Aeorema Comm. Regulatory News (AEO)

20 Mar 2008 09:05

Cheerful Scout PLC20 March 2008 Cheerful Scout Plc / Epic: CLS / Index: AIM / Sector: Media 20 March 2008 Cheerful Scout Plc ('Cheerful Scout' or 'the Company') Interim Results Cheerful Scout Plc, the AIM-traded multi media specialist, announces its resultsfor the six months ended 31st December 2007. Chairman's Statement As anticipated in the announcement made on 20th February 2008, we haveexperienced difficult trading conditions in the first half year ended 31stDecember 2007 as market conditions have become more difficult. The loss of twolarge contracts and a slowdown in corporate spending have led to a reducedturnover for the period of £695,839 (2006: £1,038,285) and an operating loss of£238,948 (2006: profit £101,283). However, our cash position remains healthywith cash balances at 31st December 2007 of £1,023,634 (2006: £1,020,866). Our strategy for turning around the fortunes of the Company involve streamliningthe business, reducing overheads and using our resources in a cost effectivemanner to deal more efficiently in the competitive sector in which we operate.This process is already underway and will continue throughout the financialyear. Operations Our DVD division remains a stable and growing cornerstone of the Company. Thedrive for new business continues and we are seeing an increase in the number ofopportunities that we are being invited to pitch for. Furthermore, our majorclient relationships remain healthy and stable and there is potential forincreased activity from them. The Film & Video division also continues to perform well, having invested in newtalent and further defined our areas of strength. Our blue-chip client listincludes BAA, Nationwide and the Central Office of Communication. Our Corporate Events division has not delivered the results we anticipated andhas had a disappointing first half year. However, we believe that it willbenefit by drawing on the expertise of our joint venture company, Business DataInteractive Limited ('BDI'), which has developed business intelligence softwarethat can enhance an event experience by combining conferencing techniques withcorporate interactive debating facilities - something which we believe is notavailable from our competitors. Outlook Although the first half has been disappointing, we remain confident that theservices we offer our clients are improving. Importantly, we have maintainedour cash resources at more than £1m and we feel positive about the futuredirection of the Company. Finally, I would like to thank the staff for all their efforts and hope thattheir continued enthusiasm and dedication will help Cheerful achieve itsambitions. S Appleton Chairman 20 March 2008 Consolidated Income Statement for the six months ended 31 December 2007 Unaudited Unaudited Audited Six months to 31 December 2006 Year ended 30 June 2007 Pre Goodwill Pre Goodwill Pre Goodwill Goodwill Goodwill Goodwill impairment impairment Total impairment impairment Total impairment impairment Total £ £ £ £ £ £ £ £ £ Revenue 695,839 695,839 1,038,285 1,038,285 2,085,367 2,085,367 Cost of sales (523,099) (523,099) (554,797) (554,797) (1,218,007) (1,218,007) Gross Profit 172,740 172,740 483,488 483,488 867,360 867,360 Administrative expenses (391,389) (20,299) (411,688) (369,467) (12,738) (382,205) (764,188) (25,476) (789,664) Operating (loss)/profit (218,649) (20,299) (238,948) 114,021 (12,738) 101,283 103,172 (25,476) 77,696 Financial Income 24,959 - 24,959 15,546 - 15,546 37,840 - 37,840 Financial expenses - - - (8) - (8) - - - Net Financing costs 24,959 - 24,959 15,538 - 15,538 37,840 - 37,840 (Loss)/Profit before tax (193,690) (20,299) (213,989) 129,559 (12,738) 116,821 141,012 (25,476) 115,536 Taxation 2 3,036 - 3,036 (12,288) - (12,288) (3,036) - (3,036) (Loss)/profit for the period (190,654) (20,299) (210,953) 117,271 (12,738) 104,533 137,976 (25,476) 112,500 Minority interest 44,911 - 44,911 - - - - - - (Loss)/profit for theperiod attributable to equity holders ofthe parent company (145,743) (20,299) (166,042) 117,271 (12,738) 104,533 137,976 (25,476) 112,500 Basic earnings per share 3 (1.6943)p 1.0667p 1.14796pDiluted earnings