Interim Results - 6 Months to 31 December 1999

Media Content PLC 7 April 2000 MEDIA CONTENT PLC INTERIM REPORT SIX MONTHS ENDED 31 DECEMBER 1999 CHAIRMAN'S STATEMENT Dear Shareholders I am pleased to announce Media Content PLC's results for the six month period ended 31 December 1999; its first full six months of trading since the reverse flotation of Media Content Limited in March 1999. Although still a very young company, Media Content PLC has been able to establish itself as a significant independent player in the sector. Following are highlights of the company's recent activities through its wholly owned subsidiary Media Content Sports Media Advisors Limited, much of which have not yet impacted the company's revenues: - The New Zealand Rugby Football Union, the governing body of New Zealand Rugby and of the world-famous All- Blacks has appointed Media Content to act as its media rights advisor for all television and media issues, in an agreement that includes a priority investment opportunity for Media Content in any eventual NZRFU media spin-offs; - In pioneering the move to find new revenue streams for rightsholders, Media Content has secured a contract with AirTV, a US-based company which plans to provide a network of live programming to airplanes; - As part of Media Content's ongoing selected-markets partnership with World Wrestling Federation Entertainment, Inc. ('WWFE'), one of the most successful sports entertainment franchises in the world and itself a recent NASDAQ IPO, a contract to launch WWFE programming in France was signed with Canal Plus, Europe's biggest pay TV company; - Media Content is acting on behalf of other rightsholders, such as the Sydney 2000 Paralympics, whereby it is contracted to carry out a global sales campaign; - The company continues to advise The International Football Channel on a fee and equity basis and undertook to advise on securing the rights necessary for the March 8th launch of this exciting project The ability to build value as a partner and adviser to sports broadcasters and rightsholders is being validated by the scope of the Media Content PLC group's current activities in the traditional sports media rights market. Moreover, the group is fortunate enough to be in the middle of an exploding market and is moving swiftly to secure its position as one of the key participants in the shift to the digital economy for the sports media sector. The Board has reasoned that international markets are poised for tremendous growth in their respective digital economies - whether via the internet or digital television - and that sports-related content will play a pivotal role in the development of many enterprises just as it has for Pay TV. In its aims to build shareholder value, the Media Content PLC group maintains a bias for building equity stakes in high growth businesses - from both the old and new media spheres. Turnover for the six months to December 1999 was £96,000, and expenses were £284,000, resulting in an operating loss of £188,000. Media Content PLC has successfully raised further capital in the reporting period to fuel its growth strategy, using the proceeds to grow organically and to consider and develop a profile of strategic partnerships and investments. In this vein, investment subsidiary Media Content Development Limited recently announced its acquisition of a 25% stake in the new sports webcasting start-up, Sportev Limited. Finally, it is with great pleasure that I highlight the February 7th 2000 announcement that Leonard M. Fertig has joined the board of Media Content PLC as a Non-Executive Director. Len is the founder and former CEO of Central European Media Enterprises, which he successfully listed on NASDAQ and helped to grow its market capitalisation to US$750m, and is a key player on the European media scene. Also included in the February 7th 2000 announcement was the retirement of Michael Edelson from the Board of Media Content PLC, whom I would like to thank for his guidance and service. In all, I am confident that Media Content PLC will continue to stake its claim to an important part of this sports media marketplace. Robert Montgomery - Chairman PROFIT AND LOSS ACCOUNT For 6 months to 31 December 1999 Note 6 months to Period ended Period ended 31 December 31 December 30 June 1999 1998 1999 (unaudited) (unaudited) (audited) £'000 £'000 £'000 TURNOVER 2 96 - 41 ___________ ___________ ____________ Administrative expenses Amortisation of goodwill 3 - - (241) Amount written off investments 3 - (300) - Other administrative expenses (284) (163) (593) ___________ ___________ ____________ (284) (463) (834) ___________ ___________ ____________ OPERATING LOSS (188) (463) (793) Loss on disposal of subsidiary 3 - - (300) Interest receivable and similar income 5 20 33 Interest payable and similar charges - - (1) ___________ ___________ ____________ LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (183) (443) (1,061) Tax charge on loss on ordinary activities - - - ___________ ___________ ____________ LOSS ON ORDINARY ACTIVITIES AFTER TAXATION BEING RETAINED LOSS (183) (443) (1,061) =========== =========== ============ Basic loss per share (pence per share) 4 (0.0003) (0.0055) (0.0048) =========== =========== ============ Diluted loss per share (pence per share) 4 (0.0003) (0.0055) (0.0048) =========== =========== ============ All of the company's operations were classified as acquisitions in the period. There were no other recognised gains or losses other than shown above. BALANCE SHEET Note At At At 31 December 31 December 30 June 1999 1998 1999 (unaudited) (unaudited) (audited) £'000 £'000 £'000 FIXED ASSETS Intangible assets 1 4,574 - 4,574 Tangible assets 24 - 27 Investments 1 47 250 - ___________ ___________ ____________ 4,645 250 4,601 CURRENT ASSETS Debtors 133 9 151 Cash at bank and in hand 1,666 747 440 ___________ ___________ ____________ 1,799 756 591 CREDITORS: amounts falling due within one year (21) (32) (45) ___________ ___________ ____________ NET CURRENT ASSETS 1,788 724 546 ___________ ___________ ____________ TOTAL ASSETS LESS CURRENT LIABILITIES 6,423 974 5,147 =========== =========== ============ CAPITAL AND RESERVES Called up share capital 5 6,138 985 5,812 Share premium 5 1,529 432 396 Profit and loss account (1,244) (443) (1,061) ___________ ___________ ____________ EQUITY SHAREHOLDERS' FUNDS 6,423 974 5,147 =========== =========== ============ RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS Note 6 months to Period ended Period ended 31 December 31 December 30 June 1999 1998 1999 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Loss on ordinary activities after taxation (183) (443) (1,061) Shares issued in the period 1,459 1,417 6,208 ___________ ___________ ____________ 1,276 974 5,147 Opening Shareholders' funds 5,147 - - ___________ ___________ ____________ Closing shareholders' funds 6,423 974 5,147 =========== =========== ============ NOTES TO THE UNAUDITED INTERIM RESULTS 1. ACCOUNTING POLICIES With the following exceptions, the interim results have been prepared on a basis consistent with the accounting policies stated in the 30 June 1999 Annual Report and Financial Statements: Goodwill With effect from 1 January 2000 the trade of Media Content PLC was transferred back to Media Content Sports Media Advisors Limited (formerly Media Content Services Limited). Following this transfer the goodwill that had previously arisen has been eliminated from the accounts and transferred back to cost of investment and thus will not arise in the next Annual Report and Financial Statements. Goodwill therefore has not been amortised in this Interim Report. Investments Investments held as fixed assets are stated at cost less provision for any permanent diminution in value. Investment acquisitions in the current period relate to a minority interest acquired in Bedford Communications Inc., a company incorporated in Canada. Basis of preparation This Interim Report does not constitute full accounts within the meaning of Section 240 of the Companies Act 1985. The results for the period ended 30 June 1999 are extracted from the latest audited accounts approved by the Members at the Annual General Meeting and delivered to the Registrar of Companies. The report of the auditors, Deloitte & Touche, contained in these accounts, was unqualified. The accounts for the six months ended 31 December 1999 and 31 December 1998 are neither audited nor reviewed. Copies of this interim statement are available for inspection at the Company's registered office. 2. ANALYSIS OF TURNOVER, OPERATING LOSS AND NET ASSETS All of the company's operations derive from the provision of sports media advice. A geographical analysis of operations is given below: Operating Net Turnover loss Assets '000 £'000 £'000 Geographical analysis by origin United Kingdom 6 months to 31 December 1999 96 (188) 6,423 =========== =========== ============ Period ended 31 December 1998 - (463) 974 =========== =========== ============ Period ended 30 June 1999 41 (793) 5,147 =========== =========== ============ Geographical analysis of turnover by destination North America 6 months to 31 December 1999 96 =========== Period ended 31 December 1998 - =========== Period ended 30 June 1999 41 =========== 3. EXCEPTIONAL ITEMS Amortisation of Goodwill The charge in the audited financial statements to 30 June 1999 represents the amortisation of the goodwill on the transfer of trade from Media Content Sports Media Advisors Limited (formerly Media Content Services Limited) to Media Content PLC. A charge has not been made this period as the trade was transferred back to Media Content Sports Media Advisors Limited (formerly Media Content Services Limited) with effect from 1 January 2000. Loss on disposal of subsidiary The loss on disposal of subsidiary in the audited financial statements to 30 June 1999 represents the disposal of Quaser Sports Limited. The acquisition was not consolidated into the group accounts as exemption was claimed under FRS 2 since the company had been held with a view to subsequent resale. Amount written off investments The amount written off investments in the unaudited profit and loss account for the period ended 31 December 1998 represents the provision for the permanent diminution in value of the investment in Quaser Sports Limited. 4. LOSS PER SHARE Basic The loss per share figure for the 6 months to 31 December 1999 is based on the loss for the period on ordinary activities after taxation of £ 183,000 (1998 interim : £ 443,000; 1998/99 final: £ 1,061,000). The weighted average number of shares used in the calculation of basic earnings per share was 582,798,913 shares ( 1998 interim 81,233,334 shares; 1998/99 final 221,787,899 shares). Diluted The weighted average number of shares used in the calculation of diluted earnings per share was 582,798,913 (1998 interim 81,233,334 shares; 1998/99 final 221,787,899 shares). The number of shares reflects the share options in existence at the respective dates. 5. SHARE CAPITAL On 13 December 1999, the company issued 2,500,000 ordinary shares of 1p each at 2p per share for cash following the exercise of share options. On 23 December 1999, the company placed 30,000,000 ordinary shares of 1p each at 5p per share for cash. 6. YEAR 2000 The directors continue to be alert to the potential risks and uncertainties surrounding the Year 2000 issue. As at the date of this report, the directors are not aware of any significant factors which have arisen, or that may arise, which will affect the activities of the business; however the situation is still being monitored. Any future costs associated with this issue cannot be quantified but are not expected to be significant. OFFICERS AND PROFESSIONAL ADVISORS DIRECTORS R B Montgomery (Chairman) J P de la Fuente (Chief Executive Officer) J F Denis (Managing Director) M Edelson (Non-Executive) (Resigned 7 February 2000) L Fertig (Non-Executive) (Appointed 7 February 2000) SECRETARY R B Montgomery REGISTERED OFFICE 29 Pall Mall Deposit 124-128 Barlby Road London W10 6BL BANKERS Barclays Bank PLC 27 Soho Square London W1A 4WA SOLICITORS Stephenson Harwood One St Paul's Churchyard London EC4M 8SH NOMINATED ADVISER REGISTRAR Apax Partners & Co. Capital Limited Northern Registrars Ltd 15 Portland Place Northern House London Woodsome House W1N 3AA Fenay Bridge Huddersfield HD8 0LA NOMINATED BROKER AUDITORS Rowan Dartington & Co. Limited Deloitte & Touche Colston Tower Hill House Colston Street 1 Little New Street Bristol London BS1 4RD EC4A 3TR

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