Half Yearly Report

RNS Number : 6272Y
dotDigital Group plc
26 February 2013
 

Analyst meeting today: 9.30am start - At the offices of Charles Stanley, 131 Finsbury Pavement, EC2

 

                                                                                                                                                                                          26 FEBRUARY 2013

 

dotDigital Group Plc

("dotDigital or the Company")

INTERIM RESULTS ANNOUNCEMENT

For the six months ended 31 December 2012

dotDigital Group Plc (AIM:DOTD), the leading provider of services based upon intuitive 'Email Marketing - Software as a Service' ("SaaS Products") to digital marketing professionals, announces its interim results for the six months ended 31 December 2012.

 

SaaS Products is predominantly centered on the core dotMailer platform.

 

Six Month Key Highlights

 

· Group revenues up 24% (from £5.5m to £6.8m)

 

· Group operating profit before exceptionals increased by 40% (from £1.3m to £1.8m)

 

· SaaS Products operating profit before exceptionals increased by 66% (from £1.3m to £2.2m)

 

· Revenues in SaaS Products up 39% (from £4.1m to £5.7m)

 

· Net cash generated from operating activities of £1.4m

 

• Strong cash position of £4.6m as at 31 December 2012

 

· dotMailer

o 551 new clients signed in the period including Investec, BBC Worldwide, ITV, Odeon Cinemas,and Balfour Beatty

o Lower than the 831 in the equivalent period but importantly reflects the Group's  increased focus on higher value clients

under longer term contracts - 12-36 months

 

· dotSurvey

o Steady progress made with the pilot testing of the newly launched online-survey product

 

· Services Division

o     Strategic review continues with discussions continuing following a number of indicative offers received for the division

 

· International Initiatives

o Sales office in New York opened in November and the level of orders and sales pipeline is showing an encouraging trend

o New sales office recently opened  in Melbourne, Australia

o dotMailer interface now translated into eight languages with the plan to trial sell into selected European countries

 

 

On outlook, Peter Simmonds, Chief Executive said:

 

"The core email marketing business continues to perform very strongly and the strategy to increase sales activity in the corporate sector is showing good results with a strong pitch to win ratio, which is adding to recurring revenues and providing a cohort of higher value clients whose expenditure should continue to increase over time. Our ability to offer multinational businesses, a centrally managed parent account with locally accessible child accounts in local language and local currency billing is attracting interest from some very large businesses.

 

Overall we continue to see the results of our strategy to drive recurring revenues and the level of monthly recurring revenue in the six months now represents 76.5% of total billing up from 73% at the full year ended June 2012.Our efforts to secure longer term agreements has also proved successful with 66% of new contracts in the last 6 months having terms of between 12-36 months.

 

We look forward to providing further updates on progress within the Group during 2013, including progress with the strategic review of the services division and culminating in a full annual update on trading in our full year results in October 2013.

 

 

 For further enquiries please contact:

 

dotDigital Group Plc

Peter Simmonds, Chief Executive

Tel: 020 7654 8686

NOMAD and Co- Broker

Zeus Capital

Ross Andrews/Nick Cowles

Tel: 0161 831 1512

Co- Broker

Charles Stanley Securities

Dugald J.Carlean/Karri Vuori

Tel: 020 7739 8200

Financial PR and Investor Relations

Lisa Baderoon

lisa.baderoon@dotdigitalgroup.co.uk

Tel: 07721 413 496

 

                

Chief Executive Report

 

Overview

 

As announced in the trading update on 11 January 2013, the Group continued to deliver revenue growth in line with plan and profits, before exceptional items, ahead of expectation.

 

Revenues for the period to 31 December 2012 increased by 24% compared to the same period in 2011 and profit before tax and exceptional items grew by 40%.

 

The table below shows that performance in the core SaaS Products division under the dotMailer brand has performed strongly with revenue growth of 39% and profit before tax growing from £1.3 to £2.2m, an increase of 66%.

 

This is in contrast to the Services Division (web design and search) which has seen revenues charged to third parties decline by 21% and profits fall from £0.18m to a loss of £0.14m.

