Final Results

Comeleon PLC
29 November 2001


FOR IMMEDIATE RELEASE                                          29 NOVEMBER 2001




                       MAIDEN PRELIMINARY FINAL RESULTS

               for the twelve months ended 30th September 2001

         2000/2001; Successful growth and development of the business



Comeleon  is pleased to announce its maiden preliminary final results for the
twelve months ended 30th September 2001.



Key Points:


*                  Rapid growth in order book

*                  Current sales and order book  ahead of Plan

*                  Financial performance better than expectations

*                  New UK headquarters and production facilities completed

*                  Opening and full Nokia Approval of USA facility

*                  Key contracts signed

*                  Licensing agreements with Coca Cola (contracts exchanged)
                   and others

*                  E-commerce development and Interactive Design Studio

*                  Recruitment: first stage complete - 80 people

*                  Existing capacity to meet output targets for 2001/02



Jon Pither, Chairman, said:



'The rapid progress of the Company during the past twelve months has provided
a solid foundation for its next stages of growth and development. During our
first full financial year we have performed well in establishing production
capability and a strong position in the market place both in Europe and the
United States.'





For further information, please contact:


Roy Stanley, Chief Executive Officer                    Today on: 020 7466 5000
Tim Robinson, Finance Director                      thereafter on: 01207 693301

Comeleon plc                                              www.comeleon-ir.co.uk
Tim Anderson
Lisa Baderoon
Buchanan Communications Limited                           Tel No: 0207 466 5000
                                                            www.buchanan.uk.com



                             CHAIRMAN'S STATEMENT



This is my first year end statement as Chairman of Comeleon and it gives me
great pleasure to report on the enormous progress made over its first 12
months as a public company. However, to put all of its achievements into
perspective, I would like first to outline current trading.



The order intake since October 1 stands at over £500k, which is 227% ahead of
plan; and is more than our turnover  for the whole of the last financial year.
Significantly, we have just received full Nokia Approval for our new site in
North Carolina which was opened in August, and exchanged contracts for a
licensing agreement with Coca Cola for the representation of its brand on
mobile phones and computer peripherals in the US.



The short-term order book is being driven by a number of factors. Our UK
design and production facilities  were fully approved by Nokia, Motorola,
Siemens and Sendo in July . Since that point we have implemented additional
production capacity and can now offer a wide range of products, licensed
images and services.



We are pursuing all planned routes to market with significant success. We are
selling direct to the retail market, to large distribution outlets, to
corporate entities (including OEM sales) and also to consumers over our
website. Our offering is scalable and we are capable of producing anything
from a 'one-off' to large volume in a cost effective way. Our website, through
the Interactive Design Studio, provides an on-line method for consumers to
customise their mobiles. This service was initially offered through phone
providers such as Siemens and Virgin Mobile. However, in November it was
extended to give consumers direct access. At the same time the service has
developed from providing a comprehensive range of designs which the consumer
could select, into the position where a unique image can be created from
photographs and other means.



There is also the superiority of our product and process, compared to the
competition, which is steadily driving demand. The flexibility of our process
takes away both image risk and inventory risk for our customers. Furthermore,
as part of our design capability, we track fashion trends which are marketed
to companies in a way that can complement their product range, reinforce their
brand and uniquely market new ideas.



Sales and orders are the true proof of value, however the license from Coca
Cola where contracts have already been exchanged, is a significant endorsement
of Comeleon's rapid evolution and market position. Permission to use a global
brand of this magnitude indicates how seriously Comeleon's technology is now
considered. Comeleon's technology is progressively being recognised as a means
of enhancing consumer goods in ways which were previously impossible or
uneconomic. We are currently imaging products in three consumer electronic
markets and over the next year we hope to announce the application of our
technology to other consumer products and for its introduction into at least
two other industries.



Comeleon is developing at an exciting pace since the end of its first
financial year as a public company. However, this was only possible because of
the sound foundations established during the year under review.



It was just over a year ago in December 2000 that the Company successfully
raised £9.4 million through an AIM listing on the London Stock Exchange to
fund its growth and development. The period since then saw the initial period
of growth in sales which, along with other financial performance factors, were
better than anticipated in the Company's business plan. Sales were up against
Plan by 24% at  £417k  and the loss for the 12 months to September  was better
than Plan.



