Half Yearly Report

12th Aug 2009 07:00



Motive Television PLC

("Motive" or "the Group")

Half-Yearly Report

For the 6 months ended 30 June 2009

The Board of Motive, the AIM quoted media Investment Company specialising in television technology, rights and production, is pleased to announce its interim results for the period ended 30 June 2009.

Commenting on the results, Motive Chairman, Mick Pilsworth, said:

"Motive's move downstream into digital television broadcasting technology is progressing well. We are pleased with our progress in this space and expect to announce a number of acquisitions over the coming months."

Contact:

 

Motive Television plc T: 020 3086 9430

Mick Pilsworth 

Dowgate Capital Advisers Limited T: 020 7492 4777

Liam Murray or Jo Turner

 

CHAIRMAN'S STATEMENT

OVERVIEW

During the period Motive moved downstream from television production into digital terrestrial television ("DTT") technology. We recruited Leonard M. Fertig as CEO to lead this new initiative. Len brings a wealth of contact and experience to the group, as he was involved in many subscription and video on demand ("VOD") channel launches in the USA (including A&E, Comedy Central, Request Television and DirecTV). Len was also the founding CEO of of Central European Media Enterprises Ltd, ("CME"). Len took CME from a start-up to a billion-dollar NASDAQ-listed broadcasting company with operations in eight countries covering 110 million viewers. We are very pleased that Len has agreed to join the Group.

Our first transaction in the DTT sector was the agreement of worldwide distribution rights, outside of Spain and Italy, for a DTT solution called BesTV®. BesTV®, powered by Adecq Digital S.L., is patented middleware that allows DTT broadcasters to offer VOD, pay-per-view ("PPV"), catch-up TV and live pause using their DTT bandwidth. Already in use in Spain and Italy, BesTV® is now well-placed to be rolled out globally by Motive, leveraging the extensive global contacts of the new management team. We are already in discussions with a number of broadcasters in Europe and the USA.

We have also identified a number of small, entrepreneurial DTT technology companies that would benefit from being part of a larger group, and we expect to make a number of acquisitions in the coming months in this space.

Trading for our television production companies during the period under review continued to be difficult, with commercial broadcasters still experiencing falling revenues and our only production orders in the UK coming from the BBC. 

Brown Eyed Boy ("BEB") completed production of the second series of "How Not To Live Your Life", starring Dan Clark, for BBC3. The first series is currently being transmitted on BBC2 and has received good reviews.

Scarlet Television ("Scarlet") was in production on "Forty Years of Delia" for the BBC, a six-part series looking back over forty years of Delia Smith's cookery programmes, presented by Delia Smith herself. Scarlet Television has received two further BBC commissions, which will be announced shortly.

In Dublin, Motive Television commenced the production of 10 live GAA football and hurling matches for TV3, in association with Asgard Media.

Neither Luminous Productions nor Rumble Television received any orders during the period, and we have cut ongoing expenditure at both of these companies. We have also cut overhead costs further across the group.

CURRENT TRADING

Our expansion in the provision of DTT technology continues, and we expect this interest to accelerate as broadcasters approach the 2012 analogue switch-off deadline in the EU. We are getting very good traction with broadcasters globally for our BesTV® offering (from Adecq Digital) and expect to report good progress by the year-end.

BEB continues to trade well and is currently mid-way through production on a 6 x 30 minute stand-up sketch series for international sales called "Laughter Shock", starring 60 brand new unsigned comedy acts; and is in pre-production on "Down And Out", an 8 x 30 min comedy documentary series for BBC 3 and TV3 New Zealand starring Jocelyn Jee Esien and in the vein of 'Borat' and 'Brüno'.

Our international sales arm, Motive Television International (powered by DRG), will be launching this series, and other new Motive group shows, at the TV market MIPCOM in October 2009.

BEB is also producing a second episode script of "Team Awesome", a youth sitcom for Channel 4, starring and written by Jack Whitehall. BEB is also in discussions to produce a third series of "How Not To Live Your Life" in the UK for the BBC and a changed format pilot of it for CBS in the US.

In Dublin, Motive Television (in association with Asgard Media) has been contracted to produce 38 live European Football matches per year over 3 years by Irish commercial broadcaster TV3. The coverage of UEFA's Champions League and Europa Cup matches commences in mid-August 2009.

We do not expect commercial broadcasters to experience any revenue increases until 2011 and so we are focussing all of our development efforts on the BBC. As a result we expect to maintain our production activity at current levels.

