27th Mar 2014 16:36
LONDON (Alliance News) - Cellcast PLC saw its shares rise Thursday after it said it would book about GBP2 million after ending its exclsuive rights to manage and operate the Movie Mix channel on Freeview early.
In a statement, the company said it had agreed the early termination with Sony Picutures Television subsidiary Entertainment Networks Ltd and will get a one-off payment of GBP2.98 million. That will be reduced to about GBP2 million one certain liabilities and professional fees are deducted.
The company said it does not expect the cash will be used to support medium and long term working capital requirements.
The news came as the broadcasting company, which makes most of its revenues from interactive programmes where viewers participate by phoning in on premium rate phone lines, said its pretax loss widened in 2013 as revenues tumbled. It blamed an industry-wide decline in the premium rate service sector.
Its pretax loss widened to GBP2.5 million, from GBP55,275 in 2012, as revenues fell 19% to GBP15.5 million, from GBP19.2 million in 2012. It also booked GBP1.1 million in exceptional costs, the majority of which was spent on unsuccessful exploratory ventures in overseas markets.
However, the company said its general and administrative costs decreased 18% during the period to GBP838,000, from GBP1.0 million in 2012, 40% of which was personnel costs.
Its net cash balance stood at GBP404,000 at the end of 2013, down from GBP740,000 at the end of 2012.
Still, it was more hopeful about its outlook
"As the group's traditional UK market offers diminishing opportunities for new customer acquisition the group has identified two areas of potential growth. The first of these involves increased revenue from existing customers through cross-selling and upselling complementary internet and mobile internet based services. The second is expansion into developing markets where mobile and specifically smartphone penetration is growing rapidly and new digital broadcasting opportunities are emerging," the company said in its statement.
"The fruits of these efforts were realised in the second half of 2013 and it is hoped these revenues will continue to grow through 2014," it added.
Cellcast shares were up 21.2% to 1 pence, making it the third highest AIM riser Thursday.
By Tom McIvor; [email protected]; @TomMcIvor1
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