Metrodome Group PLC - Final Results

Fri Mar 28, 2008 10:38am GMT

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RNS Number:0145R
Metrodome Group PLC
28 March 2008





                              Metrodome Group PLC
                         ("Metrodome" or the "Company")

           Preliminary Results for the year ended 31 December 2007


Metrodome Group plc (AIM: MRM), the audiovisual entertainment company, which
focuses principally on the sale and distribution of films through cinema and
home entertainment channels, is pleased to announce its results for the year
ended 31 December 2007, the first annual results reported by the Group under
International Financial Reporting Standards.


Financial Highlights:

•  Revenues of £6,247,000, up 67% on the previous year

•  Second half profits of £201,000, before non-recurring items



Operational Highlights

•  Oscar win for The Counterfeiters in the Best Foreign Language Film
   category in February 2008

•  Four Oscar nominations: Days of Glory, Water, The Counterfeiters and
   Away From Her

•  Golden Globe win for Julie Christie in Away From Her - Best
   Performance by an Actress in a Motion Picture - Drama



Commenting on the results Simon Flamank, Chairman of Metrodome said:



"Following significant operational changes in 2006, the Group has concentrated
in 2007 on its twin core markets of Theatrical releases and Home Entertainment.
Revenue growth in the second half reflected the continued investment in
high-quality theatrical releases resulting in strong sales both through cinemas
and in associated rights sales, coupled with strong growth in the Home
Entertainment market from the on-going expansion and roll out of titles on our
labels and income generation from new distribution channels such as Video on
Demand.  Overall, revenues increased 67% year on year to £6,247,000.



"The second half produced a profit of £201,000, before non-recurring items, with
the result for the year showing a headline* operating loss of £100,000, down
from £678,000 in the 2006.  The Group's loss before tax was £673,000 compared to
a loss of £774,000 in 2006 due to the impact of non-recurring costs of 
£580,000."



He added: "In negotiating contract terms for new acquisitions, we are always
considering alternative approaches to the traditional distribution deal. We have
successfully acquired films under partnership deals where we share the risks and
rewards of the film with the producer.



"Our investment in partnership deals for the acquisition of new, high quality
theatrical releases for 2008 and continued expansion and roll out of titles on
our Home Entertainment labels will further help the Group achieve our stated
objective of returning to profitability.



"Our annual results, although much improved, have been achieved in a very
difficult and changing market place. 2008 will see the Group continuing the
execution of its proven core strategies."



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



Metrodome Group plc
Steve Winetroube
Tel: 020 7534 2060


City Financial Associates Limited
James Caithie
Tel: 020 7492 4777


Tavistock Communications
Duncan McCormick / John West / Pollyanna Hutchinson
Tel: 020 7920 3150









Chairman's Statement



Highlights



Metrodome Group plc ("Metrodome") is pleased to announce its results for the
year ended 31 December 2007, the first annual results reported by the Group
under International Financial Reporting Standards.



•  Revenues of £6,247,000, up 67% on the previous year

•  Second half profits of £201,000, before non-recurring items

•  Oscar win for The Counterfeiters in the Best Foreign Language Film
   category in February 2008

•  Four Oscar nominations: Days of Glory, Water, The Counterfeiters and
   Away From Her

•  Golden Globe win for Julie Christie in Away From Her - Best
   Performance by an Actress in a Motion Picture - Drama



Following significant operational changes in 2006, the Group has concentrated in
2007 on its twin core markets of Theatrical releases and Home Entertainment.
Revenue growth in the second half reflected the continued investment in
high-quality theatrical releases resulting in strong sales both through cinemas
and in associated rights sales, coupled with strong growth in the Home
Entertainment market from the on-going expansion and roll out of titles on our
labels and income generation from new distribution channels such as Video on
Demand.  Overall, revenues increased 67% year on year to £6,247,000.



As previously indicated, the second half produced a profit of £201,000, before
non-recurring items, with the result for the year showing a headline* operating
loss of £100,000, down from a loss of £678,000 in 2006.  The Group's loss before
tax was £673,000 (compared to a loss of £774,000 in 2006) due primarily to the
impact of non-recurring costs of £580,000.



*Headline operating loss consists of revenues and other operating income after
deducting operating costs incurred in the normal course of business excluding
non-recurring items.



