Last checked at 13 Apr 2010 07:00
13 April 2010 Totally plc ("Totally", "the Company" or "the Group") Final Results for the year ended 31 December 2009
Chairman's Statement
In an extremely difficult economic environment I am pleased to be able toreport an excellent set of results for 2009. The turnaround in profitability ofthe Group since 2007 has been significant with an improvement of £0.6m profitfrom continuing operations.The Group generated revenues from continuing operations of £1.76m, an increaseof 4% compared to the previous year (2008:£1.69m) and EBITDA from continuingoperations of £0.17m (2008: loss £0.28m) an increase of 666%. Operating profitbefore tax from continuing operations of £0.14m (2008: loss £0.06m) an increaseof 344%. Cash generated from operating activities of £0.14m (2008: £0.02m).I believe this is a truly exceptional achievement in the worst market for manyyears and is testimony to the Group's strategy, skills of our staff, and to
theleadership of our business.Financial Year 2007 2008 2009 08/'09 07/'09 Change Change Operating (Loss)/Profit (£431,000) (£41,000) £156,000 £197,000 £587,000 EBITDA (£160,000) (£10,000) £185,000 £195,000 £345,000 Cash generated from (£119,000) £23,000 £144,000 £121,000 £263,000operations
NB: Operating Profit and EBITDA figures in this illustration exclude non-cash charges for share options (2009 £12,000, 2008:£18,000, 2007: £21,000)
Prospects
Trading since the beginning of the current financial year has been stable andthe Board is optimistic about the Group's trading performance for the fullyear.Dr Michael SinclairNon-Executive Chairman12 April 2010Further EnquiriesTotally plc Daniel Assor CEO 020 7692 6929
Merchant John East Securities Limited Simon Clements/Virginia Bull 020 7628
2200
Chief Executive Officer's statement
I was extremely pleased with the trading performance of the Group in 2009. In2007 and 2008 a number of cost cutting measures were implemented which allowedthe business to mitigate the downside of expected tough trading conditions.Revenues increased year on year across both divisions in the Group. Thereduction in the cost base combined with the increase in revenues wasresponsible for the 344% increase in operating profit before tax and thedelivery of the best trading performance since 2006.
Publishing Division Overview
The Jewish News & Media Group is the umbrella brand for the group's publishing businesses which include the Jewish News Limited and TotallyJewish.com Limited.
The group publishes on and offline media for the UK's Jewish community including:
• A weekly newspaper, `Jewish News'
• A quarterly lifestyle magazine, `Pulse'
• An annual Celebrations magazine, `TotallyJewishSimchas'
• A community portal, `www.TotallyJewish.com'
• An annual Wedding exhibition, www'TotallyJewishSimchas Live!'
Performance Highlights
* Revenues of £1,080,000, + 4.6% yr/yr.
* EBITDA of £252,000, +138% yr/yr. Operating Profit of £228,000, +192% yr/yr
* Operating Profit of £228,000, +192% yr/yr.
Operational Highlights
This division continued to consolidate its growing reputation as the number oneJewish media organisation in the UK. In 2009 an events division was launchedthrough a Wedding exhibition, TotallyJewishSimchas.com, at the Village Hotel,Elstree, Herts. The exhibition was attended by over 1,500 visitors and 80paying exhibitors.A series of Q&A sessions with high profile political leaders saw DavidMilliband and Boris Johnson face questions from over 150 paying Jewish Newsreaders and in Q1 2010 Shadow Foreign Secretary William Hague continued thishigh profile initiative. An aggressive marketing campaign was launched whichincluded the creation of a new media pack and website, TheJNgroup.com as wellas individual promotional websites for each of the two magazines in thedivisions portfolio, Pulse (www.JNPulse.co.uk) and TJ Simchas Magazine(www.TJSimchaMag.co.uk). A show reel promoting the work of the JN Media Groupis expected to be launched in Q2 2010.
Outlook for 2010
The aim is to continue to develop and expand the portfolio including the launchof an Education exhibition for the Jewish community. Combined with the annualWedding exhibition the short to medium term objective is to grow the revenue ofthe event division for the events division so that it accounts for 10% of thepublishing division's revenues. Exhibitions are seen as a growth area andprovide a realistic cross selling opportunity to existing clients within thedivision.
