INTERACTIVE PUBLISHING PLC
('Interactive' or 'the Company')
FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2008
Business highlights in the year:
- Admission to PLUS Markets on 20 February 2008 and acquisition of Trojan Publishing Limited for
a total consideration of up to £3.5m.
- Acquisition of 4 major titles and launch of a number of title related DVDs
Post balance sheet events:
- Launch of 6 puzzle titles into Germany and 4 puzzle titles into Italy.
CHAIRMAN'S STATEMENT
I am pleased to be able to make this report to you as Chairman of the Company and of the Group.
Review of Activities
Interactive Publishing plc ("Interactive" or "The Company") was incorporated on 3 October 2007
for the purpose of making investments in the publishing and marketing services sectors, and was
admitted to PLUS-Markets on 20 February 2008.
Immediately prior to Admission, the Company acquired the entire issued share capital of Trojan
Publishing Limited ("Trojan") for a total consideration of up to £3,500,000. The consideration
payable under the agreement was an initial consideration of £2,500,000, satisfied by the
allotment of 83,333,333 new ordinary shares by the Company at 3 pence per share and a deferred
consideration of up to £1,000,000, to be satisfied by the issue of 71 new ordinary shares in
the Company for each £1 of pre-tax and pre-amortisation profit earned by Trojan during the
accounting year ending 30 June 2008. The maximum number of these new ordinary shares (to be
issued at 3 pence per share) is 33,333,333 and the number due for the period ended 30 June 2008
has been calculated as 17,000,000.
Also on Admission, the Company raised £700,000 before expenses through the subscription of
35,000,000 new ordinary shares at 2 pence per ordinary share. The funds were raised to provide
working capital to continue the aggressive expansion of Trojan's portfolio through the
acquisition of magazine titles, primarily in the consumer lifestyle sector.
Trojan is a London-based magazine publishing company that was formed in June 2006 as a
publishing investment vehicle with the strategy of building a publishing group engaged in the
production of both magazine and digital content. It has a portfolio of 50 magazines, of which
18 are monthlies, 8 are printed every 24 weeks, 9 are bi-monthly and 3 are quarterly.
The major titles are "Women's Fitness", "What Diesel", "Fresh" (a consumer lifestyle magazine),
"Flush" (an online poker magazine) and "Attitude" (the number one gay lifestyle magazine).
In the period since its acquisition by Interactive, Trojan has applied economies of scale to its
diverse portfolio and has streamlined its activities to exploit the critical mass now being
achieved. The directors' strategy for Trojan is for it to focus heavily on the consumer based
brands whilst nurturing the adult portfolio to ensure that high revenues and profitability are
maintained in this area.
In the period under review, the Group has made the following additions to its portfolio of
titles:
* Flush Magazine (acquired in July 2007 under license)
* Desire Magazine (acquired November 2007)
* Launch of new two new DVD titles (January 2008)
* Launch of Forum DVD (March 2008)
* Attitude Magazine (acquired April 2008)
Attitude is the number-one gay lifestyle magazine in Europe and has delivered some big
exclusives since it commenced publication, including cover shoots for David Beckham, Madonna,
Kylie Minogue and Tony Blair. Circulation numbers and advertising revenues have been
substantially increased on this title during the short period of ownership.
The strategy for each magazine title in the portfolio, is to develop a unique brand that will
generate new revenue streams, thereby increasing the longevity of the life of the title. As
titles can be published over several decades, there is a real benefit to be gained through the
branding process. The key components in creating a brand are (a) the ability of the consumer to
visualise the magazine experience without being reliant on the editorial content and (b) an
understanding of the target audience and the ability to interact with that audience.
Trojan has also developed a social networking platform that is being rolled out across all of
it's key brands. In creating this interactive experience, a separation has been maintained
between the user and the magazine in order to maintain traditional revenue streams whilst
adding, to the traditional stream, new revenue streams flowing from the platform. It is
expected that this will allow the business to further maximise its revenues from each title.
Early indications show strong niche interest for the social networking experience developed for
Attitude, the first platform to be launched, with four thousand members being registered within
the first twelve weeks.
The creation of brands built around the magazine titles is expected to lead to licensing
opportunities in other countries. Senior management from Trojan were in attendance at the 2008
world magazine marketplace licensing conference, held in Moscow during November 2008, and are
now following up the considerable interest from publishers around the world in key brands such
as Fresh and Women's Fitness. Trojan expects to announce its first licensed magazine and social
networking editions during early 2009.
