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Works Media Grp(The) (WKS)

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Tuesday 25 September, 2007

Works Media Grp(The)

Interim Results

Works Media Group (The) PLC
25 September 2007

                     FOR THE SIX MONTHS ENDED 30 JUNE 2007

The Works Media Group Plc ('The Works Media Group' or 'the Company') whose
principal activity is the international sale and UK distribution of feature
films announces today its interim results for the six months ended 30 June 2007.

Financial Highlights

•  Turnover for the period increased by 7.1% to £810,000 (2006:£756,000)

•  Turnover at start-up UK Distribution subsidiary rises 51%

•  Loss of £130,000 after redundancy and reorganisation costs of £100,000      
   (2006 loss £180,000)

•  Cash reserves of £691,000 (2006: £732,000)

Corporate Highlights

•  Successful execution of strategy to transform business

•  Film Distribution - The Works UK Distribution

     o   Continuing expansion of distribution activity.

     o   5 films released in cinemas and 4 on DVD during the six months.

     o   Universal Pictures released all titles on DVD under output agreement.

     o   Multi-media rights to 21 titles acquired to date on 20 year licences.

     o   2 Days In Paris on course to be most successful film ever released by 
         The Works.

•   Film Sales - The Works International

     o   Ongoing sales of Venus and This is England.

     o   Critically acclaimed Brick Lane looks promising for the second half.


     o   Company raised £0.5 million by placing of new shares in May 2007.

     o   Theta Group takes 15.3% of issued share capital.

     o   Milcoz Films executive joins the Board.

Crispin Barker, non-executive Chairman of The Works Media Group said:

'The first stage of our ambitious re-engineering programme is almost complete;
The Works UK Distribution is profitable and making a material contribution to
Group overheads.   We have established a stable base from which to scale up the
business and the Board continues to evaluate funding and corporate opportunities
to further its plans for expansion.'

For further information, please contact:

The Works Media Group plc                        020 7612 0030
Norman Humphrey, CEO

City Financial Associates Limited                020 7492 4777
James Caithie

ICIS                                             020 7651 8688
Tom Moriarty, Caroline Evans-Jones



The Works Media Group improved its performance in the first half of 2007 as it
has done steadily since the move away from production services at the end of
2005. The retained loss for the period is £134,000, after charging £100,000 of
redundancy and reorganisation costs,. The Works UK Distribution is currently the
engine for growth at The Works. The subsidiary has put five films into cinemas,
and released four DVD's during the six months, considerably more than any
comparable period in its history. Our international sales activity continues to
be affected by the downturn in the UK production sector; however the recent
appointment of a new Group Head of Acquisition is expected to improve the
sourcing of product.


Our migration from production to distribution and the consequential investment
in a catalogue of rights has increased the Company's working capital
requirement. Having encouraged the possibility of strategic trade investment, we
were delighted in May 2007 to welcome Theta Group, through its subsidiary Milcoz
Films, as a major investor in The Works Media Group. Milcoz Films invested
£500,000 in The Works through a placing at 3p per share, acquiring 13.6% of the
Company. That investment has subsequently been increased in the market and Theta
currently owns 15.3% of The Works.


This is the first Interim Statement prepared by the Company in accordance with
recently introduced International Financial Reporting Standards.

During the 6 months to 30th June 2007 The Works Media Group made a retained loss
of £134,000. Adjusting for redundancy and reorganisation costs of £100,000
(the majority of which are directly attributable to the departure of the
previous CEO, Chris Auty) the loss of £34,000 compares favourably with the loss
of £175,000 suffered during the comparable period in 2006. The consolidated
turnover increased marginally, from £756,000 to £810,000, but changes in the
underlying divisional performance are significant. Turnover at the Works UK
Distribution rose by 51%, whilst that achieved by the marginalised production
services entity, The Film Consortium, fell by 60%. There was little change at
The Works International.

The Company had cash of £691,000 as at 30th June 2007 (2006 £732,000).


