Unaudited Half-year Results

RNS Number : 1092K

Immedia Group PLC

31 August 2021

 

ISSUED ON BEHALF OF IMMEDIA GROUP PLC

31 AUGUST 2021

IMMEDIATE RELEASE

This announcement contains inside information as stipulated under the UK version of the Market Abuse Regulation (EU) No. 596/2014 which is part of English Law by virtue of the European (Withdrawal) Act 2018, as amended.  On publication of this announcement, this information is considered to be in the public domain.

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IM MEDIA GROUP PLC

("Immedia" or the "Company" or the "Group")

UNAUDITED HALF-YEAR RESULTS

" The Group has made significant progress in its journey to consistent profitability in an environment that continues to be extremely challenging"

Immedia (AIM: IME), a supplier of multi-media content and digital audience engagement solutions for leading brands and global businesses, announces its unaudited Half-year results for the six months ended 30 June 2021. 

Commenting on the performance, Immedia's CEO Ross Penney said:

"Given continued difficult market conditions we have re-engineered the business to suit the new trading environment.  This is evidenced by a substantial improvement on trading EBITDA compared to the prior period as we have benefited from a full six months of reduced cost base.

Prospects for HY2 2021 are favourable, and we expect the HY2 trading environment to be significantly more positive than HY1 as COVID-19 restrictions ease.  We believe that, as a result of the numerous improvements in culture, structure and process, the business is well placed to capitalise on increased market demand and make a sustained return to profitability.

At the strategic level, the Board continues to investigate appropriate transactions that will deliver value to shareholders and will make announcements as necessary.  As previously stated, this may include divestment options for its main trading subsidiary, Immedia Broadcast Limited. Any proposed disposal would require shareholders' approval under AIM Rule 15."

Highlights · 18% decrease in revenue to £1,086,388 compared to HY1 2020 · HY1 Loss before tax of £427,730 compared to loss of £244,835 in HY1 2020 · Non-operating costs in HY1 were £287,754 compared to £nil in HY1 2020 due to costs relating to the aborted Sprift transaction and the £3m equity fundraising announced on 8 January 2021 · Improved EBITDA trading loss of £22,483 compared to a HY1 2020 loss of £129,258 · The continued pandemic in HY1 2021 resulted in the continued closure of client sites and delays to project work and limited new business revenue opportunities · Continued structure, process and resource improvements · Cultural re-invention to foster a united and focused team Post period-end · The termination of talks with Sprift announced on 15 July 2021 · New partnership with Irish agency, Focal Media, resulting in a new contract with retailer Lifestyle Sports · Extension of existing relationship with JD Sports Fashion plc as service supplied to additional stores in France · September 2021 is expected to be the best trading month since pre-pandemic · Improved HY2 outlook in prospect as the effects of the pandemic which have been affecting our clients start to ease off

Key Financials Unaudited half year to 30 Jun 2021 Unaudited half year to 30 Jun 2020 Audited year to 31 Dec 2020 Revenue £1,086,388 £1,328,069 £2,310,872 Gross profit £702,710 £785,904 £1,386,048 EBITDA* (£339,142) (£219,403) (£504,510) Loss after income tax (£427,730) (£360,867) (£733,181) Net fair value gain/(loss) on financial assets £382,500 (£3,900) £42,600 Total comprehensive loss (£45,230) (£364,767) (£690,581) Debt (£81,797) (£385,521) (£138,134) Net funds (cash less debt) £2,006,952 (£32,789) £326,098 *Loss before interest, tax, depreciation, amortisation and impairment charges FULL STATEMENT ATTACHED

