BONH.L Regulatory News (BONH)

25 Apr 2005 07:00

Vitesse Media PLC25 April 2005 Vitesse Media Plc PRELIMINARY RESULTS FOR THE YEAR ENDING 31 JANUARY 2005 Vitesse Media plc, the Aim-listed online, print publishing and events companyspecialising in growing businesses, announces its preliminary results for theyear ending 31 January 2005. Highlights •Revenues up 36 % to £2.29 million (2004: £1.69 million) •First annual profit (pre-tax, pre-impairment profit of £16,591, 2004: loss of £135,883) •Cash at bank and in hand at year end over £700k (2004: over £300k) •Cash flow from operating activities £144k •Deferred income further increased at the year end at £292k (2004: £226k) •Major new and highly profitable awards event, and a further awards event acquired •Event management business acquired and now fully integrated within the business •Major investment has begun in the infrastructure of the business with the intention of providing a platform for the next growth phase •Commenced programme totally overhauling all aspects of existing websites, with a view to driving further internal efficiencies as well as improving the marketing of the sites •Substantial investment in new products, a series of events capitalising on brand names, and databases will provide a platform for profits growth over the next two to three years •Major media investor, the Ingram family, invested £500k to provide funding for the investment in infrastructure, websites and new products, as well as to provide a war chest for small acquisitions •Board was strengthened with the appointment of a new non-executive director, Chris Ingram, founder of Tempus and The Ingram Partnership. BUSINESS REVIEW FOR PAST AND CURRENT YEAR I am very happy with the progress that the group has made in this financialyear, delivering a pre-exceptional profit for the first time, launching a majornew event in the quoted company calendar, as well as undertaking a considerableinvestment programme, despite feeling the impact from Lloyds TSB BusinessBanking's decision to end its support for the Small Business Guide. The group has been reorganised along brand names into six areas of activity:Growth Company Investor, Business XL, SmallBusiness.co.uk, GrowthBusiness.co.uk,Event Management and Other Products. This is to focus the drive of the businesson developing those products with the greatest potential. Growth Company Investor We include in this area subscription and advertising income for the magazine,websites, The Aim Guide, research reports published under this brand name andevents promoted by the title. Revenues for 2004/5 rose 43% to £780k, compared to£547k. The redesign of the core magazine was well received by professionals and thedrive of the business continues to be to improve the income derived from thatsource. A major redevelopment and redesign of the associated websites (www.GrowthCompany.co.uk and www.SmallCompanies.co.uk) has begun in the currentfinancial year and we expect this to lead to a significant reduction in theadministration workload of the subscription team as well as to an improvement inour ability to market the product online. The magazine/website provides originalcoverage on around 1,700 companies and this should be reflected in trafficvolumes bringing visitors to the site to be made aware of our product, leadingto a commensurate rise in subscription income. Recently we undertook qualitative research among professionals looking at allaspects of the magazine and websites. The results were extremely flattering, butnevertheless highlighted points that we could work on, from both an editorialand revenue perspective, which would further enhance the business. During thecurrent year, a determined subscriptions campaign amongst corporates andprofessionals will be rolled out. We are absolutely delighted with the launch of our first-ever Quoted CompanyAwards (www.QuotedCompanyAwards.com). The event was supported by London StockExchange, Aim, Quoted Companies Alliance and Financial Mail on Sunday, as wellas many highly-rated professional firms, including Grant Thornton, Evolution andKBC Peel Hunt. The dinner sold out two months before it was held and the eveningwas much enjoyed by all. During the current year, in June, we are launching a day-long show to provide ashowcase for quoted companies to institutional, professional and high net worthprivate investors (www.GrowthCompany.co.uk/show) and expect