TIDMTAL
RNS Number : 7926Y
Ten Alps PLC
04 December 2014
04 December 2014
Ten Alps Plc
Audited Preliminary Results
Ten Alps Plc ("Ten Alps" or the "Group"), multimedia producer of
high quality TV and radio together with integrated publishing and
communications content, today announces its final results for the
fifteen months to 30 June 2014.
The key focus of the Group has been on completing a
comprehensive restructuring of the business which now positions the
Group to return to sustainable growth and profitability. With a
reputation for high-quality products and digital innovation, the
Group is now focussed on growing revenues and building on an
already encouraging order pipeline for the coming year ahead.
During the period, the Group changed its financial year end from
31 March to 30 June. Accordingly, the Group's audited accounts
cover the 15 months to 30 June 2014, with the comparative period
being for the 12 months ended 31 March 2013. Subsequent financial
years will end on 30 June in the relevant year. The Board took this
decision in order to reflect the varying cyclical nature of the
business units.
Highlights for the 15 month period include (2013: 12 month
period):
Underlying Performance
-- Group revenues of GBP29.45m (2013: GBP27.64m)
-- Adjusted EBITDA loss of GBP(1.13)m (2013: GBP(2.71)m)
-- Reorganisation and restructuring costs of GBP0.33m (2013: GBP0.46m)
-- Impairment and amortisation of GBP0.35m (2013: GBP4.22m)
-- Cash at GBP2.58m (2013: GBP3.13m)
-- Gross Debt of GBP8.45m (2013: GBP6.87m), which matures in 2016
-- Net Debt of GBP5.87m (2013: GBP3.74m)
-- Outlook encouraging, with TV order book at GBP5.2m,
Publishing at GBP2.5m and Communications Agency at GBP0.6m
Statutory Performance
-- Operating Losses of GBP1.99m (2013: GBP7.64m)
-- Loss before tax GBP2.56m (2013: GBP8.0m)
-- Diluted loss per share from continuing activities 1.01 p (2013: loss of 3.15p)
-- Total Assets GBP15.35m (2013: GBP19.05m)
Business Overview and Highlights
-- Key highlights in Broadcasting include:
Ø Blakeway collaborates with Fly Film Company for its first ever
theatric documentary film: "Hockney", backed by the BFI, Screen
Yorkshire and British Film Company. The film was nominated for an
award in the Documentary Category of the London Film Festival and
went on general release in November 2014
Ø Ten Alps programmes won more than 14 awards over the period,
including highly prestigious honours from the RTS, Grierson and
British Journalism Awards
Ø Brook Lapping's delivers 3 part series "The Iraq War" to the
BBC
Ø Blakeway delivers second 6 part series on "My Shakespeare" to
Sky
Ø Films of Record production "Iceland: Life in the Freezer
Cabinet" makes a star of CEO Malcolm Walker and the series trends
on twitter during transmission on BBC2
Ø Blakeway signs another output deal with C4 Dispatches; its
'Plebgate' film `Police, Lies and Videotape' wins the Breaking News
Award in the British Journalism Awards
Ø Blakeway named Independent of the Year at the RTS journalism
awards
Ø Ten Alps TV win their first commission for C4 Music with "F**K
Me" a documentary on the influence of folk on modern music
Ø Brook Lapping maintain their run of securing a commission in
every series of ITV's current affairs strand 'Exposure' with "Too
Late to Save your Life" and another for the Winter 2014 run
Ø Blakeway North's "My Baggy Body" gets 2.5m viewers at 10pm,
the highest ever audience for the C4 "First Cut" strand
Ø Blakeway North produce twenty more episodes of their
successful series Benidorm ER for C5, delivered "Women of the
English Defence League" for BBC3 and "My Life: The Most Famous
School in the World" featuring scholarship boys at Eton for
CBBC.
Ø A third series of Great Ormond Street hospital from Films of
Record is in production for the BBC
Ø Division delivers three programmes for ITV's 'Perspectives'
strand: "The Man with the Hat - Will Young" and "Under My Skin -
Emeli Sande" from Blakeway North, and Brook Lapping's "Freddie
Mercury Saved My Life" presented by Alfie Boe.
-- Key highlights in Publishing include:
Ø Secured five-year major contract renewal in building services
sector
Ø Focussed core B2B publishing on cross-platform products in
Finance, Health, Farming and Infrastructure. Key titles include
Director of Finance, Primary Care and Farm Business.
Ø Recruitment of new talent in sales and editorial, including
sector specialists
Ø Making efficient use of customer data to target B2B products
and develop higher-value advertising channels.
Ø Launched first ipad and digital editions of core titles,
developed new websites, including Community Practitioner
http://www.commprac.com/ and Home & Build
http://homeandbuild.co.uk/
Ø Continued development of events and conferences, launching the
successful Cream Awards and the CPHVA Awards in the farm sector and
scheduling new in Finance and Primary Care.
-- Key highlights in the Communications Agency include:
Ø Nationwide Building Society
Four short animated films developed to support the launch of
FlexOne, Nationwide's first current account aimed at young people
http://www.nationwideeducation.co.uk/finance-education/banking-basics/index.php
Ø Sanofi Pasteur MSD
New functionality added to the multi-media tool kit, 'Wise Up to
STI's' (Sexually Transmitted Infections) on behalf of Sanofi
Pasteur MSD http://wise-up.me/home.aspx
Ø AstraZeneca
'Share good times not Flu', a schools campaign to communicate
the national nasal spray flu programme.
http://www.sharegoodtimesnotflu.co.uk/
Ø Siemens
Created, refreshed and updated the Siemens Education website,
including an interactive 'Inside the Human Body' game, showcasing
how Siemens technology supports doctors in diagnosing and treating
patients and helping pupils understanding systems of the body
http://www.siemens.co.uk/education/en/students/interactives.htm
The website was selected for honours at the annual Siemens
Business Conference in Berlin, where it won first prize in the
Sustainability category.
