RNS Number:6732M
Avesco PLC
24 June 2003
FOR IMMEDIATE RELEASE 24 June 2003
AVESCO PLC
PRELIMINARY RESULTS FOR THE YEAR
ENDED 31 MARCH 2003
Avesco plc, the provider of specialist services to the corporate presentation,
entertainment and broadcast markets, today announces its preliminary results for
the year ended 31 March 2003.
Key highlights
*Strong management action has reduced net debt by #8.8 million to #10.3
million
*Generated EBITDA on Core Services continuing operations of #10.1 million
in a very difficult market
*Successful sales activities resulted in continuing operations turnover
increasing by 1.7% to #56.1 million
*Profit before taxation and goodwill amortisation of #2.0 million
*Complete Communications met expectations with a contribution of #2.7
million to operating profits
Richard Murray, Chairman of Avesco, commented on the results:
"We believe that the strong management that has been exerted on our Core
Services businesses leaves them well placed to benefit, when economic conditions
improve, from their stronger market position and substantially reduced cost
base. Avesco's strong cash generation, relatively low level of debt and the
diversity derived from shareholdings in our associates, Complete and Medal, give
me confidence for the future, as we continue our development of the Group."
For further information please contact
David Nicholson, Chief Executive, Avesco plc Tel: 020 8974 1234
David Brocksom, Finance Director, Avesco plc
CHAIRMAN'S STATEMENT
As the founder of Avesco it is with pleasure that I again write to you as
Chairman, since my reappointment on the 6 September 2002.
The continuation of the difficult trading conditions experienced by most of our
businesses completely endorses our decision, taken nearly two years ago at a
very early stage of the downturn, to focus upon cash generation. As a result,
the Group has been repositioned not only to withstand the current hostile
environment but also to take full advantage of any improvement in the markets in
which we operate.
To underline my commitment to the Group and my confidence in its prospects, I
increased my shareholding from 6.3% to 19.1% during the past year.
Group turnover for the year to 31 March 2003 was #60.1 million, a 7.7% decline
compared to the previous year, reflecting the sale in August 2002 of Fountain
Studios. Excluding the discontinued operations of Fountain Studios and Creative
Technology Outside Broadcast, which was sold in June 2003, continuing
operations' turnover actually increased by 1.7% to #56.1 million (2002: #55.2
million).
Group operating profit including discontinued operations and before goodwill
amortisation was #1.3 million (2002: #7.3 million). Group operating profit for
continuing operations and before goodwill amortisation was #2.4 million (2002:
#6.3 million).
The net interest cost for the year was #0.4 million (2002: #0.9 million). A
profit was made on the disposal of Fountain Studios of #1.1 million. The Group
made a loss before taxation of #3.2 million (2002: #1.5 million) after goodwill
amortisation of #5.1 million (2002: #5.1 million).
The Group continued to be cash generative and net debt was reduced by #8.8
million to #10.3 million at 31 March 2003 (2002: #19.1 million).
Basic and diluted losses per share were 23.0 pence (2002: earnings per share of
0.1 pence). Adjusted earnings per share in respect of continuing operations and
after adjusting for goodwill amortisation and non-operating exceptional items,
calculated at a notional 30% tax rate were 8.5 pence (2002: 22.9 pence).
As indicated at the interim stage, the Board is recommending a reduction in the
final dividend to 3 pence per share (2002: 8 pence per share), making a total
dividend for the year of 5 pence per share (2002: 13 pence per share).
Core Services
The Group's Core Services suffered from weaker demand in all their markets as a
result of the difficult economic climate. These poor trading conditions were
compounded, particularly in the final quarter, by the uncertainty created in the
build up to the Iraq war. Customers were reluctant to commit to events but also
reduced their budgets for the events that did take place.
Despite the market conditions, the Group's continuing operations still increased
their level of turnover compared to last year and, as a result, our businesses
increased their market shares. However, competition for available business was
intense with the consequent pressure on prices and margins.
The Group implemented further capital expenditure and operating cost reductions.
We have reduced our staff numbers to 423 people at the year-end compared to 508
people in April 2002.
Complete Communications Corporation Limited ("Complete")
Our 49% associate, Complete, made a contribution to Group profits of #2.7
million (2002: #7.1 million), in line with expectations for the year.
'Who Wants To Be A Millionaire?' is undoubtedly one of the world's most
successful television formats, and Complete's development of the brand has
become a template within the industry. Complete believes that the brand has
longevity and that strong revenues worldwide will continue for some years.
