Interim Results
Milestone Group PLC
29 June 2004
For Immediate Release 29th June 2004
MILESTONE GROUP PLC
RESULTS FOR THE SIX MONTHS ENDED 31st MARCH 2004
Milestone Group PLC ('Milestone' or 'the Group'), the AIM-listed cross media
group, today announces its results for the six months ended 31st March 2004.
Highlights during the period
• Turnover of £3.1m, gross profit of £1.5m and operating losses of £1m
• Launch of new property related titles in Basingstoke and Oxfordshire
• In Publishing Division, Milestone now has in-house pre-press function,
lowering future costs
• Radio Division significantly improved with the disposal of two non core
radio assets for £1.25m and RAJAR figures for Rugby FM placing it number
one in its market
• Television Division expanded, with acquisition of licenses in Southampton
and Portsmouth
Commenting on the results, Andy Craig, Chief Executive, said:
'These results represent the first trading period since Milestone fully
consolidated its local television, radio and publishing assets. We are beginning
to see some strong attraction for our unique offering for our clients through
local publishing, radio and television advertising, whilst continuing to look at
opportunities of growing the business organically and through selective
acquisitions.'
For further information:
Milestone Group Tel: 01235 547 800
Andy Craig - Chief Executive
Buchanan Communications Tel: 020 7466 5000
Bobby Morse / James Strong
Attached:
Chief Executive's Review
Consolidated Profit & Loss Account
Consolidated Balance Sheet
Consolidated Cashflow Statement
Notes to the Accounts
Milestone Group PLC Interim Report
Chief Executive's Review for the six month period ended 31 March 2004
--------------------------------------------------------------------------------
Milestone has made progress during its first six months trading period as a
fully consolidated company with confirmation of the Group's ability to achieve
revenues through its unique cross media strategy focused on local and niche
markets.
In the six months to the 31st March 2004 the Group turnover was £3.1m with a
gross profit of £1.5m and operating loss for the period of £1m. Cost of disposal
of assets, acquisition of minority interests and goodwill amortisation amounted
to a further £1.1m producing a total loss for the period of £2.1m. The basic and
diluted loss per share for the period amounted to 10p.
Publishing
We have started piloting new publications in two core areas of the group. In
North Hampshire we have launched 'Basingstoke Property Weekly' as a weekly
property supplement. In Oxfordshire we have established 'Oxfordshire Living' - a
monthly arts and lifestyle magazine targeting wealthy households. Though early
in their development the initial response to our new publications has been
strong and a roll out of similar titles to further regions is therefore being
considered. Our new magazines department provides us with the ability to exploit
further niche publishing opportunities in the future.
In December we established an in-house 'pre-press' department to provide
advertising design services to clients. Whilst considerable set-up costs have
been incurred in our first year (particularly during the 'handover period'
during which time we have been required to continue to employ external
production services) this new department will ensure the Group's publishing
division benefits from increased efficiencies in future years.
In May we were delighted to welcome Tom McGowran, the former Chief Executive of
Tindle Newspapers, in the new position of Publishing Director. In our
preliminary results statement we acknowledged that the calendar year had begun
with some challenging months and this was particularly the case in publishing.
Advertising sales within the Courier Group, acquired by Milestone in July 2003,
remain predominantly on short-term contracts. One of Tom's priorities will be to
seek to build the number of clients signing multiple week bookings, stabilizing
weekly revenues. We are extremely pleased to have been able to attract someone
of Tom's calibre and we share Tom's confidence in his ability to substantially
grow the profitability of the Group's publishing assets as part of a wider
cross-media mix.
The impact of the set-up costs for our pre-press department combined with the
volatility associated with the Courier Group's short term advertising contracts
will make a material impact on the profitability of the division.
