SMRT.L Regulatory News (SMRT)

29 July 2011

Coms plc ("Coms", the "Company" or the "Group")

Final Results for the year to 31 January 2011

The directors or Coms are pleased to present the audited results for the year ended 31 January 2011.

The full annual report and accounts for the year ended 31 January 2011 together with the notice of annual general meeting to be held on 31st of August 2011 has today been sent to shareholders and are available at the Company's website at www.coms.com

Period highlights

·; Revenue growth of 8% to £3.52m (2010: £3.25m)

·; Gross profit increased by 4% to £0.881m (2010: £0.842m)

·; Gross margin remains consistent and in excess of 25%

·; Restructuring benefits beginning to impact

·; Repositioning as a Provider of Cloud Telephony

·; Launch of Apple iPhone and iPad voice apps

Chairman's statement

The Board of Coms initiated significant restructuring of the team at VCOMM during the financial year in order to focus our core businesses around the exciting opportunities created by the launch of Microsoft's Lync, a business telephony application for Microsoft Exchange, and the increasing importance of Cloud services.

The benefits from this repositioning are already clearly visible in the opening months of the current year although, inevitably, such a significant restructuring resulted in some short term disruption and cost in the second half. Nevertheless, I am pleased to report that revenues increased by 8% to £3.52m and gross profit was up by 4% to £0.88m in the year to 31 January 2011. I am also encouraged that gross margin remained in excess of 25% which is consistent with the margins achieved in previous years.

A significant achievement during the year was the signing of a reseller and distribution agreement with Obsidian Telecoms which provides a mobile phone call savings package for the Group's customers; savings of up to 50 per cent can be achieved. Essentially Coms will receive a revenue share on all mobile call minutes. Significantly, given the Group's strategic focus, Obsidian's mobile solution also operates with the Lync communications application and will be part of the Group's pbx service offering to the corporate market. 

Since the year end the Group achieved another significant step in partnering with E-MetroTel to market UCx under an exclusive distributorship agreement. UCx is a new innovative Unified Communications system that is designed to enable users of BT-supplied Nortel systems to keep their hardware while gaining all the benefits of using VoIP from service providers such as Coms.

The repositioning of Coms as a Cloud Telephony company will be completed in the autumn. This will result in a re-launch of the Company's websites and increased marketing programmes to attract new customers.

The Board believes that just as technical advances in mobile telephones and networks in the 80's took business from the traditional fixed telephone networks, the opportunity to provide "voice apps" to user of iPads and other mobile devices over Wi-Fi will take business away from the mobile networks and provide significant opportunities for growth. The Board is committed to ensuring that Coms is a leading European player in providing voice apps on mobile devices. During the financial year we have launched our first Apple iPhone apps and recently announced the launch of our iPad Cloud voice app. Developments of the service will include the Google Android platform plus innovative new features including Facebook presence and integrated video.

Our industry continues to evolve, and we are seeing particularly strong growth in the US market. Much of this is driven by the launch of Microsoft's Lync and its acquisition of the consumer VoIP service, Skype, for US$8b.

I strongly believe that the UK and European markets will follow the US market. Traditional fixed line and mobile telephone services will be upgraded to Cloud based telephony services, like those provided by Coms, as the economics and increased functionality is compelling for both consumers and businesses. This is the main reason many forecasters continue to predict strong growth in the Internet telephony sector. Our recent launch of the Apple iPhone and iPad app brings the same functionality to individual users. More than 25 million iPads have now been sold and Coms can bring telephony functionality to these products using our Cloud-based service app available from Apple's itunes App store.

We believe the Group is in good shape. Both Coms and VCOMM continue to win new customers giving a progressively increasing level of recurring income from monthly subscriptions and call usage. Just before the year end Coms raised in excess of £640,000, gross, of new money which, since the year end has been used to further develop the business. However, we are aware that generally, investor sentiment does not currently favour early stage loss making technology companies. Our corporate strategy therefore remains focused on sustainable growth that will lead to profitability in the short term. Once we have reached a critical mass of customers, the monthly subscriptions will ensure healthy, sustainable profitability.

I remain very optimistic about the future of Coms plc.

Jason Drummond

Executive Chairman

Consolidated Statement of Comprehensive Income for the year ended 31 January 2011.

Consolidated Statement of Financial Position as at 31 January 2011

Consolidated Statement of Cash Flows for the year ending 31 January 2011

Consolidated Statement of Changes in Equity For the year ended 31 January 2011

Notes to the Financial Statements

1. GENERAL INFORMATION

Coms plc is a company incorporated in England and Wales and quoted on the AIM Market of the London Stock Exchange.

The financial information is a preliminary announcement for the years ended 31 January 2011 and 2010 and does not comprise statutory accounts for the purposes of Section 434 of Companies Act 2006.

The preliminary announcement of the results for the year ended 31 January 2011 was approved by the board of directors on 27 July 2011.

The financial statements have been prepared in accordance with International Financial Reporting Standards 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 companies reporting under IFRS. The financial statements have been prepared under the historical cost convention.

Whilst the information in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of IFRS's, this announcement does not in itself contain sufficient information to comply with IFRS's.

2. BUSINESS AND GEOGRAPHICAL SEGMENTS

In the opinion of the directors the Group's core activities comprise three material business segments which reflect the profiles of the risks, rewards and internal reporting structures within the Group.

These are as follows:

·; Provision of telephony services

·; Supply and distribution of telephony equipment and related services

·; Provision of management services for the Group

All activities were conducted within the United Kingdom and it is the opinion of the directors that this represents one geographical segment.

Balance sheet analysis of business segments

Capital additions, depreciation and amortisation by business segment

3. OPERATING LOSS FOR THE YEAR

Operating Loss from operations is arrived at after charging:

4. TAXATION

The tax credit on the loss for the year was as follows:

The applicable tax rate has changed to 21% due to a change in the UK corporation tax rate.

At 31 January 2011 the Group had estimated tax losses of £4,143,448 (2010: £3,552,331) to carry forward against future profits. There is a deferred tax asset arising from certain of these losses of which £Nil (2010: £18,449) has been provided in the financial statements.

At 31 January 2011 the Group had estimated tax losses of £4,143,000 (2010: £3,459,000) to carry forward against future profits. The potential deferred tax asset calculated at 21% arising from these losses of £870,000 (2010: £726,000) has not been provided in the accounts due to the uncertainty of recovery.

5. LOSS PER SHARE

Loss per share data is based on the group loss for the year and the weighted average number of shares in issue.

In order to calculate diluted earnings per share, the weighted average number of ordinary shares in issue would be adjusted to assume conversion of all dilutive potential ordinary shares according to IAS 33. In each of the years ended 31 January 2011 and 2010 the Group has made a loss after taxation and the effect of the potential ordinary shares is anti-dilutive and therefore the diluted earnings per share is the same as basic earnings per share. The weighted average number of potentially dilutive shares for the year ended 31 January 2011 was 2,274,689 (2010: 5,222,366).

6. AVAILABILITY OF THIS ANNOUNCEMENT

The annual report and accounts for the year ended 31 January 2011 together with the notice of annual general meeting to be held at 11:00 on 31 August 2011 has today been sent to shareholders and are available at the Company's website at www.coms.com

Coms plc

Richard Bennett +44 (0) 20 7148 3148 

Northland Corporate Finance plc (Nominated Adviser and Broker)

Luke Cairns / Rod Venables +44 (0) 20 7796 8800

XCAP Securities (Broker)

Jon Belliss / Parimal Kumar / John Grant +44 (0) 20 7101 7070

Threadneedle Communications (PR)

Graham Herring +44 (0) 20 7653 9858