 

The Board has been reviewing the strategic options for this division and has received a number of indicative offers from parties interested in acquiring this division in its entirety and also for component parts. Although discussions are still on-going at the date of this announcement the Board feels that it is prudent to recognise the potential impact this change will have on the level of goodwill being carried from the division's Netcallidus acquisition in 2009.  These interim accounts therefore contain an exceptional goodwill impairment charge of £1.5m which is explained in more detail   below.

 

Trading Performance by Division



















Products


Services


Central Costs


Consolidated



Dec 

Dec 



Dec 

Dec 



Dec 

Dec 



Dec 

Dec 




12

11

% inc*


12

11

% inc*


12

11

% inc*


12

11

% inc*



 £'m

£'m 



£'m 

£'m 



 £'m

£'m 



£'m 

£'m 


Sales


5.7

4.1

39%


1.1

1.4

-21%






6.8

5.5

24%


















Cost of Sales


0.4

0.3

34%


0.6

0.5

29%






1.0

0.7

31%


















Gross Profit


5.3

3.8

40%


0.5

0.9

-46%






5.8

4.8

23%


















Administrative Expenses


3.1

2.5

24%


0.6

0.7

-15%


0.3

0.3

-24%


4.0

3.5

16%


















Operating Profit before tax before exceptionals


2.2

1.3

66%


-0.1

0.2

-174%


-0.3

-0.3

-24%


1.8

1.3

40%

 

* Actual % increase is based on unrounded numbers.

 

Email Marketing - Software as a Service ("SaaS Products")

 

Overall performance was driven by very strong revenue growth of 39% across the core high margin SaaS Products based email marketing platform, known as dotMailer.

 

This strong growth was helped by a combination of successful new client wins (particularly in the corporate sector) growth in recurring spending from existing clients and improved client retention. The total number of clients signed via our sales team in the period was 551. This is lower than the 831 in the equivalent period last year but importantly reflects the realignment of the sales team on higher value clients under longer term contracts of between 12-36 months.

 

In addition to our sales team based client wins, our new credit card self-service product, launched in September, has attracted over 500 "freemium" users who are predominantly smaller SME sized businesses with budgets below £100 per month. Of these approximately 100 have so far been converted to paying status.

 

Focus on the corporate sector has resulted in the following notable client wins in the past six months include BBC Worldwide, e-Consultancy, Harveys, England Hockey Board, Investec, Osprey London, BP International, ITV, Odeon Cinemas, Ryman, Delice de France, Surrey County Council, City & Guilds, Cartridge World, Balfour Beatty and Help for Heroes.

 

As previously announced over the last six months within dotMailer the focus has been on increasing the proportion of recurring monthly revenues that are under long term contract 

 

In the period July to December 2012 66% of new contracts signed have been on long term agreements ranging from 12-36 months. The remainder have been signed on pay as you go contracts. The Board continues to recognise the merits behind long term agreements and will continue the approach of winning new business on this basis.

 

Overall the ratio of monthly billing has increased from 51% contract: 49% pay as you go in December 2011 to 65% contract: 35% pay as you go in December 2012 and the average monthly spend by active clients has risen by a further 6% compared to the corresponding period 12 months ago (excluding those on prepay self service).

 

Our sales office in New York opened at the end of November with the first corporate client win achieved just before the Christmas holiday and since then the level of orders and sales pipeline has shown an encouraging trend. In late January we opened a sales office in Melbourne Australia and have started building an order book.

 

Now that the user interface of dotMailer has been translated into eight languages we plan to trial selling into selected European countries using native speakers based from our London offices during 2013 and working with international channel partners.

 

The overall strong revenue growth combined with management of overhead costs growth at 24% gave rise to a 66% increase in profit before tax in this division.

 

New SaaS Products

 

Steady progress has been made with the pilot testing of our newly launched online-survey product 'dotSurvey',  and we have continued to trial various marketing methods for attracting new clients and to establish reliable costs of winning and retaining these clients  against the estimated lifetime values. We will review the progress of this pilot during this financial year, before committing to significantly increased marketing spend in the next financial year.

 

In October we test launched a credit card self-service version of dotMailer to cater cost effectively for the needs of the smaller SME clients with smaller customer lists and lower monthly budgets. Early results from this activity are promising and we are continuing to refine the website experience for new trialists and paying customers.

