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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Metrodome Grp. | LSE:MRM | London | Ordinary Share | GB0002937141 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.25 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMMRM
RNS Number : 4692E
Metrodome Group PLC
30 May 2012
30 May 2012
Metrodome Group Plc
("Metrodome" or the "Company")
Preliminary Results for the year to 31 December 2011
Metrodome is pleased to announce its preliminary results for the year ended 31 December 2011.
Financial highlights
Hot Features
Premium
-- Revenue up 21% to GBP16.8 million (2010: GBP13.9 million)
-- Underlying EBITDA* of GBP220,000 (2010: GBP807,000)
-- GBP967,000 of new capital raised
-- Profit before tax (excluding Target Entertainment) of
GBP412,000
*Underlying EBITDA consists of earnings from continuing operations before exceptional items, interest, tax, depreciation, amortisation of software costs and amortisation of acquired intangible assets.
Operational highlights
-- Acquisition of Hollywood Classics Ltd for GBP1.8 million
-- Disruption of film distribution business due to Sony fire
-- Target Entertainment Ltd placed into administration in
February 2012
-- Oscar nomination for "In Darkness" in February 2012
Strategic highlights
-- Represents classic film libraries of the major studios
via Hollywood Classics
-- Represents an additional 700 independent films via Hollywood
Classics
Mark Webster, Executive Chairman of Metrodome, commented:
"The period under review saw strong performances from Hollywood Classics and Metrodome Distribution. Both divisions were profitable and their continued growth at the start of 2012 bodes well for the rest of the year. The administration of Target Entertainment whilst regrettable was necessary to safeguard the remaining divisions of the Group and having taken decisive action we look to the future with confidence."
For further information please visit www.metrodomegroup.com, or contact:
Metrodome Group plc Mark Webster / Deborah Brown Tel: 020 7535 7300 Charles Stanley Securities Dugald J. Carlean / Karri Vuori Tel: 020 7953 6000 Tavistock Communications John West / Simon Compton Tel: 020 7920 3150
Statement
Metrodome is pleased to present its results for the year ended 31 December 2011.
Metrodome is a fully integrated rights management and distribution business which provides its industry expertise to maximise revenues for producers of film and TV content across all distribution platforms. As a business we excel in creating bespoke, cost effective release strategies to maximise returns for all stakeholders. We pride ourselves on our unrivalled market knowledge and ability to adapt to our clients' needs in a fast changing media landscape. We also pride ourselves on our ability to provide the very best in marketing, press and sales, delivering exceptional release campaigns for quality movies that capture the imagination of audiences.
Our expansion into co-production has been successful. We released Age of the Dragons in March and Age of Heroes in June, our first two co-production deals.
Acquisition of Hollywood Classics Ltd
On 11 August 2011, Metrodome acquired the entire share capital of Hollywood Classics Ltd. Founded in 1984, Hollywood Classics is a film sales agency business. It represents the classic film libraries of the major Hollywood studios such as Universal, Paramount, Twentieth Century Fox and Warner Bros, as well as independent producers.
Metrodome acquired Hollywood Classics Ltd for cash consideration of GBP1.8 million, funded via the issue of GBP800,000 ordinary shares placed with both institutional and individual investors, GBP800,000 provided by a Coutts bank loan of EUR930,000 and GBP200,000 from the Group's resources.
We are delighted to have taken this second step in our acquisition strategy designed to both strengthen our current operations and broaden our range of activities.
The fair value of the assets and liabilities acquired is shown in note 2, which generated a gain from a bargain purchase of GBP504,000, following the adjustments to Hollywood Classics' results, assets and liabilities to comply with Group accounting policies and International Financial Reporting Standards as adopted in the EU (IFRS). The excess has been recognised immediately as income in 2011 as an exceptional item due to its one-off nature and size.
We consider Hollywood Classics' film sales agency business to be a separate operating segment to the existing film and TV distribution businesses and the board monitors the performance of the three businesses separately as well as a whole. The results by segment are provided in note 3.
Hollywood Classics is a long established business and there is great potential for it to become more profitable. We intend to steadily grow the existing sales agency part of the business and we see opportunities for selling new films as well as expanding film distribution.
