DODS.L Regulatory News (DODS)

Dods (Group) PLC

Interim Results for the six months ended 30 June 2012

Financial Highlights

·; Revenues £6.0m (2011: £6.1m).

·; Gross Profit £1.3m (2011: £1.5m).

·; Loss before tax £2.8m (2011: £1.5m).

·; Abortive deal costs and compensation for loss of office £1.3m (2011: £0.1m).

·; Loss before tax and abortive deal costs and compensation for loss of office £1.5m (2011: £1.4m).

·; Placing raised £4.2m before expenses (further placing in September 2012 raised £6.1m before expenses).

Operational Highlights

·; Continued growth of information and intelligence products.

·; Investment in more sales staff.

·; Initiated £1.3m investment in technology platform.

·; Strong supportive shareholders.

Kevin Hand, Chairman of Dods (Group) PLC, commented:

"Against the uncertain economic environment our first half of the year saw us produce satisfactory results. Our information monitoring and digital services continue to drive forward, but we have had a difficult period in our print products, along with other publishers in this area. Information monitoring grew 20% in the half year and our training and conference business grew at 2%.

I am pleased to announce Keith Sadler has been appointed Chief Executive Officer. Keith has many years of experience in the media industry and B2B publishing both as finance director and CEO. His complementary skills in finance and management will help deliver the growth strategy we as a Board have set ourselves. 

We have a clear strategy to grow Dods in the future through a combination of acquisition and investment in our products and infrastructure. We will identify appropriate acquisition targets that enhance our offering. We placed shares with existing shareholders raising £10.3m before expenses, to allow us to execute on our growth strategy. Also, we are making significant investments in our people and products which will enable us to become the leading political communications and information Group"

For further information, please contact:

Dods

Keith Sadler, Chief Executive Officer 020 7593 5500

Kevin Hand, Non-Executive Chairman

Cenkos

Adrian Hargrave 020 7397 8922

Chairman's Statement

Against a continuing challenging environment I am pleased to report the first half of 2012 to 30 June 2012 saw revenues of £6.0m (2010: £6.1m). The mix of our revenues continues to change with growth from our information and monitoring services growing by 20% whereas the traditional print advertising market continues to find it difficult. This was pronounced in our European publications where there was a halving of print revenue.

Gross profit for the six months to 30 June 2012 was £1.3m compared to £1.5m for the comparative period. The effect on margin is the result of the decision to invest in products we offer.

The contract with Capita and Civil Service Learning, to produce training and education services, has still to produce the activity levels of previous years. Due to a strong first quarter under the old contract, revenues are ahead of the comparative period, however during the second quarter of this period revenues have been lower. Together with the opportunity of the Civil Service Review Plan and the inevitable increase in Civil Service Learning we are confident this part of our business will generate improved revenues in the near future.

The operating loss for the six months to 30 June 2012 increased from £1.4m to £2.8m. This increase was as a result of abortive transaction costs, placing fees and compensation for loss of office of some £1.3m. The abortive deal costs related to the potential acquisition of De Havilland which was reviewed by the Office of Fair Trading ("OFT") and then referred to the Competition Commission. The potential acquisition had been under review by the Company and the OFT for nearly 12 months. On referral by the OFT to the Competition Commission the Board decided not pursue the transaction. In total professional fees of £1.2m were expended on abortive transactions, £0.8m was charged in the current period.

Underlying administrative costs remain at a similar level to the comparative period.

The Board have authorised the investment in a combined technology platform that will integrate all of our information, content and data on to a single platform. This will allow us to develop and bring to market products in a quicker and more efficient manner. The budget for this has been set at £1.3m.

In addition we will continue to invest in our sales teams and look for opportunities to expand our product range in the UK and internationally.

In April 2012 the Company successfully placed shares with existing shareholders raising £4.2m. A further placing took place in September 2012 where we raised a further £6.1m before expenses. We are pleased we have such supportive shareholders and means the Group has the ability to complete future transactions and investments with a financially secure balance sheet.

The basic loss per share was 1.47 pence (2011: 0.86 pence).

As result of operating performance and the placing, at 30th June 2012, net cash in the Group amounted to £4.8m (2011: £0.8m).

We have changed our year end from 31 December to 31 March. This will achieve a more even split to our performance and give shareholders greater visibility of the financial outlook for the Group at the interim review. Our results for the fifteen months to 31 March 2013 will be reported in July 2013.

Board Changes

Gerry Murray stepped down as Chief Executive Officer and as a Director of Dods Group Plc on 28 June 2012. I would like to thank Gerry for steering the Group over the last seven years and wish him well in his future endeavours. Gerry will become Honorary Publisher of The House magazine, our flagship title.

Richard Flaye, Non-Executive Director, has also decided to step down from the Board as of 29 December 2012. Richard has served on the Board for six years. I would also like to thank Richard for his contribution to the Board and management of Dods Group.

I am delighted to announce the appointment of Keith Sadler as Chief Executive Officer with immediate effect. Keith joined the Board in April as Group Finance Director. Keith has a wealth of experience in the media industry both in finance and management roles. Keith was Chief Executive Officer of SPG Media Group plc, a business to business digital publisher and events organiser.

Outlook

Dods' business continues to be heavily weighted to the second half of the financial year. Civil Service Live was successfully completed in July 2012 with revenues up 33%, however due to the economic environment the Party Conference fringes are unlikely to generate the levels of revenues as last year.

We have a clear growth strategy for the Group through a combination of acquisition and investment in our products and infrastructure. The balance sheet is financially robust with significant cash resources. It is our intention to grow the Group to become the leading political communications company. The Board are confident about the future prospects for the Group.

Kevin Hand

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

Group Finance Director

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.

DODS (GROUP) PLC

Notes to the Accounts

30 June 2012

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 December 2011.

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 Annual Report for 2011. 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

These Condensed Consolidated Financial Statements are prepared in accordance with IAS 34: Interim Financial Reporting as endorsed and adopted for use in the European Union and Disclosure and Transparency Rules (DTR) of the Financial Services Authority. They do not include all of the information required for full annual financial statements, and should be read in conjunction with the Consolidated Financial Statements of the Group as at and for the year ended 31 December 2011. The comparative figures for the financial year ended 31 December 2011 are not the Company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors 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 auditors 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 Segment 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.  

 A reconciliation between EBITDA and operating profit is shown in Schedule A.  

Redundancy and people related costs include £377,000 in respect of Gerry Murray's (former Chief Executive Officer) compensation for loss of office.

Abortive deal costs include legal and financial due diligence costs in respect of the aborted De Havilland acquisition. The Company decided not to pursue the acquisition of the business of the De Havilland Political Intelligence division of Emap Limited following the referral to the Competition Commission by the Office of Fair Trading.

5 Taxation

The taxation charge for the six months ended 30 June 2012 is based on the expected annual tax rate.

Since the Group is loss making, there is not 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 10 ordinary shares of 1p each and 10 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.

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

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.

 Reconciliation between operating profit and non-statutory measure

The following tables reconcile operating profit as stated above to EBITDA, a non-statutory measure which the Directors believe is the most appropriate measure in assessing the performance of the Group.

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

*including amortisation of software shown within intangibles.