RTHM.L Regulatory News (RTHM)

29 Oct 2007 07:01

Blinkx Plc29 October 2007 29 October 2007 BLINKX PLC ANNOUNCES INTERIM RESULTS FOR THE PERIOD ENDED 30 SEPTEMBER 2007 Strong results for the period, with revenue 23% ahead of the top analyst forecast driven by 280% increase in daily searches and significant growth in content partner base blinkx's interim period conference call will be webcast live at www.blinkx.com on 29 October 2007, at 9:30 a.m. GMT/5:30 a.m. EDT/2:30 a.m. PDT. Cambridge, England and San Francisco, CA - 29 October 2007 - blinkx PLC(BLNX.L), the world's largest video search engine, today reported financialresults for the period ended 30 September 2007. Financial Highlights Period from 23 April 2007 (incorp.) to 30 Sept 2007Results in US$ ($'000s, except per share amounts) (unaudited) US$'000Revenues 2,953Loss from operations before demerger / IPO costs* (2,288)Loss for the period before demerger / IPO costs* (1,407)Loss for the period (12,862) Loss per share (cents)Basic (5.62)Adjusted * (0.62) Cash used by operating activities excluding demerger / IPO costs** (2,047)Cash used by operating activities (8,417)Cash balance as of 30 September 2007 43,610 -------- * Excludes demerger / IPO costs of $11.5 million. ** Excludes demerger / IPO costs. See reconciliations on page 6 Highlights: • Strong revenues, 23% above the top analyst forecast for the 5.5 month period ending 30 September 2007 • 280% growth in daily worldwide searches • Daily searches average of 4.2 million in September • 70% growth in content partner base to over 225 media organizations • Strong growth in customer base, adding blue chip clients including Ask.com, RealNetworks, Infospace and MediaCom • 160% expansion of core index of video content; total hours indexed exceeds 18.5 million • Introduction of two new strategic technology offerings: o AdHoc (including Viral) o Native language search • Successful demerger from Autonomy Corporation plc raising $50 million in IPO • Key hires in Sales and R&D in order to drive growth Commenting on the interim results Suranga Chandratillake, founder and CEO ofblinkx, said: "We are pleased to report a strong performance throughout our initial reportingperiod, with revenues 23% ahead of the top analyst forecast driven bysignificant growth in daily searches. Key strategic partnerships, includingAsk.com and RealNetworks, have established blinkx as the gold standard for TVand video search on the Web and almost tripled our daily searches. We havesubstantially built out our index of content, adding high-profile mediacompanies such as Kiplinger's and Michael Eisner's Vuguru to our library. Inaddition, during the period we added two strategic offerings to our technologyportfolio which will promote usage throughout Western Europe and driveadvertising revenue worldwide." Mr. Chandratillake continued: "The popularity of online video is at an all timehigh, and we are seeing the proliferation of not only user-generated content,but also professionally-produced, high-value programming from established mediacompanies, such as CBS, NBC and News Corp. With 75% of US users watching ordownloading Internet video, the exponential growth in online video demands anadvanced search function, and navigation is a vital service which can bemonetized through advertising. Having established blinkx as the gold standardin online TV and video search, and with the introduction of the AdHoc platform,blinkx is ideally positioned at the intersection of content, search andadvertising, and uniquely poised to capitalize on the surging video advertisingmarket." Financial Highlights For the period from 23 April 2007 (incorporation) to 30 September 2007, revenuestotalled $3.0 million. Gross profit for the first half of 2008 was $2.2million, representing a gross margin of 74%. Net loss for the period, beforeone-off costs related to the IPO and demerger, was $1.4 million. Lossesincluding one-off costs related to the demerger and IPO totalled $12.9 million.Adjusted loss per share for the period, before one-off costs related to the IPOand demerger was 0.62 cents. Loss per share including one-off costs related tothe demerger and IPO was 5.62 cents. During the period blinkx raised $50.4million in gross proceeds from an initial public offering completed on 22 May2007. Cash balance at 30 September 2007 was $43.6 million. Customer and Business Developments This first reporting period has seen significant growth. Since its IPO in May2007, strong demand for blinkx's unique, patented search functionality hasestablished blinkx as the gold standard in video search, powering many of themost popular sites and portals on the Internet. Through