Half Yearly Report

RNS Number : 3888N

Dods (Group) PLC

28 September 2012

Dods (Group) PLC

Interim Results for the six months ended 30 June 2012

Financial Highlights

· Revenues £6.0m (2011: £6.1m).

· Gross Profit £1.3m (2011: £1.5m).

· Loss before tax £2.8m (2011: £1.5m).

· Abortive deal costs and compensation for loss of office £1.3m (2011: £0.1m).

· Loss before tax and abortive deal costs and compensation for loss of office £1.5m (2011: £1.4m).

· Placing raised £4.2m before expenses (further placing in September 2012 raised £6.1m before expenses).

Operational Highlights

· Continued growth of information and intelligence products.

· Investment in more sales staff.

· Initiated £1.3m investment in technology platform.

· Strong supportive shareholders.

Kevin Hand, Chairman of Dods (Group) PLC, commented:

"Against the uncertain economic environment our first half of the year saw us produce satisfactory results. Our information monitoring and digital services continue to drive forward, but we have had a difficult period in our print products, along with other publishers in this area. Information monitoring grew 20% in the half year and our training and conference business grew at 2%.

I am pleased to announce Keith Sadler has been appointed Chief Executive Officer. Keith has many years of experience in the media industry and B2B publishing both as finance director and CEO. His complementary skills in finance and management will help deliver the growth strategy we as a Board have set ourselves.

We have a clear strategy to grow Dods in the future through a combination of acquisition and investment in our products and infrastructure. We will identify appropriate acquisition targets that enhance our offering. We placed shares with existing shareholders raising £10.3m before expenses, to allow us to execute on our growth strategy. Also, we are making significant investments in our people and products which will enable us to become the leading political communications and information Group"

For further information, please contact:

Dods

Keith Sadler, Chief Executive Officer 020 7593 5500

Kevin Hand, Non-Executive Chairman

Cenkos

Adrian Hargrave 020 7397 8922

Chairman's Statement

Against a continuing challenging environment I am pleased to report the first half of 2012 to 30 June 2012 saw revenues of £6.0m (2010: £6.1m). The mix of our revenues continues to change with growth from our information and monitoring services growing by 20% whereas the traditional print advertising market continues to find it difficult. This was pronounced in our European publications where there was a halving of print revenue.

Gross profit for the six months to 30 June 2012 was £1.3m compared to £1.5m for the comparative period. The effect on margin is the result of the decision to invest in products we offer.

The contract with Capita and Civil Service Learning, to produce training and education services, has still to produce the activity levels of previous years. Due to a strong first quarter under the old contract, revenues are ahead of the comparative period, however during the second quarter of this period revenues have been lower. Together with the opportunity of the Civil Service Review Plan and the inevitable increase in Civil Service Learning we are confident this part of our business will generate improved revenues in the near future.

The operating loss for the six months to 30 June 2012 increased from £1.4m to £2.8m. This increase was as a result of abortive transaction costs, placing fees and compensation for loss of office of some £1.3m. The abortive deal costs related to the potential acquisition of De Havilland which was reviewed by the Office of Fair Trading ("OFT") and then referred to the Competition Commission. The potential acquisition had been under review by the Company and the OFT for nearly 12 months. On referral by the OFT to the Competition Commission the Board decided not pursue the transaction. In total professional fees of £1.2m were expended on abortive transactions, £0.8m was charged in the current period.

Underlying administrative costs remain at a similar level to the comparative period.

The Board have authorised the investment in a combined technology platform that will integrate all of our information, content and data on to a single platform. This will allow us to develop and bring to market products in a quicker and more efficient manner. The budget for this has been set at £1.3m.

In addition we will continue to invest in our sales teams and look for opportunities to expand our product range in the UK and internationally.

In April 2012 the Company successfully placed shares with existing shareholders raising £4.2m. A further placing took place in September 2012 where we raised a further £6.1m before expenses. We are pleased we have such supportive shareholders and means the Group has the ability to complete future transactions and investments with a financially secure balance sheet.

The basic loss per share was 1.47 pence (2011: 0.86 pence).

As result of operating performance and the placing, at 30^th June 2012, net cash in the Group amounted to £4.8m (2011: £0.8m).

