25th Jul 2008 07:00
For immediate release
25 July 2008
Hecta Media Inc
("Hecta Media" or "the Company")
Unaudited Interim Results for the period ended
Hecta Media Inc (AIM: HCTA), the web consolidator, today announces its interim unaudited accounts for the period beginning with its incorporation and ended 30th April 2008.
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report to shareholders the first financial statements for the period ended 30th April 2008 since the Company's incorporation on 22nd June 2007 and its admission onto AIM on 14th November 2007.
Investment strategy
As set out in our admission document, our investment strategy remains focused on primarily investing in profitable websites and domain name portfolios - and then better monetising them through the use of click-through advertising programmes and other online advertising-related techniques combined with reduced centralised overheads.
Investment portfolio
During the period under review, as already reported to shareholders on 13th March 2008, Hecta completed its first set of acquisitions - namely, a popular blog, www.tutorialblog.org, and a series of domain portfolios containing approximately 60,000 names, one of which included an option to buy a further two portfolios dependent on the performance of the original. I am pleased to say that given the strong performance of that first portfolio, we subsequently then exercised this option - as announced, post period, on 6th June 2008. As a result, we now continue to closely monitor the assets in our portfolio and look to improve them in line with our investment and development strategy.
Financial review
As can be seen from the figures below, there was little time within the period under review for the revenue potential of the March acquisitions to be have any impact. We are confident, though, that their revenue potential will be better reflected in the next set of figures.
Likewise, operational expenses - including those associated to the AIM admission - were in line with budget for the period standing at £321,000. Consequently, the Company had £2,686,000 in cash or cash equivalents at the period end - it having invested £1,172,000 of the £4,414,949 originally raised pre-IPO via a placing at 4p.
Funding
As already mentioned, the Company successfully raised approximately £4.4 million via a placing at 4p prior to admission. As the Company looks to expand the breadth of its investment portfolio going forward, the Board may contemplate the raising of additional funds in the future.
Outlook
The last year has been an exciting period for Hecta, it having effectively formed the Company, raised initial capital, was admitted to AIM, and made its first series of acquisitions.
Going forward, we foresee equally active times, with the Company looking to potentially expand its portfolio management team so that it can continue growing the value of Hecta's existing portfolio whilst at the same time continuing to make further prudent acquisitions in line with its acquisition strategy. Indeed, we see the tightening economic conditions as potentially aiding us in achieving our acquisition strategy.
Frederick Krueger
Executive Chairman
25 July 2008 HECTA MEDIA INC.
INCOME STATEMENT
FOR THE PERIOD 22 JUNE 2007 TO 30 APRIL 2008
|
Note |
Period 22 June to 30 April 2008 (unaudited) |
||
|
£'000 |
|||
|
Administrative expenses |
(215) |
||
|
Share options expensed |
4 |
(106) |
|
|
Operating (loss) |
(321) |
||
|
Interest receivable |
75 |
||
|
(Loss) on ordinary activities before taxation |
(246) |
||
|
Taxation on loss on ordinary activities |
- |
||
|
(Loss) for the financial period |
(246) |
||
|
Attributable to: |
|||
|
Equity holders of the company |
(246) |
||
|
Basic loss per share expressed in pence |
2 |
(0.26) |
|
HECTA MEDIA INC.
BALANCE SHEET
AS AT 30 APRIL 2008
|
Note |
As at 30 April 2008 (unaudited) |
||
|
£'000 |
|||
|
Non-current assets |
|||
|
Intangible assets |
1,262 |
||
|
Total non-current assets |
1,262 |
||
|
Current assets |
|||
|
Trade and other receivables |
372 |
||
|
Cash and cash equivalents |
2,686 |
||
|
Total current assets |
3,058 |
||
|
Total Assets |
4,320 |
||
|
Current Liabilities |
|||
|
Trade and other payables |
(30) |
||
|
Total Liabilities |
(30) |
||
|
Net Assets |
4,290 |
||
|
Shareholders' equity |
|||
|
Share capital |
3 |
- |
|
|
Share premium account |
4,394 |
||
|
Share based payment reserve |
4 |
142 |
|
|
Retained earnings |
(246) |
||
|
Total Equity |
4,290 |
HECTA MEDIA INC.
