Interim Results - Pre-tax Profit Up 26%
Text 100 Group PLC
27 April 2000
'Strong maiden performance at Interims'
* Turnover up 61% to £15 million
* Pre-tax profit, before exceptionals, up 26% at £0.95 million
* Good organic growth fuelled by new clients from blue chip new
economy clients and technology companies
* Two new brands established and Bite launched internationally
* Strong start to second half of the year
Tom Lewis, Chairman of Text 100 Group plc, the recently quoted
international technology pr company, said: 'I am pleased to report a
strong performance at Interims, following our enthusiastic reception
in the City at flotation. We have continued to demonstrate our
capacity for organic growth - both by adding new clients and
establishing new start-ups.
'The Group has made a strong start to the second half of the year, and
demand for our services remain high in all our geographic markets. As
a result, the Board is confident that the Group will continue to show
further progress at the full year.'
Text 100 Interims
The first six months to 31st January 2000 have undoubtedly been the
most exciting and demanding in the Text 100 Group's 19 year history.
The decision to float on the LSE in the immediate run up to the
Millennium and amid all the anxiety about Y2K was not an easy or
obvious choice, but it turned out to be well judged, and the company
enjoyed an enthusiastic reception in the City - with twenty seven
institutions applying to take stock.
Text 100 has produced a strong performance at the interim stage, with
turnover up 61% at £15 million and pre-tax profit up 26% at £951k,
before exceptional flotation expenses of £434k. EPS on an adjusted
basis rose 3% to 2.55p, and the interim dividend increased 50% to
0.6p. This level of increase of the dividend at the interim stage is
the result of the move to a twice-yearly dividend from the previous
quarterly payment. The Board will continue to recommend a progressive
increase in the full-year dividend whilst meeting the reinvestment
needs of the business.
The rate of growth in turnover again demonstrates the Group's capacity
for organic growth - both in terms of winning new clients across the
globe and establishing new start-up operations as appropriate. Growth
in pre-tax profits is also strong, but restrained by the inevitable
losses incurred by new start-up subsidiaries in their early months.
There has also been substantial investment in recruitment and training
needed to sustain continuing growth.
During the first six months of the year the group has established a
totally new brand in London and Sydney - AUGUST.ONE COMMUNICATIONS.
Two of the Group's existing brands set up new overseas start-up
operations. In September, the Text 100 brand established an operation
in Hong Kong, while in October Bite Communications opened its first
overseas subsidiary in San Francisco. This was a milestone for the
Group and demonstrates Bite's capability of becoming an international
PR company in its own right. In addition the company launched a
specialist online marketing consultancy in the US called BrandX.
Much of the Group's growth has come from the addition of new clients.
These include a good mix of blue chip new economy companies such as
AltaVista, Virgin Biznet, Phone.com, AskJeeves.com and Getty Images as
well as work for some of the world's prestigious technology companies
including Handspring, Compaq, Network Associates, Unisphere, MCI
Worldcom and Motorola.
Recently the Group appeared at No. 19 in a calendar 1999 league table
of international pr firms with significant operations in the USA,
researched and prepared by the Council of PR firms and published by O'
Dwyer. This table again confirmed the Text 100 Group as the largest
independent and international technology-specialist PR group.
The Group has made a strong start to the second half of the year, and
demand for its services remains high in all of its geographical
markets. As a result, the Board is confident that the Group will
continue to show further progress at the full year.
