TIDMBOOM
RNS Number : 0550P
Boomerang Plus PLC
28 September 2011
Boomerang Plus plc
('Boomerang', 'the Company' or 'the Group')
Final Results
Boomerang Plus plc (AIM: BOOM.L), a profitable media investment
group, announces its preliminary results for the year to 31 May
2011.
FINANCIAL HIGHLIGHTS
-- Revenue up 25.8% to GBP26.93m (2010: GBP21.41m).
-- Gross profit up 30.2% to GBP4.55m (2010: GBP3.50m).
-- Adjusted EBITDA** up 52.5% to GBP1.93m (2010: GBP1.27m).
-- Adjusted operating profit* up 50.5% to GBP1.17m (2010:
GBP0.78m).
-- Profit before tax up 90.7% to GBP1.02m (2010: GBP0.54m).
-- Adjusted basic EPS* up 20.7% to 6.60p (2010: 5.47p).
-- Cash and cash equivalents down to GBP2.59m (2010: GBP3.07m)
due to capital investment programme.
OPERATIONAL HIGHLIGHTS
-- Continued progress in diversifying the Group's customer
base.
-- Successful integration of Indus Films Limited, acquired in
October 2009.
-- Continued organic growth of Advertiser Funded Programming
("AFP").
-- First two contracts from Disney awarded during the year.
-- 659 hours of television programming in calendar year 2010
(2009: 428).
OUTLOOK
-- Post year-end acquisition of Oxford Scientific Films.
-- Post year-end acquisition of Harlequin Talent Agency, through
a joint venture with Bryn Terfel.
-- Increasing commitment to, and opportunities from, Nations
commissioning from Network broadcasters.
-- Strong balance sheet to support future growth with net assets
of GBP9.5m.
-- A strong start to trading in the 2012 financial year.
Huw Eurig Davies, Chief Executive Officer of Boomerang Plus,
commented:
"Organic Network growth, our recent acquisitions and growth in
AFP have all contributed to diversifying the Group's customer base
and widening its intellectual product base. This will continue to
drive further growth and provide us with opportunities to increase
out gross profit margins. The Group has made a strong start to
trading in the current financial year and we will also continue to
look for further acquisitions that can add value for shareholders
in a fast-changing media marketplace."
* adjusted for professional fees in relation to corporate
transactions (2011 - GBP0.02m, 2010 - GBP0.07m), provision for
impairment of investments (2011 - GBPnil, 2010 - GBP0.07m),
amortisation of intangible assets arising on business acquisitions
(2011 - GBP0.02m, 2010 - GBP0.02m), and share-based payments (2011
- GBPnil , 2010 - GBP0.01m).
**adjusted operating profit as defined above before depreciation
(2011 - GBP0.72m, 2010 - GBP0.45m) and other amortisation (2011 -
GBP0.04m, 2010 - GBP0.04m).
Contacts:
Boomerang Plus plc Tel : 029 2055 0550
Huw Eurig Davies, Chief Executive Officer
Mark Fenwick, Finance Director
finnCap Limited
Geoff Nash/ Charlotte Stranner
Simon Starr/ Victoria Bates (broking) Tel: 020 7220 0500
Walbrook PR Ltd Tel: 020 7933 8780
Paul McManus paul.mcmanus@walbrookpr.com
Paul Cornelius paul.cornelius@walbrookir.com
About Boomerang Plus plc (www.boomerang.co.uk)
Boomerang Plus plc has strategic investments in a number of
media businesses including production companies Alfresco, Apollo,
Boomerang, Bulb, Fflic, Indus, and Oxford Scientific Films;
Facilities companies Gorilla and Zoom; multi-media publisher Boom
Extreme Publishing; talent companies Harlequin and Boom Talent;
Event company Big Freeze Limited, and Education and corporate
production business Media4.
Boomerang Plus's strategy is to continue to acquire and invest
in and develop media companies that complement the Group's existing
businesses, whilst also achieving strong organic growth.
Boomerang Plus plc
Preliminary Results
Chairman's Statement
I am pleased to report on a very successful year for Boomerang,
both financially and strategically. The results for the year ended
31 May 2011, a full review of which can be found in the Business
Review, show strong growth in revenue and profitability and further
good progress in diversifying the Group's customer base both
organically and through acquisition.
