(CLTV.L) Cellcast PLC Buy/Sell

Julian Paul, Chairman of Cellcast plc, commented:

"After a solid performance in the first six months of 2009, the Group enters the second half of the year much better positioned to negotiate the uncertain economy, and management remains focussed on returning the Group to profitability through expanded distribution and technological innovation."

For further information:

Cellcast plc
Andrew Wilson, CEO Tel: +44 (0) 20 7190 0300
andrew@cellcast.tv www.cellcast.tv

Allenby Capital Limited
Edward Hutton Tel: +44 (0) 20 7510 8600

CHAIRMAN'S STATEMENT

Revenue for the six months ended 30 June 2009 of £8.6 million was up 29% on the same period in the prior year and arose wholly in the UK from interactive television applications. The full impact of prior year cost cutting is seen in the general and administrative costs line, at £564,000 down 20% on 2008. Amortisation and depreciation costs of £367,000 were 76% up on 2008's £208,000, reflecting the increase in amortisation costs in respect of the SUMO.tv project, for which capitalisation of costs ceased from 30 June 2008. From 1 July 2008, the SUMO.tv costs are being amortised over five years

Because of the amortisation and depreciation charge, the Group continued to report an operating loss. For the six months to 30 June 2009, this was £298,000, down 49% on the loss of £580,000 the previous year. However, the Group was cash generative during the period, with EBITDA of £54,000 compared to a negative £550,000 in the same period in 2008 (leaving aside the one-off proceeds of sale of the Sky channels).

After a research and development tax credit of £144,000 (period to 30 June 2008 - nil), the after-tax loss for the period was £239,000, a loss per share of 0.3p. The equivalent figure for 2008, which reflected the one-off profit of £1.2 million from the sale of Sky channels to Discovery, was a profit of £342,000, with earning per share of 0.5p.

Cellcast Asia Holdings

As reported in the 2008 Annual Report, Cellcast Asia Holdings ("CAH"), the Group's 37.5% owned Asian affiliate made profits in March and April 2009, and this continued during May and June. The Group's share of losses in CAH totalled £47,500 in January and February 2009, but subsequent profits resulted in a share of losses in CAH in the six months to 30 June 2009 of £15,000 compared to £179,000 in the same period in 2008. CAH has continued to be profitable in July and August, and the directors are optimistic that this trend will continue. The carrying value of the Group's interest in CAH at 30 June 2009 was £240,000, which the directors believe to be a fair value. CAH has now achieved six months of sustained profitability and has seen significant revenue growth quarter by quarter. It is now the recognised market leader in the Indian participation TV sector, broadcasting a diverse range of formats on ten different channels.

Funding

As indicated above, the Group was cash generative in the six months to 30 June 2009. In the first half of 2009, the Group repaid £180,000 of the Headstart loan facility, and thus at 30 June 2009, the Group had outstanding borrowings under this facility of £67,000 compared to £438,000 at 30 June 2008 and £247,000 at 31 December 2008. The Group continues to have a combination of bank overdraft and debt factoring facilities of £600,000, which the directors believe are sufficient for the foreseeable future and which support the going-concern assumption behind the 2009 interim financial statements.

Change in capital structure

At the Group's annual general meeting held in July 2009, shareholders approved a restructuring of the Company's share capital. For some time now, the ordinary shares have been trading at levels significantly below the nominal 3p value, and this has inhibited both new capital raising and the implementation of staff incentive schemes through the grant of share options. At the AGM, it was resolved that the nominal value of the Ordinary Shares be reduced from 3p to 1p, with the creation of a new class of deferred shares of 2p. The total number of issued ordinary shares has not changed as a result of the sub-division.

Outlook

The economic downturn continues to present major challenges to the media and entertainment industry, but nevertheless the Group expects in 2009 to show year-on-year revenue growth compared to 2008. The Group's CAH subsidiary should contribute positively to the year end results. The Ofcom review of the participation TV sector continues, and is not now expected to be concluded until some time in 2010.

A focus on investment in expanding distribution of the Group's television channels remains a core element of management's strategy to return the Group to profitability. In the second half of the year new channels will be added on the rapidly growing Freesat platform which has nearly doubled its subscriber base in the last 12 months. The Group also continues to focus on technology innovation, and in the coming months will launch new smartphone applications designed to drive increased viewer participation with our television content.

