Interim Results

RNS Number : 6305V

Ebiquity PLC

16 January 2013

 



Ebiquity Plc

Interim Results for the six months ended 31 October 2012

Ebiquity Plc, the independent media and marketing performance measurement business, announces interim results for the six months ended 31 October 2012. Ebiquity provides services to over 1,100 clients across 70 countries, including over 85% of the major global advertisers¹.

Continued strong financial performance

•    Revenues up 27% to £30.5m (2011: £24.0m)

•    Gross profit up 20% to £16.0m (2011: £13.4m)

•    Underlying² operating profit up 29% to £3.2m (2011: £2.5m)

•    Underlying profit before tax of £2.7m (2011: £2.2m) and reported profit before tax of £1.2m (2011: £0.2m)

•    Underlying diluted EPS up 11% to 2.60p (2011: 2.35p) and basic earnings per share of 1.03p (2011: loss 0.16p)

Improved operational performance

•    Improved contract renewals³ with Analytics division at 98%and Platform division at 96%, underpinning core revenues

•    Completed the acquisition of FirmDecisions Group - a media and production cost audit business - for a total consideration capped at £7.0m. This acquisition provides a key additional analytics capability in our London, New York and Sydney offices

•    Continued strong growth in our international business with 77% (£23.6m) of total Group revenue now coming from international sources⁴ (2011: 75% or £18.0m)

Well positioned for further growth

•    Integration of Fairbrother Lenz Eley, a business acquired in March 2012, into the Group's German and London operations close to completion

•    Re-launch of our multi-language international advertising intelligence service with a planned re-launch of our social media monitoring service in 2013

•    Launch of new data products and tools set for early 2013 - the Group will launch Vital Signs, a new tool that will enable our clients to clearly understand how their marketing activities impact their key business drivers

•    Key senior appointments made in growth areas across the business

Michael Greenlees, CEO, commented:

"Companies increasingly want to achieve the maximum return from their advertising and marketing spend despite the uncertain economic climate. Our continued growth, high renewal rates and growing pipeline underpins our market leading position in providing independent insights to a global industry estimated to grow to $600bn⁵ in the next year."

16 January 2013

¹ Of the top 100 advertisers by global advertising spend (source: Advertising Age 2011)

² Underlying results are stated before highlighted items (see note 3)

³ By value for the six months ended 31 October 2012

⁴ Defined as multi-territory or non-UK domestic

⁵Source: eMarketer estimate of the media advertising market in 2014

Enquiries:

Ebiquity	020 7650 9600
Michael Greenlees, CEO
Andrew Beach, CFO
College Hill	020 7457 2020
Matthew Smallwood
Jamie Ramsay
Numis Securities	020 7260 1000
Nick Westlake (NOMAD)
David Poutney, James Serjeant (Corporate Broker)

Chief Executive's Statement

Overview

I am pleased to report that for the six months ended 31 October 2012 we have once again achieved significant growth in both revenue and profitability:

·      Revenue up by 27% to £30.5m (2011: £24.0m)    

·      Underlying operating profit up by 29% to £3.2m (2011: £2.5m)

·      Underlying operating margins increased from 10.5% to 10.6%

·      Underlying diluted EPS increased by 11% to 2.60p (2011: 2.35p)

Our year is, as always, second-half weighted and we remain confident that we will continue to meet management expectations.

Contract renewals remain strong with Analytics renewals at 98% and Platform renewals at 96% (both by value for the six months ended 31 October 2012).

We continue to expand our international reach with 37% of our clients taking products or services across multiple geographies, and 14% of clients taking two or more of our products or services.  This is driving an upward trend in our average contract size, and also contributing to a substantial pipeline of new client opportunities.  As previously reported, we continue to find that contract closure takes longer than has been the case historically, as a climate of caution continues to prevail amongst our clients.  Notwithstanding this, for the period reported, our organic revenues grew at 2% on a constant currency basis. The ever increasing scale of the pipeline gives us continuing confidence for the medium term.

Growth Drivers

Our overall growth story is one driven by the increasing worldwide demand for independent marketing and media performance measurement - data-driven evaluation tools and programmes that can help brand-owners improve the effectiveness and efficiency of their various marketing activities.  We believe that the growing importance of this market is in turn being driven by the following key factors:

·      The proliferation of marketing and media channels

·      The burgeoning need for the measurement of marketing performance and demonstration of return on investment ("ROI")

·      The increasing empowerment of consumers through user-generated content such as social media and blogs

·      The growth in available data around the effectiveness of marketing programmes and the sheer scale of this data which requires specialist skills

·      The consolidation and globalization of the marketing and advertising industry

·      The increasing demand of advertiser procurement departments to be able to demonstrate both value for money and compliance with contracts which cover ever-changing and complex media markets

These factors have combined to change the way that the world's brand-owners evaluate their brand performance and the ROI of marketing spend, which in turn is leading to the evolution of both the agency supply chain and the increasing demand for independent measurement.

Products and Systems

Ebiquity provides data analytics and insights to brand owners to help them navigate this increasingly data-rich, multi-channel and rapidly changing eco-system. Our products and services are delivered by two business segments:

1.   Analytics division

Our Analytics division addresses two broad areas - media buying measurement and benchmarking, and performance measurement attribution.

i.       Media buying measurement and benchmarking

As advertising budgets have grown, and the complexity of effective media planning has increased, so too has the importance of measuring and benchmarking media buying performance.

