DQE.L Regulatory News (DQE)

11 Apr 2008 07:01

DQ Entertainment PLC11 April 2008 DQ Entertainment plc ("DQE" or "the Company") Pre Close Statement DQ Entertainment plc, a leading animation and gaming content production company,provides a pre-close trading update for the year ended 31 March 2008, prior tothe announcement of its maiden preliminary results in June 2008. The Company ispleased to announce that it is on track to achieve full year performance in linewith expectations and has a positive outlook for the future based on thevisibility provided by its strong order book. Operational Highlights Co-production Agreements DQE has continued to deliver on its strategy of investing in the co-productionof feature films, DVD productions and television series in order to obtainlarger percentages of the global, cross-platform intellectual property anddistribution rights in its productions. DQE announced on 27 February 2008 that it had entered into an agreement toacquire a 20 per cent. stake in Method Films SA, France ("Method Films"). MethodFilms has produced several well known TV series, created in-house andco-produced with DQE, such as Skyland, Les Gnoufs, Jet Grooves and Mikido andhas rejuvenated strong international brands such as Iron Man in co-productionwith Marvel Entertainment and DQE. Joint global co-production projects producedand under production have already generated Euro 19.9 million in direct benefitsfor DQE. In March 2008, DQE entered into a Memorandum of Understanding ("MoU") withBollywood major and Bombay Stock Exchange listed entity, Pritish NandyCommunications Limited ("PNC"). The MoU is the basis for the plannedco-development and co-production of 6 movies with PNC over the next 3-4 years,with an estimated total global budget of approximately US$ 45-50 million. In order to benefit from the demand for Japanese content and co-develop andmarket it with US and European co-producers, DQE entered into a MoU with THINKCorporation in Japan, a 20 year old corporation providing a wide range ofintellectual property creation services. The MoU is the basis for the plannedco-production of three animated high end 3D CGI TV Series and a direct-to-homevideo / feature film. The total budget for these productions is estimated to beapproximately US$ 24 million. The TV series and film will be released from 2009onwards. DQE has also entered into an MoU with Percept Picture Company Limited ("PPC").DQE and PPC, one of India's fastest growing and fully integrated contentcreation, aggregation and distribution companies, agreed to co-develop threehigh quality animated feature films, two of which are in the mythology genre andthe third film will have a strong Bollywood theme and an estimated budget ofapproximately US$ 25 million. The films are planned for release from 2009onwards. An MoU has also been signed for a joint venture with the post production studioTelegael, Ireland and discussions to execute an agreement are in final stages. DQE is currently working on co-productions with American Greetings, MarvelEntertainment and Classic Media on renowned properties such as Twisted Whiskers,Maryoku Yummy, Iron Man and Casper. In addition, the new contracts as well asthe ongoing productions with major US, European and other global producers addto the order book visibility. Training and manpower DQE's workforce has grown from 2,200 at the time of IPO to over 3100 currently.Given the importance of trained manpower to DQE's business, the Company hasestablished a number of initiatives to ensure that it has access to a readilyavailable, trained pool of labour. DQE has set up training academies in partnership with the State Government ofMadhya Pradesh and the State Government of Rajasthan in the respective statecapitals of Bhopal and Jaipur. The courseware and the instructors will beprovided by the Company and in return the Company will have access to trainedmanpower on preferential basis. DQE was invited by the Department of Information Technology, Government of WestBengal ("GoWB") to develop production facilities in the city of Kolkata. It isexpected that the state-of-the-art production facility will be operationalshortly. GoWB has also approached DQE to run, manage and operate an animationacademy within the facility which will provide on-the-job training to the localtalent and offer employment contracts within DQE for the successful candidates.DQE has agreed to continue to enhance the international-standard education andtraining to the existing students in the Academy. In line with the ongoing expansion of production capacity, DQE has initiated aprogramme to establish "DQE Schools of Visual Arts' at various cities in India.The first of these will be operational in April, to be followed by Chennai,Mumbai and two in Hyderabad. Outlook DQE will continue to focus on its strategy of investing in co-productions inorder to obtain larger percentages of the global intellectual property anddistribution rights in its productions, while also consolidating and expandingon its service revenues. As global animation production houses continue tooutsource production of animation content to India, DQE believes it is very wellplaced to leverage its established client relationships and proven productioncapabilities to capitalise on these opportunities. Tapaas Chakravarti, Chairman and Chief Executive Officer of DQE commented: "I am personally satisfied with the performance of DQE in this financial year. We expect our recent co-production initiatives to bear fruit in the near future which will allow us to add great value for our shareholders. Our tie-ups with companies of stature such as Percept Picture Company and Pritish Nandy Communications will help us make inroads in the local markets. We are delighted with the progress made by DQE and its position as the leading animation and game content company from this region, supported by a sound management, worldwide." 11 April 2008 Enquires: DQ Entertainment +91 40 23553726Niranjan Prasad, VP Corporate Affairs Evolution Securities Limited 0207 071 4300Tom Price / Jeremy Ellis / Chris Clarke This information is provided by RNS The company news service from the London Stock Exchange