TIDMLUD
RNS Number : 2374P
Ludorum PLC
30 September 2011
30 September 2011
LUDORUM PLC INTERIM RESULTS
Ludorum plc, the AIM-listed media investment company, today
announces its results for the half year ended 30 June 2011.
Highlights
Turnover generated in the period of GBP2.95m (2010: GBP1.30m),
an increase of 127%
Consumer products revenues were GBP2.60m (2010: GBP0.83m), an
increase of 214%
Strong growth in all territories
Gross profit of GBP1.15m (2010: GBP0.67m), an increase of
72%
Operating loss of GBP0.41m (2010: GBP1.25m), a 67%
improvement
Chuggington has now been licensed for broadcast to 175
countries
Over 210 consumer products and home entertainment license
agreements for Chuggington have been concluded throughout the
world
Broadcasters in Europe and Asia as well as Disney US have
acquired the third series of Chuggington with delivery beginning at
the end of this year
14 million Chuggington engines have now been sold worldwide
Rob Lawes, Chief Executive, said:
"The Company has had a solid first six months of trading with a
significant increase in consumer products revenues growing by 214%
to GBP2.60m, this amount exceeding the full prior year consumer
products revenues of GBP2.54m. Whilst we are anticipating continued
strong consumer products growth for the remainder of this year, our
outlook for the year is tempered by our awareness of the current
global economic difficulties which could impact on us with weak
consumer spending and conservative inventory management by
retailers."
Contacts
Ludorum plc 020 8246 4010
Rob Lawes
Investec Investment Banking (NOMAD) 020 7597 4000
Charles Batten
David Flin
Chief Executive's Review
Overview
The Company has had a solid first six months of trading with a
significant increase in consumer products revenues growing by 214%
to GBP2.60m, this amount exceeding the full prior year consumer
products revenues of GBP2.54m. Whilst we are anticipating continued
strong consumer products growth for the remainder of this year, our
outlook for the year is tempered by our awareness of the current
global economic difficulties which could impact on us with weak
consumer spending and conservative inventory management by
retailers.
Chuggington
Chuggington is a computer generated 3D series of 92 x 10" minute
episodes and 46 shorter mini-episodes. Of these, 78 episodes and 39
mini-episodes are complete, and the remainder are currently in
production and will be delivered by the end of this year. The
series follows the adventures of Wilson, Brewster and Koko, all
trainee engines and each with their own unique personality and
learning style. We have recently begun development on a further
series of Chuggington as we look to expand the world, characters
and storylines. These new episodes are expected to commence
delivery in 2013.
Broadcast
We have concluded broadcast agreements with all leading
broadcasters in their respective territories in over 175 countries.
The series has established a highly successful ratings record in
many markets including the UK (BBC - Cbeebies), Germany (Super
RTL), France (TF1), Japan (Fuji TV), Australia (ABC), Canada
(Treehouse), TVE (Spain) and Benelux (RTL). All of these
broadcasters have picked up the third series with the exception of
TVE and RTL which have only recently commenced broadcast. In
January 2010, Chuggington launched on the Disney Channel in the US
and has been consistently aired at least six days a week. Following
the success of the launch, Disney acquired the second series of
Chuggington in August 2010 and now, recently, the third series.
Consumer Products
It was announced on 11(th) March 2011 that Tomy Company Ltd has
entered into a definitive agreement to acquire our previous master
toy licence partner, RC2 Corporation. We believe that this will be
a positive development which has the potential to be very
favourable for long term Chuggington toy sales in all territories,
especially in Japan.
Tomy, our worldwide master toy partner has now sold over 14
million Chuggington engines since their products first launched in
2010. This is across three distinct train systems: Die Cast,
Interactive and Wood. In the US following a very successful Q4 2010
launch with Toys R Us, Tomy have expanded their listings in Toys R
Us and have secured listings with other major US retailers for this
autumn. In Europe they have listings with a number of major
retailers including Tesco, Argos, Asda, Carrefour, Casino, Le Grand
Recre, Toys R Us, Muller and Spiele Max. The master toy line for
Chuggington will also be launching in October 2011 in Japan with an
exclusive launch with Toys R Us.
In addition to the master toy licence, the Company has, to-date,
entered into over 210 consumer products agreements with leading
organisations including Vtech, Hallmark, Crayola and
Ravensburger.
Following the launch of Chuggington on the Disney Channel in the
US, over 25 American licences have been signed with leading
companies in their respective categories. A worldwide agreement has
also been concluded with Mega Brands Inc for exclusive rights in
proprietary construction toys.
