INTANDEM FILMS PLC ("Intandem" or the "Company")
Interim Results for the six months ended 31 December 2005
HIGHLIGHTS
* Two films completed in the reporting period - Stoned and Irresistible.
* Five new fully financed films agreed providing a future revenue stream from
the commissions on sales of international rights.
* A further ten films on our slate with the potential to earn executive
production fees as well as sales commissions.
* Distribution secured for Stoned in North America, Germany and UK through
major Studios.
* Strong flow of new projects from expanding network of contacts.
* Increased access to funding for future projects.
CHAIRMAN'S STATEMENT
Two films were completed in the 6 months to 31 December 2005 and we released
our first film in cinemas in the United Kingdom in November 2005. The Company
signed contracts for the international sales rights to five films, which are
fully financed, and created a further portfolio of ten films which are
currently in the process of being financed. We have established clear supply
lines for films being introduced to the Company and are taking positive
initiatives in establishing a robust, long term mechanism for the financing of
a slate of commercial feature films which the Board believes will significantly
assist the Company's growth and profitability.
Intandem earns fees for providing the service of organising financing for the
production of films on behalf of the producer; Intandem does not use its own
funds for production finance. It also earns commissions on sales of
international rights to film distributors around the world. Distributors pay a
minimum guaranteed sum ahead of the film's release therefore Intandem's
commission is not dependent on the box office success of the film. Revenue is
only recognised on films which have been completed during the financial period.
FINANCIAL OVERVIEW
Turnover for the six months to 31 December 2005 was �438,000 (6 months to 31
December 2004: �343,000) and the loss for the half year was �138,000 (6 months
to 31 December 2004: �66,000 loss) equivalent to 0.17 pence per share (6 months
to 31 December 2004: 0.11 pence per share). The loss for the half year of �
138,000 is significantly less than that for the 6 month period to 30 June 2005
of �431,000 and reflects the positive growth of the company over the period.
The net assets of the Company as at 31 December 2005 were �475,188 (31 December
2004: �157,877)
Intandem earns commission on all sales throughout the world and during the six
month period �192,700 of commission was earned. The Company also earned �29,155
in executive producer fees and �216,156 in recoverable sales expenses.
Films Completed During the Period
Irresistible, the thriller starring Susan Sarandon and Sam Neill was completed
in December 2005 and sales have been agreed in most territories around the
world including North America, UK, Germany, Italy, Spain, Benelux, Australia
and Scandinavia.
Stoned, the film about the final months of the life of Brian Jones, the founder
of the Rolling Stones, was delivered in September 2005 and released
theatrically in the UK in November. Although the box office in the United
Kingdom was disappointing, Sony Home Entertainment is handling the UK DVD sales
and is confident about the April 2006 release. Internationally, sales and
distribution deals have been agreed in North America (Screen Media Films is
distributing theatrically with Universal distributing the DVD release), Germany
(Warner Brothers will be distributing theatrically with VCL handling the DVD
release), Scandinavia, Spain, Benelux, Japan, Brazil and Australia.
New Fully Financed Films
The Company has been focused on bringing in new films and has added five films
in the period which are fully financed and will earn the Company commissions
mainly during the year to 30 June 2007.
* Civic Duty -Intandem are delighted to pick up the sales rights for Civic
Duty, a high-tempo psychological thriller which is currently in
post-production.
* Blood - a completed horror film which will be marketed by Intandem under
the Fear Factory brand.
* Black Pimpernel - a powerful drama centred around the Chilean Revolution,
currently shooting in Chile.
* Primal Scream - a US based thriller/horror with an American cast set to
start production in June 2006.
* Orphan King- based on a riveting true story, currently in post-production
starring Chris Evans, Alexis Bledel, Bill Pullman and Andrew McCarthy.
Intandem has been appointed as the exclusive worldwide sales company for each
of the above films, and a major sales and marketing initiative will commence at
the Cannes Film Festival in May 2006
Part Financed Films
Intandem has signed agreements on a furthertenfilms as executive producer and
international sales company. These films all have financing attached and
Intandem is working with each film's producer to close the final stages of the
production finance. The films have budgets ranging from �1.5million to �
14million. While it would be imprudent to say that all these films will
progress to production, Intandem's ability to be involved in such a slate
augurs well for the flow of films into the year ending 30 June 2007. Some
examples of these films are:
* The Villa Golitsyn, a �5million budget powerful drama set in the south of
France, directed by Peter Medak and set to star Alan Rickman and Kristen
Scott Thomas.
