Half Yearly Report

CHIME COMMUNICATIONS PLC

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30TH JUNE 2011

Chime Communications PLC, the leading marketing services group, today announces its unaudited interim results for the six months ended 30th June 2011.

SUMMARY OF RESULTS - twelfth successive results showing growth

FINANCIAL HIGHLIGHTS

·; Reported operating income up 10%

·; Operating profit3up 13%

·; Operating profit margin3up to 18.5%

·; Profit before tax3 up 15% to £14.2 million (2010: £12.3 million)

·; Reported profit before tax up 23% to £12.7 million (2010: £10.3 million)

·; Earnings per share from continuing operations1 and 3 up 9% to 13.07p (2010: 12.02p)

·; Net cash as at 30th June 2011 of £6.9 million (30th June 2010: £5.5 million and 31st December 2010: £6.9 million)

·; Interim dividend of 2.08p per share (2010: 1.84p), an increase of 13%

OPERATIONAL AND CORPORATE HIGHLIGHTS

·; Strong growth in Advertising and Marketing Services and Sports Marketing, which has continued into the third quarter

·; Acquisitions of ICON and Golden Goal completed in Sports Marketing Division and already showing very good returns

·; Acquisition of Reynolds Mackenzie4 (public relations) and LEC (marketing communications) into OPEN Health (our new healthcare business) which is expected to make a profit contribution in 2011.

·; International income continues to grow

Note: 1. Reported earnings per share was 11.04p (2010: 9.52p)

2. Organic growth is calculated excluding all acquisitions in 2010 and 2011.

3. Before taking account of amortisation of acquired intangible assets and impairment of goodwill (£0.9 million, 2010: £0.7 million) and costs relating to acquisitions and restructuring (£0.6 million, 2010: £1.3 million). In the Income Statement this is referred to as Headline Operating Profit.

4. Acquired on 12th July 2011.

Lord Bell, Chairman of Chime Communications, commented:

"These are impressive results achieved in an uncertain global economic and political environment which impacted some parts of our Group. Both the diversity and the overall strength of our Group enabled us to achieve growth for the twelfth successive set of results.

We continue to invest in those areas where we see opportunity and all our divisions have the fundamentals in place to perform well going forward. The global market and global economy are becoming increasingly volatile and we are not immune to this continuing lack of political, social and economic stability, particularly in our public relations business. However, our advertising business is gaining market share and our sports marketing business is well placed to become the global leader at a time when sports revenues are increasing."

For further information please contact:

Lord Bell, Chairman 020 7861 8515

Chime Communications

Christopher Satterthwaite, Chief Executive 020 7861 8515

Chime Communications

James Henderson/ Victoria Geoghegan/Emma Kent 020 7861 3925

Pelham Bell Pottinger

REVIEW OF OPERATIONS

This is the twelfth consecutive set of results to show growth in both operating income and operating profits.

The economic environment remains challenging, but we have continued to perform well. Our diversified strategy has meant we have been able to capitalise in areas of the market place which are experiencing strong organic growth. Sports marketing, which we see as one of these strong areas going forward, now represents 24% of Group operating income. International income remains at 50% of Group operating income and our margin has continued to increase, rising to 18.5%.

Our Public Relations division had flat operating profits in the first half year with income affected by the slow down in geopolitical work as a result of the turmoil in the Middle East, a reduction in government communication work and the impact of severe debt problems in many countries. It has comfortably retained its position as the No 1 public relations agency in the UK and we continue to invest in this division to ensure a platform for growth in coming years. The VCCP Group had a particularly strong first half, following a period of investment last year, with significant wins in the brand and digital space. Our Sports Marketing Division continues to grow well and is No 1 in the UK Sponsorship League table. Our Research Division, which is a small part of the Group, has remained profitable and we are expecting it to return to growth in the second half of the year and beyond.

The Group acted for 1,347 clients in the first half of 2011 compared to 1,353 in the first half of 2010. 217 of these clients used more than one of our businesses (198 in the first half of 2010), which represented 65% of first half operating income (2010 first half: 60%).

