RNS Number:3270K
Internet Business Group
24 April 2003
INTERNET BUSINESS GROUP PLC
("IBG" or the "Company")
Preliminary Results for the Year Ended 31 October 2002
Introduction
I am pleased to announce the results for the year ended 31 October 2002.
Results
Turnover increased 28.9% to #1,389,027 (2001: #1,077,824). The loss after tax
and minority interests was reduced by 81.2% to #546,584 (2001: loss #2,911,564).
The significant improvement in performance can be attributed to a combination of
focus on e-commerce operations and improved cost controls.
Business Review
E-Commerce
IBG's e-commerce businesses are continuing to grow. Sweatband.com Ltd remains
the largest element of this operation. The year to 31 October 2002 has been the
first full year since the acquisition of Sweatband Ltd.
The core strategy for Sweatband.com Ltd, the principal trading subsidiary of
Sweatband Ltd, has been to position itself to compete with specialist retailers
in key sports. This strategy is being implemented through the launch of
dedicated e-commerce sites for each of these sports. The first dedicated site -
SweatbandFitness.co.uk - was launched in Autumn 2002 and this has been more
recently followed by the launch of SweatbandTennis.co.uk in February 2003 and
SweatbandCricket.co.uk in March 2003. Each of these sites offers consumers a
very comprehensive range of products at competitive prices as well as special
offers, buying guides and other specialist supporting materials. IBG will be
looking to increase the number of Sweatband branded dedicated e-commerce
websites during the course of this year.
Sweatband.com Ltd has continued its partnership orientated marketing strategy.
For example, IBG recently reached an agreement with the International Tennis
Federation to design and build the official, worldwide, e-commerce website for
the Davis Cup. As part of this agreement, Sweatband.com Ltd is the retail
operation that handles all transactions generated by the site. The site can be
viewed at http://www.DavisCupStore.com.
IBG's other e-commerce operations have been performing satisfactorily. During
the year under review, IBG launched several new e-commerce websites, each
focusing on specific product areas. Of these, GadgetHub.co.uk is proving to be
the most promising and subsequently, IBG is now investing more resources in
scaling up this operation. The remaining operations will continue to operate as
they do generate incremental income for the group.
Professional Services
IBG's professional services operations have been performing satisfactorily. The
extensive changes implemented in 2001 have resulted in a more productive
operation that continues to receive repeat business from its existing clients as
well as winning new ones. In addition to generating income, these operations
provide a valuable pool of resource for the design, development and marketing of
IBG's own e-commerce operations. IBG's strategy is to invest an increasing
proportion of its available professional services resources into its own
e-commerce operations.
Web Hosting
IBG's web hosting operation has seen flat levels of trade during the course of
the year. In order to address this, IBG has recently opened a new facility at
Telehouse Europe, in London. The new facility is more cost-effective and
provides IBG with improved flexibility for expansion, if required. Clients are
currently in the process of being transferred from the existing data centre in
Wembley, which will be decommissioned once the transfer has been completed. The
new facility is providing IBG with significantly improved competitive position
within the hosting market.
Advertising Network
As reported in the interim results, IBG entered the 'pay for performance'
advertising market through the launch of AffiliateFuture.co.uk in March 2002.
Whilst the scale of this business is small in relation to IBG's other
operations, there has been strong growth in both the number of advertisers using
the service as well as the volume of transactions generated through the network.
Finances
As at 31 October 2002, the group had cash of #233,000. The group's cash position
as at 31 March 2003 was #192,000.
Outlook
I am very pleased with the progress that has been made in the year. I believe
that the company is well positioned to further increase its turnover and reduce
its losses over the twelve months to 31 October 2003.
