Audioboom Grp. Regulatory News (BOOM)

28 February 2012

Boomerang Plus plc

('Boomerang', 'the Company' or 'the Group')

Interim Results

Boomerang Plus plc (AIM: BOOM.L), a profitable media investment group, announces its interim results for the six months to 30 November 2011.

These interim results illustrate the successful transformation of Boomerang into a higher-margin multi-genre, multi-platform media group with increasingly diversified revenue streams.

FINANCIAL HIGHLIGHTS

·; Revenue of £15.99m (2011: £16.29m).

·; Gross profit up 14.1% to £2.83m (2011: £2.48m).

·; Gross margin up 16.5% to 17.7% (2011: 15.2%)

·; Adjusted EBITDA**up 10.6% to £1.36m (2011: £1.23m).

·; Adjusted operating profit* up 8% to £0.95m (2010: £0.88m).

·; Profit before tax of £0.71m (2011: £0.79m).

·; Adjusted basic EPS* up 15.5% to 7.44p (2011: 6.44p).

·; Cash and cash equivalents up 8% to £4.06m (2011: £3.76m).

OPERATIONAL HIGHLIGHTS

·; Acquisition of Oxford Scientific Films in June 2011.

·; Acquisition of Harlequin Talent Agency, through a joint venture with Bryn Terfel, in July 2011.

·; Continued organic growth of Advertiser Funded Programming ("AFP").

·; Creation of Gorilla facilities group through merger of Mwnci and Boomerang's in-house facilities.

·; Gorilla's acquisition and expansion of Bait Studio Limited, a graphics and VFX company.

OUTLOOK

·; Continuing growth in our Factual and AFP businesses.

·; Strong balance sheet to support future growth with net assets of £10m.

·; Current trading remains in line with Board's expectations

Huw Eurig Davies, Chief Executive Officer of Boomerang Plus, commented:

"The acquisition of Oxford Scientific Films has accelerated strong growth in our Network and AFP businesses as we continue to diversify the Group's customer base and widen its intellectual product base. This will continue to offset the impact of reduced funding for S4C and provide us with future revenue growth and opportunities to increase our gross profit margins. The Group will also continue to look for further acquisitions that can add value for shareholders in a fast-changing media marketplace."

* adjusted for professional fees in relation to corporate transactions (2011 - £0.11m, 2010 - 0.01m), reorganisation costs (2011 - £0.06m, 2010 - £nil), and amortisation of intangible assets arising on business acquisitions (2011 - £0.01m, 2010 - £0.01m).

**adjusted operating profit as defined above before depreciation (2011 - £0.39m, 2010 - £0.34m) and other amortisation (2011 - £0.02m, 2010 - £0.01m).

Contacts: 

About Boomerang Plus plc (www.boomerang.co.uk)

Boomerang Plus plc has strategic investments in a number of complementary media businesses including production companies Alfresco, Apollo, Boomerang, Bulb, Fflic, Indus and Oxford Scientific Films; facilities companies Gorilla and Zoom; multi-media publisher Boom Extreme Publishing; talent companies Halequin and Boom Talent; event company Big Freeze Limited, and education and corporate production business Media4.

Boomerang Plus's strategy is to continue to acquire, invest in and develop media companies that complement the Group's existing businesses, whilst also achieving strong organic growth.

Business Review

Financial Review

As highlighted in our 2011 preliminary results statement released in September, the Group has had a strong first half of the year. Headline revenues have been resilient during the period at £16m (2011 - £16.3m), with the reductions arising from S4C's reduced funding being largely offset by increases in organic Network and AFP programming as well as the first full six month contribution by Oxford Scientific Films acquired in June 2011.

The Group's key performance indicators are gross profit, adjusted earnings before interest, tax, depreciation and amortisation ("adjusted EBITDA**") and adjusted operating profit.

Gross profit increased by 14.1% to £2.83m (2011 - £2.48m) due to the accelerating contribution from our higher gross margin Network and AFP programming businesses. Gross profit margin also expanded 16.5% during the period to 17.7% (2011 - 15.2%), despite continued downward pressure on overall programme budgets.

Adjusted EBITDA** increased by 10.6% to £1.36 million (2011 - £1.23 million).

