Interim Results
Bright Things plc
08 December 2004
8 December 2004
BRIGHT THINGS PLC
Interim results for nine months to September 30th 2004
Content agreement signed with Entertainment Rights for 'Postman Pat' and 'Little
Red Tractor'
Business Highlights:
•Expenditure in line with expectations
•Development of console on schedule
•Content agreement announced today with Entertainment Rights
•Content Agreements in place with Chorion and BBC
Bright Things PLC is a developer of an educational games console and software
for the pre-school market. It has signed content agreements with rights holders
BBC Worldwide and Chorion to create titles based on characters including Noddy
(R), Balamory(TM) and the Teletubbies(R).
Today, Bright Things PLC is announcing that it has signed an agreement with
Entertainment Rights Plc ('ER'), one of the UK's fastest-growing independent
media groups specialising in children's and family programming, characters and
brands, for certain interactive rights for BBC pre-school favourites Postman Pat
(R) and Little Red Tractor(TM).
Commenting on today's results, Dominic Wheatley, CEO Bright Things said:
'We have made good progress through the first six months of our financial year.
There are many hurdles ahead and there are risks associated with any new
project. However I am heartened by the response we are receiving from the
industry and from rights' holders.
'I am delighted to be able to announce that we have reached agreement with
Entertainment Rights to allow us to publish content based on Postman Pat(R) and
Little Red Tractor(TM). They join the growing band of popular characters that
will form our console's software library.'
Mike Heap, Entertainment Rights' CEO commented:
'ER are delighted to partner with Bright Things in the ongoing brand extension
of Postman Pat(R) and Little Red Tractor(TM). We are confident that with Bright
Things' expertise in the growing market of games consoles and software, these
premier brands will be a huge success at retail'.
For further information please contact:
Bright Things PLC
Dominic Wheatley, CEO 07976 295071
Matthew Tims, Publishing Director 07976 740397
Giles Croot / Mark Antelme, Brunswick 020 7404 5959
Entertainment Rights
Liz Morris 020 8762 6268
NOTES FOR EDITORS:
About Bright Things:
Bright Entertainment was formed in June 2002 by Dominic Wheatley and John
Kavanagh, the inventor of the technology, to develop and exploit the prototype
interactive educational children's console.
About Entertainment Rights:
•Entertainment Rights Plc ('ER') is one of the UK's leading specialist
media groups focused on the ownership of high quality children's and family
programming, characters and brands.
•ER owns or controls the rights to many classic characters including Basil
Brush(R), Postman Pat(R), Little Red Tractor(TM), He-Man and the Masters of
the Universe, Fat Albert and the Cosby kids, She-Ra, Ghostbusters, Zorro and
The Lone Ranger.
•Since 1999, when ER owned rights to just 50 hours of programming, ER's
library has grown to over 1,700 hours of high quality children's and family
characters and brands. This includes selected rights to global brands such
as Mattel's Barbie(TM), Scholastic's Clifford(TM), Hasbro's
Transformers(TM), Harveytoons Casper the Friendly Ghost and Classic Media's
Felix the Cat.
•In September 2004 ER acquired Tell-Tale Productions, creators and
producers of The Tweenies and added a significant development and production
slate to the ER portfolio including Fun Song Factory and Boo!
•ER has grown rapidly. Annual revenues have increased from £1.8m in 1999
to £29.5m in 2003, the last reported financial year.
•ER is ideally placed to extend and exploit its portfolio of quality
programming with its own television distribution, licensing division, and an
established home entertainment label, Right Entertainment.
Bright Things Plc
Chairman's Statement
Since April of this year, when your company raised four million pounds of
working capital, much progress has been made.
Considerable effort has been put into the creation of both the hardware unit
(the games console) and the interactive software to accompany it. To date
everything appears to be close to the schedule set by the executive team, but
there are several more months of work to follow before we will be in a position
to enter the manufacturing phase.
When the company presented to potential investors earlier this year it was made
clear that one of the keys to success would be the acquisition of rights to well
known children's properties such as Teletubbies, Noddy and Balamory. I am
pleased to report that the company has in fact been more successful in this area
than anticipated. The successful partnership signed with BBC Worldwide on 7 May
2004 not only saw us obtaining the rights to seven children's properties (as
detailed below), but also secured the secondment of a dedicated software
development management team from BBC Worldwide's award winning multi-media
business. Recently we have signed two properties from Entertainment Rights:
Postman Pat and Little Red Tractor.
We now have the rights to create interactive games designed for our console from
the following rights holders:
BBC: Andy Pandy, Balamory, Bill & Ben, Fimbles, Little Robots, Teletubbies,
Tweenies.
Chorion: Noddy
Entertainment Rights*: Postman Pat, Little Red Tractor
* signed post 1 October 2004
This brings the total number of signed titles to 10 which is higher than
expected and a most welcome development. We are also in active discussions with
other rights holders for additional titles. The company has been pleased by the
interest and enthusiasm of right holders who share in the belief that this
product has potential.
On the marketing front we have now prepared all the artwork and creative
treatment for the console and the line-look of the software. Advertising and PR
plans are being finalised for the introduction of the unit next year.
