Final Results
Ten Alps PLC
13 June 2006
TV production group Ten Alps Plc ('Ten Alps') announces results for the year to
March 31, 2006.
• Revenues up 21.5% to £42.21m (2005: £34.75m)
• EBITDA* up 108.7% to £3.03m (2004: £1.45m)
• Adjusted pre-tax profit up 122.3% to £2.66m (2005: £1.2m)
• EBIT up 236.8% to £1.91m (2005: £567,000)
• Net profit up 251.3% to £816,000 (2005: £232,000)
• Adjusted** EPS up 82.9% to 3.31p (2005: 1.81p)
• Basic EPS up 251.9% to 1.83p (2005: 0.52p)
• Cash balance at year end of £14.52m (2004: £7.52m)
• Debt/Equity ratio was 0.83 in 2006 (2005: N/A)
* Operating profit before charging depreciation and amortisation of goodwill
** Operating profit before charging amortisation of goodwill
Trading Highlights, current year 2006-7:
• Projected Revenues 50% up year-on-year, to above £31m for the six-month
period ending 30 September 2006, subject to unforeseen events.
• Good order book from ongoing production businesses, with over 30 current
TV and radio productions and 300 specialist media contracts for print and
internet.
Today's other news (see separate RNS announcement):
• Entertainment TV commissions won, signalling launch of a formats business
• DVD deal with industry-leading distributor 2 Entertain, with advance
against DVD projects from all group factual companies
• Planned launch of Public TV, a UK public sector video website, in late
2006, as key element in internet TV strategy. (www.Public.tv)
Strategic Highlights 2005-6:
• Acquisition (31 March 2006) of specialist publisher McMillan Scott for up
to £12.3m - around 300 titles, 250 staff, turnover to June 2005 of £26m. Ten
Alps' growing internet operation is now based at McMillan Scott's London
office.
• Focus on opportunities in niche public sector internet TV as natural
bridge between TV and contract publishing industries
• In factual TV - success and growth. Programmes produced for all UK
broadcasters, and several US and European channels. Acquisition of
production company Hart Davies.
• TV drama development-funding deal with Fremantle.
• Addition of experienced management at Ten Alps group level - Nigel Dacre
as Head of Digital, Jo Willett as Head of Drama and Fiona Stourton who will
be joining from the BBC in September 06 as group-wide factual executive
• Following the acquisitions in the year, staff numbers have more than
doubled to 430
Chairman Brian Walden
I am glad to report that this was a year of improved profits and margins, as
well as substantial growth in revenues, with foundations laid by our
hard-working staff for more growth in 2006-7. The group's revenues are now
coming from three sources in broadly equal measure - broadcasters, the UK public
sector and the UK private sector - which is a desirably diversified risk profile
that is not typical for our industry.
Of the specific strategic tasks the company set itself a year ago, we have
achieved profits growth, three acquisitions and group-wide drama and DVD
distribution deals. We have created high-quality TV programmes for all major UK
broadcasters, and are making many more, including numerous high-budget
docudramas and, for the first time, entertainment formats. We have gone into the
internet, not just as future-proofing but as the major strategic thrust. One
goal not yet achieved is to open a US office and we are looking at options on
that.
Ten Alps' cash balance has grown again this year. The board believes further
acquisitions are very realistic, intended to boost existing operations, and
clearly a healthy cash balance would be useful in that respect. There will also
be internal investments in internet operations.
The plan is to maintain our expectation of organic profits growth whilst making
the longer-term investments mentioned above. Combining all those opportunities
with a prudent view of debt repayments, the board will not therefore start
paying a dividend this year. We would prefer to see the business grow.
Chief Executive
We aim for growth in TV production, including a new emphasis in live TV events,
dramas and formats.
We also aim to become a market leader in public sector internet TV over the next
five years. We plan to provide state and advertiser-funded programming and
training in distinct niches for the UK's 5.8 million public sector employees,
and their customers, the wider public. Later this year we intend to launch
Public TV as our overall platform for the UK public sector as a whole.
We already have a significant interest in one area - education. Teachers' TV is
now a worldwide market leader, with over 1000 original programmes online.
Through McMillan Scott - acquired on the last day of the financial year and
therefore not featured in the revenue or profit figures above - we have hundreds
of advertising-funded titles. Their staff are working to put many of those
titles online in 2006, as the bedrock of that Public TV website, and its source
of advertising. Then for niche internet TV channels in the next year or two we
are currently exploring healthcare, law, utilities and trade.
A powerful media company requires both editorial and commercial strength.
