TIDMINFO
INFOSCREEN NETWORKS PLC
FINAL RESULTS FOR THE YEAR ENDED 30 JUNE 2010
CHAIRMAN'S STATEMENT
On behalf of the Board of Directors of Infoscreen Networks PLC ("INP" or the
"Company"), I have pleasure in presenting the Annual Report and Audited
Financial Statements of the INP group of companies ("Group") and the Company
for the year ended 30 June 2010 ("FY2010").
Overview
FY2010 represents the Company's fifth full year of operations, and so far its
most challenging. INP's sole operating subsidiary, YTL Info Screen Sdn. Bhd.
("YTL Info Screen") in Malaysia, experienced a generally tougher operating
environment and the absence of revenue booked from some very large "one-off"
project related work booked in the previous year. The lower results were also
due to substantially lower finance income on the Group's Pounds Sterling fixed
deposits, which saw average interest rates earned decline from 2.01% in FY2009
to just 0.39% during the period.
Financial Performance
The Group's revenue decreased by 57% to GBP774,249 (FY2009: GBP1,803,404) in the
year to 30 June 2010, resulting in profit before income tax decreasing by 97%
to GBP33,319 (FY2009: GBP1,101,504). Profit for the year attributable to owners of
the parent and earnings per share were negligible (FY2009: GBP0.27p), due to a
high consolidated income tax charge at the INP Group level as a result of the
inability to offset costs related to its ongoing listing obligations (listing
fees, professional advisers' fees etc) at the INP company level against the
profit earned in Malaysia. The Group's cash balance at the end of the year rose
to GBP4.37 million (FY2009: GBP4.16 million), largely as a result of a stronger
Malaysian Ringgit ("RM"). Shareholders' Funds also grew by 7.6% to GBP5.15
million in FY2010 (FY2009: GBP4.78 million).
YTL Info Screen continues to be the main contributor to the Group's revenues.
In RM terms, YTL Info Screen posted a pre-tax profit in FY2010 of RM0.65
million (FY2009: RM6.73 million). YTL Info Screen's revenue decreased by 59.2%
in FY2010 due to the absence of RM6.4 million of non-recurring project income
in the previous year. However one positive aspect in these numbers is that if
adjusted for this non-recurring project income in FY2009, underlying revenues
rose 10% in FY2010, and underlying pre-tax profit at YTL Info Screen company
level rose by 95%.
Outlook and Strategy
Despite a double-digit bounce in traditional media advertising expenditure
("adex") in the first half calendar 2010 (boosted by the 2010 World Cup) in
Malaysia where the Group earns most of its revenues, digital media adex still
lags behind traditional media adex and represents a tiny percentage of total
Malaysian adex (approximately RM40 million in an industry exceeding RM6.2
billion - less than 1%).
In the UK, digital adex represents more than 10% of total advertising
expenditure now, having overtaken TV, and in China it is already 8%. The
potential for digital media to increase as a proportion of the total adex in
Malaysia therefore looks very promising over the next 5 years. However, there
are two factors that YTL Info Screen will need to address in order to
capitalise on this trend. Firstly, its media offerings have to be attractive to
the consistently biggest advertisers in the economy, being the FMCGs (food
retailers, supermarkets, mass market consumer brands etc) and the Telcos, by
being attractively priced and located, versus other media. Secondly, in a media
market dominated by a conservative and "safe" mass traditional media (print, TV
and radio), YTL Info Screen has to increase its scale and reach in order to
fully exploit and capture a bigger slice of this rising adex market.
YTL Info Screen is actively trying to address these challenges in the Malaysian
media market. Firstly it intends to extend its reach by expanding its network
and therefore its attractiveness to the large advertisers. It has already
identified a number of strategic locations and is close to securing the digital
media rights in these new locations, targeting to roll out digital screens at
these locations within the first half of the current year.
YTL Info Screen's media offerings are also too niche to capitalise fully on the
growth trends described above at present, being located in areas that have a
more affluent footfall that are more appealing to upscale advertisers, which
generally have much smaller advertising budgets. This makes it more vulnerable
during periods of economic uncertainty, as it is unable to target and attract
the more recession resilient FMCGs and Telcos. To address this
under-representation in its media portfolio, YTL Info Screen is working hard to
penetrate the supermarket and hypermarket segments, either directly, or through
marketing joint ventures with companies that have already secured the media
rights within these real estate assets, but lack the content management and
network operational expertise. Previously, due to the lack of a quality
broadband infrastructure within Malaysia, this has been difficult to achieve.
