Trading Statement

30 Jan 2006 07:00

2 ergo Group plc30 January 2006 Embargoed until 7am 30 January 2006 2ergo Group plc ("2ergo" or "the Group") TRADING UPDATE 2ergo, the AIM listed provider of convergent mobile communication solutions,will make the following statement at today's AGM. After a strong performance in the year to August 2005, the Group has enjoyed anencouraging start to the current financial year. In the first quarter, turnoverand profit increased significantly compared to the same quarter last year. Thisgrowth has come from both new and existing clients and the Board anticipatesthat the results for the full year will be slightly ahead of current marketexpectations. The Group has enjoyed another period of strong operational growth, expanding itsproducts and services through the introduction of new and innovativemixed-protocol communication services. Coupled with this, 2ergo has seen anincrease in its healthy client base and has maintained its excellent clientretention ratios. The Group's proprietary communications infrastructure, the Multiserve Platform,provides significant capacity and has seen a further increase in transactionalrevenues during the period, which again has contributed to both top and bottomline growth. The Board is pleased to confirm that the platform capacity willserve the Group for the foreseeable future, offering the luxury of transactionalrevenue growth, with little or no technology-enhancement costs for years tocome. The Group's core business has continued to perform in line with expectations,and particularly its commitment to developing its B2B applications division hasseen success in deploying bespoke services for some notable clients during theperiod. Although not contributing significantly to current figures, the Board isconfident that these services will generate increasing revenues over the comingmonths. More importantly, due to 2ergo's modular development methodology it isnow able to sell similar services to other clients at limited additional costs.This proven strategy continues to maximise the Group's development resource,minimise cost and maximise margin. As planned, the Group has made considerable headway in developing its securepayment and communication protocol, 2safeguard. The Board does not expect thisprotocol to provide revenue or profit during 2006, but believes that it willhave a significant positive impact on profitability in the future. To this end,the Group is building a dedicated division to fully exploit 2safeguard, whichthe Board believes will provide a leading long-term security solution for themobile industry. In the US, the Group's wholly owned subsidiary, M-invent, has continued itspleasing progress, experiencing an increase in client enquiries andprofitability in the period. The Board continues to adopt a cautious approach inthe US but is actively targeting potential partners and acquisitions that willenable the Group to roll out its now proven services. The Board feels confidentthat 2006 will see significant growth for M-invent and is now considering thedeployment of many of the 2ergo B2B services within the US as suitable channelpartners are established. During the period, certain sectors of the Group's market have seen some changesin legislation, particularly in the mobile services B2C sector. These changeshave been adopted by 2ergo and its clients and, after a short period ofuncertainty, this part of the Group's market is now the better for thosechanges. The Board is confident that with these positive changes, together withnew services and hardware becoming available, the mobile B2C sector willexperience strong growth during 2006. Through 2ergo's innovative and unparalleled approach, the Board looks forward tothe future, relishing the opportunities that exist within a market whichcontinues to grow at rapid speed. The Board is mindful that additionalacquisitions of the right type will add to the Group's performance and, whereappropriate, will seek to secure such acquisitions. 2ergo expects to announce its interim results for the six months to 28 February2006 in mid May. -ends- For further information, please contact: 2ergo 01706 221 777Neale Graham, Joint Managing DirectorBarry Sharples, Joint Managing Director Tavistock Communications 020 7920 3150Christian Taylor-WilkinsonMatt Ridsdale Notes to Editors: About 2ergo group plc2ergo group plc facilitates communication and interaction between companies andtheir staff or customers using Mobile Internet, SMS, MMS, Web and VoiceApplications. Headquartered in Lancashire, with a sales office in New York, theCompany listed on AIM on 11 March 2004. This information is provided by RNS The company news service from the London Stock Exchange