TIDMTOL
16 September 2010
TOLUNA PLC
("ToLuna", the "Company" or the "Group")
Interim Report
for the six months ended 30 June 2010
ToLuna, the leading provider of online services to the market research
industry, announces its unaudited results for the six months ended 30 June
2010.
Highlights
* Revenues up 164 per cent to GBP36.2 million reflecting the successful
integration of Greenfield Online ISS
* Underlying profit before tax more than trebled from GBP2 million to GBP6.2
million
* Strong cash generation from operations at GBP4.7 million (2009: GBP2.9 million)
after payment of integration costs of GBP2.2 million
* Net cash of GBP8.8 million (30 June 2009: GBP1.1 million)
* Basic earnings per share ahead 82 per cent to 5.93p (2009: 3.25p)
* Proposed interim dividend of 1.2 pence (2009: 0.6p)
* All major steps of the integration of Greenfield Online ISS completed
Frédéric-Charles Petit, Chief Executive, comments:
"Our Group performed well in the first half of 2010 against a challenging
global economic background and while successfully finalising the major tasks of
the integration of Greenfield Online ISS. This performance testifies to the
scale we have reached and the quality of our team. All this gives us confidence
in the outcome for the rest of 2010."
Further enquires:
ToLuna PLC
Frederic-Charles Petit, Chief Executive Tel: +33 6 33 08 03 91
Mikael Tiano, Chief Financial Officer Tel: +33 1 40 89 71 58
E-mail: investors@toluna.com
Merchant Securities Limited (Nominated Adviser)
David Worlidge/Simon Clements Tel: +44 20 7628 2200
Cenkos Securities plc (Joint Broker) Tel: +44 20 7397 8900
Ivonne Cantu/Julian Morse/Oliver Goad
Numis Securities Limited (Joint Broker) Tel: +44 20 7260 1200
David Poutney/James Serjeant/Nick Westlake
Notes to Editors
ToLuna is the world's leading independent online panel and survey technology
provider to the global market research industry. The company provides online
sample and survey technology solutions to the world's leading market research
agencies, media agencies and corporates, from its 18 offices in Europe, North
America and Asia Pacific and respondents in 34 countries.
Chairman's Statement
I am pleased to report the results for the six months ended 30 June 2010, which
have been a period of further rapid progress for the Group.
During this period we have achieved revenue growth and completed all the
critical stages of our integration of Greenfield Online ISS ("Greenfield
Online").
Trading results
Revenue for the six months ended 30 June 2010 increased by 164 per cent to GBP
36.2 million (2009: GBP13.7 million). We continued to grow both revenue and
profitability in all our major regions. To achieve this at a time when global
economic conditions remain challenging is testimony to the strength and
resilience of our product offering and our business model, and our increased
scale following the Greenfield Online acquisition.
Revenue growth in Europe was 56 per cent to GBP13.3 million (2009: GBP8.5 million),
with a significant contribution from France and the UK and very encouraging
progress in southern Europe.
Our increased investment in Asia, combined with the integration of Greenfield
Online, is beginning to pay off with revenue growing to GBP1.4 million (2009: GBP
0.3 million).
Revenue in North America rose to GBP21.5 million (2009: GBP5 million). As expected,
and as indicated in our last report, this performance reflects the combining of
our business with Greenfield Online. Our Group is now a major force in North
America.
In the six months ended 30 June 2010, underlying profit before tax (before
business combination amortisation and exceptional items) rose 85 per cent to GBP
6.2 million (2009: GBP2 million). Cash generation from operations was strong at GBP
4.7 million (2009: GBP2.9 million) after payment of integration costs of GBP2.2
million.
Net cash at 30 June 2010 was GBP8.8 million (2009: GBP1.1 million).
Dividend
The board is proposing an interim dividend of 1.2 pence per share (2009: 0.6
pence) payable on 21 October 2010 to shareholders on the register at close of
business on 24 September 2010.
Strategy & Market Review
Scale is becoming critical in our industry. But scale alone is not sufficient.
