FOR IMMEDIATE RELEASE

1 April 2003

Scipher plc ("Scipher" or the "Company")

Trading update for the full year to 31 March 2003

Revenue for the full year is expected to be flat compared to last year, which
is below market expectations. Whilst order books continued to strengthen during
the second half, sales from several high-value contracts that were expected
have slipped into the next financial year. In previous years over 25% of annual
sales came in during the last month of the financial year and this has not
happened in the current year. The Company has however received significant
orders late in the month, though the related revenues will now occur in the
following year. The effect of lower turnover in the year combined with a lower
gross margin compared to last year will result in a loss for the year that is
greater than market expectations.

The impact of the shortfall in sales on cash has been reduced by the ongoing
actions taken to reduce costs throughout the year and in particular during the
second half. Whilst the ongoing borrowing requirement for the Company will be
higher than previously anticipated, the Company has continued to operate within
its current bank facilities. At the same time, the Board is exploring a number
of options to increase its cash headroom.

While the results for the financial year just ended will be disappointing, the
Board is able to report important developments in the majority of the key areas
of the business as follows:

  * Patent Licensing - the acquisition of yet2.com in December 2002 extended
    Scipher's expertise in all phases of IP management and licensing and
    provided the opportunity to expand its services in the US, Japan and
    Europe. A number of high-value new licensing contracts have slipped and are
    now expected to occur in the next year. Market opportunities remain
    excellent for this business.
   
  * Secure Identification - growth in sales of its fingerprint readers and from
    systems contracts for the NHS and other applications continued. This
    business has seen a potential new contract slip into the next financial
    year.
   
  * Communications - efforts taken to reduce costs and consolidate the
    communications activities have brought this business into profit. Whist
    turnover growth was reduced compared with the previous year, increasing
    sales from wireless products offset a reduction in optical sales.
   
  * 3D Sound continues to be the de facto 3D audio standard in PCs and has
    strengthened its position in the games market. Delays from two licensing
    contracts have resulted in lower sales for the year. These contracts are
    expected in the first half of the next financial year.
   
  * Displays - sales in Displays are up by 40% from last year, driven by the
    uptake in new microdisplay-based applications.
   
  * Sensors showed substantial growth in revenue, albeit from a low base,
    through the first commercial sales of its CO sensor and detector products.
   
Looking ahead to the next financial year, the Directors expect difficult market
conditions to continue for some time along with lengthened sales cycles.
Nevertheless they see good prospects for renewed growth with particular benefit
being derived from the Patent Licensing and Secure Identification operations.

Enquiries:

Scipher plc:

Dr Ken Gray, Chairman Tel: 020 8848 6555

Chris Mutter, Finance Director Tel: 020 8848 6555

Michael Kendon Tel: 020 8848 6444

Financial Dynamics:

James Melville-Ross Tel: 020 7831 3113

Juliet Clarke Tel: 020 7831 3113



END