Due to the uncertainty in the current global financial markets, Trojan is continuing to develop
new revenue platforms in order to neutralise any downturn in consumer advertising spend. To
facilitate this, emphasis has been placed on the development of focused and targeted data
capture from each brand's core readership to further drive new revenue streams. This enables
individually-tailored approaches for current and potential advertisers that move away from
traditional page-based advertising and towards multimedia-based advertising campaigns
encompassing magazines, sponsorship, direct marketing and new media motion advertising.
Trojan intends to provide this multi-platform media experience to its ancillary revenue-based
partners in addition to its consumer audience.
The directors intend to keep the development of new revenue streams under constant review to
ensure that the Group is not overly dependent upon one revenue source and to ensure that the
effects of a downturn in one revenue source are minimal.
Key Performance Indicators
The principal performance indicator used to measure the progress of the Group's business
activities is the contribution generated by each magazine title or brand. This is assessed by
reference to direct costs associated with the production and maintenance of that title or brand.
The directors keep the performance of each title under constant review and take a commercial
view, based on research and their own industry experience, of the future contribution to the
business that, in their opinion, each title or brand is likely to make.
Principal risks and uncertainties
The principal risks and uncertainties experienced by the Group are as follows:
* The continued attraction, retention and motivation of qualified employees to provide a high
quality of content in the publication and to drive circulation, advertising and other revenues;
* Changing customer and market demands, and changes in the competitive environment in which the
business operates
* The effect of current global economic conditions on the level of consumer spend, particularly
on advertising revenues;
* The ability of senior management to continue to identify suitable targets for future
acquisitions and to develop complimentary revenue streams.
Post balance sheet events
In July 2008, the Group launched 6 of its titles into the German market and this was followed by
the launch of 4 titles in Italy in September 2008.
Financial Overview
The financial statements have been prepared using the reverse accounting provisions of
International Financial Reporting Standard 3 ("IFRS3"). The financial statements include the
results of Trojan Publishing Limited from 1 July 2007 to 30 June 2008 and the results of
Interactive Publishing plc from 20 February 2008 (the acquisition date) to 30 June 2008. The
comparatives required under IFRS3 show the prior year results for Trojan Publishing Limited only
and are for the accounting year prior to its acquisition by the Company.
The only revenues in the Company are management charges to Trojan, its wholly-owned subsidiary, to
cover services supplied and the use of magazines titles. Turnover in Trojan, which comprises all
of the external turnover in the group, has increased by 57.2% from £3.80m to £5.98m over the
preceding year. Group profit from operations was £278,174, compared to a loss of £425,996 in the
comparative period. The profit before tax and basic earnings per share for the period amounted to
£249,919 and 0.16p respectively. At 30 June 2008, shareholders' funds were £2,237,919. The
Directors do not propose to declare a dividend.
During the period under review, the Group has substantially reduced its liabilities in respect of
titles acquired since incorporation and, during the next twelve months, these are expected to be
reduced to minimal levels (excluding any new acquisitions that may occur). This is expected to
result in surplus cash balances arising.
The Company issued £161,500 of convertible loan notes on 24 April 2008. The loan notes carry
interest at a rate of 8% and are repayable on 24 April 2009.
Outlook
The Company will continue to build up its already impressive stable of quality consumer titles and
expects to announce further acquisitions over the coming months.
The Directors wish to thank the staff and advisers of Interactive for their efforts during the
year.