CASH FLOW STATEMENT
FOR THE PERIOD 22 JUNE 2007 TO 30 APRIL 2008
|
Period 22 June to 30 April 2008 (unaudited) |
||
|
£'000 |
||
|
Cash outflow from operating activities |
||
|
Operating Loss (Increase) in trade and other receivables Increase in trade and other payables Share options expensed |
(321) (372) 30 106 |
|
|
Net cash outflow from operating activities |
(557) |
|
|
Cash flows from investing activities |
||
|
Interest received |
75 |
|
|
Payments to acquire intangible assets |
(1,247) |
|
|
Net cash outflow from investing activities |
(1,172) |
|
|
Cash flows from financing activities |
||
|
Issue of ordinary share capital |
4,548 |
|
|
Share issue costs |
(133) |
|
|
Net cash inflow from financing activities |
4,415 |
|
|
Net increase in cash and cash equivalents |
2,686 |
|
|
Cash and cash equivalents at beginning of period |
- |
|
|
Cash and cash equivalents at end of period |
2,686 |
|
HECTA MEDIA INC.
STATEMENT OF CHANGES IN EQUITY (Unaudited)
FOR THE PERIOD ENDED 30 APRIL 2008
|
Attributable to equity holders of the company |
|||||
|
Called up share capital |
Share premium reserve |
Share based payment reserve |
Retained earnings |
Total |
|
|
Group |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
£ 000's |
|
As at 22 June 2007 |
- |
- |
- |
||
|
(Loss) for the period |
- |
- |
- |
(246) |
(246) |
|
Total recognised income and expense |
- |
- |
- |
(246) |
(246) |
|
Share capital issued |
- |
4,563 |
- |
- |
4,563 |
|
Cost of share issue |
- |
(169) |
- |
- |
(169) |
|
Share based payments |
- |
- |
142 |
- |
142 |
|
As at 30 April 2008 |
- |
4,394 |
142 |
(246) |
4,290 |
HECTA MEDIA INC.
NOTES TO THE INTERIM FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 APRIL 2008
1. Basis of preparation
The Company was registered as Hecta Media Inc. in British Virgin Islands having been incorporated on 22nd June 2007 under the BVI Business Companies Act 2004 with registered number 1412814.
The financial information has been prepared under the historical cost convention and on a going concern basis and in accordance with International Financial Reporting Standards and IFRIC interpretations adopted for use in the European Union ("IFRS") and those parts of the BVI Business Companies Act applicable to companies reporting under IFRS.
The financial information for the period ended 30 April 2008 has not been audited, but were the subject of an independent review carried out by the Company's auditors, Chapman Davis LLP. reviewed in accordance with the International Standard on Review Engagements 2410 issued by the Auditing Practices Board. The figures were prepared using applicable accounting policies and practices consistent with those to be adopted in the statutory accounts for the period ended 31 October 2008.
The financial information contained in this document does not constitute statutory accounts as defined by Section 240 of the Companies Act 1985 (England & Wales). In the opinion of the directors the financial information for this period fairly presents the financial position, result of operations and cash flows for this period.
This Interim Financial Report was approved by the Board of Directors on 21 July 2008.
Statement of compliance
These condensed interim financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union with the exception of International Accounting Standard ('IAS') 34 - Interim Financial Reporting.. Accordingly the interim financial statements do not include all of the information or disclosures required in the annual financial statements.
Foreign currencies
The functional currency of each entity is determined after consideration of the primary economic environment of the entity. The group's presentational currency is Sterling (£).
2. Loss per share
The calculation of earnings per share is based on the loss after taxation divided by the weighted average number of shares in issue during the period:
|
Period ended 30 April 2008 (unaudited) |
||
|
£'000 |
||
|
Net loss after taxation |
(246) |
|
|
Weighted average number of ordinary shares used in calculating basic earnings per share |
95.82m |
|
|
Basic loss per share (expressed in pence) |
(0.26) pence |
As the inclusion of the potential ordinary shares would result in a decrease in the loss per share they are considered to be anti-dilutive and, as such, a diluted loss per share is not included.