Operating performance


                                   Year ended         % of        Year ended         % of            Growth
                                    31 Dec 07     Turnover         31 Dec 06     Turnover      Year on Year
Revenue                                 £'000            %             £'000            %                 %

Theatrical
Cinema Sales                              437         7.0%                87         2.3%            402.3%
Television and Rights Sales               612         9.8%               115         3.1%            432.2%
                                        1,049        16.8%               202         5.4%            419.3%

Home Entertainment
VoD/Rental/Other                          401         6.4%               302         8.1%             33.5%
DVD Sell Through                        4,797        76.8%             3,234        86.3%             48.3%
VHS Sell Through                            -         0.0%                 9         0.2%           -100.0%
                                        5,198        83.2%             3,545        94.6%             46.6%

                                        6,247       100.0%             3,747       100.0%             66.7%





Theatrical


Metrodome released eleven theatrical titles in 2007, in line with its declared
strategy. The success of the emphasis on acquiring higher quality films is
reflected in both the revenues received and the award nominations achieved.



The theatrical highlight in the first half of the year was Days of Glory, which
achieved box office revenues of £214,000.  The film received an unprecedented
amount of press coverage as a consequence of both its subject matter and the
political effect it had in respect of the change in the law in France for the
treatment of pensions payable to Algerian war veterans. This change was as a
direct result of the release of this film. The UK press recognised this
extremely important issue which is still within the public arena as a result of
the treatment of the British Gurkhas. This press coverage also supported a
strong DVD ship-out in September 2007 on both conventional DVD and Blu-Ray.



The theatrical highlight in the second half of the year was The Counterfeiters,
which achieved box office revenues of £623,000 in 2007 and continues to do well
in 2008 (cumulative box office revenues in excess of £650,000). Again this film
has an important social and historical significance as it is an Austrian film
dealing with the true plot for Jewish artists and printers imprisoned in a
concentration camp to flood the UK and USA with counterfeit bank notes. Our
strong relationship with the UK Film Council ("UKFC") led to one of the highest
awards given under the P&A (Prints & Advertising) Fund being granted for The
Counterfeiters, which enabled the Group to release the film to a wider audience.
The film won the foreign language category at the 80th Academy Awards in
February 2008 and was released on DVD on 17th March 2008.



Other theatrical titles released in the year were Them, Away From Her (starring
Julie Christie), Sherrybaby (starring Maggie Gyllenhaal), The Serpent, Water and
four small releases Midnight Movies, Transformers, Wild Style and Anna M.



Television sales increased significantly year on year, with all of the year's
theatrical releases being sold to multiple TV channels, further demonstrating
the high quality of the 2007 releases. In addition, there was the successful
sale of Pretty Persuasion from last year's theatrical releases.



Home Entertainment



Despite strong competition in the high street, both at price point and for shelf
space, the Group has been able to significantly grow this sector of its
business.



As predicted, the year saw a shift in the market to Video on Demand from home
rental.  The strong growth in VOD reflects the increasing popularity of this
format.  During the year, the Group also completed its negotiations with all the
major players in the emerging internet VOD market however growth here is
restricted by the low penetration of very high speed broadband.  With agreements
over both distribution platforms in place, Metrodome is well positioned to take
advantage of future developments.



Despite the declining market, rental revenues showed strong growth H2 on H1,
with significant revenues being generated from Them and Days of Glory.



DVD sales increased significantly compared to last year, following the strategic
decision to invest heavily in the home entertainment market.  The Group released
42 titles during the year including:



•   Them

•   Five Days

•   Days of Glory

•   Away From Her

•   Water

•   Sherrybaby



The success of the in-house budget labels In2Film, for headline titles, and Mini
Metro, for children's home entertainment titles, together with an expansion in
the number of new full price releases, has led to a 48% increase in DVD
revenues.  Metrodome also recovered some 80 titles after its sub-distributor,
Prism Leisure Corporation Plc ("Prism"), went into administration in June 2007.
Metrodome released 20 of these back catalogue titles during the second half
under its own In2Film budget label with more scheduled for release in 2008.



2007 was the twentieth anniversary of Transformers The Movie and the release of
the Dreamworks feature film in July 2007 sparked significant interest in the
original film. To capitalise on the interest created, we re-packaged and
re-launched Transformers the Movie and also a Special Edition, with great
success.



