Interim Results

02 November 2009

30 October 2009

Probability plc

(‘Probability’ or ‘the Company’)

Interim Results

Investing for growth as market opportunities expand

Probability plc, the AIM quoted mobile gambling specialist, announces its unaudited interim results for the six months ended 30 September 2009.

Financial Highlights

• Net gaming revenues of £2,478,000 (6 mths. to Sept.2008: £2,621,000)
• Revenues up 4.7% on 6 mths. to March 2009
• Pre-tax loss of £255,000, following increased investment in technology and people. (6 mths. to Sept.2008: Profit: £166,000)*
• Net cash and equivalents approx. £2m at 30 September 2009.

Operational Highlights

• Direct to consumer operations (“LadyLucks”)
  • 116,619 new players registered.
  • £46m. of mobile cash wagers handled.
  • New game launches including Battleship slots, Ramesses Riches and “X-Factor” slots.

• Business-to-business
  • Orbis partnership agreement concluded.
  • International business development agreement with Dragonfish/888.com.
  • mFuse “Novo” integration platform partnership.
  • New contract win with Mirror Group Newspapers.

• Corporate
  • Recognition by Deloitte as no. 4 in their Technology “Fast 50″, fastest growing companies over the past 5 years in the UK.
  • Product development agreement with NextGen gaming, a specialist Slots designer.

* excluding share based payments of £20,000 (2008 – £63,000)

Charles Cohen, CEO of Probability, commented:

“The first half of this year went pretty much according to plan, with progress on all fronts. Net gaming revenues were 4.7% better than the six months to March 2009 and we have been able to increase investment in our technology and business development capabilities. This investment will enable us to take advantage of the wider opportunities we see as a gaming operator and as a mobile gaming platform provider for on-line operators.

Whilst we continue to grow our core business and explore these opportunities, we will be investing further and as a consequence we now expect to defer profitability at least until the next financial year. Curtailing investment at this stage in the Company’s development for the sake of short term profits is not, in our view, in the interests of creating long term value for shareholders.

The key investments are in technology and people to allow us to grow faster and in more product areas. We are internationalising our platform to allow for multi-lingual and multi-currency services, and have also created a dedicated team for smartphone applications including iPhone, Blackberry and Android devices. A project is also well under way to more than double the operating capacity of our systems in anticipation of significant growth in the next few years.

I am also pleased to be able to announce that we have appointed Matthew Sunderland, a senior executive from G2 – the on-line services division of GTech, who joins us as Managing Director, Consumer Brands. Matt will be responsible for all of our direct-to-consumer business and brings with him years of hands on experience creating and building on-line gaming services for St. Minver and G2. At the same time, Glenn Elliott, who is currently Chief Operating Officer, will be focussing on our business-to-business services and will be working closely with our partners such as Dragonfish and Orbis to ensure the success of this new division within Probability. Glenn’s background in the mobile industry, particularly with Orange, makes him the ideal person to lead this new division.”

For further information visit www.probabilityplc.com or contact:

Charles Cohen (CEO)            Probability plc                 Tel: 020 7290 0640

Bruce Garrow Collins Stewart Europe Limited Tel: 020 7523 8350

Chairman’s Statement

“Probability continues to provide a bright spot in an otherwise challenging period for on-line gaming and betting generally as the macro-economic environment continues to impact operators. The Company’s strategy to focus on being the best specialist operator and technology provider in the mobile space continues to afford us with a sound basis for our business and ever more opportunities for expansion.

Rather than being fazed by the complexities of the mobile world, which have hindered the efforts of much larger companies to enter this market, Probability is thriving thanks to a talented and dedicated team, its absolute focus on mobile, and of course the benefit now of five years of continued investment and operational experience.

The internal changes we are making to create a business-to-business and a direct-to-consumer division, headed by two talented executives, is an important moment for us as we drive the business forward. We have and will continue to invest in expanding our technology base and our revenue generating capabilities in both these lines of business.

The Board, the management team and the key shareholders are as one in strongly supporting the ambitious goals we have set ourselves to grow the business and create long term value. We believe that we can do this through re-investment of revenues and careful use of our capital, and that we have sufficient resources to meet the plans currently in place. At the cost of delaying short term profitability, we expect to deliver a much more valuable business in the longer term.”

