Zinc Media Regulatory News (ZIN)

13 Jun 2005 07:02

Ten Alps Communications PLC13 June 2005 for release 07.00 am 13 June 2005 Ten Alps Communications PLC: Final Results Year Ended March 31, 2005. Pre-tax profits up 398%. Turnover and EBITDA doubled. High number of TVproductions in progress. Factual TV production company Ten Alps Communications PLC ('Ten Alps') todayannounces its best ever results for the year ended March 31, 2005. Chief Executive Alex Connock said: "Organic growth in Ten Alps' TV business hasbeen the feature of the year. There has also been growth in broadcasters'appetite for factual TV, and indeed growth in the independent sector as a whole.We have reason to be optimistic about achieving further progress in the currentyear." Financial Highlights - strong organic growth: * Revenues up 107.7% to £34.75m (2004: £16.73m). * EBITDA up 105.7% to £1.46m (2004: £712,000). * Profit before tax up 398.4% to £628,000 (2004: £126,000). * Adjusted basic EPS increased by 33.1% to 1.81p (2004: 1.33p). * Cash increased 89.4% to £7.52m (2004 £3.97m) (This includes £1.89m (2004: £224,000) in relation to Teachers' TV.) * Net Assets at 31 March 2005 of £7.18m (2004: £6.77m); no significant debt. * Average staff numbers are now 152 (2004:92). Current trading - strong organic growth: * Revenue expected to grow by over 50% year-on-year in the six month period ending 30 September 2005, based on increased level of TV productions now contracted and in progress. * 35 TV productions underway, with significant retention of rights. High profile TV documentaries and docudramas for the BBC, Channel 4, Five, Sky One and Discovery. Rights ownership: * Library featuring elements of rights in over 350 produced programmes brought together for first time for future exploitation opportunities such as video on demand. Other Operational Highlights 2004-5: * Delivery of over 50 TV programmes during the year. * Teachers' TV launched in February 2005: Ten Alps owns 70% of the consortium which has contracted with a management company to run the Department for Education and Skills-funded channel. * Twice as many radio projects produced as in previous year. * Revenues doubled in Events division. Successful production of British stand at Japan World Expo for the UK Foreign Office. * Closure of Red Welly, the group's only loss-making company during the year, with full write-off in these results. Financial track record since 2001 launch: * No equity fundraising or significant use of debt since launch in 2001. * Revenues have increased from £6.5m to £34.75m, a compound annual growth rate of 52%. * Cash balance has risen at annual compound rate of 28%. * In the last three years, EBITDA has grown at an average compound rate of 56%, and net profits by an annual compound average 62%. Frequently Asked Questions: * Ten Alps' business founded: 1999. * Fundraising history: 2001 - £3.5m before costs. 2002-5 - none. * Why called Ten Alps? A backwards (mis)-spelling of Planet 24, the previous employer of the founding team. * Percentage of group turnover 2003-5 from projects where Bob Geldof was presenter: under 1.5%. * Options outstanding as percentage of issued equity: 4.6%. * Most obvious peers on stock market: RDF, Shed, TV Corp. * Approximate average per-hour budget of network TV programmes: docudrama - £300,000; documentary - £160,000. Chairman Brian Walden said: "A recent survey said that the average person nowspends 13 years watching TV. Companies like ours had better help give themsomething worth watching." www.tenalps.com Press Contact: Peter Binns / Jacqui Graves Binns and Co. PR Ltd 020 7153 1477 / 020 7153 1486 Editors' Notes: Ten Alps' Current Productions TV Docudrama: Catherine the Great - Brook Lapping for BBC2, PBS, Arte, NDR and others Zero Hour - 3BMTV for Discovery and Five (four films currently beingtransmitted) Zero Hour 2 - 3BMTV for Discovery (six films in production) The Flight That Fought Back - Brook Lapping for Discovery USTen Days To Victory - 3BMTV for Five TV Documentary: Elusive Peace - Brook Lapping for BBC2, PBS, Arte and others Warlords - 3BMTV for Channel 4, on air from early July 2005 (4 hours) The Long War (with Niall Fergusson) - Blakeway for Channel 4 (6 films)Gridlock - Brook Lapping for Channel 4, on air in July 2005.For the Love of Eleanor - Brook Lapping for Five, on air in July 2005. Dust to Dust - 3BM TV for Channel 4 Working Class - 3BMTV for Channel 4 The Improbable Mr Attlee - Blakeway for BBC4 Events that Changed our World, with Michael Buerk - 3BMTV for Five Britain's Greatest Monarch - 3BMTV