 

We expect to devote more development and marketing resources to building these two segments of our business during 2013 as results are reviewed  and resources become available from other projects.

  

Services Division

 

Notwithstanding the strenuous efforts of the divisional management team, performance in dotAgency, the services side of the business, which includes our search marketing business, was disappointing.  Although the six months saw a growth in revenues from sale of ecommerce sites to higher value, medium sized businesses, we have yet to see this translate into profit due to higher costs of project delivery. Despite our efforts to reposition the search marketing business to mitigate the impact of the changes made by Google™ to their search engine algorithms in 2012, it has become clear in recent months that the original strategy of cross-selling SEO to the SME clients of dotMailer is now less attractive and less profitable because of reduced operating margins and is increasingly seen as a distraction to the core strategy of growing email marketing revenues. Revenues from SEO declined faster than expected at 21% in the period and now represent around 6% of total group revenue.  

 

Faced with a declining performance and as set out in our Trading Update on 11 January 2013, the Board has been reviewing all  strategic options for this division. A number of changes have been implemented to both the strategy and the cost base in order to turn around the decline in profitability of this division and we expect results for the second half to reflect these changes.

 

Following our trading update on 11  January 2013 the Board commenced a formal process to gauge the level of interest for the division and has to date received a number of enquiries from parties interested in discussing the acquisition of this division in its entirety and also for acquiring component parts. Following the production of an outline Information Memorandum discussions are on-going with several parties who have prepared indicative offers for this division of the business.

 

Revenues shrinking by 21% have resulted in this division reporting a trading loss of £0.1m in the period.

 

Financial Summary

 

Consolidated EBITDA

 

Overall group EBITDA rose from £1.5m to £2.2m, an increase of 45%, reflecting the strong performance in the core products division.

 

Consolidated Profits - impact of IFRS3 impairment of goodwill

 

Consolidated operating profit before exceptional items grew by 43% from £1.2m to £1.8m.

 

Following the decision to carry out the strategic review of the services and SEO activity with the expectation this division will be sold, the Board has reviewed the IFRS3 implications and made two adjustments to the goodwill originally attributed to the purchase of Netcallidus.

 

The first adjustment is a further write down of the contingent consideration originally attributed to the purchase price at the date of acquisition on 2009. This amounts to an impairment of £1m.

 

The second adjustment is impairment from the actual purchase price of £1.3m paid for the business to adjust to the current expected value. This has resulted in a goodwill impairment in the current period of £0.5m.

 

The net combined effect of these two accounting adjustments is to reduce the consolidated profit before tax to £0.2m and the profit after tax to £0.1m.

 

Cash Generation

 

The business continues to be cash generative with £1.6m of cash generated from operations and at the end of the period, cash at bank stood at £4.6m after capital expenditure of £0.1m to fit out the new head office, hardware upgrades of £0.1m and research and product development of £0.6m.

 

Dividend Policy

 

Given the current positive cash position and the strong operational cash generation of the business the Board have committed to review the Group's dividend policy before the publication of the annual results in October 2013. The future projected operational cash flows will be considered along with the requirements for cash to maintain the high growth objectives and ensure sufficient liquidity to finance potential acquisition opportunities.

 

Outlook

 

The core email marketing business continues to perform very strongly and the strategy to increase sales activity in the corporate sector is showing good results with a strong pitch to win ratio, which is adding to recurring revenues and providing a cohort of higher value clients whose expenditure should continue to increase over time. Our ability to offer multinational businesses, a centrally managed parent account with locally accessible child accounts in local language and local currency billing is attracting interest from some very large businesses.

 

Whilst the initiatives to expand international revenues are at an early stage we have confidence from prospect feedback that the dotMailer product is well received in markets outside the UK and given management bandwidth and good hiring policies we should see overseas revenues increase steadily over the next 18 months.

 

Our new online self service offerings (dotSurvey and dotMailer Self Service) are starting to generate revenues and as a Board we will be reviewing at the end of this financial year the level of marketing and technical resource to dedicate to building this revenue stream.

