Ludorum PLC LUD Interim Results

  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


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