In spite of the challenging macro economic conditions, the UK
independent television production sector continues to grow and is
now worth over GBP2.2 billion. As competition for viewers between
the multiplicity of channels has grown, so the search for new ideas
and formats has increasingly been led by the independent sector,
with about half of expenditure on UK originated content in 2010
going to independent production companies. In addition, much of
this content is now being successfully exploited in overseas
markets and across multiple platforms, providing production
companies with valuable IP that can generate ongoing revenue for
years to come. The past few years have seen notable success for UK
independents in the US market where UK-originated formats can be
found across many of the major broadcasters' schedules.
The Board's strategy has been to invest in IP strong businesses
with global footprints and the Group is now seeing the benefits of
this. The year under review includes a full year trading from Indus
Films (acquired in October 2009) with its range of internationally
acclaimed programmes, including Amazon and Arctic. The post
year-end acquisition of the trade and assets of Oxford Scientific
Films (OSF), with its strong track record in factual programming
for the global market and its award-winning creative team, is a
further successful execution of our strategy.
In addition, the Group has made further excellent progress with
its organic-led diversification. In particular, we have seen strong
growth in Advertiser Funded Programming (AFP) and made significant
inroads into Network broadcasters. We are one of the market leaders
in AFP and continue to see growth opportunities from a broad range
of UK and global client brands seeking compelling digital media
content with which to engage their customers across multiple
platforms. Changes to product placement rules, pressure on
programming budgets and widening distribution platforms are
providing a strong base for growth which our talented team is
well-placed to exploit.
As previously reported, the Government's Comprehensive Spending
Review has led to reduced programming budgets for S4C which will
inevitably impact production companies in Wales, and Boomerang. The
growth in AFP and diversification from acquisitions will help
offset the impact of this reduction and, at the same time, we are
benefitting from increased commissioning from Network Broadcasters
in the Nations, particularly from BBC and Channel 4.
In addition, the Group has enjoyed the benefits of our
vertically-integrated production model with our facilities and
post-production businesses seeing increased levels of activity from
both external and internal clients, with a consequent benefit to
gross margin.
The Company continues to have a strong balance sheet, with net
assets of GBP9.53m and cash and cash equivalents of GBP2.59 million
at 31 May 2011. In addition, the encouraging momentum of the past
six months has continued into the current financial year with good
visibility over future revenue. This provides us with a strong
platform for further growth and we will therefore continue to seek
out acquisitions that match our strategic objectives and can be
brought in at sensible prices. The independent sector remains very
fragmented and we anticipate further consolidation over the next
few years. The Company is well-positioned to take advantage of this
and the Board will seek to maximise long-term shareholder value
from the process.
Finally, we continue to be blessed with an excellent management
team, under Huw Eurig Davies's leadership, and a very talented
staff across the Group. On behalf of all shareholders, I thank them
for their hard work and commitment to the Company over the past
year.
Richard Huntingford
Non-Executive Chairman
28 September 2011
Business Review
Financial Review
As highlighted in the trading update released on 25 July 2011,
the Group had a busier than anticipated second half of the year
which, together with very strong trading in the first half, has led
to strong growth in revenues and profits for the year under review.
This stronger organic trading, together with a full year
contribution from Indus Films, acquired in October 2009, has
enabled us to grow revenues in the year ended 31 May 2011 by 25.8%
to GBP26.93 million (2010 - GBP21.41 million).
The Group's key performance indicators are gross profit,
adjusted earnings before interest, tax, depreciation and
amortisation ("adjusted EBITDA**") and adjusted operating profit.
Adjusted profit figures add back charges for professional fees in
respect of corporate transactions, provisions against investments,
amortisation of intangible assets arising on business combinations
and share-based payments.
Gross profit increased by 30.2% to GBP4.55m (2010 - GBP3.50m).
Tighter cost control, together with higher gross margin from Indus
Films, lead to an increased gross profit margin for the year of
16.9% (2010 - 16.3%), despite continued downward pressure on
programme budgets.
