Dods (Group) PLC
PRELIMINARY RESULTS
for the 15 months to 31 March 2013
Financial Highlights
- Revenue at £18.8 million (2011 12 months: £15.3 million)
- EBITDA at £0.4 million (2011 12 months: £1.9 million) *
- Net cash of £7.0 million at 31 March 2013 (at 31 December 2011: net cash of £1.4million)
- Impairment charge of £6.9 million on carrying value of goodwill
Operating Highlights
- Continued double digit growth in Digital subscriptions
- Digital subscription revenue 39% of Group Revenue
- Events related revenue 34% of Group Revenue
- Politics Home digital news service re-launched. Ten-fold increase in page impressions
- Launch of first product from our technology platform - Social Lens a social media monitoring tool
- Restructuring, establishment of a group marketing function and investment in increased sales teams
- Placing of 188 million shares
- Acquisitions of Holyrood Communications Limited and Total Politics Limited
- OFT referred De Havilland acquisition to Competition Commission and discussions terminated
* EBITDA is calculated as earnings before interest, tax, depreciation, amortisation of intangible assets acquired through business combinations, share based payments and non-trading items as disclosed in Schedule A.
Summary of Results |
2013 |
2011 |
|
£'000 |
£'000 |
Revenue from retained business |
18,773 |
15,262 |
EBITDA* |
378 |
1,905 |
Loss for the year |
(10,241) |
(873) |
EPS on continuing operations (basic) |
(3.75)p |
(0.57p) |
Kevin Hand, Non-Executive Chairman of Dods, commented:
"Although the trading environment continues to be difficult we have started the new financial year positively. We have seen continued growth in revenues in our information monitoring business, in our training division and government division. The Board are optimistic about the performance for the Group in the following 12 months."
For further information, please contact:
Dods
Kevin Hand, Non-Executive Chairman 020 7593 5500
Keith Sadler, Chief Executive Officer
Cenkos (NOMAD)
Nicholas Wells 020 7397 8922
Note to editors:
Dods (Group) PLC is a public limited company listed on the Alternative Investment Market (ticker DODS.L)
Chairman's Statement
The Report and Accounts presented show the results for the 15 months ended March 2013.
As previously notified our year-end was moved to avoid the compression of our best trading quarter against the year-end which affected the predictability of our results. We believe that in future the change in reporting year will allow us to guide the market more clearly and enhance our customer service in a critical trading period. Nevertheless we are working to reduce the seasonality of revenues, something that will become easier as we increasingly move towards a more subscription based relationship with our clients.
Our trading performance has been poor. This was not caused by a lack of effort by our staff. They, as I will go onto explain, have risen superbly to the challenge. However, over number of years declining revenues in some areas had been replaced with revenues from a variety of new clients and services, without sufficient attention to profitability. This left the company poorly positioned from a profitability perspective in the period under review.
The market for all businesses that provide services to Government was difficult during the period. The coalition government's squeeze on central spending meant in particular a sharp reversal in spending patterns that affected our training business. Moreover, the pace at which advertising revenue flowed away from print publications and towards online media materially affected our publishing businesses. We should have anticipated both trends earlier and accelerated our investment in our digital offerings to compensate. The investment is now being made and we are seeing benefits.
We also had a number of factors that affected us in particular. As previously reported we had a fire at our office in London which caused significant disruption and meant we had to temporarily relocate our operations. In addition, the Office of Fair Trading referred our proposed acquisition of De Havilland, which offers a similar monitoring service, to the Competition Commission. This resulted in the Group spending £1.7 million of fees and expenses and diverted management time from the business.
Despite these setbacks we recapitalised the Company by placing 188 million shares and raising £10.0 million before expenses. I would like to take this opportunity to thank shareholders who have shown their support for the Company's view of the future by their backing of this placing. The resulting strong balance sheet has allowed us to invest and restructure with confidence in what has been a difficult year and has supported a sense of renewal within the business. The Board is clear that Dods has a presence and a platform on which can be created a suite of products that will allow our clients in the public, private and governmental sectors to access the information and people they need in the most timely and productive manner. We are increasingly aiming, through investment in people and services, to embed our products in the daily work-flow of our clients.
