INTANDEM FILMS PLC ("Intandem" or the "Company")
Half Yearly Results to 31 December 2007
Highlights
* Completion of production of Intandem's biggest film to date - How to Lose
Friends and Alienate People. Set for wide release in UK cinemas in October
through Paramount Pictures International
* Turnover doubled to �666,073 (six months to 31 December 2006: �329,000),
Operating Loss improved to �306,477 (six months to 31 December 2006: �588,469)
* Strong progress from Los Angeles based comic book company and film
production company,Radical Publishing in which Intandem has a strategic stake
* Secured rights in new films with an aggregate budget of $70 million set to
commence production by September 2008.
CHAIRMAN'S STATEMENT
The six months to 31 December 2007 was a positive, but at times a frustrating,
period for Intandem.
On the positive front, physical production was completed on the Company's
biggest film to date, the $27m budget comedy How to Lose Friends and Alienate
People starring Simon Pegg and Kirsten Dunst and we have secured cinema
distribution for the film in many major countries in the World starting around
October 2008.
In addition, we have seen considerable progress made in our strategic investment
in a Los Angeles based comic book company, Radical Publishing, further details
of which are set out below.
The frustration has been as a result of the uncertainty caused in the film
industry, particularly in the important North American market, by first the
strike by the Writers Guild of America which officially started in November 2007
and finished in February 2008 and then the threat of an actors' strike from July
2008 which slowed the green-lighting of projects. Intandem had at least four new
films with total budgets of $70million that were scheduled to commence
production in the first quarter of 2008 which were delayed as a result of this
uncertainty.
The good news is that the uncertainty has now been lifted. Intandem, as an
independent company, has secured waivers from the Screen Actors Guild in the
United States, therefore, none of its productions will now be affected by an
actors' strike. The four films are now all scheduled to commence production in
the second and third quarters of 2008.
Results
Turnover in the six months to 31 December 2007 more than doubled to �666,073
(six months to 31 December 2006:- �329,000) the turnover does not include any
commission from How to Lose Friends and Alienate People which is expected to be
included in the second half of the year.
No executive producer fees were earned in the first half although as outlined
below, we were very active in increasing the number of new films we represent
and the fees will be earned when the films commence production.
Operating losses were reduced from �588,469 to �306,477 although loss before tax
increased slightly to �696,811 (six months to 31 December 2006:-�664,140) as a
result of an increase in finance and interest costs from �80,706 to �412,997.
The majority of the interest cost relates to a loan note taken out to acquire a
library of films in November 2006 and January 2007.
Existing Films
How to Lose Friends and Alienate People is scheduled to be delivered by May
2008. Intandem will then be entitled to its non deferred sales commission and
sales expenses. The film has been sold to all major countries in the world, with
the exception of North America, Japan, Spain and France. Intandem, as the
exclusive worldwide sales company for the film is currently in negotiations to
conclude a sale in the important North American market which, if successful,
will result in a major cinema release throughout North America. We will be
marketing the film to the other unsold territories at the forthcoming Cannes
Film festival in May 2008. Paramount Pictures International has acquired the
distribution rights for the UK, Australia and South Africa and is planning a
wide cinema release on over 400 screens in the UK in October 2008. We have
worked extremely hard alongside the producers and distributors on this film and
are very excited by its box office prospects.
Sales for And When Did You Last see Your Father , starring Jim Broadbent and
Colin Firth have been disappointing and below expectations. The film is due to
be released in North America by Sony Pictures Classics in May 2008, which may
assist sales in the remaining unsold territories.
The delivery of Gallow Walker, starring Wesley Snipes has been delayed as a
result of refinancing of the film in post production. The financing issues are
being resolved and the film is now scheduled for delivery by the third quarter
of 2008. Sales to date are in excess of $6million and Intandem will be entitled
to commission upon receipt of the sales revenues after delivery of the film.
New Films
Management has spent considerable time since June 2007 in identifying and
securing rights in a number of new films which are scheduled to commence
production during the next six months. Intandem will be an executive producer on
these films for which it will receive a fee from the budget of the film and has
been appointed as the worldwide sales company for which it will earn commission
on sales generated.
