RNS Number:2267Q
New Media Industries PLC
26 September 2003
NEW MEDIA INDUSTRIES PLC
Results for year ended 30 April 2003
* Turnover from continuing operations falls to #23.5m (2002: #31.5m)
* Operating loss from continuing operations but before exceptionals,
impairment and amortisation of goodwill of #0.86m (2002: #0.3m profit)
* Loss before taxation of #3.4m (2002: #0.9m)
* Post year end, company successfully refinances balance sheet by raising
#1.5m before costs of #130,000
* Turnover levels for first quarter of current year up over 90%, compared
with same period last year
Martin Boase, chairman of NMI, commented:
"Harsh economic conditions and client budgetary constraints have had a
particularly negative impact on our trading results for the year ended 30 April
2003. Both turnover and profitability were well down on last year, largely
because Target NMI, the group's media arm, which specialises in cinema and
leisure promotion, had many of the film / video and other new releases delayed
until after the end of the year being reported on.
"However, with further management cuts and hard work the Group has survived and
our client base is now increasing with a number of significant business wins
including BNFL and Laing & Cruickshank. More fundamentally, a new long term
investor base has taken up the Group's recent issue of new shares (in May to
July 2003) and we have thereby successfully recapitalised the Group's balance
sheet. New banking arrangements have been negotiated such that the Group now has
substantial funds in place."
Further Information:
Jon Summerill - CEO
Tel: 0207 436 5000
Email: jon@nmigroup.com
Paul Nathan - Group Managing Director
Tel: 0207 436 5000
Email: paul@nmigroup.com
NEW MEDIA INDUSTRIES PLC
Results for year ended 30 April 2003 (Continued)
Introduction
Despite tough trading conditions, which are reflected in our results, we have
taken considerable steps to strengthen the Group's financial position.
The extent of re-engineering of the Group, is reflected both on and off the
balance sheet and follows a strategy of seeking to ensure that the business can
take advantage of more liberal economic conditions when they arise.
I am pleased to report that across our exceptionally diverse client base,
encompassing over 40 businesses, we have succeeded in retaining most of our
relationships. These invariably, given market conditions, are subject to
pressures from a reduction in overall spend, combined with a desire to obtain
increasing value from the residual spend.
In addition, we have continued to acquire new clients from our New Business
efforts including BNFL and Laing and Cruickshank.
Finally, I am pleased to announce that during the first quarter of the new
financial year, our unaudited management accounts show that turnover rose by
over 90% over the equivalent period last year, from 3.7m during 3 months to July
2002 to over #7m during the 3 months to July 2003.
Financial Results
During the year, total turnover decreased by 25% to #23.7m (2002: #31.5m), and
therefore the Group incurred significant trading losses. Operating losses from
continuing operations and before exceptional items, amortisation and impairment
of goodwill amounted to #0.86m (2002: #0.29m profit). Including discontinued
operations, the operating loss before exceptional items, amortisation and
impairment of goodwill amounted to #1,065m.
Due to the losses incurred in the year, the directors performed a full
impairment review on the goodwill associated with all its continuing activities.
The directors came to the opinion that the goodwill on all but one of its
acquisitions was impaired. The impairment led to a charge of #1.15m in the
profit and loss account. The Group's loss for the year after goodwill
amortisation, impairment of goodwill and exceptional items amounted to #3.4m
(2002: #0.9m loss)
During the year, the directors decided to liquidate its post production
facility, NMI Moving Image Ltd, due to the drop in broadcast related revenues
and significant losses in the first quarter. This led to a write off of fixed
assets and goodwill, amounting to #0.7m. The company ceased to trade in October
2002.
NEW MEDIA INDUSTRIES PLC
Results for year ended 30 April 2003 (Continued)
Refinancing
The directors are also pleased to announce that since the year-end, the company
has successfully refinanced the balance sheet. During the year, the Group's
cashflow came under intense pressure due to shortening credit terms with its
major suppliers. The directors therefore developed a refinancing plan to deal
with the change in terms.
On 7th May 2003, the company negotiated new debt facilities providing increased
liquidity. The group now has access to debt facilities of up to #3m, the
majority of which typically remains unutilised.
These increased facilities allowed the company to raise significant new capital.
The following share issues have occurred since 30 April 2003:
Date Shares Issued Funds raised
Number #
19th May 2003 6,929,070 175,726
24th June2003 49,870,930 1,246,773
1st July 2003 2,000,000 50,000
4th July 2003 1,000,000 25,000
_________ _________
Total 59,800,000 1,497,499
_________ _________
In the raising of this #1.5m, costs of approximately #130,000 were incurred.
