Last checked at 30 Mar 2009 07:00
Cheerful Scout Plc / Index: AIM / Epic: CLS / Sector: Media
30 March 2009
Cheerful Scout Plc ('Cheerful' or 'the Company')
Interim Results
Cheerful Scout Plc, the AIM-traded multi media specialist, announces its results for the six months ended 31 December 2008.
Chairman's Statement
Cheerful Scout has made progress during the period under review, delivering creative corporate communication solutions to our list of blue-chip clients and DVD orientated design and technical services. As discussed in my statement at the end of the last financial year, we remain committed to streamlining the business, reducing overheads and using our resources in a cost effective manner to deal more efficiently in the competitive sector in which we operate. This process will continue throughout this financial year.
Revenue for the six months to 31 December 2008 increased to £894,889 (2007: £695,839) and an operating profit of £3,032 (2007: loss of £238,948). Our cash balance remains healthy with cash balances at 31 December 2008 of £943,624 (2007: £1,023,634).
Operations
As previously announced, the loss of the Company's contract with the Contender Group has led us to review and restructure the DVD division to focus on Blu ray DVD. The drive for new business in this division continues and importantly other client relationships remain stable and there is potential, even in these difficult markets, for increased activity from them.
The On Screen division has performed well in the first half year with major projects for BAA and HMRC. However, the pipeline of work for the second half of the year has been adversely affected by the general economic climate which will impact on our second half performance.
Business Data Interactive (BDI)
Our business intelligence software joint venture has not performed well and we believe that it will be difficult to exploit its high - end products in the current economic climate. As a result we have taken a decision to write-off our investment and loans which to date total £200,600. There is no cash outflow connected with the write-off and the loss is eliminated on consolidation.
Related party transactions
Related party transactions are detailed in note 8 of these interim financial statements.
Principal risk and uncertainties
The principal risks and uncertainties which could impact on the Group for the remainder of the financial year are those detailed in the Group's 2008 Annual Report. These remain the principal risks and uncertainties for the second half of this financial year and beyond, and they are regularly considered by the board, particularly in light of the current financial crisis and market conditions.
Outlook
Although the Company has seen a reasonable performance in its core divisions we remain mindful of the comments made in our trading update of 23 January 2009 regarding the Company's financial performance during the remainder of 2009. The Board expects business levels and margins to be adversely affected during the second half of the year as clients reduce spending in-line with the economic environment and business sentiment.
Our team are committed to delivering innovative design solutions, combining creativity with a passion for understanding business challenges and communication objectives. I would like to take this opportunity to thank both our team and our shareholders for their loyalty and determination during this period.
S Appleton
Chairman
30 March 2009
Responsibility Statement
Six months ended 31 December 2008
The directors confirm that to the best of their knowledge:
a) The condensed set of financial statements has been prepared in accordance with IAS 34;
b) The interim management report includes a fair review of the information required by the Financial Statements Disclosure and Transparency Rules (DTR) 4.2.7R - "indication of important events during the first six months and their impact on the financial statements and description of principal risks and uncertainties for the remaining six months of the year";
c) The interim management report includes a fair review of the information required by DTR 4.2.8R - "disclosure of related party transactions and changes therein".
