TIDMLUD
RNS Number : 9455Q
Ludorum PLC
22 April 2009
22 April 2009
LUDORUM PLC PRELIMINARY RESULTS
Ludorum plc, an AIM-listed media investment company, today announces its results
for the year ended 31 December 2008.
Highlights
* Chuggington has now been licensed to over 145 countries with major global
broadcast partners in place including BBC, Super RTL (Germany), TF1 (France),
Fuji TV (Japan), ABC (Australia) and The Disney Channel (Latin America and Asia)
* Significant early ratings success in the initial broadcast markets of the UK,
Germany, Australia, Canada and France
* In February 2009 agreement entered into to produce a further 26 X 10" episodes
which have been pre-sold to the BBC
* Global home entertainment partners secured including 2 Entertain (UK), TF1
Vision (France), Universal Pictures (Germany) and Roadshow Films (Australia)
* 17 third party UK licensees now in place
* Successful UK launch of first Chuggington DVD on 31 March 2009 with over 13,000
DVDs sold in the first week - the highest level for a new release pre-school
property since 2007
* UK comic book sales of the first Chuggington title released on 2 April are
performing strongly with sales of the first title anticipated to exceed 40,000
copies for the month
* First turnover generated in the year with revenues of GBP170k (2007: GBP0)
Rob Lawes, Ludorum's Chief Executive Officer said:
"We are delighted with the progress we have made throughout 2008. We have
licensed a formidable line up of partners to represent Chuggington and we are
very encouraged by the level of broadcast sales, ratings performances in key
territories, the quality of consumer products partners and early success this
year with UK DVD and comic sales. All of these indicators confirm our belief
that Chuggington has global appeal and will create material value for our
shareholders."
Chief Executive's Review 2008
Overview
Ludorum plc (the "Company") is an Aim-listed media investment company. The Group
is focussed on developing, acquiring and marketing global entertainment
properties through both conventional media and new media channels.
In the financial year ended 31 December 2008, the Company continued to make
progress with the development and launch of its first in-house developed
property, Chuggington, a new train-based series and interactive website for 2-6
year olds. The first series was delivered to the BBC in September 2008 and all
indicators to date confirm our belief that Chuggington has global appeal and
will create material value for our shareholders.
The Company also announced during the period our appointment as global
distributor to the iconic D C Thomson & Co. Ltd property, Dennis and Gnasher, as
well as the rights to their Dandy comic character Marvo.
Chuggington
Chuggington is a computer generated 3D series of 52 x 10" minute episodes as
well as a fully immersive interactive website. The series follows the adventures
of Wilson, Brewster and Koko, all trainee engines and 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 and developmental messages centred on learning and
social-emotional development. The series offers an extensive range of
destinations to explore and adventures through which children and parents can
benefit from the underlying value of positive life-learning lessons.
Chuggington is directed by Sarah Ball, who won a BAFTA award for her work as a
director and writer of Bob the Builder. The series has been designed by a team
led by Don Toht who has, in the past, been instrumental in the design and
creation of the Thomas & Friends and Bob the Builder toy and play systems.
Broadcast
Chuggington was introduced to the international marketplace at the MIPCOM
festival in October 2007. Since then, we have continued to see significant
demand from leading broadcasters in their respective territories and have
concluded broadcast agreements into over 145 countries including the BBC, Super
RTL (Germany), TF1 (France), Fuji TV (Japan), ABC (Australia) and The Disney
Channel (Latin America and Asia).
Chuggington was launched in the UK in September 2008 on BBC2 and then on
Cbeebies in January 2009, where the series was quickly established as a ratings
success. The series is currently scheduled in the 5.45pm slot and is aired five
days a week, achieving the consistent status of one of the top rating shows on
the channel. The series has also been launched in a number of key international
markets - in Germany in January 2009 where it has already achieved significant
ratings success, in Australia on the ABC where the show has quickly established
itself as a top rating series, capturing a 70% share of 0-4 year olds and
successfully also in Canada on the major children's network, Treehouse. In
France, Chuggington premiered on TF1, the dominant commercial broadcaster, on 1
April 2009 and has enjoyed strong initial ratings. The property is scheduled to
launch in other key territories around the world through-out the rest of 2009.
US broadcast discussions are progressing for a potential 2010 market
introduction.
Home Entertainment
The Company has concluded a number of agreements with leading home entertainment
partners in key territories. These include 2entertain (UK), Universal Pictures
(Germany), TF1 Vision (France), Fuji Group (Japan) and Roadshow (Australia). The
first Chuggington UK DVD was released on 31 March 2009 and had a very successful
launch achieving sell through of over 13,000 units in the first week, the
highest level achieved for a new release pre-school property in the UK since
2007 (source: 2Entertain).
Consumer Products
Learning Curve Brands, Inc, a division of RC2 and a leading global toy
manufacturer based in the US, has been granted the master toy licence on a
worldwide basis. Learning Curve plans to develop a substantial global line of
new and innovative toys with both on and offline applications. Learning Curve
contributes to production costs and will participate in the net profits of the
property. First products from Learning Curve Brands will begin shipment in early
2010.
In addition to the Learning Curve master toy licence, the Company has entered
into a significant amount of consumer products agreements with leading
organisations. For example, in the UK, we now have a total of 17 licence
agreements, covering a broad range of product areas including clothing, bedding,
games and puzzles, bicycles and celebration cakes and greetings cards.
The company has appointed highly regarded agents in several international
markets to represent certain categories of our business and we are now receiving
proposals and concluding a number of multi-territory consumer products
agreements.
Publishing
In July 2008, the Company concluded a joint venture profit-share publishing
agreement with Parragon Books Limited, a leading UK and international publisher.
Parragon will be the master publisher of Chuggington books in several key
markets including UK, Australia, Germany, Scandinavia and Benelux and the
company is committed to producing very broad range of high quality books across
all categories.
Ludorum has also concluded a UK comic agreement with DC Thomson & Co Ltd, a
leader in the field of comic publishing. The first comic was launched in April
2009 with strong early sales achieving sell-out performances in a number of UK
retailers with sales anticipated to exceed over 40,000 units for the month
(source: D C Thomson & Co Ltd).
The Company has also concluded a major global electronic sound book agreement
with Publications International, also one of the leading licensees in the field.
Interactive
Chuggington.com, the interactive site, will allow parents to prioritise the
developmental and learning issues that they believe are important to their
children. The site's Virtual World represents an additional entertainment asset
to the animated series by presenting an immersive and entertaining world of
Chuggington which is both graphically and textually consistent with the
television series. Through quest-based play, users will be able to enjoy
activities based on plot lines and settings taken directly from the television
series. These activities will be created in a modular fashion to allow us to
offer assets to our commercial partners and on the site. The Virtual World is
currently in beta test mode, and the Company is also assessing various options
to eventually monetise the site around the world either directly or in
conjunction with broadcast partners in certain markets.
