Interim Results

RNS Number:2599J
Poptones Group PLC
27 March 2003


CHAIRMAN'S STATEMENT

Introduction

I am pleased to announce our interim results for the six month period ended 31
December 2002.

Financial Review

Total turnover for the period, including contribution from the Group's joint
ventures, fell to #260,000 (2001: #575,000) and the loss before tax also fell to
#186,000 (2001: #588,000). Accordingly, there is no interim dividend.

The results reflect the shift in the Group's strategy to operating principally
via joint ventures, together with a significant reduction in administration
expenses following a successful cost cutting programme in the prior financial
year.

Business Review

The Group's activities were dominated by the Group's two joint ventures with
Telstar Music Group Limited, which were established in the spring of 2002.

The first joint venture was formed to continue to exploit the success of The
Hives album, "your new favourite band". This Album performed well over the
period.

The second joint venture, established to promote a further three artists, has
already signed two bands, The Bellrays and The Droyds, and negotiations are
continuing with a third act. This agreement has not yet contributed
significantly to the Group's financial results due to the relatively early stage
of its development.

Finances

At 31 December 2002 the Company had cash balances of #437,000. Cash resources 
continue to be managed carefully.

Outlook

The Group continues to operate in what remain tough trading conditions for the
music industry. Against this background, it is difficult to view the future with
anything other than caution. Accordingly, your Board is considering all
available strategic options for the business.


J M Blackburn
Chairman

27 March 2003





CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2002

                                                      Six month         Six month
                                                      period to         period to        Year ended
                                                    31 December       31 December           30 June
                                                           2002              2001              2002
                                                 Unaudited #000    Unaudited #000           Audited
                                                                                               #000

Turnover
 - group and share of joint ventures                        260               575             1,961
 - less share of joint ventures                           (229)                 -             (241)

Group turnover                                               31               575             1,720

Cost of sales                                              (13)             (408)           (1,036)

Gross profit                                                 18               167               684

Selling expenses                                           (73)             (451)             (519)

Administrative expenses                                   (175)             (313)             (529)

Operating loss                                            (230)             (597)             (364)

Share of operating profit in joint ventures                  31                 -                 -
                                                          (199)             (597)             (364)

Interest receivable                                          13                 9                14

Loss for the financial period                             (186)             (588)             (350)

Loss per share - basic and diluted                       (3.3)p          (10.3) p            (6.1)p


Note:

Basic loss per share is calculated using the loss for the financial period of
#186,000 and a weighted average number of ordinary shares in issue during the
six month period to 31 December 2002 of 5,720,871. On 15 November 2002
shareholders approved a 1 for 100 share consolidation. As a result, the loss per
share for the six month period ended 31 December 2001 has been restated from
0.1p to 10.3p and the loss per share for the year ended 30 June 2002 has been
restated from 0.06p to 6.1p.

Exercise of the Company's share options and warrants would not result in any
dilution in the loss per share.





CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2002
                                           31 December 2002        31 December          30 June
                                             Unaudited #000               2001             2002
                                                                Unaudited #000          Audited
                                                                                           #000
Fixed assets
Tangible assets                                           1                 27                3
Investments in joint ventures
- share of gross assets                                 321                  -              515
- share of gross liabilities                          (290)                  -            (515)

                                                         31                  -                -

Current assets                                           32                 27                3
Stock                                                    17                 97                8
Debtors                                                 101                325              133
Cash at bank                                            437                 80              784

                                                        555                502              925

Creditors: amounts falling due within
one year                                              (143)              (137)            (298)

Net current assets                                      412                365              627

Net assets                                              444                392              630

Capital and reserves
Called up share capital                               5,721              5,721            5,721
Share premium account                                   933                933              933
Profit and loss account                             (6,210)            (6,262)          (6,024)

Shareholders' funds                                     444                392              630



Notes:


1. The unaudited financial information included in this report has been prepared 
   in accordance with applicable accounting standards.

2. The unaudited interim financial information was approved by the Directors on 
   26 March 2003.

3. The Directors are unable to recommend the payment of an interim dividend.

4. The Group is indemnified against cumulative losses made by the two joint 
   venture companies, Poptones Telstar 1 Limited and Poptones Telstar 2 Limited, 
   to the extent that they exceed the value of the investment.

5. Copies of this interim report are being sent to all of the Company's 
   shareholders. Further copies can be obtained from the Company's registered 
   office.




CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2002

                                                       Six month        Six month          Year
                                                    period to 31     period to 31      ended 30
                                                        December         December          June
                                                            2002             2001          2002
                                                       Unaudited        Unaudited       Audited
                                                            #000             #000          #000
                                                                                 
Reconciliation of operating loss to net cash
outflow from operating activities:
Operating loss                                             (230)            (597)         (364)
Depreciation and impairment of tangible fixed
assets                                                         2               22            49
Profit on disposal of tangible fixed assets                    -                -           (1)
(Increase)/decrease in stock                                 (9)               66           155
Decrease/(Increase) in debtors                                32            (110)            82
(Decrease)/increase in creditors                           (155)             (85)            76

Net cash outflow from operating activities                 (360)            (704)           (3)

Returns on investment and servicing of finance
Interest received                                             13                9            14

Capital expenditure and financial investment
Purchase of tangible fixed assets                              -                -           (4)

Proceeds from disposal of tangible fixed                       -                -             2
assets                                                         -                -           (2)

Management of liquid resources
Decrease/(increase) in short-term deposits                   550                -         (550)

Increase/(decrease) in cash                                  203            (695)         (541)

Analysis of net funds                                       At 1                          At 31
                                                            July             Cash      December
                                                            2002             Flow          2002
                                                            #000             #000          #000

Cash at bank                                                 234              203           437
Short-term deposits                                          550            (550)             -

At 31 December 2002                                          784            (347)           437





Enquiries:

J M Blackburn                                                     01483 563 314
Poptones Group Plc





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