RNS Number:3459M
Thomson Intermedia PLC
23 January 2008
Thomson Intermedia plc
Maiden Interim Results for the six months ended 31 October 2007
23 January 2008
Investing for future growth
Following the change of year end to 30 April, Thomson Intermedia plc ('Thomson
Intermedia' or the 'Company', AIM: THN), a leading provider of media
intelligence, today announces its unaudited maiden interim results for the six
months ended 31 October 2007. Unaudited numbers for the corresponding six months
to 31 October 2006 are provided for comparative purposes.
Key points
* Total revenue of �8.4 million, up 5% on H1 2006 and 12% excluding
one-off development revenues in 2006/7
- Consultancy Services revenues up 21% to �5.5 million and now
comprise 65% of total revenues
- 95% of recurring revenues in Technology & Data Services
- 85% of repeat revenues in Consultancy Services
* Underlying operating profit of �1.1 million, up 50% excluding one-off
development revenues in 2006/7
* Reported operating loss of �1.1 million due to non cash write-down of
capitalised development costs
* Strong working capital management, with a 20% improvement in debtor
days
* New CEO instigated full strategic review encompassing all aspects of
the business
* Key appointments made to build a new management team
* Investment required to refocus Technology & Data Services
* Michael Uzielli will step down from the Board and resign as Finance
Director before the financial year end
Michael Greenlees, Chief Executive, said:
"I relish the challenge of taking Thomson Intermedia into its next stage of
development. It has become clear that previous financial forecasts were
optimistic and we expect business performance in the year to 30 April 2008 to be
below current market expectations. I believe however that, given the changes we
are now in the process of implementing, over the medium to longer term Thomson
Intermedia has enormous potential amidst a media landscape which is changing at
a breathtaking pace."
Enquiries:
Thomson Intermedia
Michael Greenlees, Chief Executive 020 7321 4000
Michael Uzielli, Finance Director
College Hill
Sara Musgrave / Ben Way 020 7457 2020
Landsbanki 020 7426 9000
Shaun Dobson / Claes Spang
Notes to Editors
Thomson Intermedia plc (AIM: THN) provides tools to improve the effectiveness
and efficiency of marketing expenditure. It was founded in 1997, to provide the
first ever creative monitoring system that links directly to expenditure. The
company enjoyed healthy growth, and floated on AIM in April 2000. In August
2005, Thomson Intermedia acquired billetts, the UK's leading provider of media
audit and consultancy services. Today, Thomson Intermedia has over 300
customers, including 70 of the top 100 UK advertisers, 50 of which currently
take more than one of the Company's products.
For further information please visit: www.thomson-intermedia.com
Chairman's Statement
The six months to 31 October 2007 marked a watershed period of challenge and
transition at Thomson Intermedia. I am delighted to welcome Michael Greenlees
to the role of Chief Executive. Michael has over thirty years experience in the
advertising industry and we are lucky to have secured someone of his calibre to
take the Company into its next stage of growth. Michael was a founder of GGT
(Gold Greenlees Trott) in 1980 and then went on to sell the business to Omnicom
in 1998 where he became a Director of Omnicom and President/CEO of TBWA
Worldwide, one of the largest advertising networks in the world.
Michael's ability to attract Nick Manning, another senior figure in the media
industry, is testament to Michael's standing. Nick is a co-founder of Manning
Gottlieb Media, one of the most highly respected and fastest growing media
specialists in the UK. Nick took up the newly created role of Chief Operating
Officer at Thomson Intermedia and, working alongside Michael, Nick's
contribution will be pivotal in the execution of the Board's plans for the
coming year.
I am also delighted that our founder shareholders remain active Board members
and have been strongly supportive of these changes.
Michael Uzielli, Finance Director, will be stepping down from the Board before
the year end 30 April 2008. Michael has made a significant contribution in a
short time towards upgrading our overall financial processes and controls. The
Board wishes him well in his move to a senior financial position in a major
corporate. We will conduct a review for an appropriate replacement. Andrew
Beach, Deputy Finance Director, who the Board has recently appointed Company
Secretary, will lead the Finance Department and will be considered as a
potential replacement in the review. Andrew joined the Company from
PricewaterhouseCoopers in March 2007 and has worked closely with Michael. As
Deputy Finance Director, Andrew has made a significant contribution to the
business.
