DODS.L Regulatory News (DODS)

Dods (Group) PLC

Interim Results for the six months ended 30 September 2013

Financial Highlights

· Revenues £9.3m (2012: £6.4m) +46%.

· Revenues, excluding acquisitions, £8.0m +26%.

· Gross Profit £2.0m (2012: £1.2m) +68%.

· Gross profit margin increased from 19% to 22%.

· Loss before tax £1.1m (2012: £2.9m).

· Adjusted EBITDA improved from a loss of £0.7 million to a small profit of £28,000.

Operational Highlights

· Capita contract producing improved volumes and revenues.

· Continued growth of information and intelligence products.

· Launched German and French political monitoring service.

· Sales focus on US market producing results.

· Continued investment in technology platform.

· Acquisitions, Total Politics and Holyrood Communications, contributed £0.17m to EBITDA from pre ownership losses.

Comparative information

The comparative numbers have been prepared from the management accounts for the six months ended 30 September 2012. Due to the change of accounting reference date from 31 December 2012 to 31 March 2013, these figures are not audited and have not been disclosed to shareholders before.

Andrew Wilson, Interim Chairman of Dods (Group) PLC, commented:

"Our underlying performance continues to improve and in most of our sectors revenues are growing. We are continuing to invest for future growth, in particular in IT and in head office resource. In addition, we have recently implemented an internal reorganisation which focuses the Group's activities around our client communities and we are undertaking a significant strategic research project to help us maximise our opportunities in each area. We expect that there will be some one-off costs associated with these decisions currently anticipated to be approximately £0.5m.

Alastair Gornall has decided to resign from the Board with immediate effect. The Board of Dods wishes to thank Alastair for all he has done in a short time to restructure the group and set a clear strategy. We respect his decision to step down at this time. I am confident that, in Martin and Keith, we have the right executive team in place to lead Dods through its current strategy for growth."

For further information, please contact:

Dods

Andrew Wilson, Interim Chairman

Keith Sadler, CFO 020 7593 5500

Cenkos

Nicholas Wells 020 7397 8920

Chairman's Statement

The Board would like to thank Kevin Hand for his stewardship of the Group for the last six years. Kevin has steered the Group through a number of changes in its structure and also a challenging economic environment. The Board is grateful for his contribution to the Group.

I am pleased to announce Group revenue increased by 46% over the same six month period last year to £9.3 million. This includes the acquisition of Holyrood Communications and Total Politics in December 2012. On a like for like basis revenue grew by 26% to £8.0 million from £6.4 million, an increase of £1.6 million.

We saw increased revenues in all of our activities with our Training business growing by 57%. This reflects the decision to increase the number of educational conferences we hold as well as the Capita contract beginning to deliver on the volumes we had previously expected. We anticipate that the plan we executed at the start of the year will continue to improve revenues in this part of our business. £1.4 million of overall revenue was generated from our training activities.

Revenue in our Engagement business, which comprises publications, events and politicshome.com, improved by 40%. This is partly due to the timing of the political party season which was split between September and October in 2012 as opposed to falling completely within September this year. The revenue from the conference season overall is up 26%. Including the acquisition of Total Politics and Holyrood Communications, revenue from these activities totalled £2.6 million. On a like for like basis engagement revenue increased by 15%.

Our Information business, which supplies political monitoring and commentary to clients, increased revenues by 17% within the UK and by 25% in Europe. In total, our monitoring business accounted for £2.6 million of total revenue for the six months to 30 September 2013. We continue to increase steadily the number of clients to whom we provide this service and expand into new geographic areas. Our Parliament magazine, which covers the European Parliament had an exceptional six months with revenues increasing by 58% to £0.4 million. Revenue from our other activities in the information division, Directories and Dods People, accounted for £1.6 million of turnover.

And finally, our Government business, which includes public sector research and our events focussed on civil servants, improved revenues by 18%, derived primarily from our research team, where an investment in sales resource has benefitted the unit, and from Civil Service Live, our event where we bring the Civil Service and private sector together to share information and best practice. This business area produced £1.1 million of revenue.

As a result of these improvements and tight cost control our gross profit and margin has improved in the six months from £1.2 million to £2.0 million, with our margins increasing from 19% to 22%.

In the six months to 30 September 2012 we incurred significant advisory fees in dealing with the OFT who investigated our potential acquisition of De Havilland, a similar business to our monitoring and information business, and other expenses which in total was £1.3 million. This has reduced to less than £0.1 million in this reporting period.

As a result of the acquisitions made last year, amortisation, depreciation and overheads have increased. The adjusted EBITDA has produced a small profit for the six months against a loss of £0.7 million for the comparative six months.

Board Changes

Alastair Gornall, Executive Chairman, has resigned from the Board on 25 November 2013. Alastair joined the Board on 3 September 2013, becoming chairman on 26 September 2013 and, from 1 October 2013, took primary responsibility for the strategic direction and operation of the whole business. As a consequence of personal circumstances that were unforeseen when he first joined the Company, Alastair has decided that he is not the appropriate person to carry forward the reorganisation that he has recommended and which the Board has approved.

