Half-yearly report

MILESTONE GROUP PLC

HALF YEARLY REPORT

Milestone Group PLC ("Milestone" or the "Company"), the AIM quoted (AIM: MSG) provider of digital media and technology solutions, announces its half yearly report for the six months ended 31 March 2012.

Highlights

• Revenues in the six month period of £544,686 (six months to 31 March 2011: £18,731) 

• Revenues in the 1st half of the year exceed those generated by Oil Productions Ltd, a wholly-owned subsidiary of Milestone acquired in August 2011, in the whole of the prior year, further demonstrating the group synergies and growth potential of the acquisition 

• Net liabilities at 31 March 2012 reduced to £311,786 (31 March 2011: £443,946; 30  September 2011: £462,394) 

• Appointment of Anthony Sanders to the Board as Technical and Development Director 

• Oil Productions Ltd continues to work with Nissan's luxury brand, Infiniti 

• £553,430 of new funds raised by way of a placing during the period and a further £258,570 raised post period end - the last £750,000 was raised at a significant premium to existing market price 

• Re-brand complete and new website launched post period end www.milestonegroup.co.uk 

Deborah White, Chief Executive, said:

"The acquisition of FEDS and Oil Productions in August 2011 has allowed Milestone to fully position itself as a media and technology solutions provider. We are pleased to report that the Company had six month revenues of over £0.5m demonstrating the early signs of Milestone's growth potential."

For further information:

Milestone Group PLC	www.milestonegroup.co.uk
Deborah White, Chief Executive	Tel: [phone]
Cairn Financial Advisers LLP, Nominated Adviser Liam Murray / Avi Robinson	Tel: [phone]
Hybridan LLP, Broker Claire Louise Noyce / Deepak Reddy	Tel: [phone]

CHIEF EXECUTIVE'S STATEMENT

The last twelve months have seen the Company focus its efforts on acquiring the tools and delivery capabilities necessary to begin to implement its vision of becoming a market leader in the provision of media and technology solutions.

During the period, the Company generated revenues of £544,686 (six months to 31 March 2011: £18,731) resulting in a reduced loss of £549,621 (six months to 31 March 2011: loss of £624,819). The balance sheet has continued to strengthen and net liabilities have reduced to £311,786 (31 March 2011: £443,946; 30 September 2011: £462,394).

In the six months to 31 March 2012, the Company has concentrated on consolidating the Group's offering following the acquisition of Oil Productions Ltd ("Oil") and the purchase of the FEDS software in August 2011. These acquisitions mean that we now have a proven in-house team capability with which to deliver both bespoke solutions and media services to our chosen market.

In October 2011, Oil was presented with a gold award in the Lovie Awards Social Media Marketing category for the interaction, design, and technology developed for Lynx's Fallen Angel campaign. Working closely with Mind's Eye Media and TMW, as well as Ms Kelly Brook, Oil developed a fun way to involve the user in the story using Facebook images, names of friends and integrating with Google Street View, so the Angelic Kelly can actually visit the user at their chosen address.

Since the year end, Oil has been working with Nissan's luxury brand, Infiniti, initially via OMD International Ltd and now directly. Oil has been working with Infiniti to develop and deliver a worldwide digital art competition to launch the Infiniti brand in Europe. Originally unveiled in Stockport and Leeds, the show was then rolled out in Rolle, Switzerland, and Madrid in late 2011. Further events then took place in Luxembourg, at the Geneva International Motor Show, in Marseille and in Russia in early 2012. Since the period end, events have now taken place in Vienna and Hamburg with plans to continue the roll out across further venues in Europe in the near future.

In addition, Oil has produced work for other brands, such as Conran in developing their group website strategy and their Magpie iPhone app, Eyemedia in developing Furious Hunger, an iPad based food magazine, a leading children's production company in developing Mimi, Bibi, an interactive animated children's storybook for the iPad and Heretics Agency to develop the pre-launch games for Activision such as Prototype 2 Factions.

As well as working to ensure that the Company's production team is fully integrated and appropriately positioned to upscale, the Company has continued to develop the FEDS platform culminating in the mobilisation of this software in September 2011.

The FEDS software forms the basis of a number of products. The scope of these new products far exceeds the initial electronic debriefing platform focus of the original product and as a result the Company is in the process of rebranding its core platform to reflect this extended capability.

The development of the FEDS software led to 2 pilot initiatives, OnSide and VO1CE, being launched in September 2011.  

