Interim Results

Immedia Broadcasting plc 23 August 2006 23 August 2006 IMMEDIA BROADCASTING PLC INTERIM RESULTS Immedia Broadcasting PLC, the UK's leading provider of live, tailored in-store media, today announces its interim results for the six months to 30 June 2006. Highlights • Underlying* revenue up 19.4% to £1.43m (2005: £1.20m); total revenue up 48.7% to £2.29m (2005: £1.54m) • Underlying* gross profit up 35.4% to £0.80m (2005: £0.59m); total gross profit up 77.9% to £1.51m (2005: £0.85m) • Improvement in underlying* loss before interest and taxation -£0.48m (2005: £0.55m). Total profit before tax for the period of £0.13m (2005 loss: -£0.27m). • Excellent cost and cash management • The business continues to be cash generative following the acquisition of The Cube Group of Companies ('Cube') with net debt of £0.35m at period end • 'Impulse Live' delivering in line with expectations following recent strategic change • New tailored station for Irish convenience stores continuing to roll out as planned through our contract with Alphyra • 'HSBC Live' successfully rolled out to 450 branches • 'IKEA Live' continuing to be rolled out as further IKEA stores open throughout the UK • Cube acquisition integrating successfully * The underlying figures refer to revenue and profit numbers excluding the recent acquisition of Cube and non-recurring revenues linked to the terminated contract with Vitus announced in November 2005. Commenting on the results Bruno Brookes, Chief Executive, said: 'Immedia has made solid progress for the first six months of the year. We have achieved good results with all our current radio stations and are pleased with the integration of Cube. We have a very strong management team with blue chip clients and are unrivalled both in terms of our live radio and visual offering. We are seeing encouraging organic growth from existing clients and continue to negotiate longer term contracts to increase our earnings visibility. The business has a promising pipeline of new opportunities and we are confident of meeting market expectations for the full year.' Immedia Broadcasting Plc Bruno Brookes, Chief Executive 01635 572 800 Charles Barker-Benfield, Finance Director Hudson Sandler Sandrine Gallien / Amy Faulconbridge 020 7796 4133 Chairman's Statement Overview The results from the last six months have been encouraging. In a challenging advertising market, particularly for radio, Immedia has continued to make progress. Our outsourced sales team is now fully operational and performing well. In addition, increased revenues from existing clients have driven organic growth and costs have been managed efficiently, pushing Immedia further towards profitability for the full year. The recent acquisition of Cube announced in April 2006 is creating an additional platform for us and we are looking forward to building on our broadened offer. Financial Review Underlying revenue for the first half was £1.43m, an increase of 19.4% compared to the same period last year (2005: £1.20m) generating an underlying gross profit of £0.80m (2005: £0.59m) and an improvement in underlying loss before interest and taxation of £0.07m to - £0.48m (2005: -£0.55m). Profit before tax for the period is £0.13m compared to a loss of -£0.27m in 2005. The business is cash generative and has a reported net debt of £0.35m as at 30 June 2006, including £0.70m of deferred consideration relating to the acquisition of Cube. Outlook Immedia's unique media solutions continue to appeal to a broad range of businesses. The success for the half-year and the strengthened management team leave us in a strong position to continue Immedia's expansion. We are continuing to trial new subscription radio channels as well as RadioVision, Immedia's latest product where live radio triggers tailored video content, with high street brands, and remain confident of a positive outcome for the full year. Geoff Howard-Spink Chairman 23 August 2006 Consolidated Profit and Loss Account Note Unaudited Unaudited Half year Half Year Year Ended 30 June 06 30 June 05 31 Dec 05 £ £ £ Turnover 8 2,294,464 1,543,388 3,007,688 Cost of sales (780,034) (692,120) (1,308,281) Gross profit 1,514,430 851,268 1,699,407 Administrative expenses (1,389,292) (1,138,377) (2,771,144) Operating