Final Results
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 2011.
Financial Highlights
- Revenue of £155,987 (2010: £56,752)
- Loss of £1,198,552 (2010: £1,225,480)
- Greatly improved net liability position of £462,394 (2010: £1,027,031)
Operational Highlights
- Purchased Intellectual Property for in house development - Facilitated Electronic Data System ("FEDS") and Live Incident Management Interactive Trainer ("LIMIT")
- Acquisition of the award winning digital production company, Oil Productions Ltd
- Established wholly owned subsidiary, OnSide Now Ltd:
- Utilises recently acquired Intellectual Property
- Revolutionises community sports coaching
- Initial focus on the football industry
- Adaptable to other mainstream sport
- Being trialled by Charlton Athletic Community Trust
- Discussions on-going with Saracens Rugby Club and Premiership Rugby
- Development of VO1CE:
- Utilises recently acquired Intellectual Property
- New community initiative underway with the Metropolitan Police Hackney Gangs Intervention Team
- Key Personnel appointed:
- David Hill as Non-Executive Director - August 2011
- Mike Bennett as Creative Director - August 2011
- Tony Sanders as CTO - December 2011
Deborah White, CEO and Interim Chairman, commented:
"2011 has been transformational for Milestone and the Management are confident that we have the necessary building blocks in place to continue this positive momentum in to 2012 and beyond. We have acquired the technology and software needed to develop products that are in demand and we have hired the people who are necessary to successfully deliver them. Milestone Group is now a multimedia and technology solutions company with a core focus of engineering collaborative solutions for brands and businesses."
For further information:
| Milestone Group PLC Deborah White, Chief Executive | Tel: 020 7929 7826 |
| Cairn Financial Advisers LLP, Nominated Adviser Liam Murray / Avi Robinson | Tel: 020 7148 7900 |
| Hybridan LLP, Broker Claire Louise Noyce / Deepak Reddy | Tel: 020 7947 4350 |
| College Hill, PR Jamie Ramsay | Tel: 020 7457 2020 |
Chairman's Statement
Foreword
It is with great pleasure that I deliver this statement on behalf of the Board and the management team. 2011 has been a year of significant progress for the Company with Milestone's transformation reaching a high point in August 2011 with the acquisition of both the FEDS technology platform and the award winning production company, Oil Productions Ltd.
Business Update
The Board believes the Group is now fully positioned into the Media and Technology sector as a multimedia and technology solutions company whose core focus is engineering collaborative solutions for brands and businesses, particularly in the areas of sport, media, and community sectors.
Over the last 20 years one of the biggest disruptions to an organisation's business and processes has been the Internet. Social media and the new generation of web-based and cloud technologies are changing the way business is conducted today and it is the Company's view that they will continue to disrupt in a similar way.
Business leaders must rethink how their employees are working together internally and also how they engage with the outside world.
The mobilising of workforces, social networking, the impact of 'the collective' voice and the increasing reliance on web and cloud services have all put collaboration at the centre of today's business priorities.
People are discovering an endless realm of creative possibilities made available via a multitude of channels, technologies and devices, creating the collaborative digital market place.
The B2C market with App stores, web services and mobile access provides instant solutions to most elements of a consumer's social and personal life. This has raised expectations within the business community who are keen to explore and attract same level of flexibility, communication and potential for collaboration within their organisation operations.
Technology enabled collaboration is perceived as the way forward for businesses and consumers alike, providing a platform for better informed decision.
Today's market for content delivery mechanisms demands that cross platform, cross device and cross function connectivity and interaction are the cornerstones of a successful strategy. The opportunity and need for collaboration within business and consumer environments has led to a shift in engagement and is creating an entirely new ecosystem of digital relationships.
Generally, the existing business landscape is fragmented, disparate and inefficient with agencies traditionally offering single channel solutions to multichannel business issues.
The speed and cost at which well established operating methods can be replaced is opening up new markets frequently offering the opportunity to unlock significant operational and financial efficiencies.