A milestone in the year was the release of its first feature film "Dirty Pretty
Things", in December 2002, to great critical acclaim. The film was profitable
for Complete.
Disposals
During the year Avesco disposed of Fountain Studios, the broadcast television
studio service business. We received proceeds of #7.0 million, comprising #5.5
million in cash and the balance in shares of Medal Entertainment and Media plc
("Medal"), the purchaser, before a net current asset adjustment of #0.1 million
and before costs.
For the financial year to 31 March 2003, the Group has treated Medal as an
investment. However we now believe that shareholders' interests in the potential
creation of longer term value will be best achieved by retaining our substantial
shareholding in Medal. Your Board has become more actively involved with the
affairs of Medal, of which I am a director and therefore Avesco will treat Medal
as an associate company in its accounts with effect from April 2003. Medal, of
which Avesco now owns 23.7%, made a profit before taxation of #605,000 in the
year to 31 March 2003.
Since the year-end, the Group has disposed of the business and assets of
Creative Technology Outside Broadcast Limited.
Group Board
John Morton resigned during the year to concentrate on his other commitments and
the Board thanks him for his contribution to the Group during his nine years
with Avesco as a non-executive Director and latterly as Chairman.
I am pleased to welcome Ian Martin, who joined the Board as a non-executive
director in September 2002. Ian is the chief executive of Transport Systems plc,
an AIM listed company, and a non-executive director of Chelverton Asset
Management Limited. Previously Ian spent ten years at The Brockbank Group plc,
where his responsibilities included the management and eventual sale of Admiral
Insurance Services, the direct motor insurer.
Employees
Our employees have continued to bear the brunt of the difficult trading
conditions. They have responded superbly, continuing to deliver a high quality
of service to our customers and it is through their efforts that we have been
able to improve our market position. I should like to thank them for their
continuing commitment during the past year.
Prospects - Core Services
After such a challenging period, it is pleasing to report that we are seeing
some signs of improvement in our markets. Customers are generally talking more
positively about the second half and, with the conclusion of the Iraq war, are
anticipating a more settled environment as we move into the autumn.
Currently, trading in our UK and European businesses remains difficult but the
North American business is performing strongly due to both a more positive
environment and the strengthening of the management team.
Prospects - Complete
We anticipate revenues from Complete in 2003/4 remaining strong although
predicting future income streams does remain difficult. We are looking to the
reduction in income from 'Who Wants To Be A Millionaire?' being partly offset by
income from new formats developed both internally and by external sources.
Complete remains one of the most successful UK production companies with three
shows shortly to be shown on terrestrial television, and many other new
programmes in development. They also represent internationally a number of high
quality, externally created formats on behalf of other major independent UK
production companies.
It is part of Complete's strategy to expand into radio broadcasting and as such
an application has been submitted for the FM licence in the West Midlands, a
decision on which will be made in September 2003.
Prospects - Conclusion
We believe that the strong management that has been exerted on our Core Services
businesses leaves them well placed to benefit, when economic conditions improve,
from their stronger market position and substantially reduced cost base.
Avesco's strong cash generation, relatively low level of debt and the diversity
derived from shareholdings in our associates, Complete and Medal, give me
confidence for the future, as we continue our development of the Group.
Richard Murray
Chairman
24 June 2003
CHIEF EXECUTIVE'S REVIEW
Our businesses provide services to the corporate, entertainment, sport and
broadcast events markets. These markets are highly sensitive to both the level
of economic activity and business confidence and, consequently, the stagnation
of the European and North American economies and the high level of uncertainty
globally made for a challenging year.
Many of the events are international and therefore rely on the willingness of
attendees to travel, whilst local and national events have been cut back due to
the lack of business confidence. As a result, the sectors in which the Group
operates have been especially hard hit and with the decline in business volumes,
prices and margins have been under extreme pressure with less financially secure
competitors pricing for cash in their desperation to survive.
Throughout the year we continued to manage our operations tightly, with sales,
cost control and cash management continuing to receive our constant focus.
Our sales activities have been relatively successful in that we have taken more
of the available business in all our operations. Our turnover in continuing
activities actually increased by 2% year on year, a real tribute to the
considerable sales efforts from our management and sales teams.
