TIDMPRO
RNS Number : 3025K
Progressive Digital Media Group PLC
29 July 2013
29 July 2013
Progressive Digital Media Group Plc
Unaudited Interim Report For The Six Months Ended 30 June
2013
Progressive Digital Media Group Plc ('the Group') produces
premium business information which enables organisations to gain
competitive advantage by providing unique, high quality information
and services across multiple platforms.
Highlights
Strong first half results, a robust balance sheet and continued
investment provide the foundation for further growth.
Key achievements in the six months
-- Business Intelligence continues to grow
-- Revenue and earnings growth across multiple channels
-- Cash and bank facilities to fund future growth
-- Normalisation of capital structure through share
consolidation and re-capitalisation of reserves
Financial performance from continuing operations
-- EBITDA (1) increased by 33.9% to GBP4.8m (2012: GBP3.6m)
-- Adjusted EBITDA (2) increased by 23.5% to GBP5.4m (2012: GBP4.3m)
-- Adjusted EBITDA Margin (2) increased to 18.8% (2012: 16.8%)
-- Group revenue increased by 10.3% to GBP28.6m (2012: GBP25.9m)
-- Reported profit before tax grew by 77.2% to GBP3.5m (2012: GBP2.0m)
Our Business
-- Premium business information services covering the Consumer and Technology markets
-- A scalable asset base
-- Significant contracted and visible revenue streams
-- Globally exploitable business model
-- High gross margin product
Mike Danson, Chairman of Progressive Digital Media Group Plc,
commented:
"Our first half results reflect good performances across
multiple channels. We are increasingly confident that our focus on
building premium Consumer and Technology Business Information
services will provide the basis for continued long-term profitable
growth. With this in mind, we are accelerating our investment in
our sales force, product offering, content and delivery platforms
in the near to medium-term."
Note 1: EBITDA: Earnings before interest, tax, depreciation,
amortisation and impairment. Includes a charge of GBP0.4 million
for share based payments (2012: GBP0.5 million).
Note 2: Adjusted EBITDA: Earnings before interest, tax,
depreciation, amortisation, impairment, and share based payments,
and adjusted for costs associated with derivatives, acquisitions,
integration and restructure of the Group. Adjusted EBITDA Margin is
defined as Adjusted EBITDA as a percentage of Revenue.
Enquiries:
Progressive Digital Media Group Plc 0207 936 6400
Mike Danson, Chairman
Simon Pyper, Managing Director
N+1 Singer 0207 496 3000
James Maxwell
Nick Donovan
Hudson Sandler 0207 796 4133
Nick Lyon
CHAIRMAN'S REVIEW
Our first half results reflect good performances across multiple
channels. We are increasingly confident that our focus on building
premium Consumer and Technology Business Information services will
provide the basis for continued long-term profitable growth. With
this in mind, we are accelerating our investment in our sales
force, product offering, content and delivery platforms in the near
to medium-term.
Along with organic growth, a key element of our strategy is
growth through acquisition. A good example of acquiring a strategic
fit business is Kable (acquired July 2012), which is a subscription
based business and one of the UK's leading providers of technology
expenditure intelligence. Furthermore, Kable provides an
opportunity through organic investment and acquisition to grow into
adjacent markets and new geographies. We have reviewed a number of
other companies but they have not met our acquisition criteria.
We have performed well against the key objectives that we have
set for the year:
-- We have continued to invest in our Business Information
services and products, launching two new Consumer and Technology
Intelligence Centers
-- We have expanded our geographic footprint, establishing sales teams in Singapore and China
-- Margin has improved with Adjusted EBITDA margin increasing by
2% to 18.8% and EBITDA margin up 3% to 16.9%
We are a focused business with a clear strategy and these
results are just another step in the right direction. Good progress
in the first six months of the year means that we remain confident
of our full year results.
Group Performance
Group revenues increased by 10.3% to GBP28.6m (2012: GBP25.9m)
with a good performance from Business Intelligence which now
accounts for 57.1% of Group revenues (2012: 52.0%).
Adjusted EBITDA grew 23.5% to GBP5.4m (2012: GBP4.3m), with
Adjusted EBITDA margin increasing by 2.0% to 18.8% (2012:
16.8%).
Profit before tax increased by GBP1.5m to GBP3.5m (2012:
GBP2.0m), which is after a GBP0.4m non-cash charge for share based
payments following the introduction in January 2011 of the
long-term incentive plan for senior management (2012: GBP0.5m).
Business Information
Business Information, which includes Business Intelligence and
Events and Marketing, now accounts for almost 98% of Group revenues
and earnings. Business Information revenues grew by 11.3% in the
first half (over the corresponding period in 2012) with:
-- Business Intelligence at +20.7%, and
-- Events and Marketing at 0.0%
Events and Marketing revenues were adversely impacted by the
rephasing of a number of events from the first half of last year to
the second half of this year.
