RNS Number:2119N
SPG Media Group Plc
05 December 2006
SPG MEDIA GROUP PLC
Interim Report for the six months ended 30 September 2006
Operating highlights
Turnover #6.9 million (2005: #8.6 million)
Operating (loss)/profit before amortisation
and exceptional items #(0.7) million (2005: #0.6 million)
Operating (loss)/profit before interest and
taxation #(1.2) million (2005: #0.6 million)
Cash (utilised)/generated by operations #(1.3) million (2005: #0.2 million)
Cash in hand #0.9 million (2005: #0.2 million)
Chairman's Statement
Trading results
As I commented in my statement in the annual report and accounts we continue to
suffer from a negative impact on our publishing division's revenue which is down
#1.2 million to #2.1 million. Within my outlook statement I said that there
would be a rescheduling of Events into the second half of the year and this is
the case with revenue in the Events division down by #0.7 million. Revenue for
the E-media division increased from #3.0 million to #3.2 million. Overall
turnover fell from #8.6 million to #6.9 million.
The operating loss before amortisation and exceptional items for the six months
ended 30 September 2006 was #0.7 million (2005: restated profit #0.6 million).
The accounting policy for work in progress was changed at the year-end (31 March
2006) and, therefore, the comparative period under review has been restated for
this change of accounting policy. The impact is to increase the profit before
tax for the period ended 30 September 2005 by #0.4 million.
Emedia
Revenue from our websites continues to be dominated by our top 10 which
generated two thirds of all revenues. The revenue continues to be generated from
company profiles placed on our websites. We have initiated measures to change
revenue opportunities which will include email news alerts and recruitment
advertising.
We have also invested in editorial and the number of news projects and updates
has increased. This investment will increase response enquiries for our
advertisers and also allow us to develop our portals to be points of reference
for particular industries. We currently have two portal websites, packaging
gateway and design and build. We are utilising our Qmina search tool across
other websites.
Publishing
The continuing fall in our publishing revenues resulted in revenues for the six
months of #2.1 million against the previous year of #3.3 million. We continue to
improve the quality of our publications and launch new titles. We ceased the
publication of five non-core products during the period which had accounted for
#0.4 million of turnover. During the period under review we launched a title
Leaf Review in conjunction with a forum, LEAF (Leading European Architects
Forum) which is a move towards aligning products within the business with each
other.
After an initial trial of separating the publications into the other divisions
we have brought the business unit back as one sales unit. Together with a
change in the compensation plan for all sales personnel we hope this will
stabilise this business unit and give it a platform for future initiatives.
Events
Revenue was down in the Events division due to our decision to diversify the
Leading European Architects Forum with additional products, LEAF London and LEAF
Contractors, taking place in the second half of the year. In addition, we have
moved the International Outsourcing Forum to the second half of the year and the
European Convergence Forum, which generated #151,000 in the previous period, was
not held.
Conference revenues were down as a direct result of the quality of data for
potential attendees and the number of sales people. This has been addressed and
we look forward to improved performance from this division.
Costs
Our direct costs have fallen in line with the reduction in revenue with a
marginal improvement in the gross margin. Administration costs have increased
due to rent increases and an increase of the bad debt provision, which has
resulted in a charge of #0.2 million against a release of #0.1 million in the
previous period representing a change #0.3 million. Underlying costs have been
tightly controlled, but, we do wish to invest in our products to ensure they
have the ability to maintain their market share.
We have shown net exceptional costs separately and include a release of credit
balances on the balance sheet, which the Board feels the exposure has been
extinguished, of some #0.2 million and the redundancy and compensation for loss
of office charge of #0.6 million. This latter charge relates to redundancy
payments of #0.3 million and compensation for loss of office of #0.3 million.
Net Funds
The group utilised net cash flow from operating activities of #1.4 million.
Together with other cash flow adjustments, the Group finished the period with
net funds of #0.9 million.
Charge for share based payments
As required we have adopted FRS 20 Share Based Payments, which requires a charge
to be made for awards of options. We have calculated the fair value of the
options granted using the BlackScholes method for pricing share options. The
charge in each period was #Nil.
Board changes
Keith Sadler was appointed Chief Executive on 3rd August 2006. Keith was the
former Group Finance Director and Company Secretary. Ken Appiah the Group
Financial Controller was appointed Group Finance Director and Company Secretary
on the same date. Mr C Blake resigned as a non-executive director on 6h July
2006 and on the 3rd October 2006 Mr S Nicholson resigned as a director of the
company. I would like to thank them for their contribution.
Possible Offer
The Board is in negotiations, which may or may not lead to a offer being made
for the entire issued share capital of the company. The Board will keep
shareholders informed of any future developments.
Outlook
Due to the phasing of our events and publications we are reliant on the fourth
quarter of the year delivering significant operating and financial performance.
We have reached our initial targets on two important events, Global
Semiconductor Forum and International Power Symposium. Although we have a
demanding second half-year, the Board remains confident of meeting management
expectations.
