EPIC

The UK's leading e-learning company

FOR RELEASE : 12.05PM 2 OCTOBER 2002

GOOD START TO THE YEAR

BUSINESS REMAINS CASH GENERATIVE

GROWING PRESENCE IN BOTH THE PUBLIC AND PRIVATE SECTORS

CONFIDENT OF A STRONG FINANCIAL PERFORMANCE

MAIDEN INTERIM DIVIDEND TO BE DECLARED IN FEBRUARY

Michael Inwards, the Chairman of Epic, speaking at the Annual General Meeting held in Brighton today, made the following comments on current trading:

We have had a good start to the year with the management accounts showing that the results for the first quarter have met our expectations.

Epic is a cash generative business and has a strong and growing presence in both the public and private sectors. The high level of repeat business and the extension of the client base in both these sectors demonstrates our continuing market leadership.

In the public sector we have worked for the UK e-Universities initiative, the University for Industry, which has re-appointed us as a supplier, and the Houses of Parliament where our work received acclaim. Recent wins include an e-skills education project. These projects are all in addition to our on-going work with central government departments and agencies such as the Inland Revenue.

In the private sector, our traditional strength in the financial services sector continues. We have recently been selected as the preferred e-learning partner with the Financial Services Authority, the key regulator in this sector. In addition we have won projects with BUPA, Cambridge University and Vodafone, amongst others.

Sales of our PRIME:Leadership product to UK government departments continue. We are in the process of working with the Cabinet Office to identify ways of offering this to a wider audience as well as ways in which the product can be extended. Arena, our next product has been launched. Arena enables organisations to create secure on-line collaborative learning environments to share knowledge, learning and experience.

In the current market conditions companies continue to seek new ways to improve efficiencies and productivity within their own workforces. Our ability to deliver results to these clients is backed up by extensive experience, knowledge and strong project management.

In summary, Epic is financially strong in these uncertain market conditions. We have a clear strategy, a sound operating structure and excellent people. The solutions that Epic offers, and continues to develop, keep us at the forefront of the e-learning markets. We are well positioned in markets which we believe have considerable long-term growth potential.

Unless there is a significant deterioration in market conditions, I believe that we can look forward to a strong financial performance during the current financial year and, following the announcement of our interim results in early February, we will be paying a maiden interim dividend.

For further information:

BACKGROUND NOTE:

ABOUT EPIC

Epic is the leading e-learning company in the UK. For nearly 20 years Epic has been a consistent leader and innovator, producing ground-breaking and award winning work. Services range from consultancy through content production and technology solutions (both bespoke and generic) to testing and localisation.

Epic's extensive client list includes:

• In the financial sector, Barclays, Lloyds TSB and The Royal Bank of Scotland
• In the government sector, central government departments (DWP, DfES, FCO), the Cabinet Office, regional bodies (Scottish Enterprise, the Welsh Development Agency) and Inland Revenue, Customs & Excise.

INDUSTRY DATA

International Data Corporation predictions

The worldwide corporate e-learning market will exceed:

• $23.1 billion by 2004 (1999: $1.8 billion)

IDC also states that:

• North America will account for 65.2% of the market by 2004
• The fastest-growing market is Western Europe
• By 2002, the number of students enrolled in distance education will grow to 2.2 million, from 735,000 in 1999
• 60% of corporations will have an LMS platform deployed by 2003

Gartner predictions

• E-learning will be the most-used corporate application on the web by 2005
• By 2003, over 50% of all higher education institutions globally will be offering e-learning programmes to students