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SCI Entertainment - Final Results

RNS Number:5295J
SCI Entertainment Group PLC
27 September 2006


SCI Entertainment Group Plc
27 September 2006
Preliminary results for the twelve months ended 30 June 2006

SCi Entertainment Group Plc ('SCi' or 'the Group') is one of the world's leading
publishers of computer and video
games. Its brands include Lara Croft - Tomb Raider, Hitman, Championship Manager
and the Conflict series.

The results to 30 June 2006 are the first full year results following SCi's
acquisition of Eidos PLC in May 2005.  They
are also the first full year results of the Group stated under International
Financial Reporting Standards ('IFRS') and
comparisons for the 9 months to 30 June 2005 have been restated under IFRS.

                                          12 months to 30         9 months to 30
                                                June 2006             June 2005*
                                               (unaudited)            (unaudited)
                                                     £m                     £m
Revenue                                           179.1                   18.0

EBITDA before
exceptional items and
share based
compensation (note 2)                              28.8                   (5.4)

Trading profit** (note 3)                          27.4                   (5.8)

Trading profit** per
share (note 6)                                     37.6p                 (16.9)p

Earnings (loss) per
share                                              18.5p                 (37.5)p

* results for the nine months to 30 June 2005 include the results for SCi for
the nine month period to 30 June 2005 and
the results of the Eidos Group for the seven week period from the effective date
of acquisition (16 May 2005) to 30
June 2005.

** trading profit represents EBITDA before exceptional items and share based
compensation plus net financing income
less depreciation.

Highlights

* EBITDA before exceptional items and share based compensation (arising under
IFRS) of £28.8 million is 25% ahead
  of original target of £23 million.

* Revenue of £179.1 million is 7% ahead of original target.

* Strong profitability arises from total sales of 11.9 million units:
o        Tomb Raider Legend (released April 2006) - 2.9 million units in FY
2006.
o        Hitman Blood Money (released May 2006) - 1.4 million units in FY 2006.
o        Seven other new releases plus back catalogue - 5.1 million units in FY
2006.
o        Distribution of Lego Star Wars - further 2.5 million units in FY 2006.

* Positive results confirm turnaround and successful integration of Eidos
following acquisition in May 2005.
  Turnaround principally due to:
o        Successful relaunch of key brands.
o        Achievement of planned annual cost reductions of £14 million.
o        Improved performance of internal development studios

* Eidos brands independently valued as intangible assets at £116.9 million. 
Profit before tax of £8.1 million
  after amortisation of intangible assets.

* Cash at 30 June 2006 of £37.2 million.  No gearing.

* 2007 financial year underpinned by strong product portfolio.
o        19 product releases (compared to 9 new releases in FY 2006.)
o        No dependence on a single hardware platform, and no exposure to delayed
European launch of Sony Playstation 3.
o        Exciting new franchises including Just Cause (number one on Xbox 360
and number two on all formats in its
         first week of release) and Kane and Lynch.
o        Further Tomb Raider revenue from Tomb Raider Anniversary and Nintendo
versions of Tomb Raider Legend.
o        Strong potential from back catalogue and new distribution products.

* Growing contribution from profitable New Media business exploiting our digital
content on mobile phones,
  digital television and internet.  Long term opportunities to grow revenues and
margins through direct downloadable
  content, broadening age profile of gamers and growth of new geographic
markets.

Commenting on these results, Jane Cavanagh, Chief Executive of SCi said;

'SCi's results for the 2006 financial year demonstrate the success of the Eidos
acquisition. In twelve months, through
strong management action we have made it profitable, reversing its previous
losses.

We have successfully relaunched key brands and built a comprehensive and
high-quality product portfolio to underpin
future profitable growth.  SCi is financially robust and ideally positioned to
take advantage of the growth in Next
Generation consoles and the growing demand for mobile and on-line content.'

Enquiries

Madano Partnership

Matthew Moth/Mark Way                                                       020 7593 4000

About SCi Entertainment Group Plc

SCi Entertainment Group Plc (SEG) is one of the world's leading publishers and
developers of entertainment software. We create and own content for a wide range
of digital media including Sony Playstation, Microsoft Xbox, Nintendo Wii, DS
and Gameboy, Internet, Mobile phone and Digital Television. The Group has a
valuable portfolio of intellectual property which is sold under the Eidos label
including Tomb Raider, Hitman, Championship Manager, the Conflict series, Thief,
Carmageddon and Deus Ex. Our line up of future products includes Just Cause,
Battlestations: Midway and Kane & Lynch. We have licensed the interactive rights
to a number of film and TV properties including Reservoir Dogs, Highlander and
Who Wants to Be a Millionaire? The Group employs over 800 people in eight
countries and its wholly owned development studios include Crystal Dynamics, Io
Interactive, Beautiful Game Studios and Pivotal Games.