We have changed our year end from 31 December to 31 March. This will achieve a more even split to our performance and give shareholders greater visibility of the financial outlook for the Group at the interim review. Our results for the fifteen months to 31 March 2013 will be reported in July 2013.

Board Changes

Gerry Murray stepped down as Chief Executive Officer and as a Director of Dods Group Plc on 28 June 2012. I would like to thank Gerry for steering the Group over the last seven years and wish him well in his future endeavours. Gerry will become Honorary Publisher of The House magazine, our flagship title.

Richard Flaye, Non-Executive Director, has also decided to step down from the Board as of 29 December 2012. Richard has served on the Board for six years. I would also like to thank Richard for his contribution to the Board and management of Dods Group.

I am delighted to announce the appointment of Keith Sadler as Chief Executive Officer with immediate effect. Keith joined the Board in April as Group Finance Director. Keith has a wealth of experience in the media industry both in finance and management roles. Keith was Chief Executive Officer of SPG Media Group plc, a business to business digital publisher and events organiser.

Outlook

Dods' business continues to be heavily weighted to the second half of the financial year. Civil Service Live was successfully completed in July 2012 with revenues up 33%, however due to the economic environment the Party Conference fringes are unlikely to generate the levels of revenues as last year.

We have a clear growth strategy for the Group through a combination of acquisition and investment in our products and infrastructure. The balance sheet is financially robust with significant cash resources. It is our intention to grow the Group to become the leading political communications company. The Board are confident about the future prospects for the Group.

Kevin Hand

Chairman

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF YEAR REPORT

We confirm that to the best of our knowledge:

1. the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

2. the interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

By order of the Board of Dods (Group) PLC

Keith Sadler

Group Finance Director

DODS (GROUP) PLC
CONSOLIDATED INCOME STATEMENT


			For the six months ended 30 June 2012	For the six months ended 30 June 2011	For the year ended 31 December 2011



			Unaudited	Unaudited	Audited
		Note	£'000	£'000	£'000
	Revenue	3	5,986	6,093	15,262
	Cost of sales		(4,654)	(4,586)	(10,188)
	Gross profit		1,332	1,507	5,074

	Administrative expenses:
	Non-trading items	4	(1,289)	(111)	(918)
	Amortisation of intangible assets acquired through business combinations		(489)	(638)	(1,170)
	Net administrative expenses		(2,289)	(2,172)	(3,999)
	Total administrative expenses		(4,067)	(2,921)	(6,087)

	Operating loss		(2,735)	(1,414)	(1,013)
	Financing costs		(65)	(44)	(61)
	Loss before tax		(2,800)	(1,458)	(1,074)
	Income tax credit	5	23	156	201
	Loss for the period		(2,777)	(1,302)	(873)
	Loss per share
	Basic	6	(1.47 p)	(0.86 p)	(0.57 p)

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


		For the six months ended 30 June 2012	For the six months ended 30 June 2011	For the year ended 31 December 2011



		Unaudited	Unaudited	Audited
		£'000	£'000	£'000

	Loss for the period	(2,777)	(1,302)	(873)
	Exchange differences on translation of foreign operations	(9)	18	(9)
	Other comprehensive (loss)/income for the period	(9)	18	(9)

	Total comprehensive loss in the period attributable to equity holders of parent company	(2,786)	(1,284)	(882)

DODS (GROUP) PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
			As at	As at	As at
			30 June 2012	30 June 2011	31 December 2011
			Unaudited	Unaudited	Audited
		Note	£'000	£'000	£'000

	Goodwill	7	19,393	18,906	19,393
	Intangible assets	8	13,429	14,228	13,941
	Property, plant and equipment		627	724	687
	Non-current assets		33,449	33,858	34,021

	Inventories		140	130	128
	Trade and other receivables		3,111	2,456	2,494
	Cash		4,825	788	1,479
	Income tax receivable		-	61	-
	Current assets		8,076	3,435	4,101

	Interest bearing loans and borrowings		(31)	(125)	(94)
	Income tax payable		(103)	-	(135)
	Trade and other payables		(7,268)	(4,934)	(4,742)
	Current liabilities		(7,402)	(5,059)	(4,971)

	Net current assets/(liabilities)		674	(1,624)	(870)

