14th Dec 2005 07:00
Talent Group Plc ("Talent" or "the Company") Preliminary Results for the year ended 30 September, 2005 Chairman's StatementI am pleased to report your Company's results for the year ended 30th September2005. This has been a year of further progress towards our twin goals ofsustainable profitability and increased programme making.Turnover for the year increased to ‚£5,619,000, from ‚£5,424,000 in the previousyear, resulting in a profit before goodwill amortisation and taxation of ‚£165,000 (‚£15,000 in 2004) and a profit before taxation of ‚£46,000 (loss of ‚£104,000 in 2004), which is our first since the Talent Group was admitted toAIM, on the reverse takeover of RMR plc at the end of 2002. Your directors arenot recommending payment of a dividend for the year.We have had a particularly active year. As well as producing four moreprogrammes in our successful Test the Nation series for BBC ONE, we alsoproduced an entertainment feature, What Did ITV Do For Me?, as part of ITV's50th anniversary celebrations, along with a short series of our hit children'sformat, Best of Friends, set in South Africa, as part of the BBC's "AfricaWeek" special event in July 2005. Test the Nation also gained industry plauditsby winning a Rose D'Or at the international television festival in Switzerlandin the summer and we have also licensed the format to Contender EntertainmentGroup to produce two interactive DVDs, the first of which is in the shops nowfor the current Christmas season. Our advance royalty income from this isreflected in the figures reported today.I am also delighted to report that the Company has started the new financialyear with our strongest slate of commissions in its history. These include ourfirst commission from Channel 4, a documentary entitled The Hunt for the Manwith 80 Wives, and Must See TV, an entertainment series for ITV. These titles,along with the new factual entertainment format How Euro Are You? that weproduced for BBC TWO earlier in the year, means that four of the five majorterrestrial channels in the UK are now our clients.We are beginning to reap the rewards of our investment in people by realisingthe added value of owning Rights and Intellectual Property. This isdemonstrated by the Test the Nation interactive DVD launch to which I referredpreviously. For all these reasons, I am looking forward to a continuedimprovement in our performance in the current year.Board ChangesColin Nicholl has decided not to seek re-election at the AGM and so, on behalfof the Board, I would like to thank him for his contribution to the Group overthe last three years.Once again, my thanks go to the whole team at Talent, our advisers and ourshareholders for their continued support over the last twelve months.Robert J BentonChairman13th December 2005Managing Director's ReviewA YEAR OF FIRSTSI am pleased to report that this year has been a year of continued progress.On the production front, Talent TV recently secured its first commissions fromChannel Four and BBC TWO, which resulted in the Company being in production, atthe same time, on programmes for four of the five major UK terrestrialbroadcasters. And the first Test the Nation interactive DVD has been listed bymost major retailers, showing the meaningful progress that is being made in theexploitation of the Company's secondary rights.As we create and produce more of our own Intellectual Properties andprogrammes, the successful exploitation of secondary rights will take on moreimportance to the blend and timing of the Company's revenue. The objective nowis to utilise the Company's current resource to its full capacity and keep thepositive momentum going in order to grow more material profits for yourCompany.Our ProductionsTest the Nation (BBC ONE) "The 2005 Test" in December will be the fourteenthprogramme in the series and I'm delighted to say that the BBC's faith in itcontinues to be rewarded. As Broadcast magazine from the 28th October 2005stated¢â‚¬¦ "BBC1's Saturday night also depends heavily on independents. Talent TVhas cornered the market with Test the Nation - this week (ending 9th Oct) ithad the Know Your English Test on Saturday at 9.10pm with 5.4 million viewersand a 25% share, on a night when BBC1 overall got a 23% share". Earlier in theyear, Test the Nation also won a prestigious international Rose D'Or inLucerne, whilst in October it was nominated by a voting public for a NationalTelevision Award. With two further shows already confirmed for the first halfof 2006, we are confident that this major programming brand will continue toperform well.Test the Nation - Japan (TV Asahi) The last "IQ Test" in Japan performed wellin the ratings and was re-commissioned for a third outing in November 2005. Asa result of this success Talent TV continues to improve its access to Japanesebroadcasters and we will be pitching