RNS Number:6134M
Raft International PLC
23 June 2003



         For Immediate Release     23rd June 2003

                             Raft International plc

              Interim Results for the six months ended April 2003

 Highlights

   *Encouraging performance despite challenging trading environment

   *Turnover increased by 23% to #4.2m (2002: #3.4m)

   *Gross margins increased to 40% reflecting increase in software license
    sales (2002: 32%)

   *Operating loss decreased by 55% to #0.5m (2002: #1.2m loss) despite a
    significant investment programme

   *Balance sheet remains strong with no debt and #2.6m of cash

   *Deferred income of #0.5m (2002: #0.2m)

   *6 new contract wins (2002: 3 contract wins) achieved so far this
    financial year

   *Sales pipeline stronger than comparable previous period

   *Channels to market significantly strengthened by the recent addition of
    SunGard to the Partnership programme

   *Trading improvements endorse the Group's strategy of focusing on energy
    credit risk and operational risk sectors.


David Priestley, Chairman, commented:

I am very encouraged by these results. We have continued to exploit our
technology and begun to reap the benefits of the strategy set out last year. All
but one of our significant contract wins this year have come from our
strategically important sectors of operational risk management in banking and
credit risk management in the energy markets. We have driven up margins by
selling more licenses and controlling our expense. Our new Houston location was
set up in October 2002 and has been successfully marketing the credit risk
product to the US energy market.

After a period of headcount restraint, we are now selectively hiring into both
our sales and delivery groups to exploit the successes we are experiencing. We
have further strengthened the management team by recruiting Gerry Wilkinson to
head up our operational risk product in the UK, and Pete Pavluk to the role of
Commercial Development Director for our energy products in the US. Both have
substantial experience in their markets.

Your Board remains committed to returning the Group to profitability and last
year we set out our strategy to achieve this goal. The strategy is starting to
deliver results after a very difficult two years for the technology sector
generally and, along with this year's investment programme in the operational
risk product, has positioned the Group to be able to take advantage of further
market opportunities.

Once again I would like to compliment all our staff for their loyalty,
dedication and competence during the past six months and thank each of them for
their contribution to our significantly improved performance.


Trading Review

In our last report we described our strategy to limit the number of products we
actively market, continue downward pressure on costs, improve margins and widen
our bandwidths to market. We have made good progress in executing this strategy
and these interim results reflect this progress. Our products assist clients in
managing credit and operational risk, business areas which are attracting
increasing attention as the pressures to improve corporate governance intensify.
The continuing adverse effects of difficult market conditions on the Group's
results have been offset by the successful execution of our strategic steps.

We are also pleased that the results are beginning to show a material
diversification of our revenue mix across markets and a growth in license fees
rather than per diem-based fees. One third of our revenues were generated by the
strategically important operational and credit risk sectors. The proportion of
license fee revenue has more than doubled to 20% compared with the equivalent
period last year and it is management's aim to raise this to over 50% in the
medium term. We have, however, managed to retain the revenue contribution from
the investment banking sector largely because of our success in selling
professional services into that market.

                                            Share of Turnover
                                           ------------------
                                                              
                                   6 months to 30         6 months to 30
                                       April 2003             April 2002
                                       ----------             ----------

Operational risk                             12%                     5%
-------------                          ----------             ----------

Energy credit risk                           21%                    14%
-------------                          ----------             ----------

Investment Banking                           59%                    68%
-------------                          ----------             ----------

All other                                     8%                    13%
-------------                          ----------             ----------

License Revenue                              20%                     8%
-------------                          ----------             ----------

We continue to pursue prudent revenue recognition polices and have deferred
income of #0.5m (#0.2m at 30 April 2002).

Our productivity measures have improved. Compared with the same period last
year, gross margins are up from 32% to 40%; administrative expenses have dropped
from 65% to 53% of turnover and are at the same absolute level as a year ago
despite the 23% increase in turnover and the opening of a new office in Houston.

In pursuit of increasing our license fees and widening our bandwidth to market,
we have built more partnerships with other industry players. We have cooperative
arrangements with most of the major solution providers and we are particularly
proud of the recently announced global arrangement with SunGard. A comprehensive
and effective partnership programme significantly widens our bandwidth to market
and is a key prerequisite to achieving the Group's strategic goals.