Stephen Davidson
Chairman
28th November 2006
Further information
SPG Media Group plc
Stephen Davidson 020 7915 9600
Keith Sadler 020 7915 9600
Rowan Dartington & Co. Limited
(a subsidiary of Corporate Synergy Plc)
Barrie Newton 01225 424 666
Consolidated profit and loss account
Six months Six months Year
ended ended ended 31
30 Sept 30 Sept March
2006 2005 2006
(unaudited) (unaudited) (audited)
restated
Notes #'000 #'000 #'000
Turnover 2 6,938 8,697 18,256
Less share of joint venture turnover - (55) (65)
Group turnover 6,938 8,642 18,191
Cost of sales (3,112) (3,733) (8,349)
Gross profit 3,826 4,909 9,842
Distribution costs (198) (264) (450)
Administrative expenses (4,804) (4,079) (7,846)
Administrative expenses (before
amortisation and exceptional items) (4,316) (4,053) (7,752)
Amortisation (121) (26) (248)
Exceptional items 3 (367) - 154
Total administrative expenses (4,804) (4,079) (7,846)
Operating (loss)/profit (1,176) 566 1,546
Share of joint venture operating loss - (36) (44)
Loss on termination of joint venture - - (57)
Profit on disposal of business - - 51
Finance credit/(charges) - net 39 (82) (152)
(Loss)/profit on activities before taxation (1,137) 448 1,344
Tax on profit/(loss) on ordinary activities 4 - - -
(Loss)/profit on ordinary activities
after taxation and retained loss for 9 (1,137) 448 1,344
the financial year
Basic (loss)/profit per share 5 (1.34)p 0.06p 1.59p
Diluted (loss)/profit per share 5 (1.34)p 0.06p 1.58p
Consolidated Balance Sheet
As at As at As at
30 Sept 30 Sept 31 March
2006 2005 2006
(unaudited) (unaudited) (audited)
restated
Notes #'000 #'000 #'000
Fixed assets
Intangible assets 4,038 4,381 4,159
Tangible assets 1,338 2,337 1,590
Investment in joint venture - 19 -
5,376 6,737 5,749
Current assets
Debtors 5,665 4,443 4,861
Cash at bank and in hand 7 889 204 2,329
6,554 4,647 7,190
Creditors - amounts falling due within one year
Trade and other creditors (8,506) (6,699) (8,072)
(8,506) (6,699) (8,072)
Net current assets (1,952) (2,052) (882)
Total assets less current liabilities 3,424 4,685 4,867
Creditors - amounts falling due
after more than one year - (44) (39)
Provisions for liabilities and charges 8 (2,020) (2,991) (2,280)
Net assets 1,404 1,650 2,548
Capital and reserves
Called up share capital 4,293 4,293 4,293
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 (18,758) (18,512) (17,614)
Equity shareholders' funds 1,404 1,650 2,548
Consolidated statement of total recognised gains and losses
Six months Six months Year
ended ended ended
30 30 31
Sept Sept March
2006 2005 2006
(unaudited) (unaudited) (audited)
restated
#'000 #'000 #'000
(Loss)/profit for the period (1,137) 448 1,388
Exchange rate differences - 6 (44)
Total recognised (losses) and gains in the period (1,137) 454 1,344
Exchange rate adjustment offset in
reserves (retranslation of foreign investments) (7) - 8
Total recognised (losses)/gains for the period (1,144) 454 1,352
Prior year adjustment - (4,431) (4,431)
Total recognised gains and losses in the period (1,144) (3,977) (3,079)
Reconciliation of movements in shareholders' funds
Six months Six months Year
ended ended ended
30 30 31
Sept Sept March
2006 2005 2006
(unaudited) (unaudited) (audited)
Notes #'000 #'000 #'000
(Loss)/profit for the period (1,137) 448 1,344
Other recognised (losses)/gains (7) 6 8
(1,144) 454 1,352
Opening shareholders' funds 2,548 1,196 1,196
Closing shareholders' funds 1,404 1,650 2,548
Consolidated cash flow statement
Six months Six months Year ended 31
ended 30 ended 30 March
Sept Sept 2006
2006 2005
(unaudited) (unaudited) (audited)
Restated
Notes #'000 #'000 #'000
Net cash (outflow)/inflow
from operating activities 6 (1,346) 237 2,199
Returns on investments and servicing of finance
Interest received and similar items 43 4 21
Interest paid (2) - -
Interest element of finance lease payments (2) (2) (5)
Taxation
Overseas corporation tax paid - - -
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (218) (263) (291)
Acquisitions and disposals
Net cash inflow from sale of trading assets 40 - 180
Net cash flow before financing (1,485) (24) 2,104
Financing
Capital element of finance lease payments - (3) (8)
(Increase)/decrease in net
debt in the period (1,485) (27) 2,096
Reconciliation of net cash flow to movement in
net debt
Increase/(decrease) in cash in the period (1,485) (27) 2,096
Cash outflow from lease financing 45 3 8
Change in net debt resulting from
cash flows (1,440) (24) 2,104
Exchange movement - (2) -
Movement in net funds for the (1,440) (26) 2,104
period
Opening net funds/(debt) 7 2,329 178 178
Closing net funds/(debt) 7 889 152 2,282
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 2006 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 accounting policies are as stated in the Annual Report
and Accounts for the year ended 31 March 2006 except as described below.
As previously reported the Board changed the accounting policy in respect of
work in progress. This change was adopted at the year ended 31 March 2006 and
therefore only impacts on the comparative numbers for the period ended 30
September 2005. A charge for work in progress was made of #0.4 million in the
original statement for the period ended 30 September 2005. This has been written
off as a prior year adjustment.
FRS20 Shared Based Payments; FRS23 The Effects of Foreign Exchange rates; FRS 25
Financial Instruments: Disclosure and Presentation and FRS26 Financial
Instruments: Measurement have been adopted during the period. The adoption of
these standards has had no impact on the results for the period.
These statements were approved by a committee of the Board of Directors on 27
November 2006 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 30 ended 30 ended 31
Sept Sept March
2006 2005 2006
#'000 #'000 #'000
United Kingdom 1,572 1,632 3,659
Europe (other than UK) 3,436 4,150 9,272
USA 986 1,504 3,640
Other 944 1,356 1,620
6,938 8,642 18,191
Six months Six months Year
ended ended ended
30 Sept 30 Sept 31 March
2006 2005 2006
#'000 #'000 #'000
E-media 3,215 2,968 6,115
Events 1,607 2,296 6,192
Publishing 2,116 3,378 5,884
6,938 8,642 18,191
3. Exceptional items
The following exceptional items are included in administrative expenses:
Six months Six months Year
ended ended ended
30 30 31
Sept Sept March
2006 2005 2006
#'000 #'000 #'000
Property provisions - - 523
Write-off of leasehold improvements associated with
onerous leases
- - (369)
Release of credit balances held on balance sheet 215 -
Redundancy costs (582) - -
(367) - 154
The release of property provisions at 31 March 2006 was the result of empty
properties being let allowing the release of provisions made in previous
periods.
Leasehold improvements were undertaken to improve the potential letting ability
of non-operational properties and accordingly the ascertained costs were
therefore written off.
During the period ended 30 September 2006 a review of credit balances on the
balance sheet resulted in the release of certain balances for which the board
feel that any exposure has been extinguished.
The redundancy costs relate the costs of redundancies and compensation for loss
of office.
4. Tax charge
The annual effective tax rate is 30% (six months ended 30 September 2005: 30%,
year ended 31 March 2006: 30%). There is no tax charge as there are trading
losses brought forward.
5. Loss per share
The loss per share of 1.34p (2005: earnings 0.05p) and the diluted loss per
share have been calculated on the attributable loss to shareholders of
#1,137,000 (2005: profit #448,000).
The weighted average number of shares in issue during the period (excluding
those held by the Group's Employee Benefit Trust) were:
Six months Six months Year
ended 30 ended 30 ended 31
Sept Sept March
2006 2005 2006
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 - 52 376
Diluted 84,643 84,695 85,019
6. Reconciliation of operating loss to net cash inflow from operating activities
Six months Six months Year
ended 30 ended 30 ended 31
Sept Sept March
2005 2005 2006
(unaudited) (unaudited) (audited)
restated
#'000 #'000 #'000
Operating profit / (loss)
- Group (1,119) 566 1,546
Amortisation of goodwill 121 26 248
Depreciation of tangibles fixed assets 416 515 921
Loss on disposal of fixed assets 7 - -
Write-off of leasehold improvements - - 369
(Increase)/decrease in debtors (804) 264 (511)
Write-off of joint venture investment - - (47)
(Decrease)/increase in creditors 350 (465) 908
Provision for liabilities and charges (317) (439) (1,235)
Net cash (outflow)/inflow from operating (1,346) 237 2,199
activities
7. Analysis of net debt
Six months Six months Year
ended 30 ended ended 31
Sept 30 Sept March
2006 2005 2006
#'000 #'000 #'000
Cash at bank and in hand 889 204 2,329
Overdrafts - - -
889 204 2,329
Finance leases - (52) (47)
Balance at 30 September 2005 889 152 2,282
8. Provisions for liabilities and charges
Six months
ended 30 Sept
2006
#'000
Balance at 1 April 2006 2,280
Adjustment arising from discounting 57
Utilised in the period (317)
Balance at 30 September 2006 2,020
9. Reserves
Share Capital Other Profit and
premium redemption reserves loss
reserve account
#'000 #'000 #'000 #'000
At 31 March 2006 7,262 7,874 733 (17,614)
Retained loss for the period - - - (1,137)
Exchange rate differences - - - (7)
At 30 September 2005 7,262 7,874 733 (18,758)
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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