233 clients paid us more than £50,000 in the first half of 2011 (2010 first half: 212). Our top 30 clients represented 48% of operating income in the first half year compared to 48% in the first half of 2010.

Our two largest clients represented 20.4% of our operating income (2010 first half: 20.9% in total). Both clients have been retained since 2003 and are high margin.

Average income per client in the first half of 2011 was £58,000, compared to £53,000 in the first half of 2010. Average income for employee was £56,000, compared to £59,000 in the first half of 2010.

Income from overseas work in the first half of 2011 was 50% of total operating income compared to 46% in the first half of 2010 and 51% for the full year of 2010.

DIVISIONAL PERFORMANCE

Public Relations continues to be our largest division being 42% of operating income (2010: 48%), Advertising and Marketing Services was 29% (2010: 26%), Sports Marketing was 24% (2010: 21%) and Research 5% (2010: 5%).

Public Relations - Bell Pottinger Group including Good Relations, Corporate Citizenship, Harvard and Insight

Strong profit performance in financial public relations, corporate and consumer public relations and Middle East public relations compensated for a reduction in our main US government contract.

New business wins have included TalkTalk, Iglo Group, Blackberry, Subway, Bathstore, Weetabix, Lovefilm, Lotus Cars and G4S.

Note: 3. Before taking account of amortisation of acquired intangible assets and goodwill impairment (£nil, 2010: £0.1 million) and costs relating to acquisitions and restructuring (£nil million, 2010: £0.2 million). In the Income Statement this is referred to as Headline Operating Profit.

Advertising and Marketing Services - VCCP Group, Teamspirit and OPEN Health

Strong growth in VCCP, VCCP Germany, direct marketing, digital, search, branding and financial services have resulted in this division showing the strongest organic growth in the Group in the first half of 2011.

New business wins include easyJet, Carling, Dairy Crest, Barclays, Eurostar, Burton's Foods, Diageo, Sky Germany, Ancestry.co.uk, L'Oréal, Merck Serono, Roche and Axa Wealth.

Note: 3. Before taking account of costs relating to acquisitions and restructuring (£0.1 million, 2010: £nil). In the Income Statement this is referred to as Headline Operating Profit.

Sports Marketing - Fast Track, Essentially, ICON and Golden Goal.

The Essentially businesses acquired in 2009 have performed particularly well now they have been fully integrated into the CSM Group. Both ICON and Golden Goal, acquired in the first half of 2011, have made good initial contributions.

New business wins include Oscar Pistorius, National Ice Skating Association, Sunderland FC, National Lottery Promotions Unit, Beefeater Gin, International Rugby Board, America's Cup, Barclays Scottish Open Golf Championship and Dubai Airports.

Note: 3. Before taking account of amortisation of acquired intangible assets (£0.8 million, 2010: £0.6 million) and costs relating to acquisitions and restructuring (£0.5 million, 2010: £0.3 million). In the Income Statement this is referred to as Headline Operating Profit.

Research

The research market place continues to be difficult with our quantitative business maintaining its good performance, but our qualitative business unlikely to return to profit until the fourth quarter. Tree, our data analytics business, had good growth in the first half of 2011.

New business wins include O2, Hiscox, Prudential, Morrisons, Green Flag, Sky and Chartis Insurance.

Note: 3. Before taking account of amortisation of acquired intangible assets (£0.1 million, 2010: nil) and costs relating to acquisitions and restructuring (nil, 2010: £0.7 million). In the Income Statement this is referred to as Headline Operating Profit.

CASH FLOW AND BANKING ARRANGEMENTS

Net cash at 30th June 2011 was £6.9 million compared to £5.5 million at 30th June 2010 and £6.9 million at 31st December 2010.

The Group continued to generate cash in the first half of 2011 with cash from operating activities of £7.3 million (first half 2010: £11.1 million) and cash conversion of 60% (first half 2010: 121%).

The Group continues to operate well within its banking covenants and retains its borrowing facility of £32 million, which continues until July 2013.

No deferred considerations are payable in the remainder of 2011. The estimated deferred considerations payable in 2012 total £2.6 million and are payable mostly in cash.