this to become anexciting landmark day in the quoted company calendar. The event is supported bythe London Stock Exchange, Quoted Companies Alliance and APCIMS amongst others,and will end with our prestigious Growth Company Awards, which will be stagedfor the fifth successive year. Since inception, the group has developed a database which fuels the work wecarry out in The Aim Guide, Growth Company Investor and our research reports. Weare analysing how this unique database can be exploited financially. Business XL Revenues for Business XL and its associated products were £514k for 2004/5,compared to £188k for the previous year. There is some evidence that strongergrowth will be experienced in 2005, the first two issues of 2005 showing anincrease in advertising income. Part of this is due to improving marketconditions and part to an increased recognition of the importance of this title,compared to competitive titles. Ten issues of Business XL were published during 2004, compared to six theprevious year. We also launched a series of seminars, Growth Cycle Seminars,during the year. In the current financial year, Business XL Live has organised ahighly successful and thought-provoking summit in the media sector (www.MediaAndMoney.co.uk). Further events under the Business XL brand name are atan advanced stage of development and are likely to be launched during theautumn. During the year, we purchased a majority share in Investor All Stars from itsfounders GP Capital, running the event in partnership with them. The awardsevent for the venture capital industry showed significant growth over theprevious year, with both audience and sponsorship income demonstrating anincrease of 94%. Further opportunities exist to exploit this event more fully. SmallBusiness.co.uk Revenues for this highly profitable website continue to show a strong increase,up 53% on the previous year. Traffic to the site also shows a substantialimprovement with a near-doubling of visitors, for example, in March 2005compared to 2004. Business Go, our email newsletter, was redesigned during theyear and is now received by over 23,000 small businesses. During the second half of this current financial year, the website will becompletely redeveloped, extending its range and providing a platform to continueits development during the next two to three years. We are also researching howwe can exploit its name through other media. GrowthBusiness.co.uk As the first in our web redevelopment programme and following its relaunch inJanuary 2005, the site is attracting on average almost 1,000 visitors a day.Several strong brand names are now advertising on the site and early indicationsare that they find this a very successful new marketing outlet for theirproducts. Event management During the 2004/5 financial year we completed the acquisition of the business ofOne Events. The events team moved into our offices during November 2004 andthree further members have been added, bringing the team up to eight.Integration of the business has occurred and is now well-established. The teamare heading up the drive to create our own events and exploit our brand names,while maintaining a stream of income from managing events in the financial,health care and life sciences fields. Other products This area includes the Small Business Guide and Tax Guide, TheWrongPrice.com (aninvestor website) and an email investor newsletter, Peter Shearlock's Small CapStock Picks. There has been a fall in revenue in 2004/5 (£523k) compared to theprevious year (£743k), all of this attributable to the reduced purchases of theSmall Business and Tax Guides by Lloyds TSB. Further falls will occur in thecurrent year. We are currently in negotiations with two other organisations tomaximise the revenues from these highly-regarded products and also re-examiningwhether we should continue to publish these products direct ourselves. Topresent a prudent view of our finances, we have taken the decision to write downthe publishing rights in our balance sheet attributed to these two products by£433k during our impairment review. Outlook for the current and future years We are confident that the group will deliver further strong sales growth duringthe current financial year. However, the effect of the lower revenue from theSmall Business Guide will all be felt in the first half of the current financialyear. For the year as a whole we expect to show an