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Just Group PLC (JUS)

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Tuesday 04 July, 2000

Just Group PLC

Final Results

Just Group PLC
4 July 2000
                                       
                JUST GROUP ANNOUNCES RECORD FULL YEAR RESULTS

Just Group plc ('Just'), the integrated media group, today announced record
results for the 12 months ending 30 April 2000. Pre-tax profit increased to
£1.2m (1999: £0.003m) on turnover of £11.8m, up 55% from £7.6m. These strong
results reflect in particular the contribution from Jellikins, whose children
TV series has now been placed in over 40 countries worldwide. Just Group now
has four additional TV productions in development for Butt-Ugly Martians,
Pinky & Perky, Macdonald's Farm and Star Hill Ponies, which are expected to
facilitate substantial future growth for the Company.

Highlights
                                30th April   30th April   Change
                                      2000         1999
                                              
Profit before tax                    £1.2m      £0.003m       
Turnover                            £11.8m      £7.6m      + 55%
Gross profit                         £5.3m      £2.0m      + 164%
Gross margin                         45.2%      26.5%      + 70%
Earnings per share                   0.14p        Nil   

Licensing & Entertainment:
* Butt-Ugly Martians has been sold to ITV for broadcast in Autumn 2000
* Macdonald's Farm has been sold to GMTV for broadcast in November 2000
* Star Hill Ponies, co-produced with BBC and S4C, has a second series under
development
* Pinky & Perky was re-launched in January 2000 and Just is in advanced
discussions with broadcast, manufacturing and licensing partners
*  Major  successes at the 2000 New York Licensing show resulting in
significant broadcast licenses for major Just entertainment properties now
under negotiation
  
Publishing:
* Contract to publish Warner Bros. licensed comics extended until the end of
2001
* New magazines to be published to support the launch of Just's entertainment
projects

Consumer products:
* Significant benefits expected from Jellikins new lengthened prime time slot
on GMTV on Saturday mornings, taking nearly 50% of the target audience share.
Over 600,000 viewers tuned in during one episode in June - an all time high
for the series
* Distribution agreement signed with Bevilacqua AG for Jellabies products in
German-speaking territories, where it is now being broadcast by Super RTL

Audio visual:
* Acquisition of Abbey Home Entertainment bringing significant new
entertainment properties to Just's portfolio
* New videos to be produced to support the launch of Just's entertainment
projects
     
In March 2000, Just Group successfully raised £7.3 million through the placing
of 63.8 million shares to 12 leading institutions

Commenting on the results, Wilf Shorrocks, Chief Executive of Just Group,
said:

'These record results, driven by our strategy of adding value to our expanding
portfolio of dynamic entertainment properties, mark a major turning point for
Just Group. Our growth to date has been driven predominantly by the
increasingly popular Jellikins. We now have four additional major premium
entertainment projects in advanced stages, which will be rolled out this year,
and which we believe will deliver real benefits for our shareholders.

'The outlook for Just Group is very encouraging, particularly in light of the
ongoing discussions we are having with the world's leading toy, food and
beverage, electronic games and promotions companies.'

Enquiries:

Wilf Shorrocks, Chief Executive
Graham Calderbank, Finance Director
Just Group plc                               Tel: 01629 814 994

Henry Faure Walker / George Hudson
The Communication Group plc                  Tel: 020 7630 1411
                                             email: [email protected]


Chairman's Statement

This has been an excellent year of progress for Just Group and one in which we
have delivered record results in turnover and profit. Just Group has
established itself as a dynamic integrated media business resulting from the
ownership, creation, development, acquisition and exploitation of intellectual
property. We believe this focussed strategy will deliver substantial growth
opportunities.

Just occupies a unique position in the children's media business through its
ability not only to fully develop a property in-house but also to leverage its
TV entertainment properties into other related areas such as publishing,
audio/visual, master toy development and third party licensing.

This year's record results have primarily been generated from one
entertainment property, Jellikins (Jellabies outside of the UK). Currently
Just Group has four additional TV productions, at various stages of
development, which are expected to facilitate continued growth.

Butt-Ugly Martians  - in production and sold to the ITV Network.
Macdonald's Farm    - in production and sold to GMTV, who are co-
                      producers.
Star Hill Ponies    - 13 x 10 minute series in co-operation with the
                      BBC and S4C; a second series is in initial
                      stages of development.
Pinky & Perky       - active ongoing discussions with broadcast,
                      consumer product and licensing partners, prior
                      to the relaunch of these classic characters.

