Seven Arts Pictures plc
LSE : SAPP

February 18, 2009 10:13 ET

Half-yearly report

                                                 SEVEN ARTS PICTURES PLC
                                                            
                                      ("Seven Arts", the "Company" or "the Group")

                            UNAUDITED INTERIM RESULTS FOR THE 6 MONTHS ENDED 31 DECEMBER 2008

Seven  Arts  Pictures PLC (PLUS: SAPP; OTCBB: SEVAF and now listed on NASDAQ: SAPX see announcements made), the
feature films producer and distributor, announces its preliminary results for the 6 months ended 31 December 2008.

FINANCIAL HIGHLIGHTS FOR THE SIX MONTHS

(exchange rate $1.50 = £1.00 in 2008 and $2.00 = £1.00 in 2007)

*       Revenue up 415% to £3,897,442 ($5,846,163); (2007: £938,244 ($1,876,488))

*       Profit After Tax increased by 548% to £997,261 ($1,495,892); (2007: £181,961 ($363,922))

*       Basic EPS up 472% to 3.83 pence (5.75 cents); (2007: 0.81 pence (1.62 cents))

OPERATIONAL HIGHLIGHTS

*       2 films delivered during the reporting period compared to none in the first six months of 2007/8.

*       US video release of Noise and Deal
    
Peter Hoffman, Chief Executive, commented:

"We are delighted with our achievements to date.  The growth and traction we have attained are a key and an exciting
step in achieving growth. We look forward to the future with confidence."
                                                            
                                                     ---- Ends ----


The Directors of the Issuer accept responsibility for this announcement.

For further information please contact:

Seven Arts Pictures Plc US contact:
Peter Hoffman                                         Tel:  +1 323 692 5010
phoffman@7artspictures.com

Seven Arts Pictures Plc UK contact:
Elaine New, Finance Director                          Tel: +44 (0) 20 3006 8222
enew@7artspictures.com

Corporate Adviser & Broker
Daniel Stewart & Co Plc
Stewart Dick                                          Tel: + 44 (0) 20 7776 6550

CHIEF EXECUTIVE OFFICER'S STATEMENT
Review of the Business:-

I  am  pleased to report that Seven Arts Pictures Plc has achieved pre-tax profits of £997,261 ($1,495,892) for the
six-month period  ended 31 December 2008; compared to pre-tax profits of £181,961 ($363,922) for the six  months
ended 30 September  2007. The Group's turnover in this six month period was £3,897,442 ($5,846,163) (half year  2007:
£938,244 ($1,876,488)).

The main reasons for the increase in turnover were:-

1. the delivery of two new pictures Nine Miles Down and Drunkboat compared to none in the first half of 2007/8,

2. the US video releases of Noise and Deal, the two films delivered at the end of 2006/7, were both delayed to the
second half of 2008.
    
The  US  release  of Autopsy occurred in January 2009 at "After Dark's Eight Films to Die For Horrorfest"  resulting
in Walmart agreeing to stock it in their stores. The current planned US release date for The Pool Boys (American
Summer) is August 2009.

Corporate Activity:-

1. Seven Arts Pictures commenced trading on NASDAQ Capital Market under symbol 'SAPX', effective February 13, and
   has decided to delay its planned readmission of the Company's shares on the AIM Market.  This was to have greater
   access to the capital markets.
2. We have attracted an investor following in the United States which is providing additional liquidity in the
   Company's shares.  The majority of the trading in the Company's shares has been in the US with little trading on the
   PLUS market.

I look forward to a very positive audience reaction to Autopsy, The Pool Boys (American Summer), Nine Miles  Down  and
Drunkboat. Principal  photography on Catwalk is scheduled for April 2009 whilst we hope to start production  on  Winter
Queen, Romeo Spy and Neuromancer later in the year, all of which will further establish Seven Arts' reputation as one
of only a few reliable and experienced producers of independently produced theatrical motion pictures

Peter Hoffman

CEO


CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2008

                                                 Notes         Unaudited                Audited            Unaudited
                                                          6 months ended        15 months ended       6 months ended
                                                        31 December 2008           30 June 2008    30 September 2007
                                                                       £                      £                    £
TURNOVER                                             4         3,897,442              8,874,197              938,244


