TIDMMSQ
RNS Number : 6139M
Media Square PLC
27 May 2010
Media Square plc
Preliminary results for the 12 months ended 28 February 2010
Media Square plc (AIM: MSQ), the international marketing communications group,
today reports its preliminary unaudited results for the 12 month period ended 28
February 2010.
Key financial
· Revenue of GBP47.3 million (2009 restated: GBP61.2 million) representing
a 23% reduction on a like for like basis.
· Headline EBITDA of GBP0.1 million (2009 restated: GBP3.7 million).
· Headline operating loss of GBP0.9 million (2009 restated: profit of
GBP2.3 million).
· Reported operating loss after exceptional items of GBP19.1 million (2009
restated: profit of GBP4.5 million) which includes a GBP15.9 million non-cash
write-down of goodwill.
· Underlying net debt of GBP19.9 million (2009: GBP13.4 million).
· H2 profitable with a headline operating profit of GBP0.4 million.
Key operational
· Structural turnaround complete
· Stable operating platform
· Lloyd Northover Marlow sold
· CST acquired
· New CEO appointed
· 2 new Directors
· Central costs cut
· Agency overheads cut
Roger Parry, Chairman of Media Square plc comments:
"The structural turnaround of Media Square has now been completed. The company
is now smaller, simpler and stable. The results reflect the challenges of
restructuring an already weak business against the backdrop of the credit
crunch. Although it is early days, the months of March and April have produced
extremely encouraging trading results."
- ends -
Enquiries to:
+-------------------------------+-------------------------------+
| Media Square plc | www.mediasquare.co.uk |
+-------------------------------+-------------------------------+
| Roger Parry/Bruce Winfield | 020 3026 6600 |
+-------------------------------+-------------------------------+
| Collins Stewart Europe Ltd | |
+-------------------------------+-------------------------------+
| Adrian Hadden/Stewart Wallace | 020 7523 8350 |
+-------------------------------+-------------------------------+
CHAIRMAN'S STATEMENT
Dear Fellow Shareholder,
It gives me great pleasure and, indeed, a considerable sense of relief to report
to you that the structural turnaround of Media Square has now been completed.
Your company is now smaller, simpler and stable; it operates eleven agencies,
each of which has a clear professional service proposition. The Group is now
trading profitably. Back in 2007, following numerous acquisitions, the Group
had more than forty individual operating units, many of which were loss making
and others which were too small and fragile to be long term, viable operations.
The high level of debt, poor operating margins, high central costs and
management complexity at the time necessitated radical action and we started the
three year turnaround plan.
Results
The twelve month period reported on (March 2009 to February 2010) reflects the
challenges of completing the final stage of the turnaround of an already weak
business against the backdrop of the credit crunch. Revenues dropped by 23%
which is mostly a reflection of the general reduction in marketing budgets
brought about by the recession, partly underperformance by a number of our
agencies which resigned unprofitable accounts and partly the disposal of
non-core agencies. Operating expenses were reduced by more than GBP10 million
in the year and further cost reductions will be coming into effect in the coming
months. Overall the headline operating loss for the twelve months was GBP0.9
million. It should be noted that for the first six months of the year we
reported a loss of GBP1.3 million and that the second half showed a
significantly improved performance with profit in the six month period of GBP0.4
million. This positive trend reflects the early benefits of the turnaround and
it has continued in the current trading period. The significant exceptional
item of GBP17.7 million reflects the write-down of goodwill of GBP15.9 million
as well as redundancy and restructuring costs.
Dividend
Given the current high level of debt and low Group operating margin, the Board
do not recommend the payment of a dividend at this time. However, this policy
will be kept under review. The Board has no current plans to make any
significant acquisitions, nor to operate a share buy-back programme. Cash flow
will be used to reduce debt or to finance small, "tuck-in" purchases which
strengthen existing agencies.
Structural turnaround is complete
The key objective of the turnaround, which started in September 2007, was to
reduce the complexity of the Media Square Group and eliminate loss-making
agencies to prepare the ground to improve operating margins and reduce debt.
The strategy was to focus in on a small number of agencies which had strong
creative credentials and good prospects. The turnaround was originally planned
as a three year project and in practice it has been completed in 32 months. It
proved to be particularly challenging as it was done against the background of
the collapse of Northern Rock in September 2007 and then, far more
significantly, the collapse of Lehman Brothers in September 2008 which had a
very negative effect on marketing spending for the whole of 2009. For a Group
like Media Square which was particularly exposed to the financial services,
automotive and retail sectors, the 2009 recession has proved to be very
problematic. An emergency restructuring had to occur on top of the already
planned turnaround.
To achieve the strategic objective of simplification some agencies were sold,
others were closed and others were merged. The Divisional structure was
abolished, financial control and reporting systems were improved and central
costs have been cut from some GBP5 million a year in 2007 to GBP2 million a year
now. Group headcount has reduced from more than 1,500 to 730 over the three
year period.
The Company's current bank facilities were put in place in October 2005 by Bank
of Scotland which has now become part of Lloyds Banking Group. These
facilities, which were designed to fund a major acquisition, expire in April
2011. Discussions are now at an advanced stage with Lloyds Banking Group to put
in place new facilities which will be more appropriate to the Group's current
needs.
Board changes
To reflect the completion of the turnaround a number of changes have been made
to the Board. During the past year Graeme Burns stood down as Finance Director
and was replaced by Bruce Winfield. Nigel Bacon stood down as a Non Executive
Director and was replaced by Neil Canetty-Clarke. As planned I completed my
term in an executive position and was replaced by Mr Peter Reid as Chief
Executive.
On 19 May, we announced the appointment of Mr Tim Lindsay as a Non Executive
Director. Mr Lindsay was previously the President of TBWA UK & Ireland, the
Chairman of Publicis UK and the CEO of Lowe Howard Spink. He has a long and
distinguished record in the marketing communications industry and will be a
great asset to the Media Square Board.
Prospects
Although it is early days, the months of March and April have produced
encouraging trading results. The focus on the eleven core agencies is proving
to be successful and the significant reduction in the cost base is reflected in
greatly improved profitability. For the two months of March and April the
management accounts (unaudited) show cumulative operating profits in excess of
budget, compared to the same two months last year where the Group lost more than
GBP600,000.
