24th Sep 2007 07:01
Adventis Group PLC24 September 2007 For release 7.00am September 24, 2007 ADVENTIS GROUP PLC Interim Results Adventis Group plc, the specialist multi-media marketing and advertising agency, today announces its results for the half-year ended 30 June 2007. Highlights: • Turnover up by 52% to £24.9m (2006: £16.4m) • Profit before tax up 57% at £1.255m (2006: £0.799m) • Basic EPS up by 37% to 2.2p (2006 - 1.6p) • Interim dividend per share up 5% at 0.23p (2006 - 0.22p) • Acquisition of Leapfrog Medical Communications Ltd completed in January 2007 • Major client wins include: Standard Life, Barclays, HBOS, Man Investments, Premier Resorts, Wandsworth Riverside Quarter, Weston Homes, Savills International (online media activity), Acorn Property Group, Partnership Assurance, Marketing Hub, Insuremore, Roche, Novartis, Pfizer, Schering Plough, Serono and GlaxoSmithKline • Strong balance sheet to support further acquisitions Peter Mitchell, Chairman of Adventis Group plc, commented: "The first six months of 2007 have seen the continued success of the Adventisstrategy of jointly building marketing communications and sector specificknowledge, with the latter contained within a regulatory framework. Our pre-taxprofit-to-revenue margin exceeds 20% which is a rare achievement amongstmarketing services businesses. We continue to focus on property, financial services and healthcare; sectorsthat demand high skill sets, a regulatory understanding and generate aconsistent and profitable income. Our M&A activities resulted in the addition ofLeapfrog Medical Communications in January, which has added the important areaof medical communications services to our healthcare group and is a significantaddition in both strategic and profit terms. Our first half year results have exceeded our targets and the outcome for theremainder of the year looks encouraging." - ENDS - For further information, contact: Adventis Group plcCharles Phillpot, Chief Executive Officer 020 7034 4750Peter Linnell, Finance Director 020 7034 4795 Arbuthnot Securities (Nominated Adviser)Tom Griffiths 0207 012 2129 Adventis PRChris Steele / Tarquin Edwards 020 7034 4759 / 58 Chairman's Statement The first six months of 2007 have seen the continued success of the Adventisstrategy of jointly building marketing communications and sector specificknowledge, with the latter contained within a regulatory framework. Our pre-tax profit-to-revenue margin exceeds 20% which is a rare achievementamongst marketing services businesses. We continue to focus on property,financial services and healthcare; sectors that demand high skill sets, aregulatory understanding and generate a consistent and profitable income. Our M&A activities resulted in the addition of Leapfrog Medical Communicationsin January, which has added the important area of medical communicationsservices to our healthcare group and is a significant addition in both strategicand profit terms. Our first half year results have exceeded our targets and the outcome for theremainder of the year looks encouraging. Peter Mitchell, Non-Executive Chairman 24 September 2007 Chief Executive Officer's Review Trading Update I am pleased to report a strong set of results for the half year ended 30 June2007, with record levels of billings, revenue and profits, both organically andthrough acquisitions. Group billings of £24.9m were up 52% (2006: £16.4m)generating revenues of £5.7m up 46% (2006: £3.9m) and pre-tax profits of £1.255mup 57% (2006: £0.799m). This continues our unbroken record of significantlyincreased billings and profits every period since the Company floated in 2004and the Company has continued to benefit from healthy margins and strong cashflow. The earnings per share rose by 37% for January - June 2007 to 2.2p compared with1.6p for the previous half year. Dividend The Board is recommending an increase of 5% in the interim dividend at 0.23p(2006 0.22p) per share, payable to those shareholders on the register on 5thOctober 2007 for payment on 22nd October 2007. Financial Position Net cash balance on 30 June 2007 was £2.7m and the current balance is in excessof £4m, indicating our continued ability to translate revenue growth into cash.The Company currently has no borrowings having financed its acquisition strategyfrom its own resources. As a result we have a very strong balance sheet whichwill help us fund future acquisitions. Market Overview Demand for marketing services continues to be healthy and our core sectors ofoperation, property, financial services and healthcare have enjoyed stronggrowth. Whilst the provision of such services is always competitive we have beenable to manage pressure on margins and enjoyed a return in excess of 20% for pretax profit as a percentage of revenue, which is exceptionally high for ourindustry. Although the group grew by over 50% during this period there is stillconsiderable potential for further growth in these chosen sectors. Efficient service provision in these areas relies on strong