RNS Number:0346J
Award International Holdings PLC
25 February 2005
Strictly embargoed until 0900 hours, 25 February 2005
Award International Holdings Plc
Preliminary Results for the 16 months ended 30 September 2004
Award International Holdings Plc ("AIH" or "the Company"), the full service
promotional incentives company that provides merchandise, live events, travel
and voucher incentives announces its maiden preliminary results for the sixteen
months ended 30 September 2004.
AIH is a holding company which owns two main trading subsidiaries, Award
International Limited ("Award") and Flexibreaks Travel Services Limited
("Flexibreaks").
AIH floated on AIM on 29 March 2004 raising #2.25m (pre expenses) by way of a
placing.
Overview
The Company was incorporated on 2 June 2003 hence these results are for a
sixteen month period. In the first four months of the period, the only income
and expense incurred related to the costs associated with the flotation of the
Company which amount to approximately #490,000. All of these costs are set
against the share premium account and do not impact on the profit and loss
account. The results also include a six-month contribution from Flexibreaks
Travel Services Limited which was acquired by AIH on flotation.
For clarity and comparison, also included in this announcement is a summary of
Award International Limited's key figures for the years ended 30 September 2004
and 2003.
Turnover for the period ended 30 September 2004 amounted to #4,208,931.
Operating profit for the period under review was #44,861 and profit before tax
of #6,573. The merchandise and event sectors of the Company showed increases in
turnover. Award International Limited, a subsidiary of AIH Plc, achieved
turnover of #3,745,945 in the 12 months to 30 September 2004, which compares to
a turnover of #3,506,167 for the 12 months to 30 September 2003. Award's profit
after tax for the 12 months to 30 September 2004 was however, #79,239 compared
to #86,409 for the previous year. The travel sector suffered a reduction in
turnover.
The Directors have not declared or recommended any dividends for the year.
Review of Activities
It has been a challenging year for AIH, and despite winning a number of new
clients the Company's results are disappointing, as forecast in our trading
statement issued on 2 December 2004. The results have been affected by the loss
of a significant client, the cancellation of an expected promotion from another
key client and the decision by Pepsi Cola Beverages International to withdraw
7UP's sponsorship of Formula 1. These results have also been affected by
exchange rate fluctuations, although it is hoped that the latter will be less
significant in the future, as the Company has introduced a procedure for
currency hedging.
AIH has been focusing on growing and developing the business as outlined in the
Company's AIM admission document and is pleased to report that it has secured a
number of new clients during the year, these include: the Disney Channel, Fine
Gael, Direction JWT and Chane Hiv SA, a Pepsi bottler. Unfortunately however, BT
Retail and Cadbury Ireland, which were both announced as new clients in the
Company's December trading statement, have delayed the orders they had placed
for promotions at that time. The Directors remain optimistic that these orders
will be filled.
Award has also been expanding its business from other existing clients. For
example it has succeeded in securing further promotions for Cantrell and
Cochrane ("C&C"), the Pepsi bottler in Ireland, for the Volvic and Ballygowan
brands. It has also provided merchandise for a pan-European Exxon Mobil/Pepsi
promotion.
The integration and restructuring of Flexibreaks Travel Services, including the
decision to close Flexibreaks retail offering, began on flotation and has
continued. During the year, Flexibreaks has undertaken various promotional
activities for C&C, also a client of Award. The Company intends to introduce the
Flexibreaks offering to more of Award's existing clients.
In the year under review and as part of its long-standing relationship with
Buena Vista International (BVI), Award also created promotional merchandise for
a number of well-known films including 'Finding Nemo', 'Kill Bill 2' and
'National Treasure'.
Current Trading
The first quarter of the current year was disappointing and the Company has
received fewer orders for promotional merchandise than expected. This is due, in
part, to PBI changing the timing of their football promotions so that orders
which would normally have been received in December had only started to come in
in late February. In addition, Disney have released fewer films in the UK than
in previous years which has resulted in fewer orders for promotional merchandise
from BVI. Similarly some of the markets in which the Company's clients operate
have been engaging in 'price wars' which has resulted in a cut in their spend on
promotional merchandise. Business has improved in the second quarter and the
Company believes the foundations have been laid for an improved performance
during the second half year. Nevertheless the Directors expect that the results
for the first half year will be negative.
