TIDMGON
RNS Number : 1735G
Galleon Holdings PLC
27 January 2010
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| Date: | 27 January 2009 |
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| On behalf of: | Galleon Holdings plc ('Galleon', 'the Company' or the 'the |
| | Group') |
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| Embargoed | 0700hrs |
| until: | |
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Galleon Holdings plc
Preliminary results for the year ended 30 September 2009
Galleon Holdings plc (AIM: GON), the AIM listed entertainment media company that
develops and produces multiplatform entertainment properties with a focus on
emerging markets, is pleased to announce its preliminary results for the year
ended 30 September 2009.
Highlights:
* Group revenue increased to GBP27.1 million a rise of 123% (2008: GBP12.1
million)
* Profit before tax* increased to GBP1,377,000, a rise of 60% (2008: GBP861,000)
* EBITDA** increased to GBP2.2m, a rise of 92% (2008: GBP1.1m)
* China TV and Wireless infrastructure established
* Significant growth in media business
*Adjusted profit before tax is before charges for the impairment of goodwill of
GBP109,000 and share option expense of GBP134,000
**Adjusted EBITDA is before charges for share option expense GBP134,000
Commenting on the results, Stephen Green, CEO of Galleon Holdings, said:
"Whilst we have certainly not been immune to the global recession, the business
has gone from strength to strength over the last financial year and we believe
that we have weathered the worst of it. Though it is only right to remain
cautious, we are confident that we have the correct strategy in place to move
the business forward and take advantage of the many opportunities that are
emerging worldwide."
Enquiries:
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| Galleon Holdings plc | www.galleonplc.com |
+----------------------------------------------+---------------------------------+
| Stephen Green, Chief Executive | Tel: 020 8742 3636 |
+----------------------------------------------+---------------------------------+
| | |
+----------------------------------------------+---------------------------------+
| Cenkos Securities (Nominated Adviser & | |
| Broker) | |
+----------------------------------------------+---------------------------------+
| Ken Fleming / Jon Fitzpatrick | Tel: 0131 220 9772 / 0131 220 |
| | 9773 |
+----------------------------------------------+---------------------------------+
| | |
+----------------------------------------------+---------------------------------+
| Redleaf Communications | Galleon@redleafpr.com |
+----------------------------------------------+---------------------------------+
| Wendy Watherston / Mike Ward / Lucy Salaman | Tel: 020 7566 6700 |
+----------------------------------------------+---------------------------------+
CHAIRMAN'S STATEMENT
I am delighted to report a significant rise in Galleon's group revenue for the
financial year ended 30 September 2009. The Group has made good progress in
executing its global media strategy, resulting in a profit before tax* of
GBP1,377,000 compared to GBP861,000 the previous year.
Media growth
Galleon has continued to grow its media business, and thus the business overall,
despite the impact of the global economic downturn on the media and promotions
sectors. A key factor of this growth has been that 80% of the Group's media
revenues come from China, a region which has bucked the trend and seen its media
sector grow in the last financial year despite the global economic environment.
Galleon's Multiplatform Entertainment Property ("MEP") model means that it
derives revenue from a diverse range of activities that include the "new media
sector", and are not wholly reliant on traditional media revenues such as
sponsorship and advertising (an area significantly affected by the economic
downturn). The continuing fragmentation of entertainment channels in the media
sector has meant that advertising budgets for the big consumer brands are being
allocated differently and the composition of Galleon's MEPs are the perfect fit
for these brands. Galleon's MEPs offer powerful entertainment based
communication directly to the consumer through channels that allow ongoing
communication. The current reference for this is "Branded Entertainment".
Croco's revenue growth was slowed this year as a result of consumer goods
companies holding back on their promotional spend. Although, there is evidence
to show that this is now relaxing, Croco has continued to diversify beyond the
food and drinks markets to provide greater breadth in its business base going
forward.
Galleon has seen further growth in the online and digital games markets both
inside and outside of China. These sub sectors of the media market are becoming
increasingly important, with significant revenue prospects to those who can
offer entertainment directly to consumers. Currently Galleon achieves this
through Yunbo, its mobile phone aggregator in China, whilst also building
relationships with the larger online portals and operators in all markets.
Outlook
Galleon has now established a strong media platform in China and built a team
with the understanding of both Chinese and Western media markets. This team has
the commercial and creative skills to bring these two media markets together for
the first time through two models. The first model consists of developing and
launching MEPs in China and then selling the format and licensing rights into
the rest of the world. The second model works by taking Western entertainment,
localising it for the Chinese market, and then distributing it directly through
Galleon's own channels or via third parties. Galleon has demonstrated the first
of these models with Super Soccer Star and now have a slate of new IP to
introduce into China and the West in 2010. Galleon expects to lay the
foundations for the second model during the course of 2010 with opportunities in
China and Western collaboration for mobile, online games and audio visual
entertainment. To do this, the Group plans to add to its skill base and
operations within the areas of online games and Branded Entertainment in
particular.
