TIDMRAM
RNS Number : 4553J
RAM Investment Group PLC
30 June 2011
For immediate release 30 June 2011
RAM INVESTMENT GROUP PLC
("RAM" or the "Company")
PRELIMINARY RESULTS
RAM Investment Group, the AIM-listed investor in digital
technologies, announces its preliminary results for the 12 months
ended 31 December 2010.
Highlights:
-- Takeover of TrainFX completed
-- Successful renegotiation of RAM Vision contracts
-- Group businesses became revenue generating
-- Gross profit GBP594,591 (2009: GBP136,155)
-- Loss before tax GBP3.24m (2009: GBP1.85m)
-- Up to GBP1m of non-recurring costs absorbed
RAM Chairman Tim Baldwin said: "Last year was one of major
progress for the Group albeit not without its problems. We
continued to pursue our strategy of developing RAM Vision and
acquiring the remaining equity interest in TrainFX".
"Both companies became revenue generating in the year. TrainFX
recorded its first material revenue after a number of years in
research and development and RAM Vision its first revenue as a
brand new company".
"The measures the Board has announced alongside the publication
of these results are aimed at putting the business on a sound
financial footing. They will give the Company a strong balance
sheet, and ensure the cash generated can be used to reinvest in the
business and lead to the payment of dividends in the future".
"The current year will prove a pivotal one in the growth of the
Company. Current trading is in line with expectations and both
businesses are scaleable on relatively fixed overhead with good
gross margins. We now feel confident that we have created a
platform for creating a profitable Group in the next few years that
will provide long term value for shareholders".
-ends-
For further information please call:
Tim Baldwin RAM Investment Group plc 0207 518 4303
Sandy Jamieson Libertas Capital Corporate Finance Limited 0207
569 9650
Jon Levinson Rivington Street Corporate Finance Limited 0207 562
3357
Chairman's Statement
Overview
Last year was one of major progress for the Group albeit not
without its problems. We continued to pursue our strategy of
developing RAM Vision Limited ("RAM Vision") and acquiring the
remaining equity interest in TrainFX Limited ("TrainFX").
We completed a lengthy AIM compliant reverse takeover of TrainFX
in September 2010 by acquiring the remaining 50.1% of the equity
which we did not own. Having brought the assets that make up RAM
Vision out of administration, we successfully renegotiated its
contracts with its existing clients and major property owners.
Both companies became revenue generating in the year. TrainFX
recorded its first material revenue (after a number of years in
research and development) and RAM Vision its first revenue as a
brand new company.
Despite the positive progress in building the Group, the year
was not without its challenges as the pre-tax loss of GBP3.3
million demonstrates. However, up to GBP1 million of that loss is
due to non-recurring costs incurred for reverse takeover costs,
legal and professional fees, financing fees, sales and marketing
consultancy costs, share options cost and impairment of available
for sale financial assets.
On the revenue side we undershot expectations due to unforeseen
circumstances as certain contracts awarded to TrainFX which should
have started to yield payments in the last quarter of 2010 were
subsequently rescheduled due to the programme of roll out being
delayed. However, this does mean that the first half of 2011 has
benefited from that revenue dropping into this year. In addition
RAM Vision underperformed in relation to sales expectations for
2010, albeit it had a stronger performance in comparison to the
previous year using the same assets base. A change in management
and in the sales department has had a positive impact on the
business in the first half of 2011.
The Company raised GBP2.5 million a mixture of debt and equity
during the year to build, develop and acquire these businesses
despite a very tough market to raise equity capital for small
businesses, particularly for the digital out of home sector. We now
feel confident that we have created a platform for creating a
profitable Group in the next few years that will provide long-term
value for shareholders. Our strategy will remain focused on the
construction of a digital technology and media platform that can be
used across the travel, retail and leisure sectors.
Whilst the businesses are showing solid progress in 2011 with a
bright outlook ahead, the Group has been travelling with too much
debt on the balance sheet for an early stage business. As a
consequence this has constrained growth and caused some prospective
investors to not invest and give grounds for our competitors to
attack us.