Outlook
In the first half of the 2004/05 financial year the Company has won a number of
new clients including Scottish Courage Ltd, Momentum Pictures, the British Red
Cross and Pepsi Turkey.
Award has also produced radios and watches for the hit movie, 'The Incredibles'.
Its success with movie merchandising has helped Award expand its client base and
the company has also created merchandise to support the release of "Racing
Stripes", a recently released movie from, new client, Momentum Pictures.
Promotional merchandise for films is designed and supplied many months prior to
the film's release, and so Award is currently designing and producing a number
of promotional items for films due to be released at the end of 2005 and early
2006.
AIH has been successful in securing its first promotion that integrates the
promotional travel capabilities of Flexibreaks with Award's promotional
merchandise offering. Flexibreaks has supplied holiday vouchers and Award has
developed posters, banners, game cards and prize draw boxes for a promotion
being run in public houses in Kent and South East London in association with EU
Jet and Scottish Courage. The Company is confident that these combined
merchandise and travel promotions will continue to attract current clients to
both subsidiaries and will also act as a point of difference as it expands its
client base.
The Company continues to extend its relationship with Pepsi Cola Beverages
International ("PBI"), and its bottlers throughout the world and has generated
additional revenues from the relationship during 2004. Furthermore, Award has
developed merchandise for PBI's Gatorade brand which will be used in promotions
with Exxon Mobil across Europe and also sold to bottlers in Europe, Africa and
Australasia during 2005. Award are also expecting to expand the number of
countries to which it sells Pepsi related merchandise during 2005.
The Board of AIH is confident that the business has a solid base from which it
will continue to grow. The addition of further sales staff and the
implementation of a more structured sourcing and buying function is expected to
add significant value to the Group. The growing client list and the size of
companies asking AIH to tender for business is evidence of the Company's growing
reputation as a core player in the promotional services market. AIH remains one
of the few full service merchandise, events, travel and voucher incentive
providers.
For further information please contact:
Award International Holdings Plc
Vic Bussey, Managing Director
Pete Gilbert, Sales & Marketing Director
Tony Searles, Finance Director
Tel: 01843 295555
www.awardplc.com
Tavistock Communications
Katy Pratt
Lulu Bridges
Tel: 020 7920 3150
Email: kpratt@tavistock.co.uk
Seymour Pierce
Louise Carpenter
Tel: 020 7107 8000
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE 16 MONTHS ENDED 30 SEPTEMBER 2004
Period ended
30 September
2004
#
TURNOVER 4,208,931
Cost of sales (2,793,928)
-----------
GROSS PROFIT 1,415,003
Distribution costs (376,493)
Administrative expenses (993,649)
-----------
OPERATING PROFIT 44,861
Interest receivable and similar income 5,017
Interest payable and similar charges (43,305)
-----------
PROFIT ON ORDINARY ACTIVITIES BEFORE
TAXATION 6,573
Taxation on profit on ordinary activities (39,250)
-----------
LOSS ON ORDINARY ACTIVITIES AFTER
TAXATION FOR THE FINANCIAL PERIOD (32,677)
===========
pence
BASIC LOSS PER ORDINARY SHARE (0.01)
===========
DILUTED LOSS PER ORDINARY SHARE (0.01)
===========
Turnover and operating profit are derived from acquired and continuing
operations.
There are no recognised gains and losses in the current period.
