Interim Results
September 25 2003 - 2:02AM
UK Regulatory
RNS Number:1559Q
Maiden Group PLC
25 September 2003
25 September 2003
MAIDEN GROUP PLC
Interim Results for the half year ended 30 June 2003
Maiden Group plc, the outdoor advertising company announced today its interim
results for the half year ended 30 June 2003
* Group turnover up over 6% to a record #41.4m (2002: #39.0m) despite
challenging economic and advertising conditions and ahead of Board's
expectations
* Pre-tax profit before goodwill amortisation of #1.2m (2002: #1.4m)
reflecting continued margin pressure
* Pre-tax loss of #1.9m (2002: loss of #2.3m)
* EBITDA was #3.7m (2002: #5.0m)
* Interim dividend maintained at 2.0p reflecting the Board's confidence in
Maiden's position in an advertising recovery
* Capital expenditure of #2.7m, predominantly targeted at the organic
expansion of the Maiden estate
* Sales demand strengthening with 100% of last year's revenues already
booked so far in current year although yields remain under pressure
* Outdoor advertising continues to outperform display advertising market.
Maiden well positioned.
Commenting on the results, Maiden's Chief Executive Ron Zeghibe said:
"Despite challenging economic and advertising conditions, revenue growth has
been above our previous expectations. Sales visibility is improving and there
are early signs that demand is strengthening, but margin pressure has continued
and it is still too early to suggest a full recovery.
Although the advertising market will remain challenging during 2003, we remain
confident that Maiden's leading position within the UK outdoor industry will
ensure it benefits from recovery in the UK and worldwide economy."
Enquiries:
Ron Zeghibe, Chief Executive
Maiden Group plc 020 7838 4000
Tim Spratt/Michelle Morton
Financial Dynamics 020 7831 3113
A copy of the analyst presentation will be available on our website
www.maiden.co.uk from 10.00am on 25 September 2003.
High resolution photographs are available for the media to download at
www.vismedia.co.uk. Tel: 020 7436 9595
CHAIRMAN'S STATEMENT
Financial Results
In spite of challenging economic and advertising conditions, Group sales in the
first half of 2003 grew by over 6% to a new record of # 41.4 million (2002:
#39.0million), somewhat above our earlier expectations of 3-5%.
Pressure on margins continued, with pre-tax profits before goodwill amortisation
of #1.2 million (2002: #1.4 million). Loss before tax was #1.9 million (2002:
loss of #2.3 million).
Operating profits before amortisation were #2.2 million (2002: #2.4 million).
Operating loss for the period was #1.0 million (2002: loss of #1.4 million).
EBITDA for the Group was #3.7 million (2002: #5.0 million).
Adjusted earnings per share were 1.9p (2002: 2.2p). Loss per ordinary share was
4.9 p (2002: loss of 6.2 p).
Capital expenditure for the Group was #2.7 million (2002: #3.0 million), the
vast majority of which was targeted at the organic expansion of the Maiden
estate both in the UK and Ireland.
Net interest payable was steady at #1.0 million (2002: #1.0 million). Net debt
was #39.3 million (2002: #39.6 million) as at 30 June 2003. Net interest was
covered 2.2 times (2002: 2.4 times) by operating profits before the amortisation
of goodwill.
A maintained dividend of 2.0 pence per ordinary share - reflecting the Board's
confidence in Maiden's position in an advertising recovery - will be paid on 28
November 2003 to shareholders on the register as at 31 October 2003.
Estate Development
During the first half of 2003, the Maiden estate remained broadly the same as
last year at 32,186 panels.
In the Roadside sector a new marketing arrangement was entered into with Harlech
Ltd for 254 panels in the South West of England and an existing agreement with
Rochester Posters covering the key South East region was extended. The Group
continued to cull unprofitable sites. During the first half Maiden also won the
tender for the prestigious contract for the management of the billboard
advertising assets of Manchester City Council. The 10-year contract, which is
scheduled to commence in February, is expected to generate advertising revenues
of #20 million over its lifetime and will have a major impact on the Group's
estate in the North West from 2004. In Ireland a small portfolio of panels was
purchased from National Outdoor Displays in February 2003.