The four films contracted with estimated production schedules are set out below:-
Let It Ride is a $23 million budget "heist" film which is currently being cast
in Los Angeles. It is expected to commence production in New Orleans by June
2008.
Mine Mine Mine is a high concept American comedy with a budget of $7 million and
is scheduled to commence production in New Mexico by June 2008.
Blown is a $15 million budget sophisticated thriller set in London and due to
commence production in August 2008.
Tatua is a high concept action film whose budget is expected to be circa $25
million. The location for filming is still to be decided but it is expected to
commence production by September 2008.
In addition to the above four films, the Company has secured rights in four
other films for which no production date has been set and is in negotiations on
several other films for which it expects to secure sales rights. Further details
about these films will be announced in due course.
The Board is pleased with the quality of film projects it is able to attract
and, now that the uncertainty of the last six months surrounding the writers'
strike and proposed actors' strike has been lifted, it expects considerable
progress to be made in closing the casting and financing for its new slate of
films.
Radical Publishing ("Radical")
Radical is a Los Angeles based intellectual property company specialising in the
creation and publishing of comic books and graphic novels. Its strategy is to
build a catalogue of intellectual properties for packaging as live action
feature films as well as for applications in all ancillary sectors such as
merchandising and video games. On 23 July 2007, Intandem announced it had
acquired a 5 per cent. stake in the company and was appointed as the sales
company for foreign sales and an executive producer on its film projects via
Radical Pictures.
Radical commences the publishing of comic books in May 2008. Its first two
titles are Hercules and Caliber. Radical has agreed a deal in principle with a
major Los Angeles based production company linked to a US Studio to sell the
film rights to Hercules for a total sum in excess of $1million. The production
company will finance the development of the script and the production of the
film and Radical will retain an ownership position in the underlying rights. In
addition, Caliber, created by Sam Sarkar of Infinitum Nihil, Johnny Depp's
production company, is being actively developed with Radical Pictures, Infinitum
Nihil, and John Woo's Lion Rock Productions. John Woo is attached to direct the
film based on the comic property, and Radical has retained the film rights.
Intandem will work closely with the company and its Los Angeles based agency to
secure the production financing for the film, commencing during Cannes 2008.
Radical has a full publishing programme of titles for the duration of 2008 and
2009. The company is also staging its full launch at the world's leading comic
book market, Comic Con International, in July 2008 in San Diego, California.
Shareholders can follow the progress of Radical by its website at
www.radicalcomics.com.
The Board is pleased with its investment in, and its close relationship with,
Radical and is confident that it will contribute significantly to Intandem's
expansion in the future through securing rights in major tentpole motion
pictures.
Current Trading
As outlined above, conditions in the film industry have been difficult for the
last six months which has delayed the receipt of executive producer fees to the
Company. The Board however believe that the Company is in a relatively strong
position because it has secured rights in several commercial films, particularly
from the United States.
The next three to six months are expected to present challenges as we progress
the new film slate into production. Executive producer fees should be earned
from the new film slate, and the Company should start to receive contracted
commission revenues from How to Lose Friends and Alienate People and
GallowWalker from June 2008. The Board believes that it has sufficient working
capital facilities in place to meet its foreseeable requirements.
