31 Mar 2008 13:31
Mirada plc (formerly YooMedia plc)
Interim results for the six months to 31 December 2007
Mirada plc ("Mirada" or "the Company"), the AIM quoted interactive media and games group announces interim results for the six months to 31 December 2007.
Highlights
* Disposal of the dating business as the Company focuses on its core strengths and high margin sales * Change of financial period end + These results do not include any of the significant post period end activity relating to the refinancing and the acquisition of Fresh, the impact of these activities on the balance sheet position will be represented in the full accounts for the 15 month period ended 31 March 2008, expected to be published this July * ‚£12.8million post period end fund raising + Mirada now debt free + Will no longer have to pay high yearly finance costs * Continuing successful integration of Fresh IT into the enlarged business + Reorganisation and strengthening of the Board + Opening up of international markets + Greater product mix
Michael Sinclair, Chairman, commented:
"The last six months has been a period of huge transition for the Company the benefits of which will be shown in the balance sheet in the next set of audited accounts for the 15 months ended 31 March 2008. I am confident that the trading for the next 12 months will show a distinct improvement due to the refocusing of the business, the international expansion and the new opportunities created from the acquisition of Fresh."
31 March 2008Enquiries:Mirada PLC +44 (0) 207 462 0870 Jose Luis Vazquez, Managing Director Nexus Financial Ltd +44 (0) 207451 7068 Nicholas Nelson/John Mundy Nicholas.nelson@nexusgroup.co.uk Seymour Pierce Limited +44 (0) 207 107 8000 Mark Percy/Parimal Kumar
Change of financial period end
As previously announced on 25 February 2008, the Company completed its restructuring which consisted of a refinancing and the acquisition of Fresh Interactive Technologies S.A. ("Fresh"). To enable shareholders to understand the impact of these transactions on the balance sheet of the Company the Board have decided to extend the financial period from the year ended 31 December 2007 to the 15 months ended 31 March 2008.
Under AIM regulations this extension of the period end means that the Company is required to prepare interim results for the 6 months ended 31 December 2007. It should be noted that these interim results do not show the impact on the balance sheet of this restructuring which took place in February 2008. Moreover, the income statement for the 15 months ended 31 March 2008, expected in late July, will not include the benefits of the restructuring, although a statement of current trading at that time will provide some indications as to trading progress.
Post period end restructuring
On 25 February 2008, the Company announced that all the resolutions relating to the restructuring had been passed. Full details these resolutions are included in the circular dated 31 January 2008 which is available on the Company website www.mirada.tv.
The main resolutions included:
* The Company's name being changed to Mirada plc; * ‚£8.42 million raised via the placing of ordinary shares for cash; * The acquisition of Fresh for shares. Immediately prior to the completion of the acquisition Fresh had received an equity cash investment of ¢â€š¬6 million from Barings Private Equity Partners Espana S.A. * Convertible loans owed by the Company totalling ‚£5.21 million being converted into ordinary shares; and * A share capital reorganisation.
The restructuring has resulted in the Company's net asset position being improved by approximately ‚£20 million, this improvement has arisen from:
* The Company receiving ‚£12.8 million in cash from the placing and the cash held by Fresh; * The conversion of the convertible loans; and * Goodwill arising from the acquisition of Fresh.
As mentioned above this improvement in the net asset position of the Company is not reflected in these interim results but will be evident in the final results for the 15 months ended 31 March 2008.
Chairman's Statement
These interim results are for the 6 months ended 31 December 2007. The period was dominated by negotiations leading to the acquisition and financing of the Company as announced last month.
The conclusion was an important strategic acquisition in Fresh and a fund raising of ‚£12.8 million to strengthen the Group's balance sheet, to provide working capital, to invest in new products and services as well as assist in financing the Group's proposed international expansion.
