SMRT.L Regulatory News (SMRT)

COMS PLC

31 October 2012

 COMS PLC

("Coms", or "the Group")

Interim Results for the six months to 31 July 2012

Coms plc, a provider of internet telephony services to business customers, announces unaudited Interim Results for the six months ended 31 July 2012.

Period Highlights

Richard Bennett, CEO of Coms, said: "We have made good progress in the half year, particularly from our cloud telephony division where recurring revenue has almost doubled to £608,000. Given that this period bore the one-off costs relating to the formation of Coms Enterprise which is providing much of our growth, the underlying trend shows that the Group is fast approaching sustainable profitability."

A copy of these interims together with further information on the Company is available on the Company's website: www.coms.com.

Contact:

Coms plc

Richard Bennett +44 (0) 20 7148 3148 

Northland Capital Partners (Nominated Adviser)

Luke Cairns +44 (0) 20 7796 8800

XCAP Securities Plc (Broker)

Jon Belliss +44 (0) 20 7101 7070

Threadneedle Communications (PR)

Graham Herring +44 (0) 20 7653 9858

CEOÕs Statement

Coms plc has had a good start to the year and I am pleased to report significant revenue growth of 90.6% to £0.608m in our principle cloud telephony service, helping lift the Group total by 33% to £1.832m. Gross profit is up by 47.7% to £0.604m.

This impressive performance demonstrates that we are rapidly growing in our core area, that we have strong recurring cash flow and, as we are a relatively fixed cost business, it is clear that we are approaching our goal of sustainable profitability.

Much of this growth came from the new Coms Enterprise division which we announced in April. It is steadily winning large new government accounts including: South Tees NHS, South London NHS, Mid Cheshire NHS, East Lancs. Council, Stanmore NHS, Bolton Hospital NHS, St Georges and Coventry PCT.

Mainly as a result of the exceptional costs in setting up the new Coms Enterprise division, that has been responsible for delivering much of our new growth, overall costs were up during the period but management remains committed to achieving profitability and so cost control remains a key focus in the second half.

Trading in our distribution division, Vcomm, has improved with revenues up by 21.3% to £1.155m although gross margin has fallen from 19.4% to 14.0%. This growth endorses management's belief that companies will procure new VoIP enabling equipment as they implement Internet telephony solutions. Whilst this is encouraging, management continues to focus its primary efforts on the internet telephony services that have recurring income and higher margins.

Post period, I am disappointed to report that Executive Chairman, Jason Drummond, has left the company and the Board wishes him every success with his new venture. The role of Chairman is currently vacant and the Board will make an appropriate appointment in due course.

The market for internet telephony services continues to grow as it provides both cost savings and increased functionality and flexibility for customers. Moreover, I am confident that Coms' new organisational structure of an SME sales team and Large Enterprise sales team will enable us to maximise the opportunities of this growing market, winning new customers and growing the business.

During the remainder of the year, I expect the SME team to increase its marketing efforts and recruit more resellers and partners. Whilst the Enterprise sales team will focus on winning new corporate customers, particularly connecting corporate Microsoft Lync to our internet telephony service, and achieving approved supplier status on the new online Government procurement service G-Cloud.

Overall, I am positive about the outlook for Coms plc.

Richard Bennett

CEO

Consolidated Statement of Comprehensive Income

For the Six months ended 31 July 2012

The Company's turnover and operating loss arose from continuing operations.

There were no recognised gains or losses other than those recognised in the income statement above.

Consolidated Statement of Financial Position as at 31 July 2012

Consolidated Statement of Cash Flows

For the Six months ended 31 July 2012

Consolidated Statement of Changes in Equity

COMS PLC

Notes to the Interim Financial Information

1. Basis of preparation

The consolidated interim financial information have been prepared in accordance with International Financial Reporting Standards and on the historical cost basis, using generally recognised accounting principles consistent with those used in the annual report and accounts for the year ended 31 January 2012 and expected to be used for the year ended 31 January 2013.

