AVS.L Regulatory News (AVS)

22 Jan 2007 07:00

InvestinMedia PLC22 January 2007 Embargoed until 7:00pm 22 January 2007 InvestinMedia plc ("InvestinMedia" or the "Company") PRELIMINARY RESULTS Key Performance Indicators Year ended 30 September 2006 2005 Profit before tax (£ 000's) 1,879 338Profit after tax (£ 000's) 1,035 67EPS (pence) 6.4 0.4EPS Diluted (pence) 6.1 0.4Dividend paid in the year (pence) 6.0 5.5Closing net (debt) / funds (£ 000's) (5,178) 2,125 Chairman's statement I have pleasure in presenting the results of InvestinMedia for the year ended 30September 2006. These show a profit before tax of £1,879,000 (2005: £338,000).Our associates Medal Entertainment & Media plc ("MEM") and our recentacquisition Fountain Studios performed in line with our expectations andcontinue to develop their businesses. As announced on 28 December 2006 we sold our stake in Complete CommunicationsCorporation Limited ("Complete") owner of the Worldwide rights in "Who Wants ToBe A Millionaire?" to 2 Way Traffic N.V. As part of the restructuring prior tothe sale of Complete, the rest of Complete's businesses were sold to itsmanagement. The sale was completed on 20 December 2006 producing a profit on ourinvestment of approximately £31 million. The proceeds were 1,534,162 ordinaryshares of €0.01 each in 2 Way Traffic N.V. issued at a total subscription priceof £1.9 million, £9.4 million held in a retention account, £20.9million in cash(net of expenses) and a balance due from 2 Way Traffic N.V. based on the finalnet assets of Complete. Additional consideration may also be receivabledepending on the outcome of certain litigation in the United States. Part of theproceeds has been used to pay off the borrowings used to purchase FountainStudios. MEM, an AIM quoted media company, published its Interim Announcement, for thesix months to 30 September 2006, on 15 December 2006. Its Chairman commented"Growth in infrastructure costs to service the growing turnover in the DVDdivision increases the scale of seasonal variations and has resulted in anincreased operating loss for continuing divisions in the first six months. Thesale of Fountain Studios will enable the group to concentrate its resources onthe growth of the core businesses, the first step of which was announced on 2October 2006 with the acquisition of UGD/Britannia. Current trading andindications for the rest of the year mean that we anticipate being in line withmarket expectations for the full year." A small number of opportunities for future investment are being activelyconsidered, which might involve a major acquisition, with its own managementteam. InvestinMedia has been advised that if a substantial part of the proceedsfrom the sale of Complete are used for the acquisition of a trading businessthen it is likely that the proceeds of the Complete disposal should not besubject to Corporation Tax, which would otherwise be chargeable at 30 per cent.Such an acquisition may involve an offer of a mixture of cash and shares toallow some of our cash to be used to reduce the borrowings of the target thusplacing less financial constraints on the target's future growth. Your Board views the future of your company and our investment in MEM and theFountain Studios business with confidence. The Board is proposing paying a finaldividend of 3.5 pence per share on 10 April 2007, which together with theinterim dividend will make a total for the year to 30 September 2006 of 6.0pence per share. Richard Murray 19 January 2007Chairman InvestinMedia plc Review of Operations Fountain Studios Key Performance Indicators Year ended 30 September 2006 Turnover (£ 000's) 281 Operating profit (£ 000's) 43 The results shown above cover the 24 days following the acquisition of FountainStudios on 6 September 2006. Trading since the acquisition has been in line withexpectations. During the run up to Christmas the studio was fully utilised withthe return of "X Factor" (TalkbackThames/Syco). Indications for the comingmonths are very encouraging with several returning and new programmes and seriesalready confirmed. MEM Key Performance Indicators Year ended 30 September 2006 2005 Turnover (£ 000's) 25,681 15,769Gross profit (£ 000's) 12,074 9,502Overheads (£ 000's) 12,579 9,718Operating (Loss) (£ 000's) (505) (216)Operating (loss) attributable to InvestinMedia plc (£ 000's) (178) (34) Although this year again produced a loss for MEM, it has achieved a 64.9 %growth in turnover compared to the previous year. In its Interim Announcementfor the six months to 30 September 2006, published on 15 December 2006, MEM'sChairman commented, "turnover was £6.7million, up 22% from the comparativeperiod last year (2005: £5.5million), with growth coming from all divisions.The first half sales mix in DDHE affected margins with more lower margin thirdparty product being sold. Operating expenses rose by 15% to £5.4million (2005:£4.7 million) due to higher