Stratmin Global Resources Regulatory News (STGR)

27 Mar 2007 07:04

Interactive Prospect TargetingHdgs27 March 2007 For release at 07.00 27 March 2007 Interactive Prospect Targeting Holdings (IPH.L) Results for the period ended 31 December 2006 overview Interactive Prospect Targeting Holdings plc (hereafter "IPT" or "the Companytogether with its subsidiaries or ("the group") has continued to makesignificant progress in the year ended 31 December 2006. In 2006, IPT's UKbusinesses have experienced organic growth in revenues in excess of 30%, whilstin May 2006 it completed its first major acquisition in Europe by acquiringDirectinet in France. Subsequent to the successful integration of Directinet,the group will continue its policy of actively seeking suitable opportunitiesfor international expansion. In the year ended 31 December 2006: • Revenue increased 77% to £24.1 million (2005: £13.6m); • Profit before tax increased by 82% to £4.4m (2005: £2.4m); • Headline operating profits* increased by 139% to £4.8m (2005: £2.0m) (see note 3); • Headline operating margins* increased to 20% in 2006 from 15% in 2005; • Basic earnings per share increased by 47% to 8.4p (2005: 5.7p) (see note 5); • Headline earnings** per share increased by 100% to 9.6p (2005: 4.8p) (see note 5); and • The acquisition of Directinet has been a success and was earnings enhancing in the period since acquisition (24 May 2006); IPT continues to lead the UK as the number one online consumer data and servicescompany, which is reflected in the strong growth of headline operating profits*. The acquisition of Directinet in May 2006 established the group with a marketleading position in France. In 2007, this lead position will be further enhancedby introducing the group's successful UK products and services to the Frenchmarket. * Before goodwill reduction expense, amortisation of acquisition relatedintangible assets, one-time restructuring cost and share based payment charges(as defined in note 3). **Before goodwill reduction expense, amortisation of acquisition relatedintangible assets, one-time restructuring costs, share based payment charges,profit on available-for-sale investments and the tax effect of these items (asdefined in note 5). These definitions as outlined above are consistently applied throughout thispreliminary announcement. • Interactive Prospect Targeting Holdings Plc • www.ipt-ltd.co.uk• Lionel Thain • 020 7932 4101• Eoin Ryan • 020 7932 4187• •• Adventis Financial PR •• Chris Steele • 020 7034 4759 / 07979 604 687• Annie Evangeli • 020 7034 4757 / 07778 507 162• •• Nomad •• Canaccord Adams Ltd •• Mark Williams • 020 7050 6500 CHAIRMAN'S STATEMENT In my announcement on 14 September 2006, I reported that the group had achievedits objectives for the first half of 2006. I am now pleased to be able toreport that the excellent first half performance continued throughout the secondhalf of the year. Turnover for the year was £24.1m, an increase of 77% over 2005(£13.6m). Profit before tax increased by 82% to £4.4m (2005: £2.4m). Basicearnings per share was 8.4p, representing an increase of 47% (2005: 5.7p), whileour headline earnings per share ** it grew by 100% from 4.8p in 2005 to 9.6p in2006. This has been a year of acquisitions for the group. In April 2006, IPT completedthe acquisition of Direct Excellence Ltd. This acquisition provided a major stepin the group's strategy to build a substantial online market research business.On 24 May 2006, the group completed the acquisition of Directinet, the leader inonline direct marketing in France. This acquisition provides the group with theleading position in the provision of online direct marketing services in boththe UK and France. These two countries together account for 64% of the totalEuropean market for online advertising. I am pleased to report that thisacquisition has achieved our expectations for 2006 and that the excellentprogress we have made in France has given the group the opportunity toaccelerate the introduction of UK market leading products into that market. On28 July 2006, the group completed the acquisition of Smartquotes Ltd, an onlineprovider of access to consumer finance products. This business is beingintegrated into IPT, expanding the range of services that the group provides tothose consumers interested in financial products. The continued success of ouracquisitions encourages me to believe that the group is implementing asuccessful acquisition and integration strategy. In May 2006, the group successfully raised £11m, net of expenses, in a secondaryplacing of 5.6 