COST OF SALES                                                   (759,161)            (4,745,295)             544,078
                                                        
Amortisation of intangible assets                               (384,907)              (964,640)            (137,697)
                                                        
                                                         ----------------        ---------------   ------------------
                                                        
                                                              (1,144,068)            (5,709,935)             406,381
                                                        
                                                          ----------------        ---------------   ------------------                                                        
GROSS PROFIT                                                   2,753,374              3,164,262            1,344,625
                                                        
                                                                                                          
OTHER OPERATING EXPENSES (NET)                                (1,238,891)            (2,143,985)            (797,801)

                                                         ----------------        ---------------   ------------------
                                                        
OPERATING PROFIT                                               1,514,483              1,020,277              546,824
                                                        
Share of associate income after tax                              104,340              1,052,969                    -
                                                                                                          
Net interest payable                                            (621,562)              (316,466)            (286,880)
                                                        
                                                         ----------------        ---------------   ------------------
                                                        
                                                                                                          
                                                        
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION                    997,261              1,756,780              259,944
                                                        
Taxation                                                               -                250,000              (77,983)
                                                        
                                                         ----------------        ---------------   ------------------                                                        
Retained profit for the period                                    997,261             2,006,780              181,961
                                                        
                                                         ----------------        ---------------   ------------------
                                                        
Earnings per share (pence)                           1               3.83                  8.51                 0.81
                                                        
Fully diluted earnings per share (pence)             1               2.59                  4.65                 0.44
                                                        
                                                                                 ---------------   ------------------
                                                                                 ---------------   ------------------



CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES 
FOR THE SIX MONTHS ENDED 31 DECEMBER 2008

                                                                Unaudited            Audited             Unaudited
                                                           6 months ended    15 months ended        6 months ended
                                                         31 December 2008       30 June 2008     30 September 2007
                                                                        £                  £                     £
			
PROFIT FOR THE PERIOD                                             997,261          2,006,780               181,961
			
Exchange differences on translation of foreign operations         159,637           (182,092)              (96,537)
 
                                                         -----------------   ----------------    ------------------

TOTAL RECOGNISED GAINS AND LOSSES RELATING TO THE PERIOD        1,156,898          1,824,688                85,424

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



CONSOLIDATED BALANCE SHEETS AS AT 31 DECEMBER 2008

                                                              Unaudited         Audited              Unaudited
                                                                  As at           As at                  As at
                                                       31 December 2008    30 June 2008      30 September 2007
                                                                      £               £                      £
FIXED ASSETS			
Intangible assets                                            15,339,577      13,374,660             12,169,737
Goodwill                                                      3,622,426       2,603,799              2,554,122
Tangible assets                                                  35,331          18,620                 20,848
Investments in associates                                       104,341       1,052,969              1,175,000
Investments other                                                     -         800,000                      -
                                                       -----------------  --------------     ------------------

                                                             19,101,675      17,850,048             15,919,707

                                                       -----------------  --------------     ------------------
CURRENT ASSETS
Debtors: amounts falling due within one year                135,691,934     136,380,269              4,875,613
Debtors: amounts falling due after more year                  2,098,231       1,312,692              2,426,347
Cash at bank and in hand                                      1,721,200      56,942,856                968,496

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

                                                            139,511,365     194,635,817              8,270,456
			
CREDITORS: amounts falling due within one year             (150,840,513)   (202,212,116)            (7,506,967)
                                                       -----------------  --------------     ------------------			
NET CURRENT (LIABILITIES)/ ASSETS                           (11,329,148)     (7,576,299)               763,489
			
TOTAL ASSETS LESS CURRENT LIABILITIES                         7,772,527      10,273,749             16,683,196
			
CREDITORS: amounts falling due after more than one year      (1,970,568)     (3,376,224)           (11,615,925)

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

NET ASSETS                                                    5,801,959       6,897,525              5,067,271

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

CAPITAL AND RESERVES			
Called up share capital                                       8,156,127      10,150,500             10,150,500
Share premium account                                         4,134,511       2,130,686              2,130,686
Share-based payments reserve                                    154,372         116,288                 25,297
Convertible debt                                              1,750,000       1,750,000              1,750,000
Profit and loss account                                      (6,093,051)     (7,249,949)            (8,989,212)
Investment in own shares                                     (2,300,000)              -                      -

