Interim Results

Forbidden Technologies PLC 27 September 2007 27 September 2007 Forbidden Technologies plc Interim Results for six months to 30 June 2007 Chairman's statement In the six months to 30th June 2007 the Company recorded sales of £33,447 compared with £68,228 in the first half of the previous year. Administrative expenses were £398,251 (2006: £440,398) and the loss in the six months was £361,725 (2006: £360,274). At 30th June 2007 the balance sheet showed £27,821 of net current assets (2006: £655,474) and cash and liquid resources of £38,847 (2006: £645,676). Although turnover in the first six months of 2007 is lower than in the same period last year, this reflects in part a change in the Company's pricing model. Previously we invoiced for one-off sales for specific uses - normally for a particular production or series. Now we sell annual user licences. This is more flexible and more understandable for our customers and partly, we believe, as a result of this we are already seeing the development of a steady and increasing stream of income including repeat and referral business. One of the effects of this change is that our income is now recognised over the life of the licence. This means that a proportion of the income arising from our sales in the first six months of 2007 has been deferred to later periods. Shortly before 30th June 2007 the Company concluded the arrangement of a £1 million loan agreement which provides liquidity going forwards and did not affect the balance sheet in the period. The Board believes that the loan agreement was well timed, bearing in mind the current credit crunch in the financial markets. Strategy The Company has focused specifically on its two key products: FORscene and Clesh. In FORscene we have developed a truly powerful web-based tool for use by professionals in broadcast post-production to log, edit, review, and publish video at up to broadcast quality. It requires no installation and works on almost any computer with internet access helping to transform collaborative working between any number of different locations. The recent announcement by the Company that FORscene can now output material at broadcast (DV) quality is a significant development. It demonstrates that FORscene is on the verge of being sufficient to make entire programmes. The consumer version of the product (Clesh) can be used for editing videos on the web and then publishing to different devices such as mobile phones, iPods, or on web sites. In addition, Clesh is a complete solution for websites accepting and displaying User Generated Video (UGV). To see some current examples of UGV, go to the Clesh Showreel page: http://clesh.com/videos/. Prospects As the conservative and highly critical broadcast community begins to recognise the increasing usefulness of web-based post production, the Company is gaining important recognition as a provider of web-based services. With customers such as the BBC and ITV in the UK, CBC in Canada, and All Three Media (one of the largest UK independent production companies) using FORscene, the credibility of the Company and its products increases. The growing use of FORscene by educational institutions to train the next generation of producers and editors is a further benefit for the longer term. With a loan facility in place and care being taken to monitor the relationship between spending and income, the Board is confident that we can become a significant participant in the huge marketplace that should emerge in both professional video production and in User Generated Video. Note This announcement, with P&L, Balance Sheet and Cash Flow statement (including comparatives), will be posted on the company website http://www.forbidden.co.uk/ . The Company does not intend to issue paper copies, thus helping to save the environment - and a little money. Contacts: Forbidden Technologies plc 020 8879 7245 Stephen Streater (Chief Executive Officer) Brewin Dolphin Securities Limited 0141 314 8114 Ken Fleming Profit and loss account Unaudited Unaudited half year to half year to Year to 30 June 30 June 31 December 2007 2006 2006 £ £ £ Turnover 33,447 68,228 131,535 Administrative expenses -398,251 -440,398 -973,884 Operating loss -364,804 -372,170 -842,349 Interest receivable and similar income 3,079 11,896 18,648 Loss on ordinary activities before taxation -361,725 -360,274 -823,701 Tax on loss on ordinary activities 0 0 38,513 Loss for the period -361,725 -360,274 -785,188 Basic and diluted loss per ordinary -0.48 -0.48 -1.04 The results for the year are all derived from continuing operations. There are no recognised gains or losses other than the loss for the year. Reconciliation of movements in Unaudited Unaudited shareholders' funds half year to half year to Year to 30 June 30 June 31 December 2007 2006 2006 £ £ £ Loss for the period -361,725 -360,274 -785,188 FRS 20 employee share option costs 34,553 55,638 101,884 New share capital subscribed (net of issue costs) 0 0 75,000 Net reduction in shareholders' funds -327,172 -304,636 -608,304 Opening shareholders' funds 358,794 967,098 967,098 Closing shareholders' funds 31,622 662,462 358,794 Balance sheet Unaudited Unaudited half year half year Year to 31 to to 30 June 30 June December 2007 2006 2006 £ £ £ Fixed assets Tangible assets 3,750 6,988 5,063 Current assets Debtors 99,717 117,751 94,912 Current asset 38,847 645,676 360,626 investments 138,564 763,427 455,538 Creditors (<1 year) -110,693 -107,953 -101,807 Net current assets 27,871 655,474 353,731 Net assets 31,621 662,462 358,794 Capital and reserves Called up share 609,300 605,300 609,300 capital Share premium account 2,996,375 2,925,375 2,996,375 Capital contribution 125,000 125,000 125,000 reserve Proft and loss -3,699,054 -2,993,213 -3,371,881 account Equity shareholders' 31,621 662,462 358,794 funds Reconciliation of operating loss to net Unaudited Unaudited cash outflow from operating activities half year half year Year to to to 30 June 30 June 31 December 2007 2006 2006 £ £ £ Operating loss -364,804 -372,170 -842,349 FRS 20 employee share option cost 34,553 55,638 101,884 Depreciation charges 3,750 6,988 14,791 Decrease/(increase) in debtors -4,805 -11,810 18,767 Increase/(decrease) in creditors 8,887 15,811 9,665 Net cash outflow from operating activities -322,419 -305,543 -697,242 Cash flow statement Cash outflow from operating activities -322,419 -305,543 -697,242 Returns on investment and servicing of finance 3,079 17,122 18,648 Taxation 0 61,425 97,426 Capital expenditure -2,438 -4,247 -10,125 Cash outflow before management of liquid -321,778 -231,243 -591,293 resources Management of liquid resources 321,778 231,243 516,293 Financing 0 0 75,000 Increase/(decrease) in cash in the period 0 0 0 Reconciliation of net cash flow to movement in net funds Increase/(decrease) in cash in the period 0 0 0 Cash outflow from liquid resources -281,562 -231,243 -591,293 Movement in net funds in the period -281,562 -231,243 -591,293 Net funds at the start of the period 285,626 876,919 876,919 Net funds at the end of the period 4,064 645,676 285,626 Basis of preparation The Interim report for the six months ended 30 June 2007 and 2006 is unaudited and does not constitute statutory accounts with the meaning of Section 240 of The Companies Act 1985. It has been prepared under the historical cost convention and on a basis consistent with the accounting policies disclosed in the Annual Report and Accounts for the year ended 31 December 2006. The results for the year ended 31 December 2006 and the balance sheet of that date are an extract from the statutory financial statements for that year, which have been filed with the Registrar of Companies and on which the Company's auditors gave an unqualified report and did not contain a statement under Section 237 (2) or (3) of that Act. This information is provided by RNS The company news service from the London Stock Exchange

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