RNS Number:1481K
Entertainment Rights PLC
18 September 2001
18 September 2001
ENTERTAINMENT RIGHTS PLC
Interim results for the six-month period ended 30 June 2001
Entertainment Rights plc, the children's and family television programming,
licensing and merchandising company, announces today its interim results for
the six-month period ended 30 June 2001.
* Group turnover up 133% to #3.7m (2000: #1.6m),
reflecting a combination of organic growth and the
acquisition of Link Licensing
* Underlying turnover rises 25% to #2.0m
* EBITDA improves to #67,000 from a loss of #316,000
* Programme library increases from 360 hours to over 850
hours
* Growing demand for children's programming, resurgence of
nostalgia TV and increased opportunities in licensing and
merchandising
* Successful integration of Link Licensing
Commenting on the results, Entertainment Rights' Chairman, Rod Bransgrove
said:
"These results are encouraging and reflect the continued strengthening of the
Group, good organic growth and the successful integration of Link Licensing.
We have a stronger and better-balanced portfolio than this time last year and
are confident of a successful outcome for the full year."
Enquiries:
Mike Heap, Chief Executive
Julie King, Head of PR
Entertainment Rights PLC Tel: 020 8672 6200
Tim Spratt, Director
Financial Dynamics Tel: 020 7831 3113
CHAIRMAN'S STATEMENT
Results for the six-month period ended 30 June 2001
FINANCIAL SUMMARY
Entertainment Rights continues to build an integrated global media business
specialising in children's characters and brands. This has resulted in
turnover growth of 133% compared to the corresponding period last year, with
an improvement in turnover from continuing operations of 25%. EBITDA also
improved significantly to #67,000 (six months to 30 June 2000: loss of #
316,000).
The Directors do not recommend the payment of a dividend.
GROUP DEVELOPMENT
The Group was pleased to announce in April 2001 the acquisition of Link
Licensing ('Link') for #15.0 million. This fitted well with the Group's
strategy of purchasing businesses in the television, licensing and
merchandising markets with portfolios of high quality brands and characters.
Link was established in 1986 to capitalise on the growing market opportunities
in licensing and merchandising exploitation. Link's library, consisting of
some 440 hours of children's television, complemented a well-developed
consumer products business representing global brands such as Barbie, Fisher
Price and Love Hearts. Its acquisition has therefore significantly increased
Entertainment Rights' programme library and provided the Group with a more
balanced revenue stream, through adding considerable licensing and
merchandising opportunities.
During 2001, the Group has already expanded its library from 360 hours to over
850 hours of programming.
The renaissance of Basil Brush through the development of a new television
series with the BBC was announced in May. Basil Brush related merchandise,
including a range of plush toys and gift items from Hasbro and an
autobiography, will be launched this Autumn, with Entertainment Rights
receiving royalties on each product.
OPERATIONAL REVIEW
1. Television
This division is responsible for the global sales of the Group's television
rights and the exploitation of its extensive library of third party
programming. The Group supplies a blue chip client base of international
broadcasters including BBC, ITV, ZDF, Nickelodeon, Cartoon Network and TF1.
With the proliferation of new technology platforms, sales now also include
income from sources as diverse as television screens in taxis and video on
demand.
In the first half of the year the division secured distribution rights for a
number of new live-action series including Short Cuts to be broadcast on
Disney UK, My Parents are Aliens broadcast on CiTV and family films Albert,
Jolly Roger and Mission Cobra to complement its existing library of animated
programming rights.
In May, the Group announced that it had secured the television and video
distribution rights for 60 hours of programming from the leading children's
publishing and entertainment company, Golden Books. The Golden Books catalogue
features internationally renowned classics including Felix the Cat, The Mighty
Hercules and Underdog.
The BBC confirmed its commission for a further 26 episodes of Ethelbert the
Tiger production started in March for delivery commencing in November.
2. Consumer Products
Entertainment Rights' strategy is, wherever possible, to ensure ownership of
all rights, thereby generating revenue not only from television but also
licensing and merchandising, video, DVD and new media.
Licensing & Merchandising
Licensing and merchandising has become a significant revenue contributor
through the exploitation of the Group's characters and brands beyond
television and directly to the consumer. Merchandising includes such items as
clothing, toys, games and stationery, for which the Group receives royalty
revenues.
The acquisition of Link Licensing has had a significant impact on the Group by
improving the product range, infrastructure and licensing and merchandising
capabilities.
New contracts during the period include:
* The rights to the animation series based upon the global character
Mr Bean
* Securing a master toy license from Hasbro for Merlin the Magical
Puppy
Video
In May, the Group launched its home entertainment label, Right Entertainment.
The Right Entertainment label will be distributed in the UK and Ireland by
Universal Pictures Video UK (UPV UK), which will release all Entertainment
Rights video and DVD programming.
The first major release, expected in October from Right Entertainment, will be
the debut animation feature length film of Barbie in the Nutcracker, for which
the Group have high expectations.
CURRENT TRADING AND OUTLOOK
As a children's and family content owner and programme supplier, the Group
continues to benefit from growing customer demand for its properties and
programming and the increase in broadcast channels.
