Trading Statement

Nasstar plc

Trading Statement

14th July 2014

Nasstar plc ("Nasstar" or the "Company"; stock code: NASA), a provider of Hosted Desktop cloud computing, today issues the following trading update for the half year ended 30 June 2014.

Trading in the first half of the year gives the Board confidence that its 2014 full year expectations for the Group will be met. Highlights of the first half of the financial year are:-

· Good progress on the integration of Nasstar (UK) Limited ("Nasstar UK") and e-know.net Limited ("e-know.net"), with cost and revenue synergies being achieved.

· Datacentre consolidation executed as planned, reducing data centre numbers down to four from six by the end of May 2014.

· Focus on restructuring Nasstar UK, transforming the business from loss making to sustainable profit making with its first positive monthly EBITDA achieved in June 2014.

· e-know.net's continued focus on the vertical markets of Legal, Recruitment and Finance has generated business and profitability in line with expectations.

· New contract wins included a key strategic client win for e-know.net, which secured a new five year contract to supply hosted desktops, a wide area network and local support services to Wiggin LLP, a 110 user law firm with locations in Cheltenham, London and Brussels.

Update for each of the Groups subsidiaries:-

Trading Performance e-know.net

Performance for e-know.net has been in line with management expectations. e-know.net's vertically aligned go to market strategy has enabled it to continue on the execution of its growth strategy, including signing fully managed Hosted Desktop solutions with 4 new law firm clients in the first half of the year, plus a significant managed support service contract with a recruitment company.

Trading Performance Nasstar UK

The focus for the first six months of the year has been to transform Nasstar UK into an operationally and financially sustainable model. e-know.net's management team and working disciplines have been rolled out within Nasstar UK, culminating in this subsidiary generating its first positive EBITDA contribution in June. The Board expects this to be sustainable for the rest of the year and beyond.

The successful turnaround of Nasstar UK has been achieved by:-

· The execution of cost consolidation exercises.

· Introducing new pricing policies for all new business.

· Increasing the sales prices to current customers as appropriate.

· Exiting from or renegotiating loss making contracts.

· Introducing a direct go to market strategy, shifting the focus away from the lower margin reseller channel.

Interim Results

Group results for the half year ended 30 June 2014 are expected to be released on 15 September 2014.

For further information, please contact:-

Nasstar plc +44 (0) 1952 225 000

Nigel Redwood, Chief Executive Officer

Niki Redwood, Finance Director

finnCap Limited (Nominated Adviser & Broker) +44 (0) 20 7220 0500

Julian Blunt, James Thompson (Corporate Finance)

Victoria Bates (Corporate broking)