Half Yearly Report

SerVision PLC

("SerVision" or the "Company")

Interim Results

For the Six Months Ended 30 June 2013

Board of SerVision (AIM: SEV), the AIM listed leading developer and manufacturer of digital security systems, announces its unaudited results for the six months ended 30 June 2013.

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CHAIRMAN'S STATEMENT

The Board today announces SerVision's consolidated group interim report for the six months ended 30 June 2013. Sales revenue from this period was a modest $1,260,000 and our net loss was $1,040,000, but in light of the trading in Q3 I am confident of an improved performance in the second half of the year.

Sales and Marketing

SerVision entered into three significant partnership agreements in the first half of 2013. On the back of having signed an exclusive distribution agreement with APS, a major security company in India, and a new OEM distribution agreement with CDsMedia in Angola, and after having successfully collaborated on projects in the Russian railway and oil transport sectors, SerVision announced in August that it has signed a distribution agreement with Russian-based Transport Online LLC (soon to be renamed IVO Systems). In addition to these new partnerships, SerVision was recently informed by its distributor in South Africa that the UVG400 has been selected to be installed at over 8,000 base stations operated by cellular operator Vodacom. In addition, I am pleased to announce that the rollout for tobacco transport projects across the UK has recently begun. Last month, SerVision supplied 140 MVG200 units to its UK partner, Cobra, for use in new projects involving the transport of high-value assets. The MVG200 has also been successfully deployed on delivery trucks operated by Shueersal, Israel's largest supermarket chain. In parallel to our ongoing project with Shufersal, we've identified a potentially significant market demand for our mobile video technology among other consumer goods companies worldwide.

I am further encouraged by the fact that SerVision's four channel MVGs are under consideration for a bus project in Delhi, where the fleet size is over 12,000, and they have been short-listed for bus projects in both Barranquilla and Bogota in Colombia where there is a combined fleet of over 5,000 vehicles. New pilots for public transportation projects in Mexico and the US are also currently underway and we are continuing to explore new commercial opportunities with our German partner Deutsche Telekom. Additionally, distribution agreements for a number of markets including Nigeria, Kenya, Colombia and France have either recently been signed or are in negotiation. We are confident that growing our network of channel partners will further bolster sales, create new market opportunities and help us grow significantly in the coming months and years.

Research and Development

During the first half of 2013, SerVision released its new MVG200 to the market. I believe the MVG200 is a considerable improvement over the earlier generation two-channel CVG-M as it has a more robust design, built-in WiFi and can achieve faster data speeds than its predecessor. In addition to readying the MVG200 for launching in the market, SerVision's R&D team spent much of this year further expanding the functionality and feature set of the SVControlCenter professional monitoring platform. They are also busy working on the next generation of DVRs which, despite some setbacks, we hope will be ready in the first half of 2014. The new line of encoders employ a modular design which can support two, four or eight channels. It will also support both IP and analogue cameras, and it will be capable of HD recording and a broad range of additional functionality that may eventually include some advanced analytics features.

In addition to these tasks, our R&D teams are working with WISOL, our Singaporean partner, to develop a new handheld personal video transmitter for police officers. This project is partially financed by a grant from SIIRD, the Singaporean Industrial Research and Development Foundation, that was awarded in March 2013. A number of global partners have conveyed interest in offering the personal video transmitter to their customers and we are confident that there is a large market opportunity for handheld devices, which would utilise SerVision's proven video compression technology.

Financials

· Revenues for this period were $1,260,000 compared to $2,234,000 for the same period in 2012. 

· Operating loss for the period was $1,002,000 compared to an operating loss of $452,000 for the same period in 2012.

· Net loss for the period was $1,040,000 compared to a loss of $612,000 for the same period in 2012.

· Cash and cash equivalents at 30 June 2013 of $13,000 (at 30 June 2012: $139,000)

Conclusion

Despite difficult market conditions and a sluggish start to 2013, I remain optimistic that the second half of the year will see an improvement on H1, and that we will continue to see a steady upturn in sales within the transportation security sector. Our next generation of products currently in development offer further assurance that SerVision will remain competitive in our market as a cost-effective solution provider for fleet tracking applications in the years to come.

As always I would like to express my sincere gratitude to our shareholders for their continued support and to thank SerVision staff for their commitment and outstanding work.

Gideon Tahan

Chairman and CEO

30 September 2013

SERVISION PLC

CONDENSED GROUP COMPREHENSIVE INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2013

SERVISION PLC

CONDENSED GROUP BALANCE SHEET

AT 30 JUNE 2013

SERVISION PLC

CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2013

SERVISION PLC

CONDENSED GROUP CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2013

SERVISION PLC

NOTES TO THE REPORT AND CONDENSED GROUP FINANCIAL STATEMENTS

FOR THE SIX MONTHS ENDED 30 JUNE 2013

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 2013 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 2013 and for the six months ended 30 June 2012 are unaudited.

The financial information for the year ended 31 December 2012 is an extract from the latest group accounts.

Statutory financial statements for the year ended 31 December 2013, prepared in accordance with IFRS, on which the auditors gave an unqualified opinion, have been filed with the Registrar of Companies.

These consolidated interim group financial statements are presented in US Dollars and all values are rounded to the nearest thousand dollars ($'000) except when otherwise indicated.

2. GOING CONCERN

The directors have prepared and reviewed sales forecasts and budgets for the next twelve months and having considered these cash flows and the availability of other financing sources, have concluded that the group will remain a going concern. In particular the group continues to work closely with customers to agree payment plans where necessary and agree other arrangements in order to secure cash flows and reduce the outstanding trade receivables balances. Additionally if and when necessary, the Directors may seek additional equity investment and debt finance from a variety of sources.

Having completed these processes and having made further relevant enquiries, the Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. For this reason, they continue to adopt the going concern basis in preparing the accounts.

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

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 (2.03c) (31 December 2012: (loss) (3.05c); 30 June 2012: (loss) (1.20c)) has been calculated on the weighted average number of shares in issue during the year namely 51,573,217 (31 December 2012: 51,632,795; 30 June 2012: 51,188,602) and loss of US$ 1,048,061 (31 December 2012: loss US$ 1,593,000; 30 June 2012: loss US$ 612,000).

Due to the immaterial number of options in issue there is no material difference between the diluted and basic loss per share.