RNS Number:7147L
Forever Broadcasting PLC
30 May 2003
Forever Broadcasting plc ("Forever" or the "Company")
Interim Results
Summary
* Turnover increased to #2.535m (2002: #1.852m) - up 37%
* Operating loss reduced to #2.413m (2002: #3.219m)
Adjusted* loss reduced to #0.509m (2002: #1.106m) - down 54%
* Further reduction in cost base
* Number of adult listeners up to 485,000 Q1 2003 RAJAR - up 35%
(Q1 2002 RAJAR 360,000 adults)
* Strong revenue growth maintained in April and May
* Strategic review process ongoing
Commenting on the results John Josephs Chairman of Forever Broadcasting plc
said:
"We have made substantial progress towards profitability since the beginning of
the financial year, delivering record revenues and audiences. I am grateful to
every one of our staff for their contribution to our improved performance in
difficult circumstances".
Enquiries:
Forever Broadcasting plc
John Josephs - Chairman 0191 286 0000
Robert W. Baird Limited, Nominated Adviser and Broker to Forever
Matt Davis 0207 488 1212
*Adjusted operating loss is before amortisation of goodwill, restructuring
costs, EGM costs, licence application costs and the write down in the value of
trade investments
Chairman's Statement
Despite the well documented advertising recession and difficult trading
conditions which have been exacerbated by the war in Iraq, we have made
significant progress towards profitability in the six months ended 31 March,
2003. Turnover, driven by growing audiences has risen by 37% and adjusted
operating losses reduced by 54%. All senior management and staff have made
their contribution to the company's continuing progress in difficult
circumstances.
Results
The turnover for the period was #2.535m (2002: #1.852m). The operating loss for
the period was #2.413m (2002: #3.219m). The adjusted operating loss for the
period was #0.509m (2002: #1.106m).
The adjusted operating loss is stated before amortisation of goodwill,
restructuring costs, EGM costs, licence application costs and the write down in
the value of trade investments.
The adjusted loss per share for the period was 3.0p (2002: 5.4p).
Operational Review
All five stations have made progress in recent months. Losses have been reduced
considerably in the two Juice stations and The Wolf, while Tower FM and Peak are
now making contributions to central costs.
Overhead costs during the period were #282,000 lower than last year, a reduction
of 12%. We have achieved greater savings than indicated when I wrote to you in
December and yet further overhead cost reductions will be made in the months
ahead. However, the benefit of these savings has been reduced by an increase in
the direct cost of sales mainly in the pre-Christmas period. Since then there
has been a steady improvement in operating margins.
The Company continues to operate within its overdraft facilities and to enjoy
the support of its bankers.
Sales
Turnover was 36.8% higher than during the corresponding period last year. This
performance should be seen in the context of revenue growth of only 2.5% in 2002
for the radio industry as a whole.
Our growth was all in local advertising revenue which during the period
accounted for over 90% of our turnover. Tower FM and Peak FM were particularly
strong, with growth of 77% and 48% respectively. In April and May, local
revenue has continued to be much stronger than last year.
National advertising revenue, which was lower than last year at 31 March 2003,
has recovered well in April and May and made good the shortfall.
Programming/Audience
Q1, 2003 RAJAR results published on 8 May 2003 showed growth in our audience for
the fifth successive RAJAR. We are now reaching 485,000 adults, 125,000 more
than a year ago. We now have more listeners than ever before in four of our
five stations, and they are listening in aggregate, for 1m more hours. This is
an excellent achievement by our programmers, and a critical precursor to
profitability.
Juice in Liverpool has increased its weekly reach by 85% in the last 12 months
to 152,000 adults, and in Bolton, Tower FM's reach has increased by 56% to
98,000 adults.
Strategic Review
On 20 September 2002 the Board initiated a strategic review of the options
available to the company to deliver value to shareholders. On 13 November 2002
we announced that the strategic review had been concluded and that the Board had
decided to commence discussions with potential investors. As part of this
process, Eric Lawrence (formerly Managing Director) was given leave of absence
to pursue an MBO of the Group. It was announced on 4 April 2003 that following
his inability to submit an offer capable of recommendation by the Independent
Directors, Eric had resigned to pursue his career outside of the Company. Eric
is a founder shareholder and had been Managing Director since January 2000, and
the Board wishes to place on record its appreciation for his contribution to the
company.
Since November the Board has evaluated a number of other proposals, including
the sale of the business or its constituent parts, and continues to do so.
As part of the strategic review process, the Board is continuing to reduce the
company's overhead cost base.
Outlook
The second half of the financial year has started well with significant revenue
growth, larger audiences and a reduced cost base. In April and May, revenues
were over 60% higher than last year. We have made considerable progress towards
profitability in recent months and are confident that this will be maintained in
the second half of the year.
J Josephs
Chairman
30th May 2003
Consolidated profit and loss account for the 6 months ended
31 March 2003
Unaudited Unaudited
6 months ended 6 months Audited
31 March ended Year ended
2003 31 March 30 September
#'000 2002 2002
#'000 #'000
Turnover
Continuing operations 2,535 1,852 3,802
Operating loss
Continuing operations (2,413) (3,219) (8,235)
Net interest payable (132) (46) (140)
Loss on ordinary activities before (2,545) (3,265) (8,375)
taxation
Tax on loss on ordinary activities - - -
Loss for the financial period (2,545) (3,265) (8,375)
Loss per share - basic 11.8p 15.2p 38.9p
Adjusted loss per share 3.0p 5.4p 10.6p
The group has no recognised gains or losses other than the loss above and
therefore no separate statement of total recognised gains and losses has been
presented.