As part of the negotiation process, management prepared a detailed restructuring plan on how the Company could improve its trading. This plan included cost savings, the improvement of the Company's sales structure, focusing the Company's activity on business to business instead of business to consumer transactions, implementing a successful transition to a product based strategy, and expansion into the international market place. The Company has now implemented the majority of the areas included in the plan, the benefits of which will flow through to the income statement during 2008.
As part of the restructuring and following on from the valuation of the Company arising from the refinancing, a review was made of the carrying values of the goodwill held on the balance sheet. The result of the review was to impair the goodwill by ‚£12 million. This has an impact of reducing the net assets as at 31 December 2007 to ‚£1.3 million but it is important to note that this net asset position has subsequently been transformed by the above mentioned transaction. This improvement will be disclosed when the audited financial statements for the 15 months ended 31 March 2008 are published.
Results Summary
Revenue reduced to ‚£23.3 million compared to ‚£31.4 million in the 6 months ended 31 December 2006 ("H2 2006") which reflects the change in focus through becoming a service provider for third party brand owners rather than operating own brand services.
The Company recorded a loss before interest, tax, depreciation, amortisation and exceptional items of ‚£1.59 million (H2 2006: ‚£1.35 million profit). There are two major reasons for this movement, in H2 2006 there was a one-off credit to cost of sales of ‚£1.75 million in relation to a negotiated reduction in contractual liabilities relating to bandwidth and transmission costs, and in November 2006 the Company entered into an agreement to develop a head-to-head gaming system including a version of the Tringo game which gave rise to a profit of ‚£0.88 million.
Games & Gambling
Gross revenue decreased to ‚£19.76 million (2H 2006: ‚£25.91 million) and gross profit remained relatively constant at ‚£1.44 million (2H 2006: ‚£1.58 million). As mentioned above, this fall in gross revenue is a result of the Company's strategic focus towards supplying other brand owners rather than operating own brand services.
Interactive services
Gross profit has reduced to ‚£0.9 million from ‚£3.5 million, this reduction is due to the credit of ‚£1.75 million in relation to the reduction in contracted liabilities and the ‚£0.88 million profit recorded from the sale of the head-to-head gaming system.
Dating
As announced on 13 December 2007 the Company disposed of its 100% shareholding in Yoomedia Dating Group Ltd for ‚£250,000. This has given rise to a profit on disposal of ‚£621,000.
Board changes
As part of the restructuring, Josƒ© Luis Vƒ¡zquez and Rafael Martƒn Sanz were appointed to the Board on 25 February 2008. Josƒ© Luis Vƒ¡zquez has taken the position of Chief Executive Officer. On the same date Jeremy Fenn and John Swingewood stepped down from the Board and I became part-time Executive Chairman.
On 27 March 2008 it was announced that Neil MacDonald had resigned from the Board and from his position as Chief Operating Officer.
Outlook
The last six months has been a period of huge transition for the Company the benefits of which will be shown in the balance sheet in the next set of audited accounts for the 15 months ended 31 March 2008. I am confident that the trading for the next 12 months will show a distinct improvement due to the refocusing of the business, the international expansion and the new business created from the acquisition of Fresh.
Michael SinclairChairman
Consolidated income statement for the six months to 31 December 2007
Note Six months Six months Year ended ended ended 31 December 31 December 31 December 2007 2006 2006 (Unaudited) (Unaudited) (Unaudited) ‚£000's ‚£000's ‚£000's Revenue 3 23,270 31,353 62,586 Cost of sales (20,731) (25,819) (54,171) Gross profit 3 2,539 5,534 8,415 Administrative costs (4,133) (4,185) (9,258) Profit/(loss) before interest, (1,594) 1,349 (843)tax, depreciation, amortisation and exceptionals Depreciation (262) (459) (1,276) Amortisation of and impairment of (1,071) (671) (1,296)intangibles Impairment of goodwill (12,000) (16,383) (16,383) Provision for bad debts - (637) (637) Restructuring costs (964) (2,988) (2,988) Share-based payment charges - (285) (539) Total depreciation, amortisation (14,297) (21,423) (23,119)and exceptionals Total administrative costs (18,430) (25,608) (32,377) Operating loss (15,891) (20,074) (23,962) Profit on disposal of subsidiary 621 - - Finance income - 2 3 Finance expense (526) (388) (1,411) Loss on ordinary activities (15,796) (20,460) (25,370)before taxation Taxation - - - Loss for the financial period 3 (15,796) (20,460) (25,370) Loss per share - basic & diluted 4 (1.76p) (3.18p) (4.36p)
There were no other gains or losses recognised in the period.
