INTANDEM FILMS PLC ("Intandem" or the "Company")
Interim Results for the half year to 31 December 2006
Highlights
* Successful loan note funding in the amount of �4.9 million
* Loss before tax of (�664,000) including costs of over �375,000 in respect
of the loan notes
* 3 new feature films added to catalogue
CHAIRMAN'S STATEMENT
The six months ended 31 December 2006 represent continued progress for
Intandem.
As previously stated, one of the vital ingredients to long term success in the
international film business is to have access to a considerable amount of
finance. After a strategic search, the Company identified a source of financing
which was compatible with its requirements. In November 2006 the Company
concluded its first such financing transaction which has resulted in a gross
funding of �4.9m to purchase a library of five films. The Company has been
working closely with several other US based financing organisation to finance
the acquisition of films and I expect to announce further transactions in the
second half of the year which should include film production financing. This
should enable the Company to progress its slate of films into production which
will earn the Company Executive Producer fees and sales commission.
In the half year ended 31 December 2006, turnover was �328,000 (half year to 31
December 2005: �438,000) and the loss before tax was �664,000 (half year to 31
December 2005: �138,000 loss). The main reason for the increased loss was the
write off of the costs of setting up the slate financing transaction of over �
375,000, including interest. The resulting stronger balance sheet with total
assets up from �0.6m at 30 June 2006 to �3.6m at 31 December 2006 will, I
believe, help your Board to achieve its strategic objective of becoming a
leading independent international film company.
The availability of finance needs to be supported by quality commercial films
and I am delighted at the level of films which the Company is attracting.
Intandem targets commercial films which it believes will appeal to an
international audience and its current slate is its strongest ever. Three films
in particular are expected to raise the profile and revenues of the Company.
The first of these, the $8 million budget "And When Did You Last See Your
Father" is currently in post production. This film was produced under
Intandem's "Super Slate" arrangement with Number9 Films, Film4, the Irish Film
Board and the UK Film Council. The film, a drama starring Jim Broadbent and
Colin Firth, has been pre sold to several territories including Sony Picture
Classics in North and South America and Ikon in Australia. Buena Vista will
release the film in UK cinemas in September 2007. The film is expected to be
delivered prior to 30 June 2007 and sales commission will be included in the
second half.
Just starting post production in Los Angeles after successfully completing
production in Namibia is "GallowWalker", a $15million budget supernatural
western starring Wesley Snipes. The editor of the film is Christian Wagner who
has edited several films for US Studios including "Mission Impossible 2".
Several pre sales have been agreed, including Lionsgate in North America,
Metropolitan in France, Toshiba in Japan and Nordisk in Scandinavia. The film
will be delivered after 30 June 2007 and sales commission will therefore be
included in the year ended 30 June 2008.
The third film, the $25million budget comedy, "How to Lose Friends and Alienate
People" is Intandem's biggest budget film to date. Based on Toby Young's book
of the same name, the film has commenced pre production and will be filmed in
London and New York commencing at the end of May. It will star Simon Pegg, the
star of "Hot Fuzz"; and the producers are in negotiation with a major US
actress to play the lead female role. This film will also be produced under the
"Super Slate" arrangement. Intandem is organising the financing for the film in
conjunction with Film4.
Your Board is very excited about the prospects for each of the above films.
They are an indication of the way in which Intandem's catalogue will be built
in that they all contain well known actors, the average budget is around
$15million, they are attracting major distributors in the difficult North
American market and there is a mix of genres. Intandem is the worldwide sales
company on each of the films and no revenues have been included in the accounts
to date.
All members of staff have worked extremely hard in building the Company,
particularly over the last six months and on your behalf, I would like to thank
them for their efforts. I look forward to reporting further progress in due
course.