Discontinuation of Target Entertainment Ltd ("Target")
The acquisition of Target fulfilled a strategic aim to diversify away from film distribution. We were aware of the risks of acquiring a library which had lacked investment and relied on the ability of the management team to generate sufficient profits to settle the significant amounts owed to producers over time. As in previous years, Target expected to generate 50% of its annual revenue in the last quarter. Target experienced tougher than expected trading conditions in this final quarter due to a marked slowdown in European markets. There was no clear visibility of the underperformance until December when the expected deals failed to materialise.
Target was placed into administration on 28 February 2012 because it had accumulated losses and needed significant funding to meet its current liabilities and acquisition of new programming in order to become profitable. Metrodome decided it was not in the best interests of the Company to provide this level of continued support for its loss-making subsidiary. It was a difficult but necessary decision in order to safeguard the future of the remaining profitable trading divisions of the Group. Metrodome was owed GBP2.8m when the joint administrators were appointed.
Under IFRS we are required to impair the assets, mostly goodwill and the fair value of the TV library, which has resulted in the Statement of Financial Position showing net liabilities as at 31 December 2011. When the net current liabilities are no longer consolidated from 28 February 2012, the consolidated Statement of Financial Position will show a net asset position.
The table below illustrates the effect of Target on the consolidated Statement of Financial Position as at 31 December 2011.
Metrodome Target Owed by Target Per Statement
excluding to Metrodome of
Target Financial Position
GBP'000 GBP'000 GBP'000 GBP'000
Assets 11,323 4,994 - 16,317
Liabilities (10,280) (13,254) 2,823 (20,711)
---------------------------- ----------- --------- --------------- --------------------
Net assets / (liabilities) 1,043 (8,260) 2,823 (4,394)
---------------------------- ----------- --------- --------------- --------------------
Operating performance
The film segments have been profitable this year (note 3). Profit before tax of the business excluding the impact of Target was GBP412,000 (2010: GBP438,000 loss).
Metrodome released six theatrical titles to cinemas in 2011 plus 19 one-print releases to launch the DVD. The highlights included Rabbit Hole, starring Nicole Kidman who was nominated for an Oscar for her performance, and Stakeland, a gritty vampire thriller.
The Group released 65 titles during the year, including:
-- Secret in their Eyes (2011 Oscar winner in the foreign
language category)
-- Age of the Dragons
-- Barbarossa
-- Age of Heroes
-- Stakeland
The fire at the Sony Distribution centre in Enfield during the riots in August 2011 had a significant impact on DVD sales in the second half of the year. The insurance claim for the loss of stock was finalised in early 2012 resulting in no loss to Metrodome.
A full breakdown of the Group's total revenue is as follows:
Year ended % of Year ended % of Growth
31 Dec 11 Revenue 31 Dec 10 Revenue Year on Year
Revenue GBP'000 % GBP'000 % %
Cinema Sales 348 2.1% 742 5.3% (53.1)%
Television Sales 6,711 40.0% 4,871 35.1% 37.8%
Video on Demand 1,110 6.6% 1,089 7.9% 1.9%
Other ancillary income 210 1.3% 72 0.5% 191.7%
DVD Rental 344 2.1% 296 2.1% 16.2%
DVD Sell Through 6,950 41.3% 6,460 46.6% 7.6%
Consumer Products 1,102 6.6% 346 2.5% 218.5%
---------- -------- ---------- -------- -------------
16,775 100.0% 13,876 100.0% 20.9%
========== ======== ========== ======== =============
Total revenues of GBP16,775,000 were 21% higher than the same period last year (2010: GBP13,876,000) which is in line with our strategy to grow organically and by acquisition.
The UK film distribution segment achieved annual revenues of GBP8,243,000 (2010: GBP8,798,000), a drop of 6.3% year on year. Annual comparisons have not been provided for the other segments because they were acquired mid-year.
Cost base
The Group is constantly reviewing its operating structure and cost base in an attempt to improve operational effectiveness and achieve efficiencies. We are regularly reviewing key contracts with suppliers, with a view to maintaining high standards and further cost reductions.
We moved out of our office in Leicester Square in March 2011 into Target's existing office in Edgware Road which has spare capacity for additional staff as we expand. Hollywood Classics also moved into the Edgware Road office in February 2012. As such, we will ultimately achieve significant cost savings by combining offices and reducing overheads.
