IME.L Regulatory News (IME)

RNS Number : 8654R

Immedia Group PLC

17 September 2014

 

17 September 2014

 

IMMEDIA GROUP PLC

 

("Immedia" or "the Company")

 

INTERIM RESULTS

 

Immedia Group Plc (AIM: IME), a premier supplier of digital music, entertainment and commerce channels to leading brands, today announces its interim results for the half year to 30 June 2014.

 

 

Highlights

 

· Improved earnings per share (H1 2014 vs H1 2013);

· Significant gains on investment in Audioboom Group Plc;

· Cash used to further reduce borrowings by £118,000; and

· Positive outlook for 2014 / 2015.

 

 

 

 

Financial Highlights

	Unaudited  Half year to   30 June 2014	Unaudited  Half year to   30 June 2013	Audited  Year to 31 December 2013
Revenue	£1,257,346	£1,256,836	£2,841,740
Results from operating activities	£34,745	£180,671	£406,945
Profit before income tax	£258,886	£180,758	£405,619
Profit for period attributable to equity shareholders	£258,886	£180,758	£808,330
Earnings per share - basic (pence)	1.89p	1.32p	5.89p
Earnings per share - diluted (pence)	1.85p	1.32p	5.89p
Cash and cash equivalents	£356,690	£266,931	£614,745

 

 

Bruno Brookes, Chief Executive Officer of Immedia, said:

 

 

"The new appointments we made earlier this year - Justin Lello, former Business Development Manager (Mobile Media) at MTV Networks Europe and Adam Blake, formerly Associate Director of Operations for Data Select Ltd (part of the Phones International Group) - are part of the Company's strategy to drive innovation and growth and are allowing us to respond to a wider range of relevant opportunities and develop healthy new business which is expected to contribute later in 2014 and to 2015 and beyond.

 

We are confident that our strategy is appropriate for the longer term and expect in due course to provide further details of the new business developments that result."

 

 

 

Immedia provides fully managed digital network delivery of audio/visual entertainment and marketing content designed for its clients, together with

 

· associated hardware installation and hosting

· expert music strategies and brand conversation

· locally targeted consumer information, advice and staff communications.

 

 

Immedia Group Plc
Bruno Brookes - Chief Executive Officer	+44 (0) 1635 556 200
Daniel Stewart & Company Plc
Paul Shackleton	+44 (0) 207 776 6550

Chief Executive's Review

 

 

 

I am pleased to present our half year results for the period to 30 June 2014 where we achieved a profit before tax of £258,886 on revenues of £1,257,346. These results, which include the fair value revaluation of a minority holding in AIM-quoted audio social media platform Audioboom Group Plc (AIM: BOOM) as well as profit from operating activities, are a significant improvement on the profit before tax for the first half of 2013.

 

The new appointments we made earlier this year - Justin Lello, former Business Development Manager (Mobile Media) at MTV Networks Europe and Adam Blake, formerly Associate Director of Operations for Data Select Ltd (part of the Phones International Group) - are part of the Company's strategy to drive innovation and growth and are allowing us to respond to a wider range of relevant opportunities and develop healthy new business which is expected to contribute later in 2014 and to 2015 and beyond.

 

We are confident that our strategy is appropriate for the longer term and expect in due course to provide further details of the new business developments that result.

 

 

 

Bruno Brookes

Chief Executive

 

16 September 2014

Consolidated statement of comprehensive income

 

 

	Note	Unaudited Half year to 30 June 14 £		Unaudited Half year to 30 June 13 £		Audited Year ended 31 Dec 13 £
Revenue		1,257,346		1,256,836		2,841,740
Cost of sales		(603,351)		(534,033)		(1,270,789)
Gross profit		653,995		722,803		1,570,951
Administrative expenses before depreciation, amortisation and impairment charges		(589,358)		(499,558)		(1,082,109)
Earnings before interest, depreciation and amortisation charges (EBITDA)		64,637		223,245		488,842
Depreciation and amortisation charges		(29,892)		(42,574)		(81,897)
Total administrative expenses		(619,250)		(542,132)		(1,164,006)
Results from operating activities		34,745		180,671		406,945
Finance income		5,840		3,519		9,168
Finance cost		(6,699)		(3,432)		(10,494)
Gains from financial assets designated at fair value through profit or loss	8	225,000		-		-
Net finance income/(cost)		224,141		87		(1,326)
Profit before income tax		258,886		180,758		405,619
Income tax	4	-		-		402,711
Profit and total comprehensive income for the period attributable to equity shareholders		258,886		180,758		808,330
Continuing and total operations
Earnings per share - basic	15	1.89p		1.32p		5.89p
Earnings per share - diluted	15	1.85p		1.32p		5.89p

