zamano PLC 

('zamano', the 'Company' or the 'Group')

Interim Results for the six months to 30 June 2008 

zamano plc, a leading provider of interactive applications and services to mobile devices, today announces its interim results for the 6 months to 30 June 2008, prepared in accordance with IFRS. 

Highlights:

Rod Matthews, Chairman of zamano, commented: "Taking account of the challenging regulatory and economic environment along with the negative currency movement, the Board is satisfied with the profitable growth achieved during the period. This challenging environment in the UK and Ireland is affecting growth rates particularly from print advertising, but the Board is taking steps to ensure that these effects are minimised."

John O'Shea, CEO of zamano, added: "In response to the current environment, we are adapting our approach to a number of areas of our business, including optimizing print advertising spend, expanding the US business, entering new territories, and launching new products. The Board feels that actions such as these, which are outlined in more detail below, will put the Company in a strong position for the future."

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  Chairman's statement 

Taking account of the challenging regulatory environment, economic conditions and negative currency movements, the Board is satisfied with the performance in the first half of 2008. The Group delivered substantial profitable growth driven by the two acquisitions completed in 2007.  

The Board is pleased to announce that the integration of the Red Circle business, consisting of merging the technical teams and executing on a combined platform strategy, has now been completed. 

Tightening regulations in UK and Ireland, combined with the economic conditions are having an impact on performance, particularly in the effectiveness of print advertising in the UK and Irish market. In response, the Company has reduced UK print advertising by 40% over the last 6 months, and has only retained the most profitable advertising. The Company continues to move the advertising spend into strategic areas to diversify revenue. Nevertheless, the Board expects EBITDA in H2 to be similar to that achieved in H1.

Regulatory Code of Practice 

The regulatory environment in the UK and Ireland continues to evolve. Today, zamano launched a Code of Practice, the aim of which is to enhance compliance with all appropriate regulations and market best practice.  To support this Code, a customer care manager has been given responsibility for end-user advocacy. Resulting from the new Code, the Group has restricted certain non-compliant customers access to its platform. The Directors have always focused on ensuring full regulatory compliance and this is further evidence of the Group's commitment to being at the forefront of best practice in the industry.  

Summary

In response to the operating environment the Board have carried out a detailed review and strongly support the actions outlined below which we believe will position the Company for further growth in the medium term.

Rod Matthews

Chairman  CEO's statement 

Given the current environment, the management team is taking a number of actions to reposition the Group to take advantage of the next stage of growth: 

The Group is realigning resources to ensure they are directed at these areas, and during this period of change, strict cost management is in place to underpin profitability.

Division Review

zamano continues to operate a hybrid business model, combining the offering of mobile data services directly to consumers (B2C) as well as via partners (B2B). This delivers economies of scale in messaging, and spreads the technology investment and operating costs over a wider stream of revenues. 

The B2B division's revenue grew 16% over the same period in 2007; however, profits were down slightly due to margin declines over the period reflecting competitive pressure in some areas of the market. 

The B2C division has experienced substantial growth with revenues up by over 300%, primarily driven by the full integration of the two acquisitions in 2007, Eirborne Text Promotions and Red Circle Technologies.  

Summary

zamano has built substantial scale, is on track to deliver the sixth consecutive year of double digit profit growth and has successfully integrated five acquisitions. Through a policy of identifying and investing in areas of high growth potential, the Group is now positioning itself to move through the current challenging environment to the next stage of growth. 

John O'Shea

CEO

  Financial Review

Revenue grew 145% to €23.7 million (H1 2007: €9.7 million) and this rate of growth was affected by the decline in Sterling.

The Group's EBITDA grew by 67% to €2.4 million (H1 2007: €1.4 million) and this would have been 106% on a constant currency basis.  The EBITDA margin was 10% which is down 4 percentage points reflecting the impact of Sterling, and gross margin decline in some traditional routes to market.

Cost control remains strong as evidenced by the fact that operating costs, excluding amortisation, declined to 17% of revenue from 24% in 2007. This is very pleasing given the dramatic growth which the business has experienced over the past twelve months.  The Board continues to implement cost controls which should see this ratio declining further during 2008.  The revenue per employee has continued to grow, despite the impact of Sterling, to an annualized €698k per employee in H1, growing from €650k in 2007 

Cash generation in the Group continues to be strong, with €1.85 million of positive cash-flow generated from operating activities in the first 6 months of the year.  The cash balance at 30 June was €5.1 million, a decline from €12.1 million at year end due to €7.3 million in deferred consideration payments and €1.5 million in loan repayments to Bank of Scotland (Ireland).  The Group took on €15 million in debt from Bank of Scotland (Ireland) to fund the acquisition of Red Circle. The debt now stands at €14 million.  

Colm Saunders

CFO

  Condensed consolidated income statement

for the half-year ended 30 June 2008

  Condensed consolidated balance sheet

at 30 June 2008

Condensed consolidated statement of changes in equity

for the half-year ended 30 June 2008

Condensed consolidated cash flow statement

for the half-year ended 30 June 2008