Final Results for the year ended 31 October 2005

SPACEANDPEOPLE PLC SpaceandPeople which facilitates and manages the sale of promotional space in malls and shopping centres announces results for the year ending 31st October 2005 Highlights · Turnover up 36% to £1,408,693 (2004: £1,033,723) · Pre tax profits up 57% to £307,400 (2004 : £195,517) · Venues represented increased by 35% to 165 · New events business successfully launched Chairmans Statement SpaceandPeople celebrated its first year as an AIM quoted company by producing a further substantial rise in pre-tax profits. For the year ending 31st October 2005, they rose 57% to £307,400 (2004: £195,517) thereby completing our third year of compound growth of over 50% per annum. Year end cash stood at £671,789, with net assets of £508,831 There was substantial growth across the business. The number of venues under contract rose from 122 to 165; the total weekly footfall in our Centres increased from 20 to 25 million; gross billings expanded by 25% from £5.9 million to £7.4 million; and turnover rose from £1,033,273 to £1,408, 693 Development of the Business The company established an Events side during 2005 to offer advertisers new ways of promoting business at high footfall venues. The first event we organised was a Motor Show held at Meadowhall near Sheffield. The show was very successful and we plan to run three such shows in 2006, respectively a repeat at Meadowhall, and new shows at Brent Cross in North London and at Braehead in Glasgow. We believe that this additional aspect to our business will enable us to increase our rate of growth still further and we intend to extend our events programme into other appropriate themes in the coming years We have successfully introduced our services into a number of new types of venues, including gardening centres, where the comparatively long "dwell time" provides an excellent opportunity for advertisers to reach consumers We mentioned last year our plans to develop Live Brand Experience and expand overseas. I am pleased to report that sales of Live Brand Experience campaigns increased by over 100% in 2005 and that we will be representing some overseas centres in the coming year. Dividend As a result of the success in 2005, the board is proposing the payment, in March 2005, of a final dividend of 1p per share which represents an increase of 103% compared with last year. Contact details Jeremy Arnold Chairman tel: 07720 580 395 Matthew Bending Joint Managing Director tel: 0705 900 3134 Nancy Cullen Joint Managing Director tel: 0705 900 3135 Profit and Loss Account For The Year Ended 31 October 2005 2005 2004 Notes £ £ TURNOVER 1,408,693 1,033,723 Administrative expenses 1,119,589 844,913 289,104 188,810 Other operating income 420 310 OPERATING PROFIT 3 289,524 189,120 Interest receivable and similar income 17,876 7,661 307,400 196,781 Interest payable and similar charges 4 - 1,264 PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 307,400 195,517 Tax on profit on ordinary activities 5 36,795 - PROFIT FOR THE FINANCIAL YEAR AFTER TAXATION 270,605 195,517 Dividends 6 114,000 56,000 156,605 139,517 Retained profit/(deficit)brought 5,417 (424,281) forward 162,022 (284,764) Transfer from share premium - 290,181 RETAINED PROFIT CARRIED FORWARD £162,022 £5,417 Earnings per ordinary share 20 2.4p 16.6p Diluted earnings per ordinary share 20 2.3p 15.62p CONTINUING OPERATIONS None of the company's activities were acquired or discontinued during the current and previous years. TOTAL RECOGNISED GAINS AND LOSSES The company has no recognised gains or losses other than the profits for the current and previous years. Balance Sheet 31 October 2005 2005 2004 Notes £ £ £ £ FIXED ASSETS: Intangible assets 7 - 517 Tangible assets 8 31,663 17,344 Investments 9 - 10,002 31,663 27,863 