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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Cosmedia | LSE:CGHL | London | Ordinary Share | KYG244331073 | ORD USD0.10 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 2.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 3173E
Cosmedia Group Holdings Limited
25 September 2008
Cosmedia Group Holding Limited
Unaudited Interim Results
For the Six Months ended 30 June 2008
Cosmedia Group Holdings Limited ("Cosmedia", the "Company" or the "Group") - the AIM listed media, entertainment and direct marketing
group serving audiences and consumers in China, today announces its unaudited interim results for the six months ended 30 June 2008.
Highlights For The Six-Month Interim Period
* Reported three-fold increase in revenues to HK$44.6 million, compared to HK$10.8 million in the same period in 2007 - this was
primarily due to growth in revenues generated from home shopping sales
* As the home shopping business grew, cost of sales doubled to HK$90.9 million, compared to HK$44.3 million in the first half of
2007; while administrative expenses and depreciation increased 36% to HK$50 million, compared to HK$36.7 million reported in the same period
last year
* The resulting loss for this interim period was HK$111.3 million compared to HK$71.8 million in the first six months of 2007
* Loss per share is HK$2.52, compared to HK$1.63 in June 2007
* Cash and cash equivalents (inclusive of pledged bank deposits) is HK$149.8 million, compared to HK$147.6 million as at 31 December
2007
* The Group's main focus in the coming year will be to continue expansion of the home shopping business
Reaffirming the action plan as laid out in Company's 2007 Annual Report, Stanley Pong (Executive Chairman), said: "We are proceeding in
accordance with our plan to focus our resources and efforts on the home shopping business. This business segment has demonstrated growth and
an ability to generate cashflows within a shorter time frame than that of the content and advertising business. In light of the continued
deterioration of the global markets, and the fact that there will be a certain amount of softness expected in China's media and advertising
market following the Olympics, the Group will be adopting a patient and cautious approach with respect to ongoing investment in the content
and advertising portion of the business. Given the current focus on home shopping, and taking into account the need for appropriate
allocation of resources, the Group has decided in the meantime to maintain a minimal scale in terms of the content and advertising business,
until such time when market conditions show noticeable improvement. This has resulted in decreased revenue from the content and advertising business - from HK$2.7 million this period compared
to HK$10.3 million for the interim priod ended 30 June 2007. Nevertheless, the Group still firmly believes that China's advertising market
offers attractive growth prospects in the longer term, and as such intends to renew its activities in that business segment probably at some
time in 2009."
Meanwhile, during this period of time, the Company successfully established the core infrastructure needed for its home shopping
business, including the set up of a fulfilment system and call centre, and the establishment of contractual relationships with key suppliers
of merchandise and logistics services. One such key supplier is Chow Tai Fook Jewellery Company Limited, renowned for its high quality fine
jewellery, which currently has approximately 700 retail outlets in over 60 cities in mainland China. Aside from jewellery, the home shopping
business also sells apparel, household goods, electronics, cosmetics, health care and collectibles. Home shopping revenue increased
significantly from less than HK$1 million in the interim period ended 30 June 2007 to HK$34.5 million this period.
Management Review
Financial Results for the Six Months Interim Period Ended 30 June 2008
Unaudited Profit and Loss (HK$000) 30 June 2008 30 June 2007
Turnover
Home Shopping Revenue 34,497 712
Qinghai TV Advertising Revenue 2,713 10,252
PopTV Arena Event Promotion Revenue 7,941 -
Less Rebates and Business Taxes (592) (155)
Net Revenue 44,559 10,809
Cost of Sales
Home Shopping Cost of Goods Sold (24,647) (394)
Advertising Airtime and Program Costs (54,203) (43,578)
PopTV Arena Cost/Others (12,065) (299)
Gross Profit/(Loss) (46,356) (33,462)
Home Shopping Direct Costs (logistics, call centre, (7,105) -
landing fees, programme costs, etc)
Operating Expenses
Selling & Distribution, Marketing and Promotion (2,365) (1,322)
Administrative Expenses (44,231) (31,921)
EBITDA (100,057) (66,705)
Depreciation and Amortization (5,756) (4,799)
EBIT (105,813) (71,504)
Other Income/Expenses, net 5,920 5,982
Finance Costs (11,368) (6,271)
Profit/(Loss) before Taxation (111,261) (71,793)
The home shopping business was launched using the Qinghai TV ("QHTV" or "Channel") nationwide satellite channel on which the Company has
exclusive airtime rights. As of 30 June 2008, the Channel reaches approximately 20 million households in mainland China. In addition to
QHTV, the Company also launched syndicated blocks on 2 other local television networks, including Qingdao and Jiangxi. These syndicated
blocks were launched in May and June respectively, and expanded coverage by an additional 5.5 million households, adding an aggregate of
over 20 hours of airtime a day. Qingdao was chosen for its large and sophisticated consumer base within its population of 7.5 million, and
average per capita annual income of RMB50,000. Jiangxi is a fast-developing region with a population of 46.8 million with an average per
capita annual income of RMB 12,500. The Directors consider these tier 2 cities to be very attractive targets for the Company's home shopping
business as potential is high while competition is low there.
