RNS Number:8955W
Local Radio Company PLC (The)
21 May 2007
21 May 2007
THE LOCAL RADIO COMPANY PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED
31 MARCH 2007
Chairman's Statement
Introduction
As outlined in our pre-close trading update, trading for the six month period to
31 March was in line with The Local Radio Company's ("TLRC" or the "Company")
expectations. Since the end of March we are pleased to have seen an improvement
in performance and outlook which we believe is encouraging for the remainder of
the financial year.
Results
As has been widely reported, the past 12 months have proved challenging for the
industry.
During the six months ended 31 March turnover was down 7% on a like-for-like
basis. However, due to continued management action the operating loss for the
six months before interest, depreciation, goodwill amortisation and provision
for share options under FRS 20 was reduced to #535,000 compared to #594,000 for
the same period last year.
During the period under review the Company raised #2.8 million net of expenses
and at 31 March had net cash of #1.8 million after repaying all of our bank debt
and funding working capital.
First Radio Sales
Our joint venture national sales agency, First Radio Sales, now represents 131
local radio stations to national advertisers and their agencies. The business
performed strongly in a reduced national advertising market and we expect this
performance to continue in the second half of the year.
Operational improvement
In line with our stated strategy, continuous improvement of our operations is
paramount and we are pleased that we are demonstrating success in this respect.
As recently reported, we have successfully increased our total audiences to
907,000 listeners per week, listening for a total of 7.6 million hours per week
(Q1 2007 RAJAR). This was a strong performance particularly when measured
against many others in the industry.
We were delighted when, at the recent Sony Awards (the Oscars of the radio
world) our Isle of Wight Radio station won the Gold Award for Small Station of
the Year and another of our stations, Silk FM in Macclesfield, was runner up.
This is a significant achievement and highlights the Company's commitment to
producing local programming of the highest quality.
We continue to review our portfolio of stations with the aim of strengthening
the business to create improved operational performance.
In addition, we are actively developing new sources of revenue. We have
successfully established a portfolio of on-air telephony products which are
already contributing to the business. From the end of May we will be increasing
our online activities at each station by improving functionality and revenue
generating opportunities on all our station websites.
Current performance
I am pleased to report that we are now seeing early signs of improvement in our
performance. Our monthly results for March were the best since November 2005. We
anticipate achieving our highest monthly revenue for two years in May 2007 and
expect to see a return to like for like revenue growth for the first time in
twelve months. We also expect a positive EBITDA result in May and are confident
that this will continue through to the end of our financial year in September.
The Board
The market for radio advertising has declined significantly during the three
years I have been Chairman but as a result of action taken by management, the
Company is now well placed to return to profitability.
In light of the progress the business has made, that should be more fully
realised in the second half of the financial year, I feel that now is an
appropriate time to stand down from the Board.
Richard Wheatly will become Executive Chairman and John Perriss will become the
senior independent non-executive, a structure that is more appropriate to the
next stage of the Company's development.
In closing, I would like to pay tribute to all the staff who have worked so hard
in difficult circumstances to improve the business and to wish the company every
success in the future.
Graham Parrott
- ENDS -
For further information, please contact:
Richard Wheatly
The Local Radio Company Plc Tel: 020 7593 4000
Caroline Sturdy/Matthew Moth
Madano Partnership Tel: 020 7593 4000
Consolidated profit and loss account for the period to 31 March 2007
Unaudited Unaudited Audited
6 months to 6 months to 12 months to
31 March 2007 31 March 2006 30 September
2006
As restated As restated
(see note 1) (see note 1)
Note #'000 #'000 #'000
Turnover: Group and
share of joint ventures 9,276 9,832 20,147
Less: share of joint
ventures turnover (553) (558) (1,044)
________ ________ ________
GROUP TURNOVER 8,723 9,274 19,103
Cost of sales (2,238) (2,451) (5,760)
________ ________ ________
GROSS PROFIT 6,484 6,823 13,343
Administrative expenses (8,047) (9,013) (34,427)
------------------------- ------------ ----------- ------------
Goodwill included in
administrative expenses 549 1,121 18,512
------------------------- ------------ ----------- ------------
________ ________ ________
OPERATING PROFIT/(LOSS) (1,563) (2,190) (21,084)
Loss on sale of
subsidiary undertaking - - (280)
Share of operating
profit in Joint Venture 161 183 277
------------------------- ------------ ----------- ------------
(Loss) before interest,
tax, depreciation,
goodwill amortisation,
exceptional items, and
share based charges (535) (594) (1,834)
------------------------- ------------ ----------- ------------
Interest receivable 28 13 31
Interest payable (8) (4) (31)
________ _________ ____ _____
LOSS ON ORDINARY
ACTIVITIES (1,382) (1,998) (21,087)
BEFORE TAXATION
Tax on loss on ordinary
activities 2 - - -
________ ________ ________
LOSS ON ORDINARY
ACTIVITIES AFTER
TAXATION (1,382) (1,998) (21,087)
Equity minority
interests 19 (10) 37
________ ________ ________
RETAINED LOSS FOR THE
PERIOD (1,363) (2,008) (21,050)
________ ________ ________
Loss per share in pence 3
Basic and diluted (2.04)p (3.59)p (37.55)p
All recognised gains and losses in the current period and the previous period
are included in the profit and loss account.
