Half Yearly Report

RNS Number : 2227Y

Boomerang Plus PLC

28 February 2012

 



28 February 2012

Boomerang Plus plc

('Boomerang', 'the Company' or 'the Group')

Interim Results

Boomerang Plus plc (AIM: BOOM.L), a profitable media investment group, announces its interim results for the six months to 30 November 2011.

These interim results illustrate the successful transformation of Boomerang into a higher-margin multi-genre, multi-platform media group with increasingly diversified revenue streams.

FINANCIAL HIGHLIGHTS

·        Revenue of £15.99m (2011: £16.29m).

·        Gross profit up 14.1% to £2.83m (2011: £2.48m).

·        Gross margin up 16.5% to 17.7% (2011: 15.2%)

·        Adjusted EBITDA**up 10.6% to £1.36m (2011: £1.23m).

·        Adjusted operating profit* up 8% to £0.95m (2010: £0.88m).

·        Profit before tax of £0.71m (2011: £0.79m).

·        Adjusted basic EPS* up 15.5% to 7.44p (2011: 6.44p).

·        Cash and cash equivalents up 8% to £4.06m (2011: £3.76m).

OPERATIONAL HIGHLIGHTS

·        Acquisition of Oxford Scientific Films in June 2011.

·        Acquisition of Harlequin Talent Agency, through a joint venture with Bryn Terfel, in July 2011.

·        Continued organic growth of Advertiser Funded Programming ("AFP").

·        Creation of Gorilla facilities group through merger of Mwnci and Boomerang's in-house facilities.

·        Gorilla's acquisition and expansion of Bait Studio Limited, a graphics and VFX company.

OUTLOOK

·        Continuing growth in our Factual and AFP businesses.

·        Strong balance sheet to support future growth with net assets of £10m.

·        Current trading remains in line with Board's expectations

Huw Eurig Davies, Chief Executive Officer of Boomerang Plus, commented:

"The acquisition of Oxford Scientific Films has accelerated strong growth in our Network and AFP businesses as we continue to diversify the Group's customer base and widen its intellectual product base. This will continue to offset the impact of reduced funding for S4C and provide us with future revenue growth and opportunities to increase our gross profit margins. The Group will also continue to look for further acquisitions that can add value for shareholders in a fast-changing media marketplace."

* adjusted for professional fees in relation to corporate transactions (2011 - £0.11m, 2010 - 0.01m), reorganisation costs (2011 - £0.06m, 2010 - £nil), and amortisation of intangible assets arising on business acquisitions (2011 - £0.01m, 2010 - £0.01m).

**adjusted operating profit as defined above before depreciation (2011 - £0.39m, 2010 - £0.34m) and other amortisation (2011 - £0.02m, 2010 - £0.01m).

Contacts: 

Boomerang Plus plc	Tel : [phone]
Huw Eurig Davies, Chief Executive Officer
Mark Fenwick, Finance Director
finnCap Limited	Tel: [phone]
Geoff Nash/Charlotte Stranner
Simon Starr/Victoria Bates (broking)
Walbrook PR Ltd	Tel: [phone]
Paul Cornelius	[e-mail]

About Boomerang Plus plc (www.boomerang.co.uk)

Boomerang Plus plc has strategic investments in a number of complementary media businesses including production companies Alfresco, Apollo, Boomerang, Bulb, Fflic, Indus and Oxford Scientific Films; facilities companies Gorilla and Zoom; multi-media publisher Boom Extreme Publishing; talent companies Halequin and Boom Talent; event company Big Freeze Limited, and education and corporate production business Media4.

Boomerang Plus's strategy is to continue to acquire, invest in and develop media companies that complement the Group's existing businesses, whilst also achieving strong organic growth.

Business Review

Financial Review 

As highlighted in our 2011 preliminary results statement released in September, the Group has had a strong first half of the year. Headline revenues have been resilient during the period at £16m (2011 - £16.3m), with the reductions arising from S4C's reduced funding being largely offset by increases in organic Network and AFP programming as well as the first full six month contribution by Oxford Scientific Films acquired in June 2011.

