This is one exciting stock

Unlike most other film/video production companies, CCN are not exposed to films that flop, that was my main concern.

Basically they have two divisions, The Film Consortium and the Works.

The Film Consortium (TFC) have investors that put up cash for investment in films and TFC advise investors what films they should invest in and find investment for films. This is 'green lighting' or giving the films the go ahead. TFC make money doing this. It isn't TFC whose money goes into the films so if a film tanks it isn't their worry, they only lose a bit of cred I guess and give an investor or two the hump.

The Works (TW) sell the licenses to areas for Films, DVD, VHS and TV for the investor/fim makers. This will be a up front guaranteed fee that they sell to the licensee - the licensee then sells the film thoughout his given area. Each film license is sold with say a license fee of 'at least' 100K for example, depending on how well the film sells then further fees are paid. These are called overages and can boost how much CCN get big time. I think this is why CCN are excited about My Summer of Love, as it looks like there will be lots of overages on this film, and there are overages on other films coming in.

The third revenue stream is The Works selling licenses for third party films they have had nothing to do with organising the funding of - sales agents basically and the more well known The Works gets, the more of these they expect to come in.

For the year gone they have organised 1.2m of funding towards 15 films. That doesn't mean each film is only 80K to make, it means they have organised part of the funding for a number of films but the films may have other backers. The year ahead will see 7m of funding organised through Surefire which is going toward that 40m of films in production they mention in the results. They expect to have these canned by Christmas in order to get the tax breaks before April 1 (100% tax allowance in the first year on films below 15m budget).

Lottery funding has finished as far as being one of 3 main lottery recipients for funding goes but they can apply on a per film basis to get lottery funding. In it's place is Surefire. Surefire is a dedicated business for finding film investors and they are pumping in lots of money (that 7m for starters this year) so the investment to go into films should be much greater. Two directors that have been running Surefire have become non execs on the CCN board.

They also have a new major shareholder Fandango, who bought the 29.9% stake held by former Civilian founder Richard Thompson. These are Italian film makers and are set to put 3 films the way of CCN each year.

The FD was saying that they have only really started to get this business focussed as they have only just disposed of the last remains of the old CCN business which was a canned meat business so it's in its infancy in a way.

There is no reason I can see why this business should trade on a PE as low as 8. They have got rid of two thirds of the staff and boosted gross margins massively from 40 odd per cent to 92%. They don't get hit when a film flops, the worst that happens is films get delayed and so earning might slip back, but they don't disappear with big chunks of investment down a black hole.

Growth here could be huge, the 2.2p forecast for this year could well be smashed big time. This is a completely transformed business that is just getting up and running. Fandango have 29.9%, the two directors from Surefire have 4% and they are all set to synergise with each other over the coming years.

I can't begin to think what the growth could be like here but at a guess it is going to be massive. Overages create much, much higher earnings. If TFC organise great films for investment and then find the licensees and the films sell (as seems to be happening) then they are going to do fantastically imo.

These don't have the risk associated with the likes of Winchester Entertainments and so the PE should be much higher imo.

2.2p eps looks like being beaten easily imo. I'm sure these will re-rate to a PE of 12-15 and will do at least 2.5p eps this year which could mean 37p a share by the financial year end. They also will have 2m in cash come year end so one third the market cap is cash - that has to be worth another few pence on the share price.

If they beat 2.5p eps this year and do 3p as I suspect then come the financial year end they will be on an historic PE of 12, probably a forward PE of 8 (if the share price is 37p) and 2m in the bank with an absolute ton of films in production for their clients. If that were the case I reckon that would see the share price at 50p+ in 12 months time.

They seem very confident about the next twelve months and films in production are growing rapidly and in value size.

There's one last sweet spot - there is always the chance they hit on a Harry Potter the more films they get involved with. If they do then earning go ballistic.

They have 6.5m losses on the P&L account so no tax to pay on earnings for some time. They are also able to extract decent grants from the Lottery Fund on a one off basis and get grants from the British Film Council too.

Worth a look imo.

