Interim Report

RNS Number : 9379S
Aeorema Communications Plc
22 March 2021
 

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Regulation 11 of the Market Abuse Regulations (Amendment) (EU Exit) Regulations 2019/310 ("MAR").  With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

 

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

22 March 2021

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

Interim Report

 

Aeorema Communications plc, the AIM-traded live events agency, announces its unaudited results for the six months ended 31 December 2020.

 

Overview

· Revenues of £1,677,311 (2019: £2,913,290)

· Loss after taxation of £247,576 (2019: loss of £57,021)

· Robust cash position of £1,342,548 (31 December 2019: £1,393,243)

· Returned to profitability in the final three-months of the period

 

Chairman's Statement

Our shareholders will be familiar with the proverb "necessity is the mother of invention" and this phrase became especially true for your Company as the hospitality and events industry experienced an immediate and full-blown shut down in the unprecedented times of the Covid-19 pandemic.

 

I am proud of our achievements during the period under review, having quickly re-invented ourselves at pace into an expert in virtual and hybrid conferencing following the collapse of the live events business as a result of Covid-19 last year. Equally, I am optimistic for the future as I believe we are well positioned to grow rapidly when live events return.

 

Faced with the extraordinary challenge of restructuring our business to service a new model focused on virtual events, our team adeptly stepped up to the plate. We developed new services, built our own virtual events platform, KIT, grew existing accounts, onboarded new clients, and impressively returned the Company to profitability in the final months of the period - an outstanding achievement following a period which necessitated substantial restructuring costs and saw a gradual take up of our new offerings. In addition to our traditional largely professional services client base, we are proud to have onboarded a technology giant, working across its four divisions, as well as working with a further five technology clients, all of whom trust our consultancy and technical expertise. These accounts continue to grow during this unprecedented period, and we anticipate further engagements going forward.

 

While we had expected revenues from live events of circa £3-5 million for July to December 2020, we replaced this lost income with £1,677,311 in revenue from virtual events. We also contained the loss after tax to £247,576 (2019: loss of £57,021) and ended the calendar year with £1,342,548 in cash (2019: £1,393,243) despite restructuring costs. The trend is positive. With several new blue-chip clients and a strong pipeline, we are confident that the next six months will be profitable. The Company's cash position remains strong and as at the date of this announcement is circa £1.1 million.

 

We announced the opening of an office in New York in September 2020. This was a strategic decision signifying a dedicated approach to supporting the growing needs and requests of our clients in the US, and internationally, as we saw an increase in potential business in the region. I am pleased to report this has been a beneficial investment for the Company and we are expecting to make a profit from this division in its first year. Our presence in the US has enabled us to grow our existing clients as well as win new US based clients.

 

Whilst Eventful, acquired in March 2020, was naturally severely impacted by Covid-19 related travel bans and venue closures, the team has maintained its relationships with existing clients and been introduced to many new clients working with Cheerful Twentyfirst. During this quiet period, the team has been developing its strategy for 2021/22 and is excited about both returning to sourcing venues for live events and building an exceptional incentives programme for corporates. Holly Mills has joined Eventful as Head of Incentives (formerly Head of Incentives at Penguins Events) and is developing the new Incentives offering for a market with pent up demand and sizeable budgets.

 

Looking ahead, we believe live events will return; a number of clients have commented that there is no substitute for personal contact. However, regardless of when this happens, we have proven that we can operate as a profitable business in the virtual and hybrid space too and are excited at the prospect of new opportunities for the Group.  Furthermore, we are growing our fee based strategic communications solutions as part of our new consultancy approach, supported by production excellence and networking solutions that continue to challenge the norm.

 

I would like to thank our team and our shareholders for their ongoing support and look forward to the next six months with growing optimism. 

