TIDMAEO
RNS Number : 1132H
Aeorema Communications Plc
23 March 2020
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain.
Aeorema Communications plc / Index: AIM / Epic: AEO / Sector:
Media
23 March 2020
Aeorema Communications plc ('Aeorema' or 'the Company')
Interim Report
Aeorema Communications plc, the AIM-traded live events agency,
announces its unaudited results for the six months ended 31
December 2019.
Overview
-- Revenues of GBP 2,913,290 (2018: GBP1,997,303)
-- Operating loss pre-exceptional items of GBP89,978 (2018: loss of GBP141,765)
-- Robust cash position of GBP1,393,243 (31 December 2018: GBP1,030,956)
-- Coronavirus continues to impact on full financial year
Chairman's Statement
The six months ended 31 December 2019 demonstrated robust
trading, with exciting projects being created and a pipeline of new
business wins, resulting in strong revenues up 46% against the
previous year. This contributed to our loss before tax narrowing to
GBP(89,978). Since then, Aeorema, like many other companies, has
been significantly impacted by COVID-19, as clients postpone
events. These unprecedented times have sadly meant that immediate
action was required to ensure the safety of the business including
several cost-cutting initiatives, which have been implemented with
a heavy heart.
I'll start with the good news with recent wins including an
event for a global tech company in Chicago, activations at Euro
2020 for a major newspaper brand and new tech clients for Cannes
Lions. Whilst all these events are now postponed into the next
financial year, we are confident that we are in a strong position
to work through this crisis, not least because we know that we have
an excellent reputation, a strong value proposition and a unique
selling proposition in the marketplace. Notably, this proposition
includes, in tandem with events, a leading moving image department,
which continues to work with clients and help global teams
communicate through traditional video and digital technologies.
Importantly, the quality of our work has been highlighted by
several recent award wins, including the most Creative Agency, the
most Innovative Agency and the delivery of the Best Visual
Spectacular. These have helped further build our reputation and led
us to being shortlisted for several new potential client wins,
which we anticipate will be finalised once the crisis abates.
Furthermore, our existing clients are very supportive and have
indicated that they want to work with us when the crisis
subsides.
Unfortunately, as mentioned, the Company took the decision to
make immediate significant reductions in overheads, including,
regrettably, reducing our workforce by 25%. Additionally,
Non-executive Chairman and our largest and supportive shareholder,
Mike Hale, will not be taking any salary payments from the PLC
until further notice.
Looking ahead, COVID-19 continues to impact on our anticipated
full financial year's figures. The Directors therefore envisage a
loss before tax for FY20 of between GBP150,000 and GBP250,000. As
mentioned in the recent trading update, the Directors consider it
appropriate for market forecasts to be suspended at this time.
The Directors remain confident that the revenue and profit from
postponed events will now fall into
the financial year ending 30 June 2021. Aeorema has maintained
its strong cash position with GBP1,393,243 in the bank as at 31
December 2019 (31 December 2018: GBP1,030,956). As at the date of
this announcement, cash in bank is circa. GBP1,700,000. Our
dividend policy will be reviewed later in the year when we have a
clearer picture of FY 20 results and the economic climate.
We remain vigilant about opportunities that may emerge where we
can use our strong position to offer companies with less resources
join our group and remain well positioned to win new business
across our divisions including within our moving image
department.
Finally, I would like to thank our employees for their hard work
and commitment, as well as our shareholders for their continued
support and wish them all health above all else over the coming
months.
