AVS.L Regulatory News (AVS)

10 Dec 2007 07:01

Avesco Group PLC10 December 2007 EMBARGOED UNTIL 7.00am, 10 December 2007 AVESCO GROUP plc Preliminary Results for the year ended 30 September 2007 Avesco Group plc, the international provider of services to the corporatepresentation, entertainment and broadcast markets, announces its preliminaryresults for the year ended 30 September 2007. KEY HIGHLIGHTS • Results reflect the disposal of Complete Communications, the then owner of "Who Wants To Be A Millionaire?" and the merger in May 2007 with Avesco plc • Turnover of £33.2m (2006: £0.4m) • Profit before tax amounted to £30.6m (2006: £1.7m) • Basic earnings per share of 150.3p (2006: 5.2p) • Proposed unchanged final dividend of 3.5p per share making a total of 6.0p (2006: 6.0p) • Since year end Avesco has purchased 850,000 of its own shares at 116.5p each Ian Martin, Chief Executive, commented: "The year has been one of total transformation and the Group today bears littleresemblance to what it was twelve months ago. Indeed the results we arereporting today barely reflect the underlying business we have created,representing, as they do, a combination of the substantial exceptional profit onthe disposal of Complete and the quieter summer trading period for our operatingcompanies. "Today, Avesco is a premier player in the field of specialist media serviceswith a substantial global reach. We are generating cash and are supported by avery strong balance sheet. As we look to the future, the market is as full ofopportunities and challenges as ever. There may be uncertainties for the generaleconomic outlook but there is little evidence of any adverse impact on ourbusiness at present and, of course, the coming year should see our involvementin the Beijing Olympics and the European Football Championships. "As the Group expands we are identifying many exciting opportunities around theworld, all of which gives us confidence for the future." For further information please contact: Avesco Group plc On the day: 020 7067 0700Ian Martin, Chief Executive Thereafter:01293 583400John Christmas, Finance Director Weber Shandwick Financial 020 7067 0700Terry Garrett / John Moriarty J M Finn Capital Markets 020 7600 1660Clive Carver KBC Peel Hunt Ltd 020 7418 8900Matthew Tyler Avesco Group plcChairman's Statement This is the first annual report of the Avesco Group since we disposed of ourinvestment in Complete Communications Corporation Limited ("Complete") and thenacquired Avesco plc. As a result of these transactions, your Company today bearslittle resemblance to that of twelve months ago and has been transformed into aspecialist media services business with substantial global reach. At the end of the financial year to 30 September 2006, we acquired FountainStudios, the UK's largest independent dedicated television studio and home to anumber of the country's top entertainment shows. In December 2006, we completed the planned disposal of our 49% shareholding inComplete to 2waytraffic N.V. for which we received £24.5m in cash, £9.9m ofdeferred consideration and 1.53m shares in 2waytraffic. At the end of September2007, the Company disposed of its entire holding in 2waytraffic at 95p a share,raising proceeds of £1.5m. In May 2007, we completed the acquisition of Avesco plc for a totalconsideration (including costs) of £20.0m through a combination of cash and theissue of new ordinary shares of the Company. The primary business of Avesco plcand its subsidiary companies is the rental of video and audio equipment and theprovision of services to the events and broadcast industry. With the addition of the Avesco companies to the Fountain Studios business, theGroup has become a leading international media services business with operationsin Europe, North America, the Middle East and Asia and some 600 employees. Results As a consequence of the various transactions outlined above, the results for the12 months to 30 September 2007 include the results of Fountain Studios for thefull year, which produced an operating profit of £0.8m, and the results of thebusinesses of Avesco plc and its subsidiaries from the date of acquisition on 17May 2007 until 30 September 2007, being an operating profit of £0.1m. The Group's share of Complete's results between 1 October 2006 and its disposalon 20 December 2006 was an operating profit of £0.5m prior to operatingexceptional costs of £0.8m. A gain of £32.0m was made on our share of the profiton the disposal of certain subsidiaries of Complete and on the disposal ofComplete itself. The Group's share of the results of Medal Entertainment & Mediaplc ("MEM") between 1 October 2006 and 24 July 2007, when MEM ceased trading,was an operating profit of £0.2m before operating exceptional costs of £0.7mtogether with a further exceptional loss of £1.1m relating to the write-off ofthe Group's investment in MEM. Turnover for the year was £33.2m (2006: £0.4m), excluding the Group's share ofAssociates' turnover of £8.0m (2006: £22.9m), producing an operating profitbefore exceptional items and goodwill amortisation of £1.3m (2006: £1.6m).Non-operating exceptional items produced a net £29.0m gain (2006: nil) andgoodwill amortisation amounted to a credit of £0.1m (2006: nil). After takingaccount of net interest income of £0.2m (2006: £0.1m), the profit on ordinaryactivities before taxation was £30.6m (2006: £1.7m). Basic earnings per sharewere 150.3p (2006: 5.2p), and 145.1p (2006: 5.0p) on a diluted basis. Dividend The Board is proposing a final dividend of 3.5p per share (2006: 3.5p) subjectto shareholders' approval, making a total dividend of 6.0p per share for theyear (2006: 6.0p). Our intention is to pursue a policy of steady dividend growthwhile having regard to the needs of the business and maintaining a sensibleearnings cover. Share Capital Since the year-end, the Company used £1m from the proceeds of the sale of its2waytraffic shares for the purchase of its own shares by buying 850,000 sharesat 116.5p each. These shares are held in Treasury. The Directors intend to