IMAGI Announces 2012 Interim Results,Total Revenue Grew 11% in the First Six Months

29 August 2012 21 h 40 min Comments Off

Builds a World Class Media and Entertainment Company by Unlocking Significant Values of “Pleasant Goat and Big Big Wolf”

Hong Kong (August 29, 2012) – IMAGI International Holdings Limited (“IMAGI” and together with its subsidiaries, “the Group”; HKSE Stock Code: 585) today reported its unaudited condense consolidated interim results for the six months ended 30 June 2012.

 

Interim Results for the six months ended 30 June 2012

The Group reported the following:

· Total revenue amounted to HK$78.6 million, representing an increase of 11% compared with the last corresponding interim period for the 6 months ended 30 September 2011 (the “Last

Comparative Period”)

· The loss before interest, tax, depreciation and amortization for the period was HK$7.7 million, compared with HK$2.3 million for the Last Comparative Period

· After taking into account, among others, the amortization of intangible assets and the related reversal of the deferred tax liabilities of HK$37.4 million (2011: HK$37.8 million), loss for the period amounted to HK$52.8 million, compared with HK$46.7 million for the Last Comparative

Period

· The Group streamlined operation by closing its Chai Wan office and relocating the brand management team to Guangzhou, which resulted in an one-off cost of HK$10.5 million. The

Group expects to achieve significant cost savings in the second half of 2012 and beyond

· Box office revenue derived from “Pleasant Goat and Big Big Wolf Movie 4” set a record among domestically produced animation films, reaching RMB168 million in mainland China.

· The Group disposed of its 20.63% equity interest in an associate, Sino Light Enterprise Limited

(“SLE”) to focus on core activities on 14 March 2012, resulting in a gain of HK$7.7 million

· The Group has worked closely with its global master licensee, Disney Enterprises, Inc (“Disney”), under the Consumer Products and Related Use Agreement (“CPA”) to upgrade the quality of its sub-licensees. During the six months ended 30 June 2012, 47 sub-licensees were terminated, 17 were renewed and 7 new sub-licensees were added

· As of 26 August 2012, box office revenue of summer movie “I Love Wolffy” has already exceeded RMB 70 million

Strong Financial Position and Debt-free

· Bank balances amounted to HK$263.1 million and a current ratio of 10.7 as at 30 June 2012

· The Group had no bank or other borrowings and therefore a zero gearing

Mr Francis Leung Pak To, Chairman of IMAGI, said, “IMAGI has been under new management since the appointment of Mr. Steven Yung as the Deputy Chairman and Chief Executive Officer, effective on 1 April 2012. Given that China is the most important market for the Group, the new management has streamlined our operations and moved our key business functions to mainland

China. This strategic move has brought our team much closer to our key partners and target consumers. This integration effort has created a more efficient organization and developed a stronger corporate culture.”

In the second quarter of 2012, the Group closed down the operation for production services on

CGI animation pictures in Hong Kong and relocated the brand management team to Guangzhou.

As a result of this restructuring exercise, the Group expects to achieve significant cost savings in the second half of 2012 and beyond.

Mr. Steven Yung Tse Kwong, Deputy Chairman and CEO of IMAGI, said, “Given the continued success of our core brand, the multi-channel distribution platform of our strategic partner, Creative

Power Entertaining LLC (“CPE”), the creativity of CPE’s indigenous production team, and

Disney’s global resources and merchandising expertise, we are well positioned to benefit from the rapidly growing consumer market in China.

Our three-pronged growth strategy mentioned below, together with the streamlining exercise conducted, has placed the Group squarely on the path to operational profitability before the annual amortization of intangible assets and the reversal of the corresponding deferred tax liabilities.”

Partnering with CPE to bring out the best of its market leading cartoon characters

To leverage the consecutive success of Pleasant Goat and Big Big Wolf movies during the last four Chinese New Years, a new movie “I Love Wolffy” was launched on 10 August 2012. An additional movie based on another animation brand owned by CPE, Happy Family, will be launched in October, being another high box office period of the year in mainland China. These efforts are part of the Group’s strategy to become a multi-brand entertainment group.

Partnering with Disney to upgrade the quality of sub-licensees

Disney has assisted TE Group to upgrade the quality of its sub-licensees by reviewing their credit worthiness, reputation and quality of their products. Most of the new or renewed licensing contracts only came into effect in 2012. The Group strongly believes that this partnership will bring positive impact on its brands’ value and bring increased economic benefit in the future.

Partnering with movie partners and Disney to implement trade marketing campaigns

Partnering with movie partners and Disney, the Group work closely with leading cinema chains, supermarket chains, and toys retail chains via trade marketing campaigns to capitalize on the strength of the Pleasant Goat and Big Big Wolf brand and to increase consumer traffic for participating retailers and cinema chains.

 

ABOUT IMAGI

IMAGI International Holdings Limited (“IMAGI”) (Stock Code: 585) is a listed company on the main board of the Hong Kong Stock Exchange. IMAGI is a brand leader in Greater China region and Asia focusing on the development of its merchandising, lifestyle, services, media and entertainment products.

Its wholly-owned subsidiary, Infoport Management Limited (“Infoport”) has entered into key commercial arrangements with two contractual partners, being Creative Power Entertaining LLC (“CPE”) and Disney

Enterprises, Inc (“Disney”). CPE is engaged in the development, production and distribution of audio and video programmes of several popular animation brands. CPE is also involved in publications, content development and licensing as well as stage shows and mobile carnival operations. Through these arrangements, Infoport, through its group of operating subsidiaries in Hong Kong and Mainland China, is able to develop a unique business model with an aim to tap into different business segments of the family entertainment industry in China as well as other parts of the world.

Infoport and its group of operating subsidiaries (“Toon Express Group” or “TE Group”) are the leading brand managers in China’s animation industry. TE Group manages popular animation brands such as China’s No. 1 local brand “Pleasant Goat and Big Big Wolf (喜羊羊与灰太狼)”. Its consumer products licensing business is handled through Disney as its worldwide master licensee. TE Group also collaborates with its strategic partners in five other business segments which include animated TV, movies, stage shows, mobile carnivals, publications and interactive media. In addition to “Pleasant Goat and Big Big Wolf”, TE Group manages other brands such as “Happy Family”, “Cookie Master”, “Planet of Seven Colors” and “Legendary Soccer Kid”, with a focus on the consumer products licensing business.

CPE and TE Group jointly cooperate on and coordinate brand activities to ensure maximum brand value.

CPE owns the copyrights (contents) in the forms of television programmes, movies, publications, stage shows and mobile carnivals, while TE Group holds the licensing rights of the animation brands.

 

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