Production
The first series of 52 episodes was fully completed in January 2009. In February
2009 the Company entered into a new agreement with Motion Magic to produce a
further 26 episodes which will be delivered in the first quarter of 2010. The
Company has thus far pre-sold the second series to the BBC.
Dennis and Gnasher
In January 2008, Ludorum agreed a long-term agency agreement with D C Thomson &
Co. Ltd. to represent global broadcast, home entertainment, consumer product and
new media rights to Dennis and Gnasher, the iconic characters from the Beano
comics which will also be the name given to the television series.
The new series of 52 x 11 minute episodes propels Dennis and Gnasher into the
21st century with a new modern-day look and contemporary storylines. The series,
aimed at six to ten year olds, promises to deliver fun, over-the-top, high
spirited, seat-of-the-pants humour while retaining Dennis' classic
characteristics and it is currently in production for delivery in autumn 2009.
Production is fully funded by D C Thomson & Co. Ltd.
Dennis & Gnasher has been pre-sold to the BBC (who intend to launch the series
in the autumn of 2009) and to the Nine Network in Australia. The Company is now
in discussions with broadcasters worldwide and expects to conclude sales in a
number of territories in the coming months.
Marvo
Marvo the Wonder Chicken is the second property for which D C Thomson & Co. Ltd.
has appointed Ludorum to represent all rights, excluding publishing, worldwide.
Marvo is a series of comedy shorts in the tradition of Looney Tunes and he is
the ultimate "show" chicken. Together with his faithful assistant, Henry, Marvo
attempts to put on the "Greatest Shows on Earth" but everything that can go
wrong does go wrong in a very spectacular way.
52 x 2 minute interstitials are in production for delivery in 2009. The shows
carry no dialogue as the humour is visual, providing the series with further
global appeal. We have recently advised D C Thomson on the conclusion of a
pan-European deal with a leading US broadcaster and are engaged in advanced
discussions with a number of international broadcast partners. We believe, due
in part to its short running times and the absence of any language barriers,
that Marvo offers several potential global "new media" opportunities including
mobile phone and internet applications.
Financial Review
Ludorum generated revenues of GBP170k for the full year. This revenue related to
Chuggington and was predominately related to the recognition of the BBC licence
fee following the commencement of broadcast in September 2008. The Company also
began amortising the Chuggington productions costs at this time, which will be
amortised on a straight line basis over eighty-four months. Ludorum generated an
operating loss in the year to 31 December 2008 of GBP2.39m (GBP1.68m in the year
to 31 December 2007). The underlying administrative expenses, excluding costs
attributable to the Incentive Option Plan, were GBP2m an increase of GBP0.71m
over the GBP1.3m in the period to 31 December 2007. The increase in
administrative expenses mainly relates to costs expensed on the Chuggington
on-line development, style guide, market attendance at MIP TV, MIPCOM and the
New York Licensing Show as well as increased headcount.
As at the 31 December 2008 the Company had incurred total capitalised
Chuggington production costs of GBP1.53m (GBP1m for 2008). The final episode of
series one was delivered to the Company at the end of January 2009. The Company
is now in pre-production for series two which will begin full production in June
2009 for delivery in the first quarter of 2010. Production funding for series
two will be financed by revenue generation from existing licence deals, future
licence agreements and also utilising the Company's banking facilities.
In April 2008 the company obtained banking facilities comprising a variable
interest rate overdraft facility of GBP300,000 and a two year fixed interest
rate loan facility of GBP1,200,000. The overdraft and loan are secured by a
fixed and floating charge on the assets of the company. The overdraft facility
was first utilised in November 2008. The first instalment of the loan facility
was drawn down in March 2009.
Summary
We believe that we can create material capital value for our shareholders by
focussing on the creation, acquisition and representation of children's
intellectual property assets that have global appeal through both conventional
media and new media channels.
The company has licensed a formidable line up of partners to represent
Chuggington and we are very encouraged by the level of broadcast sales, ratings
performances in key territories, the quality of consumer products partners and
early success with UK DVD and comic sales. In line with our strategic aims, we
continue to be highly selective in our consideration of new IP and we will
maintain a disciplined focus to engaging market leading creative teams aligned
with a small and dynamic sales and marketing capability to operate with minimal
internal overheads.
The company is placing what we believe to be the appropriate emphasis on being
at the forefront of new media exploitation for its intellectual property assets.
Our on-line activities are an important part of our strategic planning to
deliver long term value for our properties. The on-line world of Chuggington.com
has an increasingly important role in building brand awareness that delivers
enhanced interaction and entertainment value. Moreover, we believe that it has
the potential to unlock further value in possible subscription models, fan
clubs, download-to-own and digital streaming opportunities as well as link up
the traditional activities in broadcast, consumer products, publishing and home
entertainment.
These integrated operations are devoted to serving the company's focus of
creating a few high quality global franchises, and the year has provided us with
significant number of reasons to be confident that we can deliver on our
ambitions.
Ludorum continues to develop its own new properties and to explore corporate
acquisition opportunities which we believe will create value for our
shareholders.
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| | | | |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| Ludorum plc |Notes | UNAUDITED | AUDITED |
| Consolidated income statement | | for the year | for the year |
| for the year ended 31 December 2008 | | ended | ended |
| | | 31 December | 31 December |
| | | 2008 | 2007 |
| | | GBP000 | GBP000 |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| Revenue | 2 | 170 | - |
| Cost of Sales | | ( 131 ) | - |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| Gross Profit | | 39 | - |
| Other income | | - | 60 |
| | | | |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| Costs attributable to Incentive Option Plan | | ( 422 ) | ( 445 ) |
| Other administrative expenses | | ( 2,004 ) | ( 1,297 ) |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| Total administrative expenses | | ( 2,426 ) | ( 1,742 ) |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| | | | |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| Operating loss | | ( 2,387 ) | ( 1,682 ) |
| Finance costs - bank interest | | ( 8 ) | - |
| Finance income - bank interest | | 29 | 79 |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| Net finance income | | 21 | 79 |
| | | | |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| Loss before taxation on continuing operations | 7 | ( 2,366 ) | ( 1,603 ) |
| Taxation | | ( 5 ) | ( 1 ) |
| | | | |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| Loss for the year on continuing operations | 3 | ( 2,371 ) | ( 1,604 ) |
| Loss on discontinued operations | | | ( 2,884 ) |
| | | - | |
| | | | |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| Loss for the year | 4 | ( 2,371 ) | ( 4,488 ) |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
| Loss per share on continuing operations (basic and | 8 | | ( 29.1p ) |
| diluted) | 8 | ( | ( 52.3p ) |
| Loss per share on discontinued operations (basic | 8 | 29.3p | ( 81.4p) |
| and diluted) | | ) | |
| Loss per share (basic and diluted) | | - | |
| | | ( | |
| | | 29.3p | |
| | | ) | |
+----------------------------------------------------+-------+---------------------------------------------------------------------------+--------------+
The current year results arise from continuing operations. The prior year
results also include the results of discontinued operations.
