Final Results
Immedia Broadcasting plc
24 March 2005
24 March 2005
IMMEDIA BROADCASTING PLC
Preliminary Results for the year ended 31 December 2004
Immedia Broadcasting PLC ('Immedia'), the UK's leading provider of live tailored
radio for retail, announces its preliminary results for the year to 31 December
2004.
Highlights
2004 2003
Turnover £2.97m £1.88m
Operating profit/(loss) before depreciation and amortisation, £138.2k £(17.7)k
exceptional items and interest
Loss after tax £(367.4)k £(679.1)k
Basic loss per share (3.29)p (9.33)p
Net assets £2.725m £3.093m
Operating Highlights
• Launched two new retail stations for Vitusapotek and Dixons
• In addition trialed two live retail stations
• Currently in talks with a number of major retailers which may result
in pilots in the near future
• Roll out of Impulse Live to 5,000 stores is ongoing. We have
installed 3,700 so far, including 1,200 Spar stores
• Signed agreement with Unique to outsource and grow media sales
division
• New product launch of Radiovision, bringing the two media together
in-store
Commenting on the results and prospects, Bruno Brookes, Chief Executive, said: '
Immedia's unique offering presents a highly compelling business case to
retailers and we believe we are well placed to significantly develop the
business further. The concept which Immedia created is just beginning to mature
and opportunities to win contracts are healthier. Whilst we continue to focus on
the UK market, other opportunities are within reach in other territories.
Current trading is good and we remain excited about our prospects.'
For further information please contact:
Immedia Broadcasting Plc gcg hudson sandler
Bruno Brookes - Chief Executive Nick Lyon / Andrew Hayes
01635 572 800 020 7796 4133
Chairman's statement
I am pleased to be able to report that the Company is now trading profitably
before depreciation, amortisation and interest in its first year as a listed
company.
There is a full review of the business and of the sector in which Immedia is
operating in the CEO's Review below and I will not repeat what is in there.
However, I believe it is important for shareholders to understand the two
important dynamics in the business that are covered in more depth in the CEO's
Report.
Firstly, there is continuing interest from a number of major High Street names
in in-store media and in the unique Immedia solution.
Secondly, we are also seeing a growing awareness amongst advertisers and their
media buying agencies of the sales effectiveness of the in-store media sector
and a willingness to move marketing funds into the sector.
I believe these two dynamics combined provide a strong base from which the
Company can move forward in the coming year.
Geoff Howard-Spink
Non-executive Chairman
23 March 2005
Chief Executive's Review
I am pleased to present our results for the twelve month period ending 31
December 2004 and to be able to report further progress in the development of
Immedia's business.
The results represent our fourth year of growth and a move into trading
profitability before depreciation, amortisation and interest. In the last year,
there has been a greater opportunity for Immedia to grow its list of clients, as
retailers and media buyers have improved their understanding of our strong
offering. Accordingly, we believe we have further reinforced Immedia's position
as market leader in the UK for the provision of live in-store radio stations.
Immedia's radio stations continue to demonstrate their commercial effectiveness
for retailers, supported by impressive case studies that show excellent ROI for
advertisers. Media buying agencies are developing specialist 'out of home' media
buying divisions to focus on this new media space. Trade suppliers have
increasingly found their advertising campaigns effective, supported by credible
independent research. This has resulted in the announcement of an exclusive
advertising deal for the chocolate sector for 'Impulse Live'.
New Product Development
There is no doubt that as the 'out of home' digital media industry develops we
are continuing to impress retailers with our key knowledge and understanding of
how to engage audiences. This is quite simply due to high quality content,
driven by experienced presenters with the 'common touch'. Immedia's knowledge in
engaging audience stems from its experience in building similar audiences and
loyalty in terrestrial radio, both in the BBC and commercial sector. We believe
that our competitors (particularly in the plasma screen sector) are
concentrating too much on the 'technology' and less on what the in-store media
will do to generate more value for the consumer and drive incremental sales.
Whilst there has been considerable focus on screen networks like Tesco TV, there
is now a greater realisation that the live radio offering brings a human touch
which looped adverts on a plasma screen simply cannot do.
