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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Enter Rights. | LSE:ERT | London | Ordinary Share | GB0008138884 | ORD 5P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.08 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:5931J Entertainment Rights PLC 26 April 2000 ENTERTAINMENT RIGHTS PLC Preliminary Announcement of Results for the year ended 31 December 1999 Entertainment Rights is a leading global integrated media group based on the creation, development and acquisition of intellectual property rights and their subsequent exploitation. * Substantial increase in turnover to #1.8 million * Losses reduced from #6.8m to #2.8 million in line with forecast made at time of fundraising in November * Intellectual property rights to Basil Brush acquired #2.3 million in an all-share transaction * Carrington Productions International acquired for #14 million in shares, doubling library of programming * Distribution division established; now far more pro- active in promoting group's properties * Long-standing litigation settled on Budgie - The Little Helicopter in USA * Sales highlights of the year include * Meeow! to CITV * Lavender Castle to CITV * Budgie - The Little Helicopter to Nickelodeon * Potsworth & Co to the BBC * Transylvania Pet Shop to Nickelodeon * The Tidings to the Cartoon Network Europe. * Zorro to the BBC * The Ugly Ducking to Channel 5 * The Snow Queen to CITV * The Snow Queen's Revenge to Channel 5 * Budgie - The Little Helicopter to Fox Family Channel USA Rod Bransgrove, Chairman of Entertainment Rights commented: 'The group is now poised to be far more pro-active in maximising the return from its enhanced catalogue of properties. We have taken considerable strides to ensure that the building blocks are in place for your Company to pursue its strategic objectives. The board will continue to identify and diligently appraise further opportunities to develop and enhance our business by acquisition, merger, joint venture or strategic alliance. We continue into the new millennium with the Company in good shape and I look to the future with considerable confidence.' Enquiries: Entertainment Rights Tel: 020 7243 4499 Rod Bransgrove / Mike Heap College Hill Tel: 020 7457 2020 Richard Pearson CHAIRMAN'S STATEMENT This Company's stated objective is to become a leading global integrated media group based on the creation, development and acquisition of intellectual property rights and their subsequent exploitation. I am pleased to report that enormous progress was made during 1999 towards the achievement of this objective. Significant trading improvements 1999 performance was in line with the forecast made at the time of the company's fund-raising last November. Turnover of #1.8 million showed a significant increase on 1998's #156,000, due in part to the rigorous re-selling of the existing catalogue of properties. The loss on ordinary activities before taxation was #2.8 million (1998 - #6.8 million), having taken account of fund raising and deal costs of #1.2 million and #782,000 of amortisation of intellectual property rights, in compliance with current reporting standard FRS10. Your directors do not recommend a dividend (1998 - nil). Important acquisitions Boom Boom Limited, which owns, in perpetuity, the exclusive license to exploit the intellectual property rights to one of the UK's best loved characters, Basil Brush, was acquired for #2.3 million in an all-share transaction. Children's intellectual property rights owner, Carrington Productions International (CPI), was acquired in December 1999 for a consideration of #14 million, satisfied by the issue of 56 million ordinary shares. As a result of the acquisition of CPI the group's library of programming was doubled, providing over 100 hours of high quality children's animation, which will produce a healthy income stream. Strengthening of board and fund raising I was delighted to welcome CPI's Chief Executive, Craig Hemmings, to the board, where he is already making a strong contribution as Executive Director with responsibility for acquisitions and production. Following the acquisition of CPI, a heavily oversubscribed Placing and Open Offer raised #13.2 million. This money will fund further library acquisitions, corporate acquisitions and new productions as and when appropriate opportunities arise. Legal Affairs In May 1999 we settled a long-standing and complex litigation with Launey Hachmann & Harris Inc, a US based marketing agency. This settlement was of particular significance in that it enabled us to re-launch Budgie - The Little Helicopter in the USA. Future plans The group is now poised to be far more proactive in maximising the return from its enhanced catalogue of properties. We have taken considerable strides to ensure that the building blocks are in place for your Company to pursue its strategic objectives. Further details of these activities will follow in the Chief Executive's Review. The board will continue to identify and diligently appraise further opportunities to develop and enhance our business by acquisition, merger, joint venture or strategic alliance. We continue into the new millennium with the Company in good shape and I look to the future with considerable confidence. Rod Bransgrove Chairman CHIEF EXECUTIVE'S REPORT As described by our Chairman, 1999 has been a period