Preliminary Results

RNS Number : 8023P

Ebiquity PLC

23 July 2010

 



Ebiquity PLC

"Ebiquity" or "The Company"

Results for the 52 weeks ended 30 April 2010

Ebiquity plc, the media and marketing analytics business, announces final results for the 52 weeks ended 30 April 2010. Ebiquity provides services to over 65% of the top 100 global advertisers and represents over 600 clients in up to 70 countries.

Key Points:

·      Strong financial performance driven by increasing global demand and strong recurring revenues 

−    Analytics business revenue increased by 18%

−    Platform business renewals at 80%

·      Successful acquisition in April 2010 of Xtreme Information, the leader in International advertising monitoring

−    Creates strong foundation for complete global offering

−    Integration progressing well and cost synergies in line with projections

·      Continued investment strengthening global presence

−    Further acquisitions in Germany, France and Italy

·      Well financed, highly cash generative and new banking facilities in place

Financials:

·      Group revenues increased by 15% to £21.2m (2009: £18.5m)

·      Group underlying* operating profit of £2.6m (2009: £2.4m)

·      Net debt at 30 April 2010 of £2.0m (2009: £2.2m)

·      Basic earnings per share of 0.50p (2009: 0.27p)

* before highlighted items (see note 2)

Michael Greenlees, CEO, Commented:

"We are very pleased with these results.  The acquisition of Xtreme is set to transform our Company into a leading media and marketing analytics business with global reach. We are excited by the opportunities for growth that the next phase of our development affords."

23 July 2010

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 (Corporate Broker)

Chairman's Statement

The Company has begun to prosper and is now benefiting from the firm foundations that have been put in place over recent years.

We entered this year with a clear focus on continuing to build a strong and growing sustainable revenue stream by developing new and innovative ways to serve our clients. Despite our good financial performance, strong recurring revenues and continued international growth driven by the demand for transparency, benchmarking and measurement, the various business lines have been imbalanced in both geographic reach and scale. Traditionally it has proven difficult to fully exploit the relationship between our different activities.

The acquisition in April 2010 of Xtreme Information has addressed, in a very material way, the geographic reach and balance of our data capture capabilities and creates a business of scale that can rest comfortably alongside the domestic and international capabilities in our analytics business.

I believe our Company is now better positioned than any other in our marketplace, not only to help our clients understand their performance in an increasingly complex market environment, but also to provide a far greater level of insight, thus enabling them to improve their competitive performance and marketing efficiency.

We have put in place foundations upon which our business can now grow significantly on a global basis mirroring the business models of our clients, both corporate and in the agency world. We have the chance to penetrate and exploit the market opportunity that exists currently.

None of this would have been possible without the leadership of our management team and the commitment of our people.  I would like to thank the Ebiquity team who have been with us throughout the year, and also the employees of Xtreme whom we welcome into our enlarged enterprise with a sense of excitement and confidence.

I would also like to welcome Jeff Stevenson and Chris Russell who have joined the Board following the acquisition of Xtreme. We look forward to benefiting from their insight and experience.

We have a scalable business and an experienced management team that have the capability to run a much bigger business. We are excited about the future.

Michael Higgins

Chairman

23 July 2010

Chief Executive's Review

Overview

During the last twelve months we have made significant progress in developing our Company. We are pleased with these financial results and are excited by the opportunities that exist in our market place, opportunities that we now feel better equipped to exploit than at any time in our history.

Total revenue on an organic basis (excluding the impact of acquisitions) for the year to 30 April 2010 was up 10% on the prior year to £20.2m. Analytics revenue increased by 18% to £15.2m and now represents 75% of total organic revenue. Within this sales from international assignments grew 32%.

We are also pleased with the renewal rate in our platform business which during the period was 80%, demonstrating the resilient nature of this business.

Group underlying operating profit (before highlighted items) was up 7% to £2.5m on an organic basis. Excluding the impact of non-trading foreign exchange movements, underlying operating profit (before highlighted items) showed an organic increase of 30% to £2.7m compared to the prior year.

This strong performance took place in the face of the continuing impact of the economic downturn, which required us to manage our costs carefully whilst ensuring that we continued to develop our business in line with the needs of our clients. As a result we have increased our organic gross margin from 53% to 54% and we have significantly increased our underlying operating margin (excluding non-trading foreign exchange movements) from 11.2% to 13.3% on an organic basis.

Combined Group Results

The acquisitions of Xtreme and TMC have had a marginal impact on this year's results given that these transactions were completed just 17 days before our year end. In combination with the Ebiquity full year results, revenues were £21.2m (£20.2m on an organic basis) and operating profit was £2.6m (£2.5m on an organic basis).

Our cash position improved significantly during the year with a strong conversion of profits into cash. Cash flow of £2.4m was generated from operating activities. At the time of the acquisition, net debt was £1m.