 

Overall we continue to see the results of our strategy to drive recurring revenues and the level of monthly recurring revenue in the six months now represents 76.5% of total billing up from 73% at the full year ended June 2012. Our efforts to secure longer term agreements has also proved successful with 66% of new contracts in the last 6 months having terms of between 12-36 months.

 

We look forward to providing further updates on progress within the Group during 2013, including progress with the strategic review of the services division and culminating in a full annual update on trading in our full year results in October 2013.

 

 

dotDigital Group Plc

 

Consolidated Income Statement

For the six months ended 31 December 2012







(restated)


(restated)





6 months


6 months


12 months





to 31 Dec 2012


to 31 Dec 2011


to 30 June 2012





Unaudited


Unaudited


Audited




note

£'000s


£'000s


£'000s










Revenue




6,799


5,486


11,987

Cost of sales




(972)


(742)


(1,269)










Gross profit




5,827


4,744


10,718










Administrative expenses including exceptional items




(5,553)


(4,404)


(9,032)










Operating profit before exceptional items




1,813


1,271


2,873










Exceptional items:









Impairment of goodwill due to adjustment to









contingent consideration




(1,007)


(931)


(1,187)

Impairment of goodwill in respect of acquisition




(532)


                         -  


                           -  



















Operating profit




274


340


1,686










Finance income including exceptional items



4

1


1,083


1,088

Finance costs




(64)


(22)


(1)










Profit before tax before exceptional items




1,750


1,253


2,880










Exceptional item: Financial income adjustment for









contingent consideration



4

-


1,079


1,079










Profit before income tax




211


1,401


2,773










Income tax expense




(87)


(193)


(306)










Profit for the period from continuing









operations attributable to shareholders




124


1,208


2,467










Earnings per share:









Basic (pence)



5

0.04


0.44


0.90

Diluted (pence)



5

0.04


0.43


0.88

Adjusted excluding exceptional items (pence)



5

0.60


0.39


0.94

Adjusted diluted excluding exceptional items (pence)

5

0.59


0.38


0.92

 

 

dotDigital Group Plc

 

Consolidated Statement of Comprehensive Income

For the six months ended 31 December 2012


























6 months


6 months


12 months






to 31 Dec 2012


to 31 Dec 2011


to 30 June 2012






Unaudited


Unaudited


Audited






£'000s


£'000s


£'000s












Profit for the period




124


1,208


2,467












Other comprehensive income




                         -  


                         -  


                           -  












Total comprehensive income










attributable to:










Owners of the parent




124


1,208


2,467

 

 

dotDigital Group Plc

 

Consolidated statement of Financial Position

For the six months ended 31 December 2012


























As at


As at


As at






 31 Dec 2011


 31 Dec 2011


 30 June 2012






Unaudited


Unaudited


Audited






£'000s


£'000s


£'000s


Assets




















Non current assets










Goodwill




1,395


3,190


2,934


Intangible assets




2,104


1,338


1,753


Property, plant and equipment




519


295


404
















4,018


4,823


5,091












Current assets










Trade and other receivables




2,634


2,132


2,199


Cash and cash equivalents




4,617


2,915


4,020
















7,251


5,047


6,219












Total assets




11,269


9,870


11,310






















Equity attributable to  the










owners of the parent




















Called up share capital




1,379


1,375


1,377


Share premium




4,781


4,737


4,754


Reverse acquisition reserve




(4,695)


(4,695)


(4,695)


Other reserves




98


85


127


Retained earnings




8,326


6,942


8,202












Total equity




9,889


8,444


9,765












Liabilities




















Non current liabilities










Deferred tax




25


                         -  


25
















25


                         -  


25












Current liabilities










Trade and other payables




1,240


1,137


1,334


Tax payable




115


289


186
















1,355


1,426


1,520












Total liabilities




1,380


1,426


1,545












Total equity and liabilities




11,269


9,870


11,310

 

dotDigital Plc

 

Consolidated Statement of Changes in Equity

For the six months ended 31 December 2012





























Share


Share


Retained


Other


Reverse


Total



Capital


premium


earnings


reserves


acquisition













reserve





£'000s


£'000s


£'000s


£'000s


£'000s


£'000s















As at 1 July 2011

1,375


4,737


5,734


70


(4,695)