divisionalmanagement, recruiting and maintaining teams that win and retain clients. I amvery glad to see our strength in this area grow as the group itself develops.Our spread of sectors does offer some level of insulation from the ebb and flowthat all market's experience and I am confident we have built a strong businessbase. Business Strategy The group was able to exploit its growing critical mass in 2007 and increasedits market share for our media services in the residential and commercialproperty, financial services and healthcare sectors. We consolidated all threeof our healthcare operations into one prime office building in Beaconsfield andclose to the M40/M25 intersection, an ideal location and environment for such abusiness. We further consolidated our creative resources to offer enhancedcareer opportunities for the team and to enable us to make a more variedoffering to our clients. Our financial systems have also been overhauled byPeter Linnell, our new Finance Director, and further efficiencies have beenidentified. Acquisitions and Joint Ventures In January 2007 the Group announced the acquisition of Leapfrog MedicalCommunications Ltd, a medical education specialist, with unrivalled healthcareclients. As part of our enlarged healthcare group, Leapfrog have since wonbusiness from international customers, such as Roche, Novartis, Pfizer, ScheringPlough, Serono and GlaxoSmithKline. Operational Review The following is a summary of activity by business sector for the six monthsended 30 June 2007: Residential Property Marketing Sector Our residential property marketing sector continues to service a broad base ofclients including Savills, Galliard Homes, Places for People and Delph. Itprovides a broad range of consultancy and creative services across the industryand has continued to gain new clients and grow its creative business withencouraging margins. Commercial Property Marketing Sector Our commercial property marketing sector won several major long-term projects in2006/7 such as Howard Holdings, ECF Regeneration, Standard Life, McKaySecurities, Develica and Exemplar. These projects continue to give the businessa positive order book for the current year. Financial Services Adventis NMG Ltd, which specialises in financial services continued to tradeprofitably for the period. A series of projects have been won recently forclients such as LexisNexis, Foresters Friendly Society, Equity Insurance Group,Just Retirement, Barclays, HBOS and Man Investments. The strengthening of theteam and further building of Adventis NMG's digital offering gives the businessexcellent prospects for further growth this year. Healthcare Sector The combined group of Affiniti (UK) Ltd, Roundhouse Advertising Ltd and LeapfrogMedical Communications Ltd are in the top five UK Healthcare MarketingCompanies. The addition of a medical communications offering, through theacquisition of Leapfrog, has been an ideal strategic fit and has provided theenhanced group with significant business opportunities. In addition to addingthe Leapfrog clients previously mentioned, we have also won new business fromFerring, Merck Serono, Roche and Allergan. Media Planning and Buying Sector Our three media planning and buying companies, Premium Media Ltd, Adgenda MediaLtd and Adventis Coltman Ltd., are a significant force in the media sector. Theyhave full NPA (Newspapers Publishing Association) recognition and enjoy veryfavourable commercial terms with media owners. New business wins in 2007included: Premier Resorts, Wandsworth Riverside Quarter, Newhall Project, WestonHomes, Savills International (online media activity), Sherwoods PropertyConsultants, Acorn Property Group, Partnership Assurance, Marketing Hub andInsuremore Outlook The strength of the first half year has carried on into the second half and weare on course to meet market expectations. We continue to actively pursuestrategic acquisitions to add to the group and this activity will continue inthe second half. I expect that the benefits of the enlarged healthcare groupwill start to be felt over the next six-to-twelve months and we will look toidentify and exploit all areas of synergy. We are confident that our strong cash position, profit performance and balancesheet will enable the group to maintain its growth momentum and build its marketshare, while ensuring our profit record is sustained. Charles Phillpot Chief Executive Officer Adventis Group plcGroup income statement Unaudited Unaudited Audited 6 months to 6 months to 12 months to 30 June 2007 30 June 2006 31 December 2006 Notes £'000 £'000 £'000 -------------------------------------- TurnoverContinuing operations 23,785 14,094 27,973Acquisitions 1,130 2,340 7,556 -------------------------------------- 24,915 16,434 35,529 --------------------------------------Operating profitContinuing operations 1,025 601 1,221Acquisitions 122 133 451 --------------------------------------Profit on ordinary activities before 1,147 734 1,672interest Net interest 115 65 