The annual Celebrations magazine, TotallyJewishSimchas, will be published quarterly. The lifestyle magazine, Pulse, is already published four times a year which will mean eight glossy magazines will be published in 2010
Digital Marketing Division Overview
Totally Communications, "TC", the group's digital marketing business with three main service sectors:
1. Website and software design & development
2. Consultancy & systems integration
3. Online marketing
Performance Highlights
• Revenues of £628,000, +3% yr/yr.
• EBITDA of £210,000, +12% yr/yr.
• Operating Profit of £205,000, +11% yr/yr
Operational Highlights
TC were delighted to have won a multi-agency pitch for celebrity led charity Global Cool's new website, launched at 2009 London Fashion Week.
During the period under review TC was selected by JP Morgan to construct asignificant system for a mentoring charity, African Caribbean Diversity andother notable new account wins included a new website for the Barbarians RugbyClub and a high profile online proposition for the Ghurkha Welfare Trust andtheir Debt of Honour campaign which was spearheaded by Joanna Lumley.Significant research and development was undertaken to develop the `nextgeneration' of the division's proprietary website content management system,"Pelorous". The current in-house content management system underpins 80individual applications and is used daily by over 500 users. Existing userswill be migrated onto Pelorous over the next 12 months and all new clients willhave their website developed through the system. This will give the division animproved competitive advantage in tenders by deskilling the development processand reducing the time taken to deliver projects.
Outlook for 2010
Management expect to achieve organic growth in this division in 2010 through the launch of its new search engine marketing division, RISE Digital, www.risedigital.com. The development of the RISE brand and communication materials was undertaken in Q4 in 2009 and launched in Q1 2010.
Consolidated statement of comprehensive income
For the year ended 31 December 2009
Note 2009 2008 £000 as restated £000 Continuing operations Revenue 1,758 1,688 Cost of Sales (381) (429) Gross profit 1,377 1,259 Administrative expenses (1,204) (1,287)
Profit/(Loss) before interest, tax, 173
(28)
depreciation and amortisation
Depreciation (5) (9) Amortisation (24) (22) Operating Profit/(Loss) 144 (59) Finance costs (19) (40)
Profit/(Loss) before taxation 125
(99) Income tax 4 16 18
Profit/(Loss) for the year from continuing 141
(81)operations Discounted operations Loss for the year from discounted operations - (1,000) Profit/(Loss) for the year 141 (1,081) Earnings/(Loss) per share Basic Continuing operations 0.002p (0.1p) Discounted operations - (0.9p) 0.002p (1.0p) Diluted Continuing operations 0.001p (0.1p) Discounted operations - (0.9p) 0.001p (1.0p)
Consolidated Statement of Changes in Equity
for the year ended 31 December 2009
Equity Share Share Translation Profit shareholders' capital premium Reserve and loss (deficit)/ account account funds £000 £000 £000 £000 £000 At 1 January 2008 1,124 3,353 1 (3,947) 531 Prior year adjustment - - - (53) (53)relating to revenue recognition Restated balance 1 1,124 3,353 1 (4,000) 478January 2008 Loss for the year - - - (1,081) (1,081) Currency translation - - (1) 1 -differences on foreign currency net investments Credit on issue of - - - 12 12share options Credit on issue of - - - 6 6warrants Restated balance at 31 1,124 3,353 - (5,062) (585)December 2008 Profit for the year - - - 141 141 Credit on issue of - - - 5 5share options Credit on issue of - - - 7 7warrants At 31 December 2009 1,124 3,353 - (4,909) (432)
Consolidated statement of financial position
at 31 December 2009 2009 2008 As restated As at 1 January 2008 As restated £000 £000 £000 £000 £000 £000 Assets Non current assets Intangible fixed assets 60 51 1,014
Property, plant and equipment 4 7 27
64 58 1,041 Current assets Inventories - - 8
Trade and other receivables 266 290 433
Cash and cash equivalents - 14 94 266 304 535 Total assets 330 362 1,576 Liabilities Current Liabilities Trade and other payables (321) (386) (528) Short term borrowings (441) (561) (542) (762) (947) (1,070) Non-current Liabilities
