Marlborough Stirling announces its intention to float

Johannesburg, 04 Mar 2001

The board of Marlborough Stirling plc announces that Marlborough Stirling intends to seek a flotation on the London Stock Exchange involving a global offer this Spring. UBS Warburg has been appointed sponsor, financial adviser, global co-ordinator and bookrunner to the global offer. HSBC Investment Bank is acting as co-lead manager.

Key Points:

. Marlborough Stirling is a leading provider of software and services to the mortgage, life and pensions and investment market sectors.
. Its clients include major banks, building societies, insurance companies and pension providers such as Alliance & Leicester, Bank of Scotland, Citilife Financial, Clerical Medical, Egg, Nationwide Building Society, Northern Rock, Prudential, Sanlam and Sun Life Financial of Canada.
. The Group delivers its software directly to clients through licensing (combined with implementation, customisation and maintenance and support services) as well as via ASP and other outsourcing services which utilise the Group`s software.
. Marlborough Stirling`s software delivers significant business benefits and cost savings to clients through improved efficiency, more effective distribution of products and improved customer service.
. In the year ended 31 December 2000, turnover and EBITDA were lb50.1m and lb11.4m respectively (1999: lb26.9m and lb2.6m respectively) (unaudited). Turnover has grown by 58% per annum between 1998 and 2000.
. The Group`s key software products are Lamda, Omiga and Optimus which often form a critical element of the information technology platform used to support clients` core business operations. * The Group`s software enables clients to manage the entire life cycle of their mortgage, life and pensions and investment products from initial customer enquiry and application through to final maturity or redemption of the product.
. Marlborough Stirling`s competitive strengths include its focus on vertical market sectors in the financial services industry and its ability to demonstrate the cost and business advantages of utilising its software through its own outsourcing operations.
. Marlborough Stirling is based in Cheltenham in the UK and has operations in South Africa, Ireland, Isle of Man and Canada. At 31 December 2000, Marlborough Stirling had approximately 840 employees.
. The proceeds of the global offer will enable Marlborough Stirling to finance organic growth and to take advantage of acquisition opportunities. Flotation will further enhance Marlborough Stirling`s position in competing for significant contracts amongst the Group`s largest potential clients.

Commenting on today`s announcement, Huw Evans, Chairman of Marlborough Stirling, said:

"Thanks to the quality of our people, software and track record, we believe the company is in an excellent position to help lead the transformation of the rapidly developing financial services industry. We create systems and software that help make cheaper mortgage, pensions and savings products possible at a time when financial services companies face significant regulatory and competitive pressure to reduce costs. Our software and services allow our clients to offer competitive products in a growing market as individuals take greater responsibility for their savings and pensions provision.

Flotation is the next logical step towards achieving our strategic objectives of expanding our presence in existing and related vertical market sectors in the UK and internationally."

Marlborough Stirling

Marlborough Stirling is a leading provider of software and services to the mortgage, life and pensions and investment market sectors. The Group has developed significant expertise in the provision of its software and services to companies in these vertical market sectors and its clients include major banks, building societies, insurance companies and pension providers.

The Group delivers its software directly to clients through licensing (combined with implementation, customisation and maintenance and support services) as well as via application service provision ("ASP") and other outsourcing services which utilise the Group`s software. This approach allows the Group to support the varying infrastructure requirements of different business models in its target vertical market sectors, capitalising on business opportunities that are not available with direct software delivery. The Group believes that use of its software in its outsourcing operations provides a competitive advantage by enabling easier demonstration of the cost and business advantages which can be derived from use of its software by clients which helps them justify their expenditure on the Group`s software and services.

The Group is based in Cheltenham, UK and has other offices in Brighton and Camberley, UK; Dublin, Ireland; Douglas, Isle of Man; Cape Town, South Africa; and Toronto and Vancouver, Canada. As at 31 December 2000, the Group had approximately 840 employees.

Key software products

The Group`s key software products are Lamda, Omiga and Optimus which often form a critical element of the client`s information technology platform supporting its core business operations.

Lamda

Lamda enables clients to manage the entire life cycle of their life and pensions products from initial customer enquiry through to final policy maturity thereby providing a straight through processing solution. Lamda supports the sale and processing of applications by customers for life and pensions products via new electronic channels such as the internet and traditional channels such as call centres, branches and intermediaries.

Omiga

Omiga enables clients to manage the multi-channel sale and processing of mortgages from initial customer enquiry through to release of funds. It supports the sale and processing of mortgage applications for customers via both new electronic and traditional channels. Although clients have generally used Omiga for mortgages, it also supports sales automation for other financial products.

Optimus

Optimus enables clients to manage their mortgages from the release of funds through to mortgage redemption in areas such as rate changes, arrears management, further advances, customer communication, securitisation and the provision of online access to mortgage accounts via the internet. Optimus can be combined with Omiga to provide a straight through processing solution for mortgages from initial customer enquiry to redemption

Clients

The Group`s clients include Alliance & Leicester, Bank of Scotland, Citilife Financial, Clerical Medical, Egg, Nationwide Building Society, Northern Rock, Prudential, Sanlam and Sun Life Financial of Canada.

Strategy

The Group`s strategy is to become the leading provider of software and services to the mortgage, life and pensions and investment markets. It also intends to become a leading provider of similar solutions to related vertical market sectors such as fund management, unit trusts and personal loans. The Group intends to achieve these objectives by developing and broadening its software and services offerings and by expanding the geographical markets in which it operates.

History

The business of the Group was established in January 1987 and from the outset has focused on the financial services industry. Omiga was first introduced to the mortgage market in 1989. Lamda was first introduced in 1994 and was developed using the understanding of the requirements of the life and pensions sectors based on experience gained in providing outsourcing services to this market since 1988. The latest versions of Lamda and Omiga were introduced in 1999 and 2000 respectively. Optimus was added to the Group`s product suite when Marlborough Stirling acquired Plexus Systems Design Limited in November 2000.

Marlborough Stirling has expanded its operations outside the UK commencing in 1997 with initial entry to the South African market where it now has two clients (including Sanlam, one of the largest financial services providers in South Africa, which uses Lamda). In August 2000, Marlborough Stirling acquired Life Strategies Limited, an actuarial and management consultancy based in Dublin. Dublin is the base for a significant number of financial services companies targeting expansion into Europe and Life Strategies holds a prominent position in providing consultancy services to such companies.

Also in August 2000, Marlborough Stirling acquired WebTech Software Limited, a provider of offshore life and portfolio management software based in the Isle of Man, which has enabled the Group to enter the wealth management field.

The acquisition of Plexus also provides a platform for marketing the Group`s software and services to Plexus` existing and potential clients in the Canadian financial services industry.

In December 2000, the Group entered into a joint venture with Egg to create Marlborough Stirling Mortgage Services Limited, a mortgage outsourcing company. This joint venture provides a mortgage management solution and outsourcing service using the Omiga and Optimus software.

Financial information

In the year ended 31 December 2000, the Group generated turnover and earnings before interest, tax, depreciation and amortisation of approximately lb50.1 million and lb11.4 million respectively compared to lb26.9 million and lb2.6 million respectively in the year ended 31 December 1999. Turnover has grown by 58 per cent per annum between 1998 and 2000. In the year ended 31 December 2000, 24 per cent of turnover came from overseas contracts compared with nil in the year ended 31 December 1998. The above figures are unaudited.

Marlborough Stirling generates turnover primarily from licence, customisation and implementation fees, maintenance and support services and outsourcing (including ASP) services.

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