Papa Entertainment PLC

LSE : PAPP


December 23, 2013 02:00 ET

Interim results

Papa Entertainment plc

("Papa Entertainment" or the "Company")

Interim results

Papa Entertainment Plc (ISDX:PAPP), a specialist UK group focused on the music and media industries, today
announces its final audited results for the six month period ended 30 September 2013 (the "Period").

Highlights

--  Revenues for the Period totalled GBP 559,776 (9 months to 30 September
    2012: GBP 1.3k)
--  Loss for the Period after taxation was GBP 1.5 million (loss for 9
    months to 30 September 2012: GBP 517,000)
--  Mission Group's recording artists have performed well and the
    modernisation programme of its recording studio facilities has been
    completed
--  Post-period end signed a financially significant one year entertainment
    engagement agreement with The Las Vegas Hotel & Casino ("LVH") for its
    Raiding The Rock Vault ("RTRV") show
--  According to Trip Advisor, RTRV is the Number 2 ranked performance out
    of 186 in Las Vegas (No.1 being Jersey Boys) and ranked Number 5 out of
    546 attractions in Las Vegas

Commenting on the Interim results, Korda Marshall, Non-Executive Chairman of Papa Entertainment plc, said: "The
Company has made excellent progress in the period and according to recent data from Trip Advisor, RTRV has now
established itself as one of the most successful and well recognised shows in Las Vegas. With the new LVH
contract signed, we look to the future with increasing confidence.

"Whilst the majority of the Company's focus has been on the successful RTRV project in Las Vegas, good progress
has also been made at Mission Group. A number of exciting new artists have released singles in the period and
they have performed well in their respective charts. The Company remains confident that it will acquire
additional catalogues in 2014 and will continue to support its existing artists.

"The Board of Papa Entertainment believes that 2014 will be an extremely exciting year for the Company and for
our shareholders. The Board continues to view the future with increased optimism."

- Ends -

For further information, please contact:

Papa Entertainment plc
Harry Cowell, Chief Executive                      Tel: +44 (0) 20 8977 0632
                                        http://www.papaentertainmentplc.com/
                                                                          
Allenby Capital Limited
Alex Price / Michael McNeilly                      Tel: +44 (0) 20 3328 5656

Media enquiries:

Abchurch
Henry Harrison-Topham / Jamie Hooper               Tel: +44 (0) 20 7398 7719
jamie.hooper@abchurch-group.com               http://www.abchurch-group.com/

Notes to Editors

Papa Entertainment was incorporated as a vehicle for the purpose of acquiring companies or businesses engaged
in the entertainment, music and media industries. Papa Entertainment acquired Mission Entertainment Group
Limited and its subsidiaries (the "Mission Group") in July 2012. Papa Entertainment is led by its Chief
Executive Officer, "Sir" Harry Cowell, who has over 25 years' experience in the music industry.

The Company's Non-Executive Chairman is Korda Marshall, who has during his career signed artists, directed
major label A&R departments, produced, executive produced and been a managing director of three recording
companies and has worked with performers including Take That, MUSE, Ash, Paul Oakenfold, the Eurythmics, Dave
Stewart, Peter Andre, Garbage, James Blunt, Gnarls Barkley and The Darkness, personally signing or negotiating
with several of these artists. Korda's signings include Mercury Music Prize winning band Alt-J.

Simon Napier-Bell, a Non-Executive Director of Papa Entertainment, has enjoyed a long career in the
entertainment industry, commencing in the 1960s, with notable highlights including the management of well-known
artists such as "Wham!" and the "Yardbirds" and the co-writing of the No. 1 Hit Single "You don't have to say
you love me" for Dusty Springfield.

