Interim Results

Thomson Intermedia PLC 08 September 2003 Thomson Intermedia plc ('Thomson Intermedia' or 'the Company') Interim results for the six months ended 31 July 2003 Thomson Intermedia, a leading provider of Media Information, today announces strong interim results for the six months ended 31 July 2003. Financials â€¢ EBITDA increased from (Â£0.6 million) to Â£0.1 million â€¢ Pre-tax loss of Â£0.03 million â€¢ Turnover up 54% to Â£2.2 million â€¢ New business revenue of Â£1 million â€¢ Gross profit margin increased by 16% to 61% â€¢ Net cash funds of Â£0.7 million â€¢ Deferred income balance maintained at Â£1.4 million â€¢ Average contract value increased by 17% Business Update â€¢ Strong sales performance in core products of Advertising Monitoring and Newsmetrics â€¢ 49 new clients wins - agreements signed with Easyjet, WH Smith, Alliance & Leicester despite challenging market environment â€¢ Existing clients upgrading to new services â€¢ 85% of clients renewed â€¢ Rapid development in propriety technology continues with early development programmes in place to exploit data â€¢ Current order book shows strong pipeline of quality prospects â€¢ Continued interest in our technologies with negotiations on a number of potential license deals Sarah Jane Thomson, Joint Chief Executive, commented: 'I am delighted with the continuing strong performance from our concentration on core business especially in such tough market conditions. We are confident of continued growth, reaching profitability from our core business as well as capitalising on our key assets to further expand our revenue streams.' 8 September 2003 Enquiries: Thomson Intermedia Tel: 0208 466 2906 Sarah Jane Thomson, Joint CEO David Trendle, Finance Director College Hill Tel: 0207 457 2020 Kate Pope Thomson Intermedia plc Chairman's Statement I am pleased to report that, in spite of the tight market environment, Thomson Intermedia has continued in its substantial performance improvement. The period has seen rapid technological development to the entire product range, an exceptional retention rate of our client base and further market penetration. Financial results The company has recorded a strong operating performance in this challenging environment, which has resulted in a pre-tax loss narrowing to Â£29,000 compared with Â£641,000 incurred in the same period last year. Revenue growth of 54% to Â£2.2 million, coupled with an increase of only 9% in direct expenses drove up the gross margin by 16% to 61%. Tight control of our overhead expenditure, limiting the increase to 5%, has led to the company recording a positive EBITDA, for the first time, of Â£68,000 compared to a negative Â£584,000 in the comparable period. The first half of our financial year is the weaker half in respect of cash flow, however the outflow was restricted to Â£338,000. Certain salaries were deferred in the comparable period last year and have been paid in the current period. The adjusted net cash outflow for this period is Â£255,000, which is a 34% reduction on a like-for-like basis. The cash balance at the period end of Â£667,000 is in line with our expectations as we maintain our focus on cash flow into the stronger second half. The improvement in our results has led to a noticeable strengthening of our balance sheet ratios. We constantly monitor the relationship between the balance of deferred income and direct costs. At the period end it covered the direct costs for 10.6 months, on a pro-forma basis. This period is greater than the remaining average life of the current contracts. This is a quick, yet reasonably reliable method of ensuring that our revenue recognition policies are reasonably prudent in respect of the various revenue streams. Business Update A strong sales performance in our core businesses of Advertising Monitoring and Newsmetrics (news evaluation) has been recorded in the first half, with 49 new clients, including Easyjet, WH Smiths, More Th>n and Alliance & Leicester. The current order book highlights a strong pipeline of quality prospects, complemented by a healthy interest by existing clients upgrading to new services. Average contract values continue to rise. Thomson continues to be recognised as the innovator in the market. Rapid development in our propriety technology continues with early development programmes now in progress. This combined with further recognition of the accuracy and integrity of our data is presenting a myriad of opportunities to the company. We are confident that the quality of our media monitoring systems and services will continue to provide the impetus to improve the financial performance. In general the business community has relied on cost cutting to provide increases in profitability, with the resulting budget constraints impacting on our business even though our revenue has shown a material increase. The emphasis for corporations will gradually change with more resources being directed to achieving top line growth. We are ready to take full advantage of this change, which will have a considerable influence on our business going forward Outlook Trading is continuing well despite continued economic uncertainty. Our focus remains on sustaining growth in our core businesses of Advertising Monitoring and Newsmetrics whilst constantly improving our proprietary technology. We recognise the potential of broadening our offering and are in early development phase of a number of projects, which will enable us to expand our services, exploit other markets and capitalise on our key assets, namely our technology and wealth of data. If these negotiations can be completed satisfactorily they present very exciting opportunities for developing additional revenues. John Napier Non-Executive Chairman Thomson Intermedia plc Profit and Loss Account Unaudited Unaudited Audited Six months ended Six months ended Year ended 31 July 2003 31 July 2002 31 January 2003 Notes Â£'000 Â£'000 Â£'000 Turnover 2,211 1,437 3,066 Direct Expenses 1 (864) (792) (1,599) Gross Profit 1,347 645 1,467 Operating Expenses 1 (1,387) (1,302) (2,708) Operating loss (40) (657) (1,241) Interest receivable 11 16 27 Interest payable - - (1) Loss on ordinary activities before taxation (29) (641) (1,215) Taxation 2 52 - - Profit / (Loss) on ordinary activities after taxation 23 (641) (1,215) Dividends 3 - - - Retained Profit / (Loss) transferred to reserves 23 (641) (1,215) Earnings / (Loss) per share, pence 4 - basic 0.1 (2.2) (4.2) - diluted 0.1 (2.2) (4.2) All amounts relate to continuing activities. All recognised gains and losses are included in the profit and loss account. Thomson Intermedia plc Balance Sheet Unaudited Unaudited Audited Six months ended Six months ended Year ended 31 July 2003 31 July 2002 31 January 2003 Â£'000 Â£'000 Â£'000 Fixed assets Intangible fixed assets 49 - 55 Tangible fixed assets 504 475 483 553 475 538 Current assets Debtors 1,175 963 995 Cash at bank and in hand 667 958 1,005 1,842 1,921 2,000 Creditors: Amounts falling due within one year (459) (380) (536) Net Current Assets 1,383 1,541 1,464 Total assets less current liabilities 1,936 2,016 2,002 Accruals and Deferred Income (note 1) (1,925) (1,444) (2,012) Net Assets 11 572 (10) Capital and Reserves Share capital 7,155 7,155 7,155 Share premium 5,064 5,064 5,064 Share scheme reserve - 13 - Merger reserve (5,250) (5,250) (5,250) Profit and loss (6,958) (6,410) (6,979) Equity shareholders' funds 11 572 (10) Thomson Intermedia plc Cash Flow Statement Unaudited Unaudited Audited Six months ended Six months ended Year ended 31 July 2003 31 July 2002 31 January 2003 Â£'000 Â£'000 Â£'000 Cash outflow from operating activities (270) (225) (22) Taxation R&D tax credit received 52 - - Returns on investments and servicing of finance 11 15 24 Capital expenditure (125) (64) (227) Net cash outflow before management of liquid resources and financing (332) (274) (225) Management of liquid resources Money withdrawn from short term deposits 254 157 161 Cash inflow from management of liquid resources 254 157 161 Financing Capital element of finance lease payments (6) (1) (3) Cash flow from financing (6) (1) (3) Decrease in cash (84) (118) (67) Thomson Intermedia plc Notes to the Cash Flow Statement (a) Reconciliation of operating loss to Unaudited Unaudited Audited operating cash flow: Six months ended Six months ended Year ended 31 July 2003 31 July 2002 31 January 2003 Â£'000 Â£'000 Â£'000 Operating loss (40) (657) (1,241) Depreciation & Amortisation 108 75 175 Loss on sale of fixed asset 1 - Increase in debtors (179) (101) (133) (Decrease) / Increase in creditors (74) 154 159 (Decrease) / Increase in accruals and deferred income (86) 304 1,018 Net cash flow from operating activities (270) (225) (22) (b) Analysis of net funds Opening balance Cash flow Closing balance 1 February 2003 31 July 2003 Â£'000 Â£'000 Â£'000 Cash 155 (84) 71 Liquid resources 850 (254) 596 Cash at bank and in hand 1,005 (338) 667 Finance leases (6) 6 - Total 999 (332) 667 Thomson Intermedia plc Notes to Accounts 1. Basis of preparation The financial information set out above is extracted from the consolidated financial statements of Thomson Intermedia plc and its subsidiary Thomson Intermedia Associates Limited (together referred to as the 'Group'). The accounts of the Group for the six months ended 31st July 2003, which are unaudited, were approved by the Board on 2nd September 2003. These accounts have been prepared in accordance with the accounting policies set out in the Report and Accounts of Thomson Intermedia plc for the year ended 31st January 2003. This interim statement does not constitute the company's statutory accounts. The financial information presented for the 6 months ended 31 July 2002 and 2003 has not been audited. Statutory accounts for the year ended 31 January 2003 have been delivered to the Registrar of Companies. The auditors report on those statutory accounts were unqualified and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. The consolidated financial statements incorporate the results of Thomson Intermedia plc and its subsidiary undertaking as at 31st July 2003 using the merger method of accounting. Goodwill is the difference between the cost of an acquired entity and the aggregate of the fair value of that entity's identifiable assets and liabilities. Positive goodwill is capitalised, classified as an asset on the balance sheet and amortised on a straight line basis over its useful economic life. It is reviewed for impairment at the end of the first full financial year following the acquisition and in other periods if events or changes in circumstances indicate that the carrying value may not be recoverable. Acquisitions that entail significant market positions and which are of long-term strategic significance to the Group's operations are classified as strategic acquisitions, with goodwill amortised over 20 years. For acquisitions of complementary operations in markets where the Group is already established, the amortisation period for goodwill is between 5 and 10 years. The recognition of revenue is assessed by the Directors at the commencement of each financial period to ensure that the balance of income deferred to future periods is sufficient to meet direct costs attributable to the remaining life of the contracts. The Directors believe the assessment is required for the accounts to continue to show a 'true and fair' view. 2. Taxation During the period the company received a R&D Tax credit of Â£52,000 relating to the year ended 31 January 2001. The company is currently pursuing R&D Tax credits for the years ending 31 January 2002 and 2003. Details of these claims have not been finalised and therefore the company has prudently not accounted for these amounts in the interim accounts. 3. Dividend No interim dividend is being proposed. 4. Earnings per share Basic earnings per share is calculated, in accordance with FRS 14 (Earnings per share), on profit on ordinary activities after tax of Â£23,000 (2002: loss Â£641,000) apportioned over the weighted average number of ordinary shares that were in issue for the period of 28,619,047 (2002: 28,619,047). The calculation of diluted earnings per share is based on 29,489,047 ordinary shares (2002: 28,619,047). 5. Interim report Copies of this interim report for the six months ended 31st July 2003 will be sent to shareholders. Further copies will be available from the Company Secretary at the registered office. Thomson Intermedia plc This information is provided by RNS The company news service from the London Stock Exchange

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