We believe Technology is the key driver of how market research will develop in
the future, improving operational efficiency, ensuring the collection of high
quality data, and allowing an alignment between consumers' communication
behaviour (social media, mobile...) and the way we engage with them. This
enables us to create products that are easier to use, and to provide better and
faster access to ever-changing consumer sentiments across the globe.
Therefore we believe that companies that truly engage in innovation and
research, and respond to these trends, will be the winners in the market
research industry of the 21st century.
In this rapidly evolving market, the critical trends that we have identified
include:
* State of the art engagement with panellists and the need to have a
portfolio of respondent technologies through social media interaction, real
time sampling and routing. We possess these technologies in house and do
not need to create or copy them in a catch up exercise rather focusing our
energy into what is next.
* Scale and the need for seamless high quality 24/7 operations at competitive
pricing, which is driving the creation of strong centres of operation in
lower cost environments such as India and Eastern Europe across the
industry. Our Group benefits from our excellent and well established
centres in India and Romania, combined with our quality project management
resources across the rest of Europe and North America.
* Integrated information systems with a unified global repository for panel
management in order to maximise our panellists' experience. We have just
rolled out our information system globally as mentioned above.
ToLuna is innovating continuously to make the fullest use of our social voting
network and QuickSurveys in the age of the iPhone and iPad as well as
continuing improving our efficiency in our core business through our
information system. Core to this commitment to innovation is our belief that
the internet offers vast scope to democratise market research, making it
available to many organisations for the first time in a user-friendly and
affordable way.
Update on operations & integration of Greenfield Online
The acquisition of Greenfield Online in July 2009 transformed the Group.
Integration began immediately and I am pleased to tell you that all the
critical phases of our plan have been completed in less than 12 months.
* Our corporate structure has been simplified, with a unified legal and
operational structure in every operating territory;
* The executive management team has been strengthened and sales, operations,
client services, panels, IT, administration and R&D teams fully integrated;
* We have rationalised and strengthened our IT infrastructure to allow the
further upscaling of our business; and
* All our panels have been merged and our members unified around the
toluna.com social voting network; our project managers and all client teams
work under a single unified system worldwide.
The depth of talent within the combined organisation is impressive and we are
applying the ToLuna model of involving a deeper layer of management in key
decisions, so maintaining the spirit of entrepreneurship that has been key to
our growth over the last five years.
Our growth strategy is to strengthen our core business while developing a new
internet-driven "long tail" model that extends market research to a wider
client base.
Accordingly we continue to invest significantly in our consumer panels.
Following the acquisition of Greenfield Online, we are also investing in
professional panels such as our healthcare community Curizon.
Our technology suite of products performed well. Our custom panel community
technology suites (PanelPortal & AutomateSurvey) continue to grow well, as do
our Toluna QuickSurveys solutions.
Key Appointments
Following the acquisition of Greenfield Online ISS, we have strengthened our
management with two key appointments to our global executive team:
The appointment of Jeff Scott as President of our North American organisation
marks the Group's entry into its next stage of growth, where technology and
scale will be key to our success. Jeff comes to ToLuna most recently from Lexis
Nexis and has held senior management and technology leadership roles at Lexis
Nexis, SourceMedia and Thomson Financial.
We also welcome Mikael Tiano as Chief Financial Officer of the Group. Mikael
comes to us with over 25 years of international and finance experience. He has
held senior financial roles within the telecom branch of Vivendi, specifically
as chief financial officer of SFR and general manager finance and
administration of Morocco Telecom, and at the Seb Group.
Outlook
Our operations now span 34 countries and we remain aware of the challenges
posed in an uncertain global economic outlook. Nevertheless, we are greatly
encouraged by the progress of our integration, and by the growth and resilience
ToLuna continues to show. This gives the Board confidence of the outcome for
2010 and the years ahead.
George Kynoch
Chairman
Independent review report to ToLuna 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 30 June
2010 which comprises the consolidated income statement, consolidated statement
of comprehensive income, consolidated statement of financial position,
consolidated statement of cash flows, consolidated statement of changes in
equity and notes 1 to 8. We have read the other information contained in the
half yearly financial report which comprises only the chairman's statement 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 ISRE (UK and Ireland) 2410, 'Review of Interim Financial Information
performed by the Independent Auditor of the Entity'. Our review work has been
undertaken so that we might state to the company those matters we are required
to state to them in a review 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
conclusion we have formed.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and has been
approved by, the directors.
