RNS Number:5578F
Ludorum PLC
11 October 2007
Ludorum plc
Interim results for the six months ended 30 June 2007
Ludorum plc, the AIM listed interactive media investment company, today
announces its interim results for the six months ended 30 June 2007.
The highlight of the period has been the development of "Chuggington", an
animated series aimed at pre-school age children of 3 to 6 years, which Ludorum
has developed and has commenced production of the first series in conjunction
with a major international toy manufacturer.
Rob Lawes, Chief Executive of Ludorum, today said "We're delighted with our
first in-house developed property, Chuggington, and are extremely pleased with
the progress we've made to date from both a creative and commercial standpoint,
although we have experienced frustration in our efforts to develop Gong, our
subsidiary focused on Anime, through acquisition. We continue to believe that
significant opportunities exist to create shareholder value through the
development and acquisition of intellectual property for distribution over new
media networks, and the #3.1 million placing we have also announced today will
enable us to pursue these opportunities. We look to the future with confidence."
Enquiries
Ludorum plc
Rob Lawes
+44 (0) 20 8849 8735
Investec
Rupert Krefting/ Andrew Craig
+44 (0) 20 7597 4000
Chief Executive's Statement
The results for the first half of 2007 reflect a period in which Ludorum made
significant progress within its intellectual property division but experienced
frustration in its attempts to complete a number of acquisitions and other
corporate transactions.
During the period, and following the successful production of a pilot episode in
2006, we continued our investment in the development of an animated series with
the title "Chuggington" aimed at pre-school age children. Chuggington, which
Ludorum has developed in-house, is a computer generated 3D series of 52 x 10
minute episodes scheduled for delivery in the fourth quarter of 2008, as well as
a fully immersive interactive site scheduled for delivery at the same time. The
series follows the adventures of Wilson, Brewster and Koko, trainee diesel
engines, each with their own unique personality and learning style. The series
is set in a world much like our own with cities, villages and diverse cultures
and geography. Entertainment and enjoyment is at the heart of Chuggington, but
embedded within each story are important educational messages centred on
learning and social-emotional development. The property has been conceived to
seamlessly integrate television, books and interactive view-and-play.
We have entered into an agreement with a major international toy manufacturer
which has been granted a global master toy licence for the series for which it
will contribute 50% of the production costs and participate jointly in the net
profit of the property. Since the end of the period we have signed an agreement
with the BBC for UK broadcast rights with transmission expected to commence in
2009 and we are in advanced negotiations with a leading broadcaster in France
and Germany.
Ludorum also continued its investment in Gong Limited, the subsidiary it formed
in 2006 to distribute anime content over new media platforms. In order to
develop Gong, the Company considered several acquisition and joint venture
opportunities in Continental Europe and the USA and conducted extensive due
diligence exercises on a small number of target companies but due to a number of
circumstances was unable to complete these transactions. Although the Board
believes that the anime genre is ideally-suited to a variety of new media
platforms, it considers that the immediate revenue streams remain uncertain and
is therefore investigating a number of proposals for its investment in Gong,
which may include an outright sale or the retention of a minority interest.
Results
The results for the period, which are reported under IFRS, were a loss before
taxation of #2,236,000 (2006: #456,000) and a loss per share of 44.8 pence
(2006: 26.0 pence). This comprises operational costs incurred in the development
of the company's intellectual property activities and Gong and also reflects
#1,032,000 of professional fees and other costs directly related to acquisitions
and other corporate transactions that the company pursued during the year but
did not complete. The results also include a charge of #214,000 relating to the
treatment of the company's share-based incentive arrangements under IFRS.
Outlook
The launch of Chuggington represents a significant step in the execution of
Ludorum's strategy. The Board has extensive experience of managing and
exploiting entertainment-based intellectual property and this, together with the
significant trade agreements for the property achieved or under detailed
negotiation at this early stage of its development, indicate that the prospects
for Chuggington are very encouraging and form a strong basis for the development
of the Company's IP portfolio through in-house development or acquisition. The
#3.1 million placing that has also been announced today will give the company
the resources to take forward the next stage of its strategy and the Board
therefore looks to the future with confidence.
