Final Results

Cheerful Scout PLC
24 September 2004


                               CHEERFUL SCOUT PLC
                                 FINAL RESULTS

Cheerful Scout plc, the AIM listed multi media specialist, announces its results
for the year ended 30 June 2004.

Overview:

   • Difficult year with challenging trading conditions
   • Heavy investment in new technology
   • Strengthening the team with the appointments of a new senior corporate
     producer and a new sales and development director
   • Pre tax loss of £249,636 ( 2003 - loss £69,242 ) before goodwill
     amortisation
   • Unique new communications product to be launched in autumn - nVision

Chairman's Statement

This has been a difficult year with challenging trading conditions. However we
have spent this time constructively, redeploying our resources and capabilities
and developing new products. This autumn we are launching a unique and highly
innovative communications product followed by the roll-out of a high end
corporate visualisation tool later in the year. We believe that these, coupled
with ongoing demand in the DVD division, will mark a turnaround point for the
Company.

The results for the year ended 30 June 2004 show pre-tax losses of £249,636
(2003: loss of £69,242) before goodwill amortisation, on turnover of £607,042
(2003: £733,347).

The increased loss was largely due to a decision to step up our investment in
technology to maintain our position in what is a competitive market place.
Approximately £175,000 is carried in the balance sheet as the cost of
development.

During the year, we won a number of prestigious accounts which we have continued
to develop and where we see potential for further growth. We recognise the need
to invest in high quality management to take the Company to its next stage and
have therefore appointed a new senior corporate producer who has produced a
number of award winning programmes for a wide range of blue-chip clients. In
addition, we have appointed a new sales and development director.

In view of the results, the board feels it is important to give shareholders a
clear understanding of the business and why it believes our new product -
nVision - will have a successful future.

Cheerful is a full service production company. We use video, film, web or DVD to
translate a customer's message into a compelling programme. Our full range of
in-house facilities ensures we can maintain the kind of quality we believe in.
We do not erect barriers - if the editor has an idea for the graphics or the
graphics director has an idea for the script or the customer has an idea for the
film shoot then we want to hear it. Our core business is focussed on two
specific areas:

   • Programme production: produces entire projects, working with clients
     from initial ideas through scripting, creative development, shoots, graphic
     design and post production. Clients include Allen & Overy, Getronics, the
     Children's Family Trust and a leading management consultancy.
   • DVD: Cheerful, which was among the first to invest in DVD, has one of
     the most talented and innovative design and commissioning teams in the UK
    (voted one of the top new media makers by Televisual magazine in 2003). It
     has delivered more than 300 DVD projects to date, from classic television 
     to feature films, animated classics and corporate work including high 
     profile series such as Cutting It, Bad Girls, Footballers Wives and Spooks.

As pioneers in visual technologies, Cheerful fully exploits its expertise in new
technology and constantly develops new ideas to push the boundaries of on-screen
visual communication - resulting in our latest pioneering development, 'nVision
technology'.

The first product, nVision Presenter, is the next generation in presentation
software, providing the seamless and high speed integration of several live
event elements. The first clients have enthusiastically adopted this innovative
state of the art presentation tool and we believe it will generate considerable
interest and bookings when it is officially launched in autumn 2004.

The package will include a high end strategic version, nVision Strategy,
focussed at management consultants and more sophisticated organisations which
require complex problem solving tools. We believe the powerful visualisation
capabilities of nVision Strategy will allow clients to show a picture of complex
ideas and numbers, and provide a real time interactive system for board level
strategic planning.

Combining state of the art software with compelling visual capabilities means
that an nVision system can be incorporated into major management exercises and
strategic planning. This could help save millions of pounds of management time,
and help speed both decision making and corporate communications.

We are confident nVision technology will place Cheerful Scout at an advantage as
we compete in our crowded and creative industry. We believe nVision will
demonstrate that Cheerful is both different and individual, as we deliver a
complete communications solution to a wider range of clients.

We believe that our performance disappointments are now behind us. We anticipate
that with a stronger team in place and by combining our core business activities
with the new nVision technology, we are better placed to achieve our performance
targets in the years ahead.

