NPT.L Regulatory News (NPT)

12 Sep 2006 07:00

Stream Group PLC12 September 2006 Stream Group plc Interim results For the six months ended 30 June 2006 Stream provides consumer information and entertainment content and applications via mobile and fixed line telephony channels. Highlights • Interim results in line with Trading Statement of 30th June 2006. • Trading profit* amounted to £658,000 (2005: £884,000) • Strong cash generation in period £538,000 (2005: cash utilized £1,226,000) • Cash balances of £3,736,000 (31 December 2005: £3,198,000) • Infrastructure in place for US operations • PockitSoccer Asian distribution agreement signed * Trading profit is calculated as the profit before tax £243,000 (2005:£678,000) adding back amortisation of goodwill £278,000 (2005: £68,000) andshare compensation expense £137,000 (2005: £138,000). Gordon Robson, Executive Chairman, said, "Stream continues to focus on becoming an integral part of the emerging mobileindustry through our contract with Monilink for mobile banking services andother innovative mobile products. We have particularly strong hopes for PockitSoccer, a new GPRS footballinformation service which is an excellent example of how mobile is merging withthe Internet." Enquiries: Stream Group plc Tel: 020 7299 2880Gordon Robson, Executive ChairmanPat Greene, Finance Director Chairman's Statement Introduction As we announced in our Trading Statement of 30th June 2006, Trading Profit* forthe first six months was £658,000 (2005: £884,000). The background to our half year performance was set out in the above mentionedTrading Statement in which we said that we would keep shareholders informed ofdevelopments which I do in the Operating Review below. Interim Results Group turnover in the six months was £6,143,000, on a par with 2005(£6,066,000). Trading profit* for the period was £658,000 (2005: £884,000) withthe profit before tax amounting to £243,000 (2005: £678,000). The Group has applied Financial Reporting Standard 20 - 'Share Based Payment'for the first time. This requires the recognition of a charge in the Profit andLoss Account in respect of share options. The impact of this policy is detailedin note 1. The Group generated cash flow from operations of £1,177,000 (2005: £59,000)which, after tax and dividend payments, added £538,000 to resources in theperiod and the balance at 30 June 2006 was £3,736,000. Earnings per share amounted to 0.07p per share (2005: 0.66p restated) on a fullydiluted basis. This reflects the additional goodwill amortisation charge in theperiod, the assumed dilutive impact of deferred purchase consideration and therevised treatment of share compensation expense. Adjusted diluted earnings per share (excluding amortisation of goodwill andshare compensation expense) amounts to 0.66p (2005: 0.99p). Operating Review Stream's subsidiary, MChex Limited, has a 10 year agreement with Monilink (ajoint venture between Morse PLC and Link, the operator of the UK ATM network) todeliver mobile banking services. The Monilink service is being rolled out in aphased approach which commenced recently with a group of First Direct customersin July this year. HSBC is due to launch the service in September and Monilinkis at a well progressed stage in their discussions with other high-street banks. Our new US mobile products are close to launch with all operationalinfrastructure now installed and operational in New York. PockitBingo, ourmobile bingo product, has undergone comprehensive end user testing and hasproduced positive feedback from consumers. This product is expected to belaunched in the near future. In addition, we have recently secured new fixedline business here in the UK. Of particular note is the imminent launch of a new and innovative mobilefootball product which we intend to market both directly to consumers andindirectly via marketing partners in the UK and overseas. We have been workingon PockitSoccer for a number of months and have already signed a contract withan Asian distribution partner who, in turn, have a distribution agreement withM1 the Singapore based mobile network operator. Further Asian distribution dealsare expected to follow. The product is a GPRS based service which offersextremely comprehensive information and statistics on all English, Scottish andEuropean football leagues and is a natural replacement for the many highlypopular text alert services. PockitSoccer will also offer the consumer muchbetter value with a one off weekly charge for the full service rather than acharge per text message. Our psychic / astrology business remains stable with the revenue bias movingslowly from premium rate telephony towards credit card payments. Outlook Stream remains firmly focused on its strategy to become an integral part of thefuture of the mobile industry. We