One of the best sets of results we have seen

Techinvest
March 2003.

"Interims to 30 November 2002 from Epic must rank as one of the best set of results we have seen in the past six months, comfortably beating broker forecasts at both the top and bottom line.

Turnover advanced 39% to £4.6m and included a first-time contribution from product sales of £0.3m. Profit before tax shot up 400% to £1.0m. Fully diluted earnings per share rose 414% to 3.6p, although this was on a nil tax charge. Epic expects to use all remaining tax losses this year.

Strong cash generation of almost £1.0m raised net funds to £10.4m or 41p per share. As a result Epic will pay a maiden dividend of 0.4p, something it has threatened to do for a while now. The strong cash position opens a number of alternatives for the Company. These include making acquisitions or buying back shares in accordance with shareholder authority granted at the last AGM.

Public sector sales increased 30% and now account for half of total revenue. Epic says it has made an encouraging start in its planned push into the health sector, winning its first major projects with the NHS. Chef Executive Donald Clark told us he expects the Company will benefit greatly from the new NHS IT spending initiatives now under way.

New product sales were made primarily to the public sector. These included PRIME, a public sector leadership course, an Arena, a collaborative learning tool.

Private sector sales grew 20% with financial services the predominant sector, where retail banks continue to award Epic with contracts via approved supplier agreements.

Epic has expanded its services division to increase the scope of its offering to clients who want more than pure online learning. This "blended" approach will integrate online and offline methods of learning. The Company believes that "online learning is irreversible, as the cost savings once implemented are considerable".

House broker Altium Capital updated its forecasts following the results. Fully taxed earnings per share for 2003 and 2004 are now 4.9p and 5.8p (previously 4.4p and 5.2p) The share are now up 6.8 from our New Buy tip in October, but still offer good value."