M Hale
Chairman
20 March 2020
**S**
For further information visit www.aeorema.com or contact:
Mike Hale Aeorema Communications Tel: +44 (0) 20
plc 7291 0444
John Depasquale Allenby Capital Limited Tel: +44 (0)20
/ Liz Kirchner (Nominated Adviser 3328 5656
and Broker)
Catherine Leftley St Brides Partners Tel: +44 (0) 20
Ltd 7236 1177
AEOREMA COMMUNICATIONS PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
For the period ended 31 December 2019
Unaudited Unaudited Audited
6 Months 6 Months Year to
to 31 December to 31 December 30 June
2019 2018 2019
As restated As restated
Notes GBP GBP GBP
Continuing Operations
Revenue 2,913,290 1,997,303 6,765,280
Cost of sales (2,044,591) (1,298,421) (4,665,032)
Gross profit 868,699 698,882 2,100,248
Administrative expenses (958,677) (837,580) (1,718,615)
Operating profit / (loss) (89,978) (138,698) 318,633
Finance income 328 287 611
Profit / (loss) before taxation (89,650) (138,411) 382,244
Taxation 5 32,629 26,939 (86,687)
Profit / (loss) for the period
from continuing operations (57,021) (111,472) 295,557
Basic and diluted earnings
per share from continuing
operations
Basic (pence) 6 (0.63003) (1.23166) 3.26564
Diluted (pence) 6 (0.56621) (1.13979) 3.22011
================ ================ ============
There are no other comprehensive income items.
AEOREMA COMMUNICATIONS PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the period ended 31 December 2019
Unaudited Unaudited Audited
6 Months 6 Months Year to
to 31 December to 31 December 30 June
2019 2018 2019
As restated As restated
GBP GBP GBP
Non-current assets
Intangible assets 365,154 365,154 365,154
Property, plant and equipment 98,070 54,848 58,070
Right-to-use assets 425,070 53,943 13,486
Deferred taxation 25,100 29,193 -
913,394 503,138 436,710
Current assets
Trade and other receivables 1,480,984 806,122 1,612,345
Cash and cash equivalents 1,393,243 1,030,956 2,211,161
---------------- ---------------- ------------
2,874,227 1,837,078 3,823,506
Total assets 3,787,621 2,340,216 4,260,216
Current liabilities
Trade and other payables 1,497,323 714,512 2,247,214
Lease liabilities 82,973 61,100 16,475
Dividends payable - 67,879 -
Current tax payable 74,616 9,412 74,616
---------------- ---------------- ------------
1,654,912 852,903 2,338,305
Non-current liabilities
Deferred taxation - - 7,529
Lease liabilities 343,756 - -
---------------- ---------------- ------------
343,756 - 7,529
Total liabilities 1,998,668 852,903 2,345,834
Net assets 1,788,953 1,487,313 1,914,382
================ ================ ============
Equity attributable to equity
holder:
Share capital 1,131,313 1,131,313 1,131,313
Share premium 7,063 7,063 7,063
Merger reserve 16,650 16,650 16,650
Other reserve 56,358 14,221 34,261
Capital contribution reserve 257,812 257,812 257,812
Retained earnings 319,757 60,254 467,283
Total equity 1,788,953 1,487,313 1,914,382
================ ================ ============
AEOREMA COMMUNICATIONS PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 December 2019
Share capital Share Merger Other Capital Retained Total
premium reserve reserve contribution earnings equity
reserve
GBP GBP GBP GBP GBP GBP GBP
At 1 July 2018 1,131,313 7,063 16,650 - 257,812 249,829 1,662,667
IFRS 16 adjustments - - - - - (10,224) (10,224)
Adjusted balance
at 1 July 2018 1,131,313 7,063 16,650 - 257,812 239,605 1,652,443
Payment of dividends - - - - - (67,879) (67,879)
Comprehensive
income for the
period - - - - - (114,539) (114,539)
Share-based
payments - - - 14,221 - - 14,221
IFRS 16 adjustments - - - - - 3,067 3,067
At 31 December
2018 1,131,313 7,063 16,650 14,221 257,812 60,254 1,487,313
At 1 January
2019 1,131,313 7,063 16,650 14,221 257,812 60,254 1,487,313
Payment of dividends - - - - - - -
Comprehensive
income for the
period - - - - - 402,862 402,862
Share-based
payments - - - 20,040 - - 20,040
