RNS Number:7224R
Entertainment Rights PLC
26 September 2005
Entertainment Rights Plc ("ER")
Interim Results for the six months ended 30 June 2005
Highlights:
* Turnover increased by 37% to #12.4m (2004: #9.1m)
* EBITDA increased by 46% to #3.3m (2004: #2.2m)
* Operating profit increased 56% to #1.2m (2004: #0.8m)
* Operating profit excluding assets held for sale increased by 89% to
#1.5m (2004: #0.8m)
* Underlying profit after tax excluding assets held for sale increased by
111% to #0.9m (2004: #0.4m)
* Basic earnings per share excluding assets held for sale increased by 45%
to 0.16p (2004: 0.11p)
* International expansion into the world's largest markets
* Double digit growth from all business operations
Rod Bransgrove, Chairman, Entertainment Rights Plc commented:
"Entertainment Rights ("ER") has again delivered a strong set of results for the
six months ended 30 June 2005 with revenues increasing by 37% to #12.4m and
underlying profit after tax excluding assets held for sale increasing by 111% to
#0.9m.
The first six months of 2005 has been a significant period for Entertainment
Rights with the Group delivering on key objectives, most importantly, securing
broadcast platforms for Postman Pat(R) in the US with Time Warner's HBO and with
Disney in Japan. Placing Postman Pat(R) on these prestigious broadcast platforms
in the world's two largest toy markets represents a considerable milestone for
the brand and offers the Company significant opportunities in two of the world's
largest economies. We plan to build on the awareness of the Postman Pat(R) brand
in the US and Japan by launching toy lines supported by consumer products
roll-out throughout 2006 and beyond.
Our formidable record of producing top quality children's and family programming
coupled with our strong commercial relationships with the world's leading
broadcasters and consumer products partners consolidates ER's position as a
leading global children's and family media business."
Enquiries:
Entertainment Rights Plc
Mike Heap, CEO 020 8762 6200
Elizabeth Gaines, Finance Director
Liz Morris, Head of PR
Bell Pottinger Corporate & Financial
David Rydell/Nick Lambert 020 7861 3232
CHIEF EXECUTIVE'S REVIEW
Entertainment Rights has fulfilled several key commercial objectives in the
first half of this year. The placement of Postman Pat(R) on premier broadcast
platforms in the US and Japan offers ER significant opportunities in these major
markets both for the brand and the Group.
ER owns and represents some of the strongest brands in the children's and family
market and the appeal of our broad portfolio is reflected in the Company's
strong global performance, evidenced by double digit growth from all business
operations.
Financial Performance
This half year is the first period Entertainment Rights has reported under
International Financial Reporting Standards (IFRS). Further details can be found
in our separate announcement released today. All figures used throughout this
results announcement are reported under IFRS.
As at 30 June 2005 the assets of Siriol Productions Ltd were held for sale as
these were considered non-core to the business. The disposal of these assets was
completed on 20 July 2005.
6 months ended 30 June
#m Ongoing Operations Total Group
2005 2004 2005 2004
Total Turnover 12.4 8.2 12.4 9.1
EBITDA 3.5 2.2 3.3 2.2
Operating profit 1.5 0.8 1.2 0.8
Underlying* profit before tax 0.9 0.4 0.6 0.4
Profit after tax 0.7 0.4 0.3 0.3
Underlying* EPS 0.21p 0.13p 0.13p 0.12p
Basic EPS 0.16p 0.11p 0.08p 0.10p
*Underlying profit excludes the impact of the interest rate swap (IAS 32/39) and
the charge for the cost of share options (IFRS2)
The Group has performed strongly in the first six months of 2005 with
considerable growth in turnover and profitability.
Turnover for the period is #12.4m, an increase of 52% on the first half of 2004
(excluding assets held for sale). Operating profit excluding assets held for
sale increased by 89% to #1.5m. This increase reflects the success of our high
margin owned brands combined with careful management of operating costs. EBITDA
excluding assets held for sale increased by 59% to #3.5m (2004: #2.2m).
