19th Nov 2007 07:02
First Artist Corporation PLC19 November 2007 Date: 19 November 2007On behalf of: First Artist Corporation plc ("First Artist" or "the Group")Embargoed for: 0700hrs First Artist Corporation plcPreliminary Results for the year ended 31 August 2007 First Artist Corporation plc (AIM: FAN), the media, events and entertainmentmanagement group, today announces its final results for the year ended 31 August2007. Highlights from last 12 month period include: • Turnover up 411% to £48.6 million (compared to 10 month period to 31 August 2006)• Adjusted EBITA* up 118% to £3.6 million (EBITA £3.2 million)• Adjusted profit before tax** up 80% to £2.7 million (Profit before tax £1.5 million)• Adjusted basic EPS*** up 47% to 15.71 pence (Basic EPS 6.81p)• Consolidated net assets up 43% to £7.3 million• Total cash inflow of £2.7 million *(Earnings before interest, tax and amortisation (EBITA) is stated beforeexceptional administrative expenses and foreign exchange gains or losses) **(Profit before tax is stated before goodwill amortisation, exceptionals anddiscounted interest on deferred consideration) ***(EPS is stated before amortisation of goodwill, discounted interest ondeferred consideration and exceptional costs) Key Operating Highlights: • Successful acquisition and integration of Dewynters, the UK's leading full-service entertainment marketing group• Successful acquisition of Yell Communications and integration within the Events division• Successful launch of First Rights, First Artist's sponsorship and rights ownership agency• Three-year Public Sector Training and Development Agency contract awarded to The Finishing Touch Jon Smith, Chief Executive of First Artist Corporation commented: "This has been a transformational year for First Artist. The Group now benefitsfrom eight diverse income streams, spread across our three divisions: Media,Entertainment and Events. "The focusing of the Group into three divisions will help to drive the synergiesthat exist between the different businesses. Over the next year the Group willcontinue to evolve, building on the high quality, diverse earnings streams andstrong cash generation. "The emerging media landscape presents enormous opportunities and First Artisthas positioned itself to take full advantage of the changing marketplace." Enquiries: Jon Smith, Chief ExecutiveRichard Hughes, Group Managing Director www.firstartist.comFirst Artist Corporation Tel: 020 7993 0000 Emma Kane / Samantha Robbins / Sanna LehtinenRedleaf Communications Tel: 020 7822 0200 David Floyd Dawnay Day, NOMAD Tel: 020 7509 4570 Katie SheltonDaniel Stewart, Broker Tel: 020 7776 6550 Notes to Editors: • First Artist Corporation plc floated on AIM in 2002• First Artist's group companies are among the leading brands in their fields under the following categories: o Media - advertising, marketing and signage for West End, Broadway and Las Vegas shows via the Dewynters and Newman Displays brands, and strategic sponsorship consulting via Sponsorship Consulting and First Rights o Entertainment - representation of media personalities and football players/clubs across UK, Europe and the US via its First Artist Sport and First Artist Entertainment companies together with wealth management under its Optimal Wealth Management arm o Events - offers a broad range of events such as conferences, company activity days, venue finding, delegate management and client events for private and public sector clients such as the Training & Development Agency, under its Finishing Touch business• First Artist is acting as a consolidator in the fragmented media, entertainment and events sectors focusing on high quality brands with the potential to cross sell to other Group companies• First Artist has strong visibility of earnings across a diverse and non-cyclical range of activities in both live and digital formats• The Group benefits from a strong, experienced management team with extensive expertise across all the sectors in which it operates Chairman and Chief Executive's Statement The nature of media and entertainment has changed rapidly over recent years,with the shift away from traditional forms of media into digital web-basedmulti-media, driven by the advent of new technologies. This landslide isdramatically increasing the rate of media and audience fragmentation, and of thediversification of entertainment channels. Conversely, it has also resulted insignificant growth in the live event sector and this growth is forecast tocontinue for some time. We believe that the emerging media landscape presents enormous opportunities forthose now entering the media and entertainment sectors, particularly if they canintroduce a business model that delivers stability when previously less flexibleand more established players now find their revenue streams exposed. Alow-risk, cash generative, reliably profitable and inherently stable butexpanding group will find itself in the ideal position to exploit emergingopportunities within this changing marketplace. This is exactly the position in which First Artist Corporation has placeditself. The repositioning of the Group, which began three years ago, has nowdelivered a media, entertainment/sport and events group that is notable for boththe diversity and stability of its revenue streams and its robust organicgrowth. We have grown the business with an emphasis on synergistic, earningsenhancing acquisitions, precisely to take advantage of the conditions in mediaand entertainment today and in the future. We have successfully integrated eight businesses in an environment that buildson their strengths and has accelerated the growth on the majority of thesebusinesses. We have identified key current opportunities for expansion withinthe Group, started to develop new forms of revenue stream that are evolved tofit the opportunities of the current marketplace, and positioned ourselves torespond to the next wave of opportunities in a dynamic rapidly changing sector. Both the media and the analyst community have made frequent reference to FirstArtist Corporation's past as primarily a football agency, and it is true thatwhen we began the process of expanding and repositioning the business, threeyears ago, the majority of First Artist's revenues were derived from football.As a result, the income stream was seasonal, and exposed to the amount of TVrevenue flowing into the game. A comparative look at the structure of today's Group revenues tells a verydifferent story: 87 per cent of the enlarged group revenues, and 79 per cent ofoperating profits (pre. Group central costs) now come through media,non-football entertainment and event management services, with the acquisitionof Dewynters giving First Artist Corporation the dominant role in the marketingof theatre and cinema in the UK, and opening up exciting avenues of opportunityin the US and Asia Pacific. The Group now benefits from eight diverse income streams, spread across ourthree divisions: Media, Entertainment/Sport and Events. Within Entertainment andSport, changes to the nature of football contracts have further strengthenedyear-round revenues by replacing traditional, up-front agency fees with regularpayments over the life of the contract, significantly increasing visibilitythrough contracted earnings. Within Events, The Finishing Touch's success inlanding a significant three-year contract for the Training and DevelopmentAgency's schools training programme secures a rapidly expanding public servicerevenue stream, whilst the addition of Yell Communications further strengthenedthe corporate business following record trading periods during Christmas 