Half-yearly report

MILESTONE GROUP PLC RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2010 Milestone Group PLC ("Milestone" or the "Group"), the AIM quoted (AIM:MSG) provider of digital media and technology solutions, announces its results for the six months ended 31 March 2010. Highlights * Revenue generated for the first time by the new digital solutions team * Investment of £0.163 million made in JumpStart Wireless Inc and Ve Interactive Ltd (year ended 30 September 2009 investments: nil) * Trade and other payables (excluding loans) reduced to £0.318 million (year ended 30 September 2009 trade and other payables (excluding loans): £0.373 million) * Board exploring further fundraising and new business opportunities in line with previous statements * In the six months to 31 March 2010, £0.584 million raised through share issues and loans, showing continued shareholder support, with all new share issues for cash being at above the market price at the time of issue * Board strengthened with the appointments of Guy van Zwanenberg as Finance Director and Mark Hargreaves as a non-executive Director Deborah White, Chief Executive, said: "This is an exciting time for Milestone.  All the hard work in restructuring the Group is starting to impact positively on the business.  We are starting to see the first of the revenue streams coming through and our investments into new patented technology have enhanced our service offering.  We continue to work towards creating shareholder value through the conversion of the new business opportunities we continue to see." For further information: Milestone Group PLC Deborah White, Chief Executive Tel: 020 7929 7826 Strand Hanson Limited Richard Tulloch / David Altberg Tel: 020 7409 3494 Hybridan LLP Claire Louise Noyce Tel: 020 7947 4350 CHIEF EXECUTIVE'S STATEMENT The six months since our last report has seen the consolidation of efforts made in 2009 to reposition Milestone from the old analogue media businesses into a digital solutions agency with a focus on web and mobile applications. The Board has been, and continues to focus on bringing stability to the business by attracting key individuals and cultivating strategic alliances to help harness and deliver revenues to the business.  As detailed in our annual accounts for the year ended 30 September 2009, following our year end the Company entered into strategic agreements and made investments in JumpStart Wireless and Ve Interactive.  Whilst it has taken longer than expected to generate sales, in the period ended 31 March 2010 we did generate our first sales.  Since the end of March 2010 we have completed a number of projects and we have developed a pipeline of opportunities which we are focused on converting into revenue. In addition, our Board has been strengthened with the appointments of Guy van Zwanenberg as Finance Director in December 2009 and Mark Hargreaves as a non-executive Director in April 2010.  Since the end of March, Jeff Zie has also joined the team as Chief Operating Officer and is leading our sales initiative. A key focus has and continues to be on managing our trade creditor position and during the six month period ended 31 March 2010 we raised additional funds through new subscriptions of £0.248 million (with all cash issues at above market price) and new loans of £0.336 million to provide working capital and to reduce our trade and other payables (excluding loans).  In addition, the Company also converted £0.143 million of liabilities into shares during the period. This enabled the Company to reduce trade and other payables (excluding loans) from £0.373 million as at 30 September 2009 to £0.318 million as at 31 March 2010.  The Company continues to actively manage its liabilities and further fundraisings are likely to be required in the short term to enable the Company to meet its liabilities and to provide additional working capital.  As such, the Company is reliant on its ability to manage the timing of settlement of its liabilities and to raise further funds going forward. Although this has been a difficult trading period, we are seeing demand for our services growing steadily and I would like to thank the team and our shareholders for supporting us during this time. Deborah White Chief Executive Officer CONSOLIDATED INCOME STATEMENT   Unaudited Unaudited Audited six months six months year ended ended ended 31 March 31 March 30 Sept 2010 2009 2009 £ £ £ Revenue 7,990 - - Cost of sales - - - Gross profit 7,990 - - Other operating income - 11,830 9,268 Administrative expenses (347,045) (170,292) (392,664)   (347,045) (158,462) (383,396) Loss from operations (339,055) (158,462) (383,396) Finance expense (37) - - Finance income 3 18 20 Loss before taxation (339,089) (158,444) (383,376) Taxation expense - - - Loss from continuing operations (339,089) (158,444) (383,376) Profit/(loss) on discontinuing operations - (8,626) (8,626) Loss for period (339,089) (167,070) (392,002) Attributable to equity shareholders of the parent (339,089) (167,070) (392,002) There were no recognised income and expense items (2009: nil) other than those reflected in the above income