Fully diluted underlying earnings per share increased from 5.28p to 5.55p.

The new economic reality has reset the marketing and media agenda

In recent years, media and marketing spend has come under pressure as never before. The new economic reality facing most companies means that marketing executives are now being asked to justify every pound they spend in terms of value, effectiveness and financial return. Corporate procurement in particular is playing a large and growing part in the increasing trend to benchmark expenditure against clearly defined objectives and key performance indicators.

In the USA, the CMO Council's 'State of the Market' review stated that: "31% of marketers expect to initiate or undertake marketing performance measurement programs in 2010". Here in the UK, Marketing Week said: "Insight and analytics have to be at the heart of how marketing addresses a transformed marketplace in 2010…marketing has no choice."

Ebiquity is uniquely positioned to take advantage of this trend

This increasing need for accountability and transparency within the marketing community continues to be the key driver of our growth. Already a global leader in marketing and media analytics, our ambition is to become a dominant player in this growing market, and as the marketing and media landscape evolves, so our business opportunities will increase.

Media and marketing choices confronting our clients have expanded rapidly, and as media channels multiply, brand-owners demand integrated multi-channel solutions with the ability to measure the effect of their activities across platforms. The continuing growth of digital media in particular means that our clients now seek faster, higher quality and more actionable insights that ever before - and they expect the same from traditional media too.

Significantly it is global companies, operating in multiple geographies, which are the most focused on this agenda. As western markets begin to recover from recession at different speeds, and greater opportunities appear in the BRIC markets, so the allocation of marketing and media funds across geographies has become one of the most important business decisions faced by our clients.

It is for this reason that the development of our international business has continued throughout the year (see below). In particular, the acquisition of Xtreme Information, completed in April 2010, along with the acquisition of the outstanding interest in TMC (a German advertising monitoring business, in which we already held a 50% equity position) is set to transform our Company into a leading media and marketing analytics and insight business with unsurpassed global reach.

Xtreme Information

Xtreme captures and archives over 25,000 new TV and press advertisements every month from over 60 countries worldwide. In addition, Xtreme captures internet banner advertisements for Western Europe as well as cinema, radio and outdoor advertisements for the UK and Germany.

The addition of Xtreme's international data platform to Ebiquity's UK and German advertising monitoring businesses, and in combination with Ebiquity's international analytics and consultancy business, will enable the Company to offer a genuinely distinctive global offering. In addition, the combination of international competitive monitoring and media and marketing analytics will help to increase the Company's penetration of this significant global market opportunity.

The acquisition of Xtreme is part of our longer-term vision to build an integrated media and marketing intelligence business with global reach. Together, our companies provide us with the opportunity to build a Group with:

·       A stronger management team;

·       Greater global scale;

·       A wider and more comprehensive range of products and services; and

·       A more integrated customer service offering.

In the coming months we will continue to focus on the smooth integration of our two businesses and I am pleased to report that we have made a good start. Our management teams are working closely together and we have begun to take the first steps to ensure that we can deliver the cost synergies that we have built into our projections, which are currently in line with our expectations.

International Development

For reasons described above, our international business has continued to expand significantly during the last twelve months, with revenue increasing by 32% to £8.0m.  We have also taken steps to ensure that we have strong representative offices in a growing number of geographies. In March 2010 we completed the acquisition of 82.5% of Excellence Media in Paris and have recently acquired a majority stake in Media Advisor in Milan.

In Germany, we are in the process of merging TMC with Xtreme Information GmbH, which will create a powerful competitive monitoring business in Europe's most important advertising market. This step, together with the acquisition of a 51% majority stake in Billetts Germany (which we formalised in May 2010), will enable us to combine competitive monitoring and marketing and media analytics, a combination which has already proven successful in the UK.

In the US, Billetts America in New York is now beginning to partner with Xtreme's office in Chicago to bring a combined analytics and monitoring and insight capability to our US based clients.

Outlook

Looking forward, we plan to focus on completing the integration of Xtreme Information in order to create a powerful company capable of delivering our unique set of services to a growing number of international clients.

The process of integration has started well and we are confident that we will deliver the growth and cost synergies that will drive earnings.

The Company is now well positioned to exploit the global opportunity created through the development of market leading media monitoring and analytic businesses and we are excited by the opportunity that the next phase of our development affords.

Michael Greenlees

Chief Executive Officer

23 July 2010

Financial Review

Introduction

Ebiquity plc is publishing its final results for the year ended 30 April 2010.  All results are stated before taking into account highlighted items unless otherwise stated.  These include share option costs, amortisation of intangible assets acquired through business combinations, and restructuring and other non-recurring items.

