INC.L Regulatory News (INC)

31 Mar 2005 07:01

Avanti Screenmedia Group PLC31 March 2005 For Release 07.00 am 31 March 2005 AVANTI SCREENMEDIA GROUP PLC 31 DECEMBER 2004 INTERIM RESULTS Profitable; Results in-line with market expectations; Confident Outlook Avanti Screenmedia Group Plc, ("Avanti"), suppliers of retail televisionservices (called "screenmedia") to clients in high street retail and the pub and bar market, announces its Interim Results for the 6 month period ended 31December 2004. Avanti's clients use screenmedia to entertain customers, build brand, promoteproducts and generate new advertising revenue. Avanti has a complete in-housecompetence to deliver these services. It builds satellite or terrestrialdistribution screen networks, creates channel strategies, makes video contentand sells media space. Commenting on the results, John Brackenbury CBE, Chairman said: "I am delighted to present our results for the 6 month period ended 31 December2004 and to be able to report further progress in the development of Avanti'sbusiness. Following its flotation on AIM in July 2004, Avanti has substantiallyincreased its sales and marketing team and has added the operational resourcesneeded to execute the contracts we expect to be forthcoming. A move to largerpremises in East London in November 2004 and investment in network and businessinfrastructure has prepared the company for planned growth. Some large potentialcontracts remain under negotiation but I am pleased, nonetheless, to reportprofitable trading despite the increase in overheads assumed in order to meetour growth expectations. The acquisition of Freelance Media Limited (which trades as "Screen Network") inJanuary 2005 completes the full range of Avanti's market offering, and buildingon the contracts already in hand the response to marketing efforts has been verypromising. Regarding prospects, Mr Brackenbury said: "Avanti is now in a strong position to convert its market leadership into strongprofit and we remain confident that performance for the full year will meetmarket expectations." Financial Highlights • Turnover of £3.513m (2003 nine month period: £2.603m), up 35%; • Operating profit of £292k (2003 nine month period: £572k); • Profit before tax of £287k (2003 nine month period: £564k); • Net cash increased to £2.867m (2003: Net Debt £947k); • Additional £3m (gross) new money raised on 31st December 2004 by wayof a placing of 1,714,286 ordinary shares with institutions at a price of 175pper share; • Post half year end acquisition of Freelance Media Ltd (Screen Network)for £1.73m on 24th January 2005. Operational Highlights • MVN product well received by the pub and bar market: sales to GRSInns, London & Edinburgh Inns, Chapman Group, Hardys & Hanson and Elite Leisureresulting in 685 sites now contracted for MVN and Magnetic Channels with aweekly audience of 3.35 million. A new higher end video DJ product was developedand sold to Litten Tree. • Move into the Shopping Centre medium via the acquisition of FreelanceMedia resulting in 9 shopping centre contracts signed with a weekly audience of2.93 million. Further shopping centre agreements are currently being negotiated. • New lifestyle brands advertising on the MVN and Magnetic Channelinclude Levi's, Wrangler and several films with over 35% repeat bookers. • Current pilot with Boots plc continues to operate, with discussionsregarding roll-out ongoing. Avanti is currently in talks with a number of majorretailers which may result in pilots or roll-outs in the near future. Enquiries: Avanti Screenmedia Group plc www.avanti-screenmedia.com Gary Truman, Financial Director 0207 749 1600 (today) Binns & Co PR 020 7786 9600Peter Binns 07768 392 582Jacqui Graves 020 7153 1486 Seymour PierceMark Percy / John Depasquale 020 7107 8000 INTERIM RESULTS Summary of Avanti's business Avanti is the market leader (by clients, sites installed, revenues and profits)in the UK for the provision of in-store television services, whereby it buildssatellite or terrestrial distribution and screen networks, creates channelstrategies, makes video content and sells media space. Clients use this serviceto entertain customers, build brand, promote products and sell advertisingin-store. Avanti is the only supplier in the UK market with a complete turnkey competencein-house, from engineering and network maintenance to video production and mediasales. Avanti's large scale market research and operational network development hasshown that the presence of screen based advertising can increase the amount oftime customers spend in-store and generate sales uplift of advertised brands.Whilst Avanti is not dependent on media revenues, it benefits from significantupside as this market (and Avanti's share of it) grows. The marginal cost ofgenerating additional advertising revenues is low. Avanti now has the critical mass to generate sustainable profit in this sector.It is crucial that we are able to deliver cross-platform buying opportunities toour media clients since this creates the economies of scale for them that theysee in other more traditional media. As predicted at the time of our flotation, our market has matured very quickly,and most retailers now understand why they should consider screenmedia. We feltalso that it was a significant sign of market maturity when in the FT on March15th John Wren, CEO of Omnicom (the world's largest advertising agency) listedretail advertising as one of the four core competencies of the advertisingagency of the future. Strong market acceptance of what remains quite a newproduct combined with the advantages Avanti can offer with its integratedsolution (lower costs, higher quality) and the financial strength to delivercomfort on execution have resulted in intense activity with new clientprospects. Current trading and future prospects Current trading is good, and given