Interim Results
September 29 2003 - 3:00AM
UK Regulatory
RNS Number:2475Q
Vitesse Media PLC
29 September 2003
VITESSE MEDIA PLC
Interim Results for the six months ended 31 July 2003
Vitesse Media Plc, the AIM-listed print and on-line publisher in the enterprise
sector, announces its results for the six months ended 31 July 2003.
Overview
* Revenues up 5.9% to #948,000 (2002: #895,000)
* Pre-tax profits on continuing activities up to #30,000 (2002: loss of #51,000)
* Cash at bank and in hand was #279,000 at 31 July and #324,000 at 31 August
(31 July 2002: #446,000)
* Revenues from business and tax products continue to increase
* Ideally positioned to take advantage of improving market conditions
* Active negotiations with several acquisition targets
Chairman's Statement
Business Overview
I am pleased to report a small pre-tax profit of #30,000 on continuing
activities (2002: loss of #51,000) and increased revenues of #948,000 (2002:
#895,000) for the six months to 31 July. I think it worth pointing out that the
Group has never failed to increase its revenues despite enduring a savage
three-year bear market and an equally difficult background for media companies
in the business area.
We have continued to invest in the development of new products and have also
husbanded our cash resources well. I would like to thank the efforts of a very
dedicated, hard-working and committed staff in achieving these objectives.
Business products
Revenues from our business products are up 33% compared to last year and
continue to grow.
Our web site www.smallbusiness.co.uk continues to be very profitable, although
slightly down on budget for the first six months due to an almost complete
change in personnel. However, the new team has now become an integral part of
the Group and we expect revenues to be back on target for the rest of the year.
Business XL continues to make progress despite advertising revenues for the UK
business magazine sector being nearly 8% lower than a year ago. Apart from the
traditionally difficult summer edition, issues continued to make a small, but
positive contribution to overheads. Plans are underway for the magazine to go to
10 issues next year.
Individual copies of the Lloyds TSB Small Business Guide sold well and
importantly our in-house and freelance sales team generated more sales than in
any previous year when Penguin Books marketed the guide. The new edition has
just been launched and we are optimistic that we will be able to do better
still. We gain much higher gross margins on books sold directly from us rather
than through bookshops. This year we raised this figure to 12% and plan to
increase that figure going forward.
Database sales also picked up in July following slower sales for the first few
months of the year, and we expect improvement to be maintained for the rest of
the year.
Tax products
Revenues were up by 8.5%, but individual sales of the Lloyds TSB Tax Guide were
slightly down on budget. We will work hard to make up the shortfall at the tax
accounting deadlines; September 30 and January 31. Again, a large proportion of
sales are sold direct, which is better for us as they have much higher margins
than those sold through bookshops.
Investment products
We have continued to attract new subscribers on a cash positive basis all the
way through the bear market, but these have not replaced those lost through
disillusionment with the stock market. Therefore as expected, Growth Company
Investor was down 15 per cent compared to the same time last year. However, in
July the numbers of new subscribers picked up and for the past several weeks our
overall subscriber levels have increased, the first time for the last three
years.
Although we anticipate an increase in subscriptions, our accounting treatment of
subscription income and related marketing costs is very prudent and
conservative. Costs of bringing on a new subscriber are taken up front, while
revenue from the subscription income is spread over the next twelve months.
Thus, if a new subscriber pays us #100 in December 2003 and it has cost us #50
to bring on that subscriber, our accounts to 31 January will reflect just #16.66
of that new income but will include all #50 of that cost. The effect of bringing
on significant new subscriptions between now and the year end will have little
positive impact on our revenues and will worsen our bottom line performance, but
should deliver more cash and will underpin our growth next year.
Outlook
We are encouraged by the change in the stock market climate. Not only does it
provide a benefit in the future for income, but it also means there is more
activity in the adviser community, which in turn should feed through to us in
advertising and sponsorship. We now just need an upturn in business advertising,
which would mean that for the first time in three years, all our products and
services would be sold in a favourable rather than an adverse climate.
Additionally, we have weathered the early stages of most of our product
developments and they are poised for big increases in revenues.
We continue to seek expansion opportunities and have looked at several potential
acquisitions during the last few months. We are in negotiations with several
companies, which we believe would complement our existing publications and hope
the outcome will be satisfactory. Overall, I am very pleased with our progress
and I am optimistic for 2004 and 2005.