In closing, I would like to echo the comments made by Michael Greenlees
elsewhere in this announcement. Although the new management team will need time
to refocus the business we are confident that, in the medium to longer term,
Thomson Intermedia can thrive in a market where media insights are highly valued
and deliver full value to shareholders. I would like to take this opportunity
to thank our investors for their support.
Michael Higgins
Chairman
Chief Executive's Statement
Introduction
I begin my first report to shareholders by saying how pleased I am to be leading
the new management team of Thomson Intermedia. Over the medium to longer term, I
believe it has enormous potential amidst a media landscape which is changing at
breathtaking pace.
Since assuming the role of CEO in October I have instigated a full strategic
review encompassing all aspects of the business. I am assisted in this process
by Nick Manning who joined in September to take up the newly created role of
Chief Operating Officer. The strategic review is ongoing but it is already
clear to us that, whilst Consultancy Services is performing well, our Technology
& Data Services business faces a number of operational challenges.
We have already put in place a number of initiatives designed to improve the
business. Technology & Data Services has been performing below previous
expectations and we will need to refocus and invest in this division.
Consultancy Services continues to perform well and its long term customer
relationships hold the key to unlocking the potential of the Company. As well as
building a new management team, we are looking to improve the sales capability
within the Company.
Although the Company faces short term challenges, I am confident that we have
the right skill set to build a business which can maximise shareholder value
over the medium to longer term.
The Half Year in Review
In the six months to 31 October 2007 total revenue increased 5% to �8.4 million
whilst core revenues, which exclude one-off development business, increased by
12%. Operating profit at �1.1 million was broadly flat year-on-year, although
excluding one-off development business it was up 50% on a like-for-like basis.
Following a comprehensive review of the Company's priorities in respect of
development projects, we have taken a non cash write-down of �1.5 million in
respect of our capitalised development costs. This, together with certain
one-off property relocation and management restructuring costs, is shown as a
highlighted item in the Income Statement. As a result, we recorded a reported
operating loss for the period of �1.1 million (2006: �0.4 million profit).
We did not record any development revenue in the six months ended 31 October
2007. In part, this reflects a decision to adopt a more prudent accounting
policy, whereby revenue from development projects previously taken up-front is
now spread over the life of the underlying customer contract. This change
results in revenue being recognised in line with service delivery and it also
reflects a strategic decision to concentrate our efforts on building long term
renewable business with recurring revenue streams rather than focusing on time
consuming, one-off projects. Development revenue, if it arises in future, will
generally be spread over the life of the underlying contract and recorded as
Core within the relevant business segment.
In addition, we have changed the classification of Core revenue into two streams
in order to better distinguish between the services that we offer our clients.
This change, which reflects the reality of the business, should provide better
transparency for investors and assist the Board in its long term growth
strategy. The two new revenue streams are:
* Consultancy Services: comprising revenue from audit services and
marketing effectiveness consultancy, which are delivered by teams of media
professionals using proprietary technology solutions and support services, and
enjoying high levels of repeat business.
* Technology & Data Services: comprising revenue from competitive
advertising monitoring, news monitoring and e-vouching, all of which are
delivered via the online Thomson Intermedia platform.
Revenue 6 months ended 31 6 months ended 31 YOY 12 months ended
October 2007 October 2006 Change 30 April 2007
�'000s �'000s �'000s
Consultancy 5,467 4,508 21% 9,611
Technology & Data 2,935 2,999 (2%) 5,858
Core 8,402 7,507 12% 15,469
Development - 468 100% 520
Total 8,402 7,975 5% 15,988
Consultancy Services
Consultancy Services, including Media Auditing and Marketing Sciences, performed
strongly with revenue up 21% to �5.5 million. This growth was driven by an
increase in global audit assignments - a market with significant future
potential - which now represent almost one third of our Media Auditing revenues
and a strong performance from our Marketing Sciences business.
We recently announced the appointment of Martin Sambrook who joins us from
Accenture Marketing Sciences where he was Head of Global Accounts. Martin comes
with an outstanding pedigree, having not only built a strong and thriving
business across Europe, Middle East and Asia but also established the media
auditing process in both North and South America. As Managing Partner, billett
International, Martin will take overall responsibility for growing our
increasingly important international business.
The increasing complexity of the media landscape and, in particular, the
influence of online advertising and the continuing fragmentation and complexity
of the traditional media, continues to present our clients with enormous
challenges. These fundamental trends mean that our Marketing Sciences business,
which focuses on media effectiveness consultancy, continues to be in significant
demand with revenue growth up 45% year on year.
