TIDMDAIP
RNS Number : 1847P
Daily Internet PLC
30 September 2013
30 September 2013
Daily Internet plc
("Daily Internet" or "the Group")
Annual Report
Daily Internet, the AIM listed web hosting provider, is pleased
to announce its audited results for the year ended 31 March
2013.
Highlights
-- Revenue increased by 7.3% to GBP1.56 million reflecting good organic growth
-- Gross profit of GBP792,000 (2012: GBP756,000)
-- Number of active domains increased by 10.0% to 169,486
-- Number of active hosting services increased by 1.6% to 20,901
-- GBP242,000 investment in infrastructure
-- GBP278,000 investment in personnel to enable expansion into the next phase of development
-- Two fundraisings completed amounting to GBP1,075,000 after expenses
-- Admission to AIM completed in January 2013
Michael Edelson, Chairman of Daily Internet, commented:
"The Group has made steady progress during the financial year
under review and the Daily brand continues to be well regarded in
the marketplace as demonstrated by continued organic growth against
a backdrop of a flat UK economy. Our customer base has continued to
grow and from this we have built a recurring revenue base that will
provide funding to develop and maintain the current product set for
the foreseeable future."
For further information please contact:
Daily Internet plc +44 (0)115
Abby Hardoon, Managing Director 973 7260
Sanlam Securities UK Limited (Nominated
Adviser and Joint Broker)
Simon Clements/Virginia Bull/Richard +44 (0)20 7628
Goldsmith 2200
Loeb Aron & Company Limited (Joint
Broker) +44 (0)20 7628
Dr Frank Lucas/Peter Freeman 1128
Square1 Consulting Limited +44 (0)20 7929
David Bick/Mark Longson 5599
About Daily Internet
Daily Internet is an award-winning second generation UK web
hosting provider which delivers a wide range of internet solutions
to individuals as well as SME and large business users. The people
behind Daily Internet have in-depth expertise and experience in the
Internet hosting sector and have built some of the UK's best known
web hosting brands.
Chairman's Statement
I am pleased to present the 31 March 2013 financial results for
Daily Internet plc (Daily).
Performance Summary
The Group has made steady progress during the financial year
under review and in-line with one of the goals set out in my
Statement last year it achieved cash flow break even at the
operating unit level (excluding the investment in our Phase II
growth) during the second quarter of 2012.
The Daily brand continues to be well regarded in the marketplace
as demonstrated by continued organic growth against a backdrop of a
flat UK economy. Our continually improving renewal rates
demonstrate our ability to deliver excellent customer service and
value.
The Group has now developed a broad portfolio of hosting
products, email and domain name registration services to provide
both the small business user and consumer with all their hosting
requirements. Our customer base has continued to grow and from this
we have built a recurring revenue base that will provide funding to
develop and maintain the current product set for the foreseeable
future.
The launch and introduction of our dedicated server product in
January 2013 completed Phase II of our strategic development to
provide a one-stop shop for hosting products for SMEs and
individuals.
Outlook
We continue to develop our existing product base and introduce
new products as the market demands. Our new web design product
launched after the year end has been well received and complements
our existing product portfolio.
The management team at Daily will continue to work hard with
enthusiasm and energy seeking out new technologies to further
capture market share, increase revenue and consolidate our
position; and at the same time endeavouring to target and execute
accretive acquisitions to enable us to extend our reach into new
markets with new brands at a much faster rate than organic
growth.
Placing
The Company completed two fundraisings during the year amounting
to GBP1,075,000 after expenses and the funds raised were utilised
in completing phase II of the company's development strategy and
funding the admission to AIM which was successfully completed in
January 2013.
Conclusion
I take this opportunity to thank all our shareholders for their
continued support and the Daily staff for their passion, dedication
and commitment to the company and our customers.
Michael Edelson
Chairman
27 September 2013
Operational and Financial Review
Performance
2013 has been another year of continued revenue growth. Revenue
for the Group reached nearly GBP1.6 million for the year to 31
March 2013, an increase of 7.3% compared to the previous year.
