12th May 2006 07:00
VTR PLC12 May 2006 VTR plc INTERIM RESULTS for the six months ending 28 February 2006 As anticipated in the Chairman's statement of 4 November 2006, the difficulttrading conditions affecting all areas of the group continued into the firsthalf of the present year. Turnover for the six months to 28 February 2006 was£9.6m compared to £9.8m in the previous 6 months and £11.7m during the sameperiod last year, resulting in a loss before tax for the half year of £0.52m(2005: profit £0.47m). As a result of our continued tight control of costs,expenses fell by £1.2m to £9.1m, compared to the first half of last year. Net debt fell by £0.54m during the period and capital expenditure amounted to£0.57m, a portion of which was attributed to the setting up of a new subsidiary,United Sound & Vision Limited, a small facility which serves the post productionrequirements of a leading UK advertising agency and which has been profitablesince inception. In December 2005, the grant aided phase of eTITLE, the Group's subtitling andautomated translation project, was completed after two years and has beensuccessfully signed off by the EU. We are currently assessing and planning theoptimum commercial exploitation for this exciting product. For some time, we have been seeking additional finance and I am very pleased toreport that at the EGM held on 24 April 2006, shareholders approved the £4.7mstrategic investment by Prime Focus Limited more fully described in theChairman's letter to shareholders of 31 March 2006. This transaction hasresulted in an inflow of £4.2m in cash into the Company, with Prime Focusholding 55% of the enlarged equity of VTR plc. Our association with Prime Focuswill enable us to invest in potential growth opportunities and commence buildingthe Group in the international marketplace. Following the investment by Prime Focus, Philip Lovegrove has resigned from theboard after more than 20 years as Chairman. The Company owes an enormous debt ofgratitude to Philip, who has provided guidance to the business through manychanges throughout the years. Justin Dukes has also left the board and ourthanks are also due to him for his assistance and advice since 1993. We sendthem both our best wishes for the future. I am very pleased to welcome Namit Malhotra, Managing Director of Prime Focus,to the board as Chairman. I also welcome Prime Focus directors Naresh Malhotraand Rivkaran Chadha, as non-executive directors, each of whom is experienced inAsian business and financial markets and will bring additional breadth to theexperience of your board. Owing to other commitments, Mr. Chandir Gidwani, whohad anticipated joining the board as a non-executive director, will not, at thepresent time, be taking up his appointment and has resigned with immediateeffect. I believe that the association with Prime Focus will bring with it the greatestopportunity for growth that VTR has enjoyed for a number of years. I lookforward to keeping shareholders informed as our plans for future developmentprogress. Paul TraceyManaging Director12 May 2006 For further information please contact: Namit Malhotra, Chairman, VTR plc 020 7437 0026Paul Tracey, Managing Director, VTR plc 020 7437 0026Peter Samengo-Turner, Finance Director, VTR plc 020 7437 0026Katie de Cozar Rushforth, PR Manager, VTR plc 020 7437 0026 Consolidated Profit and Loss Account Six months to Six months to Year to 28 February 28 February 31 August 2006 2005 2005 (unaudited) (unaudited) (audited) Note £'000 £'000 £'000Turnover 2 9,592 11,703 21,506 Cost of sales (740) (797) (1,523) Gross profit 8,852 10,906 19,983 Administrative expenses ( 9,138) (10,266) (20,262) Operating (loss)/profit (286) 640 (279) Exceptional item - fundamental Group restructuring 3 - 119 37 Interest payable and similar charges (237) (287) (538) (Loss)/profit on ordinary activities before taxation (523) 472 (780) Taxation 4 - (168) 117 Retained (loss)/profit for the period (523) 304 (663) (Loss)/earnings per share 5 (4.7p) 2.8p (6.0p)Basic diluted (loss)/earnings per 5 (4.7p) 2.7p (6.0p)share No separate Statement of Total Recognised Gains and Losses has been presented asall such material gains and losses have been dealt with in the Profit and LossAccount. Consolidated Balance Sheet As at As at As at 28 February 28 February 31 August 2006 2005 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000Fixed assetsTangible assets 9,418 11,117 10,320Investments 83 110 83 9,501 11,227 10,403Current assetsStock 27 28 24Debtors 4,280 5,822 4,394Cash at bank and in hand 15 15 12 4,322 5,865 4,430 Creditors: Amounts falling due within one (7,063) (8,464) (6,991)year Net current liabilities (2,741) (2,599) (2,561) Total assets less current liabilities 6,760 8,628 7,842 Creditors: Amounts falling due after more than one year (1,875) (2,248) (2,433)Provisions for liabilities and charges (227) (232) (227) 4,658 6,148 5,182 Capital and reservesCalled up share capital 552 552 552Share premium 4,071 4,071 4,071Capital redemption reserve 270 270 270Profit and loss account (235) 1,255 289Equity shareholders' funds 4,658 6,148 5,182 Consolidated Cash Flow Statement Six months to Six months to Year to 28 February 28 February 31 August 2006 2005 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Net cash flows from operating activities 1,232 1,459 3,195Returns on investments and servicing of finance (237) (287) (538)Taxation (24) (152) (51)Capital expenditure and financial investment (117) (179) (119) Cash flows before use of liquid resourcesand financing 854 841 2,487Financing (972) (1,255) (2,340)(Decrease) / increase in cash in the period (118) (414) 147 Reconciliation of net cash flow to movementin net debt(Decrease) / increase in cash in the period (118) (414) 147Cash flow from decrease in debt and lease financing 972 1,255 2,340Change in net debt resulting from cash flows 854 841 2,487New finance leases (318) (806) (2,021)Decrease in net debt in the period 536 35 466 Net debt at 1 September 2005 (5,773) (6,239) (6,239)Net debt at 28 February 2006 (5,237) (6,204) (5,773) Reconciliation of operating profit to net cash inflow from operating activities Six months to Six months to Year to 28 February 28 February 31 August 2006 2005 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Operating (loss)/profit (286) 640 (279)Depreciation 1,445 1,711 3,276Profit on disposal of tangible fixed (107) (35) (53)assetsDecrease in debtors 114 334 1,642Increase/(decrease) in creditors 284 (563) (705)Cashflow relating to previous (215) (627) (715)period's restructuring provision(Increase)/decrease in stock (3) (1) 3Amounts written off investments - - 26 1,232 1,459 3,195 Analysis of net debt At 31 Other At 28 August non-cash February 2005 Cash flow changes 2006 £000 £000 £000 £000Cash in hand and at bank 12 3 15Bank loans (1,785) (121) (192) (2,098) (118) Debt due after 1 year (1,150) 192 (958)Hire purchase obligations (2,850) 972 (318) (2,196) Total (5,773) 854 (318) (5,237) The debt due after 1 year is repayable over 3 years in equal instalments fromSeptember 2006. Notes to the Interim Financial StatementsFOR THE SIX MONTHS TO 28 FEBRUARY 2006 1. Preparation of the interim financial statements The interim financial statements, which do not constitute statutory accountswithin the meaning of S.240 of the Companies Act 1985, have been prepared on thebasis of the accounting policies set out in the statutory accounts of the Groupfor the year ended 31 August 2005. The interim financial statements, which havebeen approved by the directors, are unaudited but have been reviewed inaccordance with Auditing Practices Board Bulletin "Review of Interim FinancialInformation" by the auditors. Comparative figures for the year ended 31 August 2005 are an abridged version ofthe Group's full accounts which carry an unqualified audit report and have beendelivered to the Registrar of Companies. 2. Turnover by geographical market Six months to Six months to Year to 28 February 28 February 31 August 2006 2005 2005 (unaudited) (unaudited) (audited) £'000 £'000 £'000 United Kingdom 9,323 11,268 20,695 Rest of Europe 152 81 161 Other 117 354 650 9,592 11,703 21,506 3. Exceptional item The exceptional item in February and August 2005 represents the writeback of theexcess portion of the cost of redundancies as a result of the fundamentalrestructuring of the Group in August 2004. 4. Taxation Due to the losses made in the year to 31 August 2005 and the six months to 28February 2006 no taxation is due. 5. (Loss)/earnings per share The (loss)/earnings per share is calculated on a loss of £523,437 (6 months to28 February 2005: profit £303,814, year to 31 August 2005: Loss: £662,809) andon 11,038,550 weighted average ordinary 5p shares in issue during the period (6months to 28 February 2005 and year to 31 August 2005: 11,038,550). Basic diluted (loss)/earnings per share is calculated on the loss of £523,437 (6months to 28 February 2005: profit: £303,814, year to 31 August 2005: Loss:£662,809) and 11,038,550 (six months to 28 February 2005: 11,149,383, year to 31August 2005: 11,038,550) shares including the dilutive effect of share options. FRS14 requires presentation of diluted EPS when a company could be called uponto issue shares that would increase net loss per share. For a loss makingcompany with outstanding share options, net loss per share would only beincreased by the exercise of out-of-the-money options. Since it seemsinappropriate to assume option holders would act irrationally no adjustment hasbeen made to diluted EPS for out-of-money share options. 6. Dividends There is no proposed interim dividend (28 February 2005: Nil). 7. Post balance sheet event At the EGM held on 24 April 2006 the Company received the approval ofShareholders to raise £4.2 million by way of a Placing of 12,062,990 NewOrdinary Shares at a price of 35 pence per New Ordinary Share and to issue afurther 1,428,571 New Ordinary Shares in exchange for the transfer of certainassets valued at 35 pence per New Ordinary Share. The Placing Shares have beenplaced with Prime Focus Limited, one of India's largest integrated postproduction facilities based in Mumbai. The Company's enlarged share capital is24,530,111 5p Ordinary Shares with a nominal value of £1,226,506. Following the Placing of New Ordinary Shares the Company and its subsidiariesintend to change their reporting year end to 31 March, in line with Prime FocusLimited. The first such period to be reported on will be the seven months to 31March 2007. 8. Interim statement Copies of this interim statement are being sent to shareholders and will beavailable from the company at 64 Dean Street, London W1D 4QQ. Statement of the Directors The interim financial statements for the six months ended 28 February 2006 havebeen approved by the directors and have been prepared on a basis consistent withthe audited financial accounts for the year ended 31 August 2005. The interim financial statements were approved by the board of directors on 12May 2006 and are unaudited but have been reviewed by Baker Tilly. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
PFO.L