The measures your Board has announced alongside the publication
of these results are aimed at putting the business on a sound
financial footing as it continues to grow in the years ahead and
deal with the issues above. They will give the Company a strong
balance sheet, and ensure the cash generated can be used to
reinvest in the businesses and lead to the payment of dividends in
the future.
The Company also recognises that the name of the holding company
is outdated and does not represent the nature of the business and
we are therefore seeking shareholder approval to change the name to
RAM Active Media at the forthcoming AGM. The Company was
reclassified this year into Media and Media broadcasting.
RAM Vision
The Board was not pleased with the revenue performance of RAM
Vision during 2010 but satisfied with the developing foundations of
the business in its 14 months of operation. Steps were taken to
improve the revenue performance in the early part of the year and
these are bearing fruit.
Contracts of the original business bought out of administration
were successfully renegotiated. These contracts are for its Digital
out of Home ("DOOH") advertising business trading across 62
locations within the UK and offering an annual footfall of more
than 650 million. This has led to major global brands advertising
with us including Coca Cola, Mars, Intel, BT, American Express,
Microsoft, SONY, Paramount and Universal Pictures. These contracts
were won both through our in-house sales team and working in
partnership with large agencies.
Towards the end of the year the Company announced a partnership
and supply agreement with MMD-Philips for the new generation of
iconic video walls. These are currently being rolled out and will
help us achieve our objective of enhancing the estate by seeking
contracts with other mall owners in 2011 and beyond. Our roll out
strategy has been predicated on finding suitable funding and the
Company is in advanced stages of contract negotiations to find an
off balance sheet finance structure to allow this to
accelerate.
Around the same time we also announced we were in talks with a
potential partner to market a 3D advertising screen system viewable
without glasses. At the start of this year we were able to announce
a joint venture with Free Ray, the Dubai-based sole distributor of
Tridelity, the German screen manufacturer which has developed a 3D
format that does not need the use of glasses. Free Ray is to invest
around GBP1.5 million capital expenditure into the project and we
are projecting gross sales of GBP600,000 in the first year of
critical mass deployment. Screens have arrived in the UK and are
being deployed.
RAM Vision is now a leading player in the growing digital out of
home advertising sector which itself is a growth market. We believe
the platform is now set for growth in the years ahead. The business
is expected to be self sustainable through the last quarter of 2011
but this will in part be dependent on economic conditions. The
Company has the ability to scale without the need to increase
materially its overheads.
TrainFX
TrainFX is a dominant player in its specialist market of
providing digital communication solutions to the rail industry. Its
leading edge technology includes Passenger Information,
Communication and Security Systems ("PICS"). The PICS system has
been engineered for both the new build and retrofit rail markets.
In the current age of austerity it is the retrofit market that is
driving the business forward.
TrainFX secured some GBP2.5 million of contracts for the
retrofit of passenger information systems with leading companies
such as First Great Western, WABTEC (Southern Railway), Chiltern
and LNWR Arriva Wales. With European legislation requiring that all
trains must conform to Passengers with Reduced Mobility ("PRM")
regulations systems by 2020, we are confident of winning more
contracts in the UK.
As mentioned above the contract had a delayed start to the
programme. This subsequently led to payments being deferred from
the end of 2010 to the first quarter of 2011. Even so 2010 was one
of success in negotiating contracts with train operating and rail
stock companies from a standing start.
The Company continues to develop its innovative technology and
now has a series of products ready to be rolled out including an
energy metering system which will help rail companies monitor their
energy usage and carbon emissions. The Company has also added to
the portfolio a passenger counting solution which has already been
purchased and installed and is operational on the Southern Rail
Train Operating Fleet. The scale of the available market to us is
substantial and the Company is confident of winning a reasonable
share of this market on cost and technological innovation. TrainFX
has absorbed more capital than originally expected due to delays
but the business is close to being self sustainable and is very
scaleable on a modest overhead.
Employees
The Company could not have made the major progress it has
without the dedication and commitment of its employees. The Group
employs people with a broad depth and range of excellent skills
covering engineering, creative digital media, finance and sales and
marketing. The Board wishes to thank them for their efforts in
making RAM Investment Group plc the major player it has become
within its sectors.
