Final Results
IBNet PLC
28 June 2002
IBNET
CONTINUES TO GROW
IBNet plc, the corporate intelligence, brand monitoring and internet
surveillance company has today announced its preliminary results for the 9
months ended 31 March 2002. The results include 3 months trading since the
interim period, reflecting the change of year-end.
Key highlights:
• Turnover for 9 months £1,188,000 (12 months to June 01: £402,000)
• Loss before tax and interest for 9 months £1,867,000 (12 months to June
01: £24,630,000)
• Turnover for 3 months to 31 March 2002 £720,000
• EBITDA positive during three months of trading with WebGravity
• Continuing cost savings achieved from WebGravity integration
• Year end changed to 31 March
Commenting on the results, David Heynes, Chairman remarked:
' I am delighted to announce a strong period of cash flow positive trading for
the Company. Turnover has grown significantly in this three month period, which
has far outstripped H2 of last year.'
' Our products are being well received by our marketplace. We now have an
established client base for all three of our major product offerings, and we
work with many of the UK's major brand names and Blue Chip companies.'
' We will continue to actively pursue other organisations with whom we can work
for mutual benefit. These may range from agreements to market their products and
services, joint ventures or indeed acquisitions or mergers. We look to the
future with confidence.'
- ends -
Date: 28 June 2002
For further information contact:
IBNet PLC City Profile Group
David Heynes, Chairman Ed Senior
Toby Smallpeice, CEO Simon Courtenay
020-8987-6700 020-7448-3244
web: www.ibnetplc.com e-mail: edward.senior@city-profile.com
Chairman's statement
Your board has pleasure in reporting a successful three months trading to 31st
March 2002. As reported in our interim statement the company has changed its
year end to 31 March. This has been done to reflect the trading cycle of the
business as changed by the integration of Webgravity. The acquisition of
Webgravity has resulted in a step change in the company's earnings profile and
has brought critical mass to the company. Webgravity has provided valuable
product and cost synergies enabling the company to offer a one-stop shop
solution for brand promotion and protection.
The business now has three main streams of revenue being Netdetec and its
related services, the Webgravity corporate search engine marketing services and
Webwurld, which offers search engine marketing related products to smaller
businesses and private individuals.
Financial Results
The turnover for the nine months ended 31st March 2002 amounted to £1,188,000
(year to 30 June 2001 £402,000). Significantly, turnover of £720,000 was
received in the three month period to 31 March 2002. This followed the
successful integration of WebGravity and reflects three months of EBITDA
positive trading. The operating loss before goodwill amortisation, impairment
and interest was £1,286,000 (year to 30 June 2001 £2,934,000) and loss before
tax £1,843,000 (year to 30 June 2001 £2,469,000 after excluding the fixed asset
impairment write off £21,976,000). The directors do not propose to pay a
dividend.
These figures only include five months trading for the company including
Webgravity, but indicate that we are now beginning to generate useful levels of
revenue on a reduced cost base.
Review of Activities
We reported at the interim stage that the integration of the IBNet and
Webgravity operations had been largely completed. Further improvements in
efficiency are being pursued by streamlining workflow and internal information
systems.
Netdetec
The Netdetec product line is based on proprietary 'spider' technologies to
quickly gather vast amounts of information from the web and analyse this
information for matches on particular words, terms or meanings. In this way the
technology can help (amongst others) detect fraud and copyright breaches as well
as survey customer opinion of a brand on line.
Demand for the top end Netdetec product has remained steady, though the sales
cycle for this service remains relatively protracted. Turnover for the period
was £393,000, this represents a 30% increase after adjusting for the shorter
accounting period. We continue to serve several organisations with household
names.
Search Engine Marketing (SEM)
Following the acquisition of Webgravity additional corporate SEM services have
been provided. SEM services consist of elements of consultancy, media buying and
web based technology. The purpose of these services is to drive targeted traffic
from search engines to clients websites. This service is particularly useful to
those businesses with a strong online retailing presence. Current clients
include low cost airlines who transact the majority of their bookings over the
web, online retailers and financial services companies marketing their products
over the internet.
