RNS Number:6282L
Maverick Entertainment Group PLC
28 April 2005
For immediate release: Thursday 28 April 2005
Maverick Entertainment Group PLC ("Maverick" or "the Company")
Preliminary Results for the year ended 31 December 2004
Maverick Entertainment Group PLC ("Maverick" or "the Company"), the AIM listed
company specialising in the creation, acquisition and development of IPR in
children's films, television programmes, characters and related entertainment
products, today announces its preliminary results for the year ended 31 December
2004.
Summary of the results
* Turnover for the year amounted to #156,000 (2003: #256,000).
* Loss before tax of #2,742,000 (2003: loss #903,000) reflecting an
adjustment to the carrying value of Snailsbury Tales and continuing poor
trading conditions during the year.
* Muffin the Mule continues to go from strength to strength with the first
26 episodes to be delivered to the BBC at the end of July, for broadcast in
September to coincide with the 60th anniversary of Muffin the Mule.
* Strategic relationships established during 2004 and 2005 with:
Peak Entertainment which will bring synergies to both businesses and will
also help drive the distribution of the Muffin the Mule animation globally
and will assist in securing better terms for the sale of merchandise
licences.
Lace Group - a DVD sales and distribution agreement which has already
resulted in sales of DVDs in the first quarter of the financial year
exceeding those of the first half of last year with an increased depth of
distribution in high street stores.
Character Group - major toy licence agreement. Initial launch range will
include a wooden puppet Muffin the Mule with caravan toy set and an
interactive plush toy.
Outlook
* Key partners in place adding an extra dimension to the business
* Stronger retail presence in our core UK market
* Launch of Muffin the Mule in September 2005
Mike Diprose, Chief Executive, commented: "Maverick has come through a
challenging period of evolution and I am looking forward to taking the Company
to the next stage. We are now well positioned to take advantage of new
technologies and benefit from the seemingly insatiable appetite for popular
children's characters and TV series. The Company controls the distribution of
its key brands with experienced industry partners.
Maverick will continue its policy of identifying and purchasing undervalued
brands, as well as developing, producing and commercially exploiting
intellectual properties.
I believe the Company is a re-energised and re-focussed business and am
confident it will achieve its objectives for 2005, and return to profit during
the year."
For further information please contact
Maverick Entertainment Tavistock Communications
Mike Diprose/ Sookra Raveendran Lulu Bridges/Paul Dulieu
Tel: 01844 260858 Tel: 020 7920 3150
Email: info@maverickentertainment.co.uk Email: ;lbridges@tavistock.co.uk
Preliminary results for the year ended 31 December 2004
Chairman's Statement
Overview
The last 18 months have proved to be a period of transition for the Company. The
key markets in which it operates have changed considerably due to both economic
factors and technological advancements. The Board's focus has been on developing
external partnerships and building an in-house sales and marketing capability.
There have been no significant new acquisitions during the last six months,
however there have been recent developments with existing intellectual property
rights that will prove revenue enhancing for 2005, as noted in the Chief
Executive's report.
The financial results for the year ended 31 December 2004 reflect the Board's
focus on change and the poor trading environment. The Board has also taken the
opportunity to review the balance sheet and adjust the carrying values of some
of its intellectual property rights, most notably the investment in Snailsbury
Tales. Whilst this makes the figures for 2004 disappointing, the Board believes
this is a prudent approach, which will help maximise the potential of the
Company in future years.
Financial Performance
Turnover for the year ended 31 December 2004 declined to #156,000 (2003:
#256,000). This resulted in a loss before tax of #2,742,000 (2003 loss
#903,000). Loss per share for the year was 0.089p compared to a loss per share
of 0.042p in 2003. The increased loss is due to the decision to adjust the
carrying value of Snailsbury Tales, which resulted in a #2,006,000 reduction in
value and increased loss.
Company Objectives
The main objective for 2005 is for the Company to return to profitability by
utilising its main programming assets. A key to this will be the launch of
Muffin the Mule on BBC TV in September 2005.
The Company also intends to develop overseas TV sales for Muffin the Mule and
Snailsbury Tales and has brought that function in-house by recruiting
J.J.Breijinck, a well respected industry professional who commenced work for the
Company at the recent MIPTV trade show.
Over the last 18 months, the Company has invested significantly in new
publishing rights and the intention is to start exploiting these rights fully
this year.
