Interim Results Amendment
Thomson Intermedia PLC
21 September 2004
The following replaces the Interim Results released today at 7am under RNS
number 1487D.
The original announcement contained incorrect information, the full amended text
appears below.
THOMSON INTERMEDIA PLC
Interim Results for the six months to 31 July 2004
Thomson moves into profit as revenues jump 47%
Thomson Intermedia is a leading provider of media information
• Turnover increased by 47% to £2.74m (2003: £1.86m)
• Total sales contracts increased by 40% to £3.1m (2003: £2.2m)
• Deferred income of £2.7m (2003: £2.1m)
• Underlying profit before tax increased to £248,000 (2003: Loss before
tax £463,000)*
• Profit before tax increased to £189,000 (2003: loss £468,000)
• Underlying earning per share increased to 0.86p (2003: loss per share
1.44p)*
• Launch of Thomson's systems into Germany
• Alliance signed with dunnhumby, combining Thomson advertising
intelligence with Tesco Clubcard sales data.
* pre amortisation and share incentives
Sarah Jane Thomson, Joint Chief Executive , commented:
'I am delighted to report our first profit. It heralds the start of period of
accelerated growth for the business. Sales for the second half of the year have
remained strong with a healthy pipeline of new prospects.'
'With high barriers to entry and a substantial market opportunity, we are now
focused on increasing our sales penetration. The recent launch of our product
into Germany, Europe's largest advertising market, is the first step in
extending our business model and proprietary technology into international
markets.'
'Having reached these milestones, I am confident that we have positioned
ourselves to provide strong returns for shareholders.'
21 September 2004
Enquiries:
Thomson Intermedia Plc 020 8466 5555
Sarah Thomson - Joint Chief Executive
David Trendle - Finance Director
College Hill 020 7457 2020
Kate Pope/Adrian Duffield
Baird 020 7488 1212
Shaun Dobson/Adrian Hadden
FINANCIAL RESULTS
I am delighted to report that the Group has recorded its maiden profit since
flotation.
Turnover increased 47% to £2.74 million (2003: £1.86 million) with total sales
contracts increasing by 40% to £3.11million (2003: £2.21 million). New business
signed in this period showed substantial growth of 48% to £1.47m (2003: £0.99
million).
A combination of the increase in sales and the continuing emphasis on improving
Thomson Intermedia's technology has enabled the Group's productivity to sharply
increase. Gross margins lifted to 68.3% (2003: 53.5%).
The Group reported an underlying profit before tax of £248,000 (2003: loss of
£463,000), before amortisation and share incentives. Pre-tax profit was £189,000
(2003: loss of £469,000).
Underlying earnings per share were 0.86 pence (2003: loss per share of 1.44
pence). Actual earnings per share were 0.66 pence (2003: loss per share of 1.44
pence).
The financial strength of our Balance Sheet continues to improve with the
balance of future contracted revenues, at their highest ever level of £2.72m,
£0.60m greater than at the comparable date last year. With net current assets in
excess of £2 million there is no reduction in the emphasis placed on working
capital management. Improving sales volumes mean that the business model will
produce increasingly positive cash flow. The cash position at the half year end
was £1.03 million.
STRATEGY
Our UK product offering is now comprehensive and unique. It relies on our
proprietary databases and analytical systems to both, capture and deliver,
real-time advertising data across multi media platforms. Systems provide
creative executions linked to expenditure data and other metadata within minutes
of advertisements airing for the first time. These are delivered to our clients
in bespoke packages which enable them to understand the make up of their
advertising space and react in a much more dynamic way than was previously
possible.
Our systems now deliver complete data across Press, TV, Radio, Direct Mail, Door
Drops, Internet, Outdoor and Cinema markets, making them the most comprehensive
and timely information available to advertisers in the UK market place.
The tailored individual interfaces ensure that each client benefits from daily
alerts and relevant aggregated data on their competitive market place. These
empower our clients to review product pricing, offers and positioning of their
products and therefore react to a dynamic market place.
