28th Jun 2012 15:30
For immediate release 28 June 2012
RAM ACTIVE MEDIA PLC
("RAM" or the "Company")
FINAL RESULTS
RAM Active Media, the AIM-listed investor in digital technologies, announces its preliminary results for the 12 months ended 31 December 2011.
Chairman's Statement
Financial Review
The results for the year to 31st December 2011, whilst an improvement on those for the comparable period the previous year, were disappointing and indicate a group whose fortunes are still in transition.
Total sales were £2.8m (2010: £1.3m), gross profit £728k (2010: £594k) and the operating loss after exceptional administrative expenses of £771k was £2.8m (2010: £2.7m). The loss for the year of £3.0m (2010: £3.2m) was taken, however, after total non-recurring costs and expenses of £1.87m.
The latter figure was a combination of RAM Trains operating overheads, share option costs, impairment of available for sale financial assets, financing fees and goodwill written off on cessation of dormant subsidiaries.
In June 2011 the company raised £2.42m of new equity which financed the losses and also enabled group borrowings to end the year at £689k (2010: £2.09m). Group net equity as at the year-end was £493k as compared with £105k at the beginning of the reporting period.
Key Performance Indicators
·; In addition to the monthly management accounts, the Board uses the following key performance indicators in the management of the key risks of the business and as a measure of business efficiency.
·; Sales performance is measured against plan, and against latest expectations which are updated quarterly.
·; Costs are monitored against plan and current needs.
·; Cash is monitored closely to ensure that the company avoids an overdraft at all times. The cash balance at year end was £175,852 (2010: £440,915).
·; The commerciality of each screen and shopping centre is evaluated regularly.
Corrective actions were taken during the year where these indicators were not satisfactory.
Overview of operations
RAM Vision
Ram Vision our digital out of home ("DOOH") advertising business is now established across 40 locations within the UK and offers advertising clients an annual footfall of more than 600 million consumers. This has led to major global brands advertising with us including Coca Cola, Mars, Intel, BT, American Express, Microsoft, SONY, Paramount and Universal Pictures. These contracts were won both through our in-house sales team and by working in partnership with large agencies.
Our roll out strategy of the installation of more screens in more locations remains dependent on finding suitable funding for the associated capital expenditure. The company is in the advanced stages of contract negotiations with third party debt providers to allow this expenditure to be financed with non-recourse off-balance sheet finance rather than the company's equity.
With suitable funding and continued contract wins for both additional locations and new advertising clients the business is expected to be cash flow positive from the last quarter of 2012. In terms of operating profits the company has the abiliy to grow without the need to commensurately increase its overhead.
RAM Trains
The Company traded most of the year as TrainFX Limited and was rebranded as RAM Trains Limited following the formation of the joint venture with CETEC Europe Limited. The current position is that the group's wholly owned subsidiary Ram Trains Ltd now owns 30% of TrainFX Ltd and 70% is owned by CETEC Europe Ltd, a subsidiary of the large Chinese conglomerate Changzhou Evergreen Group (CEG).
CEG has R&D and manufacturing interests in materials technology, rail equipment and electric power amongst other areas.
RAM Trains has been given exclusive rights to sell digital media on train contracts that CETEC successfully wins over the coming years.
Group Financing
Fundraising
As a substantial contribution to meeting these working capital requirements your group has also today separately announced an equity funding of £1.73m.
This funding is a combination of a cash placing and assets and establishes its newly formed subsidiary, RAM Interactive Limited, which has a business plan centred on the installation of 3D format advertising screens that do not require the use of special glasses by the viewer.
As a result of this equity placing the Dubai based Free Ray LLC, the exclusive distributor of these 3-D screens, will hold 18% of the fully diluted capital of your group.
Board and Employees
Subsequent to the year end the company has strengthened its board with the appointment of Richard Prosser as Chief executive and David Binding as a non-executive director. Collectively the board has in depth experience in media, financial, strategic, commercial, legal and compliance that will aide in the development of our business through both organic and acquisition based growth.
