Interim Results
December 20 2006 - 7:07AM
UK Regulatory
RNS Number:3295O
MKM Group PLC
20 December 2006
MKM Group Plc
("MKM Group" or "the Group")
Interim results for the six months ended 30 September 2006
MKM Group Plc, the marketing services group, announces its interim results for
the six months to 30 September 2006.
Key Points
* Profit before tax of #271,000 (2005: loss of #520,000)
* Gross margin significantly improved to 65% (2005: 22%)
* Revenues of #1.8m (2005: #2.4m) - reflected strategic shift to focus on
higher margin sales promotions activity, where revenues grew by 19%
to #1.7m
* Basic earnings per share of 0.6p (2005: loss per share of 3.0p)
* Net cash of #1.8m (2005: #1.1m)
* Board continues to seek acquisitions to broaden Group's offering
Andrew Johnson, Executive Chairman of MKM, said,
"Over the last twelve months to date, much has been achieved including a
restructuring of the business, strengthening of the management team and a
strategic review of the future direction of the Group. Our ambitions are to
develop a more broadly based marketing services Group and we continue to seek
appropriate acquisitions to broaden the Group's offering."
Enquiries to:
MKM Group Plc (www.mkmgroupplc.com)
Andrew Johnson, Executive Chairman
Matthew Toynton, Finance Director 0161 877 1112
WH Ireland
David Youngman 0161 832 2174
Biddicks
Katie Tzouliadis, Managing Director 020 7448 1000
Chairman's Statement
Overview
The Group returned to profitability in the second half of the last financial
year and these results, covering the six months to 30 September 2006 are
pleasing and in line with our expectations.
Financials
The profit before tax for the first half of the year was #271,000 (2005: loss of
#520,000), giving a 15% profit margin and representing earnings per share of
0.6p (2005: loss per share of 3.0p).
This was achieved on reduced turnover of #1,824,000 from #2,404,000 in the
comparable period last year. The 25% reduction in turnover reflected a change in
the business mix as we focused on our higher margin, core sales promotions
activity and de-emphasised our travel-related business. As a result, turnover
from our sales promotion activity increased by 19% to #1,683,000 from #1,420,000
last year and gross margin has significantly increased to 65% from 22%.
The Group has maintained its strong balance sheet position with #1,751,000 cash
(2005: #1,112,000)
Share Options
For the first time the Interim statements include a charge for Share based
payments, reflecting a change in accounting policy to comply with FRS20. The
charge for this period is #15,000 (2005: #8,000) and is included within
Administrative expenses.
Dividend
No interim dividend is being proposed (2005: - #nil)
Outlook
Over the last twelve months to date, much has been achieved including a
restructuring of the business, strengthening of the management team and a
strategic review of the future direction of the Group. Our ambitions are to
develop a more broadly based marketing services Group and at the full year, I
commented that we now had a firm base upon which to build.
The Group has experienced an encouraging start to the year. However, following
the cessation of a client contract, as a result of a change of their marketing
strategy, the results for the second half of the year ending 31 March 2007 will
be below our previous expectations. Nevertheless, we expect to see the benefit
of our recent investment in a strengthened MKM Concepts sales team and the
encouraging prospect pipeline, reflected in our order book for the next
financial year.
We continue to seek appropriate acquisitions to broaden the Group's offering.
Andrew Johnson
Executive Chairman
Date: 20th December 2006
MKM GROUP PLC
Consolidated Profit and loss account for the six months ended 30 September 2006
Unaudited Unaudited Unaudited*
six months ended six months ended Year ended
30 Sept 30 Sept 31 March
2006 2005 2006
#'000 #'000 #'000
TURNOVER 1,824 2,404 4,575
Cost of sales (632) (1,864) (3,279)
GROSS PROFIT 1,192 540 1,296
Administrative Expenses (934) (1,077) (1,728)
OPERATING PROFIT/(LOSS) 258 (537) (432)
Interest receivable 13 23 48
Interest payable - (6) (17)
PROFIT/(LOSS) ON ORDINARY ACTIVITIES 271 (520) (401)
BEFORE TAXATION
Tax on profit on ordinary activities - - 4
PROFIT/(LOSS) FOR PERIOD/YEAR 271 (520) (397)
Basic earnings/(losses)per share 0.6p (3.0p) (1.3p)
Diluted earnings/(losses) per share 0.5p (3.0p) (1.3p)
*The comparatives for the year ending 31 March 2006 are based on the audited
accounts to that date but have been amended to include a prior year adjustment
in relation to FRS 20 - share based payments (note 1).
MKM GROUP PLC
Statement of Total recognized gains and losses for the six months ended 30
September 2006
______________________________________________________________________________
Unaudited Unaudited Unaudited*
6 months ended 6 months ended Year ended
30 Sept 30 Sept 31 March
2006 2005 2006
#'000 #'000 #'000
Profit/(loss) attributable to Shareholders and 271 (520) (397)
total recognized gains and losses for the period/
year
Adjustment to prior periods (30)
Total gains and losses recognized since the last 241
annual report
*The comparatives for the year ending 31 March 2006 are based on the audited
accounts to that date but have been amended to include a prior year adjustment
in relation to FRS 20 - share based payments (note 1).