As evidence of our approach we launched a new monitoring product and have made a significant capital investment in our single information platform. We also completed two acquisitions during the period and look for further opportunities to grow the group through acquisition. The Board continue to believe the interests of shareholders are served by the continuing investment in technology and new product initiatives and therefore do not propose to pay a dividend.
Revenue for the 15 months was £18.8 million and our adjusted earnings before interest tax depreciation and amortisation was £0.4 million. The statutory loss before tax for the period was £10.6 million. This is after taking an impairment charge of £6.9 million. The Board are required to review the carrying value of goodwill on the balance sheet on an annual basis and the charge reflects more cautious assumptions on future growth rates than used in the previous year. We have disclosed separately £1.7 million of non-trading items . The majority of which, £0.9 million, were costs associated with the potential acquisition of De Havilland.
These results reflect the continued changes and investments we are implementing within the Group. This will ensure that Dods grows into a significant business in the political communications industry.
I said at the start that our people have risen to the challenges of market change and circumstance. I would like to highlight these.
Our information monitoring service will be on our new technology platform from October of this year and this is the first step to all of our products being on a single platform allowing us to exploit our data and information in a number of ways and develop new products. This project has been, to date, on time and under budget and I would like to extend my thanks to our senior Management and the IT Group for ensuring that this was so despite the huge workload caused by the relocation after the fire.
We have grown the number of clients who use our monitoring services by 21% over the 15 month period. The Group now has more than 700 clients taking this service. We are expanding our offering to other European states, notably Germany and France but have also secured clients in the United States of America. Whilst we believe that the combination of technology and service will ensure we continue to grow this part of our business ultimately further growth will be driven by the fact that in this area the commitment and professionalism of our people stands out. They have performed exceptionally to grow the revenues and number of customers and I applaud their hard work.
As I stated above the change in the marketplace as the coalition government reined in departmental spending affected our training business. We were successful as a key partner in the Capita led consortium that was awarded The Civil Service Learning contract. A slower than expected implementation of this meant that revenues were not as anticipated through 2012/13.
We have, since the start of the year, seen an improvement in the number of courses being run through the umbrella contract and this is now starting to deliver materially better results. The quality of the courses and training we offer has won consistently high marks from the users and this is reflected in increased course bookings. This contract win and the level of service provided is a testament to the tenacity of our people in this area who have a strong pride in their work and hence the respect of the user community. Success breeds success and I am delighted to report new training contracts both in the UK and from countries in West Africa and China. These underpin my view that, with the benefit of stable governmental budgets in this area, we are capable of returning over time to the levels of revenue from this sector that we saw four year ago.
We had a disappointing conference season at the three main political parties' conferences and intend to review our participation at the events in 2014. We currently take speculative space at the events which we then sell on. It is our intention to offer a more bespoke service to clients in the future thereby limiting our financial exposure. Set against this our other events, particularly Civil Service Live, performed very strongly. Our strategy within this space is to focus our offering on a core number of sectors. We are making headway in the health market and intend to replicate this in other verticals.
It is in the arena that our publications and websites compete in that change has been the most disruptive. Both the printed format and the digital platform will co-exist for some time to come. Both will only attract advertisers and users if the content, which our editorial teams produce, is excellent. I expect that we will have a difficult market place to contend with both this year and next. But I do believe that if anyone can succeed in this space we can because our people are delivering tremendous products.
We acquired Total Politics and Holyrood Communications in December 2012 and they have been fully integrated into the Group. I would like to welcome all of their staff to the Dods Group and look forward to these acquisitions making a positive contribution in the future. Holyrood is a vital part of our plans going forward. Its excellent reputation is one we aim to build upon and enhance.
We have increased the number of sales people in the organisation by 13% and continue to do so. We have implemented training programmes for staff and ensure all staff are exposed to all parts of the business. This will ensure we offer our clients a service that allows them comprehensive access to the resources of the Company.
We are dependent upon our clients, employees and management to make Dods a success and I would like to take this opportunity to thank them all for their support and continued hard work. What on paper is, as I said at the beginning of this statement, a poor financial result, nevertheless masks tremendous effort and hard work in wresting the Company onto a new course. We are profoundly grateful for your labours.
Board
I have decided to step down from the role as Chairman. We are progressing with the search for a replacement who will be announced in due course. I would like to thank all staff and colleagues for the support and determination to make Dods succeed. I have been on the Board for 9 years and Chairman for nearly 5 years. I have thoroughly enjoyed my tenure and leave with Dods set well for future growth.
