Tipped by the independent 2/01/2004

........."And so to our traditional "wild card". Pipex Communications, formerly known as GX Networks, is a telecoms company created by one of the entrepreneurs behind Ukbetting, Peter Dubens. It has been assembled from six smaller players. The ambitious company is generating cash for the first time but is still not widely followed in the City. It could be an undiscovered gem".

Traded over 30m now.

Is in not only frustrating but also suspicious that this stock has so many unknown trades which appear to be buys (no less than 26 mil to-day !!)

Oakapples142 all the big trades at 7.38 above the mid price. They have got to be buys. Big guns are filling there boots for monday.

I do agree Troys and trust we are both right

Oakapples142

the trades screen will show anything below mid as a Sell and anything above as a Buy. But it is not a true picture... its just a best effort guide. Best to ignore what its indicated as and look at volumes and price movement.

cheers
skids

Fair play look like they could have been SELLS from yesterday!!

Ticked up today ahead of results on Monday - loads of buys coming in which is hopefully a sign of good results?

A good start today

Big L trade posted late yesterday?

daily star buisiness page today.shares in telecoms network operator PIPEX COMMUNICATIONS were steady at 7.37 yesterday amid speculation it could announce a contract win.the firm was on cource to meet the citys 2004 profits forecasts and has seen broadband customers growth.this board keeps things close to their chest and rarely tries to bull up the company.its financial statements normally include news it has saved up.imho it will be a pleasant suprise.

hope so !

More big volume today as well.LOL

What are those very large 'unknown' trades - trades of 2m, 10m & two 5m's - looks very interesting?

32,000,000 today. Have a good weekend all :)

Pipex cashes in on broadband appeal
Tony Glover
April 10, 2005 12:00 AM (GMT)
UK-listed internet services provider Pipex will this week reveal that its revenues have almost tripled. Pipex will on Monday announce that its revenues rose to just over 100m (E146m, $188m) for the full-year 2004, up from only 35.2m in 2003.

According to Investec Securities, Pipex will have turned a loss of 7.8m in 2003 to normalised pr-etax profits of 7.6m in 2004. Investec's expectations are even more bullish. It is estimated that Pipex will have a turnover of 135.5m in 2005, rising to 158.2m in 2006. Pr-etax profits are set to rise from 12.3m in 2005 to 18.5m in 2006.

Pipex's turnaround is partly a result of acquisitions: the company made about seven purchases in an 18-month period. The most recent of these was the Nildram takeover in August 2004, which followed the purchase of Host Europe on 2 April.

Pipex went on its takeover spree at a time when the industry was only starting to discuss the wave of consolidation that has now engulfed the telecoms sector.

According to one analyst: "Pipex probably made its acquisitions at the right time. The valuations of the smaller internet service providers have already started to creep up and potential targets no longer look as attractive as when Pipex was buying."

Pipex reports that increasing use of the internet is driving broadband internet adoption. According to Pipex, millions of Londoners are now turning their backs on traditional desk jobs, with over half planning to spend more time working from home.

According to Dominic Crolla, managing directo,r Pipex Internet: "The broadband phenomenon has been growing rapidly over the past few year.s Already our research has shown people are now using the internet as part of their daily lives -- checking the weathe,r doing their banking and buying food on a regular basi.s"

Pipex Communications PLC
11 April 2005

11 April 2005


PIPEX COMMUNICATIONS PLC

RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004

PIPEX Communications plc, the telecoms network operator and provider of
broadband, hosting and network services, today reports its results for the year
ended 31 December 2004.

Highlights

Turnover of 102.3 million, up from 35.2 million in 2003
Gross margins increased to 47.4% from 43.5% in 2003
Profit before tax* of 6.2 million, up from an equivalent loss of 7.2
million in 2003
EBITDA** is 13.6 million for 2004 compared with an equivalent loss of
3.1 million in 2003
Cash balances at the year end were 11.3 million
Free cash flow positive for 2004
At the year end, customer numbers reached 420,000

Post-period end update

Q1 2005 started strongly, across all areas of the business
5.6 million in new orders already booked in the Network Services
business, up 47% from Q1 2004
Run rate of broadband orders at end of Q1 of 9,000 per month
Run rate of hosting orders at end of Q1 of 3,000 per month
Run rate of domain name registration at end of Q1 at 20,000 per month
Broadband ARPU for Q1 remains strong at 25
Evidence of significant growth in bundled voice and broadband product
Wireless broadband trial with partner set for Q3 2005 using PIPEX national
license

* pre-amortisation, integration costs and UITF 17 charges.

