Interim Results

Immedia Broadcasting plc 01 August 2005 1 August 2005 IMMEDIA BROADCASTING PLC INTERIM RESULTS Immedia Broadcasting PLC ('Immedia'), the UK's leading provider of live tailored radio, today announces its interim results for the six months ended 30 June 2005. Highlights • Group revenue up 36% to £1.543m (2004: £1.133m). • Increased operating profit before depreciation, amortisation and interest to £51k (2004: loss of £61k). • Gross profit margins of 55% (2004: 54%). • Strong balance sheet maintained with a stable cash balance of £1.0m. • Launch of our fourth Live Retail station to major retail bank. • Successful launch of Radiovision in March; Lloydspharmacy trial progressing well. • Impulse Live network expanded by 1,150 stores and advertising revenues improved to £156k (2004: £84k). • Loss for half year: -£273k (2004: -£251k) as a result of increased depreciation owing to further investment in the studios and in the network. • Loss per share increased to -2.45p (2004: -2.24p) Commenting on the results Bruno Brookes, Chief Executive of Immedia, said: 'As announced in July, the year to date has been less satisfactory than anticipated, but the business remains financially sound and is continuing to attract strong levels of interest from major retailers. We have experienced a slower than expected increase in airtime revenues owing to delays in the expansion of our sales team and delays in the launch of two subscription stations. Group turnover in the first half was up by 36 percent on last year and we continue to maintain a healthy cash balance. We currently have a good pipeline of opportunities we are working hard to convert into further contracts. In the first half of this year we have successfully rolled out the first live radio station to a major retail bank. We also trialled a live radio station with IKEA and have a further trial signed for the last quarter of this year. We continue to be pleased with the roll-out of Impulse Live with 1,150 stores added to the network in the last few months. We successfully launched Radiovision in March 2005. The product blends live radio presentation and visual content on plasma screens. In effect it offers the nearest thing to live TV as we know it and is completely tailored for each retailer. Lloydspharmacy is testing Radiovision and is happy with the development so far. Immedia contributed to build one of the fastest growing area of the media industry. Out-of-home digital and in-store medias were unknown just four years ago and now we find ourselves at the sharp end of an exciting future.' For further information, please contact: Immedia Broadcasting PLC Hudson Sandler Bruno Brookes, Chief Executive Nick Lyon Robert Parker, Finance Director Sandrine Gallien Tel: 01635 572800 Tel: 020 7796 4133 Chairman's Statement Overview 'The results for the first six months were less satisfactory than expected. Advertising on the Impulse Live network has grown like for like compared to the same period last year however the growth falls short of our targeted level. This is mainly attributable to the delays in recruiting the additional outsourced sales team, which the company is addressing. The launch of the station for a major retail bank was a notable success and the pipeline of new customer enquiries remains good. As indicated in the trading statement in July, the length of time from initial enquiry through test phase to full rollout remains longer than we would like. Financial Review Revenue for the first six months was £1.543m, an increase of 36% on the comparative period in 2004. The loss on ordinary activities before taxation of £273,271 (2004: loss £250,563) includes a depreciation and amortisation charge of £338,506 (2004: £213,084). Our operating profit before depreciation, amortisation and interest was £51,397 (2004: loss £61,086). The gross profit margin was 55% (2004: 54%). At the end of the period the company had cash balances of £ 1.0m. The business is trading at an EBITDA positive position and has been cash generative. Outlook Immedia's unique in-store media solution of the live broadcasting of radio programming is created and profiled to match retailers' individual brand positioning. This continues to attract much interest and we are continuing to talk to a number of major retailers. However progress in the