GENERAL

   * Eidos has 6 games nominated for Bafta awards in 2006
   * SCi won an MCV Industry Excellence Award 2006


TOMB RAIDER LEGEND

   * Went to No.1 around the world - US, UK, France, Germany, Italy, Spain,
Portugal, Scandinavia and Australia (plus others)
   * Fastest selling UK videogame of 2006 to date
   * Nominated for 5 Bafta Awards
   * Lara Croft received a Guinness World Record for 'Most Successful Human
Videogame Heroine'
   * Reached the Last 10 in the Great British Design Quest
   * Lara has been voted into Channel 4's Top 100 Sex Symbols for 2006
   * First game to secure the front cover of the UK's 4 Official games
magazines (first time ever) - OXM, OPS2, OX360M, OPSP
   * No. 1 UK - All formats chart - 3 weeks running (No.1 - 360, PC, PSP,
Xbox, PS2 charts)
   * Tomb Raider Legend secured over 50 front covers worldwide

HITMAN BLOOD MONEY

   * Nominated for 3 Bafta Awards
   * Was nominated for 'Best Video Game Score' at the 2006 MTV Music Video
Awards
   * No. 1 UK - All Formats chart - 2 weeks running (No.1 - PS2, Xbox, 360,
    PC)

JUST CAUSE

   * Bafta Nominated
   * E3 awards
   * UK No.1 Xbox 360 and Xbox charts (No.2 All Formats chart) - week one

Chief Executive's statement

The achievements over the last twelve months demonstrate our commitment to
growing shareholder value.  In May 2005 we
acquired Eidos PLC setting out a strategy to transform the business and restore
the value of its intellectual property.
We have successfully implemented that strategy.

As a result SCi is the only UK company in the small group of international games
publishers with a global presence in
this fast growing segment of the entertainment industry.  Our global presence
enables us to sell directly to retailers
in the world's major territories, maximising revenues.  We also own highly
regarded development studios and have the
scale to build and share advanced technologies across these studios.

SCi has built a sustainable product pipeline which is not dependent on any
single title or platform.  These products
cover the 2007, 2008 and 2009 financial years.  The pipeline recognises the
broadening age range and interests of games
consumers.  We are also balancing the exploitation of established brands and the
creation of new franchises.  We have a
strong back catalogue and additionally distribute third party products that
generate low risk revenues.   Over the next
three years we will sell our products into a market that is predicted to grow
rapidly as a result of the growth of Next
Generation console platforms and the spread of interactive entertainment on
mobile phones and Internet platforms.

The results to 30 June 2006 are the Group's first full set of results to be
reported under International Financial
Reporting Standards ('IFRS').  The Group's results for the 9 months to 30 June
2005, previously reported under UK GAAP,
have been re-stated under IFRS.  A reconciliation of the results for the 9
months to 30 June 2005 was announced on 31
March 2006.

Results to 30 June 2006

Total revenues for the year were £179.1 million.  This was approximately £12
million (7%) higher than our original
target.  EBITDA before exceptional items and share based compensation for the 12
months to 30 June 2006 was £28.8
million.  This is 25% higher than our original target of £23 million.   Both
revenues and earnings were higher than in
the previous financial period because of our acquisition and integration of
Eidos.  Our strong level of revenues has
given us nearly 5% share of the UK market in 2006, which compares favourably to
companies such as Sony and Nintendo
with a 6% market share, (source Charttrack August 2006)

The largest contributions to revenues and profitability were from Tomb Raider
Legend, Hitman Blood Money and the
distribution of Lego Star Wars.  The strong performances of these products were
the principal reason why the Group
exceeded its profit targets for the year.

The largest contribution to revenue and profitability was Tomb Raider Legend. 
This product was launched on Xbox 360,
Xbox, PS2 and PC in April 2006 and on PSP in June 2006.  During the financial
year we sold over 2.9 million units of
Tomb Raider Legend to retailers and distributors.  This performance was higher
than the Group's original forecast and
has made Tomb Raider Legend the highest selling new release in the UK in 2006 to
date (source Chattrack August 2006).
Tomb Raider Legend continues to sell well during the 2007 financial year.

