Zinc Media Regulatory News (ZIN)

13 Jun 2006 07:01

Ten Alps PLC13 June 2006 TV production group Ten Alps Plc ('Ten Alps') announces results for the year toMarch 31, 2006. • Revenues up 21.5% to £42.21m (2005: £34.75m) • EBITDA* up 108.7% to £3.03m (2004: £1.45m) • Adjusted pre-tax profit up 122.3% to £2.66m (2005: £1.2m) • EBIT up 236.8% to £1.91m (2005: £567,000) • Net profit up 251.3% to £816,000 (2005: £232,000) • Adjusted** EPS up 82.9% to 3.31p (2005: 1.81p) • Basic EPS up 251.9% to 1.83p (2005: 0.52p) • Cash balance at year end of £14.52m (2004: £7.52m) • Debt/Equity ratio was 0.83 in 2006 (2005: N/A) * Operating profit before charging depreciation and amortisation of goodwill ** Operating profit before charging amortisation of goodwill Trading Highlights, current year 2006-7: • Projected Revenues 50% up year-on-year, to above £31m for the six-month period ending 30 September 2006, subject to unforeseen events. • Good order book from ongoing production businesses, with over 30 current TV and radio productions and 300 specialist media contracts for print and internet. Today's other news (see separate RNS announcement): • Entertainment TV commissions won, signalling launch of a formats business • DVD deal with industry-leading distributor 2 Entertain, with advance against DVD projects from all group factual companies • Planned launch of Public TV, a UK public sector video website, in late 2006, as key element in internet TV strategy. (www.Public.tv) Strategic Highlights 2005-6: • Acquisition (31 March 2006) of specialist publisher McMillan Scott for up to £12.3m - around 300 titles, 250 staff, turnover to June 2005 of £26m. Ten Alps' growing internet operation is now based at McMillan Scott's London office. • Focus on opportunities in niche public sector internet TV as natural bridge between TV and contract publishing industries • In factual TV - success and growth. Programmes produced for all UK broadcasters, and several US and European channels. Acquisition of production company Hart Davies. • TV drama development-funding deal with Fremantle. • Addition of experienced management at Ten Alps group level - Nigel Dacre as Head of Digital, Jo Willett as Head of Drama and Fiona Stourton who will be joining from the BBC in September 06 as group-wide factual executive • Following the acquisitions in the year, staff numbers have more than doubled to 430 Chairman Brian Walden I am glad to report that this was a year of improved profits and margins, aswell as substantial growth in revenues, with foundations laid by ourhard-working staff for more growth in 2006-7. The group's revenues are nowcoming from three sources in broadly equal measure - broadcasters, the UK publicsector and the UK private sector - which is a desirably diversified risk profilethat is not typical for our industry. Of the specific strategic tasks the company set itself a year ago, we haveachieved profits growth, three acquisitions and group-wide drama and DVDdistribution deals. We have created high-quality TV programmes for all major UKbroadcasters, and are making many more, including numerous high-budgetdocudramas and, for the first time, entertainment formats. We have gone into theinternet, not just as future-proofing but as the major strategic thrust. Onegoal not yet achieved is to open a US office and we are looking at options onthat. Ten Alps' cash balance has grown again this year. The board believes furtheracquisitions are very realistic, intended to boost existing operations, andclearly a healthy cash balance would be useful in that respect. There will alsobe internal investments in internet operations. The plan is to maintain our expectation of organic profits growth whilst makingthe longer-term investments mentioned above. Combining all those opportunitieswith a prudent view of debt repayments, the board will not therefore startpaying a dividend this year. We would prefer to see the business grow. Chief Executive We aim for growth in TV production, including a new emphasis in live TV events,dramas and formats. We also aim to become a market leader in public sector internet TV over the nextfive years. We plan to provide state and advertiser-funded programming andtraining in distinct niches for the UK's 5.8 million public sector employees,and their customers, the wider public. Later this year we intend to launchPublic TV as our overall platform for the UK public sector as a whole. We already have a significant interest in one area - education. Teachers' TV isnow a worldwide market leader, with over 1000 original programmes online. Through McMillan Scott - acquired on the last day of the financial year andtherefore not featured in the revenue or profit figures above - we have hundredsof advertising-funded titles. Their staff are working to put many of thosetitles online in 2006, as