Acquisition

RNS Number:2424M
VTR PLC
22 January 2008


22 January, 2008


                    VTR plc acquires Machine Effects Limited

                    VTR continue to grow their capabilities

VTR plc is pleased to announce the acquisition of Machine Effects Limited, the
visual effects company founded by John Lockwood and Steve Street, for a total
consideration of £2,050,000 (the "Acquisition"). The Acquisition strengthens
VTR's offer in the UK visual effects market and underpins the continued
international expansion of the Prime Focus Group of companies.

Machine Effects Limited is a leading visual effects business offering a full
range of services to film and broadcast. Its impressive list of credits includes
Fred Claus, Elizabeth: The Golden Age and Harry Potter and the Prisoner of
Azkaban.  Both John Lockwood and Steve Street will remain with the business and
continue to work with VTR plc.

The total consideration for the Acquisition of £2,050,000 constitutes a payment
in cash of £1,025,000 (the "Cash Consideration") and the issue of 1,025,000 new
ordinary shares in VTR (the "Consideration Shares") to John Lockwood and Steve
Street, the vendors of Machine Effects Limited (the "Vendors").

Each of the Vendors has undertaken not to sell any of the Consideration Shares
for the first 12 months after completion of the Acquisition and to sell no more
than 50% of the Consideration Shares in the two years following completion of
the Acquisition.

The Cash Consideration for the Acquisition has been funded by an inter-group
loan from Prime Focus Limited ("PFL"), which is a majority shareholder in VTR.
VTR and PFL entered into a loan agreement on 21st January 2008 which made
available a £1,000,000 credit facility to VTR (the "Loan").  Interest will
accrue on the Loan at a rate of 8% per annum.

The Loan will be satisfied by the issue of 2,020, 202 new ordinary shares in VTR
to PFL, conditional upon obtaining the requisite shareholder approvals to allot.
Failure to obtain such shareholder approvals will require VTR to repay the
Loan in cash within 18 months of the date of the loan agreement.

With the exception of any director involved in the arrangements set out above as
a related party (as defined in the AIM rules), the directors of VTR consider,
having consulted with Charles Stanley Securities, that the terms of the Loan are
fair and reasonable insofar as the shareholders of VTR are concerned.

PFL has separately guaranteed to the Vendors that the Consideration Shares will
have a closing bid price of not less than 100 pence per share after a period of
30 months from completion of the Acquisition has elapsed (the "Guarantee").
Should the closing bid price be less than 100 pence per share after this
30-month period, PFL will, without recourse to VTR, pay the difference to the
Vendors.  VTR will, in return for the Guarantee, and subject to obtaining the
requisite shareholder approvals to allot, issue 505,050 new ordinary shares in
VTR to PFL.

Application has been made for the Consideration Shares to be admitted to trading
on AIM and it is anticipated that admission will become effective and that
dealings will commence on 29 January 2008. The Consideration Shares will rank
pari passu with the existing shares of the Company. Following this allotment,
the total issued share capital of the Company will increase to 30,106,276
ordinary shares.

Namit Malhotra, Chairman of VTR plc and Prime Focus Group, said: "This
acquisition adds to the group's global breadth, strengthening our visual effects
capabilities and helping to grow our offer. Machine Effects is a strong brand
with an impressive track record in the industry and I am pleased that it will be
joining VTR plc and in turn part of the growing group of companies in the Prime
Focus Group."

Neil Lane, Managing Director, VTR plc said: "Steve and John are experts in the
visual effects market and will compliment Prime Focus London's existing
capabilities in that area. We are excited to have them joining our team and look
forward to working together."

John Lockwood said of the acquisition: "Machine Effects integration into the
group will allow us to concentrate on what we do best whilst participating in
the future success of VTR plc."

And Steve Street added: "We are thrilled to be joining the Prime Focus Group of
companies and to have access to its global resources in London, India, Canada
and the United States."

Further information on Machine Effects Limited

Detailed below is the financial performance of the business during the year to
31 March 2007 and the seven months to 31 October 2007.

The figures for the year to 31 March 2007 are unaudited as the company is exempt
from an audit under s249A(1) of the Companies Act 1985.

The figures for the seven months to 31 October 2007 are the unaudited management
accounts for the company to that date.

The figures have been prepared under UK Generally Accepted Accounting Principles
using the historical cost convention and in accordance with the Financial
Reporting Standards for Smaller Entities (effective June 2022).


Profit and Loss Account                                          7 months ending               Year ending
                                                                 31 October 2007             31 March 2007
                                                                       unaudited                 unaudited
                                                                               £                         £

Turnover                                                                 854,457                   392,005

Cost of sales                                                          (314,928)                   (7,308)

Gross profit                                                             539,529                   384,697

Administrative expenses                                                (156,493)                 (199,858)

Operating profit                                                         383,036                   184,839

Bank interest - net                                                        2,833                         0

Profit after interest                                                    385,869                   184,839

Tax on profit on ordinary activities                                    (77,174)                  (36,038)

Profit for the financial year                                            308,695                   148,801

Dividends                                                                      0                  (78,500)

Retained profit for the financial year                                   308,695                    70,301




Balance Sheet                                                           As at                    As at
                                                              31 October 2007            31 March 2007
                                                                            £                        £

Fixed Assets                                                           98,248                   70,301

Current assets
Debtors                                                                69,737                   32,000
Cash at bank and in hand                                              469,907                   15,063

                                                                      539,644                   47,063

Creditor: amounts falling due within one year                       (219,129)                 (47,063)
Net current assets                                                    320,515                        0

Net assets                                                            418,763                70,301

Capital and reserves
Share capital                                                             100                        0
Other reserves                                                         39,667                        0
Profit and loss account                                               378,996                   70,301

                                                                      418,763                   70,301

ENDS



Machine Effects Limited offers a full range of visual effects services and
supervision for feature films and broadcast work: script breakdown and
budgeting, pre-production, pre-visualisation and design, vfx supervision (on-set
and digital), 3D animation (character and fx), compositing, matte paintings,
digital grading, title design.

VTR plc (Prime Focus UK) is the holding company of the Prime Focus UK Group, one
of Europe's leading high-end media services groups. Based in Soho, London, the
main divisions - Prime Focus London and blue post production - cover between
them every aspect of professional post-production, and each company has
established an international reputation in its chosen field.

The Prime Focus UK Group produces work of the highest quality across all areas
of the post-production industry, including: high-end visual effects and digital
intermediate (DI) for cinema releases; television commercials; long-form and
short-form broadcast projects; CGI animation; design and motion graphics; pop
promos; sound design, mixing and composition; and film and video restoration.

In addition the group designs, builds and implements online interactive
communication tools for a wide variety of clients. Its portfolio includes
digital asset management systems, state-of-the-art encoding services, website
design and hosting, mobile content encoding and delivery, and professional DVD
authoring facilities.

VTR plc's (Prime Focus UK) majority shareholder is Prime Focus Limited, India's
foremost integrated end-to-end post-production and visual effects services
facility. As the largest Autodesk Fire / Smoke site in the world, the largest
site for Thomson Spirit in the Asia-Pacific region, and with its recent
acquisitions in London, Prime Focus Limited has emerged as a major force in the
international post-production industry.

Contacts



Ryszard Bublik                 Parys Communications              020 7622 9951
Catriona McDermott

Neil Lane                      VTR plc, Managing director        020 7437 0026

Philip Davies                  Charles Stanley Securities        020 7149 6000
(Nominated Adviser)


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

ACQPUUBUGUPRGRG