Siemens Education resources from Ten Alps were also identified
by leading qualifications body OCR as exemplars for teaching and
learning when OCR and Siemens launched a partnership to tackle the
skills gap in engineering and manufacturing.
Ø Go Safe Glasgow
Cycle Aware: An interactive training programme which aims to
increase safety awareness among road users and reduce
casualties
http://www.gosafeglasgow.com/drive-safe/cycle-aware/interactive
Safer Routes to School: Interactive game to help young children
develop road skills and knowledge
http://www.gosafeglasgow.com/public/interactives/safer_routes/safer_routes_to_school.html
Peter Bertram, Chairman, commented:
"This has been a transformative period for the Group, but we
have now largely completed a restructuring programme which
positions the business for profitable growth. We are encouraged by
a significantly improved new business pipeline and see good
prospects for a better performance in the year ahead.
We maintain a focus on our core markets, where we have strong
skill sets and see opportunities for significant organic growth.
With the appointment of our new non-executive director, Mark Wood,
we have added digital expertise which will help us advance in
digital communications and content marketing as well as in
television and publishing.
I would like to once again acknowledge our key asset - our
employees. We continue to employ and attract remarkably talented
individuals across all our divisions. They consistently and
impressively create award-winning programmes and content, something
the Board is very proud of."
For further information, please contact:
Ten Alps plc
Peter Bertram, Chairman Tel: +44 (0)
20 7878 2311
c/o Moira McManus
www.tenalps.com
Grant Thornton, Nominated Adviser Tel: +44 (0)
20 7383 5100
Colin Aaronson / Jen Clarke/
Jamie Barklem
www.grant-thornton.co.uk
Lepe Partners, Corporate Adviser
Jonathan Goodwin Tel: +44 (0) 20 7938 5810
www.lepepartners.com
STRATEGIC REPORT
The Directors of the Company and its subsidiary undertakings
(which together comprise "the Group") present their Strategic
Report for the period ended 30 June 2014.
In accordance with Section 414A of the Companies Act 2006, the
directors serving during the period ended 30 June 2014 and up to
the date of signing the financial statements are pleased to present
their Strategic Report on the development and performance of the
Group during the period ended 30 June 2014, the financial position
of the Group as at 30 June 2014 and the principal risks to which
the Group is exposed.
This report is a key component of the annual report and accounts
which provides an opportunity for the directors to communicate our
strategy and goals (Our Strategy), the measures we use to determine
how well the business is performing (Key Performance Indicators)
and the principal risks (Principal Risks) faced by the business
which could prevent these goals being achieved.
We also provide an overview of how our business is structured
(Our Business Model) and a review of the Group's performance for
the period ended 30 June 2014 (Review of Performance) in order to
add context to the results shown in the financial statements. This
review includes commentary on the three main pillars of our
business model.
Finally, we summarise the financial position of the business
(Financial Review).
Principal Activity
Ten Alps is a multimedia company which produces and delivers
high quality TV and radio together with integrated publishing and
communications content.
Our Strategy
Quality, Delivery, Diversity and Digital
After a period of restructuring, the Group has evolved into a
streamlined entity of two core divisions, Broadcasting and
Publishing and Communications Agency With a simpler and more
effective Group structure, together with a leaner senior management
team, the Group can deliver its stated goals of profitability,
quality, delivery, diversity and a growing focus on digital
services.
Management intends to achieve these goals through key
performance indicators ("KPIs") which have been designed to focus
not just on short term profitability but on quality, reputation
enhancement and long term strategic growth.
Management set out to improve our performance from the last
financial period and, as the results show, we are on the right
track. We are generating profits across most of the business and
have a clear strategy to improve overall company performance in the
period ahead.
Our key areas of focus remain the same as previous years:
-- creative and digital content and products
-- cash generation
-- core market growth
-- enhanced overall performance and
-- investment opportunities
By continuing to implement the current plans and keeping the
focus of the Group on growing quality revenues, the Directors
believe that Ten Alps' assets across the business will be stronger
and thereby increase in value in the coming years. To ensure we are
successful in the implementation and delivery of these strategies,
we will have to increase our internal investment and deploy our
resources in a planned and assessed manner.
The Board monitors the progress of the Group against its
strategic objectives on a regular basis. The performance of the
Group is measured against strategy, budgets and forecasts using a
variety of financial and non-financial indicators as described in
this report. The most significant financial Key Performance
Indicators ("KPI's") used by the Group and the basis of calculation
are set out below:
Key Performance Indicators (KPIs)
Growth in Revenue (%)
Revenue was GBP29.45m for the period and on a like for like
basis decreased by GBP4.08m to GBP23.56m on an annualised basis
(2013: GBP27.64m). This has been mainly in the publishing unit
where revenue decreased by GBP4.49m in the year as the unit reduced
the number of publications and continued to exit from
non-profitable contracts.
Gross margin (%)
Gross margin is the ratio of gross profit to sales expressed as
a percentage. Gross margin has increased on last year to 32% (2013:
29.33%) and reflects the change of the product mix and and better
cost control.
Growth in Earnings before Interest, Tax, Depreciation and
Amortisation (EBITDA) (%)
This is a key measure we use to assess the results of the Group
in any one period/year as growth in the adjusted EBITDA figure
ensures that the Group can increase margins as well as revenue. The
Group recorded a loss in the period of GBP(1.13)m (GBP(0.9)m on an
annualised basis) (2013: loss of GBP(2.71)m) as described in the
overall financial review section.
Cashflow
This is a key KPI and is constantly under review and updated.
