23rd May 2007 07:00
Media Corporation plc: Interim results for the six months ended 31 March 2007 The Board of Media Corporation plc, a leading internet media and advertisingcompany focused on internet search, publishing and media sales, is pleased toannounce interim results for the period ended 31 March 2007. Financial Highlights -- Revenues of £5.8m (2006: £5.3m) -- Profit after tax of £220,000 (2006: £1.3 million) -- Consolidated net assets of £17.1 million (2006: £16.1 million) -- Cash balances at the period end of £4.0 million (2006: £3.9 million) Other Highlights -- Acquisition of Result Online Limited, the financial portal operator -- Acquisition of Flight Comparison Limited, the travel portal operator -- Significant capital investment in technical infrastructure for future growth -- Ongoing re-launch of all key websites including www.creditcardexpert.co.uk -- Expanded sales capacity Regulatory and Economic Factors -- Client advertising spend reduced as a result of adverse regulatory change in the US -- Weakness of US dollar Commenting on the interim results, Justin Drummond, Chief Executive Officer,said: "Media Corporation's half year performance has been positive considering thedamaging affect the adverse gaming legislation has had on our advertisingcustomer base. The Group has remained profitable and, leveraging in-houseexpertise continues its strategy of diversification into other lucrativeadvertising markets and value enhancing acquisitions." "The first six months of the financial year has been a period of rapid changeand inward investment giving the Group a platform for rapid growth and ongoingbusiness development". Contact \* TMedia Corporation plc Justin Drummond, Chief Executive Officer+44 (0)20 7618 9000 Paul Tuson, Group Finance Director Canaccord Adams Limited Mark Ashurst, Managing Director+44 (0)20 7050 6500 Buchanan Communications Charles Ryland, Director+44 (0)20 7466 5000\* T Chairman's Statement Introduction The Board is pleased to present the interim results for the period ended 31March 2007. Financial review The Group's results for the six months to 31 March 2007 were materially impactedby changes in gaming legislation which affected the marketing budgets of ouradvertisers. Turnover increased by 10% to £5.8 million (2006: £5.3 million).Gross profit decreased by 42% to £1.3 million (2006: £2.3 million) and the Grouprecorded a profit before tax of £0.2 million (2006: £1.3 million). Earnings pershare were 0.08p (2006: 0.45p) on a fully diluted basis. The Group's had net assets as at 31 March 2007 of £17.1million (31 March 2006:£16.1million). It is not the intention of the Directors to pay an interim dividend. Media The Group's advertising network business Eyeconomy has undergone a period ofsignificant investment which has created a platform for growth. The business nowhas a new server infrastructure which has been fully installed in a state of theart data center in central London and has recently expanded its sales team togain market share in the fast growing internet advertising market. The increasedadvertising delivery capabilities and additional sales staff should allow thisbusiness to grow substantially. The business now has relationships with over 750 websites giving a reach of overthirty million UK consumers. Eyeconomy has recently run significant onlineadvertising campaigns for large corporate clients including Dell, AOL andAmerican Express. www.eyeconomy.co.uk Search Technology As previously announced reduced marketing budgets from keyadvertisers in the gaming industry have materially affected search revenues inthe financial period. These revenues have now started to increase as we haveimplemented product improvements and technical changes during the first sixmonths of the financial year: -- Faster search results as a result of back-end technical development -- Foreign language listings in both French and Spanish - with more languages to follow -- Re-developed search engine back-end for finance and travel markets -- Gambling.com magazine now published on-line -- Enhanced search engine optimisation -- New affiliate partners www.searchfocus.co.uk Publishing The Group's publishing division has undergone a rapid expansion during thefinancial period and has recruited a senior production team specialising in thedesign, development and search engine optimisation of our website portfolio. TheGroup has recently made two acquisitions, being Result Online Limited, the ownerof leading financial portal www.creditcardexpert.co.uk andwww.broadbandwise.co.uk and Flight Comparison Limited the owner ofwww.flightcomparison.co.uk. The Board believes there is significant value in its internet real estate and iscurrently re-developing its entire web portfolio with a view to maximising itsrevenue potential and value. During the next few months all