The Group continues to utilise tax losses brought forward where possible,
resulting in a tax charge of #26k for the period.
Operating cash inflow for the first half of 2005 was #4.5m (2004: #3.6m).
Net debt for the Group at 30 June 2005 was #19.6m (31 December 2004: #19.4m).
OPERATING REVIEW
Television
Television distribution is a core activity for the Group and ER is committed to
producing and distributing new and innovative programming to supply the
increasing demands of broadcasters worldwide. These demands reflect the global
trend of increased television penetration and the continuing emergence of new
children's broadcast platforms, including ITV's new children's channel which is
expected to launch in the UK in the next six months. There are currently in
excess of 400 dedicated children's channels around the world, 24 of which
operate in the UK.
Revenue from television distribution increased by 74% in the first six months of
2005, reflecting the benefits of our extensive digital library of children's and
family programming. ER is the UK's largest independent supplier of children's
and family programming with a library currently standing at 1,800 hours.
Leading industry publication, Broadcast, in its September 2005 Report on UK
Distributors recognises ER as the UK's leading supplier of children's
programming.
Postman Pat(R) launched on Time Warner's HBO in the US earlier this month and
will launch on Buena Vista International's Disney channel in Japan in April
2006. The new series of Little Red TractorTM has sold to over 120 countries to
date and will launch on leading children's channel Kika in Germany, the number 1
European market, in October 2005. Little Red Tractor(R) is performing
particularly well in Scandinavia where it is a leading pre-school property.
The Filmation library of classic contemporary characters continues to generate
revenues around the world. He-Man and the Masters of the UniverseTM has launched
on Cartoon Network in Australia, New Zealand and the Middle East, She-Ra:
Princess of Power, Fat AlbertTM and He-Man and the Masters of the UniverseTM are
currently broadcasting on Cartoon Network in Latin America. BraveStarrTM has
been licensed to Ma Planete in France and PinocchioTM will also air in France
following an agreement with TPS Jeunesse.
ER's leading position in the UK is evidenced by our long established
relationships with UK broadcasters including the BBC, ITV, Channel 4 and Five.
ER currently has 20 programmes under license to the BBC. Postman Pat(R)
continues to air on the BBC and CBeebies in the UK, with 88 Postman Pat(R)
episodes licenced and the broadcast platform secured beyond 2010. Other ER shows
broadcasting on the BBC include The Basil Brush Show(R), Little Red TractorTM,
BB3BTM and Boo!TM. Fun Song FactoryTM is broadcast on CiTV and GMTV1, TitchTM is
currently airing on Five and CubeezTM, InukTM, Grabbit RabbitTM and Treacle
PeopleTM are all currently appearing on Channel 4.
Third party programming continues to perform strongly, particularly Hasbro
titles TransformersTM, Duel MastersTM and B-DamanTM following a pan-European
broadcast commitment from Turner Broadcasting System Europe to air these series
on Cartoon Network. Mattel's Barbie(R), including new titles BarbieTM Fairytopia
and BarbieTM and the Magic of Pegasus, has also performed strongly with sales to
over 120 territories to-date.
Licensing and Merchandising
Group revenue from licensing and merchandising increased by 124% in the first
half of the year reflecting consumer appeal for ER's brands. We expect this
growth to be enhanced further in the medium to long term following the strategic
roll-out of consumer products in the key territories of the US and Japan.
