RNS Number:9084R
Forever Broadcasting PLC
11 November 2003
Year Ended 30 September 2003
Unaudited Preliminary Announcement of Results
Highlights
* Significant progress achieved towards profitability
* Strategic review: Disposal of Juice Stations completed
* Revenues from continuing operations increased by 48% to #3.7m (2002:
#2.5m)
* Operating loss reduced to #4.6m from #8.2m
* Adjusted operating losses from continuing operations reduced to #0.4m,
after deduction of central costs (2002: #1.2m)
* Substantially improved financial position; net debt at the year end
reduced to #0.5m
* Advertising spend beginning to recover
Commenting on the results John Josephs said:
"Despite difficult market conditions we have made significant progress towards
profitability, and implementing the conclusions of our strategic review."
Enquiries:
John Josephs (Forever Broadcasting) - 07718 752 056 (until 13.00)
Matt Davis (Robert W. Baird) - 0207 488 1212
Chairman's Statement
Overview
During the year to 30 September we have made significant progress along the path
to profitability and in implementing the conclusions of the strategic review
through the disposal of the two loss making Juice stations and the 35% stake in
Splash FM. The Juice stations showed substantially improved performance, which
allowed the Group to realize net proceeds of #3.5m, which have been utilised to
reduce the Group's indebtedness. The continuing operations at Tower, Wolf and
Peak have also shown significantly improved results, were in aggregate
profitable, and contributed to central costs during the year.
Results for the Year
The Juice disposals were completed at the end of September 2003 and therefore
the published results for the group for the year to 30 September include all
five stations.
Turnover for the year was #5.4m (2002: #3.8m), an increase of 42%. The
resultant loss for the year was #4.8m (2002: #8.4m loss), which includes a full
year's goodwill amortisation charge. The adjusted net loss (excluding goodwill
amortisation and exceptionals) substantially reduced to #0.7m (2002: #2.1m
loss). Turnover from continuing operations rose 48% to #3.7m (2002: #2.5m) and
the adjusted operating loss from continuing operations reduced to #0.4m (2002:
#1.2m loss). The basic loss per share was 22.2p per share (2002: 38.9p per
share) and the adjusted loss per share was 4.5p per share (2002: 10.6p per
share).
No dividend is being recommended by the Board (2002: nil).
Operational Review
In the Interim Report published in May we stated we had made "significant
progress since the beginning of the financial year towards profitability". This
progress was maintained throughout the second half and resulted in the Group
trading profitably, before amortisation and interest, in August and September
for the first time since its listing in August 2000. At this level the results
of the continuing operations encompassing Tower, Wolf and Peak showed an
aggregate profit (prior to central costs) for the year of over #0.2m (2002:
#0.4m loss).
This encouraging improvement has been achieved despite a highly competitive
trading environment driven by the continuing constraints on advertising
expenditure. Overall the Radio Advertising Bureau recorded industry growth of
3.3% for the year ended 30 June. In the year ended 30 September we achieved
growth of 48% in revenues at the three continuing stations. In the second half
of the year we saw the first signs of an improvement in the climate for national
advertising.
Underpinning the revenue growth has been another year of growth in our listening
audience. Overall we achieved a 9% increase in the continuing stations with
audiences currently of 86,000 at Tower, 66,000 at Wolf and 126,000 at Peak. We
now utilise the same format in all 3 stations, the "50/50 music mix", creating
considerable synergy enabling us to produce better quality programmes more
efficiently.
We applied constant pressure to reduce central costs and continue to do so.
During the year we were successful in reducing the overhead cost base by
approximately #0.6m.
The net proceeds from the disposals have been applied to repay the Directors'
Loans of #0.9m, as required by the terms of the Syndicated Loan Agreement, and
to reduce the bank debt at the year end to approximately #0.5m. Since the year
end the Company has entered into a revised agreement with its bankers to provide
an overdraft facility of #1.5m, which the Board believes is more than adequate
for the Company's present requirements.
The Board, Management and Staff
The need to manage the ongoing business in difficult trading conditions whilst
simultaneously seeking to implement the conclusions of the Strategic Review has
placed a heavy additional burden on everyone in the business. The Board would
like to express its appreciation for the efforts of our staff, all of whom have
contributed to the significant progress made during the year.
I also would like to place on record my appreciation of the exceptional support,
encouragement and advice given throughout the year by the Non-Executive
Directors, Denis Cassidy and John Whitney.
