TIDMAVS
RNS Number : 8300P
Avesco Group PLC
11 June 2015
AVESCO GROUP plc
RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2015
Avesco Group plc (AIM: AVS), a leading international provider of
services to the corporate presentation, entertainment and broadcast
markets, announces its results for the six months ended 31 March
2015.
KEY HIGHLIGHTS FOR THE SIX MONTHS TO 31 MARCH 2015
-- Revenues increased to GBP66.0m (six months ended 31 March 2014: GBP65.4m)
-- Operating profit increased to GBP5.5m (six months ended 31 March 2014: loss of GBP0.5m)
-- Trading profit increased to GBP5.5m (six months ended 31 March 2014: GBP4.7m)*
-- Trading EBITDA up 9% to GBP14.6m (six months ended 31 March 2014: GBP13.5m)*
-- Profit before tax of GBP4.6m (six months ended 31 March 2014: loss of GBP1.1m)
-- Basic earnings per share from continuing operations of 13.3p
(six months ended 31 March 2014: loss per share of 12.4p)
-- Trading ahead of plan with full year results likely to exceed the Board's prior expectations
-- Interim dividend increased by a third to 2.0p (six months ended 31 March 2014: 1.5p)
* As described in note 3, the Group uses certain non-GAAP
alternative measures to assess underlying operating
performance.
Richard Murray, Chairman, commented:
"I am delighted to be able to report another strong performance
from the Avesco Group, with Interim trading profits for the six
month period to 31 March 2015 at their highest levels since 2001
(when the Group still maintained an interest in "Who Wants To Be A
Millionaire?"). The main drivers behind the successful first half
of the year were a continuation of the previous excellent results
from our Creative Technology ("CT") division in the US and the
virtual elimination of trading losses in our CT business in
Germany.
The outlook for the final six months of the financial year is
just as encouraging, with the inaugural edition of the European
Games expected to generate significant income for the Group.
As a result the full year results are again likely to exceed the
Board's prior expectations. With continuing forward momentum in the
businesses, we are able to maintain our focus on increasing
profitability, generating cash and growing dividends."
For further information please contact:
Avesco Group plc
Richard Murray, Chairman 01293 583400
John Christmas, Group Finance
Director
finnCap
Julian Blunt/Scott Mathieson,
Corporate Finance
Malar Velaigam, Corporate Broking 020 7220 0500
Chairman's Statement
I am delighted to be able to report another strong performance
from the Avesco Group, with Interim trading profits for the six
month period to 31 March 2015 at their highest levels since 2001
(when the Group still maintained an interest in "Who Wants To Be A
Millionaire?"). The main drivers behind the successful first half
of the year were a continuation of the previous excellent results
from our Creative Technology ("CT") division in the US and the
virtual elimination of trading losses in our CT business in
Germany.
Results
Revenue in the six months ended 31 March 2015 saw a small
increase to GBP66.0m (six months ended 31 March 2014: GBP65.4m).
This increase in revenue was achieved despite the scaling down of
our restructured businesses and the lack of any major events in the
period (the six months to 31 March 2014 benefited from revenues
associated with the Winter Olympics in Sochi).
With the Group's restructuring programme largely complete, the
operating profit for the six months ended 31 March 2015 of GBP5.5m
(six months ended 31 March 2014: GBP0.5m loss) included no
exceptional items. The six months ended 31 March 2014 included
GBP5.2m of such charges, the vast majority of which related to the
restructuring of our CT business in Germany.
Trading profits (which exclude restructuring costs, compensation
for loss of office, payments to LTIP holders and bonuses in
connection with the Disney litigation receipt, and other
non-recurring costs) for the six months ended 31 March 2015 were,
therefore, the same as the operating profit of GBP5.5m,
representing a 17% improvement on the same period last year (six
months ended 31 March 2014: GBP4.7m).
The basic earnings per share from continuing operations
increased to 13.3p (six months ended 31 March 2014: loss per share
of 12.4p).
Our main trading division, CT, saw revenues grow by GBP2.0m to
GBP51.6m (six months ended 31 March 2014: GBP49.6m) and trading
profit by GBP2.2m to GBP5.5m (six months ended 31 March 2014:
GBP3.3m). CTUS again provided the bulk of CT's profits, growing
revenue by 14% in the process, and there were good performances
from CT in the Middle East and in Spain. CT Asia Pacific, however,
continues to struggle, and our objective of getting that business
to breakeven is likely to take longer than anticipated. It was
especially pleasing to note the turnaround at CT Germany where we
have largely eliminated the significant losses and de-risked the
business by reducing fixed costs.
In mclcreate, our full service business, higher revenue of
GBP7.9m (six months ended 31 March 2014: GBP7.4m) and an improved
margin enabled trading profits to grow to GBP0.6m (six months ended
31 March 2014: GBP0.2m), with the Scottish branches performing
particularly well.
