Servision PLC Regulatory News (SEV)

30 September 2010

SerVision PLC

("SerVision" or "the Company")

Interim Results

For the Six Months Ended 30 June 2010

SerVision (AIM: SEV), the AIM listed leading developer and manufacturer of an award winning range of digital security systems, is pleased to announce its unaudited interim results for the six month period ended 30 June 2010. SerVision has developed and patented a video compression technology, which allows high quality, real-time CCTV transmissions to be streamed across mobile phone networks.

HIGHLIGHTS:

·; Revenues increased by 29% to $2.7m (H1 09: $2.1m);

·; Operating profit was $769,000, compared to an operating loss of $293,000 for H1 2009;

·; Net profit for the period rose significantly to $729,000, compared to a loss of $316,000 for H1 2009 and a net profit of $509,000 in H2 2009;

·; New contracts in the UK, Europe, North America and Asia to supply systems for buses, cash-in-transit, airports, emergency services and taxis;

·; In ongoing negotiations with major mobile operators in South America, China and Europe to supply mobile camera systems for the home security market; and

·; New product features include G-Force sensors which detect acceleration and irregular movement in vehicles allowing rapid response to vehicle accidents and negligent driving.

Gidon Tahan, Chairman and Chief Executive Officer of SerVision, commented, "We are very excited by the significant improvement in the Company's financial performance, as highlighted by these results, and by the strong pipeline of opportunities currently under discussion with our business partners. The Board feel that the Company's broad range of systems, particularly our robust mobile cameras, are amongst the most technologically advanced on the market due to our patented compression technology, which allows high quality, real-time video to be streamed across mobile networks."

For further information:

CHAIRMAN'S STATEMENT

I am pleased to announce SerVision's consolidated group financial statements for the six months ended 30 June 2010. Our net profit for this period was $729,000 compared to a loss of $316,000 for the same period in 2009.

Sales and Marketing

During this period SerVision announced a new distribution agreement with Vision Techniques, a leading UK-based supplier of mobile security solutions to cash-in-transit companies, police and fire departments and public transport organizations. Ongoing UK-based projects with G4S and a new partnership with Loomis, are expected to progress during the coming months.

The Company also announced in May 2010 a manufacturing rights agreement with Rich Wonder Technology Limited to manufacture all of SerVision's narrow band-width video gateway products to be sold in China and other authorised territories. Under the terms of the agreement, the consideration payable to SerVision was $2.0 million of which $600,000 was payable in cash. The balance of $300,000 of the cash consideration is expected to be received by the Company by the end of October 2010. The remaining $1,400,000 will be satisfied by the provision of 3,730 MVG 400 units of stock to the Company.

SerVision recently supplied 250 UVG gateways to a new Bank/ATM project in Singapore, and our new Compact Video Gateway - Mobile ("CVG-M"), ideal for body-worn applications, was recently selected for an airport security project in Guangzhou China in advance of the 2010 Asian Games being held in November. SerVision's MVG 400 mobile video solution was selected for an 800 vehicle school bus project in San Antonio, Texas and the first 150 units have already been supplied.

The Company is currently shortlisted for two very promising large-scale government projects in Nigeria and South Africa and the Directors hope to have positive results from these discussions in the coming months. With regards to our revolutionary mobile video systems (MVG and CVG-M), we remain in regular contact with a leading German telecoms operator to formalise a framework for cooperation in the German market, whereby SerVision would supply its products, through the mobile operator to their subscribers via a monthly contract fee. SerVision's partner in China has recently begun discussions with China Mobile, the country's largest cellular operator, and we are also now in the process of exploring opportunities with the largest cellular operator in Mexico. The Directors believe that the potential in the market for a portable, cost effective, live-streaming home security video system which can be viewed on a mobile device is significant and it is hoped that one or all of these discussions will result in a new supply agreement for the Company.