IFRS 16 adjustments - - - - - 4,167 4,167
At 30 June 2019 1,131,313 7,063 16,650 34,261 257,812 467,283 1,914,382
At 1 July 2019 1,131,313 7,063 16,650 34,261 257,812 467,283 1,914,382
Payment of dividends - - - - - (90,505) (90,505)
Comprehensive
income for the
period - - - - - (57,021) (57,021)
Share-based
payments - - - 22,097 - - 22,097
At 31 December
2019 1,131,313 7,063 16,650 56,358 257,812 319,757 1,788,953
AEOREMA COMMUNICATIONS PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 31 December 2019
Unaudited Unaudited Audited
6 Months 6 Months Year to
to 31 December to 31 December 30 June
2019 2018 2019
As restated As restated
GBP GBP GBP
Cash flow from operating activities
Profit/(loss) before taxation (89,650) (138,411) 382,244
Adjustments for:
Depreciation of property, plant
and equipment 14,064 10,687 21,525
Depreciation of right-of-use assets 43,848 40,458 80,915
Loss on disposal of fixed assets 1,424 - 6,179
Share-based payment 22,097 14,221 34,261
Interest on lease liabilities 10,222 1,975 2,851
Finance income (327) (286) (611)
---------------- ---------------- ------------
Operating cash flow before movement
in working capital 1,678 (71,356) 527,364
Increase/(decrease) in trade and
other payables (755,036) (560,467) 972,235
(Increase)/decrease in trade and
other receivables 131,361 300,170 (506,053)
Cash (used in) / generated from
operating activities (621,997) (331,653) 993,546
Taxation paid - - (11,700)
Cash flow from investing activities
Finance income 327 286 611
Purchase of property, plant and
equipment (55,710) (28,491) (48,731)
Disposal of property, plant and 224 - -
equipment
Net cash used in investing activities (55,159) (28,205) (48,120)
Cash flow from financing activities
Dividends paid (90,505) - (67,879)
Repayment of leasing liabilities (50,257) (45,500) (91,000)
---------------- ---------------- ------------
Net cash used in financing activities (140,762) (45,500) (158,879)
Net increase / (decrease) in cash
and cash equivalents (817,918) (405,358) 774,847
---------------- ---------------- ------------
Cash and cash equivalents at beginning
of period 2,211,161 1,436,314 1,436,314
Cash and cash equivalents at end
of period 1,393,243 1,030,956 2,211,161
================ ================ ============
AEOREMA COMMUNICATIONS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 31 December 2019
1. General information
Aeorema Communications plc is a public limited company
incorporated within the United Kingdom. The company is domiciled in
the United Kingdom and its principal place of business is 23-31
Great Titchfield Street, London, W1W 7PA. The Company's ordinary
shares are traded on the AIM market of the London Stock
Exchange.
These condensed consolidated interim financial statements for
the period ending 31 December 2019 (including comparatives for the
periods ended 31 December 2018 and 30 June 2019) were approved by
the board of directors on 20 March 2020.
The financial information set out in this interim report does
not constitute statutory accounts for the purposes of section 434
of the Companies Act (2006). The Group's statutory financial
statements for the year ended 30 June 2019, prepared under
International Financial Reporting Standards (IFRS), have been filed
with the Registrar of Companies. The auditor's report for those
financial statements was unqualified and did not contain a
statement under section 498 (2) or section 498 (3) of the Companies
Act (2006).
The interim financial statements have been prepared using the
accounting policies set out in the Group's 2019 statutory accounts
and have not been audited.
Copies of the annual statutory financial statements and the
interim report can be found on our website at www.aeorema.com or
can be requested from the Company Secretary at the Company's
registered office: 64 New Cavendish Street, London, W1G 8TB.
