RNS Number:5404V
BKN International AG
26 April 2007
26 April 2007
BKN International AG
("BKN" or the "Company")
Interim Results for the six months to 31 March 2007 (Record Earnings)
BKN, a global animation company engaged in the distribution and marketing of
animated children's television programmes and related consumer products, that
has been listed on the Deutsche Boerse of the Frankfurt Stock Exchange since
March 2000 and quoted on the AIM market of the London Stock Exchange since
December 2003, today reports its Interim Results for the six months ended 31
March 2007 with record net earnings for the Group (the Company and its
subsidiaries).
These accounts have been prepared subject to all the International Financial
Reporting Standards (IFRS) in force at 31 March 2007.
Financial Highlights
In million Euro 1st Half 2007 1st Half 2006
(except for EPS data) --------------- ---------------
Turnover 8,13 7,18 +13 %
EBT 2,11 1,45 +45 %
Net income 1,90 1,42 +34 %
EPS 0,12 0,09 +34 %
Financial Detail
- Turnover increased to Euro8.13 million (2006: Euro7.18 million), an increase of 13%
- Total expenses amounted to Euro5.47 million (2006: Euro5.48 million)
- Profit before tax increased 45% to Euro2.11 million (2006: Euro1.45 million)
- Net income increased 34% to Euro1.90 million (2006: Euro1.42 million)
- Earnings per share increased 34% to Euro0.12 per share (2006: Euro0.09 per share)
- Company invested Euro7.3 million in Film Rights in the period (2006: Euro7.9
million)
- Cash in hand increased to Euro6.231 million from Euro1.65 million at 30 September
2006
- Film Assets on the balance sheet rise by 16% or Euro5.7 million to Euro42.3 million
since 30 September 2006
- Shareholder's equity increased 7% to Euro30.5 million from Euro28.64 million at 30
September 2006
Activities
The Company is focused on 5 major areas and projects on a global scale:
a. Legend of the Dragon - this property, now consisting of 39 episodes for
global distribution, has now reached Euro9.8 million in turnover and continues
with the launches of DVD and videogame releases in 2007 on PSP, PS2 and
Nintendo Wii systems.
b. Zorro: Generation Z - this property, consisting of 26 episodes plus a film
will be delivered later this year and begin airing in 2008. Major
broadcasters from Italy to Brasil have signed up.
c. Dork Hunters from Outer Space - this property, consisting of 36 episodes
plus a film will likewise as Zorro be delivered later this year and begin
broadcasting in spring 2008. Major broadcasters from Germany to Russia have
signed up and a master toy line from Character Group has been secured.
d. Films - this list of great titles including Jungle Book - Rikki Tikki Tavi
to the Rescue, A Christmas Carol - Scrooge's Ghostly Tales and The Prince
and the Pauper - Double Trouble produced initially for direct-to-DVD
distribution have created a new revenue stream, and steady monthly cash
flow, for the Company.
e. Catalogue - the Company now owns the 6th largest library of animation for
global consumption with nearly 2,000 episodes providing the Company with a
reliable and valuable perpetual asset.
New Venture
The recently formed BKN Home Entertainment division is establishing itself in
the market as a quality and dependable supplier of animated films and TV series
for home entertainment worldwide.
The division, which distributes under its own label in the United Kingdom, has
signed a number of distribution contracts throughout the world with quality
distributors that will maximise global sales of this collection.
They key upcoming DVD release on 14 May in the UK, 15 May in Canada and 22 May
in the USA is Jungle Book - Rikki Tikki Tavi to the Rescue. This will be
distributed by all major customers including Wal-Mart, Asda and Woolworth's.The
release will be supported by BKN with strong TV campaigns in all key markets.
In the last quarter, BKN will have multi-pack major releases, Zorro and
Christmas titles in major markets.
Internet/New Media
BKN owns all of the digital and streaming rights to its major and core
properties. In this fiscal period, approximately 5% of total turnover is
derived from this area and we are working to expand this revenue source.
Because BKN has chosen not to co-produce with third parties in the past,
we own 100% of these properties including copyrights and trademarks and
this is a major competitive advantage as we enter new and innovative
forms of distribution.
