DCD.L Regulatory News (DCD)

31 Mar 2008 07:01

DCD Media PLC31 March 2008 Embargoed: 0700 hours 31 March 2008 DCD MEDIA PLC ('DCD' or the 'Group') Interim Results for the Six Months to 31 Dec 2007 DCD Media plc is an independent producer and distributor of high qualityfactual, entertainment, drama, music and arts programming for television, DVD,and new media. The Group also stages and manages related media events. During the first half of this financial year DCD began the integration of thethree production companies acquired in August 2007 and progressed its strategyof programme diversification and expansion into the US markets, whilst at thesame time ensuring the Group continues to nurture and grow its in-house talent. As in previous years the Group's financial performance is heavily weightedtowards the second half of the year, and current trading, combined with thenewly acquired businesses, gives the board confidence that the outcome for thefull year will be at least in line with expectations. Financial Highlights * Revenue increased to £18.1m (H12006: £13.1m) * Gross profit increased to £4.7m (H12006: £2.6m) * Profit before goodwill and exceptional item £0.6m (H12006 £0.4m) * Adjusted Profit Before Tax (note 1) £0.25m (H12006: £0.16m) Note 1: Pre tax result adjusted for non-cash items (goodwill and fair valueacquisition costs, £0.6m, non cash and exceptional items, £0.2m) Operational Highlights * During the period the Group's management struck new deals to acquire three production companies (Prospect Pictures Limited, September Holdings Limited and West Park Pictures Limited) * Group revenue and gross profit accelerated driven by both internal growth and acquisitions * Revenue from US sourced business expanded in line with expectation, with strong contribution from the newly acquired subsidiaries DCD Production is performing in line with expectations. Highlights include: * Box TV delivered a significant prime time drama to BBC One achieving strong acclaim and commenced production on a new primetime drama series for ITV1 * Done and Dusted production continued to operate strongly in the US market and obtained a Grammy award nomination. * Iambic production's The Truth about Boy Bands transmitted on ITV1, and commissioned to work on a new production of King Lear with other projects developed for delivery in early 2008 * Prospect Pictures secured a further commission to supply the fourth series of Daily Cooks on ITV1 * September Films won several commissions including a double commission for Five's Extraordinary People and continued its strong growth in the US with a sixth series commission for Bridezillas * West Park Pictures announced their major series for the BBC, 'Fry in America' starring Stephen Fry Distribution continues to deliver * NBD distribution obtained record sales during the MIPCOM event, and restructured its operation to build upon its dynamic growth phase * The DVD division achieved significant deals to supply content for worldwide distribution Chairman David Elstein commented: 'DCD continues to be one of the most broadly based of all the UK quotedindependent TV production and distribution companies. We have a strengthenedcreative core, backed by a highly experienced management team, who together makeDCD Media a key player in the TV production and distribution sector. The currenttrading year should show further progress with the latest contribution from therecent acquisitions building upon the existing business success'. For further information please contact: DCD Media plcDavid Elstein, Non-executive ChairmanChris Hunt, Chief Executive OfficerTel. 020 7297 8000 M:CommunicationsBen Simons / Eleanor WilliamsonTel. 020 7153 1540 Evolution SecuritiesTom Price / Jeremy EllisTel. 020 7071 4300 Chairman's Report On behalf of the board, I am pleased to present the interim results for theGroup for the six months ended 31 December 2007. During the last financial year the Group positioned itself for furtherenlargement within a rapidly consolidating sector. I am pleased to say thatthis objective was quickly achieved with the most recent trio of acquisitions.The Group now turns towards exploiting its expanded strengths across the widermarket. As in previous years the Group's financial year is heavily weightedtowards the second half. The Group has always made most of its profits in thesecond half of the year and the period to 30 June 2008 will reflect this trend.Given the remaining pipeline in each of our divisions, for which there isvisibility, we anticipate a repeat of the last year's achievement in cementingfull year expectations. Financial Overview Revenue in the period was £18.1m (1H2006 £13.1m), up 38% on the comparableperiod, reflecting the impact of additional US productions, partialcontributions from the newly acquired companies and new distribution deals. This has driven gross profit to a creditable £4.7m (1H2006 £2.6m) a margin of26% (1H2006 19.8%). The directors expect a majority of revenue to be recognizedin the second half of the financial year with profit contribution similarlyweighted. In the six months ending 31 December 2007, the Group's profit before writedownof goodwill and related intangible assets grew to £0.6m (H12006 £0.4m). Administration costs of £4.1m (1H2006 £2.1m) reflected the additional costs ofabsorbing three new subsidiaries and as such reflect 22% of gross revenue, upfrom the prior period 17%. This is before integration of the new subsidiarieshas fully taken place which, when completed, will ensure any overlap of cost iseliminated. The Group's Adjusted Profit before Tax and after interest rose to £0.25m (1H2006£0.16). This outcome demonstrates the same profile of profit accumulation as theprior year, and points towards increased momentum in the second half. The loss for the period was £0.48m (1H2006 loss £0.18m). This period ofreporting reflects an increased goodwill writedown (a £0.6m charge, comparedwith £0.1m in the comparable six month period of reporting). There was a one-offcost during the period (£0.1m) relating to the restructuring of Distributiondivision which was announced in November 2007. The Group's interest expenseincreased in the period to £0.5m up from £0.2m in the comparable period. Intotal these increments reflect an additional £0.9m of cost, masking the improvedoperating result. In the period of reporting the non-cash items have increasedby £0.5m over the comparable period. The reported results reflect significantly increased overall activity which, intime, will help smooth the normal fluctuations of production activity whichcurrently weights the performance towards the second half of the financial year. International Financial Reporting Standards DCD Media plc is reporting for the first time under International FinancialReporting Standards ('IFRS') from the period commencing 1 July 2007. While thereis an impact on the presentation of the Group's results, management believe itshould have no significant impact on the Group's trading or its cash flowreporting. Capital Structure Total equity stands at £40.0m (1H2006 £21.1m) driven by the recent acquisitionactivity. Refer to note 7 below. The issued share capital of the company was increased by the issue of £9.5m ofnew Ordinary Shares and a placing of 10,625,000 new Ordinary shares of 0.1praising £8.5m. In addition Secured Convertible Loans and Loan Notes totalling£4.2m were raised as part of the acquisitions in August 2007. The Group also had short-term production loans totalling £1.5m (1H2006: £Nil).These loans help the Group to fund large production projects and are repaid oncompletion of a production.Earnings per share is disclosed in note 5 below. Cash flow liquidity and gearing The net cash increase during the period reported was £2.5m (H12006: increase of£1.7m). The Group had cash on hand at the period end of £3.4m (H12006 £3.2m) Net Cash flow from