RNS Number:2027N
Metrodome Group PLC
07 July 2003
Metrodome Group plc ("Metrodome" or the "Company" or "Group")
Preliminary Results for the Year Ended 31st March 2003,
Chairman's Statement
Financial Highlights
* Gross Margin in Continuing Businesses has improved by 458%
* Operating loss in Continuing Businesses reduced by 69%
* Net assets improved by 192%
* Net debt reduced by 59%
On the corporate side, Metrodome Group plc ("Metrodome") has had an extremely
busy year.
In summary:
* Metro Direct Limited; Triton Trading Limited and
DtK-Metrodome Limited were sold in June 2002;
* Loonland Home Entertainment Ventures Limited and its
children's programme catalogues and future rights was acquired from
TV-Loonland UK Limited for shares in September 2002 and, as a result,
TV-Loonland AG acquired another 25% of Metrodome making it the majority
shareholder with 54% of the issued shares;
* A rights issue to raise #1.5million before expenses was
made in February 2003;
* TVL-Loonland AG acquired a further 30% of Metrodome in the
rights issue, making it an 84% shareholder;
* Andrew Keyte was appointed Managing Director in February
2003.
The disposals and acquisition were steps taken in implementation of the Board's
decision, set out in previous reports, to return Metrodome to its core business
of film, TV, and video distribution.
As a result, the company now has its original core theatrical movie business
plus the rights over 1,900 episodes of children's television programming
including such classics as Transformers; My Little Pony and GI Joe. The deal
also allowed Metrodome first option over TV-Loonland's current productions such
as The Cramp Twins; Pong Wiffy and Yvon of the Yukon- as seen on BBC TV and the
ITV network...
Alongside the corporate activity Metrodome continued to trade fairly well
despite heavy cashflow restrictions in the second half of the year. Seven
theatrical releases and 21 DVD/VHS releases were made during the year.
The group losses for the full year after taxation are #1,106,000 (2002:
#3,280,000). This figure is after charging exceptional costs of #626,000
(#214,000 of which were reported at the half year).
Exceptional costs comprised the following: -
* #280,000 to write down the film library:
* #124,000 write-back of consideration due from the
purchaser of the sold companies, now considered unrecoverable;
* #117,000 additional payment of parent company guarantees
on Metro Direct Limited ;
* #86,000 provision against DNA (USA) debtor on
DtK-Metrodome Limited;
* #19,000 provision in respect of the closure of the rental
department;
Group Operating Results - Continuing Operations Only
These exclude the operating results for Metro Direct Limited and DtK-Metrodome
Limited
2002/3 2001/2 Variance
-------- -------- ----------
# # %
Turnover #4,679,000 #5,749,000 (19)%
Gross Profit #1,530,000 #274,000 +458%
33% 5%
Overheads #1,898,000 #1,465,000 +30%
Operating Loss #(368,000) #(1,191,000) + 69%
Despite a fall in continuing operations turnover the Group strategy of
concentrating on its core business of feature film distribution has led to a
significant improvement in the margins achieved (both relative and absolute).
The overhead comparatives are distorted in the above figures due to the
allocation of central overhead costs to discontinued operations in 2002 of
#492,000. The adjusted comparative would therefore be #1,957,000 which gives a
year on year reduction of 3%.
The restructuring of the Group over the last eighteen months has led to a
significant reduction in ongoing overhead costs. These have been offset by the
cost of the restructuring, but the full effect of the overhead reductions will
be seen in 2003/4 when the budgeted overheads for the year at #1,500,000 will
show a reduction of 21% on 2002/3.
The majority of the annual loss has already been reported in my half year
statement. Metrodome's second half performance in continuing businesses has seen
substantial improvement:
Second Half First Half Variance
------------- ------------ ----------
# # %
Turnover #2,673,000 #2,006,000 + 33%
Gross Profit #1,107,000 #423,000 + 162%
41% 21%
Overheads #957,000 #941,000 + 2%
Operating Profit #150,000 #(518,000) + 129%
The Group is to now concentrating on acquiring higher-margin product with
longer-term value in the retail market. This is to capitalise on the explosive
growth of DVD hardware and software. It has coincided with the increasing degree
of revenue-share in the rental market, which makes the acquisition and
distribution of non-theatrical rental titles less profitable.
I therefore have to report that our in-house rental operation was closed on 31
March 2003. I wish to thank our rental team for their efforts in a very
difficult market.
Review of Continuing Operations.
Metrodome Distribution enjoyed its biggest theatrical success since the 1999 hit
Human Traffic with Donnie Darko released in October 2002 achieving box office
receipts of #1,600,000. The film was very cleverly marketed and distributed,
keeping a minimum number of prints in circulation which meant more full houses
where it played. This maximised our share of box office receipts.
The rental release of Donnie Darko in March 2003 mirrored the theatrical success
of the film. Rental revenues are now expected to be in excess of #500,000,
mainly from revenue-share.
The retail release of Donnie Darko in May 2003 is now in full swing with over
100,000 units shipped in the first month of sale. We also have high expectations
of long-term catalogue value
Lilya 4-Ever (Lukas Moodysson's follow-up to Together) was released theatrically
in April 2003 to critical acclaim. Box office targets have been met, which is
encouraging for its DVD release in October 2003.
The first release from our children's library took place in February with over
#100,000 of wholesale revenues delivered on The Cramp Twins. 2003/4 will see
more children's titles released via our in-house sales team, through our deal
with Prism Leisure and via a number of "premium-item" deals through non-retail
outlets.
