CTEA.L Regulatory News (CTEA)

30 Jun 2006 13:43

Milestone Group PLC30 June 2006 For Immediate Release 30 June 2006 MILESTONE GROUP PLC RESULTS FOR THE SIX MONTHS ENDED 31st MARCH 2006 Milestone Group PLC ("Milestone"), the AIM-listed media group, today announcesits results for the six months ended 31st March 2006. Financial Highlights •Group turnover on operating activities: £1.8m (2005: £2.4m) •Gross profit: £0.5m (2005: £0.9m) •Operating loss before goodwill: £1.2m (2005: £1.0m) •Basic and diluted loss: 6.4p (2005: 5.1p) Strategic Review & Post-Balance Sheet Events •All four Milestone radio stations disposed of for aggregate consideration of £2.3m •Board in discussion with potential new strategic partners Commenting on the strategic review, Andy Craig, Chief Executive, said: "The Board has received indications from a number of parties that they may beinterested in acquiring some or all of the group's assets, or become partners indeveloping the business. The Board is carefully evaluating all options and hopesto be in a position to report back to shareholders in the near future." For further information: Milestone Group PLC Tel: 01235 547 800Andy Craig, Chief Executive Arden Partners Limited Tel: 020 7398 1632Richard Day Buchanan Communications Tel: 020 7466 5000Bobby Morse/Suzanne Brocks Attached: Chairman's Statement Chief Executive's Review Unaudited Consolidated Profit & Loss Account Unaudited Consolidated Balance Sheet Unaudited Consolidated Cashflow statement Notes to the interim financial information Milestone Group PLC________________________________________________________________________________ Results for the six months ended 31 March 2006 Chairman's Statement Since my appointment as Chairman on 31 January 2006, I have been pleased toparticipate in a comprehensive streamlining of the business. Following the disposal of the remainder of the radio division this month, thegroup is now focused on maximising value from its remaining operationalbusinesses: •Courier Newspapers (Oxford) Limited - publishes Courier Journal, Property Weekly, Oxfordshire Living •Basingstoke Observer Limited - publishes Basingstoke Observer •Oxford Broadcasting Limited (trading as SIX TV) - operates SIX TV Oxford and SIX TV Southampton The Board is currently proceeding with constructive discussions with a number ofparties who have expressed a desire in developing the group's assets. Atpresent, there are a variety of opportunities which the Board are carefullyexamining. The Board hopes to be in a position to make further announcements indue course. John Sanderson Chairman 30 June 2006 Milestone Group PLC________________________________________________________________________________ Results for the six months ended 31 March 2006 Chief Executive's Review Whilst the current trading environment remains challenging for local mediaoperators across much of the industry, the Board strongly believes thatMilestone's remaining assets are well positioned for growth. The Boardrecognises that the group is most likely to require additional scale andresource in order to fully achieve its growth potential. As such, the Boardcontinues to be firmly focused on the process of reviewing all options tomaximise value for shareholders. Advertising revenues from internet platforms are growing in the UK at theexpense of traditional platforms. The Milestone Board is advancing with plans touse the skills and expertise of the group in local media delivery to developdigital revenue streams to complement its existing print assets. The Board feelscross media revenues obtained from the development of digital platforms arelikely to substantially feed through to the bottom line over the coming year. Publishing •Division sales: £1,200,000 (2005: £1,530,000) •Division loss: £366,000 (2005: £264,000) With the Milestone radio assets transferred out of the group, the Company isbetter placed to focus management time and resource on the most significantcontributor to annual turnover - publishing. Milestone's senior management arenow directly overseeing the publishing operation, working in particular toimplement new initiatives in sales at the same time as addressing costs. Property Weekly has, for a long time, been Milestone's most profitable business,providing around half of all publishing division turnover in Oxfordshire andmaking a positive contribution in excess of £100k profit per annum (such aconservative figure makes a number of prudent assumptions about theapportionment of distribution, premises and staffing costs within the publishingdivision as a whole). Milestone is committed to supporting and enhancing its Property Weekly titles: •Property Weekly launched its first ever edition for Newbury and West Berkshire on 11 May 2006. Under the