Cost base



The Group is constantly reviewing its operating structure and cost base in an
attempt to improve operational effectiveness and achieve efficiencies. We agreed
a new distribution deal with Sony DADC, our replicators and distributors, at the
start of 2007 at substantially reduced costs. We are regularly reviewing key
contracts with suppliers, with a view to maintaining high standards and further
cost reductions.



International Financial Reporting Standards



Companies listed on the AIM market are required to adopt International Financial
Reporting Standards as adopted by the EU (IFRS) for financial periods commencing
on or after 1 January 2007. These are the first full year results produced by
Metrodome under IFRS.  The adoption of IFRS represents an accounting change only
it does not affect the operations or cash flows of the Group.





The main impact of IFRS on the income statement, balance sheet and cash flow
statement has been the reclassification of items into new disclosure categories.




Non recurring items



In December 2007 Metrodome reached a settlement agreement with TVL for the
return of certain titles which were previously stated in the balance sheet at a
value of £667,000. Offset against this cost was £274,000 of unpaid royalties at
31 December 2007 which have been forgiven by TVL, giving a net cost of £393,000.
In addition, Metrodome was granted a royalty free sell off period to the end of
May 2008 plus other benefits. Metrodome will continue to provide royalty reports
during this period to enable TVL to fulfil its own royalty reporting
obligations.



The termination of this agreement is part of a phased plan to separate the two
organisations which will be completed after the sale of TVL's shares (see
below).



Non-recurring costs of £69,000 have been incurred on advisory fees for the
tender process for the sale of TVL's shareholding and £81,000 of bad debt and
£37,000 of legal fees incurred in recovering stock and materials belonging to
Metrodome incurred when Prism went into administration in June 2007.







TVL's Shareholding



In May 2007, the Group announced the completion of a sale by its major
shareholder, TV-Loonland AG ("TVL"), of 11,200,000 shares in Metrodome, which
diluted its controlling interest to 61.7%. This was in line with previous public
statements by TVL that it wished to reduce its ownership in Metrodome, thereby
allowing more liquidity in the stock and attracting new investors, to enable
future growth of the business.



On 23rd August 2007 it was announced that TVL had requested the board of
Metrodome to initiate a formal tender process for the sale of TVL's 61.7%
shareholding in Metrodome.



There has been a significant interest in the process and expressions of interest
were received from North America, Europe and the UK both from strategic
investors and venture capital funds.



The board of Metrodome drew up a shortlist of four interested parties and
subsequently has been in detailed discussions to determine the best fit.



The board understands that TVL has made significant progress in the proposed
sale of its stake in Metrodome and whilst there is no guarantee of a successful
outcome at this stage, the board are hopeful that they will be able to issue a
further announcement in due course.





Outlook



In negotiating contract terms for new acquisitions, we are always considering
alternative approaches to the traditional distribution deal. We have
successfully acquired films under partnership deals where we share the risks and
rewards of the film with the producer.



Our investment in partnership deals for the acquisition of new, high quality
theatrical releases for 2008 and continued expansion and roll out of titles on
our Home Entertainment labels will further help the Group achieve our stated
objective of returning to profitability.



Blu Ray has now won the High Definition format war which will take away
confusion for the consumer which should increase demand for Blu Ray product and
help build the average value in the market. Metrodome plans to release more key
titles in 2008 on Blu Ray having successfully tested the market with the release
of Days of Glory and Transformers in 2007.



Our annual results, although much improved, have been achieved in a very
difficult and changing market place. 2007 has seen a number of our customers
plus our sub-distributor fall into administration. This has not only cost the
Group in terms of total bad debt of £104,000 but also reduces the number of
retail outlets through which our product can be sold and may therefore affect
our future revenues.



2008 will see the Group continuing the execution of its proven core strategies
as stated earlier.



I would personally like to thank our very hard working and dedicated staff, for
their contribution to the improved performance in 2007.



