In the six months to 30th June 2007 the Company recorded sales of £33,447 compared with £68,228 in the first half of the previous year. Administrative expenses were £398,251 (2006: £440,398) and the loss in the six months was £361,725 (2006: £360,274).
At 30th June 2007 the balance sheet showed £27,821 of net current assets (2006: £655,474) and cash and liquid resources of £38,847 (2006: £645,676).
Although turnover in the first six months of 2007 is lower than in the same period last year, this reflects in part a change in the Companys pricing model. Previously we invoiced for one-off sales for specific uses normally for a particular production or series. Now we sell annual user licences. This is more flexible and more understandable for our customers and partly, we believe, as a result of this we are already seeing the development of a steady and increasing stream of income including repeat and referral business. One of the effects of this change is that our income is now recognised over the life of the licence. This means that a proportion of the income arising from our sales in the first six months of 2007 has been deferred to later periods.
Shortly before 30th June 2007 the Company concluded the arrangement of a £1 million loan agreement which provides liquidity going forwards and did not affect the balance sheet in the period. The Board believes that the loan agreement was well timed, bearing in mind the current credit crunch in the financial markets.
The Company has focused specifically on its two key products: FORscene and Clesh.
In FORscene we have developed a truly powerful web-based tool for use by professionals in broadcast post-production to log, edit, review, and publish video at up to broadcast quality. It requires no installation and works on almost any computer with internet access helping to transform collaborative working between any number of different locations.
The recent announcement by the Company that FORscene can now output material at broadcast (DV) quality is a significant development. It demonstrates that FORscene is on the verge of being sufficient to make entire programmes.
The consumer version of the product (Clesh) can be used for editing videos on the web and then publishing to different devices such as mobile phones, iPods, or on web sites. In addition, Clesh is a complete solution for websites accepting and displaying User Generated Video (UGV). To see some current examples of UGV, go to the Clesh Showreel page: http://clesh.com/videos/.
As the conservative and highly critical broadcast community begins to recognise the increasing usefulness of web-based post production, the Company is gaining important recognition as a provider of web-based services. With customers such as the BBC and ITV in the UK, CBC in Canada, and All Three Media (one of the largest UK independent production companies) using FORscene, the credibility of the Company and its products increases. The growing use of FORscene by educational institutions to train the next generation of producers and editors is a further benefit for the longer term.
With a loan facility in place and care being taken to monitor the relationship between spending and income, the Board is confident that we can become a significant participant in the huge marketplace that should emerge in both professional video production and in User Generated Video.
This announcement, with P&L, Balance Sheet and Cash Flow statement (including comparatives), will be posted on the company website http://www.forbidden.co.uk/ . The Company does not intend to issue paper copies, thus helping to save the environment and a little money.
Forbidden Technologies plc (020 8879 7245)
Stephen Streater (Chief Executive Officer)
Brewin Dolphin Securities Limited (0141 314 8114)
The interim results are available here in PDF form.