the range of contracts under negotiation weremain positive in our outlook and fully expect to meet market expectations inthe current financial year " D J Williams Date: 31st March 2005 Chief Executive INTERIM RESULTS GROUP PROFIT AND LOSS ACCOUNT for the 6 month period ended 31st December 2004 Notes Unaudited Unaudited Audited 6 months 9 months 15 months to 31/12/04 to 31/12/03 to 30/06/04 £'000 £'000 £'000 Turnover 3,513 2,603 4,620Cost of sales (1,841) (1,178) (1,621) -------- --------- -------- Gross Profit 1,672 1,425 2,999 Administration expenses (1,380) (853) (2,164) -------- --------- -------- Operating Profit/(Loss) 292 572 835 Interest receivable 39 5 10Interest payable (44) (13) (50) -------- --------- -------- Profit / (Loss) on OrdinaryActivities before Taxation 287 564 794 Tax on profit on ordinary - - 98activities -------- --------- -------- Profit after taxation 287 564 892 ======== ========= ======== Earnings per Share Basic earnings / (loss) per 3 2.92p 8.21p 12.90pshare ======== ========= ======== Diluted earnings / (loss) per 3 2.64p 7.98p 12.58pshare ======== ========= ======== INTERIM RESULTS GROUP BALANCE SHEET at 30th June 2004 Unaudited Unaudited Audited At 31/12/04 At 31/12/03 At 30/06/04 £'000 £'000 £'000 £'000 £'000 £'000Fixed AssetsTangible Assets 2,096 1,598 1,657Intangible Assets - 29 34 29Goodwill- Negative Goodwill (683) (1,164) (923) ------- ------- ------ 1,442 468 763 Current AssetsStocks 133 123 152Debtors 3,976 1,244 2,031Cash at Bank and in 4,575 709 363Hand ------ ------- ------ 8,684 2,076 2,546 ------ ------- ------Creditors: Amountsfalling due within oneyear (2,260) (1,363) (1,723) ------ ------- ------ Net Current Assets 6,424 713 823 ------- ------- ------ 7,866 1,181 1,586 Creditors: Amounts (553) (187) (173)falling due after one ------- ------- ------year Net Assets 7,313 994 1,413 ======= ======= ====== Capital and ReservesCalled up Share Capital 116 - 76Share Premium Account 6,216 628 643Profit and Loss Account 981 366 694 ------- ------- ------ Shareholders' Funds 7,313 994 1,413 ======= ======= ====== INTERIM RESULTS GROUP CASH FLOW STATEMENT at 31st December 2004 Unaudited Unaudited Audited 6 months 9 months 15 months to 31/12/04 to 31/12/03 to 30/06/04 £'000 £'000 £'000 Net cash (outflow)/inflow from (1,097) (228) (812)operating activitiesReturns on investments and (5) (8) (40)servicing of financeTaxation - - 98Capital expenditure and financial (697) (208) (464)investmentInvestment in subsidiary - - -undertaking ---------- ---------- ---------Net cash outflow before financing (1,799) (444) (1,218)Financing 5,736 970 952 ---------- ---------- ---------Increase / (Decrease) in cash 3,937 525 (266) ========== ========== ========= Reconciliation of Operating Profitto Net Cash (Outflow)/Inflow fromOperating Activities Operating profit / loss 292 572 835Depreciation 267 218 473Amortisation of goodwill (240) (281) (522)Loss of disposal of tangible (2) - -assets(Increase) in stocks 20 (84) (113)(Increase) in debtors (1,946) (907) (1,760)Increase in creditors 512 254 276 ---------- ---------- --------- (1,097) (228) (812) ========== ========== ========= Reconciliation of Movement of Funds/ (Net Debt) (Net Debt) / Funds at start of (947) (947) (279)periodIncrease / (Decrease) in cash 3,937 525 (266)Cash inflow from increase in 21 (292) (369)loansCash inflow from increase in (144) (33) (33)finance lease obligations ---------- ---------- ---------(Net Debt) / Funds at close of 2,867 (266) (947)period ========== ========== ========= Analysis of Funds / (Net Debt) Cash at Bank and in Hand 4,575 709 363Bank overdrafts (869) (147) (594) ---------- ---------- --------- 3,706 562 (231)Bank loans due within one year (300) (620) (522)Bank loans due within one year (374) (171) (163)Finance leases and hire purchase (165) (37) (30)agreements ---------- ---------- ---------Funds / (Net Debt) at close of 2,867 (266) (947)period ========== ========== ========= Notes 1. Presentation of results This Interim Statement was approved by the directors on 15th March 2005. The financial information contained in the Interim Statement does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985. Thecomparative financial information for the period ended 30th June 2004 is anabridged version of the group's published financial statements for that year,which contained an unqualified audit report. The interim financial statements have been prepared on the basis of theaccounting policies set out in the 2004 financial statements of AvantiScreenmedia Group plc. The results have been prepared using accounting policies and practicesconsistent with those adopted in the 2004 Report and Accounts but have not beenaudited. The audited results of Avanti Communications Limited (the former holdingcompany) for the year ended 31st March 2003 have been filed with the Registrarof the Companies and on which the auditors gave an unqualified audit opinion. 2. Negative Goodwill written back Negative Goodwill arising on the acquisition of Translucis Holdings Limited isbeing amortised over a period of 36 months from 1st June 2003 and is beingmatched to the depreciation of the revalued assets from which it arose. 3. Basic and diluted earnings / (loss) per share The calculation of the basic and diluted earnings / (loss) per share is based onthe earnings / (loss)attributable to ordinary shareholders, divided by theweighted average number of shares in issue during the year. 4. Reconciliation of shareholders fundsThe reconciliation of movements in shareholders' funds isas follows: £ Shareholders' funds at 30th June 2004 1,412,787 Premium on shares issued during period 5,572,640Increase in share capital 40,220Profit for the period 286,903 -------- Shareholders' funds at 31st December 2004 7,312,550 ======== This information is provided by RNS The company news service from the London Stock Exchange