Motive's move downstream into digital television broadcasting technology is progressing well. We are pleased with our progress in this space and expect to announce a number of acquisitions over the coming months.

M J PilsworthChairman

 MOTIVE TELEVISION PLC

CONSOLIDATED INCOME STATEMENT 

for the six months ended 30 June 2009

	6 months ended		6 months ended		Year ended
	30 June		30 June		31 December
	2009		2008		2008
	unaudited		unaudited		audited
	£		£		£
Revenue	1,859,134		2,714,680		4,074,480
Cost of sales	(1,540,447)		(2,223,763)		(3,297,343)
Gross profit	318,687		490,917		777,137
Administrative expenses	(749,796)		(1,011,481)		(2,035,706)
Goodwill impairment	-		-		(258,394)
Operating loss	(431,109)		(520,564)		(1,516,963)
Financial income	665		14,657		29,188
Financial costs	-		(1,281)		(3,123)
Finance costs - net	665		13,376		26,065
Loss before tax	(430,444)		(507,188)		(1,490,898)
Tax expense	(9,600)		(7,954)		(131,609)
Loss for the period attributable to the equity holders of the Company	(440,044)		(515,142)		(1,622,507)
Loss per share - basic and diluted
equity holders	(0.13)p		(0.23)p		(0.60)p

MOTIVE TELEVISION PLC

CONSOLIDATED BALANCE SHEET 

as at 30 June 2009

		30 June		30 June		31 December
		2009		2008		2008
		unaudited		unaudited		audited
		£		£		£
Non-current assets
Goodwill		401,789		660,183		401,789
Tangible fixed assets		43,852		58,652		41,336
Deferred tax asset		23,052		156,307		32,652
Total non-current assets		468,693		875,142		475,777
Current assets
Inventories		14,286		-		16,215
Trade receivables		687,179		892,504		379,644
Cash at bank		359,053		1,115,858		784,747
Total current assets		1,060,518		2,008,362		1,180,606
Total assets		1,529,211		2,883,504		1,656,383
Equity
Issued share capital		1,319,958		1,267,958		1,319,958
Share premium		2,110,217		1,919,717		2,110,217
Merger reserve		155,467		155,467		155,467
Retained earnings		(3,092,909)		(1,597,338)		(2,672,365)
Total Equity		492,733		1,745,804		913,277
Current liabilities
Trade and other payables		1,036,478		1,137,700		689,399
Bank overdraft		-		-		53,707
		1,036,478		1,137,700		743,106
Total equity and liabilities		1,529,211		2,883,504		1,656,383

MOTIVE TELEVISION PLC

CONSOLIDATED CASH FLOW STATEMENT 

for the six months ended 30 June 2009

	6 months to		6 months to		Year to
	30 June		30 June		31 December
	2009		2008		2008
	Unaudited		unaudited		audited
	£		£		£
Cash flows from operating activities
Cash generated absorbed by operations	(363,424)		(561,340)		(1,180,382)
Net interest received	665		13,376		26,065
Net cash absorbed by operating activities	(362,759)		(547,964)		(1,154,317)
Cash flows from investing activities
Payments to acquire tangible fixed assets	(9,228)		(13,121)		(44,602)
Proceeds from disposal of tangible fixed assets	-		-		10,516
Net cash used in investing activities	(9,228)		(13,121)		(34,086)
Cash flows from financing activities
Proceeds from issue of shares	-		636,282		878,782
Net cash from financing activities	-		636,282		878,782
Net (decrease) / increase in cash and bank balances	(371,987)		75,197		(309,621)
Cash at bank and bank overdrafts at beginning
of period	731,040		1,040,661		1,040,661
Cash at bank and bank overdrafts at end of
period	359,053		1,115,858		731,040