CURRENT ASSETS: Debtors 10 493,489 321,201 Cash at bank and in hand 671,789 280,435 1,165,278 601,636 CREDITORS: Amounts falling due within one year 11 688,110 279,273 NET CURRENT ASSETS: 477,168 322,363 TOTAL ASSETS LESS CURRENT LIABILITIES: £508,831 £350,226 CAPITAL AND RESERVES: Called up share capital 15 114,000 112,000 Special reserve 17 232,809 232,809 Profit and loss account 162,022 5,417 EQUITY SHAREHOLDERS'FUNDS 19 £508,831 £350,226 Cash Flow Statement For The Year Ended 31 October 2005 2005 2004 Notes £ £ Net cash inflow from operating activities1 400,226 283,522 Returns on investments and servicing of finance 2 17,876 6,397 Capital expenditure and financial investment 2 (28,740) (16,892) Equity dividends paid - (56,000) 389,362 217,027 Financing 2 2,000 (53,333) Increase in cash in the period £391,362 £163,694 Reconciliation of net cash flow to movement in net funds 3 Increase in cash in the period 391,362 163,694 Change in net funds resulting from cash flows 391,362 163,694 Movement in net funds in the period 391,362 163,694 Net funds at 1 November 280,427 116,733 Net funds at 31 October £671,789 £280,427 Notes to the Cash Flow Statement For The Year Ended 31 October 2005 1. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES 2005 2004 £ £ Operating profit 289,524 189,120 Depreciation charges 15,272 13,448 Loss on fixed asset investment 5,001 - Transfer of fixed asset investment 4,667 - Increase in debtors (172,288) (95,068) Increase in creditors 258,050 176,022 Net cash inflow from operating activities 400,226 283,522 2. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT 2005 2004 £ £ Returns on investments and servicing of finance Interest received 17,876 7,661 Interest paid - (1,264) Net cash inflow for returns on investments and servicing of finance17,8766,397 Capital expenditure and financial investment Purchase of tangible fixed assets (29,075) (6,890) Cash payments - investment purchase - (10,002) Cash receipts - investment sales 335 - Net cash outflow for capital expenditure (28,740) (16,892) Financing Net cash receipt - share issue (I) 2,000 - Loan repayments - (53,333) Net cash inflow/(outflow) from financing 2,000 (53,333) (I) This represents £100,000 received from share issue less £98,000 of share and AIM listing costs paid from the proceeds of the issue. 3. ANALYSIS OF CHANGES IN NET FUNDS At 1.11.04Cash flowAt 31.10.05 £ £ £ Net cash: Cash at bank and in hand 280,435 391,354 671,789 Bank overdraft (8) 8 - 280,427 391,362 671,789 Total 280,427 391,362 671,789 Analysed in Balance Sheet Cash at bank and in hand 280,435 671,789 Bank overdraft (8) - 280,427 671,789 Notes to the Financial Statements For The Year Ended 31 October 2005 1. ACCOUNTING POLICIES Accounting convention The financial statements have been prepared under the historical cost convention and are in accordance with applicable accounting standards. A summary of the more important accounting policies, which have been applied consistently, except as specified are laid out below. Turnover Turnover represents the invoiced value of services provided and commissions earned in the United Kingdom, net of value added tax. Patents and trademarks The costs of obtaining patents and trademarks are written off over the economic life of the asset acquired. Tangible fixed assets Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life. Website development - 33.3% on cost costs Fixtures and fittings - 25% on cost Computer equipment - 25% on cost Hire purchase and leasing commitments Rentals paid under operating leases are charged to the profit and loss account as incurred. Website development costs The company capitalised all costs directly attributable to developing its website, while costs which relate to ongoing maintenance are expensed as they arise. Deferred