Digitalbox Regulatory News (DBOX)

2 Apr 2008 07:00

PLUS Markets Group plc

Preliminary results for the year ended 31 December 2007

PLUS Markets Group plc (the "Company") reports its preliminary results for the year ended 31 December 2007.

Highlights

* Establishment of a new small and mid-cap equity stock exchange in London;

* Dramatic rise in trading volumes, following successful launch of new platform;

* Over 600 small and mid-cap companies now see the majority of their trading

take place on PLUS, of which over 400 are listed or quoted on other

markets;

* Revenues of ‚£3.10 million (2006 - ‚£2.17 million) up 43% on the previous

year, being the second consecutive year of 40+% growth;

* Loss for the year of ‚£2.98 million (2006 - ‚£1.24 million), in line with

budgeted infrastructure development; and

* Clear path to cash generation in 2009, subject to receiving the right to

trade all AIM securities.

Commenting on the annual report, Chief Executive Officer Simon Brickles said:

"We are proud to have established a new small and mid-cap stock exchange forLondon, at a time when the European exchange industry is going through a periodof momentous change following the introduction of the Markets in FinancialInstruments Directive. Our rapid progress in capturing liquidity demonstratesempirically that there is customer demand for our competitive offering. We lookforward with confidence to the introduction of wider competition, therebyallowing investors to access the best execution possibilities potentiallyavailable on PLUS in respect of all AIM securities."

For further information, please contact:

Simon Brickles/Nemone Wynn-Evans 020 7553 2000

PLUS Markets Group plc

Nick Westlake/Charles Farquhar 020 7260 1000

Numis Securities Ltd (Nominated Advisor and Broker)

John Parry 020 7490 8062

Rostron Parry (PR Enquiries)

Chairman's statement

It gives me great pleasure to confirm your Company's confident progress towardsestablishing itself as a leading small and mid-cap equity stock exchange inLondon. It is also with some sense of achievement that to this end, during thefinancial year to 31 December 2007, PLUS Markets Group successfully met its keymilestones as set out in its Placing prospectus of December 2006.

Rapid infrastructure development

Shareholders approved the Placing at an EGM on 8 January 2007, raising ‚£25 million to strengthen the Company's balance sheet, to command additional customer and regulatory confidence, improve its trading platforms ahead of MiFID, recruit and retain high-calibre staff, expand sales and relationship management activities, and develop and promote services and products.

Following the Placing, the Company's management team was strengthened significantly. Brian Taylor brought to the Board his unrivalled global expertise in installing exchange trading technologies. Our Board also welcomed Cyril Theret as Business Development Director and two new non-executive Directors, Ian Salter and Giles Vardey. Additional senior management was recruited across business development, IT, regulation and operations.

We were pleased to confirm in July, as foreshadowed at the time of the Placing,that our operating subsidiary, PLUS Markets plc, had been granted RecognisedInvestment Exchange status, elevating our market to a fully competitiveUK-based stock exchange. The successful establishment of a new stock exchangein London, as the world's deepest pool of international capital, is animportant asset for the City.

In time for the implementation of MiFID in November 2007, and also as foreshadowed at the time of the Placing, the Company launched a new, integrated, trading and market surveillance technology platform. This was supplied under an agreement with OMX Technology Ltd, a subsidiary of OMX AB ("OMX"), to deliver their "X-Stream" platform. The choice of platform was driven by: its ability to increase our equity stock coverage and also trade new products; its proven reliability; and the scalability in its trading mechanism.

The platform was implemented by Brian Taylor and our IT team, in remarkablyshort order and on budget, and it is a great credit to Brian that such anambitious project was delivered with such convincing success and in time forMiFID. Following this major accomplishment, securing the technologicalfoundations of our future offering, Brian will be stepping down from the Boardat the AGM; however, he will continue to supervise the work of the Financedepartment in the short term, until alternative arrangements are put in place.Moreover, we will continue to benefit from his wide-ranging expertise, since hewill remain as a consultant to the Company in order to complete some furtherenhancements, including wider electronic connectivity - allowing for messagerouting between PLUS market participants and the enhanced PLUS trading platform- as set out at the time of the Placing.

