13th Mar 2007 07:03
Chime Communications PLC13 March 2007 CHIME COMMUNICATIONS PLC AUDITED PRELIMINARY RESULTS FOR THE YEAR ENDED 31ST DECEMBER 2006 Chime Communications PLC, the leading marketing services group, today announcesits preliminary results for the year ended 31 December 2006, and the proposedacquisition of Fast Track, the leading sports marketing agency in the UK. • Acquisition of Fast Track, the leading sports marketing agency. 2006 Financial Highlights • Operating income up 25% to £78.8 million (2005: £63.0 million) - Organic growth of 11% • Operating profit up 47% to £12.3 million (2005: £8.3 million) - Organic growth of 33% • Margin improvement to 15.6% (2005: 13.2%) • Profit before tax up 51% to £11.1 million (2005: £7.3 million) • Earnings per share up 24% to 3.08p (2005: 2.49p) • Net cash of £2.9 million compared to net debt at 31st December 2005 of £3.0 million • Dividend increased by 21% to 0.58p per share (2005: 0.48p) Lord Bell, Chairman of Chime Communications, said : "These are excellent results. The company has made considerable progress acrossall its divisions with double digit growth in all the key indicators. Thisgrowth is continuing into the beginning of 2007. We are delighted with theacquisition of Fast Track, the UK's leading sports marketing agency." Note: The acquisition of Fast Track is subject to shareholder approval For further information please contact: Lord Bell, Chairman 020 7861 8515Chime Communications Christopher Satterthwaite, Chief Executive 020 7861 8515Chime Communications Charles Cook/Chris Hamilton 020 7861 3232Bell Pottinger Corporate & Financial SUMMARY OF RESULTS Actual Organic (1) 2006 2005 % 2006 2005 % £m £m change £m £m change Operating income 78.8 63.0 +25% 61.8 55.6 +11% Operating profit 12.3 8.3 +47% 9.9 7.5 +33% Operating profit 15.6% 13.2% margin (1) Excluding acquisitions in 2005 and 2006 The results for 2006 show excellent growth over last year from all of ourdivisions. Operating income in 2006 increased by 25% to £78.8 million and operating profitincreased by 47% to £12.3 million, resulting in an operating profit marginincrease to 15.6%. Operating income (excluding acquisitions) rose by 11% and operating profit grewby 33%. Earnings per share increased by 24.0% to 3.08p from 2.49p. The Board is proposing a final dividend of 0.40p per share compared to 0.32p in2005, giving a total dividend per share of 0.58p compared to 0.48p in 2005, anincrease of 21%. Net cash at 31st December 2006 was £2.9 million compared to net debt at 31stDecember 2005 of £3.0 million. REVIEW OF OPERATIONS All three of our divisions showed double digit growth in operating income andoperating profit growth in excess of 20%. The percentage contribution from each of our divisions is as follows : Share of Share of Operating Income Operating Profit 2006 2005 2006 2005Division % % % % Public Relations 61 65 65 75 Advertising and 33 29 27 17Marketing Services Research 6 6 8 8 ------------------------------------------ 100 100 100 100 =========================================== Public Relations - Bell Pottinger Group 2006 2005 % change £m £m Operating income 47.8 40.8 17.3% Operating profit 8.3 6.6 24.0% Operating margin 17.3% 16.3% The Public Relations Division includes the Bell Pottinger Group, Bell PottingerSans Frontieres, Bell Pottinger Middle East, Good Relations, De FactoHealthcare, Resonate, Harvard and Insight. Operating income for 2006 increased by 17% to £47.8 million and operating profitincreased by 24% to £8.3 million, resulting in an operating profit margin of17.3%. Bell Pottinger Public Relations Group retained its position at the top of the PRWeek league table published in April 2006. It has been number one for fouryears. New business wins in 2006 have included : 118 118 Ladies European Golf TourBDO Stoy Hayward Lastminute.comBody Shop Merck PharmaceuticalsBritish Technology Group (BTG) National GridDigital UK Network RailDisney Consumer Products PermiraDubai Aerospace Enterprise (DAE) Pernod Ricard (Havana Club, MalibuDubai International Airport and Stolichnaya)Enigma Diagnostics PfizerFoxtons Polo Ralph LaurenGSK Toshiba MobileHansard Global plc VaselineHogg Robinson Group Vichy LaboratoriesKellogg's Zara Phillips Advertising and Marketing Services - VCCP