Half Yearly Report


 

TIDMCOO 
 
RNS Number : 3132T 
Coolabi PLC 
27 September 2010 
 

Coolabi plc 
                          ('Coolabi' or 'the Company') 
 
              Interim results for the six months ended 30 June 2010 
              TV revenues expected to deliver strong growth in H2 
 
Coolabi plc (AIM: COO), the media company focused on the ownership and 
creative management of high quality intellectual property assets, announces 
unaudited interim results for the six months ended 30 June 2010. 
 
The Company remains confident that it is on course to deliver EBITDA growth for 
the year in line with market expectations and, in line with historic guidance 
provided by the Company, the current financial year will have a strong second 
half weighting. This is largely due to the recognition of contracted TV 
production revenues, which in 2009 were more evenly spread throughout the year. 
No TV production revenue was recognised in the first six months of the current 
financial year. 
 
Financial Highlights 
·        Revenue of GBP0.96m (H1 09: GBP1.37m) - Principally from Licensing & 
Merchandising activity. 
·        EBITDA of GBP0.02m (H1 09: GBP0.30m). 
·        Net Debt of GBP0.73m (30 June 2009: GBP1.07m). 
 
Operational Highlights 
·        Poppy Cat - TV production underway. Pre-sales to seven broadcasters. 
Delivery expected in H2 with Licensing and Merchandising programme to commence 
in Q4. 
·        Scarlett & Crimson- UK cosmetics and accessories deals with Boots and 
Superdrug, new cosmetics partner in the US and extension of the brand through 
clothing and perfume deals in the UK. 
·        Purple Ronnie- 20% year-on-year increase in book sales for Valentine's 
Day 2010 with four titles in the top ten of the Sunday Times Best Seller list. 
Purple Ronnie iPhone app also launched in US. 
·        Bagpuss, Clangers & Ivor the Engine - Launched on iTunes, immediately 
becoming three of the top five kids shows available for download. 
·        Management strengthened by appointment of Zoë Scurfield, ex-Disney, as 
Head of Development & Production and Anna Hewitt, ex-BBC, as Head of Licensing. 
 
Chairman of Coolabi, William Harris, said: 
"We firmly believe that the exciting assets we have in our portfolio will 
deliver attractive organic growth to the group. We also expect to pursue growth 
through acquisition, with this remaining a core motivation for the group for the 
foreseeable future. As a result of the timing of this year's television 
production activity we expect the second half of the year to be considerably 
stronger than the first. We remain confident in the trading outlook for the 
Company and are on course to meet expectations for the full year." 
 
Enquiries: 
 
+------------------------+---------------------------------------------+ 
| Coolabi plc            | Tel: 020 7004 0980                          | 
+------------------------+---------------------------------------------+ 
| Jeremy Banks, Chief    |                                             | 
| Executive              |                                             | 
+------------------------+---------------------------------------------+ 
| Tim Ricketts, Finance  |                                             | 
| Director               |                                             | 
+------------------------+---------------------------------------------+ 
|                        |                                             | 
+------------------------+---------------------------------------------+ 
| Evolution Securities   | Tel: 020 7071 4300                          | 
+------------------------+---------------------------------------------+ 
| Bobbie Hilliam / Chris |                                             | 
| Clarke                 |                                             | 
+------------------------+---------------------------------------------+ 
|                        |                                             | 
+------------------------+---------------------------------------------+ 
| Walbrook PR Ltd        | Tel: 020 7933 8780                          | 
+------------------------+---------------------------------------------+ 
| Paul McManus           | Mob: 07980 541 893 or                       | 
|                        | paul.mcmanus@walbrookpr.com                 | 
+------------------------+---------------------------------------------+ 
Chairman's Statement 
 
I am pleased to present the Company's unaudited interim results for the six 
months to 30 June 2010 and to report on progress since the time of our 
preliminary results announcement in March this year. 
 
The first half of 2010 has seen a period of intense activity across our 
portfolio, delivering good progress from both our established and our 
high-growth brands as well as our operating divisions.  It is worth noting that 
the positive EBITDA has been delivered despite prevailing market conditions, 
once again demonstrating the quality of our brands and the hard work and 
dedication of our team.  In addition, central costs within the business remain 
tightly controlled. 
 
