GlobalData Regulatory News (DATA)

17 Jul 2007 07:00

Date: 17 July 2007

On behalf of: TMN Group plc ("TMN" or "the Company")

Embargoed until: 0700hrs

TMN Group plc

* Preliminary Results

TMN Group plc (AIM: TMN), the UK's premier online direct marketing group, ispleased to announce its preliminary results for the year ended 30 April 2007.The highlights are:Financial

* Revenue increased by 79% to ‚£16.1 million (2006: ‚£9.0 million)

* Operating profit increased by 93% to ‚£3.27 million (2006: ‚£1.69 million)

* Headline earnings per share rose 104% to 5.5 pence (2006: 2.7 pence) * Net cash at the year end was ‚£1.55 million (2006: ‚£1.2 million)

Operational

* Increased synergies between TMN Media and EDR have resulted in greater than

expected inter-group sales

* New technology and product launches, including new lead generation systems

Plum-Offers and Pure Lead, already generating material revenues * Change of company name from themutual.net to TMN Group plc, to better reflect the divisional structure of the group

* As previously announced Peter Coveney (CFO) is to retire in August 2007 and

his replacement, Craig Dixon, has now joined the Group

Commenting on the results, Mark Smith, CEO said:

"This year has seen another strong performance by the Group, with significantincreases in both turnover and profit. The new product launches targeted atimproving lead generation are attracting interest from a range of customers,both new and existing, and are already having a positive impact on revenues.These products, with further launches in the pipeline, enable us to offer afull service and strengthen our position as the UK's premier online directmarketing services group."The internet advertising market continues to grow rapidly, with over ‚£2billion spent in 2006. TMN is well positioned, with its three core divisionsand further new product launches, to continue to strengthen its position in theonline direct marketing and research sectors in the UK."- ends -Enquiries to:TMN Mark Smith, CEO 020 7440 9310 Craig Dixon, CFO Redleaf Communications

Samantha Robbins / Duncan McCormick 020 7822

0200

Notes to Editors:

* TMN Group plc ("TMN") was established in 1999. * The Company comprises of three core divisions: * TMN Media: email marketing specialist, with over 10 million highly

profiled, permission-based email addresses across numerous lists, manages

the most comprehensive portfolio of email databases in the UK. Also operator of the largest online reward scheme in the UK. Clients include Sky, T-Mobile, British Gas, EMAP, Volvo and Boots.

* EDR: online interactive advertising agency, plans campaigns across dozens

of third party lists, including those operated by TMN Media, and is the largest buyer of email advertising in the UK. Clients span a number of sectors, including finance, motoring, publishing and shopping.

* The iD Factor: specialists in online market research, with 250,000 panel

members in the UK and over 4 million members across 41 territories, managed

via a network of local partnerships, allowing targeted domestic and international research. Clients include numerous MR Agencies, producing work for Microsoft, Lloyds TSB, NSPCC, Persil, Carlsberg and PC World.

* TMN is committed to the development of new initiatives to drive the growth

of its business. * TMN Enterprise has been created to manage all new developments for the Group including the launches of Plum-Offers, a lead generation and competition portal, and Pure Lead, a service to companies building databases to generate leads online. * ICD Research has been established as an autonomous division providing clients with insight and analysis of market research data. * Operating in rapidly growing market

* Over ‚£2billion spent on internet advertising in 2006, a 41.2% increase on a

like-for-like basis compared with 2005 (Source: IAB)

* Online advertising now represents over 12% of the total advertising market

- and is the fastest-growing segment of the market (Source: IAB) * Online Retail spend predicted to reach ‚£40 billion by 2010 (Source: Forrester Research)

* Focus on dominating UK market in key areas of online advertising and market

research

* Members of the Direct Marketing Association (DMA) and Internet Advertising

Bureau (IAB) CHAIRMAN'S STATEMENT

Once more, I am delighted to announce the Group's results for the year ended 30 April 2007 with significant increases in both revenue and profitability.

