Interim Results

RNS Number : 5325U
Aeorema Communications Plc
29 March 2023
 

The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310.

 

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

 

 

29 March 2023

 

Aeorema Communications plc

("Aeorema", the "Company" or the "Group")

 

Interim Results

 

Aeorema Communications plc (AIM: AEO) , a leading strategic communications group, is pleased to announce its unaudited interim results for the six months ended 31 December 2022.

 

 

Highlights

 

· Record level revenue of £7,121,103 (H1 2021: £4,909,742)

· Record level profit before taxation of £326,021 (H1 2021: £255,677)

· A period of continued growth and major investment for the Group

· Eventful Limited returning to profitability

· Substantially increased cash position of £3,676,194 (31 December 2021: £1,534,217)

 

 

Chairman's Statement

 

The six-month period ended 31 December 2022 has been a period of continued growth and major investment for the Group, following the record financial year we announced in November.

 

Group revenue increased by 45% year-on-year to £7.12 million (H1 2021: £4.91 million) and profit before taxation by 28% to £0.33 million (H1 2021: £0.26 million). The Group continues to invest in the team, our processes, and offices, in order to put us in a strong position to achieve sustained growth and success in the future.

 

The team continues to adapt and diversify to meet the range of demands and evolving needs, of both new and existing clients. As a fully integrated agency, the Group has consistently delivered innovative and bespoke events on a live, virtual and hybrid basis to a range of clients across many sectors. Moreover, the team has been able to capitalise on the ever-changing nature of the industry by expanding our offerings to include long-term communication campaigns and consultancy services. The development of a longer-term client partnership approach has successfully been executed with leading brands across multiple regions and markets. The flexible nature of the business model has enabled the Group to maintain a loyal base of blue-chip clients.

 

I am thrilled that the team's remarkable efforts have been recognised with award nominations and successful wins, both during and post-period end. Cheerful Twentyfirst, Aeorema's main operating division, wonCreative Team of the Year for the fifth year running at the Conference News Agency Awards, Best Agency at the Micebook V Award, and Best Place to Work and Global Agency of the Year at the C&IT awards. Winning these high-profile awards not only bears testament to the strong ability of our team, but also affirms the Group's leading position in the sector.

 

NASDAQ listed, multi-billion-dollar challenger in the marketing network, on a unique brand activation 'Sport Beach' at Cannes Lions International Festival of Creativity. The activation is expected to be one of the largest brand activations in Cannes this year, and with discussions ongoing surrounding other additional contracts, 2023 has a promising outlook to be our biggest presence at the festival to date.

 

We continue to benefit from an increased global footprint, a growing presence in mainland Europe (with the opening of our Amsterdam office), and we continue to seek additional growth opportunities in line with our global growth strategy. Moreover, we look to serve the growing needs and requests of our clients operating in London and New York, by continuing the increased integration of the respective offices, as well as expanding our own presence in the North American market.

 

We are pleased to report that Eventful Limited, our venue sourcing and incentive travel agency, has had a strong six months with a record number of events. I am optimistic that we will be able to report a return to profitability at the end of the 2023 financial year.

 

Following the introduction of our client carbon measurement programme and the addition of a Sustainability Director in April 2022, post-period end we were pleased to launch our third annual Corporate Social Responsibility ("CSR") charter. The CSR charter was established as part of our transition into a value-led agency that views people, planet and prosperity as a balanced scale.

 

The 2023 CSR charter introduced several new environmental initiatives and commitments including the publication of our 2022 operational carbon footprint, and the offsetting of the Group's last three years' carbon emissions. A revised assessment tool, which considers the social and environmental impact of any new project also enables us to take on briefs that match our ethos and reinforce our commitment to become Net Zero by 2030.

 

 

M Hale

Chairman

28 March 2023

 

For further information contact:

 

Aeorema Communications plc

+44 (0)20 7291 0444

Andrew Harvey

www.aeorema.com



Allenby Capital Limited

(Nominated Adviser and Broker)




John Depasquale (Corporate Finance)

 

+44 (0)20 3328 5656

Kelly Gardiner (Sales and Corporate Broking)




St Brides Partners Ltd

(Financial PR)


Catherine Leftley/Paul Dulieu

aeorema@stbridespartners.co.uk

 

 

Notes to Editors 

A eorema Communications plc, (AIM: AEO) is a leading strategic communications group with offices in London, New York and Amsterdam. The Group provides bespoke event services, comprising live, virtual, and hybrid experiences to an established international blue-chip client base spanning a broad range of sectors, including finance, professional services, advertising, IT, gaming, fashion, fintech, and beverages. The Group also provides high level consultancy services to help clients maximise and deliver on their long-term communication strategies over multiple event and film touchpoints.

 

Aeorema delivers these services via its fully owned companies Cheerful Twentyfirst and Cheerful Twentyfirst, Inc. (the North American arm of Cheerful Twentyfirst) (cheerfultwentyfirst.com), two live events agencies with film capabilities that specialise in devising and delivering corporate communication solutions. The Group also operates Eventful Limited (www.eventful.co.uk), which provides consultative, high-touch services including assisting clients with venue sourcing, event management and incentive travel. With more than 56 years of combined operating experience and extensive award wins, Aeorema is a recognised industry thought leader and for the year ended 30 June 2022 reported record revenue and profits (before tax) of £12.2 million and £843,564 respectively, and also declared a dividend for the year.

