult market conditions the Group has delivered another set of excellent
results demonstrating the success of our strategy to service the
telecommunications requirements of the business customer.

Strategy

Our strategy remains consistent.  Project Telecom continues to develop as an
independent virtual network operator investing in customer relationships rather
than network infrastructure. We deliver to our customers an expanding range of
telecommunications services from a single platform and the highest levels of
customer service available in the industry today.

Operational Review

Corporate Services

The Corporate Services division had another excellent year as we focused on
expanding our market share in the corporate and small business market for the
provision of wireless voice and data services.

Turnover for the year rose 39% to #121.8 million (2001 - #87.7 million) and
operating profit post goodwill amortisation rose by 70% to #10.8 million (2001 -
#6.3 million)

We have continued to expand the business through strong organic growth and
selective acquisition and, as a result, the mobile customer base grew to over
185,000 at the year end (2001 - 138,000). The continued growth of our customer
base remains a key objective as we seek to expand further our market share.

Our continued success in growing our customer base reflects our focus on
supplying services to the business user and concentrating on high quality, high
spending business accounts which demand excellent levels of customer service and
support.

The development of our sales and distribution strategy has seen us expand our
direct sales and account management teams regionally as we have extended our
geographic reach into new business markets. This regional expansion will
continue as we seek to grow further our sales and account management resource.

In April the Group announced the acquisition of TW Telecom Limited. This long
established business, based in Manchester, supplies telecommunication services
to business customers in the North West and provides us with an ideal platform
from which to expand into this area.

In July the Group announced the acquisition of Ternhill Communications Limited,
an award winning business-focused mobile communications dealership based in
Shrewsbury.

Both these acquisitions, which are consistent with our strategy of extending our
geographic reach and growing our market share, have been successfully
integrated.

During 2002, the business has also been developing alternative routes to market
through indirect business partners. We expect this new sales channel to make a
significant contribution to the future growth of the business and following the
closure of Retail Services, Chris Tombs has taken responsibility for developing
this part of the business.

At the start of 2002 we created a specialist wireless solutions team and
technical support resource to address the growing demand for increasingly
complex wireless data services. During the year this team grew in size as we
responded to the growing demand from our customers for data services and at the
year end we had installed wireless data applications to over 50 of our
customers.

The delivery and integration of wireless data services is a very exciting area
of opportunity and we intend to remain at the forefront of its development. As
demand grows for business applications running over the wireless networks, our
customers are increasingly consulting us with a view to developing wireless data
strategies of their own that will deliver improved levels of service and
performance to their businesses.

The development of a broader range of telecommunications services is imperative
if we are to meet our objectives with regard to building profitability and
further reducing churn.

We now have an extensive range of fixed line voice and data services to add to
the list of mobile services that we supply and we will continue to develop this
menu as new services emerge. One of our key priorities during 2003 is to start
to drive the sales of these services into our existing customer base and make it
a core part of our proposition to new customers.

In February 2003 we signed a strategic distribution and customer management
agreement with Energis.

Under this agreement the business will take over the management and customer
billing of a number of small business customers currently utilising the Energis
network.  In addition, Project Telecom will take over the management and supply
of fixed line voice and data services to a quantity of "business to business"
resellers utilising the Energis Network.

Our strategy for growth over the next three years includes a significant
expansion in the fixed line voice and data services that we supply. The
agreement with Energis is an important step to delivering our planned growth in
this area. It recognises the excellent service Project Telecom delivers to
smaller businesses and the value of our customer relationships within the
corporate sector.

Our objectives for this business are very clear. We must continue to expand both
in terms of the number of customers we supply and also the range of services
that we supply to them. At the same time we must continue to deliver world-class
customer service.

Retail Services

In August we announced our decision to close our Retail Services division and
concentrate on the further expansion of the Corporate Services business.

At the end of September we ceased taking new orders for prepay vouchers and
closed our distribution centre in Newark. Following the closure the customer
list and certain items of stock were sold which has enabled our customer base to
enjoy continuity of supply.

At the year end the outstanding stock had been liquidated at no cost to the
business and the debtor book had been substantially collected.

The Group continued to develop its estate of electronic top-up terminals during
the year and at the year end approximately 3,200 terminals had been installed.
This business is now profitable but following the closure of the Retail Services
division and our exit from the prepay market has become non-core to continuing
operations.