Outlook
Although the trading environment continues to be difficult we have started the new financial year positively. We have seen continued growth in revenues in our information monitoring business, in our training division and in our government division. The Board are optimistic about the performance for the Group in the current 12 months.
Kevin Hand
Chairman
25 July 2013
CHIEF EXECUTIVE'S BUSINESS AND FINANCIAL REVIEW
Business overview
Dods is a leading provider of political information, training and communication media for both public and private sector clients. These services are delivered through three product activity areas; digital, events and publications.
As shareholders are aware we extended our accounting reference date to March 2013 and therefore these results cover the 15 month period to 31 March 2013.
The Group reported revenues of £18.8 million for the 15 months ended 31 March 2013 compared to £15.3 million for the previous 12 months. Adjusted earnings before interest, tax, depreciation and amortisation was £0.4 million.
By activity the Group's revenue was:
|
15 months to 31 March 2013 |
12 months to 31 December 2011 |
||
|
£'000 |
% |
£'000 |
% |
Digital |
7,368 |
39.2% |
5,014 |
32.9% |
Events |
6,390 |
34.0% |
5,315 |
34.8% |
Publishing |
4,129 |
22.0% |
4,297 |
28.2% |
Other |
887 |
4.7% |
636 |
4.2% |
|
18,773 |
100.0% |
15,262 |
100.0% |
Digital
Digital revenues were a greater proportion of total revenues in the reporting period than in the previous year. This reflected the growth in our monitoring offering . We have grown the number of clients who use our monitoring services by 21% over the 15 month period and the Group now has more than 700 clients taking this service. We are looking to expand our offering to other European states, notably Germany and France but have also secured some clients in the United States of America. Our information monitoring service is expected to be on the new technology platform from October of this year and is the first step to all of our products being on a single platform, allowing us to exploit our data and information in a number of ways and develop new products. We believe the combination of technology and service will ensure we continue to grow this part of our business.
Events
Our Events business includes engagement activities such as the events we organise at the party conferences, our flagship Civil Service Live exhibition and our government training division. We had a disappointing conference season at the three main political party conferences and intend to review our participation at the events in 2014. It is our intention to offer a more bespoke service to clients in the future thereby limiting our financial exposure.
Our government training activities suffered from public spending cuts. However, we have seen early signs of improvement from a low base in the current year. In the Civil Service Learning contract (which was awarded to Capita in April 2012 and to whom we are a subcontractor),the curriculum has now been established and we are seen as an important supplier under the umbrella contract. We anticipate an improvement in the revenue from this contract through the current financial year.
In November 2012 we also set a target for increasing the number of policy conference events run by Westminster Briefing and we have invested in staff headcount in this area to ensure adequate resources to deliver the increased number of events.
Publishing
Publishing continues to suffer from the decline in advertising revenue. The largest fall in advertising revenue was experienced in our European magazine, Parliament, where there was a fall of over £400,000. This reflected the difficult economic environment within Europe. However, since the start of the new financial year we have seen a pick up in advertising revenues within our publishing portfolio including a 56% improvement in the Parliament magazine, albeit from a low base.
In November 2012 we launched our redesigned Politics Home website. Politics Home is the leading commercial political website based on the number of page impressions from the parliamentary estate. Following the launch the total number of page impressions to our clients material increased ten-fold. We intend to continue the development of the Politics Home website.
Trombinoscope, our French political directory, had a successful year as a result of the French elections taking place. We have launched a quarterly magazine to complement the directories published in the year. As there are no elections during this coming financial year the financial performance will not be as positive as it was during the period under review.
Management
Over the last 15 months we have broken down silos within the organisation with management and employees working together more closely to explore and develop opportunities. As an example of this we brought our information monitoring service in Europe and the UK under a single management structure. This has borne results with cross selling and expansion of our offering into other EU states and the US.
In addition, we have adopted Salesforce throughout the Group as the customer relationship management tool; this will enable us to have a single client view and to tailor high value offerings to all our clients. We overhauled our management reporting and accounting processes together with the adoption of a new chart of accounts to give us detailed and accurate information on the business.
