TIDMTOU
RNS Number : 0547P
Touch Group PLC
28 September 2011
TOUCH GROUP PLC
('Group' or 'the Company')
UNAUDITED PRELIMINARY RESULTS FOR THE 12 MONTHS ENDED 31 MARCH
2011
Touch Group plc, the international business-to-business
publishing group, today announces its unaudited preliminary results
for the 12 months ended 31 March 2011.
Business and financial developments
-- Turnover for the 12 month period was GBP4.79 million (15
months 2010: GBP5.69 million)
-- The loss for the 12 month period was GBP1.50 million (15
months 2010: GBP2.20 million)
-- Trading loss* of GBP1.50 million (15 months 2010: GBP1.88
million)
-- Gross margins remain strong at 50.5% (2010: 52.4%)
-- Increase in orders carried forward to GBP2.94 million (2010:
GBP2.86 million);
-- As at period end the Group had net assets of GBP0.87 million
(2010: GBP1.66 million), with cash and cash equivalents of GBP0.32
million (2010: GBP0.99 million).
-- The Company continues its efforts to correct and strengthen
its balance sheet, details of which are set out below and in note
1b) to the accounts
* "Trading loss" refers to operating loss before impact of
investment impairments, fixed asset impairments, share based
payment charges and credits and other operating income.
Funding requirements
It will not surprise shareholders that 2011 has been an
extremely challenging year for Touch. As previously announced, the
Company completed a secondary placement of 48,333,333 ordinary
shares raising GBP725,000 in February 2011. These funds have been
used to enhance and extend our digital assets with the intention of
furthering the development of the Company's Medical Education and
Communications Division, expanding our Pharma and Energy Divisions,
and for general working capital purposes allowing us to focus on
developing the business further.
However, in order to meet its obligations as they fall due the
Company will be required to raise additional capital. Shareholders
should be aware that without the additional funding, the Company
will in due course not be able to meet its obligations as they fall
due.
In addition, given the economic environment some ongoing funding
uncertainties remain. Whilst the Directors have instituted measures
to preserve cash and secure additional funding these circumstances
create material uncertainties over future funding results and
cashflows.
The Directors have had discussions with certain other providers
of finance about additional facilities and subsequent to year end
an unsecured loan of GBP215,000 has been made available by Mr
Vincent Isaacs, Executive Chairman during June 2011. The loan
attracts an interest rate of 3.25 per cent per annum. The loan
provided by Mr Isaacs and the interest payable thereon is
classified as a related party transaction. The independent
directors considered the loan to be in the best interests of the
Company and shareholders as a whole. Having subsequently consulted
with the Company's nominated adviser, the independent directors are
of the view that the terms of the loan were fair and reasonable
insofar as its shareholders are concerned.
Discussions with other providers of finance remain ongoing and
the Directors continue to pursue alternative sources of funding in
the event that the anticipated facilities, which the Directors
expect to secure, are not forthcoming,
The Directors have concluded that the combination of these
circumstances represent a material uncertainty that casts
significant doubt upon the Group's and the Company's ability to
continue as a going concern. Nevertheless, the Directors have a
reasonable expectation that the Group and the Company will have
adequate resources to continue in operational existence for the
foreseeable future.
The Chairman's Statement and the Operating and Financial Review,
which are contained below and form part of this announcement,
include further important information and disclosures; the
announcement should be read in its entirety.
For further information please contact:
Touch Group plc
Vincent Isaacs
Executive Chairman Tel: 0207 452 5222
Shore Capital and Corporate Limited
Nominated Advisor to the Company
Anita Ghanekar Tel: 0207 408 4090
Edward Mansfield
CHAIRMAN'S STATEMENT
Looking at our figures it is not readily apparent that we have
achieved a significant year. However, In February we successfully
completed a placing of GBP725,000 ("Placing") at current market
price. The success of this Placing was not just raising money but
demonstrated the support we have from our major shareholders for
the 21(st) century business that we are seeking to establish, and
their agreement of our ongoing strategy, confident that future
rewards will be significant. We have stuck to our guns and
increased our investment into online distribution of knowledge and
content and supporting systems using our journals as one of our
distribution bases as the world moves from print to digital. We
believe our commitment to this digitalised strategy and direction
will, in the coming year, be proven right. However, we are now more
than ever operating in a financial climate that is devastating.
The move from the printed word to online, mobile devices and
websites has been inexorable. This has been due not only to general
trend in the distribution of all information but also by savvy
customer demand to have quicker access to the success or otherwise
of advertising and market initiatives, where return on investment
can be quickly demonstrated online by the sophisticated reports
that can be generated.
