Last checked at 31 Jan 2013 15:09
CERES MEDIA INTERNATIONAL PLC - Final ResultsCERES MEDIA INTERNATIONAL PLC - Final Results
PR Newswire
London, January 31
Trading conditions for the Company remain challenging with performance havingbeen impacted by the poor general economic conditions and specific structuralissues impacting the print material distribution sector, especially in theUnited Kingdom. The directors have reacted to these changes by refocusing theCompany's sales strategy and by directly targeting potential end-users of theproduct, simplifying the distribution process and optimising pricecompetitiveness.
Notwithstanding this, to date there has been a slower than expected adoption byend-users of the Company's core product ranges. The directors have noted asteady increase in sales of Chorus / Gossyp in the US over the last months ofthe current trading year.
OPERATIONS SUMMARY
TierraFilmTM window cling product is designed to replace existing PVC windowclings used in point of sale window applications and provide the customers withan environmentally sound alternative. This product was launched in January2012, however, technical issues surrounding the physical fixing process and thedelays in market adoption have led to slower than expected off-take byend-users. The directors anticipate that a newly formulated and improvedTierraFilmTM window cling product adopting a light-tack adhesive in response tomarket feedback will be available shortly enabling existing stocks to bereworked and successfully sold in the UK market.
Additional uses are being developed for existing raw material stock to minimisewaste and to generate new sales channels.
TierraFilmTM Backlit 100 and 200 has been developed specifically for the `Outof Home' advertising market to replace existing medium with an environmentallysound alternative. The approval process by the three major `Out of Home' mediaowners and their supply chain has taken significantly longer than wasoriginally anticipated and this has precluded the Company from selling productin its core market area. I am pleased to announce that as of January 2013 theTierraFilm ranges are now listed by the three major `Out of Home' media ownersin the UK opening up this large market. The Company is in discussions andadvanced product testing with a number of premium branded entities to initiatenational advertising campaigns which are anticipated to commence by April 2013.
Naturewoven Chorus and Gossyp
The sales of these two lines remain below the board's expectations, althoughthere have been recent indications of improvements in off-take for Chorus inthe US with a regular and growing sales pattern being established.
After extensive testing Chorus and Gossyp were approved in March 2012 byHewlett Packard ("HP") for use on its digital print machines - this shouldbuild significant confidence with printers who use HP's printers as well asprovide manufacturer approved settings for optimal use on both products.
Awareness of the NatureWovenTM range of products continues to increase and theCompany is pleased to have been nominated as a finalist at the recentSustainable Business Council of Los Angeles Awards. The Company has recentlydecided to transfer all UK / Europe based stocks of Chorus and Gossyp to the USmarketplace to support the sales initiatives underway in this market.
As announced on 3 September 2012 the Company received its first orders forNatureNetting, the Company's spectacular new event screening product designedspecifically to support the highest profile events that took place in Londonduring the summer of 2012. The products which can be colour matched to anypantone reference were very well received by the organisers and will be rolledout through major event management organisations in the UK and US during Springand Summer, 2013. In the period from May to July despite very tight lead timesand the narrow window of availability NatureNetting contributed over 50% of theCompany's revenues during the last fiscal.
The Company continues to develop and modify its products in response to marketfeedback in order to increase sales and utilise stock holding. The Company hasrecently worked in partnership with a US business to develop a magnetic posting/ wallpaper variant for Chorus exclusively for the North American market - thisis expected to become a significant monthly revenue stream.
Geographically the Company's spread of business has become much more focussedwith the US business concentrating on Chorus and Gossyp with the UK focussingon TierraFilmTM and NatureNetting. It is anticipated that the UK's focus willbe retained while US opportunities for TierraFilmTM Backlit and NatureNettingwill be developed later in 2013
Immediately after admission to AIM the Company embarked on an ambitious productdevelopment and market development campaign with the subsequent increase inoverhead in particular in staff and product development costs as well as stockholding. In the light of continued lower than expected sales, the directorssignificantly reduced overhead throughout 2012 and are continuing to carefullymanage working capital. The directors are also actively managing the currentstock levels to bring them more into line with current trading.
FINANCIAL SUMMARY
Revenues for the year ended 31 July 2012 were £162k (2011: £30k). Operatinglosses were £1,646k (2011: £480k).
On 22 May 2012 the Company announced that it raised £210,000 by way of an issueof 21,000,000 new ordinary shares at a price of 1 pence per share. The proceedsof this placing were used to provide additional working capital to thebusiness.
Included within the losses for the year are exceptional items amounting to £868,088 relating to a write down of the carrying value of the subsidiaries inthe financial statements.
Cash and cash equivalent balances as at 31 July 2012 amounted to £27,639. TheCompany is experiencing continued working capital constraints, which inhibitfaster levels of revenue growth and the board is reviewing various options toraise further capital in tranches during in the coming months.
GENERAL MEETING
As at the date of this statement the Company's share price is trading below thenominal value of its ordinary shares, therefore the directors are convening ageneral meeting of the Company to seek, amongst other approvals, shareholderauthority to undertake a capital reorganisation, the effect of which will be tosubdivide each existing ordinary into an ordinary share of £0.001 and adeferred share of £0.009.
Details of the capital reorganisation are set out in a circular that willshortly be posted to all shareholders and will contain details of a proposedplacing of new ordinary shares to provide further working capital. Thisfundraising should enable the company to settle all overdue creditors andprovide some working capital In the event that this fundraising is notsuccessful the future of the group may be in doubt.
