RNS Number:8052O
TTP Communications PLC
19 August 2003


               TTP Communications plc - First Half Trading Update



CAMBRIDGE, UK, 19 August 2003. TTP Communications plc (LSE: TTC) today announces
a trading update for the six months to 30 September 2003



At the time of the announcement of our preliminary results in April, we
indicated that our headline growth rates this year would be held back as a
result of the buy-out of a chipset royalty stream and the weakening dollar. We
also signalled that the impact of SARS was particularly hard to assess at that
time but that an inability to travel over a prolonged period would have an
adverse impact on our business. With over 55% of sales revenues generated in
South East Asia, SARS has had a significant impact on our order intake in Q1.



With the progressive lifting of travel restrictions to the region during June,
sales activity has increased significantly from July onwards. However underlying
market conditions continue to be as difficult, as they were throughout last
year, making the timing of closure of licensing deals unpredictable.



Consequently although we expect order intake levels to be significantly higher
in Q2, we do not expect that they will recover the shortfall seen in Q1,
resulting in sales revenues in TTPCom for the six months ending 30 September
being lower than they were in the same period last year. The strengthening of
sterling against the dollar is expected to reduce sales revenues by #1m.



The revenue shortfall relative to our original expectations will have an adverse
impact on operating profits in TTPCom, which will also be held back by:

  *   The continued planned investment in new product areas, mainly in software, 
      applications and silicon for which we expect to start selling licences
      and generating sales revenue in the 2H and, more particularly, next year; 
      and by

  *   The planned expansion of the terminals business, which has necessitated
      increased spend on tooling and testing.

In addition in the light of the economic conditions prevailing post SARS in
South East Asia, we have decided to increase our provisions for potential bad
debts.



As a consequence of the above, we expect TTPCom to report an operating loss of
between #3.0m and #3.5m for the six months ending 30 September compared with an
operating profit of #4.9m for the same period last year. Until the pattern of
our business development becomes clearer, the company has taken a number of
steps to reduce its cost base. We expect these measures to reduce costs by some
#2m in the second half of the year.



ip.access continues to develop as we had indicated in our preliminary
announcement in April. Sales revenues for the first six months will be around
#1m and operating losses will be around the same level as last year. Progress
with T-Mobile continues to be very positive. Trials are close to completion and
we are currently working with customer to agree the next stage of the program.
We have completed acceptance testing with China Unicom and in Russia work
continues with two operators. In addition we have completed or are in the
process of completing a further 4 operator trials in Europe and Asia.



The net effect of these factors on the group's half year results will be that
TTP Communications plc is likely to report a pre-tax loss of between #5.0m and
#5.5m compared with a pre-tax profit of #3.0m for the same period last year.



Reflecting the operating losses in the period, the acquisition of Mobisys
announced in April for $3m and the announcement today of the investment in
Synergenix, cash balances are expected to reduce from #38.2m at end March to
approx #30m at the end of September.



Although short term trading has been difficult since the year end, a number of
developments have taken place that bode well for the growth of the business in
the medium term:

  * Today we announced a tie-up with Synergenix under which we will merge our
    Wireless Games Engine (WGE) with Synergenix' Mophun games engine used in
    Sony-Ericsson products, to create the leading games accelerator for mobiles;
  * We have reached agreement to mount our 3G software on two early baseband
    solutions allowing us to capture early handset customers;
  * The development of the terminals business is proceeding well and we have
    signed 2 licences with customers in Korea and China. It is intended that
    these will be more royalty than licence fee based enabling us to grow the
    per unit value of our IP in the handset as these customers start to ship in
    volume in the 2H year;
  * Intel have announced agreements with leading handset manufacturers in Asia
    for the PXA 800F baseband device;
  * We are likely to have our architecture and our technology in 20 -25m
    handsets this year compared with 8m-10m last year.



The next trading outlook will be provided when we announce our interim results
in October.



Enquiries:



Dr Tony Milbourn/Bruce Anderson         Fergus Wylie/Peter Ogden
TTP Communications plc                         Cubitt Consulting
Tel: +44 (0) 1763 266266                       Tel: +44 20 7367 5100







The management will host a conference call at 09.30 BST.  To participate please
dial: +44 (0) 207 984 7572. A recorded playback of the call will be available
for the next 24 hours. Replay number: +44 (0) 207 784 1024. Replay PIN: 245651.




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