On behalf of the Board
S Appleton P Litten
Chairman Chief Executive
30 March 2009
** ENDS **
For further information visit www.cheerfulscout.com or contact:
| Gary Fitzpatrick | Cheerful Scout Plc | Tel: 020 7291 0444 |
| Mark Percy | Seymour Pierce | Tel: 020 7107 8030 |
| Susie Callear | St Brides Media & Finance Ltd | Tel: 020 7236 1177 |
Condensed Consolidated Income Statement
For the six months ended 31 December 2008
| Notes | Unaudited Six months to 31 December 2008 | Unaudited Six months to 31 December 2007 | Audited Year ended 30 June 2008 | |||
| £ | £ | £ | ||||
|
Continuing operations | ||||||
| Revenue | 894,889 | 695,839 | 1,566,329 | |||
| Cost of sales | (507,241) | (523,099) | (1,029,463) | |||
| Gross profit | 387,648 | 172,740 | 536,866 | |||
| Administrative expenses | (384,616) | (411,688) | (802,358) | |||
| Development costs written off | - | - | (346,076) | |||
| Operating profit / (loss) | 3,032 | (238,948) | (611,568) | |||
| Finance income | 15,077 | 24,959 | 45,870 | |||
| Profit / (loss) before taxation | 18,109 | (213,989) | (565,698) | |||
| Taxation | - | 3,036 | 34,959 | |||
| Profit / (loss) for the period | 18,109 | (210,953) | (530,739) | |||
| Attributable to: | ||||||
| Minority interests | - | (400) | (400) | |||
| Equity holders of parent | 18,109 | (210,553) | (530,339) | |||
| Profit / (loss) for the financial period | 18,109 | (210,953) | (530,739) | |||
| Earnings / (loss) per ordinary share: | ||||||
| Basic | 5 | 0.1848p | (2.1485)p | (5.41162)p | ||
| Diluted | 5 | 0.1848p | (2.1485)p | (5.41162)p | ||
There are no recognised gains or losses other than those passing through the income statement.
Condensed Consolidated Balance Sheet
As at 31 December 2008
| Notes | Unaudited Six months to 31 December 2008 | Unaudited Six months to 31 December 2007 | Audited Year ended 30 June 2008 | ||||
| £ | £ | £ | |||||
| Non-current assets | |||||||
| Intangible assets | 388,413 | 781,005 | 411,672 | ||||
| Property, plant and equipment | 200,072 | 102,062 | 153,911 | ||||
| 588,485 | 883,067 | 565,583 | |||||
| Current assets | |||||||
| Inventories | 3,057 | 2,632 | 2,229 | ||||
| Trade and other receivables | 368,809 | 265,576 | 432,754 | ||||
| Current tax receivable | 34,761 | - | 34,761 | ||||
| Cash and cash equivalents | 943,624 | 1,023,634 | 984,947 | ||||
| 1,350,251 | 1,291,842 | 1,454,691 | |||||
| Total assets | 1,938,736 | 2,174,909 | 2,020,274 | ||||
| Current liabilities | |||||||
| Trade and other payables | (273,474) | (207,970) | (373,121) | ||||
| (273,474) | (207,970) | (373,121) | |||||
| Net assets | 1,665,262 | 1,966,939 | 1,647,153 | ||||
| Equity | |||||||
| Share capital | 7 | 1,225,000 | 1,225,000 | 1,225,000 | |||
| Special reserves | 7 | - | 1,747,416 | 1,747,416 | |||
| Retained earnings | 7 | 440,262 | (1,005,477) | (1,325,263) | |||
| Equity attributable to equity holders of the parent | 1,665,262 | 1,966,939 | 1,647,153 | ||||
| Minority interest | 7 | - | - | - | |||
| Total equity | 7 | 1,665,262 | 1,966,939 | 1,647,153 | |||
Condensed Consolidated Cash Flow Statement
Six months ended 31 December 2008
| Unaudited Six months to 31 December 2008 | Unaudited Six months to 31 December 2007 | Audited Year ended 30 June 2008 | ||||
| £ | £ | £ | ||||
| Cash flows from operating activities | ||||||
| Profit / (loss) before taxation | 18,109 | (213,989) | (565,698) | |||
| Depreciation | 26,180 | 37,360 | 63,203 | |||
| Amortisation of intangibles | 23,259 | 23,259 | 46,517 | |||
| Impairment losses | - | 12,738 | 12,738 | |||
| Gain on sale of property, plant and equipment | (20,000) | (22,538) | (23,834) | |||
| Development costs written off | - | - | 346,076 | |||
| Finance income | (15,077) | (24,959) | (45,870) | |||
| 32,471 | (188,129) | (166,868) | ||||
| (Decrease) / increase in trade and other payables | (99,647) | (26,163) | 138,988 | |||
| Decrease in trade and other receivables | 63,945 | 199,763 | 32,585 | |||
| (Increase) / decrease in inventories | (828) | (347) | 56 | |||
| Taxation | - | - | (2,838) | |||
| Cash (used) / generated in operating activities | (4,059) | (14,876) | 1,923 | |||
| Cash flows from investing activities | ||||||
| Finance income | 15,077 | 24,959 | 45,870 | |||
| Purchase of property, plant and equipment | (72,341) | (48,262) | (125,955) | |||
| Proceeds from sale of property, plant and equipment | 20,000 | 22,538 | 23,834 | |||