operating activities was negative reflecting the second halfnature of the Group performance. Gearing as a proportion of Net Assets was 28% as at 31 December 2007 comparedwith 36% at the close of the prior period results. Balance Sheet Fixed and intangible assets The increase in fixed assets during the six months principally represents thecapitalisation of new productions during the period and the reclassification ofcertain goodwill as trade names. The trade names will be amortised over the lifeof the intangible assets in line with expected future sales. Net Current Assets Net current assets rose to £3.1m (1H2006 £1.3m) driven by the addition of therecent acquisitions' positive current asset position and additional distributiondeals towards the end of the period. Goodwill During the period there was a £12.9m increase in Goodwill driven by the excessof the purchase price over the fair value of net assets acquired. Taxation A deferred tax asset of £2.7m arising principally from historic losses in theGroup has not been recognised. These losses can be offset against future tradingprofits. The directors believe that it is prudent not to recognise the deferredtax asset within the financial statements. Dividend No dividend is proposed for this interim period. Chief Executive Review of Divisions Highlights of post-period end trading in the divisions include: * Digital Classics download site launch * Double Rose d'Or award nomination for Done and Dusted * Done and Dusted films Amy Winehouse at the Grammy awards and gains two music series commissions for Channel 4 and the BBC * Prospect Pictures Daily Cooks Challenge which transmits during March 2008 * September Films new commission for a major new TV series on Channel 4 'When Women Rule the World' and a series for the BBC with Alan Whicker * Strong second half trading to date gives further comfort for full year expectations The addition of three new businesses in August 2007, Prospect Pictures,September Films and West Park Pictures has broadened the Group's genre base andrange of broadcast customers, with the additional benefit of adding strongcreative talent to the Group development pool. DCD now has over two hundredclients, most of which are television channels, with sales in the UKrepresenting less than 10% of Group revenue. The Group now consists of a number of diverse production and distribution unitsconsolidated into the DCD Group in their respective production genres - Box TVin high end drama, Done and Dusted in event management and filming, Iambic inarts and entertainment documentaries, Prospect in lifestyle programmes,September in factual entertainment and West Park in documentaries. NBDTv, thedistribution division, now has access to all the new intellectual propertyrights arising from the recent acquisitions, further expanding its horizon. The Group has understood that certain areas of expertise need to be harnessedand harmonized to drive the best from both the creative departments and itsproduction engine. This will be underpinned by an improved and more efficientback office to support the creative development and production process. This strengthens the ability of the Group to drive new revenue opportunities through: * operating synergies across the Group * deeper recognition gained across a wide range of television production genres * cross-fertilisation of relationships both in the UK and abroad * deeper vertical integration by pushing through an expanded distribution division. Production Box TV (Box)This division continued to grow its reputation in the large scale drama sector.Its most recent addition to the creative department, executive producer AdrianBate, contributed a major ITV1 drama series entitled 'Affinity', from the novelby the writer of 'Tipping The Velvet' and 'Fingersmith', while founder creativehead Gub Neal produced Box TV's biggest ever commission, for a five partthriller series 'The Last Enemy' for BBC One. Box is expected to conclude 'Affinity' during the coming period, with thepremiere of the completed 'The Last Enemy' recently aired on BBC One. Theproductions continue to derive sales in both UK and foreign markets, and thereis reason to anticipate further profits from both these new productions, as wellas the previous successes completed in the prior year. Box TV continues to have a strong outlook, with large scale projects in development. Done and Dusted Limited (Done and Dusted) The company works with an enviable list of the world's most famous rock and popacts, from The Rolling Stones to Christina Aguilera. In the US it continues itsmarch, retaining the stellar Victoria's Secret event which it staged and filmedduring the period, while opening an office in New York specifically to furtherits push into this market and winning new contracts such as the EnvironmentalMedia Awards. The company has also retained the recently filmed annual 'LaureusWorld Sports Awards' and the forthcoming Channel 4 event 'T4 On The Beach'. Iambic Productions (Iambic) The Group's original production unit has maintained a high margin andconsolidated its worldwide reputation for high quality entertainmentdocumentaries, with the transmission of a mini-series for ITV1 called 'The TruthAbout Boy Bands' and work commencing on the RPTA production of King Lear,starring Ian McKellen. This three hour film is due to be shown on Channel 4later this year. Iambic has also developed 3 music based projects which fallinto the second half of the financial year. Distribution NBD TV (NBD) During the period the distribution division recorded its highest-ever sales atthe world's biggest television market, in Cannes, France, in October 2007. Theresults were buoyed by sales of additional catalogue from recent acquisitionSeptember Films (whose titles include Bridezillas amongst many others) and WestPark Pictures (including a new BBC series with Stephen Fry). Sales ofprogramming from the Group's other production divisions including Box TV, Doneand Dusted and Iambic are in line with expectations. Television sales in the Group's mainly classical catalogue continue to besteady. Development of new strands for worldwide exploitation of on-demand andbroadband delivery systems are in advanced stages of development. The outlookfor distribution includes increasing sales to new media. Digital Classics DVD (DC DVD) The DVD label has exceeded expectations. While the titles sold via the DC DVDwebsite and retail are relatively small, major deals were achieved to boost thedivision, taking its content to a wider audience through an agreement with amajor record label. To further this objective the company has earmarked asubstantial number of additional comedy titles for distribution which it isanticipated will broaden its appeal and generate further regular revenuestreams. Companies acquired in the period: Prospect Pictures Limited (Prospect) Prospect is a major producer of weekday entertainment programmes featuringcookery and other lifestyle subjects. It has a high volume of low costproductions and recurring output contracts, which provide stable and visibleearnings. During the period the company was able to recruit an additional seniorcreative executive bringing a strong track record of delivery and development,and has already secured a landmark documentary on the 90th Anniversary of theR.A.F. for the BBC plus other factual projects for a range of broadcastersincluding SKY, BBC Three and Virgin 1. Among independent producers Prospect isone of the largest suppliers, making over several hundred hours of televisionfor UK broadcasters. In the domestic market, Prospect specialises in live,interactive lifestyle programming, but it is also developing factualentertainment formats and documentaries for the international market. September Holdings Limited (September Films) The company is a major producer of factual entertainment programming,documentaries and reality