Customer Service

We have continued to invest heavily in our ability to deliver excellent customer
service.

In August we opened our new customer management and call centre facility
adjacent to our existing site in Newark. This development provides us with much
needed space to grow our customer management operation as well as provide us
with excellent in-house staff training facilities.

In addition, in 2003 we will be installing a new customer management and billing
platform to ensure that our systems have the capacity and functionality to keep
track with the expected further rapid growth in the customer base and the
broader range of services that we will be supplying.  The integration of this
new system will be key to driving further operational benefits from the business
and helping us to cut the cost of managing our customer base while at the same
time greatly improving the service levels available to them.

The new system, which has cost the Group approximately #3 million, is scheduled
to go live during the first half of 2003.

Our People

I would like to pay tribute to all our staff who have contributed to another set
of excellent results.  The Group employed 553 staff at 31 December 2002 (31
December 2001 - 540) and I would like to thank them all for their valuable
contribution.

I've always said that Project Telecom people are some of the best in the
business and our results confirm my belief in this statement.

Outlook

I am confident that the outlook for Project Telecom remains very exciting. Our
decision to close Retail Services has allowed us to focus on the development of
our Corporate Services business and we have set ourselves some ambitious growth
objectives to achieve over the next 3 years. We have invested heavily in our
infrastructure, our people and our systems and are now well positioned to
achieve further strong growth.

We are excited by the opportunities that await us and look forward to the future
with considerable confidence.  I anticipate another year of further growth and
development for the Group.


Tim Radford
Chief Executive
Financial Review



Group revenue for the year to 31 December 2002 was #315.3 million a decrease of
4.4% on the previous year (2001 - #329.9 million).  Group revenue for the year
from continuing operations was #130.2 million an increase of 46% on the previous
year (2001 - #89.0 million).

The Group continued to produce strong organic growth in its core business and
successfully withdrew from the distribution of prepaid mobile phone vouchers and
handsets.  Group operating profit (pre-exceptional items and amortisation of
goodwill) totalled #16.0 million an increase of 35% over 2001 (2001 - #11.8
million).  Exceptional costs were #0.3 million.  The Group produced pre-tax
profits of #12.5 million an increase of 26% on 2001 (2001 - #9.9 million).

The operating profit pre-exceptional items and amortisation of goodwill has been
given as, in the opinion of the directors it presents a better like for like
comparison of the earnings of the Group between the relevant periods.

Continuing and Discontinued Operations

Discontinued operations comprise the distribution business engaged in
distributing vouchers and handsets and the small number of retail shops.  The
customer list of this business was sold, offsetting redundancy costs and fixed
asset write-downs.  The net exceptional cost from closure of this business
amounted to #0.3 million.

Turnover for the year from continuing operations (excluding acquisitions) was
#123.9 million an increase of 39%, demonstrating the Group's continuing strong
organic growth.

Operating profits (pre-exceptional costs and goodwill amortisation) from
continuing operations was #14.1 million an increase of 66% (2001 - #8.5
million).

Interest

Net interest received during the year was #0.6 million, lower than the previous
year (2001 - #0.9 million).  This reflects the lower cash balances during the
second half due to the #2.6 million cash consideration on two acquisitions and
the withdrawal from the prepaid voucher and handset business and the associated
unwinding of the negative working capital position in the Retail Services
division.

Goodwill Amortisation

There was a #3.8 million charge for the amortisation of goodwill during the year
of which #0.4   million related to the goodwill on the acquisitions of T W
Telecom Ltd and Ternhill Communications Ltd.  No additional write-down of
goodwill was made in respect of previous acquisitions.

Exceptional Items including loss on Closure of Discontinued Activities

Exceptional costs arose from the withdrawal from distributing prepaid mobile
vouchers and handsets and the closure of a small number of retail outlets.
Exceptional costs included fixed asset write-offs and redundancy costs and were
offset by the proceeds from the sale of the Retail Services customer list.   The
Company has provided for the National Insurance Contribution liability arising
on certain unapproved share options outstanding at 31 December 2002.  In
addition exceptional costs were incurred with the closure of
Mobiles4Business.com Ltd a fully owned subsidiary of Ternhill Communications
Ltd.  Net exceptional costs were #0.3 million.