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
| Ludorum plc | Notes | UNAUDITED | AUDITED | UNAUDITED | AUDITED |
| Balance sheets as at 31 December | | Group | Group | Company | Company |
| 2008 | | 2008 | 2007 | 2008 | 2007 |
| | | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
| Assets | 9 | - | - | 1,271 | 1,810 |
| Non-current assets | 10 | 14 | | 2 | 5 |
| Investment in subsidiaries | 11 | 1,477 | 6 | 1,477 | 536 |
| Property, plant and equipment | | | | | |
| Intangible assets | | | 536 | | |
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
| | | 1,491 | 542 | 2,750 | 2,351 |
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
| Current assets | 12 | 720 | 547 | 492 | 310 |
| Trade and other receivables | 13 | 46 | 1,750 | 34 | 1,722 |
| Cash and cash equivalents | | | | | |
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
| | | 766 | 2,297 | 526 | 2,032 |
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
| Liabilities | 14 | ( 3 ) | ( 1 ) | - | - |
| Current liabilities | 14 | ( 2,221 ) | ( 864 ) | ( 1,457 ) | ( 792 ) |
| Income tax payable | | | | | |
| Trade and other liabilities | | | | | |
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
| | | ( 2,224 ) | ( 865 ) | ( 1,457 ) | ( 792 ) |
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
| Net current (liabilities) / assets | | ( 1,458 ) | 1,432 | ( 931 ) | 1,240 |
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
| Non-current liabilities | 15 | | ( 67 ) | ( 104 ) | ( 67 ) |
| Provisions for liabilities and | | ( 104 ) | | | |
| charges | | | | | |
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
| Net (liabilities) / assets | | ( 71 ) | 1,907 | 1,715 | 3,524 |
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
| Shareholders' equity | 16 | 81 | 81 | 81 | 81 |
| Ordinary shares | 16 | 50 | 50 | 50 | 50 |
| Deferred shares | 17 | 7,435 | 7,435 | 7,435 | 7,435 |
| Share premium | 18 | 1,085 | 700 | 1,085 | 700 |
| Incentive Plan valuation | 19 | 8 | - | - | - |
| Foreign currency translation | 20 | ( 8,730 ) | ( 6,359 ) | ( 6,936 ) | ( 4,742 ) |
| Retained losses | | | | | |
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
| Total shareholders' (deficit) / | | ( 71 ) | 1,907 | 1,715 | 3,524 |
| equity | | | | | |
+------------------------------------+-------+-------------+--------------------------------------------------------+-------------+-------------+
+---------------------------+-----------+-----------+--------------------+-----------+-------------+---------------+
| Ludorum plc | UNAUDITED | UNAUDITED | UNAUDITED | UNAUDITED | UNAUDITED | UNAUDITED |
| Statement of changes in | Share | Share | Accumulated losses | Incentive | Foreign | Total |
| shareholders' equity | capital | premium | GBP000 | Option | currency | Shareholders' |
| 2008 | GBP000 | GBP000 | | Plan | translation | equity / |
| | | | | GBP000 | GBP000 | deficit |
| | | | | | | GBP000 |
+---------------------------+-----------+-----------+--------------------+-----------+-------------+---------------+
| At 1 January 2008 | 131 | 7,435 | ( 6,359 ) | 700 | - | 1,907 |
| Loss for the year | - | - | ( 2,371 ) | - | - | ( 2,371 ) |
| Change relating to | - | - | - | 385 | - | 385 |
| incentive option plan | - | - | - | | 8 | |
| Foreign exchange | | | | - | | 8 |
| differences | | | | | | |
+---------------------------+-----------+-----------+--------------------+-----------+-------------+---------------+
| At 31 December 2008 | 131 | 7,435 | ( | 1,085 | 8 | ( 71 ) |
| | | | 8,730 ) | | | |
+---------------------------+-----------+-----------+--------------------+-----------+-------------+---------------+
| 2007 | AUDITED | AUDITED | AUDITED | AUDITED | AUDITED | AUDITED |
| | Share | Share | Retained | Incentive | Foreign | Total |
| | capital | premium | earnings | Option | currency | shareholders' |
| | GBP000 | GBP000 | GBP000 | Plan | translation | equity |
| | | | | GBP000 | GBP000 | GBP000 |
+---------------------------+-----------+-----------+--------------------+-----------+-------------+---------------+
| At 1 January 2007 | 100 | 4,575 | ( 1,871 ) | 294 | - | 3,098 |
| Loss for the year | - | - | ( 4,488 ) | - | - | ( 4,488 ) |
| Charge relating to | - | - | - | 406 | - | 406 |
| incentive option plan | 31 | 3,069 | - | | - | 3,100 |
| New shares issued | - | ( 209 ) | - | - | - | ( 209 ) |
| Costs relating to the | | | | - | | |
| issue of shares | | | | | | |
| | | | | | | |
+---------------------------+-----------+-----------+--------------------+-----------+-------------+---------------+
| At 31 December 2007 | 131 | 7,435 | ( 6,359 | 700 | - | 1,907 |
| | | | ) | | | |
+---------------------------+-----------+-----------+--------------------+-----------+-------------+---------------+
+---------------------------------------+-------+-------------+-------------+-------------+-------------+
| Ludorum plc |Notes | UNAUDITED | AUDITED | UNAUDITED | AUDITED |
| Cash flow statements | | Group | Group | Company | Company |
| for the year ended 31 December 2008 | | for the | for the | for the | for the |
| | | year ended | year | year ended | year |
| | | 31 December | ended | 31 | ended |
| | | | 31 December | December | 31 |
| | | 2008 | | 2008 | December |
| | | GBP000 | 2007 | GBP000 | 2007 |
| | | | GBP000 | | GBP000 |
+---------------------------------------+-------+-------------+-------------+-------------+-------------+
| Cash flows from operating activities | 21 | ( 867 ) | ( 4,116 ) | ( 1,406 ) | ( 2,805 ) |
| Cash used in operations | | 29 | 79 | 29 | 79 |
| Interest received | | ( 8 ) | - | ( 7 ) | - |
| Interest paid | | - | ( 3 ) | - | - |
| Taxation paid | | | | | |
+---------------------------------------+-------+-------------+-------------+-------------+-------------+
| Net cash used in operating activities | | ( 846 ) | ( 4,040 ) | ( 1,384 ) | ( 2,726 ) |
+---------------------------------------+-------+-------------+-------------+-------------+-------------+
| Cash flows from investing activities | | - | - | - | ( 1,411 ) |
| Investment in subsidiaries | | - | - | 539 | - |
| Repayment of long term loan | | ( 16 ) | - | ( 1 ) | - |
| Purchase of property, plant and | | - | 3 | - | - |
| equipment | | ( 990 ) | | ( 990 ) | |
| Proceeds of disposal of property, | | - | ( 746 ) | - | ( 536 ) |
| plant and equipment | | | 134 | | - |
| Investment in intangible assets | | | | | |
| Proceeds of disposal of intangible | | | | | |
| assets | | | | | |
+---------------------------------------+-------+-------------+-------------+-------------+-------------+
| Net cash used in investing activities | | ( 1,006 ) | ( 609 ) | ( 452 ) | ( 1,947 ) |
+---------------------------------------+-------+-------------+-------------+-------------+-------------+
| Cash flows from financing activities | | - | 2,891 | - | 2,891 |
| Net proceeds from issue of share | | | | | |