Revenue for the year was ‚£16.1m, an increase of 79% over 2006 (‚£9.0m).Operating Profit increased by 93% to ‚£3.27m (2006:‚£1.7m). Gross margin wasconsistent with 2006 at 56.4% (2006: 56.3%) and gross profit grew by 78% to ‚£9.1m (2006: ‚£5.1m). Headline earnings per share were 5.5p, an increase of 104%(2006:2.7p) and on a diluted basis were 5.2p an increase of 63% (2006:3.2p).Net cash at the year end was ‚£1.55m (2006:‚£1.2m), after having spent ‚£1.35m onshare buybacks during the year.The year has delivered to management expectations. Increased synergies betweenTMN Media, which has over 10 million names across 20 different databases, andEDR, the UK's largest planning and buying agency of email, have resulted inlarger than expected inter-group sales, reflecting the high quality of theinventory now held within TMN Group. iD Factor has benefited from astrengthening of its management structure and a focus on project delivery withthe resultant improvement in financial performance apparent in the finalquarter. Growth in the market, according to the IAB, continues strongly withover ‚£2bn spent on internet advertising in 2006.During the year we have made a number of developments within our divisions. TMNMedia launched their competition portal, Plum-Offers, in October 2006 and it isalready generating material revenues by providing users for advertisers'databases. EDR has launched Pure Lead, servicing clients looking to generateleads online, it reduces workload significantly and increases clarity enablingsuppliers to generate the highest quality new users. We have already seen keywins in this area and believe that it will contribute to EDR's continued growthand market share. We also launched ICD Research, a market research analysiscompany which sits side by side with iD Factor and ensures we can offer bothfieldwork and full service market research solutions to our clients.The Group has grown significantly over the past two years and we believe thatwe are now well resourced and structured to strengthen our position as the UK'spremier online direct marketing services group. We are in a unique positionwith our three core divisions, and with new developments and launches on thehorizon, we are confident that we can continue to strengthen our positionwithin the online direct marketing and research sectors in the UK over thecoming years. The market continues to grow at a substantial rate and we aim tocontinue to meet and exceed this growth rate in the coming year.As announced in January 2007, our long-serving Financial Director, PeterCoveney, has decided to retire and will be leaving TMN Group in August 2007.Peter has been a highly valued member of the team and we wish him all the verybest in the future.We are pleased to announce that we have now recruited Peter's replacement.Craig Dixon joined us in early June and will take on the role of CFO/COO and isappointed a director with immediate effect. Craig has a long and successfulbackground as a CFO in various Virgin Group companies. We look forward tobenefiting from Craig's undoubted experience and wish him every success in hisnew position with the Group.

It only remains to thank our staff for their dedication and enthusiasm and our growing list of supportive shareholders.

Warren TaylerChairmanBUSINESS REVIEW

TMN's position as one of the leading online direct marketing service groups in the UK strengthened further over the last year, with the Group now set to capitalise further on the growing market opportunity.

With three core divisions covering a unique blend of online media, agency and research services, the Group has both the appropriate structure and clear strategy to ensure that we capitalise on the undoubted market opportunity.

I am pleased to note that our success continues to drive increased shareholdervalue, with records set in revenue, PBT and EPS. Further evidence of ourincreasing profile and success came with our first national accolade, OnlineCompany of the Year, at the T-Mobile Growing Business awards in April.

Online Market Growth

2006 saw continued growth for online advertising, fuelled by further migrationfrom traditional advertising mediums to the internet. Over 12% of advertisingspend is now allocated to online. The benefits of internet advertising, coupledwith the fact that the internet is second only to TV in the number of hoursspent by consumers each week on the medium, is driving year-on-year growth byan anticipated 35-40%.The internet has revolutionised the way we communicate and gather information.It is the Group's continued goal to ensure we offer clear and concise servicesand opportunities to advertisers to reach consumers, and see an ever-increasingreturn on their investment. Quality of service remains central to ourofferings.

Our Strategy

2006 saw the integration of our two acquisitions from late in the previousyear, EDR and The iD Factor, and the maturing of the Group as we changed ourname to TMN Group plc from themutual.net, and focused on building a fullservice offering to our clients. Strategically, with the integration of thecompanies complete and housed in a single location in Holborn, London, we arenow well positioned to build on our history of success and deliver a range ofservices to online advertisers.