aim to achieve this through our agreement withMonilink for mobile banking, our mobile gaming / betting and other innovativeproducts such as PockitSoccer. The directors have every confidence in the Group's ability to develop its rolein the global mobile content and applications space and look forward to updatingshareholders on developments as we continue to implement our strategy and launchnew products, both in the UK and overseas. Gordon RobsonExecutive Chairman11 September 2006 * Trading profit is calculated as the profit before tax £243,000 (2005:£678,000) adding back amortisation of goodwill £278,000 (2005: £68,000) andshare compensation expense £137,000 (2005: £138,000). Consolidated profit and loss accountfor the six months ended 30 June 2006 Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 Note (Unaudited) (Unaudited) (Audited) £000 £000 £000 Restated* Restated* Turnover 6,143 6,066 13,226Cost of sales (3,430) (2,767) (6,334) --------- -------- --------Gross profit 2,713 3,299 6,892Administrative expenses (2,543) (2,720) (5,277) --------- -------- --------Operating profit 170 579 1,615Interest receivable 73 99 176 --------- -------- --------Profit on ordinary activitiesbefore taxation 243 678 1,791Tax on profit on ordinaryactivities 3 (192) (269) (596) --------- -------- --------Profit on ordinary activitiesafter taxation 51 409 1,195 ========= ======== ======== Earnings per share 5Basic 0.08p 0.69p 2.01pDiluted 0.07p 0.66p 1.84p ========= ======== ======== * Details of the restatement following the application of FRS 20 can be found innote 1. Consolidated balance sheetas at 30 June 2006 As at As at As at 30 June 30 June 31 December 2006 2005 2005 Note (Unaudited) (Unaudited) (Audited) £000 £000 £000 Fixed assetsIntangible assets 6,852 1,569 5,323Tangible assets 232 131 239 --------- -------- --------- 7,084 1,700 5,562 --------- -------- --------- Current assetsDebtors 2,745 2,655 3,160Cash at bank and in hand 3,736 4,124 3,198 --------- -------- --------- 6,481 6,779 6,358 Creditors: amounts falling duewithin one year (2,101) (2,660) (1,962) --------- -------- ---------Net current assets 4,380 4,119 4,396 --------- -------- ---------Total assets less currentliabilities 11,464 5,819 9,958 Provisions for liabilities (5,225) (500) (3,450) --------- -------- ---------Net assets 6,239 5,319 6,508 ========= ======== ========= Capital and reservesCalled up share capital 6 3,034 2,973 3,013Share premium account 7 2,799 2,752 2,792Merger reserve 7 (925) (1,154) (925)Own shares held by employeebenefit trust 7 (9) (9) (9)Profit and loss account 7 1,340 757 1,637 --------- -------- ---------Equity shareholders' funds 6,239 5,319 6,508 ========= ======== ========= Consolidated cash flow statementfor the six months ended 30 June 2006 Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 Note (Unaudited) (Unaudited) (Audited) £000 £000 £000 Net cash inflow from operatingactivities 8 1,177 59 876 Returns on investments andservicing of finance 8 59 99 177Taxation paid (151) - (806)Capital expenditure andfinancial investment 8 (58) (68) (224)Acquisitions 8 (32) (900) (1,818)Equity dividends paid (485) (416) (416) --------- -------- ---------Net cash flow before financing 510 (1,226) (2,211) Financing 8 28 - 59 --------- -------- --------- Increase / (decrease) in cashin the period 538 (1,226) (2,152) ========= ======== ========= Reconciliation of net cash tomovement in net funds Movement in net funds in theperiod 538 (1,226) (2,152) Net funds at the start of theperiod 3,198 5,350 5,350 --------- -------- ---------Net funds at the end of theperiod 3,736 4,124 3,198 ========= ======== ========= Reconciliation of movements in equity shareholders' fundsfor the six months ended 30 June 2006 Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 (Unaudited) (Unaudited) (Audited) £000 £000 £000 Restated Restated Opening equity shareholders' funds 6,508 5,188 5,188 Profit for financial period 51 409 1,195Dividends (485) (416) (416)Share compensation expense 137 138 232New share capital subscribed for cash 28 - 59Nominal value of shares issued foracquisition of subsidiaries - - 21Share premium on shares issued foracquisition of subsidiaries - - 229 --------- -------- ---------Net movement in equity shareholders'funds (269) 131 1,320 --------- -------- --------- Closing equity shareholders' funds 6,239 5,319 6,508 ========= ======== ========= Notes to the interim report 1 Basis of preparation This interim report, which has been neither audited nor reviewed by theCompany's auditors, was approved by the board of directors on 11 September 2006and has been prepared following the accounting policies set out in the Group's2005 annual report and accounts except for the adoption of Financial ReportingStandard 20, "Share based payment". The impact of this change in accountingpolicy has been reflected in the profit and loss account and gave rise to acharge of £137,000 for the period and £138,000 for the prior period. The changein policy did not result in any change in Shareholders' equity. The 2005 annualreport and accounts received an unqualified auditors' report and has been filedwith the Registrar of Companies. 