BIT - Swings into H1 profit and doubles turnover

Interim Results

RNS Number:2578W
Bits Corp PLC
29 December 2005

Press Release

29 December 2005

BITS CORP PLC


Interim Results
for the six months ended 30 September 2005


Bits Corp plc ('Bits Corp' or 'the Company'), a leading UK developer of video
games software for major console platforms, today reports its interim results
for the six months ended 30 September 2005.


Chairman's Statement

The results for the six months ended 30 September 2005 reflect the investment
made by the Group in the development and leveraging of new technology for the
internet gambling arena together with devising a strategic marketing initiative
to complement the Group's entry into this market.


Results

Turnover for the six months ended 30 September 2005 was #285,000 compared with
#1,051,000 in the same period last year. The loss (both before and after tax)
for the half year was #66,000 compared with a profit of #35,000 in the same
period last year.



No dividend is proposed for the period (2004: #nil).



Operating Review and Current Developments

As already announced, the most important recent development was the fact that
the Group signed agreements with The Palace Group and Microgaming facilitating
its entry into the internet gambling arena, utilising technology developed by
the Group. The cost of developing this new technology has been largely
internally funded and it is anticipated that the new product will be launched
during the 1st quarter of 2006. The Group will need to invest considerable funds
in order to fully implement its strategic entry into the internet gambling
market, and as a result of this requirement the Board has called an
Extraordinary General Meeting to be held on 20 January 2006. At the EGM,
resolutions will be placed before shareholders regarding the raising of
substantial capital. The notice calling the EGM fully outlines the Board's
rationale and specific resolutions that shareholders need to consider.



The Group is also working on a number of other development opportunities both
within the traditional video gaming market and the internet gambling arena,
which will be announced once they have come to fruition.



Prospects

The Group remains focused on the design and development of video games for all
games consoles together with utilising our experience and knowledge of the
consumer games market in other related fields.


John Corre

Chairman


For further information, please contact:


Bits Corp plc

Foo Katan, Chief Executive

Tel: + 44 (0)20 8282 7200

Email: foo@bitscorp.com


Consolidated Profit and Loss Account
for the six months ended 30 September 2005
Unaudited Unaudited Audited
6 months ended 6 months ended Year
30 September 2005 30 September 2004 ended
31 March
2005

Note #000 #000 #000


Turnover 285 1,051 1,869
Cost of sales (225) (817) (1,454)
Gross profit 60 234 415

Operating (loss)/profit (69) 35 64

Interest receivable 3) - 8
(Loss)/profit on ordinary activities before taxation (66) 35 72

Taxation - - 47
Retained (loss)/profit for the period (66) 35 119


(Loss)/earnings per share Pence Pence Pence

Basic 2 (0.15) 0.08 0.27
Diluted 2 (0.14) 0.08 0.26

All amounts relate to continuing operations.


Statement of Total Recognised Gains and Losses
for the six months ended 30 September 2005
Unaudited Unaudited Audited
6 months ended 6 months ended Year
30 September 2005 30 September ended
2004 31 March
2005

#000 #000 #000

(Loss)/profit for the period (66) 35 119
Currency translation differences - (1) (2)
Total recognised (losses)/gains relating (66) 34 117
to the period


Consolidated Balance Sheet
as at 30 September 2005
Unaudited Unaudited Audited
As at As at As at
30 September 2005 30 September 31 March
2004 2005

#000 #000 #000

Fixed assets
Tangible assets 11 27 14
11 27 14

Current assets
Stocks 1,064 - 334
Debtors 59 1,152 423
Cash at bank and in hand - 186 222
1,123 1,338 979


Creditors: Amounts falling due within one (443) (694) (239)
year
Net current assets 680 644 740
Net assets 691 671 754

Capital and reserves
Called up share capital 441 440 440
Share premium account 3,832 3,830 3,830
Merger reserve 735 735 735
Profit and loss account (4,317) (4,334) (4,251)
Shareholders' funds - equity 691 671 754


Consolidated Cash Flow Statement
for the six months ended 30 September 2005
Unaudited Unaudited Audited
6 months ended 6 months ended Year
30 September 2005 30 September ended
2004 31 March
2005

Note #000 #000 #000

Net cash (outflow)/inflow from operating 3 (263) 27 56)
activities

Returns on investments and servicing of
finance
Interest received 3 - 8
3 - 8
Capital expenditure
Purchase of tangible fixed assets (3) (19) (19)

(3) (19) (19)

Net cash (outflow)/inflow before use of (263) 8 45
liquid resources and financing

Management of liquid resources
Movement in short term bank deposits - 207 207
- 207 207

Financing
Issue of ordinary share capital 3 - -
3 - -

(Decrease)/Increase in cash (260) 215 252


Notes to the Financial Statements
for the six months ended 30 September 2005

1. Basis of preparation

The interim financial statements have been prepared on the basis of the accounting policies set out in the Group's
Annual Report and Accounts for the year ended 31 March 2005. The financial information for the year ended 31 March
2005 has been extracted from the Annual Report and Accounts, which have been filed with the Registrar of Companies.
The auditors' report on those accounts was unqualified and did not contain any statements under section 237(2) or
(3)
of the Companies Act 1985. The financial information contained in this document does not constitute statutory
financial statements as defined in section 240 of the Companies Act 1985.


2. (Loss)/earning per share

Six months ended 30 September 2005

Loss per share has
been calculated using Weighted average number
the following: Earnings of shares

Basic (#66,000) 44,008,739
Diluted (#66,000) 45,233,739


The difference between the weighted average number of shares in issue on a basic and diluted basis reflects those
shares which would be issued at 2.62 p consideration under the Bits Corp Share Option Scheme.


Six Months ended 30 September 2004

Earnings per share has
been calculated using Weighted average number
The following: Earnings of shares

Basic #35,000 43,991,690
Diluted #35,000 43,991,690


Year ended 31 March 2005

Earnings per share has
been calculated using Weighted average number
The following: Earnings of shares

Basic #119,000 43,991,690
Diluted #119,000 44,691,320


The difference between the weighted average number of shares in issue on a basic and diluted basis reflects those
shares which would be issued at 2.62 p consideration under the Bits Corp Share Option Scheme.


3. Net cash outflow from operating activities

Unaudited Unaudited Audited
6 months ended 6 months ended Year
30 September 2005 30 September 2004 ended
31 March
2005

#000 #000 #000

Operating (loss)/profit (69) 35 64
Depreciation and 7 13 25
amortisation of fixed
assets
Increase in Stock (730) - (334)
Decrease/(Increase) in 367 (233) 493
debtors
Increase/(Decrease) in 162 212 (192)
creditors
Net cash (outflow)/inflow (263) 27 56
from operating activities

4. Reconciliation of net cash flow to movement in net funds

Unaudited Unaudited Audited
6 months ended 6 months ended Year
30 September 2005 30 September 2004 ended
31 March
2005

#000 #000 #000

(Decrease)/Increase in cash in the period (260) 215 252
Decrease in liquid resources - (207) (207)
Change in net funds resulting from cash flows (260) 8 45
Currency translation differences - (1) (2)
Movement in net funds in the period (260) 7 43
Opening net funds 222 179 179
Closing net funds (38) 186 222



5. Analysis of net funds
At At
1 30
April Cash Translation September
2005 Flows Differences 2005

#000 #000 #000 #000

Cash at bank and in hand 222 (222) - -
Bank overdrafts - (38) - (38)

222 (260) - (38)

Short term deposits - - - -
Total net funds 222 (260) - (38)

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

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