direct control of the group's senior management, Newbury Property Weekly has been profitable from week one and demonstrates the power of the resource available to the group when fully exploited. •Property Weekly now operates websites in Oxfordshire, West Berkshire and North Hampshire, offering significant "added value" to estate agent clients Management expect the continued decline in revenue across all titles to impacton the results for the financial year. Management are focused on exploring allopportunities to reduce costs and to return the division to profitability. Radio •Rugby FM sales to 28/02/06: £181,000 (2005 half-year: £236,000) •Rugby FM loss to 28/02/06: £37,000 (2005 half-year profit of £8,000) •Kestrel FM sales to 17/02/06: £204,000 (2005 half-year: £279,000) •Kestrel FM loss to 17/02/06: £7,000 (2005 half-year loss of £383) •Kick FM sales to 17/02/06: £100,0000 (2005 half-year: £194,000) •Kick FM loss to 17/02/06: £60,000 (2005 half-year loss of £47,000) •Passion 107.9 sales: £75,000 (2005 half-year: £79,000) •Passion 107.9 loss: £156,000 (2005 half-year loss of £123,000) Following a comprehensive review of strategy, the Board realistically concludedthat the group's analogue radio assets, despite achieving good audience levels,were nevertheless likely to require substantial additional investment to furthergrow. Over the past four months, Milestone has disposed of its entire radio division,successfully achieving an aggregate consideration for its four stations (onlyone of which was wholly-owned) of £2.3m. This consideration is in addition tothe £1.8m secured by the Company for the disposal of its interests in threeother small scale radio stations in the last two financial years. The Board believes that the disposal of the group's loss making radio divisionrepresents the best interests of shareholders and, furthermore, that theconsideration achieved reflects well given the current depressed media market. The Board has used the proceeds from the strategic disposal of its non-coreradio assets, as set out below, to substantially assist in paying down existingborrowing and providing for general working capital purposes of the group. Disposals this financial year: Company Station Coverage Milestone Consideration achieved for Date of Name Area beneficial disposal of Milestone disposal ownership shares and loans (approx.) prior to disposalPassionRadio(Oxford) Passion Oxford / 100 per £300,000 07/06/06Limited* 107.9 south cent. OxfordshireRugbyBroadcastingCompanyLimited Rugby Rugby, 52 per £645,000 28/02/06 FM Warwickshire cent.WestBerkshire Kick FM Newbury, 55 per £658,000 17/02/06Radio Berkshire cent.LimitedKestrel FMLimited Kestrel Basingstoke, 54 per £704,000 17/02/06 FM Hampshire cent. *Passion Radio (Oxford) Limited was disposed of following the end of the periodin June 2006 Disposals in previous financial years: ReadingBroadcastingCompanyLimited Reading 107 Reading, Berkshire 37 per cent. £514,000 24/08/05 FM Time FM Time FM Thamesmead, SE 100 per £625,000 15/01/04Limited London cent. Fusion 107.3FM Limited Fusion 107.3 Lewisham, SE London 100 per cent. £625,000 15/01/04 Television •Division sales: £76,000 (2005: £111,000) •Division loss: £97,000 (2005: £169,000) Management are pleased with the progress being made in the division. Inparticular, losses have fallen further in recent weeks following theimplementation of a comprehensive review of all costs. Over the coming monthsthe Company expects to further enhance revenues from the launch of new shoppingand quiz programming initiatives. Milestone remains at the forefront of the long-term lobbying for digitalterrestrial licences for local television services. Milestone is contributing toOfcom's digital dividend review assessing the options for the use of spectrumreleased by the UK-wide switchover to digital TV transmissions. With home broadband connections set to become the norm, new Internet ProtocolTelevision services are widely expected to further develop. Milestone isadvanced in discussions with a wireless internet provider in Oxfordshire toprovide a "SIX TV" branded IPTV channel, available to anyone with a broadbandconnection in the county. The Board believes that services from existingtraditional TV brands will be in the strongest position to market themselves toconsumers and direct traffic to their new broadband services. Developing Digital Platforms A cross media model serving discreet local markets provides the building blocksfor a comprehensive local broadband internet platform. With digital movingpictures and digital print content in abundance, Milestone intends to developprime local sites for news, information and local commerce. As a major contentproducer in its markets, Milestone will cautiously seek to exploit new