TIDMILI
RNS Number : 3366P
Imagelinx PLC
24 March 2009
?
Imagelinx Plc
Final results for the year ended 31 December 2008
Group Highlights
* Sales growth of 23% on prior year as a result of Brandmark Digital Limited
acquisition, Hills and Novartis contributing in 2008.
* Operating profit before intangible assets amortisation, exceptional items,
depreciation and share based payments was GBP971,000 compared to a loss of
GBP224,000 in 2007.
* Second half 2008 profit of GBP0.4m before exceptional items and intangible
assets amortisation compared with GBP0.1m in first half of 2008.
* GBP4.6m exceptional gain to income statement as a result of the Pensions
Regulator granting clearance for Imagelinx plc to put its dormant subsidiary
holding the 'Crabtree Pension Scheme' into voluntary liquidation.
* Productivity based on sales per head increased by 19% on prior year.
* New clients won in 2008 have begun contributing strongly to 2009 revenues.
+--------------------------------------------------------+----------+--------+
| Group Results Highlights - GBP millions | 2008 | 2007 |
+--------------------------------------------------------+----------+--------+
| Sales | 9.2 | 7.5 |
+--------------------------------------------------------+----------+--------+
| Operating profit/(loss) before operating exceptional | 0.5 | (0.8) |
| items and intangible assets amortisation | | |
+--------------------------------------------------------+----------+--------+
| Other operating exceptional items | (0.3) | (0.1) |
+--------------------------------------------------------+----------+--------+
| Intangible assets amortisation | (0.2) | (0.2) |
+--------------------------------------------------------+----------+--------+
| Gain on pension scheme | 4.6 | - |
+--------------------------------------------------------+----------+--------+
| Operating profit/(loss) | 4.6 | (1.1) |
+--------------------------------------------------------+----------+--------+
| Net interest | - | - |
+--------------------------------------------------------+----------+--------+
| Profit/(loss) before tax | 4.6 | (1.1) |
+--------------------------------------------------------+----------+--------+
Chairman's statement
"Imagelinx has returned to operating profitability in 2008 and the company is
still growing by winning new clients and by acquiring competitors. We believe
that the current economic climate supports both these lines of growth. This is
because consumer goods companies have become keener to outsource packaging
graphics processes. At the same time, local competitors are likely to suffer
from pressure on both volumes and pricing without offering sufficient scale and
productivity. We are therefore more confident about the year ahead. Once again,
I would like to express the Board's gratitude to clients and shareholders for
their continued support and to employees for their dedication to the success of
the group."
The full announcement follows.
Enquiries
Imagelinx plc
Albert Klein, Executive Chairman Tel: +44 7801 910920
Alistair Rae, Chief Executive Tel: +44 7736 883934
Seymour Pierce Limited
Sarah Jacobs Tel: +44 20 7107 8000
Editors Note:
Imagelinx plc is a global provider of graphic brand management services.
It has operations in UK and USA, offices in France and Germany and is quoted
on the Alternative Investment Market in London.
BUSINESS REVIEW
2008 has been a landmark year for the Imagelinx group, marking as it does its
return to profitability and also the elimination of the GBP5.1m pension fund
deficit relating to a former business.
Group financial performance
The operating profit for the year was GBP10,000 (2007: loss of GBP1,149,000) and
the operating profit before intangible assets amortisation and exceptional items
was GBP461,000 compared to a loss in 2007 of GBP830,000. Before a share based
payments charge of GBP104,000 which for 2009 is forecast to be only GBP20,000,
the profit was GBP565,000. The group has benefited from a further reduction in
costs, the acquisition in February 2008 of the business and assets of Brandmark
Digital Limited, additional revenue from clients won in both 2007 and 2008 and
from the depreciation of sterling against both the dollar and the euro.
Operating profit before intangible assets amortisation, exceptional items,
depreciation and share based payments (EBITDA) was GBP971,000 compared to a loss
of GBP224,000 in 2007.