million shares on the AIM, at a price of £2.05 per share. During 2006, the group has continued its innovation with the launch of a newwebsite www.mypropertyspy.co.uk and the introduction of two completely newproducts "efinity" and "eProfile". The introduction of these new productscontinues the group's efforts to assist digital marketers by providingexceptional direct marketing solutions. IPT continues to be a leader in online direct marketing, combining organicgrowth with an active acquisition strategy at the forefront of this dynamicindustry. Comments on current trading are included in the Chief Executive'sReview. In conclusion, I should particularly like to thank the Chief Executive, hismanagement team and all IPT employees for their efforts to date. Colin LloydChairman26 March 2007 CHIEF EXECUTIVE'S REVIEW Overview Throughout 2006, IPT has continued to develop and launch new websites andinnovative products designed to fulfil the needs of our clients. To support thisprocess we have an active programme of investment, replacing and upgrading ourtechnology to ensure a consistent supply of service to all of our clients at thelevel they demand. Ever-increasing internet usage and broadband penetration means that in 2007European online advertising spend is forecast to reach £3.5 billion, increasingby 18% from 2006. This means that Europe offers exciting opportunities to growand expand our business. In its first six years the IPT group was whollyfocused within the UK. However, during 2006, the group took the first step tobegin exploring the enormous potential of Europe. The acquisition of Directinetand its subsequent integration into the group has indicated that the Europeanmarkets are following developments in the UK closely, and that the adoption ofcutting edge UK products will give competitive advantage in Europe. In 2007, thegroup will continue its policy of actively seeking suitable opportunities forinternational expansion. Financial Highlights Group revenues increased from £13.6m in 2005 to £24.1m in 2006 - an overallgrowth of 77%. In 2006, the UK revenues have increased to £19.3m from £13.6m in2005, while the acquisition of Directinet in France contributed £4.8m. Excludingacquisitions, organic revenues grew by over 30% in 2006. Profit before taxincreased by 82% to £4.4m from £2.4m in 2005. Operational Highlights With 25 websites, including our award-winning online data collection siteMyOffers.co.uk, which continues to be one of the most visited websites in theUK, IPT maintains its position as the UK's leading builder of online prospectdatabases. To date we have built over 1,000 bespoke prospect databases for ourclients, including some of the UK's leading household name brands. IPT has created a unique engine which enables us to serve client-sponsoredquestionnaires to very specific audiences. This means that each prospectdatabase we build is individually tailored to our clients' needs, providing themwith the responses to their own sponsored questions together with the consumers'personal and demographic details. This combination of information allows today'smarketers to precisely target the people who are most likely to find theirproducts and services interesting. An ongoing programme of online promotions drives high volumes of users to ourwebsites, and in a single day we have experienced as many as 19,000 newregistrations. The fact that two thirds of our first-time visitors return againis testament to the attractions of our content and the usability of our sites. Appropriate data is one of the most powerful tools available to marketers today.IPT helps marketers to target their messages with precision to the people whoare not only likely to find them of interest, but who have actively given theirconsent to be contacted. With in-house databases of over 7.4 million email and7.5 million individual postal prospects, IPT provides a fast and effectivemethod of targeting consumers for acquisition and brand-building campaigns. An effective marketing campaign requires accurate data. Our data collectionprogrammes provide a constant flow of over 200,000 new records to marketers eachmonth, and we use a number of tools to check and validate this data. For clients wishing to target prospects who share the same characteristics asrecipients who have opened and clicked through from their email campaigns, ourrecently launched eProfile product provides the answer. By using provenanalytical techniques to identify the profiles of these recipients we are ableto match against our in-house databases and select individuals who