3. Share capital
The authorised share capital of the Company and the called up and fully paid amounts at 30 April 2008 were as follows:
£'000
Authorised
Unlimited ordinary shares of no par value each -
|
Called up, allotted, issued and fully paid |
Number of shares |
Nominal value £'000 |
|
Incorporation |
1 |
- |
|
26 October 2007 for cash at 1p per share |
64,750,000 |
- |
|
26 October 2007 for cash at 4p per share |
10,000,000 |
|
|
29 October 2007 - original incorporation share cancelled |
(1) |
- |
|
31 October 2007 for cash at 4p per share |
87,516,456 |
- |
|
13 March 2008 for non-cash consideration at 4p per share |
368,242 |
- |
|
As at 30 April 2008 |
162,634,698 |
- |
Total share options in issue
During the period ended 30 April 2008, the company granted 19,000,000 options over ordinary shares.
As at 30 April 2008 the unexercised options in issue were;
|
Exercise Price |
Expiry Date |
Options in Issue 30 April 2008 |
|
4p |
13 November 2012 |
19,000,000 |
|
19,000,000 |
The company also granted a warrant to subscribe for 1,622,665, ordinary shares at 4p per share, to Beaumont Cornish Ltd for 5 years from date of admission to AIM of 14 November 2007.
No options or warrants lapsed or were cancelled and no options or warrants were exercised during the period to 30 April 2008.
4. Share based payments
|
Under IFRS 2 'Share Based Payments', the Company determines the fair value of options issued to Directors and Employees as remuneration and recognises the amount as an expense in the income statement with a corresponding increase in equity. |
|||||||||||
|
Name |
Date Granted |
Date Vested |
Number |
Exercise Price (pence) |
Expiry Date |
Fair Value at Grant Date (pence) |
|||||
|
Frederick Krueger |
14/11/2007 |
See 1 below |
5,000,000 |
4 |
13/11/2012 |
2.23 |
|||||
|
David Weill |
14/11/2007 |
See 1 below |
4,000,000 |
4 |
13/11/2012 |
2.23 |
|||||
|
Clark Landry |
14/11/2007 |
See 1 below |
5,000,000 |
4 |
13/11/2012 |
2.23 |
|||||
|
Guy Elliott |
14/11/2007 |
See 1 below |
3,000,000 |
4 |
13/11/2012 |
2.23 |
|||||
|
Michael Mendelson |
14/11/2007 |
See 1 below |
2,000,000 |
4 |
13/11/2012 |
2.23 |
|||||
|
Totals |
19,000,000 |
||||||||||
1. The above share options vest on the 2nd anniversary from the date of grant. The options are exercisable at any time after vesting during the Directors period as an eligible employee until the fifth anniversary of admission.
|
The fair value of the options and warrants granted during the period ended 30 April 2008 amounted to £0.142 million. The assessed fair value at grant date is determined using the Black-Scholes Model that takes into account the exercise price, the term of the option, the share price at grant date, the expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. |
|||
|
The following table lists the inputs to the models used for the period ended 30 April 2008: |
|||
|
14 November 2007 issue - Options |
14 November 2007 issue - Warrants |
||
|
Dividend Yield (%) |
- |
- |
|
|
Expected Volatility (%) |
60.0 |
60.0 |
|
|
Risk-free interest rate (%) |
4.8 |
4.8 |
|
|
Share price at grant date (£) |
0.04 |
0.04 |
|
|
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may, not necessarily be the actual outcome. |
|||
5. Post balance sheet events
On 6 June 2008, the Company announced it has exercised its option to acquire the first of two additional portfolios of domain names for a cash consideration of US$734,825 to be financed from existing cash balances. The domain name portfolio comprises mainly of German and other European parked domain names that receive direct navigation and search traffic which can be monetised through search links to generate click-through advertising revenues.
6. Publication of Non-Statutory Accounts
The financial information set out in this interim report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985.
Copies of this report are available from Hecta Media Inc's registered office and from the company's website at www.hectamedia.com.
ENDS
Further Information:
Hecta Media Inc
Clark Landry (CEO) Tel: + 1 310 570 3820
Beaumont Cornish Limited
Roland Cornish Tel +44 (0) 20 7628 3396
gth media relations
Toby Hall /Christian Pickel Tel: +44 (0) 20 7153 8039/8036
Or visit the group's website at www.hectamedia.com
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MMX.L