Gary Smith
Chairman
CONSOLIDATED BALANCE SHEET
HALF YEAR ENDED 31 DECEMBER 2006
As at 31/12/ As at 31/12/ As at 30/6/06
06 05
Notes � � �
Assets
Non-current assets
Property, plant and equipment 19,275 31,232 25,452
Financial assets 6 1,894,773 100 100
1,914,048 31,332 25,552
Current Assets
Trade receivables 102,054 386,874 65,815
Other current assets 432,589 264,916 339,827
Cash and cash equivalents 1,190,092 153,808 130,906
1,724,735 805,598 536,548
Total assets 3,638,783 836,930 562,100
Equity and liabilities
Equity attributable to equity
holders of the parent
Share capital 4 83,175 83,175 83,175
Share premium 840,314 840,314 840,314
Merger reserve 252,506 252,506 252,506
Retained earnings (1,662,167) (700,807) (998,026)
(486,172) 475,188 177,969
Non-current liabilities
Deferred income 7,855 9,480 7,855
Convertible loan notes 7 192,500 - 192,500
Borrowings 7 3,653,798 - -
3,854,153 9,480 200,355
Current liabilities
Trade and other payables 270,802 352,262 183,776
Total liabilities 270,802 361,742 384,131
Total equity and liabilities 3,638,783 836,930 562,100
CONSOLIDATED PROFIT AND LOSS ACCOUNT
HALF YEAR TO 31 DECEMBER 2006
6 months 6 months Year ended
ended ended
31/12/06 31/12/05 30/06/06
Notes � � �
Turnover
Sales 116,020 - -
Executive Producer fees 52,959 29,155 27,436
Commissions 37,866 192,700 258,219
Recoverable project costs 82,143 216,156 260,261
Other income 39,988 - 18,046
_______ _______ _______
328,976 438,011 563,962
Recoverable expenses (82,143) (216,156) (260,261)
Other external charges (285,621) (214,591) (463,781)
Facility set-up costs (302,908) - -
Staff costs (170,984) (144,069) (310,465)
Depreciation (6,177) (5,805) (12,354)
Amortisation of film asset (69,612) - -
_______ _______ _______
Operating loss (588,469) (142,610) (482,899)
Finance costs (80,706) (1,321) (1,869)
Income from Investments 5,035 5,913 7,396
_______ _______ _______
Loss before tax (664,140) (138,018) (477,372)
Income tax expense - - -
_______ _______ _______
Loss for the year from continuing (664,140) (138,018) (477,372)
operations
Earnings per share
Basic 3 (0.80 pence) (0.17 pence) (0.57
pence)
Diluted 3 (0.80 pence) (0.17 pence) (0.57
pence)
CONSOLIDATED CASH FLOW STATEMENT
HALF YEAR TO 31 DECEMBER 2006
Note 6 months 6 months Year
ended ended ended
31/12/06 31/12/05 30/06/06
� � �
Cash flows from operating
activities
Cash used in operating activities 5 (554,655) (320,904) (536,472)
Interest paid (8,847) (1,321) (1,869)
Net cash (used in) operating (563,502) (322,225) (538,341)
activities
Cash flows from investing
activities
Purchases of property, plant and - (2,208) (2,977)
equipment
Purchase of film assets (1,964,285) - -
Interest received 5,035 5,913 7,396
Net cash (used in) investing 1,959,250 3,705 4,419
activities
Cash flows from financing
activities
Net proceeds on financing of film 3,673,469 - -
asset revenues
Repayment of loan (91,531) - -
Proceeds on issue of convertible - - 192,500
loan notes
Net cash (used in) financing 3,581,938 - 192,500
activities
Net increase/(decrease) in cash 1,059,186 (318,520) (341,422)
and cash equivalents
Cash and cash equivalents at 130,906 472,328 472,328
beginning of period
Cash and cash equivalents at end 1,190,092 153,808 130,906
of period
Bank balances and cash 1,190,092 153,808 130,906
NOTESTO THE ACCOUNTS
1. Accounting policies
The principal accounting policies are as set out in the June 2006 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.
