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Tornado Virtue PLC (WTV)

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Friday 27 September, 2002

Tornado Virtue PLC

Interim Results

Tornado Virtue PLC
27 September 2002

                               TORNADO VIRTUE PLC

                          INTERIM RESULTS ANNOUNCEMENT
                       FOR THE SIX MONTHS TO JUNE 30 2002
                               27 September 2002


Financial Headlines

•         Turnover up 39% to £870,000 (2001: £624,000)
•         Operating loss on continuing activities before exceptionals reduced
          by 25% to       -£3.5m (2001: -£4.6m)
•         On target annualised savings from restructuring of £2.9 million by
          year-end

Operational Highlights

•         Group restructuring progressing to plan
•         Merger with Virtue provides growing revenues and a strong technology
          platform
•         Acquisition of Streamway provides market leading position in IR
          communications
•         Focus on both Media & Corporate Communications sectors

Chief Executive Officer, Neil Ferris said,

"In the Interim period, our priority has been to clearly determine our position
and create a proper platform to ensure the Group achieves profitability in the
near future.  Our merger with Virtue Broadcasting Limited has brought to the
Group a strong management team that has delivered a complementary business with
growing revenues and a technology platform that will enable us to deliver
profitability in the short to medium term.  Following the merger we conducted a
strategic review which led to us streamlining our focus on the following market
segments: a music industry enterprise system for the Sharing, Promotion and
Exploitation of digital content; and a Corporate Communications platform for
delivering daily 'one-to-many' on-line business communications and
web-conferencing.  The key effects of this review were a reduction in staff of
47 per cent since the 2001 year-end, with associated operating expenditure
savings of £2.7 million per annum and the creation of two new divisions which
will focus on Corporate and Media sectors in order to respond more effectively
to our customers' needs. Both divisions are tasked with positioning our product
offering and delivering significant revenues in their market segments based on
the core application and delivery technologies owned by the Group.

We believe that the long term prospects of the Group have been enhanced by the
merger and subsequent acquisitions, however they still depend upon an increase
in volume and consistency of revenues streams together with further operating
cost savings."

For further information contact:

Tornado Virtue plc                                     01628 498600

Neil Ferris, Chief Executive Officer

Gareth Roblin, Chief Financial Officer



Impact Consultancy                                     020 7479 4770

Simon Forrest,                     mob:                07885 317746

Jane Wilson                        mob:                07855 458746



                               TORNADO VIRTUE PLC


                          INTERIM RESULTS ANNOUNCEMENT
                       FOR THE SIX MONTHS TO JUNE 30 2002
                              27 September 2002

Chairman's Statement

2002 has so far proven to be an extremely busy year for me as Chairman and one
that has seen much change within the company. The merger with Virtue, the
acquisition of Streamway and the consolidation of our Australian operation
together with the work we have done to achieve an effective reduction to our
operating cost base has now provided the Group with a solid platform from which
to continue to grow its existing and established businesses.

Since launch, we have developed an embryonic business from a standing start and
built up an impressive list of repeat customers along the way. I would like to
thank my colleagues and staff for all their hard work and efforts over this
period without whom this would not have been possible.

The transactions that we have completed this year have also brought to the Group
experienced management teams that have significantly strengthened both our
corporate and media operations.

As a result I feel that the end of this current financial year would be an
appropriate time for me to stand down as Chairman and move on to spend time on
other personal ventures. I will of course retain close contact with the Board
during my hand over period.

I will be leaving behind a Board and management team in whom I have a great deal
of trust and respect and I am confident that they can successfully take the
Group to the next stage of its development. My personal thanks again go out to
all those who have contributed to the Group's development so far.

Ian Watson
Executive Chairman
26th September 2002

Chief Executive's Review

At the time of my appointment as Managing Director of Tornado Group in March
2002, I recognised the fact that much of Tornado's model was dependent on a
large-scale consumer uptake of purchase of digital audio content on-line. Many
of the Group's activities surrounded the deployment and integration of our
systems with on-line retailers rather than the development of short to medium
term revenue streams.

Although I continue to believe in the long-term viability of this business
model, our priority was to clearly determine our position and create a proper
platform to ensure the Group achieves profitability in the short to medium term.