Postman Pat(R) licensing revenues increased 140% during the first six months of
2005. Following an agreement with GlaxoSmithKline, Postman Pat(R) appeared on
circa 1 million tubes of Macleans(R) Milk Teeth toothpaste, evidencing Postman
Pat(R)'s significant position in the UK market. A groundbreaking deal with
leading playground designer and manufacturer, Wicksteed Leisure, will see
Postman Pat(R) themed playgrounds appearing in local nurseries, playgrounds and
leisure centres from Summer 2006. Postman Pat(R) is also the 2005 face of
children's charity Jeans for Genes and will be headlining a national campaign to
nursery schools, with over 25,000 mailers and activity packs being distributed
to nurseries throughout the UK. These and other initiatives executed by ER
demonstrate the broad consumer appeal of the reinvigorated Postman Pat(R) brand
which is firmly established as a leading pre-school brand with UK retailers and
consumers alike.
Little Red TractorTM continues to capitalise on its strong publishing base with
over 250,000 books sold to-date through ER's publishing partner, Ladybird. ER
has appointed leading European licensing agency, Copyright Promotions in
Germany, Switzerland and Austria and a deal has already been concluded with
market leader United Labels for a range of Little Red TractorTM apparel and
giftware. Germany is the world's third largest economy and licensed merchandise
sales in the German speaking region are worth #2.6 billion annually. Product
will roll-out in the region following the October television launch of Little
Red TractorTM on leading children's channel, Kika.
The TweeniesTM continues to be a force in the children's arena with over 2
million viewers tuning into the television series every week on BBC One and
CBeebies. Produced by ER's Tell-Tale Productions for the BBC, the 2005 live
arena tour entitled 'No Sleep 'Til Bedtime' played to a total audience of
125,000. New TweeniesTM product is performing strongly at retail with further
toy lines being released in the lead up to Christmas 2005.
Camberwick Green's Windy Miller is currently starring in a major national
television and print advertising campaign for PepsiCo's Quaker oats. As a result
of ER's success in exploiting Trumptonshire, ER's agreement to represent this
third party brand has been extended for a further five years.
Christmas 2005 will see Postman Pat(R), Jess the CatTM, The TweeniesTM and Boo!
TM appearing alongside other CBeebies characters when they star in CBeebies
Live! This Tell-Tale production for the BBC will be a major live arena tour
visiting 7 key UK cities between December 2005 and January 2006.
Home Entertainment
ER's revenue from home entertainment increased by 15% in the first six months of
2005. This was achieved against a backdrop of a challenging retail environment
in the UK. In conjunction with Postman Pat(R)'s support of Jeans for Genes, a
brand new Postman Pat(R) DVD/VHS title is released today. This partnership with
Jeans for Genes has provided new opportunities for the brand including key
retailer Matalan selling Postman Pat(R) DVDs for the first time.
Right Entertainment has long term distribution rights to Mattel's Barbie film
franchise which currently comprises 6 titles. BarbieTM FairytopiaTM was released
in March 2005 and a brand new title, BarbieTM and the Magic of Pegasus, will be
released in October. Combined Barbie(R) UK and international DVD and VHS sales
through Right Entertainment have exceeded 10.6 million units to-date across five
titles.
Demand for the Filmation library of classic contemporary characters continues
and DVD partners have been secured for Fat AlbertTM and He-Man and the Masters
of the UniverseTM in the US and Australia. Fat AlbertTM DVDs were released in
the US to coincide with the major motion picture release by Twentieth Century
Fox of the Fat AlbertTM movie in December 2004. ER has appointed Megaliner as
its video partner in Russia for He-Man and the Masters of the UniverseTM and RBA
as its video partner for the brand in Spain. ER has also appointed Allright as
its video partner for the ZorroTM brand in France.
Recognising the underlying value of ER's music catalogue, BMG Music Publishing,
the world's largest music publisher, has secured the global music publishing
rights to ER's music catalogue. In a separate deal Sony BMG recently released a
children's CD and DVD compilation album entitled 'Playtime!' featuring ER
characters Postman Pat(R), Basil Brush(R) and Little Red TractorTM. This unique
offering reflects the strength of these brands across all aspects of home
entertainment.
New Media
The advent of global digitisation is an exciting opportunity for ER. The Group's
programming, characters and brands represent ideal content for the fast moving
digital market, transcending traditional distribution channels.
