BKN International A.G.
AIM : BKN
FRANKFURT : BKQ

November 21, 2005 02:04 ET

BKN Announces Record Net Earnings of EUR 4.3 Million 'EUR 1.7 Million in 2004' and 500,000 Share Buy-Back Program

LONDON, UNITED KINGDOM--(CCNMatthews - Nov. 21, 2005) - BKN International AG ("BKN" or "the Company") (AIM:BKN)(FRANKFURT:BKQ),, a global animation company engaged in the distribution and marketing of animated children's television programmes and related consumer products, today reports final results for the year ended 30 September 2005.

Highlights

- Turnover increased 52% to EUR 11.1 million compared to EUR 7.3 million in 2004.

- Profit Before Tax ("PBT") increased 76% to EUR 3.0 million compared with EUR 1.7 million in 2004.

- Net Income increased 154% to EUR 4.3 million from EUR 1.7 million in 2004 in part due to a net deferred tax credit asset of EUR 1.3 million (a 76% increase adjusting for tax asset).

- Basic Earnings per Share ("EPS") increased 116% to EUR 0.28 compared with EUR 0.13 per share in 2004 (EUR 0.19 excluding net deferred tax credit, +50% compared to 2004).

- Cash Generated from Operating Activities increased substantially to EUR 6.0 million from EUR 61 thousand in 2004 with approximately 50% achieved in the first half and 50% in the second half.

- Expansion of film catalogue to 65 titles and 1,770 episodes compared to 54 titles and 1,573 episodes in 2004.

- The Company announced a share buy-back program whereby it intends to acquire up to 500,000 of its own shares for various purposes during the next 12 months.

- Credit Suisse Group and DIT-Allianz Dresdner Global Investors become institutional shareholders during the year and own 4.92% and 5.73% of the Company respectively as at 30 September 2005.

- Creditreform Rating AG rates the Company BBB, investment grade.

Commenting on the Results, Allen Bohbot, Chairman & Chief Executive Officer of BKN International AG, said: "We have a stable film catalogue asset, Legend of the Dragon and Kong are well established franchises, and significant new product is coming to market such as Dork Hunters from Outer Space over the next 12-18 months. Having delivered record net earnings for the Company in fiscal 2005 of EUR 4.3 million, due in part to a deferred tax credit (EUR 3.0 million adjusted net earnings), and Basic EPS rose to EUR 0.28 versus EUR 0.13 last year (EUR 0.19 adjusted EPS), we feel that fiscal 2006 will see further expansion bottom line growth due to strong turnover growth and tight cost controls in all of our businesses. We are geographically well positioned, our creative and management staff are strong and stable, our product is global, our suppliers are experienced and our balance sheet is secure. The outlook for the Company is very positive."




Enquiries:

BKN International AG

Allen Bohbot, Chief Executive Officer Tel: +44 (0) 20 7269 8683
allen.bohbot@bknkids.com

Wayne Mowat, Chief Financial Officer Tel: +44 (0) 20 7269 8687
wayne.mowat@bknkids.com

Sascha Ziemann, Finance Manager Tel: +49 221 55 40 5 - 190
sascha.ziemann@bknkids.com
www.bknkids.com

Broker/Designated Sponsor:

Panmure Gordon in the UK
Aubrey Powell Tel: +44 (0) 20 7459 5733

Seydler AG in Germany
Rene Parmantier Tel: +49 69 92054 130
rene.parmantier@seydler.de

Media Enquiries:
Abchurch for Corporate and financial press
Henry Harrison-Topham / Heather Salmond Tel: +44 (0) 20 7398 7700
henry.ht@abchurch-group.com www.abchurch-group.com

SSA Public Relations for trade & industry press
Karine Fouchet Tel: +44 (0) 20 7849 5689
kfouchet@ssapr.com



For a full version of the final results please go to our website www.bknkids.com

Notes to editors:

About BKN:

BKN International AG is a global animation company engaged in the distribution and marketing of animated children's television programmes and the marketing of related consumer products (licensing and merchandising) in all forms. BKN has worked on numerous successful animation projects.

The Company is currently listed on the Deutsche Bourse and AIM and it operates all over the world. BKN has successfully negotiated distribution deals in over 80 countries and territories in the children's programming market.



