31 Mar 07

Interim results of Coolabi plc for the six months ended 31 December 2006

Chairman's Statement

Highlights:

• Turnover increased twenty fold to £717,530 for the 6 months to 31 December 2006 compared with the same period last year (31 December 2005: £33,530)
• Operating loss of £253,441* for the 6 months to 31 December 2006, a reduction of 21% compared with the same period last year (31 December 2005: £322,495)
• Acquisition of the children's division of Zenith Entertainment Limited
• Series II of King Arthur's Disasters delivered to ITV on time and within budget
• King Arthur's Disasters DVD from the BAFTA nominated first series released in the UK to coincide with launch of Series II on ITV
• New management team in place with a track record of delivering value for shareholders in this space
• Clear acquisition strategy developed and now actively being pursued
• Coolabi plc now primed for growth, principally by way of acquisition
• before one-off re-organisation costs, £333,441 after I present the company's interim results for the half year to 31 December 2006.

The arrival of Jeremy Banks as Chief Executive in September has brought renewed focus and vigour to the company. As a consequence, the period has been one of great change and will, I believe, be seen to have been the catalyst for the future success of the group.

Activity Update

Coolabi plc specialises in the ownership and creative management of high quality children's and family intellectual property assets and their global exploitation.

The group owns or controls the rights to a number of intellectual properties which are currently managed through one or both of Coolabi's two principal divisions, Production and Licensing.

Production

In September 2006, we announced the acquisition of the children's division of Zenith Entertainment Limited for up to £100,000. By 31 December 2006 the acquisition was already cash positive to Coolabi and we expect it to continue to make a positive contribution to the business for the foreseeable future.

As stated at the time, the acquisition included all rights to Zenith Entertainment's successful animated series of King Arthur's Disasters, co-produced with Neptuno Films in Spain. Featuring the voice talent of Matt Lucas, Rik Mayall, Morwenna Banks and Phil Cornwell, Series I of King Arthur's Disasters was first screened on ITV 1 in the UK in April 2005 where it was the highest rated new CiTV show that spring. Following the success of Series I, ITV commissioned a second series of 13 episodes each of half an hour duration.

At the time of the acquisition, a little over half of Series II had been delivered to the broadcaster. I'm pleased to report that Coolabi delivered the remaining episodes to our broadcast partners on time and within budget.

This exciting acquisition is, I hope, the first of a number that will, in short order, transform the company and its prospects.

We have also delivered a pilot episode for a new live action children's drama to Nickelodeon Junior on time and within budget during the period. All the costs of the pilot were met by Nickelodeon and have been expensed in full through the Profit & Loss Account. We will know whether we will receive a commission for a series later this year.

We own rights in and exploit and derive income from our library of completed feature films and television dramas. This library has been further enhanced by the acquisition of the children's division of Zenith Entertainment Limited.

Licensing

During the period under review, we started to make solid progress with a number of our properties. For example, amongst the properties we own or co-own, a material publishing deal is being concluded in the US that would see Scarlett & Crimson launched in that territory in 2008 and we in negotiations for a similar deal for that property in the UK.

Amongst the properties we represent, a Hammer interactive DVD Board Game entitled 'Forbidden Terrortory' was launched in November by our licensee, Britannia Games, which sold out in a number of stores over the Christmas period.

We also negotiated licensing agreements with The Cookie Jar Company, a Canadian based producer of children's programmes, to represent two of their properties in the UK - Doodlebops and Caillou.

Financial Review of the Period

Turnover of £717,530 was principally derived from commission and royalty revenues from our Licensing & Merchandising division and from production and distribution revenues from our Production division. This represented a twenty fold increase compared with the same period last year (31 December 2005: £33,530).

Importantly, all costs associated with the production and delivery of King Arthur's Disasters Series II and the production and delivery of the live action children's drama pilot to Nickelodeon Junior have been expensed in full through the Profit & Loss Account in the period.

These factors resulted in an adjusted Operating Loss of £253,441 for the 6 months to 31 December 2006, a reduction of 21 % compared with the same period last year (31 December 2005: £322,495). The adjusted Operating Loss is stated before the cost of the reorganisation of the management team undertaken in September last year.

In January 2007, Jeremy Banks subscribed £100,000 for 10 million new ordinary shares of 1 penny each at par.

Prospects

It is clear that whilst we own and/or represent some attractive properties and have a strong development slate, transformational growth in the short-term can only come from acquisitions.

Since September, we have devoted a great deal of time to developing the acquisition strategy of the group. Following the purchase of the children's business of Zenith Entertainment Ltd in September 2006, we have begun to progress a number of other potential opportunities.

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 31 DECEMBER 2006 
 

CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2006
 

CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 DECEMBER 2006

NOTES TO THE CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 DECEMBER 2006
 

COOLABI PLC NOTES TO THE INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2006

1. BASIS OF PREPARATION
   The financial information set out in this interim report does not comprise the company's statutory financial statements. Statutory financial statements for the previous financial year ended 30th June 2006 have been delivered to the Registrar of Companies. The auditors' report on those financial statements was unqualified and did not contain any statement under section 237(2) or (3) of the Companies Act 1985.
2. ACCOUNTING POLICIES
   The interim results have been prepared in accordance with applicable United Kingdom accounting standards and under the historical cost convention. The principal accounting policies of the Group have remained unchanged from the previous year.
3. TURNOVER
   The Group's turnover, net of value added tax, represents the amounts invoiced and accrued during the year in respect of commissions, production/licence fees and the exploitation of film and television rights to the extent that projects are completed or delivered during the year. All amounts are in respect of continuing operations.
4. EARNINGS PER SHARE
   The calculation of basic loss per ordinary share is based on the consolidated loss for the period after tax of £334,938 and 113,854,198 ordinary shares, being the weighted average number of shares in issue during the six month period ended 31st December 2006. The fully diluted loss per share has been calculated on the consolidated loss for the period after tax of £334,938 and 113,854,198 ordinary shares, being the weighted average number of ordinary shares in issue during the six month period ended 31st December 2006.

This information is provided by RNS
The company news service from the London Stock Exchange

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