TMN Media

TMN Media generated gross profit of ‚£6.0m (2006: ‚£4.3m) representing 73.1%(2006: 62.9%) of revenue, which increased 21% for the year at ‚£8.3m (2006: ‚£6.8m).TMN Media offers advertisers a range of opportunities to reach consumersthrough email and websites. Investment in technology over a number of years hasput TMN Media at the forefront of email delivery, allowing it to service 10million consumers over multiple databases. Many of the databases are owned,offering high margin business, and based on having strong relationships withthe users. We also support the advertising sales for numerous high branddatabases such as ASOS, Handbag.com and thetrainline. This is truly a uniqueoffering, giving advertisers a broad range of choice in getting the rightexposure and response to their advertising.Understanding the benefits of sending targeted and relevant email is a keyfacet of the success of TMN Media. The email industry is highly regulated inorder to prevent spam, with EU legislation in 2003 guiding credible emailproviders with rules on how to opt-in and treat members of databases. TheGroup's data compliance policies ensure that only users who want to receiveemail from the databases we own and run are targeted. Our approach being thatthere is no point in a user receiving email, from whatever source, if they arenot going to respond positively.As with the rest of the Group, TMN Media benefited from some notabledevelopments. We launched our new competition & lead generation website, www.plum-offers.com, which offers advertisers a safe and high quality route togenerating prospects for their own databases. Essentially, we are passing onour expertise in buying members for owned and partnered databases, allowing ourclients a unique and valuable insight and partner in generating databases ontheir behalf."Lead Generation" is one of the fastest growing sectors in internet advertisingin the US (source: IAB US), and we believe that TMN Media, with Plum-Offers,together with EDR's latest offering, is well positioned to become a majorplayer in this area.

EDR

Revenue increased 26.1% to ‚£5.9m (2006: ‚£4.7m) and gross profit rose to ‚£1.9m(2006: ‚£1.4m), representing 31.5% of revenue, up from 29.1% the previous year.2006 comparatives are pro forma to provide a better comparison of performance on an annual basis.Our purchase of EDR, one of the UK's leading email marketing service companies,in 2005 was significant in the transformation of the Group. With its previousmedia products, which ranged from owned databases to management of email listsfor advertisers, moved into TMN Media, EDR, as an advertising agency, was freeto focus on becoming the UK's largest planner and buyer of email marketing.EDR's client roster has increased significantly over the past 12 months, withresponsibility for booking email campaigns across third party lists for thelikes of Next, AIG Life, BUPA and Capital One.EDR's position as the UK's leading planner and buyer of email is being furthercemented by proprietary technology which offers them a unique edge in thedigital space. Pure Lead, a service to companies building databases, waslaunched at the end of the financial year. Essentially, rather than the clienthaving to deal with 30 or 40 different suppliers and a similar number ofdatabases which need to be combined into one, Pure Lead takes away theworkload, bringing all data into a central source, ensuring there are noduplicates, testing each email address and clarifying for the client whichsuppliers offer the best value. Early signs are that the market is particularlyreceptive to this technology, and it is with some confidence that we look to afuture when EDR will become the dominant agency across both the email marketingand lead generation sectors.The synergies offered between EDR and TMN Media are becoming clearer as tradingcontinues to progress. Around 20% of EDR's spend is now being booked onto TMNMedia's lists, solely due to the high quality of responsive databases that TMNMedia is able to offer. As TMN Media continues toward its goal to become themost notable source of high-quality email lists, so EDR, as the UK's premieremail marketing agency, will be able to utilise further TMN Media's lists forits clients.The iD FactorThe iD Factor grew revenue by 89.7% over the year to ‚£1.9m (2006: ‚£1m). Grossprofit increased to ‚£1.2m (2006: ‚£0.7m), however, as a percentage of revenuethis fell from 68.6% in 2006 to 61.5%. 2006 comparatives are pro forma toprovide a better comparison of performance on an annual basis.The iD Factor differs from the other two core divisions in its operations,focusing on providing market research agencies with respondents to surveys.Based on the concept of "fieldwork", this is a fast evolving market, replacingtelephone canvassing and one-to-one outdoor survey requests that are relativelylaborious and slow. Around 15% of market research is currently carried outonline, in the US, over half is conducted online and we believe this will bereplicated in Europe.The premise of The iD Factor's business is straightforward: utilising eitherowned panel (in the UK) or our partners (over 41 across the globe, with reachto over 4 million panellists), we are able to get responses to highly targeted,relatively time consuming surveys, which are then fed back to the bookingmarket research agency for analysis. Revenues are generated with each completedsurvey, so quality of panel is key to success.The average survey response time is around 20 minutes. Our panellists, nownumbering approximately 250,000 in the UK, are fully opted in members who arerewarded for their time. Utilising the Group's expertise in data segmentationand email marketing, The iD Factor is able to highly target panellists, whileexpertise in data and Quality Assurance ensures that the responses to thesurveys are accurate and consistent behaviourally.Synergies were self-evident throughout the year. For example, TMN Media is ableto target its email and website members, inviting them to join The iD Factorpanels - we see this as a significant advantage, since we will be able to seehow a member behaves across all databases and target them accordingly.Market research is frequently Pan-European, so, unlike the UK-centric TMN Mediaand EDR, many projects require The iD Factor to utilise panels in Europe andglobally. Currently, 41 partners provide access to the global market, albeitwith a lower margin than our owned panels. This offers our clients a one-stopservice with the same high quality that we are able to offer in the UK.A year of evolution has brought The iD Factor to a very promising position.During the first nine months of ownership the division was based in Richmond,following the move to Holborn we have been able to utilise the management andsynergies that exist elsewhere in the Group. With increased quality ofmanagement integrated toward the end of Q3 and further investment in staffsince the year end, we believe that The iD Factor is well placed to takeadvantage of being part of a larger group.