The trading performance of Just Group's four distinct but complementary
business areas is summarised below:

Licensing and Entertainment

Turnover  for the current year totalled £6,207,291 up from £2,721,950  for 
year ended  30  April 1999, with a segmental profit of £3,705,019 up from 
£1,507,933 for the year ended 30 April 1999.

1999 saw a 55% increase in turnover despite delays in the Jellikins TV
project, restricting the Group's ability to place licenses. The year ended 30
April 2000 has seen turnover increase by 128%, including turnover of
US$3,500,000 resulting directly from the June 1999 New York Licensing Show.

In 1998 the Gross Margin generated from licensing was 28.6%, rising to 55.4%
in 1999 and 59.7% in 2000, reflecting Just Group's increased ownership of
intellectual property.
                                        
Following meetings with a number of major toy companies and other potential
licensees at the June 2000 New York Licensing Show, licenses are currently
being negotiated for Butt-Ugly Martians, Macdonald's Farm, Jellabies and other
Group properties, on the basis of which the Board are confident that the year
to 30 April 2001 will see further significant licensing agreements being
finalised.

The acquisition of Abbey Home Entertainment Group Limited ('Abbey') has,
through its ownership of intellectual property such as 'Macdonald's Farm',
'Teddy Trucks', 'Bump' and 'Super Ted', significantly increased the portfolio
of intellectual property available for Just Group to develop and license as
entertainment projects. Coupled with the acquisition of additional rights,
including 'Pinky and Perky', and the Group's rights to develop programming
based on certain classic Roald Dahl properties, such as 'The Giraffe The Pelly
and Me', these are the foundations on which Just Group's future growth will be
built.
     
With this invaluable bank of content the Group is in the process of creating
relationships with broadcasters in the UK, USA and internationally.
Negotiations are ongoing with various territories, including the USA where
extremely promising meetings were held at the recent New York Licensing Show
to discuss opportunities for guaranteed airtime.

Publishing

Turnover for the current year totalled £2,786,595 down from £3,091,940 for the
year ended 30 April 1999, with a segmental profit of £415,464 up from a
segmental loss of (£516,682) for the year ended 30 April 1999, underlining the
strong progress made during the current year.

The primary objectives for the current year are to continue improving
efficiency levels whilst launching additional titles.

* In-house Entertainment Projects

Just Publishing will publish magazines to support the launch of Just Group's
entertainment projects and are currently working on Butt-Ugly Martians and
Macdonald's Farm for which UK broadcast deals have been finalised. Additional
Jellikins titles are also planned.

* Third Party Projects

Warner Bros.

The recent extension by Warner Bros. of its publishing agreement with Just
Publishing is testimony to the quality of the current product range. New
titles are currently being developed with both Warner Bros. and Cartoon
Network as our cornerstone partnership continues to thrive.

Other

Just Publishing is currently in discussions to publish further entertainment
based magazines, capitalising upon the format of the Group's successful
Rugrats magazine produced for Nickelodeon.

Consumer Products

Turnover  for  the current year totalled £2,055,543 up from £1,761,517  for 
the year  ended  30  April  1999,  with a segmental profit  of  £649,787  down
 from £1,017,984 for the year ended 30 April 1999.

The 1999 turnover included some £588,000 of revenue to secure distribution
rights in the UK and certain international territories, for which there was no
associated cost of sales.

The Board expects there to be significant growth in this area as a result of
the following factors:

* Increase in territories in which Jellabies is broadcast leading either to
further distribution agreements in those territories or an opportunity to sell
direct to additional retailers. By way of illustration, Super RTL, a major
German TV broadcaster, is now screening Jellabies, with Bevilacqua AG,
Switzerland's number one distributor, having signed a distribution agreement
for German speaking territories.
  
* Increased awareness in the UK following GMTV's allocation of additional
airtime for Jellikins.

* UK and international distribution agreements to secure territories for
further in-house properties such as Butt-Ugly Martians and Macdonald's Farm
and licensed products such as the Group's Warner Bros. Pocketoons range.

Audio Visual
                                        
Turnover for the 7 months ended 30 April 2000 totalled £700,861 with a
segmental profit of £541,996.

