7DIG.L Regulatory News (7DIG)

20 June 2013

UBC Media Group plc

("UBC" or "the Company")

Final Results for the year ended 31 March 2013

UBC Media Group (AIM: UBC), the multimedia content and services company, today announces its audited results for the year ended 31 March 2013.

Operational highlights

§ Revenues from video and new media content up more than fivefold

o Video and new media content now 22% of content revenue

o New deal for online video announced today with Rightster

§ Revenues from mobile software and apps up 24%

o 1.2 million UBC built apps now downloaded

o Android suite of apps launched today for Astral Media in Canada

§ First licensing deals for Radioplayer signed in Norway

o Letters of intent with 8 further territories

§ Associate company Audioboo showing strong growth in users:

o Registered users more than doubled in 6 months to 1.4 million

o 10 million listens to audio on the platform in May

o Major new content partners, ESPN, Yea Networks, Daily Telegraph and Guardian

o Pre-roll advertising and micro-payment technology implemented

Financial highlights

§ Turnover up 16.6% to £3.76m (2012: £3.23m)

§ Operating losses marginally reduced to £578,000 (2012: £591,000)

§ Statutory loss reduced from £3.62m to £1.08m

§ Reported earnings per share, including the loss from discontinued operations, was a loss of 0.56 pence per share (2012: loss of 2.02 pence), loss from continuing operations was a loss of 0.46 pence per share (2012: loss of 1.23 pence)

§ Cash balance at year end £2.57m and at 19 June £3.06m

Simon Cole, Chief Executive, said: "The nature of our business and the make-up of our revenues has changed this year in line with our strategy. We have raised turnover, reduced losses and conserved our cash position. There is still a lot to do and our transition is in increments rather than the step change that we require. Balancing risk against opportunity is the key challenge and, in a difficult media environment, we continue to be cautious. "

Enquiries:

Chief Executive's Review

Overview and strategic direction

UBC continues to conserve, as far as possible, its cash and move the existing businesses in the identified strategic direction whilst looking for the opportunity to use our balance sheet for a step change.

Having recognised the importance of technology and content designed for the 'connected' world to the future of our business, we have deepened our relationship with Imagination Technologies Group plc ("Imagination") which has become a 13.7% shareholder, over the course of the year. We are now working with Imagination actively in a number of areas, which we expect to create both revenue and strategic opportunities for us in the medium term.

Revenues from delivery of new media and, in particular, video content have risen sharply: our supply deal with Yahoo! Europe is now delivering regular revenues and we are announcing today a deal to supply online video to a selection of YouTube premium channels through Rightster who will share advertising revenues with UBC and have paid an advance against these revenues to secure our content.

Our reliance on our heritage content revenue streams, notably the BBC, is reducing. The BBC now represents 52% of our content revenues, down from 64% of continuing business the previous year.

Meanwhile, our involvement in the technology behind the platforms driving the change in consumption of content continues, with revenues from mobile software development growing by 24% and the start of income from our contract announced last year to represent the UK Radioplayer technology globally.

Divisional reports

Content

The content marketplace is moving rapidly in the direction that we have identified and have evolved our strategy. Increasingly multimedia content is now available on a variety of platforms and the importance of live, linear broadcasting is diminishing.

Whilst our heritage revenues from the BBC and UK commercial radio continue to provide a solid foundation to the content businesses, we are successfully using this as a base from which to develop into new areas of revenue generation. A good example of this is our Entertainment News service, developed originally to service the 160 commercial radio stations who still take interviews, stories and bulletins from us every day in exchange for advertising inventory which is sold by our partners at GTN. This same service is now provided in video to Yahoo! in a deal announced earlier this year, with UBC and Yahoo! sharing advertising revenues. In addition, we are announcing today a deal with online video distribution company Rightster who are creating premium YouTube channels and placing our content on other web based platforms. We will share advertising revenues with Rightster and have been paid an advance. The same content now has multiple revenue streams attached to it and we see this as the strategy for the future. In this period, we also negotiated a ground-breaking deal with the BBC which saw one of our radio programmes - The People's Songs on BBC Radio 2 - made available for sale after transmission via the BBC's website. The sale of premium audio content will, we believe, become an important revenue source in the future and we are now preparing our major radio comedy strands for the BBC to be made available online.

