Dubai's i-mate announces its intention to seek admission to trading on AIM

Notes and media contacts

Contacts:

JPMorgan Cazenove
Nicholas Garrett
David Harvey-Evers
+44 207 588 2828

Maitland
Neil Bennett
Colin Browne
+44 207 379 5151

About i-mate

Overview of business

The Group is a developer and supplier of high-end wireless integrated Pocket PCs and Smartphones, specialising in the Microsoft® Windows Mobile™ operating system. These devices are sold under the i-mate™ brand, supported by related content and services. The Group's devices, services and content offering are targeted at both business and individual end users.

The business was founded in 2001 by Jim Morrison. Jim, who has over 20 years experience in telecoms (principally with Cable & Wireless and BT), was a key member of the team that conceived and designed the product which became the O2 xda. The Group's senior management are predominantly from a telecoms network operator background and worked together at BT and BT Cellnet.

The Group's objective is to establish i-mate as the brand of choice in the rapidly expanding Microsoft® Windows Mobile™ device market.

The Group's activities can be summarised under the following broad categories:

• the design and development of a broad range of Microsoft® Windows Mobile™ OS devices in collaboration with its manufacturing partner;
• the distribution of devices through a multi-channel network and the provision of customised solutions to meet specific corporate and network operator requirements; and
• the provision of aftermarket support and value-added services through its technical support centre and its Club i-mate website.

Key strengths and competitive advantages

The Directors believe that the Group is uniquely positioned in the industry, providing considerable value-add at all stages of the device lifecycle. The Group is involved in taking convergent voice and data devices from conception and development through manufacture and distribution to end-users, together with the provision of aftermarket support. The Group's business model is founded on its core competencies in the following areas:

• the design and development of Microsoft® Windows Mobile™ OS devices;
• complementary software development capabilities;
• technical expertise in network operator approval processes;
• operator and corporate device customisation;
• a distribution and delivery network; and
• the provision of support to i-mate device owners.

Summary financial information

Year ended Year ended
31 March 2004 31 March 2005
$000 $000
Turnover 37,916 136,151
Gross Profit 8,158 35,057
Gross profit margin 21.5% 25.7%
Operating profit 1,851 14,350
Operating profit margin 4.9% 10.5%
Net cash inflow from operating activities 4,115 12,175


Current trading and prospects

In the financial year ended 31 March 2005, the combined Group achieved total sales of $136 million and profits before tax of $14.4 million.

Historic performance has been built on sales in the Middle East, Australia, New Zealand, South Africa and parts of Europe. The Group is establishing new distributor partners in certain key Western European markets and the US that the Directors anticipate will accelerate sales significantly. The establishment of new distribution channels in these key markets will coincide with the launch of the next generation of i-mate devices at GITEX 2005 in late September.

The Group's sales demonstrate significant seasonality, reflecting the importance of the holiday selling season and the release of new devices. Forward forecast orders from the Group's distribution partners and the production orders placed with the Group's manufacturing partner, High Tech Computer Corporation ('HTC'), support management's anticipation of a strong sales performance during the last quarter of the current calendar year. Accordingly, the Directors have confidence in the Group's prospects for the current financial year.

Strategy

The Group's objective is to establish i-mate as the brand of choice in the rapidly expanding Microsoft®Windows Mobile™ device market. It intends to achieve this objective by:

• Continuing to build its presence and branded proposition in markets such as the US and certain keyparts of Western Europe beyond its established footprint in the Middle East, Australia, New Zealand, South Africa and parts of Europe;

• Developing and launching its next generation of devices to meet demand for the latest technological and design advances;

• Supplementing its device offering with complementary content and services;

• Building i-mate's association with advanced devices operating on the Microsoft® Windows Mobile™ operating system through the development of innovative devices and the provision of aftermarket support; and

• Leveraging the Group's close relationships, particularly with Microsoft, HTC and other key technology and content provides to maintain good visibility of the future progress of the mobile technology industry.

Contact Details:

i-mate™:
Nadine Salem
Marketing Manager - Middle East
Tel: +971 (0)4 390 1989
Fax: +971 (0)4 390 4428
Email: nadine@imate.com


No offer or invitation to purchase or subscribe for shares is being made at this time. Any such offer or invitation will be made solely in or by reference to the AIM admission document to be published in due course and any acquisition of shares in the Company should be made only on the basis of the information contained in the AIM admission document.

This announcement, for which the directors of the i-mate are solely responsible, has been approved by JPMorgan Cazenove Limited solely for the purpose of section 21 of the Financial Services and Markets Act 2000. JPMorgan Cazenove, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is advising i-mate and no-one else in connection with the flotation and will not be responsible to any person other than i-mate plc for providing the protections afforded to its clients or for advising any other person in relation to the flotation.

The securities to be offered in connection with the flotation have not been, and will not be registered under the United States Securities Act of 1933, as amended (the 'Securities Act') or under the securities legislation of any state of the United States, and may not be offered or sold in the United States. The relevant clearances have not been, and will not be, obtained from the Securities Commission of any province or territory of Canada; no document in relation to the flotation has been, or will be, lodged with, or registered by, The Australian Securities and Investments Commission; no registration statement has been, or will be, filed with the Japanese Ministry of Finance in relation to the flotation or the securities to be offered in the flotation; and no registration statement has been, or will be, filed with the Irish Stock Exchange in relation to the flotation or the securities to be offered in the flotation. Accordingly, subject to certain exceptions, the securities to be offered in the flotation may not, directly or indirectly, be offered or sold within the United States, Canada, Australia, Japan or the Republic of Ireland or offered or sold to a resident of the United States, Canada, Australia, Japan or the Republic of Ireland.

Information contained in this announcement may include 'forward-looking statements'. All statements other than statements of historical facts included in this announcement including, without limitation, those regarding i-mate's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to i-mate's products) are forward-looking statements.

Such forward-looking statements involve known and unknown risks, uncertainties and other important facts that could cause the actual results, performance or achievements of i-mate to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements.

Such forward-looking statements are based on numerous assumptions regarding i-mate's present and future business strategies and the environment in which i-mate will operate in the future. These forward-looking statements speak only as at the date of this announcement. i-mate expressly disclaims any obligations or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in i-mate's expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Information contained in this announcement cannot be relied upon as a guide to future performance.