RNS Number:4538U
SPG Media Group Plc
22 November 2005
SPG MEDIA GROUP PLC
Interim Report 2005/06
For the six months ended 30 September 2005
www.spgmedia.com
Contents
Chairman's Statement
Consolidated Profit and Loss Account
Consolidated Balance Sheet
Consolidated Cash Flow Statement
Notes to the Accounts
Operating highlights
Turnover #8.6 million (2004: #9.2 million)
Operating profit #0.2 million (2004: #0.1 million before
adjustment for change in
accounting policy)
Cash generated by operations #0.2 million (2004: #0.1 million)
Cash in hand #0.2 million (2004: Net debt #0.5 million)
Chairman's Statement
Trading results
I am pleased to announce that we have increased the Group's operating profit to
#0.2 million (2004: #0.1 million, before exceptional items) for the six months
ended 30 September 2005, an increase of 23.1% over the same period for last
year.
Turnover fell from #9.2 million to #8.6 million, all of which was within our
publishing business, where the revenue fell from #4.2 million to #3.3 million. A
new and experienced managing director has been appointed to tackle the long term
issues that this business faces.
The emedia business delivered level revenues at #3.0 million with our events
business increasing revenues to #2.3 million up 22.4%.
Emedia
We continue to restructure the Group to become an international marketing
company focussed around service provision on the web.
The first stage of that process began on 7 October 2005 with the launch of our
packaging portal, which provides the packaging industry with a definitive point
of reference using search services to trace packaging information.
We will continue to develop this site starting the process of rolling out this
service concept in our core products over the coming months. Revenues for this
division were level for the six months ended 30 September 2005 at #3.0 million.
Publishing
We appointed Graham Anderson, formerly a director of EMAP Construct Limited
where he was publishing director, in August 2005. Graham comes with combined
skills in print and web based publishing. He is an ex-journalist with 10 years
of management experience.
Revenues within the publishing business reduced to #3.3 million (2004: #4.2
million) principally due to the reduction in the number of publishing titles and
corresponding reductions in our salesforce.
The Group is focused on improving the quality of its core publications with
plans to increase the frequency of various publications to build industry
interest and awareness in support of our overall integrated media strategy.
Events
The events division has performed well with growth of 22.4% representing an
increase in revenues of #0.4 million to #2.3 million over the first six months.
This has been achieved through increasing the average revenue per event rather
than increasing the number of events we have run.
Our events programme for the second six months is also looking positive. We are
launching our first cross media event, PACE, which will support our emedia
portal initiative for the packaging industry. We will be cross promoting all our
services at this event, as such this will be our first presentation of an
integrated media marketing solution to our customers.
Costs
We have seen our cost base reduced by #580,000. Control of costs is a major
factor for the management and will be rigorously controlled within all of our
business units.
Net Funds
The group produced net cash flow from operating activities of #237,000 and made
capital expenditure of some #263,000. Together with other cash flow adjustments
the Group finished the period with net funds of #152,000.
Adoption of International Financial Reporting Standards ("IFRS")
As required by AIM the company and its subsidiaries will be adopting the new
IFRS from 1 January 2007. An impact statement is required to be made on the
results for the year ending 31 March 2006. This statement will include the
effect of the adoption of Share Based Payments (IFRS2), Intangible Assets
(IAS38) and Provisions under IAS37.
Change in calculation of work in progress
Following a review of the balance sheet the Board have decided to change the
method of calculating work in progress. The calculation included absorption of
overheads. Rather than continue this calculation the Board have decided to adopt
a policy where attributable costs are carried forward against the publication or
event. As a result of this review a net #1.2 million has been released from work
in progress. As this is a change of accounting policy it has been shown as a
prior year adjustment. The effect on the prior period has been to increase the
charge in the six months by #0.4 million. A release was made in the second six
months of the year ended 31 March 2005. A charge was made to the reserves
brought forward of #1.3. This is a one off charge and the results of the Group
will not benefit from this release going forward as these costs will be charged
on an as incurred basis. This new accounting policy is appropriate as the
business moves towards its aim of a greater spread of products being produced
and published throughout the year.
Board changes
On 5th September 2005 Keith Sadler joined the Board as Group Finance Director.
Keith brings extensive media experience to the Board having been Group Finance
Director of The Wireless Group plc, radio broadcasting, two quoted regional
newspaper publishing groups and Group Treasurer of Mirror Group Newspapers. I
welcome him to the Board.
Outlook
As with all companies in transition we face many challenges that can affect our
operating results. There continues to be pressure on our publishing revenues.
However, led by a considerably strengthened management team I look forward to
continuing improvements in the underlying performance of the Group.
