Final Results
June 23 2003 - 3:01AM
UK Regulatory
RNS Number:6210M
Medal Entertainment & Media PLC
23 June 2003
Strictly embargoed until: 07.00, 23 June 2003
MEM PLC PRELIMINARY RESULTS
FOR THE YEAR ENDED 31 MARCH 2003
Announcing results for Medal Entertainment & Media plc ("MEM") for the year
ended 31 March 2003, Brook Land, Chairman, commented: "The Company is pleased
with the progress made since the IPO and believes that the acquisition of both
Leisureview and Fountain forms a valuable base upon which to build a larger
group engaged in the creation and exploitation of audio visual copyrights."
Key Points:
* Short operational history - only seven months of trading
* Acquisitions of Leisureview Ltd and Fountain Television Ltd completed 30
August 2002
* Successful Placing at time of acquisitions
* Acquisitions of content for DVD/Video distribution (Lizzie McGuire and
Carlton)
* Group turnover #6.6m
* Healthy gross margin: #4.1m (62%)
* Profit (before interest and taxation) of #0.7m
* Earnings per share of 5.44p
Brook Land added "Given the difficult year for equity markets as a whole and the
media sector in particular, MEM's overall financial and share price performance
has been extremely credible. The Board will continue to develop and expand the
existing businesses as well as seeking complementary acquisition opportunities.
Accordingly the Board views the future with confidence."
For further information, please contact:
Steve Ayres, Chief Executive John West / Rosie Brown
MEM plc Tavistock Communications Limited
Tel: 020 8427 2277 Tel: 020 7600 2288
CHAIRMAN'S STATEMENT
Medal Entertainment & Media Plc ("MEM" or "the Company") effected an IPO in
November 2001 with the stated aim of making acquisitions in the fields 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 for an aggregate
consideration of #7.8 million. The Company raised #2.7 million (net) by the
issue of 4,857,857 new Ordinary Shares and in addition issued 2,142,857 new
Ordinary Shares to one of the vendors. The balance was settled in cash. This
is, therefore, MEM's first year-end results since completion of the acquisitions
and includes only seven months of trading of the acquired companies. I am
pleased to be able update shareholders on the progress the Company has made.
Financial Overview
The audited results for the period ended 31 March 2003 incorporate twelve
months' expenses for MEM and seven months' trading for Leisureview and Fountain.
There are no prior period comparative figures for the Group.
Group turnover for the period was #6.6 million, returning a gross margin of #4.1
million (62%) and a profit before interest and taxation of #0.73 million and a
profit before tax of #0.61 million. Earnings per share were 5.44p. As
anticipated in the prospectus, the directors do not recommend the payment of a
dividend.
Operating Review
The Company is pleased with the progress made since the IPO and believes that
the acquisition of both Leisureview and Fountain will prove to be a valuable
base upon which to build a larger group engaged in the creation and exploitation
of audio visual copyrights.
Leisureview Ltd
Since completion of the acquisition of Leisureview, MEM's video distribution
arm, the company has been active in growing its library of titles. A number of
important rights agreements have been secured with major broadcasters, rights
owners and producers. These include exclusive deals with Carlton Home
Entertainment, National Geographic and Egmont Telescreen. In addition there
have been a significant number of new programme licences with broadcasters and
producers, including the BBC, Channel 4 and Target Entertainment.
During the period Leisureview also acquired the exclusive video and DVD rights
to the hit US TV show Lizzie McGuire produced by Disney, for all territories
outside the USA, for a period of five years. The Leisureview catalogue already
includes titles such as Inspector Morse, Thunderbirds, National Geographic as
well as approximately 4,000 other titles.
Whilst the original core business of Leisureview was marketing direct to the
consumer these new rights deals should enhance and grow that activity and also,
importantly, involve growing levels of sales to the retail trade.
Fountain Television Ltd
Fountain, the UK's largest fully equipped independent TV studio, traded well
during the period. The Board is pleased to see that existing customers are
bringing back both long established and new shows and that many of the new
clients using the studio are being retained. This trend looks set to continue
for the coming trading period, with strong orders already placed for the Summer
and Autumn periods.
Fountain continued to strengthen its outstanding independent production client
base and during the period four shows produced at the studios were nominated for
BAFTA Awards: "Test the Nation" (Talent TV); "The Kumars at No 42" (Hat Trick
Productions); "Pop Idol" (19 TV/Thames) and "Bremner, Bird and Fortune" (Vera
Productions). The number of live shows recorded at the facility increased with
productions including "Winning Lines" (Celador), "Record of the Year" (Granada)
and "Test the Nation" (Talent TV). A number of pilot shows were also recorded
at Fountain, which may produce future new series for the studio.
Warrants
The Board had considered that for some time the potential dilutory effect of the
Warrants was an impediment to the funding of further acquisitions. Therefore,
on 5 March 2003, at separate general meetings of shareholders and warrantholders
the amendment of the terms of the Warrants was approved. As a result 7,343,310
Warrants were excercised resulting in the issue of 1,468,662 new Ordinary Shares
which raised #146,866 for the Company. The new Ordinary Shares have been
admitted to trading on AIM and all outstanding Warrants have been cancelled.
This was effected with no reduction in the share price.
Outlook
Overall trading since 31 March 2003 has been in line with expectations. The UK
video and DVD market continues to show growth and for the year to December 2002
the overall video market grew by 26% (source BVA). In the five months to May
2003 that growth continued with the market year-on-year increasing by 33%
(source BVA). This is fuelled by increased penetration of DVD players in UK
households. As the migration from VHS to DVD continues, the Board considers the
future prospects for the Company to be excellent. Leisureview has seen a solid
start to the new financial year and continues to be active in securing rights
for future releases. Marketing plans for the all-important Christmas period are
well underway.