He-Man and the Masters of the Universe(R) is the first ever classic animated
series to be released on PlayStation Portable's ("PSP") Universal Media Disc
("UMD") in the US following the recent agreement with BCI Navarre. PSP was
launched in the US in March 2005 and although a relatively new medium, 5.7
million PSP consoles have already been shipped worldwide with the US taking
delivery of 2.7 million consoles and 3.3 million UMD units to-date.
ER has recently concluded a deal with leading US multimedia content supplier
American Greetings Interactive for Fat Albert mobile and Instant Messaging
content. The agreement will see Fat Albert ringtones, wallpaper, and
animated IM content available in the US market from Autumn 2005.
Postman Pat(R) and Little Red TractorTM games and software are currently in
development following ER's agreement with Bright Things for their pre-school
games console. In addition, Basil Brush(R)'s brand new computer game from Fifth
Dimension will be launched in the UK in Spring 2006.
ER is taking full advantage of the digital landscape and we continue to explore
and exploit opportunities for our highly relevant brands in this rapidly
expanding market by leveraging our valuable content across a multitude of media
platforms.
Outlook
The progress of the Group in the first six months of the year has been
significant and builds on the strategic positioning of ER following the
acquisitions of the Filmation library and Tell-Tale Productions in 2004. The
securing of key broadcast platforms for Postman Pat(R) in both the US and Japan
represents a significant achievement for the Company as we continue to expand
our portfolio of characters and brands internationally.
Our focus is to continue to build the global presence of all of our brands and
to maximise exploitation opportunities for our significant library across all
media, existing and new. Content is, and will continue to be, the core to the
success of the ever increasing number of global entertainment platforms and in
this dynamic digital media environment, ER is ideally positioned as a key
content owner and supplier.
We have enjoyed a strong first half and current trading continues in line with
market expectations. ER remains focused on delivering long term value for its
shareholders.
In conclusion, I would like to recognise the diligence, hard work and enthusiasm
of all our staff in delivering another strong set of results.
Mike Heap
CEO
Consolidated unaudited income
statement for the 6 Months Ended
30 June 2005 30 June 2004
Assets Assets
Ongoing held Ongoing held
Operations for Sale Total Operations for Sale Total
#'000 #'000 #'000 #'000 #'000 #'000
Notes
Turnover 12,387 55 12,442 8,151 923 9,074
Cost of sales (5,651) (331) (5,982) (4,500) (923) (5,423)
-------- --------- ------- -------- --------- -------
Gross Profit 6,736 (276) 6,460 3,651 - 3,651
Administrative
expenses (5,189) (45) (5,234) (2,833) (30) (2,863)
EBITDA 3,537 (276) 3,261 2,230 - 2,230
Depreciation
and
amortisation (1,992) (45) (2,037) (1,412) (30) (1,442)
Negative goodwill - - - - - -
Goodwill Impairment - - - - - -
(Loss) /
profit on
disposal of
fixed assets 2 - 2 - - -
Operating
Profit 1,547 (321) 1,226 818 (30) 788
Financial
income 145 1 146 58 1 59
Financial
expense (1,012) (2) (1,014) (528) (10) (538)
-------- --------- ------- -------- --------- -------
Net financing
costs (867) (1) (868) (470) (9) (479)
Profit before
tax 680 (322) 358 348 (39) 309
-------- --------- ------- -------- --------- -------
Taxation for
the period 2 (26) - (26) 17 - 17
-------- --------- ------- -------- --------- -------
Profit for the
period 654 (322) 332 365 (39) 326
-------- --------- ------- -------- --------- -------
Basic earnings
per share 3 0.16p (0.08p) 0.08p 0.11p (0.01p) 0.10p
-------- --------- ------- -------- --------- -------
Diluted earnings per
share 3 0.15p (0.07p) 0.08p 0.11p (0.01p) 0.10p
-------- --------- ------- -------- --------- -------
The group has no income or expense recognised directly in equity during the
current or previous periods and therefore no separate statement of recognised
income and expense has been presented.
