TIDMMSG
MILESTONE GROUP PLC
("Milestone" or the "Company")
Final Results
Milestone, the AIM quoted (AIM: MSG) provider of digital media and
technology solutions, announces its final results for the year ended 30
September 2016.
Highlights
-- Blockchain technology development capabilities now available
-- Nexstar now has the capabilities to publish and distribute independent
films through Amazon Prime and other premium global streaming and
purchasing services
-- Nexstar agreements to provide prepaid card and virtual banking services
-- Post year-end, Nexstar music publishing to 193 countries via 120 online
music stores
-- Membership of the Social Stock Exchange confirmed
-- Co-operation agreements signed with the Green Skills Partnership, the
Sean Edwards Foundation and Apprenticeships 4 England
-- New editorial director appointed to Disorder Magazine
-- Winning in the Game of Life(TM) rolled out across 100 primary schools
classes across the UK
The independent auditor's report for the year ended 30 September 2016
contains an emphasis of matter paragraph in respect of going concern. An
extract taken from the text of the auditor's opinion is set out below in
part 1 of the notes to this announcement.
Deborah White, CEO and Interim Chairman, commented:
"The last 12 months have been about consolidation. Milestone's business
model is to use social initiatives and technology to generate value for
its shareholders and create social impact. This involves a number of
products and services, some that are using Blockchain technology, that
are now ready for market.
Although this past year has been challenging, the continued support of
the Company's shareholders, network of partnerships and its staff has
meant that the Group remains wholly focused on ensuring that all parts
of the business are revenue generating or are ready to drive sales
during the coming months."
For further information
Milestone Group PLC
Deborah White, Chief Executive Tel: 0207 929 7826
Cairn Financial Advisers LLP, Nominated Adviser
Liam Murray/Sandy Jamieson Tel: 0207 213 0880
Hybridan LLP, Broker
Claire Louise Noyce Tel: 0203 764 2341
Walbrook PR Limited, PR
Gary Middleton/Paul Cornelius/Paul Whittington Tel: 0207 933 8780
CHAIRMAN'S STATEMENT
The last 12 months have been about consolidation
Milestone's business model is to use social initiatives and technology
to generate value for its shareholders and create social impact. This
involves a number of products and services that are now ready for
market.
This important period of development has been underpinned by an
expansion of the company's technology capabilities, including a move
towards using Blockchain as the foundation for some of our digital
products and services. This innovative technology is now being
integrated into Nexstar's media and commerce product offerings, with
additional services such as artist IP rights and secure document
tracking under review.
The ability to provide Blockchain technology into a rapidly growing
marketplace is a key differentiator for Milestone and one we will be
actively promoting over the coming months.
Our continued focus on social initiatives is a commercial decision
founded on proven societal values and market trends. Evidence supports
the theory that consumers want to associate with those companies and
brands that add value to others and our company structure has been
established to deliver as such.
In April 2016, Milestone achieved a key goal of being accepted as a
member of the Social Stock Exchange. A listing on the Social Stock
Exchange reaffirms Milestone's status as an established company
combining initiatives for social benefit as well as shareholder value.
This was further reinforced post year-end, with the signing of a
strategic partnership between Milestone and the Social Stock Exchange.
This partnership allows for the cross promotion of each other's products
and services in line with our shared vision regarding the role business
can play in creating community and social value.
Our Flagship Initiative - Passion Project
The Milestone Foundation plays a key role in the operation and ultimate
commercialisation of the Passion Project initiative, which is operated
by the Foundation under a commercial licence from the company.
Following its launch at the House of Lords in October 2015, the
Milestone Foundation is now fully staffed with operations being overseen
by Kevin Everett, Non-Executive Director of the Company and Chairman of
the Sir John Cass Foundation, who has considerable experience in both
the profit and not-for-profit sectors.
The launch of the Foundation was followed during the year by the
formalisation of a number of distribution and support network
relationships needed for the delivery and promotion of the Passion
Project, which included, amongst others, the Green Skills Partnership -
a network of 44 member organisations, comprising of over 2 million
employees collectively - and Apprenticeships 4 England, which has a
member network of over 30,000 businesses.