useup to the remaining £0.5m from the sale of the 2waytraffic shares to undertakeadditional market purchases of the Company's own shares although they onlypropose to do so if satisfied that such purchases would result in an increase inearnings per share and would be in the best interests of the shareholdersgenerally. The Company currently has authority to purchase up to an additional2,390,000 shares and is seeking authority at the forthcoming AGM to renew thisauthority in respect of 2,598,589 shares. Outlook The disposal of our interest in Complete has allowed the Company to fund theacquisition of an exciting international media services group. The investmentswe have made will drive the organic growth and development of the Group in thefuture although we may also consider further suitable acquisition opportunitiesas they arise. It has been a year both of transformation and of investment in the future. Themarket looks as challenging and full of opportunity as ever and we have put inplace the management and operations to achieve our ambitions as a premier playerin the media services industry. Michael GibbinsChairman10 December 2007 Avesco Group plcChief Executive's Review of Operations I have no doubt that we shall look back in a few years and see the last year asnot only one of transformation but also as one of the emergence of the AvescoGroup as a world class business within its sector. Perhaps a great deal remainsto be done to maximise the potential but that is also the opportunity. What we do For those looking at the accounts for the first time, the primary business ofthe Avesco Group is the supply of specialist equipment, facilities and servicesto the events and broadcast markets. Within the Avesco Group our clients have access to companies with all thenecessary skills and experience in staging and supporting events and inproviding broadcast services and facilities, companies with strong anddistinctive cultures of their own and all highly respected. Today we employ around 600 people in 17 locations and are truly local, nationaland international in our capability. The largest business is Creative Technology ("CT"), which has operations in theUS, UK, Mainland Europe, Asia and the Middle East. It is one of the premierstaging companies in the world, offering highly specialised video and audiosolutions to its clients. CT's reputation is built on a track record establishedover 20 years for delivering quality, innovation and technically challengingsolutions in many countries round the globe. Alongside CT, we offer a number of regionally strong full service businessesproviding a "one stop shop" for everything a client would need for its nextevent, whether a desktop projector for a board room meeting or a completevision, sound and light solution for a major international event. Our third area of activity is Broadcast Services where we have two distinctbusinesses, Presteigne Broadcast Hire and Fountain Studios. Presteigne is aleading provider of broadcast television equipment and systems solutions to thetelevision studio, outside broadcast and production sectors. Fountain Studios,based in Wembley, London, is the UK's largest independent dedicated televisionstudio. Strategy overview Avesco Group's strategy is clear and straightforward - to continue to grow ourshare of the events and broadcast market while maximising the value derived fromeach client relationship to the mutual benefit of the client and us. We aim todevelop the quality and range of our services and products and to exploit andbuild upon the substantial knowledge, skills and resources available within theGroup. Review of business The financial information, which follows for each business, covers the periodsince its acquisition on 17 May 2007, except in respect of Fountain Studioswhich has been part of the Group for the full year. The summer period has historically been the quietest part of the financial yearand therefore the bare numbers alone do not adequately reflect the trueunderlying performance of the newer companies within the Group. Creative Technology Creative Technology ("CT") is a professional full service audio visual stagingcompany providing turnkey solutions for corporate and special events, tradeshowsand exhibits, conferences and general sessions, product launches and awardceremonies. CT has offices in North America (Los Angeles, San Francisco, Chicago and LasVegas), Europe (London and Stuttgart), Middle East (Dubai) and Asia (Shanghai). CT's planned geographic diversification has continued with the new officesopening in Dubai and, after the year end, in Shanghai. We consolidated ourposition in CT Germany by buying the 25.1% minority interest in the businesspreviously owned by management. The acquisition not only gives us full ownershipand control but also provides us with a solid platform from which to drive thedevelopment of that business in the very important German market. In the 4 1/2month period for which it was part of the Group, CT achieved global revenues of£17m and an operating loss of £0.1m although it should be noted that theseresults take in the summer season, which is traditionally CT's weaker tradingperiod, and are after the initial trading loss in the new Dubai office of £0.1m. Efficient operations are a cornerstone for the CT business. We have begun aninvestment process to upgrade and standardise our core equipment managementsystems across CT. This should produce better utilisation of our equipment andthus, in turn, lead to improvements in our margins. The North Americanoperations are scheduled to be the first to go live with the new systems duringthe first half of 2008. CT has continued to invest in the development of its audio capability, whichgenerates an increasing percentage of our revenues. We have steadily grown oneof the most respected audio operations in the industry in a matter of a fewyears. Since the end of the financial year we have entered into a strategic alliance inthe music touring market with CT Touring. CT Touring will be positioned as ahigh-end video