23rd Jan 2008 07:02
Thomson Intermedia PLC23 January 2008 Thomson Intermedia plcMaiden Interim Results for the six months ended 31 October 200723 January 2008 Investing for future growth Following the change of year end to 30 April, Thomson Intermedia plc ('ThomsonIntermedia' or the 'Company', AIM: THN), a leading provider of mediaintelligence, today announces its unaudited maiden interim results for the sixmonths ended 31 October 2007. Unaudited numbers for the corresponding six monthsto 31 October 2006 are provided for comparative purposes. Key points • Total revenue of £8.4 million, up 5% on H1 2006 and 12% excludingone-off development revenues in 2006/7 - Consultancy Services revenues up 21% to £5.5 million and now comprise 65% of total revenues - 95% of recurring revenues in Technology & Data Services - 85% of repeat revenues in Consultancy Services • Underlying operating profit of £1.1 million, up 50% excluding one-offdevelopment revenues in 2006/7 • Reported operating loss of £1.1 million due to non cash write-down ofcapitalised development costs • Strong working capital management, with a 20% improvement in debtordays • New CEO instigated full strategic review encompassing all aspects ofthe business • Key appointments made to build a new management team • Investment required to refocus Technology & Data Services • Michael Uzielli will step down from the Board and resign as FinanceDirector before the financial year end Michael Greenlees, Chief Executive, said: "I relish the challenge of taking Thomson Intermedia into its next stage ofdevelopment. It has become clear that previous financial forecasts wereoptimistic and we expect business performance in the year to 30 April 2008 to bebelow current market expectations. I believe however that, given the changes weare now in the process of implementing, over the medium to longer term ThomsonIntermedia has enormous potential amidst a media landscape which is changing ata breathtaking pace." Enquiries: Thomson Intermedia Michael Greenlees, Chief Executive 020 7321 4000Michael Uzielli, Finance Director College HillSara Musgrave / Ben Way 020 7457 2020 Landsbanki 020 7426 9000Shaun Dobson / Claes Spang Notes to Editors Thomson Intermedia plc (AIM: THN) provides tools to improve the effectivenessand efficiency of marketing expenditure. It was founded in 1997, to provide thefirst ever creative monitoring system that links directly to expenditure. Thecompany enjoyed healthy growth, and floated on AIM in April 2000. In August2005, Thomson Intermedia acquired billetts, the UK's leading provider of mediaaudit and consultancy services. Today, Thomson Intermedia has over 300customers, including 70 of the top 100 UK advertisers, 50 of which currentlytake more than one of the Company's products. For further information please visit: www.thomson-intermedia.com Chairman's Statement The six months to 31 October 2007 marked a watershed period of challenge andtransition at Thomson Intermedia. I am delighted to welcome Michael Greenleesto the role of Chief Executive. Michael has over thirty years experience in theadvertising industry and we are lucky to have secured someone of his calibre totake the Company into its next stage of growth. Michael was a founder of GGT(Gold Greenlees Trott) in 1980 and then went on to sell the business to Omnicomin 1998 where he became a Director of Omnicom and President/CEO of TBWAWorldwide, one of the largest advertising networks in the world. Michael's ability to attract Nick Manning, another senior figure in the mediaindustry, is testament to Michael's standing. Nick is a co-founder of ManningGottlieb Media, one of the most highly respected and fastest growing mediaspecialists in the UK. Nick took up the newly created role of Chief OperatingOfficer at Thomson Intermedia and, working alongside Michael, Nick'scontribution will be pivotal in the execution of the Board's plans for thecoming year. I am also delighted that our founder shareholders remain active Board membersand have been strongly supportive of these changes. Michael Uzielli, Finance Director, will be stepping down from the Board beforethe year end 30 April 2008. Michael has made a significant contribution in ashort time towards upgrading our overall financial processes and controls. TheBoard wishes him well in his move to a senior financial position in a majorcorporate. We will conduct a review for an appropriate replacement. AndrewBeach, Deputy Finance Director, who the Board has recently appointed CompanySecretary, will lead the Finance Department and will be considered as apotential replacement in the review. Andrew joined the Company fromPricewaterhouseCoopers in March 2007 and has worked closely with Michael. AsDeputy Finance Director, Andrew has made a significant contribution to thebusiness. In closing, I would like to echo the comments made by Michael Greenleeselsewhere in this announcement. Although the new