TIDMPRO
RNS Number : 0949U
Progressive Digital Media Group PLC
27 July 2015
27 July 2015
Progressive Digital Media Group Plc
Unaudited Interim Report For The Six Months Ended 30 June
2015
Highlights
New acquisition announced, integration of Current Analysis Inc
complete with first half results showing good progress.
Key achievements in the six months
-- Revenue and EBITDA growth
-- Business Information continues to grow, now accounting for 63% of revenues
-- Three 2014 acquisitions, including Current Analysis Inc, now fully embedded
-- Agreement to acquire Consumer businesses from Informa Plc for GBP25.0m
Financial performance
-- Revenues increased by 13.7% to GBP33.8m (June 2014: GBP29.7m)
-- Adjusted EBITDA (1) increased by 12.4% to GBP6.1m (June 2014: GBP5.4m)
-- Adjusted EBITDA margin (1) decreased by 0.2% to 18.1% (June
2014: 18.3%) due to increased investment and the re-
phasing of a number of B2B products to the second half of the
year
-- EBITDA (2) increased to GBP3.3m (June 2014: GBP1.7m)
-- Deferred revenue increased by 23.5% to GBP20.0m (June 2014: GBP16.2m)
Our business
-- Premium business information services
-- A strong and scalable asset base
-- Significant contracted and visible revenue streams
-- Globally exploitable business model
Simon Pyper, Chief Executive of Progressive Digital Media Group
Plc, commented:
"Our first half results reflect the increased investment in our
Business Information platforms, the integration of Current Analysis
Inc (acquired 30 July 2014) into our ICT proposition and the
re-phasing of a number of B2B products to the second half of the
year.
We now have, with the integration of Current Analysis Inc, a
credible and authoritative proposition in the ICT vertical and with
the acquisition announced today of four Consumer businesses from
Informa Plc, we have the same opportunity to consolidate and build
out an equally authoritative proposition in the Consumer
vertical."
Note 1: Adjusted EBITDA: Earnings before interest, tax,
depreciation and amortisation, impairment, share based payment
charge, adjusted for unrealised exchange rate losses, costs
associated with derivatives, acquisition, integration and
restructure of the Group. Adjusted EBITDA margin is defined as:
Adjusted EBITDA as a percentage of revenue.
Note 2: EBITDA: Earnings before interest, tax, depreciation,
amortisation and includes a share based payment charge of GBP1.5m
(June 2014: GBP3.0m).
Progressive Digital Media Group Plc ('the Group') enables
organisations in the Consumer and ICT markets to gain competitive
advantage by providing unique, high quality business information
and services across multiple platforms.
Enquiries:
Progressive Digital Media Group Plc 0207 936 6400
Mike Danson, Chairman
Simon Pyper, Chief Executive
N+1 Singer 0207 496 3000
James Maxwell
Alex Wright
Hudson Sandler 0207 796 4133
Michael Sandler
CHIEF EXECUTIVE'S STATEMENT
Our first half results reflect the increased investment in our
Business Information platforms, the integration of Current Analysis
Inc (acquired 30 July 2014) into our ICT proposition and the
re-phasing of a number of B2B products to the second half of the
year.
We now have, with the integration of Current Analysis Inc, a
credible and authoritative proposition in the ICT vertical and with
the acquisition announced today of four Consumer businesses from
Informa Plc, we have the same opportunity to consolidate and build
out an equally authoritative proposition in the Consumer
vertical.
The agreement to acquire the Datamonitor Financial, Datamonitor
Consumer, MarketLine and Verdict businesses from Informa Plc (for a
gross consideration of GBP25.0m) will, with some additional
investment, bring scale, depth and complimentary content sets to
the Group's existing Consumer proposition.
Our acquisition strategy has always been simple; to acquire
companies which operate in the markets or markets adjacent to those
we serve, where there are no dominant supply side providers and
where the demand side customer audience is both global and
fragmented. Moreover, we must have the management and operational
capabilities to fully leverage acquisitions across our platforms
and infrastructure.
The acquisition of the Consumer businesses from Informa Plc
satisfies our strategic and operational criteria. This acquisition
will be our largest to date, yet of all the companies acquired by
Progressive, these businesses are the ones we are most familiar
with.
Our B2B products continue to perform in line with expectations.
We are seeing growth in repeat bookings and have good visibility of
earnings for the remainder of the year. Our B2B proposition is
aligned to our Business Information offering and in the second half
of this year we will launch a number of new and refreshed products.
Additionally, we have re-phased a number of products from the first
to the second half of the year. As a consequence, B2B revenues have
reduced in the first half of the year, though we do expect the full
year to be broadly in line with our 2014 results.
I fully expect that by the end of this financial year, the Group
will have both a leading and authoritative proposition in the two
global industry verticals that it serves, namely ICT and
Consumer.
Group performance
Group revenues from continuing operations increased by 13.7% to
GBP33.8m (June 2014: GBP29.7m) reflecting good growth from our
Business Information division.
