Interim Results

M&C Saatchi PLC 25 September 2007 M&C SAATCHI PLC INTERIM RESULTS SIX MONTHS TO 30 JUNE 2007 25 September 2007 M&C Saatchi plc, the international marketing communications group, today announces its results for the six months ended 30 June 2007. Headline financial results â€¢ Revenue (gross profit) up 8% to Â£37.3m (2006: Â£34.7m) â€¢ Operating profit up 61% to Â£2.8m (2006: Â£1.8m) â€¢ Profit before Tax up 59% to Â£3.9m (2006: Â£2.4m) â€¢ Profit after tax and minority interest up 122% to Â£1.9m (2006: Â£0.9m) â€¢ Earnings per share up 124% to 3.50p (2006: 1.56p) â€¢ Interim dividend increased by 13% to 0.87p. (2006: 0.77p) Reported results â€¢ Revenue (gross profit) up 8% to Â£37.3m (2006: Â£34.7m) â€¢ Operating profit up 61% to Â£2.8m (2006: Â£1.8m) â€¢ Profit before Tax up 64% to Â£3.3m (2006: Â£2.0m) â€¢ Profit after tax and minority interest up 194% to Â£1.4m (2006: Â£0.5m) â€¢ Earnings per share up 198% to 2.53p (2006: 0.85p) The headline results exclude the impact of the fair value adjustment to the minority shareholder put options liabilities of Â£0.5m (2006: Â£0.4m) and the amortisation of intangible assets of Â£17k (2006: Â£Nil). A further reconciliation is included in note 4 to the financial statements. Commenting on the results, David Kershaw the Chief Executive said: 'The results for the period show significant progress for the Group. Trading has been strong. The UK businesses continue to show good growth. The Asia and Australia region had a tougher half but we are pleased that both the US and European businesses are moving into profit. Strategically we have been active with the acquisitions of Clear with offices in London, Amsterdam and New York, and Zapping in Madrid. We have increased our interest in Walker Media. These acquisitions have extended our international reach and moved us further into higher margin disciplines. The outlook for the rest of the year remains in line with expectations.' For further information please call: M&C Saatchi plc 020 7543 4500 David Kershaw, Chief Executive Tulchan Communications 020 7353 4200 Celia Gordon Shute NUMIS 020 7260 1000 Lee Aston Summary of results ------------------ These results show a strong performance for the first six months with revenue growth of 7.7%, operating profit growth of 60.7% and headline earnings per share growth of 124.4% (the headline earnings exclude the fair value adjustment to minority shareholder put options liabilities and the write off of intangible assets). This encouraging year-on-year performance reflects the continued strength of our UK business, the improvement in the results coming from the USA following its reorganisation and the end of the investment phase in Europe. The Asia and Australia region had a challenging first six months following account losses in 2006. Key to the significant improvement in the headline earnings is the elimination of the losses previously incurred in the USA and the end of the investment in start-up and development costs in Europe. The business in the USA has now been reorganised with our presence in New York reduced to only that required to service key clients eliminating the significant losses incurred in 2006. In the first six months of 2007 the USA contributed Â£0.06m to Group PBT (2006: Â£(0.24)m ). The last part of our planned expansion into continental Europe was completed when we acquired an initial 25% of Spanish Agency Zapping Publicidad (Zapping) in March (the results are included within the associate line). We now have a presence in Paris, Berlin and Madrid and all three are performing well. Financial review ---------------- Revenue grew by 9.1% on a constant currency basis (reported 7.7%) with strong growth from the UK, America and Europe. Revenue from the Asia and Australia region declined by 5.8% (constant currencies). Operating profit increased by 60.7%. The significant increase is due to the continued growth in the UK but more importantly due to the reversal of losses in both America and Europe, as they both exit investment phases. The cumulative turnaround represents a contribution to Group operating profit of Â£1.3m. The operating margin increased to 7.6% (2006: 5.1%). The share of associates now includes