management team will need timeto refocus the business we are confident that, in the medium to longer term,Thomson Intermedia can thrive in a market where media insights are highly valuedand deliver full value to shareholders. I would like to take this opportunityto thank our investors for their support. Michael HigginsChairman Chief Executive's Statement Introduction I begin my first report to shareholders by saying how pleased I am to be leadingthe new management team of Thomson Intermedia. Over the medium to longer term, Ibelieve it has enormous potential amidst a media landscape which is changing atbreathtaking pace. Since assuming the role of CEO in October I have instigated a full strategicreview encompassing all aspects of the business. I am assisted in this processby Nick Manning who joined in September to take up the newly created role ofChief Operating Officer. The strategic review is ongoing but it is alreadyclear to us that, whilst Consultancy Services is performing well, our Technology& Data Services business faces a number of operational challenges. We have already put in place a number of initiatives designed to improve thebusiness. Technology & Data Services has been performing below previousexpectations and we will need to refocus and invest in this division.Consultancy Services continues to perform well and its long term customerrelationships hold the key to unlocking the potential of the Company. As well asbuilding a new management team, we are looking to improve the sales capabilitywithin the Company. Although the Company faces short term challenges, I am confident that we havethe right skill set to build a business which can maximise shareholder valueover the medium to longer term. The Half Year in Review In the six months to 31 October 2007 total revenue increased 5% to £8.4 millionwhilst core revenues, which exclude one-off development business, increased by12%. Operating profit at £1.1 million was broadly flat year-on-year, althoughexcluding one-off development business it was up 50% on a like-for-like basis.Following a comprehensive review of the Company's priorities in respect ofdevelopment projects, we have taken a non cash write-down of £1.5 million inrespect of our capitalised development costs. This, together with certainone-off property relocation and management restructuring costs, is shown as ahighlighted item in the Income Statement. As a result, we recorded a reportedoperating loss for the period of £1.1 million (2006: £0.4 million profit). We did not record any development revenue in the six months ended 31 October2007. In part, this reflects a decision to adopt a more prudent accountingpolicy, whereby revenue from development projects previously taken up-front isnow spread over the life of the underlying customer contract. This changeresults in revenue being recognised in line with service delivery and it alsoreflects a strategic decision to concentrate our efforts on building long termrenewable business with recurring revenue streams rather than focusing on timeconsuming, one-off projects. Development revenue, if it arises in future, willgenerally be spread over the life of the underlying contract and recorded asCore within the relevant business segment. In addition, we have changed the classification of Core revenue into two streamsin order to better distinguish between the services that we offer our clients.This change, which reflects the reality of the business, should provide bettertransparency for investors and assist the Board in its long term growthstrategy. The two new revenue streams are: • Consultancy Services: comprising revenue from audit services andmarketing effectiveness consultancy, which are delivered by teams of mediaprofessionals using proprietary technology solutions and support services, andenjoying high levels of repeat business. • Technology & Data Services: comprising revenue from competitiveadvertising monitoring, news monitoring and e-vouching, all of which aredelivered via the online Thomson Intermedia platform. Revenue 6 months ended 31 6 months ended 31 YOY 12 months ended October 2007 October 2006 Change 30 April 2007 £'000s £'000s £'000sConsultancy 5,467 4,508 21% 9,611Technology & Data 2,935 2,999 (2%) 5,858Core 8,402 7,507 12% 15,469Development - 468 100% 520Total 8,402 7,975 5% 15,988 Consultancy Services Consultancy Services, including Media Auditing and Marketing Sciences, performedstrongly with revenue up 21% to £5.5 million. This growth was driven by anincrease in global audit assignments - a market with significant futurepotential - which now represent almost one third of our Media Auditing revenuesand a strong performance from our Marketing Sciences business. We recently announced the appointment of Martin Sambrook who joins us fromAccenture Marketing Sciences where he was Head of Global Accounts. Martin comeswith an outstanding pedigree, having not only built a strong and