services company, providing concert touring video systems to someof the world's most talented entertainers. CT has been trading successfully for over 20 years and is one of the few trulyinternational staging companies. It is run by professional management and hasmany talented individuals. The services offered are being broadened andgeographic expansion into the Middle East and China gives us exposure toenormously important new markets. Full Service In the 4 1/2 month period for which they were part of the Group, Avesco's FullService companies, which comprise three regionally strong businesses, hadcombined revenue of £7.3m and recorded a small operating profit. JVR, based in the Netherlands, provides comprehensive technical support forconventions, sports and music events, company presentations, television showsand fairs. JVR had an outstanding performance during the period both infinancial terms and in the development of the operation. It increased marketshare, built upon its strong reputation in video and made significant additionsto its audio services. Action, based in Monaco and Cannes, has long been established as a market leaderon the Cote D'Azur in video and audio. The region is a favoured destination forconferences and exhibitions, which provide a healthy demand for Action'sservices. Action has recently introduced an IT services capability whichintegrates especially well into the exhibition market. MCL, which has offices across the UK, is one of the UK's leading suppliers ofvision, sound, lighting and staging, providing a "one stop shop" for everythingthe client needs for its next event, whether it is a desktop projector for aboardroom meeting or a complete vision, sound and lighting solution for a majorinternational event. MCL is emerging from a point of change. The business, in financial terms, hasfailed to meet internal targets over the last several months and so toregenerate the company we have implemented a number of senior managementchanges. Underperforming branches have been restructured and repositioned andMCL is now a more cohesive unit moving forward. The main Birmingham office hasrecently been relocated to brand new premises, which are more appropriate to thesize of the operation and should lead to some cost savings and improvements inoperational efficiency. Through these actions we expect to see an upturn inMCL's performance as the business regains its momentum. Broadcast Services Within Broadcast Services we have two businesses, Presteigne Broadcast Hire andFountain Studios. In the 12 months ended 30 September 2007, which includes theresults of Fountain Studios for the full year and Presteigne since May 2007,Broadcast Services achieved a combined operating profit of £1.2m on revenue of£8.8m. Presteigne Broadcast Hire rents High Definition and Standard Definition cameraequipment, Video Tape Recorders, EVS hard disk recorders, lenses, RF links andde-rig systems to its clients across Europe and the rest of the World. Thestrategy for Presteigne remains to consolidate its position as one of the marketleaders in the rental of High Definition technology as the industry migrates tothat format. During the last twelve months Presteigne has opened an office inHolland, a second office in Germany and, since the year end, a second UK officein Manchester. The increase in Presteigne's geographical presence in theseimportant local markets should open up new business opportunities as well asproviding the stability that comes from a broader base of operation. Presteigne has continued the development of its services and products to supporta larger customer base. The fastest growing segments of the business are our RFcapability and the recently introduced audio service. In parallel to CT,Presteigne has begun an investment process to replace its core IT systems withone central system allowing for improvements in equipment management around whathas developed into a larger and more complex business. Fountain Studios provides the UK's largest fully equipped dedicated independenttelevision studio, combined with an outstanding operational team and first classsupport services. Many leading shows are produced at Fountain Studios includingduring the year The X Factor, Britain's Got Talent, Grease and Little MissJocelyn. Fountain produced a record financial performance in the period, withutilisation of the studio at high levels. It continued to benefit from theindustry trends in programme making. The management executed their plansefficiently and did a fantastic job in managing the increased level of demand. Investment was made to refurbish the building, which has been well received. Wealso began to build a high definition capability with the replacement of thewhole camera stock which should benefit margins and reinforce the reputation ofFountain as the studio of choice. The fourth series of the "X Factor" iscurrently being filmed at Fountain and should provide a solid start to what wehope will be another good year. People Key to both the success of the Group and our strategy going forward is thepeople we employ. We have excellent people around the Group, I wish to thank them for theircontribution and this Group is a reflection of their passion, talent andefforts. It is a joy to work with them. Outlook As I write there is some uncertainty regarding the global economic outlook, withthe full ramifications of the "credit crunch" yet to be seen. Although there islittle evidence of any adverse impact on our business, we remain alert and willtake a cautious view on major capital expenditure until a clearer pictureemerges. Avesco has a strong balance sheet with gearing of only 17% as at 30 September2007 and we continue to generate a healthy cash flow. We are well placed toweather any downturn should it arise and to prosper in more positive markets. The 2007/2008 financial year should benefit from the Beijing Olympics and theEuropean Football Championships, the combination of which has the potential toproduce a strong demand for the Group's services during the summer and