Recent client wins for this service include Charles Schwabb, WH Smith, Umbro,
Teletext, and MORETH>N Insurance, part of the Royal & Sun Alliance Insurance
Group PLC.
In order to maintain its market edge the company has developed a range of
technologies as well as relationships with search engines such as Inktomi
(powering portals such as MSN and Netscape), BTLooksmart, Lycos and Google.
Corporate SEM revenues in the five months following the acquisition were
£639,000. SEM tends to be a seasonal or cyclical spend with lower revenues
through summer and higher revenues in the second half of the year.
WebWurld
Webwurld.com was launched in 2001 as the first search engine paid inclusion
portal. Webwurld retails inclusion in dozens of search engines around the world
and is available in multiple languages and currencies to its worldwide customer
base. The Webwurld.com website has shown particularly encouraging growth, with
customer levels, average spend per customer, repeat orders and renewals all
growing faster than expected.
Webwurld revenues for the five months following the acquisition were £156,000.
The company intends to increase its marketing and development efforts on the
Webwurld proposition during the coming year.
It is not anticipated that any further material capital expenditure will be
necessary for normal trading activities in the foreseeable future.
Product development
A number of improvements have been made to the Netdetec 2 system to simplify the
maintenance of its normal operation. The company has launched a new pay per
click management service offering managed search engine marketing campaigns on
the new pay per click search engines. We are also launching a 'through to order'
tracking system which allows us to maximise return on investment for customers
by fully tracking the effectiveness of search engine media spend. Webwurld has
launched a high margin 'toolkit' product to allow companies to cheaply track
their search engine performance and are the first reseller to retail a paid-for
rapid Lycos directory review.
The company continually develops focused business solutions based on customer
feedback and demand.
Prospects
Our aim for year 3 is to develop trading on a solid, profitable and cash
generative basis
Having successfully integrated Webgravity and IBNet Plc, we are continuing to
seek ways of maximising return on our core technologies as well as developing
other marketable services. We will also continue to actively pursue other
organisations with whom we can work for mutual benefit. These may range from
agreements to market their products and services, joint ventures or indeed
acquisitions or mergers.
I would like to thank the executive directors and staff for their enthusiasm and
hard work. We all look forward to a successful third year of trading.
David Heynes
Chairman
27th June 2002
IBNet PLC - Profit and loss account
for the period ended 31 March 2002
9 Months To Year To
31 Mar 02 30 Jun 01
NOTES £'000 £'000 £'000 £'000
TURNOVER 1
- Continuing activities 393 402
- Acquisition 795 -
_______ _______
1,188 402
COST OF SALES (200) (48)
_______ _______
GROSS PROFIT 988 354
ADMINISTRATIVE EXPENSES
- Fixed asset impairment - (21,976)
- Amortisation of investment 5 (202) -
- Other administrative expenses (2,274) (3,008)
_______ _______
(2,476) (24,984)
_______ _______
OPERATING PROFIT / (LOSS)
- Continuing activities (1,670) (24,630)
- Acquisition 182 -
_______ _______
(1,488) (24,630)
Exceptional Item 4 (379) -
_______ _______
Loss after exceptional item (1,867) (24,630)
NET INTEREST 24 185
_______ _______
LOSS ON ORDINARY ACTIVITIES (1,843) (24,445)
TAXATION 2 - -
_______ _______
TOTAL LOSS AFTER TAXATION FOR PERIOD (1,843) (24,445)
_______ _______
BASIC AND FULLY DILUTED LOSS PER SHARE 3 3.06p 44.48p
There were no other recognised gains or losses other than the loss for the
period.
All operations are continuing.
The accompanying accounting policies and notes form part of these financial
statements.