| capital | | | | | |
+---------------------------------------+-------+-------------+-------------+-------------+-------------+
| Net cash generated from financing | 13 | - | 2,891 | - | 2,891 |
| activities | | ( 1,852 ) | ( 1,758 ) | ( 1,836 ) | ( 1,782 ) |
| Net decrease in cash and cash | | 1,712 | 3,470 | 1,684 | 3,466 |
| equivalents | | | | | |
| Cash and cash equivalents at 1 | | | | | |
| January 2008 | | | | | |
+---------------------------------------+-------+-------------+-------------+-------------+-------------+
| Cash and cash equivalents at 31 | 13 | ( 140 ) | 1,712 | ( 152 ) | 1,684 |
| December 2008 | | | | | |
+---------------------------------------+-------+-------------+-------------+-------------+-------------+
Ludorum plc
Notes to the preliminary results
for the year ended 31 December 2008
1. Accounting policies
The principal accounting policies adopted in the preparation of these
preliminary results are set out below. These policies have been consistently
applied to the whole period presented.
Basis of preparation
This announcement was approved by the Board of directors on 21 April 2009. The
preliminary results for the year ended 31 December 2008 are unaudited. The
financial information in this announcement does not constitute the Company's
statutory accounts for the year ended 31 December 2007 or 31 December 2008. The
financial information set out in the announcement has been prepared on the basis
of the accounting policies set out below. The financial information for the year
ended 31 December 2007 is derived from the statutory accounts for that year,
which have been delivered to the Registrar of Companies. The auditors reported
on those accounts and their report was unqualified.
Critical accounting estimates and judgements
The Directors consider that the key areas of judgement 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 preliminary results include the results of the Company and its
subsidiaries.
Foreign currency translation
1. Functional and presentation currency - Items included in the preliminary results
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 preliminary results 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 in the foreign currency
translation reserve.
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 currency for the Group is the US Dollar. The average rate
for the period against Sterling and the rate at 31 December 2008 for the US
Dollar were:
Average Rate at 31 December 2008
US Dollar 1.8528 1.4376
Discontinued operations
A discontinued operation is a component of an entity that either has been
disposed of, or that is held-for-sale, and
(1) represents a major line of business or geographical area of operations
(2) is part of a single co-ordinated plan to dispose of a separate major line of
business or geographical area of operations, or
(3) is a subsidiary acquired exclusively with a view to sale.
Investment in subsidiaries
Investments in subsidiaries are stated at cost less any provision for
impairment.
Property, plant & equipment
Property, plant and equipment comprise 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) Capitalised costs
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, from first
broadcast, on a straight line basis, over seven years, being its estimated
useful economic life. 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.
Trade receivables
Trade receivables are recognised initially at fair value, and subsequently
measured at amortised cost, using the effective interest method, less provision
for impairment.
Tax and deferred tax
Taxation is recognised on profits at the weighted-average rate of corporation
tax applicable to small companies of 20.75 per cent (2007: 19.75 per cent).
Deferred tax is provided, using the liability method, on all temporary
differences at the balance sheet date between the tax basses 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 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 share based payments to option holders 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 GBP1,500 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 - GBP1; 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 an 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.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for
the sale of goods and services in the ordinary course of the group's activities.
Revenue is shown net of value added tax and after eliminating sales within the
group.
The group derives its revenue from the exploitation of rights in programming.
1) Broadcast rights
Revenue from the sale of broadcast rights is recognised on the date of the first
broadcast in the relevant territory.
2) Home entertainment, consumer products and publishing licences
Advances from the sale of home entertainment, consumer products and publishing
licences are recognised on a straight line basis over the length of the licence
period. Any royalties subsequently payable to the group by licencees are
recognised as they arise.
2 Segmental reporting
+---------------------------------+--------------+--------------+--------------+
| The following table presents | UNAUDITED | UNAUDITED | UNAUDITED |
| information regarding the | UK | USA | Total |
| Group's geographical segments: | GBP000 | GBP000 | GBP000 |
| 2008 | | | |
+---------------------------------+--------------+--------------+--------------+
| Continuing operations | | 215 | 385 |
| Total segment revenue | 170 | ( 215 ) | ( 215 ) |
| less inter-segmental revenue | - | | |
+---------------------------------+--------------+--------------+--------------+
| Revenue | 170 | - | 170 |
| Operating (loss) / profit | ( 2,388 ) | 1 | ( 2,387 ) |
| Net finance income | 21 | - | 21 |
| Gross assets | 2,220 | 37 | 2,257 |
| Gross liabilities | 2,287 | 41 | 2,328 |
| 2007 | AUDITED | AUDITED | AUDITED |
| | UK | USA | Total |
| | GBP000 | GBP000 | GBP000 |
+---------------------------------+--------------+--------------+--------------+
| Continuing operations | - | 217 | 217 |
| Total segment revenue | - | ( 217 ) | ( 217 ) |
| less inter-segmental revenue | | | |
+---------------------------------+--------------+--------------+--------------+
| Revenue | - | - | - |
| Operating (loss) / profit | ( 1,696 ) | 14 | ( 1,682 ) |
| Net finance income | 79 | - | 79 |
| Gross assets | 2,582 | 21 | 2,603 |
| Gross liabilities | 630 | 22 | 652 |
| Discontinued operations | 15 | - | 15 |
| Revenue | ( 2,884 ) | - | ( 2,884 ) |
| Operating loss | 236 | - | 236 |
| Gross assets | 280 | - | 280 |
| Gross liabilities | | | |
| | | | |
+---------------------------------+--------------+--------------+--------------+
Other than property, plant and equipment in Ludorum Inc, with a net book value
at 31 December 2008 of GBP12,000, all capital expenditure, depreciation and
amortisation is within the UK.
