Final Results
SPACEANDPEOPLE PLC
("SpaceandPeople" or the "Company")
Final Results for the Year Ended 31 October 2006
16 January 2007
SpaceandPeople which facilitates and manages the sale of promotional space
in malls and shopping centres announces results for the year ended 31 October
2006.
Highlights
· Billings up 30% from £7.4m to £9.6m
· Turnover up 37% from £1,408,693 to £1,933,303
· Profits before tax up 48% from £307,000 to £455,000
· Dividend up 50% to 1.5p per share
· Earnings per share up from 2.4p to 3.1p
Chairman's Statement
I am both pleased and proud to be able to report that the year ending 31st
October, 2006, the second set of figures since we have been listed on AIM,
has been the fourth year of significant and successive growth. These
results are a clear indication that the development of bespoke sales teams
specialising in different sectors of our business is creating real
improvements in sales and profitability. The current financial year will
see a continuation of that strategy. During the year we have also re-
evaluated our commercial relationships and are now increasingly focused on
the most profitable portfolios.
The only disappointing factor in the trading year was that June and July
did not meet our financial expectations. There is, nonetheless, a
discernible demand for outdoor venues over the Summer months and we have
therefore been seeking outdoor and leisure locations so that advertisers
can book alternative types of venue for experiential marketing. We are
currently in advanced talks with a portfolio of well known outdoor leisure
destinations for Summer activities.
During the year we announced that Hammerson France had joined our service
and we now have a dedicated French team working in Glasgow to develop this
business. We are also in advanced discussions with other overseas property
portfolios. They include one of the largest shopping centre portfolios in
Europe. I hope we will see positive movement on these fronts during this
trading year.
Your company has a great many strengths. We have an innovative new
marketing model that has been successfully established across the UK and is
now set on applying the body of knowledge and the associated techniques to
other markets overseas.
The company is managed by Nancy Cullen and Matt Bending who jointly
developed the concept and are tireless in pursuing their commitment to its
further exploitation. Their knowledge of the business and their sensitivity
to its demands are unrivalled. The range of their commitment is all
embracing - from a hands on grip of the minutiae of their own areas of the
business - respectively site acquisition and advertising sales - to a
dedicated drive to expand the geographic and intrinsic opportunities for
growth.
They are backed up by excellent teams dedicated to maximising the return on
our commercial relationships.
Dividend
As a result of the success in 2006, the board is proposing the payment on 5
March 2007 of an interim dividend of 1.5p per share, up from 1p per share
last year, to shareholders on the Register as at 26 January 2007
J J Arnold
Chairman
11 January 2007
Chief Executives' Review
SpaceandPeople has been operating for a little over five years and we have
created a unique business from the evaluation, marketing and sales of venue
mall space. Before 2001 there was no centralised, professional or
structured approach to these activities as an advertising medium in its own
right. We saw this opportunity and seized it. Today we represent most of
the UK's prestige property owners with a combined weekly footfall in excess
of 25 million. This represents a larger audience than that of Radio 1 and 2
combined and we are well placed to benefit from the fragmentation of media
spend and the redirection of spend from traditional media.
With the increased fragmentation of TV and declining media audiences,
advertisers want to cut through and speak to their customers face to face.
Historically this was done at trade shows, SpaceandPeople have brought it
into the consumer environment predominantly in Shopping Malls.
Seth Godin' a leading marketer in the USA sums it up when he says
"Advertisers are going to have to learn how to deliver messages with
frequency and low cost if they are to cope with the increasing competition
for the consumer's attention."
We believe we have captured a large area of fertile space in which to
deliver those messages "with frequency and low cost" to consumers who have
that wonderful commodity: time on their hands, in a buying frame of mind
and receptive to new products and services.
SpaceandPeople have been at the forefront of measuring the effectiveness of
mall media especially when integrated with other media. In a survey for
Siemens undertaken with SpaceandPeople when Live Brand experience was
combined with in-mall plasma TV and digital marketing, sales and responses
shot up by over 100%. We are in advanced talks with two property owners to
roll out fully integrated live experience media packages in 2007.
