Interim Results
Yoomedia PLC
29 September 2004
29 September 2004
YooMedia plc
Interim results for the period ended 30 June 2004
YooMedia plc, the interactive entertainment group, today announces its interim
results for the six months to 30 June 2004.
Highlights
• Revenues increase tenfold to £4m (£368,000)
• Losses, including acquisition costs, at £3.8m (£2.3m)
• Cost base under control
• Successfully integrating acquisitions, including Fancy a Flutter
• Acquisition of Dateline and Jiles gives market-leading position in dating
• Purchase of Whoosh consolidates mobile business
• Digital TV base growing and new trial with ntl
• iPublic team strengthened
Commenting on the half-year results, Dr Michael Sinclair, executive chairman,
said:
'I am pleased to report an extremely strong first six months for YooMedia in
which your company has continued the transition from promising new boy of the
digital age to an interactive and entertainment business with scale and
substance, with a leading position in the high-growth arena of interactive
entertainment and information.
'Our multi-platform strategy is the key to our future success: taking compelling
content that consumers can interact with and making it available by whatever
means is convenient at any given moment.'
Further information
YooMedia
David Docherty, chief executive 020 7462 0870
Powerscourt PR
John Murray 020 7236 5615
Chairman's review
I am pleased to report an extremely strong first six months for YooMedia in
which your company has continued the transition from promising new boy of the
digital age to a business with scale and substance, with a leading position in
the high-growth arena of interactive entertainment and information.
We started the year with five clear goals:
- Develop a leading position in dating;
- Grow a strong presence in gambling;
- Develop a strong mobile presence;
- Integrate our games brand across all four digital platforms; and
- Strengthen our public sector team.
We have achieved each of these ambitions by a combination of both organic growth
and strategic judicious acquisition. The company has blossomed into a business
with revenues of £4 million, compared with just £367,000 at the interim stage
last year and £15,000 the previous year.
The company's growth is matched by a strong improvement in the number of viewers
living in digital homes in the UK - now over fifty percent of the population.
Furthermore, broadcasters and production companies are turning to interactive TV
and mobile interactivity as an integral part of their products and services.
We remain the only interactive entertainment group with a presence on all four
digital TV platforms - Sky, ntl, Telewest and Freeview. Indeed since the
half-year mark, we have consolidated our position with ntl, Britain's largest
cable operator, recently signing an agreement to trial broadband TV on its
digital cable network. This agreement, which has arisen out of a joint venture
with ICTV, the US technology group, is truly exciting as it puts us in the
forefront of the next generation of interactivity. The technology will allow
viewers to have as sophisticated an experience with interactive TV as
web-surfers do with broadband internet connections without the need for a PC.
One of our most significant acquisitions in the period gave us a market-leading
position in the UK dating industry. Having launched Dateline as an interactive
TV service on Sky, in June we purchased the offline and online assets of
Dateline, along with those of the UK's other leading offline dating company,
Jiles Limited. This latter company includes brands such as Avenues, Club Sirius
and Elite Introductions. The dating business continues to perform exceptionally
under the management of Jim Weir, formerly MD of Jiles Ltd. We are now poised to
integrate all of our dating brands on to tv, internet and mobile.
This multi brand multi-platform strategy is the key to our future success:
taking compelling content that consumers can interact with by whatever means is
convenient and making it available at any given moment.
Games and Gambling continue to play an important role in YooMedia's strategy.
Our transforming acquisition of Go-Play TV, which was finally completed in
January, was followed by the purchase of Fancy a Flutter from Rank and NDS.
This brought us a leading position in fixed-odds gambling on Sky, and we will
continue to pursue a multi-channel strategy through launching Fancy a Flutter
online before the year end.
It is with great sadness that I have to report that Martin Graham-Scott, who
founded Fancy a Flutter and came to YooMedia with the company, was killed in a
tragic car accident in August. In his short time at YooMedia, he became a
popular figure, noted for his enthusiasm and good humour. He will be sorely
missed, but the best possible tribute to him is to continue to develop Fancy a
Flutter into the success that Martin had envisaged.
