Final Results
16 September 2003 - 5:01PM
UK Regulatory
RNS Number:7922P
Charterhouse Communications PLC
16 September 2003
CHARTERHOUSE COMMUNICATIONS PLC
16 SEPTEMBER 2003
CHARTERHOUSE COMMUNICATIONS PLC ("Charterhouse" or the "Company")
PRELIMINARY RESULTS FOR THE YEAR TO 31 MAY 2003
CHAIRMAN'S STATEMENT
Salient points of the year's results, before amortisation of goodwill and
intangible assets, are:
* Operating profit #1,026,000 (2002 - #57,000).
* Profit before tax #619,000 (2002 - loss #356,000)
* Operating cash flow #966,000 (2002 - #499,000).
* Cost of sales and administrative expenses reduced by 28%.
Our publications in the mortgage market in which we have a commanding position
serving the consumer, the intermediary and the lender showed a further increased
contribution as lenders maintained advertising in the current housing market.
In contrast our personal investment titles remained depressed with the
background of stock markets performing poorly in an uncertain economic climate
compounded by the run-up to and the Iraq war itself.
Against such a challenging background and revenue decline, every expense has
been under continuous scrutiny resulting in the cost of sales - comprising both
internal operating costs and bought-in supplies - and administrative costs being
reduced by 28% compared to the previous year. 94% of operating profit was
converted to cash.
HS Publications made a reduced but significant contribution. Lower subscription
and advertisement revenues reflected the fewer staff employed by City firms and
the fewer active investors using our reference books - Company REFS, Pinsents
Company Guide, and the Corporate Register. Treasury Management International
was also affected by the international economic climate and its Asian edition by
the SARS epidemic.
The Successful Personal Investing course continued to be published to service
existing subscribers and to provide an update service to past users. As we
ceased promoting the course last year, the elimination of sales costs and lower
overheads resulted in a turnaround from loss to profit - albeit a short-term
benefit as subscriptions expire on completion of the course.
Brand and Co - our distributor of professional books and government publications
- had a good year benefiting from the volume of legislative publications.
RESULTS
Group turnover reduced by 20% due to the run-off of Successful Personal
Investing and to our investment magazines and reference directories.
Operating profit before goodwill amortisation improved to #1,026,000 from
#57,000 last year due to the strict cost controls referred to above. After
goodwill amortisation operating profit was #141,000 compared to a loss of
#8,927,000 last year (after the exceptional amortisation charge).
After interest but before tax and amortisation, profit on ordinary activities
was #619,000 but a loss of #266,000 after amortisation.
Earnings per share before amortisation of goodwill was 0.39p (2002 - loss 0.27p)
and the loss per share after amortisation was 0.33p (2002 - loss 7.56p).
No dividend is recommended for the year.
FINANCING
Conversion of operating profit to cash was 94% which was good as subscription
revenues are deferred over the period to which the receipts relate, and reduce
in times of lower reader interest.
We have the continuing support of our bankers. We have restarted to repay the
bank loan and have agreed new covenants appropriate to the current level of
business.
In place of a commitment fee, the bank has asked for and is to be issued with an
option to subscribe for 1.23 million shares.
STAFF
The staff has endured another year of difficult market conditions against which
to compete and to maintain our publications. They deserve our thanks and
respect for their resilience in such a climate which would demoralise others.
CURRENT PERIOD
The mortgage market remains buoyant whilst interest rates are low and lenders
compete for borrowers by advertising in our magazines.
It is encouraging to note that we are currently experiencing higher than
expected levels of interest in our products for the more expert investor, such
as Company REFS and the newsletter Investing For Growth. The increased sales of
unit trusts and ISAs also are reassuring as personal investors recognise the
recovery in equities after three years of bear markets.
Until the market improvement filters through to increased advertiser and reader
income on our personal investment titles, we continue to be focused on the
strictest cost controls and the competitive marketing of our publications.
BRIAN W ROWBOTHAM
CHAIRMAN
16 September 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 May 2003
2003 2002
#'000 #'000
TURNOVER 10,235 12,858
Cost of sales (6,629) (9,251)
--------- --------
GROSS PROFIT 3,606 3,607
ADMINISTRATIVE EXPENSES
Amortisation of goodwill and intangible assets (885) (1,144)
Exceptional amortisation - (7,840)
Other administrative expenses (2,580) (3,550)
--------- --------
(3,465) (12,534)
OPERATING PROFIT/(LOSS) 141 (8,927)
Share of loss in associate - (43)
Interest receivable 2 10
Interest payable (409) (380)
--------- --------
(LOSS)ON ORDINARY ACTIVITIES BEFORE TAXATION (266) (9,340)
Taxation (144) 18
--------- -------
(Loss)on ordinary activities after taxation (410) (9,322)
Dividends - -
--------- -------
(LOSS) FOR THE FINANCIAL YEAR (410) (9,322)
========= =======
Basic (loss) per share (0.33p) (7.56p)
Diluted (loss) per share (0.33p) (7.56p)
All transactions arise from continuing operations.
There were no gains or losses during the period other than those disclosed
above.
The accompanying accounting policies and notes form an integral part of these
financial statements.
ADDITIONAL INFORMATION
The following are the results before amortisation of goodwill and intangible
assets. This amortisation has no effect on cash flows or corporation tax
payable.
