24th Jul 2007 07:00
Thomson Intermedia PLC24 July 2007 24 July 2007 Thomson Intermedia plc Final results for 15 months to 30 April 2007 Thomson Intermedia plc ("Thomson Intermedia" or the 'Group', AIM: THN), aleading provider of media intelligence, today announces its final auditedresults for the fifteen months to 30 April 2007. Highlights • Group revenue for the 15 month period was £20.0m (2006 - 12m to 31/1: £11.1m) - 12 months Group revenue up 16% to £15.8m (2006 - 12m to 30/4: £13.7m) - 12 months Core revenue up 29% to £15.1m (2006: £11.7m)• Group underlying* operating profit for 15 months was £3.1m (2006: £2.4m) - 12 months Group underlying* profit was £2.2m (2006: £2.9m) - 12 months Core underlying* operating profit up 33% to £2.3m (2006: £1.8m)• Group underlying* profit before tax for 15 months was £2.7m (2006: £2.4m)• Group profit before tax for 15 months was £0.4m (2006: £1.9m)• Underlying* diluted earnings per share for 15 months was 8.01p (2006: 7.30p)• Management team strengthened across a number of levels• Developed a new route to market to accelerate sales growth in the UK• Strong international growth with the US up 57% on last year - Investment completed in Spain and licensing deals signed in Greece and Cyprus• Encouraging momentum in current year with core renewal rates (by value) over 100% * before Highlighted Items (see Note 3 below) Sarah Jane Thomson, Joint Chief Executive of Thomson Intermedia plc, said: "2006/07 was a particularly notable year for the Group with important advancesachieved although revenue from Development projects was lower than our originalexpectations. Operationally we have now firmly established all of our keycapabilities in terms of products, data, technology and route to market.Financially we are now in a much more robust position, having completed athorough overhaul of all our finances. "This year we are seeing some good momentum in the Core business with renewal rates exceeding 100%. Furthermore, our international operations continue to grow strongly, especially in the US where there are significant market opportunities." Enquiries: Thomson IntermediaSarah Jane Thomson, Joint Chief Executive Today 020 7457 2020Michael Uzielli, Finance Director Thereafter 020 7321 4000 BridgewellShaun Dobson/Fred Ward 020 7003 3000 College HillAdrian Duffield/Ben Way 020 7457 2815/2055 Overview Thomson Intermedia made good progress during the past fifteen months with Grouprevenues reaching £20 million, although revenue from Development projects waslower than originally anticipated. As outlined below, there have been a numberof significant achievements which position the Group well for future growth: • Completion of the integration of billetts, significantly bolstering the overall management team• Strengthening the Board with three new appointments, including a new Finance Director• Signing of a partnership agreement with WPP's GroupM, the world's leading media agency group• Development of a suite of tailored online systems to support a new route to market• Exploitation of the exclusive capture of advertising from over 90% of regional newspapers• Strong growth of the international business, particularly in the US, to 20% of total revenues• Completion of a licensing deal for media monitoring in Greece and Cyprus• Investment in a media auditing business in Spain The Group classifies its business into two types: Core and Development. TheCore business, encompassing Subscriptions, Consultancy and International incomestreams, has continued to grow strongly. As highlighted earlier this year,Development income was lower than originally anticipated as a result of delaysin securing pipeline opportunities. However, these projects remain active andalthough they have the potential to be important sources of income, theshortfall has not impacted the underlying performance and progress of the Group. The new Finance Director initiated a comprehensive review of the Group's assetsand finances and consequently a more rigorous approach was adopted to revenuerecognition as part of the year end close process. This led to a one-offadjustment to revenue and costs at the year end. Strategy & Positioning Thomson Intermedia aims to become the essential provider of business criticalmedia intelligence, measurement and evaluation services to UK and globalcustomers. The Group operates in a fast-changing market, historically based ontrust, where the need for reliable, comprehensive media data has never beengreater. There is also an increasing focus by advertisers on the value andeffectiveness of their marketing spend, often their largest external cost. Thomson Intermedia is uniquely placed to capitalise on this market opportunity,based on: • Its leading positions in data capture, data analysis, and media consultancy• The comprehensiveness, accuracy and sheer size of its database• Its integrated, proprietary systems and technical expertise and• The Group's deep knowledge and experience of the media industry The database has been developed over ten years. It currently holds 72 terabytesof data comprising four million advertisements which have appeared a quarter ofbillion times across all the media