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Forever Broadcast (FOB)

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Thursday 07 December, 2000

Forever Broadcast

Results to 30th September2000

Forever Broadcasting PLC
7 December 2000


FOREVER BROADCASTING PLC

PRELIMINARY RESULTS FOR THE PERIOD TO 30TH SEPTEMBER 2000


SUMMARY

First results since incorporation reflect management action to re-position and
enhance performance from initial acquisitions in Liverpool (Crash FM) and
Bolton/Bury (Tower FM);

Normalised Operating Loss for the period of £1.056 million on initial Turnover
of £340,000;

Liverpool station relaunched as Juice 107.6FM in March 2000. 140% growth in
number of listeners achieved by September 2000;

The period includes only 3 months of trading at Tower FM, with 25% growth in
listeners in same period;

Juice brand features in digital radio multiplex application for North East
region. Further digital and analogue applications in progress.

Company well funded for further radio investments with net cash of £12.6
million.

Commenting on the announcement, John Josephs, Chairman of Forever
Broadcasting, said:

'We are pleased with our early progress in establishing Forever in the
independent radio market.  We have achieved significant gains in audiences in
our first two stations, and we are excited about the broader potential of the
Juice brand.  We now look forward to expanding our portfolio over the next 12
months and further demonstrating the potential of the Forever team.'



Enquiries:

John Josephs, Chairman
Eric Lawrence, Managing Director
Forever Broadcasting                               T:  0191 286 0000

David Simonson
Sadhbh O'Gorman
Merlin Financial                                   T:  020 7606 1244


Chairman's statement and operating review for the period ended 30 September
2000

I have pleasure in presenting our first annual report and accounts. The period
since the company's incorporation in September 1999 has been one of frenetic
activity, culminating in a successful AIM flotation in  August 2000.
The results show a 'normalised' operating loss for the period of £1,056,000 on
turnover of £340,000.  It is important, however, to put these figures into
context; the period includes five months of trading in Liverpool following the
acquisition of Crash FM but before the relaunch of the station as Juice
107.6FM on 27 March 2000, the first six months of trading as Juice while
published audience figures still reflected the performance of Crash, and only
three months of trading at Tower FM in Bolton/Bury which was acquired on 30
June 2000.
The company is well financed for its planned expansion following its flotation
and fundraising, with net cash at the year end of £12.649m.
Development strategy
The Board's strategy is to build, by acquisition and new licence applications,
a clearly focused branded radio and new media business. In pursuit of this
strategy we acquired, prior to flotation, commercial radio stations in
Liverpool and Bolton, and a 15% stake in XY Network which operates an audio
entertainment network designed for new generation mobile phones and the
Internet.
Since the financial year end, we have submitted jointly with Scottish Radio
Holdings plc and Saga Radio an application to operate the first digital radio
multiplex for the North East of England region. If our application is
successful, we will own one third of the multiplex and we will provide
programme content in the form of our Juice brand. This has been our first
opportunity since flotation to extend the Juice brand beyond Liverpool. It
should be noted however that there are two other applicants for this licence.
It is our intention to include Juice in applications for new digital radio
multiplexes in the North West, West Midlands and London.
Unlike existing analogue FM and AM services, where the Radio Authority
licences the broadcaster, digital licences are awarded to the multiplex
operator whose responsibility it is to secure from programme providers a range
of suitable services for broadcast. In some markets we may choose to apply
either on our own, or with others, to be a multiplex operator and a programme
provider; in others, we may simply choose to be a programme provider.
We will be submitting, early in the new year, an application for a new
analogue licence to cover West and South Yorkshire including the major
population centres of Leeds, Sheffield and Bradford. This is a region in which
our management team have worked successfully for many years and we have
recruited a very strong local, non-executive Board.
Later in 2001 the Radio Authority will be advertising a number of new analogue
licences. Our current intention is to be involved, either in consortia, or in
our own right, in applications for the East Midlands region, covering
Nottingham, Derby and Leicester, and a number of smaller scale local licences.
Meanwhile, we continue to pursue opportunities to acquire further analogue
licences which will enable us to extend the Juice brand and other licences
where we believe we can improve the performance of the radio station.

