RNS Number:9998E
Medal Entertainment & Media PLC
12 December 2002
Strictly embargoed until: 07.00, 12 December 2002
Interim Results
Announcing results for Medal Entertainment and Media plc ("MEM") for the six
months ended 30 September 2002, Brook Land, Chairman, commented "Given that the
acquisition of Leisureview and Fountain Television were only completed on 30
August 2002, the Group's active operational history is very short. The Board
firmly believes that both companies are proving to be a valuable base upon which
to build a larger group actively participating in the creation, exploitation and
ownership of audio-visual copyrights."
Key points for the six months to 30 September 2002:
* Acquisition of Leisureview Ltd, a specialist video/DVD publisher, for a
maximum consideration of #1 million
* Acquisition of Fountain Television Ltd, the largest fully-equipped
independent TV studio in the UK, for an aggregate consideration of #6.9
million
* Issue in August of 4,857,857 new ordinary shares at 70 pence raising
#2.9 million after costs to fund the acquisitions and to provide
working capital
* Group turnover of #0.635 million
* Loss before interest and taxation of #0.168 million and loss per share
of 4.1 pence
Brook Land added "The Board continues to seek acquisition opportunities that
will complement the two existing businesses. In particular, acquisitions of
content for DVD distribution will be targeted over the coming months."
For further information, please contact:
Steve Ayres, Chief Executive John West / Rosie Brown
MEM plc Tavistock Communications Limited
Tel: 020 8900 5890 Tel: 020 7600 2288
CHAIRMAN'S STATEMENT
Medal Entertainment & Media Plc ("MEM" or "the Company") floated in November
2001 with the purpose of making acquisitions in the field of media and
entertainment. The Company did not trade from the date of its incorporation on
7 March 2001 until 30 August 2002, when the acquisitions of Leisureview Limited
and Fountain Television Limited were completed. In spite of difficult market
conditions, these acquisitions were funded in part via a placing, which raised
#2.9 million after costs.
This is MEM's first set of results since completion of the acquisitions and
includes only one month of trading from the acquired companies. As stated in
the circular to shareholders dated 2 August 2002, the Directors believe that
both companies represent an attractive base from which to develop a group
operating principally in the media rights and publishing sectors.
Acquisitions
Leisureview Limited is a specialist video/DVD publisher, established in 1986,
with a successful track record in marketing a range of products direct to the
consumer and to trade customers.
The Company was acquired and paid for via a #0.85 million cash consideration,
with a maximum further #0.15 million payable depending on the Company's creditor
position on the completion date of 30 August 2002.
Fountain Television Limited is a television studio based in Wembley, Middlesex.
Fountain provides studio facilities to leading broadcasters and production
companies and at 13,200 sq ft is the largest, fully equipped independent TV
studio in the UK.
The company was acquired for an aggregate consideration of #6.898 million. This
was settled by way of #1.5 million through the issue of 2,142,857 shares in MEM
and the balance in cash.
The goodwill arising on both acquisitions, amounting to #0.793 million, will be
written off over 20 years in accordance with the Group's accounting policy.
Fund Raising and Bank Finance
In August 2002, the Company issued a total of 4,857,857 new ordinary shares for
cash at a price of 70p per share, raising #2.9 million after deducting issue
costs of #0.452 million. In addition, during the period, the Company secured
facilities and loans amounting to #6.35 million from Barclays Bank plc, of which
#3.6 million was drawn down. These funds were applied partly to provide
financing for the two acquisitions and also to provide working capital for the
Group.
Financial Results
The unaudited results for this period incorporate six months' expenses for MEM
and one month's trading for Leisureview and Fountain. There are no prior period
comparative figures for the Group.
Group turnover for the period was #0.635 million, returning a gross margin of
#0.396 million (62%) and a loss before interest and taxation of #0.168 million.
The loss per share was 4.1p.
The net cash inflow from operating activities for the period was #0.244 million
and the net cash movement for the period was #0.208 million outflow. At 30
September 2002 the Company had cash in hand of #1.04 million.
As stated in our circular to Shareholders dated 2 August 2002, there will be no
interim dividend.
Warrants
The Directors believe that the potential dilutory effect of the outstanding
warrants serves to depress the Company's share price and may have an impact on
the Company's ability to raise further finance or make acquisitions in pursuit
of its strategy.
The Directors are actively considering alternatives to address the dilutive
effect of the warrants in a way that is equitable to both shareholders and
warrantholders. The Directors intend shortly to publish their proposals in this
respect.
Outlook
Trading since 30 September 2002 has been good. Fountain is currently performing
strongly and has good indications of future bookings. Over the past year, the
studio has attracted a number of major new clients and future bookings indicate
that these new relationships are being consolidated.
