Interim Results

Thomson Intermedia PLC 09 September 2002 Thomson Intermedia PLC('Thomson' or the 'Company') Interim results for the six months ended 31 July, 2002 Chairman's Statement We are pleased to present our results for the 6 month period ended 31 July, 2002 during which time we have made good progress in a number of areas of our business. In the period, turnover amounted to some £1.44 million which represents an increase of 26% over the comparable period last year. The value of new contracts won has trebled in value compared to the same period last year and this has been accompanied by an increase in renewal rates, from our existing customers, to 86%. Equally pleasing is the resultant increase of £304,000 or 33% in the balance of Deferred Income. We believe that we are prudent in the manner in which we spread the value of long term contracts over the term of the subscription. The balance of Deferred Income will be credited to Profit and Loss Account in the future as the subscriptions elapse. These trends point to the fact that our online systems are increasingly gaining market recognition, and even in such a challenging environment, are facilitating market penetration. Whilst Revenue growth is a critical success factor we are also mindful of the need to ensure the costs of fulfilling our obligations are well controlled. I am, therefore, especially pleased that our gross margin has shown such a healthy increase to 45% indicating very tight control on production. Our cost reduction programme, which was commenced in the latter part of the previous financial year, has, through improved efficiency and better control, achieved a reduction in overhead costs of 34% to £1,302,000, whilst continued enhancement and development of our systems have retained our technological advantage. This is key in achieving our prime focus on moving towards and achieving consistent profitability whilst being mindful that cognisance has to be given to long term shareholder value. The revenue improvement and continued efficiency in operations have resulted in a 65% reduction in the operating loss for the half year to £641,000 compared to a loss of £1,835,000 in the comparable period. Most significantly the rate of cash burn has shown a dramatic improvement, reducing by 84%. Cash outflow for the six month period of £275,000 is encouraging given Net Current Assets amounted to £1,320,000 as at 31st July 2002. Our current forecasts indicate that we will make further progress in the second half of this financial year. We anticipate that revenue will show another sizeable move forward and that production costs will continue to be tightly controlled. The cost of overheads have dramatically reduced in the first half and will continue to be managed at this level. The progress we have made would not have been possible without the skill and dedication of all my colleagues in the business. My sincere thanks are due to all of them. John Napier Chairman 9th September 2002 Profit and Loss Account Unaudited Unaudited Audited Six months ended Six months ended Year ended 31 July 2002 31 July 2001 31 January 2002 £'000 (restated) (restated) £'000 £'000 Notes Turnover 1,437 1,139 2,245 Direct Expenses 1 (792) (1,101) (2,079) Gross Profit 645 38 166 Operating Expenses 1 (1,302) (1,966) (3,450) Operating loss (657) (1,928) (3,284) Interest receivable 16 88 125 Interest payable - (1) (2) Loss on ordinary activities before taxation (641) (1,841) (3,161) Taxation - - - Loss on ordinary activities after taxation (641) (1,841) (3,161) Dividends 2 - - - Retained loss transferred to reserve (641) (1,841) (3,161) Loss per share, pence - basic and diluted 3 (2.2) (6.4) (11.0) All amounts relate to continuing activities. All recognised gains and losses are included in the profit and loss account. Balance Sheet Unaudited Unaudited Audited Six months ended Six months ended Year ended 31 July 2002 31 July 2001 31 January 2002 £'000 (restated) (restated) £'000 £'000 Fixed assets Tangible fixed assets 475 535 486 Current assets Debtors 963 863 861 Cash at bank and in hand 958 2,819 1,233 1,921 3,682 2,094 Creditors: Amounts falling due within one year (600) (823) (450) Net Current Assets 1,321 2,859 1,644 Total assets less current liabilities 1,796 3,394 2,130 Creditors: Amounts falling due after more than one year - (8) (6) Deferred Income (note 1) (1,224) (861) (919) Net Assets 572 2,525 