25th Jul 2005 07:00
TV Commerce Holdings PLC25 July 2005 TV Commerce Holdings plc Interim Results For the period ended 30 June 2005 TV Commerce Holdings plc ("TV Commerce" or the "Group"), the AIM-listed operatorof the SKY TV channels 'Your Destiny TV' and 'The Advert Channel', today reportsits Interim Results for the period ended 30 June 2005. Highlights / recent activity • Turnover of £312,000 - in line with expectations. • Pre-tax loss of £267,000, reflecting the cost of setting up the channels. • The Group is now trading profitably. • Expansion of platform to include carriage on other SKY channels • Launch of live broadcasts to subscribers to '3' Mobile in May 2005 • Launch of mobile phone gaming joint venture with Probability Games Corporation in July 2005 • Licence granted by Ofcom to broadcast new 24 hour shopping channel during 2005 Commenting on the results, Vince Stanzione, Chief Executive of TV Commerce,said: "Since coming to AIM in February of this year, TV Commerce has established agrowing business with its premium rate calls and text messaging response to itsSKY TV channels. The recent launch of the mobile phone gaming joint ventureshould also see a significant increased contribution to revenue and earnings andthe Board remains confident of the outlook for the balance of the current year". For further information, please contact: TV CommerceVince Stanzione Tel: +44 (0) 1908 330 747 First City Financial LtdAllan Piper Tel: +44 (0) 207 436 7486 Daniel Stewart & CoLindsay Mair Tel: +44 (0) 207 847 0354 Statement by Andy Mintern, Chairman I am pleased to present our maiden interim results for the period to 30 June2005, during which the Group has experienced both rapid and strategic growth tobecome a niche media company, with over 1,800 hours of interactive televisionbroadcast to date. Performance for the period to 30 June 2005 The turnover for the period was £311,726, which largely reflected trading sinceMarch of this year. A loss of £266,614 was incurred after set up costs inrelation to the TV channels. The Group's activities continue to be focused on the SKY TV platform,broadcasting niche programming to drive viewer interaction through Premium Ratenumber or Premium Billed text messaging. The Group, however, operates across anumber of multi-media technologies to enhance the viewer experience which, inaddition to TV and fixed line telephony, includes mobile telephony, MMS, SMS,WAP, 3G, the internet and Web TV. The Group's areas of operation currently include Psychic, Astrology, Chat andDating and the recent expansion into Gaming and Betting is an exciting addition. 'Your Destiny TV' The 'Your Destiny TV' format continues to grow in strength and from a startuphas become one of the most popular live interactive daytime formats on the SKYplatform, reaching approximately eight million homes throughout the UK andEurope. In addition to broadcasts on SKY channel 694, broadcasting has beenexpanded through access to the 'L!VE TV', 'TTV' and 'You TV' Sky channels. 'Your Destiny TV' is the UK's first live psychic TV Channel, featuring wellknown psychics, astrologers and clairvoyants. Viewers interact with the showusing Premium Rate telephone calls to obtain live 'one to one' readings, PremiumRate Text or Multi Media messaging to request a reading or to send photos orsamples of handwriting to obtain readings by return. The speed of interactionenhances the enjoyment of the service with readings available within a minute,for example, of the user sending a photo from their phone. In March the Group's announced its partnership with Stream Group plc, toincrease the Group's capacity to handle the increase in calls received through arecognised panel of psychic readers. In addition the Group's multimediapartner, Requestec, now handles over 800 text messages per day. In May the Group announced the expansion of this relationship with Requestec, tobecome the first TV channel to broadcast live TV to a mobile phone, through the'3' mobile network, dialing 85588 to view live transmission. In addition, by 'texting' the 85588 SMS code, readings can be obtained from other mobilenetworks, a service for which the Group now has over 10,000 subscribers. Psychic and Astrology matters continue to be closely regulated by Ofcom. Incomplying with existing regulations, the complexity of the regulationsthemselves provides a natural barrier to entry from increasing competition. The Group continues to review international expansion opportunities to includeother countries where Premium Rate services have been registered, includingGermany and the USA. The Group is also exploring the possibility of thisexpanding the 'Your Destiny TV' format to other TV networks, in addition to SKY. The Advert Channel The 'Advert Channel' represented the Group's first venture into TV broadcastingand was fully launched in September 2004 to become the most successful new nichechannel launch of 2004, widely covered by the press and TV. Although the format has been successful and the Group maintains the intellectualproperty rights, the practical and financial considerations of providing a 'video juke box' format has led, in the immediate future, to the decision tofocus resource on the 'Your Destiny TV' format. TV and Mobile Gaming The Group continues to expand its content offer and has developed a slot machinegame which can be played on live