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DA Group PLC (DAG)

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Friday 28 September, 2007

DA Group PLC

Final Results

DA Group PLC
28 September 2007

28th September 2007

                                  DA Group plc

                          'DA Group' or the 'Company'

                                 Final Results



DA Group (AIM: DAG), a leading provider of entertainment and advertising media
solutions, today announces audited results for the year ended 31st March 2007.



The Board also confirms that it is still in discussions with its bankers
regarding an invoice discounting facility and will issue a further statement to
the market during the course of next week.



Chairman and Chief Executive's Statement



In April 2006, we launched Yomego to deliver an increased range of functionality
and services.  This media proposition brought together our mobile, web and
animation expertise to secure contracts with leading broadcasters, production
companies and publishers. Turnover for the year was in line with expectations at
£642,558.



These early deployments provided the basis for launching Yomego's white label
entertainment platform in April 2007, which addresses the growth and popularity
of user-generated content, virtual worlds, social networking and avatars. This
highly customisable platform offers our customers a means to build communities
around their brands, and speed to market for their social media and marketing
initiatives. Within 6 months of its launch, we have secured in excess of
£800,000 orders and developed strong sales prospects.



Notwithstanding these developing opportunities your board recognised that the
business was facing significant financing issues. On 22 May 2007, we embarked
upon a strategic review of the business in a bid to identify potential partners
to exploit our capabilities, acknowledging that this process could potentially
lead to the sale of the Company. Since embarking on the strategic review we have
continued to experience net cash outflows and, as announced on 17 September
2007, at the end of August unaudited cash balances amounted to approximately
£136,000. Since that announcement, we have secured orders in excess of £300,000.
Whilst the growth in orders and prospects is promising we are faced with a
significant challenge in ensuring that we maintain a sufficient level of working
capital to allow us to take advantage of these orders and move towards
profitability. The Board is pursuing a number of options to ensure that this can
be achieved including bank finance, a sale of or investment in the company and
securing further sales contracts.



The increased demand for our products and increase in total order value points
to a sustainable business model being achievable. However, it is also clear that
historically, the levels of business have not been sufficient to see us through
to a position of being cash positive and profitable at this time. As detailed in
note 1 to the accounts, there remains a fundamental uncertainty as to whether
the company can continue as a going concern. However as long as we are able to
successfully address the Company's ongoing working capital requirements, we
believe that there is potential for the Company to generate returns in the
future. We look forward to providing the market with further updates.



Rob Walker                                          Michael Antliff
Chairman                                            Chief Executive
27 September 2007





ENQUIRIES:



Mike Antliff, Paul McCaffrey, DA Group                  +44 (0) 141 582 0600
Lindsay Mair, Daniel Stewart & Company Plc              +44 (0) 20 7776 6550
Tom Moriarty, Caroline Evans-Jones, ICIS                +44 (0) 20 7651 8688





Group Profit and Loss Account
For the year ended 31 March 2007

                                                                                      Restated
                                                                            2007          2006
                                                                               £             £

TURNOVER                                                                 642,558       183,651
Cost of sales                                                            216,164       110,590
                                                                       ---------       -------
GROSS PROFIT                                                             426,394        73,061

Administrative expenses                                                2,141,156     2,141,362
                                                                       ---------       -------
OPERATING LOSS                                                       (1,714,762)   (2,068,301)


Interest receivable and similar income                                    64,866       125,212
                                                                       ---------       -------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION                          (1,649,896)   (1,943,089)
Tax on loss on ordinary activities                                         8,133        10,554
                                                                       ---------       -------
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION                           (1,641,763)   (1,932,535)
                                                                       ---------       -------

BASIC AND DILUTED LOSS PER ORDINARY SHARE                                 (6.81)p       (8.42)p
                                                                       ---------       -------





Turnover and operating loss arise from continuing operations in both years.
There are no recognised gains and losses other than the loss for the year of
£1,641,763 (2006 loss - £1,932,535). The loss for 2006 has been adjusted to
include a charge of £94,200 arising on the implementation of FRS 20 as explained
in note 3.





