Interim Results
29 July 2002 - 5:00PM
UK Regulatory
RNS Number:2017Z
Internet Business Group
29 July 2002
INTERNET BUSINESS GROUP PLC ('IBG' OR THE 'COMPANY')
INTERIM RESULTS FOR THE
SIX MONTH PERIOD ENDED 30 APRIL 2002
Financial Highlights
Six months Six months Year
ended ended ended
30 April 2002 30 April 2001 31 October 2001
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Turnover 620 757 1,078
Loss before interest, tax, depreciation and (236) (897) (1,206)
amortisation
Loss on ordinary activities after taxation and (321) (1,400) (2,911)
minority interest
Cash at bank 324 867 525
Key Points
• Existing e-commerce operations increase marketing activities
• Rationalisation of professional services and tight cost controls
contribute to significantly reduced losses
• SimplyMotorsport.com, a Formula 1 e-commerce site launched
• AffiliateFuture.co.uk launched, marking IBG's entry into the performance
based marketing arena
Maziar Darvish, Chairman commented:
"We are now starting to see the benefits of the downsizing and restructuring of
the professional services and hosting divisions implemented during the last
financial year. This, coupled with the Company's change of focus towards
e-commerce and the growth being achieved in that area, enables us to be
cautiously optimistic about the future."
Enquiries
Internet Business Group plc 07974 919 017
Maziar Darvish
CHAIRMAN'S STATEMENT
Introduction
I am pleased to announce our interim results for the six month period ended 30
April 2002.
Results
Turnover for the first half of the year was £620,000 (2001:£757,000) and the
loss after taxation and minority interests was substantially reduced to £321,000
(2001: £1,400,000). However, in comparison to the second half of the previous
financial year, turnover increased by 93.1% and losses after tax and minority
interests were reduced by 78.8%. This reflects our increased focus on
e-commerce opportunities and the successful downsizing of the Company's
professional services division.
Business Review
Following much turmoil last year, IBG's professional services and hosting
businesses have stabilised and a lot of time and effort has been invested in
improving the quality and efficiency of both services. In addition, IBG has
strengthened its relationships with existing clients as well as winning new
ones.
IBG's e-commerce businesses are performing well and now represent the fastest
growing segment of the business. The largest element of the e-commerce business
remains Sweatband.com, which was originally an investment by IBG until the
remaining share capital was acquired in October 2001.
Sweatband.com continues to expand both its product range as well as marketing
agreements. Major initiatives so far in 2002 have included the following:
1. Launch of a major tennis mail order catalogue, in partnership with the Lawn
Tennis Association.
2. Launch of a co-branded sports equipment shop with the Telegraph's sports
website (sports.telegraph.co.uk)
GadgetHub.co.uk and SimplyPicnic.co.uk have performed in line with management's
expectations and will continue to operate as part of IBG's overall e-commerce
offering. The e-commerce product range has recently been expanded through the
launch of SimplyMotorSport.com, a specialist retailer of Formula 1 merchandise.
In addition, the Company has put in place a number of performance criteria to
enable rapid assessment of each e-commerce venture to ensure efficient
deployment of management time.
Outside consumer e-commerce, IBG has expanded its transactional operations
through the launch of a performance based marketing network branded as Affiliate
Future (http://www.affiliatefuture.co.uk). Since its launch in late February
2002, the network has attracted over 20 merchants. Typically, each merchant pays
a monthly subscription fee as well as a surcharge on all monies spent through
the network. Whilst the actual level of revenues from this operation is
currently small, the network provides IBG with a platform for incremental
growth.
Finances
As at 30 April 2002, the Company had cash of £324,000. The Company's cash
position as at 30 June 2002 was £314,000.
Resignation of Director
Roelof Quintus has resigned from the board with immediate effect to pursue other
business interests. On behalf of the board, I would like to thank Roelof for his
positive contribution to the business. The board will be looking to appoint a
new non-executive director as soon as an appropriate candidate becomes
available.
Outlook
The results for the first half of the year demonstrate that the Company has made
considerable progress through increasing revenue from its e-commerce activities,
reducing its losses and maintaining tight control over its cash flow. I am
happy with the progress that has been made and believe that the Company should
be able to progress towards profitability over the next 12 months.
