Jaywing Regulatory News (JWNG)

On behalf of: WEARE 2020 plc ("2020", "the Company" or "the Group")

WEARE 2020 plc

Interim Results 2012/2013

WEARE 2020 plc (AIM: 2020) today announced its interim results for the six months ended 30 September 2012.

Performance Highlights

·; Gross profit £14.65m; (2011: £15.25m)

·; EBITDA before other income £1.16m; (2011: £2.06m)

·; Profit before tax ("PBT") £0.56m; (2011: £1.01m)

·; Profit after tax £0.46m; (2011: £0.79m)

·; Net debt £1.4m; (2011: £4.3m); undrawn banking facilities of £4.3million

·; Basic earnings per share 0.61 pence; (2011: 1.06 pence)

·; Diluted earnings per share 0.58 pence (2011: 1.02 pence)

Commenting on the results, Andrew Wilson, Chairman of WEARE 2020 plc, said: "In the toughest economic environment that the UK has seen for many years, I am pleased to report that WEARE 2020 plc has made an operating profit of £695k in the first half of the year (2011: (£1,267k). With improvements in the new business pipeline, together with the acquisition of Iris, the Sheffield based marketing agency, and the steps being taken to contain costs across the Group, we remain cautiously optimistic for the second half."

Enquiries:

WEARE 2020 plc

Kate McIntyre, Group Finance Director 0114 281 1200

Cenkos

Nick Wells 020 7397 8900

Ivonne CantuINTERIM RESULTS

The economic climate remains extremely challenging and the Group's performance for the first half of the financial year has unquestionably been impacted by this. Overall, Group profit before tax is down by £442k on last year. 

During the period the business has refocused its activities to face the market in two ways: 2020 and 2020 Consulting. Within 2020 are the Brand Communications and Digital Marketing propositions (formerly Agency) and the Contact centre business (formerly part of Dialogue). Within 2020 Consulting are the Marketing and Risk Consulting propositions, along with 2020 Technology. The analysis showing the performance of these two segments can be seen in note 4.

Alongside these changes, the Group is strengthening its expertise and infrastructure, as we bring together company-wide support services, such as Marketing, IT and Finance.

In the first six months of the year the 2020 segment has returned an operating profit of £606k (2011: £753k). Existing clients have been reducing spend and new business has been slower to come to fruition but there are now signs of increased tender activity. The acquisition of the Sheffield based Iris agency on 4 October brings new client contracts and new talent into the business. The integration is underway and early signs are positive.

2020 Consulting has been negatively impacted by the implementation issue in the Technology business reported in the 2012 annual results, but that is now substantially resolved and the business is enjoying a healthier pipeline. This is partially compensated for by a strong performance in the rest of the Consulting business. 

As stated in previous announcements, we continue to receive settlement of a contractual obligation from a client who has gone into liquidation. In the six months to 30 September 2012, we received £567k (2011: £285k). An additional amount of £157k was received in October. 

The Group continues to reduce its debt. Net debt at 30 September 2012 was £1.4m (2011: £4.3m).

Trading conditions are difficult, but we remain confident that the actions we are taking to win new business and develop existing client relationships, as well as manage costs tightly, are starting to deliver results. 

Andrew Wilson

Chairman

26 November 2012

Consolidated Interim Statement of Comprehensive Income (unaudited)

Consolidated interim balance sheet (unaudited)

Consolidated interim cash flow statement (unaudited)

 Consolidated interim statement of changes in equity (unaudited)

1. General Information

WEARE 2020 plc (the "Company") is incorporated and domiciled in the United Kingdom. The Company is listed on the AIM market of the London Stock Exchange. The registered address is 101 Finsbury Pavement, London, EC2A 1RS.

The interim financial information was approved for issue on 26 November 2012.

2. Basis of preparation

The consolidated interim financial statements for the six months ended 30 September 2012 have been prepared in accordance with applicable accounting standards and under the historical cost convention except for certain financial instruments that are carried at fair value.

The financial information for the year ended 31 March 2012 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 March 2012 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Section 498 (2) or Section 498 (3) of the Companies Act 2006.

The consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2012, which have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

3. Accounting policies

Except as described below, the principal accounting policies of WEARE 2020 plc and its subsidiaries ("the Group") are consistent with those set out in the Group's 2012 annual report and financial statements.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

There are no standards and interpretations in issue at 30 September 2012 that have been adopted by the EU but are not yet effective.

4. Segment information (unaudited)

The Group now reports its business activities in two areas: 2020 and 2020 Consulting, its two primary business activities. In previous years this has been reported in the three areas of Agency, Dialogue and Technology. The comparative information has been amended to reflect this change of management reporting. Unallocated represents the Group's head office function, along with intragroup transactions.

All the Group's activities are carried out within the UK. During the period one customer included within the Consulting segment accounted for greater than 10% of the Group's revenue. This customer accounted for 19.1% (2011: 9.2%) of Group revenue.

4. Segment information (unaudited) (continued)

4. Segment information (unaudited) (continued)

5. Tax expense (unaudited)

A reconciliation of the charge that would result from applying the standard UK corporation tax rate to profit before tax to the tax charge is given below.

6. Earnings per share (unaudited)

Earnings per share have been calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary shares in issue during the period. The calculations of basic and diluted earnings per share are:

Adjusted earnings per share have been calculated by dividing the profit attributable to shareholders before other income, amortisation, impairment and charges for share based payments by the weighted average number of ordinary shares in issue during the period. The numbers used in calculating the basic and diluted adjusted earnings per share are reconciled below:

7. Bank overdraft, borrowings and loans (unaudited)

As the loans are at variable market rates their carrying amount is equivalent to their fair value.

The borrowing facilities available to the Group at 30 September 2012 were £5.7 million (2011: £7.6 million) and, taking into account cash balances within the Group, there was £4.3 million (2011: £3.2 million) of available borrowing facilities.

A composite accounting system is set up with the Group's bankers, which allows debit balances on overdraft to be offset across the Group with credit balances.

8. Financial derivatives (unaudited)

In 2007 the Group purchased an interest rate swap of 6.19% for the period 2007 to 2012 for £4.0 million of its borrowings. This swap is designated a hedge of the interest expense relating to the Group loans. The contract came to an end in June 2012. Last year the contract was marked to market at 30 September 2011 and was a net liability of £156,000.

9. Provisions (unaudited)

Provisions relate to leases in the Group where the commercial benefit has either ceased or will cease before the normal expiry period.

10. Share capital (unaudited)

Authorised:

Allotted, issued and fully paid

No shares were issued in the period.

11. Post Balance Sheet event

On 4 October Scope Creative Marketing Limited, a 100% subsidiary of WEARE 2020 plc, acquired 100% of the share capital of Iris Associates Limited, a Sheffield based creative agency, for an initial consideration of £1.1m in cash. Based on certain performance criteria, additional consideration of up to £1.3m may become payable over the next three years.

12. Related party transactions (unaudited)

There were no significant changes in the nature and size of related party transactions for the period from those disclosed in the Annual Report for the year ended 31 March 2012.

INDEPENDENT REVIEW REPORT TO WEARE 2020 PLC

Introduction

We have been engaged by the company to review the interim financial information in the interim report for the six months ended 30 September 2012 which comprises the consolidated interim statement of comprehensive income, the consolidated interim balance sheet, the consolidated interim cash flow statement and the consolidated interim statement of changes in equity and the related notes 1 to 12. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the interim financial information.

This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, "Review of Interim Financial Information performed by the Independent Auditor of the Entity". Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusion we have formed.

Directors' responsibilities

The interim report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the interim financial information are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The interim financial information in the interim report has been prepared in accordance with the basis of preparation in note 2.

Our responsibility

Our responsibility is to express to the company a conclusion on the interim financial information in the interim report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Based on our review, nothing has come to our attention that causes us to believe that the interim financial information in the interim report for the six months ended 30 September 2012 is not prepared, in all material respects, in accordance with the basis of preparation described in note 2.

Grant Thornton UK LLP

Chartered Accountants

Sheffield

26 November 2012