Interim Results
March 31 2008 - 4:26AM
UK Regulatory
RNS Number:1252R
Net b2b2 PLC
31 March 2008
31 March 2008
Netb2b2 plc
Interim results for the six months ended 31 December 2007
Netb2b2 plc ("Netb2b2" or "the Group"), the digital communications business,
today announces its unaudited interim results for the six months ended
31 December 2007.
Financial and business highlights:
* Turnover increased by 5% to �3.36m (2006: �3.2m)
* Group operating loss of �198,000 (2006: loss of �168,000)
* Group loss after tax of �211,000 (2006: loss of �186,000)
* Loss per share of 3.40p (2006: loss of 3.07p)
* Major new clients and substantial ongoing work secured with the Army,
Computacentre, CIPD, NHS Confederation, LSE, Royal College of Physicians,
Reed Publishing, Future Publishing and CMPi
Andrew Gannon, Group Chief Executive of Netb2b2, commented:
"After a period of challenging times in 2007 we have started this calendar year
satisfactorily across all of our subsidiaries. The processes and structures we
have put into place have strengthened the Company considerably and we are better
placed to confront the challenges ahead.
"Our focus on the media and entertainment markets is beginning to pay dividends
and we are also seeing very good traction in the Microsoft SharePoint space,
MOSS. The Group has entered an exciting phase in its growth within the digital
media arena and we have successfully embraced the commercial opportunities
available to us by driving the top line through investment in technology and
marketing. We believe we have the right products and services to drive our
growth in the digital media arena and we now have a strong platform on which to
build.
"Elsewhere, as part of refining our focus, we have rationalised our operations
by closing the NetPen and Gambling systems. Our UK partnership with VMware has
allowed us to embark on the use of exciting new technologies within the hosting
space and we are delighted by the progress made.
"The Group has sustained its focus on good cost control and has focused efforts
on its core strengths identified in the internal review. The structural
improvements made by the Group last year are beginning to pay dividends and we
expect this to continue as we look forward to executing further on our refined
strategy in 2008 and beyond."
Enquiries, please contact:
Andrew Gannon
Netb2b2 PLC
020 7689 8800
Azhic Basirov / Siobhan Sergeant
Smith & Williamson
020 7131 4000
Duncan McCormick /John West
Tavistock Communications
0207 920 3150
Chief Executive's Review
I am pleased to report that in the six months to 31 December 2007 we have begun
to execute clearly on a refined strategy and we have started this calendar year
satisfactorily across all of our subsidiaries after a challenging 2007.
Our focus in the media and entertainment markets is beginning to pay dividends
and from a technology aspect we are seeing great traction in the Microsoft
SharePoint space, MOSS. The Group has further rationalized its operations by
closing its NetPen and gambling systems businesses.
Financial and operational review
In the period under review, turnover increased by some 5% although profitability
continued to be depressed. The �500,000 placing of shares with Keith Young that
has now been completed has significantly strengthened our Group balance sheet.
cScape, our largest group company, has won new contracts with the Army and
Computacentre whilst delivering on its substantial ongoing business with CIPD,
Barclays and Royal College of Physicians. The Client Engagement Unit has been a
great success by helping our clients to utilize the Internet so they can develop
it as an intrinsic tool in their relationships with their own clients.
Blue Sky continues to progress its partnership with VMware as reported in
December. Blue Sky has been accepted into the VMware Virtual Infrastructure
Partner program (VIP) in preparation for its forthcoming launch of virtualized
high availability enterprise hosting solutions in 2007. Blue Sky continues to
leverage its position as one of the first hosting providers in the RIM Alliance
Partner network and has grown its Hosted BlackBerry Managed Services portfolio
to attract both Lotus Domino and Microsoft Exchange corporate mail users.
At Fernhart our focus is on Content Management Server, Interactive TV and Rich
Internet Applications. As mentioned in December, Fernhart is now an approved
supplier to Microsoft Consulting Services and our progress with Microsoft
continues apace with recent implementations of Silverlight at the LSE and ITN.
Silverlight is Microsoft's latest presentation toolset to create Rich Internet
Applications with attractive visual interfaces. The recent performance of the
business, with contract wins including the NHS Confederation, continues to
justify our confidence in the long-term prospects of this business.
ITM is our publishing services subsidiary, offering outsourced publisher support
and publishing consulting down to print farming. Here we have won substantial
new business with Reed Publishing, Future Publishing and CMPi.
Outlook
After a period of challenging times in 2007 we have started this calendar year
satisfactorily across all of the subsidiaries and we look forward to executing
on our refined strategy in 2008 and beyond. The processes and structures we have
put into place have strengthened the Company considerably and we are better
placed to confront the challenges ahead.
Our focus on the media and entertainment markets is beginning to pay dividends
and we are also seeing very good traction in the Microsoft SharePoint space,
MOSS.
The Group has entered a new phase in its growth within the digital media arena
and we have successfully embraced the commercial opportunities available to us
by driving the top line through investment in technology and marketing. We
believe we have the right products and services to drive our growth in the
digital media arena and we have a strong platform on which to build.