Group The advertising and marketing services division incorporates VCCP, VCCP Digital,VCCP Search, SFW (Direct Marketing), Gasoline, Pure Media, Teamspirit and TTA 2006 2005 % change £m £m Operating income 26.3 18.6 +40.9% Operating profit 3.5 1.5 +137.4% Operating profit margin 13.4% 8.0% Operating income for 2006 increased by 41% to £26.3 million and operating profitincreased by 137% to £3.5 million, resulting in an operating profit margin of13.4%. New business wins in 2006 have included : 3V London LiteCoke Zero Miller BrandsDepartment of Work and Pensions (Benefit MullerFraud Campaign) PowerplateFive Qatar Financial CentreHoseasons Sheilas' WheelsHouse of Fraser Weight Watchers for HeinzInside Track Research - The Opinion Leader Research Group The Research division incorporates Opinion Leader Research, Ledbury and FactsInternational which was acquired in February 2007. 2006 2005 % change £m £m Operating income 4.7 3.6 +30.9%Operating profit 1.0 0.7 +48.4%Operating profit margin 21.7% 19.1% Operating income for 2006 increased by 31% to £4.7 million and operating profitincreased by 48% to £1.0 million, resulting in an operating profit margin of21.7%. New business wins in 2006 have included : Age Concern Her Majesty's TreasuryBarclays Wealth Molton BrownBBC Radio Live 5 National Housing FederationThe Business Channel Norwich UnionCancer Research UK Liverpool VictoriaCarbon Trust OfcomCrisis ShelterDepartment for Constitutional Affairs Sony PlayStationDepartment of Work and Pensions Note: All figures above for 2005 are shown after restructuring costs. BUSINESS ACTIVITY The Group acted for 1,157 clients in 2006 compared to 1,069 in 2005. 215 ofthese clients used more than one of our businesses (183 in 2005) whichrepresented 54% of total operating income (2005 - 44%). 141 clients paid us over £100,000 in 2006, compared to 124 in 2005. Our top 30clients represented 45% of total operating income (2005 - 38%) and our largestclient represented 9% of total operating income. (2005 - 8.6%). Average income per employee was £104,000 (2005 - £98,000). Average fee incomeper client was £68,000 compared to £60,000 in 2005. 9% of our business came from digital activity and 32% of our operating incomecame from international work (international clients and work done overseas). High profile activities where we advised clients included: • Devising and managing this year's National Pensions Day, bringing together some 1,100 citizens to debate the recommendations of the Pension Commission on pension reform. • The switch of GSK's leading migraine treatment, Imigran, from prescription only to over the counter. • The communications strategy for Sky's low carbon campaign "The bigger picture". • DP World's successful £3.9 billion bid for P&O Ports. • Playtech's £550 million IPO on the London market. • The £34 million sponsorship of Tottenham Hotspur Football Club by Mansion. • Creating the 118 118 online Caroloke campaign. • Helping restore Foxtons' reputation as London's leading estate agent following a series of hostile accusations from the BBC's Whistleblower programme. • Driving the global launch of the new $15 billion Dubai Aerospace Enterprise. • Supporting sponsorship activities for Emirates at Germany 2006 as it became the first airline sponsor of the FIFA World Cup. • The new labelling campaign for the UK's leading food manufacturers. • Polo Ralph Lauren launching the new Wimbledon uniforms. • Managing the personal profile of Zara Phillips as she became world champion and BBC Sports Personality of the Year Awards we have won include: • Health Insurance Award for Best Use of Marketing to Intermediaries for Norwich Union Healthcare. • O2's winning of the Marketing Society's Loyalty Award in the 2006 Awards for Excellence and Campaign's Poster Award for Best IT and Consumer Durables Advertisement for O2. • IPA Effectiveness Awards 2006 Gold for O2 & Bronze for ING Direct. • Marketing Week Effectiveness Award winner for Financial Services - ING Direct & winner for Technology & Telecoms - O2. • Winner in 2006 of two of the Market Research industry's Excellence and Effectiveness Awards. BANKING ARRANGEMENTS The Group generated £9.0 million of cash from trading activities in 2006. Netcash at 31st December 2006 was £2.8 