Final Results
03 April 2003 - 7:00PM
UK Regulatory
RNS Number:5832J
Stream Group PLC
03 April 2003
STREAM GROUP PLC ("Stream" or the "Company")
Preliminary Results for the Year Ended 31 December 2002
HIGHLIGHTS
* Turnover increased by 25% to #8.5 million (2001: #6.8 million)
* Gross profit increased by 89% to #3.4 million (2001: #1.8 million)
* Profit before tax of #0.2 million (2001: loss of #1.3 million)
* Portfolio of products and services consolidated - geared towards fixed
line audiotext and mobile data services
* International growth prospects for core businesses of Stream Live
Services and Stream Media remain encouraging, particularly in South East
Asia, Europe and Australia
* Telecoms division effectively closed
Gordon Robson, Chairman, said:
"It has been a year of growth and consolidation for Stream. Monthly losses have
been converted to monthly profits, and I am encouraged by the progress we have
made in pursuing our objective of establishing Stream as a leading player in the
provision of digital content to media owners. Over the twelve month period, we
have extended our portfolio of products and services and made investigative
progress in developing the business geographically. The current year has
started in line with expectations and the Board remains confident about Stream's
growth prospects and expects the Group to continue to make good progress in the
current year."
Enquries:
Stream Group plc Tel: 020 7969 2723
Gordon Robson, Executive Chairman
Paul Tuson, Finance Director
Biddicks Tel: 020 7448 1000
Katie Tzouliadis/Kathryn Burn
CHAIRMAN'S STATEMENT
Introduction
I am pleased to report that 2002 was a year of reorganisation resulting in
growth. As I reported in our interim results, Stream moved into profit just
after the half year and continued this trend over the rest of 2002, ending the
year in overall profit.
This is a pleasing result and stems from our decision to refocus the business on
our higher margin areas and effectively withdraw from the lower margin telecoms
operations. This restructuring has seen very positive results and both Stream
Live Services and Stream Media made encouraging progress.
Results
During the year to 31 December 2002 turnover increased by 25% to #8.5m compared
to #6.8m in the comparative period last year. Revenue growth was achieved
despite withdrawing Talk Telecom, our licensed network operator, from the low
margin but high volume business of switching telecoms traffic. This move,
together with focussing on our core content business, helped to increase gross
profit by 89% to #3.4m (2001: #1.8m). Our strategy of consolidation combined
with a focus on core business and some success in mobile text messaging services
resulted in an overall profit for the year of #0.2m compared to a loss of #1.3m
in 2001.
Operating review
The reorganisation we successfully completed during the year leaves the business
focused on two divisions, Stream Live Services and Stream Media.
Stream Live Services is focused solely on telephone based psychic and
astrological services following unsuccessful trials in other content areas. The
business has an increasing emphasis on direct marketing via mail, print and
broadcast advertising. Good results in this direct business have contributed to
our improved gross margin. We intend to continue to drive growth of our direct
business while retaining strong media partnerships. These partnerships remain a
key part of the business.
In the final quarter of the year, after a successful trial period, we launched
Stream Live Services in Australia. Results to date have been encouraging. The
move into Australia marks the beginning of our programme to expand
geographically and over the course of 2003 we aim to move into other overseas
markets with direct advertising campaigns and media partnerships where possible.
We expect to see good growth this year from our overseas activities.
Stream Media, which provides digital content for mobile phones and interactive
digital television, has achieved success in the niche SMS "chat and dating"
sector by providing its infrastructure and expertise to media partners. We plan
to take this expertise into Europe and Asia. Stream Media is now profitable on
a month by month basis and we see future UK growth as coming primarily from new
content services such as multi media messaging ("MMS"), video streaming and
polyphonic ringtones. However, due to current low handset penetration, we do
not expect to see significant revenues in these sectors until late 2003 at the
earliest.
Talk Telecom is now used solely to carry the Group's own telephone traffic and
serves the purpose of maximising margins for Stream Live Services.
Geographical expansion is a key part of our strategy for 2003. The Board
believes that Stream has a strong opportunity to take its expertise and products
into various markets around the world. We are currently seeking a contribution
to funding in Asia from a local source to launch Stream in the Far East.
Although no revenues are currently being generated, progress to date has been
encouraging and we expect to see activity commence during the second quarter of
2003.
Outlook
The current year has started in line with expectations and the Directors believe
that, after a year of consolidation and product development, Stream is well
placed to maintain and build upon its strengthening position in the UK digital
content market. In addition, we believe there are a number of interesting
opportunities to expand our operations overseas and during the current year we
plan to take the Group's products and expertise into international markets.