the Group's share of results from Play London Ltd in the UK and from March, Zapping in Spain. Net interest increased by 44.6% to Â£1.0m (2006: Â£0.7m). The Group headline tax rate improved to 31.7% (2006: 47.2%) due to the elimination of the significant non deductible losses incurred in 2006. The profit attributable to minorities increased by 75.8% to Â£0.8m (2006: Â£0.4m). This increase was mainly driven by the very strong performance of Walker Media. (On the 3rd July 2007 the Group acquired an additional significant proportion of the remaining minority (19.5% out of 25%). The headline profit after tax (attributable to equity holders) increased by 121.8% and the headline EPS by 124.4% to 3.50p (2006: 1.56p). A reduction in the average number of shares in 2007 (due to a share buy back in October 2006) is the reason for the EPS growth exceeding the headline PAT growth. The closing cash balance at the end of June was Â£25.8m a reduction of Â£5.5m over the period from 31 December 2006. Cash inflow from normal activities was Â£1.7m. The significant cash outflows were dividend payments Â£2.5m, the investment in Zapping Â£1.5m, and a reduction in the contribution from working capital of Â£3.2m. On the 3rd July 2007 we acquired an additional 19.5% of the share capital of Walker Media for Â£8.8m in cash and 1.9m new shares. On the 5th July 2007 we acquired all the issued share capital in Clear Ideas Ltd (Clear) for an initial consideration of Â£13.6m in cash and 3.4m new shares. These acquisitions have been funded in part from internal funds and from a Â£13m credit facility provided by RBS. Operating review ---------------- Strategy At the time of the float in July 2004 we made clear our ambitions to grow M&C Saatchi into a global network. Subsequently we have declared our intention to extend into higher margin and higher growth disciplines. This year is an important one in realising both these goals. We have a strong network of businesses across the world. This year, our businesses in Continental Europe are forecast to exit the investment phase and will make a profit contribution to the Group. Our business in the US has stabilised with the focus of operations now based in LA. Trading in Asia and Australia has been tougher, but will be a key management focus in the second half. We now have a very compelling global client offering which is bolstering our new business position. Our strategy to move the business into attractive growth markets and higher margin categories has progressed well in the first half. We have purchased an additional 19.5% of Walker Media which takes our ownership to 94.5% and further strengthens our position in this profitable marketplace. Additionally, we announced the acquisition of Clear, which takes us into the attractive brand consultancy market in the UK, US and Europe, an acquisition which will be earnings enhancing in the first year of ownership. UK Revenue in the UK grew by 8.6%, driven by an excellent performance from Walker Media and good new business wins elsewhere in the UK. Reported operating margins declined by 0.8pts to 14.0% (2006: 14.8%), as a result of a reduction in the recharge of central costs to other parts of the Group and an increase in the cost of the LTIP scheme. Key new accounts in UK advertising are Jamesons, which extends our relationship with Pernod Ricard, Porsche, Abercrombie & Kent, Vodafone, CRM and additional assignments from Heinz. Walker Media continues to go from strength to strength under Phil Georgiadis' chairmanship winning new business from Ladbrokes and Eurostar-St Pancras. Additionally revenue growth has been driven by winning digital work from current clients. Walker-i now accounts for 20% the Walker Media business. The integration of Clear, the brand consultancy business we acquired in July 2007, is progressing very well. Clear is playing a crucial role in moving our business into attractive higher margin business streams. Europe The turnaround in the financial contribution from the European business is significant. Revenue has increased to Â£2.1m (2006: Â£0.5m) and contribution to the Group's PBT has increased by Â£1.1m to Â£0.1m (2006: Â£(1.0)m ). As reported, we acquired an initial 25% stake