CR

seems to be a bit of profit taking this morning, RNS from CFL out this a.m which implies things are okay on the back of My Summer Of Love.

capa

may have been a bit premature but got some more today at 22.24p I now hold at an average of 15.35p

capa

Retrace on thin volumes & can pick them up cheaper,18.5p/19p.

Institutional buying, these are getting noticed.

capa

It seems that Hertfordshire Council has bought a interest... should be marked up higher on Monday and possibly hit 24p again.

Wish I live in Hertfordshire, the Council will have made that much money on these they won't need to charge Council Tax next year.

capa

Up 14% on a bad day for the market, seems like there is someone else interested in this. Expect to see a big buy going through soon.

capa

Guess I was right about the 24p level being breached again...thats a 40% turn for me in 2 weeks..great.

more to come as well mitzy. This is the beauty of this type of share, get in before its noticed and wait for the fireworks. No jam tomorrow here either, making money now.

capa

Only wished I had got in earlier..oh well never mind...

Picked up another 7225 at 22.55p after this mornings announcement.

capa

well done m8...

crikey, only one trade and that is a sell at nearly mid price ?!

any ideas anyone ?

capa

capa, my old friend

No one seems to be there to answer you so I better step in and do my best. Price jumped on Monday afternoon for no apparent reason. There was a late T sale marked of 100K shares which was probably a buy so price was marked up to flush out some compensating sells. Alternatively, MMs knew there was an announcement coming out on Tuesday and marked up the price in anticipation. The film programme looked good but it would need some expertise to determine the value - any contributions? Not much volume for the rest of the week - suspect attention is elsewhere. Management seem pretty good on news flow. Given we have had the interims, can anyone predict anything to galvanise the share price further before the finals? If not, we may have to wait until the New Year before the next significant advance. Regulars, please treat this as a challenge from someone who believes he can stay on the sidelines for a while, while he gorges himself on ASC!

Eric

'My Summer of Love' is a great film, and getting the top rating on 'Ban This Filth' this week should do Civilian no harm at all!

Eric, thanks for that and your updating of the virtual portfolio on ASC thread.
I reckon someone is accumulating stock if a 100k buy trade went through, maybe Jupiter again, to get nearly mid price on a sell indicates that the mm's are having to pay top dollar.

With regard to the announcement this week I liked it, the more films they have out the better. The beauty about this company is that they only need one to be a hit and they are quids in, they don't lose on the flops either just the chance to make more money.

Content film I believe AGM soon and no doubt we will hear again how well Summer of Love is doing which could impact nicely on CCN share price.

capa

If you haven't filled your boots buying the dips sp rise just around the corner?!Get in quick.imho.

18 November 2004 04:00

UK based sales oufit The Works has unveiled a string of deals completed at this months AFM.

- John Hillcoats The Proposition, which is currently shooting in Australia, closed a pre-sale at the AFM with Triangelfilm for Scandinavia. The film has also been sold to Columbia TriStar for Australia and New Zealand, A Film for Benelux and Tartan Film Distribution for the UK. Written by cult musician and novelist Nick Cave, the film stars Guy Pearce, Danny Huston, Ray Winstone, Emily Watson and David Wenham.

- Gillies MacKinnons Tara Road, which is filming in Ireland, sold to Prooptiki for Greece and Cyprus. Pre-sales have also been concluded with BVI for Ireland and Telemunchen for Germany, Austria, Italy and Eastern Europe. Tara Road stars Andie MacDowell, Olivia Williams, Iain Glen, Stephen Rea and Brenda Fricker.

- Pawel Pawlikowskis My Summer Of Love also racked up further sales with Ecofilmes for Portugal, Budapest Film for Hungary, Intersonic for the Czech and Slovak Republics and Best Film for Poland.

- Erik Van Looys The Alzheimer Case - the official Belgian Oscar entry - was sold to Flins & Pinulas for Spain & Andorra.

