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ID Data plc (‘ID Data’ or ‘the Company’), the supplier of secure transaction systems and
smart card services to the international telephony, banking, retail and secure access
sectors, today reports its Preliminary Results for the year ended 31 March 2001.



Highlights

· Turnover of £18.0m and pre-tax loss of £3.8m – broadly in line with expectations

· All development and trial manufacturing costs fully expensed during the year

· Achieved full Visa / Mastercard accreditation for chip and conventional bank cards

· Supplied 30% market share of UK banking sector smart cards

· Signed strategic alliance with Total System Services Inc. to provide smart card
services to the European banking sector

· GSM mobile telephony product range launched

· Continued investment in new production facilities, furthering the transition from
magnetic to smart card technology and higher value business

· ID Data is now the eighth largest provider of smart cards worldwide


The full transcript of ID Data's preliminary results is available by visiting http://www.id-data.co.uk/news/news.htm



Commenting on the Results, Peter Cox, Chief Executive of ID Data plc, said:

“The results for the year reflect a year of transition for the Company and a significant
shift in the mix of sales towards higher value products. ID Data has now achieved a strong
platform that will provide an opportunity for increased sales growth in the coming year,
evidenced by our first GSM contract for £2 million”


For further information, please contact:

ID Data plc
Peter Cox, Chief Executive
Tel: + 44 (0)1536 207 000
Email: peter.cox@id-data.co.uk

Issued by:

Bankside Consultants Limited
Julian Bosdet / Henry Harrison-Topham
Tel: +44 (0)20 7220 7477
Email: julian@bankside.co.uk / henry@bankside.co.uk


Statement by Mike Blackburn, Chairman


This is the first set of Preliminary Results since the admission of the Company’s shares to
trading on the Alternative Investment Market of the London Stock Exchange in October 2000.
New equity was raised to fund the general development of the business together with its
planned transition to exploit selected growth markets.


The ID Data group (the “Group”) is the leading UK based supplier of smart card solutions. It
is also the UK’s fastest growing supplier of secure transaction systems to the international
telephony, banking and retail industries.


As indicated in the prospectus issued in October last year, the Group had planned for the
current year to be one of significant change away from its origins as a card manufacturer
based on magnetic card technology to a smart card based business.


Reflecting this transition, the loss of £3.4 million after interest, but before exceptional
costs, on sales of £18.0 million was broadly in line with published expectations. In the
preceding fifteen-month period, sales of £19.5 million generated a loss of £1.5 million. To
reposition the Group’s resources for growth in its chosen markets, the business was
reorganised at the end of the year, incurring exceptional costs of £330,000. Within the
gross margin, development and test manufacturing costs of £1.5 million relating to the launch
of bank and mobile telephony cards were fully expensed.


From a standing start, ID Data has become the world’s eighth largest provider of smart
cards. The global market has a value in excess of £1.2 billion and has a projected annual
growth rate in excess of 30% over the next five years. Your Company is well positioned to
take advantage of the opportunities ahead.


I was personally delighted to join the Board as Chairman in September 2000 along with Richard
Allnutt, who also serves in a non-executive capacity. With the executive directors, who
built up the business prior to flotation, I believe that we have the necessary skills to
achieve our planned expansion.



Whilst the reorganisation of the business inevitably involved some job losses, we strongly
believe in developing the potential of our people. Our Coventry site achieved Investors In
People status during the year and the intention is to gain similar recognition across all our
sites.


This has been a challenging year for all the employees in the Group, but a good deal of
progress has been made. It will be everyone’s continuing dedication, loyalty and hard work,
which will ensure our success. I would like to thank all employees on behalf of the Board
and the shareholders.


Mike Blackburn
Chairman



Chief Executive’s Review, Peter Cox

The Group has moved forward considerably during the year, winning a number of major
contracts, making advances in its technology and production capabilities, bringing additional
services to the current target markets and re-focusing the business towards higher value
products and services.