Business Information, which is focused on the ICT and Consumer
verticals and accounts for 63.2% of Group revenues (June 2014:
56.4%), grew by 27.3% to GBP21.3m (June 2014: GBP16.8m) in the
first half. There were good results from a broad range of products
with a good contribution from Current Analysis Inc.
B2B, which consists of product sets that support our Business
Information offering, saw revenues decrease by 3.9% to GBP12.4m
(June 2014: GBP12.9m) which largely reflects the amendments to and
re-phasing of our portfolio.
Adjusted EBITDA grew 12.4% to GBP6.1m (June 2014: GBP5.4m), with
Adjusted EBITDA margin decreasing by 0.2% to 18.1% (June 2014:
18.3%). Earnings and margins have been tempered by the amendment to
our B2B portfolio and investment and integration costs associated
with the acquisition of Current Analysis Inc.
Profit before tax from continuing operations increased by
GBP0.9m to GBP1.2m (June 2014: GBP0.3m).
Financial review
The Group continued to record growth in deferred revenues and
improve cash generation.
1. Deferred revenue rose by 23.5% to GBP20.0m (June 2014: GBP16.2m)
2. Cash generated from continuing operations increased by
GBP4.4m to GBP5.3m (June 2014: GBP0.9m) which equates to 86.2% of
first half Adjusted EBITDA
On a Sterling equivalent basis, the Group derives 56% of
revenues in currencies other than GBP (June 2014: 49%). During the
period, the effect of currency movements was mildly positive, but
the expected first half US Dollar benefit was largely offset by the
continued weakness of the Euro.
The acquisition of the four Consumer businesses from Informa Plc
(announced today) for a gross consideration of GBP25.0m will be
funded from existing cash resources and revised banking facilities.
In July 2014, the Group announced that it had negotiated a new
GBP30.0m multi-currency facility with The Royal Bank of Scotland.
These facilities were increased in July 2015 to GBP40.0m to help
fund the acquisition of the four businesses from Informa Plc and
provide working capital funding.
Our employees
A growing company places great demands on its employees, more so
if that company is growing both organically and through
acquisition. That we have delivered growth, integrated acquisitions
and plan yet more is testament to the commitment, professionalism
and hard work of our employees.
Outlook and prospects
The fundamentals of the business are positive and we are
confident that our focus on building premium Technology and
Consumer Business Information services is the correct strategy and
one which will yield long-term profitable growth.
Simon Pyper
Chief Executive
27 July 2015
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 2015 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 Chief Executive's statement 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 2015 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
27 July 2015
Consolidated income statement
Notes 6 months 6 months Year to
to 30 to 30 31 December
June 2015 June 2014 2014
Unaudited Unaudited Audited
Continuing operations GBP000s GBP000s GBP000s
Revenue 3 33,771 29,700 63,161
Cost of sales (21,176) (17,894) (39,294)
------------------------------------------ ------ ----------- ----------- -------------
Gross profit 12,595 11,806 23,867
Distribution costs (401) (461) (792)
Administrative costs (7,043) (6,589) (12,991)
Other expenses 4 (3,655) (4,338) (9,306)
------------------------------------------ ------ ----------- ----------- -------------
Operating profit 1,496 418 778
Analysed as:
Adjusted EBITDA(1) 6,096 5,423 11,529
Items associated with acquisitions
and restructure of the Group 4 (1,073) (738) (2,606)
Other adjusting items 4 (1,705) (2,946) (5,173)
------------------------------------------ ------ ----------- ----------- -------------
EBITDA(2) 3,318 1,739 3,750
Amortisation (1,465) (1,050) (2,425)
Depreciation (357) (271) (547)
------------------------------------------ ------ ----------- ----------- -------------
Operating profit 1,496 418 778
------------------------------------------ ------ ----------- ----------- -------------
Finance costs (329) (111) (484)
Profit before tax from continuing
operations 1,167 307 294
Income tax (expense)/ credit (714) 734 (887)
------------------------------------------ ------ ----------- ----------- -------------
Profit/ (loss) for the period from
continuing operations 453 1,041 (593)
Loss for the period from discontinued
operations 9 (875) (346) (1,628)
(Loss)/ profit for the period (422) 695 (2,221)
------------------------------------------ ------ ----------- ----------- -------------
Attributable to:
Equity holders of the parent (422) 688 (2,106)
Non-controlling interest - 7 (115)
------------------------------------------ ------ ----------- ----------- -------------
Earnings/ (loss) per share attributable
to equity holders from continuing
operations: 5
Basic earnings/ (loss) per share (pence) 0.59 1.38 (0.78)
Diluted earnings/ (loss) per share
(pence) 0.54 1.27 (0.70)
Loss per share attributable to equity
holders from discontinued operations:
Basic loss per share (pence) (1.15) (0.47) (1.99)
Diluted loss per share (pence) (1.04) (0.43) (1.79)
Total basic (loss)/ earnings per share
(pence) (0.55) 0.91 (2.77)
Total diluted (loss)/ earnings per
share (pence) (0.50) 0.84 (2.50)
------------------------------------------ ------ ----------- ----------- -------------
The accompanying notes form an integral part of this financial
report.