Enquiries:
Im media Group plc Ross Penney, CEO		Tel:  [phone]
www.immediaplc.com
SPARK Advisory Partners Limited (Nomad)
Mark Brady/Neil Baldwin		Tel:  [phone]
SP Angel Corporate Finance LLP (Stockbroker) Abigail Wayne		Tel:  [phone]
TooleyStreet Communications (IR & Media Relations)
Fiona Tooley		Tel:  [phone]
About Im media Group plc www.immediaplc.com Im media Group is a multi-media content and digital solutions provider to global businesses and organisations investing in internal and/or brand communications.  Our interactive audio channels deliver original and relevant content to a client's workforce and/or customer base.  Each channel is supported with powerful data analytics, which monitor audience activity and provide data to enable Immedia to enhance audience engagement.  The Group also creates original video, 3D animation, app and web content, as well as supplying, installing and maintaining audio-visual equipment.

Im media's   clients include: BP, FIFA, HSBC, JD Sports Fashion plc, Shell, Subway Europe, Nationwide Building Society,  IKEA and Weir Group.

 

IMMEDIA GROUP PLC

Unaudited Half-Year Results for the six months ended 30 June 2021

INTRODUCTION

The Board and management team of Immedia Group plc cannot be satisfied with the HY1 2021 result, although our disappointment is tempered by the continued tough market conditions of the pandemic and a substantial improvement on trading EBITDA compared to the prior period.

Not everything about pandemic trading has been negative.  We are pleased to have had the opportunity to develop deeper relationships with our customers as we work with them to manage challenges and develop opportunities.

We have extended our efforts to become a best-in-class business.  In our statement of 2020 preliminary results, issued on 13 May 2021, we alluded to the numerous improvements in process, culture, marketing resource and cost base that were implemented throughout 2020 and into the current year. 

2021 has seen further work on culture, with the implementation of five core values, indeed the PHIVE core values of Passion, Humanity, Integrity, Visibility and Empathy (see https://avcimmedia.com/core-values-blog/).  We have made substantial progress in re-engineering the culture of the business to create a highly valued and highly performing team. 

We are pleased that we have seen the results of these measures in significantly improved staff engagement, despite the tribulations of the pandemic. 

I would once again like to thank every member of the team for their attitude and work ethic in these unprecedented times.

In the May 2021 statement accompanying the 2020 preliminary results we referred to ongoing uncertainty in 2021, and this remains the case.   However, we are seeing improved trading across the business as COVID restrictions ease and are delighted to have extended our relationship with JD Sports Fashion plc as they roll out more stores in France to which we will supply bespoke music via our streaming devices.  We now supply content to JD stores in 8 European countries and look forward to expanding into further territories as JD's growth continues.

Furthermore we expect that September 2021 will be the best trading performance since pre-pandemic times.

The Board of Directors remains committed to increasing value for all Company stakeholders and has taken the required steps to boost Group working capital (through the cash raises announced on 20 August 2020 and 8 January 2021) and manage costs. 

The Board continues to investigate appropriate transactions that will deliver value to shareholders and will make announcements as necessary.

We remain confident that we have transformed the trading entity Immedia Broadcast Ltd into a lean and focused business that is ready to take advantage of market momentum as COVID-19 restrictions disappear.

FINANCIAL RESULTS

Revenue in the period reported decreased 18% to £1,086,388 (HY1 2020: £1,328,069). 

Whilst the EBITDA loss for HY1 increased to £427,730 from HY1 2020 £244,835, £287,754 of the HY1 EBITDA loss is accounted for by non-operational costs relating to: a) the aborted Sprift transaction and b) costs associated with the £3m equity fundraise announced on 8 January 2021.

We are gratified that the HY1 trading EBITDA loss reduced to £22,483 as against HY1 2020 £129,258.

As previously stated, the COVID-19 outbreak has been a significant factor in this result. 

CASH

Cash management remains a priority; in HY1 2021 cash increased to £2,088,748 (HY1 2020: £352,733), following the £3m equity fundraising announced on 8 January 2021.  £800,000 was lent to Sprift during HY21, with a further £100,000 after the period end.  The total loan of £900,000 is repayable by Sprift on the terms announced on 15 July 2021.  In addition, post the period end, there was an agreement with Sprift for repayment of an additional £150,000 of transaction costs in accordance with the terms announced separately on 15 July 2021.