Daily Internet offers hosting services paid for on a variable
subscription basis. Where the subscription is paid for on an annual
basis, sales attributable to future periods are deferred. As such,
revenue reported in the accounts is different from actual cash
received. The Group's cash receipts for the year amounted to
GBP1,550,000 compared to GBP1,503,000 for the previous year; an
increase of 3%. The amount of cash received which has been deferred
to future periods at 31 March 2013 is GBP307,000.
Marketing and staff costs represent the majority of our
operating expenses. During 2013 we have continued to improve
marketing efficiencies by using social media channels, improving
our brand recognition and increasing our market reputation.
Customer and other referrals are now a key driver for gaining new
sales and customers; as such marketing spend for the year reduced
by 16% to GBP187,000 and customer signups increased by 10% to a
total of 67,000 by 31 March 2013.
During the year the Group invested GBP278,000 in its Phase II
project pre-launch, adding personnel within the Sales and Marketing
and Customer Service departments, and in January 2013 launched a
new Dedicated Server product range.
Gross profit for the year was GBP792,000 (2012: GBP756,000)
representing a gross margin of 50.9% (2012: 52.1%). EBITDA* loss
for the year to 31 March 2013 is reported in the financial
statements at GBP705,000 (2012: GBP139.000). Included within this
figure are additional costs of GBP278,000 (2012: GBP51,000) for
Phase II development and GBP234,000 of AIM admission costs and
share based payment costs of GBP24,000. The underlying EBITDA loss
being GBP169,000 (2012: GBP88,000).
Focus on excellent customer service and continued systems
improvements within the Group's established product set have driven
increased revenue per operational head. In the coming year we aim
to continue to drive additional new sales and maintain our renewal
base without incurring additional staff costs.
Balance Sheet and Treasury
The Group has continued to invest in its infrastructure during
the year to 31 March 2013, having spent GBP242,000 during the year
on the maintenance and expansion of its core products (2012:
GBP124,000). The total investment at 31 March 2013 in the Group's
tangible and intangible assets amounts to GBP1,053,000 (2012:
GBP811,000), these are written down over time in accordance with
the Company's depreciation policy and the net book value of these
assets is reported at GBP330,000 (2012: GBP192,000).
Net cash outflow from operating activities during the year
amounted to GBP680,000 (2012: GBP9,000). Of this amount GBP234,000
related to AIM listing costs and GBP278,000 related to pre-launch
Phase II costs. Cash at bank at 31 March 2013 was ahead of plan at
GBP373,000 (2012: GBP108,000). A facility of GBP580,000, which is
available until 31 March 2015, has been arranged for working
capital requirements, of which GBP405,000 has been utilised as at
31 March 2013. The Directors are confident that this amount is
sufficient to allow the Group to continue its organic growth and to
achieve an overall cashflow breakeven position in the current
financial year. However, fundraising would be required should an
acquisition target become available.
Payables falling due within one year are reported at GBP806,000
(2012: GBP709,000). This figure includes an amount of GBP307,000
(2012: GBP283,000) for deferred revenue which will be released to
profit in future years.
Payables falling due after one year are reported at GBP792,000
(2012: GBP708,000). This includes an amount of GBP260,000 (2012:
GBP269,000) representing the carrying value on convertible loan
notes which were renewed on 9 January 2012 and the GBP405,000 loan
facility referred to above.
Julie Joyce
Finance Director
27 September 2013
Consolidated Statement of Comprehensive Income for the Year
Ended 31 March 2013
2013 2012
Group Group
Notes GBP,000 GBP,000
Revenue 1,557 1,451
Cost of sales (765) (695)
Gross profit 792 756
Administration expenses before amortisation,
depreciation, Phase II costs and
share based payments 961 844
Depreciation and other amortisation 104 68
Phase II costs 278 51
AIM admission costs 234 -
Share based payments 24 -
---------------------------------------------- ------- --------- ---------
Administrative expenses (1,601) (963)
--------- ---------
Loss from operations (809) (207)
--------- ---------
Finance costs (91) (63)
--------- ---------
Loss before taxation (900) (270)
Taxation 3 - -
--------- ---------
Total comprehensive loss attributable
to the equity holders of the company (900) (270)
Basic and fully diluted loss per 2 GBP0.011 GBP0.004
share
--------- ---------
The Group's results are derived from continuing
operations.
The accompanying notes form an integral part of
this consolidated statement of comprehensive income.