statement. Comparatives for the 6 months ended 31 March 09 have been restated to reflect the change in presentation of discontinuing operations adopted in the year ended 30 September 2009 statutory accounts. CONSOLIDATED BALANCE SHEET   Note Unaudited Unaudited Audited six months six months year ended ended ended 31( )March 31( )March 30 Sept 2010 2009 2009 £ £ £ Non-current Assets Property, plant & equipment   924 - - Investments   162,824 - - ---------------------------------------     163,748 - - Current Assets Trade and other receivables   39.078 75,836 2,462 Cash and cash equivalents   95,272 1,792 10,325 ---------------------------------------     134,350 77,628 12,787 Current Liabilities Bank overdrafts   - - - Trade and other payables 4 (654,860) (513,755) (423,424) ---------------------------------------     (654,860) (513,755) (423,424) --------------------------------------- Net Assets / (Liabilities) (356,762) (436,127) (410,637) --------------------------------------- Capital and reserves attributable to equity holders of the company Share capital 5 106,586 2,808,252 88,298 Share premium account   8,852,100 8,247,152 8,479,824 Merger reserve   11,119,585 11,119,585 11,119,585 Capital Redemption Reserve   2,732,904 - 2,732,904 Retained losses   (23,167,937) (22,611,116) (22,831,248) --------------------------------------- Total Equity (356,762) (436,127) (410,637) --------------------------------------- CONSOLIDATED CASH FLOW STATEMENT   Unaudited Unaudited Audited six months six months year ended ended ended 31 March 2010 31 March 2009 30 Sept 2009 £ £ £ Loss for the period (339,089) (167,070) (392,002) Adjustments for: Depreciation of tangible assets 182 - - Profit on disposal of property, plant - - (597) and equipment Net bank and other interest charges 34 - 10 Issue of share options 2,400 - 4,800 Net loss before changes in working (336,473) (167,070) (387,789) capital Decrease/(increase) in trade and other (36,615) 19,690 68,690 receivables (Decrease)/increase in trade and other 88,499 (122,364) (89,284) payables Cash from operations (284,589) (269,744) (408,383) Interest received 3 - 20 Interest paid (37) - (30) Net cash flows from operating (284,623) (269,744) (358,393) activities Investing Activities Purchase of Investments (162,824) - - Purchase of property, plant and (1,106) - - equipment Sales proceeds of property, plant and - - 597 equipment Net cash flows used in investing (163,930) - 597 activities Financing Activities Issue of ordinary share capital 247,500 241,596 356,500 Repayment of loan - - (10,000) New loans raised 286,000 8,375 60,000 Net cash flows from financing 533,500 249,971 406,500 activities Net decrease in cash 84,947 (19,773) (1,296) Cash and cash equivalents at beginning 10,325 11,621 11,621 of period Cash and cash equivalents at end of 95,272 (8,152) 10,325 period Comparatives for the 6 months ended 31 March 2009 have been restated to reflect the change in presentation of the consolidated cash flow statement adopted in the year ended 30 September 2009 statutory accounts. NOTES TO THE INTERIM FINANCIAL INFORMATION for the six month period ended 31 March 2010 1.                   General information The principal activity of Milestone Group PLC and its subsidiaries (the Group) is as a digital solutions agency, with a focus on web and mobile applications. Milestone Group PLC is the Group's ultimate parent company and it is incorporated in the United Kingdom with registration number 4689130. Milestone Group PLC is domiciled in the United Kingdom and has its registered office at 1(st) Floor, 2 Royal Exchange, London EC3V 3DG, and this is its principal place of business. Milestone Group PLC's shares are quoted on the AIM market of the London Stock Exchange. Milestone Group PLC's consolidated financial statements are presented in Pounds Sterling (£). These consolidated financial statements have been approved for issue by the Board of Directors on 8 June 2010. 2.                   Basis of preparation The financial information in the half yearly report has been prepared using the recognition and measurement principles of International Accounting Standards, International Financial Reporting Standards and Interpretations adopted for use in the European Union (collectively Adopted IFRSs). The principal accounting policies used in preparing the half yearly report are those the Group expects to apply in its financial statements for the year ending 30 September 2010 and are unchanged from those disclosed in the Group's Director's report and consolidated financial statements for the year ended 30 September 2009. The financial information for the six months ended 31 March 2010 and the six months ended 31 March 2009 is unaudited and does not constitute the Group's statutory financial statements for those periods. The comparative financial information for the full year ended 30 September 2009 has, however, been derived from the audited statutory financial statement for that period. A copy of those statutory financial statements has been delivered to the Registrar of Companies. While the financial figures included in this half-yearly report have been