Financial review
Short-term borrowing, which represents the outstanding amount
due on the term loan issued by the Royal Bank of Scotland, has
fallen to GBP0.5m (2012: GBP3.5m). Long-term borrowing was GBP5.8m
(2012: GBP6.2m) and represents the revolving credit facility issued
by the Royal Bank of Scotland. Net cash at 30 June 2013 was GBP6.7m
(2012: GBP5.3m). Total equity has increased to GBP29.6m (2012:
GBP23.1m).
The Group has prepared the accounts on a going concern basis
and, based on current forecasts, the Group will meet its day-to-day
working capital requirements from operating cash flows and existing
banking facilities.
Outlook and prospects
We have had a good first half with revenue and EBITDA growth
ahead of last year and in line with expectations. The performance
of Business Intelligence provides the impetus for the second half
of the year. Whilst we expect the economic climate to remain
largely unchanged, we are confident that our strategy is sound and
that we will continue to benefit from our investment in our people,
our products and our delivery platforms. We remain confident of our
full year results.
Mike Danson
Chairman
Independent review report to the members of Progressive Digital
Media Group Plc
Introduction
We have reviewed the condensed set of financial statements in
the half-yearly financial report of Progressive Digital Media Group
Plc for the six months ended 30 June 2013 which comprises the
consolidated income statement, the consolidated statement of
comprehensive income, the consolidated statement of financial
position, the consolidated statement of changes in equity and the
consolidated statement of cash flows. We have read the other
information contained in the half yearly financial report which
comprises the Chairman's review and considered whether it contains
any apparent misstatements or material inconsistencies with the
information in the condensed set of financial statements.
This report is made solely to the company's members, as a body,
in accordance with International Standard on Review Engagements (UK
and Ireland) 2410, 'Review of Interim Financial Information
performed by the Independent Auditor of the Entity'. Our review
work has been undertaken so that we might state to the company's
members those matters we are required to state to them in an
independent review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company's members as a
body, for our review work, for this report, or for the conclusion
we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors.
As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with International Financial
Reporting Standards as adopted by the European Union. The condensed
set of financial statements included in this half-yearly financial
report has been prepared in accordance with International
Accounting Standard 34, 'Interim Financial Reporting', as adopted
by the European Union.
Our responsibility
Our responsibility is to express a conclusion on the condensed
set of financial statements in the half-yearly financial report
based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, 'Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity'. A review of interim financial information consists
of making enquiries, primarily of persons responsible for financial
and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing
(UK and Ireland) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
June 2013 is not prepared, in all material respects, in accordance
with International Accounting Standard 34, 'Interim Financial
Reporting', as adopted by the European Union.
GRANT THORNTON UK LLP
AUDITOR
London
29 July 2013
Consolidated income statement
Notes 6 months 6 months Year to
to 30 to 30 31 December
June 2013 June 2012 2012
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Continuing operations
Revenue 3 28,565 25,895 53,902
Cost of sales (16,887) (15,555) (31,573)
--------------------------------------------- ------ ----------- ----------- -------------
Gross profit 11,678 10,340 22,329
Distribution costs (495) (463) (914)
Administrative costs (6,592) (6,513) (14,246)
Other expenses 4 (972) (1,078) (2,399)
--------------------------------------------- ------ ----------- ----------- -------------
Operating profit 3,619 2,286 4,770
Analysed as:
Adjusted EBITDA(2) 5,360 4,340 9,090
Items associated with acquisitions,
restructure of the group and share
based payments 4 (562) (804) (1,694)
Other adjusting items 4 18 61 36
--------------------------------------------- ------ ----------- ----------- -------------
EBITDA(1) 4,816 3,597 7,432
Amortisation (900) (939) (1,930)
Depreciation (297) (372) (732)
--------------------------------------------- ------ ----------- ----------- -------------
Operating profit 3,619 2,286 4,770
--------------------------------------------- ------ ----------- ----------- -------------
Finance costs (132) (318) (479)
Profit before tax 3,487 1,968 4,291
Income tax (charge)/credit (1,091) (442) 476
--------------------------------------------- ------ ----------- ----------- -------------
Profit for the period from continuing
operations 2,396 1,526 4,767
Loss for the period from discontinued
operations 8 (42) (1,477) (1,814)
Profit for the period 2,354 49 2,953
--------------------------------------------- ------ ----------- ----------- -------------
Attributable to:
Equity holders of the parent 2,342 26 2,935
Non-controlling interest 12 23 18
--------------------------------------------- ------ ----------- ----------- -------------
Earnings per share attributable to
equity holders from continuing operations: 6
Basic earnings per share (pence) 3.20 2.50 7.05
Diluted earnings per share (pence) 3.00 2.33 6.57
Basic and diluted loss per share from
discontinued operations (pence) (0.06) (2.46) (2.69)
Total basic earnings per share (pence) 3.14 0.04 4.36
Total diluted earnings per share (pence) 2.95 0.04 4.06
--------------------------------------------- ------ ----------- ----------- -------------
The accompanying notes form an integral part of this financial
report.
