TIDMAEO

RNS Number : 9379S

Aeorema Communications Plc

22 March 2021

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Regulation 11 of the Market Abuse Regulations (Amendment) (EU Exit) Regulations 2019/310 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Aeorema Communications plc / Index: AIM / Epic: AEO / Sector: Media

22 March 2021

Aeorema Communications plc ('Aeorema' or 'the Company' or 'the Group')

Interim Report

Aeorema Communications plc, the AIM-traded live events agency, announces its unaudited results for the six months ended 31 December 2020.

Overview

   --    Revenues of GBP1,677,311 (2019: GBP2,913,290) 
   --    Loss after taxation of GBP247,576 (2019: loss of GBP57,021) 
   --    Robust cash position of GBP1,342,548 (31 December 2019: GBP1,393,243) 
   --    Returned to profitability in the final three-months of the period 

Chairman's Statement

Our shareholders will be familiar with the proverb "necessity is the mother of invention" and this phrase became especially true for your Company as the hospitality and events industry experienced an immediate and full-blown shut down in the unprecedented times of the Covid-19 pandemic.

I am proud of our achievements during the period under review, having quickly re-invented ourselves at pace into an expert in virtual and hybrid conferencing following the collapse of the live events business as a result of Covid-19 last year. Equally, I am optimistic for the future as I believe we are well positioned to grow rapidly when live events return.

Faced with the extraordinary challenge of restructuring our business to service a new model focused on virtual events, our team adeptly stepped up to the plate. We developed new services, built our own virtual events platform, KIT, grew existing accounts, onboarded new clients, and impressively returned the Company to profitability in the final months of the period - an outstanding achievement following a period which necessitated substantial restructuring costs and saw a gradual take up of our new offerings. In addition to our traditional largely professional services client base, we are proud to have onboarded a technology giant, working across its four divisions, as well as working with a further five technology clients, all of whom trust our consultancy and technical expertise. These accounts continue to grow during this unprecedented period, and we anticipate further engagements going forward.

While we had expected revenues from live events of circa GBP3-5 million for July to December 2020, we replaced this lost income with GBP1,677,311 in revenue from virtual events. We also contained the loss after tax to GBP247,576 (2019: loss of GBP57,021) and ended the calendar year with GBP1,342,548 in cash (2019: GBP1,393,243) despite restructuring costs. The trend is positive. With several new blue-chip clients and a strong pipeline, we are confident that the next six months will be profitable. The Company's cash position remains strong and as at the date of this announcement is circa GBP1.1 million.

We announced the opening of an office in New York in September 2020. This was a strategic decision signifying a dedicated approach to supporting the growing needs and requests of our clients in the US, and internationally, as we saw an increase in potential business in the region. I am pleased to report this has been a beneficial investment for the Company and we are expecting to make a profit from this division in its first year. Our presence in the US has enabled us to grow our existing clients as well as win new US based clients.

Whilst Eventful, acquired in March 2020, was naturally severely impacted by Covid-19 related travel bans and venue closures, the team has maintained its relationships with existing clients and been introduced to many new clients working with Cheerful Twentyfirst. During this quiet period, the team has been developing its strategy for 2021/22 and is excited about both returning to sourcing venues for live events and building an exceptional incentives programme for corporates. Holly Mills has joined Eventful as Head of Incentives (formerly Head of Incentives at Penguins Events) and is developing the new Incentives offering for a market with pent up demand and sizeable budgets.

Looking ahead, we believe live events will return; a number of clients have commented that there is no substitute for personal contact. However, regardless of when this happens, we have proven that we can operate as a profitable business in the virtual and hybrid space too and are excited at the prospect of new opportunities for the Group. Furthermore, we are growing our fee based strategic communications solutions as part of our new consultancy approach, supported by production excellence and networking solutions that continue to challenge the norm.

I would like to thank our team and our shareholders for their ongoing support and look forward to the next six months with growing optimism.

M Hale

Chairman

19 March 2021

AEOREMA COMMUNICATIONS PLC

CONDENSED CONSOLIDATED INCOME STATEMENT

For the period ended 31 December 2020

 
                                                      Unaudited         Unaudited       Audited 
                                                       6 Months          6 Months       Year to 
                                                 to 31 December    to 31 December       30 June 
                                                           2020              2019          2020 
 
                                        Notes               GBP               GBP           GBP 
 Continuing Operations 
 
 Revenue                                              1,677,311         2,913,290     5,475,425 
 Cost of sales                                        (829,741)       (2,044,591)   (3,629,770) 
 
 Gross profit                                           847,570           868,699     1,845,655 
 
