Results to 30 September 2000
26 Janvier 2001 - 8:00AM
UK Regulatory
RNS Number:8691X
Shaw (Arthur) & Co PLC
26 January 2001
Arthur Shaw & Company plc
Preliminary Results for the 18 months to
30 September 2000
Highlights
- Turnover for 18 months to 30.9.00 #11.4m (12 months to
28.03.99 #8.8m)
- Loss for the period #1.8m (#1.0m)
- Loss per share of 0.23p (0.46p)
- New members of the management team now on board
- New compelling content for the Media Division
- Current revenue opportunities through traditional
broadcast media and narrowband webcasting
Bryan Morrison, Chairman of Arthur Shaw commented,
"It has been a year of consolidation for the Group. We have
now established a focussed and professional management team
to drive Arthur Shaw forward in both areas of operation -
Engineering and Media.
"The Engineering Division has continued to underperform.
However, with a new Managing Director in place, we have
already made great strides in addressing this. Financial
controls have been tightened, product lines reviewed and a
greater emphasis placed on maintaining higher margins. I
believe that we will see significant improvement in the
Division over the next 12 months.
"The Media Division has continued to forge ahead with a
number of new signings in both the sports and entertainment
world. Content continues to be key in this business and we
are amongst the industry leaders with such household names
as the Spice Girls, Dame Shirley Bassey, Lennox Lewis,
Thierry Henry, Sir David Frost and Ian Wright. Further
celebrity signings will be announced over the coming months.
We continue to make progress on the technology front through
our partnership with Vingage Inc. and our trial webcast of
the Foo Fighters will be transmitted in the US shortly.
"The prospects for the Media Division remain exciting. In
the short term we are developing alternative revenue streams
through the fast developing webcast market and the more
traditional broadcast markets, thus fully utilising our
unrivalled pool of artists and sports personalities. Long
term, Broadband is now universally acknowledged as the
entertainment medium of the future and we remain well
positioned to reap the benefits from this."
Further Enquiries:
Bryan Morrison Jonathon Brill/Charlotte Lambkin
Arthur Shaw Bell Pottinger Financial
Tel: 020 7706 7304 Tel: 020 7353 9203
CHAIRMAN'S STATEMENT
Results and Board Changes
Since we reported our unaudited second interim results for
the twelve months ended 28 March 2000, we have completed the
recruitment of the new members of our management team. As
reported last year, I joined the Board in 1999 and became
Executive Chairman in May 2000 following the retirement of
Alan Bartlett. Peter Frohlich joined the Board in March
2000 (following the retirement of Rodney Toogood) to
concentrate on the development of our Media Division and
Steve Winston joined the Board at the same time as Director
of Technology. Our new Group Finance Director, Tim Curle,
joined us from Sotheby's, Europe in November 2000 and Daran
Brown joined the Group in August 2000 as Chief Executive
Officer of our Engineering Division. Daran had previously
worked at British Steel, General Motors and more recently as
MD of Anderton International Limited.
With the new members of the management team in place, we
have started the necessary restructuring of our business, to
ensure that we restore our engineering interests back to
financial health and to maximise the substantial potential
of our Media Division, through continued development of the
technology and the expansion of our portfolio of major
artists.
The loss before and after taxation for the period was #1.8m
(#1.0m). Turnover in the period was #11.4m (#8.8m). The
gross profit achieved on those sales was 19.9% (22.9%).
This reduction in margins reflects the difficult trading
conditions experienced in our Engineering Division, where
intense competition has driven prices down in some of our
traditional market places.
Our results for the final six months of the period have also
been adversely affected by stock valuation errors in the
management accounts of the Engineering Division produced
prior to March 2000, which have been discovered by the new
management team. However, we realise that higher margins
are required to create a value added business. Financial
controls have been improved and product lines reviewed, even
if that means some marginal business may be lost. The
benefits of this refined strategy should ensure that the
Division will make a positive contribution to the Group.