profit/(loss) 125,138 (287,109) (1,071,737) Operating profit before depreciation, amortisation, 658,409 51,397 73,391 impairment charge and interest Depreciation and amortisation (533,271) (338,506) (699,279) Impairment charge - - (445,849) Net interest receivable 3,457 13,838 20,321 Interest receivable and similar income 14,951 23,428 37,817 Interest payable and similar charges (11,494) (9,590) (17,496) Profit/(loss) on ordinary activities before 128,595 (273,271) (1,051,416) taxation Tax on loss on ordinary activities 6 - - - Profit/(loss) for the period 128,595 (273,271) (1,051,416) Earnings/(loss) per share - basic 7 0.99p (2.45)p (9.43)p Earnings/(loss) per share - diluted 7 0.98p (2.45)p (9.43)p The results for the half year to 30th June 2006 include the results for The Cube Group of Companies from 8 May 2006 until the end of the period, amounting to £246,000 of turnover and £5,000 of operating loss. Consolidated Balance Sheet Note Unaudited Unaudited as at as at As at 30 June 06 30 June 05 31 Dec 05 £ £ £ Fixed assets Intangible assets 9 2,234,752 54,952 36,637 Tangible assets 11 867,865 1,687,574 1,155,712 3,102,617 1,742,526 1,192,349 Current assets Debtors 12 1,461,093 826,247 866,422 Cash at bank and in hand 481,487 1,008,261 838,452 1,942,580 1,834,508 1,704,874 Creditors: amounts falling due within one year 13 (2,396,397) (921,390) (1,217,614) Net current (liabilities)/assets (453,817) 913,118 487,260 Total assets less current liabilities 2,648,800 2,655,644 1,679,609 Creditors: amount falling due after more than 14 (232,071) (200,000) - one year Provisions for liabilities and charges - (10,000) - Net assets 2,416,729 2,445,644 1,679,609 Capital and reserves Called up share capital 15 1,334,831 1,170,791 1,173,897 Share premium account 15 3,532,696 3,372,960 3,390,411 Shares to be issued 15 305,306 - - Merger reserve 15 2,245,333 2,245,333 2,245,333 Profit and loss account 15 (5,001,437) (4,343,440) (5,130,032) Equity shareholders' funds 2,416,729 2,445,644 1,679,609 Consolidated Cash Flow Statement Note Unaudited Unaudited Half Year to Half Year to Year Ended 30 June 06 30 June 05 31 Dec 05 £ £ £ Cash inflow from operating activities 1 737,416 389,795 464,524 Return on investments & servicing of finance Interest received 14,951 23,428 37,817 Interest paid (11,494) (9,590) (17,496) Net cash inflow from return on investments & 3,457 13,838 20,321 servicing of finance Taxation Corporation tax paid - - - Capital expenditure & financial investment Payments to acquire tangible fixed assets (143,700) (217,533) (473,978) Payments to acquire shares for EBT - (6,838) - Proceeds from sales of tangible fixed assets - 110 500 Net cash outflow on capital expenditure & (143,700) (224,261) (473,478) financial investment Acquisitions Purchase of subsidiary undertaking (2,379,449) - - Cash and bank balances acquired 204,236 Net cash outflow on acquisitions (2,175,213) - - Net cash (outflow)/inflow before management of liquid resources and financing (1,578,040) 179,372 11,367 Management of liquid resources Cash withdrawn from short term deposit 790,000 - 210,000 Financing Repayment of other loans (141,227) (50,000) (50,000) New other loans 700,000 - - Purchase of own shares for Immedia Employee - - (6,865) Benefit Trust Issue of ordinary share capital 326,531 - - Conditional shares to be issued 305,306 - - Share issue costs (taken against share premium - - (10,498) account) Effect of adoption of FRS 25 on 1 January 2005 - - 28,253 (with 2004 not restated) FRS 25 revaluations of other loans (23,312) - - Net cash inflow/(outflow) from financing 1,167,298 (50,000) (39,110) Increase in cash in the period 379,258 129,372 182,257 Reconciliation of net cash flow to movement in net funds Note Unaudited Unaudited Half Year to Half Year to Year Ended 30 June 06 30 June 05 31 Dec 05 £ £ £ Increase in cash in the period 379,258 129,372 182,257 Cash outflow from decrease in liquid resources (790,000) - (210,000) Cash (outflow)/inflow from (increase)/decrease in (587,190) 50,000 44,382 debt Movement in net (debt)/funds in the period (997,932) 179,372 16,639 Net funds at the start of the period 643,497 626,858 626,858 Net (debt)/funds at the end of the period 2 (354,435) 806,230 643,497 Notes to the Cash