Interim Results
Immedia Broadcasting plc
30 July 2004
30 July 2004
IMMEDIA BROADCASTING PLC
INTERIM RESULTS
Immedia Broadcasting PLC ('Immedia'), the UK's leading provider of live tailored
radio for retail, today announces its maiden interim results for the period
ended 30th June 2004.
Highlights
• Group revenue up 10% at £1.133m (2003: £1.026m).
• Launch of our third Live Retail Station to Vitus Apotek.
• Launch of a test Live Retail Station to Iceland.
• Dixons Live to be rolled out to 200 plus stores from 1st August.
• Impulse Live network to enlarge to 5,000 stores following contract
with SPAR (2,700 stores), the largest symbol group in the convenience
sector.
• Independent research, endorsed by RAJAR, confirmed the current Impulse
Network has 11 million visitors a week; with the addition of SPAR this
will double to some 22 million visitors.
POSITIVE FUTURE OUTLOOK
Commenting on the results Bruno Brookes, Chief Executive of Immedia, said:
'This first half year has been challenging but we have seen positive growth in
the Immedia business.
We continue to invest in expanding the Impulse Live Network. In June we signed
the SPAR store group to the Impulse Live network. As a result, the Impulse Live
network is now the UK's largest in-store media network, comprising of 5,000
stores.
Recent IPSOS research approved by RAJAR, confirms 11 million visitors across the
2500 store base, with a 57% awareness level and 23% directly influenced into
purchasing products. With the inclusion of SPAR, the radio station will
influence approximately £90 million of purchases a week within the 5000 stores.
A delay in the expansion of the Impulse Live network has had an effect on first
half year revenue. The trial for Iceland Live has got off to a good start, with
positive feedback from staff and uplifts in consumer spending. Dixons Live,
having been trialed in 50 stores for eight months with encouraging results, is
now being rolled out to 200 plus stores. This latest contract success bears
testament to the concept of Immedia's radio stations. Lloyds Pharmacy Live and
Vitus Apotek idag continue to progress well, and in accordance with
expectations.
I remain confident that Immedia Broadcasting is in a fast growing media space.
The industry as a whole is recognising the real potential of in-store media and
we continue to provide quality output delivering impressive sales results for
our clients.'
For further information, please contact:
Immedia Broadcasting PLC gcg hudson sandler
Bruno Brookes, Chief Executive Andrew Hayes
Robert Parker, Finance Director Sandrine Boussard
Tel: 01635 572800 Tel: 020 7796 4133
Chairman's Statement
Overview and Current Trading
The business has progressed satisfactorily during the period.
One new station was launched in the period and the roll out of another of our
stations is starting now. In April Vitus Apotek commenced broadcasting live in
Norwegian to their network of retail pharmacies in Norway from our base in
Newbury. In the UK live trials have been running for two major high street
retail brands, Dixons and Iceland until the period end. Iceland commenced 2
months ago by broadcasting to 30 of their stores and Dixons Live, having been
broadcasting to 50 test stores until July, is now being rolled out to 200 plus
stores.
Newsagents Radio has been re-branded as Impulse Live to reflect the development
of its store profile from mainly the confectionery tobacconist and newsagents
(CTN) to a more broadly based mix of convenience stores and CTNs. The signing of
a new contract in the period with SPAR, the largest of the symbol independent
retailers with 2,700 outlets, has doubled the size of our potential network for
Impulse Live which will now be able to broadcast to a national retail network of
convenience outlets with a combined total of 22m visitors each week.
Financial Review
Revenue for the first six months was £1.133m, an increase of 10% on the
comparative period in 2003. The loss on ordinary activities before taxation of
£250,563 (2003 - £236,852 loss) includes a depreciation charge of £213,084 (2003
- £128,66). £182,000 was invested in studio facilities and IT to increase
capacity to meet current and anticipated future demand for further stations.