Consolidated balance sheet as at 31 March 2007
Note Unaudited Unaudited Audited
At 31 March At 31 March At 30 September
2007 2006 2006
As restated As restated
(see note 1) (see note 1)
#'000 #'000 #'000 #'000 #'000 #'000
FIXED ASSETS
Intangible
assets 18,537 37,112 19,086
Tangible assets 1,629 1,877 1,817
Investment in
joint venture
- share of
gross assets 2,728 2,710 2,802
- share of
gross
liabilities (149) (147) (134)
------- ------- -------
2,579 2,563 2,668
Other fixed
asset
investments 278 151 221
----- ----- -------
Total
Investments 2,857 2,714 2,889
_______ _______ ________
23,023 41,703 23,792
CURRENT ASSETS
Debtors 3,370 4,052 3,314
Cash at bank
and in hand 1,835 88 -
_______ _______ ________
5,205 4,140 3,314
CREDITORS:
Amounts falling
due within
one year (3,860) (3,884) (4,189)
_______ _______ ________
NET CURRENT
ASSETS 1,345 256 (875)
_______ _______ ________
TOTAL ASSETS
LESS CURRENT 24,368 41,959 22,917
LIABILITIES
CREDITORS: (19) (38) (30)
Amounts falling
due after more
than one year
PROVISIONS FOR - - -
LIABILITIES AND
CHARGES
_______ _______ ________
NET ASSETS 24,349 41,921 22,887
_______ _______ ________
CAPITAL AND
RESERVES
Called up
share capital 2,880 2,248 2,248
Share premium
account 4 47,676 45,655 45,501
Other reserves 4 389 180 352
Profit and
loss account (26,601) (6,195) (25,238)
_______ _______ ________
TOTAL EQUITY
SHAREHOLDERS' 5 24,344 41,888 22,863
FUNDS
Minority
interest -
equity 5 72 24
_______ _______ ________
24,349 41,960 22,887
_______ _______ ________
Consolidated cash flow statement for the period ended 31 March 2007
Unaudited Unaudited Audited Year
6 months to 6 months to to 30 September
31 March 2007 31 March 2006 2006
#'000 #'000 #'000
NET CASH OUTFLOW FROM
OPERATING ACTIVITIES (734) (682) (1,193)
RETURNS ON INVESTMENTS AND
SERVICING OF FINANCE
Redistribution of shareholder
funds in joint venture 250 - -
Interest and other
investment income received 28 13 20
Interest paid (8) - (30)
Interest element of finance
lease rentals - (4) (1)
_____ _____ _____
NET CASH INFLOW FROM RETURNS ON
INVESTMENTS AND SERVICING
OF FINANCE 280 9 (11)
CAPITAL EXPENDITURE
Purchase of tangible fixed
assets (92) (327) (597)
Sale of tangible fixed
assets - 24 23
Purchase of fixed asset
investments (57) (53) (123)
_______ _______ _______
NET CASH OUTFLOW FROM
CAPITAL EXPENDITURE (149) (356) (697)
_______ _______ _______
ACQUISITIONS
Purchase of subsidiary - (3) (5)
undertakings
Disposal of subsidiary
undertaking 60 - 400
_______ _______ _______
NET CASH OUTFLOW FROM
ACQUISITIONS 60 (3) 395
_______ _______ _______
CASH OUTFLOW BEFORE
FINANCING (553) (1,032) (1,506)
FINANCING
Repayment of loans (9) (17) (43)
Issue of shares 3,002 - -
Issue Costs (195) - -
Capital element of finance
lease rentals - (2) -
______ ______ ______
NET CASH INFLOW / (OUTFLOW)
FROM FINANCING 2,798 (19) (43)
______ ______ ______
INCREASE / (DECREASE) IN
CASH 2,245 (1,051) (1,549)
______ ______ ______
Notes to the financial statements
1 Basis of preparation
The interim financial statements have been prepared on the basis of accounting
policies consistent with those set out in the Group's annual report and
financial statements for the period ended 30 September 2006 with exception that
the Group has adopted FRS 20 (Share based payment) in the current year leading
to a prior period charge of #65,000 (#47,000 at the 2006 half year) and a charge
in the current year of #37,000.