Ebiquity's media performance measurement tools now have significant penetration and are widely recognised as some of the most effective in the market.  We have developed tools and methodologies designed to deliver measurement, benchmarking, validation and ROI analysis of media buying performance in over 25 markets worldwide.  We have one of the largest media databases in the world and our analysis forms the basis of performance-based buying contracts for many of our clients with their media buying agencies.

Ebiquity is trusted by brand owners to provide independent advice on media planning and optimisation, the performance of the agencies used by the client and the effectiveness of sponsorship. Clients often take a combination of products and services from this segment and our advice is underpinned by two key products:

·      The Rack: Delivers media buying performance benchmarking across over 15 of the largest markets worldwide; and

·      CostTrack: Validates media buying savings guarantees in up to 40 markets worldwide.

ii.      Performance measurement and attribution

Performance and measurement attribution is now a growing part of our business and our methodologies and software have been developed to attribute accurately the impact of marketing and advertising activity to desired commercial outcomes:

·      Our media mix attribution optimiser measures media impact against defined business outcomes including, cost per acquisition (CPA), sales and 'footfall'. This product is key to our efforts to provide our clients with real time actionable insights to complement the 'rear view mirror' analytics at the core of our two traditional business segments

·      ScreenTest  helps advertisers evaluate the real impact of online display advertising

·      TestMatch accurately determines match sample testing

·      Echo provides corporate reputation measurement and benchmarking

2.   Platform division

Our Platform division monitors marketing and advertising content and activity across the full range of media.  It collects data on both online and offline advertising and provides related information and insight through subscription based platform products used by brand-owners. Our monitoring business is a market leader in its area.

Our platform monitoring services provide consumer insight, validation, strategic insights, competitive positioning, analysis of price and competitive claims and market landscaping to brand owners. Clients typically take our platform products on an annual subscription basis with access through an online near real-time portal.

Our monitoring capabilities in both paid and 'earned' (social media), data aggregation and tagging skills and international presence make our products 'must have' for some of the largest global advertisers.

We have four data centres -Newcastle (UK), Chicago (US), Baden-Baden (Germany) and Sydney (Australia), where data is captured, coded, tagged and formatted prior to being presented and updated within our subscription based platform products:

·      Portfolio: Provides 'deep-dive' advertising analytics in UK, Germany and Australia

·      Portfolio International: Delivers aggregated advertising analytics across 70 markets worldwide

·      Portfolio+: Client-tailored multi language translations platform

·      Sonar: Helps our clients gain actionable insights from social media on a global basis

All four products (which make up the majority of our Platform division and account for over 40% of our Group revenues) are highly scalable and are currently used in aggregate by over 600 clients.

Strengthening ourbusiness

Following the acquisition of Fairbrother Lenz Eley (FLE) in March 2012, we have been focusing on a number of key initiatives designed to make our Group stronger, more efficient and more competitive.

Product and Systems Development

We operate in a fast-moving marketplace and we are committed to using technology to both scale our business and to provide state-of-the-art technology solutions to our clients. Recent activity includes:

·      A review of our software systems with particular focus on ensuring that our growing international business is able to operate seamlessly across multiple locations and geographies and that our data security, integrity and archiving is of a high standard;

·      The upgrade of a number of our technologies to ensure that they continue to offer our clients a market leading user experience;

·      The re-launch of our client-tailored multi-language international advertising intelligence service, Portfolio+, which has been completely rebuilt in order to deliver our clients a more powerful search capability, greater ease of use and better tools; and

·      The planned re-launch of Sonar, our social media monitoring service.

In addition, on 3 August 2012 we completed the acquisition of FirmDecisions ASJP Group Limited (the holding company of the FirmDecisions Group). This audit business, staffed by experienced financial personnel from the advertising industry, brings a new and increasingly demanded capability to Ebiquity.  These skills enable us to provide increased financial transparency to the media transaction market-place and a higher level of advertiser confidence in contractual compliance.

Vital Signs, a data aggregation platform due for launch in early 2013, will aggregate data points provided by every segment of the business into a dashboard, to enable clients to understand clearly how their marketing activities impact their key business drivers, and facilitates simple communication of these insights.

People and Business Structures

We are now well advanced in integrating FLE into the Ebiquity business.  Our Hamburg integration was completed in December 2012, and our London integration will complete this month.  Other locations will follow soon afterwards. At the same time we are integrating our management and financial systems to ensure smooth and efficient business processes and to take advantage of cost synergies during the 2013/14 financial year.

To coincide with the integration of Ebiquity and FLE in London we recently appointed Morag Blazey as CEO for Ebiquity UK. Morag has been with the Group for nearly three years as International Practice Leader for Advertising Intelligence and is a highly qualified and well-regarded media professional with over 20 years of experience in media planning and buying. Prior to joining Ebiquity she was CEO of PHD London, a well-known independent media agency since acquired by Omnicom Inc.