The Group has implemented more focused strategies on cash
generation and conversion and has looked to rebalance the working
capital as it aimed to reduce trade and other payables
significantly. The Group will continually target positive cash
generation as it aims to return to profitability and reduced
restructuring costs going forward.
Risks and Uncertainties
In this section we describe the principal risks and
uncertainties that the Directors believe could materially affect
our business. Sound risk management is an essential discipline for
running the business efficiently and pursuing our strategy
successfully.
The Group operates in a highly competitive environment that is
subject to constant and unpredictable changes in client demand and
the advertising economy. In order to remain competitive it must
continue to invest in and adapt its Broadcast, Publishing and
Communications Agency assets.
Risk is reduced by creating and maintaining a balanced portfolio
of products which evolves to meet the needs of our clients.
Investing internally in people and infrastructure while maintaining
the highest quality in the factual media content we produce and
manage will further mitigate these risks.
Going Concern
The Group's business activities and analysis for the period are
detailed in the Our Business and Review Statement below. The
financial results and cash position including borrowing facilities
are described in the Financial Review with further details in Note
1.3 regarding going concern.
Although the company has incurred significant losses in the
period, a majority of these losses are costs for provisions,
restructuring, write offs and non-cash items. The Group will
benefit from the recent funding activity and the cost
restructurings that have taken place and the Directors believe they
are beginning to have an impact on the results and financial
position.
The Group continues to be successful in raising finance and
implementing restructures quickly and efficiently. The Directors
are confident one of the strategies will be achieved.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and has committed
funding in place that the Group can call upon should it be
required. The Group therefore continues to adopt the going concern
basis in preparing its consolidated financial statements
Economic Environment
The Group operates solely in the United Kingdom but with
extensive international sales. As such it is impacted by the
current and foreseeable significant economic challenges the UK and
world economy faces. We have attempted to mitigate these risks
through the considerable restructuring implemented over the last
few years, enabling us to reduce headcount, move to more variable
costs and restructure debt. Further we have increased our controls
over working capital and expenditure.
Publishing Advertising Revenue
A significant proportion of our revenues derive from this
sector, which tends to be cyclical and sensitive to any economic
slowdown or recession. There is also increasing competition for
these revenues, especially from online advertising.
We address these risks by ensuring we have a wide range of B2B
clients and a mix of revenues.
Competitive Environment
The Group is active in highly competitive markets with low
barriers to entry in some sectors. Consequently loss of clients can
have a material impact on the results of the Group. We seek to
mitigate this by cultivating good relations with clients and
building the company's reputation for quality and reliability.
Key Management Staff
We operate in an industry sector that is attractive for
potential employees but there is intense competition for
experienced and highly skilled individuals. We face risks of
failing to recruit and retain the highest qualified and able staff
to deliver and grow our business. As we cannot predict the future
calibre and availability of these people, we place significant
emphasis on succession planning by developing and retaining
management talent.
We do this by:
-- Offering a number of incentive schemes to attract key senior managers and staff
-- Training and motivating staff
-- Career opportunities across the Group
Our Business and Review
Broadcasting - delivering engaging, intelligent and entertaining
content
TV and Radio
The strategy remains that of producing high quality programming
under the Blakeway, Brook Lapping and Films of Record brands,
content which is intelligent, engaging and entertaining and
developed in close partnership with our customers, the major
broadcast channels. The division continues to grow its output in
various new genres, increasing its diversity and range. A key KPI
has been the deliverable of a theatrical release, which was
achieved in 2014 with the screening of Hockney in London.
As the focus of the Group is to increase the quality of its
revenues, the division will be looking for strategic additions to
its talent pool. In order to address this strategy, we will look
for more imaginative ways to enhance our offering to attract new
talent, which will inevitably call for more internal investment. We
believe this investment is required to ensure we can deliver the
growth strategy of the division, including development of a digital
video platform.
Publishing and Communications
Publishing -B2B and consumer content which informs and helps
decision-making
We have implemented a major rationalisation programme within
this unit and we now believe we have the right foundations for
growth. It has been a long journey for our shareholders but now
that we have exclusively UK based assets managed by a focussed and
streamlined team we can look at enhancing the quality of the
services we provide and to further expand our offering.
We secured a 5-year renewal of one our biggest contracts,
producing building services print and digital content
nationwide.
The division's management has been concentrating on the delivery
of increasingly high quality revenue streams and products. These
will provide the ability to upscale new offerings which can expand
the diversity of our client base and increase our footprint in new
growth markets. Further, we have centralised our digital offering
in order to deliver better products across the portfolio.
We continue to monitor advertising sales run-rates, the cost of
selling and new business targets as they remain critical to the
unit. To that end we have retained the same KPIs as last year,
namely a return to profitability, cash generation, retention of
clients and new business wins.
Communications Agency- creating content that counts
This division, formerly known as DBDA, was rebranded Ten Alps
Communicate (www.tenalpscommunicate.com) and is expanding its
offering to a more diverse client base. The aim of this division
continues to be that of increased revenues, greater focus on the
quality of digital offering though creative campaigns and
programmes and exploitation of owned IP assets.
The unit has won important new business from Nationwide Building
Society, Siemens and other major clients with products which are
strong in design, animation and digital functionality. It is aiming
to grow in key sectors in which it believes it has a market
advantage, namely education, health, finance, environment and
safety.
The KPIs will continue to be similar to previous years,
including continued emphasis on increasing revenues, improving
margins and controlling costs. However, to achieve future growth,
the unit will look to enhance employee skills through strategic
training, further develop its own IP assets and thereby expand its
offering in selected sectors which are set to grow in the coming
years.
Financial Review
We are confident the Group is now moving in the right direction.
The extensive divisional consolidation programme over the last few
years has been completed and the results are starting to show
stability and future growth potential. We believe we have stable
foundations to build upon and see an encouraging new business
pipeline.