During the turnaround and recession the Media Square agencies have had some
success with new business wins but the Board believes that this is now our major
opportunity going forward as, with robust operations and management clarity, we
should be able to significantly improve our new business record.
Shareholders in Media Square have had a lot to put up with in recent years but
it is to be hoped that their patience will now be rewarded. Margins are still
too low and the debt burden remains too high, but we have every prospect of
improving both of these over the next few years.
Roger Parry
Chairman
27 May 2010
BUSINESS REVIEW
Chief Executive Officer's Review
In line with most other marketing communications businesses, 2009 was an
exceptionally challenging year for Media Square, with widespread reductions in
advertising and marketing budgets. Moreover, the timing of the recession was
particularly difficult given that the Group was midway through an extensive
turnaround programme and thus began the period with a relatively low operating
profit margin, weak systems and a number of small non-viable loss-making
agencies.
Faced with these conditions, the key focus of the Group through the year was to
implement a wide range of cost reduction programmes, both at Group level and in
the majority of agencies, in order to match operating costs with reduced
revenues.
The structural turnaround is now complete and the Group now has a much more
focused portfolio with agencies across the five disciplines of Advertising, PR,
Marketing, Research and Design. With the lower overall cost base we are now
well placed to benefit from an ongoing recovery in the marketing communications
sector.
Going forward the long-term strategy of the Group remains unchanged, with a
focus on building a small number of marketing communications agencies each of
which will have scale, in terms of number of staff, and breadth, in terms of a
range of clients. This will be achieved by organic growth, carefully targeted
tuck-in acquisitions and possibly further consolidation of business units. This
will position them to build stronger overall economics and return to growth, as
well as making them more resilient in the face of client losses or any future
economic downturns.
Segmental summary
Media Square consists of 11 agencies which have historically been reported in
three segments. The breakdown of the revenue and headline operating profit by
segment is shown below:
+--------------+---------+---------------+------+---------+---------------+
| | Year ended | | Year ended |
| | 28 February | | 28 February |
| | 2010 | | 2009 |
+--------------+-------------------------+------+-------------------------+
| | Revenue | Headline | | Revenue | Headline |
| | | operating | | | operating |
| | | profit/(loss) | | | profit/(loss) |
+--------------+---------+---------------+------+---------+---------------+
| | GBPm | GBPm | | GBPm | GBPm |
+--------------+---------+---------------+------+---------+---------------+
| Advertising* | 25.8 | 0.9 | | 31.7 | 2.9 |
+--------------+---------+---------------+------+---------+---------------+
| Marketing | 10.3 | 0.3 | | 12.3 | 0.5 |
+--------------+---------+---------------+------+---------+---------------+
| Design | 11.3 | 0.5 | | 17.8 | 2.2 |
+--------------+---------+---------------+------+---------+---------------+
| Central | - | (2.6) | | - | (3.3) |
+--------------+---------+---------------+------+---------+---------------+
| Other | (0.1) | - | | (0.6) | - |
+--------------+---------+---------------+------+---------+---------------+
| Total | 47.3 | (0.9) | | 61.2 | 2.3 |
+--------------+---------+---------------+------+---------+---------------+
*Advertising includes Market Research and Public Relations.
The majority of the Group's agencies suffered significant revenue reductions
over the course of the year. Those with more exposure to the financial
services, retail and automotive sectors, suffered the largest reductions; while
agencies in the research, digital and direct marketing areas, generally
performed more strongly.
The Design segment was particularly hard hit with the largest overall decline in
revenue of 35% which reflects both the significant cuts in design work generally
and also the completion of the major CBS London Underground contract at arken,
our point-of-purchase agency, which had produced extremely high revenues in the
2008 and 2009 financial years.
Geographical summary
Approximately 75% of the Group's revenue was derived from its UK businesses.
Now the structural turnaround has been completed, the majority of the Group's
activity is focused in the UK. The bulk of our revenues in Asia and the USA are
represented by the activities of our advertising agency The Gate and our
research business Illuminas. Lloyd Northover operates relatively small
businesses in Hong Kong and Singapore.
During the past year most of the non-UK revenues have been represented by local
clients in Asia and America but going forward there will be greater emphasis on
serving clients on a multinational basis.
As can be seen from the figures in the chart, non-UK revenues held up much
better than those in the UK market. This is partly a reflection of the mix of
clients and partly a benefit of currency movements.
+------------------+---------+---------+
| Year ended | 2010 | 2009 |
| February | | |
+------------------+---------+---------+
| | Revenue | Revenue |
+------------------+---------+---------+
| | GBPm | GBPm |
+------------------+---------+---------+
| United Kingdom | 35.2 | 49.2 |
+------------------+---------+---------+
| Rest of Europe & | 12.2 | 12.4 |
| World | | |
+------------------+---------+---------+
| Eliminations | (0.1) | (0.4) |
+------------------+---------+---------+
| Total | 47.3 | 61.2 |
+------------------+---------+---------+
Period Summary: "A game of two halves"
The main focus of the past year has been to reduce costs urgently during a time
when revenues were falling fast. The benefits of the cost reduction only
started to be felt in the second half of the year. As can be seen from the
table below, operating performance in the second six months was significantly
better than in the first half of the year.
+-------------+---------+-----------+-----------+
| FY 2010 | Revenue | Overheads | Headline |
| | | | Operating |
| | GBPm | GBPm | Profit/ |
| | | | (Loss) |
| | | | GBPm |
+-------------+---------+-----------+-----------+
| First Half | 23.4 | (24.7) | (1.3) |
+-------------+---------+-----------+-----------+
| Second Half | 23.9 | (23.5) | 0.4 |
| | | | |
+-------------+---------+-----------+-----------+
| Variance | +0.5 | +1.2 | +1.7 |
+-------------+---------+-----------+-----------+
The trend seen in the second half has continued into the current trading period.
Cost Reduction
Faced with the broad-based reduction in client spending, the Group's wide
ranging cost reduction programme has had three major elements:
· Rationalisation of the Group's property portfolio with a reduction of
total space occupied by approximately 42,000sq ft resulting in annual property
cost savings of approximately GBP1.2m.
· Significant streamlining of Corporate and Head Office functions including
abolition of divisional structure and closure of the head office function based
in Bollington. Resulting savings for FY 2010 exceeded expectations outlined in
last years Annual Report. FY 2011 central costs are now budgeted at GBP2.1m and
at GBP1.9m for FY 2012 (original forecasts GBP2.5m and GBP2.1m).