Adjusted EBITDA** increased by 52.5% to GBP1.93 million (2010 -
GBP1.27 million). Following the substantial investment in fixed
assets in 2010 that continued in the current year, principally in
respect of the Stwnsh and Cyw Children's contracts, and an increase
in capacity of our post production resources, depreciation
increased in the year to GBP0.72 million (2010 - GBP0.45
million)
Other administrative expenses increased from GBP2.93 million to
GBP3.43 million. During the year the Group undertook a
restructuring and relocation of its businesses, including moving
Fflic and Apollo into the new administrative and production
headquarters at The Media Centre, Culverhouse Cross, Cardiff, with
associated non-recurring costs of GBP0.12 million. 2011 included
the full year effect of the costs of the new headquarters which
were required following the awarding of the Stwnsh and Cyw
children's contracts for S4C and a full year contribution of Indus
costs of GBP0.16m.
The above factors have contributed to an increase in adjusted
operating profits* of 50.5% to GBP1.17 million (2010 - GBP0.78
million).
The Group had cash and cash equivalents of GBP2.59 million at 31
May 2011 (2010 - GBP3.07 million). This reduction of GBP0.48m has
primarily been due to the Group's significant capital investment
programme during the year. The Group incurred capital expenditure
of GBP1.42 million (2010 - GBP1.65 million) in the year to 31 May
2011, principally on post-production facilities in order to service
the increased revenues from both the Group's productions and
external clients. GBP0.64 million (2010 - GBP1.11 million) of this
expenditure was funded by finance leases. Additions to intangible
fixed assets in the year were GBP0.05 million (2010 - GBP0.46
million) and acquisition and deferred consideration payments of
GBP0.23 million (2010 - GBP1.30 million) and debt repayments of
GBP0.66 million (2010 - GBP0.37 million) were also made during the
year.
The tax rate of 46% is higher than the expected blended rate of
28% for the year principally due to the effect of adjustments to
prior years. These primarily relate to the UK Film tax credit
within Boom Films Limited, a subsidiary company, which was
initially recognised in 2009 but is no longer considered
recoverable.
At 31 May 2011 the Group had net assets of GBP9.53 million (2010
- GBP8.98 million).
The Group has considerable headroom within its current bank
facilities together with long-term relationships with its key
customers. Due to the nature of the Group's business, management
has good visibility over its pipeline of productions over the
foreseeable future, which is fully funded by its customers.
The Group's forecasts and projections show that the Group should
be able to operate within the level of its current facility
* adjusted for professional fees in relation to corporate
transactions (2011 - GBP0.02m, 2010 - 0.07m), provision for
impairment of investments (2011 - GBPnil, 2010 - GBP0.07m),
amortisation of intangible assets arising on business acquisitions
(2011 - GBP0.02m, 2010 - GBP0.02m), and share- based payments (2011
- GBPnil, 2010 - GBP0.01m).
**adjusted operating profit as defined above before depreciation
(2011 - GBP0.72m, 2010 - GBP0.45m) and other amortisation (2011 -
GBP0.04m, 2010 - GBP0.04m).
Operations
The Group continued to produce a strong, multi-genre portfolio
of multi-platform content for our broadcast and corporate customers
during the year with 659 hours of programming in the 2010 calendar
year (2009 - 428).
We have had noted success in increasing our Network presence
during the year. For Channel 4, we have produced "The Secret Supper
Club", a ten-part food and wine series with Olly Smith, and the
second series of "That Paralympic Show", a multi-platform magazine
series covering Paralympic sport, and we are currently in
production of series 3. We won our first two commissions from
Disney, including a Pan European reality show.
AFP commissions included two original 3D commissions, one to
produce a Skateboard Documentary with American Skateboarder Tony
Hawk and the second a Free-Skiing film for Nissan Europe. Other AFP
productions during the period included a third year producing
Relentless Freeze, Europe's biggest Snow and Music Festival held
annually in Battersean Power Station; major surfing events for
Quiksilver including Pro Portugal and Roxy Pro Biarritz, the annual
Women's World Longboard Championships; the third series of the
multi platform Sony Ericsson World Breakdancing Championships; and
a third season of Nissan/Sony Playstation GT Academy, the
virtual-to-reality motor racing competition, once again hosted by
F1 luminaries Eddie Jordan and Johnny Herbert and filmed across
Australia, New Zealand, Europe and the UK, including for the first
time a series for the USA market
Complementing this organic success is the addition of Indus to
the Group which has brought the world renowned and award winning
expertise of the producers of "Amazon" and "Arctic" (with Bruce
Parry), "Living with Monkeys", "Coal House" and "Snowdonia 1890".
