30 Mar 2015 07:00
30 March 2015
IMMEDIA GROUP PLC
Preliminary Statement of Results for the year to 31 December 2014
Immedia Group Plc (AIM: IME) ("Immedia" or the "Group") a premier supplier of digital music, entertainment and commerce channels to leading brands, today announces its preliminary financial results for the year to 31 December 2014.
Overview
· £423,000 added to shareholder equity in 2014; £1.24 million added over the last two years
· Cash used to repay debt and for strategic investment
· Diversification into new non-retail corporate markets
· Development of audio-visual equipment business in 2015 following reduced contribution in 2014
· New brands added in 2014
· Tax assets for future use.
Financial Summary
12 months to 31 December 2014 | 12 months to 31 December 2013 | |
Revenue | £2,578,740 | £2,841,740 |
Earnings before interest, taxation, depreciation and amortisation (EBITDA) |
£204,307 |
£488,842 |
Profit from operations | £152,949 | £406,945 |
Other financial items | £517,200 | - |
Profit before tax | £668,130 | £405,619 |
Tax (expense)/credit | £(237,240) | £402,711 |
Total comprehensive income for the year attributable to equity shareholders of the parent |
£430,890 |
£808,330 |
Basic earnings per share | 3.14p | 5.89p |
Diluted earnings per share | 3.02p | 5.89p |
Basic pre-tax earnings per share | 4.87p | 2.96p |
Year-end balance of cash and cash equivalents | £324,345 | £614,745 |
Net cash | £203,988 | £371,481 |
Bruno Brookes, Chief Executive of Immedia, said:
"We invested in strengthening departmental leadership to support new opportunities and developed new systems to harness growth. We have engaged and provided services to new brands including BMW, MINI, Wembley City and O2 and spent considerable time and resource developing new markets in new territories, which we aim to announce shortly. Our market place has matured and with our new internal technology developments we are able to provide services to audiences anywhere, anytime."
Enquiries:
Immedia Group Plc | |
Bruno Brookes - Chief Executive | +44 (0) 1635 556200 |
www.immediaplc.com
| |
SPARK Advisory Partners Limited, Nominated Adviser | |
Mark Brady / Neil Baldwin | +44 (0) 203 368 3550 |
Chairman's Statement
2014 was a year in which the objective that we had set for the Group of creating shareholder value was achieved through a further strengthening of the balance sheet. We can now point to two years of growing value having added a total of £1.23 million to shareholders' equity, including £517,200 from a strategic investment in Audioboom Plc.
Cash balances have been maintained at a healthy level after paying down debt and making the strategic investment in Audioboom Plc.
On revenue of £2,578,740, down 9.3% on the previous year, the Group delivered EBITDA of £204,307 (2013: £488,842) and profit before tax of £668,130 (2013: £405,619) which translates to pre-tax basic earnings per share of 4.87p, up from 2.96p in 2013, as disclosed in note 4.
Trials for new customers have been successfully completed and as a result we are providing services to customers who operate in new market sectors.
The Group continues to innovate and is preparing to expand the range of services it can provide into exciting new areas and we are optimistic that we can build on the strong foundations that we have laid for the business.
Geoff Howard-Spink
Chairman
Chief Executive's Review
I am pleased to present our full year results for the financial year to 31st December 2014 where we have achieved profit before tax of £668,130 on revenues of £2,578,740. Revenues are down 9.3% on last year whilst the profit before tax is an improvement of £262,511 on the comparable period. We have strengthened shareholders' equity by £423,152 (up 37%) over the year. This is attributable to a £517,200 gain arising on an investment made in the year. Further details are given in note 6.
We invested in strengthening departmental leadership to support new opportunities and developed new systems to harness growth. We have engaged and provided services to new brands including BMW, MINI, Wembley City and O2 and spent considerable time and resource developing new markets in new territories, which we aim to announce shortly. Our market place has matured and with our new internal technology developments we are able to provide services to audiences anywhere, anytime.
For the year ahead, whilst there will be new challenges, I am confident we will benefit from a buoyant need for a broader digital marketing and communications mix in the business sector to deliver new channels to wider audiences, world-wide.
Bruno Brookes
Chief Executive
Financial review
Group trading results
A 65% improvement over 2013's record profit before tax is an excellent result for shareholders for 2014; this has been driven primarily from a £517,200 gain on an investment during the year. Developments under trial at the year-end should secure further positive progress of the business in 2015.
Services revenues grew by 17% within an overall year on year reduction in total revenues of 9% caused by reduced equipment sales; to counteract this we are developing our audio visual supplies business and expect to improve equipment sales and reduce the impact of fluctuations in future years. We maintained gross profit percentages in 2014 and our investment in new staff to develop the business for the future increased staff costs. Board costs have also risen with the easing of some salary reductions originally sacrificed by directors in 2013, whilst the move to new office premises at the end of 2013 has saved accommodation costs and improved the collaborative productivity of the Immedia team.
