Interim results and comment on proposed delisting (8159U)

TIDMPFO

RNS Number : 8159U

Prime Focus London PLC

30 December 2011

Prime Focus London Plc

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2011

AND REVIEW OF AIM ADMISSION

The Board of Prime Focus London plc, the visual entertainment services group, is pleased to announce its unaudited interim results for the six months to 30 September 2011. An overview of the financial statements is set out below and full version is available on the Company's website at www.primefocusworld.com.

Overview

-- Profit before tax of GBP1.795m on turnover of GBP20.348m (6 months to 30 September 2010: GBP2.673m on turnover of GBP18.495m)

   --     Basic EPS at 5.46p (6 months to 30 September 2010: 8.19p) 
   --     Borrowings increased in the period to GBP9.369m from GBP8.277m at 31 March 2011. 

-- Review of decision to cancel AIM admission commissioned. Further announcement to be made by 31 January 2012

For further information, please contact

Prime Focus London Plc

Tony Bradley - Communications Director +44 ( 0) 20 7437 0026

Grant Thornton Corporate Finance

Colin P Aaronson / Jen Hatter [phone]

Chairman's Statement

The Board of Prime Focus London Plc, the visual entertainment services group, is pleased to announce its unaudited interim results for the six months to 30 September 2011.

Overview

In the 6 months to 30 September 2011, Prime Focus London Plc and its subsidiaries (together "the Group") made a profit before tax of GBP1.795 million on turnover of GBP20.348 million, compared to a profit before tax of GBP2.673 million on turnover of GBP18.495 million for the 6 months to 30 September 2010. Basic earnings per share were 5.46p (6 months to 30 September 2010: 8.194p).

Borrowings increased to GBP9.369m from GBP8.277m at the March 2011 year end.

Sales in the period increased by almost GBP2m to GBP20.348m and cost of sales reduced by GBP.770m compared to the same period last year. In the 6 months to 30 September 2010, cost of sales included GBP1.6m in respect of the cost of outside facilities required for the post production on 3 Hindi films. Additionally, the previous period figures include GBP2.029m charged in respect of the 2D to 3D conversion of a major feature film. Use of outside facilities has been much reduced in the current period.

However, administration expenses continued to rise in the period primarily due to the costs associated with the View-D(TM) business (referred to below). Total administration expenses rose by GBP4.546m to GBP14.585m from GBP10.039m in the equivalent period of the prior year. Of this increase GBP4.5m relates to GBP3.7m of salaries and GBP0.8m of rent incurred in connection with the View-D(TM) business, increasing the losses incurred on this former part of the Group's activities.

The Group generated an exceptional gain on the disposal of the View-D(TM) business, referred to below.

A nonrecurring exceptional charge of GBP0.485m was incurred in respect of professional fees and other costs related to an aborted corporate transaction and prior period write off.

Sale of View-D(TM) Business

Since the period under review, in October 2011 the Company announced the sale of its View-D(TM) 2D to 3D film conversion business to Prime Focus International Services (UK) Limited, a wholly owned subsidiary of the Company's majority shareholder, Prime Focus Limited for a total consideration of approximately GBP2.1 million.

As was announced at that time, the Company's View-D(TM) Division made losses, in part due to the cost of the license to the View-D(TM) software, and the board did not believe that the division would become profitable in the foreseeable future. Since the disposal of the View-D(TM) business these losses are no longer being incurred.

The Company generated an exceptional gain on the disposal of this part of the Company's activities of GBP1.799m (this includes USD 0.5m reported earlier and an adjustments of USD 2.3m for the operating performance between 1 April 2011 till 30 September 2011). Intercompany debt of USD2.8m (GBP1.8m) due to the Indian holding company has been written off as part of this transaction.

Review of AIM Admission

I am aware that there has been some concern among shareholders following the announcement at the Annual General Meeting on 1 November 2011 of the board's decision to seek a cancellation of your Company's admission to AIM. The board has been considering a number of options and now proposes to conduct a review, in conjunction with its advisers, the purpose of which will be to assess what changes to the Company may need to be made in the best interest of all shareholders and stakeholders.