Our systems now capture the data on the entire UK advertising market
incorporating over 20,000 advertisers. Currently we have only 4% of the top
5,000 advertisers in the UK as clients and therefore further penetration of this
customer base will result in continued growth to the bottom line.
Our vision has been to bring transparency to a complex market. The Advertising
market is one of the last 'trust' markets which exists, inherently with little
or no accountability of its costs. In a changing world of growing
accountability and governance we have developed unique technologies and products
to provide independent visibility and transparency which is increasingly
becoming a necessity.
Our product range now includes, real-time competitive monitoring systems,
placement verification tools and systems to analyse the effectiveness of
advertising. These tools empower our customers to react quickly and make
strategic advertising decisions.
OPERATIONAL REVIEW
Our alliance with dunnhumby and the access this gives us to Tesco Clubcard sales
data, is set to see a first trial of the product targeting high value FMCG
markets. This initiative will combine the purchasing habits of 10 million
customers with our own advertising expenditure data providing the first ever
insights into the impact of advertising spend on sales. This important
development is expected to increasingly contribute to the profitability over
forthcoming trading periods.
The recent introduction of placement verification technologies, which alerts
advertisers to incidents where their adverts have failed to appear as booked, is
continuing to gain momentum and is contributing to profits. The Group is
working alongside a number of key organisations to establish this unique service
as an essential industry standard.
Our news division has benefited from further development of automatic capture
technology which has enabled us to increase the acquisition of news stories from
15 publications to several hundred with minimal additional costs. Increased
focus of sales resource will capitalise on the considerable opportunities this
presents.
The profile of the Company is allowing us to improve not only the quantity but
also more importantly the overall quality of one of our most valuable assets,
our people. We have recently recruited a high calibre Sales & Marketing Director
whose focus will be on driving UK sales to their maximum potential, and
substantively growing the number of advertisers subscribing to our services. We
have implemented a new sales structure to increase individual focus and are
recruiting a number of additional people who have experience from a variety of
media backgrounds. This initiative will enable rapid market penetration and
maximise the opportunities available to us.
The recruitment of the Sales & Marketing director has further strengthened the
group's management structure and has released resources to be directed towards
the strategic development of the group. This has already resulted in a number
of further developments most notably the replication of our business model in
Germany, through our recently announced joint venture.
LAUNCH INTO GERMANY
The recently announced joint venture with Media Control, owned by Karlheinz
Kogel in Germany is a major development for the Group. This joint venture will
facilitate entry into Europe's largest advertising market with minimal risk and
high potential reward. Media Control funds both start up and running costs of
the joint venture and all revenues will be shared equally. This will result in
our share of revenues contributing directly to the bottom line.
Equally exciting is that having adapted the systems into the German language,
the technology is now capable of conversion into other languages, thus creating
the opportunity for successive international expansion.
OUTLOOK
The second half has started strongly with a healthy pipeline and improving
market conditions. The contracted future revenues provide excellent forward
visibility and stability for future results.
The Group is now profitable from its UK core offering, net current assets are
substantial and growing and there are significant benefits yet to be realised
from the exciting new developments. Our entry into international markets for the
first time, demonstrates the potential to leverage our IP assets in additional
markets.
We are therefore confident of a continuing strong performance for the full year
and beyond.
PROFIT AND LOSS ACCOUNT
As restated
Unaudited Unaudited
Six months Six months Audited
ended ended Year ended
31 July 2004 31 July 2003 31 January 2004
Notes £'000 £'000 £'000
Turnover 2,741 1,860 4,047
Direct Expenses 1 (868) (864) (1,778)
Gross Profit 1,873 996 2,269
Operating Expenses 1,2 (1,699) (1,476) (2,934)
Operating Profit / (loss) 174 (480) (665)
Interest receivable 15 11 18
Loss on ordinary activities before taxation 189 (469) (647)
Taxation 3 - 52 325
Profit / (Loss) on ordinary activities after
taxation 189 (417) (322)
Dividends 4 - - -
Retained Profit / (Loss) transferred to
reserves 189 (417) (322)
Earnings / (Loss) per share, pence 5
-before amortisation & share incentives 0.86 (1.44) (0.97)
-basic 0.66 (1.46) (1.12)
-diluted 0.64 (1.46) (1.12)
All amounts relate to continuing activities.