Outlook
The Board regard the strengthening of the board and the establishment of RAM Interactive Ltd as important steps in broadening the management and operational strengths of the business.
Operating results have continued to show losses in the first half but it is anticipated that the group will become cash flow positive after all costs including central costs by the end of the current financial year.
The combination of an increased estate within RAM Vision, greater and better margin advertising sales within that estate, lower costs across all subsidiaries and associates, the new growth subsidiary of RAM Interactive, a stronger balance sheet and tighter financial and management controls will all begin to manifest within the group's reporting results over the following semi-annual results.
In addition and not modelled within these assumptions is the belief that the Group will receive rising royalties from TrainFX over the next 3 years and in the meantime TrainFX requires no further investment or funding by the PLC.
Tim Baldwin
Executive Chairman
RAM ACTIVE MEDIA PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2011
2011 | 2010 | ||
Note | £ | £ | |
Continuing operations | |||
Revenue | 5 | 2,858,415 | 1,330,127 |
Cost of sales | (2,130,087) | (735,536) | |
Gross profit | 728,328 | 594,591 | |
Administrative expenses | (3,014,444) | (3,407,441) | |
Administrative expenses - exceptional item | 6 | (771,316) | 94,039 |
(3,057,432) | (2,718,811) | ||
Loss on disposal of assets | 6 | 216,280 | (39,251) |
Operating loss | (2,841,152) | (2,758,062) | |
Finance income | 24 | - | - |
Finance costs | 24 | (184,401) | (482,610) |
Finance costs - net |
| (3,025,553) | (482,610) |
Share of loss of associate |
| (17,620) | - |
Loss before income tax |
| (3,043,173) | (3,240,672) |
Income tax expense | 25 | - | - |
Loss for the year from continuing operations |
| (3,043,173) | (3,240,672) |
Loss attributable to: |
|
|
|
Owners of the parent |
| (3,043,173) | (3,240,672) |
Non-controlling interest |
| - | - |
|
| (3,043,173) | (3,240,672) |
Earnings per share |
|
|
|
Basic earnings per share - continuing and total operations | 26 | (3.9)p | (3.3)p |
Diluted earnings per share - continuing and total operations | 26 | (3.9)p | (3.3)p |
RAM ACTIVE MEDIA PLC
CONSOLIDATED STATEMENT OF COMPREHEMNSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2011
2011 | 2010 | |
£ | £ | |
Loss for the year | (3,043,173) | (3,240,672) |
Other comprehensive income: | ||
Changes in fair value of available for sale financial assets | (62,825) | (62,825) |
Other comprehensive income for the year, net of tax | (62,825) | (62,825) |
Total comprehensive income for the year | (3,105,998) | (3,303,497) |
Attributable to: | ||
Owners of the parent | (3,105,998) | (3,303,497) |
Non-controlling interest | - | - |
Total comprehensive income for the year | (3,105,998) | (3,303,497) |
RAM ACTIVE MEDIA PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 DECEMBER 2011
2011 | 2010 | ||
Note | £ | £ | |
Assets | |||
Non-current assets | |||
Property, plant and equipment | 7 | 442,297 | 361,543 |
Intangible assets | 8 | 1,099,487 | 2,105,492 |
Investment in associate | 9 | 163,636 | - |
Available for sale financial assets | 10 | 68,416 | 164,574 |
1,773,836 | 2,631,609 | ||
Current assets | |||
Inventory | 11 | - | 491,363 |
Trade and other receivables | 12 | 562,429 | 977,707 |
Cash and cash equivalents | 13 | 175,852 | 440,915 |
738,281 | 1,909,985 | ||
Total assets | 2,512,117 | 4,541,594 | |
Equity | |||
Capital and reserves attributable to equity holders of the Company | |||
Ordinary shares | 14 | 2,673,930 | 1,214,055 |
Deferred shares | 14 | 9,983,447 | 9,983,447 |