 

 

M Hale

Chairman

19 March 2021

 

 

 

 

 

 

AEOREMA COMMUNICATIONS PLC

CONDENSED CONSOLIDATED INCOME STATEMENT

For the period ended 31 December 2020

 

 

 

 

 

 

 

Unaudited

6 Months to 31 December 2020

Unaudited

6 Months to 31 December 2019

Audited

Year to

30 June

2020

 

 

 

 

 

 

Notes

£

£

£

Continuing Operations

 

 

 

 

 

 

 

 

 

Revenue

 

1,677,311

2,913,290

5,475,425

Cost of sales

 

(829,741)

(2,044,591)

(3,629,770)

 

 

 

 

 

Gross profit

 

847,570

868,699

1,845,655

 

 

 

 

 

Other income

 

49,616

-

82,601

 

 

 

 

 

Administrative expenses

 

(1,175,117)

(958,677)

(2,103,299)

 

 

 

 

 

Operating (loss) / profit pre-exceptional items

 

(277,931)

(89,978)

(175,043)

 

 

 

 

 

Exceptional items

 

-

-

(23,184)

 

 

 

 

 

Operating (loss) / profit post exceptional items

 

(277,931)

(89,978)

(198,227)

 

 

 

 

 

Finance income

 

539

328

556

 

 

 

 

 

Finance costs

 

(10,284)

-

(20,253)

 

 

 

 

 

(Loss) / profit before taxation

 

(287,676)

(89,650)

(217,924)

 

 

 

 

 

Taxation

4

40,100

32,629

20,497

 

 

 

 

 

(Loss) / profit for the period from continuing operations

 

 

(247,576)

 

(57,021)

 

(197,427)

 

 

 

 

 

Other comprehensive income

 

 

 

 

Items that may be reclassified to profit or loss

 

 

 

 

 

 

 

 

 

Exchange differences on translation of foreign entities

 

(7,479)

-

-

 

 

 

 

 

Other comprehensive income for the period

 

(7,479)

-

-

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

 

(255,055)

(57,021)

(197,427)

 

 

 

 

 

Basic and diluted earnings per share from continuing operations

 

 

 

 

 

 

 

 

 

Basic (pence)

5

(2.67997)p

(0.63003)p

(2.16920)p

Diluted (pence)

5

N/A

N/A

N/A

 

 

 

AEOREMA COMMUNICATIONS PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

For the period ended 31 December 2020

 

 

 

 

 

Unaudited

6 Months to 31 December 2020

Unaudited

6 Months to 31 December 2019

Audited

Year to

30 June

2020

 

 

 

 

 

 

 

£

£

£

 

 

 

 

 

Non-current assets

 

 

 

 

Intangible assets

 

572,682

365,154

573,931

Property, plant and equipment

 

76,832

98,070

85,952

Right-to-use assets

 

333,983

425,070

379,530

Deferred taxation

 

47,710

25,100

7,611

 

 

1,031,207

913,394

1,047,024

 

 

 

 

 

Current assets

 

 

 

 

Trade and other receivables

 

1,007,548

1,480,984

597,497

Cash and cash equivalents

 

1,342,548

1,393,243

1,721,217

 

 

2,350,096

2,874,227

2,318,714

 

 

 

 

 

 

 

 

 

 

Total assets

 

3,381,303

3,787,621

3,365,738

 

 

 

 

 

Current liabilities

 

 

 

 

Trade and other payables

 

1,298,948

1,472,303

1,186,670

Lease liabilities

 

87,219

82,973

85,070

Bank loans

 

13,889

-

-

Current tax payable

 

3,711

74,616

68,490

 

 

1,403,767

1,629,892

1,340,230

 

 

 

 

 

Non-current liabilities

 

 

 

 

Lease liabilities

 

256,538

343,756

300,689

Bank loans

 

236,112

-

-

Provisions

 

25,020

25,020

25,020

 

 

517,670

368,776

325,709

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

1,921,437

1,998,668

1,665,939

 

 

 

 

 

Net assets

 