The Company's Film Library includes:
- Legend of the Dragon
- UBOS
- Kong - The Animated Series
- Kong - King of Atlantis
- Kong - The Next Generation
- Kong II - Return to the Jungle
- Dork Hunters from Outer Space
- Roswell Conspiracies
- Shanghai Tiger
- Adventures of Sonic the Hedgehog
- Pocket Dragon Adventures
- Highlander - The Animated Series


Consolidated Management Report & Chairman and Chief Executive Statement

We are pleased to present the financial results of BKN International AG, a global animation production and distribution company ("BKN" or the "Company") that is listed on the Frankfurt and London Stock Exchanges. We license our product in approximately 95 countries and dub in about 30 languages. This Consolidated Report of the Management Board will cover audited financial statements under IAS accounting rules for the period ended 30 September 2005 and compared to the similar period in fiscal 2004.

The Company had a very strong year during which we have launched new products, increased our client base, successfully expanded into the United States, dramatically increased our profitability and significantly strengthened our balance sheet.

A. Group Structure

- The Group consists of BKN International AG, the parent company in Germany, with active operating trading subsidiaries in the United Kingdom ("BKN New Media Ltd"), the United States ("BKN New Media Inc") and Singapore ("BKN New Media Pte. Ltd"). The Company is considering opening BKN New Media SL in Spain in 2006 to manage sales and marketing in Spain, Portugal, Italy and Latin America.

- The Company reports in Euro and trades in Euro, UK Sterling, Singapore Dollars and United States Dollars.

- The Company is listed on the General Standard of the Frankfurt Stock Exchange (March 2000) and on the Alternative Investment Market of the London Stock Exchange (December 2003).

B. Film Catalogue and New Properties

- We have successfully expanded the Company's film catalogue, at 30 September 2005, to 65 titles and 1,770 episodes compared to 54 titles and 1,573 episodes as published in our 2004 Annual Report.

- The Company expanded the property entitled Legend of the Dragon this year and is quite pleased with the on-going results. Revenues of EUR 6.9 million to date have exceeded management's expectations of EUR 5.2 million. The marketing launch will continue to roll-out throughout 2006 in various countries including Spain, Germany and the United States, all adding to the existing base of revenues achieved to date. Based on this success, the Company has commissioned Season II of the next series in conjunction with Promus (see Subsequent Events section below), in Singapore and Shanghai, consisting of 13 new episodes to be delivered in summer 2006 to bring the total to 39.

- The Kong franchise continues to expand with our recent decision to produce a new film sequel entitled Kong II- Return to the Jungle (80-minute film in 3D) and Kong- the Next Generation (22 episodes in 3D), both to be delivered in September 2006. In the USA, Jetix began broadcast on 19 September and Warner Home Entertainment launches the DVD in the USA on 22 November. Majesco will launch its videogame on or about 6 December and we are quite active in securing additional licensing deals for this exciting property worldwide.

- One of our most exciting new developments and series, in conjunction with ST Animation (see Subsequent Events section below), presented at MIPCOM last month is Dork Hunters from Outer Space (26 episodes), a new action based comedy. We have high expectations for this property globally which will be delivered in September 2006.

- We have developed a new project entitled Shanghai Tiger (26 episodes) in conjunction with ST Animation in Singapore and these episodes will be delivered in March 2007.

- The film catalogue continues to deliver strong earnings on a steady pace as the Company finds new markets for its products.

C. Financial Highlights

- Turnover for the full year increased 52% to EUR 11.1 million from EUR 7.3 million in 2004.

- Revenues from Television license fees increased 36% to EUR 5.5 million from EUR 4.0 million in 2004 and revenues from Consumer Brands increased 72% to EUR 5.6 million from EUR 3.3 million last year.

- Total costs increased 36% to EUR 8.8 million from EUR 6.4 million in the prior year.

- Profit Before Tax ("PBT") increased 76% to EUR 3.0 million from EUR 1.7 million in 2004.

- Net Income increased 154% to EUR 4.3 million from EUR 1.7 million in 2004 in part due to a deferred tax credit asset.

- Basic Earnings Per Share ("EPS") increased 116% to EUR 0.28 from EUR 0.13 per share.