Revenue grew from GBP7.5m in 2007 to GBP9.2m in 2008. Some GBP400,000 of this
increase was due to two new clients who awarded us their business in 2007 but
where we only saw material revenue come through in 2008. The acquisition of
Brandmark Digital Limited in Scotland in February of 2008 contributed GBP1.1m of
the growth with the rest coming through an improvement in exchange rates as
sterling weakened throughout the year.
Our total cost base rose from GBP8.4m in 2007 to GBP9.0m in 2008, but after
deducting the costs of the new business in Scotland, the existing business saw a
reduction in costs of GBP540,000. Moreover, this reduction was entirely in
overheads rather than in cost of sales. In constant currency terms, the
reduction in costs would have been a further GBP200,000.
Other operating expenses of GBP451,000 (2007: GBP319,000) consist of the annual
amortisation of intangible assets of GBP198,000 and redundancy costs of
GBP253,000.
Basic earnings per share, which includes the gain on the elimination of the
Crabtree Pension Scheme was 1.58p. (2007: 0.40p loss). Earnings per share,
before intangible assets amortisation and exceptional items was 0.16p compared
to a comparable loss of 0.29p in 2007.
As announced on 6 August 2008 and also included in the interim results of the
group for the six months to 30 June 2008, the group entered into an arrangement
with The Pensions Regulator and the Pension Protection Fund ("PPF") that
Imagelinx plc would make a final payment of GBP400,000 to the PPF in respect of
the Crabtree Pension Scheme with a view to the PPF taking this scheme into the
Fund. As the deficit as at 31 December 2007 was GBP5.1m, this transaction has
given rise to an exceptional gain of GBP4.6m after allowing for the payment of
GBP400,000 and related fees. As a result of this transaction, the shareholders
funds have risen to GBP6.8m from GBP2.1m and a major obstacle to the group's
development and what would have been a major demand on the group's cashflow has
been removed.
Business developments
As noted in last year's annual report, we purchased the business and assets of
Brandmark Digital Limited near Glasgow from its administrators in February 2008.
The total acquisition cost, including fees was GBP50,000 and the business,
renamed Brandmark Digital Limited, has produced revenue and net operating
profits of GBP1.1m and GBP0.1m respectively in the eleven months of this year
that it has been operating. It has renewed its business with its most important
customer for three years and as we build up the sale of flexo plates to existing
group customers and have also enhanced our sales efforts in the region, we
expect further growth in the current year. The principal activity of this
business is supporting the printing industry mainly in Scotland with flexo
plates, in addition to its artwork and reproduction pre-press activities.
The group has been successful in re-tendering all of its work with its major
customer in the USA and Europe and also it was confirmed early in 2009 that we
had been re-awarded all our existing work for another major USA based customer.
We have been awarded considerable extra lines of business by a number of
customers and an announcement was made early in January 2009 in this respect. In
summary, Tecnolink Limited's major customer awarded it all its Russian and
Eastern European business, another former printing client returned to us and has
awarded us their pre-press and flexo plate-making business and another client
awarded us their Africa business. We have also benefited from the takeover by
one of our clients of one of its competitors, which has meant additional work,
in the form of their recently acquired brands being allocated to us. In
addition, one of our major clients awarded us substantial extra business and we
expect to see a full year benefit of these awards in 2009.
Our creative work continues to grow, albeit from a small base and we have
widened the services we offer to our clients by providing artwork planners or
project managers to clients. The role of such persons is crucial in managing the
process from design through to print for new products or new designs and
improves the communication between the client and the pre-press supplier. Our IT
subsidiary, ITlinx GmbH has also completed development of a new data collection
management tool. Combined with the role of artwork planner, this tool can
automate what is often the most time-consuming aspect of amending or releasing a
new artwork which is the collation of the text and then controlling the
translation of the text into the many different languages required for local
regional variations. We have begun marketing this system to clients and it is
generating considerable interest.