Shareholders Funds

Shareholders funds increased by 21% from #28.2 million to #34.2 million due to
#5.8 million of retained profits and #0.2 million from the issue of an
additional 3 million shares which were issued during the year upon the exercise
of two replacement options together with shares issued as part of the
consideration for the acquisition of Ternhill Communications Ltd.  The number of
ordinary shares in the company in issue increased to 221,786,679.

Cash Flow

The Group had net cash funds at the end of the year of #14.2 million, a decrease
of #17.4 million. This cash outflow was due to the unwinding of the working
capital within the Retail Services division.  Following the successful
collection of the Retail Services debtors, the realisation of the outstanding
stock and the settlement of the creditors associated with vouchers and handsets,
Retail Services experienced a cash outflow of #21.1 million, in line with
expectations.

Capital Expenditure

In addition to managing the working capital movement with Retail Services the
Group incurred, as anticipated, a relatively high level of capital expenditure
during 2002 of #5.2 million (2001 - #2.8 million).  This expenditure was largely
incurred in the completion of Phase III of Brunel Park and the implementation of
a new Billing and Customer Management System.  Both these developments are
designed to ensure the Group is well positioned, with appropriate physical and
systems infrastructure, to manage its future growth.  Capital expenditure during
2003 is expected to fall substantially.

Acquisitions

During 2002 the Group purchased two companies, TW Telecom Ltd in Manchester and
Ternhill Communications Ltd in Shrewsbury for a total consideration of #2.8m.
Both these acquisitions have been successfully integrated into the Group with
customer services, billing and logistics now operating from Newark.

Accounting Policies and Standards

The accounting policies of the Group are laid out in the Group's financial
statements.  The Group is committed to ensuring transparency of its accounting
policies and adoption of changes in accounting standards and rules.  With this
in mind it is working towards the adoption of the new International Accounting
Standards (IAS).

Pensions

The Group contributes to certain employees personal pensions.  It does not
operate a defined benefit pension scheme.

Treasury Risk Management

Treasury activities are managed at Group level under the policies and procedures
approved and monitored by the Board.  The Group has no foreign exchange
exposure, as all of its purchases and sales are currently in sterling.


Richard Cunningham
Group Finance Director





CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended 31 December 2002

                                                                    Note           2002         2001
                                                                                   #000         #000
Turnover                                                               1
Continuing operations                                                           123,855       88,953
Acquisitions                                                                      6,338            -
                                                                           ------------  -----------
                                                                                130,193       88,953
                                                                           ------------  -----------
Discontinued operations                                                         185,124      240,912
                                                                           ------------  -----------
Total turnover                                                                  315,317      329,865
Cost of sales                                                                 (276,344)    (296,189)
                                                                          ------------- ------------
Gross profit                                                                     38,973       33,676
Administrative expenses
Other                                                                          (23,038)     (21,842)
Exceptional item                                                       3             54           78
Amortisation of goodwill                                                        (3,801)      (2,923)
                                                                          -------------  -----------
Total administrative expenses                                                  (26,785)     (24,687)
                                                                          -------------  -----------
Total operating profit
Continuing operations                                                            10,225        5,634
Acquisitions                                                                         99            -
                                                                          -------------  -----------
                                                                                 10,324        5,634
                                                                          -------------  -----------
Discontinued operations                                                           1,864        3,355
                                                                          -------------  -----------
                                                                                 12,188        8,989
Loss on closure of discontinued activities                             4          (335)            -
Interest payable and similar charges                                              (165)        (214)
Interest receivable and similar income                                              775        1,102
                                                                          -------------  -----------
Profit on ordinary activities before taxation                                    12,463        9,877
Tax on profit on ordinary activities                                            (4,932)      (3,789)
                                                                          -------------  -----------
Profit on ordinary activities after taxation                           2          7,531        6,088
Dividend                                                               2        (1,742)      (1,421)
                                                                          -------------  -----------
Retained profit for the year                                                      5,789        4,667
                                                                          =============  ===========
Basic earnings per ordinary share                                      5          3.41p        2.79p
Diluted earnings per ordinary share                                    5          3.29p        2.67p
Earnings per ordinary share before exceptional items and               5
amortisation of goodwill
                                                                                  5.22p        4.11p
Earnings per ordinary share before exceptional items                   5          3.50p        2.77p
                                                                          =============  ===========


There are no recognised gains or losses or movements in shareholders' funds
other than the results for the year and prior year and the issue of shares.
Movements in shareholders' funds are shown in note 2.





