Interim Report

RNS Number : 7954T
Aeorema Communications Plc
25 March 2019
 

Aeorema Communications plc / Index: AIM / Epic: AEO / Sector: Media

 

25 March 2019

Aeorema Communications plc ('Aeorema' or 'the Company')

 

Interim Report

 

Aeorema Communications plc, the AIM-traded live events agency, announces its unaudited results for the six months ended 31 December 2018.

 

Financial & Operational Overview

 

·     Revenues of £1,997,303, a year-on-year increase of 7% (2017: £1,869,439)

·     Operating loss pre-exceptional items of £141,765 (2017: profit £81,028)

·     Recruitment of key new senior staff has impacted costs

·     Robust cash position of £1,030,956 (2017: £1,038,130)

·     Notable new client wins

·     Continuing to build presence in the rapidly growing experiential events sector

·     Trading remains in line with market expectations for the full year to 30 June 2019

 

Chairman's Statement

 

During the period, Aeorema has been delivering on its strategy of building on the Company's core business by providing enhanced services to clients, in particular the move into experiential events.  As outlined in the Company's year-end results to 30 June 2018, this has led to a series of new business wins in the current period with both new and existing clients.

 

These wins include a substantial three-year contract with a large media company for an annual event in Cannes. It also has won a leadership event for a professional services company and has a good pipeline of opportunities for 2019/2020. These are in addition to projects from existing clients both this year, and scheduled for 2020.

The recruitment of two senior executive staff has increased costs in the short term but is expected to contribute to revenue growth going forward. Revenue is up 7% to £1,997,303 (2017: £1,869,439), however due to increased costs in the period, the Company is showing an operating loss for the period of £141,765 (2017: profit £81.028). The Company's cash position remains robust at £1,030,956. This position means the Company intends to pay a full year dividend, subject to the final audited results for the full year.

 

The first half loss was anticipated due to recruitment costs and increased salaries. This investment is already producing results and creates a structure for growth. A key focus has been on account management and growing revenues from existing clients. The new team were instrumental in winning a significant new Cannes Lions project for June this year and they have also helped win other new projects for this year and next. Cannes Lions International Festival of Creativity is a global event for those working in creative, communications, advertising and related fields. The Company has spent several years staging innovative events at Cannes Lions which have typically provided a substantial part of the Group's annual revenues.

It is customary for Aeorema's revenues to be second half weighted and anticipated and committed second half revenues are strong which gives the Board a good level of confidence that the Company will deliver full year results in line with market expectations.

 

The Company has a strong market reputation in the delivery of creative and differentiated live events, and we remain focused on building an industry-leading, cash generative, dividend-paying business with a high quality, blue-chip client base. In addition, the Company has explored, and continues to explore, value accretive acquisitions whose business or businesses are complementary to the existing offering and will help Aeorema build its position in the events and experiential category. To this end, we continue to seek to drive growth and innovation both in-house and via value accretive growth opportunities.

 

Finally, I would like to thank our employees for their hard work and commitment, as well as our shareholders for their continued support.

 

M Hale

Chairman

22 March 2019

 

 

 

 

 

 

AEOREMA COMMUNICATIONS PLC

CONDENSED CONSOLIDATED INCOME STATEMENT

For the period ended 31 December 2018

 

 

 

 

 

 

 

Unaudited

6 Months to 31 December 2018

Unaudited

6 Months to 31 December 2017

Audited

Year to

30 June

2018

 

 

 

 

 

 

Notes

£

£

£

Continuing Operations

 

 

 

 

 

 

 

 

 

Revenue

 

1,997,303

1,869,439

4,820,167

Cost of sales

 

(1,257,963)

(1,081,034)

(3,033,514)

 

 

 

 

 

Gross profit

 

739,340

788,405

1,786,653

 

 

 

 

 

Administrative expenses

 

(881,105)

(707,377)

(1,497,003)

 

 

 

 

 

Operating profit / (loss) pre exceptional items

 

(141,765)