Research and Development

SerVision's newly launched CVG-M has begun to make inroads in the global security market and is currently being piloted for a number of large-scale mobile projects. The two channel unit with bi-directional audio and integrated GSM and GPS modules now has full support for recording to a removable micro SD card. The system is available for deployment for a range of applications including the remote monitoring of individual persons, vehicles and remote sites. SerVision's CVG-M and MVG mobile solutions both support an integrated G-Force sensor that detects sudden changes in acceleration and irregular movement, offering bus companies and other fleet operators the ability to monitor and record roadside accidents, negligent driving and in the case of cash-in-transit vehicles, illegal interference.

During the first half of this year, SerVision released new client software for the iPhone and completed software support for video TV-walls commonly used in large control centres. SerVision's software team is now in the final stage of releasing a new control centre/backup solution that is designed and optimised to manage simultaneous connectivity with thousands of video gateways.

Financials

·; Revenues, including manufacturing rights, increased by 29% to $2,727,000 for this period compared to $2,113,000 for the same period in 2009.

·; Operating profit for the period was $769,000 compared to an operating loss of $293,000 for the same period in 2009.

·; Net profit for the period was $729,000 compared to a loss of $316,000 for the same period in 2009 and a net profit of $509,000 for the second half of 2009.

·; Cash at the end of the period was $172,000, compared to $125,000 as at 30 June 2009.

Conclusion

We are very excited by the significant increase in the Company's performance, as highlighted by these results, and by the strong pipeline of opportunities currently under discussion with our business partners. We view the second half of the financial year with optimism, as we anticipate further penetration of the mobile surveillance market as our products gain recognition and credibility within the industry. The past 12 months have shown us deliver our strongest performance and I remain hopeful about the Company's ability to continue to grow in the future.

I would like to express gratitude to our shareholders for their ongoing support, and to all SerVision personnel for their dedication and commitment to the Company's future and success.

Gidon Tahan

Chairman and Chief Executive Officer

29 September 2010

CONSOLIDATED GROUP COMPREHENSIVE INCOME STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2010

CONSOLIDATED GROUP BALANCE SHEET

AT 30 JUNE 2010

CONSOLIDATED GROUP STATEMENT OF CHANGES IN EQUITY

FOR THE SIX MONTHS ENDED 30 JUNE 2010

CONSOLIDATED GROUP CASH FLOW STATEMENT

FOR THE SIX MONTHS ENDED 30 JUNE 2010

 NOTES TO THE INTERIM FINANCIAL STATEMENTS

1. BASIS OF PREPARATION

These interim consolidated financial statements are for the six months ended 30 June 2010. The have been prepared in accordance with IAS, Interim Financial Reporting. These interim financial statements have been prepared in accordance with IFRS standards and IFRIC interpretations issued and effective or issued and early adopted as at time of preparing these statements (September 2010). The IFRS standards and IFRIC interpretations that will be applicable at 31 December 2010, including those that will be applicable on an optional basis, are not known with certainty at the time of preparing these interim financial statements. The policies set out below have been consistently applied to all the years presented.

These consolidated financial statements have been prepared under the historical cost convention.

The information set out in this interim report for the six months ended 30 June 2010 does not constitute statutory accounts as defined by section 434 of the Companies Act 2006. The statutory accounts for the year ended 31 December 2009, incorporating an unqualified auditors' report, have been filed with the Registrar of Companies.

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

2. RAISING OF CAPITAL

During January 2010, the Company issued 2.7 million new ordinary shares at a price of 12.5 pence per share in raising £342,000. The net proceeds will be used for additional working capital for the subsidiary.

3. 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.

The profit per share of 1.74c (31 December 2009: 0.61c; 30 June 2009: (1.06c)) has been calculated on the weighted average number of share in issue during the year namely 41,669,435 (31 December 2009: 32,131,199; 30 June 2009: 29,881,490) and profit of US$ 724,853 (31 December 2009: US$161,000; 30 June 2009: US$ (316,861)).

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

5. AVAILABILITY OF INTERIM REPORT

The interim financial statements will be available from the Company's registered office and, in accordance with the AIM Rules for Companies, will be available shortly on the Company's website, www.servision.net.