The Group's key performance indicators are gross profit, adjusted earnings before interest, tax, depreciation and amortisation ("adjusted EBITDA**") and adjusted operating profit.

Gross profit increased by 14.1% to £2.83m (2011 - £2.48m) due to the accelerating contribution from our higher gross margin Network and AFP programming businesses. Gross profit margin also expanded 16.5% during the period to 17.7% (2011 - 15.2%), despite continued downward pressure on overall programme budgets. 

Adjusted EBITDA** increased by 10.6% to £1.36 million (2011 - £1.23 million).

During the year the Group continued the restructuring and relocation of its businesses, including relocating Oxford Scientific Films to new premises in Warwick Street, London and the merger of Mwnci and Boomerang's in-house facilities to create Gorilla, the Group's post production and facilities business. Following the implementation of IFRS 3 - Business Combinations, professional fees in respect of acquisitions have been expensed in the current period.

The above factors contributed to an increase in adjusted operating profits* of 8% to £0.95 million (2011 - £0.88 million).

The Group's substantial capital expenditure programme of recent years is now past its peak and capital expenditure reduced to £0.32 million (2010 - £0.82 million) in the period to 30 November 2011. Finance lease repayments during the period were £0.30 million (2010 - £0.29 million). The acquisition of Oxford Scientific Films resulted in a net cash inflow of £0.18m and was by means of the purchase of assets and certain liabilities including £0.30 million in respect of a substantial back catalogue. Therefore, cash and cash equivalents increased 8% to £4.06 million as of 30 November 2011 (2010 - £3.76 million).

At 30 November 2011 the Group had net assets of £10 million (2010 - £9.53 million). The Group has considerable headroom within its current bank facilities together with long-term relationships with its key customers.  Due to the nature of the Group's business, management has good visibility over its pipeline of productions for the foreseeable future, which is fully funded by its customers.  The Group's forecasts and projections show that the Group should be able to operate within the level of its current facility.

* adjusted for professional fees in relation to corporate transactions (2011 - £0.11m, 2010 - 0.01m), reorganisation costs (2011 - £0.06m, 2010 - £nil), and amortisation of intangible assets arising on business acquisitions (2011 - £0.01m, 2010 - £0.01m).

**adjusted operating profit as defined above before depreciation (2011 - £0.39m, 2010 - £0.34m) and other amortisation (2011 - £0.02m, 2010 - £0.01m).

Operations

The Group continued to produce a strong, multi-genre portfolio of multi-platform content for our broadcast and corporate customers during the period.

Organic Network commissions during the period included the third series of "Road to London 2012: That Paralympic Show", a multi-platform magazine series covering the run up to the London 2012  Paralympic Games, and we are currently in production of series 4.  We are currently in production of "Tales of Friendship with Winnie the Pooh" a 72 x 5 minutes order for Disney Junior EMEA, which coincides with a book of the same name. Other Disney work included interstitial productions for Disney 365 on Cars 2 and Epic Mickey.

AFP commissions during the period included a series of BT Documentary films featuring their sponsored Paralympic athletes including Oscar Pistorius; a high volume digital marketing campaign for Bacardi Brands Global for a new Rum called Bacardi Oakheart; a third year producing Relentless Freeze, Europe's biggest Snow and Music Festival held annually in Battersea Power Station; major live OB surfing events for Quiksilver including World Tour events Quiksilver Pro France and Roxy Pro Biarritz; and a third season of Nissan/Sony Playstation GT Academy, the virtual-to-reality motor racing competition, once again hosted by F1 luminaries Eddie Jordan and Johnny Herbert and filmed across Australia, New Zealand, Europe and the UK, including for the first time a series for the USA market.

Complementing this organic success the newly acquired Oxford Scientific Films ("OSF") added to the existing Indus Fims creates a substantial and growing Factual division. Indus has been very busy during the period with exciting new commissions for the BBC and paid development for Channel 4. They are about to deliver a six-part series for BBC2 exploring the challenges facing the UK fishing industry and are filming an observational series about how London feeds itself, also for BBC2. Indus has also recently opened an office in Bristol with new Executive Producer Lucy Carter on board.