BALANCE SHEETS
At 31 December 2002
                                                                                   GROUP          GROUP
                                                                                    2002           2001
                                                                                    #000           #000
Fixed assets
Intangible assets                                                                 13,328         14,606
Tangible assets                                                                   12,833          9,663
                                                                              ----------     ----------
                                                                                  26,161         24,269
                                                                              ----------     ----------
Current assets

Stock                                                                              1,252         11,164
Debtors: amounts falling due within one year                                      28,208         34,436
Debtors: amounts falling due after more than one year                              6,969          4,618
Cash at bank and in hand                                                          14,235         31,650
                                                                              ----------     ----------
                                                                                  50,664         81,868
Creditors: amounts falling due within one year                                  (40,084)       (74,763)

                                                                              ----------     ----------
Net current assets                                                                10,580         7,105

                                                                              ----------     ----------
Total assets less current liabilities                                             36,741         31,374

Creditors: amounts falling due after more than one year                          (1,845)        (2,184)
Provision for liabilities and charges                                              (648)          (957)
                                                                              ----------     ----------
Net assets                                                                        34,248         28,233
                                                                              ==========     ==========
Capital and reserves

Called up share capital                                                              554            546
Share premium account                                                             17,651         17,622
Other reserves                                                                       189              -
Profit and loss account                                                           15,854         10,065
                                                                              ----------     ----------
Total equity shareholders' funds                                                  34,248         28,233
                                                                              ==========     ==========





CONSOLIDATED CASH FLOW STATEMENT
At 31 December 2002

                                                                                           2002                    2001
                                                                    Note       #000        #000        #000        #000

Net cash (outflow)/ inflow from operating activities                   6
                                                                                        (2,634)                  35,513
Returns on investments and servicing of finance
Interest received                                                               775                   1,102
Interest paid                                                                 (117)                   (132)
Interest element of finance lease rental payments                              (48)                    (82)
                                                                         ----------              ----------
Net cash inflow from returns on investments and servicing of                                610                     888
finance
Taxation
Corporation tax paid                                                        (5,486)                 (3,134)
                                                                         ----------              ----------
Tax paid                                                                                (5,486)                 (3,134)
Capital expenditure
Payments to acquire tangible fixed assets                                   (5,238)                 (2,769)
Receipts from sales of tangible fixed assets                                    122                      44
                                                                         ----------             -----------
Net cash outflow from capital expenditure                                               (5,116)                 (2,725)
Acquisitions and disposals
Purchase of subsidiary undertakings                                         (2,646)                       -
Net cash acquired with subsidiary undertakings                                  172                       -
Adjustment to purchase price of previously acquired business                    101                       -
undertaking
Sale of business                                                              (335)                       -
Purchase of business undertakings                                                 -                (17,842)
                                                                         ----------             -----------
                                                                                        (2,708)                (17,842)
Equity dividends paid                                                                   (1,551)                 (1,156)
                                                                                     ----------             -----------
Net cash (outflow)/ inflow before financing                                            (16,885)                  11,544
                                                                                     ----------             -----------
Financing                                                              7
Issues of shares                                                                 75                      16
Repayment of loans                                                            (116)                   (131)
Capital element of finance lease rentals                                      (489)                   (529)
                                                                         ----------              ----------
Net cash (outflow) from financing                                                         (530)                   (644)
                                                                                     ----------             -----------
(Decrease)/ increase in cash                                                           (17,415)                  10,900
                                                                                     ==========             ===========

It is not practicable to further separate the cash flow contributed by the
acquisitions and the discontinued activities





NOTES TO THE ACCOUNTS
At 31 December 2002


1.  Segmental Analysis
                                                                                               2002            2001
                                                                                               #000            #000
Turnover

Corporate services
Continuing operations                                                                       115,462          87,706
Acquisitions                                                                                  6,338               -
                                                                                        -----------     -----------
                                                                                            121,800          87,706
                                                                                        -----------     -----------
Retail services
Continuing operations                                                                         8,393           1,247
Discontinued operations                                                                     185,124         240,912
                                                                                        -----------     -----------
                                                                                            193,517         242,159
                                                                                        -----------     -----------
                                                                                            315,317         329,865
                                                                                        ===========     ===========
Profit before tax

