Interim Results

OneMonday Group PLC 23 April 2001 23rd April 2001 'Performance impacted by difficult trading conditions towards end of half' * Turnover up 54% to £23 million * Pre-tax profit up 21% to £1.148 million. * Difficult trading conditions especially in the US commenced towards end of first half and continue * Client wins including BEA, British Gas, Coca-Cola Asia Pacific, Intel, Mitsubishi and Woolworths * Group reducing cost base while maintaining Group's business model to continue to achieve long term international organic growth * Board expects only moderate growth at the PBT level with satisfactory revenue growth for the full year. Tom Lewis, Chairman of OneMonday Group plc, the international technology pr company, said: 'The outlook for the remainder of the current financial year is less certain than it was in the first half. Although our share of the North American technology market is small, we depend on the resilience or otherwise of the US economy, and its impact on the worldwide technology industry. There is some sign of client companies gradually increasing spending again but this is unlikely to come in time to have much effect on the Group's full year figures. We remain very confident of the Group's business model and the long-term profit growth that we can generate from its operations.' For further information, contact: Tom Lewis, Chairman, OneMonday Group plc 020 8996 4100 David Dewhurst, Finance Director 020 8996 4100 Nick Denton, Hogarth Partnership 020 7357 9477 Letter from the Chairman Dear Shareholder, I'm pleased to report that in the six months to 31 January 2001, OneMonday Group turnover reached £23m, an increase of 54% over the comparable period last year, while profit before tax (before flotation costs) grew by 21% to £ 1.15m. Adjusted basic earnings per share were up 34% to 1.65p, and the Board has approved a maintained interim dividend per share of 0.3p. As these figures demonstrate, the top-line growth has remained strong at 54%, and this is once again entirely organic. It comprises new business wins and new operations opened from scratch in New York, Palo Alto and Atlanta for Text 100, Hong Kong and Auckland for AUGUST.ONE and New York for Joe Public Relations, which has also set up a sister agency in London called Joe Public Future. After an initially strong start to the new financial year, the latter half of the six months to 31 January 2001 nonetheless saw more difficult trading conditions. While new operations in Atlanta and Palo Alto have quickly reached profitability, the recently established and much larger New York operation has returned greater losses than anticipated, and two of last year's new operations, FWP and Brand X, continued to make disappointing losses into their second year of operation. As the segmental analysis demonstrates our European operations have held up well under the circumstances, with good performances from the Text 100, Bite Communications and EVUS brands. However, the Group has suffered a significant downturn in profitability in the North American market due to the sharp change in economic climate. The Board is confident of the underlying strength of the Group's activities. A large amount of new business added in the first six months has offset clients lost. For example, since the beginning of the year, AUGUST.ONE and Joe Public Relations have added such brands as British Gas, Coca-Cola Asia Pacific, Mitsubishi and Woolworths whereas Bite and Text 100 have added BEA, Cisco, Intel and SGI (formerly Silicon Graphics) to their rosters. These wins have compensated for a number of client losses resulting from a tightening of the venture capital market, including eCharge, Sageport and eCast. Overall this change leaves the Group better able to deal with any further deterioration in trading conditions. During this period, the Group has taken steps to reduce its cost base and bring it more in line with trading conditions. These steps include reductions in headcount within some of the operating businesses, a tightening of spending on operational items and the closure of Brand X, a small online marketing business still at the loss-making stage. At the time of the Company's AGM in January, the Board felt that it would still be possible for the Company to achieve City expectations for the full year 'in the absence of unforeseen circumstances'. The months since then have, however, seen a further weakening of economic sentiment in the USA and an accelerated flow of profit warnings from technology companies. The outlook for the remainder of the current financial year is less certain than it was in the first half. Although our share of the North American technology market is small, companies such as OneMonday Group depend on the resilience or otherwise of the US economy and its impact on the worldwide technology industry. On balance, the Board expects the full-year