Interim Results

Cheerful Scout PLC
29 March 2005



                               CHEERFUL SCOUT PLC
                              CHAIRMAN'S STATEMENT
                   FOR THE SIX MONTHS ENDED 31 DECEMBER 2004

Cheerful Scout plc, the AIM listed multi media specialist, announces its results
for the six months ended 31 December 2004.

Overview

   • Turnover more than doubled to £512,343 (2003: £252,142)
   • EBITDA loss of £7,868 (2003: loss of £89,683)
   • Core business profitable
   • New blue-chip clients signed up across all divisions
   • Company now on Government tender lists
   • nVision Presenter launched and begins to make breakthrough
   • Ongoing product development with a second nVision product to be launched
    later this year

Chairman's Statement

The Company has made huge strides over the last few months in growing the core
business - DVD for the retail sector, and corporate communications, producing
programmes for blue-chip clients. Furthermore, we continue to develop new
innovative products which will ensure our position as a market pioneer.

Our turnover during the period more than doubled to £512,343 (2003: £252,142)
thanks to a considerable number of new blue-chip contract wins in our production
business.

The DVD side of the business has already delivered more than 300 projects to
date, from classic television to feature films, animated classics and corporate
work. On the back of this, we believe we now possess one of the most talented
and innovative design and commissioning teams in the UK.

We believe it is essential to continue to invest in new technology in order to
maintain our position in what is becoming an increasingly competitive market
place. The costs involved in research and development impacted on the financial
statements in the first half.

The highlight of the period was the launch of a new high-end presentation tool,
nVision Presenter. Our sales team has concentrated on launching the product to
organisers of live events for major companies. The system delivers real-time 3D
graphics and provides an impressive widescreen platform that brings together all
manner of visual media on one highly impressive 'virtual stage'.

Unlike other products in the market, it has the power to render graphics in
real-time and thus allows for all kinds of interactive opportunities. Initial
feedback has all been extremely positive.



We remain optimistic about the potential of nVision and anticipate it making a
growing contribution to revenues in the months ahead. Furthermore, we hope to
launch a second nVision product later this year that takes the technology to
another level and into a different market sector.

Stuart Appleton
Chairman

24 March 2005

                               CHEERFUL SCOUT PLC
                                INTERIM RESULTS
                   FOR THE SIX MONTHS ENDED 31 DECEMBER 2004

               Unaudited                          Unaudited                          Audited
               6 months to 31 December 2004       6 months to 31 December 2003       Year to 30 June 2004

               Pre goodwill  Goodwill      Total  Pre goodwill  Goodwill      Total  Pre goodwill  Goodwill      Total
               amortisation  amortisation         amortisation  amortisation         amortisation  amortisation
                    £             £          £          £            £          £          £            £          £

Turnover         512,343          -       512,343    252,142         -       252,142    607,042         -       607,042

Cost of sales   (271,836)         -      (271,836)  (132,437)        -      (132,437)  (431,842)        -      (431,842)

Gross Profit     240,507          -       240,507    119,705         -       119,705    175,200         -       175,200

Administrative
expenses        (315,049)     (68,207)   (383,256)  (289,128)     (68,207)  (357,335)  (446,027)    (136,415)  (582,442)

Operating
(Loss)          (74,542)      (68,207)   (142,749)  (169,423)     (68,207)  (237,630)  (270,827)    (136,415)  (407,242)

Interest
received          8,863           -        8,863      8,360          -        8,360     21,284          -        21,284

Interest 
payable            -              -          -          -            -          -        (93)           -         (93)

(Loss) on ordinary
activities 
before
taxation        (65,679)      (68,207)   (133,886)  (161,063)     (68,207)  (229,270)  (249,636)    (136,415)  (386,051)

Tax on (loss)
on ordinary 
Activities         -              -          -          -            -          -       16,946          -        16,946

Retained
(Loss) for the
Period                                   (133,886)                          (229,270)                          (369,105)

Earnings per
ordinary 
Shares - Basic                           (0.0687)p                          (0.1292)p                          (0.1982)p
       - Diluted                         (0.0679)p                          (0.1292)p                          (0.1982)p




                               CHEERFUL SCOUT PLC
                           CONSOLIDATED BALANCE SHEET
                             AS AT 31 DECEMBER 2004

                                          Unaudited      Unaudited     Audited
                                        31 December    31 December     30 June
                                               2004           2003        2004
                                                  £              £           £

Fixed assets
Intangible assets                         2,628,823      2,500,935   2,611,152
Tangible assets                             272,747        398,387     294,136

                                          2,901,570      2,899,322   2,905,288

Current assets
Debtors                                     246,043        181,126     226,369
Stock                                         1,516            957       1,472
Deposits and cash at bank & in hand         405,463        754,766     585,965

                                            653,022        936,849     813,806

Creditors:
Amounts falling due within one year        (107,022)       (97,934)   (137,638)