In the Point-of-Sale sector a significant number of quality, top-ranking malls
were signed up as a result of a group contract with Capital Shopping Centres and
the extension of the existing Lendlease agreement to include two new malls in
Glasgow and Solihull.
Since the end of the first half 2003, we have also secured agreement to market
panels at the Bull Ring in Birmingham and further contract wins are in the
pipeline which will secure Maiden's market leadership in this sector and
mitigate the final panel losses as a result of the loss of the Foxmark marketing
arrangement following its sale to Clear Channel in 2002. Today we have a
presence in 49 of the UK's 100 top shopping malls.
In the Transport sector the Group continued the roll-out of the highly
successful Transvision product into Liverpool Street and Charing Cross stations.
A new concession agreement was successfully negotiated and signed with First
Great Western Group, to secure the Maiden presence in this key sector.
Clients
The most significant development in the first half of 2003 was the long-expected
loss of tobacco advertising to the sector effective from February 2003.
However, as a result of the long term efforts by Maiden and the outdoor industry
as a whole to recruit new advertisers and sectors, the market was able to absorb
this loss and still grow at a rate faster than that of its display media rivals.
Categories that showed particular strength were retail and publishing/
broadcasting while financial services continued to underperform as a result of
economic uncertainty and international instability.
Market Conditions
Overall, outdoor advertising has continued to perform well with an estimated
growth of 11% in the first half of 2003.
However, this performance masks an underlying volatility between quarters with
the first quarter up 17% and the second quarter up 6%. It should also be noted
that there have been some adjustments to the industry figures to eliminate
historic under-reporting of smaller and non-members of the Outdoor Advertising
Association. This will also affect figures for the rest of 2003, to the apparent
detriment of the large established industry players. Figures will show greater
comparability next year.
The improvement in Outdoor compares with a growth in total display media
expenditure estimated at just 0.6% (source: AA) showing again the potential of
the sector to take market share from its rivals. Levels of capital spend are now
lower following high levels of investment in recent years.
Prospects
The future for Outdoor continues to be positive.
Forward visibility in sales has improved at the end of the third quarter. Sales
demand is strengthening and although it is too early to claim anything near a
full recovery, the depth of demand since the beginning of August has been
encouraging. As a consequence, and in spite of a difficult July, we expect third
quarter sales to be in line with the record levels achieved in the corresponding
period in 2002. As at the third week in September the Group has already booked
100% of last year's total revenue. However, as with recent years, the fourth
quarter remains key to the Group's full year performance.
Profit margins for the Group remain under pressure and the final outcome for
2003 is difficult to predict. The renewal dates of a number of significant
landlord rental agreements, coupled with the impact of a long running media
recession, have enabled management to implement a series of cost reduction
initiatives to strengthen future profit margins. The Board expects the full
benefits of the cost reduction exercise to be realised in 2004 with minimal
impact on the Group's revenue.
Maiden's targeted investment programme continues to both enhance the strategic
position of the Group and optimise growth as the advertising recovery
consolidates and begins to build some momentum. Although the advertising market
will remain challenging during 2003, the Board remains confident that Maiden's
leading position within the UK Outdoor industry will ensure it benefits from
recovery in the UK and the world economy.
