Interim Results
September 16 2002 - 3:01AM
UK Regulatory
RNS Number:1925B
EQ Group PLC
16 September 2002
16 September 2002
eq group plc ("eq or the company")
Unaudited Interim Results for the six months to 30 June 2002
eq group plc is a marketing services group with expertise in marketing
communications, information services and systems that support the marketing
process.
Highlights
* Turnover of #2.6m
* Operating profit, before goodwill amortisation of #331,000
* Earnings per share, before goodwill amortisation of 2.55p
* Successfully integrated Buckingham Research into the group
* Recruited a high calibre management team at TVI and secured repeat
contracts for TVI's recently launched patient recruitment services. A
lucrative new contract to produce a 30 minute healthcare documentary for a
key US pharmaceutical client was also won.
* Maintained healthy renewal rates for Broadnet's existing customers and
secured a number of new radio station wins
* Successfully completed the re-branding and re-positioning of the company
as eq group plc
* Generated strong dealflow, but maintained a cautious approach to new
acquisitions
Commenting on the results, Chief Executive, Bob Bond, said:
"I am pleased with these results which demonstrate our ability to successfully
manage our businesses in the current tough economic climate. Although this
economic uncertainty makes us cautious in the short term, the underlying
robustness of our businesses gives me cause for optimism in the future."
Enquiries:
eq group plc 07747 032478
Bob Bond, Chief Executive
Binns & Co PR 0113 242 1171
Keeley Clarke/ Sophie Morton
CHAIRMAN'S STATEMENT
Introduction
The board of eq group plc (formerly e-quisitor plc) is pleased to present its
results for the six months ended 30 June 2002. During this period your board
focused on the following activities: integrating Buckingham Research ("
Buckingham") into the group; identifying appropriate acquisition targets;
building on the repositioning of TVI; and re-branding the group to more
accurately reflect the nature of our business.
eq group plc is a marketing services group with expertise in marketing
communications, information services and systems that support the marketing
process. Our intention is to continue broadening our services within these areas
by acquiring profitable, well managed companies in Europe and the US. Within the
group each company maintains its own brand, identity and field of expertise.
Collaborative ventures are actively promoted where they demonstrate clear
benefits for our clients, differentiation for our companies and challenges for
our people.
Results
Operating profit, before amortisation of goodwill, for the six months was
#331,000 and earnings per share before goodwill amortisation were 2.55p.
Profit after tax for the period was #22,000 after goodwill charges of #127,000.
Review of Operations
Against a backdrop of very difficult economic conditions in the UK and US the
group performed satisfactorily in the 6 months to 30 June 2002.
TVI improved on its performance in the second half of last year as a result of
its repositioning as a healthcare communications agency and the introduction of
a high calibre local management team to oversee the transformation of the
business. During the period TVI successfully secured repeat contracts for its
Patient Recruitment services, won a project to create a 30 minute documentary
for a major pharmaceutical client and continued to win contracts to produce
segments for its "Healthy Solutions" show on CNBC. Despite the upswing
experienced in the first six months we remain cautious about TVI's prospects for
the full year in light of uncertain political conditions and the possibility
that the US is midway through an economic double dip.
Buckingham made a positive contribution during the period and has now been fully
integrated into the group. It however performed below the board's expectations
due to a significant project being delayed by more than 6 months. The project,
which was won by competitive tender, has since commenced and barring any further
delays should run from September 2002 until March 2003. Aside from this project,
Buckingham has secured a number of new client wins, strengthened its
relationships with existing customers, demonstrable through its 94% customer
retention rate and has established an ongoing collaboration with TVI.
Broadnet performed strongly during the period owing to healthy renewal rates
from existing radio stations coupled with a number of new station wins. Greater
emphasis on training, consultancy and ad-hoc systems development also led to
increased revenues and profitability.
Dealflow during the period remained very strong, however your board continued to
take a cautious view of new acquisition opportunities.
Recent Developments
As indicated in our announcement on 30 July e-quisitor plc was re-branded and
re-positioned as eq group plc. This process is now complete and has met with
favourable feedback from both the investment community and potential acquisition
targets with whom we have been in discussion. The total cost of this exercise
was less than #10,000.
Future Prospects
In view of the uncertain economic and political climate, and the
disproportionate impact that these conditions have on our sector, your board
remains cautious about the short-term growth prospects for the group.