· Further headcount and overhead reductions in individual agencies during
the year. In total this resulted in annualised savings of approximately GBP8m
in the eleven agencies.
Many of these cost savings were implemented in the first half of the financial
year, with the full benefit of the programme only beginning to be realised over
the second half. Moving into the current financial year, the Group now has a
radically lower overall cost base and stands to benefit disproportionately from
a continuing recovery in marketing budgets.
Remuneration
Further progress was made over the course of the year in reforming remuneration
structures across the Group. Steps were made to harmonise cash incentive
structures and a significant grant of restricted share units has been made to
senior agency managers. In total 3 million 10p ordinary shares were issued and
placed into the Employee Benefit Trust to cover potential awards, all of which
have challenging performance conditions attached to them.
We face an increasingly competitive market for talent and rewarding people
through performance linked share schemes helps with recruitment, retention and
motivation. This award of restricted share units reflects the Board's broader
belief that it is critical to the future success of the Group that senior
managers have a meaningful stake in the Group and share in the value that they
help create.
Strategy
Now that the structural turnaround is complete, the key focus of the Group is on
delivering operational improvements in order to return individual agencies and
the Group to operating margins in line with long-term industry average levels.
Achieving this goal requires that agencies in the Group focus on both winning
additional clients and increasing spend from existing clients, as well as
ensuring that they are delivering their services as efficiently as possible. A
number of the Group's agencies remain sub-scale, especially following headcount
reductions forced by the recession. This issue needs to be addressed by new
business success, growing existing clients and carefully targeted tuck-in
acquisitions.
The acquisition of Chick Smith Trott (CST) in January 2010 is one such
investment. The addition of the agency significantly strengthens the Group's
overall advertising proposition and helps the economics of The Gate with whom
CST share property and other facilities. It also provides a platform to grow in
the consumer advertising arena.
A second element of the Group's strategy is a further reduction in the overall
debt burden over the medium term. With the improving outlook for the Group, it
is envisaged that this will be achieved primarily from the generation of cash
flow from operations, but we may explore issuing new equity.
As was announced earlier in the year, the Group had been in discussions to sell
two business units. The Group currently remains in discussions to complete the
sale of twentysix New York and will provide a further update once the outcome of
these discussions is known. However, given the weak economic environment, the
Board has decided that it was not in shareholder's best interests to proceed
with the second disposal at this time.
New Business / Client Spending
The key issue faced by the Group during the year was not the loss of individual
clients, but significant reductions in many client budgets.
Indeed, new business performance remained reasonably strong, with annualised
revenue from new business projects and assignments totalling GBP19m. Major new
client assignments awarded during the year included: Avon, Citroën, EDF Energy,
Gatwick Airport, General Mills, Henderson Global Investors, House of Fraser,
Kellogg's, Lego and Nestlé.
However, this solid new business performance was more than offset by cuts in
client spending, especially in the financial services and automotive sectors,
and this is reflected in the overall reduction in revenue.
Looking forward the opportunity for the Group is to continue to improve its new
business record whilst benefiting from a recovery in client marketing budgets
over the current financial year and beyond.
Current Trading and Outlook
Following the cost reduction programme put in place in the first half of the
year to February 2010 the Group benefited from a stronger performance in the
second half of the year. This momentum has been built on in the early part of
the new financial year with both March and April delivering operating profit
materially ahead of budget.
This improvement has been shared across the Group's agencies with all of them
being profitable in these months. As a result the Group remains, in line with
many other companies in the sector, cautiously optimistic about the prospects
for the year ahead, albeit that visibility remains relatively limited.
If the current momentum is maintained the Group would expect to see a return to
revenue growth, although margins will likely remain below their full potential
and below average industry levels until all agencies have achieved the right
scale.
Peter Reid
Chief Executive Officer
27 May 2010
Chief Financial Officer's Statement
Financial Review
For the twelve month period under review, revenue totalled GBP47.3 million (2009
restated: GBP61.2 million). Headline earnings before interest, taxation,
amortisation and depreciation (EBITDA) were GBP0.1 million (2009 restated:
GBP3.7 million). The headline operating loss was GBP0.9 million (2009 restated:
profit of GBP2.3million).
Basis of headline and restatement of 2009 results
The 2010 Income Statement excludes the results of the Group's design and
branding operations in Marlow and in Dubai which became discontinued operations
over the course of the year.
Additionally, in establishing the basis for headline EBITDA and headline
operating profit, the following items have been excluded: exceptional costs of
GBP17.7 million (2009 restated: GBP2.8 million of exceptional income) and costs
of share-based remuneration of GBP0.5 million (2009: GBP0.6 million). Included
within the exceptional costs was a non-cash item of GBP15.9 million related to
impairment of goodwill carrying values.
Net Debt and Debt Facilities
Underlying net debt was GBP19.9 million (2009: GBP13.4 million) as at the period
end, excluding GBP6 million (2009: GBP4.3 million) of restricted cash which is
included in the reported net debt of GBP13.9 million (2009: GBP9.1 million).
This cash represents advance receipts from clients that may have only short term
benefit and in the Board's opinion underlying net debt is a more representative
figure of the position at the year end.
This figure represents an increase in underlying net debt of GBP6.5m over the
course of the year. This increase reflects not only the operating loss for the
year and the Group's financing costs, but also the significant exceptional
restructuring costs that were required in the face of the recession.
The Group's net debt balance represents gross debt of GBP22.5m (2009: GBP20.1m)
less cash of GBP8.6m (2009: GBP11m) held by the Group, GBP6m (2009: GBP4.3m) of
this cash represents advanced receipts from clients. In addition, the Group has
a freehold property asset which was valued at GBP3.25 million in early 2010.
The Company's current bank facilities were put in place in October 2005 by Bank
of Scotland which has now become part of Lloyds Banking Group. These
facilities, which were designed to fund a major acquisition, expire in May 2011.
Discussions are now at an advanced stage with Lloyds Banking Group to put in
place new facilities which will be more appropriate to the Group's current
needs. As part of these discussions the interest rate swaps that were put in
place in 2005 are also being reviewed.