There is no difference between the loss on ordinary activities before taxation and the loss for the periods stated above, and their historical cost equivalents.
Consolidated balance sheet as at 31 December 2007
Note 31 Dec 2007 31 Dec 2006 (Unaudited) (Unaudited) ‚£000's ‚£000's Non-current assets Goodwill 5 13,505 25,521 Intangible assets 334 1,378 Property, plant and equipment 1,536 2,123 Investments 18 18 Total non-current assets 15,393 29,040 Trade and other receivables 5,054 6,591 Cash and cash equivalents 363 139 Current assets 5,417 6,730 Total assets 20,810 35,770 Trade and other payables (12,627) (9,536) Provisions (880) (23) Current liabilities (13,507) (9,559) Net current liabilities (8,090) (2,829) Total assets less current liabilities 7,303 26,211 Interest bearing loans and borrowings (5,287) (5,518) Provisions for liabilities (763) (348) Accruals and deferred income - (2,512) Non-current liabilities (6,050) (8,378) Net Assets 1,253 17,833 Equity Issued capital 7 16,030 13,878 Shares to be issued 281 281 Share premium 78,779 78,755 Other reserves 2,065 1,877 Accumulated losses (95,902) (76,958) Equity shareholders' funds 6 1,253 17,833
Consolidated statement of cash flows six months to 31 December 2007
6 months 6 months Year ended ended ended 31 Dec 07 31 Dec 06 31 Dec 2006 (Unaudited) (Unaudited) (Unaudited) ‚£000's ‚£000's ‚£000's Cash flows from operating activities Loss for the period (15,796) (20,460) (25,370) Adjustments for: Depreciation of property, plant and 262 459 1,276equipment Amortisation and impairment of 13,071 17,054 17,679goodwill and intangible assets Profit on disposal of subsidiary (621) - - Profit on disposal of property, plant (7) - -and equipment Share-based payment charges - 285 539 Net finance costs 526 386 1,408 Cash flow relating to restructuring - 2,988 2,988provisions Operating cash flows before movements (2,565) 712 (1,480)in working capital Decrease in receivables 800 1,531 1,398 (Increase)/decrease in payables 1,510 (365) (212) Cash (used in)/generated by (255) 1,878 (294)operations Interest and similar expenses paid (122) (13) (1,004) Net cash from operating activities (377) 1,865 (1,298) Cash flows from investing activities Interest and similar income received - 2 3 Acquisition of subsidiary, net of - (352) (357)overdrafts Proceeds from disposal of subsidiary 250 - - Acquisition of property, plant and (17) (9) (1,024)equipment Proceeds from disposal of property, 8 - -plant and equipment Acquisition of other intangible (70) (89) (705)assets Net cash used in investing activities 171 (448) (2,083) Cash flows from financing activities Proceeds from issue of ordinary share 875 313 2,008capital New loans acquired 400 - 6,000 Repayment of loans (664) - (1,000) Repayment of capital element of (144) (58) (117)finance leases Net cash used in financing activities 467 255 6,891 Net increase in cash and cash 261 1,672 3,510equivalents Cash and cash equivalents at the 102 (1,533) (3,371)beginning of the period Cash and cash equivalents at the end 363 139 139of the period
Cash and cash equivalents (which are presented as a single class of assets on the face of the balance sheet) comprise cash at bank and other short-term highly liquid investments with a maturity of three months or less.