formats for media channels worldwide and is headed byDavid Green, an internationally renowned TV producer and film director. Aburgeoning part of September's business takes place in the US, with a full timeoperating office in Los Angeles. Its credits include 'Bridezillas' whichrecently aired its fourth record-breaking season on the Women's EntertainmentChannel in the US, and the 'Hollywood' brand recently transmitting itsthirteenth series for ITV. The company is currently in production on 'Bridezillas' series 5 and otherentertainment series for worldwide distribution. Following the engagement of an additional senior creative executive during theperiod, September Films was awarded a double commission for Five's recentlyaired 'Extraordinary People' strand and has further factual-based projects inthe pipeline, including the Channel 4 commissions 'Quest for the Lost Ark' and'I Am The Elephant Man'. International rights are exploited through DCD's distribution arm, with thededicated distribution arm September Films International now consolidated withinthe parent Group. West Park Pictures Limited (West Park)West Park is a producer of documentary content with an international flavour. Ithas established links with well known UK presenter personalities and alsoproduces work for Prince Charles' artistic foundation. It was founded by one ofthe UK's most highly respected film makers, Andre Singer. Its recent broadcasts on BBC2, 'Stephen Fry: HIV and Me', which attractedsizeable audiences and acclaim, will be followed by two more series presented bythe same person: 'Last Chance To See' and 'Stephen Fry's In America', a majornew travel series for BBC One, which is currently in production. Outlook The Group is now broadly diversified in its content and media delivery, with anumber of successful brands and no over-reliance on any one area. Theacquisitions made during the period further cement DCD Media's position in thefront rank of UK production and distribution organizations. The strategy ofsteadily broadening our base whilst controlling central costs has beendemonstrably successful. We therefore anticipate further progress across thebalance of the trading year. In addition to continuing to promote internalgrowth, it remains part of the Group's strategy to continue to make acquisitionswithin other genres and other markets where it believes commercial synergieswill result. The normal weighting of DCD revenues and profits to the second half of thefinancial year will occur again, with the most recent acquisitions set to make afull half year contribution for the first time during DCD's second half of thefinancial year. DCD's post period end performance to date plus its visiblepipeline enables the Group to view its position as it did last year, whereproportionately lower revenue and contribution occurred in the first half of theyear. Consequently the full year expectations remain unchanged. The mission statement remains the same: a simple, vertically-integratedstructure; the best talent incentivised; a diversified client base; the abilityto create and own content across all media; and an acquisition strategy built onearnings enhancement. These continue to be the watchwords by which DCD Media iscontinuing to grow, and which will ensure that the outlook remains favourable. Chris Hunt Chief Executive Condensed Consolidated Interim Financial statements for the period ended 31December 2007 Condensed consolidated interim income statement (unaudited) 6 months to 6 months Year to 31 December 31 December 30 June 2007 2006 2007 (Restated) (Restated) Note £'000 £'000 £'000Revenue 3 18,123 13,132 26,777Cost of sales (13,437) (10,529) (21,000)Gross profit 4,686 2,603 5,777Selling and distribution expenses (51) (25) (35)Administration costs (4,077) (2,177) (3,966)Profit before amortisation of goodwill and 558 401 1,776related intangible assets and exceptionalitemsAmortisation of goodwill and related (614) (97) (194)intangible assetsExceptional items 4 (131) (250) (297)Operating (loss)/profit 3 (187) 54 1,285Bank and other interest income 43 - 30Bank and other interest expense (462) (242) (518)(Loss)/profit before tax (606) (188) 797Taxation - current (8) 4 (2) - deferred 138 - -(Loss)/profit for the period (476) (184) 795 5 Basic and diluted (loss)/earnings per (1.0p) (0.6p) 2.6pshare Condensed consolidated interim balance sheet (Unaudited) 31 December 31 December 30 June 2007 2006 2007 (Restated) (Restated) Note £'000 £'000 £'000Assets Non-currentGoodwill 34,449 21,589 21,819Other intangible assets 15,865 5,676 5,691Property, plant and equipment 260 251 212 50,574 27,516 27,722 Current assetsInventories 851 94 1,076Trade and other receivables 13,779 6,341 7,281Cash and cash equivalents 3,415 3,212 1,003 18,045 9,647 9,360 Liabilities Current liabilitiesBank overdrafts (24) - (67)Bank and other loans (1,520) - -Trade payables (1,859) (779) (1,255)Other payables (11,275) (7,598) (5,999)Deferred tax liabilities (276) - - (14,954) (8,377) (7,321) Net current assets 3,091 1,270 2,039 Non-current liabilitiesSecured convertible loan (11,276) (7,652) (7,308)Obligations under finance leases (3) (11) (7)Deferred tax (2,349) - - (13,628) (7,663) (7,315) Net assets 40,037 21,123 22,446 Capital and reservesCalled up share capital 5,769 3,466 3,510Share premium account 49,050 32,942 33,242Merger reserve 6,356 6,356 6,356Retained earnings (21,138) (21,641) (20,662) Total equity 40,037 21,123 22,446 Condensed consolidated interim cash flow statement (Unaudited) 6 months to 6 months to Year to 31 December 31 December 30 June 2007 2006 2007 (Restated) (Restated) Note £'000 £'000 £'000Net cash flows (absorbed by)/from operating 6 (578) 7,084 8,395activities Investing activitiesAcquisition of subsidiary undertakings, net of (8,175) - -cash and overdrafts acquiredPurchase of property, plant and equipment (15) (121) (138)Purchase of intangible assets (2,630) (3,153) (6,723)Sale proceeds of property, plant and equipment 10 - -Net cash flows used in investing activities (10,810) (3,274) (6,861)Financing activitiesIssue of ordinary share capital 8,500 - -Repayment of loans - (2,091) (2,091)New loans raised 5,343 -Net cash flows from financing activities 13,843 (2,091) (2,091) 2,455 1,719 (557) Net increase/(decrease) in cashCash and cash equivalents at beginning of period 936 1,493 1,493Cash and cash equivalents at end of period 3,391 3,212 936 Condensed consolidated interim statement of changes in equity (Unaudited) Profit Share Share Merger and loss Total equity capital premium reserve account £000 £000 £000 £000 £000Balance at 30 June 2006 (aspreviously stated) 3,466 32,942 6,356 (21,457) 21,307Impact of transition to IFRS - - - - -Balance at 1 July 2006(restated) 3,466 32,942 6,356 (21,457) 21,307Loss for the period - - - (184) (184)Balance at 31 December 2006 3,466 32,942 6,356 (21,641) 21,123 Balance at 1 January 2007 3,466 32,942 6,356 (21,641) 21,123 Profit for the period - - - 979 979Shares issued 44 300 - - 344Balance at 30 June 2007 3,510 33,242 6,356 (20,662) 22,446 Balance at 1 July 2007 3,510 33,242 6,356 (20,662) 22,446Loss for the period - - - (476) (476)Shares issued 2,259 15,808 - - 18,067Balance at 31 December 2007 5,769 49,050 6,356 (21,138) 40,037 Notes to the condensed consolidated interim financial statements Nature of operations and general information The principal activity of DCD Media plc and subsidiaries (the Group) is theproduction of television programmes in the United Kingdom and United States, andthe worldwide distribution of those programmes for television and other media;the Group also distributes programmes on behalf of other independent producers. DCD Media plc is the Group's ultimate parent company, and it is incorporated anddomiciled in Great Britain. The address of DCD Media plc's registered office isOne America Square, Crosswall, London EC3N 2SG, and its principal place ofbusiness is 151 Wardour Street, London W1F 8WE. DCD Media plc's shares arelisted on the Alternative Investment Market of the London Stock Exchange. DCD Media plc's consolidated interim financial statements are presented inPounds Sterling (£), which is also the functional currency of the parentcompany. These consolidated condensed interim financial statements have been approved forissue by the Board of Directors on 25 March 2008. The financial information set out in this interim report does not constitutestatutory accounts as defined in Section 240 of the Companies Act 1985. Thefigures for the year ended 30 June 2007 have been extracted from the Group'sstatutory financial statements, prepared under UK GAAP, which have been filedwith the Registrar of Companies, amended for the impact of the adoption ofInternational Financial Reporting Standards (IFRS). The auditor's report onthose financial statements was unqualified and did not contain a statement underSection 237(2) of the Companies Act 1985. Details of the impact of the adoptionof IFRS are set out in Appendix 1 to this report. 