Outlook - 2008 and beyond
For the remainder of the year, the Company will continue to focus resources and capital predominantly on the home shopping business
segment. In July 2008, the home shopping business was also launched onto a third syndication network in Tianjin, adding a further 1.5
million households and over 15 hours of airtime per day. The Board was attracted to launch the home shopping business into Tianjin as it is
a relatively prosperous and fast growing city with a population of 11.5 million earning an average annual income per capita of RMB46,000.
Operationally, it has the added advantage of being easy to service logistically from the Company's current operations in Beijing.
The home shopping business has shown some encouraging performance, despite this being its start-up year. This is a result of the time,
effort and resources put in to build the back-end infrastructure for the home shopping business, including the fulfillment system,
merchandising, call centre, logistics etc., as well as the overall roll-out of distribution not only on QHTV but also onto three other
syndicated platforms.
The Company is aiming to achieve a similar level of growth for the full-year revenues as it has achieved in the first half of 2008 as
previously reported. Margins are expected to fluctuate somewhat in 2008, especially when compared to historical performance, given that the
business in the current year is primarily at the investment stage during which the Company is undergoing some changes in its business mix.
Initiatives are underway to continue to drive revenue growth into 2009, and the Board's strategy is to strive to achieve a similar growth
rate for 2009 as is targeted to achieve in the full-year of 2008.
The Board has also set as a target for the Company to reach a cashflow breakeven point in the latter part of 2009 - however, the Board
believes that the Company will still likely be loss-making for the 2009 financial year as a whole. The Board is targeting a significant
improvement to its overall bottom-line performance to achieve full year profitability in the next 2-3 years with an ambitious targeted
growth rate of 40%-60% year-on-year from 2009.
Furthermore, it is the opinion of the Directors that the Company will be able to improve its operating margins as it increases its
turnover and strives to achieve continued improvements in business terms with suppliers as volumes grow. In addition, the Directors
anticipate that the Company will also be increasingly able to achieve economies of scale with fulfillment and logistics costs. Key drivers
to ongoing revenue growth include continued expansion of its distribution and reach - current coverage is at approximately 27 million
households (QHTV and syndicated platforms in aggregate), and the Company aims to increase this by approximately 10 million households to
reach an aggregate of almost 38 million households by 2011, primarily driven by the organic growth in distribution of the QHTV Channel.
Where commercially viable, the Company will continue to look for opportunities to expand onto other syndicated platforms, beyond its current
footprint - thus allowing the Company to aggregate more airtime and ultimately serve more customers.
As the home shopping business matures, in terms of product offerings and the customer base growing, the Company expects its customer
yields (as measured by revenue/household/month) to increase significantly. Currently running at a low start-up stage average of
approximately HK$0.20/household/month, the Company has set a target of attaining a yield in the region of HK$2.50/household/month within the
next 3 years.
Globally, home shopping operators in mature markets typically achieve performances ranging from 5~13% and 2~10% in terms of EBITDA and
Net Profit margins respectively. It is the Company's objective to strive to achieve operating margins comparable to its international peers
within 3 years following the initial start-up period the Company is currently in.