Profit before interest, tax and amortisation 1,026 57
Profit/(loss) before tax and amortisation 619 (356)
Retained profit/(loss) before amortisation 475 (338)
Earnings/(loss) per share before amoritisation and impairment of goodwill and intangible
assets
Basic 0.39p (0.27p)
Diluted 0.38p (0.27p)
CONSOLIDATED BALANCE SHEET
as at 31 May 2003
Group Group
2003 2002
#'000 #'000
FIXED ASSETS
Intangible assets 9,813 11,098
Tangible assets 204 332
------- -------
10,017 11,430
======= =======
CURRENT ASSETS
Stocks 116 201
Debtors: amounts due within one year 1,703 2,288
Debtors: amounts due after one year:
Deferred taxation 428 527
Cash at bank and in hand 133 183
------- -------
2,380 3,199
CREDITORS: amounts due within one year (5,853) (6,645)
------- -------
NET CURRENT LIABILITIES (3,473) (3,446)
------- -------
TOTAL ASSETS LESS CURRENT LIABILITIES 6,544 7,984
CREDITORS: amounts due after more than one year (4,188) (5,218)
-------- --------
NET ASSETS 2,356 2,766
======== ========
CAPITAL AND RESERVES
Called up share capital 1,233 1,233
Share premium account - 6,757
Merger reserve - 1,650
Special reserve 589 -
Profit and loss account 534 (6,874)
------- -------
EQUITY SHAREHOLDERS' FUNDS 2,356 2,766
======== ========
CONSOLIDATED CASH FLOW STATEMENT
for the year ended 31 May 2003
2003 2002
#'000 #'000
Cash flow from operating activities 966 499
Returns on investments and servicing of finance (407) (370)
Taxation (70) (1)
Capital expenditure and financial investment (22) (136)
Equity dividends paid - (284)
--------- --------
CASH FLOW BEFORE FINANCING 467 (292)
Financing (239) (1,163)
--------- --------
INCREASE/(DECREASE) IN CASH IN THE YEAR 228 (1,455)
========= ========
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
INCREASE/(DECREASE) IN CASH IN THE YEAR 228 (1,455)
Cash flow from changes in debt 239 1,163
Other non-cash items 400 550
--------- ----------
MOVEMENT IN NET DEBT IN THE YEAR 867 258
Net debt at 1 June 2002 (7,103) (7,361)
-------- -------
NET DEBT AT 31 MAY 2003 (6,236) (7,103)
======== =======
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1. Nature Of Financial Information
This preliminary results statement has been prepared on the basis of the same
accounting policies as those set out in the financial statements for the year
ended 31 May 2002. The financial information contained in this statement does
not constitute statutory accounts as defined in section 240 of the Companies Act
1985.
The summarised balance sheet at 31 May 2003 and the summarised profit and loss
account, summarised cash flow statement and associated notes for the year then
ended have been extracted from the Group's 2003 financial statements. Those
financial statements have not yet been delivered to the Registrar, nor have the
auditors reported on them. The financial information for the year ended 31 May
2002 is an abridged version of the group's published financial statements for
that year which contained an unqualified audit report and which have been filed
with the Registrar of Companies.
2. Basis of preparation - going concern
Following a twelve-month capital repayment holiday, the Group recommenced
repayments of its bank loan in June 2003. Subject to completion of the
necessary documentation, the loan facility of #5.029 million is now repayable
over a six-year term ending in May 2009. Payments of interest continued to be
made when due. The overdraft facility was reduced to #1.6 million in June 2003.
The Group has prepared profit and cash flow forecasts which are necessarily
dependent on the trading performance of the business. Such is the level of
uncertainty inherent in predicting future trading that in the opinion of the
directors the group may periodically breach its overdraft limit. The ability of
the Group to continue to trade is dependent upon the bank's willingness to
maintain its support in such circumstances and to renew the facility in May
2004. The directors consider that despite these uncertainties the Group has the
support of the bank and it is appropriate to prepare the financial statements on
a going concern basis. The financial statements do not include any adjustments
that would result from a withdrawal of the overdraft facility by the Group's
bankers.
3. Earnings per Share
Basic earnings per share is calculated by dividing the profit after tax for the
year by the weighted average number of shares in issue during the year. In
order to calculate diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to reflect the assumed conversion at the
beginning of the year, or at the date of grant where later, of all dilutive
share options outstanding at the end of the year. An adjusted earnings per share
figure which removes the effect of the amortisation of goodwill and intangible
assets, which have no cash effect, is also shown.
2003 2002
#'000 #'000
(Loss) after tax, after (410) (9,322)
amortisation
Amortisation (885) (8,984)
---------- ----------
Profit/(Loss) after tax, before 475 (338)
amortisation
========== ========
million million
Weighted average number of shares 123.3 123.3
Dilutive options outstanding 2.8 0.1
---------- --------
Diluted average number of shares 126.1 123.4
========== ========
2003 2002
pence Pence
Basic earnings per share
Standard (0.33) (7.56)
Adjusted for amortisation 0.39 (0.27)
Diluted earnings per share
Standard (0.33) (7.56)
Adjusted for amortisation 0.38 (0.27)
4. No dividend is being declared (2002: nil)
5. The annual report and accounts will be posted to shareholders
on 23 September 2003 and will also be available on request from the Company's
registered office at Arnold House, 36-41 Holywell Lane, London EC2A 3SF.
6. The Annual General Meeting will be held at The Tavistock
Institute, 30 Tabernacle Street, London, EC2A 4DD on Tuesday 28 October 2003 at
11am.
END
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