We continue to develop the wireless dimension to the group. Since the half year
mark we acquired Whoosh Group Limited, a mobile technology and marketing
company. Whoosh's unique time/date stamping technology for sms messages has made
it an integral part of the interactive dimension to popular quiz shows such as
ITV's 'Who Wants to be a Millionaire' and the BBC's 'Test the Nation' series. It
perfectly complements our Trigger TV technology, which has been merged with
Whoosh to create a new division of YooMedia Mobile. Trigger also migrated into
radio, with a pilot on BBC Five Live. I am delighted that David Bainbridge,
managing director of Whoosh, is now managing director of YooMedia Mobile: his
considerable experience of the television industry as a former deputy marketing
director of Five, adds further strength to our management team.
Our public sector arm, iPublic, has continued to make progress, working in
association with several partners to develop interactive television content and
applications for both local and national government projects. Our team was
strengthened in July when Baroness McDonagh became Chairwoman of iPublic, and
was joined by the highly experienced media executive, Lord Alli.
YooMedia's financial position is secure, not least because of the support of
leading shareholders, including a number of significant institutions who have
continued to back our strategy for growth. Your company raised £7 million in a
placing in May, and our acquisitions are largely through the use of YooMedia
shares, showing the confidence of vendors in our company and its prospects.
Your board is pleased with YooMedia's continuing progress to date in the second
half of the year. Thanks in no small measure to the creativity and dedication of
all who work at the company, YooMedia continues to head towards a very exciting
future.
Dr Michael J. Sinclair
Executive Chairman
Profit and loss account for the six months to 30 June 2004
Unaudited Unaudited Unaudited Unaudited Audited
Six months Six months Six months Six months Year ended 31
ended 30 June ended 30 June ended 30 June ended 30 June December 2003
2004 2004 2004 2003
Notes Continuing Acqusitions Total
£ £ £ £ £
Turnover 2 412,741 3,588,919 4,001,660 367,999 743,150
Cost of sales (618,273) (4,066,591) (4,684,864) (684,629) (1,393,701)
Gross loss (205,532) (477,672) (683,204) (316,630) (650,551)
Administrative expenses (2,682,132) (496,485) (3,178,617) (1,954,998) (4,708,327)
Operating loss (2,887,664) (974,157) (3,861,821) (2,271,628) (5,358,878)
Net interest receivable 47,136 11,563 40,709
Net interest payable and similar - - (59,923)
charges
Loss on ordinary activities before (3,814,685) (2,260,065) (5,378,092)
taxation
Tax on loss on ordinary activities - 262,319 528,785
Loss on ordinary activities after (3,814,685) (1,997,746) (4,849,307)
taxation
Equity minority interest 34,303 41,385 227,445
Loss for the financial period (3,780,382) (1,956,361) (4,621,862)
Loss per ordinary share
- basic 3 (2.84p) (2.55p) (5.56p)
There is no difference between the loss on ordinary activities before taxation
and the loss for the periods stated above, and their historical cost
equivalents.
