Interim Results

26th Mar 2009 07:00



26 March 2009

Avanti Screenmedia Group plc

("Avanti" or "the Company")

Unaudited Interim Results 

Avanti Screenmedia Group plc (AIM: ASG.L), the AIM listed leading digital screen media specialist, announces its interim results for the six months ended 31st December 2008.

KEY POINTS

Revenue for the 6 months ended 31st December 2008 was £2.39m (2007: £2.64m);

Booked advertising sales increased by 15%;

Operating Loss for the period was £1.63m (2007: £2.46m);

Successful fundraising of £1.64m during 6 months under review;

New account wins Queens Arcade, Cardiff, Mitchells & Butler,

Reduction in overheads of £1m as a result of the new strategy 

Simon Rees, CEO, commented:

"Despite the very challenging conditions within the wider economy and the advertising sector in particular, Avanti has continued to win contracts with new and existing clients. Innovation and new initiatives continue to be cornerstones of the Company's strategy as we strive to put Avanti at the forefront of the digital media sector.

"The Company now has a committed and highly focused team and I am confident that together we can continue drive Avanti forward during 2009 and beyond." 

Enquiries:

Avanti Screenmedia Group plc  020 7902 2345

Simon Rees, CEO

Charles Stanley Securities 020 7149 6000

Nominated Adviser

Russell Cook/Freddy Crossley

Bishopsgate Communications Limited 020 7562 3350

Jenni Herbert/Siobhra Murphy

  

Introduction

During the period under review Avanti continued to consolidate its position as the UK's leading dedicated digital out of home media company, even in the face of the downturn in the global economy, and the UK media sector in particular.  The Company's improved performance reflects the impact of our new strategy incorporating cost reduction and control, aligned with an emphasis on advertising sales growth, new business and new creative initiatives. 

Financial

Revenue for the 6 month period was £2.39m (2007: £2.64m), a decline of 9.5%, but a 42.8% reduction in operating costs for the period from £2.81m to £1.63m led to a significant reduction in the operating loss to £1.63m (2007: loss of £2.46m). 

The continued level of losses was in line with our expectations, arising in part as a result of the restructuring costs incurred in implementing the Company's new strategy.  We have announced previously that the Company is continuing to seek further capital, and the Company continues to make progress in this regard. 

Avanti has successfully grown its year-on-year advertising revenues from national brands by 15% for the period, against a total market advertising decline of 7%*.  This growth follows a global shift from traditional media into digital out of home display which we anticipate is a trend that is set to continue in 2009 and beyond.

(* source : Media Week)

New Contracts

Avanti has an increasingly strong new business pipeline. The Company has achieved a number of notable account wins during the current year including most recently the Queens Shopping Arcade in Cardiff, and a new 10 year agreement with the UK's premier shopping mall, Bluewater. Avanti is also pleased to announce that it has commenced roll-out of a digital screen network within the Sizzling Pub Company branded outlets owned by Mitchells & Butlers. Avanti already operate a network of digital screens within 71 'Scream' pubs also owned by the pub operator.

Funding

The Company raised a total of £1.64m through equity share placings and convertible loans during the 6 months to 31st December 2008. In particular we have announced that Neo Media Group SA ("Neo Media") now holds 29.98 per cent of the Company's issued share capital and a further £1.40m of Convertible Loans.

While the Company had cash of £419,000 at the period end, the Board has been seeking to secure further short-term funding, and continues to explore potential sources of additional finance to enable the Company to take advantage of certain new business opportunities to support the development of the business.

Outlook 

The Company continues to develop its new relationship with Neo Media, and a number of new initiatives are emerging from the partnership.  At the same time the Board continues to identify new market opportunities, which, if they are to be exploited fully for the benefit of the Company and its shareholders, will require further capital investment in new networks, sales and marketing. While the Board is confident that the continued and successful implementation of the strategy will deliver medium to long term growth for the Company and its shareholders, the short term prospects are dependent upon a number of factors.  These include the prevailing general economic conditions, securing sufficient working capital for the Company's working requirements and for the on-going development and expansion of the business.

Importantly Avanti is now successfully attracting a wider portfolio of blue chip advertiser brands to our networks, a number of whom are now repeat advertisers.  These include Guinness, Lucozade, Universal, Toyota, BBC, Vodafone, the Central Office of Information and Unilever.

