Papa Entertainment PLC
LSE : PAPP

December 21, 2012 08:24 ET

Unaudited Interim Results to 30 September 2012

21 December 2012

                                               PAPA ENTERTAINMENT PLC

                                      ("Papa Entertainment" or the "Company")

                                   Unaudited Interim Results to 30 September 2012



Statement by the Board

Papa Entertainment Plc today announces its unaudited interim results for the nine months to 30 September 2012 (the
"Period").  The interim results for the Period show a loss for the period after taxation of £517,297 (pro forma
unaudited period to 31-Dec-11 loss for the period after taxation: £233,773).

Since the admission of the Company's ordinary shares to trading on PLUS-quoted on 14 September 2012, Papa Entertainment
has actively progressed its "Rock Vault" project.  It assembled a live touring band, which performed under the name of
"Raiding The Rock Vault" at the inaugural Raiding The Rock Vault show, which successfully took place at the Mayan
theatre in Los Angeles on 29 November 2012.  The Directors hope to make further announcements in relation to the
development of Raiding The Rock Vault in due course.

Aside from the information above and contained within this announcement, there are no significant updates to the
information on Papa Entertainment presented in the Company's admission document dated 13 September 2012.



Papa Entertainment Plc
Interim results for the Nine Months to 30 September
2012


Consolidated profit and loss account                                                 
For the nine months ended 30 September                                               
2012                                                                                 
                                                                                                       Pro forma
                                                                       Unaudited                       Unaudited
                                                                     9 months to                       Period to
                                                                       30-Sep-12                       31-Dec-11
                                                                               £                               £

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

Turnover                                                                   1,285                           1,856

Cost of sales                                                            (20,550)                        (43,235)
                                                                     -------------------------------------------

Gross loss                                                               (19,265)                        (41,379)

Administrative costs                                                    (211,601)                       (192,394)
                                                                     -------------------------------------------

Underlying operating loss                                               (230,866)                       (233,773)
        
Deemed cost of listing                                        Note 7    (278,969)                              -
                                                                     -------------------------------------------

Operating loss                                                          (509,835)                       (233,773) 
                                                                     -------------------------------------------

Interest expense                                                          (7,462)                              -
                                                                     -------------------------------------------

Loss before taxation                                                    (517,297)                       (233,773)

Tax on loss on ordinary activities                            Note 3           -                               -

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

Loss for the period after taxation                                      (517,297)                       (233,773)
                                                                     -------------------------------------------
                                                                     -------------------------------------------

Basic and diluted loss per share (pence)                      Note 4       (0.79)                          (0.36)


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


Papa Entertainment Plc                                                                                           
Consolidated balance sheet                                                                             Pro forma
                                                                       Unaudited                       Unaudited
                                                                           As at                           As at
                                                                       30-Sep-12                       31-Dec-11
                                                                               £                               £
Assets                                                                                                           
Fixed assets                                                                                                     
Tangible assets                                                           65,997                          77,718
                                                                     -------------------------------------------

Total fixed assets                                                        65,997                          77,718
                                                                     -------------------------------------------

Current assets                                                                                                   
Debtors                                                                  316,758                         264,423
Cash at bank and in hand                                                  35,176                           6,989
                                                                     -------------------------------------------

Total current assets                                                     351,934                         271,412

Creditors: amounts falling due within one year                          (299,599)                       (333,036)
                                                                     -------------------------------------------

Net current assets / (liabilities)                                        52,335                         (61,624)
                                                                     -------------------------------------------

Total assets less current liabilities                                    118,332                          16,094
                                                                     -------------------------------------------

Creditors: amounts falling due after more than one year                 (461,450)                       (128,500)
                                                                     -------------------------------------------

Total net liabilities                                                   (343,118)                       (112,436)
                                                                     -------------------------------------------
                                                                     -------------------------------------------

Equity
Capital and reserves
Called up share capital                                       Note 5     711,023                          64,002
Share premium account                                                  1,964,662                          16,000
Reverse acquisition reserve                                           (2,102,435)                        206,633
Profit and loss account                                                 (916,368)                       (399,071)
                                                                     -------------------------------------------

Shareholders' funds                                                     (343,118)                       (112,436)
                                                                     -------------------------------------------
                                                                     -------------------------------------------


Notes to the interim results
Nine months ended 30 September 2012


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.

No interim dividend is to be paid in relation to the nine months to 30 September 2012.


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 December 2011, upon which the auditors issued an unqualified opinion, and which have
been delivered to the registrar of companies.

Basis of consolidation of Papa Entertainment

The consolidated financial statements incorporate the financial statements of Papa Entertainment and its subsidiaries.

On 24 July 2012, Papa Entertainment became the legal holding company of the Mission Group via a share for share
exchange.

UK company law and accounting standards do not envisage reverse acquisition accounting and to adopt that approach is a
departure from the law and accounting standards.  However, such a departure is required by both the Companies Act and
accounting standards where it is necessary to give a true and fair view.

The directors have developed an accounting policy for this transaction as explained further in note 7.

Furthermore, as Papa Entertainment was incorporated on 12 May 2011, while the Mission Group began trading in 2010, the
comparative profit and loss account and balance sheet are pro forma.

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.

The interim financial information for the period ended 31 July 2012 were approved by the Board on 21 December 2012.


