GUSC.L Regulatory News (GUSC)

26 Jun 2009 07:00

26 June 2009 Talent Group plc ("Talent" or the "Company") Half-yearly results for the six months ended 31 March 2009

CHAIRMAN'S STATEMENT

There can be no doubt that the last few months have seen unprecedentedly difficult conditions for the independent television sector, and these are reflected in our interim results for the six months to 31 March 2009.These show turnover of £303,000 (2008 : £1,164,000), gross profit of £174,000 (2008 : £ 341,000) and a loss before and after taxation of £343,000 (2008 : loss before and after taxation of £145,000). The loss per share was 2.06p (2008 : loss per share 0.89p).

The level of turnover reflects the lack of commissioning activity from our clients, who are themselves under pressure from significantly reduced revenues. From our perspective these difficulties were compounded by a large number of personnel changes amongst commissioning editors, resulting in lack of continuity in progressing productions in development. We have, nevertheless, witnessed a modest improvement since March 2009 with the completion of two programmes, How Clean is my Crime Scene and a Jim Davidson special, for Virgin Media. We have also taken advantage of the lull in production commissions to concentrate on new programme and format development, as evidenced by our recently announced first look deal with Digital Rights Group.

We have also continued to strive to reduce our overheads. Whilst administrative expenses appear to have risen to £498,000 for the 6 months to March 2009 compared to £487,000 in the previous half-year, the 2009 figures include £ 112,000 development costs incurred by our new subsidiary, Talent Television South. These mask the reduction of core overhead costs to £386,000 for the half-year, compared to £487,000 in 2008 and £626,000 in 2007. Since the end of March 2009 further cost efficiency measures have been introduced, the benefit of which will be seen in the next financial year.

Whilst the trading background remains difficult, there are now indications of a beginning of a return to more normal market conditions, and the board and I believe the measures we have adopted leave the Company well placed to take advantage of such improvements. In the meantime I have one board change to announce: Stephen Callen is today joining the board as our new finance director, following the decision of Frances Horrell to step down for personal reasons. Stephen, a Chartered Accountant, has over fifteen years experience of the independent television sector. I would like to thank Frances for all her hard work during her time with the company.

Terry BateChairman26 June 2009

A separate announcement incorporating further details with regards to Stephen Callen's appointment, including the information required by Schedule 2(g) of the AIM Rules, will be made shortly.

FURTHER ENQUIRIES

Talent Group plc Tony Humphreys (Managing Director) 020 7421 7800

John East & Partners Limited, a subsidiary of Merchant Securities plc

John East / Simon Clements 020 7628 2200

CONSOLIDATED INCOME STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2009

Six months Six months Year ended to to 30-Sep 31-Mar 31-Mar 2008 2009 2008 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Revenue 303 1,164 1,841 Cost of sales (129) (823) (1,271) Gross profit 174 341 570 Administrative expenses (498) (487) (1,008) Finance income 1 1 7 Finance costs (20) - (10) Loss before taxation (343) (145) (441) Income tax expense - prior year - - 13 - current year - - - Loss for the period (343) (145) (428) Basic loss per share (pence) (2.06p) (0.89p) (2.63p) Diluted loss per share (pence) (1.96p) (0.87p) (2.53p)

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2009

31-Mar 31-Mar 30-Sep 2009 2008 2008 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 £'000 £'000 £'000 Assets Non-current Assets Goodwill 1,082 987 1,082 Other intangible assets 34 40 37 Property, plant & equipment 58 55 49 1,174 1,082 1,168 Current assets Inventories 71 44 68 Trade receivables 124 836 548 Cash & cash equivalents 121 35 178 316 915 794 Total assets 1,490 1,997 1,962 Equity and liabilities Equity Share capital 6,315 6,310 6,315 Share premium 11,675 11,634 11,675 Share option reserve 123 119 120 Retained earnings (17,505) (16,879) (17,162) Total equity 608 1,184 948 Current liabilities Bank loan - 450 - Borrowings 700 - 600 Trade & other payables 182 363 414 Total liabilities 882 813 1,014 Total equity & liabilities 1,490 1,997 1,962

CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 MARCH 2009

Six months Six months Year ended to to 30-Sep 31-Mar 31-Mar 2008 2009 2008 (Audited) (Unaudited) (Unaudited) £'000 £'000 £'000 Cash flows from operating activities Loss before taxation (343) (145) (441) Adjustments for: Depreciation of tangible assets 7 9 20 Amortisation of intangible assets 3 3 6 Loss on disposal of tangible - - 3assets Interest received (1) (6) (7) Interest paid 20 4 10 (314) (135) (409) Decrease/ (increase) in trade and 424 (425) (140)other receivables (Increase)/ decrease in (3) 10 (14)inventories Decrease in trade and other (777)payables (232) (810) (125) (1,360) 1,340 Tax refund received - - 21 Tax paid - - (1) Net cash flows from operating (1,320)activities (125) (1,360) Cash flows from investing activities Purchase of property, plant and (8)equipment (13) (1) Interest received 1 6 7 Acquisition of subsidiary net of - - 2cash acquired Net cash used in investing (12) 5 1activities Cash flows from financing activities Proceeds from borrowings 100 450 600 Repayment of borrowings - - (36) Interest Paid (20) (3) (10) Net cash from financing activities 80 447 554 Net cash decrease in cash and cash (765)equivalents (57) (908) Cash and cash equivalents at 943beginning of period 178 943 Cash and cash equivalent at end of 178period 121 35

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 MARCH 2009

Share Share Share Option Retained Capital Premium Reserve Earnings Total £'000 £'000 £'000 £'000 £'000 At 30 September 6,315 11,675 120 (17,162) 9482008 Changes in equity Loss for period - - - (343) (343) Equity share option - - 3 - recognised 3 At 31 March 2009 6,315 11,675 123 (17,505) 608 Share Share Share Option Retained Capital Premium Reserve Earnings Total £'000 £'000 £'000 £'000 £'000 At 30 September 6,310 11,634 117 (16,734) 1,3272007 Changes in equity Profit for period - - - (145) (145) Equity share option - - 2 - recognised 2 At 31 March 2008 6,310 11,634 119 (16,879) 1,184

NOTES TO THE HALF-YEARLY RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2009

1. BASIS OF PREPARATION

The interim report is unaudited and does not constitute statutory accounts within the meaning of s240 of the Companies Act 1985. The statutory accounts for 2007, which were prepared under IFRS, have been delivered to the Registrar of Companies. The auditor's opinion on these accounts was unmodified and did not contain a statement under s237 (2) or s237 (3) of the Companies Act 1985.

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 2008 and the year ended 30 September 2008.

2. REVENUE AND LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION

The results for the six months ended 31 March 2009 and 31 March 2008 areunaudited. The audited results for the year ended 30 September 2008 have alsobeen shown.By geographical 2009 2008 location Loss Loss Before Before Revenue Taxation Revenue Taxation £'000 £'000 £'000 £'000 United Kingdom 295 (334) 1,096 (137) United States - - - - Asia 8 (9) 68 (8) 303 (343) 1,164 (145)

3. LOSS PER ORDINARY SHARE

The loss per share is based on a loss for the period of £343,000 (six months ended 31 March 2008: a loss of £145,000; year ended 30 September 2008: a loss of £428,000), being the loss attributable to ordinary shareholders, and a weighted average of 16,670,284 (31 March 2008: 16,210,284; 30 September 2008: 16,241,791) ordinary shares.

The diluted 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 EQUIVALENTS

31-Mar 31-Mar 30-Sep 2009 2008 2008 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 Decrease in cash and cash equivalents in the period (57) (908) (765) Cash and cash equivalents at beginning 178 943 943of period Cash and cash equivalents at end of 121 (35) 178period

5. COPIES OF THE INTERIM RESULTS

Copies of the half-yearly results will be available from the Company's registered office 13-19 Vine Hill, London EC1R 5DW and will be available from the Company's website www.talenttv.com.