(1) We define Adjusted EBITDA as EBITDA adjusted for costs
associated with acquisition, integration, restructure of the Group,
share based payments, impairment,
unrealised exchange rate losses and impact of foreign exchange
contracts. We present Adjusted EBITDA as additional information
because we understand that it is a measure used by certain
investors. 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.
(2) EBITDA is defined as earnings before interest, tax,
depreciation, amortisation and impairment.
Consolidated statement of comprehensive income
6 months 6 months Year to
to to 31 December
30 June 30 June 2014
2015 2014 Audited
Unaudited Unaudited
GBP000s GBP000s GBP000s
(Loss)/ profit for the period (422) 695 (2,221)
Other comprehensive (loss)/ income
Items that will be classified subsequently
to profit or loss:
Translation of foreign entities (60) 14 (166)
-------------------------------------------- ----------- ----------- -------------
Other comprehensive (loss)/ income,
net of tax (60) 14 (166)
-------------------------------------------- ----------- ----------- -------------
Total comprehensive (loss)/ income for
the period (482) 709 (2,387)
-------------------------------------------- ----------- ----------- -------------
Attributable to
Equity holders of the parent (482) 702 (2,272)
Non-controlling interest - 7 (115)
-------------------------------------------- ----------- ----------- -------------
The accompanying notes form an integral part of this financial
report.
Consolidated statement of financial position
Notes 30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Non-current assets
Property, plant and equipment 1,295 804 1,510
Intangible assets 6 41,539 27,237 42,403
Long-term derivative assets 37 - -
Deferred tax assets 923 1,892 457
----------------------------------- ------ ----------- ----------- ------------
43,794 29,933 44,370
----------------------------------- ------ ----------- ----------- ------------
Current assets
Inventories 362 109 150
Trade and other receivables 26,796 25,676 33,049
Short-term derivative assets 137 91 106
Cash and cash equivalents 11,365 11,100 8,261
----------------------------------- ------ ----------- ----------- ------------
38,660 36,976 41,566
----------------------------------- ------ ----------- ----------- ------------
Total assets 82,454 66,909 85,936
----------------------------------- ------ ----------- ----------- ------------
Current liabilities
Trade and other payables (28,537) (23,927) (32,567)
Short-term borrowings 11 (2,543) - (1,283)
Current tax payable (1,108) (672) (1,240)
Short-term derivative liabilities - - (89)
Short-term provisions (281) (462) (368)
----------------------------------- ------ ----------- ----------- ------------
(32,469) (25,061) (35,547)
----------------------------------- ------ ----------- ----------- ------------
Non-current liabilities
Long-term provisions (94) (147) (84)
Long-term derivative liabilities - - (26)
Long-term borrowings 11 (14,336) (5,892) (15,651)
----------------------------------- ------ ----------- ----------- ------------
(14,430) (6,039) (15,761)
----------------------------------- ------ ----------- ----------- ------------
Total liabilities (46,899) (31,100) (51,308)
----------------------------------- ------ ----------- ----------- ------------
Net assets 35,555 35,809 34,628
----------------------------------- ------ ----------- ----------- ------------
Equity
Share capital 7 154 154 154
Share premium account 200 200 200
Other reserve (37,128) (37,128) (37,128)
Foreign currency translation
reserve (186) 54 (126)
Special reserve 48,422 48,422 48,422
Retained profit 24,093 23,990 23,106
----------------------------------- ------ ----------- ----------- ------------
Equity attributable to equity
holders of the parent 35,555 35,692 34,628
Non-controlling interest - 117 -
----------------------------------- ------ ----------- ----------- ------------
Total equity 35,555 35,809 34,628
----------------------------------- ------ ----------- ----------- ------------
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 to equity
reserve holders
of the
parent
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Balance at 1
January
2014 153 - (37,128) 40 48,422 20,508 31,995 116 32,111
Profit for the
period - - - - - 688 688 7 695
Other
comprehensive
income:
Translation of
foreign
entities - - - 14 - - 14 - 14
--------------- -------- -------- --------- ------------ -------- --------- ------------- ---------------- --------
Total
comprehensive
income for
the period - - - 14 - 688 702 7 709
--------------- -------- -------- --------- ------------ -------- --------- ------------- ---------------- --------
Transactions
with
owners:
Dividends - - - - - - - (6) (6)
Issue of share
capital 1 200 - - - - 201 - 201
Share based
payments
charge - - - - - 3,031 3,031 - 3,031
Excess
deferred tax
on share
based
payments - - - - - (237) (237) - (237)
--------------- -------- -------- --------- ------------ -------- --------- ------------- ---------------- --------
Balance at 30
June
2014 154 200 (37,128) 54 48,422 23,990 35,692 117 35,809
Loss for the
period - - - - - (2,794) (2,794) (122) (2,916)
Other
comprehensive
income:
Translation of
foreign
entities - - - (180) - - (180) - (180)
--------------- -------- -------- --------- ------------ -------- --------- ------------- ---------------- --------
Total
comprehensive
loss for the
period - - - (180) - (2,794) (2,974) (122) (3,096)
