Final Results

2 June 2011

Cellcast plc.

("Cellcast" or the "Group")

Final results for year ended 31 December 2010

The Board of Cellcast (AIM: CLTV) is pleased to announce its audited financial results for the year ended 31 December 2010. A full copy of the annual report and accounts, along with a notice of the Group's annual general meeting, to be held at 150 Great Portland Street, London W1W 6QD on 28 June 2011 at 10.30 a.m, will shortly be posted to shareholders and will be available from the Group's website, www.cellcast.tv.

Highlights

·; Revenues continued to grow during the year, increasing by 14% to £19.2million

·; Gross profit of £1.4 million (2009 - loss of £0.3 million). 2009's gross loss reflected investment in new channels

·; Operating loss of £0.4 million (2009 - £2.2 million), second half of the year breakeven

·; Loss for the year after taxation and exchange differences on translating foreign operations of £0.2 million (2009 - £1.6 million loss)

·; Loss per share of 0.4p (2009 - loss per share of 2.1p)

·; In the UK the group maintained its position as a leading provider of interactive television programming

·; Cellcast Asia Holdings, the Company's 37.5% associate company, reported substantial revenue growth but saw declining margins and reduced earnings.

·; Continuing focus on efficiencies in the group's distribution operations.

Andrew Wilson, Chief executive Officer of Cellcast, commented:

"2010 saw an improvement in our performance following the significant investment we made in acquiring new channels in 2009. I am very pleased that we traded at break even in the second half of the year.

"At the end of March 2010 Cellcast had experienced 12 consecutive months of operating profit in the UK and our UK business is showing signs of stability. The Group will continue to focus on developing innovative products and services in its chosen markets. Since the start of the current year we have seen growth in revenues but are mindful of the economic challenges faced in the UK and the rest of the World. The board view the future with optimism.

"Sadly Julian Paul, our long serving Chairman, passed away in March of this year. We will miss his wise counsel and advice and offer our condolences to his family."

For further information:

Chief Executive's statement

2010 Results

The group performed well in 2010 in the face of challenging conditions. Operating revenues, which continued to be earned almost entirely from interactive broadcasting activities in the UK, grew to £19.2 million, an increase of 14% on 2009. Gross profits increased to £1.4 million, compared to a gross loss of £311,000 in 2009, reflecting the substantial investment in new distribution channels in 2009. The group posted an operating loss of £444,000 in 2010, a significant reduction on the prior year's operating loss of £2.2 million. The second half of 2010 showed an operating break-even compared to a first half operating loss of £443,000.

The group continues to focus closely on operating costs and expenses, and in 2010 reduced general and administrative costs by 16.4% to £1 million (2009 - £1.2 million). Around 25% of these were personnel costs, and the group has been operating with a minimum level of permanent staff (20 at 31 December 2010) from its single office in Great Portland Street. Amortisation and depreciation expenses of £801,000 - an increase of £96,000 on 2009 - predominantly reflect the amortisation of the group's capitalised internally generated development costs, which at 31 December 2010 had a net book value of £1.2 million (2009 - £1.9m), and accelerated amortisation in respect of Mailcast, £188,000.

After taking into account net interest costs and the share of profits in Cellcast Asia Holdings ("CAH") (see below), the total loss for 2010 was £244,000 (2009 - £1.6 million). 2010 loss per share was 0.4p (2009 - 2.1p).

Cellcast Asia Holdings

The group owned 37.5% of CAH at 31 December 2010, and its share of CAH's profits for 2010 was £282,000, a 37% decline on the prior year's £451,000. Given that there was no distribution by CAH during the year, the carrying value of the group's holding in CAH at 31 December 2010 was £1 million (2009 - £692,000).

Funding

The strong second-half performance in the UK and associated positive cash-flows enabled the group to repay the outstanding balance on the Headstart loan by the end of the year. The trade factoring facility was also repaid during the year and the group's £150,000 overdraft facility was undrawn at 31 December 2010.

Outlook

At the end of March 2011, the group had experienced 12 consecutive months of operating profit in the UK. The Board recognises the efforts of management and staff and looks forward to a continuation of this trend, with a return to full year profitability in 2011.

Sadly our well-loved Chairman, Julian Paul, passed away in March 2011, and the Board wishes to take this opportunity to offer our condolences to his family and express our deep thanks for his wisdom and dedicated support through the six years since Cellcast plc listed on AIM.

