TIDMDWN
RNS Number : 3098H
Dawson Holdings PLC
26 May 2011
26 May 2011
Half Year Report
For the period ended 31 March 2011
Dawson Holdings PLC ("Dawson" or "the Group"), the media
services business, today announces its half year results for the
period ended 31 March 2011.
Financial performance for the continuing operations:
-- Group performance exceeded expectations, driven by clear
progress in each of the businesses
-- Revenue of GBP39.3m (2010: GBP39.4m)
-- Underlying performance:
-- Adjusted(1) ( ) profit before tax up 50% to GBP0.9m (2010:
GBP0.6m)
-- Adjusted(1) ( ) basic earnings per share increased 60% to
0.8p (2010: 0.5p)
-- Reported results(2) :
-- Reported profit before tax of GBP0.9m (2010: GBP0.1m)
-- Basic earnings per share of 0.8p (2010: 0.1p).
-- Cash generation from continuing operations was up 79% to
GBP2.5m (2010: GBP1.4m)
-- Net cash at 31st March 2011 of GBP4.2m (30 September 2010:
GBP1.5m)
(1) Adjusted results are for the continuing operations before
exceptional items including restructuring costs of GBPnil in the
reporting period (2010: GBP0.5m)
(2) Reported results are after the exceptional items outlined
above
Operational summary:
-- Three cash generative and profitable businesses, each
operating from stronger platforms following restructuring and
performance enhancement initiatives implemented over the last two
years:
-- Books grew revenues and operating profit driven by
significant growth in export and eBook sales and an improving share
of the UK print market;
-- Media Direct grew operating profit following a recovery in
the UK market and internal initiatives to improve performance;
and
-- Marketing Services grew operating profit, with new client
wins and rigorous cost management offsetting subdued demand from
existing clients.
Commenting on the outlook, Nigel Freer, Chairman, said:
"We are delighted to report an improved Group performance driven
by clear progress in each of our businesses in the first six months
of this financial year.
"Each of our profitable and cash generative businesses is now
operating from a stronger platform and the momentum evident in the
first six months of the year has continued for the first six weeks
of the second half and produced satisfactory sales, margins and
cash generation. Consequently, despite the continuing economic
uncertainty, the Board is encouraged by recent trading and, should
the company continue to trade at current levels, expects a strong
performance in the second half of the year."
For further information, please contact: www.dawson.co.uk
Dawson Holdings PLC 0203 167 4100
Hugh Cawley, Chief Executive
Shore Capital and Corporate Limited 020 7408 4090
Dru Danford / Edward Mansfield
MHP 020 3128 8794
Katie Hunt 07884 494112
Chairman's Statement
Introduction
We are delighted to report an improved Group performance driven
by clear progress in each of our businesses in the first six months
of this financial year. This has been achieved, despite continued
uncertainty in the economic climate, as a result of the
restructuring and other management initiatives put in place over
the last two years. The marked improvement seen in each of our
divisions' financial results, without the aid of any noticeable
improvement in their respective markets, has confirmed the
resilience and growth potential of these businesses. Their strong
profit and cash generation has continued to improve during the
reporting period as the benefits of our actions over the past two
years began to be realised. All three businesses showed both
qualitative and quantitative improvements against the equivalent
period.
Dawson Books ('Books') is clearly a business with excellent
potential and we are delighted that it has been able to reverse the
historic declines in revenue and profits. With operating profit
before exceptionals up by 33 per cent, it is benefiting from the
actions taken within the business to stabilise its UK print
business, grow its export activities and take advantage of the
strong demand for its market-leading eBooks platform, dawsonera.
Whilst the market is undoubtedly difficult for print product in the
UK, Books' repositioning to match its offering more closely with
the changing requirements of its customers, and actively
demonstrating that to be so, have already begun to pay
dividends.
The Dawson Media Direct business ('DMD'), with its exciting
global proposition, has seen a strong recovery in its UK business
in the first half compared to the end of the 2010 financial year.
This is the result of a combination of internal initiatives to
improve performance and a return of UK publishers to providing
promotional copy. This, combined with the widespread portfolio of
international customers, stood us in good stead to continue the
business's turnaround. The process of acquiring the remaining 50
per cent of Phantom Media Ltd ("Phantom") is drawing to a close now
and, whilst Phantom itself will add little profit or cash in the
short term, our ability to be able to supply an airline's complete
in-flight entertainment package, both print and digital, is
becoming a reality. We are confident that, over time, that twin
offering will be seen as an attractive option.
The general marketing activity levels in the UK have not
improved as we had hoped although our Dawson Marketing Services
division ('DMS') has performed well against that still-tough
back-drop. Rigorous cost management and an ability to attract new
client interest has helped this business weather a tough period of
depressed levels of existing client activity and outperform many of
its competitors.
