Final Results

OneMonday Group PLC 22 October 2001 22nd October 2001 OneMonday Group's Preliminary Results (year to 31st July 2001) * Turnover up 23% to £44.8 million. * Pre-exceptional profits from continuing operations of £1.76m. * Pre-tax profit of £1.31m, before exceptional restructuring costs of £ 982,000, ahead of market expectation. * Text 100 appointed to handle IBM's product PR worldwide to commence in autumn of 2001 and expected to yield billings of up to $18 million per year over two years. Other client wins include Dell UK and Whirlpool (AUGUST.ONE) and Mitsubishi and Woolworths (Joe Public Relations). * Board expects interim results for period up to 31st January 2002 to reflect continuing difficult market conditions - however it is confident that the second half of 2002 will be substantially stronger leading to a satisfactory outcome for the full year. * The restructuring costs are partly a consequence of an adjustment to the Group's business model to concentrate on our key brands and larger international clients in order to deliver long term international organic growth. * Today all five main board directors are purchasing between them 200,000 OneMonday Group shares. For further information, contact: Tom Lewis, Chairman, OneMonday Group plc 07802 609661 David Dewhurst, Finance Director 020 8996 4154 Nick Denton, Hogarth Partnership 020 7357 9477 Preliminary Announcement of Results for the Year to 31 July 2001 Dear Shareholder, After relatively strong results at the interim stage, the second half of the year to 31 July 2001 saw technology PR become the most depressed sector of the international public relations industry - with reduced fees and cancelled campaigns widespread among our client base. Despite this harsh climate the Group maintained its strong record of organic growth with a 23% increase in turnover to £44.8m. However, pre-tax profit from continuing operations, before exceptional reorganisation costs of £982k, fell to £1.76m (2000: £2.87m, before exceptional flotation costs). Adjusted basic earnings per share was down 54% at 1.8p. In view of the current economic conditions, the Board is not proposing a final dividend, leaving a total of 0.3p for the year (2000:1.0p). The technology industry in the US was the first to experience extreme difficulties at the beginning of 2001, and the malaise spread quickly throughout Europe during the following months. In practice, this meant that our Group went from strong growth, recruitment and infrastructure investment to sudden retrenchment and downsizing within a period of three months. The Group responded with determined action to reduce costs, shedding about 10% of its workforce, and decided to wind up a number of its operations, including Edinburgh (AUGUST.ONE) and Hamburg (Text 100), as well as its non-core interactive subsidiaries Brand X and FWP. This action has left the Group smaller, leaner and better able to meet the demands of a tighter market. Unsurprisingly, the share price suffered greatly in the stampede out of technology related investments during this period. Of the Group's four key brands - Text 100, AUGUST.ONE, Bite and Joe Public Relations - the strongest performance came from Bite, which not only grew strongly in the UK throughout the year but also made a profit from its fledgling overseas operation in San Francisco. It is still the intention of the Group to float a minority stake in Bite on the OFEX trading facility to further motivate Bite staff, but this has been postponed until markets improve. In August 2001, the Text 100 brand succeeded in winning one of the largest worldwide technology PR pitches ever held, when it was appointed to handle IBM's product PR. This business is scheduled to commence in October/November and yield billings of up to $18m per year for the next two years. It provides the Group with a powerful validation of its largest brand and the strength of its worldwide offering in technology PR. The Board is also confident of the ability of the other key brands to make progress in the current financial year following AUGUST.ONE's appointment by Dell UK and Whirlpool and Joe Public Relations' appointment by Mitsubishi and Woolworths. I look back on the year ended 31 July 2001 as a difficult year in which the Group successfully adjusted its business to dramatically altered market conditions. The immediate outlook is uncertain, particularly after the events of September 11, and any further downturn in market conditions will be met with further reductions in costs. The interim results for the six months to 31 January 2002 will reflect the continuing difficult market conditions and the hiatus between the loss of competitive business and the gradual acceleration of work on behalf of IBM. However, the board is