Trading Statement - Rplcmnt

Comeleon PLC
24 February 2003

The following replaces the Trading Statement announcement released 24 February
at 0800 under RNS No 8360H.



The first paragraph now states 'The Board now expects that losses for the full
year are likely to be significantly higher than expected.' not as originally
shown.



Additional information has been added to the paragraph headed Cash.



The full amended text is below:


Immediate Release                                           24 February 2003



                                  COMELEON PLC



                                 TRADING UPDATE



comeleon plc, the 3D imaging company, announces that, further to the statement
made with the final results on 4 December 2002, trading for the year to date has
been below expectations, primarily as a result of lower than expected sales of
volume imaged product. The Board now expects that losses for the full year are
likely to be significantly higher than expected. The Directors see the year
ahead as a challenge but are encouraged by the opportunities and progress in
certain areas.



The Directors remain firmly of the opinion that the market for comeleon's
technology is as strong as it was at the time of the flotation in 2000.
However, there have been rapid and significant changes in the manufacturing
market for consumer electronics and comeleon is in the process of adapting to
these changes.  In its original business plan, comeleon expected to exploit the
technology in high volume production at its own processing plant at Tanfield.
It has become clear that manufacturers of consumer electronics would prefer the
imaging technology to be in situ within their own production facilities.  This
trend has been exacerbated by the general trend of manufacturing outsourcing to
low cost countries around the world.



As a consequence of these market changes comeleon has experienced lower than
expected volumes through its Tanfield site and has now reduced capacity to
reflect expectations and also rationalised its sales and production facilities.
A small production facility at Tanfield has closed and transferred its
activities to the main Tanfield site which should improve production efficiency.
  The sales office in the US has closed and the company has signed an agreement
with a US company effectively outsourcing this function.  The business now
operates from just one site at Tanfield and has achieved a substantial reduction
in overheads.  Savings amount to in excess of £100,000 per month and include
cuts in Directors' remuneration.



The emphasis of comeleon's business is now expected to be in the sale of the
ImageBox and related consumables, and on the licensing of the technology to
volume manufacturers of consumer electronics, with lower volume production and
internet sales through the Tanfield site.



ImageBox sales

ImageBox is a desk-top device which enables small businesses or retailers to put
full colour images on to a range of plastic, glass and ceramic objects.  To date
comeleon has delivered 30 ImageBoxes and, following an agreement signed last
week, now has contracts to supply over 1,000 ImageBoxes over the next 10 months.
Every sale of an ImageBox is accompanied by a three year consumables supply
agreement under which the customer is required to source certain products from
comeleon or one of its authorised suppliers.



The Directors are encouraged by the achievements already made with ImageBox and
look forward with some confidence based upon the current level of enquiries.



Volume licence sales

The comeleon technology can be packaged as a production line and provided under
licence to consumer electronics manufacturers for their own use.  comeleon has
already agreed terms on one such deal under which the technology has been
licensed to a US product development and prototyping company.  This agreement
incorporates a five year licence to use the technology and requires the
purchaser to source certain consumable products from comeleon or one of its
authorised suppliers.



The Company is currently in discussions and negotiations with a number of
manufacturers about similar volume licence arrangements.



Other sales

The original business plan for the Company showed an early reliance on imaging
mobile phone covers for the major manufacturers through the facility in
Tanfield.  This market is still relatively buoyant in the USA, but has become
relatively saturated in Europe and has been in decline.  However, opportunities
have arisen for comeleon to use its contacts in the mobile phone industry to
trade handsets, with imaging as part of a package.  This is a new area of
trading for the Company and the Directors believe that this may result in larger
turnover, but with low margins.  Any imaging will be put through the Tanfield
facility, which will also continue to be used for relatively smaller production
runs for customers, where a volume licence is not appropriate, and internet
orders.



Cash

The cash position at the end of January is ahead of budget despite the lower
than anticipated higher margin sales performance over the last three months.
This is due to the ongoing tight control of overhead spend and cash management.
The company had approximately £1.7 million of cash at the end of January and the
average cash burn over the first four months has been around £0.33 million
(before the £0.1 million per month overhead reductions noted above).  In
addition to its cash resources, the company has an as yet unused invoice
discounting facility.  Cash management will be a major focus for the rest of the
year, the current plan shows the Company still with cash at the end of the
financial year.  However, this will obviously be dependent upon the fulfilment
of existing contracts, winning a proportion of new contracts and the timing of
such contracts. An increasing positive cash position will be enhanced as more
ImageBoxes and Volume Licences are released to the market.



Outlook

The Directors believe that the market for the Company's technology is as strong
as it was on flotation some two years ago, but the rapidly changing market for
consumer electronics has caused the Board to alter its original business plan
dramatically to react to these changes and manage market expectations.  Cash
management is a key issue for the current period, but the Directors have taken
action to reduce costs and have been greatly encouraged by enquiries and orders
for ImageBoxes and volume licences, and believe that this should provide a more
sustainable business model for the future as the installed base increases.



As the comeleon process is a relatively new concept, the Company continues to
seek new market areas for the technology and this will develop further as the
process becomes more widely established and accepted and its method of delivery
more settled.



For further information please contact:
comeleon plc                                              Tel: [phone]

Roy Stanley, Chief Executive Officer
Tim Robinson, Finance Director

Buchanan Communications Limited                            Tel: [phone]
Lisa Baderoon




                      This information is provided by RNS
            The company news service from the London Stock Exchange