Creative Entertainment Group plc

February 29, 2008 07:24 ET

Creative Entertainment Group plc: Final Results for the Six Month Period Ended 30 June 2007

LONDON, UNITED KINGDOM--(Marketwire - Feb. 29, 2008) - Creative Entertainment Group plc, the PLUS-quoted media and entertainment group, announces its final audited results for the 6 month period ended 30 June 2007.

Overview

- Turnover in the six month period of Pounds Sterling 4.0 million (17 months to 31 December 2006: Pounds Sterling 3.8 million) and loss before tax of Pounds Sterling 124,420 (17 months to 31 December 2006 (as restated) loss Pounds Sterling 555,998).

- Significant value generated through the development of three new projects.

- Agency business developed with a number of tours booked for the next six months.

- Organic and acquisitive growth strategy to be continued in order to build a multi-facetted media and entertainment business.

- Loss per share for the period 0.12p (2006: loss 0.85p); diluted loss per share 0.11p (2006: loss 0.81p)

Chairman's Statement

I am pleased to report our final audited results for the six months ended 30 June 2007.

In order to better reflect the trading patterns of the Group now and as they are envisaged for the future, we have changed our financial year end to 30th June. The reported results include a restatement of the results for the prior period. This is explained more fully in the Financial Review section below.

The results reflect a number of aspects of the business and its development in the past six months.

- The Company incurred a full six months of costs relating to our Agency division, established when Paul Fitzgerald joined the group in October 2006. Due to the run off of previously contracted events, the Company derived little benefit from these events in the period. However, with those previous contracts now concluded we will see substantial returns from this division going forward with tours of the artists from the X Factor and Britain's Got Talent being the first of these.

- Our acquisition of Create Music in January 2007 has added to our results but will contribute further in the second half of the calendar year as the business is fully integrated. This division's monthly turnover has doubled since the beginning of the year.

- We have created a Visual Media division, headed by Karl Woolley, which has secured strong positions in two significant media projects. 'Bin Weevils' a social networking website developed in partnership with Nickleodeon and Prism Entertainment and "Combat Fighting Championships" a mixed martial arts format being developed with a US company - mixed martial arts is one of the fastest growing sports in the world and is already attracting significant pay per view audiences in the USA.

In addition to the revenue streams we expect to earn from these two projects in the future, they can already be demonstrated to have considerable value through the equity position we hold in each project.

- Our Theatrical division holds an equity stake in the company (Hill Top Productions Limited) that has acquired the rights to produce a major musical theatre production. Based on a hugely successful series of albums, "Bat out of Hell", this is scheduled to be transferred to the London stage in 2009. Further exploitation of the acquired rights will follow and significant returns are expected in the future.

I can also report that, due to the time pressure of his other business interests, Paul Burger has decided to step down from the Board and terminate his involvement with the Group. I thank him for his contributions.

Financial Review

Our results are in line with expectations given the seasonal nature of our business and the investment made in new projects.

In terms of seasonality and the results of the expansion of the business, our turnover of Pounds Sterling 4.0 million in the first six months of the calendar year is expected to be substantially exceeded as we move forward and the new projects come on stream.

In preparing the final financial statements, non-cash errors have been uncovered that are together sufficiently material in accounting terms to require correction by way of a prior year adjustment. Therefore the financial statements for the period ended 31 December 2006 have been restated. The adjustment arises from mis-matches in the recognition of revenues and costs in the prior period and results in a loss after tax for the period ended 31 December 2006 of Pounds Sterling 555,998. Since that date, the Company has improved its financial controls through the recruitment, in early 2007, of a Group Financial Controller. In addition, the auditors of the subsidiary companies in which the errors occurred have been replaced by the auditors to Creative Entertainment Group Plc. The Board requested that the Group's auditors carry out additional checks to ensure that, in 2007 and going forward, adequate controls were in place to prevent such mis-matches re-occurring. I am pleased to report that the auditors have confirmed to the Board the adequacy of the current procedures.

Additionally, given the growth in the Company's activities, the Board has agreed that it is necessary to appoint a full time Finance Director. I am pleased to report that Nicola Brookes FCA, who has been working with the Company as a consultant since January 2008, has agreed to take up this position with effect from 1st March 2008.

