RNS Number:5340K
Campus Media PLC
30 April 2003
Campus Media Plc
Interim Results for the six months ended 31 January 2003
Campus Media Plc ("Campus", "the Company" or "the Group"), a provider of
professional radio programming targeted at the UK's student audience and agency
delivering bespoke advertising solutions into the student market, announces its
interim results for the six-month period ended 31 January 2003. Campus made its
debut on AIM on 26 February 2002.
Financial highlights:
* Turnover of #151,134
* Operating loss before goodwill amortisation of #450,693
* Total operating loss of #626,018
* Cash at bank and in hand on 31 January 2002 of #544,885
Operational highlights:
* Appointment of Tony Harbron as Chief Executive
* Agreement with EMAP Advertising
* Several new strategic alliances
* Successful integration of Get Real!, acquired November 2002, into
Campus business
Commenting, Jonathan Durden, Chairman, Campus, said:
"We have made considerable strides in the last six months towards the goal we
set of becoming a key operator in the student media and marketing businesses. We
have agreed strategic alliances with a number of other student-facing
organisations in order to aggregate advertising and marketing inventory across
UK campuses. These alliances take the form of commercial agreements that enable
us to build third party inventory into our sales propositions and our partners
to offer Campus inventory when they are making their sales propositions
Additionally, the Board is delighted to announce a ground-breaking 5 year deal
with EMAP Advertising Limited (EMAP) in relation to the sales of commercial
airtime and sponsorships for its subsidiary SBN Limited (which operates the
Student Broadcast Network).
In recent weeks we have seen a significant upturn in interest amongst
advertisers for the integrated approach to the student market that the Group is
now uniquely placed to offer. The Board is confident that the work that has been
done to consolidate the student advertising market around Campus Media and
conclude the agreement with EMAP will enable the Group to make leaps in revenue
in the short and medium term."
For further information contact:
Tony Harbron, Chief Executive Officer Campus Media Plc 020 7691 4555
www.campusmedia.org
Chairman's statement
The first half of the financial year has been both rewarding and frustrating for
the Board of Campus Media. At an operational and strategic level I am delighted
to be able to use this report to inform shareholders of significant advances in
the development of the Campus Media business. In my last report I noted that the
Board was excited about the opportunity that exists to develop our student radio
proposition and build a business that offers an ideal route to market for all
leading brands looking to target the valuable 18-24 year old audience that is
found on university campuses around the United Kingdom. There are more students
in the UK than ever before, with the total audience rising over 70% in the last
seven years to just under 2 million. Some 34% of the 18-21 year old age group
now enters higher education, up from 16% ten years ago, and the aim of the
current Labour administration is for that figure to continue to rise.
Collectively, students spend over #10 billion annually.
We set out to build our business by strengthening our management and our
existing media outlets and by forming strong alliances with other media players.
On November 14 2002 I was pleased to be able to provide details about the
acquisition of The Get Real! Marketing Company. This acquisition added a leading
brand communications agency whose programmes are endorsed by the Chartered
Institute of Marketing to the Campus Media portfolio. Get Real! is focused on
the student sector and has worked with a number of leading businesses including
Barclaycard, British Telecom, Carphone Warehouse, Coca-Cola, Glaxo Smithkline,
IPC Magazines, Lastminute.com, Microsoft, Ministry of Sound, Nestle, Proctor and
Gamble, T Mobile, Unilever and Virgin.
Today I am pleased to be able to make further announcements about the
development of our business including the appointment of a new Chief Executive
Officer, a ground-breaking deal with one of the UK's most influential media
companies and several new strategic alliances. All of these things have been
delivered since the last financial year-end. Strategically, Campus Media has
made big strides and we are confident that we are now positioned to deliver a
unique proposition that will see the company quickly become pre-eminent in the
student marketing arena - an area which has massive commercial potential.
However, the development of our strategic agenda has taken place in a market
that is one of the toughest in recent memory for the advertising business. The
reduction in spending in certain sectors has hit niche propositions particularly
hard. Whilst money is still being spent in the market, in these lean times it is
being placed with more established, main-stream media players and it has proved
to be very hard to generate revenue for our media propositions. We have had a
difficult time in persuading media owners and planners to set aside budgets to
attack the specific market segments we represent, which they may not have spent
against before.