Balance sheet and cash flow
Balance sheet movements during the periods reflect the trading in the Group
together with the disposal of certain assets and the effect of the significant
goodwill impairment during the year.
On an annual basis the Board reviews the carrying value of the Group's goodwill.
Following the impact of the recession on the Group's trading the Board felt
that certain businesses within the Group could no longer justify their goodwill
carrying value resulting in GBP15.9m of goodwill being written off.
This goodwill write-off was the primary reason for the reduction in assets in
the period to GBP60.4 million (2009: GBP81.8 million). Liabilities increased
slightly to GBP56.4 million (2009: GBP53.5 million), primarily reflecting the
increased net debt, leaving positive net assets of GBP4.0 million.
Capital expenditure was again minimised and kept to approximately 70% of
depreciation. Looking forward, capital expenditure is expected to remain below
the annual depreciation charge for the foreseeable future.
Working capital management remains strong with no material movement in the
Group's debtor or creditor days.
Disposals / Discontinued Operations
Over the course of the year the Group conducted a significant restructure of its
design and branding business, Lloyd Northover, which resulted in both the Marlow
and Dubai offices of the business becoming discontinued businesses. The Marlow
office was subsequently sold to existing management. The loss from discontinued
operations for the year of GBP3.1 million (2009: GBP2.2 million) reflects a
goodwill write-off of GBP0.9 million as well as the loss on disposal from the
sale of the Marlow office and trading losses relating to these discontinued
businesses.
Financial Risk Management
The Group continues to hold two interest rate hedges that were put in place in
2005 by way of interest rate swaps and which have a termination date of April
2011. Although for the majority of their lives the swaps helped keep Group
interest costs well below those payable if interest had not been hedged, for the
past two years it has resulted in materially higher interest costs than would
otherwise have been the case. These swaps are being reviewed as part of the
discussions on the new bank facilities with Lloyds Bank Group.
The Group has some currency risk with 25% of its revenues being generated
outside of the UK. The Group does not currently enter any currency hedging
arrangements.
Key Performance Indicators (KPIs)
The Group monitors individual business unit's performance using a number of key
performance indicators the most significant of which are:
· Revenue per Head which is a function of the value created by our staff and
the fees charged for work. Our target range is from GBP80,000 to GBP100,000 per
head per annum depending on the type of services provided and the location of
the agency.
· Operating Profit Margin which measures overall business efficiency where
the agency target is 15% of gross revenue.
In the year under review, given the impact of cuts in marketing spending, the
majority of agencies in the Group did not meet these target KPIs. As a result
of the cost cutting efforts, the Group was able to maintain revenue per head at
GBP67,000, but a number of agencies suffered reductions in their operating
margins, which translated into a corresponding reduction in the Group's overall
operating margin.
Taxation
The total tax charge for the year was GBP0.6 million (2009: credit of GBP0.3
million). Ordinarily a tax credit would be expected but due to the non-cash
goodwill impairment (which is a non-tax deductible expense) and the Group's
prudent approach to deferred tax recognition a small tax charge resulted.
During the year the Group paid taxes of GBP43,000 (2009: GBP10,000).
In future years, the Group expects to have limited tax liabilities since it
holds significant deferred tax assets. At the end of the financial year, it
held on its books a deferred tax asset of GBP1.5m (2009: GBP2.0m). However, in
addition to this figure, it has unrecognised deferred tax assets of GBP3.3m.
Employee Benefit Trust
On 18 November 2009, the Group created an Employee Benefit Trust to act as a
vehicle for managing employee incentive schemes. On 20 November 2009 the Group
placed 3 million ordinary shares into the trust to meet its liabilities with
regard to a new set of restricted share awards to senior executives. In
addition, the Group transferred 931,900 shares previously held in Treasury into
the Trust. At the same time, Directors and senior managers in the Group agreed
to cancel 2.9 million existing warrants and share options.
Bruce Winfield
Chief Financial Officer
27 May 2010
CONSOLIDATED INCOME STATEMENT
For the year ended 28 February 2010
+-----------------------------------------+--------+----------+----------+
| | | | |
| | | Total | Total |
+-----------------------------------------+--------+----------+----------+
| | | 2010 | 2009 |
+-----------------------------------------+--------+----------+----------+
| | | GBP'000 | GBP'000 |
+-----------------------------------------+--------+----------+----------+
| | Note | | Restated |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| Revenue | 3 | 47,298 | 61,244 |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| Administrative expenses | | (48,183) | (58,977) |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| Headline operating (loss)/ profit | | (885) | 2,267 |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| Exceptional items | 4 | (17,740) | 2,825 |
+-----------------------------------------+--------+----------+----------+
| Share-based payments | | (465) | (586) |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| Operating (loss)/ profit | | (19,090) | 4,506 |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| Loss on disposal of subsidiary | | - | (368) |
| undertakings | | | |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| Finance costs | | (1,845) | (1,983) |
+-----------------------------------------+--------+----------+----------+
| Finance costs relating to derivative | | - | (1,263) |
+-----------------------------------------+--------+----------+----------+
| Loss on sale of an investment | | (118) | - |
+-----------------------------------------+--------+----------+----------+
| Finance income | | 25 | 186 |
+-----------------------------------------+--------+----------+----------+
| Finance income relating to derivative | | 165 | - |
+-----------------------------------------+--------+----------+----------+
| Net finance cost | | (1,773) | (3,060) |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| (Loss)/ profit from continuing | | (20,863) | 1,078 |
| operations before taxation | | | |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| Tax on (loss)/ profit | | (626) | 341 |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| (Loss)/ profit from continuing | | (21,489) | 1,419 |
| operations | | | |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| Loss from discontinued operations | | (3,079) | (2,166) |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| Loss for the year | | (24,568) | (747) |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| Attributable to: | | | |
+-----------------------------------------+--------+----------+----------+
| Parent company's shareholders | | (24,568) | (700) |
+-----------------------------------------+--------+----------+----------+
| Minority interests | | - | (47) |
+-----------------------------------------+--------+----------+----------+
| | | | |
+-----------------------------------------+--------+----------+----------+