Understanding the impact that these changes will bring to businesses and the resulting shift in the market combined with an awareness of consumer expectations is key to our positioning within our target marketplace.
Milestone has recognised this shift, building the component channel elements into a cohesive strategy and approach. We consider ourselves as 'solutions architects' that create ideas, develop strategy and build solutions that deliver across all channels.
Developments
FEDS & LIMIT
In April 2011, Milestone purchased an exclusive license from BGP Global Services Ltd to develop their FEDS technology for use within the UK community sports sector (initially in football) through the wholly owned subsidiary, OnSide Now Ltd ("OnSide"). In August 2011, the transaction was completed when Milestone acquired FEDS and its complimentary training tool, LIMIT. Using the FEDS platform, the Company has so far launched 3 products - OnSide and VO1CE, which released during the period and the Appropriate Procedures Programme ("APP") launched post year end.
OnSide
OnSide is a web/mobile platform designed to help create a safer environment for all sports. The product enables real time collation of data and sharing of information between key stakeholders with the ability to document the dynamic risk assessment.
This product is initially being piloted with Charlton Athletic Community Trust ("CACT") in partnership with both the Metropolitan Police and the Social Services. CACT is now championing the project within football. The Company is also in discussions with other sporting entities including Saracens Rugby Club and Premiership Rugby. OnSide charges a monthly licence fee per club per month and will, when fully launched, offer a selection of sponsorship rights and advertising opportunities.
VO1CE
In this instance, the FEDS technology has been developed into a community collaboration tool. It is initially being piloted by the Metropolitan Police Hackney Gangs Intervention team and approximately 30 third sector stakeholders, such as local police, community organisations and focus groups. VO1CE allows these groups to share information, news and events in real time on a daily basis using a secure hosted service. This ensures the participants are kept up to date with events as they happen helping to create a greater awareness within Hackney Borough of activities affecting the specific area of focus and expertise for each individual organisation.
APP
The latest product to be developed using the FEDS technology is APP, which was launched in November 2011, assists companies in complying with the Bribery Act 2010, specifically by measuring compliance and assessing the procedures in place to prevent bribery. APP supports and complements a company's anti-bribery and corruption policy by providing a hassle-free proactive service with automated reporting and a simple to use interface for entry, reporting and retrieval of information. APP simplifies the process of reporting and monitoring any activity that may be related to the Act and can be accessed from a computer or mobile device thus allowing secure access from any location and providing real-time updates and reporting.
Oil Productions Ltd ("Oil")
In August 2011, Milestone announced the acquisition of the award winning Oil Productions, a multi-platform digital media design studio that uses digital production techniques to create low-cost, high-value content.
Founded in 1998 by Mike Bennett and Mark McKeown, Oil Productions has developed an established list of high calibre clients, including Lynx for Unilever, Channel 4 and the BBC, delivering numerous successful campaigns.
Since the year end, Oil was contracted by OMD International Ltd to develop and deliver a worldwide digital art competition on behalf of Nissan's luxury brand, Infiniti. Originally launched in Stockport and Leeds, it was then rolled out to Rolle in Switerland and Madrid and is now set to tour Europe.
Oil has also been re-engaged by Unilver to extend two successful Lynx campaigns - the Lynx Twist "Keeping Keeley" and the Lynx Excite "Fallen Angel".
Management Changes
In August 2011, the Board was strengthened with the addition of David Hill as a non-executive. David brings a strong set of skills for developing and executing strategy to achieve the successful delivery of the Company's objectives.
Subsequent to the year end, Anthony Moss resigned from the Board to concentrate his efforts on his other business interests.
Also, the Executive Board has been further strengthened by the appointment of Anthony Sanders as Technical & Development Director. Anthony has already been a great asset to the team, helping to develop the FEDS platform and assisting in the operational development of the business.
Financial Summary
Net Liabilities on the balance sheet at the year end were £462,394 (2010: £1,027,031). The significant reduction is due to the key acquisition of Oil Productions Ltd and the purchase of FEDS / LIMIT. Both transactions were completed through the issue of equity. Trade receivables has increased to £115,242 (2010: £12,796) and while trade payables has also increased to £477,678 (2010: £261,401), the Company has reduced its short term borrowings to £283,007 (2010: £392,300).