Ludorum plc
Consolidated income statement
for the six months ended 30 June 2007
Unaudited Audited
for the for the
Unaudited period from period from
Six months 18 Oct 2005 18 Oct 2005
ended to to
30 June 30 June 31 December
2007 2006 2006
Notes #000 #000 #000
-----------------------------------------------
Continuing operations
Revenue 15 - -
Cost of sales ( 147 ) - ( 149 )
------------- ---------- ----------
Gross loss ( 132 ) - ( 149 )
Other income 61 - -
Costs related to aborted
acquisitions and transactions ( 1,032 ) - -
Other administrative expenses ( 1,182 ) ( 500 ) ( 1,843 )
------------- ---------- ----------
Total administrative expenses ( 2,214 ) ( 500 ) ( 1,843 )
------------- ---------- ----------
Operating loss ( 2,285 ) ( 500 ) ( 1,992 )
Interest payable and similar charges ( 8 ) ( 1 ) ( 6 )
Interest receivable 57 45 130
------------- ---------- ----------
Loss before taxation 3 ( 2,236 ) ( 456 ) ( 1,868 )
Taxation 5 ( 2 ) - ( 3 )
------------- ---------- ----------
Loss for the period ( 2,238 ) ( 456 ) ( 1,871 )
------------- ---------- ----------
Basic and diluted earnings per share 6 ( 44.8p ) ( 26.0p ) ( 60.1p )
------------- ---------- ----------
Ludorum plc
Consolidated balance sheet as at 30 June 2007
Unaudited Unaudited Audited
30 June 30 June 31 December
2007 2006 2006
Notes #000 #000 #000
-----------------------------------------------
Assets
Non-current assets
Property, plant and equipment 7 14 12 14
Intangible assets 8 493 - 48
------------- ---------- ----------
507 12 62
------------- ---------- ----------
Current assets
Trade and other receivables 9 434 64 59
Cash and cash equivalents 10 680 4,316 3,470
------------- ---------- ----------
1,114 4,380 3,529
------------- ---------- ----------
Liabilities
Current liabilities
Trade and other liabilities 11 ( 519 ) ( 91 ) ( 465 )
------------- ---------- ----------
( 519 ) ( 91 ) ( 465 )
------------- ---------- ----------
Net current assets 595 4,289 3,064
------------- ---------- ----------
Non-current liabilities
Provisions 12 ( 46 ) ( 7 ) ( 28 )
------------- ---------- ----------
Net assets 1,056 4,294 3,098
------------- ---------- ----------
Shareholders' equity
Ordinary shares 13 50 50 50
Deferred shares 13 50 50 50
Share premium 14 4,575 4,575 4,575
Other reserves 15 490 75 294
Retained losses 16 ( 4,109 ) ( 456 ) ( 1,871 )
------------- ---------- ----------
Total shareholders'equity 1,056 4,294 3,098
------------- ---------- ----------
Ludorum plc
Statement of changes in shareholders' equity
Total
Share Share Retained Other shareholders'
capital premium earnings reserves equity
June 07 June 07 June 07 June 07 June 07
#000 #000 #000 #000 #000
---------- ------------ ------------ ------------- -------------
At 1 January 2007 100 4,575 ( 1,871 ) 294 3,098
Loss for the period - - ( 2,238 ) - ( 2,238 )
Charge relating to incentive option plan - - - 196 196
---------- ------------ ------------ ------------- ------------
At 30 June 2007 100 4,575 ( 4,109 ) 490 1,056
---------- ------------ ------------ ------------- ------------
Total
Share Share Retained Other shareholders'
capital premium earnings reserves equity
June 06 June 06 June 06 June 06 June 06
#000 #000 #000 #000 #000
---------- ------------ ------------ ------------- -------------
At 1 January 2006 - - - - -
Loss for the period - - ( 456 ) - ( 456 )
Charge relating to incentive option plan - - - 75 75
New shares issued 100 4,901 - - 5,001
Costs relating to the issue of shares - ( 326 ) - - ( 326 )
---------- ------------ ------------ ------------- ------------
At 30 June 2006 100 4,575 ( 456 ) 75 4,294
---------- ------------ ------------ ------------- ------------
Ludorum plc
Consolidated cash flow statement
for the six months ended 30 June 2007
Unaudited Audited
for the for the
Unaudited period from period from
Six months 18 Oct 2005 18 Oct 2005
ended to to
30 June 30 June 31 December
2007 2006 2006
Notes #000 #000 #000
-----------------------------------------------
Cash flows from operating activities
Cash used in operations 17 ( 2,355 ) ( 353 ) ( 1,247 )
Interest received 57 9 130
Interest paid ( 8 ) ( 1 ) ( 6 )
Taxation paid ( 2 ) - -
------------- ---------- ----------
Net cash used in operating activities ( 2,308 ) ( 345 ) ( 1,123 )