tomitigate any downturn elsewhere in the year. Conclusion Over the past twelve months the Avesco Group has changed from a businessprimarily focused on the management of its investments to a specialist mediaservices business with substantial global reach. As the Group expands, we areidentifying many exciting and challenging new opportunities around the world,all of which gives us confidence for the future. Ian MartinChief Executive10 December 2007 Avesco Group plcConsolidated profit and loss accountFor the year ended 30 September 2007 2006 2007 (audited & (unaudited) restated*) Note £'000 £'000--------------------------------------------------------------------------------Turnover- Continuing operations 5,490 381- Acquisitions 27,686 ---------------------------------------------------------------------------------Group Turnover 1 33,176 381Cost of sales (19,554) (90)--------------------------------------------------------------------------------Gross profit 13,622 291 Operating expenses before goodwill amortisation (13,062) (653)Goodwill amortisation 58 ---------------------------------------------------------------------------------Total operating expenses (13,004) (653)--------------------------------------------------------------------------------Group operating profit/(loss) 618 (362)Share of associates' operating profit before exceptional items 723 1,924Share of associates' operating exceptional items 3 (1,542) ---------------------------------------------------------------------------------Share of associates' operating (loss)/profit (819) 1,924--------------------------------------------------------------------------------Continuing operations- Continuing operations 552 (362)- Acquisitions 66 ---------------------------------------------------------------------------------Total continuing operations 618 (362)Discontinued operations (819) 1,924--------------------------------------------------------------------------------Group and share of associates' operating (loss)/profit (201) 1,562--------------------------------------------------------------------------------Share of associates' non-operating exceptional items 3 597 -Gain on disposal of associate 3 31,405 -Impairment of associate 3 (1,057) -Loss on disposal of investment 3 (421) ---------------------------------------------------------------------------------Group and share of associates' profit on ordinary activities before interest and taxation 30,323 1,562 Group net interest receivable 231 53Share of associates' net interest receivable 9 67--------------------------------------------------------------------------------Net interest receivable and similar items 240 120--------------------------------------------------------------------------------Profit on ordinaryactivities before taxation 1 30,563 1,682Taxation on profit onordinary activities 4 (732) (844)--------------------------------------------------------------------------------Profit for the financial year 29,831 838--------------------------------------------------------------------------------Earnings per shareBasic 5 150.3p 5.2pDiluted 5 145.1p 5.0pEarnings per share from continuing operationsBasic 5 0.7p (2.0)pDiluted 5 0.6p (1.9)p-------------------------------------------------------------------------------- There is no difference between the results stated above and their historicalcost equivalents. * The year ended 30 September 2006 has been restated following the adoption ofFRS20 "Share-based payment" (see Note 10 for further details). Consolidated statement of total recognised gains and lossesFor the year ended 30 September 2007 2007 2006 (unaudited) (audited & restated*) £'000 £'000----------------------------------------------------------------------------------Profit for the financial year 29,831 838Currency translation differences (7) -----------------------------------------------------------------------------------Total recognised gains and losses relating to the year 29,824 838----------------------------------------------------------------------------------Prior year adjustment (see Note 10) (339)----------------------------------------------------------------------------------Total recognised gains and losses since last annual report 29,485---------------------------------------------------------------------------------- Avesco Group plcConsolidated balance sheetAs at 30 September 2007 2007 2006 (unaudited) (audited & restated*) £'000 £'000--------------------------------------------------------------------------------Intangible assets (509) -Tangible assets 44,197 7,232Investments in associates - 5,889Other investments - ---------------------------------------------------------------------------------Fixed assets 43,688 13,121 Stocks 1,440 62Debtors: amounts falling due within one year 21,166 488Debtors: amounts falling due after more than one year 6,467 645Cash at bank and in hand 8,651 322--------------------------------------------------------------------------------Current assets 37,724 1,517 Creditors: amounts falling due within one year (22,511) (6,939)--------------------------------------------------------------------------------Net current assets/(liabilities) 15,213 (5,422)--------------------------------------------------------------------------------Total assets less current liabilities 58,901 7,699 Creditors: amounts falling due after more than one year (9,208) - Provisions for liabilities and charges (1,412) (512)--------------------------------------------------------------------------------Net assets (Note 1) 48,281 7,187-------------------------------------------------------------------------------- Share capital 2,599 1,632Share premium 23,286 12,489Profit and loss account 22,396 (6,934)--------------------------------------------------------------------------------Equity shareholders' funds 48,281 7,187-------------------------------------------------------------------------------- * The balance sheet at 30 September 2006 have been restated following theadoption of FRS20 "Share-based payment" and a