An essential aspect of these changes has been to develop the people, products and services to
allow us to compete in the global market. Tremendous progress has been made towards this
objective and there has been a number of significant achievements. We:-

· have entered the banking market through the achievement of full Visa / MasterCard
accreditation for chip and conventional bank cards;

· have supplied a 30% share of the UK market in banking smart cards. Over 4 million
smart cards were produced during the year for the banking sector;

· have launched a range of Subscriber Identity Modules (SIMS) for the mobile telephony
market. We were granted membership of European Telecommunications Standards Institute and the
GSM Association;

· have installed a high speed production facility for mobile and fixed line telephony
prepaid cards, with capacity in excess of 50 million cards per annum. This has enabled us to
exploit a growing opportunity in the market;

· have moved to a more focused customer profile. The number of clients using older
technologies has been reduced from 150 to less than 50;

· now have a fully bank approved personalisation bureau with the capacity to process in
excess of 6 million cards per annum. This enables cards to be designed, enabled,
personalised and fulfilled entirely by the Group; and

· were chosen by Total System Services Inc (“TSYS”) of the USA, the world’s second
largest processing service to financial institutions, to be their strategic partner - to
provide smart card services to the European banking sector and to collaborate on the
introduction of smart card technology globally.


ID Data is now the world’s eighth largest provider of smart card solutions and is
particularly strong in its three key business divisions of retail, telephony, and banking.


Retail


As part of an overall strategic review, the retail division was refocused in April 2000 to
improve margins and move towards complex card issuing programmes and away from smaller volume
orders. This led to our discontinuing historic sales of approximately £2 million.


The Group is now capable of managing complex bespoke mail management and card issuing
programmes for large international loyalty and membership schemes.


The retail division’s customer base is robust. It includes Tesco, Air Miles and Safeway, all
of which have placed repeat or additional orders during the year. In this period, the Group
won a three-year contract from Centrica’s AA operations to issue five million membership
cards per year. The Group has also won a global supply contract, excluding North America,
with Esso/Exxon, in the face of worldwide competition.


Retail was the first sector in which ID Data captured significant market share and it remains
important to the Group. Although there are currently few signs in the UK of an early switch
from magnetic stripe cards to smart cards, the Group has been involved in a number of
consultancy assignments that indicate that this migration will occur.


Telephony


The Group offers a full range of products and services for global telecoms network operators.
Over the year it produced more than 53 million pre-paid fixed and mobile cards and secured
initial orders for 1 million trial SIM cards. All the Group’s telecoms products have
significant retail value and are produced and distributed under stringent industry security
standards.


During the year, the Group met its objective of moving the core technology forward
significantly by developing GSM SIM products based on the latest flash or maskless silicon
technology.


The global market for SIM cards is 350 million per annum and is expected to grow by more than
25% a year over the next four years. Part of this growth is at the expense of pre-pay fixed
line cards and the Group’s marketing activity is mindful of this. Overseas pre-pay fixed
line cards remain in demand and shipments during the year have gone to more than twenty
countries in Europe and the Far East.


During the year we continued to expand our product range for the telecommunications sector,
which now includes scratch off and electronic top up cards for mobile phone providers. New
investment in the most up to date in-line production equipment has significantly increased
capacity and has already led to major new contracts in the current year.


Since the year end, the Group has received an initial £2 million order for 32K and 64K SIM
cards for the Far East. This is expected to lead to further sales in the region as customers
continue to demand leading edge secure SIM technology.



Banking


The Group operates in the banking sector with TTI Card Technology Europe Limited (“TTI”), a
joint venture with Toshiba Corporation and Toppan Printing Company of Japan, in which we have
a 43% interest. TTI provides sales, marketing and technical support services, purchasing and
selling on product supplied by the Group. It currently has a 30% share of the UK’s smart
bankcard business. Customers in the banking and financial services sector include Barclays
Bank and Lloyds TSB Bank, for which TTI provides Visa and MasterCard cards. The Group has
also started on projects to provide Multos and Mondex cards.


In June 2000 the Group achieved full accreditation from the banking industry to manufacture
and despatch bankcards from its UK facilities. This was fundamental to extending our
activities beyond card manufacturing. The Group had delivered its millionth bankcard by
September 2000.


The Group has recently extended its activities in the banking sector by providing bureau
services to a leading UK Bank.


Summary


ID Data continues its growth as a major global provider of smart card based solutions in
Banking, Telephony and Retail and Secure Access. In the last year significant progress has
been made in becoming a leading player in this £1.2 billion a year business.


The Group has made significant investments in additional management and technical skills to
refocus its activities on value added sales. During the year, the operating facilities
achieved ISO 9001 and we received prestigious industry awards for our products and services.


The global smart card market is continuing to expand at an estimated annual rate of 30%. The
opportunities for ID Data are significant.
The past year’s work has created a solid foundation with world class capabilities that have
already led to significant new contracts and negotiations for major business in our chosen
markets.


The sales outlook for the first half of the current year is promising, with the objective of
a further increase in sales in the second half, moving the Group towards profitability.


Peter Cox
Chief Executive


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