Final Results
26 Marzo 2007 - 8:28AM
UK Regulatory
RNS Number:6879T
Eicom PLC
26 March 2007
EICOM plc
Final Results for the 18 months to 31 December 2006
Eicom plc ('Eicom' or 'the Company'; stock code: EIC), the digital TV channel
management Company, announces its preliminary results for the extended period
ended 31 December 2006, a period of progress.
Operational highlights:
* Performance Channel performed well in H2 2005 and Q1 2006
o Advertising revenue showing signs of improvement
* New international channel distributor appointed to represent Eicom
within Continental Europe, the Middle East, Africa and Asia
o Cable carriage contracts secured in Portugal
o Broadband delivery contract secured in Ireland
o Continuing negotiations with a number of broadband operators
* International sales increasing
* Agreement with the leading science journal, Nature, to deliver IPTV/
Web content
* Acquisition of Green Light Cable and Satellite Limited, a programme
rights agency
* Option to acquire Renown Productions Limited, a UK-based film library;
due diligence underway
Financial highlights:
* Funding package in place to raise #2.7m, payable in five tranches;
December 2006 - July 2007
* Turnover increased to #1,016,000 (12 months to 30 June 2005: #365,000)
* Operating EBITDA loss of #1,572,000 and a net loss of #1,885,000
(12 months to 30 June 2005: #514,000)
Commenting on Eicom's prospects, Steve Timmins, Chief Executive, stated:
"Eicom continues to expand and to develop as a content aggregator and
broadcaster ready for future platforms and formats. We are actively looking for
acquisitions to increase our size and look to create or acquire at least one
further channel so as to make best use of our fixed cost base and deliver
increased revenues to the group."
26 March 2007
For further information, please contact:
Steve Timmins, Chief Executive, Eicom plc 07005 964091
Paul Fowler, Finance Director, Eicom plc 07931 351983
Fiona Owen, Grant Thornton Corporate Finance 020 7383 5100
David Morgan/Glynn Reece, Pacific Continental Securities 020 7769 7769
Sue Scott/Michael Padley, Bankside Consultants 020 7367 8888
Notes to Editors
About EICOM
Eicom is building a portfolio of digital channels, which already includes the
music and arts service, Performance Channel, and the Science Channel, SciTech
TV. Eicom plans to exploit these channels through their distribution in the UK
and overseas and on a wide variety of platforms including satellite, cable and
broadband. For further information, please visit the website, www.eicom.co.uk.
Chairman's Statement
Introduction
I am pleased to present Eicom's results for the 18 months to 31 December 2006
and to be able to report on the activities of the Group during the period.
We announced in November 2006 that we were moving to new brokers, Pacific
Continental Securities Ltd ("PCS") who were putting in place a funding package
by way of a series of put and call options. This is providing us with a total of
#2.7m in five tranches between December 2006 and July 2007.
We are now in receipt of the third tranche of this funding and I am delighted to
report that, since January, the Company's balance sheet has shown positive net
assets.
Financial Review of the Eighteen Month Period
The Group turnover for the period was #1,016,000 (12 months to 30 June 2005:
#365,000) and the Group recorded an EBITDA loss of #1,572,000 and a net loss of
#1,885,000 (net loss 12 months to 30 June 2005: #514,000) for the period.
These results demonstrate that the Group still needs revenues from at least one
further TV channel in order to take advantage of its fixed cost base.
Operational Review
Performance Channel performed well in the last half of 2005 and the first
quarter of 2006. In the Summer months of June, July and August 2006, however,
the channel suffered a dip in revenue as the general advertising market went
into a downturn in the UK and the rates for sale of Performance Channel's
overnight hours declined due to the success of ITV's late night gaming strategy.
However, the Quiz Game formats and channels, which had come to dominate the
late night schedules and damage revenues for niche channels such as ours, are
beginning to disappear as the regulators tighten up on their activities.
The success of the digital terrestrial Freeview platform has cut into the
advertising revenues of all digital satellite channels. Unfortunately it is not
a viable outlet for Performance Channel as the annual cost of being on Freeview
would be in excess of #5m per year.
On a more positive note, we embarked on a wide-ranging marketing campaign over
the last two months of the period and are pleased to note a recent increase in
advertising revenues on Performance Channel.
During the period, we appointed a new international channel distributor,
Lagardere Networks International, ("LNI") to represent us within Continental
Europe, the Middle East, Africa and Asia. LNI is continuing discussions with
broadband operators and international sales for the Group's channels are
beginning to pick up with contracts being secured for cable carriage in Portugal
and broadband delivery in Ireland.
As part of our strategy of looking for IPTV and web based revenues we also
developed a relationship with the leading science journal, Nature. We have
worked with the journal since October and are producing regular videos for the
website and expect this relationship to continue to develop.
We were unable to find a suitable revenue model to make Job Channel financially
viable due to the high fixed costs and slow connectivity of Sky's interactive
platform. The directors decided, therefore, to remove the service from Sky's
platform while a new business model was developed. This development activity
continues and we note that Sky has now abandoned its platform as a vehicle for
3rd party interactive services.
Strategic Developments
On 3 November 2006 we announced that we had acquired the entire issued share
capital of Green Light Cable and Satellite Limited ("Green Light"), a programme
rights acquisition agency, and had entered into an option to acquire Renown
Productions Limited, a UK-based film library.
The Company has now entered into due diligence on the film library and we hope
to be able to use the film content both to continue with the expansion of our
existing digital TV channel plans and to develop the Company as a content
aggregator and a broadcaster ready for future platforms and formats.
Green Light continues to represent the Renown film library and its manager has
taken on a central sales role in Eicom leading to an increase in sales activity
for programme sales and for the channels both internationally and within the UK.