these strategicpartnerships and increased consumer visibility, searches have increased 280%since IPO to an average 4.2 million per day in September. High-profile newsyndication customers included Ask.com, RealNetworks and InfoSpace. During theperiod blinkx also saw strong demand for its content platform from mediacompanies, expanding the roster of top-quality content providers to over 220,including programming from CelebTV and Ministry of Sound. blinkx's index offully searchable online video has now surpassed 18.5 million hours. Product and Technology Developments During the period, blinkx introduced several new offerings based on itsindustry-leading technology. Launched in June 2007, blinkx's patented AdHocplatform delivers multi-modal contextually relevant video advertising tocapitalize on the flourishing market for online video advertising, which isestimated to reach $4.3billion by 2011 (eMarketer), and has attracted brand-nameadvertisers, including Nokia, BestBuy, GM and ABC. In October 2007, blinkx announced native language search for France, Germany andSpain. The pervasiveness of broadband in Europe has made online video and TVcontent extremely appealing to local Internet users, and blinkx is the firstvideo search engine to address the Western European market, indexing contentfrom over 200 European sources and sites and making more than 1 million hours offoreign language video fully searchable. Company Developments On the operational front blinkx made strategic hires to support growth and newinitiatives, increasing headcount to over 40 employees. Seasoned executiveswere added to drive content acquisition, syndication partnerships, and build ouradvertising business. During the period blinkx and its technological achievements were recognized witha number of awards. blinkx.com was named one of Time Magazine's 50 BestWebsites of 2007 and was a finalist in CNET's annual Webware Awards. Thecompany was also named 2007 Rising Star of the Year at Business XL's Company ofthe Year Awards. About blinkx PLC blinkx (London AIM: BLNX) is the world's most comprehensive video search engine.Today, blinkx has indexed more than 18.5 million hours of audio, video, viraland TV content, and made it fully searchable and available on demand. blinkx'sfounders set out to solve a significant challenge - as TV and user-generatedcontent on the Web explode, keyword-based search technologies only scratch thesurface. blinkx's patented search technologies listen to - and even see - theWeb, helping users enjoy a breadth and accuracy of search results not availableelsewhere. In addition, blinkx powers the video search for many of the world'smost frequented sites. blinkx is based in San Francisco and London. Moreinformation is available at www.blinkx.com For further information please contact: Financial Media Contacts Analyst and Investor ContactEdward Bridges/Haya Chelhot Matthew Service, CFOFinancial Dynamics blinkx PLCTel: (UK) 020 7831 3113 Tel: (US) 415 615 1513 BLINKX PLC CONSOLIDATED INCOME STATEMENT (UNAUDITED) Results for the period from 23 April 2007 to 30 September 2007 (in thousands, except per share amounts) Period from 23 April 2007 (incorp.) to 30 Sept 2007 (unaudited) Note US$'000Revenue 2,953Cost of revenue (767)Gross profit 2,186 Operating Expenses 3 Research and development 1,314 Sales and marketing 2,567 Administrative expenses 593 Loss from operations before demerger / IPO costs* (2,288) Demerger / IPO costs 11,455Loss from operations (13,743) Finance income (net) 881 Loss before taxation (12,862) Income tax charge 4 - Loss for the period before demerger / IPO costs* (1,407) Loss for the period attributable to equity holders (12,862) Loss per share (cents)Basic (5.62)Adjusted* (0.62) -------- * Excludes demerger / IPO costs of $11.5 million The accompanying notes are an integral part of these consolidated financial statements BLINKX PLC CONSOLIDATED BALANCE SHEET (UNAUDITED) As at 30 September 2007 (in thousands) As at 30 Sept 2007 Note US$'000ASSETS Non-current assetsProperty, plant and equipment 480Other intangibles 4 484Current assetsTrade receivables 1,194Other assets 1,654Cash and cash equivalents 43,610 46,458Total assets 46,942 EQUITY AND LIABILITIES Capital and reservesShare capital 6 5,483Share premium 49,126Stock compensation reserve 5,562Currency translation reserve 1,685Merger reserve (4,323)Retained earnings (12,763) 44,770 Current liabilitiesTrade and other payables 2,172 2,172 Total liabilities 46,942 The accompanying notes are an integral part of these consolidated financial statements BLINKX PLC CONSOLIDATED CASH FLOW STATEMENT (UNAUDITED) Results for period from 23 April 2007 to 30 September 