As disclosed in Note 1, 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 International Accounting Standard
34, 'Interim Financial Reporting,' as adopted by the European Union.
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 30 June 2010 is not prepared, in all
material respects, in accordance with International Accounting Standard 34 as
adopted by the European Union.
Grant Thornton UK LLP
Chartered Accountants
London
15 September 2010
Consolidated Income Statement
Continuing operations
Notes Six months Six months Year
ended ended
ended
30June 30June
31December
2010 2009
2009
(Unaudited) (Unaudited)
(Audited)
GBP'000 GBP'000
GBP'000
Revenue 2 36,204 13,730 49,516
Staff costs (13,294) (6,229) (22,374)
Other operating expenses (16,656) (5,541) (19,429)
Underlying operating profit 6,254 1,960 7,713
Business combination (1,353) (357) (1,802)
amortisation
Exceptional items (361) - (3,522)
Operating profit 4,540 1,603 2,389
Finance income 10 33 66
Finance expense (119) (83) (216)
Profit before tax 4,431 1,553 2,239
Tax expense 4 (1,458) (367) (660)
Profit for the period 2,973 1,186 1,579
Earnings per share 3
Basic 5.93p 3.25p 3.69p
Diluted 5.89p 3.02p 3.64p
Consolidated Statement of Comprehensive Income
Six months Six months Year
ended ended
ended
30June 30June
31December
2010 2009
2009
(Unaudited) (Unaudited)
(Audited)
GBP'000 GBP'000
GBP'000
Profit for the period 2,973 1,186 1,579
Exchange translation 85 (1,836) (416)
differences
Total comprehensive income for 3,058 (650) (1,163)
the period
Consolidated Statement of Financial Position
Notes 30June 30June 31December
2010 2009 2009
(Unaudited) (Unaudited) (Audited)
GBP'000 GBP'000 GBP'000
Non-current assets
Goodwill 5 17,079 5,733 16,742
Other intangible assets 6 14,717 6,244 15,615
Property, plant and equipment 2,197 744 2,279
Trade and other receivables 533 - 484
34,526 12,721 35,120
Current assets
Trade and other receivables 20,192 7,811 18,748
Cash and cash equivalents 8,782 2,811 12,093
28,974 10,622 30,841
Total assets 63,500 23,343 65,961
Equity and liabilities
Equity
Share capital 503 365 501
Share premium account 33,460 5,993 33,186
Translation reserve 2,153 648 2,068
Retained earnings 11,026 8,218 8,565
Total equity 47,142 15,224 44,320
Current liabilities
Trade and other payables 15,415 5,055 19,227
Financial liabilities: bank - 1,747 1,136
overdraft
Tax liabilities 356 382 907
Total current liabilities 15,771 7,184 21,270
Non-current liabilities: trade 351 - 266
and other payables
Deferred tax provision 236 935 105
Total equities and liabilities 63,500 23,343 65,961
Consolidated Statement of Cash Flows
Six months Six months Year
ended ended
ended
30June 30June
31December
2010 2009
2009
(Unaudited) (Unaudited)
(Audited)
GBP'000 GBP'000
GBP'000
Operating activities
Profit before tax 4,431 1,553 2,239
Adjustments for:
Depreciation and amortisation 4,387 1,906 6,158
Share based payments 241 77 332
Loss on disposal of property, plant and - - 179
equipment
Exchange differences - (188) 168
(Increase)/Decrease in receivables (996) 706 (2,306)
(Decrease)/Increase in payables (3,320) (1,189) 5,458
Cash generated from operations 4,743 2,865 12,228
Taxation (1,854) 342 (222)
Net finance (cost)/income (109) 50 150
Net cash generated from operating 2,780 3,257 12,156
activities
Investing activities
Finance received 10 33 66
Finance costs (119) (83) (216)
Purchase of subsidiary undertaking (net (552) (800) (23,278)
of cash acquired)
Addition of intangible assets (2,927) (1,604) (4,778)
Purchase of property, plant and equipment (632) (153) (462)
Net cash used in investing activities (4,220) (2,607) (28,668)
Net cash inflow/(outflow) before (1,440) 650 (16,512)
financing
Financing activities
Dividends paid (753) (419) (720)
