SU:RNSTESTZI:RA:12-05-08 06:09:31RB:20080512060931RY:YRC:Y..RH:Final ResultsRD:Immedia
BroadcastingRI:GB0033881904RJ:GBRP:IME RG:
RT:RSI:
HR:1210572571-40a8a709-04998N1:N2:SN:RNS1422USQ:11673HS:ipxrns_2008-5-12_07:09:31_1_132~RNS
Number : 1422U
Immedia Broadcasting plc
11 May 2008
12 May 2008 IMMEDIA BROADCASTING PLC Preliminary Statement of Results for the FY to 31 December 2007 Immedia Broadcasting PLC ("Immedia"), the UK's leading provider of live,tailored radio and video for retail, today announces its preliminary
financial results for the year to 31 December 2007.
Overview · Underlying revenue (i.e. excluding one-off contributions from discontinued contracts) of £3.8m (2006 : £3.8m) · Underlying operating loss before tax (i.e. excluding Cube
impairment and one-off contributions from discontinued contracts) of £0.41m (2006:
Loss £0.79m)· New 2-year contract with HSBC to continue to provide HSBC Live! to
940 branches in the UK · GAME Live! roll-out complete - now broadcasting to c. 370 stores across the UK · Immedia's IKEA Live! performing well and broadcasting to all 20
IKEA stores across the UK · Lloyds Pharmacy Live! contract renewed - now entering its sixth year · Integration of Cube into Immedia brand now complete Financial Summary 12 months
to 31 December 12 months to 31
2007 December 2006 Revenue
£3,904,815 £4,472,225 Underlying revenue 1
£3,799,586 £3,855,034 Operating profit before depreciation, amortisation and impairment
£206,369 £643,418 charges (EBITDA) Underlying EBITDA 2
£101,140 £30,387 Impairment charge on intangible assets
£1,055,225 - Operating loss
£(1,375,909) £(363,523) Underlying operating loss 2
£(405,022) £(785,613) Loss before taxation
£(1,355,410) £(359,650) Basic and diluted loss per share
(9.13)p (2.54)p Year end balance of cash and cash equivalents
£661,845 £242,795 1 - Excluding one-off contributions from discontinued contracts 2 - Excluding Cube impairment and one-off contributions from
discontinued contracts Bruno Brookes, Chief Executive of Immedia, said : "2007 was a challenging year for Immedia but I am pleased with what has
been achieved in terms of structure, product offering and pipeline developments. As
a result of the changes that have been made in 2007 I am confident that we
have aligned Immedia's offering towards the most profitable areas of growth for
2008 and beyond.
"We believe that we are well equipped to benefit from the growth of the
wider digital out-of-home market, and that the actions we have taken over the last
six months will enable us to make good progress during the current year." Enquiries: Immedia Broadcasting Plc Bruno Brookes - Chief Executive +44 (0) 1635 572
800 Hudson Sandler Nick Lyon / Sandrine Gallien +44 (0) 20 7796
4133 Daniel Stewart & Company Plc Simon Leathers / Simon Starr +44(0) 20 7776 6550 Chairman's Statement The year was a tough one for the company but the Board are confident that
the reviews undertaken following the underperformance of the Cube acquisition
and consequent changes made in both business strategy and structure will bear
fruit in the coming year.
Underlying revenue for the year was slightly down at £3,799,586 compared
to £3,855,034 for 2006 with the underlying operating loss of £405,022 for the
year a significant improvement on the 2006 underlying operating loss of £785,613.
The strengthened finance function has kept a rigorous control on costs and
the company remains cash generative with cash and cash equivalents of £661,845
at the year-end, again a significant improvement on the prior year balance
of £242,795.
The sector that Immedia operates in is undergoing change with a growth
in screen-based digital out-of-home media. Digital out-of-home media is increasingly found in the retail sector but importantly also in the
leisure sector and whilst this growth has initially been hardware driven, as
hardware penetration increases so does the demand for content. We believe that
Immedia has the strategy and the skills to exploit this demand for content and
foresee that this could become an important source of revenue and profit going forward.