We now have seven studios with a full production suite at our Newbury base. A
further £368,000 was invested in extending and maintaining our Impulse Live,
Lloyds Pharmacy Live and Vitus Apotek idag retail networks. At the end of the
half-year the company had a cash balance of £1.7m.
Outlook
For the remainder of 2004 the main focus of our efforts will be on two fronts.
The first will be to realise the revenue potential that Impulse Live represents
with its expanded retailer base and audience reach. The second will be to work
with our trial station client, Iceland, to bring it, as recently done for
Dixons, to the successful conclusion of its test phase and into eventual
roll-outs.
For the longer term we are talking to a number of major retailers and can see
good growth in the further development of the in-store media sector. Immedia's
unique in-store media solution of the live broadcasting of radio programming
created and profiled to match retailers individual brand positioning and
marketing programmes continues to attract strong interest from retailers and
this gives us confidence for the future prospects of the business.
Geoff Howard-Spink
Chairman
28th July 2004
Financial Notes attached:
Consolidated Profit & Loss Account
Unaudited Unaudited Unaudited
Note Half Year Half Year Year Ended
30 June 04 30 June 03 31 Dec 03
£ £ £
Turnover 8 1,132,521 1,025,664 1,769,005
Cost of Sales (525,731) (386,184) (759,280)
Gross Profit 606,790 639,480 1,009,725
Administrative expenses (880,960) (854,082) (1,602,673)
Operating Loss (274,170) (214,602) (592,948)
Depreciation of tangible fixed assets (213,084) (128,661) (294,974)
Exceptional items 9 - (224,500) (302,855)
Operating (loss)/profit before depreciation,
exceptional items and interest (61,086) 138,559 4,881
Interest received and similar income 36,535 258 5,834
Interest payable and similar charges (12,928) (22,316) (69,646)
Loss on ordinary activities before taxation (250,563) (236,660) (656,760)
Taxation 6 - (192) (192)
Loss on Ordinary activities after taxation (250,563) (236,852) (656,952)
Retained loss for the financial year (250,563) (236,852) (656,952)
Loss per share - 2.2p - 3.1p - 8.5p
Diluted Loss per share 7 - 2.2p - 3.1p - 8.5p
The results for all periods relate to continuing operations
Consolidated Balance Sheet
Unaudited as Unaudited as Unaudited as
Note at 30 June 04 at 30 June 03 at 31 Dec 03
£ £ £
Fixed Assets
Tangible Assets 10 1,606,318 1,048,130 1,246,459
Current Assets
Stocks 1,636 237 1,193
Debtors 11 944,529 381,853 612,647
Cash at bank and in hand 1,731,331 43,254 3,299,437
2,677,496 425,344 3,913,277
Creditors: amounts falling due within
1 year 12 (1,164,950) (1,387,228) (1,273,535)
Net current assets/liabilities 1,512,546 (961,884) 2,639,742
Total Assets less current liabilities 3,118,864 86,246 3,886,201
Creditors: Amount falling due greater than
1 year (250,000) (241,318) (750,000)
Provisions for liabilities and charges (10,000) - (10,000)
Net Assets/(liabilities) 2,858,864 (155,072) 3,126,201
Capital and Reserves
Called up share capital 1,170,791 7,617 1,170,791
Share premium account 3,356,186 2,999,416 3,372,960
Profit and Loss Account (3,913,446) (3,162,105) (3,662,883)
Merger reserve 2,245,333 - 2,245,333
Equity Shareholders Funds/(deficit) 2,858,864 (155,072) 3,126,201
Consolidated Cash Flow Statement
Unaudited Unaudited Unaudited
Note Half Year to Half Year to Year Ended
30 June 04 30 June 03 31 Dec 03
£ £ £
Net cash flow from operating activities 1 (361,803) 518,709 (74,008)
Returns on investments & servicing of finance
Interest received 36,965 207 5,834
Interest paid (12,928) (22,571) (70,005)
Net cash outflow from returns on investments & servicing
of finance 24,037 (22,364) (64,171)
Taxation
Corporation Tax Paid - (192) (192)
Capital Expenditure