During the year the Group continued the restructuring and relocation of its businesses, including relocating Oxford Scientific Films to new premises in Warwick Street, London and the merger of Mwnci and Boomerang's in-house facilities to create Gorilla, the Group's post production and facilities business. Following the implementation of IFRS 3 - Business Combinations, professional fees in respect of acquisitions have been expensed in the current period.

The above factors contributed to an increase in adjusted operating profits* of 8% to £0.95 million (2011 - £0.88 million).

The Group's substantial capital expenditure programme of recent years is now past its peak and capital expenditure reduced to £0.32 million (2010 - £0.82 million) in the period to 30 November 2011. Finance lease repayments during the period were £0.30 million (2010 - £0.29 million). The acquisition of Oxford Scientific Films resulted in a net cash inflow of £0.18m and was by means of the purchase of assets and certain liabilities including £0.30 million in respect of a substantial back catalogue. Therefore, cash and cash equivalents increased 8% to £4.06 million as of 30 November 2011 (2010 - £3.76 million).

At 30 November 2011 the Group had net assets of £10 million (2010 - £9.53 million). The Group has considerable headroom within its current bank facilities together with long-term relationships with its key customers. Due to the nature of the Group's business, management has good visibility over its pipeline of productions for the foreseeable future, which is fully funded by its customers. The Group's forecasts and projections show that the Group should be able to operate within the level of its current facility.

* adjusted for professional fees in relation to corporate transactions (2011 - £0.11m, 2010 - 0.01m), reorganisation costs (2011 - £0.06m, 2010 - £nil), and amortisation of intangible assets arising on business acquisitions (2011 - £0.01m, 2010 - £0.01m).

**adjusted operating profit as defined above before depreciation (2011 - £0.39m, 2010 - £0.34m) and other amortisation (2011 - £0.02m, 2010 - £0.01m).

Operations

The Group continued to produce a strong, multi-genre portfolio of multi-platform content for our broadcast and corporate customers during the period.

Organic Network commissions during the period included the third series of "Road to London 2012: That Paralympic Show", a multi-platform magazine series covering the run up to the London 2012 Paralympic Games, and we are currently in production of series 4. We are currently in production of "Tales of Friendship with Winnie the Pooh" a 72 x 5 minutes order for Disney Junior EMEA, which coincides with a book of the same name. Other Disney work included interstitial productions for Disney 365 on Cars 2 and Epic Mickey.

AFP commissions during the period included a series of BT Documentary films featuring their sponsored Paralympic athletes including Oscar Pistorius; a high volume digital marketing campaign for Bacardi Brands Global for a new Rum called Bacardi Oakheart; a third year producing Relentless Freeze, Europe's biggest Snow and Music Festival held annually in Battersea Power Station; major live OB surfing events for Quiksilver including World Tour events Quiksilver Pro France and Roxy Pro Biarritz; and a third season of Nissan/Sony Playstation GT Academy, the virtual-to-reality motor racing competition, once again hosted by F1 luminaries Eddie Jordan and Johnny Herbert and filmed across Australia, New Zealand, Europe and the UK, including for the first time a series for the USA market.

Complementing this organic success the newly acquired Oxford Scientific Films ("OSF") added to the existing Indus Fims creates a substantial and growing Factual division. Indus has been very busy during the period with exciting new commissions for the BBC and paid development for Channel 4. They are about to deliver a six-part series for BBC2 exploring the challenges facing the UK fishing industry and are filming an observational series about how London feeds itself, also for BBC2. Indus has also recently opened an office in Bristol with new Executive Producer Lucy Carter on board.

OSF delivered its first 3D production, Meerkats 3D to Sky and National Geographic. The film aired in November 2011 in the UK and is about to be released theatrically into museums worldwide. A second 3D natural history film is in development with the same partners. The second season of Fatal Attractions aired to strong ratings on Animal Planet in the US and an uplift order for a further 6 episodes has been received. Rory McGrath's Pub Dig, a new 4 part series blending history with archaeology and comedy went into production for History UK and Channel 5. OSF received its first orders from BBC1 for a broadcast pilot for a new medical series called How to Beat.... featuring Harley Street doctors Dr Jack Kreindler and Professor Greg Whyte; and a high end science series. OSF is currently in pre-production on a high end archaeology special for Channel 4 and Terra Mater; and a pilot for a new series for Animal Planet US.

Boomerang has also produced a range of multi-genre programming for the local Welsh Broadcasters, S4C and BBC Wales, during the period. These include the "Stwnsh" and "Cyw" children's services; drama series "Teulu"; factual entertainment series "Cariad@Iaith", "Gwlad Beirdd", "Llais i Gymru", "Wales on Wheels", "Only Boys Aloud 2" and "3Lle"; entertainmment series "Seren Rhos" and "Noson"; factual series "Arts Review of the Year" and "Iris Prze"; music series "Bandit" and "Nodyn"; youth series "Gofod"; the Royal Welsh show and sports series "Ras i Lundain" amongst others.

Post-production and facilities

On 5 September 2011, the Group announced that its post-production subsidiary, Mwnci, had rebranded as Gorilla and expanded to incorporate all of the Group's in-house facilities. Gorilla will now be providing studios, dubbing, grading, graphics and outside broadcast facilities to programme makers and producers in addition to increasing its established range of editing services. Gorilla will be one of the biggest facilities companies outside London and the largest in Wales.

Gorilla acquired Bait Studio Limited during the period and is investing further to create a substantial graphics and VFX business.

Talent management

The joint investment into Harlequin Agency Limited, through a 50% joint venture with Bryn Terfel, will lead to a significant increase in scale of our talent business and we have transferred the trade of our existing Boom Talent to Harlequin in order to maximise cost synergies and growth opportunities.

Segmental Information

As the majority of the Group's facilities will no longer be fully integrated in the future, the Group anticipates making segmental disclosures in its account for the year ended 31 May 2012.

Outlook

The acquisition of Oxford Scientific Films together with organic growth in Network and AFP productions have all contributed to diversifying the Group's customer base and widening its intellectual product base. This will continue to drive further growth in an increasingly global market and provide us with opportunities to increase our gross profit margins.

The Group's pipeline of productions for the 2012 calendar year remains in line with the Board's expectations and shows further diversification of our customer base. This will both mitigate the impact of S4C's reduced programming budgets following the Government's Comprehensive Spending Review and deliver long term-term benefits to the Group. We will continue to drive organic growth and look for further acquisitions that can add value for shareholders in the rapidly-changing media marketplace.

Condensed Consolidated Income Statement

Six months ended 30 November 2011 (unaudited)

All activities derive from continuing operations.

The Group has no material items of comprehensive income in the current or prior period other than the profit for the period and as such has not presented a separate condensed consolidated statement of comprehensive income.

Condensed Consolidated Balance Sheet 

As at 30 November 2011 (unaudited)

Condensed Consolidated Balance Sheet 

As at 30 November 2011 (unaudited)

These condensed consolidated interim statements were approved by the Board of Directors on 28 February 2012.

Signed on behalf of the Board of Directors

H E Davies M W Fenwick

Director Director

Condensed Consolidated Cash Flow Statement

Six months ended 30 November 2011 (unaudited)

Condensed Consolidated Statement of Changes in Equity

Six months ended 30 November 2011 (unaudited)

The Group has taken advantage of section 612 of the Companies Act 2006 and so the excess over the nominal value of shares issued other than for cash has been allocated to the merger reserve.

1. BASIS OF PREPARATION AND ACCOUNTING 

The interim financial information does not constitute statutory accounts for the purpose of section 434 of the Companies Act 2006. The figures for the year ended 31 May 2011 have been extracted from the Group's audited accounts for that year. Those accounts have been reported on by the Group's auditors and delivered to the Registrar of Companies. The report of the auditors was (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

The interim financial information for the six months ended 30 November 2011 and 30 November 2010 has not been audited or reviewed by the auditors. The interim results have been prepared using the same accounting policies and estimation techniques that are expected to apply at the year-end and is consistent with the accounting policies disclosed in the Group's annual report for the year ended 31 May 2011.

2. tax

Taxation for the six-month period is charged at the best estimate of the average annual effective income tax rate expected for the full year, applied to the pre-tax income of the six-month period.

3. earnings per share

4. notes to the condensed consolidated cash flow statement

5. AVAILABILITY OF INTERIM RESULTS

A copy of the interim report will be available for members of the public by application to the Company's Registered Office or on the Company's website at www.boomerang.co.uk.