During the year, the Group generated sales revenues of £155,987 (2010: £56,752). The Group made a loss for the year of £1,198,552 (2010: £1,225,480) due to the costs of establishing new business practises, acquiring Oil and FEDS/LIMIT and the associated costs of dealing with historical issues. These development costs are expected to create new sales channels and revenue opportunities within the next 12 months and will form the building blocks from which the Group can look to leverage and scale the business and its operations going forward.
These key developments are encouraging as they were made during a challenging year and in a difficult market place. This helps to demonstrate the Company's confidence in the business strategy and its team's ability to deliver.
These results are presented under Adopted International Financial Reporting Standards ("Adopted IFRS").
Funding
During the year the Company issued 162,160,517 new ordinary shares for a total consideration of £1,708,434, of which £765,467 was received in cash, £335,000 was used to purchase Oil and FEDS / LIMIT and the remainder being issued to existing and new creditors in exchange for goods or services received or in settlement of loan balances.
Since the year end, the Company has raised £62,000 in cash and converted £17,500 worth of creditors through the issue of 7,950,000 shares. The Company continues to carefully manage its working capital position and will need to raise further monies through subscriptions for new shares in the immediate to short term thereafter.
The Company is firmly focused on revenue generating and the recent successful pilots with both OnSide and VO1CE are encouraging. The new products are expected to offer opportunities for a number of revenue streams such as licence fees, advertising and sponsorship.
When combined with the obvious opportunities to scale revenues through the production company it is expected that the need to raise funds via the sale of equity will decrease in-line with a growth in the Company revenues.
Protecting the interests of the Company's current shareholders is a priority and the Board's strategy is to seek to raise funds on a basis which is fair to all.
Outlook
The Directors believe that Milestone is now well positioned to monetise its initial strategic investments, with its in house digital media team and by utilising the FEDS technology as a foundation from which to develop further wholly owned bespoke products and collaboration solutions.
By defining the processes which support specific clients, Milestone can offer further cross-platform bespoke solutions, identifying and delivering the functionality to support existing and emerging revenue streams, quickly and with low development overhead.
On behalf of the Board, I would like to take this opportunity to thank the staff, our shareholders and our business partners for their continued loyalty and support - especially given the level of changes that have taken place within the business and on the back of a challenging year. I look forward to this positive momentum continuing into 2012 and beyond.
Deborah White
Chief Executive Officer and Interim Chairman
29 February 2012
Consolidated statement of comprehensive income for the year ended 30 September 2011
| 2011 | 2010 | |||||
| £ | £ | |||||
| Revenue | 155,987 | 56,752 | ||||
| Cost of sales | (106,021) | (32,625) | ||||
| Gross profit | 49,966 | 24,127 | ||||
| Other operating income | 14,034 | - | ||||
| Administrative expenses | (1,214,448) | (1,135,749) | ||||
| (1,200,414) | (1,135,749) | |||||
| Loss from operations | (1,150,448) | (1,111,622) | ||||
| Finance expense | (48,170) | (113,782) | ||||
| Finance income | 66 | 6 | ||||
| Loss before taxation | (1,198,552) | (1,225,398) | ||||
| Taxation expense | - | - | ||||
| Loss from continuing operations | (1,198,552) | (1,225,398) | ||||
| Loss on discontinued operations net of tax | - | (82) | ||||
| Total comprehensive loss | (1,198,552) | (1,225,480) | ||||
| Attributable to owners of the parent | (1,198,552) | (1,225,480) | ||||
| Basic and diluted loss per share from continuing operations (pence) | (0.56) | (1.17) | ||||