As previously announced, the Company is awaiting regulatory approval of a nationwide 24 hour digital channel in mainland China as an
additional platform for its home shopping business. The Board's projections to date have not factored into consideration the potentially
substantial upside such a channel could provide.
About Cosmedia Group
* The Cosmedia Group is an integrated media, entertainment and direct marketing services group serving viewers and consumers in
China.
* The uniqueness of the Group lies with its marriage of branded entertainment content on its television platform branded as POPTV -
reflecting a modern Chinese lifestyle, with its key business being the direct marketing home shopping platform, POPTV Shop - which offers
consumers a trusted destination for modern lifestyle products.
The Group also operates the POPTV Arena, a 600,000 square foot live venue for top entertainment and lifestyle events, located in the
West Kowloon district of Hong Kong, through a strategic alliance with Live Nation.
For further information, please contact:
Cosmedia Group Holdings Limited
Anthony Tse +852 2136 8222
Collins Stewart Europe Limited
Adrian Hadden +44 (0) 20 7523 8350
CONSOLIDATED INCOME STATEMENT
FOR THE six Months ENDED 30 JUNE 2008
NOTES Six months ended Six months ended Year
30-June-08 30-June-07 ended
(Unaudited) (Unaudited) 31-Dec-07
(Audited)
HK$'000 HK$'000 HK$'000
Revenue 5 44,559 10,809 26,339
Cost of sales (90,915) (44,271) (90,539)
________ ________ ________
Gross loss (46,356) (33,462) (64,200)
Other income/expenses, net 5,920 5,982 14,784
Selling expenses (9,470) (1,322) (16,455)
Administrative expenses (49,987) (36,720) (87,997)
Finance costs 6 (11,368) (6,271) (15,394)
________ ________ ________
Loss before taxation (111,261) (71,793) (169,262)
Income tax expense - - -
________ ________ ________
Loss for the period/year 7 (111,261) (71,793) (169,262)
======= ======= =======
Attributable to:
Equity holders of the Company (111,261) (71,793) (169,262)
Minority interests - - -
________ ________ ________
(111,261) (71,793) (169,262)
======= ======= =======
Loss per share (HK$) 8
Basic (2.52) (1.63) (3.84)
======= ======= =======
Diluted (2.52) (1.63) (3.84)
======= ======= =======
CONSOLIDATED BALANCE SHEET
AT 30 JUNE 2008
NOTES Six months ended Six months ended Year
30-June-08 30-June-07 ended
(Unaudited) (Unaudited) 31-Dec-07
(Audited)
HK$'000 HK$'000 HK$'000
Non-current assets
Property, plant and 41,270 26,327 33,266
equipment
Programme and film rights - 751 -
Loan receivable 6,331 2,389 5,731
________ ________ ________
47,601 29,467 38,997
________ ________ ________
Current assets
Inventories 449 513 444
Trade receivables 4,871 4,807 7,905
Prepayments, deposits and 46,959 36,979 39,405
other receivables
Amount due from immediate 23 18 18
holding company
Amounts due from fellow 507 448 447
subsidiaries
Other financial assets 5,473 2,585 -
Pledged bank deposits 140,192 141,108 139,662
Cash and cash equivalents 9,649 64,955 7,975
________ ________ ________
208,123 251,413 195,856
________ ________ ________
Current liabilities
Trade payables 8,133 727 7,881
Other payables 29,130 13,985 20,314
Amount due to a minority 524 526 524
shareholder of a subsidiary
Other financial liabilities 24,662 25,003 21,364
Bank borrowings 9 454,432 267,500 320,734
________ ________ ________
516,881 307,741 370,817
________ ________ ________
Net current assets (308,758) (56,328) (174,961)
(liabilities)
________ ________ ________
Total assets less current (261,157) (26,861) (135,964)
liabilities
======= ======= =======
Non-current liabilities
Deferred tax liabilities 83 83 83 83
________ ________ ________
Net assets (liabilities) (261,240) (26,944) (136,047)
======= ======= =======
Capital and reserves
Share capital 10 36,285 36,285 36,285
Reserves (297,525) (63,229) (172,332)
________ ________ ________
Equity attributable to equity (261,240) (26,944) (136,047)
holders of the Company
======= ======= =======
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2008
Attributable
Own Equity to equity
Share Share Special shares held Deemed instrument Exchange Accumulated holders of
Minority
capital premium reserve by a trust appropriation reserve reserve losses the Company
