Interim Results
Next Fifteen Communications Plc
NEXT FIFTEEN COMMUNICATIONS GROUP PLC
Interim Results for six months to 31 January 2005
RECORD RESULTS FROM GROWING PR GROUP
Next Fifteen Communications Group plc, the leading international technology
public relations group, has today announced its interim results for the six
months to 31 January 2005.
Highlights
-- Operating profit up 30.7% to £1.37 million (£1.05m six months to 31 January
2004)
-- Earnings per share up 16.4% to 1.85p (1.59p six months 31 January 2004)
-- Revenues up 10.3% to £20.4 million (£18.5m six months to 31 January 2004)
-- Interim Dividend increased 10% to 0.33p (0.3p six months to 31 January 2004)
-- Net Cash of £2.7 million
-- Strong performance from the US operations - up 27% in dollar terms
-- China grew threefold with the opening of a further two offices in Hong Kong
and Guangzhou
Will Whitehorn, Chairman of Next Fifteen, said: "Next Fifteen has recorded its
best ever trading performance during this period and thus continues to cement
its position as the leading provider of PR services to the technology industry.
The growth in revenue and profits has been derived from further expansion in key
geographic markets including the US and China. Looking forward we are confident
regarding our prospects for the full year."
Contacts:
David Dewhurst, Finance Director : 07974 161 183
Tim Dyson, CEO: +1 415 350 2801
John Bick - Holborn Public Relations: 020 7929 5599
CHAIRMAN AND CHIEF EXECUTIVE OFFICER'S STATEMENT
Interim Results for six months to 31 January 2005
We are pleased to report that the results for the six months to 31 January 2005
are the best in the company's history. These reflect the continued expansion of
the Group internationally and the addition of significant new clients by the
Group's PR consultancies. Operating profit increased 30.7% to £1.37m; basic
earnings per share increased 16.4% to 1.85p, while revenues increased 10.3% to
£20.4m. During the period the Group continued to maintain a strong cash position
with net cash of £2.7m.
Since the company last updated investors it has seen its North American and
Asian businesses continue to improve. North American operations produced a
strong performance; increasing revenue by 16.2% to £9.6m, despite the impact of
the weak dollar where growth would have been 26.9% at constant dollar levels.
Revenues in Asia also rose strongly by 23.1% to £2.7m. The EMEA region produced
mixed results leaving revenues slightly higher at £10.7m.
Text 100, the Group's largest operating business, continues to expand its
presence in Asia and in particular in China, where it has opened further offices
in Hong Kong and Guangzhou . This operation services clients which include IBM
and ARM. Elsewhere Text 100 has added clients that include: Motorola in North
America, Kiss Technology in Sweden and Citrix Systems in South Africa. Bite
Communications has further expanded its North American business with the
addition of Siebel Systems and AMD as clients. Bite UK has also added Samsung's
Corporate PR work to existing Samsung business, and other new clients CPP and
Star. At the end of the trading period, the Group also embarked on a
reorganisation of its relationship with Microsoft in the UK. Previously this
work had been split between AUGUST.ONE and Inferno, a subsidiary of Bite. After
the restructure is complete Inferno will become a direct subsidiary of the Group
and will manage all PR work performed by the Group for Microsoft in the UK as
well as handling other clients in the technology sector. This will leave
AUGUST.ONE to focus on a client base outside the technology industry. Aside from
this restructuring, AUGUST.ONE added More Thn and The National Physical
Laboratory to its client roster and more work from the DfES, while Inferno added
Computer Associates.
We are encouraged by the continued recovery in technology spending in our key
geographic markets. We believe that the long-term growth prospects of the
world's largest technology companies remain excellent, as the major economies
continue to stabilise. In particular the Group notes the success of businesses
in the wireless networking market and the small and medium enterprise software
market. Also performance is impressive from firms that have established
operations in the BRIC markets and we expect our own growth in India and China
to demonstrate this in the next twelve months.
The Group still has a strong balance sheet with net cash of £2.7m. The total
cash outflow in the first half was a modest £239,000. This follows almost £1m of
capital expenditure predominantly on new office space for the expanding US
businesses, payment of the final dividend from last year of £314,000 and
deferred payments for the acquisition of Applied Communications' assets of
£217,000. During the period net cash inflow from operating activities increased
to £1.6m from £398,000 for the corresponding period. Given that the Group does
not anticipate capital expenditure on the same scale during the second half of
the year we expect to be cash positive for the year as a whole.