** pre-integration costs and UITF 17 charges.

See note 10 for a reconciliation of these amounts to profit and loss account.



Peter Dubens, Executive Chairman, commented,

'2004 was a year of very good growth for PIPEX. Not only did we reach
profitability (pre-amortisation),but we increased revenues threefold, continued
to improve gross margins, cut out over 6million of annualised costs and became
free cash flow positive. All three divisions (broadband, hosting and network
services) performed well and they continue to demonstrate their strong growth
prospects with an excellent start to 2005. I am also pleased with the
integration progress made in the Host Europe and Nildram acquisitions, a credit
to the recently strengthened management team.'

'With the continuing growth in internet use and traffic, we are seeing increased
demand from both consumers and corporate customers for our network, broadband
and hosting services. These positive market conditions and the strong initial
trading in 2005 give us confidence that PIPEX is set to enjoy strong growth for
the year, across all three divisions.'

For further information:
PIPEX Communications plc Tel: +44 (0) 20 7766 6909
Peter Dubens, Chairman
Mike Read, Chief Executive Officer

Financial Dynamics Tel: +44 (0) 20 7831 3113
Edward Bridges
Juliet Clarke
Ben Way


Photographs of Peter Dubens, Mike Read and Stewart Porter can be obtained from
Financial Dynamics




Chairman's Statement

Overview

I am pleased to report that during 2004 PIPEX has grown significantly and is
reporting its first full year positive EBITDA (pre-integration costs and UITF 17
charges) of 13.6 million (FY 2003: equivalent loss of 3.1 million) and profit
before tax, amortisation, business integration costs and UITF 17 charges of 6.2
million (FY 2003: equivalent loss of 7.2 million). Revenues increased
threefold, to 102.3 million, gross margins continue to improve to 47.4% against
43.5% in FY 2003 and over 6 million of annualised cost savings have been
realised during the year. In addition, PIPEX was free cash flow positive in
2004.

Following a sustained programme of acquisition and integration, PIPEX is now a
leading telecoms network operator and provider of broadband, hosting and network
services. We ended the year with 420,000 customers and a clear focus on the
high growth areas of 'new wave' IP revenues, in broadband, hosting and network
services.

In 2004 PIPEX improved its position in these high growth markets with the
acquisitions of Host Europe plc and Nildram. Host Europe plc was acquired in
April 2004 for a net cash cost of 26.5 million and strengthens our offer in the
shared hosting and domain registration business. It brought with it 127,000
hosting customers and 732,000 domain names to the group. Nildram, acquired in
September 2004 for 13 million before expenses, is predominantly a broadband
service provider, servicing 35,000 customers across the residential, SME and
large Corporate sectors.

The Group's focus on the optimisation of its infrastructure continues, with
particular emphasis on back office systems. The network itself also continues to
be enhanced and developed, and we expect its total integration to be completed
in the second half of 2005.

During the year we have sought to improve our position in the marketplace by
overhauling our sales channel and customer web interfaces. As a result, there
has been a complete transformation during 2004 in the way PIPEX sells its
products: 70% of sales are now generated via the group's websites, up from 25%
in 2003; this, together with staff productivity improvement, has led to average
annual revenue per employee increasing 47% to 178,000 since year-end 2003.
There has also been a resultant improvement in operating expenses
(pre-amortisation, depreciation, integration costs and UITF 17 charges), as a
percentage of revenue having fallen from 54% to 35%.

Broadband service

PIPEX is now the 5th largest supplier of broadband in the UK and ended 2004 with
192,000 customers (versus 93,000 at the end of 2003). This growth has been
achieved while also increasing ARPU per customer from 24 to 25 per month. We
have maintained a strong customer mix with business customers comprising 20% of
the total.

The building blocks for bundling services such as voice, security and hosting to
our broadband customers have been put in place during 2004, and this is our key
area of focus for the year ahead for this division, creating customer loyalty
and driving an increase in ARPU. Voice has been launched on our Nildram product
and we are encouraged by initial signs, with 20% of new customers adding voice
to their broadband service.