for Five, on air 13 June 2005 Geldof in Africa - Brook Lapping series for BBC1 (on air Mondays and Wednesdaysfrom 20 June 2005) Peaches USA - Ten Alps TV for Sky One Hidden Treasure Houses (series of 6) - Blakeway for Five How we fell for Europe - Brook Lapping for BBC2, went out June 4 2005Fran in Sudan - Blakeway for ITV Scotland Middle Classes - Blakeway for Channel 4, 17 July 2005 Live Aid Day - Brook Lapping for BBC2, on air 18 June 2005 Seeing is Believing (with Sir John Major, Ambassador for Vision 20/20) -Blakeway for BBC World Resource Review - Brook Lapping Education for Teachers' TV CareerWise - Brook Lapping Education for Teachers' TV Teachers' TV News - Brook Lapping Education for Teachers' TV What If - Brook Lapping Education for Teachers' TV Ted Wragg Meets.... - Brook Lapping Education for Teachers' TV Hot Management - Brook Lapping Education for Teachers' TV School Matters - Brook Lapping Education for Teachers' TV The Teaching Challenge - Brook Lapping Education for Teachers' TV TV Factual Entertainment: Celebrity Entourage - Ten Alps TV for ITV2 Manchester United's Top 50 Goals / The Top 50 Goals Scored Against ManchesterUnited - Ten Alps TV for Sky One Radio: Julian Worricker - Ten Alps Radio co-production with BBC News for BBC Radio 5Live (weekly) A Point of View (with Brian Walden) - Brook Lapping for BBC Radio 4 The Smith Lectures Series 13 - Ten Alps Radio for BBC Radio 2 Political Bollywood - Brook Lapping for BBC Radio 4 The Disease Detectives - Brook Lapping for BBC Radio 4 Madonna - Ten Alps Radio for BBC Radio 2 The Mamas and Papas - Ten Alps Radio for BBC Radio 2 Classic Singles - Ten Alps Radio for BBC Radio 2 Chairman's Statement "This is the year Ten Alps has achieved sufficient volume to be a significantindependent producer of factual TV. At any given time, we have had up to 30 TV programmes in production - a hugeleap. Our producers have made superb programmes, from To Kill and Kill Againabout Harold Shipman on ITV, to Jeremy Vine Meets on BBC1, to Hidden CountryHouses on Five, to Zero Hour for Discovery. Our teams provided many hours ofprogrammes to the new Teachers' TV channel, award-winning BBC Radio programming,strong commercial work and major live events from London to Japan. We have anenormous range of programmes in production. These are listed above. In the past 12 months we continued to invest for revenue growth in an expandingTV production market, to target greater profits. To reduce costs, weconsolidated the offices of some of our production companies. Blakeway and 3BMnow share an office building, and Dr Party has merged into Ten Alps Events. RedWelly's operations were closed, with the animation business migrated to Ten AlpsTV. We then addressed central overheads, whilst increasing the level of businessthey support. We are focussed on increasing revenue and at the same timereducing costs. As ever, all that Ten Alps has achieved is down to the talent of the people weemploy, to whom, on behalf of the shareholders, we are very grateful." Chief Executive's Statement "Now that we have a four-year track record of successful delivery, we considerthat it is the time for Ten Alps to move to the next stage of its development. Our plan is to be one of the key players in Britain's growing independent TVsector - in which consolidation has a long way to go. From 2005 onwards, we aim to produce more content, own more rights and be moreactive in their exploitation. We plan soon to hire more top TV producers, makingorganic growth projects our main focus. We will also consider acquisition deals,if the valuations are right. From an investor relations perspective, we willwork at explaining our strategy to the larger funds. Our financial approach has been as old as the hills. We have made no significantborrowings, nor raised new equity from the market, since our launch in 2001.Since then, Ten Alps' revenues have increased from £6.5m to £34.75m, while thecash balance has risen from £2.55m to just over £7.52m. In the last three years,our earnings before goodwill amortization and tax have grown at an averagecompound rate of 56%, and our net profits by an annual average of 62%. On current information, we expect that our revenues will increase by over 50%year-on-year in the first half of 2005-6. We also have a degree of long termvisibility on revenues deriving from one very large contract to 2008, and webelieve it is reasonable to assume a decent amount of returning business fromother activities. But investors in this company (and indeed the media sector ingeneral) will be aware