Outlook
Following the clearing of the uncertainty surrounding the film industry over the
last six months, the Board views the future with renewed confidence. We are
excited about closing a North American deal for How to Lose Friends and Alienate
People and for its cinema release around the World. It is Intandem's highest
profile film to date and we expect to be involved in many more high profile
films in the future. We are also looking forward to the next phase of our
expansion with a new slate of films and the growth of Radical Publishing. As
ever, all our staff have worked extremely hard in difficult circumstances and we
are all confident that our hard work will be rewarded with the expansion of the
Company. Shareholders can keep up to date with our activities at
www.intandemfilms.com
Gary Smith
Chairman
CONSOLIDATED BALANCE SHEET
HALF YEAR ENDED 31 DECEMBER 2007
As at As at As at
31/12/07 31/12/06 30/6/07
Notes � � �
Assets
Non-current assets
Property, plant and equipment 9,611 19,275 14,438
Financial assets 6 1,934,786 1,894,773 2,228,719
_______ _______ _______
1,944,786 1,914,048 2,243,157
Current Assets
Trade receivables 467,001 102,054 945,950
Other current assets 617,359 432,589 706,852
Cash and cash equivalents 1,124,039 1,190,092 810,379
_______ _______ _______
2,208,399 1,724,735 2,463,181
_______ _______ _______
Total assets 4,152,796 3,638,783 4,706,338
_______ _______ _______
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
Foreign exchange reserve 2,823 8,791
Retained earnings (2,811,655) (1,662,167) (2,124,338)
_______ _______ _______
(1,632,837) (486,172) (939,552)
Non-current liabilities
Deferred income 4,604 7,855 4,604
Convertible loan notes 7 367,500 192,500 192,500
Borrowings 7 4,766,931 3,653,798 4,783,056
_______ _______ _______
5,139,035 3,854,153 4,980,160
Current liabilities
Trade and other payables 646,598 270,802 665,730
_______ _______ _______
Total liabilities 5,785,633 4,124,955 5,645,890
_______ _______ _______
Total equity and liabilities 4,152,796 3,638,783 562,100
_______ _______ _______
CONSOLIDATED PROFIT AND LOSS ACCOUNT
HALF YEAR TO 31 DECEMBER 2007
6 months 6 months Year
ended ended ended
31/12/07 31/12/06 30/06/07
Notes � � �
Turnover
Sales 535,919 116,020 935,140
Executive producer fees - 52,959 266,425
Commissions 2,647 37,866 47,830
Recoverable project costs 126,720 82,143 298,948
Other income 787 39,988 47,213
_______ _______ _______
666,073 328,976 1,595,556
Recoverable expenses (126,720) (82,143) (298,948)
Other external charges (312,247) (588,529) (1,045,382)
Staff costs (228,572) (170,984) (400,584)
Depreciation (6,602) (6,177) (12,882)
Amortisation of film assets (298,409) (69,612) (568,331)
_______ _______ _______
Operating loss (306,477) (588,469) (730,571)
Finance costs (412,997) (80,706) (492,483)
Income from investments 22,663 5,035 30,427
_______ _______ _______
Loss before tax (696,811) (664,140) (1,192,627)
Income tax expense - - -
_______ _______ _______
Loss for the year from (696,811) (664,140) (1,192,627)
continuing operations _______ _______ _______
Earnings per share
Basic 3 (0.84pence) (0.80pence) (1.43pence)
Diluted 3 (0.84pence) (0.80pence) (1.43pence)
CONSOLIDATED CASH FLOW STATEMENT
HALF YEAR TO 31 DECEMBER 2007
Note 6 months 6 months Year
ended ended ended
31/12/07 31/12/06 30/06/07
� � �
Cash flows from operating activities
Cash from (used in) operating activities 5 547,844 (554,655) (851,500)
Interest paid (412,997) (8,847) (492,483)
________ ________ ________
Net cash (used in) operating activities 134,847 (563,502) (1,343,983)
Cash flows from investing activities
Purchases of property, plant and equipment (1,775) - (1,868)
Purchase of film assets - (1,964,285) (2,712,762)
Investment in associated companies - (75,397)
Interest received 22,663 5,035 30,427
________ ________ ________
Net cash from (used in) investing activities 20,888 (1,959,250) (2,759,600)
Cash flows from financing activities
Net proceeds on financing of film asset revenues - 3,673,469 4,815,000
Repayment of loan (17,075) (91,531) (31,944)
Proceeds on issue of convertible loan notes 175,000 - -
________ ________ ________
Net cash from financing activities 157,925 3,581,938 4,783,056
Net increase in cash and cash equivalents 313,660 1,059,186 679,473
Cash and cash equivalents at beginning of period 810,379 130,906 130,906
________ ________ ________
Cash and cash equivalents at end of period 1,124,039 1,190,092 810,379
________ ________ ________
Bank balances and cash 1,124,039 1,190,092 810,379
________ ________ ________
NOTES TO THE ACCOUNTS
1. Accounting policies
The principal accounting policies are as set out in the June 2007 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 2007 and the 6 months
ended 31 December 2006 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 2007 have been extracted from the audited annual accounts.