------------- ---------- ----------
Cash flows from investing activities
Purchase of property,
plant and equipment 7 ( 3 ) ( 14 ) ( 18 )
Investment in intangible assets 8 ( 479 ) - ( 64 )
------------- ---------- ----------
Net cash used in investing activities ( 482 ) ( 14 ) ( 82 )
------------- ---------- ----------
Cash flows from financing activities
Net proceeds from
issue of share capital 13,14 - 4,675 4,675
------------- ---------- ----------
Net cash generated from financing
activities - 4,675 4,675
Net decrease/increase in cash and
cash equivalents ( 2,790 ) 4,316 3,470
Cash and cash equivalents at
1 January 2007 10 3,470 - -
------------- ---------- ----------
Cash and cash equivalents at
30 June 2007 10 680 4,316 3,470
------------- ---------- ----------
Ludorum plc
Notes to the consolidated interim financial statements
for the six months ended 30 June 2007
1. Accounting policies
The principal accounting policies adopted in the preparation of these interim
financial statements are set out below. These policies have been consistently
applied to the whole period presented and are consistent with those applied in
the financial statements for period ended 31 December 2006.
Status of financial information
These interim financial statements do not have the status of statutory accounts
within the meaning of Section 240 of the Companies Act 1985.
Financial information for the period ended 31 December 2006 has been extracted
from the full financial statements as filed with the Registrar of Companies.
The Auditors' report on the full financial statements for the period ended 31
December 2006 was unqualified and did not contain statements under section
237(2) of the United Kingdom Companies Act 1985 (regarding adequacy of
accounting records and returns), or under 237(3) (regarding provision of
necessary information and explanations).
Basis of preparation
These interim financial statements have been prepared in accordance with
International Financial Reporting Standards and IFRIC interpretations as
adopted by the EU and with those parts of the Companies Act 1985 applicable to
companies reporting under IFRS. The interim financial statements have been
prepared under the historical cost convention. A summary of the more important
Group accounting policies is set out below.
The preparation of interim financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities at the date of the
interim financial statements and the reported amounts of revenues and expenses
during the reporting period. Although these estimates are based on management's
best knowledge of the amount, event or actions, actual results ultimately may
differ from these estimates.
IFRS 7 'Financial instruments: Disclosures' has not been early adopted by the
Group. This standard does not have any impact on the classification and
valuation of the Group's financial instruments. In addition, the Group has not
early adopted the following interpretations which are not yet effective: IFRIC 7
'Applying the restatement approach under IAS 29', IFRIC 8 'Scope of IFRS 2',
IFRIC 9 'Reassessment of embedded derivatives' and IFRIC 10 'Interim financial
reporting and impairment'. These interpretations are not expected to have any
impact on the Group's interim financial statements.
The interim financial statements have been prepared on a going concern basis.
The ability of the Group to continue as a going concern depends upon the
successful completion of a proposed placing of ordinary shares announced on
11 October 2007. The Directors are confident that, although at the date of
approval of these interim financial statements the placing is not irrevocably
completed, the placing will be successfully concluded and will provide
sufficient funds to enable the Group to continue as a going concern and
therefore that the going concern basis of preparation is appropriate. Were the
Group unable to continue as a going concern, adjustments may have to be made to
the balance sheet of the Group to reduce balance sheet values of assets to their
recoverable amounts, to provide for future liabilities that might arise and to
reclassify non-current assets and long-term liabilities as current assets and
liabilities.