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
As restated
Unaudited Six Unaudited Six Audited
months ended months ended Year ended
31 July 2004 31 July 2003 31 January 2004
Note £'000 £'000 £'000
Consolidated statement of total
recognised gains and losses
Profit / (Loss) for the financial year 189 (417) (322)
Total recognised gains and losses
for the period 6
Prior year adjustment (369) (369)
(786) (691)
BALANCE SHEET
As restated
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 July 2004 31 July 2003 31 January 2004
£'000 £'000 £'000
Fixed assets
Intangible fixed assets 37 49 43
Tangible fixed assets 560 504 451
597 553 494
Current assets
Debtors 1,735 1,175 1,438
Cash at bank and in hand 1,030 667 1,229
2,765 1,842 2,667
Creditors: Amounts falling due within one year (603) (459) (637)
Net Current Assets 2,162 1,383 2,030
Total assets less current liabilities 2,759 1,936 2,524
Accruals and Deferred Income (3,240) (2,732) (3,194)
Net Assets (481) (796) (670)
Capital and Reserves
Share capital 7,186 7,155 7,186
Share premium 5,064 5,064 5,064
Merger reserve (5,250) (5,250) (5,250)
Profit and loss (note 6) (7,481) (7,765) (7,670)
Equity shareholders' funds (481) (796) (670)
CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 July 2004 31 July 2003 31 January 2004
£'000 £'000 £'000
Cash outflow from operating activities (129) (270) 202
Taxation
Research & development tax credit received 136 52 189
Returns on investments and servicing of finance
Interest received 15 11 18
Capital expenditure
Purchase of tangible fixed assets (221) (125) (185)
Sale of tangible fixed assets - - 6
Net cash inflow / (outflow) before management
of liquid resources and financing (199) (332) 230
Management of liquid resources
Reduction in short term deposit (173) 254 91
Financing
Capital element of finance lease payments - (6) (6)
Increase / (decrease) in cash (372) (84) 315
(a) Reconciliation of operating loss to operating cash flow:
As Restated
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 July 2004 31 July 2003 31 January 2004
£'000 £'000 £'000
Operating Profit / (loss) 174 (480) (665)
Depreciation & Amortisation 119 108 223
Loss on sale of fixed asset - 1 -
Other non-cash operating expenses - - 31
(Increase) in debtors (434) (179) (306)
(Decrease) / Increase in creditors (34) (74) 106
Increase in accruals and deferred income 46 354 813
Net cash flow from operating
activities (129) (270) 202
NOTES TO THE CASH FLOW STATEMENT
(b) Analysis of net funds
Opening balance Closing balance
1 February 2004 Cash flow 31 July 2004
£'000 £'000 £'000
Cash 470 (372) 98
Liquid resources 759 173 932
Cash at bank and in hand 1,229 (199) 1,030
Total 1,229 (199) 1,030
NOTES TO ACCOUNTS
1. Basis of preparation
The financial information set out above is extracted from the consolidated
financial statements of Thomson Intermedia plc and its subsidiary Thomson
Intermedia Associates Limited (together referred to as the 'Group'). The
accounts of the Group for the six months ended 31st July 2004, which are
unaudited, were approved by the Board on 8th September 2004. These accounts
have been prepared in accordance with the accounting policies set out in the
Report and Accounts of Thomson Intermedia plc for the year ended 31st January
2004.
This interim statement does not constitute the company's statutory accounts. The
financial information presented for the 6 months ended 31 July 2003 and 2004 has
not been audited. Statutory accounts for the year ended 31 January 2004 have
been delivered to the Registrar of Companies. The auditors report on those
statutory accounts was unqualified and did not contain a statement under section
237(2) or (3) of the Companies Act 1985.