in Zapping (based in Madrid) in March. We will acquire a further 26% in 2008 and 25% in 2009. The acquisition of Zapping means that the Group now has a presence in the major markets in Continental Europe. Also at an end is the significant investment in start up and development costs incurred in 2005 and 2006. Our French office (M&C Saatchi GAD) continued its excellent progress with very significant new business wins from Pages Jaunes and Jamesons. They have also opened a corporate PR business (Me&US) with foundation clients Veolia, EADS, Ecole Polytechnique. In July 2006 we acquired the majority of a small German agency based in Berlin, therefore the 2007 interim results include a contribution for the first time. They have had a positive first six months with important wins from the Green Party of Germany and Coca Cola. Asia and Australia The first six months of 2006 has been difficult principally as a result of the loss of IAG last year. Revenue declined by 5.8% using constant currencies (7.9% at reported rates). The operating loss increased to Â£(0.4)m (2006: Â£(0.1)m). We have started taking actions to refocus and reorganise the business, and early signs such as an account win from Abu Dhabi tourism and from Westfield, are encouraging. After encouraging starts both Singapore and Thailand encountered tough trading. Conversely Malaysia and New Zealand performed well in the first half, and the outlook for these businesses is positive. America The reorganisation of the US operation is now complete, with the business run out of LA. We incurred reorganisation costs of Â£(0.3)m in the first quarter but the business delivered a positive contribution to operating profit of Â£0.1m (2006: Â£(0.2)m ). Revenue increased by 35.6% using constant currencies (23.2% at reported rates). The office in LA continues to perform well with revenues up by 40% following a good new business performance in the second half of 2006. Further activity in New York will be managed on a break even-basis. Outlook It is encouraging that both our European and North American businesses have moved into profit in the first half of the year. Additionally, the prospects for our UK businesses are good, particularly in the higher margin businesses of Clear and Walker Media. Whilst Asia and Australia has had setbacks, we are currently undertaking an intensive review to re-energise the business. The outlook for the rest of the year remains in line with current expectations and we are confident of further significant progress in 2008. This report comments on the unaudited consolidated income statement of M&C Saatchi plc (the 'Group') for the six months to 30 June 2007 compared with the restated unaudited consolidated income statement for the same period in 2006. The report also comments on the numbers before the impact of fair value adjustments to minority shareholder put option liabilities and amortisation of intangible assets (headline numbers). The income statements for the six month period to 30 June 2006 and twelve months to 31 December 2006 are the restated results under IFRS. Explanations of the material restatements have been published prior to these results and can be found at www.mcsaatchiplc.com. M&C SAATCHI PLC UNAUDITED CONSOLIDATED INCOME STATEMENT AT 30 JUNE 2007 Six months Six months Year ended ended ended 31 December 30 June 2007 30 June 2006 2006 as restated as restated Note Â£'000 Â£'000 Â£'000 Turnover (billings) 4 182,791 150,256 369,490 -------- -------- -------- Revenue 4 37,309 34,655 75,877 -------- -------- -------- Operating costs - ordinary (34,108) (32,711) (69,217) - share based payments (379) (188) (422) -------- -------- -------- Total operating costs (34,487) (32,899) (69,639) -------- -------- -------- Operating profit 4 2,822 1,756 6,238 -------- -------- -------- Share of results of associates 5 54 2 5 Finance income 964 676 1,540 Finance costs 6 (508) (398) (9,003) -------- -------- -------- Profit / (loss) before taxation 4 3,332 2,036 (1,220) -------- -------- -------- Taxation on profits 7 (1,215) (1,142) (2,852) -------- -------- -------- Profit / (loss) for the financial period 2,117 894 (4,072) -------- -------- -------- Attributable to: Equity holders of the