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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Medal Ent&Med | LSE:MME | London | Ordinary Share | GB0031004350 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 23.00 | 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:1972G
Medal Entertainment & Media PLC
14 July 2006
MEDAL ENTERTAINMENT & MEDIA PLC
"MEM" or "the Company"
Preliminary Results for the year ended 31 March 2006
Financial highlights:
* Group turnover increased by 64% to #24.48m (2005: #14.95m)
* Gross profit up 33% to #12.47m (2005: #9.37m)
* EBITDA up 50% to #2.10m (2005: #1.40m)
* Profit before taxation and exceptionals up by 22% to #0.940m (2005: #0.77m)
* Basic and Diluted earnings per share of 1.57p (2005: 2.45p)
* Group Operating Profit down 18% to #0.89m (2005: #1.09m)
* Profit before taxation down 33% to #0.42m (2005: #0.62m)
Operating highlights:
* New rights licensing and distribution deals agreed with Fremantle Media,
Granada Ventures and BBC
* DVD/video distribution rights to the 2006 Ashes Series secured
* ScarletTV delivered 18 commissions in first full year for BBC, SkyOne, ITV2,
Five, and others
* ScarletTV awarded programme development grants from the BBC and North West
Vision
Commenting on the results Brook Land, Chairman said:
"We are pleased to announce a set of results showing solid growth. The Group's
strategy remains to build an integrated company with assets in production and
distribution. These elements are now established and performing well.
Our DVD publishing and distribution business has an excellent market position
and is targeting growth. Our production business has had a very encouraging
start and is targeting strong growth, having already exceeded the Board's
expectations in terms of its early development. As announced on 3 July 2006, we
are in advanced discussions with regard to the sale of MEM's subsidiary,
Fountain Television Limited. The Directors are confident that this sale will
conclude in the near future. A further announcement will be made as
appropriate.
The Board views the current year with confidence."
Enquiries:
Analysts/Investors:
Steve Ayres, Chief Executive, MEM plc Tel: 020 7851 0550
Press:
Tim Allan or Diane Barnes, Portland Tel: 020 7404 5344
Chairman's Review
In the twelve month period ended 31 March 2006 we have continued to make good
progress in each of our operating divisions. In our DVD publishing business,
DDHE, we acquired the rights to distribute the DVD of the 2005 Ashes cricket
series. Unprecedented public interest in the 2005 Test series led to very
strong sales.
The summer months of the year are traditionally quieter for our television
studio business, Fountain, as broadcasters generally shift to sport and repeats.
However, as we announced on 3 July 2006, we are in advanced discussions with
regard to a sale of this part of our business which will allow us, when
completed, to focus on our core areas, distribution and production, and to
further the development of the Group.
In our production division we made progress in developing formats. We were
commissioned in July by BBC2 to produce a new panel show Petrolheads, which
aired in the Spring of 2006. This division delivered 18 commissions in its
first full year of operations.
Financial Review
Group turnover for the period increased during the year by 64% to #24.5m (2005:
#15.0m). DDHE delivered particularly strong growth with divisional gross profit
increasing by 39% to #10m (2005: #7.2m), partly fuelled by strong sales of the
Ashes DVD. In addition, the production side of the business delivered
impressive first year sales figures of #1.7m.
The strong sales delivered a Group gross profit of #12.47m, up 33% on prior year
(2005: #9.37m). Profit before tax and exceptional items (compensation for loss
of office and a loss from fire at a third party plant) increased by 22% to
#0.94m (2005: #0.77m), and the profit before tax was #0.42m (2005: #0.62m). The
tax charge for the year was #0.2m. The Company's basic and diluted EPS is 1.57p
(2005: 2.45p).
At 31 March 2006, total funding provided by bank loans, net of bank fees stood
at #3.6m (2005: #3.33m), #3.1m of which is repayable after more than one year
(2005: #3.0 m) and leased asset funding stood at #0.04m (2005: #0.15m). Trading
operations generated #1.067m (2005: #0.852m absorbed) in cash in the period, of
which #2.591m (2005: #2.09m) was used to purchase tangible and intangible fixed
assets. The Company had a net bank overdraft of #4.1m (2005: #2.14m overdraft)
at the year end.
Operating Review
During the period, the Group's operations were split into three divisions.