 Other income                                            49,616                 -        82,601 
 
 Administrative expenses                            (1,175,117)         (958,677)   (2,103,299) 
 
 Operating (loss) / profit 
  pre-exceptional items                               (277,931)          (89,978)     (175,043) 
 
 Exceptional items                                            -                 -      (23,184) 
 
 Operating (loss) / profit 
  post exceptional items                              (277,931)          (89,978)     (198,227) 
                                               ----------------  ----------------  ------------ 
 
 Finance income                                             539               328           556 
 
 Finance costs                                         (10,284)                 -      (20,253) 
 
 (Loss) / profit before taxation                      (287,676)          (89,650)     (217,924) 
 
 Taxation                                 4              40,100            32,629        20,497 
 
 (Loss) / profit for the period 
  from continuing operations                          (247,576)          (57,021)     (197,427) 
 
 Other comprehensive income 
 Items that may be reclassified 
  to profit or loss 
 
 Exchange differences on translation                    (7,479)                 -             - 
  of foreign entities 
 
 Other comprehensive income                             (7,479)                 -             - 
  for the period 
 
 
 Total comprehensive income 
  for the period                                      (255,055)          (57,021)     (197,427) 
                                               ================  ================  ============ 
 
 Basic and diluted earnings 
  per share from continuing 
  operations 
 
 Basic (pence)                            5          (2.67997)p        (0.63003)p    (2.16920)p 
 Diluted (pence)                          5                 N/A               N/A           N/A 
                                               ================  ================  ============ 
 

AEOREMA COMMUNICATIONS PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

For the period ended 31 December 2020

 
                                         Unaudited         Unaudited     Audited 
                                          6 Months          6 Months     Year to 
                                    to 31 December    to 31 December     30 June 
                                              2020              2019        2020 
 
                                               GBP               GBP         GBP 
 
 Non-current assets 
 Intangible assets                         572,682           365,154     573,931 
 Property, plant and equipment              76,832            98,070      85,952 
 Right-to-use assets                       333,983           425,070     379,530 
 Deferred taxation                          47,710            25,100       7,611 
                                         1,031,207           913,394   1,047,024 
 
 Current assets 
 Trade and other receivables             1,007,548         1,480,984     597,497 
 Cash and cash equivalents               1,342,548         1,393,243   1,721,217 
                                  ----------------  ----------------  ---------- 
                                         2,350,096         2,874,227   2,318,714 
 
 
 Total assets                            3,381,303         3,787,621   3,365,738 
 
 Current liabilities 
 Trade and other payables                1,298,948         1,472,303   1,186,670 
 Lease liabilities                          87,219            82,973      85,070 
 Bank loans                                 13,889                 -           - 
 Current tax payable                         3,711            74,616      68,490 
                                  ----------------  ----------------  ---------- 
                                         1,403,767         1,629,892   1,340,230 
 
 Non-current liabilities 
 Lease liabilities                         256,538           343,756     300,689 
 Bank loans                                236,112                 -           - 
 Provisions                                 25,020            25,020      25,020 
                                  ----------------  ----------------  ---------- 
                                           517,670           368,776     325,709 
 
 
 Total liabilities                       1,921,437         1,998,668   1,665,939 
 
 Net assets                              1,459,866         1,788,953   1,699,799 
                                  ================  ================  ========== 
 
 
 Equity attributable to equity 
  holder: 
 Share capital                           1,154,750         1,131,313   1,154,750 
 Share premium                               9,876             7,063       9,876 
 Merger reserve                             16,650            16,650      16,650 
 Other reserve                              96,480            56,358      81,358 
 Capital contribution reserve              257,812           257,812     257,812 
 Retained earnings                        (75,702)           319,757     179,353 
 
 Total equity                            1,459,866         1,788,953   1,699,799 
                                  ================  ================  ========== 
 

AEOREMA COMMUNICATIONS PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the period ended 31 December 2020

 
                         Share capital      Share     Merger      Other         Capital     Retained         Total 
                                          premium    reserve    reserve    contribution     earnings        equity 
                                                                                reserve 
                                   GBP        GBP        GBP        GBP             GBP          GBP           GBP 
 
 At 1 July 2019              1,131,313      7,063     16,650     34,261         257,812      467,283     1,914,382 
 Payment of dividends                -          -          -          -               -     (90,505)      (90,505) 
 Comprehensive 
  income for the 
  period                             -          -          -          -               -     (57,021)      (57,021) 
 Share-based 
  payments                           -          -          -     22,097               -            -        22,097 
 
   At 31 December 
   2019                      1,131,313      7,063     16,650     56,358         257,812      319,757     1,788,953 
 