IBNet PLC - Balance Sheet
as at 31 March 2002
AS AT AS AT
31 Mar 02 30 Jun 01
NOTES £'000 £'000 £'000 £'000
FIXED ASSETS
Investments 5 2,221 -
Tangible fixed assets 456 449
_______ _______
2,677 449
CURRENT ASSETS
Investments recoverable after one year 450 -
Debtors recoverable within one year 623 253
Cash at bank and in hand 43 2,041
_______ _______
1,116 2,294
CURRENT LIABILITIES
Creditors:
- Amounts falling due within one year (1,011) (426)
Net current assets 105 1,868
_______ _______
Total assets less current liabilities 2,782 2,317
Creditors:
- Amounts falling due after more than one (583) -
year
Provision for liabilities and charges (773) -
_______ _______
1,426 2,317
_______ _______
CAPITAL AND RESERVES
Called up share capital 13,938 13,738
Share premium account 14,371 13,619
_______ _______
28,309 27,357
Profit and loss account (26,883) (25,040)
_______ _______
Equity shareholders' funds 1,426 2,317
_______ _______
The financial statements were approved by the board of directors and signed on
their behalf on 27th June 2002.
T. J. Smallpeice
Director
IBNet PLC - Cash Flow Statement
For the period ended 31 March 2002
9 Months To Year To
31 Mar 02 30 Jun 01
NOTES £'000 £'000 £'000 £'000
Net cash outflow from operating 6 (1,282) (1,890)
activities
Returns on investments and servicing of
finance
Interest received 34 185
Interest paid (10) -
_______ _______
24 185
Capital expenditure and financial
investments
Purchase of tangible fixed assets (163) (298)
Purchase of current asset investment (450) -
Purchase of investment in subsidiary (73) -
undertaking
_______ _______
(686) (298)
_______ _______
Net cash outflow before financing (1,944) (2,003)
Management of liquid resources
Cash placed on fixed term deposits - 2,300
Sale of short term investments 1,700 -
_______ _______
1,700 2,300
Financing
Capital element of finance lease rentals (6)
-
Expenses paid in connection with share (48) -
issues
_______ _______
(54) -
_______ _______
(Decrease)/increase in cash 8 (298) 297
_______ _______
IBNet PLC - Notes to the financial statements
for the period 31 March 2002
1. TURNOVER AND LOSS ON ORDINARY ACTIVITIES BEFORE TAX
The turnover is attributable to the principal activities, which are carried out
in the United Kingdom and Europe.
The loss on ordinary activities before taxation is stated after charging:
9 Months To Year To
31 Mar 02 30 Jun 01
£'000 £'000 £'000 £'000
Auditors Remuneration
- Audit services 20 16
- Non audit services 3 5
_______ _______
23 21
Operating lease rentals land and buildings 50 37
Depreciation and amortisation
- Tangible fixed assets owned 144 115
- Tangible fixed assets held under hire purchase 5 -
contracts
- Investment amortisation 202 -
_______ _______
351 115
Fixed asset investment: impairment loss - 21,976
Amounts provided against amounts receivable from
subsidiary undertaking - 564
2. TAXATION
There are tax losses of approximately £4,728,000 (2001: £3,300,000) to carry
forward and use against future profits of the same trade. Should suitable
taxable profits arise, these losses would represent a deferred tax asset of
approximately £1,418,400 (2001: £990,000) at a corporation tax rate of 30%.
There is no tax charge or credit for the period.
3. LOSS PER SHARE
The calculation for the basic loss per share is based upon the loss attributable
to ordinary shareholders divided by the weighted average number of shares on
issue during the period.
Reconciliation of the loss and weighted average number of shares used in the
calculations are set out below:
9 Months To Year To
31 Mar 02 30 Jun 01
Loss on ordinary activities before tax (£'000) (1,843) (24,445)
Weighted average number of shares 60,226,725 54,952,000
Amount of loss per share in pence 3.06p 44.48p
4. EXCEPTIONAL ITEM
The exceptional item represents the costs of restructuring the business
following the acquisition of Webgravity as regards redundancies and the closure
of operations in Egham and their relocation to Chiswick.