Share premium account | 18,376,670 | 16,546,420 | |
Merger reserve | 65,000 | 327,272 | |
Shares to be issued reserve | 773,691 | 634,663 | |
Retained earnings | 16 | (31,379,375) | (28,600,649) |
Non-controlling interest | - | - | |
Total equity | 493,363 | 105,208 | |
Liabilities | |||
Non-current liabilities | |||
Borrowings | 18 | 92,811 | - |
92,811 | - | ||
Current liabilities | |||
Trade and other payables | 17 | 1,329,237 | 2,345,797 |
Borrowings | 18 | 596,706 | 2,090,589 |
1,925,943 | 4,436,386 | ||
Total liabilities | 2,018,754 | 4,436,386 | |
Total equity and liabilities | 2,512,117 | 4,541,494 |
RAM ACTIVE MEDIA PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2011
Shares to | Non- | |||||||
Share | Share | Retained | be issued | Merger | controlling | Total | ||
capital | premium | earnings | reserve | reserve | Total | interest | equity | |
£ | £ | £ | £ | £ | £ | £ | £ | |
Balance at 1 January 2010 | 10,743,331 | 14,876,985 | (23,310,115) | 113,799 | 327,272 | 2,751,272 | (358,961) | 2,392,311 |
Loss for year | - | - | (3,240,672) | - | - | (3,240,672) | - | (3,240,672) |
Purchase of non-controlling interest | - | - | (1,987,037) | - | - | (1,987,037) | 358,961 | (1,628,076) |
Other comprehensive income: | ||||||||
Changes in fair value of available for sale financial assets | - | - | (62,825) | - | - | (62,825) | - | (62,825) |
Transactions with owners: | ||||||||
Issue of share capital | 454,171 | 1,704,719 | - | - | - | 2,158,890 | - | 2,158,890 |
Costs of issue of share capital | - | (35,284) | - | - | - | (35,284) | - | (35,284) |
Share options issued | - | - | - | 471,453 | - | 471,453 | - | 471,453 |
Convertible loan-equity component | - | - | - | 49,411 | - | 49,411 | - | 49,411 |
Balance as at 31 December 2010 | 11,197,502 | 16,546,420 | (28,600,649) | 634,663 | 327,272 | 105,208 | - | 105,208 |
Balance as at 1 January 2011 | 11,197,502 | 16,546,420 | (28,600,649) | 634,663 | 327,272 | 105,208 | - | 105,208 |
Loss for year | - | - | (3,043,173) | - | - | (3,043,173) | - | (3,043,173) |
Reclassification of reserves of disposed subsidiaries | - | - | 327,272 | - | (327,272) | - | - | - |
Other comprehensive income: | ||||||||
Changes in fair value of available for sale financial assets | - | - | (62,825) | - | - | (62,825) | - | (62,825) |
Transactions with owners: | ||||||||
Issue of share capital | 1,459,875 | 1,919,125 | - | 35,000 | 65,000 | 3,479,000 | - | 3,479,000 |
Costs of issue of share capital | - | (88,875) | - | - | - | (88,875) | - | (88,875) |
Share options issued | - | - | - | 128,859 | - | 128,859 | - | 128,859 |
Convertible loan-equity component | - | - | - | (24,831) | - | (24,831) | - | (24,831) |
Balance as at 31 December 2011 | 12,657,377 | 18,376,670 | (31,379,375) | 773,691 | 65,000 | 493,363 | - | 493,363 |
RAM ACTIVE MEDIA PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2011
2011 | 2010 | ||
Note | £ | £ | |
Cash flows from operating activities | |||
Loss before tax | (3,105,998) | (3,303,497) | |
Adjustments for: | |||
Depreciation | 7, 8 | 190,268 | 180,455 |
Goodwill impairment | 8 | 983,404 | - |
Equity-settled share-based payment transactions | 15 | 128,859 | 271,453 |
Share of loss from associate | 9 | 17,620 | - |
Net finance income recognised in profit or loss | 24 | 184,401 | 482,610 |
Change in value of available for sale financial assets | 10 | 62,825 | 62,825 |
Loss on disposal of equipment/fixtures and fittings | 50,349 | - | |
Profit on disposal of intangibles | 6 | (130,091) | - |
(Profit)/Loss on disposal of financial assets | 6 | (92,308) | 39,251 |
(1,710,671) | (2,266,903) | ||
Changes in working capital: | |||
Increase in inventories | 11 | 471,221 | (491,363) |