2. Status of financial information
The interim results for the 6 months ended 31 December 2006 and the 6 months
ended 31 December 2005 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 2006 have been extracted from the audited annual accounts.
3. Earnings per share
Earnings 6 months 6 months Year ended
ended ended
30/06/06
31/12/06 31/12/05
�
� �
Earnings for the purpose of basic (664,140) (138,018) (477,372)
earnings per share (net loss for
the year)
Earnings for the purpose of diluted (664,140) (138,018) (477,372)
earnings per share
Number of shares 6 months 6 months Year ended
ended ended
30/06/06
31/12/06 31/12/05
Weighted average number of ordinary 83,175,000 83,175,000 83,175,000
shares for the purposes of basic
earnings per share
Weighted average number of ordinary 83,175,000 83,175,000 83,175,000
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.
4. Share capital
6 months ended 6 months ended Year ended
31/12/06 31/12/05 30/06/06
� � �
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 83,175 83,175
Reported at beginning of period 83,175 83,175 60,175
Reported at period end 83,175 83,175 83,175
At 31 December 2006, options over 8,950,000 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 1 July /vested 31 Dec / Share
price
2006 2006 From To
Options
22.04.05 4,450,000 - - - 4,450,000 5.0p 22.04.08 22.04.15
13.03.06 4,500,000 4,500,000 2.75p 13.03.09 12.03.16
----- ----- ----- ----- -----
8,950,000 - - - 8,950,000
Warrants
22.04.05 3,000,000 - - - 3,000,000 5.0p 22.04.05 22.04.08
5. Note to the cash flow statement
6 months ended 6 months ended Year ended
31/12/06 31/12/05 30/06/06
� � �
Loss for the year (664,140) (138,018) (477,372)
Adjustment for:
- Finance credits 75,671 (4,592) (5,527)
- Depreciation 6,177 5,805 12,354
- Amortisation 69,612 - -
Changes in working capital:
- Charge for share options - - 42,135
issued during the year
- Increase in trade and other (129,001) (272,259) (26,111)
receivables
- Increase in trade and other 87,026 88,160 (81,951)
payables
Cash used in operations (554,655) (320,904) (536,472)
6. Financial assets
6 months ended 6 months ended Year ended
31/12/06 31/12/05 30/06/06
� � �
Available-for-sale financial
assets
Beginning of the period 100 100 100
Additions 1,964,285 - -
Amortisation (69,612) - -
End of year 1,894,773 100 100
Available-for-sale financial assets include the following:
6 months ended 6 months ended Year ended
31/12/06 31/12/05 30/06/06
� � �
Unlisted securities:
Investment in Audley Films Ltd 100 100 100
Investment in film library 1,894,673 - -
1,894,773 100 100
Available-for-sale financial assets are denominated in the following
currencies:
6 months ended 6 months ended Year ended
31/12/06 31/12/05 30/06/06
� � �
Pound 100 100 100
United States Dollar 1,894,673 - -
1,894,773 100 100
7. Borrowings
6 months ended 6 months ended Year ended
31/12/06 31/12/05 30/06/06
� � �
Convertible loan notes 192,500 - 192,500
Other borrowings 3,653,798 - -
3,846,298 - 192,500
On 21 November 2007 the Group issued loan notes of $7.2 million secured against
the revenues of four new films. After deducting the costs of the transaction of
�302,000 and the cost of the films, cash released to the Group was $2.9 million
of which $1.08 million will be retained in an interest reserve account and
$1.81 million was available to the Group. No corporate guarantees were given in
respect of the repayment of the loan notes other than from the revenues from
the films acquired.
8. Post balance sheet event
On 22 January 2007 the Group issued loan notes of $2.43 million secured against
the revenues of one new film. After deducting the costs of the transaction and
the cost of the film, cash released to the Group was $790,000 of which $364,000
will be retained in an interest reserve account and $426,000 will be available
to the Group. No corporate guarantees have been given in respect of the
repayment of the loan notes other than from the revenues from the film
acquired.
END
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