30th Mar 2005 07:00
Civilian Content PLC30 March 2005 CIVILIAN CONTENT PLC PRELIMINARY RESULTS FOR THE TWELVE MONTHS ENDED 31 DECEMBER 2004 30 MARCH 2005 Civilian Content plc ("Civilian") whose principal activities are the managementof development, financing and production of feature films and the internationalsale of film rights, announces today its preliminary results for the twelvemonths ended 31 December 2004. Highlights: • Financials o 2004 Group retained profit of £0.77 million (2003: loss of £1.18 million) o 2004 EBITDA grew to £0.95 million (2003: loss of £0.40 million) o Cash reserves of £2.33 million (2003: £0.37 million) o Gross margin increased to 65% (2003: 48.0%) • Film Finance & Production - The Film Consortium (TFC) o TFC has enjoyed its most profitable and productive year to date o Over £50m of production activity during the year o My Summer of Love success with 2004 BAFTA for Best British Film o Final Lottery Franchise funds invested in two films in first half o SureFire Joint Venture achieved successful fund raising, advising on £25 million of feature film production finance o Six films currently in post production to be sold in 2005 by group subsidiary, The Works • Film Sales - The Works o In 2005 The Works will have available for sale the largest volume of feature film rights it has ever assembled o In my Country and My Summer of Love sold to Sony and Universal divisions respectively for release in 2005 o Sales rights secured for Tickets (which premiered at Berlin) and Tristram Shandy (pre-sold to Newmarket, a leading US distributor) o Significant levels of catalogue income expected to continue o 2005 trading results expected to be significantly second half weighted Crispin Barker, non-executive Chairman of Civilian Content said: "Civilian Content plc has enjoyed the most successful year in its history, andhas assembled a significant slate of film rights for sale in 2005. The process of restructuring the business, which began in 2002, is nowsubstantially complete. Having rationalised its core activities, Civilian is now actively seeking theacquisition of complimentary businesses". For further information, please contact: Civilian Content 020 7612 0030Chris Auty / Norman Humphrey Citigate Dewe Rogerson 020 7638 9571Seb Hoyle CHAIRMAN'S STATEMENT OVERVIEW Civilian Content plc ("Civilian") has enjoyed the most successful year in itshistory, whether measured by retained profit, production income, film volume, orbudget size. Civilian made a retained profit for the year ending 31 December 2004 of£771,000, which is a substantial improvement on the result for 2003 when theGroup recorded a loss of £1,183,000. The full year EBITDA on continuingoperations in 2004 was a profit of £948,000, compared with a loss of £405,000 in2003. Turnover increased for continuing operations, to £3,872,000 from£2,330,000, and the gross margin, which has been steadily improving since theacquisition of The Works, rose to 65% from 49%. At the beginning of the year an Italian film company, Fandango SRL, acquired amajor shareholding in the Group from a former Civilian director, and in so doingtriggered the repayment of loan notes with a value of £759,000. Thistransaction, combined with strong net cashflow arising from operatingactivities, has significantly improved the Group's liquidity. At 31 December2004, Civilian had cash reserves of £2,330,000. The production services subsidiary, The Film Consortium, has enjoyed its mostprofitable and productive year. It invested the balance of its LotteryFranchise funds into two films during the first six months and then, after asuccessful fund-raising by our joint venture partner, SureFire, it advised onthe investment of over £25 million of feature film production. These films arein the later stages of post production and will be sold by our subsidiary, TheWorks, in 2005. The Film Consortium also supervised the investment of £1million of SureFire development funds during 2004, and this process willcontinue. In 2005, The Works will have available for sale the largest volume of featurefilm rights it has ever assembled. The production cost of these rights exceeds£50 million, and the Board is hopeful this volume of quality product will yielda positive result for the Group in 2005. The timing of delivery of thisproduct to The Works, and the incidence of this year's major film festivals,will lead to a trading result significantly weighted