Financial Review
Ludorum generated revenues of GBP2.95m for the first six months
of 2011 (2010: GBP1.30m), a 127% increase over the first six months
of 2010. Consumer product revenues represented 88% of revenues,
increasing by GBP1.77m to GBP2.60m (2010: GBP0.83m). Broadcast
revenues, which are recognised on license period start dates,
represented 11% of revenues and reduced by GBP0.15m to GBP0.32m
(2010: GBP0.47m).
All regions enjoyed strong double digit growth. The UK grew by
24% to GBP0.51m and represented 17% of total revenues. Europe grew
by 78% to GBP0.87m representing 29% revenues and the US had
substantial growth to GBP1m representing 34% of revenues.
Gross profit increased from GBP0.67m to GBP1.15m, a 72% increase
over the first six months of 2010. Gross margins fell from 51% to
39%. The margin reduction is largely related to increased marketing
costs, a growing proportion of revenues which attract a commission
on sales and an increased amortisation charge, resulting from the
greater number of episodes.
Total administrative costs, excluding costs attributed to the
Incentive Option Plan, were GBP1.46m, a decrease of GBP0.13m over
the six months to 30 June 2010.
The operating loss for the six month period was GBP0.41m, a 67%
improvement on the GBP1.25m loss for the six months to 30 June
2010.
Capital expenditure on Chuggington during the period was
GBP0.79m (GBP0.48m in the six months to 30 June 2010), an increase
of GBP0.31m.
As at the 30 June 2011 the Company had cash and cash equivalents
of GBP0.25m (30 June 2010 GBP0.07m) and bank overdrafts of GBP0.72m
(30 June 2010: GBP0.13m).
As of 30 June 2011, the Company had an overdraft facility with
Coutts & Co of GBP0.75m and GBP0.72m of this facility was being
utilised at that date. The overdraft facility was increased from
GBP0.50m to GBP0.75m in March 2011. In addition, the Company has a
loan of GBP1.50m, included in non-current liabilities.
On the basis of enquiries made by the Directors and in the light
of current financial projections and facilities available, the
Directors have reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable
future. Accordingly, we continue to adopt the going concern basis
in preparing the accounts.
Ludorum plc
Consolidated Statement of Comprehensive Income for the six
months ended 30 June 2011
Six months Six months
ended ended
30 June 30 June
2011 2010
Notes GBP000 GBP000
--------------------------------------- ------ ----------- -----------
Continuing operations
--------------------------------------- ------ ----------- -----------
Revenue 2 2,949 1,301
--------------------------------------- ------ ----------- -----------
Cost of sales (1,797) (631)
--------------------------------------- ------ ----------- -----------
Gross profit 1,152 670
--------------------------------------- ------ ----------- -----------
Costs attributable to the incentive
option plan (108) (327)
--------------------------------------- ------ ----------- -----------
Other administrative expenses (1,457) (1,589)
--------------------------------------- ------ ----------- -----------
Total administrative expenses (1,565) (1,916)
--------------------------------------- ------ ----------- -----------
Operating loss (413) (1,246)
--------------------------------------- ------ ----------- -----------
Finance cost - bank and loan interest (43) (42)
--------------------------------------- ------ ----------- -----------
Finance income - bank interest - -
--------------------------------------- ------ ----------- -----------
Net finance cost (43) (42)
--------------------------------------- ------ ----------- -----------
Loss before taxation (456) (1,288)
--------------------------------------- ------ ----------- -----------
Taxation (95) (9)
--------------------------------------- ------ ----------- -----------
Loss for the period (551) (1,297)
--------------------------------------- ------ ----------- -----------
Other comprehensive income: foreign
exchange differences 5 15
--------------------------------------- ------ ----------- -----------
Total comprehensive income for
the period (546) (1,282)
--------------------------------------- ------ ----------- -----------
Loss per share (basic and diluted) (5.7p) (15p)
--------------------------------------- ------ ----------- -----------
Ludorum plc
Consolidated balance sheet as at 30 June 2011
30 June 31 December 30 June
Notes 2011 2010 2010
------------------------------ ------ --------- ------------ ---------
GBP000 GBP000 GBP000
------------------------------ ------ --------- ------------ ---------
Assets
------------------------------ ------ --------- ------------ ---------
Non -current assets
------------------------------ ------ --------- ------------ ---------
Property, plant and
equipment 53 52 73
------------------------------ ------ --------- ------------ ---------
Intangible assets 3 3,304 3,237 2,362
------------------------------ ------ --------- ------------ ---------
3,357 3,289 2,435
------------------------------ ------ --------- ------------ ---------
Current assets
------------------------------ ------ --------- ------------ ---------
Trade and other receivables 1,702 2,199 1,695
