Datatec Share Discussion Threads

[davidcod] 09/12/2005 09:11

Immediate Release: 09 December 2005

Digital Classics plc

('Digital Classics' or the 'Company')

Acquisition of Box TV Limited ('Box TV') and NBD Holdings Limited ('NBD')

Digital Classics plc is pleased to announce that it has today signed agreements
to acquire two profitable companies as the first steps of a strategy to
transform the Group into a television production and distribution powerhouse.
These acquisitions are designed to give the Group critical mass and to exploit
the recent legislative changes in the UK TV industry. The acquisitions are: Box
TV Limited, for a total consideration of £6.12 million, payable as to £3.06
million in cash and as to £3.06 million by the issue of 382,500,000 new
ordinary shares of 0.1p in the Company ('Ordinary Shares'); and NBD Holdings
Limited, for a maximum total consideration of £1.46 million, payable as to £
0.365 million in cash upon completion and as to £0.73 million by the issue of
91,250,000 new Ordinary Shares, plus up to a further £0.365 million in cash
following the fulfilment of certain performance criteria (the 'Acquisitions').
The Acquisitions are conditional on the admission to trading on AIM of the
473,750,000 new Ordinary Shares being issued in consideration for the
Acquisitions. Application has been made for these 473,750,000 new Ordinary
Shares to be admitted to trading on AIM and dealings are expected to commence
on 13 December 2005.

The acquisitions are expected to be earnings enhancing in their first full year
of consolidation.

Box TV

Box TV is a profitable, independent producer of award winning drama programmes
such as `Sunday', `Gunpowder Treason and Plot' and `Sweeney Todd', the new
Christmas drama starring Ray Winstone for BBC1. It is headed by Gub Neal, one
of the UK's top drama executives who previously ran the drama departments at
Granada and Channel 4. The Directors believe that the structural changes to the
UK TV industry brought in by the 2004 Ofcom Code of Practice provide a
lucrative opportunity under which UK broadcasters must now allow television
production companies to exploit the ancillary and overseas rights to their own
programmes. These rights can be valuable assets. The Directors believe that
drama producers are amongst the biggest beneficiaries of these legislative
changes.

Digital Classics has an existing subsidiary (Digital Classics Distribution
('DCD')) that distributes audio-visual content to TV channels, DVD, and new
media and it is anticipated that the consolidation of Box TV into the Digital
Classics group will enhance the performance of DCD. Box TV has a new slate of
programmes in development, pre-production and production which is expected to
generate sizeable revenues. The three directors of Box TV have signed new
service agreements whereby they have agreed to work for Box TV for a minimum of
three years, and their Ordinary Shares cannot be traded for two years.
Additionally, it is anticipated that upon completion Justin Thomson-Glover, a
director of Box TV, will join the board of Digital Classics.

In the 17 months ended 31 March 2005, Box TV made a loss before tax of £829,195
on turnover of £1,566,878. In the year ended 31 October 2003, Box TV made a
profit before tax of £1,420,916 on turnover of £55,057,082. The value of the
assets being acquired is £115,153.

NBD

NBD Holdings Limited, which was founded 22 years ago by Nicky Davies Williams,
is the holding company for its subsidiary NBD Television Limited ('NBD TV').
NBD TV is a profitable distribution company operating predominantly in the rock
music market and specialising in selling rights inter alia to popular music
programmes and events. NBD TV currently exploits approximately 600 hours of
programmes, with many new titles added each year. Its catalogue contains
programmes featuring Paul McCartney, Elvis Presley, Live Aid, the Glastonbury
Festival and many others.

Digital Classics anticipates economies of scale and multiple cross-selling
opportunities in its distribution division as its existing library works
closely together in the future with the NBD TV library. The Directors expect a
much expanded client base to follow from this acquisition. As with Box TV,
NBD's directors have signed new service contracts whereby they have agreed to
work for NBD for a minimum of three years, and their shares cannot be traded
for two years. Upon completion, it is anticipated that Nicky Davies Williams, a
director of NBD, will join the board of Digital Classics.

In the year ended 31 August 2005, NBD made a profit before tax of £176,954 on
turnover of £2,964,000. The value of the assets being acquired is £861,817.

The cash portion of the consideration for the Acquisitions is to be funded
through an initial subscription for £4.0 million of convertible loan notes by
Highbridge Capital Management, LLC. Shareholder approval of the convertible
nature of the loan notes will be required and further information in this
regard and a notice convening an Extraordinary General Meeting will be sent to
shareholders in due course.