| Basic and diluted loss per share from discontinued operations (pence) | - | - | ||||
| Total basic and diluted loss per share | (0.56) | (1.17) | ||||
Consolidated statement of financial position at 30 September 2011 Company No: 04689130
| 2011 | 2010 | |||||
| £ | £ | |||||
| Non-current assets | ||||||
| Intangible assets | 789,121 | - | ||||
| Property, plant and equipment | 8,293 | 741 | ||||
| Available for sale investments | 162,824 | 162,824 | ||||
| 960,238 | 163,565 | |||||
| Current assets | ||||||
| Trade and other receivables | 256,710 | 39,745 | ||||
| Cash and cash equivalents | 88,113 | - | ||||
| 344,823 | 39,745 | |||||
| Current liabilities | ||||||
| Bank overdrafts | - | (752) | ||||
| Trade and other payables | (1,285,858) | (837,289) | ||||
| Interest bearing loans | (283,007) | (392,300) | ||||
| (1,568,865) | (1,230,341) | |||||
| Non-current liabilities | ||||||
| Deferred tax liabilities | (65,590) | - | ||||
| Other payables | (133,000) | - | ||||
| (198,590) | - | |||||
| Net liabilities | (462,394) | (1,027,031) | ||||
| Capital and reserves attributable to owners of the Company | ||||||
| Share capital | 289,228 | 127,067 | ||||
| Share premium account | 10,641,830 | 9,050,141 | ||||
| Merger reserve | 11,119,585 | 11,119,585 | ||||
| Capital redemption reserve | 2,732,904 | 2,732,904 | ||||
| Retained losses | (25,245,941) | (24,056,728) | ||||
| Total Equity | (462,394) | (1,027,031) | ||||
Consolidated statement of cash flows for the year ended 30 September 2011
| Cash flow from operating activities | ||||||
| 2011 | 2010 | |||||
| £ | £ | |||||
| Loss for the year | (1,198,552) | (1,225,480) | ||||
| Adjustments for: | ||||||
| Amortisation of intangible assets | 50,866 | - | ||||
| Depreciation of tangible assets | 365 | 365 | ||||
| Net bank and other interest charges | 48,104 | 47,305 | ||||
| Issue of share options / warrants | 9,336 | - | ||||
| Issue of financial liabilities | - | 66,471 | ||||
| Net loss before changes in working capital | (1,089,881) | (1,111,339) | ||||
| Decrease/(increase) in trade and other receivables | (31,909) | (37,283) | ||||
| (Decrease)/increase in trade and other payables | 431,402 | 560,480 | ||||
| Cash from operations | (690,388) | (588,142) | ||||
| Interest received | 66 | 6 | ||||
| Interest paid | (1,841) | (12,511) | ||||
| Net cash flows from operating activities | (692,163) | (600,647) | ||||
| Investing activities | ||||||
| Acquisition of Investments | - | (162,824) | ||||
| Net of cash and overdraft acquired | (2,347) | - | ||||
| Purchase of property, plant and equipment | - | (1,106) | ||||
| Net cash flows used in investing activities | (2,347) | (163,930) | ||||
| Financing activities | ||||||
| Issue of ordinary share capital | 765,467 | 411,000 | ||||
| Repayment of loan | (26,000) | (3,000) | ||||
| New loans raised | 43,908 | 345,500 | ||||
| Net cash flows from financing activities | 783,375 | 753,500 | ||||
| Net decrease in cash | 88,865 | (11,077) | ||||
| Cash and cash equivalents at beginning of year | (752) | 10,325 | ||||
| Cash and cash equivalents at end of year | 88,113 | (752) | ||||
Consolidated statement of changes in equity for the year ended 30 September 2011
| Share Capital | Share Premium | Merger Reserve | Capital Redemption Reserve | Retained Earnings | Total Equity | |
| £ | £ | £ | £ | £ | £ | |
| Balance at 30 Sept 2009 | 88,298 | 8,479,824 | 11,119,585 | 2,732,904 | (22,831,248) | (410,637) |
| Total comprehensive income | - | - | - | - | (1,225,480) | (1,225,480) |
| Shares issued | 38,769 | 570,317 | - | - | - | 609,086 |
| Balance at 30 Sept 2010 | 127,067 | 9,050,141 | 11,119,585 | 2,732,904 | (24,056,728) | (1,027,031) |
| Total comprehensive income | - | - | - | - | (1,198,552) | (1,198,552) |
| Shares issued | 162,161 | 1,591,689 | - | - | - | 1,753,850 |
| Share options granted | - | - | - | - | 9,339 | 9,339 |
| Balance at 30 Sept 2011 | 289,228 | 10,641,830 | 11,119,585 | 2,732,904 | (25,245,941) | (462,394) |
Notes to the financial statements
Basis of preparation
Milestone Group plc is a company registered and resident in England and Wales.
