Intelligent Environments Group PLC
25 July 2007


25 July 2007

INTELLIGENT ENVIRONMENTS GROUP plc
('iE', 'the Group' or 'the Company'),

TRADING UPDATE FOR THE SIX MONTHS ENDED 30 JUNE 2007

Intelligent Environments Group plc (AIM: IEN), the online software provider for
the retail banking market, today announces that it expects its revenue to be
ahead of market expectations when it reports interim results at the end of
September.

Highlights

Revenues expected to increase by approximately 72% to 3.07 million for
the half year ended 30 June 2007 (Compared to H1 06)


Operating profit for the period remains in line with management
expectations


Cash inflow of 308k will result in a cash balance of 1.174 million at
30 June 2007

Commenting on the forecasted performance of the Group, Phillip Blundell, CEO of
iE said,

'We are confident that profit momentum will continue as the Group expands into
new markets and geographies, in-line with our strategic focus to secure
long-term partnerships.

Partnerships with Barclaycard and Creation Financial Services have now entered
production as has our first building society customer, The Principality Building
Society. During the first half of the year we announced a partnership agreement
with Unisys, that has already resulted in a significant contract win with The
West Bromwich Building Society. Additionally, we have secured a European partner
for credit card services as well as a Middle Eastern partner for insurance
solutions. These new partnerships along with our new transactional revenue model
will help maintain the future growth of the Company.'

The Company will announce its interim results for the six months to 30 June
2007, in late September.

-ends-

For further information, please contact:

iE: Phillip Blundell, Chief Executive 020 8614 9800
Dawnay Day: Alex Stanbury 020 7509 4570
Conduit PR: Charlie Geller or Anouska Widdess 0207 429 6666



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

Intelligent Environments (IEN), the online financial services software provider, said it has won a three-year contract worth an initial 500,000 pounds from an unnamed major European retail bank to develop and manage an online portal. The company believes this 'white label' approach will become one of the main driver of growth for its business in 2008. The shares were tipped on small cap tipping website WatsHot.com just yesterday and have since risen by 14%.

Buy Intelligent Environments at 7.375p

Says WatsHot.com

AIM-listed Intelligent Environments (IEN) provides an online financial platform called NetFinance to some of the biggest names in the banking sector including HSBC, RBS, HBOS and Barclays. The product is used by these banks for delivering online services, specifically account applications and account management. With 40% of people in the UK now banking online, the market for IEs products is large and growing. There is also considerable potential for international growth through the global reach of its existing client base.

The company has focused its strategy on developing partnerships and apart from those clients mentioned above, the company also works with First Data International, Unisys, Creation Financial Services and Principality Building Society, amongst others. This approach has proved to be very successful for the company; for example, the partnership with Unisys has led to a contract win at West Bromwich Building Society, while the RBS partnership has enabled the company to expand its product offering across continental Europe.

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The economic logic behind the take-up of IEs products is simple. Online applications can reduce customer acquisition costs for companies by up to 4.90 per application, and online account management can save a minimum of 7.50 per online customer per year. Furthermore, the importance of having an online platform that is simple and easy to use is essential in ensuring that customers are acquired and retained. Research shows that a user-friendly product design can increase the number of completed online applications by 40%.

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One of the key reasons to get excited about IE is that it is currently moving its clients from paying a licence fee to a transactional-based revenue model. This means that IE will be paid between 70p to 1 every time someone completes an application online and thus gross margins will improve considerably. Moreover, the company will receive this payment regardless of whether or not the application is approved, thereby mitigating the possible effects that the credit crunch could have upon actual account take-up.


Financials
The company's last set of results for the six months to 30th June 2007 reported that it made pre-tax profits of 0.21 million on revenues of 3.07 million, representing improvements on 2006 numbers of 72% and 39% respectively. For the year ended 31st December 2006 the company recorded revenues of 4.35 million, on which it made a net profit of 0.59 million, generating earnings per share of 0.36p.

This year those figures are set to rise to 6.22 million, 0.87 million and 0.53p respectively. In 2008 net profits should rise to 1.6 million generating earnings per share of 0.98p and that puts the stock, at 7.38p, on a forward price earnings multiple of 7.5. This should then fall to a piddling 5.2 in 2009 on the back of 2.31 million net profits and earnings per share of 1.41p.

With regards to the balance sheet IE is in a strong position, with cash of 1.7 million and no debt. The company also has a large amount of cumulative losses and will therefore not incur a tax charge for the foreseeable future. With cash generation of 1.4 million expected for 2007, rising to 2.3 million next year, the only issue is how IE will deploy its surplus cash.

*The value of investments can go down as well as up. Investing in equities can lose you part or all of your capital. Smaller company shares can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares. Cornhill Asset Management Limited is an Appointed Representative of Argyle Investment Advisors Limited which is Authorised and regulated by the Financial Services Authority. UK-Analyst.com is owned by t1ps.com Ltd which is authorised and regulated by the FSA and can be contacted at 5-11 Worship Street, London EC2A 2BH or on 020 7562 3370.

Valuation

IE is a rapidly growing business with a reliable revenue stream derived from an impressive client base. IEs peers trade on prospective 2008 earnings multiples ranging from 15 to 23. I reckon a forward rating of 15 is the very least a growth stock such as this should merit, so my initial 1-year target price is 14.7p which implies upside of 99% from here. Buy.

Key Data

EPIC: IEN
Market: AIM
Spread: 7p - 7.75p (9.7%)

WatsHot.com is THE site for you if you are interested in fast-moving small caps. For more on the site click here.

director buy all be it small volume but new institiational shareholder real plus if meets eps targets its still a steal at this level could double in 2007 is my opinion

seems to be on the move north ...

One of SHARES picks for 2009.
Any views on this baby?