With this in mind results for the six months to 30 June 2007 show a turnover of Pounds Sterling 4.0 million and loss before tax of Pounds Sterling 124,420, slightly better than that issued previously in the unaudited interim release.

Operations

Our work in facilitating major events for clients continues, with concerts by George Michael (in Moscow and Kiev) and Enrique Inglesias (Syria), Sir Elton John, The Who, Meatloaf and Lemar being highlights of the first half year.

Our arrangements with Simon Cowell's organisation, Syco, means that in addition to the X Factor and the artists that the show produces, we also represent contestants from other productions such as 'Britain's Got Talent'. The winner of that show, Paul Potts, is proving a major success with tours booked in the UK, Australia / New Zealand and Scandinavia. Whilst these tours did not contribute significantly to the financial results for the period, they will generate substantial turnover and income in the following financial year.

Outlook

We are actively seeking growth, both organically and by acquisition, in order to establish the foundations of a multi-facetted media and entertainment business, whilst avoiding recorded music and the promotion of events - areas where we feel that the risk profile is unacceptable. In addition to continuing to grow our core events and agency businesses, our stake in the three projects described above gives us an asset base of real value to be exploited in the future. Our commitment to this growth strategy is reflected in the appointment of WH Ireland Limited as financial advisers to the Group, which we announced earlier in the year.

With a solid management and an increasing visibility in our sector, we believe we are ideally placed to capitalize on the investments made and deliver value to shareholders.

Finally, I would like to thank the whole team for all their efforts and hope that their continued enthusiasm will help drive Creative Entertainment to achieve its long term ambitions.

Peter Frohlich

Chairman

29 February 2008



CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
6 months 17 months
ended ended
30 June 31 December
2007 2006
(as restated)
Pounds Pounds
Sterling Sterling

Revenue 4,099,436 3,756,270

Cost of sales (3,448,709) (3,167,787)

Gross profit 650,727 588,483

Administrative expenses (862,971) (1,145,193)

Loss from ordinary activities before
income tax and (212,244) (556,710)
finance costs

Net finance costs 4,844 712
Other income 82,980 -


Loss before income tax (124,420) (555,998)

Tax on loss on ordinary activities (13,395) -

Net loss from ordinary activities (137,815) (555,998)

Attributable to:
Equity holders of the parent (131,263) (555,998)
Minority interest (6,552) -

(137,815) (555,998)
Loss per share
- basic (0.0012) (0.0085)

- diluted (0.0011) (0.0081)


CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2007
As at As at
30 June 31 December
2007 2006
(as restated)
Pounds Pounds
Sterling Sterling
ASSETS
Non-current assets
Fixed asset investments 376,875 -
F
Intangible assets 563,724 428,760
Property, plant and equipment 49,866 38,580

990,465 467,340
Current assets
Trade and other receivables 1,814,704 1,185,607
Cash and cash equivalents 802,349 18,008
2,617,053 1,203,615

TOTAL ASSETS 3,607,518 1,670,955

EQUITY AND LIABILITIES
Share capital and reserves
Issued capital 1,162,810 956,250
Share premium 550,332 256,232
Other reserves 52,436 44,416
Reverse acquisition reserve (400,219) (400,219)
Revaluation reserve 310,206 -
Retained earnings (656,265) (525,002)
Translation reserve (2,296) -

Equity attributable to equity
holders of the parent 1,017,004 331,677
Minority interest (1,964) -

TOTAL EQUITY 1,015,040 331,677

Current liabilities
Trade and other payables 2,592,478 1,289,772
Short-term borrowings - 49,506

TOTAL LIABILITIES 2,592,478 1,339,278

TOTAL EQUITY AND LIABILITIES 3,607,518 1,670,955

NOTES TO THE FINAL RESULTS


1. The directors of the Company do not propose the payment of a dividend.

2. The financial information in this announcement has been extracted from the Company's audited accounts

THE DIRECTORS OF THE ISSUER ACCEPT RESPONSIBILITY FOR THE CONTENTS OF THIS ANNOUNCEMENT

Contact Information

  • Creative Entertainment Group plc
    Peter Frohlich
    020 7499 7176
    or
    St Helen's Capital plc
    Duncan Vasey
    020 7628 5582