Ludorum PLC (LUD) - Interim Results RNS Number : 1245N Ludorum PLC 26 September 2012 26 September 2012 LUDORUM PLC INTERIM RESULTS Ludorum plc ("Ludorum" or the "Company"), the AIM-listed media investment company, today announces its results for the half-year ended 30 June 2012. Highlights Turnover generated in the period of £2.88m (2011: £2.95m), a decrease of 2% Consumer products revenues flat at £2.60m (2011: £2.60m) Operating loss of £0.24m (2011: £0.41m), a 42% reduction Chuggington now licensed for broadcast to 175 countries Exciting new series in production for delivery in 2013 and licensed to the BBC "Pla-rail" toy train system successfully introduced in Japan in July 2012 Die Cast "Stack Track" toy train systems successfully introduced into the US in September 2012 Rob Lawes, Chief Executive, said: "Although our consumer products revenues remained flat for the comparable period, this was a solid performance given the withdrawal from the market place of the "Interactive" plastic train system during the period. We are encouraged by the early success of the "Pla-rail" system, the successor to the Interactive system, which has had a strong launch in Japan commencing in July 2012, and the new "Stack Track" system with its launch in the US market earlier this month. Revenues from both new product lines are not reflected in the reporting period". Contacts Ludorum plc 020 8246 4010 Rob Lawes Investec Investment Banking (NOMAD) 020 7597 4000 David Flin Chief Executive's Review Overview Although our consumer products revenues remained flat for the comparable period, this was a solid performance given the withdrawal from the market place of our "Interactive" plastic train system. We are encouraged by the early success of the "Pla-rail" system, the successor to the Interactive system, which has had a strong launch in Japan commencing in July 2012, and the new "Stack Track" system has also made a strong start with its launch in the US market this month. Revenues from both new product lines are not reflected in this period and, alongside the wooden train system, should drive strong sales for the remainder of 2012 and beyond. It was pleasing to show a 42% reduction in operating losses to £0.24m versus £0.41m in the prior period, reflecting our continued focus on maximising profitability through overhead management. Chuggington Chuggington is an action packed series of train adventures that come to life in a vibrant modern world called Chuggington. Wilson and his friends, Brewster and Koko, take on exciting challenges that test their courage, speed and determination. Along the way, they learn positive values and new skills empowering them to become the best trainees they can be. To date we have created 92 x 10" episodes and 46 x 4" shorter episodes. We have concluded broadcast agreements with all leading broadcasters in their respective territories in over 175 countries. The series has established a highly successful ratings record in many markets including the UK (BBC - Cbeebies), North America (The Disney Channel), Germany (Super RTL), France (TF1), Japan (Fuji -TV), Australia (ABC) and Canada (Treehouse). We have recently concluded an agreement for Chuggington to be aired on Disney Channel, India, commencing December 2012. The first Chuggington series was started by Ludorum in 2006 and has continually and successfully been on-air since 2008. We have now commenced production on series 4, comprising 26 x 10" episodes of new adventures that will be available for broadcast commencing in September 2013. We are pleased to have concluded a deal with the BBC for the new series and we are starting the process of licensing the new series to our international broadcast partners. We are anticipating strong demand for the new content. Consumer Products Our consumer revenues were flat during the period of review. This reflects a period where the Interactive system developed by RC2 was withdrawn from the market, and its replacement system, Pla-rail, had not been launched. We also did not benefit in the period from the launch of the new "Stack Track" system that has been designed to enhance the existing die-cast range. We are pleased to report that, post these results, both these systems have had encouraging launches in their respective markets. In addition to Tomy, we have a significant number of other licensees across consumer products, home entertainment and publishing. Financial Review Ludorum generated revenues of £2.88m for the first