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

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.

^19p/21p.Short term target price 30p.imho.

Still got all mine :-)

capa

capa,getting exciting isn't.Sell off was always overdone.Added more and topped up again this a.m.Money makers may try tree shake with earlier buys showing as sells.Would think about buying any dips below 20p which in normal circumstances with 33% rise would expect.Are these normal circumstances though?.Breakout and mms short of stock.imho.

enjoy the ride 20p/22p.

here comes the treeshake & some profit taking.

Up and down like a yo yo.18p/20p.

Suggestion on advfn that there is a large buyer in the background which would explain movement last few days.Summit definitely up.20p-21.5p up 7.8% next R=22.5p br=23p imho.

barnetpeter - 12 Feb'05 - 21:18 - 817 of 821
Just seen MSOL winning BAFTA for best film above some strong opposition. This surely will give it a big boost on DVD release and in US?

barnetpeter - 12 Feb'05 - 21:35 - 819 of 821
Wonder if one of the big boys like the ODEON chain will now give it a proper run rather than the odd screen? "Best British film" will really help in the US bearing in mind it beat films like VERA DRAKE and HARRY POTTER!

James - I am sure you are right. Civilian bosses must be estatic, not just because of the revenues from MSOL but because of the reputation it gives them to attract funds in the future.

The Alexander Korda Award for the outstanding British film of the year
Nominations are:

DEAD MANS SHOES Mark Herbert / Shane Meadows

HARRY POTTER AND THE PRISONER OF AZKABAN David Heyman / Chris Columbus / Mark Radcliffe / Alfonso Cuar

MY SUMMER OF LOVE Tanya Seghatchian / Christopher Collins / Pawel Pawlikowski

SHAUN OF THE DEAD Nira Park / Edgar Wright

VERA DRAKE
Simon Channing Williams / Alain Sarde / Mike Leigh

And the winner is: My Summer of Love!

spawny100 - 12 Feb'05 - 22:08 - 820 of 821

Cheeky mm's must have had a whiff of this on Friday and tried in vain to flush a load of shares from weaker holders or those who had just bought at 16ish and didn't want to see their profits slip away. Predictions as to how the share price will open on Monday? I reckon open at 19 and end at 21.

lex1000 - 12 Feb'05 - 22:16 - 821 of 821 edit

Good news this evening.MSOL wins BAFTA.Surely a wonderful boost for sales.

I know the people, the company, the product and the sales team quite well - it's my business and I work with them from time to time.

I wish them and you well, but be careful -it's a really fickle old world out there in film financing in the UK currently, thanks to the Government being unable to leave any policy decisions alone for more than 5 minutes.

If you want to see some other direct results from SUMMER OF LOVE tune into CFL (confusingly named ContentFilm, but no connection with Civ Cont) who are the UK distributors of the film. Hasn't done much for their SP has it? It's only a small film financially, but perfectly formed creatively so BAFTA assures us - won't do $50 million box office in US (IMVHO) which is what Chariots of Fire, Waking Ned, Four Weddings etc all did to truly make a difference to investors' lives.

You really need to know the names of the other films in their slate and who is directing them and who is acting in them and who has pre-bought them to get the first idea of whether success will filter through to the SP. Even then it's a very specialist product and bears no relationship to the multi $10 million productions from the US. A major source of production finance has been cut off in its prime by change in Government tax rules relating to Film Finance recently. The whole UK is in the doldrums as a result with no immediate prospect of alternative legislation being either forthcoming or workable when it does.

The recent little peak in SP seems to me to have come before the announcement, then subsided back to its usual level. Look at the RNS, there is a history of announcements which I suspect are aimed at boosting the SP for the benefit of the directors. Theat's a terribly cynical view I know, but I just get the whiff of it in the slightly breathless announcements based on rather slim reality.

In spite of being tempted into a brief, educational and tiny loss-making flutter with CFL (share price couldn't drop further than that could it? Oh, yes it could!), I have decided henceforth not to invest both financial capital and human capital in the same sector. CFL have also lost their major source of production equity for same reason.

But, tomorrow the SP may rise again, what do I know - nothing! DYOR. Good luck if you like being associated with show biz.