reclassification of treasuryshares as a deduction against profit and loss account (see Note 10 for furtherdetails). Consolidated reconciliation of movements in equity shareholders' fundsFor the year ended 30 September 2007 2007 2006 (audited & (unaudited) restated) £'000 £'000--------------------------------------------------------------------------------Profit for the financial year 29,831 838Dividends* (568) (973)--------------------------------------------------------------------------------Retained profit/(loss) for the financial year 29,263 (135) Currency translation differences (7) -Nominal value of ordinary shares issued for the acquisition of Avesco plc 967 -Premium (net of expenses) on ordinary shares issued for the acquisition of Avesco plc 10,797 -LTIP & share options 74 73--------------------------------------------------------------------------------Net change in equity shareholders' funds 41,094 (62) Opening equity shareholders' funds as previously reported 7,336 6,706Restatement - FRS20** (149) (25)Restatement - FRS21*** - 568--------------------------------------------------------------------------------Opening equity shareholders' funds 7,187 7,249--------------------------------------------------------------------------------Closing equity shareholders'funds 48,281 7,187-------------------------------------------------------------------------------- * The prior year disclosure of dividends has been amended to reflect accountingfor distributions to equity holders directly within equity in accordance withFRS 25. This amendment has nil impact on the opening or closing position of theGroup.** The year ended 30 September 2006 has been restated following the adoption ofFRS20 "Share-based payment" (see Note 10 for further details).*** The year ended 30 September 2006 has been restated in accordance with FRS21"Events after the balance sheet date" where interim dividends are recognisedwhen paid and final dividends are recognised on approval at the Annual GeneralMeeting. Avesco Group plcConsolidated cash flow statementFor the year ended 30 September 2007 2007 2006 (unaudited) (audited) £'000 £'000 -------------------------------------------------------------------------------- Net cash inflow from operating activities 2,895 279 Dividends from associates - 880 Interest received 563 76Interest paid (320) (23)Interest element of hire purchase obligations (251) ---------------------------------------------------------------------------------Net cash (outflow)/inflow from returns on investments and servicing of finance (8) 53 Overseas taxation paid (99) ---------------------------------------------------------------------------------Taxation (99) - --------------------------------------------------------------------------------Net cash inflow before capital expenditure 2,788 1,212 Purchase of tangible fixed assets (12,093) (55)Sale of tangible fixed assets 2,433 ---------------------------------------------------------------------------------Net cash outflow for capital expenditure (9,660) (55) Purchase of subsidiary undertakings (8,437) (7,053)Investment in associate - (435)Disposal of investments and associates 24,572 ---------------------------------------------------------------------------------Net cash inflow/(outflow) from acquisitions and disposals 16,135 (7,488) Equity dividends paid (568) (972)--------------------------------------------------------------------------------Net cash inflow/(outflow) before use of liquid resources and financing 8,695 (7,303) Reduction in short term bank deposits - 1,050--------------------------------------------------------------------------------Net cash inflow from management of liquid resources - 1,050 Expenses of share issue to acquire Avesco plc (226) -New bank loans - 5,500Repayment of bank loans (5,705) -New hire purchase obligations 5,381 -Repayment of hire purchase obligations (2,053) ---------------------------------------------------------------------------------Net cash (outflow)/inflow from financing (2,603) 5,500--------------------------------------------------------------------------------Increase/(decrease) in cash in the year 6,092 (753)--------------------------------------------------------------------------------Net debt (Note 7) (8,046) (5,178)-------------------------------------------------------------------------------- Avesco Group plcNotes to the preliminary announcementFor the year ended 30 September 2007 1 Segmental analysis by geographical locationThe Group's continuing business is classified by management into three maindivisions (Creative Technology, Full Service and Broadcast) which togetherprovide the Group's principal activity of services to the corporatepresentation, entertainment and broadcast markets. The management of the Group'sinvestments in its two associated companies, Complete Communications CorporationLimited ("Complete") and Medal Entertainment & Media plc ("MEM") ceased duringthe year ended 30 September 2007. The results of these associated undertakingshave been classified as discontinued operations. The investment in Complete wasdisposed of in December 2006 and the investment in MEM was written off when MEMwent into administration in July 2007. Divisional Analysis 2007 2006Turnover £'000 £'000--------------------------------------------------------------------------------Creative Technology 17,050 -Full Service 7,328 -Broadcast 8,798 281Head Office - 100--------------------------------------------------------------------------------Group turnover 33,176 381-------------------------------------------------------------------------------- 2007 2006Profit on ordinary activities before taxation by origin £'000 £'000 --------------------------------------------------------------------------------Continuing operations before goodwill amortisationCreative Technology (140) -Full Service 40 -Broadcast 1,203 42Head Office (543) (404)-------------------------------------------------------------------------------- 560 (362)Goodwill amortisationCreative Technology 41 -Full Service 