including the internet. The database is akey asset with market-leading functionality and content, providing the Groupwith a notable competitive advantage. Uniquely, Thomson Intermedia receivesdata in digital form from over 1,000 regional publications. Since its launch inDecember 2005, the Publisher Platform has processed 2.3 million pdfs and hascaptured some two million new creatives; the Group is currently processing over300,000 regional pdfs a month. Thomson Intermedia's proprietary technology is world-leading and scaleable. Itssystems are fully integrated into a single database to ensure that advertisingcreatives and expenditure can be completely aligned. The technology allows thefastest and most comprehensive capture of all advertising media and insertionsand uses sophisticated, tailored interfaces to provide this fundamental data,peer group monitoring and associated analysis to marketeers. UK Market Thomson Intermedia is the leading provider of media auditing and competitivemonitoring to advertisers in the UK. The Group believes that the UK marketremains a source of significant growth. The Group aims to ensure that theThomson Intermedia system is available and in constant use on the desktops of asmany advertisers, agencies and media owners as possible in order to become thestandard currency of media spend in the UK. It is here that the Group'sdevelopment activities are focused. Not only will this create the opportunityfor a step-change in revenue for the Group in the UK, it will provide theplatform for significant growth in overseas markets. In October 2006, the Group signed a partnership with GroupM, part of WPP plc,which significantly enhances its route to market. GroupM will endorse ThomsonIntermedia's monitoring products and facilitate access to their customer base ofmore than 650 of the UK's top advertisers. Thomson Intermedia has invested asignificant amount of development time in adapting its systems for the GroupMpartnership and for the agency environment in general. It has also been activein building relationships and buy-in within the GroupM agencies, specificallyMindshare, Mediacom and Mediaedge: CIA. The development work has involved developing an entirely new agency and clientuser front-end solution, automated reporting and distribution functions andagency attribution (whereby advertisements can be filtered by agency which is afundamental requirement of this market). The new front-end product will be madeavailable to all of Thomson Intermedia's existing clients as well as to GroupMand its clients which will bring significant upgrade opportunities. The new system is currently in the late stages of beta testing and the Groupanticipates a controlled roll-out within GroupM and to existing clients startingin September. The financial benefits of this new route to market should beginto be felt by the end of the financial year. International Development The Group's business model is scaleable and there is a substantial opportunityto grow revenues in international markets, many of which are less developed interms of media information and consultancy than the UK. The Board plans tocontinue to invest in and develop businesses in key overseas markets in the formof recruitment, small acquisitions and start-ups. MPMA, the Group's US subsidiary, is a fast growth, profitable company with aleadership position in the US media auditing market. The US is the largestsingle advertising market in the world where media auditing (long accepted inthe UK) is still at a relatively early stage of penetration. The Group recentlylaunched its internet monitoring service in the US and is considering rollingout other products in due course. In Europe, the Group recently completed a modest investment in a media auditingbusiness in Spain and is actively pursuing the acquisition of a business inanother key market. These initiatives will strengthen the Group's competitiveposition in the securing of global audit mandates as well as provide a platformfor domestic growth and non-audit products. The Group is committed to growingits joint venture in Germany as well as to signing licence deals in smallerterritories such as the recently agreed transaction covering Greece and Cyprus. In due course, the Group expects to establish a direct presence in other majorand developing advertising markets. Financial Review Following the extension of the Group's accounting reference date, ThomsonIntermedia is publishing its final results for the fifteen month period ended 30April 2007. This review also contains unaudited proforma figures for the twelvemonth period ended 30 April 2007. Revenue 15 months 12 months 12 months 12 months ended 30 ended 31 ended ended April 2007 January 2006 30 April 2007 30 April 2006 (audited) (audited) (unaudited (unaudited proforma) proforma) £'000s £'000s £'000s £'000s Core 19,131 8,918 15,084 11,712Development 896 2,218 748 1,951Total Revenue 20,027 11,136 15,832 13,663 Total Group revenue increased by £8.9m to £20.0m (12 months 2006: £11.1m) forthe fifteen month period. Group revenue in the final three months was adjusteddown by £0.4m (and costs increased by £0.1m) as a consequence of a