Revenue from continuing operations for the 15 month period was
GBP29.45m (2013: 12 month period GBP27.64m) and gross profit
increased to GBP9.42m (2013: GBP8.11m). The main variance came in
Publishing, which saw revenues decrease by 26.1% or GBP4.49m year
on year, as the unit continued to streamline its portfolio and exit
non-profitable contracts.
Gross margin increased from 29.3% to 32% in the period, with
operating expenses representing 35.82% of revenues (2013: 39.14%).
This is a consequence of significant restructuring undertaken by
the Group over the last three years and the aim is to have that
below 30% by 2015/16. The charge for reorganisation and
restructuring was GBP0.33m (2013: GBP0.46m).
Adjusted EBITDA equated to a loss of GBP1.13m (2013: loss of
GBP2.71m). Operating loss decreased to GBP1.99m (2013: loss of
GBP7.64m) after an amortisation charge of GBP0.35m (2013:
GBP1.04m). Impairment charge in the period was GBPNil (2013:
GBP3.18m).
The loss was mainly attributable to one of the four units within
Publishing, which has since been restructured. All other parts of
the businesses were operating profitably before allocation of
central overheads of publishing and plc costs.
As the Group made losses for the period to 30 June there was no
corporation tax charge in the period. However, the Group reflected
a movement in the deferred tax asset by decreasing the asset for
the period by GBP(0.25)m (2013: 0.23m) due to reversal of temporary
differences and changes to future corporation tax rates. The asset
carried on the balance sheet is GBP0.49m (2013: GBP0.74m)
Discontinued operations relate to the Fareham Agency held within
Publishing which was disposed of in May 2013. The Fareham Agency
was considered a non-core business unit. The results for the period
include a gain on discontinued operations of GBP0.24m (2012: loss
of GBP0.73m).
Earnings per share
Basic and diluted loss per share from continuing operations in
the period was 1.01p (2013: loss 3.15p) and was calculated on the
losses for the period attributable to Ten Alps shareholders of
GBP2.8m (2013: loss GBP7.69m) divided by the weighted average
number of shares in issue during the period being 276,666,012
(2013: 243,664,300).
Statement of Financial Position
Assets
The Group's non-current assets comprise of goodwill of GBP6.95m
(2013: GBP6.95m), reflecting no impairment for the period ended 30
June 2014 (2013: charge of GBP3.18m), intangibles of GBPNil (2013:
GBP0.36m), property, plant and equipment of GBP0.19m (2013:
GBP0.33m) and deferred tax asset of GBP0.49m (2013: GBP0.74m).
Inventories and trade receivables have decreased by GBP3m to
GBP3.54m (2013: GBP6.54m) reflecting the impact of the disposals in
the period and an inventories review which resulted in the write
off of GBP0.2m (2013: GBPNil). Other receivables have increased to
GBP1.6m (2013: GBP1m) reflecting an increase in accrued income in
the period.
The Group had a cash balance of GBP2.58m as at 30 June 2014
(2013: GBP3.13m). The balance is lower than last year, reflecting
the unfavourable movement in net working capital in the period of
GBP1.87m (2013: GBP1.51m, share issuance in 2013 and increase in
gross debt from GBP6.87m to GBP8.45m).
Total assets for the Group were GBP15.35m (2013: GBP19.05m).
Equity and Liabilities
Retained losses as at 30 June 2014 were GBP22.85m (2013: losses:
GBP20.29m) and total shareholders' equity at that date was loss of
GBP(1.4)m (2013:asset GBP1.16m).
On 23 September 2013, the Group announced that it received an
unsecured loan note of GBP1.25m for business development and
general working capital requirements. As a consequence the Group
had an outstanding long term debt debt of GBP8.45m (2013:
GBP6.87m).
The borrowings are split into three categories. The unsecured
debt facility of GBP4.34m (2013: GBP4.32m), secured loan notes of
GBP2.67m (2013: GBP2.35m) and unsecured loan notes of GBP1.44m
(2013: GBP0.2m). The debt facility is due in February 2016 and the
loan notes in March 2016 with no mandatory repayments on either of
these amounts until the due dates. Net debt as at 30 June 2014 was
GBP5.87m (2013: GBP3.75m).
Current liabilities consisting of trade and other creditors have
decreased by GBP2.71m to GBP8.3m (2013: GBP11.01m). Deferred income
of GBP2.04m (2013: GBP2.54m) has decreased due to disposals in the
period and clients paying later which has had an impact on the cash
balance at the period end. The Group has a production finance loan
of GBP0.45m (2013: GBPNil) relating to a specific long term
production and is secured on the assets of that production alone
and has since been completed and repaid post 30 June 2014.
The Group had no deferred consideration commitments in the
period ending 30 June 2014 (2013: GBP0.1m). The amounts in 2013
relate to earn out payments due on the acquisition of Grove House
Publishing.
Cash flows
During the period the Group took the opportunity to normalise
its day to day working capital by taking a long term loan of
GBP1.25m as mentioned above. As a consequence the Group used cash
of GBP1.87m in the 15 month period (2013: annualised GBP1.51m) in
its operations. The net movement in the period was a decrease in
cash of GBP0.56m (2013: increase of GBP0.28m).