interests Total
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
HK$'000 HK$'000
At 1 January 2006 18 63,399 - - - - 51 (299,896) (236,428)
- (236,428)
Foreign exchange differences
recognised directly in - - - - - - (4,775) - (4,775)
- (4,775)
equity
Loss for the year - - - - - - - (186,060) (186,060)
- (186,060)
Total recognised loss for the - - - - - - (4,775) (186,060) (190,835)
- (190,835)
year
Capitalisation of a 1 186,523 - - - - - - 186,524
- 186,524
shareholder loan
Issue of shares of a then
subsidiary
- Cosmedia Capital Limited 9 193,739 - - - - - - 193,748
- 193,748
("CCL")
Issue of shares of the Company
upon
group reorganisation 31,105 (442,317) 411,212 - - - - - -
- -
Elimination of issued share
capital of a then
subsidiary - CCL upon group (28) - 28 - - - - - -
- -
reorganisation
Treasury shares of the Company
held
by the Group - - - (1,781) - - - - (1,781)
- (1,781)
Issuance of put and call - - - - (5,434) - - - (5,434)
- (5,434)
options
Expenses incurred in
connection with the issue
of shares of a then - (1,344) - - - - - - (1,344)
- (1,344)
subsidiary - CCL
Issue of new shares 4,518 75,263 - - - - - - 79,781
- 79,781
Expenses incurred in
connection
with the issue of shares - (1,614) - - - - - - (1,614)
- (1,614)
Recognition of equity-settled
share-based payments - - - - - 712 - - 712
- 712
At 31 December 2006 35,623 73,649 411,240 (1,781) (5,434) 712 (4,724) (485,956) 23,329
- 23,329
Foreign exchange differences
recognised directly in - - - - - - (9,604) - (9,604)
- (9,604)
equity
Loss for the year - - - - - - - (169,262) (169,262)
- (169,262)
Total recognised loss for the - - - - - - (9,604) (169,262) (178,866)
- (178,866)
year
Exercise of equity-settled 357 10,508 - - - (712) - - 10,153
- 10,153
share-based payment
Issue of new shares 305 8,393 - - - - - - 8,698
- 8,698
Treasury shares released upon
the exercise
of phantom options - 622 - 21 - - - - 643
- 643
Expenses incurred in
connection
with the issue of shares - (4) - - - - - - (4)
- (4)
At 31 December 2007 36,285 93,168 411,240 (1,760) (5,434) - (14,328) (655,218) (136,047)
- (136,047)
Foreign exchange differences
recognised directly in - - - - - - (13,932) - (13,932)
- (13,932)
equity
Loss for the period - - - - - - - (111,261) (111,261)
- (111,261)
At 30 June 2008 36,285 93,168 411,240 (1,760) (5,434) - (28,260) (766,479) (261,240)
- (261,240)
Note :
The special reserve represents the difference between the nominal amount of the shares issued by the Company and the aggregate amount of
share capital and share premium of the subsidiaries acquired pursuant to the Group's reorganisation.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2008
Six months ended Six months ended Year
30-June-08 30-June-07 ended
(Unaudited) (Unaudited) 31-Dec-07
(Audited)
HK$'000 HK$'000 HK$'000
Operating activities
Loss before taxation (111,261) (71,793) (169,262)
Adjustments for:
Cash-settled share-based - 90 -
payment expenses
Finance costs 11,368 6,271 15,394
Depreciation of property, 5,756 4,798 8,401
plant and equipment
Loss arising from initial - - 3,275
recognition of a loan
receivable
(Increase) decrease in fair (2,037) - 1,507
value of call and put options
Allowance for bad and doubtful 14 520 1,793
debts
Write-off of amount due from - - 1,889
former fellow subsidiaries
Impairment and write off of - - 751
programme and film rights
Loss on disposal of property, 197 8 8
plant and equipment
Interest income (1,698) (4,112) (7,205)
Change in obligation under (138) - (4,498)
phantom option scheme
Deemed interest income (201) (65) (248)
________ ________ ________
Operating cash flows before (98,000) (64,283) (148,195)
movements in working capital
(Increase) decrease in (5,698) 70,895 70,579
prepayments, deposits
and other receivables
(Decrease) increase in trade (276) 215 7,002
payables
Increase (decrease) in other 7,614 (1,769) 2,243
payables
Decrease (increase) in trade 3,440 (152) (4,156)
receivables
Decrease (increase) in 25 (513) (442)
inventories
________ ________ ________
Cash generated from (used (92,895) 4,393 (72,969)
in) operations
Interest paid (11,534) (6,271) (14,547)
________ ________ ________
Net cash generated from (used (104,429) (1,878) (87,516)
in) operating activities