Exceptional items
The Group amortised GBP1,128,000 (2010: GBP432,000) of the fair value of the TV distribution library acquired on the acquisition of Target. Following the decision to place Target into administration the Group also impaired this library by GBP3,513,000 and wrote off GBP3,413,000 of goodwill arising on the acquisition of Target. These impairments have been identified in the Income Statement as exceptional items due to their size and non-cash nature. An additional GBP11,000 has been impaired in relation to Target's property, plant & equipment and software costs. The carrying value of these assets has thereby been reduced to GBPnil because Target was placed into administration on 28 February 2012. The total amount impaired in relation to Target was therefore GBP6,937,000.
A gain of GBP504,000 from the bargain purchase of Hollywood Classics Ltd has been credited to the income statement.
During 2011 Metrodome incurred GBP325,000 of legal and professional fees in respect of the acquisition of Hollywood Classics Ltd and additional one-off charges (2010: GBP449,000 in respect of Target and additional one-off charges).
The Group incurred GBP64,000 of redundancy payments and termination costs in respect of the staff re-organisation in the TV distribution segment of the business during the year (2010: GBP497,000 in film and TV segments).
In March 2011 Metrodome moved into the offices of Target Entertainment in Edgware Road. Metrodome incurred GBP39,000 for the write down of fixtures and fittings in the old office. Other costs of the office move are presented in operating expenses.
Funding
The Company raised GBP967,000 of new capital through the issue of 48,350,000 ordinary shares at 2 pence each.
In addition, GBP800,000 of Convertible Loan Notes were converted into equity at a price of 2p per share - GBP400,000 from Metrodome BV (an investment vehicle controlled by Adrian Sarbu) and GBP400,000 from Mark Webster - resulting in the issue of a further 40,000,000 new ordinary shares. A further 7,500,000 shares were issued at a price of 2p per share to satisfy fees due to Peter Urie (GBP125,000) and Steve Winetroube (GBP25,000).
The Company also secured EUR930,000 of additional loan facilities from its bankers, Coutts & Co.
Board changes
On 11 August 2011 Steve Winetroube moved from his role as a Non-Executive Director to a full-time role as Chief Operating Officer for the Group. In addition, Peter Urie moved into a full time role as Chief Executive Officer of Hollywood Classics.
Luke Johnson joined the board with effect from 1 September 2011 as a non-executive director.
Outlook
Metrodome's intention is to become the largest independent "global" rights management group in the UK with expertise in independent film production, classic film exploitation and UK distribution.
We see co-production as an ideal way of securing product for the home entertainment market in 2013 and beyond.
Significant theatrical releases for Metrodome in 2012 include; Agnieszka Holland's Oscar nominated "In Darkness", which was released in cinemas on 16 March and Berlin Film Festival two-time award winning period epic "A Royal Affair", starring Mads Mikkelsen and Alicia Vikander. Furthermore, we plan to release "Lovely Molly" from the director of "The Blair Witch Project" and Jo Nesbo's "Jackpot" later this year. Significant DVD releases include "Grave Encounters", "Crusaders" and "Before the Fall".
The failure of Target in early 2012 was disappointing but the disposal has stabilised the underlying business and we have a strong platform for growth in 2012 and beyond. We are actively seeking other suitable opportunities to diversify into related activities.