In our Broadcast Services division, Presteigne Broadcast Hire's
profits benefitted last year from the disposal of a significant
quantity of equipment as the company sought to reposition itself
away from the projects side of its business and to focus much more
on dry hire work. With Fountain Studios, the other business in the
division, having just a steady opening period, overall revenue
dipped to GBP6.8m (six months ended 31 March 2014: GBP8.8m)
although last year included revenue from the overseas Presteigne
businesses that were closed prior to the current year. The
divisional trading profit reduced to a loss of GBP0.4m (six months
ended 31 March 2014: GBP0.8m profit).
Taxation continues to be relatively significant, with an
effective rate of 45% as high taxable profits earned in the US
(which are taxed at around 40%) cannot be offset against taxable
losses elsewhere in the world. As our US profits have increased, so
there has been an increase in our total tax charge to GBP2.1m for
the six months ended 31 March 2015 (six months ended 31 March 2014:
GBP1.9m).
There is normally a modest debt outflow in the first half year
as we invest in new equipment and this year is no different.
However net debt of GBP25.1m as at 31 March 2015 (31 March 2014:
GBP21.7m) remains comfortably covered by trading EBITDA of GBP26.5m
for the 12 months to 31 March 2015. Net investment in fixed assets
during the first half year was GBP10.1m (six months ended 31 March
2014: GBP7.4m), with over 80% of the funds going to support CT in
the US.
As at 31 March 2015, the net assets of the Group were GBP34.3m
(31 March 2014: GBP31.5m) or GBP1.80 per share (31 March 2014:
GBP1.67 per share).
As a sign of the Board's confidence in the outcome for the
current year, we are again increasing the interim dividend, this
time to 2.0p per share (2014: 1.5p per share). This payment will be
made on 1 October 2015 to shareholders on the register on 4
September 2015 and the shares will be quoted ex dividend from 3
September 2015
Outlook
Trading in the six months to 31 March 2015 has exceeded our
expectations and the outlook for the final six months of the
financial year is just as encouraging, with the inaugural edition
of the European Games (scheduled to be held in Baku, Azerbaijan in
June) expected to generate significant income for CT London and the
Group. The restructuring measures that we took last year have also
enabled us to produce a more stable and less volatile set of
trading results, closing the gap in performance previously seen
between the odd and even years.
As a result of the improved outlook and trading, the full year
results are again likely to exceed the Board's prior expectations.
With continuing forward momentum in the businesses, we are able to
maintain our focus on increasing profitability, generating cash and
growing dividends.
Richard Murray
June 2015
Unaudited condensed consolidated income statement
For the six months ended 31 March 2015
Year
Six months ended
ended 31 March 30 September
2015 2014 2014
GBP000s GBP000s GBP000s
------------------------------------ --------- --------- --------------
Continuing operations
Revenue 65,974 65,366 126,391
Cost of sales (40,060) (40,572) (80,186)
------------------------------------ --------- --------- --------------
Gross profit 25,914 24,794 46,205
Operating expenses and
income (20,407) (25,574) (45,721)
Share of associate's (loss)/profit (28) 280 384
------------------------------------ --------- --------- --------------
Trading profit 5,479 4,681 6,253
Exceptional items - (5,181) (5,385)
------------------------------------ --------- --------- --------------
Operating profit/(loss) 5,479 (500) 868
Finance income 3 21 23
Finance costs (863) (623) (1,321)
------------------------------------ --------- --------- --------------
Profit/(loss) before income
tax 4,619 (1,102) (430)
Income tax expense (2,098) (1,859) (2,310)
------------------------------------ --------- --------- --------------
Profit/(loss) from continuing
operations 2,521 (2,961) (2,740)
Profit on discontinued
operation, net of tax - 1,192 1,192
Profit/(loss) for the financial
period 2,521 (1,769) (1,548)
------------------------------------ --------- --------- --------------
Attributable to:
Owners of the Company 2,542 (1,769) (1,548)
Non-controlling interests (21) - -
------------------------------------ --------- --------- --------------
2,521 (1,769) (1,548)
------------------------------------ --------- --------- --------------
Pence Pence
per per Pence
share share per share
Earnings/(losses) per share
for profit attributable
to the equity holders of
the company
- basic 13.3p (7.4)p (7.2)p
- diluted 13.1p (7.4)p (7.2)p
Earnings/(losses) per share
for profit attributable
to the equity holders of
the company from continuing
operations
- basic 13.3p (12.4)p (12.8)p
- diluted 13.1p (12.4)p (12.8)p
Alternative performance measures (non-GAAP)
For the six months ended 31 March 2015
Year
Six months ended
ended 31 March 30 September
2015 2014 2014
GBP000s GBP000s GBP000s
------------------------- ----------- ---------------------- -------------------
Operating profit/(loss) 5,479 (500) 868
Adjusted to exclude:
Restructuring costs
and compensation
for loss of office - 5,017 5,738
Payments to LTIP
holders and bonuses
in connection with
the Disney settlement - (162) (246)
Other non-recurring
costs - 326 (107)
------------------------- ----------- ---------------------- -------------------
Exceptional items - 5,181 5,385
Trading profit 5,479 4,681 6,253
Net finance costs (860) (602) (1,298)
Trading profit after
net finance costs 4,619 4,079 4,955
------------------------- ----------- ---------------------- -------------------
Income tax expense (2,098) (1,859) (2,310)
Trading profit after
net finance costs
and income tax expense 2,521 2,220 2,645
------------------------- ----------- ---------------------- -------------------
Trading EBITDA 14,611 13,458 24,968
------------------------- ----------- ---------------------- -------------------
Adjusted earnings Pence Pence Pence
per share per share per share per share
------------------------- ----------- ---------------------- -------------------
- basic 13.3p 9.3p 12.4p
- diluted 13.1p 9.3p 12.4p
Refer to note 3 for a full description of the alternative
performance measures adopted by the Group.