3. Taxation

No charge to taxation arises in the period ended 30 September 2012 (31 December 2011: 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:


                                                                        9 months                       Pro forma
                                                                              to                       Period to
                                                                       30-Sep-12                       31-Dec-11

Basic and diluted loss per share

Loss for the period                                                    £(517,297)                      £(233,773)


Weighted average number of shares (number)                            65,770,618                      64,002,070

Loss per share (pence)                                                     (0.79)                          (0.36)


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 Sep
                                                                2012
                                                                   £

Called up share capital issued and fully paid
71,102,270 ordinary shares of £0.01 each                     711,023
                                                            --------
                                                            --------


                                                                                            Share           Share
                                                                         Number of        Capital         Premium
                                                                            Shares              £               £

Ordinary shares issued at 1 January 2012                                 6,400,200         64,002          16,000

Ordinary shares issued on 24 July 2012                                  64,002,070        640,021       1,920,062
Ordinary shares issued on 24 July 2012                                     700,000          7,000          28,000

-----------------------------------------------------------------------------------------------------------------
Called-up and fully paid ordinary shares of £0.01 each
at 30 September 2012                                                    71,102,270        711,023       1,964,062
-----------------------------------------------------------------------------------------------------------------

On 24 July 2012, the Company purchased the entire ordinary share capital of Mission, for an aggregate consideration of 
£2,560,083, which was satisfied by the issue of Ordinary Shares of £0.01 in the company at an issue price of £0.04 per 
Ordinary Share. 

On 24 July 2012, 700,000 Ordinary Shares were issued by the Company to noteholders of Convertible Unsecured Loan Notes 
following the receipt by the Company of their notice to exercise their right to convert the loan notes into shares 
pursuant to the loan note instrument.


6. Reconciliation of movement in shareholders? funds


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

At 1 September 2010                                        -           -              -      (165,298)   (165,298)
Reverse acquisition adjustment                        64,002      16,000        206,633             -     286,635
Loss for the period                                        -           -              -      (233,773)   (233,773)

                                                    -------------------------------------------------------------
Balance at 31 December 2011                           64,002      16,000        206,633      (399,071)   (112,436)

Loss for the period                                        -           -              -      (517,297)   (517,297)
Issue of shares on acquisition                       640,021   1,920,062              -             -   2,560,083
Reverse acquisition adjustment                             -           -     (2,309,068)            -  (2,309,068)
Conversion of loan notes                               7,000      28,600              -             -      35,600

                                                    -------------------------------------------------------------
Balance at 30 September 2012                         711,023   1,964,662     (2,102,435)     (916,368)   (343,118)

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


7. Reverse acquisition 

On 24 July 2012, Papa Entertainment became the legal holding company of the Mission Group via a share for share 
exchange.  The aggregate consideration was £2,560,083, which was satisfied by the issue of 64,002,070 ordinary shares 
of £0.01 each in Papa Entertainment at an issue price of £0.04 per ordinary share.

The accounting policy adopted by the directors applies the principles of UK GAAP in identifying the accounting 
acquirer and the presentation of the consolidated financial statements of the legal parent (Papa Entertainment) as a 
continuation of the accounting acquirer's financial statements (Mission).  This policy reflects the commercial 
substance of this transaction as follows:
- the original shareholders of the subsidiary undertakings are the most significant shareholders post initial public 
offering, owning 90 per cent of the issued share capital; and
- the cash consideration paid as part of the initial public offering returned equity to the original shareholders of 
the legal subsidiary undertaking and as a consequence diluted their shareholding to 10 per cent.

Accordingly, the following accounting treatment and terminology has been applied in respect of the reverse acquisition:

- the asset and liabilities of the legal subsidiary Mission are recognised and measured in the Group financial 
information at the pre-combination carrying amounts, without reinstatement to fair value;

- the retained earnings and other equity balances recognised in the Group financial information reflect the retained 
earnings and other equity balances of Mission immediately before the business combination, and the results of the 
period from 1 September 2010 to the date of the business combination are those of Mission.  However, the equity 
structure appearing in the Group financial information reflects the equity structure of the legal parent, including 
the equity instruments issued under the share for share exchange to effect the business combination;

- comparative numbers presented in the Group financial information are those reported in the financial statements of 
the legal subsidiary, Mission, for the period ended 31 December 2011.

- the cost of the combination has been determined from the perspective of Mission.  The fair value of the shares in 
Mission has been determined from the admission price of Papa Entertainment on admission to trading on PLUS for £0.04 
pence per share.  The value of the consideration shares was £2,560,083.  The fair value of the notional number of 
equity instruments that the legal subsidiary would have had to have issued to the legal parent to give the owners of 
the legal parent the same percentage ownership in the combined entity is 10 per cent of the market value of the shares 
after issues, being £256,008.  The difference between the notional consideration paid by Papa Entertainment for 
Mission and the Papa Entertainment net liabilities acquired of £22,961 has been recorded as goodwill, and charged to 
the consolidated profit and loss account at a cost of £278,969 with a corresponding entry to the reverse acquisition 
reserve.

Papa Entertainment  had no significant assets nor significant other liabilities or contingent liabilities of its own 
at the time that the share for share exchange took effect.


8. Events after the balance sheet date 

On 16 November 2012, the Company issued 250,000 ordinary shares of 1p each at an issue price of 4.5p per share for a 
consideration of £11,250.


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

                                                         --ENDS--

CONTACT DETAILS:

Enquiries:

Papa Entertainment Plc
Harry Cowell
Tel: +44 (0) 208 977 0632

SVS SECURITIES PLC - PLUS Corporate Adviser
Peter Ward / Alexander Brearley
+44 (0)20 7638 5600


ABOUT PAPA ENTERTAINMENT PLC:

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 has 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, Annie Lennox, 
Peter Andre, Garbage, James Blunt, Gnarls Barkley and The Darkness, personally signing or negotiating with several of 
these artists.  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.

For further information please refer to the Company?s website at: www.papaentertainmentplc.com

Contact Information

  • Papa Entertainment PLC