7,221















Profit after tax for the period

-


-


1,208


-


-


1,208


Share based payment

-


-


-


15


-


15















As at 31 December 2011

1,375


4,737


6,942


85


(4,695)


8,444















As at 1 July 2011

1,375


4,737


5,735


70


(4,695)


7,222















Profit after tax for the year

-


-


2,467


-


-


2,467


Issue of share capital

2


18


-


-


-


20


Share based payment

-


-


-


57


-


57















As at 30 June 2012

1,377


4,755


8,202


127


(4,695)


9,766















As at 1 July 2012

1,377


4,755


8,202


127


(4,695)


9,766















Profit after tax for the period

-


-


124


-


-


124


Share issue

           2


              26


-


-


-


28


Share based payment

-


-


-


(29)


-


(29)















As at 31 December 2012

1,379


4,781


8,326


98


(4,695)


9,889

 

- Share capital is the amount subscribed for shares at nominal value.

- Share premium represents the excess of the amount subscribed for share capital over the nominal value net of the

share issue expenses.

- Retainedearnings represents the cumulative earningsof the Group attributable to equity shareholders.

- The reverse acquisition reserve relates to the adjustment required to account the reverse acquisition in accordance

with International FinancialReporting Standards.

- Other reserves relate to the charge for the share based payments in accordance with International Financial

Reporting Standard 2.

 

dotDigital Plc

 

Consolidated Statement of Cash Flows

For the six months ended 31 December 2012














6 months


6 months


12 months





to 31 Dec 2012


to 31 Dec 2011


to 30 June 2012





Unaudited


Unaudited


Audited




note

£'000s


£'000s


£'000s










Cash flow from operating activates



6

1,625


1,174


3,275

Interest paid




(64)


(22)


(1)

Tax paid




(158)


-


(193)










Net cash generated from operating activities




1,403


1,152


3,081










Cash flow from investing activates









Contingent consideration on acquisition of subsidiary




-


-


(164)

Purchase of intangible fixed assets




(615)


(520)


(1,173)

Purchase of tangible fixed assets




(220)


(120)


(315)

Sale of tangible fixed assets




-


-


1

Interest received




1


4


8










Net cash used in investing activities




(834)


(636)


(1,643)










Cash flows from financing activities









Loan repayments in period




-


(170)


(7)

Share issues




28


-


20










Net cash generated from financing activities




28


(170)


13










Increase in cash and cash equivalents




597


346


1,451










Cash and cash equivalents at beginning of period




4,020


2,569


2,569










Cash and cash equivalents at end of period.




4,617


2,915


4,020

 

 

dotDigital Plc

 

Notes to interim financial statements

For the six months ended 31 December 2012

 

1. GENERAL INFORMANTION

dotDigital Group Plc is a company incorporated in England and Wales and quoted on the AIM market.

2. BASIS OF INFORMATION

These consolidated interim financialhave been prepared in accordance with International FinancialReporting Standards ("IFRS") as adopted by the European Union and on a historical basis, using the accounting policies which areconsistent with those set out in the Group's annual report and accounts for the year ended 30 June 2012. The interim financial information for the six months to 31 December 2012, whichcomplies with IAS 34 'Interim Financial Reporting' has been approved by the Board of Directors on 26 February 2013.

The unaudited interim financialinformation for the period ended 31 December 2012 does not constitute statutory accounts within the meaning of Section 435 of the Companies Act 2006. Thecomparative figures for the

year ended 30 June 2012 are extractedfrom the statutory financialstatements which have been filed with the Registrar of Companiesand contain an unqualified audit report and did not contain statements under Section 498 to 502 of the CompaniesAct 2006.

3. SIGNIFICANT ACCOUNTING POLICIES

The accounting policies applied are consistentwith those of the annual financial statements for the year ended 30 June 2012, as described in those financial statements.

 

There are no IFRSs or IFRIC interpretations that are effective for the first time in this financial period that would be expected to have a material impact on the group.

 

There are no other IFRSs or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the group.

 

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total earnings.

 

4. FINANCE INCOME

Financeincome for the comparative periods includesthe effect of the eliminationof the financial instrument created in relation to the acquisition of dotSearch Limited (previously known as "NetcallidusLimited") in 2010 as required by IFRS 3. The Directors of the Group have elected apply this to the interimfigures as a final settlement in regards to

the consideration due to the previous ownersof Netcallidus has been agreed and paid. The amount of the adjustment is £1,079,000.