* The Lodge, a �1.5million budget horror film set in Louisiana, produced by
Michel Shane, the Los Angeles based executive producer of I, Robot and
Catch Me If You Can. Intandem has developed an excellent working
relationship with Mr Shane and the Board is confident of being appointed as
the sales company on several films with him in the future.
* Zoo, a �2million black comedy/horror film set in the UK from Julie Baines,
the producer of the commercially successful horror film, Creep.
* Bob's Not Gay, a �2million budget comedy set in Paris set to star Michael
Madsen, Irene Jacob and Neil Harman.
* Kiss Chase, a �1.5million thriller set to commence production in March 2006
Sources of Film Projects
The Company has many quality product sources from producers around the world
and has also recently concluded two formal partnership arrangements with other
leading UK film companies; Fear Factory, for British horror films and the
Number 9 Superslate consortium backed by Channel 4, the Irish Film Board and
the UK Film Council.
* Fear Factory Ltd was launched in February 2006 to raise up to �6million for
a slate of horror films for which Intandem will be the worldwide sales
company.
* Number 9 Films Consortium is aiming to develop higher budget commercial
films and the first film is expected to commence production during 2006. It
is intended that Intandem will sell all the projects developed through the
Superslate structure.
The Board is confident that the flow of quality projects into the Company will
continue to grow which should ensure that its catalogue continues to increase
in value.
Sources of Film Production Financing
Intandem is constantly researching new sources of production financing.
Traditional sources of film finance include government bodies such as the UK
Film Council, tax based funds, international co-producers, gap financing banks
and pre-sales to film distributors. The Company is actively pursuing equity
based funding for films and is in negotiations with four different financing
groups with a view to being appointed as the international sales company for
their funds. If appointed the directors believe this would have a positive
impact on the Company's ability to "greenlight" its slate of films in the
future.
Summary
Since the Company commenced business just over two years ago, the Board has
steadily expanded its network of contacts in production and financing. The
results of those efforts are now starting to materialise and we are confident
that the flow of film projects commencing production will accelerate during the
next 12 months, significantly assisting the future growth of Intandem. I would
like to thank all our producer, finance, talent and distribution colleagues in
the film industry and all our staff who are working extremely hard in
fulfilling our business plan.
Gary Smith
Chairman
21 February 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT
6 MONTHS TO 31 DECEMBER 2005
6 months ended 6 months ended Year ended
31/12/05 31/12/04 30/06/05
� � �
Turnover
Executive Producer fees 29,155 122,900 122,900
Commissions 192,700 111,900 114,979
Recoverable project costs 216,156 107,869 310,099
_______ _______ _______
438,011 342,669 547,978
Recoverable expenses (216,156) (107,869) (310,099)
Other external charges (214,591) (155,456) (438,667)
Staff costs (144,069) (144,809) (290,364)
Depreciation (5,805) (1,500) (11,609)
_______ _______ _______
Operating loss (142,610) (66,965) (502,761)
Finance costs (1,321) - (96)
Income from Investments 5,913 1,033 5,801
_______ _______ _______
Loss before tax (138,018) (65,932) (497,056)
Income tax expense - - -
_______ _______ _______
Loss for the year from continuing (138,018) (65,932) (497,056)
operations
Earnings per share
Basic (0.17 pence) (0.11 pence) (0.77 pence)
Diluted (0.17 pence) (0.11 pence) (0.77 pence)
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2005
As at 31/12/05 As at 31/12/ As at 30/6/05
04
� � �
Assets
Non-current assets
Property, plant and equipment 31,232 46,084 34,829
Investments 100 100 100
31,332 46,184 34,929
Current Assets
Trade receivables 386,874 81,628 199,349
Other current assets 264,916 189,904 180,182
Cash and cash equivalents 153,808 3,070 472,328
805,598 274,602 851,859
Total assets 836,930 320,786 886,788
Equity and liabilities
Equity attributable to equity
holders of the parent
Share capital 83,175 60,175 83,175
Share premium 840,314 (12,766) 840,314
Merger reserve 252,506 252,506 252,506
Retained earnings (700,807) (142,038) (562,789)
475,188 157,877 613,206
Non-current liabilities
Deferred income 9,480 - 11,105
Current liabilities
Trade and other payables 352,262 162,909 262,477
Total liabilities 361,742 162,909 273,582
Total equity and liabilities 836,930 320,786 886,788
CONSOLIDATED CASH FLOW STATEMENT
6 MONTHS TO 31 DECEMBER 2005
6 months 6 months Year
ended ended ended
31/12/05 31/12/04 30/06/05
� � �
Cash flows from operating activities
Loss from operations (142,610) (66,965) (502,761)
Adjustments for:
Depreciation of property, plant and 5,805 1,500 11,609
equipment
Share option charge for the year - - 5,373
Charge for market value of warrants - - 5,000
issued during the year
Operating cash flows before movement in (136,805) (65,465) (480,779)
working capital
Increase in receivables (272,259) (140,266) (248,265)
Increase in payables 88,160 79,085 189,758
Cash generated from operations (320,904) (126,646) (539,286)
Interest paid (1,321) - (96)
Net cash used in operating activities (322,225) (126,646) (539,382)
Cash flows from investing activities
Interest received 5,913 1,033 5,801
Purchases of property, plant and (2,208) (47,584) (46,438)
equipment
Net cash investment activities 3,705 (46,551) (40,637)
Cash flows from financing activities
Net proceeds on issues of shares - (12,766) 863,314
Net cash from financing activities - (12,766) 863,314
Net increase/(decrease) in cash and (318,520) (185,963) 283,295
cash equivalents
Cash and cash equivalents at beginning 472,328 189,033 189,033
of period
Cash and cash equivalents at end of 153,808 3,070 472,328
period
Bank balances and cash 153,808 3,070 472,328
NOTESTO THE ACCOUNTS
1. Accounting policies
The principal accounting policies are as set out in the June 2005 annual
report.
The financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRS) and with those parts of the Companies Act,
1985 applicable to companies reporting under IFRS. The financial reports have
been prepared under the historical cost convention.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Although these estimates are based on management's best
knowledge of the amount, event or actions, actual results ultimately may differ
from those estimates.
Earnings per share
Earnings 6 months 6 months Year ended
ended ended
30/06/05
31/12/05 31/12/04
�
� �
Earnings for the purpose of basic (138,018) (65,932) (497,056)
earnings per share (net loss for
the year)
Earnings for the purpose of diluted (138,018) (65,932) (497,056)
earnings per share
Number of shares 6 months 6 months Year ended
ended ended
30/06/05
31/12/05 31/12/04
Weighted average number of ordinary 83,175,000 60,175,000 64,522,945
shares for the purposes of basic
earnings per share
Weighted average number of ordinary 83,175,000 60,175,000 64,522,945
shares for the purposes of diluted
earnings per share
The dilutive effect of share options and warrants issued during the year ended
30 June 2005 have been ignored as the average market value of ordinary shares
during the period did not exceed the exercise price of the options or warrants
issued.
Share capital
6 months ended 6 months ended Year ended
31/12/05 31/12/04 30/06/05
� � �
Authorised:
Ordinary shares of �0.001 each 200,000 200,000 200,000
Issued and fully paid:
Ordinary shares of �0.001 each 83,175 60,175 83,175
Reported at beginning of period 83,175 60,175 60,175
Issue of shares - - 23,000
Reported at period end 83,175 60,175 83,175
The Company was incorporated on 10 February 2005 as Broomco (3710) Limited with
an authorised share capital of �1,000 divided into 1,000 ordinary shares of �1
each, of which 1 share was issued on incorporation. On 5 April 2005, the
authorised share capital was increased to �200,000 by the creation of 199,000
further ordinary shares of �1 each. On the same date, each of the issued and
unissued ordinary shares of �1 each were subdivided in to 1,000 ordinary shares
of �0.001 each, all such shares ranking pari passu in all respects.
On 5 April 2005, the Company entered into an agreement with all the
shareholders of Intandem Entertainment Limited to acquire its entire share
capital, the consideration for which was satisfied by the allotment and issue
of 60,174,000 ordinary shares of �0.0001 each, credited as fully paid, in the
Company.
On 22 April 2005, the Company raised �1,150,000 before expenses of �286,686
through the placing of 23,000,000 new ordinary shares of nominal value �0.001
each at a placing price of �0.05 each with institutional and other investors.
This represented 28% of the enlarged issued share capital of the company.
At 30 June 2005, options over 4,500,000 ordinary shares under the Intandem
Enterprise Management Incentive (EMI) Plan and warrants over 3,000,000 ordinary
shares were outstanding.
Date of At Granted Exercised Forfeits At Exercise Exercise Period
grant / Share
1 July /vested 30 June price
2004 2005 From To
Options
22.04.05 - 4,500,000 - - 4,500,000 5.0p 22.04.08 22.04.15
Warrants
22.04.05 - 3,000,000 - - 3,000,000 5.0p 22.04.05 22.04.08
2. Status of financial information
The interim results for the 6 months ended 31 December 2005 and the 6 months
ended 31 December 2004 are unaudited and do not constitute statutory accounts
within the meaning of section 240 Companies Act 1985. The figures for the year
ended 30 June 2005 have been extracted from the audited annual accounts.
END
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