The strong cash balance leaves the Group favourably positioned to continue its
growth both organically and through acquisition, the latter being more cost
effective following our recent move to the AIM market.
Looking forward the Group remains confident regarding its prospects for the full
year which ends 31 July 2005.
Will Whitehorn Tim Dyson
Chairman Chief Executive Officer
12 April 2005
NEXT FIFTEEN COMMUNICATIONS GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 31 JANUARY 2005
Six months ended 31 Six months ended 31 Year ended
January 2005 January 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Turnover
Existing operations 2 23,035 19,282 39,105
Acquisitions 2 - 1,772 4,006
---------- --------- --------
Continuing operations 23,035 21,054 43,111
Other external charges (2,606) (2,531) (5,423)
----------- ------------ -------------
Net Revenue 20,429 18,523 37,688
Staff costs 14,183 12,454 26,014
Depreciation 583 643 1,277
Amortisation and amounts written off
intangible assets 100 94 197
Reorganisation costs - 92 447
Other operating charges 4,194 4,193 7,848
---------- --------- --------
(19,060) (17,476) (35,783)
Operating profit
Existing operations 1,369 1,092 1,839
Acquisitions - (45) 66
---------- --------- --------
Continuing operations 1,369 1,047 1,905
Interest receivable and similar
income 25 36 76
Interest payable and similar charges (16) (28) (54)
----------- ------------ -------------
Profit on ordinary activities before
taxation 2 1,378 1,055 1,927
Taxation on profit on ordinary
activities 4 (601) (422) (821)
----------- ------------ -------------
Profit on ordinary activities after
taxation 777 633 1,106
Minority interest (53) (17) (63)
----------- ------------ -------------
Profit attributable to members 724 616 1,043
Equity dividends paid and proposed 5 (131) (122) (434)
----------- ------------ -------------
Retained profit for the period 593 494 609
----------- ------------ -------------
Earnings per share
Basic 6 1.85p 1.59p 2.67p
Diluted 6 1.77p 1.51p 2.51p
Adjusted 6 2.10p 1.92p 3.98p
NEXT FIFTEEN COMMUNICATIONS GROUP PLC
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE SIX MONTHS ENDED 31 JANUARY 2005
Six months ended Six months ended Year ended
31 January 2005 31 January 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Profit attributable to members 724 616 1,043
Currency translation differences on
foreign currency net investments (53) (293) (290)
----------- ------------ -------------
Total recognised gains and losses
related to the period 671 323 753
=========== ============ =============
NEXT FIFTEEN COMMUNICATIONS GROUP PLC
CONSOLIDATED BALANCE SHEET
AS AT 31 JANUARY 2005
31 January 2005 31 January 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Fixed assets
Intangible assets 700 988 826
Tangible assets 2,399 2,146 2,043
----------- ------------ -------------
3,099 3,134 2,869
Current assets
Debtors -due within one year 9,377 8,410 8,561
-due after more than one
year 221 241 278
Cash at bank and in hand 2,723 2,317 2,942
---------- --------- --------
12,321 10,968 11,781
Creditors: amounts falling due
within one year 6,997 5,724 6,598
---------- --------- --------
Net current assets 5,324 5,244 5,183
----------- ------------ -------------
Total assets less current
liabilities 8,423 8,378 8,052
Creditors: amounts falling due after
more than one year 99 20 200
Provision for liabilities and
charges 70 813 196
----------- ------------ -------------
Net assets 2 8,254 7,545 7,656
----------- ------------ -------------
Capital and reserves
Called up share capital 1,123 1,121 1,121
Share premium account 2,723 2,711 2,714
ESOP reserve 7 (1,842) (1,821) (1,851)
Profit and loss account 5,942 5,283 5,402
----------- ------------ -------------
Equity shareholders' funds 7,946 7,294 7,386
Minority interests 308 251 270
----------- ------------ -------------
8,254 7,545 7,656
NEXT FIFTEEN COMMUNICATIONS GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 JANUARY 2005
Six months ended 31 Six months ended 31 Year ended
January 2005 January 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Net cash inflow from operating