1 Basis of preparation These interim condensed consolidated financial statements (the interim financialstatements) are for the six months ended 31 December 2007. They have beenprepared in accordance with the requirements of IFRS 1 "First-time Adoption ofInternational Financial Reporting Standards" relevant to interim reports. Theydo not include all of the information required for full annual financialstatements, and should be read in conjunction with the consolidated financialstatements of the Group for the year ended 30 June 2007. As permitted these interim financial statements have been prepared with UK AIMlisting rules and not in accordance with IAS 34 "Interim Financial Reporting"and therefore are not fully in compliance with IFRS. The financial statements have been prepared under the historical costconvention. These interim financial statements have been prepared in accordance with theaccounting policies set out below which are based on the recognition andmeasurement principles of IFRS in issue as adopted by the European Union (EU)and are effective at 30 June 2008, our first annual reporting date at which weare required to use IFRS accounting standards adopted by the EU. DCD Media plc's consolidated financial statements were prepared in accordancewith United Kingdom Accounting Standards (United Kingdom Generally AcceptedAccounting Practice) until 30 June 2007. The date of transition to IFRS was 1July 2006. The comparative figures in respect of the previous financial yearhave been restated to reflect changes in accounting policies as a result ofadoption of IFRS. The disclosures required by IFRS 1 concerning the transitionfrom UK GAAP to IFRS are given in the reconciliation schedules, presented andexplained in Appendix 1. The accounting policies have been applied consistently throughout the Group forthe purposes of preparation of these interim financial statements. 2. Principal accounting policies Basis of consolidation The Group financial statements consolidate those of the company and of itssubsidiary undertakings drawn up to 31 December 2007. Subsidiaries are entitiesover which the Group has the power to control the financial and operatingpolicies so as to obtain benefits from its activities. The Group obtains andexercises control through voting rights. Amounts reported in the financial statements of subsidiaries have been adjustedwhere necessary to ensure consistency with the accounting policies adopted bythe Group. Acquisitions of subsidiaries are dealt with by the acquisition method. Theacquisition method involves the recognition at fair value of all identifiableassets and liabilities, including contingent liabilities of the subsidiary, atthe acquisition date, regardless of whether or not they were recorded in thefinancial statements of the subsidiary prior to acquisition. On initialrecognition, the assets and liabilities of the subsidiary are included in theconsolidated balance sheet at their fair values, which are also used as thebases for subsequent measurement in accordance with the Group's accountingpolicies. Goodwill is stated after separating out identifiable intangibleassets. Goodwill represents the excess of acquisition cost over the fair valueof the Group's share of the identifiable net assets of the acquired subsidiaryat the date of acquisition. Business Combinations completed prior to date of transition to IFRS The Group has elected not to apply IFRS 3 Business Combinations retrospectivelyto business combinations prior to 1 July 2006. Accordingly the classification of the acquisitions prior to that date remainsunchanged from that used under UK GAAP. Assets and liabilities are recognised atthe date of transition and are measured using their UK GAAP carrying amountimmediately post-acquisition as deemed cost under IFRS. Deferred tax is adjustedfor the impact of any consequential adjustments after taking advantage of thetransitional provisions. Revenue and attributable profit Production revenue represents work carried out and amounts receivable inproducing content and is recognised over the period of the production. Grossprofit on production is recognised over the period of the production and inaccordance with the underlying contract. Recognition of revenue takes place whenthe contractual terms have been agreed, and when the substantive elements of theproduction have taken place, including pre-production stage completion, shootstage completion, post-production, availability for exploitation and delivery. Attributable profit on production is calculated by amortising programme costs inthe proportion that actual revenue recognised in the current period bears toestimated ultimate revenue, subject to an impairment review. Distribution revenue arises from the distribution and exploitation of programmerights obtained from external parties or from within the Group. Distributionrevenue is the amount receivable from license contracts signed during the year. Revenue from sales of DVDs and other sales is the amount receivable frominvoiced sales during the year. All revenue excludes value added tax. Property, plant and equipment Tangible non current assets are stated at cost net of depreciation and anyprovision for impairment. Depreciation is calculated to write down the cost less estimated residual valueof all tangible non current assets by equal annual installments over theirexpected useful lives. The rates generally applicable are: Short leasehold property over the life of the leaseMotor vehicles 20% on costOffice and technical equipment 25%-33% on cost The assets' residual values and useful lives are reviewed at each balance sheetdate and adjusted if appropriate. Intangible Assets Goodwill Goodwill arising on consolidation is recorded as an intangible asset and is thesurplus of the cost of acquisition over the Group's interest in the fair valueof identifiable net assets acquired. Goodwill is reviewed annually forimpairment. Any impairment identified as a result of the review is charged inthe income statement. On disposal of a subsidiary, associate or jointly controlled entity, theattributable amount of goodwill is included in the determination of the profitor loss on disposal. Goodwill arising on acquisitions before the date of transition to IFRS's arerecorded at their carrying value at the date of transition to IFRS, subject to areview for impairment at that date. Other intangible assets Other intangible assets are stated at cost net of amortisation and any provisionfor impairment. Amortisation is calculated to write down the cost less estimatedresidual value of all intangible assets over their expected useful lives. Trade names Trade names acquired through business combinations are stated at their fairvalue at the date of acquisition. They are amortised through the incomestatement on