Finally, the Company intends seeking new intellectual property rights for
development and co-production for delivery in 2006/2007.
Outlook
Despite the demanding environment over the last 18 months, the Directors believe
that the Company is well positioned to progress to the next level. We now have
the structure and management in place in order to achieve the key objectives set
for 2005.
Our strategy is clear and, with the right personnel in place and key
relationships working, we are confident of a successful year ahead.
Chief Executive's Review and Trading Update.
Key Relationships
In addition to the announcement on 21 March 2005 of our strategic relationship
with Peak Entertainment ("Peak"), I am also pleased to announce a key DVD sales
and distribution agreement with Lace Group Limited that has recently taken
effect. Lace Group is the leading independent DVD distributor in the UK. This
agreement will allow the Company to take advantage of Lace Group's relationships
with key retailers, further strengthening our channels to market. In the past,
Lace Group has been responsible for major hits on DVD such as the Rugby World
Cup 2003 and the recent number one fitness title Pump It Up. Lace Group is also
responsible for sales and distribution of the Time Life catalogue and Channel
Four's new video label, 4DVD.
Maverick continues to develop its relationship with Blue Fish Cartoons, the
animators of Muffin the Mule and Snailsbury Tales and there are now three series
at an early stage of development; James and the Space Dog, Panto and Crabbie
Bill. Panto is a pre school product while Crabbie Bill and James and the Space
Dog are both aimed at the 5 to 10 year old market.
In-house, we continue to focus on marketing our key brands, in particular Muffin
the Mule, Snailsbury Tales and Bananas in Pyjamas. We have also brought the TV
sales function under our control with the appointment of J.J.Breijinck who
started his sales campaign for Muffin the Mule and Snailsbury Tales at the
recent MIPTV trade show.
DVD Publishing
Maverick has developed some excellent new concepts during 2004, but
disappointingly did not get retail support for these for most of the year. The
same situation occurred with many of the new releases. I am pleased to report
however that as a result of our new agreement with Lace Group, this situation
has improved considerably. For the first time the Company has achieved depth of
distribution in high street stores and sales in the first quarter of 2005 have
already exceeded the first six months of 2004. Particular highlights include
Fairly Odd Parents, which will be available in Woolworth's and Sainsburys in
April 2005 to coincide with a Burger King Promotion. Fairly Odd Parents was the
ninth most viewed children's programme in 2003 and the second most viewed
children's programme in 2004 (source: BARB). Sales of new release DVDs will
commence in April 2005 when the Moomins will be available on DVD for the first
time. Muffin the Mule (original) will make a return to DVD later in the year as
well as Dorling Kindersley's The Way Things Work. More releases of Fairly Odd
Parents, 64 Zoo Lane, Hilltop Hospital and others should ensure a successful
year for the Company's DVD business.
Book Publishing
2004 was the Company's first full year as a book publisher. Releases include
eight Snailsbury Tales books and two Bananas in Pyjamas activity books. The
Bananas in Pyjamas books sell particularly well at the venues for the live show.
2005 will see the Company launching an official Muffin the Mule 60th Anniversary
Annual in September and four TV books to tie in with the launch of Muffin the
Mule on Cbeebies.
Snailsbury Tales
Snailsbury Tales generated only limited revenue in 2004 from book and DVD sales.
International TV sales were made to Hop TV in Israel, Czech TV, RTV Slovenia,
Intermedia in the Middle East and Viziontrade in Albania. Maverick formally
attended MIPTV for the first time this year. It is expected that the renewed
focus by the Company on international TV sales will have some effect in 2005.
Snailsbury Tales will also be re-launched as a giftware range later in 2005
through the Company's alliance with Peak Entertainment and the series will be
back on Cbeebies in July 2005.
Bananas in Pyjamas
Bananas in Pyjamas continued to succeed in 2004 principally through the touring
live show. That show will continue throughout 2005 at a total of 95 venues,
including 45 appearances at Haven Holiday Camps during the summer holiday
period.
Muffin the Mule
Muffin the Mule continues to go from strength to strength, courting much press
attention and trade interest. The first 26 episodes will be delivered to the BBC
at the end of July. The remaining 14 episodes should commence production in
Autumn 2005. The strategic relationship with Peak Entertainment announced
earlier in the year has resulted in the first major deal being signed for Muffin
the Mule merchandise. We are pleased to announce a major Toy Licence agreement
with Character Options UK Limited a highly respected UK toy company and part of
the Character Group. Responsible for the 2004 Toy of the Year, Robosapian,
Character Group's toy portfolio also includes the New Dr Who and Little Britain.
