Interim Results

Adventis Group PLC 29 September 2006 For release 7.00am September 29 2006 ADVENTIS GROUP PLC Interim Results 2006 Adventis Group plc, the specialist multi-media marketing and advertising agency, today announces its results for the half-year ended 30 June 2006. • Profit before tax up 52% at £799k (2005 - £527k) • Turnover up by 53% to £16.4m (2005 - £10.7m) • Basic EPS up by 45% to 1.6p (2005 - 1.1p) • Interim dividend per share up 5% at 0.22p (2005 - 0.21p) • Operating profit from new ventures in 2006 totalling £133k (2005 - £151k) • Acquisition of Roundhouse Advertising Limited and The Coltman Media Company Limited (now Adventis Coltman Limited) completed May 2006 • Strong balance sheet to support further acquisitions • Major client wins include Howard Holdings, St Martins Property Corporation Ltd., Slough Estates, South West Regional Development Agency, Morley Fund Management, Farnborough Business Park, Abstract Land and Exemplar. • Share buy-back in January 2006 of 325,000 shares Peter Mitchell, Chairman of Adventis Group plc, commented: 'The first six months of 2006 has seen a continuation of the success we have built since floating on AIM in July 2004. The acquisition of a further two businesses has strengthened our existing business and will enhance our position as a major player in the residential and commercial property, financial services and healthcare media sectors. The outcome for the remainder of the year looks encouraging. ' For further information, contact: Adventis Group plc Charles Phillpot, Chief Executive Officer 0020 7034 4750 Seymour Pierce Sarah Jacobs 0020 7107 8008 Adventis Financial PR Peter Binns 0020 7034 4760 / 07768 392 582 Chris Steele 0020 7034 4759 / 07979 604 687 Tarquin Edwards 0020 7034 4758 / 07879 458 364 Chief Executive Officer's Statement for the half year ended 30 June 2006 Trading Update I am pleased to report a strong set of results for the half year ended 30 June 2006, with record levels of billings and profits, both organically across most of our businesses and through acquisitions. Group billings of £16.4m were up 53% (2005: £10.7m) and pre-tax profit of £799k was up 52% (2005: £527k). This represents the third successive year of significantly increased billings and profits and the Company has continued to benefit from healthy margins and strong cash flow. The earnings per share rose by 45% for January - June 2006 to 1.6p compared with 1.1p for the previous half year. Dividend The Board is recommending an increase of 5% in the interim dividend at 0.22p (2005 0.21p) per share, payable to shareholders registered on 13th October for payment on 27th October. Financial Position Net cash balance on 30 June 2006 was £1.4m, indicating our continued ability to translate revenue growth into cash. Market Overview The group operates in a competitive market place in media planning and buying; PR; direct marketing, and other marketing services comprising corporate identity programmes, advertising campaigns, digital media and collateral materials. There is a rising demand for specialists in various marketing fields and the margins generated tend to be greater than those that the mainstream generalists can earn. Our revenues are generated predominantly in the form of both retainers and fees for project specific work. Many of our clients have very long standing relationships with the Group. Business Strategy The group enjoyed a more buoyant market in 2006. Since our admission to AIM on 1st July 2004 we have pursued our stated business strategy of increasing the market share for our media services in the residential and commercial property, financial services and healthcare sectors. Acquisitions and Joint Ventures In May 2006 the Group announced the acquisition of The Coltman Media Company Ltd (now renamed Adventis Coltman Ltd), a financial services specialist media buying company and the acquisition of Roundhouse Advertising Limited, a specialist healthcare agency. Since the half year the Group has successfully launched Adventis Financial PR, based on the 'Financial PR Firm of the year 2005', Binns & Co PR. The addition of M-Squared, a specialist property marketing agency has served to strengthen our offering in the residential market. Operational Review The following is a summary of activity by business sector for the six months ended 30 June 2006: Residential Property Marketing Sector Our residential property marketing sector has a broad base of clients from international names such as Savills to many UK developers such as Capital & Provident, Higgins Homes, Galliard Homes and Grove Manor Homes. It provides a broad range of consultancy and creative services across the industry and has continued to grow this creative business with encouraging margins. Commercial Property Marketing Sector Our commercial property marketing sector won several major long-term projects in 2005/6 such as Howard Holdings, St Martins Property Corporation Ltd., Abstract Land, Slough Estates, South West Regional Development Agency, Morley Fund Management, Farnborough Business Park Abstract Land, Exemplar. These project successes continue to give the business a positive order book for the current year. Financial Services Sector Adventis NMG Ltd, which specialises in financial services continued to trade profitably for the period. A series of projects