TIDMMSG
MILESTONE GROUP PLC
("Milestone" or the "Company")
Final Results
Milestone (AIM:MSG), the AIM quoted provider of digital media and
technology, announces its final results for the year ended 30 September
2017.
Key points
-- Deborah White replaced by Anthony Sanders as CEO (on an interim basis)
-- Edward Guy Meyer appointed as Business Development Director
-- Review of operations led to cessation of charitable and social activities
-- Strategy revised to focus on blockchain-based services to the digital
media and fintech markets
-- OnGuard contract renewals and extensions agreed
-- Post period end
-- Software license agreement entered into with Envoy Group Corp Inc
-- Memorandum of understanding signed to create a joint venture with
Seed Media Ltd and Martin Heath
-- Settlement Agreement with respect of failed placing (October 2016)
dispute
The independent auditor's report for the year ended 30 September 2017
contains a material uncertainty paragraph in respect of going concern.
An extract taken from the text of the auditor's opinion is set out below
in part 1 of the notes to this announcement.
Anthony Sanders, Interim Chief Executive and Chairman, commented:
"The last financial year has been a challenging one for the Group. The
year saw a shift in the Group's management and its strategic focus.
Since September 2017, we have set about streamlining our operations and
revising our strategy to bring increased focus to the business. We are
now in a position to prioritise our resources on products and services
that utilise blockchain technology in the digital media and fintech
markets and ignite the commercial potential that exists within the
Group. We would like to thank our shareholders for their continued
support."
For further information:
Milestone Group PLC Tel: 020 7929 7826
Tony Sanders
Cairn Financial Advisers LLP, Nominated Adviser Tel: 020 7213 0880
Liam Murray / Jo Turner
Hybridan LLP, Broker Tel: 020 3764 2341
Claire Louise Noyce
Walbrook PR Limited, PR Tel: 020 7933 8780
Gary Middleton / Paul Cornelius
CHAIRMAN'S STATEMENT
To our valued shareholders
The last financial year has been a challenging one for the Group and we
would like to thank our shareholders for their continued support.
The year saw a shift in the Group's management and its strategic focus.
As Interim Chief Executive Officer, it has been my responsibility to
ensure these changes have transitioned smoothly. Since September 2017,
we have set about streamlining our operations and revising our strategy
to bring increased focus to the business. We are now in a position to
prioritise our resources on products and services that utilise
blockchain technology in the digital media and fintech markets and
ignite the commercial potential that exists within the Group.
Transitioning and management changes
In September 2017, Deborah White resigned from her position as Chief
Executive Officer after nine years with the Group. Deborah guided the
Group through extensive changes and developments, overseeing our
transformation from analogue broadcasting to providing digital and
technology solutions. I have been appointed as Interim Chief Executive
Officer following seven years on the Board as Technical and Development
Director. We thank Deborah for all of her efforts and wish her every
success in the future.
Also in September 2017, and with a view to building a suitable sales and
marketing team, we appointed Edward "Guy" Meyer as Business Development
Director. Guy brings a wealth of experience leading teams across
traditional and digital media, and is the ideal person to lead our sales
and marketing effort as we look to develop new revenues from our
blockchain-based services.
Streamlining operations
Change provides an opportunity for reflection and growth. We have,
therefore, taken time since September 2017 to review our operations, to
create unity within our services, to reduce spending and to channel
costs into areas of the business that align with our revised strategy.
As such, since the period end, we have ceased a number of services that
were centred on delivering social good. These include the Passion
Project, Alchemy, Winning in the Game of Life, and the Milestone
Foundation. We also terminated our membership of the Social Stock
Exchange.
Furthermore, and in light of their inability to deliver satisfactory
results, we decided to cancel a number of other agreements and
contracts. These include: those involving the Milestone Foundation and
Passion Project; the cloud-based virtual banking and pre-paid card
agreement with two London-based finance and investment companies
announced in April 2016; the agreement with an Indian-focused money
transfer and pre-paid card group announced in November 2016; and, a
payroll contract with a UK-based entertainment payroll specialist
announced in October 2016.
Our evaluation of the business determined that a number of these
opportunities had failed to deliver satisfactory results in a reasonable
timespan owing to poor internal and external execution. We are confident
that, with our renewed focus, we will avoid such issues in future.
