Zinc Media Regulatory News (ZIN)

30 June 2014

Ten Alps Plc

Unaudited Interim Results

Ten Alps Plc ("Ten Alps" or the "Group"), producer of high quality TV and radio together with integrated publishing and communications content, today announces its half year results for the six months to 31 March 2014. As announced on 1 April 2014, the Group has changed the year end to 30 June and a full 15 month statement will be announced later in the year.

The key focus going forward continues to be the return to Group profitability, with particular emphasis on quality and delivery of products and services within the Group's divisions.

Highlights for the period include:

Performance

· Group revenues of £12.43m (2013: £14.17m)

· Adjusted EBITDA loss of £(0.64)m (2013: £(1.98)m)

· Reorganisation and restructuring costs of £0.04m (2013: £0.34m)

· Amortisation charge of £0.1m (2013: £3.69m)

· Operating Losses of £(0.85)m (2013: £(6.11)m)

· Loss for the period after tax £(1.09)m (2013: £(6.06)m)

· Diluted loss per share (0.39)p (2013: (2.58)p)

· Total Assets £17.58m (2013: £17.24m)

· Net Debt of £6.37m* (2013: £6.08m) with facilities maturing in 2016

* £986k is secured on a specific long term production of which 50% has already been delivered to the Broadcaster

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BUSINESS REVIEW

Quality, Delivery, Diversity and Digital

The Group is now structured in a streamlined entity of two core divisions namely Broadcasting and Integrated Services. With this simpler and more effective Group structure, together with a leaner senior management team (the "Management"), the Group can deliver on its stated goals of quality, delivery, diverse and digital services.

The Management intends to manage these goals through key performance indicators ("KPIs") which have been designed to focus not just on short term profitability but on quality, reputation enhancement and long term growth.

Although we are still not profitable, the Management believe we are on the right track. Our ability to do so has been strengthened by the actions taken in the last few years. To that end, although our focus has changed, our KPIs have fundamentally not altered. We are therefore setting similar KPIs for the coming year with clear emphasis on:

· creative and digital content and products

· cash generation

· core market growth

· enhanced overall performance and

· investment opportunities

These KPIs should enable us to continue to address the interests of the various stakeholders of the Group.

Business Overview and Highlights

The Group has continued to rationalise its fixed overhead and further reduced this cost across the Publishing division with the integration of 2 business units in London during the period.

As stated about the Group continues to focus on quality revenues with higher margins and the highlights illustrated below emphasis these key KPIs:Ten Alps Broadcasting

· Broadcasting Division's award highlights include: Blakeway North achieving 6 nominations in the RTS North West Awards. Films of Record "Iceland: Life in the Freezer Cabinet" makes a star of CEO Malcolm Walker and the series trends on twitter during transmission on BBC2. Blakeway's Plebgate film for C4 ` Police, Lies and Videotape' wins Independent of the Year for Blakeway at the RTS journalism awards

· In terms of production the division produced their first commission for C4 Music with "F**K Me" a documentary on the influence of folk on modern music. Blakeway North's "My Baggy Body" gets 2.5m viewers at 10pm, the highest ever audience for the C4 "First Cut" strand. "Hunted" an hour long special for C4 Dispatches about homophobia in Russia transmitted to coincide with the start of the Sochi Winter Olympics. The programme will be shown on HBO in the US in the autumn. And a third series of Great Ormond Street hospital from Films of Record moves into production for the BBC2.

Ten Alps Integrated ServicesTen Alps Publishing

· The Key highlights include the continued development of Market sector focus. The Business portfolio has been extended to include the magazines CEO, Director of Finance, SME, Business Today, In Business Midlands and Facilities Manger creating an impressive and vibrant portfolio. Each magazine is supported by a web site and digital newsletters. The first digital only issue of SME was successfully launched this month and the portfolio is extending its professional business data to increase targeted digital publications, direct mail and other data services

· Contract Publishing unit has also won recently the contract to launch the Euro Parts magazine, which will have a national distribution

Ten Alps Communicate

· New private sector clients for the Communicate Agency in the period were Reckitt Benckiser, Sellafield and NAPP Pharma

· Awards for the Agency included Best Health and Safety Communication sponsored by The Communication Director's Forum Bronze: Wise up to STI's , Best Direction sponsored by A VisionSilver: Wise up to STI's, Best Use of Music sponsored by MerchantCantos Highly Commended: Wise up to STI's all forSanofi Pasteur MSD

FINANCIAL REVIEW

Revenue from continuing operations was down 13.28% to £12.43m (2013: £14.17m) however gross profit increased by 14.49% to £3.95m (2013: £3.47m). The main variance in revenues came in the integrated marketing division which saw revenues decrease by 19.73% equal to £1.95m year on year.

Gross margin increased from 24.54% to 31.8% in the period, with operating expenses representing 36.99% of revenues (2013: 38.4%). This is a consequence of significant restructuring undertaken by the Group over the last three years and the aim is to have that below 30% by 2015. The charge for reorganisation and restructuring was £0.04m (2013: £0.39m). The reduced charge reflects the Group's previous statement that significant planned reorganisations and restructures have now been implemented.

