3 August 2004 PLASMON PLC 2004 AGM STATEMENT

At today's Annual General Meeting, Plasmon will issue the following statement:

As we highlighted in our Annual Report, the initial ramp of UDO (Ultra Density Optical) production was hampered by some component supply issues. After much detailed work with our suppliers, these component shortages are now resolved and with increasing manufacturing yields we expect to achieve our initial target output of 1,000 drives/month within the first half. The market response to UDO continues to be excellent and the product is proving to be very reliable in the field.

In late May we commenced shipments of UDO drives and media to HP and our relationship is developing well. We continue to supply sample UDO drives and libraries to other potential OEM customers and expect to sign some significant new partners later in the year.

The growth of these OEM opportunities is largely dependent on the availability of software support for UDO from the major storage management software vendors. In late June, the market leader Legato announced support for UDO libraries and support under IBM OS400 will be available in mid August. Software support for standalone drives is proceeding more slowly than expected which will delay the growth of new standalone applications for UDO drives to the second half.

In July we delivered the first UDO Archive Appliance prototypes on schedule to a major medical imaging customer. This integrated solution is attracting considerable interest from other major customers and we will commence further integration programmes in the coming months.

The return to growth seen last year has continued into the current year despite a 13% adverse movement in the £:$ exchange rate. Whilst the rate of growth has been held back by the initial shortage of UDO drives, production volumes are now increasing and with the growing availability of software support, we expect UDO to drive substantial increases in our future revenues.