Innovation and new initiatives continue to be cornerstones of the Company's strategy, and in December Avanti successfully launched its new marketing initiative, "Digital Life", a consolidation play within the digital display sector. Digital Life is the start of greater collaboration with other organisations within the sector and a first of its kind.   We have also announced today the launch of "Digital Youth", a similar sales and marketing venture with Sub TV, the owner of the UK's largest universities' digital screen network. 

As a leader in this maturing media sector, in May Avanti will launch and host across its networks the world's first short film festival shown exclusively on digital out of home networks.  Art by Chance will screen 30 second films of all genres, including fiction, animation and documentary.  Art by Chance will take place in 59 cities across 11 countries including the UK, USA, Canada, Germany and the Netherlands.

While market conditions remain challenging, Avanti is making steady and tangible progress at the forefront of the digital media sector. While the Company cannot escape the impact of the economic downturn, the Directors are convinced that Avanti is well positioned to generate significant growth once conditions in the media and advertising markets begin to improve.

  

Consolidated Income Statement

For the six months ended 31st December 2008

	6 months	6 months	12 months
	ended	ended	ended
	31.12.08	31.12.07	30.06.08
	Unaudited	Unaudited	Audited
Continuing operations	£	£	£
Revenue	2,394,590	2,637,498	4,287,745
Cost of sales	(2,059,757)	(2,261,240)	(4,038,416)
Gross profit	334,833	376,258	249,329
Operating expenses	(1,896,749)	(2,841,223)	(5,151,058)
(Loss) from operations	(1,561,916)	(2,464,965)	(4,901,729)
Finance income	3,680	-	72
Finance expense	(33,859)	(81,395)	(167,788)
(Loss) on Ordinary Activities before taxation
	(1,592,095)	(2,546,360)	(5,069,445)
Taxation	-	-	-
(Loss) for the period attributable from continuing operations
	(1,592,095)	(2,546,360)	(5,069,445)
Attributable to:
Equity holders of the parent	(1,592,095)	(2,546,360)	(5,069,445)
Earnings per share for continuing operations
Basic (loss) per share (see note 3)	(2.96p)	(8.47p)	(14.00p)
Diluted (loss) per share (see note 3)	(2.96p)	(8.47p)	(14.00p))

  

Consolidated Unaudited Balance Sheet as at 31st December 2008

	6 months	6 months	12 months
	ended	ended	ended
	31.12.08	31.12.07	30.06.08
	Unaudited	Unaudited	Audited
	£	£	£
Assets
Non Current Assets
Property, Plant & Equipment	2,139,938	3,514,914	2,896,593
Goodwill	1,965,119	1,965,119	1,965,119
	4,105,057	5,480,033	4,861,712
Current Assets
Inventories	108,958	120,495	108,958
Trade & other receivables	829,784	2,035,485	925,584
Cash & short term deposits	418,523	772,148	684,489
Total Current Assets	1,357,265	2,928,128	1,719,031
Total Assets	5,462,322	8,408,161	6,580,743
Liabilities and Equity
Trade and other payables	3,180,025	3,995,566	4,245,011
Convertible loans	2,111,675	-	736,656
Non current liabilities	135,275	545,711	172,875
Total liabilities	5,426,975	4,541,277	5,154,542
Equity attributable to equity holders of the parent company
Share capital	588,225	409,861	411,861
Share premium	37,380,734	37,317,111	37,317,111
Capital redemption reserve	12,758	12,758	12,758
Share based payment reserve	281,508	271,818	345,254
Convertible loan reserve	31,965	-	6,965
Retained earnings	(38,259,843)	(34,144,664)	(36,667,748)
Shareholders' Funds and Liabilities	5,462,322	8,408,161	6,580,743

  Consolidated Unaudited Statement of Changes in Equity

	Share	Share	Other	P&L a/c	Total
	Capital	Premium	Reserves	Reserves	Reserves
2008	£	£	£	£	£
At 30th June 2008 (Audited)	411,861	37,317,111	364,977	(36,667,748)	1,426,201
(Loss) for the period	-	-	-	(1,592,095)	(1,592,095)
Share Issue	176,364	-	-	-	176,364
Premium on shares issued	-	63,623	-	-	63,623
Share based payments	-	-	(63,746)	-	(63,746)
Issue of convertible notes			25,000		25,000
At 31st December 2008 (Unaudited)	588,225	37,380,734	326,231	(38,259,843)	35,347