We remain confident about our growth prospects and expect the business to
continue to make good progress in the current year.
Gordon Robson
Executive Chairman
Consolidated profit and loss account
for the year ended 31 December 2002
2002 2001
#'000 #'000
Turnover 8,518 6,825
Cost of revenue (5,116) (5,032)
Gross profit 3,402 1,793
Administrative expenses
Operating (3,303) (2,788)
Exceptional costs - (360)
Operating profit/(loss) 99 (1,355)
Interest receivable 53 90
Interest payable - (2)
Profit/(loss) on ordinary activities before taxation 152 (1,267)
Tax on profit/(loss) on ordinary activities - -
Profit/(loss) for the year retained for equity shareholders 152 (1,267)
Profit/(loss) per share
Basic 0.27 (2.45)
Diluted 0.25 (2.45)
All activities relate to continuing operations. The profit and loss account
contains all recognised gains and losses for the year and preceding year.
Consolidated balance sheet
at 31 December 2002
2002 2001
#'000 #'000
Fixed assets
Tangible assets 605 712
Investments 20 -
625 712
Current assets
Debtors 1,972 1,194
Cash at bank and in hand 1,620 1,688
3,592 2,882
Creditors: amounts falling due within one year (1,792) (1,351)
Net current assets 1,800 1,531
Net assets 2,425 2,243
Capital and reserves
Called up share capital 2,840 2,834
Share premium account 2,689 2,689
Profit and loss account (1,944) (2,096)
Merger reserve (1,154) (1,154)
Other reserve (6) (30)
Shareholders' funds 2,425 2,243
Consolidated cash flow statement
for the year ended 31 December 2002
2002 2001
#'000 #'000
Net cash flow from operating activities 93 (692)
Returns on investments and servicing of finance 53 88
Capital expenditure and financial investment (214) (625)
Net cash flow before financing (68) (1,229)
Financing - 3,059
(Decrease)/increase in cash in the period (68) 1,830
Reconciliation of net cash flow to movement in net debt
(Decrease)/increase in cash in the period (68) 1,830
Cash outflow from loans - 345
Movement in net debt in the period (68) 2,175
Net funds/(debt) at the start of the period 1,688 (487)
Net funds at the end of the period 1,620 1,688
NOTES TO PRELIMINARY STATEMENT
For the year ended 31 December 2002
1. Financial Information
These statements do not constitute accounts as defined by Section 240 of the Companies Act
1985. The summarised profit and loss account, balance sheet and cash flow statement and
associated notes of the year ended 31 December 2002 have been extracted from the Group's
financial statements.
The financial information for the full preceding year is based on the statutory accounts for
the financial year ended 31 December 2001. Those accounts, on which the auditors issued an
unqualified opinion, have been delivered to the Registrar of Companies.
2. Exceptional Item
2002 2001
#'000 #'000
Provision against flotation costs - (150)
Reversal of deferred consideration - (100)
Goodwill impairment - 388
Website development cost impairment - 139
Restructuring - 83
- 360
The goodwill impairment relates to acquisitions for which no future significant revenue streams
are now anticipated.
Restructuring costs relate to redundancies.
3. Earnings Per Share
2002 2001
#'000 #'000
Profit/(loss) attributable to shareholders 152 (1,267)
Number Number
Weighted average number of shares in issue 56,765,095 51,771,225
Dilution effects of share options 4,054,271 -
Dilution effects of employee share schemes 399,864 -
Diluted weighted average number of shares in issue 61,219,230 51,771,225
Basic loss per share 0.27p (2.45p)
Diluted loss per share 0.25p (2.45p)
Basic profit/(loss) per share is calculated on the results attributable to ordinary shares
divided by the weighted average number of shares in issue during the year excluding those held
by Stream Trustees Limited which are treated as cancelled.
Diluted profit per share calculations include additional shares to reflect the dilutive effect
of employee share schemes and share option schemes. Diluted loss per share is equivalent to
basic loss per share since the effect of including potential shares within the calculation of
diluted weighted average number of ordinary shares would be anti-dilutive.
4. The Board is not recommending the payment of a final dividend for the year ended 31 December
2002.
5. The annual report and accounts will be posted to shareholders by 30 April 2003 and will also be
available on request from the Company's registered office at the 43-45 Portman Square, London
W1H 6HN.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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