These financial statements were authorised for issue by the Board of Directors on 29 February 2012.
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the 'Group').
The parent company financial statements present information about the Company as a separate entity and not about its group.
The Group financial statements have been prepared and approved by the Directors in accordance with International Financial Reporting Standards as adopted by the EU ('Adopted IFRSs').
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 2011 or 30 September 2010, but is derived from the 2011 Annual Report. Statutory accounts for 2010 have been delivered to the Registrar of Companies and those for 2011 will be delivered in due course.
The consolidated statement of comprehensive income, consolidated statement of financial position, consolidated cashflow, 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 2010 and 30 September 2011 have been reported on by the Independent Auditors. The Independent Auditors' Report on the Annual Report and Financial Statements for 2010 was unqualified, but did draw attention to matters by way of emphasis relating to the basis of preparation. This emphasis drew attention to the Company's ability to manage the timing of settlement of liabilities associated with its previous activities. It noted that a material uncertainty existed which cast significant doubt about the company's ability to continue as a going concern. The Independent Auditors' Report on the Annual Report and Financial Statements for 2011 was unqualified, but did draw attention to matters by way of emphasis relating to the basis of preparation which is reproduced below. This emphasis drew attention to the Company's ability to raise funds and generate sales to satisfy liabilities associated with its activities. It noted that a material uncertainty remains which may cast significant doubt about the company's ability 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. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are described in the Director's report. In addition note Error: Reference source not found 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 2011, being the Company's financial year-end, was £462,394 (2010: £1,027,031). Subsequent to the balance sheet date, the Board has been able to agree funding in the form of further share issues raising £62,000 in cash and converted £17,500 of creditors into new shares. The Company is reliant upon its continuing ability to manage the timing of settlement both of its current liabilities, many of which are overdue, and future liabilities as they arise. Future fundraising will be required in the immediate to short term thereafter. As such, the Directors intend to strengthen the Company's financial position through a combination of further fundraises in the immediate to short term and from proceeds generated from trading activities.
The future business model is based around generating revenue through technology enabled collaboration using mobile, digital and technical solutions. The Group is already producing revenues although progress with some of the technologies has been slower than expected. As a result the Board has prepared forecasts to reflect this and the agreements that have or are expected to be entered into. These forecasts show the business being profitable and cash generative in the future. However, achieving these forecasts will be dependent upon achieving sales and obtaining sufficient funding to settle existing and future obligations.
The Directors have concluded that the need to generate future funds from either further fundraising and from trading activities to satisfy the settlement of its ongoing 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.
Loss per share
The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the 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 41,689,300share options outstanding at the year-end (2010: 500,000). However, the figures for 2011 and 2010 have not been adjusted to reflect conversion of these share options as the effects would be anti-dilutive.
| 2011 | 2010 | |||||
| Weighted average | Per share | Weighted average | Per share | |||
| Loss | number of | amount | Loss | number of | amount | |
| £ | shares | Pence | £ | shares | Pence | |
| Basic and diluted loss per share attributable to shareholders | (1,198,552) | 214,766,652 | (0.56) | (1,225,480) | 104,340,306 | (1.17) |
Posting of Accounts
The report and accounts of Milestone Group PLC, including a Notice of the Annual General Meeting of this Company will be posted to shareholders shortly - a further announcement will be made by the Company at such time.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Source: Milestone Group PLC via Thomson Reuters ONE
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