TV. Viewers dial a Premium Rate number to havethe chance of being selected to play the game, interacting with the programmepresenter to win cash prizes of up to £10,000. Owning the intellectual propertyrights to the format and software application, the Group also has thepossibility of licensing the game to other media owners worldwide. Whilst revenue from the TV games format is important, there is also theopportunity to generate additional sources of revenue from the database ofplayers - who are also likely to be interested in other games of chance,including mobile gaming. Earlier this month the Group announced a joint venture to launch a fullylicensed game for mobile phones called 'Mobile Casino'. Produced in partnershipwith the Probability Games Corporation, the service allows the download ofcasino games such as Blackjack, Slot Machines, Hi-Low, Roulette and Poker to theusers' mobile phone for stakes ranging from 10p per game. The Group will market the new games using its existing TV coverage to be used inconjunction with a marketing campaign starting in September of this year,increasing towards the Christmas period. Tested on over one hundred and fifty different handsets, with full customersupport, the games will work on all Java enabled handsets with a unique age andID verification systems to prevent underage or fraudulent play. In addition thepayment top up system is both intuitive and quick to use. Teleshopping The production of content for other media operators remains a source of revenuefor the Group and to date this includes commercials for Monstermob plc and E2Save, part of the Carphone Warehouse. The Group is also in discussion with anumber of third parties with a view to expanding this to include teleshoppingcontent.During the year, the Group was awarded a new licence by Ofcom to broadcast a 24hour shopping channel and there are plans to combine this with the gaming andauction formats to create new and exciting programmes. Admission to AIM On 21 February 2005, the Group's shares were admitted to AIM raising a total of£779,315 net of expenses. The funds raised have enabled the Group tosuccessfully expand its programme offers and develop new ideas for revenuegeneration. At the 30 June 2005 the Group had a positive cash balance of£490,000. On admission I was appointed to the Board as Non Executive Chairman, togetherwith Vince Stanzione (Chief Executive), Chelsey Baker (Commercial Director) andJason Nichols (Director of Broadcasting). Jason, who is also a Director of NTLHome/Telewest, has worked with the Group on a part time basis and has assistedwith the launch of the Group's channels. Having completed this task, Jason willresign from the Board on 1 August of this year to pursue his career and, onbehalf of the rest of the Board, I would like to thank Jason for his significantcontribution to date. These results also reflect the considerable energy and effort of all of thoseinvolved with the Group and, again, on behalf of the rest of the Board I wouldlike to thank them for their help in the continuing development of TV Commerce.The Board remains confident of the outlook for the balance of the currentfinancial year and for the Group's future prospects. Andy MinternChairman Consolidated Profit and Loss AccountForecast for the period to 30 June 2005 Period to Notes 30 June 2005 £ GROUP TURNOVER 311,726 Cost of sales (429,444) GROSS LOSS (117,718) Administration expenses (157,337) GROUP OPERATING LOSS (275,055) Interest receivable and similar 8,441income LOSS ON ORDINARY ACTIVITIES BEFORETAXATION (266,614) TAXATION - LOSS AFTER TAXATION (266,614) Dividend - RETAINED LOSS FOR THE PERIOD (266,614) Loss per ordinary share (in pence): Basic loss per share 2 (0.01)p Consolidated Balance SheetAs at 30 June 2005 As at Notes 30 June 2005 £CURRENT ASSETS Debtors 144,313Cash at bank and in hand 4 489,624 633,937 CREDITORS:Amounts falling due within one year (54,185) NET CURRENT ASSETS 579,752 TOTAL ASSETS LESS CURRENT LIABILITIES 570,752 CREDITORS:Amounts falling due after more than one -year NET ASSETS 579,752 CAPITAL AND RESERVES Called up share capital 641,796Share premium account 571,191Merger reserve 66,328Profit and loss account (699,563)EQUITY SHAREHOLDERS' FUNDS 5 579,752 Consolidated Cash FlowFor the period to 30 June 2005 Period to 30 June 2005 £ NotesRECONCILIATION OF LOSS BEFORE INTEREST AND TAXATIONTO OPERATING CASH OUTFLOW Operating loss before interest and taxation (275,055)Operating loss to 31 December 2004 (432,949)Increase in debtors (144,313)Increase in creditors 54,185 Net cash outflow from operating activities (798,132) Returns on investments and servicing of financeInterest received 8,441 8,441 Net cash outflow before financing (789,691) FinancingIssue of equity share capital 1,248,740Flotation expenses (469,425)Issue of share capital in subsidiary 500,000Receipt of Loans 605,000Repayment of Loans (605,000) 1,279,315 Increase in net funds in the period 4 489,624 Notes to Financial StatementsFor the period to 30 June 2005 1. Basis of preparation This Interim Statement, which has not been audited and does not constituteaccounts within the meaning of section 240 of the Companies Act 1985. The Group's Interim Statement consolidates the financial statements of TVCommerce Holdings plc and its subsidiary undertakings, which have been made upto 30 June 2005 and accounted for under the merger