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Interim Results for the six months ending 28 February 2005

VTR plc announces its interim results for the six months ending 28 February 2005

·        Turnover, affected by delay in the completion of restructuring, down 8% to £11.7 million (2004: £12.7 million).

·        Profits before tax and exceptional credit £353,133 (2004: £401,607)

·        Profits before tax after exceptional credit £471,761 (2004: £401,607)

·        Profits for the full year forecast to be below market expectations

·        EPS up 22% to 2.8p (2004: 2.3p)

·        Gearing down to 101% from 107% in August 2004

·        eTITLE automated subtitling product to launch February 2006

Philip Lovegrove, Chairman, VTR plc comments, “It is disappointing that the realisation of the benefits from the restructuring is behind schedule but the level of bookings has improved at the start of the second half, a trend which we hope to see maintained over the coming months. Provided this improving trend continues, your Board believes that, with costs firmly under control, the outcome for the full year should compare with the declared pre tax profit before the exceptional charge of the previous year but will inevitably be below market expectations. On a more positive note the long term potential for eTITLE is considerable.”

For further information please contact:

John Banks, Managing Director, VTR plc 020 7437 0026

Lawrence Dore, Mantra Public Relations 020 7907 7800

Ryszard Bublik, Mantra Public Relations 07977 987 991

CHAIRMAN'S STATEMENT

As previously announced, the Board began a major restructuring of the Group's businesses at the end of the last financial year. The Board were aware that some of the changes required would impact on turnover in the short term but believe that the efficiencies and savings derived from making these changes will, in the longer term, reverse this trend.

It is disappointing that the realisation of the benefits from the restructuring is behind schedule but the level of bookings has improved at the start of the second half, a trend which we hope to see maintained over the coming months. Provided this improving trend continues, your Board believes that, with costs firmly under control, the outcome for the full year should compare with the declared pre tax profit before the exceptional charge of the previous year but will be below market expectations.

In the six months to 28 February 2005 the Group made a profit before an exceptional credit and taxation of £353,133, as compared with £401,607 in the same period last year, despite turnover reducing from £12,718,334 to £11,702,930. After the exceptional credit, which was a writeback of the overprovision of the estimated cost of the restructuring, the profit before taxation was £471,761.

Earnings per share rose from 2.3p to 2.8p while interest cover remained unchanged at 2.6 times earnings.

The reorganisation of Video Tape Recording, blue post production and The Machine Room, as divisions of VTR Media Services Limited is almost complete, although three or four months later than was originally envisaged. The businesses are refocused within their defined market segments and the client base is beginning to grow even though some newly appointed staff are yet to start with us. However, while K<POST had another successful six months, the delay in completing the reorganisation means the recovery in turnover is also behind schedule, and this has continued into the third quarter, although turnover in March has seen an improvement on the three previous months.

On a more positive note eTITLE, the Group's subtitling and automated translation product, whose development has been funded by an EU grant, was very successfully introduced last September at the International Broadcasting Convention in Amsterdam. Prototype eTITLE software will be demonstrated at the National Association of Broadcasters exhibition in Los Angeles this month prior to a launch of the fully developed product in February 2006. This innovation, which we believe will provide substantial savings on the current cost of subtitling, will be launched into the global market. Proposed legislation requires subtitling of new programmes to increase substantially in both Europe and the USA by 2008. Currently we are taking steps to formulate our marketing and distribution strategy for eTITLE and to assess the likely funding needed to achieve this.

Gearing has fallen to 101% as compared with 104% in February 2004 and 107% in August 2004 after capital expenditure for the half year of £1,054,000.

Net debt fell to £6,204,000 in February 2005 from £6,810,000 in February 2004 and £6,239,000 in August 2004. This is especially pleasing as the redundancy costs provided for in August 2004 are being paid out during this financial year.

No interim dividend will be declared this year but your Board will keep the matter under review.

The disruption caused by the reorganisation added to a difficult trading climate in the last five months has presented the Group with a number of demanding challenges. These are being met, progress is being made and the trading outlook has improved. The Board are hopeful that with future prospects appearing to improve the Group's recovery will now gather pace.

Philip Lovegrove

Chairman

8 April 2005