Development

In May 2006, we created a separate department, TMN Enterprise, which is focusedon creating new technology and opportunities for the Group. It was responsiblefor developing Plum-Offers and Pure Lead, and is currently working on honingour email delivery technology, to create a fourth division, called Envoy. Webelieve that we are perfectly positioned to offer our clients and advertisersemail delivery that is based on our many years of experience and success. Wehave also recognised further uses for our Envoy technology which we lookforward to discussing in the near future.We also launched ICD Research later in 2006, which acts as both an insightdivision for the rest of the group as well as offering market research analysisfor end clients. This is different to The iD Factor in that it is focused onthe analysis service end as opposed to the supplying of completed surveys.

Current Trading and Update

Our staff are fundamental to our success and therefore I would personally liketo thank them for their work this year. I believe we have created an enticingand exciting place to work, and our low staff turnover reflects this.The Group remains financially strong, with excellent cash-conversion, andremains perfectly positioned to succeed further in what is undoubtedly the mostexciting media sector that we have seen for many years. We remain excited aboutthe Group's prospects for the current year and beyond.

Mark Smith

CEO

CONSOLIDATED INCOME STATEMENT

YEAR ENDED 30 APRIL 2007 2007 2006 Note ‚£'000 ‚£'000 Revenue 16,095 9,012 Cost of sales (7,015) (3,940) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Gross profit 9,080 5,072 Administrative expenses (5,808) (3,383) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Operating profit 3,272 1,689 Profit on disposal of - 440

available-for-sale investments

Interest on bank deposits 18 55 Finance costs (7) (2)

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Profit before tax 3,283 2,182 Tax (558) (657)

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Profit after tax 2,725 1,525

¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢

Profit attributable to the equity 2,725

1,525holders of the parent ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ Earnings per share 3 Basic (pence) 5.5p 3.5p ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ Diluted (pence) 5.2p 3.2p ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢

The results for the current and prior year are derived from continuing operations.

CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSES

YEAR ENDED 30 APRIL 2007 2007 2006 Note ‚£'000 ‚£'000 Taken direct to equity

Gain on sale of shares acquired as 763

-

fractional entitlements following the share consolidation on 4 December 2006

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Net income recognised directly in 763

-equity Profit for the period 2,725 1,525 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Total recognised income for the period 3,488

1,525 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢

Profit attributable to the equity 3,488

1,525holders of the parent ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢CONSOLIDATED BALANCE SHEET30 APRIL 2007 2007 2006 Note ‚£'000 ‚£'000 Non-current assets Goodwill 7,300 9,093 Other intangible assets 461 383 Property, plant and equipment 147 97 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 7,908 9,573 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Current assets Trade and other receivables 4,533 3,342 Deferred tax asset 26 - Cash and cash equivalents 1,551 1,221

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

6,110 4,563

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Total assets 14,018 14,136

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Current liabilities Trade and other payables 2,663 2,802 Current tax liabilities 381 534 Provisions 956 641

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

4,000 3,977

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Non-current liabilities Provisions 934 4,350

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Total liabilities 4,934 8,327

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Net assets 9,084 5,809

¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢

EQUITY Called up share capital 4 105 105 Share premium account 5,809 4,702 Share based payment reserve 70 41 Other reserves 121 120 Retained earnings 2,979 841 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Total equity 5 9,084 5,809 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢

CONSOLIDATED CASH FLOW STATEMENT

YEAR ENDED 30 APRIL 2007 2007 2006 Note ‚£'000 ‚£'000

Reconciliation of operating profit to

operating cash flows Operating profit 3,272 1,689 Depreciation 102 73 Amortisation - database 399 505 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Operating cash flows before movements 3,773