Consolidated unaudited income
statement for the Year Ended
31 December 2004
Ongoing Assets held
Operations for Sale Total
#'000 #'000 #'000
Notes
Turnover 23,228 2,239 25,467
Cost of sales (13,429) (2,071) (15,500)
-------- --------- --------
Gross Profit 9,799 168 9,967
Administrative expenses (6,198) (566) (6,764)
EBITDA 7,975 (309) 7,666
Depreciation and amortisation (4,300) (91) (4,391)
Negative goodwill 130 - 130
Goodwill impaired (186) - (186)
(Loss) / profit on disposal of fixed
assets (18) 2 (16)
Operating Profit 3,601 (398) 3,203
Financial income 156 1 157
Financial expense (1,164) (10) (1,174)
-------- --------- --------
Net financing costs (1,008) (9) (1,017)
Profit before tax 2,593 (407) 2,186
-------- --------- --------
Taxation for the period 2 (16) 32 16
-------- --------- --------
Profit for the period 2,577 (375) 2,202
-------- --------- --------
Basic earnings per share 3 0.71p (0.10p) 0.61p
-------- --------- --------
Diluted earnings per share 3 0.70p (0.10p) 0.60p
-------- --------- --------
The group has no income or expense recognised directly in equity during the
current or previous periods and therefore no separate statement of recognised
income and expense has been presented.
Consolidated unaudited balance sheet
30 June 2005 30 June 2004 31 December 2004
Note #'000 #'000 #'000
ASSETS
Non current assets
Goodwill 19,526 19,712 19,526
Investment in
programmes 27,089 21,758 25,793
Trademarks and
copyrights 20,778 20,525 21,369
Property,
plant and
equipment 522 1,030 903
Deferred tax
asset 706 630 322
------------- ------------ -------------
Total non-current
assets 68,621 63,655 67,913
------------- ------------ -------------
Current assets
Programme
development
costs 2,207 1,056 1,642
Trade and
other
receivables 13,593 9,421 15,440
Cash and cash
equivalents - 3,464 243
Other taxation
receivable - 332 -
Assets held
for sale 422 - -
------------- ------------ -------------
Total current
assets 16,222 14,273 17,325
------------- ------------ -------------
Total assets 84,843 77,928 85,238
------------- ------------ -------------
LIABILITIES
Current liabilities
Cash and cash equivalents (1,035) - -
Interest bearing loans and borrowings (2,522) (1,925) (2,093)
Trade and other payables (2,556) (2,463) (2,564)
Accruals and deferred income (8,010) (7,868) (9,355)
Income tax payable (47) (69) -
Obligations under finance leases (11) (77) (12)
------------- ------------ -------------
Total current
liabilities (14,181) (12,402) (14,024)
------------- ------------ -------------
Net current
assets 2,041 1,871 3,301
------------- ------------ -------------
Non current liabilities
Interest bearing loans and borrowings (16,017) (13,511) (17,539)
Deferred tax liabilities (1,363) (1,821) (1,378)
Provisions (430) (75) (289)
Obligations under finance leases (10) (12) (14)
------------- ------------ -------------
Total non-current
liabilities (17,820) (15,419) (19,220)
------------- ------------ -------------
Total liabilities (32,001) (27,821) (33,244)
------------- ------------ -------------
Net Assets 52,842 50,107 51,994
------------- ------------ -------------
EQUITY
Issued share capital 6 20,641 20,637 20,637
Share premium 6 33,181 33,176 33,176
Merger reserve 6 16,470 16,470 16,470
Retained earnings 6 (17,450) (20,176) (18,289)
------------- ------------ -------------
Equity attributable to shareholders' ------------- ------------ -------------
of the parent 6 52,842 50,107 51,994
------------- ------------ -------------
TOTAL EQUITY AND
LIABILITIES 84,843 77,928 85,238
------------- ------------ -------------
Consolidated unaudited cash flow statement
6 months to 6 months to Year to
30 June 30 June 31 Dec
2005 2004 2004
#'000 #'000 #'000
Note