Product and service development
Our aim is to maintain our position in the market place and to build compelling new products which benefit our clients, employees and shareholders. We have an ambitious plan to develop our offering over the next three years from a digital perspective but also to expand our existing range of products both in volume but also geographically . Our first step has been to transfer our monitoring services onto a new technology platform. The second step is to transfer Dods People, our political person reference material, and then over the next 24 months to consolidate all of our other products onto it. The development of the platform will ultimately allow clients to self-serve their requirements.
We started our transition to a new technology platform twelve months ago and have invested over £1.0 million developing it. This investment forms the core platform for our future product development allowing us to develop new information rich products.
The first product to be developed from our investment in our new platform is Social Lens, a social media monitoring tool. We have built this module on a cartridge basis which will allow us to adapt the product for different market verticals, sectors and geographies. Our first cartridge, which monitors political influencers in the UK has been well received by clients. As a follow-on, we have launched a European cartridge which monitors political social media from participants in the European Parliament. Our aim is to continue to migrate our other products on to this platform.
Our business plan also involves developing information monitoring through a value pyramid. There will be a basic monitoring service which will be technology driven moving through to an advisory service which will offer bespoke reports and access to our political consultants.
Placing and acquisitions
During the 15 months we placed 188 million shares and raised £10 million before expenses. The intention was to utilise these funds in the acquisition of De Havilland, a political monitoring business. However, the OFT opined that this potential acquisition should be referred to the Competition Commission. As this would have incurred further costs and uncertainties both parties agreed to end discussions on the potential acquisition. The abortive costs associated with this investigation and process totalled £1.6 million of which £0.9 million was incurred in the reporting period and the remainder in the previous year.
In the meantime we have completed two acquisitions, Holyrood Communications Limited and Total Politics Limited, in December 2012. Holyrood Communications is the leading political events organiser and publisher covering Scotland's Parliament and political scene. Total Politics publishes a monthly magazine, Total Politics, which is complementary to the existing Group portfolio of publications. The total acquisition cost was £0.8 million. These acquisitions have been fully integrated within the Group. In the three months of ownership Holyrood Communications limited contributed £450,000 of revenue and Total Politics Limited £102,000 of revenue.
Key Performance Indicators
Our aim for the current financial year is to improve the financial performance of each of our business activities and to reinforce our position as a market leader in the provision of political communication services.
Financial Review
Revenue and Operating Results
Operating performance was mixed across the portfolio. As a result of the 15 month period and acquisitions overall revenue increased from £15.3 million to £18.8 million and Adjusted EBITDA was £0.4 million compared to £1.9 million for the 12 months to 31 December 2011.
Non-trading items
As disclosed in Schedule A, non-trading items for the year totalled £1.7 million, relating to transaction costs relating to the potential acquisition of De Havilland, staff costs relating to restructurings within the Group and other non-recurring costs. Due to the timing of the De Havilland acquisition, the costs of the acquisition will be split between 2011 and 2012/13.
We are required to undertake a review of the carrying value of goodwill on the balance sheet on an annual basis. Based on the current economic environment we have adopted appropriate growth rates for the business within the review model. Based on these we have calculated that goodwill be impaired by £6.9 million.
Taxation
The utilisation of tax losses has led to a low tax payment in the year and a net income tax credit of £0.4 million (2011: tax credit of £0.2 million) in the year. Whilst the Group continues to seek to optimise its tax position going forward, it is expected that the effective tax rate will increase.
Earnings per Share
Normalised loss per share (before non-trading items, discontinued operations, share based payments credits and amortisation of intangible assets acquired through business combinations) was 2.76 pence per share (2011earnings per share: 0.71 pence per share). Basic loss per share was 3.75 pence per share (2011: 0.57 pence per share).
Dividends
The Company does not propose to pay a dividend.
Liquidity and Capital Resources
Interest payable during the 15 months amounted to £0.1 million (2011: £0.1 million).
During the period, underlying cash conversion was in line with expectations. The Group expended £1.2million (2011 generated: £1.2 million) of cash from its operating activities.
At the year-end, the Group had net cash of £7.0 million (2011: £1.4 million).
Derivatives and Other Instruments
Dods' financial instruments comprised bank loans, cash deposits and other items such as normal receivables and payables. The main purpose of these financial instruments is to finance the Group's day-to-day operations.
