26 Mar 2009 07:00
26 March 2009
Avanti Screenmedia Group plc
("Avanti" or "the Company")
Unaudited Interim Results
Avanti Screenmedia Group plc (AIM: ASG.L), the AIM listed leading digital screen media specialist, announces its interim results for the six months ended 31st December 2008.
KEY POINTS
Revenue for the 6 months ended 31st December 2008 was £2.39m (2007: £2.64m);
Booked advertising sales increased by 15%;
Operating Loss for the period was £1.63m (2007: £2.46m);
Successful fundraising of £1.64m during 6 months under review;
New account wins Queens Arcade, Cardiff, Mitchells & Butler,
Reduction in overheads of £1m as a result of the new strategy
Simon Rees, CEO, commented:
"Despite the very challenging conditions within the wider economy and the advertising sector in particular, Avanti has continued to win contracts with new and existing clients. Innovation and new initiatives continue to be cornerstones of the Company's strategy as we strive to put Avanti at the forefront of the digital media sector.
"The Company now has a committed and highly focused team and I am confident that together we can continue drive Avanti forward during 2009 and beyond."
Enquiries:
Avanti Screenmedia Group plc 020 7902 2345
Simon Rees, CEO
Charles Stanley Securities 020 7149 6000
Nominated Adviser
Russell Cook/Freddy Crossley
Bishopsgate Communications Limited 020 7562 3350
Jenni Herbert/Siobhra Murphy
Introduction
During the period under review Avanti continued to consolidate its position as the UK's leading dedicated digital out of home media company, even in the face of the downturn in the global economy, and the UK media sector in particular. The Company's improved performance reflects the impact of our new strategy incorporating cost reduction and control, aligned with an emphasis on advertising sales growth, new business and new creative initiatives.
Financial
Revenue for the 6 month period was £2.39m (2007: £2.64m), a decline of 9.5%, but a 42.8% reduction in operating costs for the period from £2.81m to £1.63m led to a significant reduction in the operating loss to £1.63m (2007: loss of £2.46m).
The continued level of losses was in line with our expectations, arising in part as a result of the restructuring costs incurred in implementing the Company's new strategy. We have announced previously that the Company is continuing to seek further capital, and the Company continues to make progress in this regard.
Avanti has successfully grown its year-on-year advertising revenues from national brands by 15% for the period, against a total market advertising decline of 7%*. This growth follows a global shift from traditional media into digital out of home display which we anticipate is a trend that is set to continue in 2009 and beyond.
(* source : Media Week)
New Contracts
Avanti has an increasingly strong new business pipeline. The Company has achieved a number of notable account wins during the current year including most recently the Queens Shopping Arcade in Cardiff, and a new 10 year agreement with the UK's premier shopping mall, Bluewater. Avanti is also pleased to announce that it has commenced roll-out of a digital screen network within the Sizzling Pub Company branded outlets owned by Mitchells & Butlers. Avanti already operate a network of digital screens within 71 'Scream' pubs also owned by the pub operator.
Funding
The Company raised a total of £1.64m through equity share placings and convertible loans during the 6 months to 31st December 2008. In particular we have announced that Neo Media Group SA ("Neo Media") now holds 29.98 per cent of the Company's issued share capital and a further £1.40m of Convertible Loans.
While the Company had cash of £419,000 at the period end, the Board has been seeking to secure further short-term funding, and continues to explore potential sources of additional finance to enable the Company to take advantage of certain new business opportunities to support the development of the business.
Outlook
The Company continues to develop its new relationship with Neo Media, and a number of new initiatives are emerging from the partnership. At the same time the Board continues to identify new market opportunities, which, if they are to be exploited fully for the benefit of the Company and its shareholders, will require further capital investment in new networks, sales and marketing. While the Board is confident that the continued and successful implementation of the strategy will deliver medium to long term growth for the Company and its shareholders, the short term prospects are dependent upon a number of factors. These include the prevailing general economic conditions, securing sufficient working capital for the Company's working requirements and for the on-going development and expansion of the business.
Importantly Avanti is now successfully attracting a wider portfolio of blue chip advertiser brands to our networks, a number of whom are now repeat advertisers. These include Guinness, Lucozade, Universal, Toyota, BBC, Vodafone, the Central Office of Information and Unilever.
Innovation and new initiatives continue to be cornerstones of the Company's strategy, and in December Avanti successfully launched its new marketing initiative, "Digital Life", a consolidation play within the digital display sector. Digital Life is the start of greater collaboration with other organisations within the sector and a first of its kind. We have also announced today the launch of "Digital Youth", a similar sales and marketing venture with Sub TV, the owner of the UK's largest universities' digital screen network.