For this reason, Immedia have gone one step further to develop an additional
product known as Radiovision. Working with QM Group we have developed a unique
offering where radio works in unison with plasma screens in-store. This
impressive technology will see live in-store radio working alongside specially
consolidated video that can be instantly triggered by presenters when they
explain product or services. Radiovision was launched at the Multi Channel
Retail show in London on the 15 March 2005.
We are about to run our first trial with a major retailer, and have been asked
to tender the Radiovision product for another.
Immedia floated on AIM on the 12 December 2003 and the net proceeds from the
admission to AIM were used to:
• continue rollout of the Impulse Live Network to Convenience and CTN
sector;
• provide working capital for the group;
• repay certain outstanding loans and debts; and
• acquire a business and certain assets from BBME.
In total £2.46m of funds were used during the year, sourced from short-term
deposits (£2.2m) bank balances (£0.22m) and interest received (£0.04m). These
were used for capital expenditure (£1.17m), the repayment of other loans (£0.5m)
and financing working capital growth through increased debtors (£0.53m) and
payment of creditors (£0.41m).
Summary of Immedia's business
Immedia is the market leader (by clients and sites installed) in the UK for the
provision of in-store Live Radio services. We develop an original new radio
station around the retailer's brand and personality, featuring live presenters,
music to suit attitudinal mood, and information on product offerings and staff
initiatives. Each station is launched and broadcast from our studios in Newbury
and broadcast live via encrypted satellite and/or broadband networks into their
store estate. We provide a complete turnkey service, to include speaker
installations and maintenance. All of the sound materials including adverts and
features are created in-house. Immedia also sells airtime on the radio stations
for the retailer. Immedia recently announced its agreement with Unique Group to
develop the sales force to sell airtime on all of Immedia's radio stations.
Immedia's model is dependant on a mixture of subscription fees from retailers
together with advertising revenues. All of our current radio stations apart from
'Impulse Live' rely on this revenue model. Impulse Live is now the largest
in-store media network in the UK, with the service moving towards a presence in
5,000 convenience stores (currently in 3,700 outlets) and which is wholly owned
by Immedia. The radio station broadcasts its tailored content to the convenience
store sector. Since Immedia owns the entire network, it receives 100% of the
airtime revenues. However, as the network grows with new convenience retail
groups, there is the opportunity to generate further subscription revenue for
the provision of 'traffic managed' specific content and branding. Spar was the
first group to sign to this arrangement. We are confident that other convenience
retail groups will choose to join the Impulse network, as the 'traffic managed'
network system is a more cost effective solution offering a superior product.
Immedia Channels
Impulse Live
'Impulse Live' was launched to the convenience sector in 2002. The radio network
is the largest in store media in the UK influencing 22 million visitors each
year. The network includes Spar stores, Londis, Texaco, Star News, Mills Group
and many of the leading independents.
Spar stores signed an exclusive contract to join the Impulse network, and the
rollout is continuing: currently 1,200 Spar stores receive Impulse Live.
Over 100 household brands have advertised on the Impulse Channel, of which 60%
re-book airtime campaigns. In-store advertising is a fast growing marketing
initiative and Immedia's radio stations such as Impulse Live communicate with
customers at the point of purchase.
Other bespoke Channels
Dixons Live - Lloyds Pharmacy Live - Vitusapotek Idag - Iceland Live - Ikea
Live.
In May 2003 Immedia successfully rolled out Lloyds Pharmacy Live to 1,360 Lloyds
pharmacies across the UK.
This year Immedia signed two new contracts with Dixons and Vitusapotek
(Norwegian pharmaceutical retailer). The Company has also started a trial with
Ikea for Ikea Live in its stores.
In addition, Immedia is currently in talks with a number of major retail clients
which may result in pilots or roll-outs in the future.
Current trading and future prospects
Immedia's unique offering presents a highly compelling business case to
retailers and we believe we are well placed to significantly develop the
business further. The concept which Immedia created is just beginning to mature
and opportunities to win contracts are healthier. Whilst we continue to focus on
the UK market, other opportunities are within reach in other territories.
Immedia has already proved its ability to launch stations in a foreign language
with the success of Vitusapotek in Norway. Current trading is good and we remain
excited about our prospects.