Investment in joint ventures - -
(28) Total Liabilities (762) (947) (1,098) Net (Liabilities)/Assets (432) (585) 478 Shareholders' Equity Called up share capital 1,124 1,124 1,124 Share premium account 3,353 3,353 3,353 Retained earnings (4,909) (5,062) (3,999)
Equity shareholders (deficit)/ (432) (585)
478funds
Consolidated cash flow statement
For the year ended 31 December 2009
Note 2009 2008 £000 as restated £000 Operating activities
Operating profit/(loss) from continuing 144
(59)operations Option and warrants charge 12 18 Amortisation and depreciation 29 31 Decrease in inventories - 1
Decrease in trade and other receivables 24
64
Decrease in trade and other payables (65)
(32)
Cash flow from continuing operations 144
23
Loss before taxation from discontinued -
(43)operations Depreciation - 3
Movement in working capital from discontinued -
32operations
Cash flow from discontinued operations 6 -
(8) R&D tax credit 4 16 18
Foreign tax on subsidiary profit -
(5)
Net cash flow from operating activities 160
28 Investing activities
Purchase of intangible fixed assets (33)
-
Purchase of property, plant and equipment (2)
(8) Cash disposed with subsidiary - (35)
Costs on disposal of subsidiary 6 -
(44)
Net cash flow from investing activities (35)
(87)
Cashflow/(outflow) before financing 125
(59) Financing activities Interest paid (19) (40)
Net cash utilised in financing activities (19)
(40)
Net increase/(decrease) in cash and cash 106
(99)equivalents Cash and cash equivalents at beginning of year (547)
(448)
Cash and cash equivalents at end of year (441)
(547)
Cash and cash equivalents comprise:-
Cash and short term deposits - 14 Bank overdrafts (441) (561) (441) (547)
Notes to the financial statements
For the year ended 31 December 2009
1. General information
Totally Plc is a public limited company ("Company") incorporated in the UnitedKingdom under the Companies Act 1985 (registration number 3870101). The Companyis domiciled in the United Kingdom and its registered address is Unit 611Highgate Studios, 53-79 Highgate Road, London NW5 1TL. The Company's OrdinaryShares are traded on the AIM Market of the London Stock Exchange ("AIM")
The Group's principal activities have been publishing and the provision of internet and communication services. The Company's principal activity is to act as a holding company for its subsidiaries.
2. Authorisation of financial statements and statement of compliance with IFRS
The Company's financial statements for the period ended 31 December 2009 wereauthorised for issue by the Board of Directors and the balance sheet was signedon the Board's behalf by D Assor on 12 April 2010.The Company's financial statements have been prepared with IFRS andInternational Financial Reporting Interpretations Committee ("IFRIC")interpretations as endorsed by the European Union, and with those parts of theCompanies Act 1985 and 2006 applicable to companies reporting under IFRS. TheCompany's financial statements have been prepared on the same basis and aspermitted by Section 408 of the Companies Act 2006 no income statement ispresented for the Company. The Company incurred a loss of £17,000 for the yearended 31 December 2009 (2008: loss £1,317,000).
3. Basis of preparation
The financial year represents the 365 days to 31 December 2009, and the priorfinancial year, 366 days to 31 December 2008. The financial statements arepresented in sterling and all values are rounded to the nearest thousand pounds(£000) except when otherwise indicated.
The financial statements are prepared on a going concern basis which the Directors believe to be appropriate for the following reasons. The Group currently meets its day to day working capital requirements through two overdraft facilities which are repayable on demand.
The Group has confirmed the availability of a facility of £700,000 with BankHapoalim which was renewed on 8 July 2009 until 30 June 2010. As security forthe facility, the bank has obtained the unlimited Joint and Several Guaranteesof Dr. Michael J. Sinclair (non-executive Chairman), and Mr Leo Noe.In addition, a working capital facility of £50,000 has been agreed with NatWestwhich is secured on the Group's debtor book. This facility is due for renewalon 31 March 2010.