For further information, contact:
Tom Lewis, Chairman, Text 100 Group 020 8242 4100
David Dewhurst, Finance Director 020 8242 4100
Nick Denton, Hogarth Partnership 020 7357 9477
TEXT 100 GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 31 JANUARY 2000
Six Six Year
Months Months ended
ended ended
31 January 31 January 31 July
2000 1999 1999
(UNAUDITED) (UNAUDITED) (AUDITED)
£'000 £'000 £'000
Turnover
(Note 3) 15,015 9,324 22,771
Other
external
charges (2,520) (931) (3,882)
------- ------- -------
Turnover
less other
external
charges 12,495 8,393 18,889
Staff costs 7,945 5,508 11,027
Depreciation 435 292 653
Other Operating
Charges:
Exceptional
Flotation
Costs (Note 4) 434 - -
Other
Operating
Charges 3,160 1,808 5,412
Total other
operating
charges 3,594 1,808 5,412
------- ------- -------
(11,974) (7,608) (17,092)
------- ------- -------
Operating
Profit 521 785 1,797
Interest
receivable
and
similar
income 6 - 14
Interest
payable
and
similar
charges (10) (30) (111)
------- ------- -------
Profit on
Ordinary
Activities
before
Taxation 517 755 1,700
Tax on
profit on
ordinary
activities (421) (258) (801)
------- ------- -------
Profit on
Ordinary
Activities
after
Taxation 96 497 899
Minority
Interests (44) (29) (46)
------- ------- -------
Profit
Attributable
to Members
of the
Holding Company 52 468 853
Equity
dividends
paid and
proposed
(Note 6) (119) (83) (309)
------- ------- -------
Retained
(Loss)/Profit
for the
Period (67) 385 544
======= ======= =======
Basic Earnings
per Share
(Note 7) 0.27p 2.48p 4.52p
Diluted Earnings
per Share
(Note 7) 0.25p 2.39p 4.35p
Adjusted Earnings
per Share
(Note 7) 2.55p 2.48p 4.52p
The profit and loss account for the six months ending 31 January, 2000
and 31 January, 1999 and the year ended 31 July 1999 relate to the
continuing activities of the Group.
TEXT 100 GROUP PLC
CONSOLIDATED BALANCE SHEET
AS AT 31 JANUARY 2000
January July January
2000 1999 1999
--------- -------- ---------
(UNAUDITED) (AUDITED) (UNAUDITED)
£'000 £'000 £'000
FIXED ASSETS
Tangible
assets 2,314 1,741 1,667
Investments
(Note 8) 1,509 1,509 844
------- ------- -------
3,823 3,250 2,511
CURRENT ASSETS
Debtors 8,227 6,469 6,057
Cash at
bank and
in hand 646 562 694
------- ------- -------
8,873 7,031 6,751
CREDITORS -
Amounts
falling due
within one
year (5,814) (5,538) (5,316)
------- ------- -------
NET CURRENT
ASSETS 3,059 1,493 1,435
------- ------- -------
TOTAL ASSETS
LESS
CURRENT
LIABILITIES 6,882 4,743 3,946
CREDITORS -
Amounts
falling
due after
more than
one year (953) (409) (395)
PROVISIONS
FOR
LIABILITES
AND CHARGES
- Deferred tax - (22) -
------- ------- -------
NET ASSETS 5,929 4,312 3,551
======= ======= =======
EQUITY
CAPITAL
AND
RESERVES
Called up
share
capital 1,121 1,071 1,071
Share
premium
account 2,711 1,162 604
Profit
and loss
account 1,985 2,009 1,819
------- ------- -------
TOTAL
EQUITY
SHAREHOLDERS'
FUNDS 5,817 4,242 3,494
MINORITY
INTERESTS 112 70 57
------- ------- -------
5,929 4,312 3,551
======= ======= =======
TEXT 100 GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 JANUARY 2000
Six Six Year
Months Months ended
ended ended
31 January 31 January 31 July
2000 1999 1999
(UNAUDITED) (UNAUDITED) (AUDITED)
£'000 £'000 £'000
Net Cash
(Outflow)/Inflow
from Operating
Activities
(Note 9 (1)) (405) 751 2,225
Returns on
Investments
and Servicing
of Financing
Interest
received 6 - 13
Interest paid (10) (30) (111)
Minority
interest
dividends paid - - (7)
------- ------- -------
Net Cash
Outflow from
Returns on
Investments
and Servicing
of Finance (4) (30) (105)
Net Cash
Outflow from
Taxation
Corporation
tax paid (531) (360) (604)
Capital
Expenditure
and Investing
Activities
Payments for
long term
deposits (28) (19) (52)
Payments to
acquire own shares - - (200)
Payments to
acquire tangible
fixed assets (1,007) (720) (1,102)
Receipts from
sales of
tangible
fixed assets 137 78 112
------- ------- -------
Net Cash
Outflow from
Capital
Expenditure
and Investing
Activities (898) (661) (1,242)
Equity Dividends
Paid (133) (96) (306)
------- ------- -------
Net Cash
Outflow
before
Financing (1,971) (396) (32)
Financing
Long term
bank loan 700 - -
Issue of share
capital 1,599 - -
Net Capital
(Outflow)/Inflow
on hire
purchase
contracts (22) 160 297
------- ------- -------
Net Cash
Inflow from
Financing 2,277 160 297
------- ------- -------
Increase/(Decrease)
in Cash for
the Period
(Note 9 (2)) 306 (236) 265
======= ======= =======
NOTES TO THE INTERIM ACCOUNTS
FOR THE SIX MONTHS ENDED 31 JANUARY 2000
1) FINANCIAL INFORMATION
The financial information is for the six months ended 31 January
2000 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 1999 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) CHANGE OF ACCOUNTING POLICY
There has been a change of accounting policy in relation to exchange
rates. In order to increase accuracy of reporting for the profit and
loss report only, an average rate has been used for the period
ending January 31 2000. In previous accounts reported, the period
closing rate has been used as is used in balance sheet reporting.