figures to show only moderate growth over the level of our profit before tax (before flotation costs) albeit with satisfactory organic revenue growth. The Group is seeing some signs of client companies gradually increasing spending again after the very sudden hiatus in expenditure at the end of last calendar year, but this is unlikely to come in time to have much effect on the Group's full-year figures to 31 July 2001. That said, the Board remains very confident of the Group's business model and the long-term profit growth that can be generated from its operations. Tom Lewis Chairman of the Board ONEMONDAY GROUP PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED JANUARY 31 2001 Six Months Six Months Year ended ended ended 31 July 2000 31 January 31 January 2001 2000 (AUDITED) (UNAUDITED) (UNAUDITED) £'000 £'000 £'000 Turnover (Note 2) 23,098 15,015 36,440 Other external charges (2,783) (2,520) (6,404) Turnover less other external charges 20,315 12,495 30,036 Staff costs 12,739 7,945 17,978 Depreciation 735 435 1,031 Other operating charges: Exceptional flotation costs (Note - 434 434 3) Other operating charges 5,603 3,160 8,137 Total other operating charges 5,603 3,594 8,571 (19,077) (11,974) (27,580) Operating Profit 1,238 521 2,456 Interest receivable and similar income 26 6 22 Interest payable and similar charges (116) (10) (212) Profit on Ordinary Activities before Taxation (Note 2) 1,148 517 2,266 Tax on profit on ordinary activities (458) (421) (1,078) (Note 4) Profit on Ordinary Activities after 690 96 1,188 Taxation Minority Interests (34) (44) (69) Profit Attributable to Members of the 656 52 1,119 Holding Company Equity dividends paid and proposed (119) (119) (397) (Note 5) Retained Profit/(Loss) for the Period 537 (67) 722 Basic Earnings per Share (Note 6) 1.65p 0.13p 2.87p Diluted Earnings per Share (Note 6) 1.51p 0.12p 2.67p Adjusted Earnings per Share (Note 6) 1.65p 1.23p 3.94p The profit and loss account for the six months ending 31 January 2001 and 31 January 2000 and the year ended 31 July 2000 relate to the continuing activities of the Group. Prior period earnings per share figures have been restated (see note 6). ONEMONDAY GROUP PLC CONSOLIDATED BALANCE SHEET AS AT 31 JANUARY 2001 31 January 31 July 31 January 2001 2000 2000 (UNAUDITED) (AUDITED) (UNAUDITED) £'000 £'000 £'000 FIXED ASSETS Tangible assets 3,919 3,262 2,314 Investments (Note 7) 1,523 1,523 1,509 5,442 4,785 3,823 CURRENT ASSETS Debtors 8,944 9,014 8,227 Cash at bank and in hand 1,574 1,802 646 10,518 10,816 8,873 CREDITORS - Amounts falling due (7,411) (8,331) (5,814) within one year NET CURRENT ASSETS 3,107 2,485 3,059 TOTAL ASSETS LESS 8,549 7,270 6,882 CURRENT LIABILITIES CREDITORS - Amounts falling due after (1,299) (606) (953) more than one year NET ASSETS (Note 2) 7,250 6,664 5,929 EQUITY CAPITAL AND RESERVES Called up share capital 1,121 1,121 1,121 Share premium account 2,711 2,711 2,711 Profit and loss account 3,306 2,750 1,985 TOTAL EQUITY SHAREHOLDERS' FUNDS 7,138 6,582 5,817 MINORITY INTERESTS 112 82 112 7,250 6,664 5,929 ONEMONDAY GROUP PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 JANUARY 2001 Six Months Six Months Year ended ended ended 31 July 2000 31 January 31 January (AUDITED) 2001 2000 (UNAUDITED) (UNAUDITED) £'000 £'000 £'000 Net Cash Inflow/(Outflow) from Operating Activities (Note 8 (1)) 1,746 (405) 2,522 Returns on Investments and Servicing of Financing Interest received 26 6 22 Interest paid (116) (10) (212) Minority interest dividends paid (12) - (18) Net Cash Outflow from Returns on Investments and Servicing of Finance (102) (4) (208) Net Cash Outflow from Taxation Corporation tax paid (664) (531) (1,093) Capital Expenditure and Investing Activities Long term deposits (69) (28) (73) Payments to acquire own shares - - (75) Payments to acquire tangible fixed assets (1,425) (1,007) (2,757) Proceeds from sale of own shares - - 11 Receipts from sales of tangible fixed assets 54 137 233 Net Cash Outflow from Capital Expenditure (1,440) (898) (2,661) and Investing Activities Acquisitions and disposals Purchase of minority interest (48) - - Equity Dividends Paid - (133) (185) Net cash outflow before Financing (508) (1,971) (1,625) Financing Long term bank loan 1,117 700 631 Issue of share capital - 1,599 1,700 Share capital issue costs - - (101) Net capital outflow on hire purchase (27) (22) (121) contracts Net Cash Inflow from Financing 1,090 2,277 2,109 Increase in Cash 582 306 484 for the Period (Note 8 (2)) 1) FINANCIAL INFORMATION The financial information is for the six months ended 31 January 2001 and is neither audited nor reviewed as defined by APB Bulletin 1993/1 and 1998/6. The balance sheet and profit and loss account do not constitute statutory statements within the meaning of Section 240 of the Companies Act 1985 (as amended). The results for the year ended 31 July 2000 have been extracted from the financial statements of the Group on which an unqualified report from the auditors has been received and which have been filed with the Registrar of Companies. 