TIDMLUD
RNS Number : 9026Z
Ludorum PLC
30 September 2009
30 September 2009
LUDORUM PLC INTERIM RESULTS
Ludorum plc, the AIM-listed media investment company, today announces its
results for the half year ended 30 June 2009.
Highlights
* First turnover generated in the period of GBP940,000 (2008: GBP0) Operating loss
in the period of 982,000k (2008: GBP1.1m)
* Chuggington has now been licensed for broadcast to 165 countries with
significant ratings success in initial broadcast markets of the UK, Germany,
Australia, Canada and France
* A multi-rights agreement was signed in April 2009 with Fuji Networks in Japan
with broadcast commencing July, 2009
* Broadcast agreement reached with The Disney Channel in June 2009 with
anticipated US broadcast scheduled for early 2010
* Over 75 consumer products and home entertainment license agreements have been
concluded throughout the world.
* Fifty-two episodes completed; agreement entered into in February, 2009 to
produce a further 26 X 10" episodes which have been pre-sold to the BBC
* Very successful initial DVD releases in the UK and Australia
* Placing to raise GBP440,000 successfully concluded in May 2009
Rob Lawes, Chief Executive Officer said:
"We are delighted with the progress we have continued to make in the first six
months of 2009. We have been able to build a formidable global broadcast base
across 165 countries with broadcast partners of the highest calibre as evidenced
by the two deals recently concluded with Fuji Networks in Japan and Disney
Channel in the US. We have now also concluded over 75 consumer products and home
entertainment licenses in territories throughout the world. We believe that our
first property, Chuggington, is now well positioned in the marketplace and will
deliver real value for our shareholders."
Chief Executive's Review
Overview
Ludorum plc is an AIM-listed media investment company. The Group is focused on
creating or acquiring and subsequently exploiting the rights for children's
entertainment properties through both conventional media and new media channels.
The Company has made substantial progress with securing broadcast in nearly all
major markets through-out the world. We are now at the stage where we are
concluding key home entertainment, consumer products, publishing and agency
agreements to help support and maximise the popularity of Chuggington. In
addition, we are continuing to invest significantly in new episodes of
Chuggington, internet website, interstitials, trademark protection, our internal
infrastructure and in marketing and associated branding materials.
We are greatly encouraged by Chuggington's early success, and have confidence
that our first property will create material value for our shareholders.
Chuggington
Chuggington is a computer generated 3D series of 78 x 10" minute episodes, 39
shorter mini-episodes and a fully immersive interactive website. 52 episodes and
26 mini-episodes are complete, and the others are currently in production. 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.
Broadcast
We have concluded broadcast agreements with leading broadcasters in their
respective territories for broadcast into 165 countries. During the period under
review we concluded two significant agreements: one with Disney Channel in North
America, where we are creating an American voiced version of Chuggington for
broadcast beginning early 2010, and the second an agreement with Fuji Networks
in Japan (their first western pre-school programming acquisition in more than 15
years) where broadcast commenced July 2009. In addition to major terrestrial
broadcasters in key territories, we have also concluded agreements with Disney
channels in Latin America, Far East, Italy and Scandinavia.
Chuggington launched on Cbeebies channel in the UK in January 2009 and has
established a consistent status as 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 in
France, where Chuggington premiered on TF1, the dominant commercial broadcaster,
on 1 April 2009 and has also enjoyed strong ratings. The property is scheduled
to launch in other key territories around the world during the remainder of 2009
and 2010.
Consumer Products, Home Entertainment and Publishing
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), Roadshow (Australia) and
Daewon in Korea. 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. That release has gone on to sell well over 40,000 units. In
Australia, the first Chuggington DVD has also been released to great success
becoming the number one children's title in that market.
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 is well advanced with its product plans with a
substantial line of new and innovative toys with both on and offline
applications. First products will start to roll-out in Spring 2010. Learning
Curve contributes to the animated production costs and will participate in the
net profits of the property.
In addition to the Learning Curve master toy licence, the Company has entered
into a significant number of consumer products agreements with leading
organisations. For example, in the UK, there are now a total of 27 licence
agreements in place covering a broad range of product categories including
clothing, bedding, games and puzzles, bicycles, celebration cakes and greetings
cards. Product under these arrangements will also start to roll-out in early
2010.