As a leader in this maturing media sector, in May Avanti will launch and host across its networks the world's first short film festival shown exclusively on digital out of home networks. Art by Chance will screen 30 second films of all genres, including fiction, animation and documentary. Art by Chance will take place in 59 cities across 11 countries including the UK, USA, Canada, Germany and the Netherlands.
While market conditions remain challenging, Avanti is making steady and tangible progress at the forefront of the digital media sector. While the Company cannot escape the impact of the economic downturn, the Directors are convinced that Avanti is well positioned to generate significant growth once conditions in the media and advertising markets begin to improve.
Consolidated Income Statement
For the six months ended 31st December 2008
| 6 months | 6 months | 12 months | |
| ended | ended | ended | |
| 31.12.08 | 31.12.07 | 30.06.08 | |
| Unaudited | Unaudited | Audited | |
| Continuing operations | £ | £ | £ |
| Revenue | 2,394,590 | 2,637,498 | 4,287,745 |
| Cost of sales | (2,059,757) | (2,261,240) | (4,038,416) |
|
| |||
| Gross profit | 334,833 | 376,258 | 249,329 |
| Operating expenses | (1,896,749) | (2,841,223) | (5,151,058) |
| (Loss) from operations | (1,561,916) | (2,464,965) | (4,901,729) |
| Finance income | 3,680 | - | 72 |
| Finance expense | (33,859) | (81,395) | (167,788) |
| (Loss) on Ordinary Activities before taxation | |||
| (1,592,095) | (2,546,360) | (5,069,445) | |
| Taxation | - | - | - |
| (Loss) for the period attributable from continuing operations | |||
| (1,592,095) | (2,546,360) | (5,069,445) | |
| Attributable to: | |||
| Equity holders of the parent | (1,592,095) | (2,546,360) | (5,069,445) |
| Earnings per share for continuing operations | |||
| Basic (loss) per share (see note 3) | (2.96p) | (8.47p) | (14.00p) |
| Diluted (loss) per share (see note 3) | (2.96p) | (8.47p) | (14.00p)) |
Consolidated Unaudited Balance Sheet as at 31st December 2008
| 6 months | 6 months | 12 months | |
| ended | ended | ended | |
| 31.12.08 | 31.12.07 | 30.06.08 | |
| Unaudited | Unaudited | Audited | |
| £ | £ | £ | |
| Assets | |||
| Non Current Assets | |||
| Property, Plant & Equipment | 2,139,938 | 3,514,914 | 2,896,593 |
| Goodwill | 1,965,119 | 1,965,119 | 1,965,119 |
|
|
|
| |
| 4,105,057 | 5,480,033 | 4,861,712 | |
| Current Assets | |||
| Inventories | 108,958 | 120,495 | 108,958 |
| Trade & other receivables | 829,784 | 2,035,485 | 925,584 |
| Cash & short term deposits | 418,523 | 772,148 | 684,489 |
|
|
|
| |
| Total Current Assets | 1,357,265 | 2,928,128 | 1,719,031 |
| Total Assets | 5,462,322 | 8,408,161 | 6,580,743 |
| Liabilities and Equity | |||
| Trade and other payables | 3,180,025 | 3,995,566 | 4,245,011 |
| Convertible loans | 2,111,675 | - | 736,656 |
| Non current liabilities | 135,275 | 545,711 | 172,875 |
| Total liabilities | 5,426,975 | 4,541,277 | 5,154,542 |
| Equity attributable to equity holders of the parent company | |||
| Share capital | 588,225 | 409,861 | 411,861 |
| Share premium | 37,380,734 | 37,317,111 | 37,317,111 |
| Capital redemption reserve | 12,758 | 12,758 | 12,758 |
| Share based payment reserve | 281,508 | 271,818 | 345,254 |
| Convertible loan reserve | 31,965 | - | 6,965 |
| Retained earnings | (38,259,843) | (34,144,664) | (36,667,748) |
| Shareholders' Funds and Liabilities | 5,462,322 | 8,408,161 | 6,580,743 |
Consolidated Unaudited Statement of Changes in Equity
| Share | Share | Other | P&L a/c | Total | |
| Capital | Premium | Reserves | Reserves | Reserves | |
| 2008 | £ | £ | £ | £ | £ |
| At 30th June 2008 (Audited) | 411,861 | 37,317,111 | 364,977 | (36,667,748) | 1,426,201 |
| (Loss) for the period | - | - | - | (1,592,095) | (1,592,095) |
| Share Issue | 176,364 | - | - | - | 176,364 |
| Premium on shares issued | - | 63,623 | - | - | 63,623 |
| Share based payments | - | - | (63,746) | - | (63,746) |
| Issue of convertible notes | 25,000 | 25,000 | |||
| At 31st December 2008 (Unaudited) | 588,225 | 37,380,734 | 326,231 | (38,259,843) | 35,347 |
| Share | Share | Other | P&L a/c | Total | |
| Capital | Premium | Reserves | Reserves | Reserves | |
| 2007 | £ | £ | £ | £ | £ |
| At 30th June 2007 (Audited) | 257,235 | 36,777,768 | 209,725 | (31,598,303) | 5,646,424 |
| (Loss) for the period | - | - | - | (2,546,361) | (2,546,360) |
| Share Issue | 152,626 | - | - | - | 152,626 |
| Premium on shares issued | - | 539,343 | - | - | 539,343 |