Entertainment Rights is now also benefiting from revenue generated from video,
DVD and licensing and merchandising. The expanding global television market
and continued technological developments in the media sector serve to enhance
the revenue generating potential of the Group.
To benefit fully from the underlying growth opportunities in its markets,
Entertainment Rights will focus its development on:
* Organic growth of its catalogue
* Aggressive sales & promotion of its programme library
* Acquisition of new rights and libraries
* Continued development of consumer products through licensing and
merchandising
The Board is confident of a successful outcome for the full year and in the
longer term expects the Group to benefit from the growing value of its
characters and brands.
Unaudited consolidated profit and loss account for the six month
period ended 30 June 2001
Unaudited 6 months to 30 Unaudited Audited
June 2001
6 months 12
to 30 June months
to 31
Dec
Continuing Acquired Total 2000 2000
Note #'000 #'000 #'000 #'000 #'000
Turnover 2,001 1,728 3,729 1,600 4,410
Cost of sales (732) (1,273) (2,005) (939) (1,737)
Gross profit 1,269 455 1,724 661 2,673
Administrative expenses (2,670) (1,477) (3,109)
Earnings before interest, 67 (316) 1,011
taxation, depreciation,
amortisation and exceptional
items
Depreciation of tangible assets (550) (18) (611)
(including depreciation of
investments in programming)
Amortisation of (463) (248) (498)
intangible assets
Exceptional items 3 - (234) (338)
Operating loss (946) (816) (436)
Profit on sale of fixed - - 4
asset investment
Loss on ordinary activities before (946) (816) (432)
interest and taxation
Interest receivable and 147 336 525
similar income
Interest payable and (52) (9) (22)
similar charges
(Loss)/profit on ordinary (851) (489) 71
activities before taxation
Taxation on ordinary
activities - - -
(Loss)/profit on ordinary (851) (489) 71
activities after taxation
Retained (Loss)/Profit for the (851) (489) 71
period transferred to reserves
(Loss)/Profit per 4 (0.37p) (0.23p) 0.03p
ordinary share - Basic
Unaudited consolidated balance sheet AS AT 30 JUNE 2001
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 June 30 June 31 Dec
2001 2000 2000
Note #'000 #'000 #'000
Fixed Assets
Intangible assets 22,714 9,799 9,559
Tangible assets 15,794 9,401 11,428
38,508 19,200 20,987
Current Assets
Programme development costs 2,590 787 918
Debtors: due within one year 3,900 984 3,234
Investments - - 5,165
Cash at bank and in hand 4,439 9,388 1,102
10,929 11,159 10,419
Creditors
Amounts falling due within one (9,464) (1,252) (1,762)
year
Net current assets 1,465 9,907 8,657
Total assets less current 39,973 29,107 29,644
liabilities
Creditors
Amounts falling due after one year (64) (24) (27)
Net assets 39,909 29,083 29,617
Capital and reserves
Called up share capital 11 13,118 10,618 10,618
Share premium account 24,362 18,148 18,067
Merger reserve 16,470 14,067 14,122
Profit and loss account (14,041) (13,750) (13,190)
Equity shareholders' funds 11 39,909 29,083 29,617
Unaudited consolidated cash flow statement FOR THE SIX MONTH PERIOD ENDED 30
JUNE 2001
Unaudited Unaudited Audited
6 months to 6 months to 12 months
to
30 June 30 June 31 Dec
2001 2000 2000
Note #'000 #'000 #'000
Net cash outflow from operating 8 (3,048) (1,536) (2,047)
activities
Returns on investments and servicing
of finance
Interest received 161 336 511
Interest paid (52) (9) (22)
Net cash inflow from investments
and servicing of finance 109 327 489
Taxation
UK corporation tax paid (including - (4) -
ACT)
Capital expenditure and financial
investment
Payments to acquire intangible fixed - (24) (35)
assets
Payments to acquire tangible fixed (1,755) (443) (3,053)
assets
Receipts from sale of fixed asset - - 4
investment
Receipts from sale of tangible fixed 21 - 4
assets
Net cash outflow from investing (1,734) (467) (3,080)
activities
Acquisitions and Disposals
Acquisition of subsidiary undertaking (6,195) - -
Cash acquired with subsidiary 570 - -
(5,625) - -
Net cash outflow before management of
liquid
resources and financing (10,298) (1,676) (4,638)
Management of liquid resources
Cash withdrawn from 90 day deposit 5,165 910 4,835
Financing
Issue of shares 8,500 - (25)
Cost of share issue (335) - -
Capital element of finance lease (5) (5) (19)
rental payments
Repayment of borrowings (1) (3) (67)
Net cash inflow/(outflow) from 8,159 (8) (111)
financing
(Decrease)/increase in cash 10 3,026 (774) 86
Notes to the interim report for the six months ended 30 June 2001
1 The financial information set out in this report does not
constitute the company's Statutory Accounts within the meaning of section 240
of the Companies Act 1985.
Statutory Accounts for the year ended 31 December 2000 carried an unqualified
audit report and have been filed with the Registrar of Companies.