The Directors have prepared projected cash flow information for the period ending 12 months from the date of their approval of these financial statements.
On the basis of cash flow forecasts and discussions with the Group's bankers, the Directors consider that the Group will be able to operate within the facilities currently agreed.
Inherently, there can be no certainty in relation to these matters, but theDirectors believe that the going concern basis of preparation continues to beappropriate.4. Taxationa) Taxation charge 2009 2008 £'000 £'000
Research and development tax credit (16)
(18)
Total current income tax credit charged in the income (16) (18)statement b) Taxation reconciliation 2009 2008
The current income tax credit for the period is £'000
£'000explained below: Profit/(loss) before tax 125 (1,086) Taxation at the standard UK income tax rate of 28 per 35 (304)cent. (2008: 28 per cent)
Research and development tax credit (16)
(18)
Deferred tax movement not provided for 35
304
Total income tax credit charged in the income (16)
(18)statement c) Deferred taxEstimated tax losses of £3,699,000 (2008: £3,733,000) are available to relievefuture profits of the Group. A deferred tax asset has not been recognised inrespect of these losses due to uncertainty as to the timing and tax rate atwhich these losses will be utilised.
5. Share capital and reserves
31 December 31 December 2008 2009 £'000 £'000 Authorised 125,000,000 ordinary shares of 1p each (2008: 1,250 1,250125,000,000)
20,500,000 deferred shares of 1p each (2008: 205
2052,050,000)
Allotted, called up and fully paid 91,947,934 ordinary shares of 1p each (2008: 919
91991,947,934)
20,500,000 deferred shares of 1p each (2008: 205
20520,500,000) 1,124 1,124Issue of deferred shares
On 30 September 2008 20,500,000 1p Ordinary Shares were re-designated as Deferred Shares.
The Deferred Shares issued carry no voting rights, no rights to attend generalmeetings of the Company, and no rights to receive dividends. The DeferredShares do carry a right to participate in any return of capital to the extentof 0.01 pence per Deferred Share but only after each Ordinary Share hasreceived in aggregate capital repayments totalling £1,000,000 per OrdinaryShare.
Earnings per share
The calculation of the basic earnings / (losses) per share is based on theprofit of £141,000 (2008 as restated: loss of £1,081,000) and on 91,947,934(2008: 107,322,909) ordinary shares being the weighted average number of sharesin issue during the period. The diluted loss per share for 2009 is based on aprofit of £141,000 and 91,947,934 ordinary shares, 16,943,333 outstandingoptions and 100,213,012 outstanding warrants. The diluted earnings per share in2008 is the same as the basic earnings per share. In accordance with IAS 33which prescribes that potential ordinary shares should only be used as dilutivewhen, and only when, their conversion to ordinary shares would decrease netprofit or increase net loss per share from continuing operations.
Share options
On 27 July 2009 7,575,000 share options at an exercise price ranging between1.5 pence and 4.38 pence per share were surrendered and 10,575,000 new optionswere issued at an exercise price of 1 pence per share. The options areexercisable from the date of issue up to 27 July 2019.On 8 October 2009, 1,050,000 share options at an exercise price ranging between1.5 pence and 3.62 pence per share were surrendered and a further 3,050,000share options were issued at an exercise price of 1 pence per ordinary share.The options are exercisable from the date of issue up to 8 October 2019.
In summary at 31 December 2009, there are 16,943,333 options still in issue.