In Germany, Dietmar Kruse has taken responsibility for leading the combined Ebiquity and FLE business following the integration of the two companies. Dietmar joined Ebiquity four years ago and has built, with his team, a significant and growing presence in this important European market.

We have also made two additional high profile appointments to take significant leadership positions in other parts of our business.

In Australia, Richard Basil-Jones joins Ebiquity as Managing Director, Advertising Intelligence Asia Pacific. Richard joins us following his time as Managing Director of Nielsen Media Research Asia Pacific and will report to Eric Faulkner who will take the newly created role of CEO Asia Pacific. These appointments reflect our commitment to the region and our ambitions to become a major player in this rapidly developing market.

Dean Ferenac joins us as Managing Director for our Media practice in North America. Dean joins Ebiquity from Draftfcb Chicago, where he was Worldwide Group Media Director, and will report to PJ Leary who, as CEO North America, will focus on developing our strategy in the region.

All these appointments together with the many other people who have joined us in recent months, mean that we now have some of the most talented people in our sector able to focus on the growing needs of our clients in measuring their marketing and media performance.

Outlook

These are challenging times for our clients and the uncertain economic outlook has created a climate of caution, which continues to act as a brake on strong business growth for many. However it is also encouraging brand owners to focus on optimising their marketing spend and demanding a clear picture of the ROI provided by their agencies.

Ebiquity is well placed to assist its clients in achieving these goals - our business remains strong, and the health of our new business pipeline is a testimony to the continuing and growing demand for our skills and services.  We remain confident that we will meet management expectations for the full year, and the strength and breadth of our offering mean that we are well positioned for the future.

Michael Greenlees

Chief Executive Officer

15 January 2013

Financial Review

Introduction

Ebiquity plc is publishing its interim results for the six months ended 31 October 2012.  All results are stated before taking into account highlighted items unless otherwise stated.  These highlighted items include share based payment expenses, amortisation of purchased intangible assets, acquisition costs, and restructuring and other non-recurring items.

Segmental reporting presentation

Our two segments are "Analytics" and "Platform".  The Analytics division consists of our media buying measurement & benchmarking and performance measurement & attribution services, and our Platform division consists of our media monitoring products.

Acquisitions in the six months ended 31 October 2012

On 3 August 2012, we purchased 100% of FirmDecisions ASJP Group Limited (the holding company of the FirmDecisions Group, "FD") for total expected consideration of £5.4m consisting of upfront consideration of £1.0m, deferred consideration of £0.5m and estimated earn out payments of £3.9m. Total consideration is capped at £7.0m. FD operates from offices in London, New York and Sydney and employs 14 people.

The results of FD have been consolidated into our Analytics division from the date of acquisition.

Revenue

	Six months ended 31 October 2012	Six months ended 31 October 2011	Year ended 30 April 2012
	£'000	£'000	£'000
Continuing
Analytics	17,971	11,383	27,927
Platform	12,531	12,512	24,868
Total continuing revenue	30,502	23,895	52,795
Discontinued	-	124	124
Total revenue	30,502	24,019	52,919

Total Group revenue increased by 27% to £30.5m (2011: £24.0m). Revenue from continuing operations has increased by 28% from £23.9m to £30.5m. 

All of the acquisitions in the current and prior periods have been in the Analytics division, which has helped Analytics revenue increase by 58% to £18.0m (2011: £11.4m). Analytics renewal rate (by value) stands at 98%. 

Platform revenue remained stable in the year.  The renewal rate (by value) for media monitoring has increased to 96% in the six months to 31 October 2012 (2011: 91%).

The acquisitions in the current and prior periods have continued to add to our international presence. 77% of total group revenue (£23.6m) now comes from international sources, up from 75% for the same period last year (£18.0m).

Discontinued operations relates to the disposed editorial monitoring business, Newslive, which was sold for a small profit on 1 July 2011.

The increase in continuing revenue from the prior period can be reconciled as follows:

	Existing business	Impact of acquisitions	Total
	£'000	£'000	£'000
Revenue for six months ended 31 October 2011	21,283	2,612	23,895
Organic revenue growth on a constant currency basis	332	-	332
Foreign exchange movement on organic revenue	(330)	-	(330)
Full period impact of prior period acquisitions	-	2,010	2,010
Revenue from acquisitions made after 31 October 2011	-	4,595	4,595
Revenue for 6 months ended 31 October 2012	21,285	9,217	30,502

Organic revenue has increased by 2% (£0.3m) on a constant currency basis (by applying the average foreign exchange rates from the six months ended 31 October 2011 to the results for the six months ended 31 October 2012).

Full period impact of prior period acquisitions represents the year on year increase in recognised revenue from acquisitions that completed during the six months ended 31 October 2011. Specifically, this relates to the Echo group (acquired on 20 May 2011), JUMC (27 May 2011), and FMM (14 October 2011) where a full six months of revenue was not recognised.

Revenue from acquisitions made after 31 October 2011 represents revenue from acquisitions completed subsequent to 31 October 2011, i.e. no revenue was recognised in the previous period.  Specifically, this relates to our acquisitions of the FLE group on 12 March 2012 and our acquisition of FD on 3 August 2012 (where approximately three months of revenue has been recognised in the current period since completion).