The outlook for 2010 continues to be encouraging with some exciting developments
including the launch of new properties, new business channels and higher margin
product offerings designed to improve our overall profitability.
I would like to take this opportunity to thank both shareholders and employees
for their support during the last year.
David Wong, Chairman
* Adjusted profit before tax is before charges for the impairment of goodwill of
GBP109,000 and share option expense of GBP134,000
CHIEF EXECUTIVE'S STATEMENT
Financial Overview
The Group has seen a 123% increase in revenues over the last financial year,
including the first full year of trading with Phoenix Investment Global Limited
and Lushy Assets Limited. Galleon's product division, Croco, experienced a
difficult year due to the economic downturn, fluctuations in oil prices and
foreign exchange rates in the first half of the year, resulting in a loss for
the full year of GBP110,000. The media business outperformed during the year to
compensate for this loss and Croco has since seen margins restored. Whilst there
was a higher level of transactional based revenues from China this
year, gross profit increased by 58% to GBP5.8m. EBITDA also increased by 92% to
GBP2.2m for the year after adjusting for share options expenses.
In June, the Group raised GBP3.85m, before expenses, to further expand the
growth of its media business in China and in particular to fund the development
and production of audio visual content and online games. At 30 September 2009
the Group had a cash balance of GBP4.5m and no borrowings.
Group Strategy
During the course of this year the Company has successfully executed the first
stages of its strategy to develop MEPs that can be launched in China and
exported around the world.
In China we have built a profitable media operation providing a range of
services through Yunbo, our mobile aggregator, embedding games in mobile phones
and leveraging our relationships with all the main mobile operators, handset
manufacturers, TV broadcasters, cinema distributors and online operators. In
addition, we have a strong development team that creatively unlocks media
content opportunities in China whilst also developing MEPs, such as Super Soccer
Star, that can travel beyond China. It is testament to this strategy that the
media division has continued to grow over the last 12 months despite the
inclement economic environment.
Galleon is now strategically positioned to capitalise on any opportunities
within the growing Chinese media market. The Group has a flexible revenue model
and multiple revenue streams, driven by a branded franchise approach which is
largely culturally agnostic and not reliant on production margins. This strategy
supports properties with robust business models and in turn greatly widens the
number of markets available.
Going forward the Group believes it is important to grow it's presence in the
online media sector. We are seeing the strategic and financial benefits of
direct to consumer distribution through the mobile sector in China and want to
replicate this in the online area. China is the largest online market in the
world with more than 380 million people online. Their voracious consumption of
all online content (linear and non linear) indicates that growth in this sector
will be a long term trend. The distribution of non-Chinese content has become
highly regulated and there are many barriers to entry. These factors work in
Galleon's favour as its strategy of "operating from within" provides the
relationships needed to unlock the value that resides in the market either
through its own distribution, or by working with established partners. This
makes Galleon a significant partner for any Western media entertainment company
or international consumer brand seeking to operate in China. To this end, during
2010 we will focus on expanding operations by offering digital content
localisation and distribution through mobile and online, as well as branded
entertainment solutions. The Group shall also be transitioning its mobile
operation towards lower volume and higher margin based activities.
Outside of China, Galleon has been active in securing a foothold in the United
States. The Group's US strategy is based upon leveraging the appeal of its MEPs
to large consumer brands and uses this to secure distribution in a very
competitive market. Galleon has therefore chosen to work with branded
entertainment specialists, Dragonfruit Entertainment, on all properties and has
taken a minority stake of 19% in this organisation. The Board is seeing evidence
that this relationship could deliver penetration for Galleon's brands on a
regional basis in the US and can also help to unlock global branded
entertainment discussions involving these brands in the Company's Chinese
operations.
Entertainment Division
Galleon Entertainment has had considerable success this last 12 months both in
exploiting Super Soccer Star and also developing new MEPs to come to market in
the near future.
Super Soccer Star
Super Soccer Star is a MEP which has a prime time reality TV show that is
produced in conjunction with Chelsea Football Club. Having aired in China and
then Malaysia, Super Soccer Star has been sold into India, North Africa, Russia,
Eastern Europe, Scandinavia, Middle East and Vietnam over the year. During March
2009, Galleon secured a strategic deal with Chelsea Football Club to allow a
long term global roll out of the property. India, the US and Mexico are
priorities for the Group in the coming 12 months. This brand has proved that
Galleon is capable of finding a creative solution to entertainment that can span
both China and the West and a commercial model that works in multiple
territories. This property has also helped to develop a dialogue with the big
consumer brands, particularly through Dragonfruit Entertainment.
Super Fashion Star
Galleon has taken the successful MEP model developed for Super Soccer Star and
applied it to the world of fashion. Super Fashion Star ("SFS") is a search for a
nation's most talented young model, stylist and designer. It is brought to
market, at first, online where the young talent can showcase itself and also
compete in the SFS online game. The best of the online recruitment then take
part in a reality TV show where the winners receive the opportunity to put on a
fashion show at one of the biggest fashion events in the world, London Fashion
Week. The global partner for SFS is Fashion Fringe at Covent Garden ("FFCG").