share thisprofile. The volume and quality of IPT's data delivers excellent results for our clients.However, recognising that some clients may also wish to target niche audiencesnot available from the IPT file, IPT also offers two further services: holisticlist management works with clients to commercialise their own databases, whilstholistic list broking helps clients to source the right data for their needsfrom the marketplace. As one of the UK's leading authorities on email marketing, IPT acts as a guideto legitimate marketers, giving them the tools to verify their identity, andenabling their emails to reach the inbox. IPT is one of the UK's largest emailbroadcasters, sending around 120 million emails to opted-in recipients everymonth. This gives us the ability to send over 1 million emails per hour and upto 12,000 simultaneously. Sometimes legitimate email can accidentally be prevented from reaching therecipient's inbox, IPT offers a number of solutions to help ensure clients'emails arrive safely. For example, by allocating an individual IP address toeach client we avoid many of the technical issues experienced by other serviceproviders. We also offer our clients two tiers of service: Fully Managed, when we providefull campaign management, and Software Only, when the client retains fullmanagement of their campaigns using our sophisticated tools. All of our clientsbenefit from a comprehensive tracking and reporting system, enabling them tomonitor their campaigns closely and measure the results. Marketers in the financial services industry operate in an environment which isvery highly regulated. IPT has drawn together a team of experts from around thefinancial services industry who have tailored and developed our highlysuccessful range of generalised products and services into new specialistsolutions which address the specific requirements of the financial servicesmarketer. We offer a wealth of expertise in market research, both online and in the realworld. Our expertise extends to the latest innovations in market research,allowing IPT to offer marketers an ever-growing range of services to help togather intelligence relevant to their businesses. In January 2007, to further enhance our research capabilities, we acquired 79%of the issued share capital of Real World Customer Experience Ltd, bringingtheir respected Tpoll Market Intelligence brand into the IPT group. Tpoll'sexperience and market research capabilities join with our existing online panelenabling IPT to become a major participant in the market research field. Directinet has continued to grow its business in France in line with ourexpectations. Its core product Megabase is used by marketers to identify commonattributes shared by their customers. Once this customer profile is establishedDirectinet is able use it to select prospects from the extensive lists itmanages. This process continues to produce highly responsive prospects forDirectinet's clients. International Expansion During 2006, the group has taken the first step from being wholly UK focused tolooking at the many opportunities which are available in Europe. The acquisitionof Directinet and its subsequent integration into the group has indicated thatthe European markets are closely following developments in the UK. In 2007, thegroup will continue its policy of actively seeking suitable opportunities forinternational expansion in line with advertisers' increasing requirements forpan-European solutions. Employees At 31 December 2006, our number of employees has grown from 155 to 265, and Iwould like to thank all our employees for their determination to produce thestandards of service our clients have come to expect from IPT. I am particularlypleased to welcome the staff that joined us as a result of our acquisitionsduring 2006 and I am happy that they have integrated so positively. We have anexceptionally strong team in France and I am delighted with the contributionthat they have made to our business in implementing our strategy to move intothe European market Current Trading Turnover for the first two months of 2007 shows an increase of 46% over the sameperiod in 2006. This period has benefited from the inclusion of Directinet,France's number one online direct marketing company, which was acquired at theend of May 2006. In what is traditionally the quietest trading part of the yearDirectinet is trading strongly with the UK slightly behind 2006. The Boardcurrently believe 2007 will be another year of strong growth with turnoverexpected to be at least 40% ahead of 2006. However net