The second major contributor to revenue and profitability was Hitman Blood
Money.  This product was launched on Xbox
360, Xbox, PS2 and PC in May 2006.   By the end of the financial year we had
sold to retailers and distributors over
1.4 million units of Hitman Blood Money.  Hitman Blood Money continues to sell
well during the 2007 financial year.

Sales of Tomb Raider Legend and Hitman Blood Money have already exceeded the
previous versions of these games (Tomb
Raider Angel of Darkness and Hitman Contracts).  This commercial success was
combined with extremely strong reviews
from the specialist games press and a high degree of media coverage.  All of
these factors support the Board's view
that Tomb Raider and Hitman are particularly high profile brands with long-term
value.  The status of Tomb Raider was
illustrated in 2005 by BBC viewers who voted it one of the Top Ten Design icons
of the last 100 years.  We will
continue to build the quality and breadth of the Tomb Raider and Hitman
franchises.

One of the Group's other major brands, Championship Manager, also performed well
during the year.  Championship Manager
2006 was released on PS2, Xbox, PSP and PC during the year.  In addition we
released a very successful mobile phone
version.  Total sales across all platforms (excluding mobile phones) was 0.5
million units, an increase from the
previous version.  This level of sales makes Championship Manager a profitable
franchise, particularly as its annual
development costs are lower than for many other products.

The third major contributor to revenue and profit in year was the distribution
of Lego Star Wars.  The Group
exclusively distributes the Lego Star Wars game, first released by Eidos in
April 2005, and earns a distribution fee on
each unit sold.  During the year the Group sold 2.7 million units of Lego Star
Wars and has now sold approximately 4.2
million units of this product since its first release.  During the year the
Group entered into a co-publishing
agreement for Lego Bionicle which will be released in the 2007 financial year.

During the year the Group released six other new products, Total Overdose,
Conflict Global Storm, 25 to Life (North
America only), Commandos Strike Force, Rogue Trooper and Urban Chaos Riot
Response.  In addition we received back
catalogue revenues from products first released in previous financial years.  
Together these products sold 4.6 million
units in the financial year.

The quality of the Group's products has been illustrated by a number of industry
awards.  Six of our 2006 releases have
been nominated for a total of 12 BAFTAS, and the Group received an MCV Industry
Excellence Award.

The Group made a gross profit of £103.8 million for the financial year, which
was 58% of revenue.  The gross profit on
published products was 79%, with the overall gross profit reduced because of the
high level of distribution revenue
from Lego Star Wars.

The Group spent £19.4 million on advertising in the financial year.  This
reflects the major campaigns, including
global TV advertising, organised to market our products and re-establish key
franchises such as Tomb Raider, Hitman and
Championship Manager.

Development costs charged to the income statement for the year were £27.0
million.  In common with the majority of
global games publishers, and consistent with the requirements of IFRS,
development costs are capitalised during the
course of production and charged to the income statement from each game's
release, with the majority of the charge
arising in the first three months after release.  In total the Group spent £57.4
million on development in the
financial year, building the investment in products and technology that will
benefit future financial years.

The charge for other overhead costs of £47.8 million includes £14.8 million of
depreciation and amortisation charges
and £4.4 million of share based compensation.  Therefore the underlying level of
cash based overheads was £28.6
million.   For the 12 months to 30 June 2005 the combined administrative costs
for the two groups was £42.0 million.
This illustrates that the majority of the £14 million cost savings have been
achieved within this area.  The remainder
has been achieved in development costs.

The Group incurred exceptional charges of £1.8 million relating to continued
integration costs.  This included £1.1
million of exceptional development costs relating to a development contract
acquired with Eidos.


Brand values

Under IFRS the Group is required to value intangible assets purchased through an
acquisition.  Our acquired brands have
been independently valued at £116.9 million.  After charging amortisation of
£11.8 million, we show the net value of
£105.1 million as an intangible asset in the Group's balance sheet.

The brands valued in the balance sheet include seven titles with lifetime sales
of one million units or more.  These
are Tomb Raider, Hitman, Championship Manager, Thief, Deus Ex, Legacy of Kain
and Shellshock.  In addition the Conflict
series and Carmageddon have also each sold over one million units.  However,
their values are excluded from intangible
assets as they have been internally developed.

The value of the intangible assets is amortised over a period of up to 15 years,
representing the estimated useful
economic life of the intangible assets.

Profit before tax

Profit before tax under IFRS was £8.1 million.  This is stated after
depreciation and amortisation charges of £14.8
million.  These charges principally arise because of the amortisation of
intangible assets described above.