81,028

289,650

 

 

 

 

 

Exceptional items

4

-

(231,357)

(231,357)

 

 

 

 

 

Operating profit / (loss) post exceptional items

 

(141,765)

(150,329)

58,293

 

 

 

 

 

Finance income

 

287

162

392

 

 

 

 

 

Profit / (loss) before taxation

 

(141,478)

(150,167)

58,685

Taxation

6

26,939

26,587

(8,280)

 

 

 

 

 

Profit / (loss) for the period from continuing operations

 

 

(114,539)

 

(123,580)

 

50,405

 

 

 

 

 

 

 

 

 

 

Basic and diluted earnings per share from continuing operations

 

 

 

 

 

 

 

 

 

Basic (pence)

7

(1.26555)

(1.36545)

0.55693

Diluted (pence)

7

(1.17115)

(1.30156)

0.53906

 

 

There are no other comprehensive income items

 

 

 

 

 

 

 

 

 

 

 

 

AEOREMA COMMUNICATIONS PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

For the period ended 31 December 2018

 

 

 

 

 

Unaudited

6 Months to 31 December 2018

Unaudited

6 Months to 31 December 2017

Audited

Year to

30 June

2018

 

 

 

 

 

 

 

£

£

£

 

 

 

 

 

Non-current assets

 

 

 

 

Intangible assets

 

365,154

365,154

365,154

Property, plant and equipment

 

54,848

31,898

37,044

Deferred taxation

 

29,193

22,274

2,254

 

 

449,195

419,326

404,452

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

 

806,122

872,650

1,106,292

Cash and cash equivalents

 

1,030,956

1,038,130

1,437,904

 

 

1,837,078

1,910,780

2,544,196

 

 

 

 

 

 

 

 

 

 

Total assets

 

2,286,273

2,330,106

2,948,648

 

 

 

 

 

Current liabilities

 

 

 

 

Bank loans and overdrafts

 

-

-

1,590

Trade and other payables

 

714,512

772,303

1,274,979

Dividends payable

 

67,879

45,252

-

Current tax payable

 

9,412

23,868

9,412

 

 

791,803

841,423

1,285,981

 

 

 

 

 

 

 

 

 

 

Net assets

 

1,494,470

1,488,683

1,662,667

 

 

 

 

 

 

 

 

 

 

Equity attributable to equity holder:

 

 

 

 

Share capital

 

1,131,313

1,131,313

1,131,313

Share premium

 

7,063

7,063

7,063

Merger reserve

 

16,650

16,650

16,650

Other reserve

 

14,221

-

-

Capital contribution reserve

 

257,812

257,812

257,812

Retained earnings

 

67,411

75,845

249,829

 

 

 

 

 

Total equity

 

1,494,470

1,488,683

1,662,667

 

 

AEOREMA COMMUNICATIONS PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the period ended 31 December 2018

 

 

 

Share capital

Share

Premium

Merger reserve

Other reserve

Capital contribution reserve

Retained earnings

Total equity

 

£

£

£

£

£

£

£

 

 

 

 

 

 

 

 

At 1 July 2017

1,131,313

7,063

16,650

-

257,812

244,677

1,657,515

Payment of dividends

-

-

-

-

-

(45,252)

(45,252)

Comprehensive income for the period

-

-

-

-

-

(123,580)

(123,580)

 

At 31 December 2017

 

1,131,313

 

7,063

 

16,650

 

-

 

257,812

 

75,845

 

1,488,683

 

 

 

 

 

 

 

 

 

At 1 January 2018

1,131,313

7,063

16,650

-

257,812

75,845

1,488,683

Payment of dividends

-

-

-

-

-

-

-

Comprehensive income for the period

-

-

-

-

-

173,984

173,984

 

At 30 June 2018

 

1,131,313

 

7,063

 

16,650

 

-

 

257,812

 

249,829

 

1,662,667

 

 

 

 

 

 

 

 

 