Audio/Video products play a major part in any successful entertainment
project. For example, in 1991 Abbey sold some 2.1 million Teenage Mutant Ninja
Turtles videos in the first year alone, at an average price of circa £5 each.
Abbey will produce videos to support the launch of Just's entertainment
projects and are currently working on Butt-Ugly Martians and Macdonald's Farm
for which UK broadcast deals have been finalised.

Abbey are the owners of the 'Tempo' brand name, synonymous with quality pre
school audio and video products and are the only such products endorsed by the
Pre School Learning Alliance. Just Group is working to develop further this
relationship.

The Board believes the growth prospects of this business are good,
particularly given future launches from our increasing portfolio of
entertainment properties.

Business Development

The broadcast market place is changing rapidly due to the proliferation of
channel formats, segmented audiences and broadcasters now able to pay less for
TV content. This environment will make it more difficult for programme makers
to raise funding. Through its ability to offer integrated opportunities that
generate alternative revenues, Just Group is well placed to become a leading
supplier of TV programming.

The Board is focussed on exploiting the Group's intellectual property
portfolio through all media, of which the Internet is an integral element.
Technical expertise is currently being recruited to ensure the successful
development of this segment of our business.

Just Group has evolved into a fully rounded media company primarily UK based
and it is the Board's intention to role out this successful formula initially
in to the USA and thereafter internationally.

Financing

In July 1999 the Group raised £3,560,000, net of expenses, through an open
offer to shareholders, at 3p per share, partly to finance the acquisition of
Abbey Home Entertainment Group Limited but also to maximise the revenues,
profits and hence shareholder value derived from the Jellabies (Jellikins
(UK)) TV series.

In March 2000 the Group raised £7,330,027, before expenses, through the
placing of 63,739,367  New Ordinary Shares of 1p, including 61,470,000 shares
to 12 leading institutions. The placing, at 11.5p, represented 9.7% of the
Company's issued share capital and was primarily to facilitate the development
and initial marketing of the Group's new raft of entertainment projects,
including the Butt-Ugly Martians.

Group Board Appointment

During the year the Group Board has been strengthened with the appointment of
three additional Non-Executive Directors.

On 1 June 1999 Tony Caplin was appointed as a Non-Executive Director. Tony has
significant experience in the technology field, being Non-Executive Chairman
of ERA Group Plc and Keystone Software Plc, as well as a Non-Executive
Director of Easynet Group Plc.

On 30 September, as part of the acquisition of Abbey, Ian Miles was appointed
as a Non-Executive Director. Ian Miles and his alternate, Anne Miles, have
considerable experience both in the audio video market and also the
development of pre school entertainment properties.

On 22 November 1999 I was appointed as a Non-Executive Director of Just Group
and on 10 December I replaced Ronnie Lagden as Non-Executive Chairman. My
background combines experience in fmcg Marketing and Corporate Finance,
including private interests in publishing and television production where I
have been Deputy Chairman of the Mentorn Group since 1992.

On behalf of the Board, I would like to take this opportunity to thank Ronnie
Lagden for the major contribution that he has made to the Group and to record
our pleasure that he remains on the Board as a Non-Executive Director.

Dividend

Whilst the Board has not recommended the payment of a dividend for the current
year, thereby retaining the company's earnings to fund expansion, this is a
matter that will be kept under constant review.

Future Prospects

The transformation of Just Group into a dynamic integrated media business has
resulted from significant investment in new as well as previously existing
business areas, thereby providing increasingly for future growth in turnover,
profits and shareholder value. The Board considers the Company to be well
positioned for the future.

In conclusion I would like to thank all of the Group's employees for the major
contribution they have made to the Group's success during the current year.