Milestone Group PLC Interim Report
Chief Executive's Review for the six month period ended 31 March 2004
--------------------------------------------------------------------------------
Radio
Milestone views commercial radio stations as the building blocks from which we
are able to grow our media business. Our strategy is to add value to the Group
principally by launching brand extensions on the back of the loyalty enjoyed by
local or regional niche broadcast platforms, breaking the revenue 'ceiling' that
is often perceived to exist in radio. Recently in Basingstoke we launched a
Kestrel loyalty card in conjunction with retailers whilst in Oxford, Passion
magazine, a new glossy monthly listings magazine, has made a profitable
contribution to the Passion brand since it launched in January 2004.
Whilst a number of radio groups appear to question the value of 'localness' in
their broadcast output, Milestone is proving the success of its strategy
recording increased listening across its radio portfolio, with our most recently
launched station, Rugby FM, now established as the market leader according to
official RAJAR research. Ofcom have announced their plans for new FM licenses
and it is the Group's intention to submit applications with partners in a number
of areas.
During the period the Group completed the disposal of two non-core London-based
subsidiary undertakings, Time FM 106.8 Limited and Fusion 107.3 FM Limited. The
aggregate consideration for the sale of £1.25m was received in line with the
payment terms agreed with the purchaser prior to the end of the period. The
Group's trading results for the year will include some exceptional costs
associated with this sale.
Television
In November 2003 we acquired the outstanding minority shareholding in SIX TV
Oxford not already owned by the Group. During the past six months costs have
been further reduced and benefits of the integration of the cross-media
businesses have been highlighted, most especially through impressive audience
research results for the channel. We believe that these research results will
over time translate into higher advertising order values and, to this end, we
recently brought in new sales management to implement our revenue plan.
We have continued to participate in constructive discussions with Ofcom and the
DCMS regarding the implications of 'digital switchover' for local television
operators.
As announced in April, we have acquired ownership of the Local Television
licences for Portsmouth and Southampton (the latter of which was inherited as an
'on-air' broadcasting channel and we have now re-branded as SIX TV). This week
we completed an agreement to acquire a substantial amount of studio and
transmission equipment of use to SIX TV Southampton not previously owned by the
channel.
Milestone Group PLC Interim Report
Chief Executive's Review for the six month period ended 31 March 2004
--------------------------------------------------------------------------------
Outlook
In the first quarter of the new financial year the Group progressed broadly in
line with management expectations. Revenue in the subsequent two quarters has
proven to be more volatile and, combined with the one-off issues already
highlighted in the Publishing Division, we therefore anticipate that losses for
the year will now be higher than originally expected. The Board is confident
that fluctuations will be reduced as a consequence of new sales management and
procedures recently implemented. Overall we anticipate that the outcome for the
year will reflect improved trading - demonstrating the opportunities for greater
future growth presented by expansion of our cross media strategy.
The smaller local media marketplace remains fractured with no dominant player
providing all three media. The Group has been offered a short term facility
should this be required for working capital purposes. At the same time, we are
exploring a number of options for organic developments and potential
acquisitions.