that there is always the risk of a downturn in the levelof contracts won. We have sought to mitigate that risk by having a good spreadof clients, but the risk clearly exists nonetheless for any period beyond thenext six months. Above all, financial success in the media will be about delivering the bestpossible creative quality: everything stems from that." 2004-5 Report: Television Production In 2004-5 Ten Alps group companies delivered over 50 programmes to BBC1 & 2,ITV, Channel 4, Five, Sky One, Discovery and a variety of European channels. Programmes are created by specialist production companies 3BM TV, Blakeway,Brook Lapping, Know Comment and Ten Alps TV. Ten Alps is also, via Brook Lapping, a 70% shareholder in the consortiumcontracted by the Department for Education and Skills for the Teachers' TVChannel (Sky channel 592) until mid-2008 (see below for details.) Brook LappingEducation has already produced scores of hours of programming for the channel. In terms of prestige documentary projects, Brook Lapping are making ElusivePeace, a three-part series for BBC2, PBS in America and an array of otherbroadcasters worldwide, about Israel, Palestine and the great powers over theyears since the company's previous series on Palestine, The 50 Years War, wastransmitted in 1998. Blakeway are making The Long War, effectively an overviewof 20th century history, with Professor Niall Fergusson. And 3BM's Warlords,about the psychological battles between leaders in the Second World War, isabout to go on air. We are proud to be associated with serious projects such asthese. Meanwhile, one big growth story for the Ten Alps group this year has beendocudrama. The demand for programmes combining high-quality journalisticinvestigation and visceral dramatic sequences plays well to the strengths of ourcompanies, and during 2005 we will deliver over 10 hours of it. Production company 3BM, having just finished Ten Days to Victory about the veryend of World War 2, is now making its 10th episode of Zero Hour, a series ofdramatised accounts of modern events (like The Bali Bomb), filmed everywherefrom Malaysia to Canada. For Discovery US (from Brook Lapping) comes The FlightThat Fought Back, about what really happened on board the 9/11 flight thatcrashed in Pennsylvania, which has been filmed in Pennsylvania and Los Angeles,and is also set for possible cinema release. The company is also in productionwith Catherine the Great, for a range of European broadcasters. We aim to expandin this area, and possibly use it as a bridgehead into drama. 2004-5 Report: Teachers' TV The Teachers' TV channel launched in February 2005, broadcasting a wide range ofprogramming - covering professional development, resource reviews, educationdocumentaries and news. Highlights so far have included a behaviour management series by the respectedexperts John Bayley and Sue Cowley; a Teaching Challenge documentary in whichcelebrities like John Humphrys spent time in a classroom; and electionprogrammes, including a weekly Testing the Parties, with politicians facingquestions from a panel of teachers. Teachers' TV is on air 24 hours a day on Sky, ntl, Telewest, and HomeChoice, andfrom midnight to 6am on Freeview. It caters for all those involved in schools -teachers, teaching assistants, headteachers, school support staff, andgovernors. The channel is backed up by a comprehensive website - www.teachers.tv - one ofthe most advanced of its kind. On the site are schedule and programme information, printable resources, and,above all, an extensive archive of downloadable programmes for viewing. If ateacher or school has broadband, they can watch almost any programme made forTeachers' TV on an ordinary computer, at any time. Teachers' TV is funded by the Department for Education and Skills (DfES) - thefirst time the Government has funded a television channel, and it's the first ofits kind in Europe. But it is editorially independent. Documentary production company Brook Lapping, wholly-owned by Ten Alps, has a70% shareholding in the consortium which won the four-year contract to operatethe channel following a competitive tender in 2003. The other consortiumshareholders are ITV plc (20%) and the Institute of Education, which is part ofthe University of London (10%). A separate company was set up, Education DigitalManagement, to manage the channel on a day-to-day basis - with Nigel Dacre, theformer Editor of ITN News, as Chief Executive, and Andrew Bethell, an educationprogramme maker and former teacher, as Director of Programmes. 