Elsewhere, as part of refining our focus, we have rationalised our operations by
closing the NetPen and Gambling systems. Our UK partnership with VMware has
allowed us to embark on the use of exciting new technologies within the hosting
space and we are delighted by the progress made.
Following the appointment of our new marketing Director Karen Johnson we have
embarked on a number of strategic initiatives to align our businesses
propositions and revamp our online presences initially at the operating company
level with re-branding exercises for Fernhart New Media and Blue Sky Hosting and
it is our intention to complete this exercise for Netb2b2 plc in the coming
period. These changes are being supported by a number of outbound marketing
programmes to support our encouraging sales order book.
The Group has sustained its focus on good cost control and has focused efforts
on its core strengths identified in the internal review. The structural
improvements made by the Group last year are beginning to pay dividends and we
expect this to continue throughout 2008.
ANDREW GANNON
Group Chief Executive
31 March 2008
GROUP PROFIT AND LOSS ACCOUNT
Six months ended 31 December 2007
Six Months Six Months Year
Ended Ended Ended
31.12.2007 31.12.2006 30.06.2007
Unaudited Unaudited Audited
Note �000's �000's �000's
TURNOVER 3 3,356 3,194 6,657
Cost of sales (1,018) (870) (1,885)
------- ------ -------
GROSS PROFIT 2,337 2,324 4,772
------- ------- -------
Administrative expenses pre (2,498) (2,492) (5,167)
exceptional item
Exceptional Item (37) - (160)
------- ------- -------
Administrative expenses (2,535) (2,492) (5,347)
------- ------- -------
OPERATING LOSS 3 (198) (168) (575)
------- ------- -------
Interest receivable and similar - 1 -
income
Interest payable and similar charges (13) (19) (52)
------- ------- -------
LOSS ON ORDINARY ACTIVITIES BEFORE
TAXATION (211) (186) (396)
Tax on loss on ordinary activities 5 - - -
------- ------- -------
LOSS FOR THE FINANCIAL PERIOD (211) (186) (396)
======= ======= =======
LOSS PER SHARE (PENCE)
Ongoing activities 6 (3.40p) (3.07p) (6.53p)
======= ======= =======
GROUP BALANCE SHEET
31 December 2007
31.12.2007 31.12.2006 30.06.07
Unaudited Unaudited Audited
�000's �000's �000's
FIXED ASSETS
Intangible assets 2,278 2,436 2,278
Tangible assets 524 563 532
----- ----- -----
2,802 2,999 2,810
CURRENT ASSETS
Stocks 75 175 75
Debtors 1,272 1,439 1,483
Cash at bank 488 270 272
----- ----- -----
1,835 1,884 1,830
CREDITORS: amounts falling due
within one year
Bank loans and overdraft (495) (169) (206)
Trade and other creditors (2,375) (2,664) (2,638)
------- ------- -------
(2,870) (2,833) (2,844)
NET CURRENT LIABILITIES (1,035) (949) (1,014)
------- ------- -------
CREDITORS: amounts falling due
after one year - (84) (41)
------- ------- -------
TOTAL ASSETS LESS LIABILITIES 1,767 1,966 1,755
======= ======= =======
CAPITAL AND RESERVES
Called up share capital 856 606 606
Share premium 526 553 553
Capital redemption reserve 6 6 6
Profit and loss account 379 801 590
------- ------- -------
EQUITY SHAREHOLDERS' FUNDS 1,767 1,966 1,755
======= ======= =======
GROUP CASH FLOW STATEMENT
Six months ended 31 December 2007
Six Months Six Months Year
Ended Ended Ended
31.12.2007 31.12.2006 30.06.2007
Note Unaudited Unaudited Audited
�000's �000's �000's
Net cash inflow/(outflow) from 7 25 196 465
operating activities
Returns on investments and servicing 8 (13) (18) (52)
of finance
Taxation - - -
Capital expenditure 8 (80) (72) (162)
Acquisitions 8 - - -
----- ----- -----
Net cash inflow/(outflow) before (68) 106 251
financing
Financing 8 308 15 (165)
------ ----- -----
Increase in cash in the period 240 121 86
====== ===== =====
Reconciliation of net cash flow to
movement in net funds
Increase in cash in the period 9 240 121 86
Increase in debt and lease financing 9 (85) (19) 165
------ ------ -----
Movement in net funds in the period 9 155 102 251
Net debt at start of period 9 (278) (529) (529)
------ ------ ------
Net debt at end of period 9 (123) (427) (278)
====== ====== ======
NOTES TO THE ACCOUNTS
Six months ended 31 December 2007
1. FINANCIAL INFORMATION
The financial information is for the six months ended 31 December 2007 and is
neither audited nor reviewed as defined by APB Bulletin 1999/4. The balance
sheet and profit and loss account do not constitute statutory statements within
the meaning of section 240 Companies Act 1985. The results for the year ended 30
June 2007 have been extracted from the financial statements of the group on
which an unqualified report from the auditors has been received and which have
been filed with the registrar of Companies.
