RNS Number : 7302E
Handmade PLC
30 September 2008
30 September 2008
HandMade plc
("HandMade" or ""the Group")
Interim Results
For the six months ended 30 June 2008
HandMade plc (AIM: HMF), the UK and US based film entertainment company that acquires, owns, produces and exploits intellectual property
rights, announces its unaudited interim results for the six months ended 30 June 2008.
OPERATING HIGHLIGHTS
* �3.28m of revenue for the six months ended 30 June 2008 (2007 - �0.68m)
* �1.77m of rights fee revenue generated from the HandMade library
* Actress Uma Thurman signed as lead role for feature film 'Eloise in Paris' - principal photography scheduled to commence in Q1
2009
* Dwayne 'The Rock' Johnson, Jessica Biel, Gary Oldman and John Cleese signed for the CGI animation film 'Planet 51' - currently in
production
* Distribution deals for 'Planet 51' completed in almost all territories - including with Sony Pictures in US and Entertainment Film
in the UK
POST PERIOD HIGHLIGHTS
* 'Fifty Dead Men Walking' starring Jim Sturgess and Sir Ben Kingsley, completed and premiered at Toronto Film Festival in September
2008 to some excellent reviews
* Merchandising agreement signed with licensing agent Radar for Planet 51 feature film
Patrick Meehan, Chairman of HandMade plc, commented: "I am pleased to report good progress for the first six months across the Group.
Our film library has generated total revenue of �2.01m already this year. We have signed key names for our first 'Eloise' feature film and
our Film Sales and Marketing division has successfully negotiated a major distribution agreement for our first animation feature film,
Planet 51. We have ten films in the pipeline and look forward to maintaining this momentum and moving into profitability in 2009 and
beyond."
The full unaudited interim report and accounts are set out in the Appendix below and copies are also available from the Company's
website www.handmadeplc.com.
For further information please contact:
HandMade plc 020 7518 8230
David Ravden, CEO
Conduit PR 020 7429 6603
Jos Simson, Charlie Geller
Canaccord Adams 020 7050 6500
Mark Williams, Andrew Chubb
About HandMade
HandMade Plc, which encompasses HandMade Films International and HandMade Film Productions, is an international rights and film
production company with one of the UK's largest independent film libraries. The HandMade Group acquires, owns and exploits intellectual
property rights, comprising film, TV and theatrical productions, book and music rights, and merchandising. They are the sole owners of all
ancillary and merchandising rights to the iconic children's book character 'Eloise' and specialise in the marketing and branding of all
'Eloise' merchandise plus production and marketing of remakes of all films in their library. HandMade plc was re-admitted to trading on AIM
in May 2006 and has offices in both London and Los Angeles.
Under the original ownership of George Harrison, HandMade was responsible for producing some of the great British films of the 70's and
80's: The Long Good Friday, Mona Lisa and Time Bandits to name but a few. More detail, together with the Company's AIM Rule 26 information
is available on the Company's website www.handmadeplc.com
APPENDIX
Chairman's Statement
Financial results
The Group's revenue for the six months ended 30 June 2008 was �3.28m (2007 - �0.68m). There was an operating loss of �0.92m (2007 -
�3.49 loss) and a retained loss of �1.44m (2007 - �3.22m loss)
An analysis of revenue by operating division is given in note 3. The increase of 70% on the total revenue for the whole of 2007 is
mainly due to the receipt of two rights fees totalling �1.77m ($3.5m) for granting one-picture licences of the intellectual property the
Group owns, to allow the feature film re-makes of the Long Good Friday and Mona Lisa to be produced. Licence fee income generates 100% gross
profit for the group.
Administrative expenses before depreciation and amortisation were in line with management expectations at �2.33m (2007 - �2.22m)
producing positive earnings before interest, tax, depreciation and amortisation ('EBITDA') of �0.31m (2007 - loss of �1.97m).
Finance costs increased from �0.18m for the corresponding six month period in 2007 to �0.86m in 2008, however it should be noted that
�0.47m of the 2008 total relates to the unwinding of discount on liabilities in the balance sheet and is a non-cash expense.
The reduced retained loss for the period of �1.44m (2007 - �3.22m) will be transferred to reserves.
Operational review
I am pleased to report continued progress across the Group for the first half of 2008. Our four core divisions - Library Rights and
Content; Eloise Rights Exploitation; Film Production; and Film Sales, Marketing and Structured Financing, have all developed in line with
the Board's expectations.
The Library Rights and Content division generated �2.01m for the six months ending 30 June 2008 compared to �0.60m for the whole of
2007. As explained above this is largely due to the receipt of the two rights fees. In addition we brought exploitation of our library of
over 100 feature films in-house last year to help generate improved revenues from the licensing deals negotiated.
As announced earlier in the year, Uma Thurman has been cast in the lead role of our feature film, 'Eloise in Paris', and we hope to
announce the last key role shortly to complete the casting process, with filming expected to commence Q1 2009. We expect development on the
second Eloise feature film 'Eloise Goes to Hollywood' to commence during 2009.