Notes to the Accounts1. General information
The information for the period ended 31 December 2007 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. Comparative figures for 31 December 2006 are taken from the full accounts, which have been delivered to the Registrar of Companies and contain an audit report that had an emphasis of matter paragraph for the going concern status of the Group. The information provided for the year ended 31 December 2006 have been restated following the adoption of IFRS for the first time in the results for the six month ended 30 June 2007. The Group has not adopted IAS 34: "Interim Financial Reporting" as the AIM Rules for Companies and related regulations do not require half-yearly financial reports to be prepared in accordance with IAS 34.
2. Accounting policies
The accounting policies set out below, have, unless otherwise stated, been applied consistently to all periods presented in these Group financial statements and in preparing an opening IFRS balance sheet at 1 January 2006.
These interim results are unaudited and do not constitute statutory accounts.
Basis of Preparation
The financial statements are presented in sterling, rounded to the nearest thousand unless otherwise stated. The consolidated financial statements of Mirada Plc have been prepared in accordance with International Financial Reporting Standards as adopted by the EU ('adopted IFRS').
The unaudited financial information presented in this document has been prepared on the basis of the expected accounting policies with which the Group will comply with in the accounts to 31 March 2008 and on the basis of all International Financial Reporting Standards ('IFRS'), including International Accounting Standards ('IAS') and interpretations issued by the International Accounting Standards Board ('IASB') and its committees, as adopted by the EU. These are subject to ongoing amendment by the IASB and subsequent endorsement by the European Commission and are therefore subject to possible change. As a result, information contained within this release will require updating for any subsequent amendment to IFRS required for first time adoption or those new standards that the Group may elect to adopt early.
The financial statements have been prepared in accordance with applicable accounting standards, and under the historical cost accounting rules, except for derivative financial instruments which are stated at their fair value, and non-current assets and disposal groups held for sale which are stated at the lower of previous carrying value and fair value less costs to sell.
Basis of consolidation
The Group financial statements consolidate the financial statements of Mirada plc and its subsidiary undertakings drawn up to 31 December 2007.
The subsidiaries have been included within the Group financial statements using the acquisition method of accounting. Accordingly the Group profit and loss account and Group cash flow statement includes the results and cash flows of the subsidiaries from the dates of acquisition up to 31 December 2007.
Subsidiaries
Subsidiaries are all entities over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights. The results of subsidiaries are included in the Group income statement from the date of acquisition, or in the case of disposals, up to the effective date of disposal. Inter-company transactions and balances between Group companies are eliminated upon consolidation.
Goodwill
Goodwill represents the difference between the cost of acquisition of a business and the fair value of identifiable assets, liabilities and contingent liabilities acquired. Identifiable intangibles are those which can be sold separately or which arise from legal rights regardless of whether those rights are separable. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash generating units and is tested annually for impairment. Any impairment is recognised immediately in profit or loss and is not subsequently reversed.
Intangible assets
Intangible assets acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Intangible assets are amortised on a straight-line basis over their useful lives in accordance with IAS 38 'Intangible Assets'.
Assets are not re-valued. The amortisation period and method are reviewed at each financial year end and are changed in accordance with IAS 8 'Accounting Policies, Changes in Accounting Estimates and Errors' if this is considered necessary.
Externally acquired computer software which is not integral to a related item of hardware is included in intangible assets and amortised over its estimated useful life of 2 years.
Costs relating to development of computer software for internal use are capitalised once the recognition criteria are met. These development costs are included within intangible fixed assets. Development costs are capitalised in accordance with IAS 38 if the directors are satisfied that the asset can be used or sold to generate a future economic benefit for the group and that that benefit can be reliably measured. A project will be capitalised either on completion or at a particular point in development where there exists an intention and the technical feasibility for the project to be completed.
The policy of the Group is to amortise these capitalised development costs over their useful economic lives which is expected to be between one and three years. These costs are expensed through the profit and loss account. In addition to this an annual impairment review is also carried out in accordance with IAS 36 and any impairment costs, if required, are also expensed.
