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DQ Entertainment PLC (DQE)

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Monday 18 August, 2014

DQ Entertainment PLC

Indian subsidiary quarterly results

RNS Number : 3329P
DQ Entertainment PLC
18 August 2014
 



For immediate release                                                                                                                       18 August 2014

                                                  DQ Entertainment plc

                                                     ("DQE" or the "Group")

Indian subsidiary financial results for the quarter ended 30 June 2014

DQ Entertainment International Limited ("DQE India" or the "Company"), a leading animation, gaming, live action entertainment production and distribution company which is 75 per cent owned by DQE, today announces its consolidated un-audited financial results for the quarter ended June 30, 2014.

 

I.             Financial Highlights for the quarter ended June 2014:

Revenue: INR 206  mn (Q1 2013: INR 304 mn)

From Production : INR 99  mn (Q1 2013: INR 276 mn)

From Distribution : INR 107 mn (Q1 2013: INR 28 mn)

EBITDA: INR 5 mn (Q1 2013: INR 206 mn)

Profit (Loss) before tax: INR (142 mn) (Q1 2013: INR 68 mn)

Profit (Loss) after tax: INR (121 mn) (Q1 2013: INR 66 mn)

Adjusted Profit (Loss) after Tax* : INR (117mn) (Q1 2013: INR (118mn)

* the adjusted loss after tax is after deduction of foreign exchange loss  for the quarter of INR 4mn. ( Q1 2013: Foreign exchange gain of INR 184 mn)

As previously reported, due to the seasonality of our business the first and third quarter are generally lower than the second and fourth quarter.

The marked reduction in production revenue in this quarter is due to a significant and unexpected delay in the commissioning of new projects by clients. We have commissioned new productions in July and early August. The market generally remains buoyant, however, the slowdown in the production in Q1 will impact our revenue expectations for the year, but with a good performance from licensing and distribution, we would expect to remain on track to meet management's profit expectations for the year to 31 March 2015.

The distribution revenue of INR 28.52m in the previous corresponding quarter has increased by more than 3.5 times to INR 107 m in the current quarter under review. The Company has now commenced the production of the second season of the Peter Pan TV series and a third season of the Jungle Book TV series is in development .In addition  the productions of Lassie and Robin Hood are ongoing.

The Company is progressing well in its discussions for financing the development and production of its properties and it is hopeful of concluding these soon, but working capital remains under pressure in the meantime as collections of receivables continue to be slow.

 

2.  Operating Highlights:

Drawing on our plans for the year and the current trends in the global animation industry, the Company is moving ahead in some new areas of business as well as seeing growth in our current business divisions.

Our  VFX teams have forayed into providing services for locally produced Live Action feature films and are now gearing up to take on VFX works at an international level. The industry is witnessing an increase in demand for Visual Effects (VFX) content for animated feature films, Live Action thrillers and action films and sci-fi films from Hollywood, Europe and Japan. This will enable DQE to take advantage of its core strengths and capitalize on the demand for CGI/VFX production in USA and Europe.

Our licensing and distribution teams have been successful in closing deals for our IPs in various territories such as Latin America, South East Asia, USA and parts of Europe. Also our team is successfully working on the exploitation of our properties on digital media such as VOD and SVOD.

New associations with leading networks and licensees globally are paving the way to monetize our IPs and co-produced content.  New deals across our portfolio of properties in recent months are with best-in-class partners such as France Television, Nickelodeon, Disney Channel, De Agostini, Sky Italia, 22D Music, Discovery Kids, Rai TV, Italy etc. The promotional deal for The Jungle Book with Burger King Worldwide has been immensely successful and is being extended for another season to many other territories worldwide. In Europe, The Jungle Book has been licensed by Buffalo Grill, a chain of steakhouses based in France with over 328 outlets in Europe.

Completed projects:

·     Manav - 65' 2D Feature with Disney India.