activities 8 1,638 398 2,213
Returns on investments and servicing
of finance
Interest received 25 36 76
Interest paid (8) (15) (29)
Minority interest dividend paid (10) (5) (14)
---------- --------- --------
Net cash inflow from returns on
investments and servicing of
finance 7 16 33
Taxation (416) (900) (1,131)
Capital expenditure and financial
investment
Proceeds/(payments) for long-term
deposits 63 (27) (73)
Payments to acquire tangible fixed
assets (967) (257) (837)
Proceeds from sale of tangible fixed
assets 4 14 39
---------- --------- --------
Net cash outflow from capital
expenditure and financial
investment (900) (270) (871)
Acquisitions and disposals
Payments to acquire trade and assets (217) (369) (486)
---------- --------- --------
Net cash outflow from acquisitions
and disposals (217) (369) (486)
Equity dividends paid (314) (274) (391)
----------- ------------ -------------
Net cash outflow before financing (202) (1,399) (633)
Financing
Issue of new share capital 10 - 3
Issue of shares to minorities 2 47 62
Payments to acquire own shares - - (66)
Proceeds from sale of own shares 11 149 186
Capital element of finance lease
rental repayments (56) (130) (226)
Redemption of minorities (4) (12) (12)
---------- --------- --------
Cash (outflow)/inflow from financing (37) 54 (53)
----------- ------------ -------------
Decrease in cash in the period 8 (239) (1,345) (686)
----------- ------------ -------------
NOTES TO THE INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 31 JANUARY 2005
1) FINANCIAL INFORMATION
The financial information is for the six months ended 31 January 2005 and is not
audited as defined by APB Bulletin 1993/1 and 1998/6. The financial information
in this report does not constitute statutory financial statements within the
meaning of section 240 of the Companies Act 1985 (as amended). The results for
the year ended 31 July 2004 have been extracted from the financial statements of
the Group on which an unqualified audit report has been received which did not
contain a statement under section 237 of the Companies Act 1985 and which have
been filed with the Registrar of Companies.
The interim statement is prepared on the basis of the accounting policies as set
out in the last annual report.
2) SEGMENTAL INFORMATION
Analysis of turnover, profit before taxation and net assets by geographic origin
and destination are stated below. The turnover relates to one class of business,
being the provision of public relations services.
Profit before
Turnover taxation Net assets
£'000 £'000 £'000
Six months ended 31 January 2005
Continuing activities:
EMEA* 10,741 516 2,957
North America 9,640 935 3,258
Asia Pacific 2,654 281 1,432
Head office - (354) 607
-------------- -------------- --------------
23,035 1,378 8,254
============== ============== ==============
Year ended 31 July 2004
Continuing activities:
EMEA* 21,248 1,451 3,305
North America 13,357 1,343 2,587
Asia Pacific 4,500 263 1,272
Head office - (1,171) 496
-------------- -------------- --------------
39,105 1,886 7,660
Acquisitions:
EMEA* 174 (28) (28)
North America 3,832 69 24
-------------- -------------- --------------
4,006 41 (4)
-------------- -------------- --------------
43,111 1,927 7,656
============== ============== ==============
Six months ended 31 January 2004
Continuing activities:
EMEA* 10,483 709 3,816
North America 6,643 621 2,442
Asia Pacific 2,156 208 1,422
Head office - (424) (75)
-------------- -------------- --------------
19,282 1,114 7,605
Acquisitions:
EMEA* 116 (25) (25)
North America 1,656 (34) (35)
-------------- -------------- --------------
1,772 (59) (60)
-------------- -------------- --------------
21,054 1,055 7,545
============== ============== ==============
*EMEA means Europe, Middle East and Africa.
The directors consider these regions to be separate geographic markets and the
markets within which the Group operates.
The negative net assets attributable to the head office at 31 January 2004 are
due to the inclusion of the Next Fifteen ESOP, which is treated as a deduction
against shareholders' funds.
