TIDMGON
RNS Number : 7310F
Galleon Holdings PLC
20 June 2012
20 June 2012
Galleon Holdings plc
("Galleon", "the Company" or "the Group")
Interim results for the six months ended 31 March 2012
Galleon Holdings plc (AIM: GON), the AIM quoted entertainment
media company that is a publisher of digital content in China
across both online and mobile platforms, is pleased to announce its
interim results for the six months ended 31 March 2012.
Interim Highlights:
-- Loss Before Tax* of GBP0.9m (2011: Loss Before Tax* of GBP1.7m)
-- EBITDA loss of GBP0.7m (2011: EBITDA loss of GBP1.6m)
-- Launch of second exclusive online game, Revenge of the Titans
*Adjusted loss before tax is before charges for the impairment
of goodwill and share options expense
Enquiries:
Galleon Holdings plc www.galleonplc.com
Hayden Eastwood, Chief Financial Officer Tel: 020 8987 0011
Nominated Adviser & Broker
Cairn Financial Advisers LLP Tel: 020 7148 7900
James Caithie / Avi Robinson
CHAIRMAN'S STATEMENT
The first half of the year has seen the Group focussed on
developing new content and revenue streams for its digital
operations.
China Digital Operations
The focus in the first half of the year has been on securing a
pipeline of content for launch on our online platform in China.
This has seen a number of challenges with working with third party
developers in China, and in particular, changes in personnel,
technical issues, quality issues and limited resources have
resulted in unexpected delays in the delivery of games to market.
This slippage in delivery has had a direct impact on revenues and
profitability to date and compounded recently to mean it is now
unlikely we can now deliver a profit for the full year. We have
redirected our resources to helping resolve these slippages and
feel progress has been made in ensuring new games reach market as
soon as possible to provide the critical mass we need to drive the
business forward.
Despite these slippages, the pipeline of games for the second
half of the year looks strong. We intend to launch a 3D Chinese
Mythology game, currently titled 'List of Gods', and one further
game before the financial year end. We are also in discussions to
launch 'Happy Tank', an RPG MMO social game, on one of the largest
gaming and social networking portals in China. This is an exciting
opportunity and will further diversify our revenue streams.
We recently signed a deal with a partner in South Korea who has
licensed 'Revenge of Titans' in the territory for an upfront
advance and ongoing profit share. We are in negotiations with
partners in other territories for similar deals. We also opened a
new portal in Taiwan, www.wowan.tw, in addition to our European
portal for English language version games www.yipeegame.com. We
intend to grow the users in these portals over the coming months to
further drive revenues from both our existing and upcoming
portfolio of games wherever possible.
We have significantly improved our gross profit (up GBP550k
during the period) despite revenues remaining relatively flat due
to slippages in delivery of new games and 'Revenge of the Titans'
not compensating for a decline in 'Saga of Heroes' revenues, which
has been in market for 18 months now. The increase in gross profit
is as a direct result of our digital operations and demonstrates
that as a game matures in market, media costs for that game decline
and margins improve. Whilst the cost of attracting new users has
increased, this demonstrates there is still a place for exclusive
games on our portal. Having said that we will look to diversify our
revenue streams and reduce expenditure wherever possible. We will
look to optimise revenues by adopting strategies for the release of
each game that will provide revenues and profitability sooner where
applicable.
Our online portals now have more than 10m registered users.
These portals and the infrastructure we have built prepare us well
for growth. Whilst this overhead and lack of activity has put
additional pressures on profitability and cash flow, we do believe
that we are well placed to take advantage of the growth from new
games and the sector in general. We plan to increase activity with
the launch of new games to the site whilst also looking to
diversify our revenue streams through joint operators, third party
portals, licensing and overseas portals in an endeavour to grow
revenues and return to profitability.