Payments to acquire tangible fixed assets (730,340) (557,812) (921,184)
Proceeds from sale of fixed assets - - -
Equity Dividends Paid - - -
Cash (outflow)/Inflow before management of liquid
resources and financing (1,068,106) (61,659) (1,059,555)
Management of liquid resources
Decrease/(Increase) in short term deposits 1,700,000 - (3,200,000)
Financing
Issue of ordinary share capital - - 3,782,051
Cash inflow from increase in debts - 129,517 650,000
Repayment of debts (500,000) - -
Net cash inflow/(outflow) from financing (500,000) 129,517 4,432,051
Increase/(decrease) in cash in the period 131,894 67,858 172,496
Reconciliation of net cash flow to movement in net debt
Unaudited Unaudited Unaudited
Note Half Year to Half Year to Year Ended
30 June 04 30 June 03 31 Dec 03
£ £ £
Increase in cash in the period 131,894 67,858 172,496
Cash outflow/(inflow) from decrease/(increase) in debt
financing 500,000 (129,517) (650,000)
Cash outflow/(inflow) from short term deposits (1,700,000) 3,200,000
Movement in net funds/(debt) in the period (1,068,106) (61,659) 2,722,496
Net funds/(debt) at the start of the period 2,549,437 (173,059) (173,059)
Net funds/(debt) at the end of the period 2 1,481,331 (234,718) 2,549,437
Notes to the Cashflow Statement
1. Reconciliation of operating loss to net cash flow from operating activities
Unaudited Unaudited Unaudited
Half Year to Half Year to Year Ended
30 June 04 30 June 03 31 Dec 03
£ £ £
Operating loss (274,170) (214,602) (592,948)
Depreciation charge 213,084 128,661 294,974
Loss on sale of fixed assets - 1,212 1,212
Increase in stocks (443) (237) (1,193)
Increase in debtors (322,138) (208,113) (377,500)
Increase in creditors 21,864 811,788 601,447
(361,803) 518,709 (74,008)
2. Analysis of net funds
31 Dec 03 Cash Flow 30 June 04
£ £ £
Cash in hand, at bank 122,055 109,276 231,331
Overdrafts (22,618) 22,618 -
131,894
Loans - short term position - - -
Loans - long term position (750,000) 500,000 (250,000)
Cash on deposit 3,200,000 (1,700,000) 1,500,000
Net funds 2,549,437 (1,068,106) 1,481,331
Notes to the Interim Results
3. Basis of preparation
The accounts of the company for the six months ended 30 June 2004, which are
unaudited, were approved by the board on 28th July 2004. They have been
prepared under the historical cost accounting rules and in accordance with
applicable accounting standards. The results contained in this statement do not
constitute statutory accounts as defined in section 240 of the Companies Act
1985.
4. Merger Accounting
On the 20 November 2003 a new holding company was brought into the group. This
was carried out by a share for share exchange and the existing shareholders of
Immedia Broadcast Ltd received 1,000 10p Ordinary shares in Immedia Broadcasting
Plc for every share held. There was no cash consideration.
This group reconstruction has been accounted for as a merger as permitted by FRS
6 acquisitions and mergers. Following these principles the entities are
combined. This transaction qualifies under section 131 of the Companies Act
1985, which exempts the parties from creating share premium on this transaction.
The difference between the investment value carried in Immedia Broadcasting
Plc and the capital base of Immedia Broadcast Ltd is taken to a merger reserve.
Under the merger method, subsidiaries acquired are included as if they had
always been members of the group.
5. Employees Benefit Trust (EBT)
Group accounts for the current year and the comparative figures includes an EBT
in accordance with UITF 38.
6. Taxation
During the period the Group made tax losses (loss to 31 December 2004 and to 30
June 2004), which have been carried forward. The losses carried forward of
£4,092,658 (31 December 2003: £3,595,153) have not been recognised as a deferred
tax asset due to the uncertainty of their eventual crystallisation.