SD

This could be a very interesting buy now. News on the 31st March.

Brit Gov have just exteneded tax breaks by 9 months while they sort out its replacement - some small comfort for Civ Cont but still massive uncertainty in project finacning all round. Be careful - or shrt term trade on specific film releases.

SD

With the prelims (30th March) being more than 2 months earlier this year than last year (last year 4th June), one would expect the statement to be quite good and potentially very good.

Based on what product sold at what price in what volume versus what operating costs? Do you know?

On no available fundamentals and a totally indeterminate chart (to my amateur eye) on what basis would you make any decision?

They may want to publish results earlier to get them included in the next money raising inforation memorandum which I expect them to be issuing asap in light of Thursday's Chancellor's announcement of extension of Section 48 tax break. This is positive in the sense they get to breath again, but whether the child will put on weight and muscle and develop into a healthy adolescent is, as I say, indeterminate (and I mean either way, not just negatively).

I await with keen interest what the accounts say.

SD

SD,

I think you are looking in a bit of a negative light. For example their notice of results was the 14th March, before the budget ! What product sold and price and volume - well I do not think you are allowed that information, its called Interms or Prelims where that is clarified. Lets take IBM, before they announce their Int or Pre, does anyone know what they have sold, in what volume, at what price and what their operating cost is ?

The chart also does not look that bad, and is in fact quite readily poised for a large up on good news, or down to the support level on bad news.

Given the bringing forth of the prelims (and moved before any information from the budget), I am still very much, IMO, behind these being in fact very good prelims.

A recap on the news for CCN since the 20th Sept 04 Interims :

Trading Statement 20/09/2004
ch - "The board is hopeful of a good second half performance for 2004"

My Summer of Love 04/10/2004
The company is pleased to announce that international sales of "My Summer of Love" its most recent production have risen to US$2.30m, significantly exceeding management's expectations

2004 productions 26/10/2004
The company announced that following its recommendations to SureFire Films LLP, its joint venture partner, four British qualifying feature films have now been contracted for immediate production.
Chairman Crispin Barker said:
'As reported as our interim results, the company has entered an exceptionally
busy phase. Our current production slate is our largest to date. Additionally,
our sales arm The Works, continues to expand and in 2005 will represent a
growing number of independently produced films in the international
marketplace.'

06/01/2005 Director Shareholding

Civilian Content says chairman's total related holding in co up to 27.445 pct
LONDON (AFX) - Civilian Content PLC said that David Aspin has bought 350,000
shares in the company, representing 0.829 pct of the issued share capital.

David Aspin is a colleague of the company's chairman, Crispin Barker, and under
stock market rules the purchase of shares by Aspin is to be treated as a holding
by Socknersh Investments Ltd, a company owned by Crispin Barker.

Aspin's total holding is therefore aggregated with shares beneficially held by
Barker, and together these holdings amount to 11,590,885 shares and represent
27.445 pct of the issued share capital.

papal power - look at the RNS of 8th March for CFL a company with a very similar relationship with an external fund raiser Surefire kaiboshed by IR/Treasury rules. CFL also has a UK distribution arm which CCN does not, so they ahve even less revenue opportunities.

CCN financed 3 films (I'm not certain they got the fourth away, in spite of their own report) with Surefire money towards end of last year before change of rules for delivery May/June and release thereafter. No one has any idea if they will attract either international buyers or a UK audience - they are too small to have major actors and it is in the nature of these things that you just don't know what you've got till the buyers respond.

Since change of rules they have almost certaiubly been unable to raise new production finance.

Prior to that they got involved with (invested in too I think) a poorly managed New Zealand project beset by overcost and cast illness and director being fired. Can't see that film recovering to storm the worldwide market place.

Don't know what their sales division The Works has been selling, but they are not currently rated as exectly the hottest international sales co working out of UK. They have a known dog on their books - Country Of My Skull which will not perform for sales commission or recoup CCN's substantial equity investment in it.

I really can't imagine what good news could possibly be contained in the uopcoming report, but I live in hope for their sake.

So my negativity is quite mild compared to their apparent prospects, I would say.

SD