Interim Results

Comeleon PLC
27 June 2001


FOR IMMEDIATE RELEASE                                              27 JUNE 2001



Press Briefing today starting 11.30am at Buchanan Communications, 107
Cheapside, EC2v


                          UNAUDITED INTERIM RESULTS

                    for the six months ended 31 March 2001


              2000/2001; Growth and development of the business


Comeleon plc is pleased to announce its unaudited interim results for the six
months ended 31st March 2001.


Following its successful flotation on the Alternative Investment Market in
December 2000, Comeleon has built production infrastructure, established
cornerstone agreements with leading mobile phone producers and has established
its sales channels. These results only cover three months of trading since its
flotation, but already a pattern of impressive development can be seen.



Key Points:


*  Sales to 31st March - £56,000

*  Sales and Order book at June - £150,000

*  Loss to 31st March - £1.3m

*  Key approvals gained:
   Nokia, Motorola, Siemens and Sendo

*  New building occupied.

*  Production facility installation on schedule.

*  E-commerce development:
   50 dealers transacting on-line

*  Recruitment proceeding well



Jon Pither, Chairman, said: 'The past six months have afforded positive growth
and development for the company.  At the half year we are 'on plan' having
achieved the financial and business development targets set for the company.



For further information, please contact:


Roy Stanley                                             Today on: 020 7466 5000
Comeleon plc                                        Thereafter on :01207 523309
Investors Relations Web Page Launched Today               www.comeleon-ir.co.uk


Tim Anderson
Lisa Baderoon
Buchanan Communications Limited                           Tel No: 0207 466 5000



                             CHAIRMAN'S STATEMENT


In December 2000 the group successfully raised £9.4 million through an AIM
listing on the London Stock Exchange to fund its growth and development. The
past six months have seen the initial period of growth in sales and orders
that were anticipated in the company's business plan. Sales were £56,279 and
the loss for the period was £(1,291,828).



There has been an increase in the number of original equipment manufacturers,
Nokia, Motorola, Siemens and Sendo, bringing products to market with
interchangeable covers. The level of interest within the consumer electronics
market for the e-comeleon technology is high, reflected by the significant
increase in the level of order enquires.  We continue to focus on our
short-term goal of becoming the imaging partner of choice for the major mobile
telephone manufacturers. Following quality approval, contract negotiations
with several major manufacturers are well in hand which will allow branded
product to be sold to the retail market. These contracts are planned to form
the base of e-comeleon's penetration into the replaceable covers market for
mobile phones and we are now working with several manufacturers on new
products due to be launched into the market over the coming months.



Our short-term sales strategy of targeting the existing market for approved
mobile phone covers so that we can generate revenue rapidly has been largely
achieved.  Over the next 18 months our aim is to cover a much wider range of
products such as electronic organisers and computer peripherals. Having
secured this firm sales base, our objective is to become the imaging partner
of choice for manufacturers of a wide range of electronic devices, either the
big name producers or their injection moulding suppliers.



In addition, the group is about to sign a licensing agreement that allows it
the use of images of popular entertainers and personalities. This agreement is
based upon an arrangement where there is no up front payment nor guaranteed
volumes for the rights to use the images but is based upon a shared revenue
arrangement. It is expected that this will enhance the appeal of products in
the retail market and help to consolidate the e-comeleon brand.



The group continues to increase and improve its manufacturing capacity in line
with its development plans.  The range of designs offered by the company and
the exclusive nature of a significant number of these designs mean that we are
well placed in providing a significant value added proposition.



Board Changes



During the period the Board of Comeleon plc was strengthened by the
appointment of Dr John Bridge (Chairman of One North East), and Mr Steven Bell
(Managing Director of Student Mobile, a division of Carphone Warehouse), as
Non Executive Directors.



Operating Review



There have been several enhancements to the e-comeleon technology that have
further improved the flexibility and the cost base of the process. We are
committed to further develop the process in order to maintain its technical
lead in the market.



We are continuing to invest in the existing production facility and in March
took occupation of our new Headquarters based at Tanfield Lea, County Durham,
with 40,000 square feet of shop floor space. Production processes are now
being installed in the new building.  It is expected that the enhancements to
the process mean that the capital costs associated with increasing capacity
will be significantly less than planned.  We now have the capacity to
manufacture 10,000 units per week, which will rise to 30,000 by September.