OSF delivered its first 3D production, Meerkats 3D to Sky and National Geographic. The film aired in November 2011 in the UK and is about to be released theatrically into museums worldwide. A second 3D natural history film is in development with the same partners. The second season of Fatal Attractions aired to strong ratings on Animal Planet in the US and an uplift order for a further 6 episodes has been received. Rory McGrath's Pub Dig, a new 4 part series blending history with archaeology and comedy went into production for History UK and Channel 5. OSF received its first orders from BBC1 for a broadcast pilot for a new medical series called How to Beat.... featuring Harley Street doctors Dr Jack Kreindler and Professor Greg Whyte; and a high end science series. OSF is currently in pre-production on a high end archaeology special for Channel 4 and Terra Mater; and a pilot for a new series for Animal Planet US.

Boomerang has also produced a range of multi-genre programming for the local Welsh Broadcasters, S4C and BBC Wales, during the period. These include the "Stwnsh" and "Cyw" children's services; drama series "Teulu"; factual entertainment series "Cariad@Iaith", "Gwlad Beirdd", "Llais i Gymru", "Wales on Wheels", "Only Boys Aloud 2" and "3Lle"; entertainmment series "Seren Rhos" and "Noson"; factual series "Arts Review of the Year" and "Iris Prze"; music series "Bandit" and "Nodyn"; youth series "Gofod"; the Royal Welsh show and sports series "Ras i Lundain" amongst others.

Post-production and facilities

On 5 September 2011, the Group announced that its post-production subsidiary, Mwnci, had rebranded as Gorilla and expanded to incorporate all of the Group's in-house facilities. Gorilla will now be providing studios, dubbing, grading, graphics and outside broadcast facilities to programme makers and producers in addition to increasing its established range of editing services. Gorilla will be one of the biggest facilities companies outside London and the largest in Wales.

Gorilla acquired Bait Studio Limited during the period and is investing further to create a substantial graphics and VFX business.

Talent management

The joint investment into Harlequin Agency Limited, through a 50% joint venture with Bryn Terfel, will lead to a significant increase in scale of our talent business and we have transferred the trade of our existing Boom Talent to Harlequin in order to maximise cost synergies and growth opportunities.

Segmental Information

As the majority of the Group's facilities will no longer be fully integrated in the future, the Group anticipates making segmental disclosures in its account for the year ended 31 May 2012.

Outlook

The acquisition of Oxford Scientific Films together with organic growth in Network and AFP productions have all contributed to diversifying the Group's customer base and widening its intellectual product base. This will continue to drive further growth in an increasingly global market and provide us with opportunities to increase our gross profit margins.

The Group's pipeline of productions for the 2012 calendar year remains in line with the Board's expectations and shows further diversification of our customer base. This will both mitigate the impact of S4C's reduced programming budgets following the Government's Comprehensive Spending Review and deliver long term-term benefits to the Group. We will continue to drive organic growth and look for further acquisitions that can add value for shareholders in the rapidly-changing media marketplace.

Huw Eurig Davies	Mark Fenwick
Chief Executive Officer	Finance Director
28 February 2012	28 February 2012

Condensed Consolidated Income Statement

Six months ended 30 November 2011 (unaudited)

