Half Yearly Report
30 September 2010 - 4:01PM
UK Regulatory
TIDMLUD
RNS Number : 5593T
Ludorum PLC
30 September 2010
30 September 2010
LUDORUM PLC INTERIM RESULTS
Ludorum plc, the AIM-listed media investment company, today announces its
results for the half year ended 30 June 2010.
Highlights
* Turnover generated in the period of GBP1.3m (2009: GBP940,000) an increase of
38%
* Consumer products revenues were GBP829,000 (2009: GBP140,000) an increase of
492%
* Gross profit of GBP670,000 (2009: GBP344,000) an increase of 95%
* Chuggington has now been licensed for broadcast to 175 countries
* Over 160 consumer products and home entertainment license agreements for
Chuggington have been concluded throughout the world
* Over 1 million books and 2 million units of the Chuggington die cast toy range
sold to date
* Exclusive launch agreed with Toys R Us for Autumn 2010 in the US
* Global agreement reached with Mega Brands Inc for Chuggington construction
rights
Rob Lawes, Chief Executive Officer said:
"The Company has continued in the half year to focus considerable creative and
commercial attention on Chuggington and lay further the foundations for creating
a major global franchise. The property continues to be very well received in
all media and approval from both parents and consumers has been very rewarding.
We are encouraged with our progress to date and believe that Chuggington is now
well positioned to deliver real growth and value for our shareholders"
Chief Executive's Review
Overview
Ludorum plc is an AIM-listed media investment company. The Group is focused on
creating or acquiring and subsequently exploiting the rights for children's
entertainment properties through both conventional media and new media channels.
The Group has continued to make substantial progress with its first created
property, Chuggington, securing broadcast in nearly all major worldwide markets.
Alongside the successful broadcast placement we have continued to conclude a
significant number of licences across home entertainment, consumer products and
publishing.
In Spring 2010, our master toy partner, RC2, launched their die-cast toy range
at retail outlets in the UK and in several major international markets and the
consumer response has been very encouraging, with over 2 million items sold over
the last few months.
We are very encouraged by Chuggington's early success, and have confidence that
our first property will create material value for our shareholders.
Chuggington
Chuggington is a computer generated 3D series of 104 x 10" minute episodes and
52 shorter mini-episodes, coupled with a fully immersive interactive website. 65
episodes and 26 mini-episodes are complete, and the others are currently in
production. The series follows the adventures of Wilson, Brewster and Koko, all
trainee engines and each with their own unique personality and learning style.
The series is set in a world much like our own with cities, villages and diverse
cultures and geography. Entertainment and enjoyment is at the heart of
Chuggington, but embedded within each story are important educational and
developmental messages centred on learning and social-emotional development. The
series offers an extensive range of destinations to explore and adventures
through which children and parents can benefit from the underlying value of
positive life-learning lessons.
Broadcast
We have concluded broadcast agreements with all leading broadcasters in their
respective territories in 175 countries and the series has established a highly
successful ratings record in several international markets including the UK (BBC
- Cbeebies), Germany (Super RTL), France (TF1), Japan (Fuji -TV), Australia
(ABC) and Canada (Treehouse). In January 2010, Chuggington launched on the
Disney Channel in North America and has been consistently aired six days a week.
Following the success of that launch, Disney has now acquired the second series
of Chuggington. The first series will also commence broadcast in Spain and
Benelux in the first quarter of 2011.
Consumer Products, Home Entertainment and Publishing
The Company has concluded a number of agreements with leading home entertainment
partners in key territories. These include 2entertain (UK), Universal Pictures
(Germany), TF1 Vision (France), Fuji Group (Japan), Roadshow (Australia) Anchor
Bay (USA) and Daewon in Korea.
Learning Curve Brands, Inc, a division of RC2 and a leading global toy
manufacturer based in the US, has been granted the master toy licence on a
worldwide basis. Learning Curve is well advanced with its product plans with a
substantial line of new and innovative toys with both on and offline
applications. Learning Curve contributes to the animated production costs and
will participate in the net profits of the property. In the Spring of this
year, Learning Curve launched the first phase of its die cast line in 18
countries including the UK, Germany, France and Australia, the interactive toy
line will commence distribution in the second half of this year,
In addition to the Learning Curve master toy licence, the Company has to date
entered into 160 consumer products agreements with leading organisations
including Vtech, Hallmark, Crayola, Tomy and Ravensburger. In the UK, there
are now a total of 37 licence agreements in place covering a broad range of
product categories including clothing, bedding, games and puzzles, bicycles,
celebration cakes and greetings cards. Product under these arrangements will
also start to roll-out in early 2011.