TAXATION

The effective tax rate for 2011 was 28.7% compared to 30.6% for 2010.

DIVIDENDS

The Board has declared an interim dividend of 2.08p per share (first half 2010: 1.84p), an increase of 13%.

The interim dividend will be payable on 14th October 2011 to shareholders on the register at 23rd September 2011. The ex dividend date is 21st September 2011.

CORPORATE ACTIVITY

So far in 2011, we have acquired:

·; ICON, an experiential sports marketing business.

·; Golden Goal, a sports marketing business in Brazil.

·; Reynolds Mackenzie, a healthcare public relations business.

·; LEC, a healthcare marketing agency.

OUTLOOK

We are pleased with the first half of 2011, but we cannot be complacent about the second half. This is a time of great uncertainty in global economics and global politics which presents both communications opportunities and challenges not only for our business, but for the marketing industry as a whole.

·; The events of the Arab Spring have created some short term challenges, but in the medium to long-term the opportunities for us to provide communications advice to emerging governments are considerable. Bell Pottinger Group is uniquely placed to benefit from this.

·; The US Government has had to deal with a large budget deficit and is already committed to reducing troop activities overseas. Their communication plans in areas of conflict remain uncertain and we have already seen a reduction in income from this client and expect this to continue. We have a great deal of expertise in communication activities in areas of conflict around the world and we are already developing ways we can use this expertise further.

·; The ability of major sporting events to reach mass audiences is continuing to increase. We have invested heavily in sports marketing and we see this as a major driver for growth for us in the next ten years. 2012 should be a very good year for us in sport and sponsorship with a number of significant opportunities coming from the London Olympic Games. Having now invested in Brazil, hosts to the 2014 FIFA World Cup and 2016 Olympic Games, we think that momentum can continue in 2013 and beyond. Their core activities of player representation, sports sponsorship and sponsorship activation continue to expand. We expect Sports Marketing to become a much bigger part of our Group.

·; The impact of digital developments on our industry continues apace and we are expanding further our capabilities across our Group. Digital is at the forefront of nearly all our communication campaigns and we are making more investment notably in social media, broadcast content production and distribution, search marketing, mobile marketing and online media buying.

·; The global economic and political outlook is uncertain and we are not immune from its impact. We will continue to be cautious, control our costs and retain our belief in maintaining a strong balance sheet position.

Growth opportunities remain for many parts of our Group, particularly in terms of market share, and our diversity enables us to take full advantage of these. Whilst we will continue to be acquisitive, growth can still be achieved organically from our existing business and through expansion into disciplines and geographies in which we do not currently operate or are under-represented. Our track record over the last six years reflects our resilience in challenging times and we can continue to outperform our competitors.

Lord Bell

Chairman

23rd August 2011

Condensed Consolidated Income Statement

Six months ended 30th June 2011

Condensed Consolidated Statement of Comprehensive Income

Six months ended 30th June 2011

 Condensed Consolidated Balance Sheet as at 30th June 2011

Condensed Consolidated Statement of Changes in Equity

Condensed Consolidated Cash Flow Statement

Six months ended 30th June 2011

Notes:

1. Business Segments

For management purposes, the Group is currently organised into four operating segments: Public Relations, Advertising and Marketing Services, Sports Marketing and Research.

Principal activities are as follows:

Public Relations

The Public Relations division comprises some of the leading names in the industry, including Bell Pottinger, Pelham Bell Pottinger, Good Relations, Harvard, Insight, Resonate, TTA Public Relations and Corporate Citizenship. It is the number 1 ranked PR Group in the UK in the PR Week public relations consultancy league table for 2010. It serves major UK and international brands, as well as governments, government departments, pharmaceutical and healthcare companies, charities, not-for-profit organisations, professional service firms, consumer brands and famous people.

Advertising and Marketing Services ('AMS')

The AMS division includes the VCCP Group and Teamspirit. It possesses specialist skills in advertising and marketing services; direct marketing, digital communication, search relations, point of sale, sales promotion and specialist media planning and buying. It also specialises in the niche market of financial services. AMS also includes OPEN Health which commenced trading in 2011.