Digital Classics' Chief Executive Chris Hunt said,

'I am delighted that two companies who are among the best in their fields are
joining us. This is a major step forward in creating a television production
and distribution powerhouse. These deals represent, we believe, good value for
shareholders and also have the potential to add considerable commercial
synergies to the business. The potential for Box TV's dramas to be distributed
internally by the expanded group is only one such instance. These acquisitions
form part of our strategy to grow and expand our range of programming, and I
welcome the outstanding talents in both companies who will be joining us on
this road.'

NBD's Director and Founder Nicky Davies Williams said,

'We are excited at the prospect of working with two such outstanding companies
in their respective fields and feel that this unique combination of companies
strengthens all our footholds in the international programming marketplace. We
envisage great benefits to both the new group of companies and NBD's existing
clients.'

Box TV's Director and Founder Gub Neal added,

'It's a great opportunity for Box TV Ltd to be joining the forces of both
Digital Classics and NBD, at a time when the exploitation of programming rights
has become a truly valuable and exciting prospect. The combined strengths of
all three of these companies will give real muscle in the game ahead and
presents an outstanding opening for real diversification and growth in the
enhanced value of international TV rights.'

For further information please contact,

Chris Hunt, Chief Executive

Digital Classics plc

Tel. [phone]

Ben Simons / Adam Reynolds

Hansard Communications

Tel. [phone]

[investorjon] 08/12/2005 10:01

I'm expecting good things of Iain Thompson too. Just ONE successful show could bring DTC to life, but I'm sorry but I'm still not sure of CH's commitment to DTC rather than to his own pocket, and David's intrigue has added further to that concern.

DTC the company could and should be really successful, but it has to have a CEO committed to it, committed to using any ideas for the benefit of DTC, rather than through what has been the modus operandi further called into question by David's comments which if I'm interpreting correctly (and I may not be) suggest CH personally wanted a cut out of the MJ doc, which I find extraordinary but which I have seen nothing to confirm that, but I can't believe David would infer that without some sort of knowledge.

I'm afraid it's getting all too muddy for CH, we can't keep on giving the benefit of the doubt, and whilst I agree about the last RNS and the savings are great, but if the savings of £400,000 etc. are being made, and £700,000 for a placing for a DVD subsidiary when the whole caboodle is being handled by Vital, and all the other successful comments in the RNS, then why has the loss gone up by another £200,000.

Sadly it isn't savings that make a company, its profits, and DTC are actually further away, irrespective of the good news.

Again we see in the comments veiled murmurs that the assets of the company are worth a lot more than is stated....virtually suggesting that the books are not accurate which in City circles does not bode that well and is would, if true be outside of proper accounting rules where the accounts are supposed to be a true and accurate picture of a company's trading position.

I just don't subscribe to the constant spin spin spin, when the profits don't follow that spin time and time again. It's always been jam tomorrow, but what do we get tomorrow....further good statements, but greater losses.

DTC should be THE company, it should be making wads of cash, it should have Board members and a CEO totally comitted to pushing DTC and its wholly owned subsidiaries, save in the knowledge that the best pay off will be by raising the profile of the company, by making profits, where large shareholders and small shareholders alike stand to make much more by the profitability of DTC than by going off on private money making excursions, but still using DTC as a vehicle for the paycheck.

Any shareholders with the sort of holding CH has, in the position that CH has, would gain so much more by the increase in DTC's share price and possible subsequent dividends, so these apparent attempts to earn a bit on the side (on several occasions) seem pointless and send out the wrong message.

I'd certainly like qualification about the comments on the MJ doc, although I am still considering giving the DTC shares away and I'd be happy for details of worthy charities. So far my favoured one is the Rocking Horse Appeal.

[michaelmouse] 07/12/2005 20:29

IJ - It will be interesting to see what IP Entertainment come up with.
Apparently "I'm a Celebrity, Get Me Out Of Hear" achieved its largest ever audience for the latest series. Clearly reality t.v. has a longer shelf life than some pundits were predicting. Even better is the fact that Iain Thompson was the Producer of this show whilst he was with ITV, let's hope he can produce a show which achieves similar success for DTC.
Bought a copy of the T.V. Times (Christmas addition) today. The ABBA production (Tuesday 20th 9:00p.m - 10:30p.m.) gets plenty of coverage and a three star rating (good in parts). I hope we'll all be watching!

Best Wishes
Michael.