Research costs are not capitalised but expensed to the profit and loss account as incurred.
Tangible fixed assets
Tangible fixed assets are stated at cost net of depreciation and any provision for impairment. Depreciation is calculated so as to write off the cost of fixed assets, less their estimated residual values, on a straight-line basis over the expected useful economic lives of the assets concerned. The principal annual rates used for this purpose are:
Computer equipment 33%Office equipment 33%Fixtures and fittings 33%
Short-leasehold improvements 20%
Deferred taxation
The charge for taxation is based on the loss for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date where transactions or events that result in an obligation to pay more, or a right to pay less, tax in the future have occurred at the balance sheet date, except that deferred tax assets are recognised only to the extent that the Directors consider that it is more likely than not that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on a non-discounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Provisions
A provision is recognised in the balance sheet when the Group has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Finance leases
Assets funded through finance leases are capitalised as property, plant and equipment and depreciated over their estimated useful lives or the lease term, whichever is shorter. The amount capitalised is the lower of the fair value of the asset or the present value of the minimum lease payments during the lease term at the inception of the lease. The resulting lease obligations are included in liabilities net of finance charges. Finance costs on finance leases are charged directly to the income statement.
Share based payments
The Company has adopted IFRS 2 `Share-based Payment' in the year. Under IFRS 2 the Company charges the profit and loss account with the fair value of the options issued. The fair value is calculated using the Black-Scholes method, which is spread over the vesting period allowing for expected lapses.
Compound financial instruments
Compound financial instruments comprise both liability and equity components. At issue date, the fair value of the liability component is estimated by discounting its future cash flows at an interest rate that would have been payable on a similar debt instrument without any equity conversion option. The liability component is accounted for as a financial liability.
The difference between the net issue proceeds and the liability component, at the time of issue, is the residual or equity component, which is accounted for as an equity instrument.
Transaction costs that relate to the issue of a compound financial instrument are allocated to the liability and equity components of the instrument in proportion to the allocation of the proceeds.
The interest expense on the liability component is calculated by applying the effective interest rate for the liability component of the instrument. The difference between any repayments and the interest expense is deducted from the carrying amount of the liability.
Financial liabilities
Interest-bearing bank loans and overdrafts are recorded initially at fair value, which is generally the proceeds received, net of direct issue costs. Subsequently, these liabilities are held at amortised cost using the effective interest method.
Finance charges, including premiums payable on settlement or redemption and direct issue costs are accounted for on an accrual basis to the income statement using the effective interest method and are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise.
Foreign currency transactions
Transactions denominated in foreign currencies are translated at the exchange rate at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement.
Revenue
Revenue consists of sales from interactive media services and dating services and is recognised as these services are provided or in accordance with the contract. Revenue is recognised when the significant risks and rewards of products and services have been passed to the buyer and can be measured reliably.
Gaming revenues, where the Company holds a gaming licence, are recognised on a gross basis and winnings are recognised as a cost of sale. All revenue is generated in the United Kingdom.
3. Segmental information
A segment is a distinguishable component of the Group that is engaged inproviding products or services within a particular economic environment. Theprincipal activities of the Group are divided into the following businesssegments; games and gambling, dating and interactive services. These segmentsare the basis on which the management analyses Group's performance. Theoperations of the Group are based in the UK and as a consequence, the Group hasonly a primary business segment and no secondary segment disclosure has beenmade. Six months Six months Year ended ended ended 31 Dec 2007 31 Dec 2006 31 Dec 2006 ‚£'000 ‚£'000 ‚£'000 Segment Revenue Games and gambling 19,763 25,906 50,690 Interactive services 3,119 4,481 8,996 Dating 388 966 2,900 Consolidated revenue 23,270 31,353 62,586 Gross profit Games and gambling 1,439 1,584 2,307 Interactive services 865 3,467 4,702 Dating 235 483 1,406 Consolidated gross profit 2,539 5,534 8,415 Segment result for period Games and gambling 941 1,636 1,901 Interactive services (34) 1,728 870 Dating (359) (304) (709) Unallocated central costs (16,344) (23,520) (27,432) Consolidated loss for the period (15,796) (20,460) (25,370)
There is no significant inter-segment revenue included in neither of the segments which is required to be eliminated.