Hosting Services

PIPEX is a leading provider of shared and dedicated hosting as well as the
largest provider of domain names in the UK, achieving strong organic growth and
ending the year with 935,000 registered domain names and 154,000 hosting
services customers.

Our data centres ended 2004 with an average of over 60% occupancy. During the
year we enhanced network resilience between the data centres and our customers.
We continue to modify and update the product set and recently launched a
Microsoft shared hosting solution to our customers.

Our hosting centre in Germany benefited from extremely strong growth in 2004 and
the data centre ended the year at 80% capacity. We see potential for further
strong growth in this territory in 2005 and plans are in place for strengthening
our German presence with a second data centre.

Network Services

Since the 4 acquisitions made during 2002 and 2003, the network services
division has been focused on integration, both at an infrastructure and product
level. The companies are now fully operationally integrated and selling a broad
range of products, including leased lines, MPLS, VPN, gigabit ethernet,
security, hosting solutions and wireless products. For the most part, these are
carried on our Fibernet backbone, which has over 20 years remaining on our IRU.
These efforts have resulted in the division starting to deliver organic growth
during 2004, a trend which has continued strongly into 2005. At the year end,
the division had 2,000 corporate customers, and we are encouraged by a number of
significant contract wins at the beginning of 2005.

Operational Performance

Turnover increased in the year to 102 million, with 78 million coming from
existing operations (up from 35 million in 2003), and 24 million contributed
by our 2004 acquisitions. Gross margin also grew by 3.9 percentage points to
47.4%, reflecting our strategy to develop a portfolio of services in growing
markets without being over-exposed in any one area. In 2004, the acquisition of
Host Europe added high margin Hosting Services to this portfolio, lifting our
overall margin. In my Statement last year, I reported that the Company had
become EBITDA positive on a month-by-month basis by the 2003 year-end. In 2004
we report significant progress in this area, with EBITDA pre-integration costs
and UITF 17 charges of 13.6 million. PIPEX was also free cash flow positive in
2004, providing a solid platform for our further development.

Management Team

The Senior Management team has been strengthened during 2004. Maria Cappella,
with 18 years of telecoms and IT experience, joined us as General Manager of
Sales and Marketing, while Sean Stephenson, founder of Nildram, has joined the
senior management team. John Whitty, with 20 years of telecoms experience, is
our CTO, while Dominic Crolla heads up the Broadband operation and Rick Flood,
ex-COO of Host Europe, is Head of Hosting Services. PIPEX now has an extremely
strong and experienced team led by our CEO Mike Read.

Financing

In the year, the Company raised 33m (before expenses) from the issue of new
shares to finance the Host Europe acquisition. We also increased our debt
facility with Bank of Scotland by 13m to fund the purchase of Nildram.

Outlook

The 3.6 - 4.2 GHz national wireless license which PIPEX owns remains an
extremely important asset to the Group. This frequency falls within the new
WiMAX standard and to this end PIPEX and a partner will be trialling this in Q3
2005.

As more people subscribe to broadband Internet access, the amount of traffic and
data that is being created is increasing rapidly. This has now reached a point
where our corporate customers, providing services over the web, are upgrading
their network requirements, and where more new companies are seeing the benefits
of having their own presence on the Internet. Broadband in the home is also
creating a demand among consumers for bundled IP services, including voice,
hosting and, eventually, content.

With these positive market conditions and the strong initial trading in 2005 in
mind, we believe PIPEX is set to enjoy strong growth for the year, across all
three divisions.


Peter Dubens
Chairman
PIPEX Communications plc



Consolidated Profit and Loss Account
for the year ended 31 December 2004

Existing
Operations Acquisitions Total
Note 2004 2004 2004 2003
'000 '000 '000 '000

Turnover 3 78,437 23,852 102,289 35,218

Cost of sales (45,014) (8,760) (53,774) (19,893)

Gross profit 33,423 15,092 48,515 15,325

Operating expenses before amortisation,
depreciation and integration costs (26,251) (9,103) (35,354) (18,975)
Amortisation of intangibles (6,191) (2,810) (9,001) (1,726)
Depreciation (4,139) (1,713) (5,852) (3,736)
Integration costs 10 (1,318) (431) (1,749) (391)

Operating expenses (37,899) (14,057) (51,956) (24,828)