comprehensivereview of accrued income and other receivables and the more rigorous approachadopted to revenue recognition under existing policies. The adjustment relatesto income recorded in the twelve months preceding 31 January 2007 and does notreflect the underlying trading performance during the final three months of theperiod. Core revenue was up £10.2m to £19.1m (12 months 2006: £8.9m). Developmentrevenue was £0.9m (12 months 2006: £2.2m) reflecting the previously announceddelays in project income and the high level of income in 2006 from retrospectivevouching and developing the Publisher Platform. For the 12 months to 30 April 2007, total Group revenue was £15.8m, a 16%increase (£2.2m) on the previous 12 months. On the same basis, Core revenue wasup £3.4m (30%) at £15.1m and Development revenue was £1.2m lower at £0.8m. Gross Profit Gross profit for the period was £11.3m, yielding a gross margin of 56.3% (2006:62.9%) which has been consistent throughout the period. The margin decrease in2007 reflects lower development income and the inclusion of billetts for thefull period, which has a lower gross margin than the original Thomson Intermediamonitoring business. Operating Profit Profit before highlighted items is termed "underlying operating profit".Certain items have been highlighted because separate disclosure is consideredhelpful in understanding the underlying performance of the business. 15 months 12 months 12 months 12 months ended 30 ended 31 ended ended April 2007 January 2006 30 April 2007 30 April 2006 (audited) (audited) (unaudited (unaudited proforma) proforma) £'000s £'000s £'000s £'000s Core 3,317 960 2,322 1,749Development (192) 1,411 (134) 1,134Underlying Operating Profit 3,125 2,371 2,188 2,883Highlighted Items (2,337) (443)Reported Operating Profit 788 1,928 Underlying operating profit for the fifteen months was £3.1m (2006: £2.4m).Core business operating profit was £3.3m (2006: £1.0m). These figures wereadjusted down in the final three months by £0.5m as a result of the previouslymentioned year end review of accrued income and receivables. The Developmentbusiness recorded a loss of £0.2m (2006: £1.4m profit). Reported operatingprofit was £0.8m (2006: £1.9m). For the 12 months to 30 April 2007, underlying operating profit from Corebusiness was £2.3m which represents a £0.6m increase (33%) over the prior year. Highlighted Items 15 months ended 12 months ended 30 April 2007 31 January 2006 (audited) (audited) £'000s £'000s Recurring:Share based expenses 347 249Amortisation of purchased intangible assets 484 162Foreign exchange losses/(gains) 107 32Total recurring 938 443 Non recurring:Acquisition related (billetts) - performance bonus 206 - - restructuring costs 155 -Provision for doubtful debts 474 -Onerous property lease obligations 218 -Management restructuring 193 -Holiday pay accrual (IFRS) 106 -Professional fees 47 -Total non recurring 1,399 - Total highlighted items 2,337 443 The provision for doubtful debts relates to specific contracts from a line ofbusiness which the Group no longer pursues. Other provisions for doubtful debtsare included within Administrative Expenses. This provision is unrelated to theabove-mentioned £0.5m adjustment to operating profit following the year endreview of accrued income and other receivables. Profit Before Tax and EPS Net finance costs were £0.4m (2006: £nil) which reflects an increase in theGroup's borrowings as a result of the billetts transaction. Underlying profit before tax for fifteen months was £2.7m (2006: £2.4m). Forthe 12 months to 30 April 2007, underlying profit before tax was £1.8m (2006:£2.8m) whilst underlying profit before tax from the Core business increased by17% to £2.0m (2006: £1.7m). Reported profit before tax was £0.4m (2006: £1.9m). Underlying diluted earnings per share for the 15 months was 8.01p (2006: 7.30p).Diluted earnings per share was 1.87p (2006: 7.39p). Cash and Debt As at As at As at 30 April 2007 31 January 2007 31 January 2006 (audited) (unaudited) (audited) £'000s £'000s £'000s Cash 2,105 2,702 2,712Debt (5,057) (6,400) (2,937)Net Debt (2,952) (3,698) (225) Operating cashflow for the 15 months was £2.8m (2006: £1.8m), reflecting animproved working capital performance especially in the last nine months of theperiod. During the 15 months, the Group invested £0.8m in intangible assets (developmentwork now capitalised under IFRS). The associated amortisation cost in theincome statement was £0.6m. The net debt position as at 30 April 2007 was £3.0m (2006: £0.2m) following theissuance in August 2006 of vendor loan notes to the value of £3.7m related tothe billetts acquisition. As at 30 April 2007, £3.2m of these loan notes hadbeen redeemed. These redemptions were funded out of operating cash flow and a£2.0m increase in bank debt. As at 30 April 2007, the Group had unutilised banking facilities of £3.6m. Dividend The Board is not recommending the payment of a dividend, reflecting the highgrowth nature of the Group and the numerous opportunities for furtherdevelopment. However, given the cash generative nature of the Group's businessmodel this policy will be reviewed on an ongoing basis. Operational Review The