________ ________ ________
Investing activities
Increase in pledged bank (530) (21,481) (20,035)
deposit
Purchase of property, plant (13,386) (5,812) (14,397)
and equipment
Advance to a business - (6,186)
partner
Advance to fellow (60) - (265)
subsidiaries
Advances to immediate (5) (4) (5)
holding company
Interest received 1,698 4,112 7,205
Acquisition of a subsidiary - 228
Proceeds on disposal of 1,149 - 12
property, plant and equipment
________ ________ ________
Net cash used in investing (11,134) (23,185) (33,443)
activities
________ ________ ________
Six months ended Six months ended Year
30-June-08 30-June-07 ended
(Unaudited) (Unaudited) 31-Dec-07
(Audited)
HK$'000 HK$'000 HK$'000
Financing activities
Bank borrowings raised 475,765 61,000 605,918
Proceeds from exercise of - 10,153 10,153
warrants
Proceeds from exercise of - 8,698 8,698
call and put options
Advances from fellow - 1,624 -
subsidiaries
Repayment of bank borrowings (358,242) - (504,124)
Expenses paid in connection - - (4)
with the issue of shares of
the Company
________ ________ ________
Net cash from financing 117,523 81,475 120,641
activities
________ ________ ________
Net increase (decrease) in 1,960 56,412 (318)
cash and cash equivalents
Cash and cash equivalents at 7,975 8,543 8,543
beginning of the period/year
Effect of foreign exchange (286) - (250)
rate changes
________ ________ ________
Cash and cash equivalents at 9,649 64,955 7,975
end of the period/year
======= ======= =======
Analysis of cash and cash
equivalents:
Bank balances and cash 9,649 64,955 7,975
________ ________ ________
9,649 64,955 7,975
======= ======= =======
NOTES TO THE INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2008
1. GENERAL
The results for the six months ended 30 June 2008 are unaudited and does not constitute the Group's financial statements for the period
ended 30 June 2008. They have been prepared on the same basis and by applying the same accounting policies as the audited financial
statements for the year ended 31 December 2007.
The consolidated income statements, consolidated statement of changes in equity and the consolidated cash flow statements for each of
the reporting periods ended 30 June 2007, 31 December 2007 and 30 June 2008 have been prepared on the basis as if the current group
structure had been in existence throughout the years or since their date of incorporation where this is a shorter period. The consolidated
balance sheets of the Group as at 30 June 2007, 31 December 2007 and 30 June 2008 have been prepared to present the assets and liabilities
of the companies now comprising the Group as if the current group structure had been in existence as at those dates.
The interim financial statements were approved by the Board of Directors on 19 September 2008.
2. BASIS OF PRESENTATION OF FINANCIAL STATEMENTS
As at 30 June 2008, the Group's accumulated losses were HK$766,479,000, its current liabilities exceeded its current assets by
HK$261,240,000, and its total liabilities exceed its total assets by HK$261,240,000. These factors indicate that there exist material
uncertainties which cast significant doubts on the Group's ability to continue as a going concern and therefore, it may be unable to realise
its assets and discharge its liabilities in the normal course of business. As of the report date, management had committed to take
procedures to deal with these uncertainties and to improve financial performance by expansion of the existing business and exploration of
new business in the foreseeable future In May 2008, the Company received commitment from certain shareholders to fund the Company by
injecting into the Company as and if needed, on terms agreeable to the Company and subject to relevant regulatory restrictions, an amount up
to a maximum of HK$140 million. Furthermore, on 27 June 2008, at the Annual General Meeting of Members, the Shareholders of the Company authorized the directors to raise funds through the issuance of share capital
up to an additional one-third of the current share capital. However, the eventual outcome of these cannot be determined with reasonable
certainty. These interim financial statements have been prepared on a going concern basis.
