TIDMIMAC
RNS Number : 0285E
Ingenious Media Active Capital Ltd
14 December 2009
INGENIOUS MEDIA ACTIVE CAPITAL
14 December 2009
Unaudited half-yearly results for the period 1 April 2009 to 30 September 2009
Ingenious Media Active Capital Limited today announces its half-yearly results
for the period from 1 April 2009 to 30 September 2009.
CHAIRMAN'S STATEMENT
I am pleased to present the half-yearly financial report in respect of Ingenious
Media Active Capital Limited (the "Company") for the period 1 April 2009 to 30
September 2009.
The Company was admitted to trading on AIM in April 2006 with the business
objective to make equity or equity-related investments in media and
entertainment companies in order to achieve capital growth for its shareholders.
Investments
In the six months ended 30 September 2009, the Company made no new investments.
Additional funding was provided to three existing investments:
* GBP200k drawdown for Brand Events from an existing commitment;
* GBP150k drawdown for Two Way Media from an existing commitment; and
* GBP310k drawdown for Trinity Universal from a new commitment.
This brings the total funds invested as at the date of this report to GBP85.1
million (GBP92.1 million including funds committed) in 16 entities. The
Company's net asset value per share as at 30 September 2009 was 65.64 pence,
compared to 68.83 pence at 31 March 2009.
A description of the market and the Company's investment activities to date can
be found in the Manager's Review which follows this statement.
Outlook
Overall trading conditions for our portfolio companies remain challenging, both
as a result of the continuing recession and also due to some of our investee
companies being yet to achieve optimal scale.
However despite this, the portfolio is performing satisfactorily and we look
forward to continuing improvement in general economic conditions in 2010/11.
As a reflection of confidence in the future, the parent company of the Manager,
Ingenious Media, has recently increased its shareholding in IMAC to 23.38m
shares (16.3% of the total voting rights).
Mike Luckwell
Chairman
11 December 2009
MANAGER'S REVIEW
Market Review and Prospects
Slowly the economic climate is improving, with many of the major world economies
returning to growth. Sadly the UK is lagging behind others in its recovery,
although both the general climate and underlying trading conditions appear to
have stabilised. That said, there is still concern about the sustainability and
rate of recovery overseas, as well as the UK's form of recovery when it comes.
The UK has its own specific issues in terms of national debt and an upcoming
general election which will add uncertainty to the first half of 2010.
In addition, the media sector as a whole continues to be affected by sector
specific issues, including on-line piracy and a significant decline in
advertising revenue. Accordingly, the Manager is making an investment assumption
that economic recovery will only follow in 2011.
Despite this, the portfolio is stable and positioned for growth as conditions
improve. The decision to suspend investing in 2008 has preserved significant
cash in the fund, enabling the Manager to take advantage of both new investment
opportunities and follow-on acquisitions for the portfolio companies.
Investment Activity
In the six months ended 30 September 2009, the Company made no new investments.
Additional funding was provided to three existing investments:
* GBP200k drawdown for Brand Events from an existing commitment;
* GBP150k drawdown for Two Way Media from an existing commitment; and
* GBP310k drawdown for Trinity Universal from a new commitment.
This brings the total funds invested as at the date of this report to GBP85.1
million (GBP92.1 million including funds committed) in 16 entities.
As market conditions have improved, the Manager has re-commenced its active
review of new opportunities.
+--------------------------+------------+
| Investments considered | GBP |
| by sector | millions |
+--------------------------+------------+
| | |
+--------------------------+------------+
| Live | GBP60.8 |
+--------------------------+------------+
| Distribution | GBP181.3 |
+--------------------------+------------+
| Content | GBP782.9 |
+--------------------------+------------+
| Marketing Services | GBP457.9 |
+--------------------------+------------+
| Publishing | GBP398.7 |
+--------------------------+------------+
| Internet / New Media | GBP1,010.9 |
+--------------------------+------------+
| Broadcasting | GBP285.4 |
+--------------------------+------------+
| Other | GBP262.8 |
+--------------------------+------------+
| Total | GBP3,440.7 |
+--------------------------+------------+
+--------------------------+----------+
| Investments made by | GBP |
| sector | millions |
+--------------------------+----------+
| | |
+--------------------------+----------+
| Live | GBP8.1 |
+--------------------------+----------+
| Distribution | GBP15.2 |
+--------------------------+----------+
| Content | GBP16.0 |
+--------------------------+----------+
| Marketing Services | GBP15.6 |
+--------------------------+----------+
| Publishing | GBP22.9 |
+--------------------------+----------+
| Internet / New Media | GBP14.3 |
+--------------------------+----------+
| Total | GBP92.1 |
+--------------------------+----------+
Investments and Committed Funds
Whizz Kid Entertainment Limited
June 2006, GBP2.25 million
February 2008, GBP2.00 million
Whizz Kid is an independent TV production company formed by Malcolm Gerrie,
former Chief Executive and co-founder of Initial which was sold in 1992 to what
became Endemol. Whizz Kid creates and produces audio-visual content for
multi-platform distribution in a range of genres including music, events and
entertainment. The company also looks to exploit opportunities in both the
domestic and international markets for content-led media companies.
The company has now successfully established its credentials in entertainment
production, following the groundbreaking show, The Nokia Green Room on Channel
4, with a hit prime-time series for the BBC, Let's Dance for Comic Relief,
co-produced with Ingenious Live VCT 1 plc, Ingenious Live VCT 2 plc, Ingenious
Entertainment VCT 1 plc and Ingenious Entertainment VCT 2 plc, which aired on
Saturday nights on BBC1 in February and March 2009.
The company won a major digital commission to produce coverage of a U2 concert
for a live streamed broadcast on You Tube, one of only a few live broadcasts on
the website. The broadcast attracted almost 10 million viewers across the world.
The company is also making progress into the advertiser-funded content market
through its investment in Precious Media with Peter Christiansen which recently
distributed the F1 Rocks event sponsored by LG from Singapore. We believe that
both digital and advertiser-funded content are strategically important areas for
the company given the current difficulties facing the UK's commercial
broadcasters.
Digital Rights Group Limited
December 2006, GBP3.00 million
June 2007, GBP3.00 million
November 2007, GBP5.27 million
Digital Rights Group is a TV sales and rights distribution group which provides
TV producers with international distribution for their rights and programmes,
independently of the major broadcasters or other TV-producer-owned distributors.
Operating across multiple genres, with a focus on high quality programming, DRG
is also looking to exploit opportunities across new media platforms, including
mobile and IPTV.
Since investment, DRG has acquired Portman Film and Television, one of the UK's
leading drama distributors, which developed the Stephen Fry drama, Kingdom. More
recently DRG has acquired:
iD Distribution - a leading distributor of factual entertainment whose
programming includes The Real Hustle, Nigella's Treats and Cruiseline;
Zeal Entertainment - a specialist in format sales which represents some of the
UK's leading producers such as Wall to Wall, Monkey, So Television and 12 Yard
Productions;
i-Rights - which specialises in content for new media, and which represents all
the companies in the Digital Rights Group in distribution to digital platforms;
and
Channel 4 International - the TV rights distributor of UK broadcaster Channel 4.
DRG has now completed its first full year of business as a consolidated group,
during which it underwent a cost rationalisation programme and internal
re-organisation. The management team is continuing to work on operational
synergies within the business and is also examining attractive new investment
opportunities in both TV and digital rights.
Outside Line Limited
March 2007, GBP1.50 million
Founded by Ant Cauchi and Lloyd Salmons in 2000, Outside Line is a digital
marketing and creative agency which specialises in the consumer entertainment
and lifestyle sectors, providing expertise in new digital marketing disciplines
including online PR, viral and community marketing and research and digital
production. The company has a strong client base comprising some of the biggest
names in the entertainment world, including The Beatles, Robbie Williams and
Sega Games, along with projects for leading consumer brands, such as
PlayStation, Adidas and Lynx.
Outside Line has achieved consistent revenue and earnings growth since
investment by IMAC and is well positioned to continue this. Management are
currently reviewing a number of options to accelerate growth.
Two Way Media Holdings Limited
May 2007, GBP5.34 million
January 2009 GBP0.60 million
Two Way Media is a UK-based interactive television company which has
transitioned itself from being a supplier of red-button technology and
professional services to UK cable operators and channels to a multiplatform
interactive TV production and distribution company.
Subsequent to IMAC's investment, Two Way became one of the country's leading
cross-platform gambling production companies with the delivery of the Challenge
Jackpot gambling channel on TV/online in partnership with Virgin Media. This
joint venture was sold to Netplay in May 2009.
Two Way is now focused on red-button gaming, and is already the largest supplier
of this type of gaming and content to the UK cable platform. It has a strong
pipeline of opportunities both to supply similar red-button content to IPTV
operators across Europe as well as to develop branded casual games content
online, for TV and now on mobiles.
Brand Events Holdings Limited
June 2007, GBP7.02 million
A leader in the consumer exhibitions market, Brand Events has established a
strong reputation within the UK for successfully launching new consumer shows.
The company's established operating model borrows skills and techniques from the
entertainment, media and leisure sectors and combines them with traditional
exhibition skills. The company has now established two key shows: the Taste
Festivals, food festivals celebrating different foods; and Top Gear Live, the
Top Gear branded live motoring theatre format.
In addition the company has rapidly built a network of international joint
ventures and partners to stage these shows around the world. This is a unique
achievement, especially in such a short time frame, and Brand Events will now
look to build further its international network and to develop new live consumer
formats that can be rolled out internationally.
QobliQ Limited
December 2007, GBP7.50 million
May 2008, GBP2.30 million
November 2008, GBP2.77 million
QobliQ was formed with the aim of creating the leading international innovative
marketing services group, combining sponsorship, digital and experiential
marketing to provide brands with an integrated innovative marketing solution.
The company is exploiting a structural shift in spend away from traditional
above-the-line advertising into innovative below-the-line marketing activities
which enable brands to engage with their target audience on a more personal
level, whilst typically delivering higher return on investment. The management
team of QobliQ is led by Xavier Quattrocchi-Oubradous and Roland Giscard
d'Estaing, who founded Sponsorclick France SARL, a Paris-based sponsorship
consultancy, and who both have backgrounds in M&A and investment banking.
In December 2007, QobliQ completed its first acquisition of brandRapport
Limited, the leading independent sponsorship agency in the UK. In May 2008, IMAC
invested a further GBP2.3 million in QobliQ allowing the company to acquire
leading Paris-based experiential marketing agency, Nouveau Jour, and
SponsorClick France, an independent sponsorship marketing consultancy based in
Paris. IMAC invested a further GBP2.8 million in November 2008 in order for the
company to acquire Arena International Limited and Arena Sports Marketing
Limited (together, "Arena"), a leading UK sponsorship consultancy specialising
in football. The acquisition of Arena, which has been merged into Brand Rapport
and re-branded brandRapport Arena, extends the group's already impressive track
record into football partnerships through its work with the Barclaycard
Premiership and FA Cup with E.ON.
The management of the QobliQ group is currently identifying further potential
acquisition targets to continue the group's growth, taking advantage of reduced
prices in the market, and is working with the existing group companies to
extract synergies and develop new business opportunities.
Review Centre Limited
June 2008, GBP7.03 million
Leading consumer generated review site, Review Centre (www.reviewcentre.com) was
acquired in June 2008 by IMAC in a management-buy-in (MBI) deal.
