Final Results

Cheerful Scout PLC
06 November 2003


                               Cheerful Scout plc

                      ('Cheerful Scout' or 'the Company')

                 Final results for the year ended 30 June 2003

Cheerful Scout plc, the AIM listed multi media and animations specialist,
announces its results for the year ended 30 June 2003.

Overview:

   •Pre-tax and pre-goodwill amortisation loss of £69,242 (2002: pre-tax
    profit £84,797)
   •Now expecting to see some recovery in current tough market conditions
   •Evidence that the downturn in the media industry has started to lift with
    corporate activity beginning to increase
   •DVD activities, animation and graphics are all expanding
   •Successfully completed re-location to enable the expansion of facilities

Creative Director Peter Litten said: 'Although pre-tax profits are down compared
to last year, we're now beginning to see signs of an upturn in the market and
are very happy with the direction we are taking. We've focussed our efforts on
building a solid foundation and have spent time and money strengthening our
service capabilities and building our profile. Due to careful planning, we are
now poised to take advantage of the changing market conditions. We're very
optimistic for the coming year having recently won some new contracts and
believe that there is substantial potential for us going forward.'

CHAIRMAN'S STATEMENT

FOR THE YEAR ENDED 30 JUNE 2003

We shall be presenting to shareholders for their approval at our second Annual
General Meeting, the audited accounts for the year ended 30 June 2003. The
results for the year show a loss of £69,242 (2002: profit £84,797) before
taxation and goodwill amortisation.

As reported last year, the corporate video market was our hardest hit sector
during the market downturn but, the directors are now expecting some recovery in
this area of activity. The Company's DVD activities continue to develop well and
further growth is anticipated in this market area. In addition, we continue to
grow and develop our other key area of activity - animation and graphics.

We successfully completed our re-location to new leasehold premises during the
year and the move has helped us to expand our range of facilities for clients
and to provide an enhanced level of client support. As anticipated, the new
premises have ensured that our employees have also improved the efficiency and
quality of services we provide.

Conditions throughout last year remained difficult but we continued to develop
our customer base by offering the type of services and quality that is the
hallmark of Cheerful Scout. In the first quarter of this year, the economic
downturn in the media industry has started to lift. For us, this has evidenced
itself in a modest increase in the number and scale of projects we are starting
to receive. As recovery takes hold the directors intend to increase our sales
and business development capability to take advantage of opportunities in the
corporate market.

Accordingly, the directors are planning for some recovery in the current year
and will continue to introduce a 'one stop communications solution' to a
selective range of non-competitive clients. We continue to invest in a
combination of executive talent and technology that should enable us to take
advantage of the market recovery. The current year will be challenging but we
are confident that the strength of our product offer, coupled with the financial
strength we enjoy, will ensure that Cheerful Scout will benefit from the
anticipated upturn.

S Appleton
Chairman


CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2003

                     2003                                        2002

                Pre goodwill        Goodwill                Pre goodwill        Goodwill                                
                amortisation    Amortisation       Total    amortisation    amortisation       Total                    
                           £               £           £               £               £           £   
                                                     
Turnover

Continuing           733,347               -     733,347               -               -           -
operations

Acquisitions               -               -           -         194,672               -     194,672
                    ________        ________    ________        ________        ________    ________

                     733,347               -     733,347         194,672               -     194,672

Cost of             (398,572)              -    (398,572)        (69,353)              -     (69,353)
sales
                    ________        ________    ________        ________        ________    ________

Gross profit         334,775               -     334,775         125,319               -     125,319

Administrative      (426,615)       (136,415)   (563,030)        (42,506)        (22,736)    (65,242)
expenses
                    ________        ________    ________        ________        ________    ________

Operating
profit/(loss)

Continuing           (91,840)       (136,415)   (228,255)         82,813         (22,736)     60,077
operations

Other interest        22,598               -      22,598           2,083               -       2,083
receivable and
similar
charges

Interest                   -               -           -             (99)              -         (99)
payable and
similar
charges
                    ________        ________    ________        ________        ________    ________

Profit/(loss)        (69,242)       (136,415)   (205,657)         84,797         (22,736)     62,061
on ordinary
activities
before
taxation

Tax on profit         19,164               -      19,164         (11,426)              -     (11,426)
on ordinary
activities
                    ________        ________    ________        ________        ________    ________