2006and June 2007. Arguably the most significant Group achievement of the past three years is thesuccess in finding ways to deliver stable, growing revenues, in markets wherehigh risks are often perceived to accompany high rewards. We believe that themanagement style and group structure, supported by strong information andfinancial management systems will ensure that we will continue to deliver thisrobust growth. Stability breeds stability much as success breeds success. The strength of theoverall Group position is allowing us to explore new opportunities to developfurther, long-term, revenue streams through the ownership of media and eventrights. This year's launch of First Rights is a major step forward, leveragingour expertise in sponsorship and media rights to take ownership of promisingsport and entertainment properties. As we expand further into media andentertainment representation, through First Artist Management and build on thisyear's tremendous advances by The Finishing Touch, we will remain alert tofurther rights opportunities. In concluding, we wish to thank all members of the First Artist Group for theirtremendous hard work over the past three years and, especially during the last12 months. They have all contributed to the success of the Group, and to thehighly promising position in which we now find ourselves. Our Sharesave scheme,launched this year, is designed to allow all employees to profit from success,and we are pleased that such a large percentage took the opportunity to do so. Jarvis Astaire & Jon Smith 16 November 2007 FIRST ARTIST MEDIA Dewynters and Dewynters Advertising Inc. Dewynters' leadership in the marketing of theatre and cinema in the UK has beenbuilt on a deep passion for and understanding of its sector, consistentlyoriginal, award-winning creative and a full-service offer that incorporates allthe services required to connect audiences and performances. In addition toprint and digital development, e-business and media advertising, Dewynters worksthrough its subsidiaries Dewynters Advertising and Newman Displays to delivermerchandising, souvenir programmes and spectacular front-of-house displays. When an agency enjoys a dominant market position such as that of Dewynters, itsfortunes are closely linked to those of its sector. The company currentlysupports some 26 West End shows compared to 18 in May 2006 with further showsperforming in Europe and the Far East. The UK's appetite for theatre appearsgreater than ever; the pipeline of shows seeking theatres is extremely healthy,and dedicated reality TV shows are further raising the profile of musicaltheatre, in particular. Within this environment, the agency seeks continuallyto protect its market position by raising its creative standards anddemonstrating its versatility, as shown in recent West End work for The RoyalOpera House, Equus, Spamalot, Grease and Lord of the Rings. Steady growth from an extremely strong position indicates a very healthyperformance for Dewynters' core London theatre and cinema business and this yearhas been its most successful in its 100-year plus history. The agency's mainopportunities for more rapid growth lie internationally, such as in the US andAsia Pacific, in which it is also successfully developing its presence alongsideNewman Displays and Dewynters Advertising, and in expanding its role in culturaltourism. Dewynters is the only UK agency to be a member of the Association ofBritish Travel Agents. Dewynters Advertising is Dewynters' rapidly expanding merchandising and souvenirprogramme operation, which has succeeded in tapping into the lucrative UStheatrical market through its offices in New York and Las Vegas. Alongside Dewynters (UK), this company currently represents 7 shows on Broadwayand 4 in Las Vegas with further shows on US tours. Over the past year, thecompany has delivered the merchandising to promote hit US shows such as TheColor Purple, Young Frankenstein and Stomp, providing a valuable tool forextending brand awareness through word-of-mouth at the same time as ensuring avaluable revenue stream for clients. Live events and in particular theatre are an increasingly global business;Broadway plays a vital role as an exporter of productions to London and aroundthe world. Dewynters Advertising's growing strength in the US market not onlyhelps to secure the broader marketing accounts for London staging ofinternational shows; it also plays a key role in opening up new markets such asChina to the skills and expertise of Dewynters and Newman Displays. The creative skills and global reach of Dewynters Advertising are hugelycomplementary to the strategic marketing skills, entertainment development andevent management expertise available through other divisions of the First ArtistGroup. FIRST ARTIST MEDIA Year ended 31 10 months ended 31 Year ended 31 August August October 2007 2006 2005 £000 £000 £000TurnoverDewynters Group * 32,872 - -Sponsorship Consulting ** 740 49 -First Rights - - - 33,612 49 - Operating Profit*** 2,428 - - * These figures are since Acquisition in November 2006** These figures are since Acquisition in August 2006*** Prior to intergroup management fee and excluding foreign exchange gains or losses DEWYNTERS GROUP Period from Year ended 31 Year ended 31 1 November 2006 to March March 31 August 2007 2006 2005 £000 £000 £000TurnoverDewynters Limited 25,848 26,448 25,130Dewynters Advertising Inc 2,633 2,696 2,862Newman Displays Limited 4,391 4,386 2,236 32,872 33,530 30,228 Operating Profit* 2,571 864 304 * Prior to intergroup management fee and excluding foreign exchange gains orlosses MEDIA - NEWMAN DISPLAYS Newman Displays has pioneered the role of fascias, signage and front-of-housedisplays in UK entertainment marketing and brand awareness, successfullyleveraging its 20-year record of innovation and creativity into a dominant rolein the theatre and cinema marketplace. The West End has provided a hugely effective shop window for the company'screativity and production expertise, with films such as Pirates of the CaribbeanAt World's End, Harry Potter and the Order of the Phoenix, Shrek 3, The Simpsonsand 300; and musicals Spamalot and Wicked among the many productions benefitingfrom displays during the last year. However, Newman Displays' expertise extendsbeyond this: to brand campaigns, including the innovative neon signage ondisplay in London's Piccadilly Circus, and business-to-business and corporatedesigns and exhibition stands. The steady integration of the business within the First Artist Group offersseveral new opportunities for growth, including considerable potential synergieswith First Artist's event business, The Finishing Touch, and with thesponsorship, media rights and PR expertise of Sponsorship Consulting and FirstRights. The business is already making considerable strides in the US, where thestrength of First Artist's Las Vegas-based operation, Dewynters Advertising,provides opportunities to introduce its creative and production techniques tonew markets. This is also true in Europe at the Cannes Film Festival and inChina, where rapidly increasing demand for touring West End shows promises aconsiderable market for its theatrical displays. MEDIA - SPONSORSHIP CONSULTING The approach of the 2012 Olympic games in London has done more than increase thedemand for sponsorship consultancy and implementation in the UK; it represents astep-change in the way the industry conducts business, and in the way thatclients judge the services available. Since its arrival within the First ArtistGroup just over a year ago, Sponsorship Consulting has been restructured and hasfocused