Issue of shares (net of costs) 276 - 27,329
Finance lease proceeds 35 40 59
Capital repayments of finance leases (69) (83) (178)
Net cash (outflow)/inflow from financing (511) (462) 26,490
Foreign exchange differences (224) (132) (29)
Decrease/(Increase) in cash and cash (2,175) 56 9,949
equivalents in period
Net cash and cash equivalents at start of 10,957 1,008 1,008
the period
Net cash and cash equivalents at end of 8,782 1,064 10,957
the period
Cash and cash equivalents 8,782 2,811 12,093
Bank overdraft - (1,747) (1,136)
Net cash and cash equivalents 8,782 1,064 10,957
Consolidated Statement of Changes in Equity
Share Share Translation Retained Total
capital premium reserve earnings
account GBP'000
GBP'000 GBP'000 GBP'000
GBP'000
At 1 January 2009 365 5,993 2,484 7,374 16,216
Exchange translation - - (416) - (416)
differences
Profit for the year - - - 1,579 1,579
Total recognised income and - - (416) 1,579 1.163
expense
Dividends paid - - - (720) (720)
Share option grants - - - 332 332
Shares issued 136 27,193 - - 27,329
At 31 December 2009 501 33,186 2,068 8,565 44,320
At 1 January 2010 501 33,186 2,068 8,565 44,320
Exchange translation - - 85 - 85
differences
Profit for the period - - - 2,973 2,973
Total recognised income and - - 85 2,973 3,058
expense
Dividends paid - - - (753) (753)
Share option grants - - - 241 241
Shares issued 2 274 - - 276
At 30 June 2010 503 33,460 2,153 11,026 47,142
Notes to the interim report
1 Basis of preparation of the interim report
The financial information set out in this interim report does not constitute
statutory accounts as defined in section 434 of the Companies Act 2006. The
Group's statutory financial statements for the year ended 31 December 2009 have
been delivered to the Registrar of Companies. The auditor's report on those
financial statements was unqualified and did not contain statements under
Section 498(2) or Section 498(3) of the Companies Act 2006.
This interim financial report has been prepared in accordance with
International Accounting Standard 34 Interim Financial Reporting. The interim
financial information has been prepared on a basis which is consistent with the
accounting policies adopted by the Group for the last financial statements and
comparative figures are given for the six months ended 30 June 2009 and the
year ended 31 December 2009.
2 Segmental information
Six months ended 30 June 2010 Europe Asia/Pacific America Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue by origination 13,865 669 21,670 36,204
Revenue by customer location 13,283 1,384 21,537 36,204
Assets 24,527 735 38,238 63,500
Liabilities 7,555 273 8,530 16,358
Property, plant and equipment 700 107 1,390 2,197
Capital expenditure 2,289 12 1,258 3,559
Amortisation and depreciation 2,031 23 2,333 4,387
Six months ended 30 June 2009 Europe Asia/Pacific America Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue by origination 9,252 245 4,233 13,730
Revenue by customer location 8,492 285 4,953 13,730
Assets 15,111 392 7,840 23,343
Liabilities 5,631 127 1,426 7,184
Property, plant and equipment 441 95 208 744
Capital expenditure 1,421 16 320 1,757
Amortisation and depreciation 1,254 20 632 1,906
Year to 31 December 2009 Europe Asia/Pacific America Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue by origination 19,370 477 29,669 49,516
Revenue by customer location 22,946 1,390 25,180 49,516
Assets 27,683 842 37,436 65,961
Liabilities 11,153 288 10,200 21,641
Property, plant and equipment 831 96 1,352 2,279
Capital expenditure 3,603 15 1,622 5,240
Amortisation and depreciation 3,252 40 2,866 6,158
Substantial elements of the Group's costs cannot meaningfully be allocated
across the geographical segments. Accordingly no segmental analysis of profit
can be usefully disclosed.
