A proven innovator in Interactive Media

Cellcast News

Final Results for the year ended 31 December 2008

09 June 2009

HIGHLIGHTS

• Group revenues from continuing operations rose 33% to £16 million, driven by new and expanded distribution in the UK digital TV market. All 2008 revenues were generated in the UK, following the discontinuation in 2007 of remaining overseas activities
• Group continued to produce over 600 hours of live interactive television per week, distributed across eleven channels on the Sky Digital and other television platforms and increasingly via the web and mobile services
• Gross profit from continuing operations increased to £1.4 million from £0.9 million in 2007
• Group general and administrative expenses reduced by 33% to £1.4 million (£2.1 million in 2007), principally achieved through a reduction in staffing costs
• After a £1.2 million profit on sale of the Sky channels, Cellcast's 37.5% share of the losses in Cellcast Asia and a Research and Development tax credit, profit after tax for the year was £0.3m compared to a loss in 2007 of £2.2 million
• Technology division maintained its pioneering reputation, delivering improvements and new product developments for the group's proprietary Cellcast Interactive Platform
• UK operations returned to profitability on a significantly lower cost base, current credit facilities considered sufficient for the foreseeable future
• Ofcom have yet to complete their ruling on Participation TV which still may lead to regulations that could significantly constrain the Company's ability to maintain revenue at current levels.
• Aside from these unresolved regulatory issues, outlook is positive despite the unprecedented economic challenges, with expanded distribution of the group's channels and formats in a still-growing UK market for 3G, IPTV and video mobile services

Julian Paul, Chairman of Cellcast plc, commented:

"In 2008 the Company successfully completed its plan to become a substantially UK based business, growing revenues by 33% and reducing the head count to some 23 staff. Nevertheless, in the current economic climate, it is appropriate to be cautious about the future.

The group was profitable in the first quarter of 2009 but faces increased pressure on margins. However, with additional distribution outlets secured in the current year, our technological expertise and innovative solutions, and working from a reduced cost base, we are confident of the group's ability to prosper in this climate."

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