Happily, we have had award-winning TV productions over a number of years. This
year we now also have a specialised, 200-strong advertising sales force. Putting
the two together, we have the right elements to move forward in a media
landscape where the old fences - say, between publishing, TV and the internet -
are being taken down.
www.tenalps.com
Contact
Parkgreen Communications, Paul McManus
0207 786 9600
07980 541 893
Alex Connock - Chief Executive, c/o Moira McManus
0207 878 2311
Nitil Patel - Finance Director
0207 428 3182
TEN ALPS PLC
Preliminary Announcement of the results for the year ended 31 March 2006
Television & Radio Production
Ten Alps produces factual programmes through its companies 3BM TV, Blakeway,
Brook Lapping and HDTV. It also owns a 70% stake in the management company
contracted by the UK Department for Education and Skills to provide the
Teachers' TV channel. In 2005-6 Ten Alps delivered programmes to all the major
UK broadcasters, and this year the group adds drama and entertainment
programming. In the longer term, it aims to make internet TV a major focus.
2006-7 slate
As a snapshot, in June 2006 Ten Alps has 13 docudramas, 6 factual series and 8
factual one-off programmes in production for TV channels in the UK and US. There
are a further 10 series in production for digital TV and 15 current radio
commissions.
Docudrama is a major theme for Ten Alps this year. Amongst the new projects
being produced by Ten Alps companies are coverage of the Gulf War (Blakeway for
BBC2) 1970s armed robbers (HDTV/BBC), the SAS rescue in Sierra Leone (3BM) Nazi
leaders (HDTV) a Hollywood shoot-out (3BM), 9-11 (Blakeway in co-production with
Dangerous Films for BBC1) and Bali (Brook Lapping/Sky/Channel Ten Australia and
other broadcasters.)
For the American market is perhaps the biggest production, a major docudrama
film Surviving Katrina (Discovery Channel/Brook Lapping), telling the story of
the New Orleans hurricane for its first anniversary, through the eyes of people
who were caught up in it. It follows the success of The Flight That Fought Back,
a Brook Lapping film about 9-11, which won the highest-rating of 2005 on
Discovery US, and was described by the Hollywood Reporter as 'compelling
television.'
New factual series include Clash of Worlds (Blakeway/BBC2) about the West and
Islam, Summits (Blakeway/BBC4), Blair (Brook Lapping/Channel 4) and Medicine's
Strangest Cases (Ten Alps TV/Five). Summers (Blakeway/BBC2) tells the story of
four iconic years in British history, Who Gets the Heart (HDTV/Channel 4)
concerns transplant operations, and The War of the World (Blakeway/Channel 4) is
the major new series from Harvard-based British historian Niall Fergusson,
taking on the received wisdom about 20th century history.
New one-off commissions include Travels with the US Military (3BMPBS), Phantom
of the Opera (Brook Lapping/BBC1), Europe's 9-11 and the Neo-Con Case (Brook
Lapping/PBS), Stanley Goes to Europe (Brook Lapping/More4) and a Dispatches for
Channel 4 (HDTV).
Ten Alps has moved into entertainment with two productions: Get Your Act
Together, a six-part series now in production for Channel 4, and Top Dog, a
ten-part series for Animal Planet (Discovery Networks Europe). Ten Alps plans to
develop more formats in the coming year. And the group has moved into drama,
with a number of projects in development.
In radio, Ten Alps-owned production companies have 8 current projects for BBC
Radio 4 including (from Brook Lapping) Miracle Detectives, Invasion of the
Yellow Ducks, The End is Nigh .... Again, Bling Blong and The Page Turners.
Projects for BBC Radio 2, include Madonna, Def Jam, Buddy Holly, Andy Warhol,
Rockabilly and15th series of The Smith Lectures. Ten Alps Radio continues to
co-produce (with BBC News) the Sunday morning political slot Worricker for BBC
Radio 5 Live.
Awards
Norma Percy's Brook Lapping team, who made Elusive Peace, the BBC2 documentary
series telling the story of recent peace efforts between Israel and the Arabs,
won the Programme of the Year award presented by RTS Television Journalism,
amongst other awards. The Independent reviewed the programme thus: 'Norma
Percy's documentaries turn the dry world of international politics into
thrilling, must-see television.'
At the prestigious Sony Radio Academy Awards, Brook Lapping Radio and Ten Alps
Radio won Gold and Silver respectively in the Music Special Award for their
productions of Lennon: The Wenner Tapes (BBC Radio 4) and Classic Singles -
David Bowie's Heroes (BBC Radio 2). The Lennon programme featured an
extraordinary, never-before broadcast interview with John Lennon, dating from
1970 in which he went into sometimes excruciating detail about his relationship
with Paul McCartney.
