29 August 2008
Adwalker Plc
("Adwalker" or "the company")
Final Results
For the year ended 28 February 2008
The board of Adwalker, the AIM listed specialist in digital media
solutions, is pleased to announce its final results for the year ended 28
February 2008.
The Adwalker interactive media platform, Adwalker's primary source
of revenue generation, is an advertising and media platform which is worn by
its operators ('Adwalkers') as a compact body pack incorporating a LCD screen,
wearable computer, touch screen and printer, enabling services and
applications which include brand advertising, point-of-sale, games &
competitions and data capture.
HIGHLIGHTS
- Turnover for the year up 11 per cent. to Euro1,770,195 (2007: Euro1,599,645);
- Award of Euro250,000 Research & Development grant;
- Global Reseller strategy adds partners in Turkey, Macau, Trinidad & Tobago,
Northern Ireland, Brazil, Bermuda, Australia, New Zealand and Holland;
- Lease Hire strategy in key operating territories of UK, USA and Ireland
increases gross profit margin to 47 per cent. (2007: 28 per cent.)
- Placings during the period raised �1,680,000, before expenses;
- Negotiations continue for Interactive Digital Screen Network with Global FMCG Group;
- An additional three groups across Ireland and the USA are at various stages
of negotiation for Interactive Digital Screen Networks; and
- Value of contracts and commitments in the first six months of the current
fiscal year up by 13 per cent. compared with the revenue achieved in the
financial year ended 28 February 2008.
Commenting on today's results Adwalker's Chairman, Padraic
O'Connor, said:
"I am pleased to report the annual results for the year ended 28
February 2008, the third set of annual results since the company's shares were
admitted to trading on AIM in August 2005. It has been another year of growth
for the company that has produced its strongest set of results to date. The
Board is encouraged by the progress made in the year and since the year-end."
Enquiries:
Adwalker plc Tel: +353 (1) 866 9000
Simon Crisp
simon@adwalker.com
John East & Partners Limited Tel: 020 7628 2200
Simon Clements/David Worlidge
Chairman's Statement
I am pleased to report the annual results for the year ended 28
February 2008, the third set of annual results since the company's shares were
admitted to trading on AIM in August 2005. It has been another year of growth
for the company that has produced its strongest set of results to date. The
Board is encouraged by the progress made in the year and since the year-end.
Financials
Turnover for the year was Euro1,770,195 (2007: Euro1,599,645) resulting
in a loss of Euro2,425,322 (2007: Euro3,178,532). The diluted loss per share
amounted to 0.87 cents (2007: 1.80 cents). As at 28 February 2008, the net
cash resources amounted to Euro185,740.
In February 2008, the company was awarded a research and
development grant of up to Euro250,000. The grant is being drawn down through the
reimbursement of costs associated with the development of digital screen
technologies.
During the period under review the company raised �1,680,000 (net
of expenses) from placings of new shares.
The company is currently operating within its existing bank
facilities. In order to continue to operate within these facilities the
company needs to grow its revenue base significantly. The expected near-term
growth in income in the company's core business, being the lease of the
Adwalker platform, is heavily dependent on its global media partners. In the
event that this near-term growth in income is not achieved then the company
will be required to explore ways of raising additional capital.
Current Trading & Prospects - Adwalker Wearable Media
As stated in the AGM statement released on 28 February 2008 the
company launched a VAR (Value Added Reseller) model that enables companies
across the world to adopt the Adwalker platform in local markets beyond
Adwalker's key operating territories in the USA, UK and Ireland. Initial
results of the model are encouraging with reseller licenses signed in Turkey,
China (Macau market), Trinidad & Tobago, Northern Ireland, Brazil, Bermuda,
Australia, New Zealand and Holland.
In the year ended 28 February 2008 our USA, UK and Irish offices
continued to encourage their clients to lease/hire the Adwalker units for
their campaigns, as opposed to Adwalker hiring and deploying its own
personnel. This has resulted in two significant benefits; reducing the
operational dependency on the company and increasing gross profit margin to in
excess of 45 per cent. in 2008 from 28.1 per cent. in the corresponding period
in 2007.
Bookings and commitments for the first six months of the financial
period, are up almost 14 per cent. compared with the revenue achieved in the
financial year ended 28 February 2008. In addition, gross profit margin is up
39 per cent. in the same period.