 

Central to all that the Group does is its Corporate Social Responsibility charter, which is focussed on ensuring sustainable, inclusive and ethical business operations. To this end, the Group is a pioneer in delivering innovative strategies and services, including a client carbon measurement programme to establish a formal structure and approach around reducing emissions and offsetting both its own and its clients' carbon footprint.



 

CONDENSED CONSOLIDATED INCOME STATEMENT

For the period ended 31 December 2022

 

 

 

 

 


Unaudited

6 Months to 31 December 2022

Unaudited

6 Months to 31 December 2021

Audited

Year to

30 June

2022


Notes

£

£

£

Continuing Operations

 

 

 

 

 

 

 

 

 

Revenue

 

7,121,103

4,909,742

12,207,253

Cost of sales

 

(5,595,529)

(3,734,995)

(9,169,691)


 




Gross profit

 

1,525,574

1,174,747

3,037,562


 




Other income

 

-

3,743

3,743


 




Administrative expenses

 

(1,175,668)

(919,366)

(2,170,129)


 




Operating profit / (loss)

 

349,906

259,124

871,176

 

 

 

 

 

Finance income

 

80

109

241


 




Finance costs

 

(23,965)

(3,556)

(27,853)


 




Profit / (loss) before taxation

 

326,021

255,677

843,564


 




Taxation

4

(30,553)

48,105

(204,222)


 




Profit / (loss) for the period from continuing operations

 

 

295,468

 

303,782

 

639,342


 




Other comprehensive income

 




Items that may be reclassified to profit or loss

 




 

 




Exchange differences on translation of foreign entities

 

(29,245)

11,552

42,347


 




Other comprehensive income for the period

 

(29,245)

11,552

42,347


 




 

 

 

 

 

Total comprehensive income for the period

 

266,223

315,334

681,689


 




Basic and diluted earnings per share from continuing operations

 




 

 




Basic (pence)

5

3.18118

3.28840

6.92078

Diluted (pence)

5

2.71870

2.72255

5.80797

 

 

 

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

For the period ended 31 December 2022

 

 



Unaudited

6 Months to 31 December 2022

Unaudited

6 Months to 31 December 2021

Audited

Year to

30 June

2022


 

£

£

£






Non-current assets





Intangible assets

 

567,682

570,182

568,931

Property, plant and equipment

 

389,668

121,138

222,479

Right-to-use assets

 

760,388

-

823,772

Deferred taxation

 

-

182,179

25,925


 

1,717,738

873,499

1,641,107


 




Current assets

 




Trade and other receivables

 

2,834,446

2,337,399

3,130,035

Cash and cash equivalents

 

3,676,194

1,534,217

1,714,417

Current tax receivable

 

101,426

36,942

-


 

6,612,066

3,908,558

4,844,452


 




Total assets

 

8,329,804

4,782,057

6,485,559


 




Current liabilities

 




Trade and other payables

 

4,713,051

2,514,347

2,960,221

Lease liabilities

 

141,278

-

121,999

Bank loans

 

69,445

83,334

83,333

Current tax payable

 

-

136,132

177,790

Provisions

 

35,000

25,020

35,000


 

4,958,774

2,758,833

3,378,343


 




Non-current liabilities

 




Lease liabilities

 

668,006

-

738,041

Bank loans

 

83,334

152,778

111,111

Provisions

 

9,000

-

4,500

Deferred taxation

 

4,629

-

-


 

764,969

152,778

853,652


 




Total liabilities

 

5,723,743

2,911,611

4,231,995


 




Net assets

 

2,606,061

1,870,446

2,253,564


 





 




Equity attributable to equity holder:

 




Share capital

 

1,192,250

1,154,750

1,154,750

Share premium

 

21,876

9,876

9,876

Merger reserve

 

16,650

16,650

16,650

Other reserve

 

205,730

152,193

168,956

Capital contribution reserve

 

257,812

257,812

257,812

Foreign Translation reserve

 

2,058

-

31,303

Retained earnings

 

909,685

279,165

614,217






Total equity


2,606,061

1,870,446

2,253,564


CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the period ended 31 December 2022

 

 

 

Share capital

Share

premium

Merger reserve

Other reserve

Capital contribution reserve

Foreign translation reserve

Retained earnings

Total equity

 

£

£

£

£

£

£

£

£

 

 

 

 

 

 

 

 

 

At 1 July 2021

1,154,750

9,876

16,650

112,061

257,812

(11,044)

(25,125)

1,514,980

Comprehensive income for the period

-

-

-

-

-

-

315,334

315,334

Share-based payments

-

-

-

40,132

-

-

-

40,132

 

At 31 December 2021

 

1,154,750

 

9,876

 

16,650

 

152,193

 

257,812

 

(11,044)

 