Customers
The Company continues to expand its customer base, in all formats and venues,
including such prestigious names as the BBC and GMTV in the UK, Disney/Jetix in
the USA, CBC in Canada, Super RTL and RTL 2 in Germany, Mediaset and RAI in
Italy, TV Espanola in Spain, Nickelodeon in Latin America, UTV in India, Promus
in China, RAI in Italy, as well as Grand Toys, Planeta DeAgostini, The Game
Factory and Warner Home Entertainment worldwide to name a few.
Financial Restructuring
As a result of the recent financial restructuring at the start of 2007, the
Group has reduced the average net interest payable on its debt from 9.2% to
7.9% as well as significantly reducing the potential dilution from its
convertible bonds from 22% to under 11%. The Group would also wish to reduce
this further in the next 12 months by the continued repayment of such
convertible bonds still remaining outstanding.
Amortisation Policy
The Group has a steady and consistent amortisation policy. The programming
assets are capitalised at cost and the book value is then subjected each year
to a value test involving discounting methods to establish the expected net
cash revenues for the next three years of each program. This produces an
amortisation schedule where the write off of the film assets mirrors the
revenues and it is typical to write off 70% of a program within the first three
years. However, all programs must be completely written off within nine years
of delivery regardless of any future income stream expected.
Outlook
Allen Bohbot, Group CEO states "These record earnings for the first half of
fiscal 2007, on top of record earnings recently published for full year 2006,
have given the Company a sound foundation and confidence in the business.
Europe, North America, Asia, Latin America and Africa/Middle East are all
contributing to turnover and we expect each of our operating subsidiaries to be
profitable in fiscal 2007. We believe that our key product offerings will lead
to strong revenues for the balance of 2007 and into 2008 and 2009."
Wayne Mowat, Group CFO, adds "Our costs are under control, our people are
professional and our vendors are proven and established. Our film rights are
conservatively valued on the balance sheet and we feel confident to reach
future goals."
Consolidated Balance Sheet
(in thousands of Euro)
As at As at
31 March 2007 30 Sept 2006
---------------- ---------------
Assets
A. Fixed and Intangible assets
------------------------------
1. Intangible Assets 42,318 36,591
2. Fixed Assets 122 127
----------- ------------
42,440 36,718
B. Other Long term assets
-------------------------
1. Other Assets 209 223
2. Deferred taxes 2,209 2,209
3. Deferred financing costs 879 738
----------- ------------
3,297 3,170
C. Current assets
-----------------
1. Accounts receivable, trade 3,220 1,496
2. Other current assets 315 789
3. Cash and Cash equivalents 6,231 1,648
----------- ------------
9,766 3,933
-------- -------
55,503 43,821
======== =======
Liabilities
A. Shareholders Equity
----------------------
1. Common Stock 15,718 15,718
2. Additional paid in capital 8,286 8,286
3. Other comprehensive income 63 136
4. Retained earnings 6,395 4,495
----------- ------------
30,462 28,635
B. Long term liabilities
1. Bonds 6,381 12,604
2. Bank loans 17,000 0
3. Deferred tax liability 441 441
4. Deferred long term liabilities 11 14
----------- ------------
23,833 13,059
C. Short term liabilities
-------------------------
1. Accrued expenses 331 961
2. Accounts payable. trade 692 1,166
3. Taxes payable 185 0
----------- ------------
1,208 2,127
-------- -------
55,503 43,821
======== =======
Consolidated Statements of Operations
(in thousands of Euro except share data and number of employees)
Six Months to date
31 Mar 2007 31 Mar 2006
----------- -----------
Revenues
Television 3,649 4,202
Consumer Brands 3,904 2,422
Production / Other 573 554
----------------------- ---------- ----------
Total Revenues 8,126 7,178
----------------------- ---------- ----------
Expenses
Depreciation amortisation and Goodwill 1,545 2,004
Producer fees and other direct 434 612
operating costs
Salaries and employee benefits 1,594 1,253
General and administrative 1,898 1,610
----------------------- ---------- ----------
Total expenses 5,471 5,479
----------------------- ---------- ----------
Other Income/ (Expenses)
Interest cost 579 246
Exceptional costs (35) 0
----------------------- ---------- ----------
Income/(loss) before provision 2,111 1,453
for income tax
Provision for tax 211 37
----------------------- ---------- ----------
Net income 1,900 1,416
EBITDA 4,235 3,703
Earnings per share 0.12 0.09
Basic number of shares 15,717,566 15,717,566
Number of employees including
Directors at the end of the period 38 33
The Company employs, at its London studio and at suppliers in India and China,
more than 100 artists to produce its films and series.
