Trading Update

RNS Number : 5269H

Asia Digital Holdings PLC

31 May 2011

 



Press Release

31 May 2011

Asia Digital Holdings Plc

("ADH" or the "Company")

Receipt of Consideration from Disposal of DGM Australia

Disposal of the AKTIV business

Trading Update

Asia Digital Holdings plc (AIM: ADH.L), an independent online marketing group (the "Group"), is pleased to give the following trading update.

Receipt of Third Tranche of Deferred Consideration

The Company confirms that it has now satisfied all contractual requirements from its disposal of the DGM operation in Australia following which it has received the third tranche of consideration amounting to AU$500,000 (c.£325,000).

From this third tranche of consideration certain expenses have been deducted at source, or will be settled imminently, leading to a net receipt of AU$295,000 or (c.£192,000), marginally more than announced in the Preliminary Results on 5 April 2011.

In satisfying the residual contractual requirements the Company anticipates receiving the last deferred payment of an additional AU$500,000 (c.£325,000), in November 2011. The net cash expected from the final deferred consideration payment due in November is AU$428,000 (c.£278,000).

Disposal of AKTIV

As announced in the Preliminary Results of the Group on 5 April 2011, the Board has undertaken a strategic review of the AKTIV business.  AKTIV is a digital advertising sales house that represents media owners, selling their advertising space to global agencies and offering its customers administrative and commercial economies of scale. As this business had not delivered the expected upturn in trade through the first quarter of 2011, the Company has agreed to the existing AKTIV management team taking over that business in exchange for them taking over all related running costs with effect from the start of the second quarter. 

AKTIV represented 20% of Group continuing revenues in 2010, and retained 20% of Group operational staff during 2010. However, the business did not deliver consistent profitability through the last quarter of 2010 and in the first quarter of 2011 the AKTIV business made a loss of £91,000.

The decision to dispose of the AKTIV business has made a positive impact on the trading results of the Group and the board of the Company expects this to improve the prospects of a return to Group profitability.

Trading Update

The Board continues to maintain tight control over the Company's working capital situation, and is pleased to report that during the first two quarters the Company's cashflow has been better than anticipated with accelerated receipts of certain receivables, particularly in the India operation.

Current trading is as expected.  In China within the second quarter the Group has retained a sales function and as a result has a healthy pipeline of new business in addition to having three clients live.  In Singapore ADH has seen steady improvement in contribution on the back of the appointment of a new managing director whilst in India, despite an increasingly competitive environment the Group has maintained stable profitability and is looking at further expansion of the local offering. 

ADH's central cost base continues to benefit from the material cost savings initiatives announced previously and the disposal of the AKTIV business will drive further reductions.

Further details on current trading will be given in the pre-close trading update which will be issued in July 2011. 

Adrian Moss, Chief Executive of Asia Digital Holdings plc, commented:  "The Board is pleased with the progress that has been made during the period.  Having received the third tranche of consideration from the sale of our Australian operation, and with our ongoing careful management of cash, the Company is in a better cash position to pursue its commercial objectives."

- Ends -

For further information, please contact:

Asia Digital Holdings plc
Adrian Moss, Chief Executive
	www.adhplc.asia

Northland Capital Partners Limited
Gavin Burnell / Rod Venables	Tel:  [phone]
Katie Shelton (Corporate Broking)	www.northlandcp.co.uk

Abchurch Communications
Julian Bosdet / Joanne Shears / Claire Dickinson	Tel: [phone]
[e-mail]	www.abchurch-group.com

 

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