flow statement 1. Reconciliation of operating profit (loss) to net cash flow from operating activities Unaudited Unaudited Half Year to Half Year to Year Ended 30 June 06 30 June 05 31 Dec 05 £ £ £ Operating profit/(loss) 125,138 (287,109) (1,071,737) Depreciation and amortisation of tangible and intangible assets 533,271 338,506 1,145,128 (Profit)/loss on disposal of fixed assets - (110) 500 Decrease/(increase) in debtors (803,080) 299,357 259,182 Increase in creditors 882,087 39,151 132,451 Net cash inflow from operating activities 737,416 389,795 464,524 2. Analysis of changes in net funds/(debt) 31 Dec 05 Cash Flow 30 June 06 £ £ £ Cash at bank and in hand 48,452 433,035 481,487 Overdrafts (6,588) (53,777) (60,365) 41,864 379,258 421,122 Loans - short term position (188,367) (355,119) (543,486) Loans - long term position - (232,071) (232,071) Cash on deposit 790,000 (790,000) - Net funds/(debt) 643,497 (997,932) (354,435) Notes to the Interim Results 3. Basis of preparation The accounts of the company for the six months ended 30 June 2006, which are unaudited, were approved by the board on 22 August 2006. They have been prepared under the historical cost accounting rules and in accordance with applicable accounting standards. The results contained in this statement do not constitute statutory accounts as defined in section 240 of the Companies Act 1985. 4. Merger accounting On the 20 November 2003 a new holding company was brought into the group. This was carried out by a share for share exchange and the existing shareholders of Immedia Broadcast Ltd received 1,000 10p Ordinary shares in Immedia Broadcasting Plc for every share held. There was no cash consideration. This group reconstruction has been accounted for as a merger as permitted by FRS 6 acquisitions and mergers. Following these principles the entities are combined. This transaction qualifies under section 131 of the Companies Act 1985, which exempts the parties from creating a share premium on this transaction. The difference between the investment value carried in Immedia Broadcasting Plc and the capital base of Immedia Broadcast Ltd is taken to a merger reserve. Under the merger method, subsidiaries acquired are included as if they had always been members of the group. 5. Employee Benefit Trust (EBT) Group accounts for the current year and the comparative figures include an EBT in accordance with UITF 38. The cost of shares in Immedia Broadcasting Plc purchased on behalf of the Trust has been debited to reserves. 6. Taxation During the period, the Group made taxable profits before capital allowances (losses to 30 June and 31 December 2005), which have been offset against accumulated tax losses brought forward. The residual trading losses create a deferred tax asset of £1,143,000 (31 December 2005: £1,173,000) which has not been recognised due to the uncertainty of the timing of its eventual crystallisation. 7. Earnings/(loss) per share Earnings/(loss) per share is based on the earnings after tax of £128,595 (30 June 2005: loss of £273,271; 31 December 2005: loss of £1,051,416) divided by the weighted average number of Ordinary shares in issue in each of the relevant periods; 30 June 2006: 12,969,563 shares (30 June and 31 December 2005: 11,144,410 shares). The diluted earnings per share is based on 13,093,010 shares for the period to June 2006. For 30 June and 31 December 2005, the diluted basic loss per share is stated as the same amount as basic as there is no dilutive effect from the current share options, warrants and convertible loan notes in accordance with FRS 22. 8. Turnover Turnover represents the amount invoiced by the Group for goods and services provided in the normal course of business, excluding value added tax. 9. Intangible fixed assets Unaudited Unaudited as at as at As at 30 June 06 30 June 05 31 Dec 05 £ £ £ Goodwill Cost At beginning of period 109,900 109,900 109,900 Acquisitions 2,230,317 - - At end of period 2,340,217 109,900 109,900 Accumulated amortisation At beginning of period (73,263) (36,633) (36,633) Charge for period (32,202) (18,315) (36,630) At end of period (105,465) (54,948) (73,263) Net Book Value 2,234,752 54,952 36,637 10. Acquisitions Fair value Book values adjustments As adjusted £ £ £ Net assets acquired Tangible fixed assets 426,254 (361,999) 64,255 Debtors 435,915 - 435,915 Cash at bank and in hand 102,286 - 102,286 Creditors (424,905) - (424,905) Loans and finance leases (28,419) - (28,419) 511,131 (361,999) 149,132 Goodwill 2,230,317 2,379,449 Satisfied by Shares allotted 326,531 Conditional shares to be issued 305,306 Cash 1,747,612 2,379,449 The subsidiary undertaking acquired during the period contributed £(101,950) to the group's net operating cash flows, paid £294 in respect of net returns on investments and servicing of finance, paid £nil in respect of taxation and utilised £nil for capital expenditure. 