The Group also incurred a £4.4 million accounting charge arising under IFRS to
expense the Group's share option scheme.
This is an accounting charge only and does not result in any cash leaving the
Group.  The charge principally relates to
the effect of issuing new share options to Eidos staff to bring them into the
SCi share option scheme.

Outlook for 2007 financial year

The Group invested significantly in its product portfolio in 2006. Accordingly,
the Group plans to release 19 new
products in the 2007 financial year compared to 9 new releases in the 2006.  The
breadth of our product portfolio
reflects the strength of the Group and the broadening demographics of games
consumers.

We will continue to exploit established brands. During the 2007 financial year
we will release Tomb Raider Legend on
the Nintendo Gamecube, DS and GBA platforms. In the second half of the financial
year we plan to launch an Anniversary
edition of Tomb Raider, celebrating ten years of the legendary Lara Croft. We
will launch a new version of Championship
Manager, fully updated for the 2006/7 football season achieving our objective of
moving this franchise to an annual
release early in the football season.

We will continue to introduce new brands including Just Cause, Battlestations
Midway and Kane & Lynch, a new franchise
from Io Interactive, the developers of Hitman. We believe that at least one of
these titles has the potential to add to
our portfolio of million unit selling franchises.  Just Cause was released on 22
September 2006 and has immediately
entered the UK charts at number one in the Xbox 360 charts and number two in the
All Formats chart.  This is a very
successful result for a new franchise.

Some of our new products are based on licenses with high consumer recognition.
These include Reservoir Dogs, Who wants
to be a Millionaire? and Bionicle Heroes.   Reservoir Dogs, based on the classic
Quentin Tarrantino movie, was released
in Europe in August 2006.  It reached the No 2 position in the UK Playstation 2
charts and will be released in North
America in October.

There is a growing market for games that appeal to a wider audience.  Our 2007
portfolio therefore includes Pony
Friends on the Nintendo DS platform aimed at children who want to look after a
pet pony.  It also includes games such
as Zuduko and Diner Dash designed to appeal to the growing audience for casual
games.

The distribution of third party titles will continue to provide us with low risk
revenues. Our global distribution
titles will include the Warner Bros. products Justice League Heroes (featuring
Batman, Superman and Wonder Woman), Tom
and Jerry and 300 March to Glory. In North America we are distributing the
Empire Interactive titles Ford Bold Moves
and Carol Voderman's Sudoku.

Finally, we expect a continuing level of strong back catalogue income.  This
includes continued sales of Tomb Raider
Legend and Hitman Blood Money which were released in the latter part of the 2006
financial year.  Both products have
already achieved Sony Platinum status and will be released as Platinum products
at an appropriate point during 2007.

Platform strategy

Our 2007 line up illustrates the breadth of our products and our spread across
hardware platforms.  We have 19 new
release planned on over 60 platforms (plus further releases on mobile phones). 
These new releases will include
versions on PC, Sony Playstation 2, Sony PSP, Microsoft Xbox 360, Microsoft
Xbox, Nintendo DS, Nintendo Gameboy
Advance, Nintendo Gamecube and Nintendo Wii

We have not planned any releases on the Sony Playstation 3 platform in the 2007
financial year.  This is consistent
with our policy to launch titles on a new platform when the platform reaches a
commercially viable installed base.
Therefore we are not adversely affected by Sony's recent announcement that the
European release of the PS3 has been
delayed until early 2007.  Our PS3 products in development are planned for
release from the 2008 financial year onwards.

2008 and future product pipeline

We have invested significantly in the 2008 and future pipeline.  We expect the
market to grow strongly during this
period particularly as a result of the impact of the Sony Playstation 3 and
Nintendo Wii launches together with the
continued growth of the Xbox 360 platform.

Our 2008 products will include new versions of Tomb Raider (including a PS3
version) and many of our other key
franchises.  We also plan new franchises, including completely new products from
both Crystal Dynamics (developers of
Tomb Raider) and Io Interactive (developers of Hitman and Kane & Lynch).

Development strategy

SCi has a good record of delivering high quality products on time.   We have
taken a number of steps to ensure that
these disciplines are maintained in the enlarged Group, as well as developing
for Next Generation platforms.  These
steps include:

1.       Focusing internal studios around a key owned franchise (for example
Tomb Raider at Crystal Dynamics and Hitman
at Io Interactive).  These franchises provide a base to studio profitability
which will be supplemented with new
franchises as the studios develop.