Warrants currently in issue
On 21 May 2002, in conjunction with a share placing, subscribers to the placingshares were issued 4,583,329 warrants (one warrant for every four sharessubscribed). The warrants are exercisable at 5 pence per ordinary share. Thewarrants are exercisable in the 45 day periods following either publication ofthe Company's half year results or adoption of the Company's annual accounts.The last exercise period is the earliest of either the 45 day period followingthe adoption of the Company's accounts for the year ended 31 December 2008 or,subject to certain exceptions, on a winding up of the Company where there is asurplus payable to the ordinary share holders.On 18 June 2004, 10,000,000 warrants were issued at an exercise price of 5pence per ordinary share and 4,394,350 warrants were issued at an exerciseprice of 4.375 pence per ordinary share. The warrants are exercisable from thedate of issue up to 18 June 2011. The 4,394,350 warrants have been cancelled on30 September 2008 as part of the disposal of The Jewish Advocate PublishingCorporation.On 30 September 2008 70,000,000 warrants were issued at an exercise price of 1pence per ordinary share. The warrants are exercisable from the date of issueand have no fixed expiry date.On 27 July 2009, 6,752,538 warrants at an exercise price ranging between 1.5pence and 4.38 pence were surrendered and 16,752,538 new warrants were issuedat an exercise price of 1 pence share. The warrants are exercisable from thedate of issue up to 27 July 2019.On 8 October 2009 166,666 warrants were issued at an exercise price of 1 penceper ordinary share. The warrants are exercisable from the date of issue up to 8October 2019.
In summary at 31 December 2009, there are 100,123,012 warrants still in issue.
Share premium account
The share premium account represents the amounts received by the Company on theissue of Ordinary Shares that are in excess of the nominal value of the issuedshares.
6. Notes to the cash flow statement
2009 2008 £'000 £'000
(i) Cash flows relating to discontinued operations Cash flows from operating activities Loss before taxation from discontinued operations -
(43) Depreciation - 3 Decrease in inventories - 6
Decrease in trade and other receivables -
28
Increase in trade and other payables -
(2) - (8)
Foreign tax on subsidiary profit -
(5)
Net cash utilised by operating activities -
(13)
Cash flows from investing activities Purchase of non current assets -
-
Cash disposed with subsidiary -
(35)
Net cash utilised by investing activities -
(35) Cash flow before financing - (48)
Cash flows from financing activities
Interest received - -
Net cash from financing activities -
-
Net decrease in cash and cash equivalents -
(48)
Cash and cash equivalents at beginning of year -
48
Cash and cash equivalents at 31 December 2009 -
-
7. Related party transactions
The Group has taken advantage of the exemption available under IAS 24, "RelatedParty Disclosures", not to disclose details of transactions with its subsidiaryundertakings.
The following related party transactions have been carried out at arms length and are required to be disclosed in accordance with IAS24.
As set out in note 1, Dr Michael Sinclair, and Mr Leo Noe have provided guarantees in respect of the Group's current overdraft facility.
In 2009, purchases of £2,000 (2008: £4,000), on an arm's length basis were madefrom J Margolis, mother of A Margolis who is a director of Totallyjewish.comLimited. A balance of £nil (2008: £1,000) is included in trade creditors at theyear end.Included in trade debtors is an amount of £15,000 (2008: £30,000) due fromTotally Jewish Travel Inc., a company in which the Group had a joint ventureinterest, that was sold during 2008. Sales of £5,000 (2008: £54,000) relatingto system support have been made in the year. Balances of £nil due from TotallyJewish Travel Inc. (2008: £18,000) have been written off during the year.During 2009, 9,080,633 warrants (2008: nil) and 5,450,000 options (2008: nil)have been granted to D Assor. The exercise prices are 1 pence per option andper warrant.During 2009, 7,671,905 warrants (2008: nil) and 5,125,000 options (2008: nil)have been granted to A Margolis. The exercise prices are 1 pence per option andper warrant.
During 2009, no warrants (2008: 35,000,000) have been granted to Dr M Sinclair. The exercise price is 1 pence per warrant.
8. Contingent liabilities
The company is party to a group banking arrangement with NatWest Bank Plc whichincludes a debenture, unlimited corporate guarantee and letters of offsetbetween Totally Plc, Totally Communications Limited, The Jewish News Limitedand TotallyJewish.com Limited. Totally Plc has a contingent liability inrespect of these borrowings which at 31 December 2009 amounted to £nil (2008: £nil).9. Dividend
The Directors do not propose the payment of a dividend.
10. Copies of Report and Accounts
Copies of the Report and Accounts will be posted to shareholders shortly, willbe available from the Company's registered office Unit 611 Highgate Studios,53-79 Highgate Road, London NW5 1TL and are available from the Company'swebsite www.totallyplc.com.
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