These were audio visual rights exploitation (Rights), TV production and studio
facilities (Facilities).
Rights
DD Home Entertainment ("DDHE") licenses, produces and publishes DVDs and videos,
specialising in factual programmes, classic television and feature films. DDHE
markets its products directly to the consumer via catalogues, the internet and
direct advertising as well as via high street retailers and specialist outlets.
Following England's success in the 2005 Ashes Series, the huge public excitement
around the series drove substantial sales of The Ashes DVD "The Greatest Series
", which was DDHE's highest selling DVD ever. DDHE has been successful in
securing the rights to the next Ashes series which will be released in early
2007.
During the year we continued to invest in catalogue including a licensing and
distribution deal with Fremantle Media which gives DDHE rights to a substantial
library of classic television programming, including the Thames TV catalogue
which contains programmes including Benny Hill, Minder and The World at War,
together with Fremantle's ongoing production.
Also in the year we announced a five year licensing deal with Granada Ventures.
This entitles DDHE to manufacture and sell via direct marketing the majority of
existing and future programmes owned or controlled by ITV.
With the retail environment still remaining difficult across the industry, DDHE
is well placed to benefit from the changing market place since its catalogue,
such as classic entertainment and specialist programming, are less sensitive to
changes in retail environment and prices and there are few competitors in these
areas. In addition the DDHE website is being upgraded to take advantage of the
growth in internet based sales and direct marketing, thereby further reducing
the impact of the challenges faced by the high street.
TV Production
Scarlet TV Limited ("ScarletTV") is the Group's low risk entry strategy into TV
production. During the period this division has made excellent progress in its
first full year of operations. Up against competition from large independent
producers, ScarletTV was awarded programme development grants from the BBC and
North West Vision. This is encouraging for such a young production company and
underlines the potential for the division.
In January 2006 we announced the consolidation of the Group's independent
production subsidiaries under ScarletTV's banner, in order to drive new
commissions and future growth. The streamlining exercise brings together under
one roof ScarletTV's existing popular factual operation and MEM tv, which
specialises in light entertainment and formats.
The division delivered 18 commissions during the year for BBC2, ITV2, Sky,
Discovery and AETN. Its productions have included 50 Greatest Screen Kisses,
Sex, Lies and Politics and The UK's Real Desperate Housewives. ScarletTV was
also commissioned to produce a one off film Crumpet which was screened by BBC2
during Christmas week. In addition, ScarletTV's co-production, Petrolheads also
for BBC2, commenced shooting in January 2006, was aired in February and March
and was well received.
ScarletTV is based in Manchester and therefore benefits from the commitment to
regional independent production. In addition, the recent announcements from the
BBC and Channel 4 with regard to the retention of new media rights by
broadcasters, following Ofcom's review into the sector, leaves this division
well placed to secure additional revenues from its output following sales to
these broadcasters.
Facilities
MEM's facilities division operates Fountain Television Limited ("Fountain"), the
UK's largest independent television studio facility providing services to
independent producers. During the year the studio secured repeat bookings for
The X-Factor and Xtra Factor (Talkback Thames/ Syco), and Test the Nation
(Talent TV). The studio was also used to host shows for So TV, Celador and the
BBC.
As announced on 3 July 2006, the Directors of MEM are in advanced discussions
with regard to the sale of Fountain. The Directors are confident that this sale
will conclude in the near future. The Directors believe that the TV studio is
non-core to the Group's activities and that more attractive growth opportunities
are available elsewhere. A further announcement will be made as appropriate.
Dividend
The Company intends to continue to invest in the Group's business and,
therefore, the Directors are not recommending the payment of a dividend.
Prospects
We have made a satisfactory start to the year with current trading being in line
with expectations.
With the rights to the next Ashes series in winter 2006/07 secured, new
catalogue investment and the website upgrade in process, we are confident about
the prospects for DDHE in the current year.
ScarletTV continues to make good progress for a nascent business, with a number
of commissions currently in production and others anticipated shortly.
The Board views the current year with confidence.