The Group has a £50,000 "bounce back" loan from the Government to assist with trading difficulties brought about by COVID-19 on which repayments have now started. 

INVESTMENTS

As in previous years, Immedia's investment in AudioBoom Group plc, the leading spoken word audio platform (AIM: BOOM), showed fluctuations in value during the period.  In accordance with our IFRS accounting regime, a gain on revaluation of investments of £382,500 has been reported in the first half (HY1 2020: loss of £3,900).  The Board notes that an offer has been indicated for AudioBoom Group plc.

OUTLOOK

It is encouraging that market conditions are showing continued signs of improvement as pandemic measures are relaxed. 

We have never known a business environment like the one brought about by the COVID-19 pandemic. I am extremely proud of the whole team as we responded rapidly and decisively to what was unquestionably a crisis.  The huge amount of work done in improving your business will bear fruit in the short to medium term.

There is huge passion, positivity and commitment in our team.

It is genuinely a pleasure to work every day with this group of talented and hardworking people.  Stakeholders can be confident that our skills and determination will bring rewards as we expect to turn EBITDA positive in H2 2021 and work to build on that base in decisive fashion in 2022.

As always we will update all stakeholders in a timely fashion as the opportunities we are working on currently are converted to contracts.

Ross Penney, CEO

On behalf of Immedia Group plc

27 August 2021

 

IMMEDIA GROUP PLC 

(Immedia or the Company or the Group)

Unaudited Half-Year results for the six months ended 30 June 2021

Consolidated statement of profit or loss		Unaudited Half Year	Unaudited Half Year	Audited Full Year
£		30 Jun 2021	30 Jun 2020	31 Dec 2020
Revenue		1,086,388	1,328,069	2,310,872
Cost of sales		(383,678)	(542,165)	(924,824)
Gross profit		702,710	785,904	1,386,048
Admin expenses
Business as usual		(1,063,061)	(1,066,699)	(2,086,523)
Exceptional items		(75,000)	(40,260)	(40,260)
Total admin expenses		(1,138,061)	(1,106,959)	(2,126,783)
Other income		12,398	-	68,127
Loss from operations		(422,953)	(321,055)	(672,608)
Finance income		259	84	116
Finance cost		(5,036)	(39,896)	(60,689)
Loss before tax		(427,730)	(360,867)	(733,181)
Tax expense		-	-	-
Loss for the period		(427,730)	(360,867)	(733,181)
Loss per share (pence)
Basic and Diluted		(1.24)	(2.63)	(5.22)

Consolidated statement of profit or loss and other comprehensive income		Unaudited Half Year	Unaudited Half Year	Audited Full Year
£		30 Jun 2021	30 Jun 2020	31 Dec 2020
Loss for the period		(427,730)	(360,867)	(733,181)
Items that will not be reclassified subsequently to profit or loss:
Fair value gain/(loss) on equity investments not held for trading designated as FVTOC		382,500	(3,900)	42,600
Total comprehensive loss for the period		(45,230)	(364,767)	(690,581)

 

