TV Commerce Holdings PLC
25 July 2005
TV Commerce Holdings plc
For the period ended 30 June 2005
TV Commerce Holdings plc ('TV Commerce' or the 'Group'), the AIM-listed operator
of the SKY TV channels 'Your Destiny TV' and 'The Advert Channel', today reports
its Interim Results for the period ended 30 June 2005.
Highlights / recent activity
• Turnover of £312,000 - in line with expectations.
• Pre-tax loss of £267,000, reflecting the cost of setting up the
• The Group is now trading profitably.
• Expansion of platform to include carriage on other SKY channels
• Launch of live broadcasts to subscribers to '3' Mobile in May 2005
• Launch of mobile phone gaming joint venture with Probability Games
Corporation in July 2005
• Licence granted by Ofcom to broadcast new 24 hour shopping channel
Commenting on the results, Vince Stanzione, Chief Executive of TV Commerce,
'Since coming to AIM in February of this year, TV Commerce has established a
growing business with its premium rate calls and text messaging response to its
SKY TV channels. The recent launch of the mobile phone gaming joint venture
should also see a significant increased contribution to revenue and earnings and
the Board remains confident of the outlook for the balance of the current year'.
For further information, please contact:
Vince Stanzione Tel: +44 (0) 1908 330 747
First City Financial Ltd
Allan Piper Tel: +44 (0) 207 436 7486
Daniel Stewart & Co
Lindsay Mair Tel: +44 (0) 207 847 0354
Statement by Andy Mintern, Chairman
I am pleased to present our maiden interim results for the period to 30 June
2005, during which the Group has experienced both rapid and strategic growth to
become a niche media company, with over 1,800 hours of interactive television
broadcast to date.
Performance for the period to 30 June 2005
The turnover for the period was £311,726, which largely reflected trading since
March of this year. A loss of £266,614 was incurred after set up costs in
relation to the TV channels.
The Group's activities continue to be focused on the SKY TV platform,
broadcasting niche programming to drive viewer interaction through Premium Rate
number or Premium Billed text messaging. The Group, however, operates across a
number of multi-media technologies to enhance the viewer experience which, in
addition to TV and fixed line telephony, includes mobile telephony, MMS, SMS,
WAP, 3G, the internet and Web TV.
The Group's areas of operation currently include Psychic, Astrology, Chat and
Dating and the recent expansion into Gaming and Betting is an exciting addition.
'Your Destiny TV'
The 'Your Destiny TV' format continues to grow in strength and from a startup
has become one of the most popular live interactive daytime formats on the SKY
platform, reaching approximately eight million homes throughout the UK and
Europe. In addition to broadcasts on SKY channel 694, broadcasting has been
expanded through access to the 'L!VE TV', 'TTV' and 'You TV' Sky channels.
'Your Destiny TV' is the UK's first live psychic TV Channel, featuring well
known psychics, astrologers and clairvoyants. Viewers interact with the show
using Premium Rate telephone calls to obtain live 'one to one' readings, Premium
Rate Text or Multi Media messaging to request a reading or to send photos or
samples of handwriting to obtain readings by return. The speed of interaction
enhances the enjoyment of the service with readings available within a minute,
for example, of the user sending a photo from their phone.
In March the Group's announced its partnership with Stream Group plc, to
increase the Group's capacity to handle the increase in calls received through a
recognised panel of psychic readers. In addition the Group's multimedia
partner, Requestec, now handles over 800 text messages per day.
In May the Group announced the expansion of this relationship with Requestec, to
become the first TV channel to broadcast live TV to a mobile phone, through the
'3' mobile network, dialing 85588 to view live transmission. In addition, by '
texting' the 85588 SMS code, readings can be obtained from other mobile
networks, a service for which the Group now has over 10,000 subscribers.
Psychic and Astrology matters continue to be closely regulated by Ofcom. In
complying with existing regulations, the complexity of the regulations
themselves provides a natural barrier to entry from increasing competition.
The Group continues to review international expansion opportunities to include
other countries where Premium Rate services have been registered, including
Germany and the USA. The Group is also exploring the possibility of this
expanding the 'Your Destiny TV' format to other TV networks, in addition to SKY.
The Advert Channel
The 'Advert Channel' represented the Group's first venture into TV broadcasting
and was fully launched in September 2004 to become the most successful new niche
channel launch of 2004, widely covered by the press and TV.