Critical accounting estimates and judgments
At this stage in the Company's development substantially all its accounting
transactions are related to cash and the requirement for critical estimates and
judgements is limited. However, the Directors consider that the key areas of
judgement to date are the estimation of the fair value of options granted under
the Incentive Option Plan (as explained in more detail below) as well as the
carrying value of intangible assets (in respect of which no impairment issues
have been identified to date).
Basis of consolidation
These interim financial statements include the results of the Company and its
subsidiaries. The results of businesses acquired during the period are included
from the effective date of acquisition.
Foreign currency translation
(1) Functional and presentation currency - Items included in the financial
statements of each of the Group's entities are measured using the currency of
the primary economic environment in which the entity operates (the 'functional
currency'). The consolidated interim financial statements are presented in
Sterling, which is the Company's functional and presentation currency.
(2) Transactions and balances - Foreign currency transactions are translated
into the functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at period end exchange
rates of monetary assets and liabilities denominated in foreign currencies, are
recognised in the income statement.
(3) Group companies - The results and financial position of Group entities that
have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
* assets and liabilities are translated at the closing rate at the date of the
balance sheet;
* income and expenses are translated at average exchange rates.
All resulting exchange differences are recognised as a separate component of
equity.
On consolidation, exchange differences arising from the translation of the net
investment in foreign entities are taken to shareholders' equity. The Group
treats specific inter-company loan balances, which are not intended to be repaid
for the foreseeable future, as part of its net investment.
The principal overseas currencies for the Group are the US Dollar and the Euro.
The average rate for the period against Sterling and the rate at 30 June 2007
for each of these currencies were:
Average Rate at 30 June 2007
US Dollar 1.9703 2.0064
Euro 1.4826 1.4857
Investment in subsidiaries
Investments in subsidiaries are stated at cost less any provision for impairment
Property, plant & equipment
Property, plant and equipment comprises office equipment which is recorded
at purchase cost less depreciation and, when appropriate, provision for
impairment. Depreciation is calculated so as to write off the cost of the
assets, less their estimated residual values, over their expected useful
economic lives. Office equipment is depreciated on a straight-line basis over
its estimated useful life of three years.
Intangible assets
(1) Development Projects
Costs comprise direct programme costs, which are capitalised up to the date of
first release of the programme, and programme development costs. Costs for
developing programmes are expensed until such time as a pilot is produced and
decision is made to exploit the programme further. Development costs are
transferred to work in progress once a decision is made to proceed with the
programme.
A charge is made to write down the cost of completed programmes over their
useful lives. Completed programmes are expensed based on the ratio of the
current period's net revenues to estimated total net revenues from all sources
on an individual production basis. This charge is included in the income
statement as part of cost of sales.
(2) Acquired intangible assets
Acquired intangible assets comprise distribution rights and regionalisation
costs. These assets are capitalised on acquisition and amortised over their
estimated useful lives. Distribution rights are amortised on a straight-line
basis over the relevant licence period. Regionalisation costs are amortised
on a straight-line basis over their estimated useful economic lives, generally
estimated to be three years, or, if shorter, over the length of the licence
period of the relevant property.
The carrying value of intangible assets is subject to an impairment review where
there are indicators that impairment may exist. An impairment loss is calculated
by reference to the expected future revenues of the underlying property, taking
account of the cost of such sales, from which the discounted value of future
cash flows relating to the intangible asset is determined and compared to the
carrying value. Any impairment charge is included in the income statement as
part of cost of sales.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances held in current (checking) or
deposit accounts with recognised UK and US banks.
Tax and deferred tax
Taxation is recognised on profits at the weighted-average rate of corporation
tax applicable to small companies of 19.75 per cent (2006: 19 per cent.).
Deferred tax is provided, using the liability method, on all temporary
differences at the balance sheet date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred tax assets are recognised for all deductible temporary differences,
carry-forward of unused tax assets and unused tax losses, to the extent that
it is probable that a taxable profit will be available against which the
deductible temporary differences, and the carry-forward of unused tax assets
and unused tax losses can be utilised. The carrying amount of deferred tax
assets is reviewed at each balance sheet date and reduced to the extent that it
is no longer probable that sufficient taxable profit will be available to allow
all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are
expected to apply to the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the balance sheet date. Deferred tax relating to items
recognised directly in equity is recognised in equity and not in the income
statement.