During 2014 we successfully developed and trialled new revenue streams, expanding our capabilities in new methods of communication with much wider customer audiences (including non-retail corporates) which we expect to contribute positively to our plans for expansion with new and existing customers.
Consolidated balance sheet and cash flows
Shareholders' equity increased 38% from £1.14m to £1.57m (and by a total of £1.24m from £0.33m over two years) reflecting earnings retained and value added to the Group's net assets.
In 2014 we used £122,907 to repay loans and borrowings; £90,000 for a strategic investment in Audioboom Plc; £19,952 to invest in equipment & IP and £7,738 in own shares for the employee benefit trust where vested share options are 75% funded by EBT shares. Working capital absorbed a further £47,784 in outflows and the Group ended the year with £324,345 cash.
We are now utilising historic tax losses against both trading and investment profits, recognising and realising deferred tax assets as a result. Fluctuations in the value of deferred tax recognised are expected to reduce in future, and further details of movements in 2014 are given in note 5.
Charles Barker-Benfield
Finance Director
Consolidated statement of comprehensive income
for the year ended 31 December 2014
| Note | 2014 | 2013 |
|
| £ | £ |
|
|
|
|
|
|
|
|
Revenue |
| 2,578,740 | 2,841,740 |
Cost of sales |
| (1,151,147) | (1,270,789) |
|
|
| |
Gross profit |
| 1,427,593 | 1,570,951 |
| |||
Administrative expenses before depreciation, amortisation and impairment charges |
|
(1,223,286) |
(1,082,109) |
|
|
| |
Earnings before interest, taxation, depreciation, amortisation and impairment charges (EBITDA) |
|
204,307 |
488,842 |
| |||
Depreciation, amortisation and impairment charges |
| (51,358) | (81,897) |
|
|
| |
Profit from operations |
| 152,949 | 406,945 |
|
|
| |
Finance income |
| 11,555 | 9,168 |
Finance cost |
| (13,574) | (10,494) |
Other financial items |
| 517,200 | - |
|
|
| |
Profit before tax |
| 668,130 | 405,619 |
Tax (expense)/credit | 3 | (237,240) | 402,711 |
|
|
| |
Profit after tax |
| 430,890 | 808,330 |
|
|
| |
Total comprehensive income for the year attributable to equity shareholders of the parent |
|
430,890
|
808,330 |
|
|
| |
Earnings per share |
| ||
Basic (pence) | 4 | 3.14 | 5.89 |
Diluted (pence) | 4 | 3.02 | 5.89 |
Consolidated balance sheet
At 31 December 2014
Note | 2014 £ | 2013 £ | |||||
| |||||||
Assets |
| ||||||
Property, plant and equipment |
| 136,235 | 166,231 | ||||
Intangible assets |
| 203,684 | 205,094 | ||||
Deferred tax asset | 5 | 218,900 | 288,700 | ||||
Total non-current assets |
| 558,819 | 660,025 | ||||
| |||||||
Current assets |
| ||||||
Inventories |
| 76,523 | 115,266 | ||||
Trade and other receivables |
| 960,986 | 712,451 | ||||
Prepayments |
| 52,903 | 29,988 | ||||
Other short term financial assets | 6 | 607,200 | - | ||||
Current and deferred tax asset | 5 | 45,300 | 109,300 | ||||
Cash and cash equivalents |
| 324,345 | 614,745 | ||||
Total current assets |
| 2,067,257 | 1,581,750 | ||||
| |||||||
Total assets |
| 2,626,076 | 2,241,775 | ||||
| |||||||
Equity |
| ||||||
Share capital |
| 1,455,684 | 1,455,684 | ||||
Share premium |
| 3,586,541 | 3,586,541 | ||||
Merger reserve |
| 2,245,333 | 2,245,333 | ||||
Share based payment reserve |
| 4,578 | 4,578 | ||||
Retained losses |
| (5,724,067) | (6,147,219) | ||||
Total equity |
| 1,568,069 | 1,144,917 | ||||
| |||||||
Liabilities |
| ||||||
Borrowings |
| - | 18,750 | ||||
Finance leases |
| 8,771 | 43,855 | ||||
Deferred tax liabilities | 5 | 103,440 | - | ||||
Total non-current liabilities |
| 112,211 | 62,605 | ||||
| |||||||
Current Liabilities |
| ||||||
Borrowings |
| 76,502 | 145,575 | ||||
Finance leases |
| 35,084 | 35,084 | ||||
Trade and other payables |
| 635,073 | 653,263 | ||||
Deferred income |
| 199,137 | 200,331 | ||||
Total current liabilities |
| 945,796 | 1,034,253 | ||||
Total liabilities |
| 1,058,007 | 1,096,858 | ||||
Total equity and liabilities | 2,626,076 | 2,241,775 | |||||
| |||||||
Consolidated statement of changes in equity
|
| Attributable to equity shareholders of the Company | |||||
Total equity as at 31 December 2014 | Share capital