We reduced our headcount during the year by a further 85 people, representing
17% of staff employed at 1 April 2002, of which 44 were accounted for by the
sale of Fountain Studios. This followed the 22% reduction in staff numbers in
the 2001/02 year, as we seek to balance our staff numbers against revenue and to
improve our efficiency. Other expenditure was kept under tight control and also
capital expenditure was reduced for the second successive year. Nevertheless we
have used our relative financial strength to take advantage of attractive
payback opportunities on equipment enabling us to maintain our market
competitiveness.
Our net debt was reduced to #10.3 million at the year-end (2002: #19.1 million).
Cash generated from the Group's operating activities contributed #3.7 million to
this reduction in debt, with a further #5.1 million cash net of costs arising
from the disposal of Fountain Studios and #1.5 million from dividends received
from our associate Complete.
We intend to reduce further our cost base and improve our operational
efficiencies by consolidating our Corporate Presentation businesses, Creative
Technology, Screenco and MCL London, onto one site, together with Group senior
management. We are well advanced in the negotiation to lease new premises and to
dispose of our existing sites.
Corporate Presentations Services
Creative Technology London, in a very tough market, continued to provide its
services at the major European Motor Shows to Ford, Jaguar, Mazda and Landrover
(produced by Imagination), and also to Toyota Lexus at the Paris show. Other
events for which Creative Technology provided its services included the
Conservative Party Conference and AGM (produced by CCOCL), the Microsoft Orange
Handset Launch (produced by Park Avenue) and the seven week long Disney
Playhouse Tour for the Disney Corporation. CT Exhibitions at the NEC supplied
many exhibitions during the year including, IPEX (International Printing
Exhibition) and Interbuild.
Dimension, our specialist audio business, supplied its services alongside other
group companies at many events, including the Manchester Commonwealth Games.
Dimension also worked for the first time at the major European motorshows for
Ford (produced by Imagination) as well as at other events such as the IBM
Multishow (produced by Project Worldwide).
Screenco performed relatively well in the year, providing its screen services to
many major events including the Queen's Golden Jubilee (produced by Unusual
Services), the Manchester Commonwealth Games and Picnic in the Park (for Clear
Channel). Screenco was particularly successful with television shows including
"Sports Personality of the Year" (BBC) and "Ant and Dec" (LWT).
MCL, which provides its services nationwide, performed very creditably with
particularly good results coming from its Birmingham and Edinburgh operations.
Events supplied included the Scottish Labour Party Conference (produced by
Speakeasy Productions), the Intelligent Finance UK Tour, the Manufacturers'
Summit 2002 and the Royal Mail Road Show.
Action, based in Monaco and Cannes, had an excellent year despite intense
competition. Action provided its services to customers of the leading
international exhibitions MIP, MIPCOM and MIDEM, as well as for other events
such as the GSM Awards (produced by IBC) and the Championnat de France
d'Athletisme (produced by Objectif Sud).
JVR in Holland further improved its local market position with a good
performance. JVR provided its services to Endemol for several television shows,
the TMF Awards 2002 (produced by Sightline) and to EMC2 for a number of product
launches in different European cities.
CT Germany was launched successfully in January 2003 and has already covered
many events, including supplying Saab AB for their stands at the Detroit,
Amsterdam and Geneva motorshows and Severich and Partners/Vodafone at the CeBIT
exhibition in Hanover.
CT Los Angeles and CT San Francisco improved their performance with reduced
losses, especially in the second half year. They supplied their services to many
major events including the Sony Playstation booth at the E3 exhibition (produced
by Shout Creative), the IBM eBU's in Barcelona, Orlando and Shanghai and Bank of
America's Annual Fall Conference in San Francisco. The television market in Los
Angeles is a key sector and we were successful in providing services to events
such as the 75th Academy Awards "Oscars" and the Emmy Awards Show (both produced
by Seligman Entertainment), the Golden Globes Award Show (produced by NBC/Access
Hollywood) and "America's Search for the Most Talented Kid" television show (NBC
Productions).
CT Chicago had an excellent year, with a strong profit performance in a tough
market. CT Chicago provided services for a wide range of events including Toyota
/Lexus press events (produced by George P. Johnson) at the Detroit Auto Show,
Takeda Pharmaceutical's Annual Business Meeting in Orlando (produced by Jack
Morton Worldwide), Hewlett Packard's Analyst Meeting (produced by Kaleidoscope)
and Burger King's Marketing Brand Tour (produced by Novasphere).