Maziar Darvish
Chairman
29 July 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Six months Six months Year
ended ended ended
30 April 2002 30 April 2001 31 October 2001
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Turnover 620 757 1,078
Cost of sales (581) (1,098) (1,678)
Gross profit/(loss) 39 (341) (600)
Distribution costs (35) (86) (141)
Administration expenses (331) (555) (2,224)
Operating loss (327) (982) (2,965)
Interest receivable (net) 6 23 43
Amounts written off investments - (448) -
Loss on ordinary activities before taxation (321) (1,407) (2,922)
Taxation - - -
Loss on ordinary activities after taxation (321) (1,407) (2,922)
Minority interest - 7 11
Retained loss for the period (321) (1,400) (2,911)
Basic loss per share (0.51p) (2.67p) (5.52p)
Fully diluted loss per share (0.51p) (2.67p) (5.52p)
CONSOLIDATED BALANCE SHEET
As at As at As at
30 April 30 April 31 October 2001
2002 2001 (Audited)
(Unaudited) (Unaudited)
£'000 £'000 £'000
Fixed assets
Intangible assets 382 438 414
Tangible assets 168 254 217
Investments 24 704 24
574 1,396 655
Current assets
Stock 15 - -
Debtors 328 720 393
Bank deposits 324 867 525
667 1,587 918
Creditors: amounts falling due within one year (320) (382) (330)
Net current assets 347 1,205 588
Total assets less current liabilities 921 2,601 1,243
Creditors: amounts falling due after one year - (4) -
Net assets 921 2,597 1,243
Share capital and reserves
Called up share capital 631 523 631
Share premium account 3,986 3,933 3,986
Other reserves 135 497 135
Profit and loss account (3,821) (2,350) (3,500)
Equity shareholders' funds 931 2,603 1,252
Minority interest (10) (6) (9)
921 2,597 1,243
CONSOLIDATED CASHFLOW STATEMENT
Six months Six months Year
ended ended ended
30 April 2002 30 April 2001 31 October 2001
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Net cash outflow from operating (196) (804) (1,127)
activities
Returns on investments and servicing 6 23 87
of finance
Capital expenditure and financial (11) (12) (119)
Investment
Acquisitions and disposals - - 23
Net cash outflow before management (201) (793) (1,136)
of liquid resources
Management of liquid resources - - 1,168
Financing - (1) -
(Decrease)/Increase in cash in the (201) (794) 32
period
RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
Six months Six months Year
ended ended ended
30 April 2002 30 April 2001 31 October 2001
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Operating loss (327) (982) (2,965)
Depreciation charge 49 57 110
Amortisation and impairment of 42 28 1,019
intangible fixed assets and investment
Loss on disposal of tangible fixed assets - 5 50
Decrease in debtors 64 196 826
Increase in stock (15) - -
Decrease in creditors (10) (108) (167)
Net cash outflow from operating (196) (804) (1,127)
activities
NOTES TO THE INTERIM ACCOUNTS
FOR THE PERIOD ENDED 30 APRIL 2002
1. Board Approval
The interim accounts were approved by the board of directors on 25 July 2002.
2. Basis of preparation
The interim financial information for the six months ended 30 April 2002 is
unaudited and does not constitute statutory accounts. However, the interim
financial information has been reviewed by the Company's auditors whose report
is set out below and has been prepared on the basis of the accounting policies
set out in the audited financial statements for the period ended 31 October
2001. The figures for the year ended 31 October 2001 have been extracted from
the Company's statutory accounts on which the auditors gave an unqualified
report and which have been filed with the Registrar of Companies.
3. Amounts written off investments
Amounts written off investments of £448,000 for the six months ended 30 April
2001 were subsequently re-classified within administration expenses in the full
year results to 31 October 2001.
4. Earnings per share
Basic loss per share is calculated based on the loss on ordinary activities
after tax and minority interests divided by the weighted average number of
shares in issue being 63,083,517 (2001: 52,345,422).
The calculation of diluted earnings per share uses the same basic loss per share
and weighted average number of shares as the calculation of basic earnings per
ordinary share. This is because the exercise of share options would have the
effect of reducing the loss per ordinary share and is therefore not dilutive
under the terms of FRS 14.
5. Gains and losses
The Company had no recognised gains or losses in either the current or preceding
periods other than the loss for the period.
INDEPENDENT REVIEW REPORT BY BAKER TILLY TO
INTERNET BUSINESS GROUP PLC
Introduction
We have been instructed by the Company to review the financial information set
out above, and we have read the other information contained in the interim
report, and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by, the directors. The directors
have decided in preparing this interim report that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts, except where they are to be
changed in the next annual accounts, in which case any changes, and the reasons
for them, are to be disclosed.
Review work performed
We conducted our review in accordance with guidance contained in "Bulletin
1999/4: Review of Interim Financial Information" issued by the Auditing
Practices Board. A review consists principally of making enquiries of management
and applying analytical procedures to the financial information and underlying
financial data and, based thereon, assessing whether the accounting policies and
presentation have been consistently applied unless otherwise disclosed. A review
excludes audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with Auditing Standards and therefore provides a lower
level of assurance than an Audit. Accordingly we do not express an audit opinion
on the financial information.
Review conclusion
On the basis of our review, we are not aware of any material modifications that
should be made to the financial information as presented for the period ended 30
April 2002.
Baker Tilly
Chartered Accountants
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