Outlook
We recognise that our business is not able to utilise its overheads at their
most efficient with the operation of only one UK based TV channel. We are,
therefore, actively looking for acquisitions to increase our size and look to
create or acquire at least one further channel to make best use of our fixed
cost base and deliver increased revenues to the group.
John Sanderson
Chairman
26 March 2007
EICOM PLC
Consolidated Profit and Loss Account
for the period ended 31 December 2006
18 months to 12 months to
31.12.2006 30.6.2005
Note #'000 #'000 #'000 #'000
Turnover
Continuing operations 2 964 365
Acquisitions 52 -
1,016 365
Cost of sales
Continuing operations
Cost of sales (1,153) (304)
Release of prepaid programme rights (311) (76)
Acquisitions (40) -
(1,504) (380)
Gross Loss (488) (15)
Other operating expenses (net)
Continuing operations (1,345) (498)
Acquisitions (12) -
(1,357) (498)
Operating loss
Continuing operations (1,845) (513)
Acquisitions - -
(1,845) (513)
Net interest payable (141) (8)
Profit on disposal of subsidiaries 111 -
Amounts written off investments (10) -
Adjustment arising from administration - 7
Loss on ordinary activities before taxation 3 (1,885) (514)
Taxation - -
Retained loss for the period (1,885) (514)
Loss per share in pence 4 (41.0) (14.6)
Diluted loss per share in pence 4 (41.0) (14.6)
The group has no recognised gains and losses other than the profit and loss for
the period.
EICOM PLC
Balance Sheet
As at 31 December 2006
Group
31.12.2006 30.6.2005
Notes #'000 #'000
Fixed assets
Intangible assets 128 456
Tangible assets 225 219
Investments - -
353 675
Current assets
Debtors - falling due within one year 435 457
Debtors - falling due after more than one year - 128
Cash at bank and in hand 31 260
466 845
Creditors:
amounts falling due within one year (1,528) (722)
Net current (liabilities)/assets (1,062) 123
Total assets less current liabilities (709) 798
Creditors:
amounts falling due after more than one year (499) (453)
Net assets (1,208) 345
Capital and reserves
Called up share capital 57 5,803
Shares to be issued - 150
Capital redemption reserve 117 117
Share premium account 443 8,788
Profit and loss account (16,398) (14.414)
Other reserve 14,573 -
Merger reserve - (99)
Equity shareholders' funds (1,208) 345
The financial statements were approved by the board on 26 March 2007 and signed
on their behalf by
S Timmins P Fowler
Director Director
EICOM PLC
Consolidated Cash Flow Statement
for the period ended 31 December 2006
Notes 18 months to 12 months to
31.12.2006 30.6.2005
#'000 #'000
Cash flow from operating activities (958) (384)
Returns on investments and servicing of (29) 5
finance
Capital expenditure and financial investment (31) (7)
Acquisitions and disposals (10) (514)
________ ________
Cash outflow before financing (1,028) (900)
Financing 799 728
________ ________
Decrease in cash in the period (229) (172)
________ ________
Reconciliation of net cash flow to movement in debt
18 months to 12 months to
31.12.2006 30.6.2005
#'000 #'000
Decrease in cash in the period (229) (172)
New loan funding (450) (440)
Loan repayments 78 -
Non-cash changes (63) 307
________ ________
Movement in net debt in period (664) (305)
Net debt at 1 July 2005 (242) 63
________ ________
Net debt at 31 December 2006 (906) (242)
________ ________
The comparative figures in these financial statements are for the 12 months to
30 June 2005.
EICOM PLC
Notes to the Financial Statements
for the period ended 31 December 2006
1. Basis of preparation
Following an extensive review of the Group's financial projections for the year
to 31 December 2007, these financial statements have been prepared on the going
concern basis.
2. Turnover and loss on ordinary activities before taxation
The group's turnover and loss before taxation were all derived from the
principal activities. Sales were made within the following geographical
markets:
18 months to 12 months to
31.12.2006 30.6.2005
#'000 #'000
Continuing operations
United Kingdom 869 358
Europe 95 7
_______ _______
964 365
_______ _______
Acquisitions
United Kingdom 52 -
Europe - -
_______ _______
52 -
_______ _______
Total turnover 1,016 365
_______ _______
All of the above turnover has arisen from TV subscriptions, distribution and
advertising.
All of the loss on ordinary activities after taxation has arisen from TV
subscriptions, distribution and advertising.
All of the net assets of the group are based in the United Kingdom.
3. Loss on ordinary activities before taxation
18 months to 12 months to
31.12.2006 30.6.2005
#'000 #'000
Loss on ordinary activities before taxation is stated after
charging/(crediting):
Amortisation of goodwill arising on acquisition of 30 15
subsidiaries
Provision for goodwill impairment 218 -
Depreciation of tangible fixed assets 25 13
Release of prepaid programme rights 311 76
Profit on disposal of subsidiary 111 -
Adjustment arising from administration - (7)
Operating lease rentals of land and buildings 29 7
Auditors' remuneration for audit services 20 30
_______ _______
4. Loss per Share
Basic and diluted loss per ordinary share of 41 pence (2005: 14.6 pence) is
calculated using the group loss for the year after taxation of #1,885,000 (2005:
#514,000) and the weighted average number of shares in issue of 4,597,492 (2005:
3,512,973). The comparative figures have been rebased following the share
capital reorganisation carried out during the period.
The Annual Report will be posted to shareholders and further copies will be
available from the Company's Head Office at 4 Farleigh Court, Flax Bourton,
Bristol, BS48 1UL. An electronic copy is available from the Company's website at
www.eicom.co.uk.
ENDS
This information is provided by RNS
The company news service from the London Stock Exchange
END
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