million compared to net debt at 31stDecember 2005 of £3.0 million. The Group continues to operate comfortably within its banking covenants. As aresult of the acquisition of Fast Track Sales Limited, the Group has increasedits borrowing facility to £25 million. This is a three year facility, maturingin February 2010. Following the Fast Track acquisition, the maximum deferred considerationsremaining to be paid will be £47 million of which £28 million relates to theFast Track acquisition. This can be paid all or partly in shares at Chime'sdiscretion. Of the remaining £19.0 million, £9.7 million is in cash and £9.3million is in shares. The maximum payable in 2007 is £2.25 million, 2008 is£12.9 million and 2009 is £1.6 million. TAXATION The effective tax charge for 2006 was 28.5% compared to 22% last year when therewas a one-off adjustment as a result of agreeing some prior year tax charges. Weexpect the effective tax rate for 2007 to be similar to 2006. DIVIDENDS The Board is proposing to pay a final dividend of 0.40p per share (2005 -0.32p), giving a total dividend per share of 0.58p compared to 0.48p in 2005.This is an increase of 21%. The final dividend will be payable on 22nd June 2007to shareholders on the register at 1st June 2007. The expected ex-dividend dateis 30th May 2007. CORPORATE AND SOCIAL RESPONSIBILITY The Group has made a commitment to improve its environmental practices and as aresult became carbon neutral in January 2007. CORPORATE DEVELOPMENTS We have today announced the proposed acquisition of Fast Track Sales Limited andits subsidiaries. Fast Track is the UK's leading sports marketing agency. The initial consideration is £15 million payable £10 million in cash from withinthe Group's facilities and £5 million in Chime shares. Deferred consideration ispayable on the average profits for the three years ended 31st December 2009 andthe three years ended 31st December 2012. The maximum total consideration(initial and deferred) is £43 million. The transaction (initial and deferredconsiderations) is based on a multiple of 7 times average pretax profits. Deferred consideration can be paid in Chime shares or loan notes at Chime'sdiscretion. Any Chime shares issued to satisfy the deferred consideration aresubject to restrictions on sale. Reported pretax profits (under UK GAAP) for the year to 31st December 2006 were£371,000 and the four main shareholders of Fast Track have warranted pretaxprofits for the year to 31st December 2007 of £2.5 million. It is expected thatthe transaction will be earnings enhancing to the Group. Gross assets (under UK GAAP) of the Fast Track Group at 31st December 2006 were£6.6 million. The four principal shareholders and Directors of the company; Alan Pascoe,Edward Leask, John Ridgeon and Jim Glover are remaining with the Group undertheir existing contractual arrangements. As this transaction will be a class 1 acquisition for the Group under theListing Rules, a circular needs to be sent to shareholders and their approvalsought for the transaction. It is expected that this circular will be sent toshareholders shortly. The financial information included in the circular will beprepared in accordance with IFRS and Chime's normal accounting policies as isrequired by the Listing Rules as these are the financial reporting procedures ofthe Group. As a result, the profit and gross asset numbers stated above maydiffer from those that appear in the circular. Any such differences will beexplained in the circular. We have expanded our representation in the Middle East by opening offices inQatar, Saudi Arabia and Abu Dhabi. These report to our existing headquarters inDubai - Bell Pottinger Middle East. We have established a specialist office in Washington as part of Bell PottingerSans Frontieres. We have continued to expand the digital capabilities within the Group during2006. This expansion has included : a web mapping business within the Bell Pottinger Group which provides clientswith analysis of online communications about their brands and issues facingthem. an integrated business within VCCP which offers pay-per-click and natural searchengine optimisation services, online creative advertising and an online mediabuying capability. In February 2007 we continued the expansion