accounting method. The groupfinancial statements incorporate the accounts of TV Commerce Holdings plc forthe period from incorporation (22 November 2004) to 30 June 2005 and theaccounts of TV Commerce Limited for the period 1 January 2005 to 30 June 2005. The Group commenced trading after 30 June 2004 and therefore comparativeinformation has not been disclosed. The Company's auditors have not yet reported on the statutory accounts of theCompany as it has yet to complete its first financial period. Turnover The turnover shown in the profit and loss account represents fees andcommissions receivable during the period. Fixed assets The cost of tangible fixed assets is their purchase cost, together with anyadditional costs of acquisition. Operating lease agreements Rentals applicable to operating leases, where substantially all of the benefitsand risks of ownership remain with the lessor, are charged against profits on astraight line basis over the period of the lease. Deferred taxation Deferred tax liabilities are recognized in respect of all timing differencesthat have originated but not reversed at the balance sheet date. Deferred tax ismeasured at the average rates of tax that are expected to apply in the periodsin which the timing differences are expected to reverse, based on tax rates andlaws that have been enacted by the balance sheet date. Deferred tax is measuredon a non-discounted basis. Investments Investments are included at cost less any amounts written off. Profits andlosses from disposals of fixed assets are treated as part of the results fromordinary activities. Capital instruments In accordance with FRS 4 Capital Instruments, including the share capitalaccounts, are shown as the total consideration received less expenses incurreddirectly in connection with the issue costs. 2. Loss per share Basic Loss per share for the period to 30 June 2005 is calculated by dividingthe Group's loss after taxation of £(266,614) by the weighted average number ofshares in issue during the period of 45,766,881. No diluted earnings per share are presented as the effect of the exercise ofshare options would be to decrease the loss per share. 3. Dividend The directors do not recommend the payment of a dividend for the period to 30June 2005. 4. Reconciliation of net cash flow to movements innet debt Period to 30 June 2005 £Increase in net cash in the year 489,624Movement in net debt in the period 489,624Net cash brought forward -Net cash 30 June 2005 489,624 5. Analysis of changes in net funds Brought Cash Non-cash 30 June Forward flows movements 2005 £ £ £ £Cash at bank and in - 489,624 - 489,624handLoans - 500,000 (500,000) -Total - 989,624 - 489,624 6. Shareholders' funds On 22 November 2004 the Company was incorporated with an authorised sharecapital of 1,000 £1 ordinary shares, of which 1 £1 ordinary share was allottedat par for cash. On 18 January 2005 the share capital was subdivided into 100,000 shares of £0.01each and, on the same date, the share capital was increased by the creation of124,900,000 shares, increasing the value of the authorised share capital to£1,250,000. On 18 January 2005 43,367,200 ordinary shares of £0.01 each were issued inexchange for the whole issued share capital of TV Commerce Limited. A further 20,662,332 ordinary shares of £0.01 each were issued on 10 February2005 for a total cash consideration of £1,248,740. On 17 March 2005 150,000 ordinary shares of £0.01 each were issued for cashconsideration of £9,000. INDEPENDENT REVIEW REPORT TO TV COMMERCE HOLDINGS PLC Introduction We have been instructed by the Company to review the financial information whichcomprises the consolidated profit and loss account, the consolidated balancesheet, the consolidated cash flow statement and the related notes. We have readthe other information contained in the interim report and considered whether itcontains any apparent misstatements or material inconsistencies with thefinancial information. Directors' Responsibilities The interim report, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the interim report in accordance with the AIM Rules ofthe London Stock Exchange which require that the accounting policies andpresentation applied to the interim figures should be consistent with thoseapplied in preparing the preceding annual accounts except where any changes, andthe reasons for them, are disclosed. Review Work Performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand based thereon, assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with United Kingdom Auditing Standards and thereforeprovides a lower level of assurance than an audit. Accordingly we do not expressan audit opinion on the financial information. This report, including theconclusion, has been prepared for and only for the company for the purposes ofthe AIM Rules of the London Stock Exchange and for no other purpose. We do not,in producing this report, accept or assume responsibility for any other purposeor to any other person to whom this report is shown or into whose hands it maycome save where expressly agreed by our prior consent in writing. Review Conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2005. CLB Littlejohn FrazerChartered Accountants1 Park PlaceCanary WharfLondonE14 4HJ25 July 2005 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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