Broadcast Services
Presteigne Broadcast Hire had an excellent first half, despite the underlying
poor market conditions, as it covered some major events including the
Commonwealth Games, the Queen Mother's Funeral and the Golden Jubilee. Despite a
more difficult second half, Presteigne continued to build its customer base,
adding a number of new customers.
CT Outside Broadcast had a tough year in a highly competitive market. Since the
year-end, we have sold CT Outside Broadcast to complete our planned exit from
the television facilities market, having sold Fountain Studios during the year.
Complete Communications Corporation Limited ("Complete")
Revenues from "Who Wants To Be A Millionaire?" were in line with expectations
and Complete continues to exploit imaginative ways of generating further
revenues from the format through promotional activity and new media
applications. Amongst other programming produced during the year were the second
series of "All About Me", to be broadcast by the BBC from September 2003, and a
further series of the BBC's National Lottery Show "Winning Lines".
The company's strategy to represent high quality, externally created formats is
coming to fruition. A number of transactions have been confirmed and discussions
are at an advanced stage with several other parties.
In December 2002 Complete's subsidiary, Celador Films, released its first film,
"Dirty Pretty Things", which received critical acclaim, winning awards as well
as being nominated in two categories at the 2003 BAFTA Awards. Celador Films'
second film is scheduled to start production in September 2003.
Complete also wishes to expand its radio interests and has submitted an
application to the Radio Authority for an FM licence in the West Midlands. This
is a highly contested regional licence which will be awarded in September.
David Nicholson
Chief Executive
24 June 2003
------------------------------- ------ ------- ------ -------
ANALYSIS OF RESULTS 2003 2002
FOR THE YEAR ENDED 31 MARCH 2003 #'000 #'000
Turnover
Continuing operations 56,122 55,181
Discontinued operations 4,013 9,989
------------------------------- ------ ------- ------ -------
Group Turnover 60,135 65,170
------------------------------- ------ ------- ------ -------
----------------------------------- ------- ------ -------
Earnings before interest, taxation,
depreciation
and amortisation on continuing activities 10,057 10,118
('EBITDA') ------- ------ -------
-----------------------------------
Operating (loss) / profit
Continuing operations - trading 1,036 785
Complete 2,687 7,093
------------------------------- ------ ------- ------ -------
3,723 7,878
Central costs (1,257) (1,270)
------ ------
Discontinued operations - trading (618) 990
Restructuring and reorganisation
costs in continuing operations (105) (340)
------ ------
Discontinued operations - impairment
of tangible fixed assets (413) -
------ ------
(1,136) 650
------------------------------- ------ ------- ------ -------
Group operating profit before 1,330 7,258
goodwill amortisation ------ ------- ------ -------
-------------------------------
Net interest payable (397) (943)
Profit on disposal of Fountain 1,061 -
Television Limited
Other exceptional items - 346
------------------------------- ------ ------- ------ -------
Profit before taxation and goodwill 1,994 6,661
amortisation ------ ------- ------ -------
-------------------------------
Goodwill amortisation (5,146) (5,116)
------------------------------- ------ ------- ------ -------
Net (loss) / profit before (3,152) 1,545
taxation ------ ------- ------ -------
-------------------------------
Continuing and discontinued operations refer to Core Services only
----------------------- --- ----------- -------- ------ --------
CONSOLIDATED PROFIT AND 2003 2002
LOSS ACCOUNT
FOR THE YEAR ENDED 31 MARCH 2003 #'000 #'000
--- ----------- -------- ------ --------
-----------------------
Turnover
Group and share of 81,117 95,443
associates' turnover
Less: share of (20,982) (30,273)
associates' turnover --- ----------- -------- ------ --------
-----------------------
Group turnover 60,135 65,170
----------------------- --- ----------- -------- ------ --------
Continuing operations 56,122 55,181
Discontinued 4,013 9,989
operations --- ----------- -------- ------ --------
-----------------------
Group turnover 60,135 65,170
----------------------- --- ----------- -------- ------ --------
Operating (loss)
Continuing operations
-------- ------ --------
- operating (loss) excluding exceptional (5,367) (5,421)
items
- exceptional items (see note 3) (105) (589)
-------- ------ --------
Total continuing operations (5,472) (6,010)
-------- ------ --------