Unaudited condensed consolidated statement of comprehensive
income
For the six months ended 31 March 2015
Year
Six months ended
ended 31 March 30 September
2015 2014 2014
GBP000s GBP000s GBP000s
--------------------------- -------- -------- --------------
Profit/(loss) for the
period 2,521 (1,769) (1,548)
Other comprehensive
income/(expense)
Currency translation
differences 965 (199) 187
--------------------------- -------- -------- --------------
Total comprehensive
income/(expense) for
the period 3,486 (1,968) (1,361)
--------------------------- -------- -------- --------------
Attributable to:
Owners of the Company 3,507 (1,968) (1,361)
Non-controlling interests (21) - -
--------------------------- -------- -------- --------------
3,486 (1,968) (1,361)
--------------------------- -------- -------- --------------
All items in other comprehensive income will be recycled
subsequently to the income statement.
Unaudited condensed consolidated balance sheet
As at 31 March 2015
31 March 31 March 30 September
2015 2014 2014
GBP000s GBP000s GBP000s
-------------------------------- --------- ------------------------- -------------------------
Assets
Non-current assets
Property, plant and
equipment 58,748 56,428 57,787
Intangible assets 121 146 130
Investment in associate - 423 327
Deferred income tax
assets 3,793 3,384 3,919
Trade and other receivables 147 119 148
--------------------------------- --------- ------------------------- -------------------------
62,809 60,500 62,311
Current assets
Inventories 757 1,385 596
Trade and other receivables 30,210 29,574 23,801
Current income tax assets - 119 -
Cash and cash equivalents 10,398 6,994 9,065
41,365 38,072 33,462
-------------------------------- --------- ------------------------- -------------------------
Total assets 104,174 98,572 95,773
--------------------------------- --------- ------------------------- -------------------------
Liabilities
Non-current liabilities
Borrowings and loans 26,507 20,749 22,602
Deferred income tax
liabilities 4,933 3,926 5,292
Provisions 1,770 2,760 2,477
--------------------------------- --------- ------------------------- -------------------------
33,210 27,435 30,371
Current liabilities
Trade and other payables 25,079 29,573 24,543
Current income tax liabilities 1,870 1,262 384
Borrowings and loans 8,948 7,920 7,902
Provisions 768 898 430
---------------------------------
36,665 39,653 33,259
-------------------------------- --------- ------------------------- -------------------------
Total liabilities 69,875 67,088 63,630
--------------------------------- --------- ------------------------- -------------------------
Total assets less total
liabilities 34,299 31,484 32,143
--------------------------------- --------- ------------------------- -------------------------
Equity
Capital and reserves
attributable to equity
holders of the company
Ordinary shares 2,095 2,095 2,095
Share premium 11,194 11,194 11,194
Capital redemption 12,646 12,646 12,646
Translation reserves 1,197 (154) 232
Retained earnings 7,141 5,703 5,976
--------------------------------- --------- ------------------------- -------------------------
Equity attributable
to owners of the Company 34,273 31,484 32,143
Non-controlling interests 26 - -
-------------------------------- --------- ------------------------- -------------------------
Total equity 34,299 31,484 32,143
--------------------------------- --------- ------------------------- -------------------------
Unaudited condensed consolidated statement of changes in
equity
For the six months ended 31 March 2015
Share Share Capital
capital premium redemption Other Retained Non-controlling Total
account account reserve reserves earnings Total interest equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------------ -------------- -------------- ---------------- -------------- --------------- -------------- ---------------- --------------
Balance at 1
October 2014 2,095 11,194 12,646 232 5,976 32,143 - 32,143
Profit/(loss)
for the period - - - - 2,542 2,542 (21) 2,521
Other
comprehensive
income net of
tax - - - 965 - 965 - 965
------------------- -------------- -------------- ---------------- -------------- --------------- -------------- ---------------- --------------
Total
comprehensive
income - - - 965 2,542 3,507 (21) 3,486
Transactions
with owners
in their capacity
as owners:
Non-controlling
interest acquired - - - - - - 47 47
External dividends
paid - - - - (1,141) (1,141) - (1,141)
LTIP and share
options - - - - (236) (236) - (236)
------------------- -------------- -------------- ---------------- -------------- --------------- -------------- ---------------- --------------
Balance at 31
March 2015 2,095 11,194 12,646 1,197 7,141 34,273 26 34,299
------------------- -------------- -------------- ---------------- -------------- --------------- -------------- ---------------- --------------
Share Share Capital
capital premium redemption Other Retained Non-controlling Total