--------------- -------- -------- --------- ------------ -------- --------- ------------- ---------------- --------
Transactions
with
owners:
Dividends - - - - - - - 5 5
Share based
payments
charge - - - - - 1,339 1,339 - 1,339
Excess
deferred tax
on share
based
payments - - - - - 571 571 - 571
--------------- -------- -------- --------- ------------ -------- --------- ------------- ---------------- --------
Balance at 31
December
2014 154 200 (37,128) (126) 48,422 23,106 34,628 - 34,628
Loss for the
period - - - - - (422) (422) - (422)
Other
comprehensive
income:
Translation of
foreign
entities - - - (60) - - (60) - (60)
--------------- -------- -------- --------- ------------ -------- --------- ------------- ---------------- --------
Total
comprehensive
loss for the
period - - - (60) - (422) (482) - (482)
--------------- -------- -------- --------- ------------ -------- --------- ------------- ---------------- --------
Transactions
with
owners:
Share based
payments
charge - - - - - 1,485 1,485 - 1,485
Excess
deferred tax
on share
based
payments - - - - - (76) (76) - (76)
--------------- -------- -------- --------- ------------ -------- --------- ------------- ---------------- --------
Balance at 30
June
2015 154 200 (37,128) (186) 48,422 24,093 35,555 - 35,555
--------------- -------- -------- --------- ------------ -------- --------- ------------- ---------------- --------
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
2015 2014 2014
Continuing operations Unaudited Unaudited Audited
Cash flows from operating activities GBP000s GBP000s GBP000s
Profit/ (loss) for the period 453 1,041 (593)
Adjustments for:
Depreciation 357 271 547
Amortisation 1,465 1,050 2,425
Finance expense 329 111 484
Taxation recognised in profit or
loss 714 (734) 887
Profit on disposal of subsidiary - - (106)
Loss on disposal of property, plant
and equipment - - 8
Revaluation of foreign currency
loan (93) - 902
Share based payments charge 1,485 3,031 4,371
Decrease/ (increase) in trade and
other receivables 5,163 43 (5,927)
(Increase)/ decrease in inventories (212) 46 5
(Decrease)/ increase in trade and
other payables (4,146) (3,617) 396
Revaluation of derivatives (182) (85) 15
Movement in provisions (77) (216) (299)
------------------------------------------- ------------ ------------ -------------
Cash generated from continuing
operations 5,256 941 3,115
Interest paid (continuing operations) (292) (67) (220)
Income taxes paid (continuing operations) (1,176) (240) (1,364)
------------------------------------------- ------------ ------------ -------------
Net cash from operating activities
(continuing operations) 3,788 634 1,531
Net decrease in cash and cash equivalents
from discontinued operations (79) (494) (1,281)
------------------------------------------- ------------ ------------ -------------
Total cash flows from operating
activities 3,709 140 250
Cash flows from investing activities
(continuing operations)
Acquisition of Pyramid Research - (2,006) (2,006)
Acquisition of ERC Group - (543) (543)
Acquisition of Current Analysis
Inc - - (11,168)
Proceeds from disposal of subsidiary - - 58
Purchase of property, plant and
equipment (142) (222) (1,212)
Purchase of intangible assets (403) (455) (1,128)
------------------------------------------- ------------ ------------ -------------
Net cash used in investing activities
(continuing operations) (545) (3,226) (15,999)
Net increase in cash and cash equivalents
from discontinued operations - - 4
------------------------------------------- ------------ ------------ -------------
Total cash flows from investing
activities (545) (3,226) (15,995)
Cash flows from financing activities
(continuing operations)
Proceeds from long-term borrowings - - 10,000
------------------------------------------- ------------ ------------ -------------
Net cash generated from financing
activities (continuing operations) - - 10,000
Net decrease in cash and cash equivalents
from discontinued operations - (6) (6)
------------------------------------------- ------------ ------------ -------------
Total cash flows from financing
activities - (6) 9,994
------------------------------------------- ------------ ------------ -------------
Net increase/ (decrease) in cash
and cash equivalents 3,164 (3,092) (5,751)
Cash and cash equivalents at beginning
of period 8,261 14,178 14,178
Effects of currency translation
on cash and cash equivalents (60) 14 (166)
------------------------------------------- ------------ ------------ -------------
Cash and cash equivalents at end
of period 11,365 11,100 8,261
------------------------------------------- ------------ ------------ -------------
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 to provide its
customers with high quality information and services through
multiple channels in a rapidly changing economic environment. The
unique and up to date knowledge and information that the Group
provides enables organisations to gain competitive advantage and
market share within the sectors the Group covers.
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 03925319.
Basis of preparation
These interim financial statements are for the six months ended
30 June 2015. 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 2014.
The financial information for the year ended 31 December 2014
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 2014 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.