However, with the impending launch of Malaysia's first nationwide WiMAX
network, this will be considerably easier to manage and more economically
viable.
With net cash of GBP4.37 million at the year end, INP is also well positioned to
exploit any other acquisition based expansion opportunities that maybe
presented to it, and will continue to actively pursue investment opportunities
synergistic to its core knowledge competencies, where it can add value, and
which display an ability to enhance, integrate and add economies of scale to
the Group's existing businesses. However, the Group's experience to date
appraising acquisition opportunities has been unsuccessful, with all targets
failing on either our quality criteria or too high a valuation, and usually
both. As stated previously, the Board will not compromise on its tough
selection criteria, which are designed to mitigate the very high risks inherent
in the rapidly evolving business of digital media technology and content
development.
Appreciation
I would like to thank the Board of Directors, the senior management team and
staff for their hard work during the challenging times and for their ongoing
dedication, resourcefulness and commitment to the ideals of the Group. Our
achievements over the years are a direct result of the concerted efforts and
contribution of the entire team. I would also like to take this opportunity to
thank our customers, business partners, our professional advisers, and our
shareholders for their continuing support.
A S Chhina
Chairman and Chief Executive Officer
18 October 2010
Enquiries:
Infoscreen Networks plc 00 603 23302700
Amarjit Chhina, Chief Executive Officer
Cairn Financial Advisers LLP 020 7148 7900
James Caithie
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2010
Year ended Year ended
30 June 2010 30 June 2009
Note GBP GBP
Continuing operations
Revenue 774,249 1,803,404
Cost of sales (369,616) (324,672)
------- -------
Gross profit 404,633 1,478,732
Administrative expenses (408,196) (466,216)
------- -------
Operating (loss)/profit (3,563) 1,012,516
Finance income 36,882 88,988
------- -------
Profit before income tax 33,319 1,101,504
Income tax expense (32,084) (285,164)
------- -------
Profit for the year 1,235 816,340
_______ _______
Other comprehensive income:
Currency translation differences 362,080 66,372
------- -------
Other comprehensive income for 362,080 66,372
the year, net of tax
------- -------
Total comprehensive income for 363,315 882,712
the year
------- -------
Profit for the year attributable 1,235 816,340
to owners
of the parent
------- -------
Total comprehensive income for 363,315 882,712
the year
attributable to owners of the
parent
------- -------
Earnings per share (basic & 1 0.00041p 0.27211p
diluted)
------- -------
CONSOLIDATED AND COMPANY STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2010
Group Company
2010 2009 2010 2009
GBP GBP GBP GBP
ASSETS
Non-current assets
Property, plant and equipment 40,040 22,631 - -
Intangible assets 1,628 1,816 - -
Investment in a subsidiary - - 57,181 57,181
Deferred income tax assets 6,672 2,889 - -
------- ------- ------- -------
48,340 27,336 57,181 57,181
------- ------- ------- -------
Current assets
Trade and other receivables 873,720 1,032,588 7,578 11,449
Current income tax assets 55,972 - - -
Cash and cash equivalents 4,370,857 4,159,400 2,976,842 3,090,085
------- ------- ------- -------
5,300,549 5,191,988 2,984,420 3,101,534
------- ------- ------- -------
Total assets 5,348,889 5,219,324 3,041,601 3,158,715
------- ------- ------- -------
EQUITY AND LIABILITIES
Equity attributable to owners of
the parent
Share capital 3,000,000 3,000,000 3,000,000 3,000,000
Other reserves 463,942 101,862 - -
Retained earnings 1,681,396 1,680,161 (72,766) 16,060
------- ------- ------- -------
Total equity 5,145,338 4,782,023 2,927,234 3,016,060
------- ------- ------- -------
LIABILITIES
Current liabilities
Trade and other payables 203,551 260,029 114,367 142,655
Current income tax liabilities - 177,272 - -
------- ------- ------- -------
Total liabilities 203,551 437,301 114,367 142,655
------- ------- ------- -------
Total equity and liabilities 5,348,889 5,219,324 3,041,601 3,158,715
------- ------- ------- -------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2010
Attributable to owners of the parent
Non- Distributable
distributable
Share Capital Translation Retained Total
Reserve Reserve Earnings
Capital Equity
GBP GBP GBP
GBP GBP
Balance as at 1 July 3,000,000 1,484 34,006 863,821 3,899,311
2008
Comprehensive income
Profit for the year - - - 816,340 816,340
Other comprehensive
income
Currency translation - - 66,372 - 66,372
differences
Total comprehensive - - 66,372 816,340 882,712
income for the year
Balance as at 30 June 3,000,000 1,484 100,378 1,680,161 4,782,023
2009
Balance as at 1 July 3,000,000 1,484 100,378 1,680,161 4,782,023
2009
Comprehensive income
Profit for the year - - - 1,235 1,235
Other comprehensive
income
Currency translation - - 362,080 - 362,080
differences
Total comprehensive - - 362,080 1,235 363,315
income for the year
Balance as at 30 June 3,000,000 1,484 462,458 1,681,396 5,145,338
2010
Notes:
Share capital
The amount subscribed for shares at nominal value.
