Interim Results

Room Service Group PLC
12 March 2003

                             ROOM SERVICE GROUP PLC

             INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2002



THE DIRECTORS REPORT



The expected return to profitability in the first half of 2002, following the
reverse take-over and re-construction in January, failed to materialise, because
of the deteriorating market conditions in which the newly acquired trading
operation was forced to operate.



The Company's major subsidiary suffered a substantial setback to its food
delivery business as a result of the September 2001 terrorist attacks. Its
impact upon the US corporate market in London was significant, as the levels of
personnel coming to London reduced considerably. Subsequently the downturn in
the level of corporate business generally, in the first half of the year,
compounded Room Service Deliveries' problems.



The Company recognised the need to market and promote its food delivery services
more widely and intensely whilst diversifying its activities. However this was
severely hampered by the lack of sufficient funding.



Since the early part of last summer the company has been strenuously seeking new
sources of capital funding. During the second half of 2002 several potential
investors emerged but, unfortunately, none of these proposals could be
successfully concluded.



The Company's shares were suspended in October 2002, initially on a
technicality, revolving around the timing of the publication of the half yearly
figures. However, subsequently, following advice from its brokers, the
suspension was maintained as the Directors were involved in advanced
negotiations regarding a possible take-over and until the Company's financial
position could be clarified.



During this time the Company continued to record trading losses, on a monthly
basis and the Directors realised that, in the best interests of the
shareholders, the food delivery business should be disposed of. It became
evident, however, that liquidation was the only possible route. The Board
further took action to reduce its operating costs and ensure that its actual and
contingent liabilities were kept to a minimum whilst maintaining existing
operations.



As additional funding had not been forthcoming the Directors believe that they
best protect the shareholders' position by seeking a suitable party to complete
the re-structuring of the business and inject the required funding.


The Company at present has creditors of approx 190k and is looking to realise
assets to reduce this amount and is offering creditors an alternative for full
and final settlement of their outstanding amounts.


The Company, as assisted by its advisors, are in negotiations with a third party
who may be interested in obtaining a stake in Room Service PLC and who also may
provide the company with a working capital facility. Whilst preliminary
indications of interest have been expressed, informal discussions are currently
taking place but should the outcome of the present discussions be positive it
will be the Boards intention to apply for the suspension of dealings to be
lifted. The Board will continue to keep shareholders informed on progress.




DIRECTORS

ROOM SERVICE GROUP PLC

11 March 2003




CONSOLIDATED profit and loss account

For the six months ended 30 June 2002


                                                              6 months ended       6 months ended             Year ended

                                                                30 June 2002         30 June 2001       31 December 2001

                                                                 (unaudited)          (unaudited)              (audited)

                                                                  £'000                     £'000                  £'000

Turnover                                                               1,928                  867                    991
Cost of sales                                                          1,312                  480                    380
                                                                     _______               ______                 ______
Gross profit                                                             616                  387                    611

Administrative expenses                                              (1,105)              (2,129)                (4,185)
Accounts written off investments                                           -                    -                (2,704)
                                                                     _______               ______                 ______

Operating loss                                                         (489)              (1,742)                (6,278)
Profit on disposal of discontinued operation                               -                   17                    684
Share of operating loss of associated undertakings                         -                (160)                      -
Interest payable and similar charges                                    (24)                    -                      -
Interest receivable and similar income                                     3                   68                     90
                                                                     _______               ______                 ______
Loss on ordinary activities before taxation                            (510)              (1,817)                (5,504)

Tax on loss on ordinary activities                                         -                    -                      -
                                                                     _______               ______                 ______
Loss on ordinary activities after taxation                             (510)              (1,817)                (5,504)

Minority interest                                                          -                (186)                     25
                                                                     _______               ______                 ______
Retained loss for the period                                           (510)              (2,003)                (5,479)
                                                                     _______               ______                 ______

Loss per ordinary share                                              (0.41p)              (6.00p)               (13.90p)

Fully diluted loss per ordinary share                                (0.40p)              (5.00p)               (13.80p)



Consolidated balance sheet
                                                               30 June 2002       31 December 2001          30 June 2001

                                                                (unaudited)              (audited)           (unaudited)

                                                                 £'000                       £'000                 £'000

Intangible fixed assets
Goodwill                                                              2,510                      -                   605
                                                                     ______                 ______                 _____
Tangible fixed assets
Investments                                                               -                     75                 2,054
Investments in associates                                                 -                      -                  (78)
Improvements to property, plant and equipment                           254                      7                   200
                                                                     ______                 ______                 _____
                                                                        254                     82                 2,176
Current assets                                                       ______                 ______                 _____
Stock                                                                    21                      -                     -
Investments                                                             241                    425                     -
Debtors                                                                 459                    376                   642
Cash at bank and in hand                                                  -                    728                 1,824
                                                                     ______                  _____                ______
                                                                        721                  1,529                 2,466
                                                                     ______                  _____                ______

Creditors: amounts falling due within one year                      (1,252)                  (409)                 (769)
                                                                     ______                  _____                ______

Net current (liabilities)/assets                                      (531)                  1,120                 1,697
                                                                     ______                  _____                ______
Total assets less current liabilities                                 2,233                  1,202                 4,478
Provisions for liabilities and charges                                   12                  (200)                     -
                                                                     ______                  _____                ______
Net assets                                                            2,245                  1,002                 4,478
                                                                     ======                  =====                ======