S Appleton
Chairman
24 September 2004

CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 30 JUNE 2004

                                    2004                                   2003
                     Pre goodwill   Goodwill        Total   Pre goodwill   Goodwill       Total
                     amortisation   amortisation            amortisation   amortisation
                                £           £           £           £              £          £

Turnover

Continuing
operations                607,042           -     607,042     733,347              -    733,347

Cost of
sales                    (431,842)          -    (431,842)   (398,572)             -   (398,572)
                         ________    ________    ________    ________       ________   ________

Gross profit              175,200           -     175,200     334,775              -    334,775

Administrative
expenses                 (446,027)   (136,415)   (582,442)   (426,615)      (136,415)  (563,030)

Operating                ________    ________    ________    ________       ________   ________
profit/(loss)     

Continuing
operations               (270,827)   (136,415)   (407,242)    (91,840)      (136,415)  (228,255)

Other interest
receivable and
similar
charges                    21,284           -      21,284      22,598              -     22,598

Interest
payable and
similar
charges                       (93)          -         (93)          -              -          -

Profit/(loss)            ________    ________    ________    ________       ________   ________
on ordinary
activities
before
taxation                 (249,636)   (136,415)   (386,051)    (69,242)      (136,415)  (205,657)

Tax on profit
on ordinary
activities                 16,946           -      16,946      19,164              -     19,164
                         ________    ________    ________    ________       ________   ________
Retained
(loss) for the
year                                             (369,105)                             (186,493)

Earnings per                                     ________                              ________
ordinary 
shares:

Basic                                           (0.205474)p                              (0.107)p
                                                 ________                              ________
Diluted
                                                (0.205474)p                              (1.107)p
                                                 ________                              ________


BALANCE SHEETS
AS AT 30 JUNE 2004

                                          Group                   Company
                                     2004        2003        2004        2003
Fixed assets                            £           £           £           £
Intangible assets               2,611,152   2,569,141           -           -
Tangible assets                   294,136     402,684           -           -
Investments                             -           -   3,144,213   3,144,212
                                 ________    ________    ________    ________

                                2,905,288   2,971,825   3,144,213   3,144,212
                                 ________    ________    ________    ________
Current assets
Debtors                           226,369     244,818     259,893      68,161
Stock                               1,472       1,338           -           -
Cash at bank and in hand          585,982     557,552     612,454     554,181
                                 ________    ________    ________    ________

                                  813,823     803,708     872,347     622,342
Creditors: amounts falling due
within one year                  (137,655)   (100,845)     (5,951)       (300)
                                 ________    ________    ________    ________

Net current assets                676,168     702,863     866,396     622,042
                                 ________    ________    ________    ________
Total assets less current
liabilities                     3,581,456   3,674,688   4,010,609   3,766,254

Provisions for liabilities and
charges                                 -     (16,946)          -           -
                                 ________    ________    ________    ________

                                3,581,456   3,657,742   4,010,609   3,766,254
                                 ________    ________    ________    ________


Capital and reserves
Called up share capital         975,000     870,000     975,000     870,000
Share premium account         3,111,419   2,923,600   3,111,419   2,923,600
Profit and loss account        (504,963)   (135,858)    (75,810)    (27,346)
                               ________    ________    ________    ________
Shareholders' funds - equity
interests                     3,581,456   3,657,742   4,010,609   3,766,254
                               ________    ________    ________    ________


CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 JUNE 2004

                                                2004                  2003
                                            £          £          £          £

Net cash (outflow)/inflow from
operating                                        (71,311)               26,044
activities

Returns on investments and servicing
of finance
Interest received                      21,284                22,598
Interest paid                             (93)                    -
                                     ________              ________

Net cash inflow for returns on
investments and                                   21,191                22,598
servicing of finance

Taxation                                          17,375               (59,373)

Capital expenditure and financial
investment
Payments to acquire intangible       (178,426)             (280,723)
assets
Payments to acquire tangible assets   (53,235)                    -
Receipts from sales of tangible             -                 5,000
assets
                                     ________              ________

Net cash outflow for capital                    (231,661)             (275,723)
expenditure
                                                ________              ________
Net cash outflow before management
of liquid                                       (264,406)             (286,454)
resources and financing

Management of liquid resources
Bank deposits                                          -                79,290

Financing
Net proceeds from issue of ordinary   301,875                     -
share capital
Expenses relating to issue of share    (9,056)               (3,887)
capital
                                     ________              ________

Net cash (outflow)/inflow from                   292,819                (3,887)
financing
                                                ________              ________

Increase/(Decrease) in cash in the                28,413              (211,051)
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 year ended 30
June 2003.

2.      Earnings per ordinary share

Basic earnings per share are calculated using a weighted average of 186,250,000
(2003: 174,000,000) ordinary shares in issue during the year.

3.      Dividends

It is not proposed to pay a dividend for the year ended 30 June 2004.

4.      Annual General Meeting

The Annual General Meeting of the Company will be held at 25-27 Riding House
Street, London W1W 7DU on 1 November 2004 at 10.30 a.m.



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