Consolidated balance sheet		Unaudited Half Year	Unaudited Half Year	Audited Full Year
£		30 Jun 2021	30 Jun 2020	31 Dec 2020
Assets
Property, plant and equipment		102,034	192,996	175,908
Intangible assets		223,263	235,402	229,419
Investments		540,000	111,000	157,500
Loan to Sprift Technologies Ltd		800,000	-	-
Total non-current assets		1,665,297	539,398	562,827
Current assets
Inventories		99,895	155,231	124,094
Trade and other receivables		485,288	642,192	575,449
Cash and cash equivalents		2,088,748	352,733	464,232
Total current assets		2,673,931	1,150,156	1,163,775
Total assets		4,339,228	1,689,554	1,726,602
Liabilities
Bank loans due > 1 year		(39,639)	-	(43,571)
Lease liabilities due > 1 year		(540)	(18,247)	(2,092)
Provisions		(42,500)	(42,500)	(42,500)
Total non-current liabilities		(82,679)	(60,747)	(88,163)
Current liabilities
Trade and other payables		(1,541,813)	(2,317,670)	(1,803,183)
Contract liabilities		(196,988)	(107,799)	(145,195)
Bank loans due < 1 year		(9,527)	(250,000)	(6,429)
Lease liabilities due < 1 year		(32,090)	(117,274)	(86,042)
Total current liabilities		(1,780,418)	(2,792,743)	(2,040,849)
Total liabilities		(1,863,097)	(2,853,490)	(2,129,012)
Net assets/(liabilities)		2,476,131	(1,163,936)	(402,410)
Equity
Share capital		3,758,184	1,455,684	2,558,184
Share premium		4,546,541	3,586,541	3,586,541
Merger reserve		2,245,333	2,245,333	2,245,333
Share-based payment reserve		1,001,218	4,578	40,218
Investment valuation reserve		450,000	21,000	67,500
Retained losses		(9,525,145)	(8,477,072)	(8,900,186)
Total equity		2,476,131	(1,163,936)	(402,410)

 

Consolidated statement of changes in equity

Attributable to equity shareholders of the company

	Called up share capital	Share premium	Merger reserve	Share based payment reserve	Investment valuation reserve	Retained losses	Total equity
	£	£	£	£	£	£	£
Balance at 1 January 2020	1,455,684	3,586,541	2,245,333	4,578	24,900	(8,116,205)	(799,169)
Profit/(loss) for the half year	-	-	-	-	-	(360,867)	(360,867)
Other comprehensive loss	-	-	-	-	(3,900)	-	(3,900)
Total comprehensive loss	-	-	-	-	(3,900)	(360,867)	(364,767)
Balance at 30 June 2020	1,455,684	3,586,541	2,245,333	4,578	21,000	(8,477,072)	(1,163,936)
Profit/(loss) for the half year	-	-	-	-	-	(372,314)	(372,314)
Other comprehensive income	-	-	-	-	46,500	-	46,500
Total comprehensive loss	-	-	-	-	46,500	(372,314)	(325,814)
Shares placed/subscribed	1,100,000	-	-	-	-	(50,800)	1,049,200
Share options exercised	2,500	-	-	-	-	-	2,500
Share-based payments	-	-	-	35,640	-	-	35,640
Transactions with shareholders	1,102,500	-	-	35,640	-	(50,800)	1,087,340
Balance at 31 December 2020	2,558,184	3,586,541	2,245,333	40,218	67,500	(8,900,186)	(402,410)
Profit/(loss) for the half year	-	-	-	-	-	(427,730)	(427,730)
Other comprehensive income	-	-	-	-	382,500	-	382,500
Total comprehensive income	-	-	-	-	382,500	(427,730)	(45,230)
Shares and warrants placed/subscribed	1,200,000	960,000	-	840,000	-	(197,229)	2,802,771
Share-based payments	-	-	-	121,000	-	-	121,000
Transactions with shareholders	1,200,000	1,800,000	-	961,000	-	(197,229)	2,923,771
Balance at 30 June 2021	3,758,184	5,386,541	2,245,333	40,218	450,000	(9,404,145)	2,476,131

 

