CFL Contentfilm

 

TIDMCFL 
 
RNS Number : 1804P 
Contentfilm PLC 
20 March 2009 
 

Date: 20 March 2009 
On behalf of:      ContentFilm plc ('the Company', 'the Group' or 'ContentFilm') 
Embargoed until:     0700hrs 
 
 
ContentFilm plc 
  *  Trading Update 
 
 
The Board of ContentFilm plc (AIM: CFL), a pre-eminent owner of media rights 
supported by strong film, TV and digital sales divisions, today provides 
shareholders with a trading update. 
 
 
As the Company approaches its year end of 31 March 2009 (FY09), it has become 
clear that the effects of the global recession are having an impact in our final 
quarter and therefore on our FY09 revenues and normalised profit (profit before 
taxation, before intangible library amortisation, share option expenses and 
exceptional items). We now expect the FY09 revenues and normalised profit to be 
lower than market expectations with revenues being approximately 10 - 12% lower 
than for the comparable period in 2008. The Board believes this should be 
considered a satisfactory performance in the current economic climate. 
 
 
Fireworks International, the Group's television distribution division, is 
expected to produce a positive and solid FY09 result. However, as widely 
documented in the media, the current economic environment is having an affect on 
the television industry and we are experiencing a general slow down in trading 
and revenues in this division.  Nevertheless, there are signs that our broad 
library of product is providing a level of resilience and stability in these 
difficult times. 
 
 
As previously reported, ContentFilm International, our film sales and 
distribution business, will have a disappointing FY09.  Alongside a generally 
challenging market, several of our titles which were expected to be delivered in 
FY09, have been delayed and are now expected to be delivered in FY10. However, 
our slate of new films is developing well for FY10, alongside a generally 
pleasing performance from sales in our film library. 
 
 
Peace Arch Home Entertainment, our US home entertainment Joint Venture 
investment, is expected to have mixed results.  Revenues will be down on our 
expectations due to a generally challenging market and less product being 
released than originally forecast.  However, the revenues at Wal-Mart have 
improved over the last two months and overhead costs have been well 
contained. The net of these factors is that whilst revenues will be down on 
management expectations, profits will be broadly in line. 
 
 
The Company's US dollar net debt has increased marginally since the interim 
results statement and currently stands at circa. $US34 million 
(GBP23.5 million).  The sterling equivalent of our US dollar senior loan has 
increased more significantly, predominantly due to the further devaluation in UK 
sterling against the US dollar. Shareholders are reminded that we hold our 
senior loan in US dollars because our receivables and other assets are 
predominantly held in US dollars. Additionally, foreign exchange differences 
arising from the translation of our loan are recognised in a translation reserve 
within our Equity account and therefore do not have an impact on our 
profitability in the Income Statement. 
 
 
Liquidity under our loan facility remains strong. The Company continues to 
undertake cost cutting measures and is managing its cash flow carefully to 
protect its liquidity over the coming period. 
 
 
The Company will undertake its review as at 31 March 2009 of the carrying value 
of its intangible assets, including its goodwill, to ascertain whether the 
values of those assets have been impaired. Without prejudicing the results of 
that review, taking account of the current economic climate, it is considered 
possible that some of the carrying values of the Company's intangible assets may 
require an impairment charge. Any such charges will be primarily non-cash in 
nature and added back for the purposes of calculating our normalised profits. 
 
 
In the current recession, advertising revenues and DVD sales are falling, 
cutbacks in television programming commissions are being seen, and lower 
revenues and profits are being announced across much of the industry. We can 
expect this to continue to have some negative effect on our results going 
forward. Nevertheless, we will work hard to neutralise these possible effects by 
adhering to a strategy that protects liquidity, seeks to lower our debt and 
builds on our sales and library management strengths. 
 
 
As reported in the interim results statement dated 23 December 2008, the Company 
is continuing discussions with the majority holders of the Convertible 
Redeemable Preference Shares ("Preference Shares"), with a view to resolve the 
issues related to the potential redemption of those shares in a manner that is 
fair to, and in the best interests of, all shareholders. Under the Company's 
Articles of Association, Preference Shareholders can serve a redemption notice 
on the Company within 90 days after 29 March 2009.  The Company is working 
towards a proposal to Preference Shareholders, the details of which it would 
hope to communicate to Preference Shareholders before the expiry of that 90 day 
period. 
 
 
Mr John Schmidt, Chief Executive Officer of ContentFilm, commented: 
 
 
"We are pleased to expect a satisfactory normalised result for FY09 considering 
the current economic climate and the impact that this has had on the film and 
television sector. However, it is a disappointment to not be in line with market 
expectations.  We will maintain our low risk distribution model and continue to 
manage our costs and protect our liquidity. The Company is well placed to 
continue to trade solidly in this difficult period and remains confident in its 
strategy which the Board believes will hold the Group in good stead over the 
coming period." 
 
