TIDMGON
RNS Number : 3847J
Galleon Holdings PLC
30 June 2011
Date: 30 June 2011
On behalf of: Galleon Holdings plc ('Galleon', 'the Company' or
the 'the Group')
Embargoed until: 0700hrs
Galleon Holdings plc
Interim results for the six months ended 31 March 2011
Galleon Holdings plc (AIM: GON), the AIM listed entertainment
media company that is a publisher of digital content in China
across both online and mobile platforms, is pleased to announce its
interim results for the six months ended 31 March 2011.
Interim Highlights:
-- Loss Before Tax* of GBP1.7m (2010: Loss Before Tax* of
GBP0.7m)
-- EBITDA loss of GBP1.6m (2010: EBITDA loss of GBP0.4m)
-- Cash at bank at 31 March 2011 of GBP2m (2010: GBP4.2 m)
-- Launch of first exclusive online game, Saga of Heroes
*Adjusted profit/loss before tax is before charges for the
impairment of goodwill and share options expense
Post Period Highlights:
-- Secured loan facilities totalling GBP2m to support the growth
of the product business, Croco
Commenting on the results, David Wong, Chairman of Galleon
Holdings, said:
"In the past six months we have restructured our operations
across the Group to focus on revenue generating activities. The
management believes that the long term benefits of these changes
and the investment made in our digital operations in China will
provide a platform for the Company to grow, with the aim of
returning to profitability in the next financial year.
Enquiries:
Galleon Holdings plc www.galleonplc.com
Hayden Eastwood, Chief Financial Officer Tel: 020 8987 0011
Cenkos Securities (Nominated Adviser
& Broker)
Ken Fleming / Beth McKiernan Tel: 0131 220 9772 / 0131
220 9773
CHAIRMAN'S STATEMENT
The first half of the year has seen significant restructuring to
focus on revenue generating activities and growth opportunities
across the Group. As part of this restructuring, Stephen Green and
Len Dunne took the opportunity to leave Galleon. We have reduced
overhead going forward across the Group and focussed on providing a
platform from which to grow our revenues with the aim of returning
to profitability next financial year. The operations of our product
business, Croco, have moved to Hong Kong and we invested more than
GBP1m in our Digital Operations in China providing a solid platform
for future growth.
China Digital Operations
Having control of both online and mobile distribution gives
Galleon China a direct route to market for digital content and is
where we expect the most significant growth will be going forward.
We have placed a heavy emphasis on this area of our business where
we feel the best quality of earnings will be generated. In doing
so, we have invested more than GBP1m into our online portal
wowan365.com and expect to spend more than GBP2m on marketing
during the year to provide a strong platform for future growth. In
December we launched our first exclusive game, growing revenues to
GBP450,000 per month in May. It is our intention to launch a
further 3 exclusive games in the next 6 months which we expect will
see a material increase in monthly revenues. The Chinese gaming
market grew 25% last year to $5billion and we are well placed to
take advantage of this growth.
Entertainment - Other
Super Soccer Star continues to sell into new territories and we
are pleased to announce a sale for the rights in Indonesia where
the show is expected to air on a lead broadcaster this year. Sales
discussions continue for our entertainment properties, including
Super Soccer Stars, Apollo's Pad, Super Fashion Star and
Sokator-442 which continue to generate interest. Following the
restructuring of our Entertainment division we are now focused on
exploiting our existing IP rather than spending significant
resources developing any new formats. In doing so we are have a
more targeted sales approach and have significantly reduced our
costs.
Croco
Croco continues to provide innovative products to its customers,
who include PepsiCo and Ferrero. Having seen an increase in
activity from new and existing customers recently Galleon entered
into an agreement securing loan facilities totalling GBP2m to fund
this period of growth. Croco has already secured orders totalling
GBP3.4m for this financial year and we expect this growth to
continue.
Outlook
We have invested in, and are strategically focussing on areas
where there are identifiable growth opportunities. Our digital
operations in China is where we see the most significant increase
in revenues and having put in place the foundations to facilitate
this growth we believe we can target a to return to profitability
in the next financial year.