thrivingbusiness across Europe, Middle East and Asia but also established the mediaauditing process in both North and South America. As Managing Partner, billettInternational, Martin will take overall responsibility for growing ourincreasingly important international business. The increasing complexity of the media landscape and, in particular, theinfluence of online advertising and the continuing fragmentation and complexityof the traditional media, continues to present our clients with enormouschallenges. These fundamental trends mean that our Marketing Sciences business,which focuses on media effectiveness consultancy, continues to be in significantdemand with revenue growth up 45% year on year. Technology & Data Services Technology & Data Services continued to perform disappointingly during theperiod. Excluding one-off development revenues generated in 2006/07, sales wereflat year-on-year and although levels of recurring revenue reached 95%, our newbusiness performance was poor, with new sales initiatives failing to generatethe expected results. Having said that, revenues from e-vouching services forpublishers were up 9% following major contract wins in Holland and in UKmagazine publishing, the impact of which will be felt more strongly in thesecond half. Martin Wright who recently joined following periods at Blast Radius, now part ofWPP, and Interpublic Group will take the position of Managing Partner,Technology & Data Services with Bruce Dove, our newly appointed Director ofSales, taking responsibility for revenue generation and customer support. We have now taken steps to significantly rationalise Technology & Data Servicesby discontinuing activities with the least potential and concentrating resourceson those that have demonstrated the greatest opportunity for growth. Technology& Data Services is the primary focus of the Company-wide strategic review andsignificant investment will be required to refocus this division on its keytarget audiences of advertisers and publishers where we have a strong andgrowing franchise. We will invest in these audiences with products and servicesthat, by delivering unique market insights, will add value to our customerrelationships and thus increasingly distinguish us from the generic providers ofdata. Uniquely, recent contracts with regional newspapers now mean that we will beginto capture a significant amount of our data electronically. This is important asdata capture accounts for a large proportion of our costs. Over time the use ofelectronic data capture will reduce our reliance on manual feeds and thuspotentially increase our efficiencies. Outlook We have taken the first steps to restructure the Company, strengthen themanagement team and create a better culture of accountability. We havesignificantly rationalised our activities to focus only on those businessstreams that offer the greatest potential. We are consolidating our CharingCross and Farringdon operations by relocating onto one floor in new offices atTower Hill and we are in the process of making operational improvements to ourdata capture centre in Bromley. I intend to announce the results of our strategic review at the year end. Theobjective of the review is to ensure that we are able to build strong enduringclient relationships based on thought leadership and supported by indispensabletechnology solutions that add real value to our clients' business. It has become clear that previous financial forecasts were optimistic and we nowexpect business performance for the year to 30 April 2008 to come in belowcurrent market expectations. In the medium to longer term, however, theprospects are strong and we are confident that Thomson Intermedia has thecapability and market position to deliver substantial shareholder value. Michael Greenlees Chief Executive Officer Financial Review Our unaudited interim results for the six month period ended 31 October 2007read as follows: Revenue 6 months ended 6 months ended 12 months ended 31 October 2007 31 October 2006 30 April 2007 £'000s £'000s £'000sConsultancy 5,467 4,508 9,611Technology & Data 2,935 2,999 5,858Core 8,402 7,507 15,469Development - 468 520Total 8,402 7,975 15,988 As stated in the Chief Executive's Statement, the Company has changed theclassification of its revenue to distinguish more clearly between the nature ofthe services that we provide to our clients. Total Company revenue increased by 5% to £8.4 million (2006: £8.0 million) withCore revenue, excluding one-off development projects, up by 12% to £8.4 million(2006: £7.5 million). This growth was driven by Consultancy Services whererevenue increased by 21% to £5.5 million. Revenue from international auditassignments and marketing effectiveness projects both grew strongly, up by 29%and 45% respectively. Despite an encouraging 95% renewal rate (by value), revenue from Technology &Data Services was flat year-on-year due to a disappointing new