Andrew Wilson

Chief Executive Officer

2nd June 2011

Review of Operations

Group overview

The group's core business continues to be the production and distribution of participatory television formats across multiple digital platforms in the United Kingdom. Our principal focus is a commitment to sustainable profitability driven by a combination of proven and innovative content, aggressive cost management and expanded distribution.

UK Operations

The group maintained its position as a leading provider of interactive television programming in the United Kingdom, a market with the highest level of digital television penetration in Europe (88%) and a substantial multichannel environment.

Central to management's strategy in 2010 was a focus on increasing the efficiencies of our distribution and associated bandwidth costs, which make up the single largest part of our cost of sales. We were also able to achieve savings on staffing costs, efficiencies in production processes, and the deployment of new technologies across all channels.

The regulatory threats to the core business appear, at this time, to be manageable, which supports our view that the revenues are sustainable. Given that we have successfully secured distribution of our services across the key digital platforms in the UK, we see limited growth in TV-derived revenues in the domestic market and are now focusing on international markets and the opportunities to export our proven operating model. Growth in the UK will be driven by leveraging our TV presence to build revenues on the internet and via new mobile services.

International Operations

The group's 37.5% owned associate company in India, Cellcast Asia Holdings ("CAH"), recorded an impressive 83% growth in revenue but was unable to maintain the margin and profitability achieved in 2009/10. In 2010, CAH (which has a 31 March year end) grew revenue from US$8.4 million in the year 2009/10 to US$15.3 million in 2010/11. However profitability declined from US$2m in 2009/2010 to US$900,000 in 2010/2011. First quarter 2011 revenues were US$4.1m with a net profit of US$120,000.

The primary reason for this margin erosion and subsequent profit decline is that, as a consequence of India's continued economic growth, demand for media and specifically TV airtime is outstripping supply. Whilst CAH is a clear leader in the participation TV sector in India, both by traffic volume and revenue, and thus faces little competition in its sector, it has to compete for airtime with advertising-supported programming that may provide better yields for TV networks in the current advertising market.

For this reason the management of CAH has determined that to secure its future it needs to establish proprietary routes to market which in essence means to own and operate its own TV channels (much like Cellcast UK does). There is a significant cost to launching a national channel in India as achieving maximum coverage involves securing a position on several DTH platforms. CAH is now seeking funding to support this initiative.

CAH remains well positioned to maintain a leading role in the growing participation TV sector in India.

Cellcast Middle East ("CME"), in which Cellcast UK has an 18% minority stake, had a very difficult year resulting from political unrest in its home base in Lebanon and across the region. As a result, it sustained a loss of US$200,000 in 2010. Continuing regional instability makes it difficult to predict when the business will return to profitability.

Technology Division

During the year under review, our primary task was addressing the upgrade cycle of both the broadcast and IT infrastructure focussed on broadcast playout, on screen graphics systems and asset management.

After an initial test phase, we began the migration from the existing Playout system to a new Apple-based system. The new system will lead to an overall saving on running costs, while the merging of content scheduling and graphics systems, significantly reduces the hardware requirements. On the operational side, we are now embarked on the complete overhaul of the main operational and monitoring centre as well as the rewiring of the broadcast and communications servers and systems. The overhaul of these systems is necessary to reduce the risk of hardware failure. It is pleasing to report that over the last eight years, with the legacy of adding and enhancing systems, our operations platform has been reliable with no significant periods of downtime.

The group continues its investment in the main platforms used by the business. The Cellcast Interactive System was significantly adapted to work with the new Playout and graphics systems.

On the analytical system side, we successfully implemented the bulk of the Nucleus services, a bespoke customer relationship management and enterprise resource planning system designed to support the growth of individual business units and increase average revenue per user. The ability of this system to provide real time performance data has greatly enhanced the productivity of our producers who are now able to rapidly analyse response levels and increase the efficacy of the studio output. The bulk of these developments have been undertaken in-house.

In 2009 we completed an auxiliary product, Mailcast. Mailcast brings together elements of internet video, video customisation and telephony to provide an online viral interactive storyboarding system utilising an innovative e-card process. In 2010 we have been focusing on our key business and bringing Mailcast to market has taken longer than anticipated. Due to uncertainties over the timing of future revenues, we have accelerated the amortisation on the intangible assets associated with this project in 2010.

Outlook for 2011

The UK business is now showing signs of stability and enjoying the cost efficiencies derived from its strong sector presence across multiple distribution platforms.