This refinancing would have had an extremely beneficial effect on the
consolidated balance sheet as at 30 April 2003 and if the money had been raised
as at that date, equity shareholder funds would have amounted to approximately
#2.71m.
The directors believe that this investment has set the platform for future
organic growth. It was the board's key objective throughout the last 12 months
to achieve this strengthening, and therefore begin the new year in a more stable
position.
Business Unit Review
Interactive:
The Interactive unit has just completed a re-launch of a Procter & Gamble
careers website to universal acclaim from the client, and our relationship
continues to go from strength to strength.
Furthermore, following the appointment by British Nuclear Fuels of our Solutions
unit - a number of Internet projects are underway for this Client.
NEW MEDIA INDUSTRIES PLC
Results for year ended 30 April 2003 (Continued)
In addition, the Interactive team continue to make a substantial contribution to
building and maintaining our in-house systems, and the increasing deployment of
bespoke Extranets, for companies such as Boots Group, enhancing productivity and
value internally and providing additional services to our Clients.
Production:
Development has occurred across two fronts; winning more business and evolving
the way in which we handle it.
Clients such as adidas, Coty and Vodafone, continue to show confidence in NMI by
centralising more work through us. We currently operate for adidas in 34
countries and Vodafone in 31 countries.
In line with a commitment to offer unparalleled service and value, we are
developing a new unit allied to Production, which will be fully digital. NMI '
in-a-box' will offer Clients the opportunity to brief a 100% digital system that
will manage every step of the Production process, without need for film or
reprographics.
This service will offer both added value to our current Clients, and afford the
Sales team an extremely competitive edge, to bring on board new Clients.
Solutions:
This unit, covering advertising above and below the line, has made rapid
progress, with a number of New Business wins and more work from existing
Clients, strengthening its branding and broadcast expertise.
BNFL has appointed Solutions to help reposition the company. Since our
appointment BNFL have briefed us outside of advertising and communications,
resulting in a number of ongoing Internet projects.
Capitalising on our Corporate expertise, we were appointed by SunGard - a leader
in integrated software and processing solutions - to develop a new advertising
campaign, and by Laing & Cruickshank Investment Management to create their first
advertising and branding Campaign.
Our relationship with Emap continues to flourish with work across Emap Elan, and
new briefs from Emap Performance. We successfully pitched, against tough
competition, for the return to TV of FHM, and created two ads backed by a heavy
burst of TV for 'High Street Honeys'.
Target:
After a drop in Media Billings, partly caused by the closure of Film 4 by its
parent company, the Media department has started to make a recovery, based on
retention of its Client base, combined with New Business.
NEW MEDIA INDUSTRIES PLC
Results for year ended 30 April 2003 (Continued)
The Group faced issues connected to the volatility in Media expenditure,
combined with an increasing exposure to credit risks from some of the Film and
Games Clients. We have strong evaluation and risk assessment systems in place,
our continued exposure to this market has meant we are continuing to exercise a
high degree of caution on credit control.
Target continues to develop its Client base, with New Business from companies
such as Empire Interactive, Future Publishing and Konami, the latter two
resulting in Solutions being commissioned to produce TV campaigns.
In addition Target was appointed by Time Life Entertainment, resulting in a
range of projects to be completed during the 2003/04 financial year.
Martin Boase
Chairman
26 September 2003
Preliminary announcement of the unaudited results for the year ended 30 April
2003
NEW MEDIA INDUSTRIES PLC
Unaudited consolidated profit and loss account for the year ended 30 April 2003
Unaudited Unaudited
Continuing Discontinued Unuaudited
Operations Operations Total Audited
Year ended Year ended Year ended Year ended
Note 30 April 30 April 30 April 30 April
(as restated)
2003 2003 2003 2002
# # # #
Turnover 23,481,725 232,877 23,714,602 31,458,128
Cost of sales (17,953,783) (78,512) (18,032,295) (24,376,473)
__________ __________ __________ __________
Gross profit 5,527,942 154,365 5,682,307 7,081,655
Administrative expenses (7,901,201) (1,055,717) (8,956,918) (7,065,245)
Operating (loss)/profit before goodwill
amortisation, impairment and
exceptional items (860,725) (204,017) (1,064,742) 292,206
Goodwill amortisation (154,135) - (154,135) (162,609)
Impairment of goodwill (1,150,986) (159,566) (1,310,552) -
Exceptional items (207,413) (537,769) (745,182) (113,187)
Operating (loss)/profit (2,373,259) (901,352) (3,274,611) 16,410
Reorganisation costs - - - (569,295)
Provision against fixed asset investments - - - (200,000)
__________ __________ __________ __________
Loss before interest and taxation (2,373,259) (901,352) (3,274,611) (752,885)
Interest receivable 1,830 647
Interest payable and similar charges (103,039) (104,547)
__________ __________
Loss on ordinary activities before
taxation (3,375,820) (856,785)
Taxation on loss on ordinary activities 2 (24,528) (34,089)
__________ __________
Loss for the financial year (3,400,348) (890,874)
__________ __________
(Loss)/earnings per share 4
Basic (4.591)p (1.579)p
Diluted (4.591)p (1.579)p
Pro-forma (1.607)p 0.273p
All recognised gains and losses are included in the profit and loss account.