During the year, the Milestone Foundation and the Passion Project worked
with the Metropolitan Police and its Divert programme. Divert is a new
programme created by the Metropolitan Police Service, aimed at
addressing a gap in statutory provision for young adults aged 18-25
entering police custody by demonstrating and establishing an improved
framework for handling young offenders.
By working with the Milestone Foundation and the Passion Project, Divert
is now equipped to offer emotional intelligence training and mentoring,
aimed at guiding young people into sustainable employment and reduce
reoffending. The pilot programme held in Brixton resulted in a reduction
of the reoffending rate from 29% to 7% during the 12-month period.
After the year-end, the Foundation was successful in a number of grant
funding applications that will be used to fund its activities. Its
strategy of attracting funding for key projects is beginning to see
results, which will result in a reduction in Milestone's operational
responsibilities and development costs.
Launch of Alchemy
As part of the Company's vision of using media and technology for good,
Nexstar developed a fundraising and marketing platform for the
Foundation; this new platform is called Alchemy. Alchemy allows
customers to:
1. buy digital content, with a percentage of each transaction going to the
Foundation;
2. make a donation to the Foundation directly; or
3. help support social initiatives through crowd funding.
The Foundation will use the platform to raise awareness and funding for
its initiatives, whilst also attracting support and attention from the
corporate marketplace and celebrity endorsements. The platform provides
the company with a useful marketing tool for showcasing its products and
services to the Foundation's growing distribution network.
Nexstar
Nexstar has undergone a period of substantial development, streamlining
of process and signing of contracts. The activation of these contracts
has been slower than anticipated with returns expected to develop during
Q2 2017 and with further growth throughout the year.
This part of the business can now be split into three key areas:
1. Digital Financial Services - Including a money-over-IP platform that
supports virtual bank accounts, payroll, loyalty and rewards cards,
prepaid debit cards, blockchain and cryptocurrency. These services
complement the Passion Project by supporting the unbankable and enabling
prepaid card options to be used to receive salary payments.
1. Digital Content Publishing & Distribution - Using Black Cactus' Backstage
HD digital platform, Nexstar's music offering gives independent musicians
and filmmakers an affordable and effective way of publishing and selling
their content online via services such as iTunes, Apple Music, Amazon
Music, Amazon Prime, Spotify and Deezer. This service can be offered to
members of the Passion Project, providing young creatives with an avenue
to promote their talents.
1. Social Media Tools & Analytics - Providing our clients with deep insights
into the reach and success of their social media campaigns and media
publication.
Throughout the past year, Nexstar has developed strategic relationships
with partners needed to deliver these services, including an agreement
in September 2016 to distribute independent film and video to the Amazon
Prime global streaming service. This was followed in October 2016, with
the announcement of the distribution of the first independent film,
Brash Young Turks, to the service.
After the year-end we announced an agreement between Nexstar joint
venture partner, Black Cactus Holdings Pty Ltd ("Black Cactus"), and
Benefits on Madison, Inc. ("Madison") which appointed Nexstar as an
independent sales organisation (ISO) allowing it to issue prepaid and
debit cards, as well as promote, market and solicit orders for Madison's
extensive range of stored-value card services.
Following this announcement, Nexstar entered into agreements to provide
prepaid cards to a number of partners including a UK-based entertainment
organisation for their payroll and an international money transfer
group. Nexstar is now poised to take advantage of the structure that has
been put in place and will continue to play a significant role in the
development of the group.
Relaunch of Disorder Magazine
In April 2016, Oliver Horton was appointed as the Editorial Director of
Milestone's wholly owned subsidiary, Disorder UK Magazine. Under his
direction Disorder Magazine was relaunched in November 2016, with a
clear focus on music, fashion and the championing of young talent. This
was accompanied by a new distribution plan, allowing Disorder's new
quarterly publication to be featured within creative colleges and
universities across the country with plans to sell the magazine
digitally, commencing in Q2 2017.