Statement of total recognised gains and losses
Notes Unaudited Unaudited Audited
Six months Six months Year ended 31
ended 30 June ended 30 June December 2003
2004 2003
Total
£ £ £
Loss for the period (3,780,382) (1,956,361) (4,621,862)
Gain on deemed disposal of 8 507,267 - -
share in subsidiary
undertaking
Total losses recognised (3,273,115) (1,956,361) (4,621,862)
since last report
Balance sheet as at 30 June 2004
Unaudited Unaudited
Six months Six months Audited
ended 30 June ended 30 June Year ended 31
2004 2003 December 2003
Notes £ £ £
Fixed assets
Intangible assets 4 12,518,809 56,875 246,056
Tangible assets 844,215 358,292 336,136
13,363,024 415,167 582,192
Current assets
Debtors 2,297,288 864,825 700,905
Cash at bank and in hand 5 6,129,617 1,054,088 1,720,349
8,426,905 1,918,913 2,421,254
Creditors - Amounts falling due within one year (4,841,209) (977,746) (1,010,616)
Net current assets 3,585,696 941,167 1,410,638
Total assets less current liabilities 16,948,720 1,356,334 1,992,830
Creditors - Amounts falling due after more than one 6 - (1,625,100) -
year
Provisions for liabilities and charges (51,270) - (154,546)
Minority interest (544,629) 79,122 76,301
Net assets/ (liabilities) 16,352,821 (189,644) 1,914,585
Capital and reserves
Called-up share capital 9 8,484,024 7,675,807 8,035,007
Share premium account 9 25,705,535 7,033,171 11,440,701
Shares to be issued 9 2,997,500 - -
Capital redemption reserve 455,331 455,331 455,331
Profit and loss account (21,289,569) (15,353,953) (18,016,454)
Equity shareholders' funds 7 16,352,821 (189,644) 1,914,585
Cash flow statement for six months to 30 June 2004
Unaudited Unaudited Audited
Six months Six months Year ended
ended 30 ended 30 31 December
June 2004 June 2003 2003
Notes £ £ £
Continuing activities
Operating loss (3,861,821) (2,271,628) (5,358,878)
Depreciation charge 145,618 219,078 350,874
Amortisation of goodwill 253,507 2,993 4,620
UITF 25 provision for National Insurance on share options (103,276) - 154,546
Loss on disposal of fixed assets - - 3,465
Increase in debtors (824,343) (288,879) (121,483)
Increase/(Decrease) in creditors 1,735,171 (678,897) (642,125)
Net cash outflow from operating activities (2,655,144) (3,017,333) (5,608,981)
Returns on investments and servicing of finance
Interest received 32,697 10,026 35,697
Interest paid - - (59,923)
Net cash inflow from returns on investments and servicing 32,697 10,026 (24,226)
of finance
Taxation - 262,319 528,785
Capital expenditure and financial investment
Purchase of tangible fixed assets (431,900) (20,818) (133,576)
Acquisitions
Purchase of subsidiary undertakings (824,845) (28,896) (44,180)
Net cash received with subsidiary undertaking 1,677,735 (5,998) 6,109
Net cash inflow/(outflow) from capital expenditure and 420,990 (55,712) (171,647)
financial investment
Net cash outflow before management of liquid resources and (2,201,457) (2,800,700) (5,276,069)
financing
Management of liquid resources
(Increase) in short term deposits with banks (3,482,838) (966,500) (1,521,018)
Financing
Issue of ordinary share capital 9 6,610,725 - 2,766,730
Issue of convertible loan - 1,625,100 2,000,000
Net cash inflow from financing 6,610,725 1,625,100 4,766,730
Increase/ (Decrease) in net cash 926,430 (2,142,100) (2,030,357)
Cash flow statement for the six months to 30 June 2004 (continued)
Reconciliation to net funds Notes Unaudited
Unaudited Six months Audited
Six months ended ended 30 June Year ended 31
30 June 2004 2003 December 2003
£ £ £
Increase/ (Decrease) in net cash 926,430 (2,142,100) (2,030,357)
Movement in deposits 3,482,838 966,500 1,521,018
Movement in net funds for the period 4,409,268 (1,175,600) (509,339)
Net funds at commencement of period 1,720,349 2,229,688 2,229,688
Net funds at end of period 5 6,129,617 1,054,088 1,720,349
Notes to the financial information for the six months to 30 June 2004
1 Basis of preparation
Unless stated otherwise, the interim financial information has been prepared on
the basis of the accounting policies set out in the Group's financial statements
for the year ended 31 December 2003.
In preparing these financial statements the group has capitalised internal
development costs incurred on the production of various interactive media
services. These development costs are included within Intangible Fixed Assets.
Previously the policy of the company was to write off all development
expenditure as incurred. The change of accounting policy, which was changed due
to a greater certainty of revenues being generated from these assets, has
resulted in £212,516 of development costs being capitalised for the six months
to 30 June 2004. This change in accounting policy has resulted in no change to
the prior year accounts.