	Note	Six months ended 30 November 2011	Six months ended 30 November 2010	Year ended 31 May 2011
		£'000	£'000	£'000
Revenue		15,984	16,295	26,933
Cost of sales		(13,150)	(13,811)	(22,380)
Gross profit		2,834	2,484	4,553
Administrative expenses
Other administrative expenses		(1,908)	(1,631)	(3,428)
Professional fees in relation to corporate transactions		(107)	(10)	(17)
Reorganisation costs		(61)	-	-
Amortisation of intangibles arising on business acquisitions		(10)	(10)	(20)
Total administrative expenses		(2,086)	(1,651)	(3,465)
Other operating income		31	37	76
Loss on disposal of fixed assets		(8)	-	-
Share of results of  joint ventures and associates		-	(12)	(30)
Operating profit		771	858	1,134
Investment income		-	3	4
Finance costs		(58)	(73)	(118)
Profit before tax		713	788	1,020
Tax on profit on ordinary activities	2	(228)	(234)	(469)
Profit for the period		485	554	551
Attributable to:
Equity holders of parent company		482	554	551
Minority interests		3	-	-
		485	554	551
Earnings per share	3
Basic		5.44p	6.21p	6.18p
Diluted		5.38p	6.13p	6.10p
Adjusted - basic		7.44p	6.44p	6.60p
Adjusted - diluted		7.36p	6.35p	6.51p

All activities derive from continuing operations.

The Group has no material items of comprehensive income in the current or prior period other than the profit for the period and as such has not presented a separate condensed consolidated statement of comprehensive income.

Condensed Consolidated Balance Sheet 

As at 30 November 2011 (unaudited)

		30  November 2011 £'000	30  November 2010 £'000	31 May 2011 £'000
NON-CURRENT ASSETS
Goodwill		2,822	3,039	2,822
Other intangible assets		2,701	2,430	2,442
Property, plant and equipment		3,443	3,401	3,606
Investments		443	360	342
		9,409	9,230	9,212
CURRENT ASSETS
Inventories		9	-	6
Trade and other receivables		3,255	3,461	4,064
Current tax assets		-	219	-
Cash and cash equivalents		4,062	3,761	2,588
		7,326	7,441	6,658
TOTAL ASSETS		16,735	16,671	15,870
CURRENT LIABILITIES
Trade and other payables		4,260	4,256	3,926
Current tax liabilities		457	374	232
Interest-bearing loans and borrowings		787	735	581
Deferred consideration		195	109	192
		5,699	5,474	4,931
NON-CURRENT LIABILITIES
Interest-bearing loans and borrowings		319	634	634
Other payables		61	76	84
Deferred tax liabilities		204	219	264
Deferred consideration		433	734	426
		1,017	1,663	1,408
TOTAL LIABILITIES		6,716	7,137	6,339
NET ASSETS		10,019	9,534	9,531

Condensed Consolidated Balance Sheet 

As at 30 November 2011 (unaudited)

		30 November 2011 £'000	30 November 2010 £'000	31 May 2011 £'000
EQUITY
Share capital		89	89	89
Share premium account		3,934	3,934	3,934
Merger reserve		1,217	1,217	1,217
Retained earnings		4,776	4,294	4,291
Equity attributable to equity holders of the parent		10,016	9,534	9,531
Minority interests		3	-	-
		10,019	9,534	9,531

These condensed consolidated interim statements were approved by the Board of Directors on 28 February 2012.

Signed on behalf of the Board of Directors

H E Davies                                                                              M W Fenwick

Director                                                                                   Director

Condensed Consolidated Cash Flow Statement  

Six months ended 30 November 2011 (unaudited)

	Note	Six months ended 30 November 2011	Six months ended 30 November 2010	Year ended 31 May 2011
NET CASH INFLOW FROM OPERATING ACTIVITIES	4	1,724	1,473	833
INVESTING ACTIVITIES
Interest received		-	3	4
Purchase of property, plant and equipment		(101)	(393)	(531)
Acquisition of subsidiaries - net cash inflow arising on acquisition		179	-	-
Acquisition of subsidiaries - deferred consideration payments		-	(211)	(229)
Acquisition of joint ventures and associates		(101)	-	(1)
Acquisition of intangible fixed assets		(2)	-	(49)
Proceeds on disposal of property, plant and equipment		84	7	10
NET CASH USED IN INVESTING ACTIVITIES		59	(594)	(796)
FINANCING ACTIVITIES
Repayments of obligations under finance leases		(309)	(288)	(659)
Grants received		-	100	140
NET CASH USED IN FINANCING ACTIVITIES		(309)	(188)	(519)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS		1,474	691	(482)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD		2,588	3,070	3,070
CASH AND CASH EQUIVALENTS AT END OF PERIOD		4,062	3,761	2,588