of the Group'sflagship websites including www.gambling.com, www.casino.co.uk, www.onthebox.comwill be re-launched as we seek to improve revenues from these sites and greatlyimprove the product offering. In addition, the Group has a portfolio of top-tierinternet domain names that will be developed into businesses during the comingmonths. www.mediacorpplc.com Board changes Paul Tuson, has resigned from his position as Group Finance Director with effectfrom 1 June 2007 and the Board would like to thank Paul for his significantcontribution as a senior executive of the Group. The Board is pleased to announce the appointment of Nilesh Jagatia as FinanceDirector. Whilst initially not a Board appointment, it is the intention of theDirectors to appoint a Finance Director to the Board in due course. Nilesh is aqualified accountant with over 15 years experience including senior financialroles with divisions of both Universal Music and Sanctuary Records. Mike Hawkes was appointed as non-executive Director in November 2006; he hasheld senior finance roles with a number of successful technology companiesincluding finance director of Northern Europe for the internet marketing companyOverture Services Limited, a subsidiary of Yahoo! In addition, the Directors intend to strengthen its Board with the appointmentof up to a further two non-executive directors. Trading outlook The Board is pleased with the performance of its publishing business, which iscontinuing to deliver organic growth and profits. In addition, the mediadivision is benefiting from the technical investment and an enlarged salesfunction and the Board is optimistic about its outlook for the remainder of thefinancial year. Revenues from the gaming vertical of the search marketing business havestabilised and are now growing once more and the Board expects growth from othervertical markets in the second half of the financial year. The Board continues to evaluate a number of earnings enhancing acquisitions thatwill either extend the Group's geographical reach or presence in differingvertical markets. The Group continues to be profitable and with continued diversification andgrowth in its media and publishing businesses the outlook for the Group remainspositive. \* TJason DrummondChairman\* T \* TConsolidated profit and loss accountfor the six months ended 31 March 2007 Six months Six months Year ended 31 ended 31 ended 30 March March September 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Turnover 5,836 5,320 11,901Cost of sales (4,518) (3,061) (7,140) ------------------- ----------- -----------Gross profit 1,318 2,259 4,761 Selling and distribution costs (136) (117) (467)Administrative expenses (1,058) (907) (1,994) ------------------- ----------- -----------Operating profit 124 1,235 2,300 Interest receivable and similar income 95 66 154 ------------------- ----------- -----------Profit on ordinary activities before taxation 219 1,301 2,454 Taxation (note 3) - - - ------------------- ----------- -----------Profit on ordinary activities after taxation 219 1,301 2,454 Minority interest 1 - (3) ------------------- ----------- -----------Profit for the period 220 1,301 2,451 =================== =========== ===========Profit per share (note 4) Basic 0.08p 0.47p 0.88p Diluted 0.08p 0.45p 0.87p =================== =========== =========== All operations are classified as continuing. Statement of total recognised gains and lossesfor the six months ended 31 March 2007 Six months Six months Year ended 31 ended 31 ended 30 March March September 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Profit for period 220 1,301 2,451Prior year adjustment - - (154)Currency translation differences (273) - (311) ------------------- ----------- -----------Total recognised gains and losses relating to the period (53) 1,301 1,986 =================== =========== =========== Consolidated balance sheetas at 31 March 2007 As at 31 As at 31 As at 30 March March September 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000Fixed assetsIntangible assets 12,426 11,563 11,422Tangible assets 533 290 381 ------------------- ----------- ----------- 12,959 11,853 11,803 Current assetsDebtors 851 867 808Cash at bank and in hand 3,980 3,886 5,253 ------------------- ----------- ----------- 4,831 4,753 6,061Creditors: amounts falling due within one year (732) (484) (752) ------------------- ----------- -----------Net current assets 4,099 4,269 5,309 Net assets 17,058 16,122 17,112 =================== =========== ===========Capital and reservesCalled up share capital 4,764 4,614 4,764Share premium account 12,917 12,766 12,917Other reserve 1,422 1,422 1,422Profit and loss account (2,045) (2,678) (1,992) ------------------- ----------- -----------Shareholders' funds - equity interests 17,058 16,124 17,111 Minority interests - (2) 1 ------------------- ----------- ----------- 17,058 16,122 17,112 =================== =========== =========== Net assets per ordinary share 5.9p 5.6p 5.9p === === === Consolidated cash flow statementsfor the six months ended 31 March 2007 Six months Six months Year ended 31 ended 31 ended 30 March March September 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Net cash (outflow) inflow from operating activities (note 5) (78) 1,087 2,214 Returns on investments and servicing of financeInterest received 95 65 154 Capital expenditurePayments to acquire tangible fixed assets (225) (96) (246) Acquisitions and disposalsAcquisition of subsidiary undertakings and business (2,129) (6) (6)Net cash balance acquired with subsidiary 1,064 - - ------------------- ----------- ----------- (1,065) (6) (6)Net cash (outflow) inflow before management of liquid resources and financing (1,273) 1,050 2,116 FinancingIssue of ordinary share capital - 27 328 ------------------- ----------- -----------(Decrease) increase in cash (1,273) 1,077 2,444 =================== =========== ===========\* T Notes to the accounts 1. Basis of preparation The interim results for the six months ended 31 March 2007 have not been auditedand do not constitute statutory accounts in accordance with section 240 of theCompanies Act 1985. The 2006 annual report and accounts of Media Corporation plcreceived an unqualified auditors' report and has been filed with the Registrarof Companies. The financial information has been prepared in accordance with applicableaccounting standards and under the historical cost accounting convention. Accounting policies consistent with those applied in the financial statementsfor the year ended 30 September 2006 have been used in preparing the unauditedinterim results for the six months ended 31 March 2007. 2. Segmental analyses \* T Six months Six months Year ended 31 ended 31 ended 30 March March September 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000Turnover analysis by business segment:Search 692 1,618 3,213Media 747 739 1,529Publishing 4,379 2,963 7,159 ----------- ----------- --------- 5,836 5,320 11,901 =========== =========== =========Operating profit (loss) by business segment:Search 23 1,094 2,020Media 5 35 15Publishing 96 106 265 ----------- ----------- --------- 124 1,235 2,300 =========== =========== =========\* T 3. Taxation There is no provision for UK Corporation tax due to tax losses brought forward. The Group has a deferred tax asset of £227,000 (2006: £227,000). 4. Earnings per ordinary share \* T Six months Six months Year ended 31 ended 31 ended 30 March March September 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Profit attributable to shareholders 220 1,301 2,451 Thousands Thousands Thousands Weighted average number of shares in issue 291,027 275,464 280,054Dilution effect of warrants 1,900 16,700 1,900 ----------- ----------- ------------Diluted weighted average number of shares in issue 292,927 292,164 2581,954 Basic earnings per share 0.08p 0.47p 0.88pDiluted earnings per share 0.08p 0.45p 0.87p\* T Basic earnings per share are calculated on the results attributable to ordinaryshareholders divided by the weighted average number of shares in issue duringthe period. Diluted earnings per share calculations reflect the dilutive effect ofunexercised warrants. The dilution effect of warrants on the weighted averagenumber of shares in issue reflects those warrants with an exercise price lowerthan the prevailing share price of the Company at the end of the period. 5. Notes to the statement of cash flows Reconciliation of operating profit to net cash (outflow) inflow from operatingactivities \* T Six months Six months Year ended 31 ended 31 ended 30 March March September 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Operating profit 124 1,235 2,300Depreciation 87 59 118Decrease in debtors 63 134 193Decrease in creditors (189) (341) (227)Translation differences (163) - (170) ----------- ----------- --------- (78) 1,087 2,214 =========== =========== =========\* T Reconciliation of net cash flow to movement in net funds \* T Six months Six months Year ended 31 ended 31 ended 30 March March September 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Movement in net funds (1,273) 1,077 2,444Opening net funds 5,253 2,809 2,809 ----------- ----------- ---------Closing net funds 3,980 3,886 5,253 =========== =========== =========\* T 6. Dividends The Directors do not recommend the payment of an interim dividend. 7. Copies of interim results Copies are available at the Group£s web site at www.mediacorpplc.com. Copies mayalso be obtained from the Group£s registered office: Media Corporation plc,Ground Floor, 77 Queen Victoria Street, London EC4V 4AY. Copyright Business Wire 2007Related Shares:
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