2004-5 Report: Radio Ten Alps produced twice as many radio projects in 2004-5 as the year before, andthe independent radio production sector is starting to follow TV, with increasedproduction for independent radio producers. This year Brook Lapping produced the new 13-part series of political talks, APoint of View, with Brian Walden, for BBC Radio 4, and is currently at work onan extended series. Documentaries such as The Lincolnshire Poacher, about intelligenceagency radio stations that broadcast nothing but series of numbers,and Political Bollywood, about the social and political origins ofIndian movies, are also being aired in 2005. Meanwhile Ten Alps Radio continues to co-produce (with BBC News) the Sony GoldAward-winning Worricker Programme, a weekly, live current affairs broadcast onBBC Radio 5 Live. And we've made more for BBC Radio 2, including the 13th series ofcomedy programme The Smith Lectures, with Arthur Smith, and music programmesabout Madonna, The Mamas and Papas and other artists. 2004-5 Report: Rights ownership Ten Alps retains valuable rights in the programmes it is making, and has for thefirst time quantified its significant back catalogue of programme rights. This year, two things have really changed the ability of TV producers to retainand exploit rights in the programmes they make; government intervention, and anincreasingly international market. For the first 20 years of the independent TV production sector, companies gavethe majority of rights to broadcasters in return for full funding of theprojects. What was left in the back-catalogue of Ten Alps' constituent companieshad been little-exploited, as programmes more than a year or two old hadproduced only modest income. With new terms of trade, production companies can now do better deals on rightsownership, and a huge range of new outlets means they can revisit archives andfind new opportunities to make money. That's why Ten Alps invested this year in bringing together its programmelibrary of over 350 projects, in one consolidated and searchable database,available to buyers on the internet, plus offering logged-in users all thenecessary information on precisely which rights are owned. That's because Ten Alps owns elements of the rights in all these projects - butonly in some cases does it own all the rights. The big job for the coming yearsis to try translate the value in this library into cash flow by exploitingprogrammes in overseas markets, satellite channels, DVD and pay-per-view. AndTen Alps will be adding to the library all the time with new films in which itoften now owns more rights. The value of these projects is not explicitly shown on the Ten Alps balancesheet, except insofar as the value was included in goodwill arising onacquisitions which has not yet been fully amortised. 2004-5 Report: Commercial Work Our events revenues doubled last year. Our advertising revenues were flatyear-on-year. There is only one kind of TV commercial that cannot be fast-forwarded on set topboxes, and that's a live one, since you can't go forward in time. That's why live, heavily-branded events are taking over chunks of both the TVand advertising businesses. Customers like paying for them because they are theonly place on TV where an advert is still guaranteed its audience. That's why Ten Alps is expanding in live events. They aren't just synergisticwith TV and Radio - they actually are TV and Radio shows. Events The convergence between the event and the advertiser is happening in music. Ourteam obtained sponsorship from newspaper group Metro in a deal to create 'TheMetro Weekend', a brand new event with possible radio tie-ins on Clapham Common,headlined by Fatboy Slim and the Happy Mondays. We were asked by the Home Office this year to handle the televised HolocaustMemorial Service at Westminster Abbey - attended by the Queen, the Duke ofEdinburgh and the full cabinet. Our biggest production event of the year was the highly-commended and BronzeMedal-winning (out of over 100 competitor countries) British Pavilion on behalfof the Foreign & Commonwealth Office at the Global Expo in Aichi Japan,co-sponsored by 8 global corporations. That contract is one of the most sought after that the FCO issues. Our partnersfor the event included the Natural History museum - the first time they agreedto be involved in the commercial sector. Meanwhile we produced large events for EMI, UBS, Ford and NCR, and we won thehighly competitive tender to become outsourced corporate events agency to BP.This was a strong performance by our events division, whose revenues broadlydoubled. Advertising