Stephen Davidson
Chairman
21 November 2005
Consolidated profit and loss account
Six months ended Six months ended Year ended 31
30 Sept 2005 30 Sept 2004 March 2005
Restated* Restated*
(unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000
Turnover 2 8,697 9,151 18,861
Less share of joint venture turnover (55) - (21)
Group turnover 8,642 9,151 18,840
Cost of sales (4,123) (4,876) (10,485)
Gross profit 4,519 4,275 8,355
Distribution costs (264) (203) (366)
Administrative expenses (4,079) (4,387) (11,321)
Administrative expenses (before exceptional
items) (4,079) (4,303) (8,460)
Exceptional items - (84) (2,861)
Total administrative expenses (4,079) (4,387) (11,321)
Operating profit/(loss) 176 (315) (3,332)
Share of joint venture operating loss (36) - (10)
Profit on disposal of business - - 429
Finance charges - net (82) (38) (75)
Profit/(loss) on activities before taxation 58 (353) (2,988)
Tax on profit/(loss) on ordinary activities 4 - - (6)
Profit/(loss) on ordinary activities after
taxation and retained loss for the financial
year 9 58 (353) (2,994)
Basic profit/(loss) per share 5 0.07p (0.04)p (3.53)p
Diluted profit/(loss) per share 5 0.06p (0.04)p (3.53)p
* 2004/2005 results have been restated for the change in accounting policy. This
is described in note 1; Preparation of the interim financial information.
Consolidated statement of total recognised gains and losses
Six months Six months Year ended
ended 30 Sept ended 30 Sept 31 March
2005 2004 2005
Restated Restated
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Profit/(loss) for the period 58 (353) (2,994)
Exchange rate differences 6 - (5)
Total recognised gains and losses in the period 64 (353) (2,999)
Prior year adjustment - change in accounting policy
relating to work in progress - (1,312) (1,312)
Adjustment relating to purchase of own shares - - (145)
Release of negative goodwill on sale of Debretts - - (225)
Total recognised gains and losses in the period 64 (1,665) (4,681)
Reconciliation of movements in shareholders' funds
Six months Six months Year ended
ended 30 Sept ended 30 Sept 31 March
2005 2004 2005
Restated Restated
(unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000
Profit/(loss) for the period 58 (353) (2,994)
Other recognised gains and losses 6 - (230)
64 (353) (3,224)
Opening shareholders' funds as previously reported - 8,903 8,903
Change of accounting policy 1 - (1,312) (1,312)
Restated opening shareholders' funds 4,367 7,217 7,643
Closing shareholders' funds 4,431 7,238 4,367
Consolidated Balance Sheet
As at As at As at
30 Sept 2005 30 Sept 2004 31 March 2005
Restated Restated
(unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000
Fixed assets
Intangible assets 4,381 5,061 4,407
Tangible assets 2,337 2,786 2,580
Investment in joint venture 19 - 55
6,737 7,847 7,042
Current assets
Stocks and work in progress 2,983 3,740 3,257
Debtors 4,241 3,957 4,390
Cash at bank and in hand 7 204 87 233
7,428 7,784 7,880
Creditors - amounts falling due within one year
Trade and other creditors (6,699) (6,797) (7,160)
Bank loans and overdrafts 7 - (583) -
(6,699) (7,380) (7,160)
Net current assets 729 404 720
Total assets less current liabilities 7,466 8,251 7,762
Creditors - amounts falling due after more than
one year (44) - (48)
Provisions for liabilities and charges 8 (2,991) (1,013) (3,347)
Net assets 4,431 7,238 4,367
Capital and reserves
Called up share capital 9 4,293 4,293 4,293
Own shares 9 (86) (86) (86)
Share premium account 9 7,262 7,262 7,262
Capital redemption reserve 9 7,874 7,874 7,874
Other reserves 9 733 733 733
Profit and loss account 9 (15,645) (12,838) (15,709)
Equity shareholders' funds 4,431 7,238 4,367
Consolidated cash flow statement
Six months ended Six months Year ended 31
30 Sept 2005 ended 30 Sept March 2005
2004
Restated Restated
(unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000
Net cash inflow from operating activities 6 237 99 666
Returns on investments and servicing of
finance
Interest received and similar items 4 2 8
Interest paid - (11) (27)
Interest element of finance lease payments (2) - (2)
Taxation
Overseas corporation tax paid - - (6)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (263) (245) (569)
Investments in joint venture - - (65)
Acquisitions and disposals
Net cash inflow from sale of trading assets - - 569
Net cash flow before financing (24) (155) 574
Financing
Capital element of finance lease payments (3) - (3)
(Increase)/decrease in net debt in the period (27) (155) 571
Reconciliation of net cash flow to movement
in net debt
Increase/(decrease) in cash in the period (27) (155) 574
Cash outflow from lease financing 3 - 3
Change in net debt resulting from cash flows (24) (155) 577
New finance lease obligations - - (58)
Exchange movement (2) - -
Movement in net funds for the period (26) (155) 519
Opening net funds/(debt) 7 178 (341) (341)
Closing net funds/(debt) 7 152 (496) 178
Notes to the accounts
1. Preparation of the interim financial statements
The abridged profit and loss account and balance sheet for the previous
financial year do not constitute statutory accounts within the meaning of
Section 240 of the Companies Act 1985 and are extracted from the latest
published statutory accounts for the year ended 31 March 2005 which have been
delivered to the Registrar of Companies. The auditors' report on these accounts
was unqualified and did not contain any statement under Section 237 of the
Companies Act 1985.