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. The
first books went into the UK market place with Marks and Spencer in July 2009
and have had a very encouraging start.
The Company has appointed highly regarded agents in several international
markets to represent certain categories of our business. To-date we have
concluded more than 50 license agreements for territories outside the UK.
Production
The first series of 52 episodes was fully completed in January 2009. In February
2009 the Company entered into a new agreement with its production partner in
Shanghai to produce a further 26 episodes which will be delivered in the Spring
of 2010. The Company has pre-sold the second series to the BBC.
Financial Review
Ludorum generated revenues of GBP0.94m for the first six months of 2009 (2008:
GBP0). This comprised income from broadcast and consumer products agreements.
Broadcast revenues represented 85% of turnover with consumer products being the
balance. The UK represented 24% of revenues, Europe 42%, Asia and Australasia
29% and Rest of World 5%.
Total administrative costs, excluding costs attributed to the Incentive Option
Plan, were GBP1.17m, an increase of GBP0.32m over the period to 30 June 2008.
The increase mainly relates to exchange rate costs of GBP0.07m (2008: GBP0.02m),
increased market and marketing costs of GBP0.11m and increased staff costs over
the period of GBP0.15m due to increased headcount.
The operating loss for the six month period fell to GBP0.98m (GBP1.07m in the
period to 30 June 2008).
As at the 30 June the Company had cash and cash equivalents of GBP0.24m and
borrowings of GBP0.91m (2008: GBP0.57m of cash resources). In April 2008 the
Company obtained banking facilities of GBP1.5m comprising a variable interest
rate overdraft facility and a fixed interest rate loan facility.
Ludorum plc
Consolidated Statement of Comprehensive Income for the six months ended 30 June
2009
+---------------------------------------------+-------+-------------+-------------+
| |Notes | Six months | Six months |
| | | ended | ended |
| | | 30 June | 30 June |
| | | 2009 | 2008 |
| | | GBP000 | GBP000 |
+---------------------------------------------+-------+-------------+-------------+
| Continuing operations | | | |
+---------------------------------------------+-------+-------------+-------------+
| Revenue | 2 | 940 | - |
+---------------------------------------------+-------+-------------+-------------+
| Cost of sales | | (596) | - |
+---------------------------------------------+-------+-------------+-------------+
| Gross profit | | 344 | - |
+---------------------------------------------+-------+-------------+-------------+
| Costs attributable to the incentive option | | (154) | (210) |
| plan | | | |
+---------------------------------------------+-------+-------------+-------------+
| Other administrative expenses | | (1,172) | (857) |
+---------------------------------------------+-------+-------------+-------------+
| Total administrative expenses | | (1,326) | (1,067) |
+---------------------------------------------+-------+-------------+-------------+
| Operating loss | | (982) | (1,067) |
+---------------------------------------------+-------+-------------+-------------+
| Finance cost - bank interest | | (5) | (4) |
+---------------------------------------------+-------+-------------+-------------+
| Finance income - bank interest | | - | 26 |
+---------------------------------------------+-------+-------------+-------------+
| Loss before taxation | | (987) | (1,045) |
+---------------------------------------------+-------+-------------+-------------+
| Taxation | | (2) | (3) |
+---------------------------------------------+-------+-------------+-------------+
| Loss for the period | | (985) | (1,048) |
+---------------------------------------------+-------+-------------+-------------+
| Other comprehensive income: foreign | | (10) | - |
| exchange differences | | | |
+---------------------------------------------+-------+-------------+-------------+
| Total comprehensive income for the period | | (995) | (1,048) |
+---------------------------------------------+-------+-------------+-------------+
| Loss per share (basic and diluted) | | (12.0p) | (12.9p) |
+---------------------------------------------+-------+-------------+-------------+
Ludorum plc
Consolidated balance sheet as at 30 June 2009
+---------------------------+-------+--------------+----------------+------------+
| | Notes | 30 June | 31 December | 30 June |
| | | 2009 | 2008 | 2008 |
+---------------------------+-------+--------------+----------------+------------+
| | | GBP000 | GBP000 | GBP000 |
+---------------------------+-------+--------------+----------------+------------+
| Assets | | | | |
+---------------------------+-------+--------------+----------------+------------+
| Non -current assets | | | | |
+---------------------------+-------+--------------+----------------+------------+
| Property, plant and | | 49 | 14 | 14 |
| equipment | | | | |