Winning in the Game of Life(TM)
Our curriculum-based educational programme, which is designed to build
young people's emotional intelligence, is currently undergoing a pilot
in 100 primary school classes across the country. The results of the
pilot will support applications for funding via the Foundation, and
provide evidence for educational partners as part of the Company's sales
and marketing campaign. It will also be used to demonstrate the proof of
concept for expansion and integration into the Passion Project and its
associated initiatives.
Management Changes
In January 2016, Patrick Vigors was appointed as Interim Chief Financial
Officer, joining the management team. Patrick replaced Jim Brown, who
resigned following three years of service to the business to allow him
to focus more on his other business interests.
In February 2017, David Hill resigned from his position as Non-Executive
Director following six years with the Company. The Board are in the
process of appointing Sean Sydenham as his replacement.
Financial Summary
During the year, the Group's net loss was GBP1,667,270 (2015:
GBP1,402,542). Revenues were GBP71,359 (2015: GBP318,035) and net
liabilities at the period end were GBP1,019,656 (2015: GBP1,706,090).
During the year, the Directors agreed to write off a total of GBP704,347
of contingent liability and Directors' trade payables.
These results are presented under European Union Adopted International
Financial Reporting Standards ("EU Adopted IFRS").
Funding
During the year, the Company issued 191,911,950 new ordinary shares for
a total consideration of GBP1,919,120 of which GBP1,823,794 was received
in cash and GBP95,326 was in exchange for goods or services received.
Since the year-end, the Company has issued 298,143,429 new ordinary
shares, raising GBP748,720 in cash and exchanging GBP45,701 worth for
services received. As announced on 9November 2016, a further
GBP1,250,000 of cash was due to have been received for these shares from
the Company's placee and this amount remains outstanding. The Company is
working with the subscriber to find a solution. Funds from this placing
were expected to facilitate investment into marketing, key staff hires
and additional development of the Passion Project.
The Company continues to carefully manage its working capital position
and will need to raise further monies through subscriptions for new
shares in the short term to continue to support its business activities
until the Company is fully revenue generating.
The Company remains firmly focused on generating revenue through all of
its activities, as well as developing further opportunities. Protecting
the interest of the Company's shareholders is a priority and the Board's
strategy is to seek to raise funds on a basis that is fair to all.
Outlook
Although this past year has been challenging, the continued support of
the Company's shareholders, network of partnerships and its staff has
meant that the Group remains wholly focused on ensuring that all parts
of the business are revenue generating or are ready to drive sales
during the coming months.
Deborah White
Chief Executive Officer and Interim Chairman
27 February 2017
Consolidated statement of comprehensive income for the year ended 30
September 2016
2016 2015
GBP GBP
Revenue 71,359 318,035
Cost of sales (13,856) (140,214)
Gross profit 57,503 177,821
Other operating income 1,738 -
Administrative expenses (1,820,652) (1,573,771)
(1,818,914) (1,573,771)
Loss from operations (1,761,411) (1,395,950)
Net finance (expense) / income (2,104) (6,592)
Loss before taxation (1,763,515) (1,402,542)
Taxation charge 96,245 -
Total comprehensive loss for the year (1,667,270) (1,402,542)
Attributable to owners of the parent (1,667,270) (1,402,542)
Basic and diluted loss per share (pence) (0.25) (0.25)
Consolidated statement of financial position at 30 September 2016
2016 2015
GBP GBP
Non-current assets
Intangible assets 1 18,914
1 18,914
Current assets
Trade and other receivables 187,836 63,477
Cash and cash equivalents 128,462 92,495
316,298 155,972
Current liabilities
Trade and other payables (1,201,928) (1,774,449)
Interest bearing loans (134,027) (106,527)
(1,335,955) (1,880,976)
Net liabilities (1,019,656) (1,706,090)
Capital and reserves attributable to
owners of the Company
