Interim Results

RNS Number : 4910E

Immedia Group PLC

29 September 2008

 



29 September 2008

IMMEDIA GROUP PLC

INTERIM RESULTS

Immedia Group Plc, the UK's leading provider of live, tailored in-store radio and TV, today announces its interim results for the six months to 30 June 2008.

Operational Highlights

• Reduced operating loss of £115,423 compared to 2007 loss of £1,109,326

• New contracts include Roadchef and we now provide HSBC Live! to over 1,000 branches in the UK

• Provision of new installation and maintenance services making good progress

• Tight control of costs

• Increased cash in bank to £645,143 as at 30 June 2008 (£489,951 as at 30 June 2007)

• Strong pipeline of new business

Financial Highlights

	Unaudited Half year to  30 June 2008	Unaudited Half year to  30 June 2007
Revenue	£ 1,608,872	£ 2,015,345
Operating loss	£ (115,423)	£ (1,109,326)
Underlying operating loss 1	£ (115,423)	£ (142,104)
Impairment charge on intangible assets	£ -	£ (1,017,000)
Loss before tax	£ (101,535)	£ (1,104,517)
Basic and diluted loss per share (pence)	(0.71)p	(8.04)p
Cash and cash equivalents	£ 645,143	£ 489,951

1 The underlying data excludes in 2007 the exceptional contribution from Alphyra and the impairment charge against Cube intangible assets.

  Bruno Brookes, Chief Executive of Immedia, said:

'Immedia has made significant steps in 2008, the benefits of which will be seen in 2009. In particular, our Radiovision offer is attracting great interest as companies seek new ways to win customers in an ever more competitive market.  

'Our strong pipeline of new business leaves us well placed to make further progress by the year end as we move towards profitability.'

Immedia Group Plc
Bruno Brookes - Chief Executive	[phone]
Hudson Sandler
Nick Lyon / Fran Read	[phone]
Daniel Stewart & Company Plc
Simon Leathers / Simon Starr	[phone]

Chief Executive's Review

I am pleased to present our results for the six months ended 30 June 2008 and to report on Immedia's progress during the half-year.

Results

In the first six months of the year, Immedia has continued to focus on cost control and profitability. Revenue for the period was £1,608,872 (2007: £2,015,345) with the underlying operating loss reduced from £142,104 to £115,423.  Despite operating in a challenging retail environment, we are pleased to have continued our move towards profitability.

The decline in revenues is largely due to the impact of the loss of contracts in 2007 and in part to the reduction in value of certain trials in 2008. However, we are already seeing the benefit of new contract wins which will replace the revenue lost from ceased contracts. In addition, we have ceased our loss making free radio service to independent retailers.  

We are pleased with the development of the Immedia product and in particular that of Radiovision.  In addition, our visual creation business, which was part of our Cube acquisition, is developing well and is already working with a number of companies on pre-contract development work.

Costs continue to be tightly managed and the Group remains cash generative with £645,143 cash in the bank at 30 June 2008 (30 June 2007: £489,951).

Subscription Stations

Our subscription radio stations continue to perform well, with new opportunities to help our clients with new product development.

We have also won some significant new business. On 2 June 2008 we were delighted to announce a two year contract with Roadchef to provide a brand new live radio station to all 29 Roadchef motoring service areas in the UK. This station was successfully launched in June 2008.

In July we announced a significant memorandum of understanding with a leading retail brand. The trials of our Radiovision product with this company have been very successful and we expect to announce the signing of a contract in due course.

We continue to work closely with HSBC following the roll out of the HSBC Live! subscription radio station, which is now broadcast to over 1,000 branches across the UK and other HSBC buildings, and we look forward to developing our relationship with them further.  Our strong relationship with SPAR has seen the introduction of a subscription model to circa 1,400 stores across the UK, replacing the free to air service. This has resulted in a lower cost base as well as an increase in revenue.

We continue to broadcast GAME Live! to approximately 370 GAME stores across the UK, having moved on from pre-contract trials and installations in 2007 to a full subscription service in the first half.  

Our installation and maintenance services continue to grow, with a number of new clients initially seeking ad hoc services. Over time we expect a number of these clients will look to sign longer term contracts.