+---------------------------+-------+--------------+----------------+------------+
| Intangible assets | 3 | 1,671 | 1,477 | 965 |
+---------------------------+-------+--------------+----------------+------------+
| | | 1,720 | 1,491 | 979 |
+---------------------------+-------+--------------+----------------+------------+
| Current assets | | | | |
+---------------------------+-------+--------------+----------------+------------+
| Trade and other | | 920 | 720 | 459 |
| receivables | | | | |
+---------------------------+-------+--------------+----------------+------------+
| Cash and cash | | 244 | 46 | 565 |
| equivalents | | | | |
+---------------------------+-------+--------------+----------------+------------+
| | | 1,164 | 766 | 1,024 |
+---------------------------+-------+--------------+----------------+------------+
| Liabilities | | | | |
+---------------------------+-------+--------------+----------------+------------+
| Current Liabilities | | | | |
+---------------------------+-------+--------------+----------------+------------+
| Income tax payable | | (7) | (3) | (4) |
+---------------------------+-------+--------------+----------------+------------+
| Trade and other | | (3,231) | (2,221) | (862) |
| liabilities | | | | |
+---------------------------+-------+--------------+----------------+------------+
| | | (3,238) | (2,224) | (866) |
+---------------------------+-------+--------------+----------------+------------+
| Net current (liabilities) | | (2,074) | (1,458) | 158 |
| / assets | | | | |
+---------------------------+-------+--------------+----------------+------------+
| Non - current liabilities | | | | |
+---------------------------+-------+--------------+----------------+------------+
| Provisions | | (116) | (104) | (85) |
+---------------------------+-------+--------------+----------------+------------+
| Net (liabilities) / | | (470) | (71) | 1,051 |
| assets | | | | |
+---------------------------+-------+--------------+----------------+------------+
| Shareholders' equity | | | | |
+---------------------------+-------+--------------+----------------+------------+
| Ordinary shares | | 84 | 81 | 81 |
+---------------------------+-------+--------------+----------------+------------+
| Deferred shares | | 50 | 50 | 50 |
+---------------------------+-------+--------------+----------------+------------+
| Share premium | | 7,886 | 7,435 | 7,435 |
+---------------------------+-------+--------------+----------------+------------+
| Incentive Plan valuation | | 1,227 | 1,085 | 892 |
+---------------------------+-------+--------------+----------------+------------+
| Foreign currency | | (2) | 8 | - |
| translation | | | | |
+---------------------------+-------+--------------+----------------+------------+
| Accumulated losses | | (9,715) | (8,730) | (7,407) |
+---------------------------+-------+--------------+----------------+------------+
| Total shareholders' | | (470) | (71) | 1,051 |
| equity | | | | |
+---------------------------+-------+--------------+----------------+------------+
Ludorum plc
Statement of changes in shareholders' equity
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| | Share | Share | Accumulated | Incentive | Foreign | Total |
| | Capital | Premium | losses | Plan | currency | Shareholder |
| | | | | Valuation | translation | (deficit)/ |
| | | | | | | Equity |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| 30 June 2009 | June | June | June 09 | June 09 | June 09 | June 09 |
| | 09 | 09 | GBP000 | GBP000 | GBP000 | GBP000 |
| | GBP000 | GBP000 | | | | |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| At 1 January 2009 | 131 | 7,435 | (8,730) | 1,085 | 8 | (71) |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| Loss for the period | - | - | (985) | - | | (985) |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| Other comprehensive | - | - | - | - | (10) | (10) |
| income: | | | | | | |
| Foreign exchange | | | | | | |
| differences | | | | | | |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| Total comprehensive | - | - | (985) | - | (10) | (995) |
| income | | | | | | |
| for the period to 30 | | | | | | |
| June 2009 | | | | | | |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| Transactions with | | | | | | |
| owners | | | | | | |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| Charge relating to | - | - | - | 142 | - | 142 |
| incentive option plan | | | | | | |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| New shares issued | 3 | 451 | - | - | - | 454 |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| At 30 June 2009 | 134 | 7,886 | (9,715) | 1,227 | (2) | (470) |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| | | | | | | |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| | Share | Share | Accumulated | Incentive | Foreign | Total |
| | Capital | Premium | losses | Plan | currency | Shareholder |
| | | | | Valuation | translation | (deficit)/ |
| | | | | | | Equity |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| 30 June 2008 | June | June | June 08 | June 08 | June 08 | June 08 |