Consolidated Statement of Financial Position as at 31 March
2013
2013 2012
Group Group
Notes GBP,000 GBP,000
-------- --------
Assets
Non-current assets
Goodwill 392 392
Intangible assets - 9
Property, plant and equipment 330 183
-------- --------
722 584
Current assets
Trade and other receivables 5 49 47
Cash and cash equivalents 373 108
-------- --------
422 155
-------- --------
Total Assets 1,144 739
-------- --------
Equity and Liabilities
Equity attributable to the equity
shareholders of the parent
Called up share capital 8 595 313
Share premium reserve 3,438 2,629
Other reserve 173 242
Retained losses (4,660) (3,862)
-------- --------
(454) (678)
-------- --------
Non-current liabilities
Obligations under finance leases 127 34
Convertible loan notes 7 260 269
Other loans 7 405 405
-------- --------
792 708
-------- --------
Current liabilities
Trade and other payables 6 730 687
Obligations under finance leases 76 22
-------- --------
806 709
-------- --------
Total Equity and Liabilities 1,144 739
-------- --------
Consolidated Statement of Changes in Equity for the Year Ended
31 March 2013
Attributable to equity holders
of the parent
Share
Share premium Other Retained
capital reserve reserve losses Total
GBP000 GBP000 GBP000 GBP000 GBP000
At 1 April 2011 305 2,600 242 (3,592) (445)
Loss and total
comprehensive income
for the year - - - (270) (270)
Issue of share
capital 8 29 - - 37
--------- --------- --------- --------- -------
At 1 April 2012 313 2,629 242 (3,862) (678)
Loss and total
comprehensive income
for the period - - - (900) (900)
Issue of share
capital 282 866 - - 1,148
Expenses of share
issue - (57) - - (57)
Movement in share
option reserve - - (78) 102 24
Equity element
of convertible
loan note - - 9 - 9
--------- --------- --------- --------- -------
At 31 March 2013 595 3,438 173 (4,660) (454)
--------- --------- --------- --------- -------
The following describes the nature and purpose
of each reserve within equity:
Reserve Description and purpose
Share Premium Reserve Amount subscribed for share capital
in excess of nominal values.
Other Reserve Amount reserved for share based
payments to be released over
the life of the instruments and
the equity element of convertible
loan notes.
Retained losses All other net gains and losses
and transactions with owners
(e.g. dividends) not recognised
elsewhere.
Consolidated Statement of Cash Flows for the Year Ended 31 March
2013
2013 2012
Group Group
GBP000 GBP000
Cash flows used in operating
activities
Loss generated from operations (809) (207)
Adjustments for:
Depreciation and other amortisation 104 68
Share based payments 24 -
Operating cash flows before movement
in working capital (681) (139)
------- -------
(Increase) in trade and other
receivables (2) (20)
Increase in trade and other payables 3 150
Net cash used in operating activities (680) (9)
------- -------
Cash flows from investing activities
Payments to acquire property,
plant & equipment (242) (124)
Net cash used in investing activities (242) (124)
------- -------
Cash flows from financing activities
Issue of ordinary share capital 1,091 37
Drawdown of loan facility - 130
Interest paid (5) (36)
Loan note interest paid (26) (24)
Interest element of finance lease
payments (20) (3)
Capital repayment of finance
leases (54) (13)
New lease finance secured on
assets 201 51
Net cash from financing activities 1,187 142
------- -------
Net increase in cash and cash
equivalents 265 9
Cash and cash equivalents at
the beginning of the year 108 99
------- -------
Cash and cash equivalents at
the end of the year 373 108
------- -------
Notes to the Consolidated Financial Statements
1 Accounting policies
Basis of preparation
The financial information set out in this announcement does not
constitute statutory financial statements for the years ended 31
March 2013 or 31 March 2012. Statutory accounts for the years ended
31 March 2013 and 31 March 2012 have been reported on by the
Independent Auditors.
The Independent Auditors' Reports on the Annual Report and
Financial Statements for 2013 and 2012 were unqualified, did not
draw attention to any matters by way of emphasis, and did not
contain a statement under s.498(2) or s.498(3) of the Companies Act
2006.