confident that this will be followed by a substantially stronger second half in which the Group will benefit from reduced overheads, elimination of loss making operations and the full impact of major new business wins. The Group has been built organically, reinvesting retained profits and making modest use of bank facilities, leaving a relatively low-geared balance sheet. At 31 July 2001, the net debt was £1.1m (2000: £0.6m), representing a gearing level of 17% (2000: 9%). The Group has made encouraging progress in the last year reducing the credit cycle taken by clients. With a focus on prudent cash management, including the decision not to pay a final dividend, the completion of the reorganisation activities will be achieved without the need for a high level of gearing. The Group's emphasis on organic growth means that it faces the future without the burden of deferred acquisition payments, which have affected others in our sector. As a result, we are well positioned to withstand any prolonged downturn that may lie ahead, and will be able to benefit quickly when confidence returns to the technology markets. Yours faithfully, Tom Lewis Chairman 19 October 2001 ONEMONDAY GROUP PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 JULY 2001 Year ended Year ended 31 July 2001 31 July 2000 (UNAUDITED) (AUDITED) £'000 £'000 TURNOVER (Note 3) Continuing operations 44,500 36,327 Discontinuing operations 292 113 44,792 36,440 Other external charges (5,215) (6,404) NET REVENUE 39,577 30,036 Staff costs 25,102 17,978 Depreciation 1,681 1,031 Other operating charges: Exceptional reorganisation costs (Note 4) 982 - Exceptional flotation costs (Note 4) - 434 Other operating charges 11,290 8,137 (39,055) (27,580) OPERATING PROFIT Continuing operations 969 2,625 Discontinuing operations (447) (169) 522 2,456 Interest receivable and similar income 71 22 Interest payable and similar charges (264) (212) PROFIT ON ORDINARY ACTIVITIES BEFORE 329 2,266 TAXATION Tax on profit on ordinary activities (294) (1,078) (Note 5) PROFIT ON ORDINARY ACTIVITIES AFTER 35 1,188 TAXATION MINORITY INTERESTS (18) (69) PROFIT ATTRIBUTABLE TO MEMBERS 17 1,119 OF THE HOLDING COMPANY Equity dividends paid and proposed (Note (122) (397) 6) RETAINED (LOSS)/PROFIT FOR THE (105) 722 FINANCIAL YEAR BASIC EARNINGS PER SHARE (Note 7) 0.042p 2.875p DILUTED EARNINGS PER SHARE (Note 7) 0.039p 2.675p ADJUSTED EARNINGS PER SHARE (Note 7) 1.795p 3.945p ONEMONDAY GROUP PLC CONSOLIDATED BALANCE SHEET AS AT 31 JULY 2001 2001 2000 (UNAUDITED) (AUDITED) £'000 £'000 FIXED ASSETS Tangible assets 3,809 3,262 Investments 1,523 1,523 5,332 4,785 CURRENT ASSETS Debtors 7,555 9,014 Cash at bank and in hand 2,450 1,802 10,005 10,816 CREDITORS - Amounts falling due within one year (5,990) (8,331) NET CURRENT ASSETS 4,015 2,485 TOTAL ASSETS LESS CURRENT LIABILITIES 9,347 7,270 CREDITORS - Amounts falling due after more than one year (2,431) (606) PROVISIONS FOR LIABILITES AND CHARGES - (448) - Reorganisation provision NET ASSETS 6,468 6,664 EQUITY CAPITAL AND RESERVES Called up share capital 1,121 1,121 Share premium account 2,711 2,711 Profit and loss account 2,562 2,750 6,394 6,582 TOTAL EQUITY SHAREHOLDERS' FUNDS MINORITY INTERESTS 74 82 6,468 6,664 ONEMONDAY GROUP PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 JULY 2001 2001 2000 (UNAUDITED) (AUDITED) £'000 £'000 NET CASH INFLOW FROM OPERATING ACTIVITIES (Note 8 (1)) 3,912 2,522 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received 71 22 Interest paid (264) (212) Minority interest dividends paid (20) (18) NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (213) (208) NET CASH OUTFLOW FROM TAXATION Corporation tax paid (1,416) (1,093) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Payments for long term deposits - (73) Payments to purchase own shares - (75) Payments to acquire tangible fixed assets (2,387) (2,757) Proceeds from sale of own shares 20 11 Receipts from sales of tangible fixed assets 89 233 NET CASH OUTFLOW FROM CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT (2,278) (2,661) ACQUISITIONS AND DISPOSALS Purchase of minority interest (50) - EQUITY DIVIDENDS PAID (400) (185) NET CASH OUTFLOW BEFORE FINANCING (445) (1,625) FINANCING Issue of ordinary share capital - 1,599 Medium term bank loan 1,409 631 Net capital outflow on hire purchase contracts (10) (121) NET CASH INFLOW FROM FINANCING 1,399 2,109 INCREASE IN CASH FOR THE YEAR (Note 8 (3)) 954 484 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 2001 or 2000. The financial information for the year ended 31 July 2000 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 2001 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 deferred tax. The group has adopted FRS 19 Deferred tax early. Deferred tax is provided in