VITA.L Regulatory News (VITA)

8 Nov 2006 11:17

Cellcast plc08 November 2006 Press Release 8 November 2006 Cellcast plc ("Cellcast" or "the Company") Trading Update and Issue of Equity Trading Update Following a full review of UK operations, the Company has taken action to reducethe fixed costs of its UK operations and its channel production overheads. Ithas also implemented a plan either to withdraw from, or redeploy, bandwidth toincrease its gross profit. Whilst significant savings have already beenachieved and booked, the full benefits will not be realised until the first halfof 2007. As a result, the Directors no longer expect the UK business to returnto profitability during the second half of 2006. The Directors, however, stillremain confident that the already implemented cost reduction plans will lead toa return to previously achieved UK gross margins during the first half of 2007. Whilst cutting UK related costs, the Company has continued to invest in itstechnology platform and associated interactive formats for which it has seengrowing demand from international broadcasters. More specifically the Companyhas chosen to focus on the major developing mobile and broadcast markets ofBrazil, India, China and South East Asia where both the broadcast, telecoms andregulatory environments best favour both immediate and long term returns, andwhere most upfront investment has already been made in the course of 2006. Cellcast has established Cellcast South East Asia in a 50-50 Joint Venture withmTouche Technology Berhad, a leading regional mobile entertainment companylisted on MESDAQ. The Joint Venture's first format has premiered on Malaysiatop terrestrial broadcaster TV3 and its immediate success in terms of ratingsand viewer response has led to strong interest from other regional broadcastersand secured contracts for launch in Indonesia and Thailand. Cellcast is also realising new ways of monetising its investment in itsproprietary technology outside of its own broadcast operations and has beenapproached to license its multi-media platform and applications for other mediaservices. This could provide a quick route to capture value for investors inthe form of upfront and ongoing licensing fees. Issue of Equity The Company announces that the Board has issued and allotted 453,125 newOrdinary Shares of 3p each at 8p each to HB Corporate, in lieu of fees andplacing commission, in relation to the Placing by the Company as announced on 31August 2006. These shares, once issued, will rank pari passu with the existing OrdinaryShares. Application has been made for the shares to be admitted to AIM, withadmission to trading on AIM expected to be on 13 November 2006. In addition, as set out in the Placing Announcement of August 31 2006, AndrewWilson (Chief Executive Officer) and Bertrand Folliet (Chief Operating Officer)each subscribed to 1,562,500 new Ordinary Shares at 8p per share throughHarkness Trading Limited, a company they beneficially own. Andrew is currentlyinterested in 2,955,997 ordinary shares and Bertrand is currently interested in2,925,497 ordinary shares in the Company, representing 10.32 and 10.43 per centof the Company's issued share capital respectively. - Ends - For further information:Cellcast plcAndrew Wilson, CEO Tel: +44 (0) 20 7190 0300andrew@cellcast.tv www.cellcast.tv HB CorporateImran Ahmad / Cecil Jordaan Tel: +44 (0) 20 7510 8600i.ahmad@hbcorporate.co.uk www.hbcorporate.co.uk Media enquiries:AbchurchHenry Harrison-Topham / Gareth Mead Tel: +44 (0) 20 7398 7710henry.ht@abchurch-group.com www.abchurch-group.com Notes to Editors: Cellcast plc Cellcast plc is a leading international provider of participation televisionapplications and interactive mobile content in the fast-growing multi-platformdigital entertainment sector. Headquartered in London, with associatedoperations in Paris, Beirut, Mumbai, Hong Kong and Buenos Aires, Cellcast'sapplications and programming are distributed on the Sky Digital and Freeviewplatforms in the UK and by major broadcasters including Canal+ in France; STB inUkraine; Future TV, Dubai Television and Rotana TV in the Middle East; Zee TVand Star TV in India; TV3 in Malaysia, TVS-3 in China; Telefe in Argentina; andRede in Brazil. Cellcast's revenues streams are independent of both advertising and subscriptionfees. With a network of revenue sharing agreements with telecommunicationscarriers and aggregators across five continents, Cellcast receives a share ofthe call revenue every time a consumer uses a mobile or fixed-line phone toparticipate in its interactive entertainment, revenue which is retained orshared with its broadcast partners. Cellcast's programme formats and proprietaryInteractive Platform (CIP) also facilitate delivery of content to mobile phones,the internet and broadband-delivered IPTV. This enables viewers to continueparticipating in a programme away from the TV, generating 24/7 revenueopportunities. In May 2006, Cellcast announced the launch of a range of newinteractive entertainment services on Freeview's digital terrestrial television(DTT) platform in the UK which included a breakthrough in interactive TVtechnology. Cellcast plc joined the AIM market (AIM) of the London Stock Exchange on 21September 2005. This information is provided by RNS The company news service from the London Stock Exchange