Operating profit before amortisation,
depreciation and integration costs 7,172 5,989 13,161 (3,650)
Amortisation of intangibles (6,191) (2,810) (9,001) (1,726)
Depreciation (4,139) (1,713) (5,852) (3,736)
Integration costs 10 (1,318) (431) (1,749) (391)

Operating loss (4,476) 1,035 (3,441) (9,503)

Other interest receivable and similar 465 79
income
Interest payable and similar charges (2,058) (469)

Loss on ordinary activities before taxation (5,034) (9,893)

Tax on loss on ordinary activities 4 (29) -

Loss for the financial year (5,063) (9,893)


Loss per ordinary share - basic 9 0.25p 0.89p
- diluted 9 0.25p 0.89p





The loss on a historic cost basis is the same as the results reported above.

All of the results above relate to continuing operations.



Consolidated statement of Group total recognised gains and losses for the year
ended 31 December 2004


2004 2003
'000 '000

Loss for the financial year (5,063) (9,893)
Translation difference in respect of net
investment in overseas subsidiary 60 -
undertaking

Total recognised losses in the year (5,003) (9,893)




Consolidated Balance Sheet
at 31 December 2004




Note 2004 2004 2003 2003
'000 '000 '000 '000
Fixed assets
Intangible assets
Positive goodwill 94,714 63,522
Negative goodwill (94) (319)
Patents 8 9
Wireless License 4,667 -

99,295 63,212
Tangible assets 21,581 16,264

120,876 79,476

Current assets
Stock 21 218
Debtors 16,386 9,264
Cash at bank and in hand 11,309 13,267

27,716 22,749

Creditors: amounts falling due
within one year (44,094) (36,476)

Net current liabilities (16,378) (13,727)

Total assets less current liabilities 104,498 65,749

Creditors: amounts falling due
after one year (22,861) (13,541)

Provisions for liabilities and charges (2,251) (828)

Net assets 79,386 51,380

Capital and reserves
Called up share capital 5 21,822 18,141
Share capital to be issued - 2,540
Share premium account 83,868 52,451
Other reserves 10,703 10,252
Profit and loss account (37,007) (32,004)

Equity shareholders' funds 79,386 51,380



Consolidated Cash Flow Statement
for the year ended 31 December 2004

Note 2004 2003
'000 '000

Cash inflow/(outflow) from operating activities 8 7,643 (7,553)

Returns on investment and servicing of finance
Interest paid (1,523) (4)
Interest received 465
Interest element of finance lease payments (377) (217)

(1,435) (221)

Taxation received/(paid) 217 (344)


Capital expenditure and financial investment
Purchase of tangible fixed assets (6,086) (1,245)
Proceeds from disposals of tangible fixed assets 939 93

(5,147) (1,152)

Acquisitions
Purchase of subsidiary undertakings 6 (40,695) (39,745)
Prior year acquisitions 7 (163) -

(40,858) (39,745)

Cash outflow before management of liquid
resources and financing (39,580) (49,015)

Management of liquid resources
Cash withdrawn from term deposits - 250
Movement in restricted deposits (693) 54

Financing

Issue of ordinary share capital 33,000 45,169
Expenses on issue of ordinary share capital (1,227) (1,933)
Exercise of share options 785 99
Repayment of loan notes (1,501) -
Drawdown of new loan 13,000 15,000
Repayment of loan (2,890) (40)
Capital element of finance lease payments (3,545) (1,381)

Net cash inflow from financing 37,622 56,914

(Decrease)/increase in cash in the period (2,651) 8,203







Reconciliation of net cash flow to movement in net debt
for the year ended 31 December 2004 2004 2003
'000 '000

(Decrease)/increase in cash in period (2,651) 8,203
Net movement in liquid resources 693 (304)
Payment of loan note 1,501 -
Drawdown of new loan (13,000) (15,000)
Repayment of loan 2,890 40
Cash outflow from lease financing 3,545 1,381

Change in net debt resulting from cash flows (7,022) (5,680)

New finance leases (486) -
Finance leases acquired with subsidiary (504) (3,126)
Finance lease fair value adjustment (950) -
Conversion of loan stock - 1,570
Loans acquired with subsidiary - (1,919)


Movement in net debt (8,962) (9,155)
Opening net debt (11,655) (2,500)