The MBI team is led by Nick Hynes as Non-Executive Chairman and Glen Collins as
Chief Executive Officer. Nick Hynes was previously Chief Executive Officer of
The Search Works, the search engine marketing provider (sold to Tradedoubler in
July 2007 for GBP56 million), and prior to that headed Overture Europe, Yahoo's
search advertising business. Glen Collins is a career online marketer who
founded and ran pioneering online marketing and web development agency Digital
Outlook, until exiting the business in 2006 to look at new ventures.
Review Centre was established in 1999 to allow internet users to post their
product reviews on online bulletin boards. It now provides reviews across a very
broad base of different products and services, encompassing automotive,
electrical, entertainment, finance, lifestyle, sport and travel. In 2002 it
switched its business model to pay-per-click advertising, significantly
enhancing revenues. The business has grown steadily, primarily due to an
expanding database of consumer reviews, a booming e-commerce market and
increased consumer interest in researching purchases online.
Since investment, the new management team has pressed ahead with a redesign of
the website and enhancing the user experience for both writing and reading
reviews. The new site has also allowed the business to add new revenue streams
including price comparison, as well as sign further commercial deals.
Ingenious Ventures Limited Partnership
IMAC's investment in Cream and Stage Three Music is via its Limited Partnership
interest in the Ingenious Ventures Limited Partnership ("IVLP") fund. This
interest was purchased from UBS (Jersey) Limited in August 2008. Ingenious Media
Limited remains the other (minority) partner in the Limited Partnership.
Cream Holdings Limited
August 2008, GBP1.03 million
Cream is a live events company based around the Cream dance brand and is run by
James Barton. Its main activities are festivals in the UK and licensed shows
overseas. The company also operates club nights in both Liverpool and Ibiza and
has bar activities and a compilation record label.
Its best known event, Creamfields, is held over the August Bank Holiday every
year. This year's two day festival was a sell-out, with headline acts including
Tiesto, Basement Jazz and Dizzee Rascal. The event has recently experienced
further success by winning "Best Dance Event" of 2009 at the prestigious UK
Festival Awards.
Stage Three Music Limited
August 2008, GBP5.03 million
Stage Three is an independent music publishing company which acquires and
exploits existing music catalogues as well as signing writers in the creation of
new copyright in songs. Since its inception it has acquired the rights to
Aerosmith, ZZ Top, Gerry Rafferty and many other songwriters. The CEO, Steve
Lewis, formerly led Virgin Music Publishing and then Chrysalis Music Publishing.
Stage Three is provided with acquisition debt by Bank of Ireland, as well as
co-investment equity from Apax Partners, who are currently the majority
shareholder in the company.
Portfolio Rationalisation
In addition to the companies listed above, on the advice of the Manager, IMAC
exited or reduced its exposure to a number of holdings during the first half of
the year. These decisions were taken after conducting an extensive and thorough
review of the portfolio in response to adverse market conditions.
Ingenious Ventures
11 December 2009
CONDENSED COMPANY STATEMENT OF COMPREHENSIVE INCOME (unaudited)
for the six months ended 30 September 2009
+----------------------------------------+------+------------+----------+------------+
| | | Six months | Six | Year |
| | | ended 30 | months | ended 31 |
| | | Sep 2009 | ended 30 | March 2009 |
| | | | Sep 2008 | |
+----------------------------------------+------+------------+----------+------------+
| | Note | GBP '000 | GBP '000 | GBP '000 |
+----------------------------------------+------+------------+----------+------------+
| | | | | |
+----------------------------------------+------+------------+----------+------------+
| Revenue | | 139 | 221 | 432 |
+----------------------------------------+------+------------+----------+------------+
| Other operating expenses | | (816) | (474) | (1,311) |
+----------------------------------------+------+------------+----------+------------+
| Investment revenue | | 185 | 1,899 | 2,758 |
+----------------------------------------+------+------------+----------+------------+
| Losses on investments at fair value | | (3,148) | (9,456) | (32,332) |
| through profit or loss | | | | |
+----------------------------------------+------+------------+----------+------------+
| Investment management fees | | (980) | (1,393) | (1,977) |
+----------------------------------------+------+------------+----------+------------+
| | | | | |
+----------------------------------------+------+------------+----------+------------+
| | | | | |
+----------------------------------------+------+------------+----------+------------+
| Loss on ordinary activities before | | (4,620) | (9,203) | (32,430) |
| taxation | | | | |
+----------------------------------------+------+------------+----------+------------+
| Tax on ordinary activities | 3 | - | - | - |
+----------------------------------------+------+------------+----------+------------+
| | | | | |
+----------------------------------------+------+------------+----------+------------+
| Loss for the period/year | | (4,620) | (9,203) | (32,430) |
+----------------------------------------+------+------------+----------+------------+
| | | | | |
+----------------------------------------+------+------------+----------+------------+
| Loss per share (basic and fully | 4 | (3.23) | (6.36) | (23.04) |
| diluted pence per share) | | | | |
+----------------------------------------+------+------------+----------+------------+
All income is attributable to the ordinary shareholders of the Company unless
otherwise stated.
All revenue and expenses are derived from continuing operations unless otherwise
stated.
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (unaudited)
for the six months ended 30 September 2009
+----------------------------------------+------+------------+----------+------------+
| | | Six months | Six | Year |
| | | ended 30 | months | ended 31 |
| | | Sep 2009 | ended 30 | March 2009 |
| | | | Sep 2008 | |
+----------------------------------------+------+------------+----------+------------+
| | Note | GBP '000 | GBP '000 | GBP '000 |
+----------------------------------------+------+------------+----------+------------+
| | | | | |
+----------------------------------------+------+------------+----------+------------+
| Continuing operations | | | | |
+----------------------------------------+------+------------+----------+------------+
| Revenue | | 17,200 | 22,932 | 46,590 |
+----------------------------------------+------+------------+----------+------------+
| Cost of sales | | (11,070) | (14,784) | (31,112) |
+----------------------------------------+------+------------+----------+------------+
| Other operating expenses and other | | (9,122) | (11,455) | (21,514) |
| revenue | | | | |
+----------------------------------------+------+------------+----------+------------+
| Investment revenue | | 206 | 1,975 | 3,517 |
+----------------------------------------+------+------------+----------+------------+
| Gains/(losses) on investments at fair | | 2,070 | (7,266) | (20,430) |
| value through profit or loss | | | | |
+----------------------------------------+------+------------+----------+------------+
| Impairment of goodwill | 5 | (3,819) | (777) | (7,916) |
+----------------------------------------+------+------------+----------+------------+
| Impairment of intangible assets | 6 | - | - | (1,693) |
+----------------------------------------+------+------------+----------+------------+
| Investment management fees | | (980) | (1,393) | (1,977) |
+----------------------------------------+------+------------+----------+------------+
| Finance costs | | (256) | (116) | (222) |
+----------------------------------------+------+------------+----------+------------+
| | | | | |
+----------------------------------------+------+------------+----------+------------+
| | | | | |
+----------------------------------------+------+------------+----------+------------+
| Loss on ordinary activities before | | (5,771) | (10,884) | (34,757) |
| taxation | | | | |
+----------------------------------------+------+------------+----------+------------+
| Tax credit/(charge) on ordinary | 3 | 39 | (49) | (77) |
| activities | | | | |
+----------------------------------------+------+------------+----------+------------+
| Loss for the period/year from | | (5,732) | (10,933) | (34,834) |
| continuing operations | | | | |
+----------------------------------------+------+------------+----------+------------+
| Profit for the period/year from | 10 | 54 | 4,026 | 2,629 |
| discontinued operations | | | | |
+----------------------------------------+------+------------+----------+------------+
| | | | | |
+----------------------------------------+------+------------+----------+------------+
| Equity minority interests | 16 | (231) | 175 | 2,187 |
+----------------------------------------+------+------------+----------+------------+
| Loss for the period/year | | (5,909) | (6,732) | (30,018) |
| | | | | (22.90) |
| | | | | (22.87) |
| | | | | |
+----------------------------------------+------+------------+----------+------------+
| | | | | |
+----------------------------------------+------+------------+----------+------------+
| Loss per share on continuing | 4 | (4.17) | (7.56) | (24.74) |
| operations | | | | |
| (basic and fully diluted pence per | | | | |
| share) | | | | |
+----------------------------------------+------+------------+----------+------------+
| Earnings per share on discontinued | 4 | 0.04 | 2.78 | 1.87 |
| operations | | | | |
| (basic and fully diluted pence per | | | | |
| share) | | | | |
+----------------------------------------+------+------------+----------+------------+
| Loss per share | 4 | (4.13) | (4.77) | (22.87) |
| (basic and fully diluted pence per | | | | |
| share) | | | | |
+----------------------------------------+------+------------+----------+------------+
All income is attributable to the ordinary shareholders of the Company unless
otherwise stated.
All revenue and expenses are derived from continuing operations unless otherwise
stated.
CONDENSED COMPANY STATEMENT OF FINANCIAL POSITION (unaudited)
as at 30 September 2009
+----------------------------------------+------+-----------+-----------+------------+
| | | Six | Six | Year |
| | | months | months | ended 31 |
| | | ended 30 | ended 30 | March 2009 |
| | | Sep 2009 | Sep 2008 | |
+----------------------------------------+------+-----------+-----------+------------+
| | Note | GBP '000 | GBP '000 | GBP '000 |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Non current assets | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Investment in subsidiaries | 7 | 34,648 | 46,381 | 38,416 |
+----------------------------------------+------+-----------+-----------+------------+
| Financial assets at fair value through | 11 | 1,280 | 12,565 | - |
| profit or loss | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | 35,928 | 58,946 | 38,416 |
+----------------------------------------+------+-----------+-----------+------------+
| Current assets | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Trade and other receivables | | 307 | 733 | 795 |
+----------------------------------------+------+-----------+-----------+------------+
| Cash and cash equivalents | 12 | 58,121 | 62,513 | 60,460 |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | 58,428 | 63,246 | 61,255 |
+----------------------------------------+------+-----------+-----------+------------+
| Current liabilities | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Trade and other payables | | (380) | (255) | (1,129) |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Net current assets | | 58,048 | 62,991 | 60,126 |
+----------------------------------------+------+-----------+-----------+------------+
| Net assets | | 93,976 | 121,937 | 98,542 |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Equity | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Share premium account | | 71,275 | 71,275 | 71,275 |
+----------------------------------------+------+-----------+-----------+------------+
| Distributable reserves | | 70,663 | 70,663 | 70,663 |
+----------------------------------------+------+-----------+-----------+------------+
| Shares held in treasury | 14 | (515) | (293) | (515) |
+----------------------------------------+------+-----------+-----------+------------+
| Retained earnings | | (47,447) | (19,708) | (42,881) |
+----------------------------------------+------+-----------+-----------+------------+
| Total equity | | 93,976 | 121,937 | 98,542 |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Net asset value (basic and fully | 15 | 65.64 | 84.71 | 68.83 |
| diluted pence per share) | | | | |
+----------------------------------------+------+-----------+-----------+------------+