Preliminary discussions with key members of the trade are encouraging, and we
hope to have material progress on this in due course. As you will all
appreciate, the launching of any product of this nature requires careful
handling and the company is not giving too many details at this early stage.
There are many challenges ahead and risks attached to any project of this
nature, but I am pleased by the progress to date and the general reaction to the
product. I would like to thank all those who have been working so hard with us
on this venture.
Ian Livingstone
Chairman
8 December 2004
Bright Things Plc
Financial Review
Bright Things Plc was incorporated on 8 March 2004. On 16 April 2004 the entire
share capital of Bright Entertainment Limited (formerly Bright Things Limited)
was acquired by Bright Things Plc. The consideration comprised shares in Bright
Things Plc which were issued to the shareholders of Bright Entertainment Limited
on a share for share exchange basis.
Bright Things Plc placed 5,000,000 new ordinary shares at a price of 90 pence
per share and was admitted to trading on AIM on 30 April 2004. The company
raised £3,957,000 net of costs from this issue of ordinary shares.
The shareholders of Bright Things Plc post acquisition and the placing of new
ordinary shares comprised both the controlling management shareholders, new
institutional and private shareholders, and ex-Bright Entertainment Limited
shareholders.
The circumstances of the acquisition described above indicate that it meets the
criteria that would allow merger accounting relief provisions under s131
Companies Act to be adopted, summarised as follows:
(a) Bright Things Plc acquires a 100% equity interest in Bright Entertainment
Limited through the issue of equity shares on a share for share basis.
Merger accounting has been applied and the effect that this has on the
consolidated accounts is as follows:
(a) the consolidated results include those of the trading company Bright
Entertainment Limited for the nine month period to 30 September 2004;
(b) a merger reserve with a deficit of £858,000 is created being the
difference between the cost of the investment in Bright Entertainment
Limited (as shown in Bright Things Plc's balance sheet of £1,000,000) and
the nominal value of the share capital and share premium as shown in
Bright Entertainment Limited's balance sheet of £142,000.
Bright Things Plc entered into an agreement with BBC Worldwide Limited on 7 May
2004 (as described in the Chairman's statement). Part of the consideration
payable on this agreement was settled by the issue of 333,333 ordinary shares at
90 pence each to BBC Worldwide Limited on 14 May 2004.
Key figures:
9 months ended 9 months ended
30 September 30 September
2004 2003
(unaudited) (unaudited)
£'000 £'000
Administrative expenses 1,610 98
_______ _______
Net assets/(liabilities) 2,691 (120)
_______ _______
Increase/(decrease) in cash 2,593 (19)
_______ _______
Basic and diluted loss per share (12.1p) (1.0p)
_______ _______
Administrative expenses
Trading commenced in April 2004, administrative expenses relate to the nine
months ended 30 September 2004 and are the main component of the loss on
ordinary activities during the period. Administrative expenses are broken down
into two categories:
Research & development expenditure and acquisition of licences - £994,000;
Research and development expenditure incurred on hardware and software has been
written off to the profit and loss account. As part of the BBC Worldwide
contract as described in the Chairman's statement, six members of staff from BBC
Worldwide Limited were seconded to the company to work on the development of the
software titles. Hardware development is taking place using specialised
engineering firms primarily based in California, USA.
All licensing costs have been written off on the basis that there are still
risks ahead. Licensing expenditure includes payments made to two license holders
(BBC Worldwide and Chorion) to acquire the rights to licensed properties and to
develop interactive DVD games which work on our hardware platform for commercial
exploitation. Licensing expenditure includes £83,500 relating to advances paid
which are recoupable against future royalties payable. Licensing expenditure
includes £300,000 which was settled by the issue of 333,333 new ordinary shares.
General & administrative expenditure - £616,000;
The company opened offices in London and Palo Alto, California, USA during the
period. A specialised marketing agency and strategic planning consultant have
been appointed during the period.
Earnings per share
Basic loss per share of 12.1p (2003 loss of 1.0p) has increased due to the
scaling up of the companies research and development activities.
Net assets
The increase in Net Assets to £2,691,000 (2003 net liabilities £120,000) is
largely due to the increase in cash resulting from the issue of new shares from
the placing in April 2004.
Cash at bank at 30 September is £2,596,000, of this £1,000,000 is held on Money
Market Fixed Term Deposit maturing in January 2005. The remainder of the funds
are held on Money Market Call Deposit. The company has purchased US Dollars in
the period to cover its future exposure to US Dollar expenditure.
Adrian Moores
Finance Director
8 December 2004
Bright Things Plc
Consolidated Profit and Loss Account
for the nine months ended 30 September 2004
Note 9 months ended 9 months ended Year ended
30 September 30 September 31 December
2004 2003 2003
(unaudited) (unaudited) £'000
£'000 £'000
Administrative expenses 1,610 98 98
_______ _______ _______
Operating loss (1,610) (98) (98)
Interest receivable 42 - -
_______ _______ _______
Loss on ordinary activities
before and after taxation (1,568) (98) (98)
Deficit brought forward (140) (42) (42)
_______ _______ _______
Deficit carried forward (1,708) (140) (140)
======== ======== ========
Basic and diluted loss
per share 2 (12.1)p (1.0)p (1.0)p
========= ======== ========
All amounts relate to continuing activities.