David Wong , Executive Chairman
GALLEON HOLDINGS PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 March 2011
Unaudited Unaudited Audited
Six months Six months Year
ended 31 ended 31 ended 30
March March September
2011 2010 2010
Note GBP'000 GBP'000 GBP'000
Revenue 3 4,893 7,973 14,661
Cost of sales (4,667) (6,779) (12,102)
Gross profit 226 1,194 2,559
Administrative expenses (1,986) (2,073) (22,869)
Administrative Expenses
Depreciation and amortisation (147) (493) (996)
Provision against loans and
receivables - - (2,167)
Impairment of assets - - (15,807)
Other (1,839) (1,580) (3,899)
-------------------------------- ---- ----------- ----------- ----------
Loss from operations (1,760) (879) (20,310)
Share of operating loss of
associate (10) - -
Finance income 2 61 148
Finance costs (9) (1) (2)
Loss before taxation (1,777) (819) (20,164)
Taxation credit 110 7 241
Loss for the financial period
attributable to the equity
holders of the Company (1,667) (812) (19,923)
=========== =========== ==========
Other comprehensive income
Foreign exchange 176 598 152
Total comprehensive expenditure
for the period (1,491) (214) (19,771)
=========== =========== ==========
Loss per share
- Basic 5 (1.0p) (0.5p) (12.1p)
=========== =========== ==========
- Diluted 5 (1.0p) (0.5p) (12.1p)
=========== =========== ==========
GALLEON HOLDINGS PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 March 2011
Shares Capital Foreign
Share Share to be redemption Other exchange Retained Total
capital premium issued reserve reserves reserve earnings equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 30 September 2009
(audited) 1,400 22,207 4,018 9,601 210 1,772 (12,625) 26,583
Issue of share
capital 274 4,060 - - - - - 4,334
Deferred
consideration paid - - (4,018) - - - - (4,018)
Share based payments - - - - - - 81 81
Transactions with
owners 274 4,060 (4,018) - - - 81 397
Loss for the year and
total recognised
income and
expenditure for the
period - - - - - - (812) (812)
Foreign exchange gain - - - - - 598 - 598
Total comprehensive
income/(expenditure)
for the period - - - - - 598 (812) (214)
At 31 March 2010
(unaudited) 1,674 26,267 - 9,601 210 2,370 (13,356) 26,766
======= ======= ======= ========== ======== ======== ======== ========
Issue of share
capital - 2 - - - - - 2
Share based payments - - - - - - 127 127
Transactions with
owners - 2 - - - - 127 129
Profit for the year
and total recognised
income and expense
for the period - - - - - - (19,111) (19,111)
Foreign exchange loss - - - - - (446) - (446)
Total comprehensive
(expenditure)/income
for the period - - - - - (446) (19,111) (19,557)
At 30 September 2010
(audited) 1,674 26,269 - 9,601 210 1,924 (32,340) 7,338
======= ======= ======= ========== ======== ======== ======== ========
Share based payments - - - - - - 117 117
Transactions with
owners - - - - - - 117 117
Loss for the year and
total recognised
income and
expenditure for the
period - - - - - - (1,667) (1,667)
Foreign exchange gain - - - - - 176 - 176
Total comprehensive
income/(expenditure)
for the period - - - - - 176 (1,667) (1,491)
At 31 March 2011
(unaudited) 1,674 26,269 - 9,601 210 2,100 (33,890) 5,964
======= ======= ======= ========== ======== ======== ======== ========
GALLEON HOLDINGS PLC
CONSOLIDATED STATEMENT OF FINancial position
For the six months ended 31 March 2011
Unaudited Unaudited Audited
31 March 31 March 30 September
2011 2010 2010
Note GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 318 338 253
Goodwill 2,942 11,606 2,922
Intangible assets 581 6,847 515
Other non-current assets 85 2,962 -
3,926 21,753 3,690
========= ========= =============
Current assets
Inventories 463 130 548
Trade and other receivables 1,525 3,755 2,639
Cash and cash equivalents 2,001 4,217 2,850
3,989 8,102 6,037
Total assets 7,915 29,855 9,727
========= ========= =============
LIABILITIES
Current liabilities
Trade and other payables 1,657 2,324 1,952
Corporation Tax 294 415 437
1,951 2,739 2,389
Non-current liabilities
Deferred Tax - 350 -
- 350 -
Total liabilities 1,951 3,089 2,389
========= ========= =============
EQUITY
Share capital 1,674 1,674 1,674
Reserves 4,290 25,092 5,664
Equity interests attributable
to equity holders of the company 5,964 26,766 7,338
Total equity and total liabilities 7,915 29,855 9,727
========= ========= =============
GALLEON HOLDINGS PLC
CONSOLIDATED STATEMENT of cAshflows
For the six months ended 31 March 2011
Unaudited Unaudited
Six months Six months Audited
ended 31 ended 31 Year
March March ended 30 September
2011 2010 2010
GBP'000 GBP'000 GBP'000
Operating activities
(Loss) for the period (1,667) (812) (19,923)
Taxation (110) (7) (241)
Share of operating loss of
associate 10 - -
Net finance costs / (income) 7 (60) (146)
Loss on sale of property, plant
and equipment - - 53
Depreciation of property, plant
and equipment 79 66 193
Impairment of goodwill - - 8,390
Impairment of intangible assets 6,534
Amortisation of intangible
assets 95 433 803
Impairment of available for
sale financial assets - - 883
Impairment of loan advanced
to supplier - - 2,167
Decrease in inventories 367 2,473 535
Decrease in trade and other
receivables 904 2,973 4,054
(Decrease) in trade and other
payables (294) (1,907) (2,370)
Share based payments 117 81 208
Foreign exchange loss/(gain) 91 (172) (116)
(401) 3,068 1,024
Taxation paid (32) (211) (210)
Net interest (paid)/received (7) (1) 27
Net cash (outflows) / inflow
from operating activities (440) 2,856 841
Investing activities
Purchase of property, plant
and equipment (153) (89) (141)
Purchase of intangible assets (160) (2,805) (1,989)
Purchase of subsidiary
undertakings - - (58)
Purchase of investment (96) (309) (317)
Net cash outflow from investing
activities (409) (3,203) (2,505)
Financing activities
Repayment of loan - 50 -
Net cash inflow from financing
activities - 50 -
Decrease in cash and cash
equivalents (849) (297) (1,664)
Cash and cash equivalents
brought forward 2,850 4,514 4,514
Cash and cash equivalents
carried forward 2,001 4,217 2,850
=========== =========== ===================
NOTES TO THE INTERIM REPORT
For the six months ended 31 March 2011
1 GENERAL INFORMATION
Galleon Holdings plc, a Public Limited Company is incorporated
and domiciled in the United Kingdom.