Widening the appeal of our Capital Markets

The PLUS market is now an increasingly compelling listing and quotationdestination. Becoming a full stock exchange has enabled the Company to open upa new "PLUS-listed" market, designed to serve the needs of issuers seeking anAdmission to Trading on an RIE in conjunction with an Official Listing by theFinancial Services Authority. This has brought competition to this part of theUK equity market for the first time. Additionally, it has opened up the"PLUS-quoted" market to a wider pool of investors, thereby enhancing itsability to support equity fundraisings for companies on PLUS.Pursuant to this enhanced investor appeal, our PLUS-quoted market for small andmid-cap companies is experiencing a significant rise in demand. The number ofPLUS-quoted companies rose for a third consecutive year to 217 by the year end(of which 10% were international companies), with more than double the amountof capital raised than in the previous year.PLUS now has a sound liquidity base from which to support future growth for thePLUS-quoted market, at a time when there are calls from the smaller companiescommunity for a new growth market in London. We therefore intend actively toraise its profile this year, via a wide-ranging programme of sales andmarketing activities, to respond to this customer demand. In the past, we haveseen companies move from PLUS onto AIM. Attracted by our deepening pool ofsmall and mid-cap liquidity, this year we expect to see companies transferringtheir quotation to PLUS.

Widening the appeal of our Trading Services

The PLUS market is now becoming an established pool of small and mid-capliquidity, experiencing tangible demand for its trading offering and competingcredibly against other trading venues. Our new platform has supported asignificant expansion of our trading services, allowing investment firms tomeet all their on-exchange and off-exchange execution, reporting andtransparency needs under MiFID on PLUS. Some 60 investment firms have alreadybeen attracted to become trading members of PLUS, seeking to access bestexecution possibilities at the lowest cost available in London.As a result, the average daily number of trades on PLUS exceeded that of othersmall and mid-cap markets such as AIM for the first two months of 2008, whilePLUS captured over 50% of all UK retail trades for the first time in January.Over 600 small and mid-cap companies now see the majority of their trading takeplace on PLUS, of which over 400 companies are listed or quoted on othermarkets. By attracting market share, PLUS market data becomes increasinglyattractive to both the buy-side and sell-side communities, to see the completepicture of London trading activity when making their investment decisions.These strong indications of demand give your Board assurance that the Company'sstrategy accords with the needs of its chosen customers. However, your Companyis currently unable to deploy its trading services offering where itscomparative advantage is greatest - namely, across the AIM market.

Trading AIM securities

Your Board believes that were the current regulatory restriction to be removed,all AIM companies and their investors would benefit from being able to accessthe competitive trading environment already available to fully listed companiespost-MiFID. The PLUS quote-driven market model offers high quality execution,which investment firms are currently unable to access in respect of AIMsecurities to achieve best execution.AIM companies could benefit substantially from access to liquidity available onother trading platforms, as well as from competition between those platformsbringing down the cost of trading. At present, prior to being admitted todual-trading on PLUS, PLUS requires AIM companies to give their consent, inorder to fulfil its regulatory obligations to the FSA. Some 80 companies havedone so, of which three-quarters now see half or more of their total Londontrading activity taking place on PLUS, indicating that when investors areoffered more than one execution venue, ours is their market of choice.Your Board believes that were the Company able to trade all AIM securities inthe same way as it can trade fully listed securities, the PLUS market wouldrepresent more than half the liquidity in more than half of all the companieslisted or quoted in the United Kingdom.The Financial Services Authority issued a discussion paper in July 2007 inrelation to trading unlisted shares, including AIM. This followed a ministerialstatement by the then Economic Secretary to the Treasury in February, in whichHM Treasury indicated its desire to remove outstanding obstacles to opencompetition in the sphere of AIM trading. We are fully supportive of theTreasury's pro-competitive initiative and your Board hopes - and confidentlyexpects - that such proposals will be further pursued by the FSA and theTreasury this year.

