Final Results

Text 100 Group PLC 23 October 2000 'Continuing strong performance across the Group' * Turnover up 60% to £36.4 million * Pre-tax profit, before exceptionals, up 59% to £2.7 million. * Strong organic growth overall with outstanding performances in the US and from Bite and Joe Public Relations subsidiaries * Eight new operations established internationally * Proposed name change of group to 'OneMonday Group plc' * Plans to float a small minority stake in subsidiary Bite Communications Ltd on OFEX at end of 2001 * Strong start to new financial year Tom Lewis, Chairman of Text 100 Group plc, the international technology pr company, said: 'I am pleased to report a strong performance for our first full year on the LSE. The growth has been entirely organic and I am delighted that such strong profit growth has been achieved despite the substantial ongoing early-stage investment we have been undertaking in new subsidiaries, expansion of existing offices and operational infrastructure. 'The Group has made a good start to the new year, winning some significant business. We expect that the market for technology related pr services will continue to grow strongly.' For further information, contact: Tom Lewis, Chairman, Text 100 Group 020 8996 4100 David Dewhurst, Finance Director 020 8996 4100 Nick Denton, Hogarth Partnership 020 7357 9477 Preliminary Announcement of Results for the Year to 31 July 2000 Following our successful debut on the London Stock Exchange in December 1999, it gives me great pleasure to report a powerful set of full-year figures for your Company. During the year to 31 July 2000, turnover rose 60% to £36.4m, while pre-tax profit grew 59% to £2.7m before exceptional flotation expenses. Adjusted basic earnings per share was up 74% to 7.89p.The board is proposing a dividend per share increase of 25% to 2p. Two things are noteworthy about this performance. Firstly, the turnover growth is 100% organic - meaning that it has come entirely from three sources - increased spending from existing clients, new clients being won, and new start-up operations being formed. Secondly, the profit growth has been achieved in spite of substantial early-stage investment in new subsidiaries, expansion of existing offices, investment in operational infrastructure and the new staff required to sustain the rate of growth in turnover. During the year, the Group's subsidiaries established eight new operations in locations as diverse as Hong Kong (Text 100), London, Sydney and Auckland (AUGUST.ONE), San Francisco (Bite) and Cape Town (extra PR). Some of the turnover growth was quite outstanding, with Text 100's US operations showing growth of 115%, while Bite grew by 65% and Joe Public Relations by 121%. AUGUST.ONE also enjoyed a successful first year of operations. In a move that's designed to emphasise that the Group is a collection of 8 separate brands, comprising 41 profit centres worldwide and more than 600 staff - the board is proposing to change the Company's name to OneMonday Group plc. The new name highlights our emphasis on organic growth, and reflects that our new operations are almost invariably start-ups, which open their doors for business on a Monday. Assuming that the new name is approved by the Group's shareholders at the EGM on 15 November 2000, it is anticipated that it will become effective on 16 November 2000. In conjunction with the name change, the Company is also changing its main board structure. On 1 January 2001, the Group will reduce the size of its main board from 10 to 5. Responsibility for many brand level operational matters will be delegated to a larger Executive Council. The new Group main board will consist of Tim Dyson (Group CEO), David Dewhurst (Group FD) and myself, as well as the Group's non-executive directors Ian Taylor and Brendan Magee. Aedhmar Hynes, Matthew Ravden and Carlo Crighton will step down from the Group board but will join the Executive Council and remain directors of Text 100 International. Andrew West and Sandeep Kalsi will step down from the Group board at the same time. Also joining the Executive Council, which will be chaired by the Group CEO, are the CEOs of Bite, AUGUST.ONE and Joe Public Relations as well as the Group FD. The Company's strategy of separate brand development is further evidenced by medium-term plans for its subsidiary Bite Communications Ltd. Bite has grown and developed strongly since its formation in 1995. Assuming continued growth and stock market and other conditions permitting, the Group hopes to float a small minority stake in Bite - probably no more than 5% - on the OFEX trading facility or another junior market in or about November 2001. This move will be motivating for Bite staff, enabling them to hold share options in a quoted rather than a private company. The board is delighted with the strong performance of the Company's share price