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 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 GBP11.4 million as at 30 June 2015
and net debt of GBP5.5 million (30 June 2014: net cash of GBP5.2
million), being cash and cash equivalents less short and long-term
borrowings. The Group also has an overdraft facility of GBP2
million, issued by The Royal Bank of Scotland, which was not
utilised as at 30 June 2015.
The Group has outstanding loans of GBP16.9 million with The
Royal Bank of Scotland.
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 Directors have 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 2014. All policies have been consistently
applied.
3. Segment analysis
The principal activity of Progressive Digital Media Group Plc
(PDMG) and its subsidiaries ('the Group') is the provision of
premium business information through multiple channels. The Group
supplies its customers with research, analysis and tactical
intelligence enabling them to gain a competitive advantage in their
markets.
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 executive directors as its
chief operating decision maker.
Business information is provided to customers through multiple
channels by a dedicated content team that is centrally managed by
research directors who report directly to the executive directors.
Business Information is therefore considered to be the operating
segment of the Group.
The Group profit or loss is reported to the executive directors
on a monthly basis and consists of earnings before interest, tax,
depreciation, amortisation, central overheads and other adjusting
items. The executive directors also monitor revenue within the
operating segment and have decided to include an additional
voluntary disclosure analysing revenue by sub-category, being
Business Intelligence and B2B (Events and Marketing).
A reconciliation of Adjusted EBITDA to profit before tax from
continuing operations is set out below:
6 months 6 months Year to
to 30 June to 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Business Intelligence 21,340 16,760 38,513
B2B (Events and Marketing) 12,431 12,940 24,648
-------------------------------------- ------------ ------------ -------------
Total Business Information Revenue 33,771 29,700 63,161
Business Information Adjusted EBITDA 6,096 5,423 11,529
Other expenses (see note 4) (3,655) (4,338) (9,306)
Depreciation (357) (271) (547)
Amortisation (excluding amortisation
of acquired intangible assets) (588) (396) (898)
Finance costs (329) (111) (484)
Profit before tax from continuing
operations 1,167 307 294
-------------------------------------- ------------ ------------ -------------
Notes to the interim financial statements (continued)
3. Segment analysis (continued)
Geographical analysis
From continuing operations
6 months to 30 June 2015 Rest of World
UK Europe North America Total
GBP000s GBP000s GBP000s GBP000s GBP000s
Revenue from external customers 9,661 9,922 9,486 4,702 33,771
--------------------------------- -------- -------- ---------------- -------------- --------
6 months to 30 June 2014 Rest of World
UK Europe North America Total
GBP000s GBP000s GBP000s GBP000s GBP000s
Revenue from external customers 9,923 9,461 6,433 3,883 29,700
--------------------------------- -------- -------- ---------------- -------------- --------
12 months to 31 December 2014 Rest of World
UK Europe North America Total
GBP000s GBP000s GBP000s GBP000s GBP000s
Revenue from external customers 17,906 22,447 15,640 7,168 63,161
--------------------------------- -------- -------- ---------------- -------------- --------
4. Other expenses
6 months to 6 months to Year to 31
30 June 2015 30 June 2014 December
Unaudited Unaudited 2014
Audited
GBP000s GBP000s GBP000s
Restructuring costs (1) 1,031 710 2,237
Property related provisions 45 (121) (221)
Exceptional property costs 5 9 13
Deal costs (9) - 146
Exceptional legal costs - 18 -
M&A costs 1 122 431
-------------------------------------------- ------ --------------- -------------
Items associated with acquisitions
and restructure of the Group 1,073 738 2,606
Share based payment charge 1,485 3,031 4,371
Revaluation of short and long-term
derivatives (182) (85) 15
Unrealised foreign exchange
loss 402 - 787
Amortisation of acquired intangibles 877 654 1,527
Total other expenses 3,655 4,338 9,306
-------------------------------------------- ------ --------------- -------------
(1) Restructuring costs consist of redundancy costs relating to
three key management personnel as well as other costs in
relation
to restructuring the business.