Peter Bertram Nitil Patel
Chairman Chief Financial Officer
Consolidated income statement
15mth Period Year
ended ended
30 June 31 March
2014 2013
Notes GBP'000 GBP'000
----------------------------------------- ------ ------------- ---------
Continuing Operations
Revenue 2 29,454 27,641
Cost of Sales 2 (20,030) (19,535)
----------------------------------------- ------ ------------- ---------
Gross Profit 9,424 8,106
Operating expenses before restructuring
costs, depreciation, amortisation
and impairment 6 (10,549) (10,818)
----------------------------------------- ------ ------------- ---------
Adjusted EBITDA (1,125) (2,712)
Restructuring costs (330) (461)
Depreciation (179) (254)
Amortisation and impairment
of intangible assets 6 (352) (4,217)
----------------------------------------- ------ ------------- ---------
Operating loss (1,986) (7,644)
Finance costs (570) (359)
Finance income - 1
----------------------------------------- ------ ------------- ---------
Loss before tax (2,556) (8,002)
Income tax (expense)/credit (247) 230
----------------------------------------- ------ ------------- ---------
Loss for the period/year (2,803) (7,772)
Discontinued operations
Loss for the year from discontinued
operations 3 243 (727)
Loss for the period/year (2,560) (8,499)
----------------------------------------- ------ ------------- ---------
Continuing operations attributable
to:
Equity holders of the parent (2,803) (7,772)
Discontinued operations attributable
to:
Equity holders of the parent 243 (640)
Non-controlling interest - (87)
(2,560) (8,499)
----------------------------------------- ------ ------------- ---------
Basic earnings per share
From continuing operations 4 (1.01)p (3.15)p
From discontinued operations 4 0.09p (0.26)p
Total (0.92)p (3.41)p
Diluted earnings per share
From continuing operations 4 (1.01)p (3.15)p
From discontinued operations 4 0.09p (0.26)p
Total (0.92)p (3.41)p
The accompanying principal accounting policies and notes from
part of these consolidated financial statements.
Consolidated statement of comprehensive income
15mth Period
ended Year ended
30 June 31 March
2014 2013
GBP'000 GBP'000
---------------------------------- ------------- -----------
Loss for the period (2,560) (8,499)
Other comprehensive income:
Items that will be subsequently
reclassified to profit
and loss - -
Foreign investment translation
differences - (14)
Total comprehensive income
for the period (2,560) (8,513)
----------------------------------- ------------- -----------
Attributable to:
Equity holders (2,560) (8,426)
Non-controlling interest - (87)
----------------------------------- ------------- -----------
(2,560) (8,513)
---------------------------------- ------------- -----------
Consolidated statement of financial position
As at As at
30 June 31 March
2014 2013
Note GBP '000 GBP '000
------------------------------- ----- --------- ---------
Assets
Non-current
Goodwill and intangibles 6 6,953 7,305
Property, plant and equipment 186 331
Deferred tax 493 742
7,632 8,378
------------------------------- ----- --------- ---------
Current assets
Inventories 989 1,710
Trade receivables 2,552 4,828
Other receivables 1,596 1,001
Cash and cash equivalents 2,578 3,130
7,715 10,669
------------------------------- ----- --------- ---------
Total assets 15,347 19,047
------------------------------- ----- --------- ---------
Equity and liabilities
Shareholders' equity
Called up share capital 5 5,534 5,534
Share premium account 15,228 15,228
Merger reserve 696 696
Exchange reserve - -
Retained earnings (22,854) (20,294)
------------------------------- ----- --------- ---------
Total shareholders' equity (1,396) 1,164
Non-controlling interest - -
------------------------------- ----- --------- ---------
Total equity (1,396) 1,164
Liabilities
Non-current
Borrowings 8,447 6,872
Other non-current liabilities - -
------------------------------- ----- --------- ---------
8,447 6,872
------------------------------- ----- --------- ---------
Current liabilities
Trade payables 3,013 4,959
Other payables 5,283 6,052
Current tax liabilities - -
Borrowings - current - -
------------------------------- ----- --------- ---------
8,296 11,011
Total equity and liabilities 15,347 19,047
------------------------------- ----- --------- ---------
The consolidated financial statements were approved by the Board
on 03 December 2014 and are signed on its behalf by N. Patel
Consolidated statement of cash flows
15mth Period
ended Year ended
30 June 31 March
2014 2013
Note GBP'000 GBP'000
-------------------------------------- ----- ------------- -----------
Cash flows from operating activities
Loss for the period (2,560) (8,499)
Adjustments for:
Income tax expense/(credit) 247 (230)
Depreciation 179 317
Amortisation and impairment
of intangibles 6 354 4,271
Finance costs 570 359
Finance income - (1)
Share based payment charge - 159
(Profit)/Loss on disposal of
subsidiaries (237) 255
Loss on sale of property, plant
and equipment 4 104
-------------------------------------- ----- ------------- -----------
(1,443) (3,265)
(Increase)/decrease in inventories 709 (240)
Decrease in trade and other
receivables 1,483 4,305
Decrease in trade and other
payables (2,323) (2,118)
-------------------------------------- ----- ------------- -----------
Cash used in operations (1,574) (1,318)
Finance costs paid (295) (196)
Finance income received - 3
Net cash flows used in operating
activities (1,869) (1,511)
-------------------------------------- ----- ------------- -----------
Investing activities
Disposal of subsidiary undertakings,
net of cash and overdrafts
acquired 163 368
Payment of contingent consideration (100) (126)
Purchase of property, plant
and equipment (5) (118)
Proceeds of sale of property,
plant and equipment 3 15
Net cash flows used in investing
activities 61 139
-------------------------------------- ----- ------------- -----------
Financing activities
Issue of ordinary share capital - 1,061
Borrowings received 1,250 592
Capital element of finance
lease payments - (4)
Net cash flows from financing
activities 1,250 1,649
-------------------------------------- ----- ------------- -----------
Net increase/(decrease) in
cash and cash equivalents (558) 277
Translation differences 6 (11)
Cash and cash equivalents at
1 April 3,130 2,864
-------------------------------------- ----- ------------- -----------