Group classifies its business into two types: Core (which comprises Subscriptions, Consultancy and International) and Development. Core Business Subscriptions This area of the business comprises 67% of Group revenues and is made up ofadvertiser monitoring, news monitoring, e-vouching and audit services.Following recent development work, subscribers will soon be able to access theseservices via new interfaces enabling both individual and bundled sales. This business currently has over 360 customers (including 74 of the top 100 UKadvertisers), 54 of which currently take more than one Group product. Therenewal rate (by contract value) for the 12 months to April 2007 was maintainedat 90%, although this rate has increased to over 100% in the early months of2007/08. The average contract value across the Group is £38,000 and forcustomers who hold more than one Group product the average aggregate contractvalue is over £90,000. Developing the cross selling opportunities is a keypriority for the Group. During 2006/07, the Group consolidated its position as the pre-eminent providerof media auditing, e-vouching and competitive monitoring in the UK. Thomson Intermedia diversified its monitoring service into new client areas.This included a significant healthcare related project from the Government, amarket-leading email monitoring product and a unique, real-time news monitoringservice. In media auditing, the Group's market share increased to 64% with somesignificant client wins, including Renault, Bird's Eye and Standard Life.Revenues from the auditing of internet advertising and best practice consultancyhave more than doubled over the past year. Thomson Intermedia is the onlycompany offering a credible audit of online advertising in the UK. The Publisher Platform, which was launched in December 2005, has exclusive longterm contracts with 10 regional media owners covering over 1,400 publicationsand accounting for 90% of total regional press. The platform is now accessed by70,000 users in the UK within media owners themselves, advertisers and over 100national and provincial agencies across the UK. Due to the extensive volume ofpublications being received digitally, the Group is now able to offer UK mediaowners the first comprehensive monitoring and market share analysis system witha lead generation tool. Thomson Intermedia is currently in discussions with theregional media owners to roll out this new product. Consultancy This area of the business comprises 8% of Group revenues. Trading as billettsmarketing sciences, this unit is the leading independent provider of marketingeffectiveness consultancy in the UK. It focuses on answering the fundamentalquestions facing marketeers about allocation of marketing spend and return oninvestment. The consultants use a mixture of advanced analytical tools,modelling, bespoke software tools and marketing experience. The Group hasdeveloped a range of market-leading products across the FMCG, financial servicesand retail sectors. billetts marketing sciences has built strong client relationships and there is ahigh level of repeat business: in 2006/07, 80% of revenues were derived fromestablished clients. There has also been significant growth in internationalcontracts, managed out of London, with successful projects undertaken acrossfive continents. International The Group's products and services have international appeal. Internationalrevenues now comprise 20% of total revenues, up from 16% in 2006. For the 12months to 30 April 2007, MPMA - the Group's US subsidiary - increased revenue by57% over the prior year. USA: The Group views the US media audit market as an area of significantopportunity and MPMA, the Group's 80% owned subsidiary, is one of the leadingplayers in a relatively immature market segment. MPMA has continued to makeexcellent progress with ten new client wins since April 2006, bringing the totalclient base to 26. For the 12 months to 30 April 2007, MPMA recorded $2.1m inrevenues, an increase over the prior year of 57%, and contributed operatingprofit of $0.3m. Approximately 80% of MPMA revenues are generated from US-basedcustomers with the remainder coming from international assignments. MPMA'searn-out from the billetts acquisition ended on 30 April 2007 and, havingrecently launched its online monitoring service in the US, the Group is nowconsidering extending its range of products and services further. Germany: The Group owns 50% of Thomson Media Control (TMC) which currentlyoffers media monitoring services in Germany. It has grown well with a currentclient base of 43 of which 23 were signed since May 2006. The Group iscurrently exploring opportunities to extend products and services in Germany.For the 12 months to 30 April 2007, TMC recorded €2.0m of revenues and isexpected to be in operating profit by the end of the calendar year. Under theterms of the joint venture, the Group does not bear any financial risk butreceives a percentage of the profit arising once the accumulated losses havebeen repaid. The Board does not expect TMC to have a material financial impacton Group results until 2008/09. Partners: The Group has partnerships with 16 companies in 