Future developments

We now have substantially all our resources in place to support significant future revenue growth from increased listing and trading activity, including AIM trading. Provided your Company is able to trade all AIM securities on a more competitive basis before the end of this year, the Board expect the Company to become cash generative in 2009. With most of our infrastructure complete, we expect our cost base to peak in 2008 as we finalise the full development of our market offering, following which our cost base will stabilise. A discussion of this year's results follows in the Financial Review.

At the time of the Placing approved on 8 January, the Company stated thatwithin twelve months of attaining RIE status, it intended to consider a move tothe Official List. Admission to the Official List would enable the Company toadmit its shares to trading on its own "PLUS-listed" market, and would beconditional on shareholder approval. The Board, having duly considered thismove and with the belief that "PLUS should be on PLUS", intend to consultshareholders in conjunction with the publication of the Company's interimresults in September 2008, and the Company receiving the right to trade all AIMsecurities.Your Board confirms that the Company's strategic ambition, to become a leadingsmall and mid-cap equity stock exchange in London, is being implementedsuccessfully and its chosen market model is proving effective. As apro-competitive exchange in a rapidly changing post-MiFID marketplace, we viewthe future with great confidence.Stephen Hazell-SmithChairman1 April 2008Financial Review

The following is extracted from the Financial Review, the full version of which is contained in the Company's Annual Report.

The Company has received Recognised Investment Exchange (RIE) status, investedin a world class trading technology infrastructure and has retainedinternationally recognised personnel to enable PLUS to compete effectively withthe largest of exchanges and trading platforms. This has been achieved whilst:

* growing the client base to 217 PLUS-quoted issuers, 60 broking/market

making clients, 9 market data vendors and a significant growth in traded

volumes; * maintaining a favourable cost base compared to competing platforms; and * enabling the Company to provide a highly cost effective listing and

quotation venue with the ability to maximise liquidity at the lowest cost

per transaction for trading execution and market data.

The Company increased its net assets in the year from ‚£2.6m to ‚£24.1m. ThePlacing in January 2007 raised ‚£23.9m net of expenses. The Company has used itscash resources carefully and has invested in intangible assets. It is wellpositioned to continue in its planned growth going forward.Total revenues grew to ‚£3.1m in 2007, being an increase of ‚£0.9m or 43% incomparison to 2006. The Company has achieved a 40+% growth in revenues twoyears in succession. Growth has mainly been in the Capital Markets area of theCompany's business which covers services to PLUS-quoted issuers. 60 companiesjoined the PLUS-quoted market in 2007, maintaining the rate of new joiners in2006. At 29 February 2008 eight companies had joined PLUS-quoted and there werea further 11 in the pipeline.Given the success of the SHIP quote driven platform, trade volumes haveincreased significantly over the period since the launch. For example, tradingvolumes in January 2008 were up 92% compared to December 2007. In the sameperiod, the total value of trades was ‚£2.8 billion, up 61% and the number ofshares traded was 1.7 billion, up 70%. As a result, the Company is alreadyseeing a growth in the quality and importance of its data for both pre and posttransparency reasons, meaning that institutional and retail clients intendingto optimise best execution standards will need to consider taking PLUS data.

The loss for the year of 2007 was exactly in line with budget at ‚£3.0m (2006 - ‚£1.2m) with a loss per share of 0.96p (2006 - 0.93p).