FFCG is an IMG operated fashion search for cutting edge, iconoclastic talent in
design and creativity. The franchise is strong in all revenue streams from
sponsorship to merchandise and online games.
During the course of 2010 Galleon is planning to launch SFS in China online and
through TV, and in the rest of the world through online channels.
Sokator - 442
Sokator-442 is a MEP based on a science fiction intergalactic soccer team that
parallels the best attributes within the real game. It is a hybrid model that
combines revenues from animation, live action TV production and online games.
The property will be brought to the consumer through three events in 2010:
1. An animated movie that brings to life the world and the characters from
Sokator. This will be produced for release in conjunction with the World Cup in
the summer of 2010. It is a coproduction with leading Asian movie distributor
Polybona who will be distributing the movie in cinemas across China and South
East Asia. In the rest of the world the movie will be sold to TV broadcasters.
2. An online game. In this game you are an intergalactic soccer manager. This is
already distributed through an online games portal operator Spil Games outside
of China and will be launched in China in the spring of 2010 with leading
browser based games operator Game 5. The game is free to play, with additional
premium content and functionality available for a small fee. Galleon also
expects to generate revenue through sponsorship deals.
3. A TV gameshow that combines live action and animation. Children and families
take part in soccer related challenges, all with the science fiction theme. The
gameshow is expected to be sold to broadcasters in China and around the world
during 2010.
Apollo's Pad
Apollo's Pad is a puppet based young adult comedy that was initially launched
online and has since completed a successful migration to TV. Webisode content
from the website was packaged and broadcasted in Canada by broadcaster Spike TV
in early 2009. This was a huge ratings success and was the broadcaster's highest
tracked property online. As a result of this, Spike TV has commissioned 26 x 11
minute episodes. These are in production and will air in the early summer of
2010. Galleon plans to distribute this content into other markets throughout the
year.
Skunk fu!
Skunk fu! is a children's animated TV series that has been sold into over 100
territories worldwide. Galleon owns 15% of the IP and also controls the
licensing and merchandising worldwide. There is considerable appetite for this
property in China and the Group believe that it can apply the same movie/games
model as used for Sokator-442 to Skunk fu!.
Mysti
Mysti is a tween girl TV series that has aired on the BBC. Galleon has entered
into a development deal with Planet Nemo, a French animation studio, to produce
a new series with a new treatment and script submitted to broadcasters in key
territories. The intention is to produce the next series as a French/Canadian
co-production thereby benefitting from the various tax credits and subsidies in
both territories.
Product Division
Traditionally our product division Croco has specialised on designing and making
collectible products that are used as free gifts by large food and drink
companies in emerging markets to drive sales and grow market share. These food
and drinks companies delayed or cancelled many of the promotions that they would
normally do during 2009 and this damaged the division's profits for the year.
Although business is returning to normal in this area the division has been
focussing on diversifying its revenues by looking at markets outside of the food
and drink sector where it can apply the same skills. We also believe that there
is considerable business to be won in Asia and have made some steps into these
markets with a few trial orders.
Outlook
Galleon currently has a successful wireless distribution business in China with
strong media relationships in TV and cinema distribution. During 2010 the Board
believe that Galleon can significantly accelerate the growth of the business by
expanding its Chinese operations to include development and localisation of
digital content and online distribution. On a more global basis, Galleon also
intend to grow its Branded Entertainment operations as the ability to access
funds from global consumer brands will unlock the US and place Galleon as a
multimedia player with a China/US axis. With at least two new entertainment
brands launching in the market in 2010, the Board believe that Galleon will
continue to grow its multimedia reach in the marketplace and thereby increase
its value considerably.
Stephen Green, Chief Executive Officer
GALLEON HOLDINGS PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2009
+----------------------------------------+-------+-----+-----------+------------+
| | | | Year | Year |
| | | | ended 30 | ended 30 |
| | | | September | September |
| | | | 2009 | 2008 |
+----------------------------------------+-------+-----+-----------+------------+
| | Note | | GBP'000 | GBP'000 |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| Revenue | 3 | | 27,068 | 12,125 |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| Cost of sales | | | (21,247) | (8,433) |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| Gross profit | | | 5,821 | 3,692 |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| Administrative expenses | | | (4,847) | (3,252) |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| EBITDA | | | 2,042 | 1,056 |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| Depreciation, amortisation and | | | (1,068) | (616) |
| impairment | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| Profit from operations | | | 974 | 440 |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| Finance income | | | 165 | 289 |
+----------------------------------------+-------+-----+-----------+------------+
| Finance costs | | | (5) | (8) |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| Profit before taxation | | | 1,134 | 721 |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| Taxation | 4 | | (132) | (285) |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| Profit for the financial year | | | 1,002 | 436 |
+----------------------------------------+-------+-----+-----------+------------+
| | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| Earnings per share | | | | |
+----------------------------------------+-------+-----+-----------+------------+
| - Basic | 5 | | 0.8p | 0.5p |
+----------------------------------------+-------+-----+-----------+------------+
| - Diluted | | | 0.6p | 0.3p |
+----------------------------------------+-------+-----+-----------+------------+
All of the activities of the group are classed as continuing.
