Trading Update

ClinPhone plc, a leading specialist supplier of technology solutions to the clinical trials industry, today provides an update on trading.

Due to a number of unrelated disruptions caused by various external telecoms suppliers, as well as internal data processing issues, ClinPhone suffered operational difficulties in June and July which have impacted the Company’s Randomisation and Trial Supply Management services to some customers.

The Company’s emergency and disaster recovery procedures were able to ensure service was maintained, albeit at a lower level of capacity. All of these issues have now been rectified and should not reoccur but the quality of service that the Company was able to provide to customers during the period was affected. This has led to a reduction in the forward order book, with a consequent impact on expected profitability in the current year.

As previously reported, the Electronic Data Capture (EDC) market continues to evolve toward a service model which recognises revenue over the duration of the study, similar to ClinPhone’s historic business. This switch from a licence to a more service-based revenue model has accelerated ahead of management’s expectations and future EDC contracts are more likely to be agreed as service contracts.

In addition, the current USD:GBP exchange rate continues to have a negative impact on the Company’s trading. On 13 June 2007 the Company stated that if the USD:GBP exchange rate averaged $1.95:£1 for the year, results for the full year would be expected to be at the lower end of analysts’ expectations.

As a result of these issues, ClinPhone now believes that profits for the year ending 28th February 2008 are likely to be significantly below market expectations. The Board is reviewing current internal projections and will make a further announcement to the market once July management accounts have been produced.

Separately, ClinPhone has also been advised by its auditors, PwC, that the fully diluted adjusted earnings per share for the year ended 28 February 2007 should have been 6.04p, an increase of 24% year on year, and not 6.87p as disclosed in the Annual Report. This non-recurring error has resulted from the incorrect treatment of a tax effect of the adjustments contained within Note 9 to the Annual Report and does not effect the diluted earnings per share of 4.92p

Enquiries:-
ClinPhone plc
Steve Kent – Chief Executive Officer
Scott Brown – Chief Financial Officer
Phone: 0115 955 7333
Fax: 0115 840 6302
Financial Dynamics
David Yates
Ben Brewerton
Phone: 0207 831 3113