To complete the circle SpaceandPeople has developed a unique people
measurement system that will enable advertisers to measure very accurately
customer response remotely in real time. If this is done successfully we
will be well on the way to achieving the marketeers Holy Grail, "Above the
line awareness with below the line accountability".
Matthew Bending
Nancy Cullen
11 January 2007
Contact details
Jeremy Arnold Chairman 0141 303 8360
Matthew Bending Joint Managing Director 0141 303 8360
Nancy Cullen Joint Managing Director 0141 303 8360
Profit and Loss Account
For The Year Ended 31 October 2006
2006 2005
Notes £ £
TURNOVER 1,933,303 1,408,693
Administrative Expenses 1,519,012 1,119,589
_________ _________
414,291 289,104
Other operating income 11,707 420
_______ _______
OPERATING PROFIT 3 426,078 289,524
Interest receivable and
similar income 28,865 17,876
_______ _______
PROFIT ON ORDINARY ACTIVITIES
BEFORE TAXATION 454,943 307,400
Tax on profit on ordinary
activities 4 106,440 36,795
_______ _______
PROFIT FOR THE FINANCIAL YEAR
AFTER TAXATION 348,503 270,605
======= =======
Earnings per ordinary share 18 3.1p 2.4p
Diluted earnings per ordinary
share 18 3.0p 2.3p
The 2005 results have been restated under FR21 `Events after the
Balance Sheet Date' for dividends declared after the end of the
period. This is more fully disclosed in Note 1 to the accounts.
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.
Balance Sheet
31 October 2006
2006 2005
Notes £ £ £ £
FIXED ASSETS:
Intangible assets 7 - -
Tangible assets 8 68,263 31,663
________ ________
68,263 31,663
CURRENT ASSETS:
Debtors 9 728,739 493,489
Cash at bank and in hand 1,011,597 671,789
__________ ________
1,740,336 1,165,278
CREDITORS: Amounts falling
due within one year 10 951,265 574,110
________ ________
NET CURRENT ASSETS: 789,071 591,168
_______ _______
TOTAL ASSETS LESS CURRENT
LIABILITIES: £857,334 £622,831
======== ========
CAPITAL AND RESERVES:
Called up share capital 14 114,000 114,000
Special reserve 15 232,809 232,809
Profit and loss account 510,525 276,022
_______ _______
EQUITY SHAREHOLDERS' FUNDS 17 £857,334 £622,831
======== ========
These financial statements were approved by the Board of Directors on
11 January 2007
Signed on behalf of the Board of Directors
MJ Bending - Director
Cash Flow Statement
For The Year Ended 31 October 2006
Notes 2006 2005
£ £
Net cash inflow
from operating activities 1 512,462 400,226
Returns on investments and
servicing of finance 2 28,865 17,876
Taxation (35,235) -
Capital expenditure
and financial investment 2 (52,284) (28,740)
Equity dividends paid (114,000) -
_______ ______
339,808 389,362
Financing 2 - 2,000
_______ ______
Increase in cash in the period £339,808 £391,362
======= =======
Reconciliation of net cash flow
to movement in net funds 3
Increase in cash in the period 339,808 391,362
_______ _______
Change in net funds resulting
from cash flows 339,808 391,362
_______ _______
Movement in net funds in the period 339,808 391,362
Net funds at 1 November 671,789 280,427
_______ _______
Net funds at 31 October £1,011,597 £671,789
========= ========
Notes to the Cash Flow Statement
For The Year Ended 31 October 2006
1. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES
2006 2005
£ £
Operating profit 426,078 289,524
Depreciation charges 15,684 15,272
Loss on fixed asset investment - 5,001
Transfer of fixed asset investment - 4,667
Increase in debtors (235,250) (172,288)
Increase in creditors 305,950 258,050
_______ _______
Net cash inflow
from operating activities 512,462 400,226
======= =======
2. ANALYSIS OF CASH FLOWS FOR HEADINGS NETTED IN THE CASH FLOW STATEMENT
2006 2005
£ £
Returns on investments and
servicing of finance
Interest received 28,865 17,876
_______ ______
Net cash inflow
for returns on investments and servicing
of finance 28,865 17,876
====== ======
Capital expenditure
and financial investment
Purchase of tangible fixed assets (52,284) (29,075)
Cash receipts - investment sales - 335
_____ _____
Net cash outflow
for capital expenditure (52,284) (28,740)
====== ======
Financing
Net cash receipt - share issue (I) - 2,000
_____ _____
Net cash inflow/(outflow)