At 1 July 2018

1,131,313

7,063

16,650

-

257,812

249,829

1,662,667

Payment of dividends

-

-

-

-

-

(67,879)

(67,879)

Comprehensive income for the period

-

-

-

-

-

(114,539)

(114,539)

Share-based payments

-

-

-

14,221

-

-

14,221

 

At 31 December 2018

 

1,131,313

 

7,063

 

16,650

 

14,221

 

257,812

 

67,411

 

1,494,470

 

 

 

 

AEOREMA COMMUNICATIONS PLC

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the period ended 31 December 2018

 

 

 

 

Unaudited

6 Months to 31 December 2018

Unaudited

6 Months to 31 December 2017

Audited

Year to

30 June

2018

 

 

£

£

£

Cash flow from operating activities

 

 

 

 

Profit/(loss) before taxation

 

(141,478)

(150,167)

58,685

Adjustments for:

 

 

 

 

Depreciation of property, plant and equipment

 

10,687

11,850

20,416

Share-based payment

 

14,221

-

-

Finance income

 

(287)

(162)

(392)

Operating cash flow before movement in working capital

 

(116,857)

(138,479)

78,709

Decrease in trade and other payables

 

(560,467)

(843,300)

(340,624)

Decrease in trade and other receivables

 

300,170

134,942

(98,700)

Cash (used in) / generated from operating activities

 

(377,154)

(846,837)

(360,615)

 

 

 

 

 

Taxation paid

 

-

-

(29,303)

 

 

 

 

 

Cash flow from investing activities

 

 

 

 

Finance income

 

287

162

392

Purchase of property, plant and equipment

 

(28,491)

(12,407)

(26,119)

Net cash used in investing activities

 

(28,204)

(12,245)

(25,727)

 

 

 

 

 

Cash flow from financing activities

 

 

 

 

Dividends paid

 

-

-

(45,253)

Net cash used in financing activities

 

-

-

(45,253)

 

 

 

 

 

Net increase / (decrease) in cash and cash equivalents

 

(405,358)

(859,082)

(460,898)

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

1,436,314

1,897,212

1,897,212

 

 

 

 

 

Cash and cash equivalents at end of period

 

1,030,956

1,038,130

1,436,314

 

 

 

 

 

 

 

 

 

 

AEOREMA COMMUNICATIONS PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the period ended 31 December 2018

 

1.    General information

 

Aeorema Communications plc is a public limited company incorporated within the United Kingdom. The company is domiciled in the United Kingdom and its principal place of business is 23-31 Great Titchfield Street, London, W1W 7PA. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange.

 

These condensed consolidated interim financial statements for the period ending 31 December 2018 (including comparatives for the periods ended 31 December 2017 and 30 June 2018) were approved by the board of directors on 22 March 2019.

 

The financial information set out in this interim report does not constitute statutory accounts for the purposes of section 434 of the Companies Act (2006). The Group's statutory financial statements for the year ended 30 June 2018, prepared under International Financial Reporting Standards (IFRS), have been filed with the Registrar of Companies. The auditor's report for those financial statements was unqualified and did not contain a statement under section 498 (2) or section 498 (3) of the Companies Act (2006).

 

The interim financial statements have been prepared using the accounting policies set out in the Group's 2018 statutory accounts and have not been audited.

 

Copies of the annual statutory financial statements and the interim report can be found on our website at www.aeorema.com or can be requested from the Company Secretary at the Company's registered office: 64 New Cavendish Street, London, W1G 8TB.

 

2.    Basis of preparation

 

These condensed consolidated interim financial statements for the period ended 31 December 2018 have been prepared in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. The interim condensed consolidated financial statements should be read in conjunction with the annual financial statements for the year ended 30 June 2018, which have been prepared in accordance with IFRS as adopted by the European Union

 

3.    Summary of significant accounting policies

 

The accounting policies adopted are consistent with those of the annual financial statements for the year ended 30 June 2018, as described in those annual financial statements. There has been no impact on the Group's financial position or performance from new and amended IFRS and IFRIC interpretations mandatory as of 1 July 2018.