Events after reporting date
The Company has announced with these results a fundraising of
GBP2.42 million through an equity placing of GBP2.27 million and
convertible loan note of GBP0.15 million. This enabled the Company
to repay its senior debt of GBP1.5 million to TVI 2 Limited on 29
June 2011.
Going concern and auditors' report
New funding will allow us to develop and manage our portfolio in
2011 and we are confident we can achieve this. The financial
statement does not include the adjustments that would result if the
Group is unable to continue as a going concern. In the event that
the Group ceased to be a going concern, the adjustments would
include writing down the carrying value of assets to their
recoverable amount and providing for any further liabilities.
The auditors' report on the financial statements for the year
ended 31 December 2010 is not qualified, but includes an emphasis
of matter in respect of this material uncertainty over going
concern.
Outlook
The current year will prove a pivotal one in the growth of your
Company. Current trading is in line with expectations. RAM Vision
and TrainFX have exciting futures and are developing self
sustaining business plans. Both businesses are scaleable on
relatively fixed overheads with good gross margins.
National advertisers are increasingly recognising DOOH as an
effective medium for advertising and RAM Vision's national network
delivers the critical mass they seek. The trade body, the Outdoor
Media Centre, announced in January 2011 DOOH revenues passed the
GBP100 million threshold for the first time. This puts digital's
share of all outdoor advertising revenues at 11.4% for the full
year. With the installation of the new iconic video walls, giving
us the largest portfolio of landscape and walkway screens in the
UK, RAM Vision expects to enhance its revenues by more than GBP3
million in 2011. The collaboration with Free Ray UK and the zero
capital expenditure exposure to the business is also expected to
enhance revenues in subsequent years post deployment.
Equally we have high hopes for TrainFX moving forward. We have
already announced the completion of the Southern Rail refurbishment
contract and in April announced a major contract with LNWR for a
dual language advanced passenger information system for Arriva
Trains.
The rail market is being driven by legislation and refranchising
as well as the move towards refurbishing old stock. TrainFX has the
ability to submit multiple tenders for contracts and is currently
in discussion with several clients.
We are expecting that the skills sets that exist within our two
operating companies will allow us to develop a third line of
business: Media Rail, which we believe can be significant. We will
have first mover advantage in the UK for this exciting new market,
allowing global and national brands to advertise on digital screens
to a captive travelling audience. The model is already successfully
running in Canada, China and Germany.
The last few years have seen the Company change from a shell
company to a holding company of trading companies. The Board has
reduced as far as possible the central costs over the last six
months with management focused on delivering profitability out of
the two subsidiaries. Your Board is keen to explore any related
acquisition opportunities which have synergy with its subsidiaries
and is in active discussion in this respect. These will be
considered where immediate shareholder value can be created.
On a personal note I now believe the Company is now on a firm
footing with two well managed self autonomous business units. As
such I believe my services will not be required full time going
forward. I continue to believe that these businesses offer great
long-term potential and that the risk on both the trading side and
balance sheet has been much reduced. It is my intention to pursue
other full time interests and to take a reduced role in the
Group.