Introduction to segmental reporting presentation

From financial years commencing on or after 1 January 2009, companies that comply with IFRS are required to follow new guidelines in relation to the reporting of their segmental results (in accordance with IFRS 8, Operating Segments).  Consistent with our Interim Financial Review for the 6 months ended 31 October 2009, we are presenting this review in accordance with these new requirements.

Our two segments are "Analytics" and "Platform".  The Analytics division consists of our media auditing, consultancy and marketing effectiveness practices and our Platform division consists of advertising and editorial monitoring and publisher services.

Impact of acquisitions during the financial year

During the year, the Group made the following acquisitions:

·      100% of Xtreme Information Services Limited ("Xtreme", an international group, headquartered in the UK) was purchased on 13 April 2010 for a total consideration of £15.3m, consisting of a cash payment of £0.8m funded through a placing, the issue of 16,706,639 new ordinary shares, and convertible loan notes convertible into 13,802,861 ordinary shares.

·      The remaining 50% of Thomson Media Control GmbH & Co KG ("TMC", a German partnership) not already owned by the Group was purchased on 13 April 2010 for a total consideration of £1.2m, consisting of a £26,000 cash payment and 1,451,330 new ordinary shares.

·      82.5% of the trade and assets of Excellence Media SARL (a French company) were purchased with an effective date of 1 March 2010 for a total potential consideration of £300,000 consisting of an initial cash payment of £134,000, to be followed by two earn out cash payments to a maximum of £44,000 each.  The purchase was made by a newly created French company, Billetts France SAS, which is 82.5% owned by the Group.

The results of Xtreme and TMC are consolidated into our Platform division from 13 April 2010 (approximately 3 weeks of trade), and the results of Billetts France are consolidated into our Analytics division from 1 March 2010 (2 months of trade).

Revenue

	Year ended 30 April 2010
	Organic	Acquisitions	Total	Year ended   30 April  2009
	£'000	£'000	£'000	£'000
Analytics	15,176	21	15,197	12,842
Platform	5,001	1,020	6,021	5,633
Intersegment elimination	-	-	-	(56)
Total revenue	20,177	1,041	21,218	18,419

The only impact on our reporting of revenue under the new segmental guidelines is the addition of an intersegment eliminations line, whereby the revenue is initially shown on a gross basis. During the current year there have been no intersegment revenues.

Total Group revenue increased by 15% to £21.2m (2009: £18.4m).  On an organic basis, the revenue increase is 10% (from £18.4m to £20.2m).

The organic growth was driven by Analytics, where revenue increased by 18% to £15.2m, and now represents 75% of total organic Group revenue (2009: 70%). Within this division, revenue from international audit assignments (defined as non-UK sourced revenue, or UK sourced revenue where marketing activity is analysed in more than one country) grew by 32% to £8.0m.

Our Platform division has been challenged by the domestic nature of its advertising monitoring product in an increasingly globalised world.Revenue was down 11% on an organic basis.  This was in part due to a softening in the advertising monitoring renewal rate (by value) to 80% (2009: 84%) and slower new sales of advertising monitoring.  Offsetting this, Newslive 2.0, our new editorial monitoring product, has seen good sales traction and now accounts for 13% of this division's revenue (2009: 7%).

Gross profit  

	Year ended 30 April 2010
	Organic	Acquisitions	Total	Year ended   30 April  2009
	£'000	£'000	£'000	£'000
Analytics	8,532	(5)	8,527	6,907
Platform	2,432	639	3,071	2,938
Total gross profit	10,964	634	11,598	9,845

Gross profit for the period was up 18% to £11.6m (2009: £9.8m), yielding an improved gross margin of 55% (2009: 53%).  On an organic basis, the gross profit increase is 11% (from £9.8m to £11.0m).

Analytics gross profit has improved from £6.9m to £8.5m, with margins increasing from 54% to 56%.  The margin increase principally reflects the uplift in revenues, together with tight control of data costs and headcount increases, particularly in our UK and US businesses, but partly offset by a reallocation of staff costs from overheads to costs of sales (£175,000).

On an organic basis, Platform gross profit has reduced from £2.9m to £2.4m, with margins decreasing from 52% to 49%.  The margin decrease reflects the fall in revenue driven by our advertising monitoring platform, offset by an increase in Newslive revenue and a reduction in data capture headcount.

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. 

	Year ended 30 April 2010
	Organic	Acquisitions	Total	Year ended   30 April  2009
	£'000	£'000	£'000	£'000
Analytics	7,623	(20)	7,603	6,017
Platform	942	342	1,284	1,296
Central costs	(5,874)	(203)	(6,077)	(5,242)
Underlying operating profit excluding impact of non trading forex movements	2,691	119	2,810	2,071
Non trading forex movements	(167)	-	(167)	292
Underlying operating profit	2,524	119	2,643	2,363
Highlighted items			(2,186)	(933)
Reported operating profit			457	1,430

Underlying operating profit was £2.6m (2009: £2.4m), representing a 12% increase over the prior year.  On an organic basis, the underlying operating profit increase is 7% (from £2.4m to £2.5m). 

