GUSC.L Regulatory News (GUSC)

28 Jun 2011 07:00

28 June 2011 Talent Group plc ("Talent" or the "Company" or the "Group) Unaudited interim results for the six month period ended 31 March 2011

CHAIRMAN'S STATEMENT

I am pleased to present the Group's results for the 6 months ended 31 March2011. It gives me some satisfaction finally to be able to report a profit,albeit an extremely modest one. Turnover for the period under review was £472,000 (2010: £225,000) on which the gross profit was £287,000 (2010: £115,000). Profit before taxation was £5,000 (2010: loss of £202,000), whilst acorporation tax refund of £11,000 lifted net profits after taxation to £16,000.Earnings per share were 0.09p (2010: loss of 1.15p).

Trading conditions in the broadcast television sector remain difficult for independent production companies such as Talent. However, I am sure that shareholders have heard enough from me on this subject over the last three years, so I will concentrate instead on more positive aspects.

Our first ever feature film, a co-production based on the book The Mumper andstarring Bob Hoskins and Jenny Agutter, completed filming in the period underreview, and is now in the final stages of post-production. The film is to bedistributed by Universal, and is expected to have its cinema release, with thenew title 'Outside Bet', towards the end of 2011. Our half-year results includeproduction fees received on this project: future income will be dependent onthe film's commercial success, and will impact on our 2012 results.Another Talent Television long-term project, My Phone Genie, is due to commencefilming in July, with the first programmes available to broadcasters fromOctober. Again, the Group will receive production fees over the period ofproduction, and retains a significant share of commercial rights, the value ofwhich will be dependent on the success of the programmes.Talent South has completed eight one-hour crime documentaries for the Crime andInvestigation Channel. This has been broadcast to strong viewing figures forthe slot, resulting in a commission for a further eight episodes.Our results for the full year to September 2010 were adversely affected by the£174,000 bad debt incurred as a result of the late cancellation of the Auraproject. Whilst we were repeatedly assured by the Event organisers, AuraFootball Limited, that we would be paid in full, the company went intoliquidation over the Christmas period. The fall-out from this has continuedadversely to affect our cash-flow, which remains extremely tight.We continue to drive down overheads and to position ourselves for futuregrowth. The last three months have seen some significant board changes.Jonathan Glazier, our director of entertainment, has stood down from the boardbut continues to work with the Group on the development of new entertainmentprojects. Kate Beal, managing director of Talent South, has joined the Groupboard, and we are pleased to welcome back Bob Benton, former Chairman, as anon-executive director.

In my last year's interim report, I commented that progress on development projects was encouraging, and we hoped that these would provide a strong platform for future growth. We are now starting to realize these benefits, and look forward to benefitting further over future periods.

Terry BateChairman27 June 2011FURTHER ENQUIRIESTalent Group plc

Tony Humphreys (Managing Director) 020 7822 3900

Merchant Securities Limited John East / Simon Clements 020 7628 2200

CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2011

Six months ended Six months ended 31-Mar 31-Mar Year ended 2011 2010 30-Sep 2010 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Revenue 472 225 653Cost of sales (185) (110) (311) Gross profit 287 115 342 Administrative expenses (255) (296) (792)Finance income - - 1Finance costs (27) (21) (43)

Profit / (loss) before taxation 5

(202) (492)

Income tax expense - prior year refund 11

- - - current year - - -

Profit / (loss) for the period 16

(202) (492)

Basic earnings /(loss) per share (pence) 0.09p

(1.15p) (2.76p)

Diluted earnings/(loss) per share (pence) 0.08p

(1.13p) (2.67p)

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2011

31-Mar 31-Mar 30-Sep 2011 2010 2010 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 £'000 £'000 £'000 Assets Non-current Assets Goodwill 1,082 1,082 1,082Other intangible assets 22 28 25Property, plant & equipment 27 30 31 1,131 1,140 1,138 Current assets Inventories 60 41 6 Trade receivables 120 16 42 Cash & cash equivalents 5 1 31 185 58 79 Total assets 1,316 1,198 1,217 Equity and liabilities Equity Share capital 6,342 6,329 6,329Share premium 11,759 11,731 11,731Share option reserve 136 129 133Retained earnings (18,346) (18,072) (18,362) Total equity (109) 117 (169) Current liabilities Bank overdraft 30 31 27 Borrowings 862 700 862 Trade & other payables 533 350 497 Total liabilities 1425 1,081 1,336 Total equity & liabilities 1,316 1,198 1,217

CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2011

Six months ended Six months ended 31-Mar 31-Mar Year ended 2011 2010 30-Sep (Unaudited) (Unaudited) 2010 (Audited) £'000 £'000 £'000

Cash flows from operating activities Profit / (loss) before taxation 5 (202) (492)Adjustments for: Depreciation of tangible assets 4 5 13Amortisation of intangible assets 3

3 6Share option reserve 3 3 -Interest received - - (1)Interest paid 27 21 43 42 (170) (431)

(Increase)/decrease in trade and other receivables (78) 26 (1)(Increase)/decrease in inventories (54) 16 51 Increase in trade and other payables 36

71 226 (54) 113 (155) Tax refund received 11 - -Tax paid - - -

Net cash flows from operating activities (43)

(57) (155)

Cash flows from investing activities Purchase of property, plant and equipment -

(1) (10)Interest received - - 1

Net cash used in investing activities - (1) (9) Cash flows from financing activities

Proceeds from issue of shares 41 70 70Proceeds from borrowings - - 162Interest paid (27) (21) (43)

Net cash from financing activities 14 49 189 Net cash decrease in cash and cash equivalents (29) (9) 25 Cash and cash equivalents at beginning of period 4

(21) (21)

Cash and cash equivalent at end of period (25)

(30) 4 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 MARCH2011 Share Share Share Option Retained Capital Premium Reserve Earnings Total £'000 £'000 £'000 £'000 £'000 At 30 September 2010 6,329 11,731 133 (18,362) (169)New shares issued 13 28 - - 41Profit for period - - - 16 16

Equity share option recognised - - 3

- 3 At 31 March 2011 6,342 11,759 136 (18,346) (109) Share Share Share Option Retained Capital Premium Reserve Earnings Total £'000 £'000 £'000 £'000 £'000 At 30 September 2009 6,315 11,675 126 (17,870) 246New shares issued 14 56 70Loss for period - - - (202) (202)

Equity share option recognised - - 3

- 3 At 31 March 2010 6,329 11,731 129 (18,072) 117

NOTES TO THE HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2011

1. BASIS OF PREPARATION

The interim report is unaudited and does not constitute statutory accountswithin the meaning of s498 of the Companies Act 2006. The statutory accountsfor 2010, which were prepared under IFRS, have been delivered to the Registrarof Companies. The auditor's opinion on these accounts was unmodified and didnot contain a statement under s498 of the Companies Act 2006.

The interim financial information has been prepared on a basis which is consistent with the accounting policies adopted by the Company for the last financial statements and in compliance with IAS 34.

Comparative figures are given for the six months ended 31 March 2010 and the year ended 30 September 2010.

2. REVENUE and loss on ordinary activities before taxation

The results for the six months ended 31 March 2011 and 31 March 2010 areunaudited. The audited results for the year ended 30 September 2010 have alsobeen shown.By geographical location 2011 2010 Profit Loss Before Before Revenue Taxation Revenue Taxation £'000 £'000 £'000 £'000 United Kingdom 452 5 225 (202)Europe 20 - - - 472 5 225 (202) 3. EARNINGS PERORDINARY SHAREThe earnings per share is based on a profit for the period of £16,000 (sixmonths ended 31 March 2010: a loss of £202,000; year ended 30 September 2010: aloss of £492,000), being the profit or loss attributable to ordinaryshareholders, and a weighted average of 18,144,460 (31 March 2010: 17,631,822;30 September 2010: 17,847,817) ordinary shares.

The diluted earnings/(loss) per share is based on a time weighting of the options granted by the current Talent Group employee share option plan.

4. Reconciliation of net cash flow to movement IN Cash and cash eqivalents 31-Mar 31-Mar 30-Sep 2010 2010 2010 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000

Decrease in cash and cash equivalents in the

period (29) (9) 25

Cash and cash equivalents at beginning of 4 (21)

(21)period

Cash and cash equivalents at end of period (25) (30)

4

5. COPIES OF THE INTERIM RESULTS

Copies of the half-yearly results will be available from the Company's registered office Lion House, Red Lion Street, London WC1R 4GB and will be available from the Company's website www.talenttv.com.