The Board believes the dual strategies of appointing global value
added resellers and adopting the lease/hire model in the USA, UK and Ireland
are well founded at this time and are encouraged by the contributions of both
of these new sales initiatives in the current period. The Adwalker management
team has worked hard to develop the scalability of the Adwalker wearable media
platform in terms of operational and technological deployment and as a result
intend to increase the accessibility of this platform throughout the world.
As indicated in my last Chairman's statement in the 2007 Annual
Report the Board believes that Adwalker is still working with `early adopting'
clients. Generally, digital media continues to increase in acceptance and we
remain confident that the Adwalker wearable media platform will increase in
importance and ultimate usage, as a result.
Current Trading & Prospects - Interactive Digital Fixed Screen
Networks
As announced in July 2007, Adwalker commenced a pilot study on
behalf of a FTSE 100 FMCG company for the roll-out of an interactive fixed
screen digital network. Following the very encouraging results of the pilot
study up to the period ended 31 March 2008 I can confirm that negotiations
continue concerning the roll-out of this network and I hope to be able to
update you as to progress later this year.
Additionally, the company is also in negotiations with three
further groups to supply similar interactive fixed screen networks into
Ireland and the USA.
Whilst there can be no guarantee of concluding negotiations with
the FMCG company or any of the groups that have expressed an interest in
working with Adwalker, the Board remains confident that the company will make
further progress in this area in the short to medium term.
Strengthened Client List
As foreseen in the Adwalker 2007 Annual Report; the worlds largest
media marketplace has continued to contribute significantly to revenues over
the period. In the year ended 28 February 2008 the USA office was responsible
for 81 per cent. of the company's total revenues.
In the first six months of the current fiscal year campaigns have
been booked with the following clients; Betdaq, Diageo (Corporate), Carlsberg,
Guinness, Mattel, GAA, WKD, Castrol, Disney, Fender, Game Loft, Panasonic,
Sainsbury's, Chevron, Wall Street Journal, Cricket Twenty/20, Coffee Mate,
Cell South, Chrysler, Cirque Dreams, Conde Nast, Cuervo, Ice Road Truckers,
Nintendo, Toys R Us, Sprint, Univision.
The Board is encouraged by the even distribution between repeat and
new client usage over the first six months of the current financial period.
Intellectual Property
In addition to the US and Irish patents held by the company, the
United Kingdom Patent Office has granted Adwalker a patent for its wearable
media platform. Specifically this patent covers "the apparatus for supporting
a mobile electronic display system". The patent is valid until September 2024.
Other Developments
In February 2008, the company announced that Alan Rutherford, CEO
of Digitas Global, and Eric Newnham, Global CEO of Kinetic Worldwide Group
Ltd, were appointed as Non-Executive Directors. I welcome both Alan and Eric
to the board and look forward to working with them.
Outlook
Over a relatively short period of time since the company's
admission to AIM, the executive management team have taken the platform that
they conceived and have built, developed, marketed and established a new
channel in the marketing of consumer brands. In establishing its interactive
wearable media the company has faced difficult challenges in ensuring that it
is accepted by the commercial sector. Continuing challenges are anticipated in
the form of the current economic climate and its adverse effect on consumer
confidence in the key Adwalker operating territories in the USA, UK and
Ireland.
However, the Board believes that the strategies the management team
have implemented over the last year and the exciting prospect of the fixed
interactive digital network channel will see the company through the current
challenging global economic climate.