Summary Financials
Revenue for the first six months ending 31 March 2011 was
GBP39.3 million (2010: GBP39.4m) and profit from continuing
operations before exceptional items was GBP0.9 million (2010:
GBP0.6 million). Profit before tax and exceptional items was GBP0.9
million (2010: GBP0.6 million), giving earnings per share on
continuing operations before exceptional items of 0.8 pence (2010:
0.5 pence). Exceptional items, in relation to the continuing
operations were GBP nil (2010: GBP0.5 million), after which profit
before tax was GBP0.9 million (2010: GBP0.1 million), giving
earnings per share on continuing operations of 0.8 pence (2010: 0.1
pence). Cash generation from continuing operations was GBP2.5
million (2010: GBP1.4 million). Net cash at 31st March 2011 stood
at GBP4.2 million compared to GBP1.5 million at 30th September
2010.
People
It is a self-evident truth that the continued success of Dawson
owes everything to its people throughout the Group and it is my
pleasure once again sincerely to thank all our employees for their
hard work, cheerful resilience and impressive resourcefulness over
these past months. Better numbers speak for an improved business,
but it is the motivated and energetic workforce that truly gives
the business its voice.
Corporate activity
The board announced on 31st January that it was in preliminary
discussions which may or may not lead to an offer being made for
the entire issued share capital of the Company and the Board
continues to explore opportunities to enhance shareholder value. A
further announcement will be made in due course, as
appropriate.
Current trading and outlook
The continuation of economic uncertainty has not prevented the
Group from improving its performance markedly during the period
under review. Trading in the second half of the year to date has
begun well and is in line with management expectations. Each of our
businesses is profitable and cash generative and operating from a
stronger platform. Following an encouraging start to the second
half, your board remains confident of the Group's strong
performance in the second half of the year.
Nigel Freer
Chairman
26 May 2011
Chief Executive's Review
Trading in the first half of our 2011 year has shown a strong
improvement overall in comparison with the challenging environment
of 2010, with every one of our businesses showing progress against
the prior year. There remain further improvements that can and will
be made to the Group's businesses, but it is satisfying to note
that the rescue of 2009 and stabilisation of 2010 have so far been
followed, as broadly planned, by turnaround in 2011.
Group results - continuing operations
GBPm H1 2011 H1 2010
Revenue 39.3 39.4
Profit from operations before exceptional
items 0.9 0.6
Exceptional items - (0.5)
-------- --------
Profit from operations after exceptional
items 0.9 0.1
-------- --------
The markets for Dawson Books ('Books') and Dawson Marketing
Services ('DMS') have remained flat during the period under review,
but the implementation in prior periods of both incremental and
more fundamental operational changes throughout the Group, together
with some improvements in Dawson Media Direct's ('DMD') UK market,
have begun to bear fruit during the first six months of the
year.
Divisional operating profits - continuing operations before
exceptional items
GBPm H1 2011 H1 2010
Books 0.8 0.6
Media Direct 0.4 0.3
Marketing Services 0.3 0.2
-------- --------
1.5 1.1
Central costs (0.6) (0.5)
Net finance costs - -
Profit before tax and exceptional
items 0.9 0.6
-------- --------
The market for Books has remained difficult in the UK, where
uncertainty over higher education funding has been a source of
concern to customers. We believe nonetheless that our market share
has begun to improve as we have matched our products more closely
to the changing needs of the customer base. The make-up of the
business continues to evolve with export and the rapidly growing
eBooks becoming an ever larger proportion, reflecting in part where
the future opportunities for this business lie.
The UK market for DMD strengthened from its relatively weak base
in the second half of last year, as some degree of confidence
returned to the airline industry and to business travel. The
effects of the internal restructuring of the business have come
through as expected, underpinning the core business and allowing
for investment in in-flight entertainment, which has been seen for
some time to be both tactically and strategically important.
The apparent fragility of the recovery in the UK business
climate has led to extreme caution in the client base of DMS and a
significant number of clients are either preserving their budgets
at recession-type levels or seeking lower-cost solutions to their
fulfilment needs.
Dawson Books
GBPm H1 2011 H1 2010
Revenue 22.8 22.5
Profit from operations before exceptional
items 0.8 0.6
Exceptional items - (0.1)
-------- --------
Operating profit after exceptional
items 0.8 0.5
-------- --------
Books experienced its most successful six months for some
considerable time; revenues increased as we focused more closely on
what our customers require and profits improved as we also
addressed a number of cost opportunities. Whilst UK print sales
were 5 per cent down on last year's levels overall, this masks the
pick-up we have seen over the more recent months as our more active
sales approach is beginning to yield fruit. In export, we saw a
continuation of the growth pattern of the past twelve months, as
our export sales increased by 15 per cent over last year and in
eBooks, strong growth continued at about 56 per cent over the prior
period. The turnaround of the Books business's fortunes is well
underway in a great many respects and we still have a number of
opportunities ahead of us.
Dawson Media Direct
GBPm H1 2011 H1 2010
Revenue 12.6 12.7
Profit from operations before exceptional
items 0.4 0.3
Exceptional items - (0.2)
-------- --------
Operating profit after exceptional
items 0.4 0.1
-------- --------
DMD's trading saw marked improvements over the exit rate from
the 2010 financial year. The UK publishing market returned to
providing copy to airline travellers owing to a modest improvement
in prospects for advertising success. In addition, the effects of
the internal measures taken to improve performance during the past
year also yielded noticeable benefits in the bottom line of the
business.
