RNS Number:0139T
Medal Entertainment & Media PLC
09 December 2003
Strictly embargoed until: 07.00, 09 December 2003
MEM PLC INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
Announcing results for Medal Entertainment & Media plc ("MEM") for the six
months ended 30 September 2003, Brook Land, Chairman, commented: "Our strategy
of building a group of companies engaged in the acquisition, creation and
exploitation of intellectual property rights is beginning to bear fruit. Our two
core businesses achieved results in line with market expectations, and the Board
anticipates that the progress made to date will continue for the remainder of
the current financial year."
Financial Highlights:
* Group turnover #4.8m (2002: #0.6m)
* Retained loss for the period of #0.34m (2002: #0.17m)
* Loss per share of 3.20p (2002: 4.14p)
Brook Land added "Our first year of trading has, I believe, confirmed our
ability to grow the business organically and we have a strong platform,
particularly in the publishing business, from which to build, while at the same
time the Board continues to examine a number of potential acquisition
opportunities. I believe our cautious approach in building the business is the
right approach and we remain convinced that any acquisition opportunity must be
complementary to our strategy and must create value for our shareholders."
For further information, please contact:
Steve Ayres, Chief Executive John West / Claire Melly
MEM plc Tavistock Communications Limited
Tel: 020 8427 2277 Tel: 020 7920 3150
CHAIRMAN'S STATEMENT
Our strategy of building a group of companies engaged in the acquisition,
creation and exploitation of intellectual property rights is beginning to bear
fruit. During the six months ended 30 September 2003 our two core businesses
achieved results in line with market expectations, and the Board anticipates
that the progress made to date will continue for the remainder of the current
financial year.
Financial Overview
The results contain comparatives for the six months ended 30 September 2002,
although as the acquisitions of Leisureview and Fountain were only made in
August 2002, the comparisons should not be taken as an indication of the
progress the business has made. If the performance of the trading companies
prior to acquisition were to be included in the prior year comparisons it would
show a significant improvement year on year.
Group turnover for the period was #4.76 million (2002: #0.64 million), with a
retained loss #0.34 million (2002: loss #0.17 million). Loss per share was 3.20p
(2002: loss 4.1p). The Directors are not declaring an interim dividend.
Operating Review
I am pleased with the progress that the Company has made since the acquisitions
made in August 2002. The Group comprises two complementary businesses:
Leisureview Ltd, a dvd and video publisher and Fountain Television Ltd, the UK's
largest independent TV studio.
Both businesses have strong operational management teams in place and are
benefiting from the considerable shared experience that the executive management
brings to bear. During the period, systems have been reviewed and are expected
to contribute to improved customer service and continued growth.
Leisureview Ltd
During the period MEM's dvd and video distribution arm continued to grow its
library of titles and marketing rights and now sells programme titles from
amongst others: Carlton Home Entertainment, National Geographic, Egmont
Telescreen, the BBC, Channel 4 and Target Entertainment. Levels of sales to the
retail trade have increased, as Leisureview adds to its core expertise of
marketing direct to the consumer.
The growth strategy at Leisureview will continue to consist of the acquisition
of distribution rights to a range of both mainstream entertainment and niche
programmes. In pursuit of this strategy, MEM is at an advanced stage of
negotiation with some important rights acquisitions which will provide a wider
range of home entertainment titles for direct marketing.
Fountain Television Ltd
Fountain, the UK's largest fully equipped independent TV studio, also traded
well during the period and enjoyed a busier than usual summer 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 high levels of occupancy in the current quarter and the basis for a good
first quarter of 2004. Shows recently or currently being produced at the
facility include: 'Test the Nation' (Talent TV), 'The Kumars at No 42' (Hat
Trick Productions), 'Pop Idol' (Thames TV/19TV), and 'National Lottery Winning
Lines' (Celador Productions).
Strawberry Entertainment Ltd
In order to capitalise on the synergies afforded by MEM's two principal
operating companies MEM has recently entered into heads of agreement to acquire
a majority shareholding in Strawberry Entertainment Ltd. Strawberry
Entertainment will focus on selling programme rights and on the exploitation of
intellectual property rights, predominantly direct to broadcasters worldwide and
to the home entertainment markets outside the UK.
The acquisition of Strawberry is another important step for the Group, as it
will help exploit further synergies amongst the operating companies. It will
help us to build a larger Group engaged in the creation and exploitation of
audio visual copyrights and will give us greater geographical reach.
Outlook
Overall trading since 30 September 2003 has been encouraging. Leisureview
continues to acquire publishing rights and we expect Strawberry to market
programme rights not only to broadcasters in the UK, but also around the world.
Marketing plans for the all-important Christmas period have been implemented,
and sales to retail are increasing. Fountain already has forward bookings for
2004 and continues to be a popular venue for producing major shows.