since its flotation on the LSE in December 1999 and as a result the board has decided to recommend the split of the Company's 5p shares into units of 2.5p, which should improve liquidity. This matter will be presented for approval at the next AGM in January 2001. The Group board wishes to announce two appointments to the board of its Text 100 International subsidiary. One of the Group's non-executive directors, Ian Taylor MBE, MP takes on the new role of chairman while another Group director, Aedhmar Hynes, has been appointed CEO in place of Tim Dyson, who is now free to concentrate on the development of all the Group's brands in his role as Group CEO. The board expects that the market for its technology-related PR services will continue to grow strongly. The Group has made a good start to the new year and has already won some significant new business during the first quarter. Bite has been appointed to run a significant campaign for BT in connection with its 3G mobile phone licence and Text 100 in London has won technology-related assignments from Channel 5 and Barclays Bank. At the same time, the Group has established new Text 100 operations in New York and Palo Alto (Silicon Valley) while the Joe Public Relations brand has established its first subsidiary operation, Joe Public Future. As a result, the board is confident that the Group will continue to make good progress in the coming year. Finally, I'd like to say a few words to my colleagues all over the world - so many of whom are also shareholders and option holders. The Group's performance over the first year as a listed company has been a class act, and I congratulate you all on an outstanding performance. Yours faithfully, Chairman 20 October 2000 TEXT 100 GROUP PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 JULY 2000 Year ended Year ended 31 July 2000 31 July 1999 (UNAUDITED) (AUDITED) £'000 £'000 TURNOVER (Note 3) 36,440 22,771 Other external charges (6,404) (3,882) TURNOVER LESS OTHER EXTERNAL CHARGES 30,036 18,889 Staff costs (17,978) (11,027) Depreciation (1,031) (653) Other operating charges: Exceptional Flotation Costs (Note 4) 434 - Other operating charges 8,137 5,412 (8,571) (5,412) 2,456 1,797 OPERATING PROFIT Interest receivable and similar income 22 14 Interest payable and similar charges (212) (111) PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 2,266 1,700 Tax on profit on ordinary activities (Note 5) (1,078) (801) PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 1,188 899 MINORITY INTERESTS (69) (46) PROFIT ATTRIBUTABLE TO MEMBERS 1,119 853 OF THE HOLDING COMPANY Equity dividends paid and proposed (Note 6) (397) (309) RETAINED PROFIT FOR THE 722 544 FINANCIAL YEAR BASIC EARNINGS PER SHARE (Note 7) 5.75p 4.52p DILUTED EARNINGS PER SHARE (Note 7) 5.35p 4.35p ADJUSTED EARNINGS PER SHARE (Note 7) 7.89P 4.52p The profit and loss account for the year ended 31 July 2000 and the preceding year relate to the continuing activities of the Group. TEXT 100 GROUP PLC CONSOLIDATED BALANCE SHEET AS AT 31 JULY 2000 2000 1999 (UNAUDITED) (AUDITED) £'000 £'000 FIXED ASSETS Tangible assets 3,262 1,741 Investments 1,523 1,509 4,785 3,250 CURRENT ASSETS Debtors 9,014 6,469 Cash at bank and in hand 1,802 562 10,816 7,031 CREDITORS - Amounts falling due within one year (8,331) (5,538) NET CURRENT ASSETS 2,485 1,493 TOTAL ASSETS LESS CURRENT LIABILITIES 7,270 4,743 CREDITORS - Amounts falling due after more than one year (606) (409) PROVISIONS FOR LIABILITES AND CHARGES - Deferred - (22) tax NET ASSETS 6,664 4,312 EQUITY CAPITAL AND RESERVES Called up share capital 1,121 1,071 Share premium account 2,711 1,162 Profit and loss account 2,750 2,009 6,582 4,242 TOTAL EQUITY SHAREHOLDERS' FUNDS MINORITY INTERESTS 82 70 6,664 4,312 TEXT 100 GROUP PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 JULY 2000 2000 1999 £'000 £'000 NET CASH INFLOW FROM OPERATING ACTIVITIES (Note 8 (1)) 2,522 2,225 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received 22 13 Interest paid (212) (111) Minority interest dividends paid (18) (7) NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (208) (105) NET CASH OUTFLOW FROM TAXATION Corporation tax paid (1,093) (604) CAPITAL EXPENDITURE AND INVESTING ACTIVITIES Payments for long term deposits (73) (52) Payments to purchase own shares (75) (200) Payments to acquire tangible fixed assets (2,757) (1,102) Proceeds from sale of own shares 11 - Receipts from sales of tangible fixed assets 233 112 NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND INVESTING ACTIVITIES (2,661) (1,242) EQUITY DIVIDENDS PAID (185) (306) NET CASH OUTFLOW BEFORE FINANCING (Note 8 (3)) (1,625) (32) FINANCING Issue of ordinary share capital 1,599 - New bank loan 631 - Net capital outflow on hire purchase contracts (121) 297 NET CASH INFLOW FROM FINANCING 2,109 297 INCREASE IN CASH FOR THE YEAR (Note 8 (3)) 484 265 1) FINANCIAL INFORMATION The financial information set out in the announcement does not constitute the company's statutory accounts for the years ended 31 July 2000 or 1999. The financial information for the year ended 31 July 1999 is derived from the statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on those accounts; their report was unqualified and did not contain a statement under s237(2) or (3) Companies Act 1985. The statutory accounts for the year ended 31 July 2000 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the Registrar of Companies following the company's annual general meeting. 