Not so - Based on below company statement 12/12/02NATIONAL...

Not so - Based on below company statement 12/12/02


NATIONAL TELECOMS GROUP LIMITED 2002-12-12 ASX-SIGNAL-G

HOMEX - Sydney

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After achieving revenue of $117 million for the financial year 2002
NTG has downgraded its 2003 forecast and is now proposing growth of
20% on our 2002 results equating to some $140 million. Although the
downgrade is disappointing, a growth of 20% year on year is a strong
result in the current economic climate. Due to an increase in costs,
largely related to acquisitions, EBITDA will be some 15% below the
2002 result of $18 million at $15 million. Based on the revised
EBITDA, we estimate that the Net Profit after tax for the year ending
30 June 2003 will be in the order of $7.6 million.

NTG was on track to achieve its original revenue forecast in the four
months to end October. However, a sustained attack by the Australian
Financial Review has had a significant impact on our November
results. The Board is concerned about the longer term impact of this
negative publicity and the softening economy and believes it prudent
to reduce our aggressive sales targets accordingly.

The company has strongly rejected the AFR allegations and has
commenced legal action for defamation.

Key drivers for the revenue revision are:

* The impact of the negative publicity on sales

* The proposed sale of the IT product distribution company Senteq.
Senteq, with high revenues and low margin, is not considered to be a
strategic component of NTG's ongoing business. The sale of Senteq has
reduced our yearly forecast by some $9 million.

* In order to increase our longer term recurring revenue stream NTG
has, since we issued our original forecast, adopted a strategy of
funding some of our sales on our own balance sheet. This has the
result of less revenue being recognised upfront at the time products
are delivered. The impact of this strategy will reduce the original
2003 forecast by some $15 million.

* Softening in the outlook for the SME market

* Delay in the launch of our mobile product

NTG's EBITDA forecast has been significantly impacted by our lower
revenues and the decision to take some sales on our own balance sheet
whereby revenue and EBIT is recognised on a monthly basis.

Costs have been running above budget partly because we geared the
staff to the higher customer acquisition targets. In addition it has
taken longer to integrate the new acquisitions into the business and
the incremental costs related to the delay in the launch of our
mobile product. Some additional expenditure is also forecast in the
balance of this year to improve our internal systems and processes.

NTG completed a first level consolidation at the end of October and
is now embarking on a second level consolidation to align our costs
with the revised forecast.

Cash at Bank at the end of November was $7.5 million, following
payments of some $2.6 million on the Share Buy Back program, income
tax payments of $1.1 million, dividend payments of $1.7 million and
approximately $2 million on the internal financing of sales.

The company has no debt and has taken the decision to put on hold
further internal financing until our cash position improves. The
company has the ability to sell the internal finance book if it
wishes to bring forward receipts.

The Board is confident that thecompany has sufficient cash to meet
all our operating needs.

NTG announced in September a plan to re-purchase up to 10% of its
stock over a 12 month period. NTG is on track with its buyback having
purchased 2,399,733 shares for $2,629,329. The Board has reconfirmed
its intention to continue its planned buyback in line with the
original plan over a 12 month period. However share purchases will be
made considering the company's ongoing cash requirements.

The Board has separately announced to the ASX that Ron Nissen will
take on the task of executive chairman following Jeff Kennett's
previously announced decision to step down. Over the next few months
Mr Nissen will be looking to strengthen the Board and management
team, and will be actively involved in dealing with the issues
presently facing the company.

The Company will hold a conference call to discuss its revised
forecast at 1.00pm AEST today. Interested parties should telephone
1800 730 235.

N J V Geddes
SECRETARY