(CXM) Conexion Media

CONEXION MEDIA GROUP PLC

Interim Results for the six months ended 30th June 2011

Chairman's Statement

This document will shortly be available on the company's website (www.conexion-media.com)

In line with our expectations, we have seen a challenging first half of 2011 as our traditional music publishing revenues are showing a downward trend when compared with the same period of 2010, at £1.07m.  Gross profit is 18% down over the same period at £524k.  It is fair to point out that we signed many new deals last year that will not generate revenues until the second half of 2011.  In terms of our performance it is noted that many of our new sources of revenue are distributed toward the end of each year and we expect an improved position for the full year.

Secondary rights are a major emerging sector and opportunity for Conexion, and we are focused on exploiting this area alongside our traditional music administration business.

Whilst cash operating costs were down over the period, our total operating costs were 5% up on the first half of 2010 at £799k.  Operating costs in the first half of 2010 were reduced by £159k, as a result of an adjustment for negative goodwill arising on the acquisition of the assets of Kid Gloves Music Group.  In addition the first half of 2011 included a non-cash charge of £54k on translation of trading balances with our overseas subsidiaries, as a result of movements in exchange rates. 

Our operating loss before amortisation and depreciation is £275k (June 2010-£125k) and our total loss for the period is £577k (June 2010-402k).

The board is pleased and satisfied that management's long term strategy to expand the secondary rights administration activity alongside its music publishing business appears to be bearing fruit.  Secondary rights management is a growth area and new contracts signed already this year have included MRG Entertainment, Janson Media and Epitome Pictures. However, the nature of these rights is that the revenue takes longer to materialise due to the more intensive administration process.

Guy Fletcher

30th September 2011

For further information please contact:

Conexion Media             

Justin Sherry, CEO,justin@conexion-media.com                                                           0208 987 4150

FinnCap

Corporate Finance

Matthew Robinson/Rose Herbert                                                                                    0207 600 1658

Corporate Broking

Stephen Norcross                                                                                                            020 7600 1658

Consolidated Income Statement

For the six months ended 30th June 2011

Consolidated Statement of Comprehensive Income

For the six months ended 30th June 2011

Consolidated Statement of Financial Position

As at 30th June 2011

Consolidated Statement of Cash Flows

For the six months ended 30th June 2011

Notes to the Consolidated Cash Flow Statement

For the six months ended 30th June 2011

NOTES

1. Accounting Policies

Basis of preparation

The Financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted by the European Union. These statements do not constitute a set of statutory financial statements within the meaning of the Companies Act 2006.

The financial statements have been prepared on the historical cost basis and in accordance with the accounting policies set out in the audited statutory financial statements for the year ended 31 December 2010.

Going concern

The Directors have prepared cash flow forecasts to 30^th September 2012 and believe that the Group will be able to meet its working capital requirements.  Music Publishing companies have regular sources of income, as collection societies distribute revenues on the same dates each year.  There are monthly and quarterly distributions.  In addition, the Group has overseas partners known as sub-publishers, from whom the

Group receives royalties quarterly and semi-annually depending on the contract.  Music publishing companies only incur a cost of sales after the royalties have been received.  The Group accounts for royalty income on an accruals basis, and therefore provides for the related royalty payable.  The total royalties payable includes a significant amount relating to the royalty payable on the royalty income which has not been received at the balance sheet date, and the royalty due will therefore not be payable until some time after the balance sheet date.

Accounting Estimates and Judgements

The Group makes estimates and judgements concerning the future and the resulting estimates may, by definition, vary from the actual results. The Directors considered the critical accounting estimates and judgements used in the financial statements and concluded that the main areas of judgement are:

·       Revenue recognition policies in respect of contracts which straddle the period end;

·       Contingent deferred payments in respect of acquisitions;

·       Recognition and quantification of share based payments; and

·       Valuation of intangible assets.

These estimates are based on historical experience and various other assumptions that management and the Board of Directors believe are reasonable under the circumstance.