| Share based payments | - | - | 74,851 | - | 74,851 |
| At 31st December 2007 (Unaudited) | 409,861 | 37,317,111 | 284,576 | (34,144,664) | 3,866,884 |
Consolidated Unaudited Cash Flow
For the six months ended 31st December 2008
| 6 months | 6 months | 12 months | |
| ended | ended | ended | |
| 31.12.08 | 31.12.07 | 30.06.08 | |
| Unaudited | Unaudited | Audited | |
| £ | £ | £ | |
| Cash flow from operating activities | |||
| (Loss) from operations before taxation | (1,561,916) | (2,464,965) | (4,901,729) |
| Depreciation and amortisation of non-current assets | 798,899 | 815,228 | 1,661,099 |
| Share based payments | (63,747) | 74,851 | 148,287 |
| (Increase)/Decrease in stock | - | 124,358 | 135,895 |
| (Increase)/Decrease in trade and other receivables | 95,800 | (445,960) | 663,941 |
| Increase/(Decrease) in trade and other payables | (389,106) | 947,876 | 1,036,952 |
| Cash generated from operations | (1,120,070) | (948,612) | (1,255,555) |
| Interest received | 3,680 | 83 | 72 |
| Interest paid | (33,859) | (81,478) | (139,612) |
| Net cash (used in)/generated by operating activities | (1,150,249) | (1,030,007) | (1,395,095) |
| Cash flow from investing activities | |||
| Payments for property, plant and equipment | (42,244) | (120,227) | (452,645) |
| Net cash used in investing activities | (42,244) | (120,227) | (452,645) |
| Cash flow from financing activities | |||
| Proceeds from borrowing | 1,400,000 | 425,000 | 743,621 |
| Proceeds from equity issue | 239,987 | 691,970 | 693,970 |
| Movement in finance leases | (96,005) | (152,965) | (279,427) |
| Repayment of existing loans and overdrafts | - | (100,000) | - |
| Net cash generated by/(used in) financing activities | 1,543,982 | 864,005 | 1,158,164 |
| Net (decrease)/increase in cash and cash equivalents | 351,489 | (286,229) | (689,576) |
| Cash and cash equivalents at the beginning of the financial year | 67,034 | 756,610 | 756,610 |
| Cash and cash equivalents at the end of the financial year | 418,523 | 470,381 | 67,034 |
| Represented by: | |||
| Cash and short term deposits | 418,523 | 772,148 | 684,489 |
| Loans and Overdrafts | - | (301,767) | (617,455) |
| 418,523 | 470,381 | 67,034 |
Notes to the Interim Report
For the six months ended 31st December 2008
1. The financial information contained in the Interim Report does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. The comparative financial information for the period ended 30th June 2008 is an abridged version of the group's published financial statements for that year, which contained an unqualified audit report and did not contain a statement under s237(2) or s237(3) of the Companies Act 1985 and which has been filed with the Registrar of Companies. Neither the results for the periods ended 31 December 2007 nor 31 December 2008 have been subject to audit or review by the auditors.
2. This financial information is prepared on a basis consistent with International Financial Reporting Standards and the accounting policies disclosed in the accounts for the year ended 30 June 2008. These interim financial statements do not contain all of the information which is required to be disclosed in order to comply with IAS 34 'Interim Financial Reporting' which is not compulsory for AIM listed companies.
The Directors are currently engaged in raising further funds for the group. They are confident that their efforts will be successful and accordingly these interim financial statements have been prepared on the going concern basis.
3. The calculation of basic and diluted loss per share is based on the loss attributable to ordinary shareholders, divided by the weighted average numbers of shares in issue during the period.
| 6 months ended 31.12.08 | 6 months ended 31.12.07 | 12 months ended 30.06.08 | |
| Continuing | |||
| Computation of diluted and basic loss per share | |||
| Net loss | £1,592,095 | £2,546,360 | £5,069,445 |
| Weighted average number of shares outstanding | 53,811,010 | 30,053,905 | 36,198,907 |
| Basic loss per share | 2.96p | 8.47p | 14.00p |
| There is no dilution to the basic loss per share in the current or previous periods arising from the share options or convertible loans in issue. | |||
4. All revenue for the six months to 31 December 2008 was derived from the provision of screen media and related advertising services within the United Kingdom. Consequently the group considers that it only has one business segment and one geographical segment.