The level of interest within the consumer electronics market for the Comeleon
technology has grown quickly and the Company has firmly established its
reputation in this market. The first goal was to become the imaging partner of
choice for the major mobile telephone manufacturers mentioned above. The Board
believes that this goal has been achieved. Comeleon has signed contracts with
these major manufacturers allowing branded, genuine product to be sold into
all planned routes to market.





The installation of plant and equipment is complete for the next phase of
business development. The Company has the capacity to achieve its planned
projections for the next year.  The implementation of this has gone very well
and there are a number of cost, investment and technical improvements that
will benefit the Company over this next phase of its growth.



Financial Review



The financial performance for the Group during the period exceeded
management's expectations. Sales for the period were £413,000, nearly 24% more
than originally planned.  The loss before tax and exceptional administrative
expenses for the 12 months to September was under £3.0 million, and again
better than originally planned, demonstrating tight control of the business.
Exceptional charges totalling £916,619 have been incurred in the year,
comprising £250,000 of flotation costs and £666,619 of non-cash expenses
relating to options awarded in connection with the flotation.



Closing Tangible assets of £1.7 million represent the capital spend in both UK
and US facilities. Following the successful fund raising of £9.4 million in
December 2000, cash balances at the year end remained ahead of plan at £3.8
million.



This performance and improvement on management's planned expectations is a
direct result of the Group's focused development strategy. The current
confirmed order intake of over £500k for the new financial year also
demonstrates the increasing attraction of our product offerings in the markets
we serve.



Operating Review



Comeleon continues to enhance its technology. The imaging process is now more
flexible and improvements have been made in the consumable cost base of the
process. This has been achieved by technical enhancements, which have been
incorporated into our process patent which is pending. The company is
confident that further aspects of the technology can be developed that will
have significant benefits to the process. Comeleon is committed to further
develop the process in order to maintain its technical lead in the market.



We have invested in our new sales, manufacturing and design Headquarters based
at Tanfield Lea, County Durham, with 40,000 square feet of office and
shopfloor space. Production processes have been fully installed and
commissioned in the new building.  Because of the enhancements to the process
described above the capital costs associated with increasing capacity has been
less than planned. This will also be reflected in anticipated capital
investment over the next year. The Company has a capacity to produce 30,000
units per week out of this site.



Comeleon has successfully recruited key production, engineering and sales
staff to build its growth capability.  There are currently 80 people on the
payroll in total. The training and development of the team is ongoing. This
part of the development of the business has gone exceptionally well.



The Company has established a 12,000 square foot technical and production
facility in North Carolina, USA to take advantage of the significant
opportunities in the North American market. The capacity of the facility will
be 2000 units per week rising to 5000 units per week during 2002.



Comeleon continues to trade well on its web site. The level of business to
consumer activity is increasing rapidly. One of the most significant
developments has been the introduction of the Interactive Design Studio (IDS).
This allows consumers to download their own images on the Internet and for
Comeleon to place these images onto products and deliver directly to the
consumer. Two major companies, Siemens and Virgin Mobile, have adopted the IDS
onto their web sites; a development which has significant potential for us.



The Company is also transacting commercially across the web on a 'business to
business' basis with over 80 dealers registered online. A number of Hotlinks
have been established with major accessories retailers, allowing consumers to
visit our web site.





Prospects



In its first year Comeleon established sound business foundations which have
enabled us to build an impressive order book since implementing production
capacity and gaining OEM Approvals. Similarly, the response from the market to
the capability and flexibility of the Comeleon technology is very strong and
as such we believe that the business opportunities available to the company
going forward will be significant. In particular that the majority of mobile
telephone manufacturers are now working with Comeleon - is a major achievement
and considerable endorsement for us. The exchange of contracts for the license
from Coca Cola is a real coming of age for the business and its technology.
The management team are now focused on the goal of significantly increasing
revenues over the next financial year.





