MRM Metrodome Grp.

RNS No 5761u
METRODOME GROUP PLC
30th September 1997

METRODOME GROUP PLC - ANNUAL ACCOUNTS

Chairmans Statement

As indicated in January, the focus of the Group has moved away from video-led,
low budget films with limited theatrical releases, an area which has seen
dramatic worldwide market erosion over the last twelve months, to a more
strategic and broadly based rights-owning entity.

As previously indicated, the key mechanisms for this are film production
centred on ancillary-led US based projects and UK distribution. Whilst the
perceived renaissance in UK films is encouraging for individual producers,
with some fine films currently being exhibited, the reality is that without
retaining a substantial portion of rights and delivering product that gives
the opportunity for significant ancillary exploitation ie. franchises, TV
series, spin-offs, book series, animation etc., returns from even the few
successful British films would not be sufficient to build a meaningful library
of intellectual property rights. Inevitably, this product has, in the main, to
be sourced and financed from the US (although the Company will continue to be
involved in appropriate UK productions). From a production perspective this
requires the development of fewer films whilst retaining a much wider basket
of rights.

The shrinkage of the traditional safety net of video, part of the rationale
behind previous Metrodome productions, has further heightened the requirement
for higher profile and larger budget productions which are theatrically led,
with strong TV values. By their nature, these films tend to have a longer
gestation process but a broader band of potential exploitation. To be involved
in this type of film has cash flow implications for the Group which now only
has very modest cash resources (#296,000 as at year end) and is already
involved in the $6 million budgeted The Real Howard Spitz (Formerly called
Writers Block).

Production

The Group presently has one film in post production, The Real Howard Spitz.
Earlier this year, I went to the US to ensure that the production was cast
with an American star. We were delighted to secure the services of Kelsey
Grammer, star of the American television series Cheers and Frasier, which has
just won its fourth successive US Emmy (TVs Oscar). Kelsey has won the Emmy
for Best Actor in a Comedy Series on two occasions and his move into feature
films began last year with 20th Century Foxs Down Periscope, which went on to
gross $50m wordwide. The Real Howard Spitz co-star, Amanda Donohoe, is perhaps
best know to audiences for her performances in TVs LA Law and the feature
films The Madness of King George and Liar Liar.

The production commences its world sales process this October at MIFED, the
film market in Milan, and preliminary discussions are under way in regard to
the exploitation of the ancillaries, including a pilot for an animated
television series, a childrens book series, a soundtrack album and a book of
the film. In addition, we have sourced a screenplay that would provide the
basis for a sequel to the original production.

Distribution

The Groups distribution division has established itself remarkably quickly as
an effective UK distributor of specialist theatrical product. Already released
have been Margarets Museum, The Near Room, Johns and also Palookaville, which
made the UK Top Ten. Soon to be released are Pusher, and the acclaimed US Top
Ten hit Chasing Amy. Rights continue to be acquired and our UK library is
growing rapidly.

The division has acquired the UK rights to The Real Howard Spitz which will be
available for theatrical release in 1998 and the division will continue to
aggressively source other appropriate product. As there were no films that had
been released prior to the year end, all income derived from their
exploitation will be included in the Groups results for the year ended 31
March 1998.

Internet

The Groups internet investment in Integem continues to exhibit long term
potential but recent management changes have caused acute operational
disruption. Steps are now being taken to regain lost momentum with the recent
appointment of a new Chief Executive and the continued initiative to source
long term funding.

Strategy and Outlook

There is no guarantee that the Groups loss will not be replicated next year.
However, on the positive  side, in the current year we will receive producers
fees for The Real Howard Spitz, with some sales proceeds, potentially,
beginning to be realised at the end of the present financial year. Our US
based projects are currently with major talent agencies with a view to
attaching appropriate cast. On the distribution side, the next financial year
should see video income received from the theatrically released The Near Room
and Margarets Museum. Palookaville is now scheduled for video release in March
1998 with income receivable from our sub-distributors Fox Pathe some months
later. With Pusher and Chasing Amy to be released in the cinemas, respectively
in October and November, the Company will need to incur P & A expenditure
before its share of UK Box Office comes on stream. First TV sales are not
expected to be made until 1999.

As stated above, the Group now only has very modest cash resources. This means
that our desire to continue to develop higher profile and larger budget
productions is greatly restricted without joint venture partners in both the
US and Canada and this continues to be the basis of our operations there.

The Board have, in any event, decided to further reconsider its strategy and
are to appoint Durlacher to help them prepare a strategy paper, the outcome of
which will be announced in due course. A Board restructuring  is already
envisaged which will need to take account of the fact that I am currently
expecting to spend most of my time in the US.

In summary, an unsatisfactory year and one which is making us concentrate on
ensuring that we have the correct strategy for the future. However, the
figures do not take account of the potential value of the film library.


Paul Brooks
Chairman

30 September 1997




Consolidated Profit and Loss Account
For the year ended 31 March 1997


                                                                              
                                     1997                         1996
                                                                              
                                     Total                       Total

                                                                              
                                     #000                        #000

Turnover                              116                         346
Cost of Sales                        (238)                        (36)

Gross (loss)/profit                  (122)                        310
 
Net operating expenses               (452)                       (277)

Operating (loss)/profit              (574)                         33

Share of results of associated 
undertakings                          (94)                        (34)

Interest receivable and similar income 23                          41

(Loss)/profit on ordinary activities before
and after taxation                    (645)                        40

(Loss)/earnings per share - basic     (2.63)p                     .18p

                      -fully diluted  (2.45)p                     .17p

The financial information contained in this report does not constitute full
accounts within the meaning of Section 240 of Companies Act 1985.  Full
accounts for the year ended 31 march 1996 have been delivered to the Registrar
of Companies and the auditors report in respect thereof was unqualified.

Copies of the Report and Accounts are available from the office of Neill Clerk
Capital Limited, No: 1 Portland Place, London W1N 3AA for a period of 14 days
from the date hereof.

END

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