(1) EBITDA is defined as earnings before interest, tax,
depreciation, amortisation and impairment.
(2) We define Adjusted EBITDA as EBITDA adjusted for costs
associated with acquisitions, integration, impact of foreign
exchange contracts, shared based payments and restructure of the
Group. We present Adjusted EBITDA as additional information because
we understand that it is a measure used by certain investors and
because it is used as the measure of segment profit or loss.
However, other companies may present Adjusted EBITDA differently.
EBITDA and Adjusted EBITDA are not measures of financial
performance under IFRS and should not be considered as an
alternative to operating profit or as a measure of liquidity or an
alternative to net income as indicators of our operating
performance or any other measure of performance derived in
accordance with IFRS.
Consolidated statement of comprehensive income
6 months 6 months Year to
to to 31 December
30 June 30 June 2012
2013 2012 Audited
Unaudited Unaudited
GBP000s GBP000s GBP000s
Profit for the period 2,354 49 2,953
Other comprehensive (loss)/ income
Translation of foreign entities (8) 18 18
------------------------------------------- ----------- ----------- -------------
Other comprehensive (loss)/ income,
net of tax (8) 18 18
------------------------------------------- ----------- ----------- -------------
Total comprehensive income for the period 2,346 67 2,971
------------------------------------------- ----------- ----------- -------------
Attributable to
Equity holders of the parent 2,334 44 2,953
Non-controlling interest 12 23 18
------------------------------------------- ----------- ----------- -------------
The accompanying notes form an integral part of this financial
report.
Consolidated statement of financial position
Notes 30 June 30 June 31 December
2013 2012 2012
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Non-current assets
Property, plant and equipment 997 1,373 1,164
Intangible assets 25,476 24,192 26,383
Deferred tax assets 1,964 1,041 2,327
----------------------------------- ------ ----------- ----------- ------------
28,437 26,606 29,874
----------------------------------- ------ ----------- ----------- ------------
Current assets
Inventories 90 324 180
Trade and other receivables 19,229 17,944 17,354
Short-term derivative assets - 7 -
Cash and cash equivalents 13,005 14,995 12,497
----------------------------------- ------ ----------- ----------- ------------
32,324 33,270 30,031
----------------------------------- ------ ----------- ----------- ------------
Total assets 60,761 59,876 59,905
----------------------------------- ------ ----------- ----------- ------------
Current liabilities
Trade and other payables (23,310) (24,666) (25,274)
Short-term borrowings (500) (3,500) (500)
Current tax payable (774) (430) (419)
Short-term derivative liabilities - - (18)
Short-term provisions (594) (843) (665)
----------------------------------- ------ ----------- ----------- ------------
(25,178) (29,439) (26,876)
----------------------------------- ------ ----------- ----------- ------------
Non-current liabilities
Long-term provisions (190) (863) (679)
Deferred tax liabilities - (257) -
Long-term borrowings (5,809) (6,226) (5,767)
(5,999) (7,346) (6,446)
----------------------------------- ------ ----------- ----------- ------------
Total liabilities (31,177) (36,785) (33,322)
----------------------------------- ------ ----------- ----------- ------------
Net assets 29,584 23,091 26,583
----------------------------------- ------ ----------- ----------- ------------
Equity
Share capital 5 153 153 153
Share premium account 5 - 71,368 71,368
Other reserve (37,128) (37,128) (37,128)
Foreign currency translation
reserve 17 25 25
Special reserve 48,422 - -
Retained profit/ (loss) 18,009 (11,438) (7,942)
----------------------------------- ------ ----------- ----------- ------------
Equity attributable to equity
holders of the parent 29,473 22,980 26,476
Non-controlling interest 111 111 107
----------------------------------- ------ ----------- ----------- ------------
Total equity 29,584 23,091 26,583
----------------------------------- ------ ----------- ----------- ------------
The accompanying notes form an integral part of this financial
report.