The pharma world, in line with many other markets, is
increasingly demanding. Driven by regulation and a difficult market
economy all marketing, advertising and medical spend needs multi
distribution and clear definition of the target markets and who the
readers are, where they are; the demand is for positive response
from each initiative. The barriers to entry, always high, are now
immense.
This is the world that is now confronting us. The majors in our
field are spending multi millions to seek to create and develop the
systems that are fit for service in today's cyber space world. We
are there, which is being demonstrated by the ongoing relationships
that we have now established and are building with some of the
largest and most demanding multi-nationals in the world.
Because of the exacting demands of our customers for reports and
the information that they require from us, which is voluminous,
dealing with them on a manual and semi-manual basis has in the past
seriously limited our ability to go forward and undertake further
commissions. We have now successfully automated our systems, so the
cutting, slicing and presenting of our essential data and reports
is now becoming an automatic procedure, whereas previously it was
one requiring manual attention exhausting our resources by taking
both considerable time and the attention of skilled personnel.
This year we have successfully ticked many boxes:
-- Moved appropriate journals from print to online;
-- Automation - Has taken out 95% of the manual application;
-- Publishing - Successfully increased the frequency across our
portfolio and established two new areas;
-- Information distribution through our CRM - Successful
implementation across the floor improving sales knowledge, data
retention and security;
-- Information Technology - Rationalised our server structures
to increase security and increase bandwidth with cost savings
whilst, at the same time, moving to a higher level, thus increasing
flexibility; and
-- The expansion of our online portfolio to cover 18 therapy
areas.
Intellectual Property
We have an extensive wholly owned digital library of articles
which, over the years, have been producing a stream of income with
clients seeking reprints. This business generates an 80%
margin.
2008 - GBP450,000
2009 - GBP600,000
2010 - GBP720,000
Notwithstanding this income we have been seeking for some time
the right strategy to monetise this ever increasing asset more
effectively. We have now established the way forward. This will
increase the received benefits from our library considerably.
We have just launched a new web portal, touchhealthsciences.com,
and an exciting new journal called iHealth Connections.
This initiative is one of the most important we have ever
undertaken, one that we have been working on for some considerable
period of time. It relates to treatment and medicine of the future
which is both radical and uplifting, revealing tomorrow's world. It
is all about personalised treatment, a world where you just don't
take an aspirin, you take an aspirin designed for you.
Our new peer-reviewed journal, iHealth Connections, explores the
opportunities and challenges in the rapidly emerging field of
health sciences, where healthcare and life sciences connect. The
first issue was led by Guest Editor-in-Chief, Richard O'Day,
President of the Drug Information association. He is also Professor
of Clinical Pharmacology, University of New South Wales and St
Vincent's Hospital, Sydney which brings together some of the best
voices in health sciences.
With touchhealthsciences.com you will have online access to
Touch Briefings extensive health sciences portfolio, from drug
discovery to clinical development and safety, and health
outcomes.
touchhealthsciences.com delivers the content that management
believe will define the e-Healthcare era.
To launch our initiative we were invited to attend and exhibit
at the Annual Congress of the Drug Information Association (DIA)
which ran in Chicago from 20(th) June to 24(th) June 2011. It is
the most important and prestigious event of its kind and it is
supported by all of the majors i.e. Oracle, Cognizant, Medidata,
IBM, Hewlett Packard, SAS, Microsoft, Quintiles, Parexel, EMC
Corporation etc.
The Touch initiative of linking life science with healthcare was
met with both acclaim and strong interest in partnering in ongoing
and future initiatives from both areas.
Whilst we now look forward to an exciting and positive financial
year we have to temper our enthusiasm and optimism against the
reality of operating in a very difficult financial climate.
Funding requirements
It will not surprise shareholders that 2011 has been an
extremely challenging year for Touch. As previously announced, the
Company completed a secondary placement of 48,333,333 ordinary
shares raising GBP725,000 in February 2011. These funds have been
used to enhance and extend our digital assets with the intention of
furthering the development of the Company's Medical Education and
Communications Division, expanding our Pharma and Energy Divisions,
and for general working capital purposes allowing us to focus on
developing the business further. However, in order to meet its
obligations as they fall due the Company will be required to raise
additional capital. Shareholders should be aware that without the
additional funding, the Company will in due course not be able to
meet its obligations as they fall due.