3) RECONCILIATION OF PRO FORMA FINANCIAL MEASURES
Six months Six months ended Year ended
ended 31 January 2004 31 July 2004
31 January 2005 (Unaudited) (Audited)
(Unaudited)
£'000 £'000 £'000
Profit on ordinary activities before
taxation 1,378 1,055 1,927
Reorganisation costs - 92 447
Amortisation and amounts written off
intangible assets 100 94 197
--------------- --------------- ---------------
Adjusted profit on ordinary activities
before taxation 1,478 1,241 2,571
=============== =============== ===============
Adjusted profit on ordinary activities before taxation has been presented to
provide additional information which may be useful to the readers of the
statement.
4) TAX ON PROFIT ON ORDINARY ACTIVITIES
The tax charge is based on the forecast effective tax rate for the year and is
higher than a standard UK rate as a result of profits being generated in high
tax regimes and the effect of unrelieved overseas losses.
5) DIVIDENDS
An interim dividend of 0.33p (2004: 0.30p) will be paid on 26 May 2005 to
shareholders on the register of members on 22 April 2005. Shares will go ex
dividend on 20 April 2005. The Employee Share Ownership Trust has waived its
rights to dividends of £18,000 in the six months ended 31 January 2005 (Interim
2004: £17,000; Full year 2004: £63,000).
6) EARNINGS PER SHARE
Six months Six months Year ended 31
ended ended July 2004
31 January 2005 31 January 2004 (Audited)
(Unaudited) (Unaudited)
£'000 £'000 £'000
Basic and diluted earnings attributable
to ordinary shareholders 724 616 1,043
Reorganisation costs after taxation - 64 313
Amortisation of goodwill after taxation 100 65 197
--------------- --------------- ---------------
Adjusted earnings attributable to
ordinary shareholders 824 745 1,553
--------------- --------------- ---------------
Number Number Number
Weighted average number of ordinary
shares 39,178,138 38,844,148 39,021,121
Dilutive share options 1,782,661 2,047,680 2,381,296
--------------- --------------- ---------------
Diluted weighted average number of
ordinary shares 40,960,799 40,891,828 41,402,417
--------------- --------------- ---------------
Basic earnings per share 1.85p 1.59p 2.67p
Diluted earnings per share 1.77p 1.51p 2.51p
Adjusted earnings per share 2.10p 1.92p 3.98p
Adjusted earnings per share has been presented to provide additional information
which may be useful to the readers of the statement.
7) ESOP RESERVE
This reserve represents an investment in own shares and is the cost of shares
held by the Company Employee Share Ownership Plan Trust (ESOP) in the Company.
The market value at 31 January 2005 was £3,404,000.
8) NOTES TO THE CASH FLOW STATEMENT
(1) Reconciliation of operating profit to net cash inflow from operating
activities
Six months ended Six months ended Year ended
31 January 2005 31 January 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Operating profit 1,369 1,047 1,905
Depreciation, amortisation and
amounts written off intangible
assets 683 737 1,474
(Profit)/loss on sale of tangible
fixed assets 4 (3) (2)
Loss on sale of minority interest - 68 59
Increase in debtors (667) (1,115) (1,537)
Increase/(decrease) in creditors 375 (25) 616
Decrease in provisions (126) (311) (302)
------------------ ------------------ ------------------
Net cash inflow from operating
activities 1,638 398 2,213
================== ================== ==================
(2) Reconciliation of net cash flow to movement in net funds
Six months ended Six months ended Year ended
31 January 2005 31 January 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Decrease in cash in the period (239) (1,345) (686)
Cash outflow from decrease in debt
and lease financing 56 130 226
------------------ ------------------ ------------------
Change in net funds resulting from
cashflows (183) (1,215) (460)
Translation differences 21 (146) (179)
------------------ ------------------ ------------------
Movement in net funds in the period (162) (1,361) (639)
Net funds at beginning of period 2,873 3,512 3,512
------------------ ------------------ ------------------
Net funds at period end 2,711 2,151 2,873
================== ================== ==================n and The National
Physical
Laboratory to its client roster and more work from the DfES, while Inferno added
Computer Associates.
We are encouraged by the continued recovery in technology spending in our key
geographic markets. We believe that the long-term growth prospects of the
world's largest technology companies remain excellent, as the major economies
continue to stabilise. In particular the Group notes the success of businesses
in the wireless networking market and the small and medium enterprise software
market. Also performance is impressive from firms that have established
operations in the BRIC markets and we expect our own growth in India and China
to demonstrate this in the next twelve months.