improvement at the bottomline compared to the financial year 2004/5. The major investments we are making in infrastructure, websites and brandextensions and the refocusing of our efforts on just four products should leadto significant growth in both revenues and profits over the medium term. Finally, we continue to pursue opportunities for acquisitions as they emerge. Wenow have some experience of integrating acquisitions that involve a team ofpeople as well as products. The management team considers that we can nowdevelop some more ambitious acquisition ideas, provided that we can satisfyourselves that they will deliver shareholder value. CONSOLIDATED PROFIT AND LOSS ACCOUNTfor the year ended 31 January 2005 2005 2005 2005 2004 Impairment Results of before publishing impairment rights Total £ £ £ £ TURNOVER- continuing operations 1,991,961 - 1,991,961 1,686,895- acquisitions 294,807 - 294,807 - --------- --------- --------- --------- 2,286,768 - 2,286,768 1,686,895 Cost of sales (796,075) - (796,075) (499,166) --------- --------- --------- --------- GROSS PROFIT 1,490,693 - 1,490,693 1,187,729 Administrative expenses - (433,408) (433,408) (65,431)- exceptional- other (1,479,684) - (1,479,684) (1,258,800) --------- --------- --------- --------- OPERATING PROFIT/(LOSS)- continuing operations (64,113) (433,408) (497,521) (136,502)- acquisitions 75,122 - 75,122 - --------- --------- --------- --------- TOTAL OPERATING PROFIT/(LOSS) 11,009 (433,408) (422,399) (136,502) Interest receivable 9,338 - 9,338 6,622Interest payableand similar charges (3,756) - (3,756) (6,003) --------- --------- --------- --------- PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORE TAXATION 16,591 (433,408) (416,817) (135,883) Taxation - - - (1,733) --------- --------- --------- --------- PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTER TAXATION 16,591 (433,408) (416,817) (137,616) ========= ========= ========= ========= EARNINGS/(LOSS) PER SHAREBasic (3.08p) (1.06p)Diluted (3.08p) (1.06p)Basic before exceptionaladministrative expenses 0.12p (0.56p)Diluted before exceptionaladministrative expenses 0.12p (0.56p) ========= ========= The results for the year ended 31 January 2004 included turnover and operatingloss arising from discontinued operations of £12,185 and £28,475 respectively. 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. CONSOLIDATED BALANCE SHEET31 January 2005 2005 2004 £ £ FIXED ASSETSIntangible assets 383,837 664,913Tangible assets 118,806 66,286 --------- --------- 502,643 731,199 --------- --------- CURRENT ASSETSDebtors 527,952 224,519Cash at bank and in hand 716,109 311,831 --------- --------- 1,244,061 536,350 CREDITORS: Amounts falling due within one year (745,162) (400,062) --------- --------- NET CURRENT ASSETS 498,899 136,288 --------- --------- TOTAL ASSETS LESS CURRENT LIABILITIES 1,001,542 867,487 CREDITORS: Amounts falling due after more than oneyear (5,567) (24,476) DEFERRED INCOME (292,270) (226,362) --------- --------- NET ASSETS 703,705 616,649 ========= ========= CAPITAL AND RESERVESCalled up share capital 1,513,117 1,299,284Share premium account 1,215,070 925,030Other reserves 103,904 103,904Profit and loss account (2,128,386) (1,711,569) --------- --------- EQUITY SHAREHOLDERS' FUNDS 703,705 616,649 ========= ========= CONSOLIDATED CASH FLOW STATEMENTfor the year ended 31 January 2005 2005 2004 £ £ Cash flow from operating activities 144,386 (49,523) Returns on investments and servicing of finance 5,582 619 Capital expenditure (60,896) (27,982) Acquisitions (149,489) - -------- -------- CASH OUTFLOW BEFORE USE OF LIQUID RESOURCES AND FINANCING (60,417) (76,886) Management of liquid resources (347,454) 14,119 Financing 464,695 (13,539) -------- -------- INCREASE/(DECREASE) IN CASH IN THE YEAR 56,824 (76,306) ======== ======== RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2005 2004 £ £ Increase/(decrease) in cash in the year 56,824 (76,306) Cash outflow from decrease in debt and lease financing 39,178 37,571 Cash outflow/(inflow) from change in liquid resources 347,454 (14,119) -------- ------- Change in net funds arising from cash flows 443,456 (52,854) New hire purchase contract (11,377) - -------- ------- MOVEMENT IN NET FUNDS IN YEAR 432,079 (52,854) NET FUNDS AT 1 FEBRUARY 2004 250,176 303,030 -------- ------- NET FUNDS AT 31 JANUARY 2005 682,255 250,176 ======== ======= NOTESfor the year ended 31 January 2005 1. The financial information contained in this document does not constitute statutory accounts within the meaning of section 240 Companies Act 1985. The figures for the year ended 31 January 2005 have been extracted from the annual accounts in respect of which the auditors have not yet signed their audit report. The audited statutory accounts for the year ended 31 January 2004 have been extracted from the audited statutory accounts for that year which have been filed with the Registrar of Companies and received an unqualified auditors' report which did not contain a statement under section 237(2) or (3) Companies Act 1985. 