Interim Results

Cheerful Scout PLC
07 March 2006

          Cheerful Scout plc / Epic: CLS / Index: AIM / Sector: Media

7 March 2006

                Cheerful Scout plc ('Cheerful' or 'the Company')
                                Interim Results

Cheerful Scout plc, the AIM listed multi media specialist, announces its interim
results for the six months ended 31 December 2005.

Overview

•        Turnover more than doubled to £1,120,320 (2004: £512,343)

•        Pre-tax profits of £73,903 (2004: loss of £133,886)

•        Cash at bank and in hand of £852,030 (2004: £405,463)

•        Cancellation of Share Premium account eliminates the negative balance
on the Revenue Account, paving the way for dividends to be paid from future
profits

•        Corporate and entertainment markets regaining momentum

•        Blue-chip client relationships stable and potential for increased
activity from long standing contacts

•        nVision Presenter increasingly used by organisers of live events for
major companies in conjunction with dedicated events team

•        nVision Strategy launched - working with a visualisation company that
deals in strategy for large retail corporates to develop the product further

•        New business opportunities positive



Chairman's Statement

This has been a strong period for Cheerful where we have made very good progress
in expanding our activity level. The Company has seen a marked improvement in
the overall performance of the business which has translated into a resolute
strengthening in its financial position. Although the business climate has
remained competitive, your Company has benefited from an improvement in
confidence within the media sector and demand for all its divisions' products.
Significantly, the corporate and entertainment markets are regaining momentum
and increasingly turning to sophisticated visual, audio, lighting and staging
techniques - all areas where Cheerful excels.

Financial Review

Our financial performance has improved dramatically with turnover during the
period more than doubled to £1,120,320 (2004: £512,343) thanks to a considerable
number of new blue-chip contract wins in our production business.

As a consequence, we are pleased to announce a profit on ordinary activities
before taxation of £73,903 for the six months ended 31 December 2005 compared
with a loss of £133,886 for the corresponding six month period of 2004.  The
Company has a healthy cash position with cash at bank and in hand of £852,030
(2004: £405,463).

Post Balance Sheet Events

We are also pleased to confirm that the High Court of Justice, Chancery Division
confirmed the cancellation of the Company's Share Premium account on 15 February
2006.  As a consequence, the negative balance on the Company's Revenue Account
will be eliminated and this will pave the way for dividends to be paid from
future profits.

Operations

Our production division, which builds entire projects such as Risk Management
Training Tools for corporate clients, and DVD production for the retail sector
including front end menu and navigation systems, remains a cornerstone of the
Company.  Our major client relationships remain stable and there is potential
for increased activity from our long standing contacts.

The whole team's desire for ongoing success means the drive for new business
continues and we are seeing an increase in the number of opportunities that we
are being invited to pitch for.  Importantly we have invested substantially in
training our team and on the back of this we believe we now possess one of the
most talented and innovative design and commissioning teams in the UK.

While the core production business is performing well, the market is also
embracing our new nVision products.  nVision Presenter, the high-end
presentation software package which provides the seamless and high speed
integration of several live event elements, is being increasingly used by
organisers of live events for major companies in conjunction with our dedicated
events team.

Furthermore, nVision Strategy, which is focussed at organisations requiring
complex problem solving tools, has now also been launched and is also beginning
to make inroads into the market.

Ongoing development is necessary to address the different markets requirements.
In this respect I am pleased to report that we are working with a visualisation
company that deals in strategy for large retail corporates to grow the product
further.

Additionally, the opportunities for further expansion through acquisitions that
enhance the services that Cheerful Scout can offer its clients are constantly
being reviewed.

Prospects

New business opportunities remain positive, especially with regards to the
n-Vision products and services.  We have a team in place with the ability to
grow the business organically and I am confident that Cheerful Scout is now
positioned to increase the value of its business and enhance shareholder value.
Finally, I would like to thank the staff for all their efforts over the last six
months and hope that their continued enthusiasm will help Cheerful Scout achieve
its long term ambitions.