The Company has adopted IFRSs for the first time in 2007. The effect of IFRSson the Company's financial statements is not significant, given the relativesimplicity of the financial statements. An explanation of the differences isshown in Note 1 below.2007 has been a year of infrastructure building, complemented by sales growth.2008 requires the development of additional technology infrastructure and thedevelopment of further relationships with existing and new customer groups,ISVs and MDVs. 2008 should see the acceleration of competition in financialmarkets and we believe the Company is very well placed to take advantage of

such competition.Brian TaylorChief Financial Officer1 April 2008

Consolidated Income Statement for the year ended 31 December 2007

Year ended 31 Year ended 31 December 2007 December 2006 ‚£'000 ‚£'000 Continuing Operations Revenue 3,101 2,169 Administrative expenses (7,107) (3,429) Charge in relation to share-based (370) (106)payments Operating loss (4,376) (1,366) Finance income 1,398 121 Loss on ordinary activities before (2,978) (1,245)taxation Taxation - - Loss for the period attributable to (2,978)

(1,245)

equity holders of the parent

Loss per share Basic and diluted (0.96)p (0.93)p

Consolidated Balance Sheet as at 31 December 2007

31 December 2007 31 December 2006 ‚£'000 ‚£'000 Non-current assets Intangible assets 3,341 642

Property, plant and equipment 108

108

Available-for-sale investments 1

1 3,450 751 Current assets Trade and other receivables 906 1,591 Cash and cash equivalents 21,006 2,348 21,912 3,939 Total assets 25,362 4,690 Current liabilities Trade and other payables (1,284) (509) Deferred income (5) (1,595) (1,289) (2,104) Net current assets 20,623 1,835 Net assets 24,073 2,586 Equity Share capital 15,734 6,731 Share premium account 16,616 1,524 Retained earnings (8,277) (5,669) Equity attributable to equity holders of 24,073 2,586the parent

Consolidated Cash Flow Statement for the year ended 31 December 2007

Year ended Year ended 31 December 31 December 2007 2006 ‚£'000 ‚£'000 Net loss from operating activities (4,376)

(1,366)

Adjustments for non cash items: Amortisation of intangible assets 286

165

Depreciation of tangible assets 71 117 Share-based payment expense 370 106 Operating cash flows before movements in (3,649)

(978)

working capital (Increase) / decrease in trade and other 684

(989)

receivables Increase / (decrease) in trade and other (815)

815

payables Net cash used in operating activities (3,780) (1,152) Investing activities Interest received 1,398 121 Purchase of non current assets (3,055)

(90)

Net cash (used in)/ generated by (1,657)

31investing activities Financing activities

Net proceeds from issue of equity shares 24,095

20

by Placing and exercise of options Net cash generated by financing 24,095

20

activities Net increase/(decrease) in cash and cash 18,658

(1,101)

equivalents Cash and cash equivalents at beginning of 2,348

3,449

year Cash and cash equivalents at end of year 21,006

2,348

Notes to the Financial Statements

1 - ACCOUNTING POLICIES

General Information

PLUS Markets Group plc ("the Company") is a company incorporated in the UnitedKingdom under the Companies Act 1985. The Company's principal activity is thatof a holding company, owning 100% of PLUS Markets plc, which is engaged in theoperation of the PLUS market and is authorised and regulated by the FinancialServices Authority. These financial statements are presented in pounds sterlingbecause that is the currency of the primary economic environment in which theCompany and its subsidiaries (together "the Group") operate.

Adoption of new and revised standards

The Group has adopted the requirements of International Financial Reporting Standards and International Accounting Standards as endorsed by the EU (collectively "IFRSs") for the first time for the purpose of preparing consolidated financial statements for the year ended 31 December 2007. Transition disclosures are provided below.

In the current year, the Group has adopted IFRS 7 "Financial Instruments:Disclosures" which is effective for annual reporting periods beginning on orafter 1 January 2007 and the related amendments to IAS 1 "Presentation ofFinancial Statements". The impact of the adoption of IFRS 7 and the changes toIAS 1 has been to expand the disclosures required in these financial statementsregarding the Group's financial instruments and management of capital. Fourinterpretations issued by the International Financial Reporting InterpretationsCommittee are effective for the current period, although the adoption of theseinterpretations has not led to any changes in the Group's accounting policies.