Mark Webster
Chairman
30 May 2012
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2011
Year ended Year ended
31-Dec-2011 31-Dec-2010
Notes
GBP'000 GBP'000
Revenue 16,775 13,876
Cost of sales (12,802) (10,282)
Gross profit 3,973 3,594
Operating expenses (11,962) (4,225)
Operating loss (7,989) (631)
Analysed as:
Underlying EBITDA 4 220 807
Exceptional items 7 (6,861) (946)
Depreciation and amortisation of
software costs (85) (60)
Amortisation of acquired intangibles (1,263) (432)
-------------------------------------------- ----- ----------- -----------
(7,989) (631)
-------------------------------------------- ----- ----------- -----------
Investment income 7 1
Finance costs (267) (36)
-------------------------------------------- ----- ----------- -----------
Loss before income tax expense (8,249) (666)
Income tax expense 8 (72) (14)
-------------------------------------------- ----- ----------- -----------
Loss for the year (8,321) (680)
-------------------------------------------- ----- ----------- -----------
Attributable to
Equity holders of parent (8,309) (672)
Non-controlling interest (12) (8)
-------------------------------------------- ----- ----------- -----------
(8,321) (680)
Other comprehensive income net of
tax:
Exchange differences arising on translation (18) (1)
-------------------------------------------- ----- ----------- -----------
Total comprehensive income for the
year (8,339) (681)
-------------------------------------------- ----- ----------- -----------
Attributable to
Equity holders of parent (8,327) (673)
Non-controlling interest (12) (8)
-------------------------------------------- ----- ----------- -----------
(8,339) (681)
-------------------------------------------- ----- ----------- -----------
Loss per share
Basic 5 (3.8)p (0.4)p
Diluted 5 (3.8)p (0.4)p
Consolidated Statement of Financial Position
As at 31 December 2011
31-Dec-2011 31-Dec-2010
Notes
GBP'000 GBP'000
Non current assets
Property, plant and equipment 171 145
Intangible assets 16 20
Goodwill 2 - 3,413
Film and TV distribution library 9 3,502 6,562
Producer relationships 2,189 -
Trade and other receivables 330 669
---------------------------------- ----- ----------- ------------
6,208 10,809
---------------------------------- ----- ----------- ------------
Current assets
Inventories 85 53
Trade and other receivables 9,314 7,481
Cash and cash equivalents 710 764
10,109 8,298
---------------------------------- ----- ----------- ------------
Total assets 16,317 19,107
---------------------------------- ----- ----------- ------------
Current liabilities
Trade and other payables (17,277) (13,847)
Current income tax liabilities (272) (36)
Borrowings 10 (2,061) (183)
---------------------------------- ----- ----------- ------------
(19,610) (14,066)
---------------------------------- ----- ----------- ------------
Non current liabilities
Trade and other payables (171) (388)
Deferred income tax liabilities (342) -
Borrowings 10 (588) (2,412)
---------------------------------- ----- ----------- ------------
(1,101) (2,800)
---------------------------------- ----- ----------- ------------
Total liabilities (20,711) (16,866)
---------------------------------- ----- ----------- ------------
Net (liabilities) / assets (4,394) 2,241
---------------------------------- ----- ----------- ------------
Equity
Share capital 2,806 1,847
Share premium account 3,653 2,890
Share option reserve 37 47
Equity reserve 160 270
Translation reserve (19) (1)
Accumulated losses (10,930) (2,723)
---------------------------------- ----- ----------- ------------
Capital and reserves attributable
to equity holders of the parent (4,293) 2,330
Non-controlling interest (101) (89)
Total equity (4,394) 2,241
---------------------------------- ----- ----------- ------------
Consolidated Statement of Changes in Equity
For the year ended 31 December 2011
Share Share Share Non-
capital premium option Equity Translation Accumulated Controlling Total
account reserve reserve reserve losses Sub-Total Interest Equity
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2010 1,847 2,890 181 - - (2,205) 2,713 - 2,713
-------------------------- -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
Loss for the year - - - - - (672) (672) (8) (680)
Exchange differences
arising
on translation of
overseas
operations - - - - (1) - (1) - (1)
-------------------------- -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
Total comprehensive
income
for the year - - - - (1) (672) (673) (8) (681)
-------------------------- -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
Transactions
with owners
Equity component of
convertible
loan notes - - - 270 - - 270 - 270
Share options forfeited
during
the year - - (154) - - 154 - - -
Share based payment
charge
for the year - - 20 - - - 20 - 20
-------------------------- -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
- - (134) 270 - 154 290 - 290
Changes in
ownership
interests
of subsidiary
not resulting
in loss of
control
Non-controlling interest
on
acquisition of
subsidiary - - - - - - - (81) (81)
-------------------------- -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
Transactions with owners - - (134) 270 - 154 290 (81) 209
-------------------------- -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
At 31 December 2010 1,847 2,890 47 270 (1) (2,723) 2,330 (89) 2,241