The acquisition of Phantom, which will be completed soon, will
allow us to integrate its operations with those of DMD itself and
offer a complete service to our customers. With our partners in
bluebox, we have made excellent progress in developing the software
which allows first run-movies to be securely loaded onto Apple
iPads and there has already been great interest in this application
from a number of airlines.
Dawson Marketing Services
GBPm H1 2011 H1 2010
Revenue 3.9 4.2
Profit from operations before exceptional
items 0.3 0.2
Operating profit after exceptional
items 0.3 0.2
-------- --------
Concerns about the robustness of the economic recovery in the UK
have suppressed marketing activity levels amongst DMS's clients,
resulting in a decline in turnover. However, despite this, the
business has managed to improve its profit against the equivalent
period last year. A number of clients are looking to reduce the
obvious cost of their fulfilment activity, resulting in some cases
to a change to those suppliers whose emphasis is on cost rather
than service, but others, to avoid the hidden costs of poor
service, are moving in the other direction. DMS has been a
beneficiary of the latter.
Cash flow and net debt
Once again, we are pleased to be able to report that, through
close cash management, the Group has made further substantial
progress in preserving its resources to allow for future
investment. The businesses are cash generative, of course, but a
repayment of some GBP0.6m from the tax authorities added a boost to
our efforts. The business is clearly well placed to sustain the
level of investment it needs to grow, without necessarily requiring
external borrowings. The board is satisfied that it has sufficient
funds or facilities in place to sustain the business for at least
the next twelve months.
Taxation
The effective tax rate at the half-way point of the financial
year on current year profits is 35%, owing to the impact of
unrelieved overseas losses. The tax charge for the period benefits
from a credit of GBP0.2m from over-provisions relating to previous
periods.
Exceptional items, key judgements and potential
uncertainties
In preparing the half year report, management are required to
make judgements and assumptions that affect the application of
accounting policies and the reported amounts of assets and
liabilities, income and expenses. These estimates and associated
assumptions are based on historical experience and upon various
other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making
judgements about the carrying value of assets and liabilities that
are not readily available from other sources. Actual experience may
vary from these estimates.
Areas where uncertainties exist and to which management
judgement has been applied include the carrying values of goodwill
at GBP6.5 million (2010 GBP6.5 million) and the contingent
consideration liability of GBP3.5 million (2010 GBP5.6
million).
Hugh Cawley
Chief Executive
26 May 2011
Condensed consolidated statement of comprehensive income
For the half year ended 31st March 2011
Unaudited Unaudited Audited
Half year Half year Year
ended ended ended
31st 31st 30th
March March September
2011 2010 2010
Notes GBPm GBPm GBPm
Continuing operations
Revenue 4 39.3 39.4 78.4
Net operating costs (38.4) (39.3) (77.8)
---------- ---------- ---------
Results from operating activities 4 0.9 0.1 0.6
Profit from continuing operations
Profit from operations, before
exceptional items 0.9 0.6 1.2
Exceptional items 5 - (0.5) (0.6)
---------- ---------- ---------
Profit from operations after
exceptional items 0.9 0.1 0.6
---------- ---------- ---------
Finance costs - - (0.1)
---------- ---------- ---------
Profit before income tax 0.9 0.1 0.5
Income tax expense (0.1) - (0.3)
Profit for the period from
continuing operations 0.8 0.1 0.2
Loss from discontinued operation
(net of income tax) 7 (0.1) (1.7) (1.7)
Profit/(loss) for the period 0.7 (1.6) (1.5)
---------- ---------- ---------
Other comprehensive income
Foreign currency translation differences
for foreign operations - - (0.2)
---------- ---------- ---------
Other comprehensive income for the period,
net of income tax - - (0.2)
Total comprehensive income for the
period 0.7 (1.6) (1.7)
---------- ---------- ---------
Profit/(loss) attributable to:
Owners of the Company 0.7 (1.6) (1.5)
Non-controlling interest - - -
---------- ---------
Profit/(loss) for the period 0.7 (1.6) (1.5)
---------- ---------- ---------
Total comprehensive income
attributable to:
Owners of the Company 0.7 (1.6) (1.7)
Non-controlling interest - - -
---------- ---------
Total comprehensive income for the
period 0.7 (1.6) (1.7)
---------- ---------- ---------
Earnings/(loss) per share
Total operations Pence Pence Pence
Basic earnings/(loss) per share 6 0.7 (1.7) (1.6)
---------- ---------- ---------
Diluted earnings/(loss) per share 6 0.7 (1.7) (1.6)
---------- ---------- ---------
Continuing operations