£ | Share premium account £ | Merger reserve
£ | Share based payment reserve £ | Retained loss
£ | Total equity
£ | |
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 year | - | - | - | - | 430,890 | 430,890 | |
| Balance at 31 December 2014 |
1,455,684 |
3,586,541 |
2,245,333 |
4,578 |
(5,724,067)
|
1,568,069 | |
Total equity as at 31 December 2013 | Share capital
£ | Share premium account £ | Merger reserve
£ | Share based payment reserve £ | Retained loss
£ | Total equity
£ |
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
for the year ended 31 December 2013
|
| 2014 £ | 2013 £ |
|
|
|
|
Cash flows from operating activities |
|
|
|
Profit for the year before income tax |
| 668,130 | 405,619 |
|
|
|
|
Adjustments for: |
|
|
|
Depreciation, amortisation and impairment charges |
| 51,358 | 81,897 |
Financial income |
| (11,555) | (9,168) |
Gains from financial assets designated at fair value |
| (517,200) | - |
Financial expense |
| 13,574 | 10,494 |
Profit on sale of property, plant and equipment |
| - | (365) |
Increase in trade and other receivables and prepayments |
| (271,450) | (184,908) |
Decrease in inventories |
| 38,743 | 19,026 |
(Decrease)/increase in trade and other payables and deferred income |
| (19,384) | 21,929 |
Share based payment |
| - | 4,578 |
|
|
|
|
Net cash from operating activities |
| (47,784) | 349,102 |
|
|
|
|
Taxation |
|
|
|
Taxation |
| - | 4,711 |
|
|
|
|
Cash flows from investing activities |
|
|
|
Proceeds from sale of property, plant and equipment |
| - | 1,206 |
Interest received |
| 11,555 | 9,168 |
Acquisition of property, plant and equipment |
| (18,152) | (137,285) |
Acquisition of intangible assets |
| (1,800) | (5,700) |
Acquisition of investments |
| (90,000) | - |
|
|
|
|
Net cash from investing activities |
| (98,397) | (132,611) |
|
|
|
|
Cash flows from financing activities |
|
|
|
New bank loan |
| - | 45,000 |
Repayment of bank loan |
| (22,500) | (3,750) |
New finance leases |
| - | 116,675 |
Repayment of finance leases |
| (35,084) | (37,737) |
Interest paid |
| (13,574) | (10,494) |
Amounts repaid under invoice financing facility |
| (65,323) | (6,725) |
Purchase of own shares for EBT |
| (7,738) | - |
|
|
|
|
Net cash from financing activities |
| (144,219) | 102,969 |
|
|
|
|
Net (decrease)/increase in cash and cash equivalents |
| (290,400) | 324,171 |
Cash and cash equivalents at 1 January |
| 614,745 | 290,574 |
|
|
|
|
Cash and cash equivalents at 31 December |
| 324,345 | 614,745 |
Notes
The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. Statutory accounts for 2013 have been delivered to the registrar of companies, and those for 2014 will be delivered in due course.
The consolidated statement of comprehensive income, consolidated balance sheet at 31 December 2014, consolidated statement of changes in equity, consolidated statement of cash flows and associated notes have been extracted from the Group's 2014 statutory financial statements upon which the auditor's opinion is unqualified and which do not include any statements under sections 498(2) or 498(3) of the Companies Act 2006.
The 2014 accounts will be delivered to the registrar of companies following the Company's Annual General Meeting. The Annual Report and Notice of Annual General Meeting will be posted to the shareholders by xx April 2015 and will be made available on the Company's website (www.immediaplc.com) at that time.
This preliminary announcement was approved by the Board on 27 March 2015.
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 consolidated financial statements of the Company as at and for the year ended 31 December 2014 comprise the Company and its subsidiaries (together referred to as the "Group"). The Group is involved in marketing and communication services through the provision of interactive digital channels using music, radio and screen-based media to provide brand conversation and engaging entertainment. It also supplies, installs and maintains the equipment required to deliver these services.
2 Basis of preparation
The consolidated financial statements have been prepared and approved by the directors in accordance with International Financial Reporting Standards as adopted by the EU ("Adopted IFRSs").