a straight line basis over their useful economic lives, suchperiods not to exceed 10 years. They are subject to review for impairment inaccordance with IAS 36 Programme rights Programme rights are stated at the lower of cost, less accumulated amortisation,or net realisable value. Cost comprises the cost of production and all otherdirectly attributable costs incurred up to completion of the programme and allprogramme development costs. Where programmes in development are not expectedto proceed, the related costs are written off to the income statement.Amortisation of programme costs is charged in the ratio that actual revenuerecognised in the current period bears to estimated ultimate revenue, aftermaking provision for anticipated losses. Programme costs of purchased cataloguesare amortised on a straight line basis over an appropriate period of theestimated useful economic life of the programmes, such period not to exceed 20years. At each balance sheet date, the directors review the carrying value ofprogramme rights and consider whether a provision is required to reduce thecarrying value of the investment in programmes to net realisable value.Amortisation and any charge in respect of writing down to net realisable valueduring the period are included in the income statement as part of cost of sales. Leased assets In accordance with IAS 17, tangible fixed assets acquired under finance leasesor hire purchase contracts are capitalised and depreciated in the same manner asother tangible fixed assets, and the interest element of the lease is charged tothe income statement over the period of the lease. The related obligations, netof future finance charges, are included in liabilities. Rentals payable under operating leases are charged to the income statement on astraight line basis over the period of the lease. Inventories (previously classified as work in progress) Inventories comprise costs incurred in respect of programmes in the course ofproduction, and finished stock of DVDs available for resale. Costs are valued atthe lower of cost or net realisable value. Programmes in progress at period end Where productions are in progress at the period end and where the sales incomeexceeds the value of work done, the excess is classified as deferred income andis shown within creditors. Where costs incurred exceed the value of work done todate, the amounts are classified as inventories. Impairment of long-term assets For the purposes of assessing impairment, assets are grouped into separatelyidentifiable cash-generating units. Goodwill is allocated to thosecash--generating units that have arisen from business combinations. At each balance sheet date, the Group reviews the carrying amounts of itslong-term assets, to determine whether there is any indication that those assetshave suffered an impairment loss. If any such indication exists the recoverableamount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Goodwill is tested for impairment annually. An impairment loss is recognised for the amount by which the asset's orcash-generating unit's carrying amount exceeds its recoverable amount. Therecoverable amount is the higher of fair value and value in use based on aninternal discounted cash flow evaluation. Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits. Bankoverdrafts that are repayable on demand and form an integral part of the Group'scash management are included as a component of cash and cash equivalents. Equity Equity comprises the following: • Share capital represents the nominal value of issued Ordinary sharesand Deferred shares • Share premium represents the excess over nominal value of the fairvalue of consideration received for equity shares, net of expenses of the shareissue. • Merger reserve represents the excess over nominal value of the fairvalue of consideration received for equity shares issued on acquisition ofsubsidiaries, net of expenses of the share issue • Retained earnings represents retained profits and losses. Provisions, contingent liabilities and contingent assets Provisions for contingent liabilities are recognised only when there is a legalor constructive obligation as a result of past events, where it is more likelythan not that an outflow of resources will be required to settle the obligationand the amount has been reliably estimated. Current and Deferred taxation Current tax is the tax currently payable based on taxable profit for the period,or if there is a taxable loss the charge represents unrecoverable withholdingtax suffered during the period. Deferred tax is recognised on all timing differences where the transactions orevents that give the group an obligation to pay more tax in the future, or rightto pay less tax in the future, have occurred by the balance sheet date. Deferredtax assets are recognised when it is more likely than not that they will berecovered. Deferred tax is measured using rates of tax that have been enacted orsubstantively enacted by the balance sheet date. Deferred tax balances are notdiscounted. Changes in deferred tax assets or liabilities are recognised as a component oftax expense in the income statement, except where they relate to items that arecharged or credited directly to equity in which case the related deferred tax isalso charged or credited directly to equity. Foreign currencies Transactions in foreign currencies are translated at the exchange rate ruling atthe date of the transaction. Monetary assets and liabilities in foreigncurrencies are translated at the rates of exchange ruling at the balance sheetdate. Exchange differences arising on the settlement and retranslation ofmonetary items are taken to the income statement. For the purposes of presenting consolidated financial statements, the assets andliabilities of the Group's foreign operations are translated at the exchangerate ruling at the balance sheet date. Income and expense items are translatedat the average exchange rates for the period. Exchange differences arising areclassified as equity and transferred to the Group's translation reserve. Financial instruments Financial assets and financial liabilities are recognized in the Group's balancesheet when the Group becomes a party to the contractual provisions of theinstrument. Trade Receivables Trade receivables are recorded at their nominal amount less any provision fordoubtful debts. Trade receivables due in more than one year are discounted totheir present value. Convertible Loans Convertible loan notes are regarded as compound instruments, consisting of aliability component and an equity component. At the date of issue, the fairvalue of the liability component is estimated using the prevailing marketinterest rate for similar non-convertible debt. The difference between theproceeds of issue of the convertible loan note and the fair value assigned tothe liability component, representing the embedded option to convert theliability into equity of the Group, is included in equity. Issue costs are apportioned between the liability and equity components of theconvertible loan notes based on their relative carrying amounts at the date ofissue. The portion relating to the equity component is charged directly againstequity. The interest expense of the liability component is calculated by applying theprevailing market interest rates for similar non-convertible debts to theliability component of the instrument. The difference between this amount andthe interest paid is added to the carrying amount of the convertible loan note. Bank Borrowings Interest bearing bank loans and overdrafts are recorded as the proceedsreceived, net of direct issue costs. Finance charges are accounted for on aneffective interest method and are added to the carrying amount of the instrumentto the extent that they are not settled in the period in which they arise. Trade Payables Trade Payables are stated at their nominal