Julian Paul

Chairman

28 September 2009

6 months ended 6 months ended Year ended

£ £ £

Revenue 8,629,008 6,704,265 15,994,412
Cost of sales (7,976,933) (6,320,339) (14,619,887)
Gross profit 652,075 383,926 1,374,525

Operating costs and expenses:
General and administrative (564,062) (703,084) (1,369,172)
Share option expense (18,973) (52,465) (56,619)
Amortisation and (367,396) (207,979) (516,587)

depreciation
Total operating costs and (950,431) (963,528) (1,942,378)

expenses
Operating loss (298,356) (579,603) (567,853)

Profit on disposal of channels - 1,195,064 1,207,275
Interest receivable & similar 17 2,339 2,914

income
Interest payable & similar (69,629) (96,743) (120,023)

charges
Share of loss in associates (15,157) (178,820) (342,498)
(Loss) / profit before tax (383,125) 342,238 179,815

R & D tax credit 144,413 - 153,313
Total taxation 144,413 - 153,313

(Loss) / profit for the period (238,712) 342,238 333,128

attributable to equity holders of the parent (Loss) / earnings per share
Basic and diluted (0.3)p 0.5p 0.4p

6 months ended 6 months ended Year ended

£ £ £
(Loss) / profit for the period (238,712) 342,238 333,128

from continuing operations Other comprehensive income:
Exchange (gain) / loss on (28,566) 1,839 41,234

translation of foreign operations

Total comprehensive (loss) / (267,278) 244,077 374,362

income

£ £ £

Assets Non-current assets
Intangible assets 2,323,357 2,665,417 2,460,596
Property, plant and equipment 242,685 351,234 327,068
Investments in associates 211,072 382,397 254,795
2,777,114 3,399,048 3,042,459

Current assets
Trade and other receivables 2,680,489 2,201,380 2,999,339
Cash and cash equivalents 7,189 321,793 -
2,687,678 2,523,173 2,999,339
Total assets 5,464,792 5,922,221 6,041,798

Capital and reserves
Called up share capital 2,265,398 2,265,398 2,265,398
Share premium account 5,498,626 5,498,626 5,498,626
Merger reserve 1,300,395 1,300,395 1,300,395
Cumulative translation reserve 7,509 (3,320) 36,075
Retained earnings (7,027,925) (6,803,230) (6,808,186)
Equity attributable to equity 2,044,003 2,257,869 2,292,308

holders of the parent Liabilities Current liabilities
Trade and other payables 3,353,492 3,226,417 3,502,193
Borrowings 67,297 437,935 247,297
Total liabilities 3,420,789 3,664,352 3,749,490
Total equity and liabilities 5,464,792 5,922,221 6,041,798

As at 30 June 2009 Share Share Merger Cumulative Retained Shareholders
Capital Premium Reserve Translation Earnings Funds
Reserves
£ £ £ £ £ £
Balance at 1 January 2009 2,265,398 5,498,626 1,300,395 36,075 (6,808,186) 2,292,308
Loss for the period (238,712) (238,712)
Exchange translation (28,566) (28,566)
Total recognised income and (28,566) (238,712) (267,278)

expenditure
Share based payment charge 18,973 18,973
Balance at 30 June 2009 2,265,398 5,498,626 1,300,395 7,509 (7,027,925) 2,044,003

The above equity and reserves are attributable to the equity holders of the parent company

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

As at 31 December 2008 Share Share Merger Cumulative Retained Shareholders
Capital Premium Reserve Translation Earnings Funds
Reserves
£ £ £ £ £ £
Balance at 1 January 2008 2,265,398 5,498,626 1,300,395 (5,159) (7,197,933) 1,861,327
Profit for the year 333,128 333,128
Exchange translation 41,234 41,234
Total recognised income and - - - 41,234 33,128 374,362

expenditure
Share based payment charge 56,619 56,619
Balance at 31 December 2008 2,265,398 5,498,626 1,300,395 36,075 (6,808,186) 2,292,308

The above amounts are attributable to the equity holders of the parent company

As at 30 June 2008 Share Share Merger Cumulative Retained Shareholders
Capital Premium Reserve Translation Earnings Funds
Reserves
£ £ £ £ £ £
Balance at 1 January 2008 2,265,398 5,498,626 1,300,395 (5,159) (7,197,933) 1,861,327
Profit for the period 342,238 342,238
Exchange translation 1,839 1,839
Total recognised income and - - - 1,839 342,238 344,077

expenditure
Share based payment charge 52,465 52,465
Balance at 30 June 2008 2,265,398 5,498,626 1,300,395 (3,320) (6,803,230) 2,257,869