Notes to the interim financial statements (continued)
5. 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. 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
2015
Unaudited
6 months
to Year to 31
30 June December
2014 2014
Unaudited Audited
Continuing operations
Basic
Profit/ (loss) for the period attributable
to ordinary shareholders of the parent
company (GBP000s) 453 1,041 (593)
Weighted average number of shares (000s) 76,268 75,609 75,941
Basic earnings/ (loss) per share (pence) 0.59 1.38 (0.78)
Diluted
Profit/ (loss) for the period attributable
to ordinary shareholders of the parent
company (GBP000s) 453 1,041 (593)
Weighted average number of shares (000s) 83,949 81,983 84,300
Diluted earnings/ (loss) per share
(pence) 0.54 1.27 (0.70)
Discontinued operations
Basic
Loss for the period attributable to
ordinary shareholders from discontinued
operations (GBP000s) (875) (346) (1,628)
Less (profit)/ loss attributable to
minority interest (GBP000s) - (7) 115
Loss for the period attributable to
ordinary shareholders of the parent
company (GBP000s) (875) (353) (1,513)
Weighted average number of shares (000s) 76,268 75,609 75,941
Basic loss per share (pence) (1.15) (0.47) (1.99)
Diluted
Loss for the period attributable to
ordinary shareholders of the parent
company (GBP000s) (875) (353) (1,513)
Weighted average number of shares (000s)
* 83,949 81,983 84,300
Diluted loss per share (pence) (1.04) (0.43) (1.79)
-------------------------------------------- ------------ ----------- -----------
Total
Basic
(Loss)/ profit for the period attributable
to ordinary shareholders of the parent
company (GBP000s) (422) 688 (2,106)
Weighted average number of shares (000s) 76,268 75,609 75,941
Basic (loss)/ earnings per share (pence) (0.55) 0.91 (2.77)
Diluted
(Loss)/ profit for the period attributable
to ordinary shareholders of the parent
company (GBP000s) (422) 688 (2,106)
Weighted average number of shares (000s)
* 83,949 81,983 84,300
Diluted (loss)/ earnings per share
(pence) (0.50) 0.84 (2.50)
-------------------------------------------- ------------ ----------- -----------
Notes to the interim financial statements (continued)
5. Earnings per share (continued)
Reconciliation of basic weighted average number of shares to the
diluted weighted average number of shares:
6 months
to
30 June
2015
Unaudited
No'000s
6 months
to Year to 31
30 June December
2014 2014
Unaudited Audited
No'000s No'000s
Basic weighted average number of shares 76,268 75,609 75,941
Share options in issue at end of year 7,681 6,374 8,359
----------------------------------------- ------------ ----------- -----------
Diluted weighted average number of
shares 83,949 81,983 84,300
----------------------------------------- ------------ ----------- -----------
* The share options in issue are anti-dilutive in respect of the
diluted loss per share calculation in 2015.
6. Intangible assets
Software Asset under Customer Brands IP rights Goodwill Total
construction relationships
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
Cost
As at 31 December
2014 5,359 - 14,193 1,893 12,267 41,022 74,734
Additions 63 340 - - - - 403
Fair value adjustments (17) - - - - 216 199
Foreign currency
retranslation (5) - - - - - (5)
------------------------ --------- -------------- --------------- -------- ---------- --------- ---------
As at 30 June 2015 5,400 340 14,193 1,893 12,267 41,238 75,331
------------------------ --------- -------------- --------------- -------- ---------- --------- ---------
Amortisation
As at 31 December
2014 (3,360) - (9,633) (200) (9,778) (9,360) (32,331)
Charge for the
year (558) - (415) (181) (311) - (1,465)
Foreign currency
retranslation 4 - - - - - 4
------------------------ --------- -------------- --------------- -------- ---------- --------- ---------
As at 30 June 2015 (3,914) - (10,048) (381) (10,089) (9,360) (33,792)
------------------------ --------- -------------- --------------- -------- ---------- --------- ---------
Net book value
As at 30 June 2015 1,486 340 4,145 1,512 2,178 31,878 41,539
As at 31 December
2014 1,999 - 4,560 1,693 2,489 31,662 42,403
------------------------ --------- -------------- --------------- -------- ---------- --------- ---------
A fair value adjustment was booked to software during the
period. This was in relation to Current Analysis Inc, which was
acquired by the Group on 30 July 2014. Further fair value
adjustments have been booked to goodwill in relation to Current
Analysis Inc during the period.
Notes to the interim financial statements (continued)
7. Equity
Share capital
Allotted, called up and
fully paid:
30 June 2015 30 June 2014 31 December
Unaudited Unaudited 2014
Audited
No'000s GBP000s No'000s GBP000s No'000s GBP000s
Ordinary shares at 1 January
(1/14(th) pence) 76,268 54 74,487 53 74,487 53
Issue of shares: partial
consideration ERC - - 76 - 76 -
Issue of shares: other - - 4 - 4 -
Issue of shares: share option
scheme - - 1,701 1 1,701 1
------------------------------- -------- -------- -------- -------- -------- --------
Ordinary shares c/f (1/14(th)
pence) 76,268 54 76,268 54 76,268 54
------------------------------- -------- -------- -------- -------- -------- --------
Deferred shares of GBP1.00
each 100 100 100 100 100 100
---------------------------- ------- ---- ------- ---- ------- ----
Total allotted, called
up and fully paid 76,368 154 76,368 154 76,368 154
---------------------------- ------- ---- ------- ---- ------- ----
The issue of shares in the prior year related to the
following:
ERC Acquisition
The Group issued 76,191 ordinary shares as part of the
consideration for ERC Group Limited and its subsidiaries. These
shares rank pari passu with the existing PDMG ordinary shares in
issue.
Share Option Scheme
The Group issued 1,400,000 ordinary shares on 7 March 2014 and
305,080 ordinary shares on 14 March 2014 following the exercise of
options by employees pursuant to the vesting of the Company's
Capital Appreciation Plan. These shares rank pari passu with the
existing PDMG ordinary shares in issue.