K.T.C. Gutteridge
Chairman



Consolidated profit and loss account       Notes          2000         1999
For the year ended 30 April 2000                             £            £
                                                                     
Turnover                                                             
Existing operations                                 11,047,069    7,575,407
Acquisitions                                           703,221            -
                                                    ----------   ----------
                                             2      11,750,290    7,575,407
                                                    ----------   ----------
Cost of sales                                      (6,438,024)  (5,566,172)
                                                    ----------   ----------
Gross profit                                         5,312,266    2,009,235
Administrative expenses                            (4,039,504)  (1,975,779)
                                                    ----------   ----------
Operating profit before goodwill                                     
amortisation                                         1,272,762       33,456
Goodwill amortisation                                 (88,060)            -
                                                    ----------   ----------
Operating profit                                     1,184,702       33,456
Existing operations                                    759,912       33,456
Acquisitions                                           424,790            -
                                                    ----------   ----------
Profit before finance charges                        1,184,702       33,456
Interest receivable and similar income                  78,482       28,392
Interest payable and similar charges                  (59,696)     (59,179)
                                                    ----------   ----------
Profit on ordinary activities before                                 
taxation                                             1,203,488        2,669
Tax on profit on ordinary activities         3       (361,017)            -
                                                    ----------   ----------
Profit on ordinary activities after                                  
taxation, being profit for the financial                             
year transferred to reserves                           842,471        2,669
                                                    ==========   ==========
Earnings per ordinary share                                          
- Basic                                      4           0.14p        0.00p
- Diluted                                    4           0.13p        0.00p
                                                    ==========   ==========
                                                                     
All of the above derive from continuing operations.

There are no recognised gains or losses in 2000 or 1999 other than the profit
for the financial year.

A statement of movements in reserves is given in note 7.

The preliminary accounts were approved by the Board on 3 July 2000.

Consolidated balance sheet                 Notes          2000         1999
30 April 2000                                                £            £
                                                                     
Fixed assets                                                         
Intangible assets                            5       4,877,051      317,068
Tangible assets                                      1,326,680      748,403
                                                    ----------   ----------
                                                     6,203,731    1,065,471
                                                    ----------   ----------
Current assets                                                       
Stocks                                                 554,207      277,869
Debtors due within one year                          4,304,792    1,520,178
Debtors due after more than one year                 4,997,067    3,055,823
Cash at bank and in hand                             6,856,503       55,553
                                                    ----------   ----------
                                                    16,712,569    4,909,423
Creditors: Amounts falling due within one                            
year                                               (3,329,729)  (1,870,364)
                                                    ----------   ----------
Net current assets                                  13,382,840    3,039,059
                                                    ----------   ----------
Total assets less current liabilities               19,586,571    4,104,530
Creditors: Amounts falling due after more                            
than one year                                      (1,905,109)  (1,335,542)
Provisions for liabilities and charges                (14,427)      (5,572)
                                                    ----------   ----------
Net assets                                          17,667,035    2,763,416
                                                    ==========   ==========
Capital and reserves                                                 
Called-up share capital                              7,209,685    4,886,730
Shares to be issued                                    275,000            -
Share premium account                        7      10,931,888    1,665,535
Merger reserve                               7       1,744,332    (439,900)
Profit and loss account                      7     (2,506,478)  (3,348,949)
                                                    ----------   ----------
Shareholders' funds (all equity)                    17,654,427    2,763,416
                                                    ==========   ==========
Minority interest                                       12,608            -
                                                    ----------   ----------
Total capital employed                              17,667,035    2,763,416
                                                    ==========   ==========
                                                                     
The accompanying notes are an integral part of this consolidated balance
sheet.

Consolidated cash flow statement                          2000         1999
For the year ended 30 April 2000                             £            £
                                                                     
Net cash outflow from operating                                      
activities                                   8     (1,948,610)  (1,011,087)
                                                    ----------   ----------
Returns on investments and servicing of                              
finance
Interest received                                       78,482       28,392
Interest paid                                         (45,797)     (45,871)
Interest element of finance lease rental                       
payments                                              (13,899)     (13,308)
                                                    ----------   ----------
Net cash outflow from returns on                                     
investments and servicing of finance                    18,786     (30,787)
                                                    ----------   ----------
Taxation                                                             
UK corporation tax paid                               (57,381)            -
                                                    ----------   ----------
Capital expenditure and financial                                    
investment
Purchase of tangible fixed assets                    (624,929)    (358,833)
Disposal of tangible fixed assets                       10,635          400
Purchase of intangible fixed assets          5     (1,203,435)    (306,020)
                                                    ----------   ----------
Net cash outflow                                   (1,817,729)    (664,453)
                                                    ----------   ----------
Acquisitions                                                         
Cash acquired upon acquisition of                                    
subsidiary undertakings                      6          73,266            -
Overdraft assumed upon acquisition of                                
subsidiary undertakings                      6       (209,095)            -
Loan repaid upon acquisition of                                      
subsidiary undertaking                       6       (575,000)            -
                                                    ----------   ----------
Net cash outflow from acquisitions                   (710,829)            -
                                                    ----------   ----------
Net cash outflow before financing                  (4,515,763)  (1,706,327)
                                                    ----------   ----------
Financing                                                            
Issue of ordinary share capital                     12,063,579    2,461,880
New loans                                              111,171            -
Repayment of loans                                    (51,042)    (386,123)
Expenses of share issue                              (708,788)    (211,666)
Repayment of unsecured redeemable loan                               
notes                                                        -    (221,276)
Capital element of loan repayments                    (11,787)            -
Capital element of finance lease rental                              
payments                                              (86,420)     (65,563)
                                                    ----------   ----------
Net cash inflow from financing                      11,316,713    1,577,252
                                                    ----------   ----------
Increase / (decrease) in cash in the                                 
period                                               6,800,950    (129,075)
                                                    ==========   ==========
                                                                     
