RNS Number:8296L
Media Square PLC
03 June 2003
Media Square plc ("Media Square")
3 June 2003
Interim Results for the 6 months to 30 April 2003
Financial and operational highlights for the period:
- Turnover up 119 per cent. from #1.70 million to #3.71 million
- Revenue increased by 124 per cent. from #1.17 million to #2.62 million
- Operating profit increased by 113 per cent. to #147,873 from #69,225
- Net profit before tax improved from #2,602 to #127,085
- Earnings per share up from 0.02 pence to 0.40 pence
- EBITDA improved to #233,350
- Valuable first time contributions from Fourninety and FI Group acquisitions
which were completed in January 2003
- Successful acquisition of the business and assets of Le Fevre
Communications in May 2003
Kevin Steeds, Chairman of Media Square, commented:
"It is encouraging to report that following two years of substantial losses and
the major reorganisation of the business at the end of the previous financial
year, the Group has made a healthy pre tax profit of over #127,000 in the first
six months of the current financial year.
"We continue to operate in difficult market conditions, but are making steady
progress in developing our existing businesses. We have always recognised that,
in order to deliver sustainable shareholder value, we need to substantially
expand the scale of the Group and to that end, we are actively pursuing a number
of exciting opportunities."
For further information, please contact:
Jeremy Middleton Mobile: 07889 206 155
Media Square Plc
Philip Johnson Tel: 0161 214 6540
Brown, Shipley & Co Limited
Company website: www.mediasquare.co.uk
CHAIRMAN'S STATEMENT
Financial Performance
I am very pleased to be able to report that, following two years of substantial
losses, the Group made a profit before taxation of over #127,000 in the six
months to 30 April 2003. Earnings per share increased from just 0.02 pence in
the first six months of last year to 0.40 pence for the current period.
During the period under review the group has expanded its business considerably,
following last year's reorganisation. This has resulted in turnover increasing
from #1.7 million to more than #3.7 million and revenue increasing from just
over #1 million to more than #2.6 million. Operating profits before tax,
interest, depreciation and amortisation of goodwill, were over #233,000.
Although the Group is now profitable, it is still in the early stages of its
development and is not in a position to pay a dividend for the foreseeable
future.
Operations
Following the acquisition of Le Fevre Communications in May - our third major
acquisition this year - the Group now has more than 110 employees based in five
operational locations around the UK. Each of the three business divisions in the
Group - marketing communications, marketing services and e-business - has made
useful contributions to the Group's development during the last six months.
The Group now has an active customer base of some 150 businesses and
organisations around the UK. Major Group clients now include: Argos Stores, ARG
Equation, Marks & Spencer, Littlewoods, Staples, Halifax Bank of Scotland, AXA
Insurance and Leeds City Council. Our focus is firmly in the development of new
retail, financial services and public sector clients, where marketing budgets
are proving more robust.
Acquisitions
A number of further acquisition targets are currently being considered and we
expect to be able to make formal announcements during the next few months. Our
policy is to identify businesses with complementary people, clients and culture
to our own so that we can enhance the profitability and performance of existing
businesses within the Group.
The acquisition of the business of Le Fevre Communications provides us with an
expert PR team and some ten new clients. The business has been merged with our
marketing communications division - Equanim Group - and we expect it to add to
the Group's profits for the second half.
Outlook
The market conditions in which the Group operates continue to be difficult and,
along with our peer group, the visibility of future revenues makes it difficult
to predict future earnings with any degree of certainty. We have streamlined our
core operations and have instituted development plans for both existing and new
business.
On behalf of the board, I wish to thank all our employees for their continued
commitment and flexibility over the past six months. I would also like to
express my thanks to the executive directors who have continued their good work
in laying the foundations for success in the future.