EBITDA is defined as earnings before interest, tax, depreciation, amortisation
and impairment.
GALLEON HOLDINGS PLC
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED INCOME AND EXPENSE
FOR THE YEAR ENDED 30 SEPTEMBER 2009
+------------------------------+-----+------------------+-----------+--+-----------+
| | | | 2009 | | 2008 |
+------------------------------+-----+------------------+-----------+--+-----------+
| | | | GBP'000 | | GBP'000 |
+------------------------------+-----+------------------+-----------+--+-----------+
| | | | | | |
+------------------------------+-----+------------------+-----------+--+-----------+
| Profit for the financial | | | 1,002 | | 436 |
| year | | | | | |
+------------------------------+-----+------------------+-----------+--+-----------+
| | | | | | |
+------------------------------+-----+------------------+-----------+--+-----------+
| Foreign currency translation | | | 1,590 | | 182 |
| differences arising on | | | | | |
| consolidation | | | | | |
+------------------------------+-----+------------------+-----------+--+-----------+
| Total recognised income and | | | 2,592 | | 618 |
| expense attributable to | | | | | |
| equity shareholders | | | | | |
+------------------------------+-----+------------------+-----------+--+-----------+
| | | | | | |
+------------------------------+-----+------------------+-----------+--+-----------+
GALLEON HOLDINGS PLC
CONSOLIDATED BALANCE SHEET
30 SEPTEMBER 2009
+-----------------------------------+------+-----------+------------+------------+
| | | | 30 | 30 |
| | | | September | September |
| | | | 2009 | 2008 |
+-----------------------------------+------+-----------+------------+------------+
| | Note | | GBP'000 | GBP'000 |
+-----------------------------------+------+-----------+------------+------------+
| ASSETS | | | | |
+-----------------------------------+------+-----------+------------+------------+
| | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Non-current assets | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Property, plant and equipment | | | 336 | 371 |
+-----------------------------------+------+-----------+------------+------------+
| Available for sale financial | | | 249 | - |
| assets | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Intangible assets | 6 | | 15,473 | 11,950 |
+-----------------------------------+------+-----------+------------+------------+
| Loans and receivables | | | 1,888 | 1,866 |
+-----------------------------------+------+-----------+------------+------------+
| | | | 17,946 | 14,187 |
+-----------------------------------+------+-----------+------------+------------+
| | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Current assets | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Inventories | | | 2,484 | 3,934 |
+-----------------------------------+------+-----------+------------+------------+
| Trade and other receivables | | | 6,753 | 3,637 |
+-----------------------------------+------+-----------+------------+------------+
| Cash and cash equivalents | | | 4,514 | 1,324 |
+-----------------------------------+------+-----------+------------+------------+
| | | | 13,751 | 8,895 |
+-----------------------------------+------+-----------+------------+------------+
| Total assets | | | 31,697 | 23,082 |
+-----------------------------------+------+-----------+------------+------------+
| | | | | |
+-----------------------------------+------+-----------+------------+------------+
| LIABILITIES | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Non-current liabilities | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Deferred taxation | | | 301 | 397 |
+-----------------------------------+------+-----------+------------+------------+
| | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Current liabilities | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Trade and other payables | | | 4,230 | 2,940 |
+-----------------------------------+------+-----------+------------+------------+
| Borrowings | | | 8 | - |
+-----------------------------------+------+-----------+------------+------------+
| Corporation taxation | | | 575 | 233 |
+-----------------------------------+------+-----------+------------+------------+
| | | | 4,813 | 3,173 |
| | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Total liabilities | | | 5,114 | 3,570 |
+-----------------------------------+------+-----------+------------+------------+
| | | | | |
+-----------------------------------+------+-----------+------------+------------+
| EQUITY | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Share capital | | | 1,400 | 998 |
+-----------------------------------+------+-----------+------------+------------+
| Shares to be issued | | | 4,018 | 5,864 |
+-----------------------------------+------+-----------+------------+------------+
| Reserves | | | 21,165 | 12,650 |
+-----------------------------------+------+-----------+------------+------------+
| | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Equity interests attributable to | 7 | | 26,583 | 19,512 |
| equity holders of the company | | | | |
+-----------------------------------+------+-----------+------------+------------+
| | | | | |
+-----------------------------------+------+-----------+------------+------------+
| Total equity and total | | | 31,697 | 23,082 |
| liabilities | | | | |
+-----------------------------------+------+-----------+------------+------------+
| | | | | |
+-----------------------------------+------+-----------+------------+------------+
GALLEON HOLDINGS PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 30 SEPTEMBER 2009
+----------------------------------------+-----------+-----------+-------------+
| | Notes | Year | Year ended |
| | | ended | 30 |
| | | 30 | September |
| | | September | 2008 |
| | | 2009 | |
+----------------------------------------+-----------+-----------+-------------+
