INTERACTIVE PUBLISHING PLC
("IP" or the "Company")
INTERIM FINANCIAL STATEMENT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2009
CHAIRMAN'S STATEMENT
I am pleased to be able to make this report to you as Chairman of the Company and of the Group.
As previously announced, recent trading periods have been the most challenging years on record for the
publishing industry and its related sectors. IP has had to become more diverse, ensure leanness within
the portfolio and adapt to a fast changing environment.
During the six month trading period to 31 December 2009 there have been a number of notable milestones
achieved and your Board believe that the Company is now in excellent shape to build the business
profitably, even in these difficult trading conditions. Furthermore, should the expected economic
recovery materialise then the Company is now in a position to achieve the level of results which would
be expected from its current portfolio.
Significant events within the current reporting period include:
a) On 19 August 2009, IP acquired the entire issued share capital of Marine Media Limited. This
company publishes "Sailing Today" - a magazine committed to providing the most authoritative, relevant
and up to date information on all aspects of sailing.
b) The Group's wholly owned subsidiary, Trojan Publishing Limited, entered into an agreement to
manage the administration, production, printing, circulation and distribution of the magazines
published by Paul Raymond Publications Limited. This contract is for an initial minimum term of 12
months at a rate of £300,000 per annum.
c) The acquisition on 12 November 2009, of the entire issued share capital of Scissorhands Media
Limited. This company publishes magazines focused on providing relevant and up to date information on
all aspects of the hair and beauty industries.
The Directors continue to review all aspects of the business to ensure the Group remains competitive
and profitable. Steps are taken accordingly to streamline staffing levels whenever appropriate and the
Board constantly monitor our distribution, marketing, print and paper contracts.
Financial Overview
Turnover, which comprises all the external turnover in the Group, has increased from £3.2m to £3.7m
over the preceding interim period (an increase of 15.6%). This is attributable to the increased
performance of the Group's leading titles and the new title acquisitions made during the period. The
gross profit has also increased from £613,110 to £971,116 (an increase of 58.4%).
Administrative expenses have increased from £706,246 to £833,545, which is primarily due to the move
into larger trading premises and the additional costs relating to the acquisitions. The net result is
an increase in the profit from operations to £137,571 from a loss of £93,136 in the corresponding
period, an overall improvement of £230,707.
On 12 October 2009, IP was able to draw down the £200,000 Enterprise Finance Guarantee Scheme loan,
which had been secured through the support of Barclays Bank plc and has provided additional funding
for the Group's working capital needs. This loan is a term loan, as opposed to the previous 'on
demand' overdraft facilities, and is repayable at £12,000 per quarter.
The Group profit before tax and basic earnings per share for the period under review amounted to
£132,231 (2008: £83,772 loss) and 0.08p (2008: 0.06p loss) respectively. At 30 June 2009,
shareholders' funds were £0.65m and £0.86m at 31 December 2009. The Directors do not propose to
declare a dividend.
The Company's statutory accounts for the year to 30 June 2009 were filed slightly late at Companies
House, as the Group's invoice discounting facility was in the process of being renegotiated. This
facility has now been agreed (as noted below) and the statutory accounts have now been formally signed
off, filed at Companies House and sent out to shareholders.
Review of Activities
IP is a London-based magazine publishing company that acquired Trojan Publishing, a company formed in
June 2006 with the strategy of building a publishing group engaged in the production of both magazine
and digital content. IP now has a portfolio of 55 magazines (30 June 2009: 51 magazines).
The major titles are 'Women's Fitness', 'What Diesel', 'Scarlet', 'Hair Now', 'Perfect Hair', 'Hair &
Beauty', 'Sailing Today' and 'Attitude' (the UK's number one gay lifestyle magazine).
The Group 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 is to focus heavily on the
consumer based brands whilst nurturing the adult portfolio to ensure that high revenues and
profitability complement and enhance the growth of the Group.