Reconciliation of net cash flows to movements in net debt

                                                           2000       1999
                                                              £          £
Increase / (decrease) in cash in the period           6,800,950  (129,075)
Cash inflow/(outflow) from change in debt and lease                 
financing                                               149,249    224,339
                                                      ---------  ---------
Change in net debt resulting from cash flows          6,950,199     95,264
Other non cash changes                                (237,353)    340,054
                                                      ---------  ---------
Movement in net debt                                  6,712,846    435,318
Net debt at beginning of period                       (157,308)  (592,626)
                                                      ---------  ---------
Net debt at end of period                             6,555,538  (157,308)
                                                      =========  =========
                                                                    
The accompanying notes are an integral part of this consolidated cash flow
statement.

1. Accounting policies
The accounts have been prepared under the historical cost convention in
accordance with applicable accounting standards and on the same basis as in
previous financial periods.

2. Segmental information
The directors regard the group as carrying on the business of licensing and
merchandising of concepts and characters in the children's toy and
entertainment sector, together with the ownership of character rights, the
manufacture of children's toys, the distribution of audio/video products and
the publishing of magazines and comics.

Analysis of turnover and profit by class of business

                           Licensing                Consumer
                     & Entertainment                Products
              ----------    ---------   ---------    --------
                    2000         1999        2000        1999
Turnover by                                             
class of
business
Total sales    6,373,152    2,851,285   2,331,581   1,920,402
Inter-                                                  
segmental                                               
sales            165,861      129,335     276,038     158,885
Sales to                                                
third                                                   
parties        6,207,291    2,721,950   2,055,543   1,761,517
               ---------    ---------  ----------   ---------
Segment                                                 
profit/                                                 
(loss)         3,705,019    1,507,933    649,787    1,017,984
               ---------    ---------  ----------   ---------
Common                                                  
costs
                                                        
Operating                                               
profit/(loss)
Interest                                                
receivable
and similar
income
Interest                                                
payable and
similar
charges
Profit on                                               
ordinary
activities
before
taxation
Segment net                                             
assets/(li-                                             
abilities)    19,812,493    5,317,249    (54,768)   (133,319)
              ==========   ==========   =========   =========


                                       
                           Publishing       Audio/Visual
               ---------     ---------  ---------   -----
                    2000          1999      2000    1999
Turnover by                                           
class of
business
Total sales    2,786,595     3,091,940    700,861       -
Inter-                                                
segmental                                             
sales                  -             -         -        -
Sales to                                              
third                                                 
parties        2,786,595     3,091,940    700,861       -
               ---------     ---------  ---------   -----
Segment                                               
profit/                                               
(loss)           415,464     (516,682)    541,996       -
               ---------     ---------  ---------   -----
Common                                                
costs
                                                      
Operating                                             
profit/(loss)
Interest                                              
receivable
and similar
income
Interest                                              
payable and
similar
charges
Profit on                                             
ordinary
activities
before
taxation
Segment net                                           
assets/(li-                                           
abilities)   (2,604,543)   (2,420,514)    513,853       -
              ==========    ==========  =========   =====