Basic earnings per share 6 0.8 0.1 0.2
---------- ---------- ---------
Diluted earnings per share 6 0.8 0.1 0.2
---------- ---------- ---------
Condensed consolidated statement of changes in equity
For the half year ended 31st March 2011
Reserve
for Minority
Share Share treasury Translation Hedging Retained equity Total
capital premium shares reserve reserve loss interest equity
GBPm GBPm GBPm GBPm GBPm GBPm GBPm GBPm
At 30th
September 2009
(Audited) 0.7 7.7 (0.1) 1.4 - (7.1) - 2.6
Profit for the
period - - - - - (1.6) - (1.6)
Other
comprehensive
income for the
period - - - - - - - -
Issue of shares 0.3 2.3 - - - - - 2.6
At 31st March
2010
(Unaudited) 1.0 10.0 (0.1) 1.4 - (8.7) - 3.6
Profit for the
period - - - - - 0.1 - 0.1
Other
comprehensive
income for the
period - - - (0.2) - - - (0.2)
At 30th
September 2010
(Audited) 1.0 10.0 (0.1) 1.2 - (8.6) - 3.5
Profit for the
period - - - - - 0.7 - 0.7
Other
comprehensive
income for the
period - - - - - - - -
At 31st March
2011
(Unaudited) 1.0 10.0 (0.1) 1.2 - (7.9) - 4.2
-------- -------- --------- ------------ -------- --------- --------- -------
Condensed consolidated statement of financial position
As at 31st March 2011
Unaudited Unaudited Audited
As at As at As at
31st March 31st March 30th September
Notes 2011 2010 2010
GBPm GBPm GBPm
Assets
Non-current assets
Property, plant and
equipment 0.7 0.9 0.8
Goodwill and intangible
assets 7.3 7.6 7.5
Investments in equity
accounted investees 0.4 0.6 0.6
Other investments 0.5 0.5 0.5
Trade and other receivables 0.3 - -
Deferred tax asset - 0.1 0.0
Total non-current assets 9.2 9.7 9.4
------------ ------------ ----------------
Inventories 0.8 0.6 0.4
Trade and other receivables 15.4 17.0 15.3
Cash and cash equivalents 4.9 3.3 3.3
Total current assets 21.1 20.9 19.0
Total assets 30.3 30.6 28.4
------------ ------------ ----------------
Liabilities
Provisions 0.4 0.4 0.4
Other liabilities 2.2 3.9 3.4
Total non-current
liabilities 2.6 4.3 3.8
------------ ------------ ----------------
Trade and other payables 20.9 18.6 18.7
Income tax liability 0.6 0.6 0.5
Financial liabilities -
loans and borrowings 0.7 1.8 1.6
Short-term provisions 1.3 1.7 0.3
Total current liabilities 23.5 22.7 21.1
Total liabilities 26.1 27.0 24.9
------------ ------------ ----------------
Equity
Attributable to equity
holders of the Company
Share capital 1.0 1.0 1.0
Share premium 10.0 10.0 10.0
Reserve for treasury shares (0.1) (0.1) (0.1)
Translation reserve 1.2 1.4 1.2
Retained loss (7.9) (8.7) (8.6)
Total equity attributable
to equity holders of the
Company 4.2 3.6 3.5
Non-controlling interest - - -
------------ ------------ ----------------
Total equity 4.2 3.6 3.5
Total equity and
liabilities 30.3 30.6 28.4
------------ ------------ ----------------
Condensed consolidated statement of cash flows
For the half year ended 31st March 2011
Unaudited Unaudited Audited
Half year Half year Year
ended ended ended
30th
31st March 31st March September
2011 2010 2010
Notes GBPm GBPm GBPm
Cash flows from operating
activities
Profit/(loss) from
continuing operations 0.7 (1.6) (1.5)
Adjustments for:
Depreciation 0.2 0.2 0.3
Amortisation of intangible
assets 0.2 0.2 0.5
Net finance cost - - 0.1
Income tax expense 0.1 - 0.3
Loss from discontinued
operation 0.1 1.7 1.7
---------- ---------- ---------
1.3 0.5 1.4
Change in inventories (0.4) 0.1 0.3
Change in trade and other
receivables 0.4 1.4 2.9
Change in provisions - (0.9) 0.1
Change in other liabilities - (0.5) (0.4)
Change in trade and other
payables 0.6 1.1 (1.9)
---------- ---------- ---------
1.9 1.7 2.4
Interest paid - - (0.1)
Income tax received/(paid) 0.6 (0.1) (0.3)
Net cash from operating
activities 2.5 1.6 2.0
---------- ---------- ---------
Cash flows from investing
activities
Acquisition of property,
plant and equipment - (0.2) (0.2)
Expenditure on intangible
assets (0.1) - (0.1)
Acquisition of subsidiary,
net of cash acquired 0.1 - -
Net cash used in investing
activities - (0.2) (0.3)
---------- ---------- ---------
Cash flows from financing
activities
Repayment of bank and other
loans - (2.1) (2.1)
Drawdown of working capital
facility - 2.1 2.1
Net cash used in financing
activities - - -
---------- ---------- ---------
Net increase in cash and cash
equivalents 2.5 1.4 1.7
Cash and cash equivalents at start
of period 1.7 0.1 0.1
Effect of exchange rate
fluctuations on cash held - - (0.1)
Cash and cash equivalents
at end of period 9 4.2 1.5 1.7
---------- ---------- ---------
Analysis of net cash and
cash equivalents
Cash and cash equivalents 9 4.9 3.3 3.3
Overdrafts 9 (0.7) (1.8) (1.6)
4.2 1.5 1.7
---------- ---------- ---------
Notes to the Half Year Report
For the half year ended 31st March 2011
1. Reporting entity
Dawson Holdings PLC ("The Company") is a company incorporated in
England and Wales. These condensed consolidated interim financial
statements of the Company for the half year ended 31st March 2011
comprise the Company and its subsidiaries ("the Group").