Corporate services operating profit
Continuing operations                                                                        14,461           9,263
Acquisitions                                                                                     99               -
                                                                                        -----------     -----------
                                                                                             14,560           9,263
                                                                                        -----------     -----------
Retail services operating profit
Continuing operations                                                                         (489)           (784)
Discontinued operations                                                                       1,864           3,355
                                                                                        -----------     -----------
                                                                                              1,375           2,571
                                                                                        -----------     -----------
Operating profit before exceptional items and amortisation of goodwill                       15,935          11,834
Exceptional item                                                                                 54              78
Amortisation of goodwill
Corporate services                                                                          (3,801)         (2,923)
                                                                                        -----------     -----------
Operating profit                                                                             12,188           8,989

Loss on closure of discontinued activities
Corporate services                                                                             (76)               -
Retail services                                                                               (259)               -
                                                                                        -----------     -----------
                                                                                              (335)               -
                                                                                        -----------     -----------
Net interest receivable                                                                         610             888
                                                                                        -----------     -----------
Group profit before tax                                                                      12,463           9,877

                                                                                        ===========     ===========
Net assets

Corporate services                                                                           28,441          25,632
Retail services                                                                               6,278           5,655
Group                                                                                         (471)         (3,054)
                                                                                        -----------     -----------
Group net assets                                                                             34,248          28,233
                                                                                        ===========     ===========

All turnover and profits originate from activities within the United Kingdom.




Included within acquisitions are the following amounts:

                                                           Ternhill Communications
                                               T W Telecom                 Limited       Mobiles4business
                                                   Limited                    #000           .com Limited

                                                      #000                                           #000
Sales                                                5,686                     652                      -
Cost of sales                                      (4,641)                   (377)                      -
                                               -----------             -----------            -----------
Gross profit                                         1,045                     275                      -
Administrative expenses                              (933)                   (241)                   (47)
                                               -----------             -----------            -----------
Operating profit/ (loss)                               112                      34                   (47)
                                               ===========             ===========            ===========



Included within discontinued activities are the following amounts:

                                                             2002              2001
                                                             #000              #000

Sales                                                     185,124           240,912
Cost of sales                                           (180,560)         (231,986)
                                                   --------------    --------------
Gross profit                                                4,564             8,926
Administrative expenses                                   (2,700)           (5,571)
                                                   --------------    --------------
Operating profit                                            1,864             3,355
                                                   ==============    ==============


2.  Reconciliation of Movements in Shareholders' Funds
                                                            Group             Group

                                                             2002              2001

                                                             #000              #000

Profit for the financial year                               7,531             6,088
Net proceeds from the issue of shares                         226                16
Dividend                                                  (1,742)           (1,421)
                                                     ------------      ------------
Net addition to shareholders' funds                         6,015             4,683

Opening shareholders' funds                                28,233            23,550
                                                     ------------      ------------
Closing shareholders' funds                                34,248            28,233
                                                     ============      ============



3.  Exceptional Item
                                                                  2002               2001
                                                                  #000               #000

Credit on National Insurance Contributions on unapproved            54                 78
share options
                                                           -----------         ----------
                                                                    54                 78
                                                           ===========         ==========


The Company has provided for the National Insurance Contribution liability
arising on certain unapproved share options outstanding at 31 December 2002.
The liability has been calculated based on the closing mid-market price at 31
December 2002 of 79p (2001 - 78p).



4.  Loss on Closure of Discontinued Activities
                                                                                    2002         2001
                                                                                    #000         #000

Loss on closure of distribution business in Retail Services                          259            -
Costs related to closure of Mobiles4Business com Limited                              76            -
                                                                             -----------  -----------
                                                                                     335            -
                                                                             ===========  ===========

5.  Earnings Per Share

a.   Basic earnings per share is calculated by dividing profits after tax of
#7,531,000 (2001 - #6,088,000) by the weighted average number of ordinary shares
in issue during the period. The weighted average number of shares in issue was
221,083,608 (2001 - 217,836,713 ).

b.   Diluted earnings per share is calculated by dividing profits after tax of
#7,531,000 (2001 - #6,088,000) by the weighted average number of ordinary shares
in issue on the assumption of conversion of all dilutive potential ordinary
shares.  Dilutive potential ordinary shares comprise the difference between the
number of shares subject to share options and the number of shares that would
have been issued at estimated average fair values in each period. The resulting
adjusted average number of shares was 228,650,908 (2001 - 228,160,377).