Although the format has been successful and the Group maintains the intellectual
property rights, the practical and financial considerations of providing a '
video juke box' format has led, in the immediate future, to the decision to
focus resource on the 'Your Destiny TV' format.
TV and Mobile Gaming
The Group continues to expand its content offer and has developed a slot machine
game which can be played on live TV. Viewers dial a Premium Rate number to have
the chance of being selected to play the game, interacting with the programme
presenter to win cash prizes of up to £10,000. Owning the intellectual property
rights to the format and software application, the Group also has the
possibility of licensing the game to other media owners worldwide.
Whilst revenue from the TV games format is important, there is also the
opportunity to generate additional sources of revenue from the database of
players - who are also likely to be interested in other games of chance,
including mobile gaming.
Earlier this month the Group announced a joint venture to launch a fully
licensed game for mobile phones called 'Mobile Casino'. Produced in partnership
with the Probability Games Corporation, the service allows the download of
casino games such as Blackjack, Slot Machines, Hi-Low, Roulette and Poker to the
users' mobile phone for stakes ranging from 10p per game.
The Group will market the new games using its existing TV coverage to be used in
conjunction with a marketing campaign starting in September of this year,
increasing towards the Christmas period.
Tested on over one hundred and fifty different handsets, with full customer
support, the games will work on all Java enabled handsets with a unique age and
ID verification systems to prevent underage or fraudulent play. In addition the
payment top up system is both intuitive and quick to use.
The production of content for other media operators remains a source of revenue
for the Group and to date this includes commercials for Monstermob plc and E2
Save, part of the Carphone Warehouse. The Group is also in discussion with a
number of third parties with a view to expanding this to include teleshopping
During the year, the Group was awarded a new licence by Ofcom to broadcast a 24
hour shopping channel and there are plans to combine this with the gaming and
auction formats to create new and exciting programmes.
Admission to AIM
On 21 February 2005, the Group's shares were admitted to AIM raising a total of
£779,315 net of expenses. The funds raised have enabled the Group to
successfully expand its programme offers and develop new ideas for revenue
generation. At the 30 June 2005 the Group had a positive cash balance of
On admission I was appointed to the Board as Non Executive Chairman, together
with Vince Stanzione (Chief Executive), Chelsey Baker (Commercial Director) and
Jason Nichols (Director of Broadcasting). Jason, who is also a Director of NTL
Home/Telewest, has worked with the Group on a part time basis and has assisted
with the launch of the Group's channels. Having completed this task, Jason will
resign from the Board on 1 August of this year to pursue his career and, on
behalf of the rest of the Board, I would like to thank Jason for his significant
contribution to date.
These results also reflect the considerable energy and effort of all of those
involved with the Group and, again, on behalf of the rest of the Board I would
like to thank them for their help in the continuing development of TV Commerce.
The Board remains confident of the outlook for the balance of the current
financial year and for the Group's future prospects.
Consolidated Profit and Loss Account
Forecast for the period to 30 June 2005
Notes 30 June
GROUP TURNOVER 311,726
Cost of sales (429,444)
GROSS LOSS (117,718)
Administration expenses (157,337)
GROUP OPERATING LOSS (275,055)
Interest receivable and similar 8,441
LOSS ON ORDINARY ACTIVITIES BEFORE
LOSS AFTER TAXATION (266,614)
RETAINED LOSS FOR THE PERIOD (266,614)
Loss per ordinary share (in pence):
Basic loss per share 2 (0.01)p
Consolidated Balance Sheet
As at 30 June 2005
Notes 30 June
Cash at bank and in hand 4 489,624
Amounts falling due within one year (54,185)
NET CURRENT ASSETS 579,752
TOTAL ASSETS LESS CURRENT LIABILITIES 570,752
Amounts falling due after more than one -
NET ASSETS 579,752
CAPITAL AND RESERVES
Called up share capital 641,796
Share premium account 571,191
Merger reserve 66,328
Profit and loss account (699,563)
EQUITY SHAREHOLDERS' FUNDS 5 579,752
Consolidated Cash Flow
For the period to 30 June 2005
RECONCILIATION OF LOSS BEFORE INTEREST AND TAXATION
TO OPERATING CASH OUTFLOW
Operating loss before interest and taxation (275,055)
Operating loss to 31 December 2004 (432,949)
Increase in debtors (144,313)
Increase in creditors 54,185
Net cash outflow from operating activities (798,132)
Returns on investments and servicing of finance
Interest received 8,441
Net cash outflow before financing (789,691)
Issue of equity share capital 1,248,740
Flotation expenses (469,425)
Issue of share capital in subsidiary 500,000
Receipt of Loans 605,000
Repayment of Loans (605,000)
Increase in net funds in the period 4 489,624
Notes to Financial Statements
For the period to 30 June 2005
1. Basis of preparation
This Interim Statement, which has not been audited and does not constitute
accounts within the meaning of section 240 of the Companies Act 1985.