Outlook
2009 has started well and in line with our expectations. The global economic
slowdown has not so far had a discernible impact on consumer goods' companies
need to continue to achieve differentiation on the shelf but no-one can predict
the likely level of spend throughout this year by the industry. Ours has always
been a difficult industry to forecast but we remain optimistic at present that
we will see further progress for the business in 2009.
CONSOLIDATED INCOME STATEMENT
For the year ended 31 December 2008
+-----------------------------------+-------+------------+------------+-------------+
| | Notes | | 31 | 31 |
| | | | December | December |
+-----------------------------------+-------+------------+------------+-------------+
| | | | 2008 | 2007 |
+-----------------------------------+-------+------------+------------+-------------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------+-------+------------+------------+-------------+
| | | | | |
+-----------------------------------+-------+------------+------------+-------------+
| Revenue | | | 9,246 | 7,525 |
+-----------------------------------+-------+------------+------------+-------------+
| Cost of sales | | | (4,980) | (4,093) |
+-----------------------------------+-------+------------+------------+-------------+
| | | | __________ | ___________ |
+-----------------------------------+-------+------------+------------+-------------+
| GROSS PROFIT | | | 4,266 | 3,432 |
+-----------------------------------+-------+------------+------------+-------------+
| | | | | |
+-----------------------------------+-------+------------+------------+-------------+
| Other operating income | | | 110 | 47 |
+-----------------------------------+-------+------------+------------+-------------+
| Administration expenses | | | (3,915) | (4,309) |
+-----------------------------------+-------+------------+------------+-------------+
| Other operating expenses | | | (451) | (319) |
+-----------------------------------+-------+------------+------------+-------------+
| | | | __________ | ___________ |
+-----------------------------------+-------+------------+------------+-------------+
| OPERATING RESULT BEFORE | | | 10 | (1,149) |
| EXCEPTIONAL GAIN | | | | |
+-----------------------------------+-------+------------+------------+-------------+
| | | | | |
+-----------------------------------+-------+------------+------------+-------------+
| Exceptional gain relating to | | | 4,600 | - |
| pension scheme | | | | |
+-----------------------------------+-------+------------+------------+-------------+
| | | | __________ | ___________ |
+-----------------------------------+-------+------------+------------+-------------+
| OPERATING RESULT | | | 4,610 | (1,149) |
+-----------------------------------+-------+------------+------------+-------------+
| | | | | |
+-----------------------------------+-------+------------+------------+-------------+
| Finance income | | | 8 | 31 |
+-----------------------------------+-------+------------+------------+-------------+
| Finance costs | | | (35) | (48) |
+-----------------------------------+-------+------------+------------+-------------+
| | | | __________ | ___________ |
+-----------------------------------+-------+------------+------------+-------------+
| PROFIT/(LOSS) BEFORE TAX | | | 4,583 | (1,166) |
+-----------------------------------+-------+------------+------------+-------------+
| | | | | |
+-----------------------------------+-------+------------+------------+-------------+
| Tax (expense)/income | | | (17) | 12 |
+-----------------------------------+-------+------------+------------+-------------+
| | | | __________ | ___________ |
+-----------------------------------+-------+------------+------------+-------------+
| PROFIT/(LOSS) AFTER TAX | | | 4,566 | (1,154) |
| | | | | |
+-----------------------------------+-------+------------+------------+-------------+
| | | | __________ | ___________ |
+-----------------------------------+-------+------------+------------+-------------+
| Earnings/(loss) per share from | | | | |
| total and continuing operations | | | | |
+-----------------------------------+-------+------------+------------+-------------+
| Basic | | | 1.58p | (0.40p) |
+-----------------------------------+-------+------------+------------+-------------+
| Diluted | | | 1.49p | (0.40p) |
+-----------------------------------+-------+------------+------------+-------------+
| | | | __________ | ___________ |
+-----------------------------------+-------+------------+------------+-------------+
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENDITURE
For the year ended 31 December 2008
+-----------------------------------+------+------------+-------------+-------------+
| | | | 31 | 31 |
| | | | December | December |