Bruno Brookes
Chief Executive 23 March 2005
Consolidated Profit and Loss account
for the year ended 31 December 2004
Note 2004 2003
£ £
Turnover 4 2,969,651 1,877,345
Cost of sales (1,342,677) (870,975)
Gross profit 1,626,974 1,006,370
Administrative expenses (2,032,957) (1,620,733)
Operating loss (405,983) (614,363)
Interest receivable and similar income 63,011 5,118
Interest payable and similar charges (24,476) (69,647)
Operating profit/(loss) before depreciation and amortisation, 138,174 (17,747)
exceptional items and interest
Depreciation and amortisation (544,157) (293,761)
Exceptional items - (302,855)
Net interest receivable/(payable) 38,535 (64,529)
Loss on ordinary activities before taxation (367,448) (678,892)
Tax on loss on ordinary activities - (192)
Loss for the financial year (367,448) (679,084)
Loss per share - basic 5 (3.29) p (9.33) p
In the two years to 31 December 2004, the company made no acquisitions and had
no discontinued operations.
There are no recognised gains or losses, other than the loss for the financial
year. Accordingly no statement of total recognised gains and losses is given.
There is also no difference between the loss on ordinary activities before
taxation and the retained loss for the financial years stated above, and their
historical cost equivalents.
Consolidated Balance Sheet
at 31 December 2004
2004 2003
£ £
Fixed assets
Intangible assets 8 73,267 109,900
Tangible assets 9 1,790,232 1,136,556
1,863,499 1,246,456
Current assets
Stocks - 1,115
Debtors 10 1,125,604 597,469
Cash at bank and in hand 1,000,215 3,320,555
2,125,819 3,919,139
Creditors: amounts falling due within one year 11 (1,053,565) (1,312,394)
Net current assets 1,072,254 2,606,745
Total assets less current liabilities 2,935,753 3,853,201
Creditors: amounts falling due after more then one year 2 (200,000) (750,000)
Provisions for liabilities and charges (10,000) (10,000)
Net assets 2,725,753 3,093,201
Capital and reserves
Called up share capital 13 1,170,791 1,170,791
Share premium account 14 3,372,960 3,372,960
Merger reserve 14 2,245,333 2,245,333
Profit and loss account 14 (4,063,331) (3,695,883)
Equity shareholders' funds 15 2,725,753 3,093,201
Consolidated Cash Flow Statement
For the year ended 31 December 2004
Note 2004 2003
£ £
Cash outflow from operating activities 6 (789,491) (29,604)
Return on investments & servicing of finance
Interest received 63,011 5,118
Interest paid (24,476) (69,647)
Net cash inflow/(outflow) from returns on investments & servicing of 38,535 (64,529)
finance
Taxation
Corporation tax paid - (192)
Capital expenditure & financial investment
Payments to acquire tangible fixed assets (1,170,938) (926,477)
Payments to acquire investments - (33,000)
Receipts from sales of tangible fixed assets 815 1,210
Net cash outflow on capital expenditure (1,170,123) (958,267)
Net cash outflow before management of liquid resources and financing (1,921,079) (1,052,592)
Management of liquid resources
Cash withdrawn from/(placed on) short-term deposit 2,200,000 (3,200,000)
Financing
New other loans - 650,000
Repayment of other loans (500,000) -
Repayment of capital element of finance leases and hire purchase rental
payments - (12,000)
Issue of ordinary share capital - 3,782,051
Net cash (outflow)/inflow from financing (500,000) 4,420,051
(Decrease)/increase in cash in the year (221,079) 167,459
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash in the year (221,079) 167,459
Cash (outflow)/inflow from (decrease)/increase in liquid resources (2,200,000) 3,200,000
Cash outflow/(inflow) from decrease/(increase) in debt 500,000 (650,000)
Cash outflow from decrease in lease financing - 12,000
Movement in net (debt)/funds (1,921,079) 2,729,459
Net funds/(debt) at 1 January 2,547,937 (181,522)
Net funds at 31 December 7 626,858 2,547,937
Notes to the preliminary results
1 Basis of preparation
The financial information set out above does not constitute the company's
statutory accounts for the year ended 31 December 2004 (but is derived from
those accounts, which cover the company's first financial year). Statutory
accounts for 2003 for the company's trading subsidiary Immedia Broadcast Limited
have been delivered to the registrar of companies: the auditors have reported on
those accounts; their reports were unqualified and did not contain statements
under section 237 (2) or (3) of the Companies Act 1985. The 2004 accounts of
Immedia Broadcasting Plc will be delivered to the registrar of companies
following the company's Annual General Meeting. The Annual Report and Notice of
Annual General Meeting will be posted to the shareholders by 3 May 2005. This
preliminary announcement was approved by the Board on 23 March 2005.