Operational review

Juice 107.6FM
When we acquired Crash FM in Liverpool on 1 November 1999 it had 32,000
listeners who were listening on average for 2.2 hours per week. Our most
recent RAJAR audience survey covering the period to the end of September 2000
indicated that we now have an audience of 77,000 adults listening to Juice
107.6FM for an average of 5.5 hours per week. We have invested heavily in
research, recruitment and marketing and we are confident that we will see a
significant increase in our audience over the next twelve months.
We have used the early months in the life of Juice in Liverpool to recruit an
almost entirely new sales force. We are confident that as audiences grow
further we will deliver advertising revenue growth which will move the station
into profitability.

Tower FM

We completed the acquisition of Tower FM which serves a population of over
300,000 adults in Bolton and Bury, on 30 June 2000. We have appointed a new
managing director and improved the calibre of the sales force. The RAJAR
survey for the quarter ended June 2000 showed that the radio station reached
17% of the adult population. Our most recent RAJAR survey to the end of
September 2000 has shown an increase to 21%. We now have 65,000 listeners who
are listening on average for 8.8 hours per week. This is very satisfactory
progress in a short period.
Tower FM has been on air since March 1999 and we expect the station to be
trading profitably on a monthly basis in the near future.

New media

On 30 June 2000 we made our first move into new media by acquiring our 15%
stake in XY Network Limited ('XY'). XY is, we believe, the only interactive
audio supplier for mobile phones in the UK. Since our investment, XY has
strengthened its key relationships with BT Genie and Ericsson. They have added
the provision of interactive audio solutions, referred to as 'white
labelling', to their activities with a view to accelerating revenue
development.

The Forever Broadcasting Team

At our two radio stations in Liverpool and Bolton and in our corporate office
in Newcastle we have a small team of committed and talented young people
working extremely hard to develop your company and its stations. Our initial
radio station investments are in their infancy but our management and branding
approach is already making a significant impact and they are developing well.
We now look forward to expanding substantially our portfolio over the coming
12 months and further demonstrating the potential of the Forever team.



 
 Consolidated profit and loss account for the period ended 30 September 2000

                Note     Continuing         Acquisitions          Total
                         operations
                          £'000                 £'000              £'000
Turnover                     -                    340                340
Administrative and 
selling expenses           (25)                (2,072)            (2,097)
Operating loss    2        (25)                (1,732)            (1,757)
Interest receivable 
and similar income                                                   140
Interest payable
and similar charges                                                  (22)
Loss on ordinary 
activities before
taxation                                                          (1,639)     
Tax on loss
on ordinary
activities        3                                                   -
Loss for the
financial period                                                  (1,639)     
Loss per share
- basic           8                                                 26.5p
Adjusted loss
per share         8                                                 15.2p


The group has no recognised gains or losses other than the loss above and
therefore no separate statement of total recognised gains and losses has been
presented.

There is no difference between loss on ordinary activities before taxation and
the retained loss for the year stated above and their historical cost
equivalents. 




'Normalised' operating loss is calculated as follows:
                                              £'000
Operating loss                               (1,757)
Amortisation of goodwill                        406
Acquisition restructuring costs                 295
'Normalised' operating loss                  (1,056)

The 'Normalised' operating loss represents the underlying performance of the
business before the amortisation of goodwill, and the Crash FM Limited
restructuring and relaunch costs.

 Balance sheets as at 30 September 2000
                                           Group       Company
                                           2000        2000
                 Note                      £'000       £'000

Fixed assets                     
Goodwill           6                       5,008         -
Tangible assets                              300          41
Investments                                1,038       1,038
                                           6,346       1,079
Current assets                     
Debtors                                      322       6,387
Cash at bank and in hand                  12,649       3,119
                                          12,971      19,506
Creditors: amounts falling
due within one year                         (868)       (393)
Net current assets                         12,103      19,113
Net assets                                 18,449      20,192
                     
Capital and reserves                     
Called up equity
share capital       7                       8,684       8,684
Share premium account                      11,404      11,404
Profit and loss account                    (1,639)        104
Equity shareholders' funds                 18,449      20,192