from financing - 2,000
===== =====
(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 1.11.05 Cash flow At 31.10.06
£ £ £
Net cash:
Cash at bank and in hand 671,789 339,808 1,011,597
_______ _______ _________
Total 671,789 339,808 1,011,597
======= ======= =========
Analysed in Balance Sheet
Cash at bank and in hand 671,789 1,011,597
_______ _________
671,789 1,011,597
======= =========
Notes to the Financial Statements
For The Year Ended 31 October 2006
1. ACCOUNTING POLICIES
The financial statements for the current year have been prepared
under the historical cost convention and are in accordance with
applicable accounting standards.
CHANGES IN ACCOUTING POLICIES
The particular accounting policies adopted are described below
and have remained unchanged from the previous year apart from
the adoption of the following financial reporting standards.
FRS 21 - `Events after the Balance Sheet Date'
The adoption of the Financial Reporting Standard No. 21 has
resulted in a change in accounting policy in respect of proposed
equity dividends. If the company declares dividends to the
holders of equity instruments after the balance sheet date, the
company does not recognise those dividends as a liability at the
balance sheet date. The aggregate amount of equity dividends
proposed before approval of the financial statements, which have
not been shown as liabilities at the balance sheet date, are
disclosed in the notes to the financial statements. Previously,
proposed equity dividends were recorded as liabilities at the
balance sheet date.
This change in accounting policy has resulted in a prior year
adjustment for the company. Shareholders' funds at 1 November
2005 have been increased by £114,000.
For the year ended 31 October 2006, the change in accounting
policy has resulted in an increase in the retained profit for
the year of £114,000. The balance sheet at 31 October 2005 has
been restated to reflect the de-recognition of a liability for
the proposed equity dividend of £114,000 which has now been paid
in the year to 31 October 2006.
FRS 22 `Earnings per Share'
FRS 22 has been adopted in full and has had no impact on the
disclosure of earnings per share.
FRS 25 `Financial Instruments - Presentation'
The adoption of the presentational requirements of FR5 25 has
had no impact of the financial statements.
FRS 28 `Corresponding amounts'
FRS 28 has been adopted. There is no impact on the disclosure
included within the financial statements as it imposes the
same requirement for comparatives as previously required by the
Companies Act 1985.
Turnover
Turnover represents the invoiced value of services provided and
commissions earned, in the UK 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 costs - 33.3% on cost
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 capitalises 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.
Foreign exchange
Transactions denominated in foreign currencies are translated
into sterling at the rates ruling at the dates of the
transactions. Monetary assets and liabilities denominated in
foreign currencies at the balance sheet date are translated at
the rates at that date. These translation differences are dealt
with in the profit and loss account.
Financial instruments
Financial liabilities and equity instruments are classified
according to the substance of the arrangements entered into.
An equity instrument is any contract that evidences a residual
interest in the assets of the entity after deducting all of
its financial liabilities.
Where the contractual obligations of the financial
instruments (including share capital) are equivalent to a
similar debt instrument, those financial instruments are
classified as financial liabilities. Financial liabilities
are presented as such in the balance sheet. Finance costs are
calculated so as to produce a constant rate of return on the
outstanding liability.
Where the contractual terms of share capital do not have
any terms meeting the definition of a financial liability then
this is classed as an equity instrument. Dividends and
distributions relating to equity instruments are debited
directly to equity.