------------------------------ ------ --------- ------------ ---------
Cash and cash equivalents 252 700 65
------------------------------ ------ --------- ------------ ---------
1,954 2,899 1,760
------------------------------ ------ --------- ------------ ---------
Liabilities
------------------------------ ------ --------- ------------ ---------
Current Liabilities
------------------------------ ------ --------- ------------ ---------
Income tax payable (18) (16) (8)
------------------------------ ------ --------- ------------ ---------
Trade and other liabilities (5,983) (6,657) (6,199)
------------------------------ ------ --------- ------------ ---------
Borrowings 4 (723) (443) (125)
------------------------------ ------ --------- ------------ ---------
(6,724) (7,116) (6,332)
------------------------------ ------ --------- ------------ ---------
Net current (liabilities)
/ assets (4,770) (4,217) (4,572)
------------------------------ ------ --------- ------------ ---------
Non - current liabilities
------------------------------ ------ --------- ------------ ---------
Borrowings 4 (1,500) (1,500) (1,500)
------------------------------ ------ --------- ------------ ---------
Net (liabilities) /
assets (2,913) (2,428) (3,637)
------------------------------ ------ --------- ------------ ---------
Shareholders' equity
------------------------------ ------ --------- ------------ ---------
Ordinary shares 88 88 84
------------------------------ ------ --------- ------------ ---------
Deferred shares 50 50 50
------------------------------ ------ --------- ------------ ---------
Share premium 9,281 9,281 7,885
------------------------------ ------ --------- ------------ ---------
Share based payments
reserve 166 105 63
------------------------------ ------ --------- ------------ ---------
Foreign currency translation 10 5 20
------------------------------ ------ --------- ------------ ---------
Accumulated losses (12,508) (11,957) (11,739)
------------------------------ ------ --------- ------------ ---------
Total shareholders'
equity (2,913) (2,428) (3,637)
------------------------------ ------ --------- ------------ ---------
Ludorum plc
Statement of changes in shareholders' equity
Total
Share-based Foreign Shareholder
Share Share Accumulated payments currency (deficit)/
Capital Premium losses reserve translation Equity
--------------- -------- -------- ------------ ------------ ------------ ------------
June June June June
11 11 June 11 11 11 June 11
30 June 2010 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- -------- -------- ------------ ------------ ------------ ------------
At 1 January
2011 138 9,281 (11,957) 105 5 (2,428)
--------------- -------- -------- ------------ ------------ ------------ ------------
Loss for the
period - - (551) - - (551)
--------------- -------- -------- ------------ ------------ ------------ ------------
Other
comprehensive
income:
Foreign
exchange
differences - - - - 5 5
--------------- -------- -------- ------------ ------------ ------------ ------------
Total
comprehensive
income for
the period to
30 June 2010 - - (551) - 5 (546)
--------------- -------- -------- ------------ ------------ ------------ ------------
Transactions
with owners
--------------- -------- -------- ------------ ------------ ------------ ------------
Charge
relating to
incentive
option plan - - - 61 - 61
--------------- -------- -------- ------------ ------------ ------------ ------------
At 30 June
2011 138 9,281 (12,508) 166 10 (2,913)
--------------- -------- -------- ------------ ------------ ------------ ------------
Total
Share-based Foreign Shareholder
Share Share Accumulated payments currency (deficit)/
Capital Premium losses reserve translation Equity
--------------- -------- -------- ------------ ------------ ------------ ------------
June June June June
10 10 June 10 10 10 June 10
30 June 2010 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
--------------- -------- -------- ------------ ------------ ------------ ------------
At 1 January
2010 134 7,885 (10,442) 30 5 (2,388)
--------------- -------- -------- ------------ ------------ ------------ ------------
Loss for the
period - - (1,297) - - (1,297)
--------------- -------- -------- ------------ ------------ ------------ ------------
Other
comprehensive
income:
Foreign
exchange
differences - - - - 15 15
--------------- -------- -------- ------------ ------------ ------------ ------------
Total
comprehensive
income for
the period to
30 June 2010 - - (1,297) - 15 (1,282)
--------------- -------- -------- ------------ ------------ ------------ ------------
Transactions
with owners -
--------------- -------- -------- ------------ ------------ ------------ ------------
Charge
relating to
incentive
option plan - - - 33 - 33
--------------- -------- -------- ------------ ------------ ------------ ------------
At 30 June
2010 134 7,885 (11,739) 63 20 (3,637)
--------------- -------- -------- ------------ ------------ ------------ ------------
Ludorum plc
Consolidated cash flow statement for the six months ended 30
June 2011
Six months Six months
ended ended
30 June 2011 30 June 2010
GBP000 GBP000
---------------------------------------------- -------------- --------------
