GUSC.L Regulatory News (GUSC)

20 Jun 2008 13:29

20 June 2008 Talent Group plc ("Talent" or the "Company") Interim Results For the six month period ended 31 March 2007

Chairman's statement

I am pleased to report to shareholders for the first time since being appointed chairman following the annual general meeting at the end of January this year. The Company's interim results for the period under review show turnover of ‚£ 1,164 million (2007 - ‚£1,533 million), gross profit of ‚£341,000 (2007 - ‚£ 458,000) and a loss before and after taxation of ‚£145,000 (2007 - loss after taxation of ‚£325,000). The loss per share was 0.89p (2007-2.0 p)

Whilst these figures show a small improvement at the operating level, on a like for like basis, they are not what we would like them to be, even though the industry continues to go through a difficult period. I am pleased to say that to help compensate for these reductions, prudent management action brought our administration expenses down to ‚£487,000 from the 2007 figure of ‚£626,000.

As set out in the statement issued by the board on my behalf prior to my appointment as chairman, I believe that market conditions such as these can often result in unexpected business opportunities and that with the right support Talent can position itself to take advantage of such opportunities. This is why we are initiating a restructuring and reviewing the finances of the business, in addition to major changes in our personnel and premises.

Following John Kaye Cooper's departure to join ITV as Controller of Entertainment, we recruited Jonathan Glazier as director of entertainment of Talent Television Limited ("Talent TV"), our operating subsidiary. Jonathan not only brings a wealth of international experience with him but also confirmed his commitment to the Company when he acquired just under 10 per cent. of the Talent share capital from Mr Cooper. In addition, managing director Tony Humphreys and I increased our shareholdings in the Company to just under 17 per cent. and just under 25 per cent. respectively, underlining our confidence for the future.

Under the restructuring, our childrens' production activities will be brought under the aegis of the entertainment division and we have already indicated our intentions to expand our factual entertainment output. We also have a number of `scripted' projects in development and I will report on further progress in this field later in the year.

As well as having a strong development slate, I am pleased to report that the latest series of Best of Friends, currently showing on CBBC, has been well received and that the fifth Test the Nation - Japan increased its market share on the previous year. More recently, we were delighted to be commissioned by ITV for An Audience Without Jeremy Beadle, a tribute to the late presenter, hosted by Chris Tarrant, which was transmitted in a prime-time Saturday Night slot on ITV 1 in May.

Although we anticipate further commissions in the very near future, I am mindful that it will take the new team time to make its mark fully. With Jonathan Glazier only starting in his new post on 2nd June and with a year end of 30th September, I do not anticipate that meaningful organic progress will roll through until the 2008/09 financial year. Although the market remains difficult and competitive, we believe that these conditions will offer corporate opportunities which we intend to pursue.

Terry BateChairman20 June 2008Group Income Statement

For the six months ended 31 March 2008

6 months to 6 months to Year ended 31 March 31 March 30 September 2008 2007 2007 (Unaudited) (Unaudited) (Audited) ‚£'000 ‚£'000 ‚£'000 Revenue 1,164 1,533 3,333 Cost of sales (823) (1,075) (2,312) Gross profit 341 458 1,021 Administrative expenses (487) (626) (1,200) Finance income 1 13 21 Loss before taxation and exceptional (145) (155) (158)items Exceptional costs relating to an - (170) (162)unsuccessful acquisition Income tax expense - prior year - - (10) - current year - - 7 Loss for the period (145) (325) (323) Basic loss per share (pence) (0.89p) (2.00p) (1.99p) Diluted loss per share (pence) (0.87p) (1.91p) (1.94p)

The results relate to the continuing activities of the Group.

Group balance sheetAs at 31 March 2008 31 March 31 March 30 September 2008 2007 2007 (Unaudited) (Unaudited) (Audited) ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 Assets Non-current assets Goodwill 987 987 987 Other intangible assets 40 46 43 Property, plant & 55 61 62equipment 1,082 1,094 1,092 Current assets Inventories 44 44 54 Trade receivables 836 217 411 Cash & cash equivalents 35 477 943 915 738 1,408 Total assets 1,997 1,832 2,500 Equity and liabilities Equity Share capital 6,310 6,310 6,310 Share premium 11,634 11,634 11,634 Share option reserve 119 113 117 Retained earnings (16,879) (16,736) (16,734) Total equity 1,184 1,321 1,327 Current liabilities Bank loan 450 - - Trade & other payables 363 476 1,173 Current tax liability - 35 - Total liabilities 813 511 1,173 Total equity and 1,997 1,832 2,500liabilities