six months of 2012 (2011: £2.95m), a 2% reduction over the first six months of 2011. This reduction is mainly the result of slightly lower reported broadcast revenues. Consumer products revenues representing 90% of revenues, were consistent with the prior period at £2.60m (2011: £2.60m). Broadcast revenues, which are recognised on license period start dates, represented 9% of revenues and reduced by £0.06m to £0.26m (2011: £0.32m). Europe (including the UK) represented 44% of total revenues at £1.28m, The Americas represented 41% of revenues at £1.18m and Asia & Australasia 15% of revenues at £0.42m. Gross profit decreased from to £1.15m, to £0.97m, largely reflecting a re-classification of an overhead cost into marketing costs and an increased amortisation charge which resulted from the greater number of completed episodes. Total administrative costs were £1.21m a reduction of 23% over the prior year cost of £1.57m. The operating loss for the six-month period was £0.24m, a 42% reduction on the £0.41m operating loss for the six months to 30 June 2011. This was mainly the result of improved overhead management. Capital expenditure on Chuggington during the period was £0.36m (2011: £0.79m), a decrease of £0.43m. This decrease was the result of a lull in production while the concept and scripts for the new series were being developed. As at 30 June 2012 the Company had cash and cash equivalents of £0.34m (2011: £0.25m) and bank overdrafts of £0.73m (2011: £0.72m). In March 2012, the Company renewed its £0.75m overdraft facility with Coutts & Co. In March 2012, the Company redeemed at par, £1.50m of loan notes, being all the loan notes in issue. At the same time the Company issued £2.75m of new loan notes. The new loan notes are held by client funds of Downing LLP and D C Thomson & Co Limited. The new loan notes are repayable in March 2017. If the Company redeems the new loan notes within the next two years the redemption will be £1.25 per £1 of loan notes. If the new loan notes are redeemed after two years the loan notes are redeemable at par. The coupon on all new loan notes is the higher of 7.5% or 3% above LIBOR for the next three years. After the three years the coupon is 12.5%. On the basis of enquiries made by the Directors and in the light of current financial projections and facilities available, the Directors have reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Accordingly, we continue to adopt the going concern basis in preparing the accounts. On 28 June 2012 we announced that our accounting reference date would change to 31 March. Accordingly, the next consolidated accounts for the Company will be prepared for the fifteen month period ending 31 March 2013. The change has been made so that the Company's accounting year end is the same as that of its master toy licence partner, Tomy Company Limited. Board Changes Two directors, Charlie Caminada and David Maloney, resigned with effect from 28 June 2012. On behalf of the Board and the Company, I would like to thank Charlie Caminada, a co-founder of Ludorum, and a colleague and friend of 23 years standing, for his excellent contribution since our launch in 2006. We wish him all the very best following his retirement in June. We would also like to thank David Maloney for his significant contributions over his six years as a non-executive director. Richard Hall was appointed, with effect from 28 June 2012, as a non-executive director. We are delighted to welcome Richard who also serves as a board member of D C Thomson & Co Limited. Outlook We remain committed to building Chuggington into the premier evergreen pre-school global train property. Chuggington is already established as a durable and well accepted brand in markets throughout the globe, and we feel there are excellent opportunities to make this strategic aim a reality as we look to steadily build on our experience and the brand's successes to-date. Ludorum plc Unaudited consolidated statement of comprehensive income for the six months ended 30 June 2012 Six months Six months Notes ended ended 30 June 30 June 2012 2011 £000 £000 Continuing operations Revenue 2 2,880 2,949 Cost of sales (1,910) (1,797) Gross profit 970 1,152 Administrative expenses (1,210) (1,565) Operating loss (240) (413) Finance cost - bank and loan interest (54) (43) Finance income - bank interest - - Net finance cost (54) (43) Loss before taxation (294) (456) Taxation (51) (95) Loss for the period (345) (551) Other comprehensive income: foreign exchange 3 5 differences Total comprehensive income for the period (342) (546) Loss per share (basic and diluted) (3.5p) (5.7p) Ludorum plc Unaudited consolidated balance sheet as at 30 June 2012 Notes 30 June 31 December 30 June 2012 2011 2011 £000 £000 £000 Assets Non -current assets Property, plant and equipment 19 36 53 Intangible assets 3 3,619 3,704 3,304 3,638 3,740 3,357 Current assets Trade and other receivables 1,755 2,498 1,702 Cash and cash equivalents 337 501 252 2,092 2,999 1,954 Liabilities Current Liabilities Income tax payable (16) (23) (18) Trade and other liabilities (2,768) (4,463) (5,983) Borrowings 4 (734) (999) (723) (3,518) (5,485) (6,724) Net current (liabilities) / assets (1,426) (2,486) (4,770) Non - current liabilities Borrowings 4 (2,750) (1,500) (1,500) Net (liabilities) / assets (538) (246) (2,913) Shareholders' equity Ordinary shares 88 88 88 Deferred shares 50 50 50 Share premium 9,296 9,296 9,281 Share based payments reserve 2,262 2,212 166 Foreign currency translation (11) (14) 10 Accumulated losses (12,223) (11,878) (12,508) Total shareholders' equity (538) (246) (2,913) Ludorum plc Unaudited statement of changes in shareholders' equity Share Share Accumulated Share-based Foreign Total losses payments Capital Premium currency Shareholder reserve translation (deficit)/ Equity 30 June 2012 June 12 June 12 June 12 June 12 June 12 June 12 £000 £000 £000 £000 £000 £000 At 1 January 138 9,296 (11,878) 2,212 (14) (246) 2012 Loss for the - - (345) - - (345) period Other - - - - 3 3 comprehensive income: Foreign exchange differences Total - - (345) - 3 (342) comprehensive income for the period to 30 June 2012 Transactions with owners Charge - - - 50 - 50 relating to incentive option plan At 30 June 138 9,296 (12,223) 2,262 (11) (538) 2012 Share Share Accumulated Share-based Foreign Total losses payments Capital Premium currency Shareholder reserve translation (deficit)/ Equity 30 June 2011 June 11 June 11 June 11 June 11 June 11 June 11 £000 £000 £000 £000 £000 £000 At 1 January 138 9,281 (11,957) 105 5 (2,428) 2011 Loss for the - - (551) - - (551) period Other - - 5 5 comprehensive - - income: Foreign exchange differences Total - (551) - 5 (546) comprehensive - income for the period to 30 June 2011 Transactions with owners Charge - - - 61 - 61 relating to incentive option plan At 30 June 138 9,281 (12,508) 166 10 (2,913) 2011 Ludorum plc Unaudited consolidated cash flow statement for the six months ended 30 June 2012 Six months ended Six months ended 30 June 2012 30 June 2011 £000 £000 Cash flows from operating activities Cash (used in) / generated by operations (677) 210 Interest received - - Interest paid (54) (43) Taxation paid (58) (93) Net cash (used in) / generated by operating (789) 74 activities Cash flows from investing activities Purchase of property, plant and equipment - (17) Investment in intangible assets (360) (785) Net cash used in investing activities (360) (802) Cash flows from financing activities Increase in loans 1,250 - Net cash generated from financing 1,250 - activities Net increase / (decrease) in cash and cash 101 (728) equivalents Cash, cash equivalents and bank overdraft at (498) 257 1 January Cash, cash equivalents and bank overdraft (397) (471) at 30 June Ludorum plc Notes to the consolidated interim financial statements for the six months ended 30 June 2012 1. Accounting policies General Information The Company is a public limited company incorporated and domiciled in the United Kingdom. The address of its registered office is 2B River Court, 27 Brewhouse Lane, Putney Wharf, London SW15 2JX. The registered number is 5595899. This Company is listed on AIM. The condensed consolidated interim financial information was approved for issue on 26 September 2012. Basis of preparation The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2011, which have been prepared in accordance with IFRSs. The condensed consolidated interim financial information has not been reviewed or audited by the Company's auditors and does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2011 were approved by the Board for issue on 23 March 2012 and have been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under sections 498 (2) or (3) of the Companies Act 2006. Accounting policies The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2011, as described in those financial statements. 