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

SHAREHOLDERS' FUNDS                                           5,801,959       6,897,525              5,067,271

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

Equity                                                        3,551,959       2,147,525                317,271
Non-equity                                                    2,250,000       4,750,000              4,750,000

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

	                                                      5,801,959       6,897,525              5,067,271

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




CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED
31 DECEMBER 2008

                                                             Unaudited           Audited           Unaudited
                                                        6 months ended   15 months ended      6 months ended
                                                      31 December 2008      30 June 2008   30 September 2007
                                                                     £                 £                   £
			
Cash flow from operating activities                        (51,208,075)      (56,631,192)            952,467
			
Returns on investments and servicing of finance               (621,562)         (316,463)           (286,880)
			
Capital expenditure and financial investment                (3,392,019)       (5,289,014)         (4,160,655)

                                                      -----------------  ----------------   -----------------
			
Cash outflow before financing                              (55,221,656)      (62,236,669)         (3,495,068)
			
Financing                                                            -       119,174,777           4,458,816

                                                      -----------------  ----------------   -----------------			
(Decrease)/ increase in cash for the period                (55,221,656)       56,938,108             963,748

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


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 31 DECEMBER 2008

                                                             Unaudited           Audited           Unaudited
                                                        6 months ended   15 months ended      6 months ended
                                                      31 December 2008      30 June 2008   30 September 2007
                                                                     £                 £                   £
			
			
Shareholders' equity at beginning of period                  6,897,525         4,555,846            (194,154)
			
Share issue                                                      9,452           426,000             426,000
			
Share based payment                                             38,084            90,991                   -
			
Retained profit for period                                     997,261         2,006,780             181,961
			
Exchange differences on translation of foreign
 operations                                                    159,637          (182,092)            (96,537)
			
Investment in own shares                                    (2,300,000)                -                   -

                                                      -----------------  ----------------   -----------------
			
Shareholders' equity at end of period                        5,801,959         6,897,525             317,270

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



NOTES TO THE UNAUDITED INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 31 DECEMBER 2008

1.  EARNINGS PER SHARE

Basic  earnings per ordinary share of 3.83 pence (5.75 cents); (fifteen months ended 30 June 2008: 8.51 pence (17.02
cents)); six  months  ended 30 September 2007: 0.81 pence (1.62 cents) is calculated using the Group profit for the
period after taxation of £997,261 (15 months ended 30 June 2008: £2,006,780) six months  ended 30 September 2007:
£181,961) and the weighted average number of shares in issue of 26,020,871 (fifteen months ended 30 June 2008:
23,575,579) (six months ended  30  September  2007: 22,403,670).  

Diluted earnings  per  share is calculated on the basis of the weighted average number of shares in issue  plus
potential  ordinary  shares of 38,447,568 (fifteen months ended 30 June 2008: 43,164,615), six months ended 30
September 2007:41,603,671

The weighted average number of shares is calculated by time-apportioning each share in issue during the period.

2.  SHARE CAPITAL

1. An Employee Benefit Trust was established in October 2008.  The trust has acquired £3 million preference shares
   previously held by Armadillo Investments Limited (in liquidation) in return for a cash payment of £1.5 million and
   the return of the 1.6 million shares the Group held in Armadillo, valued.  Both the cash payment and the share
   value of £800k were loaned to the trust at a nominal interest rate. The trust has requested, during the current
   period, the conversion of the majority of the preference shares into 10 million ordinary shares in the Group. In
   accordance with Urgent Issues Task Force Abstract 38, the assets and liabilities of the Employee Benefit Trust have
   been consolidated and the company's investment in its own shares, at a cost of £2,300,000, have been shown as a
   deduction in equity shareholders' funds. 

2. 112,500 share options were exercised during the period, 62,500 at £0.15p and 50,000 at £0.205.  In addition,
   700,000 new options were issued during the period, including 300,000 to staff.