130receivableFinance costs -7 - -2 --------------------------------------Profit on ordinary activities before 1,255 799 1,800taxation Taxation on profit on ordinary -376 -240 -467activities --------------------------------------Profit for the period 878 559 1,333 --------------------------------------Attributable to:Equity holders of the parent 869 558 1,316Minority interest 9 1 17 --------------------------------------Profit for the period 878 559 1,333 --------------------------------------Earnings per share ("EPS") 3 Basic earnings per shareAverage number of shares in issue 39,576,955 34,720,045 35,007,794EPS (pence) 2.20 1.61 3.76Fully diluted earnings per shareFully diluted average number of shares in 42,317,537 35,107,236 36,066,998issueEPS (pence) 2.05 1.59 3.65 Adventis Group Plc Unaudited Unaudited AuditedGroup Balance Sheet 30 June 30 June 31 December 2007 2006 2006 Notes £'000 £'000 £'000ASSETSNon-current assetsProperty, plant and 575 303 259equipmentGoodwill and other 10,809 9,638 8,273intangible assetsDeferred tax asset 164 181 164 ---------------------------------- 11,548 10,122 8,696Current assetsWork in progress 335 252 293Trade and other receivables 8,337 7,527 6,590Cash and cash equivalents 2,689 1,363 2,464 ---------------------------------- 11,362 9,142 9,347 ----------------------------------Total assets 22,910 19,264 18,043 ---------------------------------- EQUITYCapital and reservesShare capital 2 100 88 96Share premium account 5,508 3,849 4,789Treasury stock 10 0 0Capital redemption reserve 200 200 200Other reserves 20 20 20Share based payments reserve 53 23 43Retained earnings 3,722 2,316 3,036 ---------------------------------- 9,613 6,496 8,184Minority interest 27 48 18 ----------------------------------Total equity 9,640 6,544 8,202 ----------------------------------LIABILITIESNon-current liabilitiesObligations under finance leases - due inmore thanone year 0 0 7Provisions for other liabilities and 4 6 4chargesDeferred consideration 3,615 4,022 3,400 3,619 4,028 3,411Current liabilitiesTrade and other payables 5,988 5,618 4,371Current income tax 1,462 267 572liabilitiesObligations under finance leases - due inless thanone year 4 0 5Provisions for other liabilities and 0 34 0chargesDeferred consideration 2,196 2,773 1,482 ---------------------------------- 9,650 8,692 6,430 ----------------------------------Total liabilities 13,270 12,720 9,841 ----------------------------------Total equity and liabilities 22,910 19,264 18,043 ---------------------------------- Adventis Group plcGroup statement of changes in equity Share Share capital premium Capital Minority Retained Shareholder's & treasury account reserves Interests earnings funds - equity £'000 £'000 £'000 £'000 £'000 £'000 -----------------------------------------------------------Balance at 1 January 2006 81 2,862 220 47 1,915 5,125 Profit for the period - - - - 559 559 Dividends - - - - -142 -142Minority interest - - - 1 -1 0 Issue of share capital 7 987 - - - 994Share based payments - - - - 8 8 -----------------------------------------------------------Balance at 30 June 2006 88 3,849 220 48 2,339 6,544 Profit for the period - - - - 774 774 Dividends - - - - -76 -76Minority interest - - - 16 -16 0Adjustment - - - -46 46 0 Issue of share capital 8 940 - - - 948Share based payments - - - - 12 12 -----------------------------------------------------------Balance at 31 December 96 4,789 220 18 3,079 8,2022006 Profit for the period - - - - 878 878 Dividends - - - - -183 -183Minority interest - - - 9 -9 0 Issue of share capital 14 719 - - - 733Share based payments - - - - 10 10 -----------------------------------------------------------Balance at 30 June 2007 110 5,508 220 27 3,775 9,640 ----------------------------------------------------------- Adventis Group plcGroup cash flow statement Unaudited Unaudited Audited 6 months 6 months 12 months to to to 30 June 30 June 31 2007 2006 December 2006 Notes £'000 £'000 £'000 -------------------------------Cash generated from operating activities 1,617 -139 872Income tax paid -129 -122 -436Interest paid -6 -5 -2 -------------------------------Net cash from/(used in) operating 1,482 -266 434activities Cash flows from investing activitiesInterest received 115 65 130Purchase of property, plant & equipment -220 -125 -128Purchase of other 0 -143 -125investmentsAcquisition of subsidiaries 4 -1,005 -679 -1,230 -------------------------------Net cash used in investment activities -1,110 -882 -1,353 Cash flows from financing activitiesDividends paid -183 -142 -218Repayments of obligations under finance -9 -2 -3leasesProceeds of issuing share capital 45 70 1,019 -------------------------------Net cash (used in)/from financing -147 -74 798activities -------------------------------Net increase/(decrease) in cash and cash 225 -1,222 -121equivalents Cash and cash equivalents at the beginning of theperiod 2,464 2,585 2,585 -------------------------------Cash and cash equivalents at the end of the period 2,689 1,363 2,464 ------------------------------- Adventis Group Plc Notes to the accounts Note 1 Principal accounting policies These unaudited interim consolidated financial statements do not constitutestatutory accounts within the meaning of s240 of the Companies Act 1985. Thestatutory accounts for the year ended 31 December 2006 (from which comparativefigures have been extracted) on which the auditors gave an unqualified auditreport, have been filed with the Registrar of Companies. The Company has applied IFRS for the reporting period and all prior periodswhere figures have been included for comparison purposes. The financialstatements are prepared under the historical cost convention and, in conformitywith generally accepted accounting principles require the use of estimates andassumptions that affect the reported amounts of assets and liabilities at thedate of the financial statements and the reported amounts of revenues andexpenses during the reporting period. Although these estimates are based onmanagement's best knowledge of the amount, event or actions, actual resultsultimately may differ from those of estimates. Full details of the Company's accounting policies can be found in the 2006Annual Report and Accounts published in April 2007 and available on theCompany's website at www.adventis.co.uk . Note 2 Share capital 30 June 30 June 31 December 2007 2006 2006 No. shares No. shares No. shares AuthorisedOrdinary Shares of 0.25pence each 60,000,000 60,000,000 60,000,000 Allotted, called up and fully paidOrdinary Shares of 0.25pence each 39,869,260 35,016,846 38,283,646 In accordance with the terms of the relevant share sales and purchaseagreements, the following shares were issued during the six month ended 30 June2007: • Affiniti (UK) Limited 135,570 fully paid ordinary shares • Leapfrog Medical Communications Limited 975,169 fully paid ordinary shares • Adventis Coltman Limited 316,980 fully paid ordinary shares were issued In addition 157,895 fully paid shares were issued as two employees exercisedtheir share options. As a result the nominal value of issued share capital increased £3,961 while£720,305 was added to the share premium account. The employee benefit trust is the beneficial owner of 25,180 fully paid ordinaryshares. Note 3 Earnings per share The number of shares used in the calculation of the earnings per share is shownat the foot of the income statement. The EPS has moved from 1.61p to 2.20p whilst the fully diluted EPS has movedfrom 1.59p to 2.05p. Note 4 Acquisition of Leapfrog Medical Communications Limited On 5th February 2007 the Company acquired 100% of the issued share capital ofLeapfrog Medical Communications Limited for cash and shares totalling: £'000 Property plant and equipment 45Stocks 137Trade Debtors 577Bank and cash balances 298Tax liabilities (219)Trade and other payables (513) ------ 325Goodwill 2,337 ------Total Consideration 2,662 ------Satisfied byCash 931Issue of Adventis Group ordinary share capital 432Deferred consideration 720Contingent consideration 579 ------ 2,662 ------Net cash (outflow) arising on (633)acquisitionCash consideration 931Bank balances and cash 298acquired In addition, payments of £75,241 were made for the next instalment of deferredconsideration due for the acquisition of Affiniti (UK) Ltd acquired in January2005, and the first deferred consideration payment of £120,000 and earn-outpayment of £175,662 due for the acquisition of Adventis Coltman Limited acquiredin May 2006. Note 5 Employee Benefit Trust In accordance with the Urgent Issues Task Force (UITF) Abstract 32 "EmployeeBenefit Trusts and other intermediate payment arrangement", the Company includesthe assets and liabilities of that trust within its balance sheet. In the eventof the winding up of the Company, neither the shareholders nor the creditorswould be entitled to the assets of the employee benefit trust. Note 6 Goodwill & business combinations Goodwill arising on consolidation represents the excess of the cost ofacquisition over the fair value of the identifiable assets, liabilities andcontingent liabilities of a subsidiary, associate or jointly controlled entityat the date of acquisition. Goodwill is recognised as an asset and is tested forimpairment annually, or on such occasions that events or changes incircumstances indicate that its value might be impaired. The acquisition of subsidiaries is accounted for using the purchase method. Thecost of the acquisition is measured at the aggregate of the fair values, at theacquisition date, of assets given, liabilities incurred or assumed, and equityinstruments issued by the group, plus any costs directly attributable to theacquisition. The acquiree's identifiable assets, liabilities and contingentliabilities are recognised at their fair value at the acquisition date, exceptfor non-current assets that are held for resale, which are recognised andmeasured at fair value less costs to sell. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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