IKEA Live! has been well received across all its 20 UK stores and we are looking forward to working with IKEA on the next phase of its IT programme as it moves its radio service from satellite to broadband.

Lloyds Pharmacy Live! operates across all 1,500 stores and, with our renewed contract, we are exploring further opportunities to assist with new product development.

We are currently trialling other radio stations and believe that our breadth of offer will continue to attract new clients.

  Outlook

Immedia has made significant steps in 2008, the benefits of which will be seen in 2009. In particular, our Radiovision offer is attracting great interest as companies seek new ways to win customers in an ever more competitive market. 

Our strong pipeline of new business leaves us well placed to make further progress by the year end as we move towards profitability.

Bruno Brookes

Chief Executive

Consolidated income statement

		Unaudited  Half year to  30 June 08  £		Unaudited  Half Year to  30 June 07  £		Year Ended  31 Dec 07  £
Revenue		1,608,872		2,015,345		3,904,815
Cost of sales		(667,262)		(862,955)		(1,691,821)
Gross profit		941,610		1,152,390		2,212,994
Administrative expenses before impairment charge on intangible assets		(1,057,033)		(1,244,716)		(2,533,678)
Impairment charge on intangible assets		-		(1,017,000)		(1,055,225)
Operating loss		(115,423)		(1,109,326)		(1,375,909)
Finance income		13,911		5,933		22,374
Finance expense		(23)		(1,124)		(1,875)
Loss before taxation		(101,535)		(1,104,517)		(1,355,410)
Income tax		-		-		72,750
Loss for the period attributable to equity shareholders		(101,535)		(1,104,517)		(1,282,660)
Continuing operations
Loss per share - basic and diluted		(0.71)p		(8.04)p		(9.13)p

There was no income or expense for the current or comparative periods other than that reported in the consolidated income statement.

  Consolidated Balance Sheet

		Unaudited  as at  30 June 08  £		Unaudited  as at  30 June 07  £		As at   31 Dec 07  £
Assets
Property, plant and equipment		154,253		367,709		208,837
Intangible assets		334,176		408,910		377,190
Total non-current assets		488,429		776,619		586,027
Current assets
Inventories - work in progress		756		-		3,703
Trade and other receivables		670,416		628,792		675,975
Prepayments for current assets		178,251		163,892		151,550
Cash and cash equivalents		645,143		489,951		661,845
Total current assets		1,494,566		1,282,635		1,493,073
Total assets		1,982,995		2,059,254		2,079,100
Equity
Share capital		1,455,684		1,455,684		1,455,684
Share premium		3,586,541		3,586,541		3,586,541
Merger reserve		2,245,333		2,245,333		2,245,333
Retained losses		(6,814,264)		(6,534,586)		(6,712,729)
Total equity		473,294		752,972		574,829
Liabilities
Deferred tax liabilities		12,480		-		12,480
Total non-current liabilities		12,480		-		12,480
Loans and borrowings		-		9,196		-
Trade and other payables		1,408,243		1,196,836		1,416,926
Deferred income		88,978		100,250		74,865
Total current liabilities		1,497,221		1,306,282		1,491,791
Total liabilities		1,509,701		1,306,282		1,504,271
Total equity and liabilities		1,982,995		2,059,254		2,079,100

  Consolidated statement of cash flows

		Unaudited  Half Year to  30 June 08  £		Unaudited  Half Year to  30 June 07  £		Year Ended  31 Dec 07  £
Cash flows from operating activities
Loss for the period attributable to equity shareholders		(101,535)		(1,104,517)		(1,282,660)
Adjustments for:
Depreciation, amortisation and impairment		132,375		1,296,821		1,582,278
Financial income		(13,912)		(5,933)		(22,374)
Financial expense		23		1,124		1,875
Loss on sale of property, plant and equipment		-		19,138		19,138
Deferred tax credits		-		-		(72,750)
(Increase)/decrease in trade and other receivables		(21,142)		436,750		401,909
Decrease/(increase) in inventories		2,947		2,409		(1,294)
Increase/(decrease) in trade and other payables		5,430		(382,679)		(187,973)
Net cash from operating activities		4,186		263,113		438,149
Cash flows from investing activities
Proceeds from sale of property, plant and equipment		-		1,753		1,753
Interest received		13,912		5,933		22,374
Acquisition of property, plant and equipment		(34,777)		(12,833)		(22,469)
Net cash from investing activities		(20,865)		(5,147)		1,658
Cash flows from financing activities
Interest paid		(23)		(1,124)		(1,875)
Repayment of borrowings		-		(7,124)		(14,104)
Payment of finance lease liabilities		-		(2,562)		(4,778)
Net cash from financing activities		(23)		(10,810)		(20,757)
Net (decrease)/increase in cash and cash equivalents		(16,702)		247,156		419,050
Cash and cash equivalents at beginning of period		661,845		242,795		242,795
Cash and cash equivalents at end of period		645,143		489,951		661,845