| Cash used in investing activities | (37,264) | (765) | (56,251) | |||
| Net decrease in cash and cash equivalents | (41,323) | (15,641) | (54,328) | |||
| Cash and cash equivalents at beginning of period | 984,947 | 1,039,275 | 1,039,275 | |||
| Cash and cash equivalents at end of period | 943,624 | 1,023,634 | 984,947 | |||
Notes to the Interim Condensed Financial Statements
Six months ended 31 December 2008
| 1. | General Information |
Cheerful Scout Plc is a public limited company incorporated in the United Kingdom under the Companies Act 1985. The Company is domiciled in the United Kingdom and its principal place of business in 25-27 Riding House Street, London, W1P 7PB. 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 ended 31 December 2008 (including the comparatives for the periods ended 31 December 2007 and 30 June 2008) were approved by the board of directors on 30 March 2009.
The financial information set out in this interim report does not constitute statutory accounts for the purposes of section 435 of the Companies Act 2006. The Group's statutory financial statements for the year ended 30 June 2008, prepared under International Financial Reporting Standards (IFRS), have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under either Section 237 (2) or Section 237 (3) of the Companies Act 1985.
The interim financial statements have been prepared using the accounting policies set out in the Group's 2008 statutory accounts and have not been audited.
Copies of the annual statutory accounts and the interim report can be found on our website at www.cheerfulscout.com or can be requested from the Company Secretary at the Company's Registered Office: 65 New Cavendish Street, London, W1G 7LS.
| 2. | Basis of preparation |
These condensed consolidated interim financial statements for the period ended 31 December 2008 have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Services Authority and 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 2008, which have been prepared in accordance with IFRS's as adopted by the European union.
| 3. | Accounting Policies |
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 30 June 2008, as described in those annual financial statements.
| 4. | Revenue and segment information |
| On Screen 6 months to 31 Dec 2008 | On Screen 6 months to 31 Dec 2007 | DVD & Interactive 6 months to 31 Dec 2008 | DVD & Interactive 6 months to 31 Dec 2007 | Events 6 months to 31 Dec 2008 | Events 6 months to 31 Dec 2007 | Total 6 months to 31 Dec 2008 | 2007 6 months to 31 Dec 2007 | |
|
| £ | £ | £ | £ | £ | £ | £ | £ |
|
Revenue | 636,972 | 390,039 | 257,917 | 269,626 | - | 36,174 | 894,889 | 695,839 |
|
Segment results | 73,227 | (29,200) | (24,750) | 75,553 | - | (148,598) | 48,477 | (102,245) |
| Unallocated expenses | (45,445) | (136,703) | ||||||
| Operating profit / (loss) | 3,032 | (238,948) | ||||||
| Finance income | 15,077 | 24,959 | ||||||
| Taxation | - | 3,036 | ||||||
| Profit / (loss) for the period | 18,109 | (210,953) | ||||||
|
Segment assets | 616,995 | 552,128 | 489,411 | 593,086 | - | 147,482 | 1,106,406 | 1,292,696 |
| Unallocated assets | 832,330 | 882,213 | ||||||
|
Total assets | 616,995 | 552,128 | 489,411 | 593,086 | - | 147,482 | 1,938,736 | 2,174,909 |
| Segment liabilities | (142,168) | (26,951) | (62,447) | (34,539) | - | (29,361) | (204,615) | (90,851) |
| Unallocated liabilities | (68,859) | (117,119) | ||||||
|
Total liabilities | (142,168) | (26,951) | (62,447) | (34,539) | - | (29,361) | (273,474) | (207,970) |
| Capital expenditure | 36,171 | 16,088 | 36,170 | 16,087 | - | 16,087 | 72,341 | 48,262 |
| Depreciation & amortisation | 24,720 | 24,083 | 24,719 | 24,083 | - | 12,453 | 49,439 | 60,619 |
| Impairment loses | - | 6,369 | - | 6,369 | - | - | - | 12,738 |
Segment information is presented in respect of the Group's primary format, business segments. This is based on the Group's management and internal reporting structure. Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
| 5. | Earnings per share |
Basic earnings per share are calculated by dividing the profit or loss attributable to ordinary shareholders of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share are calculated by dividing the loss attributable to ordinary equity shareholders 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 in ordinary shares.