Net current assets                          546,000        838,915     676,168

Provision for liabilities and charges             -        (16,946)          -

Total assets less current liabilities     3,447,570      3,721,291   3,581,456

Capital & reserves                          975,000        975,000     975,000
Share capital                             3,111,419      3,111,419   3,111,419
Share premium                              (638,849)      (365,128)   (504,963)
Profit & loss account

Shareholders' funds                       3,447,570      3,721,291   3,581,456

The accounts were approved by the board on 24 March 2005 and signed on its
behalf:-

P Litten                                                         N J Newman
Director                                                         Director



                               CHEERFUL SCOUT PLC
                        CONSOLIDATED CASH FLOW STATEMENT
                     FOR THE PERIOD ENDED 31 DECEMBER 2004

                                         Unaudited      Unaudited     Audited
                                       6 months to    6 months to     Year to
                                       31 December    31 December     30 June
                                              2004           2003        2004
                                                 £              £           £

Net cash (outflow) from
operating activities                       (58,202)       (28,522)    (71,311)

Returns on investments and servicing
of Finance
Interest received                            8,863          8,360      21,284
Interest paid                                    -              -         (93)

Net cash inflow for returns on
investments and servicing of finance         8,863          8,360      21,191

Taxation                                         -              -      17,375

Capital expenditure and financial
investment
Payments to acquire
intangible assets                          (85,878)       (56,229)   (178,426)
Payments to acquire
tangible assets                            (45,285)       (19,214)    (53,235)

Net cash outflow for
capital expenditure                       (131,163)       (75,443)   (231,661)

Net cash outflow before management
of liquid resources and
financing                                 (180,502)       (95,605)   (264,406)

Management of liquid resources
Bank deposits                                    -       (235,442)          -

Financing
Net proceeds from issue of ordinary
share capital                                    -        292,819     301,875
Expenses relating to
issue of share capital                           -              -      (9,056)

Net cash inflow from
financing                                        -        292,819     292,819

(Decrease)/increase in
cash in the year                          (180,502)       (38,228)     28,413


                               CHEERFUL SCOUT PLC
                       NOTES TO THE FINANCIAL STATEMENTS
                   FOR THE SIX MONTHS ENDED 31 DECEMBER 2004



1                     FINANCIAL INFORMATION

The interim results for the six months ended 31 December 2004 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
2004. A copy of the 2004 Accounts have been filed with the Registrar of
Companies. The Auditors opinion on these Accounts was unqualified.

2                     SHARE CAPITAL

During the period, options over a total of 6,905,000 ordinary shares of 0.5p
each have been granted at an exercise price of 0.75p per share exercisable
between 3 and 10 years after the date of grant, which was 28 October 2004.

3                     EARNINGS PER ORDINARY SHARES

Basic earnings per share are calculated using the weighted average of
195,000,000 (2003: 178,596,000) Ordinary Shares in issue during the period.
Diluted earnings per share are calculated assuming conversion of all outstanding
dilutive share options and warrants. These adjustments give rise to an increased
weighted average ordinary shares of 197,301,667.

4                     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.

5 DIVIDEND
No interim dividend is declared on the ordinary shares.


                               CHEERFUL SCOUT PLC
                        CONSOLIDATED CASH FLOW STATEMENT
                     FOR THE PERIOD ENDED 31 DECEMBER 2004

                                     Unaudited      Unaudited          Audited
                                   6 months to    6 months to          Year to
                                   31 December    31 December          30 June 
                                          2004           2003             2004
                                             £              £                £

6. Reconciliation of operating
(loss) to net cash inflow from 
operating activities

Operating (loss)                      (142,749)      (237,630)        (407,242)
Depreciation of tangible
assets                                  66,674         79,740          161,783
Amortisation of intangible
assets                                  68,207         68,207          136,415
Decrease in debtors                    (19,674)        64,073            1,074
(Increase)/Decrease in
creditors within one year              (30,616)        (2,912)          36,793
Increase in stock                          (44)             -             (134)

Net cash inflow from
operating activities                   (58,202)       (28,522)         (71,311)


7 Analysis of net funds              At 1 July      Cash Flow   At 31 December
                                          2004                            2004
                                             £              £                £
Net cash:
Cash at bank and in hand               (26,087)       (16,677)         (42,764)
Liquid resources:
Bank deposits                          612,052       (163,825)         448,227

Net funds                              585,965       (180,502)         405,463



                                       Unaudited        Unaudited      Audited
                                     6 months to      6 months to      Year to
                                     31 December      31 December      30 June
                                            2004             2003         2004
                                               £                £            £
8 Reconciliation of net cash flow
to movement in net funds
(Decrease) in cash in the year           (16,677)         (38,228)     (27,929)
Cash (outflow)/inflow from
movement in liquid resources            (163,825)         235,442       56,342
Change in net funds resulting
from cash flows                         (180,502)         197,214       28,413

Movement in net fund in
the year                                (180,502)         197,214       28,413

Opening net funds                        585,965          557,552      557,552

Closing net funds                        405,463          754,766      585,965





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