- Cash generated from operations increased substantially to EUR 6.0 million from EUR 61,000 in 2004. The Company delivered approximately 50% in the first six months and 50% in the second six months.

- Operating cash flow or EBITDA increased 18% to EUR 5.9 million from EUR 5.0 million last year.

- Cash on hand totals EUR 384,000 versus EUR 2.2 million last year, however the company received approximately EUR 4.3 million in cash on 18 October 2005

- The Company has no short-term debt or short-term lending obligations.

- Shareholder's Equity increased 48% to EUR 24.1 million from EUR 16.3 million in 2004.

- Programming rights asset value increased to EUR 23.6 million from EUR 16.1 million in 2004 and to 1,770 episodes from 1,573 episodes in the prior year.

- The Company employs at the year end 25 full-time employees and consultants versus 20 at the end of 2004. The Company estimates that approximately 400 people work on the production of its shows at various locations and for various vendors.

- The turnover of the staff is very low with only three departures in the year, none of them key executives. The Company is experiencing a period of stability in its executive and managerial staff with many long-term employees in many of the divisions.

D. Business & Operating Environment

The children's market sector has experienced a number of changes in the last five years. In 2002 and 2003, most content suppliers struggled as broadcasters experienced reduced advertising income and therefore cut their acquisition budgets. A modest rebound was experienced in 2004 and it seems like the current environment is more buoyant. While prices for animation have not increased, and in most cases remain flat, there are a number of dedicated 24-hour animation channels in the world (by some estimates, as many as 700) that require children's content, both from catalogues as well as new productions. Good examples include recent and upcoming launches in Germany of both the Nickelodeon and Cartoon Network channels and the new children's digital channel in the UK in February 2006 by ITV. The larger suppliers of global content are experiencing success as the key to children's entertainment is global content, not locally produced animation.

New markets are opening as well, such as China, where several dedicated channels are expected to launch, with ToonMax being the first almost a year ago. In India, there are now approximately a half-dozen dedicated channels and this is also expected to grow significantly. BKN is well-positioned to take advantage of some of these new markets and requirements by these new channels as our product is global in nature and "travels" very well.

It is noteworthy that while some of our major competitors have not achieved the level of success that BKN is reporting in terms of growth, many have posted significantly more positive financial results in the latest announcements and this bodes well for the entire industry. It is difficult to forecast how long this positive trend will continue, but based on the various cycles the industry has experienced in the past, we believe the next two years should be positive.

E. Financial Position

The Company had a capital increase in June of 2005 whereby it issued 494,079 new shares at a price per share of EUR 5.53 yielding total gross proceeds of EUR 2.7 million with institutional and other shareholders. At the same time, the Company announced that it issued 211,000 new shares to BayStar Capital in accordance with the conversion of a convertible bond issued in September 2004 for compensation via a relief of debt obligation of approximately EUR 1.2 million. As stated in the accounts, the Company generated a substantial increase in Cash Generated by Operating Activities in fiscal 2005 of EUR 6.0 million versus EUR 61 thousand in 2004.

The Company will be expanding its capital expenditure in 2006 to include three series and 65 new episodes of film at a total cost of EUR 13.0 million. To date, the Company has secured pre-sales of approximately EUR 4.6 million or 35% and this number is expected to climb during the next 12 months. This is in keeping with the Company's policy to secure no less than one-third of production commitments in pre-sales prior to commissioning the production.

The Company is in a strong tax position, with tax losses available for future use in all operating territories. This is a major benefit for the company and has been recognised in the accounts this year, with the creation of a net deferred tax position of EUR 1.3 million. Tax due on the profits of this year 2005 will thus be minimal and in future years will be substantially reduced due to the offset of such tax losses bought forward against future profits.