In addition, given the economic environment some ongoing funding
uncertainties remain. Whilst the Directors have instituted measures
to preserve cash and secure additional funding these circumstances
create material uncertainties over future funding results and
cashflows.
The Directors have had discussions with certain other providers
of finance about additional facilities and subsequent to year end
an unsecured loan of GBP215,000 has been made available by Mr
Vincent Isaacs, Executive Chairman during June 2011.
Discussions with other providers of finance remain ongoing and
the Directors continue to pursue alternative sources of funding in
the event that the anticipated facilities, which the Directors
expect to secure, are not forthcoming,
The Directors have concluded that the combination of these
circumstances represent a material uncertainty that casts
significant doubt upon the Group's and the Company's ability to
continue as a going concern. Nevertheless, the Directors have a
reasonable expectation that the Group and the Company will have
adequate resources to continue in operational existence for the
foreseeable future.
Vincent Isaacs
Executive Chairman
27 September 2011
OPERATING AND FINANCIAL REVIEW
Introduction
Touch Group plc ('the Group') is a leading publisher of
independent market intelligence and analysis, offering a
comprehensive range of market-specific peer-review journals,
medical communication services and online communities. It
specialises in delivering in-depth scientific and technical
information to international organisations. The Group published 66
titles in the 12 month period to 31 March 2011 compared to 52
titles in the 15 months to March 2010.
Business Overview
The Group generated revenue for the 12 month period of GBP4.79
million (2010 - 15 months: GBP5.69 million) from continuing
operations and a gross margin of 50.5% (2010 - 15 months: 52.4%).
On a 12 month pro rata basis turnover increased by 5% compared to
the prior period.
The Energy publications produced revenues of GBP0.57 million for
the 12 months compared to GBP0.72 million for the 15 months in
2010. On a 12 month pro rata basis this represents a small 1%
reduction compared to 2010 levels.
Reprint revenues at GBP0.63 million for the 12 months compared
to the GBP0.75 million for the 15 months in 2010. On a 12 month
comparative this represents a 5% increase compared to 2010
levels.
Medical Communications revenues (which include both bespoke
projects and revenues generated from online) were GBP0.45 million
for the 12 months ended 31 March 2011. This compares to GBP0.46
million for the 15 months in 2010 and a 21% increase on a
comparative 12 month period.
European revenues (including the UK) were GBP2.86 million for
the 12 months ended 31 March 2011 compared to GBP3.23 million for
the 15 months ended 31 March 2010. On a pro rata 12 month basis
this represents an 11% increase. US revenues were GBP1.75 million
compared to GBP2.25 million which on a pro rata basis was a 3%
reduction.
Sales on an order basis (rather than the statutory published
basis) were GBP4.84 million compared to GBP5.75 million. On a pro
rata 12 month basis this represents a 5% increase.
As at 31 March 2011 the Group had forward orders of GBP2.94
million compared to forward orders of GBP2.86 million as at 31
March 2010.
Administrative expenses for the 12 month period were GBP3.92
million (2010 - 15 months: GBP4.86 million). On a pro rata 12
months this represents a 1% increase on the prior period.
In the prior period, asset impairments of GBP0.3 million were
recognised.
The operating loss for the 12 month period to 31 March 2011 was
GBP1.50 million (2010 - 15 months: GBP2.14 million). The adjusted
operating loss, which excludes investment impairments, other
operating income and share based payment charges was GBP1.50
million for the 12 month period (2010 - 15 months: GBP1.88
million).
The loss for the 12 month period to 31 March 2011 was GBP1.50
million (2010 - 15 months: GBP2.20 million) which resulted in a
loss per ordinary share of 0.9 pence (2010 - 15 months: 1.7
pence).
Balance Sheet and Cash Flows
As at period end the Group had net assets of GBP0.87 million
(2010: GBP1.66 million), with cash and cash equivalents of GBP0.32
million (2010: GBP0.99 million).
FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
Capital Risk Management
The Group aims to manage its overall capital so as to ensure
that companies within the Group continue to operate as going
concerns, whilst providing an adequate return to shareholders.
The Group's capital structure represents the equity attributable
to the shareholders of the company together with borrowings and
cash and cash equivalents. The structure is reviewed on a quarterly
basis to ensure that an appropriate level of gearing is being
used.
Risk Management Objectives
The Group manages financial risks relating to the companies
within the Group largely through its invoice finance arrangements
with Close Invoice Finance Limited. Consequently credit insurance
is provided on 90% of gross export debts, whilst domestic debts are
fully protected. As at 31 March 2011 29% of total debts were
protected under the scheme.