The financial information contained in this interim statement does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985. The financial information for the full preceding year is based on the
statutory accounts for the financial year ended 31 December 2003. Those
accounts, upon which the auditors issued an unqualified opinion, modified by
reference to fundamental uncertainty over going concern, have been delivered to
the Registrar of Companies.
Further copies of this report are available from our registered office:
Northumberland House, 155-157 Great Portland Street, London, W1W 6QP.
Going Concern
Whilst the nature of the Group's business and its current stage of development
means that there is an inherent uncertainty over any forecasts made by the
Group, having due regard to the current net cash position and projected revenues
and costs from existing and planned interactive media services, and if required,
other available sources of finance, the directors consider that the Group has
adequate resources to continue in operational existence for the foreseeable
future. As a result, the directors believe it is appropriate to prepare the
interim financial information on a going concern basis.
2 Turnover
Turnover, which excludes value added tax, comprises interactive media services,
and is recognised as these services are provided. Revenues are recognised on a
gross basis, and related payments to digital television service providers are
included under cost of sales. All turnover is generated in the United Kingdom.
3 Loss per share
The basic loss per share has been calculated by dividing the net loss for the
period by the weighted average number of 132,907,003 shares in issue during the
six months ended 30 June 2004 (six months ended 30 June 2003: 76,758,071, year
ended 31 December 2003: 83,119,931).
4 Intangible Assets
Deferred Goodwill Total
Development
Costs
£ £ £
Cost
At 1 January 2004 - 337,652 337,652
Acquisition of GoPlay TV Limited - 8,545,047 8,545,047
Acquisition of Fancy a Flutter Limited - 944,279 944,279
Acquisition of remaining shares in MieTV Limited - 203,589 203,589
Acquisition of Jiles Limited - 1,648,118 1,648,118
Acquisition of trade and assets of One Saturday plc. - 972,711 972,711
Deferred development costs 212,516 - 215,516
At 30 June 2004 212,516 12,651,396 12,863,912
Accumulated amortisation
At 1 January 2004 - 91,596 91,596
Provided during the period 14,548 238,959 253,507
At 30 June 2004 14,548 330,555 345,103
Net book value
At 30 June 2004 197,968 12,320,841 12,518,809
At 31 December 2003 - 246,056 246,056
5 Cash and Short Term Deposits
Unaudited Unaudited
Six months Six months Audited Year
ended 30 June ended 30 June ended 31
2004 2003 December 2003
£ £ £
Cash 1,125,760 87,588 199,330
Short Term Deposits 5,003,857 966,500 1,521,019
Total Cash and Short Term Deposits 6,129,617 1,054,088 1,720,349
At 30 June 2004, 31 December 2003 and 30 June 2003 the Short Term Deposits were
placed with banks for periods of up to 2 weeks.
6 Creditors - Amounts falling due after more than one year
Unaudited Unaudited
Six months Six months Audited Year
ended 30 June ended 30 June ended 31
2004 2003 December 2003
£ £ £
Variable rate convertible loan notes - 1,625,100 -
On 29 May 2003 the Group issued £1.625m of convertible loan stock. Interest on
the loan notes was due quarterly in arrears, at 3.25% over LIBOR. This loan note
was redeemed during the year ended 2003 and details of the redemption are
included in the audited financial statements of that year.
7 Reconciliation of movement in shareholders' funds
Unaudited Unaudited
Six months Six months Audited Year
ended 30 June ended 30 June ended 31
2004 2003 December 2003
£ £ £
Loss for the period (3,780,382) (1,956,361) (4,621,862)
Gain on deemed disposal of share in subsidiary undertaking 507,267 - -
New shares issued 14,713,851 - 4,766,730
Shares to be issued 2,997,500 - -
UITF 17 credit - - 3,000
Net addition to/(reduction in) shareholders' funds 14,438,236 (1,956,361) 147,868
Opening shareholders' funds 1,914,585 1,766,717 1,766,717
Closing shareholders' funds 16,352,821 (189,644) 1,914,585
8 Acquisitions
On 6 January 2004 the Company acquired 100% of the share capital of GoPlay TV
Limited for a total consideration of £9,720,000. This was satisfied by the
issue of 12,600,000 1p ordinary shares of YooMedia plc and a deferred
consideration of 5,400,000 1p ordinary shares all at 54p.