infrastructure costs in the DVD publishing anddistribution business to service the increased turnover going forward. The pretax loss was higher than the prior year interim period at £3.3million (2005:loss £1.9million), which includes £0.5million of discontinued operations and£0.3m of exceptional write off as a result of the sale of Fountain Television."He also commented "Current trading and indications for the rest of the year meanthat we anticipate being in line with market expectations for the full year." Complete Key Performance Indicators Year ended 30 September 2006 2005 Turnover (£ 000's) 37,463 34,721Operating profit (£ 000's) 4,310 429 As mentioned in the Chairman's statement Complete was sold after the year-end to2 Way Traffic N.V. The operating profit for the year continued to be affected bycosts incurred by Celador Radio in applying for major FM broadcasting licencesadvertised by Ofcom. Complete also continued with its policy of expensing allcosts relating to programme development and externally acquired intellectualproperties unless there was a clear future income stream. Celador Films had asuccessful year with "The Descent" which produced a significant contribution inthe year, but the remaining unrecovered costs relating to "Separate Lies" werewritten off. Cash At 30 September 2006 we had net debt of £5,178,000 (2005: Cash at bank£2,125,000). Since the year end this has been repaid and as at 18 January 2007we had £15 million available for investment in existing or new ventures shouldan appropriate opportunity arise to enhance shareholder value. InvestinMedia plc Consolidated profit and loss accountfor the year ended 30 September Continuing Acquisitions 2006 2005 £'000 £'000 £'000 £'000 Group and share of associates' turnover 22,977 281 23,258 19,716Less: Share of associates' turnover 22,877 - 22,877 19,666 Group turnover 100 281 381 50Cost of sales - 90 90 - Gross profit 100 191 291 50Administrative expenses 308 148 456 235 Group operating (loss) / profit (208) 43 (165) (185)Share of associates' operating profit 1,924 - 1,924 172Group and share of associates' operating profit / 1,716 43 1,759 (13)(loss) before interest and taxationNet investment income / (interest payable) 120 351 Profit on ordinary activities before taxation 1,879 338Taxation on ordinary activities 844 271Profit for the year 1,035 67 Earnings per share -Basic 6.4p 0.4pDiluted 6.1p 0.4pDividends per share- Paid in year 6.0p 5.5p- Proposed final 3.5p 3.5p No separate Statement of Total Recognised Gains and Losses has been presented asall such gains and losses have been dealt with in the profit and loss account. InvestinMedia plc Consolidated Balance sheet As at 30 September 2006 2005 (Restated) £'000 £'000 Tangible assets 7,232 -Investments in associates 5,889 5,174 Fixed assets 13,121 5,174 Stocks: Raw materials and consumables 62 -Debtors: amounts falling due within one year 488 37Debtors: amounts falling due after more than one year 133 -Cash at bank and in hand 322 2,125 Current assets 1,005 2,162Creditors: amounts falling due within one year (6,790) (62) Net current (liabilities) / assets (5,785) 2,100 Net assets 7,336 7,274 Capital and reservesCalled up share capital 1,632 1,632Treasury shares (91) (91)Share premium account 12,489 12,489Profit and loss account (6,694) (6,756) Equity shareholders' funds 7,336 7,274 Consolidated reconciliation of movement in equity shareholders' fundsfor the year ended 30 September 2006 2005 £'000 £'000 Opening equity shareholders' funds (as previously 6,706 7,624stated)Prior year adjustment 568 571Opening equity shareholders' funds (as restated) 7,274 8,195 1,035 67Profit for the yearDividends (973) (897) 62 (830)Shares purchased into treasury - (91) Net increase / (reduction) in equity shareholders' funds 62 (921) Closing equity shareholders' funds 7,336 7,274 InvestinMedia plc Consolidated cash flow statementfor the year ended 30 September 2006 2005 £'000 £'000 Net cash flow from operating activities 279 (200) Dividends from associate 880 1,175 Interest received 76 106Interest paid (23) -Returns on investments and servicing of finance 53 106Taxation - - Net cash flow before capital expenditure 1,212 1,081 Purchase of tangible assets (55) -Capital expenditure (55) - Acquisition of subsidiary (7,053) -Investment in associate (435) - Acquisitions (7,488) - Equity dividends paid (972) (895) Net cash flow before use of liquid resources and financing (7,303) 186 Management of liquid resources:Decrease / (Increase) in bank term deposits 1,050 (1,050)Purchase of own shares into treasury - (91)Increase in bank loans 5,500 - Financing 5,500 (91) Decrease in cash in the year (753) (955) Reconciliation of net cash flow to movement in net (debt) / funds Decrease in cash in the year (753) (955)Cash inflow from increase in debt (5,500) -Cash flow from change in liquid resources (1,050) 1,050 Movement in net (debt) / funds in the