Consolidated statement of changes in equity (unaudited)
Share Share Other Foreign Special Retained Equity Non-controlling Total
capital premium reserve currency reserve profit/ attributable interest equity
account translation (loss) to equity
reserve holders
of the
parent
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance at 1
January
2012 207 44,257 (37,128) 7 - (12,010) (4,667) 97 (4,570)
Profit for the
period - - - - - 26 26 23 49
Other -
comprehensive
income:
Translation of
foreign
entities - - - 18 - - 18 - 18
--------------- -------- --------- --------- ------------ -------- --------- ------------- ---------------- --------
Total
comprehensive
income for
the period - - - 18 - 26 44 23 67
--------------- -------- --------- --------- ------------ -------- --------- ------------- ---------------- --------
Transactions
with
owners:
Issue of share
capital 15 27,042 - - - - 27,057 - 27,057
Transfer
between
reserves (69) 69 - - - - - - -
Dividends - - - - - - - (9) (9)
Share based
payments - - - - - 508 508 - 508
Deferred tax
on share
based
payments
recognised
in equity - - - - - 38 38 - 38
--------------- -------- --------- --------- ------------ -------- --------- ------------- ---------------- --------
Balance at 30
June
2012 153 71,368 (37,128) 25 - (11,438) 22,980 111 23,091
Profit/ (loss)
for
the period - - - - - 2,909 2,909 (4) 2,905
Other
comprehensive
income:
Translation of - - - - - - - - -
foreign
entities
--------------- -------- --------- --------- ------------ -------- --------- ------------- ---------------- --------
Total
comprehensive
income/
(loss) for
the period - - - - - 2,909 2,909 (4) 2,905
--------------- -------- --------- --------- ------------ -------- --------- ------------- ---------------- --------
Transactions
with
owners:
Share based
payment - - - - - 321 321 - 321
Deferred tax
on share
based
payments
recognised
in equity - - - - - 266 266 - 266
--------------- -------- --------- --------- ------------ -------- --------- ------------- ---------------- --------
Balance at 31
December
2012 153 71,368 (37,128) 25 - (7,942) 26,476 107 26,583
Profit for the
period - - - - - 2,342 2,342 12 2,354
Other
comprehensive
income:
Translation of
foreign
entities - - - (8) - - (8) - (8)
Total
comprehensive
income for
the period - - - (8) - 2,342 2,334 12 2,346
--------------- -------- --------- --------- ------------ -------- --------- ------------- ---------------- --------
Transactions
with
owners:
Transfer
between
reserves - 25 - - - (25) - - -
Capital
reduction - (71,393) - - 48,422 22,971 - - -
Dividends - - - - - - - (8) (8)
Share based
payments - - - - - 407 407 - 407
Deferred tax
on share
based
payments
recognised
in equity - - - - - 256 256 - 256
--------------- -------- --------- --------- ------------ -------- --------- ------------- ---------------- --------
Balance at 30
June
2013 153 - (37,128) 17 48,422 18,009 29,473 111 29,584
--------------- -------- --------- --------- ------------ -------- --------- ------------- ---------------- --------
The accompanying notes form an integral part of this financial
report.
Consolidated statement of cash flows
6 months 6 months Year to
to 30 June to 30 June 31 December
2013 2012 2012
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Continuing operations
Cash flows from operating activities
Profit for the period 2,396 1,526 4,767
Adjustments for:
Depreciation 297 372 732
Amortisation 900 939 1,930
Finance expense 132 318 479
Taxation expense recognised in
profit or loss 1,091 442 (476)
Share option charge 407 508 829
Increase in trade and other receivables (1,875) (1,742) (1,117)
Decrease/ (increase) in inventories 90 (245) (101)
Decrease in trade and other payables (2,057) (525) (23)
Revaluation of derivatives (18) (61) (36)
Movement in provisions (560) (272) (634)
------------------------------------------- ------------ ------------ -------------
Cash generated from operations 803 1,260 6,350
Interest paid (82) (258) (408)
Income taxes paid (40) (19) (103)
------------------------------------------- ------------ ------------ -------------
Net cash from operating activities 681 983 5,839
Cash flows from investing activities
Acquisition of Kable - - (2,300)
Purchase of property, plant and
equipment (108) (47) (207)
Purchase of intangible assets (15) (150) (271)
------------------------------------------- ------------ ------------ -------------
Net cash used in investing activities (123) (197) (2,778)
Cash flows from financing activities
Proceeds from capitalisation of
debt - 8,000 8,000
Proceeds from placement of shares - 19,057 19,057
Repayment of long-term borrowings - (13,769) (17,269)
Dividends paid to non-controlling
interests (8) (8) (8)
------------
Net cash (used)/ generated from
financing activities (8) 13,280 9,780
------------------------------------------- ------------ ------------ -------------
Net increase in cash and cash equivalents
from continuing operations 550 14,066 12,841
Net decrease in cash and cash equivalents
from discontinued operations (42) (33) (1,306)
------------------------------------------- ------------ ------------ -------------
Net increase in cash and cash equivalents 508 14,033 11,535
Cash and cash equivalents at beginning
of period 12,497 962 962
------------------------------------------- ------------ ------------ -------------
Cash and cash equivalents at end
of period 13,005 14,995 12,497
------------------------------------------- ------------ ------------ -------------
The accompanying notes form an integral part of this financial
report.
Notes to the interim financial statements
1. General information
Nature of operations
The principal activity of Progressive Digital Media Group Plc
and its subsidiaries (together 'the Group') is the provision of
premium business information, research services and marketing
solutions for senior level decision makers.
Progressive Digital Media Group Plc ('the Company') is a company
incorporated in the United Kingdom and listed on the Alternative
Investment Market (AIM). The registered office of the Company is
John Carpenter House, John Carpenter Street, London, EC4Y 0AN. The
registered number of the Company is 3925319.
Basis of preparation
These interim financial statements are for the six months ended
30 June 2013. They have been prepared in accordance with IAS 34,
Interim Financial Reporting as adopted in the European Union. They
do not include all of the information required for full annual
financial statements, and should be read in conjunction with
Progressive Digital Media Group Plc's audited financial statements
for the year ended 31 December 2012.