The financial statements were approved by the Board and authorised for issue on
11 December 2009.
Signed on behalf of the Board:
William SimpsonSerena Tremlett
Director Director
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (unaudited)
as at 30 September 2009
+----------------------------------------+------+-----------+-----------+------------+
| | | Six | Six | Year |
| | | months | months | ended 31 |
| | | ended 30 | ended 30 | March 2009 |
| | | Sep 2009 | Sep 2008 | |
+----------------------------------------+------+-----------+-----------+------------+
| | Note | GBP '000 | GBP '000 | GBP '000 |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Non current assets | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Goodwill | 5 | 14,449 | 29,772 | 18,197 |
+----------------------------------------+------+-----------+-----------+------------+
| Other intangible assets | 6 | 8,818 | 7,047 | 9,099 |
+----------------------------------------+------+-----------+-----------+------------+
| Fixtures, fittings and equipment | | 649 | 819 | 784 |
+----------------------------------------+------+-----------+-----------+------------+
| Financial assets at fair value through | 11 | 8,613 | 17,798 | 5,233 |
| profit or loss | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Interests in associates | 9 | (840) | (864) | (1,008) |
+----------------------------------------+------+-----------+-----------+------------+
| Deferred tax asset | | - | - | 3 |
+----------------------------------------+------+-----------+-----------+------------+
| Long term third party loans | | - | 28 | - |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | 31,689 | 54,600 | 32,308 |
+----------------------------------------+------+-----------+-----------+------------+
| Current assets | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Inventories | | 1,357 | 1,009 | 638 |
+----------------------------------------+------+-----------+-----------+------------+
| Trade and other receivables | | 28,600 | 32,062 | 30,139 |
+----------------------------------------+------+-----------+-----------+------------+
| Cash and cash equivalents | 12 | 70,955 | 76,514 | 74,217 |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | 100,912 | 109,585 | 104,994 |
+----------------------------------------+------+-----------+-----------+------------+
| Current liabilities | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Trade and other payables | | (36,773) | (35,967) | (35,168) |
+----------------------------------------+------+-----------+-----------+------------+
| Current tax liabilities | | (34) | (1,268) | (454) |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | (36,807) | (37,235) | (35,622) |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Net current assets | | 64,105 | 72,350 | 69,372 |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Non-current liabilities | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Long term third party loans | | (4,273) | (2,400) | (4,050) |
+----------------------------------------+------+-----------+-----------+------------+
| Deferred tax liability | | (4) | (9) | (4) |
+----------------------------------------+------+-----------+-----------+------------+
| Deferred consideration | | (3,723) | (7,136) | (4,135) |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | (8,000) | (9,545) | (8,189) |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Net assets | | 87,794 | 117,405 | 93,491 |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Equity | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Share premium account | | 71,275 | 71,275 | 71,275 |
+----------------------------------------+------+-----------+-----------+------------+
| Distributable reserves | | 70,663 | 70,663 | 70,663 |
+----------------------------------------+------+-----------+-----------+------------+
| Shares held in treasury | 14 | (515) | (293) | (515) |
+----------------------------------------+------+-----------+-----------+------------+
| Retained earnings | | (57,269) | (28,307) | (51,414) |
+----------------------------------------+------+-----------+-----------+------------+
| Foreign currency translation reserve | | 37 | (9) | 110 |
+----------------------------------------+------+-----------+-----------+------------+
| Equity attributable to equity holders | | 84,191 | 113,329 | 90,119 |
| of the parent | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Minority interest | 16 | 3,603 | 4,076 | 3,372 |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Total equity | | 87,794 | 117,405 | 93,491 |
+----------------------------------------+------+-----------+-----------+------------+
| | | | | |
+----------------------------------------+------+-----------+-----------+------------+
| Net asset value (basic and fully | 15 | 58.81 | 81.57 | 65.30 |
| diluted pence per share) | | | | |
+----------------------------------------+------+-----------+-----------+------------+
The financial statements were approved by the Board and authorised for issue on
11 December 2009.
Signed on behalf of the Board:
William SimpsonSerena Tremlett
Director Director
CONDENSED COMPANY STATEMENT OF CHANGES IN EQUITY (unaudited)
for the six months ended 30 September 2009
+----------------------------------+------+---------+----------------+----------+----------+---------+
| | Note | Share | Distribut-able | Shares | Retained | Total |
| | | premium | reserves GBP | held | earnings | equity |
| | | account | '000 | in | GBP '000 | GBP |
| | | GBP | | treasury | | '000 |
| | | '000 | | GBP '000 | | |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| Balance at 1 April 2009 | | 71,275 | 70,663 | (515) | (42,881) | 98,542 |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| Recognition in respect of | | - | - | - | 54 | 54 |
| share-based payments | | | | | | |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| Retained losses for the period | | - | - | - | (4,620) | (4,620) |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| | | | | | | |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| Balance at 30 September 2009 | | 71,275 | 70,663 | (515) | (47,447) | 93,976 |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| | | | | | | |
+----------------------------------+------+---------+----------------+----------+----------+---------+
for the six months ended 30 September 2008
+----------------------------------+------+---------+----------------+----------+----------+---------+
| | Note | Share | Distribut-able | Shares | Retained | Total |
| | | premium | reserves GBP | held | earnings | equity |
| | | account | '000 | in | GBP '000 | GBP |
| | | GBP | | treasury | | '000 |
| | | '000 | | GBP '000 | | |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| Balance at 1 April 2008 | | 71,275 | 73,092 | - | (10,559) | 133,808 |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| Share purchases | | - | (2,429) | (293) | - | (2,722) |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| Recognition in respect of | | - | - | - | 54 | 54 |
| share-based payments | | | | | | |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| Retained losses for the period | | - | - | - | (9,203) | (9,203) |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| | | | | | | |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| Balance at 30 September 2008 | | 71,275 | 70,663 | (293) | (19,708) | 121,937 |
+----------------------------------+------+---------+----------------+----------+----------+---------+
| | | | | | | |
+----------------------------------+------+---------+----------------+----------+----------+---------+
for the year ended 31 March 2009
+----------------------------------+------+---------+----------------+----------+----------+----------+
| | Note | Share | Distribut-able | Shares | Retained | Total |
| | | premium | reserves GBP | held | earnings | equity |
| | | account | '000 | in | GBP '000 | GBP |
| | | GBP | | treasury | | '000 |
| | | '000 | | GBP '000 | | |
+----------------------------------+------+---------+----------------+----------+----------+----------+
| Balance at 1 April 2008 | | 71,275 | 73,092 | - | (10,559) | 133,808 |
+----------------------------------+------+---------+----------------+----------+----------+----------+
| Share purchases | | - | (2,429) | (515) | - | (2,944) |
+----------------------------------+------+---------+----------------+----------+----------+----------+
| Recognition in respect of | | - | - | - | 108 | 108 |
| share-based payments | | | | | | |
+----------------------------------+------+---------+----------------+----------+----------+----------+
| Retained losses for the year | | - | - | - | (32,430) | (32,430) |
+----------------------------------+------+---------+----------------+----------+----------+----------+
| | | | | | | |
+----------------------------------+------+---------+----------------+----------+----------+----------+
| Balance at 31 March 2009 | | 71,275 | 70,663 | (515) | (42,881) | 98,542 |
+----------------------------------+------+---------+----------------+----------+----------+----------+
| | | | | | | |
+----------------------------------+------+---------+----------------+----------+----------+----------+
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)
for the six months ended 30 September 2009
+---------------------+------+-------------+----------------+--------------+--------------+--------------+----------+---------+
| | Note | Share | Distribut-able | Shares | Retained | Transla-tion | Minority | Total |
| | | premium | reserves GBP | held | earnings GBP | reserve GBP | interest | equity |
| | | account GBP | '000 | in | '000 | '000 | GBP | GBP |
| | | '000 | | treasury GBP | | | '000 | '000 |
| | | | | '000 | | | | |
+---------------------+------+-------------+----------------+--------------+--------------+--------------+----------+---------+
| Balance at 1 April | | 71,275 | 70,663 | (515) | (51,414) | 110 | 3,372 | 93,491 |
| 2009 | | | | | | | | |
+---------------------+------+-------------+----------------+--------------+--------------+--------------+----------+---------+
| Recognition in | | - | - | - | 54 | - | - | 54 |
| respect of | | | | | | | | |
| share-based | | | | | | | | |
| payments | | | | | | | | |
+---------------------+------+-------------+----------------+--------------+--------------+--------------+----------+---------+
| Other reserve | | - | - | - | - | (73) | - | (73) |
| movements | | | | | | | | |
+---------------------+------+-------------+----------------+--------------+--------------+--------------+----------+---------+
| Retained | | - | - | - | (5,909) | - | 231 | (5,678) |
| (losses)/profits | | | | | | | | |
| for the period | | | | | | | | |
+---------------------+------+-------------+----------------+--------------+--------------+--------------+----------+---------+
| | | | | | | | | |
+---------------------+------+-------------+----------------+--------------+--------------+--------------+----------+---------+
| Balance at | | 71,275 | 70,663 | (515) | (57,269) | 37 | 3,603 | 87,794 |
| 30 September 2009 | | | | | | | | |
+---------------------+------+-------------+----------------+--------------+--------------+--------------+----------+---------+
| | | | | | | | | |
+---------------------+------+-------------+----------------+--------------+--------------+--------------+----------+---------+
for the six months ended 30 September 2008
+---------------------+------+---------+----------------+----------+----------+--------------+----------+-----------+
| | Note | Share | Distribut-able | Shares | Retained | Transla-tion | Minority | Total |
| | | premium | reserves GBP | held | earnings | reserve | interest | equity |
| | | account | '000 | in | GBP '000 | GBP '000 | GBP '000 | GBP |
| | | GBP | | treasury | | | | '000 |
| | | '000 | | GBP '000 | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+-----------+
| Balance at 1 April | | 71,275 | 73,092 | - | (21,681) | - | 1,349 | 124,035 |
| 2008 | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+-----------+
| Share purchases | | - | (2,429) | (293) | - | - | - | (2,722) |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+-----------+
| Recognition in | | - | - | - | 54 | - | - | 54 |
| respect of | | | | | | | | |
| share-based | | | | | | | | |
| payments | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+-----------+
| Minority interest | 16 | - | - | - | - | - | 2,902 | 2,902 |
| on acquisition of | | | | | | | | |
| subsidiary | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+-----------+
| Other reserve | | - | - | - | 52 | (9) | - | 43 |
| movements | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+-----------+
| Retained losses for | | - | - | - | (6,732) | - | (175) | (6,907) |
| the period | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+-----------+
| | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+-----------+
| Balance at | | 71,275 | 70,663 | (293) | (28,307) | (9) | 4,076 | 117,405 |
| 30 September 2008 | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+-----------+
| | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+-----------+
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (unaudited)
for the year ended 31 March 2009
+---------------------+------+---------+----------------+----------+----------+--------------+----------+----------+