Share capital 783,998 592,086
Share premium account 15,073,350 13,395,669
Shares to be issued 63,081 502,848
Merger reserve 11,119,585 11,119,585
Capital redemption reserve 2,732,904 2,732,904
Retained losses (30,792,574) (30,049,182)
Total Equity (1,019,656) (1,706,090)
Consolidated statement of cash flows for the year ended 30 September
2016
Cash flow from operating activities 2016 2015
GBP GBP
Loss for the year (1,667,270) (1,402,542)
Adjustments for:
Amortisation of intangible assets 18,913 37,814
Net bank and other interest charges 2,104 (6,592)
Services settled by the issue of shares 45,799 30,619
Issue of share options and warrants charge 883,878 18,235
Net cash before changes in working capital (716,576) (1,322,466)
(Increase) / decrease in trade and other receivables (124,358) 51,507
(Decrease) / increase in trade and other payables (572,523) 444,743
Cash outflow from operations (1,413,457) (826,216)
Interest received 19 10
Interest paid (623) (2)
Net cash flows from operating activities (1,414,061) (826,208)
Financing activities
Issue of ordinary share capital 1,424,028 809,848
Repayment of loan (65,000) (73,500)
New loans raised 91,000 106,500
Net cash flows from financing activities 1,450,028 842,848
Net increase in cash 35,967 16,640
Cash and cash equivalents at beginning of year 92,495 75,855
Cash and cash equivalents at end of year 128,462 92,495
Consolidated statement of changes in equity for the year ended 30
September 2016
Shares to
Share Share be Other Retained Total
Capital Premium issued Reserves Earnings Equity
GBP GBP GBP GBP GBP GBP
Balance at
30 Sept 2014 553,961 13,056,175 40,000 13,852,489 (28,664,875) (1,162,250)
Loss for the
year - - - - (1,402,542) (1,402,542)
Cash received
in advance of
share issue - - 462,848 - - 462,848
Shares issued 38,125 339,494 - - - 377,619
Share options - - - - 18,235 18,235
Balance at
30 Sept 2015 592,086 13,395,669 502,848 13,852,489 (30,049,182) (1,706,090)
Loss for the
year - - - - (1,667,270) (1,667,270)
Cash received
in advance of
share issue - - 63,081 - - 63,081
Contingent
consideration
written off - - (40,000) - 40,000 -
Shares issued 191,912 1,677,681 (462,848) - - 1,406,745
Share options - - - - 883,878 883,878
Balance at
30 Sept 2016 783,998 15,073,350 63,081 13,852,489 (30,792,574) (1,019,656)
Notes to the financial statements
1. Basis of preparation
Milestone Group PLC is a company registered and resident in England and
Wales.
The financial information set out in this announcement does not
constitute the Group's statutory accounts, as defined in Section 435 of
the Companies Act 2006, for the years ended 30 September 2016 or 30
September 2015, but is derived from the 2016 Annual Report. Statutory
accounts for 2015 have been delivered to the Registrar of Companies and
those of 2016 will be delivered in due course.
The consolidated statement of comprehensive income, consolidated
statement of financial position, consolidated cash flow, consolidated
statement of changes in equity (above) and associated notes are extracts
from the financial statements and do not constitute the Group's
statutory accounts.
Statutory accounts for the year to 30 September 2015 and 30 September
2016 have been reported on by the Independent Auditors.
The Group financial statements have been prepared and approved by the
Directors in accordance with International Financial Reporting Standards
as adopted by the EU ("EU Adopted IFRSs").
The Independent Auditor's Report on the Annual Report and Financial
Statements for 2015 and for 2016 was unqualified, but did draw attention
to matters by way of emphasis relating to the basis of preparation,
which is reproduced below.
In forming the Auditor's opinion on the financial statements, which is
not modified, the Auditor's have considered the adequacy of the
disclosure made in note 1 to the financial statements concerning the
group's ability to continue as a going concern. The going concern status
of the group is dependent upon the management of the timing of
settlement of its liabilities and the raising of further funds in the
immediate to short term and thereafter on the forecast profitability of
new strategic partnerships and joint ventures which have recently
commenced and for which the degree of success cannot yet be reliably
demonstrated.