F. Key Customers

The Company works internationally with major broadcasters, video distributors and third party licensees. Some examples include:



Customer Name Medium Property
------------- ------ --------
Disney/Jetix USA Television Kong, Legend
of the Dragon
Nickelodeon Latin
America Television Legend of the Dragon
BBC United Kingdom Television Legend of the Dragon, UBOS
Warner Bros Worldwide Video Kong - King of Atlantis
Super RTL Germany Television Legend of the Dragon, Kong,
Ali Baba
RTVE Spain Television Legend of the Dragon, UBOS
Planeta Spain Video Games Legend of the Dragon
KE Media Video Games Legend of the Dragon
Grand Toys
International Master Toy Legend of the Dragon
Hasbro Inc. Worldwide Video Now Legend of the Dragon
Cartoon Network U.K. Television Kong


G. China and India

In the past 12 months, we have allocated time and resource to developing our business in these large and emerging markets. Our conclusion is that India is ripe for investment due to their business friendly environment and expertise in 3D animation as exemplified by our recently announced large binding agreement with UTV Software Communications LTD. In China, we signed a non-binding agreement with ToonMax TV Media & Entertainment Company Ltd in April but due to subsequent changes in the relevant laws, we have decided that it is not in our best interest to move to a binding long-form agreement. Our view is that China is great as a market for quality "work for hire" services but not to invest locally at this time.

H. Convertible Notes

In September 2004, we issued several Notes totalling EUR 5.0 million to a US and UK group of investors allowing them to convert into shares of the Company. At the end of fiscal 2005, the group had converted approximately EUR 1.2 million and the balance remains due in March 2008 at EUR 3.8 million, which can be converted, including warrants, into 925,365 shares of the Company until March 2008.

I. Share Buyback Program

The Company, as per authorisation from the shareholders on 17 March 2005, will commence a share buyback program effective 21 November 2005, for a maximum period of one year. The Company may acquire up to 500,000 of its own shares for various purposes.

J. Major Shareholders

During the course of the fiscal year, the Company was notified that Credit Suisse Group now owns 774,067 shares or 4.92% of the Company while DIT- Allianz Dresdner Global Investors recently acquired 900,000 shares or 5.73% of the Company. We welcome these new shareholders to the Company.

K. The Management and Supervisory Boards, Key Talent

- The management team is well experienced and seasoned in the industry. Allen Bohbot (CEO), Wayne Mowat (CFO) and Ben Heng (Managing Director for Asian affairs) make up the Management Board and oversee the Company on a daily basis.

- Nikki Andrews is VP - Sales and Marketing for all English, French and German speaking territories while Laura Tapias is VP - Sales and Marketing for Spanish, Portuguese and Italian speaking markets.

- Richard Ungar is Executive Producer on all titles and Jeff "Swampy" Marsh runs the London based production group.

- There are three seasoned non-executive Directors that comprise the Supervisory Board including Karl Benetz as Chairman with Robert Paff and Michael Jack Kugler. All three members will be up for re-election at the upcoming Annual General Meeting in February 2006.

L. Corporate Governance

- The Company strives to achieve the highest level of corporate governance and transparency in order to assure that the financial accounts stand up to the greatest scrutiny.

- The Company is in good standing with the Frankfurt and London Stock Exchanges and complies with all rules and regulations.

- The Company has met all of the recommendations of the German Corporate Governance Code of Good Conduct, with regards to a company our size and complexity, with the exception of incentive based compensation for the Supervisory Board members who earn a flat annual compensation.

- The Management and Supervisory Boards met either in person or telephonically on six separate occasions during the fiscal year and in addition, numerous telephone conversations took place between members of both boards to ensure full and accurate communication. The Management Board supplied the Supervisory Board with sufficient and comprehensive information throughout the year. The Boards cooperated closely for the benefit of the enterprise.

- The Company has no borrowing or lending relationship with any of its Directors.

M. Risk Factors

During this past year, the Company strengthened its internal control systems by:

- Engaging Technicolor, a major film laboratory, to update all of the labeling of its films including performing quality control tests to make sure that the quality of all materials is appropriate.

- Creating a dedicated O: Drive on its network to track all physical materials available on each property for sophisticated shipping and dubbing to customers.

- Engaging off-site provider for nightly back-up of all emails and key materials.

- Creating an FTP website for immediate access to all work in progress by company suppliers around the world.

- Issuing a nearly 100 page Employee Handbook so as to clarify all corporate rules and procedures.

- Upgrading its real-time, multi-currency financial and rights tracking system by engaging full-time dedicated employees and consulting programmers.

- Establishing Purchase Order and Expense Report approval procedures to maximize the efficiency of its operating systems.

- Upgrading its www.bknkids.com corporate site to offer even easier and quicker access to customers, vendors and shareholders to major information.

