Final Results

OneMonday Group PLC 21 October 2002 Press Release Announcement 21st October 2002 OneMonday Group's Preliminary Results (year to 31st July 2002) • Operating profit from continuing operations before reorganisation costs was up 13% at £2.20m (2001 £1.95m); adjusted eps was up 22% at 2.18p. • Post exceptional PBT was £4.07m including a £3.13m contribution from the sale of the OneMonday name. The proceeds have been used to pay off debt, strengthen the balance sheet and used to fund the purchase of 2 million of the Company shares for its ESOT. • The Board is proposing a final dividend of 0.9p, which is the total for the year (2001: 0.3p) • The Group's new name will be Next Fifteen Communications Group plc. • New business assignments have been won from AXA, IXOS, NTT/Verio, PeopleSoft and TotalFinaElf. • Trading conditions remain difficult, but the Group has performed satisfactorily in the first few months of the financial year. The Board is optimistic about the current financial year and believes that further progress will be made. 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 2002 Dear Shareholder, Given the prevailing economic circumstances, I'm pleased to report a satisfactory trading performance from the Group in the year to 31 July 2002, which was in line with the expectations we had at the half-year. This year's figures include the proceeds from the sale of our rights to the OneMonday name. The headline figures show a pre-tax profit of £4.07m, which includes a £3.13m contribution from the trademark sale. In a technology-led PR market that declined by 20%, annual turnover was £40.25m, down 10% overall. Operating profit from continuing operations, before reorganisation costs, was £2.20m, compared with £1.95m last year, a rise of 13%. This improvement in the face of the revenue decline reflected a welcome improvement in operating margins. For the second year running, however, our results are hampered by reorganisation costs, including redundancies, surplus office space provisions and brand closure costs, amounting to £947k (2001: £982k). The basic earnings per share were 5.94p (2001:0.04p) but the more relevant adjusted earnings per share were 2.18p, a rise of 22% over the previous year. In view of the recovery in the Group's fortunes over the past year, the Board is proposing a final dividend of 0.9p, which is the total for the year (2001:0.3p). It is pleasing to see the Group return to stronger levels of profit and this is a very creditable recovery over the previous year, achieved in a deteriorating market. Of equal significance is the marked improvement in the Group's net funds position, which improved by £5.1m over the previous year-end. £2m of this improvement came from cash generated through normal trading activities and the balance from the trademark sale. To put these numbers into some context, on average the top ten technology PR firms saw their revenues drop 20% in 2001 (source: Council of PR Firms PR agency rankings). Against this backdrop I believe the decline in our revenues of slightly less than 10% reflects the strong performances of the Group's PR brands. It is also encouraging to note that while the technology sector has not rebounded there are signs that the sector has stabilised and in the coming year, with many smaller competitors removed from the market, growth opportunities should re-emerge. In broad terms, trading conditions remain difficult. The US has been our strongest market with the bedding in of the IBM business backed by the addition of clients including NTT/Verio and IXOS, while trading in Asia Pacific remains relatively depressed. Progress in Europe has been patchy, with strong performances coming from AUGUST.ONE and Bite Communications in London, as well as from the Text 100 subsidiaries in Spain, Italy and Sweden. AUGUST.ONE in particular has enjoyed a strong new business performance, and won assignments from companies including PeopleSoft, TotalFinaElf and AXA. Thanks to AUGUST.ONE, the Group this year also celebrates twenty years of working with Microsoft. This is a testament to the Group's ability to retain major brand clients even through periods of significant economic and technological change. This brings me onto the most remarkable component of this year's figures, namely the sale of our rights to the name 'OneMonday' for $5 million, which completed just before the year-end. This was a massive windfall for a company of our size, and after deduction of the expenses involved in arriving at and implementing the new name, contributed £3.13m to the year's total pre-tax profit of £4.07m. Subject to shareholder approval at the EGM scheduled for 12 November 2002, the Group's new name will be Next Fifteen Communications Group plc, which was inspired by Andy Warhol's memorable remark, 'in the future, everybody will be world-famous for 15 minutes.' The windfall has been used to settle the Group's limited borrowings and substantially strengthen its balance sheet, which showed net cash of over £4m at year-end. Since then, £0.5m of the proceeds has been used to fund the