TIDMWFCA
RNS Number : 8347C
WFCA PLC
14 March 2011
14 March 2011
WFCA plc
("WFCA", "the Company" or "the Group")
INTERIM RESULTS
WFCA plc (AIM: WFCA.L), a leading regional advertising and
marketing agency, today announces its interim results for the 6
months ended 31 December 2010.
Highlights
-- Profit before tax and exceptional items GBP127k (2009 H1:
GBP417k)
-- Gross margin for period 22% (2009 H1: 18%)
-- Fundraise of GBP1,775,000 conditional on shareholder
approval
Interim Statement
The net profit before taxation, exceptional items and
discontinued operations of GBP127,073 for the six months ended
31(st) December 2010 compares to a profit of GBP416,189 for the six
months ended 31(st) December 2009. The result follows the loss of
two major clients reported to the market in previous statements.
Cost cutting measures were made to substantially mitigate the lost
income but there will be a period of reduced activity while the
company continues to rebuild its client base and turnover.
Turnover in the period was GBP8,073,019 (2009, GBP15,198,936)
with a gross profit of GBP1,770,486 (2009, GBP2,729,658). The loss
of these high turnover but lower margin 'media' clients has
resulted in the overall gross margin increasing from 18% to 22%.
Basic earnings per share are -0.03p (2009 0.11p)
The results include a substantial bad debt provision disclosed
as an exceptional cost. This comprises all monies owed by one
particular former client which continues to trade. We have
exercised our first charge over its assets, appointed a receiver
and anticipate a partial recovery of the debt.
Michael Richards decided to take a six month sabbatical for
health reasons. In the intervening period, Rob Hamer, who has over
twenty years in the sector as an ex CEO of FCB, is acting as
Interim CEO.
In the light of market conditions and in recognition of our
proven operating skills in these areas, we have refocused new
business strategy to concentrate on taking medium sized challenger
brands through to being mature retailers. This provides a clear
differentiation between WFCA and the main London agencies. The
approach is already demonstrating its attraction as, since our last
trading statement, we have secured new business wins for Nom
Dairies, Clarence Court, Armour Group, Infinity and Pataks,
together with a series of smaller appointments. These clients,
along with a growing pipeline of new opportunities, provide a
platform to rebuild underlying profitability. However, as mentioned
above, there will be a reduced level of activity during the balance
of the financial year as revenues from these new clients take time
to come on stream.
The board remains confident about WFCA's future prospects and
its ability to grow and to underline this the Company has today
also announced that it is raising GBP1,775,000 via a share
placement at 1p per share conditional on shareholder approval. This
new capital will provide sufficient funds to allow the Group to
repay debt and to provide the necessary financial stability to
enable it to explore acquisition opportunities in order to expand
its service offering and sector reach. Further details of the
Placing are available in th Circular available on the Company's
website at www.wfca-ir.co.uk.
Group Income Statement
For the 6 months ended 31st December 2010
6 months 6 months 12 months
ended ended ended
31st Dec 31st Dec 30th June
2010 2009 2010
unaudited unaudited audited
GBP GBP GBP
Revenue 8,073,019 15,198,936 26,458,225
Direct costs (6,302,533) (12,469,278) (21,504,575)
Gross profit 1,770,486 2,729,658 4,953,650
Other operating income 4,500 6,513
Operating costs before
share option charge (1,580,113) (2,257,916) (4,015,484)
Share option charge (3,453) (6,968) (7,600)
Total operating costs (1,583,566) (2,264,884) (4,023,084)
Depreciation (27,576) (53,085) (90,561)
Total operating profit 159,344 416,189 846,518
Net finance Cost (32,271) - (43,780)
Profit before taxation,
exceptional items and
discontinued operations 127,073 416,189 802,738
Income tax credit / (charge) (1,086) (120,106) (167,676)
Profit before exceptional
items and discontinued
operations 125,987 296,083 635,062
Loss from exceptional items (218,240) - (125,589)
(Loss) / Profit after exceptional
items and before discontinued
operations (92,253) 296,083 509,473
(Loss) / profit from discontinued
operations - (9,000) 46,526
(Loss) / Profit for the
period attributable to
equity holders of the parent (92,253) 287,083 555,999
Earnings per share
Basic earnings per share -0.03p 0.11p 0.21p
Diluted earnings per share -0.03p 0.10p 0.19p
No Group Statement of Comprehensive Income has been prepared
because there were no material gains or losses for the year
other than those recognised in the Group Income Statement.
