Final Results
Adventis Group PLC
10 March 2005
ADVENTIS GROUP PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 31 DECEMBER 2004
Adventis Group plc ('Adventis' or 'the Group'), the specialist multi-media
marketing and advertising agency, today announces its maiden preliminary results
for the year ended 31 December 2004 following the Group's successful admission
to AIM in July 2004.
KEY POINTS
• Pre-tax profit up 83% at £0.77m (2003 - £0.42m)
• Turnover up 32% at £12.09m (2003 - £9.16m)
• Earnings per share up 29% at 2.20p (2003 - 1.70p)
• Final dividend of 0.40p per share making a total for the year of 0.85p per
share
• Net cash inflow from operating activities £0.67m
• Acquisition of Affiniti (UK) Ltd, a specialised UK healthcare advertising
agency, completed in January 2005
• Successful launch of Adventis NMG Ltd in August 2004
• Major client wins include the Hub in Birmingham, the South West Regional
Development Agency (SWERDA) in Cardiff and St James Homes, complementing
existing clients such as Allied London Properties, BAA MacArthur Glen,
Savills and ING Real Estate
Peter Mitchell, Chairman of Adventis Group plc, commented:
'2004, and particularly our first six months as a publicly quoted company, has
been extremely encouraging with not only a significant rise in both turnover and
profit, but also with the achievement of the early part of our long-term
strategy through the announcement of a significant joint venture and a major
acquisition.
The Group's strategy at flotation was to expand its marketing services offering
with a strong focus on the property, healthcare and financial services sectors.
We have made significant progress to this end in the last year through both
organic and new venture growth and we are confident of continuing this through
2005.'
Enquiries:
Charles Phillpot, Chief Executive Officer Fiona Mulcahy, Justin Griffiths
Adventis Group plc Citigate Dewe Rogerson
Tel: 020 7034 4750 Tel: 020 7638 9571
Paul Dudley
WH Ireland Limited
Tel: 020 7397 3225
Chairman's Statement
This is my first statement as Chairman of Adventis Group plc having been
appointed on 19 April 2004 prior to the flotation on 1 July 2004. 2004, and
particularly our first six months as a publicly quoted company, has been
extremely encouraging with not only a significant rise in both turnover and
profit, but also with the achievement of the early part of our long-term
strategy through the announcement of a significant joint venture and a major
acquisition.
It is pleasing to note that, in a year when the management had to focus on a
flotation, both continued successful business performance and long term
strategic development could be achieved. This is encouraging for our future
business plans and reflects the strength of talent within Adventis.
Today, the Group consists of five operating companies in two locations employing
70 people providing a broad range of marketing services to a large range of
clients.
The successful launch of Adventis NMG Ltd, as a venture with NMG Financial
Services Consulting Ltd, represents the beginning of our strategy to offer a
full range of services to the financial services industry. The acquisition of
Affiniti (UK) Ltd, a specialised UK healthcare advertising agency, was completed
after the end of the 2004 financial year. It builds on the foothold the Group
had already built in this profitable market and is likely to act as the vehicle
for all future healthcare activity.
The Group comprises a talented and commercial team. The past year has been a
turning point for the Group in terms of funding and strategy. Trading in 2005
has made a positive start and is ahead of last year and therefore the outlook
for 2005 remains encouraging. Our existing businesses continue to perform well
and we look forward to announcing further corporate activity in the near future.
Peter Mitchell
Chairman
Chief Executive Officer's Statement
I am pleased to report a strong set of maiden preliminary results for the year
ended 31 December 2004. Group billings of £12.09m were up 32% (2003: £9.16m)
and pre-tax profit of £0.77m was up 83% (2003: £0.42m). In addition, we
benefited from healthy margins and strong cash flow.
The earnings per share for 2004 of 2.2p was ahead of the previous year at 1.7p.
The Board is recommending a final dividend of 0.40p per share, making a total
for the year of 0.85p.
The Group operates in a highly competitive market place. The diversified
marketing services industry is highly labour intensive reflecting the reliance
on creative skill and knowledge. There is a rising demand for specialists in
various marketing fields. Our revenues are generated predominantly in the form
of fees for project specific work. It is against this background that I am
pleased to report results that reflect the hard work of all the team at
Adventis.