Croco
Croco continues to provide innovation in the in pack promotions
sector for some of the largest chocolate, drinks and snacks
companies. Croco has already secured orders totalling GBP3.6m which
will be recognised this financial year. We are continuing to work
closely with customers and, where necessary, are changing our
business model accordingly to ensure we continue to deliver
innovative products at margins that will see the business return to
profitability and further take advantage of the growth
opportunities we are seeing in the market for our
services. We expect to announce new orders in the coming months.
Entertainment - Other
Whilst not our primary focus, we continue to exploit
opportunities for our intellectual property as they arise. We have
a number of conversations ongoing with partners for the rights to
Super Soccer Star and in the first half of the year licensed the TV
rights to Skunk Fu to the most popular children's channel in China
which is a great achievement for the property and may generate
ancillary revenues for the Company.
Outlook
We are conscious we need to deliver on our plans and return to
profitability as soon as possible. We believe that by taking the
steps outlined above we can achieve this in the short term and
reduce the risk of achieving this by diversifying our revenue
streams. We are working closer than ever before with our developers
and are confident we can deliver the growth and opportunities for
which we have laid strong foundations.
David Wong, Executive Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 March 2012
Unaudited Unaudited Audited
Six months Six months Year
ended 31 ended 31 ended 30
March March September
2012 2011 2011
Note GBP'000 GBP'000 GBP'000
Revenue 3 4,947 4,893 10,887
Cost of sales (4,166) (4,667) (9,814)
Gross profit 781 226 1,073
Administrative expenses (1,676) (1,986) (3,908)
Loss from operations (895) (1,760) (2,835)
Share of operating loss of
associate - (10) -
Finance income 1 2 4
Finance costs (82) (9) (53)
Loss before taxation (976) (1,777) (2,884)
Taxation credit 4 140 110 336
Loss for the financial year (836) (1,667) (2,548)
Non-controlling interest 61 - 119
Loss for the financial year
attributable to the equity
holders of the company (775) (1,667) (2,429)
=========== =========== ==========
Other comprehensive income
Foreign exchange (59) 176 565
Total comprehensive expenditure
for the period attributable
to equity holders of the company (834) (1,491) (1,864)
=========== =========== ==========
Loss per share
- Basic 5 (0.5p) (1.0p) (1.5p)
=========== =========== ==========
- Diluted 5 (0.5p) (1.0p) (1.5p)
=========== =========== ==========
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 March 2012
Total
attributable
Capital Foreign to owners Non-
Share Share redemption Other exchange *Retained of the controlling Tota
capital Premium reserve reserves reserve earnings Company interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At 30 September
2010 (audited) 1,674 26,269 9,601 210 1,924 (32,340) 7,338 - 7,338
Share based
payments - - - - - 117 117 - 117
Transactions
with owners - - - - 117 117 - 117
Loss for the
year and total
recognised income
and expenditure
for the period - - - - - (1,667) (1,667) - (1,667)
Foreign exchange
gain - - - - 176 - 176 - 176
Total comprehensive
income/(expenditure)
for the period - - - - 176 (1,667) (1,491) - (1,491)
At 31 March
2011 (unaudited) 1,674 26,269 9,601 210 2,100 (33,890) 5,964 - 5,964
======== ======== ========== ========= ======== ========= ============ ============ =======
Issue of share
capital - - - - - - - -
Share based
payments - - - - - (293) (293) - (293)
Transactions
with owners - - - - - (293) (293) - (293)
Profit for the
year and total
recognised income
and expense
for the period - - - - - (762) (762) (119) (881)
Foreign exchange
loss - - - - 389 - 389 - 389
Total comprehensive
(expenditure)/income
for the period - - - - 389 (762) (373) (119) (492)
At 30 September
2011 (audited) 1,674 26,269 9,601 210 2,489 (34,945) 5,298 (119) 5,179
======== ======== ========== ========= ======== ========= ============ ============ =======
Share based
payments - - - - - 96 96 - 96
Transactions
with owners - - - - - 96 96 - 96
Loss for the
year and total
recognised income
and expenditure
for the period - - - - - (775) (775) (61) (836)
Foreign exchange
gain - - - - (59) - (59) - (59)
Total comprehensive
(expenditure)
for the period - - - - (59) (775) (834) (61) (895)
At 31 March
2012 (unaudited) 1,674 26,269 9,601 210 2,430 (35,624) 4,560 (180) 4,380
======== ======== ========== ========= ======== ========= ============ ============ =======
*Retained earnings include a share based payment reserve of
GBP452,000 at 31 March 2012 (31 March 2011: GBP649,000, 30
September 2011: GBP356,000).