However, we remain confident that each business within the group has developed
plans, budgets and forecasts that are conservative and realistic. Our local
management teams will continue to focus on aggressive gross margin objectives
and careful management of overheads leaving the group well positioned to benefit
from eventual economic recovery.
Phillip Bennett
Chairman
16 September 2002
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the six months ended 30 June 2002
Notes
Year
Six months Six months ended ended 31
ended 30 June 30 June 2001 December 2001
2002
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Turnover 2,608 2,933 4,802
Cost of sales (1,329) (1,503) (2,323)
Gross profit 1,279 1,430 2,479
Administrative expenses (1,075) (1,462) (10,307)
Operating profit before amortisation and
impairment of goodwill 331 175 180
Amortisation and impairment of goodwill (127) (207) (8,008)
Operating profit/(loss) 204 (32) (7,828)
Net interest payable (151) (147) (522)
Profit/(loss) before taxation 53 (179) (8,350)
Taxation (31) 47 69
Profit/(loss) after taxation 22 (132) (8,281)
Minority interests - - (59)
Profit/(loss) for the period 22 (132) (8,340)
Basic earnings/(loss) per share 2
Before exceptional items and goodwill
amortisation 2.55p 2.63p 2.81p
After exceptional items and goodwill
amortisation 0.38p (2.96p) (177.49p)
Diluted earnings/(loss) per share 2
Before exceptional items and goodwill
amortisation 2.55p 2.46p 2.66p
After exceptional items and goodwill
amortisation 0.38p (2.77p) (167.92p)
STATEMENT OF TOTAL RECOGNISED GAINS #'000 #'000 #'000
AND LOSSES
Profit/(loss) for the period 22 (132) (8,340)
Currency adjustments 124 228 207
146 96 (8,133)
CONSOLIDATED BALANCE SHEET
at 30 June 2002
At 31
At 30 June 2002 December 2001
(unaudited) (audited)
#'000 #'000
FIXED ASSETS
Intangible assets 4,924 5,051
Tangible assets 200 227
5,124 5,278
CURRENT ASSETS
Stock 97 44
Debtors 979 402
Cash - 250
1,076 696
CREDITORS: amounts falling due within one year (3,173) (2,995)
Net current liabilities (2,097) (2,299)
CREDITORS: amounts falling due after more than one year (4,343) (4,441)
(1,316) (1,462)
CAPITAL AND RESERVES
Called up equity share capital 585 585
Share premium account 6,358 6,358
Profit and loss account (8,259) (8,405)
Equity shareholders' funds (1,316) (1,462)
CONSOLIDATED CASH FLOW STATEMENT
for the six months ended 30 June 2002
Six months ended Six months ended
30 June 2002 30 June 2001
(unaudited) (unaudited)
#'000 #'000
Net cash outflow from operating activities (450) (605)
Returns on investments and servicing of finance (151) (146)
Taxation (108) -
Capital expenditure and financial investments (8) 34
Net cash outflow before financing (717) (717)
Financing - (30)
Decrease in cash in the period (717) (747)
Reconciliation of net cashflow to movement in net debt
Decrease in cash in the period (717) (747)
Cash outflow from increase in debt and lease financing - (30)
Currency adjustments 126 (53)
Movement in net debt (591) (830)
Opening net debt (5,216) (2,153)
Closing net debt (5,807) (2,983)
NOTES
1. The interim financial information for the half year ended 30 June
2002 has not been audited and does not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985. It has been prepared on the
basis of the Group's accounting policies set out in the Group's 2001 statutory
accounts.
2. The calculation of the basic earnings per share is based on the
profit after taxation of #22,000 divided by the weighted average number of
ordinary shares in issue during the period of 5,846,597 (basic) and 5,846,597
(diluted). An adjusted earnings per share figure before the amortisation of
goodwill has been presented to show underlying earnings. This is based on the
profit after taxation of #149,000 which represents the operating profit before
goodwill of #331,000 less interest of #151,000 and taxation of #31,000.
3. No interim ordinary dividend is payable.
4. The profit and loss account for the year ended 31 December 2001
and the balance sheet at that date are derived from the Company's full accounts
which have been filed with the Registrar of Companies and on which the Company's
auditors gave an unqualified report.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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