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Easynet Group plc announces Preliminary Results for the 12 Months Ended 31 December 2004

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Easynet Group plc announces Preliminary Results for the 12 Months Ended 31 December 2004

Brussels, 24th of February 2005 - Easynet Group Plc (LSE: ESY -"Easynet", "the Company" or "the Group"), the pan-European Broadband network provider, today announces preliminary results for the twelve months ended 31 December 2004. Keith Todd, Chairman, comments the results: "This was an important year in the development of the Company as we turned EBITDA positive. We are encouraged by the additions of multinational network clients, connecting multiple sites across a private IP network utilising Easynet's European network. Easynet's 21st Century Network ("21CN") and innovative market approach continue to drive the business forward against the backdrop of declining narrowband legacy revenues. The Company continues to demonstrate strong growth and is well positioned for the new wave of "next generation" Broadband services expected to break in 2005."

Financial Highlights:

· Revenue up 24% to 144,1 million GBP (2003 116,0 million GBP)
· Gross margins continue to be strong at 53% (2003 51%)
· Positive EBITDA of 8,9 million GBP compared to a loss of 5,7 million GBP in 2003
· Operating loss for the Group declined to 13,9 million GBP (2003 loss of 15,1 million GBP)
· Europe turned EBITDA positive and generated 0,4 million GBP of EBITDA for the year (2003 loss of 5,9 million GBP)
· UK operations generated 3,2 million GBP of EBIT (2003 loss of 3,0 million GBP)
· Strong cash balance of 40,3 million GBP (H1 2004 40,1 million GBP)

The Company is on track to turn cash flow positive during the second quarter of 2005 and to turn EBIT positive by the end of the year

Operating Highlights:

· Significant corporate customer wins include Calor LPG, Thales, Ford Motor Group, Volvo, Select Education, Christian Dior, H&M, Flamant Home Interiors, and Ubitrade

Commenting on the pro forma results, David Rowe, Chairman and Chief Executive said: "I am pleased to announce another year of strong growth in the business with revenues rising by 24% from 116,0 million GBP in 2003 to 144,1 million GBP in 2004. During the period the Company generated EBITDA of 8,9 million GBP, a 14,6 million GBP improvement year-on-year on 2003. This was driven by robust gross margins (53% compared to 51% in 2003) and tight control of costs (62% of revenue in 2004 down from 72% in 2003). Revenue growth across the Company was driven by broadband connectivity, either as part of a managed network solution for corporate customers or as single business class connections. Demand in the corporate networking arena is being driven by improvements in efficiency, cost savings and by the advantages of deploying flexible fully managed broadband network solutions."

Continental European operations produced strong growth as revenue grew organically from 49.2 million GBP to 54,4 million GBP, or 11%. In addition, the Novaxess acquisition provided revenue of 12,1 million GBP, giving rise to total revenue of 66,4 million GBP, and 35% growth. This led to significantly improved profitability, with positive EBITDA for the first time of 0,4 million GBP, improved from an EBITDA loss of 5,9 million GBP in 2003. Especially pleasing was the quality of the business that the Company won during the year, with the provision of IP networks to a range of enterprise customers.

Easynet completed its pan-European MPLS network activation, and launched MPlus, its managed VPN product with flexible access options across Europe. Easynet is one of the few operators which can provide a pan-European service with local, national and international service capabilities in 8 countries directly and partnerships to provide global connectivity where required. European wins during the year included H&M, Volvo, Flamant Home Interiors, Hago, Envia Telecomunicaciones, REpower Systems AG and Moore Response Marketing. The Company continued to drive process improvements throughout the business, as demonstrated by gaining ISO9001 certification for all of the Continental European businesses in 2004. This has enabled Easynet to drive automation through the business, both at an individual country basis, as well as on a pan-European basis.

Commenting on the outlook, David Rowe added: "We have started 2005 encouragingly with a number of important customer wins. We are on track to turn cash flow positive during the second quarter of 2005 and anticipate turning EBIT positive by the end of the year. Overall, we are confident of continuing to make good progress despite the anticipated declines in narrowband revenue. The board looks forward to 2005 with confidence."

Patrick Smidts, Managing Director of Easynet Belgium, comments on the Easynet Belgium results:
"Easynet Belgium's results are in line with the Easynet Group performance. Revenues increased with 16% to more than 10,5 million EUR. This is an organic growth based on a further penetration in the corporate market, with successful services such as high-end broadband access and end-to-end managed IP VPN solutions."

Full financial results available at http://www.easynet.com/investorinfo/investorinfo_rns.asp or http://www.be.easynet.net. Photos of David Rowe and Patrick Smidts available at http://www.luna.be
Translation of press release in French and Dutch upon request at Luna.

About Easynet Group
Founded in 1994, Easynet is a leading European broadband operator, providing businesses across Europe with innovative IP-based wide-area network solutions. The company focuses on providing IP solutions that allow businesses to increase their profitability. Easynet's European network serves ten countries, enabling companies to link all their European sites to a high-quality IP-based virtual private network which is secure and reliable, supported by services that are essential to the development of Voice over IP (VoIP) solutions.
Easynet plc is listed on the London Stock Exchange. Over the last five years, the Internet Service Providers' Association (ISPA) has awarded Easynet Group on several occasions.
For further information on Easynet Group: http://www.easynet.com

About Easynet Belgium
Easynet Belgium was established in 1999. The company now employs some 65 qualified and highly motivated people in the Brussels region. The Belgian branch of the Easynet group offers integrated, managed and international Internet services to Belgian public and private organisations. Based on a qualitative and redundant IP network, Easynet's broad portfolio of products and services fulfils the Internet and interconnectivity needs of many SMEs and multinational companies: broadband Internet access, IP Sec and MPLS-based virtual private networks, Internet data centre services, Internet security and web productions.
For further information on Easynet Belgium: http://www.be.easynet.net

Or contact Karen De Muynck, Marketing Communications Manager for Easynet Belgium on
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