Adjusted EBITDA or headline profit, a key performance indicator used by the board, was a loss of £0.64m (2013: loss of £1.97m). Operating loss improved to £0.85m (2013: loss of £6.11m) after an amortisation charge of £0.1m (2013: £3.69m).

As the Group made losses for the period end to 31 March there was no corporation tax charge in the period. However, the Group reflected a movement in the deferred tax asset by incurring a credit for the period of £0.01m (2013: £0.2m). The loss for the period was £1.09m (2013: £6.06m).

Earnings per share

Basic and diluted loss per share from continuing operations in the year was 0.39p (2013: loss 2.58p) and was calculated on the losses for the year attributable to Ten Alps shareholders of £0.95m (2013: loss £2.176m) divided by the weighted average number of shares in issue during the year being 276,666,012 (2013: 234,738,814).

Effectively all share options at 31 March 2014 were 'not in the money' and, therefore, deemed non- dilutive.

Statement of Financial Position

Assets

Inventories and trade receivables have decreased by £0.52m to £5.33m (2013: £5.85m) reflecting the impact of a reduction in revenue. Other receivables have increased to £1.38m (2013: £0.78m) reflecting an increase in accrued income in the period.

The Group had a cash balance of £2.99m as at 31 March 2014 (2013: £2.56m). The balance is marginally higher than last year, reflecting the favourable movement in working capital in the period of £0.03m (2013: £(0.4)m) and increase in gross debt from £8.65m to £9.36m. Net debt at the period end was £6.37m (2013: £6.08m)

Total assets for the Group were £17.58m (2012: £17.24m) with the main movements being working capital assets in the period.

Equity and Liabilities

Retained losses as at 31 March 2014 were £21.9m (2013: losses: £20.81m) and total shareholders' equity at that date was £(0.44)m (2013: £0.65m).

The Group has been given a commitment to call upon an unsecured loan note of up to £0.35m for business development and general working capital requirements. If called upon, the Group will issue the said loan notes to certain existing shareholders.

The Group had an outstanding long term debt of £8.37m (2013: £8.26m). The borrowings are split into three categories. The unsecured debt facility of £4.36m (2013: £4.34m), secured loan notes of £2.60m (2013: £2.52m) and unsecured loan notes of £1.41m (2013: £1.37m). The debt facility is due in February 2016 and the loan notes in March 2016 with no mandatory repayments on either of these amounts until the due dates.

Current liabilities consisting of trade and other creditors have increased by £0.72m to £8.66m (2013: £7.94m). Deferred income of £2.03m (2013: £2.54m) has decreased due to disposals in the comparative period. The Group has a production finance loan of £0.99m (2013: £0.42m) relating to a specific long term production and is secured on the assets of that production alone.

Cash flows

During the period the Group generated £0.04m (2013: used £0.41m) from day to day operations. After accounting for finance costs and investing activities the Group expended cash of £0.14m (2013: £0.46m). Following an increase in borrowings of £0.56m (2013: £1.08m) the net movement in the period was an increase in cash of £0.42m (2013: £0.62m).

Peter Bertram- Chairman

Condensed consolidated interim income statement

Condensed consolidated statement of financial position

Condensed consolidated statement of changes in equity

Notes to the consolidated financial statements

1) GENERAL INFORMATION

The condensed interim Financial Statements for the six months ended 31 March 2014 were authorised for issue in accordance with a resolution of the Board of Directors on 30 June 2014.

The Company is a public limited company incorporated in the United Kingdom. The address of its registered office is7 Exchange Crescent, Conference Square, Edinburgh, EH3 8AN.

The Company is listed on the London Stock Exchange's Alternative Investment Market.

These extracts do not comprise statutory accounts within the meaning of Section 235 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2013 were approved by the Board of Directors on 20 June 2012 which received an unqualified auditors' report and have been delivered to the delivered to the Registrar of Companies. The financial information contained in this report is unaudited.

2) BASIS OF PREPARATION

These condensed consolidated interim financial statements (the interim financial statements) have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 March 2013.

3) ACCOUNTING POLICIES

The accounting policies applied in these condensed interim Financial Statements are consistent with those of the annual Financial Statements for the year ended 31 March 2013, as described in the annual Financial Statements.

4) SEGMENTAL INFORMATION

The operations of the group are managed in two principle business divisions, Broadcast and Integrated Marketing Services. The Integrated Marketing Services division is made up of publishing and communications agency (formerly CSR) units. These divisions are the basis upon which the management reports its primary segment information.

5) DISCONTINUED OPERATIONS

There were no disposals during the six month period to 31 March 2014.

During the six-month period ended 30 September 2013, the Agencies cash generating unit in Publishing was disposed of.

During the year ended 31 March 2013, two cash generating units were disposed of: Ten Alps Communications Asia unit (consisting of the following legal entities: Ten Alps Asia Holdings Pte Limited and Ten Alps Communications Asia Pte Limited) in the Publishing unit and Below the Radar Limited in the TV division. The Edinburgh office was closed as part of the ongoing Publishing units overall Group restructuring:

Analysis of the result of the discontinued operations is as follows:

6) EARNINGS PER SHARE

7) SHARE CAPITAL

ENDS