    Notes to the consolidated financial statements

1. Reporting entity

Immedia Group plc (the 'Company') is a company incorporated and domiciled in the United Kingdom. The address of the Company's registered office is 8-10 New Fetter Lane, London EC4A 1RS.  

The consolidated financial statements of the Company as at and for the six months ended 30 June 2008 comprise the Company and its subsidiaries (together referred to as the 'Group'). The Group primarily is involved in marketing and communication services through radio and screen based media. 

2. Basis of preparation

These consolidated financial statements for the six months ended 30 June 2008 are unaudited.  They have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ('Adopted IFRSs').  

On the basis of current financial projections prepared up to the end of 2009, recent news of contract renewals, continuing improvements in management of costs, and ongoing availability of facilities, the Directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future and consequently the financial statements have been prepared on the going concern basis.

The financial statements were approved by the Board of Directors on 26 September 2008.

3. Significant accounting policies

The accounting policies set out in detail in note 3 of the Group's consolidated financial statements to 31 December 2007 have been applied consistently to these unaudited financial statements to 30 June 2008, including:

(a) Revenue

Revenue represents the amount invoiced by the Group for the provision of media services and their related equipment in the normal course of business, excluding value added tax. Revenue from these services and equipment is recognised on the date of broadcast or delivery. Sponsorship and promotions revenue is recognised over the life of the contract.

(b) Taxation

Income tax expense comprises current and deferred tax.

Recognised deferred tax liabilities are attributable to intangible assets. The Group also has potential deferred tax assets arising in respect of temporary differences between capital allowances and depreciation; these have been added to accumulated trading losses. The deferred tax asset created by the Group's residual trading losses has not been recognised due to the uncertainty of the timing of its eventual crystallisation.

  Notes to the consolidated financial statements

4. Property, plant and equipment

	Plant and	Fixtures and	Network	Total
	equipment	fittings	equipment
	£	£	£	£
Cost
At 1 January 2008	679,827	349,258	657,377	1,686,462
Additions	10,879	21,766	2,132	34,777
Disposals	-	-	-	-
At 30 June 2008	690,706	371,024	659,509	1,721,239
Depreciation and impairment losses
At 1 January 2008	654,536	296,580	526,509	1,477,625
Charge for period	17,590	25,360	46,411	89,361
On disposals	-	-	-	-
At 30 June 2008	672,126	321,940	572,920	1,566,986
Carrying amounts
Unaudited at 30 June 2008	18,580	49,084	86,589	154,253
At 31 December 2007	25,291	52,678	130,868	208,837
Unaudited at 30 June 2007	48,555	64,883	254,271	367,709

  Notes to the consolidated financial statements

5. Intangible assets

	Customer	Video	Goodwill	Total
	relationships	library
	£	£	£	£
Cost
At 1 January 2008	566,880	126,000	1,173,310	1,866,190
Additions	-	-	-	-
At 30 June 2008	566,880	126,000	1,173,310	1,866,190
Amortisation and impairment losses
At 1 January 2008	493,375	21,625	974,000	1,489,000
Charge for period	36,750	6,264	-	43,014
At 30 June 2008	530,125	27,889	974,000	1,532,014
Carrying amounts
Unaudited at 30 June 2008	36,755	98,111	199,310	334,176
At 31 December 2007	73,505	104,375	199,310	377,190
Unaudited at 30 June 2007	116,700	92,900	199,310	408,910