its future development to take full advantage of this shift and deliverthe level of brand expertise that clients will demand over the next five yearsand beyond. Sponsorship Consulting is a high-end, strategic sponsorship and corporateresponsibility consultancy with an instantly recognisable list of blue-chipclients; the complementary range of skills available through the First ArtistGroup allows it to work with First Rights on the implementation of sponsorshipsales and with The Finishing Touch on event management, whilst focusing ondelivering high-quality brand-orientated advice to both sponsors and rightsowners. At the same time, the company will continue to work on the detailedactivation and implementation of sponsorship deals for large corporates, on acontracted basis, covering every element needed to bring sponsorship to life.The next phase in the growth of the business will include building on its PublicRelations capabilities, in order to tap sponsorship's full potential forcreating brand experiences. The past 12 months have delivered yet more examples of the value that thebusiness delivers to clients in this respect. Sponsorship Consulting hasrenegotiated Unilever's relationship with The Tate Modern, including arealignment of the sponsorship deal in 2012 to take advantage of the LondonOlympics; the company has extended the value of Siemens' sponsorship of rowinginto internal communications, through an indoor rowing regatta for employees;eight separate sponsorship deals have been secured for Shell, including apartnership with the Royal Festival Hall and the support of a new children'sgallery for the Science Museum. Meanwhile, the consultancy's work for the shoebrand, Ekko, culminating in a three-year sponsorship of the V&A's fashionexhibitions, showcases the powerful potential role of sponsorship in therepositioning of brands. MEDIA - FIRST RIGHTS Launched in May 2007, First Rights has been developed to build on the mediarights and sponsorship sales expertise which exists within the First ArtistGroup, delivering new revenue streams through its sales-led representation ofrights owners and opening up new opportunities for the Group in the ownership ofmedia assets. During its first few months of operation, the business hasalready made encouraging strides in both of these areas. Although no revenue wasrecognised during the 4 months to 31 August, the Company has four contractedclients who will be invoiced in the first few months of the coming year. First Rights' core business focuses on the development of sponsorship strategiesfor rights owners and the subsequent execution of these strategies throughsales. The company generates revenue through both fees and sales commissions andhas already landed high-profile clients such as Sheffield United and theEuropean Fighting Network. In two further cases, First Rights has opted to waive its initial consultancyfee in exchange for a share of media rights, securing longer-term revenuestreams through equity ownership. The rights in question, to the Ocean RacingWorld Cup and Carousel, a business, which controls the rights to display artworkfrom The Simpsons among other entertainment properties, were carefully selectedfor their long-term potential. In addition to income through the rightsthemselves, First Rights will handle ongoing sales on a commission basis in eachcase. Over the next year, the business will continue to focus on the organic growth ofits fee and commissions-based sales business, whilst continuing to monitoropportunities for further rights ownership where the potential exists to createlong-term revenue streams. The activities of First Artist group companies suchas First Artist Management and the events business The Finishing Touch have thepotential to provide a further channel to rights ownership over the medium andlonger term. EVENTS - THE FINISHING TOUCH FIRST ARTIST EVENTS Year ended 31 10 months ended 31 Year ended Year ended August August 30 April 30 April 2007 2006 2007 2006 £000 £000 £000 £000TurnoverCorporate 3,120 1,700 2,734 2,208Public Sector 2,037 1,393 1,705 2,230 5,157 3,093 4,439 4,438 Operating Profit* 498 218 379 **353 * Prior to intergroup management fee and foreign exchange gains or losses** Prior to one-off pension payment A year of extremely strong organic growth for The Finishing Touch has beenlargely defined by its success in securing the three-year contract for theTraining and Development Agency's schools training programme, with aclient-controlled option for a two-year contract extension. This win, the resultof a long-running tender process, represents major growth for the public sectordivision of The Finishing Touch's business, secures a significant medium-termincome stream, and positions the company superbly to win additional publicsector work. The full event planning and management services offered by TheFinishing Touch are largely unique within the public sector market, and thecompany has already been approached to develop projects for several other publicsector bodies. Recent announcements of additional funding for education arelikely to increase the value of the schools training programme account stillfurther, with indications for 2008 suggesting the number of events willsignificantly exceed initial projections. The new Public Sector contractcommenced on 1 August full benefits of which will be seen over the coming years. The corporate side of the business also delivered strong growth during 2007 withlike-for-like income growth in excess of 33 per cent, supplemented with theacquisition of Yell Communications delivering a contract for Prudential and alarge-scale staff education roadshow for a leading insurance group. This newbusiness comes in addition to The Finishing Touch's ongoing preferred suppliercorporate contract with Accenture and strong record of repeat business throughsuccessful client retention. Record trading periods during Christmas 2006 andJune 2007 testify further to the vitality of the corporate operation. The immediate opportunity for additional growth lies in the further expansion ofthe corporate business, building on the recent launch of a new brand, corporateidentity and website for The Finishing Touch. Following the long-term tenderprocess for the schools training programme, new business resources are nowincreasingly available to the corporate operation. At the same time, TheFinishing Touch will remain alive to the possibilities for growth arisingthrough its delivery of the Training and Development Agency's programme. The Finishing Touch continues to innovate within the events business, with anumber of new venues and bespoke corporate activities in creative and commercialdevelopment. The business is also exploring the possibility of launching whollyowned live event properties, such as awards dinners, with rights, sponsorshipopportunities and ticket sales controlled by the First Artist Group. FIRST ARTIST ENTERTAINMENT/ SPORT MANAGEMENT Year ended 31 10 months ended 31 Year ended 31 August August October 2007 2006 2005 £000 £000 £000TurnoverSport 6,481 4,162 4,171Entertainment 744 331 241Wealth 2,613 1,873 592 9,838 6,366 5,004 Operating Profit* 1,982** 2,054** 1,510 * Prior to intergroup management fee and foreign exchange gains or losses ** These figures only include the results for First Artist Scandinavia for the2006 summer football trading window and do not include the losses which occur inthe non-trading periods of a financial year. The 2007 figures reflect a full 12months trading from the business. FIRST ARTIST MANAGEMENT (ENTERTAINMENT) Within a fast-consolidating entertainment representation market, scale