+-----------------------------------+------+------------+-------------+-------------+
| | | | 2008 | 2007 |
+-----------------------------------+------+------------+-------------+-------------+
| | | | GBP'000 | GBP'000 |
+-----------------------------------+------+------------+-------------+-------------+
| | | | | |
+-----------------------------------+------+------------+-------------+-------------+
| Actuarial losses on defined | | | - | (67) |
| benefit pension scheme | | | | |
+-----------------------------------+------+------------+-------------+-------------+
| Exchange differences on | | | (2) | 4 |
| translation of foreign operations | | | | |
+-----------------------------------+------+------------+-------------+-------------+
| | | | _________ | ___________ |
+-----------------------------------+------+------------+-------------+-------------+
| NET INCOME RECOGNISED DIRECTLY TO | | | (2) | (63) |
| EQUITY | | | | |
+-----------------------------------+------+------------+-------------+-------------+
| Profit/(loss) for the period | | | 4,566 | (1,154) |
+-----------------------------------+------+------------+-------------+-------------+
| | | | _________ | ___________ |
+-----------------------------------+------+------------+-------------+-------------+
| Total recognised income and | | | 4,564 | (1,217) |
| expense for the period | | | | |
+-----------------------------------+------+------------+-------------+-------------+
| | | | ___________ | ___________ |
+-----------------------------------+------+------------+-------------+-------------+
| | | | | |
+-----------------------------------+------+------------+-------------+-------------+
| | | | | |
+-----------------------------------+------+------------+-------------+-------------+
CONSOLIDATED BALANCE SHEET
For the year ended 31 December 2008
+-----------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------+------------+------------+------------+
| | | 31 | 31 |
| | | December | December |
+-----------------------------------------+------------+------------+------------+
| | | 2008 | 2007 |
+-----------------------------------------+------------+------------+------------+
| | | GBP'000 | GBP'000 |
+-----------------------------------------+------------+------------+------------+
| NON-CURRENT ASSETS | | | |
+-----------------------------------------+------------+------------+------------+
| Goodwill | | 4,384 | 4,384 |
+-----------------------------------------+------------+------------+------------+
| Other intangible assets | | 591 | 789 |
+-----------------------------------------+------------+------------+------------+
| Property, plant and equipment | | 950 | 1,166 |
+-----------------------------------------+------------+------------+------------+
| | | _________ | _________ |
+-----------------------------------------+------------+------------+------------+
| | | 5,925 | 6,339 |
+-----------------------------------------+------------+------------+------------+
| CURRENT ASSETS | | | |
+-----------------------------------------+------------+------------+------------+
| Inventories | | 62 | 39 |
+-----------------------------------------+------------+------------+------------+
| Trade and other receivables | | 2,953 | 1,691 |
+-----------------------------------------+------------+------------+------------+
| Cash and cash equivalents | | 296 | 533 |
+-----------------------------------------+------------+------------+------------+
| | | _________ | _________ |
+-----------------------------------------+------------+------------+------------+
| | | 3,311 | 2,263 |
+-----------------------------------------+------------+------------+------------+
| | | _________ | _________ |
+-----------------------------------------+------------+------------+------------+
| TOTAL ASSETS | | 9,236 | 8,602 |
+-----------------------------------------+------------+------------+------------+
| | | | |
+-----------------------------------------+------------+------------+------------+
| CURRENT LIABILITIES | | | |
+-----------------------------------------+------------+------------+------------+
| Trade and other payables | | (1,461) | (993) |
+-----------------------------------------+------------+------------+------------+
| Obligations under finance leases | | (89) | (142) |
+-----------------------------------------+------------+------------+------------+
| Bank overdrafts and loans | | (663) | (5) |
+-----------------------------------------+------------+------------+------------+
| Loan notes | | (185) | (200) |
+-----------------------------------------+------------+------------+------------+
| | | _________ | _________ |
+-----------------------------------------+------------+------------+------------+
| | | (2,398) | (1,340) |
+-----------------------------------------+------------+------------+------------+
| NON-CURRENT LIABILITIES | | | |