The recent acquisition of factual producer, Oxford Scientific Films
("OSF"), introduces their talented, award winning creative team to
the Group together with their extensive back catalogue and
experience in exploiting programmes worldwide and strengthens the
Group's position in the Factual genre. OSF current productions
include Meerkats 3D for National Geographic and Sky3D, season 2 of
Fatal Attractions for Animal Planet and broadcast pilots for BBC1
and Five.
We have again produced a range of multi-genre programming for
S4C during the period. These include the "Stwnsh" and "Cyw"
children's services; drama series "Teulu" and "Alys"; factual
entertainment series "3 Lle", "Gwlad Beirdd", "Cartrefi Cefn Gwlad
Cymru" and "Cyfnewid"; music series "Bandit" and "Nodyn"; youth
series "Gofod;"; the Royal Welsh show and sports series "Clwb Rygbi
Shane" and "Ras i Lundain" amongst others.
Post-production and facilities
On 5 September 2011 the Group announced that its post-production
subsidiary, Mwnci, had rebranded as Gorilla and expanded to
incorporate all of the Group's in-house facilities. Gorilla will
now be providing studios, dubbing, grading, graphics and outside
broadcast facilities to programme makers and producers in addition
to increasing its established range of editing services. Gorilla
will be one of the biggest facilities companies outside London and
the largest in Wales.
As the majority of the Group's facilities will no longer be
fully integrated in the future, the Group anticipates making
segmental disclosures in its account for the year ended 31 May
2012.
Talent management
Boom Talent, a management company representing singers, actors
and presenters in film, television, theatre, radio, corporate and
voice-over work, continues to establish itself. The post year-end
acquisition of Harlequin Agency Limited, through a 50% joint
venture with Bryn Terfel, will lead to a significant increase in
scale of our talent business and it is intended to transfer the
trade of Boom Talent to Harlequin in order to maximise cost
synergies and growth opportunities.
Outlook
In June 2011 we acquired the trade and assets of a factual
specialist, Oxford Scientific Films, and through a joint venture
with Bryn Terfel acquired a talent management company, Harlequin
Agency.
Organic Network growth, the acquisitions of Oxford Scientific
Films and Indus and growth in AFP have all contributed to
diversifying the Group's customer base and widening its
intellectual product base. This will continue to drive further
growth in an increasingly global market and provide us with
opportunities to increase our gross profit margins.
Following the Government's Comprehensive Spending Review in
October 2010, S4C has had a reduced programming budget in 2011 and
will experience significant further reductions in 2012 and this
will inevitably impact production companies based in Wales,
including Boomerang. However, the Board believes that the impact of
our diversification strategy, will allow it to mitigate the impact
of S4C's changed circumstances and will bring considerable
long-term benefits to the Group.
The Group has made a strong start to trading in the 2012
financial year and we will also continue to look for further
acquisitions that can add value for shareholders in a fast-changing
media marketplace.
Huw Eurig Davies Mark Fenwick
Chief Executive Officer Finance Director
28 September 2011 28 September 2011
BOOMERANG PLUS PLC
Consolidated income statement
Year ended 31 May 2011
2011 2010
Note GBP'000 GBP'000
Continuing operations
Revenue 26,933 21,409
Cost of sales (22,380) (17,912)
GROSS PROFIT 4,553 3,497
Administrative expenses
Other administrative expenses (3,428) (2,928)
Professional fees in relation to corporate
transactions (17) (73)
Provision for impairment of investments - (70)
Amortisation of intangibles arising on
business acquisitions (20) (20)
Equity-settled share-based payments - (7)
Total administrative expenses (3,465) (3,098)
Other operating income 76 227
Share of results of joint ventures and
associates (30) (18)
OPERATING PROFIT 1,134 608
Investment revenue 4 3
Finance costs (118) (76)
PROFIT BEFORE TAX 1,020 535
Tax 2 (469) (218)
PROFIT FOR THE YEAR 551 317
Attributable to:
Equity holders of the parent 551 317
Earnings per share 3
Basic 6.18p 3.56p
Diluted 6.10p 3.50p
Adjusted - basic 6.60p 5.47p
Adjusted - diluted 6.51p 5.38p
There were no material items of comprehensive income in the
current or prior year other than the profit for the year and,
accordingly, no statement of comprehensive income is presented.