| | | GBP'000 | GBP'000 |
+----------------------------------------+-----------+-----------+-------------+
| | | | |
+----------------------------------------+-----------+-----------+-------------+
| Operating activities | | | |
+----------------------------------------+-----------+-----------+-------------+
| Profit/(loss) for the year | | 1,002 | 436 |
+----------------------------------------+-----------+-----------+-------------+
| Taxation | | 132 | 285 |
+----------------------------------------+-----------+-----------+-------------+
| Finance (income)/ cost | | (160) | (281) |
+----------------------------------------+-----------+-----------+-------------+
| Loss on sale of property, plant and | | - | 2 |
| equipment | | | |
+----------------------------------------+-----------+-----------+-------------+
| Depreciation of property, plant and | | 336 | 169 |
| equipment | | | |
+----------------------------------------+-----------+-----------+-------------+
| Amortisation of intangible assets and | | 732 | 447 |
| impairment of goodwill | | | |
+----------------------------------------+-----------+-----------+-------------+
| Decrease/(increase) in inventories | | 1,450 | (3,176) |
+----------------------------------------+-----------+-----------+-------------+
| (Increase) in trade and other | | (2,460) | (2,212) |
| receivables | | | |
+----------------------------------------+-----------+-----------+-------------+
| Increase in trade and other payables | | 1,515 | 2,016 |
+----------------------------------------+-----------+-----------+-------------+
| Share based payments | | 134 | 79 |
+----------------------------------------+-----------+-----------+-------------+
| Foreign exchange | | (350) | 171 |
+----------------------------------------+-----------+-----------+-------------+
| | | | |
+----------------------------------------+-----------+-----------+-------------+
| | | 2,331 | (2,064) |
+----------------------------------------+-----------+-----------+-------------+
| Taxation paid | | (142) | (131) |
+----------------------------------------+-----------+-----------+-------------+
| Interest received/ (paid) | | 8 | 281 |
+----------------------------------------+-----------+-----------+-------------+
| | | | |
+----------------------------------------+-----------+-----------+-------------+
| Net cash inflow/(outflow) from | | 2,197 | (1,914) |
| operating activities | | | |
+----------------------------------------+-----------+-----------+-------------+
| | | | |
+----------------------------------------+-----------+-----------+-------------+
| Investing activities | | | |
+----------------------------------------+-----------+-----------+-------------+
| Purchase of property, plant and | | (271) | (479) |
| equipment | | | |
+----------------------------------------+-----------+-----------+-------------+
| Purchase of intangible assets | | (2,280) | (299) |
+----------------------------------------+-----------+-----------+-------------+
| Purchase of subsidiary undertakings | | (126) | (2,226) |
+----------------------------------------+-----------+-----------+-------------+
| Purchase of available for sale | | (178) | - |
| financial assets | | | |
+----------------------------------------+-----------+-----------+-------------+
| Cash acquired with purchase of | | - | 331 |
| subsidiary undertakings | | | |
+----------------------------------------+-----------+-----------+-------------+
| Net cash outflow from investing | | (2,855) | (2,673) |
| activities | | | |
+----------------------------------------+-----------+-----------+-------------+
| | | | |
+----------------------------------------+-----------+-----------+-------------+
| Financing activities | | | |
+----------------------------------------+-----------+-----------+-------------+
| Issue of shares | | 3,850 | 8,000 |
+----------------------------------------+-----------+-----------+-------------+
| Expenses paid in connection with share | | (184) | (209) |
| issues | | | |
+----------------------------------------+-----------+-----------+-------------+
| Repayment of loan notes | | - | (500) |
+----------------------------------------+-----------+-----------+-------------+
| Loan advanced to supplier | | - | (1,581) |
+----------------------------------------+-----------+-----------+-------------+
| Receipts from borrowings | | 182 | - |
+----------------------------------------+-----------+-----------+-------------+
| Net cash inflow from financing | | 3,848 | 5,710 |
| activities | | | |
+----------------------------------------+-----------+-----------+-------------+
| | | | |
+----------------------------------------+-----------+-----------+-------------+
| Movement in cash and cash equivalents | | 3,190 | 1,123 |
+----------------------------------------+-----------+-----------+-------------+
| Cash and cash equivalents brought | | 1,324 | 201 |
| forward | | | |
+----------------------------------------+-----------+-----------+-------------+
| | | | |
+----------------------------------------+-----------+-----------+-------------+
| Cash and cash equivalents carried | | 4,514 | 1,324 |
| forward | | | |
+----------------------------------------+-----------+-----------+-------------+
| | | | |
+----------------------------------------+-----------+-----------+-------------+
| Significant non-cash movements | | 70 | - |
+----------------------------------------+-----------+-----------+-------------+
| Purchase of available for sale | | | |
| financial assets settled by shares | | | |
+----------------------------------------+-----------+-----------+-------------+
| Purchase of subsidiary settled by | | 2,454 | 2,328 |
| shares and loan note | | | |
+----------------------------------------+-----------+-----------+-------------+
1. GENERAL INFORMATION
Galleon Holdings plc is incorporated and domiciled in the United Kingdom.