Graham Parr

Chairman

Condensed Statement of Cash Flows
	Half Year	Half Year	Year Ended
	30 September	30 September	31 March
	2009	2008	2009
	£’000	£’000	£’000
	(unaudited)	(unaudited)	(audited)
Cash flows from operating activities
Profit/(loss) before tax	(275)	103	(153)
Adjustments for:
Depreciation	29	25	50
Share based payments	20	63	92
Finance income	(11)	(50)	(100)
(Increase)/decrease in trade and other receivables	104	(91)	(245)
(Decrease)/increase in trade and other payables	(130)	(90)	40
Cash used in operations	(263)	(40)	(316)
Cash flow from investing activities
Capital expenditure	(24)	(10)	(41)
Finance income	11	50	100
Net cash generated from/(used in) investing activities	(13)	40	59
Cash flows from financing activities
Issue of shares	-	-	-
Net cash generated from financing activities	-	-	-
Net increase/(decrease) in cash and cash equivalents	(276)	-	(257)
Cash and cash equivalents at the beginning of the period	2,244	2,501	2,501
Cash and cash equivalent at the end of the period	1,968	2,501	2,244

Condensed Statement of Changes in Equity

General information

Probability is a public limited company incorporated in the United Kingdom under the Companies Act (Registration No. 5830059). The Company’s registered address is Staple Court, 11 Staple Inn Buildings, London, WC1V 7QH. The company’s ordinary shares are traded on the Alternative Investment Market (‘AiM’). Copies of this report will be available to shareholders on the Company’s website. Further copies of the report may be obtained from the above address or on the Investor Relations section of the Company’s website at www.probabilityplc.com

Basis of Accounting

These interim accounts have been prepared in accordance with International Financial Reporting      Standards (IFRSs), as adopted for use in the European Union, issued by the International Accounting Standards Board (IASB).

The interim financial information has been prepared using accounting policies set out in the Group’s statutory accounts for the years ended 31 March 2009 and 2008.

During the period the Group has adopted IAS1 (amended) ‘Presentation of Financial Statements’. The effect of adopting this standard is presentational and has no impact on the reported profit or net assets of any period. The adoption of IAS1 has meant that the income statement has been renamed the statement of comprehensive income.

This statement does not comprise statutory accounts as defined in Sections 434(3) and 435(3) the Companies Act 2006. The financial information for the year ended 31 March 2009 is an extract from the latest company accounts  on which the auditors gave an unqualified opinion. The audit report given on these financial statements did not include reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not include a statement under section 237 (2) or (3) of the Companies Act 1985. These financial statements have been filed with the Registrar of Companies. The results for the period ended 30 September 2009 and for the period ended 30 September 2008 are unaudited.

The financial statements are presented in sterling and all values are rounded to the nearest thousand pounds (£‘000) except where otherwise indicated.

Net gaming revenue

Revenue is recognised to the extent that its probable economic benefits will flow to the Group and the revenue can be reliably measured.  Revenue is recognised in the accounting periods in which the transactions occur.

Revenue is recognised when a bet is placed by the player.  Revenue comprises net gaming revenue derived from mobile phone gambling operations.  Net gaming revenue is defined as the difference between the amount of bets placed by the players less amounts won by players. It is stated after deduction of certain bonuses granted to players.

Commission that is derived from the Group’s “white label” operations (third party entities that use the Group’s platform) and Poker is included within net gaming revenue.

Taxation

Under IFRS deferred tax is provided in full using the balance sheet liability method, on the basis of temporary differences between the carrying value of assets and liabilities in the balance sheet and their tax bases.  Deferred tax assets are recognized only to the extent that it is probable that they can be utilized against future taxable profits.  Current tax for the period is not payable due to the availability of prior period losses.

Earnings/(Loss) per share

The basic earnings per ordinary share has been calculated using the loss for the financial period of

£275,000 (30 September 2008 – profit of £103,000 and 31 March 2009 – loss of £153,000) and weighted average number of ordinary shares of  21,611,000 (30 September 2008- 18,762,000 and 31 March 2009- 21,597,000).

For the period ended 30 September 2008 the weighted average number of diluted shares used to calculate diluted EPS was  20,353,000.  As the Group made losses in other periods the loss per share has not been diluted for those periods.