2007 (in thousands) Period from 23 April 2007 (incorp.) to 30 Sept 2007 (unaudited) US$'000CASH FLOWS FROM OPERATING ACTIVITIESLoss from on-going operation (2,288)Loss from demerger / IPO related costs (11,455)Loss from operations (13,743)Adjustments for Depreciation and amortization 147 Share based compensation 5,676 Foreign currency movements (3) Operating cash flows before movements in working capital (7,923) Changes in operating assets and liabilities (net of impact of acquisitions): Receivables (1,194) Other assets (1,472) Payables 2,172Cash used by operations (494)Net cash provided by operating activities (8,417) CASH FLOWS FROM INVESTMENT ACTIVITIESInterest received 700Purchase of property, plant and equipment (632)Net cash generated by investment activities 68 CASHFLOWS FROM FINANCING ACTIVITIESProceeds from issuance of shares 50,384Net cash provided by financing activities 50,384 Net increase in cash and cash equivalents 42,035 Cash and cash equivalents at beginning of period -Effect of foreign exchange rate changes 1,575Ending cash and cash equivalents 43,610 RECONCILIATION OF NET CASH PROVIDED BY OPERATING ACTIVITIES EXCLUDING DEMERGER COSTS Period from 23 April 2007 (incorp.) to 30 Sept 2007 (unaudited) US$'000Net cash provided by operating activities (8,417) Adjustment for: One-off share based compensation (5,085) Loss from demerger / IPO costs 11,455Net cash provided by operating activities, excluding demerger / IPO costs (2,047) The accompanying notes are an integral part of these consolidated financial statements BLINKX PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED) For the period from 23 April 2007 to 30 September 2007 (in thousands) Stock Ordinary Redeemable Share compensation share capital share capital premium reserve Sub-total US$'000 US$'000 US$'000 US$'000 US$'000Balance as at 23 April 2007 - - - - -Issue of shares 5,483 100 49,126 - 54,709Capital contribution - - - - -Shares redeemed - (100) - - (100)Current period losses - - - - -Exchange differences on translation - - - - -Share based payments - - - 5,562 5,562Balance as at 30 Sept 2007 5,483 - 49,126 5,562 60,171 Sub-total Currency Merger Retained forwarded translation reserve earnings Total US$'000 US$'000 US$'000 US$'000 US$'000Balance as at 23 April 2007 - - - - -Issue of shares 54,709 - (4,323) - 50,386Capital contribution - - - 99 99Shares redeemed (100) - - - (100)Current period losses - - - (12,862) (12,862)Exchange differences on translation - 1,685 - - 1,685Share based payments 5,562 - - - 5,562Balance as at 30 Sept 2007 60,171 1,685 (4,323) (12,763) 44,770 The accompanying notes are an integral part of these consolidated financial statements BLINKX PLC NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED) 1. Basis of preparation The interim financial statements have been prepared using accounting policiesconsistent with International Financial Reporting Standards ("IFRSs") as adoptedfor use in the EU. While the financial information included in this interimannouncement has been compiled in accordance with the recognition andmeasurement principles of IFRSs, this announcement does not itself containsufficient information to comply with IFRSs. These interim financial statementsdo not constitute statutory financial statements within the meaning of section240 of the Companies Act 1985. The information for the period from incorporation through 30 September 2007 isunaudited, but reflects all normal adjustments which are, in the opinion ofmanagement, necessary to provide a fair statement of results and the company'sfinancial position for and as at the period presented. The results ofoperations for the period ended 30 September2007 are not necessarily indicativeof the operating results for future operating periods. 2. Significant accounting policies The interim financial statements have been prepared under the historical costconvention. The same accounting policies, presentation and methods of computation arefollowed in these interim financials statements as will be applied for thepreparation of the Group's annual audited financial statements. The Group'saccounting policies are available from the investor relations page of theCompany's website at www.blinkx.com/investors. 3. Share-based payments Included within operating expenses are the following amounts in respect of sharebased payments: Period from 23 April 2007 (incorp.) to 30 Sept 2007 (unaudited) US$'000Research and development 320Sales and marketing 228Administrative expenses 42Demerger / IPO costs 5,233 5,823 4. Taxation There is no income tax charged for the Interim Period. 