Gross profit  

	Six months ended 31 October 2012	Six months ended 31 October 2011	Year ended 30 April 2012
	£'000	£'000	£'000
Continuing
Analytics	8,373	5,661	14,672
Platform	7,676	7,752	15,235
Total continuing	16,049	13,413	29,907
Discontinued	-	(9)	(9)
Total gross profit	16,049	13,404	29,898

Gross profit for the period was up 20% to £16.0m (2011: £13.4m), yielding a gross margin of 53% (2011: 56%).

Analytics gross profit has increased from £5.7m to £8.4m, with a gross margin of 47% (2011: 50%).  The margin decrease is largely the result of the recently acquired entities currently being on a lower gross margin level than the rest of the group. 

On a continuing basis, Platform gross profit has decreased from £7.8m to £7.7m, with margins decreasing slightly from 62% to 61%. The margin decrease is largely a result of increased direct staff costs following the introduction of a performance related incentive scheme for our data centre employees, where an efficiency improvement is expected in future periods.

Operating profit

Operating profit before highlighted items is termed "underlying operating profit".  Certain items have been highlighted because separate disclosure is considered relevant in understanding the underlying performance of the business. 

	Six months ended 31 October 2012	Six months ended 31 October 2011	Year ended 30 April 2012
	£'000	£'000	£'000
Continuing
Analytics	3,799	2,964	8,525
Platform	4,287	4,110	8,414
Central costs	(4,843)	(4,460)	(8,633)
Total continuing	3,243	2,614	8,306
Discontinued	-	(101)	(101)
Total underlying operating profit	3,243	2,513	8,205

Underlying operating profit was £3.2m (2011: £2.5m), representing a 29% increase over the prior period.  On a continuing basis the increase is 24%.

The Analytics division has increased underlying operating profit by £0.8m (a 28% increase), and on a continuing basis, the Platform division has seen an increase in underlying operating profit of £0.2m (a 4% increase).

Central costs predominantly represent certain UK property costs, central salaries (Board, Finance, IT and HR), and central legal and advisory costs.  The UK property costs include our client facing offices and totals £0.9m in the period (2011: £1.0m).  Central costs have increased, reflecting the increased scale of the Group. 

The disposed business, Newslive, was loss making and hence results in an improved performance period on period.

Underlying operating profit margin has increased to 10.6% (2011: 10.5%).

Highlighted items

Highlighted items comprise significant non-cash charges and non-recurring items which are highlighted in the income statement because separate disclosure is considered relevant in understanding the underlying performance of the business.

	Six months ended 31 October 2012			Six months ended 31 October 2011
	Cash	Non-cash	Total	Cash	Non-cash	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Administrative Expenses
Recurring:
Share based payment expenses	-	115	115	-	471	471
Amortisation of purchased intangibles	-	1,062	1,062	-	858	858
	-	1,177	1,177	-	1,329	1,329
Non-recurring:
Integration costs	-	-	-	55	-	55
Severance costs	-	-	-	56	-	56
Acquisition costs	368	-	368	574	-	574
	368	-	368	685	-	685
Total highlighted items	368	1,177	1,545	685	1,329	2,014

Acquisition costs represent professional fees incurred in relation to acquisitions (£228,000) and net movements in contingent deferred consideration (£140,000).

As at 31 October 2012, £176,000 of the £368,000 cash highlighted items had been settled.

Result before tax

	Six months ended 31 October 2012	Six months ended 31 October 2011	Year ended 30 April 2012
	£'000s	£'000s	£'000s
Underlying operating profit	3,243	2,513	8,205
Highlighted items	(1,545)	(2,014)	(4,607)
Operating profit	1,698	499	3,598
Net finance costs	(530)	(300)	(955)
Share of profits of associates	2	-	-
Profit before tax	1,170	199	2,643

Net finance costs were £0.5m (2011: £0.3m) which reflects the higher level of debt following the acquisitions made in the current and prior periods.

Underlying profit before tax was up 23% to £2.7m (2011: £2.2m). Reported profit before tax is £1.2m (2011: £0.2m). 

Taxation

The tax for the period is a charge of £0.3m, representing a current tax charge of £0.6m offset by a deferred tax credit of £0.3m.  The effective current tax rate is 22% (2011: 21%), derived from a statutory rate of 29% offset by the use of brought forward tax losses.

The overall effective tax rate has reduced significantly - from 154% to 24% - largely due to lower non-taxable highlighted items and the deferred tax effect of these highlighted items.

Equity

During the period, 770,960 shares were issued upon the exercise of employee share options. These exercises have increased issued share capital to 59,688,627 ordinary shares (30 April 2012: 58,917,667). This includes 4,200,000 shares issued to an employee benefit trust ("EBT") designed to satisfy certain share option exercises.

At the time of the acquisition of Xtreme in April 2010, convertible loan notes were issued that are convertible into 13,802,861 ordinary shares.  These convertible loan notes have been included within equity as they demonstrate the characteristics of ordinary share capital.  They are also included within the number of shares for the purposes of both the basic and diluted earnings per share calculations.  None of the convertible loan notes have been converted into ordinary shares at this time. Issued share capital plus the convertible loan notes totals 73,491,488.  In the calculation of earnings per share, the weighted average in the period is 72,219,626.