towards the second half ofthe year. The ongoing quality and expanding quantity of Civilian's library of film rightshas lead to significant levels of catalogue income being received during 2004.This is a trend we expect to continue. Civilian's management is working hard to generate new managed funds for futureinvestment in feature films. In this regard, we consider pronouncements madeby the Chancellor in his recent budget about continuing tax incentives forBritish Films a positive development. The process of restructuring the business which began in 2002 is nowsubstantially complete. Having rationalised its core activities, Civilian isnow actively seeking the acquisition of complimentary businesses. Your Board has decided to propose a change of company name to CIVILIAN Plc andwill seek shareholder approval for this change at the next AGM. FINANCIAL REVIEW During the 12 months ended 31 December 2004, Civilian made a retained profitafter exceptional items and taxation of £771,000. This compares favourablywith a retained loss of £1,183,000 for the 12 months ended 31 December 2003.Administration, selling and distribution expenses fell by £65,000 to £1,802,000during the year, which represents a 3% fall from £1,867,000 in 2003. Thehead-count also fell, averaging 18 during 2004 compared with 23 during 2003. As at 31 December 2004, the group had £2,524,000 cash at bank, although £194,000was held on trust for third parties leaving available net cash of £2,330,000.This compares with available net cash at 31 December 2003 of £375,000. DIVIDEND The Directors do not recommend the payment of a dividend in respect of 2004(2003:£nil) BOARD CHANGES There were a number of Board changes during 2004: - Domenico Procacci joined the Board as a non Executive Director on 5th February2004 and James Atherton joined the Board as a non Executive Director on 10th May2004. Michael Henry joined the Board as a non Executive Director on 10th May 2004, butresigned on 26 October to concentrate on his growing legal practice. AlinePerry resigned from the Board on 24th May 2004. Our Staff have worked tirelessly in 2004 and the Board of Civilian thank themall sincerely for their efforts and help in making 2004 such a successful year. ANNUAL GENERAL MEETING The Annual General Meeting will be held at 10 a.m. on Friday 6th May 2005 at theoffices of KBC Peel Hunt Limited, 111 Old Broad Street, London EC2 1PH Crispin Barker 30 March 2005 MANAGING DIRECTOR'S REPORT OVERVIEW 2004 saw a significant upswing in the company's activities, and a successfultransition after the expiry of the Film Consortium's Lottery contract. Thecreation of the Surefire joint venture was followed by a successful fundraisingin the summer, which significantly enhanced the Film Consortium's productionoutput and the capture of international rights for sale by The Works. Theimprovement is reflected in a material increase in turnover at a time of fallingcosts and head-count. The group's cash position has shown a significant andcorresponding improvement. The successful introduction of Fandango SRL as a major trade shareholder, andthe conclusion and deployment of the Surefire fundraising have both greatlyimproved the company's reach and position within the international filmbusiness. Strategically, the management is happy to present a significantly positiveoutcome for 2004, despite continuing turbulent market conditions. PRODUCTION ACTIVITY 2004 represents the single most successful year of the company's activity byfilm volume and budget output. Over £50 million of production activity was inprocess during the period, which further establishes Civilian's leading positionas a UK-based but internationally focused, production house. Half a dozen new films went into production during the period, including: TaraRoad starring Olivia Williams and Andi MacDowell; Guy X starring Jason Biggs andNatasha McElhone; Best Man starring Stuart Townsend, Seth Green and Amy Smart;The Proposition starring Guy Pearce, Emily Watson and Ray Winstone; River Queen,starring Samantha Morton and Kiefer Sutherland. These titles are currently beingcompleted and have now entered their sales cycle. Additionally in the sameperiod, the company completed John Boorman's In My Country starring JulietteBinoche and Samuel L Jackson, and My Summer Of Love, which went on to win theBAFTA for Best British Film of 2004. At the same time, the company is managingthe development of some 20 