Financial and business highlights:

• Turnover increased by 26% to £720,278 (2004: £572,283)
• Continued investment in R&D and enhanced exchange coverage resulted in a loss before tax of £547,447 (2004: £419,898)
• Cash position of £1.3 million as at 31 December 2005 (2004: £2.3 million)
• All live market data services successfully integrated under the MarketTerminal brand
• Progress made on a number of revenue-enhancing initiatives to capture new market opportunities

Chief Executive's statement

In the six months ended 31 December 2005, KTS has made encouraging progress in seeking additional revenue streams from new initiatives.

As shareholders were previously informed, intense competition among vendors of UK market data display applications has exerted pressure on profit margins and turnover growth. Last year, the Board therefore decided to enhance growth by seeking potential additional income streams which exploited KTS's core technologies.

Against a background of strong competition first half sales of MarketTerminal, our live international market data display service, rose by 26% to £720,278 (2004: £572,283) and our subscriber base remained steady at 130 client organisations.

We have also maintained our commitment to develop our technology, customer service and the quality and depth of data available on MarketTerminal. Further investment in these areas led to higher pre-tax losses of £547,447 (2004: £419,898). Our cash position as at 31 December 2005 was £1.3 million (2004: £2.3 million).

In January, we successfully unified our live market data products into a single, customisable solution - MarketTerminal. We are pleased that clients have responded positively to this initiative and we have successfully migrated our subscriber base to the new MarketTerminal service. We believe that our MarketTerminal subscription service, that includes access to live share prices, analytics and news from major markets around the world, and exchange rates for more than 170 currencies, remains a highly attractive product.

As previously reported, our strategy is to complement the provision and further development of our MarketTerminal subscription service with new growth initiatives. These include indirect sales of MarketTerminal through international resellers, the introduction of a fully integrated mobile market data service for handheld devices and the seamless integration of our MarketTerminal display application with clients' existing market data infrastructures.

In line with the current industry trend towards increased mobility we are planning the launch of an end-to-end mobile handheld market data service within the current financial year.

With regard to client data integration solutions, we have identified an opportunity to license our proven MarketTerminal display application to clients for integration with their existing market data infrastructure. This is particularly relevant to larger financial institutions who will benefit from the high level of customisation, ease of deployment and low cost of ownership which a tailored implementation of the MarketTerminal display application provides. The integrated MarketTerminal solution is particularly well suited for clients to display their own internal quote data, without depending on third party quote vendors.

There has been considerable interest from a number of banks, one of which is currently carrying out a proof of concept evaluation.

Outlook

"This continues to be a challenging market in which to provide live market data applications. KTS is responding positively to this challenge and we are pleased that our initiatives to create additional income streams, currently at early stages, are progressing well."

Dr. Marc Pinter-Krainer
Chief Executive
27 March 2006