Closing net debt (20,617) (11,655)



Analysis of net debt
at 31 December 2004

At 1 Acquisitions At 31
(excluding
January 2004 Cashflow cash) Other December 2004
'000 '000 '000 '000 '000

Cash 10,842 (2,651) - - 8,191
Restricted deposits 2,425 693 - - 3,118
______ ______ ______ ______ ______
Cash at bank and in hand per
balance sheet 13,267 (1,958) - - 11,309

Bank loans (16,879) (10,110) - - (26,989)
Finance leases (4,553) 3,545 (504) (1,436) (2,948)
Loan notes (3,490) 1,501 - - (1,989)
_______ _______ _______ _______ _______
Net debt (11,655) (7,022) (504) (1,436) (20,617)
_______ _______ _______ _______ _______



The movement of 1,436,000 in other relates to new finance leases of 486,000
and a fair value adjustment on finance leases of 950,000.


Notes to the financial statements

1 Financial information

The financial information set out above does not constitute the Company's
statutory financial statements for the year ended 31st December 2004, but is
derived from those statements. Statutory financial statements for 2004 will be
delivered to the Registrar of Companies following the Annual General Meeting.
The auditors have reported on the financial statements to 31 December 2004.
Their report was unqualified and did not contain statements under section 237(2)
of the Companies Act 1985.

2 Annual Report and financial statements

The Annual Report will be posted to shareholders on 4 May 2005. The Annual
General Meeting will be held on 7 June 2005. Copies of the Annual Report and of
this announcement will be available at the Company's registered address: Carlton
House, 27a Carlton Drive, London SW15 2BS.

3 Segmental Information

The group operates one class of business, that of Telecommunication services and
consequently does not prepare segmental information by class of business.
However, to provide useful additional information, turnover is subdivided into
three main service categories shown below.

Turnover 2004 2003
'000 '000

Broadband Services 54,797 9,517
Hosting Services 16,894 79
Network Services 30,598 25,622

102,289 35,218


Turnover and loss before interest and tax, together with net assets by country
of origin are set out below.


(Loss)/profit
before interest Loss before
Net assets Net assets Turnover Turnover and tax interest and tax
2004 2003 2004 2003 2004 2003
'000 '000 '000 '000 '000 '000

UK 78,003 51,380 98,096 35,218 (3,601) (9,503)
Germany 1,383 - 4,193 - 160 -

79,386 51,380 102,289 35,218 (3,441) (9,503)

Turnover analysed by destination is not materially different to turnover by
origin.

4 Tax on ordinary activities


2004 2003
'000 '000

United Kingdom corporation tax at 30% (2003: 30%) - -
Overseas tax on profit for the year 29 -

29 -



5 Called up share capital

Authorised and allotted share capital
2004 2003
'000 '000
Authorised
Equity: 4,000,000,000 Ordinary shares of 1p each
At 1 January 2003 30,000 15,000
Authorised during the year 10,000 15,000

At 31 December 2004 40,000 30,000


2004 2003
'000 '000

Allotted, called up and fully paid
Equity: Ordinary shares of 1p each
At 1 January 2004 18,141 7,100
Issued during the year 3,681 11,041

At 31 December 2004 21,822 18,141


On 27 April 2004 the authorised share capital was increased by 1,000 million 1p
ordinary shares.

Share capital issued at nominal value in the year relates to the exercise of
share options (30,719,332 shares for consideration of 784,671), shares
allocated in respect of the previous years acquisition of Firstnet Services
Limited (23,092,369 shares at a fair value of 2,540,161) and shares placed
during the year (314,285,715 shares for cash consideration of 33,000,000).

6 Acquisitions

(i) Summary

Below is a summary of the acquisitions made by PIPEX Communications plc in the
year ended 31 December 2004.
2004
'000

Fair value of assets acquired 2,509
_______
Goodwill 44,028
_______
Consideration 46,537
_______
Satisfied by:

Cash 44,164
Costs of acquisition 2,373
_______
46,537
_______
Effects on group cash flow:

Cash consideration 44,164
Costs of acquisition 2,373
Cash balances on acquisition (5,842)
_______
Net cash outflow 40,695
_______

(ii) Host Europe

On 2 April PIPEX purchased 13.2% of the share capital of Host Europe plc on the
open market. On the same date PIPEX made a public offer to the shareholders of
Host Europe plc. The offer from PIPEX was accepted by the Directors of Host
Europe, their families and certain other employees (who together held 39.3% of
Host Europe's share capital) on 2 April 2004. These shareholders provided PIPEX
with irrevocable undertakings to sell their shares. As a result, on 2 April,
PIPEX announced it had 'control' of over 52% of Host Europe's shares.