Simon Flamank
Chairman
28 March 2008






Unaudited Consolidated Balance Sheet
As at 31 December 2007


                                                       31-Dec- 2007                                        31-Dec- 2006
                                           Notes        (Unaudited)                                         (Unaudited)
                                                              £'000                                               £'000
Non current assets
Property, plant and equipment                                    23                                                  53
Intangibles                                                       -                                                  14
Film distribution library                      5              2,308                                               3,400
Trade and other receivables                                     327                                                  28
                                                              2,658                                               3,495
Current assets
Inventories                                                     174                                                 271
Trade and other receivables                                   1,905                                               1,581
Cash and cash equivalents                                       867                                                 123
                                                              2,946                                               1,975
Total assets                                                  5,604                                               5,470
Current liabilities
Trade and other payables                       6            (3,067)                                             (2,878)
Bank loans and overdrafts                      6               (85)                                                   -
                                                            (3,152)                                              (2,878
Non current liabilities
Bank loans                                     7              (280)                                                   -
Other borrowings                               7              (182)                                                   -
                                                              (462)                                                   -
Total liabilities                                           (3,614)                                             (2,878)
Net assets                                                    1,990                                               2,592

Equity
Share capital                                                 1,207                                               1,207
Share premium account                                         2,581                                               2,581
Share option reserve                                             87                                                  16
Accumulated Losses                                          (1,885)                                             (1,212)
Total equity                                                  1,990                                               2,592






Unaudited Consolidated Income Statement
For the year ended 31 December 2007


                                                                                         Year ended           Year ended
                                                                                          31-Dec-07            31-Dec-06
                                                             Notes                      (Unaudited)          (Unaudited)
                                                                                              £'000                £'000

Revenue                                                                                       6,247                3,747

Cost of sales                                                                               (4,371)              (2,441)

Gross Profit                                                                                  1,876                1,306

Other operating income                                                                            -                  135

Operating expenses                                                                          (1,976)              (2,119)

Headline Operating Loss                                          2                            (100)                (678)

Non recurring items                                              8                            (580)                    -

Loss on ordinary activities before interest and taxation                                      (680)                (678)

Investment income                                                                                23                    -
Finance costs                                                                                  (16)                 (96)

Loss before taxation                                                                          (673)                (774)
Income tax expense                                                                                -                    -
                                                                                                                       
Loss for the year                                                                             (673)                (774)


Loss per share
Basic                                                            3                           (0.6p)               (0.9p)
Diluted                                                          3                           (0.6p)               (0.9p)






Unaudited Consolidated Statement of Changes in Equity
For the year ended 31 December 2007


                                               Share capital  Share premium   Share option    Accumulated   Total equity
                                                                    account        reserve         Losses
                                       Notes     (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)    (Unaudited)
                                                        £000           £000           £000           £000           £000

Balance at 1 January 2006                              2,631          5,128              -        (6,356)          1,403

                                                                                               
Loss for the year, being  total recognized                                                         
income and expense                                         -              -              -          (774)          (774)

Net proceeds from ordinary shares issued                 494          1,453              -              -          1,947

                                                                               
Cancellation of deferred share capital               (1,918)              -              -          1,918             -

Reduction of share premium reserve                         -        (4,000)              -          4,000             -

Share option charge for the year                           -              -             16              -            16

Balance at 31 December 2006                            1,207          2,581             16        (1,212)          2,592
Loss for the year, being  total recognized                                                          
income and expense                                         -              -              -          (673)          (673)
Share option charge for the year                           -              -             71              -            71

                                                                 
Balance at 31 December 2007                            1,207          2,581             87        (1,885)          1,990






Unaudited Consolidated Cash Flow Statement
For the Year ended 31 December 2007

                                                                                Year ended            Year ended
                                                                                 31-Dec-07             31-Dec-06
                                                                     Notes     (Unaudited)           (Unaudited)
                                                                                     £'000                 £'000

Net cash from operating activities                                       9           3,331                 2,034

Net cash used in investing activities                                   10         (3,088)               (2,058)

Net cash from financing activities                                      11             501                   729

Net increase in cash and cash equivalents                                              744                   705

Cash and cash equivalents at beginning of year                                         123                 (582)

Cash and cash equivalents at end of year                                               867                   123




Notes to the Preliminary announcement
For the year ended 31 December 2007



1.  Preparation of the accounts



The unaudited preliminary announcement has been prepared under the historical
cost convention under the going concern basis and on a basis consistent with
applicable International Financial Reporting Standards and IFRIC interpretations
("IFRS") as adopted by the EU .



The preliminary announcement has been prepared on the basis of the same
accounting policies as published in the interim announcement for the period
ended 30 June 2007.



