12 October 2006

Half-year Period End Trading Update

Endace Limited ("Endace" of the "Company") (AIM: EDA), a world leader in high speed, high capacity IT network security and analysis products, provides an update on performance for the half year ended 30 September 2006. Endace also announces that it is adopting the US Dollar as its functional currency and will be preparing its interim results under IFRS.

TRADING UPDATE

Endace is pleased to confirm that targets for the first half year have been achieved with revenue increased by over 40% to approximately US$6.2 million (H1, 2005: US$4.3 million). Profit before tax, unrealised foreign exchange gains/losses and amortisation of goodwill is expected to be approximately US$550,000 (H1, 2005: profit of US$199,000 including a realised foreign exchange gain of US$229,000 mostly arising from the one-off conversion of the IPO proceeds from GB pounds to NZ$ in June 2005).

As reported in the update statement issued on the day of its Annual General Meeting on 4 September 2006, sales growth has been achieved across all regions. The US performed strongly and Asia exceeded expectations, albeit from a modest base.

Endace's Chief Executive Officer, Selwyn Pellett commented:

"We are starting our second half year in good shape, with a backlog of orders, an encouraging pipeline of new business and plans to release a number of new products in the coming months. We have laid a firm foundation for the rest of the current financial year and continue to expect the results for the full year to be weighted towards the second half."