	Total assets less current liabilities		34,123	32,234	33,151

	Interest bearing loans and borrowings		-	(31)	-
	Contingent deferred consideration		(690)	-	(690)
	Deferred tax liability		(1,396)	(1,649)	(1,511)
	Non current liabilities		(2,086)	(1,680)	(2,201)

	Net assets		32,037	30,554	30,950

	Equity attributable to equity holders of parent
	Issued capital		15,970	15,200	15,200
	Share premium		3,112	-	-
	Other reserves		409	409	409
	Retained loss		12,564	14,927	15,350
	Translation reserve		(18)	18	(9)

	Total equity		32,037	30,554	30,950

DODS (GROUP) PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

		Unaudited Share capital	Unaudited Share premium	Unaudited Merger reserve	Unaudited Retained earnings	Unaudited Translation reserve	Unaudited Total shareholders' funds
		£'000	£'000	£'000	£'000	£'000	£'000

	At 1 January 2011	15,200	-	409	16,609	-	32,218
	Total comprehensive loss
	Loss for the year	-	-	-	(873)	-	(873)
	Other comprehensive loss
	Currency translation differences	-	-	-	-	(9)	(9)
	Share based payment charge	-	-	-	(6)	-	(6)
	Dividends paid	-	-	-	(380)		(380)
	At 1 January 2012	15,200	-	409	15,350	(9)	30,950
	Total comprehensive loss
	Loss for the year	-	-	-	(2,777)	-	(2,777)
	Other comprehensive loss
	Currency translation differences	-	-	-	(9)	(9)	(18)
	Issue of ordinary shares	770	3,463				4,233
	Placing fees	-	(351)	-	-	-	(351)
	At 30 June 2012	15,970	3,463	409	12,270	(18)	32,037

On 5 April 2012, Dods (Group) PLC issued and allotted 76,950,944 ordinary shares which were admitted to trading on 5 April 2012.

On 25 July 2012, Dods (Group) PLC announced that it was proposing to raise approximately £6.1 million (before expenses) by the issue of 110,821,556 new Ordinary Shares ("Placing Shares") at a price of 5.5 pence each (the "Placing") to Lord Ashcroft KCMG.

DODS (GROUP) PLC
CONSOLIDATED STATEMENT OF CASH FLOWS
			For the six months ended 30 June 2012 Unaudited	For the six months ended 30 June 2011 Unaudited	For the year ended 31 December 2011 Audited




		Note	£'000	£'000	£'000
	Cash flows from operating activities
	Loss for the period		(2,777)	(1,302)	(873)
	Depreciation of property, plant and equipment		120	154	212
	Amortisation of intangible assets acquired through business combinations		489	638	1,170
	Amortisation of other intangible assets		269	216	446
	Share based payments credit		-	-	(6)
	Net finance costs		65	44	61
	Income tax credit		(23)	(156)	(201)
	Operating cash flows before movements in working capital		(1,857)	(406)	809

	Change in inventories		(12)	(38)	(17)
	Change in receivables		(615)	189	201
	Change in payables		2,495	534	245
	Cash generated by operations		11	279	1,238

	Income tax paid		(124)	(25)	(16)
	Net cash (used in)/from operating activities		(113)	254	1,222
	Cash flows from investing activities
	Interest and similar income received		-	(29)	-
	Acquisition of property, plant and equipment		(58)	(44)	(64)
	Acquisition of other intangible assets		(246)	(422)	(588)
	Net cash used in investing activities		(304)	(495)	(652)
	Cash flows from financing activities
	Proceeds from issue of share capital		3,882	-	-
	Interest and similar expenses paid		(37)	13	(63)
	Repayment of borrowings		(63)	(63)	(125)
	Dividends paid		-	(380)	(380)
	Net cash from/(used in) financing activities		3,782	(430)	(568)

	Net increase/(decrease) in cash and cash equivalents		3,365	(671)	2
	Opening cash and cash equivalents		1,479	1,486	1,486
	Effect of exchange rate fluctuations on cash held		(19)	(27)	(9)
	Closing cash and cash equivalents	9	4,825	788	1,479

DODS (GROUP) PLC

Notes to the Accounts

30 June 2012

1 Statement of Accounting Policies

The interim financial statements have been prepared in accordance with the recognition and measurement principles of IFRSs as adopted by the EU, applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2011.