2.       Each internal studio is focused on profitability and has a three year
plan in which the profitability of each

individual product is separately analysed.  Incentive plans for studios are
built around the on-time delivery of
profitable products.

3.       Those studios that do not fit into the Group's long-term plans have
been sold.  In June 2006 we sold the trade
and assets (although not the name) of Core Design and in July 2006 we sold our
minority shareholding in Pyro Studios.
The financial impact of these transactions was not material.

4.       In January 2006 we appointed Julien Merceron as our Chief Technology
Officer.  Julien, who has considerable
industry experience, was recruited from Ubisoft.  He is working with our
development team, headed by Development
Director Darren Barnett, to enable our studios to share their technology more
effectively.  This focuses our worldwide
development resources on the shared use of a limited number of very high quality
technologies, maximising the
effectiveness of our development resources and increasing our speed to market. 
We expect to see significant benefits
from this initiative from 2008 onwards.

5.       We continue to open development studios in cost effective locations. 
During 2006 we opened a development
studio in Budapest and expect this trend to continue.

Our fully owned development studios are Crystal Dynamics (San Francisco), Io
Interactive (Copenhagen), Beautiful Game
Studios (London), Pivotal Games (Bath), Eidos Sweden (Helsinborg) and Eidos
Hungary (Budapest).  We also own 25.1% of
Rocksteady Studios (London).  In addition we continue to work with a number of
high quality third party developers.

We continue to seek areas to manage delivery and commercial risks.  In 2005 we
entered into completion bonds with Film
Finance Inc who guarantee that a game will be delivered on time, on budget and
to specification.  Two games were
delivered under these arrangements in 2006 and a further title is in
development. We expect to continue to use this
style of arrangement to ensure the successful delivery of certain products.

In 2006 we entered into two agreements with the Ingenious Games Fund to provide
direct financial investment into two of
our products. Under this agreement, the Ingenious Fund shares in the commercial
risks and reward of the game.  As the
Group continues to grow its product portfolio we expect further arrangements of
this nature.

Publishing and distribution strategy

The Group has publishing offices in London and San Francisco plus distribution
offices in Paris, Hamburg and Madrid.
Through this structure we sell directly to the retail sector in all key Western
territories.  This increases our sales
revenue per unit, particularly in North America where we had previously licensed
our products to third parties.

During the year we closed the former Eidos distribution offices in Japan and
Australia as the volume of products sold
in those countries was not sufficient to justify the cost of an office.  Given
the different nature of the Japanese
market we believe it is currently more cost effective to licence our products to
local publishers.  During 2006 we
licensed three of our products, including Tomb Raider Legend, to Spike for the
Japanese market.

When SCi acquired Eidos it owned 75% of its Spanish distributor, Proein.  Proein
is a profitable business with a strong
presence in the Spanish market. I am pleased to say that in July 2006 we
completed the acquisition of the remaining
25%, such that this operation is now wholly owned.

We believe that our customers will increasingly download games digitally rather
than purchase physical copies from a
retailer.   As a content owner this is a very positive trend  leading to closer
customer relationships and higher
margins.  In 2006 we started to offer North American consumers the opportunity
to download PC games and expect to offer
this globally during 2007.  In addition we are selling content and offering
product demos through Microsoft Xbox Live.
In recent weeks over 750,000 gamers have downloaded either the demo or trailer
of our latest release Just Cause.

New media

Our New Media division, which principally publishes titles on mobile phones
successfully grew its revenues in 2006 and
generated a positive contribution to the Group's results.  The New Media
division published five titles during the
year, including Championship Manager Solo and Crash 'N Burn.

In 2007 we plan to publish ten titles including new versions of Tomb Raider
Legend and Hitman Blood Money.

Working capital

At 30 June 2006 the Group had £37.2 million of cash and no borrowing.

The Group started the year with £46.1 million of cash and, before allowing for
working capital movements and investment
in future products, generated £27.7 million from profitable operations.  The
closing cash figure of £37.2 million
reflects substantial investment in future products and a higher than normal
level of working capital because of product
releases close to the end of the financial year.

During the year the Group raised £17.4 million of new equity in order to
capitalise on potential opportunities,
including new licences and opportunities in the casual games area.

As we continue to build the Group we have reviewed our banking requirements. 
Based on the increased size of the Group
we are finalising new banking facilities of up to £30 million with Lloyds TSB. 
This will provide flexibility to the
Group, including the opportunity to respond quickly to product and licence
acquisition opportunities.

