31st Mar 2008 08:26
Net b2b2 PLC31 March 2008 31 March 2008 Netb2b2 plc Interim results for the six months ended 31 December 2007 Netb2b2 plc ("Netb2b2" or "the Group"), the digital communications business,today announces its unaudited interim results for the six months ended 31 December 2007. Financial and business highlights: * Turnover increased by 5% to £3.36m (2006: £3.2m) * Group operating loss of £198,000 (2006: loss of £168,000) * Group loss after tax of £211,000 (2006: loss of £186,000) * Loss per share of 3.40p (2006: loss of 3.07p) * Major new clients and substantial ongoing work secured with the Army, Computacentre, CIPD, NHS Confederation, LSE, Royal College of Physicians, Reed Publishing, Future Publishing and CMPi Andrew Gannon, Group Chief Executive of Netb2b2, commented: "After a period of challenging times in 2007 we have started this calendar yearsatisfactorily across all of our subsidiaries. The processes and structures wehave put into place have strengthened the Company considerably and we are betterplaced to confront the challenges ahead. "Our focus on the media and entertainment markets is beginning to pay dividendsand we are also seeing very good traction in the Microsoft SharePoint space,MOSS. The Group has entered an exciting phase in its growth within the digitalmedia arena and we have successfully embraced the commercial opportunitiesavailable to us by driving the top line through investment in technology andmarketing. We believe we have the right products and services to drive ourgrowth in the digital media arena and we now have a strong platform on which tobuild. "Elsewhere, as part of refining our focus, we have rationalised our operationsby closing the NetPen and Gambling systems. Our UK partnership with VMware hasallowed us to embark on the use of exciting new technologies within the hostingspace and we are delighted by the progress made. "The Group has sustained its focus on good cost control and has focused effortson its core strengths identified in the internal review. The structuralimprovements made by the Group last year are beginning to pay dividends and weexpect this to continue as we look forward to executing further on our refinedstrategy in 2008 and beyond." Enquiries, please contact: Andrew GannonNetb2b2 PLC020 7689 8800 Azhic Basirov / Siobhan SergeantSmith & Williamson020 7131 4000 Duncan McCormick /John WestTavistock Communications0207 920 3150 Chief Executive's Review I am pleased to report that in the six months to 31 December 2007 we have begunto execute clearly on a refined strategy and we have started this calendar yearsatisfactorily across all of our subsidiaries after a challenging 2007. Our focus in the media and entertainment markets is beginning to pay dividendsand from a technology aspect we are seeing great traction in the MicrosoftSharePoint space, MOSS. The Group has further rationalized its operations byclosing its NetPen and gambling systems businesses. Financial and operational review In the period under review, turnover increased by some 5% although profitabilitycontinued to be depressed. The £500,000 placing of shares with Keith Young thathas now been completed has significantly strengthened our Group balance sheet. cScape, our largest group company, has won new contracts with the Army andComputacentre whilst delivering on its substantial ongoing business with CIPD,Barclays and Royal College of Physicians. The Client Engagement Unit has been agreat success by helping our clients to utilize the Internet so they can developit as an intrinsic tool in their relationships with their own clients. Blue Sky continues to progress its partnership with VMware as reported inDecember. Blue Sky has been accepted into the VMware Virtual InfrastructurePartner program (VIP) in preparation for its forthcoming launch of virtualizedhigh availability enterprise hosting solutions in 2007. Blue Sky continues toleverage its position as one of the first hosting providers in the RIM AlliancePartner network and has grown its Hosted BlackBerry Managed Services portfolioto attract both Lotus Domino and Microsoft Exchange corporate mail users. At Fernhart our focus is on Content Management Server, Interactive TV and RichInternet Applications. As mentioned in December, Fernhart is now an approvedsupplier to Microsoft Consulting Services and our progress with Microsoftcontinues apace with recent implementations of Silverlight at the LSE and ITN.Silverlight is Microsoft's latest presentation toolset to create Rich InternetApplications with attractive visual interfaces. The recent performance of thebusiness, with contract wins including the NHS Confederation, continues tojustify our confidence in the long-term prospects of this business. ITM is our publishing services subsidiary, offering outsourced publisher supportand publishing consulting down to print farming. Here we have won substantialnew business with Reed Publishing, Future Publishing and CMPi. Outlook After a period of challenging times in 2007 we have started this