-------------------------- -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
Consolidated Statement of Changes in Equity
For the year ended 31 December 2011
Share Share Share Non-
capital premium option Equity Translation Accumulated Controlling Total
account reserve reserve reserve losses Sub-Total Interest Equity
Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 1 January 2011 1,847 2,890 47 270 (1) (2,723) 2,330 (89) 2,241
------------------------- -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
Loss for the year - - - - - (8,309) (8,309) (12) (8,321)
Exchange differences
arising
on translation of
overseas
operations - - - - (18) - (18) - (18)
------------------------- -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
Total comprehensive
income
for the year - - - - (18) (8,309) (8,327) (12) (8,339)
------------------------- -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
Transactions
with owners
Net proceeds from
ordinary
shares issued (net of
issue
costs) 559 463 - - - - 1,022 - 1,022
Loan notes converted to
equity 400 300 - (110) - 76 666 - 666
Share options
forfeited during
the year - - (26) - - 26 - - -
Share based payment
charge
for the year - - 16 - - - 16 - 16
------------------------- -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
959 763 (10) (110) - 102 1,704 - 1,704
------------------------ -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
At 31 December 2011 2,806 3,653 37 160 (19) (10,930) (4,293) (101) (4,394)
------------------------- -------- -------- -------- -------- ------------ ------------ ---------- ------------ --------
Consolidated Statement of Cash Flows
For the Year ended 31 December 2011
Year ended Year ended
31-Dec-2011 31-Dec-2010
Notes
GBP'000 GBP'000
Net cash generated from operating activities 11 4,809 1,983
Net cash used in investing activities 12 (6,330) (5,764)
Net cash generated from financing activities 13 1,467 2,967
Net decrease in cash and cash equivalents (54) (814)
Cash and cash equivalents at beginning
of year 764 1,578
Cash and cash equivalents at end of year 710 764
--------------------------------------------- ----- ----------- -----------
Notes to the Preliminary announcement
For the year ended 31 December 2011
1. Preparation of the accounts
The preliminary announcement has been prepared under the historical cost convention on a going concern basis and in accordance with applicable International Financial Reporting Standards and IFRIC interpretations ("IFRS") as adopted by the EU.
The board carries out an assessment of whether the Group is a going concern when preparing its annual and half-yearly financial statements. This assessment takes into account the size, level of financial risk and complexity of the Group and its operations. The review covers a period of at least twelve months from the date of approval of the financial statements.
The assessment is twofold: firstly to assess the minimum requirements to continue as a going concern and secondly, to identify the funding requirements for new acquisitions and make plans to raise additional finance where necessary, for example from major shareholders.
As a consequence of the Group's financial resources at the year end and having considered the trading and cash flow forecasts for the next twelve months, the directors believe that the Company and the Group have adequate resources to continue to adopt the going concern basis in preparing the annual report and accounts.
The preliminary announcement has been prepared on the basis of the same accounting policies as published in the audited financial statements of the Group for the year ended 31 December 2010 and the same accounting policies adopted in the financial statements of the Group for the year ended 31 December 2011.
The financial information in this preliminary announcement does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 but has been derived from statutory accounts for the year ended 31 December 2011 which will be delivered to the Registrar of Companies in due course. The audit report on these statutory accounts was unqualified and did not contain a statement either under section 498(2) or 498(3) of the Companies Act 2006. Statutory accounts for the year ended 31 December 2010 have been delivered to the Registrar of Companies. The audit report on these statutory accounts was unqualified and did not contain a statement either under section 498(2) or 498(3) of the Companies Act 2006.
The preliminary announcement is presented in pounds sterling since that is the currency in which the majority of the Group's transactions are denominated.
2. Acquisition
Business combinations are accounted for under the acquisition method.
On 11 August 2011, Metrodome acquired the entire share capital of Hollywood Classics Ltd. Founded in 1984, Hollywood Classics is a film sales agency business. It represents the classic film libraries of Universal, Paramount, Twentieth Century Fox and Warner Bros.
Metrodome acquired Hollywood Classics Ltd for GBP1.8 million, which comprised GBP800,000 of new ordinary shares with both institutional and individual investors, GBP800,000 provided by a Coutts bank loan of EUR930,000 and GBP200,000 from the Group's resources.
The acquisition of Hollywood Classics was made to gain access to the major film studios and vital international distribution networks, providing international diversification of our core UK film business.