4. Loss per share
The basic loss per share for the six months ending 31 December 2007 of 1.76p has been calculated by dividing the net loss for the period of ‚£15,796,000 by the weighted average number of shares in issue during the period. The Company has potentially dilutive ordinary shares being share options issued to staff and shares contracted to be issued.
For the periods ended 31 December 2007 and 31 December 2006 the diluted loss and earnings per share is calculated on the same basis as basic loss and earnings per share because the effect of the potential ordinary shares reduces the net loss per share and is therefore anti-dilutive.
The deferred shares are not included in the earnings per share or diluted earnings per share. These shares have no voting rights and are non-convertible and therefore do not form part of the ordinary share capital used for the loss per share calculation.
5. Goodwill
During the period an impairment review was carried out on the carrying value of the goodwill held in the balance sheet, this resulted in goodwill being impaired by ‚£12,000,000 (2H 2006: ‚£16,363,000).
6. Reconciliation of movement in shareholders' funds
Six months Six months Year ended ended ended 31 Dec 2007 31 Dec 2006 31 Dec 2006 ‚£'000 ‚£'000 ‚£'000 Loss for the period (15,796) (20,460) (25,370) New shares issued 875 3,661 5,052 Additions to capital reserves - share - 285 914option credit Minority Interest - - (357)
Net reduction in shareholder funds (14,921) (16,514) (19,761)
Opening shareholders funds 16,174 34,347 37,594 Closing shareholder funds 1,253 17,833 17,8337. Share Capital 31 Dec 07 31 Dec 07 31 Dec 06 31 Dec 06 No. ‚£ No. ‚£ Authorised Ordinary shares of 1p 1,800,000,000 18,000,000 1,200,000,000 12,000,000each Deferred shares of 1p 900,000,000 9,000,000 900,000,000 9,000,000each Total 2,700,000,000 27,000,000 2,100,000,000 21,000,000 Allotted, called up and fully paid Ordinary shares of 1p 912,242,053 9,122,421 696,964,276 6,969,643each Deferred shares of 1p 690,822,639 6,908,226 690,822,639 6,908,226each Total 1,603,064,692 16,030,647 1,387,786,915 13,877,869
During the 6 months ended 31 December 2007 the following share issues took place:
Date of Description Funds Raised Shares Nominal Share PremiumNotice Issued Value ‚£ No. ‚£ ‚£ 26 July 2007 Placing 375,000 37,500,000 375,000 - 8 August 2007 Placing 500,000 50,000,000 500,000 - Total 875,000 87,500,000 875,000 -8. Related party transactions
Transactions between the company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this note. There were no material transactions between the Group and the related parties during the period.
9. Events after the balance sheet date
On 25 February 2008 Mirada plc (formerly Yoomedia plc) completed a refinancing and the acquisition of 100% of the issued share capital of Fresh Interactive Technlogies S.A. ("Fresh"). The refinancing consisted of ‚£8.42 million being raised via a placing of shares for cash and the conversion into shares of convertible loans, including interest, totaling ‚£5.21 million. At the date of acquisition Fresh had received ¢â€š¬6 million from an equity cash investment from Baring Private Equity Partners Espana S.A. Full details on the resolutions passed in relation to the refinancing and acquisition are included in the circular dated 31 January 2008 which is available on the Company's website www.mirada.tv.
10. Other
Copies of unaudited interim results have not been sent to shareholders, however copies are available on request from the Company Secretary at the Company's registered office, Northumberland House, 155-157 Great Portland Street, London, W1W 6QP.
MIRADA PLC