The cost of investment comprises 31.2 million to acquire 100% of the share
capital of Host Europe plc and 0.9 million of professional fees. Goodwill of
29,250,000 arising on acquisition is being amortised over ten years, the useful
life as estimated by the directors.

Host Europe contributed 15,980,000 of turnover in the period since acquisition,
an operating profit of 1,088,000 (after goodwill amortisation of 2,194,000)
and accounted for cashflows from operating activities 2,507,000.

The turnover and operating profit of the Company between 1 January 2004 and 1
April 2004 were 5,085,000 and 715,000 respectively. The net assets of the
Company at 31 December 2003 were 12,927,000 and the operating loss for the year
to 31 December 2003 was 134,000.

Details of the fair values of the assets and liabilities acquired are
provisional and are set out below:

Book value of Fair value
assets acquired adjustments Fair value
'000 '000 '000

Fixed Assets 3,443 - 3,443
Stock 5 - 5
Debtors 1,579 (360) 1,219
Cash 5,584 - 5,584
Creditors (falling due within one year) (7,169) (181) (7,350)
Provisions (170) 145 (25)
_______ _______ _______
Net assets/(liabilities) 3,272 (396) 2,876
_______ _______ _______
Goodwill 29,250
_______
Consideration 32,126
_______
Satisfied by:
Cash 31,198
Costs of acquisition 928
_______
32,126
_______
Effects on group cashflow:
Cash consideration and costs 32,126
Cash balances and acquisition (5,584)
_______
Net cash outflow 26,542
_______



Explanatory Notes:

Debtors

The adjustment to debtors represents the removal of a previously recognised
deferred tax asset.

Creditors (falling due within one year)

Creditors have been increased to accrue for all estimated outstanding
liabilities

Provisions

The fair value adjustment is to remove a dilapidation provision not expected to
be required.

(iii) AccentUK Limited

On 6 August 2004 the Group acquired 100% share capital of AccentUK Limited and
its subsidiaries, Trinite Limited, Nildram Limited and Trinite Services Limited.

The acquisition was financed by a bank loan of 13.0 million. Costs of
acquisition were 1.4 million.

Goodwill of 14,778,000 arising on acquisition is being amortised over ten
years, the useful life as estimated by the directors.

AccentUK contributed 7,872,000 of turnover in the period since acquisition, an
operating loss of 53,000 (after goodwill amortisation of 616,000) and
accounted for cashflows from operating activities of 1,123,000.

The turnover and operating profit of the Company between 1 January 2004 and 5
August 2004 were 9,694,000 and 400,000 respectively. The net assets of the
Company at 31 March 2004 were 323,000 and the operating loss for the year to 31
March 2004 was 179,000.

Details of the fair values of the assets and liabilities acquired are
provisional and are set out below:


Book value of Fair value
assets acquired adjustments Fair value
000 000 000

Fixed Assets 915 - 915
Debtors 1,586 52 1,638
Cash 258 - 258
Creditors (falling due within one year) (3,178) - (3,178)
_______ _______ _______
Net (liabilities) /assets (419) 52 (367)
_______ _______ _______
Goodwill 14,778
_______
Consideration 14,411
_______
Satisfied by:
Cash 12,966
Costs of acquisition 1,445
_______
14,411
_______

Effects on group cashflow:
Cash consideration and costs 14,411
Cash balances and acquisition (258)
_______
Net cash outflow 14,153
_______



Explanatory Notes:

Debtors

Debtors have been adjusted to increase prepaid telecommunications rentals at
acquisition.