In addition to straightforward publication of printed titles, IP develops social networking platforms
for its key brands which involve fully interactive websites that enhance the magazine users'
experience of the brand while building the brand awareness. In creating this interactive experience,
a separation has been maintained between the user and the magazine. This enables a title or brand to
maintain traditional revenue streams while adding new revenue streams to flow from the platform.
The Group's strategy remains for each magazine title in the IP portfolio to develop a niche and sought
after 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 by
creating on-target brands.
The key components in creating a brand are: the ability of the consumer to visualise the magazine
experience without being reliant on the editorial content; an understanding of the target audience;
and the ability to interact with that audience.
The Directors intend to keep the development of new revenue streams under constant review to ensure
that the Company is not overly dependent upon one revenue source and the portfolio remains
complementary and varied. This is to ensure that the effects of a downturn in one revenue source have
less impact on the overall Company.
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; and
* 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 January 2010, Trojan Publishing Limited secured a new invoice discounting facility with Bibby
Financial Services Limited. The Directors believe that this facility will increase the amount of
drawdown available and further aid the working capital requirements of the Group.
I would like to take this opportunity to thank shareholders for their support and fellow Directors and
staff for their invaluable commitment in building IP to where it is today.
Peter Jay
Chairman
INCOME STATEMENT
For the period ended 31 December 2009
Six months Six months
ended ended Year ended
Note 31.12.09 31.12.08 30.06.09
(Unaudited) (Unaudited) (Audited)
GBP GBP GBP
REVENUE 3,755,442 3,283,481 6,426,474
Cost of sales (2,784,326) (2,670,371) (5,641,116)
_________ _________ _________
GROSS PROFIT 971,116 613,110 785,358
Administrative expenses (833,545) (706,246) (1,217,396)
Impairment provisions - - (419,255)
_________ _________ _________
PROFIT/(LOSS) FROM OPERATIONS
137,571 (93,136) (851,293)
Finance Revenue 213 34 34
Finance costs (5,553) 9,330 (22,874)
_________ _________ _________
PROFIT/(LOSS) BEFORE TAX 132,231 (83,772) (874,133)
Taxation - - 85,657
_________ _________ _________
PROFIT/(LOSS) FOR THE PERIOD
132,231 (83,772) (788,476)
_________ _________ _________
Basic earnings/(loss) per share 3 0.08p (0.06)p (0.50)p
Diluted earnings/(loss) per share 3 0.07p (0.05)p (0.50)p
Note - the comparative figures for the six months to 31 December 2008 have been adjusted to reflect
the allocation of costs between Cost of Sales and Administrative expenses used in the statutory
accounts to 30 June 2009 and the interim results to 31 December 2009. The loss from operations in the
comparative period remains the same.
INTERACTIVE PUBLISHING PLC
Notes to the financial information
1. While the financial information included in this interim announcement has been computed in
accordance with 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. This interim financial statement has not been audited or reviewed by the auditors and does not
constitute statutory accounts within the meaning of Section 240 of the Companies Act 1985.
3. The calculation of basic earnings/(loss) per share is based on the profit/(loss) on ordinary
activities after taxation of GBP 132,231 (31 December 2008: GBP (83,772); 30 June 2009: GBP (788,476)
and the weighted average number of shares of 173,377,221 (31 December 2008: 148,445,355; 30 June 2009:
157,800,457) in issue during the period. The adjusted weighted average number of shares used to
calculate the diluted earnings per share were 181,710,555 (31 December 2008: 165,112,021; 30 June
2009: 157,800,457).
4. This interim financial statement was approved by the Board of Directors on 1 March 2010.
Copies of this statement will be available free of charge from the Company's Registered Office at 207
Old Street, London EC1V 9NR.
INTERACTIVE PUBLISHING PLC
Registered No. 06388765
Contacts:
Interactive Publishing plc
Justin Sanders, CEO 0207 608 6300
PLUS Corporate Adviser
Gary Miller
Fisher Corporate 020 7388 7000
Interactive Publishing Plc