With this in mind we initiated the merger with Virtue Broadcasting Limited.
Virtue brings to the Group a strong management team that has delivered a
complementary business with growing revenues and a technology platform to enable
our merged Group to deliver the objective of profitability in the short to
medium term.

On completion of this merger three new Directors joined the Board in June 2002,
Nick English and Giles English as Executive Directors and Ohad Finkelstein as
Non-Executive Director. The new team conducted a strategic review which led to
us streamlining our focus on the following market segments: a music industry
enterprise system for the Sharing, Promotion and Exploitation of digital
content; and a Corporate Communications platform for delivering daily '
one-to-many' on-line business communications and web-conferencing.

The strategic review resulted in the decision to restructure the Group, of which
the key aspects delivered to date are:

•       The creation of two new divisions which will focus on Corporate and
Media sectors in order to respond more effectively to our customers' needs. Both
divisions are tasked with positioning our product offering and delivering
significant revenues in their market segments based on the core application and
delivery technologies owned by the Group.

•       A personnel reorganisation that has led to a reduction in the merged
headcount of 47 per cent since the 2001 year-end. This will provide an operating
expenditure saving of £2.7 million per annum of which £0.7 million has benefited
the first half of 2002, together with a one-off exceptional charge of around
£0.6 million.

Following the restructuring process we have identified the following goals:

•       To continue to review our operating expenditure with a view to
increasing the margin on each product sale through automation of operations and
at the same time, addressing the fixed cost of our delivery networks to remove
duplicate costs.

•       To consolidate our position as market leader in the UK Music Industry
by working with our customers who currently deliver millions of files, streams &
downloads per month. Richer functionality will be delivered to our customers
providing them with more flexible ways to Share, Promote and Exploit digital
content. This is both within and outside their organisations and across multiple
channels such as Intranets, Internet and Mobile. We will look to exploit our
developing relationships to obtain wider European and global contracts.

•       To secure our position in the Investor Relations ("IR") Communications
Market by increasing our market share.  We will achieve this through expansion
of our reseller base and live event product offering.  Our current position
includes IR webcast services for 32 of the FTSE100 and our current resellers
include Cantos, CCBN, Hemscott and PR Newswire. We plan to expand our current
customer base within the FTSE250.

•       To continue to leverage our leading position in the IR segment to the
'one-to-many' on-line business communications and web-conferencing market. To do
this we will reposition our on-line event services to a technology product
offering. This will deliver to corporate customers increased functionality, ease
of use and cost benefit enabling daily use across organisations with a clear
return on investment. Our customers in this market include Siebel, BP, Reuters,
and Roche.

The Executive team has translated these goals, in a short space of time, into a
solid operating plan for our business. I am pleased to report that progress has
already been made, particularly, with the acquisition of Streamway Netcasting
Limited. Streamway further strengthens our Corporate management team and
together with our existing Corporate business gives us a leading position in the
FTSE100 Investor Relations Communications Market.

I am pleased that the trading results in the first half of this year show
revenue growth for continuing businesses of 22% compared to the second half of
2001. The current outlook supports our belief that we will continue to show
revenue growth in the remainder of 2002.

This is a group with a dedicated, motivated staff and unique fundamental
strengths, surrounding our technology platform, delivery expertise and a leading
position in our chosen market segments.  These factors offers a much broader
prospect for the future, and once profitability is established I am determined
to exploit this potential.

Board and Staff

As a result of the merger to create Tornado Virtue there have been a number of
Board changes. I would like to welcome to the Board, Giles English and Nick
English, who as founders of Virtue have taken the business from modest
foundations to being a significant participant in the digital market place. I
also welcome Ohad Finkelstein to the Board as a non-executive director. Ohad was
formerly Chairman and Chief Executive of Interoute Finance PLC and brings
considerable management experience to the group.  John Gildersleeve and Peter
Donnelly both stepped down from the Board on completion of the merger  with
Tornado and I would like to thank them for their considerable contribution to
the Group.  In particular I would like to extend my thanks to Ian Watson for his
personal contribution who today announces his intention to stand down as
Chairman and as a Director of the Group with effect from 31 December 2002 and
wish him every success with his future project.  The Board will look to appoint
a Non-Executive Chairman to fulfil this role before the year-end.