Group 12 1,356 461 (5,220) Minority interests 761 433 1,148 -------- -------- -------- 2,117 894 (4,072) -------- -------- -------- Earnings / (loss) per share 9 Basic 2.53p 0.85p (9.73)p Diluted 2.50p 0.84p (9.73)p Headline results Operating profit 4 2,822 1,756 6,258 Profit before tax 4 3,850 2,420 7,770 Headline earnings per share 9 Basic 3.50p 1.56p 7.02p Diluted 3.45p 1.55p 6.93p M&C SAATCHI PLC UNAUDITED CONSOLIDATED BALANCE SHEET AT 30 JUNE 2007 Notes 30 June 2007 30 June 2006 31 December as restated 2006 as restated Â£'000 Â£'000 Â£'000 Non current assets Intangible assets 13 15,486 14,715 15,357 Plant and equipment 3,541 3,275 3,531 Investments in associates 1,646 - - Deferred tax assets 628 408 722 Other non current assets 518 368 460 -------- -------- -------- 21,819 18,766 20,070 -------- -------- -------- Current assets Work in progress 2,737 1,759 2,416 Trade and other receivables 38,232 40,555 45,904 Current tax assets 421 98 88 Cash and cash equivalents 25,820 23,742 31,284 -------- -------- -------- 67,210 66,154 79,692 -------- -------- -------- Current liabilities Trade and other payables (52,577) (50,815) (63,430) Current tax liabilities (537) (815) (1,036) Provisions for put options (16,828) (6,821) (11,077) -------- -------- -------- (69,942) (58,451) (75,543) -------- -------- -------- Net current (liabilities) / assets (2,732) 7,703 4,149 Total assets less current liabilities 19,087 26,469 24,219 Non current liabilities Other non current liabilities (488) (587) (670) Deferred tax liabilities (150) (182) (141) Employment benefit provisions (506) (274) (221) Provisions for put options (8,196) (6,782) (11,211) -------- -------- -------- (9,340) (7,825) (12,243) -------- -------- -------- Net assets 4 9,747 18,644 11,976 -------- -------- -------- Capital & reserves Capital 11 24,301 24,916 24,124 Other reserves 11 (14,853) (12,765) (12,844) Retained (loss) / earnings 12 (410) 5,553 (466) -------- -------- -------- Total shareholders' equity 9,038 17,704 10,814 -------- -------- -------- Minority interest in equity 709 940 1,162 -------- -------- -------- Total equity 9,747 18,644 11,976 -------- -------- -------- M&C SAATCHI PLC UNAUDITED CONSOLIDATED CASH FLOW STATEMENT SIX MONTHS ENDED 30 JUNE 2007 Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December as restated 2006 as restated Notes Â£'000 Â£'000 Â£'000 Cash generated from operations 15 589 6,220 18,716 Tax paid (2,245) (1,123) (3,408) -------- -------- -------- Net cash flow from operating activities (1,656) 5,097 15,308 -------- -------- -------- Interest earned from cash held by trading entities 707 446 1,085 Acquisitions and disposals 16 (1,542) - (635) Proceeds from sale of plant and equipment 20 - 16 Purchase of plant and equipment (738) (771) (1,707) Purchase of capitalised software - (9) - -------- -------- -------- Net cash from investing activities (1,553) (334) (1,241) -------- -------- -------- Dividends paid (1,300) (965) (1,377) Minority dividend paid (1,209) (468) (1,004) Purchase of own shares - - (792) Issue of own shares 3 - - Repayment of finance leases (22) (55) (108) Repayment of bank loans (6) - - Interest received on centrally held cash 257 230 455 Interest paid (5) (9) (20) Interest on finance leases (3) (5) (13) -------- -------- -------- Net cash from financing activities (2,285) (1,272) (2,859) -------- -------- -------- Net (decrease) / increase in cash and cash equivalents (5,494) 3,491 11,208 Cash and cash equivalents at the beginning of the period 31,284 20,457 20,457 Effect of exchange rate changes 30 (206) (381) -------- -------- -------- Cash and cash equivalents at the end of the period 25,820 23,742 31,284 -------- -------- -------- M&C Saatchi plc Notes to the interim statements Six months ended 30 June 2007 1. Basis of preparation The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 36 Golden Square, London W1F 9EE. The Company has its primary listing on the AiM market of the London Stock Exchange. This condensed consolidated half-yearly financial information was approved for issue on 24 September 2007. The financial information included in this report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985, and is unaudited. The comparative figures for the year ended 31 December 2006 do not constitute the Group's statutory accounts for that financial year. Those accounts, which were prepared under UK GAAP, have been reported on by the Company's auditors and delivered to the Registrar of Companies. The auditor's report on those statutory accounts was unqualified, did not include references to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and did not contain a statement under section 237(2) or (3) of the Companies Act 1985. 