3. As at 31 December 2008, the shareholders approved a 5:1 consolidation of the ordinary share capital which was
   approved.  

Details of the share capital of the Company both pre and post this consolidation are shown below. 


SHARE CAPITAL -

PRE CONSOLIDATION

Authorised                             Nominal       Number        Value   Nominal       Number        Value
                                         value    31 Dec 08    31 Dec 08     value    30 Jun 08    30 Jun 08
£1 convertible redeemable
 preference shares                       £1.00    6,000,000   £6,000,000     £1.00    6,000,000   £6,000,000
Ordinary shares                          £0.05  513,184,000  £25,659,200     £0.05  513,184,000  £25,659,200
Deferred shares                          £0.45   13,184,000   £5,932,800     £0.45   13,184,000   £5,932,800
                                                             -----------                         -----------
                                                             £37,592,000                         £37,592,000
                                                             -----------                         -----------
                                                             -----------                         -----------

Allotted and called up						
						
£1 convertible redeemable
 preference shares                       £1.00      500,000     £500,000     £1.00    3,000,000   £3,000,000
Ordinary shares                          £0.05   34,466,500   £1,723,325     £0.05   24,354,000   £1,217,700
Deferred shares                          £0.45   13,184,000   £5,932,800     £0.45   13,184,000   £5,932,800
                                                             -----------                         -----------
                                                              £8,156,125                         £10,150,500
                                                             -----------                         -----------
                                                             -----------                         -----------

SHARE CAPITAL -

POST CONSOLIDATION						
						
Authorised                             Nominal       Number        Value   Nominal       Number        Value
                                         value    31 Dec 08    31 Dec 08     value    30 Jun 08    30 Jun 08

£1 convertible redeemable
 preference shares                       £1.00    6,000,000   £6,000,000     £1.00    6,000,000   £6,000,000
Ordinary shares                          £0.25  102,636,800  £25,659,200     £0.05  513,184,000  £25,659,200
Deferred shares                          £0.45   13,184,000   £5,932,800     £0.45   13,184,000   £5,932,800
                                                             -----------                         -----------
                                                             £37,592,000                         £37,592,000
                                                             -----------                         -----------
                                                             -----------                         -----------
	
Allotted and called up						
						
£1 convertible redeemable
 preference shares                       £1.00      500,000     £500,000     £1.00    3,000,000   £3,000,000
Ordinary shares                          £0.25    6,893,300   £1,723,325     £0.05   24,354,000   £1,217,700
Deferred shares                          £0.45   13,184,000   £5,932,800     £0.45   13,184,000   £5,932,800
                                                             -----------                         -----------
                                                              £8,156,125                         £10,150,500
                                                             -----------                         -----------
                                                             -----------                         -----------
						

3.  TURNOVER

Turnover represents the invoiced value, net of Value Added Tax, of goods sold and services provided to customers.

Licence fee revenue is recognised as and when the film in question is delivered to the respective territories.
However, where an advance is paid upon the signing of an agreement, and this is non-refundable, it is recognised upon
the signing of the agreement.

Revenue that equates to a share of gross receipts of films is recognised as income as and when the group is notified
of the amounts that are due to them. 

4.  OTHER MATTERS

The results  for  the  six  months  ended  31 December 2008, which are neither audited nor reviewed by the auditors,
have been  prepared  on  the basis of the accounting policies adopted for the fifteen months ended 30 June 2008 , as
set out in the group?s annual report and accounts after taking into account any  accounting standards issued since
that date, none of which have resulted in any changes to the accounting policies of the group.

The results for the fifteen months ended 30 June 2008 are an abridged version of the Group's full  accounts for that
period, which carry an unqualified auditors' reports and do not contain any  statements under S237 (2) or (3) of the
Companies Act 1985.  The full accounts for the fifteen months ended 30 June 2008 have been filed with the Registrar of
Companies.

The Board of Directors approved the interim results on 18th February 2009.

5.  STATEMENT OF NON STATUTORY FINANCIAL STATEMENTS

The financial information presented in these non-statutory interim financial statements does not constitute statutory
accounts for the purposes of the Section 240 of the Companies Act 1985 (as amended) of England and Wales for the
period ended 31 December 2008.

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