Tim Baldwin
Executive Chairman
RAM INVESTMENT GROUP PLC
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2010
2010 2009
GBP GBP
Continuing operations
Revenue 1,330,127 360,753
Cost of sales (735,536) (224,598)
----------------------------------------- ------------ ------------
Gross profit 594,591 136,155
Administrative expenses (3,407,441) (1,682,179)
Administrative expenses - exceptional
item 94,039 -
----------------------------------------- ------------ ------------
(2,718,811) (1,546,024)
Loss on disposal of assets (39,251) (148,997)
----------------------------------------- ------------ ------------
Operating Loss (2,758,062) (1,695,021)
Finance income - 85
Finance costs (482,610) (127,281)
----------------------------------------- ------------ ------------
Finance costs - net (482,610) (127,196)
Share of loss of associate - (29,048)
----------------------------------------- ------------ ------------
Loss before income tax (3,240,672) (1,851,265)
Income tax expense - -
----------------------------------------- ------------ ------------
Loss for the year from continuing
operations (3,240,672) (1,851,265)
Loss attributable to:
Owners of the parent (3,240,672) (1,492,304)
Non-controlling interest - (358,961)
----------------------------------------- ------------ ------------
(3,240,672) (1,851,265)
----------------------------------------- ------------ ------------
Earnings per share
Basic earnings per share - continuing
and total operations (3.3)p (3.5)p
Diluted earnings per share - continuing
and total operations (3.3)p (3.5)p
----------------------------------------- ------------ ------------
RAM INVESTMENT GROUP PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2010
2010 2009
Note GBP GBP
Loss for the year (3,240,672) (1,851,265)
Other comprehensive income:
Changes in fair value of available
for sale financial assets (62,825) (225,243)
Other comprehensive income for the
year, net of tax (62,825) (225,243)
-------------------------------------------- ------------ ------------
Total comprehensive income for the
year (3,303,497) (2,076,508)
Attributable to:
Owners of the parent (3,303,497) (1,717,547)
Non-controlling interest - (358,961)
-------------------------------------------- ------------ ------------
Total comprehensive income for the
year (3,303,497) (2,076,508)
-------------------------------------------- ------------ ------------
RAM INVESTMENT GROUP PLC
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2010
2010 2009
GBP GBP
Assets
Non-current assets
Property, plant & equipment 361,543 277,133
Intangible assets 2,105,492 2,163,834
Available-for-sale financial assets 164,574 365,650
-------------------------------------- ------------- -------------
2,631,609 2,806,617
-------------------------------------- ------------- -------------
Current assets
Inventory 491,363 -
Trade and other receivables 977,707 608,143
Cash and cash equivalents 440,915 439,390
-------------------------------------- ------------- -------------
1,909,985 1,047,533
-------------------------------------- ------------- -------------
Total assets 4,541,594 3,854,150
-------------------------------------- ------------- -------------
Equity
Capital and reserves attributable to
equity holders of the company
Ordinary shares 1,214,055 759,884
Deferred shares 9,983,447 9,983,447
Share premium account 16,546,420 14,876,985
Merger reserve 327,272 327,272
Shares to be issued reserve 634,663 113,799
Retained earnings (28,600,649) (23,310,115)
-------------------------------------- ------------- -------------
Non-controlling interest - (358,961)
-------------------------------------- ------------- -------------
Total equity 105,208 2,392,311
-------------------------------------- ------------- -------------
Liabilities
Non current liabilities
Borrowings - 190,000
- 190,000
Current liabilities
Trade and other payables 2,345,797 1,056,839
Borrowings 2,090,589 215,000
-------------------------------------- ------------- -------------
4,436,386 1,271,839
-------------------------------------- ------------- -------------
Total liabilities 4,436,386 1,461,839
-------------------------------------- ------------- -------------
Total equity and liabilities 4,541,494 3,854,150
-------------------------------------- ------------- -------------
RAM INVESTMENT GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2010
Shares
to be
Share Share Retained issued Merger Non-controlling Total
capital premium earnings reserve Reserve Total interest equity
GBP GBP GBP GBP GBP GBP GBP GBP
Balance at
1 January
2009 10,116,600 11,601,271 (21,592,568) - - 125,303 - 125,303
Loss for
year - - (1,492,304) - - (1,492,304) (358,961) (1,851,265)
Other
comprehensive
income:
Changes in
fair value
of available
for sale
financial
assets - - (225,243) - - (225,243) - (225,243)
Transactions
with owners:
Issue of
share capital 626,731 3,369,156 - - 327,272 4,323,159 - 4,323,159
Costs of
issue of
share capital - (93,442) - - - (93,442) - (93,442)
Share options
issued - - - 103,799 - 103,799 - 103,799
Convertible
loan-equity
component - - - 10,000 - 10,000 - 10,000
Balance as