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. During the period, OnSide has been and continues to be trialled by Charlton Athletic Community Trust.

This software has also been developed into VO1CE; a community project in conjunction with the Metropolitan Police's Hackney Gangs Intervention Team. The platform currently allows over 30 stakeholders, such as the local police, community organisations and focus groups to share information, news and events in real time and on mobile devices. Initial results of the trials of VO1CE in Hackney are currently being reviewed for further development.

The Company remains focused on developing a strong Board and management team to help take the Company to its next stage of development. During the period, the Company was pleased to welcome Anthony Sanders to the Board as Technical & Development Director.

Anthony has over 30 years experience in developing businesses and products within the Business Continuity and IT services area.  Since joining the Company, he has been working to fully integrate Oil as well as launching and developing the pilot projects.

On 28 December 2011, the Company raised £62,000 in cash for equity, as well as converting £17,500 of trade and other payables into new shares. On 28 March 2012, the Company announced a further fund raise of £750,000 in two tranches, of which £491,430 was completed at that date and the remaining £258,570 completed on 16 May 2012. These fundraisings have allowed the Company to transition through a significant period of transformation and the directors continue to monitor carefully the working capital position of the Company.

Since the period end, the Company has worked with its advisers to ensure the new vision for the business is accurately reflected in the market place. The first phase of this can be seen by the rebrand of the company combined with a new website www.milestonegroup.co.uk.

Deborah White
Chief Executive Officer

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	Unaudited six months ended 31 March 2012 £	Unaudited six months ended 31 March 2011 £	Audited year ended 30 Sept 2011 £
Revenue	544,686	18,731	155,987
Cost of sales	(377,859)	(10,484)	(106,021)
Gross profit	166,827	8,247	49,966
Other operating income	0	2,043	14,034
Administrative expenses	(700,545)	(606,366)	(1,214,448)
	(700,545)	(604,323)	(1,200,414)
Loss from operations	(533,718)	(596,076)	(1,150,448)
Finance expense	(15,921)	(28,770)	(48,170)
Finance income	18	27	66
Loss before taxation	(549,621)	(624,819)	(1,198,552)
Taxation expense	-	-	-
Loss for period	(549,621)	(624,819)	(1,198,552)
Attributable to equity shareholders of the parent	(549,621)	(624,819)	(1,198,552)
Total basic and diluted loss per share	(0.19)	(0.35)	(0.56)

There were no comprehensive income and expense items (2010: nil) other than those reflected in the above income statement. All results relate to continuing activities.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	Note	Unaudited six months ended 31March 2012 £	Unaudited six months ended 31March 2011 £	Audited year ended 30 Sept 2011 £
Non-current assets
Property, plant & equipment		8,293	558	8,293
Intangible fixed assets		782,215	558	789,121
Investments		222,222	162,824	162,824
		1,012,731	163,382	960,238
Current assets
Trade and other receivables		69,787	61,535	256,710
Cash and cash equivalents		313,828	52,132	88,113
		383,615	113,667	344,823
Current liabilities
Trade and other payables		(1,213,635)	(495,795)	(1,285,858)
Interest-bearing loans		(295,907)	(225,200)	(283,007)
		(1,509,542)	(720,995)	(1,839,457)
Non Current Liabilities
Deferred tax liabilities		(65,590)	-	(65,590)
Other payables		(133,000)	-	(133,000)
		(198.590)	-	(198,590)
Net (Liabilities)		(311,786)	(443,946)	(462,394)
Capital and reserves attributable to equity holders of the company
Share capital	4	347,119	229,354	289,228
Share premium account		11,163,249	10,155,758	10,641,830
Merger reserve		11,119,585	11,119,585	11,119,585
Capital Redemption Reserve		2,732,904	2,732,904	2,732,904
Retained losses		(25,674,643)	(24,681,547)	(25,245,941)
Total Equity		(311,786)	(443,946)	(462,394)

