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16 Jan 2009 09:58
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Upstream Marketing and Communications Inc.
("Upstream" or "the Company")
Trading Update
The Board of DirectorsΒ (theΒ "Board")Β announces anΒ update onΒ the Company's current trading and progress against its business plan.
Following the Company's Interim ResultsΒ announced onΒ 23Β September 2008,Β whichΒ highlightedΒ the uncertainty of the impact ofΒ the globalΒ economicΒ slowdown, the CompanyΒ has witnessed aΒ further deteriorationΒ in market conditions andΒ now expect operating profit to fall materiallyΒ belowΒ internal managementΒ expectations.
In the results for the full yearΒ endedΒ 31 DecemberΒ 2008,Β which are expected to be announced inΒ JuneΒ 2009,Β the CompanyΒ anticipatesΒ reportingΒ a profitΒ before tax, partially attributableΒ to non-recurring revenue from the sale of the Company's Media ServicesΒ AsiaΒ subsidiaryΒ in MayΒ 2008. However, in theΒ periodΒ since theΒ interimΒ results were announced, there has been aΒ significantΒ slowdown in revenueΒ as existing clients andΒ otherΒ prospects have held back or reduced their usual communications budgets for Q4 2008. Furthermore ourΒ current sales pipeline indicatesΒ that thisΒ trend will continueΒ throughoutΒ 2009.Β
On this basis, theΒ Board has commenced the implementation ofΒ a number ofΒ steps whichΒ itΒ believes will enable the CompanyΒ to deal with the challenging economic environment faced by the Group. These steps include aΒ scalingΒ backΒ of the Company'sΒ toplineΒ business plan, andΒ a reduction in the Company'sΒ costΒ base primarilyΒ through a decrease inΒ headcountΒ across the GroupΒ through attrition andΒ the removal ofΒ replacements and futureΒ hiresΒ from the budget. In addition,Β management is stepping up marketing effortsΒ with a view to improving revenue generation,Β reducing operational expenses, and monitoringΒ closelyΒ theΒ ongoingΒ cashflow requirements of the Group.
Given these measures and based on the existing outlook for the Group, the directors believe the Company has sufficientΒ working capitalΒ for the medium term.Β
Enquiries:
David Ketchum
+852 2973 0222
david@upstreamasia.com
www.aboutupstream.comΒ
James Harris/Angela Peace
Strand Partners Limited
+44Β (0)20Β 7409 3494Β
Claire Louise Noyce/Stephen Austin
Hybridan LLP
+44 (0)20 3159 5085
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