At the period end there are 8,459,661 unexercised share options (6,061,801 of which were exercisable as at 31 October 2012). This includes the 4,200,000 share options for which the EBT was created.  There have been no further issues of share options since the period end but options over 37,960 shares have been exercised since the period end. For the purposes of calculating diluted earnings per share, in accordance with IFRS requirements, the dilutive impact is 2,589,462.

Earnings per share

Underlying diluted earnings per share was up 11% to 2.60p (2011: 2.35p).  The increase is largely due to the positive impact of the acquisitions offset by increased central costs and interest charges.

The Group reports a basic earnings per share of 1.03p (2011: loss of 0.16p). 

Non-controlling interests

The increase in non-controlling interests relates primarily to certain acquisitions where less than 100% of the share capital was acquired.  The majority of the £142,000 in 2012 (2011: £4,000) relates to the 49.9% non-controlling interest in The Joined Up Media Company Limited, acquired in May 2011.

Financial Position and Cash flow

The most notable movements on the balance sheet since the previous year end are due to the acquisition of FD, with goodwill and intangible assets increasing by a combined total of £5.1m and other financial liabilities increasing by £5.1m mainly due to the recognition of deferred contingent consideration provisions.

A cash and net debt analysis is provided as follows.

	As at 31 October 2012	As at 31 October 2011	As at 30 April 2012
	£'000s	£'000s	£'000s
Underlying net cash from operating activities1	601	949	3,126
Reported net cash (used)/generated from operating activities	(205)	(506)	1,174
Cash	4,335	2,796	6,190
Bank borrowings²	(18,970)	(12,050)	(18,353)
Net debt	(14,635)	(9,254)	(12,163)

¹ Underlying net cash from operating activities represents the cash flows from operating activities excluding the cash impact of highlighted items.

² Bank borrowings on the Balance Sheet at 31 October 2012 is shown net of £0.3m (2011: £0.4m) of loan arrangement fees that have been paid which are amortised over the life of the facility. The borrowings stated above excludes these costs.

Underlying net cash inflow from operating activities in the period was £0.6m (2011: £0.9m).  This decrease of £0.3m is largely due to adverse movements in working capital and increased taxation payments due to higher profits.  After highlighted items are considered, net cash outflow from operations for the period was £0.2m (2011: £0.5m), reflecting the reduced cash impact of the highlighted items in the period.

Total additional borrowings in the period were £1.8m, used to fund the acquisitions and deferred consideration payments in the period.  This movement is offset by loan repayments in the period of £1.1m.

Due to the seasonality of our cash flows, net debt is historically higher at the half year relative to the full year.

During the period, the Group continued to trade within all of its banking facilities and covenants. 

Andrew Beach

Chief Financial Officer

15 January 2013

Consolidated Income Statement

for the six months ended 31 October 2012

		Unaudited 6 months ended 31 October 2012	Unaudited  6 months ended 31 October 2011	Audited 12 months ended 30 April  2012
	Note	£'000s	£'000s	£'000s
Revenue		30,502	24,019	52,919
Cost of Sales		(14,453)	(10,615)	(23,021)
Gross Profit		16,049	13,404	29,898
Administrative expenses - excluding highlighted items		(12,806)	(10,891)	(21,693)
Administrative expenses - highlighted items	3	(1,545)	(2,014)	(4,607)
Total administrative expenses		(14,351)	(12,905)	(26,300)
Operating profit before highlighted items		3,243	2,513	8,205
Administrative expenses - highlighted items	3	(1,545)	(2,014)	(4,607)
Operating profit		1,698	499	3,598
Finance income		7	2	6
Finance expenses		(537)	(302)	(961)
Net finance expense		(530)	(300)	(955)
Share of profits of associates		2	-	-
Profit before tax and highlighted items		2,715	2,213	7,561
Highlighted items	3	(1,545)	(2,014)	(4,918)
Profit before tax		1,170	199	2,643
Tax expense		(285)	(306)	(1,036)
Profit/(loss) for the period		885	(107)	1,607
Attributable to:
Equity holders of the parent		743	(111)	1,610
Non-controlling interests		142	4	(3)
		885	(107)	1,607
Earnings/(losses) per share
Basic	5	1.03p	(0.16p)	2.29p
Diluted	5	0.99p	(0.16p)	2.18p
Underlying basic	5	2.70p	2.45p	7.77p
Underlying diluted	5	2.60p	2.35p	7.40p

      Consolidated Statement of Comprehensive Income

for the six months ended 31 October 2012

	Unaudited 6 months ended 31 October 2012	Unaudited  6 months ended 31 October 2011	Audited   12 months ended 30 April  2012
	£'000	£'000	£'000
Profit/(loss) for the period	885	(107)	1,607
Exchange differences on translation of overseas subsidiaries	(9)	58	(261)
Movement in valuation of hedging instruments	(128)	(34)	(26)
Total comprehensive income/(loss) for the period	748	(83)	1,320
Attributable to:
Equity holders of the parent	606	(87)	1,323
Non-controlling interests	142	4	(3)
	748	(83)	1,320