account account reserve reserves earnings Total interest equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------------ -------------- -------------- ---------------- -------------- --------------- -------------- ---------------- --------------
Balance at 1
October 2013 2,649 23,286 - 45 47,219 73,199 - 73,199
Loss for the
period - - - - (1,769) (1,769) - (1,769)
Other
comprehensive
expense net
of tax - - - (199) - (199) - (199)
------------------- -------------- -------------- ---------------- -------------- --------------- -------------- ---------------- --------------
Total
comprehensive
expense - - - (199) (1,769) (1,968) - (1,968)
Transactions
with owners
in their capacity
as owners:
Issue of B and
C shares 12,092 (12,092) - - - - - -
Redemption of
B shares (12,092) - 12,092 - (12,092) (12,092) - (12,092)
Dividend on
C shares - - - - (16,455) (16,455) - (16,455)
Purchase of
ordinary shares (554) - 554 - (9,763) (9,763) - (9,763)
External dividends
paid - - - - (1,013) (1,013) - (1,013)
LTIP and share
options - - - - (424) (424) - (424)
------------------- -------------- -------------- ---------------- -------------- --------------- -------------- ----------------
Balance at 31
March 2014 2,095 11,194 12,646 (154) 5,703 31,484 - 31,484
------------------- -------------- -------------- ---------------- -------------- --------------- -------------- ---------------- --------------
Share Share Capital
capital premium redemption Other Retained Non-controlling Total
account account reserve reserves earnings Total interest equity
GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s GBP000s
------------------ -------------- -------------- ---------------- -------------- --------------- -------------- ---------------- --------------
Balance at 1
October 2013 2,649 23,286 - 45 47,219 73,199 - 73,199
Loss for the
period - - - - (1,548) (1,548) - (1,548)
Other
comprehensive
income net of
tax - - - 187 - 187 - 187
------------------- -------------- -------------- ---------------- -------------- --------------- -------------- ---------------- --------------
Total
comprehensive
income/(expense) - - - 187 (1,548) (1,361) - (1,361)
Transactions
with owners
in their capacity
as owners:
Issue of B and
C shares 12,092 (12,092) - - - - - -
Redemption of
B shares (12,092) - 12,092 - (12,092) (12,092) - (12,092)
Dividend on
C shares - - - - (16,455) (16,455) - (16,455)
Purchase of
ordinary shares (554) - 554 - (9,769) (9,769) - (9,769)
External dividends
paid - - - - (1,013) (1,013) - (1,013)
LTIP and share
options - - - - (366) (366) - (366)
----------------
Balance at 30
September 2014 2,095 11,194 12,646 232 5,976 32,143 - 32,143
------------------- -------------- -------------- ---------------- -------------- --------------- -------------- ---------------- --------------
Unaudited condensed consolidated cash flow statement
For the six months ended 31 March 2015
Year
Six months ended
ended 31 March 30 September
2015 2014 2014
GBP000s GBP000s GBP000s
----------------------------- --------------------- --------------------- ----------------------
Cash flows from operating
activities
Cash generated from
operations 9,286 1,000 16,415
Income tax paid (1,488) (846) (1,268)
Net cash generated
from operating activities 7,798 154 15,147
----------------------------- --------------------- --------------------- ----------------------
Cash flows from investing
activities
Purchases of property,
plant and equipment (12,439) (10,591) (23,492)
Proceeds from sale
of property, plant
and equipment 2,296 3,214 4,450
Dividends from associate - - 200
Acquisition of subsidiary 634 - -
Net cash used in investing
activities (9,509) (7,377) (18,842)
----------------------------- --------------------- --------------------- ----------------------
Cash flows from financing
activities
Net interest paid (836) (529) (1,224)
Proceeds from borrowings 15,381 12,141 23,361
Repayments of borrowings (11,807) (4,229) (13,544)
Purchase of ordinary
shares - (9,763) (9,769)
Redemption of B shares - (10,192) (12,092)
Dividends paid to Company's
shareholders (283) (16,775) (17,468)
--------------------- ---------------------
Net cash generated
from/(used in) financing
activities 2,455 (29,347) (30,736)
----------------------------- --------------------- --------------------- ----------------------
Net increase/(decrease)
in cash, cash equivalents
and bank overdrafts 744 (36,570) (34,431)
Cash, cash equivalents
and bank overdrafts
at beginning of period 8,968 43,107 43,107
Exchange gains on cash
and bank overdrafts 686 11 292
Cash, cash equivalents
and bank overdrafts
at end of period 10,398 6,548 8,968
Bank overdrafts at
end of period - 446 97
Cash, cash equivalents
at end of period 10,398 6,994 9,065
----------------------------- --------------------- --------------------- ----------------------
Notes to the interim report and accounts
1. General information
Avesco Group plc ('the Company') and its subsidiaries (together
'the Group') is an international media services business. The Group
has subsidiaries around the world and sells in the UK, USA, Europe,
Asia Pacific and the Middle East.