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
The capital structure of the Group consists of net debt, which
includes borrowings (note 11) and cash and cash equivalents, and
equity.
The Company has two classes of shares:
-- Ordinary shares carry no right to fixed income and each share
carries the right to one vote at general meetings of the
Company
-- 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.
Notes to the interim financial statements (continued)
7. Equity (continued)
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 Act 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.
8. 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 market value at the
date of grant. The market values were compared to the Black-Scholes
model and there were no significant differences.
The following assumptions were used in the valuation:
Award Tranche Grant Date Fair Value Estimated Weighted
of Share Exercise Forfeiture Average
Price at Price rate p.a. of Remaining
Grant Date (Pence) Contractual
Life
--------------- --------------- ------------- ----------- ------------ --------------
1 January
Award 1 2011 GBP1.09 0.0714p 15% 2.0
Award 3 1 May 2012 GBP1.87 0.0714p 15% 2.0
Award 4 7 March 2014 GBP2.55 0.0714p 15% 2.0
8 September
Award 5 2014 GBP2.575 0.0714p 15% 2.2
22 September
Award 6 2014 GBP2.525 0.0714p 15% 2.0
9 December
Award 7 2014 GBP2.075 0.0714p 15% 2.1
31 December
Award 8 2014 GBP2.025 0.0714p 15% 2.0
Award 9 21 April 2015 GBP2.05 0.0714p 15% 2.1
The estimated forfeiture rate 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 the
rate of lapsed options.
The share options held within Award 2 were fully forfeited
during 2015.
Each of the above awards are subject to the following vesting
criteria:
Vesting Criteria
Group Achieves
GBP10m EBITDA Group Achieves GBP18.5m Group Achieves GBP23.5m
(met in 2014) EBITDA EBITDA
---------- --------------- ------------------------ ------------------------
Award 1-4 20% Vest 40% Vest 40% Vest
Award 5 N/a 30% Vest 70% Vest
Award 6 N/a 50% Vest 50% Vest
Award 7 N/a 40% Vest 60% Vest
Award 8 N/a 50% Vest 50% Vest
Award 9 N/a 40% Vest 60% Vest
Notes to the interim financial statements (continued)
8. Share based payments (continued)
During 2013 the first vesting criteria of the Group achieving
GBP10m Adjusted EBITDA was met. As a result 1,701,156 options were
exercised during 2014 at a weighted exercise price of 0.0714 pence.
The weighted average price of shares exercised was GBP2.55.
The Remuneration Committee increased the second and third
vesting criteria to GBP18.5 million and GBP23.5 million
respectively as a result of the acquisitions made during 2014
(2013: GBP15 million and GBP20 million respectively).
The total charge recognised for the scheme during the six months
to 30 June 2015 was GBP1,485,000 (2014: GBP3,031,000).
The awards of the scheme are settled with ordinary shares of the
Company. Reconciliation of movement in the number of options is
provided below.
Option price Number of
(pence) options
31 December 2014 1/14(th) 8,358,880
Granted 1/14(th) 1,009,960
Forfeited 1/14(th) (1,687,400)
------------------ -------------- ------------
30 June 2015 1/14(th) 7,681,440
------------------ -------------- ------------
9. Discontinued operations
As the business becomes more focused on its Business Information
offering, a number of legacy non-core business units have been
discontinued in recent years.
During 2014, several of the Group's operations were
discontinued:
-- The Group's German subsidiary was considered no longer viable;
-- The Group disposed of Office Solutions Media Limited, as the
subsidiary was no longer considered a strategic fit;
-- One of the Group's business to business lead generation
operations was discontinued as it was no longer a strategic fit or
a viable business;
-- One of the Group's market research businesses units was
discontinued due to continued under performance.
The costs in 2015 relate to final costs incurred to close the
businesses which were discontinued during 2014.
Pursuant to the provisions of IFRS 5 the above operations have
been classified as discontinued.
Notes to the interim financial statements (continued)
9. Discontinued operations (continued)
a) The results of the discontinued operation are as follows;
6 months 6 months Year to
to 30 to 30 31 December
June 2015 June 2014 2014
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Discontinued operations
Revenue (318) 1,180 1,338
Cost of sales (494) (1,048) (1,958)
---------------------------------------- ----------- ----------- -------------
Gross (loss)/ profit (812) 132 (620)
Distribution costs - (19) (19)
Administrative costs (283) (336) (453)
Other (expenses)/ income - (123) 86
---------------------------------------- ----------- ----------- -------------
Loss before tax from discontinued
operations (1,095) (346) (1,006)
Income tax credit/ (charge) 220 - (622)
---------------------------------------- ----------- ----------- -------------
Loss for the period from discontinued
operations (875) (346) (1,628)
---------------------------------------- ----------- ----------- -------------
b) Loss before tax
6 months 6 months Year to
to 30 to 30 31 December
June 2015 June 2014 2014
Unaudited Unaudited Audited
This is arrived at after charging: GBP000s GBP000s GBP000s
Depreciation - 3 6
------------------------------------- ----------- ----------- -------------
c) Cash flows from discontinued operations
6 months 6 months Year to
to 30 to 30 31 December
June 2015 June 2014 2014
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Cash outflows from operating activities (79) (494) (1,281)
Cash inflows from investing activities - - 4
Cash outflows from financing activities - (6) (6)
------------------------------------------ ----------- ----------- -------------
Total cash outflows from discontinued
operations (79) (500) (1,283)
Notes to the interim financial statements (continued)
10. Related party transactions
Mike Danson, Progressive Digital Media Group's Chairman, owned
66.14% of the Company's ordinary shares as at 30 June 2015. Mike
Danson owns a number of businesses that interact with Progressive
Digital Media Group. 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 2015 was GBP1,053,000
(2014: GBP974,700).