The financial information for the year ended 31 December 2012
set out in this interim report does not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31
December 2012 have been filed with the Registrar of Companies and
can be found on the Group's website
www.progressivedigitalmedia.com. The auditor's report on those
financial statements was unqualified and did not contain statements
under Section 498(2) or Section 498(3) of the Companies Act
2006.
These interim financial statements have been prepared under the
historical cost convention as modified by the revaluation of
derivative financial instruments. These interim financial
statements have been prepared in accordance with the accounting
policies detailed in the Group's financial statements for the year
ended 31 December 2012. The accounting policies have been applied
consistently throughout the Group for the purposes of preparation
of these interim financial statements.
The interim financial statements are presented in Pounds
Sterling (GBP), which is also the functional currency of the
Company. These interim financial statements have been approved for
issue by the Board of Directors.
Critical accounting estimates and judgements
The Group makes estimates and assumptions regarding the future.
Estimates and judgements are continually evaluated based on
historical experience and other factors, including expectations of
future events that are believed to be reasonable under the
circumstances.
In the future, actual experience may deviate from these
estimates and assumptions. The estimates and assumptions that have
a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial period
relate to property provisions, valuation of acquired intangible
assets, provisions for bad debt, share based payments and the
carrying value of goodwill and other intangibles in the statement
of financial position.
Going concern
The Group has closing cash of GBP13.0 million as at 30 June 2013
and net cash of GBP6.7 million (2012: GBP5.3 million), being cash
and cash equivalents less short and long-term borrowings. The Group
also has an overdraft facility of GBP3 million, issued by the Royal
Bank of Scotland, which was not utilised as at 30 June 2013.
The Group has outstanding loans of GBP6.5 million with the Royal
Bank of Scotland. Of the outstanding loans, GBP0.5 million is due
for repayment in less than one year and as such has been classified
accordingly within the financial statements.
The Group considers the current cash balance, cash flow
projections and the existing financing facilities to be adequate to
meet short-term commitments. The Directors have a reasonable
expectation that there are no material uncertainties that cast
significant doubt about the Group's ability to continue as a going
concern. Accordingly, the Group has prepared the interim financial
statements on a going concern basis.
Notes to the interim financial statements (continued)
2. Accounting policies
This interim report has been prepared based on the accounting
policies detailed in the Group's financial statements for the year
ended 31 December 2012.
3. Segment analysis
The principal activity of the Group is the provision of premium
business information whose content is sold through a variety of
platforms.
Following the discontinuation of the B2C email marketing
business on 1 April 2012, the Group now considers the business as a
single operating segment. IFRS 8 "Operating Segments" requires the
segment information presented in the financial statements to be
that which is used internally by the chief operating decision maker
to evaluate the performance of the business and to decide how to
allocate resources. The Group has identified the Board as its chief
operating decision maker.
The Group is structured and managed centrally, with resources
allocated to deliver content. Business information is therefore
considered to be the operating segment of the Group.
The Group profit or loss is reported to the Board on a monthly
basis and consists of earnings before interest, tax, depreciation,
amortisation, central overheads and other adjusting items. A
reconciliation of this measure to profit before tax is shown
below:
6 months 6 months Year to
to 30 June to 30 June 31 December
2013 2012 2012
GBP000s GBP000s GBP000s
Segment contribution 9,702 9,417 18,857
Central overheads (4,342) (5,077) (9,767)
----------------------------------- ------------ ------------ -------------
Adjusted EBITDA 5,360 4,340 9,090
Other expenses (see note 4) (972) (1,078) (2,399)
Depreciation (297) (372) (732)
Amortisation (472) (604) (1,189)
Finance costs (132) (318) (479)
Profit before tax from continuing
operations 3,487 1,968 4,291
----------------------------------- ------------ ------------ -------------
Central overheads consists of corporate, HR, finance, IT and
facilities expenses.
Geographical analysis
From continuing operations
6 months to June 2013 UK Europe Rest of World Total
GBP000s GBP000s GBP000s GBP000s
Revenue from external customers 14,017 8,497 6,051 28,565
--------------------------------- -------- -------- -------------- --------
6 months to June 2012 UK Europe Rest of World Total
GBP000s GBP000s GBP000s GBP000s
Revenue from external customers 12,617 7,882 5,396 25,895
--------------------------------- -------- -------- -------------- --------
Year ended 31 December 2012 UK Europe Rest of World Total
GBP000s GBP000s GBP000s GBP000s
Revenue from external customers 17,622 20,007 16,273 53,902
--------------------------------- -------- -------- -------------- --------
Notes to the interim financial statements (continued)
4. Other expenses
6 months to 6 months to Year to 31
30 June 2013 30 June 2012 December
Unaudited Unaudited 2012
Audited
GBP000s GBP000s GBP000s
Redundancy and restructuring 162 301 908
Property related provisions (362) (51) (166)
Exceptional property costs - - 75
Deal costs 34 46 31
Revaluation of currency collar (18) (61) (36)
Share option expense 407 508 829
Amortisation of acquired intangibles 428 335 741
M&A costs - - 17
Corporate restructuring 233 - -
Exceptional legal costs 88 - -
972 1,078 2,399
--------------------------------------------- -------- --------------- -------------
5. Equity
Share capital
At the Annual General Meeting on 24 April 2013, shareholders
approved the consolidation and sub-division of the Group's ordinary
shares, which took effect on 25 April 2013.