| | 08 | 08 | GBP000 | GBP000 | GBP000 | GBP000 |
| | GBP000 | GBP000 | | | | |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| At 1 January2008 | 131 | 7,435 | (6,359) | 700 | - | 1,907 |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| Loss for the period | - | - | (1,048) | - | - | (1,048) |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| Total comprehensive | - | - | (1,048) | - | - | (1,048) |
| income for the period | | | | | | |
| to 30 June 2008 | | | | | | |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| Transactions with | | | | | | |
| owners | | | | | | |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| Charge relating to | | | | 192 | - | 192 |
| incentive option plan | - | - | - | | | |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
| At 30 June 2008 | 131 | 7,435 | (7,407) | 892 | - | 1,051 |
+-----------------------+---------+---------+-------------+-----------+-------------+-------------+
Ludorum plc
Consolidated cash flow statement for the six months ended 30 June 2009
+----------------------------------------------+---------------+----------------+
| | Six months | Six months |
| | ended | ended |
| | 30 June 2009 | 30 June 2008 |
| | GBP000 | GBP000 |
+----------------------------------------------+---------------+----------------+
| Cash flows from operating activities | | |
+----------------------------------------------+---------------+----------------+
| Cash used in operations | (618) | (768) |
+----------------------------------------------+---------------+----------------+
| Interest received | - | 26 |
+----------------------------------------------+---------------+----------------+
| Interest paid | (6) | (4) |
+----------------------------------------------+---------------+----------------+
| Taxation paid | - | - |
+----------------------------------------------+---------------+----------------+
| Net cash used in operating activities | (624) | (746) |
+----------------------------------------------+---------------+----------------+
| Cash flows from investing activities | | |
+----------------------------------------------+---------------+----------------+
| Purchase of property, plant and equipment | (37) | (11) |
+----------------------------------------------+---------------+----------------+
| Investment in intangible assets | (320) | (429) |
+----------------------------------------------+---------------+----------------+
| Net cash used in investing activities | (357) | (440) |
+----------------------------------------------+---------------+----------------+
| Cash flows from financing activities | | |
+----------------------------------------------+---------------+----------------+
| Net proceeds from issue of share capital | 454 | - |
+----------------------------------------------+---------------+----------------+
| Increase in loans | 661 | - |
+----------------------------------------------+---------------+----------------+
| Net cash generated from financing activities | 1,115 | - |
+----------------------------------------------+---------------+----------------+
| Net increase/(decrease) in cash and cash | 133 | (1,185) |
| equivalents | | |
+----------------------------------------------+---------------+----------------+
| Cash, cash equivalents and bank overdraft at | (140) | 1,750 |
| 1 January | | |
+----------------------------------------------+---------------+----------------+
| Cash, cash equivalents and bank overdraft | (7) | 565 |
| at 30 June | | |
+----------------------------------------------+---------------+----------------+
Ludorum plc
Notes to the consolidated interim financial statements for the six months ended
30 June 2009
1.Accounting policies
General Information
The company is a public limited company incorporated and domiciled in the United
Kingdom. The address of its registered office is 2B River Court, 27 Brewhouse
Lane, Putney Wharf, London SW15 2JX. The registered number is 5595899. This
company is listed on AIM.
The condensed consolidated interim financial information was approved for issue
on 30 September 2009.
Basis of preparation
The condensed consolidated interim financial information should be read in
conjunction with the annual financial statements for the year ended 31 December
2008, which have been prepared in accordance with IFRSs.
The condensed consolidated interim financial information do not constitute
statutory accounts. Statutory accounts for the year ended 31 December 2008 have
been filed with Companies House. The auditors gave an unqualified opinion on
those accounts.
Accounting policies
The accounting policies applied are consistent with those of the annual
financial statements for the year ended 31 December 2008, as described in those
financial statements, except that the following standards and amendments to
existing standards which are effective from 1 January 2009 have been adopted by
the Group:
IAS 1 (Revised). This standard deals with presentation of financial statements
and requires the presentation of a new separate Statement of Comprehensive
Income.