 

 

Consolidated balance sheet

 

 

	Note	Unaudited  as at  30 June 14    £		Unaudited  as at  30 June 13    £		Audited as at  31 Dec 13   £
Assets
Property, plant and equipment	5	151,091		63,779		166,231
Intangible assets	6	205,046		211,441		205,094
Deferred tax asset		288,700		-		288,700
Total non-current assets		644,837		275,220		660,025
Current assets
Inventories	7	124,325		111,927		115,266
Other short term financial assets	8	315,000		-		-
Trade and other receivables	9	766,286		827,602		712,451
Prepayments		38,141		89,268		29,988
Deferred tax asset		109,300		-		109,300
Cash and cash equivalents	10	356,690		266,931		614,745
Total current assets		1,709,742		1,295,728		1,581,750
Total assets		2,354,579		1,570,948		2,241,775
Equity
Share capital	11	1,455,684		1,455,684		1,455,684
Share premium		3,586,541		3,586,541		3,586,541
Merger reserve		2,245,333		2,245,333		2,245,333
Other reserves		4,578		-		4,578
Retained losses		(5,896,071)		(6,774,791)		(6,147,219)
Total equity		1,396,065		512,767		1,144,917
Liabilities
Borrowings	12	7,500		-		18,750
Finance leases	13	26,313		61,396		43,855
Total non-current liabilities		33,813		61,396		62,605
Borrowings	12	56,275		84,667		145,575
Finance leases	13	35,084		35,084		35,084
Trade and other payables	14	657,150		686,749		653,263
Deferred income		176,192		190,285		200,331
Total current liabilities		924,701		996,785		1,034,253
Total liabilities		958,514		1,058,181		1,096,858
Total equity and liabilities		2,354,579		1,570,948		2,241,775

 

 

Consolidated statement of changes in equity

 

 

		Attributable to equity shareholders of the Company
	Share capital £	Share Premium account £	Merger reserve £	Share based payment reserve  £	Profit & loss account £	Total equity £
Total equity at 30 June 2014 (unaudited)
Balance at 1 January 2014	1,455,684	3,586,541	2,245,333	4,578	(6,147,219)	1,144,917
Purchase of own shares by employee benefit trust	-	-	-	-	(7,738)	(7,738)
Transactions with owners	-	-	-	-	(7,738)	(7,738)
Profit and total comprehensive income for the period	-	-	-	-	258,886	258,886
Balance at 30 June 2014	1,455,684	3,586,541	2,245,333	4,578	(5,896,071)	1,396,065
Total equity at 30 June 2013 (unaudited)
Balance at 1 January 2013	1,455,684	3,586,541	2,245,333	-	(6,955,549)	332,009
Profit and total comprehensive income for the period	-	-	-	-	180,758	180,758
Balance at 30 June 2013	1,455,684	3,586,541	2,245,333		(6,774,491)	512,767
Total equity at 31 December 2013 (audited)
Balance at 1 January 2013	1,455,684	3,586,541	2,245,333	-	(6,955,549)	332,009
Equity settled share based payments	-	-	-	4,578	-	4,578
Transactions with owners	-	-	-	4,578	-	4,578
Profit and total comprehensive income for the year	-	-	-	-	808,330	808,330
Balance at 31 December 2013	1,455,684	3,586,541	2,245,333	4,578	(6,147,219)	1,144,917

 

Consolidated statement of cash flows

 

 