The following reflects the income and share data used and dilutive earnings per share computations:
| Unaudited Six months to 31 December 2008 | Unaudited Six months to 31 December 2007 | Audited Year ended to 30 June 2008 | |||
| £ | £ | £ | |||
| Profit / (loss) for the period | 18,109 | (210,953) | (530,739) | ||
| Adjusted for minority interests | - | 400 | 400 | ||
| Profit / (loss) attributable to equity holders of parent | 18,109 | (210,553) | (530,339) | ||
| Shares | Shares | Shares | |||
| Basic weighted average number of shares | 9,800,000 | 9,800,000 | 9,800,000 | ||
| Dilutive potential ordinary shares: | |||||
| Employee share options | - | - | - | ||
| Diluted weighted average number of shares | 9,800,000 | 9,800,000 | 9,800,000 |
| 6. | Capital Expenditure |
During the period, the Group acquired property, plant and equipment with a cost of £72,341 (2007: £48,262). During the period, the Group disposed of property, plant and equipment for proceeds of £20,000 (2007: £22,538).
| 7. | Statement of change in equity |
| Share capital | Special reserves | Retained earnings | Total | Minority interest | Total equity | |
|
| £ | £ | £ | £ | £ | £ |
| At 1 July 2007 | 1,225,000 | 1,747,416 | (794,924) | 2,177,492 | - | 2,177,492 |
| Retained loss for the period | - | - | (210,553) | (210,553) | (400) | (210,953) |
| Group contribution to minority | - | - | - | - | 400 | 400 |
| At 31 December 2007 | 1,225,000 | 1,747,416 | (1,005,477) | 1,966,939 | - | 1,966,939 |
| Retained (loss) / profit for the period | - | - | (319,786) | (319,786) | - | (319,786) |
| At 30 June 2008 | 1,225,000 | 1,747,416 | (1,325,263) | 1,647,153 | - | 1,647,153 |
| Retained profit for the period | - | - | 18,109 | 18,109 | - | 18,109 |
| Transfer of special reserves to retained earnings | - | (1,747,416) | 1,747,416 | - | - | - |
| At 31 December 2008 | 1,225,000 | - | 440,262 | 1,665,262 | - | 1,665,262 |
On 3 November 2008, following a board resolution, the Company has transferred its special reserves of £1,747,416 to retained earnings following the expiry of the undertaking given to the High Court of Justice in 2006.
| 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 Six months to 31 December 2008 | Unaudited Six months to 31 December 2007 | |||
| £ | £ | |||
| S Subsidiaries | ||||
| Amounts owed by subsidiaries | 231,837 | 238,553 | ||
| Amounts owed to subsidiaries | 1 | 1 |
Included in the amounts owed by subsidiaries of £231,837 is £200,000 due from its subsidiary, Business Data Interactive Limited. During the period, Cheerful Scout plc has made a provision of £200,000 against this loan as it is not considered to be recoverable.
Cheerful Scout Plc is a guarantor for a lease entered into by Centralfix Limited, its subsidiary undertaking.
Harris and Trotter LLP is a firm in which N J Newman is a member. The following was charges to the Group in respect of professional services.
|
Harris and Trotter LLP | £ | £ | ||
| Cheerful Scout plc | 10,800 | 10,475 | ||
| Centralfix Limited | 7,265 | 6,700 | ||
| 18,065 | 17,175 |
The compensation of key management (including directors) of the Group is as follows:
| £ | £ | |||
| Short-term employee benefits | 75,000 | 75,000 |