andownership hold the key to increasing influence and unlocking value. Following animportant year of consolidation, First Artist Management is now in a position toadvance in both of these areas. With a strengthened management team and a strong track record for buildingcredible and valuable personality brands, the acquisition of NCI Management in2006 has transformed the basis of First Artist's Entertainment division, nowrenamed First Artist Management to reflect its particular strengths as a 'TotalManagement' agency. The high profile of clients such as Gillian McKeith, AndreaMclean, Andy Gray, Amanda Lamb and Ruud Gullit, who we recently placed asmanager of the LA Galaxy soccer team, continue to build the credibility of FirstArtist Management's offer in both sport and expert-led entertainment, and weexpect the company's reputation in both of these areas to continue to encourageorganic growth. The business has continued to expand its Corporate Speakingdivision and recently introduced a Celebrity Booking arm, which recentlysupplied all the stars for Sky TV's Premier League AllStars competition,alongside its developing Public Relations team. With the focus of the television industry shifting towards light entertainment,following the success of formats such as Strictly Come Dancing, where we workedclosely with John Barnes which followed up on last year's success with PeterSchmeichel, the key opportunity for additional growth comes through expansion ofFirst Artist Management's roster of clients in this area. Scale and breadth ofan entertainment portfolio is a key stone for success in the current climate,and First Artist Corporation intends to target complementary, value-addingacquisitions in order to build its presence in light entertainment more rapidlyover the coming year. Going forward, the combination of First Artist Management's strong record fordeveloping original programming concepts around the particular expertise of itsclients, combined with additional reach in the pure entertainment and sportingspheres, presents exciting opportunities for the development of new TV formats.The media sales expertise and rights-ownership model developed by First Rightspositions the Group to develop such formats into secure, long-term owned revenuestreams. FIRST ARTIST SPORT First Artist Sport has delivered an extremely strong performance over the past12 months, with substantial increases in revenue across Europe, following lastyear's successful acquisition of First Artist Scandinavia, the continued successof the agency's unique pan-regional offer, and emerging industry trends arelikely to strengthen the position of the business further. The operating profitfor the 10 months ended 31 August 2006 is ahead of the current year for sport,due to the strategic acquisition of First Artist Scandinavia in June 2006. Thetiming of this acquisition enabled the Group to account for the Company'sprofits generated in the summer trading window of 2006 without the losses fromthe previous 9 months, whereas the current year includes the full 12 monthsfigures. Despite obstacles such as transfer windows and restrictions on player movements,the transfer market is proving extremely buoyant, delivering more revenue duringtwo transfer windows in 2007 than it did when an entire year of trading wasavailable five years ago, delivering 126 deals including 17 international crossborder brokerage deals. The English Premiership is in the first year of a newlucrative three-year TV Rights deal, ensuring a secure flow of revenue into thegame, with the increased trend towards foreign ownership likely to injectfurther capital. The international nature of the transfer market rewards First Artist Sport'sposition as the only representation agency with a true international network.Italy's World Cup victory has helped to underpin a strong performance in thatcountry, First Artist Scandinavia continues to grow, and the network isconducting more deals than ever in Germany, France and Spain. With cross-bordertransfers delivering higher commissions, First Artist's international reachresults in higher margins as well as increased revenues. Within the UK, player representation is moving in the favour of larger,transparent and responsible agencies and First Artist is working closely withits peers in the first co-ordinated industry effort to raise standards anddefine regulatory guidelines. First Artist Sport's credibility is further raisedby its prestigious work arranging matches and pre-season tournaments for clubssuch as Arsenal, Glasgow Rangers, Ajax and Sheffield Wednesday. First ArtistSport currently boasts the youngest and broadest roster of player talent in itshistory, further building the agency's credibility and helping to ensure thesustainability of its success. Changes to the industry's standard model for agency remuneration are anotherextremely positive development, ensuring that agency payments are spread overthe life of a contract, rather than concentrated in a single, up-front lump sum.For a business with a healthy cash flow, such as First Artist Sport, such adevelopment brings major benefits, improving the stability and transparency ofrevenues and further encouraging responsible representation practices. OPTIMAL WEALTH MANAGEMENT Year ended 31 10 months ended 31 Year ended 30 Year ended August August June 30 June 2007 2006 2007 2006 £000 £000 £000 £000TurnoverInvestments 2,007 1,533 2,026 1,672Renewals 606 340 559 383 2,613 1,873 2,585 2,055 Operating Profit* 836 801 961 833 * After 'joint venture' set-up costs, prior to intergroup management fee andforeign exchange gains or losses In the wealth management market, a company's profitability derives from thequality of its clients and the service levels it provides. Optimal WealthManagement's highly successful 2007 is a case in point. The company hassucceeded both in increasing the share of high net-worth individuals in itsclient mix, and establishing the mechanisms to support continued injection ofhigh-quality work in the future; it has done so in a year that was expected tothrow up tougher conditions following the demand for wealth management servicescreated by the 'A Day' changes to pension regulation. It has been Optimal's long-term strategy to improve the quality of its clientbase and dramatic strides have been made in the last two years, following theintegration of the company within the First Artist Group. Synergies with FirstArtist Sport's high-earning football client base have increased exposure totop-end clients; client satisfaction and referral have multiplied the effect.At the same time, the management support available through the Group hasfurthered the development of a consistent brand strategy, focused on clientquality and increasing margins. The company continues to invest in thedevelopment of high quality Independent Financial Advisory staff throughrecruitment and training at all levels specifically designed to furtherstrengthen Optimal's reputation for quality service. Expanding access to high net-worth individuals will remain the central plank ofOptimal's strategy for growth, prioritising profit margins through the qualityof the client mix. The company's 'joint venture', Fisher Family Office, with theaccountancy firm, HW Fisher, began to deliver revenues during the year and formsa key element of this strategy. Providing a key value service to HW Fisher'shigh net worth clients will give Optimal the ability to target a new stream ofhigh-quality wealth management work. The wealth management market will face challenges over the next 12 months: thesummer's credit crunch can be expected to have an impact on