Discontinued
operations
-------- ------ --------
- operating (loss) / profit excluding (618) 810
exceptional items
- exceptional items (see note 3) (413) -
-------- ------ --------
Total discontinued operations (1,031) 810
-------- ------ --------
----------------------- --- ----------- -------- ------ --------
Group operating (loss) (6,503) (5,200)
Share of associates' 2,687 7,342
operating profit
-------------------------------- -------- ------ --------
Group and share of associates' operating (3,816) 2,142
(loss) / profit
Profit on disposal of 1,061 60
operations
Share of profit on - 286
disposal of operation
-------------------------------- -------- ------ --------
(Loss) / profit on ordinary activities (2,755) 2,488
before interest and taxation
Net interest payable (397) (943)
and similar items
-------------------------------- -------- ------ --------
(Loss )/ profit on ordinary activities (3,152) 1,545
before taxation
Taxation on profit on (624) (1,531)
ordinary activities
-------------------------------- -------- ------ --------
(Loss) / profit on ordinary activities after (3,776) 14
taxation
Equity minority 20 -
interests --- ----------- -------- ------ --------
-----------------------
(Loss) / profit for the (3,756) 14
year
Dividends paid and (816) (2,133)
proposed --- ----------- -------- ------ --------
-----------------------
Retained (loss) for the (4,572) (2,119)
financial year --- ----------- -------- ------ --------
-----------------------
(Losses) / earnings per
share
Basic and diluted (23.0p) 0.1p
Adjusted 8.5p 22.9p
Dividends per share 5.0p 13.0p
----------------------- --- ----------- -------- ------ --------
Adjusted earnings per share are stated before goodwill amortisation,
non-operating exceptional items and are in respect of continuing operations
only, at a notional 30% tax rate. The prior year comparatives have been restated
accordingly.
------------------------------ -------- --------
CONSOLIDATED BALANCE SHEET AS AT 31 2003 2002
MARCH 2003
#'000 #'000
------------------------------ -------- --------
Intangible assets 4,998 10,297
Tangible assets 28,141 37,486
------------------------------ -------- --------
33,139 47,783
Investment in associates 4,067 3,579
Other investments 1,472 -
------------------------------ -------- --------
Total fixed asset investments 5,539 3,579
------------------------------ -------- --------
Fixed assets 38,678 51,362
Stocks 698 806
Debtors 12,402 13,297
Cash 1,301 1,369
------------------------------ -------- --------
Current assets 14,401 15,472
Creditors: amounts falling due within one year (17,360) (20,007)
------------------------------ -------- --------
Net current (liabilities) (2,959) (4,535)
------------------------------ -------- --------
Total assets less current liabilities 35,719 46,827
Creditors: amounts falling due after more than one (5,134) (11,400)
year
Provisions for liabilities and charges - (231)
------------------------------ -------- --------
Net assets 30,585 35,196
------------------------------ -------- --------
Called up share capital 1,632 1,632
Share premium account 31,269 31,269
Profit and loss account (2,316) 2,295
------------------------------ -------- --------
Equity shareholders' funds 30,585 35,196
------------------------------ -------- --------
Minority interest - -
------------------------------ -------- --------
Total capital employed 30,585 35,196
------------------------------ -------- --------
----------------------------- --------- ---------
CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR 2003 2002
ENDED 31 MARCH 2003
#'000 #'000
----------------------------- --------- ---------
Continuing operations 11,697 7,426
Discontinued operations (217) 1,906
----------------------------- --------- ---------
Net cash flow from operating activities 11,480 9,332
Dividends from associate 1,514 9,430
Interest received 54 73
Interest paid (295) (926)
Interest element of hire purchase payments (378) (466)
----------------------------- --------- ---------
Returns on investments and servicing of finance (619) (1,319)
UK taxation 253 (1,063)
Overseas taxation 578 (4)
----------------------------- --------- ---------
Taxation 831 (1,067)
----------------------------- --------- ---------
Net cash flow before capital expenditure 13,206 16,376
Purchase of tangible assets (11,554) (10,993)
Sale of tangible assets 3,781 1,816
----------------------------- --------- ---------
Capital expenditure (7,773) (9,177)
Acquisition of subsidiaries and businesses (106) (4,737)
Disposal of subsidiaries and businesses 4,897 260
Net overdraft disposed of with subsidiaries 238 -
Disposal of associates - 694