of positive change and a major re-focusing of your company. Before joining your board in an executive capacity in January 1999, I had spent some 25 years in the entertainment industry. During this time I have witnessed the significant technological advances made in both the record industry and the film industry. These technological advances, brought about by the development of Compact Disc (CD) and Digital Versatile Disc (DVD), gave rights' owners the opportunity to resell their libraries. Record and Film catalogues were rejuvenated giving their owners brand new revenue streams. The television industry has similar opportunities as a result of the introduction of digital television and distribution systems such as the Internet. Our focus at Entertainment Rights is the ownership and exploitation of intellectual copyrights across all global media. As part of this focus Entertainment Rights owns and exploits children's programme rights, in particular animation programming which not only has a truly global appeal but benefits from a new children's audience every two to three years. We aim to maximise sales of our current library and cost effectively develop new properties to join our global rights catalogue. Product succession is also important. Without a new flow of product to help invigorate and further develop our existing catalogue, revenue streams will become harder to maintain. This was evident from the state of the business in 1998, when new products had been slow to flow through to the sales team and catalogue programming had therefore been difficult to exploit. Consequently, revenue streams diminished. In order to address these issues, we immediately commenced: * stimulating catalogue sales. * improving the flow of creative ideas and new programming. * enhancing our portfolio of well-known characters. * building-up our library of rights to enable us to strengthen our sales and distribution infrastructure. We achieved all of our 1999 operational goals in a competitive market in a relatively short space of time. In particular: * the majority of our wholly owned programmes are currently on TV in the UK, USA and other international territories. * following the acquisition of Siriol (Musical Tunes Limited), our Cardiff-based animation studio, we have significantly increased the flow of creative ideas. * in July 1999, we acquired the rights to the well-known family character, Basil Brush. * with the acquisition of the CPI library we obtained 50 hours of high quality children's animation, which is entirely synergistic with our library. This library includes such classics as The Fantastic Voyages of Sinbad the Sailor, the legendary character, Zorro and Gerry Anderson's, Lavender Castle. In December 1999, our financial year culminated with a fund raising exercise, which was warmly received by existing and new investors and was heavily oversubscribed. During this period, we changed the name of your company to Entertainment Rights plc. I know, from the calls I have received from many of you, that our name-change has been very well received. 'Entertainment Rights' better explains the business we are in. In order to achieve our mission statement: 'To build a leading global integrated media group based on the creation, development and acquisition of intellectual property rights and their subsequent exploitation' we have begun diversification into a number of business divisions that are run as separate profit centres but, as a whole, will help to build up our ownership and subsequent exploitation of intellectual property rights. Creative and Production We believe in the importance of encouraging creativity - but within sensible economic parameters. To ensure we achieve a sustained flow of programme ideas our creative executives are working on the development, commissioning, production and acquisition of new programming. They work alongside our team of international sales executives who analyse the commercial potential of each project. Through our ownership of Siriol animation studios and its stewardship by its founder, BAFTA award winning writer and producer, Robin Lyons, we are able to develop test animation and pitch documents and sales literature of new programming in a cost effective manner. During the year Siriol has produced a 26 part animation series, Meeow!, for Children's ITV (CITV) and begun work on a 26 part animation series, Sali Mali, for Welsh broadcaster, S4C. Additionally, we have been busy working on the return of one of our lead characters, Basil Brush. Basil is currently 'in the country' planning his return to our TV screens. Sales and Distribution Worldwide TV distribution has performed well during 1999 focusing on repackaging and reinvigorating our library. I am pleased to tell you about the success we have had in putting a number of our shows into prime time children's TV in the UK and internationally. Some of the sales and distribution highlights of the year have been * Meeow! to CITV * Lavender Castle to CITV * Budgie - The Little Helicopter to Nickelodeon * Potsworth to the BBC * Transylvania Pet Shop to Nickelodeon * The Tidings to the Cartoon Network Europe. * Zorro to the BBC * The Ugly Ducking to Channel 5 * The Snow Queen to CITV * The Snow Queen's Revenge to Channel 5 Importantly we have set in place the restructuring of our sales and distribution division under the guidance of Jane Smith. Jane is