value. Equity Instruments Equity instruments issued by the Group are recorded as the proceeds received,net of direct costs. Share options When share options are awarded to employees, the fair value of the options atthe date of grant is charged to the income statement over the vesting period.Non-market vesting conditions are taken into account by adjusting the number ofequity instruments expected to vest at each balance sheet date so that,ultimately, the cumulative amount recognised over the vesting period is based onthe number of options that eventually vest. Market vesting conditions arefactored into the fair value of the options granted. As long as all othervesting conditions are satisfied, a charge is made irrespective of whether themarket vesting conditions are satisfied. The cumulative expense is not adjustedfor failure to achieve a market vesting condition. Where the terms and conditions of options are modified before they vest, theincrease in fair value of the options, measured immediately before and after themodification, is also charged to the income statement over the remaining vestingperiod. Where equity instruments are granted to persons other than employees,the income statement is charged with the fair value of goods and servicesreceived. The share options are exercisable from the grant date. Upon exercise of shareoptions, the proceeds received net of attributable transaction costs arecredited to share capital, and where appropriate share premium. Retirement benefits The group operates pension schemes for the benefit of a number of its directors.The schemes are defined contribution schemes and the contributions are chargedagainst profits as they accrue. Exceptional items Items that are material in size, unusual and infrequent in nature are presentedas exceptional items in the income statement. The Directors are of the opinionthat the separate disclosure of such items provides helpful information aboutthe Group's underlying business performance. 3. Segment analysis Revenue, which excludes value added tax and transactions between Groupcompanies, represents principally production fees and the distribution ofprogrammes; other revenue includes the sale of DVDs. The Group's headquarters is based in the United Kingdom and its activities forma single class of business, namely television production and exploitation ofprogramme rights. The Group also has offices in New York and Los Angeles toconduct any business in the United States. Revenue and profit before interest and taxation are attributable to thefollowing classes of continuing business: 6 months to 31 6 months to 31 Year to 30 June December 2007 December 2006 2007 (Restated) (Restated) £'000 £'000 £'000RevenueProduction 13,525 9,248 20,241Programme distribution 4,541 3,732 5,676Other 57 152 860 18,123 13,132 26,777Operating (loss)/profit before interest and taxationProduction (905) 164 1,032Programme distribution 1,052 (61) 28Other (155) (45) 101Common costs including exceptional item (179) (4) 124 (187) 54 1,285 4. Exceptional items The exceptional item in the six months ended 31 December 2007 relates to thecosts associated with a reorganisation and restructuring within the productionand distribution segment. The exceptional item in the year ended 30 June 2007 and the six months ended 31December 2006 related to a provision made by a subsidiary company against atelevision production contract. The directors took the view that the decisionby ITV not to broadcast certain programmes in the UK involving viewer phone-insmay have had an adverse effect on fulfillment of the contract, even though ITVhad stated that the decision was temporary. 5. Earnings/(loss) per share The calculation of the basic earnings/(loss) per share is based on the profit/(loss) attributable to ordinary shareholders divided by the average number ofshares in issue during the period. The calculation of the diluted earnings/(loss) per share is based on the basicearnings/(loss) per share, adjusted to allow for the issue of shares and thepost tax effect of dividends and interest, on the assumed conversion of allother dilutive options and other potential ordinary shares. However, thefigures have not been adjusted for such conversion as the effects of suchconversion would be anti-dilutive. On 6 August 2007, the company held an Extraordinary General Meeting at which aresolution was passed to consolidate every one hundred issued and un-issuedordinary shares of 0.1pence into one new ordinary share of 10 pence only. Forthe purposes of the loss per share calculation the weighted average number ofshares in prior periods has been adjusted to reflect this consolidation. 6 months to 31 6 months to 31 Year to 30 June December 2007 December 2006 2007 (Restated) (Restated) Basic and diluted (loss)/earnings per share(Loss)/profit attributable to ordinary shareholders(£'000) (476) (184) 795Weighted average number of shares ('000's) 48,645 30,078 30,253Per share amount (pence) (1.0) (0.5) 2.6 6. Reconciliation of cash flows from operating activities 6 months to 31 6 months to 31 Year to 30 December 2007 December 2006 June (Restated) 2007 (Restated) £'000 £'000 £'000 Net (loss)/profit before taxation (606) (188) 797Adjustments for:Depreciation of property plant and equipment 45 55 111Amortisation of intangible assets 3,136 3,239 6,564Net bank and other interest charges 419 242 488Net profit before changes in working capital 2,994 3,348 7,960 Decrease/(increase) in inventories 273 (67) (1,049)(Increase)/decrease in trade and other receivables (3,776) 2,023 1,083Increase in trade and other payables 358 2,018 891Cash (absorbed by)/generated from operations (151) 7,322 8,885 Interest received 43 - 30Interest paid (462) (242) (518)Income taxes (paid)/received (8) 4 (2)Net cash (absorbed by)/generated from operatingactivities (578) 7,084 8,395 7. Acquisitions September Holdings Limited With effect from 1 July 2007 the Company acquired the entire share capital ofSeptember Holdings Limited. The consideration was £4,530,000 in cash paid tothe vendors on 6 August 2007 and 5,662,000 ordinary shares to be allotted andissued to the vendors on 6 August 2007. The ordinary shares have been valuedusing the DCD Media mid market closing share price of 80p on the previoustrading day. The transaction has been accounted for by the acquisition methodof accounting as detailed by IFRS 3 (Business Combinations). The following assets and liabilities were acquired at the date of acquisition: Book value Fair value £'000 £'000Intangible assets 811 4,990Property, plant and equipment 55 55Inventories 9 9Trade and other receivables 1,459 1,459Cash and cash equivalents 702 702Trade and other payables (1,879) (1,879)Deferred tax - (1,170) 1,156 4,166Goodwill 5,350Total consideration 9,516 Satisfied by:Cash 4,530Costs of acquisition 456Fair value of shares to be issued 4,530 9,516 Prospect Pictures Limited With effect from 1 July 2007 the Company acquired the entire share capital ofProspect Pictures Limited. The consideration was £3,348,000 in cash paid to thevendors on 6 August 2007, £177,000 in cash to be paid on demand and 4,406,000ordinary shares to be allotted and issued to the vendors on 6 August 2007. Theordinary shares have been valued using the DCD Media mid market closing shareprice of 80p on the previous trading day. The transaction has been accountedfor by the acquisition method of accounting as detailed by IFRS 3 (BusinessCombinations). The following assets and liabilities were acquired at the date of acquisition: Book value Fair value £'000 £'000Intangible assets - 3,842Property, plant and equipment 5 5Trade and other receivables 1,194 1,194Cash and cash equivalents 1,029 1,029Trade and other payables (2,418) (2,418)Deferred tax - (1,076) (190) 2,576Goodwill 4,917Total consideration 7,493 Satisfied by:Cash 3,348Deferred cash 177Costs of acquisition 443Fair value of shares to be