| Loss transferred to reserves | | (24,568) | (747) |
+-----------------------------------------+--------+----------+----------+
| | 5 | (76.21p) | (2.17p) |
| Basic loss per share from total | | | |
| operations | | | |
+-----------------------------------------+--------+----------+----------+
| | 5 | (76.21p) | (2.17p) |
| Diluted loss per share from total | | | |
| operations | | | |
+-----------------------------------------+--------+----------+----------+
| | 5 | (66.66p) | 4.55p |
| Basic (loss)/earning per share from | | | |
| continuing operations | | | |
+-----------------------------------------+--------+----------+----------+
| | 5 | (66.66p) | 3.81p |
| Diluted (loss)/ earning per share from | | | |
| continuing operations | | | |
+-----------------------------------------+--------+----------+----------+
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 28 February 2010
+----------------------------------------+------+----------+---------+
| | | | |
| | | Total | Total |
+----------------------------------------+------+----------+---------+
| | | 2010 | 2009 |
+----------------------------------------+------+----------+---------+
| | | GBP'000 | GBP'000 |
+----------------------------------------+------+----------+---------+
| | | | |
+----------------------------------------+------+----------+---------+
| Loss for the year | | (24,568) | (747) |
+----------------------------------------+------+----------+---------+
| | | | |
+----------------------------------------+------+----------+---------+
| Other comprehensive (expense)/ income: | | | |
+----------------------------------------+------+----------+---------+
| Exchange differences on translating | | (16) | 707 |
| foreign operations | | | |
+----------------------------------------+------+----------+---------+
| Other comprehensive (expense)/ income | | (16) | 707 |
| for the year | | | |
+----------------------------------------+------+----------+---------+
| | | | |
+----------------------------------------+------+----------+---------+
| Total comprehensive expense for the | | (24,584) | (40) |
| year | | | |
+----------------------------------------+------+----------+---------+
CONSOLIDATED BALANCE SHEET
As at 28 February 2010
+------------------------------------+------+----------+----------+
| | | 2010 | 2009 |
+------------------------------------+------+----------+----------+
| |Note | GBP'000 | GBP'000 |
+------------------------------------+------+----------+----------+
| Non-current assets | | | |
+------------------------------------+------+----------+----------+
| Intangible assets | | 100 | - |
+------------------------------------+------+----------+----------+
| Goodwill | | 23,670 | 40,289 |
+------------------------------------+------+----------+----------+
| Property, plant and equipment | | 5,625 | 6,018 |
+------------------------------------+------+----------+----------+
| Financial assets | | 415 | 533 |
+------------------------------------+------+----------+----------+
| Deferred tax | | 1,500 | 1,966 |
+------------------------------------+------+----------+----------+
| | 3 | 31,310 | 48,806 |
+------------------------------------+------+----------+----------+
| Current assets | | | |
+------------------------------------+------+----------+----------+
| Inventories | | 1,022 | 1,033 |
+------------------------------------+------+----------+----------+
| Trade and other receivables | | 19,322 | 20,723 |
+------------------------------------+------+----------+----------+
| Corporation tax | | 127 | 280 |
+------------------------------------+------+----------+----------+
| Cash and cash equivalents | | 8,634 | 11,001 |
+------------------------------------+------+----------+----------+
| | | 29,105 | 33,037 |
+------------------------------------+------+----------+----------+
| Total assets | 3 | 60,415 | 81,843 |
+------------------------------------+------+----------+----------+
| | | | |
+------------------------------------+------+----------+----------+
| Current liabilities | | | |
+------------------------------------+------+----------+----------+
| Trade and other payables | | (31,079) | (30,090) |
+------------------------------------+------+----------+----------+
| Corporation tax | | (35) | (19) |
+------------------------------------+------+----------+----------+
| Borrowings | | (3,367) | (167) |
+------------------------------------+------+----------+----------+
| Financial liabilities | | (4) | (5,482) |
+------------------------------------+------+----------+----------+
| | | (34,485) | (35,758) |
+------------------------------------+------+----------+----------+
| Non-current liabilities | | | |
+------------------------------------+------+----------+----------+
| Borrowings | | (19,172) | (14,414) |
+------------------------------------+------+----------+----------+
| Financial liabilities | | (1,040) | (1,205) |
+------------------------------------+------+----------+----------+
| Provisions for liabilities | | (1,749) | (2,125) |
+------------------------------------+------+----------+----------+
| | | (21,961) | (17,744) |
+------------------------------------+------+----------+----------+
| Total liabilities | | (56,446) | (53,502) |
+------------------------------------+------+----------+----------+
| | | | |
+------------------------------------+------+----------+----------+
| Net assets | | 3,969 | 28,341 |
+------------------------------------+------+----------+----------+
| | | | |
+------------------------------------+------+----------+----------+
| Shareholders' funds | | | |
+------------------------------------+------+----------+----------+
| Share capital | | 3,617 | 3,317 |
+------------------------------------+------+----------+----------+
| Share premium account | | 37,866 | 37,686 |
+------------------------------------+------+----------+----------+
| Capital redemption reserve | | 13,268 | 13,268 |
+------------------------------------+------+----------+----------+
| Merger reserve | | 5,078 | 5,078 |
+------------------------------------+------+----------+----------+
| Share-based payment reserve | | 714 | 800 |
+------------------------------------+------+----------+----------+
| Investment in own shares | | (1,385) | (905) |
+------------------------------------+------+----------+----------+
| Translation reserve | | 211 | 227 |
+------------------------------------+------+----------+----------+
| Retained earnings | | (55,400) | (31,130) |
+------------------------------------+------+----------+----------+
| Total equity shareholders' funds | | 3,969 | 28,341 |
+------------------------------------+------+----------+----------+
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 28 February 2010
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| | | | Capital | | Share-based | Invest-ment | | Retained | Total | Minority | Total |
| | Issued | Share | redemption | Merger | payment | in own | Transl-ation | earnings | | interest | equity |
| | capital | premium | reserve | reserve | reserve | shares | reserve | | | | |
| | | account | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Balance at 29 | 16,585 | 37,686 | - | 5,078 | 394 | (805) | (480) | (30,610) | 27,848 | (500) | 27,348 |
| February 2008 | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Exchange gain | | - | - | | | | | - | 707 | - | 707 |
| arising on | - | | | - | - | - | 707 | | | | |
| consolidation | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Net profit | - | - | - | - | - | | | - | 707 | - | 707 |
| recognised | | | | | | - | 707 | | | | |
| directly in | | | | | | | | | | | |
| other | | | | | | | | | | | |