Trade payables
Trade payables are recognised initially at fair value and subsequently measured
at amortised cost using the effective interest rate method.
Operating leases
Payments relating to operating leases are recognised in the income statement on
a straight-line basis over the lease term. Initial rent deposits are shown as a
debtor in the balance sheet.
Incentive option plan
The Company has granted share options under the Incentive Option Plan which will
result in sharebased payments to optionholders on exercise of the options. The
fair value of these options, which the Company has estimated at the award date
using a Monte Carlo valuation model, is estimated to be #1,500 per option and is
expensed through the income statement over the vesting period of the options.
The principal assumptions used in the valuation are as follows: initial share
price - #1; expected volatility - 40 per cent.; term of option - 5 years; and
risk-free interest rate - 4.75 per cent. As the Company does not have a trading
history, expected volatility has been based on the volatility of a range of
comparable companies over periods equal to the option term. The main feature of
the options taken into account in the valuation is the facility for the number
of shares under option to be enlarged in accordance with the rules of the
Incentive Option Plan.
Share capital
The Company's share capital consists of ordinary shares with a nominal value of
1p each and deferred shares with a nominal value of 99p each. No dividends have
been declared or paid on the ordinary shares. The rights of the deferred shares
to receive dividends or participate in distributions of capital on a winding-up
are so limited as to render the deferred shares of negligible value. The costs
of issuing shares are charged directly to the share premium account.
Pension costs
The Group contributes to defined-contribution (money purchase) private pension
schemes in the UK for the benefit of the executive Directors (with the exception
of Richard Rothkopf). The Group also provides for a defined-contribution pension
scheme for the benefit of its employee in the US.
Contributions are charged to the income statement on the basis of the
contributions payable during the year.
Segmental reporting
The Group's primary reporting format is geographical segments. At this early
stage in its development it does not have a meaningful secondary segment.
The Group's geographical segments are determined by the location of its assets
and operations.
Financial risk
The main risk arising from the Group's financial activities is liquidity risk.
The Group manages this by financing its activities through its cash resources
which are maintained on short-term deposit.
2 Segmental reporting
The following table presents information regarding the Group's geographical
segments:
UK USA Total
#000 #000 #000
Six months ended 30 June 2007 ----------------------------------
Gross loss ( 132 ) - ( 132 )
Operating loss ( 2,211 ) ( 74 ) ( 2,285 )
Net assets/(liabilities) 1,065 ( 9 ) 1,056
Significant non-cash expenses
- Incentive Option Plan 201 13 214
UK USA Total
#000 #000 #000
18 October 2005 to 30 June 2006 ----------------------------------
Gross loss - - -
Operating loss ( 464 ) ( 36 ) ( 500 )
Net assets/(liabilities) 4,297 ( 3 ) 4,294
Significant non-cash expenses
- Incentive Option Plan 77 5 82
UK USA Total
#000 #000 #000
18 October 2005 to 31 December 2006 ----------------------------------
Gross loss ( 149 ) - ( 149 )
Operating loss ( 1,876 ) ( 116 ) ( 1,992 )
Net assets/(liabilities) 3,112 ( 14 ) 3,098
Significant non-cash expenses
- Incentive Option Plan 305 17 322
All material capital expenditure, depreciation and amortisation is within
the UK.
3 Loss before taxation
Unaudited Audited
for the for the
Unaudited period from period from
Six months 18 Oct 2005 18 Oct 2005
ended to to
30 June 30 June 31 December
2007 2006 2006
#000 #000 #000
-------------------------------------
The following items have been included in
arriving at loss before taxation:
Costs related to aborted acquisitions
and transactions 1,032 - -
Staff costs 652 346 1,048
Depreciation of property, plant and
equipment 3 2 4
Amortisation of intangible assets 34 - 16
Operating lease rentals
- property, plant and equipment 57 19 53
----------------------------------
Costs related to aborted acquisitions and transactions comprise professional
fees and other costs incurred by the company during the period in respect of
proposed acquisitions and other corporate transactions which, for a variety of
reasons, were not completed.