3BM Television won The Radio Times Readers' Award for Best Religious Programme
for its production of Tsunami: Where was God, and a Merit Award at the Sandford
St Martin Trust Awards.
Internet and Digital TV
Ten Alps aims to be a force in public sector internet TV. Through Teachers' TV,
it is already a leader in the field. Later this year, Public TV is intended to
grow its position. The internet also provides major new opportunities for
rights exploitation, alongside DVD.
This was the year that broadband finally arrived. Broadband speed of 1MB+, and
its penetration into 10 million UK homes went well beyond the critical point for
internet TV to be viable. This is a TV revolution, because it offers the
chance for hundreds of niche channels too specialist and geographically
distributed (including worldwide) even for digital TV, with its large,
nation-specific fixed costs, but for which there exists a firm client base and a
firm advertising market.
That's why Ten Alps bought specialist contract publisher McMillan Scott. With
advertiser and public sector funding for 300-plus niche titles under its belt,
it's the perfect companion to Ten Alps' existing TV businesses in challenging
for leadership in this market.
Public TV
Ten Alps aims to launch Public TV in Autumn 2006 as a place to find video that
might be helpful to the UK's 5.8 million public sector workers, and the public
itself.
The website, www.Public.tv (for which there is simply a holding page online at
present) will aim to offer a search of relevant, high-quality programmes for UK
public sector workers.
Public TV will make use of and the advertising sales force at McMillan Scott to
gain scale and traction in the specialist public sector market. Through Public
TV, Ten Alps will then aim to develop other niche TV activities in health,
commerce, utilities and so forth - the video archives of which will be carried
also in Public TV's database.
Teachers' TV
The Teachers' TV channel, funded by the Department for Education and Skills but
editorially independent, celebrated its first anniversary in February 2006 and
shortly afterwards put its 1000th programme online.
That means that by visiting www.teachers.tv at any time, Britain's 800,000
education professionals can access high-quality programmes tailored for their
interests. Web statistics show over 100,000 programmes streamed and downloaded
in one month. People can also watch the channel in real time on ntl 803
Telewest 240, HomeChoice 845, Freeview 88 and Sky channel 880.
Teachers' TV broadcasts a wide range of programming - covering professional
development, resource reviews, education documentaries and news. It caters for
teachers, teaching assistants, head teachers, school support staff, and
governors.
Documentary production company Brook Lapping, wholly-owned by Ten Alps, has a
70% shareholding in the consortium which won the four-year contract to design,
build and operate the channel following a competitive tender. The contract in
hand runs to July 31st 2008.
Rights exploitation
A group-wide DVD deal has now been done with 2 Entertain, the market leading
distribution company to exploit rights in Ten Alps back catalogue and future
programmes. In 2006 and beyond Ten Alps will also explore avenues in
pay-per-view, internet download and satellite/cable.
Ten Alps retains valuable rights in the programmes it is making, as well as a
back catalogue with some rights ownership in over 400 programmes. With new terms
of trade, production companies can do better deals on rights ownership. The
value of these projects is not explicitly shown on the Ten Alps balance sheet,
except as any goodwill arising on acquisitions which has not yet been fully
amortised.
Commercial Activities
Ten Alps has become much stronger commercially this year, and now has
substantial publishing and advertising activities. This gives the group a
diverse client base and an ability to commercialise its content online and in
live events. Through its publishing activities alone it has 250 staff and 46,000
advertisers. Ten Alps is now integrating its commercial and editorial skills
through the internet - which is an operation on some scale.
Specialist Media
Acquired in March 2006 for up to £12.3m, McMillan Scott is a major player in
public sector media, including a roughly 40% market share amongst not-for-profit
clients like councils and other public sector bodies. With offices in Savoy
Street, London (which has now become Ten Alps' head office), Macclesfield and
Manchester, it produces around 400 titles each year, some of them owned, and
others for which it handles the ad sales. It was these titles, as well as the
underlying financial stability of the business, that was the attraction for Ten
Alps as it seeks to expand in specialist internet media.
McMillan Scott's titles constitute almost a definitive dictionary of public
sector niches. Clients include Diabetes UK, Nursing and Midwifery Council, the
UKTI/DTI, British Waterways, The British Veterinary Association, The Caravan
Club, the British Chambers of Commerce, the Association of Accounting
Technicians, Local Authority Building Control, the CBI, the Driving Standards
Agency, the Road Haulage Association and the Royal Aeronautical Society. Most of
the work is print-based, though there are also evolving web design and events
provision operations within McMillan-Scott.