The Company entered into certain derivative transactions in order to manage the financial risk exposures arising from the Group's activities such as interest rate, liquidity and foreign currency risks. The Group's policy is that no speculative trading in derivatives is permitted.
Dods PLC
2013 PRELIMINARY RESULTS
CONSOLIDATED INCOME STATEMENT
for the 15 months ended 31 March 2013
|
|
|
|
|
|
2013 |
2011 |
|
Note |
£'000 |
£'000 |
Revenue |
|
18,773 |
15,262 |
Cost of sales |
|
(14,036) |
(10,188) |
Gross profit |
|
4,737 |
5,074 |
|
|
|
|
Administrative expenses: |
|
|
|
Non-trading items |
2 |
(1,698) |
(918) |
Amortisation of intangible assets acquired through business combinations |
|
(1,223) |
(1,170) |
Impairment |
|
(6,893) |
- |
Net administrative expenses |
|
(5,490) |
(3,999) |
Total administrative expenses |
|
(15,304) |
(6,087) |
|
|
|
|
Operating loss |
|
(10,567) |
(1,013) |
|
|
|
|
Finance income |
|
16 |
- |
Financing costs |
|
(76) |
(61) |
Loss before tax |
|
(10,627) |
(1,074) |
Income tax credit |
3 |
386 |
201 |
Loss for the year attributable to equity holders of parent company |
|
(10,241) |
(873) |
|
|
|
|
|
|
|
|
Loss per share |
|
|
|
Basic |
4 |
(3.75)p |
(0.57)p |
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the fifteen months ended 31 March 2013
|
|
Audited |
Audited |
|
|
2013 |
2011 |
|
|
£'000 |
£'000 |
Loss for the year |
|
(10,241) |
(873) |
Exchange differences on translation of foreign operations |
|
5 |
(9) |
Other comprehensive loss for the year |
|
5 |
(9) |
|
|
|
|
Total comprehensive loss for the year attributable to equity holders of parent company |
|
(10,236) |
(882) |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 March 2013
|
Note |
|
|
|
|
2013 |
2011 |
|
|
£'000 |
£'000 |
Goodwill |
|
13,282 |
19,393 |
Intangible assets |
|
14,699 |
13,941 |
Property, plant and equipment |
|
572 |
687 |
Non-current assets |
|
28,553 |
34,021 |
|
|
|
|
Inventories |
|
158 |
128 |
Trade and other receivables |
|
2,741 |
2,494 |
Cash |
|
7,037 |
1,479 |
Current assets |
|
9,936 |
4,101 |
|
|
|
|
Interest bearing loans and borrowings |
5 |
- |
(94) |
Income tax payable |
|
(43) |
(135) |
Trade and other payables |
|
(5,879) |
(4,742) |
Current liabilities |
|
(5,922) |
(4,971) |
|
|
|
|
Net current liabilities |
|
4,014 |
(870) |
|
|
|
|
Total assets less current liabilities |
|
32,567 |
33,151 |
|
|
|
|
Contingent deferred consideration |
|
(564) |
(690) |
Deferred tax liability |
|
(1,382) |
(1,511) |
Non-current liabilities |
|
1,946 |
(2,201) |
|
|
|
|
Net assets |
|
30,621 |
30,950 |
|
|
|
|
Equity attributable to equity holders of parent company |
|
|
|
Issued capital |
|
17,078 |
15,200 |
Share premium |
|
8,009 |
- |
Other reserves |
|
409 |
409 |
Retained profit |
|
5,129 |
15,350 |
Translation reserve |
|
(4) |
(9) |
Total equity |
|
30,621 |
30,950 |
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the 15 months ended 31 March 2013
|
|
|
|
|
|
|
|
Share Capital |
Share Premium |
Merger Reserve |
Retained Earnings |
Translation Reserve |
Total Shareholders' Funds |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
At 1 January 2011 |
15,200 |
- |
409 |
16,609 |
- |
32,218 |
Total comprehensive income |
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
(873) |
- |
(873) |
Other comprehensive income |
|
|
|
|
|
|
Currency translation differences |
- |
- |
- |
- |
(9) |
(18) |
Share based payment charge |
- |
- |
- |
(6) |
- |
(6) |
Dividends paid |
- |
- |
- |
(380) |
|
|
At 1 January 2012 |
15,200 |
- |
409 |
|
- |
|
Total comprehensive loss |
