30th Jun 2005 07:00
Tinopolis PLC30 June 2005 TINOPOLIS PLC TINOPOLIS REPORTS RECORD RESULTS FOR THE SIX MONTHS TO 31st MARCH 2005 Tinopolis Plc (TIN), one of the United Kingdom's leading independent televisionproduction companies is today pleased to announce its interim results for thesix months ended 31st March 2005. Financial Headlines :- • Turnover £5.2m, +46% on prior year • EBITDA £631k, +75% on prior year • Operating Profit £368k, versus a 2004 loss of £(74)k • Net cash inflow from operating activities £559k Chairman's Statement Since Tinopolis joined AIM in February this year the Company has madesignificant progress. All segments of the business have performed well and inline with management's expectations. In television we have launched new live daily programming for S4C that has beenwell received by the broadcaster and by viewers alike. Our plans for expandingin drama are going well with the first series of a drama and a new sit-com nowvirtually complete. Our sports business/exposure has also increased with ourcoverage of the World Rally Championships and, in conjunction with Sky Sports,the broadcast for S4C of the first home Lions test match against Argentina. The prospects for Tinopolis have never looked better and I am confident we willend this financial year with our best ever television order backlog, including athree year agreement for the development of a slate of programmes for/with S4C. Over the past two years Management has committed significant resources to thedevelopment of the Company's Interactive services business. This investment has,in the short term, been a significant drain on Tinopolis' resources. However,your Board persevered because we believe that these skills will be a corerequirement for the television production companies that are successful in thefuture. This year, as anticipated, has seen this business win key customers andcontracts and equally significantly, reach profitability. The order book isstrong and I expect significant further progress. Much has been written about the reorganisation and consolidation that thetelevision production industry is going through; changes in the terms of tradewith broadcasters and the impact of regulatory decisions have accelerated aprocess that was already under way. Our assessment is that Tinopolis is one ofonly a handful of companies in the sector that have the business characteristicsto operate profitably and consistently in this new environment. We believe thatthe years of experience of planning and delivering profitability in televisionproduction gives Tinopolis a significant operating advantage. I believe that we are well placed to deliver growth, both organically and byacquisition. Our planned organic growth is already delivering increased revenueand profitability. In addition, we are currently in preliminary discussion witha number of potential acquisition targets in the television production sectorand also in other business sectors that are complimentary to our own. Ouremphasis is on finding and integrating targets that have the right financial aswell as operational characteristics. We are committed that our growth should beled by profitability and a coherent long-term strategy and we believe thatTinopolis is well placed to execute this vision. For further information, please contact :Tinopolis Plc. 01554 880880Ron Jones, ChairmanArwel Rees, Managing DirectorPaul Shackleton , Daniel Stewart & Co. 020 7374 6789Lawrence Dore, Mantra 020 7907 7800 Managing Director's Statement Tinopolis has shown excellent first half performance with turnover increasing by46% to £5.2 million and pre-tax profits of £333k turning around a loss in thesame period last year of £(136)k. Cash generation was strong in the period, with net cash inflow from operatingactivities of £559k. In addition, there was a further £568k cash inflow from ourreverse takeover of Acquisitor Plc. Cash in the period increased by £763k. Revenue visibility for the balance of 2005 is very strong and Tinopolis shouldbenefit from the traditional increase in profitability the second half of theyear brings. Television production - In the six months ended 31 March 2005, both of our daily magazine programmes'Wedi 7' and 'Wedi 3', broadcast on S4C, were successfully re-launched. Viewingfigures for the primetime 'Wedi 7' programme have doubled from the year earlierperiod. As well as a number of other programme commissions won, the first half of theyear saw the start of a two year contract to cover the World Rally Championshipfor S4C . This commission is a significant step in our plans to grow our sportbusiness. In October 2004 our subsidiary Fiction Factory started production of its firstmajor drama series. 