Following the launch of Chuggington on the Disney Channel in the US, 16 licenses
have been signed with leading companies in their respective categories. A
worldwide agreement has also been concluded with Mega Brands Inc for exclusive
rights in proprietary construction toys. An exclusive launch was also agreed
with Toys R Us across the United States for Autumn 2010 with significant front
of store presence across the country.
The Company concluded a profit-share publishing agreement with Parragon Books
Limited, a leading UK and international publisher. Parragon will be the master
publisher of Chuggington books in several key markets including UK, Australia,
Germany, Scandinavia and Benelux and the Company is committed to producing a
very broad range of high quality books across all categories.
The first books launched in the UK in Marks and Spencer in July 2009 and 34
titles will be released in 2010 across all categories and formats across all
distribution channels. To date, Parragon have sold over one million books and
plans have been developed to extend the breadth of formats, price points and
play patterns to ensure that all distribution channels and levels of demand
continue to be serviced.
The Company has also signed a major publishing agreement with Scholastic in the
US and a launch of the first books is scheduled for Autumn 2010.
The Company has appointed highly regarded agents in several international
markets to represent certain categories of our business. To date we have
concluded more than 50 licence agreements for territories outside the UK.
Production
The first series of 52 x 10 minute episodes was fully completed in January 2009.
In February 2009 the Company entered into a new agreement with its production
partner in Shanghai to produce a further 26 episodes (series 2) of which 13 new
episodes have been delivered with the remaining 13 episodes due for delivery in
October 2010. The second series has been pre-sold to the BBC, Super RTL
Germany, TFI France, ABC Australia and The Disney Channel in the US. The Company
has commissioned a further 26 episodes which will be delivered in Winter 2011.
In addition to the 10 minute series, the Company commissioned the production of
39 x 4 minute mini episodes of Chuggington titled Badge Quest which will all
have been delivered by the end of 2010. These episodes focus on the
underlying pro-social themes within the main series and offer broadcasters wider
scheduling options as well as our DVD partners additional material and on-line
content. A further 13 mini episodes will be delivered at the end of 2011
providing a total of 52 x 4 minute shows to complement the title series and its
worldwide visibility.
Financial Review
Ludorum generated revenues of GBP1.301m for the first six months of 2010 (2009:
GBP0.940m), a 38% increase over the prior six months. Consumer product revenues
represented 64% of revenues increasing by GBP0.689m to GBP0.829m (2009:
GBP0.140m). Broadcast revenues, which are recognised on license period start
dates, represented 36% of revenues and reduced by GBP0.330m to GBP0.468m (2009:
GBP0.798m). The UK represented 31% of revenues, Europe 38%, Asia and
Australasia 27% and Rest of World 4%. All regions had double-digit revenue
growth, lead by the UK with an 80% increase over the first six months of 2009.
Gross profit increased from GBP0.344m to GBP0.670m, a 95% increase over the
first six months of 2009. Gross margins improved from 37% to 51%. The margin
improvement is largely related to programming amortisation costs being fixed at
the same level for the comparable prior period and were therefore a smaller
percentage of revenues.
Total administrative costs, excluding costs attributed to the Incentive Option
Plan, were GBP1.589m, an increase of GBP0.417m over the period to 30 June 2009.
At the end of 2009 the Group opened a New York based marketing office to support
and maximise the potential for Chuggington in North America; the incremental
cost for this office during the period being GBP0.330m. Excluding the costs of
the New York office, underlying administrative costs increased GBP0.870m being a
7% increase over the period to 30 June 2009.
The operating loss for the six month period, excluding costs attributed to the
incentive option plan, was GBP0.919m (GBP0.828m in the period to 30 June 2009).
Capital expenditure on Chuggington during the period was GBP0.475m (GBP0.320m in
the period to 30 June 2009) an increase of GBP0.155m.
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