Final Results

16 December 2010

cScape Group plc

Preliminary results for the year ended 30 June 2010

cScape Group plc ('the Company' or 'the Group'), the digital communications business, today announces its preliminary audited results for the year ended 30 June 2010.

Enquiries, please contact:

Azhic Basirov / Siobhan Sergeant

Smith & Williamson Corporate Finance Limited

Tel: 020 7131 4000

CHAIRMAN'S STATEMENT

I have pleasure in announcing the results of the Group for the year ended 30 June 2010.

Financials

During the year, the Group disposed the publishing and digital communication services segment, which will now allow the Group to concentrate on its core activities.

The Group's key financial performance indicator is turnover from continuing operations. Whilst turnover and gross profit fell slightly from the previous year, the operating profit before depreciation has increased due to significant reductions in the Group's administration expenses and the Group will continue to seek further cost savings in the future.

The operating loss on continued operations has increased from the previous year due to a significant one off exceptional cost incurred by the Group's internet services segment, of £70,000.

The Company announced on 1 December 2010 that it is seeking to restructure the Company's share capital which will allow the Company to raise additional finance in order to meet the Group's working capital requirements. This restructure will be put to the shareholders at a general meeting for their approval on 23 December 2010.

Business Review

cScape Strategic Internet Services Limited continued to develop its core SharePoint business within both existing clients and new corporate clients. cScape Strategic Internet Services Limited also acquired skills in SDL Tridion, a highly rated content management system.

While the recession continued to dampen demand, cScape Strategic Internet Services Limited did see activity begin to pick up towards the end of the year, both in existing clients and in new client acquisition, a process which has continued into the current period.

Profitability was affected adversely by the management strategy of holding on to key skills through periods when demand was relatively slack. This strategy has paid off in the current period as demand has picked up and cScape Strategic Internet Services Limited has been able to respond quickly. The Company also experienced losses due to a project which overran.

Blue Sky Hosting Limited was able to increase its profits over the previous year through focusing very hard on maintaining its existing clients as well as acquiring new ones. A key aspect of the company period is the spread of "Cloud Hosting", which involves both Blue Sky Hosting Limited and cScape Strategic Internet Services Limited working on the business case, jointly.

Financing Arrangements

The Group has continued to finance itself out of cash flow, with the aid of a £50,000 overdraft from the bank. We expect and plan to bring extra finance into the Company from investors in the year to 30 June 2011.

The outlook is for cash generation over the year to 30 June 2011.

Outlook

The Group has traded profitably since the year end and notes continued improvement from its core clients and new clients. The Group continues to reduce its liabilities and is actively seeking increased profitability.

K Young

Chairman

15 December 2010

CONSOLIDATED INCOME STATEMENT

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CASH FLOWS

Notes:

1 FINANCIAL INFORMATION

The Group financial statements have been prepared and approved by the directors on the going concern basis and in accordance with applicable accounting standards.

The consolidated financial statements have been prepared under International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board (IASB), as adopted by the European Union and with those parts of the Companies Act 2006 applicable to the companies preparing their accounts under IFRS.

2 SEGMENTAL INFORMATION

For management purposes the Group is currently organised into 4 operating divisions - internet services, specialist hosting, media and interactive technology and head office and all of the Group's operations are carried out within the United Kingdom.

a. Continuing operations

b. Discontinued operations

The publishing and digital communication services segment is shown under discontinued operations below as the Group disposed its holding in the relevant subsidiaries during the year.

c. Net assets/(liabilities) analysis

3 EARNINGS PER SHARE

Earnings per share statistics disclosed are calculated by dividing the earnings attributable to ordinary holders by the weighed average number of shares in issue during the year.

4 INTANGIBLE ASSETS - GOODWILL

The directors calculated the impairment of £nil in 2010 and 2009 between the carrying value and the net present value of cash flows anticipated to be generated from each of the Group's cash generating units, being each of its subsidiaries, on a value in use basis.

Information relating to the impairment review in 2010:

Growth rates anticipated in the next twelve months for the internet services segment are based on recent business levels and reflect an appropriate level of new contracts, combined with cost control. Thereafter a steady growth rate on profit of 4% is estimated. For the specialist hosting segment the turnover has increased over the last two years and a steady growth rate of 4% is anticipated on turnover combined with cost control, which leads to a 4% profit growth rate.

The management have projected the cash flows forming the basis of the projected turnover and profitability for a four year periods of these two segments and these cash flows have been approved by the Group board of directors.

A discount of 5% has been applied to internet services segment, representing the relatively stable nature of the business model, its past performance and anticipated wins and its weighted average cost of capital. A discount rate of 5% has been applied to the specialist hosting segment, again representing the stable nature of the business and it weighted average cost of capital.

The net present value of the value in use cash flows that are forecast to be generated for the internet services segment and the specialist hosting segment exceed the carrying value of goodwill, by £629,000 and £176,000 respectively.

The discount factors are based on a risk weighted cost of capital, considering each segment's risks. Factors that have been considered in calculating the risk include trading record, experience of management, customer profiles, and credit risk, such as debtor payment terms and how they are complied with.

If the discount rates were increased to 10% for both segments, it is estimated that the recoverable amount of goodwill would still exceed carrying value by £498,000 for the internet services segment and £88,000 for the specialist hosting segment.

There were no reasonable possible changes in the key assumptions which would cause the carrying amount of goodwill to exceed its recoverable amount.

5 ANALYSIS OF CHANGES IN NET CASH/(DEBT)

6 RECONCILIATION OF NET CASH FLOW MOVEMENTS TO MOVEMENT IN NET CASH/(DEBT)

7 COPIES OF PRELIMINARY STATEMENT

Copies of this announcement are available on the Company's website www.cscapegroup.com or from the company secretary at 4 Pear Tree Court, Clerkenwell, London, EC1R 0DS. Copies of the Annual Report and Accounts of the Company for the year ended 30 June 2010 will be sent to shareholders in due course.