- Creating and establishing dedicated websites for its two key properties at www.legendofthedragon.com and www.kong-kingofatlantis.com

- Providing even greater transparency to its financial accounts and switching to IAS accounting from US GAAP one year prior to legal requirement.

- Management believes that business risks are well under control. We are not aware of any specific risks that exceed the normal business or product related levels.

As with any business, there are variable external risks such as:

- At this time, the Company does not hedge against currency fluctuation. While we report in Euro and maintain accounts in Euro, Sterling, Singapore Dollars and US Dollars, a majority of our sales are in US Dollars and this is matched by a majority of our costs. The Company engages vendors throughout the world for its productions (Los Angeles, China, India, Egypt) and all such contracts are in US Dollars. The Company believes that it is properly managing this currency fluctuation and has no need at this time to create hedging instruments whose cost would outweigh the benefit.

- Historically, we have not been dependent on DVD sales as this has been a small part of our turnover. Recently, we have completed two "Direct to DVD" animated films with original music and licensed them to DVD publishers worldwide. While the slowing growth rate in DVD sales have been well publicized, this is not likely to have a material impact on our business.

- Our major suppliers, as noted above, are in foreign locations as typical of the animation industry. We believe that all are credible, well funded and professional. The global nature of the industry allows the Company to source the best producers in cost and quality regardless of territory. We have not experienced any significant delays in production but this is always possible.

- We are expanding at a rapid pace. In the past few years, we have delivered one major new series annually and for 2006, we have commissioned 3 new series. However, one is an expansion of a proven franchise (King Kong), the second continues a recent success (Legend of the Dragon) and only the third is a totally new intellectual property. We believe that our creative and production staff are well in control of all productions and budgets.

- The children's market has historically been cyclical. At various points in the past two decades, the market has been over-supplied and at other points, it has starved for intellectual content. While we believe that the market is in a good place at this time, and will be for the near term, this is likely to change but only over the longer term.

- Prices for children's content have been mostly flat in the last few years and it is not expected that the industry has any real pricing power. This is mitigated by the expansion of new channels dedicated to the sector.

- There are a number of producers, primarily in France and Canada, that have access to government subsidies and the broadcasters in those markets favor local producers. The Company does not receive any subsidies from any source although some of our partners may. It does not appear that other jurisdictions will expand government involvement in the sector and this seems in hand at this time.

N. Subsequent Events

In August 2005, we announced that the Management Board passed a resolution to issue additional Convertible Bonds in the amount of approximately USD 7.0 million to a US group named Laurus Funds. This deal closed in October 2005 after the close of our fiscal year, and we issued one EUR 4.5 million Note convertible into 1.0 million shares plus agreed to issue a second EUR 1.125 million Note dated January 2006 convertible into shares as determined by the share price in January 2006 plus a 10% premium that can be converted into a maximum of 250,000 shares of the Company. These Notes have a 5-year term until October 2010 but there are amortization payments that become due after 18-months respectively until the 60th month unless Laurus Funds converts into equity prior. In addition, we agreed to issue a EUR 50,000 note with 250,000 warrants attached. Each warrant entitles Laurus Funds to subscribe to one share at a strike price determined by the share price in January 2006 plus a 10% premium.

In October 2005, our US subsidiary signed a deal with Promus Singapore Pte. Ltd ("Promus") to invest in the Legend of the Dragon Season II property. Promus is acquiring certain distribution rights from BKN to be paid partially in cash and partially in kind by Promus providing production services to BKN. The Company retained worldwide distribution rights in perpetuity to the Legend of the Dragon property, but has agreed to share profits derived from the second season only with Promus.

In October 2005, our UK subsidiary signed a deal with ST Animation Pte. Ltd ("ST Animation") to co-produce the property entitled Dork Hunters from Outer Space. ST Animation is investing and acquiring certain distribution rights from BKN by providing certain production services to BKN. The Company retained worldwide distribution rights in perpetuity to the Dork Hunters from Outer Space property, but has agreed to share profits with ST Animation.

In October 2005, our US subsidiary signed a deal memorandum with ABC Cable Networks Group to broadcast the Legend of the Dragon show on Disney/Jetix Action Block in the USA from September 2006.