	Share	Share	Other	P&L a/c	Total
	Capital	Premium	Reserves	Reserves	Reserves
2007	£	£	£	£	£
At 30th June 2007 (Audited)	257,235	36,777,768	209,725	(31,598,303)	5,646,424
(Loss) for the period	-	-	-	(2,546,361)	(2,546,360)
Share Issue	152,626	-	-	-	152,626
Premium on shares issued	-	539,343	-	-	539,343
Share based payments	-	-	74,851	-	74,851
At 31st December 2007 (Unaudited)	409,861	37,317,111	284,576	(34,144,664)	3,866,884

  

Consolidated Unaudited Cash Flow

For the six months ended 31st December 2008

	6 months	6 months	12 months
	ended	ended	ended
	31.12.08	31.12.07	30.06.08
	Unaudited	Unaudited	Audited
	£	£	£
Cash flow from operating activities
(Loss) from operations before taxation	(1,561,916)	(2,464,965)	(4,901,729)
Depreciation and amortisation of non-current assets	798,899	815,228	1,661,099
Share based payments	(63,747)	74,851	148,287
(Increase)/Decrease in stock	-	124,358	135,895
(Increase)/Decrease in trade and other receivables	95,800	(445,960)	663,941
Increase/(Decrease) in trade and other payables	(389,106)	947,876	1,036,952
Cash generated from operations	(1,120,070)	(948,612)	(1,255,555)
Interest received	3,680	83	72
Interest paid	(33,859)	(81,478)	(139,612)
Net cash (used in)/generated by operating activities	(1,150,249)	(1,030,007)	(1,395,095)
Cash flow from investing activities
Payments for property, plant and equipment	(42,244)	(120,227)	(452,645)
Net cash used in investing activities	(42,244)	(120,227)	(452,645)
Cash flow from financing activities
Proceeds from borrowing	1,400,000	425,000	743,621
Proceeds from equity issue	239,987	691,970	693,970
Movement in finance leases	(96,005)	(152,965)	(279,427)
Repayment of existing loans and overdrafts	-	(100,000)	-
Net cash generated by/(used in) financing activities	1,543,982	864,005	1,158,164
Net (decrease)/increase in cash and cash equivalents	351,489	(286,229)	(689,576)
Cash and cash equivalents at the beginning of the financial year	67,034	756,610	756,610
Cash and cash equivalents at the end of the financial year	418,523	470,381	67,034
Represented by:
Cash and short term deposits	418,523	772,148	684,489
Loans and Overdrafts	-	(301,767)	(617,455)
	418,523	470,381	67,034

  

Notes to the Interim Report

For the six months ended 31st December 2008

1. The financial information contained in the Interim Report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The comparative financial information for the period ended 30th June 2008 is an abridged version of the group's published financial statements for that year, which contained an unqualified audit report and did not contain a statement under s237(2) or s237(3) of the Companies Act 1985 and which has been filed with the Registrar of Companies. Neither the results for the periods ended 31 December 2007 nor 31 December 2008 have been subject to audit or review by the auditors.

2. This financial information is prepared on a basis consistent with International Financial Reporting Standards and the accounting policies disclosed in the accounts for the year ended 30 June 2008. These interim financial statements do not contain all of the information which is required to be disclosed in order to comply with IAS 34 'Interim Financial Reporting' which is not compulsory for AIM listed companies. 

The Directors are currently engaged in raising further funds for the group. They are confident that their efforts will be successful and accordingly these interim financial statements have been prepared on the going concern basis.

3. The calculation of basic and diluted loss per share is based on the loss attributable to ordinary shareholders, divided by the weighted average numbers of shares in issue during the period. 

	6 months ended 31.12.08	6 months ended 31.12.07	12 months ended 30.06.08
Continuing
Computation of diluted and basic loss per share
Net loss	£1,592,095	£2,546,360	£5,069,445
Weighted average number of shares outstanding	53,811,010	30,053,905	36,198,907
Basic loss per share	2.96p	8.47p	14.00p
There is no dilution to the basic loss per share in the current or previous periods arising from the share options or convertible loans in issue.

  

4. All revenue for the six months to 31 December 2008 was derived from the provision of screen media and related advertising services within the United Kingdom. Consequently the group considers that it only has one business segment and one geographical segment.

ENDIR SEDFAISUSEED

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