Current Trading and Prospects

The current trading outlook supports Management's belief that there will be
continued revenue growth in second half of 2002. We believe that the long term
prospects of the Group have been enhanced by the merger and subsequent
acquisitions, however they still depend upon an increase in volume and
consistency of revenues streams together with further operating cost savings. As
with any growing business there remains uncertainty and risk about the ability
of the Group to achieve revenue growth and operating cost savings as we
anticipate, and to do this within the Group's existing funding. The Directors
will continue to focus on this important issue.

Neil Ferris
Chief Executive Officer


26 September 2002



Financial Review

The first half of 2002 was a period of significant change for the Group as it
restructured its operations and refocused on product offerings that will deliver
profitability in the short to medium term.

Merger

As announced on 24 June 2002 the Company merged with Virtue Broadcasting Limited
to create Tornado Virtue plc. The consideration for the entire issued share
capital of Virtue was the issue 45,918,489 new ordinary shares of 5.0 pence
each, which represented approximately 45 per cent of the share capital as
enlarged by the merger. Based on a share price of 6.5 pence at the date of the
acquisition this valued Virtue at £3.0 million.

The transaction qualified for merger accounting under generally accepted
accounting principles. This means that the consolidated results and net assets
of both companies are combined to present the financial statements as if the
merger had always been in place and that the results reflect the full trading of
Tornado and Virtue for all periods presented.

The Group incurred £278,000 of transaction costs in relation to the merger,
which have been presented as an exceptional merger expense on the face of the
profit and loss account.

In the circular sent to shareholders in May the Company announced that it would
implement various cost savings presented to the enlarged group. The target cost
savings as a result of the merger were £1.5 million per annum on top of already
implemented savings of £1.4 million per annum. To obtain these savings the Group
incurred one-off operational exceptional charges of £577,000 in the six months
to 30 June 2002.

Turnover

The Group has continued to deliver turnover growth for its continuing
operations, posting revenues in the six months to 30 June 2002 of £870,000,
which represents a 22 per cent increase over revenues of £714,000 in the six
months to 31 December 2001 and a 39 per cent increase over the revenues of
£624,000 in the six months to 30 June 2001.

Of the revenues earned on continuing operations 6% was generated by Virtue
Broadcasting Pty Ltd, the Group's Australian operation.

Operating Loss

The Group has reduced its half yearly operating losses, excluding operating
exceptional items for continuing operations, recording a loss in the six months
to 30 June 2002 of £3.5 million compared to a loss of £4.8 million in the six
months to 31 December 2001 and a loss of £4.7 million in the six months to 30
June 2001. This is principally due to staff cost savings achieved during the six
months to 30 June 2002 of £0.7 million prior to the merger, a one-off release of
network service over accruals of £0.4 million together with the reported revenue
growth. Further operating cost savings are central to the Group's objective of
generating profits in the short to medium term and we expect to incur further
one-off charges in the second half of 2002 to achieve this.

The Group incurred a number of operating exceptional items, which are discussed
in the merger section above.

Liquidity and Financing

The Group's cash outflow before financing in the six months to 30 June 2002 was
£2.9 million compared to a cash outflow in the six months to 31 December 2001 of
£2.4 million (including £1.0 million on disposal of fixed assets) and a cash
outflow of £4.8 million in the six months to 30 June 2001. Capital expenditure
was reduced by £0.6 million to £0.1 million during the six months to 30 June
2002 compared to the equivalent period in 2001.

As at 30 June 2002 the Group had cash balance of £5.1 million (31 December 2001:
£7.4 million) of which £0.3 million was restricted funds. The Group continues to
have no gearing.

Post balance sheet events

On 30 July 2002 the Group announced that it had acquired 100 per cent of
Streamway Netcasting Limited.  The consideration for the acquisition was
11,396,552 new ordinary shares of 5.0 pence each in Tornado Virtue plc
representing 10 per cent of the enlarged issued share capital of the Group. This
values Streamway at £598,000 based on a share price of 5.25 pence. In addition,
Tornado Virtue agreed to repay £195,000 of shareholders' loans.