MKM GROUP PLC
Consolidated balance sheet at 30 September 2006
_______________________________________________________________________________
Unaudited Unaudited Unaudited*
30 Sept-06 30 Sept-05 31 Mar-06
#'000 #'000 #'000
Fixed Assets
Tangible Assets 244 365 285
Goodwill 757 797 779
1,001 1,162 1,064
Current Assets
Stocks 1 1 1
Debtors 523 1,014 259
Cash 1,751 1,112 1,696
3,276 3,289 3,020
Creditors: < 1 year 1,235 1,190 1,276
Provisions for 27 639 16
liabilities and charges
1,262 1,829 1,292
2,014 1,460 1,728
Share Capital 211 204 211
Share Premium 2,212 2,082 2,212
Share Option Reserve 45 22 30
Profit & Loss reserve (454) (192) (725)
2,014 1,460 1,728
*The comparatives for the year ending 31 March 2006 are based on the audited
accounts to that date but have been amended to include a prior year adjustment
in relation to FRS 20 - share based payments (note 1).
MKM GROUP PLC
Consolidated cash flow statement for the six months ended 30 September 2006
_______________________________________________________________________________
Unaudited Unaudited Unaudited*
six months six months Year ended
ended ended
30 Sept 30 Sept 31 March
2006 2005 2006
Net cash inflow/(outflow) from
operating activities 57 (1,544) (1,063)
Returns on investments and servicing of
finance 13 17 31
Taxation - 270 270
Capital expenditure and financial
investment (12) (51) (100)
Net cash inflow/(outflow) before financing 58 (1,308) (862)
Financing - 1,270 1,407
Increase/(decrease) in cash in the period/ 58 (38) 545
year
Reconciliation of net cash flow to movement
in net debt
Increase/(decrease) in cash in the year 58 (38) 545
Cash outflow from debt financing - 1
Changes in net funds resulting from cash flows 58 (38) 546
Net funds at start of period/year 1,693 1,147 1,147
Net funds at end of period/year 1,751 1,109 1,693
*The comparatives for the year ending 31 March 2006 are based on the audited
accounts to that date but have been amended to include a prior year adjustment
in relation to FRS 20 - share based payments (note 1).
MKM GROUP PLC
Notes forming Part of the Financial Statements for Six months ended 30 September
2006
_______________________________________________________________________________
1. Accounting Policies
The Interim results for the six months ended 30 September 2006, which are not
audited, have been prepared on the basis of accounting policies consistent with
those that will be adopted in the statutory financial statements for the year
ended 31 March 2007.
During the period to 30 September 2006, the company has adopted FRS20 Share
based payments for the first time and this has resulted in a prior year
adjustment. The comparatives for the year ending 31 March 2006 and the six
months ended 30 September 2005 are based on the audited/unaudited accounts
respectively to those dates but have been amended to include a prior year
adjustment in relation to this change in accounting policy. Therefore, the
comparatives for the year ended 31 March 2006 are shown as 'unaudited'.
2. Basis of preparation
The Interim results are unaudited and do not constitute full accounts within the
meaning of Section 240 of the Companies Act 1985. The results for the year ended
31 March 2006 and the balance sheet as at that date are abridged from the
Company's Report and Financial Statements which have been delivered to the
Registrar of Companies but have been amended to include a prior year adjustment
in relation to the charge in respect of FRS20 noted above. The auditors' report
on the accounts delivered to the registrar of Companies was unqualified and did
not contain statements under the Companies Act 1985, section 237(2) or (3).
3. Turnover
Turnover is wholly attributable to the principal activity of the group and
arises in the United Kingdom.
4. Taxation
The tax charge for the period is based on the anticipated effective rate of tax
for the year ended 31 March 2007.
5. Earnings per share
The basic earnings/(loss) per share has been calculated using the profit/(loss)
after tax, divided by the weighted average number of shares in issue of
43,744,545 (six months to 30 Sept 2006: 17,097,834).
Diluted earnings per share is calculated by adjusting the weighted average
number of shares in issue on the assumption of conversion of all the potentially
dilutive ordinary shares which are share options granted where the exercise
price is less than the average price of the Company's ordinary shares during the
period. The weighted average number of potentially dilutive share options is
5,916,562 (31 March 2006 - nil; 30 September 2005 - nil).
6. Reconciliation of Operating Profit/(loss) to Net Cash inflow/
(outflow) from operating activities
Unaudited Unaudited Unaudited*
6 months ended 6 months ended Year ended
30 Sept 30 Sept 31March
2006 2005 2006
Operating profit/(loss) 258 (537) (432)
Depreciation 41 82 129
Amortisation 22 26 44
Share Based Payments 15 8 16
Decrease/(increase) in debtors (264) (112) 643
(Decrease)/increase in creditors (30) (1,108) (1,642)
Non operating movement in debtors 15 - -
Loss on disposal of fixed assets - 97 179
Net cash inflow/(outflow) from operating 57 (1,544) (1,063)
activities
*The comparatives for the year ending 31 March 2006 are based on the audited
accounts to that date but have been amended to include a prior year adjustment
in relation to FRS 20 - share based payments (note 1).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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