----------------------------- --------- ---------
Acquisitions and disposals 5,029 (3,783)
Equity dividends paid (2,120) (2,109)
----------------------------- --------- ---------
Net cash flow before financing 8,342 1,307
Issue of share capital - 501
Issue of share capital in subsidiaries to minority 20 -
interests
Net change in bank loans (5,922) 6,641
Net change in hire purchase obligations (2,329) 113
----------------------------- --------- ---------
Financing (8,231) 7,255
----------------------------- --------- ---------
Change in cash in the year 111 8,562
----------------------------- --------- ---------
Net debt (10,279) (19,122)
----------------------------- ------ --------- ---------
------------------------------ --------- ---------
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS 2003 2002
AND LOSSES FOR THE YEAR ENDED 31 MARCH 2003
#'000 #'000
------------------------------ --------- ---------
Group (5,758) (5,418)
Associates 2,002 5,432
------------------------------ --------- ---------
(Loss) / profit for the year (3,756) 14
Group currency translation differences before (39) 6
taxation
Taxation effect of Group currency translation - -
differences --------- ---------
------------------------------
Group currency translation differences (39) 6
Associate currency translation differences - -
------------------------------ --------- ---------
Currency translation differences (39) 6
------------------------------ --------- ---------
Total recognised gains and (losses) relating to (3,795) 20
the year --------- ---------
------------------------------
CONSOLIDATED RECONCILLATION OF MOVEMENTS IN EQUITY SHAREHOLDERS' FUNDS
FOR THE YEAR ENDED 31 MARCH 2003
------------------------------ --------- ---------
2003 2002
#'000 #'000
------------------------------ --------- ---------
(Loss) / profit for the year (3,756) 14
Dividends (816) (2,133)
------------------------------ --------- ---------
Retained (loss) for the financial year (4,572) (2,119)
Currency translation differences (39) 6
Share options exercised - 501
------------------------------ --------- ---------
Net reduction to equity shareholders' funds (4,611) (1,612)
Opening equity shareholders' funds 35,196 36,808
------------------------------ --------- ---------
Closing equity shareholders' funds 30,585 35,196
------------------------------ --------- ---------
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1 Segmental analysis by class of business
The Group has two separate classes of business:
(a) The core operations ('Core Services') providing specialist media
related support services to the corporate, presentation, entertainment,
sports and broadcast markets; and
(b) The television programme production, licensing and merchandising
business carried out by its associate, Complete Communications
Corporation Limited ('Complete') based in the United Kingdom.
The results are shown after costs directly relating to each class of business.
Turnover
-------------------------------- --------- ---------
2003 2002
#'000 #'000
-------------------------------- --------- ---------
Core Services 60,135 65,170
Complete 20,982 30,273
-------------------------------- --------- ---------
Group and share of associate turnover 81,117 95,443
-------------------------------- --------- ---------
(Loss) / profit on ordinary activities before taxation
Excluding Including
goodwill goodwill
amortisation amortisation
---------------------- ---
-------- -------- -------- --------
2003 2002 2003 2002
#'000 #'000 #'000 #'000
---------------------- --- -------- -------- -------- --------
Core Services - (326) (825) (5,472) (5,761)
Continuing
operations
Core Services - (1,031) 990 (1,031) 810
Discontinued --- -------- -------- -------- --------
operations
----------------------
(1,357) 165 (6,503) (4,951)
Complete 2,687 7,093 2,687 7,093
---------------------- --- -------- -------- -------- --------
1,330 7,258 (3,816) 2,142
Goodwill (5,146) (5,116) - -
amortisation --- -------- -------- -------- --------
----------------------
Group and share of
associates' operating
(loss) / profit (3,816) 2,142 (3,816) 2,142
Non-operating 1,061 346
exceptional items
Net interest payable (397) (943)
and similar items
------------------------------ -------- -------- --------
(Loss) / profit on ordinary activities (3,152) 1,545
before taxation -------- -------- --------
------------------------------
Included above within Core Services continuing operations are restructuring and
reorganisation costs of #105,000 (2002: #340,000) and, within discontinued
operations, impairment provisions against the tangible fixed assets in Creative
Technology Outside Broadcast Limited of #413,000 (see note 3).