The financial information in this preliminary announcement does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985.
Statutory accounts for the year ended 31 December 2007 have not yet been
delivered to the Registrar of Companies and no audit report has yet been given
on the statutory financial statements. Statutory accounts for the year ended 31
December 2006 were prepared under UK Generally Accepted Accounting Principles ("
UK GAAP") and have been delivered to the Registrar of Companies. The audit
report on these statutory accounts was unqualified and did not contain a
statement either under section 237(2) or 237(3) of the Companies Act.



The Group has adopted IFRS from 1 January 2007 as required for companies listed
on the AIM market. Prior to 2007, the audited annual financial statements and
unaudited interim financial statements were prepared under UK GAAP.



In order to comply with IFRS, the Group is required to provide comparative
numbers. Included within this preliminary report (notes 12 to 16) is a
reconciliation of balance sheets, income statements and cashflow statements from
UK GAAP to IFRS.



The preliminary announcement is presented in pounds sterling since that is the
currency in which the majority of the Group's transactions are denominated.



Transition to IFRS

The Group has taken advantage of the optional exemption in IFRS 1 "First time
adoption of International Financial Reporting Standards" regarding IFRS 3 "
Business combinations". The Group has chosen not to restate historical business
combinations that took place before the date of transition of 1 January 2006.



General Information



The Annual Report and Accounts will be made available to the public at the
Company's registered office, five working days from the date of release.



The Annual General Meeting will be held at the office of Bircham Dyson Bell, 50
Broadway, Westminster, London SW1H 0BL at 11:00am on 29 May 2008.



2.  Headline operating loss



Headline operating loss consists of revenues and other operating income after
deducting operating costs incurred within the normal course of business.



3.  Loss per share



The loss per share is based on the consolidated loss of £673,000 (2006:
£774,000) after taxation and the weighted average number of shares in the year
of 120,717,915 (31 December 2006: 120,717,915).



Basic and diluted earnings per share are the same as there are no potential
ordinary shares that would increase net loss per share from continuing
operations in the year.





4.  Dividends



As in prior periods, the directors are not recommending payment of a dividend.



5.  Film Distribution Library



The film distribution library is the investment in the programme library
including acquired rights and pre-production expenses less provision for
amortisation and impairment.





6.   Current liabilities


                                                               31-Dec-07            31-Dec-06
                                                             (Unaudited)          (Unaudited)
                                                                    £000                 £000
Trade and other payable                                            3,067                2,878
Bank loans and overdrafts                                             85                    -
                                                                   3,152                2,878



The bank loan is secured by a fixed and floating charge over the assets of the
Group.



The overdraft is repayable on demand.



7.  Non current liabilities


                                                               31-Dec-07            31-Dec-06
                                                             (Unaudited)          (Unaudited)
                                                                    £000                 £000
Bank loans                                                           280                    -
Other borrowings                                                     182                    -
                                                                     462                    -



The bank loan is secured by a fixed and floating charge over the assets of the
Group. The bank loan is repayable over five years and incurs a floating interest
rate linked to the bank's base rate.

The other borrowings are unsecured, interest-free and repayable over three
years.




8.  Non recurring items



The Group has separately identified costs and revenue of a non-recurring nature
which are considered to be outside the normal course of business due to their
one-off nature or size.


                                                              31-Dec-07             31-Dec-06
                                                            (Unaudited)           (Unaudited)
                                                                   £000                  £000
Termination of TVL agreement                                      (393)                     -
Proposed sale of Metrodome shares - fees                           (69)                     -
Prism Leisure Corporation plc                                     (118)                     -
                                                                  (580)                     -



Termination of TVL agreement


                                                                   £000                £000
Film distribution library of TVL titles:
Write off unamortised acquisition cost                            (545)
Write off unrecouped DVD costs                                    (122)
                                                                                      (667)
Forgiveness of inter-company debt:
Forgiveness of debt as at 30 September 2007                         237
Royalties waived as at 31 December 2007                              37
                                                                                        274
Termination of TVL agreement                                                          (393)



In December 2007, Metrodome agreed to return certain film titles to TVL in
respect of which the Group held licenses granted by TVL but was in default of
payment of royalties. As part of the settlement, TVL agreed to forgive £237,000
of outstanding royalty payments. In addition, TVL agreed to waive any royalties
due in respect of sales of the titles in the final quarter of 2007 (£37,000) and
to allow a sell off period to end May 2008, during which residual stocks of the
titles may be sold royalty-free. Metrodome will continue to provide royalty
reports during this period to enable TVL to fulfil its own royalty reporting
obligations.