| | Note | Share | Distribut-able | Shares | Retained | Transla-tion | Minority | Total |
| | | premium | reserves GBP | held | earnings | reserve | interest | equity |
| | | account | '000 | in | GBP '000 | GBP '000 | GBP '000 | GBP |
| | | GBP | | treasury | | | | '000 |
| | | '000 | | GBP '000 | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+----------+
| Balance at 1 April | | 71,275 | 73,092 | - | (21,681) | - | 1,349 | 124,035 |
| 2008 | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+----------+
| Share purchases | | - | (2,429) | (515) | - | - | - | (2,944) |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+----------+
| Recognition in | | - | - | - | 108 | - | - | 108 |
| respect of | | | | | | | | |
| share-based | | | | | | | | |
| payments | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+----------+
| Minority interest | 16 | - | - | - | - | - | 4,210 | 4,210 |
| on acquisition of | | | | | | | | |
| subsidiary | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+----------+
| Other reserve | | - | - | - | 177 | 110 | - | 287 |
| movements | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+----------+
| Retained losses for | | - | - | - | (30,018) | - | (2,187) | (32,205) |
| the year | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+----------+
| | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+----------+
| Balance at 31 March | | 71,275 | 70,663 | (515) | (51,414) | 110 | 3,372 | 93,491 |
| 2009 | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+----------+
| | | | | | | | | |
+---------------------+------+---------+----------------+----------+----------+--------------+----------+----------+
CONDENSED COMPANY STATEMENT OF CASH FLOWS (unaudited)
for the six months ended 30 September 2009
+------------------------------------------+------+----------+-----------+------------+
| | | Six | Six | Year |
| | | months | months | ended 31 |
| | | ended 30 | ended 30 | March 2009 |
| | | Sep 2009 | Sep 2008 | |
+------------------------------------------+------+----------+-----------+------------+
| | Note | GBP '000 | GBP '000 | GBP '000 |
+------------------------------------------+------+----------+-----------+------------+
| Net cash flow from operating activities | | (1,679) | (84) | 431 |
+------------------------------------------+------+----------+-----------+------------+
| | | | | |
+------------------------------------------+------+----------+-----------+------------+
| Investing activities | | | | |
+------------------------------------------+------+----------+-----------+------------+
| Purchase of investments (net of | 11 | (310) | - | (600) |
| arrangement fees) | | | | |
+------------------------------------------+------+----------+-----------+------------+
| Acquisition of subsidiary undertakings | 7 | (350) | (15,900) | (19,434) |
| (net of arrangement fees) | | | | |
+------------------------------------------+------+----------+-----------+------------+
| Sale of investment | | - | - | 1,788 |
+------------------------------------------+------+----------+-----------+------------+
| | | | | |
+------------------------------------------+------+----------+-----------+------------+
| Net cash flow used in investing | | (660) | (15,900) | (18,246) |
| activities | | | | |
+------------------------------------------+------+----------+-----------+------------+
| | | | | |
+------------------------------------------+------+----------+-----------+------------+
| Financing activities | | | | |
+------------------------------------------+------+----------+-----------+------------+
| Share purchases | | - | (2,429) | (2,429) |
+------------------------------------------+------+----------+-----------+------------+
| Purchase of own shares to hold in | | - | (293) | (515) |
| treasury | | | | |
+------------------------------------------+------+----------+-----------+------------+
| | | | | |
+------------------------------------------+------+----------+-----------+------------+
| Net cash flow used in financing | | - | (2,722) | (2,944) |
| activities | | | | |
+------------------------------------------+------+----------+-----------+------------+
| Net decrease in cash and cash | | (2,339) | (18,706) | (20,759) |
| equivalents | | | | |
+------------------------------------------+------+----------+-----------+------------+
| Cash and cash equivalents at beginning | | 60,460 | 81,219 | 81,219 |
| of period/year | | | | |
+------------------------------------------+------+----------+-----------+------------+
| Cash and cash equivalents at end of | | 58,121 | 62,513 | 60,460 |
| period/year | | | | |
+------------------------------------------+------+----------+-----------+------------+
Cash flow from operating activities
+------------------------------------------+------+----------+----------+----------+
| | | | | |
+------------------------------------------+------+----------+----------+----------+
| Loss before taxation | | (4,620) | (9,203) | (32,430) |
+------------------------------------------+------+----------+----------+----------+
| Fair value loss on financial assets | | 3,148 | 9,456 | 32,332 |
+------------------------------------------+------+----------+----------+----------+
| Recognition of share based payments | | 54 | 54 | 108 |
+------------------------------------------+------+----------+----------+----------+
| Decrease/(increase) in amounts | | 615 | (242) | (305) |
| receivable | | | | |
+------------------------------------------+------+----------+----------+----------+
| (Decrease)/increase in amounts payable | | (749) | (149) | 726 |
+------------------------------------------+------+----------+----------+----------+
| Gain on cash fund | | (127) | - | - |
+------------------------------------------+------+----------+----------+----------+
| | | | | |
+------------------------------------------+------+----------+----------+----------+
| Net cash flow from operating activities | | (1,679) | (84) | 431 |
+------------------------------------------+------+----------+----------+----------+
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (unaudited)
for the six months ended 30 September 2009
+---------------------+----------+----------+-----------+------------+
| | | Six | Six | Year |
| | | months | months | ended 31 |
| | | ended 30 | ended 30 | March 2009 |
| | | Sep 2009 | Sep 2008 | |
+---------------------+----------+----------+-----------+------------+
| | Note | GBP | GBP | GBP |
| | | '000 | '000 | '000 |
+---------------------+----------+----------+-----------+------------+
| Net cash | | (4,542) | 3,978 | (1,152) |
| flow | | | | |
| from | | | | |
| operating | | | | |
| activities | | | | |
+---------------------+----------+----------+-----------+------------+
| | | | | |
+---------------------+----------+----------+-----------+------------+
| Investing | | | | |
| activities | | | | |
+---------------------+----------+----------+-----------+------------+
| (Purchase)/disposal | | (310) | 774 | (599) |
| of investments (net | | | | |
| of arrangement | | | | |
| fees) | | | | |
+---------------------+----------+----------+-----------+------------+
| Acquisition | 8 | (71) | (13,029) | (13,711) |
| of | | | | |
| subsidiary | | | | |
| undertakings | | | | |
+---------------------+----------+----------+-----------+------------+
| Sale of | | - | - | 1,788 |
| investment | | | | |
+---------------------+----------+----------+-----------+------------+
| Acquisition | 6 | (227) | (499) | (226) |
| of | | | | |
| intangibles | | | | |
+---------------------+----------+----------+-----------+------------+
| Disposal | | - | 75 | 1,382 |
| of non | | | | |
| current | | | | |
| assets | | | | |
+---------------------+----------+----------+-----------+------------+
| (Purchase)/disposal | | (73) | 68 | (784) |
| of fixtures, | | | | |
| fittings and | | | | |
| equipment | | | | |
+---------------------+----------+----------+-----------+------------+
| Cash | 10 | (57) | (41) | (189) |
| deconsolidated | | | | |
| on disposal of | | | | |
| discontinued | | | | |
| operations | | | | |
+---------------------+----------+----------+-----------+------------+
| | | | | |
+---------------------+----------+----------+-----------+------------+
| Net cash | | (738) | (12,652) | (12,339) |
| flow | | | | |
| used in | | | | |
| investing | | | | |
| activities | | | | |
+---------------------+----------+----------+-----------+------------+
| | | | | |
+---------------------+----------+----------+-----------+------------+
| Financing | | | | |
| activities | | | | |
+---------------------+----------+----------+-----------+------------+
| Share | | - | (2,429) | (2,429) |
| purchases | | | | |
+---------------------+----------+----------+-----------+------------+
| Purchase | | - | (293) | (515) |
| of own | | | | |
| shares | | | | |
| to hold | | | | |
| in | | | | |
| treasury | | | | |
+---------------------+----------+----------+-----------+------------+
| Dividends | | - | - | 934 |
| received | | | | |
| from | | | | |
| associates | | | | |
+---------------------+----------+----------+-----------+------------+
| Third | | 2,000 | (485) | 1,165 |
| party | | | | |
| borrowings | | | | |
+---------------------+----------+----------+-----------+------------+
| | | | | |
+---------------------+----------+----------+-----------+------------+
| Net cash | | 2,000 | (3,207) | (845) |
| flow | | | | |
| from/(used | | | | |
| in) | | | | |
| financing | | | | |
| activities | | | | |
+---------------------+----------+----------+-----------+------------+
| Net | | (3,280) | (11,881) | (14,336) |
| decrease | | | | |
| in cash | | | | |
| and cash | | | | |
| equivalents | | | | |
+---------------------+----------+----------+-----------+------------+
| Cash and | | 74,217 | 88,404 | 88,404 |
| cash | | | | |
| equivalents | | | | |
| at | | | | |
| beginning | | | | |
| of | | | | |
| period/year | | | | |
+---------------------+----------+----------+-----------+------------+
| Effect | | 18 | (9) | 149 |
| of | | | | |
| foreign | | | | |
| exchange | | | | |
| rate | | | | |
| changes | | | | |
+---------------------+----------+----------+-----------+------------+
| Cash and | | 70,955 | 76,514 | 74,217 |
| cash | | | | |
| equivalents | | | | |
| at end of | | | | |
| period/year | | | | |
+---------------------+----------+----------+-----------+------------+
| Cash | | | | |
| flow | | | | |
| from | | | | |
| operating | | | | |
| activities | | | | |
+---------------------+----------+----------+-----------+------------+
| Loss | | (5,678) | (6,912) | (32,218) |
| after | | | | |
| taxation | | | | |
+---------------------+----------+----------+-----------+------------+
| Fair | | (2,070) | 7,266 | 20,430 |
| value | | | | |
| (gain)/loss | | | | |
| on | | | | |
| financial | | | | |
| assets | | | | |
+---------------------+----------+----------+-----------+------------+
| Impairment | 5 | 3,819 | 777 | 7,916 |
| of | | | | |
| goodwill | | | | |
+---------------------+----------+----------+-----------+------------+
| Impairment | 6 | - | - | 1,693 |
| of | | | | |
| intangible | | | | |
| assets | | | | |
+---------------------+----------+----------+-----------+------------+
| Recognition | | 54 | 54 | 108 |
| of share | | | | |
| based | | | | |
| payments | | | | |
+---------------------+----------+----------+-----------+------------+
| Decrease/(increase) | | 1,666 | (2,702) | 196 |
| in amounts | | | | |
| receivable | | | | |
+---------------------+----------+----------+-----------+------------+
| (Decrease)/increase | | (2,143) | 4,679 | (830) |
| in amounts payable | | | | |
+---------------------+----------+----------+-----------+------------+
| (Increase)/decrease | | (719) | 294 | 655 |
| in inventories | | | | |
+---------------------+----------+----------+-----------+------------+
| Depreciation | | 208 | 192 | 823 |
| - fixtures, | | | | |
| fittings and | | | | |
| equipment | | | | |
+---------------------+----------+----------+-----------+------------+
| Amortisation | 6 | 508 | 96 | 127 |
| - intangible | | | | |
| assets | | | | |
+---------------------+----------+----------+-----------+------------+
| Gain on | | (127) | - | - |
| cash | | | | |
| fund | | | | |
+---------------------+----------+----------+-----------+------------+
| Other | | (60) | 234 | (52) |
+---------------------+----------+----------+-----------+------------+
| | | | | |
+---------------------+----------+----------+-----------+------------+
| Net cash | | (4,542) | 3,978 | (1,152) |
| flow | | | | |
| from | | | | |
| operating | | | | |
| activities | | | | |
+---------------------+----------+----------+-----------+------------+
Notes to the condensed Interim Financial Statements (unaudited)
for the six months ended 30 September 2009
1. General information
IMAC is a closed-end investment company with limited liability formed under the
Companies Law of Guernsey, and its shares are admitted to trading on AIM. The
Company was incorporated and registered in Guernsey on 17 February 2006. The
Company's registered office is Isabelle Chambers, Route Isabelle, St Peter Port,
Guernsey.
2. Summary of significant accounting policies
Basis of preparation
The condensed half-yearly financial report (unaudited) has been prepared using
accounting policies consistent with International Financial Reporting Standards
("IFRS") and in accordance with IAS 34 'Interim Financial Reporting'.