The Mission Group is a group of music production and publishing companies with studio and office facilities in
Kingston-Upon-Thames, South West London. The Mission Group's business consists of the delivery of music to the
listener, incorporating writing, recording, marketing and distribution, label management and production. The
Company's policy through concentrating all the Group's operations under one roof and utilising its own studios
is to consolidate the functions of music production and publishing in-house in order to manage costs and to
integrate functions that would otherwise be subject to external contracting. Various contracts, artists,
projects and agreements are signed to the Mission Group's companies. Papa Entertainment was admitted to the
ISDX Growth Market on 14 September 2012. For more information on the Company please visit:
www.papaentertainmentplc.com

Chairman and Chief Executive's Statement

On behalf of Papa Entertainment, a specialist UK group focused on the music and media industries, we are
delighted to present our interim results for the six month period ended 30 September 2013.

Financial Review

Turnover for the six month period ended 30 September 2013 was GBP 559,776 (nine months to 30 September 2012:
GBP 1.3k) and the loss after taxation was GBP 1.5 million (loss for nine months to 30 September 2012: GBP
517k). As at 30 September 2013, cash on the balance sheet was GBP 241,591k (as at 30 September 2012: GBP
35,176k).

Raiding the Rock Vault ("RTRV")

On 23 December 2013, the Company announced that its wholly owned subsidiary, Rock Vault Tours LLC ("RVT"),
signed a new and much improved entertainment engagement agreement with The Las Vegas Hotel & Casino ("LVH") for
its RTRV show to remain at the LVH for a period of one year with a sixty day termination clause for either
party. The first returning show at the LVH is scheduled for 24 January 2014.

The key terms of this new agreement, which are financially significant for the Company, are that LVH has agreed
to pay the hotel's own labour costs as well as the hotel's direct costs throughout the whole of 2014. In
addition, LVH has also agreed to purchase a minimum of 150 tickets for use by their casino clientele for each
show during the one year contractual period.

The new agreement also provides that RTV will only be responsible for the show's royalties and its own direct
costs in running the show.

RTRV concerts are performed in the Showroom at the LVH. The Showroom seats approximately 1,500 people and the
hotel has 2,956 rooms and 305 suites in total. The two hour long concert narrates the story of classic rock and
features songs by The Who, The Doors, Jimi Hendrix, Free, The Eagles, Led Zeppelin, Bryan Adams, Van Halen,
Deep Purple, Queen, Kiss and The Rolling Stones.

Since the first RTRV show on 18 March 2013, the RTRV band has now performed over 100 concerts in the Showroom
of the LVH. The Directors estimate that attendances at these concerts have ranged from over 300 to in excess of
1,500 audience members.

Papa Entertainment has been conducting merchandising activities in relation to the RTRV concerts, which has
principally involved the sale of branded items, such as t-shirts, CD albums, posters and signed guitars.

In addition to the normal RTRV shows, the band has also been performing certain one-off concerts with special
guest musicians and vocalists, under the name of the "RTRV Icon Series". This format introduces well recognised
artists to sing with the RTRV band for a number of nights which are heavily promoted. The first of these iconic
guest acts to perform back in April 2013 was Bobby Kimball, the former lead singer of US rock band Toto. In May
2013, Joe Lynn Turner, formerly of Deep Purple performed and he was soon followed by Mickey Thomas, the former
lead singer of Starship in July 2013. In September 2013, Jon Anderson, the English singer-songwriter and multi-
instrumentalist musician best known as the original lead vocalist in the progressive rock band Yes, performed
for five nights and this was swiftly followed by Lou Gramm, best known as a former lead vocalist of the hard
rock band Foreigner, who performed for five nights in October 2013.

The Directors believe that the "Icon Series" has and will continue to assist in driving further footfall to the
already successful RTRV show at the LVH and in turn increase the shows' standing in Las Vegas whilst improving
revenues taken through ticketing and merchandise sales.

Since RTRV was launched at the LVH on 18 March 2013, the show has performed well on a limited and well managed
budget. According to Trip Advisor, RTRV is the Number 2 ranked performance out of 186 in Las Vegas (No.1 being
Jersey Boys) and ranked Number 5 out of 546 attractions in Las Vegas. RTRV continues to attract ever increasing
audiences and the Board look to 2014 with confidence when the show recommences after the Christmas break in
late January 2014.