Kevin Steeds
Chairman
2 June 2003
consolidated SUMMARISED PROFIT AND LOSS ACCOUNT
For the period ended 30 April 2003
6 months 6 months Year ended
ended 30 April ended 30 April 31 October
2003 2002 2002
Note Unaudited Unaudited Audited
# # #
Turnover
- continuing 2,243,395 1,697,799 2,833,634
operations
- acquisitions 1,471,120 - 1,886,621
------------- -------------- --------------
3,714,516 1,697,799 4,720,255
- discontinued - - 165,395
operations
------------- -------------- --------------
3,714,516 1,697,799 4,885,650
Material cost of (1,096,744) (526,670) (1,815,372)
sales
------------- -------------- --------------
Revenue 2,617,771 1,171,129 3,070,278
============= ============== ==============
Gross profit
- continuing 512,254 513,696 866,431
operations
- acquisitions 461,888 - 506,053
------------- -------------- --------------
974,142 513,696 1,372,484
- discontinued - - (25,978)
operations
------------- -------------- --------------
974,142 513,696 1,346,506
============= ============== ==============
Operating profit/
(loss)
- continuing 75,293 69,225 (251,906)
operations - pre
exceptional items
- continuing - - (244,616)
operations -
exceptional items
------------- ------------- --------------
75,293 69,255 (496,522)
- acquisitions pre 72,580 - 159,687
exceptional items
------------- -------------- --------------
147,873 69,225 (336,835)
- discontinued - - (39,088)
operations
------------- -------------- --------------
147,873 69,225 (375,923)
Loss arising in respect of - - (445,792)
closure of subsidiary
undertaking
Interest payable less (20,788) (66,623) (100,814)
interest receivable
------------- -------------- --------------
Profit/(loss) on 127,085 2,602 (922,529)
ordinary activities
before taxation
Tax on profit/(loss) - - -
on ordinary
activities
------------- -------------- --------------
Profit/(loss) on 127,085 2,602 (922,529)
ordinary activities
after taxation
Dividends - - -
------------- -------------- --------------
Profit/(loss) 3 127,085 2,602 (922,529)
transferred to/(from)
reserves
============= ============== ==============
Basic earnings/(loss) 2 0.40p 0.02p (4.51p)
per share
============= ============== ==============
Diluted earnings/ 2 0.39p 0.02p (4.43p)
(loss) per share
============= ============== ==============
There were no recognised gains or losses other than the loss for the financial
period.
CONSOLIDATED BALANCE SHEET
At 30 April 2003
At At At
30 April 30 April 31 October
2003 2002 2002
Note Unaudited Unaudited Audited
# # #
Fixed assets
Intangible assets 1,668,589 1,139,326 1,508,555
Tangible assets 1,213,788 1,118,840 846,922
------------- -------------- --------------
2,882,377 2,258,166 2,355,477
Current assets
Stocks 90,256 33,156 112,131
Debtors 2,106,207 794,394 1,346,439
Cash at bank and in - 126,171 76
hand
------------- -------------- --------------
2,196,463 953,721 1,458,646
Creditors: amounts (3,332,620) (1,813,676) (2,141,214)
falling due within one
year
------------- -------------- --------------
Net current (1,136,157) (859,955) (682,568)
liabilities
------------- -------------- --------------
Total assets less 1,746,220 1,398,211 1,672,909
current liabilities
Creditors: amounts (853,323) (955,019) (907,097)
falling due after one
year
------------- -------------- --------------
Net assets 892,897 443,192 765,812
============= ============== ==============
Capital and reserves
Called up share 1,592,357 693,666 1,592,357
capital
Share premium 2,648,379 2,299,319 2,648,379
account
Profit and loss (3,347,839) (2,549,793) (3,474,924)
account
------------- -------------- --------------
Equity shareholders' 3 892,897 443,192 765,812
funds
============= ============== ==============
CONSOLIDATED CASH FLOW STATEMENT
For the period ended 30 April 2003
6 months 6 months Year
ended ended ended
30 April 30 April 31 October
2003 2002 2002
Note Unaudited Unaudited Audited
# # #
Net cash (outflow)/ 4 (172,888) 587,265 499,930
inflow from operating
activities
Returns on investments
and servicing of
finance
Interest received - - 1,742
Interest paid (16,206) (25,770) (37,346)
Hire purchase interest (4,582) (40,853) (65,210)
paid
------------- -------------- -------------
Net cash (outflow)
from returns on
investments
and servicing of (20,788) (66,623) (100,814)
finance
Taxation
UK corporation tax - 22,000 22,000
refund
------------- -------------- --------------
Capital expenditure
and financial
investment
Purchase of tangible (79,120) (28,564) (64,988)
fixed assets
------------- -------------- --------------
Net cash outflow from (79,120) (28,564) (64,988)
capital expenditure
and financial
investment
------------- -------------- --------------
Acquisitions and
disposals
Purchase of subsidiary (38,288) - (442,425)
undertakings
------------- -------------- --------------
Net cash outflow from (38,288) - (442,425)
acquisitions and
disposals
------------- -------------- --------------
Financing
Issue of ordinary - - 475,657
share capital
Share issue costs - - (106,949)
Repayment of loan (243,392) (202,847) (22,129)
notes
Loans advanced 420,000 - -
Capital element of (10,210) (58,600) (136,256)
hire purchase
agreements
Repayment of bank (129,229) - (335,437)
loans
------------- -------------- --------------
Net cash inflow/ 37,169 (261,447) (125,114)
(outflow) from
financing
============= ============== ==============
(Decrease)/increase in 5 (273,915) 252,631 (211,411)
cash
============== ============= ==============
NOTES TO THE INTERIM STATEMENT
For the period ended 30 April 2003
1 BASIS OF PREPARATION
The consolidated interim financial statements have been prepared in accordance
with applicable accounting standards and under the historical cost convention.