a number of new entertainment formats toJapan in the coming months.Best of Friends (CBBC) Following the very successful first two series of Bestof Friends, we were delighted to be asked by the BBC to produce a `special'series of five episodes filmed in South Africa as part of the BBC's "AfricaWeek" last summer. When broadcast, three of our five episodes were listed inthat week's Top Ten Most Watched Children's programmes, with one episode comingsecond in terms of audience ratings. Following this success, I am pleased tosay that the BBC has confirmed its commitment to Best of Friends bycommissioning a full third series. This time the order is for twenty episodes,our largest order to date.What Did ITV Do For Me? (ITV 1) For most television viewers, it was difficultto miss the fact that in September this year, ITV celebrated its 50th birthday.Talent TV was proud to be commissioned to produce one of the official`specials' for this anniversary - What Did ITV Do For Me? Originallycommissioned as a 90-minute programme, the quality of material provided by ourfeatured celebrities (who included Sir David Jason, Simon Cowell and Sir RogerMoore), meant that ITV created a two hour slot for the show. It performed wellin terms of audience ratings and was feted within the TV community for its highproduction values.Made in LA (SKY One) This was another production that was recognised for itshigh production values. This 3-part series, presented by Nicki Chapman, was aninteresting look at life in Los Angeles and has already been picked up fortransmission by a number of overseas broadcasters.How Euro Are You? (BBC TWO) Our first commission from BBC TWO, this live,90-minute interactive programme looked at British attitudes to Europe.Presented by the BBC's former Political Correspondent Andrew Marr and comedianDara O'Briain, it was also our first commission from BBC News and CurrentAffairs. Intended to bring a serious factual topic to the audience in a moreentertaining and accessible way, it was seen as an interesting venture and atthe time of writing we are in negotiations with BBC TWO about tackling otherserious subjects in a similar way.Casino Casino (Challenge?) Once again a co-production with Gag Productions, thesecond series of nineteen programmes was presented this time by Martin Kemp.Based on the success of the first series, the length of each programme in thissubsequent series was increased from a 30-minute to a 60-minute slot lengthand, again, we delivered top quality production values to create a glossyseries which blended game show and reality with a dash of humour.You Be the Judge (BBC ONE) This format, created by Hong Kong based formatcreator Robert Chua, offered the public the opportunity to settle outstandingdisputes live on television. Both parties in dispute were given practisingbarristers to put forward their respective cases, on the understanding thateach party would abide by the judgment resulting from a public vote. It hasbeen acknowledged as a highly creative concept that explored the current trendsin interactivity.A Fashion Tribute - Matthew Williamson This was our fourth fashion documentarybased on the prestigious Moƒ«t & Chandon Fashion Tribute which this year went toMatthew Williamson. Fully funded by the champagne house, we are currentlynegotiating with broadcasters for a slot for the programme.In DevelopmentDevelopment needs to be constantly re-invented to remain fresh. Earlier thisyear we reviewed and restructured our approach and departmental structure. As aresult, we now have a larger number of entertainment formats at run-throughstage pending pilots with BBC Daytime and Channel Four than we had at this timelast year. Your company has a healthy slate of good quality projects across theother genres such as factual entertainment. In addition, My Teen Genie, ourteenage comedy drama is back in script development, this time as a Europeanco-production with French production house Moonscoop and state broadcasterFrance 2. More information will be released to you over the coming year.Looking ahead to 2006, we can anticipate several projects already in or aboutto go into production. These include The Hunt for the Man with 80 Wives(documentary - Channel Four) which follows the trail of Warren Jeffs, who hasfathered more than 250 children; and Must See TV (entertainment series - ITV 1)which is a "celebrity-fan" led series looking at some of ITV's landmark shows.We are confident that other fresh commissions will follow these new titles.Progress In The New EraIn a year when the cost of last year's investment in people started to be seen,your directors are pleased to report a continued improvement in profits andcash flow. We are also pleased that progress has been made not only in thenumber and variety of commissions but also in the generation of meaningfulrevenue from the exploitation