of our research division byacquiring a 75% stake in Facts International, a fieldwork research businessbased in Ashford, Kent from Barbara Lee and Elizabeth Teague. The remaining 25%is held by the new Chairman of Facts International. The gross assets of Facts at31st July 2006 were £1.2 million. BOARD RESTRUCTURING Two of our Non-Executive Directors have retired from the Board. We would like tothank Dame Sue Tinson and Lord Hannay for their considerable contribution overmany years. We are in the process of recruiting new Non-Executive Directors. OUTLOOK Our performance in 2006 was excellent and we have more than achieved the targetswe set ourselves in the first year of our three year plan. Our marketplace continues to grow and we foresee further growth in internationalrevenue this year. Our ability to develop international work without the massiveoverheads of an international network means that it is very profitable growth. We have invested in our digital/online capability so that we are well positionedfor the much commented on movement from offline to online. Our results for the first two months of 2007 are better than we achieved in 2006and we are optimistic about the full year. Lord BellChairman13th March 2007 Consolidated Income StatementYear ended 31 December 2006 2006 2005 £'000 £'000 Note CONTINUING OPERATIONS Turnover 165,246 116,403 Cost of sales (86,430) (53,371) ----------------------- OPERATING INCOME 78,816 63,032 Other operating income - - Operating expenses (66,552) (53,410) ----------------------- 12,264 9,622 Restructuring costs - (1,286) ----------------------- OPERATING PROFIT 2 12,264 8,336 Share of results of (280) (111) associates Investment income 93 152 Finance costs (402) (830) Finance cost of deferred consideration (612) (222) ----------------------- PROFIT BEFORE TAX 11,063 7,325 Tax (3,156) (1,608) ----------------------- PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS 7,907 5,717 DISCONTINUED OPERATIONS Loss for the period from discontinued operations - (660) Profit for the period from sales of associate - 2,662 ----------------------- PROFIT FOR THE YEAR 7,907 7,719 ======================= Attributable to: Equity holders of the 7,647 7,536 parent Minority interest 260 183 ----------------------- 7,907 7,719 ======================= EARNINGS PER SHARE 3 From continuing operations Basic 3.08p 2.49p Diluted 3.03p 2.46p From continuing and discontinued operations Basic 3.08p 3.39p Diluted 3.03p 3.34p Consolidated Statement of Recognised Income and ExpenseYear ended 31 December 2006 2006 2005 £'000 £'000 Exchange differences on translation of foreign subsidiaries (106) (137) --------------------- Net expense recognised directly in equity (106) (137) Profit for the year 7,907 7,719 --------------------- Total recognised income and expense for the year 7,801 7,582 --------------------- Attributable to: Equity holders of the parent 7,541 7,399 Minority interest 260 183 ---------------------- Total recognised income and expense relating to the year 7,801 7,582 ---------------------- Consolidated Balance Sheet as at 31 December 2006 2006 2005 £'000 £'000 Non-current assets Goodwill 74,730 68,606 Other intangible assets 10 140 Property, plant and equipment 2,972 2,305 Investments in associates 582 891 Due from deferred consideration 950 950 Deferred tax asset 1,747 1,338 ------------------------ 80,991 74,230 ------------------------ Current assets Work in progress 686 565 Trade and other receivables 30,813 27,098 Cash and cash equivalents 6,652 6,997 ------------------------ 38,151 34,660 ------------------------ Total assets 119,142 108,890 ------------------------ Current liabilities Trade and other payables (37,996) (34,964) Current tax liabilities (2,475) (1,865) Obligations under finance leases (109) (142) Short-term provisions (2,133) (690) ----------------------- (42,713) (37,661) ----------------------- Net current liabilities (4,562) (3,001) ------------------------ Non-current liabilities Bank loans (2,928) (8,485) Long-term provisions (13,167) (8,880) Obligations under finance leases (49) (129) ----------------------- (16,144) (17,494) ----------------------- Total liabilities (58,857) (55,155) ----------------------- Net assets 60,285 53,735 ----------------------- Equity