Cash flows from operating activities
---------------------------------------------- -------------- --------------
Cash generated by / (used in) operations 210 (187)
---------------------------------------------- -------------- --------------
Interest received - -
---------------------------------------------- -------------- --------------
Interest paid (43) (42)
---------------------------------------------- -------------- --------------
Taxation paid (93) -
---------------------------------------------- -------------- --------------
Net cash generated by / (used in) operating
activities 74 (229)
---------------------------------------------- -------------- --------------
Cash flows from investing activities
---------------------------------------------- -------------- --------------
Purchase of property, plant and equipment (17) (22)
---------------------------------------------- -------------- --------------
Investment in intangible assets (785) (475)
---------------------------------------------- -------------- --------------
Net cash used in investing activities (802) (497)
---------------------------------------------- -------------- --------------
Cash flows from financing activities
---------------------------------------------- -------------- --------------
Proceeds received in respect of issue
of share capital in July - 180
---------------------------------------------- -------------- --------------
Repayment of loan - (1,127)
---------------------------------------------- -------------- --------------
Increase in loans - 1,500
---------------------------------------------- -------------- --------------
Net cash generated from financing activities - 553
---------------------------------------------- -------------- --------------
Net decrease in cash and cash equivalents (728) (173)
---------------------------------------------- -------------- --------------
Cash, cash equivalents and bank overdraft
at 1 January 257 113
---------------------------------------------- -------------- --------------
Cash, cash equivalents and bank overdraft
at 30 June (471) (60)
---------------------------------------------- -------------- --------------
GBP180,000 was received in June 2010 in respect of an issue of
ordinary shares that took place in July 2010. This receipt has been
included in cash flows from financing activities.
Ludorum plc
Notes to the consolidated interim financial statements for the
six months ended 30 June 2011
1. Accounting policies
General Information
The company is a public limited company incorporated and
domiciled in the United Kingdom. The address of its registered
office is 2B River Court, 27 Brewhouse Lane, Putney Wharf, London
SW15 2JX. The registered number is 5595899. This company is listed
on AIM.
The condensed consolidated interim financial information was
approved for issue on 30 September 2011.
Basis of preparation
The condensed consolidated interim financial information should
be read in conjunction with the annual financial statements for the
year ended 31 December 2010, which have been prepared in accordance
with IFRSs.
The condensed consolidated interim financial information has not
been reviewed or audited by the Company's auditors and does not
constitute statutory accounts within the meaning of section 434 of
the Companies Act 2006. Statutory accounts for the year ended 31
December 2010 were approved by the Board for issue on 6 April 2011
and have been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain any statement
under sections 498 (2) or (3) of the Companies Act 2006.
Accounting policies
The accounting policies applied are consistent with those of the
annual financial statements for the year ended 31 December 2010, as
described in those financial statements.
2. Segmental analysis
The group currently has one operating segment, the development
and exploitation of its rights in Chuggington. Further information
about revenue derived from the Group's product lines is set out
below. Management information used by the Chief Operating Decision
Maker (CODM) is in a format similar to the Consolidated Statement
of Comprehensive Income and Consolidated Balance Sheet. The CODM is
considered to be the Board of Directors.
Revenue by product line
Six months Six months
ended ended
30 June 2011 30 June 2010
GBP000 GBP000
------------------- -------------- --------------
Television 323 468
------------------- -------------- --------------
Consumer Products 2,601 829
------------------- -------------- --------------
Other 25 4
------------------- -------------- --------------
2,949 1,301
------------------- -------------- --------------
Geographical analysis of revenue by location of customer
Six months Six months
ended ended
30 June 2011 30 June 2010
GBP000 GBP000
---------------- -------------- --------------
United Kingdom 505 406
---------------- -------------- --------------
Europe 868 488
---------------- -------------- --------------
Asia 198 139
---------------- -------------- --------------
Australasia 376 212
---------------- -------------- --------------
Americas 1,002 56
---------------- -------------- --------------
2,949 1,301
---------------- -------------- --------------
All material assets are located in the UK.