The Company is a public limited company which is admitted to
trading on the AIM Market of the London Stock Exchange and is
incorporated and domiciled in the UK. The address of its registered
office is Unit E2, Sussex Manor Business Park, Gatwick Road,
Crawley, West Sussex, RH10 9NH.
The registered number of the Company is 01788363.
2. Status of interim report and accounts
The interim report and accounts are unaudited but have been
reviewed by the auditors, Ernst & Young LLP, and their
independent review report is appended to this document. The interim
report and accounts, which were approved by the Board of Directors
on 11 June 2015, are not full accounts within the meaning of
section 435 of the Companies Act 2006.
The figures for the year ended 30 September 2014 have been
extracted from the audited annual report and accounts that have
been delivered to the Registrar of Companies. The auditors, Ernst
& Young LLP, reported on those accounts under section 495 of
the Companies Act 2006. Their report was unqualified and did not
contain a statement under section 498 of that Act.
3. Basis of preparation
The interim report and accounts have been prepared using the
accounting policies to be applied in the annual report and accounts
for the year ending 30 September 2015. These are consistent with
those included in the previously published annual report and
accounts for the year ended 30 September 2014, which have been
prepared in accordance with IFRS as adopted by the European
Union.
The directors have a reasonable expectation that the Group has
adequate resources to continue operating for the foreseeable
future, and for this reason they have adopted the going concern
basis of preparation in the consolidated interim financial
statements.
Alternative performance measures
The Group uses alternative non-Generally Accepted Accounting
Practice ("non-GAAP") financial measures which are not defined
within IFRS. The Directors use these measures in order to assess
the underlying operational performance of the Group and as such,
these measures are important and should be considered alongside the
IFRS measures. The following non-GAAP measures are referred to in
these interim report and accounts.
a) Trading profit/loss
'Trading profit/loss' is separately disclosed, being defined as
operating profit adjusted to exclude restructuring costs and
compensation for loss of office, payments to LTIP holders and
bonuses in connection with the Disney settlement, and other
non-recurring costs. Other non-recurring costs relate to items
which management believe do not accurately reflect the underlying
trading performance of the business in the period. Examples of
other non-recurring costs are one off costs and charges incurred
which management believe do not accurately reflect the trading
performance of the business. The Directors believe that trading
profit/loss is an important measure of the underlying performance
of the Group.
b) Adjusted earnings per share
'Adjusted earnings per share' is calculated by dividing the
profit for the period excluding restructuring costs and
compensation for loss of office, payments to LTIP holders and
bonuses in connection with the Disney settlement, and other
non-recurring costs by the weighted average number of ordinary
shares in issue during the period. The Directors believe that
adjusted earnings per share provides an important measure of the
underlying performance of the Group. Previously adjusted earnings
per share excluded the deferred tax charge/credit, the directors
believe that this change better reflects the underlying performance
of the business. The comparative figures have been restated for
consistency.
c) Trading EBITDA
Trading earnings before interest, taxation, depreciation and
amortisation ('EBITDA') is separately disclosed, being defined as
trading profit/loss adjusted to exclude depreciation and
amortisation of software. Trading EBITDA includes profits on
disposal of property, plant and equipment. The Directors believe
that trading EBITDA is an important measure of the underlying
performance of the Group.
4. Segmental information
Year
Six months ended
ended 31 March 30 September
2015 2014 2014
GBP000s GBP000s GBP000s
----------------------------- -------- --------------------- --------------
Revenue
Creative Technology 51,624 49,556 96,258
Full Service 7,889 7,426 14,446
Broadcast 6,756 8,760 16,266
Inter Segment revenue (295) (376) (579)
----------------------------- --------------------- --------------
Group revenue 65,974 65,366 126,391
----------------------------- -------- --------------------- --------------
Operating profit
Creative Technology 5,478 3,341 4,420
Full Service 558 239 229
Broadcast (431) 810 1,680
Head Office (126) 291 (76)
----------------------------- --------------------- --------------
Trading profit 5,479 4,681 6,253
Restructuring costs
and compensation for
loss of office - (5,017) (5,738)
Payments to LTIP holders
and bonuses in connection
with the Disney settlement - 162 246
Other non-recurring
costs - (326) 107
Operating profit/(loss) 5,479 (500) 868
----------------------------- -------- --------------------- --------------
5. Trading earnings before interest, taxation, depreciation and amortisation ('EBITDA')
Year
Six months ended
ended 31 March 30 September
2015 2014 2014
GBP000s GBP000s GBP000s
-------------------------- -------- -------- --------------
Trading profit 5,479 4,681 6,253
Depreciation 9,093 8,706 17,880
Impairment - - 726
Amortisation of software 39 71 109
Trading EBITDA 14,611 13,458 24,968
-------------------------- -------- -------- --------------
Trading EBITDA is defined in note 3.