Two films which HandMade have co-produced were completed during the period. Both 'Manolete', starring Penelope Cruz and Adrien Brody,
and 'Fifty Dead Men Walking' premiered at the Toronto Film Festival. We are particularly pleased with the reviews from 'Fifty Dead Men
Walking', starring Jim Sturgess and Sir Ben Kingsley, which have exceeded our expectations and could result in attracting unexpected
distribution deals for 2009 which would generate additional sales commission for the Group.
The $60 million CGI animation film, 'Planet 51', which we are co-producing with Ilion Animation studios, is on schedule for release in
November 2009. We recently signed Sony Pictures as the US distributor, which gives us further encouragement for the potential sales
commission revenues for 2009 and 2010. We have also concluded a merchandising agreement with licensing agent Radar and we expect initial
income from this in 2009.
HandMade Films International ("HFI"), our Film Sales, Marketing and Structured Financing business continues to add value to the Group
since its acquisition. HFI successfully renegotiated the US distribution rights for 'Planet 51' with Sony Pictures in Q3 2008 following
restructuring at New Line Cinema. HFI is busy negotiating licensing arrangements for the first 'Eloise' feature film as well as our other
films on the slate including the remake of 'The Long Good Friday' and 'Mona Lisa'.
Outlook
The Group has ten films currently in the pipeline for release during the next two years and we will be attending the American Film
Market in October to sell our films to the international market.
We continue to focus on further exploiting our Library Rights and Content division and remain excited about the opportunities open to
the 'Eloise' brand.
The interim results are in line with the Board's expectations and we look forward to moving into profitability in 2009 and beyond.
P Meehan
Chairman
30 September 2008
Consolidated income statement
for the six months ended 30 June 2008
Unaudited Unaudited
Note Six months ended 30 Six months ended 30 Year ended
June 2008 June 2007 31 December
2007
�*000 �*000 �*000
Revenue 3 3,275 679 1,936
Cost of sales (627) (436) (1,072)
Gross profit 2,648 243 864
Administrative expenses (3,568) (3,734) (7,489)
Operating loss (920) (3,491) (6,625)
Finance costs (863) (185) (1,596)
Finance income - 1 3
Loss before taxation (1,783) (3,675) (8,218)
Taxation 4 342 451 1,738
Loss for the period (1,441) (3,224) (6,480)
attributable to equity holders
Loss per share * basic and 5 (1.2)p (2.8)p (5.5)p
diluted
All the Group's activities are derived from continuing operations.
Consolidated statement of recognised income and expenditure
for the six months ended 30 June 2008
Unaudited Unaudited
Six months ended 30 Six months ended 30 Year ended
June 2008 June 2007 31 December
2007
�*000 �*000 �*000
Loss for the period (1,441) (3,224) (6,480)
Total recognised income and (1,441) (3,224) (6,480)
expense
Attributable to equity holders (1,441) (3,224) (6,480)
Consolidated Balance Sheet as at 30 June 2008
Unaudited
Unaudited (Restated)* 31 December
30 June 2008 30 June 2007 2007
ASSETS �*000 �*000 �*000
Non-current assets
Goodwill 11,723 12,157 11,748
Intangible assets 32,091 35,475 33,310
Property, plant & equipment 100 96 111
Investment in associate - - -
43,914 47,728 45,169
Current assets
Development costs 3,512 301 2,926
Trade and other receivables 3,460 3,048 2,699
Cash and cash equivalents 161 - -
7,133 3,349 5,625
Total assets 51,047 51,077 50,794
LIABILITIES
Current liabilities
Financial liabilities (2,375) (2,742) (5,758)
Trade and other payables (16,949) (12,508) (14,274)
Current tax liabilities - - -
(19,324) (15,250) (20,032)
Non-current liabilities
Financial liabilities (3,288) (860) (585)
Trade and other payables (2,106) (2,012) (2,065)
Deferred tax (8,985) (10,614) (9,327)
(14,379) (13,486) (11,977)
Total liabilities (33,703) (28,736) (32,009)
NET ASSETS 17,344 22,341 18,785
CAPITAL & RESERVES ATTRIBUTABLE
TO EQUITY HOLDERS OF THE COMPANY
Share capital 5,943 5,943 5,943
Share premium account 9,176 9,176 9,176
Merger reserve 21,832 21,832 21,832
Shares to be issued 519 819 519
Retained loss (20,126) (15,429) (18,685)
Total equity 17,344 22,341 18,785
* At 31 December 2007 the Group reviewed its accounting policies including its treatment of the consideration paid as part of the
acquisition of HandMade Holdings Ltd. The convertible loan note issued has been re-classified as a compound financial instrument and
consequently �519,000 has been reclassified from debt to equity. The 30 June 2007 balance sheet has been restated accordingly
Consolidated Cash Flow Statement
for the six months ended 30 June 2008
Unaudited
Unaudited (Restated)
Six months ended 30 Six months ended 30 Year ended
June 2008 June 2007 31 December
2007
�*000 �*000 �*000
Cash flows from operating
activities
Operating loss for the period (920) (3,491) (6,625)
Depreciation of tangible fixed 15 12 28
assets
Amortisation of intangible 1,219 1,507 3,055
fixed assets
Impairment of intangible - - 567
assets
Currency translation 311 13 25