Corporate support services
Corporate support services are provided to and from 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 2015 was GBP192,400 (2014:
recharge from other companies owned by Mike Danson to Progressive
Digital Media Group of GBP346,300).
Revenue License Agreement
During the period, Progressive Digital Media Group terminated a
licensing agreement with World Marketing Intelligence Ltd ("WMI"),
a company 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 was payable to WMI. The
total revenue recognised in Progressive Digital Media Group for the
6 months to 30 June 2015 was GBPnil (2014: GBPnil).
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
2015 2014 2014
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Global Data Ltd 2 31 82
Estel Property Group Ltd (606) (4,993) (5,143)
Progressive Media Venture Ltd 784 (11) (234)
New Statesman Ltd - 2,532 2,689
Progressive Media International Ltd - 2,654 2,945
Progressive Global Media Ltd - 85 73
180 298 412
------------------------------------- ----------- ----------- ------------
The Group has right of set off over these amounts.
Notes to the interim financial statements (continued)
11. Borrowings
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Current
Loans due within one year 2,543 - 1,283
---------------------------- ----------- ----------- ------------
Non-current
Long-term loans 14,336 5,892 15,651
---------------------------- ----------- ----------- ------------
Overdraft
The Group currently has a GBP2 million overdraft facility, which
was not drawn down upon at 30 June 2015. Interest is charged on the
overdraft at 2.25% over the Bank of England Base Rate.
Term loan and RCF
US$17m term loan and GBP20m RCF provided by The Royal Bank of
Scotland
In July 2014, the Group refinanced its debt position. A US$17
million term loan was issued by The Royal Bank of Scotland to
partially fund the acquisition of Current Analysis Inc. This is
repayable in quarterly instalments over 4 years. The first
instalment is due for repayment in July 2015, with total repayments
due within the next 12 months being US$4 million.
Additionally, The Royal Bank of Scotland issued a GBP20 million
revolving capital facility (RCF). As at 30 June 2015, the Group had
drawn down GBP6.4 million of this facility.
Interest is charged on the term loan and drawn down RCF at a
rate of 2.25% over the London Interbank Offered Rate. Interest is
charged on the undrawn RCF at 0.9%.
These new arrangements replaced the existing GBP6 million RCF
which was arranged in October 2011 and was due for repayment in
2015.
Non-current borrowings can be reconciled as follows:
30 June 30 June 31 December
2015 2014 2014
Unaudited Unaudited Audited
GBP000s GBP000s GBP000s
Term loan issued by The Royal Bank
of Scotland 8,266 - 9,619
RCF issued by The Royal Bank of Scotland 6,375 6,000 6,375
Capitalised fees, net of amortised
amount (305) (108) (343)
14,336 5,892 15,651
------------------------------------------ ----------- ----------- ------------
Notes to the interim financial statements (continued)
12. Post balance sheet events
The Group today announced its agreement to acquire the
Datamonitor Financial, Datamonitor Consumer, MarketLine and Verdict
businesses from Informa Plc for GBP25.0m in cash. The sale will be
effected by Informa transferring the above named businesses to
Verdict Research Limited, the entire share capital of which will be
acquired by the Group. The acquisition is being funded by extending
the existing facilities of GBP30.0m to GBP40.0m, which are held
with The Royal Bank of Scotland. The additional facility is a term
loan of GBP10.0m, with the remainder of the consideration being
funded through draw down of the remaining RCF facility and use of
existing cash reserves.
The acquisition of these businesses supports the Group's
strategy of expanding its premium subscription based services into
global markets. The businesses being acquired complement the
Group's existing Consumer proposition and should provide a platform
for growth over the medium term.
For the financial year ended 31 December 2014, revenues for the
businesses being acquired were approximately GBP17.8m with adjusted
earnings which exclude central overheads of circa GBP3.0m.
Further analysis on intangible assets generated as part of the
acquisition is not disclosed due to the proximity of the
acquisition date to the interim announcement date.
Advisers
Company Secretary
Graham Lilley
Head Office and Registered Office
John Carpenter House
John Carpenter Street
London
EC4Y 0AN
Tel: + 44 (0) 20 7936 6400
Nominated Adviser and Broker
Nplus1 Singer Advisory LLP
1 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. 03925319
This information is provided by RNS
The company news service from the London Stock Exchange
END
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