Basis of preparation

The Board continuously assesses and monitors the key risks of the business. Despite the current uncertainty in the global economy, the key risks that could affect the Group's medium term performance, and the factors which mitigate these risks have not significantly changed from those set out in the Group's Annual Report for 2011. The Operating Review includes consideration of uncertainties affecting the Group in the remaining six months of the year. The Board has reviewed forecasts and remains satisfied with the Group's funding and liquidity position. On the basis of its forecasts and available facilities and cash balances held on the balance sheet, the Board has concluded that the going concern basis of preparation continues to be appropriate.

2 Statement of compliance

These Condensed Consolidated Financial Statements are prepared in accordance with IAS 34: Interim Financial Reporting as endorsed and adopted for use in the European Union and Disclosure and Transparency Rules (DTR) of the Financial Services Authority. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the Consolidated Financial Statements of the Group as at and for the year ended 31 December 2011. The comparative figures for the financial year ended 31 December 2011 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors and delivered to the Registrar of Companies.

The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditors 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.

3 Segment information

Segment information is presented in respect of the Group's operating segments. The operating segments have been identified on the basis of internal reports about components of the Group that are regularly reviewed by the "chief operation decision maker" to allocate resources to the segments and to assess their performance.

	Six months ended 30 June 2012 Unaudited	Six months ended 30 June 2011 Unaudited	Year ended 31 December 2011 Unaudited



Revenue	£'000	£'000	£'000
Political	5,986	6,093	15,262
Total revenue	5,986	6,093	15,262

Revenue
United Kingdom	4,619	4,663	11,350
Continental Europe and rest of the world	1,367	1,430	3,912
	5,986	6,093	15,262


	Six months ended 30 June 2012 Unaudited	Six months ended 30 June 2011 Unaudited	Year ended 31 December 2011 Unaudited



EBITDA from operations*	£'000	£'000	£'000
Political	(78)	171	2,612
Head Office	(488)	(466)	(707)
Total EBITDA	(566)	(295)	1,733

*EBITDA is defined by the Directors as being earnings before interest, tax, depreciation, amortisation of intangible assets acquire through business combinations, and non-trading items.

A reconciliation between EBITDA and operating profit is shown in Schedule A.

4	Non-trading items
		Six months ended 30 June 2012 Unaudited	Six months ended 30 June 2011 Unaudited	Year ended 31 December 2011 Audited



		£'000	£'000	£'000
	Abortive deal costs	827	-	-
	Redundancy and people related costs	459	33	115
	Acquisition costs	-	20	618
	Disposal costs	8	35	-
	Non trading expenses	2	-	173
	Office move costs	(7)	23	12
		1,289	111	918

Redundancy and people related costs include £377,000 in respect of Gerry Murray's (former Chief Executive Officer) compensation for loss of office.

Abortive deal costs include legal and financial due diligence costs in respect of the aborted De Havilland acquisition. The Company decided not to pursue the acquisition of the business of the De Havilland Political Intelligence division of Emap Limited following the referral to the Competition Commission by the Office of Fair Trading.

5 Taxation

The taxation charge for the six months ended 30 June 2012 is based on the expected annual tax rate.

6	Normalised (loss)/profit attributable to shareholders post tax
		Six months ended 30 June 2012 Unaudited	Six months ended 30 June 2011 Unaudited	Year ended 31 December 2011 Audited



		£'000	£'000	£'000

	Loss attributable to shareholders	(2,777)	(1,302)	(873)
	Add: non-trading items net of tax	980	80	782
	Add: amortisation of intangible assets acquired
	through business combinations	489	638	1,170
	Less: share based payment credit	-	-	(6)
	Adjusted (loss)/profit attributable to shareholders	(1,308)	(584)	1,073

	Shares	Shares	Shares
Weighted average number of shares
In issue at start of the year - ordinary shares	151,998,453	151,998,453	151,998,453
Issued in the year - ordinary shares	36,361,435	-	-
In issue at 30 June 2012 - ordinary shares	188,359,888	151,998,453	151,998,453

Loss per share - ordinary shares (pence)	(1.47)	(0.86)	(0.57)

Normalised (loss)/earnings per ordinary share before non-trading items and amortisation of intangible assets acquired through business combinations (pence)	(0.69)	(0.38)	0.71

Since the Group is loss making, there is not dilutive impact of the share options.