3 Discontinued operations
Discontinued operations comprised the business of the acquisition and
exploitation of rights in Japanese anime which was operated by GONG Limited, a
group subsidiary. (In January 2008 GONG Limited changed its name to Ludorum
Enterprises Limited.) In 2007 it was decided to withdraw from this business and,
in December 2007, the anime assets were sold for Euro 190,000. The loss on the
sale of GBP51,000 is included below in administrative expenses in 2007.The loss
on discontinued operations also included the costs of aborted acquisitions and
transactions which were incurred by the Group in 2007 in respect of developing
the anime business, prior to the decision to withdraw from the business.
+------------------------------------------------------------+------------------+------------------+
| The loss on discontinued operations is analysed as | UNAUDITED | AUDITED |
| follows: | for the year | for the year |
| | ended | ended |
| | 31 December | 31 December |
| | 2008 | 2007 |
| | GBP000 | GBP000 |
+------------------------------------------------------------+------------------+------------------+
| Revenue | - | 15 |
| Cost of sales | - | ( 285 ) |
| Administrative expenses | - | ( 888 ) |
| Interest payable | - | - |
| Costs of aborted acquisitions and transactions | - | ( 1,726 ) |
| | - | |
+------------------------------------------------------------+------------------+------------------+
| Loss on discontinued operations | - | ( 2,884 ) |
+------------------------------------------------------------+------------------+------------------+
| The cash flows on discontinued operations are summarised | - | ( 2,803 ) |
| below: | - | ( 73 ) |
| Net cash used in operating activities | - | 1,282 |
| Net cash used in investing activities | UNAUDITED | AUDITED |
| Net cash generated from financing activities | for the year | for the year |
| 4 Loss for the year | ended | ended |
| | 31 December | 31 December |
| | 2008 | 2007 |
| | GBP000 | GBP000 |
+------------------------------------------------------------+------------------+------------------+
| The following items have been included in arriving at the | 1,260 | 1,585 |
| loss for the year: | 8 | 5 |
| Staff costs - see Note 6 | 49 | 73 |
| Depreciation of property, plant and equipment | 102 | 11 |
| Amortisation of intangible assets | - | 51 |
| Foreign exchange losses | 70 | 73 |
| Loss on disposal of intangible assets | | |
| Operating lease rentals - property, plant and equipment | | |
+------------------------------------------------------------+------------------+------------------+
+-----------------------------------------------------+---------------------+---------------------+
| 5 Auditors' remuneration | UNAUDITED | AUDITED |
| | for the year | for the year |
| | ended | ended |
| | 31 December | 31 December |
| | 2008 | 2007 |
| | GBP000 | GBP000 |
+-----------------------------------------------------+---------------------+---------------------+
| Audit services: | 50 | 37 |
| Fees payable to the Company's auditor for the | 2 | 2 |
| audit of parent Company and consolidated accounts | - | 636 |
| Fees payable to the Company's auditor for the | 23 | 49 |
| audit of subsidiary companies | | |
| Non-audit services: | | |
| As reporting accountant on acquisitions | | |
| All other services | | |
+-----------------------------------------------------+---------------------+---------------------+
| | 75 | 724 |
+-----------------------------------------------------+---------------------+---------------------+
+------------------------+--------------+-------------+-+--------------+-+-------------+
| 6 Employees and | UNAUDITED | AUDITED | UNAUDITED | AUDITED |
| directors | Group | Group | Company | Company |
| Staff costs for the | for the year | for the | for the year | for the |
| group during the year | ended | year | ended | year |
| | 31 December | ended | 31 December | ended |
| | 2008 | 31 December | 2008 | 31 December |
| | GBP000 | 2007 | GBP000 | 2007 |
| | | GBP000 | | GBP000 |
+------------------------+--------------+-------------+------------------+-------------+
| Wages and salaries | 713 | 914 | 390 | 380 |
| Social security costs | 63 | 162 | 35 | 39 |
| Other pension costs | 62 | 64 | 42 | 50 |
+------------------------+--------------+-------------+------------------+-------------+
| Costs attributable to | 838 | 1,140 | 467 | 469 |
| the Incentive Option | 422 | 445 | 399 | 421 |
| Plan | | | | |
| | | | | |
+------------------------+--------------+-------------+------------------+-------------+
| | 1,260 | 1,585 | 866 | 890 |
+------------------------+--------------+-------------+------------------+-------------+
| Average number of | 10 | 9 | 4 | 4 |
| employees (including | | | | |
| executive directors) | | | | |
+------------------------+--------------+-------------+------------------+-------------+
| | UNAUDITED | AUDITED |
| | Group and | Group and |
| | Company | Company |
| | for the year | for the year |
| | ended | ended |
| | 31 December | 31 December |
| | 2008 | 2007 |
| | GBP000 | GBP000 |
+-------------------------------------------------------+--------------+---------------+
| Aggregate directors' emoluments | 400 | 527 |
| Emoluments of highest paid director | 165 | 164 |
| | | |
+-------------------------------------------------------+--------------+---------------+
| 7 Taxation | UNAUDITED | AUDITED |
| | for the year | for the year |
| | ended | ended |
| | 31 December | 31 December |
| | 2008 | 2007 |
| | GBP000 | GBP000 |
+-------------------------------------------------------+--------------+---------------+
| Current tax | | - |
| UK taxation | | 4 |
| Overseas taxation | - | ( 3 ) |
| Adjustment to prior years | 5 | |
| | - | |
+-------------------------------------------------------+--------------+---------------+
| Deferred tax | 5 | 1 |
| | - | - |
+-------------------------------------------------------+--------------+---------------+
| Taxation | 5 | 1 |
+-------------------------------------------------------+--------------+---------------+
| The tax assessed for the year differs from the UK | UNAUDITED | AUDITED |
| Small Company's tax rate in the UK. The differences | for the year | for the year |
| are explained below: | ended | ended |
| | 31 December | 31 December |
| | 2008 | 2007 |
| | GBP000 | GBP000 |
+-------------------------------------------------------+--------------+---------------+
| Loss before taxation on continuing operations | ( 2, 366 ) | ( 1,603 ) |
| Loss on discontinued operations | - | ( 2,884 ) |
+-------------------------------------------------------+--------------+---------------+
| Total loss before taxation | ( 2,366 ) | ( 4,487 ) |
| Loss before taxation multiplied by the | | |
| weighted-average rate | | |
+-------------------------------------------------------+--------------+---------------+
| of UK corporation tax applicable to small companies | ( 491 ) | ( 886 ) |
| of 20.75% (2007: 19.75%) | | |
+-------------------------------------------------------+--------------+---------------+
| Effects of: | | |
+-------------------------------------------------------+--------------+---------------+
| Overseas taxation | 5 | 1 |
+-------------------------------------------------------+--------------+---------------+
| Expenses not deductible for tax purposes | 20 | 341 |
+-------------------------------------------------------+--------------+---------------+
| Losses available to carry forward and other timing | 471 | 545 |
| differences | | |
+-------------------------------------------------------+--------------+---------------+
| | | |
+-------------------------------------------------------+--------------+---------------+
| Taxation | 5 | 1 |
+------------------------+--------------+-------------+-+--------------+-+-------------+
The unprovided deferred tax asset at 31 December 2008 is estimated to be
GBP1,369,000 (2007: GBP898,000) and is in respect of trading losses incurred and
other timing differences.