Cash and cash equivalents at
30 June 2014 and 31 March 2013 2,578 3,130
-------------------------------------- ----- ------------- -----------
Consolidated statement of changes in equity
Total
attributable
Share Share Merger Exchange Retained to equity Non-controlling Total
Note capital premium reserve reserve earnings shareholders interest equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
----------------- ------ -------- -------- -------- --------- --------- ------------- ---------------- --------
Balance at 1 April
2012 2,651 14,630 696 14 (12,041) 5,950 199 6,149
------------------------- -------- -------- -------- --------- --------- ------------- ---------------- --------
Loss for the year - - - - (8,412) (8,412) (87) (8,499)
Other
comprehensive
income
Translation differences - - - (14) - (14) - (14)
------------------------- -------- -------- -------- --------- --------- ------------- ---------------- --------
Total comprehensive
income - - - (14) (8,412) (8,426) (87) (8,513)
Equity-settled
share-based
payments - - - - 159 159 - 159
Disposal of
non-controlling
interest - - - - - - (112) (112)
Dividends paid 2,883 598 - - - 3,481 - 3,481
Balance at 31 March
2013 5,534 15,228 696 - (20,294) 1,164 - 1,164
------------------------- -------- -------- -------- --------- --------- ------------- ---------------- --------
Balance at 1 April
2012 5,534 15,228 696 - (20,294) 1,164 - 1,164
------------------------------ ------ ------- ---- --------- -------- --------
Loss for the year - - - - (2,560) (2,560) - (2,560)
Other comprehensive
income
Translation differences - - - - - - -
----------------------------- ------ ------- ---- --------- -------- --------
Total comprehensive
income - - - - (2,560) (2,560) - (2,560)
Equity-settled share-based - - - - - - - -
payments
Disposal of non-controlling - - - - - - - -
interest
Shares issued - - - - - - - -
----------------------------- ------ ------- ---- --------- -------- --------
Balance at 30 June
2014 5,534 15,228 696 - (22,854) (1,396) - (1,396)
------------------------------ ------ ------- ---- --------- -------- --------
1) ACCOUNTING POLICIES
1.1) General Information
Ten Alps plc and its subsidiaries (the Group) is a multi-media
Group which produces high quality TV and radio together with
integrated publishing and communications content.
Ten Alps plc is the Group's ultimate parent and is a public
listed company incorporated in Scotland. The address of its
registered office is 7 Exchange Crescent, Conference Square,
Edinburgh EH3 8AN.
Its shares are traded on the AIM Market of the London Stock
Exchange plc (LSE:TAL).
These consolidated financial statements have been approved for
issue by the Board of Directors on 03 December 2014.
1.2) Basis of Preparation
The Group's accounting policies are consistent with those
applied in the year to 31 March 2013, amended to reflect any new
standards. The adoption of new standards in the year has not
resulted in a significant impact to the group's accounting
policies. The financial statements of the Group have been prepared
in accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union (EU) and the Companies
Act 2006 applicable to companies reporting under IFRS.
The financial information contained in this document does not
constitute statutory financial statements within the meaning of
section 434 of the Companies Act 2006. The consolidated statement
of financial position as at 30 June 2014 and the consolidated
income statement, consolidated statement of comprehensive income,
consolidated cash flow statement, consolidated statement of changes
in shareholders' equity and associated notes for the year then
ended have been extracted from the Group's 2014 statutory financial
statements upon which the auditors' opinion is unqualified, and
does not include any statement under Section 498 (2) or (3) of the
Companies Act 2006.
During the period the Group changed its financial year end from
31 March to 30 June. Accordingly, the Group's audited accounts
cover the 15 months to 30 June 2014, with the comparative period
being for the 12 months ended 31 March 2013. Subsequent financial
years will end on 30 June in the relevant year. The Board took this
decision in order to reflect the new cyclical nature of the
business units.
The financial information relating to the period ended 30 June
2014 has not yet been filed with the Registrar of Companies. Copies
of the Company's Annual Report and Accounts for 2014 will be sent
to shareholders as soon as practicable and will also be made
available on the Company's website. The Annual General Meeting of
the Company will be convened at 9:00am, on 31 December 2014, at
Grant Thornton UK LLP, 30 Finsbury Square, London, EC2P 2YU.
1.3) Going Concern
Although the Group has incurred significant losses during the
period, it has completed and implemented significant funding
activities, disposals and cost restructurings to mitigate this. The
Group has long term debt due in February and March 2016 on which
the financial covenants have been waived by the debt holders.
The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, show that the
Group should be able to operate within the level of its current
financing.
Management's strategy has been incorporated into scenario based
forecasts which highlight the Group's need to raise additional
finance and/or dispose of assets, however certain mitigating
actions could be taken to manage cash resources if required.
The Group continues to be successful in raising finance and
implementing restructures quickly and efficiently. The Directors
are confident one of the strategies will be achieved.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and has committed
funding in place that the Group can call upon should it be
required. The Group therefore continues to adopt the going concern
basis in preparing its consolidated financial statements.
2) SEGMENTAL INFORMATION
Management currently identifies the Group's three service lines
as two operating segments, Broadcast and Publishing and
Communications, with the latter housing Publishing and Agency and
further described in the accounting policy note. These operating
segments are monitored and strategic decisions are made on the
basis of adjusted segment operating results.
In addition, items included under 'Central and Plc' relate
mainly to Group activities based in the United Kingdom.