  Notes to the consolidated financial statements

6. Trade and other receivables

	Unaudited as at 30 June 08 £		Unaudited as at 30 June 07 £		As at 31 Dec 07 £
Trade receivables	585,365		560,131		593,250
Other debtors	85,051		68,661		82,725
	670,416		628,792		675,975

As 30 June 2008 trade receivables are shown after a provision for impairment of £10,025 (31 December 2007: £15,218; 30 June 2007: £91,753) arising from disputed charges.  £84,500 of the June 2007 provision was released in 2007 following recovery of a disputed debt.  All debts are due within one year.

At 30 June 2008 the totals of trade receivables past due, net of provision for impairment, were as follows:

	Unaudited as at 30 June 08 £		Unaudited as at 30 June 07 £		As at 31 Dec 07 £
Up to 3 months past due	274,405		69,288		344,084
Over 3 months past due	73,157		249,925		58,847
	347,562		319,213		402,931

7. Cash and cash equivalents

	Unaudited as at 30 June 08 £		Unaudited as at 30 June 07 £		As at 31 Dec 07 £
Bank balances	1,175		8,218		1,143
Call deposits	643,968		481,733		660,702
Cash and cash equivalents	645,143		489,951		661,845

  Notes to the consolidated financial statements

8. Capital and reserves

Reconciliation of movement in capital and reserves

Share capital

	Unaudited as at 30 June 08 £		Unaudited as at 30 June 07 £		As at 31 Dec 07 £
Authorised
36,000,000 Ordinary shares of 10 pence each	3,600,000		3,600,000		3,600,000
Allotted, called up and fully paid
14,556,844 Ordinary shares of 10 pence each	1,455,684		1,455,684		1,455,684
Movements in period
At beginning of period	1,455,684		1,334,056		1,334,056
(2007: 1,216,281 Ordinary shares of 10 pence each issued in period)	-		121,628		121,628
At end of period	1,455,684		1,455,684		1,455,684

Share Premium and Reserves

Reserves as at 30 June 2008	Share premium account £		Shares to be issued £		Merger reserve £		Profit  & loss account £
At 1 January 2008	3,586,541		-		2,245,333		(6,712,729)
Retained loss for the period	-		-		-		(101,535)
Unaudited at 30 June 2008	3,586,541		-		2,245,333		(6,814,264)

Reserves as at 31 December 2007
At 1 January 2007	3,525,727		237,175		2,245,333		(5,430,069)
Retained loss for the year	-		-		-		(1,282,660)
1,216,281 Ordinary shares of 10 pence each issued in year	60,814		(237,175)		-		-
At 31 December 2007	3,586,541		-		2,245,333		(6,712,729)

  Notes to the consolidated financial statements

9. Trade and other payables

	Unaudited as at 30 June 08 £		Unaudited as at 30 June 07 £		As at 31 Dec 07 £
Trade payables due to related parties	6,190		14,939		3,848
Other trade payables	581,958		420,670		737,937
Other taxation & social security	149,952		145,969		144,547
Non-trade payables and accrued expenses	670,141		615,258		530,594
	1,408,241		1,196,836		1,416,926

10. Loss per share

	Unaudited as at 30 June 08 Number		Unaudited as at 30 June 07 Number		As at 31 Dec 07 Number
Weighted average number of shares in issue	14,556,844		13,956,776		14,260,271
Less weighted average number of own shares	(213,500)		(213,500)		(213,500)
Weighted average number of shares in issue for basic loss per share	14,343,344		13,743,276		14,046,771

The loss per share is based on the loss after tax of £101,535 (30 June 2007: loss of £1,104,517; 31 December 2007: loss of £1,282,660) divided by the weighted average number of Ordinary shares in issue in each of the relevant periods: 30 June 2008: 14,343,344 shares (30 June 2007: 13,743,276 shares; 31 December 2007: 14,046,771 shares).  

The weighted number of shares used for the diluted loss per share is calculated after reflecting the outstanding share options at the period end. But in accordance with IAS 33 the diluted basic loss per share is stated as the same amount as basic as there is no dilutive effect.

 

END

 

 

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