"Adjusted" operating loss is calculated as follows:
#'000 #'000 #'000
Operating loss (2,413) (3,219) (8,235)
Amortisation of goodwill 1,854 1,860 3,709
Restructuring costs - 100 207
EGM costs 50 - -
Licence application costs - 153 183
Write down in valuation of trade investments - - 2,000
"Adjusted" operating loss (509) (1,106) (2,136)
The "adjusted" operating loss represents the underlying performance of the
business before the amortisation of goodwill, restructuring costs, EGM costs,
licence application costs and the write down in the valuation of trade
investments.
Consolidated balance sheet as at 31 March 2003
Unaudited Unaudited Audited
31 March 31 March 30 September
2003 2002 2002
#'000 #'000 #'000
Fixed assets
Goodwill 11,513 15,270 13,367
Tangible assets 545 677 584
Investments 610 2,748 485
12,668 18,695 14,436
Current assets
Debtors 1,151 941 965
Cash at bank and in hand - - -
1,151 941 965
Creditors: amounts falling due within one year (5,047) (2,832) (3,987)
Net current liabilities (3,896) (1,891) (3,022)
Creditors: amounts falling in more than one year (13) (390) (110)
Net assets 8,759 16,414 11,304
Capital and reserves
Called up equity share capital 10,759 10,759 10,759
Share premium account 10,656 10,656 10,656
Other reserves 4,834 4,834 4,834
Profit and loss account (17,490) (9,835) (14,945)
Equity shareholders' funds 8,759 16,414 11,304
Consolidated cash flow statement for the period ended
31 March 2003
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
31 March 31 March 30 September
2003 2002 2002
#'000 #'000 #'000
Net cash outflow from operating activities (627) (1,306) (2,230)
Returns on investments and servicing of finance
Interest received - - 5
Interest paid (160) (47) (133)
Net cash outflow from returns on investment and (160) (128)
servicing of finance (47)
Taxation - - -
Capital expenditure and financial investment
Purchase of trade investments (128) (280) (289)
Purchase of tangible fixed assets (50) (72) (106)
Sale of tangible fixed assets 4 - -
Net cash outflow from capital expenditure and
financial investment (174) (352) (395)
Acquisitions
Purchase of subsidiary undertakings - - 54
Net cash inflow from acquisitions - - 54
Cash outflow before financing (961) (1,705) (2,699)
Financing
Net proceeds from issue of equity share capital - - -
Capital element of finance lease repayments (11) (11) (34)
Increase in borrowings 501 - 399
Repayment of loans acquired with subsidiaries (2) (2) (3)
Net cash inflow/(outflow) from financing 488 (13) 362
Decrease in net cash (473) (1,718) (2,337)
1. Basis of reporting
The financial information for the 6 months ended 31 March 2003 and the 6 months
ended 31 March 2002 contained within this statement is unaudited and does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985. The financial information for the year ended 30 September 2002 is based on
the statutory accounts for the year then ended. Full accounts for that year, on
which the auditors made an unqualified report, have been delivered to the
Registrar of Companies and did not contain a statement under section 237(2) or
(3) of the Companies Act 1985.
The interim accounts have been prepared on the basis of the accounting policies
adopted for the year ended 30 September 2002, which are set out in the Company's
Annual Report.
2. Reconciliation of operating loss to net cash flow from operating activities
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
31 March 31 March 30 September
2003 2002 2002
#'000 #'000 #'000
Operating loss (2,413) (3,219) (8,235)
Depreciation of tangible fixed assets 137 133 273
Loss on sale of fixed assets 6 - 2
Amortisation of goodwill 1,854 1,860 3,709
Write down in valuation of trade investments - - 2,000
Decrease/(Increase) in debtors (156) 32 (4)
(Decrease)/Increase in creditors (55) (112) 25
Net cash outflow from operating activities (627) (1,306) (2,230)
3. Reconciliation of net cashflow to movement in net funds
Unaudited Unaudited
6 months 6 months Audited
ended ended Year ended
31 March 31 March 30 September
2003 2002 2002
#'000 #'000 #'000
Decrease in cash (473) (1,718) (2,337)
495)
Debts (issued)/repaid (488) 13 (362)
Other non-cash changes - (39) (54)
Movement in the period (961) (1,744) (2,753)
Net (debt)/funds at the start of the period (3,057) (304) (304)
Net (debt)/funds at the end of the period (4,018) (2,048) (3,057)
4. Analysis of net debt
30 September Cashflow Other non-cash 31 March
2002 changes 2001 2003
#'000 #'000 #'000 #'000
Overdraft (2,602) (473) - (3,075)
Loan notes: due within one year (12) - - (12)
Other loans:
Due within one year (399) (501) - (900)
Due in more than a year - - -
Bank loans:
Due within one year (3) 2 - (1)
Due in more than a year - - - -
Finance leases:
Due within one year (20) 11 (8) (17)
Due in more than a year (21) - 8 (13)
Net debt (3,057) (961) - (4,018)
5. Loss per share
The basic loss per 50p ordinary share has been calculated based on the loss
after taxation of #2,545,000 (2002: #3,265,000) and 21,519,225 (2002:
21,519,225) ordinary shares, being the weighted average number of ordinary
shares in issue during the period.
The adjusted loss per share has been calculated based on the loss after taxation
of #641,000 (2002: #1,152,000), which is before amortisation of goodwill,
restructuring costs, EGM costs and licence application costs, and upon
21,519,225 (2002: 21,519,225) ordinary shares, being the weighted average number
of ordinary shares in issue.
6. Tax on loss on ordinary activities
No liability arises for UK corporation tax as a result of losses incurred during
the period.
7. Equity shareholders' funds
#'000
At 1 October 2002 11,304
Loss for the financial period (2,545)
At 31 March 2003 8,759
This information is provided by RNS
The company news service from the London Stock Exchange
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