Sara Williams
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE SIX MONTHS ENDED 31 JULY 2003
Unaudited 6 months ended Unaudited 6 Audited 12 months ended
31-Jul-03 months ended 31-Jan-03
#'000s 31-Jul-02 #'000s
#'000s
Continuing Discontinued Continuing & Continuing Discontinued
Operations Operations Total Total Operations Operations Total
Operations
TURNOVER 948 12 960 895 1490 12 1502
Cost of sales (284) (6) (290) (263) (438) (11) (449)
Gross profit 664 6 670 632 1052 1 1053
Administrative (13) (14) (27) - (69) - (69)
expenses -
exceptional
- other (621) (20) (641) (683) (1314) (34) (1348)
OPERATING PROFIT/ 30 (28) 2 (51) (331) (33) (364)
(LOSS)
Interest 4 - 4 7 13 - 13
receivable and
similar income
Interest payable (4) - (4) (6) (11) - (11)
and similar changes
PROFIT/(LOSS) ON 30 (28) 2 (50) (329) (33) (362)
ORDINARY
ACTIVITIES
BEFORE TAXATION
Taxation (2) - (2) - - - -
PROFIT/(LOSS) ON
ORDINARY
ACTIVITIES
AFTER TAXATION 28 (28) - (50) (329) (33) (362)
EARNINGS/(LOSS)
PER SHARE
Basic 0.00p (0.38p) (2.79p)
Diluted 0.00p (0.38p) (2.79p)
CONSOLIDATED BALANCE SHEET 31-JUL-03
Unaudited Unaudited Audited
31-Jul-03 31-Jul-02 31-Jan-03
#'000s #'000s #'000s
FIXED ASSETS
Intangible assets 653 653 653
Tangible assets 77 133 83
----------- --------- --------
730 786 736
----------- --------- --------
CURRENT ASSETS
Debtors 343 479 241
Cash at bank and in hand 279 446 402
----------- --------- --------
622 925 643
CREDITORS: Amounts falling due within one
year (382) (290) (312)
----------- --------- --------
NET CURRENT ASSETS 240 635 331
----------- --------- --------
TOTAL ASSETS LESS CURRENT LIABILITIES 970 1,421 1,067
CREDITORS: Amounts falling due after more
than one year (43) (103) (60)
DEFERRED INCOME (197) (275) (277)
----------- --------- --------
NET ASSETS 730 1,043 730
=========== ========= ========
CAPITAL AND RESERVES
Called up share capital 1,299 1,299 1,299
Share premium account 901 901 901
Other reserves 104 104 104
Profit and loss account (1,574) (1,261) (1,574)
----------- --------- --------
EQUITY SHAREHOLDERS' FUNDS 730 1,043 730
=========== ========= ========
CONSOLIDATED CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 31 JULY 2003
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31-Jul-03 31-Jul-02 31-Jan-03
#'000s #'000s #'000s
Cash flow from operating
activities (93) (28) (14)
Returns on investments and
servicing of finance - 1 2
Taxation - - -
Capital expenditure (10) (25) (69)
----------- ----------- -----------
CASH OUTFLOW BEFORE USE OF LIQUID
RESOURCES AND FINANCING (103) (52) (81)
Management of liquid
resources 13 43 199
Financing (20) (6) (21)
----------- ----------- -----------
INCREASE/(DECREASE) IN
CASH IN THE PERIOD (110) (15) 97
=========== =========== ===========
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Unaudited Unaudited Audited
6 months 6 months 12 months
ended ended ended
31-Jul-03 31-Jul-02 31-Jan-03
#'000s #'000s #'000s
Increase/(decrease) in
cash in the period (110) (15) 97
Cash outflow from
decrease in debt and
lease financing 20 6 21
Cash inflow from change
in liquid resources (13) (43) (199)
---------- ----------- -----------
MOVEMENT IN NET FUNDS IN
PERIOD (103) (52) (81)
OPENING NET FUNDS 303 384 384
---------- ----------- -----------
CLOSING NET FUNDS 200 332 303
========== =========== ===========
NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 JULY 2003
Notes:
1. The financial information for each of the six month periods to 31 July is
unaudited and does not constitute statutory accounts within the meaning of the
Companies Act 1985. The financial information for the period ended 31 January
2003 has been extracted from the Group's statutory accounts for that year. These
contained an unqualified audit report which did not contain a statement under
section 237 (2) or (3) Companies Act 1985 and have been filed with the Registrar
of Companies.
2. Discontinued operations comprise Vitesse Business Events which was based in
Brighton. The office was closed and the activities ceased in April 2003. There
were no discontinued activities in the six months to 31 July 2002 as they did
not commence until the second half of the year.
3. Exceptional administrative expenses in the period ended 31 July 2003 comprise
redundancy costs.
4. The Directors do not intend to pay an interim dividend.
5. The taxation charge relates to withholding tax on overseas income.
6. The basic profit per share is 0.00p (six months to 31 July 2002 - loss per
share 0.38p) is based on the profit for the period, divided by the weighted
average number of ordinary shares in issue of 12,992,844 (6 months to 31 July
2002 -12,992,844). The diluted earnings (loss) per share is identical to the
basic earnings (loss) per share as the exercise of share options is
non-dilutive.
7. The accounting policies remain unchanged from those set out in the group's
statutory accounts for the year ended 31 January 2003.
8. The interim financial statements were approved by the Board on 29 September
2003.
9. Copies of the interim statement will be sent to Shareholders on 29 September.
Further copies will be available from the Company's nominated adviser KBC Peel
Hunt (4th Floor, 111 Old Broad Street, London, EC2N 1PH).
This information is provided by RNS
The company news service from the London Stock Exchange
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