Central
Publishing Broadcast Agency and PLC Total
2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
Continuing GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
Operations '000 '000 '000 '000 '000 '000 '000 '000 '000 '000
-------- -------- -------- -------- ------ ------ -------- -------- --------- ---------
Revenue 15,874 17,189 10,733 8,294 2,423 2,158 424 - 29,454 27,641
---------------- -------- -------- -------- -------- ------ ------ -------- -------- --------- ---------
EBITDA (733) (2,337) 321 510 152 46 (865) (932) (1,125) (2,713)
Restructuring
costs (284) (384) - (25) (45) (27) - (25) (329) (461)
Depreciation (111) (173) (51) (61) (17) (16) - (3) (179) (253)
Amortisation 16 (944) - - (74) (244) (295) 146 (353) (1,042)
Impairment
loss - - - - - - - (3,175) - (3,175)
---------------- -------- -------- ------ ------ -------- --------
Operating
(loss)/profit (1,112) (3,838) 270 424 16 (241) (1,160) (3,989) (1,986) (7,644)
---------------- -------- -------- -------- -------- ------ ------ -------- -------- --------- ---------
Segment
Assets 8,709 11,415 5,101 4,831 1,600 1,677 (63) 1,124 15,347 19,047
---------------- -------- -------- -------- -------- ------ ------ -------- -------- --------- ---------
Segment
Liabilities (4,140) (7,344) (2,661) (2,354) (512) (447) (9,430) (7,738) (16,743) (17,883)
---------------- -------- -------- -------- -------- ------ ------ -------- -------- --------- ---------
Other Segment
Items:
Expenditure
on intangible
assets - - - - - - - - - -
Expenditure
on tangible
assets 4 106 - 5 1 7 - - 5 118
---------------- -------- -------- -------- -------- ------ ------ -------- -------- --------- ---------
The internal reporting of the Group's performance does not
require that costs and/or Statement of Financial Position
information are gathered on the basis of the geographical
streams.
The Group's principal operations are in the United Kingdom. Its
revenue from external customers in the United Kingdom is GBP25.12m
(2013: GBP24.18m), and the total revenue from external customers in
other countries is GBP4.33m (2013: GBP3.46m).
3) DISCONTINUED OPERATIONS
During the period to 30 June 2014, the Fareham Agencies unit in
the Publishing and Communications division was disposed of.
During the year ended 31 March 2013, two cash generating units
were disposed of: Ten Alps Communications Asia unit (consisting of
the following legal entities: Ten Alps Asia Holdings Pte Limited
and Ten Alps Communications Asia Pte Limited) in the Publishing
unit and Below the Radar Limited in the TV division. The Edinburgh
office was closed as part of the on-going Publishing units overall
Group restructuring.
Analysis of the result of the discontinued operations is as
follows:
2014 2013
GBP'000 GBP'000
---------------------------------- -------- --------
Revenue 333 6,954
Cost of sales (250) (5,264)
----------------------------------- -------- --------
Gross Profit 83 1,690
Operating expenses (77) (2,030)
Reorganisation and restructuring
costs - (282)
Depreciation (1) (117)
Operating profit/(loss) 5 (739)
Finance income - 2
----------------------------------- -------- --------
Profit/(Loss) before tax 5 (737)
Taxation - 10
Pre-tax gain on disposal of
discontinued operations 238
----------------------------------- -------- --------
Profit/(Loss) for the year
from discontinued operations 243 (727)
----------------------------------- -------- --------
The net cash flows attributable to the discontinued operations
are as follows:
2014 2013
GBP'000 GBP'000
---------------------- -------- --------
Operating cash flows 110 (872)
Investing cash flows - (72)
Financing cash flows - -
Total cash flows 110 (944)
----------------------- -------- --------
4) EARNINGS PER SHARE
2014 2013
Weighted average number of shares
used in basic
earnings per share calculation 276,666,012 243,664,300
Dilutive effect of share options - -
------------------------------------------ ------------ ------------
Weighted average number of shares
used in diluted 276,666,012 243,664,300
earnings per share calculation
------------------------------------------ ------------ ------------
GBP'000 GBP'000
Loss for period attributable
to shareholders (2,803) (7,685)
Amortisation and impairment of
intangible assets adjusted for
deferred tax impact 327 4,103
Restructuring 329 461
Gain on extinguishment of bank
debt - -
Share-based payments - 159
------------------------------------------ ------------ ------------
Adjusted loss for period attributable
to equity holders of the parent (2,147) (2,962)
------------------------------------------ ------------ ------------
Profit/(Loss) for year from discontinued
operations attributable to shareholders 243 (640)
------------------------------------------ ------------ ------------
Continuing operations:
Basic Loss per Share (1.01)p (3.15)p
Diluted Loss per Share (1.01)p (3.15)p
Adjusted Basic Loss per Share (0.78)p (1.22)p
Adjusted Diluted Loss per Share (0.78)p (1.22)p
Discontinued operations:
Basic Profit/(Loss) per Share 0.09 p (0.26)p
Diluted Profit/ Loss per Share 0.09 p (0.26)p
5) SHARE CAPITAL
2014 2013
Share Share Share Share
Shares capital premium Shares capital premium
GBP'000 GBP'000 GBP'000 GBP'000
----------------------- ------------ ------------
Authorised ordinary
shares of 2p each No Maximum N/A No maximum N/A
----------------------- ------------ --------- --------- ------------ --------- ---------
Allotted, called
up and fully paid
ordinary of 2p
each:
At start of year 276,666,012 5,534 15,228 132,541,012 2,651 14,630
Shares issued as
consideration - - - - - -
Shares issued as
remuneration - - - 10,800,000 256 35
Shares issued as
private placement - - - 133,325,000 2,627 563
At end of period/year 276,666,012 5,534 15,228 276,666,012 5,534 15,228
----------------------- ------------ --------- --------- ------------ --------- ---------
6) INTANGIBLE ASSETS
Goodwill Customer Magazine Customer Websites Total
Relationships titles Contracts
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------- --------- -------------- --------- ---------- --------- ---------
Cost
At 1 April 2012 26,013 3,818 1,753 171 1,310 33,065
Revaluation of
contingent consideration - - - - - -
Disposals & retirements (351) - (651) - - (1,002)
Exchange movements - - 16 - - 16
At 31 March 2013 25,662 3,818 1,118 171 1,310 32,079
--------------------------- --------- -------------- --------- ---------- --------- ---------
Additions - - - - - -
Internal development - - - - - -
Revaluation of
contingent consideration - - - - - -
Disposals & retirements - - - - - -
Exchange movements - - - - - -
At 30 June 2014 25,662 3,818 1,118 171 1,310 32,079
--------------------------- --------- -------------- --------- ---------- --------- ---------
Amortisation
At 1 April 2011 (15,617) (3,158) (1,335) (144) (758) (21,012)
Charge for the
year - (570) (251) (27) (248) (1,096)
Impairment charge (3,175) - - - - (3,175)
Disposals & retirements 27 - 494 - - 521
Exchange movements - - (12) - - (12)
At 31 March 2013 (18,765) (3,728) (1,104) (171) (1,006) (24,774)
--------------------------- --------- -------------- --------- ---------- --------- ---------
Charge for the
year - (90) (14) - (248) (352)
Impairment charge - - - - - -
Disposals & retirements - - - - - -
Exchange movements - - - - - -
At 30 June 2014 (18,765) (3,818) (1,118) (171) (1,254) (25,126)
--------------------------- --------- -------------- --------- ---------- --------- ---------
Net Book Value
At 30 June 2014 6,897 - - - 56 6,953
--------------------------- --------- -------------- --------- ---------- --------- ---------
At 31 March 2013 6,897 90 14 - 304 7,305
--------------------------- --------- -------------- --------- ---------- --------- ---------
Goodwill
Goodwill arising on acquisitions after the date of transition to
IFRS is attributable to operational synergies and earnings
potential expected to be realised over the longer term.