During the year, non trading foreign exchange losses reduced underlying operating profit by £167,000.  This compares to a gain last year of £292,000. These foreign exchange movements were predominately generated in the first half of our financial year by the US $1.2 million loan to our US subsidiary, Billetts America LLC. Excluding these foreign exchange movements, the organic underlying operating profit shows an improvement of 30%, from £2.1m to £2.7m.

To avoid a similar level of foreign exchange movements in the second half of the year we established a hedge by translating a portion of our UK term loan into a US dollar denominated loan.  Following the date that we translated our UK loan to US dollars, we generated a foreign exchange gain of £10,000.

On an organic basis, the Analytics division has continued to perform well with increased revenues from a well managed cost base.  At the gross profit level, we have seen an increase of £1.6m as explained above.  Administrative expenses have increased by £19,000, primarily as a result of an increase in foreign exchange losses (£195,000) partly offset by the staff cost allocation noted above.

The Platform division has seen a decrease at the gross profit level of £506,000 as explained above.  Administrative expenses have decreased by £152,000 due to cost cutting measures.

Central costs predominantly represent central salaries (Board, Finance, IT and HR), property costs, and central legal and advisory costs. Under previous IFRS segmental reporting, the majority of these costs were allocated to the divisions.  Central costs, excluding non trading foreign exchange movements, have increased by £632,000 on an organic basis.  The increase includes the accrual of a UK staff bonus, and an increase in legal and property costs.

In total, the organic underlying operating profit margin has decreased from 12.8% to 12.5%.  Taking into account the impact of non trading foreign exchange movements, the margin has increased from 11.2% to 13.5%.

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.

In the current financial year the non-recurring items almost exclusively relate to the acquisition of Xtreme.

	Year ended 30 April 2010			Year ended 30 April 2009
	Cash	Non-cash	Total	Cash	Non-cash	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Administrative Expenses
Recurring:
Share based expenses	-	308	308	-	313	313
Amortisation of purchased intangibles	-	412	412	-	362	362
	-	720	720	-	675	675
Non-recurring:
Acquisition integration costs	212	-	212	-	-	-
Severance costs	1,132	-	1,132	258	-	258
Property costs	-	122	122	-	-	-
	1,344	122	1,466	258	-	258
Total highlighted items - administrative expenses	1,344	842	2,186	258	675	933
Acquisition finance costs	214	-	214	-	-	-
Total highlighted items	1,558	842	2,400	258	675	933

Amortisation of purchased intangibles relates to acquisitions prior to the financial year (£362,000) and to acquisitions during the financial year (£50,000).

Severance costs relates to pre acquisition management restructuring (£159,000), senior management redundancy of the acquired companies (£651,000) and the anticipated redundancy costs associated with the merger of our acquired operations in Germany (£322,000).

Property costs represent the future onerous lease costs of vacating certain offices during the restructuring process.

Acquisition finance costs relate to costs incurred in cancelling both Ebiquity and Xtreme's former borrowing arrangements in order to obtain the refinancing required for the acquisition.

As at 30 April 2010, £872,000 of the £1,558,000 had been settled in cash.

Profit before tax

	Year ended 30 April 2010  £'000	Year ended 30 April 2009  £'000
Reported operating profit	457	1,430
Underlying net finance costs	(138)	(243)
Highlighted finance costs	(214)	-
Share of loss of associates	(5)	(14)
Profit before tax	100	1,173

Underlying net finance costs were £138,000 (2008: £243,000) which reflects a reducing debt position prior to the acquisitions late in the year.

Share of loss of associates represents our share of the losses of Billetts Germany GmbH, a company in which we had a 10% stake throughout the financial year.  On 1 May 2010, this stake was increased to 51%.

Underlying profit before tax was up 19% to £2.5m (2009: £2.1m).  Reported profit before tax is £100,000 (2009: £1.2m). 

Taxation

	Year ended 30 April 2010  £'000	Year ended 30 April 2009  £'000
Current tax charge	467	349
Deferred tax (credit)/charge	(536)	735
Total tax (income)/charge	(69)	1,084

The increase in the current tax charge reflects an increase in our underlying profitability, particularly in the US where our brought forward tax losses have now been fully utilised.

The deferred tax credit for the year is largely due to deferred tax on share options, following the significant increase in the Company's share price.  The prior year charge was largely due to a reduction in the level of brought forward recognised tax losses.

Equity

During the year, 19,532,969 new ordinary shares were issued in relation to the acquisitions during the year, thus increasing our issued share capital to 51,672,404 shares.  Also in relation to the acquisitions, 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.