+-----------------------------------------+------------+------------+------------+
| Retirement benefit obligations | | - | (5,102) |
+-----------------------------------------+------------+------------+------------+
| Obligations under finance leases | | (15) | (20) |
+-----------------------------------------+------------+------------+------------+
| Other payables | | (15) | - |
+-----------------------------------------+------------+------------+------------+
| | | _________ | _________ |
+-----------------------------------------+------------+------------+------------+
| | | (30) | (5,122) |
+-----------------------------------------+------------+------------+------------+
| TOTAL LIABILITiES | | (2,428) | (6,462) |
+-----------------------------------------+------------+------------+------------+
| | | _________ | _________ |
+-----------------------------------------+------------+------------+------------+
| NET ASSETS | | 6,808 | 2,140 |
+-----------------------------------------+------------+------------+------------+
| | | _________ | _________ |
+-----------------------------------------+------------+------------+------------+
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 December 2008
+--------------------------------------------------+--+--------------+------------+
| | | 31 December | 31 |
| | | | December |
+--------------------------------------------------+--+--------------+------------+
| | | 2008 | 2007 |
+--------------------------------------------------+--+--------------+------------+
| | | GBP'000 | GBP'000 |
+--------------------------------------------------+--+--------------+------------+
| Operating activities: | | | |
+--------------------------------------------------+--+--------------+------------+
| Operating profit/(loss) | | 4,610 | (1,149) |
+--------------------------------------------------+--+--------------+------------+
| Exceptional gain relating to Pension Scheme | | (4,600) | - |
+--------------------------------------------------+--+--------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--+--------------+------------+
| Operating result | | 10 | (1,149) |
+--------------------------------------------------+--+--------------+------------+
| Adjustment to reconcile loss before tax to net | | | |
| cash flows: | | | |
+--------------------------------------------------+--+--------------+------------+
| Non-cash | | | |
+--------------------------------------------------+--+--------------+------------+
| Depreciation of property plant and equipment | | 406 | 474 |
+--------------------------------------------------+--+--------------+------------+
| Amortisation of intangible assets | | 198 | 198 |
+--------------------------------------------------+--+--------------+------------+
| Share-based payments | | 104 | 132 |
+--------------------------------------------------+--+--------------+------------+
| Profit on disposal of tangible fixed assets | | (10) | (3) |
+--------------------------------------------------+--+--------------+------------+
| Working capital adjustments | | | |
+--------------------------------------------------+--+--------------+------------+
| (Increase)/decrease in trade and other | | (1,262) | 465 |
| receivables | | | |
+--------------------------------------------------+--+--------------+------------+
| (Increase)/decrease in inventories | | (23) | 22 |
+--------------------------------------------------+--+--------------+------------+
| Increase/(decrease) in trade and other payables | | 483 | (728) |
+--------------------------------------------------+--+--------------+------------+
| Exchange adjustment | | (110) | (6) |
+--------------------------------------------------+--+--------------+------------+
| Employers' pension contribution | | - | (120) |
+--------------------------------------------------+--+--------------+------------+
| Income tax (paid)/received | | (17) | 12 |
+--------------------------------------------------+--+--------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--+--------------+------------+
| NET CASH from operating activities | | (221) | (703) |
+--------------------------------------------------+--+--------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--+--------------+------------+
| Investing activities | | | |
+--------------------------------------------------+--+--------------+------------+
| Interest received | | 8 | 12 |
+--------------------------------------------------+--+--------------+------------+
| Purchases of property, plant and equipment | | (149) | (73) |
+--------------------------------------------------+--+--------------+------------+
| Proceeds from sale of property, plant and | | 26 | 3 |
| equipment | | | |
+--------------------------------------------------+--+--------------+------------+