3. SIGNIFICANT ACCOUNTING POLICIES
These preliminary results have been prepared in accordance with International Financial Reporting Standards ("IFRS") and on the
historical cost basis except for certain financial instruments which are measured at fair value. We use the same principles as adopted in
year 2007.
4. SEGMENT INFORMATION
For management purpose, the Group is organised into three major operating divisions - Qinghai TV advertising business, home shopping
business and event promotion business. These divisions are the basis on which the Group reports its primary segment information. The
principal products and services of each of these divisions are as follows:
Qinghai TV business - the sales of advertising time in PRC through
Qinghai TV Synthesis Channel
Home shopping business - the sale of goods via TV home shopping program in
PRC
Event promotion business - the provision of event promotion services in Hong
Kong
Segment information about these businesses is presented below.
* Advertising Home shopping Event promotion
Elimination Consolidated
* June 2008 June 2007 2007 June 2008 June 2007 2007 June 2008 June 2007 2007 June 2008
June 2007 2007 June 2008 June 2007 2007
* Unaudited Unaudited Audited Unaudited Unaudited Audited Unaudited Unaudited Audited Unaudited
Unaudited Audited Unaudited Unaudited Audited
* HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
REVENUE * * * * * * * * * *
* * * * *
External Sales 2,629 10,110 14,580 33,989 699 11,399 7,941 - 360 -
- - 44,559 10,809 26,339
Inter-segment sales 9,253 12,340 56,412 - - - - - - (9,253)
(12,340) (56,412) - - -
Total 11,882 22,450 70,992 33,989 699 11,399 7,941 - 360 (9,253)
(12,340) (56,412) 44,559 10,809 26,339
* * * * * * * * * * *
* * * * *
RESULT * * * * * * * * * *
* * * * *
Segment result (80,778) (56,595) (118,206) (9,007) (3,949) (20,880) (7,017) - (3,656) -
- - (96,802) (60,544) (142,742)
Unallocated corporate * * * * * * * * * *
* * (4,789) (9,090) (18,579)
expenses
Finance costs * * * * * * * * * *
* * (11,368) (6,271) (15,394)
Interest income * * * * * * * * * *
* * 1,698 4,112 7,453
Income Tax * * * * * * * * * *
* * - - -
Loss for the year * * * * * * * * * *
* * (111,261) (71,793) (169,262)
* * * * * * * * * * *
* * * * *
* * * * * * * * * * *
* * * * *
OTHER INFORMATION * * * * * * * * * *
* * * * *
Segment assets 59,183 79,721 56,279 24,855 27,595 17,912 22,094 - 9,564 *
* * 106,132 107,316 83,755
Unallocated corporate assets * * * * * * * * * *
* * 149,592 173,564 151,098
Consolidated total assets * * * * * * * * * *
* * 255,724 280,880 234,853
* * * * * * * * * * *
* * * * *
Segment liabilities 26,806 7,455 15,310 6,665 2,239 9,288 1,495 - 339 *
* * 34,966 9,694 24,937
Unallocated corporate * * * * * * * * * *
* * 481,998 298,130 345,963
liabilities
Consolidated total * * * * * * * * * *
* * 516,964 307,824 370,900
liabilities
* * * * * * * * * * *
* * * * *
Depreciation and 3,603 4,187 7,031 544 163 504 1,188 - - *
* * 5,335 4,350 7,535
amortization
Unallocated * * * * * * * * * *
* * 421 448 866
* * * * * * * * * * *
* * 5,756 4,798 8,401
* * * * * * * * * * *
* * * * *
Allowance for bad and 14 520 1,793 - - - - - - *
* * 14 520 1,793
doubtful debts
* * * * * * * * * * *
* * * * *
Write-off of amount due from - - 94 - - - - - - *
* * - - 94
a former fellow subsidiary
Unallocated * * * * * * * * * *
* * - - 1,795
* * * * * * * * * * *
* * * * 1,889
* * * * * * * * * * *
* * * * *
Impairment and write-off of - - 751 - - - - - - *
* * - - 751
programme and film rights
* * * * * * * * * * *
* * * * *
Capital expenditure 949 3,490 7,692 331 2,239 3,243 12,106 - 3,329 *
* * 13,386 5,729 14,264
Unallocated * * * * * * * * * *
* * - 83 133
* * * * * * * * * * *
* * 13,386 5,812 14,397
The Group operates in two principal geographical areas - PRC and Hong Kong. The Group's revenue from external customers and information
about its segment assets by geographical location are detailed below.
