Final Results
26 January 2012
Talent Group plc
("Talent" or the "Company")
Final results for the year ended 30 September 2011
Chairman's Statement
I am pleased to present the Company's results for the year ended 30 September
2011. These represent a considerable improvement over recent years. Group
turnover has increased to £874,000 (2010: £653,000), gross profit has increased
to £516,000 (2010: £342,000) and, after taxation, we have a retained profit for
the year of £31,000 (2010: loss of £492,000).
The improvement is largely based around three large projects undertaken during
the year, all of which should continue to contribute to Group profitability
over the next 12 months. During the first half of the year Talent was involved
in the co-production of a feature film, Outside Bet, based on the novel The
Mumper, and starring Bob Hoskins and Jenny Agutter. Production fees from this
project are included in the 2011 results, but we retain a share of future
profits from the film, which is expected to go on general release in April
2012.
In July 2011 Talent commenced production of a 26 part children's series, My
Phone Genie, for ITV and international distribution. This project, which Talent
has been developing for several years, is an international co-production with
Moonscoop of France, Telegael in Ireland and ZDF of Germany. Production of the
series is now nearing completion and the series has commenced broadcasting on
ITV. Again, Talent has received production fees over the course of production,
and retains a significant share of future profits.
Talent Television South completed a series of eight crime documentaries for The
Crime and Investigation Network, which were broadcast during the year. The
success of these resulted in the commissioning of a second eight-part series,
production of which commenced in June 2011, with final delivery in March 2012.
A number of other projects have also contributed to Group profitability. Talent
Television continues to receive royalties and format fees from its back
catalogue, with various programmes being taken up by overseas broadcasters
during 2011. Talent South, in addition to the crime series, was commissioned by
the same channel for a documentary on The Richardsons, to complement the
programme made on The Krays in 2010. Both Talent companies are also involved in
producing a commissioned occasional series of instructional DVDs. The third
such commission, on beekeeping, was completed during 2011, following on from
DVDs on clay pigeon shooting and wine appreciation made in 2010. A further
three such DVDs have, to date, been commissioned for 2012.
We have also made further progress on driving down overheads. Administrative
expenses for 2011 were £441,000 compared to £792,000 for 2010. The 2010 figures
included a £174,000 exceptional bad debt, so the underlying reduction in
overheads is £177,000. In August 2011 we moved to smaller offices, so will
benefit from reduced premises costs for 2012.
The last year has also seen some significant board changes. In March 2011
Jonathan Glazier, the Company's director of entertainment, stood down from the
board, but continues to work with the Group on the development of new
entertainment projects. Kate Beal, managing director of Talent South, has
joined the Group board, and we are pleased to welcome back Bob Benton, former
Chairman, as a non-executive director.
I have previously reported that progress on development projects was
encouraging. Certain of these projects are now coming to fruition, we are
starting to realise profits from these projects and look forward to benefitting
further over future periods.
Terry Bate
Chairman
26 January 2012
Business Review and Principle Activities
As the Chairman has stated above, this year has shown a significant improvement
for the Company against a background of continuing difficulty for the industry
and economy at large.
We reported last year that the Group was embarking on the production of its
first major feature film, eventually entitled `Outside Bet'. I am pleased to
say that production went without hitch and that it is to be distributed by
Universal to go on theatrical release in UK cinemas from 13 April 2012. It is
worth noting that the majority of films produced in the UK do not routinely get
a theatrical release, so to achieve this at our first attempt and with such a
big name as Universal is very encouraging. As a result, we are now considering
other possible movie projects and already have a number of new scripts in the
early stages of development.
Having made the move into `scripted' projects, I am also pleased to report that
in July, we went into production on `My Phone Genie' a 26 half hour children's
comedy series for ITV which completed shooting in December. Long term
shareholders may remember that we have had faith in this project for many
years, so finally bringing it to production reflects the level of persistence
required in this business when you know that you have something good! In the
current financial climate, structuring this project as a four way international
co-production took a lot of work but as a result we feel that we have created a
new model with new partners which we hope will be replicated on other projects
in the future.
With both of these scripted productions reaching audiences early in 2012, we
have already developed a number of other scripted comedy projects which are
currently being pitched to broadcasters.
