Civilian Content PLC 20 July 2005 CIVILIAN CONTENT PLC LAUNCHES UK FILM DISTRIBUTION COMPANY 20 July 2005 • Civilian launches a new UK film distribution company, The Works UK Distribution Ltd • Staffed by a highly successful and experienced 5-strong team • Wholly-owned subsidiary of Civilian, complementing the two existing businesses • New development offers substantial growth potential and will lead to material expansion in catalogue assets Civilian Content Plc ("Civilian"), the film production, finance, and international sales group announces today that it is launching a UK film distribution company. The new division, which commences operations this morning, will be headed by seasoned distribution executive Mick Southworth. The company, trading as "The Works UK Distribution Ltd", will comprise a specialist team of five personnel, operating from Civilian's offices in central London. It intends to distribute some eight to ten films in its first year of operation. The company's first release will be the just-completed live action remake of the children's classic, Heidi, which will open in cinemas across the UK on August 19th. The move into UK distribution, involving the direct consumer marketing of films to the British public (in cinemas, on video/DVD, and on television) marks the most significant new corporate development by Civilian since the acquisition and re-branding of the international sales company, The Works, three years ago. The launch of the new company complements Civilian's existing activity, by adding the direct marketing of films in the UK to its existing film manufacture and international film sales operations. In its year end statement for 2004, Civilian indicated that it was actively pursuing a move into UK distribution. The UK market for film is buoyant, with cinema admissions close to their highest level in thirty years, and the DVD/ video market showing continuing exceptional growth. The UK DVD/video sector alone generated £3.13 billion in 2004, a 9% increase on the previous year. The overwhelming majority of DVD/video sales are accounted for by feature films (85%). As well as complementing Civilian's existing activities, the move into UK distribution provides the opportunity for material expansion, compared with existing activities (particularly in production) where there are significant constraints on volume. The launch of the new company steers the group towards a diversification of its trade and risk, and by virtue of direct marketing to the consumer, provides the opportunity to shorten the lead-time between capital expenditure on rights and trading revenues. Since The Works UK Distribution Ltd will typically be securing film rights for long licence periods of up to 25 years, the new development will lead to material growth in catalogue assets. Today's announcement takes the head count at Civilian from 18 to 23 personnel. Chris Auty, managing director of Civilian commented: "Today's announcement marks a major strategic development for the company. I am particularly pleased that we have been able to launch into distribution without the capital costs implied by the acquisition of an existing company or the long lead time required to build a team from scratch. The Works UK Distribution Ltd will be releasing its first film only four weeks after launch, and is actively negotiating further titles for release in the busy autumn season. The senior Civilian management have extensive hands-on experience of UK distribution, and today's announcement marks a further deployment of the company's existing expertise." Crispin Barker, chairman of Civilian, commented: "This announcement demonstrates our focus on further integration and expansion of the company's existing activities with a clear focus on shareholder value. I believe it may also stimulate related activity at our existing international sales operation by capturing rights which might not otherwise have been available to us. It should be noted that our significant shareholder, Fandango SRL, is already active in Italian territorial distribution. Once the new company has secured its position in the market, it is our intention in the medium term to consider launching distribution operations in other territories where the market fundamentals show an opportunity for significant growth." For further information: Civilian Content Plc 020 7612 0030 Chris Auty, Managing Director Norman Humphrey, Finance Director Citigate Dewe Rogerson 020 7638 9571 Seb Hoyle George Cazenove Notes to Editors: 1. Civilian's existing activity focuses on the capture of rights through production and their exploitation internationally by sale to individual territorial distributors abroad. The creation of The Works UK Distribution Ltd marks Civilian's entry into territorial distribution in its home territory. UK distribution means the marketing of films to the consumer as they are launched in cinemas, followed by their subsequent sale to the consumer on DVD/video some four months later, followed by their subsequent presentation to the consumer by way of free TV, pay TV, and video on demand services. 2. The team at The Works UK Distribution Ltd comprises Mick Southworth (Managing Director), Laurence Gornall (Head of Marketing), Dave Shear (Head of Sales), and Lucy Fleet (Head of Press) and an assistant. 3. The company's first release, Heidi, has been extensively trailered in cinemas across the UK since the spring of this year. This film was financed by Civilian's joint venture partner, Surefire. 4. Civilian will now have three operating subsidiaries: The Works International Sales (managed by Joy Wong), The Film Consortium (production, managed by Neil Peplow), and The Works UK Distribution Ltd (managed by Mick Southworth). All three units are located in Civilian's offices and all three units report to group MD, Chris Auty and group FD, Norman Humphrey. 5. ContentFilm plc. Mick Southworth will continue to be employed on a non-exclusive basis by ContentFilm Plc until December 2005 during which time he will continue to supervise ContentFilm's existing titles due for theatrical release. This information is provided by RNS The company news service from the London Stock Exchange