calendar yearsatisfactorily across all of the subsidiaries and we look forward to executingon our refined strategy in 2008 and beyond. The processes and structures we haveput into place have strengthened the Company considerably and we are betterplaced to confront the challenges ahead. Our focus on the media and entertainment markets is beginning to pay dividendsand we are also seeing very good traction in the Microsoft SharePoint space,MOSS. The Group has entered a new phase in its growth within the digital media arenaand we have successfully embraced the commercial opportunities available to usby driving the top line through investment in technology and marketing. Webelieve we have the right products and services to drive our growth in thedigital media arena and we have a strong platform on which to build. Elsewhere, as part of refining our focus, we have rationalised our operations byclosing the NetPen and Gambling systems. Our UK partnership with VMware hasallowed us to embark on the use of exciting new technologies within the hostingspace and we are delighted by the progress made. Following the appointment of our new marketing Director Karen Johnson we haveembarked on a number of strategic initiatives to align our businessespropositions and revamp our online presences initially at the operating companylevel with re-branding exercises for Fernhart New Media and Blue Sky Hosting andit is our intention to complete this exercise for Netb2b2 plc in the comingperiod. These changes are being supported by a number of outbound marketingprogrammes to support our encouraging sales order book. The Group has sustained its focus on good cost control and has focused effortson its core strengths identified in the internal review. The structuralimprovements made by the Group last year are beginning to pay dividends and weexpect this to continue throughout 2008. ANDREW GANNONGroup Chief Executive31 March 2008 GROUP PROFIT AND LOSS ACCOUNTSix months ended 31 December 2007 Six Months Six Months Year Ended Ended Ended 31.12.2007 31.12.2006 30.06.2007 Unaudited Unaudited Audited Note £000's £000's £000's TURNOVER 3 3,356 3,194 6,657 Cost of sales (1,018) (870) (1,885) ------- ------ -------GROSS PROFIT 2,337 2,324 4,772 ------- ------- -------Administrative expenses pre (2,498) (2,492) (5,167)exceptional itemExceptional Item (37) - (160) ------- ------- -------Administrative expenses (2,535) (2,492) (5,347) ------- ------- -------OPERATING LOSS 3 (198) (168) (575) ------- ------- -------Interest receivable and similar - 1 -incomeInterest payable and similar charges (13) (19) (52) ------- ------- -------LOSS ON ORDINARY ACTIVITIES BEFORETAXATION (211) (186) (396) Tax on loss on ordinary activities 5 - - - ------- ------- -------LOSS FOR THE FINANCIAL PERIOD (211) (186) (396) ======= ======= =======LOSS PER SHARE (PENCE)Ongoing activities 6 (3.40p) (3.07p) (6.53p) ======= ======= ======= GROUP BALANCE SHEET31 December 2007 31.12.2007 31.12.2006 30.06.07 Unaudited Unaudited Audited £000's £000's £000'sFIXED ASSETSIntangible assets 2,278 2,436 2,278Tangible assets 524 563 532 ----- ----- ----- 2,802 2,999 2,810CURRENT ASSETSStocks 75 175 75Debtors 1,272 1,439 1,483Cash at bank 488 270 272 ----- ----- ----- 1,835 1,884 1,830CREDITORS: amounts falling duewithin one yearBank loans and overdraft (495) (169) (206)Trade and other creditors (2,375) (2,664) (2,638) ------- ------- ------- (2,870) (2,833) (2,844) NET CURRENT LIABILITIES (1,035) (949) (1,014) ------- ------- -------CREDITORS: amounts falling dueafter one year - (84) (41) ------- ------- -------TOTAL ASSETS LESS LIABILITIES 1,767 1,966 1,755 ======= ======= ======= CAPITAL AND RESERVESCalled up share capital 856 606 606Share premium 526 553 553Capital redemption reserve 6 6 6Profit and loss account 379 801 590 ------- ------- -------EQUITY SHAREHOLDERS' FUNDS 1,767 1,966 1,755 ======= ======= ======= GROUP CASH FLOW STATEMENTSix months ended 31 December 2007 Six Months Six Months Year Ended Ended Ended 31.12.2007 31.12.2006 30.06.2007 Note Unaudited Unaudited Audited £000's £000's £000's Net cash inflow/(outflow) from 7 25 196 465operating activities Returns on investments and servicing 8 (13) (18) (52)of finance Taxation - - - Capital expenditure 8 (80) (72) (162) Acquisitions 8 - - - ----- ----- -----Net cash inflow/(outflow) before (68) 106 251financing Financing 8 308 15 (165) ------ ----- -----Increase in cash in the period 240 121 86 ====== ===== =====Reconciliation of net cash flow tomovement in net funds Increase in cash in the period 9 240 121 86 Increase in debt and lease financing 9 (85) (19) 165 ------ ------ -----Movement in net funds in the period 9 155 102 251 Net debt at start of period 9 (278) (529) (529) ------ ------ ------Net debt at end of period 9 (123) (427) (278) ====== ====== ====== NOTES TO THE ACCOUNTSSix months ended 31 December 2007 1. FINANCIAL INFORMATION The financial information is for the six months ended 31 December 2007 and isneither audited nor reviewed as defined by APB Bulletin 1999/4. The balancesheet and profit and loss account do not constitute statutory statements withinthe meaning of section 240 Companies Act 1985. The results for the year ended 30June 2007 have been extracted from the financial statements of the group onwhich an unqualified report from the auditors has been received and which havebeen filed with the registrar of Companies. 