Interesting company with a good management team.



November 1st,

* Group sales up 500%

* Intrinsic outperformed second earn-out target by 25%

* Decorum outperformed first earn-out target by 50%

* 6 million bank facility agreed

* Dividend policy for 2005 agreed

Director Speak

Ian Smith, CEO, commented:

'I am very pleased with the performance of the company in H2FY2004 and fully
expect the Group to meet or exceed the current market expectations in FY2005.

Our clear strategy of product differentiation coupled with expertise and great
customer service is paying real dividends. As the only pure performance
communications company in the UK, the Group is unique and is well set for many
years of growth.'

Trading Statement

Trading Update

Matrix Communications Group Plc ('MXC'), the UK's communications company of
choice for leading edge technologies, is providing a trading update for Q4
based on unaudited financial accounts.

Group sales for Q4 were 5.0m (2003: 1.09m), an increase of 450% against the
same period last year. Q4 includes turnover from the recent acquisitions of
Bedrock Networks and Norwood Adam Systems and the remaining 50% of Norwood Adam
Technical Services.

The Group has now fully integrated all of its system integration businesses and
in 2005 all companies acquired prior to 1st August 2004 will operate under a
single brand. The new Company website,
www.mxcplc.com,
reflects these changes.

By way of confirmation of our 'pure performance' leadership, the Group now
works with Foundry Networks, Juniper Networks, Extreme Networks, Mitel Networks
and Peribit Networks amongst others. This single focus on best of breed
technologies makes the Group unique within the UK and it is now the only top 20
integrator in the UK that is not a Cisco partner.

The Group's focus on delivering expertise and great customer service is
demonstrated in the exceptional financial performance.

Performance of Acquisitions

The data business, Matrix Network Solutions, has continued to grow its business
in 2004 with 4.2m turnover (2003: 1.3m), 300% year on year growth and has
established itself as a key provider of non-Cisco IT infrastructure. Its
pipeline for 2005 is currently 50% greater than it was at this time for 2004.

The IT security business, previously known as Intrinsic, has had a strong 2004
H2 and has out performed its 2nd earn out target by 25%. The final earn out
payment of 100,000,000 shares (2,500,000 shares following the share
consolidation) will be issued to the directors of Intrinsic at the end of
November. It has seen the UK launch of the Vodafone content filtering service
and is one of the UK's most successful Juniper partners. It too has grown its
business more than 300% year on year.

The voice business, previously known as Decorum, has also had an excellent 2004
H2 and has completed its 1st earn out target. The earn out payment of
13,515,901 shares (337,897 shares following the consolidation) and 150,000
will be issued to the directors of Decorum at the end of November.

The service and support business, previously known as Norwood Adam Technical
Services, has continued to enhance our service offering and is now responsible
for managing a number of blue-chip IT networks 24 hours a day. It now manages
over 500 contracts with annual contract value in excess of 5m.

Overall, the Group has been delighted with the progress of all acquisitions and
the outstanding financial results listed above confirm the synergistic nature
and rapid integration within the Group.

2005 will continue to see the Group deliver strong organic growth coupled with
further strategic acquisitions. We hope to be able to report further on this
matter shortly.

Conclusion.

Well worth giving this one a research look over.

P/E is a bit topy with the future P/E being around 17, but with these earnings enhancing acquisitions, should be able to deliver top line growth going forward backed by an excelent management team*.

DYOR


cheers GF.

SUPERJOCK2, Hi there, dont for gods say the word... W.... LOL

SUPERJOCK, or another country, fools.

Sliver, Horses tells me they cant hide the turnover of vod so it should be there, plus new brokers could say there bit, along with conless over things we just dont know apart from it wont be bad. Im betting Azzurri gets a mention some where along the line, if not i owe Stroudy dinner.
Can you tell ive not much on to day, i should be with STROUDY walking or in my garden. He lives not 10 miles from be, bet he's walked past my house and had a nosey in. Never met the fellow yet.

Silverback

I don't know, just hope the detail is there.

Silver Iwould like to see a small dividend, nothing gives investors more confidence than seeing a cash return, however small.