7. Loss Per Share
Loss per share is based on the loss after tax of £250,563 (30 June 2003: loss of
£236,852: 31 December 2003: £656,952) divided by the weighted average number of
Ordinary shares in issue in each of the relevant periods; 30 June 2004
11,641,910 shares (31 December 2003 7,829,951 shares). Diluted loss per share
for 30 June 2004 is based on 11,641,910 shares (31 December 2003 7,789,178
shares).
June 2003 comparatives are a notional figure based on 7,617,000 shares. The
number of actual shares at the time was 7,617 £1 ordinary shares, that was based
on the share for share principles of 1,000 10p shares in Immedia Broadcasting
Plc for every 1 share in Immedia Broadcast Ltd (formerly Storm Digital
Broadcasting Ltd).
8. Turnover
Turnover represents the amount receivable for good and services to third party
customers (excluding value added tax) and sales commissions.
9. Exceptional Items
Exceptional items relate to the legal fees associated with abortive investment
and other funding in the first half of 2003 (£152,500) and contract drafting
(£72,000), included within administrative expenses. In addition in cost of
sales there is an exceptional item relating to the re-point of all Impulse Live
satellites, amounting to £78,355 which was incurred in the second half of 2003.
10. Fixed Assets
Unaudited Unaudited Unaudited
as at as at as at
30 June 04 30 June 03 31 Dec 03
£ £ £
Networks
Cost 1,553,875 1,010,746 1,185,461
Accumulated Depreciation (430,573) (176,143) (289,882)
Net Book Value 1,123,302 834,603 895,579
Studio
Cost 492,050 287,002 328,779
Accumulated Depreciation (225,418) (137,462) (170,884)
Net Book Value 266,632 149,540 157,895
Office Equipment
Cost 246,436 111,591 251,610
Accumulated Depreciation (66,060) (62,392) (77,108)
Net Book Value 180,376 49,199 174,502
IT Equipment
Cost 51,171 19,268 26,187
Accumulated Depreciation (15,162) (4,480) (7,704)
Net Book Value 36,009 14,788 18,483
Total
Cost 2,343,532 1,428,607 1,792,037
Accumulated Depreciation (737,214) (380,477) (545,578)
Net Book Value 1,606,318 1,048,130 1,246,459
11. Debtors - Amounts falling due within one year
Unaudited Unaudited Unaudited
as at as at as at
30 June 04 30 June 03 31 Dec 03
£ £ £
Trade debtors 719,092 340,246 352,671
Other debtors 87,511 3,975 133,873
Prepayments 137,926 37,632 126,103
944,529 381,853 612,647
12. Creditors - Amounts falling due within one year
Unaudited Unaudited Unaudited
as at as at as at
30 June 04 30 June 03 31 Dec 03
£ £ £
Bank Overdraft - 41,754 -
Trade Creditors 610,621 754,667 925,179
Other Creditors including Taxation & Social Security 79,220 138,172 45,004
Accruals and deferred income 475,109 452,635 303,352
1,164,950 1,387,228 1,273,535
13. Reserves
Reserves as at 30 June 2004 Merger Share Share Profit & Loss A/c
Reserve Capital Premium
£ £ £ £
Beginning of Period 2,245,333 1,170,791 3,372,960 (3,662,883)
Retained loss for the period - - - (250,563)
Additional costs relating to floatation - - (16,774) -
End of Period 2,245,333 1,170,791 3,356,186 (3,913,446)
Reserves as at 31 December 2003 Merger Reserve Share Capital Share Premium Profit &
£ £ £ Loss A/C
£
Beginning of Period - - - (3,005,931)
Retained loss for the period - - - (656,952)
New share capital issue (net of related
costs) - 1,170,791 3,372,960 -
Merger reserve (arising on group
reconstruction) 2,245,333 - - -
End of Period 2,245,333 1,170,791 3,372,960 (3,662,883)
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