'Caerdydd' , set in Cardiff is a contemporary series dealingwith the lives and loves of a group of young people living in the city . Thefirst series of seven 50 minute episodes is almost complete and is expected tobe broadcast in early 2006. This was followed in January by a new situation comedy series produced byanother of our subsidiaries, Salem Films. Set in a North Wales village itrecords the chaotic lives of a dysfunctional family. The first series is againalmost ready for delivery for broadcast in early 2006. Our drama productions for the first half have been a significant contributor tothe increased turnover. While margins in drama are typically lower than in otherareas of our business, the contribution to the Group is still strong. Interactive / New Media - For some time Tinopolis has anticipated that television would converge with newdistribution channels such as the internet and the newer emerging technologies.As such, the company has in the past invested heavily in acquiring skills andexpertise in these areas and in developing a sustainable interactive business.The first half of the year saw a significant increase in our interactivebusiness, and for the first time it contributed to Tinopolis' operating profit.We believe that the business has now established itself as a sustainable part ofthe group that is well positioned to take advantage of future industryrequirements. The Interactive business has focussed its efforts in e-learning and e-trainingand has won significant new customers in University for Industry, Pearson andBasic Skills agency. In December 2005, Tinopolis was chosen as a preferred supplier to the BBC'sflagship e-learning project, Digital Curriculum. Only 24 suppliers were chosenafter intense competition from companies throughout the world. Out of the 24, wewere chosen twice - once in our own right and once as a joint venture consortiumwith a partner specialising in education. As a preferred supplier we will beasked to tender over the next 2 years for some significant business and areoptimistic as to our chances of success. Animation - Tinopolis believes that the greatest potential the company has of generatingrevenue from Intellectual Property has been through the development andexploitation of a slate of animation created by DEEM, a joint venture with DaveEdwards. Work is progressing well with the slate, with two of the properties at anadvanced stage of development. One of which is a pre-school children's propertywhere an option agreement has been signed with a major North Americandistributor, promising the potential to create a world wide and lucrative brand. TINOPOLIS PLCCONSOLIDATED PROFIT AND LOSS ACCOUNTSIX MONTHS ENDED 31st MARCH 2005 Unaudited Unaudited Audited Six Months Six Months Year ended ended ended 31-Mar-05 31-Mar-04 30-Sep-04 Notes £'000 £'000 £'000 --------------------------------------------------- Turnover 5,173 3,553 7,328 Cost of Sales (3,670) (2,433) (5,591) --------------------------------------------------- Gross Profit 1,503 1,120 1,737 Operating Expenses (1,135) (1,194) (1,803) --------------------------------------------------- Operating Profit/(Loss) 368 (74) (66) Interest Expense (36) (62) (110) Interest Received 1 0 0 --------------------------------------------------- Profit/(Loss) On Ordinary 333 (136) (176) Activities Before Taxation Taxation 2 (111) (43) (57) --------------------------------------------------- Profit/(Loss) On Ordinary 222 (179) (233) Activities After Taxation Equity Minority (4) (5) (15) Interest --------------------------------------------------- Retained Profit/(Loss) 218 (184) (248) for the Year --------------------------------------------------- Earnings/(Loss) per 7 1.0p (0.8)p (1.1)p share - Basic