Mission Entertainment Group Limited

Separate from RTRV, on 24 July 2012 the Company acquired music production and publishing company, Mission
Entertainment Group Limited ("Mission Group"). Since the acquisition, good progress has been made and the
Company is pleased to report that two of Mission Group's recording acts have, post-period end, released music
singles. The first single released following Papa Entertainment's acquisition of Mission Group was by an act
called "Dirty Sneekers UK" with the song "The Sound". The song featured Sweetie Irie and went into the Music
Week Commercial Top 30 at Number 9 and Number 18 in the Music Week Club Top 40 in October 2013. The second
Music Group single released was the latest single by UK rapper Ayo Beatz: "Alive". "Alive" went into the Music
Week Commercial Pop Top 30 at Number 11 in December 2013 and Papa Entertainment plans a full release in Q1
2014.

In June 2013, the Company's subsidiary Mission Publishing Limited ("MPL"), entered into a joint publishing
venture with Notting Hill Music (UK) Limited ("NHM") (the "Joint Publishing Venture"). NHM is part of the
international Notting Hill Music Group. During the term of the Joint Publishing Venture, MPL will grant NHM the
exclusive "first look" rights to publish or sub-publish writers introduced by MPL.

The Joint Publishing Venture is for an initial term of two years, with an option to be extended for a further
two years, subject to the achievement of a financial milestone. Income earned from the publishing rights of
writers introduced to the Joint Publishing Venture is to be shared equally between MPL and NHM. It is intended
that the agreements entered into between writers and MPL and NHM under the Joint Publishing Venture will be for
a term of 15 years, unless agreed otherwise.

The Directors believe that this Joint Publishing Venture should act as a replacement for the Company's previous
publishing joint venture arrangements with Imagem CV.

During the Period Mission Group completed a modernisation programme of its recording studio facilities at the
Fairlight Mews Studios in Kingston-upon-Thames. The completion of this upgrade now means that Mission Group's
artists can now utilise modern, up to date recording facilities to produce their tracks for release.

Outlook

The Company has made excellent progress in the period and according to recent data from Trip Advisor, RTRV has
now firmly established itself as one of the most successful and well recognised shows in Las Vegas. With the
new LVH contract signed, the Board looks to 2014 with confidence when RTRV resumes in late January 2014. The
Board is looking at the possibility of launching, in addition to the Las Vegas show, a touring RTRV band in the
Far East which will produce an additional revenue stream for the Company.

Whilst the majority of the Company's focus has been on the successful RTRV project in Las Vegas, as noted
above, good progress has also been made at Mission Group. The Company remains confident that it will acquire
additional catalogues in 2014 and will continue to support its existing artists.

The Board of Papa Entertainment believes that 2014 will be an extremely exciting year for the Company and for
its shareholders. The Board views the future with increased optimism.

Korda Marshall                                                  Harry Cowell
Chairman                                                     Chief Executive
23 December 2013                                            23 December 2013

Consolidated profit and loss account
For the six months ended 30 September 2013

                                    Unaudited      Unaudited        Audited
                                  6 months to    9 months to   15 months to
                          Note      30 Sep-13      30-Sep-12      31-Mar-13
                                          GBP            GBP            GBP

Continuing operations
----------------------------------------------------------------------------

Turnover                              559,776          1,285         31,283

Cost of sales                      (1,382,580)       (20,550)      (230,837)
                               ---------------------------------------------

Gross loss                           (822,804)       (19,265)      (199,554)

Administrative expenses              (726,025)      (211,601)      (480,067)
Deemed cost of listing                      -       (278,969)      (278,969)
                               ---------------------------------------------

Total administrative
 expenses                            (726,025)      (490,570)      (759,036)