The consolidated financial statements incorporate the results of Thomson
Intermedia plc and its subsidiary undertaking as at 31st July 2004 using the
merger method of accounting.
Goodwill is the difference between the cost of an acquired entity and the
aggregate of the fair value of that entity's identifiable assets and
liabilities.
Positive goodwill is capitalised, classified as an asset on the balance sheet
and amortised on a straight line basis over its useful economic life. It is
reviewed for impairment at the end of the first full financial year following
the acquisition and in other periods if events or changes in circumstances
indicate that the carrying value may not be recoverable.
Acquisitions that entail significant market positions and which are of long-term
strategic significance to the Group's operations are classified as strategic
acquisitions, with goodwill amortised over 20 years. For acquisitions of
complementary operations in markets where the Group is already established, the
amortisation period for goodwill is between 5 and 10 years.
2. Director's Bonus scheme accrual
Due to the greater visibility for the results for the full year the Board now
consider it prudent to accrue for potential Director's bonuses in the Interim
accounts. This has the effect of reducing profits by £136,000 in the six months
ended 31 July 2004. The operating expenses for the six months ended 31 July 2003
have been restated to include 50% of the bonus due for the financial year ended
31 January 2004, which amounted to £87,000.
3. Taxation
During the period the company received a R&D Tax credit of £136,000 relating to
the year ended 31 January 2003. The company is currently pursuing R&D Tax
credits for the year ending 31 January 2004.
4. Dividend
No interim dividend is being proposed.
5. Earnings / (Loss) per share
Unaudited
Unaudited (as Restated)
Six months ended Six months ended
31 July 2004 31 July 2003
£'000 Weighted Earnings £'000 Weighted Earnings
average / (Loss) average / (Loss)
number of per share number of per share
shares pence shares pence
Earnings / (Loss) per share
before
amortisation and share incentives 248 28,744,247 0.86 (411) 28,619,247 (1.44)
Adjustment for amortisation (6) - (6) -
Adjustment for share incentives (53) - - -
Basic Earnings / (Loss) per share 189 28,744,247 0.66 (417) 28,619,247 (1.46)
Effect of options - 934,966 - -
Diluted earnings per share 189 29,679,213 0.64 (417) 28,619,247 (1.46)
Earnings per share before amortisation and share incentives are presented as the
Directors consider that this presents a meaningful measure of performance of the
group. For diluted earnings per share, the weighted average number of shares in
issue is adjusted to assume conversion of all dilutive potential ordinary
shares: those share options granted to employees where the exercise price is
less than the market price of the Company's ordinary shares. The impact of any
potential ordinary shares in the six months ended 31 July 2003 is antidilutive.
6. Prior Year adjustment
On 25th March 2004 the Board approved a change in accounting policy relating to
revenue recognition following the amendment to Financial Reporting Standard 5.
Revenue arising from all contracts is now recognised evenly across the
contractual period of those contracts. The change in policy has impacted the
comparatives as shown below:
Results under
previous policy Movement As restated
£'000 £'000 £'000
Turnover Six months
ended
31 July 03 2,211 (351) 1,860
Deferred
Income At 31 July 03 1,404 720 2,177
At 31 Jan 03 1,457 369 1,826
Profit & Loss
account At 31 July 03 (6,958) (807) (7,765)
Six months
ended 31 July 03 (351)
Relating to
previous periods (369)
Director's bonus
accrual (87)
At 31 Jan 03 (6,979) (369) (7,348)
Relating to
02/03 (127)
Relating to
previous periods (242)
The previous policy recognised a proportion of revenue on signature of the
contracts to fairly reflect the delivery of the developed systems and extensive
data library. The amended Financial Reporting Standard 5 'Commercial substance
over legal form' (Application note G) only allows separate recognition of
revenue where this is recognised contractually and those revenue components are
delivered separately. The Board implemented the change in policy to comply with
the amendment to this Financial Reporting Standard.
7. Interim report
Copies of this interim report for the six months ended 31st July 2004 will be
sent to shareholders. Further copies will be available from the Company
Secretary at the registered office.
This information is provided by RNS
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