Matrix Communications Group plc

('Matrix' or the 'Group')

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 APRIL 2004

Matrix Communications Group Plc ('Matrix' or 'The Group'), the UK's
communications integrator of choice for leading edge technologies, today
announces its unaudited results for the six months to 30 April 2004.

Highlights

* Turnover up 3,381,000 to 3,697,000

* Gross profit up 1,493,000 to 1,640,000

* Group Pre-tax profit up 822,000 to 550,000 (including minority interests)

* Net Assets up 3,146,000 to 4,473,000

* loss-making satellite communications business sold in January for 30,000

* acquired and successfully integrated three profitable IT companies during
the last 6 months in line with its core strategy

Ian Smith, CEO, commented:

'This has been a defining period for the company and we are delighted to be
reporting on the success we have achieved over the six months. As well
achieving significant organic growth from our existing businesses we have
delivered on our core objective to extend our offering and client base through
acquisition. Over the period we have succeeded in acquiring and integrating a
further three companies into the group, transforming Matrix into the UK's true
integrator of choice. As an enlarged Group we have recently won contracts with
Vodafone, B.A.R Honda and The London Internet Exchange and have engaged in a
number of talks for other exciting contracts. Looking forward, the challenge
for us now is to capture the consolidated cost efficiencies in the enlarged
Group and exploit the numerous cross-selling opportunities that are available
to us through our matured commercial relationships with our present client
base. In this period we have made great progress in turning the company around
and building a solid base of recurring revenues and high margin product mix
with leading blue chip companies. I look forward to reporting to you on our
future progress'


molatovkid - 01 Jun'04 - 07:34 - 173 of 173 edit



Embargoed Release: 07:00hrs Tuesday 1st June 2004

Matrix Communications Group Plc

(`Matrix')

Re Agreement

The Group has concluded heads of terms to acquire a profitable mid-tier
distribution business from the 1st August. This will enable Matrix to continue
to develop its market position and maintain its strong margin growth by
strengthening its key vendor relationships.

As emerging technology segments start to cross over and consolidate, it is very
important that the Group has access to Key Vendor relationships so that 'best
of breed' solutions can be offered to it's customers.

The current annual turnover of the business is 5.5m.

Further Information:

Ian Smith, CEO

Now climbing again!

WILL 5 HAPPEN TODAY HEE HEE

Just wait until the press pick up on this!

Today's Newspaper Roundup
AFX
Google, Flying Brands and Matrix Communications in focus...

Financial Times - THE LEX COLUMN comments on Google (valuation hardly frugal), Low market volatility, Private equity.

Independent - Small Companies Notebook: Stephen Foley comments on EDEN RESEARCH, HUVEAUX, FLYING BRANDS, MATRIX COMUNICATIONS, HANSARD

to be updated

Those who sold last week must be feeling sick today!

Volume Leaders

EPIC Name Price Volume
1 (1) VOD Vodafone Grp. 118.25 21,053,000 A
2 (2) HSBA Hsbc Hldgs.UK 821.5 18,895,300 A
3 (3) ISYS Invensys 15.5 14,488,500
4 (4) BGY Br.Energy 19.0 10,289,300
5 (5) ANL Abbey Nat. 579.0 9,910,640 A
6 (6) MXC Matrix Comms. 3.825 8,394,800

Matrix Communications on the acquisition trail
MoneyAM
Matrix Communications Group PLC said its annual turnover will be boosted by 8.6m and profits will grow by 1m a year after it completed a further three acquisitions.

Concurrently, the board also said it has won a series of contracts with Betfair. Betfair is a multiple award winning on-line betting website. The combined value of the contracts is estimated to be in excess of 1.5m over the next 18-24 months.

Matrix CEO, Ian Smith, said the enlarged group will be capable of providing customers
with the complete range of products and services associated with a network solution spend. The focus is still very much on being a provider of leading edge technologies, the board said.

The companies acquired are Bedrock Networks, a leading network integrator which has recently won contracts with Exchange Point and the London Internet Exchange, both of which work extensively with Matrix.

On completion Matrix paid an initial consideration of 1.1m, of which 500,000 was in cash and 600,000 in new ordinary shares in Matrix. The maximum earn-out consideration of 2.42m depends upon Bedrock achieving revenues of 3.6m and net profits of 500,000 for the period Aug 1st 2004 to July 31st 2005.

Matrix has also acquired Norwood Adam Systems Ltd, the foremost value-added distributor to the UK channel for convergence technologies, providing voice, data, LAN and WAN solutions and applications for corporate customers and enterprises of all sizes. On completion Matrix paid an initial consideration of 750,000 cash and a further performance-related payment of 750,000 cash may be made after Jan 31st 2005, with a final payment of 1m in new ordinary shares in Matrix after July 31st 2005.