Brook Land
Chairman
14 July 2006
Consolidated Profit and Loss Account for the year ended 31 March 2006
Note Unaudited Audited
Year ended Year ended
31 March 31 March
2006 2005
#000 #000
Turnover
__________ __________
- Continuing operations 24,476 14,950
- Acquisitions 1 -
__________ __________
24,477 14,950
Cost of sales (12,007) (5,577)
__________ __________
Gross profit 12,470 9,373
Net operating expenses (11,585) (8,288)
__________ __________
Operating profit
__________ __________
- Continuing operations 961 1,085
- Acquisitions (76) -
__________ __________
__________ __________
Group operating profit before exceptional items 1,410 1,085
Exceptional items 4 (525) -
__________ __________
Group operating profit 885 1,085
Gain on disposal of fixed assets 6 76
Interest receivable 4 7
Amounts written off investments - (66)
Interest payable and similar charges (479) (318)
Bank facility fee written off - (161)
__________ __________
Profit on ordinary activities before taxation 416 623
Taxation on profit from ordinary activities (204) (263)
__________ __________
Profit on ordinary activities after taxation 212 360
Minority interest 25 6
__________ __________
Profit for the financial year 237 366
========== ==========
Pence Pence
Earnings per share
Basic 1.57 2.45
Diluted 1.57 2.45
========== ==========
All amounts relate to continuing activities.
The Group has no recognised gains and losses other than as disclosed above and
hence no separate statement of total gains and losses is presented.
Consolidated Balance Sheet at 31 March 2006
Unaudited Audited
2006 2005
#000 #000 #000 #000
Fixed assets
Intangible assets 4,642 2,823
Tangible assets 7,191 7,166
Investment 101 114
__________ __________
11,934 10,103
Current assets
Stock 1,742 1,136
Investment in programmes 217 390
Debtors
- due within one year 6,554 7,133
- due after more than one year 536 991
Cash at bank and in hand 794 1,618
__________ __________
9,843 11,268
Creditors: amounts falling due within one
year (7,658) (7,683)
__________ __________
Net current assets 2,185 3,585
__________ __________
Total assets less current liabilities 14,119 13,688
Creditors: amounts falling due after more
than one year (3,095) (3,026)
__________ __________
Net assets 11,024 10,662
========== ==========
Capital and reserves
Called up share capital 1,509 1,496
Share premium account 7,501 7,501
Merger reserve 137 -
Profit and loss account 1,915 1,678
__________ __________
Total shareholders' funds 11,062 10,675
Equity minority interest (38) (13)
__________ __________
Capital Employed 11,024 10,662
========== ==========
Consolidated Cash Flow Statement for the year ended 31 March 2006
Unaudited Audited
2006 2005
#000 #000 #000 #000
Net cash inflow/(outflow) from operating 1,066 (852)
activities
Returns on investments and
servicing of finance
Interest received 4 7
Interest paid (400) (324)
Bank loan arrangement fees paid (52) (126)
Interest element of finance lease
and hire purchase rental payments (10) (9)
__________ __________
Net cash outflow from returns on
investment and servicing of finance (458) (452)
Taxation
UK corporation tax paid (50) (118)
Capital expenditure and financial
investment
Purchase of intangible fixed assets (2,177) (1,586)
Purchase of tangible fixed assets (414) (502)
Proceeds from disposal of tangible fixed 19 100
assets
Proceeds from disposal of investments 22 -
__________ __________
Net cash outflow from capital expenditure
and financial investment (2,550) (1,988)
Acquisitions
Purchase of subsidiary undertakings (233) (38)
Cash acquired with subsidiary undertaking 83 5
__________ __________
Net cash outflow from acquisitions (150) (33)
__________ __________
Net cash outflow before use
of liquid resources and financing
(carried forward) (2,142) (3,443)
Net cash outflow before use
of liquid resources and financing (2,142) (3,443)
(brought forward)
Financing
Net VAT recovery on flotation costs - 22
Capital element of lease purchase rental
payments (109) (123)
Bank loans received 1,397 3,500
Bank loans repaid (1,112) (3,588)
__________ __________
__________ __________
Net cash inflow/(outflow) from financing 176 (189)
Decrease in cash in the year (1,966) (3,632)
========== ==========
NOTES TO THE PRELIMINARY STATEMENT
1 This announcement was approved by the Directors on 13th July 2006.
The preliminary results for the year ended 31 March 2006 are unaudited. The
financial information set out in the announcement does not constitute the
Company's statutory accounts for the years ended 31 March 2006 or 31 March 2005.