2. The accounting policies adopted are consistent with those used in previous years. 3. EARNINGS/(LOSS) PER SHARE The calculation of earnings/(loss) per share are based on the following profits/(losses) and numbers of shares. 2005 2004 £ £ Profit/(loss) for the financial year beforeexceptional administrative expenses 16,591 (72,185)Exceptional administrative expenses (433,408) (65,431) --------- --------- Loss for the financial year (416,817) (137,616) ========= ========= Weighted average number of shares 2005 2004 No No For basic earnings/(loss) per shares 13,550,109 12,992,844Dilutive effect of share options 333,091 - --------- --------- For diluted earnings/(loss) per share 13,883,110 12,992,844 ========= ========= 4. SHARE CAPITAL 2005 2004 £ £Authorised:20,000,000 ordinary shares of 10p each 2,000,000 2,000,000 ======== ========= Allotted, issued and fully paid:15,131,177 (2004: 12,992,844) ordinary shares of 10peach 1,513,117 1,299,284 ======== ========= Share issues: On 11 March 2004 the company allotted 55,000 ordinary shares pursuant to anexercise of options by a former director. These options were granted at a shareprice of 12.56p per share and the exercise generated cash consideration of£6,908. On 4 November 2004 the company allotted 2,083,333 ordinary shares for total cashconsideration of £500,000 to provide additional working capital. 5. CASH FLOWS 2005 2004 £ £ a Reconciliation of operating loss to net cash flow from operating activities Operating loss (422,399) (136,502) Depreciation 36,910 33,153 Impairment of intangible fixed assets 433,408 - Loss on sale of fixed assets - 7 (Increase)/decrease in debtors (303,433) 14,355 Increase in creditors 333,992 90,466 Increase/(decrease) in deferred income 65,908 (51,002) ------- -------- Net cash flow from operating activities 144,386 (49,523) ======= ======== b Analysis of cash flows for headings netted in the 2005 2004 cash flow £ £ Returns on investments and servicing of finance Interest received 9,338 6,622 Interest paid (3,756) (6,003) -------- -------- Net cash inflow from returns on investments and 5,582 619 servicing of finance ======== ======== Capital expenditure Purchase of tangible fixed assets (60,896) (28,411) Sale of tangible fixed assets - 429 -------- -------- Net cash outflow from capital expenditure (60,896) (27,982) ======== ======== Acquisitions Purchase of businesses (149,489) - -------- -------- Net cash outflow for acquisitions (149,489) - ======== ======== Financing Refund of VAT on issue costs - 24,032 Repayment of long term bank loan (36,050) (33,951) Capital element of hire purchase contracts (3,128) (3,620) Share issues (net of expenses) 503,873 - -------- -------- Net cash inflow/(outflow) from financing 464,695 (13,539) ======== ======== c Analysis of net funds At Other non At 1 February cash 31 January 2004 Cash flow changes 2005 £ £ £ £ Cash in hand, at bank 63,015 56,824 - 119,839 Bank deposits 248,816 347,454 - 596,270 --------- -------- -------- -------- 311,831 404,278 - 716,109 Debt due within 1 year (37,017) 37,017 (25,443) (25,443) Debt due after 1 year (24,476) (967) 25,443 - Hire purchase contracts (162) 3,128 (11,377) (8,411) --------- -------- -------- -------- (61,655) 39,178 (11,377) (33,854) --------- -------- -------- -------- Total 250,176 443,456 (11,377) 682,255 ========= ======== ======== ======== 6. This preliminary announcement was approved by the Board on 22 April 2005. Copies of this announcement are available at the office of the company's nominated advisor KBC Peel Hunt plc at the address below. The Annual General Meeting will take place at the offices of KBC Peel Hunt at 111 Old Broad Street, London EC2N 1PH at 2pm on 1 July 2005. This information is provided by RNS The company news service from the London Stock Exchange