Revenue from external customers Segment assets
June 2008 June 2007 2007 June 2008 June 2007 2007
Unaudited Unaudited Audited Unaudited Unaudited Audited
HK$'000 HK$'000 HK$'000 HK$'000 HK$'000 HK$'000
PRC 36,618 10,809 25,979 71,895 105,259 78,855
Hong Kong 7,941 - 360 25,196 5,749 13,673
Other - - - 158,633 169,872 142,325
Total 44,559 10,809 26,339 255,724 280,880 234,853
5. REVENUE
Revenue represents (i) income from the sales of advertising airtime; (ii) income from the sale of goods from TV home shopping; (iii) and
event promotion income, net of business tax and rebate.
Revenue for the year is analysed as follows:
Six months ended Six months ended Year
30-June-08 30-June-07 ended
(Unaudited) (Unaudited) 31-Dec-07
(Audited)
HK$'000 HK$'000 HK$'000
Advertising income 2,629 10,110 14,580
Home shopping sales 33,989 699 11,399
Event promotion 7,941 - 360
________ ________ ________
44,559 10,809 26,339
======= ======= =======
6. FINANCE COSTS
Six months ended Six months ended Year
30-June-08 30-June-07 ended
(Unaudited) (Unaudited) 31-Dec-07
(Audited)
HK$'000 HK$'000 HK$'000
Interest on:
- bank borrowings 11,368 6,271 15,394
________ ________ ________
11,368 6,271 15,394
======= ======= =======
7. LOSS FOR THE PERIOD/YEAR
Loss for the period/year has been arrived at after charging (crediting):
Six months ended Six months Year
30-June-08 ended ended
(Unaudited) 30-June-07 31-Dec-07
(Unaudited) (Audited)
HK$'000 HK$'000 HK$'000
Directors' emoluments 1,734 1,251 4,061
Other staff's cash-settled - 90 -
share-based payments
Other staff's salaries 22,293 13,977 30,759
Retirement benefit scheme 2,025 1,575 3,440
contributions
in respect of other staff
________ ________ ________
Total staff cost 26,052 16,893 38,260
======= ======= =======
Auditors' remuneration 674 104 1,125
Allowance for bad and doubtful 14 520 1,793
debts
Write-off of amount due from - - 1,889
former fellow subsidiaries
Depreciation of property, 5,756 4,798 8,401
plant and equipment
Impairment and write-off of - - 751
programme and film rights
Loss on disposal of property, 197 8 8
plant and equipment
Change in obligation under (138) - (4,498)
phantom option credited to
profit or loss
Change of fair value of call (2,037) - 1,507
and put options (credited)
charged to profit or loss
Loss arising from initial - - 3,275
recognition of a loan
receivable
Rental income under operating (2,561) (1,879) (4,130)
leases in respect of office
premises, net of insignificant
outgoings
Foreign exchange loss (gain) (900) 1,184 406
Deemed interest income (201) (65) (248)
Bank interest income (1,698) (4,112) (7,205)
======= ======= =======
8. LOSS PER SHARE
The calculation of the basic and diluted losses as per share attributable to ordinary equity holders of the Company is based on the
following data:
Losses
Six months ended Six months ended Year
30-June-08 30-June-07 ended
(Unaudited) (Unaudited) 31-Dec-07
(Audited)
HK$'000 HK$'000 HK$'000
Losses for the purposes of
basic and diluted
losses per share being
losses attributable
to equity holders of the (111,261) (71,793) (169,262)
Company
======= ======= =======
Number of shares
Six months ended Six months Year
30-June-08 ended ended
(Unaudited) 30-June-07 31-Dec-07
(Unaudited) (Audited)
Weighted average number of 44,116,238 43,970,404 44,116,238
ordinary shares for the purposes
of calculating basic and diluted
losses per share
======= ======= =======
The weighted average number of ordinary shares is calculated on the assumption that the Group Reorganisation has been effective on 1
January 2005. Such number of shares for the end of the periods has been arrived at after eliminating the shares in the Company held by the
trust. The computation of diluted loss per share does not assume the exercise of the outstanding share options and warrants since they
would result in a decrease in loss per share.