considered one of the television industry's leading sales, distribution and co-production experts. New Programming Meeow!, a 26 part pre-school animated series, produced by Siriol is a wholly owned property, in perpetuity, worldwide. It is being screened on CITV from January 2000 where it has received ratings of over 65%. The series is based upon the best selling character Maisie MacKenzie, created by Aileen Paterson. The books have sold over 2 million copies to date. The international launch of the series was at MIPCOM in October 1999 and we look forward to revenue in 2000 and beyond. Consumer Products Consumer products will play an increasingly important role in the development of the company as we begin to see the benefit of increased character awareness via television, video and publishing exposure for our brands. This means the licensing to third parties of character rights such as Budgie - The Little Helicopter for a wide range of consumer products such as video, toys, books and clothing. This is designed to give a strong revenue flow and reinforces the consumer awareness of these characters on a global basis. New Media We at Entertainment Rights are very aware and equally well positioned to capitalise on new media. Internet service providers, broadband distributors and digital TV channels need content. We have content, wholly owned and readily available for distribution. As we begin to establish our characters and programmes on air, we will further develop our internet strategy to communicate direct to the consumer. We will use this medium to build brand awareness and loyalty, exposing the consumer to more than just the programme content but also to a whole myriad of e-commerce opportunities. Where practical, we will use web-sites as a valuable research and development facility showing test animation, programme ideas and character concepts, encouraging feedback at the earliest possible stage. For those of you already familiar with 'surfing the net' please visit our web site on www.entertainmentrights.com and view our library of programming. Current Trading and Future Prospects 1999 has indeed been a period of change and growth. We have taken enormous strides in building revenues and cutting losses. There continues to be growth in international TV distribution and new media opportunities. We are pleased to tell you that Budgie - The Little Helicopter is back on US TV, giving Budgie access to 74 million homes via the Fox Family Channel. We have recently announced the signing of a 26 part series - Cubeez. The Cubeez is a state of the art computer generated animation series featuring four loveable magical cubes. The series will debut on GMTV in July 2000. Entertainment Rights owns in perpetuity all intellectual property exploitation rights. Beany and Cecil, a 78 part animated series, created by Bob Clampett who is one of the founding fathers of the classic Warner Brothers cartoons creating Looney Tunes, Tweety Bird and Porky Pig, becomes part of our international library of programming. We have strong management and experienced executives in all our business sectors. Therefore we believe your company is extremely well positioned to exploit characters, character brands and programming rights, and to grow both organically and by acquisitions. I hope that having read my review you feel - as I do - encouraged by the future prospects for your company. Mike Heap Chief Executive CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 December 1999 1999 1998 audited audited Notes # # TURNOVER 1,817,242 156,420 Cost of sales (1,087,823) - GROSS PROFIT 729,419 156,420 Administrative expenses (3,628,799) (6,966,629) OPERATING LOSS (2,899,380) (6,810,209) Operating loss before exceptional (2,204,296) (2,064,722) goodwill amortisation Exceptional goodwill amortisation (695,084) (4,745,487) Exceptional item - profit on sale of 79,033 - fixed asset investment Interest receivable and similar 37,727 827 income Interest payable and similar charges (64,482) (30,356) LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (2,847,102) (6,839,738) Taxation - 4,165 LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (2,847,102) (6,835,573) RETAINED LOSS FOR THE FINANCIAL YEAR TRANSFERRED TO 4 RESERVES (2,847,102) (6,835,573) LOSS PER ORDINARY SHARE - Basic 3 (2.82p) (22.39p) All of the above figures are for continuing operations. There are no recognised gains or losses other than those reported above. CONSOLIDATED BALANCE SHEET as at 31 December 1999 Notes 1999 1998 audited audited # # FIXED ASSETS Intangible assets 9,962,399 788,385 Tangible assets 8,976,625 363,438 Associates 22 102 18,939,046 1,151,925 CURRENT ASSETS Programme development costs 285,319 786,070 Debtors 733,386 342,503 Cash at bank and in hand 11,199,335 20,432 12,218,040 1,149,005 CREDITORS: Amounts falling due within one year (1,562,424)(2,520,161) NET CURRENT ASSETS/(LIABILITIES) (10,655,616)(1,371,156) TOTAL ASSETS LESS CURRENT 29,594,662 (219,231) LIABILITIES CREDITORS: Amounts falling due after more than one year (82,669) (451,656) 29,511,993 (670,887) CAPITAL AND RESERVES Called up share capital 4 10,612,532 3,763,376 Share premium account 4 18,092,244 5,978,906 Merger reserve 4 14,067,488 - Profit and loss account 4 (13,260,770)(10,413,668) Equity shareholders' funds 29,511,494 (671,386) Minority interest 499 499 29,511,993 (670,887) CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 