Interim Results
December 01 2003 - 2:02AM
UK Regulatory
RNS Number:6652S
Dream Direct Group PLC
01 December 2003
Dream Direct Group plc
PRESS RELEASE
For Immediate Release 1 December 2003
Dream Direct Group plc ("Dream Direct") is the UK's leading direct retailer of
family software and related peripheral products.
RESULTS HIGHLIGHTS FOR 6 MONTHS ENDED 30th SEPTEMBER 2003
* Revenue increased by 54% to #3.76m (2002: #2.45m).
* Customer database increased to 390,000 (2002: 228,000) - up 71%
period on period.
* Pre tax loss for the period reduced to #366k (2002: #522k
loss).
* Loss before interest, depreciation and amortisation
reduced to #300k (2002: #479k loss).
* Cash outflow from operations reduced to #475k (2002: #755k),
which incorporates prepayment of Autumn and Christmas catalogues of #409k.
Christmas and New Year trading period expected to be cash generative.
* Commenced strategy of creating stable of complementary catalogues
with launch of Boogaloo - initial performance ahead of expectations.
* Loss included #45k of Boogaloo set up costs
* Business is now entering the key Christmas and New Year trading
period.
Commenting on the results and prospects for the Company, Robert Colquhoun, Chief
Executive, said:
"I am pleased to be able to report another period of strong revenue growth
together with a further significant reduction in operating loss. During the
period we completed our research into a second catalogue focused on the toy,
games and hobby market, ahead of its launch in October. We therefore move in to
the key Christmas trading period with a stronger product portfolio and are well
positioned to maintain a strong rate of revenue growth and to report a profit in
2004/5 as our customer database grows"
ENDS
For further information and enquiries contact:
Dream Direct Group plc
www.eDREAM.co.uk
Robert Colquhoun
Chief Executive Tel: 01869 328210
E-mail: robertc@dream-direct.co.uk
Oliver Vintcent
Director Tel: 01869 328211
E-mail: ollie@dream-direct.co.uk
PR
IKON Associates
Adrian Shaw Tel: 01483 535102
Mobile: 0797 9900733
E-mail: adrian@ikonassociates.com
Download images of the catalogue and software titles are available at the above
web site under the press section at: http://www.edream.co.uk/press/
pressimages.asp?GUID=&MC
Notes for editors:
- Dream Direct Limited was founded in 1997 by Robert Colquhoun and
Ollie Vintcent and the Group was admitted to AIM on 2 May 2002 following its
acquisition of Willisham Group plc, a cash shell.
- Through its Dream Catalogue, the Company is the UK's leading direct
marketing retailer to the family PC software and peripherals market. Titles
cover simulation and family games, home interest and hobbies, education,
children's software and home office. Dream Direct also supplies selected
peripheral equipment for the home PC user including such items as DVD drives,
equipment to transfer photographic negatives and music onto a PC, and also,
digital cameras.
- The Boogaloo catalogue and website was launched in October 2003
offering toy, game and hobby based products aimed primarily at Dream Direct's
core market of adults over 40. The range of products offered covers Games,
Entertainment, Reference, Childrens Range, Models, Puzzles, Hobbies, Gadgets and
Personalised items
- Dream Direct offers over 800 products across its two catalogue brands
and up to 2,500 on its websites, (www.eDream.co.uk and www.eBoogaloo.co.uk),
with around half of its titles not being available on the High Street. In the
family software market, it is the "best seller of non-best sellers", and now
also offers products to the traditional toys, games and hobbies market.
- Examples of best selling titles are English Counties from the Air,
Scrabble, Family Tree Maker, Hornby Virtual Train Set, PC Tutorial Guides,
Carlton Cards, Pocket Camcorder, Memory Pen Drive, Encyclopaedia Britannica,
Audio Cleaning Lab, Flying Scotsman train sets, Games Hut, and Model Cars.
DREAM DIRECT GROUP PLC
CONSOLIDATED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
CHAIRMAN'S REVIEW
The results for the six months ended 30th September 2003 show continued strong
revenue growth and a further reduction in operating losses. Revenue for the
period was #3.76m, an increase of 54% over the same period last year whilst our
pre-tax loss was reduced to #366k (2002: #522k).
