News
Trading Update and Issue of Equity
8 November 2006
Trading Update
Following a full review of UK operations, the Company has taken action to reduce the fixed costs of its UK operations and its channel production overheads. It has also implemented a plan either to withdraw from, or redeploy, bandwidth to increase its gross profit. Whilst significant savings have already been achieved and booked, the full benefits will not be realised until the first half of 2007. As a result, the Directors no longer expect the UK business to return to profitability during the second half of 2006. The Directors, however, still remain confident that the already implemented cost reduction plans will lead to a return to previously achieved UK gross margins during the first half of 2007.
Whilst cutting UK related costs, the Company has continued to invest in its technology platform and associated interactive formats for which it has seen growing demand from international broadcasters. More specifically the Company has chosen to focus on the major developing mobile and broadcast markets of Brazil, India, China and South East Asia where both the broadcast, telecoms and regulatory environments best favour both immediate and long term returns, and where most upfront investment has already been made in the course of 2006.
Cellcast has established Cellcast South East Asia in a 50-50 Joint Venture with mTouche Technology Berhad, a leading regional mobile entertainment company listed on MESDAQ. The Joint Venture’s first format has premiered on Malaysia top terrestrial broadcaster TV3 and its immediate success in terms of ratings and viewer response has led to strong interest from other regional broadcasters and secured contracts for launch in Indonesia and Thailand.
Cellcast is also realising new ways of monetising its investment in its proprietary technology outside of its own broadcast operations and has been approached to license its multi-media platform and applications for other media services. This could provide a quick route to capture value for investors in the form of upfront and ongoing licensing fees.
Issue of Equity
The Company announces that the Board has issued and allotted 453,125 new Ordinary Shares of 3p each at 8p each to HB Corporate, in lieu of fees and placing commission, in relation to the Placing by the Company as announced on 31 August 2006.
These shares, once issued, will rank pari passu with the existing Ordinary Shares. Application has been made for the shares to be admitted to AIM, with admission to trading on AIM expected to be on 13 November 2006.
In addition, as set out in the Placing Announcement of August 31 2006, Andrew Wilson (Chief Executive Officer) and Bertrand Folliet (Chief Operating Officer) each subscribed to 1,562,500 new Ordinary Shares at 8p per share through Harkness Trading Limited, a company they beneficially own. Andrew is currently interested in 2,955,997 ordinary shares and Bertrand is currently interested in 2,925,497 ordinary shares in the Company, representing 10.32 and 10.43 per cent of the Company’s issued share capital respectively.
For further information:
Cellcast plc |
|
Andrew Wilson, CEO |
Tel: +44 (0) 20 7190 0300 |
| andrew@cellcast.tv | www.cellcast.com |
HB Corporate |
|
Imran Ahmad / Cecil Jordaan |
Tel: +44 (0) 20 7510 8600 |
Media enquiries:
Abchurch |
|
Henry Harrison-Topham / Gareth Mead |
Tel: +44 (0) 20 7398 7700 |
Notes to Editors:
Cellcast plc
Cellcast plc is a leading international provider of participation television applications and interactive mobile content in the fast-growing multi-platform digital entertainment sector. Headquartered in London, with associated operations in Paris, Beirut, Mumbai, Hong Kong and Buenos Aires, Cellcast’s applications and programming are distributed on the Sky Digital and Freeview platforms in the UK and by major broadcasters including Canal+ in France; STB in Ukraine; Future TV, Dubai Television and Rotana TV in the Middle East; Zee TV and Star TV in India; TV3 in Malaysia, TVS-3 in China; Telefe in Argentina; and Rede in Brazil.
Cellcast’s revenues streams are independent of both advertising and subscription fees. With a network of revenue sharing agreements with telecommunications carriers and aggregators across five continents, Cellcast receives a share of the call revenue every time a consumer uses a mobile or fixed-line phone to participate in its interactive entertainment, revenue which is retained or shared with its broadcast partners. Cellcast’s programme formats and proprietary Interactive Platform (CIP) also facilitate delivery of content to mobile phones, the internet and broadband-delivered IPTV. This enables viewers to continue participating in a programme away from the TV, generating 24/7 revenue opportunities. In May 2006, Cellcast announced the launch of a range of new interactive entertainment services on Freeview’s digital terrestrial television (DTT) platform in the UK which included a breakthrough in interactive TV technology.
Cellcast plc joined the AIM market ( AIM) of the London Stock Exchange on 21 September 2005.
