Interim Results

Media Corporation PLC Media Corporation plc: Interim results for the six months ended 31 March 2007 The Board of Media Corporation plc, a leading internet media and advertising company focused on internet search, publishing and media sales, is pleased to announce 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 the damaging affect the adverse gaming legislation has had on our advertising customer base. The Group has remained profitable and, leveraging in-house expertise continues its strategy of diversification into other lucrative advertising markets and value enhancing acquisitions.' 'The first six months of the financial year has been a period of rapid change and inward investment giving the Group a platform for rapid growth and ongoing business development'. Contact -0- *T Media 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 31 March 2007. Financial review The Group's results for the six months to 31 March 2007 were materially impacted by changes in gaming legislation which affected the marketing budgets of our advertisers. 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 Group recorded a profit before tax of £0.2 million (2006: £1.3 million). Earnings per share 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 of significant investment which has created a platform for growth. The business now has a new server infrastructure which has been fully installed in a state of the art data center in central London and has recently expanded its sales team to gain market share in the fast growing internet advertising market. The increased advertising delivery capabilities and additional sales staff should allow this business to grow substantially. The business now has relationships with over 750 websites giving a reach of over thirty million UK consumers. Eyeconomy has recently run significant online advertising campaigns for large corporate clients including Dell, AOL and American Express. www.eyeconomy.co.uk Search Technology As previously announced reduced marketing budgets from key advertisers in the gaming industry have materially affected search revenues in the financial period. These revenues have now started to increase as we have implemented product improvements and technical changes during the first six months 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 the financial period and has recruited a senior production team specialising in the design, development and search engine optimisation of our website portfolio. The Group has recently made two acquisitions, being Result Online Limited, the owner of leading financial portal www.creditcardexpert.co.uk and www.broadbandwise.co.uk and Flight Comparison Limited the owner of www.flightcomparison.co.uk. The Board believes there is significant value in its internet real estate and is currently re-developing its entire web portfolio with a view to maximising its revenue potential and value. During the next few months all of the Group's flagship websites including www.gambling.com, www.casino.co.uk, www.onthebox.com will be re-launched as we seek to improve revenues from these sites and greatly improve the product offering. In addition, the Group has a portfolio of top-tier internet domain names that will be developed into businesses during the coming months. www.mediacorpplc.com Board changes Paul Tuson, has resigned from his position as Group Finance Director with effect from 1 June 2007 and the Board would like to thank Paul for his significant contribution as a senior executive of the Group. The Board is pleased to announce the appointment of Nilesh Jagatia as Finance Director. Whilst initially not a Board appointment, it is the intention of the Directors to appoint a Finance Director to the Board in due course. Nilesh is a qualified accountant with over 15 years experience including senior financial roles with divisions of both Universal Music and Sanctuary Records. Mike Hawkes was appointed as non-executive Director in November 2006; he has held senior finance roles with a number of successful technology companies including finance director of Northern Europe for the internet marketing company Overture Services Limited, a subsidiary of Yahoo! In addition, the Directors intend to strengthen its Board with the appointment of up to a further two non-executive directors. Trading outlook The Board is pleased with the performance of its publishing business, which is continuing to deliver organic growth and profits. In addition, the media division is benefiting from the technical investment and an enlarged sales function and the Board is optimistic about its outlook for the remainder of the financial year. Revenues from the gaming vertical of the search marketing business have stabilised and are now growing once more and the Board expects growth from other vertical markets in the second half of the financial year. The Board continues to evaluate a number of earnings enhancing acquisitions that will either extend the Group's geographical reach or presence in differing vertical markets. The Group continues to be profitable and with continued diversification and growth in its media and publishing businesses the outlook for the Group remains positive. -0- *T Jason Drummond Chairman *T -0- *T Consolidated profit and loss account for 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 11,901 Cost 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 losses for 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 2,451 Prior year adjustment - - (154) Currency translation differences (273) - (311) ------------------- ----------- ----------- Total recognised gains and losses relating to the period (53) 1,301 1,986 =================== =========== =========== Consolidated balance sheet as at 31 March 2007 As at 31 As at 31 As at 30 March March September 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Fixed assets Intangible assets 12,426 11,563 11,422 Tangible assets 533 290 381 ------------------- ----------- ----------- 12,959 11,853 11,803 Current assets Debtors 851 867 808 Cash at bank and in hand 3,980 3,886 5,253 ------------------- ----------- ----------- 4,831 4,753 6,061 Creditors: 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 reserves Called up share capital 4,764 4,614 4,764 Share premium account 12,917 12,766 12,917 Other reserve 1,422 1,422 1,422 Profit 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 statements for 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 finance Interest received 95 65 154 Capital expenditure Payments to acquire tangible fixed assets (225) (96) (246) Acquisitions and disposals Acquisition 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 Financing Issue 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 audited and do not constitute statutory accounts in accordance with section 240 of the Companies Act 1985. The 2006 annual report and accounts of Media Corporation plc received an unqualified auditors' report and has been filed with the Registrar of Companies. The financial information has been prepared in accordance with applicable accounting standards and under the historical cost accounting convention. Accounting policies consistent with those applied in the financial statements for the year ended 30 September 2006 have been used in preparing the unaudited interim results for the six months ended 31 March 2007. 2. Segmental analyses -0- *T Six months Six months Year ended 31 ended 31 ended 30 March March September 2007 2006 2006 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Turnover analysis by business segment: Search 692 1,618 3,213 Media 747 739 1,529 Publishing 4,379 2,963 7,159 ----------- ----------- --------- 5,836 5,320 11,901 =========== =========== ========= Operating profit (loss) by business segment: Search 23 1,094 2,020 Media 5 35 15 Publishing 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 -0- *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 291,027 275,464 280,054 Dilution 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 0.88p Diluted earnings per share 0.08p 0.45p 0.87p *T Basic earnings per share are calculated on the results attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. Diluted earnings per share calculations reflect the dilutive effect of unexercised warrants. The dilution effect of warrants on the weighted average number of shares in issue reflects those warrants with an exercise price lower than 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 operating activities -0- *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 2,300 Depreciation 87 59 118 Decrease in debtors 63 134 193 Decrease 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 -0- *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 2,444 Opening 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 may also be obtained from the Group´s registered office: Media Corporation plc, Ground Floor, 77 Queen Victoria Street, London EC4V 4AY.

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