Technology & Data Services
Technology & Data Services continued to perform disappointingly during the
period. Excluding one-off development revenues generated in 2006/07, sales were
flat year-on-year and although levels of recurring revenue reached 95%, our new
business performance was poor, with new sales initiatives failing to generate
the expected results. Having said that, revenues from e-vouching services for
publishers were up 9% following major contract wins in Holland and in UK
magazine publishing, the impact of which will be felt more strongly in the
second half.
Martin Wright who recently joined following periods at Blast Radius, now part of
WPP, and Interpublic Group will take the position of Managing Partner,
Technology & Data Services with Bruce Dove, our newly appointed Director of
Sales, taking responsibility for revenue generation and customer support.
We have now taken steps to significantly rationalise Technology & Data Services
by discontinuing activities with the least potential and concentrating resources
on those that have demonstrated the greatest opportunity for growth. Technology
& Data Services is the primary focus of the Company-wide strategic review and
significant investment will be required to refocus this division on its key
target audiences of advertisers and publishers where we have a strong and
growing franchise. We will invest in these audiences with products and services
that, by delivering unique market insights, will add value to our customer
relationships and thus increasingly distinguish us from the generic providers of
data.
Uniquely, recent contracts with regional newspapers now mean that we will begin
to capture a significant amount of our data electronically. This is important as
data capture accounts for a large proportion of our costs. Over time the use of
electronic data capture will reduce our reliance on manual feeds and thus
potentially increase our efficiencies.
Outlook
We have taken the first steps to restructure the Company, strengthen the
management team and create a better culture of accountability. We have
significantly rationalised our activities to focus only on those business
streams that offer the greatest potential. We are consolidating our Charing
Cross and Farringdon operations by relocating onto one floor in new offices at
Tower Hill and we are in the process of making operational improvements to our
data capture centre in Bromley.
I intend to announce the results of our strategic review at the year end. The
objective of the review is to ensure that we are able to build strong enduring
client relationships based on thought leadership and supported by indispensable
technology solutions that add real value to our clients' business.
It has become clear that previous financial forecasts were optimistic and we now
expect business performance for the year to 30 April 2008 to come in below
current market expectations. In the medium to longer term, however, the
prospects are strong and we are confident that Thomson Intermedia has the
capability and market position to deliver substantial shareholder value.
Michael Greenlees
Chief Executive Officer
Financial Review
Our unaudited interim results for the six month period ended 31 October 2007
read as follows:
Revenue
6 months ended 6 months ended 12 months ended
31 October 2007 31 October 2006 30 April 2007
�'000s �'000s �'000s
Consultancy 5,467 4,508 9,611
Technology & Data 2,935 2,999 5,858
Core 8,402 7,507 15,469
Development - 468 520
Total 8,402 7,975 15,988
As stated in the Chief Executive's Statement, the Company has changed the
classification of its revenue to distinguish more clearly between the nature of
the services that we provide to our clients.
Total Company revenue increased by 5% to �8.4 million (2006: �8.0 million) with
Core revenue, excluding one-off development projects, up by 12% to �8.4 million
(2006: �7.5 million). This growth was driven by Consultancy Services where
revenue increased by 21% to �5.5 million. Revenue from international audit
assignments and marketing effectiveness projects both grew strongly, up by 29%
and 45% respectively.
Despite an encouraging 95% renewal rate (by value), revenue from Technology &
Data Services was flat year-on-year due to a disappointing new business
performance. Following contract wins in Holland and in UK magazine publishing,
revenues from e-vouching services for publishers were up 9%.
The Company has changed its accounting policy for revenue recognition of
e-vouching contracts, which form part of Technology & Data Services, to
recognise revenue evenly over the life of the contract period. Previously,
revenue recognition was weighted towards the start of the contract to take into
account set up time and costs. This change results in a more reliable and
relevant approach, with revenue being recognised in line with the delivery of
the service. A prior period adjustment has been made to increase revenue for
the first six months of 2007/08 and 2006/07 by �66,000 and �48,000 respectively.
Further detail is set out under Note 1 of the interim results.
Gross Profit
Gross profit was �4.4 million (2006: �4.6 million), yielding a gross margin of
52% (H1 2006: 58%). This reflects the lack of one-off development revenue as
well as the increasing proportion of Consultancy Services revenue which has been
growing strongly but has lower margins than Technology & Data Services.