The success of the Media Division is under pinned by its
content and as such we continue to negotiate various new
deals with international sports and music personalities and
further announcements are due shortly.
Media Division
Our Media Division focuses its efforts in three areas:
- Content - the acquisition of compelling content through
contracts with leading music, sports and other
celebrities
- Production - production activities are focussed through
Mike Mansfield Television
- Technology - accessing leading edge technologies in
order to provide a higher value-added broadcast offering
The capacity to transmit high quality interactive web casts
currently outstrips the consumer's ability to receive them.
This situation will change rapidly as faster internet
connections (broadband) become increasingly available. The
Division also has significant opportunities to generate
revenue from its pool of artists and sports personalities
through more traditional broadcast media and narrowband
webcasting. These activities, as well as further
preparation for the advent of widely available broadband,
will be our focus in the coming months.
Engineering Division
Daran Brown, joined the Group as Chief Executive Officer of
the Engineering Division last August. His appointment
signalled the intention to refine the Division's strategy to
concentrate on higher margins. The valuation errors have
now been fully accounted for and the Division should shortly
make a positive contribution to the Group. Products have
been reviewed, financial controls have been strengthened and
as a result operating procedures overhauled. Operational
processes are being improved in order to lead to greater
cost efficiencies. Since the end of the period new
contracts have been won, with an emphasis on higher value
products and as such opportunities for growth have
increased.
Financing
During the period to 30 September, 2000 the Group was
successful in raising #4m in further financing in the form
of convertible loan stock. The holders of these instruments
have currently converted #2.1m into ordinary shares and have
the option to inject a further #3m under the terms of the
agreements.
Outlook
Over the next 12 months, we believe that we are well placed
to exploit our existing asset base, both in the fast
developing webcast market and in the more traditional
broadcast markets. As the take up of high speed internet
communication accelerates, so will the opportunities for our
Media Division. Following the consolidation of our
management team, the appointment of new members to our
Board, and with a refined strategy, we now have the
opportunity to turn the Engineering Division around. We
also expect to appoint further non-executive directors to
the Board in the coming months.
Bryan Morrison
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE PERIOD ENDED 30 SEPTEMBER 2000
18 months Year
ended 30 ended 28
September March
2000 1999
#'000 #'000
Turnover 11,439 8,784
Cost of sales (9,165) (6,772)
------------- ---------
Gross profit 2,274 2,012
Distribution costs (439) (271)
Administrative
expenses (3,317) (2,610)
------------- ---------
Operating loss (1,482) (869)
Profit on sale of
fixed assets - 62
Net interest payable
and similar charges (280) (167)
------------- ---------
Loss on ordinary
activities before
taxation (1,762) (974)
Tax on loss on
ordinary activities - -
------------- ---------
Loss for the financial
period transferred to
reserves (1,762) (974)
============= =========
Loss per share (0.23p) (0.46p)
============= =========
There were no recognised gains or losses other than the loss
for the financial period.