 
Consolidated cash flow statement for the period ended 30 September 2000
       
                                           2000           2000
                          Note            £'000          £'000
Net cash outflow from                                   (1,240)
operating activities                 
Returns on investments
and servicing of finance                     
Interest received                           107       
Interest paid                               (20)       
Net cash inflow from returns
on investment and
servicing of finance                                        87
Taxation                                                     -
Capital expenditure and
financial investment                     
Purchase of trade investment               (788)       
Purchase of tangible fixed assets           (96)       
Net cash outflow from capital
expenditure and financial investment                      (884)
Acquisitions                     
Purchase of subsidiary 
undertakings              4,5            (3,674)       
Net overdraft acquired
with subsidiaries                          (108)       
Net cash outflow from acquisitions                      (3,782)
Cash outflow before financing                           (5,819)
Financing                     
Net proceeds from issue of
equity share capital                      18,593       
Repayment of loan acquired
with subsidiary                             (125)       
Net cash inflow from financing                          18,468
Increase in net cash                                    12,649



Notes to the financial statements

for the period ended 30 September 2000

1 Composition of the Group
The group accounts consolidate the accounts of Forever Broadcasting plc ('the
Company') and its subsidiary undertaking, Perfecttaste Limited and its
subsidiary undertakings, Crash FM Limited and Tower FM Limited from the date
it obtained control.

2 Operating loss
Operating loss is stated after charging:                  £'000
Directors' emoluments                                       171
Depreciation of tangible fixed assets                        48
Amortisation of goodwill                                    406
Operating lease rentals - equipment                          35
Operating lease rentals - other assets                       43
Restructuring costs                                         295
Licence applications                                         25
Audit services (company: £5,000)                             11

The restructuring costs relate principally to the restructuring of Crash FM
Limited following its acquisition, and include redundancy costs and costs
incurred in the relaunch of the radio station.
Fees paid to PricewaterhouseCoopers for non-audit services in the UK were
£97,493.

3 Tax on loss on ordinary activities
No liability arises for UK corporation tax as a result of losses incurred
during the period.

4 Acquisition of Crash FM Limited
On 1 November 1999 the Group acquired Crash FM Limited, a radio broadcasting
business based in Liverpool.  The impact of the acquisition on the
consolidated balance sheet is set out below:
               
                                            Book  and fair value
                                                  £'000

Tangible fixed assets                               116
Debtors                                              71
Loan                                               (125)
Overdraft                                          (125)
Other Creditors                                     (62)
Net liabilities acquired                           (125)
Consideration (including costs)                    1,792
Goodwill arising                                   1,917
Analysis of consideration:
Cash                                               1,475
Acquisition costs                                     61
Total cash consideration                           1,536
Loan notes issued                                    256
Total consideration                                1,792

In the opinion of the directors, the fair values of assets and liabilities
acquired approximate to their book values.

The effect on group cashflows of Forever Broadcasting plc are as follows:
Crash FM contributed £(1,107,000) to the Group's net operating cash outflow,
paid £9,000 in respect of net returns on investment and servicing of finance
and paid £44,000 in respect of purchases of tangible fixed assets.

The pre-acquisition results of Crash were as follows:
       
                                   7 month ended     Year ended
                                   31 October 1999   31 March 1999
                                      £'000            £'000                  
Turnover                               126              289
Administrative and selling expenses   (362)            (836)
Operating loss                        (236)            (547)
Interest receivable and similar
income                                 -                  1
Interest payable and similar charges   (11)             (10)
Loss on ordinary activities
before taxation                       (247)            (556)
Taxation on loss on ordinary
activities                             -                 -
Retained loss for financial period    (247)            (556)

Crash had no recognised gains or losses other than the losses reported above. 
The trade, assets and liabilities of Crash FM Limited were transferred to
Perfecttaste Limited on 1 November 1999 and the company has been dormant since
that date.
5       Acquisition of Tower FM Limited
On 30 June 2000 the Group acquired Tower FM Limited, a radio broadcasting
business based in Bolton. The impact of the acquisition on the consolidated
balance sheet is set out below:

                                              Book value
                                              and provisional
                                              fair value
                                              £'000
Tangible fixed assets                         135
Debtors                                        81
Cash                                           19
Creditors                                     (99)
Net assets acquired                            136
Consideration (including costs)              3,633
Goodwill arising                             3,497
Analysis of consideration:                     
Cash                                         2,080
Acquisition costs                               58
Total cash consideration                     2,138
Shares                                       1,495
Total consideration                          3,633