BOOMERANG PLUS PLC
Consolidated statement of changes in equity
Year ended 31 May 2011
Share
Share premium Merger Retained Total
capital account reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Group
Balance at 1 June
2009 89 3,933 1,217 3,420 8,659
Profit for the
financial year - - - 317 317
New shares issued - 1 - - 1
Equity-settled
share-based
payments - - - 7 7
Balance at 1 June
2010 89 3,934 1,217 3,744 8,984
Profit for the
financial year - - - 551 551
Foreign exchange - - - (4) (4)
Balance at 31 May
2011 89 3,934 1,217 4,291 9,531
The Group has taken advantage of section 612 of the Companies
Act 2006 and therefore the excess over the nominal value of shares
issued other than for cash has been allocated to the merger
reserve.
BOOMERANG PLUS PLC
Consolidated balance sheet
31 May 2011
2011 2010
GBP'000 GBP'000
NON-CURRENT ASSETS
Goodwill 2,822 3,049
Other intangible assets 2,442 2,444
Property, plant and equipment 3,606 2,931
Investments 342 371
9,212 8,795
CURRENT ASSETS
Inventories 6 9
Trade and other receivables 4,064 4,158
Current tax assets - 219
Cash and cash equivalents 2,588 3,070
6,658 7,456
TOTAL ASSETS 15,870 16,251
CURRENT LIABILITIES
Trade and other payables 3,926 4,615
Current tax liabilities 232 84
Interest-bearing loans and borrowings 581 492
Deferred consideration 192 333
4,931 5,524
NON-CURRENT LIABILITIES
Interest-bearing loans and borrowings 634 742
Other payables 84 47
Deferred tax liabilities 264 232
Deferred consideration 426 722
1,408 1,743
TOTAL LIABILITIES 6,339 7,267
NET ASSETS 9,531 8,984
EQUITY
Share capital 89 89
Share premium account 3,934 3,934
Merger reserve 1,217 1,217
Retained earnings 4,291 3,744
TOTAL EQUITY 9,531 8,984
BOOMERANG PLUS PLC
Consolidated cash flow statement
Year ended 31 May 2011
2010 2009
Note GBP'000 GBP'000
NET CASH INFLOW FROM OPERATING ACTIVITIES 4 833 2,615
INVESTING ACTIVITIES
Interest received 4 3
Purchase of property, plant and equipment (531) (544)
Acquisition of subsidiaries - (768)
Acquisition of joint ventures and associates (1) (326)
Acquisition of subsidiaries - deferred
consideration payments (229) (209)
Acquisition of intangible fixed assets (49) (458)
Proceeds on disposal of property, plant
and equipment 10 1
NET CASH USED IN INVESTING ACTIVITIES (796) (2,301)
FINANCING ACTIVITIES
Repayments of obligations under finance
leases (659) (372)
Proceeds on issue of shares - 1
Grants received 140 100
NET CASH USED IN FINANCING ACTIVITIES (519) (271)
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS (482) 43
CASH AND CASH EQUIVALENTS AT BEGINNING
OF YEAR 3,070 3,027
CASH AND CASH EQUIVALENTS AT END OF YEAR 2,588 3,070
BOOMERANG PLUS PLC
Notes to the preliminary announcement
1. basis of preparation
The financial information set out in the announcement does not
constitute the Company's statutory accounts for the years ended 31
May 2011 or 2010. The financial information for the year ended 31
May 2010 is derived from the statutory accounts for that year which
have been delivered to the Registrar of Companies. The auditors
reported on those accounts; their report was unqualified, did not
draw attention to any matters by way of emphasis without qualifying
their report and did not contain a statement under s498(2) or (3)
Companies Act 2006. The audit of the statutory accounts for the
year ended 31 May 2011 is not yet complete. These accounts will be
finalised on the basis of the financial information presented by
the directors in this preliminary announcement and will be
delivered to the Registrar of Companies following the Company's
annual general meeting.