Although it is still early days we have a pipeline of new business that gives
us encouragement for the year ahead.
Geoff Howard-Spink Chairman Business Review I am pleased to present our full year results for the financial year ending
31 December 2007.
Results & Financial Performance 2007 was a challenging year but we believe Immedia has sustained its
position well with a strong focus on cost control and profitability. Revenue for the
year was £3,904,815 (2006: £4,472,225) with underlying revenue (excluding
one-off contributions from discontinued contracts) flat on last year. The
underlying operating loss before income tax was reduced from £785,613 to £405,022.
This year's results have been impacted by the previously disclosed £1.055
million write-off of Cube's intangibles. We do not anticipate any further
impairment charges.
Following a disappointing performance by Cube since its acquisition and the
loss of two significant contracts in the first quarter of 2007, one of our
priorities for 2007 was to restructure the business in order to bring Cube's strong expertise in in-store television under the Immedia brand. This has now
been completed and the problems linked to Cube's underperformance are now behind
us.
In addition, since last September, we have undertaken a significant number
of sound and visual installations in the retail sector and remain positive
about Cube's clients' contribution to performance at Group level going forward.
At Group level, significant progress has also been made on the financial structure of the Company, with all loans having been repaid during the
year.
Costs have been rigorously controlled and the Group remains cash
generative, with £661,845 cash in the bank (31 December 2006: £242,795).
On the basis of current financial projections prepared up to the end of
2009, recent news of contract renewals, continuing improvements in management
of costs, and ongoing availability of facilities, the Directors are satisfied
that the Group has adequate resources to continue in operation for the
foreseeable future and consequently the financial statements have been prepared on the
going concern basis.
Subscription Stations All of our subscription radio stations continue to perform well. In
October 2007, we were delighted to announce a contract with The GAME Group plc
to provide subscription radio to all of the GAME stores across the UK. The roll-out has been successful and we currently broadcast GAME Live! to approximately 370 stores.
In September, we were also pleased to announce that we had signed a new
contract with SPAR UK to continue to broadcast SPAR Live! under a subscription model
to circa 1,400 stores for another three years. The radio station is
performing extremely well and we are pleased to say that all advertising airtime has
been sold until October 2008. Immedia has provided SPAR with a full service
radio station since June 2004 and we have a strong relationship with the SPAR
team which we will seek to build on going forward.
Our station HSBC Live! which broadcasts to 940 branches across the UK
continued to perform well.
IKEA Live! rolled out as planned and the station broadcasts to all 20
IKEA stores across the UK.
Lloyds Pharmacy Live! is operating well across all 1,500 stores, our
contract has been renewed and we are entering our sixth year of partnership with
Lloyds Pharmacy's team.
We have made good progress trialling other radio stations and as one of
our objectives to develop content provision going forward, we have continued
to provide tailored visual content for a range of first class brands.
Current Trading and Outlook 2007 was a challenging year for Immedia but I am pleased with what has
been achieved in terms of structure, product offering and pipeline developments. As
a result of the changes that have been made in 2007 I am confident that we
have aligned Immedia's offering towards the most profitable areas of growth for
2008 and beyond.
In the second half of the year, it had become apparent that there were
numerous opportunities within the wider market of 'digital out-of-home'. The
digital out-of-home sector is widely reported to be one of the fastest growing advertising markets in the world. We have invested substantial time and
effort clarifying how we could develop innovative solutions to service customers'
needs in this field and as a consequence our strategy is now as follows: - To continue to win radio and RadioVision contracts from retailers
but also in other sectors - To drive new networks in new territories with existing clients - To launch new and innovative TV solutions - To develop our thriving installation and maintenance services - To generate and develop content for digital network owners
across Europe, the Middle East and Africa (EMEA) - To sign reseller agreements with providers across the EMEA region
to offer and distribute Immedia's first class offering This strategy is being successfully implemented and we also remain focused
on cost management and profitability.