2 Acquisition During the period, the Group acquired the whole of the share capital ofPan-American Mobile Inc. This company generated turnover of £15,000 and anoperating loss of £21,000 in the period. 3 Taxation Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 (Unaudited) (Unaudited) (Audited) £000 £000 £000 Current taxation 171 269 548Deferred tax charge 21 - 48 --------- -------- --------- 192 269 596 ========= ======== ========= The tax assessed in the period is higher (2005:higher) than the standard rate ofcorporation tax in the UK of 30% (2005:30%) primarily due to the disallowance ofcertain expenditure for tax purposes. A deferred tax asset estimated at £115,000 (2005: £82,000) arising from excesscapital allowances has been recognised. The directors consider that there issufficient certainty regarding the timing of suitable future taxable profitsagainst which these allowances will be claimed. 4 Dividends The directors do not recommend the payment of an interim dividend. The decisionwith regard to the payment of a final dividend in respect of the year ending 31December 2006 will be taken once the results for that period are agreed. 5 Earnings per share Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 (Unaudited) (Unaudited) (Audited) £000 £000 £000 Restated Restated Profit attributable to shareholders 51 409 1,195 --------- -------- --------- Number Number Number Weighted average number of shares inissue 60,402,995 59,274,240 59,586,149Dilution effects of contingentconsideration 6,687,168 - 2,960,885Dilution effects of share options 3,113,439 2,548,549 2,329,427Dilution effects of employee shareschemes 242,876 189,666 198,941 --------- -------- ---------Diluted weighted average number ofshares in issue 70,446,478 62,012,455 65,075,402 --------- -------- --------- Basic earnings per share 0.08p 0.69p 2.01pDiluted earnings per share 0.07p 0.66p 1.84p ========= ======== ========= Basic earnings per share is calculated on the results attributable to ordinaryshareholders divided by the weighted average number of shares in issue duringthe period excluding those held by Stream Trustees Limited which are treated ascancelled. Diluted earnings per share calculations reflect the dilutive effect of employeeshare schemes, share option schemes and deferred consideration payable inshares. Adjusted diluted earnings per share is calculated on the Profit attributable toshareholders before the amortisation of goodwill and share compensation expenseand on the diluted weighted average number of shares in issue. This amounts to0.66p (2005: 0.99p). The directors consider this figure to provide a morerelevant performance indicator. 6 Share capital Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 (Unaudited) (Unaudited) (Audited) £000 £000 £000 Balance at beginning of period 3,013 2,973 2,973Issue of shares 21 - 40 --------- -------- ---------Balance at end of period 3,034 2,973 3,013 ========= ======== ========= 7 Reserves Own shares Share Profit held by premium Merger and loss employee account reserve account benefit trust £000 £000 £000 £000 Balance at beginning of period 2,792 (925) 1,637 (9)Issue of shares 7 - - -Retained profit for the period - - 51 -Dividends - - (485) -Share compensation expense - - 137 --------- --------- -------- ---------Balance at end of period 2,799 (925) 1,340 (9) ========= ========= ======== ========= 8 Cash flows Six months Six months Year ended ended ended 30 June 30 June 31 December 2006 2005 2005 (Unaudited) Unaudited) (Audited) £000 £000 £000Net cash flow from operating activitiesOperating profit 170 579 1,615Depreciation of tangible fixed assets 65 60 117Amortisation of goodwill 278 68 231Share compensation expense 137 138 232Decrease / (increase) in debtors 408 (725) (1,312)Increase / (decrease) in creditors 119 (61) (7) 1,177 59 876Returns on investments and servicing of financeInterest received 59 99 177 Capital expenditure and financial investmentPurchase of tangible fixed assets (58) (68) (224) AcquisitionsPurchase of subsidiary undertakings (32) (900) (2,007)Less: cash acquired with subsidiaries - - 189 (32) (900) (1,818) FinancingIssue of ordinary shares 28 - 59 9 Interim statement A copy of this statement will be sent to shareholders. Additional copies areavailable on request from the Company's registered office: 25 James Street,London W1U 1DU. This information is provided by RNS The company news service from the London Stock Exchange