The Board has commenced a search for a new chairman. In the meantime, Andrew Wilson has been appointed chairman on an interim basis.

The Board has implemented the reorganization which introduces a management structure focused on two client communities; the public affairs community and the public sector community. Over the last 12 months, Dods has eliminated the duplication of effort involved with five separate business streams. This is expected to drive efficiency and, as importantly, enhance client experience and growth. The Board are also pleased to announce the appointment of Martin Beck to the Board. Martin will be acting CEO working closely with Keith Sadler, CFO, to continue the development and growth of Dods. Martin, 42, joined Dods in 2003 as Digital Sales Director, becoming MD of the European business in 2007. In 2012 Dods consolidated its UK and European information businesses under his direction. Martin's teams consistently perform to high levels with the Company's Information businesses in London and Brussels. Martin was a director of Boundary Travel Limited until November 2013.

Outlook

Our underlying performance continues to improve and in most of our sectors revenues are growing. We are continuing to invest for future growth, in particular in IT and in head office resource. In addition, we have recently implemented an internal reorganisation which focuses the Group's activities around our client communities and we are undertaking a significant strategic research project to help us maximise our opportunities in each area. We expect that there will be some one-off costs associated with these decisions currently anticipated to be approximately £0.5m.

Andrew Wilson

Interim Chairman

RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE HALF YEAR REPORT

We confirm that to the best of our knowledge:

1. the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

2. the interim management report includes a fair review of the information required by:

(a) DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

By order of the Board of Dods (Group) PLC

Keith Sadler

Chief Financial Officer

DODS (GROUP) PLC

Notes to the Accounts

30 September 2013

1 Statement of Accounting Policies

The interim financial statements have been prepared in accordance with the recognition and measurement principles of IFRSs as adopted by the EU, applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 March 2013.

Basis of preparation

The Board continuously assesses and monitors the key risks of the business. Despite the current uncertainty in the global economy, the key risks that could affect the Group's medium term performance, and the factors which mitigate these risks have not significantly changed from those set out in the Group's Financial Report for 15 months ended 31 March 2013. The Operating Review includes consideration of uncertainties affecting the Group in the remaining six months of the year. The Board has reviewed forecasts and remains satisfied with the Group's funding and liquidity position. On the basis of its forecasts and available facilities and cash balances held on the balance sheet, the Board has concluded that the going concern basis of preparation continues to be appropriate.

2 Statement of compliance

This condensed set of financial statements has been prepared in accordance with IAS 34: Interim Financial Reporting as adopted by the EU. The annual financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the EU. As required by AIM Rules, the condensed set of financial statements has been prepared applying the accounting policies and presentation that were applied in the preparation of the company's published consolidated financial statements for the year-ended 31 December 2011.

The comparative figures for the 15 months ended 31 March 2013 are not the company's statutory accounts for that financial y period. Those accounts have been reported on by the company's auditor and delivered to the registrar of companies. The report of the auditor was (i) unqualified, (ii) did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying their report, and (iii) did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

3 Segmental information

Segment information is presented in respect of the Group's operating segments. The operating segments have been identified on the basis of internal reports about components of the Group that are regularly reviewed by the "chief operation decision maker" to allocate resources to the segments and to assess their performance.

*EBITDA is defined by the Directors as being earnings before interest, tax, depreciation, amortisation of intangible assets acquire through business combinations, and non-trading items.

5 Taxation

The taxation charge for the six months ended 30 September 2013 is based on the expected annual tax rate.

Since the Group is loss making, there is no dilutive impact of the share options.

On 7 February 2012 each existing ordinary share of 10p in the authorised share capital of the company was subdivided into 1 ordinary shares of 1p each and 1 deferred shares of 9p each.

The 1p ordinary shares have the same rights (including voting and dividend rights and rights on a return of capital) as the previous 10p ordinary shares. Holders of the 9p deferred shares confer no right to any dividend or any other distribution (other than on a winding up), confer no right to receive notice of, or to attend or vote at, general meetings of the Company, and on a winding up confer the rights to be paid out of the assets of the Company available for distribution an amount equal to 1p for all the deferred shares prior to the surplus being distributed to the holders of ordinary shares, but do not confer any right to participate in any surplus assets of the Company, the Company shall not be obliged to issue share certificates in respect of the deferred shares.

On 5 April 2012, Dods (Group) PLC issued and allotted 76,950,944 ordinary shares which were admitted to trading on 5 April 2012.  

On 25 July 2012, Dods (Group) PLC announced that it was proposing to raise approximately £6.1 million (before expenses) by the issue of 110,821,556 new Ordinary Shares ("Placing Shares") at a price of 5.5 pence each (the "Placing") to Lord Ashcroft KCMG.

The additions of £54,000 represent the opportunity for synergies in respect of websites purchased during the period.

Other intangible assets comprise IT software and plate costs for revision guide material.

The additions of £184,000 represent the opportunity for synergies in respect of websites purchased during the period.