The initial launch range will include a wooden puppet, Muffin the Mule and
caravan play set, and an interactive plush toy. The launch of new Muffin the
Mule will commence in September 2005 with most activity planned for 2006.
In addition to the new theme music and incidental music written for the series
by ex Herman's Hermit Keith Hopwood, the Company has commissioned different
versions of the old music including rap and dance styles as well as original
music relating to the new characters. Technology devices, such as ring tones and
downloads will be used to maximum effect to tell everybody Muffin the Mule is
back!
The Year Ahead
Since its admission to trading on AIM in 2001, Maverick has experienced many
changes in its operating environment and has had to adjust to those
surroundings. Both 2003 and 2004 were difficult years but 2005 is proving to be
a year of more stability.
We have key partners in place who add an extra dimension to our business. We
have a stronger retail presence in our core UK market. Through our relationship
with Peak, we expect to be able to capitalise on their experience in the highly
complex US market as well as having a manufacturing partner with access to the
Far East.
Conclusion
Maverick has come through a challenging period of evolution and I am looking
forward to taking the Company to the next stage. We are now well positioned to
take advantage of new technologies and benefit from the seemingly insatiable
appetite for popular children's characters and TV series. The Company controls
the distribution of its key brands with experienced industry partners.
Maverick will continue its policy of identifying and purchasing undervalued
brands, as well as developing, producing and commercially exploiting
intellectual properties.
I believe the Company is a re-energised and re-focussed business and am
confident it will achieve its objectives for 2005, and return to profit during
the year.
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2004
2004 2003
Notes # # # #
Turnover 155,887 255,945
Cost of sales (2,101,562) (449,062)
_____________ _____________
Gross loss (1,945,675) (193,117)
Distribution costs 14,253 18,704
Administrative
expenses 755,062 686,963
_____________ (769,315) _____________ (705,667)
_____________ _____________
Operating loss (2,714,990) (898,784)
Interest receivable 20,903 -
Interest payable (48,052) (4,663)
_____________ _____________
Loss on ordinary
activities before
taxation (2,742,139) (903,447)
Tax on loss on - -
ordinary activities
_____________ _____________
Loss for the financial
year after taxation (2,742,139) (903,447)
============= =============
Earnings/(loss) per
share 4 (0.0888)p (0.0421)p
============= =============
Fully diluted earnings/(loss)
per share 4 (0.0888)p (0.0421)p
============= =============
Continuing operations
There are no differences between the results shown in the consolidated profit
and loss account and those on an historical cost basis.
Total recognised gains and losses
The Group has no recognised gains or losses other than the profit or loss for
the above two financial years.
UNAUDITED CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2004
2004 2003
Notes # # # #
Fixed assets
Intangible assets 1,073,009 2,395,716
Tangible assets 8,670 9,609
_____________ _____________
1,081,679 2,405,325
Current assets
Stock 349,442 19,806
Debtors 420,720 432,637
Cash at bank and
in hand 189,701 1,112,777
_____________ _____________
959,863 1,565,220
Creditors: amounts
falling due within
one year (407,603) (314,674)
____________ ____________
Net current assets 552,260 1,250,546
_____________ _____________
Total assets less
current liabilities 1,633,939 3,655,871
Creditors: amounts
falling due after
more than one year (617,700) (580,000)
_____________ _____________
1,016,239 3,075,871
============= =============
Capital and reserves
Called up share
capital 5 3,341,268 3,056,890
Share premium 2,202,648 1,804,519
Merger reserve (749,653) (749,653)
Profit and loss
account (3,778,024) (1,035,885)
_____________ _____________
Shareholders' funds
-(equity
interests only) 6 1,016,239 3,075,871
============= =============
UNAUDITED CONSOLIDATED CASHFLOW STATEMENT AND RELATED NOTES
FOR THE YEAR ENDED 31 DECEMBER 2004
2004 2003
# #
Net cash outflow from operating activities (941,213) (447,109)
Returns on investment and servicing of finance 19,950 (4,663)
Capital expenditure and financial investment (684,320) (397,073)
_____________ _____________
(1,605,583) (848,845)
Financing (net of issue costs) 682,507 2,044,959