per share 3 (1.6815)p 1.0586p 1.13929p Consolidated Balance Sheetat 31 December 2007 Unaudited Unaudited Audited Six months to Six months to Year ended 31 December 31 December 30 June 2007 2006 2007Non-current assetsIntangible assets 781,005 806,506 817,003Property, plant and equipment 102,062 100,017 91,159Total non-current assets 883,067 906,523 908,162 Current assetsInventories 2,632 2,757 2,285Trade and other receivables 265,576 443,530 465,339Cash and cash equivalents 1,023,634 1,020,866 1,039,275Total Current assets 1,291,842 1,467,153 1,506,899 Total assets 2,174,909 2,373,676 2,415,061 Current liabilitiesTrade and other payables (108,736) (76,023) (98,113)Current tax payable (40,058) (66,252) (70,595)Accruals and deferred income (59,176) (61,876) (68,861) Total Current liabilities (207,970) (204,151) (237,569) Net assets 1,966,939 2,169,525 2,177,492 Equity Share capital 1,225,000 1,225,000 1,225,000 Special reserves 1,747,416 1,747,416 1,747,416 Retained earnings (960,966) (802,891) (794,924) Total equity attributable to equity shareholders ofthe parent company 2,011,450 2,169,525 2,177,492 Minority interest (44,511) - - Total equity 1,966,939 2,169,525 2,177,492 Consolidated Cash Flow Statementfor the six months ended 31 December 2007 Unaudited Unaudited Audited Six months Six months Year ended to to 31 December 31 December 30 June 2007 2006 2007 £' 000 £' 000 £' 000Cash flows from operating activities (Loss)/profit for the period/year: (166,042) 104,533 112,500 Adjustments for:Depreciation 37,359 40,578 84,964Amortisation 35,998 35,996 71,993Profit on sale of equipment (22,538) - -Taxation (3,036) 12,288 3,036Financial income (24,959) (15,546) (37,840)Financial expense - 8 - Operating (loss)/profit before changes inworking capital and provisions (143,218) 177,857 234,653 Decrease in trade and other receivables 155,252 172,384 150,575(Increase) in inventories (347) (489) (17)Decrease in trade and other payables (26,563) (169,758) (127,088) Cash generated by the operations (14,876) 179,994 258,123 Tax paid - - - Net cash inflow from operating activities (14,876) 179,994 258,123 Cash flows from investing activitiesFinancial income 24,959 15,546 37,840Acquisition of property, fixtures and (48,262) (10,917) (46,445)equipmentAcquisition of intangible assets - (49,308) (95,802)Proceeds from sale of equipment 22,538 - - (765) (44,679) (104,407) Cash flows from financing activitiesFinancial expense - (8) - Net cash (outflow) from financing activities - (8) - Net (decrease)/ increase in cash and cash (15,641) 135,307 153,716equivalentsOpening cash and cash equivalents 1,039,275 885,559 885,559 Cash and cash equivalents held 1,023,634 1,020,866 1,039,275 Statement of Recognised Income and Expense Unaudited Unaudited Audited Six months to Six months Year ended to 31 December 31 December 30 June 2007 2006 2007 £' 000 £' 000 £' 000 Net expense recognised directly in equity(Loss)/profit for the period/year (166,042) 104,533 112,500 Total recognised income and expense for (166,042) 104,533 112,500the period/year Statement of Changes in Shareholders' Equity Unaudited Unaudited Audited Six months to Six months Year ended to 31 December 31 December 30 June 2007 2006 2007 £' 000 £' 000 £' 000 Total equity at beginning of period 2,177,492 2,064,992 2,064,992Total recognised income and expense (166,042) 104,533 112,500 Total equity at end of periodattributable to equityholders of the parent company 2,011,450 2,169,525 2,177,492 Minority interest (44,511) - - Total equity at end of period 1,966,939 2,169,525 2,177,492 NOTES TO THE FINANCIAL INFORMATION 1. Accounting Policies Basis of preparation The Group's financial statements were prepared in accordance with UK GAAP until30 June 2007. From 1st July 2007 the Group will prepare its consolidatedfinancial statements in accordance with IFRS as adopted for use in the EU. The next annual financial statements of Cheerful Scout plc will be prepared inaccordance with International Financial Reporting Standards (IFRS) as adoptedfor use in the EU applied in accordance with provisions of the Companies Act1985. IFRS transition The Group's results for the half year ended 31 December 2007 are the