Cash flows from operating activities
Operating profit 1,226 788 3,203
Adjustments for:
Depreciation of tangible fixed
assets 200 141 374
Amortisation of intangible fixed
assets 1,837 1,301 4,017
(Profit) / loss on sale of
property, plant and equipment - (2) 16
Share based payment charges 153 48 144
Goodwill write off - - 186
Negative goodwill acquired with
subsidiary - (130)
---------- ---------- ----------
Operating cashflows before movements in
working capital 3,416 2,276 7,810
Increase in programme development
costs 164 (259) (839)
Decrease in payables (882) (5,735) (5,002)
Decrease in receivables 1,803 7,367 1,276
---------- ---------- ----------
Cash generated from operations 4,501 3,649 3,245
Income taxes paid - 1 (120)
---------- ---------- ----------
Net cash inflow from
operating activities 4,501 3,650 3,125
Cash flows from investing activities
Payments to acquire intangible
fixed assets (3,909) (15,395) (18,897)
Payments to acquire tangible fixed
assets (110) (62) (156)
Proceeds from sale of tangible
fixed assets - 2 16
Acquisition of subsidiary
undertaking - - (858)
Overdraft acquired with
subsidiary - - (1,789)
Net cash generated from/ (used
in) investing activities (4,019) (15,455) (21,684)
Cash flows from financing activities
Term loan draw down falling due
within the year - 11,111 182
Term loan draw down falling due
within more than one year - - 5,258
Capital element of finance lease
rental payments (5) (35) (98)
Repayment of borrowings (1,031) (11,737) (1,883)
Proceeds from issue of shares 9 16,921 16,921
Share insurance costs - (580) (580)
Interest received 124 25 104
Interest paid (887) (498) (1,130)
---------- ---------- ----------
Net cash generated from
/ (used in)financing activities (1,790) 15,207 18,774
---------- ---------- ----------
Net increase in cash and
cash equivalent (1,308) 3,402 215
Cash and cash equivalents 243 28 28
Net effect of
foreign exchange (29) 34 -
Non cash changes - interest
rate swap movement 59 - -
---------- ---------- ----------
Cash and cash
equivalents at end of period (1,035) 3,464 243
---------- ---------- ----------
NOTES TO THE INTERIM REPORT FOR THE SIX MONTHS ENDED 30 JUNE 2005
1. Basis of Preparation
The interim financial information has been prepared in accordance with
International Financial Reporting Standards ("IFRS"), using the same accounting
policies as set out in the Company's Adoption of International Financial
Reporting Standards document which was published today.
For the year ended 31 December 2005, the Group will be required to prepare
consolidated financial statements under International Accounting Standards as
adopted by the European Commission. These will be those International Accounting
Standards, International Financial Reporting Standards and related
interpretations (SIC-IFRIC interpretations), subsequent amendments to those
standards and related interpretations, future standards and related
interpretations issued or adopted by the International Accounting Standards
Board (IASB) that have been endorsed by the European Commission.
The information for the year ended 31 December 2004 does not constitute
statutory accounts as defined in Section 240 of the Companies Act 1985 but has
been extracted from the reconciliations of UK GAAP to IFRS presented in the
Adoption of International Financial Reporting Standards document referred to
above. The UK GAAP financial information as at 31 December 2004 within that
document had been extracted from the 2004 statutory financial statements which
have been filed with the Registrar of Companies. The auditors' report on those
accounts was unqualified and did not contain a statement made under Section 237
(2) or (3) of the Companies Act 1985.