Taken individually, none of these revenue streams represent significant income at the moment. However, the revenues have no incremental cost attached and we expect them to grow over time.

In this period, our revenues from Sky Arts television more than tripled to over £600,000, as we produced 15 hours of live music television for them from the Cambridge Folk Festival. Whilst the relationship between revenue and margin is highly dependent on the type of project undertaken and we do not expect it to continue to increase at this level, we are in discussion with Sky Arts about a number of projects for this year and next. We continue to retain the right to exploit our live music, in video and audio and now own a reasonably substantial library of recordings. We are beginning to monetise these recordings both through iTunes and through a new dedicated portal, Delphonic, (www.delphonicmusic.com) which we have created to provide a focus for the online purchase of folk and acoustic music. Currently we have nearly 300 exclusive tracks cleared for sale and have a further library of 9,000 tracks, which we are gradually adding to Delphonic.

Interactive

A year ago, we identified the importance to our business of 'connected services'. Our involvement in this area embraces both the Interactive division of UBC, our strategic investment in Audioboo, a fast growing audio social network, and our relationship with Imagination who, during the year have become a significant (13.7%) shareholder in UBC.

We are very pleased to have made important strategic steps in all of these areas during the year.

Whilst revenues in Interactive have been flat, the composition of the revenue shows a move towards large, strategically important international clients and an increase in revenues from mobile software and services - a growth area for the future. Working jointly with Imagination, we have been working to globally license the technology behind the UK Radioplayer - which delivers a rich listening experience on web browsers and mobiles. Many of the key software components behind Radioplayer were developed by UBC and are attractive to broadcasters around the world who are seeing a rapid migration of listening from traditional broadcast platforms to Internet streaming models. The Radioplayer software delivers both live and 'listen again' content in a fully searchable environment, which can be controlled by the stations, including the placement of geo-located advertising. The recent announcement of the launch of Apple's iRadio service shows how global brands, delivered online and giving stations and consumers the ability to customise services, are emerging in the industry. In this environment we believe that software tools enabling the manipulation of live audio streams and controlling the delivery of advertising will be important.

The delivery of online services via mobile is also increasing rapidly. In the latest survey of UK listening (RAJAR Quarter 1, 2013) more than 20% of adults claimed to listen to radio on a mobile device. Our revenues from mobile have risen by 24% to £141,000 (2012: £114,000), a combination both of revenues from Radioplayer, licensing of our mobile apps in Canada, where today we are releasing 9 apps on Android for Astral Media, and sales from our mobile music game, Name This, which we released first in the UK in November 2011.

The make-up of our Interactive revenues has also changed to focus on major international clients with whom we can develop longer-term relationships. 82% of revenues in the division now come from major national and international broadcasters like Sirius XM in the US, Astral in Canada, SBS in Sweden and the BBC.

This year, we increased our shareholding in Audioboo, which allows the creation and distribution of audio on social networks, to 36.5% via a share swap with Imagination and a fundraise, making Audioboo an associate company. Rapid growth in the company has followed and we see Audioboo as another important tool in the developing market for online content.

Whether it is a community group in a small Australian settlement creating local news or one of America's leading national breakfast show presenters distributing his Hollywood interviews, Audioboo is becoming an important part of the daily consumption on the Internet of millions of hours of content. At the half year, Audioboo had 600,000 registered users and boasted 4 million listens a month to audio on the platform. By May this year, those numbers had more than doubled to 1.4 million users and 10 million listens each month. Major content partners like the BBC, ESPN, the Sundance Film Festival, and The Guardian and Daily Telegraph newspapers now use Audioboo daily to distribute their content and thousands of smaller content creators, right down to individual audio bloggers join them. More than 100 pieces of content are uploaded every hour to the platform and recently half a million listens on a single day were achieved.

To begin to monetise this rapidly increasing traffic, Audioboo has now implemented an audio advertising model, powered by technology from Adswizz and will launch a micro-payment system this month with the release of over 200 audio books from AudioGo.