Business Strategy
The Group enjoyed a more buoyant market and most areas of the business were able
to generate higher revenues at good margins. Since our admission to AIM on 1
July 2004, where we raised £2.60m net of expenses for the Group, we have pursued
our business strategy of increasing the market share for our media services in
the residential and commercial property sectors. Furthermore, we continue to
expand the services we provide in our other target markets, currently comprising
the financial services and healthcare sectors.
Acquisitions and Joint Ventures
In August 2004, we formed Adventis NMG Ltd as a venture with NMG Financial
Services Consulting Ltd, a highly specialised management consulting firm,
providing a comprehensive range of services to the global financial industry.
The NMG global network has unrivalled access to financial institutions with
clients such as ISIS, Scottish Widows, Charcol and HBOS and is able to act as a
very effective business introducer.
In early January 2005, we completed the acquisition of Affiniti (UK) Ltd, a
specialised UK healthcare advertising agency with clients such as Allergan,
sanofi pasteur MSD, Chiron Vaccines, Eden Biopharm, Leo Pharma, Napp and Serono.
This acquisition builds on the foothold Adventis Group already has in this
profitable market and is likely to act as the vehicle for all future healthcare
activity.
Operational Review
The following is a summary of activity by business sector for the year ended 31
December 2004.
Residential Property Marketing Sector
Our residential property marketing sector has a broad base of clients from
international names such as Savills to UK developers such as Capital &
Provident, Galliard and Devington Homes. This sector, which returns encouraging
margins, continues to provide a broad range of consultancy and creative services
across the industry.
Commercial Property Marketing Sector
Our commercial property marketing sector won several major long-term projects in
2004 such as the Hub in Birmingham and the South West Regional Development
Agency (SWERDA) in Cardiff. These project successes continue to give the
business a positive order book for the current year. Margins remained under
pressure in this competitive business area.
Media Planning and Buying Sector
Our media planning and buying sector has full NPA (Newspapers Publishing
Association) recognition. Media broking is highly cash generative and works
very much in tandem with our residential property marketing sector's creative
business. Business volumes continue to grow at good margins.
Financial Services Sector
The new venture, Adventis NMG Ltd, which specialises in financial services,
commenced trading in September 2004 and traded profitably for the period ended
31 December 2004. A senior executive from a similar organisation was recruited
and has been successful in exploiting the many leads generated by Adventis NMG
Ltd. A series of projects were concluded in 2004 and the outlook is positive
for 2005.
Outlook
Since our flotation on AIM, the Group has enjoyed a higher profile within the
industry and national media. This increased awareness greatly facilitates our
mergers and acquisitions activity.
All staff serving at the time of the flotation participated in a share option
scheme and this has contributed to excellent staff morale and retention.
Our strong cash flow and balance sheet will assist and help to support further
strategic developments and we continue to explore ways of growing the Group
while ensuring our profit record is maintained.
Charles Phillpot
Chief Executive Officer
Consolidated profit and loss account
Year ended 31 December 2004
Unaudited Audited
2004 2003
Notes £'000 £'000
Turnover 2 12,087 9,159
Operating Profit 2 625 418
Net interest receivable 148 1
Profit on ordinary activities before taxation 773 419
Tax on profit on ordinary activities (214) (86)
Profit on ordinary activities after taxation 559 333
Minority Interest (1) -
Profit for the financial year 558 333
Dividends 4 (278) (297)
Retained profit for the financial year 10 280 36
Earnings per share
Basic earnings per ordinary share 3 2.2p 1.7p
Diluted earnings per ordinary share 3 2.0p 1.6p
Balance sheet
As at 31 December 2004
Group Company
Unaudited Audited Unaudited Audited
2004 2003 2004 2003
Notes £'000 £'000 £'000 £'000
Fixed assets
Intangible assets