The Group income statement, balance sheets and cash flow
statements for the years ended 31 May 2011 and 31 May 2010 have
been prepared on a basis consistent with the accounting policies
disclosed in the Group's annual report for the year ended 31 May
2010.
Whilst the financial information included in this preliminary
announcement has been computed in accordance with International
Financial Reporting Standards (IFRSs) as adopted for use in the EU,
this announcement does not itself contain sufficient information to
comply with IFRSs. The Company expects to publish full financial
statements that comply with IFRSs in November 2011.
2. TAX on profit on ordinary activities
2011 2010
GBP'000 GBP'000
Current taxation
United Kingdom corporation tax:
Current tax on income for the year at 27.67
% (2010 - 28%) 283 100
Adjustment in respect of prior years 154 3
Total current tax 437 103
Deferred tax
Origination and reversal of timing differences 32 115
32 115
Total charge for the year 469 218
The difference between the total tax shown above and the amount
calculated by applying the standard rate of United Kingdom
corporation tax to the profit before tax is as follows:
GBP'000 GBP'000
Profit on ordinary activities before tax 1,020 535
Tax on profit on ordinary activities before tax
at 27.67 % (2010 - 28%) 282 150
Factors affecting charge for the year
Expenses not deductible for tax purposes 4 27
Non-deductible amortisation and impairment
charges 6 25
Capital allowances less than/ (in excess of)
depreciation 9 (103)
Tax losses 1 23
Other (17) (20)
Marginal relief (2) -
Adjustment in respect of prior years 154 3
Origination and reversal of timing differences - (2)
Total tax current charge for the year 437 103
The adjustment to the current tax charge in respect of prior
years is principally related to the UK Film tax credit within Boom
Films Limited, a subsidiary company, which was initially recognised
in 2009 but is no longer considered recoverable.
The tax rate is a blended rate of 28% to 31 March 2011 and 26%
from 1 April 2011. The reduction in the corporation tax rate from
28% to 26% from 1 April 2011 is not anticipated to materially
affect the tax charge.
3. Earnings per share
The calculation of the basic, diluted and adjusted earnings per
share is based on the following data:
2011 2010
GBP'000 GBP'000
Earnings
Profit for the year 551 317
Exceptional administrative expenses 17 73
Amortisation of intangibles arising on business
acquisitions 20 20
Provision for impairment of investments - 70
Equity-settled share-based payments - 7
Adjusted profit 588 487
Number of shares No. No.
Weighted average number of ordinary shares
for the purpose of basic earnings per share 8,914,731 8,911,902
Effect of dilutive potential ordinary shares:
Share options 116,705 153,798
Dilutive weighted average number of shares 9,031,436 9,065,700
Earnings per ordinary share - basic 6.18p 3.56p
Earnings per ordinary share - diluted 6.10p 3.50p
Adjusted earnings per share - basic 6.60p 5.47p
Adjusted earnings per share - diluted 6.51p 5.38p
4. notes to the consolidated cash flow statement
2011 2010
GBP'000 GBP'000
Profit from operations 1,134 608
Adjustment for:
Amortisation of intangible fixed
assets 57 61
Depreciation of property, plant
and equipment 721 446
Loss on property, plant and equipment
disposals 15 2
Government grants (66) (117)
Results of joint venture 30 20
Provision for impairment of investment - 70
Equity-settled share-based payments - 7
Foreign exchange (13) -
Operating cash flows before movement
in working capital 1,878 1,097
Increase/(decrease) in receivables 312 (79)
(Decrease)/increase in payables (974) 2,109
Decrease/(increase) in inventory 3 (9)
Cash generated by operations 1,219 3,118
Income taxes paid (288) (451)
Interest paid (98) (52)
Net cash inflow from operating activities 833 2,615
Cash and cash equivalents comprise cash and short-term bank
deposits with an original maturity of three months or less, net of
outstanding bank overdrafts. The carrying amount of these assets is
approximately equal to their fair value.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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