Condensed Consolidated Statement of Changes in Equity

Six months ended 30 November 2011 (unaudited)

	Share capital £'000	Share premium account £'000	Merger reserve £'000	Retained earnings £'000	Total £'000
Balance at 1 June 2010	89	3,934	1,217	3,744	8,984
Profit for the financial period	-	-	-	554	554
Foreign exchange	-	-	-	(4)	(4)
Balance at 30 November 2010	89	3,934	1,217	4,294	9,534
Loss for the financial period	-	-	-	(3)	(3)
Balance at 31 May 2011	89	3,934	1,217	4,291	9,531
Profit for the financial period	-	-	-	482	482
Foreign exchange	-	-	-	3	3
Balance at 30 November 2011	89	3,934	1,217	4,776	10,016

The Group has taken advantage of section 612 of the Companies Act 2006 and so the excess over the nominal value of shares issued other than for cash has been allocated to the merger reserve.

1.      BASIS OF PREPARATION AND ACCOUNTING 

The interim financial information does not constitute statutory accounts for the purpose of section 434 of the Companies Act 2006.  The figures for the year ended 31 May 2011 have been extracted from the Group's audited accounts for that year.  Those accounts have been reported on by the Group's auditors and delivered to the Registrar of Companies.  The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The interim financial information for the six months ended 30 November 2011 and 30 November 2010 has not been audited or reviewed by the auditors. The interim results have been prepared using the same accounting policies and estimation techniques that are expected to apply at the year-end and is consistent with the accounting policies disclosed in the Group's annual report for the year ended 31 May 2011. 

2.         tax

Taxation for the six-month period is charged at the best estimate of the average annual effective income tax rate expected for the full year, applied to the pre-tax income of the six-month period.

			30 November 2011 £'000	30 November 2010 £'000	31 May 2011 £'000
UK taxation at standard rate			291	275	437
Deferred taxation			(63)	(41)	32
			228	234	469

3.         earnings per share

Earnings			30 November 2011 £'000	30 November 2010 £'000	31 May 2011 £'000
Profit for the period			485	554	551
Professional fees in relation to unsuccessful corporate  transactions			107	10	17
Reorganisation costs			61	-	-
Amortisation of intangibles arising on business acquisitions			10	10	20
Adjusted profit			663	574	588
Number of shares			No.	No.	No.
Weighted average number of ordinary shares			8,914,731	8,914,731	8,914,731
Dilutive weighted average number of shares			9,011,143	9,036,676	9,031,436
Earnings per ordinary share - basic			5.44p	6.21p	6.18p
Earnings per ordinary share - diluted			5.38p	6.13p	6.10p
Adjusted earnings per share - basic			7.44p	6.44p	6.60p
Adjusted earnings per share - diluted			7.36p	6.35p	6.51p

4.         notes to the condensed consolidated cash flow statement

			30 November 2011 £'000	30 November 2010 £'000	31  May 2011 £'000
Profit from operations			771	858	1,134
Adjustment for:
Amortisation of intangible fixed assets			32	29	57
Depreciation of property, plant and equipment			392	339	721
Loss on property, plant and equipment disposals			8	-	15
Government grants			(25)	(33)	(66)
Results of joint ventures and associates			-	12	30
Minority interests			(3)	-	-
Foreign exchange			10	(9)	(13)
Operating cash flows before movement in working capital			1,185	1,196	1,878
Decrease in receivables			396	724	312
Increase/(decrease) in payables			255	(397)	(974)
(Increase)/decrease in inventory			(3)	9	3
Cash generated from operations			1,833	1,532	1,219
Income taxes received/(paid)			(62)	14	(288)
Interest paid			(47)	(73)	(98)
Net cash inflow from operating activities			1,724	1,473	833

5.         AVAILABILITY OF INTERIM RESULTS

A copy of the interim report will be available for members of the public by application to the Company's Registered Office or on the Company's website at www.boomerang.co.uk.

 

END

 

 

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