Stuart Appleton
Chairman
7 March 2006






Profit & Loss Account
For The Six Months Ended 31 December 2005


                          Unaudited                       Unaudited                             Audited
              6 months to 31 December 2005        6 months to 31 December 2004           Year to 30 June 2005

         Pre goodwill     Goodwill           Pre goodwill     Goodwill       Total Pre goodwill     Goodwill       Total
         amortisation amortisation     Total amortisation amortisation             amortisation amortisation
                  and          and                    and          and                      and          and
           impairment   impairment             impairment   impairment               impairment   impairment
                    £            £         £            £            £           £            £            £           £

Turnover    1,120,320            - 1,120,320      512,343            -     512,343      898,492            -     898,492

Cost of 
sales        -739,820            -  -739,820     -271,836            -    -271,836     -631,550            -    -631,550

Gross Profit  380,500            -   380,500      240,507            -     240,507      266,942            -     266,942

Adminis-
trative
expenses     -310,526      -12,738  -323,264     -315,049      -68,207    -383,256     -504,071     -136,415    -640,486

Operating      69,974      -12,738    57,236      -74,542      -68,207    -142,749     -237,129     -136,415    -373,544
Profit/(Loss)

Exceptional         
item                -            -         -            -            -           -            -   -1,867,467  -1,867,467
   
Interest       
received       16,667            -    16,667        8,863            -       8,863       17,268            -      17,268
                     
Interest                                                                                     
payable             -            -         -            -            -           -           -4            -          -4

Profit/(Loss)  
on ordinary
activities
before 
taxation       86,641      -12,738    73,903      -65,679      -68,207    -133,886     -219,865   -2,003,882  -2,223,747

Tax on Profit/                                                                           
(Loss) on               
Ordinary
Activities          -            -         -            -            -           -       54,000            -      54,000

Retained Profit                       
/(Loss) for the
Period                                73,903                              -133,886                            -2,169,747

Earnings per
ordinary Shares
- Basic                             0.035616p                           (0.068659)p                          (1.045661)p

- Diluted                           0.035616p                           (0.068659)p                          (1.045661)p
                                                                                                                        

Consolidated Balance Sheet
As At 31 December 2005


                                                                            
                                                     Unaudited              Unaudited             Audited
                                              31 December 2005       31 December 2004        30 June 2005
                                                             £                      £                   £

Fixed assets
Intangible assets                                      741,726              2,628,823             799,135
Tangible assets                                        174,549                272,747             212,152

                                                       916,275              2,901,570           1,011,287

Current assets
Debtors                                                379,287                246,043             295,946
Stock                                                    2,094                  1,516               1,211
Deposits and cash at bank & in hand                    852,030                405,463             721,757

                                                     1,233,411                653,022           1,018,914

Creditors:
Amounts falling due within one year                  (165,324)              (107,022)           (119,742)

Net current assets                                   1,068,087                546,000             899,172

Total assets less current liabilities                1,984,362              3,447,570           1,910,459

Capital & reserves

Share capital                                        1,225,000                975,000           1,225,000
Share premium                                        3,360,169              3,111,419           3,360,169
Profit & loss account                              (2,600,807)              (638,849)         (2,674,710)

Shareholders' funds                                  1,984,362              3,447,570           1,910,459


The accounts were approved by the board on 7 March 2006 and signed on its
behalf:-


P Litten                          N J Newman
Director                          Director



Consolidated Cash Flow Statement
For The Period Ended 31 December 2005

                                                      Unaudited 6 months     Unaudited 6 months      Audited Year
                                                     to 31 December 2005    to 31 December 2004   to 30 June 2005
                                                                       £                      £                 £

Net cash inflow/(outflow) from operating                         133,615               (58,202)         (136,242)
activities

Returns on investments and servicing of finance
Interest received                                                 16,667                  8,863            17,268

Interest paid                                                          -                      -               (4)

