Half-yearly Report

Media Corporation PLC Interim results for the six months ended 31 March 2008 The Board of Media Corporation plc, a leading internet advertising network and publisher, is pleased to announce interim results for the period ended 31 March 2008. Financial Highlights Overall group results inline with management forecasts Comparative figures exclude discontinued interactive gaming operations (Note 2) -- Revenues in continuing operations increased by 18% to Â£1.7m (2007 Â£1.4m) -- Gross profit in continuing operations was Â£0.9m (2007: Â£0.9.m) -- Consolidated Group net assets of Â£18.9 million (2007: Â£17.1 million) -- Cash balances at the period end of Â£4.9 million (2007: Â£3.9 million), Other Highlights -- Acquisition of Nash Digital expands Media Corp's Advertising Network -- Acquisition of Sport.co.uk to create leading sports information site Commenting on the interim results, Justin Drummond, CEO, said: 'The first six months of the financial year has been a period of inward investment giving the Group a platform for growth. The Group's advertising network Eyeconomy|Nash has made a number of senior appointments and now has the technical platform and product offering to grow significantly. Trading in this business division has gained momentum during the period with revenues increasing 75% in the second quarter to Â£0.8m. It is anticipated that this division of the Group will continue to grow rapidly during the current financial year' -0- *T Contacts: Media Corporation plc Justin Drummond, Chief Executive Officer ++44 (0) 20 7618 9000 Nilesh Jagatia, Group Finance Director Canaccord Adams Limited Mark Williams, Managing Director ++44 (0) 20 7050 6500 Buchanan Communications Charles Ryland, Director ++44 (0) 20 7466 5000 *T Chairman's Statement Introduction The Board is pleased to present the interim results for the period ended 31 March 2008 which show overall Group results in line with management forecasts. There has been a marked shift in the Group's divisional split, as the Advertising network has outperformed management expectations and the publishing division has continued to be adversely impacted by external factors. Advertising Network The Group's advertising network business Eyeconomy|Nash has undergone a period of significant investment and is now the Group's primary focus. Following a number of senior appointments in this division and an investment in both the advertising platform and server infrastructure there is now an excellent platform for continued growth. There has been a marked shift from Eyeconomy's historical subsite business to a more balanced product offering including both mass reach banner advertising and video advertising. In March 2008 the Advertising Network delivered 32 million Subsites and video Subsites (2007: 15 million) to unique consumers and over 70 Million banner advertisements (2007: Nil). As the Eyeconomy|Nash sales team continues to grow, banner and video ad delivery will continue to increase rapidly. Publishing The Group's publishing division has continued to be challenging during the financial period and the Board is reviewing its strategic options in relation to its publishing division. While the publishing assets still have significant asset value the operating performance has been impacted by regulatory factors and search engine results. The Board believes there is still significant value in its internet real estate and is continuing to develop its entire web portfolio with a view to maximising its revenue potential and value. During the next few months the Group's flagship websites will be continually improved as we seek to improve revenues from these sites and greatly improve the consumer product offering. In addition, the Group will continue to develop its portfolio of top tier internet domain names into revenue generating websites. Trading outlook The Board is very pleased with the performance of its advertising network business, which is continuing to deliver organic growth. Whilst the publishing division remains challenging significant management resource will continue to be focussed on improving its operating performance in the coming months. The Board continues to evaluate a number of acquisition opportunities that will either enhance the Group's revenues or geographical reach. Jason Drummond Chairman -0- *T Consolidated Unaudited Income Statement for the six months ended 31 March 2008 Six months Six months Year ended 31 ended 31 ended 30 March March September 2008 2007 2007 Â£'000 Â£'000 Â£'000 Revenue 1,696 5,836 8,309 Cost of sales (814) (4,518) (5,799) Gross profit 882 1,318 2,510 Administrative expenses (1,213) (1,194) 291 Analysis of Administrative expenses: Distribution costs (243) (136) (281) Administrative expenses (1234) (1,058) (1,941) Exceptional gain on asset disposal 