Capital reserve
The capital reserve comprises the equity portion of ordinary shares issued.
Translation reserve
The effect of changes in exchange rates arising from translating the financial
statements of subsidiary undertakings into the Company's reporting currency.
Retained earnings
Cumulative realised profits less losses and distributions attributable to
owners of the parent.
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2010
Non- Distributable
distributable
Share Retained Total
Earnings
Capital Equity
GBP
GBP GBP
Balance as at 1 July 2008 3,000,000 101,449 3,101,449
Comprehensive income
Loss for the year - (85,389) (85,389)
Total comprehensive income - (85,389) (85,389)
for the year
Balance as at 30 June 2009 3,000,000 16,060 3,016,060
Balance as at 1 July 2009 3,000,000 16,060 3,016,060
Comprehensive income
Loss for the year - (88,826) (88,826)
Total comprehensive income - (88,826) (88,826)
for the year
Balance as at 30 June 2010 3,000,000 (72,766) 2,927,234
Notes:
Share capital
The amount subscribed for shares at nominal value.
Retained earnings
Cumulative realised profits less losses and distributions attributable to
owners of the parent.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2010
Year ended Year ended
30 June 2010 30 June 2009
GBP GBP GBP GBP
Cash flows from operating
activities
Cash generated from operations 264,315 386,358
Income tax paid (280,209) (280,092)
Interest received 36,117 87,941
------- -------
Net cash generated from operating 20,223 194,207
activities
Cash flows from investing activiti
es
Purchases of property, plant and (26,614) (10,343)
equipment
Purchases of intangible assets (83) (2,040)
Proceeds from disposal of 566 665
property, plant and equipment
------- -------
Net cash used in investing (26,131) (11,718)
activities
------- -------
Net (decrease)/increase in cash (5,908) 182,489
and cash equivalents
Cash and cash equivalents at 4,159,400 3,897,122
beginning of year
Exchange gains on cash and cash 217,365 79,789
equivalents
------- -------
Cash and cash equivalents at end 4,370,857 4,159,400
of year
------- -------
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2010
Year ended Year ended
30 June 2010 30 June 2009
GBP GBP
Cash flows from operating
activities
Cash absorbed by operations (122,894) (80,702)
Income tax paid - (15,311)
Interest received 9,651 66,596
------- -------
Net cash used in operating (113,243) (29,417)
activities
------- -------
Net decrease in cash and cash (113,243) (29,417)
equivalents
Cash and cash equivalents at 3,090,085 3,119,502
beginning of year
------- -------
Cash and cash equivalents at end of 2,976,842 3,090,085
year
------- -------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2010
1 Earnings per share
Basic earnings per ordinary share are calculated by dividing the profit for the
year attributable to owners of the parent by the weighted average number of
ordinary shares in issue during the year. The weighted average number of
ordinary shares in issue was 300,000,000 (2009: 300,000,000) and the profit for
the year was GBP1,235 (2009: GBP816,340).
The basic and diluted earnings per ordinary shares are the same as the Group
does not have any convertible securities.
2 Report and Accounts
Copies of the Report and Accounts for the year ended 30 June 2010 are being
sent to shareholders in due course and its provision will be announced. Further
copies will be available on the Company's website www.infoscreennetworks.com
and at its registered office at: Staple Court, 11 Staple Inn Buildings, London
WC1V 7QH.
END
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