the bedrock of that Public TV website, and its sourceof advertising. Then for niche internet TV channels in the next year or two weare currently exploring healthcare, law, utilities and trade. A powerful media company requires both editorial and commercial strength.Happily, we have had award-winning TV productions over a number of years. Thisyear we now also have a specialised, 200-strong advertising sales force. Puttingthe two together, we have the right elements to move forward in a medialandscape where the old fences - say, between publishing, TV and the internet -are being taken down. www.tenalps.com Contact Parkgreen Communications, Paul McManus 0207 786 9600 07980 541 893 Alex Connock - Chief Executive, c/o Moira McManus 0207 878 2311 Nitil Patel - Finance Director 0207 428 3182 TEN ALPS PLC Preliminary Announcement of the results for the year ended 31 March 2006 Television & Radio Production Ten Alps produces factual programmes through its companies 3BM TV, Blakeway,Brook Lapping and HDTV. It also owns a 70% stake in the management companycontracted by the UK Department for Education and Skills to provide theTeachers' TV channel. In 2005-6 Ten Alps delivered programmes to all the majorUK broadcasters, and this year the group adds drama and entertainmentprogramming. In the longer term, it aims to make internet TV a major focus. 2006-7 slate As a snapshot, in June 2006 Ten Alps has 13 docudramas, 6 factual series and 8factual one-off programmes in production for TV channels in the UK and US. Thereare a further 10 series in production for digital TV and 15 current radiocommissions. Docudrama is a major theme for Ten Alps this year. Amongst the new projectsbeing produced by Ten Alps companies are coverage of the Gulf War (Blakeway forBBC2) 1970s armed robbers (HDTV/BBC), the SAS rescue in Sierra Leone (3BM) Nazileaders (HDTV) a Hollywood shoot-out (3BM), 9-11 (Blakeway in co-production withDangerous Films for BBC1) and Bali (Brook Lapping/Sky/Channel Ten Australia andother broadcasters.) For the American market is perhaps the biggest production, a major docudramafilm Surviving Katrina (Discovery Channel/Brook Lapping), telling the story ofthe New Orleans hurricane for its first anniversary, through the eyes of peoplewho were caught up in it. It follows the success of The Flight That Fought Back,a Brook Lapping film about 9-11, which won the highest-rating of 2005 onDiscovery US, and was described by the Hollywood Reporter as "compellingtelevision." New factual series include Clash of Worlds (Blakeway/BBC2) about the West andIslam, Summits (Blakeway/BBC4), Blair (Brook Lapping/Channel 4) and Medicine'sStrangest Cases (Ten Alps TV/Five). Summers (Blakeway/BBC2) tells the story offour iconic years in British history, Who Gets the Heart (HDTV/Channel 4)concerns transplant operations, and The War of the World (Blakeway/Channel 4) isthe major new series from Harvard-based British historian Niall Fergusson,taking on the received wisdom about 20th century history. New one-off commissions include Travels with the US Military (3BMPBS), Phantomof the Opera (Brook Lapping/BBC1), Europe's 9-11 and the Neo-Con Case (BrookLapping/PBS), Stanley Goes to Europe (Brook Lapping/More4) and a Dispatches forChannel 4 (HDTV). Ten Alps has moved into entertainment with two productions: Get Your ActTogether, a six-part series now in production for Channel 4, and Top Dog, aten-part series for Animal Planet (Discovery Networks Europe). Ten Alps plans todevelop more formats in the coming year. And the group has moved into drama,with a number of projects in development. In radio, Ten Alps-owned production companies have 8 current projects for BBCRadio 4 including (from Brook Lapping) Miracle Detectives, Invasion of theYellow Ducks, The End is Nigh .... Again, Bling Blong and The Page Turners.Projects for BBC Radio 2, include Madonna, Def Jam, Buddy Holly, Andy Warhol,Rockabilly and15th series of The Smith Lectures. Ten Alps Radio continues toco-produce (with BBC News) the Sunday morning political slot Worricker for BBCRadio 5 Live. Awards Norma Percy's Brook Lapping team, who made Elusive Peace, the BBC2 documentaryseries telling the story of recent peace efforts between Israel and the Arabs,won the Programme of the Year award presented by RTS Television Journalism,amongst other awards. The Independent reviewed the programme thus: "NormaPercy's documentaries turn the dry world of international politics intothrilling, must-see television." At the prestigious Sony Radio Academy Awards, Brook Lapping Radio and Ten AlpsRadio won Gold and Silver respectively in the Music Special Award for theirproductions of Lennon: The Wenner Tapes (BBC Radio 4) and Classic Singles -David Bowie's Heroes (BBC Radio 2). The Lennon programme featured anextraordinary, never-before broadcast interview with John Lennon, dating from1970 in which he went into sometimes excruciating detail about his relationshipwith Paul McCartney. 