Statutory accounts for the year ended 31 March 2012 have been
filed with the Registrar of Companies. The statutory accounts for
the year ended 31 March 2013 will be delivered to the Registrar in
due course.
Going concern
The Directors have prepared the Financial Statements on a going
concern basis which assumes that the group and the company will
continue to meet liabilities as they fall due.
The directors have reviewed forecasts prepared 12 months ending
30 September 2014 and considered the projected trading forecasts
and resultant cash flows together with confirmed loan facilities
and other sources of finance.
The group's forecasts and projections, taking account of
reasonably possible changes in trading performance, show that the
group can continue to operate within the current facilities
available to it.
The Directors therefore have a reasonable expectation that the
group has adequate resources to continue in operational existence
for the foreseeable future and thus they continue to adopt the
going concern basis of accounting in preparing the financial
statements.
2 Loss per share
2013 2012
Loss for the financial GBP900,000 GBP270,000
year attributable to shareholders
Weighted number of equity
shares in issue 84,800,825 61,403,002
Basic/diluted loss per
share GBP0.011 GBP0.004
Since the conversion of potential ordinary shares to ordinary
shares would decrease the net loss per share, they are not
dilutive. Accordingly diluted loss per share is the same as basic
loss per share.
3 Taxation
2013 2012
GBP,000 GBP,000
Current tax charge - -
-------- --------
Deferred tax
Timing differences - -
-------- --------
Total tax charge - -
-------- --------
Factors affecting the tax charge
for the year
Loss on ordinary activities before
taxation (900) (270)
-------- --------
Loss on ordinary activities before
taxation multiplied by the Standard
rate of UK corporation tax of 24%
(2012:26%) (216) (70)
Effects of:
Tax losses 216 70
-------- --------
Total tax charge - -
-------- --------
There is no tax charge for any periods reported due to losses
arising. The Directors have not provided for the potential deferred
tax asset due to the uncertainty of future taxable profits. The tax
losses available were approximately GBP3,760,000 at 31 March 2013
(2012: GBP3,334,000). The deferred tax asset on these tax losses at
24% (2012: 26%) of GBP902,000 (2012: GBP867,000) has not been
recognised due to the uncertainty of the recovery.
4 Investments
Company Company
2013 2012
GBP,000 GBP,000
Investment in Subsidiaries
At 1 April 2012 1,722 1722
Additions - -
Impairment (458) -
---------- ---------
Cost 31 March 2013 1,264 1,722
---------- ---------
The Company's subsidiary undertakings all
of which are wholly owned and included in
the consolidated accounts are:
Undertakings Registration Principal activity
Web hosting
Daily Internet Services and domain
Limited England name registration
Investment
Lambolle Partners plc England Company
The recoverable amounts have been determined from discounted
cash flow calculations based on cash flow projections from approved
budgets covering a two year period to 31 March 2015. The major
assumptions can be seen in note 11. This consequently resulted in
an impairment of GBP458,000 in the year.
Lambolle Partners PLC is a dormant Company and therefore exempt
from audit.