Other matters

The Group has reviewed its Corporate Governance policies in the light of the
rapid growth of the Group over the last 18
months.  This has resulted in a number of changes, including the appointment of
Tim Ryan as Chairman and our recent
announcement of Roger Ames joining the board as a Non-executive director. Roger
has many years' experience of the
entertainment industry, having been Chairman and CEO of Polygram UK and Warner
Music Group.

Our staff are fundamental to the success of the business and I would like to
take this opportunity to thank all our
employees for their contributions and commitment during the period, particularly
through the integration of the two
Groups.  The Board would also like to congratulate our Acquisitions Director,
Ian Livingstone, on the OBE awarded to
him in 2006 for services to the games industry.

The Group is in a strong financial position and well placed to take advantage of
opportunities for growth in an
exciting and dynamic global market.

Jane Cavanagh

27 September 2006.


SCi Entertainment Group Plc
Consolidated income statement for the twelve months ended 30 June 2006

                                         12 months to 30          9 months to 30
                                               June 2006               June 2005
                                             (unaudited)             (unaudited)
                          Notes                     £m                      £m
Revenue                     4                    179.1                    18.0
Cost of sales                                    (75.3)                  (13.0)
                                                --------               ---------
Gross profit                                     103.8                     5.0

                                              ----------            ------------
Development costs                                (27.0)                   (5.7)
Advertising                                      (19.4)                   (1.0)
Other overhead costs                             (47.8)                   (5.7)
Exceptional
development costs                                 (1.1)                   (1.9)
Exceptional overhead
costs                                             (0.7)                   (4.7)
                                              ----------            ------------
Administrative
expenses                                         (96.0)                  (19.0)

                                                --------                --------
Operating profit
(loss)                                             7.8                   (14.0)


Interest receivable                                0.7                     0.3
Interest payable                                  (0.3)                   (0.1)
Share of (loss)
profit of associates                              (0.1)                    0.4

                                              ----------              ----------
Profit (loss) before
taxation                                           8.1                   (13.4)

Tax charge                  5                      5.4                     0.5
                                               ---------              ----------
Profit (loss) for
the period                                        13.5                   (12.9)

                                                  =====                  ======
Attributable to:
Equity holders of
the parent                                        13.4                   (13.4)

Minority interests                                 0.1                     0.5
                                               ---------              ----------
                                                  13.5                   (12.9)
                                                  =====                  ======
Earnings (loss) per
share                       6                     pence                   pence
Basic                                             18.5                   (37.5)
Diluted                                           17.7                   (37.5)
                                                  ====                    ====

SCi Entertainment Group Plc
Consolidated balance sheet as at 30 June 2006

                                                      30 June 2006  30 June 2005
                                                       (unaudited)   (unaudited)
                                                              £m            £m
Non-current assets
Property, plant and Equipment                                3.2           3.4
Goodwill                                                     4.7           5.1
Intangible assets                                          105.7         116.6
Capitalised development costs                               46.1          16.8
Investments in Associates                                    0.4           0.7
Deferred tax asset                                           2.1             -
                                                        ---------   -----------

                                                           162.2         142.6
Current Assets
Inventory                                                    5.2           3.8
Trade and other receivables                                 57.5          31.2
Cash and cash equivalents                                   37.2          46.1
                                                          --------      --------
                                                            99.9          81.1
Assets classified as held for sale                           0.2             -
                                                          --------      --------
Total assets                                               262.3         223.7
                                                            ====          ====
Non current liabilities
Finance leases                                               0.5           0.6
Tax liabilities                                             15.4          19.0
                                                         ---------   -----------
                                                            15.9          19.6
Current Liabilities
Trade and other payables                                    29.3          17.8
Tax liabilities                                              7.3           4.9
Accruals and deferred income                                 8.0          14.5
Provisions                                                  15.0          14.6
                                                          -------       -------
                                                            59.6          51.8

Total liabilities                                           75.5          71.4

Equity
Share capital                                                3.8           3.5
Share premium                                               74.6          57.4
Merger reserve                                              81.3          69.9
Capital reserve                                              6.3           6.3
Foreign currency translation reserve                         0.5             -
Share based compensation                                     4.7           0.3
Employee benefit trust share reserve                        (0.9)         (0.9)
Retained profits                                            14.9           1.5
                                                           -------       -------
Equity attributable to equity holders of the parent
company                                                    185.2         138.0

Minority interests                                           1.6          14.3

Total equity                                               186.8         152.3
                                                           -------       -------
Total equity and liabilities                               262.3         223.7
                                                           =====          ====