consumer confidence,with some effects filtering through to the high-net-worth market; increasedgovernment regulation will also play a role, although it should be hoped thatthe more forceful measures will focus on the mass market for financial serviceswhere most cases of mis-selling occur, and where they are most obviously needed. Set against these trends is the market's ongoing product innovation, which hasensured a lively interest in the high-net-worth market over the last two years,Optimal's extremely strong record for client retention and the consistentstrengthening of its revenues through a quality client mix. With the possibilityof further partnerships and joint ventures following the HW Fisher model, theoutlook for the year ahead remains a firmly positive one. THE FUTURE No business can plan sensibly for the future without first securing stabilityand consistent growing revenue streams in the present. First ArtistCorporation's success in doing so is what makes its position in the media,events and entertainment sectors so exciting. Without doubt during this decade media has undergone and continues to undergosignificant and rapid change. The influence of the internet on fragmentingmedia channels, changing influence models and consumer demand for control ofinformation has been well documented. The web's share of media budgets hasincreased in response; however, digital is far from the only marketing channelto have increased in influence in the new media landscape. Brand experience, particularly live events, is one of the most promising routesto overcoming media fragmentation, ensuring connections with audiences over anumber of channels. Although the delivery method is less relevant; theconnection is equally valid no matter how the experience reaches consumers.Sponsorship, live events and branded entertainment are disciplines with anincreasing role to play; the ability to develop and control different contentformats is likely to prove ever more important to marketers. The music industry forms a fascinating comparative benchmark for the changescurrently sweeping media and entertainment. The decline of traditional salesunder pressure from legitimate and illegitimate online activity has triggered adramatic realignment in the relationship of musicians and record labels to theiraudiences. The focus is increasingly shifting to live performance, andassociated merchandising, as the key to unlocking value, with the value ofonline music distribution seeming to lie increasingly in its promotional effectrather than in the revenues that it generates. First Artist Corporation has been grown to succeed in an environment just suchas this, where no single media channel can be assured of a primary role for long- or of a broadcast audience. In such an environment the skills required tocreate compelling audience experiences, through live events, originalentertainment formats, sports and exhibitions, will prove increasinglyimportant. The complementary skills now residing in the First Artist Groupposition it to take full advantage of opportunities in these areas as theyemerge. The group will continue to seek synergistic acquisitions in its threedivisional sectors acting as a consolidator in a fragmented marketplace. Importantly, the Group is not a vision of the future waiting impatiently forreality to catch up. By a strict policy of acquiring synergistic, value-adding,profitable and growing businesses, First Artist Corporation has built up itsposition of strength and potential without sacrificing stability or short-termrevenue. It is the strong track record for organic growth and the credibilityand expertise that come through success that position the Group so strongly forthe future. OPERATING & FINANCIAL REVIEW Competitive Performance Year Ended 10 Months Ended Variance 31 August 31 August 2006 2007 (Restated) £'000s % growth £'000s £'000s Turnover 48,607 411% 9,508 39,099 Adjusted Operating Profit 3,533 118% 1,620 1,913 Exceptional items (322) (170) (152)Goodwill (500) - (500) Operating Profit 2,711 1,450 1,261Net interest (1,220) (283) (937) Profit before tax 1,491 28% 1,167 324 Taxation (639) (502) (137) Retained Profit 852 665 187 EPS 6.81 pence 7.08 pence (Basic earnings per share)EPS 15.71 pence 10.66 pence (Basic earnings per sharebefore goodwill and exceptional) Outline Our media division was the principal growth area for the financial year,following on from the acquisition of the Dewynters Group in November 2006. Thenumber of shows currently being supported by Dewynters in the UK has grown to 26(18 in May 2006), combined with the strong growth from the Dewynters' USmerchandising operation (11 shows on Broadway and in Las Vegas) and the theatreand cinema display business Newman Displays this has led to a significantincrease in the division's performance, with the entire division now accountingfor 69% of Group turnover and 49% of Group operating profit (pre. group centralcosts). The events division, The Finishing Touch, experienced 60% like-for-like turnovergrowth and successfully integrated the acquisition of event logistics businessYell Communications. In August, the business also successfully gained asignificant three-year Public Sector event management contract for The Trainingand Development Agency for Schools the true benefits of which will be enjoyed inthe coming year. Group gross profit to adjusted operating profit margins have reduced to 18%(2006: 26%) in the current year, due mainly to the additional central managementand support costs required to operate the considerably enlarged Group. Thesecosts will flatten in 2008 as the increased administrative costs will be spreadover a full twelve-month period. It is believed that margins could be improvedabove current levels and a key aim of the group is to further rationalise thesupplier base and benefit from the associated economies of scale, along withoperational efficiencies improving gross profit margins. In September 2007 anumber of group companies consolidated into new West End offices. Although thismove will generate some savings and significant operational benefits frombusinesses working in close proximity, there will be increased property costsgoing forward. Despite this we believe that a gross to adjusted operatingprofit margin in excess of 20% would be considered achievable in the short tomedium term. Turnover Group turnover for the year has increased 411% compared to the previous 10-monthperiod. This figure includes 10 months trading from Dewynters Group followingthe acquisition during the year. Adjusted Operating Profit The adjusted operating profit for the Group, before goodwill amortisation andexceptional costs, increased 118% to £3.53 million. Accounting for foreign exchange gains or losses the adjusted operating profit is£3.61 million (2006: £1.66 million). Gross profits in the year increased by 210% compared to the previous ten-monthperiod, whilst Group administrative expenses, excluding goodwill amortisation,foreign exchange gains or losses and exceptional charges, increased by 240% to£16.04 million. The acquisitions over the last 30 months have transformed the Group, resultingin a broad based integrated media, events and entertainment/sport managementgroup, significantly increasing visibility of earnings, and generating positivecash flow, although the group still remains slightly second-half weighted. Foreign Exchange Foreign exchange costs amounted to £0.08 million (2006: £0.04 million), mainlydue to the devaluation of the US dollar against Sterling. Key Performance Indicators (KPI) A number of percentage-based KPI's are used for internal reporting