Smallworldwide plc Reports Results for First Quarter Fiscal 1998.

CAMBRIDGE, U.K.--(BUSINESS WIRE)--Nov. 5, 1997--

Company Reports 41.4% Rise in Revenues to $13.0 Million

During Quarter; Software License Revenues Increased 65.3%

to $8.0 Million

Smallworld Reports Net Income of $0.5 Million, or

$0.06 Per Share

Smallworldwide plc (Nasdaq: SWLDY) today announced unaudited results for the first quarter of fiscal 1998. Smallworld develops and markets engineering, business and operations support software for utilities, telecommunications companies and other public and private enterprises.

Revenues for the quarter, ended September 30, reached $13.0 million compared with revenues of $9.2 million for last year's comparable period, an increase of 41.4%. Software license revenues increased 65.3% during the quarter to $8.0 million, or 61.8% of total revenues, from $4.9 million, or 52.9% of total revenues last year. Revenues generated from services and maintenance were $4.8 million versus $4.2 million in the comparable period a year ago.

The increase in revenues was due to increasing sales of software licenses to existing customers such as Sydney Water, Powercor (Melbourne, Australia) and Deutsche Telekom, which completed its purchase of software licenses for its Megaplan project, together with 34 new customers including Metronet (Calgary, Canada) and Utilicorp in the US and City West Water (Melbourne, Australia).

Gross profit for the first quarter increased 58.9% to $9.4 million from $5.9 million last year, reflecting the favorable change in revenue mix towards software licenses, together with improving services and maintenance margins.

Operating expenses were $8.9 million versus $6.1 million in last year's first quarter. The increase reflects continued planned expansion in the Company's research and development and sales and marketing efforts, in particular.

The Company reported an operating income of $588,000 for the quarter versus an operating loss of $174,000 last year and net income of $477,000, or $0.06 per share, compared with a net loss of $197,000, or $0.03 per share, in last year's first quarter.

Smallworld's Chairman, Dick Newell, said, "We are particularly pleased with the increase in license revenues during the quarter, as it demonstrates continued strong demand for our software from leading utilities and telecommunications providers around the world. Revenues generated from business with existing Smallworld customers, together with the new business gained during the period, underline the recognition that our object-oriented technology is receiving for its considerable flexibility, power and ease of use."

Andy Stafford, Smallworld's Chief Executive Officer, said, "In the first quarter, we expanded into markets and business areas that carry tremendous opportunity over the long term. In addition to growing our business in the United States and Europe, we successfully increased our revenues in the Asia Pacific region - most particularly with sales to leading utilities in Australia. We attribute these developments to the ongoing investments we are making to expand, and deepen, our presence in markets of strategic importance."

In other operating highlights, Smallworld made progress on several ongoing initiatives during the quarter. Investment increased in the development of applications aimed at various Smallworld focus markets. In particular, the company commenced work on its Outage and Distribution Management System (ODMS), an application being developed for Smallworld's electricity customers in North America and other overseas markets.

Smallworld (http://www.smallworld-us.com) develops and markets engineering, business and operations support software for utilities, telecommunications companies and other public and private enterprises. The Company's technology automates business processes that are critical for enhancing customer service, business planning, network engineering and facilities maintenance. Smallworld's object-oriented software is designed to deliver a low cost of ownership while supporting rapid deployment of enterprise applications and seamless integration with other systems. The Company, headquartered in Cambridge, England, has about 500 customers in over 22 countries around the world. -0-

Please note: Some statements contained within this report may be of a forward-looking nature and may involve risks and uncertainties. Actual future results and outcomes may differ materially from those discussed. Factors that may cause such differences include, but are not limited to, management of growth, market acceptance of the Company's products and services, risks associated with new product versions, dependence on third party relationships and the activities of competitors. -0-

               SMALLWORLDWIDE plc AND SUBSIDIARIES
         UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS
              (In thousands, except per share data)


                                    Three months  Three months
                                       ended         ended
                                      Sept. 30,     Sept. 30,
                                        1997          1996
                                     (unaudited)  (unaudited)

Revenues:
  Licenses                              $8,039       $4,862
  Services and maintenance               4,816        4,169
  Other                                    144          160
    Total revenues                      12,999        9,191

Cost of revenues:
  Licenses                                 689           77
  Services and maintenance               2,826        3,055
  Other                                     35          114
    Total cost of revenues               3,550        3,246

Gross profit                             9,449        5,945

Operating expenses:
  Research and development               1,926        1,202
  Sales and marketing                    5,388        3,519
  General and administrative             1,547        1,398
    Total operating expenses             8,861        6,119

Income (loss) from operations              588         (174)
  Other income, net                         88            3
  Interest on securities                   151            -
  Interest income (expense), net           100          (13)
Income (loss) before income taxes          927         (184)
  Provision for income taxes               450           24
  Share of income from equity affiliates     0           11
Net income (loss)                         $477        ($197)

Net income (loss) per share              $0.06       ($0.03)

Shares used to compute net income
 (loss) per share                        8,236        5,960

-0-

               SMALLWORLDWIDE plc AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
                         (In thousands)

                                       Sept. 30,    June 30,
                                          1997        1997
                                      (unaudited)  (unaudited)

ASSETS
Current assets:
  Cash and equivalents                   $11,672       $6,975
  Short-term investments                   1,504        4,000
  Accounts receivable                      9,505       15,559
  Inventories                                641          932
  Amounts receivable from equity
   affiliates                                487          146
  Prepaid expenses and other assets        2,620        2,371
  Deferred income taxes                    1,952        2,002
    Total current assets                  28,381       31,985

Long-term investments                      8,646        8,291
Property and equipment, net                4,398        4,058
Deferred income taxes                        357          357
Goodwill                                     343          370
Equity investments                           268          276
  TOTAL ASSETS                           $42,393      $45,337

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable                        $3,399       $3,619
  Income taxes payable                     1,227          863
  Personnel taxes                            584          334
  Accrued liabilities                      5,299        6,926
  Accrued contractual liability                0        2,400
  Deferred revenue                         2,250        2,002
  Current portion of capital lease
   obligations                               337          341
    Total current liabilities             13,096       16,485
Accrued liabilities, less current portion      0           26
Capital lease obligations, less current
 portion                                     207          305
Deferred revenue, less current portion       587          330
    Total liabilities                     13,890       17,146

Shareholders' equity:
  Ordinary and Preference Shares             141          140
  Cumulative translation adjustment         (367)         (48)
  Additional paid-in capital              25,365       25,268
  Accumulated unrealized losses on
   investments                               (24)         (80)
  Retained earnings                        3,388        2,911
    Total shareholders' equity            28,503       28,191

TOTAL LIABILITIES AND SHAREHOLDERS'
 EQUITY                                  $42,393      $45,337

CONTACT: Andy Stafford

Chief Executive Officer

SMALLWORLDWIDE plc

+(44) 1223 301144

[e-mail]

or

Ian McShane

Controller

SMALLWORLDWIDE plc

(44) 1223 301144

[e-mail]

or

Jason Kendy

Gerard Carney

Gavin Anderson & Co.

[phone]

[e-mail]