18 -Broadcast (1) -Head Office - ---------------------------------------------------------------------------------Group operating profit/(loss) - continuing operations 618 (362)Discontinued operationsShare of associates' operating profit before exceptional items 723 1,924Share of associates' operating exceptional items (1,542) ---------------------------------------------------------------------------------Group and share of associates' operating (loss)/profit (201) 1,562Share of associates' non-operating exceptional items 597 -Gain on disposal of associate 31,405 -Impairment of associate (1,057) -Loss on disposal of investment (421) -Net interest receivable and similar items 240 120--------------------------------------------------------------------------------Profit on ordinary activities before taxation 30,563 1,682-------------------------------------------------------------------------------- 2007 2006Net assets by division £'000 £'000--------------------------------------------------------------------------------Continuing operations before goodwillCreative Technology 18,606 -Full Service 6,480 -Broadcast 22,019 6,914Head Office 11,143 74-------------------------------------------------------------------------------- 58,248 6,988GoodwillCreative Technology (183) -Full Service (229) -Broadcast (97) -Head Office - --------------------------------------------------------------------------------- 57,739 6,988Share of associates (discontinued) - 5,889--------------------------------------------------------------------------------Capital employed 57,739 12,877Net debt (8,046) (5,178)Provisions for liabilities and charges (1,412) (512)--------------------------------------------------------------------------------Net assets 48,281 7,187-------------------------------------------------------------------------------- Geographical Analysis Turnover by origin Turnover by destination 2007 2006 2007 2006 £'000 £'000 £'000 £'000--------------------------------------------------------------------------------United Kingdom 18,735 381 17,255 381Mainland Europe 6,470 - 7,717 -United States of America 7,885 - 7,787 -Rest of the World 86 - 417 ---------------------------------------------------------------------------------Group turnover 33,176 381 33,176 381-------------------------------------------------------------------------------- 2007 2006Profit on ordinary activities before taxation by origin £'000 £'000--------------------------------------------------------------------------------Continuing operations before goodwill amortisationUnited Kingdom 891 (362)Mainland Europe 222 -United States of America (419) -Rest of the World (134) --------------------------------------------------------------------------------- 560 (362)Goodwill amortisationUnited Kingdom 19 -Mainland Europe 15 -United States of America 24 -Rest of the World - ---------------------------------------------------------------------------------Group operating profit/(loss) - continuing operations 618 (362)Discontinued operationsShare of associates' operating profit before exceptional items 723 1,924Share of associates' operating exceptional items (1,542) ---------------------------------------------------------------------------------Group and share of associates' operating (loss)/profit (201) 1,562Share of associates' non-operating exceptional items 597 -Gain on disposal of associate 31,405 -Impairment of associate (1,057) -Loss on disposal of investment (421) -Net interest receivable and similar items 240 120--------------------------------------------------------------------------------Profit on ordinary activities before taxation 30,563 1,682-------------------------------------------------------------------------------- 2007 2006Net assets by location £'000 £'000--------------------------------------------------------------------------------Continuing operations before goodwillUnited Kingdom 42,482 6,476Mainland Europe 7,145 -United States of America 8,660 -Rest of the World (39) --------------------------------------------------------------------------------- 58,248 6,476GoodwillUnited Kingdom (352) -Mainland Europe 138 -United States of America (295) -Rest of the World - --------------------------------------------------------------------------------- 57,739 6,476Share of associates (discontinued) - 5,889--------------------------------------------------------------------------------Capital employed 57,739 12,365Net debt (8,046) (5,178)Provisions for liabilities and charges (1,412) ---------------------------------------------------------------------------------Net assets 48,281 7,187-------------------------------------------------------------------------------- 2 Earnings before interest, taxation, depreciation and amortisation ('EBITDA') 2007 2006 £'000 £'000-------------------------------------------------------------------------------- EBITDA on continuing operationsOperating profit before exceptional items and goodwill amortisation 560 (362)Depreciation 4,873 8--------------------------------------------------------------------------------EBITDA on continuing operations* 5,433 (354)-------------------------------------------------------------------------------- Group and share of associates' operating (loss)/profit (201) 1,562Depreciation 4,873 8Goodwill amortisation (58) ---------------------------------------------------------------------------------EBITDA* 4,614 1,570-------------------------------------------------------------------------------- * before non-operating exceptional items. 