SCi Entertainment Group Plc
Consolidated Cash Flow Statement for the twelve months ended 30 June 2006

                                              12 months to 30     9 months to 30
                                                    June 2006            June 05
                                                  (unaudited)        (unaudited)
                                                         £m                 £m
Cash flows from operating activities
Operating profit (loss)                                 7.8              (14.0)
Share based compensation                                4.4                0.2
Depreciation                                            1.8                0.6
Loss on disposal of fixed
assets                                                  0.7                  -
Amortisation of
intangible assets                                      13.0                1.2
                                                      ------               ----
                                                       27.7              (12.0)
Decrease in trade and
other receivables                                     (26.3)               1.2
(Increase) in stock                                    (1.4)               0.5
(Increase) in capitalised
development costs                                     (29.3)             (10.4)
Decrease in trade and
other payables                                          5.1               10.6
                                                    --------             ------
Cash generated from
operations                                            (24.2)             (10.1)
Interest paid                                          (0.3)              (0.1)
Corporation tax paid                                   (0.5)                 -
                                                     --------             ------
Net cash from operating
activities                                            (25.0)             (10.2)

Cash flow from investing activities
Purchase of property,
plant and equipment                                    (2.0)              (0.3)
Interest received                                       0.7                0.3
                                                     -------              -----
Net cash used in
investing activities                                   (1.3)                 -
                                                      -------              -----
Cash flows from financing activities
Proceeds from issue of
share capital                                          17.4               58.4
Acquisition expenses                                      -               (0.6)
Net cash acquired with
subsidiary undertakings                                   -               (5.0)
                                                      ------              -----
Net cash used in
financing activities                                   17.4               52.8
                                                      ------             ------

Net decrease in cash and
cash equivalents                                       (8.9)              42.6
Cash and cash equivalents
at beginning of period                                 46.1                3.5
                                                     ------              -----
Cash and cash equivalents
at end of period                                       37.2               46.1
                                                       ====                ===


SCi Entertainment Group Plc

Consolidated statement of recognised income and expense for the twelve months
ended 30 June 2006

                                           12 months to 30        9 months to 30
                                                 June 2006               June 05
                                               (unaudited)           (unaudited)
                                                      £m                    £m

Profit (loss) for the
period                                              13.5                 (12.9)
Foreign exchange gain on
retranslation of overseas
operations                                           0.5                     -
                                                   ------                 -----
Total recognised income
and expense for the
period                                              14.0                 (12.9)


Notes

1.     Financial information:

The unaudited financial information set out herein relating to the results of
SCi Entertainment Group plc (the
'Company') and subsidiary undertakings (the 'Group') for the period ended 30
June 2006 does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985.  The
unaudited financial information is the first
full set of the Group's results prepared in accordance with International
Financial Reporting Standards, incorporating
International Accounting Standards (IASs') and interpretations (collectively
'IFRS'

 Basis of preparation.

The financial information has been prepared in accordance with the accounting
policies and presentation required by
IFRS.

The comparatives for the nine months ended 30 June 2005 are not the Company's
full statutory accounts for that year.
These have been restated following the implementation of IFRS. A copy of the
statutory accounts for that year, prepared
on a UK GAAP basis, has been delivered to the Registrar of Companies. The
auditors' report on those accounts was
unqualified and did not contain a statement under section 237(2)-(3) of the
Companies Act 1985.

The comparative numbers are in accordance with those announced to the London
Stock Exchange on 31 March 2006.

The Annual report and accounts for the period ended 30 June 2006 will be posted
to the shareholders in October 2006.
Additional copies will be available via SCi's website www.sci.co.uk, or from the
Company Secretary at the Company's
registered office, Wimbledon Bridge House, 1 Hartfield Road, Wimbledon, London,
SW19 3RU.

2. EBITDA before exceptional items and share based compensation

                                          12 months to 30         9 months to 30
                                                June 2006              June 2005
                                                     £m                     £m

Operating profit (loss)                             7.8                  (14.0)
Depreciation and
amortisation                                       14.8                    1.8
Exceptional items                                   1.8                    6.6
Share based
compensation                                        4.4                    0.2
                                                --------                -------
EBITDA before
exceptional items and
share based
compensation                                       28.8                   (5.4)
                                                   =====                  =====

3. Trading profit

Trading profit represents EBITDA before exceptional items and share based
compensation plus net financing income less
depreciation.