In addition to our scripted projects, we have not given up on `entertainment'
or `reality' programming and continue to develop and pitch a slate of projects
in this area, some of which we recently pitched to US broadcasters and
potential co-producers in Los Angeles.
In factual, Talent South continues to progress well and we were all delighted
not only with the audience figures for the first series of `Fred Dinenage -
Murder Casebook' but also with its re-commission for a second series which
reflects a consistent level of quality which we are confident will lead to
further commissions in the future.
This increase in production, coupled with an increased contribution to income
from the exploitation of our back catalogue, means that we currently have more
visibility into the future than we have had at any time in the past three
years. Therefore as we push forward into 2012, I would like to thank our
Chairman, board of directors and shareholders for their continued support
through what has been a very difficult period. This support along with the
continued belief and effort of all of the Talent Television and Talent
Television South staff has taken the Company back to a position where
meaningful profits and, in turn, an increase in shareholder value is again a
realistic objective.
Tony Humphreys
Managing Director
26 January 2012
Further Enquiries
Talent Group plc
Tony Humphreys Tel: 020 7415 7114
Merchant Securities Limited
John East/Simon Clements Tel: 020 7628 2200
Audited consolidated income statement for the year ended 30 September 2011
2011 2010
Notes £'000 £'000
Revenue 874 653
Cost of sales (358) (311)
Gross profit 516 342
Administrative expenses (441) (792)
Operating profit /(loss) 75 (450)
Finance income - 1
Finance costs (55) (43)
Profit / (loss) before taxation 20 (492)
Taxation 2 11 -
Profit / (loss) for the year 31 (492)
Profit / (loss) per share (pence) 3 0.165p (2.76p)
Diluted profit / (loss) per share (pence) 3 0.156p (2.67p)
The income statement has been prepared on the basis that all operations are
continuing operations.
The accounting policies and the notes, which are set out in the Company's
report and accounts, form an integral part of these financial statements.
There are no recognised gains or losses other than those passing through the
income statement.
Audited consolidated balance sheet as at 30 September 2011
2011 2010
Notes £'000 £'000 £'000 £'000
Assets
Non-current assets
Goodwill 1,082 1,082
Other intangible assets - 25
Property, plant & equipment 21 31
1,103 1,138
Current assets
Inventories 55 6
Trade receivables 248 42
Cash & cash equivalents 4 29 31
332 79
Total assets 1,435 1,217
Equity and liabilities
Equity
Share capital 6,368 6,329
Share premium 11,822 11,731
Share option reserve 141 133
Retained earnings (18,331) (18,362)
Total equity - (169)
Current liabilities
Borrowings 5 862 889
Trade & other payables 6 573 497
Total Liabilities 1,435 1,386
Total equity & liabilities 1,435 1,217
Audited consolidated cash flow statement from the year ended 30 September 2011
2011 2010
Notes £'000 £'000 £'000 £'000
Cash flows from operating
activities
Profit / (loss) before taxation 20 (492)
Adjustments for:
Depreciation of tangible assets 12 13
Amortisation of intangible assets 25 6
Share option reserve 8 -
Interest received - (1)
Interest paid 55 43
120 (431)
Increase in trade & other (257) (1)
receivables
Decrease in inventories (49) 51
Increase in other payables 127 226
(59) (155)
Tax refund received 11 -
Tax paid - -
Net cash from operating activities (48) (155)
Cash flows from investing
activities
Purchase of property, plant and (2) (10)
equipment
Interest received - 1
Net cash used in investing (2) (9)
activities
Cash flows from financing
activities
Proceeds from borrowing - 162
Proceeds from issue of shares 130 70
Interest paid (55) (43)
Net cash used in financing 75 189
Net increase in cash and cash 7 25 25
equivalents
Cash and cash equivalents at the
beginning
of the year 7 4 (21)
Cash and cash equivalents at the 7 29 4
end of the year
Audited consolidated statement of changes in equity from the year ended 30
September 2011
At 1 October 20096,31511,675126(17,870)246
Share Share Share Retained Total
Option
Capital Premium Earnings £'000
Reserve
£'000 £'000 £'000
£'000
Changes in equity
Loss for the year - - - (492) (492)
Equity share option - - 7 - 7
recognised
New shares issued 14 56 70
At 1 October 2010 6,329 11,731 133 (18,362) (169)
Changes in equity
Profit for the year - - - 31 31
Equity share option - - 8 - 8
recognised
New shares issued 39 91 130
At 30 September 2011 6,368 118222 141 (18,331) -
Notes to the preliminary results for the year ended 30 September 2011
1. Basis of preparation
These financial statements have been prepared in accordance with International
Financial Reporting Standards, International Accounting Standards and
Interpretations (collectively IFRS) issued by the International Accounting
Standards Board (IASB) as adopted by European Union ("adopted IFRSs"), and are
in accordance with IFRS as issued by the IASB.