Leisureview has also seen a buoyant start to the second half of the financial
year and, as planned, has been active in securing rights for future
exploitation. These include an exclusive licence covering the extensive
National Geographic library for home video/DVD in the UK. This gives
Leisureview the right to release existing and future productions for a period of
up to 6 years. Given that Leisureview has a proven track record in direct
marketing, to which National Geographic products are particularly suited, this
licence has considerable potential for the Group.
The Board expects to be in a position to announce a number of other licencing
and production deals shortly.
The UK DVD market has continued to grow strongly in 2002. In the 11 months to
November, year-on-year DVD growth has been 122% with the overall video market
for VHS and DVD showing an aggregate 32% growth. As the migration from VHS to
DVD continues, the Board considers the scope for future growth to be excellent.
Given that the acquisitions of Leisureview and Fountain were only completed on
30 August 2002, the Group's active operational history is very short. The Board
firmly believes that both companies are proving to be a valuable base upon which
to build a larger group actively participating in the creation, exploitation and
ownership of audio-visual copyrights.
The Board continues to seek acquisition opportunities that will complement the
two existing businesses. In particular, acquisitions of content for DVD
distribution will be targeted over the coming months.
Brook Land
Chairman
11 December 2002
MEDAL ENTERTAINMENT & MEDIA PLC
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months ended 30 September 2002
6 months ended Financial period
30 September from 7 March
2002 2001 to
31 March
2002*
Note #'000 #'000
Turnover 635 -
Operating loss (168) (139)
Interest payable (20) -
Interest receivable 18 18
Loss on ordinary activities (170) (121)
before taxation
Taxation on loss on ordinary - -
activities
Retained loss for the financial (170) (121)
period
Basic and diluted loss per share 2 (4.1)p (14.5)p
All turnover is derived from businesses acquired during the period. There
were no other gains or losses recognised in the period other than disclosed
above.
* The prior period information has been extracted from the audited financial
statements.
UNAUDITED CONSOLIDATED BALANCE SHEET
As at 30 September 2002
30 September 2002 31 March 2002*
Note #'000 #'000
Fixed assets
Tangible assets 6,750 1
Intangible assets 1,828 -
Goodwill 1,232 -
Film rights 596 -
8,578 1
Current assets
Stock and WIP 447 -
Debtors 1,534 106
Cash at bank and in hand 1,041 1,249
3,022 1,355
Creditors: amounts falling due (3,081) (119)
within one year
Net current (liabilities) / (59) 1,236
assets
Total assets less current 8,519 1,237
liabilities
Creditors: amounts falling due (3,003) -
after one year
Net assets 5,516 1,237
Capital and reserves
Called up share capital 914 214
Share premium account 4,893 1,144
Profit and loss account (291) (121)
Equity shareholders' funds 3 5,516 1,237
Net asset value per share 60.3p 57.7p
Ordinary shares in issue ('000) 9,144 2,143
* The prior period information has been extracted from the audited financial
statements.
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 September 2002
Notes 6 months Financial period
ended from
30 September 7 March 2001
2002 to 31 March
2002*
#'000 #'000
Net cash inflow / (outflow) from 4 244 (126)
operating activities
Returns on investments and
servicing of finance
Interest paid (20) -
Interest received 18 18
Net cash (outflow) / inflow from (2) 18
returns on investments
and servicing of finance
Taxation
UK corporation tax paid - -
Net cash flow from taxation - -
Capital expenditure and financial
investment
Payments to acquire tangible (9) (1)
fixed assets
Payments to acquire intangible (2) -
fixed assets
Net cash outflow from capital (11) (1)
expenditure
and financial investment
Acquisitions and disposals
Payments to acquire subsidiary 7b (6,782) -
undertakings
Net cash outflow from acquisition (6,782) -
and disposals
Net cash outflow before financing (6,551) (109)
Financing
Issue of share capital 2,949 1,408
Redemption of redeemable shares - (50)
New external borrowings 3,399 -
Capital element of hire purchase (5) -
and finance lease rental payments
Net cash inflow from financing 6,343 1,358
(Decrease) / increase in cash in 5, 6 (208) 1,249
the period
* The prior period information has been extracted from the audited financial
statements.
NOTES TO THE INTERIM REPORT
Six months ended 30 September 2002
1 The financial information relating to the six month period ended 30
September 2002 does not constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985, and has not been audited nor reviewed
by Deloitte & Touche. The interim results have been prepared on the basis of
accounting policies applied to the previous period results. The financial
information relating to the period from 7 March 2001 (date of incorporation)
to 31 March 2002 is extracted from the audited accounts of the Company,
which have been filed with the Registrar of Companies and on which the
auditors issued an unqualified opinion. Financial information relating to
the prior year comparative period from 7 March 2001 (date of incorporation)
to 30 September 2001 has not been shown due to no activity occurring until
November 2001.