The asset value of £667,000 has been fully provided in 2007 as illustrated
above.





Proposed sale of Metrodome shares - fees

The Group incurred £69,000 of advisory fees as part of the process for the
proposed sale of TVL's 61.7% shareholding in Metrodome.



Prism Leisure Corporation plc ("Prism")

Prism was placed into administration in June 2007 owing Metrodome £81,000 in
unpaid royalties as at 31 December 2007. In addition, the Group incurred £37,000
of legal fees in respect of recovery of stocks and materials belonging to
Metrodome.



9.  Reconciliation of loss from operations to net cash from operating activities


                                                                Year ended                 Year ended
                                                                 31-Dec-07                  31-Dec-06
                                                               (Unaudited)                (Unaudited)
                                                                     £'000                      £'000
Loss from headline operations                                        (100)                      (678)
Adjustments for:
Non recurring items                                                  (580)                          -
Depreciation of property, plant &                                       20                         32
equipment
Impairment loss on equipment                                             6                          -
Impairment of goodwill                                                   -                         22
Amortisation of film distribution library                            3,123                      1,403
Impairment of film distribution library                              1,032                        743
Share based payment expense                                             71                         16
Loss on disposal of property, plant &                                   41                          -
equipment
Decrease/(increase) in inventories                                      97                       (44)
(Increase)/decrease in receivables                                   (623)                        399
Increase in payables                                                   244                        141
Net cash from operating activities                                   3,331                      2,034





10.   Investing activities


Purchases of film distribution library                            (3,063)              (2,013)
Purchases of property, plant & equipment                             (25)                 (45)
Net cash used in investing activities                             (3,088)              (2,058)





11.   Financing activities


Issue of ordinary share capital                                         -                  825
Bank loan                                                             400                    -
Other loan                                                            300                    -
Bank loan repayments                                                 (35)                    -
Other loan repayments                                               (171)                    -
Investment income                                                      23                    -
Interest paid                                                        (16)                 (96)
Net cash from investing activities                                    501                  729





12.   Adoption of international accounting standards

In the year ended 31 December 2007, the Group has adopted IFRS for the first
time.

The adoption of IFRS represents an accounting change only, it does not affect
the operations or cashflows of the Group.

As required by IFRS 1, the impact of the transition from UK GAAP to IFRS is
explained below. The main reconciling items and their effects on the balance
sheet are set out in notes 12 to 14. The presentational effects on the income
statement are set out in note 15. Apart from the presentation effects for the
year ended 31 December 2007, there are no significant differences between the
Group's Profit and Loss Account under UK GAAP and the Income Statement under
IFRS.

The accounting policies published in the 30 June 2007 interim report have been
applied consistently to all periods presented in this preliminary report and in
preparing an opening IFRS balance sheet at 1 January 2006 for comparative
purposes.

IAS 38 - Intangible assets: software costs

Under IAS 38 intangible assets including capitalised software costs, where they
are not an integral part of the related hardware, should be disclosed separately
in the balance sheet. This has resulted in a reclassification of software costs
from tangible fixed assets to intangibles, (1 January 2006: £32,000, 31 December
2006: £14,000).

IAS 2 - Inventories

The film distribution library assets were treated as stock under UK GAAP. Under
IFRS the film distribution library assets have been treated as non current
assets. This has resulted in a reclassification of assets from stock to non
current assets, (1 January 2006: £3,533,000, 31 December 2006: £3,400,000).

The balance sheet extracts in notes 13 to 14 illustrate the impact of the above
reclassifications as at 1 January 2006 and 31 December 2006. Other than these
reclassifications between asset categories, there are no significant differences
between the Balance Sheet under UK GAAP and IFRS. Consequently, no
reconciliations of liabilities or equity are provided.



IAS 1 - Presentation of Financial Statements

Operating profit was disclosed separately on the face of the profit and loss
account under UK GAAP. Under IFRS there is no requirement to disclose operating
profit on the face of the income statement. Metrodome has disclosed headline
operating loss (defined in note 2) and non-recurring items to give the reader a
better understanding of the result for the year.

IAS 7 - Cash Flow Statements

The IFRS Cash Flow Statement presents cash flows in three categories: cash flows
from operating activities, investing activities and financing activities. This
has resulted in a reclassification of cash flow into the new disclosure
categories.