We have accordingly been disappointed with the revenues that we have generated
in the first half of the year. As a result, we have reviewed our sales
proposition and the means by which it is delivered and we have, we believe,
taken an important step to ensure that we make our radio business, in
particular, part of the commercial mainstream. We believe that this will help to
reverse the perception of student radio amongst some media spenders as an
additional channel to a commercial audience that is 'nice to have only when
budgets are increased and become available'. We have achieved this by concluding
a 5 year deal with EMAP Advertising Limited, details of which are given below.
We see this deal as very significant for us because it brings SBN (the Student
Broadcast Network) directly to the forefront of UK radio sales.
The Results and Business Review
The consolidated profit and loss account for Campus Media shows an operating
loss before goodwill amortisation of #450,693 for the six-month period ended 31
January 2003 on turnover of #151,134. After goodwill amortisation the total
operating loss amounted to #626,018. Campus Media was admitted to AIM on 26
February 2002 and thus there are no comparable previous results. Cash at bank
and in hand on 31 January 2002 amounted to #544,885. In line with best
accounting practice, the directors have excluded any turnover from transactions
where goods and services were exchanged for advertising inventory. Therefore, it
should be noted that the Group has been in receipt of services to its material
benefit in lieu of advertising inventory that have not been included in the
revenue figures presented.
These figures include a full six months of trading for SBN Limited. However they
only include figures from 15 November 2002 in relation to The Get Real!
Marketing Company, being the date that company was acquired by Campus Media.
As noted above, we are disappointed that we have not delivered more significant
turnover in this period. The Group has operated tight cost controls and our cost
of sales figures and administrative expenses have all been delivered within the
targets that we set ourselves in our internal budgeting. We have more than
sufficient existing inventory within the business to deliver a strong and
profitable business, but in the period under review we were not able to persuade
enough potential clients to switch what are currently lean budgets into the new
marketing and advertising proposition that we offer.
In recent weeks we have seen a significant upturn in interest amongst
advertisers for the integrated approach to the student market that the Group is
now uniquely placed to offer. The Board is confident that the work that has been
done to consolidate the student advertising market around Campus Media and
conclude the agreement with EMAP will enable the Group to make leaps in revenue
in the short and medium term.
Appointment of Chief Executive Officer
The Board is delighted to announce the appointment of Tony Harbron, 37, as Chief
Executive Officer with immediate effect.
Tony joined the Campus Media Board as Strategy Director in November 2002
following the acquisition of The Get Real! Marketing Company. Tony is a graduate
of Oxford University and also has an MBA from Aston University where he
specialised in marketing and finance.
Tony began his career in advertising and brand marketing at the prestigious
consultancy Large, Smith & Walford where he rose through the ranks as account
director and finally became a full equity partner specialising in brand strategy
and innovation, advising clients including Bass Brewers, Mobil Oils, Veuve
Clicquot Champagne, Rowntree, Britvic and, ultimately, Red Bull.
Tony worked for Red Bull in the UK first as a strategic advisor and then in the
role of marketing director. He pioneered many of the marketing programmes that
remain core parts of Red Bull's activity to this day. One in particular, the
first ever Student Brand Manager programme, became a crucial factor in Red
Bull's success and resulted in Tony co-founding Get Real! at the end of 1998 to
further develop this area of business.
Tony is an authority and passionate advocate of student marketing and has
brought many leading brands into the market. He helped set up 'Student
Perspectives' the leading annual student marketing conference in association
with Haymarket Conferences, and has chaired the event for the past 2 years.
The Board believe that Tony's previous successes in building student-facing
businesses combined with his brand marketing experience (both agency and client
side) and his management skills will enable Campus Media to continue to
implement its plan to be the foremost owner of media and marketing services
targeted at the growing student sector. Since joining the Board in November 2002
Tony has already delivered a number of strategic alliances that have added
significant weight to the Campus Media proposition.
Agreement with EMAP Advertising Limited
The Board is delighted to announce a ground-breaking 5 year deal with EMAP
Advertising Limited (EMAP) in relation to the sales of commercial airtime and
sponsorships for its subsidiary SBN Limited (which operates the Student
Broadcast Network).
Under the terms of the agreement EMAP have been granted exclusive rights to sell
all commercial airtime on SBN and have been granted a non-exclusive right to
sell sponsorship packages for SBN.
This represents a major development for SBN and underlines the potential
commercial strength of the audience that is delivered through its radio
broadcasts. EMAP have committed to developing SBN's commercial proposition by
adding the audience that it generates into EMAP's overall youth sales package,
which includes a number of the leading commercial youth operations in the UK
including the national Kiss, Kerrang! and Smash Hits brands. By being added to
this impressive portfolio SBN is immediately taken into the mainstream of UK
radio sales and its inventory is added to and integrated with the millions of
commercial hours that are sold by EMAP in respect of its own wholly-owned
operations. EMAP have, through this agreement, recognised the commercial
opportunity that is represented by SBN's audience.