We have successfully recruited a number of key production, engineering and
sales staff to build our growth capability.  There are currently 45 staff on
the payroll in total.



The group aims to establish a technical and service facility in the USA during
2001/02 in order to take advantage of the significant opportunities in the
North American market.



Development of the company web site has progressed well. There have been
private areas created for a number of original equipment manufacturers. We
have developed an interactive design studio (IDS), which allows consumers to
upload their own images.  E-comeleon can use these to place designs onto
products. The IDS is being Beta tested by a major manufacturer.



The group is transacting commercially across the web with over 50 dealers
registered online. A number of Hotlinks are being established with major
accessories retailers, allowing consumers to visit our web site. It is
anticipated that in the next three months this capability will lead to
consumers trading directly with the group.



Prospects



The response from the market to the capability and flexibility of the
e-comeleon process has been very encouraging. The business opportunities
available to us are significant and the management team are determined to stay
focused on the goal of increasing revenues and thus create shareholder value.



COMELEON PLC

CONSOLIDATED PROFIT AND LOSS ACCOUNT


                                                        Unaudited     Unaudited
                                                       Six Months    Six Months
                                                            Ended         Ended
                                                         31 March      31 March
                                                             2001          2000
                                              Note              £             £

TURNOVER: continuing operations                            56,279             -
Cost of sales                                           (159,079)             -

Gross loss                                              (102,800)             -

Administrative expenses                                 (972,268)      (12,557)
Exceptional Administrative expenses             2       (250,000)             -
Total Administrative expenses                         (1,222,268)      (12,557)
Research and development costs                           (74,039)      (33,807)

OPERATING LOSS: continuing operations                 (1,399,107)      (46,364)

Interest received and similar income                      115,813             -
Interest payable and similar charges                      (8,534)             -

LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION                                       (1,291,828)      (46,364)

Tax on loss on ordinary activities              3               -             -

LOSS FOR THE FINANCIAL PERIOD
WITHDRAWN FROM RESERVES                               (1,291,828)      (46,364)


Earnings per share                              4        (14.09p)     (762.57p)

Diluted earnings per share                      4        (13.46p)     (762.57p)

Earnings per share before exceptional costs     4        (11.36p)     (762.57p)



COMELEON PLC
CONSOLIDATED BALANCE SHEET


                                                          Unaudited   Unaudited
                                                              as at       as at
                                                           31 March    31 March
                                                               2001        2000
                                                                            (as
                                                                      restated)
                                                  Note            £          £

FIXED ASSETS
Tangible assets                                             856,775      55,966
Intangible assets                                           819,981      30,062
                                                          1,676,756      86,028

CURRENT ASSETS
Debtors                                                     152,739      11,600
Cash at bank and in hand                                  5,944,329      11,319
                                                          6,097,068      22,919

CREDITORS: amounts falling due
within one year                                           (578,773)   (143,991)

NET CURRENT ASSETS/ (LIABILITIES)                         5,518,295   (121,072)

TOTAL ASSETS LESS CURRENT LIABILITIES                     7,195,051    (35,044)

CREDITORS: amounts falling due after more than
one year
Obligations under finance leases                          (186,165)           -

                                                          7,008,886    (35,044)

CAPITAL AND RESERVES
Called up share capital                                     126,613      11,359
Share premium                                             8,589,543           -
Merger Reserve                                              614,719
Profit and loss account                                 (2,321,989)    (46,403)

TOTAL EQUITY SHAREHOLDERS' FUNDS                          7,008,886    (35,044)



COMELEON PLC
CONSOLIDATED CASH FLOW STATEMENT


                                                           Unaudited  Unaudited
                                                          Six Months Six Months
                                                               Ended      Ended
                                                            31 March   31 March
                                                                2001       2000
                                                 Note              £          £


Net cashflow from operating activities             5     (1,333,374)   (14,087)

Return on investments and servicing of finance               104,222          -

Capital expenditure                                        (506,626)   (70,727)

Cash outflow before financing                            (1,735,778)   (84,814)