3 Exceptional items 2007 2006 £'000 £'000-------------------------------------------------------------------------------- Share of associates' restructuring costs (i) (732) -Share of associates' provision for litigation claims (iI) (810) ---------------------------------------------------------------------------------Share of associates' operating exceptional items (1,542) --------------------------------------------------------------------------------- Share of associates' profit on disposal of investments (iii) 597 -Gain on disposal of associate (iv) 31,405 -Impairment of associate (v) (1,057)Loss on disposal of investment (vi) (421) ---------------------------------------------------------------------------------Total non-operating exceptional items 30,524 --------------------------------------------------------------------------------- i) Share of associates' restructuring costs is in respect of our associated undertaking Medal Entertainment & Media plc ("MEM"). These expenses have been treated as tax deductible. ii) Share of associates' provision for litigation claims is in respect of Complete Communications Corporation Limited ("Complete") where provision has been made for outstanding litigation claims both by and against Complete. The tax effect of this item is £nil. iii)Share of associates' profit on disposal of investments is in respect of the profit made by Complete when it sold some of its own subsidiaries just prior to its own sale to 2waytraffic N.V.. The tax effect of this item is £nil. iv) As previously announced, the investment in Complete Communications Corporation Ltd ("Complete") was sold on 20 December 2006 to 2waytraffic N.V. The proceeds were 1,534,162 ordinary shares of €0.01 each in 2waytraffic N.V. issued at a total subscription price of £1.9 million, £9.9 million held in a retention account that is subject to deduction for potential warranty and indemnity claims, £23.0 million in cash (net of expenses) and £1.5 million in cash based on the final net assets of Complete. Additional consideration may also be receivable depending on the outcome of certain litigation in the United States. A gain on disposal of £31.4 million has been recognised in the results to 30 September 2007 but is subject to change pending any future adjustments in respect of the final amount due from the retention account and the results of litigation by and against Complete in progress. The Group's share of the results of Complete has been disclosed within discontinued operations in the consolidated profit and loss account for the pre disposal trading in the year ended 30 September 2007 and for the year ended 30 September 2006. The tax effect of this item is £nil. v) MEM went into administration during July 2007 and so the Group's investment in MEM was deemed impaired and was written off in full at that time creating a loss of £1.1 million. The Group's share of the results of MEM has been disclosed within discontinued operations in the consolidated profit and loss account for the pre administration trading in the year ended 30 September 2007 and for the year ended 30 September 2006. The tax effect of this item is £nil. vi) As reported above, part of the proceeds on the sale of Complete was 1,534,162 ordinary shares of €0.01 each in 2waytraffic N.V. issued at a total subscription price of £1.9 million. This holding was disposed of on 27 September 2007 at a price of 95p per share realising funds of £1.5 million before expenses and creating a loss on the disposal of the investment of £0.4 million. The tax effect of this item is £nil. 4 Taxation Analysis of taxation charge for the year 2007 2006 £'000 £'000--------------------------------------------------------------------------------United Kingdom taxationCorporation tax 108 -Share of associates' current taxation 15 825-------------------------------------------------------------------------------- 123 825Overseas taxationCorporation tax 239 ---------------------------------------------------------------------------------Group and share of associates' current taxation 362 825--------------------------------------------------------------------------------Deferred taxation 370 13Share of associates' deferred taxation - 6--------------------------------------------------------------------------------Group and share of associates' deferred taxation 370 19--------------------------------------------------------------------------------Tax on profit on ordinary activities 732 844-------------------------------------------------------------------------------- 5 Earnings per share Basic earnings per share have been calculated by dividing profit after taxationby the weighted average number of ordinary shares in issue (excluding treasuryshares) during the year. Diluted earnings per share have been calculated by dividing profit aftertaxation by the weighted average diluted number of ordinary shares in issue(excluding treasury shares) during the year. The Group has two classes ofdilutive potential ordinary shares: the share options outstanding under the 1997unapproved executive share option scheme, which do have a dilutive effect, andthe contingently issuable shares under the long term incentive plan, none ofwhich give rise to a dilution in the earnings per share because the performanceconditions attached to them have not yet been met. Adjusted earnings per share have been calculated by dividing profit aftertaxation and excluding goodwill amortisation and exceptional items, by theweighted average number of ordinary shares in issue during the year. TheDirectors consider that the adjusted earnings per share figures provide a usefuladditional indication of performance. Earnings 2007 2006 £'000 £'000-------------------------------------------------------------------------------- Profit/(loss) from continuing operations 132 (322)Profit from discontinued operations 29,699 1,160--------------------------------------------------------------------------------Profit for the year 29,831 838Operating exceptional items 1,542 -Non-operating exceptional items (30,524) -Goodwill amortisation (58) ---------------------------------------------------------------------------------Adjusted earnings 791 838-------------------------------------------------------------------------------- Weighted average number of shares--------------------------------------------------------------------------------For basic earnings per share (000's) 19,853 16,224Effect of dilutive share options (000's) 706 654--------------------------------------------------------------------------------For