Group Profit and Loss Account
For the period ended 30 June 2003
Six months ended Six months ended
Year ended
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited)
Note #000 #000 #000
Turnover 41367 39048 82088
Cost of sales -31030 -27934 -57178
Gross profit 10337 11114 24910
Administrative expenses
- Amortisation -3121 -3751 -7543
- Other -8885 -9165 -17918
-12006 -12916 -25461
Other operating income 711 449 1225
Operating (loss)/profit -958 -1353 674
Net interest payable -966 -982 -1803
Loss on ordinary activities
before taxation -1924 -2335 -1129
Tax on profit on ordinary
activities -333 -438 -2150
Loss on ordinary
activities after taxation -2257 -2773 -3279
Dividends -926 -922 -2773
Loss for the period
retained for equity
shareholders -3183 -3695 -6052
Basic loss per 5p ordinary
share 2 -4.9 p -6.2 p -7.2 p
Diluted loss per 5p
ordinary share 2 -4.9 p -6.2 p -7.2 P
Adjusted earnings per 5p
ordinary share 2 1.9 p 2.2 p 9.4 P
Adjusted diluted earnings
per 5p
ordinary share 2 1.9 p 2.2 p 9.3 p
All results relate to the continuing operations of the Group.
Statement of Total Recognised Gains and Losses
For the period ended 30 June 2003
Six months Six months
ended ended Year ended
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited)
#000 #000 #000
Loss for the period -3183 -3695 -6052
Total recognised gains and losses
relating to the period -3183 -3695 -6052
Exchange difference
on goodwill 400
Total gains and losses recognised
since last annual report -2783
Group Balance sheet
As at 30 June 2003
30 June 30 June 31 December
2003 2002 2002
(unaudited) (unaudited)
Note #000 #000 #000
Fixed assets
Intangible assets - goodwill 19533 25831 22349
Tangible assets 17101 13875 16142
Investments 2 2 2
36636 39708 38493
Current assets
Debtors 26238 25549 23216
Cash at bank and in hand 248 362 1623
26486 25911 24839
Creditors: Amounts due within one year 3 -59939 -30556 -22601
Net current liabilities -33453 -4645 2238
Total assets less current liabilities 3183 35063 40731
Creditors: Amounts due after more than
one year 3 -23 -27500 -35043
Provisions for liabilities and charges -176 - -
Net assets 2984 7563 5688
Capital and reserves
Called up share capital 2315 2304 2314
Share premium account 35011 34958 34950
Merger reserve 8291 7754 8291
Shares to be issued 17 57 -
Profit and loss account 1 -42650 -37510 -39867
Equity shareholders' funds 2984 7563 5688
Group Cash Flow Statement
For the period ended 30 June 2003
Six months Six months ended
ended
Year ended
30 June 2003 30 June 2002 31 December 2002
(unaudited) (unaudited)
#000 #000 #000
Net cash inflow from operating activities 1678 3598 15711
Returns on investments and servicing of
finance -1098 -1077 -1834
Taxation -946 -848 -2029
Capital expenditure and financial
investment -2568 -2212 -6590
Acquisitions and disposals - -263 -51
Equity dividends paid -1852 -1767 -2689
Cash outflow before management of liquid
resources and financing -4786 -2569 2518
Financing 2023 699 1193
Increase/(decrease) in cash in the period -2763 -1870 3711
Reconciliation of operating profit/(loss)
to operating cash flows
Operating profit/(loss) -958 -1353 674
Depreciation charge 1494 2588 4575
(Profit)/loss on sale of tangible fixed
assets 188 104 232
Exchange movements -52 -22 -33
Amortisation of goodwill 3121 3751 7543
(Increase)/decrease in debtors -3134 -1015 610
Increase/(decrease) in creditors 1019 -337 2228
Provision utilised - -118 -118
Net cash inflow from operating activities 1678 3598 15711
Reconciliation of net cash flow to movement
in net debt
Increase/(decrease) in cash in the period -2763 -1870 3711
Cash (inflow)/outflow due to (increase)/
decrease in debt and lease financing -1961 5956 5454
Change in net debt resulting from cash
flows -4724 4086 9165
Loans and finance leases acquired with
subsidiary and undertaking - - -
Movement in net debt in the period -4724 4086 9165
Net debt at the start of the period -34565 -43730 -43730
Net debt at the end of the period -39289 -39644 -34565
Notes
1 The financial information for the periods ended 30 June 2003 and 30 June 2002 is unaudited and does not
constitute full accounts within the meaning of Section 240 of the Companies Act 1985. The interim
financial information has been prepared on the basis of the accounting policies set out in the 2002
statutory accounts.