Group cash flow statement

For the six months ended 31 March 2008

Note 6 months to 6 months to Year ended 31 March 31 March 30 September 2008 2007 2007 (Unaudited) (Unaudited) (Audited) ‚£'000 ‚£'000 ‚£'000 Cash flows from operating activities Loss before taxation (145) (325) (320) Adjustments for: Depreciation 9 9 19 Amortisation of intangible assets 3 3 6 Interest received (6) (14) (21) Interest paid 4 - - (135) (327) (316) (Increase)/Decrease in trade and (425) 152 (42)other receivables Decrease/(Increase) in inventories 10 3 (15) (Decrease)/Increase in trade and (810) (577) 139other payables (1,360) (749) (234) Tax paid - - (45) Net cash flows from operating (1,360) (749) (279)activities Cash flows from investing activities Purchase of property, plant and (1) (4) (15)equipment Interest received 6 14 21 Interest paid (3) - - Net cash used in investing 2 10 6activities Cash flows from financing activities Proceeds from borrowings 450 - - Net cash from financing activities 450 - - Net cash decrease in cash and cash (908) (739) (273)equivalents Cash and cash equivalents at 943 1,216 1,216beginning of period Cash and cash equivalent at end of (35) 477 943period

Group statement of changes in equity

For the six months ended 31 March 2008

Share Share Share Retained Total Option Capital Premium Earnings Reserve ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 At 30 September 2007 6,310 11,634 117 (16,734) 1,327 Changes in equity Loss for period - - - (145) (145) Equity share option - - 2 - 2recognised At 31 March 2008 6,310 11,634 119 (16,879) 1,184 Share Share Share Retained Total Capital Premium Option Earnings Reserve ‚£'000 ‚£'000 ‚£'000 ‚£'000 ‚£'000 At 30 September 2006 6,310 11,634 112 (16,411) 1,645 Changes in equity Profit for period - - - (325) (325) Equity share option - - 1 - 1recognised At 31 March 2007 6,310 11,634 113 (16,736) 1,321

Notes to the interim financial statements For the six months ended 31 March 2008

1. Interim financial statements

The interim financial statements do not comprise statutory accounts for the purposes of s240 of the Companies Act 1985.

These interim financial statements have been prepared applying the accounting policies and presentation applied in preparing the Group's consolidated financial statements for the year ended 30 September 2007.

2. Revenue and loss on ordinary activities before taxation

The results for the six months ended 31 March 2008 and 31 March 2007 are unaudited. The audited results for the year ended 30 September 2007 have also been shown.

By geographical location 2008 2007 Loss Before Loss Before Revenue ‚£'000 taxation Revenue ‚£'000 Taxation ‚£'000 ‚£'000 United Kingdom 1,096 (137) 1,137 (241) United States - - 324 (68) Asia 68 (8) 72 (16) 1,164 (145) 1,533 (325)3. Loss per ordinary share

The loss per share is based on a loss for the period of ‚£145,000 (six months ended 31 March 2007: a loss of ‚£325,000; year ended 30 September 2007: a loss of ‚£323,000), being the loss attributable to ordinary shareholders and a weighted average of 16,210,284 (31 March 2007: 16,210,284; 30 September 2007: 16,210,284) 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 March 31 March 30 September 2008 2007 2007 (Unaudited) (Unaudited) (Audited) ‚£'000 ‚£'000 ‚£'000

Decrease in cash and cash equivalents (908) (739) (273) in the period

Cash and cash equivalents at beginning 943 1,216 1,216of period Cash and cash equivalents at end of (35) 477 943period

The loan of ‚£450,000 outstanding at 31 March 2008 related to a specific production and was repaid in full on 9 April 2008.

5. Copies of interim results

Copies of the interim results will be sent to shareholders shortly and will beavailable to members of the public from the Company's registered office, LionHouse, Red Lion Street, London, WC1R 4GB and on the Company's websitewww.talenttv.com.ENQUIRIES:Talent Group plc Tony Humphreys Tel: 020 7421 7800 John East & Partners Limited John East / Simon Clements Tel: 020 7628 2200