Consolidated Statement of Financial Position

as at 31 October 2012

		Unaudited as at 31 October 2012	Unaudited as at 31 October 2011	Audited as at 30 April 2012
	Note	£'000s	£'000s	£'000s
Non-current assets
Goodwill	6	47,589	37,710	43,291
Other intangible assets	7	13,080	10,400	12,261
Property, plant & equipment		2,960	3,268	3,069
Investment in associates		5	-	4
Deferred tax assets		1,263	811	1,050
Total non-current assets		64,897	52,189	59,675
Current assets
Loans & other financial assets		-	200	-
Trade & other receivables		20,744	13,652	20,756
Cash & cash equivalents		4,335	2,796	6,190
Total current assets		25,079	16,648	26,946
Total assets		89,976	68,837	86,621
Current liabilities
Other financial liabilities	8	(12,165)	(5,873)	(7,744)
Trade & other payables		(7,154)	(6,675)	(8,645)
Current tax liabilities		(1,819)	(547)	(1,446)
Provisions		(330)	(497)	(399)
Accruals & deferred income		(9,175)	(9,291)	(11,178)
Total current liabilities		(30,643)	(22,883)	(29,412)
Non-current liabilities
Other financial liabilities	8	(18,558)	(8,963)	(17,855)
Provisions		(736)	(628)	(745)
Deferred tax liabilities		(3,062)	(2,627)	(2,847)
Total non-current liabilities		(22,356)	(12,218)	(21,447)
Total liabilities		(52,999)	(35,101)	(50,859)
Total net assets		36,977	33,736	35,762
Capital & reserves
Share capital		14,922	14,718	14,729
Share premium		4,297	4,226	4,233
Convertible loan note reserve		9,445	9,445	9,445
Merger reserve		3,667	3,667	3,667
ESOP reserve		(1,590)	(1,590)	(1,590)
Hedging reserve		(168)	(48)	(40)
Translation reserve		(230)	98	(221)
Retained earnings		6,150	2,983	5,132
Capital & reserves attributable to the equity holders of the parent		36,493	33,499	35,355
Non-controlling interests		484	237	407
Total equity		36,977	33,736	35,762

Consolidated Statement of Changes in Equity

for the six months ended 31 October 2012

	Share capital	Share premium	Convertible loan note reserve	Merger reserve	ESOP reserve	Hedging reserve	Translation reserve	Retained earnings	Non-controlling interests	Total equity
	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000	£'000
1 May 2011	13,994	2,666	9,445	3,667	(1,590)	(14)	40	2,817	26	31,051
Profit/(loss) for the period	-	-	-	-	-	-	-	(111)	4	(107)
Other comprehensive income	-	-	-	-	-	(34)	58	-	-	24
Total comprehensive income for the period	-	-	-	-	-	(34)	58	(111)	4	(83)
Shares issued for cash	724	1,859	-	-	-	-	-	-	-	2,583
Share issue costs	-	(299)	-	-	-	-	-	-	-	(299)
Acquisition of subsidiaries	-	-	-	-	-	-	-	-	211	211
Share options charge	-	-	-	-	-	-	-	471	-	471
Deferred tax on share options	-	-	-	-	-	-	-	(194)	-	(194)
Dividends paid to non-controlling interests	-	-	-	-	-	-	-	-	(4)	(4)
31 October 2011	14,718	4,226	9,445	3,667	(1,590)	(48)	98	2,983	237	33,736
Profit/(loss) for the period	-	-	-	-	-	-	-	1,722	(7)	1,715
Other comprehensive income	-	-	-	-	-	8	(319)	-	-	(311)
Total comprehensive income for the period	-	-	-	-	-	8	(319)	1,722	(7)	1,404
Shares issued for cash	11	7	-	-	-	-	-	-	-	18
Acquisition of subsidiaries	-	-	-	-	-	-	-	-	177	177
Share options charge	-	-	-	-	-	-	-	472	-	472
Deferred tax on share options	-	-	-	-	-	-	-	(45)	-	(45)
30 April 2012	14,729	4,233	9,445	3,667	(1,590)	(40)	(221)	5,132	407	35,762
Profit/(loss) for the period	-	-	-	-	-	-	-	743	142	885
Other comprehensive income	-	-	-	-	-	(128)	(9)	-	-	(137)
Total comprehensive income for the period	-	-	-	-	-	(128)	(9)	743	142	748
Shares issued for cash	193	64	-	-	-	-	-	-	-	257
Share options charge	-	-	-	-	-	-	-	115	-	115
Deferred tax on share options	-	-	-	-	-	-	-	160	-	160
Dividends paid to non-controlling interests	-	-	-	-	-	-	-	-	(65)	(65)
31 October 2012	14,922	4,297	9,445	3,667	(1,590)	(168)	(230)	6,150	484	36,977