- goodwill 242 259 - -
- negative goodwill (42) (45) - -
200 214 - -
Tangible assets 184 157 175 145
Investments - - 57 57
384 371 232 202
Current assets
Work in progress 5 - - -
Debtors 6 2,218 1,972 1,235 972
Cash at bank and in hand 3,183 501 2,766 -
5,406 2,473 4,001 972
Creditors - amounts falling due
within one year 7 (1,878) (1,808) (884) (866)
Net current assets 3,528 665 3,117 106
Total assets less current
liabilities 3,912 1,036 3,349 308
Creditors - amounts falling due
after more than one year 8 (10) (7) (10) (7)
Provisions for liabilities and
charges (5) (5) (5) (7)
Net assets 3,897 1,024 3,334 294
Capital and reserves
Called up share capital 9 79 50 79 50
Share premium account 10 2,563 - 2,563 -
Capital redemption reserve 10 200 200 200 200
Other reserves 10 20 20 20 20
Profit and loss account 10 1,034 754 472 24
Equity shareholders' funds 3,896 1,024 3,334 294
Equity minority interests 1 - - -
3,897 1,024 3,334 294
Consolidated cash flow statement
Year ended 31 December 2004
Unaudited Audited
2004 2003
Notes £'000 £'000
Net cash inflow from operating activities 11 667 890
Returns on investment and servicing of finance
Interest received 65 3
Interest element of finance leases (2) (2)
Net cash inflow from returns on investments and
servicing of finance 63 1
Taxation (46) (131)
Capital expenditure
Purchase of tangible fixed assets (72) (35)
Net cash outflow from capital expenditure (72) (35)
Equity dividends paid to shareholders (64) (297)
Net cash inflow before use of liquid resources and 548 428
financing
Financing
Issue of ordinary share capital 2,592 -
Capital element of finance lease rental payments (8) (6)
Increase in cash 3,132 422
Reconciliation of movements in equity shareholders' funds
Year ended 31 December 2004
Group Company
Unaudited Audited Unaudited Audited
2004 2003 2004 2003
£'000 £'000 £'000 £'000
Profit for the financial year 558 333 726 706
Dividends (278) (297) (278) (297)
Retained profit for the year 280 36 448 409
Issue of ordinary shares 2,592 - 2,592 -
Issue of share options - 20 - 20
Net movement in the year 2,872 56 3,040 429
Shareholders' funds at start of 1,024 968 294 (135)
year
Shareholders' funds at end of year 3,896 1,024 3,334 294
1 Basis of preparation
The preliminary statement is not the company's statutory accounts. The statutory
accounts for the year ended 31 December 2003 have been delivered to the
Registrar of Companies and received an audit report which was unqualified and
did not contain statements under s237(2) or (3) of the Companies Act 1985. The
accounts for the year ended 31 December 2004 have not yet been delivered to the
Registrar of Companies and the auditors have not yet reported thereon.
2 Operating profit
Unaudited Audited
2004 2003
£'000 £'000
Turnover (all UK origin) 12,087 9,159
Staff costs (2,432) (2,065)
Depreciation:
Owned assets (56) (41)
Leased assets (5) (10)
Amortisation of purchased goodwill (17) (18)
Negative goodwill amortised 3 3
Other operating charges (8,955) (6,610)
Operating profit 625 418
Operating profit is stated after charging
Auditors' remuneration: - Audit services 30 12
- Non-audit services 72 3
Operating lease rentals: - Plant & equipment 5 2
- Other 213 96
3 Earnings per share
Basic earnings per share is based on the profit on ordinary activities after
taxation of £558,000 (2003: £333,000) and on 25,789,474 (2003: 20,000,000) being
the weighted average number of shares in issue during the period.
Diluted earnings per share is based on the profit on ordinary activities after
taxation of £558,000 (2003: £333,000) and on 27,654,387 (2003: 21,052,632) being
the diluted weighted average number of shares in issue during the period.
Unaudited Audited
2004 2003
Basic earnings per share 2.2p 1.7p
Diluted earnings per share 2.0p 1.6p
4 Dividends
Unaudited Audited
2004 2003
£'000 £'000
First interim ordinary dividend paid 84 297
Second interim ordinary dividend paid 64 -
Final ordinary dividend proposed 130 -
Total ordinary dividends paid and proposed 278 297
5 Investments - Company
Subsidiary undertakings
The principal subsidiary undertakings of the company and their principal
activities are shown below. They have share capitals wholly comprising of
ordinary shares. All the companies are registered in England and Wales, operate
in the UK and are consolidated into the group accounts.