3. Earnings per share
Earnings 6 months 6 months Year
ended ended ended
31/12/07 31/12/06 30/06/07
� � �
Earnings for the purpose of (696,811) (664,140) (1,192,627)
basic earnings per share
(net loss for the year)
Earnings for the purpose of (696,811) (664,140) (1,192,627)
diluted earnings per share
Number of shares 6 months 6 months Year
ended ended ended
31/12/07 31/12/06 30/06/07
Weighted average number of 83,175,000 83,175,000 83,175,000
ordinary shares for the
purposes of basic earnings
per share
Weighted average number of 83,175,000 83,175,000 83,175,000
ordinary 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 6 months Year
ended ended ended
31/12/07 31/12/06 30/06/07
� � �
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 83,175
_______ _______ _______
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 Exercised At Exercise Exercise Period
grant 1 July Granted /vested Forfeits 31 Dec /Share price From To
2006 2006
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 6 months Year
ended ended ended
31/12/07 31/12/06 30/06/07
� � �
Loss for the year (696,811) (664,140) (1,192,627)
Adjustment for:
- Finance credits 390,334 75,671 462,056
- Depreciation 6602 6,177 12,882
- Amortisation 298409 69,612 568,331
Changes in working capital:
- Charge for share options - - 66,315
issued during the year
- Increase in trade and 568,442 (129,001) (1,247,160)
other receivables
- Increase in trade and (19,132) 87,026 478,703
other payables _______ _______ _______
Cash from (used in) 547,844 (554,655) 851,500
operations _______ _______ _______
6. Financial assets
6 months 6 months Year
ended ended ended
31/12/07 31/12/06 30/06/06
� � �
Available-for-sale
financial assets
Beginning of the period 2,228,719 100 100
Additions - 1,964,285 2,737,897
Amortisation (293,933) (69,612) (509,278)
_______ _______ _______
End of year 1,934,786 1,894,773 2,228,719
_______ _______ _______
Available-for-sale financial assets include the following:
6 months 6 months Year
ended ended ended
31/12/07 31/12/06 30/06/07
� � �
Unlisted securities:
Investment in Audley Films 100 100 100
Ltd
Investment in film library 1,859,289 1,894,673 2,153,222
Investment in Radical 75,397 - 75,397
Publishing _______ _______ _______
1,934,786 1,894,773 2,228,719
_______ _______ _______
Available-for-sale financial assets are denominated in the following currencies:
6 months 6 months Year
ended ended ended
31/12/07 31/12/06 30/06/07
� � �
Pound 100 100 100
United States Dollar 1,934,686 1,894,673 2,228,619
_______ _______ _______
1,934,786 1,894,773 2,228,719
_______ _______ _______
7. Borrowings
6 months 6 months Year
ended ended ended
31/12/07 31/12/06 30/06/07
� � �
Convertible loan notes 367,500 192,500 192,500
Other borrowings 4,766,931 3,653,798 4,783,056
_______ _______ _______
5,134,431 3,846,298 4,975,556
_______ _______ _______
In November 2006 and January 2007 the Group issued loan notes secured against the
revenues of five new films and the amount outstanding on the loan notes is the
total amount of Other Borrowings. No corporate guarantees have been given in
respect of the repayment of the loan notes other than from the revenues from the
films acquired.
Contact details:
Gary Smith, Chairman and Chief Executive
Intandem Films PLC
Telephone: +44 (0) 20 7851 3800
Email: info@intandemfilms.com
www.intandemfilms.com
Ross Andrews, Nominated Adviser
City Financial Associates
Telephone: +44 (0) 20 7492 4777
Ruari McGirr, Broker
St Helen's Capital
020 7628 5582
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