In the year to 30 April 2002, Streamway recorded an operating loss of £510,000
on turnover of £574,000. The operating loss includes a charge in respect of
development cost written off to the profit and loss accounts of £236,000. At 30
April 2002, Streamway had net liabilities of £226,000.

Since the acquisition, Streamway has continued to deliver growth in revenues.
With the expected synergies from the integration of Streamway's business with
that of the Group, it is expected that Streamway will generate positive cash
flows to the group by the latter part of 2002.

On 13 August 2002 the Group announced that its Australian operating subsidiary,
Virtue Broadcasting Pty Ltd, had acquired 100 per cent of Viewpoint Media Pty
Ltd. The consideration for the acquisition was 298,633 new ordinary shares of
Virtue Broadcasting Pty Ltd representing 20 per cent of the entire issued share
capital of that company reducing the Group's holding to 63%.

Investments

On 26 June 2002 the Group announced that it had acquired a 25 per cent
shareholding in Vidzone. The consideration for this investment was provision of
technical and business infrastructure services by the Group to Vidzone. Vidzone
has a collection of licensed music videos that are being made available to
broadband providers and ISP's to sell as a music video subscription service and
is offered as part of the RealOne service.

On 15 April 2002 the Group announced that it had entered into a joint venture
with 3mv, a leading provider of sales and distribution services for independent
record companies, to create 3mv Digital. 3mv Digital will act as a reseller of
certain of the Group's music products to independent record companies.

Discontinued Operations

On 5 April 2002 the Group disposed of its Canadian subsidiary, Virtue
Broadcasting Company, Inc. to its management team. In November 2001 the Group's
Mexican subsidiary, Virtue Latino S.A. de C.V., effectively ceased operations.
The operating results of these subsidiaries are classified as discontinued
operations in the profit and loss account. The Group made a profit on disposal
of these assets in the six months to 30 June 2002 of £50,000.

Gareth Roblin
Chief Financial Officer
26 September 2002


Group Profit and Loss Account


                                                                     Unaudited    Unaudited    Unaudited
                                                                       6 month      6 month     12 month
                                                                  period ended period ended period ended
                                                                  30 June 2002 30 June 2001  31 December
                                                                                                    2001
                                                        Notes            £'000        £'000        £'000

Turnover

Continuing operations                                                      870          624        1,338
Discontinued operations                                                    161          213          380
Total turnover                                                           1,031          837        1,718

Operating loss
Continuing operations                                                  (4,095)      (4,649)      (9,550)
Discontinued operations                                                   (58)         (57)        (361)
Group operating loss                                                   (4,153)      (4,706)      (9,911)

Included within the operating loss above are the
following exceptional costs:
Restructuring costs                                                      (175)            -        (152)
Merger integration costs                                                 (402)            -            -
Total operational exceptional costs                                      (577)            -        (152)

Share of loss of joint venture
Continuing operations                                                     (14)            -            -

Total operating loss: group and share of joint venture                 (4,167)      (4,706)      (9,911)

Merger expenses                                                          (278)            -            -
Profit on disposal of assets                                                48            -          121

Loss on ordinary activities before interest                            (4,397)      (4,706)      (9,790)

Interest receivable                                                        109          183          309

Loss on ordinary activities before tax                                 (4,288)      (4,523)      (9,481)

Tax on result on ordinary activities                                         -            -          460

Loss on ordinary activities after tax                                  (4,288)      (4,523)      (9,021)

Equity minority interest                                                  (10)           53          198

Loss for the financial period                                          (4,298)      (4,470)      (8,823)

Dividends                                                                    -            -            -

Retained loss for the financial period                                 (4,298)      (4,470)      (8,823)

Loss per share

Basic                                                                   (4.2p)       (5.4p)       (9.9p)


There were no material recognised gains or losses, other than those shown in the
profit and loss account.