The results for the Group for the six months ended 31 March 2007 and the
comparative results for the six months ended 31 March 2006 are unaudited. The
financial information contained herein does not constitute statutory accounts
within the meaning of section 240 of the Companies Act 1985.
The comparatives for the year ended 30 September 2006 are not the Company's full
statutory accounts for that period. A copy of the statutory accounts for that
period has been delivered to the Registrar of Companies. The auditors' report on
those accounts was unqualified and did not contain a statement under section 237
(2) - (3) of the Companies Act 1985.
2 Tax on loss of ordinary activities
No tax has been accounted for in the period as there are sufficient losses and
capital allowances brought forward to reduce the charge to nil, on the basis
that the tax charge for the half year is estimated on the basis of the
anticipated tax rates applying for the full year.
3 Loss per share
The calculation of basic loss per share is based on the loss after taxation and
minority interests of #1,363,399 (2006: #2,008,000) and on the weighted average
of 66,705,984 shares in issue during the period (2006: 55,901,873). Basic and
diluted loss per share are the same, as the effect of all potential ordinary
shares is not dilutive.
4 Statement of movements on reserves
Group Share Other Profit and
premium reserves loss account
#'000 #'000 #'000
Balance at 30 September
2006 (as restated) 45,501 352 (25,238)
Arising on issue of
shares 2,175 - -
FRS 20 share option
charges - 37 -
Loss for the period - - (1,363)
_______ _______ _______
Balance at 31 March
2007 47,676 389 (26,601)
_______ _______ _______
Notes to the financial statements (continued)
5 Reconciliation of movements in shareholders' funds
Unaudited Unaudited Audited Year to
6 months to 6 months to 30 September
31 March 2007 31 March 2006 2006
#'000 #'000 #'000
Loss for the period (1,363) (2,008) (21,050)
Reserve arising on
provision for
share based
payments 37 18 35
Issues of Ordinary
Shares 632 16 16
Reserve arising on
issue of Ordinary
Shares 2,175 154 154
Deferred
consideration
settled by the
issue of Ordinary
Shares - (225) (225)
______ ______ ______
Net reduction in
shareholders' funds 1,481 (2,045) (21,070)
______ ______ ______
Opening
shareholders'
funds 22,863 43,933 43,933
______ ______ ______
Closing shareholders'
funds 24,344 41,888 22,863
______ ______ _______
6 Reconciliation of total operating loss to net cash outflow from operating
activities
Unaudited Unaudited Audited
6 months to 6 months to Year to 30
31 March 2007 31 March 2006 September 2006
#'000 #'000 #'000
Operating loss (1,563) (2,190) (21,084)
FRS 20 provision for share
based charges 37 18 35
Depreciation of tangible fixed
assets 280 317 617
Amortisation of intangible
fixed assets 549 1,121 18,512
Profit on sale of tangible
fixed assets - - -
(Increase)/decrease in debtors (116) 258 517
Increase/(decrease) in creditors 79 (206) 210
______ ______ ______
Net cash inflow/(outflow)
from operating activities (734) (682) (1,193)
______ ______ ______
Notes to the financial statements (continued)
7 Reconciliation of net cash flow to movement in net funds
Unaudited Unaudited Audited
6 months to 6 months to Year to 30
31 March 2007 31 March 2006 September 2006
#'000 #'000 #'000
Increase/(decrease) in cash 2,245 (1,051) (1,549)
Cash outflow from decrease in
net funds 9 19 43
______ ______ ______
2,254 (1,032) (1,506)
Change in net funds resulting
from cash flows
Other non-cash items:
Inception of finance leases - - -
New finance leases - - -
______ ______ ______
Movement in net funds 2,254 (1,032) (1,506)
Net funds brought forward (440) 1,066 1,066
______ ______ ______
Net funds carried forward 1,814 34 (440)
====== ====== ======
8 Analysis of net funds
At Cash flow Additions At
1 October 31 March
2006 2007
#'000 #'000 #'000 #'000
Cash at bank and
in hand (410) 2,245 - 1,835
Debt due after one
year (9) - - (9)
Debt due within
one year (19) 9 - (10)
Finance leases (2) - - (2)
______ ______ ______ ______
(440) 2,254 - 1,814
====== ====== ====== ========
9 Disposals
On 31 October 2006 the Company sold the entire share capital of Merseyside's The
Rocket Limited for #100,000 in cash, #40,000 of which was deferred. The loss
associated with the sale was provided for in the September 2006 accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
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