7 Goodwill on prior year acquisitions

(i) Summary


Provisional Fair Final Fair
Value to the Value to the
Group Adjustments Group
2003 2004 2004
'000 '000 '000

Fair value of net assets acquired 8,238 4,107 12,345

Goodwill 57,162 (3,944) 53,218

Consideration 65,400 163 65,563


(ii) XTML Limited and Compulink Information eXchange Limited


Provisional Fair Final Fair
Value to the Value to the
Group Adjustments Group
2003 2004 2004
'000 '000 '000

Fair value of net assets acquired (704) (1,919) (2,623)

Goodwill 1,732 2,019 3,751

Consideration 1,028 100 1,128


The adjustments to provisional fair values, and therefore goodwill, comprise
predominantly the inclusion of a provision for an onerous lease relating to a
telecommunications network in the amount of 2,021,000 and the release of
282,000 of accrued liabilities at acquisition. The adjustment to consideration
is in respect of previously unprovided professional fees.

(iii) Firstnet Services Limited


Provisional Fair Final Fair
Value to the Value to the
Group Adjustments Group
2003 2004 2004
'000 '000 '000

Fair value of net assets acquired 857 4,599 5,456

Goodwill 6,150 (4,592) 1,558

Consideration 7,007 7 7,014

The adjustments to provisional fair values, and therefore goodwill, comprise
predominantly 5,000,000 in respect of a Director's valuation placed on the
Wireless Licence at acquisition. Other adjustments include a write down of
obsolete stock of 166,000, and 240,000 in respect of unaccrued liabilities.
Fixed assets and lease creditors have been adjusted by 950,000 in respect of a
previously unrecorded finance lease. The adjustment to consideration is in
respect of previously unprovided professional fees.

(iv) PIPEX Internet Limited


Provisional Fair Final Fair
Value to the Value to the
Group Adjustments Group
2003 2004 2004
'000 '000 '000

Fair value of net assets acquired 8,085 1,427 9,512

Goodwill 49,280 (1,371) 47,909

Consideration 57,365 56 57,421

The adjustment to provisional fair values, and therefore goodwill, relates to
prepayments. This comprises 1,348,000 in prepaid customer telecommunications
equipment and 79,000 in prepaid circuit costs. The adjustment to consideration
is in respect of previously unprovided professional fees.

8 Reconciliation of operating loss to operating cash flows
2004 2003
'000 '000

Operating loss (3,441) (9,503)
Depreciation charge 5,852 3,736
Amortisation charge 9,001 1,726
(Profit)/loss on sale of fixed assets (53) 16
UITF 17 charge (non-cash) 451 577
Decrease/(increase) in stock 35 (17)
(Increase)/decrease in debtors (3,084) 841
Decrease in creditors (316) (4,878)
Decrease in provisions (802) (51)

Net cash inflow/(outflow) from operating activities 7,643 (7,553)




9 Loss per share


Year ended 31 Year ended 31
December 2004 December 2003

Loss for the financial year
attributable to shareholders 5,063,000 9,893,000

Weighted average number of equity
shares in issue 2,063,093,735 1,106,864,224

Basic/diluted loss per equity share* 0.25p 0.89p


* Since the conversion of potential ordinary shares to ordinary shares would
decrease the net loss per share they are not dilutive. Accordingly diluted loss
per share is the same as basic loss per share.


10 Reconciliation of adjusted EBITDA to Operating loss


2004 2003
'000 '000

EBITDA before integration costs and UITF 17 charges 13,612 (3,073)
Integration costs (1,749) (391)
UITF 17 (451) (577)

EBITDA 11,412 (4,041)
Depreciation (5,852) (3,736)
Amortisation of goodwill and intangible assets (9,001) (1,726)

Operating loss (3,441) (9,503)


2004 2003
'000 '000

Profit /(loss) before tax, amortisation, integration
costs and UITF 17 charges 6,167 (7,199)
Integration costs (1,749) (391)
UITF 17 (451) (577)
Amortisation of goodwill and intangible assets (9,001) (1,726)

Loss on ordinary activities before taxation (5,034) (9,893)


Separately disclosed in the 2004 accounts as a component of operating expenses
(together with the relevant comparative figure) are 'business integration costs'
of 1,749,000 (2003: 391,000). These comprise redundancy costs of 803,000
(2003: 391,000) and the relevant proportion of salary costs for those
individuals working on specific integration projects of 946,000 (2003: nil).




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

why is share price not moving up as the company went into profits

I thinks its going to take a day or two for the RNS to get digested properly. hopefully the initial 6% gain this morning will be followed by much more.

is has since last week....buy on rumour etc..

???