Forecasts prepared by management indicate that if they are unable to
manage the group's liabilities as planned or the external fundraising
does not occur in the immediate term and, subsequently, the future
projects do not prove as profitable as forecast the group would have an
immediate requirement to seek alternative sources of funding. These
conditions, along with the other matters explained in note 1 to the
financial statements, indicate the existence of a material uncertainty
which may cast significant doubt about the group's ability to continue
as a going concern. The financial statements do not include the
adjustments that would result if the group was unable to continue as a
going concern.
The basis of preparation is reproduced below.
Going Concern
The Group's business activities, together with the factors likely to
affect its future development, performance and position are set out in
the Chairman's statement and below. The financial position of the Group,
its cash flows, liquidity position and borrowing facilities are
described in the financial statements. In addition note 15 to the
financial statements includes the Group's objectives, policies and
processes for managing its capital; its financial risk management
objectives; details of its financial instruments and exposures to credit
risk and liquidity risk.
The net liability balance sheet position as at 30 September 2016, being
the Group's financial year-end, was GBP1,019,656 (2015: GBP1,706,090).
Subsequent to the balance sheet date, the Board has been able to agree
funding in the form of further share issues raising GBP748,720 in cash
and exchanged GBP45,701 worth of shares for services received. In
addition, and as discussed in the Chairman's statement, a further
GBP1,250,000 was agreed in the form of further share issue, with the
Company's placee, however this has not been received by the Company. The
Board is continuing to seek a resolution. The funding received to date
will go part way to cover year-end liabilities and the Company will be
dependent upon future funding and revenues to meet the remaining
obligations, as discussed below.
The Company continues to be reliant upon its continuing ability to
manage the timing of settlement both of its current liabilities and
future liabilities as they arise. There is also a need for successful
on-going equity fundraises and / or loans in the immediate to short term
thereafter, while sales plans and projections come into effect,
especially in relation to revenues generated from new strategic
partnerships and joint ventures and from the Passion Project. The Board
has prepared forecasts to reflect the revenues expected to be generated
by the Group and partnerships. The Company is fully focused on ensuring
that sales plans are followed to ensure that the business becomes
self-sustaining in the near future.
The Directors have concluded that the need to generate future funds from
further fundraising and from trading activities to satisfy the
settlement of its on-going and future liabilities represents a material
uncertainty, which may cast significant doubt upon the Group's and the
Company's ability to continue as a going concern. Nevertheless after
making enquiries and considering this uncertainty and the measures that
can be taken to mitigate the uncertainty, the Directors have a
reasonable expectation that the Group and the Company will have adequate
resources to continue in existence for the foreseeable future. For these
reasons they continue to adopt the going concern basis in preparing the
annual report and accounts. The financial statements do not include any
adjustments that would result if the Group and Company was unable to
continue as a going concern.
2. Loss per share
The calculation of the basic loss per share is based on the loss
attributable to ordinary shareholders divided by the weighted average
number of shares in issue during the year. The calculation of diluted
loss per share is based on the basic loss per share, adjusted to allow
for the issue of shares and the post tax effect of dividends and
interest, on the assumed conversion of all other dilutive options and
other potential ordinary shares.
There were 174,189,116 share options and 110,931,460 share warrants
outstanding at the year-end (2015: 104,522,000 and nil). However, the
figures for 2016 and 2015 have not been adjusted to reflect conversion
of these share options as the effects would be anti-dilutive.
2016 2015
Weighted Weighted
Per Per
average share average share
Loss number of amount Loss number of amount
GBP shares Pence GBP shares Pence
Basic and
diluted loss
per share
attributable
to
shareholders (1,667,270) 653,810,277 (0.25) (1,402,542) 572,401,922 (0.25)
3. Posting of Accounts
The Report and Accounts of Milestone Group PLC, including the Notice of
Annual General Meeting will be posted to shareholders shortly.
A further announcement will be made by the Company at such time.
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Milestone Group PLC via Globenewswire
http://www.milestonegroup.co.uk/
(END) Dow Jones Newswires
February 28, 2017 02:00 ET (07:00 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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