[chinakett] 07/12/2005 17:35

Gumberr,
Just read your post, so a bit late now. Soz.
China.

[michaelmouse] 07/12/2005 17:32

"Digital Classics Distribution

After less than five months of trading during the current financial year, over
55% of the projected annual turnover is contracted or in draft contract form,
with the overhead costs running at an annualised amount of £450,000 less than
at the same point last year. Taking into account the seasonality of this
business, which sees comparatively little trading occur during the summer
months, the Directors are pleased with this progress."

IJ - I have also re-posted the trading statement. The acquisition of RM does appear to be paying dividends.

[michaelmouse] 07/12/2005 17:28

"RM Distribution side look a little defunct if they are not going to distribute DTC products"
IJ - I think you are getting confused with two distinctly different areas of distribution?
DTC deals with broadcasters whereas Vital distributes to retailers.

"Credit to Vital though, they seem to have got the DVD's on the shelves in a lot of places, which must be good."
This is clearly why DTC have chosen them. It would take DTC considerable time and effort to establish links and agree terms directly with retailers.

[investorjon] 07/12/2005 16:11

Checked out Vital. What is a bit nuts is that it does the whole caboodle, labelling marketing distribution etc., so why if we've used Vital has it cost some £700,000 for our DVD subsidiary, and as suggested RM Distribution seem nowhere in the equation.

Vital get the masters and do the rest. Do like some of the other titles they have though. They only have about 77 titles, but some pop genre, including big names.

Be good to get a statement though just to reassure that there are no as yet undisclosed conflicts of interest or pecuniary interests by CH in Vital, although to be fair I've nothing to suggest he has.

Can't quite see the value from RM Distribution, if we are using outside interest that DTC obviously consider more professional to the job in hand.

Credit to Vital though, they seem to have got the DVD's on the shelves in a lot of places, which must be good.

Take a look at some of the offerings and the welcome to Digital Classics. Can't do DTC any harm to be associated here and I wonder if Vital (if there are no ties already) could be one of the potential 'acquisitions' as they seem to do the business and with some high profile goods, but excuse my scepticism over any conflicts, but I just like to make sure for the avoidance of any doubt or future misunderstanding:

[investorjon] 07/12/2005 15:03

Nice to see DTC DVD at Woolies today, although I had a word with head office (bought in to Woolies a little while ago), and find there are 3 different distributor levels, which will be costly. RM Distribution don't seem to be doing it, and the Tesco end isn't such a problem because Woolies distribute their DVD's anyway, but there seems to be another company involved in distribution?

Anyone know more about this? Could easily be a mutually beneficial deal, and in any event for the first tranche could be justified anyway just to get DTC out there, but makes RM Distribution side look a little defunct if they are not going to distribute DTC products.

Exposure is the name of the game though, so I'm not that worried by it, just interested.

Looking a little oil & gas play at present sitting in the doldrums. Might Represent Profit.

Just to get them to the likes of Tesco, Woolies etc. is a job well done though.

[gumberr] 07/12/2005 13:19

Thanks ChinaKett do you have level 2 for RTD -is it strong? thanks again!

[chinakett] 07/12/2005 12:12

Gumberr,

2 MM's @ 370.0 v 1 @ 377.0

China

[gumberr] 07/12/2005 09:45

sorry to be off topic but anyone got level 2 for GVC please -thanks!

[investorjon] 06/12/2005 12:04

Gary: Your comments about money are something I think we all tend to forget until rudely awakened.

Thanks

[Abuse team] 05/12/2005 22:07

Post removed by ADVFN

[garysmith7] 05/12/2005 21:35

Michael,
Yes you would think so wouldn't you, but my observation is that nearly all trades appeared to be sells to the MM's (as they were at the bid price) yet the MM's didn't seem to want your shares today as I could only sell 50K online.
Plus L2 seemed to look like a MM co-ordinated moving of the shareprice upwards..

Anyway any move in the upward direction is good news so I won't over analyze it...

IJ at the end of the day its only money, life is far more precious...

[jabberstocky] 05/12/2005 12:45

Not sure if this has already been posted, but the Sept - Nov newsletter is now on the web site.

[grant goodwin] 05/12/2005 10:50

ops buy john

[johnmp] 05/12/2005 10:48

by by or buy gg

[grant goodwin] 05/12/2005 10:37

Maybe david Elstein will by a shed load of dtc shares now.

[jabberstocky] 05/12/2005 10:19

David Elstein is a director of NTL.