2,267in working capital Share based payments expense 29 14

(Increase) / decrease in receivables (1,191)

(967)

(Decrease) / increase in payables (133)

569

(Decrease) / increase in provisions (149)

69

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Cash generated from operations 2,329

1,952 Interest paid (7) (2) Income tax paid (735) (512) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Net cash from operating activities 1,587

1,438 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Investing activities Interest received 18 54 Proceeds on disposal of - 561

available-for-sale investments Purchases of plant, property and (152)

(51)equipment

Purchases of other intangibles - (477)

(431)database

Acquisition of subsidiaries - initial -

(2,175)consideration paid

Acquisition of subsidiaries - cash

470acquired

Acquisition of subsidiaries - deferred (198)

-consideration paid

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Net cash (used in) / from investing (809)

(1,572)activities

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Financing activities

Proceeds on issue of shares - share 139

-options exercised Purchase of own shares (1,350) (200)

Proceeds from share re-organisation 763

-

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Net cash from / (used in) financing (448)

(200)activities

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Net increase / (decrease) in cash and 330

(334)cash equivalents

Cash and cash equivalents at the 1,221

1,555beginning of the period

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

Cash and cash equivalents at the end of 1,551

1,221the period

¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢

Cash and cash equivalents represent the sum of the Group's bank balances andcash in hand at the balance sheet date as disclosed on the face of the balancesheet.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEAR ENDED 30APRIL 2007 1. ACCOUNTING POLICIES Basis of accountingThe financial statements have been prepared, for the first time, in accordancewith International Financial Reporting Standards (IFRS) with a transition dateof 1 May 2005. The financial statements have also been prepared in accordancewith International Financial Reporting Standards including InternationalAccounting Standards (IAS) and interpretations issued by the InternationalAccounting Standards Board (IASB) and its committees, and as interpreted by anyregulatory bodies applicable to the group as adopted for use in the EuropeanUnion and therefore comply with Article 4 of the EU IAS Regulation. Thedisclosures required by IFRS1 First-time adoption of IFRS concerning thetransition from UK GAAP to IFRS are given in note 25.

The financial statements have been prepared on the historical cost basis.

Basis of consolidation

The consolidated financial statements incorporate the results of the companyand all of its subsidiary undertakings up to 30 April 2007. Unless otherwisestated, the acquisition method of accounting has been adopted. Under thismethod, the results of the subsidiary undertakings acquired in the year areincluded in the consolidated profit and loss account from the date ofacquisition.

The group consolidated financial statements incorporate the financial statements of TMN Group plc and its subsidiary undertakings. As permitted by Section 230 of the Companies Act 1985, a separate income statement is not presented in respect of the company.

Key accounting judgements and sources of estimation uncertainty

The company makes various judgements in applying its accounting policies andvarious assumptions and estimates, including about the future, when determiningthe carrying value of certain assets and liabilities. As at 30 April 2007 therewere no such judgements or assumptions that had a significant effect on theamounts recognised in the financial statements, or a significant risk ofcausing material adjustment to the carrying amounts of assets and liabilitiesin the next financial year.

New standards and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are not effective for 2006 and therefore have not been applied in preparing these accounts:

IFRIC 10 Interim Financial Reporting and Impairment prohibits the reversal ofan impairment loss recognized in a previous interim period in respect ofgoodwill, an investment in an equity instrument or a financial asset carried atcost. IFRIC 10 will become mandatory in the 2007 accounts. IFRIC 10 is notexpected to have any significant impact on the company. The group does not consider that any other standard or interpretations issued,but not yet applicable, will have any significant impact on the consolidatedaccounts.Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided in the normal course of business during the year, net of discounts, VAT and other sales related taxes. Sales of services are recognised with reference to the stage of completion.

Goodwill

Goodwill arising on consolidation represents the excess of the cost ofacquisition over the group's interest in the fair value of the identifiableassets and liabilities of a subsidiary, associate or jointly controlled entityat the date of acquisition. Goodwill is initially recognised as an asset atcost and is subsequently measured at cost less any accumulated impairmentlosses. Goodwill, which is recognised as an asset, is reviewed for impairmentat least annually. Any impairment is recognised immediately in profit or lossand is not subsequently reversed.For the purpose of impairment testing, goodwill is allocated to each of thegroup's cash-generating units expected to benefit from the synergies of thecombination. Cash-generating units to which goodwill has been allocated aretested for impairment annually, or more frequently when there is an indicationthat the unit may be impaired. If the recoverable amount of the cash-generatingunit is less than the carrying amount of the unit, the impairment loss isallocated first to reduce the carrying amount of any goodwill allocated to theunit and then to the other assets of the unit pro-rata on the basis of thecarrying amount of each asset in the unit. An impairment loss recognised forgoodwill is not reversed in a subsequent period.