Share capital 12,684 12,654 Share premium account 26,594 26,475 Own shares (5,968) (6,961) Equity reserve 33,764 32,817 Translation reserve (245) (139) Accumulated losses (6,971) (11,375) ----------------------- Equity attributable to equity holders of the parent 59,858 53,471 Equity minority interest 427 264 ----------------------- Total equity 60,285 53,735 ----------------------- Consolidated Cash Flow StatementYear ended 31 December 2006 2006 2005 £'000 £'000 Note Net cash inflow from operatingactivities 5 7,694 8,239 Investing activitiesInterest received 93 147Dividends received from associates - 5Proceeds on disposal of property,plantand equipment 69 218Purchases of property, plant and equipment (1,703) (1,090)Purchases of other intangible assets - (5)Proceeds from disposal of investment - 266Acquisition of investment in anassociate - (72)Disposal of investment in associate 2,862 (50)Loans repaid by/(granted to) associates 13 (411)Acquisition of subsidiaries (359) (7,191)Net proceeds from disposal of subsidiaries (74) (98) -----------------------Net cash from/(used in) investingactivities 901 (8,281) ----------------------- Financing activitiesDividend paid (1,243) (1,009)Dividends paid to minorities (92) (122)Repayments of borrowing (5,557) (410)Repay loan notes (878) (527)Repayments of obligations underfinance leases (156) (143)Proceeds on issue of ordinarysharecapital - 4,692Buy back of warrants (800) -(Purchase of)/Proceeds from saleof ownshares (214) 2 -----------------------Net cash (used in)/from financingactivities (8,940) 2,483 ------------------------ Net (decrease)/increase in cashand cashequivalents (345) 2,441 Net funds at beginning of year 6,997 4,556 ---------------------- Cash and cash equivalents at endof year 6,652 6,997 ====================== Cash and cash equivalents comprise cash at bank, loan note depositsless overdrafts andTaking into account the following borrowings net cash/(debt) was:Bank loans (2,928) (8,485)Finance leases (158) (271)Loan notes outstanding (642) (1,254) -------------------------Overall net cash/(debt) 2,924 (3,013) Notes: 1. Business Segments For management purposes, the group is currently organised into three operatingdivisions - Public Relations, Advertising and Marketing Services and Research.These divisions are the basis on which the group reports its primary segmentinformation. Principal activities are as follows: Public Relations The public relations division comprises some of the leading names in theindustry, including Bell Pottinger, Good Relations, The Smart Company, Harvardand Insight, which together advise the owners and promoters of more than 300major UK and international brands. The public relations division is ranked firstin the PR Week public relations consultancy league table for 2006. Advertising and Marketing Services ('AMS') The AMS division possesses specialist skills in advertising and marketingservices - sales promotion, direct marketing, advertising, design, mediaplanning and buying, digital online content creation, customer publishing andcustomer loyalty, and specialises in the niche markets of property, financialservices and healthcare. Research The research division is made up of Opinion Leader Research and LedburyResearch. Opinion Leader Research is one of the UK's leading researchconsultancies and Ledbury Research provides research and advice to brands whomarket and sell to high net worth consumers. The group's operations are located in the United Kingdom, German, the MiddleEast and USA. The group's Advertising and Marketing Services and Researchdivisions are located solely in the United Kingdom. Public Relations is carriedout in the United Kingdom, Germany, the Middle East and USA Operating Income Operating Profit 2006 2005 2006 2005 £'000 £'000 £'000 £'000 Class of business Public Relations:Continuing operations 47,847 40,801 8,262 6,661 Advertising andMarketing Services:Continuing operations 26,264 18,637 3,519 1,482 Research:Continuing operations 4,705 3,594 1,021 688 ---------------------------------------------- 78,816 63,032 12,802 8,831 Chime Central Costs - - (538) (495)Other operating income - - - - ---------------------------------------------- 78,816 63,032 12,264 8,336 ---------------------------------------------- Operating Profit Margin 2006 2005 % % Class of business Public Relations:Continuing operations 17.3% 16.3% Advertising andMarketing Services:Continuing operations 13.4% 8.0% Research:Continuing operations 21.7% 19.1% -------------------- 16.2% 14.0% Chime Central CostsOther operating income -------------------- 15.6% 13.2% -------------------- As explained in note 2, the prior year and prior period segment comparativeshave been restated. 