Current trading is in line with our expectations and we are also delighted
to announce today that our contract with HSBC has been renewed for another
two years. We look forward to developing our relationship with HSBC further.
We believe that we are well equipped to benefit from the growth of the
wider digital out-of-home market, and that the actions we have taken over the last
six months will enable us to make good progress during the current year.
Bruno Brookes Chief Executive Consolidated Income Statement for the year ended 31 December 2007 Note
2007 2006
£ £ Revenue 5
3,904,815 4,472,225 Cost of sales
(1,691,821) (1,958,973) Gross profit
2,212,994 2,513,252 Administrative expenses before impairment charge on intangible assets 14
(2,533,678) (2,876,775) Impairment charge on intangible assets
(1,055,225) - Operating loss
(1,375,909) (363,523) Operating profit before depreciation, amortisation and impairment charge
206,369 643,418 Depreciation and amortisation
(527,053) (1,006,941) Impairment charge on intangible assets
(1,055,225) - Finance income 9
22,374 21,428 Finance expense 9
(1,875) (17,555) Loss before taxation 6
(1,355,410) (359,650) Income tax 10
72,750 44,738 Loss for the year attributable to equity shareholders
(1,282,660) (314,912) Continuing operations Loss per share - basic and diluted 11 (
9.13) p (2.54) p There was no income and expense for the current or comparative periods
other than that reported in the consolidated income statement.
Consolidated Balance Sheet At 31 December 2007
2007 2006 Note £ £ Assets Property, plant and equipment 13
208,837 561,687 Intangible assets 14
377,190 1,659,773 Total non-current assets
586,027 2,221,460 Current assets Inventories - work in progress
3,703 2,409 Trade and other receivables 16
675,975 1,062,296 Prepayments for current assets
151,550 167,138 Cash and cash equivalents 17
661,845 246,147 Total current assets
1,493,073 1,477,990 Total assets
2,079,100 3,699,450 Share capital 18
1,455,684 1,334,056 Share premium 18
3,586,541 3,525,727 Shares to be issued 18 - 237,175 Merger reserve 18
2,245,333 2,245,333 Retained losses 18
(6,712,729) (5,430,069) Total equity 23
574,829 1,912,222 Liabilities Loans and borrowings 19 - 3,187 Deferred tax liabilities 20
12,480 85,230 Total non-current liabilities
12,480 88,417 Loans and borrowings 19 - 19,047 Trade and other payables 21
1,416,926 1,234,865 Deferred income
74,865 444,899 Total current liabilities
1,491,791 1,698,811 Total liabilities
1,504,271 1,787,228 Total equity and liabilities
2,079,100 3,699,450 Consolidated Cash Flow Statement for the year ended 31 December 2007
2007 2006 Note
£ £ Cash flows from operating activities Loss for the year attributable to equity shareholders
(1,282,660) (314,912) Adjustments for: Depreciation, amortisation and impairment
1,582,278 1,006,941 Financial income
(22,374) (21,428) Financial expense 1,875 17,555 Loss on sale of property, plant and equipment
19,138 - Deferred tax credits 10
(72,750) (30,250) Decrease/(increase) in trade and other receivables
401,909 (140,827) (Increase) in inventories
(1,294) (2,409) (Decrease)/increase in trade and other payables
(187,973) 342,690 Tax paid
- 1,882Net cash from operating activities
438,149 859,242 Cash flows from investing activities Proceeds from sale of property, plant and equipment 1,753 - Interest received
22,374 21,428 Acquisition of subsidiary, net of cash acquired 12
- (1,076,733)Acquisition of property, plant and equipment 13
(22,469) (200,894) Net cash from investing activities 1,658 (1,256,199) Cash flows from financing activities Proceeds from exercise of share options
- 14,875Interest paid
(1,875) (17,555) Repayment of borrowings
(14,104) (9,500) Repayment of other loans
- (175,000)Payment of finance lease liabilities
(4,778) (4,932) Net cash from financing activities
(20,757) (192,112) Net increase/(decrease) in cash and cash equivalents
419,050 (589,069) Cash and cash equivalents at 1 January
242,795 831,864 Cash and cash equivalents at 31 December 17
661,845 242,795 Notes (forming part of the financial statements) The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2007 or 2006 but is
derived from those accounts. Statutory accounts for 2006 have been delivered to
the registrar of companies, and those for 2007 will be delivered in due course.