| comprehensive | | | | | | | | | | | |
| income | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Loss for the | - | - | - | - | - | - | - | (700) | (700) | (47) | (747) |
| financial | | | | | | | | | | | |
| year | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Total | - | - | - | - | | | 707 | (700) | 7 | (47) | (40) |
| recognised | | | | | - | - | | | | | |
| expense for | | | | | | | | | | | |
| the year | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Repurchase of | (13,268) | - | 13,268 | - | - | - | - | - | - | - | - |
| deferred 4p | | | | | | | | | | | |
| shares | | | | | | | | | | | |
| following | | | | | | | | | | | |
| consolidation | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Treasury | - | - | - | - | - | (100) | - | - | (100) | - | (100) |
| share | | | | | | | | | | | |
| bought-back | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Liquidation | - | - | - | - | - | - | - | - | - | 547 | 547 |
| of minority | | | | | | | | | | | |
| interest | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Employee | | - | - | | | | | - | 586 | - | 586 |
| share-based | - | | | - | 586 | - | - | | | | |
| compensation | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Share-based | | - | - | | | | | 180 | - | - | - |
| compensation | - | | | - | (180) | - | - | | | | |
| vested in the | | | | | | | | | | | |
| year | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Balance at 28 | 3,317 | 37,686 | 13,268 | 5,078 | 800 | (905) | 227 | (31,130) | 28,341 | - | 28,341 |
| February 2009 | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Exchange loss | | - | - | | | | | - | (16) | - | (16) |
| arising on | - | | | - | - | - | (16) | | | | |
| consolidation | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Net expenses | - | - | - | - | - | | | - | (16) | - | (16) |
| recognised | | | | | | - | (16) | | | | |
| directly in | | | | | | | | | | | |
| other | | | | | | | | | | | |
| comprehensive | | | | | | | | | | | |
| income | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Loss for the | - | - | - | - | - | - | - | (24,568) |(24,568) | - | (24,568) |
| financial | | | | | | | | | | | |
| year | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Total | - | - | - | - | | | (16) | (24,568) | (24,584) | - | (24,584) |
| recognised | | | | | - | - | | | | | |
| expense for | | | | | | | | | | | |
| the year | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Shares issued | 300 | 180 | - | - | - | (480) | - | - | - | - | - |
| to employee | | | | | | | | | | | |
| benefit trust | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Purchase of | - | - | - | - | - | - | - | (255) | (255) | - | (255) |
| minority | | | | | | | | | | | |
| interest | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Employee | | - | - | | | | | - | 467 | - | 467 |
| share-based | - | | | - | 467 | - | - | | | | |
| compensation | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Share-based | | - | - | | | | | 553 | - | - | - |
| compensation | - | | | - | (553) | - | - | | | | |
| vested in the | | | | | | | | | | | |
| year | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
| Balance at 28 | 3,617 | 37,866 | 13,268 | 5,078 | 714 | (1,385) | 211 | (55,400) | 3,969 | - | 3,969 |
| February 2010 | | | | | | | | | | | |
+---------------+----------+---------+------------+---------+-------------+-------------+--------------+----------+----------+----------+----------+
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 28 February 2010
+-----------------------------------------+------+---------+---------+
| | | 2010 | 2009 |
+-----------------------------------------+------+---------+---------+
| |Note | GBP'000 | GBP'000 |
+-----------------------------------------+------+---------+---------+
| Cash (outflow)/ inflow from operating | | | |
| activities | | | |
+-----------------------------------------+------+---------+---------+
| Cash (outflow)/ inflow from operating | 6 | (1,070) | 3,691 |
| activities before taxation | | | |
+-----------------------------------------+------+---------+---------+
| Corporation tax paid | | (43) | (10) |
+-----------------------------------------+------+---------+---------+
| Net cash (outflow)/ inflow from | | (1,113) | 3,681 |
| operating activities after taxation | | | |
+-----------------------------------------+------+---------+---------+
| | | | |
+-----------------------------------------+------+---------+---------+
| Cash inflow/(outflow) from investing | | | |
| activities | | | |
+-----------------------------------------+------+---------+---------+
| Finance income received | | 25 | 199 |
+-----------------------------------------+------+---------+---------+
| Acquisition of subsidiary undertakings | | (577) | (97) |
+-----------------------------------------+------+---------+---------+
| Purchase of property, plant and | | (738) | (980) |
| equipment | | | |
+-----------------------------------------+------+---------+---------+
| Disposal of subsidiary undertakings | | (329) | 5,409 |
+-----------------------------------------+------+---------+---------+
| Proceeds from disposals of property, | | 1 | 146 |
| plant and equipment | | | |
+-----------------------------------------+------+---------+---------+
| Net cash on discontinued operations | | - | (363) |
+-----------------------------------------+------+---------+---------+
| Net cash (outflow)/ inflow from | | (1,618) | 4,314 |
| investing activities | | | |
+-----------------------------------------+------+---------+---------+
| | | | |
+-----------------------------------------+------+---------+---------+
| Cash inflow/ (outflow) from financing | | | |
| activities | | | |
+-----------------------------------------+------+---------+---------+
| Purchase of treasury shares | | - | (100) |
+-----------------------------------------+------+---------+---------+
| Finance cost paid | | (1,611) | (1,540) |
+-----------------------------------------+------+---------+---------+
| Repayment of borrowings | | (929) | (6,380) |
+-----------------------------------------+------+---------+---------+
| Drawdown of revolving credit facility | | 3,200 | - |
+-----------------------------------------+------+---------+---------+
| Capital element of hire purchase | | (3) | (158) |
| agreements | | | |
+-----------------------------------------+------+---------+---------+
| Net cash inflow/ (outflow) from | | 657 | (8,178) |
| financing activities | | | |
+-----------------------------------------+------+---------+---------+
| | | | |
+-----------------------------------------+------+---------+---------+
| Net decrease in cash and cash | | (2,074) | (183) |
| equivalents | | | |
+-----------------------------------------+------+---------+---------+
| | | | |
+-----------------------------------------+------+---------+---------+
| Cash and cash equivalents at beginning | | 11,001 | 9,632 |
| of year | | | |
+-----------------------------------------+------+---------+---------+
| | | | |
+-----------------------------------------+------+---------+---------+
| Effect of exchange rate changes on the | | (293) | 1,552 |
| balance of cash held in foreign | | | |
| subsidiaries | | | |
+-----------------------------------------+------+---------+---------+
| Cash and cash equivalents at end of | | 8,634 | 11,001 |
| year | | | |
+-----------------------------------------+------+---------+---------+
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 28 February 2010
1. GENERAL INFORMATION
Media Square plc and its subsidiaries' principal activities are advertising,
marketing and design services.
