RNS Number:2627F
SPG Media Group Plc
16 November 2004
SPG MEDIA GROUP PLC ("SPG")
INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2004
(COMPARATIVES TO 30 SEPTEMBER 2003 UNLESS OTHERWISE STATED)
Highlights:
* Turnover #9.2 million (2003: #10.9 million)
* Return to pre-tax profit #0.02 million (2003: losses #(0.8) million)
* Net debt reduced #0.5 million (2003: #1.8 million)
* Operating costs reduced #4.0 million (2003: #5.4 million)
* Earnings per share 0.02p (2003: loss (0.82)p )
* Positive progress * Financial performance ahead of plan * Costs firmly under
control *
Increasingly cash generative
Steve Nicholson, Chairman of SPG, commented:
"We are delighted to report that the company is on track to deliver the planned
strategy with a return to half year profits ahead of expectations.
The rationalisation of advertising led products and planned migration to high
growth cash generative businesses progresses well with our overall operating
costs firmly under control.
The board is confident that the company is on track to return to sustained
profitability and growth"
Further Enquiries:
SPG Media Group Plc Tel. 020 7915 9660
Steve Nicholson, Chairman Tel. 020 7915 9731
Barrie Newton, Rowan Dartington Tel. 0117 933 0011
SPG MEDIA GROUP PLC
INTERIM RESULTS FOR THE SIX MONTHS TO 30 SEPTEMBER 2004
Chairman's Statement
Strategy:
In June 2004, I announced the group strategy to invest in building quality media
products that provide customers with cost effective marketing solutions to
deliver tangible and quantifiable results.
The group has made positive progress towards implementing this strategy with
substantial restructuring of the UK operations including significant
rationalisation of the traditional print publishing business. A number of
historical products have been, and will continue to be, discontinued as we drive
the Group towards high growth, high margin, cash generative media products and
services.
The cost base of the company is firmly under control with investments
specifically targeted at delivering the medium term vision of the company.
Investments in building a strong international presence, initially in Asia,
progress to plan with increased office space in Hyderbad, India, where we are
building a Group wide data centre with plans to relocate various related
operational functions.
Product development is progressing to plan with announcements and pilot product
launches scheduled over the coming months.
Trading Results:
The Group has returned to a first half profit through maintaining margins and
significantly reducing operating costs.
Revenues were marginally behind plan at #9.2 million with growth in both the
Internet and Events businesses in line with market expectation; the Internet
business contributed #3.0 million (2003: #2.6 million) and the Events business
#1.9 million (2003: #1.3 million).
The rationalised portfolio of print products contributed #4.2 million (2003:
#7.1 million) with performance marginally behind plan. The print business is
stabilising and we remain confident that through continuing the migration
towards requested and subscription based publications, the business will return
to growth in future years.
Earnings per share are 0.02p (2003:loss (0.92)p). The board is not proposing an
interim dividend.
Net debt and cash flow:
The group is increasingly cash generative due to the positive impact of our
expanding Forums and Conferences business with reduced debtors and lower capital
expenditure leading to a further reduction in net debt to #0.5 million (2003:
#1.8 million).
Future Prospects:
Progress has been significant with the Group on track to deliver its strategy
and investment plans.
Financial performance is ahead of plan with a further modest improvement
anticipated in the second half.
The board remains confident that the strategy being implemented will lead to
sustained and profitable growth delivering long term value for our shareholders.
Steve Nicholson
Chairman
16 November 2004
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Year ended Six months Six months
31 March ended 30 ended 30
2004 September September
2004 2003
Restated Restated
(audited) (unaudited) (unaudited)
#'000 #'000 #'000
23,951 Turnover (note 2) 9,151 10,947
(12,992) Cost of sales (4,876) (5,777) *
10,959 Gross profit 4,275 5,170
(926) Distribution costs (203) (459)
(11,478) Administration expenses (4,013) (5,425) *
72 Operating profit / (loss) before exceptional 143 (263)
items
(1,517) Exceptional items (note 3) (84) (451)
(1,445) Operating profit / (loss) 59 (714)
8 Interest receivable and similar income 2 -
(104) Interest payable and similar charges (40) (57)
(1,541) Profit / (loss) on ordinary activities before 21 (771)
tax
- Taxation (note 5) - -
(1,541) Profit / (loss) on ordinary activities after 21 (771)
tax
(1,541) Profit / (loss) attributable to equity 21 (771)
shareholders
- Dividends - equity - -
(1,541) Retained Profit / (loss) for the period 21 (771)
(1.83)p Basic earnings / (loss) per share (note 6) - 0.02 (0.92)p
Net basis
(1.83)p Diluted earnings / (loss) per share (note 6) - 0.02 (0.92)p
Net basis
There were no recognised gains or losses other than those included in the profit
and loss account. The results for each period are from continuing operations.