Chris Auty resigned from his position as Chief Executive Officer on 8th March
2007. Norman Humphrey, the Chief Financial Officer, was promoted to the
position of Chief Executive on the same day. The Company does not propose to
appoint a new Chief Financial Officer at this time. Costa Theo, Chief
Executive of Milcoz Films was appointed to the Board on 25th May 2007, following
his company's investment in the Works Media Group.


The outlook remains positive.  The second half of 2007 will see continuing
growth at The Works UK Distribution; more commercial product, more 'downstream'
revenue from pay-per-view, video on demand and television, as well as gradually
increasing back-catalogue income.

We continue to evaluate opportunities for synergistic corporate expansion to
supplement our development of the existing core activity in UK Distribution and
International Sales.

Crispin Barker
25 September 2007



The Works Media Group is in a strong position. The business has been
re-engineered and early indications are that our move from production into UK
Distribution has been successful. The material losses suffered during the past
couple of years, as production revenues were replaced by distribution overhead,
have been stemmed and it is my intention to expand the remaining core
distribution and international sales activities.


The Works International remains active. It continues to sell Roger Michell's
Venus and Shane Meadow's highly acclaimed This Is England, which was in
competition at the Berlin Film Festival and is one of the best performing
British films of recent years. New titles acquired so far this year include
Ramin Bahrani's Chop Shop which premiered in Director's Fortnight at the Cannes
Film Festival in May, eco-environmental documentary Garbage Warrior, and the
Killing of John Lennon, a chilling portrait of killer Mark Chapman, which is
also being distributed by The Works UK Distribution later this year.

Product currently in the pipeline includes Brick Lane, an adaptation of the
critically acclaimed novel by Monica Ali. The American rights have just been
sold by The Works International to Sony Pictures. In post-production is French
Film, a romantic comedy staring Hugh Bonneville, Douglas Henshall and Eric

The UK production sector remains depressed and in this competitive market the
most overtly commercial material remains hard to secure. Although trading at
The Works International is broadly similar to that achieved in the first half of
2006, it is the Company's intention to both increase the funding and scale of
our sales agency business.


The Works UK Distribution is just two years old but is already making steady and
encouraging progress. From a standing start the division has quickly become
one of the UK's leading independent film distributors. This success has
occurred despite the unit not yet being fully operational as it awaits the
lifting of media hold-backs on early acquisitions, and builds a body of rights
from which to derive back-catalogue revenue.

Trading at The Works UK Distribution continues to gather momentum. Turnover is
up over 50% on the comparable period last year and during the first half of 2007
the unit distributed almost as much product as it did during the whole of 2006.
Five films were released theatrically in the first half of this year, compared
with six throughout the preceding twelve months. So far this year, our
theatrical releases include Robert Altman's last film, A Prairie Home Companion,
romantic comedy The Truth About Love staring Jennifer Love Hewitt and Kevin
Costner's drama The Upside of Anger. We have also released critically acclaimed
French and Australian art films, Paris Je T'aime and 10 Canoes, both of which
are still in British cinemas three months after their theatrical release date.

Four titles were released on DVD in the six months to June 2007, the same number
as released during the whole of 2006; urban drama Havoc, staring Anne Hathaway,
A Prairie Home Companion, The Truth About Love, and the sexually explicit
comedy, Shortbus.   Sales of these titles, which were released under our output
arrangement with Universal Pictures, now appear likely to exceed initial
expectations and should deliver DVD value for many years to come.

The Works UK Distribution has so far acquired multi-media rights to 21 titles on
terms of approximately 20 years. It is quickly building a catalogue with
demonstrable long-term value. This investment in assets is evident from the
increase in stock and work in progress from £686,000 at June 2006 to £1,846,000
at June 2007. Currently we have on general release Julie Delpy's tour de
force, the romantic comedy 2 Days in Paris, which has already exceeded the
cumulative box office performance of any film previously released theatrically
by The Works UK Distribution. Amongst those titles yet to be released this
year are the cult horror Hatchet and the eagerly anticipated Interview staring
Sienna Miller, which premieres at the London Film Festival on 18th October.