2) CHANGE OF ACCOUNTING POLICY There has been a change of accounting policy in relation to exchange rates. In order to increase accuracy of reporting for the profit and loss report only, an average rate has been used for the period ended 31 July 2000. In previous accounts reported, the period closing rate has been used as is used in balance sheet reporting. The Directors do not consider that this change has had a material effect on the reported profit and therefore the comparatives have not been restated. This announcement has been prepared on the basis of the accounting policies as stated in the financial statements for the year ended 31 July 1999, except as noted above. 3) SEGMENTAL INFORMATION Analysis of turnover, profit before taxation and net assets by geographic origin and destination. Year ended 31 July 2000 Year ended 31 July 1999 (UNAUDITED) (AUDITED) Turnover Profit Net Turnover Profit Net before assets before assets taxation taxation £'000 £'000 £'000 £'000 £'000 £'000 Europe, 25,832 1,307 4,834 18,450 1,261 3,813 Middle East & Africa North 7,790 984 865 3,481 705 537 America Asia 2,818 (25) 965 840 (266) (38) Pacific 36,440 2,266 6,664 22,771 1,700 4,312 The turnover relates to one class of business. The directors consider these regions to be separate geographic markets and the markets within which the group operates. 4) EXCEPTIONAL FLOTATION COSTS Exceptional flotation costs of £535k represent the fees and related expenses incurred in the process of obtaining a listing on the London Stock Exchange. Of these, £101k has been netted against share premium in accordance with section 130 of the Companies Act 1985 (as amended). 5) TAX ON PROFIT ON ORDINARY ACTIVITIES 2000 1999 (UNAUDITED) (AUDITED) £'000 £'000 UK corporation tax at 30% (1999: 30.67%) on the results 247 339 for the year Overseas taxation 869 495 Prior year (over) provision (16) (55) Deferred taxation (22) 22 1,078 801 6) DIVIDENDS An interim dividend of 0.6p per share has been paid for the year and a final dividend of 1.4p per share is proposed, making a total for the year of 2.0p (1999:1.6p). This final dividend will be paid on 1 February 2001 to shareholders who are on the register at 3 November 2000, assuming shareholder approval at the AGM in January 2001. 7) EARNINGS PER SHARE Earnings per share has been calculated in accordance with FRS14, using earnings of £1,119k (1999: £853k) and the weighted average number of shares in issue of 19,460,799 (1999: 18,845,187). Diluted earnings per share has also been calculated on the weighted average number of shares in issue, as adjusted by dilutive potential ordinary shares, of 20,923,395 (1999: 19,582,528). The adjusted earnings per share have been calculated by adding £417k of flotation costs after tax to the Profit attributable to members of £1,119k. 8) NOTES TO THE CASH FLOW STATEMENT (1) Reconciliation of operating profit to net cash inflow from operating activities 2000 1999 £'000 £'000 Operating profit 2,456 1,797 Depreciation 1,031 653 Profit on sale of own shares (11) - Exchange movements - 7 Profit on sale of tangible fixed assets (30) (84) Increase in debtors (2,444) (1,461) Increase in creditors 1,556 1,313 Increase in investments (14) - Decrease in provisions (22) - Net cash inflow from operating activities 2,522 2,225 (2) Analysis of changes in net funds during the year 31 July Cash flows Other Exchange 31 July 1999 changes movement 2000 £'000 £'000 £'000 £'000 £'000 Cash at bank and in 562 1,224 - 16 1,802 hand Bank overdraft (477) (740) - (1) (1,218) 85 484 - 15 584 Bank loans (200) (631) - - (831) Hire purchase (463) 148 (27) (4) (346) contracts Net funds (578) 1 (27) 11 (593) (3) Reconciliation of net cash flow to movement in net funds 2000 1999 £'000 £'000 Increase in cash at bank and in hand in the year 1,224 216 Cash (outflow)/inflow from increase in bank overdraft (740) 49 Increase in cash for the year 484 265 Cash inflow from bank loan (631) - Net cash outflow/(inflow) from hire purchase contracts 148 (268) Changes in net funds from cash flows 1 (3) Interest element of hire purchase contract payments (27) (29) Exchange movement 11 - Movement in net debt in the year (15) (32) Net debt at 1 August 1999 (578) (546) Net debt at 31 July 2000 (593) (578)
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