taxation Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date. 2. STAFF COSTS 2005 2004 £ £ Wages and salaries 608,423 426,740 Social security costs 61,979 44,110 670,402 470,850 The average monthly number of employees during the year was as follows: 2005 2004 Directors 2 2 Administration 4 3 Telesales 16 15 22 20 3. OPERATING PROFIT The operating profit is stated after charging: 2005 2004 £ £ Motor vehicle leasing 4,963 4,460 Depreciation - owned assets 14,755 11,569 Loss on disposal of investment 5,001 - Patents and trademarks written off 517 1,879 Auditors' remuneration - audit fees 5,875 3,500 Auditors' remuneration - non audit fees 5,100 3,840 Directors' emoluments 123,728 122,100 Emoluments of the highest paid director 61,864 61,050 4. INTEREST PAYABLE AND SIMILAR CHARGES 2005 2004 £ £ Bank interest - 244 Bank loan interest - 1,020 - 1,264 5. TAXATION Analysis of the tax charge The tax charge on the profit on ordinary activities for the year was as follows: 2005 2004 £ £ Current tax: UK corporation tax 36,795 - Tax on profit on ordinary activities 36,795 - UK corporation tax has been charged at 19% Factors affecting the tax charge The tax assessed for the year is lower than the standard rate of corporation tax in the UK. The difference is explained below: 2005 2004 £ £ Profit on ordinary activities before tax 307,400 195,517 Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 19% (2004 - 19%) 58,406 37,148 6. DIVIDENDS 2005 2004 £ £ Proposed (1 p per ordinary share) 114,000 - Paid final dividend (5 p per ordinary share prior to bonus issue) - 56,000 7. INTANGIBLE FIXED ASSETS Patents and trademarks £ COST: At 1 November 2004 and 31 October 2005 5,913 AMORTISATION: At 1 November 2004 5,396 Charge for year 517 At 31 October 2005 5,913 NET BOOK VALUE: At 31 October 2005 - At 31 October 2004 517 8. TANGIBLE FIXED ASSETS Website Fixtures development and Computer costs fittings equipment Totals £ £ £ £ COST: At 1 November 2004 88,594 6,849 40,317 135,760 Additions 580 9,860 18,635 29,075 At 31 October 2005 89,174 16,709 58,952 164,835 DEPRECIATION: At 1 November 2004 88,594 4,480 25,343 118,417 Charge for year 145 2,674 11,936 14,755 At 31 October 2005 88,739 7,154 37,279 133,172 NET BOOK VALUE: At 31 October 2005 435 9,555 21,673 31,663 At 31 October 2004 - 2,369 14,975 17,344 9. FIXED ASSET INVESTMENTS £ COST: At 1 November 2004 10,002 Disposals (10,002) At 31 October 2005 - NET BOOK VALUE: At 31 October 2005 - At 31 October 2004 10,002 2005 2004 £ £ Unlisted investments - 10,002 10.DEBTORS: AMOUNTS FALLING DUE WITHIN ONE YEAR 2005 2004 £ £ Trade debtors 474,773 312,477 Other debtors 12,149 5,565 Prepayments 6,567 3,159 493,489 321,201 11.CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR 2005 2004 £ £ Bank loans and overdrafts (see note 12) - 8 Trade creditors 371,147 154,581 Dividends payable 114,000 - Social security & other taxes 92,430 88,541 Taxation 36,795 - Accrued expenses 73,738 36,143 688,110 279,273 12.LOANS AND OVERDRAFTS An analysis of the maturity of loans and overdrafts is given below: 2005 2004 £ £ Amounts falling due within one year or on demand: Bank overdrafts - 8 13.OPERATING LEASE COMMITMENTS The following payments are committed to be paid within one year: Operating leases Land and Other buildings 2005 2004 2005 2004 £ £ £ £ Expiring: Within one year 8,905 5,290 - - Between one and five years - - 4,830 4,830 8,905 5,290 4,830 4,830 14.SECURED DEBTS The following secured debts are included within creditors: 2005 2004 £ £ Bank overdrafts - 8 The company's bankers hold a bond and floating charge for all sums and obligations due or to become due. 15.CALLED UP SHARE CAPITAL Authorised: Number: Class: Nominal 2005 2004 value: £ £ 15,000,000 Ordinary 1p 150,000 150,000 Allotted, issued and fully paid: Number: Class: Nominal 2005 2004 value: £ £ 11,400,000 Ordinary 1p 114,000 112,000 (2004 - 11,200,000) 16.SHARE PREMIUM 2005 2004 £ £ Brought forward - 623,790 Transfer to special reserves - (333,609) Elimination of deficit of P&L reserves - (290,181) - - By virtue of a Special Resolution, passed on 15 April 2004, the Share Premium Account was cancelled and the balance in excess of the accumulated profit and loss deficit was transferred to a Special Reserve Account. Requisite approval was obtained from the Court of Session. 