290,209

 

1,870,446










At 1 January 2022

1,154,750

9,876

16,650

152,193

257,812

(11,044)

290,209

1,870,446

Comprehensive income for the period

-

-

-

-

-

-

324,008

324,008

Foreign currency translation

-

-

-

-

-

42,347

-

42,437

Share-based payments

-

-

-

16,763

-

-

-

16,763

 

At 30 June 2022

 

1,154,750

 

9,876

 

16,650

 

168,956

 

257,812

 

31,303

 

614,217

 

2,253,564

 

 









At 1 July 2022

1,154,750

9,876

16,650

168,956

257,812

31,303

614,217

2,253,564

Comprehensive income for the period

-

-

-

-

-

-

295,468

295,468

Foreign currency translation

-

-

-

-

-

(29,245)

-

(29,245)

Share-based payments

-

-

-

36,774

-

-

-

36,774

Share issue

37,500

12,000

-

-

-

-

-

49,500

 

At 31 December 2022

 

1,192,250

 

21,876

 

16,650

 

205,730

 

257,812

 

2,058

 

909,685

 

2,606,061

 

 


CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the period ended 31 December 2022

 

 



Unaudited

6 Months to 31 December 2022

Unaudited

6 Months to 31 December 2021

Audited

Year to

30 June

2022



 

 

 


 

£

£

£

Cash flow from operating activities





(Loss) / profit before taxation

 

326,021

255,677

843,564

Adjustments for:

 




Depreciation of property, plant and equipment

 

48,873

24,586

56,036

Depreciation of right-of-use assets

 

63,384

18,995

82,361

Amortisation of intangible fixed assets

 

1,250

1,250

2,500

Loss on disposal of fixed assets

 

-

2,096

4,646

Share-based payment

 

36,774

40,132

56,895

Interest on lease liabilities

 

20,244

-

21,191

Finance income

 

(80)

(109)

(241)

Dilapidations

 

4,500

-

-

Exchange rate differences on translation

 

(28,902)

11,552

42,138

Operating cash flow before movement in working capital

 

472,064

354,179

1,109,090

Increase/(decrease) in trade and other payables

 

1,752,830

1,096,880

1,557,234

(Increase)/decrease in trade and other receivables

 

295,592

(908,336)

(1,700,972)

Cash (used in) / generated from operating activities

 

2,048,422

188,544

(143,738)


 




Taxation paid

 

(279,218)

(26,185)

(43,657)


 




Cash flow from investing activities

 




Finance income

 

80

109

241

Purchase of property, plant and equipment

 

(216,406)

(44,343)

(179,475)

Repayment of leasing liabilities

 

(71,000)

(25,912)

(74,201)

Net cash used in investing activities

 

(287,326)

(70,146)

(253,435)


 




Cash flow from financing activities

 




Share issue

 

49,500

-

-

Repayment of bank loans

 

(41,665)

(13,888)

(55,556)

Net cash used in financing activities

 

7,835

(13,888)

(55,556)


 




Net increase / (decrease) in cash and cash equivalents

 

1,961,777

432,504

612,704


 




Cash and cash equivalents at beginning of period

 

1,714,417

1,101,713

1,101,713


 




Cash and cash equivalents at end of period

 

3,676,194

1,534,217

1,714,417

 

 




 

 

 



 

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the period ended 31 December 2022

 

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 87 New Cavendish Street, London, W1W 6XD. 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 2022 (including comparatives for the periods ended 31 December 2021 and 30 June 2022) were approved by the board of directors on 28 March 2023.

 

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 2022, 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 2022 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 2022 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 2022, 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 2022 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 (2021: 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 2022

Unaudited 6 Months to 31 December 2021

Audited Year to 30 June 2022

 




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

£295,468

£303,782

£639,342

 




Number of shares




 

 

 

 

Basic weighted average number of shares

9,288,000

9,238,000

9,238,000

 




Effect of dilutive share options

1,580,000

1,920,000

1,770,000

 




Diluted weighted average number of shares

10,868,000

11,158,000

11,008,000





 

6.  Dividends

 

During the interim period a dividend of 2 pence per share (2021: Nil) was declared to holders of the Company's ordinary shares in respect of the full year ended 30 June 2022.

 

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 2022

Unaudited 6 months to 31 December 2021

 

£

£

Subsidiaries



Amounts owed by/(to) subsidiaries

370,342

397,759

Amounts owed by/(to) subsidiaries

370,342

397,759

 

 

 

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 2022

Unaudited 6 Months to 31 December 2021

Harris & Trotter LLP

£

£

Aeorema Communications plc

9,450

7,500

Aeorema Limited

9,500

5,750


18,950

13,250

 

Fees charged to Aeorema Communications plc include £7,500 (2021: £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 2022

Unaudited 6 Months to 31 December 2021


£

£

Short-term employee benefits

266,375

162,933

Post-employment benefits

7,496

7,496


273,871

170,429

 

During the period S Quah received an interest-free loan of £40,000 which has now been repaid. As at 31 December 2022 £50,000 (2021: £10,000) was outstanding.

 

 

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