At the date of authorisation of these financial statements the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective:

IFRS 8 Operating Segments

IFRIC 11 IFRS 2 - Group and Treasury Share Transactions

IFRIC 12 Service Concession Arrangements

IFRIC 14 IAS 9 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction

The Directors anticipate that the adoption of these Standards andInterpretations in future periods will have no material impact on the financialstatements of the Group except for additional segment disclosures when IFRS 8comes into effect for periods commencing on or after 1 January 2009.

The following accounting policies have been applied in dealing with items that are considered material in relation to the Group's financial statements:

Basis of preparation

The financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRSs). The financial statements have also beenprepared in accordance with IFRSs adopted by the European Union and thereforethe group financial statements comply with Article 4 of the EU IAS Regulation.

The financial statements have been prepared on the historical cost basis, modified by the revaluation of available-for-sale investments. The principal accounting policies are set out below.

The preparation of financial statements in conformity with generally acceptedaccounting principles requires the use of estimates and assumptions that affectthe reported amounts of assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period. Although these estimates are based on management's bestknowledge of the amount, event or actions, actual results ultimately may differfrom those of estimates.Basis of consolidation

The consolidated financial statements incorporate the financial statements ofthe Company and entities controlled by the Company (its subsidiaries) made upto the reporting date. Control is achieved where the Company has the power togovern the financial and operating policies of an investee entity so as toobtain benefits from its activities.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

As permitted by section 230 of the Companies Act 1985, no separate income statement is presented in respect of the parent company. The loss for the financial year dealt within the financial statements of the parent company was ‚£3.0m (2006 - ‚£1.2m)

Financial Instruments

Available-for-Sale Investments

Investments designated as available-for-sale are measured at fair value, withgains and losses arising from changes in fair value being recognised directlyin equity.

Trade and Other Receivables

Trade and other receivables are measured at fair value, based on their invoicevalue. Appropriate allowances for estimated irrecoverable amounts arerecognised in the Income Statement when there is objective evidence that theasset is impaired. The allowance recognised is measured as the differencebetween the asset's carrying amount and the estimated recoverable amount.

Trade and Other Payables

Trade payables are initially measured at fair value, based on their invoice value.

Equity Instruments

Equity instruments issued by the Company are recorded at the proceeds receivable, net of direct issue costs.

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.

Foreign Currencies

Transactions in foreign currencies are recorded at the rates of exchange at thedates of the transactions. Monetary assets and liabilities denominated inforeign currencies at the balance sheet date are reported at the rates ofexchange prevailing at that date. Gains and losses arising during the period ontransactions denominated in foreign currencies are treated as normal items ofincome and expenditure in the income statement.

Non Current Fixed Assets

Intangible Fixed Assets - internally generated

An internally generated intangible asset arising from the Group's activity toacquire regulatory licences and deploy leading edge trading and surveillancetechnology is recognised as an intangible asset only if all of the followingconditions are met: * An asset is created that can be identified (licences and technology); * It is probable that the asset created will generate future economic benefits; and * The development cost of the asset can be measured reliably.

Where no internally generated intangible asset can be recognised, development expenditure is recognised as an expense in the period in which it is incurred.

Impairment of tangible and intangible assets

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 (if any). An intangible asset with anindefinite useful life (Regulatory Licences) is tested for impairment annuallyand whenever there is an indication that the asset may be impaired.The recoverable amount is the higher of the fair value less costs to sell andthe value in use. In assessing value in use, the estimated future cash flowsare discounted to their present value using a pre-tax discount rate thatreflects current market assessments of the time value of money and the risksspecific to the asset for which the estimates of future cash flows have beenadjusted.If the recoverable amount of an asset is estimated to be less than its carryingamount, the carrying amount of the asset is reduced to its recoverable amount.An impairment loss is recognised as an expense immediately, unless the relevantasset is carried at a revalued amount, in which case the impairment loss istreated as a revaluation reserve.Where an impairment loss subsequently reverses, the carrying amount of theasset is increased to the revised estimate of its recoverable amount, but sothat the increased carrying amount does not exceed the carrying amount thatwould have been determined had no impairment loss been recognised for the assetin prior years. A reversal of an impairment loss is recognised as incomeimmediately, unless the relevant asset is carried at a revalued amount, inwhich case the reversal of the impairment loss is treated as a revaluationincrease.

