Final Results
CERES MEDIA INTERNATIONAL PLC
("Ceres" or the "Company" or the "Group")
Final Results to 31 July 2012
The Company has experienced tough trading conditions since admission of its
shares to trading on AIM in September 2011, despite this, the directors, albeit
cautious about the future, are hopeful that the Company's products can be
successfully exploited in existing and developing marketplaces and segments.
The board would like to thank customers, shareholders and business partners for
their continued support.
Financial Results
2012 2011
(£ 000) (£ 000)
Revenue 162 30
Loss before income tax (1,653) (485)
Cash Balance at year end 28 56
Inventories 341 163
Exceptional items included within the loss 868 -
Trading conditions for the Company remain challenging with performance having
been impacted by the poor general economic conditions and specific structural
issues impacting the print material distribution sector, especially in the
United Kingdom. The directors have reacted to these changes by refocusing the
Company's sales strategy and by directly targeting potential end-users of the
product, simplifying the distribution process and optimising price
competitiveness.
Notwithstanding this, to date there has been a slower than expected adoption by
end-users of the Company's core product ranges. The directors have noted a
steady increase in sales of Chorus / Gossyp in the US over the last months of
the current trading year.
OPERATIONS SUMMARY
TierraFilmTM window cling product is designed to replace existing PVC window
clings used in point of sale window applications and provide the customers with
an environmentally sound alternative. This product was launched in January
2012, however, technical issues surrounding the physical fixing process and the
delays in market adoption have led to slower than expected off-take by
end-users. The directors anticipate that a newly formulated and improved
TierraFilmTM window cling product adopting a light-tack adhesive in response to
market feedback will be available shortly enabling existing stocks to be
reworked and successfully sold in the UK market.
Additional uses are being developed for existing raw material stock to minimise
waste and to generate new sales channels.
TierraFilmTM Backlit 100 and 200 has been developed specifically for the `Out
of Home' advertising market to replace existing medium with an environmentally
sound alternative. The approval process by the three major `Out of Home' media
owners and their supply chain has taken significantly longer than was
originally anticipated and this has precluded the Company from selling product
in its core market area. I am pleased to announce that as of January 2013 the
TierraFilm ranges are now listed by the three major `Out of Home' media owners
in the UK opening up this large market. The Company is in discussions and
advanced product testing with a number of premium branded entities to initiate
national advertising campaigns which are anticipated to commence by April 2013.
Naturewoven Chorus and Gossyp
The sales of these two lines remain below the board's expectations, although
there have been recent indications of improvements in off-take for Chorus in
the US with a regular and growing sales pattern being established.
After extensive testing Chorus and Gossyp were approved in March 2012 by
Hewlett Packard ("HP") for use on its digital print machines - this should
build significant confidence with printers who use HP's printers as well as
provide manufacturer approved settings for optimal use on both products.
Awareness of the NatureWovenTM range of products continues to increase and the
Company is pleased to have been nominated as a finalist at the recent
Sustainable Business Council of Los Angeles Awards. The Company has recently
decided to transfer all UK / Europe based stocks of Chorus and Gossyp to the US
marketplace to support the sales initiatives underway in this market.
As announced on 3 September 2012 the Company received its first orders for
NatureNetting, the Company's spectacular new event screening product designed
specifically to support the highest profile events that took place in London
during the summer of 2012. The products which can be colour matched to any
pantone reference were very well received by the organisers and will be rolled
out through major event management organisations in the UK and US during Spring
and Summer, 2013. In the period from May to July despite very tight lead times
and the narrow window of availability NatureNetting contributed over 50% of the
Company's revenues during the last fiscal.
The Company continues to develop and modify its products in response to market
feedback in order to increase sales and utilise stock holding. The Company has
recently worked in partnership with a US business to develop a magnetic posting
/ wallpaper variant for Chorus exclusively for the North American market - this
is expected to become a significant monthly revenue stream.
Geographically the Company's spread of business has become much more focussed
with the US business concentrating on Chorus and Gossyp with the UK focussing
on TierraFilmTM and NatureNetting. It is anticipated that the UK's focus will
be retained while US opportunities for TierraFilmTM Backlit and NatureNetting
will be developed later in 2013
Immediately after admission to AIM the Company embarked on an ambitious product
development and market development campaign with the subsequent increase in
overhead in particular in staff and product development costs as well as stock
holding. In the light of continued lower than expected sales, the directors
significantly reduced overhead throughout 2012 and are continuing to carefully
manage working capital. The directors are also actively managing the current
stock levels to bring them more into line with current trading.
FINANCIAL SUMMARY
Revenues for the year ended 31 July 2012 were £162k (2011: £30k). Operating
losses were £1,646k (2011: £480k).
On 22 May 2012 the Company announced that it raised £210,000 by way of an issue
of 21,000,000 new ordinary shares at a price of 1 pence per share. The proceeds
of this placing were used to provide additional working capital to the
business.
Included within the losses for the year are exceptional items amounting to £
868,088 relating to a write down of the carrying value of the subsidiaries in
the financial statements.
Cash and cash equivalent balances as at 31 July 2012 amounted to £27,639. The
Company is experiencing continued working capital constraints, which inhibit
faster levels of revenue growth and the board is reviewing various options to
raise further capital in tranches during in the coming months.
GENERAL MEETING
As at the date of this statement the Company's share price is trading below the
nominal value of its ordinary shares, therefore the directors are convening a
general meeting of the Company to seek, amongst other approvals, shareholder
authority to undertake a capital reorganisation, the effect of which will be to
subdivide each existing ordinary into an ordinary share of £0.001 and a
deferred share of £0.009.