Ordinary shares were consolidated on the basis of 1 consolidated
ordinary share of 10 pence for every 1,000 existing ordinary shares
of 0.01 pence each, immediately followed by a sub-division of the
consolidated ordinary shares on the basis of 140 new ordinary
shares for each consolidated ordinary share. The overall result of
the consolidation and sub-division was that every 1,000 existing
ordinary shares of 0.01 pence were consolidated and sub-divided
into 140 new ordinary shares of 1/14(th) pence.
Following the consolidation and sub-division of shares, the
number of share options and their comparatives have been restated
accordingly in note 7.
Allotted, called up and
fully paid:
30 June 2013 30 June 2012 31 December
2012
No'000 GBP'000 No'000 GBP'000 No'000 GBP'000
Ordinary shares at 1 January
(GBP0.0001) 532,048 53 376,492 107 376,492 107
Issued in the period - - 155,556 15 155,556 15
Transfer to share premium - - - (69) - (69)
Ordinary share capital and
sub-division (532,048) (53) - - - -
------------------------------ ---------- -------- -------- -------- -------- --------
Ordinary shares (GBP0.0001)
c/f - - 532,048 53 532,048 53
------------------------------ ---------- -------- -------- -------- -------- --------
Ordinary shares at 1 January - - - - - -
(1/14(th) pence)
Ordinary share capital and
sub-division 74,487 53 - - - -
------------------------------ ---------- -------- -------- -------- -------- --------
Ordinary shares c/f (1/14th
pence) 74,487 53 - - - -
------------------------------ ---------- -------- -------- -------- -------- --------
Deferred shares of GBP1.00
each 100 100 100 100 100 100
---------------------------- ------- ---- -------- ---- -------- ----
Total allotted, called
up and fully paid 74,587 153 532,148 153 532,148 153
---------------------------- ------- ---- -------- ---- -------- ----
Notes to the interim financial statements (continued)
Capital management
The Group's capital management objectives are:
-- To ensure the Group's ability to continue as a going concern
-- To fund future growth and provide an adequate return to
shareholders and, when appropriate, distribute dividends
In order to enable the directors to pay dividends in the future
when considered appropriate, at the Annual General Meeting on 24
April 2013 shareholders approved the cancellation of the parent
company's share premium account (the "Capital Reduction"). The
Capital Reduction took effect on 23 May 2013 following confirmation
by the Court. By way of undertaking to the Court, the Company has
constituted a special reserve for the protection of its creditors
as at the effective date of the Capital Reduction.
The table shows the capital reduction transactions in the parent
company:
Share Share Other Share based Retained Special Total
Capital premium Reserve Payments loss reserve Equity
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------------- --------- --------- ----------- -------------- --------- ----------- ----------
Balance at 1 January
2013 153 71,393 7,174 1,986 (22,971) - 57,735
Capital reduction - (71,393) - - 22,971 48,422 -
Loss to 30 June
2013 - - - - (1,250) - (1,250)
Share based payment - - - 407 - - 407
---------------------- --------- --------- ----------- -------------- --------- ----------- ----------
Balance at 30 June
2013 153 - 7,174 2,393 (1,250) 48,422 56,892
The Company has two classes of shares. The ordinary shares carry
no right to fixed income and each share carries the right to one
vote at general meetings of the Company.
The deferred shares do not confer upon the holders the right to
receive any dividend, distribution or other participation in the
profits of the Company. The deferred shares do not entitle the
holders to receive notice of or to attend and speak or vote at any
general meeting of the Company. On distribution of assets on
liquidation or otherwise, the surplus assets of the Company
remaining after payments of its liabilities shall be applied first
in repaying to holders of the deferred shares the nominal amounts
and any premiums paid up or credited as paid up on such shares, and
second the balance of such assets shall belong to and be
distributed among the holders of the ordinary shares in proportion
to the nominal amounts paid up on the ordinary shares held by them
respectively.
There are no specific restrictions on the size of a holding nor
on the transfer of shares, which are both governed by the general
provisions of the Articles of Association and prevailing
legislation. The Directors are not aware of any agreements between
holders of the Company's shares that may result in restrictions on
the transfer of securities or on voting rights.
No person has any special rights of control over the Company's
share capital and all its issued shares are fully paid.
With regard to the appointment and replacement of Directors, the
Company is governed by its Articles of Association, the principles
of the UK Corporate Governance Code, the Companies Acts and related
legislation. The Articles themselves may be amended by special
resolution of the shareholders. The powers of Directors are
described in the Board Terms of Reference, copies of which are
available on request.