The principal risks to which the Group is exposed are market
risk (including currency risk, interest rate risk, and cash flow
risk), credit risk, and liquidity risk.
Market Risk
Market risk is the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in
market prices. The principal ways in which the Group is exposed to
such fluctuations are through currency risk and interest rate
risk.
Currency Risk Management
The Group publishes its financial statements in sterling and
conducts business in two main foreign currencies (US dollars and
Euros). As a result, it is subject to foreign currency exchange
risk due to exchange rate movements which affect the Group's
transaction costs.
In the period GBP1.8 million of revenue was invoiced in US
dollars whilst GBP1.5 million was invoiced in Euros. US and Euro
rate cards are reviewed by the company on a quarterly basis and
regulated on a regular basis in order to ensure exchange rates are
managed. Exchange gains realised in the period amounted to GBP0.08
million.
Credit Risk
Credit risk is the risk that a counter-party will cause a
financial loss to the Group by failing to discharge its obligation
to the Group.
The Group manages its exposure to this risk by applying bank
approved limits to the amount of credit exposure to any one
counter-party and employs strict minimum credit worthiness criteria
as to the choice of counter-party, thereby ensuring that there are
no significant concentrations of credit risk.
Liquidity Risk
The Group has in place an invoice finance agreement Close
Invoice Finance Limited, which enables the drawdown of up to 60% of
eligible sales invoices raised for published titles. The purpose of
this facility is to help the Group manage the working capital
requirements of its current publishing schedule.
Interest Rate Risk
The outstanding loan balance of GBP245,000 (2010: GBP260,000)
attracts a fixed rate of interest of 7% per annum on GBP95,000 and
3% on GBP150,000, payable for the term of the loan.
Key Performance Indicators
As part of the Group's performance management strategy a number
of key performance indicators are used. In addition the Board
regularly monitors revenue mix (by stream, title and employee),
cash flow and overhead commitments.
12 months 15 months
ended 31 ended 31
March 2011 March 2010
--------------------------------- ------------ ------------
Adjusted operating loss
* (GBP'000) (1,499) (1,877)
Adjusted EPS * (pence) (0.9) (1.5)
Sales orders (GBP'000): 4,844 5,747
Revenue by type (GBP'000):
- Core medical publications 2,587 3,026
- Core energy publications 569 717
- Medical communications 449 462
- Reprints 632 754
- Barter transactions (non-cash
sales) 557 733
Core non-barter revenue
per issue (GBP'000) 48 72
Total non-barter revenue
per employee (GBP'000) 54 64
Gross profit margin (%) 50.5 52.4
--------------------------------- ------------ ------------
* Adjusted for other operating income, investment impairments
and share based payment charges and credits
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the 12 months ended 31 March 2011 (15 months ended 31 March
2010)
12 months 15 months
ended 31 ended 31
March 2011 March 2010
Notes GBP'000 GBP'000
CONTINUING OPERATIONS
Revenue 4,794 5,692
Cost of sales (2,375) (2,712)
------------- ------------
GROSS PROFIT 2 2,419 2,980
Administrative expenses (3,918) (4,857)
Other operating expenses
- impairment - (267)
------------- ------------
2,
OPERATING LOSS 3 (1,499) (2,144)
Investment revenue 22 3
Finance costs (19) (57)
------------- ------------
LOSS BEFORE TAX (1,496) (2,198)
Tax - -
------------- ------------
LOSS FOR THE PERIOD (1,496) (2,198)
============= ============
There is no other profit or loss for the year,
therefore the comprehensive loss for the period
is GBP1,496,000.