businessperformance. Following contract wins in Holland and in UK magazine publishing,revenues from e-vouching services for publishers were up 9%. The Company has changed its accounting policy for revenue recognition ofe-vouching contracts, which form part of Technology & Data Services, torecognise revenue evenly over the life of the contract period. Previously,revenue recognition was weighted towards the start of the contract to take intoaccount set up time and costs. This change results in a more reliable andrelevant approach, with revenue being recognised in line with the delivery ofthe service. A prior period adjustment has been made to increase revenue forthe first six months of 2007/08 and 2006/07 by £66,000 and £48,000 respectively. Further detail is set out under Note 1 of the interim results. Gross Profit Gross profit was £4.4 million (2006: £4.6 million), yielding a gross margin of52% (H1 2006: 58%). This reflects the lack of one-off development revenue aswell as the increasing proportion of Consultancy Services revenue which has beengrowing strongly but has lower margins than Technology & Data Services. Administrative Expenses As a result of tight focus on cost control during the period, administrativeexpenses before highlighted items were £0.1m lower at £3.3 million (2006: £3.4million), As previously announced, the senior management changes implemented inOctober will result in a £0.3 million increase in administrative expenses forthe second half of the year. Operating Profit Certain items have been separately disclosed and highlighted in order to provideadditional clarity to the underlying performance of the business. Profit beforehighlighted items is termed "underlying operating profit". The Company haschanged its approach to categorising operating profit between Core andDevelopment business. Core now includes total Company operating costs whilstDevelopment comprises only one-off project revenue. Central costs, shown below,include total Company costs related to IT, property and central overheads. 6 months ended 31 6 months ended 31 12 months ended October 2007 October 2006 30 April 2007 £'000s £'000s £'000sConsultancy 2,108 1,590 3,567Technology & Data 1,115 1,332 2,469Central (2,100) (2,179) (4,217)Core 1,123 742 1,819Development - 468 520Underlying Operating Profit 1,123 1,210 2,338Highlighted ItemsNon-cash (1,750) (340) (763)Cash (463) (426) (1,398)Reported Operating Profit (1,090) 444 177 Core operating profit, before highlighted items, for the first six months was£1.1m, an increase of £0.4 million on the prior period (2006: £0.7 million).Including one-off development revenue in 2006, total underlying operating profitwas flat. There was a reported operating loss of £1.1 million (2006: £0.4 million profit)due to the £1.5 million non cash write-down of the Company's capitaliseddevelopment costs. Highlighted Items 6 months ended 31 6 months ended 31 12 months ended October 2007 October 2006 30 April 2007 £'000s £'000s £'000sRecurringShare based expenses 45 135 270Amortisation of purchased 188 194 387intangible assetsForeign exchange losses 60 11 106Total 293 340 763Non-recurringCapitalised development costs 1,457 - -write-offProperty cost 246 - 218Management restructuring costs 127 - 193Other 90 426 987Total 1,920 426 1,398Total Highlighted Items 2,213 766 2,161 Following a comprehensive review of the Company's priorities in respect ofdevelopment projects, we have taken a write-off of £1.5 million in respect ofour capitalised development costs. This is an accounting charge, which has noimpact on the Company's cash flow, now or in the future. The property costs of £246,000 relate to the consolidation of the Company'sLondon operations into one location at Tower Hill and include the cost ofexiting our two other properties in Charing Cross and Farringdon. We anticipatea further £0.3 million of property relocation costs in the second half of theyear. The management restructuring costs of £127,000 relate to senior managementchanges implemented in October 2007. The outcome of the ongoing strategicreview may result in further one-off restructuring charges of up to £0.5 millionin the second half of the year. Profit before Tax and EPS Net finance costs were 39% lower at £0.1 million (2006: £0.2 million) whichreflects a decrease in the Company's borrowings over the past twelve months. Underlying profit before tax was flat at £1.0 million. The reported loss beforetax was £1.2 million (2006: £0.2 million profit). Underlying diluted earnings per share was 2.34p (2006: 2.58p). The reporteddiluted loss per share was 3.18p (2006: 0.83p earnings). The Board is not recommending the payment of an interim dividend. Cash and Debt 6 months ended 6 months ended 12 months ended 31 October 2007 31 October 2006 30 April 2007 £'000s £'000s £'000sCash 1,286 3,085 2,105Debt 4,038 6,462 5,057Net Debt 2,752 3,377 2,952 Net cash from operating activities for the six months was £0.4 million (2006:£0.9 million). The decline over the prior period reflects three factors.Firstly, the revised approach to capitalisation of development expenditureresults in a reclassification of spend between operating and investingactivities which reduces reported operating cash flow for the period to 31October 2007 by £0.2 million. Secondly, the prior period benefited from aworking capital recovery following a deterioration during the integration ofbilletts which was acquired in August 2005. Finally, trade payables reduced by£0.6 million during the period as a result of improvements to the supplierpayments process and the more timely settlement of creditors. There has been a strong focus over the period on improving the processes forcash and working capital management, including debt collection, invoicing andsupplier payments. These initiatives are beginning to have an impact withdebtor days down from 97 days at the last year-end to 76 days at 31 October.The profile of the debtor balances has also improved: as at 31 October, 15% ofdebtors had been outstanding for more than 60 days compared with 39% as at 30April. The net debt position as at 31 October 2007 was £2.8 million (2006: £3.4million), the reduction being due to positive cash flow over the past twelvemonths. Gross debt was reduced by £2.4 million to £4.0 million as £3.6 millionof the £3.7 million billetts vendor loan notes were redeemed which was partiallyoffset by an increase in bank borrowing of £1.2 million. As at 31 October 2007, the Company had unutilised banking facilities of £4.1million. Michael UzielliFinance Director Consolidated Income Statementfor the six months ended 31 October 2007 Unaudited Unaudited Unaudited 6 months 6 months 15 months ended ended ended 31 October 31 October 30 April 2007 2006 2007 Restated Restated Note £'000s £'000s £'000sRevenue 8,402 7,975 20,190Cost of Sales (4,018) (3,375) (8,758)Gross Profit 4,384 4,600 11,432 Administrative expenses - excluding highlighted (3,261) (3,389) (8,144)itemsAdministrative expenses - highlighted items 2 (2,213) (766) (2,337)Total administrative expenses (5,474) (4,155) (10,481) Operating profit before highlighted items 1,123 1,211 3,288Administrative expenses - highlighted items (2,213) (766) (2,337)Operating (loss)/profit (1,090) 445 951 Finance income 30 25 80Finance expenses (157) (232) (473)Net finance costs (127) (207) (393) (Loss)/profit before taxation (1,217) 238 558 Corporation tax (62) (32) (79)Deferred tax 266 55 342Tax income 204 23 263 (Loss)/profit for the period (1,013) 261 821 Attributable to:Equity holders of the parent (1,013) 261 770Minority interests - - 51 (1,013) 261 821 (Loss)/earnings per shareBasic 4 (3.22p) 0.83p 2.46pDiluted 4 (3.22p) 0.80p 2.37p Consolidated Balance Sheetas at 31 October 2007 Unaudited Unaudited Unaudited as at as at as at 31 October 31 October 30 April 2007 2006 2007 Restated Restated Note £'000s £'000s £'000sNon current assetsGoodwill 8,754 8,924 8,625Other intangible assets 5 2,853 4,311 4,432Property, plant & equipment 584 594 610Investments 115 115 115Deferred tax asset 978 918 895Total non current assets 13,284 14,862 14,677 Current assetsTrade & other receivables 5,660 6,112 5,715Current tax assets - - 105Cash & cash equivalents 1,286 3,085 2,105Total current assets 6,946 9,197 7,925 Total Assets 20,230 24,059 22,602 Current liabilitiesOther financial liabilities (2,038) (3,962) (2,857)Trade & other payables (1,589) (2,031) (2,132)Current tax liabilities (126) (155) -Provisions (269) - (59)Accruals & deferred income (3,953) (4,086) (3,995)Total current liabilities (7,975) (10,234) (9,043) Non current liabilitiesOther financial liabilities (2,000) (2,500) (2,200)Provisions (124) - (159)Deferred tax liability (720) (902) (825)Total non current liabilities (2,844) (3,402) (3,184) Total liabilities (10,819) (13,636) (12,227) Total net assets 9,411 10,423 10,375 Capital & ReservesShare capital 8,016 7,828 7,828Share premium 1,845 8,871 1,840ESOP reserve (130) - -Merger reserve (4,504) (4,504) (4,504)Translation reserve 76 42 50Retained earnings 4,108 (1,814) 5,161Capital and reserves attributable tothe equity holder of the parent 9,411 10,423 10,375Minority interest - - -Total Equity 9,411 10,423 10,375 Consolidated Cashflow Statementfor the six months ended 31 October 2007 Unaudited Unaudited Unaudited 6 months 6 months ended 15 months ended ended 31 October 2006 30 April 31 October Restated 2007 2007 Restated £'000s £'000s £'000sCashflows from operating activitiesProfit before taxation (1,217) 238 558Adjustments for:Depreciation 166 163 414Amortisation 205 446 1,120Capitalised development costs write off 1,457 - -Share option charges 45 135 307Finance income (30) (25) (80)Finance expense 157 232 473 783 1,189 2,792 Decrease/(increase) in trade receivables 56 556 (225)(Decrease)/increase in trade payables (584) (643) 112Increase in provisions 175 - 110 Cash generated from