Group Balance Sheet
As at 31st December 2010
At At At
31st Dec 31st Dec 30th June
2010 2009 2010
unaudited unaudited audited
GBP GBP GBP
Assets
Non-current assets
Property, plant and equipment 115,942 185,949 143,517
Goodwill 8,497,909 8,497,907 8,497,907
Deferred tax assets 419,630 513,857 420,716
9,033,481 9,197,713 9,062,140
----------- ----------- -----------
Current assets
Trade and other receivables 3,261,554 4,566,161 2,417,989
Non-current assets held
for sale 190,000 190,000 190,000
Cash and short term deposits 209,889 157,770 105,719
3,661,443 4,913,931 2,713,708
----------- ----------- -----------
Total Assets 12,694,924 14,111,644 11,775,848
Equity and liabilities
Share capital 2,684,660 2,658,586 2,684,660
Share premium 1,425,398 1,382,250 1,434,398
Retained earnings 3,551,568 3,370,811 3,640,359
7,661,626 7,411,647 7,759,417
----------- ----------- -----------
Non-current liabilites
Long term borrowings 687,500 - 700,000
687,500 - 700,000
----------- ----------- -----------
Current liabilities
Trade and other payables 4,269,903 6,520,017 3,193,942
Provisions for other liabilites
and charges - 38,304 46,594
Corporate income tax payable 75,895 141,676 75,895
4,345,798 6,699,997 3,316,431
----------- ----------- -----------
Total liabilities 5,033,298 6,699,997 4,016,431
----------- ----------- -----------
Total equity and liabilities 12,694,924 14,111,644 11,775,848
Group Cash Flow Statement
For the 6 months ended 31st December 2010
6 months 6 months 12 months
ended ended ended
31st Dec 31st Dec 30th June
2010 2009 2010
unaudited unaudited audited
GBP GBP GBP
Cash inflow from operating
activities
Profit from operations
before taxation (91,167) 407,198 677,149
Share option charge for
the period 3,453 6,968 7,600
Impairment of investment
in subsidiary - - 46,526
Depreciation of property,
plant and machinery 27,576 53,085 90,561
Revaluation of freehold
property - (33,659) (33,659)
Operating cashflows before
movement in working capital (60,138) 433,592 788,177
Loss on sale of property,
plant and equipment - 11,490 17,805
(Increase) / decrease in
receivables (843,565) (1,382,435) 844,689
Increase / (decrease) in
payables 573,711 (38,176) (1,800,119)
Cash generated / (consumed)
by operations (329,992) (975,529) (149,448)
Income tax received - - (21,949)
Net cash from operating
activities (329,992) (975,529) (171,397)
Cash (outflow) from investing
activities
Interest received - - -
Cash relating to discontinued
operations - -
Purchase of property, plant
and equipment - (115,729) (116,371)
Net cash used in investment
activities - (115,729) (116,371)
Cash (outflow) / inflow from financing
activities
Proceeds on issue of shares - 1,665 77,601
Costs of share issue (9,000) (2,286) -
Long term borrowings (12,500) - -
Net cash from financing
activities (21,500) (621) 77,601
Net decrease in cash and
cash equivalents (351,492) (1,091,879) (210,167)
Cash and cash equivalents
at beginning of period (849,947) (639,780) (639,780)
Cash and cash equivalents
at end of period (1,201,439) (1,731,659) (849,947)
Cash and cash equivalents
as at 31st Dec 2010
Represented by:
Cash and short term deposits 209,889 157,770 105,719
Bank facilities (1,411,328) (1,889,429) (955,666)
Total cash and cash equivalents (1,201,439) (1,731,659) (849,947)
Group Statement of Changes in Equity
For the 6 months ended 31st December 2010
Share Share Retained
Capital Premium Earnings Total
GBP GBP GBP GBP
Balance at 1st July
2010 2,684,660 1,434,398 3,640,359 7,759,417
Charge for share options - - 3,453 3,453
Issue of share capital - - - -
Issue costs - (9,000) 9 (8,991)
Profit for the period - - (92,253) (92,253)
Balance at 31st December
2010 2,684,660 1,425,398 3,551,568 7,661,626
Basis of Preparation
This interim financial report is unaudited and does not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006. The financial statements for the year
to 30th June 2010, which were prepared in accordance with
International Reporting Standards ('IFRS') as adopted by
the European Union and upon which the auditors have issued
an unqualified report, have been delivered to the Registrar
of Companies.
The interim financial report for the six months ended 31st
December 2010 have been prepared in accordance with IAS 34
'Interim Financial Reporting' as adopted by the European
Union. The accounting policies applied in the interim financial
report are consistent with those set out and applied in the
Group's Annual Report for the year to 30th June 2010.
The interim financial report for the six months ended 31st
December 2010 which comprise the Group Income Statement,
Group Balance Sheet, Group Cash Flow Statement, Group Statement
of Changes in Equity and the related notes, has been reviewed
by the Group's auditor. In addition, the Group's auditor
has read the other information contained in the interim financial
report and considered whether it contains any apparent misstatements
or material inconsistencies with the financial information.
Further enquiries:
WFCA plc
Stephen Latter, Financial Director Tel: 01892 703 201
Daniel Stewart & Company plc
Oliver Rigby Tel: 020 7776 6550
WFCA plc is a uniquely placed full service Marketing
Communications Agency and positioned as the "London Agency not in
London". Their role is as a different kind of Agency, with
completely integrated and full service resource delivering
advertising, design, direct, digital and media solutions to a wide
range of blue chip Clients, but at a much lower cost than their
London based competitors.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFMFMFFFSEID
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