Andy Craig
Chief Executive
29th June 2004
Milestone Group PLC Interim Report
Consolidated profit and loss account for the six month period ended 31 March
2004
--------------------------------------------------------------------------------
Unaudited Audited
six months three months
ended ended
Note 31 March 30 September
2004 2003
£ £
Turnover 3,083,549 1,191,089
Cost of sales (1,606,397) (672,751)
---------- ----------
Gross Profit 1,477,152 518,338
Distribution costs - (28,868)
Administrative expenses:
---------- ----------
Impairment of goodwill - (2,189,490)
Loss on disposal of group operations 2 (296,083) -
Other administrative expenses (3,308,438) (1,924,720)
---------- ----------
(3,604,521) (4,114,210)
---------- ----------
(2,127,369) (3,624,740)
Other operating income - 40,130
---------- ----------
Group operating loss (2,127,369) (3,584,610)
Share of operating loss in associated (74,400) (77,930)
undertakings ---------- ----------
Loss on ordinary activities before (2,201,769) (3,662,540)
interest
Interest receivable 15,020 19,834
Interest payable and similar charges (3,044) (13,760)
---------- ----------
Loss on ordinary activities before (2,189,793) (3,656,466)
taxation
Taxation on loss from ordinary 3 - (5,523)
activities ---------- ----------
Loss on ordinary activities after (2,189,793) (3,661,989)
taxation
Minority interest 49,747 26,051
---------- ----------
Loss for the financial period and
accumulated
for the period (2,140,046) (3,635,938)
========== ==========
Basic and diluted loss per share 4 (10.0) p (39.3) p
========== ==========
All amounts relate to continuing activities
All recognised gains and losses are included in the profit and loss account
Milestone Group PLC Interim Report
Consolidated balance sheet at 31 March 2004
--------------------------------------------------------------------------------
Unaudited Audited
31 March 2004 30 September
2003
Note £ £ £ £
Fixed assets
Intangible assets 5 12,483,432 14,075,558
Tangible assets 862,465 1,098,148
Fixed asset 1,163,387 1,237,787
investments ---------- --------
14,509,284 16,411,493
Current assets
Debtors - due in more than 1,692,431 1,431,334
1 year
Cash at bank and in 675,317 894,770
hand --------- --------
2,367,748 2,326,104
Creditors: amounts falling
due
within one year (2,008,307) (1,874,771)
--------- --------
Net current 359,441 451,333
assets ---------- --------
Total assets less current 14,868,725 16,862,826
liabilities
Creditors: amounts falling
due
after more than one (92,736) (152,163)
year
Provisions for liabilities (15,523) (15,523)
and charges ---------- ----------
14,760,466 16,695,140
========== ========
Capital and
reserves
Called up share 6 2,185,510 2,159,998
capital
Share premium 7 6,997,235 6,997,235
account
Merger reserve 7 11,119,585 10,889,978
Profit and loss 7 (5,568,740) (3,428,694)
account ---------- --------
Equity 14,733,590 16,618,517
shareholders'
funds
Minority 26,876 76,623
interests ---------- --------
14,760,466 16,695,140
========== ========
Milestone Group PLC Interim Report
Consolidated cash flow statement for the six month period ended 31 March 2004
--------------------------------------------------------------------------------
Unaudited Audited
31 March 2004 30 September
2003
Note £ £ £ £
Net cash outflow
from
operating 8 (1,103,550) (1,036,278)
activities
Returns on
investments and
servicing of
finance
Interest received 15,020 19,834
Interest paid (3,044) (13,760)
-------- --------
Net cash inflow from
returns on
investment and servicing of 11,976 6,074
finance
Taxation
UK corporation tax - -
Capital
expenditure
Purchase of tangible (82,185) (5,917)
fixed assets
Acquisitions and
disposals
Purchase of subsidiary - (4,500,000)
undertakings
Cash acquired with - (314,557)
subsidiary undertakings
Proceeds from disposal of 1,250,000 -
group operations
Overdraft from disposal of 12,027 -
group operations
Cost of disposal of group (141,636) -
operations -------- --------
Net cash inflow/(outflow)
from
acquisitions and disposals 1,120,391 (4,814,557)
--------- --------
Cash outflow before (53,368) (5,850,678)
financing
Financing
Issue of share - 8,130,000
capital
Cost of issuing - (657,765)
share capital
Loan repayments (31,186) (978,000)
-------- --------
Cash (outflow)/inflow from (31,186) 6,494,235
financing --------- --------
(Decrease)/increase
in cash in the
period 9,10 (84,554) 643,557
========= ========
Milestone Group PLC Interim Report
Notes to the Interim financial information for the six month period ended 31
March 2004
--------------------------------------------------------------------------------
1 Basis of preparation
The Interim Report was approved by the Board of Directors on 29 June 2004.