The IAS 2 reclassification of the film distribution library assets from stock to
non current assets (described above) has resulted in a reclassification of cash
flow from operating activities to investing activities, (31 December 2006:
£2,013,000,). The cash flow statement in note 16 illustrates the impact of these
reclassifications for the year ended 31 December 2006.



13.   1 January 2006 balance sheet extract


                                                      UK GAAP                    IFRS                    IFRS
                                                                          adjustments
                                                                              note 12
                                                  (Unaudited)             (Unaudited)             (Unaudited)
                                                         £000                    £000                    £000
Non current assets
Property, plant and equipment                              54                    (32)                      22

Intangibles                                                23                      32                      55

Film distribution library                                   -                   3,533                   3,533

Trade and other receivables                               135                        -                    135

                                                          212                   3,533                   3,745

Current assets

Film distribution library                               3,533                 (3,533)                       -

Inventories                                               227                       -                     227
                                                                                    
Trade and other receivables                             1,873                       -                   1,873
                                                                                    
Cash and cash equivalents                                   2                       -                       2
                                                                                    
                                                        5,635                 (3,533)                   2,102

Total assets                                            5,847                       -                   5,847
                                                                                    
Total equity                                            1,403                       -                   1,403






14.   31 December 2006 balance sheet extract


                                                       UK GAAP                   IFRS                   IFRS
                                                                          adjustments
                                                                              note 10
                                                   (Unaudited)            (Unaudited)            (Unaudited)
                                                          £000                   £000                   £000
Non current assets
Property, plant and equipment                               67                   (14)                     53

Intangibles                                                  -                     14                     14

Film distribution library                                    -                  3,400                  3,400

Trade and other receivables                                 28                      -                     28
                                                                                    
                                                            95                  3,400                  3,495
Current assets

Film distribution library                                3,400                (3,400)                      -

Inventories                                                271                      -                    271
                                                                                    
Trade and other receivables                              1,581                      -                  1,581
                                                                                    
Cash and cash equivalents                                  123                      -                    123   

                                                         5,375                (3,400)                  1,975

Total assets                                             5,470                      -                  5,470
                                                                                    
Total equity                                             2,592                      -                  2,592








15.   Income statement for the year ended 31 December 2006


                                                   UK GAAP                   IFRS                   IFRS
                                                                      adjustments
                                                                          note 10
                                               (Unaudited)            (Unaudited)            (Unaudited)
                                                      £000                   £000                   £000

Revenue                                              3,747                      -                  3,747
                                                                                
Cost of sales                                      (2,441)                      -                 (2,441)
                                                                                
Gross profit                                         1,306                      -                  1,306
                                                                                
Other operating income                                 135                      -                    135

Operating expenses                                 (2,119)                      -                 (2,119)
                                                                                
Headline operating loss                              (678)                      -                  (678)

Non recurring items                                      -                      -                      -

Loss on ordinary activities before                   (678)                      -                  (678)
interest

Finance costs                                         (96)                      -                   (96)
                                                                                
Loss before taxation                                 (774)                      -                  (774)

Income tax expense                                       -                      -                      -
                                                                                
Loss after taxation                                  (774)                      -                  (774)
                                                                                


16.   Cashflow statement for the year ended 31 December 2006


                                                   UK GAAP                   IFRS                   IFRS
                                                                      adjustments
                                                                          note 10
                                               (Unaudited)            (Unaudited)            (Unaudited)
                                                      £000                   £000                   £000
Operating activities

Loss from operations                                 (678)                      -                  (678)
                                                                                
Adjustments for:
Depreciation of property, plant &                       32                      -                     32
equipment                                                                       
Impairment of goodwill                                  22                      -                     22

Amortisation of film distribution                        -                  2,146                  2,146
library                                                   

Share based payment expense                             16                      -                     16

Decrease/(increase) in inventories                      89                  (133)                   (44)

Decrease in receivables                                399                                           399
                                                                                -
Increase in payables                                   141                      -                    141

Net cash from operating activities                      21                  2,013                  2,034

Investing activities

Purchases of film distribution library                   -                (2,013)                (2,013)
                                                         
Purchases of property, plant and                      (45)                      -                   (45)
equipment                                                                       
Net cash used in investing activities                 (45)                (2,013)                (2,058)

Net cash from financing activities                     729                     -                     729
                                                                                

Net increase in cash and cash                          705                     -                    705
equivalents                                                                     













                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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