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in section 434 of the Companies Act
2006. The consolidated balance sheet at 30 September 2009 and the consolidated
income statement, the consolidated statement of cash flows and the associated
notes for the year then ended have been extracted from the Group's financial
statements upon which the auditor's opinion is unqualified and does not include
any statement under section 498 of the Companies Act 2006. The statutory
accounts for the year ended 30 September 2009 will be delivered to the Registrar
of Companies following the Group's Annual General Meeting.
The consolidated balance sheet at 30 September 2008 and the consolidated income
statement, the consolidated statement of cash flows and the associated notes
for the year then ended have been extracted from the Group's financial
statements upon which the auditor's opinion is unqualified and does not include
any statement under section 237 (2) or (3) of the Companies Act 1985. The
statutory accounts for the year ended 30 September 2008 have been delivered to
the Registrar of Companies.
2. ACCOUNTING POLICIES
Basis of preparation
The Group financial statements have been prepared under the historical cost
convention and in accordance with International Financial Reporting Standards as
adopted by the European Union (IFRS). The Company's shares are listed on the AIM
market of the London Stock Exchange.
The principal accounting policies are detailed in the Group's annual report and
financial statements.
3. SEGMENTAL ANALYSIS
For management purposes, the Group is currently organised into two classes of
operations and management consider business class segments to be the basis of
its primary segmental information.
+-----------------------+------------+------------+-----+------------+------------+
| | 2009 | 2008 | | 2009 | 2008 |
+-----------------------+------------+------------+-----+------------+------------+
| | Revenue | Revenue | | Profit | Profit |
| | GBP'000 | GBP'000 | | GBP'000 | GBP'000 |
+-----------------------+------------+------------+-----+------------+------------+
| | | | | | |
+-----------------------+------------+------------+-----+------------+------------+
| Entertainment | 21,499 | 7,049 | | 1,111 | (354) |
+-----------------------+------------+------------+-----+------------+------------+
| | | | | | |
+-----------------------+------------+------------+-----+------------+------------+
| Product (Croco) | 5,569 | 5,076 | | (137) | 794 |
+-----------------------+------------+------------+-----+------------+------------+
| | | | | | |
+-----------------------+------------+------------+-----+------------+------------+
| | 27,068 | 12,125 | | 974 | 440 |
+-----------------------+------------+------------+-----+------------+------------+
| | | | | | |
+-----------------------+------------+------------+-----+------------+------------+
| | | | | | |
+-----------------------+------------+------------+-----+------------+------------+
| Net finance income/ | | | | 160 | 281 |
| (cost) | | | | | |
+-----------------------+------------+------------+-----+------------+------------+
| Share of profits from | | | | - | - |
| associates | | | | | |
+-----------------------+------------+------------+-----+------------+------------+
| Taxation | | | | (132) | (285) |
+-----------------------+------------+------------+-----+------------+------------+
| | | | | | |
+-----------------------+------------+------------+-----+------------+------------+
| Profit for the year | | | | 1,002 | 436 |
+-----------------------+------------+------------+-----+------------+------------+
| | | | | | |
+-----------------------+------------+------------+-----+------------+------------+
+--------------------+----------+-------------+----------+----------+-------------+----------+
| | | 2009 | | | 2008 | |
+--------------------+----------+-------------+----------+----------+-------------+----------+
| | Assets | Liabilities | Net | Assets | Liabilities | Net |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------+----------+-------------+----------+----------+-------------+----------+
| | | | | | | |
+--------------------+----------+-------------+----------+----------+-------------+----------+
| Entertainment | 30,547 | (4,849) | 25,698 | 21,627 | (2,708) | 18,919 |
+--------------------+----------+-------------+----------+----------+-------------+----------+
| Product (Croco) | 1,150 | (265) | 885 | 1,455 | (862) | 593 |
+--------------------+----------+-------------+----------+----------+-------------+----------+
| | | | | | | |
+--------------------+----------+-------------+----------+----------+-------------+----------+
| | 31,697 | (5,114) | 26,583 | 23,082 | (3,570) | 19,512 |
+--------------------+----------+-------------+----------+----------+-------------+----------+
4. TAXATION
+-------------------------------------------------------+-----------+-----------+
| | 2009 | 2008 |
+-------------------------------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+-------------------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------------------+-----------+-----------+
| United Kingdom corporation tax at 28% (2008 : 30%) | (4) | 233 |
| Adjustment in respect of prior year | (38) | - |
+-------------------------------------------------------+-----------+-----------+
| Overseas taxation | 271 | 131 |
+-------------------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------------------+-----------+-----------+
| Total current taxation | 229 | 364 |
+-------------------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------------------+-----------+-----------+
| Deferred taxation | | |
+-------------------------------------------------------+-----------+-----------+
| Origination of temporary differences | (92) | 160 |
+-------------------------------------------------------+-----------+-----------+
| Adjustments in respect of prior years | (5) | (239) |
+-------------------------------------------------------+-----------+-----------+
| | | |
+-------------------------------------------------------+-----------+-----------+
| Taxation charge for the year | 132 | 285 |
+-------------------------------------------------------+-----------+-----------+
5. EARNINGS PER SHARE
The calculation of the basic and dilutive earnings per share is shown below.