digitaldelivery channels providing greater penetration and value for advertiserswherever this can be seen to improve yield and profitability for the group. Strategic Review The original intention, in floating Milestone, was to develop a listed mediavehicle that could be attractive to both existing and new investors seeking toexpand in UK media. We have received what appears to be strong interest inrecent weeks from a number of parties seeking to either acquire Milestone and/orits assets, or to form a strategic partnership to significantly develop thebusiness. The Board will be appraising these preliminary interests as apriority. Milestone retains a number of unique selling points: •Well established local newspapers based in and around Oxford and Basingstoke •An AIM listed vehicle with expertise in exploiting intellectual property across multiple channels of delivery including new media •Southern England's only terrestrial truly local TV operator with popular and well established channels in Oxford and Southampton (the latter now making a positive cash contribution) In view of current ongoing discussions with potential strategic partners inrelation to valuation of the group's businesses, the Board has reviewed thegoodwill carrying values and decided that no further impairment is appropriatewithin the publishing division at this stage. Finance On 31 January 2006, the group entered into a funding arrangement with ManchesterSecurities Corporation, a connected company of Elliott International L.P. andElliott Associates L.P., substantial shareholders in the Company. The proceedsfrom the radio asset sales were used in part to repay the group's debts toManchester Securities. Outlook Whilst the Company is starting to make significant cost savings from thedisposal of the group's loss-making radio assets, deteriorating revenues inpublishing will impact on the bottom line results for the year. The Boardintends to seek to reduce the Company's continued dependence on finance fromshareholders or asset disposals to provide working capital. Consequently, theBoard is exploring all opportunities to maximise shareholder value. The Board isin discussion with a number if interested parties and hopes to be in a positionto report back to shareholders on the outcome of these discussions in the nearfuture. Andy Craig Chief Executive 30 June 2006 Milestone Group PLC Interim Report Consolidated profit and loss account for the six month period ended 31 March2006 ----------------- ------ ---------- --------- ---------- Unaudited Unaudited Audited Six months Six months Year ended Ended Ended 30 September Note 31 March 2006 31 March 2005 2005 £ £ £Turnover 1,762,883 2,358,732 4,469,261 Cost of sales (1,300,897) (1,448,537) (2,925,009) --------- ---------- Gross Profit 461,986 910,195 1,544,252 Distribution costs (55,295) (61,203) (118,375)Administrative expenses: ---------- --------- ----------Impairment of goodwill (557,138) - (3,316,960)Other administrative expenses (1,817,229) (2,167,010) (3,956,054) ---------- --------- ---------- (2,374,367) (2,167,010) (7,273,014) --------- ---------- (1,967,676) (1,318,018) (5,847,137) Other operating income 445 10,340 13,826 ---------- Group operating loss (1,967,231) (1,307,678) (5,833,311) Share of operating loss inassociated undertakings - (98,239) (171,253)Profit/(Loss) on disposal ofgroup operations 2 180,796 - (365,360) Loss on ordinary activitiesbefore interest (1,786,435) (1,405,917) (6,369,924) Interest receivable -group 457 15,097 26,093Interest receivable associatedundertakings 285 354Interest payable - group (45,854) (22,258) (102,998)Interest payable - associatedundertakings (12,552) (23,042) Loss on ordinary activitiesbefore taxation (1,831,832) (1,425,345) (6,469,517) Taxation on loss from ordinaryactivities 3 - - - Loss on ordinary activitiesafter (1,831,832) (1,425,345) (6,469,517)taxationMinority interest 47,852 17,489 49,902 --------- ----------Loss for the financial period (1,783,980) (1,407,856) (6,419,615) ========== ========= ==========Basic and diluted loss per 4 (6.4) p (5.16) p (25.6)pshare ========== ========= ========== Apart from the activities disclosed in note 12 all activities are continuing.All recognised gains and losses are included in the profit and loss account. Milestone Group PLC Interim Report Consolidated balance sheet at 31 March 2006 -------------- ----- ---------------- ---------------- -------------- Unaudited Unaudited Audited 31 March 2006 31 March 2005 30 September 2005 Note £ £ £ £ £ £ Fixed assetsIntangible 5 2,475,212 8,390,484 4,777,799assetsTangible 496,679 912,302 752,594assetsFixed assetinvestments 22,529 962,306 22,529 ---------- --------- -------- 2,994,420 10,265,092 5,552,922Current assetsDebtors 770,369 1,313,096 1,023,910Cash