Net cash inflow for returns on investments and                    16,667                  8,863            17,264
servicing of finance
Taxation                                                               -                      -                 -

Capital expenditure and financial investment
Payments to acquire intangible assets                                  -               (85,878)         (191,865)
Payments to acquire tangible assets                             (20,009)               (45,285)          (52,115)

Net cash outflow for capital expenditure                        (20,009)              (131,163)         (243,980)

Net cash inflow/(outflow) before management of
liquid resources and financing                                  130,273              (180,502)          (362,958)

Financing
Net proceeds from issue of ordinary share                              -                      -           525,000
capital
Expenses relating to issue of share capital                            -                      -          (26,250)

Net cash inflow from financing                                         -                      -           498,750

Increase/(decrease) in cash in the year                          130,273              (180,502)           135,792


Notes To The Financial Statements
For The Six Months Ended 31 December 2005

1            FINANCIAL INFORMATION

The interim results for the six months ended 31 December 2005 are un-audited and
do not constitute accounts within the meaning of section 240 of the Companies
Act 1985.  They have been drawn up using accounting policies and presentation
consistent with those applied in the audited accounts for the year ended 30 June
2005.  A copy of the 2005 Accounts have been filed with the Registrar of
Companies. The Auditors opinion on these Accounts was unqualified.

2            EARNINGS PER ORDINARY SHARES

Basic earnings per share are calculated using the weighted average of
207,500,000 (2004: 195,000,000) Ordinary Shares in issue during the period.

3            RESPONSIBILITY

The directors of the company accept responsibility for the information contained
in this document and to the best of their knowledge and belief (having taken all
reasonable care to ensure that such is the case) the information contained is in
accordance with the facts and does not omit anything to affect the import of
such information.

Copies of this report are available to the public at the registered office at 65
New Cavendish Street, London W1G 7LS.

4            DIVIDEND

             No interim dividend is declared on the ordinary shares.

                                              Unaudited 6 months to  Unaudited 6 months to        Audited Year to
                                                   31 December 2005       31 December 2004           30 June 2005
                                                                  £                      £                      £

5   Reconciliation of operating profit/
    (loss) tonet cash inflow from operating
    activities
    Operating profit/(loss)                                  57,236              (142,749)              (373,544)
    Depreciation of tangible assets                         102,283                 66,674                134,099
    Amortisation of intangible assets                        12,738                 68,207                136,415
    Increase/(decrease) in debtors                         (83,341)               (19,674)               (15,577)
    (Increase)/decrease in creditors within                   
    one year                                                 45,582               (30,616)               (17,896)
    Decrease/(increase) in stock                              (883)                   (44)                    261
    Net cash inflow/(outflow) from operating                133,615               (58,202)              (136,242)
    activities

6   Analysis of net funds                            At 1 July 2005              Cash Flow    At 31 December 2005
                                                                  £                      £                      £

    Net cash:
    Cash at bank and in hand                                      -                  5,727                  5,727

    Liquid resources:
    Bank deposits                                           721,757                124,546                846,303

    Net funds                                               721,757                130,273                852,030


                                              Unaudited 6 months to  Unaudited 6 months to        Audited Year to
                                                   31 December 2005       31 December 2004           30 June 2005
                                                                  £                      £                      £
7   Reconciliation of net cash flow to
    movement in net funds

    Increase/(decrease) in cash in the                        5,727               (16,677)                 26,087
    year
    Cash (outflow)/inflow from movement in
    liquid resources                                        124,546              (163,825)                109,705

    Change in net funds resulting from
    cash flows                                              130,273              (180,502)                135,792
                                                            
    Movement in the net fund in the year                    130,273              (180,502)                135,792

    Opening net funds                                       721,757                585,965                585,965

    Closing net funds                                       852,030                405,463                721,757



Contacts:

Gary Fitzpatrick                     Cheerful              Tel: [phone]
Isabel Crossley                      St Brides Media       Tel: [phone]


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