I am pleased to report we have made excellent progress. The Company has
evolved to a point where we now have a more stable business model, which
generates a more predictable revenue stream and is a solid platform for future
growth. Given our current pipeline of commercial product and an ever
increasing library of content, we look forward to the Company's continuing

Norman Humphrey
25 September 2007


                                                     6 Months Ended  6 Months Ended     12 Months
                                                       30 June 2007    30 June 2006         Ended
                                                          Unaudited       Unaudited   31 Dec 2006
                                           Notes               £000            £000          £000

Turnover                                     3                  810             756         1,675

Cost of sales                                                  (96)            (88)         (533)

Gross profit                                                    714             668         1,142

Distribution costs                                             (25)            (21)          (45)

Administrative costs                                          (838)           (839)       (1,710)

Operating loss                                                (149)           (192)         (613)

Interest Receivable                                              15              23            30

Interest Payable                                                  -             (6)          (15)

Loss before taxation                                          (134)           (175)         (598)

UK Corporation Tax                                                -               -             -

Loss for the period attributable to                           (134)           (175)         (598)
equity share holders

Earnings per share
Basic (pence)                                4               (0.09)          (0.41)        (1.37)
Diluted                                      4               (0.09)          (0.41)        (1.37)
Dividend                                                          -               -             -


                                                               As at           As at         As at
                                                        30 June 2007    30 June 2006   31 Dec 2006
                                                           Unaudited       Unaudited       Audited
                                                                £000            £000          £000

Non Current Assets
Goodwill and intangible fixed assets                           2,262           2,262         2,262
Property, Plant and Equipment                                     20              35            28
Investments                                                      100             100           100
                                                               2,382           2,397         2,390
Current assets
Stocks                                                         1,846             686         1,294
Trade and other receivables                                      980           1,012           889
Cash and cash equivalents                                        691             732         1,343
                                                               3,517           2,430         3,526

Total assets                                                   5,899           4,827         5,916

Current liabilities
Trade and other payables                                     (1,057)         (1,376)       (1,423)
Accruals                                                       (105)           (175)         (172)
Deferred Income                                                (871)           (294)         (752)
                                                             (2,033)         (1,845)       (2,347)

Non current liabilities
Production Loan                                                    -           (130)          (64)

Total liabilities                                            (2,033)         (1,975)       (2,411)

Net assets                                                     3,866           2,852         3,505

Shareholders' equity
Called up share capital                                        4,369           4,290         4,352
Share premium account                                          7,950           6,458         7,472
Retained earnings                                            (8,291)         (7,734)       (8,157)
Minority interest                                              (162)           (162)         (162)

Equity Shareholders' funds                                     3,866           2,852         3,505


                                                                 6 Months       6 Months     12 Months
                                                                    Ended          Ended         Ended
                                                             30 June 2007   30 June 2006   31 Dec 2006
                                                                Unaudited     Unaudited        Audited
                                                                     £000          £000          £000

Cash flows from operating activities:

Operating loss                                                      (149)         (192)         (613)

Depreciation                                                           10            11            21
Loss on disposal of fixed assets                                        -             -             -
Amortisation of goodwill                                                -             -             -
(Increase)/Decrease in stocks                                       (553)         (655)       (1,263)
(Increase)/Decrease in debtors                                       (90)         (315)         (192)
Increase/(Decrease) in creditors                                    (377)           330           765

Net cash generated by operating activities                        (1,159)         (821)       (1,282)

Cash flows from investing activities

Interest received                                                      15            23            30
Purchase of non current assets                                        (3)           (6)           (8)

Net cash generated by investing activities                             12            17            22

Cash inflow/(outflow) before financing                            (1,147)         (804)       (1,260)

Cash flows from financing activities

Interest paid                                                           -           (6)          (15)
Issue of ordinary share capital                                       500             -          1250
Share issue costs                                                     (5)             -         (174)

Net cash received/(used) by financing                                 495           (6)         1,061

Net (decrease)/ increase in cash and cash                           (652)          (810         (199)

Cash and cash equivalent at beginning of                            1,343         1,542         1,542

Cash and cash equivalent at the end of
                                                                      691           732         1,343

Less:  Production and Development funds held                        (145)         (239)         (179)
on trust for third parties.