Consolidated Statements of Cash Flows
(in thousands of Euro)
Six Months to Six Months to
31 March 2007 31 March 2006
-------------- -------------
Cash flow from Operations
Net Income 1,900 1,416
Depreciation and amortization 1,545 2,004
-------- --------
3,445 3,420
Changes in Operating assets and liabilities
Accounts receivable (1,724) 1,163
Tax receivable 185 0
Other current assets 474 350
Other long term assets 14 (29)
Deferred financing costs (141) (435)
Accounts payable , trade (474) 44
Accruals (630) (249)
Other liabilities (76) (4)
-------- --------
Net cash generated by operating activities 1,073 4,260
Cash flow from investing activities
Intangible Assets/Programming rights (7,251) (7,911)
Property, equipment, and leasehold improvement (16) (40)
-------- --------
Net cash used in investing activities (7,267) (7,951)
Cash flow from financing activities
Bank overdraft and other loans 17,000 0
Convertible bond (6,223) 5,681
Purchase of own shares 0 (425)
Comprehensive income/(loss) 0 94
-------- --------
Net cash provided by financing activities 10,777 5,350
Net increase/(decrease) in cash and cash
equivalents 4,583 1,659
Cash and cash equivalents at beginning of
period 1,648 384
-------- --------
Cash and cash equivalents at end of period 6,231 2,043
-------- --------
Copies of the interim financial statement have been posted at the Company's
website (www.bknkids.com) and at the website of the Deutsche Boerse. Further
copies are available from the Company's Registered Office in Germany at Im
Mediapark 8, 50670 Koln Germany and in the United Kingdom at BKN New Media Ltd,
77 Kingsway, London WC2B 6SR.
Enquiries:
BKN International AG
Allen Bohbot, Chief Executive Officer Tel: +44 (0)207 269 8683
allen.bohbot@bknkids.com
---------------------------------
Wayne Mowat, Chief Financial Officer Tel: +44 (0)207 269 8687
wayne.mowat@bknkids.com
---------------------------------
Sascha Ziemann, Finance Manager Tel: +49 221 5540 5190
sascha.ziemann@bknkids.com
----------------------------------
Martina Michels Tel: +49 221 5540 5191
Martina.michels@bknkids.com
----------------------------------
Laura Tapias, Managing Director Tel: +34 93 368 18 00
laura.tapias@bknkids.com
-----------------------------------
Nicola Andrews, Managing Director Tel: +44 (0)207 269 8677
Nicola.andrews@bknkids.com
-----------------------------------
Matthew Graham-Clare, Managing Director Tel: +44 (0)207 269 8678
matthew.graham-clare@bknkids.com
------------------------------------
www.bknkids.com
------------------
Nominated Adviser & UK Broker:
Hanson Westhouse Limited
Louis Castro / Richard Baty Tel: +44 (0)20 7601 6100
louis.castro@hansonwesthouse.com
richard.baty@hansonwesthouse.com
Seydler AG in Germany Designated Sponsor
Henriette Domhardt Tel: +49 69-92054-137
henriette.domhardt@cbseydler.com
----------------------------------
Notes to editors:
About BKN:
BKN International AG is a global animation company engaged in the distribution
and marketing of animated children's television programmes and the marketing of
related consumer products (licensing and merchandising) in all forms. BKN has
worked on numerous successful animation projects.
The Company is currently listed on the Deutsche Bourse and AIM and it operates
all over the world. BKN has successfully negotiated distribution deals in over
80 countries and territories in the children's programming market.
The Company's Film Library includes:
- Legend of the Dragon - Robin Hood
- Kong - The Animated Series - Zorro: Generation Z
- Kong - King of Atlantis - Roswell Conspiracies
- Kong II - Return to the Jungle - Dork Hunters from Outer Space
- A Christmas Carol - Jungle Book
- Ends -
This information is provided by RNS
The company news service from the London Stock Exchange
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