The acquired net assets of Hollywood Classics are set out below:
Fair Value
Book Value to
Before Fair value Metrodome
Acquisition Adjustments Group plc
GBP'000 GBP'000 GBP'000
Property, plant and equipment 3 - 3
Intangible assets 2 - 2
Producer relationships - 2,324 2,324
Trade and other receivables 1,942 - 1,942
Cash and cash equivalents 1,357 - 1,357
Trade and other payables (2,986) - (2,986)
Non current trade and other
payables (2) - (2)
Deferred income tax liabilities - (342) (342)
Net assets and liabilities 316 1,982 2,298
--------------------------------- ------------- ------------- -----------
Purchase consideration (1,794)
-----------
Gain on bargain purchase (504)
-----------
If the acquisition had occurred on 1 January 2011, the estimated revenue for the Group for the year would have been GBP17,631,000 and loss before income tax expense GBP8,043,000.
In the period from acquisition to 31 December 2011, Hollywood Classics Ltd contributed GBP548,000 profit to the consolidated operating loss of the Group and GBP548,000 profit to the consolidated loss after taxation of the Group.
To determine the fair value adjustment the group prepared detailed revenue forecasts for each studio and significant independent producer relationship based on historical data and management's knowledge and expertise.
The resulting gain on bargain purchase of GBP504,000 has been credited to exceptional items in the income statement. The Group acquired Hollywood Classics on a multiple of circa 3 times historical profit before tax, which is a low multiple for a business with fairly high barriers to entry.
3. Operating segments
IFRS 8 Operating Segments requires financial information to be reported on the same basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments.
An operating segment is a component of an entity:
a) that engages in business activities from which it may
earn revenues and incur expenses,
b) whose operating results are regularly reviewed by the
entity's chief operating decision maker to make decisions
about resources to be allocated to the segment and assess
its performance, and
c) for which discrete financial information is available.
In the opinion of the directors, the chief decision maker is the Board of Metrodome Group plc and there were three segments in 2011 whose reports were reviewed by the Board in order to allocate resources and assess performance. The first operating segment is based on its original business activity of UK film distribution. The second segment, Hollywood Classics, reflects Hollywood Classics Limited, a 100% owned subsidiary acquired on 11 August 2011 and whose results have been included in the consolidated financial statements. The third segment, TV distribution, reflects Target Entertainment Limited (and its subsidiaries), a 100% owned subsidiary acquired on 13 August 2010 and whose results have been included in the consolidated financial statements. In 2010 there were two operating segments: film distribution and TV distribution. Pricing of transactions between operating segments is determined on an arm's length basis. The TV distribution segment was discontinued on 28 February 2012 when Target was placed into administration.
Operating segments Metrodome Hollywood Corporate Target
Year ended 31 December 2011 Distribution Classics Costs Sub-total Entertainment Total
Film Film TV
(5 months)
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 8,243 713 - 8,956 7,819 16,775
-------------- ----------- ---------- ---------- --------------- ---------
Underlying EBITDA 434 185 37 656 (436) 220
Exceptional items - 504 (364) 140 (7,001) (6,861)
Depreciation (2) (2) (49) (53) (12) (65)
Amortisation of software costs - (4) (7) (11) (9) (20)
Amortisation of acquired intangibles - (135) - (135) (1,128) (1,263)
-------------- ----------- ---------- ---------- --------------- ---------
Segment profit / (loss) 432 548 (383) 597 (8,586) (7,989)
Investment income 7 - - 7 - 7
Finance costs (71) - (121) (192) (75) (267)
-------------- ----------- ---------- ---------- --------------- ---------
Profit / (loss) before income
tax expense 368 548 (504) 412 (8,661) (8,249)
-------------- ----------- ---------- ---------- --------------- ---------
Segment assets 6,299 3,278 5,198 14,775 4,994 19,769
Elimination of intercompany balances (3,452)
---------
16,317
---------
Segment liabilities (8,209) (2,747) (2,776) (13,732) (13,254) (26,986)
Elimination of intercompany balances 3,452
Elimination of Target intercompany
balance 2,823
---------
(20,711)
---------
Amortisation of film & TV