Contact Details
Internet Business Group plc
Maziar Darvish, Chief Executive Officer 020 7380 8530
07974 919017
Consolidated profit and loss account
for the year ended 31 October 2002
Year ended Year ended Year ended Year ended
31 October 31 October 31 October 31 October
2002 2002 2001 2001
# # # #
Turnover 1,389,027 1,077,824
Cost of (1,145,283) (1,677,737)
sales
--------------- ---------------
Gross profit/ 243,744 (599,913)
(loss)
Distribution (38,699) (141,539)
costs
Administrative
expenses
(including
exceptional
impairment
costs of
#27,798 (2001:
#1,018,603 ))
(751,926) (2,223,792)
--------------- ---------------
(790,625) (2,365,331)
--------------- ---------------
Operating
loss
- continuing (519,083) (1,946,641)
operations
- exceptional (27,798) (1,018,603)
costs
--------------- ---------------
(546,881) (2,965,244)
Interest 10,015 49,609
receivable
Interest (369) (6,987)
payable
--------------- ---------------
Loss on (537,235) (2,922,622)
ordinary
activities
before
taxation
Taxation - -
--------------- ---------------
Loss on (537,235) (2,922,622)
ordinary
activities
after
taxation
Minority (9,349) 11,058
interests -
equity
--------------- ---------------
Loss for the (546,584) (2,911,564)
financial
year
=============== ===============
Basic loss per (0.87p) (5.52p)
share
Diluted loss (0.87p) (5.52p)
per share
Adjusted loss (0.82p) (3.59p)
per share
Consolidated balance sheet
as at 31 October 2002
Year ended 31 October 2002 Year ended 31 October 2001
# # # #
Fixed assets
Intangible 330,860 413,575
assets
Tangible 107,534 217,469
assets
Investments 22,235 23,783
--------------- --------------
460,629 654,827
Current assets
Stock 52,866 -
Debtors 344,455 392,518
Bank deposits 232,970 525,300
-------------- -------------
630,291 917,818
Creditors: (385,994) (330,484)
amounts falling
due within one
year
-------------- -------------
Net current 244,297 587,334
assets
--------------- --------------
Net assets 704,926 1,242,161
=============== ==============
Share capital
and reserves
Called up share 630,835 630,835
capital
Share premium 3,986,360 3,986,360
account
Other reserves 119,559 134,559
Profit and loss (4,031,828) (3,500,244)
account
--------------- --------------
Equity 704,926 1,251,510
shareholders'
funds
Minority - (9,349)
interests
--------------- --------------
704,926 1,242,161
=============== ==============
Consolidated cash flow statement
for the year ended 31 October 2002
Year ended Year ended
31 October 2002 31 October 2001
# #
Cash outflow from operating activities (300,981) (1,126,577)
Returns on investments and servicing of 9,646 87,383
finance
Capital expenditure and financial (995) (119,220)
investment
Acquisitions and disposals - 22,671
---------------- ----------------
Cash outflow before management of liquid
resources and financing
(292,330) (1,135,743)
Management of liquid resources - 1,167,907
---------------- ----------------
(Decrease)/increase in cash in the year (292,330) 32,164
================ ================
Reconciliation of net cash flow to movement in net funds
for the year ended 31 October 2002
31 October 31 October
2002 2001
# #
(Decrease)/increase in cash in the year (292,330) 32,164
Cash inflow from increase in liquid
Resources - (1,167,907)
---------------- ----------------
Movement in net funds in the year (292,330) (1,135,743)
Net funds at the start of the year 525,300 1,661,043
---------------- ----------------
Net funds at the end of the year 232,970 525,300
================ ================
INTERNET BUSINESS GROUP PLC
Notes
1. Nature of Financial Information
The accounts do not constitute accounts under section 240 of the Companies Act 1985. The results for the year ended 31
October 2002 are extracts from the group accounts, which carry an unqualified auditors report and will be filed with the
Registrar of Companies after the Annual General Meeting. The results for the period ended 31 October 2001 are extracts
from the group accounts, which carry an unqualified report and have been filed with the Registrar of Companies.
2. Basis of preparation
The financial statements have been prepared in accordance with applicable accounting standards and under the historical
cost accounting rules.
The financial statements have been prepared on the going concern basis which the directors believe to be appropriate.
Various cost reduction measures have been undertaken which reduce cash outflows in the future and ensure that an
adequate cash balance is maintained to cover the group's requirements for the foreseeable future.
All accounting policies are consistent with those applied in prior periods, with the exception of Deferred Tax, which
has been amended following the introduction of Financial Reporting Standard 19 "Deferred Tax". There was, however, no
effect on the financial statements as a result of this change in accounting policy.
3. Earnings per share
The calculation of basic earnings per share is based on a loss of #546,584 (2001:#2,911,564) and the weighted average
number of ordinary shares in issue during the year of 63,083,517 (2001:52,757,294).
The calculation of diluted earnings per share uses the same earnings figure and weighted average number of shares as
the basic calculation. This is because the exercise of share options would have the effect of reducing the loss per
ordinary share and is therefore not dilutive under the terms of FRS 14.
The calculation of the adjusted earnings per share uses the same weighted average number of shares as the basic
calculation, however, the earnings are adjusted to exclude the exceptional impairment costs. This reduced the loss by
#27,789 (2001:reduction of #1,018,603) and reduced the loss per share by 0.05p (2001:reduction 1.93p).
4. Exceptional costs
The exceptional costs relate to a #12,798 write down of the investment portfolio and a provision against the investment
in own shares of #15,000.
The prior year exceptional costs relate to a #354,581 write down of the investment portfolio, a #390,272 impairment of
the goodwill attributable to Mazware Limited due to poor trading results and market conditions, and a provision against
the investment in own shares of #273,750.
5. Report and Accounts
Copies of the Company's Annual Report and Accounts will be sent to shareholders in due course.
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END
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