4 Employees and directors
Unaudited Audited
for the for the
Unaudited period from period from
Six months 18 Oct 2005 18 Oct 2005
ended to to
30 June 30 June 31 December
2007 2006 2006
#000 #000 #000
-------------------------------------
Staff costs for the group during the period:
Wages and salaries 335 220 603
Social security costs 69 27 70
Other pension costs 34 17 53
----------------------------------
438 264 726
Costs attributable to the
Incentive Option Plan 214 82 322
----------------------------------
652 346 1,048
----------------------------------
Number of employees (including
executive directors) at period end 10 5 8
----------------------------------
5 Taxation
Unaudited Audited
for the for the
Unaudited period from period from
Six months 18 Oct 2005 18 Oct 2005
ended to to
30 June 30 June 31 December
2007 2006 2006
#000 #000 #000
-------------------------------------
Current tax
UK taxation - - -
Overseas taxation 2 - 3
----------------------------------
2 - 3
Deferred tax - - -
----------------------------------
Taxation 2 - 3
----------------------------------
The tax assessed for the period differs from the standard rate of corporation
tax in the UK. The differences are explained below:
Unaudited Audited
for the for the
Unaudited period from period from
Six months 18 Oct 2005 18 Oct 2005
ended to to
30 June 30 June 31 December
2007 2006 2006
#000 #000 #000
-------------------------------------
Loss before taxation ( 2,236 ) ( 456 ) ( 1,868 )
----------------------------------
Loss before taxation multiplied by the
weighted-average rate of UK corporation
tax applicable to small companies of
19.75% (2006:19%) ( 442 ) ( 87 ) ( 355 )
Effect of:
Overseas taxation 2 - 3
Expenses not deductible for tax purposes 204 1 2
Losses available to carry forward and other
timing differences 238 86 353
----------------------------------
Taxation 2 - 3
----------------------------------
The unprovided deferred tax asset at 30 June 2007 is estimated to be #591,000
(30 June 2006: #86,000; 31 December 2006: #353,000) and is in respect of trading
losses incurred and other timing differences.
6 Earnings per share
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period. Because basic EPS results in a loss per share the
diluted EPS is calculated using the undilutive weighted average number of shares
Loss
attributable Weighted
to ordinary average number Per-share
shareholders of shares amount
#000 pence
---------- ------------ ------------
Basic and diluted EPS
Six months ended 30 June 2007 ( 2,238 ) 5,000,001 ( 44.8 )
18 October 2005 to 30 June 2006 ( 456 ) 1,754,494 ( 26.0 )
18 October 2005 to 31 Dec 2006 ( 1,871 ) 3,111,706 ( 60.1 )
---------- ------------ ------------
7 Property, plant and equipment
Office
equipment Total Total Total
30 June 30 June 30 June 31 December
2007 2007 2006 2006
#000 #000 #000 #000
----------------------------------------------
Cost
At 1 January/ date of incorp. 18 18 - -
Additions 3 3 14 18
----------------------------------------------
At 30 June/31 December 21 21 14 18
----------------------------------------------
Accumulated depreciation
At 1 January/ date of incorp. 4 4 - -
Charge for the period 3 3 2 4
----------------------------------------------
At 30 June/31 December 7 7 2 4
----------------------------------------------
Net book amount at 30 June/31 Dec 14 14 12 14
----------------------------------------------
The company considers at each reporting date whether there is any indication of
impairment of its assets. In the event that impairment is identified, the
carrying amount of the assets is written down immediately to its estimated
recoverable amount.