distribution
library* 3,431 - - 3,431 1,452 4,883
Impairment of film & TV distribution
library 578 - - 578 3,513 4,091
Operating segments Metrodome Corporate Target
Year ended 31 December 2010 Distribution Costs Total Entertainment Total
Film TV
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Segment revenue 8,798 - 8,798 5,078 13,876
-------------- ---------- --------- --------------- ---------
Underlying EBITDA 519 (77) 442 365 807
Exceptional items (368) (449) (817) (129) (946)
Depreciation (33) - (33) (7) (40)
Amortisation of software costs - (5) (5) (15) (20)
Amortisation of acquired intangibles - - - (432) (432)
Segment profit / (loss) 118 (531) (413) (218) (631)
Investment income 1 - 1 - 1
Finance costs (61) 35 (26) (10) (36)
-------------- ---------- --------- --------------- ---------
Profit / (loss) before income
tax expense 58 (496) (438) (228) (666)
-------------- ---------- --------- --------------- ---------
Segment assets 5,829 7,470 13,299 12,472 25,771
Elimination of intercompany balances (6,664)
---------
19,107
---------
Segment liabilities (8,106) (2,624) (10,730) (12,800) (23,530)
Elimination of intercompany balances 6,664
---------
16,866
---------
Amortisation of film & TV distribution
library* 3,673 - 3,673 547 4,220
Impairment of film & TV distribution
library 708 - 708 - 708
*Amortisation of film & TV distribution library includes amortisation of acquired intangibles of GBP1,128,000 (2010: GBP432,000) which is attributable to the TV library.
4. Underlying EBITDA
Underlying EBITDA consists of earnings from continuing operations before exceptional items, interest, tax, depreciation, amortisation of software costs and amortisation of acquired intangible assets.
5. Loss per share
The loss per share is based on the loss attributable to equity holders of the Company of GBP8,309,000 (2010: GBP672,000 loss) after taxation and the weighted average number of shares in the year of 220,661,665 (31 December 2010: 184,717,915).
Basic and diluted earnings per share are the same as the effect on the loss for the current year and prior year would be anti-dilutive.
6. Dividends
The directors are unable to recommend payment of a dividend (2010: GBPnil).
7. Exceptional items
The Group has separately identified costs and revenue of an exceptional nature which are considered to be outside the normal course of business due to their one-off nature or size.
31-Dec-2011 31-Dec-2010
GBP'000 GBP'000
Impairments related to Target
Entertainment
Impairment of goodwill 3,413 -
Impairment of acquired intangibles 3,513 -
Impairment of property, plant
& equipment and software costs 11 -
------------------------------------ ------------ ------------
6,937 -
Bargain purchase (504) -
Legal and professional fees 325 449
Staff re-organisation 64 497
Office move 39 -
6,861 946
------------------------------------ ------------ ------------
Impairment of goodwill, TV library and property, plant & equipment
GBP3,413,000 of goodwill arising on the acquisition of Target Entertainment Ltd ("Target") has been impaired to GBPnil as at 31 December 2011 because Target was placed into administration on 28 February 2012. Target's TV library has also been impaired to GBPnil. An additional GBP11,000 has been impaired in relation to Target's property, plant & equipment and software costs. The total amount impaired in relation to Target was GBP6,937,000.
Bargain purchase
A gain of GBP504,000 from the bargain purchase of Hollywood Classics Ltd has been credited to profit or loss as an exceptional item (note 2).
Legal & professional fees
During 2011 Metrodome incurred GBP325,000 of legal and professional fees in respect of the acquisition of Hollywood Classics Ltd and additional one-off charges in respect of the acquisition of Target Entertainment Ltd.
During 2010 Metrodome incurred GBP449,000 of legal and professional fees in respect of a potential acquisition which was aborted in early 2010, the successful acquisition of Target Entertainment Ltd, employment law advice and the issue of loan notes.
Staff reorganisation
The Group incurred GBPnil (2010: GBP368,000) of redundancy payments and termination costs in respect of the staff re-organisation in the film distribution segment and GBP64,000 (2010: GBP129,000) in the TV distribution segment of the business.
Office move
In March 2011 Metrodome moved into the offices of Target in Edgware Road. Metrodome incurred GBP39,000 for the write down of fixtures and fittings in the old offices. Other costs of the office move are presented in operating expenses.
