Key Points:

•Flotation of Symphony will create long-term value for Eckoh shareholders
•Eckoh to focus on growing Speech Solutions division
•Eckoh’s management team delivering on its ongoing strategic review
•Eckoh to hold a minimum of 64.64 per cent. of the issued ordinary share capital of Symphony
•Symphony proposing to raise £4.51 million, before expenses with an expected market capitalisation of £12.75 million

The transaction
Eckoh, one of Europe's leading speech application service providers, is pleased to announce that Symphony Telecom Holdings plc (“Symphony”), a wholly owned subsidiary, is to seek a separate listing on AIM. The flotation of Symphony, which forms part of an ongoing strategic review of Eckoh will create long-term value for Eckoh’s shareholders.

As part of the flotation, Symphony is proposing to carry out a placing of 10,997,561 ordinary shares in order to raise £4.51 million, before expenses. As a result of the flotation of Symphony, Eckoh is expected to hold a minimum of 64.64 per cent. of the issued ordinary share capital of Symphony on admission, and accordingly, Symphony will continue to be a subsidiary of Eckoh. Symphony’s financial results will therefore continue to be consolidated into the financial statements of Eckoh and its subsidiary undertakings (the “Eckoh Group”) until such time as Eckoh’s shareholding falls below 50 per cent.

Rationale and reasons for the flotation of Symphony
Since July 2004, Eckoh’s directors and its advisor have been evaluating a number of strategic options for Symphony, in order to create long-term value for Eckoh and to simplify the Eckoh Group. Following Symphony’s acquisition of Anglia Telecom Centres Limited (“Anglia Telecom”) on 29 April 2005, the directors are of the opinion that the flotation of Symphony will achieve these objectives.

Eckoh’s continuing operations
Following the flotation of Symphony, the continuing Eckoh Group will operate two principal trading divisions – Eckoh Speech Solutions and Eckoh IVR.

Eckoh Speech Solutions
Eckoh is a leading European provider of self-service call centre solutions using advanced speech recognition and related technologies. The Company has a speech alliance with BT to provide its corporate customers with hosted speech recognition services. This contract was recently extended to 2010.

Eckoh’s current Speech Solutions’ clients include TD Waterhouse, Barclays, William Hill, UGC and Vue Cinemas, ATOC (Association of Train Operating Companies), Northern Ireland Electricity and O2.

During the year ended 31 March 2005, Speech Solutions increased turnover by 56 per cent. to £5.0 million compared to the prior financial year (2004 – £3.2 million) and generated a gross profit margin of 53 per cent. (2004 – 53 per cent.).

Eckoh IVR
Eckoh’s IVR division operates in two distinct markets, as follows:

Advertised Services
Eckoh provides a range of consumer entertainment products such as dating, community chat, competitions and content services, which are available to both fixed line and mobile users.

During the year ended 31 March 2005, turnover from the advertised services market was £11.6 million (2004 – £11.6 million) with a gross margin of 43 per cent. (2004 – 34 per cent.).

Client Services
Eckoh delivers end-to-end IVR solutions including creation, design, development, implementation, deployment, hosting and reporting to a number of prominent media owners such as ITV, Trinity Mirror, Channel 4, IPC, EMAP and Northcliffe Newspapers.

During the year ended 31 March 2005, turnover from the client services market was £39.0 million (2004 – £22.6 million) and generated a gross profit margin of 9 per cent. (2004 – 10 per cent.).

Strategy of Eckoh’s continuing operations
It is intended that during the remainder of the current financial year, the directors will continue their strategic review of the continuing Eckoh Group, with a view to maximising long-term value for shareholders by focusing on Eckoh’s growing Speech Solutions business. This ongoing strategy is demonstrated by the announcement today of the flotation of Symphony and also by the recent announcement on 1 August 2005, relating to the disposal of Freecom.net Limited (“Freecom”), Eckoh’s internet services subsidiary, to eDirectory.co.uk plc. During this review, Martin Turner will remain as CEO of Eckoh, although it is intended that he will step down from the executive Board following completion of the strategic review, which is expected by the end of the current financial year.

Current trading and prospects
On 7 July 2005 Eckoh announced its preliminary results for the year ended 31 March 2005. The Company reported a 28 per cent. increase in turnover to £79.7 million (2004 – £62.5 million), an increase in pre-tax profits to £0.9 million (excluding intangible asset amortisation and impairment charges) (2004 pre-tax loss of £0.3 million) and an increase in year end cash balances to £13.3 million (2004 – £10.2 million) reflecting strong cash generation from operations during the financial year. Excluding Symphony and the recently disposed of Freecom subsidiary, Eckoh generated a pre-tax loss for the year ended 31 March 2005 of £0.4 million (excluding intangible asset amortisation and impairment charges) on turnover of £55.6 million.

Eckoh is currently trading broadly in line with management’s expectations, although Speech Solutions revenues in the first half of the current financial year are likely to be adversely impacted by lower call volumes to its cinema ticketing services. Notwithstanding this trend, based on current trading, the financial performance of the Eckoh Group for the year ended 31 March 2005, recent commercial contract successes, including the renewal of the BT contract, the disposal of Freecom and ongoing discussions with a number of potential new clients, the Directors are confident of the Company’s future prospects.

Circular to shareholders and notice of EGM
On admission of Symphony to trading on AIM, Eckoh will hold approximately 64.64 per cent. of the issued share capital of Symphony. However, in anticipation of a future transaction which could reduce Eckoh’s holding in Symphony to below 50 per cent., Eckoh is to seek the necessary approval of its shareholders at the extraordinary general meeting of the Company to be held at 10.00a.m. on 21 September 2005. Accordingly, the Company has today posted a circular to shareholders, incorporating the necessary notice of EGM (the “Circular”). Words and expressions used in this announcement have the same meaning as those set out in the Circular.

Eckoh Technologies plc
Martin Turner, Chief Executive Officer
Nik Philpot, Chief Operating Officer
Adam Moloney, Group Finance Director
Tel: 08701 100 700

Evolution Securities
Matt Wood / Bobbie Hilliam
Tel: 020 7071 4300

Buchanan Communications
Jeremy Garcia
Tel: 020 7466 5000