The rapid growth at Audioboo, the changes in the make-up of our Interactive and Content revenues and the international partnership to license Radioplayer with Imagination all show how we are changing the business. Some of these changes increase risk; however, they also expose us to the growth opportunities in a rapidly changing industry.

Simon Cole

Chief Executive

19 June 2013

Finance Director's Review

In the year to 31 March 2013 Group revenues from continuing operations increased by 16.6% to £3.76m (2012: £3.23m), driven by our work on the Cambridge Folk Festival for Sky Arts. The Content division reported revenues up by 18.8% to £3.07m (2012: £2.59m) and the Software and Interactive division revenues were flat at £0.64m (2012: £0.64m). Gross profit decreased by 1.7% to £0.52m (2012: £0.53m), as the BBC continues to squeeze margins within the industry, and administrative expenses decreased by 2.0% to £1.10m (2012: £1.12m) mainly due to falling levels of depreciation.

Pre-exceptional results

Pre-exceptional EBITDA (which excludes return on investments, taxation, share of the results of associates, depreciation of tangible assets, amortisation of intangible assets and exceptional items) was a £503,000 loss (2012: loss £472,000). The pre-exceptional operating loss decreased by 2.2% to £578,000 (2012: loss £591,000). After the share of the result of associate loss of £401,000 (2012: £nil) and interest income of £42,000 (2012: £13,000), the Group's pre exceptional loss from continuing operations before tax was £937,000 (2012: loss £578,000). After a tax credit of £47,000 (2012: £nil), the Group's pre-exceptional loss for the period was £890,000 (2012: loss: £578,000).

Exceptional items

There were no exceptional items in the year to 31 March 2013. In the year to 31 March 2012, following the annual impairment review, management impaired the goodwill and intangibles relating to both our commissioned content and ad funded CGUs. This impairment was offset by the release of the related deferred tax liabilities.

Discontinued operations

On 9 September 2012 the Group disposed of its interest in Lynx Content, the ad funded CGU of the business, and the results of this business have therefore been reclassified as discontinued operations. The loss on disposal for the business was £48,000. Prior to the sale the result of the business was a loss of £144,000 (2012: loss of £1,415,000).

Statutory result

A reconciliation of the statutory loss for the period of £1.08m (2012: loss £3.62m) to the pre-exceptional operating profit and pre-exceptional EBITDA is shown below:

Reported earnings per share, including the profit from discontinued operations, was a loss of 0.56 pence per share (2012: loss of 2.02 pence).

Cash and cash flow

In the year to 31 March 2013 the Group had a cash outflow of £928,000 (2012: £785,000 outflow) including a cash outflow of £612,000 from operating activities (2012: £321,000 outflow). £258,000 was spent on investing activities (2012: £57,000). £139,000 was distributed as a dividend (2012: £407,000), £60,000 was spent on purchasing ordinary shares held in Treasury (2012: £nil), and the Group received £141,000 from the sale of shares (2012: £nil). At 31 March 2013, the Group had cash in the bank of £2.57m (2012: £3.49m).

Dividend

During the year the Group paid the final 2012 dividend of 0.07 pence per share (total dividend £139,000). The Group did not pay an interim dividend. The Board of Directors is not proposing a final dividend in the current year in order that the Group's cash may be conserved for corporate activity.

Chris Dent

Finance Director

19 June 201

Other Shareholder Information

Preliminary Announcement

·; Copies of this document are available from the Company's registered office at 50, Lisson Street, London, NW1 5DF.

·; The preliminary results will be available on the UBC Media Group plc website from 20 June 2013: http://www.ubcmedia.com/ubcmediagroup/financial-information/

Annual General Meeting

·; The Company's Annual General Meeting will be held at 10:00am on Friday 2nd August 2013 at the offices of DAC Beachcroft, 100 Fetter Lane, London, EC4A 1BN.

·; The notice of the AGM will be available from 24th June 2013 on the Company's website: http://www.ubcmedia.com/ubcmediagroup/financial-information/. Hard copy documents will be posted to shareholders on 2nd July 2013 and will also be available from our registered office 50, Lisson Street, London, NW1 5DF, from that date.