Consistent with prior periods, the Board is not currently recommending the payment of a dividend.

Earnings per share

Underlying diluted earnings per share was 5.55p (2009: 5.28p). Excluding the impact of acquisitions, the underlying EPS would have been 5.11p.  This marginal decrease on the prior year is caused by two main factors: firstly, an increase in the number of potentially dilutive number of shares caused by an increase in the average share price during the year; and secondly, an increase in the effective tax rate due to historic tax losses in the US being fully utilised during the year.   

The Group reports a diluted EPS of 0.46p (2009: 0.26p).  

Operating cashflow and net debt

	As at 30 April 2010  £'000	As at 30 April 2009  £'000
Net cash from operating activities	2,421	827
Cash	5,243	1,246
Loans to associates	285	362
Debt	(7,569)	(3,800)
Net debt	(2,041)	(2,192)

Net cash from operating activities for the year was £2.4m (2009: £0.8m), reflecting the underlying profitability of the Group, together with an increase in trade payables due largely to the timings of payment of acquisition related costs. 

At 30 April 2010, the cash balance is high due to the timing of acquisition cost settlement and integration implementation.

Loans to associates reflect loans made to Billetts Germany GmbH.  The full balance is repayable on demand.

Financing and treasury

To coincide with the timing of the acquisitions of Xtreme and TMC on 13 April 2010, the Group undertook a refinancing initiative.  Ebiquity's outstanding debt with Bank of Scotland (£3.2m) and Xtreme's outstanding debt with Barclays (£2.3m) were repaid.  New facilities have been taken out with Bank of Ireland, and these comprise of a term loan of £8.0m, a revolving credit facility of £2.5m and an acquisition facility of £1.5m, all with a maturity date of 31 March 2014.  Other than for the repayment of existing loans, the term loan is available for use towards the acquisition costs and the cost of integrating the businesses.  The revolving credit facility is available for integration costs and working capital requirements.

The Group's hedging strategy is to minimise fluctuations and exposures to interest rate and foreign exchange movements.

Interest rate risk is mitigated through the use of floating to fixed interest rate swaps, however there were no such instruments outstanding at the year end following the refinancing in April 2010.  Subsequent to the year end, the Group swapped 70% of its term loan into fixed rate borrowings for the period from February 2011 to April 2014.

The Group is exposed to currency risk on foreign currency trading and intercompany balances, and also on the foreign currency bank accounts which it holds.  These risks are offset by the holding of certain foreign currency bank borrowings and the use of forward currency contracts.

During the year, the Group continued to trade comfortably within all of its banking facilities and covenants prior to the refinancing. 

Andrew Beach

Chief Financial Officer

23 July 2010

Consolidated Income Statement

for the year ended 30 April 2010

		Year ended 30 April 2010			Year ended 30 April 2009
		Before	Highlighted		Before	Highlighted
		highlighted	items		highlighted	items
		items	(note 2)	Total	items		Total
	Note	£'000	£'000	£'000	£'000	£'000	£'000
Revenue		21,218	-	21,218	18,419	-	18,419
Cost of Sales		(9,620)	-	(9,620)	(8,574)	-	(8,574)
Gross Profit		11,598	-	11,598	9,845	-	9,845
Administrative expenses		(8,955)	(2,186)	(11,141)	(7,482)	(933)	(8,415)
Operating profit		2,643	(2,186)	457	2,363	(933)	1,430
Finance income		14	-	14	25	-	25
Finance expenses		(152)	(214)	(366)	(268)	-	(268)
Net finance costs		(138)	(214)	(352)	(243)	-	(243)
Share of loss of associates		(5)	-	(5)	(14)	-	(14)
Profit before taxation		2,500	(2,400)	100	2,106	(933)	1,173
Taxation		(290)	359	69	(1,366)	282	(1,084)
Profit for the year		2,210	(2,041)	169	740	(651)	89
Attributable to:
Equity holders of the parent		2,210	(2,041)	169	738	(651)	87
Minority interests		-	-	-	2	-	2
		2,210	(2,041)	169	740	(651)	89
Earnings per share
Basic	4			0.50p			0.27p
Diluted	4			0.46p			0.26p

Consolidated Statement of Comprehensive Income

for the year ended 30 April 2010

		Year ended 30 April 2010	Year ended 30 April 2009
		£'000	£'000
Profit for the year		169	89
Other comprehensive income:
Exchange differences on translation of overseas subsidiary		45	(180)
Total comprehensive profit/(loss) for the year		214	(91)
Attributable to:
Equity holders of the parent		214	(93)
Minority interest		-	2
		214	(91)