2. Basis of preparation and statement of compliance
Statement of compliance
These condensed consolidated half year financial statements have
been prepared in accordance with IAS 34 "Interim Financial
Reporting" as adopted by the EU. They do not include all of the
information required for full annual financial statements and
should be read in conjunction with the Group's consolidated
financial statements for the year ended 30th September 2010 which
are prepared in accordance with IFRSs as adopted by the EU.
The abridged information for the year ended 30th September 2010
has been extracted from the Group's statutory accounts for that
period. Those accounts were reported on by the Company's auditors,
and delivered to the Registrar of Companies. The report of the
auditors (i) was unqualified, (ii) did not include a reference to
any matters to which the auditors drew attention by way of emphasis
without qualifying their report, and (iii) did not contain a
statement under section 498 (2) or (3) of the Companies Act
2006.
The Group's consolidated financial statements for the year ended
30th September 2010 are available on request from the Company's
registered office (Blenheim House, 1 Blenheim Road, Epsom, Surrey
KT19 9AP), or at www.dawson.co.uk.
These condensed consolidated half year financial statements are
unaudited, but have been reviewed by KPMG Audit Plc, and their
report is set out below.
These condensed consolidated half year financial statements were
approved by the Board of Directors on 26th May 2011.
3. Significant accounting policies
Except as disclosed below, the accounting policies applied by
the Group in these half year financial statements are consistent
with those applied by the Group in its financial statements for the
year ended 30 September 2010.
The following relevant amendments to standards or
interpretations are mandatory for the first time for the financial
year ending 30 September 2011:
IFRS 2 Share based payments (group cash settled share based
payment transactions)
IFRS 3 Business combinations (Measurement of non-controlling
interests/requirements for contingent consideration)
IFRS 8 Operating Segments (Disclosure of information about
segment assets)
IAS 32 Financial instruments: presentation (classification of
rights issues)
IAS 39 Financial instruments: recognition and measurement
IFRIC 19 Extinguishing financial liabilities with equity
instruments
The adoption of these amendments and interpretations has not
resulted in changes to the Group's accounting policies and has not
had a material impact on amounts reported for the current or prior
years.
The following new standards, amendments to standards and
interpretations have been issued, but are not effective for the
financial year ending 30 September 2011:
IFRS 7 Financial instruments: disclosures (clarification of
disclosures)
IAS 24 Related party disclosures (revised definition of related
parties)
IAS 34 Interim financial reporting (Significant events and
transactions)
The directors have considered the impact of these new standards
and interpretations in future periods and no significant impact is
expected. The Group has chosen not to adopt any of the above
standards and interpretations early.
4. Business segments
The Group is currently organised into three operating divisions:
Dawson Books, Dawson Media Direct and Dawson Marketing Services.
These divisions are the basis on which the Group reports its
primary segment information.
-- Dawson Books provides academic content both on-line and in
the form of shelf-ready books to professional, academic, corporate
and public library markets throughout the world.
-- Dawson Media Direct provides in-flight management services,
including specialist distribution to the airline industry.
-- Dawson Marketing Services provides marketing support and
logistics services through an effective integration of stock
management, web reporting and distribution arrangements.
Summary of results from continuing activities
Unaudited Unaudited Audited
Half year Half year
ended ended Year ended
31st March 31st March 30th September
2011 2010 2010
GBPm GBPm GBPm
Revenue
Dawson Books 22.8 22.5 44.1
Dawson Media Direct 12.6 12.7 26.4
Dawson Marketing Services 3.9 4.2 7.9
39.3 39.4 78.4
----------- ----------- ---------------
Profit from operations
Dawson Books 0.8 0.6 1.3
Dawson Media Direct 0.4 0.3 0.4
Dawson Marketing Services 0.3 0.2 0.4
Unallocated corporate
expenses (0.6) (0.5) (0.9)
----------- ----------- ---------------
Profit from operations,
before exceptional items 0.9 0.6 1.2
Net effect of exceptional
items on profit before tax
(note 5) - (0.5) (0.6)
Profit from operations,
after exceptional items 0.9 0.1 0.6
----------- ----------- ---------------
Results from total activities for the half year ended 31st March
2011
Dawson Dawson Total Discontinued Total
Dawson Media Marketing Continuing Operations Operations
Books Direct Services Operations
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from
external
sales 22.8 12.6 3.9 39.3 - 39.3
------- ------- ---------- ----------- ------------- -----------
Segment result 0.8 0.4 0.3 1.5 - 1.5
------- ------- ----------
Unallocated
corporate
expenses (0.6) - (0.6)
----------- ------------- -----------
Profit/(loss)
from
operations 0.9 - 0.9
Income from
associates - - -
-------
Net finance
costs - (0.1) (0.1)
----------- ------------- -----------
Profit/(loss)
before
corporate
income tax 0.9 (0.1) 0.8
----------- ------------- -----------
Balance sheet
Segment assets 9.0 16.2 3.6 28.8 - 28.8
Unallocated
assets 1.5 - 1.5
Total assets 30.3 - 30.3
----------- ------------- -----------
Results from total activities for the half year ended 31st March
2010
Dawson Dawson Total Discontinued Total
Dawson Media Marketing Continuing Operations Operations
Books Direct Services Operations
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from
external
sales 22.5 12.7 4.2 39.4 - 39.4
------- ------- ---------- ----------- ------------- -----------
Segment result 0.6 0.3 0.2 1.1 - 1.1
------- ------- ----------
Unallocated
corporate
expenses (0.5) - (0.5)
----------- ------------- -----------
Profit from
operations
before
exceptional
items 0.6 - 0.6
Restructuring
provisions (0.1) (0.2) (0.3) - (0.3)
Corporate
restructuring
provision (0.2) (0.2)
Pension fund
deficit
extinguished
with share
issue (1.5) (1.5)
----------- ------------- -----------
Profit/(loss)
from
operations,
after
exceptional
items 0.1 (1.5) (1.4)
Income from
associates - - -
-------
Net finance
costs - (0.2) (0.2)
----------- ------------- -----------
Profit/(loss)
before
corporate
income tax 0.1 (1.7) (1.6)
----------- ------------- -----------
Balance sheet
Segment assets 8.2 15.3 3.3 26.8 - 26.8
Unallocated
assets 3.8 - 3.8
Total assets 30.6 - 30.6
----------- ------------- -----------
Results from total activities for the year ended 30th September
2010
Dawson Dawson Total Discontinued Total
Dawson Media Marketing Continuing Operations Operations
Books Direct Services Operations
GBPm GBPm GBPm GBPm GBPm GBPm
Revenue from
external
sales 44.1 26.4 7.9 78.4 - 78.4
------- ------- ---------- ----------- ------------- -----------
Segment result 1.3 0.4 0.4 2.1 - 2.1
------- ------- ----------
Unallocated
corporate
expenses (0.9) - (0.9)
----------- ------------- -----------
Profit from
operations
before
exceptional
items 1.2 - 1.2
Restructuring
provisions (0.1) (0.3) (0.4) - (0.4)
Corporate
restructuring
provision (0.2)
Pension fund
deficit
extinguished
with share
issue (1.5) (1.5)
Gain on
settlement of
contingent
consideration 0.1 0.1
----------- ------------- -----------
Profit/(loss)
from
operations,
after
exceptional
items 0.6 (1.4) (0.6)
Income from
associates - - -
-------
Net finance
costs (0.1) (0.3) (0.4)
----------- ------------- -----------
Profit/(loss)
before
corporate
income tax 0.5 (1.7) (1.2)
----------- -------------
Elimination of
discontinued
operation 1.7
Consolidated
profit from
continuing
operations
before income
tax 0.5
-----------
Balance sheet
Segment assets 8.0 12.9 3.7 24.6 - 24.6
Unallocated
assets 3.8 - 3.8
Total assets 28.4 - 28.4
----------- ------------- -----------
5. Exceptional items
Exceptional items are those which are considered to be either,
or both, significant or one-off in nature, and to which the
reader's attention should be drawn.
Unaudited Unaudited Audited
Half year Half year
ended ended Year ended
31st 30th
31st March March September
2011 2010 2010
GBPm GBPm GBPm
Exceptional items relating to
continuing operations
Restructuring costs - (0.5) (0.6)
- (0.5) (0.6)
Income tax - 0.1 0.1
Exceptional items relating to
continuing operations (after tax) - (0.4) (0.5)
Exceptional items relating to
discontinued operations (after tax) (0.1) (1.7) (1.7)
Net effect on profit after tax (0.1) (2.1) (2.2)
-------- --------- --------
Exceptional items relating to discontinued operations are
detailed in note 7.
6. Earnings/(loss) per share
Basic earnings/(loss) per share is calculated by dividing the
earnings attributable to ordinary shareholders by the weighted
average number of ordinary shares in issue during the period.
Diluted earnings/(loss) per share is calculated by adjusting the
weighted average number of ordinary shares in issue on the
assumption of conversion of potential dilutive ordinary shares.
Unaudited Unaudited Audited
Half year Half year
ended ended Year ended
31st 31st 30th
March March September
2011 2010 2010
GBPm GBPm GBPm
Net profit/(loss) attributable to
equity holders of the company:
Continuing operations 0.8 0.1 0.2
Discontinued operations (0.1) (1.7) (1.7)
---------- ----------
0.7 (1.6) (1.5)
---------- ---------- -----------
Million Million Million
Weighted average number of ordinary
shares in issue 97.4 94.8 96.4
Dilution effect of share options 0.1 0.2 0.2
---------- ---------- -----------
Diluted weighted average number of
ordinary shares in issue 97.5 95.0 96.6
---------- ---------- -----------
Pence Pence Pence
Basic earnings/(loss) per share
Continuing operations 0.8 0.1 0.2
Discontinued operations (0.1) (1.8) (1.8)
---------- ---------- -----------
Total operations 0.7 (1.7) (1.6)
---------- ---------- -----------
Diluted earnings/(loss) per share
Continuing operations 0.8 0.1 0.2
Discontinued operations (0.1) (1.8) (1.8)
---------- ---------- -----------
Total operations 0.7 (1.7) (1.6)
---------- ---------- -----------
Basic earnings on continuing
operations before exceptional items GBPm GBPm GBPm
Net profit attributable to equity holders
of the company 0.8 0.1 0.7
Adjust post tax effect of exceptional
items (note 5) - 0.4 (0.5)
---------- ---------- -----------
Net profit attributable to equity holders
of the parent company before exceptional
items 0.8 0.5 0.2
---------- ---------- -----------
Basic loss on discontinued operating
activities before exceptional items GBPm GBPm GBPm
Net (loss)/profit attributable to equity
holders of the company (0.1) (1.7) (1.7)
Adjust post tax effect of exceptional
items (note 5) 0.1 1.7 1.7
---------- ---------- -----------
Net profit on discontinued operations
attributable to equity holders of the
parent company before exceptional
items - - -
---------- ---------- -----------
Basic earnings/(loss) per share
before exceptional items Pence Pence Pence
Continuing operations 0.8 0.5 0.7
Discontinued operations (0.1) (1.8) (0.5)
---------- ---------- -----------
Total operations 0.7 (1.3) 0.2
---------- ---------- -----------
Diluted earnings/(loss) per share
before exceptional items
Continuing operations 0.8 0.5 0.7
Discontinued operations (0.1) (1.8) (0.5)
---------- ---------- -----------
Total operations 0.7 (1.3) 0.2
---------- ---------- -----------
Earnings per share before exceptional items are disclosed to
indicate the results from the Group's underlying trading.
7. Discontinued operations
In 2009, Surridge Dawson Ltd and its subsidiary Solent SD
Limited were placed into administration. The impact of the
de-recognition of the Pension Fund and the unwind of the discount
on the contingent consideration element of the purchase price of
the remaining businesses from Surridge Dawson Ltd are as
follows:
Unaudited Unaudited Audited
Half year Half year
ended ended Year ended
31st March 31st March 30th September
2011 2010 2010
Note GBPm GBPm GBPm
Post tax loss on
de-recognition of Pension
Fund - (1.5) (1.5)
Post tax gain on settlement
of contingent
consideration - - 0.1
Unwind of discount on contingent
consideration (0.1) (0.2) (0.3)
Net effect on profit after tax (0.1) (1.7) (1.7)
------ ----------- ---------------
Exceptional items relating to
discontinued operations
Post tax (loss)/gain on pension
de-recognition - (1.5) (1.5)
Post tax gain on settlement
of contingent
consideration - - 0.1
Unwind of discount on contingent
consideration (0.1) (0.2) (0.3)
Net exceptional items relating to
discontinued operations (after
tax) (0.1) (1.7) (1.7)
------ ----------- ---------------
There were no cash flow effects from any of the above
movements.
8. Acquisition of Phantom Media Limited
On 17th January 2011, the group exercised its option to purchase
the remaining 50% of shares in Phantom Media Limited. The
acquisition had the following effect on the group's assets and
liabilities on that date
Pre-acquisition Fair Recognised
carrying Value values on
amounts Adjustments acquisition
GBPm GBPm GBPm
Investment in equity
accounted investees - 0.2 0.2
Non-current trade
receivables 0.3 - 0.3
Current trade receivables 0.5 - 0.5
Cash and cash equivalents 0.1 - 0.1
Trade and other payables (0.7) - (0.7)
Net identifiable assets
and liabilities 0.2 0.2 0.4
---------------- ------------
Carrying amount of
investment 0.4
Additional consideration
on acquisition of
remaining 50% -
Cash acquired (0.1)
Net cash inflow on
acquisition of remaining
50% (0.1)
------------
Full disclosure of the acquisition in accordance with IFRS 3
will be made in the financial statements for the year ending 30th
September 2011.
9. Reconciliation of movement in cash and cash equivalents
As at As at
30th September Cash 31st March
2010 flow 2011
GBPm GBPm GBPm
Cash and cash equivalents 3.3 1.6 4.9
Overdrafts (1.6) 0.9 (0.7)
Net cash and cash equivalents 1.7 2.5 4.2
--------------- ----- -----------
Cash and cash equivalents are shown in the balance
sheet as follows:
Cash and cash equivalents 3.3 4.9
Current financial liabilities (1.6) (0.7)
1.7 4.2
--------------- -----------
10. Retirement benefit obligation
The Group operates occupational pension schemes for all
qualifying employees. All pension arrangements operate on a defined
contribution basis.
The Dawson Holdings Group Pension Fund ("Pension Fund"), had
both a defined contribution section and a defined benefit section.
As announced by the Company in May 2009, the Group effected a
reorganisation that required the consent of the Trustees of the
Pension Fund, the Pensions Protection Fund ("PPF") and the Pensions
Regulator. Pensions Regulator clearance was required in order to
ensure that the Pensions Regulator would not exercise its powers to
unwind the reorganisation following the insolvency of Surridge
Dawson Limited.
The Pensions Regulator would provide clearance only once
satisfied that the PPF had agreed to the terms of the
reorganisation. Consequently, the negotiations with the PPF, the
Trustees and the Pensions Regulator resulted in the Pensions
Agreement in which it was agreed to apportion all but a small
amount of the Company's pension liability to Surridge Dawson
Limited (the principal employer to the Pension Fund). In addition,
it was agreed that the Trustees would subscribe for new shares
conditional only on shareholder approval. The quantum of the
pension liability remaining with the Company was equal to the
subscriptions monies payable by the Trustees. In August 2009,
Surridge Dawson Limited was placed into administration and at that
point its share of the Pension Fund was de-recognised by the Group.
A provision of GBP1.1m was held at September 2009 in respect of the
Company's IAS 19 deficit.
The shareholders approved on 12th October 2009, the issue of
6,519,493 ordinary shares of 1 pence and 25,623,586 non-voting B
ordinary shares of 1 pence to the Pension Fund. The share premium
created of GBP2.3m uses the then prevailing share price of 8.25
pence to reflect the fair value of the shares issued and the
consequent expense of GBP1.5m was shown as a loss on discontinued
operations in the Consolidated statement of comprehensive income in
the period to 30 March 2010.
11. Dividends
No interim or final dividend for the year ended 30th September
2010 has been declared by the Board of Directors, and the Board has
not recommended payment of an interim dividend for the year ended
30th September 2011.
12. Related party transactions
There were no related party transactions involving the
Directors, other than as disclosed as Directors' Emoluments in the
Group's annual report and financial statements.
Furthermore, the Directors are not aware of any additional
related party transactions other than those between individual
entities within the Group that are routinely eliminated upon
consolidation.
Responsibility Statement of the Directors in respect of the Half
Year Report
We confirm that to the best of our knowledge:
(a) the condensed consolidated set of financial statements has
been prepared in accordance with IAS 34 Interim Financial Reporting
as adopted by the EU;
(b) the half year report includes a fair review of the
information required by DTR 4.2.7R of the Disclosure and
Transparency Rules, being an indication of important events that
have occurred during the first six months of the financial year and
their impact on the condensed set of financial statements; and a
description of the principal risks and uncertainties for the
remaining six months of the year; and
(c) the half year report includes a fair review of the
information required by DTR 4.2.8R of the Disclosure and
Transparency Rules, being related party transactions that have
taken place in the first six months of the current financial year
and that have materially affected the financial position or
performance of the entity during that period; and any changes in
the related party transactions described in the last annual report
that could do so.
By order of the Board
Hugh Cawley
Chief Executive
26th May 2011
Independent Review Report to Dawson Holdings PLC
Introduction
We have been engaged by the Company to review the condensed
consolidated financial statements in the half year report for the
six months ended 31st March 2011 which comprises the Condensed
Consolidated Statement of Comprehensive Income, the Condensed
Consolidated Statement of financial position, the Condensed
Consolidated Statement of Changes in Equity, the Condensed
Consolidated Statement of Cash Flows and the related explanatory
notes. We have read the other information contained in the half
year 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 the
terms of our engagement to assist the Company in meeting the
requirements of the Disclosure and Transparency Rules ("the DTR")
of the UK's Financial Services Authority ("the UK FSA"). Our review
has been undertaken so that we might state to the Company those
matters we are required to state to it in this report and for no
other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the Company
for our review work, for this report, or for the conclusions we
have reached.
Directors' responsibilities
The half year report is the responsibility of, and has been
approved by, the directors. The directors are responsible for
preparing the half year report in accordance with the DTR of the UK
FSA. As disclosed in note 2, the annual financial statements of the
Group are prepared in accordance with IFRSs as adopted by the EU.
The condensed financial statements included in this half year
report have been prepared in accordance with IAS 34 Interim
Financial Reporting as adopted by the EU.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half year 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
UK. 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 Statements 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.
Review 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 year report for the six months ended 31 March 2011 is
not prepared, in all material respects, in accordance with IAS 34
as adopted by the EU and the DTR of the UK FSA.
P Gresham (Senior Statutory Auditor) KPMG Audit Plc
For and on behalf of 1 Forest Gate
KPMG Audit Plc Brighton Road
Chartered Accountants Crawley
26 May 2011 RH11 9PT
This information is provided by RNS
The company news service from the London Stock Exchange
END
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