 
- Ends - 
 
 
Enquiries: 
 
 
+-----------------------------------------------------+------------------------------+ 
| John Schmidt/ Geoff Webb                            |                              | 
+-----------------------------------------------------+------------------------------+ 
| ContentFilm PLC                                     | Tel: 020 7851 6500           | 
+-----------------------------------------------------+------------------------------+ 
 
 
+-----------------------------------------------------+------------------------------+ 
| Emma Kane/ Sanna Sumner/ Anna Dunkin                |                              | 
+-----------------------------------------------------+------------------------------+ 
| Redleaf Communications Ltd                          | Tel: 020 7566 6700           | 
+-----------------------------------------------------+------------------------------+ 
|                                                     | contentfilm@redleafpr.com    | 
+-----------------------------------------------------+------------------------------+ 
 
 
+-----------------------------------------------------+------------------------------+ 
| Philip Secrett/ Colin Aaronson                      |                              | 
+-----------------------------------------------------+------------------------------+ 
| Grant Thornton UK LLP                               | Tel:  020 7383 5100          | 
+-----------------------------------------------------+------------------------------+ 
 
 
Notes on ContentFilm plc 
  *  Further information on the Company and details of the individual titles that 
  make up the Company's available library is at: www.contentfilm.com 
  *  Publication quality photographs are available through Redleaf Communications. 
  *  ContentFilm International (CFI) is the worldwide film and library sales arm of 
  ContentFim plc. CFI specializes in high quality and commercial feature films, 
  and is able to assist film producers in securing finance. Content handles 
  worldwide sales, marketing, and publicity on all titles. The recently formed 
  Feature Films Library arm also concentrate on international sales on over 160 
  titles. The latest CFI productions include "The Messenger" with Ben Foster and 
  Woody Harrelson produced by 'Saving Private Ryan's Mark Gordon, the true story 
  of Hawaii's "Princess Ka'iulani" starring "The New World's" Q'orianka Kilcher, 
  the action thriller "Horse" with Diego Luna, intense suspense thriller "The 
  Killing Room" with Academy Award   nominated Chloe Sevigny, Toby Wilkins' 
  brilliant horror "Splinter", double-Oscar   nominee Samantha Morton stars in 
  "The Daisy Chain", Academy Award nominated   actor William H. Macy makes his 
  directorial debut with "Keep Coming Back" and Anthony LaPaglia stars in 
  "Balibo". Completed films include, "August" starring Josh Hartnett, Richard 
  Attenborough's "Closing the Ring" which includes cast such as Shirley MacLaine, 
  Christopher Plummer and Mischa Barton; the horror "Outpost" widely sold to Sony, 
  Paul Verhoeven's "Black Book" and Jason Reitman's "Thank You For Smoking" which 
  generated more than $20 million at the US box office. CFI attends all major 
  markets and festivals including Cannes, Venice, Toronto, AFM and Berlin. CFI is 
  being managed in an executive capacity by Jamie Carmichael, President of 
  ContentFilm International. 
  *  Fireworks International is ContentFilm's international television distribution 
  division with over 3,000 hours of high-quality and commercially appealing 
  programming including an extensive slate of major drama series, factual 
  entertainment, kids live action comedy and drama series, TV movies, mini-series 
  and special event programming. Fireworks International specialises in assisting 
  TV producers to finance their programming and then marketing and selling the 
  programmes internationally, both to the traditional media and new media 
  platforms. Fireworks' library of programming includes the very latest in unique 
  and engaging entertainment. Recent additions include hit crime drama series "The 
  Border" and heart-warming family drama series, "Heartland", "Blood Ties", 
  twenty-two hours of mystery drama with more than a touch of the supernatural, 
  brand new U.S. tween comedy "The Assistants", Mondo Media's "Mondo Mini Shows" 
  catalogue featuring a raft of offbeat comedy programming; children's programmes 
  "Young Dracula", "Black Hole High" and "100 Deeds for Eddie McDowd" plus over 
  200 U.S. network mini-series and TV movies together with specials including the 
  Annual U.S. "Primetime Emmy Awards" shows. This new product is combined with the 
  large and valuable Fireworks library catalogue which is complemented by a raft 
  of formidable television shows including Gene Roddenberry's "Andromeda", "Mutant 
  X" and "Relic Hunter". As one of the UK's largest and fastest-growing 
  entertainment companies, Fireworks International has sales offices in London, 
  Toronto and Los Angeles. Fireworks International is being managed in an 
  executive capacity by Greg Phillips as President of Fireworks International. 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 TSTEANDNFSENEFE 
 

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