                        
                               Total
              ---------    ---------
                   2000         1999
Turnover by                   
class of
business
Total sales  12,192,189    7,863,627
Inter-                        
segmental                     
sales           441,899      288,220
Sales to                      
third                         
parties      11,750,290    7,575,407
              ---------    ---------
Segment                       
profit/                       
(loss)        5,312,266    2,009,235
             ----------     --------
Common                        
costs       (4,127,564)  (1,975,779)
              ---------   ----------
Operating                     
profit/(loss) 1,184,702       33,456
Interest                      
receivable                    
and similar                   
income           78,482       28,392
Interest                      
payable and                   
similar                       
charges        (59,696)   (59,179)
              ---------    ---------
Profit on                     
ordinary                      
activities                    
before                        
taxation      1,203,488        2,669
Segment net                   
assets/(li-                   
abilities)   17,667,035    2,763,416
             ==========   ==========


3. Tax on profit on ordinary activities
                                                      2000      1999
                                                         £         £
UK current year taxation                                        
UK corporation tax                                 401,396         -
Deferred taxation                                      156         -
                                                   --------  --------
                                                   401,552         -
                                                   --------  --------
Prior years                                                     
UK corporation tax                                 (49,234)        -
Deferred taxation                                    8,699         -
                                                   --------  --------
                                                   (40,535)        -
                                                   --------  --------
                                                    361,017        -
                                                   ========  =======

4. Earnings per ordinary share
The calculation of earnings per share is based on the profit for the year of
£842,471 (1999 - profit of £2,669).

The calculations of earnings per share are based on the following numbers of
shares.

Weighted average number of shares:

                                    Basic                    Diluted
                                  -----------               -----------
                                2000         1999         2000        1999
For basic earnings per share 621,978,324  413,189,499  621,978,324 413,189,499
Exercise of share options             -            -   52,400,000  19,875,625
                              ---------    ---------    ---------   ---------
For diluted earnings 
per share                    621,978,324  413,189,499  674,378,324 433,065,124
                              =========    =========    =========   =========

5. Intangible fixed assets
Group                                  Licensing     Trade      
                             Goodwill    rights      marks     Total
                                    £         £          £         £
Cost                                                            
1 May 1999                          -   285,065     62,918   347,983
Additions                   2,180,230 1,173,760     29,675 3,383,665
Acquisition of subsidiary           - 1,363,033          - 1,363,033
                             --------  --------   --------  --------
30 April 2000               2,180,230 2,821,858     92,593 5,094,681
                             ========  ========   ========  ========
Amortisation                                                    
1 May 1999                          -    16,410     14,505    30,915
Charge for the year            88,060    86,698     11,957   186,715
                             --------  --------   --------  --------
30 April 2000                  88,060   103,108     26,462   217,630
                             ========  ========   ========  ========
Net book value                                                  
30 April 2000               2,092,170 2,718,750     66,131 4,877,051
                             ========  ========   ========  ========
30 April 1999                       -   268,655     48,413   317,068
                             ========  ========   ========  ========



6. Acquisitions of businesses
On 10 May 1999 the Group completed the acquisition of the assets and
operations of Newsstand Publications Limited.  The results of the business are
included in the consolidated financial statements from 11 May 1999.

On 30 September 1999 the Group acquired Abbey Home Entertainment Group
Limited. The results of the business are included in the consolidated
financial statements from 1 October 1999.

The following table sets out the fair value to the Group of the identifiable
assets and liabilities acquired.



                                       Newsstand     Abbey Home         
                                    Publications  Entertainment          Total
                                         Limited  Group Limited   Acquisitions
                                            1999           1999           1999
Fixed assets                                   £              £              £
Tangible fixed assets                     32,522          1,188         33,710
Intangible fixed assets                        -      1,363,033      1,363,033
Current Assets                                                          
Stock                                          -         15,000         15,000
Debtors                                  141,879        241,359        383,238
Cash                                      73,027            239         73,266
                                      ----------     ----------     ----------
Total assets                             247,428      1,620,819      1,868,247
                                      ----------     ----------     ----------
Creditors                                                               
Overdraft                                      -      (209,095)      (209,095)
Loan                                           -      (575,000)      (575,000)
Creditors                              (247,424)      (310,600)      (558,024)
                                     -----------   ------------    -----------
Total liabilities                      (247,424)    (1,094,695)    (1,342,119)
                                     -----------   ------------    -----------
Net assets                                     4        526,124        526,128
Minority interests                             -       (12,608)       (12,608)
Goodwill                                 349,996      1,830,234      2,180,230
                                     -----------   ------------    -----------
Purchase consideration                   350,000      2,343,750      2,693,750
                                     ===========   ============    ===========
Satisfied by:                                                           
Shares issued                            275,000      2,143,750      2,418,750
Shares to be issued                       75,000        200,000        275,000
                                     -----------   ------------    -----------
                                         350,000      2,343,750      2,693,750
                                     ===========   ============    ===========
                                                                        
No trading was recorded by Newsstand Publications Limited during the period
from its last accounts dated 30 April 1999 to the acquisition date of 10 May
1999.