The third acquisition is of the remaining 50% of Norwood Adam Technical Services for 1m. NATS provides after sales specialist technical support across the group's clients through a 24/7 Network Operations Centre (NOC)co-coordinating a nation-wide network of call-out engineers capable of giving short notice on-site customer support.

In early trading, Matrix shares were ahead 4.2% at 3.75p

ALL IM SAYING FOLKS IS WITH ALL THIS GOOD NEWS AND WRITE UPS THIS SHOULD BE HITTING 4.75 NOW...BUT ITS STRUGGLING

from Daniel Stewart Stockbrokers

Broker Upgrade:

Matrix Communications, the data network, VOIP (voice over IP) and network security systems integrator, has announced the completion of three acquisitions and a contract with Betfair worth more than 1.5m over the next two years. The acquisitions fit with the companys strategy of becoming a high margin systems integrator offering services in a number of high growth areas to the UK corporate and public sector. As a result of the acquisitions, we are upgrading our EPS forecasts for FY05 and FY06 and believe our price target of 4.75p, a 25% premium to the current price and equivalent to a 2005 PER of 22.6x, is a realistic interim goal.

The acquisition of Bedrock Networks, a network systems integrator of gigabit Ethernet switches from Extreme Networks (NASDAQ: EXTR), complements Matrixs existing core business, Matrix Network Solutions (MNS). MNS is the largest of the three UK value added resellers (VARs) for the products of Foundry Networks (NASDAQ: FDRY) a rival supplier of gigabit Ethernet switches. Matrix and Bedrocks customers are among the heaviest network users and there is some existing cross over. For example, Exchange Point and the London Internet Exchange are customers of both companies. The acquisition serves to diversify Matrixs offering and reduces its exposure to a single supplier.

Gigabit Ethernet switches are premium products with few qualified VARs and continue to enjoy premium pricing unlike the commodity sub-gigabit Ethernet market that is dominated by Cisco. As a result, MNS and Bedrock generate 25%+ gross margins, compared with the more typical 15-20%. The companies also generate much higher revenues per head than the rest of the sector. Matrix will pay a maximum consideration of 2.4m for Bedrock that had revenues of 4.1m for the year to 31st July 2003 and an operating profit of 1.1m. The acquisition will be earnings enhancing for FY05.

As with previous acquisitions, Matrix has used a mixture of cash and shares with an initial payment and a performance-related deferred consideration in order to tie-in vendor managers to the future performance of the business. The initial consideration of 1.1m is split 0.5m cash and 0.6m in shares (20.7m at 2.9p). Thereafter 0.2m in cash and 0.3m in shares will be paid after January 31st 2005 and 0.3m in cash and 0.5 in shares after July 31st 2005. For the vendors to receive the full earn-out, the business needs to achieve revenues of 3.6m and pre-tax profit of 0.5m for the 12 months to August 31st 2005. We have assumed these targets are achieved in our forecasts. Matrix has also announced the acquisition of Norwood Adam Systems Ltd (NASL), that trades as Norwood Adam Distribution, is a leading value-added distributor to the UK channel for convergence technologies, providing voice, data, LAN and WAN solutions andapplications for corporate customers and enterprises of all sizes. The acquisition will enable Matrix to capture more market share through diversification of branding, territory and customer profile. Daniel Stewart & Co acts as broker and nominated advisor to Matrix Communications plc

morning grevis2,
are you on commission from matrix?,
thanks for all your research,although no fireworks it`s still a nice steady climb day on day.

Oh Dear
All this good news and it looks like we could end up down today!!!!
Bloody day traders

We shall see. Should start to climb back from here. Lets face it, people were buying in at 4.05p this morning. Now you can top up for 3.7p.

I KNOW I MOAN BUT I WISH I SOLD OUT ,COULD OF GOT 3.90 SELL THIS MORNING EVERY TIME THIS COMPANY HAS GOOD NEWS , UP IT GOES THEN DOWN IT GOES, ITS NO BETTER AFTER THE GOOD NEWS THAN IT WAS FRIDAY, WHY CANT IT HOLD ITS PRICE AND RISE FOR GODS SAKE,

I think it's because there are a stack of shares in issue, + all the new issued shares from these acquisitions the price becomes diluted. MXC needs to start a buy back programme within the next 2 years. Does anyone know exactly how many shares are now currently in issue?

Ted1 - Seems around 1125 million

Thanks oakapples

Does anyone think that's excessive?
How does this figure compare to other companies and there share price, be them from this sector or others?
Thanks in advance guys.

at 4p thats 5000,million pence which is 50,million pounds how can this small company be worth so much yet whats going on ?

cant find there email address as i was going too ask them why so many shares have been released ,and do they think the company can be worth 50,million pounds

something is not right.

OH NO LOOK AT THIS NOW ITS GONE LESS THAN THURSDAY, HOW CAN IT HIT 4P AFTER GOOD NEWS THEN DROP TOO 3.5PTHE SAME DAY WITH ALL THIS GOOD NEWS ,SOMETHING STINKS