8. Incometax expense
2011 2010
GBP'000 GBP'000
Current tax - charge for the year (9) (14)
- adjustment in respect of prior periods (63) -
------------------------------------------------------------- --------- ---------
(72) (14)
Deferred tax - -
(72) (14)
------------------------------------------------------------- --------- ---------
Corporation tax is calculated at 26% (31 December 2010: 27%) of the estimated assessable loss for the year.
9. Film and TV distribution library
Expenditure on the Group's film and TV distribution library is carried forward and recognised as an asset when it is estimated that sufficient future income will be earned to cover recoupment of the costs. These costs are written off in line with actual income flows calculated in accordance with licensor agreements.
The estimate of future income depends on management judgement and assumptions based on the pattern of historical revenue streams and the remaining life of each film or TV contract.
10. Borrowings
31-Dec-2011 31-Dec-2010
GBP'000 GBP'000
The other borrowings are repayable
as follows:
Within one year 2,061 183
In the second year 248 2,412
Between two and five years 340 -
2,649 2,595
------------------------------------ ------------ ------------
31-Dec-2011 31-Dec-2010
GBP'000 GBP'000
Analysed as:
Convertible loan notes 1,115 1,690
Bank loans 807 -
Loan from a related party 503 499
Other loan 224 406
2,649 2,595
--------------------------- ------------ ------------
The convertible loan notes are unsecured, carry an interest rate of 4% and have a maturity date of 31 August 2012. The convertible loan note holders have agreed to extend the maturity date to 31 August 2013.
GBP728,000 of the bank loan is in Euros, carries an interest rate of 4% above Euro LIBOR and is repayable over four years by equal quarterly instalments. The bank loan is secured by a fixed and floating charge over the assets of the Company and its trading subsidiaries plus an unlimited inter-company composite guarantee.
The remaining bank loan of GBP79,000 is in Sterling, carries an interest rate of 4% above Coutts bank base rate and was repaid in February 2012.
The loan from a related party is in US dollars, is unsecured, carries an interest rate of 4% and was due to be repaid on 31 August 2012. The repayment date was extended to 31 August 2013 in March 2012.
The other borrowing is unsecured, interest-free and repayable over three years by equal monthly instalments.
Fair values have been calculated by discounting cash flows at prevailing interest rates.
11. Reconciliation of loss before income tax expense to net cash from operating activities
Year ended Year ended
31-Dec-2011 31-Dec-2010
GBP'000 GBP'000
Loss before income tax expense (8,249) (666)
Income taxes received 22 -
Adjustments for:
Investment income (7) (1)
Finance costs 267 36
Impairment of goodwill 3,413 -
Gain on bargain purchase (504) -
Depreciation of property, plant
& equipment 64 40
Impairment of property, plant
& equipment 2 -
Amortisation of intangible assets 21 20
Impairment of intangible assets 9 -
Amortisation of film & TV distribution
library 4,883 4,220
Impairment of film & TV distribution
library 4,091 708
Amortisation of producer relationships 135 -
Share based payment expense 16 20
Loss on disposal of property,
plant & equipment 40 1
(Increase) / decrease in inventories (32) 38
Increase in receivables (111) (2,417)
Increase / (decrease) in payables 749 (16)
Net cash generated from operating
activities 4,809 1,983
--------------------------------------- ----------- -----------
12. Investing activities
Year ended Year ended
31-Dec-2011 31-Dec-2010
GBP'000 GBP'000
Purchases of film & TV distribution
library (5,914) (5,090)
Purchases of property, plant
& equipment (129) (6)
Purchases of intangible assets (24) (6)
Acquisition of subsidiary, net
of cash acquired:
* Consideration paid (1,620) (800)
* Cash acquired 1,357 138
-------------------------------------- ----------- -----------
Net cash used in investing activities (6,330) (5,764)
-------------------------------------- ----------- -----------
13. Financing activities
Year ended Year ended
31-Dec-2011 31-Dec-2010
GBP'000 GBP'000
Proceeds from issue of ordinary share
capital 1,022 -
Issue of loan notes - 1,960
Proceeds from new borrowings 1,186 1,175
Repayments of bank loan (326) -
Repayments of borrowings (200) (133)
Investment income 7 1
Interest paid (222) (36)
Net cash generated from financing activities 1,467 2,967
--------------------------------------------- ----------- -----------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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