On 6 April 2004 the Company acquired 100% of the share capital of Fancy a
Flutter Limited for a consideration of £1,018,750. This was satisfied by the
issue of 2,300,000 1p ordinary shares of YooMedia plc and a deferred
consideration of 200,000 1p ordinary shares all at 41p each.
On 22 June 2004 the Company, acquired the business and assets of One Saturday
plc. This was for a consideration of £830,000 consisting £500,000 cash and 1.5
million 1p ordinary shares at 22p. These assets were immediately transferred
down to the Company's wholly owned subsidiary, YooMedia Dating Limited. On the
same date YooMedia Dating Limited also acquired Jiles Limited. This was for a
consideration of 25 per cent of the equity of YooMedia Dating Limited being
4,045,745 2p ordinary shares valued at 26p per share. This resulted in an
unrealised gain on the deemed disposal of 25 per cent of YooMedia Dating
Limited. This gain of £507,267 has been recognised through the Statement of
Total Recognised Gains and Losses.
9 Reconciliation of movement in Share Capital, Premium and shares to be issued
Share Share Premium Shares to be
Capital issued
£ £ £
At 1 January 2004 8,035,007 11,440,701 -
Shares issued to acquire GoPlay TV Limited 126,000 6,678,000 2,916,000
Shares issued for the acquisition of Fancy a Flutter Limited 23,000 914,250 81,500
Shares issued to acquire the remaining stake in MieTV Limited 1,250 30,626 -
Shares issued to acquire the trade and assets of One Saturday plc 15,000 315,000 -
Net proceeds arising from share issue 280,000 6,310,564 -
Shares issued through share option scheme 3,767 16,394 -
At 30 June 2004 8,484,024 25,705,535 2,997,500
10 Post balance sheet events
On the 23 July 2004 the Company acquired 100% of the share capital of Whoosh
Group Ltd. This was for a consideration of £300,000 consisting of 1.75 million
ordinary shares of 1p at 17.5p each.
INDEPENDENT REVIEW REPORT TO YOOMEDIA PLC
Introduction
We have been instructed by the Group to review the financial information which
comprises a profit and loss account, statement of total recognized gains and
losses, balance sheet as at 30 June 2004, cash flow statement and associated
notes. We have read the other information contained in the interim report and
considered whether it contains any apparent misstatements or material
inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing
Rules of the London Stock Exchange require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes, and
the reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board. A review consists principally of making
enquiries of management and applying analytical procedures to the financial
information and underlying financial data and based thereon, assessing whether
the accounting policies and presentation have been consistently applied unless
otherwise disclosed. A review excludes audit procedures such as tests of
controls and verification of assets liabilities and transactions. It is
substantially less in scope than an audit performed in accordance with Auditing
Standards and therefore provides a lower level of assurance than an audit.
Accordingly we do not express an audit opinion on the financial information.
Going concern
In arriving at our review conclusion, we have considered the adequacy of the
disclosures made in note 1 to the financial statements concerning the
fundamental uncertainty over the ability of the Group to continue as a going
concern. The financial statements have been prepared on a going concern basis,
the validity of which depends upon the realisation of projected revenues from
existing and planned interactive media services and, if required, other
available sources of finance. The financial statements do not include any
adjustments which would result if the cash generated from the projected revenues
was insufficient, and the Group was unable to access additional finance to
enable it to continue as a going concern. In view of the significance of this
matter, we consider that it should be drawn to your attention, but our review
conclusion is not qualified in this respect.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2004.
Ernst & Young LLP
London
18 September 2004
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