c.   Both earnings before amortisation of goodwill and exceptional items and
earnings post amortisation of goodwill and pre-exceptional items are presented
in addition to the basic earnings per share calculated in accordance with FRS 14
since, in the opinion of the Directors, they present a better like-for-like
comparison of the earnings of the Group between the relevant periods.

d.   Basic earnings per share may be reconciled to earnings per share before
amortisation of goodwill and exceptional costs and earnings per share post
amortisation of goodwill and pre-exceptional items as follows:

                                                                                                   2002          2001
                                                                                                      p             p

Earnings per share before amortisation of goodwill and exceptional items                           5.22          4.11
Amortisation of goodwill                                                                         (1.72)        (1.34)
                                                                                            -----------   -----------
Earnings per share post amortisation of goodwill and pre-exceptional items

                                                                                                   3.50          2.77
Exceptional items (including loss on closure of discontinued activities)                         (0.13)
                                                                                                                 0.03
Tax related to exceptional items                                                                   0.04        (0.01)
                                                                                            -----------   -----------
Basic earnings per share - FRS 14 basis                                                            3.41          2.79
                                                                                            ===========   ===========

The calculations of earnings per share are based on the following profits and
numbers of shares:
                                                     Basic                      Diluted
                                                   2002          2001          2002          2001
                                                   #000          #000          #000          #000

Profit for the financial year                     7,531         6,088         7,531         6,088
                                             ----------    ----------   -----------   -----------


                                                                  2002              2001
                                                      Number of shares  Number of shares
Weighted average number of shares:
For basic earnings per share                               221,083,608       217,836,713
Exercise of share options                                    7,567,300        10,323,664
                                                     -----------------  ----------------
For diluted earnings per share                             228,650,908       228,160,377
                                                     =================  ================


6.  Reconciliation of Operating Profit to Net Cash (outflow)/ Inflow from
Operating Activities
                                                                          2002          2001
                                                                          #000          #000

Operating profit                                                        12,188         8,989
Goodwill amortisation                                                    3,801         2,923
Depreciation of tangible fixed assets                                    2,495         2,374
Loss on the sale of fixed assets                                           331           317
Decrease in stock                                                       10,032         6,821
Decrease/ (increase) in debtors                                          5,567       (6,607)
(Decrease)/ increase in creditors                                     (36,739)        20,813
(Decrease) in provisions                                                 (309)         (117)
                                                                   -----------  ------------
Net cash (outflow)/ inflow from operating activities                   (2,634)        35,513
                                                                   ===========  ============


7.  Analysis of Net Funds
                                               At                 Acquisition         Other                 At
                                        1 January        Cash  excluding cash      non-cash   31 December 2002
                                             2002        flow            #000       changes               #000
                                             #000        #000                          #000

Cash at bank and in hand                   31,650    (17,415)               -             -             14,235
Finance leases                              (751)         489            (72)          (18)              (352)
Debt due within one year:
Loan                                        (224)         116               -         (116)              (224)
Debt due after one year:
Loan                                      (1,883)           -               -           116            (1,767)
                                     ------------ -----------     -----------   -----------       ------------
                                           28,792    (16,810)            (72)          (18)             11,892
                                     ============ ===========     ===========   ===========       ============


8.  Accounting Policies

The financial statements have been prepared in accordance with applicable United
Kingdom accounting standards and are consistent with those used in the December
2001 financial statements.



9.  Annual Report and Accounts

The Consolidated Profit and Loss Account, Balance Sheet and Cash Flow Statement
are abridged from the Company's Statutory Accounts, which will be reported on by
the auditors and delivered to the Registrar of Companies in due course. Copies
of the report of the Directors and the audited financial statements for the year 
ended 31 December 2002 will be posted to shareholders on 12th March 2003 and may 
be obtained thereafter from the company's registered office at Brunel Park,
Brunel Drive, Newark, Nottinghamshire, NG24 2EG (Tel: 01636 602500). The results
for the year ended 31 December 2001 are taken from the Group's financial
statements which carry an unqualified auditors' report, did not contain a
statement under S.237(2) or (3) of Companies Act 1985 and which have been filed
with the Registrar of Companies.


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

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