25 countries to securelocal data, benchmarks and media training insight in order to provide aninternational audit service. The Group believes there is an opportunity toestablish or acquire wholly-owned operations in certain larger key markets. Asdescribed earlier, the Group has recently invested in a media auditing businessin Spain and is actively pursuing an acquisition in another key European market. In May 2007, Thomson Intermedia signed a licence agreement with MMA MediaAnalysis to launch a media monitoring operation in Greece and Cyprus. The Groupwill supply its proprietary software and provide technical support to theventure, without any financial exposure in exchange for an annual licence feeand a percentage share of the operation's revenues. The Group may sign similardeals in the future to gain footholds in other smaller countries. Development Business Development business is characterised by one-off project income which istargeted so that it often leads to additional ongoing Core revenue sources. Inthe past, development income has been derived from areas such as retrospectivevouching, licence fee income from Germany and up-front fees for the PublisherPlatform. In 2006/07, Development income was lower than originally anticipated due todelays in the securing of projects in the pipeline. The Group is still workingon a significant pipeline of projects and remains confident that a highproportion will be closed during the current financial year. The current pipeline includes projects to expand the Publisher Platform bybringing on more media owners and by developing new services using the samedata. In addition, there are a number of international opportunities and otherbespoke projects in the pipeline. Outlook 2006/07 was an important year for the enlarged Group, both operationally andfinancially. All the key operational capabilities, product, data, technology and route tomarket are now in place to grow the business substantially and the investment inthe Group's sales and account management capabilities has continued to be apriority. A new Sales Director, with 10 years of relevant industry experience,was recently hired. The Board has also completed a thorough review of theGroup's balance sheet and taken a prudent view on assessing receivables. Thisleaves the Group in a robust financial position going forward. The Board is encouraged by the recent momentum in the Core business where theGroup has seen renewal rates by contract value exceeding 100%. Furthermore theGroup's international operations continue to grow strongly, especially the USsubsidiary where there is a significant market opportunity. Thomson Intermedia has entered 2007/08 on a solid financial footing and theBoard is confident that the Group is well-placed to capitalise on its manygrowth opportunities. Consolidated Income Statementfor the fifteen months ended 30 April 2007 15 months 12 months ended ended 31 January 2006 30 April 2007 Note £'000s £'000s Revenue 20,027 11,136Cost of Sales (8,758) (4,129)Gross Profit 11,269 7,007Administrative expenses - excluding highlighted items (8,144) (4,636)Administrative expenses - highlighted items 3 (2,337) (443)Total administrative expenses (10,481) (5,079) Operating profit before highlighted items 3,125 2,371Administrative expenses - highlighted items 3 (2,337) (443)Operating profit 788 1,928Finance income 80 49Finance expenses (473) (55)Net finance costs (393) (6) Profit before taxation 395 1,922 Corporation tax 4 (79) (126)Deferred tax 4 342 471 Tax income 263 345 Profit for the period 658 2,267 Attributable to:Equity holders of the parent 607 2,277Minority interests 51 (10) 658 2,267Earnings per shareBasic 5 1.94p 7.75pDiluted 5 1.87p 7.39p All amounts relate to continuing activities. Consolidated Statement of Recognised Income and Expensefor the fifteen months ended 30 April 2007 15 months 12 months ended ended 31 January 2006 30 April 2007 £'000s £'000s Profit for the period 658 2,267Exchange differences on translation of overseassubsidiary net assets 56 (6)Deferred tax movement on share based expenses (101) (71)Net losses not recognised in income statement (45) (77)Total recognised income for the period 613 2,190Attributable to:Equity holders of the company 562 2,200Minority interest 51 (10) 613 2,190 Consolidated Balance Sheetas at 30 April 2007 30 April 31 January 2007 2006 Note £'000s £'000sNon current assetsGoodwill 8,625 8,924Other intangible assets 6 4,432 4,759Property, plant & equipment 610 706Investment in joint ventures 115 122Deferred tax asset 895 952Total non current assets 14,677 15,463 Current assetsTrade & other receivables: Due within one year 7 5,715 5,452Current tax assets 105 -Cash & cash equivalents 2,105 2,774Total current assets 7,925 8,226 Total assets 22,602 23,689 Current liabilitiesBank overdrafts - (62)Other financial liabilities (2,857) (250)Trade & other payables (2,132) (2,041)Current tax liabilities - (126)Provisions (59) (3,850)Accruals & deferred income (3,828) (3,644)Total current liabilities (8,876) (9,973) Non current liabilitiesOther financial liabilities (2,200) (2,687)Provisions (159) (269)Deferred tax liability (825) (1,019)Total non current