Consolidated Cash Flow Statement

for the six months ended 31 October 2012

	Unaudited 6 months ended 31 October 2012	Unaudited 6 months ended 31 October 2011	Audited 12 months ended 30 April 2012
	£'000s	£'000s	£'000s
Cashflows from operating activities
Profit before taxation	1,170	199	2,643
Adjustments for:
Depreciation	561	585	1,166
Amortisation	1,138	945	1,893
Loan fees written off	-	-	311
Unrealised foreign exchange (gain)/loss	(2)	(6)	14
Share option charges	115	471	943
Finance income	(7)	(2)	(6)
Finance expense	537	302	650
Profit on disposal	-	(50)	(49)
Share of profit of associates	(2)	-	-
Deferred contingent consideration revaluations	140	-	-
	3,650	2,444	7,565
Decrease/(increase) in trade receivables	943	3,030	(1,800)
Decrease in trade payables	(4,103)	(5,212)	(2,667)
Decrease in provisions	(78)	(247)	(605)
Cash from operations	412	15	2,493
Finance expense	(295)	(293)	(527)
Income taxes paid	(322)	(228)	(792)
Net cash (used)/generated from operating activities	(205)	(506)	1,174
Cashflows from investing activities
Acquisition of subsidiaries, net of cash acquired	(1,941)	(5,809)	(9,934)
Purchase of property, plant & equipment	(382)	(503)	(892)
Purchase of intangible assets	-	-	(180)
Finance income	7	2	6
Net cash used in investing activities	(2,316)	(6,310)	(11,000)
Cashflows from financing activities
Proceeds from issue of share capital (net of issue costs)	257	2,283	2,302
Proceeds from long-term borrowings	1,750	5,480	25,780
Repayment of bank loans	(1,125)	(1,165)	(15,034)
Bank loan fees paid	-	(100)	(400)
Bank securities released	-	-	200
Dividends paid to non-controlling interests	(65)	(10)	(10)
Repayment of finance leases	(146)	(10)	(19)
Net cash inflow from financing activities	671	6,478	12,819
Net (decrease)/increase in cash, cash equivalents and bank overdrafts	(1,850)	(338)	2,993
Effect of foreign exchange rate changes	(5)	(24)	39
Cash, cash equivalents and bank overdrafts at beginning of period	6,190	3,158	3,158
Cash, cash equivalents and bank overdrafts at end of period	4,335	2,796	6,190

Notes to the interim financial statements for the six months ended 31 October 2012

1.  Accounting policies

Basis of preparation

The financial information presented in this documentation has been prepared using recognition and measurement principles which are consistent with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations that are expected to be applicable for the period ending 30 April 2013, and endorsed for use in the European Union.  Further standards or interpretations may also be issued that could be applicable for the year ending 30 April 2013.  These potential changes could result in the need to change the basis of accounting or presentation of certain financial information from that presented in this document.

The comparatives for the period ended 30 April 2012 are not the Company's full statutory accounts for that year but are drawn up from those accounts. A copy of the statutory accounts for that year has been delivered to the Registrar of Companies. The auditors' report on those accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

Contingent deferred consideration on the Statement of Financial Position as at 31 October 2011 has been reclassified from provisions to other financial liabilities, in accordance with IFRS 3R and to conform with the classification in the Statement of Financial Positions as at 30 April 2012 and as at 31 October 2012.

As permitted by AIM rules, the group has not applied IAS 34 'Interim Reporting' in preparing this interim report.

There are no new IRFSs or IFRIC interpretations that are effective for the first time for the financial year beginning 1 May 2012 that would be expected to have a material impact on the Group.

2.  Segmental reporting

The segment information provided to the Directors for the reportable segments for the period ended 31 October 2012 is as follows:

Unaudited six months ended 31 October 2012

	Analytics	Platform	Reportable Segments	Unallocated	Total
	£'000	£'000	£'000	£'000	£'000
Revenue	17,971	12,531	30,502	-	30,502
Operating profit before highlighted items	3,799	4,287	8,086	(4,843)	3,243

Unaudited six months ended 31 October 2011

	Analytics	Platform	Reportable Segments	Unallocated	Total
	£'000	£'000	£'000	£'000	£'000
Revenue	11,383	12,636	24,019	-	24,019
Operating profit before highlighted items	2,964	4,009	6,973	(4,460)	2,513

Year ended 30 April 2012

	Analytics	Platform	Reportable Segments	Unallocated	Total
	£'000	£'000	£'000	£'000	£'000
Revenue	27,927	24,992	52,919	-	52,919
Operating profit before highlighted items	8,525	8,313	16,838	(8,633)	8,205

2.  Segmental reporting (continued)

A reconciliation of segment operating profit before highlighted items to total profit before tax is provided below:

	Unaudited 6 months ended 31 October 2012	Unaudited 6 months ended 31 October 2011	Audited 12 months ended 30 April 2012
	£'000	£'000	£'000
Reportable segment operating profit before highlighted items	8,086	6,973	16,838
Unallocated costs:
Staff costs	(2,690)	(2,329)	(4,637)
Property costs	(906)	(969)	(1,839)
Exchange rate movements	(156)	(20)	(218)
Other administrative expenses	(1,091)	(1,142)	(1,939)
Operating profit before highlighted items	3,243	2,513	8,205
Highlighted items (note 3)	(1,545)	(2,014)	(4,607)
Operating profit	1,698	499	3,598
Net finance costs	(530)	(300)	(955)
Share of profit of associates	2	-	-
Profit before tax	1,170	199	2,643

Unallocated costs comprise central costs that are not considered attributable to either segment.

3.  Highlighted items

Highlighted items comprise significant non-cash charges and non-recurring items which are highlighted in the income statement because separate disclosure is considered relevant in understanding the underlying performance of the business.