·     Shabiyate - 15x13' CGI TV series with Fanar productions (UAE)

·     NFL Season 3 20 x 22' CGI / 2D TV Series with Rollman Entertainment, USA for Nick Toons (USA)

·     The Jungle Book Season 2 - 52 x 11' 3D TV series being coproduced with ZDF TV (Germany),  TF1 TV (France), Moonscoop (France), ZDF-E (Germany)

·     Iseodo - TV series - Rollman Entertainment USA

·     Lanfeust - 26 x 22' TV Series -  Alphanim, France

·     Peter Pan TV Movie - 70"

 

On- going projects:

·     Peter Pan Season 2 - 26 x 22' CGI TV series with ZDF Germany, De Agostini Italy and Method Animation and France TV.

·     Robin Hood, Mischief in Sherwood - 52 x 11' - CGI TV series with Method Animation and TF1 France, ZDF Germany, ATV Turkey, DeA Kids Italy.

·     Lassie & Friends - 52 x 11' 2D HD TV series with Dreamworks Classic Media USA, Super Prod & TF1 France, ZDF Germany.

·     Little Prince - 3  -26 x 22' CGI TV series with Method Animation and France TV & RAI.

·     Miles from tomorrow land - 22 X 22' CGI from Disney

·     Motion books - ebooks.

 

New projects signed/in development:

•     Popples - 52 x 11' CGI TV series with Saban Entertainment and ZAG toons.

•     Escape Hockey - 52 x 11' CGI TV series IMIRA(Spain)

•     5 Children & It - 52 x 11' CGI TV Series - Disney / Method

•     Yonaguni - 52 x 11' TV series to be produced by with Seaworld & Rollman Entertainment

•     Leo and the Pisa Gang - 52 x 11' CGI TV series with MPP(Germany)

 

The Total contract value for the service/co-production projects signed and in discussion is US $63 Mn to be executed over the next 18 months.

 

Licensing and Distribution:

Our licensing and distribution efforts have proven increasingly successful on a global scale and are helping to create long term and sustained value for DQE.

BROADCAST & HOME VIDEO DEALS SIGNED B/W APRIL - JUNE 2014

SERIAL

PROPERTY

TERRITORIES

1

SKY ITALIA

ROBINHOOD

ITALY

2

PHASE 4

PETER PAN SEASON 1

USA & CANADA

3

ONE VISION

PETER PAN SEASON 1

INDONESIA

4

TELEQUEBEC

PETER PAN SEASON 2

CANADA

5

ZDFE

PETER PAN SEASON 2

GERMAN SPEAKING EUROPE

6

DE AGOSTINI

PETER PAN SEASON 2

ITALY

7

DISNEY

THE LANFEUST QUEST

MIDDLEAST & TURKEY

MERCHANDISING DEALS SIGNED B/W APRIL - JUNE 2014

SERIAL

LICENSEE

PROPERTY

TERRITORIES

CATEGORIES

1

DWI LTD

THE JUNGLE BOOK

SOUTH KOREA

KIDS STUDY TABLE


VIACOM 18

THE JUNGLE BOOK

INDIA

ALL CATEGORIES

2

Vergani Srl

PETER PAN

Italy, San Marino, Vatican City

Chocolate Easter Eggs

3

GDG Group Srl

PETER PAN

Italy, San Marino, Vatican City

plaid cover, underwear tri-pack, pyjamas, hat, scarves, gloves, umbrella, raincoat, caloche, T-shirt, sweatshirt, jogging suit, legging, melamine articles,

4

Buffalo Grill

PETER PAN

France, Switzerland, Luxembourg

QSR promotion

 

 

The Total contract value for the licensing and distribution deals signed is USD 10 mn for the financial year 2014-15.

 

For further information, please visit www.dqentertainment.com or contact:

 DQ Entertainment plc

 Tapaas Chakravarti - Chairman and CEO

 Rashida Adenwala - Director Finance & Investor Relations

 

  Tel: +91 40 235 53726

Allenby Capital Limited

Jeremy Porter / Alex Price

 

Tel: +44(0) 20 3328 5656

Buchanan Communications

Mark Edwards/Clare Akhurst

Tel: +44 (0)20 7466 5000

   www.buchanan.uk.com 

 

Below is an extract from the unaudited financial results of DQE India for the quarter ended 30 June 2014. The full unaudited results are available from the DQE India secton of the BSE website (www.bseindia.com) and NSE website (www.nseindia.com), as well as on DQE's website (www.dqentertainment.com).