The Directors do not consider that this change has had a material
effect on the reported profit, therefore the comparatives have not
been restated.
3) SEGMENTAL INFORMATION
Analysis of turnover, profit before taxation and net assets by
geographic origin and destination.
Europe, North Asia Total
Middle East America Pacific
& Africa
£'000 £'000 £'000 £'000
Six Months ended
January 31, 2000
Turnover 11,216 2,901 898 15,015
Profit before
taxation 85 * 471 (39) 517
Net Assets 5,456 802 (329) 5,929
Year ended July
31, 1999
Turnover 18,450 3,481 840 22,771
Profit before
taxation 1,261 705 (266) 1,700
Net Assets 3,813 537 (38) 4,312
Six Months ended
January 31, 1999
Turnover 7,744 1,443 137 9,324
Profit before
taxation 673 204 (119) 755
Net Assets 3,228 403 (80) 3,551
* Note: Profit for the six months ended January 31, 2000 in
EMEA 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.
4) 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).
5) TAX ON PROFIT ON ORDINARY ACTIVITIES
The tax charge is disproportionately high due to higher rates of tax
in some overseas territories where profits are significantly higher
than last year and losses in certain subsidiaries which cannot be
offset against the profit of group companies in other countries.
6) DIVIDENDS
An interim dividend of 0.6p (1999: 0.4p) per share will be paid on
31 May 2000 to shareholders on the register of members on 12 May
2000.
7) EARNINGS PER SHARE
Earnings per share has been calculated in accordance with FRS14,
using earnings of £ 52k (1999 full year: £853k and 1999 interim: £
468k) and the weighted average number of shares in issue of
19,077,221 (1999 year end: 18,845,187 and 1999 interim 18,848,519).
Diluted earnings per share has also been calculated on the weighted
average number of shares in issue, as adjusted by potential ordinary
shares of 20,667,096 (1999 year end: 19,582,528 and 1999 interim
19,556,427).
The adjusted EPS has been calculated by adding £434k of flotation
costs back to the Profit attributable to shareholders of £52k.
8) 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 2000 was £ 10,427k (31
July 1999 was £2,510k).
9) NOTES TO THE CASH FLOW STATEMENT
(1) Reconciliation of Operating Profit to Net Cash Inflow from
Operating Activities.
Six Months Six Months Year
ended ended ended
Jan 31 2000 Jan 31 1999 July 31 1999
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Operating profit 521 785 1,797
Depreciation 435 293 653
Exchange Movements 12 4 7
Profit on sale of
tangible fixed assets (32) (16) (84)
Increase in debtors (1,225) (1,082) (1,461)
(Decrease)/Increase
in creditors (116) 767 1,313
---------------- ----------- ------------
Net cash
(Outflow)/Inflow from
operating activities (405) 751 2,225
================ =========== ============
(2) Reconciliation of Net Cash Flow to movement in Net Funds.
Six Months Six Months Year
ended ended ended
Jan 31 2000 Jan 31 1999 July 31 1999
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Increase in cash at
bank and in hand in
the year 84 348 216
Cash
inflow/(outflow)
from decrease in
bank account 222 (584) 49
---------------- ----------- ------------
Increase/(decrease)
in cash for the year 306 (236) 265
Cash outflow from
bank loan (700) - -
Net cash
inflow/(outflow)
under hire purchase
contracts 37 (152) (268)
---------------- ----------- ------------
Changes in net funds
from cash flows (357) (388) (3)
---------------- ----------- ------------
Interest element of
hire purchase
contract payments (15) (9) (29)
---------------- ------------ ------------
Movement in net debt
in the year (372) (397) (32)
Net debt at period
beginning (578) (546) (546)
---------------- ------------ ------------
Net debt at period
end (950) (943) (578)
================ =========== ============
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