5. EARNINGS PER SHARE

 






6 months


6 months


12 months






to 31 Dec 2012


to 31 Dec 2011


to 30 June 2012






Unaudited


Unaudited


Audited

Earnings per Ordinary share










Basic (pence)





0.04


0.44


0.90

Diluted (pence)





0.04


0.43


0.88

Adjusted excluding exceptional items (pence)





0.60


0.39


0.94

Adjusted diluted excluding exceptional items (pence)




0.59


0.38


0.92











Adjusted earnings represents earnings normalised for unique charges and income in the period:
















6 months


6 months


12 months






to 31 Dec 2012


to 31 Dec 2011


to 30 June 2012






Unaudited


Unaudited


Audited






£'000s


£'000s


£'000s











Profit attributable to shareholders





124


1,208


2,467











Impairment of goodwill





1,539


931


1,187

Revisions to financial instruments





-


(1,079)


(1,079)











Profit figure utilised for adjusted EPS





1,663


1,060


2,575





















Weighted average number of shares in issue as follows:





















6 months


6 months


12 months






to 31 Dec 2012


to 31 Dec 2011


to 30 June 2012






Unaudited


Unaudited


Audited











Weighted average number










Basic





275,932,065


274,972,065


275,019,565

Diluted





282,567,459


279,154,323


281,111,611

Adjusted excluding exceptional items (pence)





275,932,065


274,972,065


275,019,565

Adjusted diluted excluding exceptional items (pence)




282,567,459


279,154,323


281,111,611

 

6. RECONCILATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITES

 





6 months


6 months


12 months





to 31 Dec 2012


to 31 Dec 2011


to 30 June 2012





Unaudited


Unaudited


Audited





£'000s


£'000s


£'000s










Profit before income tax




211


1,401


2,773

Adjustments for:









Exceptional items: impairment of goodwill




1,539


931


1,187

Depreciation and amortisation




371


233


557

Loss on disposal of fixed assets




-


-


1

Share based payments




(29)


15


57

Finance costs




64


22


1

Finance income




(1)


(1,083)


(1,088)










Increase in trade and other receivables




(436)


(474)


(540)

(Decrease)/Increase in trade and other payables




(94)


129


327










Net cash from operating activates




1,625


1,174


3,275

 

 

7. CALLED UP SHARE CAPITAL

The issued share capital as at 31 December 2012 was 275,932,065, OrdinaryShares of 0.5p per share (30 June 2012: 275,362,065 Ordinary Shares of 0.5p per share as per the auditedaccounts).

 

8. SHARE BASED PAYMENTS

The measurement requirements of IFRS2 have been implemented in respect of the share options that were granted after 7 November 2002. The credit recognised for share based payments made duringthe period is £29,819,

(31 Dec 2011: £14,634, 30 June 2012: £57,183).

 

In addition to the options issued up to 30 June 2012, as outlinedin the statutory financialstatements, The Board of Directors also granted 1,500,000 options to employees of the Group exercisable on or after 1 December 2014

until 30 November 2017. Vesting conditions of the options dictate that the employee must remain part of the Group upto the date they choose to exercise their options to qualify.

 

9. SEGMENTAL REPORTING

IFRS 8 requires that operating segments be identifiedon the basis of internalreporting and decision making. The operating segments below representthose assessed by the board as relevant to the groups internal management structure, organisation and basis of providing services and products to clients.