Net assets
Excluding Including
---------------------- --- goodwill goodwill
-------- -------- -------- --------
2003 2002 2003 2002
#'000 #'000 #'000 #'000
---------------------- --- -------- -------- -------- --------
Core Services - 30,368 33,326 35,366 43,623
Continuing operations
Core Services - 1,431 7,597 1,431 7,597
Discontinued operations --- -------- -------- -------- --------
----------------------
31,799 40,923 36,797 51,220
Complete 4,067 3,579 4,067 3,579
---------------------- --- -------- -------- -------- --------
35,866 44,502 40,864 54,799
Goodwill 4,998 10,297 - -
---------------------- --- -------- -------- -------- --------
Capital employed 40,864 54,799 40,864 54,799
Net debt (10,279) (19,122)
Deferred acquisition - (250)
payments
Provisions for - (231)
liabilities and charges --- -------- -------- -------- --------
----------------------
Net assets 30,585 35,196
---------------------- --- -------- -------- -------- --------
2 Segmental analysis by geographical location
Turnover by destination
------------------------------- --------- ---------
2003 2002
#'000 #'000
------------------------------- --------- ---------
United Kingdom 28,417 32,623
Mainland Europe 7,611 7,745
United States of America 23,264 23,848
Rest of the World 843 954
------------------------------- --------- ---------
Group turnover 60,135 65,170
------------------------------- --------- ---------
Turnover by origin
------------------------------- --------- ---------
2003 2002
#'000 #'000
------------------------------- --------- ---------
United Kingdom 29,287 33,767
Mainland Europe 6,682 7,787
United States of America 24,166 23,616
------------------------------- --------- ---------
Group turnover 60,135 65,170
------------------------------- --------- ---------
(Loss) / profit on ordinary activities before taxation by origin
Excluding Including
goodwill goodwill
amortisation amortisation
--------------------- ----
-------- -------- -------- --------
2003 2002 2003 2002
#'000 #'000 #'000 #'000
--------------------- ---- -------- -------- -------- --------
United Kingdom 1,460 8,195 (1,796) 6,162
Mainland Europe 655 312 (326) (615)
United States of America (785) (1,249) (1,694) (3,405)
--------------------- ---- -------- -------- -------- --------
1,330 7,258 (3,816) 2,142
Goodwill amortisation (5,146) (5,116) - -
----------------------- -------- -------- -------- --------
Group and share of associates'
operating (loss) / profit (3,816) 2,142 (3,816) 2,142
Non-operating exceptional 1,061 346
items
Net interest payable and (397) (943)
similar items
----------------------------- -------- -------- --------
(Loss) / profit on ordinary activities (3,152) 1,545
before taxation -------- -------- --------
-----------------------------
Net assets by location
Excluding Including
--------------------- goodwill goodwill
-------- -------- -------- --------
2003 2002 2003 2002
#'000 #'000 #'000 #'000
--------------------- -------- -------- -------- --------
United Kingdom 23,045 30,343 25,212 35,774
Mainland Europe 4,722 4,097 6,959 7,210
United States of America 8,099 10,062 8,693 11,815
--------------------- -------- -------- -------- --------
35,866 44,502 40,864 54,799
Goodwill 4,998 10,297 - -
--------------------- -------- -------- -------- --------
Capital employed 40,864 54,799 40,864 54,799
Net debt (10,279) (19,122)
Deferred acquisition - (250)
payments
Provisions for liabilities and - (231)
charges -------- -------- -------- --------
---------------------
Net assets 30,585 35,196
--------------------- -------- -------- -------- --------
3 Profits on disposal of businesses and exceptional items
-------------------------------- -------- --------
2003 2002
#'000 #'000
-------------------------------- -------- --------
Restructuring and reorganisation costs (i) (105) (340)
CT Outside Broadcast - impairment of tangible fixed (413) -
assets (ii)
Professional costs in respect of Complete - (249)
-------------------------------- -------- --------
Operating exceptional items (518) (589)
Profit on disposal of Fountain Television (iii) 1,061 -
Share of profit on disposal of The Edit Works - 286
Profit on disposal of System Technologies - 60
-------------------------------- -------- --------
Profits on disposals / non operating exceptional 1,061 346
items
-------------------------------- -------- --------
Total profits on disposals and exceptional items 543 (243)
-------------------------------- -------- --------
(i) Restructuring and reorganisation costs
The restructuring and reorganisation costs result from the headcount reductions
which have been made across the Group which cost in total #105,000 (2002:
#340,000). These costs are included within continuing operations.
(ii) Creative Technology Outside Broadcast - impairment of tangible fixed assets
Following a review of the operations of Creative Technology Outside Broadcast
Limited, its loss for the year and the sale of this business on 16 June 2003,
the Directors reviewed the tangible fixed assets for impairment. The assets have
consequently been written down to their estimated recoverable amount. In
accordance with FRS 3, the operations of the company have been classified as
discontinuing along with those stated in (iii) below.