2013 Annual Reports and Accounts

·; Copies of the 2013 Annual Reports and Accounts will be available from 24th June 2013 on the Company's website: http://www.ubcmedia.com/ubcmediagroup/financial-information/. Hard copy documents will be posted to shareholders on 2nd July 2013 and will also be available from our registered office 50, Lisson Street, London, NW1 5DF, from that date.

UBC Media Group plc

Consolidated Statement of Comprehensive Income

31 March 2013

UBC Media Group plc

Consolidated Statement of Financial Position

Year ended 31 March 2013

UBC Media Group plc

Consolidated Cash Flow Statement

Year ended 31 March 2013

UBC Media Group plc

Consolidated Statement of Changes in Equity

Year ended 31 March 2013

UBC Media Group plc

Notes to the financial statements

Year ended 31 March 2013

1. Accounting policies

The financial information set out above does not constitute the Company's statutory accounts for the years ended 31 March 2013 or 2012, but is derived from those accounts. Statutory accounts for 2012 have been delivered to the Registrar of Companies and those for 2013 will be delivered following the Company's Annual General Meeting. The auditors have reported on those accounts; their reports were unqualified, did not draw attention to any matters by way of emphasis without qualifying their report and did not contain statements under s498(2) or (3) Companies Act 2006.

While the financial information included in this preliminary announcement has been prepared in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRSs), this announcement does not itself contain sufficient information to comply with IFRSs. The Company will publish full financial statements that comply with IFRSs in June 2013.

Principal risks and uncertainties

The Group's principal risk is the continued reliance on the BBC at a time when the BBC is coming under increasing pressure to cut budgets. Therefore this means that there is a continued margin pressure on work from the BBC. This is exacerbated by the risk that the Group will lose key programming contracts with the BBC, but this is mitigated by the fact that the majority of contracts by value are long-term and the BBC has committed to increase the percentage of its output that is commissioned from the independent radio production sector. The Group is also seeking to increase its revenues from programming commissions from parties other than the BBC.

There are uncertainties surrounding the ultimate size of the markets for the Group's digital software products. However, the Group believes there is commercial potential for these products and continues to invest in both product and market development.

The Group has made investments in Audioboo, a start-up audio social network. Audioboo is currently in a pre-revenue stage, and therefore requires regular funding from its investors. Although the operational results of the business are impressive, there is a risk that the Group will not be able to recoup the investment in Audioboo if the business is not able to achieve profitability in the medium term.

The other main risk to the Group is the retention of people, especially key executives. Retention of the key executives of the Group is recognised as a risk and is managed by the incentive and remuneration arrangements.

Going concern

The Board is satisfied that the Group balance sheet remains strong. We remain well-financed with considerable cash reserves and no foreseeable requirement for further finance. The financial statements at 31 March 2013 show that the Group realised an operating loss for the period of £578,000 (2012: £591,000), and with cash used in operating activities of £612,000 (2012: £321,000) and a net decrease in cash and cash equivalents of £928,000 in the year (2012: £785,000). The Group balance sheet showed cash reserves at 31 March 2013 of £2,566,000 (2012: £3,494,000), which exceeds the value of total liabilities.

The Board has concluded that no matters have come to its attention which suggests that the Group will not be able to maintain its current terms of trade with customers and suppliers. The Group's forecasts, including due consideration of the continued operating losses of the group, and projections, taking account of reasonably possible changes in trading performance, indicate that the Group has sufficient cash available to continue in operational existence throughout the forecast period and beyond. The Board has considered various alternative operating strategies should these be necessary and are satisfied that revised operating strategies could be adopted if and when necessary. As a consequence, the Board believes that the Group is well placed to manage its business risks, and longer term strategic objectives, successfully despite the current uncertain economic outlook.

Accordingly, having made the requisite enquiries, the directors have a reasonable expectation that the Company and the Group will have adequate resources to continue their operations for the foreseeable future and, therefore, continue to adopt the going concern basis in preparing the report and financial statements.

