(SEV.L) Servision PLC Buy/Sell

Commenting on the results Gidon Tahan, Chairman and Chief Executive Officer, said: "I am pleased with our performance given the current global economic climate. There has been a tangible rebound in the mobile surveillance market over the last couple of months and I am confident that our results for the second half of the year will reflect this shift. I am grateful to the employees of SerVision for their hard work and commitment."

Chairman's Statement

I am pleased to announce SerVision's consolidated group financial statements for the six months ending 30 June 2009. Losses before taxes for this period were reduced by 72% when compared with the same period from last year ($316,000 for this period compared with $1,113,000 for the six month period through 30 June 2008). Revenues during this period, however, were below expectations partly due to the ongoing global financial crisis and also because a number of anticipated orders were put on hold until the second half of the year. Having said that, I am confident that our performance will improve in the second half of 2009. Indeed, since June 2009 we have signed a new distribution agreement with a Singaporean-based company, and we have secured a large police project in Bogota, Colombia. I remain optimistic about our current pipeline and we are hopeful that revenues will improve in the second half of the year.

Sales and Marketing

During the period we have widened our distribution network and territorial reach considerably, particularly in the Far East. Earlier this year, we announced major distribution contracts in China and India, and more recently in Singapore, Indonesia, Malaysia and Thailand. We also recently announced that SerVision was awarded a tender by the Colombian police force in Bogota which we expect to sign in the very near future. Since being awarded the tender, I have been informed by our local partner in Bogota that the police are now contemplating increasing the quantity of required MVG 400s from 465 to 665 systems.

Research and development

The Company's research and development team is hard at work on a mobile, light-weight two-channel video transmitter called the CVG-M. This unit is ideal for body-worn applications. Markets all over the world, particularly among police forces and militaries that are already familiar with the MVG 400 for vehicle applications, have responded very favourably to prototypes of this system. Taxi companies have also expressed significant interest in this unit due to its low cost, cellular video transmission capabilities, and its ability to locally capture and store high quality video on the system's flash drive. If internal timetables are met, this new technology is expected to be fully commercialized in the fourth quarter of the current financial year.

In addition, the Company has recently added new functionality to the MVG 400/800 mobile video gateways. In addition to providing live video, GPS and bidirectional audio to meet the transportation market's security needs, these units are now able to broadcast advertising content supplied by local merchants and businesses. MVGs installed on buses, trains, and other forms of public transportation, are now able to generate income from local advertisers. This functionality is in high demand among our partners as it will help them demonstrate that our solution provides ultimate security, and it will pay for itself over a matter of months.

Financials

Conclusion

SerVision remains competitive and is pursuing larger contracts and agreements than in previous years. It maintains a healthy indicative order book for the second half of 2009. I sense that in the last couple of months, confidence is returning to our market and we remain well-positioned to capitalise on new opportunities in the mobile surveillance market.

Again, I am pleased that SerVision's commercial prospects appear to be healthy and strong for the remainder of this year and we continue to be optimistic about the future. I am grateful to our shareholders for their continued support, as well as to our dedicated staff for their invaluable contribution to the success of the company.

Gidon Tahan

Chairman and Chief Executive Officer

30 September 2009

For further information please contact:

SerVision plc +972 2535 0015

Eitan Yanuv, Finance Director

Allenby Capital Limited +44 (0)207 510 8600

Nick Athanas/James Reeve

A copy of the interim report will be available on the Company's website- www.servision.net- in accordance with the AIM Rules for Companies.

SERVISION PLC

CONDENSED GROUP INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2009

Six months to Six months to Year to 31
30 June 2009 30 June 2008 December 2008
Note $'000 $'000 $'000
Unaudited Unaudited Audited

TURNOVER 3 2,113 2,383 4,732

Cost of sales (1,099) (1,159) (2,505)

GROSS PROFIT 1,014 1,224 2,227

Administrative expenses (1,307) (2,181) (3,084)

Net finance expense (23) (156) (207)

ACTIVITIES BEFORE TAXATION (316) (1,113) (1,064)

Tax on loss on ordinary activities 4 - - -

RETAINED LOSS (316) (1,113) (1,064)
====== ====== ======

Loss per share
Basic and diluted 5 (1.06c) (4.49c) (4.12c)
====== ====== ======

SERVISION PLC

CONDENSED GROUP BALANCE SHEET

AT 30 JUNE 2009

As at 30 June As at 30 June As at 31
2009 2008 December 2008
$'000 $'000 $'000
Unaudited Unaudited Audited

Non-current assets
Intangible assets 3,584 3,464 3,860
Property, plant and equipment 58 80 66

3,642 3,544 3,926

Current assets
Inventories 417 629 563
Trade and other receivables 1,335 963 1,455
Cash and cash equivalents 125 36 136

1,877 1,628 2,154

Total assets 5,519 5,172 6,080
====== ====== ======

Capital and reserves attributable to the Company's equity shareholders
Called up share capital 556 467 556
Share premium account 9,776 8,075 9,776
Merger reserve 1,979 1,979 1,979
Retained earnings and (10,376) (9,744) (10,060)

translation reserves

Total equity 1,935 777 2,251

Current liabilities
Short term credit from banking 658 511 558

institutions
Loan from the office of the 109 126 109

chief scientist
Trade and other payables 1,431 2,285 1,658

2,198 2,922 2,325

Non-current liabilities
Long term loan from bank 360 283 428

institution
Loan from Office of the Chief 798 836 882

Scientist
Post employment benefits 228 354 194

1,386 1,473 1,504

Total liabilities 3,584 4,395 3,829

Total equity and liabilities 5,519 5,172 6,080
======= ======= ======

CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2009

Share Share Merger Retained Translation
Capital Premium Reserve earnings reserve Total
$'000 $'000 $'000 $'000 $'000 $'000