full on timing differences which result in an obligation at the balance sheet date to pay more tax, or a right to pay less tax, at a future date, at rates expected to apply when they crystallise based on current tax rates and law. Timing differences arise from the inclusion of items of income and expenditure in taxation computations in periods different from those in which they are included in financial statements. Deferred tax is not provided on timing differences arising from the revaluation of fixed assets where there is no commitment to sell the asset, or on unremitted earnings of subsidiaries where there is no commitment to remit these earnings. Deferred tax assets are recognised to the extent that it is regarded as more likely than not that they will be recovered. Deferred tax assets and liabilities are not discounted. This announcement has been prepared on the basis of the accounting policies as stated in the financial statements for the year ended 31 July 2000, except as noted above. 3) SEGMENTAL INFORMATION Analysis of turnover, profit before taxation and net assets by geographic origin and destination. The turnover relates to one class of business. Year ended 31 July 2001 Year ended 31 July 2000 (UNAUDITED) (AUDITED) Turnover Profit Net Turnover Profit Net assets before assets before taxation taxation £'000 £'000 £'000 £'000 £'000 £'000 Continuing activities: Europe, Middle East and Africa 28,201 893 4,285 25,832 1,300 4,633 North America 11,725 (165) 1,503 7,677 1,154 1,069 Asia Pacific 4,574 59 117 2,818 (25) (125) Non- allocated - 18 1,227 - 7 1,249 assets 44,500 805 7,132 36,327 2,436 6,826 Discontinued activities: North America 292 (476) (664) 113 (170) (162) 292 (476) (664) 113 (170) (162) Total 44,792 329 6,468 36,440 2,266 6,664 The directors consider these regions to be separate geographic markets and the markets within which the Group operates. 4) EXCEPTIONAL COSTS Exceptional reorganisation costs of £982k represent measures taken to restructure the business in response to difficult market conditions particularly impacting the technology industry. This has principally involved redundancies at all levels throughout the Group in North America and Europe. Exceptional flotation costs, in the year ended 31 July 2000, 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 2001 2000 (UNAUDITED) (AUDITED) £'000 £'000 UK corporation tax at 30% (2000: 30%) on the results for the 212 247 year Overseas taxation 192 869 Prior year under/(over) provision (UK) 6 (18) Prior year (over)/under provision (overseas) (49) 2 Deferred taxation (67) (22) 294 1,078 6) DIVIDENDS An interim dividend of 0.3p per share has been paid for the year and no final dividend is proposed, making a total for the year of 0.3p (2000:1.0p). 7) EARNINGS PER SHARE Earnings per share has been calculated in accordance with FRS14, using earnings of £17k (2000: £1,119k) and the weighted average number of shares in issue of 39,855,390 (2000: 38,921,598). 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 43,077,008 (2000: 41,846,790). The adjusted earnings per share has been calculated by adding £699k of exceptional reorganisation costs after tax to the profit attributable to members of £17k in 2001 and in 2000 by adding £417k of exceptional 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 2001 2000 (UNAUDITED) (AUDITED) £'000 £'000 Operating profit 522 2,456 Depreciation 1,681 1,031 Profit on sale of own shares (20) (11) Loss / (profit) on sale of tangible fixed assets 91 (30) Decrease / (increase) in debtors 1,731 (2,444) (Decrease) / increase in creditors (541) 1,556 Increase in investments - (14) Increase / (decrease) in provisions 448 (22) Net cash inflow from operating activities 3,912 2,522 (2) Analysis of changes in net funds during the year 31 July 2000 Cash flows Exchange 31 July 2001 movement (AUDITED) (UNAUDITED) £'000 £'000 £'000 £'000 Cash at bank and in hand 1,802 686 (38) 2,450 Bank overdraft (1,218) 268 - (950) 584 954 (38) 1,500 Bank loans (831) (1,409) (28) (2,268) Hire purchase contracts (346) 10 (12) (348) Net funds (593) (445) (78) (1,116) (3) Reconciliation of net cash flow to movement in net funds 2001 2000 (UNAUDITED) (AUDITED) £'000 £'000 Increase in cash at bank and in hand in the year 686 1,224 Cash inflow/(outflow) from decrease/(increase) in bank 268 (740) overdraft Increase in cash for the year 954 484 Cash inflow from bank loan (1,409) (631) Net cash outflow from hire purchase contracts 10 148 Changes in net funds from cash flows (445) 1 Interest element of hire purchase contract payments - (27) Exchange movement (78) 11 Movement in net debt in the year (523) (15) Net debt at 1 August 2000 (593) (578) Net debt at 31 July 2001 (1,116) (593)

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