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
(10,241) |
- |
(10,241) |
|
|
|
|
|
|
|
Other comprehensive loss |
|
|
|
|
|
|
Currency translation differences |
- |
- |
- |
- |
5 |
5 |
Share based payment credit |
- |
- |
- |
20 |
- |
(6) |
Transactions with owners |
|
|
|
|
|
|
Issue of ordinary shares |
1,878 |
8,450 |
- |
- |
- |
10,328 |
Placing fees |
- |
(441) |
- |
- |
|
(441) |
|
|
|
|
|
|
|
At 31 March 2013 |
15,200 |
8,009 |
409 |
5,129 |
(4) |
30,621 |
CONSOLIDATED STATEMENT OF CASH FLOWS
for the 15 months ended 31 March 2013
|
Note |
|
|
|
|
2013 |
2011 |
|
|
£'000 |
£'000 |
Loss for the year |
|
(10,241) |
(873) |
Depreciation of property, plant and equipment |
|
270 |
212 |
Amortisation of intangible assets acquired through business combinations |
|
1,223 |
1,170 |
Amortisation of other intangible assets |
|
843 |
446 |
Results from discontinued operations |
|
6,893 |
- |
Share based payments (credit)/charge |
|
20 |
(6) |
Net finance costs |
|
60 |
61 |
Income tax credit |
|
(386) |
(201) |
Operating cash flows before movements in working capital |
|
(1,318) |
809 |
|
|
|
|
Change in inventories |
|
(30) |
(17) |
Change in receivables |
|
119 |
201 |
Change in payables |
|
(7) |
245 |
Cash generated by operations |
|
(1,236) |
1,238 |
Income tax paid |
|
(223) |
(16) |
Net cash from operating activities |
|
(1,459) |
1,222 |
|
|
|
|
Cash flows from investing activities |
|
|
|
Interest and similar income received |
|
16 |
- |
Acquisition of subsidiaries, net of cash acquired |
|
(1,081) |
- |
Acquisition of property, plant and equipment |
|
(112) |
(64) |
Acquisition of other intangible assets |
|
(1,530) |
(588) |
Net cash used in investing activities |
|
(2,707) |
(652) |
|
|
|
|
Cash flows from financing activities |
|
|
|
Proceeds from issue of share capital |
|
9,887 |
- |
Interest and similar expenses paid |
|
(74) |
(63) |
Repayment of borrowings |
|
(94) |
(125) |
Dividends paid |
|
- |
(380) |
Net cash used in financing activities |
|
9,719 |
(568) |
|
|
|
|
Net increase/(decrease) in cash and cash equivalents in continuing operations |
|
5,553 |
2 |
Opening cash and cash equivalents |
|
1,479 |
1,486 |
Effect of exchange rate fluctuations on cash held |
|
5 |
(9) |
Closing cash and cash equivalents in continuing operations |
6 |
7,037 |
1,479 |
|
|
|
|
Notes to the preliminary announcement
For the fifteen months ended 31 March 2013
1 Basis of Preparation
The Group financial statements consolidate those of Dods (Group) PLC and its subsidiaries (together referred to as the "Group"). The financial statements have been prepared on the basis of the accounting policies set out on pages 23 to 30 of the Dods (Group) PLC Report for 2011 which have been consistently applied.
The financial information set out above does not constitute the Group's statutory accounts for the periods ended 31 March 2013 or 31 December 2011. The financial information for 2011 is derived from the statutory accounts for 2011 which have been delivered to the registrar of companies. The auditor has reported on the 2011 accounts; their report was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The statutory accounts for the 15 months ended 31 March 2013 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the registrar of companies in due course.
As required by EU law (IAS regulation EC 1606/2002) the Group's accounts have been prepared in accordance with International Financial Reporting Standards endorsed by the International Accounting Standards Board (IASB) as adopted by the EU ("Adopted IFRS").