This interim report for the six months to 31 July 2012 which complies with IAS 34 "Interim Financial Reporting" was approved by the Board on 30th of October 2012.

2. Significant Accounting Policies

The accounting policies and methods of computation applied are consistent with those of the annual Þnancial statements for the year ended 31 January 2012, as described in those annual Þnancial statements.

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

As at that date of authorisation of these financial statements, the following Standards and Interpretations, have been issued by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC), but are not yet effective and, therefore, have not been adopted by the Company:

Standards

IFRS 9 - Financial Instruments (Issued Nov 2009)

IFRS10 - Consolidated Financial Statements (Issued May 2011)

IFRS 11 - Joint Arrangements (Issued May 2011)

IFRS 12 - Disclosures of Interests in Other Entities (Issued May 2011)

IFRS 13 - Fair Value Measurement (Issued May 2011)

IAS1 - Presentation of items of other Comprehensive Income Ð Amendments to IAS 1 (Issued June 2011)

IAS 19 - Employee Benefits (Issued June 2011)

IAS 27 - Separate Financial Statements (Issued May 2011)

IAS 28 - Investments in Associates and Joint Ventures (Issued May 2011)

3. Segmental Analysis

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.

Assets

Liabilities

Capital additions

Depreciation and amortisation

4. Loss per Share

The loss per ordinary share is based on the Group's loss for the period of £327,617 (31 July 2011 - £315,283; 31 January 2012 - £594,318) and a basic weighted average number of shares of 207,872,463 (31 July 2011 - 85,634,894; 31 January 2012 - 94,402,017).

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 periods ended 31 July 2012, 2011 and 31 January 2012 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 potential dilutive shares for the period ended 31 July 2012 was 13,597,392 (31 July 2011 - 2,274,689; 31 January 2012 - 2,274,689)

5. Reconciliation of operating loss to net cash outflow from operating activities.

6. Related-party transactions

Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note.

Remuneration of key management personnel

Directors' transactions

The director's fees payable to J K Drummond shown above were paid to My6 Limited, a company which J K Drummond is a director. In addition a further £32,500 was paid to My6 Limited during the period in respect of directors fees for the year ended 31 January 2013. This amount is included in the accounts as a prepayment at 31 July 2012.

At 31 July 2012 there were the following amounts owing by Directors of the Group in respect of unpaid share subscriptions:

J K Drummond - £Nil (31 July 2011: £Nil; 31 January 2012: £82,000)

J P Drummond - £Nil (31 July 2011: £Nil; 31 January 2012: £10,000)

During the year sales and purchases were made with the Media Corp plc, a group, a company in which J K Drummond and J P Drummond are directors as follows:

At the period end, a balance of £4,029 was payable by the Group (31 July 2011: £2,361; 31 January 2012: £4,772).

7. Called up Share Capital

The issued share capital as at 31 July 2012 was 229,384,894 Ordinary Shares of 0.1p each (31 July 2011 - 85,634,894 of 1p each; 31 January 2012 - 185,634,894 of 0.1p each).

8. Events subsequent to 31 July 2012

On 12 September 2012 Mr J K Drummond resigned as a director and, as part of his arrangements with the Company, the Company issued 8,333,333 new ordinary shares of 0.1p each at a price per share of 0.54p.

Under the terms of a licence agreement entered into by the Company on 30 April 2012 the Company was contracted to pay consideration of £120,000 to certain parties to the agreement. On 2 October the Company issued 20,000,000 new ordinary of 0.1p each at a price per share of 0.6p in satisfaction of the consideration payable.

9. The unaudited results for period ended 31 July 2012 do not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. The comparative figures for the year ended 31 January 2012 are extracted from the statutory financial statements which have been filed with the Registrar of Companies and which contain an unqualified audit report and did not contain statements under Section 498 to 502 of the Companies Act 2006.

10. Copies of this interim statement are available from the Company at its registered office at 5-7 Cranwood Street, London, EC1V 9EE. The interim statement will also be available on the company website www.coms.com/governance_policy.html