Group Balance Sheet

                                                                     Unaudited    Unaudited    Unaudited
                                                                         as at        as at        as at
                                                                  30 June 2002 30 June 2001  31 December
                                                                                                    2001
                                                        Notes            £'000        £'000        £'000

Fixed Assets
Intangibles                                                                (3)         (20)          (2)
Tangible assets                                                          1,124        3,038        1,611
Investments                                                                 64           70           64

                                                                         1,185        3,088        1,673

Current Assets

Debtors                                                                  1,609        3,227        2,280

Cash at bank and in hand                                                 5,155        5,357        7,447

                                                                         6,764        8,584        9,727

Creditors: amounts falling due within one year                         (1,938)      (1,278)      (1,416)

Net current assets                                                       4,826        7,306        8,311

Total assets less current liabilities                                    6,011       10,394        9,984

Creditors: amounts falling due in more than one year                      (36)            -        (186)

Provisions for Liabilities and charges                                   (353)            -            -

Net assets                                                               5,622       10,394        9,798

Capital and Reserves

Ordinary share capital                                                   5,128        4,347        5,119
Deferred share capital                                                  11,290        8,200       11,290

Share premium account                                                   12,011       12,203       12,001
Other reserves                                                         (3,814)      (3,814)      (3,814)

Profit and loss account                                               (18,867)     (10,495)     (14,696)

Equity shareholders' funds                                               5,748       10,441        9,900

Equity minority interests                                                (127)         (48)        (103)

Non-equity minority interests                                                1            1            1

Capital Employed                                                         5,622       10,394        9,798




Group Cash Flow Statement
                                                                     Unaudited    Unaudited    Unaudited
                                                                       6 month      6 month     12 month
                                                                  Period ended Period ended Period ended
                                                                  30 June 2002 30 June 2001  31 December
                                                                                                    2001
                                                        Notes            £'000        £'000        £'000

Net cash outflow from operating activities                             (3,002)      (4,312)      (7,853)

Returns on investments and servicing of finance

Interest received                                                          109          183          309

Taxation

UK corporation tax - Research & Development tax credit                       -            -          329

Capital expenditure and financial investment

Purchase of tangible fixed assets                                         (64)        (675)      (1,042)
Sale of tangible fixed assets                                                -            -        1,081
Purchase of fixed asset investment                                           -         (20)         (14)
Disposal of fixed asset investment                                          50            -            -

Cash outflow before use of liquid resources and                        (2,907)      (4,824)      (7,190)
financing

Financing - issue of ordinary shares                                       613        2,448        6,890

Total cash outflow in period                                           (2,294)      (2,376)        (300)


Notes to the Group Cash Flow Statement

                                                                     Unaudited    Unaudited    Unaudited
                                                                       6 month      6 month     12 month
                                                                  Period ended Period ended Period ended
                                                                  30 June 2002 30 June 2001  31 December
                                                                                                    2001

Reconciliation of operating loss to net cash outflow
from
operating activities
                                                                         £'000        £'000        £'000

Operating loss                                                         (4,167)      (4,706)      (9,911)

Exceptional items - merger expenses                                      (278)            -            -

Depreciation charges                                                       549          707        1,395

Amortisation of intangibles                                                  1            3         (15)

Impairment of assets                                                         -            -          171

UITF 17 stock option charge                                                 90            -          203

Non cash transaction                                                        34           41           82

Decrease / (increase) in debtors                                            44        (362)        (238)

Increase in creditors                                                      725            5          460

Net cash outflow from operating activities                             (3,002)      (4,312)      (7,853)


Reconciliation of net cash flow to movement in net
funds
                                                                         £'000        £'000        £'000

Change in net funds resulting from cash flows                          (2,294)      (2,376)        (300)



Translation difference                                                      37         (19)           23

Other non cash movements                                                  (35)           28            -

Movement in net funds in the period                                    (2,292)      (2,367)        (277)

Net funds at beginning of the period                                     7,447        7,724        7,724

Net funds at end of the period                                           5,155        5,357        7,447

Notes to the financial information for six months to 30 June 2002

1.     Basis of preparation

On 24 June 2002 Tornado Group PLC merged with Virtue Broadcasting Limited to
form Tornado Virtue plc (the Group).  The interim statement has been prepared
using the principles of merger accounting.