On disposal of a subsidiary, associate or jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Goodwill arising on acquisitions before the date of transition to IFRS has beenretained at the previous UK GAAP amounts subject to being tested for impairmentat that date.Other intangible assets

Other intangible assets, which comprise of data acquisition costs, are stated at cost, net of amortisation and any recognised impairment loss. Data acquisition costs comprise the external purchase costs of data used by customers for marketing purposes.

Amortisation is calculated so as to write off the cost of an asset, over their finite estimated useful lives, using the straight-line method as follows:

Database 50% on cost

Property, plant and equipment

Property, plant and equipment are stated at cost, net of depreciation and any recognised impairment loss.

Depreciation is calculated so as to write off the cost of an asset, over their estimated useful lives, using the straight-line method as follows:

Fixtures, fittings and computer equipment 40% on cost

Operating lease agreements

Rentals applicable to operating leases where substantially all of the benefitsand risks of ownership remain with the lessor are charged against profits on astraight line basis over the period of the lease.

Pension costs

The group does not operate any pension plans, but does administer a stakeholder pension scheme on behalf of any employees wishing to participate.

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxableprofit differs from net profit as reported in the income statement because itexcludes items of income or expense that are taxable or deductible in otheryears and it further excludes items that are never taxable or deductible. Thegroup's liability for current tax is calculated using tax rates that have beenenacted or substantively enacted by the balance sheet date.Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the computation of taxableprofit, and is accounted for using the balance sheet liability method. Deferredtax liabilities are generally recognised for all taxable temporary differencesand deferred tax assets are recognised to the extent that it is probable thattaxable profits will be available against which deductible temporarydifferences can be utilised. Such assets and liabilities are not recognised ifthe temporary difference arises from the initial recognition of goodwill orfrom the initial recognition (other than in a business combination) of otherassets and liabilities in a transaction that affects neither the tax profit northe accounting profit.Deferred tax liabilities are recognised for taxable temporary differencesarising on investments in subsidiaries and associates, and interests in jointventures, except where the group is able to control the reversal of thetemporary difference and it is probable that the temporary difference will notreverse in the foreseeable future.The carrying amount of deferred tax assets is reviewed at each balance sheetdate and reduced to the extent that it is no longer probable that sufficienttaxable profits will be available to allow all or part of the asset to berecovered.Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset is realised. Deferred tax ischarged or credited in the income statement, except when it related to itemscharged or credited directly to equity, in which case the deferred tax is alsodealt with in equity.Deferred tax assets and liabilities are offset when there is a legallyenforceable right to set off current tax assets against current tax liabilitiesand where they relate to income taxes levied by the same taxation authority andthe group intends to settle its current tax assets and liabilities on a netbasis.

Impairment of tangible and intangible assets excluding goodwill

At each balance sheet date, the group reviews the carrying amounts of itstangible and intangible assets to determine whether there is any indicationthat those assets have suffered an impairment loss. If any such indicationexists, the recoverable amount of the asset is estimated in order to determinethe extent of the impairment loss. Where the asset does not generate cash flowsthat are independent from other assets, the group estimates the recoverableamount of the cash-generating unit to which the asset belongs. An intangibleasset with an indefinite useful life is tested for impairment annually andwhenever there is an indication that the asset may be impaired.Recoverable amount is the higher of fair value less costs to sell and value inuse. In assessing value in use, the estimated future cash flows are discountedto their present value using a pre-tax discount rate that reflects currentmarket assessments of the time value of money and the risks specific to theasset for which the estimates of future cash flows have not been adjusted.If the recoverable amount of an asset or cash-generating unit is estimated tobe less than its carrying amount, the carrying amount of the asset orcash-generating unit is reduced to its recoverable amount and the impairmentloss is recognised as an expense immediately.When an impairment loss subsequently reverses, the carrying amount of the assetor cash-generating unit is increased to the revised estimate of its recoverableamount, but so that the increased carrying amount does not exceed the carryingamount that would have been determined had no impairment loss been recognisedfor the asset or cash-generating unit in prior years. A reversal of animpairment loss is recognised as income immediately.