 

 

 

DQ ENTERTAINMENT (INTERNATIONAL) LIMITED

Un-Audited Consolidated Financial Results for the quarter ended 30 June 2014

(Rs in million)

Sl.
No

Particulars

 For Quarter ended
 30 June 2014

For Quarter ended 
 31 March 2014

For Quarter ended 
 30 June 2013

 For Year ended
 31 March 2014

(Un-Audited)

(Un-Audited)

(Un-audited)

(Audited)

1

Net Income from Operations

           206.37

       1,018.27

           304.25

       2,396.79

2

Expenditure





a

Production Expenses

             21.51

             156.92

             16.49

         192.50

b

Employee Expenses

           166.39

             133.49

           202.22

         719.56

c

Other Expenses

             50.85

             217.22

             63.43

         481.54

d

Depreciation, Amortisation and Impairment

             76.25

             263.34

             90.85

         552.99

e

Foreign exchange loss / (gain)

              3.92

               92.12

          (183.96)

       (234.62)

f

Expenses transferred to Capital Account

           (41.72)

               (0.35)

                  -  

           (0.35)


Total Expenses [2a to 2f)]

          277.20

            862.74

          189.03

     1,711.62

3

(Loss) / Profit from Operations before Other Income, Interest and Finance expense and Exceptional Items [ 1 -2 ]

           (70.83)

             155.53

           115.22

         685.17

4

Other Income

              4.16

                 3.30

               2.50

           14.47

5

(Loss) / Profit before Interest and Finance expense and Exceptional Items [ 3+ 4 ]

          (66.67)

            158.83

          117.72

        699.64

6

Interest and Finance Expenses

             75.46

               66.64

             50.19

         251.65

7

(Loss) / Profit after Interest and Finance expense but before Exceptional Items. [ 5 - 6 ]

        (142.13)

              92.19

            67.53

        447.99

8

Exceptional items

                 -  

                    -  

                  -  

                -  

9

(Loss) / Profit from Ordinary Activities before tax

        (142.13)

              92.19

            67.53

        447.99

10

Less: Tax expense

           (21.56)

             (54.38)

               1.21

           20.29

11

(Loss) / Profit from Ordinary Activities after tax
[ 9 - 10 ]

        (120.57)

            146.57

            66.32

        427.70

12

Extraordinary Item

                 -  

                    -  

                  -  

                -  

13

(Loss) / Profit for the period [11-12]

        (120.57)

            146.57

            66.32

        427.70

14

Paid-up equity share capital [Face value Rs.10 per share]

           792.83

             792.83

           792.83

         792.83

15

Reserves excluding Revaluation Reserves as per balance sheet of previous accounting year

                 -  

 -

 -

       4,249.16

16

Earnings Per Share [Face value Rs.10 per share]
(not annualised/ in `)






a) Basic

             (1.52)

                 1.85

               0.84

             5.39


b) Diluted

             (1.52)

                 1.85

               0.84

             5.39







17

Public Shareholding






a) Number of Shares

     19,820,782

    19,820,782

     19,820,782

  19,820,782


b) Percentage of shareholding

25%

25%

25%

25%


c) Shares held by custodians against depository receipts

              -  

                 -  

                  -  

             -  







18

Promoters and Promoter group Shareholding






a) Pledged / Encumbered - No. of Shares

     17,838,000

                    -  

                  -  

                -  


Percentage of shares (as a % of the total share holding of promoter and promoter group)

30.00%

                    -  

                  -  

                -  


Percentage of shareholding (as a % of the total share capital of the company)

22.50%

                    -  

                  -  

                -  


b) Non encumbered - No. of Shares

     41,624,218

      59,462,218

     59,462,218

  59,462,218


Percentage of shares (as a % of the total share holding of promoter and promoter group)