As expected, and as a result of the timing of this year's television production 
activity (with delivery commencing in the fourth quarter of the year), this is 
lower than the comparative six month period in 2009.  We have previously 
indicated that we expected the second half of the year to be considerably 
stronger than the first and we are on course to meet expectations for the full 
year. 
 
Strategy 
 
Our strategy is to build a diversified portfolio of cash-generative intellectual 
property ("IP") assets, through the development of our own properties and the 
acquisition of others, that have international appeal across a broad range of 
media platforms.   Our current portfolio of IP assets is diversified in terms of 
both genre and medium of exploitation.  There is also a good mix of established 
properties, those in their infancy and others in development. 
 
Our focus, therefore, is to enhance the underlying value of each property whilst 
at the same time delivering improved revenues from them. 
 
Operational Review 
 
Highlights from the development of our portfolio in the first half can be 
summarised as follows: 
 
(i)           Poppy Cat 
 
As announced in July, production is now well underway to bring the much-loved 
children's literary character Poppy Cat to television screens internationally. 
Commissioned by and due to air on Nick Jr (UK) in 2011, the 52 episode series is 
being co-produced by our television production arm, Coolabi Productions, and our 
animation partner King Rollo Films.  International pre-sales of the series have 
also been confirmed with Nick Jr Australia, RTE Ireland, YLE Finland, TV2 
Norway, and TVO, SCN and Knowledge Network in Canada and Cake Entertainment has 
been appointed as our distribution partner for the series.  With Coolabi's 
production, broadcast and distribution partners now contracted, a substantial 
proportion of the production budget has been covered by third parties. 
 
Early episodes are now being shared with existing and potential key partners and 
the response to them thus far has been extremely positive.  With delivery of the 
series commencing in the fourth quarter of 2010, licensing and merchandising 
activity is now starting to ramp up. 
 
Coolabi does not recognise film and television income of this sort until 
delivery occurs, hence the second half skew in our financial statements this 
financial year. 
 
(ii)          Scarlett & Crimson 
 
Scarlett & Crimson, our jointly owned tween/teen girl property is having an 
exciting year. 
 
In the UK, the new everyday cosmetics and accessories ranges launched in the 
spring in Superdrug in over 450 and 250 stores respectively and sales to date 
have been good.  Importantly, the PR secured as a result of this activity has 
been impressive, with coverage in Cosmopolitan, Glamour and The Times Magazine, 
amongst many others. 
 
Our first Scarlett & Crimson cosmetics range, in association with Ruby & Millie, 
went into over 300 Boots stores in the UK in Autumn 2009, positioned as a first 
teen cosmetics line and aimed at the Christmas gift market.  The first range was 
a strong success and, as announced in July, Boots has reordered for 2010 with an 
all new expanded product range of nine items, from six previously, with the 
number of stores increased by 20% from 2009.  The new product will be in-store 
from the end of this month. 
 
This progress is providing added momentum to the expansion of the licensing 
programme in the UK and we have been pleased to announce a number of other 
strong licensees, including Poetic Gem (clothing) and Myridium (perfume).  We 
have additionally agreed an extension of the existing UK agreement with beauty 
industry luminaries Ruby Hammer and Millie Kendall to cover all product 
development of Scarlett & Crimson beauty products undertaken globally. 
 
Importantly, the successful roll-out of the property has not been limited to the 
UK.  In the US, new product development is underway with Japonesque, our 
recently appointed cosmetics partner in that territory, with product lines ready 
for presentation to retail from the end of this month. 
 
I look forward to announcing a number of new initiatives for Scarlett & Crimson 
in accordance with our Key Performance Indicators during the second half of the 
year. 
 
(iii)         Purple Ronnie 
 
Income from our wholly owned property Purple Ronnie through greetings cards (via 
Hallmark) and publishing (via Macmillan) continues to be an important source of 
cashflow for the group.  In the period, Purple Ronnie was once again a star 
performer. Macmillan reported a 20% year-on-year increase in sales for 
Valentine's Day 2010 with four titles making it into the top ten of the Sunday 
Times Best Seller list.  In greetings cards, Hallmark launched its enhanced 
online Print-on-Demand service and we were pleased to see Purple Ronnie feature 
strongly in its promotion. 
 
As set out previously, related licensing and merchandising initiatives are a
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