One outcome of this review may, or may not, be that the Company will continue to be listed on AIM.

There will be a further announcement to shareholders on the progress of this review by 31 January 2012.

Ramakrishnan Sankaranarayanan

Chairman and Managing Director

30 December 2011

 
 Consolidated income statement 
 For the six months ended 30 September 
  2011 
 
                                           Unaudited    Unaudited     Audited 
                                            6 months     6 months   12 months 
                                            ended 30     ended 30    Ended 31 
                                          Sept. 2011   Sept. 2010   Mar. 2011 
                                             GBP'000      GBP'000     GBP'000 
 
 Revenue                                      20,348       18,495      30,608 
 
 Less: Cost of sales                         (4,978)      (5,748)    (11,890) 
 
 Gross Profit                                 15,370       12,747      18,718 
 
 Administration expenses                    (14,585)     (10,039)    (15,842) 
 
 Group operating profit                          785        2,708       2,876 
 
 Other Income                                     93          175       1,159 
 
 Finance Income                                  175          173         464 
 
 Finance costs                                 (572)        (383)       (594) 
 
 Exceptional Income                            1,799            -           5 
 
 Exceptional Charges                           (485)            -           - 
 
 Profit before taxation                        1,795        2,673       3,910 
 
 Taxation - Corporation Tax                        -            -           - 
 Deferred tax                                      -            -       (108) 
 
 Profit on ordinary activities 
  after taxation                               1,795        2,673       3,802 
                                         -----------  -----------  ---------- 
 
 Basic earnings per share                      5.46p        8.19p      11.65p 
 Diluted earnings per share                    5.42p        8.11p      11.53p 
 
 
 
 Consolidated balance sheet 
 As at 30 September 2011 
                                      Unaudited   Unaudited   Audited 
                                          As at       As at     As at 
                                       30 Sept.    30 Sept.   31 Mar. 
                                           2011        2010      2011 
                                        GBP'000     GBP'000   GBP'000 
 ASSETS 
 Non-current assets 
 Intangible Assets                          907       9,393       707 
 Property, plant and equipment            6,486       8,470     7,997 
 Deferred Tax Assets                          -           -         - 
 Other Receivables                            -           -         - 
 Available for sale investments              32          42        32 
                                          7,425      17,905     8,736 
                                     ----------  ----------  -------- 
 Current assets 
 Inventory                                   38          38        38 
 Trade and other receivables             28,554      14,896    21,563 
 Cash and cash equivalents                1,612         782     1,300 
                                         30,204      15,716    22,901 
                                     ----------  ----------  -------- 
 Total Assets                            37,629      33,621    31,637 
                                     ----------  ----------  -------- 
 
  EQUITY 
 Capital and reserves attributable 
  to equity shareholders 
 Share capital                            1,642       1,632     1,632 
 Share premium                            6,515       6,498     6,498 
 Capital redemption reserve                 270         270       270 
 Fair value reserve                        (10)           -      (10) 
 Retained earnings                          985       1,566     (810) 
 Total equity                             9,402       9,966     7,580 
                                     ----------  ----------  -------- 
 
 LIABILITIES 
 Current liabilities 
 Borrowings                               7,793       7,650     6,247 
 Trade and other payables                18,766      15,658    15,690 
 Current tax liabilities                      -           -         - 
                                         26,559      23,308    21,937 
                                     ----------  ----------  -------- 
 Non-current liabilities 
 Borrowings                               1,576           -      2030 
 Other payables                               -           -         - 
 Deferred tax liability                      92         347        90 
                                          1,668         347     2,120 
                                     ----------  ----------  -------- 
 Total equity and liabilities            37,629      33,621    31,637 
                                     ----------  ----------  -------- 
 
 
 
  Consolidated cash flow statement 
 for the six months ended 30 September 
  2011