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 30 September 2010 and 2011, but is
derived from those accounts. Statutory accounts for 2010 have been delivered to
the Registrar of Companies and those for 2011 will be shortly. The Auditors
have reported on those accounts; their reports were unqualified and did not
contain statements under the Companies Act 2006 section 498.
2. Taxation
2011 2010
£'000 £'000
Domestic current year tax
UK corporation tax - -
Domestic prior year tax
UK corporation tax - refund 11 -
11 -
Factors affecting the tax charge for the period:
Profit/(loss) on ordinary activities before 20 (492)
taxation
Profit/(loss) on ordinary activities multiplied by
the standard rate of
Corporation tax in the UK of 20 per cent. (2010: 4 (103)
21 per cent.)
Expenses not deductible for tax purposes 10 8
Depreciation in excess of capital allowances for 1 3
the year
Utilisation of tax losses (15) 92
Prior year tax 11 -
Current tax charge for the year 11 -
3. Loss per share
2011 2010
£'000 £'000
Numerator
Basic/Diluted: Net profit /(loss) 31 (492)
Denominator
Basic: Weighted average shares 18,794,777 17,847,817
Effect of diluted securities: stock options 1,027,500 577,500
Diluted: Adjusted weighted average shares 19,822,277 18,425,317
Basic profit/(loss) per share is calculated by dividing the net profit/(loss)
for the period attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the period.
Diluted profit/(loss) per share is computed using the weighted average number
of shares outstanding during the period adjusted for the dilutive effect of
stock options outstanding for the period.
4. Cash and cash equivalents
2011 2010
£'000 £'000
Cash at bank and in hand 29 31
Bank overdraft - (27)
29 4
5. Borrowings
2011 2010
£'000 £'000
Bank overdraft - 27
Other loans 862 862
862 889
The above borrowings are loans from Terry Bate, Non-Executive Chairman. On the
first loan of £700,000, interest is payable monthly at the rate of a minimum of
6 per cent per annum. During the year to 30 September 2010 Mr Bate provided a
further loan facility to the Company as production finance for a commission
that was subsequently cancelled. At 30 September 2010 and 30 September 2011 £
162,000 remained outstanding under this facility. Interest on this loan is
payable at the rate of 7 per cent. per annum. The loans are unsecured and no
guarantees were given.
a) Ageing
The loans are due on demand.
b) Fair values
Cash and cash equivalents
The carrying value approximates to fair value.
Other assets and liabilities
No disclosure of fair value has been made as the carrying value is a reasonable
approximation of the fair value.
6. Trade and other payables: amounts falling due within one year
2011 2010
£'000 £'000
Social security and other taxes 47 144
Other payables 33 58
Accruals and deferred income 493 295
573 497
7. Reconciliation of net cash flow to movement in cash and cash equivalents
2011 2010
£'000 £'000
Net increase in cash and cash equivalents 25 25
Cash and cash equivalents at beginning of year 4 (21)
Cash and cash equivalents at end of year (note 29 4
4)
8. Financial commitments
Office Office Land and Land and
equipment equipment buildings buildings
2011 2010 2011 2010
£'000 £'000 £'000 £'000
At 30 September 2010, the Group
had commitments under non -
cancellable operating leases as
follows:
Expiry date:
Less than one year - - 8 -
Between two and five years 2 4 - 50
At 30 September 2011 there are no terms of renewal or purchase options and
escalation clauses. There are also no restrictions imposed by lease
arrangements concerning dividends, additional debt and further leasing.
9. Dividend
The Directors do not propose a dividend payment.
10. Copies of report and accounts
Copies of the Report and Accounts will be posted to shareholders shortly, will
be available from the Company's registered office Lion House, Red Lion Street,
London WC1R 4GB and will be available from the Company's website
www.talenttv.com.
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