Consolidated statement of cash flows		Unaudited Half Year	Unaudited Half Year	Audited Full Year
£		30 Jun 2021	30 Jun 2020	31 Dec 2020
Cash flows from operating activities
Profit/(loss) for the period before income tax		(427,730)	(360,867)	(733,181)
Adjustments for:
Depreciation and amortisation charges		83,812	101,652	168,098
Loss on disposal of assets		609		-
Share-based payment expense		121,000	-	35,640
Financial income		(259)	(84)	(116)
Financial expense		5,036	39,896	60,689
Decrease in inventories		24,199	46,231	77,368
Decrease in trade and other receivables and prepayments		86,972	409,017	475,761
(Decrease)/increase in trade and other payables and deferred income		(209,577)	26,767	(450,323)
Cash generated from operating activities		(315,938)	262,612	(366,488)
Taxation
Taxation		-	-	-
Net cash from operating activities		(315,938)	262,612	(366,488)
Cash flows from investing activities
Interest received		259	84	116
Acquisition of property, plant and equipment		(4,391)	(8,769)	(52,145)
Loan advanced to Sprift Technologies Limited		(800,000)	-	-
Net cash from investing activities		(804,132)	(8,685)	(52,029)
Cash flows from financing activities
New loans in period		-	-	50,000
Repayment of bank loan		(833)	(50,000)	(300,000)
Repayment of lease liabilities		(55,504)	(48,872)	(111,208)
Interest paid		(1,848)	(39,896)	(45,317)
Share and warrant issue		3,000,000	-	1,100,000
Costs of share issue		(197,229)	-	(50,800)
Net cash from financing activities		2,744,586	(138,768)	645,175
Net decrease in cash and cash equivalents		1,624,516	115,159	226,658
Cash and cash equivalents at 1 January		464,232	237,574	237,574
Cash and cash equivalents at end of period		2,088,748	352,733	464,232

NOTES TO THE FINANCIAL STATEMENTS

Financial information contained in this document does not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006 ("the Act").  The statutory accounts for the year ended 31 December 2020 have been filed with the Registrar of Companies.  The report of the auditors on these statutory accounts was unqualified, did not draw to any matters by way of emphasis and did not contain a statement under section 498(2) or (3) of the Act.  The financial information for the six months ended 30 June 2021 and 30 June 2020 is unaudited.

This announcement was approved by the Board on 27 August 2021.

1. Reporting entity

Immedia Group Plc (the "Company") is a public limited company incorporated and domiciled in England and Wales.  The address of the Company's registered office, and its principal place of business, is 7-9 The Broadway, Newbury, Berkshire RG14 1AS.  The consolidated financial statements of the Company as at and for the year ended 31 December 2020 comprise the Company and its subsidiaries (together referred to as the "Group").

The Group is involved in marketing and communication services through the provision of interactive digital channels products and services using music, radio and screen-based media to provide brand conversation, engaging entertainment and innovative technical solutions.  It also supplies, installs and maintains the equipment used to deliver these services.

2. Basis of preparation

The interim financial information in this report has been prepared using accounting policies consistent with IFRS as adopted by the United Kingdom.  IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee and there is an ongoing process of review and endorsement by the United Kingdom.  The financial information has been prepared on the basis of IFRS that the Directors expect to be adopted by the United Kingdom and applicable as at 31 December 2020 and 31 December 2021.  The Group has chosen not to adopt IAS 34 "Interim Financial Statements" in preparing the interim financial information.

3. Significant accounting policies

The accounting policies set out in detail in note 2 of the Group's consolidated financial statements to 31 December 2020 have been applied consistently to these unaudited financial statements to 30 June 2021, with the exception of the adoption of new or amended standards which have become applicable for accounting periods commencing on or after 1 January 2021.  There are no new standards or amendments to standards which are material to the accounts for the half year ended 30 June 2021.

4. Financial assets

In March 2014 the Group invested £90,000 in the purchase of 6,000,000 shares in AudioBoom Group plc, an AIM-quoted audio social media platform, as part of the Group's strategy to broaden its digital marketing and communications services. 

The Company has taken the irrevocable election to classify this investment as FVTOCI.