70.00%

100%

100%

100%


Percentage of shares (as a % of the total share capital of the company)

52.50%

75%

75%

75%


c) Shares held by custodians against depository receipts

-

-

-

-

 

 

 

Consolidated Segment Revenue and Results

(Rs in million)

Particulars

For Quarter ended 
 30 June 2014

For Quarter ended 
 31 March 2014

For Quarter ended 
 30 June 2013

 For Year ended
 31 March 2014


(Un-audited)

(Un-audited)

(Un-audited)

(Audited)

Segment Revenue





Animation

              99.29

             803.15

          275.73

          1,873.42

Distribution

            107.08

              215.12

             28.52

              523.37

Net Income from Operations

           206.37

          1,018.27

          304.25

          2,396.79






Segment Results 





Animation

             (10.68)

            517.70

          114.61

          1,111.09

Distribution (expense) / income

             (11.92)

                12.49

          (18.59)

             153.20

Unallocated (expense) / income

             (44.07)

           (371.36)

             21.70

          (564.65)

Segment Results  before Interest and Finance Expense and Tax Expenses

            (66.67)

             158.83

          117.72

             699.64

Interest and Finance Expense

             (75.46)

             (66.64)

          (50.19)

          (251.65)

Profit before tax

          (142.13)

                92.19

             67.53

             447.99

Tax  expense

             (21.56)

            (54.38)

              1.21

               20.29

Profit for the period

          (120.57)

             146.57

             66.32

             427.70






Capital Employed





Animation

          2,165.11

          2,100.67

       1,927.99

         2,100.67

Distribution

          6,880.30

         6,031.86

       2,445.62

          6,031.86

Unallocated

        (4,190.21)

       (3,090.54)

         205.34

       (3,090.54)

Total

        4,855.20

         5,041.99

      4,578.95

          5,041.99

 

1) The un-audited consolidated financial results for the quarter ended June 30, 2014 have been taken on record by the Board of Directors at its meeting held on 14th August 2014. The "Un-audited Consolidated Financial Results" have been subjected to the limited review by statutory auditors of the company.

2) Pursuant to Clause 41 of the Listing Agreement, the Company opted to publish only the Consolidated Results of the Company. Investor can view the Standalone results of the Company on the Company's website "www.dqentertainment.com" as well as the website of BSE (www.bseindia.com).

 

 

 

 

 

 

3) Certain Standalone Information of the Company.

                                                                                                                                                               (Rs in million)

 

Particulars

 For quarter ended
 30 June 2014

 For quarter ended
 31 March 2014

 For quarter ended
 30 June 2013

 For Year ended
 31 March 2014



(Un-audited)

(Un-audited)

(Un-audited)

(Audited)


Net Income from Operations

                 142.34

                 663.32

                  272.80

            1,798.10


Profit / (Loss) before tax

               (132.98)

                 117.56

                    79.95

              377.38


Profit / (Loss) after tax

               (111.42)

                 178.41

                    78.74

              363.56


4) Information on investor complaints pursuant to Clause 41 of the Listing Agreement for the quarter ended June 30, 2014.

Nature of complaints

Opening Balance

Received during the quarter

Disposed during the quarter

Closing Balance

Investor complaints

                          -  

               -  

                                                                                  -  

                                      -  

5) Effective from April 1, 2014 the company has revised the useful life of the fixed asset based on the schedule II to the Companies Act 2013, for the purposes of providing depreciation on fixed asset. Accordingly the carrying amount of the assets as on April 1 2014 has been depreciated over remaining revised useful life of the fixed assets. Consequently, the depreciation for the quarter ending 30 June 2014 is lower and the Loss before tax is lower to the extent of Rs. 10.75 mn. Further an amount of Rs. 44.79 mn (Net of Deferred taxes Rs 30.25 mn) representing the carrying amount of the asset with revised useful life as NIL has been charged to the opening balance of retained earnings as on April 1, 2014.

6) Corresponding year and quarter end figures have been regrouped / reclassified wherever necessary.

 


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