The above amounts are attributable to the equity holders of the parent company

6 months ended 6 months ended Year ended

£ £ £
Net cash inflow / (outflow) a 326,884 988,832 (424,740)

from operations

Income taxes 144,413 - 153,313
Interest received 17 2,339 2,914
Net cash inflow / (outflow) 471,314 991,171 (268,513)

from operating activities

Net cash (outflow) / inflow b (145,774) (500,929) 601,942

from investing activities

Net cash used in financing c (249,629) (177,821) (450,918)

activities

Net increase / (decrease) in 75,911 312,421 (117,489)

cash and cash equivalents

Cash and cash equivalents at (68,722) 7,533 7,533

beginning of period

Exchange gains - 1,839 41,234
Cash and cash equivalents at 7,189 321,793 (68,722)

end of period

6 months ended 6 months ended Year ended
a Reconciliation of net 30/06/09 30/06/08 31/12/08
(loss) / profit to net
cash inflow /
(outflow) from
operating activities
£ £ £
(Loss) / profit before (383,125) 342,238 179,815
tax
Interest receivable & (17) (2,339) (2,914)
similar income
Interest payable & 69,629 96,743 120,023
similar charges
Share of operating 15,157 178,820 342,498
loss in associates
Amortisation and 367,396 207,979 516,587
depreciation
Share option expense 18,973 52,465 56,619
Loss on disposal of - - 24,784
property, plant and
equipment
Gain on disposal of - - (1,207,275)
intangible assets -
proceeds from disposal
of channels
Finance costs - 42,977
Decrease/(increase) in 318,850 68,647 (765,388)
trade and other
receivables
(Decrease)/increase in (79,979) 44,279 267,534
trade and other
payables
Net cash inflow / 326,884 988,832 (424,740)
(outflow) from
operations
b Cash flow from
investing activities
Proceeds on disposal - - 1,400,000
of intangible assets
Purchase of property, - (48,117) (44,076)
plant and equipment
Purchase of intangible (145,774) (452,812) (735,982)
assets
Net cash (145,774) (500,929) 601,942
(outflow)/inflow from
investing activities
c Cash flow from
financing activities
Capital element of - (36,904) (54,395)
finance leases
Interest paid (69,629) (96,743) (120,023)
Repayment of loan (180,000) (44,174) (276,500)
Net cash used in (249,629) (177,821) (450,918)
financing activities

NOTES TO THE UNAUDITED INTERIM ACCOUNTS STATEMENT

1. General Information

Cellcast plc is a limited liability company incorporated and domiciled in the United Kingdom. Its business address is 150 Great Portland Street, London, W1W 6QD. The address of its registered office is The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU. Copies of this statement are available from this address and from the company's website www.cellcast.tv.

The company is quoted on the AIM Market of the London Stock Exchange.

This condensed consolidated interim financial information was approved for issue on 28 September 2009.

2. Basis of preparation

The condensed consolidated interim financial information for the six months ended 30 June 2009 should be read in conjunction with the annual financial statements for the year ended 31 December 2008, which have been prepared in accordance with IFRS.

The current and comparative periods to June have been prepared using accounting policies and practices consistent with those adopted in the annual financial statements for the year ended 31 December 2008 and are also consistent with those which will be adopted in the 2009 financial statements. Comparative figures for the year ended 31 December 2008 have been extracted from the statutory financial statements for that period which carried an unqualified audit report, did not contain a statement under section 237(2) or (3) of the Companies Act 1985 and have been delivered to the Registrar of Companies.

The financial information contained in this Report does not constitute statutory accounts as defined by Section 434 of the Companies Act 2006.

3. (Loss)/Earnings per share

Basic and diluted (loss) / earnings per share is based on the (loss) / profit after tax and on the following weighted average number of shares in issue.

£ £ £
Reported (loss) / profit for the (238,712) 342,238 333,128

financial period

Weighted average number of ordinary 75,513,224 75,513,224 75,513,224

shares

Weighted average number of ordinary 75,513,224 75,513,224 75,513,224

shares including dilutive effect of outstanding share options and warrants

Basic (loss) / earnings per share (0.3p) 0.5p 0.4p
Diluted (loss) / earnings per share (0.3p) 0.5p 0.4p

NOTES TO THE UNAUDITED INTERIM ACCOUNTS STATEMENT

4. Segmental Reporting

The group operates a single business, that of television and broadcasting. Following the reorganisation of the group during 2007 and 2008, its business now only operates within one geographical segment, that of the UK.

5. Post Balance Sheet Event

At the Annual General Meeting on 30 July 2009, it was resolved that each existing issued ordinary share of 3p be sub-divided into one new ordinary share of 1p and one new deferred share of 2p and that each authorised but unissued ordinary share of 3p be subdivided into 3 new ordinary shares of 1p each.

This information is provided by RNS The company news service from the London Stock Exchange

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