RNS Number:9687X
Internet Music & Media PLC
28 June 2002
28th June, 2002
Internet Music & Media PLC
("IMM" or "the Company")
Preliminary results for the period ended
31st December, 2001
Chairman's Statement
I am pleased to report on the results of IMM and its subsidiaries ("the Group")
for year ended 31st December, 2001.
Trading
The results for the year ended 31st December, 2001, show an operating loss of
£12.1 million which includes a non-cash exceptional goodwill write-off of £9.8
million and non-cash depreciation of £0.6 million..
In view of the trading losses incurred in the two years ended 31st December 2001
the Board has decided to take the prudent view of making the exceptional
write-off of the goodwill attributable to the trading subsidiaries.
The Group suffered a serious setback following the tragic events of 11th
September, 2001. At that time, three-quarters of the Group's revenues were
derived from sales processed from its United States operations in Seattle. The
restrictions on air traffic and, in particular, the temporary cessation of the
courier operations of Fedex and UPS, upon which the Group is dependent for
product receipt from suppliers and delivery of orders to customers, resulted in
a sudden and substantial fall in revenue.
I am pleased to report that the Group has more than recovered the ground lost
last year and that in the last eight months the Group has experienced
significant consistent revenue growth, to the extent that current revenues are
at record levels and double those of twelve months ago.
The Group has now reached breakeven on a month-to-month basis and the Directors
expect it to become cash positive in the second half of 2002.
Fundraising
In August 2001, IMM completed a placing and open offer which raised £1.85
million of new equity for the Company
The Company is in the process of raising £250,000 of additional working capital
by the issue of convertible loan stock at 5p per share. The Company has already
received commitments totalling in excess of £110,000. A further announcement in
respect of the fund raising will be made in due course.
Record Label
Both the number of releases and the calibre of artiste on the Groovetech Records
record label are growing. Groovetech Records has now reached the point where
the resources of a larger organisation are required to expand both production
and distribution. Talks have been opened with a number of suitable music
companies and I am confident, from the interest that has been shown, that the
Groovetech will strike a label deal in the near future which will provide
external funding for the expansion of the label.
Outlook
The Group has made significant progress since my last report. Revenues have
more than doubled, overheads have been reduced and margins have increased.
Your Directors are optimistic that these trends will continue with beneficial
consequences for income, profits and cash-flow in the current year.
Nicholas Cowan
Chairman
28th June, 2002
Consolidated profit and loss account
for the period ended 31st December, 2001
Notes 2001 2000
£ £
Turnover 1,260,153 294,242
Cost of sales (909,603) (227,572)
-------- --------
Gross profit 350,550 66,670
Exceptional goodwill impairment (9,806,650) -
Administrative expenses (2,661,383) (4,261,784)
Other operating income 17,167 -
-------- --------
Operating loss (12,100,316) (4,195,114)
Other interest receivable and similar income 2,315 56,445
Interest payable and similar charges (59,200) (2,354)
-------- --------
Loss on ordinary activities before taxation (12,157,201) (4,141,023)
Tax on loss on ordinary activities - -
-------- --------
Loss on ordinary activities after taxation (12,157,201) (4,141,023)
======== ========
Loss per share 1 Pence Pence
Basic (46.91) (38.99)
Diluted (46.60) (38.16)
The profit and loss account has been prepared on the basis that all operations
are continuing operations.