Administrative Expenses
As a result of tight focus on cost control during the period, administrative
expenses before highlighted items were �0.1m lower at �3.3 million (2006: �3.4
million), As previously announced, the senior management changes implemented in
October will result in a �0.3 million increase in administrative expenses for
the second half of the year.
Operating Profit
Certain items have been separately disclosed and highlighted in order to provide
additional clarity to the underlying performance of the business. Profit before
highlighted items is termed "underlying operating profit". The Company has
changed its approach to categorising operating profit between Core and
Development business. Core now includes total Company operating costs whilst
Development comprises only one-off project revenue. Central costs, shown below,
include total Company costs related to IT, property and central overheads.
6 months ended 31 6 months ended 31 12 months ended
October 2007 October 2006 30 April 2007
�'000s �'000s �'000s
Consultancy 2,108 1,590 3,567
Technology & Data 1,115 1,332 2,469
Central (2,100) (2,179) (4,217)
Core 1,123 742 1,819
Development - 468 520
Underlying Operating Profit 1,123 1,210 2,338
Highlighted Items
Non-cash (1,750) (340) (763)
Cash (463) (426) (1,398)
Reported Operating Profit (1,090) 444 177
Core operating profit, before highlighted items, for the first six months was
�1.1m, an increase of �0.4 million on the prior period (2006: �0.7 million).
Including one-off development revenue in 2006, total underlying operating profit
was flat.
There was a reported operating loss of �1.1 million (2006: �0.4 million profit)
due to the �1.5 million non cash write-down of the Company's capitalised
development costs.
Highlighted Items
6 months ended 31 6 months ended 31 12 months ended
October 2007 October 2006 30 April 2007
�'000s �'000s �'000s
Recurring
Share based expenses 45 135 270
Amortisation of purchased 188 194 387
intangible assets
Foreign exchange losses 60 11 106
Total 293 340 763
Non-recurring
Capitalised development costs 1,457 - -
write-off
Property cost 246 - 218
Management restructuring costs 127 - 193
Other 90 426 987
Total 1,920 426 1,398
Total Highlighted Items 2,213 766 2,161
Following a comprehensive review of the Company's priorities in respect of
development projects, we have taken a write-off of �1.5 million in respect of
our capitalised development costs. This is an accounting charge, which has no
impact on the Company's cash flow, now or in the future.
The property costs of �246,000 relate to the consolidation of the Company's
London operations into one location at Tower Hill and include the cost of
exiting our two other properties in Charing Cross and Farringdon. We anticipate
a further �0.3 million of property relocation costs in the second half of the
year.
The management restructuring costs of �127,000 relate to senior management
changes implemented in October 2007. The outcome of the ongoing strategic
review may result in further one-off restructuring charges of up to �0.5 million
in the second half of the year.
Profit before Tax and EPS
Net finance costs were 39% lower at �0.1 million (2006: �0.2 million) which
reflects a decrease in the Company's borrowings over the past twelve months.
Underlying profit before tax was flat at �1.0 million. The reported loss before
tax was �1.2 million (2006: �0.2 million profit).
Underlying diluted earnings per share was 2.34p (2006: 2.58p). The reported
diluted loss per share was 3.18p (2006: 0.83p earnings).
The Board is not recommending the payment of an interim dividend.
Cash and Debt
6 months ended 6 months ended 12 months ended
31 October 2007 31 October 2006 30 April 2007
�'000s �'000s �'000s
Cash 1,286 3,085 2,105
Debt 4,038 6,462 5,057
Net Debt 2,752 3,377 2,952
Net cash from operating activities for the six months was �0.4 million (2006:
�0.9 million). The decline over the prior period reflects three factors.
Firstly, the revised approach to capitalisation of development expenditure
results in a reclassification of spend between operating and investing
activities which reduces reported operating cash flow for the period to 31
October 2007 by �0.2 million. Secondly, the prior period benefited from a
working capital recovery following a deterioration during the integration of
billetts which was acquired in August 2005. Finally, trade payables reduced by
�0.6 million during the period as a result of improvements to the supplier
payments process and the more timely settlement of creditors.
There has been a strong focus over the period on improving the processes for
cash and working capital management, including debt collection, invoicing and
supplier payments. These initiatives are beginning to have an impact with
debtor days down from 97 days at the last year-end to 76 days at 31 October.
The profile of the debtor balances has also improved: as at 31 October, 15% of
debtors had been outstanding for more than 60 days compared with 39% as at 30
April.
The net debt position as at 31 October 2007 was �2.8 million (2006: �3.4
million), the reduction being due to positive cash flow over the past twelve
months. Gross debt was reduced by �2.4 million to �4.0 million as �3.6 million
of the �3.7 million billetts vendor loan notes were redeemed which was partially
offset by an increase in bank borrowing of �1.2 million.
As at 31 October 2007, the Company had unutilised banking facilities of �4.1
million.
Michael Uzielli
Finance Director
Consolidated Income Statement
for the six months ended 31 October 2007
Unaudited Unaudited Unaudited
6 months 6 months 15 months
ended ended ended
31 October 31 October 30 April
2007 2006 2007
Restated Restated
Note �'000s �'000s �'000s
Revenue 8,402 7,975 20,190
Cost of Sales (4,018) (3,375) (8,758)
Gross Profit 4,384 4,600 11,432
Administrative expenses - excluding highlighted (3,261) (3,389) (8,144)
items
Administrative expenses - highlighted items 2 (2,213) (766) (2,337)
Total administrative expenses (5,474) (4,155) (10,481)
Operating profit before highlighted items 1,123 1,211 3,288
Administrative expenses - highlighted items (2,213) (766) (2,337)
Operating (loss)/profit (1,090) 445 951
Finance income 30 25 80
Finance expenses (157) (232) (473)
Net finance costs (127) (207) (393)
(Loss)/profit before taxation (1,217) 238 558
Corporation tax (62) (32) (79)
Deferred tax 266 55 342
Tax income 204 23 263
(Loss)/profit for the period (1,013) 261 821
Attributable to:
Equity holders of the parent (1,013) 261 770
Minority interests - - 51
(1,013) 261 821
(Loss)/earnings per share
Basic 4 (3.22p) 0.83p 2.46p
Diluted 4 (3.22p) 0.80p 2.37p
Consolidated Balance Sheet
as at 31 October 2007
Unaudited Unaudited Unaudited
as at as at as at
31 October 31 October 30 April
2007 2006 2007
Restated Restated
Note �'000s �'000s �'000s
Non current assets
Goodwill 8,754 8,924 8,625
Other intangible assets 5 2,853 4,311 4,432
Property, plant & equipment 584 594 610
Investments 115 115 115
Deferred tax asset 978 918 895
Total non current assets 13,284 14,862 14,677
Current assets
Trade & other receivables 5,660 6,112 5,715
Current tax assets - - 105
Cash & cash equivalents 1,286 3,085 2,105
Total current assets 6,946 9,197 7,925
Total Assets 20,230 24,059 22,602
Current liabilities
Other financial liabilities (2,038) (3,962) (2,857)
Trade & other payables (1,589) (2,031) (2,132)
Current tax liabilities (126) (155) -
Provisions (269) - (59)
Accruals & deferred income (3,953) (4,086) (3,995)
Total current liabilities (7,975) (10,234) (9,043)
Non current liabilities
Other financial liabilities (2,000) (2,500) (2,200)
Provisions (124) - (159)
Deferred tax liability (720) (902) (825)
Total non current liabilities (2,844) (3,402) (3,184)
Total liabilities (10,819) (13,636) (12,227)
Total net assets 9,411 10,423 10,375
Capital & Reserves
Share capital 8,016 7,828 7,828
Share premium 1,845 8,871 1,840
ESOP reserve (130) - -
Merger reserve (4,504) (4,504) (4,504)
Translation reserve 76 42 50
Retained earnings 4,108 (1,814) 5,161
Capital and reserves attributable to
the equity holder of the parent
9,411 10,423 10,375
Minority interest - - -
Total Equity 9,411 10,423 10,375
Consolidated Cashflow Statement
for the six months ended 31 October 2007
Unaudited Unaudited Unaudited
6 months 6 months ended 15 months ended
ended 31 October 2006 30 April
31 October Restated 2007
2007 Restated
�'000s �'000s �'000s
Cashflows from operating activities
Profit before taxation (1,217) 238 558
Adjustments for:
Depreciation 166 163 414
Amortisation 205 446 1,120
Capitalised development costs write off 1,457 - -
Share option charges 45 135 307
Finance income (30) (25) (80)
Finance expense 157 232 473
783 1,189 2,792
Decrease/(increase) in trade receivables 56 556 (225)
(Decrease)/increase in trade payables (584) (643) 112
Increase in provisions 175 - 110
Cash generated from operations 430 1,102 2,789
Finance expense (164) (232) (473)
Income taxes paid 167 (1) (308)
Net cash from operating activities 433 869 2,008
Cashflows from investing activities
Purchase of property, plant & equipment (140) (67) (317)
Purchase of intangible assets (211) (300) (793)
Finance income 30 25 80
Net cash used in investing activities (321) (342) (1,030)
Cashflows from financing activities
Proceeds from issue of share capital 62 5 32
Proceeds from long term borrowings - - 2,000
Repayment of bank loans (663) (125) (375)
Loan note settlement (356) (82) (3,218)
Net cashflow used in financing activities (957) (202) (1,561)
Net increase/(decrease) in cash, cash equivalents
and bank overdrafts (845) 325 (583)
Effect of foreign exchange rate changes 26 (50) (24)
Cash, cash equivalents and bank overdrafts at
beginning of period 2,105 2,810 2,712
Cash, cash equivalents and bank overdrafts at end
of period 1,286 3,085 2,105
1. Accounting policies
Basis of preparation
The financial information presented in this documentation has been prepared in
accordance with International Financial Reporting Standards (IFRS) and
International Financial Reporting Interpretations Committee (IFRIC)
interpretations that are expected to be applicable for the period ended 30 April
2008. These are subject to ongoing review and endorsement by the European
Commission, or possible amendment by the International Accounting Standards
Board (IASB), and are therefore subject to possible change. Further standards
or interpretations may also be issued that could be applicable for the year
ended 30 April 2008. These potential changes could result in the need to change
the basis of accounting or presentation of certain financial information from
that presented in this document.
The comparatives for the period ended 30 April 2007 are not the Company's full
statutory accounts for that year but are drawn up from those accounts, as
amended for the unaudited restatement, as explained below. A copy of the
statutory accounts for that year has been delivered to the Registrar of
Companies. The auditors' report on those accounts was unqualified, did not
include references to any matters to which the auditors drew attention by way of
emphasis without qualifying their report and did not contain a statement under
section 237(2)-(3) of the Companies Act 1985.
As permitted, the group has not applied IAS 34 'Interim Reporting' in preparing
this interim report.
The Group has changed its accounting policy for revenue recognition of
e-vouching contracts to recognise revenue evenly over the life of the contract
period. Previously, revenue recognition was weighted towards the start of the
contract to take account of set up time and costs. This change results in
revenue being recognised more in line with the delivery of the service. The
comparative figures have been restated to reflect the change in policy. The
change in accounting policy resulted in:
6 months ended 6 months ended 15 months ended
31 October 2007 31 October 2006 30 April 2007
Increase in revenue/profit 66 48 163
(�000's)
Increase in deferred income at end 100 269 167
of period (�000's)
Decrease in total equity at beginning of period 166 317 330
(�000's)
Increase in basic earnings 0.21 0.15 0.52
per share (p)
Increase in diluted earnings 0.21 0.15 0.50
per share (p)
2. Highlighted items
Highlighted items comprise significant non-cash charges and non-recurring items
which are highlighted in the income statement because separate disclosure is
considered helpful in understanding the underlying performance of the business.
Unaudited Unaudited Unaudited
6 months ended 6 months ended 15 months ended
31 October 2007 31 October 2006 30 April 2007
�'000s �'000s �'000s
Recurring:
Share based expenses 45 135 347
Amortisation of purchased 188 194 484
intangible assets
Foreign exchange losses 60 11 107
293 340 938
Non recurring:
Capitalised development costs write 1,457 - -
off
Property costs 246 - 218
Management restructuring costs 127 - 193
Other costs 90 426 988
1,920 426 1,399
Total highlighted items 2,213 766 2,337
The capitalised development costs write off follows a comprehensive review of
development projects, which has resulted in a decision to discontinue certain of
those projects.
Property costs in the current period relate to legal costs and the dilapidation
provision associated with the Group's proposed office relocation.
The management restructuring costs in the current period relate to a senior
management redundancy and costs associated with the appointment of the Group's
new CEO and COO.
Other costs in the current period relate to a settlement to HM Revenue & Customs
following an indirect tax assessment.
3. Dividends
No interim dividend is being proposed.
4. Earnings per share
The calculation of the basic and diluted earnings per share is based on the
following data:
Unaudited Unaudited Audited
6 months ended 6 months ended 15 months ended
31 October 2007 31 October 2006 30 April
Restated 2007
Restated
�'000s �'000s �'000s
Earning for the purpose of basic (1,013) 261 770
earnings per share being net
profit attributable to equity
holders of the parent
Adjustments:
Highlighted items - recurring* 293 340 938
Highlighted items - non recurring 1,920 426 1,399
*
Tax effect of highlighted items (458) (197) (600)
Earnings for the purpose of 742 830 2,507
underlying earnings per share
Number of shares
Weighted average number of 31,424,226 31,303,591 31,299,591
ordinary shares for the purpose
of basic earnings per share**
Effect of dilutive potential
ordinary shares
Share options*** 919,730 1,202,523 1,185,915
Weighted average number of 32,343,956 32,506,114 32,485,506
ordinary shares for the purpose
of diluted earnings per share
Basic (loss)/earnings per share (3.22p) 0.83p 2.46p
Diluted (loss)/earnings per share (3.22p) 0.80p 2.37p
***
Underlying basic earnings per 2.36p 2.65p 8.01p
share
Underlying diluted earnings per 2.30p 2.55p 7.72p
share
* Highlighted items (see note 2).
** 519,847 shares held in the ESOP Trust have been removed from the weighted
average number of ordinary shares since these shares are no longer available in
the market
*** Note that 615,166 share options have been excluded from the calculation of
diluted EPS as their exercise price is greater than the weighted average share
price during the year (i.e. they are out-of-the-money) and therefore it would
not be advantageous for the holders to exercise those options. In the 6 months
ended 31 October 2007, the ordinary shares in the form of share options are
antidilutive and hence do not impact on the diluted earnings per share
calculation.
5. Other intangible assets
Capitalised Purchased intangible Total intangible
development costs assets assets
�'000s �'000s �'000s
Cost
At 1 May 2007 3,488 3,395 6,883
Additions 83 - 83
Write off (3,251) - (3,251)
At 31 October 2007 320 3,395 3,715
Amortisation
At 1 May 2007 (1,805) (646) (2,451)
Provision for the (17) (188) (205)
period
Write off 1,794 - 1,794
At 31 October 2007 (28) (834) (862)
Net book value
At 31 October 2007 292 2,561 2,853
The capitalised development costs are internally generated.
The write off follows a comprehensive review of certain development projects
(see note 2).
On 23 August 2005 the Company acquired the entire share capital of BCMG Limited
(billetts) for a maximum total consideration of �13.1m. In line with IAS 38
intangible assets owned by billetts have been independently valued by an
external consultant and shown within 'Other intangible assets' on the balance
sheet.
Amortisation is charged within administrative expenses so as to write off the
cost of the purchased intangible assets over their estimated useful lives. The
assets, initial values and periods used are as follows:
Purchased intangibles Cost at Current Useful Remaining
acquisition carrying economic of period
value life amortisation
�'000s �'000s Years Years
Media Consulting Customer 2,859 2,239 10 8.0
relationships
Marketing Sciences Customer 271 154 5 3.0
relationships
MPMA Customer relationships 43 - 2 -
Trade name 215 168 10 8.0
Non-compete 7 - 1.5 -
3,395 2,561
INDEPENDENT REVIEW REPORT TO THOMSON INTERMEDIA 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
October 2007 which comprises the Consolidated Income Statement, Consolidated
Balance Sheet, Consolidated Cashflow Statement and related notes.
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.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the rules of the
London Stock Exchange for companies trading securities on the Alternative
Investment Market which require that the half-yearly report be 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.
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.
Our report has been prepared in accordance with the terms of our engagement to
assist the company in meeting the requirements of the rules of the London Stock
Exchange for companies trading securities on the Alternative Investment Market
and for no other purpose. No person is entitled to rely on this report unless
such a person is a person entitled to rely upon this report by virtue of and for
the purpose of our terms of engagement or has been expressly authorised to do so
by our prior written consent. Save as above, we do not accept responsibility
for this report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
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 October 2007 is not prepared, in all material
respects, in accordance with the rules of the London Stock Exchange for
companies trading securities on the Alternative Investment Market.
BDO Stoy Hayward LLP
Chartered Accountants and Registered Auditors
8 Baker Street
London
W1U 3LL
23 January 2008
This information is provided by RNS
The company news service from the London Stock Exchange
END
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