1,459,866

1,788,953

1,699,799

 

 

 

 

 

 

 

 

 

 

Equity attributable to equity holder:

 

 

 

 

Share capital

 

1,154,750

1,131,313

1,154,750

Share premium

 

9,876

7,063

9,876

Merger reserve

 

16,650

16,650

16,650

Other reserve

 

96,480

56,358

81,358

Capital contribution reserve

 

257,812

257,812

257,812

Retained earnings

 

(75,702)

319,757

179,353

 

 

 

 

 

Total equity

 

1,459,866

1,788,953

1,699,799

 

AEOREMA COMMUNICATIONS PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the period ended 31 December 2020

 

 

 

Share capital

Share

premium

Merger reserve

Other reserve

Capital contribution reserve

Retained earnings

Total equity

 

£

£

£

£

£

£

£

 

 

 

 

 

 

 

 

At 1 July 2019

1,131,313

7,063

16,650

34,261

257,812

467,283

1,914,382

Payment of dividends

-

-

-

-

-

(90,505)

(90,505)

Comprehensive income for the period

-

-

-

-

-

(57,021)

(57,021)

Share-based payments

-

-

-

22,097

-

-

22,097

 

At 31 December 2019

 

1,131,313

 

7,063

 

16,650

 

56,358

 

257,812

 

319,757

 

1,788,953

 

 

 

 

 

 

 

 

At 1 January 2020

1,131,313

7,063

16,650

56,358

257,812

319,757

1,788,953

Comprehensive income for the period

-

-

-

-

-

(140,404)

(140,404)

Share-based payments

-

-

-

25,000

-

-

25,000

Share issue

23,437

2,813

-

-

-

-

26,250

 

At 30 June 2020

 

1,154,750

 

9,876

 

16,650

 

81,358

 

257,812

 

179,353

 

1,699,799

 

 

 

 

 

 

 

 

 

At 1 July 2020

1,154,750

9,876

16,650

81,358

257,812

179,353

1,699,799

Comprehensive income for the period

-

-

-

-

-

(255,055)

(255,055)

Share-based payments

-

-

-

15,122

-

-

15,122

 

At 31 December 2020

 

1,154,750

 

9,876

 

16,650

 

96,480

 

257,812

 

(75,702)

 

1,459,866

 

 

For the period ended 31 December 2020

 

 

 

 

Unaudited

6 Months to 31 December 2020

Unaudited

6 Months to 31 December 2019

Audited

Year to

30 June

2020

 

 

 

 

 

 

 

£

£

£

Cash flow from operating activities

 

 

 

 

(Loss) / profit before taxation

 

(287,676)

(89,650)

(217,924)

Adjustments for:

 

 

 

 

Depreciation of property, plant and equipment

 

18,209

14,064

31,871

Depreciation of right-of-use assets

 

45,546

43,848

89,392

Amortisation of intangible fixed assets

 

1,250

-

417

Loss on disposal of fixed assets

 

769

1,424

1,648

Share-based payment

 

15,122

22,097

47,097

Interest on lease liabilities

 

8,996

10,222

20,253

Finance income

 

(539)

(327)

(556)

Exchange rate differences on translation

 

(7,479)

-

-

Operating cash flow before movement in working capital

 

(205,802)

1,678

(27,802)

Increase/(decrease) in trade and other payables

 

112,278

(755,036)

(1,075,254)

(Increase)/decrease in trade and other receivables

 

(410,049)

131,361

1,014,847

Cash (used in) / generated from operating activities

 

(503,573)

(621,997)

(88,209)

 

 

 

 

 

Taxation paid

 

(64,779)

-

(10,797)

 

 

 

 

 

Cash flow from investing activities

 

 

 

 

Payment for Acquisition of Subsidiary, net of cash acquired

 

-

-

(128,331)

Finance income

 

539

327

556

Purchase of intangible assets

 

-

-

(10,000)