issued 3,525 7,493 West Park Pictures Limited On 1 July 2007 the Company acquired the entire share capital of West ParkPictures Limited. The consideration was £1,480,000 in cash paid to the vendorson 6 August 2007 and 1,850,000 ordinary shares to be allotted and issued to thevendors on 6 August 2007. The ordinary shares have been valued using the DCDMedia mid market closing share price of 80p on the previous trading day. Thetransaction has been accounted for by the acquisition method of accounting asdetailed by IFRS 3 (Business Combinations). The following assets and liabilities were acquired at the date of acquisition: Book value Fair value £'000 £'000Intangible assets - 1,847Property, plant and equipment 28 28Inventories 39 39Trade and other receivables 69 69Cash and cash equivalents 781 781Trade and other payables (1,221) (1,221)Deferred tax - (517) (304) 1,026Goodwill 2,364Total consideration 3,390 Satisfied by:Cash 1,480Costs of acquisition 430Fair value of shares to be issued 1,480 3,390 8. Publication of non-statutory accounts The financial information contained in these interim statements has not beenaudited or reviewed by the Company's auditors and does not constitute statutoryaccounts as defined in section 240 of the Companies Act 1985. The financial information for the full preceding year is extracted from thestatutory accounts for the financial year ended 30 June 2007 amended for theimpact of the adoption of IFRS. Those accounts, upon which the auditors issuedan unqualified opinion, have been delivered to the Registrar of Companies.Details of the impact of the adoption of IFRS are set out in Appendix 1 of thisannouncement. The report containing the interim financial information is to be sent direct toshareholders. Copies of the report are available to the public from theregistered office of plc. The address of the registered office is: DCD Mediaplc, One America Square, Crosswall, London EC3N 2SG. Appendix 1 Transition to International Financial Reporting Standards Introduction Shares in DCD Media plc are quoted on the Alternative Investment Market (AIM).It is therefore required to report its consolidated financial statements inaccordance with International Financial Reporting Standards (IFRS) for itsaccounting periods commencing on or after 1 July 2007. Individual companyfinancial statements will continue to be reported under UK Generally AcceptedAccounting Principles (UK GAAP). In order to comply with this requirement DCD Media plc has published its interimfinancial statements for the period to 31 December 2007 on the basis of IFRS,including the restatement of the December 2006 and June 2007 comparativeinformation. In so doing it has applied the requirements of IFRS 1 'First timeadoption of IFRS'. The purpose of this appendix is to advise on the impact of the initialtransition balance sheet adjustments, the restatement of the prior period'spublished financial information (both annual and interim) and the interimresults to 31 December 2007. Although the identified adjustments have beendiscussed with the auditors, the numbers in this report are unaudited and may besubject to revision when the audited financial statements for the year ended 30June 2008 are published. Summary of impacts on the financial statements Summary of impact on profit/(loss) before tax Year ended Six months ended 30.06.07 31.12.07 31.12.06 £'000's £'000's £'000's (382) UK GAAP (1,192) (768) 1,179 IFRS 3 'Business Combinations' 586 580 797 IFRS (unaudited) (606) (188) Summary of impact on net assets 01.07.06 30.06.07 31.12.07 31.12.06 £'000's £'000's £'000's £'000's 21,307 21,267 UK GAAP 38,134 20,543 - - Opening adjustments 1,179 - - 1,179 IFRS 3 'Business Combinations' 586 580 - - IAS 12 'Income taxes' 138 - 21,052 22,446 IFRS (unaudited) 40,037 21,123 Transitional arrangements Under the provisions of IFRS 1 'First time adoption of IFRS', specificexemptions are either mandatory or permitted in certain areas. DCD Media hastaken advantage of the following options: • Business combinations completed prior to 1 July 2006 have not beenrestated under IFRS 3 'Business combinations'. Business combinations completedsince that date have been restated with adjustments to goodwill, otherintangible fixed assets and deferred taxation. • The opening fair values of other non-current assets have been deemedto be their accounting values as at 1 July 2007, after reviewing for impairmentas appropriate • Cumulative translation differences for all foreign operations havebeen set to zero as at 1 July 2006 (rather than calculate the cumulativetranslation differences for each foreign operation as if IAS 21 'The Effects ofChanges in Foreign Exchange Rates' had always applied) Reclassification and presentational changes The presentational formats of IFRS financial statements differ from those underUK GAAP in a number of areas. The majority of changes relate to detaileddisclosure in the notes to the accounts and are therefore not dealt with in thisreport. However, the structure and descriptions on the face of the primarystatements have been changed. A restatement of the UK GAAP balance sheet and P&L account to reflect the format changes are shown in the attached IFRSreconciliations. Detailed changes impacting on published results IFRS 3 'Business Combinations' The Group acquired September Holdings Limited, Prospect Pictures Limited andWest Park Pictures Limited with effect from 1 July 2007. Under UK GAAP theexcess of consideration over the fair value of net assets acquired was treatedas goodwill and amortised over a period of up to 20 years. Specific intangibleassets acquired as a result were not separately identified, but included withingoodwill. Application of IFRS 3 to these business combinations resulted in identificationof a number of intangible assets, including trade names. Under IFRS these havebeen recognised separately in the balance sheet at their fair value at the dateof the combination. The result of this adjustment is to decrease goodwill andincrease other intangible assets at the date of the combinations. This has alsohad an impact on the deferred tax liability (see below). At 31 December 2007 the value of 'Other intangible assets' was increased by£9,868k, with goodwill reduced by an equal amount. Goodwill recognised by the Group under UK GAAP on acquisitions was amortisedover a period of 20 years. Under IFRS goodwill is not amortised, but testedannually for impairment. The goodwill amortisation charge that would have beenrecognised in accordance with UK GAAP in the six months ended 31 December 2007of £1,079k (year to 30 June 2007 £1,179k; six months to 31 December 2006 £580k)has been written back. However, other intangible assets identified on thisbusiness combination in accordance with IFRS as described above are amortised inaccordance with the accounting policy explained in note 2. The result of this isto increase the amortisation charge in the income statement for the period by£493k (year to 30 June 2007 £nil; six months to 31 December 2006 £nil). Theresult is a net reduction in the Group's amortisation charge of £586k (year to30 June 2007 £1,179k; six months to 31 December 2006 £580k). IAS 12 'Income taxes' Under UK GAAP deferred tax was recognized only on timing differences; incontrast IAS 12 requires the recognition of deferred tax on all temporarydifferences. The recognition of intangible assets on the acquisitions ofSeptember Holdings Limited, Prospect Pictures Limited and West Park PicturesLimited resulted in a number of temporary differences. The effect of theapplication of IFRS is to create a deferred tax liability of £2,763k at the dateof the acquisition (1 July 2007). Goodwill is increased by the same amount.The release of this deferred tax against the amortisation of the relatedintangible asset results in a credit to the tax charge for the six months ended31 December 2007 of £138k