Earnings/(Loss) per 7 0.8p (0.8)p (1.1)p share - Diluted =================================================== TINOPOLIS PLCCONSOLIDATED BALANCE SHEETAS AT 31st MARCH 2005 Unaudited Unaudited Audited As at As at As at 31-Mar-05 31-Mar-04 30-Sep-04 Notes £'000 £'000 £'000 ------------------------------------------------- FIXED ASSETS Tangible assets 3,363 3,575 3,473 Intangible assets 647 0 0 ------------------------------------------------- 4,010 3,575 3,473 CURRENT ASSETS Stocks 89 3 76 Debtors 1,026 637 701 Cash at bank and in hand 595 0 2 ------------------------------------------------- 1,710 640 779 CREDITORS : Amounts falling due (1,761) (1,719) (1,635) within one year ------------------------------------------------- NET CURRENT ASSETS/(LIABILITIES) (51) (1,079) (856) TOTAL ASSETS LESS CURRENT 3,959 2,496 2,617 LIABILITIES CREDITORS : Amounts falling due (322) (274) (437) after one year PROVISIONS for liabilities and (301) (263) (275) charges ------------------------------------------------- NET ASSETS 3,336 1,959 1,905 ================================================= CAPITAL AND RESERVES Called up share capital 497 8 8 Capital redemption 0 2 2 reserve Reverse Acquisition 727 0 0 Reserve Merger reserve 486 486 486 Profit and Loss account 1,612 1,458 1,394 ------------------------------------------------- TOTAL EQUITY SHAREHOLDERS' FUND 3,322 1,954 1,890 Equity Minority Interest 14 5 15 ------------------------------------------------- CAPITAL EMPLOYED 8 3,336 1,959 1,905 ================================================= TINOPOLIS PLCCONSOLIDATED CASH FLOWSIX MONTHS ENDED 31st Unaudited Unaudited AuditedMARCH 2005 Six Months Six Months Year ended ended ended 31-Mar-05 31-Mar-04 30-Sep-04 Notes £'000 £'000 £'000 --------------------------------------------------- Net Cash Flow from 4 559 602 658 Operating Activities Returns on Investments 5 (40) (62) (110) and Servicing of Finance Taxation (18) 0 (14) Capital Expenditure and 5 (95) (60) (117) Financial Investment --------------------------------------------------- Cash Inflow/(Outflow) before use 406 480 417 of liquid resources and financing Acquisitions 5 568 0 0 Financing 5 (211) (258) (180) --------------------------------------------------- Increase/(Decrease) in 763 222 237 cash in period --------------------------------------------------- Reconciliation of Net Cash flow to Net Debt Increase/(Decrease) in 763 222 237 cash in period Receipt of Bank Loans 0 0 (275) Bank Loan Repayments 78 85 126 Receipts of Finance (50) (80) (221) Leases Capital element of 133 173 329 Finance Lease --------------------------------------------------- Movement in Net Debt in 924 400 196 the period Net Debt at start of (1,006) (1,202) (1,202) period --------------------------------------------------- Net Debt at end of 6 (82) (802) (1,006) period =================================================== NOTES TO THE ACCOUNTS 1. Basis of preparation The interim accounts for the six months ended 31st March 2005 are unaudited anddo not constitute statutory accounts in accordance with S240 of the CompaniesAct 1985. They have been prepared under the accounting policies set out in theCompany's statutory accounts for the year to 30th September 2004. The comparatives for the full year ended 30th September 2004 are not theCompany's full statutory accounts for that year. A copy of the statutoryaccounts for that year has been delivered to the Registrar of Companies. Theauditors' report on those accounts was unqualified and did not contain astatement under section 237(2)-(3) of the Companies Act 1985. Copies of the interim accounts are being dispatched to shareholders. Furthercopies can be obtained from the Company's registered office at Park Street,Llanelli, SA15 3YE 2. Taxation Taxation for the six months to 31st March 2005 is based on the effective rate oftaxation which is estimated to apply for the year ending 30th September 2005. 3. Dividends The board has not declared an interim dividend for the period. 