Fine-tuning our business model
Since the period end, in December 2017, we negotiated a software
licensing agreement with Envoy Group Corp, subject to Shareholder
approval. This grants us an exclusive sublicense for updated versions of
previously announced products, including Backstage HD, MusicRoo, Black
Cactus Music, card programmes and KYC products, and enables us to use
the Black Cactus Global Blockchain platform to build bespoke solutions
whilst developing our own IP.
In February 2018, we signed a memorandum of understanding to enter into
a joint venture (Trust In Media Ltd) with Seed Media Ltd and Martin
Heath, specifically to develop GDPR compliant payment and IP protection
solutions for the music industry, utilising both private and public
blockchain technology. The joint venture will augment our music and
media publishing capabilities.
These developments form the first steps of our revised strategy,
providing the ability to market ready-made products and ensuring we can
utilise this disruptive technology to create new products for the
digital media and fintech markets going forward. We look forward to
expanding our portfolio of products and services, while aiming to work
with best-of-breed strategic partners.
In other business areas, the revenues for the resource management and
reporting platforms, OnSide and OnGuard continue to grow, with all
current clients renewing or expanding their agreements both during and
post period. This area of the business will receive increased marketing
exposure to take advantage of forthcoming GDPR legislation given the
products' ability to validate individuals and access to data. Disorder
Magazine continues to flourish under the media publishing division, and
we are also exploring a number of opportunities to monetise content
produced.
Working capital, fund raisings and other matters
During the year, the Company issued 994,770,335 new ordinary shares for
a total consideration of GBP3,862,421, of which GBP2,516,220 was
received in cash during the year, GBP37,500 was received in cash prior
to the previous year end (held within the shares to be issued reserve),
GBP58,701 was in exchange for goods and services, and, as announced in
November 2016, GBP1.25m was not received. As announced in January 2018,
the Board has reached a settlement with the counterparty, which included
them waiving the rights to the shares. It is now the Company's intention
to dispose of the shares in due course. Since the year-end, the Company
has issued 30,000,000 new ordinary shares following a shareholder
exercising their warrants and raising GBP150,000 in cash.
The Company continues to carefully manage its working capital position
while the changes in strategy take effect and will need to raise further
monies through subscriptions for new shares in the short term. The
Company remains firmly focused on generating revenue through developing
its activities. Protecting the interest of the Company's shareholders is
a priority and the Board's strategy is to seek to raise funds on a basis
that is fair to all.
Results for the year
Despite the Group's net loss for the year of GBP2,257,524 (2016:
GBP1,667,270) and revenues of GBP29,395 (2016: GBP71,359), of which
GBP4,755 (GBP2016: GBP34,104) relates to discontinued operations, the
Group has an improved statement of financial position at the year-end,
showing net liabilities of GBP645,884 (2016: GBP1,019,656).
These results are presented under European Union Adopted International
Financial Reporting Standards ("EU Adopted IFRS").
Shaping the future
Our vision for the future places our operations in harmony, encouraging
stability and stimulating revenue. We are now primed to take advantage
of the potential it offers in our identified markets.
As always, thank you for your support.