2. BASIS OF PREPERATION The interim financial information has been prepared on the basis of theaccounting policies adopted for the audited accounts for the year ended 30 June2007 under the historical cost convention and in accordance with applicableaccounting standards. 3. SEGMENTAL INFORMATION The Group operates in the UK and the whole of its turnover and profit relate tocontinuing activities and to the UK market. Six months Six months Year Ended Ended Ended 31.12.2007 31.12.2006 30.06.2007 Unaudited Unaudited Audited £000's £000's £000'sTurnoverInternet services 1,898 1,619 3,525 Publishing and Digital Communication 747 843 1,632Services Specialist Hosting 438 403 770 Media and interactive technology 273 329 730 ------ ----- -----Group 3,356 3,194 6,657 Profit/(loss) before interest and taxInternet services 95 34 80 Publishing and Digital Communication 13 (4) 20Services Specialist Hosting 79 86 198 Media and interactive technology (39) 10 (30) Central and other costs (309) (294) (683) Exceptional costs (37) - (160) ------- ----- ------Group (198) (168) (575) ------- ----- ------4. GOODWILL The board has assessed each subsidiary with reference to its durability, abilityto sustain future long term profitability and assessed ability to maintainmarket position. Based on this assessment the board is of the opinion that thethree goodwill elements have indefinite economic lives. The board has carriedout impairment reviews on these goodwill elements and have concluded that theircurrent recoverable amounts are in excess of their carrying values. 5. TAXATION No liability to UK Corporation tax arose on ordinary activities for the periodowing to trade losses brought forward from previous periods. 6. LOSS PER ORDINARY SHARE Basic loss per share is calculated by dividing the loss attributable to ordinaryshareholders by the weighted average number of ordinary shares during the year.The diluted loss per share is the same as the actual loss per share. Six Months Six Months Year Ended Ended Ended 31.12.2007 31.12.2006 30.06.2007 Unaudited Unaudited Audited £000's £000's £000's Basic earnings attributable to ordinary (211) (186) (396)shareholders: ========== ========= ========= Weighted average number of ordinary 6,197,439 6,061,569 6,061,569shares ========== ========= ========= Loss per share: (3.40p) (3.07p) (6.53p) ========== ========= ========= 7. RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH OUTFLOW FROM OPERATINGACTIVITIES Six Months Six Months Year Ended Ended Ended 31.12.2007 31.12.2006 30.06.2007 Unaudited Unaudited Audited £000's £000's £000's Operating loss (198) (168) (575)Exceptional item - - 160Depreciation charges 88 86 170Loss on disposal/write off of intangible fixed - - 29assets(Increase)/decrease in stocks - (33) 66Decrease/(increase) in debtors 214 (41) (85)Increase/(decrease) in creditors (79) 352 700 ----- ----- -----Net cash inflow/ (outflow) from operating 25 196 465activities ===== ===== ===== 8. ANALYSIS OF CASH FLOWS Six Months Six Months Year Ended Ended Ended 31.12.2007 31.12.2006 30.06.2007 Unaudited Unaudited Audited £000's £000's £000'sReturns on investments and servicing of financeInterest received - 1 -Interest paid (8) (12) (20)Interest element of hire purchase payments (5) (7) (32) ---- ----- -----Net cash outflow for returns on investments andservicing of finance (13) (18) (52) ==== ===== =====Capital expenditureSale of tangible fixed assets - - -Purchase of tangible fixed assets (80) (72) (162) ---- ----- -----Net cash outflow for capital expenditure (80) (72) (162) ==== ===== =====AcquisitionsPurchase of subsidiary undertaking - - - ---- ----- -----Net cash outflow for acquisitions - - - ==== ===== =====FinancingIssue of ordinary share capital 250 - -Share Premium (27) - -Increase in bank loans 120 43 33Bank loans repaid - (176)Increase in hire purchase - 102Capital element of hire purchase payments (35) (28) (124) ---- ---- -----Net cash inflow/ (outflow) from financing 308 15 (165) ==== ==== ===== 9. ANALYSIS OF CHANGES IN NET (DEBT)/ FUNDS At 31 December At 1 July 2007 Cash flow 2007Net cash: £000's £000's £000'sCash at bank and in hand 272 216 488Bank overdrafts (206) 24 (182) ------ ---- ----- 66 240 306 ------ ---- -----Debt:Bank Loan (invoice discounting) (193) (120) (313)Hire purchase agreements (151) 35 (116) ------ ----- ------Total (278) 155 (123) ====== ===== ====== 10. COPIES OF THE INTERIM REPORT Copies of the interim report are available from www.netb2b2.com or the companysecretary at Netb2b2 Plc, Central House, 142 Central Street, London, EC1V 8AR. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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