Increase in trade and other receivables | 12 | 404,552 | (361,731) |
Increase/(decrease) in trade and other payables | 17 | (1,053,127) | 1,281,126 |
Cash used in operations | (1,888,025) | (1,838,871) | |
Interest paid | 24 | (184,401) | (482,610) |
Net cash used in operating activities | (2,072,426) | (2,321,481) | |
Cash flows from investing activities | |||
Interest received | - | - | |
Proceeds from sale of investment | 125,641 | 99,000 | |
Proceeds from sale of subsidiary | 33,000 | - | |
Acquisition of equipment/fixtures and fittings | 7, 8 | (150,572) | (206,525) |
Acquisition of subsidiary net of cash | 73 | (1,428,075) | |
Net cash used in investing activities | 8,142 | (1,535,600) | |
Cash flows from financing activities | |||
Proceeds from issue of shares | 14 | 3,225,125 | 2,123,606 |
Proceeds from issue of convertible loan notes | 18 | - | 450,000 |
Proceeds from borrowings | 18 | 300,000 | 1,792,500 |
Repayment of other short-term loans | 18 | (1,725,904) | (507,500) |
Net cash generated from financing activities | 1,799,221 | 3,858,606 | |
(Decrease)/increase in cash equivalents | (265,063) | 1,525 | |
Cash and cash equivalents at beginning of year | 440,915 | 439,390 | |
Cash and cash equivalents at end of year | 175,852 | 440,915 |
The financial information in this announcement does not comprise statutory accounts for the purpose of Section 435 of the Companies Act 2006 for the years ended 31 December 2010 or 2011. It has been extracted from the Company's consolidated accounts for the period to 31 December 2011 which are audited.
Whilst the information in this announcement has been prepared in accordance with recognition and measurement criteria of International Financial Reporting Standards (IFRS) this announcement in itself does not give sufficient information to comply with IFRS.
Going concern
During the year the Group made a loss of £3,043,173 and its current liabilities exceeded its current assets by £1,187,662. The Board has a strategic plan for the next 3 years which sees the Group move towards significant profitability. Central to this are the doubling of the RAM Vision estate as outlined in the Chairman's report whilst maintaining or improving the level of advertising revenue; and the increased national and international opportunities following the restructuring of TrainFX.
As announced separately today, the Group has successfully raised £1.73 million through a combination of equity placing, investment in shares and acquiring network assets for equity consideration. The Group is now engaged in further fundraising to improve the Group's financial position and provide sufficient working capital for the foreseeable future. The Directors believe that this will secure the Group's financial future as the strategic plan for the next 3 years requires limited equity funding.
Whilst the Directors are presently uncertain as to the outcome of the fundraising, they believe that it is appropriate for the financial statements to be prepared on the going concern basis having considered the forecasts for the twelve-month period from the date of signing these financial statements and believe that the Group's financial resources will be sufficient to enable the Group to continue in operation for the foreseeable future after taking into account the successful and planned fundraising. The financial statements do not include any adjustments that would result if the Group is unable to continue as a going concern.
-ENDS-
For further information please contact:
Tim Baldwin
RAM Active Media 0207 518 4300
Sandy Jamieson/Thilo Hoffmann
Libertas Capital Corporate Finance Limited 0207 569 9650
Related Shares:
RAM.L