Abbey Home Entertainment Group Limited incurred a loss after tax and minority
interest of (£187,911) in the year ended 30 April 2000, of which a loss of
(£198,077) arose from the period from 1 March 1999 to 30 September 1999.




The summarised profit and loss account for the period from 25 November 1998 to
30 September 1999, shown on the basis of the accounting policies of Abbey Home
Entertainment Group Limited prior to the acquisition, is as follows:

                                                     £
Turnover                                       401,561
Cost of sales                                (196,296)
                                            ----------
Gross profit                                   205,265
Other operating expenses                     (401,067)
                                            ----------
Operating loss                               (195,802)
Interest                                      (24,711)
                                            ----------
Loss on ordinary activities before tax       (220,513)
                                            ----------
Tax                                             22,436
                                            ----------
Loss for the financial period                (198,077)
                                            ==========


7. Reserves
                                               Share                  
                                             premium     Merger    Profit and
                                             account    reserve  loss account
Group                                              £          £             £
At 1 May 1999                              1,665,535  (439,900)   (3,348,949)
Premium on shares issued                   9,975,141          -             -
Expenses of share issue                    (708,788)          -             -
Acquisition of Abbey Home Entertainment                               
Group Ltd                                          -  1,968,754             -
Acquisition of Newsstand Publications                                 
Ltd                                                -    215,478             -
Profit for the financial year                      -          -       842,471
                                           ---------  ---------   -----------
At 30 April 2000                          10,931,888  1,744,332   (2,506,478)
                                           =========  =========   ===========
                                                                      
                                                                      

8. Reconciliation of operating profit to net cash outflow from operating
activities

                                                2000         1999
                                                   £            £
Operating profit                           1,184,702       33,456
Depreciation and amortisation                360,135      142,694
Loss on disposal of fixed assets               6,493            -
Increase in debtors                      (4,728,395)  (2,098,284)
Increase in creditors                      1,612,566      922,088
Increase in stocks                         (276,338)     (11,041)
Debtors acquired                             360,800            -
Creditors acquired                         (483,573)            -
Stock acquired                                15,000            -
Net cash outflow from operating                           
activities                               (1,948,610)  (1,011,087)
                                           =========  ===========


9. Analysis and reconciliation of net debt
                               At 1 May               Other non-   At 30 April
                                   1999  Cash flow  cash changes          2000
                                      £          £             £             £
Cash at bank and in hand        195,466  6,661,037             -     6,856,503
Overdraft                     (139,913)    139,913             -             -
                              ---------  ---------   -----------    ----------
                                 55,553  6,800,950             -     6,856,503
Finance leases                (161,819)     86,420     (126,182)     (201,581)
Loans due in less                                                        
than one year                  (51,042)      62,829      (39,580)     (27,793)
Loan due in more                                                        
than one year                         -          -      (71,591)      (71,591)
                              ---------  ---------   -----------    ----------
Total                         (157,308)  6,950,199     (237,353)     6,555,538
                              =========  =========   ===========    ==========

10. Reconciliation of movements in group equity shareholders' funds
                                                         2000        1999
                                                            £           £
Opening equity shareholders' funds                  2,763,416     559,533
                                                    ---------   ---------
Profit for the period                                 842,471       2,669
New share capital issued                           14,482,328   2,461,880
Shares to be issued                                   275,000           -
Expenses of share issue                             (708,788)   (211,666)
Purchased goodwill written off                              -    (49,000)
                                                    ---------   ---------
Net addition to/(reduction in) equity                              
shareholders' funds                                14,891,011   2,203,883
                                                    ---------   ---------
Closing equity shareholders' funds                 17,654,427   2,763,416
                                                    =========   =========


                                                                                
                                                                                
                                    

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