| Payments to pension scheme including expenses | | (502) | - |
+--------------------------------------------------+--+--------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--+--------------+------------+
| Net cash used in investing activities | | (617) | (58) |
+--------------------------------------------------+--+--------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--+--------------+------------+
| Financing activities | | | |
+--------------------------------------------------+--+--------------+------------+
| Interest paid | | (19) | (48) |
+--------------------------------------------------+--+--------------+------------+
| Payment of finance lease liabilities | | (97) | (152) |
+--------------------------------------------------+--+--------------+------------+
| Repayment of loans | | (200) | - |
+--------------------------------------------------+--+--------------+------------+
| New loans | | 185 | - |
+--------------------------------------------------+--+--------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--+--------------+------------+
| Net cash flows used in financing activities | | (131) | (200) |
+--------------------------------------------------+--+--------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--+--------------+------------+
| Net DECREASE in cash and cash equivalents | | (969) | (961) |
+--------------------------------------------------+--+--------------+------------+
| Cash and cash equivalents at 1 january | | 528 | 1,479 |
+--------------------------------------------------+--+--------------+------------+
| Net foreign exchange difference | | 74 | 10 |
+--------------------------------------------------+--+--------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--+--------------+------------+
| Cash and cash equivalents at 31 december | | (367) | 528 |
+--------------------------------------------------+--+--------------+------------+
| | | _________ | _________ |
+--------------------------------------------------+--+--------------+------------+
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2008
1. Accounting policies
Basis of preparation
The financial information set out above does not constitute the
company's statutory accounts within the meaning of section 240 of the Companies
Act 1985 for the years ended 31 December 2008 or 2007, but is derived from
those accounts. Statutory accounts for 2007 have been delivered to the Registrar
of Companies and those for 2008 will be delivered following the company's
annual general meeting. The auditor has reported on those accounts; their
reports were unqualified and did not contain statements under the Companies Act
1985, s237(2) or (3).
The preliminary announcement has been prepared in accordance with the
International Financial Reporting Standards as issued by the IASB as adopted by
the European Union (IFRSs).
The financial statements have been prepared under the historical cost convention
except that they have been modified to include the valuation of certain
financial assets and liabilities.
The directors continually monitor the financial position of the Group, taking
into account the latest forecasts of future cash flows and analyses of these
forecasts, sensitised in respect of the key uncertainties facing the Group's
ability to generate cash. The directors consider that the Group's ability to
continue as a going concern is dependant on the timing of actual versus targeted
sales in Imagelinx while it is building up the client base for its services and
that such uncertainties have increased given the deterioration in the global
economic climate.
The Group has adopted the accounting policies most appropriate to
its circumstances for the purposes of giving a true and fair view.
2. Post balance sheet events
On 16 January 2009 the company granted options over 15,000,000 ordinary shares
including the grant of 3,000,000 shares to Alistair Rae, 2,500,000 to Albert
Klein and 1,250,000 to David Straker-Smith, representing 1.04% and 0.86% of the
shares in issue. All of the 13,750,000 options are granted with an exercise
price of 5p. The options issued under the Share Incentive Plan in October 2005
have been cancelled.
At an EGM on 9 February 2009, a resolution was passed to implement a capital
reorganization to reduce the nominal value of existing Ordinary Shares to below
the recent trading price thus enabling the Company, should the directors
consider this appropriate, to issue New Ordinary Shares. Every existing share
with a nominal value of 5p was sub-divided into one New Ordinary Share of 0.1p
each and one deferred share of 4.9p each..
The rights attaching to the new ordinary shares are set out in the new Articles,
the adoption of which was passed at the EGM on 9 February 2009.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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