CONSOLIDATED BALANCE SHEET
FOR THE 16 MONTHS ENDED 30 SEPTEMBER 2004
As at
30 September 2004
# #
FIXED ASSETS
Tangible assets 119,317
Intangible assets 25,600
----------
144,917
CURRENT ASSETS
Stock 111,074
Debtors 2,361,962
Cash at bank and in hand 139,961
---------
2,612,997
CREDITORS: amounts falling due within one year (976,515)
---------
NET CURRENT ASSETS 1,636,482
----------
TOTAL ASSETS LESS CURRENT LIABILITIES 1,781,399
CREDITORS: Amounts falling due after (56,108)
more than one year
PROVISIONS FOR LIABILITIES (15,416)
----------
1,709,875
==========
CAPITAL AND RESERVES
Called up share capital 325,000
Share premium account 1,535,540
Merger reserve (117,988)
Profit and loss account (32,677)
----------
TOTAL EQUITY SHAREHOLDERS' FUNDS 1,709,875
==========
COMPANY BALANCE SHEET
FOR THE 16 MONTHS ENDED 30 SEPTEMBER 2004
As at
30 September 2004
# #
FIXED ASSETS
Investments 100,000
CURRENT ASSETS
Debtors 1,613,349
CREDITORS: amounts falling due within one year (19,624)
--------
NET CURRENT ASSETS 1,593,725
----------
TOTAL ASSETS LESS CURRENT LIABILITIES 1,693,725
==========
CAPITAL AND RESERVES
Called up share capital 325,000
Share premium account 1,535,540
Profit and loss account (166,815)
----------
TOTAL EQUITY SHAREHOLDERS' FUNDS 1,693,725
==========
CONSOLIDATED CASH FLOW STATEMENT
FOR THE 16 MONTHS ENDED 30 SEPTEMBER 2004
Period ended
30 September 2004
# #
NET CASH OUTFLOW FROM OPERATING ACTIVITIES (1,033,641)
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 5,017
Interest paid (43,305)
--------
Net cashflow for returns on investments and servicing
of (38,288)
finance
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of tangible fixed assets (19,866)
Proceeds from sale of tangible fixed assets 7,454
--------
Net cashflow for capital expeniture (12,412)
ACQUISITIONS AND DISPOSALS
Net overdrafts acquired with subsidiaries (768,849)
FINANCING
Issue of ordinary share capital 2,250,000
Expenses in connection with share issue (489,460)
Capital element of finance leases (39,608)
--------
Net cash inflow from financing 1,720,932
---------
DECREASE IN CASH IN PERIOD (130,258)
==========
CONSOLIDATED CASH FLOW STATEMENT
FOR THE 16 MONTHS ENDED 30 SEPTEMBER 2004
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
Decrease in cash (130,258)
Cash outflow from increase in debt (39,608)
--------
(169,866)
New HP obligations 18,453
--------
(151,413)
Net debt at 2 June 2003 -
--------
Net debt at 30 September 2004 (151,413)
=========
NOTES TO THE PRELIMINARY ANNOUNCEMENT
FOR THE 16 MONTHS ENDED 30 SEPTEMBER 2004
1. ACCOUNTING POLICIES
This preliminary announcement, which has been prepared on the basis consistent
with the Company's accounting policies, does not constitute statutory accounts
within the meaning of Section 240 of the Companies Act 1985. This is the first
accounting reference period for the Company.
The auditors have yet to sign their report on the 2004 accounts. The statutory
accounts for the period ended 30 September 2004 will be finalised on the basis
of the financial information presented by the Directors in this preliminary
announcement and will be delivered to the Registrar of Companies following the
Company's Annual General Meeting. The financial information set out in this
announcement was approved by the Board of Directors on 24 February 2005.
2. LOSS PER SHARE
Loss for the year attributable to shareholders is #32,677. This is divided by
the weighted average number of shares outstanding calculated to be 32,500,000 to
give basic loss per share of 0.101p.
For diluted loss per share, the weighted average number of shares in issue is
adjusted to assume conversion of all potentially dilutive ordinary shares. There
were no potentially dilutive shares in issue at 30 September 2004 and
consequently, the basic and diluted loss per share are the same. As the period
end and period average share price was below the exercise price of the options,
the share options were not considered to be dilutive and the basic and diluted
earnings per share were the same.
3. TAXATION
Period ended
30 September
2004
#
UK corporation tax at 19% 39,250
Deferred tax -
------
39,250
======
AWARD INTERNATIONAL LIMITED
This table is included for illustrative purposes only and will not form part of
the audited Report and Accounts for Award International Holdings plc.
Year end: 30 September 2004 Year end 30 September 2003
# #
Turnover 3,745,945 3,506,167
Gross profit 1,302,579 1,282,491
PBIT (and exceptionals) 169,603 257,163
Exceptional item (39,644) (113,746)
Profit after tax 79,239 86,409
The exceptional item of #39,644 (2003: #113,746) relates to a provision against
the sum due from Flexibreaks Limited, a wholly owned subsidiary of Award
International Limited.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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