The Board announced on 4 April 2003 that Eric Lawrence, who in November 2002 had
been given leave of absence to pursue a potential buy-out of the group, had
resigned to seek a career outside the company. We wish him well.
Future Prospects
We have entered the 2003-04 trading year in a much stronger financial position
with clear signs that advertising spend is beginning to recover and with an
encouraging level of forward bookings demonstrating continuing momentum in
revenue growth.
In this new financial year the Board is confident that it will be able to build
upon the achievements of the year just ended, during which the continuing
stations, Tower, Wolf and Peak were in aggregate profitable, cash generative and
contributing to central overheads. With a single programme format across these
three stations, we are now well positioned to build efficiently upon the
significant growth in audiences achieved over the last 3 years.
We believe therefore that the opportunity to create and deliver shareholder
value is much improved as we seek to complete the implementation of the findings
of the strategic review process.
John Josephs
Chairman
11 November 2003
Unaudited consolidated profit and loss account for the year ended 30 September
2003
Unaudited Unaudited Unaudited Unaudited Unaudited
Continuing Discontinued Total Continuing Discontinued Total
2003 2003 2003 2002 2002 2002
2003
Note #'000 #'000 #'000 #'000 #'000 #'000
Turnover 3,657 1,722 5,379 2,482 1,320 3,802
Administrative and selling
expenses
Trading administrative and (4,178) (2,075) (6,253) (4,044) (2,284) (6,328)
selling expenses
Goodwill amortisation (2,547) (1,159) (3,706) (2,547) (1,162) (3,709)
Impairment of trade - - - (2,000) - (2,000)
investments
(6,725) (3,234) (9,959) (8,591) (3,446) (12,037)
Operating loss (3,068) (1,512) (4,580) (6,109) (2,126) (8,235)
Profit on sale of investments 112 -
Loss on disposal of (21) -
subsidiaries
Interest receivable and similar - 5
income
Interest payable and similar (279) (145)
charges
Loss on ordinary activities (4,768) (8,375)
before taxation
Tax on loss on ordinary - -
activities
Loss for the financial year (4,768) (8,375)
Loss per share - basic 1 22.2p 38.9p
Adjusted loss per share 1 4.5p 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.
There is no difference between loss on ordinary activities before taxation and
the loss for the financial year stated above and their historical cost
equivalents.
Adjusted operating loss is calculated Unaudited Unaudited Unaudited Unaudited Unaudited
as follows: Continuing Discontinued Total Continuing Discontinued Total
2003 2003 2003 2002 2002 2002
#'000 #'000 #'000 #'000 #'000 #'000
Operating loss (3,068) (1,512) (4,580) (6,109) (2,126) (8,235)
Amortisation of goodwill 2,547 1,159 3,706 2,547 1,162 3,709
Restructuring costs 132 57 189 130 77 207
Licence application costs - - - 183 - 183
Write-down in valuation of trade - - - 2,000 - 2,000
investments
Adjusted operating loss (389) (296) (685) (1,249) (887) (2,136)
The adjusted operating loss represents the non-statutory performance of the
business before the amortisation of goodwill, restructuring costs, licence
application costs and the write down in the valuation of trade investments.