Notes to the interim financial statements (continued)
6. Earnings per share
The calculation of the basic earnings per share is based on the
earnings attributable to ordinary shareholders of the parent
company divided by the weighted average number of shares in issue
during the period. Following the consolidation and sub-division of
shares, as discussed in note 5, the earnings per share calculations
and their comparatives have been restated.The Group also has a
share options scheme in place and therefore the Group has
calculated the dilutive effect of these options.
The below table shows earnings per share for both continuing and
discontinued operations:
6 months
to
30 June
2013
Unaudited
6 months
to Year to 31
30 June December
2012 2012
Unaudited Audited
GBP000s GBP000s GBP000s
Continuing operations
Basic
Profit for the period from continuing
operations (GBP'000s) 2,396 1,526 4,767
Less minority interest (12) (23) (18)
Profit for the period attributable
to ordinary shareholders of the parent
company (GBP'000s) 2,384 1,503 4,749
Weighted average number of shares (000s) 74,487 60,048 67,327
Basic earnings per share (pence) 3.20 2.50 7.05
Diluted
Profit for the period from continuing
operations (GBP'000s) 2,396 1,526 4,767
Less minority interest (12) (23) (18)
Profit for the period attributable
to ordinary shareholders of the parent
company (GBP'000s) 2,384 1,503 4,749
Weighted average number of shares (000s) 79,359 64,639 72,258
Diluted earnings per share (pence) 3.00 2.33 6.57
Discontinued operations
Basic
Loss for the period attributable to
ordinary shareholders of the parent
company from discontinued (GBP'000s) (42) (1,477) (1,814)
Weighted average number of shares (000s) 74,487 60,048 67,327
Basic loss per share (pence) (0.06) (2.46) (2.69)
------------------------------------------ ------------ ----------- -----------
Total
Basic
Profit for the period attributable
to ordinary shareholders of the parent
company (GBP'000s) 2,342 26 2,935
Weighted average number of shares (000s) 74,487 60,048 67,327
Basic earnings per share (pence) 3.14 0.04 4.36
Diluted
Profit for the period attributable
to ordinary shareholders of the parent
company (GBP'000s) 2,342 26 2,935
Weighted average number of shares (000s) 79,359 64,639 72,258
Diluted earnings per share (pence) 2.95 0.04 4.06
------------------------------------------ ------------ ----------- -----------
The Group has a share options scheme in place, the effect of
which is anti-dilutive on the earnings per share calculation for
discontinued operations. Therefore, in accordance with IAS 33 no
adjustment has been made to the basic loss per share on
discontinued operations.
Notes to the interim financial statements (continued)
7. Share based payments
The Group created a share option scheme during the year ended 31
December 2010 and granted the first options under the scheme on 1
January 2011 to certain senior employees. Each option granted
converts to one ordinary share on exercise. A participant may
exercise their options (subject to employment conditions) at any
time during a prescribed period from the vesting date to the date
the option lapses. For these options to be exercised the Group's
earnings before interest, taxation, depreciation and amortisation,
as adjusted by the Remuneration Committee for significant or
one-off occurrences, must exceed certain targets. The fair values
of options granted were determined using the Black-Scholes model
and takes into account factors specific to the share option plan,
such as the vesting period.
Following the consolidation and sub-division of shares, as
discussed in note 5, the number of share options and their
comparatives has been restated.
The following assumptions were used in the valuation:
Award Tranche Award 1 Award 2 Award 3
------------------------------- ----------- ---------- ------------
Grant date 1 January 1 August 1 May 2012
2011 2011
Fair value of share price GBP1.09 GBP1.32 GBP1.87
at date of grant
Volatility 15% 0% 0%
Weighted average of remaining
contractual life 4.67 4.67 3.67
The volatility assumption is based upon management's expectation
over the number of options that will lapse over the vesting period.
The assumptions were determined when the scheme was set up in 2011
and are reviewed annually. Management believe the current
assumptions to be reasonable based upon rate of lapsed options.
The total charge recognised for the scheme during the six months
to 30 June 2013 was GBP407,000 (2012: GBP508,000). The awards of
the scheme are settled with ordinary shares of the Company. No
options were exercised during the six months to 30 June 2013.