3. Intangible assets
Capitalised development
costs
-------------------------------- ------------------------
GBP000
-------------------------------- ------------------------
30 June 2011
-------------------------------- ------------------------
Cost
-------------------------------- ------------------------
At 1 January 2011 3,756
-------------------------------- ------------------------
Additions 327
-------------------------------- ------------------------
At 30 June 2011 4,083
-------------------------------- ------------------------
Accumulated amortisation
-------------------------------- ------------------------
At 1 January 2011 519
-------------------------------- ------------------------
Charge for the period 260
-------------------------------- ------------------------
At 30 June 2011 779
-------------------------------- ------------------------
Net book value at 30 June 2011 3,304
-------------------------------- ------------------------
Capitalised development
costs
-------------------------------- ------------------------
GBP000
-------------------------------- ------------------------
30 June 2010
-------------------------------- ------------------------
Cost
-------------------------------- ------------------------
At 1 January 2010 2,273
-------------------------------- ------------------------
Additions 475
-------------------------------- ------------------------
At 30 June 2010 2,748
-------------------------------- ------------------------
Accumulated amortisation
-------------------------------- ------------------------
At 1 January 2010 275
-------------------------------- ------------------------
Charge for the period 111
-------------------------------- ------------------------
At 30 June 2010 386
-------------------------------- ------------------------
Net book value at 30 June 2010 2,362
-------------------------------- ------------------------
4. Borrowings
The following borrowings are included in trade and other
liabilities:
30 June 31 December 30 June
2011 2010 2010
------------------------------ -------- ------------ --------
GBP000 GBP000 GBP000
------------------------------ -------- ------------ --------
Bank overdraft 723 443 125
------------------------------ -------- ------------ --------
Loans 1,500 1,500 1,500
------------------------------ -------- ------------ --------
2,223 1,943 1,625
------------------------------ -------- ------------ --------
Undrawn borrowing facilities
------------------------------ -------- ------------ --------
Bank overdraft 27 57 375
------------------------------ -------- ------------ --------
Fixed interest rate loan - - -
------------------------------ -------- ------------ --------
27 57 375
------------------------------ -------- ------------ --------
In March 2010 the Company obtained overdraft facilities of
GBP500,000 from Coutts & Co. This facility was increased to
GBP750,000 in March 2011. The overdraft is secured by a first
charge over the Company's assets (including the Company's
intellectual property). In March 2010 the Company also issued
GBP1.5m of loan notes to Pennine AIM VCT PLC. The loan notes are
redeemable within five years. If the Company redeems the loan notes
within two years the redemption will be GBP1.25 per GBP1 of loan
notes (less interest paid prior to redemption). If the loan notes
are redeemed after two years the loan notes are redeemable at par.
The interest payable on the loan notes is the greater of 9% or 3%
above LIBOR for the first three years. After three years, the
interest rate is 15%. The loan notes are secured by a second charge
over the Company's assets (and a charge over the assets of Ludorum
Enterprises Limited, a wholly owned subsidiary of the Company).
5. Related party transactions
Included in trade and other liabilities at 30 June 2011 is
GBP101,220 in respect of unpaid remuneration (and the associated
employer's National Insurance payable) owed to directors of the
company (30 June 2010: GBP22,500, 31 December 2010: GBP82,392).
Also included in trade and other liabilities at 30 June 2011 are
accrued pension costs owed to the directors of GBP116,342 (30 June
2010: GBP131,598, 31 December 2010: GBP108,970).
6. Commitments
In 2007 the company entered into an agreement with a toy
manufacturer under the terms of which the toy manufacturer agreed
to fund 50% of the production cost of the company's animated series
"Chuggington" in return for which it has a global master toy
licence and the right to participate in the net profit of the
property. The company and the toy manufacturer have now jointly
funded the production of two series, comprising 78 episodes of
Chuggington. The company and the toy manufacturer have agreed to
jointly fund a third series of 14 episodes of 10 minutes each and 7
interstitials of 4 minutes each. The budget is GBP2m. Production of
this series commenced in late 2010.
In August 2011 the company entered into an agreement with
Shanghai Motion Magic Digital Entertainment Inc ("Motion Magic")
under the terms of which Motion Magic is to provide animation and
editing services for the production of the third series of
Chuggington. The company is committed to pay RMB 7.938m
(GBP767,000). Under the terms of the agreement with the toy
manufacturer described above, 50% of the amount payable to Motion
Magic will be refunded to the company by the toy manufacturer.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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