Financial instruments

Financial assets and financial liabilities are recognised on the group's balance sheet when the group becomes a party to the contractual provisions of the instrument.

Trade receivables

Trade receivables do not carry any interest and are measured at their nominal value as reduced by any appropriate allowances for irrecoverable amounts.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits, and othershort-term highly liquid investments that are readily convertible to a knownamount of cash and are subject to an insignificant risk of changes in value.

Financial liabilities and equity

Financial liabilities and equity instruments are classified according to thesubstance of the contractual arrangements entered into. An equity instrument isany contract that evidences a residual interest in the assets of the groupafter deducting all of its liabilities.

Bank borrowings

Interest-bearing bank loans and overdrafts are recorded at the proceedsreceived, net of direct issue costs. Finance charges are accounted for on anaccruals basis in profit or loss using the effective interest rate method andare added to the carrying amount of the instrument to the extent that they arenot settled in the period in which they arise.

Trade payables

Trade payables are not interest bearing and are stated at their nominal value.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received,net of direct issue costs.ProvisionsProvisions are recognised when the group has a present obligation as a resultof a past event, and it is probable that the group will be required to settlethat obligation. Provisions are measured at the directors' best estimate of theexpenditure required to settle the obligation at the balance sheet date, andare discounted to present value where the effect is material.

Other Provisions

Provision for the expected redemption cost of reward points issued by the company's shopping portal, mutualpoints.com, is charged against profit. The provision represents the estimated future liabilities of unredeemed points where revenue attributable to the points issued has been recognised. The provision is calculated using a standard costing method making certain assumptions concerning redemption levels. In forming these judgements, the directors have assessed the anticipated future profile of points redemptions based on past experience of redemptions.

Share-based payments

The group has applied the requirements of IFRS 2 Share-based payment. In accordance with the transitional provisions, IFRS 2 has been applied to all grants of equity instruments after 7 November 2002 that were unvested at 1 January 2005.

The group operates a number of equity-settled share-based payment schemes underwhich share options are issued to certain employees. Equity-settled share-basedpayments are measured at fair value (excluding the effect of non market-basedvesting conditions) at the date of grant. The fair value determined at thegrant date of the equity-settled share-based payments is expensed on astraight-line basis over the vesting period, based on the group's estimate ofshares that will eventually vest and adjusted for the effect of nonmarket-based vesting conditions.

Fair value is measured by use of the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations

2. DIVIDENDS

No dividend has been recommended for the year (2006: ‚£nil).

* EARNINGS PER SHARE

The calculation of earnings per share is based on the following profits andnumber of shares: 2007 2006 Profit Number Pence Profit Number Pence of per of per ‚£'000 shares share ‚£'000 shares share `000 `000 Headline earnings 2,725 49,646 5.5 1,217 43,936 2.7per share* Reconciliation to reported earnings (net of tax at 30%): -profit on available-for-sale Investments 308 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬Basic earnings per 2,725 49,646 5.5 1,525 43,936 3.5share Dilutive effect of securities: Share options 2,144 3,136 Deferred consideration to be settled in shares 934 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Diluted earnings per 2,725 52,724 5.2 1,525 47,072 3.2share ¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ *Headline earnings per share excluding profit on available-for-sale investmentsrelating to the prior year have been disclosed as the directors consider thatthis figure provides a consistent measure of the underlying performance.4. CALLED UP SHARE CAPITALAuthorised share capital: 2007 2006 ‚£'000 ‚£'000

100,000,000 Ordinary shares of ‚£0.0001 10 10each 100,000 Deferred shares of ‚£1.00 each 100 100

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 110 110 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢

Allotted, called up and fully paid:

2007 2006 No'000 ‚£'000 No'000 ‚£'000

Ordinary shares of ‚£0.0001 each 49,733 5 48,060

5

Deferred shares of ‚£1.00 each 100 100 100

100 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ 105 105 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢

Ordinary shares issued/cancelled in the year:

Transaction Date Purpose No'000 Value ‚£'000 Shares at 1 May 2006 48,060 08/06/06 Conversion of units 37 - 18/07/06 Options exercised 200 39 18/07/06 Options exercised 1,815 100 03/08/06 Purchase of own shares (800) (496) 06/09/06 Conversion of units 40 - 08/09/06 Acquisition of 1,550 968 subsidiary 07/12/06 Purchase of own (1,169) (854) shares ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Shares at 30 April 2007 49,733 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢

The movement in share capital during the year represents an aggregate nominal value of ‚£167.