LOSS PER SHARE
Basic (0.9)p (1.7)p
------------- ------------
Diluted (0.9)p (1.7)p
------------- ------------
All of the activities are classified as continuing.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 12 months ended 31 March 2011 (15 months ended 31 March
2010)
Share Share Merger Retained
Capital Premium Reserve Earnings Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
As at 1
January
2009 1,112 3,922 300 (2,533) 2,801
Loss for
the
period - - - (2,198) (2,198)
New shares
issued 507 553 - - 1,060
------------ ------------ ------------ ----------- =========
As at 1
April
2010 1,619 4,475 300 (4,731) 1,663
Loss for
the
period - - - (1,496) (1,496)
New shares
issued 483 221 - - 704
------------ ------------ ------------ ----------- ---------
As at 31
March
2011 2,102 4,696 300 (6,227) 871
CONSOLIDATED BALANCE SHEET
As at 31 March 2011 (31 March 2010)
2011 2010
Note GBP'000 GBP'000
NON-CURRENT ASSETS
Intangible assets 319 343
Property, plant and equipment 730 868
Investments 18 18
-------- ========
1,067 1,229
CURRENT ASSETS
Inventories 478 337
Trade and other receivables 1,433 1,374
Cash and cash equivalents 315 993
-------- ========
2,226 2,704
-------- ========
TOTAL ASSETS 3,293 3,933
======== ========
CURRENT LIABILITIES
Trade and other payables (1,601) (1,322)
Borrowings (245) (260)
-------- ========
(1,846) (1,582)
-------- ========
NET CURRENT ASSETS 380 1,122
-------- ========
NON-CURRENT LIABILITIES
Other (576) (688)
-------- ========
TOTAL LIABILITIES (2,422) (2,270)
======== ========
NET ASSETS 871 1,663
======== ========
EQUITY
Share capital 2,102 1,619
Share premium account 4,696 4,475
Merger reserve 300 300
Retained loss (6,227) (4,731)
-------- ========
TOTAL EQUITY 871 1,663
======== ========
STATEMENT OF CONSOLIDATED CASH FLOWS
For the period 12 months ended 31 March 2011 (15 months ended 31
March 2010)
12 months 15 months
ended 31 ended 31
March 2011 March 2010
GBP'000 GBP'000
Cash flows from operating
activities (932) 27
------------ ------------
Investing activities
Interest received 22 3
Acquisition of plant,
property and equipment (37) (859)
Compensation received
for relocation - 820
Acquisition of intangible
assets (119) (84)
------------ ------------
Net cash used in investing
activities (134) (120)
------------ ------------
Financing activities
Interest and similar expenses
paid (19) (57)
Repayment of borrowings (15) (190)
Invoice debt finance acquired/(repaid) (272) (244)
Repayment of obligations
under finance leases (13) (15)
New shares issued 707 1,061
------------ ------------
Net cash from financing
activities 388 555
------------ ------------
Net increase/(decrease)
in cash and cash equivalents (678) 462
Cash and cash equivalents
at beginning of year 993 531
------------ ------------
Cash and cash equivalents
at year end 315 993
============ ============
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1 SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of Preparation
The consolidated financial statements of Touch Group plc have
been prepared in accordance with International Financial Reporting
Standards (IFRS) as adopted by the European Union, Standing
Interpretations Committee (SIC) interpretations and International
Financial Reporting Interpretation Committee (IFRIC)
interpretations issued by the International Accounting Standards
Board (IASB) and the Companies Act 2006 applicable to companies
reporting under IFRS.
Touch Group plc is listed on AIM and is incorporated and
domiciled in the UK. The address of its registered office is
Saffron House, 6-10 Kirby Street, London EC1N 8TS.
The consolidated financial statements have been prepared on the
historical cost basis. The principal accounting policies adopted
are set out below. These policies have been applied consistently to
all years presented, unless otherwise stated.
(b) Going Concern
The Group's business activities, together with the factors
likely to affect its future development, performance and position
are set out in the Chairman's statement and the Operating and
Financial review. The principal risks and uncertainties facing the
business are described in the Operating and Financial Review.
As discussed in the Chairman's Statement and Operating and
Financial Review, the current economic climate is very challenging
and the Company has suffered a significant loss of GBP1.5 million
in the 12 months ended 31 March 2011 and, whilst the Company has
implemented a number of significant actions to address this, the
level of success of these actions in increasing revenues combined
with the current economic conditions creates uncertainty,
particularly over the level of demand for our products and
services, and our ability to convert our sales opportunities.
It will not surprise shareholders that 2011 has been an
extremely challenging year for Touch. As previously announced, the
Company completed a secondary placement of 48,333,333 ordinary
shares raising GBP725,000 in February 2011. These funds have been
used to enhance and extend our digital assets with the intention of
furthering the development of the Company's Medical Education and
Communications Division, expanding our Pharma and Energy Divisions,
and for general working capital purposes allowing us to focus on
developing the business further. However, in order to meet its
obligations as they fall due the Company will be required to raise
additional capital. Shareholders should be aware that without the
additional funding, the Company will in due course not be able to
meet its obligations as they fall due.
In addition, given the economic environment some ongoing funding
uncertainties remain. Whilst the Directors have instituted measures
to preserve cash and secure additional funding these circumstances
create material uncertainties over future funding results and
cashflows.