The same accounting policies, presentation and methods of computation are
followed in the condensed financial statements as applied in the Group's latest
annual audited financial statements.
Changes in accounting standards
The following new standards and amendments to standards are mandatory for the
first time for annual periods beginning on or after 1 January 2009:
a) The revised IAS 1, "Presentation of financial statements" prohibits the
presentation of items of income and expenses (that are "non-owner changes in
equity") in the statement of changes in equity, requiring "non-owner changes in
equity" to be presented separately from "owner changes in equity". All
"non-owner changes in equity" are required to be shown in a performance
statement.
Entities can choose whether to present one performance statement (the statement
of comprehensive income) or two statements (the income statement and statement
of comprehensive income). The Company has elected to present one statement; a
statement of comprehensive income. The interim financial statements have been
prepared under the revised disclosure requirements. Since the change in
accounting policy only impacts presentation aspects, there is no impact on
earnings per share.
b) On 30 November 2006, the International Accounting Standards Board issued IFRS
8, "Operating Segments", which replaces IAS 14 "Segment Reporting". This puts an
emphasis on the "management approach" to reporting on operating segments. The
new IFRS does not have any impact on these financial statements.
c) An amendment to IAS 32, "Financial Instruments: Presentation" clarifies under
which circumstances puttable financial instruments and obligations arising on
liquidation have to be treated as equity instruments. The adoption of the
amendment does not have any impact on these financial statements.
d) An amendment to IFRS 7, "Financial Instruments: Disclosures" was issued by
the International Accounting Standards Board on 5 March 2009. The amendment
requires the inclusion of an explicit three-level fair value hierarchy which
groups fair value measurements based on their observability and requires
numerical disclosure of fair values recognised in tabular format organised by
the level within each hierarchy. The adoption of the amendment does not have any
impact on these financial statements.
Going concern
The financial statements have been prepared on the going concern basis. IMAC
currently holds a significant cash balance in excess of the funds committed to
its investee companies. After making enquiries, and on the strength of its
balance sheet, the Directors are of the opinion that the Company and the Group,
unless otherwise disclosed, have adequate resources to continue their
operational activities for the foreseeable future. The Board is therefore of the
opinion that the going concern basis should be adopted in the preparation of the
financial statements.
Segmental reporting
The Directors are of the opinion that the Company and the Group are engaged in a
single segment of business of investing in media and entertainment companies and
operate solely from Guernsey and therefore no segmental reporting is provided.
Business combinations
The acquisition of subsidiaries is accounted for using the purchase method. The
cost of the acquisition is measured at the aggregate of the fair values, at the
date of exchange, of assets given, liabilities incurred or assumed, and equity
instruments issued by the Group in exchange for control of the acquiree, plus
any costs directly attributable to the business combination. The acquiree's
identifiable assets, liabilities and contingent liabilities that meet the
conditions for recognition under IFRS 3 are recognised at their fair value at
the acquisition date.
Goodwill arising on acquisition is recognised as an asset and initially measured
at cost, being the excess of the cost of the business combination over the
Group's interest in the net fair value of the identifiable assets, liabilities
and contingent liabilities recognised. If, after reassessment, the Group's
interest in the net fair value of the acquiree's identifiable assets,
liabilities and contingent liabilities exceeds the cost of the business
combination, the excess is recognised immediately in the statement of
comprehensive income. The Group tests goodwill annually, or more frequently if
there are indications that goodwill might be impaired.
The interest of minority shareholders in the acquiree is initially measured at
the minority's proportion of the net fair value of the assets, liabilities and
contingent liabilities recognised.
Financial assets at fair value through profit or loss
Investments, including equity and loan investments in subsidiaries, are
designated as fair value through profit or loss in accordance with IAS 39
"Financial Instruments: Recognition and Measurement", as the Company is an
investment company whose business is investing in financial assets with a view
to profiting from their total return in the form of interest and changes in fair
value. Investments are initially recognised at cost. The investments are
subsequently re-measured at fair value, as determined by the Directors.
Unrealised gains or losses arising from the revaluation of investments are taken
directly to the statement of comprehensive income. Fair value is determined as
follows:
Unquoted securities are valued based on the realisation value which is estimated
by the Directors with prudence and good faith. The Directors will take into
account the guidelines and principals for valuation of Portfolio Companies set
out by the European Venture Capital Association, with particular consideration
of the following factors:
* Fair value is the amount for which an asset could be exchanged between
knowledgeable, willing parties in an arm's length transaction.
* In estimating fair value for an investment, the Manager will apply a methodology
that is appropriate in the light of the nature, facts and circumstances of the
investment and its materiality in the context of the total investment portfolio
and will use reasonable assumptions and estimations.
* An appropriate methodology incorporates available information about all factors
that are likely to materially affect the fair value of the investment. The
valuation methodologies are applied consistently from period to period, except
where a change would result in a better estimate of fair value. Any changes in
valuation methodologies will be clearly disclosed in the financial statements.
The most widely used methodologies are listed below. In assessing which
methodology is appropriate, the Directors are predisposed towards those
methodologies that draw upon market-based measures of risk and return.
* Cost of recent investment
* Earnings multiple
* Net assets
* Available market prices
Gains or losses arising from changes in the fair value of the 'financial assets
at fair value through profit or loss' category are presented in the statement of
comprehensive income in the period in which they arise.
As a result of the above basis of valuation, there is significant judgement
associated with the valuation of investments.
Arrangement fees
Under the terms of the investment agreements between IMAC and its investee
companies, the investee companies may be required to pay to the investor (IMAC)
an arrangement fee in consideration for its services in arranging financing for
the investee company. In accordance with IAS 39, this arrangement fee is
deducted from the cost of the investment. A corresponding increase in the fair
value of the investment is then recorded so that the investment is valued at the
gross amount paid.
Use of estimates and judgements
The preparation of the Group's financial statements requires the Directors to
make estimates and assumptions that affect the reported amounts of assets,
liabilities, and contingencies at the date of the Group's financial statements,
and revenue and expenses during the reporting period. Significant estimates in
the Group's financial statements include the amounts recorded for the fair value
of the investments and recoverable value of goodwill and other intangible
assets. By their nature, these estimates and assumptions are subject to
measurement uncertainty and the effect on the Group's financial statements of
changes in estimates in future periods could be significant. Actual results
could differ from those estimated given the uncertainties inherent in estimating
the fair value of investments, in particular unquoted direct investments. The
Group's investments are predominantly in early and mid-stage "progressive media"
companies an area which is undergoing transformation. Given the low level of
corporate activity in this sector of the media, and the impact the current
economic conditions have had on this sector, the fair valuation of the Company's
investments and recoverable value of goodwill and other intangible assets cannot
be estimated as easily as when there are greater levels of market activity.
However, the Directors believe that, having considered all information
available, this represents a reasonable estimate of fair value.
3. Tax on ordinary activities
The Company has been granted exemption from income tax in Guernsey under the
Income Tax (Exempt Bodies) (Bailiwick of Guernsey) Ordinance 1989, and is liable
to pay an annual fee (currently GBP600) under the provisions of the Ordinance.
As such it will not be liable to income tax in Guernsey other than on Guernsey
source income (excluding deposit interest on funds deposited with a Guernsey
bank). No withholding tax is applicable to distributions to Shareholders by the
Company.
The subsidiary companies are resident in the United Kingdom and liable to United
Kingdom Corporation Tax. Group relief on operating losses may be available
between those United Kingdom resident investee companies in which the company
holds not less than 75 per cent of the ordinary share capital.
No tax charge has been recognised in the period as the Group has significant
losses brought forward from previous periods.
4. (Loss)/earnings per share
The calculation of basic and fully diluted return per share is based on the
return on ordinary activities and on 143,168,463 Ordinary Shares (30 September
2008: 144,773,240; 31 March 2009: 140,784,642), being the weighted average
number of shares for the purpose of the earnings per share calculation.
5. Goodwill
+--------------------------------------+----------+----------+----------+
| | Consolidated |
+--------------------------------------+--------------------------------+
| | Six | Six | Year |
| | months | months | ended 31 |
| | ended 30 | ended 30 | March |
| | Sep 2009 | Sep 2008 | 2009 |
+--------------------------------------+----------+----------+----------+
| | GBP '000 | GBP '000 | GBP '000 |
+--------------------------------------+----------+----------+----------+
| Cost | | | |
+--------------------------------------+----------+----------+----------+
| Balance at the beginning of the | 37,505 | 28,217 | 28,217 |
| period/year | | | |
+--------------------------------------+----------+----------+----------+
| Recognised on acquisition of a | 71 | 13,345 | 15,103 |
| subsidiary | | | |
+--------------------------------------+----------+----------+----------+
| Reallocation to intangibles | - | (3,800) | (5,815) |
+--------------------------------------+----------+----------+----------+
| Goodwill written off in the | (9,587) | - | - |
| period/year | | | |
+--------------------------------------+----------+----------+----------+
| Balance at the end of the | 27,989 | 37,762 | 37,505 |
| period/year | | | |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Accumulated impairment losses | | | |
+--------------------------------------+----------+----------+----------+
| Balance at the beginning of the | (19,308) | (7,213) | (7,213) |
| period/year | | | |
+--------------------------------------+----------+----------+----------+
| Impairment losses for the | | | |
| period/year | | | |
+--------------------------------------+----------+----------+----------+
| Continuing operations | (3,819) | (777) | (7,916) |
+--------------------------------------+----------+----------+----------+
| Discontinued operations | - | - | (4,179) |
+--------------------------------------+----------+----------+----------+
| Goodwill written off in the | 9,587 | - | - |
| period/year | | | |
+--------------------------------------+----------+----------+----------+
| Balance at the end of the | (13,540) | (7,990) | (19,308) |
| period/year | | | |
+--------------------------------------+----------+----------+----------+
| | | | |
+--------------------------------------+----------+----------+----------+
| Carrying amount at the end of the | 14,449 | 29,772 | 18,197 |
| period/year | | | |
+--------------------------------------+----------+----------+----------+
The goodwill has arisen on the Company's acquisition of In2Games Limited and
Community Television Networks Limited, and on the following acquisitions by its
subsidiaries: Two Way Media Holdings Limited of Two Way Media Limited; Brand
Events Holdings Limited of Brand Events Limited; Eden State Limited of Rise
Communications Limited; Digital Rights Group Limited of Portman Film and
Television Limited; Review Centre Limited of Resource Team Limited; and QobliQ
Limited of Passhold Limited, Nouveau Jour, Sponsorclick and Arena.
The Group tests goodwill annually for impairment, or more frequently if there
are indications that goodwill might be impaired.
The Group writes off goodwill which is not recoverable and in the current period
has written off goodwill already impaired in Community Television Networks
Limited and Eden State Limited.