8 Intangible assets
Capitalised Regionalisation Acquired
development costs rights Total Total Total
30 June 30 June 30 June 30 June 30 June 31 December
2007 2007 2007 2007 2006 2006
#000 #000 #000 #000 #000 #000
------------ ------------- --------- ---------- ---------- -----------
Cost
At 1 January/ date of incorp. - 16 48 64 - -
Additions 269 - 210 479 - 64
------------ ------------- --------- ---------- ---------- -----------
At 30 June/31 December 269 16 258 543 - 64
------------ ------------- --------- ---------- ---------- -----------
Accumulated amortisation
At 1 January/ date of incorp. - 6 10 16 - -
Charge for the period - 2 32 34 - 16
------------ ------------- --------- ---------- ---------- -----------
At 30 June/31 December - 8 42 50 - 16
------------ ------------- --------- ---------- ---------- -----------
Net book amount at 30 June 2007 269 8 216 493 -
------------ ------------- --------- ---------- ----------
Net book amount at 31 Dec 2006 - 10 38 48
------------ ------------- --------- ----------
9 Trade and other receivables
Unaudited Unaudited Audited
30 June 30 June 31 December
2007 2006 2006
#000 #000 #000
----------------------------------
Amounts falling due within one year:
Prepayments and accrued income 40 21 32
Other receivables 394 43 27
----------------------------------
434 64 59
----------------------------------
10 Cash and cash equivalents
Unaudited Unaudited Audited
30 June 30 June 31 December
2007 2006 2006
#000 #000 #000
----------------------------------
Cash and cash equivalents
Cash at bank and in hand 16 - 4
Short-term bank deposits 664 4,316 3,466
----------------------------------
680 4,316 3,470
----------------------------------
Short-term bank deposits are invested with banks and earn interest at
prevailing short-term deposit rates.
11 Trade and other liabilities
Unaudited Unaudited Audited
30 June 30 June 31 December
2007 2006 2006
#000 #000 #000
----------------------------------
Trade payables 260 8 104
Overseas tax payable 1 - 3
Social security and other taxes 67 19 27
Accruals 170 41 317
Other liabilities 21 23 14
----------------------------------
519 91 465
----------------------------------
12 Provisions
Social Security
costs Total Total Total
30 June 30 June 30 June 31 December
2007 2007 2006 2006
#000 #000 #000 #000
----------------------------------------------
At 1 January/ date of incorp. 28 28 - -
Income statement charge 18 18 7 28
----------------------------------------------
At 30 June/31 December 46 46 7 28
----------------------------------------------
Social security costs
The company is providing for the anticipated employer's national insurance
contribution that will arise on the exercise of awards granted under the
2006 Incentive Option Plan.
13 Called up share capital
Unaudited Unaudited Audited
30 June 30 June 31 December
2007 2006 2006
Shares #000 #000 #000
------------------------------------------------
Authorised
Ordinary shares of 1 pence each 7,666,667 77 77 77
Deferred shares of 99 pence each 50,001 50 50 50
------------------------------------------------
127 127 127
------------------------------------------------
Issued and fully-paid
Ordinary shares of #1 each
At 1 January/ date of incorp. - - - -
Issued during the period - - 50 50
Converted during the period - - ( 50 ) ( 50 )
------------------------------------------------
At 30 June/31 December - - - -
------------------------------------------------
Ordinary shares of 1 pence each
At 1 January/ date of incorp. 5,000,001 50 - -
Issued during the period - - 50 50
------------------------------------------------
At 30 June/31 December 5,000,001 50 50 50
------------------------------------------------
Deferred shares of 99 pence each
At 1 January/ date of incorp. 50,001 50 - -
Arising on conversion - - 50 50
------------------------------------------------
At 30 June/31 December 50,001 50 50 50
------------------------------------------------
On incorporation, the authorised share capital of the Company was #50,000
divided into 50,000 ordinary shares of #1.00 each, of which two ordinary shares
were issued at par fully paid up to the subscribers.
On 10 January 2006, the Company's authorised share capital was increased to
#50,001 and 49,999 ordinary shares of #1.00 each were issued paid up as to
one-quarter of their nominal value. The balance of the nominal value of the
partly-paid ordinary shares was paid up in full on 28 March 2006.
On 28 March 2006, each ordinary share of #1.00 each in the capital of the
Company was converted into one ordinary share of 1 pence and one deferred share
of 99 pence each. The authorised share capital of the Company was increased from
#50,001 to #126,168 by the creation of 7,616,666 ordinary shares.
On 3 April 2006, 4,950,000 ordinary shares of 1 pence each were issued at a
price of #1 per share.