_____________ _____________
(Decrease)/increase in cash (923,076) 1,196,114
============= =============
UNAUDITED RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW
FROM OPERATING ACTIVITIES
2004 2003
# #
Operating loss (2,714,990) (898,784)
Depreciation and amortisation charges 2,007,966 242,004
(Increase)/decrease in stock (329,636) 122,587
Decrease in debtors 11,917 184,595
Increase/(decrease) in creditors 83,530 (97,511)
_____________ _____________
Net cash outflow from operating activities (941,213) (447,109)
============= =============
UNAUDITED ANALYSIS OF MOVEMENTS IN NET (DEBT)/FUNDS
At Cashflow Non-cash At
1 January changes 31 December
2004 2004
# # # #
Net cash:
Cash at bank
and in hand 1,112,777 (923,076) - 189,701
Debts falling due
after one year:
Convertible redeemable
loan stock 2008 (580,000) - - (580,000)
_________ _________ _________ _________
Net funds/(debt) 532,777 (923,076) - (390,299)
========= ========= ========= =========
NOTES TO THE UNAUDITED FINANCIAL INFORMATION
FOR THE YEAR ENDED 31 DECEMBER 2004
1. Publication of non-statutory information
The information in this announcement, which is unaudited and was approved by the
Board of Directors on 27 April 2005, does not comprise statutory accounts as
defined by s240 of the Companies Act 1985 (the Act). The statutory accounts for
the year ended 31 December 2003 have been delivered to the Registrar of
Companies and included an audit report which was unqualified and did not contain
statements under s237(2) or (3) of the Act. The statutory accounts for the year
ended 31 December 2004 will be delivered to the Registrar of Companies in
accordance with section 242 of the Act following the Company's AGM.
2. Basis of preparation
The unaudited financial information for the year ended 31 December 2004 has been
prepared using accounting policies consistent with those adopted by Maverick
Entertainment Group plc in its statutory accounts. The financial information has
been prepared on a going concern basis. The Company is dependent upon the future
commercial success of its animated productions and merchandising. In order to
complete the productions and effectively market them, the Company may require
future funding. The Directors are confident that, if required, sufficient
finance will be available and, therefore, consider it is appropriate to prepare
the financial information on a going concern basis.
3. Annual report and accounts
Copies of this announcement are available from the Company's registered office
at Maverick Entertainment Group plc, Belmont House, 13 Upper High Street, Thame,
Oxfordshire, OX9 3ER.
4. Earnings/(loss) per share
Earnings per share have been calculated in accordance with Financial Reporting
Standard 14 "Earnings Per Share". The calculation has been based on the loss
attributable to equity shareholders of #(2,742,139) (2003: #(903,447)) and
3,088,810,412 (2003: 2,143,833,480) ordinary shares being the weighted average
number of shares in issue during the year. The diluted earnings per share is
based on a weighted average of 3,088,810,412 (2003: 2,143,833,480) ordinary
shares after allowing for any dilution for share warrants outstanding.
5. Share Capital
2004 2003
# #
Authorised
4,000,000,000 ordinary shares of 0.1p each 4,000,000 -
400,000,000 ordinary shares of 1p each - 4,000,000
=========== ===========
On 1 November 2004 the Company subdivided each existing ordinary share of 1p
each into 10 Ordinary shares of 0.1p each.
Allotted, called up and fully paid:
3,341,267,746 ordinary shares of 0.1p each 3,341,268 -
305,688,886 ordinary shares of 1p each - 3,056,890
=========== ===========
During the year the company issued a total of 284,378,886 new ordinary shares of
0.1p each by way of two placings on AIM at a placing price of 0.25p per share
and this raised #710,945 before costs of #28,438.
NOTES TO THE UNAUDITED FINANCIAL INFORMATION (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2004
6. Reconciliation of movement in shareholders funds
2004 2003
# #
Loss for the financial year (2,742,139) (903,447)
New shares issued (net of issue costs) 682,507 1,464,961
_____________ _____________
Net movement in shareholders' funds (2,059,632) 561,514
Opening shareholders' funds 3,075,871 2,514,357
_____________ _____________
Closing shareholders' funds 1,016,239 3,075,871
============= =============
This information is provided by RNS
The company news service from the London Stock Exchange
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