Practical application of Intangible Fixed Asset policies to the Group's internally generated Intangible Assets

Regulatory Licenses are valued at their marginal cost of acquisition lessprovision for any impairment. On an annual basis, the Company undertakes animpairment review of its intangible assets by comparing their recoverableamounts with their carrying amounts. The impairment review of the RegulatoryLicences concludes that no provision for impairment is required because thecompany has sufficient liquid resources and customer loyalty to maintain itsbusiness for an indefinite period of time.

Regulatory Licences are not amortised as they are considered to have an infinite life.

Costs relating to the development, installation and testing of the Company's trading platform SHIP have been capitalised. They will be amortised over a three year period from the date of the launch of the platform (November 2007).

Property, Plant and Equipment

Property, plant and equipment are stated at cost, net of depreciation and anyprovision for impairment. Depreciation is provided at rates calculated to writeoff the cost, less estimated residual value, of each asset evenly over itsestimated useful life as follows:

Office equipment: Three years

Furniture and fittings: Three years

IT equipment: Three years

Depreciation is charged to the Income Statement.

The carrying values of property, plant and equipment are subject to annual review and any impairment is charged to the Income Statement.

Development Costs

Costs relating to the development and installation of the Company's trading platform have been capitalised. They will be amortised over a three year period from the launch of the platform.

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.

Deferred Taxation

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.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 relates to itemscharged or credited directly to equity, in which case the deferred tax is alsodealt with in equity.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, net of discounts, VAT and other sales related taxes.

Revenue comprises amounts derived from the provision of services which fallwithin the Company's ordinary activities after deduction of Value Added Tax,all of which arise in one business segment and one geographical region, theUnited Kingdom. The turnover and pre-tax loss are attributable to the operationof the PLUS market. Deferred income arises on annual issuer and membership feesof the market and the trading service that are invoiced in advance of theservice being provided.

Share Based Payments

The Company has early adopted IFRS 2 as at 1 January 2004. This has beenapplied to share options and equity instruments granted after 7 November 2002that had not vested at the start of each of the respective years. IFRS 2requires the recognition of share-based payments to employees at fair value atthe date of grant.The Company issues equity-settled share-based payments to certain employees.Equity-settled share-based payments are measured at fair value (excluding theeffect of non market-based vesting conditions) at the date of grant. The fairvalue determined at the grant date of the equity-settled share-based paymentsis expensed over the vesting period, based on the Company's estimate of sharesthat will eventually vest and adjusted for the effect of non market-basedvesting conditions.

Fair value is measured by use of the QCA-IRS Option Valuer¢â€ž¢ (based on the Black - Scholes - Merton 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.

Operating Leases

Rentals payable under operating leases are charged to income on a straight-line basis over the term of the relevant lease.

Critical Accounting Judgement and Key Sources of Estimation Uncertainty

Equity-settled share based payments: The fair value of share based payments iscalculated by reference to a Black - Scholes - Merton simulation model. Inputsinto the model are based on management's best estimates of appropriatevolatility, discount rate and share price growth.

2 - EXPLANATION OF TRANSITION TO IFRSs

A. Restatement of Group financial statements on adoption of IFRSs.

This is the first full period for which the Group has presented its financialstatements under IFRSs, as adopted for use in the European Union. The followingdisclosures are required in the period of transition. The last financialstatements prepared under UK GAAP were for the year ended 31 December 2005 andthe date of transition to IFRSs was therefore 1 January 2006.