14 Share premium account
Unaudited Unaudited Audited
30 June 30 June 31 December
2007 2006 2006
#000 #000 #000
----------------------------------
At 1 January/ date of incorp. 4,575 - -
Premium on shares issued during the period - 4,901 4,901
Costs relating to the issue of shares - ( 326 ) ( 326 )
----------------------------------
At 30 June/31 December 4,575 4,575 4,575
----------------------------------
15 Other reserves
Incentive Plan
valuation
reserve Total Total Total
30 June 30 June 30 June 31 December
2007 2007 2006 2006
#000 #000 #000 #000
----------------------------------------------
At 1 January/ date of incorp. 294 294 - -
Charge relating to the incentive
option plan 196 196 75 294
----------------------------------------------
At 30 June/31 December 490 490 75 294
----------------------------------------------
16 Retained losses
Unaudited Unaudited Audited
30 June 30 June 31 December
2007 2006 2006
#000 #000 #000
----------------------------------
At 1 January/ date of incorp. ( 1,871 ) - -
Loss for the period ( 2,238 ) ( 456 ) ( 1,871 )
----------------------------------
At 30 June/31 December ( 4,109 ) ( 456 ) ( 1,871 )
----------------------------------
17 Cash flow from operating activities
Unaudited Audited
for the for the
Unaudited period from period from
Six months 18 Oct 2005 18 Oct 2005
ended to to
30 June 30 June 31 December
2007 2006 2006
#000 #000 #000
-------------------------------------
Continuing operations
Loss before taxation ( 2,236 ) ( 456 ) ( 1,868 )
Adjustments for:
Interest payable 8 1 6
Interest receivable ( 57 ) ( 45 ) ( 130 )
Depreciation of property, plant and
equipment 3 2 4
Amortisation of intangible assets 34 - 16
Charge relating to the incentive
option plan 196 75 294
Increase in provisions 18 7 28
Changes in working capital:
Increase in Trade and other receivables ( 375 ) ( 28 ) ( 59 )
Increase in Payables 54 91 462
----------------------------------
Cash used in continuing operations ( 2,355 ) ( 353 ) ( 1,247 )
----------------------------------
18 Operating lease commitments
Unaudited Unaudited Audited
30 June 30 June 31 December
2007 2006 2006
#000 #000 #000
----------------------------------
Commitments under non-cancellable
operating leases expiring:
Within one year 45 36 33
----------------------------------
The Company has entered into a short-term non-cancellable operating lease on
its head office in Chiswick, London and an office in Paris.
19 Related party transactions
During the period, a group company rented an office from a company controlled
by a director of the company. The rent paid during the period was #4,600
(30 June 2006: nil; 31 December 2006: #4,500).
20 Contingent liabilities
By a letter received on 23 March 2007, the Company has been notified of a
potential claim in respect of a pre-school property project it is developing.
The claim has been made by a former consultant of the Company for fees and other
amounts allegedly payable to the claimant in connection with a consultancy
agreement concluded in November 2006 (with an effective date of 21 June 2006).
The former consultant is seeking approximately #200,000 in respect of future
consultancy fees and 3 per cent. of the net revenue share from any exploitation
of the programme. The Company disputes the claim and intends to resist it.
21 Commitments
The Company has entered into an agreement with a toy manufacturer under the
terms of which the toy manufacturer will fund 50% of the production cost of the
Company's animated series "Chuggington" in return for which it has a global
master toy licence and the right to participate in the net profit of the
property. The agreed budget for the production of the first series of
52 episodes is $6.3 million (#3.15 million) and it is expected that all the
episodes will be completed by the end of 2008.
The Company has entered into an agreement with Shanghai Motion Magic Digital
Entertainment Inc ("Motion Magic") under the terms of which Motion Magic will
provide animation and editing services for the production of Chuggington. Under
the terms of the agreement, Motion Magic is to deliver 52 episodes prior to
31 October 2008 for which the Company is committed to pay a total of
RMB 18.9 million (#1.24 million) in instalments over the period of production.
As at 30 June 2006, the Company had paid RMB 3.8 million (#0.25 million) and
RMB 15.1 million (#0.99 million) remained outstanding. Under the terms of the
agreement with the toy manufacturer described above, 50% of the amounts paid and
payable to Motion Magic has been or will be refunded to the Company by the toy
manufacturer.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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