2. Basis of preparation The financial information set out in the announcement does not constitute thegroup's statutory accounts for the years ended 31 December 2006 or 2005 but isderived from those accounts. The financial information for the year ended 31December 2005 is derived from the statutory accounts for that year which havebeen delivered to the Registrar of Companies The auditors have reported on theaccounts to 31 December 2006 and 31 December 2005; their reports wereunqualified and did not contain a statement under s.237 (2) or (3) Companies Act1985. Copies of the full accounts for 2006 will be circulated to shareholdersand after approval at the Annual General Meeting will be delivered to theRegistrar of Companies. Whilst the financial information included in thispreliminary announcement has been computed in accordance with InternationalFinancial Reporting Standards (IFRSs) this announcement does not in itselfcontain sufficient information to comply with IFRSs. The Company expect topublish full financial statements that comply with IFRSs in March 2007. The information in this preliminary announcement was approved by the board on12th March 2007. The consolidated income statement, balance sheet, statement of recognised incomeand expense and cash flow statement have been prepared on a basis consistentwith the financial statements for the year ended 31 December 2005, other than asnoted below with respect to segmental reporting and operating profit. As required by IAS 14 (Segment Reporting) the prior period comparatives havebeen restated to reflect the change in management reporting of The Smart Companywithin the group. The Smart Company was previously reported within research, itis now included within public relations. The effect of this change on theresults for the year to 31 December 2005 are as follows: Operating income£751,000; Operating profit £120,000. Operating profit is now stated after charging restructuring costs but before theshare of results of associates, investment income and finance costs. This is achange in accounting policy in the period and accordingly, the prior period andprior year comparatives have been reclassified to effect this change. 3. Earnings per share From continuing and discontinued operations The calculation of the basic and diluted earnings per share is based on thefollowing data: 2006 2005 £'000 £'000 Earnings Earnings for the purpose of basic earnings per share being net profit attributable to the equity holders of the parent 7,647 7,536 ----------------------- Number of shares Weighted average number of ordinary shares for the purposes of basic earnings per share 247,920,453 222,362,754 Effect of dilutive potential ordinary shares: Share options and deferred shares 4,390,908 1,895,423 Warrants - 1,075,622 ------------------------- Weighted average number of ordinary shares for the purposes of diluted earnings per share 252,311,361 225,333,799 ------------------------- From continuing operations 2006 2005 £'000 £'000 Earnings Net profit attributable to equity holders of the parent 7,647 7,536 Adjustments to exclude loss for the year from discontinued operations - 660 Adjustments to exclude profit for the year from sale of associates - (2,662) --------------------- Earnings from continuing operations for the purposes of basic earnings per share excluding discontinued operations 7,647 5,534 ------------------- The denominators used are the same as those detailed above for both the basicand diluted earnings per share from continuing and discontinued operations. From discontinued operations 2006 2005 Basic - 0.90pDiluted - 0.88p The denominators used are the same as those detailed above for both the basicand diluted earnings per share from continuing and discontinued operations. 