Trading update

Vocalis, the leading provider of voice driven solutions to UK contact centres, issues the following trading statement.

As reported in November 2002 at the time of the interim results, Vocalis continues to build on the strategic decisions made during 2002. Many leading companies within the financial services and utilities sectors have recognised the potential cost saving and customer service benefits of implementing natural voice solutions as part of their contact centre strategy. Whilst the number of organisations in discussion with Vocalis has dramatically increased and considerable interest has been generated in the Groups products, it has taken longer than planned to convert these sales opportunities into firm orders in the current market. As a result, the Group has not achieved the increase in revenue forecast for the second half of the financial year. Accordingly, it is expected that revenues in the six months to 31 March 2003, whilst significantly in excess of those in the corresponding period in 2002, will be at a similar level to those reported for the six months to 30 September 2002.

The results for the year will also include exceptional restructuring costs amounting to approximately 0.5 million following a review of the property, stock and staffing requirements resulting from the repositioning of the business in the past 12 months.

The Directors expect to report that net cash balances at the year end will be approximately 1.8 million.

Looking ahead, Vocalis will continue to implement the strategy set out in 2002 for the UK contact centre market, in order to convert the customer pipeline into firm orders, and in so doing, generate a solid financial return for the Group.