11. Tangible fixed assets Plant and Fixtures and Network Total machinery fittings equipment £ £ £ £ Cost At 1 January 2006 615,366 245,852 2,378,993 3,240,211 Additions 3,800 21,497 118,403 143,700 Acquisitions 18,747 102,273 - 121,020 At 30 June 2006 637,913 369,622 2,497,396 3,504,931 Depreciation At 1 January 2006 441,317 153,773 1,489,409 2,084,499 Charge for period 63,612 34,050 403,407 501,069 Acquisitions 6,738 44,760 - 51,498 At 30 June 2006 511,667 232,583 1,892,816 2,637,066 Net book value Unaudited at 30 June 2006 126,246 127,039 604,580 867,865 At 31 December 2005 174,049 92,079 889,584 1,155,712 Unaudited at 30 June 2005 221,272 87,900 1,378,402 1,687,574 12. Debtors - amounts falling due within one year Unaudited Unaudited as at as at As at 30 June 06 30 June 05 31 Dec 05 £ £ £ Trade debtors 1,089,078 507,579 472,862 Other debtors and prepayments 372,015 318,668 393,560 1,461,093 826,247 866,422 13. Creditors - amounts falling due within one year Unaudited Unaudited as at as at As at 30 June 06 30 June 05 31 Dec 05 £ £ £ Bank overdrafts 60,365 2,031 6,588 Bank loans 14,250 - - Other loans 522,139 - 188,367 Finance leases 7,097 - - Trade creditors 758,432 399,038 396,683 Other creditors including taxation & social security 128,328 29,850 66,048 Accruals and deferred income 905,786 490,471 559,928 2,396,397 921,390 1,217,614 Other loans comprise £475,000 in relation to the acquisition of The Cube Group of Companies Limited (repayable in instalments of £250,000 on 31 October 2006 and £225,000 on 30 April 2007 and bearing interest at a fixed rate of 8% per annum) and £50,000 for an unsecured convertible loan from Horrocks Guardian Limited, bearing interest at a fixed rate of 8% per annum and repayable on 19 September 2006. The carrying value of the Horrocks Guardian loan is included at £47,139 following revaluation under FRS 25. 14. Creditors - amounts falling due after more than one year Unaudited Unaudited as at as at As at 30 June 06 30 June 05 31 Dec 05 £ £ £ 232,071 200,000 - This comprises £225,000 of deferred consideration for the acquisition of The Cube Group of Companies Limited, repayable on 31 October 2007 and bearing interest at a fixed rate of 8% per annum, £6,980 for two DTI loans granted to The Cube Group of Companies Limited under the Small Firms Loan Guarantee Scheme bearing interest at LIBOR plus 2.5% and repayable on a monthly basis up to August 2008, and £91 of finance lease liabilities. 15. Reserves Reserves as at 30 June 2006 Merger Share Share Shares Profit reserve capital premium To be & loss account £ £ £ issued £ £ Beginning of period 2,245,333 1,173,897 3,390,411 - (5,130,032) Retained profit for the - - - - 128,595 period Released on repayment - (2,331) (20,981) - - of Other loan under FRS 25 New shares issued - 163,265 163,266 - - Conditional shares to - - - 305,306 - be issued End of Period 2,245,333 1,334,831 3,532,696 305,306 (5,001,437) Reserves as at 31 December 2005 Merger reserve Share capital Share premium Profit £ £ £ & loss account £ Beginning of period 2,245,333 1,170,791 3,372,960 (4,063,331) Retained loss for the year - - - (1,051,416) Liabilities classified as shares - 3,106 - - Effect of adoption of FRS 25 on 1 January - - 34,919 (10,546) 2005 (with 2004 not restated) Released on repayment of Other loan under - - (6,970) 2,126 FRS 25 Share issue costs - - (10,498) - Purchase of own shares for Employee Benefit - - - (6,865) Trust End of Period 2,245,333 1,173,897 3,390,411 (5,130,032) This information is provided by RNS The company news service from the London Stock Exchange

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