Anthony Sanders
Interim Chief Executive Officer and Chairman
21 February 2018
Consolidated statement of comprehensive income for the year ended 30
September 2017
2017 2016
GBP GBP
Revenue 24,640 37,255
Cost of sales (1,964) (13,856)
Gross profit 22,676 23,399
Other operating income - 1,738
Realised gain on disposal 1 -
Administrative expenses (2,261,107) (1,790,794)
(2,261,106) (1,789,056)
Loss from operations (2,238,430) (1,765,657)
Net finance expense (2,961) (2,104)
Loss before taxation (2,241,391) (1,767,761)
Taxation charge - 96,245
Loss from continuing operations (2,241,391) (1,671,516)
(Loss) / profit from discontinuing operations net
of tax (16,133) 4,246
Total comprehensive loss for the year (2,257,524) (1,667,270)
Attributable to owners of the parent (2,257,524) (1,667,270)
Basic and diluted loss per share (pence) (0.20) (0.25)
Consolidated statement of financial position at 30 September 2017
2017 2016
GBP GBP
Non-current assets
Intangible assets 1 1
1 1
Current assets
Trade and other receivables 77,137 187,836
Cash and cash equivalents 749,972 128,462
827,109 316,298
Current liabilities
Trade and other payables (1,179,967) (1,201,928)
Interest bearing loans (293,027) (134,027)
(1,472,994) (1,335,955)
Net (liabilities) (645,884) (1,019,656)
Capital and reserves attributable to
owners of the Company
Share capital 1,778,768 783,998
Share premium account 17,954,376 15,073,350
Shares to be issued - 63,081
Share reserve (1,250,000) -
Merger reserve 11,119,585 11,119,585
Capital redemption reserve 2,732,904 2,732,904
Retained losses (32,981,517) (30,792,574)
Total Equity (645,884) (1,019,656)
Consolidated statement of cash flows for the year ended 30 September
2017
Cash flow from operating activities 2017 2016
GBP GBP
Loss for the year (2,257,524) (1,667,270)
Adjustments for:
Amortisation of intangible assets - 18,913
Net bank and other interest charges 2,961 2,104
Services settled by the issue of shares 45,326 45,799
Issue of share options and warrants charge 68,581 883,878
Net cash outflow before changes in working capital (2,140,656) (716,576)
Decrease / (Increase) in trade and other receivables 110,700 (124,358)
(Decrease) in trade and other payables (20,793) (572,523)
Cash outflow from operations (2,050,749) (1,413,457)
Interest received 14 19
Interest paid (1,475) (623)
Net cash flows from operating activities (2,052,210) (1,414,061)
Financing activities
Issue of ordinary share capital 2,516,220 1,424,028
Repayment of loan (155,000) (65,000)
New loans raised 312,500 91,000
Net cash flows from financing activities 2,673,720 1,450,028
Net increase in cash 621,510 35,967
Cash and cash equivalents at beginning of year 128,462 92,495
Cash and cash equivalents at end of year 749,972 128,462
Consolidated statement of changes in equity for the year ended 30
September 2017
Share Share Shares to Other Retained Total
Capital Premium be issued Reserves Earnings Equity
GBP GBP GBP GBP GBP GBP
Balance at 30 Sept
2015 592,086 13,395,669 502,848 13,852,489 (30,049,182) (1,706,090)
Loss for the year - - - - (1,667,270) (1,667,270)
Cash received in
advance of share
issue - - 63,081 - - 63,081
Contingent
consideration
written off - - (40,000) - 40,000 -
Shares issued 191,912 1,677,681 (462,848) - - 1,406,745
Share options - - - - 883,878 883,878
Balance at 30 Sept
2016 783,998 15,073,350 63,081 13,852,489 (30,792,574) (1,019,656)
Loss for the year - - - - (2,257,524) (2,257,524)
Shares issued 994,770 2,881,026 (63,081) (1,250,000) - 2,562,715
Share options - - - - 68,581 68,581
Balance at 30 Sept
2017 1,778,768 17,954,376 - 12,602,489 (32,981,517) (645,884)
Notes to the financial information
1. Basis of preparation
Milestone Group Plc is a company registered and resident in England and
Wales. The financial information set out in this announcement does not
constitute the Group's statutory accounts, as defined in Section 435 of
the Companies Act 2006, for the years ended 30 September 2017 or 30
September 2016, but is derived from the 2017 Annual Report. Statutory
accounts for 2016 have been delivered to the Registrar of Companies and
those of 2017 will be delivered in due course. The consolidated
statement of comprehensive income, consolidated statement of financial
position, consolidated cash flow, consolidated statement of changes in
equity (above) and associated notes are extracts from the financial
statements and do not constitute the Group's statutory accounts.