3BM Television won The Radio Times Readers' Award for Best Religious Programmefor its production of Tsunami: Where was God, and a Merit Award at the SandfordSt Martin Trust Awards. Internet and Digital TV Ten Alps aims to be a force in public sector internet TV. Through Teachers' TV,it is already a leader in the field. Later this year, Public TV is intended togrow its position. The internet also provides major new opportunities forrights exploitation, alongside DVD. This was the year that broadband finally arrived. Broadband speed of 1MB+, andits penetration into 10 million UK homes went well beyond the critical point forinternet TV to be viable. This is a TV revolution, because it offers thechance for hundreds of niche channels too specialist and geographicallydistributed (including worldwide) even for digital TV, with its large,nation-specific fixed costs, but for which there exists a firm client base and afirm advertising market. That's why Ten Alps bought specialist contract publisher McMillan Scott. Withadvertiser and public sector funding for 300-plus niche titles under its belt,it's the perfect companion to Ten Alps' existing TV businesses in challengingfor leadership in this market. Public TV Ten Alps aims to launch Public TV in Autumn 2006 as a place to find video thatmight be helpful to the UK's 5.8 million public sector workers, and the publicitself. The website, www.Public.tv (for which there is simply a holding page online atpresent) will aim to offer a search of relevant, high-quality programmes for UKpublic sector workers. Public TV will make use of and the advertising sales force at McMillan Scott togain scale and traction in the specialist public sector market. Through PublicTV, Ten Alps will then aim to develop other niche TV activities in health,commerce, utilities and so forth - the video archives of which will be carriedalso in Public TV's database. Teachers' TV The Teachers' TV channel, funded by the Department for Education and Skills buteditorially independent, celebrated its first anniversary in February 2006 andshortly afterwards put its 1000th programme online. That means that by visiting www.teachers.tv at any time, Britain's 800,000education professionals can access high-quality programmes tailored for theirinterests. Web statistics show over 100,000 programmes streamed and downloadedin one month. People can also watch the channel in real time on ntl 803Telewest 240, HomeChoice 845, Freeview 88 and Sky channel 880. Teachers' TV broadcasts a wide range of programming - covering professionaldevelopment, resource reviews, education documentaries and news. It caters forteachers, teaching assistants, head teachers, school support staff, andgovernors. Documentary production company Brook Lapping, wholly-owned by Ten Alps, has a70% shareholding in the consortium which won the four-year contract to design,build and operate the channel following a competitive tender. The contract inhand runs to July 31st 2008. Rights exploitation A group-wide DVD deal has now been done with 2 Entertain, the market leadingdistribution company to exploit rights in Ten Alps back catalogue and futureprogrammes. In 2006 and beyond Ten Alps will also explore avenues inpay-per-view, internet download and satellite/cable. Ten Alps retains valuable rights in the programmes it is making, as well as aback catalogue with some rights ownership in over 400 programmes. With new termsof trade, production companies can do better deals on rights ownership. Thevalue of these projects is not explicitly shown on the Ten Alps balance sheet,except as any goodwill arising on acquisitions which has not yet been fullyamortised. Commercial Activities Ten Alps has become much stronger commercially this year, and now hassubstantial publishing and advertising activities. This gives the group adiverse client base and an ability to commercialise its content online and inlive events. Through its publishing activities alone it has 250 staff and 46,000advertisers. Ten Alps is now integrating its commercial and editorial skillsthrough the internet - which is an operation on some scale. Specialist Media Acquired in March 2006 for up to £12.3m, McMillan Scott is a major player inpublic sector media, including a roughly 40% market share amongst not-for-profitclients like councils and other public sector bodies. With offices in SavoyStreet, London (which has now become Ten Alps' head office), Macclesfield andManchester, it produces around 400 titles each year, some of them owned, andothers for which it handles the ad sales. It was these titles, as well as theunderlying financial stability of the business, that was the attraction for TenAlps as it seeks to expand in