Purchase of property, plant and equipment

 

(9,856)

(55,710)

(61,400)

Disposal of property, plant and equipment

 

-

224

-

Repayment of leasing liabilities

 

(51,000)

(50,257)

(101,258)

Net cash used in investing activities

 

(60,317)

(105,416)

(300,433)

 

 

 

 

 

Cash flow from financing activities

 

 

 

 

Dividends paid

Bank loans

 

-

250,000

(90,505)

-

(90,505)

-

Net cash used in financing activities

 

250,000

(90,505)

(90,505)

 

 

 

 

 

Net increase / (decrease) in cash and cash equivalents

 

(378,669)

(817,918)

(489,944)

 

 

 

 

 

Cash and cash equivalents at beginning of period

 

1,721,217

2,211,161

2,211,161

 

 

 

 

 

Cash and cash equivalents at end of period

 

1,342,548

1,393,243

1,721,217

 

 

 

 

 

 

 

AEOREMA COMMUNICATIONS PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the period ended 31 December 2020

 

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 2020 (including comparatives for the periods ended 31 December 2019 and 30 June 2020) were approved by the board of directors on 20 March 2021.

 

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 2020, 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 2020 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 2020 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 2020, which have been prepared in accordance with IFRS as adopted by the European Union.

 

3.  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 2020 there is only one reportable operating segment.

 

4.  Income tax charge

 

Income period tax is accrued based on the estimated average annual effective income tax rate of 19 per cent. (2019: 19 per cent).

 

 

5.  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 2020

Unaudited 6 Months to 31 December 2019

Audited Year to 30 June 2020

 

 

 

 

(Loss) / profit for the year attributable to owners of the Company

(247,576)

(57,021)

(197,427)

 

 

 

 

Number of shares

 

 

 

 

 

 

 

Basic weighted average number of shares

9,238,000

9,050,500

9,101,356

 

 

 

 

Effect of dilutive share options

1,020,000

1,020,000

1,020,000

 

 

 

 

Diluted weighted average number of shares

10,258,000

10,070,500

10,121,356

 

 

 

 

 

6.  Dividends

 

During the interim period no dividend (2019: 1 pence per share) was declared to holders of the Company's ordinary shares in respect of the full year ended 30 June 2020.

 

 

 

 

 

7.  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 2020

Unaudited 6 months to 31 December 2019

 

£

£

Subsidiaries

 

 

Amounts owed by/(to) subsidiaries

504,694

1,027,839

Amounts owed by/(to) subsidiaries

504,694

1,027,839

 

 

 

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

 

 

Unaudited 6 Months to 31 December 2020

Unaudited 6 Months to 31 December 2019

Harris & Trotter LLP

£

£

Aeorema Communications plc

7,500

7,500

Aeorema Limited

10,450

11,750

 

17,950

19,250

 

Fees charged to Aeorema Communications plc include £7,500 (2019: £7,500) for the services of S 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 2020

Unaudited 6 Months to 31 December 2019

 

£

£

Short-term employee benefits

140,500

110,667

Post-employment benefits

2,992

5,024

 

143,492

115,691

 

During the period A Harvey received an interest-free loan of £10,000. At 31 December 2020, £10,000 (2019: £10,000) was outstanding.

 

During the period S Quah received an interest-free loan of £10,000. At 31 December 2020, £10,000 (2019: £Nil) was outstanding.

 

 

ENDS

 

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

 

Mike Hale

 

 

Aeorema Communications plc

+44 (0)20 7291 0444

John Depasquale /

Liz Kirchner (Corporate Finance)

Kelly Gardiner (Sales and Corporate Broking)

 

Allenby Capital Limited (Nominated Adviser and Broker)

+44 (0)20 3328 5656

Catherine Leftley/ Selina Lovell

St Brides Partners Ltd 

(Financial PR)

info@stbridespartners.co.uk

 

 

 

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