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29 February 2004 Interim Results Announcement

VTR plc announces its interim results for the six months to 29 February 2004.

•  Group profit before tax of £401,607 (2003: £53,878)

•  EPS 2.3p (2003: 0.3p)

•  Gearing down to 104% (2003: 126%)

•  Major archive restoration project from BBC won by The Machine Room

•  Clipstream starts work on e-Title project

Making the announcement Chairman Philip Lovegrove said:

“There has been some improvement in market conditions since last year with more volume going through although prices continue to be under some pressure. As a result we have seen an upturn in our profitability which we hope heralds the first steps of a return to the levels we have achieved in the past.”

For further information please contact:

John Banks, Managing Director, VTR plc 020-7437-0026

Ryszard Bublik, Mantra Public Relations 020-7072-2300

CHAIRMAN'S STATEMENT

I am pleased to report that in the six months to 29 February 2004 the Group made a profit before tax of £401,607 compared with £53,878 in the same period last year. Earnings per share rose from 0.3p to 2.3p while interest cover improved to 2.6 times compared with 1.2 times in February 2003 and 1.9 times in August.

As I reported in my year-end statement, there has been some improvement in market conditions since last year with more volume going through although prices continue to be under some pressure. As a result we have seen an upturn in our profitability which we hope heralds the first steps of a return to the levels we have achieved in the past.

These market conditions have, of course, been challenging to everyone as the advertising and media industries have gone through one of the worst recessions in memory. To counter this, over the past few years your Group has invested in upgrading equipment and creating new, but related, profit centres to reduce reliance on any single market segment. In spite of this expenditure gearing has fallen to 104% from 126% last February and 113% at August 2003. Capital expenditure for the half year was £596,000.

All our companies continue to work hard to maintain and improve their market position to ensure that they are the partners of choice for some of the world's leading media and advertising businesses but it is still difficult to forecast future market conditions, even for the next few months. Video Tape Recording has improved on the performance of the same period last year helped by D-Cinema which made a positive contribution to profits after a slow start and which is now attracting a lot of interest from film makers. blue continues to be a market leader in the broadcast sector while The Machine Room, whose DVD department is currently working at capacity, recently won a major archive restoration project from the BBC. Profitability at both companies was below that achieved in the same period last year.

Despite these difficult trading conditions the hive and K<POST managed to turn in their best ever performances for the period. Clipstream, which remained loss making at February, but at a much reduced level, has started work on its e-Title project which is partially funded by the European Union e-Content programme. While this will not impact on earnings this year we believe that this is a development with great potential.

Your Board has decided that, in view of the fragility of the market recovery, it would not be prudent to declare an interim dividend this year. Payment of future dividends will be subject to results and the outlook for the media sector as a whole.

The start of the second half has seen the recent upturn in trading continue although it remains hard to predict whether this will be sustained. Your Board believes, however, that conditions will not deteriorate and that the outcome for the full year will compare favourably with that of last year.

Philip Lovegrove

Chairman