	Note	Unaudited  Half Year to  30 June 14 £		Unaudited  Half Year to  30 June 13  £		Audited Year ended  31 Dec 13  £
Cash flows from operating activities
Profit for the period before income tax		258,886		180,758		405,619
Adjustments for:
Depreciation and amortisation charges		29,892		42,574		81,897
Financial income		(5,840)		(3,519)		(9,168)
Gains from financial assets designated at fair value through profit or loss		(225,000)		-		-
Financial expense		6,699		3,432		10,494
Profit on sale of property, plant and equipment		-		(358)		(365)
Increase in trade and other receivables and prepayments		(61,988)		(359,339)		(184,908)
(Increase)/decrease in inventories		(9,059)		22,365		19,026
(Decrease)/increase in trade and other payables and deferred income		(20,253)		45,367		21,929
Share based payment				-		4,578
Net cash from operating activities		(26,663)		(68,720)		349,102
Taxation
Taxation		-		-		4,711
Cash flows from investing activities
Proceeds from sale of property, plant and equipment		-		1,200		1,206
Interest received		5,840		3,519		9,168
Acquisition of property, plant and equipment	5	(12,903)		(3,557)		(137,285)
Acquisition of intangible assets	6	(1,800)		(4,000)		(5,700)
Acquisition of investments		(90,000)		-		-
Net cash from investing activities		(98,863)		(2,838)		(132,611)
Cash flows from financing activities
New bank loan		-		-		45,000
Repayment of bank loan		(11,250)		-		(3,750)
New finance leases		-		116,675		116,675
Repayment of finance leases		(17,542)		(20,195)		(37,737)
Interest paid		(6,699)		(3,432)		(10,494)
Amounts repaid under invoice financing facility		(89,300)		(45,133)		(6,725)
Purchase of own shares for EBT		(7,738)		-		-
Net cash from financing activities		(132,529)		47,915		102,969
Net (decrease)/increase in cash and cash equivalents		(258,055)		(23,643)		324,171
Cash and cash equivalents at beginning of period		614,745		290,574		290,574
Cash and cash equivalents at end of period	10	356,690		266,931		614,745

 

 

Notes to the condensed consolidated interim financial statements

 

 

1. Reporting entity

 

Immedia Group Plc (the "Company") is a company incorporated and domiciled in the United Kingdom. The address of the Company's registered office and its principal place of business is 7-9 The Broadway, Newbury, Berkshire RG14 1AS.

 

The condensed consolidated interim financial statements of the Company as at and for the half year ended 30 June 2014 comprise the Company and its subsidiaries (together referred to as the "Group"). The financial information set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 December 2013 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain a statement under Section 498(2) of the Companies Act 2006. The consolidated financial statements of the Group as at and for the year ended 31 December 2013 are available at http://www.immediaplc.com/investors

 

The Group primarily is involved in marketing and communication services through music, radio and screen based media together with the supply, installation and maintenance of associated equipment.

 

 

2. Basis of preparation

 

These consolidated financial statements for the half year ended 30 June 2014 are unaudited. They have been prepared and approved by the directors following the recognition and measurement principles of International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs"); 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 2013.

 

On the basis of current financial projections prepared up to the end of 2015, recent news of new contracts and of contract renewals, continuing improvements in management of costs, and ongoing availability of facilities, the Directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future and consequently the financial statements have been prepared on the going concern basis.

 

The financial statements were approved by the Board of Directors on 16 September 2014.

 

 

3. Significant accounting policies

 

The accounting policies set out in detail in note 3 of the Group's consolidated financial statements to 31 December 2013 have been applied consistently to these unaudited financial statements to 30 June 2014, including:

 

(a) Revenue

Revenue represents the amounts receivable by the Group for the provision of its goods and services, excluding value added tax. Revenue from production services comprise the broadcasting of live and as live radio programmes to customers' premises using appropriate technologies, together with the production of advertising content for use in those programmes. Revenue from these services is billed on time based subscriptions and recognised on the date of broadcast. Revenue from equipment sales is recognised on the date of delivery and configuration when risk and rewards pass to the customer; revenue from content delivery and equipment maintenance services is billed on time based subscriptions and is recognised on completion.

 

(b) Short term financial assets

These include financial assets that meet certain conditions and are designated at fair value through profit or loss upon initial recognition; fair value is determined by reference to active market transactions and gains or losses are recognised in profit or loss.

Notes to the condensed consolidated interim financial statements continued

 

 

 

4. Income tax credit in the income statement

 

 

	Unaudited as at 30 June 14 £		Unaudited as at 30 June 13 £		Audited as at 31 Dec 13 £
Current tax credit
Current period	-		-		-
Adjustment in respect of prior periods	-		-		(4,711)
Deferred tax credit
Deferred tax	-		-		(398,000)
Total tax credit in consolidated income statement	-		-		(402,711)

 

The utilisation of historic tax losses and excess management charges is expected to eliminate all potential tax charges for the period to 30 June 2014.