The Group still has a strong balance sheet with net cash of £2.7m. The total
cash outflow in the first half was a modest £239,000. This follows almost £1m of
capital expenditure predominantly on new office space for the expanding US
businesses, payment of the final dividend from last year of £314,000 and
deferred payments for the acquisition of Applied Communications' assets of
£217,000. During the period net cash inflow from operating activities increased
to £1.6m from £398,000 for the corresponding period. Given that the Group does
not anticipate capital expenditure on the same scale during the second half of
the year we expect to be cash positive for the year as a whole.
The strong cash balance leaves the Group favourably positioned to continue its
growth both organically and through acquisition, the latter being more cost
effective following our recent move to the AIM market.
Looking forward the Group remains confident regarding its prospects for the full
year which ends 31 July 2005.
Will Whitehorn Tim Dyson
Chairman Chief Executive Officer
12 April 2005
NEXT FIFTEEN COMMUNICATIONS GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 31 JANUARY 2005
Six months ended 31 Six months ended 31 Year ended
January 2005 January 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Turnover
Existing operations 2 23,035 19,282 39,105
Acquisitions 2 - 1,772 4,006
---------- --------- --------
Continuing operations 23,035 21,054 43,111
Other external charges (2,606) (2,531) (5,423)
----------- ------------ -------------
Net Revenue 20,429 18,523 37,688
Staff costs 14,183 12,454 26,014
Depreciation 583 643 1,277
Amortisation and amounts written off
intangible assets 100 94 197
Reorganisation costs - 92 447
Other operating charges 4,194 4,193 7,848
---------- --------- --------
(19,060) (17,476) (35,783)
Operating profit
Existing operations 1,369 1,092 1,839
Acquisitions - (45) 66
---------- --------- --------
Continuing operations 1,369 1,047 1,905
Interest receivable and similar
income 25 36 76
Interest payable and similar charges (16) (28) (54)
----------- ------------ -------------
Profit on ordinary activities before
taxation 2 1,378 1,055 1,927
Taxation on profit on ordinary
activities 4 (601) (422) (821)
----------- ------------ -------------
Profit on ordinary activities after
taxation 777 633 1,106
Minority interest (53) (17) (63)
----------- ------------ -------------
Profit attributable to members 724 616 1,043
Equity dividends paid and proposed 5 (131) (122) (434)
----------- ------------ -------------
Retained profit for the period 593 494 609
----------- ------------ -------------
Earnings per share
Basic 6 1.85p 1.59p 2.67p
Diluted 6 1.77p 1.51p 2.51p
Adjusted 6 2.10p 1.92p 3.98p
NEXT FIFTEEN COMMUNICATIONS GROUP PLC
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE SIX MONTHS ENDED 31 JANUARY 2005
Six months ended Six months ended Year ended
31 January 2005 31 January 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Profit attributable to members 724 616 1,043
Currency translation differences on
foreign currency net investments (53) (293) (290)
----------- ------------ -------------
Total recognised gains and losses
related to the period 671 323 753
=========== ============ =============
NEXT FIFTEEN COMMUNICATIONS GROUP PLC
CONSOLIDATED BALANCE SHEET
AS AT 31 JANUARY 2005
31 January 2005 31 January 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Fixed assets
Intangible assets 700 988 826
Tangible assets 2,399 2,146 2,043
----------- ------------ -------------
3,099 3,134 2,869
Current assets
Debtors -due within one year 9,377 8,410 8,561
-due after more than one
year 221 241 278
Cash at bank and in hand 2,723 2,317 2,942
---------- --------- --------
12,321 10,968 11,781
Creditors: amounts falling due
within one year 6,997 5,724 6,598
---------- --------- --------
Net current assets 5,324 5,244 5,183
----------- ------------ -------------
Total assets less current
liabilities 8,423 8,378 8,052
Creditors: amounts falling due after
more than one year 99 20 200
Provision for liabilities and
charges 70 813 196
----------- ------------ -------------
Net assets 2 8,254 7,545 7,656
----------- ------------ -------------
Capital and reserves
Called up share capital 1,123 1,121 1,121
Share premium account 2,723 2,711 2,714
ESOP reserve 7 (1,842) (1,821) (1,851)