Consolidated Statement of Financial Position

as at 30 April 2010

		30 April 2010	30 April 2009
	Note	£'000	£'000
Non current assets
Goodwill	5	30,235	8,754
Other intangible assets	6	9,983	2,795
Property, plant & equipment		2,044	971
Investment in joint ventures		-	115
Investment in associates		12	17
Loans and other financial assets		-	77
Deferred tax asset		670	142
Total non current assets		42,944	12,871
Current assets
Loans and other financial assets		679	362
Trade & other receivables		12,437	5,932
Cash & cash equivalents		5,243	1,246
Total current assets		18,359	7,540
Total assets		61,303	20,411
Current liabilities
Other financial liabilities		(2,077)	(2,513)
Trade & other payables		(4,922)	(1,852)
Current tax liabilities		(425)	(306)
Provisions		(650)	(51)
Accruals & deferred income		(11,206)	(4,266)
Total current liabilities		(19,280)	(8,988)
Non current liabilities
Other financial liabilities		(5,627)	(1,332)
Provisions		(855)	(99)
Deferred tax liability		(2,608)	(565)
Total non current liabilities		(9,090)	(1,996)
Total liabilities		(28,370)	(10,984)
Total net assets		32,933	9,427
Capital & reserves
Share capital		12,918	8,035
Share premium		2,259	1,846
Convertible loan note reserve		9,445	-
Merger reserve		3,667	(4,504)
Translation reserve		(72)	(117)
Retained earnings		4,716	4,167
Capital and reserves attributable to the equity holder of the parent		32,933	9,427
Minority interest		-	-
Total equity		32,933	9,427

Consolidated Statement of Changes in Equity

for the year ended 30 April 2010

	Share capital	Share premium	Convertible loan note reserve	Merger reserve	Translation reserve	Retained earnings	Total
	£'000	£'000	£'000	£'000	£'000	£'000	£'000
1 May 2008	8,035	1,846	-	(4,504)	63	3,765	9,205
Total comprehensive income for the year	-	-	-	-	(180)	89	(91)
Share options charge	-	-	-	-	-	313	313
30 April 2009	8,035	1,846	-	(4,504)	(117)	4,167	9,427
Total comprehensive income for the year	-	-	-	-	45	169	214
Shares issued for cash	344	433	-	-	-	-	777
Share issue costs	-	(20)	-	-	-	-	(20)
Acquisition of subsidiaries	4,539	-	9,662	8,171	-	-	22,372
Loan note issue costs	-	-	(217)	-	-	-	(217)
Share options charge	-	-	-	-	-	308	308
Deferred tax on share options	-	-	-	-	-	72	72
30 April 2010	12,918	2,259	9,445	3,667	(72)	4,716	32,933

Consolidated Cashflow Statement

for the year ended 30 April 2010

	Year ended	Year ended
	30 April 2010	30 April 2009
	£'000	£'000
Cashflows from operating activities
Profit before taxation	100	1,173
Adjustments for:
Depreciation	352	364
Amortisation	582	487
Capitalised development costs write off	49	106
Unrealised foreign exchange loss/(gain)	194	(298)
Share option charges	308	313
Finance income	(14)	(25)
Finance expenses	366	268
Call/put options valuation (net)	(21)	(6)
Share of loss of associates	5	14
	1,921	2,396
Increase in trade receivables	(1,354)	(10)
Increase/(decrease) in trade payables	2,306	(951)
Increase/(decrease) in provisions	370	(71)
Cash generated from operations	3,243	1,364
Net finance expenses paid	(271)	(268)
Income taxes paid	(551)	(269)
Net cash from operating activities	2,421	827
Cashflows from investing activities
Acquisition of subsidiaries, net of cash acquired	(326)	-
Purchase of property, plant & equipment	(164)	(454)
Purchase of intangible assets	(135)	(511)
Purchase of investments	-	(26)
Purchase of investments in associates	-	(17)
Repayment/(grant) of loan to associates	66	(362)
Finance income	14	25
Net cash used in investing activities	(545)	(1,345)
Cashflows from financing activities
Proceeds from issue of share capital	750	-
Proceeds from long term borrowings	8,000	1,113
Repayment of bank loans	(5,884)	(1,013)
Bank loan fees paid	(406)	-
Bank securities paid	(100)	-
Loan note issue costs	(217)	-
Loan note settlement	-	(51)
Net cashflow from financing activities	2,143	49
Net increase/(decrease) in cash, cash equivalents and bank overdrafts	4,019	(469)
Effect of unrealised foreign exchange (losses)/gains	(22)	28
Cash, cash equivalents and bank overdraft at beginning of period
	1,246	1,687
Cash, cash equivalents and bank overdraft at
end of period	5,243	1,246

1.  Accounting policies

Basis of preparation

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs) issued by the International Accounting Standards Board (IASB) as adopted by European Union (Adopted IFRSs) and with those parts of the Companies Act 2006 applicable to companies preparing their financial statements under Adopted IFRSs.

