Interim Results
November 17 2003 - 2:00AM
UK Regulatory
RNS Number:1175S
Metrodome Group PLC
17 November 2003
Metrodome Group plc
Interim Results
Six Months Ending 30 September 2003
Chairman's Statement
Financial Highlights (Compared to Continuing Operations for the six months to 30
September 2002)
* First reported profit before tax since 31 March 2000
* Substantially improved margins
* Overheads (non-exceptional) down by 25%
* Group operating profits at 6% of turnover compared to losses of 28% of
turnover (continuing)
* Net assets increased by 67%
Carried-over cash limitations had a knock-on impact on the first half release
schedule of this year but the performance of Donnie Darko exceeded expectations
and allowed the Group to acquire a full slate for the second half.
Further structural changes occurred in the first half, including the departure
of the Group Commercial Director and the Sales Director as well as a move to
cheaper premises in June 2003. However, the hard work of the last few years
seems to have finally paid off with the Group making its first reported profit
before tax in seven reporting periods.
Net profit before tax at #63,000 (2002: loss of #683,000) is after charging
exceptional costs of #196,000.
Exceptional costs comprised the following:
* Board restructuring costs #60,000
* Move to new premises #105,000
* Legal fees connected with the closure and disposal of subsidiaries #31,000
Group Operating Results
Turnover
Sales at #2,231,000 were 11% up on those of the continuing business sales for
the comparable period last year. The majority of the increase was due to the
successful retail release of Donnie Darko which, to date, has exceeded 200,000
units. Revenue share income on Donnie Darko has also approached #100,000 in the
half year.
The six months have also seen the theatrical releases of Lilya 4-Ever and The
Hard Word. The former exceeded expectations but the latter has had a slow start.
The retail DVD release of Lilya 4-Ever in September launched slowly but has
increased in momentum during October.
New retail labels are being launched to create a steady stream of high margin
catalogue income. The first of these, Ovation, which focuses on bringing
theatrical masterpieces to DVD, was launched with great interest in September
with the release of the nine-hour RSC version of Nicholas Nickelby. Sales of the
title are promising. The label's second half release schedule will include
Elaine Stritch at Liberty and Trevor Nunn's acclaimed productions of The
Merchant of Venice and Othello. .
The back catalogue has performed to expectations during the half adding another
#500,000 of sales to the top line. One million units of budget DVD catalogue
(#5.99 retail) have been reached during the period.
Gross Profit
The gross profit percentage improved substantially from last year's first half,
coming in at 46% (2002: 20%), mainly because of:
* A good back-end deal on Donnie Darko
* Obtaining the full impact of lower costs of DVD manufacturing in the
period (prices renegotiated in July 2002).
* The impact of switching from lower-margin rental to higher-margin
retail.
Administrative Costs
We have managed to reduce continuing administrative costs by 25% through
restructuring the teams, moving to cheaper premises and imposing new tight
cost-control procedures over all levels of activity within the business.
The result of these improved margins and efficiency savings is that Group made
an operating profit of #128,000 against a #518,000 loss on continuing businesses
in the six months to 30 September 2002.
Review of Continuing Operations
The first of the new theatrical releases for the second period is Spellbound,
which was released in October. This small-scale documentary, which was acquired
for only US$20,000, received outstanding critical acclaim and in the first
couple of weeks has taken over #320,000 at the box office.
My Life Without Me, Isabel Coixet's poignant yet uplifting drama, was launched
at the London Film Festival and has just been released to good reviews. Amandla,
an anti apartheid documentary will be released theatrically before the end of
the calendar year. Northfork and Valentin, were also launched at the London Film
Festival and have release dates fixed for the first quarter of 2004. A range of
further titles is in final stages of negotiation for theatrical release in 2004.
A new home entertainment label, Orchid will join Ovation as another innovative
offering from Metrodome in the New Year. Orchid is a label designed for the
female self-purchase segment of the market and a strong slate of product has
already been acquired for it.
We have made two key appointments. In October, we welcomed a new Sales Director
as well as a Product Development and Marketing Director, a new role within the
Group. Both of these roles will concentrate on driving forward the success of
our DVD labels. We wish them both every success.
We will continue to focus on cost control and operational efficiencies, always
striving to get the best prices we can in product acquisition, manufacturing,
design and advertising.
We will be changing our accounting year-end this year to 31 December, in line
with our major shareholder. This is intended to result in group savings overall
due to reduced audit and tax fees. Our next formal report to shareholders will
therefore cover the three months from 1 October 2003 to 31 December 2003.
The group has begun its preparations for the transfer of reporting requirements
to International Accounting Standards (IAS) in 2005. Currently the group reports
quarterly under IAS to its majority shareholder, TV-Loonland AG, so it is
therefore already able to deal with the new standards. The group will finalise
the adaptation of all its internal and external reporting functions with its
auditors during 2004.
I am pleased to be able to report this set of results, reflecting the successful
restructuring and repositioning of the business, which has in turn made it
possible for us to acquire a range of new products for future exploitation.