Profit and loss account 5,942 5,283 5,402
----------- ------------ -------------
Equity shareholders' funds 7,946 7,294 7,386
Minority interests 308 251 270
----------- ------------ -------------
8,254 7,545 7,656
NEXT FIFTEEN COMMUNICATIONS GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 JANUARY 2005
Six months ended 31 Six months ended 31 Year ended
January 2005 January 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
Note £'000 £'000 £'000
Net cash inflow from operating
activities 8 1,638 398 2,213
Returns on investments and servicing
of finance
Interest received 25 36 76
Interest paid (8) (15) (29)
Minority interest dividend paid (10) (5) (14)
---------- --------- --------
Net cash inflow from returns on
investments and servicing of
finance 7 16 33
Taxation (416) (900) (1,131)
Capital expenditure and financial
investment
Proceeds/(payments) for long-term
deposits 63 (27) (73)
Payments to acquire tangible fixed
assets (967) (257) (837)
Proceeds from sale of tangible fixed
assets 4 14 39
---------- --------- --------
Net cash outflow from capital
expenditure and financial
investment (900) (270) (871)
Acquisitions and disposals
Payments to acquire trade and assets (217) (369) (486)
---------- --------- --------
Net cash outflow from acquisitions
and disposals (217) (369) (486)
Equity dividends paid (314) (274) (391)
----------- ------------ -------------
Net cash outflow before financing (202) (1,399) (633)
Financing
Issue of new share capital 10 - 3
Issue of shares to minorities 2 47 62
Payments to acquire own shares - - (66)
Proceeds from sale of own shares 11 149 186
Capital element of finance lease
rental repayments (56) (130) (226)
Redemption of minorities (4) (12) (12)
---------- --------- --------
Cash (outflow)/inflow from financing (37) 54 (53)
----------- ------------ -------------
Decrease in cash in the period 8 (239) (1,345) (686)
----------- ------------ -------------
NOTES TO THE INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 31 JANUARY 2005
1) FINANCIAL INFORMATION
The financial information is for the six months ended 31 January 2005 and is not
audited as defined by APB Bulletin 1993/1 and 1998/6. The financial information
in this report does not constitute statutory financial statements within the
meaning of section 240 of the Companies Act 1985 (as amended). The results for
the year ended 31 July 2004 have been extracted from the financial statements of
the Group on which an unqualified audit report has been received which did not
contain a statement under section 237 of the Companies Act 1985 and which have
been filed with the Registrar of Companies.
The interim statement is prepared on the basis of the accounting policies as set
out in the last annual report.
2) SEGMENTAL INFORMATION
Analysis of turnover, profit before taxation and net assets by geographic origin
and destination are stated below. The turnover relates to one class of business,
being the provision of public relations services.
Profit before
Turnover taxation Net assets
£'000 £'000 £'000
Six months ended 31 January 2005
Continuing activities:
EMEA* 10,741 516 2,957
North America 9,640 935 3,258
Asia Pacific 2,654 281 1,432
Head office - (354) 607
-------------- -------------- --------------
23,035 1,378 8,254
============== ============== ==============
Year ended 31 July 2004
Continuing activities:
EMEA* 21,248 1,451 3,305
North America 13,357 1,343 2,587
Asia Pacific 4,500 263 1,272
Head office - (1,171) 496
-------------- -------------- --------------
39,105 1,886 7,660
Acquisitions:
EMEA* 174 (28) (28)
North America 3,832 69 24
-------------- -------------- --------------
4,006 41 (4)
-------------- -------------- --------------
43,111 1,927 7,656
============== ============== ==============
Six months ended 31 January 2004
Continuing activities:
EMEA* 10,483 709 3,816
North America 6,643 621 2,442
Asia Pacific 2,156 208 1,422
Head office - (424) (75)
-------------- -------------- --------------
19,282 1,114 7,605
Acquisitions:
EMEA* 116 (25) (25)
North America 1,656 (34) (35)
-------------- -------------- --------------
1,772 (59) (60)
-------------- -------------- --------------
21,054 1,055 7,545
============== ============== ==============
*EMEA means Europe, Middle East and Africa.
The directors consider these regions to be separate geographic markets and the
markets within which the Group operates.
