Interim Results

Internet Music & Media PLC 28 September 2001 Date 28 September 2001 Contacts Nicholas Cowan Internet Music & Media PLC 020 7352 6688 John East / David Worlidge John East & Partners Limited 020 7628 2200 David Bick Holborn Public Relations 020 7929 5599 david.bick@holbornpr.co.uk Internet Music & Media plc ('the Company') Unaudited Interim Results for the six months ended 30 June 2001 * Turnover continues to increase * Successfully completed Placing and Open Offer raising £ 1.85 million after expenses * Opening of warehouse and distribution centre in London, to supply the UK and Europe * Launch of Groovetech's own record label * Launch of new website Chairman's Statement The loss of £2.966 million incurred in the half year ended 30 June 2001 includes goodwill amortisation of £1.636 million in respect of the acquisition of Groovetech and also reflects the final stages of the expenditure involved in setting up the new website launched in March 2001, the completion of our London facility, including warehouse and shipping facilities for Europe, and the launch of Groovetech's own record label. All these projects are now complete and operational. Since the end of the period under review, we completed a Placing and Open Offer, which raised £1.85 million for the Company after expenses, repaying short-term debt of £1.43 million and providing additional working capital. In recent months we had seen substantial increases in revenue together with improved margins. Trading in August was particularly buoyant, with revenues of £150,000 and we were delighted that Groovetech was voted online retailer of the year at the Music Week online music awards held on 27 September 2001, beating such household names as Amazon and HMV. However, the tragic events of 11 September have had an immediate negative impact on our business particularly in the US and it remains to be seen whether this will affect us in the short or longer term. In view of these uncertainties, it is not possible to predict business trends in the short term, although your directors remain optimistic that trading will recover when the general economic environment improves. Nicholas Cowan Chairman 28 September 2001 Consolidated Profit and Loss Account (unaudited) For the six months ended 30 June 2001 6 months ended Period ended 30 June 2001 31 December 2000 £'000 £'000 Turnover 446 294 Cost of sales (392) (228) -------------- -------------- Gross profit 54 66 Administrative expenses (1,384) (2,080) Amortisation of goodwill (1,636) (2,181) -------------- -------------- Net Operating Loss (2,966) (4,195) Interest receivable/(payable) - (5) 54 net -------------- -------------- Loss on Ordinary Activities (2,971) (4,141) before Taxation Tax on loss on Ordinary - - Activities -------------- -------------- Loss on Ordinary Activities (2,971) (4,141) after Taxation ======== ======== Loss per Share Pence Pence Basic (17.43) (38.99) ======== ======== Statement of Total Recognised Gains and Losses 6 months ended Period ended 30 June 2001 31 December 2000 £'000 £'000 Loss for the financial period (2,971) (4,141) Unrealised foreign currency translation 126 (19) difference -------------- -------------- Total recognised gains and loss relating to the Period (2,845) (4,160) ======== ======== Consolidated Balance Sheet (unaudited) As at 30 June 2001 6 months ended Period ended 30 June 2001 31 December 2000 Note £'000 £'000 Fixed Assets Intangible assets 12,542 14,178 Tangible assets 1,862 1,726 -------------- -------------- 14,404 15,904 Current Assets Stock 430 276 Debtors 107 73 Cash at bank and in hand 127 192 -------------- -------------- 664 541 Creditors Amounts falling due within one year 7 (2,035) (594) -------------- -------------- Net Current Liabilities (1,371) (53) -------------- -------------- Total Assets less Current Liabilities 13,033 15,851 Creditors Amounts falling due after more than one (600) (573) year -------------- -------------- 12,433 15,278 ======== ======== Capital and Reserves Called up Share capital 4,262 4,262 Share premium account 15,176 15,176 Profit and Loss Account (7,005) (4,160) -------------- -------------- Equity Shareholders' funds 12,433 15,278 ======== ======== Consolidated Cash Flow Statement (unaudited) For the six months ended 30 June 2001 6 months ended Period ended 30 June 2001 31 December 2000 Note £'000 £'000 Net cash inflow/(outflow) from operating activities 5 227 (2,735) Return on investment and servicing of finance Net interest (payable)/receivable (5) 54 Capital expenditure Acquisition of fixed assets (377) (1,603) Acquisitions and disposals Purchase of subsidiary undertaking - 109 Financing Issue of Ordinary Share capital - net - 3,796 proceeds Bank loan received 27 573 -------------- -------------- (Decrease)/increase in cash in the period 6 (128) 192 ======== ======== Notes to the Interim Results 1. Basis of Preparation The results for the six months ended 30 June 2001 are unaudited and have not been reviewed by the auditors. They have been prepared on accounting bases and policies that are consistent with those used in the preparation of the financial statements of the company for the period ended 31 December 2000. The financial statements contained in this report do not constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985. The results for the period ended 31 December 2000 were reported on by the auditors and received an unqualified audit report. Full accounts for the period ended 31 December 2000 have been delivered to the Registrar of Companies. 2. Dividends No dividend is proposed for the period ended 30 June 2001. 3. Taxation No taxation is expected to arise on the result for the period. 4. Earnings per Share The loss per share for the six months ended 30 June 2001 has been calculated on the basis of the loss after taxation for the period of £2,971,897 and the weighted average number of shares in issue during the period of 17,050,000. Notes to the Interim Results (continued) 5. Net cash outflow from operating activities 6 months ended 12 months 30 June 2001 ended 31 December 2000 £'000 £'000 Operating loss (2,966) (4,195) Depreciation of tangible assets 241 101 Amortisation of goodwill 1,636 2,181 Increase in stocks (154) (138) (Increase)/decrease in debtors (34) 199 Increase/(decrease) in creditors 1,378 (864) Net effect of foreign exchange 126 (19) differences -------------- -------------- Net cash inflow/(outflow) from 227 (2,735) operating activities ======== ======== 6. Reconciliation of net cash flow to movement in net funds/debt 1 January Cash flow 30 June 2001 movement 2001 £'000 £'000 £'000 Cash in hand and bank 192 (65) 127 Bank overdraft - (63) (63) -------- -------- -------- 192 (128) 64 Debt: Debts falling due after one year (573) (27) (600) -------- -------- -------- Net debt (381) (155) (536) ======== ======== ======== 7. Creditors: Amounts falling due within one year Amounts falling due within one year include loans of £1,431,000 which were repaid after the period end following the completion of a placing and open offer which raised £1.85 million for the Company after expenses. 8. Copies of the Interim Results will be sent to Shareholders shortly and will be available to members of the public from the Company's registered office, Unit 10, Latimer Road Industrial Estate, Latimer Road, London W10 6RQ. - ENDS -

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