3 Earnings per share
Six months Six months Year
ended ended
ended
30June 30June
31December
2010 2009
2009
(Unaudited) (Unaudited)
(Audited)
GBP'000 GBP'000
GBP'000
Profit for the period 2,973 1,186 1,579
Amortisation of business combination 1,150 273 3,755
intangible assets and exceptional items
(net of taxation)
Adjusted profit for the period 4,123 1,459 5,334
Basic earnings per share (pence) 5.93 3.25 3.69
Adjusted earnings per share (pence) 8.22 4.00 12.47
Diluted earnings per share (pence) 5.89 3.02 3.64
Adjusted diluted earnings per share 8.16 3.72 12.28
(pence)
Shares Shares Shares
Issued ordinary shares at start of the 50,081,852 36,506,075 36,506,075
period
Ordinary shares issued in the period 225,788 - 13,575,777
Issued ordinary shares at end of the 50,307,640 36,506,075 50,081,852
period
Weighted average number of shares in 50,171,422 36,506,075 42,764,427
issue for the period
Dilutive effect of options 336,835 2,728,255 664,296
Weighted average shares for diluted 50,508,257 39,234,330 43,428,723
earnings per share
4 Tax
Six months Six months Year
ended ended
ended
30June 30June
31 December
2010 2009
2009
(Unaudited) (Unaudited)
(Audited)
GBP'000 GBP'000
GBP'000
Current tax
UK tax 239 198 59
Foreign tax 1,087 96 1,453
1,326 294 1,512
Deferred tax 132 73 (852)
Total income tax expense 1,458 367 660
Tax has been estimated based on the current rates of tax applicable in each
country of operations.
5 Goodwill
Six months Year ended
ended
31 December
30June 2010 2009
(Unaudited) (Audited)
GBP'000 GBP'000
At 1 January 16,742 6,266
Business combinations - 10,544
Foreign exchange difference 337 (68)
Total 17,079 16,742
6 Other intangible assets
Domain Software Panel Customer Other Total
names acquisition lists
GBP'000 costs GBP'000 GBP'000
GBP'000 GBP'000
GBP'000
Cost
At 1 January 2009 79 5,234 4,363 1,520 - 11,196
Additions in the year 7 2,358 2,413 - - 4,778
Business combinations - 6,581 982 1,341 540 9,444
Disposals - (385) (687) (93) - (1,165)
Exchange differences - (147) (276) (81) (60) (564)
At 31 December 2009 86 13,641 6,795 2,687 480 23,689
Additions in the period 1 1,665 1,261 - - 2,927
Disposals - - - - - -
Exchange differences (8) (288) (481) 124 18 (635)
At 30 June 2010 79 15,018 7,575 2,811 498 25,981
Amortisation
At 1 January 2009 - 912 2,710 271 - 3,893
Business combinations - 150 - - - 150
Charge for the year - 2,264 2,202 486 296 5,248
Disposals - (217) (687) (93) - (997)
Exchange differences - (37) (182) (19) 18 (220)
At 31 December 2009 - 3,072 4,043 645 314 8,074
Charge for the period - 1,950 1,041 433 52 3,476
Disposals - - - - - -
Exchange differences - (218) (37) 31 (62) (286)
At 30 June 2010 - 4,804 5,047 1,109 304 11,264
Net book amount
At 30 June 2010 79 10,214 2,528 1,702 194 14,717
At 31 December 2009 86 10,569 2,752 2,042 166 15,615
7 Dividends paid during the period
Dividends related to the year ended 31 December 2009 of 1.50 pence per share
were paid on 4 June 2010 totalling GBP753,000.
8 Copies of the interim report
Copies of the interim report will be sent to shareholders shortly and will be
available from the registered office of the Company at 29 Curzon Street, London
W1J 7TL and from the Company's website www.toluna-group.com/.
END
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