9. BANK BORROWINGS
At the balance sheet date, the Group's bank loans are secured by pledged deposits and interests of HK$140,192,000 by Cosmedia Capital
Limited (borrower), a corporate guarantee of HK$153,000,000 from Cosmedia Capital Limited to Zhuhai China Media Co. Ltd. (the Group's
sino-foreign co-operative joint venture subsidiary), a corporate guarantee of HK$161,500,000 from the Company to Cosmedia Capital
Limited, and a hold-cover from the Hong Kong and Shanghai Banking Corporation Limited, Hong Kong Office.
Pursuant to banking facility letters dated 10 June 2008 (reflected at the balance sheet date), and 14 August 2008 (an after Balance
Sheet Event not reflected at the balance sheet date), the Group was granted additional banking facilities of HK$37,500,000 and HK$18,000,000
respectively, bearing interest rate of 1% per annum over HIBOR. The banking facilities are secured by a charge over deposits from its
majority shareholders of HK$27,000,000 by Mr. Stanley Kit Pong, and a charge over deposits of HK$23,500,000 by Heap Profit Investments
Limited, and the corporate guarantee from the Company to Cosmedia Capital Limited (borrower) was increased to HK$200,500,000.
The directors consider the fair value of the bank borrowings approximates the corresponding carrying amount.
10. SHARE CAPITAL
Authorised Issued and fully paid
Number of Number of
shares Amount shares Amount
US$ US$
Ordinary shares
- on incorporation at US$1.0 250,000,000 250,000,000 1 1
each
- sub-division of authorised
and
issued share capital from
US$1.0 per share into
US$0.10 per share 2,250,000,000 - 9 -
- issued pursuant to the - - 39,878,289 3,987,829
Group
Reorganisation
- issue of shares by - - 3,508,772 350,877
admission on AIM
- issue of shares to
employee
benefit trust - - 2,283,719 228,372
At 31 December 2006 2,500,000,000 250,000,000 45,670,790 4,567,079
- issue of shares on
exercise of
Collins Stewart Warrant - - 456,708 45,671
- issue of shares under call - - 391,280 39,128
option
At 31 December 2007 and 30 2,500,000,000 250,000,000 46,518,778 4,651,878
June 2008
Disclosed in the consolidated financial statements as
HK$ equivalent
At 30 June 2008 and 31 December 2007 HK$36,285,000
On 2 March 2007, 456,708 shares of US$0.10 each of the Company were issued at the exercise price of US$2.85 pursuant to the Option
Agreement entered into with Collins Stewart Europe Limited.
On 2 March 2007, 391,280 shares of US$0.10 each of the Company were issued at the exercise price of US$2.85 pursuant to the Call and Put
Option Agreement entered into with Stanley Kit Pong.
All the shares issued during the period rank pari passu with the then existing shares in all respects.
11. SHARE-BASED PAYMENT TRANSACTIONS
On 20 December 2006, the Company adopted a share option scheme (the "Scheme") for the primary purpose of attracting skilled and
experienced personnel and to provide incentive for them to remain with the Group. Under the Scheme, the option-holders do not have the right
to acquire ordinary shares of the Company. Instead, they receive a conditional right to be paid a cash bonus based on the value of such
shares at the time of exercise.
At their meeting on 25 May 2007, the directors of the Company unanimously approved amending the Scheme to allow, to the extent not
prohibited by relevant laws and regulations, option-holders the right to elect to receive shares or cash.
-END-
This information is provided by RNS
The company news service from the London Stock Exchange
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