2 Non-trading items
|
2013 |
2011 |
|
£'000 |
£'000 |
Abortive deal costs |
930 |
618 |
Payments in lieu of notice, compensation for loss of office and associated legal fees |
383 |
- |
Redundancy and people related costs |
251 |
115 |
Dilapidations |
150 |
- |
Acquisition costs |
70 |
- |
Non-trading expenses |
40 |
173 |
Office move costs |
- |
12 |
Adjustment to deferred consideration for Politics Home |
(126) |
- |
|
1,698 |
918 |
Acquisition expenses include legal and financial due diligence costs associated with the acquisition of Politics Home and the investigation of the potential acquisition of De Havilland. Further costs have been incurred subsequent to the balance sheet date and will be recognised as appropriate during the period 31 March 2013. Acquisition expenses also includes £210,000 of allocated salary costs for senior management which have been apportioned on the basis of the time they have spent during the year on the acquisition related activity.
Redundancy and people related costs represent the effect of a Group initiative to reduce costs.
Non-trading items include expenses incurred aligning tax and business costs within the Group's offices in Brussels and Paris.
Office move costs relate to additional costs in relocating the Group to Dartmouth Street, London.
3 Taxation
|
2013 |
2011 |
|
£'000 |
£'000 |
Current tax |
|
|
Current tax on income for the year at 24.4% (2011: 26.5%) |
63 |
184 |
Adjustments in respect of prior periods |
68 |
2 |
|
131 |
186 |
Double taxation relief |
(2) |
(2) |
|
|
|
Overseas tax |
|
|
Current tax expense on income for the year at 24.4% (2011: 26.5%) |
2 |
2 |
Total current tax expense |
131 |
186 |
|
|
|
Deferred tax |
|
|
Origination and reversal of temporary differences |
(381) |
(237) |
Benefit from previously unrecognised tax losses / losses utilised |
(136) |
(150) |
Total deferred tax income |
(517) |
(387) |
|
|
|
Total income tax (credit) / charge |
(386) |
(201) |
The effect of non-trading items charged during the year is to increase the tax charge by £217,000 (2011: £136,000).
The credit to the income statement in respect of deferred tax of £517,000 (2011: £387,000) is stated after recording a deferred tax asset of £nil (2011: £nil) in respect of tax losses.
The tax charge for the period differs from the standard rate of corporation tax in the UK of 24.4% (2010: 26.5%).
The differences are explained below:
Income tax reconciliation |
|
2013 |
2011 |
|
|
£'000 |
£'000 |
(Loss) / profit before tax |
|
(10,627) |
(1,074) |
Notional tax charge at standard rate of 24.4% (2011: 26.5%) |
|
(2,593) |
(285) |
|
|
|
|
Effects of: |
|
|
|
Expenses not deductible for tax purposes |
|
2,217 |
446 |
Accelerated capital allowances and temporary differences |
|
(465) |
(372) |
Adjustments to tax charge in respect of prior periods |
|
69 |
2 |
Difference between UK and French tax rates |
|
18 |
11 |
Other |
|
4 |
(3) |
Losses for the year not relieved |
|
364 |
- |
Total income tax (credit) |
|
(386) |
(201) |
4 (Loss) / earnings per share
|
|
2013 |
2010 |
|
|
£'000 |
£'000 |
Loss attributable to shareholders |
|
(10,241) |
(873) |
Add: non-trading items, net of tax |
|
1,481 |
782 |
Add: amortisation of intangible assets acquired through business combinations |
|
1,223 |
1,170 |
(Deduct)/add: share based payment charge |
|
(6) |
(6) |
Adjusted profit attributable to shareholders post tax |
|
(7,543) |
1,073 |
|
|
|
|
|
|
|
|
Weighted average number of shares |
|
2013 |
2011 |
|
|
Ordinary Shares |
Ordinary Shares |
|
|
|
|
In issue during the year - basic |
|
151,998,453 |
151,998,453 |
Issued in the period - ordinary shares |
|
121,265,148 |
- |
In issue during the year - diluted |
|
273,263,601 |
151,998,453 |
|
|
|
|
Loss per share - basic |
|
(3.75)p |
(0.57)p |
|
|
|
|
Adjusted earnings per share (as above) - basic |
|
(2.76)p |
0.71p |
Since the Group is loss making, there is no dilutive impact of the share options.