We have continued to build our customer database and closed the period at
390,000 an increase of 71% since 30th September 2002, and in line with our
expectations. Further growth in customer numbers has been experienced since the
period end, giving us confidence that we will meet our year end target of
450,000.
The loss for the period included #45k of set up costs associated with the
research and development of a new catalogue, Boogaloo ahead of its launch in
October. This catalogue offers a selection of traditional toy, game and hobby
based products with a particular appeal to our core market, being adults over 40
who are time rich with disposable income. A carefully managed test marketing
programme was commenced at the beginning of October and the response we have
received to date has exceeded our initial expectations.
The decision to launch a second catalogue and website (www.eBoogaloo.co.uk) was
taken after extensive research and is a long established growth path for mail
order businesses, whereby a complementary product range is offered to an
existing customer base. This allows us to offer a wider range of products to our
existing customers whilst also providing a second platform for revenue growth.
In the longer term, and as we move into profit, we will look to develop
complementary catalogue brands. This will provide a broader platform for
continued substantial revenue growth and reflects a core element of our strategy
to build on the opportunities presented by a significant database of customers
with above average leisure time and disposable income. It will allow us to
exploit the mail order expertise we have developed since the inception of Dream.
At the beginning of September we opened a small factory outlet showroom at our
premises in Bicester and results to date are proving satisfactory. We have also
invested in a new call centre telephone system that is already delivering
significant operational improvements as we move into the peak Christmas trading
period.
The business closed the period with cash of #96k having prepaid #409k of autumn
and Christmas catalogue costs. The revenue associated with these prepaid costs
is not generated until October onwards and therefore the early payment of these
costs reduces the cash balance at the end of September. Conversely the second
half of the financial year is expected to be cash generative.
OPERATIONAL REVIEW
We have continued to deliver significant revenue growth through our strategy of
expanding catalogue distribution and selected national press advertising. Gross
profit margin is strong at 57.4% and catalogue distribution is on track. We have
continued to reduce our Off The Page (OTP) advertising spend in line with the
market but overall database growth is ahead of plan and we should exceed our
March 2004 target of 450,000 customers.
We have continued to invest in the business infrastructure in terms of people,
systems and capacity. The investment in new warehouse systems and call centre
technology is delivering progressively greater efficiencies as business volumes
build and we now have sufficient warehouse, call centre and office capacity to
cope with our expected growth through the next two years. The policy of managing
all of these functions in-house enables us to provide the best and most flexible
service to our customers, a key driver in generating repeat business orders.
DREAM DIRECT GROUP PLC
CONSOLIDATED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
CURRENT TRADING AND PROSPECTS
Activity in November was affected by the postal strike and the Rugby World Cup
was an identifiable distraction. These factors have increased the volatility of
response rates to our marketing activity. However, we believe that these are
short terms issues and response rates to more recent marketing activity are
returning to pre-strike levels.
Our full year results will as always be dependent on Christmas, New Year and
January trading and we intend to issue a trading update in early February 2004
to report on this critical period. Whilst we anticipate a further significant
reduction in losses for the full year we will not be looking to make a full year
profit. With the Dream Direct catalogue having rapidly established a significant
database of customers, we have now, with the launch of Boogaloo, commenced the
implementation of our strategy to develop a stable of catalogue brands in order
to increase the offering to existing customers and broaden our market reach with
new customers. This will underpin the sustainable and profitable development of
the Group and we are well placed to report a profit in the 2004/5 financial
year.
DREAM DIRECT GROUP PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
Unaudited Unaudited Audited
Six Months Six Year
Ended Months Ended
30th Ended 31st
September 30th March
2003 September 2003
2002
#'000 #'000 #'000
Turnover - continuing operations 3,759 2,446 7,393
Cost of sales (1,600) (981) (3,007)
Gross profit 2,159 1,465 4,386
Administrative expenses (2,459) (1,944) (5,103)
Loss before depreciation, amortisation, (300) (479) (717)
interest and tax
Depreciation and amortisation (69) (55) (121)
Operating Loss (369) (534) (838)
Interest receivable 3 12 57
Interest payable and similar charges - - (1)
Loss on ordinary activities before (366) (522) (782)
taxation
Taxation on loss from ordinary activities - - -
Loss retained and transferred from (366) (522) (782)
reserves
Basic Loss per share (4.2p) (6.0p) (9.3p)
There were no recognised gains or losses other than the loss for the period. All
transactions arise from continuing operations.
