React Group Regulatory News (REAT)

29 Jun 2009 15:00



29 June 2009

X-PHONICS PLC ("X-Phonics" or the "Company")

Interim Statement for the period ended 31st March 2009

CHAIRMAN'S STATEMENT

I present the financial statements for the six months to 31st March 2009.

It continues to be a difficult time for the music industry and there has been little improvement in the fortunes of smaller businesses such as ours that do not have established artists generating revenues with which to support the development of newer artists. As stated in my previous statement the market further deteriorated in the early part of 2009. The larger records labels, through which we had previously jointly developed our artists, have taken on very few new projects. Retail distribution in the high street is sparse with those active in the market only interested in selling established artist product. Alternative distribution channels are also concerned about taking on developing artists and offer less attractive returns when they do so. 

Financial Commentary 

Sales of £67,712 were primarily achieved from our earlier stage artists and from other non-music related activities that have been developed. Maeve O'Boyle has recorded her first album which is expected to be released through Linn Records in July 2009.

Overheads have been reduced substantially to offset, as far as is possible, the lack of sales. The directors are not drawing salaries and do not intend to do so under current circumstances. Other costs are being managed at a significantly lower level than in previous periods. 

As I said in my statement published in April, given the company's current situation and its reliance upon the music industry, the directors believe that it is in the best interest of shareholders to limit any additional exposure in that sector other than to what is necessary to maintain the collection of cash from existing projects. 

I also said that the directors believed it sensible to seek alternative opportunities that could make use of the company's infrastructure and listing on AIM in market sectors where there is scale, growth and a revenue model that is better suited to a public market. We continue to seek such opportunities and I hope to be able to report progress upon this in due course.

Robin Davies

Chairman

29 June 2009

  X-Phonics plc

Consolidated Income Statement for six months ended 31st March 2009

All of the activities of the group are classed as continuing

X-Phonics plc

Consolidated Balance Sheet as at 31st March 2009

X-Phonics plc

Consolidated Statement of Changes in Equity as at 31st March 2009

X-Phonics plc

Consolidated Cash Flow Statement for six months ended 31st March 2009

Notes to the unaudited financial statements

1. Basis of prepapration

The financial information included in this report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The consolidated interim financial statements for the six months ended 31 March 2009 have been prepared under applicable International Financial Reporting Standards adopted by the European Union ("IFRS"). The financial information for the period ended 30 September 2008 has been extracted from the statutory accounts for that period. The auditors' report on the full statutory accounts for the period ended 30 September 2008 was unqualified with an emphasis of matter with regards going concern. The financial information for the six months ended 31 March 2008 and 31 March 2009 has not been audited.

2. Principal Accounting Policies

The principal accounting policies adopted are consistent with those of the annual financial statements for the year ended 30 September 2008 and are those expected to be applied for the year ended 30 September 2009. 

3. Earnings per Share

The earnings per ordinary share have been calculated on the ordinary activities after taxation of £38,719 (31 March 2008 - £217,177, 30 September 2008 - £804,623) using the weighted average number of ordinary shares in issue during the period being 66,214,920 (31 March 2008 - 66,214,920, 30 September 2008 - 66,214,920). The weighted average number of diluted ordinary shares in issue during the period was 66,214,920 (31 March 2008 - 66,214,920, 30 September 2008 - 66,214,920).