Preliminary announcement of the unaudited results for the year ended 30 April
2003
NEW MEDIA INDUSTRIES PLC
Unaudited consolidated balance sheet at 30 April 2003
Unaudited Audited
At 30 April At 30 April
Note 2003 2002
# # # #
Fixed assets
Intangible assets 1,539,612 3,004,299
787,259 1,354,081
__________ __________
2,326,871 4,358,380
Current assets
Stocks 188,678 252,811
Debtors 4,397,720 6,808,436
Cash at bank and in hand 24,003 940,569
__________ __________
4,610,401 8,001,816
Creditors: amounts falling due
within one year (5,555,032) (7,643,175)
__________ __________
Net current (liabilities)/assets (944,631) 358,641
__________ __________
Total assets less current liabilities 1,382,240 4,717,021
Creditors: amounts falling due
after more than one year (33,833) (19,267)
---- ----
1,348,407 4,697,754
__________ __________
Capital and reserves
Called up share capital 778,366 702,907
Shares to be issued 50,000 442,166
Share premium account 3,292,079 3,292,079
Merger reserve 1,916,580 1,587,728
Profit and loss account (4,688,618) (1,327,126)
__________ __________
Shareholders' funds - equity interests 1,348,407 4,697,754
__________ __________
Preliminary announcement of the unaudited results for the year ended 30 April
2003
NEW MEDIA INDUSTRIES PLC
Unaudited consolidated cash flow statement for the year ended 30 April 2003
Unaudited Audited
Note 2003 2002
# # # #
Net cash (outflow)/inflow from
operating activities (821,262) 1,366,504
Returns on investments and servicing
of finance
Interest received 1,830 647
Interest paid and interest element of finance
lease rental payments (93,928) (104,547)
__________ __________
Net cash outflow from returns on
investment and servicing of finance (92,098) (103,900)
Taxation
UK corporation tax (paid)/recovered (126,416) 93,189
Capital expenditure and financial investment
Purchase of tangible fixed assets (106,338) (326,078)
Acquisitions
Purchase of subsidiary undertakings - (738,406)
Cash transferred at disposal (5,812) -
__________ __________
Cash outflow from acquisitions and
disposals (5,812) (738,406)
---- ----
Cash (outflow)/inflow before financing (1,151,926) 291,309
Financing
Issue of ordinary share capital - 1,003,941
Expenses paid in connection with share issue - (37,750)
Capital element of finance lease rental payments (102,218) (159,557)
__________ __________
Cash (outflow)/inflow from financing (102,218) 806,634
---- ----
(Decrease)/increase in cash in the year (1,254,144) 1,097,943
__________ __________
Preliminary announcement of the unaudited results for the year ended 30 April
2003
NEW MEDIA INDUSTRIES PLC
Notes forming part of the preliminary announcement for the year ended 30 April
2003
1 Basis of preparation and accounting policies
The preliminary financial information incorporates the unaudited results of New
Media Industries PLC and all of its subsidiary undertakings for the year ended
30 April 2003.
The accounting policies used in the preparation of these unaudited results are
unchanged from those adopted by the group in previously published annual
financial statements.
Restatements of comparative figures
Salary costs previously disclosed in cost of sales are now included in
administrative expenditure.