DIRECTORATE CHANGES
Norman Fetterman, the former Non-executive Chairman resigned as a director ofthe Company in March 2012, at which time I was appointed as Interim ExecutiveChairman to guide the business through a particularly difficult period in itsevolution and to lead the fund raising that was completed in June, 2012. InSeptember, 2012 I stepped down as Executive Chairman but remain as anon-executive director of the Company. While the Board is conscious of the needto strengthen its executive team the financial integrity of the Company is atthis moment paramount and future appointments have been delayed until such timeas the Company grows and raises further funds.
Leslie Barber
31 January 2013
Consolidated Statement of Comprehensive Income
for the year ended 31 July 2012
Notes Year Ended Period 1.3.11 31.7.12 to 31.7.11 £ £ CONTINUING OPERATIONS Revenue 1 161,597 30,054 Cost of sales (257,193) (37,688) GROSS LOSS (95,596) (7,634) Administrative expenses (1,550,550) (472,532) OPERATING LOSS (1,646,146) (480,166) Finance costs (6,669) (4,859) Finance income - 250 LOSS BEFORE INCOME TAX (1,652,815) (484,775) Income tax - - LOSS FOR THE YEAR (1,652,815) (484,775) OTHER COMPREHENSIVE INCOME - - TOTAL COMPREHENSIVE INCOME (1,652,815) (484,775) FOR THE YEAR Loss attributable to: (1,652,815) (484,775) Owners of the parent Total comprehensive income (1,652,815) (484,775)attributable to: Owners of the parent LOSS PER SHARE BASIC AND DILUTED LOSS PER SHARE 2 0.0452 0.021Consolidated Statement of Financial Position
at 31 July 2012 Notes 2012 2011 £ £ ASSETS NON-CURRENT ASSETS Goodwill - 868,088 Intangible assets 354,540 223,306 Property, plant and equipment 5,143 9,057 Investments - - 359,683 1,100,451 CURRENT ASSETS Inventories 340,942 162,663 Trade and other receivables 111,551 98,313 Cash and cash equivalents 27,639 55,911 480,132 316,887 TOTAL ASSETS 839,815 1,417,338 EQUITY SHAREHOLDERS' EQUITY Called up share capital 5,574,070 5,200,348 Share premium 838,822 - Merger reserve 1,157,850 1,157,850 Reverse acquisition reserve (4,602,402) (4,602,402) Retained earnings (2,527,987) (875,172) TOTAL EQUITY 440,353 880,624 LIABILITIES CURRENT LIABILITIES Trade and other payables 323,351 536,714 Financial liabilities - borrowings 76,111 - 399,462 536,714 TOTAL LIABILITIES 399,462 536,714 TOTAL EQUITY AND LIABILITIES 839,815 1,417,338Consolidated Statement of Cash Flows
for the year ended 31 July 2012
Notes Year Ended Period 31.7.12 1.3.11 £ to 31.7.11 £ Cash flows from operating activities Cash generated from operations (1,069,531) (313,559) Interest paid (6,669) (4,859) Net cash from operating (1,076,200) (318,418)activities Cash flows from investing activities Purchase of intangible fixed assets Purchase of intangible fixed (131,234) (28,006)assets Purchase of tangible fixed assets (1,412)) (6,921) Acquisition of subsidiaries, net - 385,144of cash Interest received - 250 Net cash from investing (132,646) 350,467activities Cash flows from financing activities Amount introduced by directors 5,480 - Amount withdrawn by directors (9,561) - Share issue 269,722 10,334 Share premium 1,015,278 - Share issue costs (176,456) - Net cash from financing 1,104,463 10,334activities (Decrease)/increase in cash and (104,383) 42,383cash equivalents Cash and cash equivalents at 55,911 13,528beginning of year Cash and cash equivalents at end (48,472) 55,911of year NOTES 1. TURNOVERAs the Group operates in one business segment and as such this is the primaryreporting segment.
The Group's secondary segment is geographical. The segmental results bygeographical area as shown below.
Year Ended Period 31.7.12 1.3.11 £ to 31.7.12 £ Revenue EU 112,438 16,817 Rest of world 61,337 13,237 173,775 30,054 2. EARNINGS PER SHAREBasic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of ordinary sharesoutstanding during the period.
Diluted earnings per share is calculated using the weighted average number ofshares adjusted to assume the conversion of all dilutive potential ordinaryshares.
Reconciliations are set out below.
Earnings 2012 Loss £ Weighted per-share amount average number of shares Basic EPS Earnings attributable to ordinary shareholders (1,652,815) 36,584,449 0.0452 Effect of dilutive - - -securities Diluted EPS Adjusted earnings (1,652,815) 36,584,449 0.0452 Basic EPS Earnings attributable to (484,775) 23,373,726 0.021ordinary shareholders Effect of dilutive - - -securities Diluted EPS Adjusted earnings (484,775) 23,373,726 0.021 3. REPORT AND ACCOUNTSThe audited report and accounts of the Company for the year to 31 July 2012have today been posted to shareholders.
Enquiries:Ceres Media International PLC Tel: 020 3178 5622 Leslie Barber Nominated Adviser - Cairn Financial Advisers LLP Tel: 020 7148 7900 Liam Murray / Jo Turner Broker - XCAP Securities plc Tel: 0207 101 7070 Jon Belliss / Adrian Kirk