2. Segmental analysis The Group currently has one operating segment, the development and exploitation of its rights in Chuggington. Further information about revenue derived from the Group's product lines is set out below. Management information used by the Chief Operating Decision Maker ("CODM") is in a format similar to the Consolidated Statement of Comprehensive Income and Consolidated Balance Sheet. The CODM is considered to be the Board of Directors. Revenue by product line Six months ended Six months ended 30 June 2012 30 June 2011 £000 £000 Television 258 323 Consumer Products 2,596 2,601 Other 26 25 2,880 2,949 Geographical analysis of revenue by location of customer Six months ended Six months ended 30 June 2012 30 June 2011 £000 £000 United Kingdom, Europe, Middle East & Africa 1,276 1,373 Asia & Australasia 421 574 Americas 1,183 1,002 2,880 2,949 All material assets are located in the UK. 3. Intangible assets Capitalised development costs £000 30 June 2012 Cost At 1 January 2012 4,768 Additions 259 At 30 June 2012 5,027 Accumulated amortisation At 1 January 2012 1,064 Charge for the period 344 At 30 June 2012 1,408 Net book value at 30 June 2012 3,619 Capitalised development costs £000 30 June 2011 Cost At 1 January 2011 3,756 Additions 327 At 30 June 2011 4,083 Accumulated amortisation At 1 January 2011 519 Charge for the period 260 At 30 June 2011 779 Net book value at 30 June 2011 3,304 4. Borrowings The following borrowings are included in trade and other liabilities: 30 June 31 December 30 June 2012 2011 2011 £000 £000 £000 Bank overdraft 734 999 723 Loans 2,750 1,500 1,500 3,484 2,499 2,223 Undrawn borrowing facilities Bank overdraft 16 56 27 Fixed interest rate loan - - - 16 56 27 The Company has overdraft facilities of £750,000 from Coutts & Co. The overdraft is secured by a first charge over the Company's assets (including the Company's intellectual property). In March 2010 the Company issued £1.5m of loan notes. These loan notes were redeemed in March 2012 at which time the Company issued £2.75m of new loan notes. The new loan notes are redeemable within five years. If the Company redeems the loan notes within two years the redemption will be £1.25 per £1 of loan notes. If the loan notes are redeemed after two years the loan notes are redeemable at par. The interest payable on the loan notes is the greater of 7.5% or 3% above LIBOR for the first three years. After three years, the interest rate is 12.5%. The new loan notes are secured by a second charge over the Company's assets (and a charge over the assets of Ludorum Enterprises Limited, a wholly owned subsidiary of the Company). £1.5m of the new loan notes are held by client funds of Downing LLP. £1.25m of the new loan notes are held by D C Thomson & Co Limited. 5. Related party transactions Included in trade and other liabilities at 30 June 2012 is £145,442 in respect of unpaid remuneration (and the associated employer's National Insurance payable) owed to directors of the Company (30 June 2011: £101,220, 31 December 2011: £176,150). Also included in trade and other liabilities at 30 June 2012 are accrued pension costs owed to the directors of £70,544 (30 June 2011: £116,342 December 2011: £143,714). 6. Commitments In 2007 the Company entered into an agreement with a toy manufacturer under the terms of which the toy manufacturer agreed to fund 50% of the production cost of the Company's animated series "Chuggington" in return for which it has a global master toy licence and the right to participate in the net profit of the property. The Company and the toy manufacturer have now jointly funded the production of three series, comprising 92 episodes of Chuggington. The Company and the toy manufacturer have agreed to jointly fund a fourth series of 26 episodes of 10 minutes each. The budget is £4.4m. Production of this series commenced in 2012. In April 2012 the Company entered into an agreement with Shanghai Motion Magic Digital Entertainment Inc ("Motion Magic") under the terms of which Motion Magic is to provide animation and editing services for the production of the fourth series of Chuggington. The Company is committed to pay RMB 12.631m (£1.229m). Under the terms of the agreement with the toy manufacturer described above, 50% of the amount payable to Motion Magic will be refunded to the Company by the toy manufacturer. This information is provided by RNS The company news service from the London Stock Exchange END IR BXGDCXUDBGDU -0- Sep/26/2012 06:00 GMT
Ludorum PLC LUD Interim Results
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