GBP1.4m SKY channel swap

20 Mar 2008 07:01

Cellcast plc20 March 2008 Cellcast receives £1.4 million in SKY channel swap Funding requirements significantly reduced as SUMO focuses on worldwide B2B opportunities Highlights • Cellcast to receive £1.4 million in an arrangement to swap channel locations on the SKY Digital satellite television platform • Cellcast's SUMO service will move from Channel 144 to another channel in the SKY general entertainment section • Successful vertical branding via internet, mobile and TV means SUMO is now considerably less dependent on its SKY EPG position • SUMO's burn rate significantly reduced as it moves to phase 2 with a focus on worldwide B2B opportunities • Cellcast's core business continues to do well in a challenging consumer environment with new growth driven by expanded distribution on the internet and 3G mobile networks Cellcast plc (AIM: CLTV), the global interactive digital broadcaster, todayannounced that it has agreed an exchange of its two channels on the Sky Digitalplatform (one of which was surplus to requirements) for one channel and a cashconsideration of £1.4 million. The net book value of the two channels being exchanged was £304,936. The net proceeds of £1.4 million from the transaction will be used to providegeneral working capital and to repay the £500,000 outstanding under the existingfacility provided by Headstart. The Company has entered into an agreement withHeadstart to repay the amount outstanding under the Headstart facility in fullbefore December 2008. During this period Headstart has agreed to waive itsrights of conversion subject to the repayments being made. The Company considersthat this is the best use of the net proceeds, maintaining operationalflexibility while removing the potential equity dilution. Trading Update Cellcast's core business continues to do well in a challenging consumerenvironment. Significant benefits are flowing back from the investment incontent and technology for SUMO, particularly in regard to Cellcast's coreparticipation TV applications and formats, enabling the company to develop newrevenue streams from the internet and from 3G mobile services. Interactive 3G mobile video products operated by Cellcast saw a 400% increaseover the last twelve months. This is attributed to growing 3G handsetpenetration and increased familiarity with video calling in general and the easeof use of 3G video calling services. 2008 has also seen the integration of 3Gvideo calling products with Cellcast's portfolio of TV channels and websites,offering yet another level of interaction to existing formats. A fullyintegrated interactive online and mobile chat and messaging platform,incorporating video calling between online webcam users with 3G video callers,is the most recent addition to a growing suite of products. The Company's 3G traffic and revenue has more than doubled since October 2007.In February 2008, this amounted to over £35,000 per month and is growing at anaverage of 25% month on month. The Company's venture with Canaan Partners, Cellcast Asia Holdings, isprogressing well and has recently expanded its national distribution and billingcoverage by securing agreements with BSNL and Tata Telecom. It continues to bethe leading supplier of participation TV formats and applications in marketsacross India, and new broadcast clients include Zoom (a subsidiary of The Timesof India) and leading Bollywood music channel B4U. In February 2008, CellcastAsia reached profitability at a gross margin level. SUMO.tv SUMO.tv is a media network that seamlessly integrates user-generated content(UGC) into television programming, internet and mobile services, using itsproprietary technical services architecture. The Company is satisfied it is nowvery much less dependent on its position on SKY's Electronic Programme Guide(EPG) to sustain and build its user base. The Company anticipates that future operating and development costs of SUMO.tvwill be significantly reduced with the successful completion of the first phaseof the Company's development strategy for the venture. Following the launch andoperation of SUMO.tv in the UK market, the Company is now engaged in licensingthe multiplatform technology, aggregated content and formats to broadcasters anddistributors worldwide. SUMO has commenced international distribution on the European IPTV platformZattoo, and has also recently secured distribution on the Vingo.tv platformwhich has an audience base in over 100 countries. SUMO continues to expand itsonline distribution through third-party websites, with content live on YouTubeand a recently signed agreement with social networking site Bebo. Last week,Sumo commenced broadcasting a range of programmes on Joost and signed anagreement with leading video search engine Blinkx.com. Mobile distribution remains a lynchpin of SUMO.tv's international multiplatformdistribution strategy and in January 2008 the Company announced new agreementsfor distribution on the Orange mobile networks in France and Israel, andconfirms ongoing discussions in other markets, including Australia, Malaysia andSouth Africa. Enhancement of the proprietary technology behind the SUMO platform continues. Akey recent development is "Sumo TeleConferencing", which enables viewers to usenormal webcams (or 3G phones) to interact live with a television host and witheach other. The Company believes there is a considerable number of applicationsfor this technology across a range of proprietary formats, and sees it as agroundbreaking creative opportunity for partners and clients in the broadcastindustry. - Ends - For further information: Cellcast plcAndrew Wilson, CEO Tel: +44 (0) 20 7190 0300andrew@cellcast.tv www.cellcast.tv Media enquiries:Threadneedle CommunicationsGraham Herring / Josh Royston Tel: +44 (0) 20 7936 9605 HB CorporateImran Ahmad/Edward Hutton Tel: +44 (0) 20 7510 8600 About Cellcast plc Cellcast plc (AIM: CLTV) is a leading international provider of participationtelevision applications and interactive mobile content in the fast-growingmulti-platform digital entertainment sector. Headquartered in London, withassociated operations in Paris, Beirut, Mumbai, Hong Kong and Sao Paolo,Cellcast's applications and programming are distributed on the Sky Digital andFreeview platforms in the UK, and the company is partnered with broadcasters andtelecom networks in Europe, the Middle East, India, South-East Asia, China, andSouth America. Cellcast plc joined the AIM market of the London Stock Exchangein 2005. This information is provided by RNS The company news service from the London Stock Exchange