5 Trade and other receivables
Group Company Group Company
2013 2013 2012 2012
GBP,000 GBP,000 GBP,000 GBP,000
Amounts due within
one year:-
Trade debtors 2 - - -
Other receivables - 4 - 1
Prepayments and accrued
income 47 8 47 22
-------- -------- -------- --------
49 12 47 23
-------- -------- -------- --------
Amounts due after more
than one year:-
Amounts owed by subsidiary
undertakings - 134 - 2,324
-------- -------- -------- --------
- 134 - 2,324
-------- -------- -------- --------
Total Receivables 49 146 47 2,347
-------- -------- -------- --------
6 Trade and other payables
Group Company Group Company
2013 2013 2012 2012
Amounts falling due
within one year GBP,000 GBP,000 GBP,000 GBP,000
Trade payables 177 19 203 9
Corporation tax - - - -
Other taxes and social
security costs 63 1 31 1
Other payables 73 - 109 -
Accruals and deferred
income 417 93 344 6
-------- -------- -------- --------
730 113 687 16
-------- -------- -------- --------
Group Company Group Company
2013 2013 2012 2012
Amounts falling due
after one year GBP,000 GBP,000 GBP,000 GBP,000
Other loans 405 405 405 405
Amounts due to subsidiary
undertakings - 860 - 860
Convertible loan note
(see note 16) 260 260 269 269
-------- -------- -------- --------
665 1,525 674 1,534
-------- -------- -------- --------
The maturity of other debt is as follows:
Within one to three
years 665 665 674 674
Over five years - 860 - 860
-------- -------- -------- --------
665 1,525 674 1,534
-------- -------- -------- --------
7 Loans and borrowings
The book value and fair value of loans and borrowings are as
follows:
Group Company Group Company
2013 2013 2012 2012
Non-Current GBP'000 GBP'000 GBP'000 GBP'000
Convertible Loan 260 260 269 269
Other loan 405 405 405 405
Finance lease creditor
(see note 17) 127 - 34 -
-------- -------- ------------ -----------
792 665 708 674
-------- -------- ------------ -----------
2013 2013 2012 2012
Current GBP'000 GBP'000 GBP'000 GBP'000
Finance lease creditor
(see note 17) 76 - 22 -
-------- -------- ------------ -----------
76 0 22 -
-------- -------- ------------ -----------
Loan facility
A loan facility of GBP580,000 has been arranged by the Group
between Abby Hardoon, a director and major shareholder, John
Thompson and Hawkstone Capital Limited. Interest is payable at a
minimum rate of 10% and is repayable or convertible at a conversion
price of 3p per share on 31(st) March 2015. The amount drawn down
at 31 March 2013 is GBP405,000 (2012:GBP405,000).
Convertible Loan note
Fifty six GBP5,000 convertible loan notes were issued on 4
January 2012 which expire in 2015. The 2015 Loan Notes offer a rate
of interest of 9 per cent and are convertible at a conversion price
of 3p per share. The Company is able to redeem a minimum of
GBP1,000 nominal value of each New Loan Note as cash flow allows by
repaying the redeemed nominal value plus six months pro rata
interest, subject to the relevant holders being entitled to convert
such loan notes into ordinary shares in the capital of the Company
at their election at 3p per share.
A warrant was also issued entitling the holder to subscribe for
100,000 ordinary shares at a price of 5p per share, exercisable at
any time before 8 January 2022, provided that the Company may
require the exercise of these warrants if its shares are traded at
a price in excess of 8p per share for a period of 60 business days
and an aggregate value of bargains exceeding GBP60,000 occurs over
that period. The value of the convertible loan notes recognised in
the balance sheet is calculated as follows:
2013 2012
GBP,000 GBP,000
Face value 280 280
Costs of issue (11) (11)
-------- --------
Net proceeds 269 269
Equity component (13) -
Unwinding of liability 4 -
-------- --------
Liability component at 31 March
2013 260 269
-------- --------
8 Share Capital
Group Company Group Company
2013 2013 2012 2012
GBP,000 GBP,000 GBP,000 GBP,000
Authorised
150,000,000 Ordinary
shares of 0.5p
each 750 750 750 750
-------- -------- -------- --------
750 750 750 750
-------- -------- -------- --------
Allotted, called
up and fully paid
At start of year
62,623,550 Ordinary
shares of 0.5p
each 313 313 305 305
Issued during the
year 56,361,342
Ordinary shares
of 0.5p 282 282 8 8
-------- -------- -------- --------
At end of year
118,984,892 Ordinary
shares of 0.5p 595 595 313 313
-------- -------- -------- --------
During the year the Company issued 56,361,342 ordinary shares of
0.5p each. The total amount raised of GBP1,091,000 after costs was
used to fund the Company's admission on to AIM, to fund the launch
of the Group's Dedicated Server product range and to provide
further working capital.
Under the terms of the EMI and unapproved share options a
further 4,250,000 ordinary shares could be issued with a nominal
value of GBP21,250.
9 Annual General Meeting and Availability of Annual Report
The Annual General Meeting of the Company will be held at the
Company's registered office at Number 14 Riverview, Vale Road,
Heaton Mersey, Stockport, Cheshire SK4 3GN on 25 October 2013 at
10.00 a.m.
Copies of the annual report will be available from the Company's
office and also from the Company's website www.daily.co.uk.
This information is provided by RNS
The company news service from the London Stock Exchange
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