Bruce Fireman
Chairman
Unaudited Consolidated Profit and Loss Account
For the six months ended 30 September 2003
Six Months Six Months Year ended
ended ended
30 September 30 September 31 March
2003 2002 2002
(Unaudited) (Unaudited) (Audited)
#,000 #,000 #,000
Turnover
- Continuing 2,231 2,006 4,679
- Discontinued - 227 257
Cost of Sales
- Continuing (1,206) (1,433) (2,869)
- Discontinued - (192) (261)
Exceptional Cost of Sales
- Continuing - (160) (280)
------------ ------------ ----------
Gross Profit 1,025 448 1,526
Administrative Expenses
- Continuing (701) (931) (1,898)
- Discontinued - (88) (256)
Exceptional Administrative
Expenses
- Continuing (196) - -
------------ ------------ ----------
Operating
Profit/(Loss) 128 (571) (628)
Loss on Closure of Discontinued
Businesses
- Discontinued - (54) (346)
------------ ------------ ----------
Profit/(Loss) on
ordinary activities
before interest 128 (625) (974)
Interest payable (65) (58) (132)
------------ ------------ ----------
Profit/(Loss) before
taxation 63 (683) (1,106)
Taxation - - -
------------ ------------ ----------
Profit/(Loss) after
taxation 63 (683) (1,106)
------------ ------------ ----------
Profit/(Loss)
transferred to
reserves 63 (683) (1,106)
------------ ------------ ----------
Earnings per share
Basic 0.1p (4.5p) (4.2p)
Diluted 0.1p (4.5p) (4.2p)
Unaudited Consolidated Balance Sheet
As at 30 September 2003
30 September 30 September 31 March
2003 2002 2003
(Unaudited) (Unaudited) (Audited)
#,000 #,000 #,000
Fixed assets
Intangible 27 60 28
Tangible 58 90 67
------------ ------------ ----------
85 150 95
------------ ------------ ----------
Current assets
Stock 4,019 3,985 3,542
Debtors - due within
one year 1,131 1,511 1,880
- due after one year 436 214 418
------------ ------------ ----------
5,586 5,710 5,840
Creditors
Amounts falling due
within one year (3,540) (4,583) (3,867)
------------ ------------ ----------
Net current assets 2,046 1,127 1,973
------------ ------------ ----------
Total assets less
current liabilities 2,131 1,277 2,068
Creditors
Amounts falling due
after more than one
year - (2) -
------------ ------------ ----------
Net assets 2,131 1,275 2,068
------------ ------------ ----------
Capital and reserves
Called up share
capital 2,631 2,131 2,631
Share premium account 5,143 4,380 5,143
Profit and loss
account (5,643) (5,197) (5,706)
------------ ------------ ----------
Shareholders' funds
(equity interests) 2,131 1,314 2,068
------------ ------------ ----------
Bank Balance (726) (999) (546)
Unaudited Consolidated Cash Flow Statement
For the six months ended 30 September 2003
Six Months ended Six Months Year to
ended
30 September 30 September 31 March
2003 2002 2003
(Unaudited) (Unaudited) (Audited)
#,000 #,000 #,000
Cash (outflow)/inflow
from operating
activities (85) 399 (338)
Returns on investment
and servicing of
finance (65) (58) (80)
Interest paid
Capital expenditure and Financial
investment
Purchase of tangible
fixed assets (14) - (23)
------------ ------------ ----------
Cash (Outflow)/Inflow
before use of Liquid
resources and
financing (164) 341 (441)
------------ ------------ ----------
Financing
Issue of ordinary
share capital - - 1,264
Capital element of
hire purchase payments (16) (16) (37)
------------ ------------ ----------
(16) (16) 1,227
------------ ------------ ----------
------------ ------------ ----------
(Decrease)/Increase in
cash for the period (180) 325 786
============ ============ ==========
Reconciliation of net cash flow to movement in net debt
(Decrease)/Increase in cash for (180) 325 786
the period
Cash outflow from decrease in
hire purchase 16 16 37
obligations
------------ ------------ ----------
Movement in net debt (164) 341 823
Net debt at start of period (564) (1,387) (1,387)
------------ ------------ ----------
Net debt at 30 September 2003 (728) (1,046) (564)
------------ ------------ ----------
Notes to the Accounts
1. Preparation of the accounts
The unaudited results for the six months ended 30 September 2003 have been
prepared on the basis of the accounting policies set out in the audited accounts
of the Group for the year ended 31 March 2003.
The financial information in this interim report does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985. Statutory
accounts for the year ended 31 March 2003, upon which the auditors gave an
unqualified opinion, have been delivered to the Registrar of Companies.
2. Exceptional Items
The exceptional administrative expenses at 30 September 2003 represent:
#,000
Board Restructuring Costs 60
Change of Office Premises 105
Continuing Legal fees on sale of companies 31
------------
196
3. Profit/(Loss) per share
The profit (2002: loss) per share is based on the consolidated profit (2002:loss
) after taxation and minority interests and the weighted average number of
shares in the period of 71,309,543 (30 September 2002: 15,114,227 )
4. Dividends
As in prior periods the directors are not recommending payment of a dividend
5. Net cash flows from operating activites
Six Months Six Months Year to
ended ended
30 September 30 September 31 March
2003 2002 2003
(Unaudited) (Unaudited) (Audited)
#,000 #,000 #,000
Cash outflow from operating
activities
Operating
profit/(loss) 128 (571) (628)
Adjustments for non cash items
Depreciation of
tangible fixed assets 23 38 77
Loss on disposal of
tangible fixed assets - - 53
Amortisation of
intangible fixed
assets 1 16 2
(Increase)/Decrease in
stocks (477) 290 732
Decrease in debtors 731 1,503 930
(Decrease) in
creditors (491) (877) (1,504)
Net Cash Inflow /
(Outflow) (85) 399 (338)
from operating activities
6. Net Debt
Six Months Six Months Year to
ended ended
30 September 30 September 31 March
2003 2002 2003
(Unaudited) (Unaudited) (Audited)
Net debt at 31 March 2003 is made
up as follows
Bank Overdrafts (726) (999) (546)
Hire Purchase
facilities (2) (37) (18)
Net debt at 30
September 2003 (728) (1,036) (564)
This information is provided by RNS
The company news service from the London Stock Exchange
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