firstresults to be reported under IFRS. Basis of consolidation The consolidated financial statements incorporate the results of the Company andall of its subsidiary undertakings as at 31 December 2007 using the acquisitionmethod of accounting. Under the acquisition method the results of subsidiaryundertakings are included from the date of acquisition. Impairment of assets The carrying amounts of the Group's assets, other than inventories and deferredtax assets, are reviewed at each balance sheet date to determine whether thereis any indication of impairment. If any such indication exists, the asset'srecoverable amount is estimated. For goodwill the recoverable amount is estimated at each balance sheet date. An impairment loss is recognised whenever the carrying amount of an asset or itscash-generating unit exceeds its recoverable amount. Impairment losses arerecognised in the income statement. Goodwill was tested for impairment at 1 July 2006, the date of transition toAdopted IFRS. Investments There has been no change to the value of investments as a result of moving toIFRS. Any change in fair values will be shown in the Income Statement in thecalculation of profit or loss. Non-statutory accounts: The half-year figures for the period ended 31 December 2007 and the full yearfigures for the year ended 30 June 2007 do not constitute statutory accounts forthe purposes of section 240 of the Companies Act 1985. A copy of the statutoryaccounts for that year under UK GAAP has been filed with the Registrar ofCompanies. The report of the auditors on those accounts was unqualified and didnot contain a statement under either Section 237 (2) or Section 237 (3) of theCompanies Act 1985. Reconciliations and descriptions of the effect of thetransition from UK GAAP to IFRS on the Group's Equity and its net income areprovided in Note 5. 2. Taxation The taxation charge has been estimated by the Company based on adjustments totax payable in respect of previous years and the tax rate for the year ended 30June 2008. 3. Earnings per share The calculation of the basic earnings per share is based on the profit aftertaxation divided by the weighted average number of shares in issue, being9,800,000 (period ended 31 December 2006: 9,800,000; year ended 30 June 2007:9,800,0000). The diluted earnings per share takes the weighted average number of ordinaryshares in issue during the period and adjusts this for dilutive share optionsexisting at the period end. The diluted weighted average number of shares in theperiod ended 31 December 2007 was 9,874,578 (period ended 31 December 2006:9,874,578; year ended 30 June 2007: 9,874,578). Unaudited Unaudited Audited Six months to Six months to Year ended 31 December 31 December 2006 30 June 2007 2007 (Loss)/profit after taxation (166,042) 104,533 112,500 Basic (loss)/earnings per (1.6943)p 1.0667p 1.14796pshare Diluted (loss)/earnings per (1.6815)p 1.0586p 1.13929pshare 4. Operating Segment Analysis Analysis by geographical market 6 months 6 months ended ended Year ended 31 December 31 December 2006 30 June 2007 2007 £ £ £United Kingdom 693,814 940,117 1,923,918 Europe 2,025 98,168 161,449 Total revenue 695,839 1,038,285 2,085,367 5. Transition to IFRS The date of transition from UK GAAP to IFRS is 1 July 2006. Cheerful Scout PLCreported under UK GAAP in its previously published financial statements for theyear ended 30 June 2007. Analysis of the financial statements as at 1 July 2006,and subsequent periods shows that no adjustments are required to equity orprofit as a result of the transition to IFRS for the statements at the date oftransition, the six months ended 31 December 2006 or the full year ended 30 June2007. There are however significant presentational changes to the results foreach of the periods and these adjustments have been made. 6. Other Copies of the unaudited half-yearly results have not been sent to theshareholders, however copies are available on our website atwww.cheerfulscout.com or can be requested from the Company Secretary at theCompany's Registered Office: 65 New Cavendish Street, London, W1G 7LS. This information is provided by RNS The company news service from the London Stock Exchange