+---------------------------------------------------------+-----------+-----------+
| | 2009 | 2008 |
+---------------------------------------------------------+-----------+-----------+
| | GBP'000 | GBP'000 |
+---------------------------------------------------------+-----------+-----------+
| | | |
+---------------------------------------------------------+-----------+-----------+
| Profit after tax | 1,002 | 436 |
+---------------------------------------------------------+-----------+-----------+
| | | |
+---------------------------------------------------------+-----------+-----------+
| Weighted average number of shares (No in 000's) | 119,474 | 96,724 |
+---------------------------------------------------------+-----------+-----------+
| | | |
+---------------------------------------------------------+-----------+-----------+
| Weighted average number of share options | 10,676 | 871 |
+---------------------------------------------------------+-----------+-----------+
| Shares to be issued | 24,559 | 29,692 |
+---------------------------------------------------------+-----------+-----------+
| | | |
+---------------------------------------------------------+-----------+-----------+
| Weighted average number of shares (No 000's) used for | 154,709 | 127,287 |
| diluted earnings per share | | |
+---------------------------------------------------------+-----------+-----------+
| | | |
+---------------------------------------------------------+-----------+-----------+
| Basic earnings per share (in pence) | 0.8p | 0.5p |
+---------------------------------------------------------+-----------+-----------+
| | | |
+---------------------------------------------------------+-----------+-----------+
| Diluted earnings per share (in pence) | 0.6p | 0.3p |
+---------------------------------------------------------+-----------+-----------+
6. INTANGIBLE ASSETS
+------------------------------------------+----+-----------+------------+---------------+
| | | |
+------------------------------------------+----------------+----------------------------+
| | | | 2009 | 2008 |
+------------------------------------------+----+-----------+------------+---------------+
| | | | GBP'000 | GBP'000 |
+------------------------------------------+----+-----------+------------+---------------+
| | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| Goodwill (a) | | | 11,018 | 9,154 |
+------------------------------------------+----+-----------+------------+---------------+
| Other intangible assets | | | 4,455 | 2,796 |
+------------------------------------------+----+-----------+------------+---------------+
| | | | 15,473 | 11,950 |
+------------------------------------------+----+-----------+------------+---------------+
| (a) Goodwill | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| | | | | Goodwill |
| | | | | on |
| | | | | consolidation |
+------------------------------------------+----+-----------+------------+---------------+
| | | | | GBP'000 |
+------------------------------------------+----+-----------+------------+---------------+
| Cost | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| At 1 October 2007 | | | | 13,828 |
+------------------------------------------+----+-----------+------------+---------------+
| Additions | | | | 8,666 |
+------------------------------------------+----+-----------+------------+---------------+
| | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| At 1 October 2008 | | | | 22,494 |
+------------------------------------------+----+-----------+------------+---------------+
| Fair value adjustment to additions in | | | | 191 |
| prior year | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| Additional deferred consideration | | | | 1,276 |
| payable | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| Deferred consideration not payable | | | | (657) |
+------------------------------------------+----+-----------+------------+---------------+
| Disposals | | | | (339) |
+------------------------------------------+----+-----------+------------+---------------+
| Foreign exchange | | | | 1,163 |
+------------------------------------------+----+-----------+------------+---------------+
| | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| At 30 September 2009 | | | | 24,128 |
+------------------------------------------+----+-----------+------------+---------------+
| | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| Impairment | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| At 1 October 2007 | | | | 13,279 |
+------------------------------------------+----+-----------+------------+---------------+
| Impairment charged to administrative | | | | 61 |
| expenses | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| At 1 October 2008 | | | | 13,340 |
+------------------------------------------+----+-----------+------------+---------------+
| Impairment charged to administrative | | | | 109 |
| expenses | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| Disposals | | | | (339) |
+------------------------------------------+----+-----------+------------+---------------+
| At 30 September 2009 | | | | 13,110 |
| | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| Net book amount at 30 September 2009 | | | | 11,018 |
+------------------------------------------+----+-----------+------------+---------------+
| | | | | |
+------------------------------------------+----+-----------+------------+---------------+
| Net book amount at 30 September 2008 | | | | 9,154 |
+------------------------------------------+----+-----------+------------+---------------+
(b) Other intangible assets
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| | Intellectual | Trademarks | Website | Licences | Software | Other | Total |
| | property | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
| | rights | | | | | | |