The interim statement, which is unaudited, complies with relevant accounting
standards.  The accounting policies have been applied on a basis consistent with
those applied in the 2001 Annual Report and Financial Statements, which were
prepared in accordance with accounting principles generally accepted in the
United Kingdom.

This is the first period for which consolidated financial information has been
presented for the merged group.  The financial statements for Tornado Group PLC
have been filed with the Registrar of Companies.  The auditors' report on the
statutory accounts of Tornado Group PLC for that period was unqualified and did
not contain a statement under either Section 237 (2) or (3) of the Companies Act
1985.

Copies of the 2001 Annual Report and Financial Statements are available from the
Company Secretary, Tornado Virtue plc, Carmelite, 50 Victoria Embankment, EC4Y
0DX.

This interim statement was approved by the Board on 26 September 2002.

2.     Turnover and operating result

Turnover resulted from the Group's sole class of business, digital media
distribution, during the period under review.

3.     Loss per share

Basic loss per share is based on the loss on ordinary activities after taxation
and the weighted average number of 5p ordinary shares in issue during the period
under review of 102,375,601 (June 2001 - 82,656,923; December 2001 -
89,165,325).

The ordinary shares used to calculate the basic loss per share exclude the
deferred shares as they have no rights to dividends and negligible rights to
capital.

The options outstanding at the end of the period do not have a dilutive effect
on the loss per share.

4.     Reconciliation of movements in equity shareholders' funds
                                                                     Unaudited    Unaudited    Unaudited
                                                                       6 month      6 month     12 month
                                                                  Period ended Period ended Period ended
                                                                  30 June 2002 30 June 2001  31 December
                                                                                                    2001
                                                                         £'000        £'000        £'000

Opening equity shareholders' funds                                       9,900       10,346       10,346


Retained loss for the period                                           (4,298)      (4,470)      (8,823)

Credit in respect of UITF 17 charge                                         90            -          203

Issue of ordinary shares net of costs                                    3,004        4,554        8,214

Exchange difference                                                         37           11         (40)

Merger reserve adjustment                                              (2,985)            -            -


Closing equity shareholders' funds                                       5,748       10,441        9,900


5.     Movement in profit and loss reserve

                                                                     Unaudited    Unaudited    Unaudited
                                                                       6 month      6 month     12 month
                                                                  period ended period ended period ended
                                                                  30 June 2002 30 June 2001  31 December
                                                                                                    2001
                                                                         £'000        £'000        £'000

Opening profit and loss reserve                                       (14,696)      (6,036)      (6,036)


Retained loss for the period                                           (4,298)      (4,470)      (8,823)

Exchange differences                                                        37           11         (40)

Credit in respect of UITF 17 charge                                         90            -          203

Closing profit and loss reserve                                       (18,867)     (10,495)     (14,696)





6.     Merger of Tornado Group PLC (Tornado) and Virtue Broadcasting Limited
(Virtue)

As explained in the Basis of preparation note, on 24 June 2002 Tornado and
Virtue merged their respective businesses.   The merger was effected by the
acquisition by Tornado of the entire share capital of Virtue.  The consideration
was satisfied by the issue of 45,918,489 shares at 6.5p.  The fair value of the
consideration was £3.0m based upon the mid market price of Tornado shares of
6.5p at closing on 23 June 2002.  No significant adjustments have been necessary
to the assets and liabilities of Virtue which have been recorded at their book
values immediately prior to the merger and no adjustments were made to the net
assets of Tornado.  The book value of net assets of Tornado and Virtue at the
date of consolidation were £4.1m and £1.5m respectively.