Peter Jay
Chairman
CONSOLIDATED INCOME STATEMENT
For The Year Ended 30 June 2008
Year ended Year ended
30.06.08 30.06.07
£ £
REVENUE 5,986,665 3,802,597
Cost of sales (4,431,012) (2,669,002)
_________ _________
GROSS PROFIT 1,555,653 1,133,595
Administrative expenses (1,277,479) (1,564,091)
Other operating income - 4,500
_________ _________
PROFIT/(LOSS) FROM OPERATIONS 278,174 (425,996)
Finance revenue 275 643
Finance costs (28,530) (3,826)
_________ _________
PROFIT/(LOSS) BEFORE TAX 249,919 (429,179)
Taxation (79,357) 122,000
_________ _________
PROFIT/(LOSS) FOR THE YEAR 170,562 (307,179)
_________ _________
Basic earnings/(loss) per share 0.16p (0.69)p
Diluted earnings/(loss) per share 0.14p (0.69)p
CONSOLIDATED BALANCE SHEET
As at 30 June 2008
30.06.08 30.06.07
£ £
Non-current assets
Intangible assets 3,268,425 1,335,152
Property, plant and equipment 76,794 59,784
Deferred tax 42,643 122,000
_______ _______
3,387,862 1,516,936
Current assets
Trade and other receivables 1,303,167 531,776
Cash and cash equivalents 3,426 7,451
_______ _______
1,306,593 539,227
Current liabilities
Trade and other payables (2,065,413) (1,979,482)
Bank overdraft (130,448) (21,972)
Convertible loan notes (161,500) -
Commitments under finance leases
and hire purchase obligations - (4,419)
________ ________
(2,357,361) (2,005,873)
________ ________
Net current liabilities (1,050,768) (1,466,646)
________ ________
Total assets less current liabilities 2,337,094 50,290
Non-current liabilities
Other payables (99,175) (356,469)
________ ________
NET ASSETS/(LIABILITIES) 2,237,919 (306,179)
________ ________
Equity
Issued share capital 367,916 1,000
Share premium account 167,502 -
Shares to be issued reserve 777,500 -
Merger reserve 2,291,667 -
Reverse acquisition reverse (1,230,049) -
Retained losses (136,617) (307,179)
________ ________
SHAREHOLDERS' FUNDS/(LIABILITIES) 2,237,919 (306,179)
________ ________
CONSOLIDATED CASH FLOW STATEMENT
For The Year Ended 30 June 2008
Period ended Year ended
30.06.08 30.06.07
£ £
Cash flow from operating activities
Profit/(loss) before taxation 249,919 (425,996)
Adjusted for:
Finance revenue (275) (643)
Finance costs 28,530 3,826
Depreciation 17,416 11,202
Increase in trade and other receivables (786,062) (505,231)
Increase in trade and other payables 21,437 1,531,730
________ ________
Net cash outflow from operating activities (469,035) 614,888
Cash flows from investing activities
Purchase of intangible fixed assets (358,323) (558,471)
Purchase of property, plant & equipment (34,426) (53,669)
Purchase of subsidiary undertakings - (29,538)
Net cash acquired with subsidiaries - 25,238
Finance revenue 275 643
Finance costs (28,530) (3,826)
________ ________
Net cash outflow from investing activities (421,004) (619,623)
________ ________
Cash flows from financing activities
Issue of shares 950,000 1,000
Expenses of share issues (322,915) -
Issue of convertible loan notes 155,000 -
Capital element of finance lease payments (4,547) (10,786)
________ ________
Net cash used in financing activities 777,538 (9,786)
________ ________
Net decrease in cash and cash equivalents (112,501) (14,521)
Cash and cash equivalents at 01.07.07 (14,521) -
________ ________
Cash and cash equivalents at 30.06.08 (127,022) (14,521)
________ ________
Notes to the financial information
The basic earnings per share is calculated by dividing the loss for the financial period
attributable to shareholders by the weighted average number of shares in issue.
Year ended Year ended
30.06.08 30.06.07
The weighted average number of shares were: Number Number
Weighted average number of ordinary shares 105,896,347 44,333,333
Effect of outstanding warrants and options 16,666,667 -
________ ________
Adjusted weighted average number of ordinary shares
122,563,014 44,333,333
________ ________
Basic earnings/(loss) per share 0.16p (0.69)p
Diluted earnings/(loss) per share 0.14p (0.69)p
1. While the financial information included in this announcement has been computed in accordance
with International Financial Reporting Standards (IFRS), this announcement does not itself contain
sufficient information to comply with IFRS. The full financial statements of the company will be
prepared in accordance with IFRS, International Accounting Standards and their interpretations issued
or adopted by the International Accounting Standards Board as adopted for use in the European Union.
2. The financial information has not been audited or reviewed by the auditors, or extracted from
audited information. This financial statement does not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985 (the "Act").
3. The Directors have not declared a dividend for the year.
4. This statement was approved by the Board of Directors on 28 November 2008. Copies of this
statement will be available free of charge from the Company's Registered Office at Ground Floor, 211
Old Street, London EC1V 9NR.
The directors of Interactive Publishing Plc accept responsibility for this announcement.
- ends -
INTERACTIVE PUBLISHING PLC
Registered No. 06388765
Contacts:
Company
Peter Jay
Justin Sanders 0207 608 6300
PLUS Corporate Adviser
Gary Miller
Fisher Corporate plc 020 7388 7000
Interactive Publishing Plc