412, Have you ever thought, Stoudy could be female, lol
So we know where to look for vod money.
These are the days to sit in the garden,
sod work, it will still be there tomorrow.

SUPERJOCK,
The dividend is what I`m looking for too.

Silver, yes but no one would be working as hard though mate, Stroudy female NOOOOOOOOO. Just booked me hol's to cheer me up New York & Florida.

412, US, love it, worked and play there. kids loved it too.
Good to see your going there, safer there than Indonesia,
to much seismic action for my liking.

Interim are out, but no N on the screen

Highlights

* Turnover up over 500% to ?22.5m (2004 - ?3.7m)

* Gross Profit up 400% to ?8.0m (2004 - ?1.6m)

* Operating profit, excluding an amortisation charge of ?0.6m for the period,
up 210% to ?1.9m (2004 - ?0.6m)

* EBITDA up over 200% to ?2.2m (2004 - ?0.7m)

* Secured a significant global contract for the provision of the Groups'
unique leading edge content filtering software with a global mobile
wireless operator

* Raised ?7.5m before expenses from the issue of new equity

* Successfully completed a further 3 acquisitions

* Benefited from the implementation of a new divisional structure and
corporate branding

CITIWIRE TIP UPDATE

http://www.citywire.co.uk/News/NewsArticle.aspx?VersionID=74973&NewsPage=1

Matrix Communications says its margins are holding up, growth is strong and second half prospects are exciting, but the shares have still fallen 5%.
Matrix has expanded rapidly through acquisitions in recent years and while today's first half numbers do not tell the full story the news is broadly encouraging.
Chief executive Ian Smith told Citywire: 'It is fair to say that we've a long way to go before the end of the year and making the numbers... but we're still very confident in our ability to meet expectations.'
Matrix has positioned itself as an IT services group supplying best of breed solutions in other words they are not tied to any supplier.
The strategy seems to be reaping rewards. The group says it has not experienced the margin pressure that has been reported by other IT services companies and has achieved 'exceptional' organic growth. Selling best of breed means it is not selling the same product as its peers which prevents product sales becoming commoditised. However, the shares have still fallen 8.5p to 178.5p.
Talk of the challenging conditions experienced by peers may not have helped sentiment today. In addition the full benefit of the group's three recent acquisitions is not evident in the half year numbers. More of the cost savings and cross-selling benefits are not expected to show through in the second half and there after.
Turnover for the half year to the end of April was up 500% at 22.5 million, earnings before interest tax and amortisation charges rose 200% to 2.2 million and profit before tax came in 81% higher at 1.15 million.
The group says it is benefiting from its new divisional structure and is excited about the new mobile division that has been set up called Fujin.
Smith said: 'Fujin sold the world's first content filtering system to a mobile operator [for an eight figure sum]... That's a massive market opportunity and if we're successful in getting another mobile operator bit of business that sets us apart and could be extremely valuable.'
Citywire tipped Matrix at 144p last November before suggesting that holders may want to lock in a bit of profit at 222.5p in January.
Despite today's fall the company has demonstrated impressive growth and there should be better to come in the second. With the group now in the process of consolidating its acquisition the product of management's efforts in transforming the company looks set to emerge. There is also the chance that the company could attract a bidder.
Smith admitted: 'This market is seeing a lot of consolidation... conceivably the hunter could become the hunted.'

Could be worth looking at a long position following today's trading statement.

I think I recognise a few names on here from ADVFN...........small world inside this screen I guess.

luchan.

No posts for two months, and we have had a bounce, followed by a resumption of the downtrend.

Strange.

Have a look at today's buys. Something's afoot me thinks!

grevis2 - I could be wrong but I think the results for the year ended 31.10.2005 are due to be announced shortly.

I wouldn't touch this company with a barge pole.

I expect another profit warning with the results.

The IT markets they operate in are very very tough and margins under severe pressure.

The margins are actually very good with this company.........As the focus is not actually on legacy or comoditised products and services.......The margin on emerging technologies are as stated very good.

Margins are under severe pressure believe me.
I work in the IT sector and know this.