CONSOLIDATED STATEMENT OF FINancial position
At 31 March 2012
Unaudited Unaudited Audited
31 March 31 March 30 September
2012 2011 2011
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Property, plant and equipment 311 318 374
Goodwill 3,049 2,942 3,079
Intangible assets 412 581 131
Other non-current assets - 85 -
3,772 3,926 3,584
========== ============== =============
Current assets
Inventories 1,071 463 797
Trade and other receivables 2,576 1,525 3,270
Cash and cash equivalents 444 2,001 665
4,091 3,989 4,732
Total assets 7,863 7,915 8,316
========== ============== =============
LIABILITIES
Current liabilities
Trade and other payables 2,380 1,657 2,089
Borrowings 850 - 950
Corporation Tax 253 294 98
3,483 1,951 3,137
Total liabilities 3,483 1,951 3,137
========== ============== =============
EQUITY
Share capital 1,674 1,674 1,674
Reserves 2,886 4,290 3,624
Equity interests attributable
to equity holders of the company 4,560 5,964 5,298
Non-controlling interest in
equity (180) - (119)
____________
Total equity 4,380 5,964 5,179
Total equity and total liabilities 7,863 7,915 8,316
========== ============== =============
STATEMENT OF CONSOLIDATED CASH FLOWS
For the six months ended 31 March
2012
Unaudited Unaudited Audited
Six months Six months Year
ended 31 ended 31 ended 30
March March September
2012 2011 2011
GBP'000 GBP'000 GBP'000
Operating activities
(Loss) for the period (836) (1,667) (2,548)
Taxation (140) (110) (336)
Share of operating loss of associate - 10 -
Net finance costs 81 7 49
Loss on sale of property, plant
and equipment - - 26
Depreciation of property, plant
and equipment 110 79 184
Impairment of intangible assets - 393
Amortisation of intangible assets 96 95 221
Debtors written off - - 37
(Increase) / Decrease in inventories (293) 367 (229)
Decrease / (increase) in trade
and other receivables 956 904 (310)
Increase / (decrease) in trade
and other payables 313 (294) 71
Share based payments 96 117 (175)
383 (492) (2,617)
Taxation received 4 (32) (8)
Net interest (paid) (81) (7) (49)
Net cash (outflows) / inflow
from operating activities 306 (531) (2,674)
Investing activities
Purchase of property, plant
and equipment (51) (153) (312)
Purchase of intangible assets (382) (160) (220)
Purchase of investment - (96) -
Net cash outflow from investing
activities (433) (409) (532)
Financing activities
Receipt from borrowings (100) - -
Repayment of loan - - 950
Net cash (outflow) / inflow
from financing activities (100) - 950
Decrease in cash and cash equivalents (227) (940) (2,256)
Cash and cash equivalents brought
forward 665 2,850 2,850
Exchange differences on cash
and cash equivalents 6 91 71
Cash and cash equivalents carried
forward 444 2,001 665
=========== =========== ==========
NOTES TO THE INTERIM REPORT
1. GENERAL INFORMATION
Galleon Holdings plc, a Public Limited Company is incorporated
and domiciled in the United Kingdom.
Galleon Holdings plc is primarily a publisher of digital content
in China across both online and mobile platforms. It also has a
Product IP Division that provides innovative marketing devices for
fast moving consumable goods and an Entertainment Division that
develops multi-platform branded formats designed to establish a
direct, interactive relationship with the viewer.