Period ended 31 December 2012



Products


Services


Central costs


TOTAL




£'000s


£'000s


£'000s


£'000s











Sales



5,714


1,085


-


6,799

Cost of sales



(383)


(588)


-


(972)











Gross profit



5,331


497


-


5,827

Overheads



(3,054)


(633)


(327)


(4,014)

Finance income



1


-


-


1

Finance costs



(64)


-


-


(64)











Profit before tax and exceptional items



2,214


(136)


(327)


1,750











Period ended 31 December 2011



Products


Services


Central costs


TOTAL




£'000s


£'000s


£'000s


£'000s











Sales



4,103


1,383


-


5,486

Cost of sales



(287)


(455)


-


(742)











Gross profit



3,816


928


-


4,744

Overheads



(2,464)


(745)


(264)


(3,473)

Finance income



4


-


-


4

Finance costs



(22)


-


-


(22)











Profit before tax and exceptional items



1,334


183


(264)


1,253











Year ended 30 June 2012



Products


Services


Central costs


TOTAL




£'000s


£'000s


£'000s


£'000s











Sales



9,542


2,445


-


11,987

Cost of sales



(439)


(830)


-


(1,269)











Gross profit



9,103


1,615


-


10,718

Overheads



(5,826)


(1,314)


(705)


(7,845)

Finance income



8


-


-


8

Finance costs



(1)


-


-


(1)











Profit before tax and exceptional items



3,284


301


(705)


2,880

 

10. RELATED PARTY NOTE

Transactions between the company and its subsidiaries, who are related parties,have been eliminatedon consolidation and are not disclosed in this note.

Key management remuneration:

Key management includes,Directors, Associate Directors, Members of the Executive Committee and the Company Secretary. The remuneration paid for key management employee services are as follows:






6 months


6 months


12 months






to 31 Dec 2012


to 31 Dec 2011


to 30 June 2012






Unaudited


Unaudited


Audited






£'000s


£'000s


£'000s











Remuneration and other short term benefits



301


303


911

Share based payments





(1)


5


10
















300


308


921











Directors & Non-Executive Directors




















Aggregate emoluments





272


263


602

Company contributions to pension scheme




13


18


48
















285


281


650











The following transactions were carried out with related parties















Purchase of services










Entities controlled by non - executive directors of the Group:





F Beechinor Collins - Consultancy for international







expansion and channel partner development


7


30


54

N Nelson: Hansard Communications Ltd - Financial PR


-


15


-
















7


45


54

 






6 months


6 months


12 months






to 31 Dec 2012


to 31 Dec 2011


to 30 June 2012






Unaudited


Unaudited


Audited






£'000s


£'000s


£'000s











Payables to related parties from sales/(purchases) of services





F Beechinor Collins - Consultancy for international







expansion and channel partner development


-


(10)


-

Hansard Communications Ltd - Financial PR




-


-


3
















-


(10)


3

 

11. PRIOR PERIOD ADJUSTMENT

On 1 July 2011 the Board of Directors re-categorised the nature of some expenditure items which related to direct operational costs incurred by a group company from administrative to costof sales. The impact of this on the comparative figures on the income statement are as follows:

 










(restated)






6 months




6 months






to 31 Dec 2011




to 31 Dec 2011






Unaudited


Effect of change


Unaudited






£'000s


£'000s


£'000s











Revenue





5,486


-


5,486

Cost of sales





-


(742)


(742)











Gross profit





5,486


(742)


4,744











Administrative expenses





(5,146)


742


(4,404)











Operating profit





340


-


340

 










(restated)






12 months




12 months






to 30 June




to 30 June






2012




2012






Audited


Effect of change


Audited






£'000s


£'000s


£'000s











Revenue





11,987


-


11,987

Cost of sales





(875)


(394)


(1,269)











Gross profit





11,112


(394)


10,718











Administrative expenses





(9,426)


394


(9,032)











Operating profit





1,686


-


1,686

 

12. SUBSEQUENT EVENTS TO 31 DECEMBER 2012

As at the date of these statements and the date they were approved by the Board of Directors the board has been reviewing the strategic options for this division and has received a number of enquiries from parties interested in acquiring this division in its entirety and also for component parts. Although discussions are still on-going at the date of this announcement the board feel that it is prudent to recognise the potential impact this change will have on the level of goodwill being carried from the Netcallidus acquisition in 2009.  These interim accounts therefore contain an exceptional goodwill impairment charge of £1.5m.

 

13. COPIES OF INTERIM FINANCIAL STATEMENTS

 

Copies of this interim statement are available from the Company at its registered office at, Fingsgate,5-7 Cranwood Street, London EC1V 9EE. The interim financialinformation document will also be availableon the Company's website www.dotdigitalgroup.com.

 

 

 

 

 

 

 

 

 

 

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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