 At 1 January 
  2020                       1,131,313      7,063     16,650     56,358         257,812      319,757     1,788,953 
 Comprehensive 
  income for the 
  period                             -          -          -          -               -    (140,404)     (140,404) 
 Share-based 
  payments                           -          -          -     25,000               -            -        25,000 
 Share issue                    23,437      2,813          -          -               -            -        26,250 
 
   At 30 June 2020           1,154,750      9,876     16,650     81,358         257,812      179,353     1,699,799 
 
 At 1 July 2020              1,154,750      9,876     16,650     81,358         257,812      179,353     1,699,799 
 Comprehensive 
  income for the 
  period                             -          -          -          -               -    (255,055)     (255,055) 
 Share-based 
  payments                           -          -          -     15,122               -            -        15,122 
 
   At 31 December 
   2020                      1,154,750      9,876     16,650     96,480         257,812     (75,702)     1,459,866 
 

AEOREMA COMMUNICATIONS PLC

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the period ended 31 December 2020

 
                                                    Unaudited         Unaudited       Audited 
                                                     6 Months          6 Months       Year to 
                                               to 31 December    to 31 December       30 June 
                                                         2020              2019          2020 
 
                                                          GBP               GBP           GBP 
 Cash flow from operating activities 
 (Loss) / profit before taxation                    (287,676)          (89,650)     (217,924) 
 Adjustments for: 
 Depreciation of property, plant 
  and equipment                                        18,209            14,064        31,871 
 Depreciation of right-of-use assets                   45,546            43,848        89,392 
 Amortisation of intangible fixed 
  assets                                                1,250                 -           417 
 Loss on disposal of fixed assets                         769             1,424         1,648 
 Share-based payment                                   15,122            22,097        47,097 
 Interest on lease liabilities                          8,996            10,222        20,253 
 Finance income                                         (539)             (327)         (556) 
 Exchange rate differences on translation             (7,479)                 -             - 
                                             ----------------  ----------------  ------------ 
 Operating cash flow before movement 
  in working capital                                (205,802)             1,678      (27,802) 
 Increase/(decrease) in trade and 
  other payables                                      112,278         (755,036)   (1,075,254) 
 (Increase)/decrease in trade and 
  other receivables                                 (410,049)           131,361     1,014,847 
 Cash (used in) / generated from 
  operating activities                              (503,573)         (621,997)      (88,209) 
 
 Taxation paid                                       (64,779)                 -      (10,797) 
 
 Cash flow from investing activities 
 Payment for Acquisition of Subsidiary, 
  net of cash acquired                                      -                 -     (128,331) 
 Finance income                                           539               327           556 
 Purchase of intangible assets                              -                 -      (10,000) 
 Purchase of property, plant and 
  equipment                                           (9,856)          (55,710)      (61,400) 
 Disposal of property, plant and                            -               224             - 
  equipment 
 Repayment of leasing liabilities                    (51,000)          (50,257)     (101,258) 
 Net cash used in investing activities               (60,317)         (105,416)     (300,433) 
 
 Cash flow from financing activities 
 Dividends paid                                             -          (90,505)      (90,505) 
  Bank loans                                          250,000                 -             - 
                                             ----------------  ----------------  ------------ 
 Net cash used in financing activities                250,000          (90,505)      (90,505) 
 
 Net increase / (decrease) in cash 
  and cash equivalents                              (378,669)         (817,918)     (489,944) 
                                             ----------------  ----------------  ------------ 
 
 Cash and cash equivalents at beginning 
  of period                                         1,721,217         2,211,161     2,211,161 
 
 Cash and cash equivalents at end 
  of period                                         1,342,548         1,393,243     1,721,217 
                                             ================  ================  ============ 
 
 

AEOREMA COMMUNICATIONS PLC

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For the period ended 31 December 2020

   1.    General information 

Aeorema Communications plc is a public limited company incorporated within the United Kingdom. The company is domiciled in the United Kingdom and its principal place of business is 23-31 Great Titchfield Street, London, W1W 7PA. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange.

These condensed consolidated interim financial statements for the period ending 31 December 2020 (including comparatives for the periods ended 31 December 2019 and 30 June 2020) were approved by the board of directors on 20 March 2021.

The financial information set out in this interim report does not constitute statutory accounts for the purposes of section 434 of the Companies Act (2006). The Group's statutory financial statements for the year ended 30 June 2020, prepared under International Financial Reporting Standards (IFRS), have been filed with the Registrar of Companies. The auditor's report for those financial statements was unqualified and did not contain a statement under section 498 (2) or section 498 (3) of the Companies Act (2006).