purchase of 2m of the Company's shares by the Employee Share Ownership Trust, to allow us to continue to offer equity motivation to employees without further diluting existing shareholdings. The Board's final dividend recommendation exceeds analysts' expectations and will, I hope, provide some measure of compensation to our shareholders for their loyalty to the Group during atrocious market conditions. Looking forward, the Board hopes to reintroduce an interim dividend payment and expects that dividends will assume a greater importance for shareholders than was the case in the past. The last year has seen investors and analysts focusing closely on the extreme difficulties and dangers that lie in building a people-based service business by acquisition. Our emphasis on organic growth and start-up subsidiaries, which can seem unadventurous during boom times, looks a great deal more attractive under today's difficult conditions. Our Group can look to the future without deferred acquisition payments in cash or stock, a strong balance sheet, and a young senior management team, which owns more than 30% of the business. All these factors give me great confidence that the Group will enjoy a bright future once a modicum of growth returns to world technology markets. More specifically, our Group will not spend the first years of an upturn struggling with a devastated balance sheet and the legacy of acquisition-led growth. Even if economic recovery remains a year or two away, the Group has demonstrated that in the worst market conditions the technology industry has ever experienced, it can still operate profitably and generate cash. The Group has performed satisfactorily in the first few months of the new financial year in market conditions that remain difficult. However, the Board is optimistic about the current financial year and believes that further progress will be made. Yours faithfully, Tom Lewis Chairman 21 October 2002 ONEMONDAY GROUP PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 JULY 2002 Year ended Year ended 31 July 2002 31 July 2001 (UNAUDITED) (AUDITED) £'000 £'000 TURNOVER (Note 2) Continuing operations 40,172 44,500 Discontinued operations 78 292 40,250 44,792 Other external charges (4,458) (5,215) NET REVENUE 35,792 39,577 Staff costs 22,610 25,102 Depreciation and amortisation 1,820 1,681 Other operating charges: Exceptional reorganisation 947 982 costs (Note 3) Other operating charges 9,364 11,290 (34,741) (39,055) OPERATING PROFIT Continuing operations 1,249 969 Discontinued operations (198) (447) 1,051 522 Exceptional profit relating to sale of trade mark (note 4) 3,132 - Interest receivable and similar income 62 71 Interest payable and similar charges (178) (264) PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 4,067 329 Tax on profit on ordinary activities (Note 5) (1,614) (294) PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION 2,453 35 MINORITY INTERESTS (72) (18) PROFIT ATTRIBUTABLE TO MEMBERS 2,381 17 OF THE HOLDING COMPANY Equity dividends paid and proposed (Note 6) (361) (122) RETAINED PROFIT/(LOSS) FOR THE 2,020 (105) FINANCIAL YEAR BASIC EARNINGS PER SHARE (Note 7) 5.937p 0.042p DILUTED EARNINGS PER SHARE (Note 7) 5.781p 0.039p ADJUSTED EARNINGS PER SHARE (Note 7) 2.184p 1.795p ONEMONDAY GROUP PLC CONSOLIDATED BALANCE SHEET AS AT 31 JULY 2002 2002 2001 (UNAUDITED) (AUDITED) £'000 £'000 FIXED ASSETS Tangible assets 3,228 3,809 Investments 1,509 1,523 4,737 5,332 CURRENT ASSETS Debtors 6,470 7,555 Cash at bank and in hand 4,724 2,450 11,194 10,005 CREDITORS - Amounts falling due within one year (6,891) (5,990) NET CURRENT ASSETS 4,303 4,015 TOTAL ASSETS LESS CURRENT LIABILITIES 9,040 9,347 CREDITORS - Amounts falling due after more than one year (208) (2,431) PROVISIONS FOR LIABILITES AND CHARGES - Reorganisation provision (460) (448) NET ASSETS 8,372 6,468 EQUITY CAPITAL AND RESERVES Called up share capital 1,121 1,121 Share premium account 2,711 2,711 Profit and loss account 4,465 2,562 8,297 6,394 TOTAL EQUITY SHAREHOLDERS' FUNDS MINORITY INTERESTS 75 74 8,372 6,468 ONEMONDAY GROUP PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 JULY 2002 2002 2001 (UNAUDITED) (AUDITED) £'000 £'000 NET CASH INFLOW FROM OPERATING ACTIVITIES (Note 8 (1)) 4,284 3,829 RETURNS ON INVESTMENTS AND SERVICING OF FINANCE Interest received 62 71 Interest paid (178) (264) Minority interest dividends paid (36) (20) NET CASH OUTFLOW FROM RETURNS ON INVESTMENTS AND SERVICING OF FINANCE (152) (213) NET CASH OUTFLOW FROM TAXATION Corporation tax paid (702) (1,416) CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT Payments for long term deposits (53) - Payments relating to sale of trademark (73) - Payments to acquire tangible fixed assets (977) (2,387) Proceeds from sale of trade mark 3,205 Proceeds from sale of own shares 8 20 Receipts from sales of tangible fixed assets 209 172 NET CASH INFLOW/(OUTFLOW) FROM CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT 2,319 (2,195) ACQUISITIONS AND DISPOSALS Purchase of minority interest - (50) EQUITY DIVIDENDS PAID - (400) NET CASH INFLOW/(OUTFLOW) BEFORE