264 - 2513 Total Administrative expenses (1,213) (1,194) 291 Operating profit (331) 124 2,801 Finance income 141 95 213 (Loss) / profit before taxation (190) 219 3,014 Taxation (note 3) - - (184) (Loss) / profit on after taxation (190) 219 2,830 Minority interest 1 (3) (Loss) / profit for the year attributable to equity (190) 220 2,827 shareholders. ====== ====== ====== Loss / earnings per share (note 4) Basic (0.07p) 0.08p 0.97p Diluted (0.06p) 0.08p 0.91p Consolidated unaudited statement of recognised Income and expenses for the six months ended 31 March 2008 Six months Six months Year ended 31 ended 31 ended 30 March March September 2008 2007 2007 Â£'000 Â£'000 Â£'000 Exchange Difference on foreign currency Net investment (511) (273) (471) Net loss directly recognised in equity (511) (273) (471) (Loss) / profit for period (191) 220 2,827 Total recognised income and expenditure for the period attributable to equity holders of the (702) (53) 2,356 parent ====== ====== ====== *T -0- *T Consolidated unaudited balance sheet as at 31 March 2008 As at 31 As at 31 As at 30 March March September 2008 2007 2007 Assets Â£'000 Â£'000 Â£'000 Non-current assets Intangible assets 12,620 12,426 12,467 Plant and equipment 964 533 806 Deferred Taxation 58 227 227 ------------------------------- ---------------------------- ------------------------- Total non-current assets 13,642 13,186 13,500 Current assets Trade and other receivables 2,049 851 955 Cash and cash equivalents 4,873 3,980 6,253 ------------------------------- ---------------------------- ------------------------- Total current assets 6,922 4,831 7,208 Current liabilities Trade and other payables (1,630) (959) (1,199) Taxation (25) - (25) ------------------------------- ---------------------------- ------------------------- Total current liabilities 5,267 3,872 5,984 ------------------------------- ---------------------------- ------------------------- Net assets 18,909 17,058 19,484 =============================== ============================ ========================= Equity Called up share capital 4,764 4,764 4,764 Share premium account 12,917 12,917 12,917 Ordinary Shares in Treasury (387) - - Other reserve 1,422 1,422 1,422 Retained earnings 190 (2,045) 377 ------------------------------- ---------------------------- ------------------------- Equity attributable to equity holders 18,906 17,058 19,480 of the parent Minority interests 3 - 4 ------------------------------- ---------------------------- ------------------------- Total Equity 18,909 17,058 19,484 =============================== ============================ ========================= *T -0- *T Consolidated unaudited cash flow statements for the six months ended 31 March 2008 Six months Six months Year ended 31 ended 31 ended 30 March March September 2008 2007 2007 Â£'000 Â£'000 Â£'000 Cash flows from operating activities (Loss)/ profit from operations before taxation (331) 124 2,801 Deprecation of plant and equipment 162 87 228 Share based payments - - 13 Decrease (increase) in trade and other receivables (1,095) 63 (198) Increase / (decrease) in trade payables 605 (189) (288) Profit on disposal of investment (264) - (2,513) ---------------- ------------------------- ----------------------------- Net cash from operating activities (923) 85 43 ---------------- ------------------------- ----------------------------- Cash flows from investing activities Payments to acquire plant and equipment (322) (225) (647) Payments to acquire intangible assets (135) Proceeds from disposal of intangible asset 2,748 Payments to acquire subsidiary undertakings (154) (1,065) (1,087) net of cash Interest received 141 95 213 ---------------- ------------------------- ----------------------------- Net cash flow from investing activities (470) (1,195) 1,227 ---------------- ------------------------- ----------------------------- Net cash flow from financing activities Purchase of treasury shares (49) - - ---------------- ------------------------- ----------------------------- Net cash flow from financing activities (49) - - ---------------- ------------------------- ----------------------------- Net (decrease) increase in (1,342) (1,110) 1,270 cash and cash equivalents Cash & cash equivalents at beginning of period 6,253 5,253 5,253 Effects on exchange movements (38) (163) (270) ---------------- ------------------------- ----------------------------- Cash & cash equivalents at end of period 4,873 3,980 6,253 ================ ========================= ============================= *T Notes to the accounts 1. Basis of preparation The interim financial information for the six months ended 31 March 2008 has been prepared on an historical cost basis and in accordance with the accounting policies that will apply for the year ended 30 September 2008, which will