income for the firsthalf of 2007 is likely to be below that achieved in 2006. Margins in the firsthalf have been adversely affected in two areas. Firstly a weak market in the UKpostal area has adversely impacted sales in our postal business and secondlysales execution within the data business. However demand for our data remainsstrong and the Board remains confident for the rest of the year. Outlook Our aim for 2007 is to continue to expand our core businesses, extend our rangeof operations both in the UK and Europe and seize new opportunities within themarket place in which we operate. Lionel ThainChief Executive Officer26 March 2007 CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006 Notes Proforma 2006 2005 2006Continuing operations £'000 £'000 •'000 Revenue 2 24,066 13,560 35,093 Cost of sales (5,220) (2,381) (7,612) ----------------------------------------------------- Gross profit 18,846 11,179 27,481 Administrative expenses --------------------------------------------------------------------------------------------------------------------- Costs of restructuring - (230) - IFRS 2 share based payment charge (73) (37) (106) Goodwill reduction expense (189) - (276) Amortisation of acquisition related intangible assets (347) (37) (506) Other administrative expenses (14,025) (9,159) (20,451)--------------------------------------------------------------------------------------------------------------------- (14,634) (9,463) (21,339) ----------------------------------------------------- Operating Profit 4,212 1,716 6,142 Profit on disposal of available-for-sale investments - 509 - Investment revenue 177 190 258 ----------------------------------------------------- Profit before tax 4,389 2,415 6,400 Tax 4 (1,081) (577) (1,576) ----------------------------------------------------- Profit for the year 3,308 1,838 4,824 =========== =========== ========== Profit attributable to equity holders of the parent 3,308 1,838 4,824 =========== =========== ========== Earnings per share 5 Basic (pence) (Euro cent) 8.4 5.7 12.25 ----------------------------------------------------- Diluted (pence) (Euro cent) 8.1 5.3 11.81 ----------------------------------------------------- The results for the current and prior years are derived from continuingoperations. Euro conversion The translation of the financial statements into pro forma balances in euros isincluded solely for convenience and the pro forma balances in euros are stated,as a matter of arithmetical computation only, on the basis of all balances beingtranslated from pounds Sterling to Euros at the rate prevailing on 31 December2006, being £1 =€1.4582(1). This translation should not be construed as meaningthat the pounds Sterling amounts actually represent, or have been or could beconverted into the stated number of Euros. CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSES FOR THE YEAR ENDED 31 DECEMBER 2006 2006 2005 £'000 £'000 Gains on revaluation of available-for-sale investments taken to equity - 59 Tax taken directly to equity - current tax 705 524 Tax taken directly to equity - deferred tax (412) 108 ------------------------------------ Net income recognised directly in equity 293 691 Transfer to profit on sale of available-for-sale investments - (509) Profit for the period 3,308 1,838 ------------------------------------ Total recognised income for the period 3,601 2,020 =========== ========== Attributable to: Equity holders of the parent 3,601 2,020 =========== ========== CONSOLIDATED BALANCE SHEET AT 31 DECEMBER 2006 Notes 2006 2005 £'000 £'000 Non-current assets Goodwill 22,951 2,635 Other intangible assets 4,915 2,357 Property, plant and equipment 797 449 Deferred tax asset 723 1,139 ------------------------------------- 29,386 6,580 ------------------------------------- Current assets Trade and other receivables 8,499 5,214 Cash and cash equivalents 7,455 5,414 ------------------------------------- 15,954 10,628 ------------------------------------- Total assets 45,340 17,208 ------------------------------------- Current liabilities Trade and other payables (7,846) (4,263) Current tax liabilities (491) (187) Obligations under finance leases - (5) Bank loans and overdrafts (242) - ------------------------------------- (8,579) (4,455) ------------------------------------- Non-current liabilities Deferred tax liability (804) (219) Other payables (3,205) - ------------------------------------- (4,009) (219) ------------------------------------- Total liabilities (12,588) (4,674) ------------------------------------- Net assets 32,752 12,534 ============ =========== EQUITY Called up share capital 6,7 177 143 Share premium account 7 23,437 6,747 Own shares 7 (215) (72) Share option reserve 7 135 62 Other reserves 7 2,335 2,372 Retained earnings 7 6,883 3,282 ------------------------------------- Total equity 7 32,752 12,534 ============ =========== CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006 Notes 2006 2005 £'000 £'000 Net cash from operating activities 8 4,780 1,859 Investing activities Interest received 177 190 Proceeds on disposal of available-for-sale investments - 755 Purchases of plant, property and equipment (583) (339) Purchases of intangibles (1,646) (920) Acquisition of subsidiaries (11,361) (1,121) ------------------------------------- Net cash used in investing activities (13,413) (1,435) ------------------------------------- Financing activities Repayment of loans and overdrafts on acquisitions (169) (2,966) Proceeds on issue of shares 11,028 2,831 Purchase of own shares (143) (70) Repayment of obligations under finance leases (5) (9) ------------------------------------- Net cash from /( used in) financing activities 10,711 (214) ------------------------------------- Net increase in cash and cash equivalents 2,078 210 Cash and cash equivalents at the beginning of the period 5,414 5,204 Effect of foreign exchange rate changes (37) - ------------------------------------- Cash and cash equivalents at the end of the period 7,455 5,414 ============ =========== NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2006 1. PRELIMINARY RESULTS The preliminary results for the year to 31 December 2005 and 31 December 2006have been prepared in accordance with International Financial ReportingStandards (IFRS) as adopted by the European Union and applied in accordance withCompanies Act 1985. However, this announcement does not contain sufficientinformation to comply with IFRS. The group expects to publish full financialstatements that comply with IFRS in March 2007 which will be delivered beforethe Company's Annual General Meeting in May 2007. This is the first year in which the group has prepared its financial statementsunder IFRS and the comparative information for the year to 31 December 2005,which was originally prepared under UK Generally Accepted Accounting Practice(UK GAAP), has been restated to comply with IFRS. An explanation of thetransition to IFRS and the reconciliations from the previously published UK GAAPfinancial statements to IFRS is contained in the transition document publishedon 11 September 2006. This Preliminary Announcement does not constitute the group's statutory accountsfor the years ended 31 December 2005 or 31 December 2006, but is derived fromthose accounts. Statutory accounts for the year to 31 December 2005, which wereprepared in accordance with UK GAAP, have been delivered to the Registrar ofCompanies. The auditors have reported on these accounts; their reports wereunqualified and did not contain statements under s237(2) or (3) Companies Act1985. The preliminary announcement was approved by the Board of Directors on 26 March2007. 2. SEGMENTAL INFORMATION Turnover and profit before tax are derived from the one principal activity ofthe group, being the provision of online direct marketing services. Thedirectors consider there is only one class of business. The group operates primarily in Europe with no other geographical segments beingmaterial for disclosure 3. HEADLINE OPERATING PROFIT 2006 2005 £'000 £'000 Reported operating profit 4,212 1,716 Add back: - goodwill reduction expense 189 - - amortisation of acquisition related intangible assets 347 36 - share based payment charges 73 37 - restructuring costs - 230 --------------------------------- Headline operating profit 4,821 2,019 ========== ========== 4. TAX The tax charge comprises: 2006 2005 £'000 £'000 Current tax Corporation tax (480) (171) Adjustment in respect of prior years 88 (16) Released through equity (705) (524) Reversal of temporary difference on available-for-sale investments - 219 ---------------------------------- (1,097) (492) ---------------------------------- Deferred tax Utilisation of deferred tax asset (97) (95) Origination and reversal of timing differences 113 10 ---------------------------------- 16 (85) ---------------------------------- Total tax on profit on ordinary activities (1,081) (577) ========== =========== Reconciliation of tax charge: 2006 2005 £'000 £'000 Profit on ordinary activities before tax 4,389 2,415 ---------------------------------- Tax at the UK corporation tax rate of 30% (1,317) (725) Effects of: Adjustment in respect of prior years 88 (16) Tax effect of expenses that are not deductible in determining taxable profit (35) (61) Effect of different tax rates in subsidiary operating in other jurisdictions (33) - Tax effect of utilisation of tax losses not previously recognised 216 - Reversal of temporary difference on available-for-sale investments - 153 Other temporary differences - 72 ---------------------------------- Tax charge for period (1,081) (577) ========== =========== 5. EARNINGS PER SHARE The calculation of group basic and diluted earnings per share is based on thefollowing profits and number of shares: 2006 2005 Number of Pence Number of Pence per Profit shares per share Profit share share £'000 '000 £'000 '000s --------------------------------------------------------------------------------- Headline earnings per share* 3,797 39,399 9.6 1,554 32,048 4.8 Reconciliation to reported earnings (net of tax at 30%): - goodwill reduction expense (189) (0.4) - - - amortisation of other intangibles - non-data (347) (0.9) (37) - - profit on available-for-sale investments - - 509 1.6 - share-based payments (73) (0.2) (37) - - restructuring costs - - (230) (0.7) - tax effect of the above items 120 0.3 79 ------------------------------------------------------------------------------------ Basic earnings per share 3,308 39,399 8.4 1,838 32,048 5.7 Impact of share options - 1,685 (0.3) - 2,556 (0.4) ------------------------------------------------------------------------------------ Diluted earnings per share 3,308 41,084 8.1 1,838 34,604 5.3 ======== ========== ====== ========== ======= ========== *Earnings per share figures are also reported before goodwill charges,amortisation of acquired intangibles, charges for share-based payments, andone-off investment gains and restructuring charges because this is considered tobe a more consistent measure of underlying performance 6. CALLED UP SHARE CAPITAL 2006 2005 Number Number '000 £'000 '000 £'000 Authorised Ordinary shares of 0.4p each 60,000 240 60,000 240 ========= ========== ========= ========== Allotted, called up, and fully paid Ordinary shares of 0.4p each 44,225 177 35,795 143 ========= ========== ========= ========== Share issues in the year ended 31 December 2006 8,429,929 shares were allotted during the year in connection with theacquisition of Directinet and J2P2N, for a consideration of £17.2m. These shareshave a nominal value of £0.03m. 7. TOTAL EQUITY Share Total Profit & loss Share premium Share account Other Own shares options account capital reserve reserve £'000 £'000 £'000 £'000 £'000 £'000 £'000 Balance at 1 January 2006 143 3,282 2,372 (72) 62 6,747 12,534 Shares issued on acquisition 11 - - - - 5,685 5,696 Placing of shares 23 - - - - 11,478 11,501 Placing costs - - - - - (473) (473) Profit retained for the year - 3,308 - - - - 3,308 Tax taken directly to equity - 293 - - - - 293 Purchase of own shares - - - (150) - - (150) Share based payments transactions - - - - 73 - 73 Exchange rate movements - - (37) - - - (37) Share options exercised - - - 7 - - 7 ----------- ------------ ----------------------- ------------------------ ----------- At 31 December 2006 177 6,883 2,335 (215) 135 23,437 32,752 ====== ======= ==== ======== ===== ======== ====== Interactive Prospect Targeting Holdings plc acquired the entire issued sharecapital of Interactive Prospect Targeting Limited pursuant to a share for shareexchange on 1 December 2004. The Other reserve reflects the difference betweenthe nominal value of the shares issued to acquire Interactive Prospect TargetingLimited and the cumulative value of the Company's share capital and sharepremium account at the date of acquisition. 8. RECONCILIATION OF OPERATING PROFIT TO OPERATING CASH FLOWS 2006 2005 £'000 £'000 Operating profit 4,212 1,716 Depreciation, amortisation and goodwill reduction expense 2,020 863 Share option expense 73 37 ----------------------------------------- Operating cash flows before movements in working capital 6,305 2,616 Increase in debtors 17 (1,747) Increase in creditors (1,342) 1,142 ----------------------------------------- Cash generated by operations 4,980 2,011 Taxation paid (200) (152) ----------------------------------------- Net cash from operating activities 4,780 1,859 ============= ============= Cash and cash equivalents comprise cash at bank and other short-term highlyliquid investments with a maturity of 3 months or less. -------------------------- (1) Source: Oanda This information is provided by RNS The company news service from the London Stock Exchange