Sports Marketing

The Sports Marketing division is the UK's number one sports marketing group (Marketing Magazine, October 2010) and includes Fast Track and the Essentially Group, as well as ICON and Golden Goal which were acquired in 2011.

Research

The Research division is made up of Opinion Leader Research, Facts International and Tree.

Segment information about these businesses is presented below.

1. Business segments (continued)

Amounts shown above have been restated to reflect the movement of a small part of Public Relations to Advertising and Marketing Services following the creation of OPEN Health, which forms part of Advertising and Marketing Services for segmental reporting. The impact of this change for the 6 month period to 30th June 2010 (12 month period to 31st December 2010) is to decrease turnover, operating income and operating profit in the PR division by £236,000 (£405,000), £206,000 (£349,000) and £76,000 (£87,000) respectively, with corresponding increases in Advertising and Marketing Services.

Geographical segments:

The Group's operations are located in the United Kingdom, Germany, the Middle East, the USA, South Africa, India, Brazil, Australia and New Zealand. The Group's Advertising and Marketing Services division is located in the United Kingdom, Europe and the Middle East. Public relations is carried out in the United Kingdom, Germany, the Middle East and the USA. The Sports Marketing division is located in the United Kingdom, Spain, South Africa, Australia, New Zealand, Brazil and the Middle East. The Research division is located solely in the United Kingdom.

2. Basis of preparation

The interim report for the six months ended 30th June 2011 is unaudited but has been reviewed by the auditors, Deloitte LLP, and their report to Chime Communications plc is set out on page 27.

The interim report for the six months ended 30th June 2011 has been prepared in accordance with IAS 34 'Interim financial reporting' as adopted by the European Union. The consolidated interim report should be read in conjunction with the annual financial statements for the year ended 31st December 2010, which has been prepared in accordance with IFRS as adopted by the European Union. The financial information contained in the consolidated interim report does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The figures for the year ended 31st December 2010 have been extracted from the statutory financial statements which have been filed with the Registrar of Companies. The auditors' report on those financial statements was unqualified and did not contain a statement made under Section 498 (3) of the Companies Act 2006.

The annual financial statements of Chime Communications Plc are prepared in accordance with IFRS as adopted by the European Union. Except as described below, the accounting policies adopted in the preparation of the half year condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31st December 2010.

·; Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

The following new standards, amendments to standards or interpretations are mandatory for the first time for the financial year beginning on 1st January 2011, and impact the consolidated half year financial information as described:

·; IAS 24: Related Party Disclosures. This standard revises the definition of related parties and has no impact on the disclosures made by the Group.

Going Concern Basis

The Directors have prepared cash flow forecasts which indicate that the Group has adequate resources to continue in operational existence for the foreseeable future. In preparing these forecasts the directors have taken into account the following key factors:

i. The rate of growth of the UK and global economy on the Group's business during the economic recovery;

ii. Key client account renewals;

iii. The level of committed and variable costs; and

iv. Current new business targets compared to levels achieved in previous years.

The Group currently has a borrowing facility of £32 million which continues until July 2013. This facility is subject to banking covenants.

The Directors have concluded, based on the cash flow forecasts, that it is appropriate to prepare the accounts on a going concern basis.

Risks and uncertainties

There have been no significant changes to the risks and uncertainties affecting the Group since the publication of the Annual Report and Accounts for the year ended 31st December 2010 in March 2011. These risks, which relate principally to personnel, acquisitions and the competitive and economic environments in which the Group operates are described on pages 41-43 of the Annual Report.

3. Headline Results

*Costs of acquisitions and restructuring includes costs incurred by the Group in acquiring, reorganising and integrating acquired businesses, non-recurring business restructuring and costs associated with Board level changes. During the period costs relating to acquisitions have been incurred in the Sports Marketing Division (£525,000), Research (£18,000), Public Relations (£11,000) and Advertising and Marketing Services (£52,000).

4. Earnings per share

From continuing operations