purposes,relating to gross profit, operating profit and personnel costs. KPI's are alsocalculated on staff numbers to give gross profit, operating profit and grossprofit per head. As a summary the operating profit to gross profit margin was in line withexpectations, with personnel costs per gross profit better than expected due totight controls over rising personnel and recruitment costs. Goodwill impairment, amortisation and exceptionals The valuation of goodwill is subject to amortisation charges and annualimpairment reviews. Impairment provisions are made as appropriate. Theamortisation charge for the year of £0.50 million is a non-cash adjustment andwill be reversed in next year's financial statements as a result of theimplementation of International Financial Reporting Standards (IFRS). A newnon-cash charge based on the amortisation of identifiable intangible assets willreplace the existing goodwill amortisation under the reporting guidelines. Exceptional costs incurred during the year resulted from the acquisitions in theyear. Interest payable, funding and liquidity Net interest payable was £1.22 million (2006: £0.28 million). A total of £0.29million relates directly to the unwinding of the discounted deferredconsideration, in accordance with FRS7, "Fair value in acquisition accounting".This FRS7 charge is a non-cash adjustment and relates to the provision of a netpresent valuation on deferred consideration required under this standard. The first drawdown on the new bank loans was in January 2007, with the interestcharge for the year in respect of these loans totalling £0.93 million. A bankloan arrangement fee amounted to £0.25 million, which is also subject to anon-cash unwinding adjustment, based over the seven year period of the loan andaccounting for £0.02 million during the year. Taxation The tax charge of £0.64 million (2006: £0.50 million) fully utilises theCompany's taxable losses for the year across the whole Group. The effective taxrate for the year of 43% is particularly high due to the goodwill amortisationcharge of £0.50 million and the unwinding of discount on deferred considerationof £0.29 million. Earning per share Basic earnings per share was 6.81p (2006: 7.08p) with earnings per share beforeexceptional administrative items, deemed interest on deferred consideration andgoodwill amortisation being 15.71p (2006: 10.66p). The latter increase is dueto the significantly enhanced profitability (excluding goodwill amortisation,deemed interest on deferred consideration and exceptional costs) of the enlargedGroup following the roll out of the acquisition programme from 2005 to present. Divisional Performance Year Ended 10 Months Ended 31 Year Ended 31 August August 31 October 2007 2006 2005 (Restated)Division £'000s £'000s £'000s Media 33,612 69% 49 - - -Events 5,157 11% 3,093 33% 857 15%Entertainment / Sport Management* 9,838 20% 6,366 67% 5,004 85% Turnover 48,607 9,508 5,861 Media 2,428 49% - - - -Events 498 10% 218 10% 76 5%Entertainment / Sport Management* 1,982 41% 2,054 90% 1,510 95%Group Costs (1,296) (613) (588) Adjusted Operating Profit** 3,612 1,659 998 *Incorporating Wealth Management ** Before exceptional administrative expenses, goodwill amortisation and foreignexchange gains or losses Turnover Following the acquisition of Dewynters in the year group turnover of £48.61million is heavily weighted in favour of the media division (£33.61 million),with this sector accounting for 69% of turnover. The entertainment/sportdivision now accounts for 20% of turnover compared to 85% two years ago. Thisclearly indicates the transformation undertaken by the Group, moving away frombeing predominantly reliant on seasonal sport income. The events turnover has delivered a 67% increase in the main through organicgrowth within the Corporate Sector. Adjusted operating profit after adjusting for foreign exchange gains or losses The media division has made a significant contribution in the period, withoperating profits of £2.43 million (before Group recharges) for the year coveredby this report, compared to nil contribution in the previous period. The media operating profit generated equates to 49% of all profits and againindicates the transformation undertaken with the acquisition strategy over thepast two financial periods. Indeed, two years ago the sport and entertainmentdivision accounted for 95% of operating profit, compared to 41% this year. The events division has increased operating profits by 128% in comparison to theprior 10-month period. This performance was significantly helped by the bestChristmas figures in The Finishing Touch's history, as well as a packedprogramme over the summer months and the benefit of work derived from the YellCommunications contracts. Key Performance Indicators (KPI) Within the media division Dewynters showed a favourable operating profit togross profit indicating efficiency within the Company. Personnel costs per headwere also within the KPI target. Sponsorship Consulting showed high personnelcosts to gross profit and low gross profits per head due to the losses madeduring the year, although we are forecasting this to be reversed into profits inthe coming year. The events division also showed operational efficiency, with operating profit togross profit beating the KPI target. Operating profit per head was slightly downon target due to the need to 'staff up' in advance of the new TDA contractbeginning in August. Within the entertainment/sport management division the gross profit for sportwas slightly down on the KPI target, due to a number of the larger dealsinvolving third parties. Personnel costs per head were better than KPI due tosport not recruiting any further senior agents. Optimal beat the KPI target onoperating profit per head by some distance, emphasising the excellent set ofresults. Geographical Performance Year Ended 10 Months Ended 31 Year Ended 31 August August 31 October 2007 2006 2005 (Restated)Geographic Region £'000s £'000s £'000s United Kingdom 40,719 84% 7,419 78% 4,113 70%Europe 3,490 7% 2,089 22% 1,738 30%United States 4,398 9% - - 10 - Turnover 48,607 9,508 5,861 United Kingdom 4,234 86% 1,780 78% 1,385 87%Europe 550 11% 492 22% 201 13%United States 124 3% - - - -Group Costs (1,296) (613) (588) Adjusted Operating Profit** 3,612 1,659 998 *Incorporating Wealth Management ** Before exceptional administrative expenses, goodwill amortisation and foreignexchange gains or losses Turnover Group turnover is naturally heavily weighted in the United Kingdom, withDewynters Ltd largely accounting for the percentage split of 84% (2006: 78%).European income although has grown some 67% this year whilst reducing as apercentage of the total to 7% (2006: 22%). Turnover from the United States is agrowth area and relates purely to the merchandising operation, DewyntersAdvertising Inc. which now accounts for 9% of turnover (2006: Nil). Adjusted operating profit after adjusting for foreign exchange gains or losses The United Kingdom accounted for 86% of Group adjusted operating profits (2006:78%), Europe 11% (2006: 22%) and US 3% (2006: Nil) . The above graphicalillustration above gives a snapshot view of the growing UK business as well asthe emergence of the US market over the year. Review of Operations Balance Sheet Shareholders' funds Shareholders' funds increased by 43% million to £7.27 million. The increase wasmainly due to net profit and foreign exchange of £0.89 million and net proceedsfrom share issues of £0.81 million. Cash Flow During the year the Group secured a new seven-year banking loan facility of£11.00 million and a new two-year banking loan facility of £2.79 million, bothwith Allied Irish Bank. These were used to provide working capital andfacilitate the acquisition programme of the Group. The table below indicates thesplit of net debt over 3 periods. The Board believes that the level of gearing, at 133% (2006: 75%), that hasresulted from these transactions is acceptable given the cash generative natureof the enlarged Group. The Board envisages that the current Group's borrowinglevels will steadily reduce whilst it retains sufficient financial flexibilityto continue to invest in developing its businesses. Interest cover of 3.6 timesunderlines this assertion. The Board has assessed the level of risk in the Group and feels that this hasbeen reduced significantly through the creation of a broad based integratedgroup of individually trading profit centres. 