8 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 year. Because basic EPS results in a loss per share the
diluted EPS is calculated using the undilutive weighted average number of
shares.
+----------------------------+----------------------+----------------+--------------+
| Basic and diluted EPS | UNAUDITED | UNAUDITED | UNAUDITED |
| | Loss attributable | Weighted | Per-share |
| | to ordinary | average | amount |
| | shareholders GBP000 | number of | pence |
| | | shares | |
+----------------------------+----------------------+----------------+--------------+
| 2008 | ( 2,371 ) | 8,100,001 | ( |
| Loss per share on | - | 8,100,001 | 29.3p |
| continuing operations | ( 2,371 ) | 8,100,001 | ) |
| Loss per share on | AUDITED | AUDITED | - |
| discontinued | ( 1,604 ) | 5,516,667 | ( |
| operations | ( 2,884 ) | 5,516,667 | 29.3p |
| Loss per share | ( 4,488 ) | 5,516,667 | ) |
| 2007 | | | AUDITED |
| Loss per share on | | | ( 29.1p |
| continuing operations | | | ) |
| Loss per share on | | | ( 52.3p |
| discontinued | | | ) |
| operations | | | ( 81.4p |
| Loss per share | | | ) |
+----------------------------+----------------------+----------------+--------------+
| 9 Investments | UNAUDITED | AUDITED |
| Company | 31 December | 31 December |
| | 2008 | 2007 |
| | GBP000 | GBP000 |
+---------------------------------------------------+----------------+--------------+
| At 1 January | 1,810 | 399 |
| Additions | - | 1,411 |
| Repayments | (539 ) | - |
+---------------------------------------------------+----------------+--------------+
| At 31 December | 1,271 | 1,810 |
+----------------------------+----------------------+----------------+--------------+
The investments represent long term interest free loans made to subsidiary
companies.
The following subsidiaries are directly owned by Ludorum plc:
+--------------------+---------------+---------------+------------+----------+--------------+
| Subsidiary | Date of | Country of | Types of | Holding | Activity |
| Ludorum Inc. | incorporation | incorporation | shares | 100% | Service |
| Ludorum | 12 April 2006 | USA | Ordinary | 100% | company |
| Enterprises | 17 May 2006 | England & | Ordinary | | Rights |
| Limited | | Wales | | | exploitation |
+--------------------+---------------+---------------+------------+----------+--------------+
In January 2008, GONG Limited changed its name to Ludorum Enterprises Limited.
10 Property, plant and equipment
+--------------------------------------------------+--------------+---------------+
| | Group | Company |
| | Office | Office |
| | Equipment | Equipment |
| | 2008 | 2008 |
| | GBP000 | GBP000 |
+--------------------------------------------------+--------------+---------------+
| Cost | 18 | 11 |
| At 1 January 2007 - audited | - | - |
| Additions | ( 4 ) | - |
| Disposals | | |
+--------------------------------------------------+--------------+---------------+
| At 31 December 2007 - audited | 14 | 11 |
| Additions | 16 | 1 |
+--------------------------------------------------+--------------+---------------+
| At 31 December 2008 -unaudited | 30 | 12 |
| Accumulated depreciation | 4 | 3 |
| At 1 January 2007 - audited | 5 | 3 |
| Charge for the year | ( 1 ) | - |
| Released on disposal | | |
+--------------------------------------------------+--------------+---------------+
| At 31 December 2007 - audited | 8 | 6 |
| Charge for the year | 8 | 4 |
+--------------------------------------------------+--------------+---------------+
| At 31 December 2008 - unaudited | 16 | 10 |
| Net book value | 6 | 5 |
| At 31 December 2007 - audited | | |
+--------------------------------------------------+--------------+---------------+
| At 31 December 2008 - unaudited | 14 | 2 |
+--------------------------------------------------+--------------+---------------+
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.
11 Intangible assets
+-----------------------+---+-------------+-----------------+--------------+--------------+
| Group | Capitalised | Regionalisation | Acquired | Total |
| | costs | costs | rights | GBP000 |
| | GBP000 | GBP000 | GBP000 | |
+---------------------------+-------------+-----------------+--------------+--------------+
| Cost | - | 16 | 48 | 64 |
| At 1 January | 536 | - | 210 | 746 |
| 2007 - audited | - | ( 16 ) | ( 258 ) | ( 274 ) |
| Additions | | | | |
| Disposals | | | | |
+---------------------------+-------------+-----------------+--------------+--------------+
| At 31 December | 536 | - | - | 536 |
| 2007 - audited | 990 | - | - | 990 |
| Additions | | | | |
+---------------------------+-------------+-----------------+--------------+--------------+
| At 31 December | 1,526 | - | - | 1,526 |
| 2008 - unaudited | - | 6 | 10 | 16 |
| Accumulated amortisation | - | 3 | 70 | 73 |
| At 1 January | - | ( 9 ) | ( 80 ) | ( 89 ) |
| 2007 - audited | | | | |
| Charge for the year | | | | |
| Released on disposal | | | | |
+---------------------------+-------------+-----------------+--------------+--------------+
| At 31 December | - | - | - | - |
| 2007 - audited | 49 | - | - | 49 |
| Charge for the year | | | | |
+---------------------------+-------------+-----------------+--------------+--------------+
| At 31 December | 49 | - | - | 49 |
| 2008 - unaudited | | | | |
| Net book value | | | | |
+---------------------------+-------------+-----------------+--------------+--------------+
| At 31 December | 536 | - | - | 536 |
| 2007 - audited | | | | |
+---------------------------+-------------+-----------------+--------------+--------------+
| At 31 December | 1,477 | - | - | 1,477 |
| 2008 - unaudited | | | | |
+---------------------------+-------------+-----------------+--------------+--------------+
| Company | Capitalised |
| | Costs |
| | GBP000 |
+--------------------------------------------------------------------------+--------------+
| Cost | - |
| At 1 January 2007 - audited | 536 |
| Additions | |
+--------------------------------------------------------------------------+--------------+
| At 1 December 2007 - audited | 536 |
| Additions | 990 |
+--------------------------------------------------------------------------+--------------+
| At 31 December 2008 - unaudited | 1,526 |
| Accumulated amortisation | - |
| At 1 January 2007 - audited | - |
| Charge for the year | |
+--------------------------------------------------------------------------+--------------+
| At 31 December 2007 - audited | - |
| Charge for the year | 49 |
+--------------------------------------------------------------------------+--------------+
| At 31 December 2008 - unaudited | 49 |
| Net book value | |
+--------------------------------------------------------------------------+--------------+
| At 31 December 2007 - audited | 536 |
+--------------------------------------------------------------------------+--------------+
| At 31 December 2008 - unaudited | 1,477 |
+--------------------------------------------------------------------------+--------------+
| | |
+--------------------------------------------------------------------------+--------------+
| 12 Trade and | UNAUDITED | AUDITED | UNAUDITED | AUDITED |
| other receivables | Group | Group | Company | Company |
| | 2008 | 2007 | 2008 | 2007 |
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-----------------------+-----------------+-----------------+--------------+--------------+
| | 139 | 110 | - | - |
| Amounts falling due | 173 | 70 | 173 | 54 |
| within one year: | - | 59 | - | 59 |
| Trade receivables | 69 | 104 | - | - |
| Prepayments and | 339 | 204 | 319 | 197 |
| accrued income | | | | |
| UK VAT recoverable | | | | |
| French TVA | | | | |
| recoverable | | | | |
| Other receivables | | | | |
+-----------------------+-----------------+-----------------+--------------+--------------+
| At 31 December | 720 | 547 | 492 | 310 |
+-----------------------+---+-------------+-----------------+--------------+--------------+
The carrying value of trade and other receivables is considered to be equal to
the fair value.