December 1999 1999 1998 audited audited Notes # # NET CASH OUTFLOW FROM OPERATING ACTIVITIES 2 (3,198,298) (702,750) RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received 37,727 827 Interest paid (64,482) (30,356) Net cash outflow from investments and servicing of finance (26,755) (29,529) TAXATION UK corporation tax (paid)/repaid (including ACT) (3,428) 29,414 CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Payments to acquire intangible fixed (20,543) - assets Payments to acquire tangible fixed (256,301) - assets Receipts from sale of fixed asset investment 79,113 - Net cash outflow from investing activities (197,731) - ACQUISITIONS Purchase of subsidiary undertakings - net overdraft acquired (21,440) (84,924) EQUITY DIVIDENDS PAID - - NET CASH OUTFLOW BEFORE MANAGEMENT OF LIQUID RESOURCES AND FINANCING (3,447,652) (787,789) MANAGEMENT OF LIQUID RESOURCES Cash placed on fixed term deposit (10,000,000) - account FINANCING Issue of shares 15,364,736 142,793 (Repayment)/Issue of loan notes (370,000) 370,000 Capital element of finance lease (16,587) - rental payments Repayment of borrowings (6,978) - NET CASH INFLOW FROM FINANCING 14,971,171 512,793 INCREASE/(DECREASE) IN CASH 1,523,519 (274,996) NOTES 1. Accounts The financial information set out above does not constitute the Company's statutory accounts within the meaning of section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 December 1998 from which the 1998 information has been extracted, carried an unqualified audit report and have been delivered to the Registrar of Companies. Statutory accounts for the year ended 31 December 1999 which carry an unqualified audit report and from which the 1999 information has been extracted, will be posted to shareholders on or around 15 May 2000 and, after adoption at the Annual General Meeting, delivered to the Registrar of Companies. Further copies of the Statutory Accounts may be obtained from the Company's Registered Office, 58-60 Berners Street, London W1P 4JS. 2. Reconciliation of operating loss to net cash outflow from operating activities 1999 1998 # # Operating loss (2,899,380) (6,810,209) Depreciation and amortisation 168,399 9,570 Loss on disposal of tangible fixed assets 2,361 - Amortisation of goodwill on acquisition 695,084 4,745,487 Decrease/(increase) in programme 500,751 (87,324) development costs Capitalisation of own assets (596,538) - (Increase)/decrease in debtors (337,614) 236,372 (Decrease)/increase in creditors (731,361) 626,564 Capitalisation of debt - 576,790 (3,198,298) (702,750) 3. Loss Per Ordinary Share The calculation of loss per ordinary share is based on the consolidated loss after tax for the year of #2,847,102 (1998 - loss #6,835,573) and on 100,828,095 (1998 - 30,534,762) ordinary shares, being the weighted average number of ordinary shares in issue during the year. The weighted average numbers of shares have been calculated by taking into account the bonus element of the rights issue during the year. This has had the effect of increasing the weighted average number of shares by 767,729 (1998 - 309,763). In view of the loss for the year, the share options are anti- dilutive and therefore a diluted earnings per share is not presented. 4. Reconciliation of shareholders' funds and movements on reserves Share Share Merger Profit Total capital premium Reserve and loss account account # # # # # Group At 1 January 3,763,376 5,978,906 - (10,413,668) (671,386) 1999 Loss for the - - - (2,847,102) (2,847,102) year Issues of shares 6,849,156 - - - 6,849,156 Premium arising on issues of shares - 12,113,338 14,067,488 - 26,180,826 At 31 December 10,612,532 18,092,244 14,067,488 (13,260,770) 29,511,494 1999 5. Analysis of changes in net (debt)/funds At 1 Cash flow Non cash At January changes 31 1999 December 1999 # # # # Cash at bank and in 20,432 1,178,903 - 1,199,335 hand Bank overdrafts (586,637) 344,616 - (242,021) (566,205) 1,523,519 - 957,314 Cash Deposits - 10,000,000 - 10,000,000 Debt (73,890) 6,978 - (66,912) Loans (370,000) 370,000 - - Lease contracts (25,411) 16,587 (30,600) (39,424) (1,035,506) 11,917,084 (30,600) 10,850,978 5 Accounting Policies The principal accounting policies of the group have remained unchanged from the accounts of the previous year, expect for the following: a) Development expenditure and goodwill An annual impairment test is undertaken on the group's investment in films to ensure that the recoverable amount has not fallen below the carrying value. This policy replaces the previous policy where films were assessed on an individual basis. No adjustment or prior year adjustment results from this change. b) Turnover Income recognised on owned television programme series in production, but not complete at the year-end, is now recognised in the proportion that costs to date bear to the estimated total programme production costs, after assessing that programme completion can be reasonably foreseen and is in line with the contractual arrangements. This policy replaces the previous policy where invoices raised on account of such productions in progress were not reflected in turnover until such productions were completed. No adjustment or prior year adjustment results from this change; the prior year policy continues to be applied to other productions in progress. END FR SESSAMSSSELL
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