O. Creditreform Rating

The Company has commissioned Creditreform Rating AG to rate the business, mostly for the purpose of issuing bonds. We are pleased to report that the Company has secured a BBB rating, investment grade.

P. Stock Option

During the fiscal year, the Supervisory Board granted all three members of the Management Board a combined total of 740,000 stock options at a strike price of EUR 6.02 due to be exercised in March 2007. In addition, there are 8,500 options issued to employees at a EUR 3.86 strike price.

Q. Annual General Meeting

The next meeting is set for Thursday 9 February, 2006 in Cologne.

R. Outlook

The markets look healthy for children's animation in the near term with hundreds of dedicated animated children's channels operating throughout the world. The Company is strategically well placed to take advantage with our London office handling Continental Europe and our New York office handling North America. The Company's Singapore office has expanded our presence into all Asian markets including China and India and in 2006, we will open an office in Barcelona to focus on the important markets of Spain, Portugal, Italy and Latin America.

Due to an extensive effort to expand on the DVD and traditional licensing and merchandising, especially on Legend of the Dragon and Kong, we believe that our income streams will be more diversified in 2006 and beyond from just the exploitation of television rights. In the next 12 months, we will see video games on both Legend of the Dragon and Kong, a master toy line on Legend of the Dragon as well as a number of ancillary products on this property and seven new DVD titles being released on 6 January 2006 in the United States. In addition, Dork Hunters from Outer Space appears to be a title with a great deal of merchandising possibilities.

We expect major revenue contributors in 2006 to come from the 13 new Legend of the Dragon episodes and all related merchandising, the two new Kong projects (series and film) and DVD-related releases, Dork Hunters from Outer Space initially for broadcast release with merchandising to follow in 2007 as well as a continued and concerted effort to re-license the entire catalogue to broadcasters throughout the world. We are expecting a far more balanced revenue structure and contribution from several major projects.

While we delivered record net earnings for the Company in fiscal 2005 of EUR 4.3 million (EUR 0.28 EPS) due in part to a deferred tax credit, we feel that fiscal 2006 will reflect further expansion on both turnover and earnings and that the outlook for the Company is strong.




Cologne, November 2005
The Management Board


(Signed) Allen J. Bohbot
Chairman & CEO


(Signed) Wayne Mowat
Chief Financial Officer


(Signed) Ben Heng
Managing Director- Asia



Consolidated Balance Sheets for Fiscal 2005
( in thousands of EUR )

ASSETS
30 Sep 2005 Prior Year
T EUR T EUR T EUR

A. Fixed and Intangible
assets
-----------------------
1. Intangible Assets 23,602 16,056
2. Fixed Assets 69 70
--------- ---------
23,671 16,126


B. Other Long term
Assets
-----------------------
1. Other Assets 220 218
2. Deferred Taxes 1,502 0
3. Deferred Financing
Costs 188 342
--------- ---------
1,910 560


C. Current Assets
-----------------------
1. Accounts receivable,
trade 2,048 1,870
2. Other current assets 1,272 1,737
3. Cash and cash
equivalents 384 2,220
--------- ----------
3,704 5,827

---------
29,285 22,513
---------
---------

LIABILITIES

A. Shareholders Equity
-----------------------
1. Common Stock 15,718 15,012
2. Additional paid
in capital 8,161 70,148
3. Other comprehensive
income 197 121
4. Retained earnings 0 69,006
--------- ---------
24,076 16,275


B. Long term liabilities
-------------------------
1. Bonds 3,851 5,000
2. Deferred tax
liability 172 0
3. Deferred long term
liabilities 22 25
--------- ---------
4,045 5,025


C. Short term liabilities
-----------------------
1. Accrued expenses 903 1,012
2. Accounts payable,
trade 261 201
--------- ---------
1,164 1,213

29,285 22,513
--------- ----------
--------- ----------


Consolidated Statements of Operations for Fiscal 2005
( in thousands of EUR - except shared data and number of employees)

Year to date
30 Sep 2005 30 Sep 2004
---------------------------------------------------------------------
Revenues

Television - Catalogue 5,481 4,036
Consumer Brands - Catalogue 5,617 3,270
Total Sales Revenues 11,098 7,306

Other Revenues 869 984


Expenses
Depreciation amortisation
and Goodwill 2,679 3,245
Producer fees and other direct 232 171
operating costs
Salaries and employee benefits 2,099 1,110
Other Expenses 3,761 1,914
---------------------------------------------------------------------

Total expenses 8,771 6,440
---------------------------------------------------------------------
---------------------------------------------------------------------


Other Expenses
Interest costs (225) (158)
---------------------------------------------------------------------
---------------------------------------------------------------------


Income before income tax 2,971 1,692

Provision for income tax (1,318) 2

---------------------------------------------------------------------
---------------------------------------------------------------------
Net income current year 4,289 1,690


EBITDA 5,875 4,970


earnings per share 28.1 13
diluted eps 27.9 13

basic number of shares 15,250,095 13,018,764
diluted no of shares 16,183,960 13,203,264
---------------------------------------------------------------------
---------------------------------------------------------------------

Number of employees including
directors at the end of the
year 25 20


Consolidated Statements of Cash Flows for Fiscal 2005
(in thousands of EUR )

30.09.2005 30.09.2004
------------ ------------
T EUR T EUR
Cash Flow from Operations
Net Income +4,289 +1,690

- Depreciation and Amortisation +2,679 +3,245
- Deferred Taxes -1,330 +0
------------ ------------
5,638 4,935
Changes in operating assets
and liabilities
- Accounts receivable, trade -178 -1,579
- Work in Progress 0 +100
- Other Current Assets 466 -1,458
- Other Long Term Assets -2 -44
- Deffered Financing costs 154 -342
- Accounts payable, trade 60 -794
- Accruals -108 -753
- Other Liabilities -4 -4
------------ ------------

Net cash generated from
operating activities 6,026 61
------------ ------------

Cash Flow from Investing activities
- Intangible Assets/Programme rights -10,206 -7,828
- Fixed Assets -19 -81

Net cash used in investing
activities -10,225 -7,909
------------ ------------

Cash Flow from Financing activities
- Bank overdraft and other loans 0 -4,584
- Convertible Bond -1,149 +5,000
- Proceeds from issuance of share
capital +3,436 +9,623
- Comprehensive income/(loss) +76 +3

Net cash provided by financing
activities +2,363 +10,042
------------ ------------

Net Increase/(decrease) in cash and
cash equivalents -1,836 +2,194

Cash and cash equivalents at
beginning of period 2,220 26

Cash and cash equivalents at
end of period 384 2,220


Consolidated Statements of Stockholder's Equity for Fiscal 2005
( in thousands of EUR )

Other
Retained/ Compreh- Total
Additional Earnings/ ensive Stock-
Common Paid-In (Accumulated Income/ holders'
Stock Capital Deficit) (Loss) Equity
---------------------------------------------------------------------
---------------------------------------------------------------------

---------------------------------------------------------------------
---------------------------------------------------------------------
Balance at 30
Sept 2003 9,306 66,231 (70,696) 118 4,959

---------------------------------------------------------------------
---------------------------------------------------------------------

Net profit for
the period from
1 Oct to 30 Sept
2004 1,690 1,690

Net proceeds from
share capital
increase in
December 2003 4,200 1,094 5,294

Net proceeds from
share capital
increase in June
2004 1,506 2,709 4,329

Convertible Bond
Warrant proceed 114 114

Foreign Currency
Translation
Adjustment 3 3
---------------------------------------------------------------------
---------------------------------------------------------------------
Balance at 30
Sept 2004 15,012 70,148 (69,006) 121 16,275
---------------------------------------------------------------------
---------------------------------------------------------------------

Net profit for
the period from
1 Oct to 30
Sept 2005 4,289 4,289

Net proceeds from
share capital
increase in June
2005 495 1,961 2,456

Transfer of
Accumulated
deficit to
capital (64,717) 64,717 0

Convertible Bond
Warrant proceed 211 849 1,060

Deferred finance
costs conversion
to equity (80) (80)

Foreign Currency
Translation
Adjustment 76 76
---------------------------------------------------------------------
---------------------------------------------------------------------
Balance at 30
Sept 2005 15,718 8,161 0 197 24,076
---------------------------------------------------------------------
---------------------------------------------------------------------



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