6. Taxation
Year
Six months ended
ended 31 March 30 September
2015 2014 2014
GBP000s GBP000s GBP000s
------------------------------ -------- -------- --------------
Current tax:
Current tax charge
on profits for the
year 2,653 319 393
Adjustments in respect
of prior periods - - (428)
------------------------------ -------- -------- --------------
Total current tax 2,653 319 (35)
Deferred tax (credit)/charge (555) 1,540 2,345
------------------------------ -------- -------- --------------
Income tax expense 2,098 1,859 2,310
------------------------------ -------- -------- --------------
7. Earnings per share
Year
Six months ended
ended 31 March 30 September
2015 2014 2014
GBP000s GBP000s GBP000s
------------------------------- ---------------------- ------------------- --------------------
Profit/(loss) for the
financial period 2,521 (1,769) (1,548)
Profit on discontinued
operations, net of tax - (1,192) (1,192)
------------------------------- ---------------------- ------------------- --------------------
Profit/(loss) from continuing
operations 2,521 (2,961) (2,740)
Restructuring costs
and compensation for
loss of office - 5,017 5,738
Payments to LTIP holders
and bonuses in connection
with the Disney settlement - (162) (246)
Other non-recurring
costs - 326 (107)
Trading profit after
net finance costs and
income tax expense 2,521 2,220 2,645
------------------------------- ---------------------- ------------------- --------------------
Weighted average number
of shares (net of treasury
shares)
For basic earnings per
share (000's) 18,930 23,891 21,361
Effect of dilutive share
options (000's) 298 1,250 848
For diluted earnings
per share (000's) 19,228 25,141 22,209
------------------------------- ---------------------- ------------------- --------------------
Earnings/(losses) per
share
Basic 13.3p (7.4)p (7.2)p
Diluted 13.1p (7.4)p (7.2)p
------------------------------- ---------------------- ------------------- --------------------
Continuing basic 13.3p (12.4)p (12.8)p
Continuing diluted 13.1p (12.4)p (12.8)p
------------------------------- ---------------------- ------------------- --------------------
Adjusted basic 13.3p 9.3p 12.4p
Adjusted diluted 13.1p 9.3p 12.4p
------------------------------- ---------------------- ------------------- --------------------
Discontinued operations
basic 0.0p 5.0p 5.6p
Discontinued operations
diluted 0.0p 5.0p 5.6p
------------------------------- ---------------------- ------------------- --------------------
Basic earnings per share have been calculated by dividing
profit/loss for the period by the weighted average number of
ordinary shares in issue during the period.
Diluted earnings per share have been calculated by dividing
profit/loss for the period by the weighted average number of
ordinary shares in issue during the period, adjusted for any awards
under the Company's Long Term Incentive Plan ("LTIP") where
pre-specified performance conditions have been satisfied and any
required conversion of dilutive potential options.
Adjusted earnings per share have been calculated as per note
3.
8. Analysis of net debt
Other At
At non Currency 31
1 October Cash cash translation March
2014 flow changes differences 2015
GBP000s GBP000s GBP000s GBP000s GBP000s
----------------- ----------- --------- ---------------- ------------- -----------
Cash at bank
and in hand 9,065 636 - 697 10,398
Bank overdrafts (97) 108 - (11) -
------------------- ----------- --------- ---------------- ------------- -----------
Net cash 8,968 744 - 686 10,398
Bank loans
due in more
than one year (16,848) 1,000 - (634) (16,482)
Hire purchase
obligations
due in less
than one year (7,805) 2,241 (2,988) (396) (8,948)
Hire purchase
obligations
due in more
than one year (5,754) (6,815) 2,988 (444) (10,025)
Net debt (21,439) (2,830) - (788) (25,057)
------------------- ----------- --------- ---------------- ------------- -----------
Other At
At non Currency 31
1 October Cash cash translation March
2013 flow changes differences 2014
GBP000s GBP000s GBP000s GBP000s GBP000s
----------------- ----------- --------- ---------------- ------------- -----------
Cash at bank
and in hand 43,699 (36,710) - 5 6,994
Bank overdrafts (592) 140 - 6 (446)
------------------- ----------- --------- ---------------- ------------- -----------
Net cash 43,107 (36,570) - 11 6,548
Bank loans
due in more
than one year (7,419) (7,269) - 235 (14,453)
Finance lease
obligations
due in less
than one year (7,303) 2,594 (2,886) 121 (7,474)
Finance lease
obligations
due in more
than one year (6,048) (3,237) 2,886 103 (6,296)
Net cash/(debt) 22,337 (44,482) - 470 (21,675)
------------------- ----------- --------- ---------------- ------------- -----------
Other At
At non Currency 30
1 October Cash cash translation September
2013 flow changes differences 2014
GBP000s GBP000s GBP000s GBP000s GBP000s
----------------- ----------- --------- ---------------- ------------- -----------
Cash at bank
and in hand 43,699 (34,859) - 225 9,065
Bank overdrafts (592) 428 - 67 (97)
------------------- ----------- --------- ---------------- ------------- -----------
Net cash 43,107 (34,431) - 292 8,968
Bank loans
due in more
than one year (7,419) (9,492) - 63 (16,848)
Hire purchase
obligations
due in less
than one year (7,303) 5,613 (6,182) 67 (7,805)
Hire purchase
obligations
due in more
than one year (6,048) (5,938) 6,182 50 (5,754)
-----------
Net cash/(debt) 22,337 (44,248) - 472 (21,439)
------------------- ----------- --------- ---------------- ------------- -----------
9. Interim and final dividends
A final dividend for the year ended 30 September 2014 of 4.5p
per ordinary share amounting to a total of GBP858,000 was approved
and was paid on 8 April 2015 to shareholders on the register on 12
March 2015.