+---------------------------------+---------------+-------------+--------------+------------+
| 13 Cash and cash equivalents | UNAUDITED | AUDITED | UNAUDITED | AUDITED |
| | Group | Group | Company | Company |
| | 2008 | 2007 | 2008 | 2007 |
| | GBP000 | GBP000 | GBP000 | GBP000 |
+---------------------------------+---------------+-------------+--------------+------------+
| Cash and cash equivalents | 37 | 21 | 34 | - |
| Cash at bank and in hand | 9 | 1,729 | - | 1,722 |
| Short-term bank deposits | | | | |
+---------------------------------+---------------+-------------+--------------+------------+
| At 31 December | 46 | 1,750 | 34 | 1,722 |
+---------------------------------+---------------+-------------+--------------+------------+
| |
+---------------------------------+---------------+-------------+--------------+------------+
Short-term bank deposits are invested with banks and earn interest at prevailing
short-term deposit rates.
The fair value of cash and cash deposits is the same as the carrying value.
Cash, cash equivalents and bank overdrafts include the following for the
purposes of the cash flow statement:
+--------------------------------------------+-----------+-----------+-----------+-----------+
| | UNAUDITED | AUDITED | UNAUDITED | AUDITED |
| | Group | Group | Company | Company |
| | 2008 | 2007 | 2008 | 2007 |
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------------------+-----------+-----------+-----------+-----------+
| Cash and cash equivalents | 46 | 1,750 | 34 | 1,722 |
| Bank overdraft included in trade and other | ( 186 ) | ( 38 ) | ( 186 ) | ( 38 ) |
| liabilities | | | | |
| | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+
| | ( 140 ) | 1,712 | ( 152 ) | 1,684 |
+--------------------------------------------+-----------+-----------+-----------+-----------+
| 14 Trade and other liabilities | UNAUDITED | AUDITED | UNAUDITED | AUDITED |
| | Group | Group | Company | Company |
| | 2008 | 2007 | 2008 | 2007 |
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------------------+-----------+-----------+-----------+-----------+
| Bank overdraft | 186 | 38 | 186 | 38 |
| Trade payable | 649 | 199 | 627 | 170 |
| Payable to subsidiary company | - | - | 7 | 128 |
| Overseas tax payable | 3 | 1 | - | - |
| Social security and other taxes | 54 | 118 | 44 | 17 |
| Deferred income | 833 | 32 | 141 | 32 |
| Accruals | 239 | 373 | 228 | 316 |
| Unpaid directors' remuneration | 141 | 51 | 141 | 51 |
| Other liabilities | 119 | 53 | 83 | 40 |
| | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+
| At 31 December | 2,224 | 865 | 1,457 | 792 |
+--------------------------------------------+-----------+-----------+-----------+-----------+
| The carrying value of trade and other | UNAUDITED | AUDITED | UNAUDITED | AUDITED |
| liabilities is considered to be equal to | Group | Group | Company | Company |
| the fair value. | Social | Social | Social | Social |
| 15 Provisions for liabilities and charges | Security | Security | Security | Security |
| | Costs | Costs | Costs | Costs |
| | 2008 | 2007 | 2008 | 2007 |
| | GBP000 | GBP000 | GBP000 | GBP000 |
+--------------------------------------------+-----------+-----------+-----------+-----------+
| At 1 January | 67 | 28 | 67 | 28 |
| Charge | 37 | 39 | 37 | 39 |
| | | | | |
+--------------------------------------------+-----------+-----------+-----------+-----------+
| At 31 December | 104 | 67 | 104 | 67 |
+--------------------------------------------+-----------+-----------+-----------+-----------+
| |
+--------------------------------------------------------------------------------------------+
| |
+--------------------------------------------+-----------+-----------+-----------+-----------+
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
+-------------------------------------+--------------+---------------+-------------+---------------+
| 16 Called up share capital | UNAUDITED | AUDITED | UNAUDITED | AUDITED |
| Group and company | 2008 | 2007 | 2008 | 2007 |
| Authorised | Number | Number | GBP000 | GBP000 |
| Ordinary shares of 1 pence each | 15,000,000 | 15,000,000 | 150 | 150 |
| Deferred shares of 99 pence each | 50,001 | 50,001 | 50 | 50 |
| | | | | |
+-------------------------------------+--------------+---------------+-------------+---------------+
| At 31 December | | | 200 | 200 |
+-------------------------------------+--------------+---------------+-------------+---------------+
| Issued and fully-paid | 8,100,001 | 8,100,001 | 81 | 81 |
| Ordinary shares of 1 pence each | 50,001 | 50,001 | 50 | 50 |
| Deferred shares of 99 pence each | | | | |
+-------------------------------------+--------------+---------------+-------------+---------------+
| At 31 December | | | 131 | 131 |
+-------------------------------------+--------------+---------------+-------------+---------------+
| On 6 November 2007, 3,100,000 ordinary shares of 1 pence each | UNAUDITED | AUDITED |
| were issued at a price of GBP1 per share. | 2008 | 2007 |
| 17 Share premium account | GBP000 | GBP000 |
| Group and company | | |
+--------------------------------------------------------------------+-------------+---------------+
| At 1 January | 7,435 | 4,575 |
| Premium on shares issued during the year | - | 3,069 |
| Costs relating to the issue of shares | - | ( 209 ) |
| | | |
+--------------------------------------------------------------------+-------------+---------------+
| At 31 December | 7,435 | 7,435 |
+--------------------------------------------------------------------+-------------+---------------+
| 18 Incentive Plan valuation reserve | UNAUDITED | UNAUDITED |
| Group and company | Incentive | Incentive |
| | Plan | Plan |
| | valuation | valuation |
| | reserve | reserve |
| | 2008 | 2007 |
| | GBP000 | GBP000 |
+--------------------------------------------------------------------+-------------+---------------+
| At 1 January | 700 | 294 |
| Charge relating to the Incentive Option Plan | 385 | 406 |
| | | |
+--------------------------------------------------------------------+-------------+---------------+