Statutory accounts for the year to 30 September 2016 and 30 September
2017 have been reported on by the Independent Auditors. The Group
financial statements have been prepared and approved by the Directors in
accordance with International Financial Reporting Standards as adopted
by the EU ("EU Adopted IFRSs"). The Independent Auditor's Report on the
Annual Report and Financial Statements for 2016 and for 2017 was
unqualified, but did draw attention to matters by way of emphasis
relating to the basis of preparation, which is reproduced below and was
substantively similar for both years. In forming the Auditor's opinion
on the financial statements, which is not modified, the Auditor's have
considered the adequacy of the disclosure made in note 1 to the
financial statements concerning the Group's ability to continue as a
going concern. "The going concern status of the Group is dependent upon
the management of the timing of settlement of its liabilities and the
raising of further funds in the immediate to short term and thereafter
on the forecast profitability of new strategic partnerships and joint
ventures which have recently commenced and for which the degree of
success cannot yet be reliably demonstrated. Forecasts prepared by
management indicate that if they are unable to manage the Group's
liabilities as planned or the external fundraising does not occur in the
immediate term and, subsequently, the future projects do not prove as
profitable as forecast the Group would have an immediate requirement to
seek alternative sources of funding. As stated in note 1, these
conditions indicate that a material uncertainty exists which casts
significant doubt on the Group's ability to continue as a going
concern." The basis of preparation is reproduced below.
Going Concern
The Group's business activities, together with the factors likely to
affect its future development, performance and position are set out in
the Chairman's statement and below. The financial position of the Group,
its cash flows, liquidity position and borrowing facilities are
described in the financial statements. In addition, note 16 to the
financial statements includes the Group's objectives, policies and
processes for managing its capital; its financial risk management
objectives; details of its financial instruments; and exposures to
credit risk and liquidity risk. The net liability position as at 30
September 2017, being the Group's financial year-end, was GBP645,884
(2016: GBP1,019,656). Subsequent to the reporting date, the Board has
been able to agree funding in the form of further share issues raising
GBP150,000 in cash through the exercising of certain warrants. The
funding received to date will go part way to cover year-end liabilities,
and the Company will be dependent upon future funding and revenues to
meet the remaining obligations, as discussed below. The Company
continues to be reliant upon its continuing ability to manage the timing
of settlement both of its current liabilities and future liabilities as
they arise. There is also a need for successful on-going equity
fundraises and / or loans in the immediate to short term thereafter,
while sales plans and projections come into effect, especially in
relation to revenues generated from new strategic partnerships and joint
ventures. The Board has prepared forecasts to reflect the revenues
expected to be generated by the Group and partnerships. The Company is
fully focused on ensuring that sales plans are followed to ensure that
the business becomes self-sustaining in the near future. The Directors
have concluded that the need to generate future funds from further
fundraising and from trading activities to satisfy the settlement of its
on-going and future liabilities represents a material uncertainty, which
may cast significant doubt upon the Group's and the Company's ability to
continue as a going concern. Nevertheless, after making enquiries and
considering this uncertainty and the measures that can be taken to
mitigate the uncertainty, the Directors have a reasonable expectation
that the Group and the Company will have adequate resources to continue
in existence for the foreseeable future. For these reasons they continue
to adopt the going concern basis in preparing the annual report and
accounts. The financial statements do not include any adjustments that
would result if the Group and Company was unable to continue as a going
concern.
2. Loss per share
The calculation of the basic loss per share is based on the loss
attributable to ordinary shareholders divided by the weighted average
number of shares in issue during the year. The calculation of diluted
loss per share is based on the basic loss per share, adjusted to allow
for the issue of shares and the post tax effect of dividends and
interest, on the assumed conversion of all other dilutive options and
other potential ordinary shares. There were 163,213,116 share options
and 248,431,460 share warrants outstanding at the year-end (2016:
174,189,116 and 110,931,460). However, the figures for 2017 and 2016
have not been adjusted to reflect conversion of these share options, as
the effects would be anti-dilutive.
2017 2016
Weighted Weighted
Per Per
average share average share
Loss number of amount Loss number of amount
GBP shares Pence GBP shares Pence
Basic and
diluted loss
per share
attributable
to
shareholders (2,257,524) 1,115,347,198 (0.20) (1,667,270) 653,810,277 (0.25)
3. Posting of Accounts
The Report and Accounts of Milestone Group Plc, including the Notice of
Annual General Meeting will be posted to shareholders shortly. A further
announcement will be made by the Company at such time.
This announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: Milestone Group PLC via Globenewswire
http://www.milestonegroup.co.uk/
(END) Dow Jones Newswires
February 22, 2018 02:00 ET (07:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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