 

4.    Exceptional items

 

Items that are material either because of their size or their nature, or that are non-recurring, are considered as exceptional. During the interim period, the Group incurred expenditure totalling £nil (2017: £231,357 in relation to the departure of its two founders, Peter Litten and Gary Fitzpatrick, from the board of directors). This cost has been included in the condensed consolidated interim Income Statement as an operating exceptional cost.

 

 

 

 

 

 

 

 

 

 

AEOREMA COMMUNICATIONS PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the period ended 31 December 2018

 

5.    Revenue and segmental results

 

The Company uses several factors in identifying and analysing reportable segments, including the basis of organisation such as differences in products and geographical areas. The Board of Directors, being the chief operating decision makers, has determined that for the period ended 31 December 2018 there is only one reportable operating segment.

 

6.    Income tax charge

 

Income period tax is accrued based on the estimated average annual effective income tax rate of 19 per cent. (2017: 19 per cent.).

 

7.    Earnings per share

 

Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

 

Diluted earnings per share are calculated by dividing the profit attributable to ordinary owners of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would have been issued on the conversion of all dilutive potential ordinary shares into ordinary shares.

 

The following reflects the income and share data used and dilutive earnings per share computations:

 

 

Unaudited 6 Months to 31 December 2018

Unaudited 6 Months to 31 December 2017

Audited Year to 30 June 2018

 

 

 

 

Profit/(loss) for the year attributable to owners of the Company

(114,539)

(123,580)

50,405

 

 

 

 

Number of shares

 

 

 

 

 

 

 

Basic weighted average number of shares

9,050,500

9,050,500

9,050,500

 

 

 

 

Effect of dilutive share options

729,508

444,262

300,000

 

 

 

 

Diluted weighted average number of shares

9,780,008

9,494,762

9,350,500

 

 

 

 

 

8.    Dividends

 

During the interim period a dividend of 0.75 pence (2017: 0.5 pence) per share was declared to holders of the Company's ordinary shares in respect of the full year ended 30 June 2018.

 

 

 

 

AEOREMA COMMUNICATIONS PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the period ended 31 December 2018

 

9.    Related party transactions

 

The Group has a related party relationship with its subsidiaries and its directors. Transactions between Group companies, which are related parties, have been eliminated on consolidation and are therefore not included in these consolidated interim financial statements.

 

 

Unaudited 6 months to 31 December 2018

Unaudited 6 months to 31 December 2017

 

£

£

Subsidiaries

 

 

Amounts owed by/(to) subsidiaries

1,042,080

1,020,183

Amounts owed by/(to) subsidiaries

1,042,080

1,020,183

 

 

 

Harris & Trotter LLP is a firm in which Stephen Haffner is a member. The following was charged to the Group in respect of professional services.

 

 

Unaudited 6 Months to 31 December 2018

Unaudited 6 Months to 31 December 2017

Harris & Trotter LLP

£

£

Aeorema Communications plc

7,500

7,500

Aeorema Limited

7,950

17,900

 

15,450

25,400

 

Fees charged to Aeorema Communications plc include £7,500 (2017: £7,500) for the services of Stephen Haffner as a non-executive director of that company.

 

The compensation of key management (including directors) of the Group is as follows:

 

 

Unaudited 6 Months to 31 December 2018

Unaudited 6 Months to 31 December 2017

 

£

£

Short-term employee benefits

105,000

97,153

Post-employment benefits

892

50,666

Termination benefits

-

100,000

 

105,892

247,819

 

 

 

For further information visit www.aeorema.com or contact:

 

Michael Hale                                             Aeorema Communications plc          Tel : +44 (0) 20 7291 0444

 

John Depasquale/Liz Kirchner           Allenby Capital Limited                        Tel : +44 (0) 20 3328 5656

 

Catherine Leftley / Isabel de Salis      St Brides Partners                                 Tel : +44 (0) 20  7236 1177

 

 

 


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