2. Basis of preparation This condensed consolidated half-yearly financial information for the half-year ended 30 June 2007 has been prepared in accordance with the AiM Rules for companies. The half-yearly condensed consolidated financial report should be read in conjunction with the annual financial statements for the year ended 31 December 2006 and statement on the impact of IFRS on the financial statements issued on 21 September 2007. The unaudited financial information presented in this document has been prepared on the basis of the expected accounting policies which the Group will comply with in the accounts to 31 December 2007 and on the basis of all International Financial Reporting Standards ('IFRS'), including International Accounting Standards ('IAS') and interpretations issued by the International Accounting Standards Board ('IASB') and its committees, as adopted by the EU. These are subject to ongoing amendment by the IASB and subsequent endorsement by the European Commission and are therefore subject to possible change. As a result, information contained within this release will require updating for any subsequent amendment to IFRS required for first time adoption or those new standards that the Group may elect to adopt early. 3. Accounting policies The accounting policies adopted are consistent with those set out in the statement on the impact of IFRS on financial statements issued on 21 September 2007. 4. Segment information Segmental analysis is provided by reference to the geographical origin of business The directors believe that the underlying performance of the reported geographical segments is more clearly understood by reporting their performance before amortisation and put option charges. A reconciliation to IFRS GAAP reported operating profit and profit before tax is provided in each case. Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Â£'000 Â£'000 Â£'000 Turnover (billings) UK 151,580 118,339 306,291 Asia and Australia 21,929 27,202 51,995 America 4,761 3,341 6,802 Europe 4,521 1,374 4,402 -------- -------- -------- 182,791 150,256 369,490 -------- -------- -------- Revenue UK 22,014 20,279 44,336 Asia and Australia 11,306 12,281 25,638 America 1,917 1,555 3,632 Europe 2,072 540 2,271 -------- -------- -------- 37,309 34,655 75,877 -------- -------- -------- Headline operating profit / (loss) UK 3,077 3,007 6,307 Asia and Australia (360) (57) 1,496 America 58 (239) (261) Europe 47 (955) (1,284) -------- -------- -------- 2,822 1,756 6,258 -------- -------- -------- Reconciliation to IFRS GAAP reported operating profit and loss Amortisation of intangible assets Europe - - (20) -------- -------- -------- Reported operating profit 2,822 1,756 6,238 -------- -------- -------- 4. Segment information (continued) Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Â£'000 Â£'000 Â£'000 Headline profit / (loss) before tax UK 3,972 3,620 7,767 Asia and Australia (348) (3) 1,558 America 61 (235) (254) Europe 165 (962) (1,301) -------- -------- -------- 3,850 2,420 7,770 -------- -------- -------- Reconciliation to IFRS GAAP reported profit before tax Fair value adjustments to minority shareholder put option liabilities UK (501) (384) (8,970) Amortisation of intangible assets Europe (17) - (20) -------- -------- -------- Reported profit before tax 3,332 2,036 (1,220) -------- -------- -------- Net assets / (liabilities) UK 12,218 21,391 14,097 Asia and Australia 2,698 2,616 3,095 America (3,177) (3,377) (3,032) Europe (1,992) (1,986) (2,184) -------- -------- -------- 9,747 18,644 11,976 -------- -------- -------- 5. Share of results of associates Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Â£'000 Â£'000 Â£'000 Share of result from