28th Sep 2005 15:56
Delling Group PLC28 September 2005 Press Release 28 September 2005 DELLING GROUP PLC The AIM-listed marketing services group INTERIM RESULTS for the six months ended 30 June 2005 Highlights £€4.5m in new contracts which are anticipated to reach their expected level by the end of the year. •Two acquisitions in Norway were completed during the period of Andre Worldwide Visual Communications and Unikum Professional Imaging - with combined turnover in 2004 of £1m and a pretax profit margin of 10%. These acquisitions joined the Group from 1st of May 2005. •Further acquisition of Oslo-based Full Bredde AS completed in June. The company is a subcontractor with strong customer base including Scandinavian Blue Chips and multinationals and with a turnover last year of £1.2m and a pretax profit of £ 0.12m. •A number of new sales prospects have been developed as well as a pipeline of potential Scandinavian acquisition targets. Strong operational base in place so that further sales will make good net profits. •UK COO recruited, to accelerate pipeline of potential UK acquisition targets. Group Financial Director also recruited. •Installed a Vutek printing machine for Depicta Fame in Oslo to increase sales offering •Interactive mobile marketing solution launched at CeBit in March 2005. •Implementation of first complete integrated solution (print, screen and interactive marketing) for Telia Sonera. Commenting, Aksel Bratvedt, Chairman, said: "Despite slower than expected uptake in business we believe the Group is wellplaced for the future and look forward to it with confidence." ENDS Contact: Delling Group PlcAksel Bradvelt, Chief Executive Officer Tel: 020 7484 5663Geir Lolleng, Chief Operating Officer Tel: 020 7484 5663James Robinson, Finance Director Tel: 020 7484 5663 Binns & Co PR LtdPeter Binns/Tarquin Edwards Tel: 020 7786 9600 DELLING GROUP PLC INTERIM FINANCIAL STATEMENT CHAIRMAN'S STATEMENT During the first 6 months of this year, Delling Group Plc has continued its twinstrategy of growth through acquisitions and organic growth centred on its coreoffering of outsourcing services to marketing departments. New contracts of anexpected value of £4.5 million have been won during the period across all areasof the business. Furthermore, three acquisitions have been completed in the sameperiod. Turnover in the first half of 2005 was £2.35m compared to the 2004period performance of £2.17m. Although sales have increased on the previous 9 month period we are disappointedwith the trading performance in this period. New sales contracts have takenlonger to reach their full potential than we expected, however we believe thatthese contracts will reach their expected level by the end of the year. TheBoard has also restructured the sales organisation of the Group to allow it tosource higher value sales, combined with which the Group Management has beenstrengthened, which we are confident will benefit the Group in the comingmonths. Two acquisitions consisting of the core business of Unikum Professional Imagingand Andre Worldwide Visual Communications in Oslo are included from 1st May2005. The combined turnover in 2004 of these businesses was £1m with a pre-taxprofit of £0.1m. The acquisition of Full Bredde AS in Oslo that was announced inJune was completed on 1st of August 2005. Last year it had a turnover of £1.2mwith a pre-tax profit level of £0.12m. The Group net loss of £1.60m reflects our investment in the Company to build aninfrastructure and organisation better equipped to manage considerably largervolumes of business than at present. This investment has been necessary tobetter negotiate and take on new outsourcing contracts. As new contracts arecoming on stream with an average gross profit margin of 55%, we anticipate thatthe positive impact on profits will be considerable. In this connection it isalso important to emphasise that the group will only acquire profitablecompanies with positive cash flows. The group is looking at alternative options to fund its growth strategy toinclude bank financing so as to take advantage of current low interest rates.The Directors have reviewed budgets, projected cash flows and other relevantinformation, and, on the basis of this review, are confident that the Group hasadequate resources for the foreseeable future.Over the first half of 2005 considerable work has been undertaken to increaseboth our sales prospect list as well as our acquisition prospect list - thelatter includes various targets within the UK. A number of negotiations in bothareas are ongoing and expected to generate results during the second half of2005. Despite the disappointing results and sales levels we look forward to the futurewith utmost confidence. Aksel BratvedtExecutive chairman 1. CONSOLIDATED PROFIT AND LOSS ACCOUNT 6 months ended 9 months ended 30 June 2005 31 December 2004 unaudited audited £'000 £'000 Turnover 2,354 2,173Cost of sales (1,099) (795) Gross profit 1,255 1,378 Administrative expenses (2,807) (4,051) Operating loss (1,552) (2,673) Interest receivable - 2Interest payable (43) (159) Loss on ordinary activities before (1,595) (2,830)taxation Tax on loss on ordinary activities - 33 Loss for period (1,595) (2,797)Dividends - - Retained loss for period (1,595) (2,797) Loss per share (pence) (2.38p) (6.74p) There are no recognised gains or losses for the current period other than asstated above. 