Metrodome plans to release eight titles theatrically during the new financial
year with over thirty new releases on DVD/VHS added to its catalogue during this
period.
I would like to welcome Andrew Keyte to Metrodome as Managing Director. .
Andrew's knowledge of the sector and expertise in acquisitions has already made
an impact as Metrodome now has a full theatrical release slate for 2003/4.
Our staff have worked well as before and I thank all of them for their efforts.
I would particularly like to mention Alan Martin, one of Metrodome's founders
and its Commercial Director, who has resigned in order to return to his first
business love, film finance..
Audited Consolidated Profit and Loss Account
Year Ended 31 Year Ended 31
March 2003 March 2002
Continuing Discontinued Group Total Continuing Discontinued Group Total
Operations Operations Operations Operations
#,000 #,000 #,000 #,000 #,000 #,000
Turnover 4,679 257 4,936 5,749 13,487 19,227
Cost of (2,869) (261) (3,130) (4,129) (12,772) (16,901)
Sales
Cost of Sales: (280) - (280) (1,346) - (1,346)
Exceptional
-------- -------- -------- -------- -------- --------
Gross Profit 1,530 (4) 1,526 274 706 980
Administrative (1,898) (256) (2,154) (1,303) (1,461) (2,764)
Expenses
Administrative - - - (162) - (162)
Expenses:
Exceptional
-------- -------- -------- -------- -------- --------
Operating (368) (260) (628) (1,191) (755) (1,946)
(Loss)
Cost of - (346) (346) - (1,266) (1,266)
Closure of
Discontinued
Business
-------- -------- -------- -------- -------- --------
(Loss) Before (368) (606) (974) (1,191) (2,021) (3,212)
Interest and
Taxation
Interest (132) (92)
Payable
-------- -------- -------- -------- -------- --------
(Loss) Before (1,106) (3,304)
Taxation
Taxation - -
-------- -------- -------- -------- -------- --------
(Loss) After (1,106) (3,304)
Taxation
Minority - 24
Interests
-------- -------- -------- -------- -------- --------
(Loss) (1,106) (3,280)
Transferred to -------- -------- -------- -------- -------- --------
Reserves
Earnings per (4.2)p (29.5)p
Share
Basic (4.2)p (29.5)p
Diluted
There were no recognised gains on losses for the year other than those
identified in the Profit and Loss account.
Audited Consolidated Balance Sheet
31 March 2003 31 March 2002
#,000 #,000
Fixed assets
Intangible 28 76
Tangible 67 128
----------- -----------
95 204
----------- -----------
Current assets
Stock 3,542 3,023
Debtors - due within one year 1,880 2,982
- due after one year 418 246
----------- -----------
5,840 6,251
Creditors
Amounts falling due within one year (3,867) (5,730)
----------- -----------
Net current assets 1,973 521
----------- -----------
Total assets less current liabilities 2,068 725
Amounts falling due after more than one year - (18)
----------- -----------
Net assets 2,068 707
----------- -----------
Capital and reserves
Called up share capital 2,631 1,395
Shares to be issued - -
Share premium account 5,143 3,864
Profit and loss account (5,706) (4,513)
----------- -----------
Shareholders' funds 2,068 746
Minority Interests - (39)
----------- -----------
2,068 707
----------- -----------
Shareholder's Funds
Equity Items 150 746
Non-Equity Items 1,918 -
----------- -----------
2,068 746
----------- -----------
Audited Consolidated Cash Flow Statement
Year ended 31 Year ended 31
March 2003 March 2002
#,000 #,000
Cash outflow from operating activities (338) (1,109)
Returns on investment and servicing of finance
Interest Paid (80) (92)
Capital expenditure and financial investment
Purchase of tangible fixed assets (23) (85)
----------- -----------
Cash outflow before use of liquid resources and (441) (1,286)
financing ----------- -----------
Financing
Issue of ordinary share capital 1,264 1,241
Capital element of hire purchase payments (37) (37)
----------- -----------
1,227 1,204
----------- -----------
Increase/ (Decrease) in cash for the year 786 (82)
Reconciliation of net cash flow to movement in net debt
2002 2001
#'000 #'000
Increase/(Decrease) in cash for the period 786 (82)
Cash outflow from decrease in hire purchase 37 37
obligations ----------- -----------
Movement in net debt 823 (45)
Net debt at start of period (1,387) (1,342)
----------- -----------
Net debt at 31 March (564) (1,387)
----------- -----------
Notes to the Preliminary Results
1 The Group Accounts, upon which the auditors have given an unqualified
opinion, will be distributed to shareholders and filed with the Registrar of
Companies in due course.
2 The directors are not recommending the payment of a dividend.
3 The preliminary results have been prepared on the same basis and
using the same accounting policies as those used in the preparation of the
accounts to 31 March 2002.
4 The calculation of earnings per share is based on the weighted
average number of 26,148,729 ordinary shares in issue during the year ended 31
March 2003 (2002: 11,136,990) and loss of #1,106,000 (2002: #3,280,000).
5 Analysis of Exceptional items:
#'000
Exceptional Cost of Sales
Write-down of film libraries 280
-----------
280
Loss on Closure of Discontinued Business
Cost of disposing of DTK-Metrodome Limited and Metro Direct 241
Limited
Provision against non-recoverable debtor in DtK-Metrodome Limited 86
Closure of Rental Department 19
-----------
346
-----------
626
===========
Copies of the announcement will be available to the public from the Registered
Office of the Company at 33 Charlotte Street London W1T 1RR and from KBC Peel
Hunt 111 Old Broad Street London EC2N 1PH for fourteen days.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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