CONSOLIDATED STATEMENT OF CASH FLOWS

	Unaudited six months ended 31 March 2012 £	Unaudited six months ended 31 March 2011 £	Audited year ended 30 Sept 2011 £
Loss for the period	(549,621)	(624,819)	(1,198,552)
Adjustments for:
Amortisation of Intangible assets	49,272	-	50,866
Depreciation of tangible assets	-	183	365
Profit on disposal of property, plant and equipment	-	-	-
Net bank and other interest charges	15,903	28,743	48,104
Issue of share options	-	-	9,336
Issue of financial liabilities	-	-	-
Net loss before changes in working capital	(484,446)	(595,893)	(1,089,881)
Decrease/(increase) in trade and other receivables	187,071	(21,790)	(31,909)
(Decrease)/increase in trade and other payables	(27,337)	139,306	431,402
Cash from operations	(324,712)	(478,377)	(690,388)
Interest received	18	27	66
Interest paid	(1,521)	(1,840)	(1,841)
Net cash flows from operating activities	(326,215)	(480,190)	(692,163)
Investing Activities
Net of cash and overdraft acquired	-	-	(2,347)
Net cash flows used in investing activities	-	-	(2,347)
Financing Activities
Issue of ordinary share capital	553,430	558,574	765,467
Repayment of loan	(1,500)	(25,500)	(26,000)
New loans raised	-	-	43,908
Net cash flows from financing activities	551,930	533,074	783,375
Net increase in cash	225,715	52,884	88,865
Cash and cash equivalents at beginning of period	88,113	(752)	(752)
Cash and cash equivalents at end of period	313,828	52,132	88,113

NOTES TO THE HALF YEARLY REPORT

1. General information 

The principal activity of Milestone Group PLC ("Milestone" or "the Company") and its subsidiaries (together "the Group") is the provision of multimedia and technology solutions.

Milestone is the Group's ultimate parent company and is incorporated in the United Kingdom with registration number 4689130. Milestone 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's shares are quoted on the AIM market of the London Stock Exchange.

Milestone's consolidated financial statements are presented in Pounds Sterling (£).

These consolidated financial statements have been approved for issue by the Board of Directors on 19 June 2012.  

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 2012 and are unchanged from those disclosed in the Group's Directors' Report and consolidated financial statements for the year ended 30 September 2011.

The financial information for the six months ended 31 March 2012 and the six months ended 31 March 2011 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 2011 has, however, been derived from the audited statutory financial statements 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 accounts for the year to 30 September 2011, the Directors planned to strengthen the Group's balance sheet through further fund raising. This has been achieved, with a total of £553,430 of new funds raised since the year end up to the 31 March 2012. Since 31 March 2012, a further £258,570 was raised.  The        new business model of the company is based around generating revenue through technology enabled collaboration using mobile, digital and technical solutions. The Group is delivering growing revenues although progress with some of the technologies has been slower than expected.

The Board are focused on sales within the Group as a whole and have prepared forecasts to reflect the current position and the agreements that have or are expected to be entered into. These internal forecasts show the business being profitable and cash generative in the future; that with the combination of projected revenues and the on-going support of the Group's suppliers, the Group will be able to meet its obligations as they fall due.  Whilst the Directors are confident of delivering the new revenues as included in these projections, achieving the forecasts is dependent upon achieving the levels of revenues projected.

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 period. 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 18,500,000 share options outstanding at 31 March 2012 (2011: 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 months to 31 March 2012 £	Weighted average number of shares	Per share amount (pence)	Loss for 6 months to 31 March 2011 £	Weighted average number of shares	Per share amount (pence)
(549,621)	294,332,542	(0.19)	(624,819)	178,974,231	(0.35)

4. Share Capital 

			31 March 2012		30 Sept 2011
		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		347,120,376	347,119	289,228,025	289,228
		347,120,376	347,119	289,228,025	289,228

On 28 December 2011, the Company issued 6,200,000 ordinary shares at a price of 1 penny per share by way of a placing raising £62,000 and a further 1,750,000 ordinary shares at a price of 1 penny per share to certain creditors in lieu of £17,500.00 payable in respect of services provided to the Company.

On 20 March 2012, the Company issued 42,643,000 ordinary shares at a price of 1 penny per share by way of a placing raising £426,430.

On 28 March 2012, the Company issued 6,500,000 ordinary shares at a price of 1 penny per share by way of a placing raising £65,000 and a further 799,351 ordinary shares at a price of 1 penny per share to certain creditors in lieu of a liability of £7,993.51.

On 16 May 2012, the Company issued 25,857,000 ordinary shares at a price of 1 penny per share by way of a placing for cash raising £258,570.

5. Availability of the Half Yearly Report 

Copies of the half yearly report are available to shareholders on the Company's website at www.milestonegroup.co.uk and from Milestone's registered office: 1^st Floor, 2 Royal Exchange Steps, London EC3V 3DG.

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Source: Milestone Group PLC via Thomson Reuters ONE

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