feature film scripts, several of which should proceedinto production in 2005. SALES ACTIVITY Civilian's wholly owned sales agency The Works enjoyed an excellent year. BothIn My Country and My Summer Of Love were successfully sold to divisions of USfilm studios (Sony, and Universal respectively), for release by them in 2005.As in previous periods, The Works has successfully secured representation for anumber of high profile, third party films, including Ae Fond Kiss, whichpremiered at the Berlin Film Festival, Changing Destiny (Venice Film Festival),The Consequences Of Love (Cannes Film Festival) and Primo Amore (Berlin FilmFestival). Towards the end of the period, The Works also secured sales rightsto Tickets (which premiered at the Berlin Film Festival), and Tristram Shandy(which has been pre-sold to Newmarket, a leading US distributor with whom weenjoyed previous success on the US release of Whale Rider). The evergreen titleBugs!, a large screen format film aimed at the children's market, continues toenjoy a successful and extended worldwide release having achieved a cinema grossto date of over $22 million. CURRENT OUTLOOK AND FUTURE PROSPECTS The company is currently focusing its attention in two areas: The furtherdevelopment of new project financing structures (in regard to which theChancellor's recent budget statement has been broadly positive), and corporateopportunities in the wider media environment, including UK distribution. Thecompany's healthy cash position, enhanced reputation within the trade, andstrong creative relationships with third party film financiers and producersgive the management grounds for being cautiously optimistic in the coming year. Chris Auty 30 March 2005 Consolidated Profit and Loss Account For the year ended 31 December 2004 Note 2004 2003 £ 000's £ 000'sTurnover 1Continuing operations 3,872 2,330Discontinued operations - 114 3,872 2,444Cost of salesContinuing operations (1,342) (1,189)Discontinued operations - (82) (1,342) (1,271)Gross profitContinuing operations 2,530 1,141Discontinued operations - 32 2,530 1,173 Administrative expenses (1,733) (1,791)Selling and distribution expenses (69) (76) Operating resultsContinuing operations 728 (611)Discontinued operations - (83)Total operating result 728 (694) Exceptional items - discontinued operations 2 - (562) Net interest 43 73Profit/(Loss) on ordinary activities before taxation 771 (1,183) Tax on profit on ordinary activities - -Profit/(Loss) on ordinary activities after taxation 771 (1,183) Equity minority interests - -Profit/(Loss) for the financial year 771 (1,183) Dividends - - Retained Profit/(Loss) for the year 771 (1,183) Earnings per share 3Basic (pence) 1.86 (2.89)Diluted (pence) 1.79 (2.89) Consolidated Balance Sheet As at 31 December 2004 2004 2003 Note £ 000's £ 000'sFixed assetsIntangible assets 2,439 2,520Tangible assets 33 40 2,472 2,560Current assetsStocks 1 31 18Debtors 1,334 1,376Debtors: amounts falling due after one year 5 17Cash at bank and in hand 5 2,524 608 3,894 2,019Creditors: amounts falling due within one year (1,881) (809) Net current assets 2,013 1,210Total assets less current liabilities 4,485 3,770 Creditors: amounts falling due after more than one year (276) (432) Provisions for liabilities and charges - - Shareholders' funds 4,209 3,338 Capital and reservesShare capital 4,188 4,088Share premium account 6,458 6,458Profit and loss account (6,275) (7,046)Equity shareholders' funds 4,371 3,500Minority interest (162) (162) Shareholders' funds 4,209 3,338 Consolidated Cash Flow Statement For the year ended 31 December 2004 Note 2004 2003 £'000's £'000's Net cash inflow/(outflow) from operating activities 3 1,905 (305) Returns on investments and servicing of finance 42 73 Taxation - - Operating cash flow after taxation and finance costs 1,947 (232) Capital expenditurePurchase of tangible fixed assets (31) (6) Acquisitions and disposalsNet cash disposed with subsidiary undertakings - (78) Equity dividends paid - - Financing - -Increase/(decrease) in cash in the year 4 1,916 (316) Reconciliation of Movements in Shareholders Funds For the year ended 31 December 2004 Number of Share Share Minority Profit and Total shares capital premium interest loss account £ 000's £ 000's £ 000's £ 000's £ 000'sGroupAt 1 January 2004 40,882,541 4,088 6,458 (162) (7,046) 3,338Share capital issued - SureFire production fund 1,000,000 100 - - - 100Retained profit for the year - - - - 771 771Minority interest in profit for the - - - - - -yearAt 31 December 2004 41,882,541 4,188 6,458 (162) 6,275 4,209 NOTES 1. Basis of preparation Accounting convention These financial statements have been prepared in accordance with the historicalcost convention, using accounting policies that have been consistently appliedduring the year. The Group's policies on income recognition and stock are set out below: Turnover Turnover comprises sales commissions and rights exploitation income which isreported in the accounting period to which it relates. Production, developmentand management fee income is recognised when contractually due in so far as itequates to performance. Development Development costs are written off in the period of expenditure except whenrecoverability can be assessed with reasonable certainty and there is a clearlydefined project. Amounts carried forward are shown in stock and work inprogress. Stock and work in progress Stock and work in progress, which is stated at the lower of cost and netrealisable value, represents acquired rights and costs incurred in respect ofincomplete productions. These costs are carried forward only where, in theopinion of the directors, there is a clearly defined project and the recovery ofthese costs can reasonably be expected. Net realisable value is based onestimated selling prices less any selling costs expected to be incurred. 2. Exceptional Items There were no exceptional items during 2004. The exceptional loss during 2003 arose on disposal of the subsidiary, IsisProductions Limited as follows: - 2003 Loss on disposal of Isis Productions Limited £ 000's Goodwill written off on disposal of Isis Productions Limited (577)Net liabilities of Isis Productions Limited on disposal 15Exceptional loss arising on the disposal of Isis Productions Limited (562) Earnings per share The calculation of the basic earnings per share is based on the earningsattributable to ordinary shareholders dividend by the weighted average number ofshares in issue during the year. The calculation of diluted earnings per share is based on the basic earnings pershare, adjusted to allow for the issue of shares and the post tax effect ofdividends and interest on the assumed conversion of all dilutive options andother dilutive potential ordinary shares. Reconciliation of the earnings and weighted average number of shares used in thecalculations is set out below: 2004 2003 Earnings Weighted Earnings per Earnings Weighted Earnings per average share average share number of number of shares shares £'000's Thousands Pence £'000's Thousands Pence Basic earnings per share - Earningsattributable toordinaryshareholders 771 41,344 1.86 (1,183) 40,883 (2.89) Dilutive effect ofoptions - 1,717 (0.07) - - - Diluted Earnings Per Share 771 43,061 1.79 (1,183) 40,883 (2.89) 3. Reconciliation of operating profit to operating cash flows 2004 2003 £ 000's £ 000's Operating Profit/(Loss) 728 (694)Depreciation 39 50Amortisation of goodwill 181 181Increase in stocks (13) (104)Decrease in debtors 54 1,694Increase/(Decrease) in creditors 916 (1,432)Operating Cash Flow 1,905 (305) 4. Reconciliation of net cash flow to movement in net funds 2004 2003 £ 000's £ 000'sIncrease/(Decrease) in cash in the year and change in net funds resulting 1,916 (316)from cash flows:Net funds at 1 January 2004 608 924Net funds at 31 December 2004 2,524 608Less: Production and development funds held on trust for third parties (194) (233)Available cash at bank and in hand 2,330 375 5. Publication of non-statutory accounts The financial information set out in this preliminary announcement does notconstitute statutory accounts as defined in section 240 of the Companies Act1985. The summarised balance sheet at 31 December 2004 and the summarised profit andloss account, summarised cash flow statement and associated notes for the yearthen ended have been extracted from the group's draft financial statements.Those financial statements have not yet been delivered to the Registrar, norhave the auditors reported on them. The financial information for the year ended 31 December 2003 is an extract ofthe statutory accounts to that date as delivered to the Registrar of Companies.Those accounts included an audit report which was unqualified and that didnot contain a statement under Section 237 (2) or (3) of the Companies Act 1985. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Winking Studios