differences
Share based payment - 291 291
Operating cash flow before 625 (1,668) (2,659)
changes in working capital
Increase in development costs (586) (173) (2,748)
Increase in trade & other (761) (422) (73)
receivables
Increase / (decrease) in trade 2,311 (1,725) (925)
& other payables
Net cash flows from operations 1,589 (3,988) (6,405)
Income tax paid - - -
Net cash flows from operating 1,589 (3,988) (6,405)
activities
Investing activities
Purchases of property, plant & (4) (28) (59)
equipment
Interest received - 1 3
Net cash used in investing (4) (27) (56)
activities
Financing activities
Issue of ordinary shares net - 540 540
of issue costs
Loans advanced in the period 1,881 627 3,175
Loans repaid in the period (2,648) - -
Interest paid on convertible (60) (60) (120)
loan note
Other interest paid (337) (104) (331)
Net cash (used in) / from (1,164) 1,003 3,264
financing
Net increase / (decrease) in 421 (3,012) (3,197)
cash
Cash at the beginning of the (260) 2,937 2,937
period
Cash at the end of the period 161 (75) (260)
Notes to the Consolidated Interim Statements
for the six months ended 30 June 2008
1. General information
HandMade plc ('HandMade') is a public limited company ('the Company') incorporated in the United Kingdom under the Companies Act 1985
(registration number 3270629). The Company is domiciled in the United Kingdom and its registered address is 1 Westferry Circus, Canary
Wharf, London E14 4HD. The Company's ordinary shares are traded on the AIM Market of the London Stock Exchange ('AIM'). Copies of this
Interim Report, or of the Annual Report and Accounts for the year ended 31 December 2007, are available on the Investor Relations section of
the Company's website at www.handmadeplc.co.uk.
2. Basis of accounting
These interim statements have been prepared using accounting policies consistent with International Financial Reporting Standards (IFRS)
as endorsed for use by companies listed on an EU regulated market. The same accounting policies, presentation and methods of computation
have been followed in the preparation of these results as were applied in the Company's latest annual audited financial statements for the
year ended 31 December 2007.
This statement does not comprise statutory accounts as defined in Section 240 of the Companies Act 1985 and the results for the six
month periods to 30 June 2008 and 30 June 2007 are unaudited. The financial information for the year ended 31 December 2007 is an extract
from the latest company accounts. Statutory financial statements for the year ended 31 December 2007 on which the auditors gave an
unqualified opinion, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying
their reports and did not include a statement under section 237(2) or (3) of the Companies Act 1985, have been filed with the Registrar of
Companies.
3. Revenue
The Group is organised into four operating divisions. The principal activities of each division can be summarised as follows:
Eloise - Exploitation of the Eloise rights owned by the Group.
Library - Licensing of television, home entertainment, theatrical and non theatrical, re-make sequel and prequel, rights of over 100
films which make up the HandMade library
Film production - The production and co-production of feature films
Film sales - Selling of the distribution rights of feature films in different territories around the world
Analysis of revenue by operating division for the period is as follows:
Unaudited Unaudited
Six months ended 30 Six months ended 30 Year ended
June 2008 June 2007 31 December
2007
�*000 �*000 �*000
Eloise - 4 511
Library 2,013 103 597
Film production - - -
Film sales 1,187 572 809
Unallocated 75 - 19
3,275 679 1,936
Notes to the Consolidated Interim Statements
for the six months ended 30 June 2008
4. Taxation
Deferred tax has been provided using the balance sheet liability method, recognising all temporary differences. The taxation credit of
�342,000 (2007 - �451,000) in the income statement relates to the release of the deferred tax liability recognised in respect of intangible
assets. The liability is released to the income statement over the period over which the assets are amortised.
No corporation tax charge or credit has been accrued on the loss before tax of �1,783,000 (2007 - �nil).
5. Loss per share
The calculation of the basic and diluted loss per share is based on the following data:
Unaudited Unaudited
Six months ended 30 Six months ended 30 Year ended
June 2008 June 2007 31 December
2007
�*000 �*000 �*000
Loss
Loss for the period 1,441 3,224 6,480
attributable to equity holders
Weighted average number of Number Number Number
shares
Weighted average number of 118,869,207 116,896,831 117.891,125
shares in issue
Basic and diluted loss per 1.2p 2.8p 5.5p
share
As the Group made a loss in each period the loss per share has not been diluted.
The number of potentially dilutive shares and share options in issue at the balance sheet date in each of the three periods was
6,925,000.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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