Our stated strategy is to achieve growth both organically and via strategic
acquisitions. Our first year of trading has, I believe, confirmed our ability to
grow the business organically and we have a strong platform, particularly in the
publishing business, from which to build, while at the same time the Board
continues to examine a number of potential acquisition opportunities. I believe
our cautious approach in building the business is the right approach and we
remain convinced that any acquisition opportunity must be complementary to our
strategy and must create value for our shareholders. The Board therefore looks
to continuing progress over the coming months.
Brook Land
Chairman
9 December 2003
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months ended 30 September 2003
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2003 2002 2003
Unaudited Unaudited Audited
Note #'000 #'000 #'000
-------------------------------------------------------------------------------
Turnover 4,761 635 6,562
-------------------------------------------------------------------------------
Operating
(loss) / profit (111) (168) 734
Interest
payable (123) (20) (150)
Interest
receivable - 18 21
-------------------------------------------------------------------------------
(Loss) / profit
on ordinary
activities
before
taxation (234) (170) 605
Taxation on
(loss) / profit
on ordinary
activities 2 (102) - (191)
-------------------------------------------------------------------------------
Retained
(loss) / profit
for the
financial
period (336) (170) 414
===============================================================================
Basic and
diluted
(loss) / profit
per share 3 (3.20)p (4.14)p 5.44p
===============================================================================
There were no other gains or losses recognised in the period other than
disclosed above.
UNAUDITED CONSOLIDATED BALANCE SHEET
As at 30 September 2003
30 September 30 September 31 March
2003 2002 2003
Unaudited Unaudited Audited
Note #'000 #'000 #'000
--------------------------------------------------------------------------------
Fixed assets
Tangible assets 6,854 6,750 6,686
Intangible assets 1,249 1,828 1,389
Goodwill 701 1,232 838
Film rights 548 596 551
--------------------------------------------------------------------------------
8,103 8,578 8,075
--------------------------------------------------------------------------------
Current assets
Stock and WIP 907 447 669
Debtors 3,444 1,534 2,838
Cash at bank and in hand 429 1,041 208
--------------------------------------------------------------------------------
4,780 3,022 3,715
Creditors: amounts
falling due within
one year (3,686) (3,081) (2,804)
--------------------------------------------------------------------------------
Net current assets /
(liabilities) 1,094 (59) 911
--------------------------------------------------------------------------------
Total assets less
current liabilities 9,197 8,519 8,986
Creditors: amounts
falling due
after one year (3,301) (3,003) (2,918)
--------------------------------------------------------------------------------
Net assets 5,896 5,516 6,068
================================================================================
Capital and reserves
Called up share capital 1,066 914 914
Share premium account 4,873 4,893 4,861
Profit and loss account (43) (291) 293
--------------------------------------------------------------------------------
Equity shareholders'
funds 4 5,896 5,516 6,068
================================================================================
Ordinary shares in issue
('000) 10,660 9,143 9,143
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 September 2003
Note 6 months ended 6 months ended Year ended
30 September 30 September 31 March
2003 2002 2003
Unaudited Unaudited Audited
#'000 #'000 #'000
--------------------------------------------------------------------------------
Net cash (outflow) /
inflow from operating
activities 5 (901) 244 260
--------------------------------------------------------------------------------
Returns on investments and
servicing of finance
Interest paid (123) (20) (150)
Interest received - 18 21
--------------------------------------------------------------------------------
Net cash outflow from
returns on investments
and servicing of finance (123) (2) (129)
--------------------------------------------------------------------------------
Taxation
UK corporation tax paid - - -
--------------------------------------------------------------------------------
Capital expenditure and
financial investment
Payments to acquire
tangible fixed assets (269) (9) (70)
Payments to acquire
intangible fixed assets (175) (2) (369)
Sale of tangible fixed
assets - - 8
--------------------------------------------------------------------------------
Net cash outflow from
capital expenditure
and financial investment (444) (11) (431)
--------------------------------------------------------------------------------
Acquisitions and
disposals
Payments to acquire
subsidiary undertakings 8b (62) (6,782) (7,007)
--------------------------------------------------------------------------------
Net cash outflow from
acquisition and
disposals (62) (6,782) (7,007)
--------------------------------------------------------------------------------
Net cash outflow before
financing (1,530) (6,551) (7,307)
Financing
Issue of share capital 164 2,949 2,917
New external borrowings 500 3,399 3,600
External borrowings
repaid (175) - (200)
Capital element of hire
purchase and finance
lease rental payments (50) (5) (51)
--------------------------------------------------------------------------------
Net cash inflow from
financing 439 6,343 6,266
--------------------------------------------------------------------------------
Decrease in cash in the
period 6,7 (1,091) (208) (1,041)
================================================================================
NOTES TO THE INTERIM REPORT
Six months ended 30 September 2003
1 Accounting policies
Basis of preparation
The interim information for the six months ended 30 September 2003 and 30
September 2002 is unaudited and does not comprise statutory accounts. The
comparative figures for the year ended 31 March 2003 are not statutory accounts
but are extracted from the audited statutory accounts. The statutory accounts
for the year ended 31 March 2003 have been filed with the Registrar of
Companies. They received an unqualified audit report which did not contain a
statement under Section 237(2) or 237(3) of the Companies Act 1985. The interim
report should be read in conjunction with the statutory accounts for the year
ended 31 March 2003. The interim figures have been prepared on the same basis
and applying the same accounting policies as in prior years.