The financial information contained in this Interim Report has been
prepared on the basis of the accounting policies set out in the Group's
audited accounts for the period ended 30 September 2003.
The financial information for the six months ended 31 March 2004 are
unaudited.
The financial information for the Group set out above does not constitute
'statutory accounts' within the meaning of Section 240 of the Companies Act
1985. The information for the period ended 30 September 2003 has been
extracted from the statutory accounts of Milestone Group PLC for that
period which received an unqualified audit report and have been delivered
to the Registrar of Companies.
2 Loss on disposal of group operations
On 15 January 2004 the Group completed the disposal of two subsidiary
undertakings, Time FM 106.8 Limited and Fusion 107.3 FM Limited. The
consideration for the sale of Time FM 106.8 Limited was £625,000 and
resulted in a loss of £106,007 to the Group. The consideration for the sale
of Fusion 107.3 FM Limited was £625,000 and resulted in a loss of £190,076
to the Group.
The total loss on disposal of operations of £296,083 includes an amount of
£1,222,847 in respect of a write down of unamortised goodwill.
3 Taxation
Deferred tax assets have not been recognised on the basis that their future
economic benefit is not certain.
4 Loss per share
Basic loss per share has been calculated in accordance with FRS 14. Basic
loss per share has been calculated by dividing the loss on ordinary
activities before taxation by the weighted average number of ordinary
shares in issue during the period. The weighted average number of equity
shares in issue was 21,855,095 and the loss was £2,189,793. The effect of
all potential ordinary shares is antidilutive.
5 Intangible assets
Goodwill on
Consolidation
£
Cost
At 1 October 2003 16,608,636
Additions 255,119
Disposals (2,559,773)
----------
At 31 March 2004 14,303,982
==========
Amortisation
At 1 October 2003 2,533,078
Provided for the period 624,398
Disposals (1,336,926)
----------
At 31 March 2004 1,820,550
==========
Net book value 12,483,432
==========
At 31 March 2004
6 Share capital
Group and
company
2004 2004
£ Number
Authorised
Ordinary shares of 10p each 5,000,000 50,000,000
========== ==========
Group and
company
2004 2004
£ Number
Allotted, called up and fully paid
Ordinary shares of 10p each 2,185,510 21,855,095
========== ==========
On 3 November 2003, 255,119 ordinary shares of 10p each were issued at £1 each
as consideration for the transfer of the 9.26% share capital of Oxford
Broadcasting Limited not already owned by Milestone Group PLC.
7 Reserves
Share Profit
premium Merger and loss
account reserve account
£ £ £
Group
At 1 October 2003 6,997,235 10,889,978 (3,428,694)
Loss for the period - - (2,140,046)
Premium on shares issued - 229,607 -
--------- --------- ----------
At 31 March 2004 6,997,235 11,119,585 (5,568,740)
========= ========= ==========
8 Reconciliation of operating loss to net cash outflow from operating
activities
2004
£
Operating loss (2,127,369)
Amortisation 624,398
Depreciation 147,874
Loss on disposal of group operations 296,083
Increase in debtors (432,498)
Increase in creditors 387,962
---------
Net cash outflow from operating activities (1,103,550)
=========
9 Reconciliation of net cash outflow to movement in net funds
2004
£
Decrease in cash in the period (84,554)
Cash outflow from decrease in debt and lease financing 31,186
---------
Movement in the period (53,368)
Net Funds at 1 October 2003 612,371
---------
Net Funds at 31 March 2004 559,003
=========
10 Analysis of net funds
At At
1 October Cash 31 March
2003 flow 2004
£ £ £
Cash at bank and in hand 894,770 (219,453) 675,317
Bank overdrafts (251,213) 134,899 (116,314)
--------- --------- ----------
643,557 (84,554) 559,003
Debt due after one year (10,199) 10,199 -
Finance leases (20,987) 20,987 -
--------- --------- ----------
Total 612,371 (53,368) 559,003
========= ========= ==========
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