associates Share of profit before taxation 132 2 7 Amortisation recognised on acquisition of associate (17) - - Share of taxation (61) - (2) -------- -------- -------- Total 54 2 5 -------- -------- -------- 6. Finance costs Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Â£'000 Â£'000 Â£'000 Finance costs Bank interest chargeable (7) (14) (33) Fair value adjustments to minority shareholder put option liabilities (501) (384) (8,970) -------- -------- -------- Total (508) (398) (9,003) -------- -------- -------- 7. Taxation The effective annual tax rate for the period to 30 June 2007 is 36.5% (30 June 2006 56.1%). The headline average annual tax rate used for the period to 30 June 2007 is 31.7% (the estimated headline tax rate for the first-half to 30 June 2006 was 47.2%). This decrease is mainly due to a reduction in entities reporting tax losses with no associated tax credit. The difference between the headline and statutory tax rates is caused by a difference in the profit before tax as neither the impact of fair value adjustments to minority shareholder put option liabilities or amortisation of intangible assets has any effect on the tax charge. 8. Dividends A dividend of Â£1,300k was paid in June 2007. The dividend relates to the period to 31 December 2006. In addition, the directors propose an interim dividend of 0.87 pence per share (2006: 0.77 pence per share) payable on 24 October 2007 to shareholders who are on the register at 5 October 2007. This interim dividend, amounting to Â£513k (2006: Â£412k) has not been recognised as a liability in this half-yearly financial report. 9. Earnings per share Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Reported earnings / (loss) per share Basic 2.53p 0.85p (9.73)p Diluted 2.50p 0.84p (9.73)p Diluted Profit / (loss) for the period, attributable to equity shareholders 1,356 461 (5,220) Weighted average number of shares 54,244,749 54,644,954 54,347,216 --------- ---------- --------- Earnings / (loss) per share 2.50p 0.84p (9.73)p* --------- ---------- --------- Basic Profit / (loss) for the period, attributable to equity shareholders 1,356 461 (5,220) Weighted average number of shares 53,576,549 54,206,799 53,677,484 -------- --------- -------- Earnings / (loss) per share 2.53p 0.85p (9.73)p -------- --------- -------- Headline earnings per share Basic 3.50p 1.56p 7.02p Diluted 3.45p 1.55p 6.93p Diluted Headline retained earnings 1,874 845 3,770 Weighted average number of shares 54,244,749 54,644,954 54,347,216 --------- ---------- --------- Earnings per share 3.45p 1.55p 6.93p --------- ---------- --------- Basic Profit / (loss) for the period, attributable to equity shareholders 1,356 461 (5,220) Fair value adjustments to minority shareholder put option liabilities 501 384 8,970 Amortisation of intangibles 17 - 20 --------- ---------- --------- Headline profit, for the period attributable to equity shareholders 1,874 845 3,770 --------- ---------- --------- Weighted average number of shares 53,576,549 54,206,799 53,677,484 --------- ---------- --------- Earnings per share 3.50p 1.56p 7.02p --------- ---------- --------- * Diluted loss per share is reported equal to the basic loss per share. Diluted loss per share is not reported as it is arithmetically greater than the basic loss per share figure. 10. Cash and cash equivalents Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Â£'000 Â£'000 Â£'000 Cash and cash equivalents Cash held in hand and at bank 25,820 23,742 31,312 Overdraft - - (28) --------- ---------- --------- 25,820 23,742 31,284 --------- ---------- --------- 11. Capital and other reserves Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Â£'000 Â£'000 Â£'000 Capital Ordinary share capital 543 542 542 Share premium 9,794 9,618 9,618 Merger reserve 14,756 14,756 14,756 Treasury reserve (792) - (792) --------- ---------- --------- Total 24,301 24,916 24,124 --------- ---------- --------- Other reserves Share option reserve 1,002 718 845 Put option reserve (15,595) (13,219) (13,318) Foreign exchange reserve (260) (264) (371) --------- ---------- --------- Total (14,853) (12,765) (12,844) --------- ---------- --------- 12. Consolidated statement of changes in equity Note Capital Other reserves