Adoption of IAS 32 and IAS 39 "Financial Instruments"
IFRS 1 "First-time adoption of International Financial Reporting Standards" sets
out procedures to be followed when IFRS is adopted for the first time. In
relation to IAS 32 and IAS 39, IFRS 1 allows companies to opt to apply these
standards from the date of the opening balance sheet of the first period
reported under IFRS without restating the comparative period. The Group has
chosen this option as previously announced.
The application of IAS 32 and IAS 39 affects the Group balance sheet principally
in respect of derivative financial instruments, which are recognised in the
balance sheet at their fair value as financial assets or liabilities. The net
effect of this at 1 January 2005 is to increase equity by #172k due to the
recognition of the Group's interest rate swap.
Assets held for Sale
Non-current assets and "disposal groups" (groups of assets to be disposed of
together, for example in the sale of a business) are classified as 'held for
sale' when their carrying amounts will be recovered principally through sale.
The disposal group of assets associated with the Siriol sale (See Note 7) are
treated in this way at 30 June 2005 and will not be amortised or depreciated
after that date. They are presented separately from other assets and liabilities
on the balance sheet.
The Interim Report was approved by the Directors on 26 September 2005.
2. Taxation
Restated Restated
Unaudited Unaudited Unaudited
6 months 6 months Year
to 30 June to 30 June to 31 Dec
2005 2004 2004
(a) Income tax expense #'000 #'000 #'000
Current tax expense:
UK corporation tax charge 47 - 53
Double tax relief (47) - -
Foreign tax current year (relief) /
charge 47 - (53)
UK tax prior year (credit)/charge - (1) (6)
Foreign tax prior year charge / (credit) 53 - -
-------- --------- -------
Total current tax 100 (1) (6)
Deferred tax expense:
Origination and reversal of timing
differences (74) (16) (497)
Benefit of tax losses recognised - - 487
-------- --------- -------
Total deferred tax (74) (16) (10)
-------- --------- -------
Income tax expense / (credit) in income
statement 26 (17) (16)
-------- --------- -------
3. Earnings/(loss) per ordinary share
The calculation of basic loss per ordinary share is based on the consolidated
profit after tax for the period of #332,000 (June 2004 - #326,000 profit) and
on 412,781,545 (June 2004 - 312,481,687), being the weighted average number of
ordinary shares in issue during the period.
Reconciliation of the earnings and weighted average number of shares used in
the calculations are set out below:
Restated Restated
Unaudited Unaudited Unaudited
6 months 6 months Year
to 30 June to 30 June to 31 Dec
2005 2004 2004
#'000 #'000 #'000
Loss on ordinary activities after
taxation 332 326 2,202
Basic earnings per ordinary share
Earnings available to ordinary
shareholders 332 326 2,202
Weighted average number of shares in
issue 412,781,545 312,481,687 363,716,862
---------- --------- ---------
Basic earnings per share (pence) 0.08p 0.10p 0.61p
---------- --------- ---------
Diluted earnings per ordinary share
Earnings available to ordinary
shareholders 332 326 2,202
Weighted average number of shares in
issue 412,781,545 312,481,687 363,716,862
Effect of diluted securities -
options 10,980,791 - 2,603,434
---------- --------- ---------
Diluted earnings per share (pence) 0.08p 0.10p 0.60p
---------- --------- ---------
Restated Restated
Unaudited Unaudited Unaudited
6 months 6 months Year
to 30 June to 30 June to 31 Dec
2005 2004 2004
#'000 #'000 #'000
Underlying earnings per share
Earnings available to ordinary
shareholders 332 326 2,202
Share options 103 47 105
Interest rate swap 113 - -
--------- --------- ---------
548 373 2,307
Weighted average number of shares in
issue 412,781,545 312,481,687 363,716,862
--------- --------- ---------
Underlying earnings per share
(pence) 0.13p 0.12p 0.63p
--------- --------- ---------
4. Borrowing Commitments
Details of the committed borrowing facilities as at 30 June 2005 and the
repayment terms are as follows:
Term Loan Working Total
Capital
#'000 #'000 #'000
Within 1 year 2,659 1,094 3,753
Greater than 1 but not more than 2 years 3,547 - 3,547
Between 2 and 5 years 12,469 - 12,469
--------- --------- ---------
Borrowed 30 June 2005 18,675 1,094 19,769
Unutilised amount - 5,406 5,406
--------- --------- ---------