                                          12 months to 30         9 months to 30
                                                June 2006              June 2005
                                                     £m                     £m

EBITDA before
exceptional items and
share based
compensation (see note 2)                          28.8                   (5.4)
Net financing income                                0.4                    0.2
Depreciation                                       (1.8)                  (0.6)

                                                 --------               --------
Trading profit (loss)                              27.4                   (5.8)
                                                   =====                  =====


4. Revenue

Revenue includes (a) sales of games to retailers and distributors at invoiced
amounts less value added tax and (b)
royalty payments received under licence of the right to distribute games in
certain territories or to exploit
intellectual properties in respect of certain games.

5. Taxation

                                             12 months to 30      9 months to 30
                                                   June 2006           June 2005
                                                        £m                  £m
UK and Overseas Corporation tax
Current tax on profit
for the period                                        (2.8)                  -
Deferred tax
Origination and
reversal of temporary
differences                                            8.2                 0.5
                                                       5.4                 0.5

At 30 June 2006 the Group had UK tax losses of £50 million carried forward
subject to the agreement of the tax
authorities.   In addition the Group is determining the value of overseas tax
losses with tax authorities in various
jurisdictions.

6. Earnings (loss) per share

Earnings (loss) per share has been calculated using the following:

             12 months to                         9 months to
             30 June 2006                         30 June 2005

             Earnings       Weighted     Eps      Loss         Weighted    Eps
                            average                            average
                            number of                          number of
                            shares                             shares


              £m            millions      p        £m          millions     p

Basic        13.5           72.9        18.5     (12.9)          34.4     (37.5)

Diluted      13.5           76.4        17.7     (12.9)          34.4     (37.5)

Trading
profit
(loss) per
share        27.4           72.9        37.6     (5.8)           34.4     (16.9)

Trading
profit
(loss) per
share -
diluted      27.4           76.4        35.9     (5.8)           34.4     (16.9)


The calculation of diluted weighted average number of shares does not include
0.5m share options may be issued in the
future under a long term service scheme.

7. Exceptional items

Exceptional items are those which are separately identified by virtue of their
size or incidence to allow a full
understanding of the underlying performance of the Group.   Exceptional
development costs of £1.1 million were incurred
in relation to a development contract acquired with the acquisition of Eidos. 
Exceptional overhead costs relate to
further integration costs arising in relation to the acquisition of Eidos,
including provision for an onerous lease.

8. Unaudited consolidated statement of changes in equity for the twelve months
ended 30 June 2006


           Share   Share   Merger  Capital Foreign     Share        Employee Retained  Total
           capital premium reserve reserve Currency    based        benefit  profit
                                           Translation compensation trust
                                           reserve                  share
                                                                    reserve
              £m      £m      £m       £m      £m        £m             £m       £m     £m


Balance as
at
1 July 2005   3.5   57.4    69.9      6.3       -       0.3          (0.9)      1.5   138.0

Foreign
exchange
differences
on
translating
overseas
operations
recognised
directly in
equity                                        0.5                                      0.5

Share based
compensation                                            4.4                            4.4

Profit for
the period                                                                     13.4   13.4

Issue of
share
capital      0.2    17.2                                                              17.4

Issue of
shares for
remaining
10% in
Eidos        0.1           11.4                                                       11.5

            -----  -----   -----    ----    ----      ----        ------      -----   ----

Balance
as at
30 June
2006        3.8    74.6    81.3      6.3    0.5       4.7          (0.9)       14.9  185.2
            ===    ====    ====     ====    ===       ===          ====        ====    ===

            £m      £m      £m       £m     £m        £m            £m          £m     £m


Balance
as at
1 October
2004        1.4      -      0.5      6.3     -        0.1            -         14.4   22.7

Share
based
compensation                                          0.2                              0.2

Profit for
the period                                                                    (12.9) (12.9)

Arising on
acquisition                                                        (0.9)              (0.9)

Issue of
share
capital     2.1    126.8                                                             128.9

Transfer
to
merger
reserve            (69.4)  69.4                                                          -

          -----    -----   ----   ----    -----     -----        -----        -----   ----

Balance
as at
30 June
2005       3.5      57.4   69.9    6.3      -          0.3         (0.9)        1.5   138.0
           ===      ====   ====    ====    ===         ===          ====        ====   ===


9. Dividends

No dividend has been declared for the period to 30 June 2006.

10. Post balance sheet events

In July 2006 the Group acquired the remaining 25% of Proein SL not previously
held.  At the same time it sold its 26.7%
stake in Pyro Studios SL.  The financial impact of these transactions was not
material.


                      This information is provided by RNS
            The company news service from the London Stock Exchange

END
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