Fountain already has excellent forward bookings for the current year and expects
to perform strongly in 2003/04. In its tenth year at Wembley, Fountain is
confident in its industry standing and its competitive ability to gain major
shows. The Autumn and Winter schedules at Fountain indicate a very busy time.
The Board believes that the trend towards independent production is increasing
and with its excellent facilities and 13,000 sq. ft, Fountain is increasingly
becoming the studio of choice.
The executive management have completed a review of the two businesses since
their acquisition and have significantly improved operating procedures,
including investing in new systems. They have also completed management
restructuring at the operating level and made a number of senior management
appointments at Leisureview to ensure that significant scalability is in place
for anticipated further growth.
Given the difficult year for equity markets as a whole and the media sector in
particular, the overall financial and share price performance has been extremely
credible and I would like to thank all our employees for their hard work. Our
stated strategy is to seek significant growth within the Company and we now have
a solid base from which to progress. The Board will continue to develop and
expand the existing businesses as well as seeking complementary acquisition
opportunities. Accordingly the Board views the future with confidence.
Brook Land
Chairman
23 June 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2003
Year ended Period from 7
31 March March 2001 to 31
2003 March 2002
#000 #000
Turnover - acquisitions 6,562 -
Cost of sales (2,464) -
Gross profit 4,098 -
Other operating expenses (net) (3,364) (139)
Operating profit/(loss)
Existing operations (150) (139)
Acquisitions 884 -
Continuing operations 734 (139)
Interest receivable 21 18
Interest payable and similar charges (150) -
Profit/(loss) on ordinary activities before taxation 605 (121)
Taxation on profit/(loss) from ordinary activities (191) -
Profit/(loss) on ordinary activities after
taxation and retained for the year 414 (121)
Pence Pence
Earnings/(loss) per share
Basic 5.44 (14.50)
Diluted 5.44 (14.50)
CONSOLIDATED BALANCE SHEET AT 31 MARCH 2003
2003 2002
#000 #000 #000 #000
Fixed assets
Intangible assets 1,389 -
Tangible assets 6,686 1
8,075 1
Current assets
Stocks 669 -
Debtors
- due within one year 2,664 106
- due after more than one year 174 -
Cash at bank and in hand 208 1,249
3,715 1,355
Creditors: amounts falling due within
one year (2,804) (119)
Net current assets 911 1,236
Total assets less current liabilities 8,986 1,237
Creditors: amounts falling due after more
than one year (2,918) -
Net assets 6,068 1,237
Capital and reserves
Called up share capital 914 214
Share premium account 4,861 1,144
Profit and loss account 293 (121)
Equity shareholders' funds 6,068 1,237
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 MARCH 2003
2003 2002
#000 #000 #000 #000
Net cash inflow/(outflow) from operating
activities 260 (127)
Returns on investments and
servicing of finance
Interest received 21 18
Interest paid (119) -
Bank loan arrangement fees (29) -
Interest element of finance lease and
hire purchase rental payments (2) -
Net cash (outflow)/inflow from returns
on investment and servicing of finance (129) 18
Taxation
UK corporation tax paid - -
Capital expenditure and financial
investment
Purchase of tangible fixed assets (70) (1)
Purchase of intangible fixed assets (369)
Sale of tangible fixed assets 8 -
Net cash outflow from capital expenditure
and financial investment (431) (1)
Acquisitions and disposals
Purchase of subsidiary undertaking (6,678) -
Cash acquired with subsidiaries 13 -
Overdraft acquired with subsidiaries (342) -
Net cash outflow from acquisitions
and disposals (7,007) -
Cash outflow before management of
liquid resources and financing (7,307) (110)
Financing
Issue of ordinary shares 3,400 1,550
Share issue costs (483) (141)
Capital element of lease purchase rental
payments (51) -
Redemption of redeemable shares - (50)
Bank loans advanced 3,600 -
Bank loans repaid (200) -
Net cash inflow from financing 6,266 1,359
(Decrease)/increase in cash in the year (1,041) 1,249
NOTES TO THE PRELIMINARY STATEMENT
1. The financial information set out above does not constitute
the Group's statutory accounts for the years ended 31 March 2003 or 2002, but is
derived from those accounts. Statutory accounts for 2002 have been delivered to
the Registrar of Companies and those for 2003 will be delivered following the
Company's Annual General Meeting. The auditors have reported on those accounts;
their reports were unqualified and did not contain statements under s237(2) or
(3) Companies Act 1985.
2. The Corporation tax charge for the year is #191,000 (2001 #nil) which
comprises #70,000 in respect of the current period plus #121,000 in respect of
the utilisation of deferred tax assets recognised in relation to accumulated tax
losses in Fountain at the date of acquisition. Subject to the agreement of the
Inland Revenue at 31 March 2003 the Group has taxation losses with a gross value
of approximately #936,000 for offset against future trading profits, #310,000 of
which have been recognised as deferred tax assets on the basis of the Directors
current assessment of their likely recoverable value in accordance with the
Group's accounting policies.
3. Basic Earnings/(Loss) per ordinary share have been calculated using
the weighted average number of shares in issue up to 23 June 2003 of 7,617,166
(2002: 833,671) and profit after tax of #414,000 (2002: loss #121,000). The
weighted average number of shares used to calculate diluted earnings takes into
account the share issue after the year end and the outstanding share options as
at 31 March 2003.
Copies of this announcement are available from the Company's registered office
Lacon House, 84 Theobald's Road, London, WC1X 8RW.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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