The consolidated financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivative instruments) at fair value through the income statement.

2.  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.

	Year ended 30 April 2010			Year ended 30 April 2009
	Cash	Non-cash	Total	Cash	Non-cash	Total
	£'000	£'000	£'000	£'000	£'000	£'000
Administrative Expenses
Recurring:
Share based expenses	-	308	308	-	313	313
Amortisation of intangibles	-	412	412	-	362	362
		720	720	-	675	675
Non recurring:
Acquisition integration costs	212	-	212	-	-	-
Severance costs	1,132	-	1,132	258	-	258
Property costs	-	122	122
	1,344	122	1,466	258	-	258
Total highlighted items - administrative expenses	1,344	842	2,186	258	675	933
Acquisition finance costs	214	-	214	-	-	-
Total highlighted items	1,558	842	2,400	258	675	933

Amortisation of intangibles relates to acquisitions prior to the financial year (£362,000) and to acquisitions during the financial year (£50,000). 

Severance costs relates to pre acquisition management restructuring (£159,000), senior management redundancy of the acquired companies (£651,000) and the redundancy costs associated with the merger of our acquired operations in Germany (£322,000).

Property costs represent the future onerous lease costs of vacating certain offices during the restructuring process. Acquisition finance costs relate to costs incurred in cancelling both Ebiquity and Xtreme's former borrowing arrangements in order to obtain the refinancing required for the acquisition.

As at 30 April 2010, £872,000 of the £1,558,000 had been settled in cash.

3. Dividends

No interim dividend is being proposed.

4.  Earnings per share

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

	Year ended 30 April 2010	Year ended 30 April 2009
	£'000	£'000
Earnings for the purpose of basic earnings per share being net profit attributable to equity holders of the parent	169	87
Adjustments:
Deferred tax	(536)	735
Highlighted items - recurring	720	675
Highlighted items - non recurring	1,466	258
Highlighted items - finance costs	214	-
Earnings for the purpose of underlying earnings per share	2,033	1,755
Number of shares:
Weighted average number of ordinary shares for the purpose of basic earnings per share	33,692,309	32,139,435
Effect of dilutive potential ordinary shares:
Share options	2,929,073	1,082,978
Weighted average number of ordinary shares for the purpose of diluted earnings per share	36,621,382	33,222,413
Basic earnings per share	0.50p	0.27p
Diluted earnings per share	0.46p	0.26p
Underlying basic earnings per share	6.03p	5.46p
Underlying diluted earnings per share	5.55p	5.28p

Note that certain share options have been excluded from the calculation of diluted EPS as their exercise price is greater than the weighted average share price during the year (i.e. they are out-of-the-money) and therefore it would not be advantageous for the holders to exercise those options.  13,186 (2009: 1,601,673) share options have not been included within the diluted earnings per share calculation at 30 April 2010 as they are anti-dilutive for the periods presented.  These shares could potentially dilute earnings per share in the future.

5.  Goodwill

		£'000
Cost and net book value
At 30 April 2008 and 2009		8,754
Acquisitions		21,481
At 30 April 2010		30,235

The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill may be impaired.  The recoverable amounts are determined from value in use calculations.  The key assumptions for the value in use calculations are those regarding the discount rates and growth rates.  Management estimates discount rates using rates that reflect current market assessments of the time value of money and risk specific to the cash-generating units.   The group prepares three-year cash flow forecasts, and these are consistent with the business acquisitions plans.  The cash flows have been discounted at 10% (2009: 10%).  No impairment of goodwill was recognised in 2010 (2009: £nil).

Goodwill has been allocated to the following CGUs:

	Year ended 30 April 2010	Year ended 30 April 2009
	£'000	£'000
Analytics	8,960	8,754
Platform	21,275	-
	30,235	8,754

6.  Other intangible assets

	Capitalised  development costs	Purchased intangible assets	Total intangible assets
	£'000	£'000	£'000
Cost
At 1 May 2008	572	3,395	3,967
Additions	511	-	511
Write off	(131)	-	(131)
At 30 April 2009	952	3,395	4,347
Additions	135	-	135
Acquisitions	-	7,707	7,707
Write off	(49)	-	(49)
Foreign exchange	-	(23)	(23)
At 30 April 2010	1,038	11,079	12,117
Amortisation
At 1 May 2008	(77)	(1,014)	(1,091)
Provision for the year	(125)	(362)	(487)
Write off	26	-	26
At 30 April 2009	(176)	(1,376)	(1,552)
Provision for the year	(170)	(412)	(582)
Foreign exchange	-	-	-
At 30 April 2010	(346)	(1,788)	(2,134)
Net book value
At 30 April 2010	692	9,291	9,983
At 30 April 2009	776	2,019	2,795

7.  Acquisitions

Xtreme

On 13 April 2010 the Group acquired 100% of the issued share capital of Xtreme Information Services Limited ("Xtreme") for total consideration of £15,251,000. 

