Cellcast : Interim results for the six months ended 30 June 2017

Cellcast plc

("Cellcast" or the "Company")

Interim results for the six months ended 30 June 2017

The Board of Cellcast plc (AIM: CLTV) announces the group's interims results for the six months ended 30 June 2017.

Highlights

• UK interactive broadcast revenues of £5.5 million (H1 2016: £5.3 million)

• Revenues from newly launched overseas gaming services of £300,000 (H1 2016: £320,000)

• Loss before tax of £145,000 for the period (H1 2016: profit of £78,000)

• Loss per share of 0.2p (H1 2016: earnings per share of 0.1p)

• Board changes- Samuel Malin appointed as a Non-Executive Director and Craig Gardiner appointed as Chief Executive officer, strengthening the composition of the board.

Craig Gardiner, CEO of Cellcast plc, commented:

"Revenues in our core broadcast sector have continued to decline. Nevertheless, this decline has been offset by growth in online revenues, albeit these have come at an increased cost. Steady income derived from consultancy agreements has also helped fill the gap left by the decline of the broadcast derived revenues."

"The commencement of the renegotiated supplier agreement at the beginning of August has led to a substantial and material reduction in costs, giving us increased flexibility to deal with the challenging marketplace."

For further information:

Cellcast plc
Craig Gardiner, CEO	Tel: [phone]
[e-mail]	www.cellcast.tv
Allenby Capital Limited (Nominated Adviser)
Nick Naylor/James Reeve	Tel: [phone]

CHIEF EXECUTIVE OFFICER'S STATEMENT Half year results

UK interactive broadcast revenues for the six months ended 30 June 2017 were £5.5 million, an increase of 2% on the same period last year. Revenue from the overseas gaming consultancy services represented £300,000. Gross profit for the period amounted to £89,000 (H1 2016: £378,000).

Operating costs for the period were £256,000 (H1 2016: £343,000).

Overall, the group's operations generated a loss before tax of £145,000. This compares to a profit before tax of £78,000 for the period ending 30 June 2016.

The cost of sales has risen by 7% from £5,285,847 to £5,680,171. This increase comes from the growth in online revenues that carry more direct costs.

The post-tax loss for the period amounted to £145,000. This represents negative earnings per share of 0.2p. By comparison, during the period to 30 June 2016 the group achieved a net profit of £78,000 and earnings per share of 0.1p.

The group's cash and cash equivalents at 30 June 2017 stood at £862,000 compared to a balance of

£1,189,000 at 30 June 2016.

The Company's treasury management scheme and investment strategy (the Lexinta Fund, based in Zurich) as reported in the last annual accounts amounted to £510,920. In the period, the decision was taken to redeem the investments and bring the cash back into the business, as the Fund Manager had decided it was time to liquidate the entire portfolio. The funds due back to the group are included in debtors as at 30 June 2017. The company expects to receive the remitted funds before the year-end. This will further strengthen the balance sheet of the company.

Outlook

The first six months of 2017 continued to be challenging. Revenues from Cellcast's core Voice and SMS business have continued to decline as viewing habits continue to change. However, the group has had some growing success in driving TV viewers onto the web where the service offering can be broadened. Revenues derived from the web now amount to 70% of those derived from the core broadcast business with the caveat that such revenues come with lower margins.

Consultancy and management services to companies in the lottery, gaming and entertainment sector in East Africa have provided a continuing source of revenue and both service and geographic diversification.

Costs have been significantly reduced with the new supplier agreement which was announced on 27 July 2017 and which came into effect on 1 August 2017. The new DMOL (Digital Television Multiplex Operators Ltd) EPG (Electronic Program Guide) which came into effect on 3 August saw the group's TV channels move to different viewing locations. The group will continue to monitor any impacts on the revenues that this may have in the second half of the year.

Craig Gardiner

Chief Executive Officer 25 September 2017

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the 6 months ended 30 June 2017
Audited
6 months ended	6 months ended	Year ended
30/06/17	30/06/16	31/12/16
£	£	£
Revenue	5,769,311	5,663,962	12,072,101
Cost of sales	(5,680,171)	(5,285,847)	(10,949,499)
Gross profit	89,140	378,115	1,122,602
Operating costs and expenses:
Administrative expenses (see note 6)	(206,961)	(264,472)	(452,847)
Amortisation and depreciation	(49,368)	(78,694)	(123,470)
Total operating costs and expenses	(256,329)	(343,166)	(576,317)
Operating (loss)/profit	(167,189)	34,949	546,285
Fair value gains and losses	12,719	14,352	58,196
Finance costs	(2,250)	(4,514)	(8,388)
Share of results of associate	11,913	33,202	55,906
(Loss)/profit before tax	(144,807)	77,989	651,999
Taxation	-	-	(7,195)
(Loss)/profit for the period	(144,807)	77,989	644,804
Total comprehensive income attributable to owners of the parent	(144,807)	77,989	644,804
(Loss)/ profit per share
Basic and diluted	(0.2p)	0.1p	0.8p

UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2017
Audited
30/06/17	30/06/16	31/12/16
£	£	£
Assets
Non-current assets
Intangible assets	104,573	129,856	119,221
Property, plant and equipment	123,584	165,752	140,603
Investments	88,813	88,813	88,813
Interest in associate	74,958	40,341	63,045
391,928	424,762	411,682
Current assets
Investments - financial assets	-	242,350	510,920
Trade and other receivables	2,825,531	1,785,150	2,343,977
Cash and cash equivalents	862,446	1,188,962	1,101,235
3,687,977	3,216,462	3,956,132
Total assets	4,079,905	3,641,224	4,367,814
Capital and reserves
Called up share capital	2,285,398	2,285,398	2,285,398
Share premium account	5,533,626	5,533,626	5,533,626
Merger reserve	1,300,395	1,300,395	1,300,395
Warrant reserve	13,702	13,702	13,702
Retained earnings	(6,921,658)	(7,343,666)	(6,776,851)
Total equity	2,211,463	1,789,455	2,356,270
Liabilities
Non-current liabilities	335,000	435,000	385,000
Current liabilities
Trade and other payables	1,533,442	1,416,769	1,626,544
Total liabilities	1,868,442	1,851,769	2,011,544
Total equity and liabilities	4,079,905	3,641,224	4,367,814