John Pither

Chairman

29 November 2001



CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the 12 months ended 30 September 2001


                                                  12 months ended      6 months
                                                  30 September 2001       ended
                                                                   30 September
                                                                           2000
                                           Note            £                £

TURNOVER                                                  412,872         3,627

Cost of sales                                           (715,268)       (3,248)

Gross (loss) / profit                                   (302,396)           379



Other operating income                                     30,000             -
Administrative expenses                               (2,627,915)   (1,038,691)
Exceptional Administration expenses          2          (916,619)             -


OPERATING LOSS                                        (3,816,930)   (1,038,312)

Other interest receivable and similar income             245,497             -
                                                         
Interest payable and similar charges                     (74,187)      (18,057)


LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION                                       (3,645,620)   (1,056,369)

Tax on loss on ordinary activities           3                  -             -


LOSS ON ORDINARY ACTIVITIES
AFTER TAXATION                                        (3,645,620)   (1,056,369)


RETAINED LOSS FOR THE FINANCIAL PERIOD
TRANSFERRED TO RESERVES                               (3,645,620)   (1,056,369)


All activities derive from continuing operations.


The group has no recognised gains and losses other than the profit for the
current and preceding periods and therefore no separate Statement of Total
Recognised Gains and Losses has been presented.



CONSOLIDATED BALANCE SHEET
As at 30 September 2001


                                                             As at        As at
                                                      30 September 30 September
                                                              2001         2000
                                                                 £            £


FIXED ASSETS

Intangible assets                                          828,060      167,203
Tangible assets                                          1,699,107       81,368

                                                         2,527,167      248,571

CURRENT ASSETS

Stocks                                                     189,837            -
Debtors                                                    596,253       37,146
Cash at bank and in hand                                 3,847,856      446,146

                                                         4,633,946      483,292


CREDITORS: amounts falling due within one year         (1,251,129)  (1,787,551)

NET CURRENT ASSETS/(LIABILITIES)                         3,382,817  (1,304,259)

TOTAL ASSETS LESS CURRENT LIABILITIES                    5,909,984  (1,055,688)

CREDITORS: amounts falling due after more than one       (588,271)     (47,044)
year
                                                                
PROVISION FOR LIABILITIES AND CHARGES                           -            -

                                                         5,321,713  (1,102,732)




CAPITAL AND RESERVES

Called up share capital                                    126,613            1
Shares to be issued                                        666,619            -
Share premium account                                    8,589,543            -
Merger Reserve                                             615,614
Profit and loss account                                (4,676,676)  (1,102,732)


EQUITY SHAREHOLDERS' FUNDS                               5,321,713  (1,102,732)



1.      BASIS OF PREPARATION

This preliminary announcement does not comprise statutory accounts within the
meaning of Section 240 of the Companies Act 1985.  The statutory accounts as
at 30 September 2001 will be filed with the Registrar of Companies and sent to
shareholders in due course together with the auditors' report thereon.



This preliminary announcement has been prepared in accordance with the
principles set out in Financial Reporting Standards ('FRS') 6 'Acquisitions
and Mergers'.  The results are shown here for a 12 month period and the
preceding 6 month period in order to provide consistency with the interim
results published on 27 June 2001 and the financial information given in the
company's prospectus.  The company's statutory accounts will, when published,
include a proforma consolidated profit and loss account for the 18 month
period ended 30 September 2001 and a statutory profit and loss account for the
13 month period ended 30 September 2001.



2.      EXCEPTIONAL ADMINISTRATION 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.

£666,619 is a non-cash amount calculated on options awarded in connection with
the flotation.



3.      TAX ON LOSS ON ORDINARY ACTIVITIES

No liability to taxation arises on the loss for the period (31 March 2000 - £
nil).  There are, subject to the agreement of the Inland Revenue, losses of
approximately £ 3,107,000 (31 March 2000- pre trading expenditure of £30,000)
available to carry forward and set against future profits from the same trade.



4.      EARNINGS PER ORDINARY SHARE

Loss per share has 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 10,921,269, and the earnings, being loss on ordinary
activities after taxation and minority interest are £3,645,620.


                                                                12 months ended
                                                                   30 September
                                                                           2001
                                                                              p

Loss per share                                                          (33.38)
Loss per share before Exceptional Administrative expenses               (24.99)