IAS 23 (Amendment), 'Borrowing costs'. This standard requires an entity to
capitalise borrowing costs directly attributable to the acquisition,
construction or production of a qualifying asset (one that takes a substantial
period of time to get ready for use or sale) as part of the cost of that asset.
IFRS8, 'Operating segments'. This standard replaces IAS14, 'Segment reporting'.
The new standard requires a 'management approach' under which segment
information is presented on the same basis as that used for internal reporting.
Accordingly, full segmental analysis will be prepared in accordance with IFRS8
in the financial statements for 2009.
2. Segmental analysis
The group currently has one operating segment, the development and exploitation
of its rights in Chuggington.
+----------------------------------------------+---------------+----------------+
| | Six months | Six months |
| | ended | ended |
| | 30 June 2009 | 30 June 2008 |
| | GBP000 | GBP000 |
+----------------------------------------------+---------------+----------------+
| Revenue by geographical area | | |
+----------------------------------------------+---------------+----------------+
| United Kingdom | 225 | - |
+----------------------------------------------+---------------+----------------+
| Europe | 391 | - |
+----------------------------------------------+---------------+----------------+
| Asia & Australasia | 274 | - |
+----------------------------------------------+---------------+----------------+
| Americas | 50 | - |
+----------------------------------------------+---------------+----------------+
| | 940 | - |
+----------------------------------------------+---------------+----------------+
3. Intangible assets
+--------------------------------------------------------+---------------------+
| | Capitalised |
| | development |
+--------------------------------------------------------+---------------------+
| | GBP000 |
+--------------------------------------------------------+---------------------+
| 30 June 2009 | |
+--------------------------------------------------------+---------------------+
| | |
+--------------------------------------------------------+---------------------+
| Cost | |
+--------------------------------------------------------+---------------------+
| At 1 January 2009 | 1,526 |
+--------------------------------------------------------+---------------------+
| Additions | 320 |
+--------------------------------------------------------+---------------------+
| At 30 June 2009 | 1,846 |
+--------------------------------------------------------+---------------------+
| | |
+--------------------------------------------------------+---------------------+
| Accumulated amortisation | |
+--------------------------------------------------------+---------------------+
| At 1 January 2009 | 49 |
+--------------------------------------------------------+---------------------+
| Charge for the period | 126 |
+--------------------------------------------------------+---------------------+
| At 30 June 2009 | 175 |
+--------------------------------------------------------+---------------------+
| | |
+--------------------------------------------------------+---------------------+
| Net book value at 30 June 2009 | 1,671 |
+--------------------------------------------------------+---------------------+
| | |
+--------------------------------------------------------+---------------------+
+--------------------------------------------------------+---------------------+
| | Capitalised |
| | development |
+--------------------------------------------------------+---------------------+
| | GBP000 |
+--------------------------------------------------------+---------------------+
| 30 June 2008 | |
+--------------------------------------------------------+---------------------+
| | |
+--------------------------------------------------------+---------------------+
| Cost | |
+--------------------------------------------------------+---------------------+
| At 1 January 2008 | 536 |
+--------------------------------------------------------+---------------------+
| Additions | 429 |
+--------------------------------------------------------+---------------------+
| At 30 June 2008 | 965 |
+--------------------------------------------------------+---------------------+
| | |
+--------------------------------------------------------+---------------------+
| Accumulated amortisation | |
+--------------------------------------------------------+---------------------+
| At 1 January 2008 | - |
+--------------------------------------------------------+---------------------+
| Charge for the period | - |
+--------------------------------------------------------+---------------------+
| At 30 June 2008 | - |
+--------------------------------------------------------+---------------------+
| | |
+--------------------------------------------------------+---------------------+
| Net book value at 30 June 2008 | 965 |
+--------------------------------------------------------+---------------------+
4. Borrowings
The following borrowings are included in trade and other liabilities:
+--------------------------------+-------------+-------------+------------+
| | 30 June | 31 December | 30 June |
| | 2009 | | 2008 |
| | | 2008 | |
+--------------------------------+-------------+-------------+------------+
| | GBP000 | GBP000 | GBP000 |
+--------------------------------+-------------+-------------+------------+
| | | | |
+--------------------------------+-------------+-------------+------------+
| Bank overdraft | 251 | 186 | - |
+--------------------------------+-------------+-------------+------------+
| Fixed interest rate loan | 661 | - | - |
+--------------------------------+-------------+-------------+------------+
| | 912 | 186 | - |
+--------------------------------+-------------+-------------+------------+
| | | | |
+--------------------------------+-------------+-------------+------------+
| Undrawn borrowing facilities | | | |
+--------------------------------+-------------+-------------+------------+
| Bank overdraft | 49 | 114 | - |
+--------------------------------+-------------+-------------+------------+
| Fixed interest rate loan | 539 | 1200 | - |
+--------------------------------+-------------+-------------+------------+
| | 588 | 1314 | - |
+--------------------------------+-------------+-------------+------------+
In April 2008 the company obtained banking facilities comprising a variable
interest rate overdraft facility of GBP300,000 and a 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 has been
utilised from November 2008. The overdraft facility is scheduled to be reviewed
in November 2009. The loan facility was first drawn down in March 2009 and is
for a fixed term of two years.