Padraic O'Connor
Chairman
29 August 2008
Consolidated Balance Sheet at 28 February 2008
As at As at
Notes 28 February 28 February
2008 2007
Euro Euro
Assets
Non-current assets
Plant and equipment 7 266,215 609,973
Intangible assets 205,346 339,642
471,561 949,615
Current assets
Trade and other receivables 205,297 234,552
Bank and cash balances 9 218,731 109,738
424,028 344,290
Total assets 895,589 1,293,905
Equity and liabilities
Capital and reserves
Share capital 5,272,676 3,372,664
Capital reserves 5,753,559 5,392,689
Other reserve (37,550) (8,519)
Share options 522,860 493,410
Accumulated losses (11,614,170) (9,188,848)
Total equity (102,625) 61,396
Non current liabilities
Obligations under finance leases - due
after one year
28,746 63,509
28,746 63,509
Current liabilities
Trade and other payables 777,561 886,296
Bank overdrafts and loans- due within 32,991 98,139
one year
Tax liabilities 120,398 145,829
Obligations under finance leases - due 38,518
within one year
38,736
969,468 1,169,000
Total equity and liabilities 895,589 1,293,905
Consolidated Income Statement for the year ended 28 February 2008
Year ended Year ended
Notes 28 February 28 February
2008 2007
Euro Euro
Revenue - continuing operations 1,770,195 1,599,645
Cost of sales (942,849) (1,149,190)
Gross profit 827,346 450,455
Distribution costs (9,565) (24,727)
Administrative and other operating
expenses (3,297,837) (3,624,733)
Loss from operations - continuing
operations (2,480,056) (3,199,005)
Finance costs 3 (1,768) (3,832)
Income from investments 4 3,720 36,448
Exchange profit/(loss) 52,981 (20,756)
Loss before tax - continuing operations (2,425,123) (3,187,145)
Income tax expense 5 (199) 8,613
Net loss for the period - continuing (2,425,322) (3,187,145)
operations
Loss per share
Basic loss per share 6 (0.92 cent) (1.88 cent)
Diluted loss per share 6 (0.87 cent) (1.80 cent)
Consolidated Statement of Changes in Equity for the year ended 28 February 2008
Share Share Share Other Accumulated Total
Capital Premium Options Reserves Losses equity
Euro Euro Euro Euro Euro Euro
Balance at 1 March
2006 3,372,664 5,392,689 434,684 - (6,010,316) 3,189,721
Net loss for the
year - - - - (3,178,532) (3,178,532)
Exchange rate
movement - - - (8,519) - (8,519)
Share options
granted - - 58,726 - - 58,726
Balance at 28
February 2007 3,372,664 5,392,689 493,410 (8,519) (9,188,848) 61,396
Balance at 1 March
2007 3,372,664 5,392,689 493,410 (8,519) (9,188,848) 61,396
Net loss for the
year - - - - (2,425,322) (2,425,322)
Exchange rate
movement - - - (29,031) - (29,031)
Share options
granted - - 29,450 - - 29,450
Shares Issued 1,900,012 360,870 - - - 2,260,882
Balance at 28
February 2008 5,272,676 5,753,559 522,860 (37,550) (11,614,170) (102,625)
Consolidated Cash Flow Statement for the year ended 28 February 2008
Year ended Year ended
28 February 28 February
2008 2007
Euro Euro
Operating activities
Net loss for the year (2,480,056) (3,178,532)
Adjustments for:
Income taxation expense recognised - (8,613)
Depreciation 365,759 553,255
Share options 29,450 58,726
Amortisation of ACOMS system and patents 159,539 152,633
Investment income (3,720) (36,448)
Foreign exchange gain (52,981) (20,756)
Interest expense 1,768 3,832
Operating cash flows before movements in
working capital (1,980,241) (2,475,903)
Decrease in inventories - 5,390
Decrease in receivables 22,292 282,052
(Decrease)/Increase in payables (106,495) 423,044
Cash generated by operations (2,064,444) (1,765,417)
Interest paid (1,768) (3,832)
Income taxation refunded 6,764 1,251
Net cash outflow from operating activities (2,059,448) (1,767,998)
Investing activities
Interest received 3,720 36,448
Purchases of plant and equipment (22,001) (82,111)
Purchases of patents and trademarks (25,244) (21,905)
Net cash used in investing activities (43,525) (67,568)
Financing activities
Shares issued 2,260,882 -
Decrease in finance leases (36,749) (37,678)
Net cash inflow/(outflow) from financing
activities 2,224,133 (37,678)
Net increase/(decrease) in cash and cash
equivalents 121,160 (1,873,244)
Cash and cash equivalents at beginning of
period 11,599 1,864,087
Effects of exchange rate changes 52,981 20,756
Cash and cash equivalents at end of period 185,740 11,599
Notes to the preliminary Results
1. Publication of non-statutory accounts
The financial information set out above does not constitute the company's
statutory financial statements for the years ended 28 February 2008 or 28
February 2007 but is derived from those financial statements. Statutory
financial statements for 2007 have been delivered to the Companies
Registration Office and those for 2008 will be delivered in due course. The
auditors have reported on those financial statements; their reports were
unqualified, and did include a reference to a material uncertainty which may
cast significant doubt about the group's ability to continue as a going
concern, by way of emphasis without qualifying their report. The auditors have
not made a report under section 193 of the Companies Act, 1990 in respect of
the company's statutory financial statements for the years ended 28 February
2008 or 28 February 2007.