follow the International Financial Reporting Standards (IFRS) and the interpretations as endorsed by the European Union. The comparative figures included in this report for the six months ended 31 March 2007 and the full year ended 30 September 2007 are restated for IFRS and are unaudited. IFRS 1 permits companies adopting IFRS for the first time to take certain exemptions from the full requirements of IFRS in the transition period. Accordingly business combinations prior to the date of transition to IFRS have not been restated to comply with IFRS 3 'Business Combinations'. Changes resulting from the adoption of IFRS 2 had already been recognised in the accounts for the year ended 30 September 2007. The comparatives for full year ended 30 September 2007 are based on the latest published audited accounts, but are subject to unaudited restatement to IFRS as endorsed for use in the European Union. Accordingly they are not the company's full statutory accounts for the year. A copy of the statutory accounts for that year was prepared in accordance with UK GAAP and has been delivered to the Register of Companies. The auditors' report on those accounts was unqualified, did not include any references to matters to which the auditors drew attention by way of emphasis without qualifying their report; and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. As permitted, the Company has chosen not to adopt IAS34 'Interim Financial Reporting'. The directors undertake an impairment review of goodwill at the end of each annual reporting period. 2. Segmental analyses -0- *T Six months Six months Year ended 31 ended 31 ended 30 March March September 2008 2007 2007 (unaudited) (unaudited) (unaudited) Â£'000 Â£'000 Â£'000 Turnover analysis by business segment: Advertising Network 1192 747 1,752 Internet Publishing 504 692 2,193 ---------------------- ----------------------- ------------------------------- Total continuing operations 1,696 1,439 3,945 Discontinued operations -Interactive Gaming - 4,397 4,364 ---------------------- ----------------------- ------------------------------- Total Turnover 1,696 5,836 8,309 ====================== ======================= =============================== Operating (loss) profit by business segment: Advertising Network (45) 5 127 Internet Publishing (550) 23 166 Interactive Gaming- discontinued - 96 (5) Exceptional gain on asset disposal 264 2,513 ---------------------- ----------------------- ------------------------------- Operating (loss) /profit (331) 124 2,801 ====================== ======================= =============================== *T 3. Taxation There is no provision for UK Corporation tax due to tax losses. Taxation Â£nil (2007: full year Â£184,000) Deferred tax is provided in full in respect of taxation deferred by timing differences between the treatment of certain items for taxation and accounting purposes. Recognition of the deferred tax asset is limited to the extent that the company anticipates making sufficient taxable profits in the future to absorb the reversal of the underlying timing differences. The deferred tax balance has not been discounted. The Group has a deferred tax asset of Â£57,693 (2007: Â£227,000). 4. Earnings per ordinary share -0- *T Six months Six months Year ended 31 ended 31 ended 30 March March September 2008 2007 2007 (unaudited) (unaudited) (audited) Â£'000 Â£'000 Â£'000 (Loss) / profit attributable to shareholders (190) 220 2,827 000's 000's 000's Weighted average number of shares in issue 281,727 291,027 291,027 Dilution effect of warrants 20,900 1,900 20,400 ---------------------- --------------------- ----------------------------- Diluted weighted average number of shares in issue 302,627 292,927 311,427 Basic earnings per share (0.07p) 0.08p 0.97p Diluted earnings per share (0.06p) 0.08p 0.91p *T Basic earnings per share is calculated on the results attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. Diluted earnings per share calculations reflect the dilutive effect of unexercised warrants. The dilution effect of warrants on the weighted average number of shares in issue reflects those warrants with an exercise price lower than the prevailing share price of the Company at the end of the period. 5. Dividends The Directors do not recommend the payment of a dividend. 6. First time adoption of IFRS The Group reported under UK GAAP in its previously published financial statements for the year ended 30th September 2007. There are no reporting differences between UKGAAP and IFRS. 7. Copies of interim results Copies are available at the GroupÂ´s web site at www.mediacorpplc.com. Copies may also be obtained from the GroupÂ´s registered office: Media Corporation plc, Ground Floor, 77 Queen Victoria Street, London EC4V 4AY.

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