of secondary rights. You will all have seen the Test the Nation DVD in high streets around Britain over Christmas but are lesslikely to have seen episodes of Made in LA on-air in Sweden or any of the fortythree hours of our older series The Villa, recently sold to Fox Reality Channelin the USA. All, however, add to the revenues of your Company. The retention ofIntellectual Property and programme rights, and the subsequent exploitation ofthose rights, will enable the independent television production sector in theUK to grow in size and profitability in a way that was impossible prior to the2003 Communications Act. A new era has arrived for UK "indie" producers.In the past twelve months, Talent Television has secured more commissionsacross a greater number of genres and from a greater number of broadcastersthan ever before. This positive start, along with the major opportunities nowavailable, means your directors are confident about building on this momentum.By adding new productions and programming brands to our existing titles,without substantially increasing our cost base, we are cautiously optimisticabout improving the profits of your Company.Tony HumphreysManaging Director13th December 2005Group Profit and loss accountFor the year ended 30 September, 2005 Year Year ended 30 ended 30 September September 2004 2005 ‚£'000 ‚£'000 Turnover 5,619 5,424 Cost of sales (3,964) (4,210) Gross profit 1,655 1,214 Operating costs (1,508) (1,213) Goodwill amortisation (119) (119) Administrative expenses (1,627) (1,332) Operating profit/(loss) 28 (118) Net interest 18 14 Profit/(loss) on ordinary 46 (104)activities before taxation Tax on profit/(loss) on ordinary activities - Current tax (16) (3) - Deferred tax (11) (20) Profit/(loss) for the year 19 (127) Basic profit/(loss) per share 0.12p (0.79)p(pence) Diluted profit/(loss) per share 0.12p (0.77)p(pence) The profit and loss account has been prepared on the basis that all operationsare continuing operations.There were no recognised gains or losses other than the loss for the financialperiod.The accompanying accounting policies and notes form an integral part of thesefinancial statements.Group balance sheetAs at 30 September, 2005 30 September 2005 30 September 2004 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Fixed assets Intangible assets 922 987 Tangible assets 43 42 Investments - 965 1,029 Current assets Stocks 41 54 Debtors 736 656 Cash at bank and in hand - General 594 364 - Controlled 588 794 Productions 1,959 1,868 Creditors: amounts (1,553) (1,534) falling due within one year Net current assets/ 406 334(liabilities) Total assets less 1,371 1,363current liabilities Creditors: amounts - (11)falling due after more than one year Net assets 1,371 1,352 Capital and reserves Called up share 6,310 6,310capital Share premium account 11,634 11,634 Profit and loss (16,573) (16,592)account Shareholders' funds 1,371 1,352 Group cash flow statementFor the year ended 30 September, 2005 Year ended 30 Year ended 30 September 2005 September 2004 ‚£'000 ‚£'000 Net cash inflow from operating 83 510activities Returns on investments and servicing of finance Interest paid - (2) Interest received 18 16 18 14 Taxation - (1) Capital expenditure and financial investment Purchase of tangible fixed assets (18) (17) Sale of tangible fixed assets (59) - (77) (17) Increase in cash 24 506 Notes to the preliminary Results1. PUBLICATION OF NON-STATUTORY ACCOUNTSThe financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in Section 240 of the Companies Act1985.The group balance sheet at 30 September, 2005 and the group profit and lossaccount, group cash flow statement and associated noted for the year then endedhave been extracted from the Group's financial statements. Those financialstatements, on which the auditors have reported an unqualified opinion, havenot yet been delivered to the Registrar of Companies.2. DIVIDENDSThe Directors are not proposing the payment of a dividend in respect of theyear ended 30 September, 2005.3. LOSS PER ORDINARY SHAREThe profit/(loss) per share is based on a profit of ‚£19,000 (2004: a loss of ‚£127,000), being the profit attributable to ordinary shareholders, and aweighted average of 16,210,284 (2004: 16,210,284 ordinary shares). The dilutedloss per share is based on a weighted average of 16,978,914 shares (2004:16,587,750).4. COPIES OF REPORT AND ACCOUNTSCopies of the Report and Accounts will be sent to shareholders shortly and willbe available to members of the public from the Company's registered office,Lion House, 72-75 Red Lion Street, London, WC1R 4GB.EnquiriesTalent Group PlcTony Humphreys Tel: 020 7421 7800John East & Partners LimitedJohn East/Simon Clements Tel: 020 7628 2200Millbrook PartnershipTimothy Grey Tel: 020 7520 9455 ENDTALENT GROUP PLCRelated Shares:
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