Option price Number of
(pence) options
31 December 2012 1/14(th) 4,931,150
Granted 1/14(th) -
Forfeited 1/14(th) (58,450)
------------------ -------------- ----------
30 June 2013 1/14(th) 4,872,700
------------------ -------------- ----------
Notes to the interim financial statements (continued)
8. Discontinued operations
On 1 April 2012 the Group made the decision to close the TMN
email marketing business unit, including the TMN, EDR and TAPPS
businesses. The TMN email marketing division formed part of the
Group's B2C Digital Marketing division. Therefore, pursuant to the
provisions of IFRS 5 the operation has been classified as
discontinued.
a) The results of the discontinued operation are as follows;
6 months 6 months Year to
to 30 to 30 31 December
June 2013 June 2012 2012
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Discontinued operations
Revenue - (344) (566)
Cost of sales (1) (560) (675)
--------------------------------------------- ----------- ----------- -------------
Gross loss (1) (904) (1,241)
Administrative costs (41) (248) (737)
Other expenses - (325) (125)
--------------------------------------------- ----------- ----------- -------------
Operating loss from discontinued operations (42) (1,477) (2,103)
Finance costs - - (6)
--------------------------------------------- ----------- ----------- -------------
Loss before tax from discontinued
operations (42) (1,477) (2,109)
Income tax credit - - 295
--------------------------------------------- ----------- ----------- -------------
Loss for the period from discontinued
operations (42) (1,477) (1,814)
--------------------------------------------- ----------- ----------- -------------
b) Loss before tax
6 months 6 months Year to
to 30 to 30 31 December
June 2013 June 2012 2012
Unaudited Unaudited Audited
This is arrived after charging: GBP000s GBP000s GBP000s
Depreciation - 14 14
Amortisation of acquired intangible
assets - 25 25
Impairment of intangible asset - 100 100
------------------------------------- ------------ ----------- -------------
c). Cash flows from discontinued operations
6 months 6 months Year to
to 30 to 30 31 December
June 2013 June 2012 2012
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Cash outflows from operating activities (42) (33) (1,306)
Notes to the interim financial statements (continued)
9. Related party transactions
Mike Danson, Progressive Digital Media Group's Chairman, owns
67.72% of the Company's ordinary shares as at 30 June 2013. Mike
Danson owns a number of businesses that interact with Progressive
Digital Media Group. A programme is underway to reduce related
party transactions. The principal transactions are as follows:
Accommodation
Progressive Digital Media Group rents two properties from Estel
Property Investments, a company owned by Mike Danson. The total
rental expense in relation to the buildings owned by Estel Property
Investments for the 6 months to 30 June 2013 was GBP464,300 (2012:
GBP842,817 net of a recharge of GBP283,983).
Corporate support services
Corporate support services are provided to other companies owned
by Mike Danson, principally finance, human resources, IT and
facilities management. These are recharged to companies that
consume these services based on specific drivers of costs, such as
proportional occupancy of buildings for facilities management,
headcount for human resources services, revenue or gross profit for
finance services and headcount for IT services. The recharge made
from Progressive Digital Media Group to these companies for the 6
months to 30 June 2013 was GBP166,900 (2012: GBP749,800).
Revenue License Agreement
Progressive Digital Media Group has entered into a licensing
agreement with World Marketing Intelligence Ltd ("WMI"), wholly
owned by Mike Danson, to sell WMI's Construction Intelligence
Center ("CIC") content through the Group's own websites. Under the
terms of the agreement, 20% of revenue generated from the sale of
CIC content is payable to WMI. The total revenue recognised in
Progressive Digital Media Group for the 6 months to 30 June 2013 is
GBP0.5 million (2012: GBP0.4 million).
Amounts outstanding
The Group has taken advantage of the exemptions contained within
IAS 24 - Related Party Disclosures from the requirement to disclose
transactions between Group companies as these have been eliminated
on consolidation.
The amounts outstanding for other related parties were:
30 June 30 June 31 December
2013 2012 2012
GBP'000 GBP'000 GBP'000
Global Data Ltd (107) (69) (99)
Global Data Publications Inc 46 - 28
World Marketing Intelligence Ltd 1,074 4,477 2,250
New Statesman Ltd 2,460 2,114 2,337
Progressive Media International Ltd 485 410 490
Estel Property Investments Ltd (5,236) (5,092) (5,409)
Elite Ltd 795 428 522
Spears Ltd 267 204 276
Progressive Customer Publishing Ltd 628 145 367
Progressive Media Publishing Ltd 2 2 2
Progressive Innovations Ltd (3) (3) (3)
Progressive Global Media Ltd 13 - 13
Progressive Media UK Ltd 145 76 -
------------------------------------- -------- -------- ------------
569 2,692 774
------------------------------------- -------- -------- ------------
The company has right of set off over these amounts.
Advisers
Company Secretary
Stephen Bradley
Head Office and Registered Office
John Carpenter House
John Carpenter Street
London
EC4Y 0AN
Tel: + 44 (0) 20 7936 6400
Nominated Adviser and Broker
N+1 Singer
One Bartholomew Lane
London
EC2N 2AX
Auditor
Grant Thornton UK LLP
Grant Thornton House
Melton Street
London
NW1 2EP
Registrars
Capita Registrars Limited
Northern House
Woodsome Park
Fenay Bridge
Huddersfield
West Yorkshire
HD8 0GA
Solicitors
Osborne Clarke
2 Temple Back East
Temple Quay
Bristol
BS1 6EG
Bankers
The Royal Bank of Scotland plc
280 Bishopsgate
London
EC2M 4RB
Registered number
Company No. 3925319
This information is provided by RNS
The company news service from the London Stock Exchange
END
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