18,675 6,500 25,175
--------- --------- ---------
5. Analysis of changes in net debt
At 1
At 31 Adjustment January
December for IAS 32 2005 Non-Cash Foreign At 30 June
2004 and IAS 39 (restated) Changes Exchange Cashflow 2005
#'000 #'000 #'000 #'000 #'000 #'000 #'000
Cash and cash
equivalents 243 172 415 (113) (29) (1,308) (1,035)
--------- -------- ------- ------- ------- ------- --------
Debt less than
One year:
- Term loan (2,093) - (2,093) (1,460) - 1,031 (2,522)
--------- -------- ------- ------- ------- ------- --------
Debt greater than
One year:
- Term loan (17,539) - (17,539) 1,522 - - (16,017)
--------- -------- ------- ------- ------- ------- --------
Finance leases (26) - (26) - - 5 (21)
--------- -------- ------- ------- ------- ------- --------
(19,415) 172 (19,243) (51) (29) (272) (19,595)
--------- -------- ------- ------- ------- ------- --------
6. Reconciliation of movements in capital and reserves
Share Share Merger Profit Total
Capital Premium Reserve and
Loss
#'000 #'000 #'000 #'000 #'000
At 31 December 2004 20,637 33,176 16,470 (18,289) 51,994
Recognition of interest rate
swap at Fair Value - - - 172 172
------- -------- -------- -------- ---------
1 January 2005 (restated) 20,637 33,176 16,470 (18,117) 52,166
Exercise of share options 4 5 - - 9
Deferred tax on share options - - - 335 335
Profit for the period - - - 332 332
------- -------- -------- -------- ---------
At 30 June 2005 20,641 33,181 16,470 (17,450) 52,842
------- -------- -------- -------- ---------
7. Post Balance Sheet Events
On 20 July 2005 the sale of the trade and assets of Siriol Productions to Calon
was completed. The related assets sold were the building currently occupied by
Siriol Productions Limited for the market value of #600,000 and other assets of
#156,000. At 30 June 2005 the net book value of the assets sold was #422,000.
#'000
Property 275
Plant and equipment 113
Programmes in development 34
---------
422
---------
Independent review report to Entertainment Rights Plc
Introduction
We have been engaged by the company to review the financial information set out
on pages 7 to 14 and we have read the other information contained in the interim
report and considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
This report is made solely to the company in accordance with the terms of our
engagement to assist the company in meeting the requirements of the Listing
Rules of the Financial Services Authority. Our review has been undertaken so
that we might state to the company those matters we are required to state to it
in this report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the company for
our review work, for this report, or for the conclusions we have reached.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the Listing
Rules which require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing the
preceding annual financial statements except where any changes, and the reasons
for them, are disclosed.
As disclosed in note 1 to the financial information, the next annual financial
statements of the group will be prepared in accordance with IFRSs adopted for
use in the European Union.
The accounting policies that have been adopted in preparing the financial
information are consistent with those that the directors currently intend to use
in the next annual financial statements. There is, however, a possibility that
the directors may determine that some changes to these policies are necessary
when preparing the full annual financial statements for the first time in
accordance with those IFRSs adopted for use by the European Union.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
Review of interim financial information issued by the Auditing Practices Board
for use in the United Kingdom. A review consists principally of making enquiries
of group management and applying analytical procedures to the financial
information and underlying financial data and, based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review is substantially less in scope than an audit
performed in accordance with Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly, we do not express an audit
opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2005.
KPMG Audit Plc
Chartered Accountants
London
26 September 2005
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FXLLLEKBLBBD
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