2. CONSOLIDATED BALANCE SHEET As at As at 30 June 2005 31 December 2004 unaudited audited £'000 £'000 Fixed assetsIntangible assets 2,821 2,920Tangible assets 605 674 3,426 3,594 Current assets Stocks 106 42 Debtors 1,423 698Debtors due in more than one year 1,148 -Cash at bank 5 284 2,682 1,024 Creditors: amounts falling due (4,368) (3,535)within oneyear Net current liabilities (1,686) (2,511) Total assets less current 1,740 1,083liabilities Creditors: amounts falling due (426) (426)after more than one year Net assets 1,314 657 Capital reserves Called up share capital 738 597 Share premium account 4,871 2,700 Statutory reserve - 60 Profit and loss account (4,295) (2,700) 1,314 657Shareholders' funds 3. CONSOLIDATED CASH FLOW STATEMENT 6 months Period ended ended 31 30 June 2005 December 2004 £'000 £'000 Net cash outflow from operating activities (1,352) (587) Returns on investments and servicing offinanceInterest paid (43) (159)Interest received - 2 Net cash outflow from returns on investments (43) (157)and servicing of finance Taxation - 33 Capital expenditure and financial investmentPayments to acquire intangible fixed assets - (807)Payments to acquire tangible fixed assets (7) (148)Net cash outflow for capital expenditure and (7) (955)financial investment AcquisitionOverdrafts acquired with subsidiaries - (960) Cash outflow before financing (1,402) (2,626) FinancingNet issue of equity share capital 1,096 2,847 Net cash (outflow)/inflow (306) 221 Non-cash transactionOn the 15 June 2005 Delling Group plc issued 5,468,796 Ordinary Shares of 1p ata price of 21p registered as unpaid. 4. NOTES TO THE INTERIM STATEMENT 4.1. Reconciliation of operating loss to net cash inflow from operatingactivities 2005 2004 Operating loss (1,595) (2,673)Amortisation 99 297Depreciation 76 35Increase in stocks (64) (42)Increase in debtors (725) (415)Increase in creditors 857 2,211Net cash outflow from operating activities (1,352) (587) 4.2 Reconciliation of net cash flow to movement in net (debt)/funds 2005 2004 £000 £000(Decrease)/(increase) in cash in the period (306) 221Change in net debt Net funds at start of period 221 - Net (debt)/funds at end of period (85) 221 4.3 Analysis of changes in net (debt)/funds 2005 2004 £000 £000Net cash:Net debt as start of period 221 -Cash flowsCash in hand and at bank (279) 284Overdrafts (27) (63) Net (debt)/funds (85) 221 4.4 Financial information and comparatives The interim results for the six months ended 30 June 2005 are unaudited and donot constitute accounts within the meaning of section 240 of the Companies Act1985. The interim results have been drawn up using accounting policies andpresentation consistent with those applied in the audited accounts for theperiod ended 31 December 2004. The information in respect of the period ended 31 December 2004 has beenextracted from the audited statutory accounts which have been delivered to theRegistrar of Companies. The report of the auditors on those statutory accountswas unqualified. No comparative figures for 30 June 2004 are presented as the Company listed onAIM on 14 October 2004, and therefore there was no requirement for interimfinancial statements to be prepared for 30 June 2004. 4.5 Tax on loss on ordinary activities The tax charge is based on the result for the six month period and represents: 30 June 31 December 2005 2004 £'000 £'000 Current year - overseas tax - 33credits 4.6 Dividends No dividend is proposed. 4.8 Share capital During the period Delling Group plc issued 5,468,796 Ordinary Shares of 1p at aprice of 21p. These shares are unpaid and the call is included in debt due inmore than one year. 4.7 Loss per share The calculation of loss per share is based on the loss attributable to ordinaryshareholders divided by the weighted average number of shares in issue duringthe period. 30 June 31 December 2005 2004 Number '000 Number '000 Weighted average number of 66,899 41,472shares There is no dilution of earnings per share as a result of losses. Copies of this report are available on the Company's website www.dellinggroup.com and to the public at the registered office of Delling Group plc at: Golden Cross House8 Duncannon StreetLondon WC2N 4JF This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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