Our two advertising agencies represent a wide range of national andinternational clients, which include a number of leading brands. Their revenueswere roughly flat on the year. Ten Alps MTD (based in Edinburgh but with a client base stretching into Europe)achieved its highest-ever ranking in Campaign magazine this year and was activein press, poster, radio, TV advertising, direct mail and design. It was rankedNo 6 in Scotland by the advertising and marketing magazine 'The Drum'. MTD continued to work internationally with the Helsinki headquarteredfiber-based materials company Ahlstrom. Major house-builder Stewart Milne andKwik-Fit Financial Services continued to invest in strong advertisingprogrammes. The Agency extended its marketing credentials within the Education sector andpicked up business from the Glasgow Metropolitan College and the ScottishQualifications Authority. New campaigns were produced for Edinburgh's TelfordCollege and Reid Kerr College, who won gold and silver awards at the ScottishFurther Education Marketing Awards. Ten Alps MTD have just been appointed to create, plan and manage a majornational recruitment advertising campaign for Ashbourne Healthcare, one of theUK's biggest care home operators - and also launched a new campaign for Help theAged Funeral plans. Growth came from both existing and new business, and targets for the year wereexceeded. Ten Alps RMA continued to produce work for clients extending right across theadvertising spectrum. For Ocean Village, part of P&O, the Agency continued its work in promoting thealternative cruise brand and has just produced the Company's 2005/6 brochure. In2004, Ocean Village was voted Winner in the British Travel Awards, confirmingthe ongoing success of RMA's creative strategy. On behalf of Sunsail, part ofFirst Choice, RMA has helped develop both the brand and its products, andcontinues to produce all Sunsail's key worldwide holiday brochures. The Agency has just completed a DRTV commercial for world-leading stairliftcompany, Stannah, which has continued to increase its spend throughout the year.RMA also produced a set of programme sponsorship bumpers to support a newnational children's TV series, sponsored by the British Marine Federation. New business wins included Crown Blue Line, Europe's leading inland waterwaysholiday company, and C-Map, an Italian-based cartography company. Finance Director's Statement Trading Analysis Group turnover grew by 107.7% to £34.75m (2004: £16.73m) with acquisitionscontributing £1.44m. Gross profit increased by 46.44% to £7.00m (2004: £4.78m). Gross margin has fallen from 28.55% in 2004 to 20.1% in 2005, reflecting thelower margins of Teachers' TV and the EXPO UK Pavilion in Japan and a change inthe product mix. However, administrative expenses continue to be controlled andrepresent 16.9% of turnover (2004: 25.48%). The Group's EBITDA has increased by 105.7% to £1.46m (2004: £712,000) reflectingimproved conditions in the Events Sector and the impact of Teachers' TV. Theprofit before tax (PBT) was £628,000 (2004: £126,000) reflecting a goodwillamortisation charge of £569,000 (2004: £437,000) for the year. The basic earnings per share (EPS) increased from 0.34p in 2004 to 0.52p in 2005with a fully diluted EPS of 0.51p (2004:0.34p). The basic EPS beforegoodwill amortisation is 1.81p in 2005 compared to 1.33p in 2004. Group Balance Sheet Shareholders funds have increased from £6.77m to £7.04m, reflecting the resultsfor the year. The profit and loss account now shows a surplus of £190,000 (2004:£(42,000)). The long-term debt at the year-end reflects loans from the European Union fordevelopment of programmes of £276,000 (2004: £268,000) finance leases of £16,000(2004: £40,000) and a deferred accrual in relation to fixed assets purchased byEducational Digital Limited of £445,000 (2004: £Nil). Share Price The mid-market share price of the Group has fluctuated between 28p and 56pduring the year. At the year end the mid-market closing price was 49p, givingthe Group a market capitalisation of £21.7m. Net Assets as at 31 March 2005 were£7.18m, of which £7.52m was held in cash (including £1.89m (2004: £224,000) heldin Teachers' TV). Ten Alps Communications plcConsolidated Profit and Loss AccountFor the year ended 31 March 2005 Notes 2005 2004 £'000 £'000 Turnover - continuing operations 33,317 16,732-acquisitions 1,436 - ------- ------- 34,753 16,732 Cost of sales (27,755) (11,955) ------- ------- Gross profit 6,998 4,777 Administrative expenses (5,862) (4,264)Amortisation of goodwill (569) (437) ------- -------Operating