The principal accounting policies of the group have remained unchanged from
those set out in the group's 2002 annual report and financial statements.
The financial information set out in this interim report does not constitute
statutory accounts as defined by section 240 of the Companies Act 1985. The
figures for the year ended 31 October 2002 have been extracted from the
statutory financial statements which have been filed with the Registrar of
Companies. The auditors' report on those financial statements was unqualified
and did not contain a statement under section 237(2) of the Companies Act 1985.
2 EARNINGS/(LOSS) PER SHARE
The calculation of the basic and diluted earnings/(loss) per share is based on
the profit/(loss) on ordinary activities after tax and on the weighted average
number of ordinary shares in issue during the period.
The profit/(loss) and weighted average number of shares used in the calculations
are set out below:
Basic earnings/(loss) per share Weighted
average number Earnings/(loss)
Profit/(loss) of shares per share
# pence
Six months ended 30 April 2003 127,085 31,847,164 0.40
======== ========== ========
Six months ended 30 April 2002 2,602 13,875,336 0.02
======== ========== ========
Year ended 31 October 2002 (922,529) 20,471,941 (4.51)
======== ========== ========
Diluted earnings/(loss) per share Weighted
average number Earnings/(loss)
Profit/(loss) of shares per share
# pence
Six months ended 30 April 2003 127,085 32,401,304 0.39
======== ========== ========
Six months ended 30 April 2002 2,602 14,116,536 0.02
======== ========== ========
Year ended 31 October 2002 (922,529) 20,829,743 (4.43)
======== ========== ========
3 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
At At At
30 April 30 April 31 October
2003 2002 2002
Unaudited Unaudited Audited
# # #
Profit/(loss) for the 127,085 2,602 (922,529)
financial period
Issue of ordinary share - - 1,247,751
capital
Net increase in shareholders' 127,085 2,602 325,222
funds
Shareholders' funds at 765,812 440,590 440,590
beginning of period
------------- -------------- --------------
Shareholders' funds at end of 892,897 443,192 765,812
period
============= ============== ==============
4 NET CASH OUTFLOW FROM OPERATING ACTIVITIES
6 months 6 months Year
ended ended ended
30 April 30 April 31 October
2003 2002 2002
Unaudited Unaudited Audited
# # #
Profit/(loss) for the 147,873 69,225 (375,923)
financial period
Depreciation 85,477 131,753 381,069
Goodwill amortisation and 41,427 25,674 81,673
impairment
Decrease/(increase) in 27,431 25,799 (36,222)
stock
(Increase)/decrease/ in (235,851) 59,894 462,266
debtors
(Decrease)/increase in (239,245) 274,920 (12,933)
creditors
------------- ------------- -------------
Net cash (outflow)/inflow (172,888) 587,265 499,930
from operating activities
============= ============= =============
5 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
6 months 6 months Year
ended ended ended
30 April 30 April 31 October
2003 2002 2002
Unaudited Unaudited Audited
# # #
(Decrease)/increase in cash (273,915) 252,631 (211,411)
in the period
Repayment of debt 243,392 202,847 335,437
Cash outflow from finance 10,210 58,600 136,256
leases
Cash outflow from bank 129,229 - 22,129
loans
------------- ------------- --------------
Change in net debt resulting 108,916 514,078 282,411
from cash flows
Inception of finance leases - - (13,941)
Net debt acquired (126,968) - (219,245)
On closure of subsidiary - - 485,972
undertakings
Loans advanced (420,000) - -
Loan notes advanced on - - (150,000)
acquisition
------------- ------------- --------------
Movement in net debt in the (438,052) 514,078 385,197
period
Net debt at the beginning of (1,627,748) (2,012,945) (2,012,945)
the period
------------- ------------- --------------
Net debt at the end of the (2,065,800) (1,498,867) (1,627,748)
period
============= ============= ==============
6 COPIES OF THESE INTERIM RESULTS WILL BE SENT TO SHAREHOLDERS.
This information is provided by RNS
The company news service from the London Stock Exchange
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IR UUSBROORNRAR