diluted earnings per share (000's) 20,559 16,878-------------------------------------------------------------------------------- Earnings/(losses) per share--------------------------------------------------------------------------------Basic from continuing operations 0.7p (2.0)pBasic from discontinued operations 149.6p 7.2p--------------------------------------------------------------------------------Basic 150.3p 5.2p-------------------------------------------------------------------------------- Diluted from continuing operations 0.6p (1.9)pDiluted from discontinued operations 144.5p 6.9p--------------------------------------------------------------------------------Diluted 145.1p 5.0p-------------------------------------------------------------------------------- Adjusted basic 4.0p 5.2pAdjusted diluted 3.8p 5.0p-------------------------------------------------------------------------------- 6 Dividends 2007 2006Dividends paid £'000 £'000-------------------------------------------------------------------------------- Interim dividend of 2.5p per share (2006: 2.5p per share) - 405Final dividend of 3.5p per share (2006: 3.5p per share) 568 568--------------------------------------------------------------------------------Total dividend 568 973-------------------------------------------------------------------------------- The final dividend of 3.5p per share proposed in respect of the year ended 30September 2006 was paid on 10 April 2007. An interim dividend for the year ended 30 September 2007 of 2.5p per share waspaid on 1 October 2007. A final dividend for the year ended 30 September 2007 of 3.5p per share has beenproposed and, subject to shareholders' approval, will be paid on 7 April 2008 toshareholders on the register at close of business on 7 March 2008. 7 Analysis of net debt At 1 Other Currency At 30 October Cash non-cash translation September 2006 flow Acquisition changes differences 2007 £'000 £'000 £'000 £'000 £'000 £'000------------------------------------------------------------------------------------------- Cash at bank and in hand 322 5,233 3,035 - 61 8,651Bank overdrafts - 859 (1,036) - 2 (175)-------------------------------------------------------------------------------------------Net cash 322 6,092 1,999 - 63 8,476 Bank loans due in less than one year (5,500) 5,705 (1,098) (202) 21 (1,074)Bank loans due in more than one year - - (3,593) 202 67 (3,324)Hire purchase obligations due in less than one year - 138 (4,671) (1,735) 28 (6,240)Hire purchase obligations due in more than one year - (3,466) (4,180) 1,735 27 (5,884)--------------------------------------------------------------------------------------------Net debt (5,178) 8,469 (11,543) - 206 (8,046)-------------------------------------------------------------------------------------------- 8 Acquisition of Avesco plc The acquisition by InvestinMedia plc of Avesco plc completed on 17 May 2007. Oncompletion of the acquisition, the name of the Company was changed to "AvescoGroup plc". The acquisition was satisfied by the issue of 9,669,602 new AvescoGroup plc ordinary shares of 10p each and a total cash consideration of£7,289,619. The Company now has 25,985,899 shares in issue of which 92,500 wereheld in treasury at 30 September 2007. 9 Status of preliminary announcement The preliminary results for the year to 30 September 2007 are unaudited. Thefinancial information set out in the announcement does not constitute theGroup's statutory accounts for the year ended 30 September 2007. The statutory accounts for the year to 30 September 2007 will be finalised onthe basis of the financial information presented by the Directors in thispreliminary announcement and will be delivered to the Registrar of Companiesfollowing the Company's Annual General Meeting. Statutory Accounts for the year ended 30 September 2006 have been delivered tothe Registrar of Companies and the auditors' report on these accounts wasunqualified and did not contain a statement under either Section 237(2) or (3)of the Companies Act 1985. 10 Basis of Preparation The preliminary results for the year ended 30 September 2007 have been preparedin accordance with the accounting policies set out in the annual report andaccounts for the year ended 30 September 2006 with the following exceptions. The adoption of FRS 20 "Share-based payment" resulted in the September 2006 yearend numbers being restated to recognise an additional charge to the profit andloss account of £197,000 in respect of outstanding share options. The chargecomprises £73,000 in respect of the equity value, the other side of which is acredit to reserves, and £124,000 in respect of the National Insurance accrual onthese options. The total recognised gains and losses since the last annualreport include an adjustment of £339,000 in respect of FRS20 which comprises the£197,000 for the year ended 30 September 2006 and a further £117,000 and £25,000for the respective equity and National Insurance charges for earlier periods. Inthe year ended 30 September 2007, the profit and loss account was charged£30,000 in respect of the equity value and credited with £68,000 in respect ofthe National Insurance accrual due to the Company's lower closing share price. Treasury shares of £91,000 (2006: £91,000) have been reclassified as a deductionagainst the profit and loss account as required by FRS 25 "FinancialInstruments: Disclosure and presentation". 11 Annual General Meeting The Annual General Meeting of the Company will be held at 10.00am on 6 March2008 at Unit E2, Sussex Manor Business Park, Gatwick Road, Crawley, West Sussex,RH10 9NH. 12 Annual Report and Accounts Copies of the full Statutory Accounts will be dispatched to shareholders in duecourse. Copies will also be available on the Company's website (www.avesco.co.uk) and from the registered office of the Company: Unit E2, Sussex Manor BusinessPark, Gatwick Road, Crawley, West Sussex, RH10 9NH. This information is provided by RNS The company news service from the London Stock Exchange