Live Events
More than ever, there is a demand for live engagement with an audience through
TV and events. Both McMillan Scott and Ten Alps have been providing clients with
live events and the two operations are being merged this Summer under the Ten
Alps Live banner. Events have been provided to EMI, Corus, BP, NCR, Manchester
United (the launch of its global sponsorship deal with AIG) and Metro.
Conferences - which Ten Alps views as a key development opportunity, given the
depth of its client base - have been developed and staged in the transport and
other sectors. And the group's six-strong sponsorship sales force is looking to
raise funding for large-scale public events, along the lines of the
Orange-sponsored Lighting Up London imagery projected onto Buckingham Palace in
2004.
Advertising & Marketing
Ten Alps' two advertising agencies continued to work across a broad spectrum of
national and international clients, producing both published material (sometimes
similar to the work of McMillan Scott) and marketing and communications work.
Again, the old boundaries between media industries are blurring in the internet
economy.
Ten Alps RMA, with a particular focus in commercial maritime work, helped
clients from Ocean Village, part of P&O, to Sunsail, Crown Blue Line, C-Map and
the British Marine Federation. It retains the market-leading Stannah as a core
customer and has around 20 other clients with an above 90% annual retention
rate. Meanwhile MTD continued to work internationally with the Helsinki
headquartered fiber-based materials company Ahlstrom and major house-builder
Stewart Milne. MTD specialises in the Education sector, with business from the
Glasgow Metropolitan College and the Scottish Qualifications Authority,
Edinburgh's Telford College and Reid Kerr College.
Finance Director's Report
Trading Analysis
Group turnover grew by 21.4% to £42.2m (2005: £34.75m) with acquisitions
contributing £406,000. Gross profit increased by 35.1% to £9.46m (2005: £7.00m).
Gross margin has risen from 20.1% in 2005 to 22.4% in 2006, reflecting the
benefit of Teachers' TV Key Performance Indicator award and increased TV work
across the group. Administrative expenses (before goodwill amortisation)
continue to be controlled and represent 16.3% of turnover (2005: 16.9%).
The Group's EBITDA has increased by 108.7% to £3.03m (2005: £1.45m) reflecting
continuing improved conditions in the TV Sector and the impact of Teachers' TV.
The profit before tax (PBT) was £2.00m (2005: £627,000) after a goodwill
amortisation charge of £658,000 (2005: £569,000) for the year.
Basic earnings per share (EPS) increased from 0.52p in 2005 to 1.83p in 2006
with a fully diluted EPS of 1.79p (2005:0.51p). Adjusted basic EPS (before
goodwill amortisation) is 3.31p in 2006 compared to 1.81p in 2005.
Group Balance Sheet
The Group's Balance Sheet reflects the impact of the acquisition of McMillan
Scott Limited on 31 March 2006, mainly the resulting goodwill and the debt and
equity finance to fund the transaction.
Shareholders funds have increased from £7.04m to £12.1m, reflecting the
acquisitions and the results for the year. The profit and loss account now shows
a surplus of £1.01m (2005: £190,000).
The long-term debt at the year-end reflects loans from the Bank of Scotland plc,
which was used to fund the acquisition of McMillan Scott on 31 March 2006. The
amount outstanding as at 31 March 2006 was £9.35m (2005: £Nil). Also included in
long term debt are loans from the European Union for development of programmes
of £280,000 (2005: £276,000) finance leases of £39,000 (2005: £16,000) and
deferred income in relation to fixed assets purchased by Educational Digital
Limited of £409,000 (2005: £445,000).
Net Assets as at 31 March 2006 were £12.40m, of which £14.52m was held in cash
(which includes £8.00m held in Teachers' TV).
Share Price
The mid-market share price of the Group has fluctuated between 44p and 68p
during the year. At the year -end the mid market closing price was 67.5p, giving
the Group a market capitalisation of £35m.