5. Loss per share The loss per ordinary share and diluted loss per share are equal because shareoptions are only included in the calculation of diluted earnings per share iftheir issue would decrease the net profit per share or increase the net loss pershare. The calculation is based on information in the table shown below. Period from 23 April 2007 (incorp.) to 30 Sept 2007 (unaudited) US$'000EarningsLoss for the period (12,862)Loss for the period excluding demerger / IPO costs of $11,455k (1,407) Number of shares (number)Weighted average number of shares since 23 April 2007 228,685,216 6. Share capital Major movements in share capital in the period include the issuance of277,470,635 ordinary shares in relation to the demerger from AutonomyCorporation plc and equity financing in May 2007. In addition as part of thedemerger process one redeemable share was issued in April 2007 which wassubsequently redeemed in May 2007 prior to the demerger. Other issuances ofshares relate to the exercise of employee share options. 7. Related party transactions There are no related party transactions. 8. De-merger from Autonomy Corporation plc The demerger of the blinkx business from Autonomy Corporation plc and itsaffiliates was completed on 21 May 2007. This was followed by an IPO on the AIMmarket of the London Stock Exchange. This transaction was accounted for as areverse acquisition. 9. Approval of interim financial statements The interim accounts were approved by the directors on 26 October 2007. INDEPENDENT REVIEW REPORT TO BLINKX PLC We have been engaged by the company to review the interim set of financialstatements in the half-yearly financial report for the period from 23 April 2007to 30 September 2007 which comprises the consolidated income statement, theconsolidated balance sheet, the consolidated cash flow statement, thereconciliation of net cash provided by operating activities excluding demergercosts, the consolidated statement of changes in equity and related notes 1 to 9.We have read the other information contained in the half-yearly financial reportand considered whether it contains any apparent misstatements or materialinconsistencies with the information in the interim set of financial statements. This report is made solely to the company in accordance with InternationalStandard on Review Engagements 2410 issued by the Auditing Practices Board. Ourwork has been undertaken so that we might state to the company those matters weare required to state to them in an independent review report and for no otherpurpose. To the fullest extent permitted by law, we do not accept or assumeresponsibility to anyone other than the company, for our review work, for thisreport, or for the conclusions we have formed. Directors' responsibilities The half-yearly financial report is the responsibility of, and has been approvedby, the directors. The directors are responsible for preparing the half-yearlyfinancial report in accordance with the AIM Rules of the London Stock Exchange. As disclosed in note 1, the annual financial statements of the Group will beprepared in accordance with IFRSs as adopted by the European Union. The interimset of financial statements included in this half-yearly financial report hasbeen prepared in accordance with the accounting policies the group intends touse in preparing its next annual financial statements. Our responsibility Our responsibility is to express to the Company a conclusion on the interim setof financial statements in the half-yearly financial report based on our review. Scope of Review We conducted our review in accordance with International Standard on ReviewEngagements (UK and Ireland) 2410, "Review of Interim Financial InformationPerformed by the Independent Auditor of the Entity" issued by the AuditingPractices Board for use in the United Kingdom. A review of interim financialinformation consists of making inquiries, primarily of persons responsible forfinancial and accounting matters, and applying analytical and other reviewprocedures. A review is substantially less in scope than an audit conducted inaccordance with International Standards on Auditing (UK and Ireland) andconsequently does not enable us to obtain assurance that we would become awareof all significant matters that might be identified in an audit. Accordingly, wedo not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believethat the accompanying interim financial information is not prepared, in allmaterial respects, in accordance with the AIM Rules of the London StockExchange. Deloitte & Touche LLP26 October 2007Chartered Accountants and Registered AuditorCambridge, United Kingdom This information is provided by RNS The company news service from the London Stock Exchange