MIRA.L Regulatory News (MIRA)

21 Jul 2006 07:00

Yoomedia PLC21 July 2006 YooMedia plc / Ticker: YOO / Index: AIM / Sector: Media 21 July 2006 YooMedia plc ("YooMedia" or the "Company") Update on Restructuring Initiatives YooMedia plc, the AIM-traded interactive media and gaming group, is pleased toannounce an update on its on-going restructuring programme aimed atrationalising the business, strengthening its balance sheet and re-positioningthe Company's product offering to capitalise on growing opportunities within theinteractive media market. The Company is pleased to announce that it has agreed new financing facilitieswith Mentor Marketing & Investment Ltd ('MMI') which is replacing the previouscredit facilities provided by Lloyds TSB. MMI, an active investor and financeprovider in the marketing and marketing services sector, has agreed to provideequivalent financing to the bank debt and in addition, further financing to acombined total facility of £2.9 million towards the completion of there-structuring of the Company's business activities. This in tandem with itsrecent convertible loan note transaction materially improves the financialhealth of the Group and provides the basis on which the remaining restructuringobjectives and any associated financing requirements can be achieved. The on-going restructuring programme has been aimed at creating the correctbusiness structure and product offering and rebuilding shareholder value. Anumber of significant initiatives have been made from which the Company is nowbeginning to benefit, although the full effects of these have not been realisedat this stage. These actions have characterised trading in the first half of2006. It was announced with the preliminary results for 2005 that the Companyexpected to achieve positive EBITDA in 2006. This remains unchanged. However,unaudited interim results, which will be announced in September, indicate anoutcome below expectations. The Company believes that it is in the final stagesof its restructuring programme and now has the right balance and ingredients tocreate shareholder value. In order for shareholders to understand the current situation, the Board ispleased to provide an update on the reasons why it remains confident of the longterm outlook and future of the Company. Significant progress has been achieved in the Games & Gambling division. Themajor project to develop and launch the head to head gaming system for CatalystMedia Group is now underway but this falls outside of the first half reportingperiod. This will however impact the year end accounts. The Company continues tooperate the Avago channel in advance of the launch of the new Gala channel inits place. The project to launch on the ntl cable service has been deferred totie in with the Gala channel launch. This slight delay has impacted short butnot long term revenue. The Company's Interactive Services division is delivering the previouslyannounced data-casting services on Freeview for Gemstar, Electra, tvtv andVirgin Radio. These will make a material contribution to revenues in the secondhalf of the year, as will the contract with NHS Direct, which was extended for afurther two years in April. Interactive marketing business performed well in thefirst half, including the mobile and web services provided for Anheuser Busch'sBudweiser world cup campaign, and further for Boots and Nestle, amongst others. It had been announced in February 2006 that the Board was examining strategicoptions for YooMedia Dating including a potential sale or spin-off of thebusiness. Following refinancing this process has been discontinued and YooMediais concentrating on developing the growth of both the Dateline and Avenuesbranded businesses. Although not core to the Company's activities, the Board isconscious of the value of the dating business, which will be realised eitherfrom in-house development or disposal at an appropriate time. Under the convertible loan arrangement concluded in May 2006, YooMedia drew down£6m of the £7.5m facility. The funds were used to reduce bank debt and meetother trade debt liabilities. While on an operating basis and excluding historicdebt re-payment, the Company was cashflow positive in the first quarter, fullcash break even was not achieved in the first half. Bank debt stood at less than£2m by the end of the first half, compared with £5.4m for the same period in2005. YooMedia Group MD Neil MacDonald said: "I am pleased to report that we are nowentering the final stage of the re-structuring and transformation of YooMedia.During the last six months we have not only implemented far reaching changes inour business but we have also seen new business lines emerging into revenue andprofit streams for this year. "We have also seen significant changes in our marketplace such as the negativeimpact of the re-ordering of the Sky electronic programme guide on a number ofour channel clients, the start of internet and mobile phone television, anddevelopments such as the Virgin Mobile merger with ntl and Telewest. Ourre-positioning will enable us to become a stronger competitor in this fastmoving environment. The new generation of services we are delivering for theFreeview platform and the innovative head to head gaming service we aredeveloping for Catalyst is evidence of this." * * ENDS * * Contacts:YooMedia plcNeil MacDonald, Group Managing DirectorTel: 020 7462 0870 St Brides Media & Finance LtdIsabel CrossleyTel: 020 7242 4477 Notes on YooMedia plc: YooMedia is one of the fastest growing interactive entertainment companies inthe UK. Essentially, it develops and delivers premium interactive content andservices to households and individuals via TV, the web, telephony and mobilephones. It has four main divisions: • YooMedia Dating - manages dating brands including Dateline and Avenues from over 20 locations throughout the UK. Operates across traditional media, digital TV, internet and mobile phones. • YooMedia Gambling & Games - interactive fixed odds, play for fun casino and poker related games services for digital TV, the web and mobile phones. Brands include Channel 852, operated on behalf of William Hill, and Avago, which was established by YooMedia and is now managed on behalf of Gala Group. • YooMedia Interactive Services - delivers interactive content that enhances consumer and audience experiences. Customers include the BBC, Nestle, Celador, Channel 4, The Cartoon Network, Anheuser Busch, and HR Owen. • YooMedia Public Sector - provides digital solutions/media services to leading public sector organisations including the NHS Direct Interactive TV service, the Learning and Skills Council TV Kickstart service and a range of local authority TV services. The Group's experienced management team includes: Chairman, Dr. Michael Sinclair, who holds a number of directorships in both the UK and the USA havingpreviously founded Lifetime Corporation; and Managing Director, Neil MacDonald,whose career spans 11 years in multimedia and interactive sectors plus a further19 years in the retail industry. This information is provided by RNS The company news service from the London Stock Exchange