specialist internet media. McMillan Scott's titles constitute almost a definitive dictionary of publicsector niches. Clients include Diabetes UK, Nursing and Midwifery Council, theUKTI/DTI, British Waterways, The British Veterinary Association, The CaravanClub, the British Chambers of Commerce, the Association of AccountingTechnicians, Local Authority Building Control, the CBI, the Driving StandardsAgency, the Road Haulage Association and the Royal Aeronautical Society. Most ofthe work is print-based, though there are also evolving web design and eventsprovision operations within McMillan-Scott. Live Events More than ever, there is a demand for live engagement with an audience throughTV and events. Both McMillan Scott and Ten Alps have been providing clients withlive events and the two operations are being merged this Summer under the TenAlps Live banner. Events have been provided to EMI, Corus, BP, NCR, ManchesterUnited (the launch of its global sponsorship deal with AIG) and Metro.Conferences - which Ten Alps views as a key development opportunity, given thedepth of its client base - have been developed and staged in the transport andother sectors. And the group's six-strong sponsorship sales force is looking toraise funding for large-scale public events, along the lines of theOrange-sponsored Lighting Up London imagery projected onto Buckingham Palace in2004. Advertising & Marketing Ten Alps' two advertising agencies continued to work across a broad spectrum ofnational and international clients, producing both published material (sometimessimilar to the work of McMillan Scott) and marketing and communications work.Again, the old boundaries between media industries are blurring in the interneteconomy. Ten Alps RMA, with a particular focus in commercial maritime work, helpedclients from Ocean Village, part of P&O, to Sunsail, Crown Blue Line, C-Map andthe British Marine Federation. It retains the market-leading Stannah as a corecustomer and has around 20 other clients with an above 90% annual retentionrate. Meanwhile MTD continued to work internationally with the Helsinkiheadquartered fiber-based materials company Ahlstrom and major house-builderStewart Milne. MTD specialises in the Education sector, with business from theGlasgow Metropolitan College and the Scottish Qualifications Authority,Edinburgh's Telford College and Reid Kerr College. Finance Director's Report Trading Analysis Group turnover grew by 21.4% to £42.2m (2005: £34.75m) with acquisitionscontributing £406,000. Gross profit increased by 35.1% to £9.46m (2005: £7.00m). Gross margin has risen from 20.1% in 2005 to 22.4% in 2006, reflecting thebenefit of Teachers' TV Key Performance Indicator award and increased TV workacross the group. Administrative expenses (before goodwill amortisation)continue to be controlled and represent 16.3% of turnover (2005: 16.9%). The Group's EBITDA has increased by 108.7% to £3.03m (2005: £1.45m) reflectingcontinuing improved conditions in the TV Sector and the impact of Teachers' TV.The profit before tax (PBT) was £2.00m (2005: £627,000) after a goodwillamortisation charge of £658,000 (2005: £569,000) for the year. Basic earnings per share (EPS) increased from 0.52p in 2005 to 1.83p in 2006with a fully diluted EPS of 1.79p (2005:0.51p). Adjusted basic EPS (beforegoodwill amortisation) is 3.31p in 2006 compared to 1.81p in 2005. Group Balance Sheet The Group's Balance Sheet reflects the impact of the acquisition of McMillanScott Limited on 31 March 2006, mainly the resulting goodwill and the debt andequity finance to fund the transaction. Shareholders funds have increased from £7.04m to £12.1m, reflecting theacquisitions and the results for the year. The profit and loss account now showsa surplus of £1.01m (2005: £190,000). The long-term debt at the year-end reflects loans from the Bank of Scotland plc,which was used to fund the acquisition of McMillan Scott on 31 March 2006. Theamount outstanding as at 31 March 2006 was £9.35m (2005: £Nil). Also included inlong term debt are loans from the European Union for development of programmesof £280,000 (2005: £276,000) finance leases of £39,000 (2005: £16,000) anddeferred income in relation to fixed assets purchased by Educational DigitalLimited of £409,000 (2005: £445,000). Net Assets as at 31 March 2006 were £12.40m, of which £14.52m was held in cash(which includes £8.00m held in Teachers' TV). Share Price The mid-market share price of the Group has fluctuated between 44p and 68pduring the year. At the year -end the mid market closing price was 67.5p, givingthe Group a market capitalisation of £35m. TEN ALPS PLC Preliminary Announcement of the results for the year ended 31 March 2006 Summarised Consolidated Profit and Loss Account 2006 2005 Notes £'000's £'000's Turnover continuing operations 41,805 34,753 acquisitions 