An interim dividend for the year ended 30 September 2014 of 1.5p
per ordinary share amounting to a total of GBP283,000 was approved
and was paid on 1 October 2014 to shareholders on the Register on 5
September 2014.
A special dividend of GBP1.10 per C share was approved and was
paid on 24 January 2014 under the Return of Cash (see note 10).
An interim dividend of 2p per ordinary share will be paid on 1
October 2015 to shareholders on the Register at 6.00pm on 4
September 2015. The shares will be quoted ex dividend from 3
September 2015.
10. Return of cash and buy-back agreement
The Company returned GBP28.5m of the net cash receipt from the
Disney litigation funds to shareholders by way of a B & C Share
Scheme (the "Return of Cash" or "Scheme). On 24 January 2014
10,992,850 B shares and 14,958,700 C shares were allotted to
shareholders through the capitalisation of the share premium
reserve. On 24 January 2014 the Company redeemed the B shares for
GBP1.10 per share, totalling GBP12.1m, and a dividend of GBP1.10
per share was declared on each C share, totalling GBP16.4m.
Following redemption of the B Shares, all of the B Shares were then
cancelled. Following the declaration of dividend on the C shares,
these shares became deferred shares which carried no rights to
participate in the profits of the Company or a return of capital.
The deferred shares were purchased by the Company for an aggregate
sum of 1p, and cancelled. None of the B shares, C shares and
deferred shares were admitted to trading on AIM or admitted to
listing or trading on any recognised investment exchange.
The Company and Taya Communications Ltd ("Taya") entered into a
Buy-back agreement on 23 December 2013 pursuant to which the
Company bought back from Taya 7,584,724 ordinary shares of the
Company ("Buy-back Shares"), out of Taya's total holding of
7,784,878 ordinary shares, at a price of 124p per ordinary share on
5 February 2014, leaving Taya holding a balance of 200,154 ordinary
shares, representing 1.09% of the then total voting rights of the
Company as reduced by the cancellation or transfer to treasury of
the Buy-back Shares. The price payable for the Buy-back Shares
represented a five percent premium over the average closing
mid-market price per ordinary share for the forty-five business day
period ending on 17 December 2013, being the latest practicable
date prior to the date of the release of the Company's Preliminary
Results in respect of the year ended 30 September 2014, less the
amount of 110 pence (being the cash entitlement payable per
Buy-back Share under the Return of Cash). The total consideration
payable was GBP9.4m plus legal and professional fees of GBP0.4m. Of
the 7,584,724 ordinary shares bought back from Taya, 5,539,149 were
cancelled immediately and the balance transferred to treasury. As
at 31 March 2015, 1,877,318 shares were held in treasury.
11. Discontinued operations
InvestinMedia Holdings Limited ("InvestinMedia"), a subsidiary
of the Company, sold its investment in Complete Communications
Corporation Limited ("Complete") on 20 December 2006. The buyer of
Complete pursued legal action in the United States against Disney
on behalf of InvestinMedia and other vendors. This legal action
concluded in the year ended 30 September 2013 and the Group has
received its share of the Disney litigation award. Cash received
was GBP50.6m although this was reduced by estimated tax liabilities
of GBP4.1m and indemnities of GBP1.0m, offset by a net credit of
GBP0.2m in relation to professional fees resulting in a profit on
discontinued operations of GBP45.7m. As a result of further
refinement of the tax base cost on the associated chargeable gain
the Group's estimated tax liability was reduced by GBP1.2m in the
prior period.