The auditors have reported on those accounts; their report was (i) unqualified,
(ii) did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and (iii) did not contain
a statement under section 237(2) or (3) of the Companies Act 1985. The
2007 accounts will be delivered to the registrar of companies following the
Company's Annual General Meeting. The Annual Report and Notice of Annual General
Meeting will be posted to the shareholders by 6 June 2008. This preliminary announcement was approved by the Board on 9 May 2008.
1 Reporting entity Immedia Broadcasting plc (the "Company") is a company incorporated and
domiciled in the United Kingdom. The address of the Company's registered office is
8-10 New Fetter Lane, London EC4A 1RS.
The consolidated financial statements of the Company as at and for the
year ended 31 December 2007 comprise the Company and its subsidiaries
(together referred to as the "Group"). The Group primarily is involved in marketing
and communication services through radio and screen based media.
2 Basis of preparation The consolidated financial statements have been prepared and approved by
the directors in accordance with International Financial Reporting Standards
as adopted by the EU ("Adopted IFRSs").
On the basis of current financial projections prepared up to the end of
2009, recent news of contract renewals, continuing improvements in management
of costs, and ongoing availability of facilities, the Directors are satisfied
that the Group has adequate resources to continue in operation for the
foreseeable future and consequently the financial statements have been prepared on the
going concern basis.
(a) Statement of compliance The AIM Rules require that the consolidated financial statements of the
Company for the year ending 31 December 2007 be prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU ("Adopted IFRSs").
The accounting policies set out below have, unless otherwise stated,
been applied consistently to all periods presented in these consolidated
financial statements and in preparing an opening IFRS balance sheet at 1 January 2006
for the purposes of the transition to Adopted IFRSs.
Judgements made by the directors, in the application of these accounting policies that have significant effect on the financial statements and
estimates with a significant risk of material adjustment in the next year are discussed
in note 2(c).
(b) Measurement convention The consolidated financial statements have been prepared on the historical
cost basis except as noted in note 3 (a) below.
(c) Use of estimates and judgements The preparation of financial statements requires management to make
judgements, estimates and assumptions that affect the application of accounting policies
and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the estimate
is revised and in any future periods affected.
In particular, information about significant areas of estimation uncertainty
and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements
are described in the following notes: · Note 4 determination of fair values · Note 14 intangible assets (goodwill impairment tests); · Note 16 trade and other receivables (review and provisions
against doubtful debts).
3 Significant accounting policies The accounting policies set out below have been applied consistently to
all periods presented in these consolidated financial statements, and have
been applied consistently by Group entities.
(a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities controlled by the Group. Control exists when the
Group has the power to govern the financial and operating policies of an entity so
as to obtain benefits from its activities. The financial statements of subsidiaries are included in the consolidated financial statements from the
date that control commences until the date that control ceases. The Group
includes an Employee Benefit Trust which is included in the consolidation.
(ii) Acquisitions Acquisitions are accounted for using the purchase method. The cost of an acquisition is measured at fair value at the date of exchange of the consideration provided plus costs directly attributable to the
acquisition.
Identifiable assets and liabilities of the acquired business that meet
the conditions for recognition under IFRS 3 ('Business Combinations') are
recognisedat their fair value at the date of acquisition. To the extent that the cost
of an acquisition exceeds the fair value of the net assets acquired the
difference is recorded as goodwill. Where the fair value of the net assets acquired
exceeds the cost of an acquisition the difference is recorded in the income statement.