Capital and reserves (note 5)
Called up Share Capital                                               5,004                  4,180                 4,180
Share Premium                                                        10,226                  9,371                 9,371
Profit and loss account                                            (12,985)               (12,527)               (9,051)
                                                                    _______                _______                ______

Equity shareholders funds                                             2,245                  1,024                 4,500

Minority Interest                                                         -                   (22)                  (22)
                                                                     ______                _______                ______
Total capital and reserves                                            2,245                  1,002                 4,478
                                                                     ======                 ======                 =====



Consolidated cash flow statement

For the six months ended 30 June 2002
                                                      6 months ended         6 months ended            Year ended

                                                       30 June 2002              30 June            31 December 2001

                                                       (unaudited)             (unaudited)             (unaudited)
                                                        £'000      £'000       £'000       £'000        £'000      £'000

Net cash outflow from operating activities (note                   (818)                 (1,750)                 (2,673)
2)

Returns on investments and servicing of finance
Interest paid                                            (24)                      -                        -
Interest received                                           3       (21)          68          68           90         90
                                                        _____                  _____                    _____
Acquisitions
Acquisition of subsidiary (note 4)                      (207)                   (18)                     (18)
Net overdraft acquired with subsidiary                  (117)                      -                        -
Acquisition of fixed assets                              (26)                   (25)                     (36)
Acquisition of fixed asset investments                      -                   (40)                    (649)
Loans and advances to associates                            -                   (79)                    (509)
Loans and advances to fixed asset investments               -      (350)       (301)       (463)         (98)    (1,310)
                                                        _____                  _____                    _____
Disposals
Cash balances of discontinued activities                    -                   (28)                     (77)
Sale of business                                            -                      -                      684
Sale of tangible fixed assets                               -          -           1        (27)           18        625
                                                        _____                  _____                    _____
Financing
Issue of equity shares                                               265                       -                       -

Decrease in cash in the period (note3)                             (924)                 (2,172)                 (3,268)
                                                                    ====                  ======                   =====



Notes to the financial statements

 1. Accounting policies

    Basis of accounting

    The financial statements have been prepared in accordance with the
    applicable accounting standards under the historical cost accounting rules.


    Basis of consolidation

    The consolidated financial statements incorporate the financial statements
    of the company and all its subsidiaries. The results and cash flows of
    companies entering the group are included from the date of acquisition. The
    results and cash flows of companies leaving the group are included up to the
    date of disposal. The net assets of subsidiaries are included on the basis
    of their fair value.


    Goodwill

    Goodwill arising on the acquisition of Room Service (UK) Limited has been
    capitalised and is being amortised over its estimated useful life of ten
    years.
 2. Reconciliation of operating loss to net cash outflow from operating
    activities


                                                           30 June 2002       30 June 2001         31 December 2001

                                                            (unaudited)        (unaudited)                (audited)

                                                                  £'000              £'000                    £'000

Operating loss                                                    (489)            (1,742)                  (6,278)

Depreciation                                                         28                101                      263
Amortisation                                                        132                 13                      618
Loss on discontinued business                                         -                  -                       87
Writedown of fixed asset investments                                  -                  -                    2,704
Decrease/(increase) in stocks                                         3                  -                        -
Decrease/(increase) in current asset investments                    184                  -                        -
Decrease/(increase) in debtors                                       83                  5                      177
(Decrease)/increase in creditors                                  (559)              (112)                    (429)
(Decrease)/increase in provisions                                (200)'               (15)                      185
                                                                  _____             ______                   ______
Net cash outflow from operating activities                        (818)            (1,750)                  (2,673)
                                                                  _____             ______                   ______





 3.      Reconciliation of net cash flow to movement in net debt


                                                               30 June 2002       30 June 2001         31 December 2001

                                                                (unaudited)        (unaudited)                (audited)

                                                                      £'000              £'000                    £'000

    Net (debt)/cash brought forward                                     728              3,996                    3,996
    Movement in funds                                                 (924)            (2,172)                  (3,268)
                                                                      _____             ______                    _____
    Net (debt)/cash carried forward                                   (196)              1,824                      728
                                                                      _____             ______                    _____


 4.      Summary of the effects of acquisition of Room Service UK Limited

    Net assets acquired                                                         £'000

    Tangible fixed assets                                                         249
    Stocks                                                                         24
    Debtors                                                                       166
    Bank loans and overdraft                                                    (117)
    Other creditors                                                           (1,204)
    Provisions                                                                   (12)
                                                                               ______
                                                                                (894)
    Goodwill                                                                    2,642
                                                                               ______
                                                                                1,748
                                                                               ______
    Consideration
    Shares allotted                                                             1,466
    Acquisition expenses                                                          207
    Cost of existing investment transferred from fixed assets                      75
                                                                               ______
                                                                                1,748
                                                                               ______
 5.      Share capital and reserves

                                 Share Capital        Share premium     Profit and loss

                                         £'000                £'000               £'000

At 1 January 2002                        4,180                9,371            (12,527)

Shares issued on acquisition               698                  768
of Room Service (UK) Limited
Shares issued for cash                     126                  139
Loss for the period                                                               (510)
Costs of share issue                                           (52)                  52
                                         _____               ______             _______
At 30 June 2002                          5,004               10,226            (12,985)
                                          ====                =====              ======




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