(iii) Disposal of Fountain Television Limited
In August 2002 the Group disposed of Fountain Television Limited for #7.0
million before a net current asset adjustment of #0.1 million and before
expenses of #0.5 million. The #7.0 million comprised #5.5 million in cash and
#1.5 million of securities. The result of this operation, together with that of
System Technologies which was sold last year, have been classified as
discontinued operations.
4 Taxation
---------------------------------- -------- --------
2003 2002
#'000 #'000
---------------------------------- -------- --------
Group current taxation (54) (441)
Share of associates' current taxation 988 2,715
---------------------------------- -------- --------
Group and share of associates' current taxation 934 2,274
---------------------------------- -------- --------
Group deferred taxation (231) (600)
Share of associates' deferred taxation (79) (143)
---------------------------------- -------- --------
Group and share of associates' deferred taxation (310) (743)
---------------------------------- -------- --------
Group taxation (285) (1,041)
Share of associates' taxation 909 2,572
---------------------------------- -------- --------
Group and share of associates' taxation 624 1,531
---------------------------------- -------- --------
Recognised in the profit and loss account 624 1,531
Recognised in the statement of total recognised - -
gains and losses -------- --------
----------------------------------
Group and share of associates' taxation 624 1,531
---------------------------------- -------- --------
5 Earnings per share
Basic earnings per share have been calculated by dividing earnings (profit after
taxation and minority interests) by the weighted average number of ordinary
shares in issue during the year.
FRS 14 requires presentation of diluted EPS when a company could be called upon
to issue shares that would decrease net profit or increase net loss per share
from continuing operations. For a loss making company with outstanding share
options, net loss per share would only be increased by the exercise of
out-of-the-money options. Since it seems inappropriate to assume that the option
holders would act irrationally, no adjustment has been made to diluted EPS for
out-of-the-money share options, and there being no other diluting future share
issues, diluted EPS is the same as basic EPS.
Adjusted earnings per share have been calculated by dividing profit after
taxation and minority interests in respect of continuing operations and
excluding goodwill amortisation and non-operating exceptional items, by the
weighted average number of ordinary shares in issue during the year. A notional
tax rate of 30% is applied to the adjusted profit for each year. The Directors
consider that the adjusted earnings per share figures provide a useful
additional indication of performance.
Adjusted earnings
------------------------------------ ------- -------
2003 2002
#'000 #'000
------------------------------------ ------- -------
(Loss) / profit for the year (3,756) 14
Result of discontinued operations excluding goodwill 1,031 (990)
amortisation
Non-operating exceptional items (1,061) (346)
Goodwill amortisation 5,146 5,116
Notional tax rate adjustment at 30% 35 (67)
------------------------------------ ------- -------
Profit for the year on continuing operations
excluding non-operating exceptional items, goodwill
amortisation and at a notional tax rate of 30% 1,395 3,727
------------------------------------ ------- -------
Weighted average number of shares
-------------------------------- --------- --------
2003 2002
number number
'000 '000
-------------------------------- --------- --------
For basic and adjusted earnings per share 16,316 16,269
Effect of dilutive share options - 262
-------------------------------- --------- --------
For diluted earnings per share 16,316 16,531
-------------------------------- --------- --------
6 Analysis of net debt
----------------- -------- ---------
2003 2002
#'000 #'000
----------------- -------- ---------
Cash in hand and at bank 1,301 1,369
Bank overdrafts (1,707) (1,913)
----------------- -------- ---------
Cash (406) (544)
Bank loans (2,986) (9,395)
Hire purchase obligations (6,887) (9,183)
----------------- -------- ---------
Net debt (10,279) (19,122)
----------------- -------- ---------
7 Dividends
The final dividend of 3.0p per share will be paid on 1 October 2003 to
shareholders on the register at 12 September 2003.
8 Status of preliminary announcement
The preliminary announcement does not amount to full accounts within the meaning
of section 240 of the Companies Act 1985.
The contents of the preliminary announcement have been extracted from the
audited financial statements of the company for the year ended 31 March 2003
which will be filed with the Registrar of Companies. The audit report on these
financial statements is unqualified and does not contain a statement under
Section 237(2) or (3) of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEAFWDSDSEIM