Last checked at 15 Jul 2009 07:00
Date: 15 July 2009
On behalf of: Boomerang Plus plc ('Boomerang', 'the Company' or 'the Group')
Embargoed until: 0700hrs
Boomerang Plus plc
Trading update
Boomerang Plus plc (AIM: BOOM.L), a multi-genre, independent television production group operating within the Nations and Regions, today announces an update on trading.
The current economic climate has led to widely publicised issues affecting the sector as a whole, including project delays, cancellations and reduced programming tariffs and margins. The Group has not been entirely immune from these issues. In addition, two of the Group's projects which were expected to contribute significantly to the results for the year ended 31 May 2009 have underperformed financially. These factors have led to a reduction in the Group's overall gross margin and as a result the Group's profits for the year ended 31 May 2009 will be materially below the Board's expectations.
Trading conditions remain challenging and are expected to impact on the first half of the current financial year. However, the Board is reviewing the Group's cost base and will make savings and efficiencies where appropriate and there is a strong pipeline of work for calendar 2010 and beyond.
Our growing Advertiser Funded Programming ('AFP') division has recently secured the following new commission and recommissions, which will contribute to an expected slate in excess of £1 million of revenues for the division in the year ending 31 May 2010:
12x30 minute programs of 'The McCain Track & Field Show' commissioned by Channel 4;
a second series of the 'Sony Ericsson World B-Boy Championships' re-commissioned by Channel 4;
2x30 minute programmes of the Women's World Longboard Championship in France re-commissioned for the fourth year running by Channel 4; and
a second series of Freesports on 4: Freeze, the snowboarding championships and music festival re-commissioned by Channel 4.
The Group's financial position remains strong with positive cash reserves and no debt.
The Group will provide a more detailed update on trading at the time of the release of its preliminary results, expected to be announced in October 2009.
Huw Eurig Davies, Chief Executive Officer of Boomerang, commented:
"This is a difficult period for the UK Indie Sector as a whole and Boomerang has not been immune to trading pressures. However we are confident that the changes we implement and our strong pipeline in 2010 place us in a strong position for the future.
"We are delighted to announce this new slate of AFP commissions which highlights the talent of our production staff and the potential of the Group in a difficult market"
- Ends -
For further information, please contact:
| Boomerang Plus plc | Via Redleaf Communications |
| Huw Eurig Davies, Chief Executive | |
| Mark Fenwick, Finance Director | |
| Altium Capital Limited | 020 7484 4040 |
| Tim Richardson / Melanie Szalkiewicz | |
| Redleaf Communications | 020 7566 6700 |
| Anna Dunkin / Samantha Robbins | boomerang@redleafpr.com |
Notes to Editors:
The Group, founded in 1994, has extensive experience in producing content in a variety of genres, including youth programming, music, entertainment, children's programming, extreme sports and drama
The market for independent television production companies in the Nations and Regions has grown following quotas from the regulator Ofcom, which require that, depending on the broadcaster, between 10 per cent. and 50 per cent. of qualifying programming hours must be sourced from outside the M25 boundary
Boomerang is ranked in the top three independent television production companies, by revenue, in the Nations and Regions according to the Broadcast Survey (Nations and Regions) 2009
The Board's strategy is both to achieve strong organic growth by leveraging the Group's existing customer base coupled with strategic acquisitions, with a view to becoming a major supplier to UK networks looking to satisfy their Nations and Regions quotas
Boomerang is well placed to participate in the consolidation of the sector. Target companies which meet the acquisition criteria will have a strong track record, which will assist the Group to grow further, outside Wales