The Directors have had discussions with certain other providers
of finance about additional facilities and subsequent to year end
an unsecured loan of GBP215,000 has been made available by Mr
Vincent Isaacs, Executive Chairman during June 2011. The loan
attracts an interest rate of 3.25 per cent per annum. The loan
provided by Mr Isaacs and the interest payable thereon is
classified as a related party transaction. The independent
directors considered the loan to be in the best interests of the
Company and shareholders as a whole. Having subsequently consulted
with the Company's nominated adviser, the independent directors are
of the view that the terms of the loan were fair and reasonable
insofar as its shareholders are concerned.
Discussions with other providers of finance remain ongoing and
the Directors continue to pursue alternative sources of funding in
the event that the anticipated facilities, which the Directors
expect to secure, are not forthcoming,
The Directors have concluded that the combination of these
circumstances represent a material uncertainty that casts
significant doubt upon the Group's and the Company's ability to
continue as a going concern. Nevertheless, the Directors have a
reasonable expectation that the Group and the Company will have
adequate resources to continue in operational existence for the
foreseeable future.
For these reasons, they continue to adopt the going concern
basis in preparing the annual report and accounts.
(c) New Standards and Interpretations
There are no new standards and interpretations adopted by the
Group in the financial year.
(d) Standards not affecting the reported results of financial
position
The following new and revised Standards and Interpretations have
been adopted in the current year. Their adoption has not had any
significant impact on the amounts reported in these financial
statements but may impact the accounting for future transactions
and arrangements.
- IFRS First time adoption of International
1 Financial Reporting Standards;
- IFRS Share based payments;
2
- IFRS Non-current Assets Held for Sale and
5 Discontinued Operations;
- IFRS Operating segments;
8
- IAS 1 Presentation of Financial Statements;
- IAS 7 Statement of Cashflows;
- IAS 17 Leases;
- IAS 36 Impairment of Assets;
- IAS 39 Financial Instruments: Recognition and
Measurement;
- IFRIC Scope of IFRS 2;
8
- IFRIC IFRS 2- Group and Treasury share transactions;
11
- IAS 32 Financial Instruments and Presentation.
At the date of authorisation of these financial
statements, a number of new IFRS Standards and
IFRIC Interpretations have been issued which are
not yet effective for the period ended 31 March
2011 and which have not been adopted early. These
are listed below:
- IFRS First time Adoption of International
1 Financial Reporting Standards;
- IFRIC Extinguishing Financial Liabilities with
19 Equity Instruments;
- IFRIC IAS 19 - The Limit on A defined Benefit
14 Asset, Minimum Funding Requirements and
their Interaction;
- IAS 24 Related Party Disclosures;
- IFRS Business Combinations;
3
- IFRS Financial Instruments: Disclosures;
7
- IFRS First-time Adoption of International
1 Financial Reporting Standards;
- IAS 1 Presentation of Financial Statements;
- IAS 34 Interim Financial Reporting;
- IFRIC Customer Loyalty Programmes;
13
- IFRS Amendments to IFRS 7: Disclosures - Transfers
7 of Financial Assets;
- IFRS Amendments to IFRS 1: Severe hyperinflation
1 and Removal of Fixed Dates for First-time
Adopters
- IAS 12 Deferred Tax: Recovery of Underlying
Assets;
- IFRS Financial Instruments;
9
- IFRS Financial Instruments;
9
- IFRS Consolidated financial statements;
10
- IFRS Joint arrangements;
11
- IFRS Disclosure of interests in other entities;
12
- IFRS Fair value measurement;
13
- IAS 27 Separate financial statements;
- IAS 28 Investments in associates and joint ventures.
The Directors anticipate that the adoption of
these Standards and Interpretations in future
periods will have no material impact on the financial
statements of the Group.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the group controlled by Touch Group plc and its
subsidiaries (the 'Group'). Control is achieved where the Group has
the power to govern the financial and operating policies of an
investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or sold are included in the
consolidated financial statements from the date control commences
to the date control ceases, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies used
into line with those used by the Group.
All intra-group transactions, balances, income and expenditure
are eliminated on consolidation.
Critical Accounting Estimates and Judgements
Estimates and judgements are continually evaluated and are based
on historical experience and other factors, including expectation
of future events that are believed to be reasonable under the
circumstances. Due to inherent uncertainty involved in making
estimates and assumptions, actual outcomes could differ from those
assumptions and estimates. The critical judgements that have been
made in arriving at the amounts recognised in the Group's financial
statements and the key sources of estimation uncertainty that have
a significant risk of causing a material adjustment to the carrying
values of assets and liabilities within the next financial year are
discussed below.