Subsidiary undertakings Principal activity Holding
Gilbert Doyle Oakmont Limited Advertising and marketing services 100%
Premium Media Limited Media planning and buying services 100%
Property Marketing Company Limited Advertising and marketing services 100%
Adventis NMG Limited Advertising and marketing services 51%
6 Debtors
Group Company
Unaudited Audited Unaudited Audited
2004 2003 2004 2003
£'000 £'000 £'000 £'000
Trade debtors 2,103 1,432 5 -
Amounts owed by parent undertaking - 509 - -
Amounts owed by subsidiary - - 1,118 949
undertakings
Other taxes and social security 12 - 12 3
Corporation tax - 11 - -
Prepayments and accrued income 103 20 100 20
2,218 1,972 1,235 972
7 Creditors - amounts falling due within one year
Group Company
Unaudited Audited Unaudited Audited
2004 2003 2004 2003
£'000 £'000 £'000 £'000
Bank loans and overdrafts 9 459 6 373
Obligations under finance leases 11 6 11 6
and hire purchase contracts
Trade creditors 365 142 156 23
Corporation tax 157 - 8 -
Proposed dividend 130 - 130 -
Other taxation and social security 195 155 5 5
Other creditors 117 80 1 1
Accruals and deferred income 894 966 567 458
1,878 1,808 884 866
8 Creditors - amounts falling due after more than one year
Group Company
Unaudited Audited Unaudited Audited
2004 2003 2004 2003
£'000 £'000 £'000 £'000
Obligations under finance leases 10 7 10 7
and hire purchase contracts
9 Share capital
2004 2004 2003 2003
£'000 No. shares £'000 No. shares
Authorised
Ordinary shares of 0.25 pence each 150 60,000,000 - -
'A' Ordinary shares of £1 each - - 40 39,630
'B' Ordinary shares of £1 each - - 13 13,000
Preference shares of £1 each - - 400 400,000
Allotted, called up and fully paid
Ordinary shares of 0.25 pence each 79 31,578,948 - -
'A' Ordinary shares of £1 each - - 37 37,000
'B' Ordinary shares of £1 each - - 13 13,000
Preference shares of £1 each - - - -
79 50
On 1 July 2004 the Company was admitted to AIM. Prior to admission all the 'B'
Ordinary shares were converted to 'A' Ordinary shares and 2,360 'A' Ordinary
shares were issued to Sigma Technology Management Limited. Subsequent to these
events, but immediately prior to admission, each 'A' Ordinary share was
sub-divided into 400 new Ordinary shares of 0.25pence each.
Prior to admission the Company's issued share capital was 21,052,632 ordinary
shares of 0.25 pence. On admission a further 10,526,316 shares were issued for
cash at a nominal value of £26,315. These shares were issued at a price of 28.5
pence per share, generating a share premium of £2,973,684. From this premium,
costs of the admission amounting to £410,557 have been deducted, leaving a share
premium account totalling £2,563,127 (also see note 10).
10 Reserves
Share Capital
premium redemption Other Profit and
account reserve reserves loss account Total
£'000 £'000 £'000 £'000 £'000
Group
At 1 January 2004 - 200 20 754 974
Retained profit for the year - - - 280 280
Shares issued 2,974 - - - 2,974
Issue costs (411) - - - (411)
At 31 December 2004 2,563 200 20 1,034 3,817
Share Capital
premium redemption Other Profit and
account reserve reserves loss account Total
£'000 £'000 £'000 £'000 £'000
Company
At 1 January 2004 - 200 20 24 244
Retained profit for the year - - - 448 448
Shares issued 2,974 - - - 2,974
Issue costs (411) - - - (411)
At 31 December 2004 2,563 200 20 472 3,255
11 Reconciliation of operating profit to net cash inflow from operating
activities
Unaudited Audited
2004 2003
£'000 £'000
Operating profit 625 418
Issue of share options - 15
Depreciation of tangible assets 61 51
Amortisation of intangible fixed assets 17 18
Negative goodwill amortised (3) (3)
(Increase)/decrease in work in progress (5) 1
(Increase)/decrease in debtors (257) 221
Increase in creditors 229 169
Net cash inflow from operating activities 667 890
12 Analysis of net funds/(debt)
Other
31 December Cash non- cash 31 December
2004 movements changes 2003
£'000 £'000 £'000 £'000
Cash at bank and in hand 3,183 2,682 - 501
Overdrafts (9) 450 - (459)
Finance leases (21) 8 (16) (13)
Total 3,153 3,140 (16) 29
13 Post balance sheet event
On 4 January 2005 Adventis Group plc acquired 100% of the share capital of
Affiniti (UK) Limited, a company providing marketing services to the healthcare
industry.
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