The effect on group cashflows of Forever Broadcasting plc are as follows:
Tower contributed £(170,000) to the Group's net operating cash outflow, paid
£Nil in respect of net returns on investment and servicing of finance and paid
£4,000 in respect of purchases of tangible fixed assets.
The pre-acquisition results of Tower were as follows:

                                    9 months ended      Period ended
                                    30 June 2000        30 September 1999
                                    £'000               £'000
Turnover                              387                 227
Administrative and selling expenses  (447)               (265)
Operating loss                        (60)                (38)
Interest receivable and similar
income                                 -                    1
Loss on ordinary activities before tax(60)                (37)
Tax on loss on ordinary activities     -                    -
Loss on ordinary activities after tax (60)                (37)
Exceptional item                       -                  (82)
Retained loss for the financial year  (60)               (119)

Tower had no recognised gains or losses other than the losses reported above. 
The trade, assets and liabilities of Tower FM Limited were transferred to
Perfecttaste Limited on 1 July 2000 and the company has been dormant since
this date.

6 Goodwill

Group
                                     £'000
Cost              
Arising on acquisitions              5,414
At 30 September 2000                 5,414
Amortisation              
Charge for the period                  406
At 30 September 2000                   406
Net book value at 30 September 2000  5,008

Goodwill arising on the acquisition of Crash FM Limited is being amortised on
a straight line basis over 76 months, being the remaining period of its radio
licence upon acquisition.
Goodwill arising on the acquisition of Tower FM Limited is being amortised on
a straight line basis over 80 months, being the remaining period of its radio
licence upon acquisition.

7 Called up equity share capital
       
                                                     £'000
Authorised              
30,000,000 ordinary shares of 50p each              15,000
Allotted and fully paid              
17,368,145 ordinary shares of 50p each               8,684

The company was incorporated on 20 September 1999 with one £1 Ordinary Share.
On 1 November 1999, the company issued a further 1,967,499 £1 ordinary shares
at par in order to raise funding to acquire Crash FM Limited (see note 4).
On 10 January 2000, the company issued a further 60,000 £1 ordinary shares for
a total cash consideration of £60,000 in order to fund its working capital
requirements.
During April, May and June 2000 the company issued a further 1,070,250 £1
ordinary shares at £2 each for a total cash consideration of £2,140,500 in
order to raise funding for the acquisition of Tower FM Limited.
On 30 June 2000 747,613 £1 ordinary shares valued at £2 each were issued as
part of the consideration for Tower FM Limited.
On 24 July 2000, the directors approved a two for one share split resulting in
an issued share capital of 7,690,726 ordinary shares of 50p each in the
Company.
On 25 July 2000 the Company granted 730,000 options over ordinary shares in
the Company. Options were granted with an exercise price of £1.10 and are
exercisable between 25 July 2003 and 25 July 2010.
On 2 August 2000 the Company allotted a further 9,677,419 ordinary shares
pursuant to the placing for a total consideration of £15,000,000.  This will
be used in the acquisition of radio based media assets and to provide working
capital for existing and future operations.

8 Loss per share

As set out in Note 7, on 24 July 2000, the directors approved a two for one
share split, resulting in an issued share capital of 7,690,726 Ordinary Shares
of 50p each.  The loss per share for the period ended 30 September 2000 has
been calculated to reflect this. The share options are non-dilutive.
The basic loss per 50p Ordinary Share has been calculated based on the loss
after taxation of £1,639,000 and 6,190,784 Ordinary Shares, being the weighted
average number of Ordinary Shares in issue during the period. 
The adjusted loss per share has been calculated based on the loss after
taxation of £938,000 which is before amortisation of goodwill and acquisition
restructuring costs, and upon 6,190,784 Ordinary Shares, being the weighted
average number of Ordinary Shares in issue.


The financial information above does not constitute statutory accounts within
the meaning of Section 240 of the Companies Act 1985. Statutory accounts for
the period to 30th September 2000, incorporating an unqualified audit report,
will be filed with the Registrar of Companies.





      

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