6. Other intangible assets
+---------------------------------------+----------+----------+----------+
| | Consolidated |
+---------------------------------------+--------------------------------+
| | Six | Six | Year |
| | months | months | ended 31 |
| | ended | ended | March |
| | 30 Sep | 30 Sep | 2009 |
| | 2009 | 2008 | |
+---------------------------------------+----------+----------+----------+
| | GBP '000 | GBP '000 | GBP '000 |
+---------------------------------------+----------+----------+----------+
| Cost or valuation | | | |
+---------------------------------------+----------+----------+----------+
| Balance at the beginning of the | 11,161 | 3,320 | 3,320 |
| period/year | | | |
+---------------------------------------+----------+----------+----------+
| Additions in period/year | 227 | 265 | 266 |
+---------------------------------------+----------+----------+----------+
| Reclassification | - | 3,800 | 5,815 |
+---------------------------------------+----------+----------+----------+
| Recognised on acquisition of a | - | - | 1,760 |
| subsidiary | | | |
+---------------------------------------+----------+----------+----------+
| Balance at the end of the period/year | 11,388 | 7,385 | 11,161 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| Amortisation | | | |
+---------------------------------------+----------+----------+----------+
| Balance at the beginning of the | (369) | (242) | (242) |
| period/year | | | |
+---------------------------------------+----------+----------+----------+
| Charge for the period/year | (508) | (96) | (127) |
+---------------------------------------+----------+----------+----------+
| Balance at the end of the period/year | (877) | (338) | (369) |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| Impairment | | | |
+---------------------------------------+----------+----------+----------+
| Balance at the beginning of the | (1,693) | - | - |
| period/year | | | |
+---------------------------------------+----------+----------+----------+
| Charge for the period/year | - | - | (1,693) |
+---------------------------------------+----------+----------+----------+
| Balance at the end of the period/year | (1,693) | - | (1,693) |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| Carrying amount at the end of the | 8,818 | 7,047 | 9,099 |
| period/year | | | |
+---------------------------------------+----------+----------+----------+
Acquired trademarks, licenses and customer relationships are initially
recognised at fair value. Trademarks and licenses have a finite useful life and
are carried at cost less accumulated amortisation. Amortisation is calculated
using the straight line method to allocate the cost of trademarks, licenses and
customer relationships over their estimated useful lives (being a period of up
to 10 years).
7. Investment in subsidiaries
+----------------------------------------+----------+----------+----------+
| | Company |
+----------------------------------------+--------------------------------+
| | Six | Six | Year |
| | months | months | ended 31 |
| | ended 30 | ended 30 | March |
| | Sep 2009 | Sep 2008 | 2009 |
+----------------------------------------+----------+----------+----------+
| | GBP '000 | GBP '000 | GBP '000 |
+----------------------------------------+----------+----------+----------+
| Opening fair value | 38,416 | 32,669 | 32,669 |
+----------------------------------------+----------+----------+----------+
| Purchases at cost | 350 | 16,136 | 19,736 |
+----------------------------------------+----------+----------+----------+
| Reclassification | (1,000) | - | - |
+----------------------------------------+----------+----------+----------+
| Investment repaid | - | - | (1,788) |
+----------------------------------------+----------+----------+----------+
| Fair value adjustment | (3,118) | (2,424) | (12,201) |
+----------------------------------------+----------+----------+----------+
| Closing fair value | 34,648 | 46,381 | 38,416 |
+----------------------------------------+----------+----------+----------+
Reclassification includes the 4,266,667 shares received in Netplay TV plc from
Two Way Media Holdings Limited as repayment of loan notes.
+---------------+------------+-------+----------------+--------------+-----------+-----------+-----------+
| Name of | Class | % of | Country | Principal | Full | Paid as | Paid as |
| subsidiary | of | class | of | activity | commit- | at 30 | at 30 |
| undertaking | share | held | incorpo-ration | | ment | Sep | Sep |
| | | | | | (GBP'000) | 2009 | 2008 |
| | | | | | | (GBP'000) | (GBP'000) |
+---------------+------------+-------+----------------+--------------+-----------+-----------+-----------+
| Whizz Kid | Ordinary | 47.1% | UK | Television | 4,250 | 2,750 | 2,500 |
| Entertainment | | | | production | | | |
| Limited | | | | | | | |
+---------------+------------+-------+----------------+--------------+-----------+-----------+-----------+
| Digital | Ordinary | 84.7% | UK | Television | 11,270 | 8,274 | 8,274 |
| Rights Group | | | | distribution | | | |
| Limited | | | | | | | |
+---------------+------------+-------+----------------+--------------+-----------+-----------+-----------+
| Outside Line | Ordinary | 0% | UK | Digital | 1,500 | 1,000 | 1,000 |
| Limited | | | | marketing & | | | |
| | | | | creative | | | |
| | | | | agency | | | |
+---------------+------------+-------+----------------+--------------+-----------+-----------+-----------+
| Two Way Media | Ordinary | 84.3% | UK | Interactive | 4,935 | 4,585 | 5,335 |
| Holdings | | | | television | | | |
| Limited | | | | company | | | |
+---------------+------------+-------+----------------+--------------+-----------+-----------+-----------+
| Enigmas2 | Ordinary | 43.8% | UK | Video games | 4,560 | 4,560 | 4,560 |
| Limited | | | | business | | | |
| (formerly | | | | | | | |
| In2Games | | | | | | | |
| Limited) | | | | | | | |
+---------------+------------+-------+----------------+--------------+-----------+-----------+-----------+
| Brand Events | Ordinary | 57.5% | UK | Consumer | 7,020 | 6,820 | 6,620 |
| Holdings | | | | events | | | |
| Limited | | | | business | | | |
+---------------+------------+-------+----------------+--------------+-----------+-----------+-----------+
| QobliQ | Preference | 73.4% | UK | Marketing | 12,567 | 12,367 | 9,600 |
| Limited | | | | services | | | |
+---------------+------------+-------+----------------+--------------+-----------+-----------+-----------+
| Review Centre | Ordinary | 71.5% | UK | Internet/New | 7,034 | 7,034 | 7,034 |
| Limited | | | | media | | | |
+---------------+------------+-------+----------------+--------------+-----------+-----------+-----------+
| Ingenious | N/a | 90.0% | UK | Investment | 6,065 | 4,728 | 4,728 |
| Ventures | | | | vehicle | | | |
| Limited | | | | | | | |
| Partnership | | | | | | | |
+---------------+------------+-------+----------------+--------------+-----------+-----------+-----------+
| | | | | Total | 59,201 | 52,118 | 49,651 |
+---------------+------------+-------+----------------+--------------+-----------+-----------+-----------+
Crystal Entertainment Limited
IMAC has reduced its commitment in Crystal Entertainment Limited ("Crystal").
Under the terms of the initial Subscription Agreement IMAC's commitment was
GBP2.5 million. On 7 May 2009, under a new Shareholder Agreement, IMAC sold
57,500 shares in Crystal to Charles Garland. IMAC now holds 10% of the equity of
Crystal. No further advances are owed and the commitment has been reduced to the
value of the drawdown to 31 March 2009. IMAC will no longer consolidate Crystal
as a subsidiary.
Two Way Media Holdings Limited
Following the repayment of loan notes by way of the 4,266,667 shares received in
Netplay TV plc, IMAC has reduced its commitment to Two Way Media Holdings
Limited to GBP4.9m.
8. Acquisition of subsidiaries
During the period the Group acquired a controlling interest in Taste of
Christmas Live Limited and has made an adjustment to the value of the
acquisitions of Arena International Limited and Arena Sports Marketing Limited
("Arena") both resulted in goodwill arising. The fair value of assets acquired
and liabilities assumed were as follows:
+---------------------------------------+----------+----------+----------+
| | Six | Six | Year |
| | months | months | ended 31 |
| | ended 30 | ended 30 | March |
| | Sep 2009 | Sep 2008 | 2009 |
+---------------------------------------+----------+----------+----------+
| | GBP '000 | GBP '000 | GBP '000 |
+---------------------------------------+----------+----------+----------+
| Purchased goodwill | 71 | - | - |
+---------------------------------------+----------+----------+----------+
| Intangibles | - | - | 1,760 |
+---------------------------------------+----------+----------+----------+
| Fixtures and fittings | - | 36 | 104 |
+---------------------------------------+----------+----------+----------+
| Cash and cash equivalents | - | 1,245 | 2,302 |
+---------------------------------------+----------+----------+----------+
| Accounts receivable | - | 1,094 | 2,194 |
+---------------------------------------+----------+----------+----------+
| Trade payables | - | (1,464) | (3,332) |
+---------------------------------------+----------+----------+----------+
| Minority interest | - | (523) | (558) |
+---------------------------------------+----------+----------+----------+
| Interests in associates | - | 5,233 | 5,233 |
+---------------------------------------+----------+----------+----------+
| Net assets acquired | 71 | 5,621 | 7,703 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| Goodwill on consolidation | - | 13,345 | 15,103 |
+---------------------------------------+----------+----------+----------+
| Total consideration | 71 | 18,966 | 22,806 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| Total consideration satisfied by: | | | |
+---------------------------------------+----------+----------+----------+
| Cash | 71 | 14,274 | 16,013 |
+---------------------------------------+----------+----------+----------+
| Consideration shares | - | 1,787 | 3,096 |
+---------------------------------------+----------+----------+----------+
| Deferred consideration | - | 2,098 | 2,890 |
+---------------------------------------+----------+----------+----------+
| Other | - | 807 | 807 |
+---------------------------------------+----------+----------+----------+
| | 71 | 18,966 | 22,806 |
+---------------------------------------+----------+----------+----------+
| Net cash outflow arising on | | | |
| acquisition: | | | |
+---------------------------------------+----------+----------+----------+
| Cash consideration | 71 | 14,274 | 16,013 |
+---------------------------------------+----------+----------+----------+
| Cash and cash equivalents acquired | - | (1,245) | (2,302) |
+---------------------------------------+----------+----------+----------+
| | 71 | 13,029 | 13,711 |
+---------------------------------------+----------+----------+----------+
The goodwill arising on the acquisitions is attributable to the anticipated
profitability of the Group's products and services.
9. Investment in associates
+---------------------------------+--------------+------------+------------+
| | Six months | Six months | Year ended |
| | ended 30 Sep | ended 30 | 31 |
| | 2009 | Sep 2008 | March 2009 |
+---------------------------------+--------------+------------+------------+
| | GBP '000 | GBP '000 | GBP '000 |
| | | | |
+---------------------------------+--------------+------------+------------+
| Aggregate amounts relating to | | | |
| associates | | | |
+---------------------------------+--------------+------------+------------+
| Total assets | 2,601 | 5,342 | 2,711 |
+---------------------------------+--------------+------------+------------+
| Total liabilities | (6,871) | (8,431) | (6,574) |
+---------------------------------+--------------+------------+------------+
| | | | |
+---------------------------------+--------------+------------+------------+
| Revenues | 2,117 | 8,360 | 27,366 |
+---------------------------------+--------------+------------+------------+
| Profit/(loss) | 2,038 | (707) | (1,474) |
+---------------------------------+--------------+------------+------------+
A list of the significant investments in associates, including the name, country
of incorporation, proportion of ownership interest is given below.