liabilities (3,184) (3,975) Total liabilities (12,060) (13,948) Total net assets 10,542 9,741 Capital & reservesShare capital 7,828 7,823Share premium 1,840 8,869Merger reserve (4,504) (4,504)Translation reserve 50 (6)Retained earnings 5,385 (2,333)Capital and reserves attributable to the equityholder of the parent 10,599 9,849Minority interest (57) (108)Total equity 10,542 9,741 Consolidated Cashflow Statementfor the fifteen months ended 30 April 2007 15 months 12 months ended ended 30 April 31 January 2007 2006 £'000s £'000s Cashflows from operating activitiesProfit before taxation 395 1,922Adjustments for:Depreciation 414 276Amortisation 1,120 593Foreign exchange differences on operating activities - 32Share option charges 307 249Finance income (80) (49)Finance expenses 473 55 2,629 3,078 Increase in trade receivables (225) (945)Increase/(decrease) in trade payables 385 (324) Cash generated from operations 2,789 1,809Finance expenses (473) (71)Income taxes paid (308) (6) Net cash from operating activities 2,008 1,732 Cashflows from investing activitiesPurchase of subsidiary, net of cash acquired - (7,012)Purchase of property, plant & equipment (317) (264)Purchase of intangible assets (793) (538)Purchase of investments - (87)Finance income 80 43 Net cash used in investing activities (1,030) (7,858) Cashflows from financing activitiesProceeds from issue of share capital 32 4,343Proceeds from long term borrowings 2,000 3,000Repayment of bank loans (375) (63)Loan note settlement (3,218) - Net cashflow used in financing activities (1,561) 7,280 Net increase in cash, cash equivalents and bank overdrafts (583) 1,154Effect of foreign exchange rate changes (24) (40)Cash, cash equivalents and bank overdraft at beginning of period 2,712 1,598Cash, cash equivalents and bank overdraft atend of period 2,105 2,712 1. Accounting policies Basis of preparation The consolidated financial statements of the Group have been prepared inaccordance with International Financial Reporting Standards (IFRSs) andInternational Financial Reporting Interpretations Committee (IFRIC)interpretations as adopted by the European Union (EU) and with those parts ofthe Companies Act 1985 applicable to companies reporting under IFRS. This is the Group's first set of financial statements prepared in accordancewith IFRS. The transition date for the Group's application of IFRS is 1February 2005, and the comparative figures for 31 January 2006 have beenrestated accordingly. Change in year end The Group has changed its year-end from 31 January to 30 April in order tobetter accommodate the commercial needs of the Group. These financialstatements therefore cover the 15 month period to 30 April 2007. As a result,the comparative amounts in the income statement, cashflow statement andstatement of recognised income and expense (which cover the 12 months to 31January 2006) are not entirely comparable. Highlighted items Highlighted items comprise significant non-cash charges and non-recurring itemswhich are highlighted in the income statement because separate disclosure isconsidered helpful in understanding the underlying performance of the business. 2. Segmental reporting The Group offers its clients a range of media information products and services.These products and services were considered under a number of criteria(including nature of the products and services, type or class of clients,methods of distribution and supply), and it was concluded that the followingsegments generally have separate risks and returns: Core - Ad monitoring and media auditing products and services (subscriptions)and marketing effectiveness services (consultancy) Development - Projects leading to the creation of new revenue streams and/or theenhancement of existing revenue streams Primary reporting format - business segments 15 months ended 30 April 2007 Total Other continuing Core Development operations Eliminations operations £'000s £'000s £'000s £'000s £'000sRevenueExternal 19,131 896 - - 20,027Inter-segment 233 - - (233) -Total revenue 19,364 896 - (233) 20,027 ResultSegment result 4,093 (192) - - 3,901Unallocated corporate expenses (776)Operating profit before 3,125highlighted itemsHighlighted items - (1,943) - (394) - (2,337)administrative expensesOperating profit 788Finance income 80Finance expenses (473)Share of profit of associates/JVs -Profit before tax 395Tax income 263Profit 658 Total Other continuing Core Development Operations Eliminations operations £'000s £'000s £'000s £'000s £'000sOther informationSegment assets 20,876 1,413 - - 22,289Investment in equity method - - 115 - 115associates/JVsUnallocated corporate assets 198Consolidated total assets 20,876 1,413 115 - 22,602 Segment liabilities (6,660) - - - (6,660)Unallocated corporate (5,400)liabilitiesConsolidated total (6,660) - - - (12,060)liabilities Capital expenditure on PP&E 317 793 - - 1,110and IFAs Depreciation of PP&E (413) - - - (413)Amortisation of intangible - (636) (484) - (1,120)fixed assets Other non-cash expenses- foreign exchange (30) - (77) - (107) Year ended 31 January 2006 Total Other continuing Core Development operations Eliminations operations £'000s £'000s £'000s £'000s £'000sRevenueExternal 8,918 2,218 - - 11,136Inter-segment - - - - -Total revenue 8,918 2,218 - - 11,136 Result Segment result 977 1,411 - - 2,388Unallocated corporate expenses (17)Operating profit before 2,371highlighted itemsHighlighted items - (194) - (249) - (443)administrative expensesOperating profit 1,928Finance income 49Finance expenses (55)Share of profit of associates/JVs -Profit before tax 1,922Tax income 345Profit 2,267 Other information Segment assets 21,436 1,603 - - 23,039Investment in equity method - - 115 - 115associates/JVsUnallocated corporate assets 535Consolidated total assets 21,436 1,603 115 - 23,689 Segment liabilities (6,644) - - - (6,644)Unallocated corporate (7,304)liabilitiesConsolidated total liabilities (6,644) - - - (13,948) Capital expenditure on PP&E 264 538 3,395 - 4,197and IFAs Depreciation of PP&E (276) - - - (276)Amortisation of intangible - (431) (162) - (593)fixed assets Other non-cash expenses- foreign exchange (10) - (23) - (33) Secondary reporting format - geographical segments The Groups business segments operate in 4 main geographical areas. The homecountry of the Group is the United Kingdom. 15 months to 30 April 2007 12 months to 31 January 2006 External Total assets Capital External revenue Total assets Capital revenue by by location expenditure by by location of by location expenditure by location of of assets location of customers of assets location customers assets of assets United Kingdom 16,438 22,119 1,092 9,569 23,535 4,197 Rest of Europe 1,405 - - 834 - - North America 1,534 484 18 281 154 - Rest of world 650 - - 452 - - Total 20,027 22,602 1,110 11,136 23,689 4,197 3. Highlighted items 15 months ended 12 months ended 30 April 2007 31 January 2006 £'000s £'000sRecurring:Share based expenses 347 249Amortisation of purchased intangible assets 484 162Foreign exchange losses 107 32 938 443 Non recurring:Acquisition related - performance bonus 206 -- restructuring costs 155 -Provision for doubtful debts 474Onerous property lease obligations 218Management restructuring costs 193 -Holiday pay accrual 106 -Professional fees 47 - 1,399 - Total highlighted items 2,337 443 The performance bonus relates to the acquisition of billetts in August 2005. The restructuring costs relate to the closure of the acquired entity's previoushead office. The provision for doubtful debts relates to specific contracts from a line ofbusiness which the Group no longer pursues. All other provisions for doubtfuldebts are included within Administrative expenses. The onerous property lease obligation relates to a property that the Group willbe vacating during the next financial year for which a shortfall between headlease costs and sub lease income is expected. The management restructuring costs relate to the replacement of the FinanceDirector during the period. The holiday pay accrual is an adjustment which has resulted following our changein year end. This is expected to be a one time adjustment, since movements tothis accrual in subsequent years are not anticipated to be material. Professional fees relate to legal and accounting advice in relation to the sharepremium reduction and IFRS transition. All other professional fees are includedwithin "Administrative expenses - excluding highlighted items". 4. Taxation 15 months ended 12 months ended 30 April 2007 31 January 2006 £'000s £'000s UK taxCurrent year 60 126 60 126Foreign taxCurrent year 19 -Total current tax 79 126 Deferred taxOrigination and reversal of temporary differences (69) (471)Adjustments in respect of prior periods (273) - (342) (471) Total tax income (263) (345) The difference between tax as charged in the financial statements and tax at thenominal rate is explained below: 15 months ended 12 months ended 30 April 2007 31 January 2006 £'000s £'000s Profit before tax 395 1,927Corporation tax at 30% 119 578Non deductible taxable expenses/(income) 14 (23)Previously unrecognised deferred tax asset assessed asrecoverable at the end of the period (225) (853)Overseas tax rate differential (2) -Capital allowances 20 9Pre acquisition profits - 113EMI Options Sch 23 FA 2003 relief - (159)Additional deduction for R&D expenditure (139) (113)Prior year amortisation of other intangibles (49) -Other timing differences (1) 103Total tax income (263) (345) 5. Earnings per share The calculation of the basic and diluted earnings per share is based on thefollowing data: 15 months ended 12 months ended 30 April 2007 31 January 2006 £'000s £'000s Earning for the purpose of basic earnings per 607 2,277share being net profit attributable to equityholders of the parent Adjustments:Deferred tax (342) (471)Highlighted items - recurring* 938 443Highlighted items - non recurring* 1,399 - Earnings for the purpose of underlying earnings 2,602 2,249per share Number of sharesWeighted average number of ordinary shares for the 31,299,591 29,380,750purpose of basic earnings per share Effect of dilutive potential ordinary sharesShare options** 1,185,915 1,432,829 Weighted average number of ordinary shares for the 32,485,506 30,813,579purpose of diluted earnings per share Basic earnings per share 1.94p 7.75pDiluted earnings per share** 1.87p 7.39pUnderlying basic earnings per share 8.31p 7.65pUnderlying diluted earnings per share 8.01p 7.30p *Highlighted items (see note 3). **Note that certain share options have been excluded from the calculation ofdiluted EPS as their exercise price is greater than the weighted average shareprice during the year (i.e. they are out-of-the-money) and therefore it wouldnot be advantageous for the holders to exercise those options. 