In determining the fair value of equity settled share-based
payments and the related charge to the income statement, the Group
makes assumptions about future events and market conditions. In
particular, judgement must be made as to the likely number of
shares that will vest, and the fair value of each award granted.
The fair value is determined using the Black-Scholes valuation
model which is dependent on further estimates, including the
Group's future dividend policy, employee turnover, the timing with
which options will be exercised and the future volatility in the
price of the Group's shares. Such assumptions are based on publicly
available information and reflect market expectations and advice
taken from qualified personnel. Different assumptions about these
factors to those made by the Group could materially affect the
reported value of share based payments.
Revenue Recognition
Revenue is measured at the fair value of consideration received
or receivable and represents amounts receivable for goods and
services provided in the normal course of business, net of
discounts, VAT and other-sales related taxes.
a. Sales of goods
Revenue in respect of advertising services and editorial
sponsorship is recognised on publication.
b. Sales of services
Revenue in respect of online advertising and subscriptions is
recognised on a straight-line basis over the period of
subscription. Any unrecognised element is carried within deferred
revenue.
c. Barter transactions
Revenue and costs in respect of barter transaction for
advertising are recognised only where there is persuasive evidence
at which, if it had not been exchanged, the advertising would have
been sold for cash in a similar transaction.
Leased assets
Where assets are financed by leasing agreements where the risks
and rewards are substantially transferred to the group ("finance
leases") the assets are treated as if they had been purchased
outright and the corresponding liability to the leasing company is
included as an obligation under finance leases. Depreciation on
leased assets is charged to the income statement on the same basis
as owned assets.
Leasing payments are treated as consisting of capital and
interest elements and the interest is charged to the income
statement.
Leases where substantially all the risks and rewards of
ownership of assets remain with the lessor are accounted for as
operating leases and are accounted for on a straight line basis
over the term of the lease.
Taxation
Current tax, including UK corporation tax and foreign tax, is
provided at amounts expected to be paid (or recovered) using the
tax rates and laws that have been enacted or substantively enacted
by the balance sheet date.
Deferred tax is provided in full using the balance sheet
liability method. Deferred tax is the future tax consequences of
temporary differences between the carrying amounts and tax bases of
assets and liabilities shown on the balance sheet. Deferred tax
assets and liabilities are not recognised if they arise in the
following situations: the initial recognition of goodwill; or the
initial recognition of assets and liabilities that affect neither
accounting nor taxable profit. The amount of deferred tax provided
is based on the expected manner of recovery or settlement of the
carrying amount of assets and liabilities using tax rates enacted
or substantially enacted at the balance sheet date.
The group does not recognise deferred tax liabilities or
deferred tax assets on temporary differences associated with
investments in subsidiaries as it is not considered probable that
the temporary differences will reverse in the foreseeable future.
It is the group's policy to reinvest undistributed profits arising
in group companies.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the asset can be utilised. The carrying amount of the
deferred tax assets are reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset
to be recovered.
Intangible assets
Intangible assets acquired by the Group are stated at cost less
accumulated amortisation and impairment losses. Intangible assets
are amortised on a straight-line basis over their useful lives in
accordance with IAS 38 'Intangible Assets'. Assets are amortised
over their estimated useful lives. A review is carried out at each
financial year end and with changes in accordance with IAS 8
'Accounting
Policies, Changes in Accounting Estimates and Errors' considered
if necessary. The estimated useful lives are as follows:
- Acquired publishing rights 20 years
- Online development costs 3-5 years
Development costs are capitalised only where the costs are
directly related to the creation of an asset, are separately
identifiable and where the future profits from that asset will
exceed the costs capitalised. Development costs cease to be
capitalised when the asset starts to generate revenues.
Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and any recognised impairment loss.
Depreciation is provided to write off the cost less estimated
residual value of non-current assets by equal instalments over
their estimated useful economic lives as follows:
- Leasehold improvements over the remaining life of the
lease
- Plant, vehicles and equipment 3-7 years
Assets held under finance leases are depreciated over their
expected useful lives on the same basis as owned assets, or where
shorter, the term of the relevant lease.
Compulsory Purchase Order Compensation
Fixed assets acquired using funds received from the Government
under the compulsory purchase order on the Group's previous head
office are capitalised within the relevant fixed asset category at
cost. A balance, equivalent to the compensation received and used
to acquire these assets is shown within creditors, and is being
amortised to the profit and loss account so as to match the
depreciation charge on the related fixed assets. The creditor
balance is split between less than one year and greater than one
year to reflect the periods in which the creditor will be
released.