The agreement is operational with immediate effect and the Board expect to see
immediate revenue benefits as a result. In the Board's opinion, this agreement
represents the most significant step in the commercial development of SBN to
date.
Additional Strategic Alliances
In my last report I noted that developing successful and integrated commercial
marketing and advertising strategies to target the important student audience
has historically been impeded by the lack of accessible routes to market and
that Campus Media intended to become a key operator in this market. Our aim was
to combine ownership of relevant media with comprehensive marketing propositions
that will enable advertisers and sponsors to promote their services to the
student audience from a single point of access.
We have made considerable strides in the last six months towards this goal. We
have agreed strategic alliances with a number of other student-facing marketing
businesses in order to aggregate advertising and marketing inventory across UK
campuses. These alliances take the form of commercial agreements that enable us
to build third party inventory into our sales propositions and our partners to
offer Campus Media's inventory when they are making their sales propositions.
To date we have reached agreements with University Media Limited, an owner of
multiple revolving back-lit poster sites in over 90 university bars and common
areas; icontact Limited, an owner of over 800 A2 poster sites situated in over
45 campus refectories; StudentUK Limited, owner and operator of one of the
leading student website businesses; Campus Marketing Limited, a provider of
graduate recruitment roadshows and JVTV Limited, the owner of plasma screens in
multiple university sites broadcasting bespoke student programming.
These affiliations and commercial arrangements are significant. When allied to
our ownership of SBN, the leading nationally distributed student radio service
and Get Real!'s brand manager programmes, they ensure that the Group has become
the focal point for student marketing activity. Our intention was to consolidate
the market around a single agency that could deliver tailored marketing and
advertising campaigns for blue chip brands across the country. We are now in a
position to do that and we have begun to see considerable interest from brand
owners, agencies and media planners who believe that they can now use Campus
Media as a 'one stop shop' through which they can effectively target a massive
audience of 18-24 year olds.
Outlook
Operationally the Board has been pleased with the strategic development of the
business since its flotation in February 2002. SBN has made good progress and
has developed new programming that has been well-received by its subscriber
stations. We have renegotiated the contracts with those stations to give Campus
greater commercial opportunities and the benefits of that process have been
amply demonstrated through the deal with EMAP which we believe will mark a
watershed in the commercial development of SBN.
Get Real! has been totally integrated into Campus group operations since its
acquisition and we anticipate bringing several new major clients into the
business in the coming weeks as a result of the combined proposition that we are
now able to offer. The hard work that we have done to generate other
affiliations within the student marketing arena has also ensured that our
ability to offer advertisers and brand owners unsurpassed access to the student
environment is unparalleled. This concept enables our clients to reach over one
third of the youth audience within targeted locations effectively and represents
a step-change in the way in which this market can be approached. We are excited
about the possibilities that exist for us to take a major share of this
potentially lucrative market.
Although we have failed to meet our revenue expectations in the last 6 months we
are nevertheless optimistic about the possibilities for the Group and believe
that we have developed a strategy that will bring significant commercial success
in due course.
Jonathan Durden
Chairman
Unaudited group profit and loss account
for the period ended 31 January 2003
Unaudited Audited
6 months period
ended ended
31 January 2003 31 July 2002
# #
Turnover
151,134 64,000
Cost of sales
(243,850) (134,000)
------------ -----------
Gross profit / (loss) (92,716) (70,000)
Administrative expenses (357,977) (471,000)
------------ -----------
Operating Loss before Goodwill Amortisation (450,693) (405,000)
Goodwill Amortisation (175,325) (136,000)
------------ -----------
Total Operating loss (626,018) (541,000)
Interest receivable 18,000 2,000
Interest payable and similar charges (11,972) (10,000)
------------ -----------
Loss on ordinary activities before and after (619,990) (549,000)
taxation ------------ -----------
Loss per share (basic and diluted) 7.6 pence 16.4 pence
------------ -----------
No separate statement of total recognised gains and losses has been presented as
all such gains and losses have been dealt with in the profit and loss account.