4. Reconciliation of Operating Profit/(Loss) to Net Cash Inflow from OperatingActivities Unaudited Unaudited Audited Six Months Six Months Year ended ended ended 31-Mar-05 31-Mar-04 30-Sep-04 £'000 £'000 £'000 --------------------------------------------- Operating Profit/(Loss) 368 (74) (66)Depreciation of tangible assets 263 286 582(Profit)/Loss on disposal oftangible assets (9) 0 4Amortisation of capital grantincome (13) (26) (51)(Increase) in stocks and work inprogress (13) 0 (73)(Increase)/Decrease in debtors (325) 248 183Increase/(Decrease) in creditors 288 168 79 ---------------------------------------------Net Cash Inflow from OperatingActivities 559 602 658 ============================================= 5. Analysis of Headings in the Cash Flow Statement Unaudited Unaudited Audited Six Months Six Months Year ended ended ended 31-Mar-05 31-Mar-04 30-Sep-04 £'000 £'000 £'000 --------------------------------------------- Returns on Investments and Servicing ofFinanceInterest paid (20) (43) (72)Interest element of hire purchaseand finance lease payments (15) (19) (38)Dividends to Minorityshareholders (5) 0 0 ---------------------------------------------Net Cash (Outflow) for Returns onInvestments and Servicing ofFinance (40) (62) (110) ============================================= Capital Expenditure and FinancialInvestmentPurchase of tangible fixed (112) (80) (158)assetsReceipts from sale of tangiblefixed assets 17 20 41 ---------------------------------------------Net Cash (Outflow) for CapitalExpenditure and FinancialInvestment (95) (60) (117) ============================================= AcquisitionsCash acquired through 997 0 0acquisitionTransaction costs (429) 0 0 ---------------------------------------------Net Cash (Outflow) fromAcquisitions 568 0 0 ============================================= FinancingDrawdown of bank loans 0 0 275Repayment of bank loans (78) (85) (126)Capital element of finance leasepayments (133) (173) (329) ---------------------------------------------Net Cash (Outflow) from (211) (258) (180)Financing ============================================= 6. Analysis of Net Debt As at Cash Non-Cash As at 01-Oct-04 Flow Movement 31-Mar-05 £'000 £'000 £'000 £'000 --------------------------------------------- Cash at bank and in hand 2 593 0 595Bank Overdraft (171) 171 0 0 ---------------------------------------------Net Cash (169) 764 0 595 Debt due within one year (187) 76 (76) (187)Debt due after one year (289) 0 76 (213)Finance Leases and Hire Purchasecontracts (361) 84 0 (277) --------------------------------------------- (837) 160 0 (677) ---------------------------------------------Net Debt (1,006) 924 0 (82) ============================================= 7. Earnings Per Share Unaudited Unaudited Audited Six Months Six Months Year ended ended ended 31-Mar-05 31-Mar-04 30-Sep-04 -------------------------------------- Profit/(Loss) for the period - £'000 218 (184) (248) Weighted Average Number of Shares 22,816,327 22,000,000 22,000,000 Dilutive potential of shares underoption 1,144,400 0 0Dilutive potential of contingent shares 2,500,000 0 0Dilutive potential of warrants issued 48,780 0 0Dilutive Weighted Average Number ofShares 26,460,727 22,000,000 22,000,000 EPS - Basic 1.0p (0.8)p (1.1)pEPS - Diluted 0.8p (0.8)p (1.1)p The losses per share for 2004 have been calculated based on the number ofinitial consideration shares to be issued by Acquisitor plc as consideration forthe acquisition of Tinopolis. See note 9 below. 8. Reconciliation of Movement in Shareholders' Funds Unaudited Unaudited Audited Six Months Six Months Year ended ended ended 31-Mar-05 31-Mar-04 30-Sep-04 £'000 £'000 £'000 -----------------------------------------------At the start of the period 1,890 2,138 2,138Profit/(Loss) for the period 218 (184) (248)Reverse Acquisition Reserve 727 0 0Ordinary Shares Issued 489 0 0Capital Redemption Reserve (2) 0 0 -----------------------------------------------Closing Shareholders Funds 3,322 1,954 1,890 =============================================== 9. Acquisition On the 8th February 2005, Acquisitor plc acquired the whole of the share capitalof Tinopolis. Due to the size of Tinopolis, the acquisition is classed as areverse takeover for the purposes of AIM rules and is accounted for as ifTinopolis was the acquirer and Acquisitor plc the company being taken over. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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