The interim financial statements have been prepared using the accounting policies set out in the Group's 2020 statutory accounts and have not been audited.

Copies of the annual statutory financial statements and the interim report can be found on our website at www.aeorema.com or can be requested from the Company Secretary at the Company's registered office: 64 New Cavendish Street, London, W1G 8TB.

   2.    Basis of preparation 

These condensed consolidated interim financial statements for the period ended 31 December 2020 have been prepared in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. The interim condensed consolidated financial statements should be read in conjunction with the annual financial statements for the year ended 30 June 2020, which have been prepared in accordance with IFRS as adopted by the European Union.

   3.    Revenue and segmental results 

The Company uses several factors in identifying and analysing reportable segments, including the basis of organisation such as differences in products and geographical areas. The Board of Directors, being the chief operating decision makers, has determined that for the period ended 31 December 2020 there is only one reportable operating segment.

   4.    Income tax charge 

Income period tax is accrued based on the estimated average annual effective income tax rate of 19 per cent. (2019: 19 per cent).

   5.    Earnings per share 

Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share are calculated by dividing the profit attributable to ordinary owners of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would have been issued on the conversion of all dilutive potential ordinary shares into ordinary shares.

The following reflects the income and share data used and dilutive earnings per share computations:

 
                                        Unaudited         Unaudited      Audited 
                                         6 Months          6 Months      Year to 
                                   to 31 December    to 31 December      30 June 
                                             2020              2019         2020 
 
 (Loss) / profit for the 
  year attributable to owners 
  of the Company                        (247,576)          (57,021)    (197,427) 
 
 Number of shares 
 
 Basic weighted average number 
  of shares                             9,238,000         9,050,500    9,101,356 
 
 Effect of dilutive share 
  options                               1,020,000         1,020,000    1,020,000 
 
 Diluted weighted average 
  number of shares                     10,258,000        10,070,500   10,121,356 
 
 
   6.    Dividends 

During the interim period no dividend (2019: 1 pence per share) was declared to holders of the Company's ordinary shares in respect of the full year ended 30 June 2020.

   7.    Related party transactions 

The Group has a related party relationship with its subsidiaries and its directors. Transactions between Group companies, which are related parties, have been eliminated on consolidation and are therefore not included in these consolidated interim financial statements.

 
                                            Unaudited         Unaudited 
                                             6 months          6 months 
                                       to 31 December    to 31 December 
                                                 2020              2019 
                                                  GBP               GBP 
 Subsidiaries 
 Amounts owed by/(to) subsidiaries            504,694         1,027,839 
                                     ----------------  ---------------- 
 Amounts owed by/(to) subsidiaries            504,694         1,027,839 
 

Harris & Trotter LLP is a firm in which S Haffner is a member. The following was charged to the Group in respect of professional services.

 
                                     Unaudited         Unaudited 
                                      6 Months          6 Months 
                                to 31 December    to 31 December 
                                          2020              2019 
 Harris & Trotter LLP                      GBP               GBP 
 Aeorema Communications plc              7,500             7,500 
 Aeorema Limited                        10,450            11,750 
                              ----------------  ---------------- 
                                        17,950            19,250 
 

Fees charged to Aeorema Communications plc include GBP7,500 (2019: GBP7,500) for the services of S Haffner as a non-executive director of that company.

The compensation of key management (including directors) of the Group is as follows:

 
                                       Unaudited         Unaudited 
                                        6 Months          6 Months 
                                  to 31 December    to 31 December 
                                            2020              2019 
                                             GBP               GBP 
 Short-term employee benefits            140,500           110,667 
 Post-employment benefits                  2,992             5,024 
                                         143,492           115,691 
 

During the period A Harvey received an interest-free loan of GBP10,000. At 31 December 2020, GBP10,000 (2019: GBP10,000) was outstanding.

During the period S Quah received an interest-free loan of GBP10,000. At 31 December 2020, GBP10,000 (2019: GBPNil) was outstanding.

ENDS

For further information visit www.aeorema.com or contact:

 
                             Aeorema Communications 
 Mike Hale                    plc                               +44 (0)20 7291 0444 
 John Depasquale / 
  Liz Kirchner (Corporate 
  Finance)                   Allenby Capital Limited 
  Kelly Gardiner (Sales       (Nominated Adviser 
  and Corporate Broking)      and Broker)                       +44 (0)20 3328 5656 
 Catherine Leftley/          St Brides Partners         info@stbridespartners.co.uk 
  Selina Lovell               Ltd 
                              (Financial PR) 
 

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