MOTIVE TELEVISION PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 

for the period ended 30 June 2009

Consolidated statement of changes in equity as at 30th June 2009
	Share	Share	Merger	Retained	Total
	capital	premium	reserve	earnings	equity
	unaudited	unaudited	unaudited	unaudited	unaudited
	£	£	£	£	£
Balance at 1 January 2008	1,172,480	1,378,913	155,467	(1,113,858)	1,593,002
Loss for six months ended 30 June	-	-	-	(515,142)	(515,142)
Cost of share based awards	-	-	-	31,662	31,662
Issue of shares for cash	95,478	540,804	-	-	636,282
At 30 June 2008	1,267,958	1,919,717	155,467	(1,597,338)	1,745,804
Loss for six months ended 31 December	-	-	-	(1,107,365)	(1,107,365)
Cost of share based awards	-	-	-	32,338	32,338
Issue of shares for cash	52,000	190,500	-	-	242,500
At 31 December 2008	1,319,958	2,110,217	155,467	(2,672,365)	913,277
Loss for six months ended 30 June	-	-	-	(440,044)	(440,044)
Cost of share based awards	-	-	-	19,500	19,500
At 30 June 2009	1,319,958	2,110,217	155,467	(3,092,909)	492,733

MOTIVE TELEVISION PLC

1  GENERAL INFORMATION 

Motive Television Plc (the "Company") is a company domiciled in England whose registered office address is Windsor House, Barnett Way, Barnwood, Gloucester, GL4 3RT. The condensed consolidated interim financial statements of the Company for the six months ended 30 June 2009 comprise the Company and its subsidiaries (together referred to as "the Group").

The condensed consolidated interim financial statements do not constitute statutory accounts as defined in Section 434 of the Companies Act 2006.

The financial information for the year ended 31 December 2008 has been extracted from the statutory accounts. The auditors' report on the statutory accounts was unqualified and did not contain a statement under Section 237 of the Companies Act 1985. The auditors' report included an emphasis of matter, however, regarding uncertainties referred to in the financial statements about whether certain subsidiary companies would be able to continue trading as going concerns. A copy of those financial statements has been filed with the Registrar of Companies. 

The condensed consolidated interim financial statements were authorised for issue on 11 August 2009.

2  SIGNIFICANT ACCOUNTING POLICIES 

Basis of accounting 

The condensed consolidated interim financial statements are unaudited and have been prepared on the historical cost basis in accordance with International Financial Reporting Standards as adopted by the EU ("IFRS") using the same accounting policies and methods of computation as were used in the annual financial statements for the year ended 31 December 2008. As permitted, the interim report has been prepared in accordance with the AIM rules for Companies and is not compliant in all respects with IAS 34 Interim Financial Statements. The condensed consolidated interim financial statements do not include all the information required for full annual financial statements and hence cannot be construed as in full compliance with IFRS.

 

Liquidity risk and going concern

As was the case when the Company published its annual report, the ability of the operating subsidiary companies to continue trading will each depend on whether they are successful in obtaining commissions on numerous proposed programmes that are currently with commissioning editors of a number of broadcasting companies. If the subsidiary companies are not successful in winning sufficient new commissions within various periods within the next twelve months, each company is likely to require the injection of further funds to finance operating overheads. The current market for new television programmes is difficult and broadcasters are both commissioning fewer new programmes and taking longer to make decisions before putting programmes into production.

The directors have carefully considered the Group working capital position and concluded that unless new commissions are won in the short term there is a significant risk that it will have insufficient resources to finance the continuation of the activities of some or all of the subsidiary companies. The situation continues to be carefully monitored and a strategy has been put in place for each operating subsidiary such that operating activities will be terminated if sufficient new commissions are not won in order to meet ongoing operating overheads. The directors have already taken the decision not to provide further support for the operations of Rumble and Luminous.

If it were necessary to cease to support of any of the remaining three subsidiary companies still in operation, provisions may be required for costs arising on closure and against the carrying value of goodwill.

3 LOSS PER SHARE

The loss per share is based on a loss for the period of £440,044 (six months ended 30 June 2008: £515,142; year ended 31 December 2008: £1,622,507) and the weighted average of ordinary shares in issue for the period of 342,499,463 (six months ended 30 June 2008: 222,192,386; year ended 31 December 2008: 272,498,662).

4 NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT

	6 months to		6 months to		Year to
	30 June		30 June		31 December
	2009		2008		2008
	unaudited		unaudited		unaudited
	£		£		£
Operating loss	(431,109)		(520,564)		(1,516,963)
Depreciation	6,712		11,639		49,920
Goodwill impairment	-		-		258,394
(Increase) decrease in inventories	1,929		-		(16,215)
(Increase) decrease in receivables	(307,535)		(437,649)		75,211
Increase (decrease) in payables	347,079		353,572		(94,729)
Share based payments	19,500		31,662		64,000
	(363,424)		(561,340)		(1,180,382)

ENDIR DFLFFKVBXBBE

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Motive Television Plc