operations 430 1,102 2,789Finance expense (164) (232) (473)Income taxes paid 167 (1) (308) Net cash from operating activities 433 869 2,008 Cashflows from investing activitiesPurchase of property, plant & equipment (140) (67) (317)Purchase of intangible assets (211) (300) (793)Finance income 30 25 80 Net cash used in investing activities (321) (342) (1,030) Cashflows from financing activitiesProceeds from issue of share capital 62 5 32Proceeds from long term borrowings - - 2,000Repayment of bank loans (663) (125) (375)Loan note settlement (356) (82) (3,218) Net cashflow used in financing activities (957) (202) (1,561) Net increase/(decrease) in cash, cash equivalentsand bank overdrafts (845) 325 (583)Effect of foreign exchange rate changes 26 (50) (24)Cash, cash equivalents and bank overdrafts atbeginning of period 2,105 2,810 2,712Cash, cash equivalents and bank overdrafts at endof period 1,286 3,085 2,105 1. Accounting policies Basis of preparation The financial information presented in this documentation has been prepared inaccordance with International Financial Reporting Standards (IFRS) andInternational Financial Reporting Interpretations Committee (IFRIC)interpretations that are expected to be applicable for the period ended 30 April2008. These are subject to ongoing review and endorsement by the EuropeanCommission, or possible amendment by the International Accounting StandardsBoard (IASB), and are therefore subject to possible change. Further standardsor interpretations may also be issued that could be applicable for the yearended 30 April 2008. These potential changes could result in the need to changethe basis of accounting or presentation of certain financial information fromthat presented in this document. The comparatives for the period ended 30 April 2007 are not the Company's fullstatutory accounts for that year but are drawn up from those accounts, asamended for the unaudited restatement, as explained below. A copy of thestatutory accounts for that year has been delivered to the Registrar ofCompanies. The auditors' report on those accounts was unqualified, did notinclude references to any matters to which the auditors drew attention by way ofemphasis without qualifying their report and did not contain a statement undersection 237(2)-(3) of the Companies Act 1985. As permitted, the group has not applied IAS 34 'Interim Reporting' in preparingthis interim report. The Group has changed its accounting policy for revenue recognition ofe-vouching contracts to recognise revenue evenly over the life of the contractperiod. Previously, revenue recognition was weighted towards the start of thecontract to take account of set up time and costs. This change results inrevenue being recognised more in line with the delivery of the service. Thecomparative figures have been restated to reflect the change in policy. Thechange in accounting policy resulted in: 6 months ended 6 months ended 15 months ended 31 October 2007 31 October 2006 30 April 2007 Increase in revenue/profit 66 48 163(£000's)Increase in deferred income at end 100 269 167of period (£000's) Decrease in total equity at beginning of period 166 317 330(£000's) Increase in basic earnings 0.21 0.15 0.52per share (p)Increase in diluted earnings 0.21 0.15 0.50per share (p) 2. 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. Unaudited Unaudited Unaudited 6 months ended 6 months ended 15 months ended 31 October 2007 31 October 2006 30 April 2007 £'000s £'000s £'000s Recurring:Share based expenses 45 135 347Amortisation of purchased 188 194 484intangible assetsForeign exchange losses 60 11 107 293 340 938Non recurring:Capitalised development costs write 1,457 - -offProperty costs 246 - 218Management restructuring costs 127 - 193Other costs 90 426 988 1,920 426 1,399 Total highlighted items 2,213 766 2,337 The capitalised development costs write off follows a comprehensive review ofdevelopment projects, which has resulted in a decision to discontinue certain ofthose projects. Property costs in the current period relate to legal costs and the dilapidationprovision associated with the Group's proposed office relocation. The management restructuring costs in the current period relate to a seniormanagement redundancy and costs associated with the appointment of the Group'snew CEO and COO. Other costs in the current period relate to a settlement to HM Revenue & Customsfollowing an indirect tax assessment. 3. Dividends No interim dividend is being proposed. 