| At 31 December | 1,085 | 700 |
+--------------------------------------------------------------------+-------------+---------------+
| 19 Foreign currency translation | UNAUDITED | UNAUDITED |
| Group | Foreign | Foreign |
| | currency | currency |
| | translation | translation |
| | | |
| | 2008 | 2007 |
| | GBP000 | GBP000 |
+--------------------------------------------------------------------+-------------+---------------+
| At 1 January | - | - |
| Translation differences arising | 8 | - |
| | | |
+--------------------------------------------------------------------+-------------+---------------+
| At 31 December | 8 | - |
+--------------------------------------------------------------------+-------------+---------------+
| 20 Retained losses | UNAUDITED | AUDITED | UNAUDITED | AUDITED |
| | Group | Group | Company | Company |
| | 2008 | 2007 | 2008 | 2007 |
| | GBP000 | GBP000 | GBP000 | GBP000 |
+-------------------------------------+--------------+---------------+-------------+---------------+
| At 1 January | ( 6,359 ) | ( 1,871 ) | ( 4,742 ) | ( 1,400 ) |
| Loss for the year | ( 2,371 ) | ( 4,488 ) | ( 2,194 ) | ( 3,342 ) |
| | | | | |
+-------------------------------------+--------------+---------------+-------------+---------------+
| At 31 December | ( 8,730 ) | ( 6,359 ) | ( 6,936 ) | ( 4,742 ) |
+-------------------------------------+--------------+---------------+-------------+---------------+
| 21 Cash flow from operating | UNAUDITED | AUDITED | UNAUDITED | AUDITED |
| activities | Group | Group | Company | Company |
| | for the | for the | for the | for the |
| | year ended | year | year ended | year |
| | 31 December | ended | 31 December | ended |
| | 2008 | 31 December | 2008 | 31 |
| | GBP000 | 2007 | GBP000 | December |
| | | GBP000 | | 2007 |
| | | | | GBP000 |
+-------------------------------------+--------------+---------------+-------------+---------------+
| Continuing operations | ( 2,371 ) | ( 1,603 ) | ( 2,194 ) | ( 3,342 ) |
| Loss before taxation | 8 | - | 7 | - |
| Adjustments for: | ( 29 ) | ( 79 ) | ( 29 ) | ( 79 ) |
| Interest payable | 8 | 4 | 4 | 3 |
| Interest receivable | 49 | - | 49 | - |
| Depreciation of property, plant and | 385 | 406 | 385 | 406 |
| equipment | 37 | 39 | 37 | 39 |
| Amortisation of intangible assets | ( 173 ) | ( 287 ) | ( 182 ) | ( 284 ) |
| Charge relating to the incentive | 1,219 | 207 | 517 | 452 |
| option plan | | | | |
| Increase in provisions | | | | |
| Changes in working capital: | | | | |
| Increase in trade and other | | | | |
| receivables | | | | |
| Increase in payables | | | | |
| | | | | |
+-------------------------------------+--------------+---------------+-------------+---------------+
| Cash used in continuing operations | ( 867 ) | ( 1,313 ) | ( 1,406 ) | ( 2,805 ) |
+-------------------------------------+--------------+---------------+-------------+---------------+
| Discontinued operations | - | ( 2,884 ) | - | - |
| Loss on discontinued operations | - | 1 | - | - |
| Depreciation of property, plant and | - | 73 | - | - |
| equipment | - | 51 | - | - |
| Amortisation of intangible assets | - | ( 201 ) | - | - |
| Loss on disposal of intangible | - | 157 | - | - |
| assets | | | | |
| Increase in trade and other | | | | |
| receivables | | | | |
| Increase in payables | | | | |
| | | | | |
+-------------------------------------+--------------+---------------+-------------+---------------+
| Cash used in discontinued | - | ( 2,803 ) | - | - |
| operations | | | | |
+-------------------------------------+--------------+---------------+-------------+---------------+
| | | | | |
+-------------------------------------+--------------+---------------+-------------+---------------+
| Total cash used in operations | ( 867) | ( 4,116 ) | ( 1,406 ) | ( 2,805 ) |
+-------------------------------------+--------------+---------------+-------------+---------------+
| | | | | |
+-------------------------------------+--------------+---------------+-------------+---------------+
| | | | | |
+-------------------------------------+--------------+---------------+-------------+---------------+
| |
+-------------------------------------+--------------+---------------+-------------+---------------+
22 Operating lease commitments
+---------------------------------------------------------------+-------------+------------+
| Group and Company | UNAUDITED | AUDITED |
+---------------------------------------------------------------+-------------+------------+
| | 2008 | 2007 |
+---------------------------------------------------------------+-------------+------------+
| | GBP000 | GBP000 |
+---------------------------------------------------------------+-------------+------------+
| Commitments under non-cancellable operating leases expiring: | | |
+---------------------------------------------------------------+-------------+------------+
| Within one year | 6 | 5 |
+---------------------------------------------------------------+-------------+------------+
The Company has entered into a short-term non-cancellable operating lease on its
head office in Chiswick, London.
23 Related party transactions
During the year, a group company rented an office from a company controlled by a
director of the Company. The rent paid during the year was GBP11,000 (2007:
GBP6,000).
Included in other liabilities at the year end is GBP124,908 owed to Richard
Rothkopf, Robert Lawes and Charles Caminada, directors of the Company, in
respect of unpaid remuneration (2007: GBP44,908). A further GBP10,240 has been
included in other liabilities in respect of the employer's National Insurance
payable on this.
24 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 $6.6 million.
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 for which the
Company is committed to pay a total of RMB 18.9 million (GBP1.24 million) in
instalments over the period of production. As at 31 December 2008, GBP519,000
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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