+---------------------------------+--------------+------------+---------------+
| Name of associate | Class of | % of class | Country of |
| | share | held | incorporation |
+---------------------------------+--------------+------------+---------------+
| Taste Festivals Limited | Ordinary | 50.0% | UK |
+---------------------------------+--------------+------------+---------------+
| Grass Roots Football Limited | Ordinary | 50.0% | UK |
+---------------------------------+--------------+------------+---------------+
| Sub Zero Limited | Ordinary | 50.0% | UK |
+---------------------------------+--------------+------------+---------------+
| Brand Events Management Ireland | Ordinary | 50.0% | Ireland |
| Limited | | | |
+---------------------------------+--------------+------------+---------------+
| Brand Events Australia Pty | Ordinary | 50.0% | Australia |
| Limited | | | |
+---------------------------------+--------------+------------+---------------+
| Brand Events South Africa Pty | Ordinary | 50.0% | South |
| Limited | | | Africa |
+---------------------------------+--------------+------------+---------------+
| Two Way Gaming Limited | Ordinary | 50.0% | Alderney |
+---------------------------------+--------------+------------+---------------+
| Brand Events Live Limited | Ordinary | 49.9% | UK |
+---------------------------------+--------------+------------+---------------+
| Dance Floor Limited | Ordinary | 49.9% | UK |
+---------------------------------+--------------+------------+---------------+
| DRG Media Assets Limited | Ordinary | 49.9% | UK |
+---------------------------------+--------------+------------+---------------+
| Taste Xmas Live Limited | Ordinary | 49.9% | UK |
+---------------------------------+--------------+------------+---------------+
| Real Foods Limited | Ordinary | 20.0% | UK |
+---------------------------------+--------------+------------+---------------+
Brand Events Limited is required to fund its share of losses in its associates.
Two Way Media Limited is also required to fund its share of losses in Two Way
Gaming Limited and hence these have been accrued for in the financial
statements. There are no other outstanding commitments. DRG Limited is not
required to fund the losses of its associate DRG Media Assets Limited.
10. Derecognition of subsidiaries
The Group no longer has a controlling interest in Crystal Entertainment Limited
("Crystal") as IMAC sold the majority of its shareholding in the period and now
holds 10% of the equity of Crystal. The fair value of assets and liabilities no
longer controlled by the Group are as follows:
+--------------------------------------+------------+----------+------------+
| | Six months | Six | Year |
| | ended 30 | months | ended 31 |
| | Sep 2009 | ended 30 | March 2009 |
| | | Sep 2008 | |
+--------------------------------------+------------+----------+------------+
| | GBP '000 | GBP '000 | GBP '000 |
| | | | |
+--------------------------------------+------------+----------+------------+
| Fixtures and fittings | 29 | 256 | 275 |
+--------------------------------------+------------+----------+------------+
| Cash and cash equivalents | 57 | 41 | 189 |
+--------------------------------------+------------+----------+------------+
| Accounts receivable | 63 | 495 | 755 |
+--------------------------------------+------------+----------+------------+
| Inventories | - | 209 | 209 |
+--------------------------------------+------------+----------+------------+
| Trade payables | (203) | (3,275) | (6,453) |
+--------------------------------------+------------+----------+------------+
| Net liabilities deconsolidated | (54) | (2,274) | (5,025) |
+--------------------------------------+------------+----------+------------+
The Company did not receive any sales proceeds from the disposal of its
investment in Crystal and the gain results from the deconsolidation of the net
liabilities.
The results of the discontinued operations have not been separately disclosed in
the condensed consolidated statement of comprehensive income. During the period,
the profit or loss impact of discontinued operations was not material to the
Group's results.
11. Financial assets at fair value through profit or loss
+---------------------------------------+----------+----------+----------+----------+
| | | Company |
+---------------------------------------+----------+--------------------------------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 March |
| | | 30 Sep | 30 Sep | 2009 |
| | | 2009 | 2008 | |
+---------------------------------------+----------+----------+----------+----------+
| | | GBP '000 | GBP '000 | GBP '000 |
+---------------------------------------+----------+----------+----------+----------+
| | | | | |
+---------------------------------------+----------+----------+----------+----------+
| Opening fair value | | - | 19,831 | 19,831 |
+---------------------------------------+----------+----------+----------+----------+
| Reclassification | | 1,000 | - | - |
+---------------------------------------+----------+----------+----------+----------+
| Purchases at cost | | 310 | - | 599 |
+---------------------------------------+----------+----------+----------+----------+
| Fair value adjustment | | (30) | (7,266) | (20,430) |
+---------------------------------------+----------+----------+----------+----------+
| Closing fair value | | 1,280 | 12,565 | - |
+---------------------------------------+----------+----------+----------+----------+
Reclassification includes the 4,266,667 shares received in Netplay TV plc from
Two Way Media Holdings Limited as repayment of loan notes.
+---------------------------------------+----------+----------+----------+
| | Consolidated |
+---------------------------------------+--------------------------------+
| | Six | Six | Year |
| | months | months | ended |
| | ended | ended | 31 March |
| | 30 Sep | 30 Sep | 2009 |
| | 2009 | 2008 | |
+---------------------------------------+----------+----------+----------+
| | GBP '000 | GBP '000 | GBP '000 |
+---------------------------------------+----------+----------+----------+
| | | | |
+---------------------------------------+----------+----------+----------+
| Opening fair value | 5,233 | 19,831 | 19,831 |
+---------------------------------------+----------+----------+----------+
| Reclassification | 1,000 | - | - |
+---------------------------------------+----------+----------+----------+
| Purchases at cost | 310 | 5,233 | 5,832 |
+---------------------------------------+----------+----------+----------+
| Fair value adjustment | 2,070 | (7,266) | (20,430) |
+---------------------------------------+----------+----------+----------+
| Closing fair value | 8,613 | 17,798 | 5,233 |
+---------------------------------------+----------+----------+----------+
Reclassification includes the 4,266,667 shares received in Netplay TV plc from
Two Way Media Holdings Limited as repayment of loan notes.
+---------------+------------+----------+---------------+---------------+-------------+-----------+-----------+
| Name of | Class of | % of | Country | Principal | Full | Paid as | Paid as |
| investment | share | class | of | activity | commit-ment | at 30 | at 30 |
| | | held | incorporation | | (GBP'000) | Sep 2009 | Sep 2008 |
| | | | | | | (GBP'000) | (GBP'000) |
+---------------+------------+----------+---------------+---------------+-------------+-----------+-----------+
| Incisive | Ordinary | 0% | UK | Business | 17,903 | 17,903 | 17,903 |
| Media | | | | publishing | | | |
| Limited | | | | | | | |
+---------------+------------+----------+---------------+---------------+-------------+-----------+-----------+
| Trinity | Ordinary | 0% | UK | Interactive | 5,710 | 5,710 | 4,800 |
| Universal | | | | media | | | |
| Holdings | | | | marketing | | | |
| Limited | | | | | | | |
+---------------+------------+----------+---------------+---------------+-------------+-----------+-----------+
| Sportbuzz | Preference | 36% | British | Internet/ | 1,604 | 1,604 | 1,604 |
| Limited | | | Virgin | new media | | | |
| | | | Islands | | | | |
+---------------+------------+----------+---------------+---------------+-------------+-----------+-----------+
| Crystal | Ordinary | 10% | UK | Talent | 1,311 | 1,311 | 1,126 |
| Entertainment | | | | relationships | | | |
| Limited | | | | | | | |
+---------------+------------+----------+---------------+---------------+-------------+-----------+-----------+
| Netplay | Ordinary | 3% | UK | Gaming | - | - | - |
| TV plc | | | | and | | | |
| | | | | gambling | | | |
+---------------+------------+----------+---------------+---------------+-------------+-----------+-----------+
| | | | | Total | 26,528 | 26,528 | 25,433 |
+---------------+------------+----------+---------------+---------------+-------------+-----------+-----------+
Further commitments
IMAC committed a further GBP0.3 million to Trinity Universal Holdings Limited in
June 2009.
No commitment has been made to Netplay TV plc and GBP1,000,000 included in the
closing fair value for both the Company and consolidated financial assets at
fair value through profit or loss reflects the 4,266,667 shares in Netplay TV
plc received from Two Way Media Holdings Limited as repayment of loan notes.
Changes in shareholdings
The shareholding in Incisive Media Limited has been diluted following the debt
and capital restructuring in which IMAC has not participated.
On 16 February 2009 the subsidiary companies of Trinity Universal Holdings
Limited were placed in administration following a detailed operational and
strategic review of the business.
12. Cash and cash equivalents
Cash and cash equivalents comprise cash held by the Group and short-term bank
deposits with an original maturity of three months or less. The cash equivalents
are currently invested in quoted cash funds. The carrying amount of these assets
approximates to their fair value. Included within the Group's cash and cash
equivalents is a restricted cash amount of GBP3,306k (March 2009: GBP2,297k), in
relation to amounts Whizz Kid Entertainment Limited is holding in programme
production trust accounts, to fund specific programme production costs and which
is owed to Live VCT 1, Live VCT 2, Entertainment VCT 1 and Entertainment VCT 2.
DRG Media Assets Limited, a subsidiary of DRG owes to Entertainment VCT 1 and
Entertainment VCT 2 for co-distribution costs.
13. Share capital
+----------------------------+--------------+--------------+--------------+
| | Company and Consolidated |
+----------------------------+--------------------------------------------+
| | 30 Sep 2009 | 30 Sep 2008 | 31 March |
| | | | 2009 |
+----------------------------+--------------+--------------+--------------+
| Authorised share capital | No. | No. | No. |
+----------------------------+--------------+--------------+--------------+
| | | | |
+----------------------------+--------------+--------------+--------------+
| Ordinary shares of no par | Unlimited | Unlimited | Unlimited |
| value | | | |
+----------------------------+--------------+--------------+--------------+
| | | | |
+----------------------------+--------------+--------------+--------------+
| Issued and fully paid | No. | No. | No. |
+----------------------------+--------------+--------------+--------------+
| | | | |
+----------------------------+--------------+--------------+--------------+
| Ordinary shares of no par | 144,402,402 | 144,402,402 | 144,402,402 |
| value | | | |
+----------------------------+--------------+--------------+--------------+
14. Shares held in treasury
+----------------------------+--------------+--------------+--------------+
| | Company and Consolidated |
+----------------------------+--------------------------------------------+
| | 30 Sep 2009 | 30 Sep 2008 | 31 March |
| | | | 2009 |
+----------------------------+--------------+--------------+--------------+
| Shares held in treasury | No. | No. | No. |
+----------------------------+--------------+--------------+--------------+
| | | | |
+----------------------------+--------------+--------------+--------------+
| Ordinary shares of no par | 1,233,939 | 460,000 | 1,233,939 |
| value | | | |
+----------------------------+--------------+--------------+--------------+
15. Net asset value per share
+----------------------------+---------------+--------------+--------------+
| | No. of | Company | Consolidated |
| | Shares | | |
+----------------------------+---------------+--------------+--------------+
| | | pence | pence |
+----------------------------+---------------+--------------+--------------+
| | | | |
+----------------------------+---------------+--------------+--------------+
| 30 September 2009 | | | |
+----------------------------+---------------+--------------+--------------+
| Ordinary shares | | | |
+----------------------------+---------------+--------------+--------------+
| Basic and fully diluted | 143,168,463 | 65.64 | 58.81 |
+----------------------------+---------------+--------------+--------------+
| 30 September 2008 | | | |
+----------------------------+---------------+--------------+--------------+
| Ordinary shares | | | |
+----------------------------+---------------+--------------+--------------+
| Basic and fully diluted | 143,942,402 | 84.71 | 81.57 |
+----------------------------+---------------+--------------+--------------+
| 31 March 2009 | | | |
+----------------------------+---------------+--------------+--------------+
| Ordinary shares | | | |
+----------------------------+---------------+--------------+--------------+
| Basic and fully diluted | 143,168,463 | 68.83 | 65.30 |
+----------------------------+---------------+--------------+--------------+
| | | | |
+----------------------------+---------------+--------------+--------------+
16. Minority interests
+----------------------------+--------------+--------------+--------------+
| | Consolidated |
+----------------------------+--------------------------------------------+
| | Six months | Six months | Year ended |
| | ended 30 Sep | ended | 31 March |
| | 2009 | 30 Sep 2008 | 2009 |
+----------------------------+--------------+--------------+--------------+
| | GBP '000 | GBP '000 | GBP '000 |
+----------------------------+--------------+--------------+--------------+
| | | | |
+----------------------------+--------------+--------------+--------------+
| Balance at beginning of | 3,372 | 1,349 | 1,349 |
| period/year | | | |
+----------------------------+--------------+--------------+--------------+
| Acquisitions | - | 2,902 | 4,210 |
+----------------------------+--------------+--------------+--------------+
| Profit/(loss) for the | 231 | (175) | (2,187) |
| period/year | | | |
+----------------------------+--------------+--------------+--------------+
| | | | |
+----------------------------+--------------+--------------+--------------+
| Balance at end of | 3,603 | 4,076 | 3,372 |
| period/year | | | |
+----------------------------+--------------+--------------+--------------+
17. Related party transactions
a) The Company has appointed Ingenious Ventures to provide investment management
services. Ingenious Ventures Limited was the Manager up until 1 March 2008, when
the Investment Management Agreement was novated to Ingenious Asset Management
Limited, and Ingenious Ventures became a trading division of Ingenious Asset
Management Limited. Patrick McKenna is a director of Ingenious Asset Management
Limited and was a director of Ingenious Ventures Limited until 1 June 2009,
which are both wholly-owned subsidiaries within the Ingenious Group, which is
controlled by Patrick McKenna.