2. Business and geographical segments

Business segments

For management purposes, the Group is organised into two continuing operating divisions - Content, and Software and Interactive. The principal activity of the Content division is the production of audio and video programming for broadcasters and advertising to domestic markets. The principal activity of the Interactive division is the development and sale of software and data services to the radio industry both in the UK and overseas markets. These divisions comprise the Group's operating segments for the purposes of reporting to the Group's chief operating decision maker, the Chief Executive Officer.

In the year ended 31 March 2013, revenues of £1,878,481 (2012: £2,132,624) are included within the Content revenues from sales to the Group's single largest customer. No other customer formed greater than 10% of external revenues within the years ended 31 March 2013 and 2012.

Geographical information

The Group's operations and assets are located in the United Kingdom. The Group's sales outside the United Kingdom are predominantly made by the Software and Interactive division.

The Group's revenue from external customers and information about its segments by geographical location is detailed below:

3. Exceptional items

During the year ending 31 March 2012 the Directors wrote down the carrying value of goodwill and intangible assets in both the commissioned content and ad funded content CGUs of the Content segment of the business.

4. Tax

Corporation tax is calculated at 24% (2012: 26%) of the estimated assessable profit for the year.

The Company has re-measured its deferred tax liabilities following the reduction in future rates of corporation tax to 20%, for the year ended 31 March 2013, which has increased the deferred tax income by £47,000.

The charge for the year can be reconciled to the profit per statement of comprehensive income as follows

5. Discontinued operations

On 9 September 2012, the Group signed an agreement to dispose of its ad-funded content division, Lynx Content. The results of the discontinued operations, which have been included in the Consolidated Statement of Comprehensive Income, were as follows:

During the year, the ad-funded division had a net cash outflow of £43,000 (2012: 121,000 inflow) from operating activities and a net cash inflow of £22,000 from investing activities (2012: nil)

Loss on disposal

6. Earnings per share

Basic earnings per share is calculated by dividing the loss attributable to shareholders by the weighted average number of ordinary shares in issue during the year.

IAS 33 requires presentation of diluted EPS when a company could be called upon to issue shares that would decrease earnings per share, or increase the loss per share. For a loss-making company with outstanding share options, net loss per share would be decreased by the exercise of options. Therefore, as per IAS33:36 the antidilutative potential ordinary shares are disregarded in the calculation of diluted EPS.

Reconciliation of the profit and weighted average number of shares used in the calculation are set out below:

7. Goodwill and other intangibles

The carrying amount of goodwill is all allocated to the Content division of the Group. The Group tests goodwill annually for impairment or more frequently if there are indications that goodwill might be impaired.

The recoverable amounts of the CGU are determined from value in use calculations. The key assumptions for the value in use calculations are those regarding the discount rates, growth rates and expected changes to selling prices and direct costs during the period. Management estimates discount rates using benchmark cost of capitals for the sector along with the cost of capital of the group. Management has assessed the appropriateness of the discount rate for the different CGU and determined it is appropriate to the nature of each business. The growth rates are based on industry growth forecasts. Changes in selling prices and direct costs are based on past practices and expectations of future changes in the market.

The Group prepares cash flow forecasts derived from the most recent financial budgets approved by management for the next year, applies industry growth rates and extrapolates cash flows into perpetuity. The Group then prepares a sensitivity analysis on the variables to ensure robustness of the carrying value.

The key assumptions used in these calculations are:

- FY 2013-14 budgeted earnings before interest, tax, depreciation and amortisation ("EBITDA");

- Pre tax discount rate 12% (2012: 12%);

- Growth rate of 1% as per the long-term growth rate of the U.K.;

- Sensitivity analysis applied of 10% reduction in budgeted EBITDA and nil% EBITDA growth; and

- The Group projects cash flow derived from the most recent financial information used by management for the next year based on growth as stated above.

These assumptions have not resulted in impairment losses being recognised. In the sensitivity analysis a 10% reduction in budgeted EBITDA, with no EBITDA growth would result in an impairment of £104,000. The discount rate would need to move to 13.0% before any impairment would be recognised.