2 Taxation
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2003 2002 2003
Unaudited Unaudited Audited
#'000 #'000 #'000
--------------------------------------------------------------------------------
UK corporation tax (53) - 70
Deferred tax 155 - 121
--------------------------------------------------------------------------------
Taxation on (loss)/profit
for the financial period 102 - 191
--------------------------------------------------------------------------------
3 Earnings per share
The basic and diluted loss per share is based on the Group loss of #336,000 (30
September 2002: loss of #170,000) and the weighted average number of ordinary
shares in issue during the six months ended 30 September 2003 of 10,486,947 (30
September 2002: 4,103,293).
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, net
loss per share would only be increased by the exercise of out-of-the-money
options of which the Group had none at 30 September 2003.
4 Reconciliation of movements in shareholders' funds
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2003 2002 2003
Unaudited Unaudited Audited
#'000 #'000 #'000
--------------------------------------------------------------------------------
Retained (loss) / profit
for the financial
period / year (336) (170) 414
Shares issued
net of expenses 164 4,449 4,417
--------------------------------------------------------------------------------
(172) 4,279 4,831
Opening equity
shareholders' funds 6,068 1,237 1,237
--------------------------------------------------------------------------------
Closing equity
shareholders' funds 5,896 5,516 6,068
--------------------------------------------------------------------------------
5 Reconciliation of operating (loss) / profit to cash inflow from operating
activities
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2003 2002 2003
Unaudited Unaudited Audited
#'000 #'000 #'000
--------------------------------------------------------------------------------
Operating (loss) / profit (111) (168) 734
Amortisation 192 39 209
Depreciation 239 53 291
Profit on disposal of
fixed assets - - (3)
Increase in stocks (238) (10) (231)
Increase in trade and
other debtors,
and prepayments (483) (76) (907)
(Decrease) / increase
in creditors (407) 406 167
Non-cash movements (93) - -
--------------------------------------------------------------------------------
Net cash (outflow) /
inflow from operating
activities (901) 244 260
--------------------------------------------------------------------------------
6 Reconciliation of net cash flow to movement in net debt
6 months ended 6 months ended Year ended
30 September 30 September 31 March
2003 2002 2003
Unaudited Unaudited Audited
#'000 #'000 #'000
--------------------------------------------------------------------------------
Decrease in
cash for period (1,091) (208) (1,041)
Cash inflow
from increase
in debt and
lease financing (413) (3,640) (3,328)
--------------------------------------------------------------------------------
Change in net
debt resulting
from cash flows (1,504) (3,848) (4,369)
Net (debt) /
funds brought
forward (3,120) 1,249 1,249
--------------------------------------------------------------------------------
Net debt
carried forward (4,624) (2,599) (3,120)
--------------------------------------------------------------------------------
7 Analysis of net debt
At At
1 April 30 September
2003 Other non-cash 2003
Audited Cash Flows changes Unaudited
#'000 #'000 #'000 #'000
--------------------------------------------------------------------------------
Cash 556 (127) - 429
Overdrafts (348) (964) - (1,312)
--------------------------------------------------------------------------------
Cash 208 (1,091) - (883)
Debt due within one year (351) (4) - (355)
Debt due after one year (2,874) (321) - (3,195)
Finance leases (103) 50 (138) (191)
--------------------------------------------------------------------------------
Financing (3,328) (275) (138) (3,741)
--------------------------------------------------------------------------------
Total (3,120) (1,366) (138) (4,624)
--------------------------------------------------------------------------------
8(a) Acquisitions
The fair value adjustments recognised at 31 March 2003 were based on provisional
estimates, based on information available at the time the financial statements
were prepared, and any amendments necessary will be made in the following
statutory accounting period, with a corresponding adjustment to goodwill, when
the information necessary to determine these estimates is available.
8(b) Payments to acquire subsidiary undertakings
In the six months ended 30 September 2003, #32,000 was paid to the vendor of
Leisureview Limited in accordance with the sale and purchase agreement in
respect of the acquisition.
9. Copies of the interim report
This interim report will be sent to shareholders in due course, and copies will
be available from the Company Secretary at 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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