Xtreme contributed £898,000 to revenue and £134,000 to profit before tax and highlighted items and incurred costs that were included in highlighted items of £1,409,000 for the period between the date of acquisition and the year end.

The carrying value and provisional fair value of the net assets at the date of acquisition were as follows:

	Carrying value	Recognised on acquisition
	£'000	£'000
Intangible assets	-	6,447
Property, plant and equipment	1,147	1,147
Trade and other receivables	4,828	4,828
Deferred tax asset	35	35
Cash and cash equivalents	1,302	1,302
Trade and other payables	(6,308)	(6,388)
Borrowings	(10,417)	(10,417)
Other creditors and provisions	(665)	(836)
Deferred tax liability	-	(1,805)
Net liabilities acquired	(10,078)	(5,687)
Goodwill arising on acquisition		20,938
		15,251

The goodwill is attributable to the assembled workforce, which does not qualify for separate recognition, and synergies expected from combining the operations of Xtreme with the existing operations of the Group.

Purchase consideration:

	£'000
Cash	770
Fair value of 16,706,639 shares issued	11,695
Convertible loan notes issued	9,662
Direct costs relating to the acquisition	1,398
Less: payments to vendor to acquire outstanding debt	(8,274)
Total purchase consideration	15,251

Net cash out flow arising on acquisition:

	£'000
Purchase consideration settled in cash	770
Direct costs relating to the acquisition	1,398
Less cash and cash equivalents in subsidiary acquired	(1,302)
Net cash outflow on acquisition	866

TMC

On 13 April 2010 the Group acquired the remaining 50% of the issued share capital of Thomson Media Control GmbH & Co KG ("TMC") for total consideration of £1,181,000, taking the Group's total shareholding in TMC to 100%.

TMC contributed £128,000 to revenue and £12,000 to profit before tax and highlighted items and incurred costs that were included in highlighted items of £7,000 for the period between the date of acquisition and the year end.

The carrying value and provisional fair value of the net assets at the date of acquisition were as follows:

	Carrying value	Recognised on acquisition
	£'000	£'000
Intangible assets	-	1,130
Property, plant and equipment	112	112
Trade and other receivables	517	517
Cash and cash equivalents	184	184
Trade and other payables	(711)	(711)
Other creditors and provisions	(73)	(73)
Deferred tax liability	-	(316)
Net assets acquired	29	843
Goodwill arising on acquisition		338
		1,181

The goodwill is attributable to the assembled workforce, which does not qualify for separate recognition, and synergies expected from combining the operations of TMC with the existing operations of the Group.

Purchase consideration:

	£'000
Cash	26
Fair value of 1,451,330 shares issued	1,016
Initial 50% investment previously held as joint venture	115
Direct costs relating to the acquisition	24
Total purchase consideration	1,181

Net inflow arising on acquisition:

	£'000
Purchase consideration settled in cash	26
Direct costs relating to the acquisition	24
Less cash and cash equivalents in subsidiary acquired	(184)
Net cash inflow on acquisition	(134)

Other acquisitions

On 1 March 2010, the Group's 82.5% owned subsidiary, Billetts France SARL, acquired the trade of Excellence Media for initial cash consideration (including acquisition costs) of €247,000 (£213,000).  Contingent deferred consideration is payable and has been recognised to a maximum of €100,000 (£88,000).  The acquisition resulted in intangible assets of £130,000 and goodwill of £205,000.

If all of the above acquisitions had been completed on 1 May 2009, Group revenue would have been £41,226,000 and Group operating profit before highlighted items would have been £4,060,000, before any potential synergistic benefits are taken into account.

Subsequent to the year end, on 1 May 2010, the Group exercised a call option to increase its stake in its associated undertaking, Billetts Germany GmbH, from 10% to 51%.

On 23 June 2010, the Group acquired a 51% stake in Media Advisor, a privately held independent media consultancy based in Milan. The business was acquired from management, who will continue to hold 49% of the company.

8.  Financial Information

The financial information set out in this announcement does not constitute the company's statutory accounts for the years ended 30 April 2010 or 30 April 2009.

Statutory accounts for the years ended 30 April 2010 and 30 April 2009 have been reported on by the Independent Auditors.

Their reports were unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

The statutory accounts for the year ended 30 April 2010 will be delivered to the Registrar of Companies following the company's annual general meeting. Statutory accounts for the year ended 30 April 2009 have been delivered to the Registrar of Companies.

 

END

 

 

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