 

 

5. Property, plant and equipment

 

	Plant &	Fixtures &	Network	Total
	equipment	fittings	equipment
	£	£	£	£
Cost
At 1 January 2014	821,865	464,568	188,420	1,474,853
Additions	-	12,903	-	12,903
Disposals and retirements	-	-	-	-
At 30 June 2014	821,865	477,471	188,420	1,487,756
Depreciation and impairment losses
At 1 January 2014	785,864	334,362	188,396	1,308,622
Charge for period	10,988	17,038	17	28,043
On disposals & retirements	-	-	-	-
At 30 June 2014	796,852	351,400	188,413	1,336,665
Carrying amounts
Unaudited at 30 June 2014	25,013	126,071	7	151,091
Audited at 31 December 2013	36,001	130,206	24	166,231
Unaudited at 30 June 2013	24,486	39,057	236	63,779

Notes to the condensed consolidated interim financial statements continued

 

 

6. Intangible assets

 

	Customer	Video	Content	Goodwill	Total
	relationships	library	Delivery
	£	£	£	£	£
Cost
At 1 January 2014	566,880	126,000	49,336	1,173,310	1,915,526
Additions in period	-	-	1,800	-	1,800
Disposals in period	-	(126,000)	-	-	(126,000)
At 30 June 2014	566,880	-	51,136	1,173,310	1,791,326
Amortisation and impairment losses
At 1 January 2014	566,880	126,000	43,551	974,000	1,710,431
Charge for period	-	-	1,849	-	1,849
Disposals in period	-	(126,000)	-	-	(126,000)
At 30 June 2014	566,880	-	45,400	974,000	1,586,280
Carrying amounts
Unaudited at 30 June 2014	-	-	5,736	199,310	205,046
Audited at 31 December 2013	-	-	5,784	199,310	205,094
Unaudited at 30 June 2013	-	-	12,131	199,310	211,441

The Group disposed of its video library in February 2014 for nil consideration subject to certain conditions in respect of transferred licensing obligations and the requirement to provide digital copies of certain material free of charge to the Group in future.

 

There were no indications of impairment of intangible assets at 30 June 2014 and the annual impairment tests will be carried out at the year end.

 

 

7. Inventories

 

	Unaudited as at 30 June 14 £		Unaudited as at 30 June 13 £			Audited as at 31 Dec 13 £
Work in progress	25,654		10,825			16,678
Finished goods	98,671		101,102			98,588
	124,325			111,927		115,266

 

The inventory expense included in cost of sales in the consolidated statement of comprehensive income was £64,773 (30 June 2013: £104,444; 31 December 2013: £359,707). Impairment charges for obsolete and slow moving inventories were £nil (30 June 2013: £nil; 31 December 2013: £412).Notes to the condensed consolidated interim financial statements continued

 

 

8. Other short term financial assets

 

In March 2014 the Group invested £90,000 in the purchase of 6,000,000 shares in Audioboom Group Plc (formerly One Delta Plc), an AIM-quoted audio social media platform, as part of the Group's strategy to broaden its digital marketing and communications services.

The investment has been designated to be measured at fair value, with fair value changes taken to profit or loss (see note 3(b) above). At 30 June 2014 the fair value of the investment was £315,000 with a fair value change of £225,000 taken through profit or loss.

As at the date of approval of this report, the investment represents c.1.29% of Audioboom Group Plc's shares in issue and has a fair value of £682,800.

 

 

9. Trade and other receivables

 

	Unaudited as at 30 June 14 £		Unaudited as at 30 June 13 £		Audited as at 31 Dec 13 £
Trade receivables (i)	336,933		590,353		433,352
Accrued contract income (ii)	428,353		225,456		273,388
Other debtors	1,000		11,793		5,711
	766,286		827,602		712,451

At 30 June 2014 trade receivables are shown after a provision for impairment of £2,380 (30 June 2013: £365; 31 December 2013: £2,380) arising from slow moving debts and disputed charges. During the period to 30 June 2014 there was no change to the provision for impairment.

(i) At 30 June 2014 the total of trade receivables past due, net of provision for impairment, was as follows:

	Unaudited as at 30 June 14 £		Unaudited as at 30 June 13 £		Audited as at 31 Dec 13 £
Up to 3 months past due	56,416		193,798		168,827
Over 3 months past due	10,882		13,605		24,983

(ii) Accrued contract income is receivable as follows:

	Unaudited as at 30 June 14 £		Unaudited as at 30 June 13 £		Audited as at 31 Dec 13 £
Within one year	370,392		83,748		173,553
After one but less than two years	57,961		83,748		83,748
After two years	-		57,960		16,087
	428,353		225,456		273,388

 

 

Notes to the condensed consolidated interim financial statements continued

 

 

10. Cash and cash equivalents

 

	Unaudited as at 30 June 14 £		Unaudited as at 30 June 13 £		Audited as at 31 Dec 13 £
Bank balances	19,721		29,074		137,864
Call deposits	336,969		237,857		476,881
Cash and cash equivalents	356,690		266,931		614,745

 

Cash and cash equivalents comprise cash balances and short-term call deposits.