31 August 31 August 31 October 2007 2006 2005 £m £m £m One year bank loan - (1.00) -Two year mezzanine bank loan (2.79) - -Five year bank loans - (2.78) (1.55)Seven year bank loan (9.98) - -Other group net debts (0.48) (0.90) (0.37)Cash in hand and bank overdrafts 3.55 0.88 1.27 (9.70) (3.80) (0.65) The Group has become significantly more cash generative in the last year as canbe seen in the analysis below. Year Ending 31 10 Months ended 31 August 2007 August 2006 Audit Audit (Restated) £'000s £'000s Operating Profit 2,711 1,450 Depreciation 416 73Working capital & other movements (199) (1,443)Goodwill amortization & impairment 500 -Net interest paid & similar changes (1,167) (102)Tax paid (535) (450)Net cash generation 1,726 (472) Capital Expenditure (823) (241)Acquisition payments (7,566) (2,749)Net share capital raised 812 900Bank & other loans 8,525 2,171Net cash inflow/(outflow) 2,674 (391) Acquisitions Two businesses were acquired and successfully integrated into the Group duringthe last year. The full results of operational cost savings and increased incomethrough the cross-referral of business should be seen in next year's Report andAccounts. November 2006 Dewynters Limited (including Dewynters Advertising Inc & Newman Displays Limited) Media / Marketing Total maximum consideration payable (excluding discount for Net Present Value) £15.50 million Initial consideration paid £9.60 million cash and 0.1 million shares May 2007 Yell Communications Limited Event Management Total maximum consideration payable (excluding discount for Net Present Value) £1.00 million Initial consideration paid £0.40 million cash Risks associated with the Group The Group is subject to a number of macro economic factors, as with otherbusinesses, such as interest rate and foreign exchange rate fluctuations, whichare outside the Group's control. On a more specific basis the regulatory environments in football and wealthmanagement continue to change, impacting on risk. However, certainly infootball, the Group is well positioned for any changes due to its involvementwith the Agents Association. The loss of key personnel can also be considered arisk, although the retention post earn-out of the key figures in Optimalsuggests that this risk is being managed effectively. On a competitive basis, although Dewynters dominates its market it could beargued that the business is reliant on the success of the West End Productionsand the general economic climate. In fact, Dewynters benefits two-fold in themajority of cases as new productions have higher spends and hence profits,whilst lower seat numbers often lead to higher marketing spends by theproduction house. Finally, the football market is saturated and dependent upon the agents securingtransfer contracts during the trading windows, often involving large sums ofmoney. This ensures period to period comparisons cannot be fully relied upon.Here, the pipeline income generated in this area has grown considerably over thelast year, which helps to remove the uncertainty over income generation. Richard HughesGroup Managing Director16 November 2007 CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the year ended 31 August 2007 Notes Continuing Acquisitions Total year Total 10 months operations year ended ended ended year ended 31 August 31 August 31 August 31 August 2007 2007 2006 2007 (restated) £000 £000 £000 £000 TURNOVER 2 15,728 32,879 48,607 9,508Cost of sales (5,664) (23,249) (28,913) (3,168) GROSS PROFIT 10,064 9,630 19,694 6,340Administrative expenses (9,639) (7,344) (16,983) (4,890) OPERATING PROFIT before exceptionaladministrative expenses 1,247 2,286 3,533 1,620Exceptional administrative expenses (322) - (322) (170)Goodwill amortisation (500) - (500) - OPERATING PROFIT 425 2,286 2,711 1,450 Interest receivable 61 21Interest payable (1,281) (304) PROFIT ON ORDINARY ACTIVITIES BEFORE 1,491 1,167TAXATIONTaxation 3 (639) (502) RETAINED PROFIT FOR THE YEAR / PERIOD 852 665 EARNINGS PER SHARE Basic earnings per share 4 6.81 pence 7.08 pence Fully diluted earnings per share 6.26 pence 6.23 pence CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESfor the year ended 31 August 2007 Year ended 10 months ended 31 August 31 August 2007 2006 (restated) £000 £000 Profit for the financial year/period 852 665Currency translation differences on net foreign currency 34 6investments Total recognised gains and losses relating to the year/period 886 671 Prior year adjustment (133) Total recognised gains and losses since last financial statements 753 CONSOLIDATED BALANCE SHEET31 August 2007 31 August 31 August 2007 2006 Notes (restated) £000 £000FIXED ASSETSIntangible assets 21,847 9,517Tangible assets 2,157 835Investments 118 118 24,122 10,470 CURRENT ASSETSStock 1,074 -Debtors 11,832 6,895Cash at bank and in hand 3,914 1,108 16,820 8,003 CREDITORS: Amounts falling due within one year (14,609) (7,709) NET CURRENT ASSETS 2,211 294 TOTAL ASSETS LESS CURRENT LIABILITIES 26,333 10,764 CREDITORS: Amounts falling due after more than one year (11,494) (2,252) PROVISIONS FOR LIABILITIES (7,572) (3,423) NET ASSETS 7,267 5,089 CAPITAL AND RESERVESCalled up share capital 328 270Capital redemption reserve 5 15 15Share premium account 5 10,011 8,849Shares to be issued 5 - 5Share option reserve 5 210 133Profit and loss account 5 (3,297) (4,183) EQUITY SHAREHOLDERS' FUNDS 7,267 5,089 CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 August 2007 Notes Year ended 10 months ended 31 August 31 August 2007 2006 £000 £000 Cash inflow from operating activities 6a 3,428 80 Returns on investments and servicing of finance 6b (1,167) (102) Taxation 6b (535) (450) Capital expenditure and financial investment 6b (823) (241) Acquisitions 6b (7,566) (2,749) CASH OUTFLOW BEFORE FINANCING (6,663) (3,462) Financing 6b 9,337 3,071 INCREASE / (DECREASE) IN CASH IN THE YEAR / PERIOD 2,674 (391) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Year ended 10 months ended 31 August 31 August 2007 2006 £000 £000 Increase / (decrease) in cash in the year / period 2,674 (391) Cash from increase in debt financing (8,299) (2,173) New finance leases (2) 34 Loan notes and additional funding (277) (623) (5,904) (3,153) NET DEBT AT START OF YEAR / PERIOD (3,801) (648) NET DEBT AT END OF YEAR / PERIOD (9,705) (3,801) NOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 August 2007 1. BASIS OF ACCOUNTING The financial information contained in this report does not constitute statutoryaccounts within the meaning of Section 240 of the Companies act 1985. The financial information contained in this report has been extracted from theaudited accounts of the Company for the year to 31 August 2007 for which theauditors have given an unqualified report. The financial statements have been prepared under the historical cost conventionand in accordance with applicable accounting standards in the United Kingdom. 