5 Interest bearing loans and borrowings
|
|
2013 |
2010 |
|
|
£'000 |
£'000 |
Borrowings are repayable as follows: |
|
|
|
On demand or within one year |
|
- |
94 |
Between one and two years |
|
- |
- |
Between two and five years |
|
- |
- |
|
|
- |
94 |
Less: Amounts due for settlement within 12 months |
|
- |
(94) |
Amount due for settlement after 12 months |
|
- |
- |
|
|
|
Audited |
Audited |
|
|
|
2013 |
2011 |
|
|
|
£'000 |
£'000 |
Borrowings are taken out in the following currencies: |
|
|
|
|
|
Interest |
Principal |
|
|
Sterling |
LIBOR plus 3.5% |
£250,000 |
- |
94 |
Total |
|
|
- |
94 |
The weighted average interest rate paid on the bank loans was 3.95% (2010: 5.7%).
The Sterling loan of £250,000 represents a loan taken out in 2011 with Bank of Scotland to finance the fit-out costs of the new office premises at 21 Dartmouth Street. The last repayment was in December 2012.
In connection with the Group's banking and borrowing facilities with the Bank of Scotland, the Company and its UK subsidiary undertakings have entered into a cross guarantee, which gives a fixed and floating charge over the assets of the UK trading companies of the Group.
The Group estimates the fair value of its loans to be the same as their carrying amount.
6 Reconciliation of net cash
|
At 1 January 2012 |
Cash flow |
Exchange movement |
At 31 March 2013 |
|
£'000 |
£'000 |
£'000 |
£'000 |
Cash and cash equivalents |
1,479 |
5,553 |
5 |
7,037 |
|
|
|
|
|
Debt due within one year |
(94) |
94 |
- |
- |
|
|
|
|
|
|
1,385 |
5,647 |
5 |
7,037 |
Cautionary statement
This press release may contain forward-looking statements based on current expectations or beliefs, as well as assumptions about future events. In that regard, such statements are:
· inherently predictive and speculative and involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future; and
· not a guarantee of future performance and are subject to factors that could cause the actual results to differ materially from those expressed or implied.
The name Dods is a trademark of Dods (Group) PLC. All other trademarks mentioned herein are the property of Dods' respective subsidiary companies. All rights reserved.
The Dods (Group) PLC 2013 Report and Financial Statements are being posted to shareholders on 28 August 2013 and will be available to the public upon request at the Company's registered office: 21 Dartmouth Street, London, SW1H 9BP.
Copies of recent announcements, including this Preliminary Results announcement, and additional information on Dods, can be found at www.Dodsgroupplc.com.
Schedule A (Unaudited)
Reconciliation between operating profit and non-statutory performance measure
The following tables reconcile operating profit as stated in the income statement to Adjusted EBITDA, a non-statutory measure which the Directors believe is the most appropriate measure in assessing the performance of the Group.
Adjusted EBITDA is defined by the Directors as being earnings before interest, tax, depreciation, amortisation of assets acquired through business combinations, and non-trading items. Plate cost amortisation is included within cost of sales of the Education Division as management believes this is an appropriate classification.
15 months ended 31 March 2013 |
Operating loss |
Depreciation* |
Amortisation and impairment of intangible assets |
Non-trading Items** |
Adjusted EBITDA |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Political |
|
|
|
|
|
Political |
(9,030) |
1,095 |
8,116 |
1,095 |
1,276 |
|
|
|
|
|
|
Head Office |
(1,537) |
16 |
- |
623 |
(898) |
Results from continuing operations |
(10,567) |
1,111 |
8,116 |
1,718 |
378 |
Year ended 31 December 2011 |
Operating loss |
Depreciation* |
Amortisation and impairment of intangible assets |
Non-trading Items** |
Adjusted EBITDA |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Political |
|
|
|
|
|
Political |
(228) |
618 |
1,030 |
1,059 |
2,479 |
Learning |
(67) |
24 |
140 |
36 |
133 |
|
(295) |
642 |
1,170 |
1,095 |
2,612 |
Head Office |
(718) |
16 |
- |
(5) |
(707) |
Results from continuing operations |
(1,013) |
658 |
1,170 |
1,090 |
1,905 |
Education (discontinued) |
(228) |
618 |
1,030 |
1,059 |
2,479 |
|
(67) |
24 |
140 |
36 |
133 |
* including amortisation of software shown within intangibles.
** including share based payments charges/(credits) and profit on disposal of subsidiary undertaking.