The consolidated income statement and consolidated cash flow
statement include the following amounts in relation to discontinued
operations:
Year
Six months ended
ended 31 March 30 September
Consolidated income
statement 2015 2014 2014
GBP000s GBP000s GBP000s
----------------------------- --------- -------- --------------
Revenue - - -
Tax credit - 1,192 1,192
----------------------------- --------- -------- --------------
Profit on discontinued
operation, net of tax - 1,192 1,192
----------------------------- --------- -------- --------------
Consolidated cash flow
statement
Operating activities - (553) (1,144)
----------------------------- --------- -------- --------------
Cash used from discontinued
operations - (553) (1,144)
----------------------------- --------- -------- --------------
12. Acquisitions
On 7 November 2014 Sports Technology Ltd, an associate of the
Group, repurchased 40 of its own shares from Delta Sound
Incorporated (UK) Ltd for GBP109,578. The shares were cancelled
immediately following their repurchase. The Group now holds 66.67%
of the issued share capital of Sports Technology Ltd, which is
therefore a subsidiary of the Group.
The exercise to determine the fair value of the identifiable
assets acquired and liabilities assumed was completed during the
period and the amounts recognised are as follows:
Recognised amounts of identifiable
assets acquired and liabilities Book Fair
assumed Value Value
GBP000s GBP000s
------------------------------------ -------- --------
Property, plant and equipment 1 1
Intangible assets 1 1
Trade and other receivables 86 86
Cash and cash equivalents 634 634
Trade and other payables (339) (339)
Current tax liabilities (243) (243)
------------------------------------ -------- --------
Identifiable net assets acquired 140 140
Non-controlling interest
in Sports Technology Limited (47)
Goodwill 7
100
------------------------------------ -------- --------
Consideration
Fair value of equity interest
in Sports Technology Limited 100
100
------------------------------------ -------- --------
Goodwill of GBP7,000 has been charged to the consolidated income
statement on the basis that it is immaterial.
13. Contingent liabilities
InvestinMedia Holdings Limited ("InvestinMedia"), a subsidiary
of the Company, sold its investment in Complete Communications
Corporation Limited ("Complete") on 20 December 2006. In connection
with the sale, InvestinMedia and other vendors gave certain
warranties and indemnities to the buyer. So far as the Company is
aware, no legal claims have been brought against any company in the
Complete group that are outstanding and would give rise to
liability on the part of InvestinMedia and other vendors under the
warranties and indemnities.
14. Post balance sheet events
As at 31 March 2015 the Group had an unrecognised contingent
gain of GBP1.0m in respect of the receipt of its share of funds
received from the historic Disney litigation (See Note 11). The
gain was contingent on indemnities given in respect of the
settlement.
No notice of claim has been received under these indemnities
and, subsequent to the period end, the Group believes that any
claim under the indemnities would now be time barred. The post
period end lapse of the indemnities, and hence the ability to
recognise the contingent gain, is a non adjusting post balance
sheet event and as such no adjustment has been included in these
accounts. The gain of GBP1.0m will be reflected in the second half
of the year.
15. Distribution of interim report and accounts
Copies of this interim report and accounts are available from
the Company's web site (www.avesco.com) or from the Company's
registered office: Avesco Group plc, Unit E2, Sussex Manor Business
Park, Gatwick Road, Crawley, West Sussex, RH10 9NH. Telephone: +44
(0) 1293 583 400. Fax: +44 (0) 1293 583 410. E-mail:
mail@avesco.com.
INDEPENDENT REVIEW REPORT TO AVESCO GROUP PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 March 2015, which comprises the consolidated
income statement, consolidated statement of comprehensive income,
consolidated balance sheet, consolidated statement of changes in
equity and consolidated cash flow statement and the related
explanatory notes that have been reviewed. We have read the other
information contained in the half-yearly financial report 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 in accordance with
guidance contained in International Standard on Review Engagements
2410 (UK and Ireland) "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the
Auditing Practices Board. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the
Company, for our work, for this report, or for the conclusions we
have formed.
Directors' Responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the Directors. The Directors are responsible
for preparing the half-yearly financial report in accordance with
the AIM Rules issued by the London Stock Exchange which require
that it is presented and prepared in a form consistent with that
which will be adopted in the Company's annual accounts having
regard to the accounting standards applicable to such annual
accounts.
As disclosed in note 3, the annual financial statements of the
Group are prepared in accordance with IFRSs 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 the AIM Rules issued by the London Stock
Exchange.
Our Responsibility
Our responsibility is to express to the Company 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" issued by the Auditing Practices Board for use in
the United Kingdom. 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 31
March 2015 is not prepared, in all material respects, in accordance
with the accounting policies outlined in Note 3, which comply with
IFRS's as adopted by the European Union and in accordance with the
AIM Rules issued by the London Stock Exchange.
Ernst & Young LLP
Reading
11 June 2015
This information is provided by RNS
The company news service from the London Stock Exchange
END
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