Impairment of assets
A review is carried out at the end of each financial period end
to determine if any assets have suffered an impairment loss. If
such indication exists, the asset's recoverable amount is estimated
and compared to its carrying value. Impairment losses are
recognised in the income statement when an asset's carrying value
exceeds its recoverable amount.
Inventories - work in progress
Inventories are stated at the lower of cost and net realisable
value. Work in progress consists of costs incurred relating to
unpublished material and deferred revenue at the period end.
Financial instruments
Financial assets and liabilities are recognised on the Group's
balance sheet when the Group becomes a party to the contractual
provisions of the instrument.
Borrowings:
Interest bearing borrowings and overdrafts are recorded at the
proceeds received, net of direct issue costs. Finance charges,
including premiums payable on settlement or redemption and
incremental costs directly attributable to the issue, are accounted
for on an accruals basis as part of finance expenses in the income
statement using the effective interest rate method and are added to
the carrying amount of the instrument to the extent that they are
not settled in the period that they arise.
Trade receivables
Trade receivables are reflected net of estimated provisions for
doubtful client accounts. The provision is based on historic
collection patterns and with reference to the ageing of certain
balances.
Trade payables
Trade payables are measured at fair value.
Share based payments
The Group issues equity-settled share-based payments to certain
employees. The fair value of the employee services received in
exchange for the grant of the options is recognised as an expense
with a corresponding increase in equity. The total amount to be
expensed over the vesting period is determined by reference to the
fair value of the options granted, excluding the impact of any
non-market vesting conditions. Non-market vesting conditions are
included in assumptions about the number of options that are
expected to vest. At each balance sheet date, the Group revises its
estimates of the number of options that are expected to vest. It
recognises the impact of the revision to original estimates, if
any, in the income statement, with a corresponding adjustment to
equity.
Fair value is measured using the Black - Scholes model.
Investments
Non-current investments are shown at cost less provision for
impairment. A review is carried out at the end of each financial
period end to determine if any assets have suffered an impairment
loss.
2 LOSS PER ORDINARY SHARE
12 months ended 15 months ended 31 March 2010
31 March 2011
GBP'000 GBP'000
The calculation of the basic and diluted earnings
per share is based on the following:
Earnings Earnings for the
purpose of basic and
diluted earnings per
share (1,496) (2,198)
------------ ------------------------------
Number of shares
Weighted average number
of ordinary shares for
the purposes of basic
and diluted earnings per
share 167,435,511 127,961,378
------------ -------------
Share options granted to employees could potentially dilute
basic earnings per share in the future but were not included in the
calculation of diluted earnings per share as they are anti-dilutive
for the period presented.
3 NOTES TO THE STATEMENT OF CONSOLIDATED CASHFLOWS
12 months ended 31 15 months ended 31
March 2011 March 2010
GBP'000 GBP'000
Loss before tax for the
period: (1,496) (2,198)
Adjustments for
Investment revenue (22) (3)
Finance costs 19 57
Depreciation of
property, plant and
equipment 175 195
Amortisation of
intangibles 143 166
Impairment - 230
Operating cash flows
before movements in
working capital (1,181) (1,553)
Increase in inventories (141) (25)
Reduction/(Increase) in
receivables 216 2,027
Decrease in payables 174 (422)
Net cash from operating
activities (932) 27
======================== ========================
4 RELATED PARTY NOTE
The only intra-group transaction is the application of
management charges of GBP957,000 (2010: GBP1,203,000). A
GBP1,000,000 provision was made during the year against amounts
owed to Touch Group plc from its subsidiary companies. At the end
of the year Touch Group plc was owed an aggregate sum of
GBP3,000,000 (2010: GBP2,890,000) by its subsidiary companies.
At the end of the year the Group had GBP245,000 (2010:
GBP260,000) of outstanding borrowings with organisations for which
a Group director acts as a trustee and has a non-beneficial
interest. Interest is charged at a rate of 7% per annum on
GBP95,000 and 3% on GBP150,000.
In June 2011 an unsecured loan of GBP215,000 was made to the
Company by Mr Vincent Isaacs, Executive Chairman. Interest on the
loan is charged at 3.25% per annum. The loan provided by Mr Isaacs
and the interest payable thereon is classified as a related party
transaction. The independent directors considered the loan to be in
the best interests of the Company and shareholders as a whole.
Having subsequently consulted with the Company's nominated adviser,
the independent directors are of the view that the terms of the
loan were fair and reasonable insofar as its shareholders are
concerned.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR PGUPCBUPGGMM
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