5. FIXED ASSET INVESTMENT
Subsidiary undertaking Amortisation /
Impairment losses
Cost Net book value
£'000 £'000 £'000
As at 1 July 2001 21,976 (21,976) -
Additions 2,423 - 2,423
Charge for the period - (202) (202)
_______ _______ _______
As at 31 March 2002 24,399 (22,178) 2,221
_______ _______ _______
On 31 October 2001, the company acquired the entire share capital of Webgravity
Limited for a consideration of £2,423,000, including £450,000 loan notes, the
issue of 20 million ordinary shares of 1 pence each and further loan notes
estimated to amount to £900,000 subject to a maximum of £2,550,000. This
contingent consideration is dependant upon the future performance of the
business during an earn-out period up to and including August 2003.
As at 31 March 2002 the undertakings in which the company held 20% or more of
the share capital were:
Country of Class of shares held Proportion held Nature of
incorporation business
Name of undertaking
IBNet (UK) Limited England and Wales Ordinary 100% Dormant
Webgravity Limited England and Wales Ordinary 100% Dormant
IBNet (UK) Limited was dormant throughout the period, and Webgravity Limited
became dormant from 1 November 2001, at which date the trading activities were
transferred to IBNet plc.
6. NET CASH OUTFLOW FROM OPERATING ACTIVITIES
As at As at
31 Mar 02 30 Jun 01
£'000 £'000
Operating loss (1,488) (24,630)
Depreciation 149 115
Fixed asset investment amortisation/ 202 21,976
impairment
Loss on sale of fixed assets 26 -
Exceptional item associated with purchase of (379) -
subsidiary undertaking
(Increase) / Decrease in debtors (370) 539
Increase in creditors 578 110
_______ _______
Net cash flow from operating activities (1,282) (1,890)
_______ _______
7. RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS / (NET DEBT)
9 Months to Year to
31 Mar 02 30 Jun 01
£'000 £'000
(Decrease)/increase in cash in the period (298) 297
Cash inflow from decrease in liquid resources (1,700) (2,300)
Cash inflow from debt and leasing financing 6 -
_______ _______
Change in net debt resulting from cash flows (1,992) (2,003)
Loan notes issued and due for issue (900) -
Inception of finance leases (19) -
_______ _______
Change in net debt during the period (2,911) (2,003)
Net funds as at 1 July 2001 2,041 4,044
_______ _______
Net (debt)/funds as at 31 March 2002 (870) 2,041
_______ _______
8. ANALAYSIS OF CHANGES IN NET FUNDS/(DEBTS)
As at Non Cash As at
1Jul 01 Cash flow Items 31 Mar 02
£'000 £'000 £'000 £'000
Cash in hand and at bank 341 (298) - 43
Cash deposit 1,700 (1,700) - -
_______ _______ _______ _______
2,041 (1,998) - 43
Debt - - (900) (900)
Finance leases - 6 (19) (13)
_______ _______ _______ _______
Net funds/(net debt) 2,041 (1,992) (919) (870)
_______ _______ _______ _______
9. NATURE OF THE FINANCIAL INFORMATION
The foregoing financial information does not amount to full accounts within the
meanings of Section 240 of the Companies Act 1985. The financial information has
been extracted from the companies Annual Report & Accounts for the 9 month
period ended 31 March 2002, upon which the auditors have given an unqualified
report.
Copies of the Annual Report & Accounts will be posted to shareholders shortly
and will be available from the Company's Website and the Company's registered
office at Hogarth Centre, Hogarth Lane, Chiswick, W4 2QN.
Websites
www.ibnetplc.com
www.webwurld.com
This information is provided by RNS
The company news service from the London Stock Exchange
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