Group Balance Sheet
At 31 March 2007
                                                                                       Restated
                                                                             2007          2006
                                                                                £             £
FIXED ASSETS
Tangible assets                                                            29,063        30,178
Investments                                                                53,301        53,301
                                                                     ------------        ------
                                                                           82,364        83,479
CURRENT ASSETS
Debtors                                                                   257,728       213,185
Cash at bank and in hand                                                  746,751     2,358,630
                                                                     ------------        ------
                                                                        1,004,479     2,571,815

CREDITORS:  Amounts falling due within one year                           164,769       170,184
                                                                     ------------        ------
NET CURRENT ASSETS                                                        839,710     2,401,631
                                                                     ------------        ------
TOTAL ASSETS LESS CURRENT LIABILITIES                                     922,074     2,485,110

PROVISIONS FOR LIABILITIES                                                 54,549       102,685
                                                                     ------------        ------
                                                                          867,525     2,382,425
                                                                     ------------        ------
CAPITAL AND RESERVES
Called up share capital                                                 2,411,453     2,407,887
Share premium account                                                   2,690,433     2,687,936
Capital redemption reserve                                              3,893,021     3,893,021
Profit and loss account                                               (8,127,382)   (6,606,419)
                                                                     ------------        ------
EQUITY SHAREHOLDERS' FUNDS                                                867,525     2,382,425
                                                                     ------------        ------








Group Statement of Cash Flows
For the year ended 31 March 2007

                                                                                       Restated
                                                                             2007          2006
                                                                                £             £

NET CASH OUTFLOW FROM OPERATING ACTIVITIES                            (1,681,124)   (1,879,624)

RETURNS ON INVESTMENTS AND SERVICING OF FINANCE                            64,866       125,212

TAXATION                                                                   22,216        62,016

CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT                             (23,411)      (10,164)

                                                                    -------------       -------
CASH OUTFLOW BEFORE FINANCING                                         (1,617,453)   (1,702,560)

FINANCING                                                                   6,063     3,322,703
                                                                    -------------      --------
(DECREASE) / INCREASE IN CASH IN THE YEAR                             (1,611,390)     1,620,143
                                                                    -------------      --------


RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
(Decrease) / Increase in cash                                         (1,611,390)     1,620,143
                                                                    -------------      --------
Change in net funds resulting from cash flows                         (1,611,390)     1,620,143
Translation difference                                                      (489)           294
                                                                    -------------      --------
Movement in net funds in the year                                     (1,611,879)     1,620,437
Net funds at 1 April                                                    2,358,630       738,193
                                                                    -------------      --------
Net funds at 31 March                                                     746,751     2,358,630
                                                                    -------------      --------








Notes



1.  FUNDAMENTAL ACCOUNTING CONCEPT

The financial statements have been prepared assuming that the company will
continue as a going concern. However, on the basis of current cash flow
forecasts, there is insufficient cash to fund the Company's operating activities
for the foreseeable future. As a result the company is dependent on the securing
of further financing to enable it to continue operating and to meet its
liabilities as they fall due.



On the basis of current cash flow forecasts, which take into account only
completed and secured orders, the directors believe that the company has
sufficient funds to meet its liabilities as they fall due to the end of October
2007.  Steps are being taken by the directors to secure interim bank finance by
way of an invoice discounting facility to provide funding to December 2007.
During that period the directors will continue to seek a sale of the Company in
a manner which will allow the Company to continue as a going concern.  Efforts
will also continue to secure further sales contracts. However, there is no
certainty that the Company will secure the finance it needs to allow the Company
sufficient time to complete the sale of the Company. If the directors' efforts
are unsuccessful, there is a fundamental uncertainty as to whether the Company
will be able to continue in operational existence for the foreseeable future and
to meet its liabilities as they fall due.



Whilst the directors are currently uncertain as to the outcome of the matters
described above, they consider that the progress of discussions to secure the
necessary short term bank finance provides a reasonable degree of confidence
that such funding can be secured.  Additionally, discussions with a potential
purchaser of the Company along with the receipt of certain other expressions of
interest in the acquisition of the company or investment in the company indicate
to the directors that it is not unreasonable to expect that such a transaction
can be achieved within the required timescale.  On this basis, the directors
consider it appropriate to prepare the financial statements on the going concern
basis.  The financial statements do not include any adjustments that would
result from an inability to secure the further financing or investment required
by the Company.