B. Reconciliation of equity at 1 January 2006.

At the date of transition, the difference between the Group's balance sheet under UK GAAP and IFRSs was a reduction of ‚£28k due to the amortisation of the rent free period against the full life excluding the break period.

C. Income statement for the year ended 31 December 2006 - effect of IAS 1

"Presentation of Financial Statements" on UK GAAP balances:

UK GAAP balances in Note UK GAAP Effect of IFRS IFRS balances in UK GAAP format ‚£'000s Transition ‚£'000s IFRS format to IFRS ‚£'000s Turnover 2,169 - 2,169 Revenue Share based payments 1 (209) 103 (106) Charge in relation to share based payments Other operating 2 (3,414) (15) (3,429) Other operating charges expenses (3,623) 88 (3,535) Operating loss (1,454) 88 (1,366) Operating loss Interest receivable 121 - 121 Finance income Loss on ordinary (1,333) 88 (1,245) Loss on ordinary activities activities before taxation Tax on loss on - - - Taxation ordinary activities Retained loss for (1,333) 88 (1,245) Loss for the year the year attributable to equity holders of the parent Loss per share Loss per share Basic and diluted (0.99)p 0.06p (0.93)p Basic and diluted Notes 1. Revision of share based payment calculation. 2. Amortisation of the rent free period against the full life of the lease, rather than the period up to the first break.

D. Balance Sheet as at 31 December 2006 - effect of IAS 1 "Presentation of

Financial Statements" on UK GAAP balances:

UK GAAP balances in Note UK GAAP Effect of IFRS IFRS balances in UK GAAP format ‚£'000s Transition ‚£'000s IFRS format to IFRS ‚£'000s Fixed assets Non-current assets Intangible - 1 500 142 642 Intangible assets Intellectual Property Rights Tangible 1 250 (142) 108 Property, plant and equipment Investments 1 - 1 Available-for-sale investments 751 - 751 Current assets Current assets Debtors and 1,591 - 1,591 Trade and other prepayments receivables Cash at bank 2,348 - 2,348 Cash and cash and in hand equivalents 3,939 - 3,939 Creditors: Current liabilities amounts falling due within one year Creditors 2 (466) (43) (509) Trade and other and accruals payables Deferred (1,595) - (1,595) Deferred income income (2,061) (43) (2,104) Net current 1,878 (43) 1,835 Net current assetsassets Net assets 2,629 (43) 2,586 Net assets Capital and Equity Reserves Called up 6,731 - 6,731 Share capital share capital Share premium 1,524 - 1,524 Share premium account Profit & 2 (5,626) (43) (5,669) Retained earnings loss account Equity 2,629 (43) 2,586 Equity Shareholders attributable to funds equity holders of the parent Notes 1. Reclassification of trading platform development from tangibles to intangibles. 2. Amortisation of the rent free period against the full life of the lease, rather than the period up to the first break.

E. Restatement of Consolidated Cash Flow Statement on adoption of IFRS

The presentation of the cash flow statement as specified by IAS 7 differs fromUK GAAP requirements. A number of items have been reclassified, but there is noimpact on cash flows. There is no change to the level of cash and cashequivalents at either the start or end of the year.

3 - REGISTRATION

The Company is registered in Great Britain.

4. The above summary of results for the year ended 31 December 2007 does notconstitute statutory financial statements within the meaning of section 240 ofthe Companies Act 1985 and has not been delivered to the Registrar ofCompanies.Statutory financial statements will be filed with the Registrar of Companies indue course; the auditor's report on those financial statements under S235 ofthe Companies Act 1985 is unqualified and does not contain a statement underS237 (2) or (3) of the Companies Act 1985.A copy of the Company's annual report for 2007 will be mailed to shareholdersshortly and will also be available for collection from the Company's registeredoffice at Standon House, 21 Mansell St, London E1 8AA, and posted on theCompany's website in due course.

END.