Media Square plc, a Public Limited Company, is incorporated and domiciled in the
United Kingdom.
The financial statements for the year ended 28 February 2010 (including the
comparative for the year ended 28 February 2009) have not been approved by the
Board.
The financial information in this statement is not audited and does not
constitute statutory accounts within the meaning of section 435 of the Companies
Act 2006. The financial statements for the year to 28 February 2010 have not yet
been delivered to the Registrar of Companies, nor have the auditors yet reported
on them. Full accounts for Media Square plc for the year ended 28 February 2009,
prepared under IFRS, have been delivered to the Registrar of Companies. The
auditors' report on those accounts was unqualified and did not contain a
statement under Section or Section 237(3) of the Companies Act 1985. These
unaudited preliminary results were approved by the Board on 26 May 2010.
2. ACCOUNTING POLICIES
These consolidated financial statements have been prepared using the required
measurement bases specified under International Financial Reporting Standards
(IFRS) and in accordance with applicable IFRS as adopted by the European Union
and IFRS as issued by the International Accounting Standards Board.
3. SEGMENTAL ANALYSIS
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Year ended 28 | Advertising | Marketing | Design | Unallocated | Eliminations | Total |
| February 2010 | | | | | | |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Revenue | | | | | | |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| From external | 25,720 | 10,331 | 11,247 | - | - | 47,298 |
| customers | | | | | | |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| From other | 45 | 20 | 31 | - | (96) | - |
| segments | | | | | | |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Segment revenues | 25,765 | 10,351 | 11,278 | - | (96) | 47,298 |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Headline operating | 935 | 318 | 463 | (2,601) | - | (885) |
| profit/ (loss) | | | | | | |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Exceptional items | (9,719) | (682) | (6,630) | (709) | - | (17,740) |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Share-based | - | - | - | (465) | - | (465) |
| payments | | | | | | |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Operating loss | (8,784) | (364) | (6,167) | (3,775) | - | (19,090) |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Net finance costs | | | | | | (1,773) |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Loss before tax | | | | | | (20,863) |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Taxation | | | | | | (626) |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Loss after tax | | | | | | (21,489) |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| | | | | | | |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Segmental assets | 40,040 | 8,786 | 10,751 | 838 | - | 60,415 |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| | | | | | | |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Other segment | | | | | | |
| information: | | | | | | |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Capital | 207 | 115 | 354 | 62 | - | 738 |
| expenditure | | | | | | |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Depreciation | 492 | 202 | 224 | 101 | - | 1,019 |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
| Goodwill | 9,893 | 600 | 5,450 | - | - | 15,943 |
| impairment | | | | | | |
+--------------------+-------------+-----------+---------+-------------+--------------+----------+
The unallocated operating loss, exceptional items, share-based payments and
segmental assets relate to central costs.
The depreciation charge and goodwill impairment disclosed relates to continuing
operations only and as such does not agree to the figures disclosed in note 6.
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Year ended 28 | Advertising | Marketing | Design | Unallocated | Eliminations | Total |
| February 2009 | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| | Restated | Restated | Restated | Restated | Restated | Restated |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Revenue | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| from external | 31,484 | 12,339 | 17,421 | - | - | 61,244 |
| customers | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| from other | 176 | 15 | 362 | - | (553) | - |
| segments | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Segment revenues | 31,660 | 12,354 | 17,783 | - | (553) | 61,244 |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Headline operating | 2,899 | 508 | 2,180 | (3,320) | - | 2,267 |
| profit/ (loss) | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Exceptional items | (20) | (345) | (951) | 4,141 | - | 2,825 |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Share-based | - | - | - | (586) | - | (586) |
| payments | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Operating profit/ | 2,879 | 163 | 1,229 | 235 | - | 4,506 |
| (loss) | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Loss on disposal | | | | | | (368) |
| of subsidiary | | | | | | |
| undertakings | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Net finance costs | | | | | | (3,060) |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Profit before tax | | | | | | 1,078 |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Taxation | | | | | | 341 |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Profit after tax | | | | | | 1,419 |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Segmental assets | 48,023 | 10,310 | 19,054 | 4,456 | - | 81,843 |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Other segment | | | | | | |
| information: | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Capital | 377 | 239 | 268 | 22 | - | 906 |
| expenditure | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Depreciation | 591 | 295 | 421 | 113 | - | 1,420 |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
| Impairment of | - | 30 | 223 | - | - | 253 |
| property, plant & | | | | | | |
| equipment | | | | | | |
+--------------------+-------------+-----------+----------+-------------+--------------+----------+
The unallocated operating loss relates to central costs of GBP3.7m and foreign
exchange gains of GBP0.4m. The unallocated exceptional items, share-based
payments and segmental assets relate to central costs.
The capital expenditure and depreciation charge disclosed relates to continuing
operations only and as such does not agree to the figures disclosed in the
consolidated cash flow statement and note 6 respectively.