at bankand in 718,066 1,499,257 680,815hand --------- --------- -------- 1,488,435 2,812,353 1,704,725Creditors:amountsfalling dueWithin one (1,321,513) (2,932,706) (2,138,448)year --------- --------- -------- Net currentassets/ 166,922 (120,353) (433,723)(liabilities) ---------- --------- -------- Total assetsless 3,161,342 10,144,739 5,119,199currentliabilities Creditors:amountsfalling due (4,192) (137,862) (133,970)aftermore than oneyear Provisions forliabilitiesand (22,523) - (22,523)charges ---------- --------- -------- 3,134,627 10,006,877 4,962,706 ========== ========= ======== Capital andreservesCalled upshare 6 2,760,510 2,760,510 2,760,510capitalShare premiumaccount 7 7,692,985 7,692,985 7,692,985Merger reserve 7 11,119,585 11,119,585 11,119,585Profit andloss 7 (18,438,453) (11,642,713) (16,654,472)account ---------- --------- -------- Equityshareholders' 3,134,627 9,930,367 4,918,608funds Minority - 76,510 44,098interests ---------- --------- -------- 3,134,627 10,006,877 4,962,706 ========== ========= ======== Milestone Group PLC Interim Report Consolidated cash flow statement for the six month period ended 31 March 2006---------------- ------ -------------- -------------- -------------- Unaudited Unaudited 31 Audited March 2005 31 March 2006 30 Sept 2005 Note £ £ £ £ £ £ Net cash outflowfromoperating 8 (931,465) (828,491) (1,599,691)activities Returns oninvestments andservicing offinanceInterest 457 15,097 26,093receivedInterest paid (45,854) (22,258) (102,998) -------- ------- --------- Net cash(outflow) fromreturns on (45,397) (7,161) (76,905)investment andservicing offinance TaxationUK corporation - - -tax CapitalexpenditurePurchase oftangible fixed (1,738) (10,796) (15,166)assetsReceipts fromsale of 500 - -tangible fixedassetsNet cash(outflow) fromthe purchase and (1,238) (10,796) (15,166)disposalof fixed assets Acquisitions anddisposalsProceeds fromdisposal of 1,947,175 - 514,768group operationsCash disposed ofwith group (98,667)operationsCost of disposalof group (174,611) - -operations. -------- ------- --------- Net cash inflowfrom 1,673,897 - 514,768acquisitions and -------- -------- --------disposals Cash Inflow(outflow) 695,797 (846,448) (1,176,994)before financing FinancingIssue of share - 1,100,000 1,100,000capitalCost of issuingshare - (79,250) (79,250)capitalLoan repayments (1,208) (1,135) (2,501)Capital elementof finance (4,676) (5,629) (15,815)leases repaidRepayments/advances underinvoice (276,883 ) - 283,321discountingagreements -------- -------- --------Cash (outflow)/inflow from (282,767) 1,013,986 1,285,755financing ======== ======== ========Increase in cashin the 9,10 413,030 167,538 108,761period ======== ======== ======== Milestone Group PLC Interim Report Notes to the Interim financial information for the six month period ended 31March 2006 1 Basis of preparation The Interim Report was approved by the Board of Directors on 30 June 2006. The financial information contained in this Interim Report has been prepared onthe basis of the accounting policies set out in the Group's audited accounts forthe year ended 30 September 2005. The financial information for the six months ended 31 March 2006 and 31 March2005 is un-audited. The financial information for the Group set out above does not constitute"statutory accounts" within the meaning of Section 240 of the Companies Act1985. The comparatives for the full year ended 30 September 2005 are not theCompany's full statutory accounts for that year. A copy of the statutoryaccounts for that year has been delivered to the Registrar of Companies. Theauditors' report on those accounts had reference to a fundamental uncertainty inrespect of going concern but was unqualified and did not contain a statementunder section 237(2)-(3) of the Companies Act 1985. 2 Profit on disposal of group operations On 17th February 2006 Milestone completed the disposal of its 54 per cent.beneficial interest in Kestrel FM Limited ("Kestrel FM") and assignment ofrelated shareholder loans; and its 55 per cent. beneficial interest in WestBerkshire Radio Limited ("Kick FM") and assignment of related shareholder loans.Consideration was £1,362,214 with an initial sum of £1,302,214 received and aretention of £60,000 to be held until 30th September 2006. On 28th February 2006 Milestone completed the disposal of its 52 per cent.beneficial interest in Rugby Broadcasting Company Limited ("Rugby FM"). TheCompany received gross proceeds from the sale of its controlling shareholdingsof approximately £645,000. The total profit on disposal of operations recognised in the period ended 31March 2006 was £180,796. During the period ended 31 March 2005 there was nodisposal of Group Operations. 3 Taxation Deferred tax assets have not been recognised on the basis that their futureeconomic benefit is not certain. 