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Cellcast News

Pre-Close Statement

20 February 2007

The Board of Cellcast plc (AIM:CLTV), the global interactive digital broadcaster, is pleased to provide a trading update prior to entering its close period ahead of the preliminary announcement of its results for the year ended 31 December 2006. The Company expects to make the preliminary announcement in the last week of April 2007.

For the year as a whole, and on the basis of the unaudited management accounts, the Directors expect that the consolidated loss at the EBITDA level will be around £2.9 million and that the consolidated loss before taxation will be in the region of £3.5 million.

Last November, the Directors announced that they did not expect the Company’s UK business to return to profitability during the second half of 2006, and that the full benefits of the actions taken to reduce the fixed costs of the UK operation would not be recognised until the first half of 2007. Considerable progress has now been made towards achieving profitability at the operating level, such that the Group broke even at the operating level in December 2006, based on unaudited management accounts.  During the final quarter of 2006 gross margins in the UK also recovered to levels near to those achieved at the beginning of the year prior to the impact of the SKY EPG restructuring.

Underlying this performance is the continued strong growth in turnover, similar in percentage terms to that reported in the interim results statement where revenue increased by more than half again. This reflects the continued expansion of the Company’s international operations which has further geographically diversified the Group’s revenues.  International operations as a percentage of total Group revenues increased from 4% in January 2006 to over 65% by December 2006. Margins in international operations also improved dramatically in the period from January to December 2006, which, even allowing for the cost of ongoing investment into key new markets, resulted in the Company achieving overall profitability for international operations in December 2006. Of particular note were Cellcast’s new operations in South America, which achieved net margins in excess of 20% in December 2006.

The Board believes the results of the strategic developments and cost reduction plans instigated during 2006 will continue to become apparent during the first half of 2007. The Company is confident it has successfully addressed the issues of its UK operations and turned these around whilst simultaneously pursuing the planned international distribution of its technology and associated applications. The Board considers that the continuing growth of these operations validates Cellcast’s syndication strategy and demonstrates the international demand for the Company’s products and services.

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Cellcast plc
Cellcast plc (AIM:CLTV) is a leading international provider of participation television applications and interactive mobile content in the fast-growing multi-platform digital entertainment sector. Headquartered in London, with associated operations in Paris, Beirut, Mumbai, Miami, Hong Kong and Sao Paolo, Cellcast’s applications and programming are distributed on the Sky Digital and Freeview platforms in the UK and broadcast partners include Canal+ in France; Future TV, Dubai Television and Rotana TV in the Middle East; Zee TV, STAR TV and Sahara TV in India; TVS-3 in China; TV3 in Malaysia; and Rede TV, TV Gazetta and TV Banderantes in Brazil.

Cellcast’s revenues streams are independent of both advertising and subscription fees. With a network of revenue sharing agreements with telecommunications carriers and aggregators across five continents, Cellcast receives a share of the call revenue every time a consumer uses a mobile or fixed-line phone to participate in its interactive entertainment, revenue which is retained or shared with its broadcast partners. Cellcast’s programme formats and proprietary Interactive Platform (CIP) also facilitate delivery of content to mobile phones, the internet and broadband-delivered IPTV. This enables viewers to continue participating in a programme away from the TV, generating 24/7 revenue opportunities.

Cellcast plc joined the AIM market of the London Stock Exchange on 21 September 2005.