All recognised gains and losses are included in the profit and loss account.
Bright Things Plc
Consolidated Balance sheet
at 30 September 2004
9 months ended 9 months ended Year ended
30 September 30 September 31 December
2004 2003 2003
(unaudited) (unaudited) £'000
£'000 £'000
Fixed assets
Intangible assets 8 9 9
Tangible assets 65 1 1
_______ _______ _______
73 10 10
_______ _______ _______
Current assets
Other debtors 201 - -
Prepayments and accrued income 88 - -
Cash at bank and in hand 2,596 3 3
_______ _______ _______
2,885 3 3
Creditors: amounts falling due
within one year (267) (133) (133)
_______ _______ _______
Net current
assets/(liabilities) 2,618 (130) (130)
_______ _______ _______
Net assts/(liabilities) 2,691 (120) (120)
_______ _______ _______
Capital and reserves
Called up share capital 1,533 1,000 1,000
Share premium 3,724 - -
Merger reserve (858) (980) (980)
Profit and loss account (1,708) (140) (140)
_______ _______ _______
2,691 (120) (120)
_______ _______ _______
Bright Things Plc
Consolidated Cash Flow Statement
For the 9 months ended 30 September 2004
Note 9 months ended 9 months ended Year ended
30 September 30 September 31 December
2004 2003 2003
(unaudited) (unaudited) £'000
£'000 £'000
Net cash outflow from
operating Activities 3 (964) (18) (18)
_______ _______ _______
Returns on investments and
servicing of finance
Interest received 7 - - -
_______ _______ _______
Net cash inflow from returns
on investments and servicing of
finance 7 - -
_______ _______ _______
Capital expenditure and
financial investment
Purchase of tangible fixed
assets (71) (1) (1)
Purchase of intangible fixed
assets (336) - -
_______ _______ _______
(407) (1) (1)
Cash outflow before use of
liquid resources and financing (1,364) (19) (19)
Financing
Net proceeds from issue of
new share capital 3,957 - -
_______ _______ _______
Increase/(decrease) in cash 2,593 (19) (19)
_______ _______ _______
Bright Things Plc
Notes
1 Basis of Preparation
The results for the nine months ended 30 September 2004 and the comparative
figures for the nine months ended 30 September 2003 are unaudited. They have
been prepared on accounting bases and policies that are consistent with those
used in the preparation of the financial statements of the Group for the period
ended 31 December 2003.
The financial information contained in this report does not constitute statutory
accounts within the meaning of Section 240 of the Companies Act 1985. The
company was incorporated on 8 March 2004 and has yet to submit accounts. The
results of Bright Entertainment Limited for the period ended 31 December 2003
were reported on by the auditors and received an unqualified report and
contained no statement under Section 237(2) or (3) of the Companies Act 1985.
Full accounts have been delivered to the Registrar of Companies.
Basis of Consolidation
The unaudited consolidated accounts for Bright Things Plc incorporate the
results of Bright Things Plc and its subsidiary undertaking, Bright
Entertainment Limited (formerly Bright Things Limited), using the merger
accounting method.
Bright Things Plc was incorporated on 8 March 2004 and as such the comparative
figures are proforma and represent the results of Bright Entertainment Limited
only. Transactions in the three month period October to December 2003 were
insignificant and hence the 9 month comparative figures are proforma and are
based on the results and net assets of Bright Entertainment Limited, adjusted
for the shares issued to effect the merger.
The company intends its year end to be 31 March, with its first annual results
to 31 March 2005. Due to the timing of the fundraising in April 2004, and the
appropriate scaling up of trading activities at this time, it was considered
appropriate to prepare this first set of interim results for the 9 months ended
30 September 2004.
2 Basic loss per share for the nine months ended 30 September 2004 have been
calculated on the basis of the loss after taxation for the period of £1,568,000
(2003 £98,000) and the average number of shares in issue during the period of
12,980,535 (2003 10,000,000). The effect of all potential ordinary shares is
antidilutive.
3 Reconciliation of operating profit to net cash inflow from operating
activities
9 months ended 9 months ended Year ended
30 September 30 September 31 December
2004 2003 2003
(unaudited) (unaudited) £'000
£'000 £'000
Operating loss (1,610) (98) (98)
Depreciation/amortisation 644 1 1
Increase in debtors (254) - -
Increase in creditors 256 79 79
_______ _______ _______
Net cash outflow from
operating activities (964) (18) (18)
_______ _______ _______
All cash flows relate to continuing activities.
Bright Things Plc
Notes
4 Analysis of administrative expenses
9 months ended 9 months ended Year ended
30 September 30 September 31 December
2004 2003 2003
(unaudited) (unaudited) £'000
£'000 £'000
Research & development and
acquisition of licences 994 26 26
General & administration 616 72 72
_______ _______ _______
1,610 98 98
_______ _______ _______
This information is provided by RNS
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