Available cash at bank and in hand                                    546           493         1,164


                       Number of     Share       Share        Minority     Retained    Total share
                       shares        capital     premium      interest     earnings    holders'
                                     £ 000's     £ 000's      £ 000's      £ 000's     £ 000's

At 1 January 2007        105,399,208       4,352        7,472        (162)     (8,157)        3,505
Retained loss for the              -           -            -            -       (134)        (134)
Share capital issued      16,666,667          17          483            -           -          500
Share issue costs                  -           -          (5)            -           -          (5)
At 30 June 2007          122,065,875       4,369        7,950        (162)     (8,291)        3,866

The accompanying accounting policies and notes form an integral part of these
financial statements.


1.       Basis of Preparation

The interim figures for the six-month period to 30 June 2007 are unaudited.
The comparative figures for the 12 month period ended on 31 December 2006 are
extracts from the published accounts for that year and do not constitute full
statutory accounts.   A copy of the full accounts for that period, on which the
auditors have issued an unqualified report, has been delivered to the Registrar
of Companies.

2.   Accounting Policies

The principal accounting policies of the Group have remained unchanged from the
previous year.

3.   Turnover

Turnover of the Group for the period has been derived from its principal
activity, the management of development, financing, production and distribution
of feature films and the international sale of film rights.

4.   Earnings per share

The calculation of basic earnings per ordinary share is based on earnings
attributed to equity share holders of £ (133,402). The weighted average number
of ordinary shares in issue during the six month period ended 30 June 2007 was
150,679,368 ordinary shares for basic earnings per ordinary share.

The calculation of diluted earnings per share is based on the basic earnings per
share, adjusted to allow for the issue of shares and the post tax effect of
dividends and interest on the assumed conversion of all dilutive options and
other dilutive potential ordinary shares.

5.   Publication of Non-Statutory Accounts

The financial information set out in this interim report does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985.   The
figures for the year ended 31 December 2006 have been extracted from the
statutory financial statements that have been filed with the Registrar of
Companies.   The auditors' report on those financial statements was unqualified
and did not contain a statement under Section 237(2) of the Companies Act 1985.

6.   Reporting under International financial reporting standards

This interim report is the first to be prepared under IFRS. The comparative
figures have been prepared on the same basis and have therefore been restated
from those previously prepared under UK GAAP where applicable.

7.   AIM Rule Compliance Report

1.  The Works Media Group plc is quoted on AIM and as such under AIM Rule 31 the 
    Company is required to:

2.  have in place sufficient procedures, resources and controls to enable its 
    compliance with the AIM Rules;

3.  seek advice from its nominated adviser ('Nomad') regarding its compliance 
    with the AIM Rules;

4.  provide the company's Nomad with any information it requests in order for 
    the Nomad to carry out its responsibilities under the AIM Rules for
    Companies and the AIM Rules for Nominated Advisors;

5.  ensure that each of the Company's Directors accepts full responsibility, 
    collectively and individually, for compliance with the AIM Rules; and

6.  ensure that each director discloses without delay all information which
    the Company needs in order to comply with AIM Rule 17 (Disclosures of
    Miscellaneous Information) insofar as that information is known to the 
    director or could with reasonable diligence be ascertained by the director.

In order to ensure that these obligations are being discharged the Board has
established a committee of the Board (the 'AIM Committee'), chaired by Crispin
Barker, a non-executive director of the Company.

Having reviewed relevant Board papers and met with the Company's Executive Board
and the Nomad to ensure that such is the case, the AIM Committee is satisfied
that the Company's obligations under AIM Rule 31 have been satisfied during the
period under review.

                      This information is provided by RNS
            The company news service from the London Stock Exchange                              

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