On 7 February 2012 each existing ordinary share of 10p in the authorised share capital of the company was subdivided into 10 ordinary shares of 1p each and 10 deferred shares of 9p each.

The 1p ordinary shares have the same rights (including voting and dividend rights and rights on a return of capital) as the previous 10p ordinary shares. Holders of the 9p deferred shares confer no right to any dividend or any other distribution (other than on a winding up), confer no right to receive notice of, or to attend or vote at, general meetings of the Company, and on a winding up confer the rights to be paid out of the assets of the Company available for distribution an amount equal to 1p for all the deferred shares prior to the surplus being distributed to the holders of ordinary shares, but do not confer any right to participate in any surplus assets of the Company, the Company shall not be obliged to issue share certificates in respect of the deferred shares.

On 5 April 2012, Dods (Group) PLC issued and allotted 76,950,944 ordinary shares which were admitted to trading on 5 April 2012.

7	Goodwill
		Six months ended 30 June 2012 Unaudited	Six months ended 30 June 2011 Unaudited	Year ended 31 December 2011 Audited



		£'000	£'000	£'000
	Cost & Net book value
	Opening balance	19,393	18,906	18,906
	Additions	-	-	487
	Closing balance	19,393	18,906	19,393
8	Intangible fixed assets
		Six months ended 30 June 2012 Unaudited	Six months ended 30 June 2011 Unaudited	Year ended 31 December 2011 Audited



	Intangible assets acquired through business combinations	£'000	£'000	£'000
	Cost
	Opening balance	22,921	22,612	22,612
	Additions	-	-	309
	Closing balance	22,921	22,612	22,921
	Amortisation
	Opening balance	9,917	8,747	8,747
	Charge for the period	489	638	1,170
	Closing balance	10,406	9,385	9,917

	Net book value
	Opening balance	13,004	13,865	13,865

	Closing balance	12,515	13,227	13,004

	Other intangible assets
	Net book value
	Opening balance	937	795	795

	Closing balance	914	1,001	937

	Net intangible assets
	Opening balance	13,941	14,660	14,660

	Closing balance	13,429	14,228	13,941

Other intangible assets comprise IT software and plate costs for revision guide material.


9	Analysis of net debt
		At 1 January 2012	Cash flow	Exchange Movement	At 30 June 2012
		£'000	£'000	£'000	£'000

	Cash at bank and in hand	1,479	3,365	(19)	4,825
	Debt due within one year	(94)	63	-	(31)
		1,385	3,428	(19)	4,794


10	Post balance sheet events


	Schedule A

Reconciliation between operating profit and non-statutory measure

The following tables reconcile operating profit as stated above to EBITDA, a non-statutory measure which the Directors believe is the most appropriate measure in assessing the performance of the Group.

EBITDA is defined by the Directors as being earnings before interest, tax, depreciation, amortisation of assets acquired through business combinations, and non-trading items.

Six months ended 30 June 2012	Operating (loss)	Depreciation*	Amortisation of intangible assets	Non-trading items	EBITDA



	£'000	£'000	£'000	£'000	£'000

Political	(2,206)	384	489	904	(78)
Head Office	(823)	7	-	385	(488)
Group total	(3,029)	391	489	1,289	(566)

Year ended 31 December 2011	Operating (loss)/profit	Depreciation*	Amortisation of intangible assets	Non-trading items	EBITDA
	£'000	£'000	£'000	£'000	£'000

Political	(295)	642	1,170	923	2,440
Head Office	(718)	16	-	(5)	(707)
Group total	(1,013)	658	1,170	918	1,733

Six months ended 30 June 2011	Operating (loss)/profit	Depreciation*	Amortisation of intangible assets	Non-trading items	EBITDA
	£'000	£'000	£'000	£'000	£'000

Political	(884)	361	638	56	171
Head Office	(530)	9	-	55	(466)
Group total	(1,414)	370	638	111	(295)

*including amortisation of software shown within intangibles.

This information is provided by RNS

The company news service from the London Stock Exchange

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