 

 

11. Share Capital

 

	Unaudited as at 30 June 14 £		Unaudited as at 30 June 13 £		Audited as at 31 Dec 13 £
Authorised
36,000,000 Ordinary shares of 10 pence each	3,600,000		3,600,000		3,600,000
Allotted, called up and fully paid
14,556,844 Ordinary shares of 10 pence each	1,455,684		1,455,684		1,455,684

 

 

There are no restrictions on the transfer of shares in Immedia Group Plc. All shares carry equal voting rights.

 

 

12. Borrowings

 

	Unaudited as at 30 June 14 £		Unaudited as at 30 June 13 £		Audited as at 31 Dec 13 £
Current
Invoice financing facility (secured) (i)	33,775		84,667		123,075
Bank loan (secured) (ii)	22,500		-		22,500
	56,275		84,667		145,575
Falling due after more than one year
Bank loan (secured) (ii)	7,500		-		18,750

 

(i) The Group has an invoice financing facility with HSBC Invoice Financing (UK) Limited under which advances are secured by debenture on Immedia Broadcast Limited's assets.

(ii) In 2013 a two year loan was arranged with HSBC Bank Plc to part finance the conversion of ground floor space into offices in the Newbury studios building. The loan is secured by debenture on Immedia Broadcast Limited's assets.

Notes to the condensed consolidated interim financial statements continued

 

 

13. Finance lease arrangements

 

Certain equipment supplied to customers under contract has been financed under finance lease arrangements with Aurora Leasing Limited under which advances are secured by debenture on Immedia Broadcast Limited's assets. The equipment supplied has been recognised as a sale in accordance with the Group's revenue recognition accounting policy as detailed in note 3 above; there are therefore no assets held under finance lease within Property, plant and equipment (note 5).

 

Future minimum finance lease payments were as follows:

 

 

Falling due:	Within 1 year	1 to 5 years	Total
	£	£	£
Unaudited at 30 June 2014
Lease payments	45,698	34,273	79,971
Finance charges	(10,614)	(7,960)	(18,574)
Net present values	35,084	26,313	61,397
Audited at 31 December 2013
Net present values	35,084	43,855	78,939
Unaudited at 30 June 2013
Net present values	35,084	61,396	96,480

 

The lease agreement includes fixed payments and a purchase option at the end of the three year lease term. The agreement is non-cancellable and does not contain any further restrictions.

 

Notes to the condensed consolidated interim financial statements continued

 

 

14. Trade and other payables

 

	Unaudited as at 30 June 14 £		Unaudited as at 30 June 13 £		Audited as at 31 Dec 13 £
Current
Non-trade payables (secured) (i)	-		60,000		-
Trade payables (ii)	302,904		359,769		416,997
Other taxation & social security	64,472		72,556		54,101
Non-trade payables and accrued expenses (iii)	289,774		194,424		182,165
	657,150		686,749		653,263

 

 (i) In December 2012 a certain music licencing authority was granted security for payment of the remainder of a prior period liability by debenture on Immedia Broadcast Limited's assets; the liability was repaid in 2013.

 (ii) All trade payables are due within 30 days of the period end. At 30 June 2014 there were Euro denominated liabilities totalling €713 (30 June 2013: €nil; 31 December 2013: €nil).

(iii) Included within Non-trade payables and accrued expenses are uninvoiced charges for servicing, maintenance and licensing costs for the Group's radio networks, plus accruals for legal and professional fees.

 

 

15. Earnings per share

 

	Unaudited as at 30 June 14 Number		Unaudited as at 30 June 13 Number		Audited as at 31 Dec 13 Number
Weighted average number of shares in issue	14,556,844		14,556,844		14,556,844
Less weighted average number of own shares	(832,374)		(832,374)		(832,374)
Weighted average number of shares in issue for basic earnings per share	13,724,470		13,724,470		13,724,470

 

 

The basic and diluted earnings per share are calculated using the after tax profit attributable to equity shareholders for the financial period of £258,886 (30 June 2013: profit £180,758; 31 December 2013: profit £808,330) divided by the weighted average number of Ordinary shares in issue in each of the relevant periods: 30 June 2014: 13,724,470 shares (30 June 2013 and 31 December 2013: 13,724,470 shares).

 

The weighted number of shares used for the diluted earnings per share is calculated after reflecting the outstanding share options at the period end.

 

 

 

 

 

 

 

In accordance with Rule 26 of the AIM Rules for Companies, this interim financial statement will be available on the company's website at www.immediaplc.com 

 

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