Financing                                                  7,233,961     96,132

Increase in cash                                           5,498,183     11,318



Reconciliation of net cash flow to movement in net debt



Increase in cash in the period                              5,498,183    11,318
Cash outflow/(inflow) from decrease/(increase) in           1,423,870  (84,813)
debt
Change in debt resulting from cashflows                     6,922,053  (73,495)
New finance leases                                          (220,785)         -
                                                            6,701,268  (73,495)

Net (debt)/funds at 1 October 2000 / 1999                 (1,021,790)         1

Net funds/(debt) at 31 March 2001 / 2000                    5,679,478  (73,494)



Notes



1.      Basis of preparation


The interim financial statements, which have been neither audited nor reviewed
by the auditors, have been prepared on the basis of the accounting policies
set out in the Comeleon plc prospectus for the period ended 30 September 2000.
Pursuant to the listing the directors have adopted further accounting
policies for investments and goodwill.


The significant accounting policies upon which the interim results are based
are as follows:



Accounting Convention



The financial statements have been prepared under the historical cost
convention.



Consolidation



The consolidated financial statements incorporate the financial statements of
the company and all its subsidiaries.



Investments



Investments held as fixed assts are stated at cost less provision for any
impairment.



Goodwill



For acquisitions of a business purchased goodwill is capitalised in the year
in which it arises and amortised over its useful life up to a maximum of 20
years.  The directors regard 20 years as a reasonable maximum for the
estimated useful life of the goodwill since it matches the life of patents
held by the company.



Capitalised purchased goodwill in respect of subsidiaries is included within
intangible fixed assets.



Tangible fixed assets



The cost less residual value of fixed assets is depreciated in equal
instalments over the expected useful economic lives of the assets at the
following rates:


Short leasehold property                                        5 years
Plant and machinery                                             5 years
Fixtures, fittings and equipment                                5 years



Comparatives



The figures for the six months ended 31 March 2000 have been extracted from
the audited E-Comeleon Limited Accounts for the period 19 August 1999 to 31
March 2000 adjusted for the notional 1,135,900 shares issued to acquire the
subsidiary company. These accounts, which contained an unqualified auditors'
report, have been delivered to the Registrar of Companies.



The interim financial statements do not constitute statutory accounts within
the meaning of S240 of the Companies Act and have not been delivered to the
Registrar of Companies.

2.      Exceptional Administrative Expenses



£250,000 of the costs incurred in relation to the flotation of the group on
the London Stock Exchange have been recognised in the profit and loss account
in accordance with Financial Reporting Standard (FRS) 4.



3.      Taxation



The tax charge in the period is based on the anticipated effective rate of tax
for the year ended 30 September 2001.



4.      Earnings per share



Earnings per share have been calculated using the weighted average number of
shares in issue during the relevant financial periods.  The weighted average
number of shares in issue is 9,171,630(2000 : 6,080), and the earnings, being
loss on ordinary activities after taxation are £ 1,291,828(2000 : £46,364).



Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares in issue on the assumption of conversion of all
dilutive potential ordinary shares. Dilutive potential ordinary shares
comprise the difference between the number of shares subject to share options
and the number of shares that would have been issued at estimated average fair
values in each period.  The resulting adjusted average number of shares was
9,596,183(2000 : 6,080).



Earnings per share before exceptionals have been calculated using a loss on
activities after taxation of £1,041,828 (2000 : £46,364).  This has been
presented in addition to the basic earnings per share as permitted by FRS 3
and FRS 14 since, in the opinion of the directors, this presents a better like
for like comparison of earnings of the Group.



5.      Net cash outflow from operating activities


                                                                     
                                                 Unaudited    Unaudited
                                                Six Months   Six Months
                                                     Ended        Ended
                                                  31 March     31 March
                                                      2001         2000
                                                         £            £
        Operating loss                         (1,399,107)     (46,364)
        Depreciation                                49,950        3,441
        Increase in debtors                      (114,594)     (11,600)
        Increase in creditors                      130,377       40,436
        Cash flow from operating activities    (1,333,374)     (14,087)


6.      Financial Information



Copies of this report are being forwarded to all shareholders and further
copies are available from the Company's Registered Office at Comeleon House,
North Tanfield Industrial Estate, Tanfield Lea, Co Durham. DH9 9NX.