CONSOLIDATED BALANCE SHEET
AT 30 SEPTEMBER 2000
30 September 28 March
2000 1999
#'000 #'000
Fixed Assets
Intangible assets 9,412 -
Tangible assets 3,667 1,081
------------ ---------
13,079 1,081
------------ ---------
Current assets
Stocks 919 943
Debtors 1,557 1,771
Cash at bank and in hand 1,856 50
------------ ---------
4,332 2,764
Creditors: amounts falling due within
one year (5,885) (3,275)
------------ ---------
Net current liabilities (1,553) (511)
------------ ---------
Total assets less current liabilities 11,526 570
Creditors: amounts falling due after
more than one year (3,288) (115)
------------ ---------
Net assets 8,238 455
============ =========
Capital and reserves
Called up share capital 873 560
Share premium account 2,778 977
Other reserves 7,431 -
Profit and loss account (2,844) (1,082)
------------ ---------
Shareholders' funds 8,238 455
============ =========
CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 SEPTEMBER 2000
18 months Year
ended ended
30 September 28 March
2000 1999
#'000 #'000
Net cash outflow from operating
activities (1,255) (368)
------------ ---------
Returns on investments and servicing
of finance
Invoice discounting charges (118) (124)
Interest paid (73) -
Finance lease interest paid (16) (25)
Other loans (61) (21)
Interest received 74 3
------------ ---------
Net cash outflow from returns on
investments and servicing of
finance (194) (167)
------------ ---------
Taxation 66 -
------------ ---------
Capital expenditure and financial
investment
Purchase of tangible fixed assets (139) (118)
Sale of tangible fixed assets 6 8
Purchase of intangible fixed assets (1,421) -
------------ ---------
Net cash outflow from capital
expenditure and financial
investment (1,554) (110)
------------ ---------
Acquisitions
Purchase of subsidiary undertakings (387) -
------------ ---------
Net cash outflow from acquisitions (387) -
------------ ---------
Financing
Issue of shares 692 4,677
Invoice discounting 97 (488)
Shareholder and other loans - (3,423)
Capital element of hire purchase
payments (91) (198)
Issue of debentures 4,000 -
Loans received 475 -
Expenses paid in connection with
share issues (117) -
------------ ---------
Net cash inflow from financing 5,056 568
------------ ---------
Increase/(decrease) in cash 1,732 (77)
============ =========
Notes:
1. Basis of preparation
The financial statements have been prepared under the
historical cost convention, on bases consistent with the
previous year and in accordance with applicable Accounting
Standards.
2. Tax on loss on ordinary activities
No tax charge arises on the loss for the period.
Unrealised tax losses of approximately #6,500,000 (28 March
1999 : #10,000,000) remain available to offset against
future taxable trading profits.
3. Loss per share
The calculation of the basic loss per share is based on the
loss for the period attributable to ordinary shareholders of
#1,762,000 (year ended 28 March 1999 : #974,000) divided by
the weighted average number of shares in issue during the
period of 754,695,143 (year ended 28 March 1999 :
210,004,940).
4. Reconciliation of movements in shareholders' funds
18 months Year
ended ended
30.9.00 28.3.99
#'000 #'000
Loss for financial period (1,762) (974)
Issue of shares (including movement on
other reserves) 9,545 4,677
---------- -------
Net increase in shareholders' funds 7,783 3,703
Shareholders' funds at 28 March 1999 455 (3,248)
---------- -------
Shareholders' funds at 30 September 2000 8,238 455
========== =======
5. Net cash outflow from operating activities
18 Year
months ended
ended 28.3.99
30.9.00
#'000 #'000
Operating loss (1,482) (869)
Depreciation and other amounts written off 426 400
tangible fixed assets
Loss on sale of tangible fixed assets 1 2
Amortisation of intangible assets 16 -
Decrease in stocks 49 348
Decrease in debtors 425 781
Decrease in creditors (690) (1,030)
------- -------
Net cash outflow from operating activities (1,255) (368)
======= =======
6. Reconciliation of net cash flow to movement in net debt
18 Year
months ended
ended 28.3.99
30.9.00
#'000 #'000
Increase/(decrease) in cash in the period 1,732 (77)
Cash outflow from finance leases 91 198
Cash(inflow)/outflow from financing (4,572) 3,911
------- -------
Change in net debt resulting from cashflows (2,749) 4,032
Cash and loans acquired with subsidiaries (2,090) -
Conversion of loans to equity and other non
cash items 795 (41)
------- -------
Movement in net debt in period (4,044) 3,991
Net debt at 29 March 1999 (966) (4,957)
------- -------
Net debt at 30 September 2000 (5,010) (966)
======= =======
7. Publication of non-statutory accounts
The financial information set out in this preliminary
announcement does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985.
The consolidated balance sheet at 30 September 2000 and the
consolidated profit and loss account, consolidated cash flow
statement and associated notes for the period then ended
have been extracted from the Group's financial statements.
Those financial statements have not yet been delivered to
the Registrar, nor have the auditors reported on them.
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