5. Share capital
In April 2009 the company placed 324,000 new ordinary shares of 1p each at
GBP1.40 per ordinary share. The total proceeds from the share issue was
GBP454,000.
In February 2009 the company implemented a share option scheme for the benefit
of group employees, excluding directors. The company issued share options in
respect of 94,000 ordinary shares at an exercise price of GBP1.015. The options
can be exercised after three years and lapse, if not exercised, after ten years.
15,000 share options were cancelled on the departure of an employee. There were
79,000 share options in issue at 30 June 2009.
6. Related party transactions
During the period, Ludorum Inc, a group company, rented an office from a company
controlled by Richard Rothkopf, a director of the company. The rent payable
during the period was GBP4,600 (30 June 2008: GBP5,750).
Included in trade and other liabilities at 30 June 2009 is GBPnil in respect of
unpaid remuneration owed to directors of the company (30 June 2008: GBP95,908,
31 December 2008: GBP124,908). A further GBPnil has been included in trade and
other liabilities in respect of the employer's National Insurance payable on
this remuneration (30 June 2008: GBP9,588, 31 December 2008: GBP10,240).
7. Commitments
In 2007 the company entered into an agreement with a toy manufacturer under the
terms of which the toy manufacturer agreed to 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 was $6.3 million (GBP3.15 million). Production of the first 52 episodes
was completed in early 2009. The company and the toy manufacturer have now
agreed to jointly fund, on the same terms as the first series, the production of
a second series of 26 episodes of Chuggington. The budget for the second series
is $3.5 million (GBP2.1 million). It is expected that all the episodes in the
second series will be completed by early 2010.
In 2007, the company entered into an agreement with Shanghai, Motion Magic
Digital Entertainment Inc ("Motion Magic") under the terms which Motion Magic
provided animation and editing services for the production of Chuggington. Under
the terms of the agreement, Motion Magic was to deliver 52 episodes for which
the company was committed to pay a total of RMB 18.9 million (GBP1.38 million)
in instalments over the period of production. As at 30 June 2009 the company had
fully discharged its obligation to Motion Magic. As at 30 June 2008 the company
had paid RMB 8.75 million (GBP617,000) and a further RMB 10.15 million
(GBP763,000) remained outstanding. As at 31 December 2008 RMB 5.1 million
(GBP519,000) remained outstanding.
In 2009, the company entered into a further agreement with Motion Magic under
the terms of which Motion Magic is to provide animation and editing services for
the production of a second series of 26 episodes of Chuggington. The company is
committed to pay between RMB 10.3 million and RMB 10.9 million (between
GBP910,000 and GBP960,000.) As at 30 June 2009, the company had paid RMB 1
million (GBP92,000).
Under the terms of the agreement with the toy manufacturer described above, 50%
of the amount paid and payable to Motion Magic has been or will be refunded to
the company by the toy manufacturer.
8. Post balance sheet events
Following approval given at the company's Annual General Meeting on 24 July
2009, the company has withdrawn its Incentive Option Plan and all the
participants in the Plan have renounced their interests in it. With the approval
of the Annual General Meeting, the company has replaced the Incentive Option
Plan with a Share Ownership Agreement whereby the company issued
936,000 ordinary shares to an Employee Benefit Trust ("EBT"). The shares are
jointly owned by the EBT and the participants in the previous Incentive Option
Plan. Participants hold the shares in the same proportion as their interest in
the previous Incentive Option Plan.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR EAKNNALSNEFE
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