FINANCING 5,749 (445) FINANCING Net capital (outflow)/inflow from bank loans (2,256) 1,409 Capital element of finance lease payments (415) (10) NET CASH (OUTFLOW)/INFLOW FROM FINANCING (2,671) 1,399 INCREASE IN CASH FOR THE YEAR (Note 8 (3)) 3,078 954 NOTES TO THE PRELIMINARY STATEMENT FOR THE YEAR ENDED 31 JULY 2002 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 2002 or 2001. The financial information for the year ended 31 July 2001 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 2002 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) 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 2002 Year ended 31 July 2001 (UNAUDITED) (AUDITED) Turnover Profit Net assets Turnover Profit Net assets before tax before tax £'000 £'000 £'000 £'000 £'000 £'000 Continuing activities: Europe, Middle East 22,433 *3,985 *6,382 28,201 893 4,546 and Africa North America 13,179 432 1,499 11,725 (165) 1,220 Asia Pacific 4,560 (154) (208) 4,574 59 117 Non- allocated - 2 1,450 - 18 1,249 assets 40,172 4,265 9,123 44,500 805 7,132 Discontinued activities: Europe, Middle East and Africa 71 (143) (41) - - - North America 7 (55) (710) 292 (476) (664) 78 (198) (751) 292 (476) (664) Total 40,250 4,067 8,372 44,792 329 6,468 The directors consider these regions to be separate geographic markets and the markets within which the Group operates. *The Europe, Middle East and Africa region includes, in its profit before tax, the exceptional profit on sale of the trademark of £3,132k and in its net assets, the exceptional profit after tax on sale of the trademark of £2,192k. 3) EXCEPTIONAL COSTS Exceptional reorganisation costs of £947k represent measures taken to restructure the business in response to difficult market conditions particularly impacting the technology industry. This has involved redundancies at all levels throughout the Group and closure of non-core brands. A provision has also been made to recognise obligations under certain property leases,which are surplus to current requirements. 4) EXCEPTIONAL PROFIT An exceptional profit has arisen following the sale of the OneMonday trademark on 31 July 2002. Proceeds of £3,205k were received and net costs, including legal fees and re-branding, of £73k were incurred relating to the sale. 5) TAX ON PROFIT ON ORDINARY ACTIVITIES 2002 2001 (UNAUDITED) (AUDITED) £'000 £'000 UK corporation tax at 30% (2001: 30%) on the results for the year 1,110 212 Overseas taxation 639 192 1,749 404 Prior year (over)/under provision (UK) (82) 6 Prior year under/(over) provision (overseas) 109 (49) Deferred taxation (162) (67) 1,614 294 6) DIVIDENDS A final dividend of 0.9p per share has been proposed. There was no interim dividend (Total in 2001:0.3p). 7) EARNINGS PER SHARE Earnings per share has been calculated in accordance with FRS14, using earnings of £2,381k (2001: £17k) and the weighted average number of shares in issue of 40,108,105 (2001: 39,855,390). 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 41,188,087 (2001: 43,077,008). The adjusted earnings per share has been calculated by adding £687k of exceptional reorganisation costs, after tax, and deducting the exceptional profit arising from the sale of the OneMonday trademark of £2,192k, after tax, to the profit attributable to members of £2,381k in 2002. In 2001, £699k of exceptional reorganisation costs after tax was added to the profit attributable to members of £17k. 8) NOTES TO THE CASH FLOW STATEMENT (1) Reconciliation of operating profit to net cash inflow from operating activities 2002 2001 (UNAUDITED) (AUDITED) £'000 £'000 Operating profit 1,051 522 Depreciation and amortisation 1,820 1,681 Profit on sale of own shares (8) (20) Loss on sale of tangible fixed assets 33 8 Loss on disposal of investments 14 - Decrease in debtors 1,065 1,731 Increase / (decrease) in creditors 297 (541) Increase in provisions 12 448 Net cash inflow from operating activities 4,284 3,829 (2) Analysis of changes in net debt during the year 31 July 2001 Cash Other Exchange 31 July flows changes movement 2002 (Audited) (Unaudited) £'000 £'000 £'000 £'000 £'000 Cash at bank and in hand 2,450 2,283 - (9) 4,724 Bank overdraft (950) 795 - 1 (154) 1,500 3,078 - (8) 4,570 Bank loans due within one year - - (75) - (75) Bank loans due after one year (2,268) 2,256 75 (63) - Hire purchase contracts (348) 415 (544) 2 (475) Net (debt)/funds (1,116) 5,749 (544) (69) 4,020 (3) Reconciliation of net cash flow to movement in net debt 2002 2001 (UNAUDITED) (AUDITED) £'000 £'000 Increase in cash at bank and in hand in the year 2,283 686 Cash inflow from decrease in bank overdraft 795 268 Increase in cash for the year 3,078 954 Cash outflow/(inflow) from bank loan 2,256 (1,409) Net movement on finance leases (129) 10 Changes in net funds from cash flows 5,205 (445) Exchange movement (69) (78) Movement in net debt in the year 5,136 (523) Net debt at 1 August 2001 (1,116) (593) Net funds at 31 July 2002 4,020 (1,116) This information is provided by RNS The company news service from the London Stock Exchange

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