The consolidated financial statements have been prepared in accordance with the same accounting policies adopted in the financial statements for the year to 31 December 2013 save for a new policy for financial assets recognised at fair value through profit or loss. 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.
The Directors have considered the Group's prospects for winning new business and reviewed a range of possible outcomes. On the basis of current financial projections prepared up to 30 June 2016, recent news of new contracts and of contract renewals, and continuing improvements in the management of costs, 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.
3 Tax (expense)/credit
| 2014 | 2013 |
| £ | £ |
Current tax (expense)/credit |
|
|
Current period | - | - |
Adjustment in respect of prior periods | - | 4,711 |
|
|
|
| - | 4,711 |
|
|
|
|
|
|
Deferred tax (expense)/credit |
|
|
|
|
|
Deferred tax | (237,240) | 398,000 |
|
|
|
Total tax (expense)/credit in consolidated income statement | (237,240) | 402,711 |
|
|
|
4 Earnings per share
| 2014 Number | 2013 Number |
|
|
|
Basic |
|
|
Weighted average number of shares in issue | 14,556,844 | 14,556,844 |
Less weighted average number of own shares | (832,374) | (832,374) |
|
|
|
Weighted average number of shares in issue for basic earnings per share | 13,724,470 | 13,724,470 |
|
|
|
|
|
|
Basic earnings per share | 3.14p | 5.89p |
|
|
|
| 2014 Number | 2013 Number |
Diluted |
|
|
Weighted average number of shares in issue | 13,724,470 | 13,724,470 |
Add shares which dilute | 551,826 | - |
|
|
|
Weighted average number of shares in issue for diluted earnings per share | 14,276,296 | 13,724,470 |
|
|
|
|
|
|
Diluted earnings per share | 3.02p | 5.89p |
|
|
|
The basic and diluted earnings per share are calculated using the after tax earnings attributable to equity shareholders for the financial period of £430,890 (2013: £808,330). For diluted earnings per share the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares. During 2013 all outstanding share options in issue had an exercise price in excess of the average market price in the year therefore there was no material dilutive effect arising from options in issue during 2013 and the basic and diluted earnings per share figures were the same. | ||
|
|
|
Pre-tax earnings per share | 2014 | 2013 |
|
|
|
Basic pre-tax earnings per share | 4.87p | 2.96p |
|
|
|
Diluted pre-tax earnings per share | 4.68p | 2.96p |
|
|
|
|
|
|
The basic and diluted pre-tax earnings per share are calculated using the before tax earnings attributable to equity shareholders for the financial period of £668,130 (2013: £405,619). | ||
5 Deferred tax assets and liabilities
Deferred taxes arising from temporary differences and unused tax losses are summarised as follows:
Deferred tax assets/(liabilities) | 1 January 2014 | Recognised in profit or loss | 31 December 2014 |
| £ | £ | £ |
|
|
|
|
Non-current assets |
|
|
|
Unused tax losses | 288,700 | (69,800) | 218,900 |
|
|
|
|
Current assets |
|
|
|
Unused tax losses | 109,300 | (64,000) | 45,300 |
|
|
|
|
Non-current liabilities |
|
|
|
Provisions | - | (103,440) | (103,440) |
|
|
|
|
| 398,000 | (237,240) | 160,760 |
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets/(liabilities) | 1 January 2013 | Recognised in profit or loss | 31 December 2013 |
| £ | £ | £ |
|
|
|
|
Non-current assets |
|
|
|
Unused tax losses | - | 288,700 | 288,700 |
|
|
|
|
Current assets |
|
|
|
Unused tax losses | - | 109,300 | 109,300 |
|
|
|
|
|
|
|
|
| - | 398,000 | 398,000 |
|
|
|
|
The deferred tax asset arising in respect of temporary differences between capital allowances and depreciation of £48,000 (2013: asset of £48,000) has not been recognised.
The residual trading losses carried forward of £1,782,000 create a potential deferred tax asset of £356,000 (2013: £409,000) of which £264,200 remains recognised in 2014 (£398,000 first recognised in 2013). £45,300 of this total is held as a current asset (2013: £109,300) and £218,900 as due after more than one year (2013: £288,700), as shown above. The balance has not been recognised as there is uncertainty over when these amounts will be utilised.
Within the parent company, a deferred tax liability of £103,440 has been recognised in 2014 on gains from financial assets classified as held for trading (FVTPL). A deferred tax asset of £103,440 has also been recognised in respect of residual losses which will be utilised upon realisation of this gain.
6 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, 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. At 31 December 2014 the fair value of the investment was £607,200 with a fair value change of £517,200 taken through profit or loss.
As at the date of approval of this report, the investment represents c.1.1% of Audioboom Group Plc's shares in issue and has a fair value of £532,800.