year (7,303) 95 Opening net funds 2,125 2,030 Closing net (debt) / funds (5,178) 2,125 Closing net (debt) / funds comprises cash at bank and in hand of £322,000 (2005:£2,125,000) less bank loans of £5,500,000 (2005: nil) InvestinMedia plc Notes to the preliminary announcement for the year ended 30 September 2006 1 Status of preliminary announcement The preliminary announcement does not amount to full accounts within the meaningof section 240 of the Companies Act 1985. The contents of the preliminaryannouncement have been extracted from the audited financial statements of thecompany for the year ended 30 September 2006, which will be filed with theRegistrar of Companies. The audit report on these financial statements isunqualified and does not contain a statement under Section 237(2) or (3) of theCompanies Act 1985. This preliminary announcement was approved by the board on19 January 2007. 2 Accounting policies The financial statements have been prepared using the accounting policiesconsistent with those set out in the report and accounts for the year ended 30September 2005 except with respect to accounting for dividends. The Group haschanged its accounting policy for dividends following the implementation of anew accounting standard FRS 21 'Events after the Balance Sheet date'. Previouslythe Group recognised dividends proposed in respect of the financial year towhich they related. Under the new standard, the Group will recognise interimdividends when paid and proposed dividends on approval at the Annual GeneralMeeting. The standard requires the change to be retrospective and thereforecomparatives have been restated. 3 Acquisition - Fountain Television Limited On 6 September 2006 the group acquired a 100% interest in the Ordinary issuedshare capital of Fountain Television Limited (which owns and operates televisionstudios) for aggregate consideration of £7,053,000. This purchase has beenaccounted for as an acquisition. Net book value Fair value adjustments Fair value £000 £000 £000 Net assets acquired: Tangible fixed assets 6,750 435 7,185Intangible fixed assets 276 (276) -Stocks 64 - 64Debtors 349 - 349Creditors (545) - (545)Net assets acquired 6,894 159 7,053 Cash paid 1,500Acquisition expenses 253Loan to Fountain Television Limited 5,300Total Acquisition Cost satisfied in cash 7,053 Pre-acquisition trading The following table sets out the financial results of Fountain TelevisionLimited for the period from 1 April 2006 to the date it was acquired and thecomparative for the year ended 31 March 2006. Period from 1 April to 6 Year ended 31 March 2006 September 2006 £000 £000 Turnover 1,332 3,199Cost of sales (548) (1,131)Gross profit 784 2,068Administration expenses (1,217) (2,482)Exceptional Item 538 -Interest payable (188) (11)Loss on ordinary activities before taxation (83) (425) 4 Associates Our share of the earnings of our associates is made up of: Complete The group owned 100% of the A ordinary shares which gave the group a 49%economic interest in Complete together with 49% of the voting rights. The groupshare of the results of Complete for the year ended 30 September was as follows: 2006 2005 £'000 £'000 Turnover 18,357 17,013Profit on ordinary activities before taxation 2,252 519Taxation on profit on ordinary activities (797) (237)Profit on ordinary activities after taxation 1,455 282 MEM The group acquired additional ordinary shares in MEM in the year for £435,000and now owns 20.74% of the ordinary shares in MEM (2005: 16.83%). The marketvalue of this investment at 30 September 2006 was £1.79 million (2005 £1.76million). The group share of the results of MEM for the year ended 30 Septemberwas as follows: 2006 2005 £'000 £'000 Turnover 4,520 2,653(Loss) on ordinary activities before taxation (174) (102)Taxation on loss on ordinary activities (34) 34(Loss) on ordinary activities after taxation (140) (136) 5 Earnings per share Basic earnings per share ('EPS') have been calculated by dividing earnings(profit after taxation) by the weighted average number of ordinary shares inissue (excluding treasury shares) during the year. Weighted average number of shares 2006 2005 for the year ended 30 September Number Number For basic earnings per share 16,223,797 16,304,640Effect of dilutive share options 654,226 372,210For diluted earnings per share 16,878,023 16,676,850 6 Dividends A final dividend of 3.5 p per share is proposed to be paid on 10 April 2007 toshareholders on the Register on 9 March 2007, making a total dividend for theyear of 6.0 pence per ordinary share (2005: 5.5 pence). For further information, please contact: Richard Murray, Chairman Cameron Maxwell, Chief Executive InvestinMedia plc Tel: 0207 588 7352 E-mail: mail@InvestinMedia.com Web site: www.InvestinMedia.com Clive Carver/Charles Cunningham JM Finn & Co. Ltd. Tel: 0207 628 9688 This information is provided by RNS The company news service from the London Stock Exchange