1,205 Capital and Reserves Share capital 7,155 7,155 7,155 Share premium 5,064 5,064 5,064 Share scheme reserve 13 13 13 Merger reserve (5,250) (5,250) (5,250) Profit and loss (6,410) (4,457) (5,777) Equity shareholders' funds 572 2,525 1,205 Cash Flow Statement Unaudited Unaudited Audited Six months ended Six months ended Year ended 31 July 2002 31 July 2001 31 January 2002 £'000 (restated) (restated) £'000 £'000 Cash outflow from operating activities (225) (1,682) (3,266) Returns on investments and servicing of finance 15 87 118 Capital expenditure (64) (149) (179) Net cash outflow before financing (274) (1,744) (3,327) Financing Capital element of finance lease payments (1) (1) (4) Cash flow from financing (1) (1) (4) Increase / (decrease) in cash (275) (1,745) (3,331) Notes to the Cash Flow Statement (a) Reconciliation of operating loss to Unaudited Unaudited Audited operating cash flow: Six months ended Six months ended Year ended 31 July 2002 31 July 2001 31 January 2002 £'000 (restated) (restated) £'000 £'000 Operating loss (657) (1,928) (3,284) Depreciation 75 94 177 Loss on sale of fixed asset - 1 - Decrease / (Increase) in debtors (101) 524 426 (Decrease) / Increase in creditors 154 (248) (517) Decrease / (Increase) in deferred income 304 (125) (68) Net cash flow from operating activities (225) (1,682) (3,266) (b) Analysis of net funds Opening balance Cash flow Closing balance 1 February 2002 £'000 31 July 2002 £'000 £'000 Cash at bank and in hand 1,233 (275) 958 Finance leases (9) 1 (8) Total 1,224 (274) 950 Notes to Accounts 1. Basis of preparation The financial information set out above is extracted from the consolidated financial statements of Thomson Intermedia plc and its subsidiary Thomson Intermedia Associates Limited (together referred to as the 'Group'). The accounts of the Group for the six months ended 31st July 2002, which are unaudited, were approved by the Board on 5th September 2002. These accounts have been prepared in accordance with the accounting policies set out in the Report and Accounts of Thomson Intermedia plc for the year ended 31st January 2002, and have been subject to review by BDO Stoy Hayward, Chartered Accountants. The financial information shown for the 6 month periods ended 31st July 2002 and 31st July 2001 is unaudited and does not constitute statutory accounts of the Group within the meaning of section 240 of the Companies Act 1985. Only the accounts for the year ended 31st January 2002 have been audited and have been delivered to the Registrar of Companies. The consolidated financial statements incorporate the results of Thomson Intermedia plc and its subsidiary undertaking as at 31st July 2002 using the merger method of accounting. Production staff costs have been re-categorised into Direct expenses from Operating expenses and comparatives restated. Deferred Income, which represents invoiced revenue to be released over the period of the subscription, has been re-categorised in the Balance Sheet. Deferred income does not represent a short term creditor on a going concern basis, as these amounts will not be repaid, but released into the Profit & Loss account, and therefore has been included as a separate category after 'Total assets less current liabilities'. The Directors believe these adjustments portray a truer and fairer representation of the business. 2. Dividend No interim dividend is being proposed. 3. Loss per share Basic loss per share is calculated, in accordance with FRS 14 (Earnings per share), on loss on ordinary activities after tax of £641,000 (2001: loss £1,841,000) apportioned over the weighted average number of ordinary shares that were in issue for the period of 28,619,047. The calculation of diluted loss per share is the same as basic loss per share as the impact of any potential ordinary shares is antidilutive. 4. Interim report Copies of this interim report for the six months ended 31st July 2002 will be sent to shareholders. Further copies will be available from the Company Secretary at the registered office. Enquiries: Thomson Intermedia plc Sarah Jane Thomson Joint Chief Executive Tel: 020 8466 2906 David Trendle Finance Director Tel: 020 8466 2906 Williams de Broe David Newton Assistant Director Tel: 020 7588 7511 This information is provided by RNS The company news service from the London Stock Exchange

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