4 Loss per share Basic loss per share has been calculated in accordance with FRS 22. Basic lossper share has been calculated by dividing the loss on ordinary activities beforetaxation by the weighted average number of ordinary shares in issue during theperiod. The weighted average number of equity shares in issue was 27,605,095 andthe loss was £1,783,980. The effect of all potential ordinary shares isantidilutive. Unaudited Unaudited Audited Six months Six months Year ended ended ended 31 March 2006 31 March 2005 30 September 2005Basic and diluted loss per share:Continuing activities (5.4) p (4.6) p (24.0) pDiscontinued activities (1.0) p (0.56) p (1.6) p Milestone Group PLC Interim Report Notes to the Interim financial information for the six month period ended 31March 2006 (continued) 5 Intangible assets Goodwill on Consolidation £Cost At 1 October 2005 14,347,031Disposals (10,625,711) ----------At 31 March 2006 3,721,320 ==========Amortisation and ImpairmentAt 1 October 2005 9,569,232Provided for the period 730,568Disposals (9,053,692) ---------- At 31 March 2006 1,246,108 ==========Net book valueAt 31 March 2006 2,475,212 ==========At 30 September 2005 4,777,799 ========== 6 Share capital Group and company Group and company 2006 2006 2005 2005 £ Number £ NumberAuthorisedOrdinary shares of 10p each 5,000,000 50,000,000 5,000,000 50,000,000 ========== ========== ========== ======== Group and company Group and company 2006 2006 2005 2005 £ Number £ NumberAllotted, called up and fullypaidOrdinary shares of 10p each 2,760,510 27,605,095 2,760,510 27,605,095 ========== ========== ========== ======== Milestone Group PLC Interim Report Notes to the Interim financial information for the six month period ended 31March 2006 (continued) 7 Reserves Share Profit premium Merger and loss account reserve Account £ £ £Group At 1 October 2005 7,692,985 11,119,585 (16,654,473)Loss for the period - - (1,783,980) --------- --------- ---------- At 31 March 2006 7,692,985 11,119,585 (18,438,453) ========= ========= ========== 8 Reconciliation of operating loss to net cash outflow from operating activities 2006 2005 £ £ Operating loss (1,967,231) (5,833,311)Amortisation and impairment of intangible assets 730,568 3,908,410Depreciation 127,918 283,933Profit/ (loss) on disposal of fixed assets (500) 791(Increase)/decrease in debtors (123,330) 368,150(Increase)/decrease in creditors 301,110 (327,664) ----------- -----------Net cash outflow from operating activities (931,465) (1,599,691) =========== =========== 9 Reconciliation of net cash outflow to movement in net debt 2006 2005 £ £ Increase in cash in the period 413,030 108,761Cash outflow from decrease in debt and lease 282,767 (265,005)financingInception of Finance leases - (11,084) ----------- ------------ Movement in the period 695,797 (167,328) Net debt at 1 October 2005 (374,185) (206,857) ----------- ------------ Net debt at 31 March 2006 321,612 (374,185) =========== ============ Milestone Group PLC Interim Report Notes to the Interim financial information for the six month period ended 31March 2006 (continued) 10 Analysis of net debt At At 1 October Cash 31 March 2005 Flow 2006 £ £ £ Cash at bank and in hand 680,815 37,251 718,066Bank overdrafts (754,397) 375,779 (378,618) --------- -------- ---- ---------- (73,582) 413,030 339,448 Debt due after one year (5,400) 1,208 (4,192)Finance leases (11,882) 4,676 (7,206) (283,321) 276,883 (6,438) --------- --------- -------- --------- ----------Advances under invoicediscounting arrangements --------- --------- -------- --------- ---------- Total (374,185) 695,797 321,612 ========= ========= ======== ========= ========== 11 Post Balance Sheet Events On 8th June 2006 Milestone completed the disposal of its entire issued sharecapital in Passion (Radio) Oxford Limited for a cash consideration of £300,000.The period ended 31 March 2006 includes an amount of £472,000 impairment ofgoodwill on account of this transaction 12 Discontinued activities The following activities represent those that were discontinued following thedisposal of the radio division (including Passion Radio (Oxford) Limited). Unaudited Unaudited Audited Six months Six months Year ended ended ended 31 March 2006 31 March 2005 30 September 2005 £ £ £Turnover 560,308 787,238 1,502,997Cost of sales (156,173) (195,192) (391,337) ----------- ----------- -----------Gross profit 404,135 592,046 1,111,660Distribution costs (55,295) (61,203) (118,375)Administrative expenses (602,965) (685,276) (1,383,650) ----------- ----------- -----------Operating loss (254,125) (154,433) (390,365) =========== =========== =========== This information is provided by RNS The company news service from the London Stock Exchange