The Interim financial information has been prepared on the basis of the
accounting policies set out in the statutory accounts for the year ended 31
March 2005 with the exception of the change in accounting policy for work in
progress. Following a review of the balance sheet the Board have decided to
change the method of calculating work in progress. The calculation included
absorption of overheads. Rather than continue this calculation the Board have
decided to adopt a calculation where identifiable costs are carried forward
against the publication or event. As a result of this review a net #1.2 million
has been released from work in progress. As this is a change of accounting
policy it has been shown as a prior year adjustment. The effect on the prior
period has been to increase the charge in the six months by #0.4 million. A
release was made in the second six months of the year ended 31 March 2005. A
charge was made to the reserves brought forward of #1.3. This is a one off
charge and the results of the Group will not benefit from this release going
forward as these costs will be charged on an as incurred basis. This new
accounting policy is appropriate as the business moves towards its aim of a
greater spread of products being produced and published throughout the year.
These statements were approved by a committee of the Board of Directors on 21
November 2005 and are not audited.
2. Segmental reporting analysis
The turnover and operating profit is derived from international business to
business communications and originates in the UK and India. The geographical
analysis of turnover by destination is as follows:
Six months Six months Year ended
ended 30 Sept ended 30 Sept 31 March
2005 2004 2005
#'000 #'000 #'000
United Kingdom 1,632 1,854 5,328
Europe (other than UK) 4,150 4,744 8,570
USA 1,504 1,928 3,308
Other 1,356 625 1,655
8,642 9,151 18,861
3. Exceptional items
The following exceptional items are included in administrative expenses:
Six months ended Six months ended Year ended 31
30 Sept 2005 30 Sept 2004 March 2005
#'000 #'000 #'000
Property provisions - - (2,445)
Redundancy costs - (84) (416)
- (84) (2,861)
4. Tax charge
The annual effective tax rate is 30% (six months ended 30 September 2004: 30%,
year ended 31 March 2005: 30%). There is no tax charge as there are trading
losses brought forward.
5. Earnings per share
The earnings per share of 0.07p and the diluted earnings per share have been
calculated on the attributable profit to shareholders of #58,000.
The weighted average number of shares in issue during the period (excluding
those held by the Group's Employee Benefit Trust) were:
Six months ended Six months ended Year ended 31
30 Sept 2005 30 Sept 2004 March 2005
Number Number Number
'000 '000 '000
Basic 85,857 85,857 85,857
Shares held in employee benefit trust (1,214) (1,214) (1,214)
84,643 84,643 84,643
Share option adjustment 5,067 - -
Diluted 89,710 84,643 84,643
6. Reconciliation of operating loss to net cash inflow from operating activities
Six months ended Six months ended Year ended
30 Sept 2005 30 Sept 2004 31 March 2005
Restated Restated
(unaudited) (unaudited) (audited)
#'000 #'000 #'000
Operating profit / (loss)
- Group 176 (315) (3,332)
- Joint venture - - (10)
Amortisation of goodwill 26 55 109
Depreciation of tangibles fixed assets 515 497 1,000
Movement in work in progress 275 (556) (73)
Debtors 149 1,983 1,731
Loan to joint venture - - (65)
Creditors (465) (1,370) (808)
Provision for liabilities and charges (439) (195) 2,114
Net cash inflow from operating activities 237 99 666
7. Analysis of net debt
Six months ended Six months ended Year ended 31
30 Sept 2005 30 Sept 2004 March 2005
#'000 #'000 #'000
Cash at bank and in hand 204 87 233
Overdrafts - (583) -
Finance leases (52) - (55)
Balance at 30 September 2005 152 (496) 178
8. Provisions for liabilities and charges
#'000
Balance at 1 April 2005 3,347
Adjustment arising from discounting 83
Utilised in the period (439)
Balance at 30 September 2005 2,991
9. Reserves
Capital
Share redemption Other Profit and
Own shares premium reserve reserves loss account
#'000 #'000 #'000 #'000 #'000
At 31 March 2005 as previously
stated (86) 7,262 7,874 733 (14,449)
Prior year adjustment - - - - (1,260)
(15,709)
Retained loss for the period - - - - 58
Exchange rate differences - - - - 6
At 30 September 2005 (86) 7,262 7,874 733 (15,645)
This statement is being sent to all shareholders. It is available to the public
at SPG Media Group PLC's registered office at 55 North Wharf Road, London, W2
1LA, and at the offices of Capita IRG Plc, the Company's registrars, The
registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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