2. STAFF COSTS
2006 2005
£ £
Wages and salaries 815,668 608,423
Social security costs 83,048 61,979
______ ______
898,716 670,402
====== ======
The average monthly number of employees during the year was as
follows:
2006 2005
Directors 2 2
Administration 10 4
Telesales 18 16
__ __
30 22
== ==
3. OPERATING PROFIT
The operating profit is stated after charging:
2006 2005
£ £
Motor vehicle leasing 8,654 4,963
Depreciation - owned assets 15,684 14,755
Loss on disposal of fixed assets - 5,001
Patents and trademarks written off - 517
Auditors' remuneration 5,600 4,000
Auditors' remuneration - non-audit fees 7,600 6,975
===== =====
Directors' emoluments 147,248 123,728
====== =======
4. TAXATION
Analysis of the tax charge
The tax charge on the profit on ordinary activities for the year
was as follows:
2006 2005
£ £
Current tax:
UK corporation tax 108,000 36,795
Over provision (1,560) -
______ ______
Tax on profit on ordinary activities 106,440 36,795
====== ======
UK corporation tax was charged at 30% during 2006 and 19% during
2005.
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:
2006 2005
£ £
Profit on ordinary activities before tax 454,943 307,400
====== ======
Profit on ordinary activities
multiplied by the standard rate of
corporation tax in the UK of 30% (2005-19%) 136,483 58,406
Effects of:
Expenses not deductible for tax purposes 6,490 10,180
Capital allowances in excess of depreciation (1,913) (15)
Brought forward loss relief - (31,776)
Marginal relief (33,060) -
______ _____
Current tax charge 108,000 36,795
====== ======
5. DIVIDENDS
2006 2005
£ £
Paid during the year
Equity - 1p per ordinary share 114,000 -
======= ======
Proposed after the year end
Equity - 1.5p per ordinary share (2005:1p) 171,000 114,000
======= =======
6. PRIOR YEAR ADJUSTMENTS
The change in accounting policies, detailed in note 1, has
resulted in a prior year adjustment of £114,000 in respect of
equity dividends paid.
7. INTANGIBLE FIXED ASSETS
Patents and
Trademarks
___________
£
COST:
At 1 November 2005
and 31 October 2006 5,913
=====
AMORTISATION:
At 1 November 2005
and 31 October 2006 5,913
_____
NET BOOK VALUE:
At 31 October 2006 and 31 October 2005 -
=====
8. TANGIBLE FIXED ASSETS
Website Fixtures
development and Computer
costs fittings equipment Totals
_________ _________ _________ _________
£ £ £ £
COST:
At 1 November 2005 89,174 16,709 58,952 164,835
Additions 26,475 3,546 22,263 52,284
______ ______ ______ ______
At 31 October 2006 115,649 20,255 81,215 217,119
______ ______ ______ ______
DEPRECIATION:
At 1 November 2005 88,739 7,154 37,279 133,172
Charge for year 590 4,733 10,361 15,684
______ ______ ______ ______
At 31 October 2006 89,329 11,887 47,640 148,856
______ ______ ______ ______
NET BOOK VALUE:
At 31 October 2006 26,320 8,368 33,575 68,263
====== ====== ====== ======
At 31 October 2005 435 9,555 21,673 31,663
====== ====== ====== ======
9. DEBTORS: AMOUNTS FALLING
DUE WITHIN ONE YEAR
2006 2005
£ £
Trade debtors 690,140 474,773
Other debtors 11,732 12,149
Prepayments 26,867 6,567
______ ______
728,739 493,489
====== ======
10. CREDITORS: AMOUNTS FALLING
DUE WITHIN ONE YEAR
2006 2005
£ £
Trade creditors 83,863 50,506
Other creditors 474,445 320,641
Social security & other taxes 164,872 92,430
Taxation 108,000 36,795
Accrued expenses 120,085 73,738
_______ ______
951,265 574,110
======= ======
Trade creditors in the current and previous years have been further
analysed to show a more detailed split of trade and other creditors for
disclosure purposes. Other creditors represent the balance of sums due to
shopping centres where the company provides an invoicing service.