At 30 June 2021 the fair value of the investment was £540,000 with a current period fair value gain of £382,500 recognised in other comprehensive income (30 June 2020 fair value £111,000 with fair value loss of £3,900 recognised in other comprehensive income; 31 December 2020 fair value £157,500 with fair value gain of £42,600 recognised in other comprehensive income).

As at the date of approval of this report, the investment represents c.0.4% of AudioBoom Group plc's shares in issue and has a fair value of £558,000. 
 

5. Earnings per share

		Unaudited Half Year		Unaudited Half Year		Full Year Audited
		2021 Number		2020 Number		2020 Number
Basic
Weighted average number of shares in issue		35,460,297		14,556,844		14,882,460
Less weighted average number of own shares		(832,374)		(832,374)		(832,374)
Weighted average number of shares in issue for basic earnings per share		34,627,923		13,724,470		14,050,086

The basic and diluted earnings per share are calculated using the after tax loss attributable to equity shareholders for the financial period of £427,730 (30 June 2020: loss £360,867; 31 December 2020: loss £733,181) divided by the weighted average number of Ordinary shares in issue in each of the relevant periods: 30 June 2020: 34,627,923 shares (30 June 2020: 13,724,470 shares and 31 December 2020: 14,050,086 shares).  For the period to 30 June 2021 and the year to 31 December 2020 and period to 30 June 2020 and in accordance with IAS 33, the diluted loss per share is stated as the same amount as basic as there is no dilutive effect.

6. Share capital

Allotted, issued and fully paid:

	Number of shares	Nominal value
		£
Ordinary shares with nominal value of £0.10 per share as at:
31 December 2019	14,556,844	1,455,684
Issued in the half year	-	-
30 June 2020	14,556,844	1,455,684
Issued in the half year	11,025,000	1,102,500
31 December 2020	25,581,844	2,558,184
Issued in the half year	12,000,000	1,200,000
30 June 2021	37,581,844	3,758,184

There are no restrictions on the transfer of shares in Immedia Group Plc. All shares carry equal voting rights.

7. Post balance sheet events

Secured Loan

As previously announced on 26 March 2021, Immedia agreed to provide Sprift Technologies Ltd ("Sprift") with a secured loan facility of up to £900,000.  As at the balance sheet date, 30 June 2021, £800,000 had been drawn.

Since the balance sheet date, a further £100,000 was drawn, bringing the total drawn to £900,000.

As Immedia has withdrawn from negotiations in relation to the proposed RTO, as announced on 15 July 2021, the loan has become repayable, in full, within 12 months from the withdrawal from negotiations on 15 July 2021 and will attract interest at a rate of 15 per cent per annum, payable monthly.  The Directors currently believe that Sprift will be able to repay the loan in accordance with its terms, but this may be dependent on its future trading performance and its ability to secure additional working capital funding as and when required. The loan is secured by a debenture containing fixed and floating charges over Sprift's business and assets, granted by Sprift in favour of Immedia.

Cost agreement with Sprift

Also announced on 15 July 2021, the Company has agreed the recovery of costs from Sprift of £150,000, which has been added to the amount owed to Immedia in respect of its secured loan ("Loan"), and which bears interest and is repayable on the same terms as the loan.  Of these recoverable costs, £75,000 has been charged to the profit and loss account in the half year period ended 30 June 2021.

FORWARD LOOKING STATEMENTS

This document contains certain forward-looking statements which reflect the knowledge and information available to the Company during the preparation and up to the publication of this document.  By their very nature, these statements depend upon circumstances and relate to events that may occur in the future thereby involving a degree of uncertainty.  Although the Group believes that the expectations reflected in these statements are reasonable, it can give no assurance that these expectations will prove to have been correct. Given that these statements involve risks and uncertainties, actual results may differ materially from those expressed or implied by these forward-looking statements.

The Group undertakes no obligation to update any forward-looking statements whether because of new information, future events or otherwise.

The Half-Year Report will be available to view and download from the Group's website at www.immediaplc.com. 

 

END

 

 

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