2 Taxation on loss on ordinary activities
(a) Analysis of charge for the year:
2003 2002
Current tax # #
UK Corporation tax - -
Adjustments in respect of prior years 24,528 34,089
---- ----
Total current tax 24,528 34,089
(b) Factors affecting the current tax charge for the year:
Loss on ordinary activities before taxation (3,375,820) (856,785)
Loss on ordinary activities multiplied by the standard rate of
Corporation tax in the UK of 30% (2002: 30%) (1,012,746) (257,036)
Origination of timing differences from capital allowances 83,695 91,748
Amortisation and impairment of goodwill 439,406 -
Other expenses, not deductible for tax purposes 210,498 217,489
Losses forfeit on cession of trade 96,934 -
Losses available for utilisation against future profits 182,213 -
Pre-acquisition expenses in subsidiary companies - (52,201)
Adjustments to the tax charge in respect of prior years 24,528 34,089
---- ----
Current tax charge for the year 24,528 34,089
No provision for deferred taxation is required in either the current or the
previous year.
Preliminary announcement of the audited results for the year ended 30 April 2003
NEW MEDIA INDUSTRIES PLC
Notes forming part of the preliminary announcement for the year ended 30 April
2003
2 Taxation on loss on ordinary activities (continued)
(c) Factors affecting future group tax charges
The group has approximately #1.6m of unrelieved losses available for offset
against future taxable profits of certain group companies. This figure is
approximate and is subject to the agreement of the Inland Revenue.
3 Dividends
No dividends were paid or recommended for the year under review (2002: #nil).
4 (Loss)/earnings per share
Basic loss per share
This is calculated by dividing the loss of #3,400,348 (2002: profit of #890,874)
(being the profit or loss attributable to ordinary shareholders) by the weighted
average number of ordinary shares in issue during the year of 74,063,649 (2002:
56,414,507).
Diluted loss per share
Basic and dilutive loss per share were the same for the year as the
effect of all potential ordinary shares, including share options and
contingently issuable shares, was anti-dilutive. For the prior period, there is
no difference between basic and diluted earnings per share.
Pro-forma (loss)/earnings per share
This is calculated by dividing the (loss)/earnings before goodwill amortisation,
impairment, reorganisation costs, exceptional items and provision against fixed
asset investment of #1,190,479 (2002: profit of #154,217) by the weighted
average number of ordinary shares in issues during the year of 74,063,649 (2002:
56,414,507).
The directors believe this gives a better view of maintainable earnings.
Preliminary announcement of the audited results for the year ended 30 April 2003
NEW MEDIA INDUSTRIES PLC
Notes forming part of the preliminary announcement for the year ended 30 April
2003
4 (Loss)/earnings per share (continued)
Reconciliation of losses:
Unaudited Audited
2003 2002
# #
Loss used for calculation of basic and diluted EPS (3,400,348) (890,874)
Goodwill amortisation 154,135 162,609
Impairment of goodwill 1,310,552 -
Exceptional items 745,182 113,187
Reorganisation costs - 569,295
Provision against fixed asset investment - 200,000
---- ----
(Loss)/profit used for calculation of pro-forma (loss)/earnings per share (1,190,479) 154,217
5 Shares to be issued
The group acquired Target NMI Limited in a previous period. The acquisition
included deferred consideration (contingent upon performance criteria), to be
satisfied by means of shares issued by New Media Industries PLC in future years.
This calculation of deferred consideration has been revised. The directors
consider that at the balance sheet date the likely deferred consideration to be
settled by future issued shares was #442,166.
These shares relate to shares to be issued in relation to the risk premium costs
in lieu for a cash payment.
6 The preliminary announcement was approved by the Board of directors on 25
September 2003.
7 The financial information contained in this preliminary announcement does
not constitute statutory accounts within the meaning of Section 240 of the
Companies Act 1985.
8 The results and summary balance sheet incorporates the unaudited results
of New Media Industries PLC and all its subsidiaries made up to 30 April 2003
and have been prepared on a basis consistent with the audited financial
statements for the year ended 30 April 2002.
Preliminary announcement of the audited results for the year ended 30 April 2003
NEW MEDIA INDUSTRIES PLC
Notes forming part of the preliminary announcement for the year ended 30 April
2003
9 The financial information for the previous period has been extracted from
the audited financial statements for that period, which have been filed with the
Registrar of Companies. The auditors' report on these financial statements was
unqualified and did not contain any statement under Section 237(2) or (3) of the
Companies Act 1985.
10 The Report and Accounts for the year ended 30 April 2003 will be posted to
shareholders at least 21 days before the Annual General Meeting and copies will
be available from the Company Secretary at Middlesex House, 34-42 Cleveland
Street, London, W1P 5FB.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BBGDCXSDGGXL