profit - continuing operations 553 76-acquisitions 14 - ------- ------- Profit on ordinary activities before 567 76interest Net interest receivable 60 50 ------- ------- Profit on ordinary activitiesbefore tax 627 126 Taxation (252) 24 Minority Interest (143) (1) ------- -------Retained profit for the year 232 149 ======= ======= Basic earnings per share 2 0.52 0.34 ======= ======= Diluted earnings per share 2 0.51 0.34 ======= ======= Basic earnings per share before goodwill 2 1.81 1.33amortisation ======= ======= A statement of total recognised gains and losses is not included as there are norecognised gains or losses other than those disclosed above. Ten Alps Communications plcConsolidated Balance SheetAs at 31 March 2005 31 March 2005 31 March 2004 £'000 £'000 Fixed AssetsIntangible assets 3,658 3,640Tangible assets 1,279 499 ---------- ---------- 4,937 4,139 Current assetsWork in progress 244 136Debtors 7,233 2,683Bank 7,522 3,971 -------- -------- 14,999 6,790 CreditorsAmounts falling due (12,015) (3,849)within one year -------- -------- Net current assets 2,984 2,941 ---------- ---------- Total assets less 7,921 7,080current liabilities CreditorsAmounts falling due (737) (308)after one year ---------- ---------- Net assets 7,184 6,772 ---------- ---------- Capital and reservesCalled up share 887 883capitalShare premium account 3,030 2,999Merger reserve 2,930 2,930Other reserve 2 -Profit and loss 190 (42)account ---------- ----------Equity shareholders' 7,039 6,770funds Equity minority 145 2interest ---------- ---------- 7,184 6,772 ---------- ---------- Ten Alps Communications plcConsolidated Cash Flow StatementFor the year ended 31 March 2005 2005 2004 £'000 £'000 Net cash inflow from operating activities 5,338 651 Return on investments and servicing of finance 60 50 Taxation (151) (65) Capital expenditure and financial investment (1,027) (101) Acquisitions and disposals (518) 65 ------- -------Net cash inflow before financing 3,702 600 Financing ------- -------- issue of ordinary share capital 35 -- capital element of finance lease rentals (52) (6)- media loans repaid (134) 38 ------- ------- Net cash (outflow)/inflow from financing (151) 32 ------- -------Increase in cash 3,551 632 ======= ======= Reconciliation of net cash flowmovement to movement in net debt Increase in cash in the period 3,551 632Cash outflow from decrease in debt and lease 52 6financing ------- -------Change in net debt resulting from cash flows 3,603 638Finance leases - -Loans acquired with subsidiaries - -Movements in loans 134 (38)Exchange adjustments (8) 11 ------- ------- 3,729 611 Net funds at 1 April 2004 3,402 2,791 ------- -------Net funds at 31 March 2005 7,131 3,402 ======= ======= Notes 1. No final dividend is being proposed 2. Earnings per share The calculation of the basic earnings per share is based on the earningsattributable to ordinary shareholders of £232,000 (2004 - £149,000) and on44,206,464 shares (2004 - 44,172,080 shares), being the weighted average numberof ordinary shares in issue during the year. The calculation of the diluted earnings per share is based on the earningsattributable to ordinary shareholders of £232,000 (2004 - £149,000) and on45,150,856 shares (2004 - 44,172,080 shares) being the weighted average numberof ordinary shares in issue, assuming the exercise of all outstanding optionsduring the year. The adjusted basic earnings per share have been provided in order that theeffects of goodwill amortisation on reported earnings can be fully appreciated.This is based on earnings calculated as follows: 2005 2004 £'000 £'000 Retained profit for the year 232 149 Goodwill amortisation 569 437 -------- --------Profit before goodwill amortisation 801 586 ======== ======== The calculation is also based on 44,206,464 shares (2004 - 44,172,080 shares)being the weighted average number of ordinary shares in issue during the year. 3. The financial information relating to the year ended 31 March 2005 set outabove does not constitute the Company's statutory accounts for that year, buthas 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 2004,has been extracted from the 2004 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 2005 will be sent toshareholders as soon as is practicable. Copies of this announcement areavailable at the Company's head office at 10 Blue Lion Place, 237 Long LaneLondon SE1 4PU and copies of the Annual Report and Accounts for 2005 will alsobe available on request. This information is provided by RNS The company news service from the London Stock Exchange