2) SEGMENTAL INFORMATION Analysis of turnover, profit before taxation and net assets by geographic origin and destination. Europe, Middle North Asia Total East & Africa America Pacific £'000 £'000 £'000 £'000 Six Months ended January 31, 2001 Turnover 14,860 6,082 2,156 23,098 Profit before 1,459 (272) (39) 1,148 taxation Net Assets 6,532 739 (21) 7,250 Year ended July 31, 2000 Turnover 25,832 7,790 2,818 36,440 Profit before 1,307 * 984 (25) 2,266 taxation Net Assets 5,882 907 (125) 6,664 Six Months ended January 31, 2000 Turnover 11,216 2,901 898 15,015 Profit before 85 * 471 (39) 517 taxation Net Assets 5,456 802 (329) 5,929 * Note: Profit for the six months ended 31 January 2000 and for the year ended 31 July 2000 in the EMEA region was significantly reduced due to the expenses of the share float process. Fees of approximately £535k were incurred as a result during November and December 1999 of which £434k were charged through the profit and loss account. The turnover relates to one class of business. The Directors consider these regions to be separate geographic markets and the markets within which the group operates. 3) EXCEPTIONAL FLOTATION COSTS Exceptional flotation costs of £535k represent the fees and related expenses incurred in the process of obtaining a listing on the London Stock Exchange. Of these, £101k has been netted against share premium in accordance with section 130 of the Companies Act 1985 (as amended). 4) TAX ON PROFIT ON ORDINARY ACTIVITIES The tax charge is higher than a standard UK rate as a result of profits being generated in high tax regimes and unrelieved overseas losses. 5) DIVIDENDS An interim dividend of 0.30p (2000 adjusted: 0.30p) per share will be paid on 31 May 2001 to shareholders on the register of members on 4 May 2001. The 30 January 2000 dividend as shown above has been adjusted as a result of a two for one split of the Company's shares that happened on 30 January 2001. 6) EARNINGS PER SHARE The earnings per share figures for the year ended 31 July 2000 and the six months ended 31 January 2000 have been restated as a result of the two for one split of the Company's shares as described in Note 5. The weighted average number of shares in the earnings per share calculation have also been restated on this basis. Earnings per share has been calculated in accordance with FRS14, using earnings of £656k (2000 full year: £1,119k and 2000 interim: £ 52k) and the weighted average number of shares in issue of 39,767,126 (2000 year end: 38,921,598 and 2000 interim 38,154,442). Diluted earnings per share have also been calculated on the weighted average number of shares in issue, as adjusted by potential ordinary shares of 43,584,159 (2000 year end: 41,846,790 and 2000 interim 41,334,192). In the year ended 31 July 2000 and the six months ended 31 January 2000, the adjusted earnings per share has been calculated by adding £417k of flotation costs back to the Profit attributable to shareholders. 7) INVESTMENTS This represents investment in own shares and is the cost of shares held by the Company Employee Share Ownership Plan Trust (ESOP) in the Company. The market value at 31 January 2001 was £13,007k (31 July 2000 was £9,971k). 8) NOTES TO THE CASH FLOW STATEMENT (1) Reconciliation of Operating Profit to Net Cash Inflow/(Outflow) from Operating Activities. Six Months Six Months Year ended ended ended July 31 January 31 January 31 2000 2001 2000 (Audited) (Unaudited) (Unaudited) £'000 £'000 £'000 Operating profit 1,238 521 2,456 Depreciation 735 435 1,031 Profit on sale of own - - (11) shares Exchange Movements - 12 - Loss/(Profit) on sale 2 (32) (30) of tangible fixed assets Decrease/(increase) in 201 (1,225) (2,444) debtors (Decrease)/increase in (430) (116) 1,556 creditors Increase in investments - - (14) Decrease in provisions - - (22) Net cash inflow/ (outflow) from operating activities 1,746 (405) 2,522 (2) Reconciliation of Net Cash Flow to movement in Net Debt. Six Months Six Months Year ended ended ended January 31 January 31 July 31 2001 2000 2000 (Unaudited) (Unaudited) (Audited) £'000 £'000 £'000 (Decrease)/increase in (233) 84 1,224 cash at bank and in hand in the period Cash inflow/(outflow) from decrease in bank account 815 222 (740) Increase in cash for the period 582 306 484 Cash outflow from bank (1,117) (700) (631) loan Net cash inflow under 27 37 148 hire purchase contracts Changes in net funds from cash flows (508) (357) 1 Interest element of hire purchase contract payments 23 (15) (27) Exchange movement (2) 11 Movement in net debt in (487) (372) (15) the period Net debt at period (593) (578) (578) beginning Net debt at period end (1,080) (950) (593)

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