2 The Interim report was approved by the Directors on 17 September
2001 and prepared on the basis of the accounting policies set out in the
group's 2000 statutory accounts.
Copies of the Interim Report will be sent to all shareholders and further
copies of these and the 2000 Statutory Accounts may be obtained from the
company's registered office, 58-60 Berners Street, London W1T 3JS.
3 Exceptional items
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 June 2001 30 June 2000 31 Dec 2000
#'000 #'000 #'000
Aborted acquisition costs - 71 86
Corporate branding costs - 163 190
External deal costs - - 62
- 234 338
4 The calculation of loss per ordinary share is based on the
consolidated loss after tax for the period of #851,000 (June 2000 - loss #
489,000) and on 231,726,403 (June 2000 - 212,319,951) ordinary shares, being
the weighted average number of ordinary shares in issue during the period.
In view of the loss for the period, the share options are
anti-dilutive and therefore a diluted earnings per share is not presented.
5 Goodwill on acquisition
On 27th April 2001 the Group acquired Link Licensing Limited.
#m
Consideration 15.0
Acquisition costs capitalised 0.5
Less net assets acquired (1.8)
Goodwill arising in period 13.7
In accordance with FRS 10, goodwill arising on acquisition has been
capitalised in intangible fixed assets and amortised over the expected useful
life.
6 Share Capital
The following changes to the share capital of the Group took place on 27th
April 2001: -
a) 36,956,522 new ordinary shares of 5p each issued for consideration
of #8.5 million with a nominal value of #1,847,826, as part of a placing and
open offer.
b) 13,043,478 new ordinary shares of 5p each issued for consideration
of #3.0 million with a nominal value of #652,174 to the vendors of Link
Licensing Limited, as part consideration of the acquisition price.
7 Loan Notes and Bank Loans
On 27th April 2001, the Group issued #6,361,933 of principal loan notes to
certain vendors of Link Licensing Limited as part consideration of the
acquisition price.
The Group has arranged new bank facilities of #9 million. The facilities
consisted of a term loan and guarantee of #6.5 million and a revolving credit
facility of #2.5 million.
There were no amounts drawn against this facility as at 30th June
2001.However, the amount guaranteed as at 30th June 2001 amounted to #6,361,933.
8 Reconciliation of operating loss to net cash outflow from operating
activities
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 June 30 June 31 Dec
2001 2000 2000
#'000 #'000 #'000
Operating loss (946) (816) (436)
Depreciation and amortisation
- tangible fixed assets 550 18 611
- intangible fixed assets 463 248 498
Gain on disposal of fixed asset - - (4)
investment
Gain on disposal of tangible fixed - - (4)
assets
Increase in programme development (908) (501) (633)
Decrease/(increase) in debtors 306 (247) (2,481)
(Decrease)/increase in creditors (2,513) (238) 402
(3,048) (1,536) (2,047)
9 Reconciliation of net cash flow to movement in net debt
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
30 June 30 June 31 Dec
2001 2000 2000
#'000 #'000 #'000
Increase/(decrease) in cash in the period 3,026 (778) 86
Cash outflow from decrease in debt and
lease financing 1 8 86
Cash inflow from increase in liquid resources (5,165) (910) (4,835)
Change in net debt resulting from cash flows (2,138) (1,680) (4,663)
Issue of Loan notes (6,362) - -
New Finance Lease - - (14)
Net debt acquired through the Link
Licensing acquisition (456) - -
(8,956) (1,680) (4,677)
Net funds at the start of the period 6,174 10,851 10,851
Net (debt)/funds at the end of the period (2,782) 9,171 6,174
10 Analysis of changes in net debt / funds
Note At Acquisition Non-cash Cash At 30
January Excluding Cash changes flow June 2001
2001
#'000 #'000 #'000 #'000 #'000
Cash at bank 1,102 - - 3,337 4,439
and in hand
Bank overdrafts (59) - - (311) (370)
1,043 - - 3,026 4,069
Cash Deposits 5,165 - - (5,165) -
Debt 7 - - (6,362) - (6,362)
Mortgage - (425) - 1 (424)
Lease contracts (34) (31) - - (65)
6,174 (456) (6,362) (2,138) (2,782)
11 Reconciliation of shareholders' funds and movement on reserves
Share Profit
Share premium Merger and loss
capital account reserve account Total
#'000 #'000 #'000 #'000 #'000
Group
At 1 January 2001 10,618 18,067 14,122 (13,190) 29,617
Loss for the year - - - (851) (851)
Issues of shares 2,500 - - - 2,500
Premium on issues of 6,652 2,348 9,000
shares
Share Issue Costs - (357) - - (357)
charged to Share
Premium
At 30 June 2001 13,118 24,362 16,470 (14,041) 39,909
Company Information
Registered office
58-60 Berners Street
London
W1T 3JS
Registered number 02402919
www.entertainmentrights.com
Entertainment Rights (LSE:ERT)
Historical Stock Chart
From Jul 2024 to Aug 2024
Entertainment Rights (LSE:ERT)
Historical Stock Chart
From Aug 2023 to Aug 2024
