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October 7, 1998

VOCALIS SHARES SLUMP AFTER PROFIT WARNING

By CBR Staff Writer

Shares in Vocalis Plc, the UK-based voice recognition company, plunged 50% yesterday after the company warned it could make losses in the current financial year due to the postponement of a number of high-value orders. The company says the situation in the telecommunications market in general and the Far East in particular has deteriorated in the last few months. As a result, contracts we were expecting in the first half of the year have been delayed but we continue to pursue these and other opportunities. With sales likely to be below expectations, the company does not expect this year to be one of profit. Vocalis has performed poorly since the company, a management buyout from Logica Plc, was floated in 1996. It reported meager net income of 32,000 pounds for the year to March 31 compared with a loss of 1.8m pounds on revenues that increased 211% to 6.2m pounds. In the long-term, the company is confident that it can benefit from growing demand for speech recognition-based telephony applications. While Vocalis believes that year-end cash balances of 2.8m pounds give it adequate financial resources, its dependence on a small number of large orders means the future is unpredictable.

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