In Financial Year 2000/01 Kewill has substantially changed its portfolio of businesses, focusing the Group’s strategy on e-fulfilment and strengthening the balance sheet. By the time of the Interim Announcement in November 2000, the Logistics Division and part of ERP UK had been disposed of and the remaining ERP UK business was sold in December 2000. We believe that the financial consequences of these disposals have been fully reflected in more recent market expectations.

In the first year of trading for the Kewill.Net e-fulfilment suite, the Electronic Commerce Division has performed substantially in line with its operating plan. As expected, the acquisition of Evcor caused some disruption in the US sales channels in the first half, however sales momentum has improved significantly in the second half. Overall, therefore, the Division will be slightly below its revenue target for the full year.

The ERP US Division has experienced lower than forecast sales in the final quarter, as smaller US manufacturers have responded to the uncertain economic climate by delaying IT investments. The ERP business has shown growth over last year and maintained margins in difficult trading conditions, capitalising on its strong base in the SME market.

Kewill has managed costs against revenues to protect profit margins. The Group has made a substantial investment in the development programme to enhance its e-fulfilment capability. Costs have been controlled without compromising the required functionality. In addition, actions taken to reorganise the sales channels following the acquisition of Evcor have both improved effectiveness and lowered costs.

The Company remains confident of the fundamental commercial opportunity for both Divisions and management continues to execute the strategy set out to investors during the financial year. Although mindful of the external economic environment, Kewill expects to make further sound progress in Financial Year 2001/02.

Preliminary results for the financial year ended 31 March 2001 will be announced on Tuesday 5 June 2001.