17.SPECIAL RESERVE 2005 2004 £ £ Brought forward 232,809 - Transfer from share premium account - 333,609 Bonus issue of shares - (100,800) 232,809 232,809 The Special Reserve was created following the cancellation of the share premium account. 18.TRANSACTIONS WITH DIRECTORS Directors fees During the period fees amounting to £14,559 (2004 - £10,708) were paid to individuals for their services as directors. 19.RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS 2005 2004 £ £ Profit for the financial year 270,605 195,517 Dividends (114,000) (56,000) 156,605 139,517 New shares issued in year 2,000 - Net addition to shareholders' funds 158,605 139,517 Opening shareholders' funds 350,226 210,709 Closing shareholders' funds 508,831 350,226 Equity interests 508,831 350,226 20. EARNINGS PER SHARE This is based on profit on ordinary activities after taxation for the year of £270,605 and on the weighted number of ordinary shares in issue throughout the year. 2005 2004 Basic ordinary shares 11,383,3331,175,233 Diluted ordinary shares 11,546,3331,190,031 21. SHARE OPTIONS The company has established an EMI Option Scheme under which the maximum number of Ordinary Shares exercisable that can be granted is restricted to such number of shares the aggregate market value of which cannot exceed £100,000 per employee at the date of grant. Senior executives and certain eligible employees are entitled to participate in the EMI Option Scheme at the discretion of the Board, which in the future will be advised on such matters by the Remuneration Committee. In aggregate Share Options have been granted under the EMI Option Scheme over 163,000 Ordinary Shares exercisable within the following dates and at the following exercise prices. 28,000 8 March 2007 - 7 March 2011 12.5p 120,000 27 September 2007 - 26 September 2011 15p 15,000 27 September 2007 - 26 September 2011 50p 2005 2004 £ £ £ £ Income: Memberships 45,759 50,405 Commission 1,315,734 933,718 Consultancy - 1,000 Client invoicing sales 47,200 48,600 1,408,693 1,033,723 Other income: Sundry receipts 420 310 Deposit account interest 17,876 7,661 18,296 7,971 1,426,989 1,041,694 Expenditure: Directors' remuneration 120,800 119,600 Social security 14,209 14,094 Wages 487,623 307,140 Social security 47,770 30,016 Web site costs 15,391 11,953 Telephone 36,908 27,370 Post & stationery 16,688 10,815 Advertising 10,919 15,577 Travelling 55,974 58,504 Motor vehicle leasing 4,963 4,460 Repairs & renewals 746 987 Healthcare insurance 6,611 498 Recruitment fees 12,364 27,405 Subscriptions and memberships 5,047 3,250 Sundry expenses 38,473 20,268 Auditors remuneration 5,875 3,500 Accountancy and bookkeeping 18,534 16,688 Client invoicing costs 46,861 40,324 Legal and professional fees 53,129 50,977 Company secretarial fees 7,155 4,500 Entertainment 10,889 11,527 Bad debts 22,225 11,240 Rent 45,738 34,920 Insurance 8,586 3,827 1,093,478 829,440 333,511 212,254 Finance costs: Bank interest - 244 Bank loan interest - 1,020 Bank charges 5,838 2,025 5,838 3,289 Carried forward 327,673 208,965 2005 2004 £ £ £ £ Brought forward 327,673 208,965 Depreciation: Website development 145 - Fixtures & fittings 2,674 1,582 Computer equipment 11,936 9,987 Patents & trademarks 517 1,879 15,272 13,448 NET PROFIT £307,400 £195,517

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