2. Basis of preparation
The group financial statements consolidate those of the company and its
subsidiaries (together referred to as the "group").
The group financial statements have been prepared and approved by the
directors in accordance with International Financial Reporting Standards as
adopted by the EU ("IFRS") and applicable law.
The statements have been prepared on a going concern basis. This assumption is
dependent on the group meeting its projected revenue and expenditure targets.
The group incurred losses of approximately Euro2.4 million in the year to 28
February 2008. The group had a cash reserve of Euro185,740 as at 28 February
2008.
The directors are confident that the group is taking the necessary steps to
grow the business to achieve profitability in the short to medium term. Should
projected profit levels not materialise the directors will take whatever steps
necessary to ensure the group has sufficient working capital for its needs.
The directors have reviewed the forecasted profit and loss account and cash
flows of the group for a period of one year from the date of approval of these
financial statements. They are satisfied that in view of the group's bank
facilities and the expected trading and cash flow performance, the group has
the necessary resources to continue trading for the foreseeable future.
Inherently, there can be no certainty in any of these respects. Accordingly,
they believe that it is appropriate for the financial statements to be
prepared on the going concern basis.
If the group was unable to continue in operational existence for the
foreseeable future, adjustments would have to be made to adjust the balance
sheet values of assets to their recoverable amounts, to provide for further
liabilities that might arise and to reclassify fixed assets and long term
liabilities or current assets and liabilities.
3. Finance costs
Year ended Year ended
28 February 28 February
2008 2007
Euro Euro
Interest on bank overdrafts 1,768 3,832
4. Income from investments
Year ended Year ended
28 February 28 February
2008 2007
Euro Euro
Interest received on bank 3,720 36,448
deposits
5. Income tax expense
Domestic income tax is calculated at 12.5 per cent. of the
estimated assessable profit for the period.
Taxation for other jurisdictions is calculated at the rates
prevailing in the respective jurisdictions.
Year ended Year ended
28 February 28 February
2008 2007
Euro Euro
Income tax expense 199 (8,613)
6. Loss per share
Basic loss per share is based on a loss of Euro2,425,322 (2007:
Euro3,178,532) and a weighted average number of shares in issue of 263,633,702
(2007: 168,633,087).
In 2008 the diluted loss per share has been calculated on the same
basis as basic loss per share because the effect of the potential ordinary
shares (share options) reduces the net loss per share and is therefore
anti-dilutive.
7. Plant and equipment
Adwalker Fixtures & Computer Leasehold
Packs Fittings Equipment Improvements Total
Euro Euro Euro Euro Euro
Cost or
valuation
At 1 March 2007 1,334,619 131,256 178,555 89,174 1,733,604
Additions - - 22,001 - 22,001
At 28 February
2008 1,334,619 131,256 200,556 89,174 1,755,605
Accumulated
depreciation and
impairment
At 1 March 2007 915,600 41,652 139,218 27,161 1,123,631
Charge for the
period 287,553 23,259 36,862 18,085 365,759
At 28 February
2008 1,203,153 64,911 176,080 45,246 1,489,390
Carrying amount
At 28 February
2008 131,466 66,345 24,476 43,928 266,215
At 28 February
2007 419,019 89,604 39,337 62,013 609,973
The carrying amount of assets held under finance lease by the group at 28
February 2008 is Euro35,986 (28 February 2007: Euro69,535).
8. Operating lease commitments
The future minimum lease payments under non-cancellable operating leases by
the group are as follows:
Land & Buildings
As at As at
28 February 28 February
2008 2007
Euro Euro
Not later than one year 1,868 -
Within 2 to 5 years 73,450 34,971
75,318 34,971
9. Bank and cash balances
As at As at
28 February 28 February
2008 2007
Euro Euro
Balance with banks 218,731 109,738
Cash and cash equivalents comprise the As at As at
following:
28 February 28 February
2008 2007
Euro Euro
Euro 195,404 101,608
Pound Sterling 2,838 248
United States Dollars 20,300 7,574
Hong Kong Dollars 189 308
218,731 109,738
10. Dividends
The Directors are not proposing the payment of a dividend in
respect of the year ended 28 February 2008.
11. Copies of report and accounts
Copies of the Report and Accounts will be sent to shareholders today and will
be available to members of the public from the company's registered office,
Crescent Building, Northwood, Santry, Dublin 9 and on the company's website
www.adwalker.com.
END
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