Unaudited group balance sheet
as at 31 January 2003
Unaudited Audited
as at as at
31 January2003 31 July2002
#'000 #'000
Fixed assets
Intangible assets 3,582 3,063
Tangible assets 91 93
----------- -----------
3,673 3,156
----------- -----------
Current assets
Debtors 315 206
Cash at bank and in hand 545 973
----------- -----------
860 1,179
Creditors: Amounts falling due within one year (431) (287)
----------- -----------
Net current assets 429 892
----------- -----------
Total assets less current liabilities 4,048
Creditors: Amounts falling due after more than (274) (262)
one year
Provisions for liabilities and charges (2) (2)
----------- -----------
Net assets 3,826 3,784
----------- -----------
Capital and reserves
Called up share capital 500 407
Share premium account 1,927 1,927
Merger reserve 2,526 1,980
Profit and loss account (1,127) (530)
----------- -----------
Total Equity Shareholders' funds 3,826 3,784
----------- -----------
Unaudited group cash flow statement sheet
For the period ended 31 January 2003
Six months Period
ended ended
31 January 31 July
2003 2002
#'000 #'000
Cash outflow from operating activities (323) (399)
Returns on investments and servicing of finance 18 2
Capital expenditure and financial investment (7) (10)
Acquisitions and disposals 33 (739)
Management of liquid resources - 750
Financing 635 2,119
------------ -----------
(Decrease) / Increase in cash in the period 357 223
------------ -----------
Notes to the unaudited interim results
for the period ended 31 January 2003
Basis of preparation
The financial information contained in this interim report does not constitute
statutory accounts as defined in section 240 of the Companies Act 1995. The
financial information for the full preceding year is based on the statutory
accounts for the financial year ended 31st July 2002.
The financial information contained in this interim report has been prepared on
the basis of the accounting policies set out in the Group's statutory accounts
for the year ending 31 July 2002.
Basis of consolidation
The Group's financial information consolidates that of the Company and all its
subsidiary undertakings. One subsidiary undertaking - The Get Real! Marketing
Company Limited ("Get Real") - was acquired during the period. Details are given
in note 4 below.
Turnover
The Group's turnover for the period represents the consolidated activities of
the Company and its subsidiary undertakings for the period from 1st August 2002
to 31st January 2003. In the case of Get Real, turnover is consolidated from the
date of completion of the acquisition of that company, 15 November 2002.
Acquisitions and Disposals
On 15 November 2002 the Company completed the acquisition of Get Real, a brand
communication company that focuses on students, for a maximum aggregate
consideration of #1.16m in cash and shares.
The purchase consideration was satisfied by the immediate issue by the Company
of 1,850,000 new ordinary shares of 5p each (calculated with reference to the
closing mid market price of Campus Media's shares of 34.5p on 13 November 2002)
and cash to the value of #303,499.
In addition, deferred consideration in the form of a cash payment will be
payable by the Company based upon on the aggregate value of third party sales
invoiced by Get Real! during the calendar year ended 31st December 2003 and paid
within 90 days of that date. If the payments received from third party sales
during such period total in excess of #750,000 then additional total
consideration will be payable the Vendors equal to 10% of the said sums
received, up to a maximum of #130,000 in aggregate. Additionally for each #1,000
of third party sales made by Get Real! in excess of #900,000 during the calendar
year ended 31st December 2003 Campus will issue to the Vendors an additional
1,250 new ordinary shares of 5p each in Campus Media. The maximum aggregate
consideration under this mechanism will be 250,000 new ordinary shares in Campus
Media.
The directors have reviewed the prospects of the deferred consideration becoming
payable for the purposes of FRS 7 and have concluded on the basis of current
trading that it is not appropriate to make a provision for the payment of the
deferred consideration in the unaudited accounts presented here. A further
review will be carried out by the directors for the purpose of the full year
results.
At completion, the assets of Get Real! were calculated as #336,774 cash at bank
and in hand, #75,429 debtors and #134,704 of creditors and provisions.
In the 12 month period to 31 December 2001 Get Real! reported turnover of #1.09
m and a profit before tax of #134,047. Get Real had net assets of #219,442 as at
31 December 2001. Unaudited management accounts prepared for the 10 month period
ending 31 October 2002 for Get Real! showed a turnover of approximately #682,000
and an operating profit of approximately #196,000.
Taxation
The Group has estimated corporation tax losses to carry forward against future
profits of approximately #3,400,000.
Loss per share
The calculation of loss per share is based on the unaudited consolidated loss
for the financial period and 9,071,154 ordinary shares being the weighted
average number of shares in issue during the period.
Copies of the interim report
Copies of this interim report will be sent to shareholders. Further copies can
be obtained from the Company's registered office at 109a Regents Park Road
London NW1 8UR.
This information is provided by RNS
The company news service from the London Stock Exchange
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