2 The basic and diluted loss per share is based on the Group loss of #170,000
(31 March 2002: loss of #121,000) and weighted average number of ordinary
shares in issue during the six months ended 30 September 2002 of 4,103,293
(31 March 2002: 833,670).
FRS 14 requires presentation of the diluted loss per share when a company
could be called upon to issue shares that would decrease net profit or
increase net loss per share. For a loss making company with outstanding share
options and warrants, net loss per share would only be increased by the
exercise of out-of-the-money options and warrants. Since it seems
inappropriate to assume that option and warrantholders would act
irrationally, no adjustment has been made to diluted loss per share for
out-of-the-money share options and warrants. In addition, as there are no
other diluting future share issues, diluted loss per share equals basic loss
per share.
3 Reconciliation of movements in shareholders' funds
Unaudited Financial period from
6 months ended 7 March 2001
30 September 2002 to 31 March 2002*
#'000 #'000
Retained loss for the financial (170) (121)
period
Shares redeemed - (50)
Capital subscribed net of 4,449 1,408
expenses
4,279 1,237
Opening equity shareholders' 1,237 -
funds
Closing equity shareholders' 5,516 1,237
funds
* The prior period information has been extracted from the audited financial
statements.
4 Reconciliation of operating profit to cash inflow from operating activities
Unaudited Financial period
6 months ended from
7 March 2001 to
30 September 2002 31 March 2002*
#'000 #'000
Operating loss (168) (139)
Amortisation 39 -
Depreciation 53 -
Increase in stocks (10) -
Increase in trade and other debtors, (76) (106)
and prepayments
Increase in creditors, accruals and 406 119
provisions
Net cash inflow / (outflow) from 244 (126)
operating activities
* The prior period information has been extracted from the audited financial
statements.
5 Reconciliation of net cash flow to movement in net debt
Unaudited Financial period
6 months ended from
7 March 2001
30 September 2002 to 31 March 2002*
#'000 #'000
(Decrease) / Increase in cash for (208) 1,249
period
Cash inflow from increase in debt (3,595) -
and lease financing
Change in net debt resulting from (3,803) 1,249
cash flows
Acquisition of subsidiary finance (45) -
leases
Net funds brought forward 1,249 -
Net funds carried forward (2,599) 1,249
6 Analysis of net debt
Unaudited
At Cash Other non-cash At
1 April 2002 flows changes 30 September 2002
#'000 #'000 #'000 #'000
Cash 1,249 (208) - 1,041
Debt due - 5 (445) (440)
within one year
Debt due after - (3,600) 400 (3,200)
one year
Total 1,249 (3,803) (45) (2,599)
* The prior period information has been extracted from the audited financial
statements.
7a Acquisitions
Fountain Television Limited Leisureview Limited
Net Fair Net Accounting Fair
book value Fair book policy value Fair
value adjust- value value adjust- adjust- value Total
ment ments ment
#'000 #'000 #'000 #'000 #'000 #'000 #'000 #'000
Net
assets
acquired:
Tangible 5,438 1,284 6,722 77 - - 77 6,799
fixed
assets
Intangible - - - 855 (227) - 628 628
fixed
assets
Stocks 49 - 49 444 - (55) 389 438
Debtors 443 - 443 1,065 - (187) 878 1,321
Cash at 12 - 12 1 - - 1 13
bank and
in hand
Creditors (568) - (568)(1,283) - (348)(1,631) (2,199)
Shareholders
loan
account (5,327) -(5,327) - - - - (5,327)
HP and (37) - (37) (8) - - (8) (45)
finance
leases
Fair 10 1,284 1,294 1,151 (227) (590) 334 1,628
value of
assets and
liabilities
Goodwill * 277 516 793
Purchase 1,571 850 2,421
price
Satisfied
by:
Net cash 71 850 921
Shares 1,500 - 1,500
allotted
1,571 850 2,421
The subsidiary undertakings acquired during the period contributed #203,000
(Fountain Television Limited: #212,000 inflow; Leisureview Limited: #9,000
outflow) to the Group's net operating cash flows.
* Goodwill arising in the period is being amortised over 20 years in
accordance with the Group's accounting policy.
b Payments to acquire subsidiary undertakings
Unaudited
6 months
ended
September 2002
#'000
Cash paid on cost of acquisitions (1,023)
Settlement of shareholders loan (5,327)
Cash on hand at acquisitions 13
Acquisition costs (445)
Net cash outflow (6,782)
Actual cash paid at the time of acquisition was #1,023,000. Subsequent to
period-end, #102,000 was received from the former shareholder in accordance with
the net current asset adjustment as stated in the Sale and Purchase Agreement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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