DREAM DIRECT GROUP PLC
CONSOLIDATED BALANCE SHEET
AT 30 SEPTEMBER 2003
Unaudited Unaudited Unaudited Unaudited Audited
30th 30th 30th 30th 31st
September September September September March
2003 2003 2002 2002 2003
#'000 #'000 #'000 #'000 #'000
Fixed assets
Intangible assets 420 465 442
Tangible assets 190 119 113
Investments 511 511 511
1,121 1,095 1,066
Current assets
Stocks 298 214 266
Debtors 893 536 388
Cash at bank and in hand 96 596 633
1,287 1,346 1,287
Creditors: amounts falling due (1,263) (713) (885)
within one year
Net current assets/ 24 633 402
(liabilities)
Total assets less current 1,145 1,728 1,468
liabilities
Creditors: amounts falling due (80) (39) (38)
after more than one year
Net assets / (liabilities) 1,065 1,689 1,430
Capital and reserves
Called up share capital 906 906 906
Share premium account 165 165 165
Merger Reserve 3,468 3,468 3,468
Capital Reserve 1,652 1,652 1,652
Profit and loss account (5,126) (4,502) (4,761)
Equity Shareholders' funds/ 1,065 1,689 1,430
(deficit)
DREAM DIRECT GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
Unaudited Unaudited Unaudited Unaudited Audited
Six Months Six months Six Months Six Months Year
Ended Ended Ended Ended
Ended
30th 30th 30th 30th
31st
September September September
2003 September 2002 2002 March
2003
2003
#'000 #'000 #'000 #'000 #'000
Net cash outflow from operating (475) (755) (716)
activities
Returns on investments and
servicing of finance
Interest received 3 27 57
Interest paid - (14) -
Interest element of finance lease (1) (1) (1)
rentals
Net cash inflow/(outflow) from 2 12 56
returns on investment and
servicing of finance
Capital expenditure and financial
investment
Purchase of tangible fixed assets (124) (56) (97)
Net cash outflow from capital (124) (56) (97)
expenditure and financial
investment
Acquisitions and disposals
Cash acquired with subsidiary - 1,554 1,554
undertakings
Costs of subsidiary acquisition - (361) (361)
Net cash outflow from - 1,193 1,193
acquisitions and disposals
Cash inflow/(outflow) before (597) 394 436
financing
Management of liquid resources
Financing
Issue of share capital - 300 300
Expenses paid in connection with - (118) (118)
share issues
Capital element of finance leases 60 3 (2)
Cash inflow from financing 60 185 180
Increase / (decrease) in cash in (537) 579 616
the period
DREAM DIRECT GROUP PLC
FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2003
Notes to the interim financial information
1. Publication of non-statutory accounts
The unaudited financial information contained in this interim report does not
constitute statutory accounts as defined in Section 240 Companies Act 1985. The
financial information for the full preceding year is based on the statutory
accounts for the financial year ended 31 March 2003. Those accounts, upon which
the auditors issued an unqualified opinion, have been delivered to the Registrar
of Companies.
2. Basis of preparation of interim financial information
The interim financial information has been prepared on the basis of the
accounting policies set out in the group's financial statements for the year
ended 31 March 2003. Fixed annual charges are apportioned to the interim period
on the basis of time elapsed. Other expenses are accrued in accordance with the
same principals used in the preparation of the annual accounts. The taxation
charge, where applicable, is calculated by applying the Directors' best estimate
of the annual tax rate to be paid for the period.
3. Loss per share
The loss per share for the six months ended 30th September 2003 was 4.2p (six
months ending 30th September 2002: loss per share 6.0p, year ending 31st March
2003: loss per share 9.3p)
4. Copies of report
This report is being sent to all registered shareholders of the company. Copies
of the report are available upon application to the company at Granville Way,
Bicester, OXON OX26 4JT.
End
This information is provided by RNS
The company news service from the London Stock Exchange
END
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