297,647 (2006:117,026) share options have not been included within the diluted earnings pershare calculation at 31 April 2007 as they are anti-dilutive for the periodspresented. These shares could potentially dilute earnings per share in thefuture. 6. Other intangible assets Capitalised Purchased Total development costs intangible intangible assets assets £'000s £'000s £'000sCostAt 1 February 2005 2,157 - 2,157Additions 538 3,395 3,933At 1 February 2006 2,695 3,395 6,090Additions 793 - 793At 30 April 2007 3,488 3,395 6,883AmortisationAt 1 February 2005 (738) - (738)Provision for the year (431) (162) (593)At 1 February 2006 (1,169) (162) (1,331)Provision for the period (636) (484) (1,120)At 30 April 2007 (1,805) (646) (2,451) Net book valueAt 30 April 2007 1,683 2,749 4,432At 31 January 2006 1,526 3,233 4,759At 31 January 2005 1,419 - 1,419 The capitalised development costs are internally generated. On 23 August 2005 the Company acquired the entire share capital of BCMG Limited(billetts) for a maximum total consideration of £13.1m. In line with IAS 38intangible assets owned by billetts have been independently valued by anexternal consultant and shown within 'Other intangible assets' on the balancesheet. Amortisation is charged within administrative expenses so as to write off thecost of the purchased intangible assets over their estimated useful lives. Theassets, initial values and periods used are as follows: Purchased intangibles Cost at acquisition Useful Remaining period of economic life amortisation £'000s Years Years Media Consulting Customer relationships 2,859 10 8.5Marketing Sciences Customer relationships 271 5 3.5MPMA Customer relationships 43 2 0.5Trade name 215 10 8.5Non-compete 7 1.5 - 3,395 The carrying values of the Media Consulting Customer relationships and theMarketing Sciences Customer relationships at 30 April 2007 are £2,383,000 and£181,000 respectively (31 January 2006: £2,740,000 and £248,000 respectively). The group tests other intangible assets annually for impairment, or morefrequently if there are indications that the assets may be impaired. Noimpairment was recognised in 2007 (2006: £nil). 7. Trade and other receivables 30 April 2007 31 January 2006 £'000s £'000sTrade and other receivables due within one yearTrade receivables 4,739 4,019Less provision for doubtful debts (574) (144)Net trade receivables 4,165 3,875Other receivables 65 427Prepayments & accrued income 1,485 1,150 5,715 5,452 There are no trade and other receivables due after one year. The Directors consider that the carrying amount of receivables and prepaymentsare reasonable approximations of their fair value. The provision for doubtful debts is estimated by the Directors based on priorexperience, the result of specific contract disputes, and their assessment ofthe current economic environment. 8. Financial information The financial information set out above does not constitute the company'sstatutory accounts for the fifteen months ended 30 April 2007 or the year ended31 January 2006, but is derived from those accounts. Statutory accounts for theyear ended 31 January 2006 have been delivered to the Registrar of Companies andthose for the fifteen months ended 30 April 2007 will be delivered following thecompany's annual general meeting. The auditors have reported on those accounts;their reports were unqualified, did not include references to any matters towhich the auditors drew attention by way of emphasis without qualifying theirreports and did not contain statements under the Companies Act 1985, s 237(2) or(3). When published, the Group's annual report and Accounts will be sent toshareholders and will be made available to the public at the Group's registeredoffice, 1 Westmoreland Road, Bromley, Kent BR2 0TB. Notes supplementary to, but not forming part of, the Group financial statementsfor the period ended 30 April 2007 Unaudited proforma Consolidated Income Statement for the twelve months ended 30April 2007 The following unaudited proforma consolidated income statement for the twelvemonths ended 30 April 2007 has been prepared for illustrative purposes only toprovide results for a twelve month period following the change in our year endfrom January to April. Unaudited proforma 12 months ended 30 April 2007 £'000s Revenue 15,832Cost of Sales (7,026)Gross Profit 8,806Administrative expenses - excluding highlighted items (6,618)Administrative expenses - highlighted items (2,161)Total administrative expenses (8,779) Operating profit before highlighted items 2,188Administrative expenses - highlighted items (2,161)Operating profit 27Finance income 63Finance expenses (416)Net finance costs (353) Loss before taxation (326) This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Ebiquity