We continue to improve the functionality and scope of our strategic risk
management products by leveraging our extensive sector reach and technical
competence. We are part way through a significant investment programme in our
two key products, most of which will be completed by the end of this year and
which will result in increased R&D costs for the period. We believe that the
scale of this programme is appropriate at this time as it raises the barriers to
entry in these sectors and positions us well for an increase in demand for risk
management solutions which we expect in the near term. We will continue to
develop our products in the future and the proportion of work done at our R&D
centre in Mumbai will grow. We now have well over 1500 re-usable components in
the inventories across all products maintained in Mumbai. We are recognised as
one of the market leaders and we consolidate that position with each successful
contract win.

We have had 5 contract wins this year for our two chosen sectors of operational
risk and energy credit risk management:

   *Operational risk management contract with Abbey National Plc and a major
    US bank
   *Energy credit risk management contracts with Entergy and Reliant in the
    US and Nuon in Europe

We have also made one sale of the underlying component technology to the Danish
Stock Exchange reflecting a wider aspect of the Group's strategy which is to
remain alert to entrepreneurial opportunities to exploit our expertise and
technology.

Outlook

In our report for the year ended 31 October 2002, we commented that our
organisation and structure is able to take maximum advantage of opportunities.
We have proved this and are positioned to support an increased rate of growth in
the second half of the year. We are confident that activity in our target
markets will increase as the regulatory requirements become more acute and as
companies seek to improve their corporate governance. We will remain focussed on
our two target markets of operational risk and energy credit risk management. We
will continue to control expenses and remain committed to returning the Group to
profitability.

In the longer term, we intend to remain in the risk management space and to
exploit other market sectors with our existing products. We will grow license
rather than per diem-based fees. We will continue to pursue high-margin services
in sectors where we have specific expertise and which are under-served by
existing providers.

Press enquiries:

Sandra Kelly, CFO     Raft International plc     + 44 (0)20 7847 0400

Shane Dolan           Biddicks                   + 44 (0)20 7448 1000



Consolidated profit and loss account

For the six months ended 30 April 2003

                                   6 months to 30  6 months to 30    Year to 31
                                       April 2003      April 2002  October 2002
                                    (unaudited)     (unaudited)     (audited)

                          Notes            #'000           #'000         #'000
                         -------      ----------      ----------    ----------

Turnover                                  4,175           3,394         6,666

Cost of sales                            (2,499)         (2,322)       (4,579)
                                      ----------      ----------    ----------



Gross profit                              1,676           1,072         2,087

Administrative                           (2,223)         (2,297)       (4,355)
expenses                              ----------      ----------    ----------


Operating loss                             (547)         (1,225)       (2,268)

Interest receivable and                      49              77           155
other income                          ----------      ----------    ----------


Loss on ordinary                           (498)         (1,148)       (2,113)
activities before
taxation

Tax on loss on ordinary       2              (1)             (1)           75
activities                            ----------      ----------    ----------


Loss after taxation                        (499)         (1,149)       (2,038)
retained for the                      ----------      ----------    ----------
period


Loss per share (pence)        3           (0.76)          (1.75)        (3.10)
                                      ----------      ----------    ----------



Fully diluted loss per        3           (0.76)          (1.75)        (3.10)
share (pence)                         ----------      ----------    ----------



Consolidated balance sheet

As at 30 April 2003

                               30 April 2003  30 April 2002  31 October 2002
                               (unaudited)    (unaudited)        (audited)

                                     #'000          #'000            #'000
                                  ----------     ----------       ----------

Tangible Fixed Assets                  231            440              322
                                 ----------     ----------       ----------

Current Assets

Debtors                              2,435          1,438            1,562

Cash at bank and in hand             2,643          4,478            3,709
                                 ----------     ----------       ----------


                                     5,078          5,916            5,271


Creditors: amounts falling          (1,584)        (1,193)          (1,355)
due within one year               ----------     ----------       ----------




Net current assets                   3,494          4,723            3,916
-----------------------------     ----------     ----------       ----------



Total assets less current            3,725          5,163            4,238
liabilities


Creditors: amounts falling
due after more than
one year                                 -            (34)               -
                                 ----------     ----------       ----------


                                     3,725          5,129            4,238
                                 ----------     ----------       ----------

Capital and reserves

Called up share capital              3,286          3,286            3,286

Share premium account                5,765          5,765            5,765

Profit and loss account             (5,326)        (3,922)          (4,813)
                                 ----------     ----------       ----------



Equity shareholders' funds           3,725          5,129            4,238
                                 ----------     ----------       ----------



Consolidated cash flow statement

For the six months ended 30 April 2003

                                    6 months to 30  6 months to 30    Year to 31
                                        April 2003      April 2002  October 2002
                                       (unaudited)     (unaudited)     (audited)
                            Notes          #'000           #'000           #'000
                                        ----------      ----------    ----------