The Group's Interim Statement consolidates the financial statements of TV
Commerce Holdings plc and its subsidiary undertakings, which have been made up
to 30 June 2005 and accounted for under the merger accounting method. The group
financial statements incorporate the accounts of TV Commerce Holdings plc for
the period from incorporation (22 November 2004) to 30 June 2005 and the
accounts of TV Commerce Limited for the period 1 January 2005 to 30 June 2005.
The Group commenced trading after 30 June 2004 and therefore comparative
information has not been disclosed.
The Company's auditors have not yet reported on the statutory accounts of the
Company as it has yet to complete its first financial period.
The turnover shown in the profit and loss account represents fees and
commissions receivable during the period.
The cost of tangible fixed assets is their purchase cost, together with any
additional costs of acquisition.
Operating lease agreements
Rentals applicable to operating leases, where substantially all of the benefits
and risks of ownership remain with the lessor, are charged against profits on a
straight line basis over the period of the lease.
Deferred tax liabilities are recognized in respect of all timing differences
that have originated but not reversed at the balance sheet date. Deferred tax is
measured at the average rates of tax that are expected to apply in the periods
in which the timing differences are expected to reverse, based on tax rates and
laws that have been enacted by the balance sheet date. Deferred tax is measured
on a non-discounted basis.
Investments are included at cost less any amounts written off. Profits and
losses from disposals of fixed assets are treated as part of the results from
In accordance with FRS 4 Capital Instruments, including the share capital
accounts, are shown as the total consideration received less expenses incurred
directly in connection with the issue costs.
2. Loss per share
Basic Loss per share for the period to 30 June 2005 is calculated by dividing
the Group's loss after taxation of £(266,614) by the weighted average number of
shares in issue during the period of 45,766,881.
No diluted earnings per share are presented as the effect of the exercise of
share options would be to decrease the loss per share.
The directors do not recommend the payment of a dividend for the period to 30
4. Reconciliation of net cash flow to movements in
Increase in net cash in the year 489,624
Movement in net debt in the period 489,624
Net cash brought forward -
Net cash 30 June 2005 489,624
5. Analysis of changes in net funds
Brought Cash Non-cash 30 June
Forward flows movements 2005
£ £ £ £
Cash at bank and in - 489,624 - 489,624
Loans - 500,000 (500,000) -
Total - 989,624 - 489,624
6. Shareholders' funds
On 22 November 2004 the Company was incorporated with an authorised share
capital of 1,000 £1 ordinary shares, of which 1 £1 ordinary share was allotted
at par for cash.
On 18 January 2005 the share capital was subdivided into 100,000 shares of £0.01
each and, on the same date, the share capital was increased by the creation of
124,900,000 shares, increasing the value of the authorised share capital to
On 18 January 2005 43,367,200 ordinary shares of £0.01 each were issued in
exchange for the whole issued share capital of TV Commerce Limited.
A further 20,662,332 ordinary shares of £0.01 each were issued on 10 February
2005 for a total cash consideration of £1,248,740.
On 17 March 2005 150,000 ordinary shares of £0.01 each were issued for cash
consideration of £9,000.
INDEPENDENT REVIEW REPORT TO TV COMMERCE HOLDINGS PLC
We have been instructed by the Company to review the financial information which
comprises the consolidated profit and loss account, the consolidated balance
sheet, the consolidated cash flow statement and the related notes. We have read
the other information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with the
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the AIM Rules of
the London Stock Exchange which require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with United Kingdom Auditing Standards and therefore
provides a lower level of assurance than an audit. Accordingly we do not express
an audit opinion on the financial information. This report, including the
conclusion, has been prepared for and only for the company for the purposes of
the AIM Rules of the London Stock Exchange and for no other purpose. We do not,
in producing this report, accept or assume responsibility for any other purpose
or to any other person to whom this report is shown or into whose hands it may
come save where expressly agreed by our prior consent in writing.
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2005.
CLB Littlejohn Frazer
1 Park Place
25 July 2005
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