The group will continue to focus on the development of innovative products and services to meet the challenges and growth opportunities presented by the expansion of digital television and the convergence of the web, TV and telephony. Having increased revenues and achieved profitability in the second half of 2010, the group has continued to grow revenue and profitability in the first half of 2011 despite the challenging economic environment. We do however expect some erosion of margins in the second half of 2011, a result of emerging competition and the increasing cost of bandwidth.

A successful management strategy and the hard work of our talented staff during the past year has enabled the group to retain its leading position in the UK interactive services industry, a standing we are determined to maintain through 2011.

Andrew Wilson

Chief Executive Officer

2nd June 2011

Consolidated statement of comprehensive income

Consolidated statement of financial position

Consolidated statement of changes in equity for the year ended 31 December 2010

Consolidated statement of changes in equity for the year ended 31 December 2009

Consolidated statement of cash flows

Basis of preparation

 The figures for the year ended 31 December 2010 have been extracted from the audited statutory accounts for that year, which have yet to be delivered to the Registrar of Companies. The financial information set out above has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and those parts of the Companies Act 2006 that remain applicable to companies reporting under IFRS and does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006, and does not contain all the information required to be disclosed in a full set of IFRS financial statements.

Statutory accounts for the year ended 31 December 2010 will be delivered to the Registrar of Companies and sent to Shareholders shortly.

The audit report on those financial statements is unqualified and does not contain any statement under Section 498(2) or (3) of the Companies Act 2006. The audit report contains an Emphasis of Matter paragraph as follows :

"In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosure made on page 21 of the financial statements concerning the group's ability to continue as a going concern. The company incurred a loss of £310,323 attributable to the owners of the parent during the year ended 31 December 2010 and, at that date, the group's current liabilities exceeded its current assets by £2,079,285. These conditions indicate the existence of a material uncertainty which may cast significant doubt about the group's ability to continue as a going concern. The financial statements do not include the adjustments that would result if the group was unable to continue as a going concern."

Statutory accounts for the year ended 31 December 2009 have been filed with the Registrar of Companies. The auditor's report on those accounts was unqualified, contained an Emphasis of Matter paragraph on going concern and did not contain a statement under section 498(2) and (3) of the Companies Act 2006.

Accounting policies

The consolidated financial statements have been prepared under the historical cost convention in accordance with applicable International Financial Reporting Standards as adopted by the European Union (IFRS). Cellcast plc is an England and Wales incorporated public limited company and is domiciled in the United Kingdom. Cellcast plc shares are publically traded on the AIM market of the London Stock Exchange under the ticker symbol CLTV.

Notes to the consolidated financial information

1. Loss before tax

2. Loss per share

The calculations of adjusted basic and diluted loss per ordinary share are based on the following results:

Due to the losses incurred in 2010 and 2009 there was no dilution effect from the issued share options and warrants.

The share split on the 30 July 2009 did not result in any change to the number or the rights of the ordinary shares in issue and therefore has been no impact on the loss per share.

The potential number of dilutive ordinary shares at the year end was 13,623,869 (2009: 14,023,869).

3. Interest payable and similar charges

4. Intangible assets

The accelerated amortisation relates to Mailcast. Mailcast brings together elements of internet video, video customisation and telephony to provide an online viral interactive storyboarding system utilising an innovative e-card process. In 2010 the group have been focusing on the core business and bringing Mailcast to market has taken longer than anticipated. Due to uncertainties over the timing of future revenues, the amortisation on the intangible assets associated with this project in 2010 has been accelerated.

5. Borrowings

On 19 November 2009 the company contracted a term loan amounting to £200,000, repayable in 3 instalments - £65,000 on 31 July 2010, £65,000 on 30 September 2010 and £70,000 on 16 November 2010. The facility carried an interest rate of 1.15% per calendar month (13.80% per annum) and was secured on a fixed and floating charge over certain assets of the group. In relation to this facility, the company granted to the holders of the term notes 5 year warrants over 3 million ordinary shares exercisable at a price of 2.75p. Under the terms and conditions of the share warrants issued, they did not become exercisable until 6 months after the date of grant. Nevertheless on 27 April 2010, the Company agreed to the exercise of 500,000 warrants. A further 1,000,000 warrants were exercised in July 2010. During the year the term loan was repaid in full in line with the terms of the facility.

On 5 November 2010, Andrew Wilson (a director) made a £150,000 loan to the company. An amount of £50,000 was repaid on 23 December, leaving an amount outstanding at 31 December 2010 of £100,000. Both loans carried an interest rate of 13% and were unsecured and repayable on demand. The interest rate is an average rate calculated on the company's previous arrangements with Headstart, Bibby Financial Services and HSBC.