Retained earnings Total Â£000s Â£000s Â£000s Â£000s --------- --------- ------- -------- Balance at 31 December 2006 24,124 (12,844) (466) 10,814 --------- --------- ------- -------- Currency translation differences - 111 - 111 Profit for the period - - 1,356 1,356 --------- --------- ------- -------- Total recognised income and expenses - 111 1,356 1,467 --------- --------- ------- -------- Issue of shares 177 - - 177 Non cash share based incentive plans - 190 - 190 New put options issued - (2,310) - (2,310) Dividends - - (1,300) (1,300) --------- --------- ------- -------- Balance at 30 June 2007 24,301 (14,853) (410) 9,038 --------- --------- ------- -------- 13. Intangibles Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Â£'000 Â£'000 Â£'000 Goodwill 15,394 14,627 15,270 Other intangibles 92 88 87 -------- --------- -------- Intanibles 15,486 14,715 15,357 -------- --------- -------- Other intangibles consist entirely of capitalised software costs. 14. Acquistion of associate On the 8 March 2007 the Group acquired 25% of Zapping Publicidad, S.A and its group of companies, a Spanish marketing services group, with a commitment to acquire a further 50% over the next three years. Purchase consideration Â£000 Cash paid 1,349 Direct costs relating to the acquisition 193 -------- Total purchase consideration 1,542 -------- Intangible assets acquired 88 Net assets acquired 35 -------- Goodwill 1,419 -------- The goodwill is attributable to the company's award winning creative talent. 15. Cash generated from operations Six months Six months Year ended ended ended 30 June 2007 30 June 2006 31 December 2006 Notes Â£'000 Â£'000 Â£'000 Revenue 37,309 34,655 75,877 Operating expenses (34,487) (32,899) (69,639) -------- -------- -------- Operating Profit 2,822 1,756 6,238 Adjustments for: Depreciation of plant and equipment 759 578 1,212 Losses on sale of plant and equipment 9 1 5 Amortisation of intangible assets - - 20 Non-cash share based incentive plans 190 119 213 -------- -------- -------- Operating cash flow before movements in working capital and provisions 3,780 2,454 7,688 -------- -------- -------- (Increase)/decrease in work in progress (309) 1,403 712 Decrease in trade and other receivables 7,864 9,255 3,434 (Decrease) / increase in trade and other payables (10,850) (7,044) 6,416 Increase in provisions 104 152 466 -------- -------- -------- Net cash inflow from operating activities 589 6,220 18,716 -------- -------- -------- 16. Cash consumed by acquisitions Acquisitions Â£'000 Â£'000 Â£'000 Initial cash consideration - - (749) Cash and cash equivalents acquired - - 114 Purchase of associate (Zapping, Spain) (1,542) - - -------- -------- -------- Total (1,542) - (635) -------- -------- -------- 17. Capital Commitments The only significant capital commitment is our agreement to acquire a further 50% of Zapping Publicidad, S.A and its group over the next three years. 18. Events occurring post balance sheet date On the 3 July 2007 we acquired an additional 19.5% of the issued ordinary shares of Walker Media Holdings Limited (Walker Media) for an initial consideration of Â£11.8 million. The consideration will be adjusted following the determination of the consolidated profit for Walker Media for the financial year ending 31 December 2007. After the acquisition M&C Saatchi will hold 94.5% of the total issued share capital of Walker Media. On the 5 July 2007 we acquired 100% of the total issued share capital of Clear Ideas Limited (Clear) for an initial consideration of Â£18.4 million. There is an earn out based on Clear's results to 31 March 2011. This information is provided by RNS The company news service from the London Stock Exchange

Companies

M&C Saatchi (SAA)

Friday, 10th May 2024

COMPANIES COVERED:

RMV MTC SFOR

Rightmove slumps as high mortgage costs continue to drag on sentiment, Mothercare falls amidst slowing sales but S4 Capital jumps higher despite market woes as promises of a better second half lend support.

Full Archive

UK 100

Latest directors dealings

15 hours ago Mattioli Woods
16 hours ago Morgan Advanced Materials
16 hours ago Capita
16 hours ago Judges Scientific
16 hours ago Me Group International

All directors dealings today