	Unaudited 6 months ended 31 October 2012	Unaudited 6 months ended 31 October 2011	Audited 12 months ended 30 April 2012
	£'000s	£'000s	£'000s
Recurring:
Share based payment expenses	115	471	943
Amortisation of purchased intangibles	1,062	858	1,733
	1,177	1,329	2,676
Non-recurring:
Integration costs	-	55	189
Severance costs	-	56	208
Acquisition costs	368	574	1,250
Refinancing costs	-	-	284
	368	685	1,931
Charged to operating profit	1,545	2,014	4,607
Finance costs	-	-	311
Total highlighted items before tax	1,545	2,014	4,918
Taxation credit	(292)	(106)	(1,029)
Total highlighted items after tax	1,253	1,908	3,889

Acquisition costs represent professional fees incurred in relation to acquisitions (£228,000) and adjustments to the fair value of deferred consideration (£140,000).

4.  Dividends

No interim dividend is being proposed (2011: nil).

5.  Earnings per share

The calculation of basic and diluted earnings per share is based on the following data:

	Unaudited 6 months ended 31 October 2012	Unaudited 6 months ended 31 October 2011	Audited 12 months ended 30 April  2012
	£'000s	£'000s	£'000s
Net profit/(loss) attributable to equity holders of the parent	743	(111)	1,610
Adjustments:
Impact of highlighted items (net of tax)1	1,204	1,829	3,824
Notional use of brought forward tax losses2	-	-	21
Underlying net profit for the purpose of underlying earnings per share	1,947	1,718	5,455
Number of shares
Weighted average number of ordinary shares for the purpose of basic earnings per share	72,219,626	70,060,099	70,233,989
Effect of dilutive potential ordinary shares
Share options	2,589,462	3,008,375	3,482,201
Weighted average number of ordinary shares for the purpose of diluted earnings per share	74,809,088	73,068,474	73,716,190
Basic earnings/(losses) per share	1.03p	(0.16p)	2.29p
Diluted earnings/(losses) per share3	0.99p	(0.16p)	2.18p
Underlying basic earnings per share	2.70p	2.45p	7.77p
Underlying diluted earnings per share	2.60p	2.35p	7.40p

¹Highlighted items (see note 3), stated net of their total tax impact.

   ² The adjustment for notional use of brought forward tax losses demonstrates the additional utilisation of brought forward tax losses that would have been used if the highlighted items in the year had not been incurred.

   ³ The statutory EPS has not been diluted in the period ended 31 October 2011 since the result for that period was a loss.

6.  Goodwill

		£'000
Cost and net book value
At 1 May 2011		31,457
Acquisitions		6,182
Foreign exchange differences		71
At 31 October 2011		37,710
Acquisitions		5,863
Foreign exchange differences		(282)
At 30 April 2012		43,291
Acquisitions		3,232
Adjustments to prior year acquisitions		1,091
Foreign exchange differences		(25)
At 31 October 2012		47,589

7.  Other intangible assets

	Capitalised development costs	Purchased intangible assets	Total intangible assets
	£'000s	£'000s	£'000s
Cost
At 1 May 2012	928	16,956	17,884
Additions	-	1,976	1,976
Foreign exchange	-	(27)	(27)
At 31 October 2012	928	18,905	19,833
Amortisation
At 1 May 2012	(531)	(5,092)	(5,623)
Provision for the period	(76)	(1,062)	(1,138)
Foreign exchange	-	8	8
At 31 October 2012	(607)	(6,146)	(6,753)
Net book value
At 31 October 2012	321	12,759	13,080
At 31 October 2011	296	10,104	10,400
At 30 April 2012	397	11,864	12,261

The capitalised development costs are internally generated.

8.  Other financial liabilities

	31 October 2012	31 October 2011	30 April 2012
	£'000	£'000	£'000
Current
Bank borrowings	2,243	5,042	2,245
Finance lease liabilities	118	121	119
Contingent deferred consideration	9,804	710	5,380
	12,165	5,873	7,744
Non-current
Bank borrowings	16,471	6,589	15,814
Finance lease liabilities	64	219	209
Interest rate swaps	168	48	39
Contingent deferred consideration	1,855	2,107	1,793
	18,558	8,963	17,855
Total other financial liabilities	30,723	14,836	25,599

INDEPENDENT REVIEW REPORT TO EBIQUITY PLC

Introduction

We have been engaged by the company to review the interim financial statements in the half-yearly financial report for the six months ended 31 October 2012, which comprises the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of financial position, consolidated statement of changes in equity, consolidated cash flow statement and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the AIM Rules for Companies which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the company's annual financial statements.

As disclosed in note 1, the annual financial statements of the group are prepared in accordance with IFRSs as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with the basis of preparation set out in note 1.

Our responsibility

Our responsibility is to express to the company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of the AIM Rules for Companies and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 31 October 2012 is not prepared, in all material respects, in accordance with the basis of preparation set out in note 1 and the AIM Rules for Companies.

PricewaterhouseCoopers LLP
Chartered Accountants
15 January 2013

London

The maintenance and integrity of the Ebiquity plc website is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the website.

Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

END

 

 

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