were concluded in 2005 for clients such as Lexis Nexis. The addition of Adventis Coltman Ltd and Adventis Financial PR has enhanced our offering in the Financial Services sector and will facilitate further growth of Adventis NMG. Healthcare Sector Affiniti (UK) Ltd and Roundhouse Advertising when combined are in the top ten UK Healthcare Marketing Companies. The scale of the operation is important in this sector as the multinational pharmaceutical clients increasingly prefer larger service groups. These two companies will shortly move to shared premises in order to achieve a larger pool of specialist talent plus further economies of scale. Media Planning and Buying Sector Our three media planning and buying companies, Premium Media Ltd, Adgenda Media Ltd and Adventis Coltman Ltd., are a significant force in the media sector. They have full NPA (Newspapers Publishing Association) recognition and enjoy very favourable commercial terms with media owners. Media broking works very much in tandem with our creative business. Business volumes continue to grow at good margins for this industry. Outlook The second half has started well and we are encouraged by the prospects for the current year. We continue to raise our profile in our chosen market sectors of property, healthcare and financial services. More opportunities are offering themselves to us in these areas and we are able to be very selective in making further acquisitions and focus hard on agreeing the best possible terms for the Group. Our strong cash position, profit performance and balance sheet will enable further strategic developments and we continue to explore ways of growing the group while ensuring our profit record is maintained. Charles Phillpot Chief Executive Officer Adventis Group Plc Group income statement * Restated 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000 -------- ---------- --------- Turnover Continuing operations 14,094 7,305 13,893 Acquisitions 2,340 3,394 8,008 -------- ---------- --------- 16,434 10,699 21,901 -------- ---------- --------- Operating profit Continuing operations 601 331 550 Acquisitions 133 151 379 -------- ---------- --------- Profit on ordinary activities before interest 734 482 929 Net interest receivable 65 45 102 Finance costs - - (4) -------- ---------- --------- Profit on ordinary activities before taxation 799 527 1,027 Taxation on profit on ordinary activities (240) (164) (105) -------- ---------- --------- Profit for the period 559 363 922 -------- ---------- --------- Attributable to: 558 374 876 Equity holders of the parent Minority interest 1 (11) 46 -------- ---------- --------- Profit for the period 559 363 922 -------- ---------- --------- Earnings per share ('EPS') 3 ------------------------ ----- -------- ---------- --------- Basic earnings per share Average number of shares in issue (number) 34,720,045 32,509,248 32,977,826 EPS (pence) 1.61 1.11 2.66 Fully diluted earnings per share Fully diluted average number of shares in issue (number) 35,107,236 33,337,748 33,242,904 EPS (pence) 1.59 1.09 2.63 ------------------------ ----- -------- ---------- --------- * Figures restated for IFRS Adventis Group Plc * Restated Group Balance Sheet 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000 -------- -------- --------- ASSETS Non-current assets Property, plant and equipment 303 207 194 Goodwill and other intangible assets 9,638 2,784 2,243 Deferred tax asset 181 - 181 -------- -------- --------- 10,122 2,991 2,618 Current assets Work in progress 252 1 151 Trade and other receivables 7,527 5,698 3,488 Cash and cash equivalents 1,363 1,643 2,585 -------- -------- --------- 9,142 7,342 6,224 -------- -------- --------- Total assets 19,264 10,333 8,842 -------- -------- --------- EQUITY Capital and reserves attributable to equity holders of the parent Share capital 2 88 81 81 Share premium account 3,849 2,862 2,862 Capital redemption reserve 200 200 200 Other reserves 20 20 20 Retained earnings 2,339 1,456 1,915 -------- -------- --------- 6,496 4,619 5,078 Minority Interest 48 1 47 -------- -------- --------- Total equity 6,544 4,620 5,125 -------- -------- --------- LIABILITIES Non-current liabilities Obligations under finance leases - due in more than one year - 15 - Provisions for other liabilities and charges 6 - 6 Deferred consideration 4,022 1,569 964 -------- -------- --------- 4,028 1,584 970 -------- -------- --------- Current liabilities Trade and other payables 5,618 3,816 2,248 Current income tax liabilities 267 174 149 Obligations under finance leases - due in less than one year - 2 12 Provisions for other liabilities and charges 34 12 19 Deferred consideration 2,773 125 319 -------- -------- --------- 8,692 4,129 2,747 -------- -------- --------- Total liabilities 12,720 5,713 3,717 -------- -------- --------- Total equity and liabilities 19,264 10,333 8,842 -------- -------- --------- Adventis Group Plc Group statement of changes in equity Share Share Premium Capital Minority Retained Shareholders capital account Reserves Interests earnings funds - equity £'000 £'000 £'000 £'000 £'000 £'000 ------- -------- ------- -------- ------- --------- Balance at 1 January 2005 79 2,563 220 1 1,223 4,086 Profit for the period - - - - 363 363 Dividends - - - - (130) (130) Issue of share capital 2 299 301 Share based payments ------- -------- ------- -------- ------- --------- Balance at 30 June 2005 81 2,862 220 1 1,456 4,620 Profit for the period - - - - 559 559 Dividends paid - (68) (68) Minority interest - - - 46 (46) - Issue of share capital - - - - - Share based payments - 14 14 ------- -------- ------- -------- ------- --------- Balance at 31 December 2005 81 2,862 220 47 1,915 5,125 Profit for the period - - - - 559 559 Dividends - - - - (142) (142) Minority interest 1 (1) - Issue of share capital 7 987 - - - 994 Share based payments 8 8 Balance at 30 June 2006 88 3,849 220 48 2,339 6,544 ------- -------- ------- -------- ------- --------- Adventis Group Plc Group cash flow statement 6 months to 6 months to 12 months to 30 June 30 June 31 December 2006 2005 2005 Note £'000 £'000 £'000 --------- ------- -------- Cash generated from operating activities (139) (687) 477 Income taxes paid (122) (140) (317) Interest paid (5) (1) (4) --------- ------- -------- Net cash (used in)/from operating activities (266) (828) 156 Cashflows from investing activities Interest received 65 46 102 Purchase of property plant and equipment (125) (9) (59) Purchase of other investments (143) - - Acquisition of subsidiaries 4 (679) (599) (581) --------- ------- -------- Net cash used in investment activities (882) (562) (538) Cashflows from financing activities Dividends paid (142) (130) (198) Repayments of obligations under finance leases (2) (7) (9) Proceeds of issuing share capital 70 - - --------- ------- -------- Net cash (used in)/from financing activities (74) (137) (207) --------- ------- -------- Net (decrease)/increase in cash and cash equivalents (1,222) (1,527) (589) Cash and cash equivalents at the beginning of the period 2,585 3,153 3,174 --------- ------- -------- Cash and cash equivalents at the end of the period 1,363 1,626 2,585 ========= ======= ======== Adventis Group Plc Notes to the accounts Note 1 Principal accounting policies On 19 August 2005 the Adventis Group announced that from 1 January 2005, the Group will 'early adopt' and prepare all future consolidated financial statements in accordance with International Accounting Standards and International Financial Reporting Standards (jointly 'IFRS'), as adopted by the European Union ('EU') and applicable to all AIM quoted companies for financial reporting periods beginning on or after 1 January 2007. These unaudited interim financial statements do not constitute statutory accounts within the meaning of s240 of the Companies Act 1985. The statutory accounts for the year ended 31 December 2005 (from which comparative figures have been extracted) on which the auditors gave an unqualified audit report, have been filed with the Registrar of Companies. Note 2 Share capital 30 June 30 June 31 December 2006 2005 2005 No. shares No. shares No. shares Authorised Ordinary Shares of 0.25pence each 60,000,000 60,000,000 60,000,000 ---------------------------- -------- -------- -------- Allotted, called up and fully paid Ordinary Shares of 0.25pence each 35,016,846 32,509,248 32,509,248 In accordance with the terms of the agreement to acquire Affiniti (UK) Limited 470,000 fully paid ordinary shares were issued in the six months to 30 June 2006. In accordance with the terms of the agreement to acquire The Coltman Media Company Limited 829,600 fully paid shares were issued as part of the initial consideration and to acquire Roundhouse Advertising Limited, 951,200 fully paid shares were issued. Note 3 Earnings per share The number of shares used in the calculation of the earnings per share is shown at the foot of the profit and loss account. The EPS has moved from 1.11p to 1.61p whilst the fully diluted EPS has moved from 1.09p to 1.59p. Note 4 Acquisition of The Coltman Media Company Limited (now Adventis Coltman Limited) and Roundhouse Advertising Limited On 22nd May 2006 the Group acquired 100% of the issued share capital of The Coltman Media Company Limited (now Adventis Coltman Limited) and Roundhouse Advertising Limited for cash and shares totalling: Coltman Roundhouse ---------- -------- £'000 £'000 ---------- -------- Property plant and equipment - 17 Stocks - 76 Trade Debtors 1,575 412 Prepayments and accrued income 28 25 Bank and cash balances 996 528 Trade payables (1,113) (59) Provisions for liabilities and charges (832) (378) Goodwill 2,264 3,604 Intangible assets 834 659 ---------- -------- Total Consideration 3,752 4,884 ========== ======== Satisfied by Cash 920 1,063 Issue of Adventis Group ordinary share capital 360 417 Deferred consideration 972 616 Contingent consideration 1,500 2,788 -------------------- --------- -------- 3,752 4,884 ========= ======== Net cash inflow/(outflow) arising on acquisition 76 (535) Cash consideration 920 1,063 Bank balances and cash acquired 996 528 In addition payments of £220,000 were made for the next instalments due for the acquisition of Affiniti (UK) Ltd acquired in January 2005. Note 5 Early adoption of IFRS As noted above the group has now adopted IFRS and this report contains restated numbers to reflect that change. Note 6 Report Copies of this report will be available on request from the company secretary of Adventis Group PLC at 93-95 Wigmore Street, London W1U 1HH. This information is provided by RNS The company news service from the London Stock Exchange

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