2. SEGMENTAL REPORT The group's net assets, turnover and profit/(loss) before taxation were allderived from activities in the following geographical markets: Year ended 31 August 2007 10 Months ended 31 August 2006 Net assets Turnover Profit before Net assets Turnover Profit before tax tax £000 £000 £000 £000 £000 £000 United Kingdom 6,617 40,719 1,355 4,552 7,419 675Europe 664 3,490 24 727 2,089 492Other (14) 4,398 112 (190) - - 7,267 48,607 1,491 5,089 9,508 1,167 Net assets, turnover and profit before tax by destination are not materiallydifferent from the above. The group's net assets, turnover and profit before taxation originated from thefollowing activities: Year ended 31 August 2007 10 Months ended 31 August 2006 Net assets Turnover Profit/(loss) Net assets Turnover Profit/(loss) before tax before tax £000 £000 £000 £000 £000 £000 Media 3,612 33,612 2,189 90 49 -Events 121 5,157 298 776 3,093 230Entertainment /Sport 1,903 9,838 1,099 2,837 6,366 1,994Group Net Assets/ 1,631 - (2,095) 1,386 - (1,057)Costs 7,267 48,607 1,491 5,089 9,508 1,167 3. TAXATION Year ended 31 10 months ended 31 August 2007 August £000 2006 £000Current tax:UK corporation tax charge on profits of the period 630 351Foreign taxes 46 175Adjustments in respect of previous periods 1 (24) Current tax charge for the period 677 502 Deferred taxation:Origination and reversal of timing differences (38) - Tax charge on profit on ordinary activities 639 502 Factors affecting tax charge for period: 2007 2006 £000 £000The tax assessed for the period differs from the standard rate ofcorporation tax in the UK (30%). The differences are explained below:Profit on ordinary activities before tax 1,491 1,167 Profit on ordinary activities multiplied by standard rate ofcorporation tax in the UK 30% (2006: 30%) 447 350Effects of:Expenses not deductible for tax purposes 59 83Capital allowances in excess of depreciation (15) (1)Amortisation of goodwill 150 -Tax losses (utilised) / not utilised - (46)Differences in foreign tax rates 35 140Adjustment to tax charge in respect of previous periods 1 (24) Current tax charge for period 677 502 4. EARNINGS PER SHARE The calculations of earnings per share are based on the following profits andnumber of shares: Year ended 31 10 months ended 31 August August 2007 2006 £000 £000 Profit on ordinary activities after taxation 852 665 2007 2006 No of Shares No of Shares (restated)* For basic earnings per share 12,506,588 9,392,581Dilutive effect of share options 1,109,621 1,276,898 For diluted earnings per share 13,616,209 10,669,479 \* The number of shares has been restated to show the effect of the 10 for 1 shareconsolidation on 27 December 2006. 5. RESERVES AND RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS Share Shares to Capital Share Share Profit and Total Total capital be issued redemption premium option shareholders' shareholders' reserve reserve Loss funds funds (restated) account (restated) 2007 2006 (restated) £000 £000 £000 £000 £000 £000 £000 £000GROUPAt start of year/ 270 5 15 8,849 - (4,050) 5,089 3,306periodPrior year adjustment - - - - 133 (133) - - At start of year/ 270 5 15 8,849 133 (4,183) 5,089 3,306period restatedRetained profit for - - - - - 852 852 665the financial periodShare placement issue 40 - - 960 - - 1,000 1,005Shares issued to 3 - - 60 - - 63 71vendors to acquiresubsidiaryundertakingsShares issued to 14 - - 391 - - 405 36vendors as deferredconsiderationShares to be issued to - (5) - - - - (5) 5vendors as deferredconsiderationShares issued 1 - - 18 - - 19 15Issue costs - - - (267) - - (267) (120)Share based payment - - - - 77 - 77 100chargeExchange adjustments - - - - - 34 34 6 At end of year/period 328 - 15 10,011 210 (3,297) 7,267 5,089 Share Shares to Capital Share Share Profit and Total Total capital be issued redemption premium option shareholders' shareholders' reserve reserve Loss funds funds (restated) account (restated) 2007 2006 (restated) £000 £000 £000 £000 £000 £000 £000 £000COMPANYAt start of year/ 270 5 15 8,849 - (4,047) 5,092 2,695periodPrior year adjustment - - - - 133 (133) - - At start of year/ 270 5 15 8,849 133 (4,180) 5,092 2,695period restatedRetained profit for - - - - - 1,116 1,116 1,285the financial yearShare placement issue 40 - - 960 - - 1,000 1,005Shares issued to 3 - - 60 - - 63 71vendors to acquiresubsidiaryundertakingsShares issued to 14 - - 391 - - 405 36vendors as deferredconsiderationShares to be issued to - (5) - - - - (5) 5vendors as deferredconsiderationShares issued 1 - - 18 - - 19 15Issue costs - - - (267) - - (267) (120)Share based payment - - - - 77 - 77 100charge At end of year/period 328 - 15 10,011 210 (3,064) 7,500 5,092 6. CASH FLOWS a. Reconciliation of operating profit to net cash inflow from operatingactivities Year ended 31 10 months ended 31 August August 2007 2006 (restated) £000 £000 Operating profit 2,711 1,450Depreciation 416 73Amortisation of goodwill 500 -Profit on disposals of fixed assets - (9)Share options charge 77 100Increase in inventories (108) -Decrease/ (increase) in debtors 223 (1,389)Decrease in creditors (425) (151)Exchange differences 34 6 Net cash inflow from operating activities 3,428 80 b. Analysis of cash flows for headings netted in the cash flow Year ended 31 10 months ended 31 August August 2007 2006 (restated) £000 £000 Returns on investments and servicing of finance Interest received 61 21Interest on bank loans (925) (99)Issue costs of bank loan (226) -Other interest paid (75) (20)Interest element of finance lease rental payments (2) (4) Net cash outflow from returns on investments and servicing of finance (1,167) (102) Taxation UK corporation tax paid (352) (450) Overseas tax paid (183) - Net cash outflow from taxation (535) (450) Capital expenditure and financial investment Purchase of tangible fixed assets (823) (129)Sale of tangible fixed assets - 6Other investments - (118) Net cash outflow from capital expenditure and financial investment (823) (241) Acquisitions Consideration on acquisition of subsidiary undertakings 11,092 3,420 Cash on acquisition of subsidiary undertakings (3,526) (671) Net cash outflow on acqusitions (7,566) (2,749) b. Analysis of cash flows for headings netted in the cash flow (continued) Year ended 31 10 months ended 31 August August 2007 2006 (restated) £000 £000Financing Issue of share capital 1,019 1,020Costs of issue of shares (207) (120)New bank loans 12,999 2,500Director's loans (33) (60)Other loans (4,441) (258)Capital element of finance lease rental payments - (11) Net cash inflow from financing 9,337 3,071 c. Analysis of changes in net debt At Cash flow Other non cash At changes 1 September 31 August 2006 2007 £000 £000 £000 £000 Cash at bank and in hand 1,108 2,806 - 3,914Bank overdrafts (231) (132) - (363) 877 2,674 - 3,551 Finance leases (48) - (2) (50)Debt due within one year (2,411) 720 (277) (1,968)Debt due after more than one year (2,219) (9,019) - (11,238) (4,678) (8,299) (279) (13,256) Total (3,801) (5,625) (279) (9,705) Non cash changes include an amount of £432,000 relating to loan notes payable onthe acquisition of the Finishing Touch (Corporate Events) Limited. These arepayable in January 2008. 7. ANNUAL REPORT Copies of the Annual report and Financial Statements will be will be circulatedto Shareholders shortly and may be obtained after the posting date from theCompany Secretary, First Artist Corporation plc, 3 Tenterden Street, London, W1S1TD, or from the Company's website: www.firstartist.com This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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