406 - 42,211 34,753 Cost of sales (32,749) (27,755) Gross profit 9,462 6,998 Administrative expenses - other (6,895) (5,862) Amortisation of goodwill (658) (569) Total administrative expenses (7,553) (6,431) Operating profit continuing operations 1,950 553 acquisitions (41) 14 1,909 567 Net interest receivable 91 60 Profit on ordinary activitiesbefore tax 2,000 627 Taxation (819) (252) Profit on ordinary activities aftertax 1,181 375 Minorityinterest (365) (143) Retained profit for the year 816 232 Basic earnings per share 2 1.83p 0.52p Diluted earnings per share 2 1.79p 0.51p A statement of recognised gains and losses is not included as there areno recognised gains or losses other than those disclosed above TEN ALPS PLC Preliminary Announcement of the results for the year ended 31 March 2006 Summarised Consolidated Balance Sheet 2006 2005 £ '000 £ '000Fixed assets Intangible assets 15,718 3,658 Tangible assets 1,611 1,279 17,329 4,937Current assets Work in progress 2,662 244 Debtors 12,978 7,233 Cash at bank 14,515 7,522 30,155 14,999 Creditors Amounts falling due within oneyear (25,005) (12,015) Net current assets 5,150 2,984 Total assets less currentliabilities 22,479 7,921 Creditors Amounts falling due after morethan one year (10,078) (737) Net assets 12,401 7,184 Capital and reserves Called up share capital 1,035 887 Share premium account 7,127 3,030 Merger reserve 2,930 2,930 Other reserve 2 2 Profit and loss account 1,006 190 Equity shareholders' funds 12,100 7,039 Equity minority interest 301 145 12,401 7,184 TEN ALPS PLC Preliminary Announcement of the results for the year ended 31 March 2006 Summarised Consolidated Cash Flow Statement 2006 2005 Notes £ '000 £ '000 Net Cash inflow from operating activities 5 3,644 5,338 Return on investments and servicing offinance (119) 60 Taxation (429) (151) Capital expenditure and financial investment (387) (1,027) Acquisitions and disposals (10,497) (518) Net cash (outflow)/inflow before financing (7,788) 3,702 Financing Issue of ordinary share capital 3,863 35 Expenses paid in connection with share issues 382 - Capital element of finance lease rentals (14) (52) Increase/(decrease) in bank and other loans 10,550 (134) Net cash inflow/(outflow) from financing 14,781 (151) Increase in cash 6,993 3,551 Reconciliation of net cash flow movement tomovement in net debt Increase in cash in period 6,993 3,551 Cash (inflow)/outflow from change in debt and leasefinancing (10,536) 52 Change in net debt resulting from cash flows (3,543) 3,603 Finance leases acquired with subsidiaries (116) - Movements in media loans - 134 Exchange adjustments (4) (8) (3,663) 3,729 Net funds at 1 April 2005 7,131 3,402 Net funds at 31 March 2006 3,468 7,131 TEN ALPS PLC Notes to the Preliminary Statements for the year ended 31 March 2006 1. No final dividend is being proposed. 2. Earnings per share Earnings Weighted Basic share Adjusted per average per amount share amount2006 £000 no. of shares pence pence Attributable to ordinary shareholders: Retained profit 816 Amortisation of goodwill 658 Adjusted earnings 1,474 Basic EPS 44,554,163 1.83 3.31 Dilutive effect of securities: Options 1,082,198 Diluted EPS 45,636,361 1.79 3.23 2005 Attributable to ordinary shareholders: Retained profit 232 Amortisation of goodwill 569 Adjusted earnings 801 Basic EPS 44,206,464 0.52 1.81 Dilutive effect of securities: Options 1,338,482 Diluted EPS 45,544,946 0.51 1.76 3. The financial information relating to the year ended 31 March 2006 set outabove does not constitute the Company's statutory accounts for that year, buthave been extracted from the statutory accounts, which received an unqualifiedauditors' report and which have not yet been filed with the Registrar ofCompanies. The financial information relating to the year ended 31 March 2005,has been extracted from the 2005 Annual Report and Accounts which received anunqualified auditors' report and have been delivered to the Registrar ofCompanies. 4. Copies of the Company's Annual Report and Accounts for 2006 will be sent toshareholders as soon as is practicable. Copies of this announcement areavailable at the Company's head office at 9 Savoy Street, London WC2 7ER andcopies of the Annual Report and Accounts will also be available on request. TEN ALPS PLC Notes to the Preliminary Statements for the year ended 31 March 2006 5. Net Cashflow from Operating Activities 2006 2005 £ '000 £ '000 Operating profit 1,908 567 Depreciation 464 330 Goodwill amortisation 658 569 Loss/ (gain) on sale of fixed assets 9 (1) Foreign exchange loss/ (gain) on media loans 4 8 Change in work in progress (25) (89) Change in debtors (1,546) (4,383) Change in creditors 2,172 8,337 Net Cash inflow from operating activities 3,644 5,338 This information is provided by RNS The company news service from the London Stock Exchange