at 31 December
2009 10,743,331 14,876,985 (23,310,115) 113,799 327,272 2,751,272 (358,961) 2,392,311
----------------- ----------- ----------- ------------- -------- -------- ------------ ---------------- ------------
Loss for
year - - (3,240,672) - - (3,240,672) - (3,240,672)
Purchase of
non-controlling
interest - - (1,987,037) - - (1,987,037) 358,961 (1,628,076)
Other
comprehensive
income:
Changes in
fair value
of available
for sale
financial
assets - - (62,825) - - (62,825) - (62,825)
Transactions
with owners:
Issue of
share capital 454,171 1,704,719 - - - 2,158,890 - 2,158,890
Costs of
issue of
share capital - (35,284) - - - (35,284) - (35,284)
Share options
issued - - - 471,453 - 471,453 - 471,453
Convertible
loan-equity
component - - - 49,411 - 49,411 - 49,411
Balance as
at 31 December
2010 11,197,502 16,546,420 (28,600,649) 634,663 327,272 105,208 - 105,208
----------------- ----------- ----------- ------------- -------- -------- ------------ ---------------- ------------
RAM INVESTMENT GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 31 DECEMBER 2010
2010 2009
GBP GBP
Cash flows from operating activities
Loss before tax (3,303,497) (2,076,508)
Adjustments for:
Depreciation 180,455 84,461
Equity-settled share based payment
transactions 271,453 178,149
Share of loss from associate - 29,048
Net finance income recognised in
profit or loss 482,610 127,197
Change in value of available for
sale financial assets 62,825 225,243
Loss on disposal of financial assets 39,251 114,120
----------------------------------------- ------------ ------------
(2,266,903) (1,318,290)
Changes in working capital:
Increase in inventories (491,363) -
Increase in trade and other receivables (361,731) (199,348)
Increase/(decrease) in trade and
other payables 1,281,126 (675,052)
----------------------------------------- ------------ ------------
Cash used in operations (1,838,871) (2,192,690)
Interest paid (482,610) (127,281)
----------------------------------------- ------------ ------------
Net cash used in operating activities (2,321,481) (2,319,971)
----------------------------------------- ------------ ------------
Cash flows from investing activities
Interest received - 85
Loans granted to associate - (159,499)
Proceeds from sale of investment 99,000 157,915
Acquisition of plant & machinery (206,525) (34,632)
Acquisition of subsidiary net of
cash (1,428,075) 10,121
Acquisition of goodwill - (175,000)
----------------------------------------- ------------ ------------
Net cash used in investing activities (1,535,600) (201,010)
----------------------------------------- ------------ ------------
Cash flows from financing activities
Proceeds from issue of shares 2,123,606 2,590,506
Proceeds from issue of convertible
loan notes 450,000 200,000
Proceeds from borrowings 1,792,500 335,000
Repayment of other short term loans (507,500) (195,000)
Net cash generated from financing
activities 3,858,606 2,930,506
----------------------------------------- ------------ ------------
Increase in cash equivalents 1,525 409,525
Cash and cash equivalents at beginning
of year 439,390 29,865
Cash and cash equivalents at end
of year 440,915 439,390
----------------------------------------- ------------ ------------
The financial information in this announcement does not comprise
statutory accounts for the purpose of Section 435 of the Companies
Act 2006 for the years ended 31 December 2009 or 2010. It has been
extracted from the Company's consolidated accounts for the period
to 31 December 2010 which are audited.
Whilst the information in this announcement has been prepared in
accordance with recognition and measurement criteria of
International Financial Reporting Standards (IFRS's) this
announcement in itself does not give sufficient information to
comply with IFRS's.
Going concern
The Directors are aware that the Group's future solvency is
dependent on successful fundraising in order to implement the
Group's investment strategy. Since the end of the accounting period
there has been considerable progress made towards achieving the
Group's objectives. The Group has successfully raised GBP2.42
million through an equity placing and convertible loan and this has
been used to discharge the senior debt of GBP1.5 million.
The financial statements have been prepared on the going concern
basis which assumes that the Company and its subsidiaries will
continue in operational existence for the foreseeable future. The
validity of this assumption depends on the successful raising of
additional funds by a share issue.
Whilst the Directors are presently uncertain as to the outcome
of future fundraising, they believe that it is appropriate for the
financial statements to be prepared on the going concern basis
having considered the forecasts for the twelve-month period from
the date of signing these financial statements and believe that the
Group's financial resources will be sufficient to enable the Group
to continue in operation for the foreseeable future.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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