- Olivier Assayass Clean, winner of best actress for Maggie Cheung at Cannes, sold to Palm Pictures for the U.S. and the Caribbean, Lumiere for Benelux, Stadtkino for Austria, PCV for Greece & Cyprus, Istituto Luce for Italy, LNK for Portugal, Telexcel for Argentina, Uruguay, Paraguay & Chile, Imovision for Brazil, Edko for Hong Kong, Sponge for Korea, Golden Village for Singapore, Spring Cinemas for Taiwan, Intersonic for Hungary and the Czech & Slovak Republics.

- Paolo Sorrentinos The Consequences Of Love has been picked up by Cinemien for Benelux and Artificial Eye for the UK.

- Matteo Garrones Berlin Film Festival 2004 competition contender Primo Amore has been sold to Strand Releasing for North America.

- Michael Winterbottoms Code 46, starring Tim Robbins and Samantha Morton, has been sold to NonStop Entertainment for Scandinavia and Iceland.

http://www.ifta-online.org/afm/home.asp













Here is a Press Release from Non Stop Entertainment of Sweden Confirming Acquisition of Code 46 From "The Works" at the recent US AFM Fesitival..



http://www.nonstopentertainment.com/press/nonstopacquisitionsatafm04.pdf


Little snippet from Rebecca Keary, head of marketing for UK sales agent The Works confirming in an Interview that Sales have gone Very well at AFM..

http://www.rts.org.uk/magazine_det.asp?id=468&sec_id=220

Further Mention of "The Works" Attracting alot of Buying Interest at AFM ;-))
REGARDS THE HOOT.............

UK indies report good business at AFM

Pact's TPUK SESA funding enabled 12 UK sales companies to attend the 23rd American Film Market (AFM) with additional financial support towards the cost of their offices in the Loews Hotel, the venue for the event. 21 UK sales companies had offices in the Loews Hotel, and reported a steady flow of business, with good quality meetings and deals being closed. Capitol Films attracted attention with Robert Altman's new film "The Company", and The Works offices were packed with buyers interested in Michael Winterbottom's Berlin festival winner "In This World".

Over 400 films were screened in the multiplexes on the 3rd Street Promenade; most of these were independent features and were well attended by the international buying community.

The general consensus of opinion was that although attendance figures may have be down on previous years, the buyers attending were definitely there to buy, with a lot less time-wasters. The days of the dot.com executives cruising the corridors of the Loews looking for advertising are over, leaving a clearer impression of the real business of buying and selling feature films. The threat of war would appear to have kept the buyers from the Middle East away, this was the feedback from sellers dealing with those particular territories. Many AFM attendees came directly from a very busy Berlin Film Festival, who many regard as a good kick start to the AFM.

Pact was one of the sponsors of the opening night reception organised by the British Film Office in LA. It was held at Shutters on the Beach hotel and attended by over 200 guests, representing a broad cross-section of delegates, including buyers and sellers and Hollywood studio executives.

Pact was based in the European Film Promotion office along with five other UK sales and production companies. Some were selling finished product and a couple were looking for funding for projects. Pact was also one of the sponsors of the EFP's annual cocktail party. Guests included the European sales companies, producers and many American independent producers looking for international coproduction partners.

The American Film Market is still one of the must-attend, top three international film events. Even if sales agents lack product to sell, they feel it necessary to attend in order to maintain a profile.

Breaking out-soon back over 20p after taking that dip.imho.

Wot's going on first bid moved down to 17p then offer moved up to 19p! Good News around the corner?

Highly Geared - 8 Feb'05 - 10:45 - 718 of 722


Forecast EPS (ALREADY 50% DELIVERED)2.2p, PE13=28.6P. Add say 5p for cash on B/S and add for bullish outlook stament with results = 35-40p (just re read CR`s original thread and re read it every day as a reminder). People want certainty of results on this one but when you get them (all being well), the shuttle will have already "cleared the tower".The people who make the money are those that buy when all aroud are waivering or bored, as CR has mentioned many times (50,000@14.5p 4 January 2005, thanks CR).

Mentioned first @ 17p/18.5p and strong moves to 18p/19p.Something happening here.Expect return to 20p-25p with possibilities of breakout above 25p.imho.