TEN ALPS PLC
Preliminary Announcement of the results for the year ended 31 March 2006
Summarised Consolidated Profit and Loss Account
2006 2005
Notes £'000's £'000's
Turnover continuing operations 41,805 34,753
acquisitions 406 -
42,211 34,753
Cost of sales (32,749) (27,755)
Gross profit 9,462 6,998
Administrative expenses - other (6,895) (5,862)
Amortisation of goodwill (658) (569)
Total administrative expenses (7,553) (6,431)
Operating profit continuing operations 1,950 553
acquisitions (41) 14
1,909 567
Net interest receivable 91 60
Profit on ordinary activities
before tax 2,000 627
Taxation (819) (252)
Profit on ordinary activities after
tax 1,181 375
Minority
interest (365) (143)
Retained profit for the year 816 232
Basic earnings per share 2 1.83p 0.52p
Diluted earnings per share 2 1.79p 0.51p
A statement of recognised gains and losses is not included as there are
no recognised gains or losses other than those disclosed above
TEN ALPS PLC
Preliminary Announcement of the results for the year ended 31 March 2006
Summarised Consolidated Balance Sheet
2006 2005
£ '000 £ '000
Fixed assets
Intangible assets 15,718 3,658
Tangible assets 1,611 1,279
17,329 4,937
Current assets
Work in progress 2,662 244
Debtors 12,978 7,233
Cash at bank 14,515 7,522
30,155 14,999
Creditors
Amounts falling due within one
year (25,005) (12,015)
Net current assets 5,150 2,984
Total assets less current
liabilities 22,479 7,921
Creditors
Amounts falling due after more
than one year (10,078) (737)
Net assets 12,401 7,184
Capital and reserves
Called up share capital 1,035 887
Share premium account 7,127 3,030
Merger reserve 2,930 2,930
Other reserve 2 2
Profit and loss account 1,006 190
Equity shareholders' funds 12,100 7,039
Equity minority interest 301 145
12,401 7,184
TEN ALPS PLC
Preliminary Announcement of the results for the year ended 31 March 2006
Summarised Consolidated Cash Flow Statement
2006 2005
Notes £ '000 £ '000
Net Cash inflow from operating activities 5 3,644 5,338
Return on investments and servicing of
finance (119) 60
Taxation (429) (151)
Capital expenditure and financial investment (387) (1,027)
Acquisitions and disposals (10,497) (518)
Net cash (outflow)/inflow before financing (7,788) 3,702
Financing
Issue of ordinary share capital 3,863 35
Expenses paid in connection with share issues 382 -
Capital element of finance lease rentals (14) (52)
Increase/(decrease) in bank and other loans 10,550 (134)
Net cash inflow/(outflow) from financing 14,781 (151)
Increase in cash 6,993 3,551
Reconciliation of net cash flow movement to
movement in net debt
Increase in cash in period 6,993 3,551
Cash (inflow)/outflow from change in debt and lease
financing (10,536)
52
Change in net debt resulting from cash flows (3,543) 3,603
Finance leases acquired with subsidiaries (116) -
Movements in media loans - 134
Exchange adjustments (4) (8)
(3,663) 3,729
Net funds at 1 April 2005 7,131 3,402
Net funds at 31 March 2006 3,468 7,131
TEN ALPS PLC
Notes to the Preliminary Statements for the year ended 31 March 2006
1. No final dividend is being proposed.
2. Earnings per share
Earnings Weighted Basic share Adjusted per
average per amount share amount
2006 £000 no. of shares pence pence
Attributable to ordinary shareholders:
Retained profit 816
Amortisation of goodwill 658
Adjusted earnings 1,474
Basic EPS 44,554,163 1.83 3.31
Dilutive effect of securities:
Options 1,082,198
Diluted EPS 45,636,361 1.79 3.23
2005
Attributable to ordinary shareholders:
Retained profit 232
Amortisation of goodwill 569
Adjusted earnings 801
Basic EPS 44,206,464 0.52 1.81
Dilutive effect of securities:
Options 1,338,482
Diluted EPS 45,544,946 0.51 1.76
3. The financial information relating to the year ended 31 March 2006 set out
above does not constitute the Company's statutory accounts for that year, but
have been extracted from the statutory accounts, which received an unqualified
auditors' report and which have not yet been filed with the Registrar of
Companies. The financial information relating to the year ended 31 March 2005,
has been extracted from the 2005 Annual Report and Accounts which received an
unqualified auditors' report and have been delivered to the Registrar of
Companies.
4. Copies of the Company's Annual Report and Accounts for 2006 will be sent to
shareholders as soon as is practicable. Copies of this announcement are
available at the Company's head office at 9 Savoy Street, London WC2 7ER and
copies of the Annual Report and Accounts will also be available on request.
TEN ALPS PLC
Notes to the Preliminary Statements for the year ended 31 March 2006
5. Net Cashflow from Operating Activities 2006 2005
£ '000 £ '000
Operating profit 1,908 567
Depreciation 464 330
Goodwill amortisation 658 569
Loss/ (gain) on sale of fixed assets 9 (1)
Foreign exchange loss/ (gain) on media loans 4 8
Change in work in progress (25) (89)
Change in debtors (1,546) (4,383)
Change in creditors 2,172 8,337
Net Cash inflow from operating activities 3,644 5,338
This information is provided by RNS
The company news service from the London Stock Exchange
Wednesday, 15th May 2024
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