2.  AUDITORS REPORT

The auditors report is not qualified but is modified to include the following
emphasis of matter:

'In forming our opinion on the financial statements, which is not qualified, we
have considered the adequacy of the disclosures made in note 1 to the financial
statements concerning the ability of the company to continue as a going concern.
The financial statements have been prepared on a going concern basis, the
validity of which depends upon the successful conclusion of negotiations to
secure additional finance and the agreement of a sale of the company combined
with the injection of additional funding within the required timescale. These
conditions, along with the other matters explained in note 1 to the financial
statements, indicate the existence of a material uncertainty which may cast
significant doubt on the company's ability to continue as a going concern. The
financial statements do not include any adjustments that would result if the
company was unable to continue as a going concern.'







3.  CHANGE IN ACCOUNTING POLICY



The Company has adopted FRS 20 'Share-based payments' for the year ending 31
March 2007.  In accordance with this standard, the cost of share options awarded
to employees under the Group's share option schemes is measured by reference to
their fair value at the date of grant.  This cost is recognised over the vesting
period of the options based on the number of options which in the opinion of the
Directors will ultimately vest.  The impact on the year to 31 March 2007 is a
charge of £120,800 and the impact on the prior period is described further
below.  The Group has taken advantage of the transitional provisions contained
within FRS 20 and has applied FRS 20 only to share options granted after 7
November 2002 which had not vested at 1 April 2006.



The comparative figures for the year ended 31 March 2006 have been restated to
apply the provisions of FRS 20, increasing administrative expenses and
consequently increasing losses for the period, as follows.


                                                                               2006
                                                                                  £
Loss on ordinary activities after taxation prior to adjustment          (1,838,335)
FRS 20 share option charge                                                 (94,200)
                                                                    ---------------
Loss on ordinary activities after taxation restated                     (1,932,535)
                                                                    ---------------



The implementation of FRS 20 has no impact on net assets or cash flows in any
period.







4. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES:


                                                                                           Restated
                                                                               2007            2006
                                                                                  £               £

Operating loss                                                          (1,714,762)     (2,068,301)
Depreciation of tangible fixed assets                                        24,526         123,355
Share based payments                                                        120,800          94,200
Gain on sale of fixed assets                                                      -         (1,192)
Loss/(Gain) on exchange                                                         489           (294)
Decrease / (increase) in debtors                                           (58,626)          53,996
Increase / (decrease) in creditors                                          (5,415)          18,083
Decrease in provisions for liabilities and charges                         (48,136)        (99,471)
                                                                    --------------- ---------------
Net cash outflow from operating activities                              (1,681,124)     (1,879,624)
                                                                    --------------- ---------------






5. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASHFLOW STATEMENT

Returns on investments and servicing of finance
                                                                               2007            2006
                                                                                  £               £

Interest received                                                            64,866         125,212
                                                                    --------------- ---------------
                                                                             64,866         125,212
                                                                    --------------- ---------------

Taxation
UK Corporation tax received                                                  22,216          62,016
                                                                    --------------- ---------------

                                                                             22,216          62,016
                                                                    --------------- ---------------
Capital expenditure and financial investment
Purchase of tangible fixed assets                                          (23,411)        (11,356)
Disposal of tangible fixed assets                                                 -           1,192
                                                                    --------------- ---------------
                                                                           (23,411)        (10,164)
                                                                    --------------- ---------------

Financing
Issue of ordinary share capital                                               6,063       3,322,703
                                                                           --------        --------
                                                                              6,063       3,322,703






6.      ANALYSIS OF NET FUNDS



                                          At 1 April                   
                                                Cash                   Exchange  At 31 March
                                                2006          Flow   Difference         2007
                                                   £             £             £           £

Cash at bank and in hand                   2,358,630   (1,611,390)         (489)     746,751
                                            --------      --------      --------      ------
                                           2,358,630   (1,611,390)         (489)     746,751
                                            --------      --------      --------      ------





7.      STATUTORY ACCOUNTS

This statement was approved by the board on 27 September 2007. It does not
constitute the Company's statutory accounts for the year ended 31 March 2007 but
is derived from those accounts. The Auditors have reported on those accounts and
their report is unqualified, but modified as described in note 2 above, and did
not contain statements under s237 (2) or (3) of the Companies Act 1985.





8.      AVAILABILITY

A copy of the annual report is available today from the Company's website and
will be posted to shareholders as soon as practicable.


                      This information is provided by RNS
            The company news service from the London Stock Exchange            LLDKBBBBF                                                                                                                                                                                                                                                      

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