As at 1 January 2008 467 8,075 1,979 (9,153) 587 1,955
Total recognised - - - (1,113) (65) (1,178)

income and expense

As at 30 June 2008 467 8,075 1,979 (10,266) 522 777
====== ====== ======== ========= ========= =========

As at 31 December 556 9,776 1,979 (10,217) 157 2,251

Total recognised - - - (316) - (316)

income and expense

At 30 June 2009 556 9,776 1,979 (10,533) 157 1,935
====== ====== ======== ========= ========= =========

SERVISION PLC

CONDENSED GROUP CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2009

Six months to Six months to Year to 31
30 June 2009 30 June 2008 December 2008
$'000 $'000 $'000
Unaudited Unaudited Audited

Cash flows from operating activities
Loss before taxation (316) (1,113) (1,064)

Adjustments for:
Net finance expense 30 156 207
Net interest paid (30) (156) (207)
Depreciation and amortisation 733 891 1,140
Loss on disposal of fixed - - 9

assets
Movement in trade and other 341 47 (305)

receivables
Movement in inventories 146 (72) (6)
Movement in grant from chief - 30 22

scientist
Movement in post retirement 34 98 (62)

benefits
Movement in trade and other (227) 1,281 567

payables

Net cash inflow/(outflow) from 711 1,162 (301)
operating activities

Cash flow from investing activities
Purchase of property, plant (449) (883) (1,523)

and equipment and intangibles

Net cash outflow from (449) (883) (1,523)

investing activities

Cash flows from financing
activities
Issue of shares in Servision -- - 1,650

Plc
Net loans (repaid)/received (196) (565) 127
Loan from chief scientist (84) (37) -

repaid

Cash (outflow)/inflow from (280) (602) 1,777

financing activities

Cash and cash equivalents at 38 (87) (87)

beginning of period
Net cash outflow from all (18) (323) 555

activities
Non-cash movement arising on (221) (65) 430

foreign currency translation

Cash and cash equivalents at (201) (475) 38

end of period
======= ======= ======

Cash and cash equivalents comprise
Cash (excluding overdrafts) 125 36 136

and cash equivalents
Overdrafts (326) (511) (98)

======= ======= ======

SERVISION PLC

NOTES TO THE REPORT AND CONDENSED GROUP FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2009

1. BASIS OF PREPARATION

The condensed group financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS) as endorsed for use by Companies listed on an EU regulated market and in accordance with IAS34 - "Interim Financial Reporting". The same accounting policies, presentation and methods of computation have been followed in the preparation of these results as were applied in the Group's latest annual audited financial statements. It is not expected that there will be any changes or additions to these in the 2009 annual financial statements. This statement does not comprise statutory accounts as defined in Section 434 of the Companies Act 2006 and the results for the six months ended 30 June 2009 and for the six months ended 30 June 2008 are unaudited. The financial information for the year ended 31 December 2008 is an extract from the latest group accounts. Statutory financial statements for the year ended 31 December 2008, prepared in accordance with IFRS, on which the auditors gave an unqualified opinion, but did include references to matters to which the auditors drew attention by way of emphasis without qualifying their reports. The condensed group financial statements are presented in US Dollars and all values are rounded to the nearest thousand dollars ($'000) except when otherwise indicated.
2. RAISING OF CAPITAL

During August 2009, the Company issued 3,333,333 new ordinary shares at a price of 9 pence per share raising £300,000. The net proceeds will be used for additional working capital for the subsidiary.
3. BUSINESS SEGMENT ANALYSIS

Class of business

The turnover, loss on ordinary activities before taxation and net assets of the Group are attributable to one class of business, that of developing and selling video surveillance equipment.

Geographical areas
Turnover by location of customer
Six months to Six months to Year to 31
30 June 2009 30 June 2008 December 2008
$'000 $'000 $'000
Unaudited Unaudited Audited
UK and Continental 712 1,326 2,044
Europe
North America 274 462 833
Latin America 109 310 940
Asia and Middle East 970 210 744
Africa 48 75 171

2,113 2,383 4,732
======= ======= ========

4. TAXATION

The Company is controlled and managed by its Board in Israel. Accordingly, the interaction of UK domestic tax rules and the taxation agreement entered into between the U.K. and Israel operate so as to treat the Company as solely resident for tax purposes in Israel. The Company undertakes no business activity in the UK such as might result in a Permanent Establishment for tax purposes and accordingly has no liability to UK corporation tax.
5. LOSS PER SHARE

The loss per share of 1.06c (31 December 2008: 4.12c; 30 June 2008: 4.49c) has been calculated on the weighted average number of share in issue during the year namely 29,881,490 (31 December 2008: 25,825,242; 30 June 2008: 24,773,637) and losses of US$ 316,861 (31 December 2008: US$1,063,900; 30 June 2008: US$1,112,336). Due to the immaterial number of options in issue there is no material difference between the diluted and basic loss per share.

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For more information see www.servision.net or contact:

SerVision plc +972 2535 0015

Eitan Yanuv, Finance Director

Allenby Capital Limited +44 (0)207 510 8600

Nick Athanas/James Reeve

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

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