Trading Update & Contract Win

BATM Advanced Communications Ld 1 July 2002 Embargoed for release at 3.30pm: 1 July 2002 BATM Trading Update and Major Contract Award Following the completion of the first half of the year, BATM Advanced Communications Limited (LSE: BVC), a leading designer and producer of broadband data and telecoms systems, today updates shareholders on current trading. It is also pleased to be able to announce that BATM has been awarded a major contract (worth $33m over 3 years) by a leading regional Bell operating company in the United States to be its exclusive supplier of certain access equipment. Trading conditions are tough at present and make it difficult to predict performance in the next few months. BATM expects to announce its interim results in early September and anticipates turnover for this period will be approximately 20% lower than current market forecasts, primarily because of a further weakening in the key US market. The reduction in turnover also reflects the extra caution we have taken in avoiding business where the collection of debt might be in doubt. However, BATM believes that trading losses for the half year ended 30 June 2002 will be in line with market expectations. The Company believes that the weakness in the telecom sector will continue throughout the year 2002, but is confident that as soon as recovery starts it will emerge significantly stronger and well positioned in the market, as demonstrated by the award of the major contract described below. The short term impact of continuing market weakness is that both turnover and profitability for the full year are likely to be significantly below current expectations, although there may be scope for improvement on this from possible further orders. BATM benefits from having a strong cash position without any debt: cash and money market investments at 30 June 2002 were at a similar level to the over $56m reported for the full year, and the Company is therefore well-positioned to ride out the current tough market. In that context, the Board is pleased to announce that Telco Systems, a wholly owned subsidiary of BATM, has just signed an exclusive $33 million three year agreement with a leading regional Bell operating company ('RBOC') in the US to be its sole provider of certain Edge Access devices and multiplexers. These products will be used by the RBOC in its regional inter-office core network and also in installations in customers' premises. This agreement is for a three-year period and is expected to generate $33 million of revenues for BATM over that period, demonstrating that BATM is well placed to win significant contracts for its products where there is demand. Zvi Marom, CEO of BATM, said: 'Conditions in the telecommunications market remain extremely tough for everyone and we do not anticipate an upturn until 2003 at the earliest. We do not therefore believe that our original targets for 2002 are now achievable. However, being able to announce this substantial new deal in these conditions validates the pre-eminence of BATM's technology. This technological pre-eminence, together with our strong financial position, will continue to stand us in good stead for the future able to fully capitalise on an upturn in market conditions as it arises. Enquiries: BATM Advanced Communications +972 3 938 6888 Dr Zvi Marom, Chief Executive Ofer Bar-Ner, Chief Financial Officer Financial Dynamics James Melville-Ross/Alastair Hetherington 0207 831 3113 This information is provided by RNS The company news service from the London Stock Exchange