Details of the capital reorganisation are set out in a circular that will
shortly be posted to all shareholders and will contain details of a proposed
placing of new ordinary shares to provide further working capital. This
fundraising should enable the company to settle all overdue creditors and
provide some working capital In the event that this fundraising is not
successful the future of the group may be in doubt.
DIRECTORATE CHANGES
Norman Fetterman, the former Non-executive Chairman resigned as a director of
the Company in March 2012, at which time I was appointed as Interim Executive
Chairman to guide the business through a particularly difficult period in its
evolution and to lead the fund raising that was completed in June, 2012. In
September, 2012 I stepped down as Executive Chairman but remain as a
non-executive director of the Company. While the Board is conscious of the need
to strengthen its executive team the financial integrity of the Company is at
this moment paramount and future appointments have been delayed until such time
as the Company grows and raises further funds.
Leslie Barber
31 January 2013
Consolidated Statement of Comprehensive Income
for the year ended 31 July 2012
Notes Year Ended Period 1.3.11
31.7.12 to 31.7.11
£ £
CONTINUING OPERATIONS
Revenue 1 161,597 30,054
Cost of sales (257,193) (37,688)
GROSS LOSS (95,596) (7,634)
Administrative expenses (1,550,550) (472,532)
OPERATING LOSS (1,646,146) (480,166)
Finance costs (6,669) (4,859)
Finance income - 250
LOSS BEFORE INCOME TAX (1,652,815) (484,775)
Income tax - -
LOSS FOR THE YEAR (1,652,815) (484,775)
OTHER COMPREHENSIVE INCOME - -
TOTAL COMPREHENSIVE INCOME (1,652,815) (484,775)
FOR THE YEAR
Loss attributable to: (1,652,815) (484,775)
Owners of the parent
Total comprehensive income (1,652,815) (484,775)
attributable to:
Owners of the parent
LOSS PER SHARE
BASIC AND DILUTED LOSS PER SHARE 2 0.0452 0.021
Consolidated Statement of Financial Position
at 31 July 2012
Notes 2012 2011
£ £
ASSETS
NON-CURRENT ASSETS
Goodwill - 868,088
Intangible assets 354,540 223,306
Property, plant and equipment 5,143 9,057
Investments - -
359,683 1,100,451
CURRENT ASSETS
Inventories 340,942 162,663
Trade and other receivables 111,551 98,313
Cash and cash equivalents 27,639 55,911
480,132 316,887
TOTAL ASSETS 839,815 1,417,338
EQUITY
SHAREHOLDERS' EQUITY
Called up share capital 5,574,070 5,200,348
Share premium 838,822 -
Merger reserve 1,157,850 1,157,850
Reverse acquisition reserve (4,602,402) (4,602,402)
Retained earnings (2,527,987) (875,172)
TOTAL EQUITY 440,353 880,624
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 323,351 536,714
Financial liabilities - borrowings 76,111 -
399,462 536,714
TOTAL LIABILITIES 399,462 536,714
TOTAL EQUITY AND LIABILITIES 839,815 1,417,338
Consolidated Statement of Cash Flows
for the year ended 31 July 2012
Notes Year Ended Period
31.7.12 1.3.11
£ to
31.7.11
£
Cash flows from operating
activities
Cash generated from operations (1,069,531) (313,559)
Interest paid (6,669) (4,859)
Net cash from operating (1,076,200) (318,418)
activities
Cash flows from investing
activities
Purchase of intangible fixed
assets
Purchase of intangible fixed (131,234) (28,006)
assets
Purchase of tangible fixed assets (1,412)) (6,921)
Acquisition of subsidiaries, net - 385,144
of cash
Interest received - 250
Net cash from investing (132,646) 350,467
activities
Cash flows from financing
activities
Amount introduced by directors 5,480 -
Amount withdrawn by directors (9,561) -
Share issue 269,722 10,334
Share premium 1,015,278 -
Share issue costs (176,456) -
Net cash from financing 1,104,463 10,334
activities
(Decrease)/increase in cash and (104,383) 42,383
cash equivalents
Cash and cash equivalents at 55,911 13,528
beginning of year
Cash and cash equivalents at end (48,472) 55,911
of year
NOTES
1. TURNOVER
As the Group operates in one business segment and as such this is the primary
reporting segment.
The Group's secondary segment is geographical. The segmental results by
geographical area as shown below.
Year Ended Period
31.7.12 1.3.11
£ to
31.7.12
£
Revenue
EU 112,438 16,817
Rest of world 61,337 13,237
173,775 30,054
2. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period.
Diluted earnings per share is calculated using the weighted average number of
shares adjusted to assume the conversion of all dilutive potential ordinary
shares.
Reconciliations are set out below.
Earnings 2012 Loss
£ Weighted per-share
amount
average
number of
shares
Basic EPS
Earnings attributable to
ordinary
shareholders (1,652,815) 36,584,449 0.0452
Effect of dilutive - - -
securities
Diluted EPS
Adjusted earnings (1,652,815) 36,584,449 0.0452
Basic EPS
Earnings attributable to (484,775) 23,373,726 0.021
ordinary shareholders
Effect of dilutive - - -
securities
Diluted EPS
Adjusted earnings (484,775) 23,373,726 0.021
3. REPORT AND ACCOUNTS
The audited report and accounts of the Company for the year to 31 July 2012
have today been posted to shareholders.
Enquiries:
Ceres Media International PLC Tel: 020 3178 5622
Leslie Barber
Nominated Adviser - Cairn Financial Advisers LLP Tel: 020 7148 7900
Liam Murray / Jo Turner
Broker - XCAP Securities plc Tel: 0207 101 7070
Jon Belliss / Adrian Kirk
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