Customer Relationships
Customer relationships relating to contract publishing
relationships are amortised over an 8 year period which is
representative of the average length of the contract publishing
relationships acquired.
Magazine Titles
Magazine titles are magazines for which the intellectual
property is wholly owned by the company.
Websites
Development costs of revenue generating websites are capitalised
as intangible assets.
Impairment Tests for Goodwill
The carrying amount of goodwill by operating segment is:
2014 2013
GBP'000 GBP'000
------------ -------- --------
Publishing 4,399 4,399
TV 1,611 1,611
Agency 887 887
Total 6,897 6,897
------------ -------- --------
Goodwill is not amortised but tested annually for impairment
with the recoverable amount being determined from value in use
calculations. The key assumptions for the value in use calculations
are those regarding the discount rate, growth rates and forecasts
in income and costs.
The Group assessed whether the carrying value of goodwill was
supported by the discounted cash flow forecasts of operating
segment based on financial forecasts approved by management
covering a seven-year period, taking in to account both past
performance and expectations for future market developments.
Management has used a seven year model predominately because the
earnout models used on acquisitions have been based on seven year
scenarios. Management estimates the discount rate using a pre-tax
rate that reflects current market assessments of the time value of
money and the risks specific to media businesses.
In assessing the divisions the Group reviewed the management
forecasts for a projection of 2 years at 2% for 2015 and 2.5% for
2016 in line with long term growth rate. Management believe this
rate does not exceed the growth rate of the industry and the UK
economy in the long term. After the 2 year period, management
reflected the significant cost benefits and restructure incurred by
the Group over the last three years into the forecasts and
concluded that no further benefit or growth rate would be applied
thereafter. The management forecasts include restructurings which
have been completed prior to 30 June 2014.
In evaluating the recoverable amount, we employ the discounted
cash flow methodology, which is based on making assumptions and
judgements on forecasts, margins, discount rates and working
capital needs. These estimates will differ from actuals in the
future and could therefore lead to material changes to the
recoverable amounts.
The discount rate applied across all the segments for 2014 was
7.5% (2013: 9.3%). The reduction reflects the weighting of the debt
and equity valuation of the Group, the overall calculation and
methodology remains unchanged from prior periods. As the overall
debt has increased and the equity value decreased in the period,
the discount rate has fallen to reflect the lower debt borrowing
costs. A sensitivity analysis of an increase in the discount rate
by 2% is shown below.
Broadcast
A pre-tax discount rate of 7.5% (2013: 9.3%) has been used. The
main assumptions on which the forecast cash flows were based
include revenue growth and margin growth. All key assumptions used
by management within the cash flow forecasts are based on past
experience, sector experience.
Publishing
A pre-tax discount rate of 7.5% (2013: 9.3%) has been used. The
main assumptions on which the forecast cash flows were based
include revenue growth and margin growth. All key assumptions used
by management within the cash flow forecasts are based on past
experience, sector experience.
Agency
A pre-tax discount rate of 7.5% (2013: 9.3%) has been used. The
main assumptions on which the forecast cash flows were based
include revenue growth and margin growth. All key assumptions used
by management within the cash flow forecasts are based on past
experience, sector experience.
Changes in these assumptions can have a significant effect on
the recoverable amount and therefore the value of the impairment
recognised.
Assumption Judgement Sensitivity
----------- --------------------------- ----------------------------
Discount As indicated above An increase in the discount
Rate the rate used is 7.5% rate by 2% will result
in a decrease in the
overall goodwill carried
at the period end by
GBP0.29m. A decrease
in the discount rate
by 1% will not result
in an impairment charge.
----------- --------------------------- ----------------------------
Growth A rate of 2% and 2.5% If 0% growth rate was
Rate and has been used for applied and all benefits
Strategic the first 2 years from the restructuring
plans respectively. and reorganisation were
eliminated then the
Publishing unit would
be impaired by GBP3.21m
and Agency by GBP0.36m.
Broadcast division would
not be impaired.
----------- --------------------------- ----------------------------
Cashflows Cash collection is A 15% fall in cashflow
consistent with previous estimates would result
years with no significant in an overall impairment
bad debts being incurred of GBP0.79m in the period.
due to write offs
taken in the previous
years and provisions
for this period.
----------- --------------------------- ----------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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