2. BASIS OF PREPERATION
The interim financial information has been prepared on the basis of the
accounting policies adopted for the audited accounts for the year ended 30 June
2007 under the historical cost convention and in accordance with applicable
accounting standards.
3. SEGMENTAL INFORMATION
The Group operates in the UK and the whole of its turnover and profit relate to
continuing activities and to the UK market.
Six months Six months Year
Ended Ended Ended
31.12.2007 31.12.2006 30.06.2007
Unaudited Unaudited Audited
�000's �000's �000's
Turnover
Internet services 1,898 1,619 3,525
Publishing and Digital Communication 747 843 1,632
Services
Specialist Hosting 438 403 770
Media and interactive technology 273 329 730
------ ----- -----
Group 3,356 3,194 6,657
Profit/(loss) before interest and tax
Internet services 95 34 80
Publishing and Digital Communication 13 (4) 20
Services
Specialist Hosting 79 86 198
Media and interactive technology (39) 10 (30)
Central and other costs (309) (294) (683)
Exceptional costs (37) - (160)
------- ----- ------
Group (198) (168) (575)
------- ----- ------
4. GOODWILL
The board has assessed each subsidiary with reference to its durability, ability
to sustain future long term profitability and assessed ability to maintain
market position. Based on this assessment the board is of the opinion that the
three goodwill elements have indefinite economic lives. The board has carried
out impairment reviews on these goodwill elements and have concluded that their
current recoverable amounts are in excess of their carrying values.
5. TAXATION
No liability to UK Corporation tax arose on ordinary activities for the period
owing to trade losses brought forward from previous periods.
6. LOSS PER ORDINARY SHARE
Basic loss per share is calculated by dividing the loss attributable to ordinary
shareholders by the weighted average number of ordinary shares during the year.
The diluted loss per share is the same as the actual loss per share.
Six Months Six Months Year
Ended Ended Ended
31.12.2007 31.12.2006 30.06.2007
Unaudited Unaudited Audited
�000's �000's �000's
Basic earnings attributable to ordinary (211) (186) (396)
shareholders: ========== ========= =========
Weighted average number of ordinary 6,197,439 6,061,569 6,061,569
shares ========== ========= =========
Loss per share: (3.40p) (3.07p) (6.53p)
========== ========= =========
7. RECONCILIATION OF OPERATING PROFIT/(LOSS) TO NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
Six Months Six Months Year
Ended Ended Ended
31.12.2007 31.12.2006 30.06.2007
Unaudited Unaudited Audited
�000's �000's �000's
Operating loss (198) (168) (575)
Exceptional item - - 160
Depreciation charges 88 86 170
Loss on disposal/write off of intangible fixed - - 29
assets
(Increase)/decrease in stocks - (33) 66
Decrease/(increase) in debtors 214 (41) (85)
Increase/(decrease) in creditors (79) 352 700
----- ----- -----
Net cash inflow/ (outflow) from operating 25 196 465
activities ===== ===== =====
8. ANALYSIS OF CASH FLOWS
Six Months Six Months Year
Ended Ended Ended
31.12.2007 31.12.2006 30.06.2007
Unaudited Unaudited Audited
�000's �000's �000's
Returns on investments and servicing of finance
Interest received - 1 -
Interest paid (8) (12) (20)
Interest element of hire purchase payments (5) (7) (32)
---- ----- -----
Net cash outflow for returns on investments and
servicing of finance (13) (18) (52)
==== ===== =====
Capital expenditure
Sale of tangible fixed assets - - -
Purchase of tangible fixed assets (80) (72) (162)
---- ----- -----
Net cash outflow for capital expenditure (80) (72) (162)
==== ===== =====
Acquisitions
Purchase of subsidiary undertaking - - -
---- ----- -----
Net cash outflow for acquisitions - - -
==== ===== =====
Financing
Issue of ordinary share capital 250 - -
Share Premium (27) - -
Increase in bank loans 120 43 33
Bank loans repaid - (176)
Increase in hire purchase - 102
Capital element of hire purchase payments (35) (28) (124)
---- ---- -----
Net cash inflow/ (outflow) from financing 308 15 (165)
==== ==== =====
9. ANALYSIS OF CHANGES IN NET (DEBT)/ FUNDS
At 31
December
At 1 July 2007 Cash flow 2007
Net cash: �000's �000's �000's
Cash at bank and in hand 272 216 488
Bank overdrafts (206) 24 (182)
------ ---- -----
66 240 306
------ ---- -----
Debt:
Bank Loan (invoice discounting) (193) (120) (313)
Hire purchase agreements (151) 35 (116)
------ ----- ------
Total (278) 155 (123)
====== ===== ======
10. COPIES OF THE INTERIM REPORT
Copies of the interim report are available from www.netb2b2.com or the company
secretary at Netb2b2 Plc, Central House, 142 Central Street, London, EC1V 8AR.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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