5th Jan 2009 12:52
Saregama plc - Interim Results
SAREGAMA PLC
CHAIRMAN'S STATEMENT FOR THE PERIOD APRIL-SEPTEMBER 2008
REVIEW OF THE SIX MONTHS
We remain confident that the music industry and the entertainment industry have excellent long term growth prospects. The process of market consolidation, which we started in 2007, has been further strengthened this year. We have shown signs of growth in music publishing and licensing as we have also moved into live events .
Our foray in music publishing in the USA has provided good returns and has contributed significantly to the results and will continue to do so in the future.
We had our first series of concerts starting on the 15th July 08. The company expects to strengthen its live events scenario in the coming years.
We maintained operational efficiency with proper control over expenditures and at the same time, increased the revenues in various streams.
OPERATIONAL EFFICIENCIES
The decrease in the operating profitability is due to the various initiatives the company has taken in this financial year.
Microanalysis of performance
i) Average realization of music cassettes and compact discs has increased from the previous period due to price reduction and better product mix.
ii) Exploring the market with consumer defined goods in the USA has paid good dividends with distributor tie-ups for creating products for niche consumers and corporate orders from Max-New York Life Insurance and Travel India, both of which increased the turnover.
iii) Liquidation of slow moving stock of compact discs in the US markets generating additional revenues.
PRODUCTS
Various products were created especially for the International markets, which gave good returns. Some of these, which have out-performed in the market, are:
i) Tailor made products were released into the main stream market and helped take the label for the first time to the high street of London.
OUTLOOK FOR THE 2ND HALF 2008-09
The Company expects that in the second half of the fiscal year, the existing sales trend will continue generating good profits. Revenues from publishing and licensing are expected to grow along with continued growth in the registration of downloads. The growth will specifically come from concerted efforts by our sub publishers in the US, UK and Europe. The company will continue to put innovative products across the genres to all segments of the market. The exploitation of music catalogues will be achieved by keeping tastes and trends in mind.
In summary, the company expects to grow further in terms of product availability, revenue generation, and operation control measures.
UNAUDITED PROFIT & LOSS ACCOUNT
For the six months ended: 30/09/08 30/09/07 (GBP'000) (GBP'000)TURNOVER 450 586Cost Of Sales (316) (300)GROSS PROFIT 174 286Administrative Expenses (179) (240)OPERATING PROFIT (5) 46Interest Payable - -PROFIT ON ORDINARY ACTIVITIES BEFORE TAX (5) 46Taxation - - Note 2PROFIT ON ORDINARY ACTIVITIES AFTER TAX (5) 46Basic earnings per share - 0.46 pNote 3Diluted earnings per share - 0.46 pNote 3All of the company's activities are classed as continuing. The company has norecognised gains or losses other than those shown in the profit and lossaccount.UNAUDITED BALANCE SHEETAs at 30th September 2008 30/09/08 30/09/07 (GBP'000) (GBP'000)FIXED ASSETSIntangible Note 1 1,050 1,150Tangible 1 1CURRENT ASSETSStocks 152 128Debtors 467 408Cash at Bank and in Hand 5 58 625 594Creditors (139) (188)Amounts falling due within a yearNET CURRENT ASSETS 485 406TOTAL ASSETS LESS CURRENT LIABILITIES 1,536 1,557NET ASSETS 1,536 1,557REPRESENTED BYCAPITAL AND RESERVESShare Capital 100 100Share Premium 2,391 2,391Profit and Loss Account (955) (934) 1,536 1,557
1. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The interim financial statements for the six months ended 30th September 2008 are unaudited and do not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. They have been prepared using accounting policies consistent with those applied in preparing the financial statements for the year ended 31st March 2008, on which the auditors gave an unqualified opinion.
The directors of the issuer accept responsibility for this announcement.
The licence fee under the licence agreement amounting to GBP 2,000,000 is being amortised in equal annual instalments over its useful life of 20 years.
2. TAXATION
The tax charge for the half year is estimated on the basis of the anticipated tax rates applying for the full year. There is no charge due to the utilisation of losses brought forward.
3. EARNINGS PER SHARE
Basic and diluted earnings per share has been calculated by dividing the profit after tax for the six months by the weighted average number of shares in issue throughout the period of 9,985,000 (six months ended 30th September 2008: 9,985,000).
4. COPIES OF UNAUDITED INTERIM REPORT
Copies of this report are being sent to the shareholders and are also available to the public at the registered office of Saregama Plc, Unit 3, Bush Industrial Estate, Standard Road, Park Royal, London NW10 6DF .
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