4. Earnings per share The calculation of the basic and diluted earnings per share is based on thefollowing data: Unaudited Unaudited Audited 6 months ended 6 months ended 15 months ended 31 October 2007 31 October 2006 30 April Restated 2007 Restated £'000s £'000s £'000sEarning for the purpose of basic (1,013) 261 770earnings per share being netprofit attributable to equityholders of the parent Adjustments:Highlighted items - recurring* 293 340 938Highlighted items - non recurring 1,920 426 1,399*Tax effect of highlighted items (458) (197) (600) Earnings for the purpose of 742 830 2,507underlying earnings per share Number of sharesWeighted average number of 31,424,226 31,303,591 31,299,591ordinary shares for the purposeof basic earnings per share** Effect of dilutive potentialordinary sharesShare options*** 919,730 1,202,523 1,185,915 Weighted average number of 32,343,956 32,506,114 32,485,506ordinary shares for the purposeof diluted earnings per share Basic (loss)/earnings per share (3.22p) 0.83p 2.46pDiluted (loss)/earnings per share (3.22p) 0.80p 2.37p***Underlying basic earnings per 2.36p 2.65p 8.01pshareUnderlying diluted earnings per 2.30p 2.55p 7.72pshare * Highlighted items (see note 2). ** 519,847 shares held in the ESOP Trust have been removed from the weightedaverage number of ordinary shares since these shares are no longer available inthe market *** Note that 615,166 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. In the 6 monthsended 31 October 2007, the ordinary shares in the form of share options areantidilutive and hence do not impact on the diluted earnings per sharecalculation. 5. Other intangible assets Capitalised Purchased intangible Total intangible development costs assets assets £'000s £'000s £'000sCostAt 1 May 2007 3,488 3,395 6,883Additions 83 - 83Write off (3,251) - (3,251) At 31 October 2007 320 3,395 3,715 AmortisationAt 1 May 2007 (1,805) (646) (2,451)Provision for the (17) (188) (205)periodWrite off 1,794 - 1,794 At 31 October 2007 (28) (834) (862) Net book value At 31 October 2007 292 2,561 2,853 The capitalised development costs are internally generated. The write off follows a comprehensive review of certain development projects(see note 2). 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 Current Useful Remaining acquisition carrying economic of period value life amortisation £'000s £'000s Years Years Media Consulting Customer 2,859 2,239 10 8.0relationshipsMarketing Sciences Customer 271 154 5 3.0relationshipsMPMA Customer relationships 43 - 2 -Trade name 215 168 10 8.0Non-compete 7 - 1.5 - 3,395 2,561 INDEPENDENT REVIEW REPORT TO THOMSON INTERMEDIA PLC Introduction We have been engaged by the company to review the condensed set of financialstatements in the half-yearly financial report for the six months ended 31October 2007 which comprises the Consolidated Income Statement, ConsolidatedBalance Sheet, Consolidated Cashflow Statement and related notes. We have read the other information contained in the half-yearly financial reportand considered whether it contains any apparent misstatements or materialinconsistencies with the information in the condensed set of financialstatements. Directors' responsibilities The interim report, including the financial information contained therein, isthe responsibility of and has been approved by the directors. The directors areresponsible for preparing the interim report in accordance with the rules of theLondon Stock Exchange for companies trading securities on the AlternativeInvestment Market which require that the half-yearly report be presented andprepared in a form consistent with that which will be adopted in the company'sannual accounts having regard to the accounting standards applicable to suchannual accounts. Our responsibility Our responsibility is to express to the company a conclusion on the condensedset of financial statements in the half-yearly financial report based on ourreview. Our report has been prepared in accordance with the terms of our engagement toassist the company in meeting the requirements of the rules of the London StockExchange for companies trading securities on the Alternative Investment Marketand for no other purpose. No person is entitled to rely on this report unlesssuch a person is a person entitled to rely upon this report by virtue of and forthe purpose of our terms of engagement or has been expressly authorised to do soby our prior written consent. Save as above, we do not accept responsibilityfor this report to any other person or for any other purpose and we herebyexpressly disclaim any and all such liability. Scope of review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, ''Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity'', issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making enquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly,we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the condensed set of financial statements in the half-yearly financialreport for the six months ended 31 October 2007 is not prepared, in all materialrespects, in accordance with the rules of the London Stock Exchange forcompanies trading securities on the Alternative Investment Market. BDO Stoy Hayward LLPChartered Accountants and Registered Auditors8 Baker StreetLondonW1U 3LL 23 January 2008 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Ebiquity