Unaudited consolidated balance sheet as at 30 September 2003
Unaudited
Group Group
2003 2002
Note #'000 #'000
Fixed assets
Goodwill 6,770 13,367
Tangible assets 203 584
Investments 473 485
7,446 14,436
Current assets
Debtors 951 965
Cash at bank and in hand - -
951 965
Creditors: amounts falling due within one year
(1,861) (3,987)
Net current (liabilities)/assets (910) (3,022)
Total assets less current liabilities 6,536 11,414
Creditors: amounts falling due in more than one year - (110)
Net assets 6,536 11,304
Capital and reserves
Called up equity share capital 10,759 10,759
Share premium account 10,656 10,656
Other reserves 4,172 4,834
Profit and loss account (19,051) (14,945)
Equity shareholders' funds 5 6,536 11,304
Unaudited consolidated cash flow statement for the year ended 30 September 2003
Unaudited Unaudited
2003 2003 2002 2002
Note #'000 #'000 #'000 #'000
Net cash outflow from operating activities 2 (747) (2,230)
Returns on investments and servicing of finance
Interest received - 5
Interest paid (299) (133)
Net cash outflow from returns on investment and
servicing of finance (299) (128)
Capital expenditure and financial investment
Purchase of trade investments (129) (289)
Sale of trade investments 250 -
Purchase of tangible fixed assets (86) (106)
Sale of tangible fixed assets 8 -
Net cash inflow/(outflow) from capital
expenditure and financial investment 43 (395)
Acquisitions and disposals
Purchase of subsidiary undertakings - 54
Disposal of subsidiary undertakings 3,550 -
Net cash inflow from acquisitions & disposals 3,550 54
Cash inflow/(outflow) before financing 3,4 2,547 (2,699)
Financing
Capital element of finance lease repayments (41) (34)
Repayment of loans (915) (3)
Increase in borrowings 501 399
Net cash (outflow)/ inflow from financing (455) 362
Increase/(decrease) in net cash 3,4 2,092 (2,337)
Notes to the financial statements
for the year ended 30 September 2003
1. Loss per share
The basic loss per 50p ordinary share has been calculated based on the loss
after taxation of #4,768,000 (2002: #8,375,000) 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 adjusted loss after
taxation of #964,000 (2002: #2,276,000) and upon 21,519,225 (2002: 21,519,225)
ordinary shares, being the weighted average number of ordinary shares in issue
as shown in the table below:
Unaudited 2002
2003
Earnings Earnings
per share per share
Pence #'000 Pence #'000
Loss after taxation (22.2) (4,768) (38.9) (8,375)
As adjusted for:
Goodwill amortisation 17.2 3,706 17.2 3,709
Restructuring costs 0.9 189 1.0 207
Licence application costs - - 0.9 183
Impairment of investments - - 9.2 2,000
Net profit on sale of investments /
subsidiaries (0.4) (91) - -
Adjusted loss per share (4.5) (964) (10.6) (2,276)
2. Reconciliation of operating loss to net cash outflow from operating
activities
Unaudited
2003 2002
#'000 #'000
Operating loss (4,580) (8,235)
Depreciation of tangible fixed assets 269 273
Loss on sale of fixed assets 7 2
Amortisation of goodwill 3,706 3,709
Write down in valuation of trade investments - 2,000
Increase in debtors (497) (4)
Increase in creditors 348 25
Net cash outflow from operating activities (747) (2,230)
3. Reconciliation of net cash flow to movement in net funds
Unaudited
2003 2002
#'000 #'000
Increase/(decrease) in cash 2,092 (2,337)
Debts repaid/(issued) 455 (362)
Other non-cash changes - (54)
Movement in the year 2,547 (2,753)
Net debt at the start of the year (3,057) (304)
Net debt at the end of the year (510) (3,057)
4. Analysis of net debt
At Unaudited Unaudited at
30 September Non-cash Unaudited 30 September
2002 changes Cashflow 2003
#'000 #'000 #'000 #'000
Overdrafts (2,602) - 2,092 (510)
Loan notes: due within one year (12) - 12 -
Directors' loans: due within one year (399) - 399 -
Bank loans due: within one year (3) - 3 -
in more than one year - - - -
Finance leases due: within one year (20) - 20 -
in more than one year (21) - 21 -
Net debt (3,057) - 2,547 (510)
5. Reconciliation of movements in equity shareholders' funds
Unaudited
2003 2002
#'000 #'000
At start of the year 11,304 19,679
Loss for the financial year (4,768) (8,375)
Equity shareholders' funds at the end of the year 6,536 11,304
The financial information set out above does not constitute financial statements
within the meaning of the Companies Act 1985. The figures in the preliminary
announcement have been taken from the group's draft financial statements for the
year ended 30 September 2003, which will be finalised on the basis of the
financial information presented by the directors in this preliminary
announcement and will be delivered to the Registrar of Companies following the
Annual General Meeting. The results for the year ended 30 September 2002 have
been extracted from the published accounts, which have been filed with the
Registrar of Companies, and on which the auditors gave an unqualified opinion.
Copies of the Company's Annual Report will be sent to shareholders in December
and will be available thereafter for members of the public at the Company's
registered office at 4 Osborne Road, Jesmond, Newcastle upon Tyne, NE2 2AA.
The Annual General Meeting will be held on 30 January 2004 at 5 Osborne Road,
Jesmond, Newcastle upon Tyne, NE2 2AA.
This information is provided by RNS
The company news service from the London Stock Exchange
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