The Group's revenue from external customers and its geographic allocation of
total assets may be summarised as follows:
+-------------------------+----------+-------------+----------+-------------+
| | Year ended | Year end |
| | 28 February 2010 | 28 February 2009 |
+-------------------------+------------------------+------------------------+
| | Revenues | Non-current | Revenues | Non-current |
| | | assets | | assets |
+-------------------------+----------+-------------+----------+-------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------------+----------+-------------+----------+-------------+
| | | | Restated | Restated |
+-------------------------+----------+-------------+----------+-------------+
| | | | | |
+-------------------------+----------+-------------+----------+-------------+
| United Kingdom | 35,196 | 24,737 | 49,247 | 36,856 |
+-------------------------+----------+-------------+----------+-------------+
| Rest of World | 12,227 | 6,573 | 12,408 | 11,950 |
+-------------------------+----------+-------------+----------+-------------+
| Eliminations | (125) | - | (411) | - |
+-------------------------+----------+-------------+----------+-------------+
| Total | 47,298 | 31,310 | 61,244 | 48,806 |
+-------------------------+----------+-------------+----------+-------------+
4. EXCEPTIONAL ITEMS
+-----------------------------------+----------+--------+-------+----------+----------+
| | | | | 2010 | 2009 |
+-----------------------------------+----------+--------+-------+----------+----------+
| | | | | GBP'000 | GBP'000 |
+-----------------------------------+----------+--------+-------+----------+----------+
| | | | | | Restated |
+-----------------------------------+----------+--------+-------+----------+----------+
| | | | | | |
+-----------------------------------+----------+--------+-------+----------+----------+
| Restructuring and reorganisation | | | | (1,416) | (887) |
| costs | | | | | |
+-----------------------------------+----------+--------+-------+----------+----------+
| Property related provisions, | | | | (740) | (878) |
| costs and impairments | | | | | |
+-----------------------------------+----------+--------+-------+----------+----------+
| Release of transaction cost | | | | - | 1,138 |
| accruals | | | | | |
+-----------------------------------+----------+--------+-------+----------+----------+
| Release of acquisition provisions | | | | 359 | 3,452 |
+-----------------------------------+----------+--------+-------+----------+----------+
| Goodwill impairment | | | | (15,943) | - |
+-----------------------------------+----------+--------+-------+----------+----------+
| | | | | (17,740) | 2,825 |
+-----------------------------------+----------+--------+-------+----------+----------+
The provision released in the year was recorded as a fair value adjustment on
the acquisition of a subsidiary. It has been released in the period as the
events for which it was made have not materialised.
5. EARNINGS/ (LOSS) PER SHARE
The calculation of the basic (loss)/ earnings per share is based on the (loss)/
profit on ordinary activities after tax and on the weighted average number of
Ordinary shares in issue during the year.
The calculation of the diluted earnings per share is based on the profit on
ordinary activities after tax and on the weighted average number of Ordinary
shares and share options in issue during the period.
In the current year, a loss was generated from total, continued and discontinued
operations (2009: loss from discontinued and total operations). As the effect
of share options on the loss per share is anti dilutive no diluted earnings per
share figure has been produced.
The (loss)/ profit and weighted average number of shares used in the
calculations are set out below:
+---------------------------+----------+------------+----------+---------+------------+----------+
| | | 2010 | | | 2009 | |
+---------------------------+----------+------------+----------+---------+------------+----------+
| Basic (loss)/ earnings | Loss | Weighted | Loss | (Loss)/ | Weighted | (Loss)/ |
| per share | | average | per | profit | average | earnings |
| | | number | share | | number | per |
| | | of | | | of | share |
| | | shares | | | shares | |
+---------------------------+----------+ +----------+---------+ +----------+
| | GBP'000 | | pence | GBP'000 | | pence |
+---------------------------+----------+------------+----------+---------+------------+----------+
| Basic loss per share from | | | | | | |
| total operations | | | | | | |
+---------------------------+----------+------------+----------+---------+------------+----------+
| Loss attributable to | (24,568) | 32,238,713 | (76.21p) | (700) | 32,244,916 | (2.17p) |
| ordinary shareholders | | | | | | |
+---------------------------+----------+------------+----------+---------+------------+----------+
| Basic (loss)/ earnings | | | | | | |
| per share on continuing | | | | | | |
| operations | | | | | | |
+---------------------------+----------+------------+----------+---------+------------+----------+
| (Loss)/ earnings | (21,489) | 32,238,713 | (66.66p) | 1,466 | 32,244,916 | 4.55p |
| attributable to ordinary | | | | | | |
| shareholders | | | | | | |
+---------------------------+----------+------------+----------+---------+------------+----------+
| Basic loss per share on | | | | | | |
| discontinued operations | | | | | | |
+---------------------------+----------+------------+----------+---------+------------+----------+
| Loss attributable to | (3,079) | 32,238,713 | (9.55p) | (2,166) | 32,244,916 | (6.72p) |
| ordinary shareholders | | | | | | |
+---------------------------+----------+------------+----------+---------+------------+----------+
+------------------------------------------------+---------+------------+----------+
| | | 2009 | |
+------------------------------------------------+---------+------------+----------+
| Diluted earnings per share | Profit | Weighted | Earnings |
| | | average | per |
| | | number | share |
| | | of | |
| | | shares | |
+------------------------------------------------+---------+ +----------+
| | GBP'000 | | pence |
+------------------------------------------------+---------+------------+----------+
| Diluted earnings per share on continuing | | | |
| operations | | | |
+------------------------------------------------+---------+------------+----------+
| Earnings attributable to ordinary shareholders | 1,466 | 38,430,041 | 3.81p |
+------------------------------------------------+---------+------------+----------+
6. Net cash inflow from operating activities
+---------------------------------------------------+----------+----------+
| | 2010 | 2009 |
+---------------------------------------------------+----------+----------+
| | GBP'000 | GBP'000 |
| | | Restated |
+---------------------------------------------------+----------+----------+
| | | |
+---------------------------------------------------+----------+----------+
| Operating (loss)/ profit | (19,090) | 4,506 |
+---------------------------------------------------+----------+----------+
| Operating loss from discontinued operations | (1,623) | (1,480) |
+---------------------------------------------------+----------+----------+
| Depreciation | 1,062 | 1,556 |
+---------------------------------------------------+----------+----------+
| (Loss)/ profit on disposal of property, plant & | 18 | (19) |
| equipment | | |
+---------------------------------------------------+----------+----------+
| Impairment of property, plant & equipment | - | 253 |
+---------------------------------------------------+----------+----------+
| Impairment of goodwill | 16,169 | - |
+---------------------------------------------------+----------+----------+
| Release of excess acquisition/disposal accruals | - | (628) |
+---------------------------------------------------+----------+----------+
| Share-based payment | 465 | 586 |
+---------------------------------------------------+----------+----------+
| (Increase)/ decrease in inventories | (90) | 671 |
+---------------------------------------------------+----------+----------+
| Decrease in receivables | 957 | 8,055 |
+---------------------------------------------------+----------+----------+
| Increase/ (decrease) in payables | 1,062 | (9,809) |
+---------------------------------------------------+----------+----------+
| Net cash (outflow)/ inflow from operating | (1,070) | 3,691 |
| activities | | |
+---------------------------------------------------+----------+----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR QQLFLBEFEBBK
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