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

Operating loss                     (1,548,829)      (509,835)      (958,590)
                               ---------------------------------------------

Interest payable and
 similar charges                            -         (7,462)       (10,407)
                               ---------------------------------------------

Loss before taxation               (1,548,829)      (517,297)      (968,997)

Tax on loss on ordinary
 activities                  3              -              -              -

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

Loss for the period after
 taxation                          (1,548,829)      (517,297)      (968,997)
                               ---------------------------------------------
                               ---------------------------------------------

Basic and diluted loss per
 share (pence)               4          (2.15)         (0.79)         (1.42)


There are no recognised gains or losses other than the loss for the above
financial period.

Consolidated balance sheet

                                    Unaudited      Unaudited        Audited
                                        As at          As at          As at
                          Note      30-Sep-13      30-Sep-12      31-Mar-13
                                          GBP            GBP            GBP
Assets
Fixed assets
Tangible assets                        73,502         65,997         75,435
                               ---------------------------------------------

Total fixed assets                     73,502         65,997         75,435
                               ---------------------------------------------

Current assets
Stocks                                531,829              -        547,050
Debtors                               223,868        316,758        233,794
Cash at bank and in hand              241,591         35,176        144,601
                               ---------------------------------------------

Total current assets                  997,288        351,934        925,445

Creditors: amounts falling
 due within one year                 (409,961)      (299,599)      (281,473)
                               ---------------------------------------------

Net current assets                    587,327         52,335        643,972
                               ---------------------------------------------

Total assets less current
 liabilities                          660,829        118,332        719,407
                               ---------------------------------------------

Creditors: amounts falling
 due after more than one
 year                              (2,986,241)      (461,450)    (1,495,990)
                               ---------------------------------------------

Total net liabilities              (2,325,412)      (343,118)      (776,583)
                               ---------------------------------------------
                               ---------------------------------------------

Equity
Capital and reserves
Called up share capital      5        720,563        711,023        720,563
Share premium account               1,973,412      1,964,662      1,973,412
Reverse acquisition
 reserve                           (2,102,490)    (2,102,435)    (2,102,490)
Profit and loss account            (2,916,897)      (916,368)    (1,368,068)
                               ---------------------------------------------

Shareholders' funds                (2,325,412)      (343,118)      (776,583)
                               ---------------------------------------------
                               ---------------------------------------------

Notes to the interim results

Six months ended 30 September 2013

1. General information

Papa Entertainment was incorporated on 12 May 2011 as a vehicle for the purpose of acquiring companies or
businesses engaged in the entertainment, music and media industries. Papa Entertainment acquired Mission
Entertainment Group Limited ("Mission") on 24 July 2012, the purchase consideration being satisfied through the
issue to the vendors of Mission of new Ordinary Shares in Papa Entertainment. Mission and its subsidiaries
("the Mission Group") is a group of music production and publishing companies with studio and office facilities
in Kingston-Upon-Thames, South West London.  Its business consists of the delivery of music to the listener,
incorporating writing, recording, marketing and distribution, label management and production and the
production of musical shows. No interim dividend is to be paid in relation to the six months to 30 September
2013.

2. Basis of preparation

The interim financial information is unaudited and does not constitute statutory financial statements as
defined in Section 434 of the Companies Act 2006.  The information in this announcement has not been reviewed
by the Company's auditor. The financial information is prepared on the historical basis of accounting and in
accordance with applicable United Kingdom law and accounting standards. Except as disclosed below, the same
accounting policies, presentation and methods of computation have been followed in this unaudited interim
financial information as those which were applied in the preparation of the financial statements of Mission for
the period ended 31 March 2013, upon which the auditors issued an unqualified opinion, but included in emphasis
of matter in respect of going concern, and which have been delivered to the registrar of companies. Going
concern The financial information has been prepared assuming the Group will continue as a going concern. Under
the going concern assumption, a group is ordinarily viewed as continuing in business for the foreseeable future
with neither the necessity of liquidity, nor ceasing trading or seeking protection from creditors pursuant to
laws or regulations.  In assessing whether the going concern assumption is appropriate, management takes into
account all available information for the foreseeable future, in particular for the twelve months from the date
of approval of the financial information. Management have a reasonable expectation that the entity has adequate
resources to continue in its operational exercises for the foreseeable future and has adopted the going concern
basis of accounting in preparing the financial information. Eoghan Hynes, a director and shareholder of the
Company, has undertaken to the Company that he would support and continue to support the Group financially, as
required so that the Group maintains adequate financial and working capital resources. The interim financial
information for the period ended 30 September 2013 was approved by the Board on 20 December 2013.