Galleon Holdings plc is primarily a publisher of digital content
in China across both online and mobile platforms. It also has a
Product IP Division that provides innovative marketing devices for
fast moving consumable goods and an Entertainment Division that
develops multi-platform branded formats designed to establish a
direct, interactive relationship with the viewer.
The financial information set out in the interim report does not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 30 September 2010, prepared under International
Financial Reporting Standards (IFRS), have been filed with the
Registrar of Companies. The auditor's report on those financial
statements was unqualified and did not contain a statement under
Section 498 of the Companies Act 2006.
The interim report was approved by the Board on 29 June
2011.
2 BASIS OF PREPARATION
This consolidated financial information for the six months ended
31 March 2011 has been prepared in accordance with IAS 34, "Interim
Financial Reporting" as adopted by the European Union. The half
yearly consolidated financial report should be read in conjunction
with the annual financial statements for the year ended 30
September 2010, which have been prepared in accordance with IFRS as
adopted by the European Union.
The principal accounting policies of the Group are consistent
with those detailed in the 30 September 2010 financial statements,
which are prepared in accordance with International Financial
Reporting Standards (IFRSs, as adopted by the European Union).
3 Segmental analysis
An analysis of segmental performance is as follows;
Unaudited period ended
31 March Entertainment Entertainment
2011 Product Digital Other Unallocated Eliminated Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
From external customers 1,584 3,293 16 - - 4,893
From other segments 3 - 10 - (13) -
Segment revenues 1,587 3,293 26 - (13) 4,893
Profit / (loss) before
taxation 15 (936) (492) (364) - (1,777)
======= =============== ================= ============= ============ ========
Unaudited period ended
31 March 2010
Revenue
From external customers 2,209 5,704 60 - - 7,973
From other segments 7 - 2 - (9) -
Segment revenues 2,216 5,704 62 - (9) 7,973
Profit / (loss) before
taxation 334 66 (870) (349) - (819)
======= =============== ================= ============= ============ ========
Year ended 30 September
2010
Revenue
From external customers 2,826 11,148 687 - - 14,661
From other segments 8 - 249 - (257) -
Segment revenues 2,834 11,148 936 - (257) 14,661
(Loss) before taxation (170) (8,234) (11,047) (713) - (20,164)
======= =============== ================= ============= ============ ========
As at 31 March 2011
Assets 420 6,693 802 - - 7,915
Liabilities (54) (1,309) (588) - - (1,951)
Net Assets 366 5,384 214 - - 5,964
======= =============== ================= ============= ============ ========
As at 31 March 2010
Assets 667 12,113 17,075 - - 29,855
Liabilities (124) (1,977) (988) - - (3,089)
Net Assets 543 10,136 16,087 - - 26,766
======= =============== ================= ============= ============ ========
As at 30 September 2010
Assets 1,242 7,356 1,129 - - 9,727
Liabilities (279) (1,454) (656) - - (2,389)
Net Assets 963 5,902 473 - - 7,338
======= =============== ================= ============= ============ ========
30 September
31 March 2011 31 March 2010 2010
Revenues Assets Revenues Assets Revenues Assets
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
United
Kingdom 17 1,360 12 11,843 35 2,274
China 3,292 6,485 5,752 16,862 11,389 7,204
Rest of
World 1,584 70 2,209 1,150 3,237 249
Total 4,893 7,915 7,973 29,855 14,661 9,727
=========== ======= =============== ========== ============= ===========
The Group's largest three customers contributed 32%, 17% and 15%
respectively to the Group's revenue (March 2010 : 40%, 29% and 24%,
September 2010: 48%, 20% and 16 %).
4 TAXATION
The tax credit for the period ended 31 March 2011 arises in the
UK and China after allowing for tax losses brought forward.
5 EARnINGS PER SHARE
Unaudited Unaudited Audited
31 March 31 March 30 September
2011 2010 2010
GBP'000 GBP'000 GBP'000
(Loss) / profit for the period (1,667) (812) (19,923)
========== ========== ==============
Number Number Number
Weighted average number of shares
in 000's 167,426 160,516 163,981
Share options 20,689 11,742 18,515
Dilutive average weighted number
of shares in 000's 188,115 172,258 182,496
Basic (loss) / earnings per share
(pence) (1.0p) (0.5p) (12.1p)
Diluted (loss) / earnings per share
(pence) (1.0p) (0.5p) (12.1p)
========== ========== ==============
This information is provided by RNS
The company news service from the London Stock Exchange
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