2. Basis of preparation
These condensed consolidated interim financial statements for
the period ended 31 December 2019 have been prepared in accordance
with IAS 34, 'Interim Financial Reporting' as adopted by the
European Union. The interim condensed consolidated financial
statements should be read in conjunction with the annual financial
statements for the year ended 30 June 2019, which have been
prepared in accordance with IFRS as adopted by the European
Union
3. Summary of significant accounting policies
The accounting policies adopted are consistent with those of the
annual financial statements for the year ended 30 June 2019, as
described in those annual financial statements, with the exception
of IFRS 16 Leasing which was effective from 1 July 2019. Aside from
IFRS 16 there has been no impact on the Group's financial position
or performance from new and amended IFRS and IFRIC interpretations
mandatory as of 1 July 2019.
AEOREMA COMMUNICATIONS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
For the period ended 31 December 2019
4. Revenue and segmental results
The Company uses several factors in identifying and analysing
reportable segments, including the basis of organisation such as
differences in products and geographical areas. The Board of
Directors, being the chief operating decision makers, has
determined that for the period ended 31 December 2019 there is only
one reportable operating segment.
5. Income tax charge
Income period tax is accrued based on the estimated average
annual effective income tax rate of 19 per cent. (2018: 19 per
cent).
6. Earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
Diluted earnings per share are calculated by dividing the profit
attributable to ordinary owners of the parent by the weighted
average number of ordinary shares outstanding during the year plus
the weighted average number of ordinary shares that would have been
issued on the conversion of all dilutive potential ordinary shares
into ordinary shares.
The following reflects the income and share data used and
dilutive earnings per share computations:
Unaudited Unaudited Audited
6 Months 6 Months Year to
to 31 December to 31 December 30 June
2019 2018 2019
Profit/(loss) for the year
attributable to owners of
the Company (57,021) (111,472) 295,557
Number of shares
Basic weighted average number
of shares 9,050,500 9,050,500 9,050,500
Effect of dilutive share
options 1,020,000 729,508 127,987
Diluted weighted average
number of shares 10,070,500 9,780,008 9,178,487
7. Dividends
During the interim period a dividend of 1 pence (2018: 0.75
pence) per share was declared to holders of the Company's ordinary
shares in respect of the full year ended 30 June 2019.
AEOREMA COMMUNICATIONS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
For the period ended 31 December 2019
8. Related party transactions
The Group has a related party relationship with its subsidiaries
and its directors. Transactions between Group companies, which are
related parties, have been eliminated on consolidation and are
therefore not included in these consolidated interim financial
statements.
Unaudited Unaudited
6 months 6 months
to 31 December to 31 December
2019 2018
GBP GBP
Subsidiaries
Amounts owed by/(to) subsidiaries 1,027,839 1,042,080
---------------- ----------------
Amounts owed by/(to) subsidiaries 1,027,839 1,042,080
Harris & Trotter LLP is a firm in which S Haffner is a
member. The following was charged to the Group in respect of
professional services.
Unaudited Unaudited
6 Months 6 Months
to 31 December to 31 December
2019 2018
Harris & Trotter LLP GBP GBP
Aeorema Communications plc 7,500 7,500
Aeorema Limited 11,750 7,950
---------------- ----------------
19,250 15,450
Fees charged to Aeorema Communications plc include GBP7,500
(2018: GBP7,500) for the services of S Haffner as a non-executive
director of that company.
The compensation of key management (including directors) of the
Group is as follows:
Unaudited Unaudited
6 Months 6 Months
to 31 December to 31 December
2019 2018
GBP GBP
Short-term employee benefits 110,667 105,000
Post-employment benefits 5,024 892
115,691 105,892
During the period A Harvey received an interest-free loan of
GBP10,000. At the 31 December 2019 GBP10,000 (2018: GBPNil) was
outstanding.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
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of this information may apply. For further information, please
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END
IR KKBBBKBKDBNB
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