The analysis of the merged results is as follows:


6 month period ended 30 June 2002                                    Tornado          Virtue    Total for
                                                                   Group PLC   Broadcast-ing   the period
                                                                                     Limited
                                                                       £'000           £'000        £'000

Profit and loss account


Turnover
Continuing                                                                76             794          870
Discontinued                                                               -             161          161

Total turnover                                                            76             955        1,031

Operating loss
Continuing                                                           (3,415)           (694)      (4,109)
Discontinued                                                               -            (58)         (58)

Total operating loss                                                 (3,415)           (752)      (4,167)

Merger expenses                                                        (228)            (50)        (278)
(Loss) / profit on disposal of assets                                    (2)              50           48

Loss on ordinary activities before interest and tax                  (3,645)           (752)      (4,397)

Interest                                                                 112             (3)          109

Loss on ordinary activities before tax                               (3,533)           (755)      (4,288)

Tax                                                                        -               -            -

Loss on ordinary activities after tax                                (3,533)           (755)      (4,288)


6.     Merger of Tornado Group PLC (Tornado) and Virtue Broadcasting Limited
(Virtue) (continued)


6 month period ended 30 June 2001                                    Tornado          Virtue    Total for
                                                                   Group PLC   Broadcast-ing   the period
                                                                                     Limited
                                                                       £'000           £'000        £'000

Profit and loss account


Turnover
Continuing                                                                26             598          624
Discontinued                                                               -             213          213

Total turnover                                                            26             811          837

Operating loss
Continuing                                                           (3,815)           (834)      (4,649)
Discontinued                                                               -            (57)         (57)

Total operating loss                                                 (3,815)           (891)      (4,706)


Loss on ordinary activities before interest and tax                  (3,815)           (891)      (4,706)

Interest                                                                 172              11          183

Loss on ordinary activities before tax                               (3,643)           (880)      (4,523)

Tax                                                                        -               -            -

Loss on ordinary activities after tax                                (3,643)           (880)      (4,523)





12 month period ended 31 December 2001                               Tornado          Virtue    Total for
                                                                   Group PLC   Broadcast-ing   the period
                                                                                     Limited
                                                                       £'000           £'000        £'000

Profit and loss account


Turnover
Continuing                                                                40           1,298        1,338
Discontinued                                                               -             380          380

Total turnover                                                            40           1,678        1,718

Operating loss
Continuing                                                           (7,285)         (2,265)      (9,550)
Discontinued                                                               -           (361)        (361)

Total operating loss                                                 (7,285)         (2,626)      (9,911)

Profit on disposal of assets                                               -             121          121

Loss on ordinary activities before interest and tax                  (7,285)         (2,505)      (9,790)

Interest                                                                 302               7          309

Loss on ordinary activities before tax                               (6,983)         (2,498)      (9,481)

Tax                                                                      460               -          460

Loss on ordinary activities after tax                                (6,523)         (2,498)      (9,021)


7.     Cash at bank and in hand

Cash at bank at 30 June 2002 of £5,155,000 included £315,000 of restricted funds
(31 December 2001 £318,000).  This restricted cash balance comprises £313,000
rent deposit monies and £1,500 of cash due to third parties at 30 June 2002.

8.     Post balance sheet events

On 30 July 2002 the Group acquired Streamway Netcasting Limited.  The
consideration for the acquisition was satisfied by the issue of 11,396,552
shares of 5p each.  The fair value of the consideration was £598,000 based upon
the mid market price of Group shares of 5.25p at closing on 29 July 2002.  In
addition the Group agreed to repay £195,000 of shareholders' loans and Tornado
Entertainment Limited have placed £200,000 of cash with Danske Bank as security
against a loan of £200,000 provided by Danske Bank to Streamway Netcasting
Limited.  These funds will be included in the Group's accounts as cash and
disclosed as restricted funds.

On 13 August 2002 the Group's Australian subsidiary Virtue Broadcasting Pty
Limited acquired 100% of the share capital of Viewpoint Media Pty Limited.  The
consideration for the acquisition was satisfied by the issue of shares in Virtue
Broadcasting Pty Limited to the stakeholders of Viewpoint Media pursuant to
which they now hold a stake representing 20% of the enlarged issued share
capital of Virtue Broadcasting Pty Limited.

9.     Copies of Interim Statement

Copies of the Interim Statement will be sent to shareholders shortly and
thereafter will be available from the Company Secretary, Tornado Virtue plc,
Carmelite, 50 Victoria Embankment, London, EC4Y 0DX.  Copies of this
announcement will appear on the company's web site http://www.tornadovirtue.com.


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            The company news service from the London Stock Exchange