Retained                                        (186,493)         73,371         (22,736)     50,635
profit /
(loss) for the
year
                                                ========        ========        ========    ========

Earnings per
ordinary
shares:

Basic                                             (0.107)p                                     0.116p
                                                =========                                   =========


Diluted                                           (0.088)p                                     0.095p
                                                ==========                                  =========


BALANCE SHEET
AS AT 30 JUNE 2003


                                 Group                    Company

                           2003         2002         2003         2002

Fixed assets                  £            £            £            £

Intangible assets     2,569,141    2,705,556            -            -

Tangible assets         402,684      251,603            -            -

Investments                   -            -    3,144,212    3,144,212
                      ________     ________     ________     ________



                      2,971,825    2,957,159    3,144,212    3,144,212
                      ________     ________     ________     ________
                 
Current assets

Debtors                 244,818      258,026       68,161       15,652

Stock                     1,338            -            -            -

Cash at bank and in     557,552      847,893      554,181      635,100
hand
                      ________     ________     ________     ________



                        803,708    1,105,919      622,342      650,752

Creditors: amounts
falling due within
one year              (100,845)    (196,190)        (300)           -
                      ________     ________     ________     ________



Net current assets      702,863      909,729      622,042      650,752
                      ________     ________     ________     ________


Total assets less
current
liabilities           3,674,688    3,866,888    3,766,254    3,794,964



Provisions for
liabilities and
charges                (16,946)     (18,766)           -            -
                      _________    _________    _________    _________

                      3,657,742    3,848,122    3,766,254    3,794,964
                      =========    =========    =========    =========


Capital and reserves

Called up share         870,000      870,000      870,000      870,000
capital

Share premium         2,923,600    2,927,487    2,923,600    2,927,487
account

Profit and loss        (135,858)      50,635      (27,346)      (2,523)
account
                      ________     ________     ________     ________

Shareholders' funds
- equity interests    3,657,742    3,848,122    3,766,254    3,794,964
                     ==========   ==========   ==========   ==========


CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2003

                                      2003                    2002

                                 £           £           £           £



Net cash inflow from                    26,044                  60,299
operating activities



Returns on investments
and servicing of
finance

Interest received           22,598                   2,083

Interest paid                    -                     (99)
                          ________                ________



Net cash inflow for
returns on investments
and servicing of
finance                                 22,598                   1,984



Taxation                               (59,373)                      -



Capital expenditure and
financial investment

Payments to acquire       (280,723)                (57,837)
tangible assets

Receipts from sales of       5,000                       -
tangible assets

Costs associated with            -                (144,212)
acquisition of
subsidiary
                          ________                ________



Net cash outflow for                  (275,723)               (202,049)
capital expenditure
                                      ________                ________

Net cash outflow before
management of liquid
resources and
financing                             (286,454)               (139,766)



Management of liquid
resources

Bank deposits                           79,290                (635,000)



Financing

Net proceeds from issue
of ordinary share
capital                          -                 797,487

Cash acquired from               -                 190,172
subsidiary undertaking

Expenses relating to        (3,887)                      -
issue of share capital
                          ________                ________



Net cash (outflow)/                     (3,887)                987,659
inflow from financing
                                      ________                ________



(Decrease)/increase in                (211,051)                212,893
cash in the year
                                      ________                ________
                                      ========                ========

Notes

 1. Statutory accounts

    The financial information presented does not constitute statutory accounts
    as defined in Section 240 of the Companies Act 1985. The comparitive results
    have been extracted from the audited accounts of the Company for the period
    31 October 2001 to 30 June 2002.

 2. Earnings per ordinary share

    Basic earnings per share are calculated using a weighted average of
    174,000,000 (2002: 43,500,000) ordinary shares in issue during the year.
    Diluted earnings per share are calculated assuming conversion of all
    outstanding dilutive share options and warrants. These adjustments give rise
    to an increase in weighted average ordinary shares of 38,100,000 (2002:
    10,025,000).

 3. Dividends

    It is not proposed to pay a dividend for the year ended 30 June 2003.

 4. Annual General Meeting

    The Annual General Meeting of the Company will be held at 25-27 Riding House
    Street, London W1W 7DU on 22 December 2003 at 10.30 a.m.





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