second half of the year looks challenging. This has led the board to begin to consider all strategic options to accelerate progress and maximise shareholder value. Geoff Howard-Spink Chairman 1 August 2005 Consolidated Profit and Loss Account Unaudited Unaudited Note Half Year Half Year Year Ended 30 June 05 30 June 04 31 Dec 04 £ £ £ Turnover 8 1,543,388 1,132,521 2,969,651 Cost of sales (692,120) (525,731) (1,342,677) Gross profit 851,268 606,790 1,626,974 Administrative expenses (1,138,377) (880,960) (2,032,957) Operating loss (287,109) (274,170) (405,983) Interest receivable and similar income 23,428 36,535 63,011 Interest payable and similar charges (9,590) (12,928) (24,476) Operating profit/(loss) before depreciation, 51,397 (61,086) 138,174 amortisation and interest Depreciation and amortisation (338,506) (213,084) (544,157) Net interest receivable/(payable) 13,838 23,607 38,535 Loss on ordinary activities before taxation (273,271) (250,563) (367,448) Tax on loss on ordinary activities 6 - - - Loss for the period (273,271) (250,563) (367,448) Loss per share - basic and diluted 7 (2.45)p (2.24)p (3.29)p The results for all periods relate to continuing operations Consolidated Balance Sheet Unaudited as Unaudited as As Note at 30 June 05 at 30 June 04 at 31 Dec 04 (restated) £ £ £ Fixed assets Intangible assets 9 54,952 109,900 73,267 Tangible assets 10 1,687,574 1,496,418 1,790,232 1,742,526 1,606,318 1,863,499 Current assets Stocks - 1,636 - Debtors 11 826,247 944,529 1,125,604 Cash at bank and in hand 1,008,261 1,731,331 1,000,215 1,834,508 2,677,496 2,125,819 Creditors: amounts falling due within one year 12 (921,390) (1,164,950) (1,053,565) Net current assets 913,118 1,512,546 1,072,254 Total assets less current liabilities 2,655,644 3,118,864 2,935,753 Creditors: amount falling due after more than one year (200,000) (250,000) (200,000) Provisions for liabilities and charges (10,000) (10,000) (10,000) Net assets 2,445,644 2,858,864 2,725,753 Capital and reserves Called up share capital 13 1,170,791 1,170,791 1,170,791 Share premium account 13 3,372,960 3,356,186 3,372,960 Merger reserve 13 2,245,333 2,245,333 2,245,333 Profit and loss account 13 (4,343,440) (3,913,446) (4,063,331) Equity shareholders' funds 2,445,644 2,858,864 2,725,753 Consolidated Cash Flow Statement Unaudited Unaudited Note Half Year to Half Year to Year Ended 30 June 05 30 June 04 31 Dec 04 £ £ £ Cash inflow/(outflow) from operating activities 1 389,795 (361,803) (789,491) Return on investments & servicing of finance Interest received 23,428 36,965 63,011 Interest paid (9,590) (12,928) (24,476) Net cash inflow from return on investments & servicing of finance 13,838 24,037 38,535 Taxation Corporation tax paid - - - Capital expenditure & financial investment Payments to acquire tangible fixed assets (217,533) (730,340) (1,170,938) Payments to acquire shares for EBT (6,838) - - Proceeds from sales of fixed assets 110 - 815 Net cash outflow on capital expenditure & financial investment (224,261) (730,340) (1,170,123) Net cash inflow/(outflow) before management of liquid resources and financing 179,372 (1,068,106) (1,921,079) Management of liquid resources Cash withdrawn from short term deposit - 1,700,000 2,200,000 Financing Repayment of other loans (50,000) (500,000) (500,000) Net cash outflow from financing (50,000) (500,000) (500,000) Increase/(decrease) in cash in the period 129,372 131,894 (221,079) Reconciliation of net cash flow to movement in net funds Unaudited Unaudited Note Half Year to Half Year to Year Ended 30 June 05 30 June 04 31 Dec 04 £ £ £ Increase/(decrease) in cash in the period 129,372 131,894 (221,079) Cash outflow from decrease in liquid resources - (1,700,000) (2,200,000) Cash outflow from decrease in debt 50,000 500,000 500,000 Movement in net funds/(debt) in the period 179,372 (1,068,106) (1,921,079) Net funds at the start of the period 626,858 2,547,937 2,547,937 Net funds at the end of the period 2 806,230 1,479,831 626,858 Notes to the Cash flow statement 1. Reconciliation of operating loss to net cash flow from operating activities Unaudited Unaudited Half Year to Half Year to Year Ended 30 June 05 30 June 04 31 Dec 04 £ £ £ Operating loss (287,109) (274,170) (405,983) Depreciation and amortisation of tangible and intangible assets 338,506 213,084 544,157 (Profit)/loss on disposal of fixed assets (110) - 8,923 Decrease/(increase) in stocks - (443) 1,115 Decrease/(increase) in debtors 299,357 (322,138) (528,135) Increase/(decrease) in creditors 39,151 21,864 (409,568) Net cash inflow/(outflow) from operating activities 389,795 (361,803) (789,491) 2. Analysis of changes in net funds 31 Dec 04 Cash Flow 30 June 05 £ £ £ Cash at bank and in hand 215 8,046 8,261 Overdrafts (123,357) 121,326 (2,031) (123,142) 129,372 6,230 Loans - short term position (50,000) 50,000 - Loans - long term position (200,000) - (200,000) Cash on deposit 1,000,000 - 1,000,000 Net funds 626,858 179,372 806,230 Notes to the Interim Results 3. Basis of preparation The accounts of the company for the six months ended 30 June 2005, which are unaudited, were approved by the board on 28 July 2005. 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. Employee Benefit Trust (EBT) Group accounts for the current year and the comparative figures include an EBT in accordance with UITF 38. The cost of shares in Immedia Broadcasting Plc purchased on behalf of the Trust has been debited to reserves (note 13). 6. Taxation During the period the Group made tax profits before capital allowances (losses to 30 June and 31 December 2004), which have been offset against tax losses brought forward. The tax losses carried forward of £3,285,000 (31 December 2004: £3,337,000) 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 £273,271 (30 June 2004: loss of £250,563; 31 December 2004: loss of £367,448) divided by the weighted average number of Ordinary shares in issue in each of the relevant periods; 30 June 2005: 11,145,308 shares (30 June and 31 December 2004: 11,156,910 shares). In accordance with FRS22 the diluted basic loss per share is stated as the same amount as basic as there is no dilutive effect from the current share options, warrants and convertible loan notes. 8. Turnover Turnover represents the amount receivable for good and services to third party customers (excluding value added tax) and sales commissions. 9. Intangible fixed assets Unaudited Unaudited as at as at As at 30 June 05 30 June 04 31 Dec 04 (restated) £ £ £ Goodwill Cost 109,900 109,900 109,900 Accumulated amortisation (54,948) - (36,633) Net Book Value 54,952 109,900 73,267 10. Tangible fixed assets Plant and Fixtures & Network Total machinery fittings Equipment £ £ £ £ Cost At 1 January 2005 566,133 184,109 2,031,053 2,781,295 Additions 27,620 24,643 165,270 217,533 Disposals - - - - At 30 June 2005 593,753 208,752 2,196,323 2,998,828 Depreciation At 1 January 2005 296,183 88,801 606,079 991,063 Charge for period 76,298 32,051 211,842 320,191 On disposals - - - - At 30 June 2005 372,481 120,852 817,921 1,311,254 Net book value Unaudited at 30 June 2005 221,272 87,900 1,378,402 1,687,574 At 31 December 2004 269,950 95,308 1,424,974 1,790,232 Unaudited at 30 June 2004 (restated) 266,632 106,485 1,123,301 1,496,418 11. Debtors - amounts falling due within one year Unaudited Unaudited as at as at As at 30 June 05 30 June 04 31 Dec 04 £ £ £ Trade debtors 507,579 719,092 837,809 Other debtors 61,205 87,511 35,845 Prepayments 257,463 137,926 251,950 826,247 944,529 1,125,604 12. Creditors - amounts falling due within one year Unaudited Unaudited as at as at As at 30 June 05 30 June 04 31 Dec 04 £ £ £ Bank Overdrafts 2,031 - 123,357 Other loans - - 50,000 Trade Creditors 399,038 610,621 389,670 Other Creditors including Taxation & Social Security 29,850 79,220 47,590 Accruals and deferred income 490,471 475,109 442,948 921,390 1,164,950 1,053,565 13. Reserves Reserves as at 30 June 2005 Merger Share Share Profit reserve capital premium & loss account £ £ £ £ Beginning of Period 2,245,333 1,170,791 3,372,960 (4,063,331) Retained loss for the period - - - (273,271) Purchase of own shares for Immedia Employee Benefit Trust - - - (6,838) End of Period 2,245,333 1,170,791 3,372,960 (4,343,440) Reserves as at 31 December 2004 Merger reserve Share capital Share premium Profit £ £ £ & loss account £ Beginning of Period 2,245,333 1,170,791 3,372,960 (3,695,883) Retained loss for the period - - - (367,448) End of Period 2,245,333 1,170,791 3,372,960 (4,063,331) This information is provided by RNS The company news service from the London Stock Exchange

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