The financial information set out in the interim report does not
constitute statutory accounts as defined in Section 434 of the
Companies Act 2006. The Group's statutory financial statements for
the year ended 30 September 2011, prepared under International
Financial Reporting Standards (IFRS), have been filed with the
Registrar of Companies. The auditor's report on those financial
statements was unqualified and did not contain a statement under
Section 498 of the Companies Act 2006.
The interim report was approved by the Board on 19 June
2012.
2. BASIS OF PREPARATION
This consolidated financial information for the six months ended
31 March 2012 has been prepared in accordance with IAS 34, "Interim
Financial Reporting" as adopted by the European Union. The half
yearly consolidated financial report should be read in conjunction
with the annual financial statements for the year ended 30
September 2011, which have been prepared in accordance with IFRS as
adopted by the European Union.
The principal accounting policies of the Group are consistent
with those detailed in the 30 September 2011 financial statements,
which are prepared in accordance with International Financial
Reporting Standards (IFRSs, as adopted by the European Union).
3. Segmental analysis
An analysis of segmental performance is as follows;
Unaudited period ended Product Entertainment Entertainment Unallocated Eliminated Total
31 March 2012 Digital Other
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
From external
customers 1,465 3,407 75 - - 4,947
From other segments - - - - - -
Segment revenues 1,465 3,407 75 - - 4,947
Profit / (loss) before
taxation (80) (503) 25 (418) - (976)
======= =============== =================== ============== ============= =======
Unaudited period ended
31 March 2011
Revenue
From external
customers 1,584 3,293 16 - - 4,893
From other segments 3 - 10 - (13) -
Segment revenues 1,587 3,293 26 - (13) 4,893
Profit / (loss) before
taxation 15 (936) (492) (364) - (1,777)
======= =============== =================== ============== ============= =======
Year ended 30
September
2011
Revenue
From external
customers 3,221 7,600 66 - - 10,887
From other segments 6 - 189 - (195) -
Segment revenues 3,227 7,600 255 - (195) 10,877
(Loss) before taxation (275) (1,360) (730) (519) - (2,884)
======= =============== =================== ============== ============= =======
As at 31 March 2012
Assets 1,395 5,190 1,278 - - 7,863
Liabilities (1,091) (1,601) (791) - - (3,483)
Net Assets 304 3,589 487 - - 4,380
======= =============== =================== ============== ============= =======
As at 31 March 2011
Assets 420 6,693 802 - - 7,915
Liabilities (54) (1,309) (588) - - (1,951)
Net Assets 366 5,384 214 - - 5,964
======= =============== =================== ============== ============= =======
As at 30 September
2011
Assets 1,850 4,618 1,848 - - 8,316
Liabilities (1,218) (739) (1,180) - - (3,137)
Net Assets 632 3,879 668 - - 5,179
======= =============== =================== ============== ============= =======
31 March 2012 31 March 2011 30 September
2011
Revenues Assets Revenues Assets Revenues Assets
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
United
Kingdom - 3,261 17 1,360 32 3,798
China 3,482 4,597 3,292 6,485 7,600 4,517
Rest of
World 1,465 5 1,584 70 3,255 1
Total 4,947 7,863 4,893 7,915 10,887 8,316
=========== ======= =============== ========== =============== ============
4. TAXATION
The tax credit for the period ended 31 March 2012 arises in the
UK and China after allowing for tax losses brought forward.
5. LOSS PER SHARE
Unaudited Unaudited Audited
31 March 31 March 30 September
2012 2011 2011
GBP'000 GBP'000 GBP'000
Loss for the period (836) (1,667) (2,548)
========== ========== ==============
Number Number Number
Weighted average number of shares
in 000's 167,426 167,426 167,426
Share options - 20,689 -
Dilutive average weighted number
of shares in 000's 167,426 188,115 167,426
Basic and diluted loss per share
(pence) (0.5p) (1.0p) (1.5p)
========== ========== ==============
The diluted loss per share is 0.5p (September 2011: 1.5p) as any
amendment to the weighted average number of shares as a result of
including the conversion of share options is anti-dilutive.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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