Net cash outflow from          4          (1,132)           (808)        (1,642)
operating activities


Return on Investments and
servicing of financing


Interest received                             49              77             155
                                      ----------      ----------      ----------


Taxation                                      63             (52)           (67)


Capital Expenditure


Purchase of tangible                         (46)            (19)           (31)
fixed assets                          ----------      ----------      ----------


Net cash outflow before                   (1,066)           (802)        (1,585)
financing

Financing

Capital element of hire
purchase contract
payments                                     (8)             (8)            (16)


Repayment of loans                             -              (7)            (7)
                                      ----------      ----------      ----------


Decrease in cash in the                   (1,074)           (817)        (1,608)
period                                ----------      ----------      ----------



Notes to the accounts

For the six months ended 30 April 2003

 1. Basis of preparation

    This interim statement has been prepared on the basis of accounting policies
    set out in the Group financial statements for the year ended 31 October
    2002.

    This statement does not comprise full financial statements within the
    meaning of Section 240 of the Companies Act 1985. The statement is unaudited
    but has been reviewed by the group's auditors, Baker Tilly.

    The figures for the year ended 31 October 2002 have been extracted from the
    full Annual Report and Accounts filed with the Registrar of Companies on
    which the auditors gave an unqualified report.

 2. Taxation

    The charge to taxation is an estimated based on the anticipated effective
    rate of tax for the year ending 31 October 2003.
 3. Loss per share

    The calculations of loss per 5p ordinary share are based on the loss on
    ordinary activities after taxation and the weighted average number of shares
    detailed below:

                                     30 April    30 April 2002  31 October 2002
                                         2003    (unaudited)        (audited)                                    
                                  (unaudited)
                                        #'000          #'000            #'000
                                    -----------     ----------      -----------

    Basic and diluted loss
    attributable
    to ordinary shareholders             (499)        (1,149)          (2,038)
                                    -----------     ----------      -----------

                                       Number         Number           Number
                                    -----------     ----------      -----------


    Weighted average number of     65,720,874     65,720,874       65,720,874
    ordinary shares

    Dilutive share options                  -              -                -
                                    -----------     ----------      -----------

    Adjusted weighted average
    number of ordinary

    Shares                         65,720,874     65,720,874       65,720,874
                                    -----------     ----------      -----------

    Loss per share (pence)              (0.76)         (1.75)           (3.10)
                                    -----------     ----------      -----------

    Dilutive loss per share             (0.76)         (1.75)           (3.10)
    (pence)                         -----------     ----------      -----------
    


    Notes to the accounts

    For the six months ended 30 April 2003

 4. Cash Flow

Reconciliation of operating loss to net cash outflow from operations

                              6 months to    6 months to      Year to 31
                            30 April 2003  30 April 2002     October 2002                  
                              (unaudited)    (unaudited)        (audited)

                                    #'000          #'000         #'000
                                -----------    -----------   -----------

Operating loss                       (547)        (1,225)       (2,268)

Depreciation                          141            161           287

Increase in provisions                  -              -            (2)

(Increase)/decrease in               (899)           152           124
debtors

Increase in creditors                 173            104           217
                                -----------    -----------   -----------

                                   (1,132)          (808)       (1,642)

Reconciliation of net cash outflow to movement in funds

                            6 months to 30  6 months to 30    Year to 31
                                April 2003      April 2002  October 2002
                             (unaudited)     (unaudited)     (audited)

                                   #'000           #'000         #'000
                              ------------     -----------   -----------

Decrease in cash in the           (1,074)           (817)       (1,608)
period

Exchange adjustments on
foreign currency

Investments                            8               -            22

Cash outflow from hire                 8               8            16
purchase

Cash outflow from loans                -               7             7
                             ------------     -----------   -----------

Change in net funds               (1,058)           (802)       (1,563)
arising from cash flow


Movement in funds in the          (1,058)           (802)       (1,563)
period

Net funds at the start of          3,697           5,260         5,260
the period                    ------------     -----------   -----------


Net funds at the end of            2,639           4,458         3,697
the period                    ------------     -----------   -----------


Analysis of net funds

                                       Exchange
                   1 November 2002   differences  Cash flow        30 April 2003    
                             #'000       #'000        #'000                #'000
                       -----------  ------------      ----------      ----------

Cash at Bank               3,709             8           (1,074)         2,643

Hire Purchase                (12)            -                8             (4)
Contracts              -----------  ------------      -----------    -----------

                           3,697             8           (1,066)         2,639
                       -----------  ------------      -----------    -----------




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