The negative net assets attributable to the head office at 31 January 2004 are
due to the inclusion of the Next Fifteen ESOP, which is treated as a deduction
against shareholders' funds.
3) RECONCILIATION OF PRO FORMA FINANCIAL MEASURES
Six months Six months ended Year ended
ended 31 January 2004 31 July 2004
31 January 2005 (Unaudited) (Audited)
(Unaudited)
£'000 £'000 £'000
Profit on ordinary activities before
taxation 1,378 1,055 1,927
Reorganisation costs - 92 447
Amortisation and amounts written off
intangible assets 100 94 197
--------------- --------------- ---------------
Adjusted profit on ordinary activities
before taxation 1,478 1,241 2,571
=============== =============== ===============
Adjusted profit on ordinary activities before taxation has been presented to
provide additional information which may be useful to the readers of the
statement.
4) TAX ON PROFIT ON ORDINARY ACTIVITIES
The tax charge is based on the forecast effective tax rate for the year and is
higher than a standard UK rate as a result of profits being generated in high
tax regimes and the effect of unrelieved overseas losses.
5) DIVIDENDS
An interim dividend of 0.33p (2004: 0.30p) will be paid on 26 May 2005 to
shareholders on the register of members on 22 April 2005. Shares will go ex
dividend on 20 April 2005. The Employee Share Ownership Trust has waived its
rights to dividends of £18,000 in the six months ended 31 January 2005 (Interim
2004: £17,000; Full year 2004: £63,000).
6) EARNINGS PER SHARE
Six months Six months Year ended 31
ended ended July 2004
31 January 2005 31 January 2004 (Audited)
(Unaudited) (Unaudited)
£'000 £'000 £'000
Basic and diluted earnings attributable
to ordinary shareholders 724 616 1,043
Reorganisation costs after taxation - 64 313
Amortisation of goodwill after taxation 100 65 197
--------------- --------------- ---------------
Adjusted earnings attributable to
ordinary shareholders 824 745 1,553
--------------- --------------- ---------------
Number Number Number
Weighted average number of ordinary
shares 39,178,138 38,844,148 39,021,121
Dilutive share options 1,782,661 2,047,680 2,381,296
--------------- --------------- ---------------
Diluted weighted average number of
ordinary shares 40,960,799 40,891,828 41,402,417
--------------- --------------- ---------------
Basic earnings per share 1.85p 1.59p 2.67p
Diluted earnings per share 1.77p 1.51p 2.51p
Adjusted earnings per share 2.10p 1.92p 3.98p
Adjusted earnings per share has been presented to provide additional information
which may be useful to the readers of the statement.
7) ESOP RESERVE
This reserve represents an investment in own shares and is the cost of shares
held by the Company Employee Share Ownership Plan Trust (ESOP) in the Company.
The market value at 31 January 2005 was £3,404,000.
8) NOTES TO THE CASH FLOW STATEMENT
(1) Reconciliation of operating profit to net cash inflow from operating
activities
Six months ended Six months ended Year ended
31 January 2005 31 January 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Operating profit 1,369 1,047 1,905
Depreciation, amortisation and
amounts written off intangible
assets 683 737 1,474
(Profit)/loss on sale of tangible
fixed assets 4 (3) (2)
Loss on sale of minority interest - 68 59
Increase in debtors (667) (1,115) (1,537)
Increase/(decrease) in creditors 375 (25) 616
Decrease in provisions (126) (311) (302)
------------------ ------------------ ------------------
Net cash inflow from operating
activities 1,638 398 2,213
================== ================== ==================
(2) Reconciliation of net cash flow to movement in net funds
Six months ended Six months ended Year ended
31 January 2005 31 January 2004 31 July 2004
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Decrease in cash in the period (239) (1,345) (686)
Cash outflow from decrease in debt
and lease financing 56 130 226
------------------ ------------------ ------------------
Change in net funds resulting from
cashflows (183) (1,215) (460)
Translation differences 21 (146) (179)
------------------ ------------------ ------------------
Movement in net funds in the period (162) (1,361) (639)
Net funds at beginning of period 2,873 3,512 3,512
------------------ ------------------ ------------------
Net funds at period end 2,711 2,151 2,873
================== ================== ==================
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