computed in accordance with IFRSs applicable to interim periods, this half-yearly report does not contain sufficient information to constitute an interim financial report as that term is defined in IAS 34. Going concern As stated in the year end accounts to 30 September 2009, the business model is based around generating revenue from two new areas; website development and commissions from the sale of the JumpStart Wireless and Ve Interactive products. While the sales have been slower than anticipated, the Board has prepared forecasts which reflect agreements that have or are expected to be entered into to settle existing obligations of the business and the revenues and costs anticipated from these new revenue streams based on a pipeline of anticipated customers. These projections show the business will be profitable and cash generative in the future. However, achieving these forecasts will be dependent upon achieving sales in a new market place and obtaining sufficient funding to settle existing obligations and the Board is confident of being able to achieve this. However, the Board continues to closely manage the timing of settlement of its liabilities and recognises that going forward further fund raisings are likely to be required in the short term to enable the Company to meet its liabilities and provide additional working capital. The Board is aware that in the event that it is unable to manage the timing of settlement of its liabilities or to raise further funds in the short term, the Group's ability to continue as a going concern would be impacted. 3.                   Loss per share The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the average weighted 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 500,000 share options outstanding at 31 March 2010 (2009: nil), however the figures have not been adjusted to reflect conversion of these share options as the effects would be anti-dilutive. Loss for 6 Weighted Per share Loss for 6 Weighted Per share months to average number amount months to average number amount 31 March 2010 of shares 31 March 2009 of shares £ (pence) £ (pence) (339,089) 96,774,808 (0.35) (167,070) 65,053,013 (0.26) 4.                   Trade and other payables   Unaudited Unaudited Audited six months six months year ended ended ended 31 March 2010 31 March 2009 30 Sept 2009 £ £ £ Trade Creditors 302,152 415,503 257,359 Taxation and Social Security 16,708 452 20,816 Other Payables - 20,376 - Accruals and deferred income - 31,549 95,249 Loans 336,000 45,875 50,000 -----------------------------------------------   654,860 513,755 423,424 ----------------------------------------------- 5.                   Share Capital 31 March 30 Sept     2010   2009     Number £ Number £ Authorised Ordinary shares of 0.1p 2,267,095,595 2,267,096  2,267,095,595  2,267,096 --------------------------------------------------     2,267,095,595 2,267,096  2,267,095,595 2,267,096 -------------------------------------------------- Allotted, called up and fully paid Ordinary shares of 0.1p 106,585,734 106,586  88,297,729 88,298 --------------------------------------------------     106,585,734 106,586  88,297,729  88,298 -------------------------------------------------- On 30 September 2009 the Company announced that it had agreed to issue 1,860,467 ordinary shares of 0.1p each for a settlement of outstanding trade payables of £33,128. On 12 October 2009 the Company announced that it had agreed to issue 6,686,665 ordinary shares of 0.1p each for a combination of cash consideration of £130,000, settlement of outstanding trade payables of £9,550 and settlement in lieu of repayment of loans / interest of £10,900. On 15 December 2009 the Company announced that it had agreed to issue 1,200,000 ordinary shares of 0.1p each for a cash consideration of £30,000. On 24 December 2009 the Company announced that it had agreed to issue 2,502,555 ordinary shares of 0.1p each for settlement of outstanding trade payables of £45,546. On 7 January 2010 the Company announced that it had agreed to issue 1,727,271 ordinary shares of 0.1p each for a cash consideration of £47,500. On 17 February 2010 the Company announced that it had agreed to issue 1,090,908 ordinary shares of 0.1p each for a cash consideration of £30,000. On 1 April 2010 the Company announced that it had agreed to issue 363,636 ordinary shares of 0.1p each on 31 March 2010 for a cash consideration of £10,000 and 364,170 ordinary shares of 0.1p each for a settlement of outstanding trade payables of £6,555.05. On 9( )April 2010 the Company announced that it had agreed to issue 2,492,333 ordinary shares of 0.1p each on 31 March 2010 for the conversion of certain outstanding loans together with associated accrued interest amounting to £37,385. 6.                   Interim Report Copies of the interim report are available to shareholders. Additional copies may be obtained from Milestone Group PLC's registered office: 1(st) Floor, 2 Royal Exchange Steps, London EC3V 3DG or on the company's website at www.milestonegroup.co.uk < http://www.milestonegroup.co.uk/>. [HUG#1422553]

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