Basis of consolidation: on 20 November 2003 a new holding company was brought
into the group. This was carried out by a share for share exchange and the
existing shareholders of Immedia Broadcast Limited received 1,000 10p Ordinary
shares in Immedia Broadcasting Plc for every share held. There was no cash
consideration. This group reconstruction has been accounted for as a merger as
permitted by FRS 6 acquisitions and mergers. Following these principles the
entities are combined. This transaction qualifies under section 131 of the
Companies Act 1985, which exempts the parties from creating share premium on
this transaction. The difference between the investment value carried in
Immedia Broadcasting Plc and the capital base of Immedia Broadcast Limited is
taken to a merger reserve. Under the merger method, subsidiaries acquired are
included as if they had always been members of the group.
2 Employee Benefit Trust
The Group operates an employee benefit trust (EBT) for the benefit of its
employees through Immedia Broadcasting Trustees Limited which acts as Trustee.
At 31 December 2004 and 2003 the EBT held 551,000 shares in Immedia Broadcasting
Plc in trust for employees against the future exercise of options granted under
the Immedia EMI Share Option Scheme. Under UITF abstract 38 - Accounting for
Employee Share Option Trusts - the own shares held in the trust have been
deducted from shareholders' funds (note 15).
3 Taxation
The charge for corporation tax is based on the loss for the year and takes into
account taxation deferred because of timing differences between the treatment of
certain items for taxation and accounting purposes. Deferred tax is recognised,
without discounting, in respect of all timing differences between the treatment
of certain items for taxation and accounting purposes which have arisen but not
reversed by the balance sheet date, except as otherwise required by FRS 19.
Notes (continued)
4 Turnover and segmental analysis
Turnover, which is stated net of value added tax, represents amounts invoiced to
third parties. All turnover arose from the group's principal activity of
marketing services.
Region of origin
All group activities originate in the United Kingdom.
United Kingdom Europe Total United Europe Total
Kingdom
2004 2004 2004 2003 2003 2003
£ £ £ £ £ £
Region of destination
Sales to third parties 2,390,938 578,713 2,969,651 1,877,345 - 1,877,345
Net assets
Segment net assets 1,843,200 175,010 2,018,210 589,672 - 589,672
Unallocated net assets 707,543 2,503,529
Total net assets 2,725,753 3,093,201
The split of operating profit has not been provided as it is commercially
sensitive and in the view of the directors disclosure would be damaging to the
business.
5 Loss per share
2004 Number 2003 Number
Weighted average number of shares in issue 11,707,910 7,829,951
Less own shares (551,000) (551,000)
Weighted average number of shares in issue for basic loss per share 11,156,910 7,278,951
The basic and diluted loss per share are calculated using the loss for the
financial period of £367,448 (2003: loss £679,084). In accordance with FRS14
the diluted basic loss per share is stated as the same amount as basic as there
is no dilutive effect.
Notes (continued)
6 Reconciliation of operating loss to net cash flow from
operating activities
2004 2003
£ £
Operating loss (405,983) (614,363)
Depreciation of tangible and intangible assets 544,157 293,761
Loss on disposal of fixed assets 8,923 1,212
Decrease /(increase ) in stocks 1,115 (1,115)
(Increase) in debtors (528,135) (378,478)
(Decrease) increase in creditors (409,568) 669,379
Net cash outflow from operating activities (789,491) (29,604)
7 Analysis of changes in net funds during the year
Cash at bank Short-term Other loans Total
deposits
and in hand
£ £ £ £
At beginning of year 97,937 3,200,000 (750,000) 2,547,937
Net cash flow (221,079) (2,200,000) 500,000 (1,921,079)
At end of year (123,142) 1,000,000 (250,000) 626,858
8 Intangible fixed assets
Goodwill
£
Cost
At beginning and end of year 109,900
Amortisation
At beginning of year -
Charge for year 36,633
At end of year 36,633
Net book value
At 31 December 2004 73,267
At 31 December 2003 109,900
Notes (continued)
9 Tangible fixed assets
Plant and Fixtures & Network Total
machinery fittings Equipment
£ £ £ £
Cost
At beginning of year 328,779 146,449 1,185,461 1,660,689
Additions 239,144 69,343 862,451 1,170,938
Disposals (1,790) (31,683) (16,859) (50,332)
At end of year 566,133 184,109 2,031,053 2,781,295
Depreciation
At beginning of year 170,884 63,367 289,882 524,133
Charge for year 127,089 54,404 326,031 507,524
On disposals (1,790) (28,970) (9,834) (40,594)
At end of year 296,183 88,801 606,079 991,063
Net book value
At 31 December 2004 269,950 95,308 1,424,974 1,790,232
At 31 December 2003 157,895 83,082 895,579 1,136,556
10 Debtors
2004 2003
£ £
Trade debtors 837,809 352,566
Taxation and social security - 98,378
Other debtors and prepayments 287,795 146,525
1,125,604 597,469
All debtors are due within one year.