| | GBP'000 | | | | | | |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Cost | | | | | | | |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| At 1 October 2007 | 1,943 | 33 | 16 | 63 | - | - | 2,055 |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Additions | 250 | 23 | 2 | - | 202 | - | 477 |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Additions from | - | - | - | 395 | 24 | 718 | 1,137 |
| acquisition | | | | | | | |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| | | | | | | | |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| At 30 September 2008 | 2,193 | 56 | 18 | 458 | 226 | 718 | 3,669 |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Additions | 2,160 | 15 | - | - | 61 | 43 | 2,279 |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Disposals | (92) | - | - | - | - | - | (92) |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Foreign Exchange | - | - | - | - | 3 | - | 3 |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| At 30 September 2009 | 4,261 | 71 | 18 | 458 | 290 | 761 | 5,859 |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| | | | | | | | |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Amortisation | | | | | | | |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| At 1 October 2007 | 411 | 7 | 6 | 63 | - | - | 487 |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Provided during the year | 193 | 5 | 3 | 24 | 45 | 116 | 386 |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| | | | | | | | |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| At 30 September 2008 | 604 | 12 | 9 | 87 | 45 | 116 | 873 |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Provided during the year | 355 | 7 | 4 | 40 | 53 | 164 | 623 |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Disposals | (92) | - | - | - | - | - | (92) |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Foreign Exchange | - | - | - | - | - | - | - |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| At 30 September 2009 | 867 | 19 | 13 | 127 | 98 | 280 | 1,404 |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| | | | | | | | |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Net book amount at 30 | 3,394 | 52 | 5 | 331 | 192 | 481 | 4,455 |
| September 2009 | | | | | | | |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| | | | | | | | |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
| Net book amount at 30 | 1,589 | 44 | 9 | 371 | 181 | 602 | 2,796 |
| September 2008 | | | | | | | |
+--------------------------+--------------+------------+---------+----------+----------+---------+---------+
Other intangible assets relates to those intangible assets valued by a
professional valuer in respect of the Phoenix and Lushy acquisitions such as
customer lists, brand names and non compete agreements.
During the year, GBP2,160,000 of intellectual property has been transferred out
of work in progress and into intangible assets in accordance with the Group's
accounting policy.
7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| | Share | Share | Shares | Capital | Other | Foreign | *Retained | Total |
| | capital | premium | to be | redemption | reserves | exchange | earnings | equity |
| | | | issued | reserve | | reserve | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| At 1 October | 648 | 6,650 | - | 9,601 | 210 | - | (14,276) | 2,833 |
| 2007 | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| Profit for the | - | - | - | - | - | - | 436 | 436 |
| year | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| Foreign exchange | - | - | - | - | - | 182 | - | 182 |
| differences | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| Issue of share | 350 | 9,977 | - | - | - | - | - | 10,327 |
| capital | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| Cost of issue of | - | (209) | - | - | - | - | - | (209) |
| share capital | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| Deferred | - | - | 5,864 | - | - | - | - | 5,864 |
| consideration | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| Share based | - | - | - | - | - | - | 79 | 79 |
| payments | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| At 30 September | 998 | 16,418 | 5,864 | 9,601 | 210 | 182 | (13,761) | 19,512 |
| 2008 | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| Profit for the | - | - | - | - | - | - | 1,002 | 1,002 |
| year | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| Foreign exchange | - | - | - | - | - | 1,590 | - | 1,590 |
| differences | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| Issue of share | 402 | 5,972 | - | - | - | - | - | 6,374 |
| capital | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| Cost of issue of | - | (183) | - | - | - | - | - | (183) |
| share capital | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| Deferred | - | - | (1,846) | - | - | - | - | (1,846) |
| consideration | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| Share based | - | - | - | - | - | - | 134 | 134 |
| payments | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
| At 30 September | 1,400 | 22,207 | 4,018 | 9,601 | 210 | 1,772 | (12,625) | 26,583 |
| 2009 | | | | | | | | |
+------------------+---------+---------+---------+------------+----------+----------+-----------+---------+
8. REPORT AND ACCOUNTS
The Group's annual report and financial statements will be, where required,
posted to shareholders shortly; alternatively the annual report and financial
statements are published on our corporate web site www.galleonplc.com
9. POST BALANCE SHEET EVENTS
On 5 November 2009, the Group announced it was to issue a further 24,559,411
Galleon ordinary 1p shares as the final element of the deferred consideration
for the acquisition of Lushy Assets Limited.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAAFKADNEEAF
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