Interim Results, June 2006
28th September, 2006
Interim Results for the six months to 30 June 2006
Forbidden Technologies plc ("the company" or "Forbidden", AIM: FBT), through its proprietary technologies, has developed
and is marketing a range of Internet video editing and sharing platforms for a wide range of market segments in the wired
and wireless world.
In the six months to 30 June 2006 the company recorded sales of £68,228 compared to £17,851 in the first half of the
previous year. Administrative expenses were £384,760 (2005: £401,493) and the loss in the six months was £360,274
At 30 June 2006, the balance sheet showed £655,474 of net current assets (2005: £1,328,915) and cash and liquid resources
of £645,676 (2005: £1,280,451).
Sales are significantly higher than in the first six months of 2005 and in fact, have exceeded the total sales achieved
in the whole of the previous year (2005: £59,705).
With higher sales and lower administration costs, the loss is also reduced and the cash outflow from operating activities
is consequently lower at £305,543 (H1 2005: £337,837).
For the first time in this interim reporting period, we are obliged to implement FRS 20, the new accounting standard which
requires us to reflect the ‘cost’ of share options in the profit & loss account of the company. We have included a line
‘FRS 20 employee share option cost’ shown within ‘Operating loss’. This results in an increase in the reported loss for
the six months to the end of June 2005 by £46,007 and for the six months to the end of June 2006 by £55,638. This is a
non-cash item, does not affect cash flow and is neutral to the balance sheet.
Progress and prospects
The Forbidden Team have just returned from the International Broadcasting Convention (IBC) in Amsterdam. It is gratifying
to note that, whereas a year ago visitors to IBC were impressed by our technology, this year there was a marked difference.
Visitors looked at FORscene as a complete working product and were primarily interested in how it could be used in their
individual businesses. We secured a large number of promising leads from the UK and from many other countries and these
will be followed up in the coming weeks and months.
At IBC the FORscene web-based post production platform was the base for IBC’s first citizen journalism project which
allowed attendees to contribute their own video stories through their mobile phones. The news clips sent to the IBC
Citizen TV base were edited daily using FORscene, which automatically formatted and compressed the video into mobile-size
clips for viewers.
Regular visitors to our website (http://www.forbidden.co.uk) will have seen the regular news items on customers and new
markets. To summarise some of these I would highlight: repeat business being done with Granada; ongoing and regular use of
FORscene by BBC News 24; the first two successful FORscene projects by Ryerson University in Toronto (thus training future
producers and editors to use FORscene); the imaginative use of FORscene by Save the Children in webcasts and tapeless
distribution for project coverage on BBC Breakfast, This Morning, Channel 4 News, Channel 5 News and Sky News. Our mobile
and podcasting services have recently been used by the Armed Forces and advertisers.
These examples indicate the wide variety of applications of FORscene, improving speed and cost efficiency in different
As the speed of the internet continues to grow rapidly, the marketplace for Forbidden as a key supplier of video across the
world grows with it. Our opportunity to capitalise on our technological lead expands as a consequence.
In my report to shareholders for the full year results of 2005, I indicated that we expected significant sales increases
in 2006, and that, if our expectations of the outcome of the various pilots and projects with broadcasters are realised,
shareholders should begin to see significant change in the profile of the business.
The increase in sales is clearly beginning. However, the degree of caution with which some of our potentially large
customers approach changes in technology and workflow changes has resulted in a longer gestation period than expected in
some cases. Our confidence in the outcome is not diminished and we believe that the difference in timing is a matter of
months rather than years.
As FORscene becomes used more widely, and with the commercial opportunities emerging, the Board is now reviewing a number
of options including a fundraising. If a fundraising is chosen, my preference is to include our existing shareholders - the
directors personally have £1 million available.