The financial information for the year ended 31 March 2005 is derived from
the statutory accounts for that year, which have been delivered to the Registrar
of Companies. The auditors reported on those accounts and their report was
unqualified.
2. The taxation charge for the year is #204,000, (2005: #263,000) which
comprises a #109,000 corporation tax charge in respect of the current period and
an underprovision in the prior period of #27,000. The balance is in respect of a
net deferred tax charge of #68,000 (2005: 243,000).
3. Basic earnings per ordinary share has been calculated using the
weighted average number of shares in issue during the relevant financial
periods. The weighted average number of equity shares in issue was 15,094,810
(2005: 14,964,034) and the earnings, being profit after tax, were #237,000
(2005: #366,000).
4. Group operating profit #885,000 (2005: #1,085,000) is stated after
the impact of a number of exceptional non-recurring items.
2006 2005
#000 #000
Within cost of sales:
Net loss on warehouse fire* 257 -
Within administrative expenses:
Staff termination payments** 268 -
*The net loss on warehouse arose out of a fire at the Group's principal
manufacturer of DVD and VHS disks. It is made up of a gross loss of #507,000
less insurance receipt due of #250,000.
**The staff termination payments relate to the termination costs paid to former
employees of the Group, who left during the year.
5. Reconciliation of operating profit to net cash inflow/(outflow) from
operating activities
2006 2005
#000 #000
Operating profit 885 1,085
Amortisation of goodwill and film rights 695 334
Depreciation of tangible fixed assets 367 286
Increase in stocks (606) (309)
Decrease/(increase) in investment in programmes 173 (390)
Decrease/(increase) in debtors 926 (2,656)
(Decrease)/increase in creditors (1,374) 798
______________________
Net cash inflow/(outflow) from operating activities 1,066 (852)
======================
Of the decrease in debtors, #0.28m (2005: #0.55m increase) of this balance was accounted for by the decrease in royalty
advances paid for new products by the Group.
6. Reconciliation of net cash inflow to movement in net debt
2006 2005
#000 #000
Decrease in cash in the year (1,966) (3,632)
Cash (outflow)/inflow from increase in
debt and lease financing (186) 172
______________________
Change in net debt resulting from cash flows being
Movement in net debt (2,152) (3,460)
Net debt at start of year (5,615) (2,155)
______________________
Net debt at end of year (7,767) (5,615)
======================
7. Analysis of net debt
At At
1 April Non cash 31 March
2005 Cashflow Movements 2006
#000 #000 #000 #000
Cash at bank and in hand 1,618 (824) - 794
Overdrafts (3,758) (1,142) - (4,900)
_________ ________ ________ _________
Cash (2,140) (1,966) - (4,106)
_________ ________ ________ _________
Debt due within one year (340) 165 (350) (525)
Debt due after one year (2,985) (450) 340 (3,095)
Finance leases (150) 109 - (41)
_________ ________ ________ _________
Financing (3,475) (176) (10) (3,661)
_________ ________ ________ _________
Total (5,615) (2,142) (10) (7,767)
========= ======== ======== =========
Non-cash movements comprise amortisation of issue costs relating to debt issues
and transfers between categories of finance leases.
8. Acquisition of Classroom Multimedia Limited
On 16 April 2005 the group acquired a 100% interest in the Ordinary issued share
capital of Classroom Multimedia Limited for aggregate consideration of #422,000.
In calculating the goodwill arising on acquisition, fair value adjustments been
made using provisional estimates, to the net book value of the assets of the
Company.
This purchase has been accounted for as an acquisition.
Provisional
fair value
Net book value adjustments Fair value
#000 #000 #000
Net assets acquired:
Intangible fixed assets 41 - 41
Debtors 93 (86) 7
Cash at bank and in hand 83 - 83
Creditors (4) - (4)
______________________________________________
Net assets acquired 213 (86) 127
Goodwill * 295
________
Purchase price 422
________
Satisfied by:
Cash 233
Shares 150
Deferred consideration 39
________
Cash 422
________
** Goodwill arising in the period is being amortised over its useful economic
life estimated to be 10 years.
The fair value adjustments are made using provisional estimates, based on
information available at the time the financial statements are prepared, and any
amendments necessary will be made in the following accounting period, with a
corresponding adjustment to goodwill, when the information necessary to
determine these estimates is available.
Copies of this announcement are available from the Company's registered office
at 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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