(iii) Transactions eliminated on consolidation Intra-group balances and any unrealised income and expenses arising from intra-group transactions are eliminated in preparing the consolidated
financial statements.
(iv) Merger On 20 November 2003 a new holding company was brought into the Group. This
was carried out by a share for share exchange and the existing shareholders
of Immedia Broadcast Limited received 1,000 10p Ordinary shares in Immedia Broadcasting Plc for every share held. There was no cash consideration.
As part of its transition to IFRS on 1 January 2006 the Group has not restated
the Group reconstruction which has been accounted for as a merger as permitted by
UK GAAP.
(b) Property plant and equipment (i) Recognition and measurement Items of property, plant and equipment are measured at cost less
accumulated depreciation and accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition
of the asset. Purchased software that is integral to the functionality of
the related equipment is capitalised as part of that equipment.
(ii) Subsequent costs The cost of replacing part of an item of property, plant and equipment
is recognised in the carrying amount of the item if it is probable that the
future economic benefits embodied within the part will flow to the Group and its
cost can be measured reliably. The costs of the day-to-day servicing of
property, plant and equipment are recognised in income and expenditure as incurred.
(iii) Depreciation Depreciation is recognised as an expense in income and expenditure on a straight-line basis over the estimated useful lives of each part of an item
of property, plant and equipment. Leased assets are depreciated over the
shorter of the lease term and their useful lives.
The estimated useful lives for the current and comparative periods are
as follows: Plant and machinery - 3 years Fixtures and fittings - 3 to 5 years Network equipment - 5 years Depreciation methods, useful lives and residual values are reviewed at
each balance sheet date.
(c) Intangible assets and goodwill (i) Goodwill Goodwill arises on the acquisition of subsidiaries and is stated at cost
less any accumulated impairment losses. Goodwill, which under IFRSs is not
amortised, is tested annually for impairment.
Acquisitions prior to 1 January 2006 As part of its transition to IFRSs, the Group elected to restate only
those business combinations that occurred on or after 1 January 2006. In respect
of acquisitions prior to 1 January 2006, goodwill represents the amount
recognised under the Group's previous accounting framework, UK GAAP.
Acquisitions on or after 1 January 2006.
For acquisitions on or after 1 January 2006, goodwill represents the excess
of the cost of the acquisition over the Group's interest in the net fair value
of the identifiable assets, liabilities and contingent liabilities of the acquiree.
(ii) Amortisation Amortisation is recognised as an expense in income and expenditure on a straight-line basis over the estimated useful lives of intangible assets,
other than goodwill, from the date that they are available for use. The
estimated useful lives for the current and comparative periods are as follows: Customer relationships - 2 to 3 years Video library - 10 years (d) Leased assets Leases in terms of which the Group assumes substantially all the risks
and rewards of ownership are classified as finance leases. Upon initial
recognition the leased asset is measured at an amount equal to the lower of its fair
value and the present value of the minimum lease payments. Subsequent to
initial recognition, the asset is accounted for in accordance with the accounting
policy applicable to that asset.
Other leases are operating leases and are not recognised on the Group's
balance sheet.
(e) Lease payments Payments made under operating leases are recognised in profit or loss on
a straight-line basis over the term of the lease. Lease incentives are
recognised as an integral part of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between
the finance expense and the reduction of the outstanding liability. The
finance expense is allocated to each period during the lease term so as to produce
a constant periodic rate of interest on the remaining balance of the liability.
(f) Inventories Inventories are measured at the lower of cost and net realisable value.
In determining the cost of raw materials, consumables and goods purchased
for resale, the weighted average purchase price is used. For work in progress and finished goods cost is taken as
production cost, which includes an appropriate proportion of attributable overheads.
(g) Trade receivables Trade receivables are stated initially at fair value then measured at
amortised cost less provisions for impairment. Provisions for impairment are
recognised when there is objective evidence that the Group will not be able to collect
all amounts due according to the original terms of the receivables. The
impairment
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