4. Dividends 2006 2005 £'000 £'000 Amounts recognised as distributions to equity holders in the year (approved): Final dividend for the year ended 31 December 2005 of 0.32p (2004:0.30p) per share 793 614 Interim dividend for the year ended 31 December 2006 of 0.18p (2005:0.16p) per share 450 395 ------------------- 1,243 1,009 Amounts not recognised as distributions to equity holders in the year (declared): Proposed final dividend for the year ended 31 December 2006 of 0.40p (2005: 0.32p) per share 1,001 793 -------------------- 1,001 793 The proposed final dividend is subject to shareholder approval at the AnnualGeneral Meeting and has not been included as a liability as at 31 December 2006.The dividend will be paid on 22 June 2007 to those shareholders on the registerat 1 June 2007. The expected ex-dividend date is 30 May 2007. Under an agreement dated 3 April 1996, The Chime Communications Employee Trustwhich holds 4,631,907 ordinary shares representing 1.83% of the company'scalled-up share capital, has agreed to waive dividends on 3,384,907 shares, thedifference being those shares held under the deferred share scheme. 5. Notes to the consolidated cash flow statement 2006 2005 £'000 £'000 Profit from operations 12,264 8,336 Adjustments for: Loss from discontinued operation - (757) Share based payment expense 371 235 Translation differences (76) 6 Depreciation of property, plant and 1,026 1,343 equipment Amortisation of other intangible assets 130 130 Gain on disposal of property, plant and equipment (1) (33) Decrease in provisions (328) (10) ----------------------- Operating cash flows before movements in working capital 13,386 9,250 Decrease/(increase) in work in progress (121) (80) Increase in receivables (6,499) (1,724) (Decrease)/increase in payables 3,692 2,929 ------------------------ Cash generated by operations 10,458 10,375 Income taxes paid (2,306) (1,291) Interest paid (458) (845) ------------------------ Net cash from operating activities 7,694 8,239 ======================== 6. Reconciliation of equity attributable to equity holders of parent 2006 2005 £'000 £'000 Balance at 1 January 53,471 34,444Dividends paid (1,243) (1,009)Disposal of own equity shares held in treasury - (6)Buy back of warrants (800) -Deferred tax benefit in respect of share based payments - 131Credit in relation to share based payments 947 235Purchase of own shares (541) -Own shares disposed of on exercise of options 334 8Net profit for the year attributable to equity holders of the parent 7,541 7,399Increase in share capital 149 12,269 ---------------------- Balance at 31 December 59,858 53,471 ===================== 7. Events after balance sheet date In February 2007 we continued the expansion of our research division byacquiring a 75% stake in Facts International, a fieldwork research businessbased in Ashford, Kent from Barbara Lee and Elizabeth Teague. The remaining 25%is held by the new Chairman of Facts International. The gross assets of Facts at31st July 2006 were £1.2 million. We have today announced the proposed acquisition of Fast Track Sales Limited andits subsidiaries. Fast Track is the UK's leading sports marketing agency. The initial consideration is £15 million payable £10 million in cash from withinthe Group's facilities and £5 million in Chime shares. Deferred consideration ispayable on the average profits for the three years ended 31st December 2009 andthe three years ended 31st December 2012. The maximum total consideration(initial and deferred) is £43 million. The transaction (initial and deferredconsiderations) is based on a multiple of 7 times average pretax profits. Deferred consideration can be paid in Chime shares or loan notes at Chime'sdiscretion. Any Chime shares issued to satisfy the deferred consideration aresubject to restrictions on sale. Reported pretax profits (under UK GAAP) for the year to 31st December 2006 were£371,000 and the four main shareholders of Fast Track have warranted pretaxprofits for the year to 31st December 2007 of £2.5 million. It is expected thatthe transaction will be earnings enhancing to the Group. Gross assets (under UK GAAP) of the Fast Track Group at 31st December 2006 were£6.6 million. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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