The financial information for year ended 31 December 2002 has been extracted from the 2002 statutory
accounts which have been delivered to the Registrar of Companies. The full accounts for that period
have been given an unqualified audit report, which did not contain a statement under Section 237 (2) or
(3) of the Companies Act 1985.
2 The calculation of the basic profit per share for the six months ended 30 June 2003 is based on loss on
ordinary activities after taxation and minority interests of #2,257,000 (six months ended 30 June 2002:
loss of #2,773,000) and the weighted average number or ordinary shares in issue during the six months of
46,288,187 (six months ended 30 June 2002: 44,908,134). The calculation of the basic earnings per share
for the year ended 31 December 2002 is based on loss on ordinary activities after taxation and minority
interests of #3,279,000 and the weighted average number of ordinary shares in issue during the year of
45,509,809. In order to provide a trend measure of underlying performance, group profit on ordinary
activities after taxation and minority interests has been adjusted to exclude amortisation of goodwill
and earnings per share recalculated as detailed below:
30 June 2003 30 June 2002 31 December 2002
pence per pence per pence per
share
#000 share #000 share #000
Basic earnings (2,257) (4.9) (2,773) (6.2) (3,279) (7.2)
Amortisation of
goodwill 3,121 6.8 3,751 8.4 7,543 16.6
Adjusted earnings 864 1.9 978 2.2 4,264 9.4
The dilutive effect of the weighted average number of potential ordinary shares in respect of options in
issue during the six months of 40,335 (six months ended 30 June 2002: 293,908) has been calculated in
accordance with FRS14.
3 The Companies Act and FRS4 require inclusion of the bank loan at 30 June 2003 in creditors due in less than one
year due to a breach of the banking agreement. A letter was requested and received from the banking syndicate on
29 July 2003 which confirmed that they had waived their technical right to request repayment on demand. Had this
waiver been received before 30 June 2003 #32.5 million of the bank facility would have been presented as due in
greater than one year leading to net current liabilities of #1.0 million rather than the net current liabilities
of #33.5 million shown in the balance sheet.
Creditors : Amounts falling due within one year
30 June 2003 30 June 2002 31 December 2002
#000 #000 #000
Bank overdraft 1970 4901 582
Other loans
Bank loan 37500 - -
Loan stock - 7460 505
Obligations under finance leases and hire purchase
contracts 44 145 58
Trade creditors 8483 5152 7017
Other creditors including taxation and social security
Corporation tax
Other taxes and social security 434 1272 1336
Other creditors 1522 1849 1145
575 1064 546
Accruals and deferred income 8485 7791 9561
Dividend proposed 926 922 1851
59939 30556 22601
Creditors : Amounts falling due after more than one year
30 June 2003 30 June 2002 31 December 2002
#000 #000 #000
Other loans
Bank loan - 27500 35000
Obligations under finance leases and hire purchase contracts 23 - 43
23 27500 35043
The other loans are secured by guarantees from the Company and certain of its subsidiaries.
The bank loan currently bears interest at LIBOR plus a margin of 2.25%.
The maturity of other loans is as follows :
30 June 2003 30 June 2002 31 December 2002
#000 #000 #000
Within one year 37500 - 505
Between one and two years - - 7500
Between two and five years - 27500 27500
37500 27500 35505
Term loans payable by instalments :
30 June 2003 30 June 2002 31 December 2002
#000 #000 #000
Amounts falling due within one year 37500 - -
Payable between one and two years - - 7500
Payable between two and five years - 27500 27500
37500 27500 35000
4 Copies of this interim report will be available at the company's registered office at 128 Buckingham Palace Road,
London SW1W 9SA.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR USRKROSRKUAR