Restatement
* Certain disclosures have been reclassified to be consistent with the
treatment adopted in the 31 March 2004 accounts. There is no impact on the
reported loss for the period.
During the year the Group has adopted UITF 38 which has necessitated the
restatement of comparative periods. See note 1 for details
CONSOLIDATED BALANCE SHEET
As at 31 As at 30 As at 30 September
March 2004 September 2004 2003
Restated Restated
(audited) (unaudited) (unaudited)
#'000 #'000 #'000
Fixed assets
5,116 Intangible assets 5,061 6,202
3,038 Tangible assets 2,786 3,346
8,154 7,847 9,548
Current assets
4,496 Stocks and work in progress 5,426 4,836
5,940 Debtors 3,957 5,907
103 Cash at bank and in hand 87 166
10,539 9,470 10,909
Creditors - amounts falling due within one year
(8,167) Trade and other creditors (6,797) (7,181)
(444) Bank loans and overdrafts (583) (1,856)
(8,611) (7,380) (9,037)
1,928 Net current assets 2,090 1,872
10,082 Total assets less current liabilities 9,937 11,420
Creditors - amounts falling due after more than
- one year - (307)
(1,179) Provisions for liabilities and charges (note 9) (1,013) (1,134)
8,903 Net assets 8,924 9,979
Capital and reserves
4,293 Called up share capital 4,293 4,258
- Shares to be issued - 357
(86) Own shares (note 4) (86) (86)
7,262 Share premium account (note 10) 7,262 7,246
7,874 Capital redemption reserve (note 10) 7,874 7,874
733 Other reserves (note 10) 733 733
(11,173) Profit and loss account (note 10) (11,152) (10,403)
8,903 Shareholders' funds 8,924 9,979
CONSOLIDATED CASH FLOW STATEMENT
Year ended 31 Six months Six months
March 2004 ended 30 ended 30
September September
2004 2003
(audited) (unaudited) (unaudited)
#'000 #'000 #'000
2,199 Net cash inflow from operating activities 99 471
Returns on investments and servicing of finance
8 Interest received and similar items 2 -
(44) Interest paid (11) (22)
(9) Interest element of finance lease payments - (8)
Capital expenditure and financial investment
(549) Payments to acquire tangible fixed assets (245) (347)
Acquisitions and disposals
(87) Payment to acquire subsidiary undertaking - -
1,518 Net cash flow before financing (155) 94
Financing
(152) Capital element of finance lease payments - (77)
1,366 (Increase) /decrease in net debt in the period (155) 17
Reconciliation of net cash flow to movement in net
debt
1,366 Increase / (decrease) in cash in the period (155) 17
152 Cash outflow from lease financing - 77
1,518 Change in net debt resulting from cash flows (155) 94
(1,859) Opening net debt (341) (1,859)
(341) Closing net debt (496) (1,765)
NOTES:
1. Preparation of 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 2004 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 2004, except for the effects of adopting Urgent Issues Task Force
Abstract 38 "Accounting for ESOP trusts" ("UITF 38"), which has come into force
since the previous year end. UITF 38 requires that the Company's shares held by
the Group's Employee Benefit Trust ("EBT"), which were previously held within
fixed asset investments, be presented as a deduction from shareholders' funds.
The adoption of UITF 38 has been treated as a prior year adjustment with
comparative figures being restated accordingly. The adoption has resulted in the
restatement of the following primary statements and notes: the Consolidated
Profit and Loss Account; the Consolidated Balance Sheet; Profit on ordinary
activities before taxation; Earnings per share; Fixed asset investments; and the
Reconciliation of movement in shareholders' funds.
The impact of the prior year adjustment on brought forward net assets and the
profit for the 6 month period ended 30 September 2003 has been disclosed in note
4.
These statements were approved by a committee of the Board of Directors on 16
November 2004 and are neither audited nor reviewed.
2. Segmental reporting analysis
All of the turnover and operating profit is derived from international
business-to-business communication and originates in the UK. The
geographical analysis of turnover by destination is as follows:
2003/04 2004/05 2003/04
Full year Half year Half year
#'000 #'000 #'000
5,329 United Kingdom 1,854 2,499
10,625 Europe (other than UK) 4,744 4,854
5,773 United States of America 1,928 2,724
2,224 Other 625 870
23,951 9,151 10,947
3. Exceptional items
The following exceptional items are included in administrative expenses:
2003/04 2004/05 2003/04
Full year Half year Half year
#'000 #'000 #'000
677 Redundancy costs 84 282
340 Property provision - 169
500 Impairment of intangible fixed asset - -
1,517 84 451
4. Own shares
At 30 September 2004, the Group's EBT held 1,214,395 Ordinary Shares in the
Company at an average value of 144p per share. As a result of the adoption of
UITF 38, the Group's EBT shares, which were previously held within investments,
are now presented as a deduction from shareholders' funds. The Ordinary Shares
were transferred at their value on 1 April 2003. The historical cost of the
Ordinary Shares is #1,755,000. The previous write-offs of this value have not
been reversed and remain in the profit and loss account as in the opinion of the
Directors these represent a realised loss for the Group.
The impact of adopting UITF 38 was accordingly to reduce net assets at 1 April
2003 by #86,000, and to increase the loss for the six months to 30 September
2003 by #88,000. Accordingly, net assets at 30 September 2003 are #174,000 lower
than previously reported.
5. Tax charge
The annual effective tax rate is 30% (six months to 30 September 2003: 30%, year
ended 31 March 2004: 30%) but no credit has been taken for the operating loss as
there are currently no taxable profits against which it can be offset.
6. Earnings per share
The earnings per share of 0.02p (six months to 30 September 2003: loss per share
(0.92)p) and the diluted earnings per share of 0.02p (six months to 30 September
2003: loss per share (0.92)p) have been calculated based on the attributable
profit to shareholders of #21,000 (six months to 30 September 2003: loss #
(771,000).
The weighted average number of shares in issue during the period (excluding
those held by the Group's EBT) were:
2003/04 2004/05 2003/04
Full Year Half year Half year
'000s '000s '000s
84,096 Basic 84,643 83,667
21 Share option adjustment - -
84,117 Diluted 84,643 83,667
7. Reconciliation of operating loss to net cash inflow from
operating activities
2003/04 2004/05 2003/04
Full year Half year Half year
#'000 #'000 #'000
(1,445) Operating Profit / (loss) 59 (714)
133 Amortisation of goodwill 55 72
500 Impairment of intangible fixed assets - -
1,064 Depreciation of tangible fixed assets 497 554
(347) Stocks and work-in-progress (930) (687)
1,062 Debtors 1,983 1,095
1,192 Creditors (1,370) 132
40 Provisions for liabilities and charges (195) 19
2,199 Net cash inflow from operating activities 99 471
8. Analysis of net debt
31 Mar 2004 30 Sep 2004 30 Sep 2003
#'000 #'000 #'000
103 Cash 87 166
(444) Borrowings (583) (1,856)
- Finance lease obligations - (75)
(341) Net debt (496) (1,765)
9. Provisions
The movement in provisions for the six months was as follows:
#'000
As at 31 March 2004 1,179
Utilised (195)
Adjustment arising from discounting 29
As at 30 September 2004 1,013
10. Reserves
The movement on reserves for the six months was as follows:
Own Shares Share Capital Other Profit and Total
premium redemption reserves Loss
reserve account
#'000 #'000 #'000 #'000 #'000 #'000
As at 31 March (86) 7,262 7,874 733 (11,173) 4,610
2004 (as
restated)
Retained profit - - - - 21 21
for the period
(86) 7,262 7,874 733 (11,152) 4,631
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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