Following approval at the AGM on 1 December 2006 the company immediately reorganised its share capital as follows:

Every 11 existing ordinary shares of ‚£0.0001 each were consolidated andredesignated as one ordinary share of ‚£0.0011, and immediately following theshare capital was reorganised further by dividing and redesignating each newlycreated share of ‚£0.0011 into 11 new ordinary shares of ‚£0.0001 each.This reorganisation was carried out as the company had a substantial number ofshareholders and nominee accountholders, many of whom held 10 shares. The Boardbelieved that many smaller shareholders and nominee accountholders had beendeterred from selling shares as a result of dealing costs being higher than thesale price of their entire holding. The Board had also become increasinglyconcerned at the cost of servicing a share register containing such a largenumber of small shareholders. The reorganisation was carried out with a view toachieving a significant reduction in the ongoing costs to the company whilegiving smaller shareholders and nominee accountholders an opportunity torealise some value from or make a charitable donation of their shares.

Deferred shares:

The rights and restrictions attached to and imposed on the deferred shares are as follows:

a) The deferred shares shall not confer upon the holders thereof as a class,the right to receive any dividend, distribution or other participation in theprofits of the company.

b) The deferred shares do not entitle the holders to receive notice of or to attend and speak or vote at any general meeting of the company.

c) On distribution of assets on liquidation or otherwise, the surplus assets ofthe company remaining after payments of its liabilities shall be applied firstin repaying to holders of the deferred shares the nominal amounts and anypremiums paid up or credited as paid up on such shares, and second the balanceof such assets shall belong to and be distributed among the holders of theordinary shares in proportion to the nominal amounts paid up on the ordinaryshares held by them respectively5. TOTAL EQUITYGroup Share Share Based Share Premium Payment Other Retained Capital Account Reserve Reserves Earnings Total ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 At 1 May 2005 104 2,331 - 120 (457) 2,098 IFRS adjustment 27 (27) - ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

At 1 May 2005 restated 104 2,331 27 120 (482) 2,098 Issue of shares 1 2,371 2,372 Purchase of own shares (200) (200) Retained profit 1,539 1,539 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ At 1 May 2006 105 4,702 27 120 855 5,809 IFRS adjustment 14 (14) - ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ At 1 May 2006 restated 105 4,702 41 120 841 5,809 Issue of shares 968 968 Share options exercised 139 139 Purchase of own shares (1,350) (1,350) Net income recognised 763 763directly in equity Retained profit 2,725 2,725 Share based payments 29 29 ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬

At 30 April 2007 105 5,809 70 120 2,979 9,084 ¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢

¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢

6. RELATED PARTY TRANSACTIONS

The company had the following balances with group undertakings at the year end: 2007 2006 ‚£'000 ‚£'000 Amounts owed by group undertakings 2,863 1,622 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ Amounts owed to group undertakings 207 321 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢

Management charges of ‚£3,480,000 (2006: ‚£1,975,000) were made to group undertakings during the year.

At 30 April 2007 the company had in issue a ‚£100,000 (2006: ‚£100,000) 2% loannote payable to J Gumbrell following the acquisition of ID Factor Limited. JGumbrell resigned as a director on 20 September 2006.

7. TRANSITION TO IFRS

These financial statements have been prepared, for the first time, in accordance with International Financial Reporting Standards (IFRS).

The comparative information relating to the year ended 30 April 2006 is basedon the group's statutory accounts, which were prepared in accordance withUnited Kingdom Generally Accepted Accounting Principles (UK GAAP), restated forIFRS. The effect of this restatement is set out below: Group ‚£'000 Retained earnings At 1 May 2005 under UK GAAP (457) IFRS adjustments: Share based payments (27) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ At 1 May 2005 under IFRS (484) ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢ Profit after tax for the year ended 30 April 2006 Profit after tax under UK GAAP 1,539 IFRS adjustments: Share based payments (14) ¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬¢â€â‚¬ Profit after tax under IFRS 1,525 ¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢¢â€¢

The balance sheet impact of adopting IFRS is set out in note 5.

Employee options and performance share schemes - IFRS 2 Share based payments:

All transactions within the scope of IFRS 2 are valued on the fair value of the option or award at grant date and expensed to the income statement over the vesting period of the scheme.