Highlights

Solid performance in a challenging marketplace:

Turnover up 16% to £586.1 million (2000: £506.3 million)

Professional services turnover up 58% to £87.7 million, including organic growth of 47% to £81.6 million (2000: £55.6 million)

Infrastructure turnover up 11% to £498.4 million (2000: £450.7 million)

Profit before tax, exceptional item and goodwill amortisation up 12% to £35.8 million (2000: £32.1 million)

Profit before tax and goodwill amortisation up 5% after exceptional restructuring charge of £2.2 million

Overseas operating profit up 100% to £3.4 million (2000: £1.7 million)

Earnings per share before goodwill amortisation and exceptional restructuring charge up 14% to 20.7p

Net cash balance at 30 June 2001 of £41.8 million (2000: £35.5 million)

Acquisition of two services businesses

Targeted restructuring to deliver annualised cost savings of £5 million

Trading outlook remains challenging

Commenting on the results, Richard Lapthorne, Chairman, said:

Despite the challenging trading environment, I am pleased to report another year of growth from the Group for the year ended 30 June 2001. We have made good progress with the two main thrusts of our strategy – balancing our services and infrastructure businesses within our technology integration model and growing into a truly pan-European business.

Early indications for the new financial year suggest that market conditions in the countries in which the Group operates remain challenging. On a comparable basis, activity levels in the opening months of the new year have remained subdued. The Group will continue to respond to these market conditions and is well-placed to deliver increasing value for shareholders in the future.

Duncan McIntyre, Chief Executive of Morse plc, said:

We continue to be recognised as the market leader in technology integration of sophisticated computer systems to blue-chip corporations. Our strategy to develop a balanced European technology integration business, comprising products and services, is being consistently implemented. Over the last three years this evolution has been primarily undertaken against a background of rapid growth with turnover increasing 171% from £216.1 million in the year ended 30 June 1998.