Notes (continued)
11 Creditors: amounts falling due within one year
2004 2003
£ £
Bank overdrafts 123,357 22,618
Other loans (note 12) 50,000 -
Trade creditors 389,670 925,228
Other taxation and social security 43,987 35,749
Other creditors 3,603 1,691
Accruals and deferred income 442,948 327,108
1,053,565 1,312,394
12 Creditors: amounts falling due after more then one year
2004 2003
£ £
Other loans 200,000 750,000
Other loans comprise unsecured convertible loan facilities aggregating £250,000
granted on 30 September 2003. The loan facilities are wholly repayable on 19
September 2006 or may be converted into an aggregate of 238,031 fully paid
ordinary shares. They carry a fixed interest rate of 8%.
2004 2003
£ £
Other loans fall due:
In one year or less, or on demand (note 11) 50,000 -
Between one and two years 200,000 750,000
250,000 750,000
Notes (continued)
13 Called up share capital
2004 2003
£ £
Authorised
36,000,000 Ordinary shares of 10 pence each 3,600,000 3,600,000
Allotted, called up and fully paid
11,707,910 Ordinary shares of 10 pence each 1,170,791 1,170,791
Employee share options are outstanding as follows:
Option scheme Date of grant Number of shares Option price per share
Immedia EMI Share Option Scheme 27 Jan 2003 430,000 3.75 pence
Immedia EMI Share Option Scheme 29 Oct 2003 55,000 20 pence
Immedia EMI Share Option Scheme 11 Dec 2003 250,000 110 pence
Options granted to employees under the Immedia EMI Share Option Scheme are
exercisable at any time between 12 December 2003 and their expiry on the tenth
anniversary of the date of grant.
Warrants and unsecured convertible loan notes are outstanding as follows:
a) Warrants over 125,000 shares were granted on 2 December 2003 and are
exercisable between the dates and at the exercise price shown under a) in the
table below;
b) £250,000 unsecured convertible loan notes granted 30 September 2003 bearing
interest at 8% per annum, wholly repayable on 19 September 2005 or convertible
into fully paid ordinary shares per b) in table below.
Dates between which warrants are Number of shares Option or
exercisable and unsecured loan conversion price
notes are convertible per share
a) Share warrants 02 Dec 2003 30 Oct 2005 125,000 91.912 pence
b) Unsecured convertible loan notes 02 Dec 2003 19 Sep 2006 238,031 105.028 pence
Notes (continued)
14 Share premium and reserves
Share premium Merger reserve Profit and
account loss account
£ £ £
At beginning of year 3,372,960 2,245,333 (3,695,883)
Retained loss for the year - - (367,448)
At end of year 3,372,960 2,245,333 (4,063,331)
15 Reconciliation of shareholders' funds
2004 2003
£ £
Opening shareholders' funds 3,093,201 (2,983,799)
Loss for the financial year after taxation (367,448) (679,084)
New share capital issued - 1,170,791
Share premium thereon (net of issue costs) - 3,372,960
Merger reserve - 2,245,333
Purchase of own shares for Immedia Employee Benefit Trust - (33,000)
Closing shareholders' funds 2,725,753 3,093,201
Total issue costs taken to the share premium account in 2003 were £717,949.
This information is provided by RNS
The company news service from the London Stock Exchange END
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