3. Taxation

No charge to taxation arises in the six months ended 30 September 2013 (31 March 2013: nil).

4. Loss per share

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the period.

A reconciliation is set out below:

                                                                 Audited 15
                                  6 months to    9 months to      months to
                                    30-Sep-13      30-Sep-12      31-Mar-13
                               ---------------------------------------------
Basic and diluted loss per
 share

Loss for the period            GBP (1,548,829)  GBP (517,297)  GBP (968,997)

Weighted average number of
 shares (number)                   72,056,290     65,770,618     68,424,483

Loss per share (pence)                  (2.15)         (0.79)         (1.42)

In calculating the weighted average number of ordinary shares outstanding
(the denominator of the earnings per share calculation) during the period in
which the reverse acquisition occurs:

a.  the number of ordinary shares outstanding from the beginning of that
    period to the acquisition date shall be computed on the basis of the
    weighted average number of ordinary shares of the legal acquiree
    (accounting acquirer) outstanding during the period multiplied by the
    exchange ratio established in the merger agreement; and
b.  the number of ordinary shares outstanding from the acquisition date to
    the end of that period shall be the actual number of ordinary shares of
    the legal acquirer (the accounting acquiree) outstanding during that
    period.

The basic earnings per share for each comparative period before the acquisition date presented in the
consolidated financial statements following a reverse acquisition shall be calculated by dividing:

a.  the profit or loss of the legal acquiree attributable to ordinary
    shareholders in each of those periods by
b.  the legal acquiree's historical weighted average number of ordinary
    shares outstanding multiplied by the exchange ratio established in the
    acquisition agreement.

There are no current dilutive instruments in issue.

5. Share capital

                                                                30 September
                                                                        2013
                                                                         GBP
Called up share capital issued and fully paid

72,056,290 Ordinary shares of GBP 0.01 each                          720,563
                                                              --------------

                                                        Share          Share
                                     Number of        Capital        Premium
                                        Shares            GBP            GBP

Ordinary shares of GBP 0.01
 issued at 1 April 2013 and at
 30 September 2013                  72,056,290        720,563      1,973,412
                                --------------------------------------------


6. Reconciliation of movement in shareholders' funds


                                            Reverse    Profit &
                        Share     Share acquisition        loss
                      capital   premium     reserve     account       Total
                      ------------------------------------------------------

At 1 January 2012      64,002    16,000     206,633    (399,071)   (112,436)
Loss for the period         -         -           -    (968,997)   (968,997)
Issue of shares on
 acquisition          640,021 1,920,062  (2,309,068)          -     250,960
Conversion of loan
 notes                  7,000    28,600           -           -      35,600
Issue of other shares   9,540     8,750           -           -      18,290

                      ------------------------------------------------------
Balance at 31 March
 2013                 720,563 1,973,412  (2,102,490) (1,368,068)   (776,583)

Loss for the period         -         -           -  (1,548,829) (1,548,829)

                      ------------------------------------------------------
Balance at 30
 September 2013       720,563 1,973,412  (2,102,490) (2,916,897) (2,325,412)
                      ------------------------------------------------------

- Ends -

Contact Information

  • Papa Entertainment PLC