11 OPERATING LEASE COMMITMENTS
The following payments are committed to be paid within one year:
Operating leases
Land and Other
buildings
2006 2005 2006 2005
£ £ £ £
Expiring:
Within one year 16,905 8,905 1,863 -
Between one and five years - - 4,830
____ ____ ____ ____
16,905 8,905 1,863 4,830
==== ==== ==== ====
12. SECURED DEBTS
The following secured debts are included within creditors:
2006 2005
£ £
- -
== ==
The company's bankers hold a bond and floating charge for all
sums and obligations due or to become due.
13. FINANCIAL INSTRUMENTS
The Company's financial instruments comprise cash, and various
items such as trade debtors and trade creditors which rise
directly from its operations.
Short term debtors/creditors have been excluded form the
following disclosures.
2006 2005
£ £
Financial Assets
Cash at bank and in hand 1,011,597 671,789
Liquidity risk
The company seeks to manage financial risk by ensuring sufficient
liquidity is available to meet foreseeable needs and to invest cash
assets safe and profitably.
Fair value
The net fair value and carrying amounts approximate their
carrying value. The aggregate net fair values and carrying
amounts of financial assets and financial liabilities are
disclosed in the balance sheet and notes.
14.CALLED UP SHARE CAPITAL
Authorised:
Number: Class: Nominal 2006 2005
value: £ £
15,000,000 Ordinary 1p 150,000 150,000
======= =======
Allotted, issued and fully paid:
Number: Class: Nominal 2006 2005
value: £ £
11,400,000 Ordinary 1p 114,000 114,000
======= =======
15.SPECIAL RESERVE
2006 2005
£ £
Special Reserve 232,809 232,809
======= =======
The Special Reserve was created following the cancellation of the share premium account.
16.TRANSACTIONS WITH DIRECTORS
Directors fees
During the period fees amounting to £15,083 (2005-£14,559)were paid to individuals for
their services as directors.
17.RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
2006 2005
£ £
Profit for the financial year 348,503 270,605
Dividends (114,000) -
_______ _______
234,503 270,605
New shares issued in year - 2,000
_______ ______
Net addition to shareholders' funds 234,503 272,605
Opening shareholders' funds
(originally £508,831 before
prior year adjustment of £114,000) 622,831 350,226
_______ _______
Closing shareholders' funds 857,334 622,831
======= =======
Equity interests 857,334 622,831
======= =======
18. EARNINGS PER SHARE
This is based on profit on ordinary activities after taxation for the
year of £348,503 and on the weighted number of ordinary shares in
issue throughout the year.
2006 2005
Basic ordinary shares 11,400,000 11,383,333
Diluted ordinary shares 11,610,500 11,546,333
It is considered that the non material difference between the average
fair value of ordinary shares during the year and the average fair
value of the shares under option deems it acceptable to treat the
diluted number of shares as simply the ordinary shares in issue plus
the number of shares under option.
19. 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 185,500 Ordinary Shares exercisable within the following
dates and at the following exercise prices.
20,000 8 March 2007 - 7 March 2011 12.5p
110,000 27 September 2007 - 26 September 2011 15p
15,000 27 September 2007 - 26 September 2011 50p
36,500 30 October 2008 - 29 October 2012 50.5p
4,000 30 June 2009 - 30 June 2013 70p
In addition, Share Options have been granted under an Unapproved
Option Scheme over 25,000 Ordinary Shares exercisable within the
following dates and at the following exercise price.
25,000 5 September 2009 - 5 September 2013 65p
The Company's annual report and accounts for the year ended 31
October 2006, are available free of charge from the offices of ARM
the Company, at 141 St James Road, Glasgow, G4 OLT for a period of
one month from their publication.
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