Consolidated balance sheet
at 31st December, 2001
2001 2000
£ £
Fixed assets
Intangible assets - 14,177,813
Tangible assets 1,493,309 1,725,741
-------- --------
1,493,309 15,903,554
-------- --------
Current assets
Stocks 297,879 276,386
Debtors 132,213 72,665
Cash at bank and in hand 21,225 191,976
-------- --------
451,317 541,027
Creditors: amounts falling due within one year (491,472) (834,257)
-------- --------
Net current liabilities (40,155) (293,230)
-------- --------
Total assets less current liabilities 1,453,154 15,610,324
Creditors: amounts falling due after more than one year (700,000) (572,302)
-------- --------
753,154 15,038,022
======== ========
Capital and reserves
Called up share capital 3,560,767 4,262,500
Share premium account 13,450,668 14,935,546
Profit and loss account (16,258,281) (4,160,024)
-------- --------
Shareholders' funds - equity interest 753,154 15,038,022
======== ========
Consolidated cash flow statement
for the period ended 31st December, 2001
2001 2000
£ £
Net cash outflow from operating activities (2,181,743) (2,736,162)
-------- --------
Returns on investments and servicing of finance
Interest received 2,315 56,445
Interest paid (59,200) (2,354)
-------- --------
Net cash inflow for returns on investments and (56,885) 54,091
servicing of finance
-------- --------
Capital expenditure
Payments to acquire tangible assets (279,097) (1,603,323)
Receipts from sales of tangible assets 4,187 -
-------- --------
Net cash outflow for capital expenditure (274,910) (1,603,323)
-------- --------
Acquisitions and disposals
Purchase of subsidiary undertakings (net of cash acquired) - 108,898
-------- --------
Net cash inflow for acquisitions and disposals - 108,898
-------- --------
Net cash outflow before management of liquid resources (2,513,538) (4,176,496)
and financing
-------- --------
Financing
Issue of ordinary share capital 2,705,966 4,381,000
Cost of share issue (521,416) (584,952)
-------- --------
Issue of shares 2,184,550 3,796,048
-------- --------
New long term bank loan 127,698 572,302
-------- --------
Increase in debt 127,698 572,302
-------- --------
Net cash inflow from financing 2,312,248 4,368,350
-------- --------
Increase in cash in the period (201,290) 191,854
======== ========
Notes to the Consolidated Cash Flow Statement
A. Reconciliation of operating loss to net cash outflow from operating
activities
2001 2000
£ £
Operating loss (12,100,316) (4,195,114)
Depreciation of tangible assets 556,615 101,675
Exceptional goodwill impairment 9,806,650 -
Amortisation of intangible assets - 2,181,202
Profit on disposal of trading assets (241) -
Increase in stocks (21,493) (137,556)
Decrease in debtors (59,548) 199,026
Decrease in creditors (373,324) (866,392)
Net effect of foreign exchange differences 9,914 (19,003)
-------- --------
Net cash outflow from operating activities (2,181,743) (2,736,162)
======== ========
B. Analysis of net (debt)/funds
1st Other 31st
January, non-cash December,
2001 Cash flow changes 2001
£ £ £ £
Net cash:
Cash at bank and in hand 191,976 (170,751) - 21,225
Bank overdrafts (112) (30,539) - (30,651)
-------- -------- -------- --------
Net debt 191,864 (201,290) - (9,426)
Debt:
Debts falling due after one year (572,032) (127,698) - (700,000)
-------- -------- -------- --------
Net debt (380,438) (328,988) - (709,426)
======== ======== ======== ========
C. Reconciliation of net cash flow to movement in net debt
2001 2000
£ £
Increase in cash in the period (201,290) 188,167
Cash inflow from increase in debt (127,698) (572,302)
-------- --------
Movement in net (debt)/funds in the period (328,988) (384,135)
Opening net funds/(debt) (380,438) 3,697
-------- --------
Closing net debt (709,426) (380,438)
======== ========
Notes
1 Loss per share
The calculation of the basic loss per share is based on the loss on ordinary
activities after taxation of £12,157,201 and on 25,914,502 ordinary shares,
being the weighted average number of shares in issue during the period.
2 Dividends
The Directors are not proposing the payment of a dividend in respect of the
period ended 31st December, 2001.
3 Tax on loss on Ordinary Activities.
There is no tax charge arising due to losses for the period.
4 Publication of non-statutory accounts
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985.
The financial information for the period ended 31st December, 2001, is extracted
from the Group's financial statements to that date which received an unqualified
auditor's report and will be filed with the Registrar of Companies in due
course.
The accounts for the year ended 31st December, 2001, have not been delivered to
the Registrar of Companies. The auditors' report refers to the disclosures made
by the Directors regarding the ability of the Group to continue as a going
concern, but their opinion will not be qualified in this respect.
The financial information for the period ended 31st December, 2000, is extracted
from the Group's full statutory accounts to that date, which received an
unqualified auditors' report and have been filed with the Registrar of
Companies.
5 Copies of the Report and Accounts will be sent to shareholders later today
and are now available from the offices of John East & Partners Limited, Crystal
Gate, 28-30 Worship Street, London, EC2A 2AH.
Further enquiries
Internet Music & Media PLC Tel: 07747 695083
Nicholas Cowan - Chairman
Holborn Public Relations Tel: 020 7929 5599
David Bick
John East & Partners Limited Tel: 020 7628 2200
David Worlidge / Simon Clements
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