Summary of reconciliations Set out below are the following reconciliations of UK GAAP to IFRS: • Consolidated balance sheet at 30 June 2006 • Consolidated income statement for the year ended 30 June 2007 • Consolidated balance sheet at 30 June 2007 • Consolidated income statement for the six months ended 31 December 2006 • Consolidated balance sheet at 31 December 2006 • Consolidated income statement for the six months ended 31 December 2007 • Consolidated balance sheet at 31 December 2007 Consolidated balance sheetas at 30 June 2006 UK GAAP under Reclassification Intangibles Deferred Unaudited IFRS presentation of intangibles amortisation tax IFRS £'000 £'000 £'000 £'000 £'000 Non-current assets Goodwill 21,589 21,589 Other intangible assets 5,762 5,762 Property, plant & equipment 185 185 27,536 - - - 27,536 Current assets Inventories 27 27 Trade and other receivables 8,364 8,364 Cash and cash equivalents 1,493 1,493 - 9,884 - - - 9,884 Current liabilities Bank overdrafts - - Bank and other loans (2,091) (2,091) Trade payables (1,364) (1,364) Other payables (4,991) (4,991) Provisions - (8,446) - - - (8,446) Non-current liabilities Secured convertible loan (7,652) (7,652) Obligations under finance (15) (15) leases Deferred tax liabilities - (7,667) - - - (7,667) Net assets 21,307 - - - 21,307 Equity Share capital 3,466 3,466 Share premium account 32,942 32,942 Merger reserve 6,356 6,356 Retained earnings (21,457) (21,457) 21,307 - - - 21,307 Consolidated profit and loss account (Income statement)for the year ended 30 June 2007 UK GAAP under Reclassification Intangibles Deferred Unaudited IFRS of intangibles amortisation tax IFRS presentation £'000 £'000 £'000 £'000 £'000 Revenue 26,777 26,777 Cost of sales (21,000) (21,000) Gross profit 5,777 - - - 5,777 Selling and distribution expenses (35) (35) Administrative expenses (3,966) (3,966) Profit before share based payments and amortisation of goodwill and related intangible assets 1,776 - - - 1,776 Amortisation of goodwill and related intangible (1,373) 1,179 (194) assets IFRS 2 Share based payments - - Exceptional item (297) (297) Operating profit/(loss) 106 - 1,179 - 1,285 Bank and other interest income 30 30 Bank and other interest charges (518) (518) Loss on continuing operations before taxation (382) - 1,179 - 797 Taxation - current tax (2) (2) Loss on continuing operations after taxation (384) - 1,179 - 795 (Loss)/earnings per share - basic (1.3p) - 3.9p - 2.6p Consolidated balance sheetas at 30 June 2007 UK GAAP under Reclassification Intangibles Deferred Unaudited IFRS presentation of intangibles amortisation tax IFRS £'000 £'000 £'000 £'000 £'000 Non-current assets Goodwill 20,640 1,179 21,819 Other intangible assets 5,691 5,691 Property, plant & equipment 212 212 26,543 - 1,179 - 27,722 Current assets Inventories 1,076 1,076 Trade and other receivables 7,281 7,281 Cash and cash equivalents 1,003 1,003 9,360 - - - 9,360 Current liabilities Bank overdrafts (67) (67) Bank and other loans - - Trade payables (1,255) (1,255) Other payables (5,999) (5,999) Provisions - - (7,321) - - - (7,321) Non-current liabilities Secured convertible loan (7,308) (7,308) Obligations under finance leases (7) (7) Deferred tax liabilities (7,315) - - - (7,315) Net assets 21,267 - 1,179 - 22,446 Equity Share capital 3,510 3,510 Share premium account 33,242 33,242 Merger reserve 6,356 6,356 Retained earnings (21,841) 1,179 (20,662) 21,267 - 1,179 - 22,446 Consolidated profit and loss account (Income statement)for the six months ended 31 December 2006 UK GAAP under Reclassification Intangibles Deferred Unaudited IFRS of intangibles amortisation tax IFRS presentation £'000 £'000 £'000 £'000 £'000 Revenue 13,132 13,132 Cost of sales (10,529) (10,529) Gross profit 2,603 - - - 2,603 Selling and distribution expenses (25) (25) Administrative expenses (2,177) (2,177) Profit before share based payments and amortisation of goodwill and related intangible assets 401 - - - 401 Amortisation of goodwill and related intangible (677) 580 (97) assets IFRS 2 Share based payments - - Exceptional item (250) (250) - Operating profit/(loss) (526) - 580 - 54 Bank and other interest income - - Bank and other interest charges (242) (242) Loss on continuing operations before taxation (768) - 580 - (188) Taxation - current tax 4 4 Loss on continuing operations after taxation (764) - 580 - (184) Loss per share - basic and diluted (2.5p) - 1.9p - (0.6p) Consolidated balance sheetas at 31 December 2006 UK GAAP under Reclassification Intangibles Deferred Unaudited IFRS presentation of intangibles amortisation tax IFRS £'000 £'000 £'000 £'000 £'000 Non-current assets Goodwill 21,009 580 21,589 Other intangible assets 5,676 5,676 Property, plant & equipment 251 251 26,936 - 580 - 27,516 Current assets Inventories 94 94 Trade and other receivables 6,341 6,341 Cash and cash equivalents 3,212 3,212 - 9,647 - - - 9,647 Current liabilities Bank overdrafts - - Bank and other loans - - Trade payables (779) (779) Other payables (7,598) (7,598) Provisions - (8,377) - - - (8,377) Non-current liabilities Secured convertible loan (7,652) (7,652) Obligations under finance leases (11) (11) Deferred tax liabilities (7,663) - - - (7,663) Net assets 20,543 - 580 - 21,123 Equity Share capital 3,466 3,466 Share premium account 32,942 32,942 Merger reserve 6,356 6,356 Retained earnings (22,221) 580 (21,641) 20,543 - 580 - 21,123 Consolidated profit and loss account (Income statement)for the six months ended 31 December 2007 UK GAAP under Reclassification Intangibles Deferred Unaudited IFRS of intangibles amortisation tax IFRS presentation £'000 £'000 £'000 £'000 £'000 Revenue 18,123 18,123 Cost of sales (13,437) (13,437) Gross profit 4,686 - - - 4,686 Selling and distribution expenses (51) (51) Administrative expenses (4,077) (4,077) Profit before share based payments and amortisation of goodwill and related intangible assets 558 - - - 558 Amortisation of goodwill and related intangible (1,200) 586 (614) assets IFRS 2 Share based payments - Exceptional item (131) (131) Operating profit/(loss) (773) - 586 - (187) Bank and other interest income 43 43 Bank and other interest charges (462) (462) Loss on continuing operations before taxation (1,192) - 586 - (606) Taxation - current tax (8) (8) - deferred tax 138 138 Loss on continuing operations after taxation (1,200) - 586 138 (476) (Loss)/earnings per share - basic (2.5p) - 1.2p 0.3p (1.0p) Consolidated balance sheetas at 31 December 2007 UK GAAP under Reclassification Intangibles Deferred Unaudited IFRS presentation of intangibles amortisation tax IFRS £'000 £'000 £'000 £'000 £'000 Non-current assets Goodwill 39,296 (9,868) 2,258 2,763 34,449 Other intangible assets 6,490 9,868 (493) 15,865 Property, plant & equipment 260 260 - 46,046 - 1,765 2,763 50,574 Current assets Inventories 851 851 Trade and other receivables 13,779 13,779 Cash and cash equivalents 3,415 3,415 - 18,045 - - - 18,045 Current liabilities Bank overdrafts (24) (24) Bank and other loans (1,520) (1,520) Trade payables (1,859) (1,859) Other payables (11,275) (11,275) Deferred tax liabilities - (276) (276) (14,678) - - (276) (14,954) Non-current liabilities Secured convertible loan (11,276) (11,276) Obligations under finance leases (3) (3) Deferred tax liability (2,349) (2,349) (11,279) - - (2,349) (13,628) Net assets 38,134 - 1,765 138 40,037 Equity Share capital 5,769 5,769 Share premium account 49,050 49,050 Merger reserve 6,356 6,356 Retained earnings (23,041) 1,765 138 (21,138) 38,134 - 1,765 138 40,037 For further information please contact: DCD Media plcDavid Elstein, Non-executive ChairmanChris Hunt, Chief Executive OfficerTel. 020 7297 8000 M:CommunicationsBen Simons / Eleanor WilliamsonTel. 020 7153 1540 Evolution SecuritiesTom Price / Jeremy EllisTel. 020 7071 4300 This information is provided by RNS The company news service from the London Stock Exchange