b) The Company has paid a management fee of GBP980,000 to Ingenious Ventures for
the six months ended 30 September 2009. As disclosed in the Company's AIM
admissions document, a management fee of 0.5% of the Company's net asset value
is payable quarterly in advance. An annual adjustment is then made so that the
Manager receives a total annual fee in one year equal to 2.0% of the Company's
net asset value reported in the audited accounts for that year.
c) Ingenious Ventures (a trading division of Ingenious Asset Management Limited)
provides administrative support to IMAC which is outside the scope of the
management fee. The recharge is made at cost and has been approved by the Board
at a value of GBP171,000 for the current financial year. Ingenious Ventures
invoices for this quarterly in arrears. Ingenious Asset Management Limited is a
wholly-owned subsidiary within the Ingenious Group which is controlled by
Patrick McKenna.
d) Serena Tremlett is the Managing Director of Morgan Sharpe Administration
Limited which receives fees for providing secretarial and administrative
services to the Company with effect from 14 April 2009. In the period since 14
April 2009, Morgan Sharpe has received GBP39,000 in fees for company
secretarial, administration, accounting and directorship services.
e) William Simpson is a partner of Ogier, which may receive fees for providing
legal advice from time to time to the Company. In the current period, fees of
GBP5,000 have been incurred for legal advice. He is also a partner in the Ogier
Group Limited Partnership, which is the beneficial owner of Ogier Fiduciary
Services (Guernsey) Limited, of which Ogier Fund Administration (Guernsey)
Limited is a wholly-owned subsidiary which provided company secretarial and
administration services to the Company until 14 April 2009 for which IMAC has
incurred GBP800 in the current period.
f) The Company has delegated discretionary treasury management responsibilities
to Ingenious Asset Management International Limited ("IAMI"), a company of which
William Simpson is a director, to manage the uninvested funds of the Company. As
at 30 September 2009 IAMI held GBP57,932,188 (30 September 2008: GBP61,448,956;
31 March 2009: GBP60,460,000) on behalf of the Company. IAMI is a wholly-owned
subsidiary within the Ingenious Group, which is controlled by Patrick McKenna.
The fees for the services provided by IAMI to the Company are met by Ingenious
Ventures.
g) Ingenious Asset Management International Limited has further delegated its
treasury management responsibilities to Ingenious Asset Management Limited which
is a wholly-owned subsidiary within the Ingenious Group which is controlled by
Patrick McKenna.
h) The Group appointed Ingenious Corporate Finance Limited ("ICF"), a company of
which Patrick McKenna is a director, to provide corporate finance services. ICF
is a wholly-owned subsidiary within the Ingenious Group which is controlled by
Patrick McKenna. Two Way Media Holdings Limited engaged ICF to provide corporate
finance advice on the sale of Two Way Gaming Limited to Netplay TV plc for a fee
of GBP75,000 which was invoiced in May 2009.
i) In prior periods, the Company appointed Ingenious Consulting Associates
Limited (ICA), a company of which Patrick McKenna is a director, to provide
consulting services in relation to a possible acquisition target. ICA is a
wholly-owned subsidiary within the Ingenious Group which is controlled by
Patrick McKenna.
j) In prior periods, the Company appointed Ingenious Consulting Network Limited
(ICN), a company of which Patrick McKenna is a director, to provide consulting
services in relation to a possible acquisition target. ICN is a wholly-owned
subsidiary within the Ingenious Group which is controlled by Patrick McKenna.
k) Patrick McKenna is a director and a shareholder of both Ingenious Live VCT 1
plc ("Live VCT 1") and Ingenious Live VCT 2 plc ("Live VCT 2"). Live VCT 1 and
Live VCT 2 have jointly agreed with Brand Events Limited to form a new company,
Brand Events Live Limited, to co-promote a number of Taste events throughout the
UK. On 21 April 2009, Live VCT 1 and Live VCT 2 each invested GBP1,000,000 for
a total of 49.9% of the equity of Brand Events Live Limited. The Young Vic
Theatre Company (a registered charity) holds 0.2% of the equity of Brand Events
Live Limited. Patrick McKenna is the chairman of the Young Vic Theatre Company.
Brand Events Limited holds the balance of the equity in Brand Events Live
Limited.
l) Patrick McKenna is a director and a shareholder of both Ingenious
Entertainment VCT 1 plc ("Entertainment VCT 1") and Ingenious Entertainment VCT
2 plc ("Entertainment VCT 2"). Entertainment VCT 1 and Entertainment VCT 2 have
jointly agreed with Digital Rights Group Limited (DRG) to form a new company,
DRG Media Assets Limited, to co-distribute digital media content. In June 2009,
Entertainment VCT 1 and Entertainment VCT 2 each invested GBP1,000,000 for a
total of 49.9% of the equity of DRG Media Assets Limited. The Young Vic Theatre
Company (a registered charity) holds 0.2% of the equity in DRG Media Assets
Limited. Patrick McKenna is the chairman of the Young Vic Theatre Company. DRG
holds the balance of the equity in DRG Media Assets Limited.
During the period/year, the Group carried out a number of transactions with the
above mentioned related parties in the normal course of business and on an arm's
length basis as listed in the table below. Expenditure paid includes settlement
of invoices owing from prior periods.
+--------------------------+---+------+--------+--------+------+--------+--------+
| | | Expenditure paid | Amounts |
| | | | due/(receivable) |
+--------------------------+---+------------------------+------------------------+
| | | 30 | 30 Sep | 31 Mar | 30 | 30 Sep | 31 |
| | | Sep | 2008 | 2009 | Sep | 2008 | Mar |
| | | 2009 | | | 2009 | | 2009 |
+--------------------------+---+------+--------+--------+------+--------+--------+
| | | GBP | GBP | GBP | GBP | GBP | GBP |
| | | '000 | '000 | '000 | '000 | '000 | '000 |
+--------------------------+---+------+--------+--------+------+--------+--------+
| | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| Ingenious Ventures | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| - Investment management | a | 456 | 1,393 | 2,501 | - | - | (524) |
| fee | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| - Administrative | b | 86 | 73 | 158 | 43 | 43 | 43 |
| support | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| Morgan Sharpe | | | | | | | |
| Administration Limited | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| - Company secretarial, | c | 39 | - | - | - | - | - |
| administration, | | | | | | | |
| accounting & | | | | | | | |
| directorship | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| Ogier Fund | | | | | | | |
| Administration | | | | | | | |
| (Guernsey) Limited | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| - Company secretarial, | d | 47 | 79 | 130 | - | - | 46 |
| administration, | | | | | | | |
| accounting & | | | | | | | |
| directorship | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| Ogier | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| - Legal advice | d | 5 | - | 3 | - | - | - |
+--------------------------+---+------+--------+--------+------+--------+--------+
| | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| Ingenious Corporate | | | | | | | |
| Finance Limited | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| - Corporate finance | g | 49 | - | - | 56 | - | 30 |
+--------------------------+---+------+--------+--------+------+--------+--------+
| | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| Ingenious Consulting | | | | | | | |
| Associates Limited | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| - Consulting advice | h | - | - | 18 | - | - | - |
+--------------------------+---+------+--------+--------+------+--------+--------+
| | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| Ingenious Consulting | | | | | | | |
| Network Limited | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
| - Consulting advice | i | - | - | 8 | - | - | - |
+--------------------------+---+------+--------+--------+------+--------+--------+
| | | | | | | | |
+--------------------------+---+------+--------+--------+------+--------+--------+
Transactions between related parties
The following arrangements between related parties of the Company were agreed in
the period 2001 to 2004 prior to IMAC acquiring its 90% shareholding in
Ingenious Ventures LP ("IVLP") in 2008. At the time these arrangements were
entered into, the entities were not related to the Company. There has been no
variation of the terms of these agreements since control of IVLP was gained.
a) Patrick McKenna is a director of Cream Holdings Limited and receives a salary
of GBP10,000 per annum and a consultancy fee of GBP110,000 per annum.
b) Patrick McKenna is a director of Stage Three Music Limited and receives a
salary of GBP10,000 per annum and a consultancy fee of GBP110,000 per annum.
c) Neil Blackley is a director of Stage Three Music Limited and receives a
salary of GBP11,627 per annum.
d) Patrick McKenna receives a consultancy fee of GBP45,000 per annum from iD
Distribution Limited, a subsidiary of DRG Limited.
e) Ingenious Media Consulting Limited, a wholly-owned subsidiary within the
Ingenious Group which is controlled by Patrick McKenna, receives a fee of
GBP120,000 per annum for the provision of finance director and financial
controller support to Cream Holdings Limited.
f) Ingenious Ventures, a trading division of Ingenious Asset Management Limited
(IAM), receives a fee from Stage Three Music Limited for the provision of a
director to Stage Three Music Limited at a fee of GBP10,000 per annum. IAM is a
wholly-owned subsidiary within the Ingenious Group which is controlled by
Patrick McKenna.
18. Events after the balance sheet date
a) On 20 November 2009, the Company received a further GBP487,000 loan repayment
from Enigmas2 Limited.
b) Ingenious Live VCT 1 plc, Ingenious Live VCT 2 plc, Ingenious Entertainment
VCT 1 plc and Ingenious Entertainment VCT 2 plc have jointly agreed with Brand
Events Limited to form a new company, Golfmania Limited, to co-promote a new
event. On 1 December 2009, Ingenious Live VCT 1 plc, Ingenious Live VCT 2 plc,
Ingenious Entertainment VCT 1 plc and Ingenious Entertainment VCT 2 plc each
invested GBP275,000 for a total of 49.9% of the equity of Golfmania Limited. The
Young Vic Theatre Company (a registered charity) holds 0.2% of the equity of
Golfmania Limited. Patrick McKenna is the chairman of the Young Vic Theatre
Company.
For further information:
Patrick McKenna/Patrick Bradley Ingenious 020 7319 4000
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GUGBGPUPBPUG
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