News
Cellcast receives £1.4 million in SKY channel swap
20 March 2008
Funding requirements significantly reduced as SUMO focuses on worldwide B2B opportunities
Highlights
- Cellcast to receive £1.4 million in an arrangement to swap channel locations on the SKY Digital satellite television platform
- Cellcast’s SUMO service will move from Channel 144 to another channel in the SKY general entertainment section
- Successful vertical branding via internet, mobile and TV means SUMO is now considerably less dependent on its SKY EPG position
- SUMO’s burn rate significantly reduced as it moves to phase 2 with a focus on worldwide B2B opportunities
- Cellcast's core business continues to do well in a challenging consumer environment with new growth driven by expanded distribution on the internet and 3G mobile networks
Cellcast plc (AIM: CLTV), the global interactive digital broadcaster, today announced that it has agreed an exchange of its two channels on the Sky Digital platform (one of which was surplus to requirements) for one channel and a cash consideration of £1.4 million.
The net book value of the two channels being exchanged was £304,936.
The net proceeds of £1.4 million from the transaction will be used to provide general working capital and to repay the £500,000 outstanding under the existing facility provided by Headstart. The Company has entered into an agreement with Headstart to repay the amount outstanding under the Headstart facility in full before December 2008. During this period Headstart has agreed to waive its rights of conversion subject to the repayments being made. The Company considers that this is the best use of the net proceeds, maintaining operational flexibility while removing the potential equity dilution.
Trading Update
Cellcast's core business continues to do well in a challenging consumer environment. Significant benefits are flowing back from the investment in content and technology for SUMO, particularly in regard to Cellcast's core participation TV applications and formats, enabling the company to develop new revenue streams from the internet and from 3G mobile services.
Interactive 3G mobile video products operated by Cellcast saw a 400% increase over the last twelve months. This is attributed to growing 3G handset penetration and increased familiarity with video calling in general and the ease of use of 3G video calling services. 2008 has also seen the integration of 3G video calling products with Cellcast's portfolio of TV channels and websites, offering yet another level of interaction to existing formats. A fully integrated interactive online and mobile chat and messaging platform, incorporating video calling between online webcam users with 3G video callers, is the most recent addition to a growing suite of products.
The Company’s 3G traffic and revenue has more than doubled since October 2007. In February 2008, this amounted to over £35,000 per month and is growing at an average of 25% month on month.
The Company’s venture with Canaan Partners, Cellcast Asia Holdings, is progressing well and has recently expanded its national distribution and billing coverage by securing agreements with BSNL and Tata Telecom. It continues to be the leading supplier of participation TV formats and applications in markets across India, and new broadcast clients include Zoom (a subsidiary of The Times of India) and leading Bollywood music channel B4U. In February 2008, Cellcast Asia reached profitability at a gross margin level.
SUMO.tv
SUMO.tv is a media network that seamlessly integrates user-generated content (UGC) into television programming, internet and mobile services, using its proprietary technical services architecture. The Company is satisfied it is now very much less dependent on its position on SKY’s Electronic Programme Guide (EPG) to sustain and build its user base.
The Company anticipates that future operating and development costs of SUMO.tv will be significantly reduced with the successful completion of the first phase of the Company's development strategy for the venture. Following the launch and operation of SUMO.tv in the UK market, the Company is now engaged in licensing the multiplatform technology, aggregated content and formats to broadcasters and distributors worldwide.
SUMO has commenced international distribution on the European IPTV platform Zattoo, and has also recently secured distribution on the Vingo.tv platform which has an audience base in over 100 countries. SUMO continues to expand its online distribution through third-party websites, with content live on YouTube and a recently signed agreement with social networking site Bebo. Last week, Sumo commenced broadcasting a range of programmes on Joost and signed an agreement with leading video search engine Blinkx.com.
Mobile distribution remains a lynchpin of SUMO.tv’s international multiplatform distribution strategy and in January 2008 the Company announced new agreements for distribution on the Orange mobile networks in France and Israel, and confirms ongoing discussions in other markets, including Australia, Malaysia and South Africa.
Enhancement of the proprietary technology behind the SUMO platform continues. A key recent development is "Sumo TeleConferencing", which enables viewers to use normal webcams (or 3G phones) to interact live with a television host and with each other. The Company believes there is a considerable number of applications for this technology across a range of proprietary formats, and sees it as a groundbreaking creative opportunity for partners and clients in the broadcast industry.
For further information:
| Cellcast plc | |
| Andrew Wilson, CEO | Tel: +44 (0) 20 7190 0300 |
| andrew@cellcast.tv | www.cellcast.tv |
Media enquiries:
Threadneedle Communications |
|
| Graham Herring / Josh Royston | Tel: +44 (0) 20 8206 5151 |
| graham.herring@threadneedlepr.co.uk | www.taylorherring.com |
| HB Corporate | |
| Imran Ahmad/Edward Hutton | Tel: +44 (0) 20 7510 8600 |
About Cellcast plc
Cellcast plc (AIM: CLTV) 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 Sao Paolo, Cellcast’s applications and programming are distributed on the Sky Digital and Freeview platforms in the UK, and the company is partnered with broadcasters and telecom networks in Europe, the Middle East, India, South-East Asia, China, and South America. Cellcast plc joined the AIM market of the London Stock Exchange in 2005.
