TIDMTOL
8 March 2011
TOLUNA PLC
("ToLuna", the "Company" or the "Group")
Unaudited results for the year ended 31 December 2010
Highlights
* Group revenues of GBP73.6 million, up from GBP49.5 million in 2009, with
excellent progress and market share gains in Europe and strong growth in
Asia Pacific
* Underlying profit before tax* of GBP12.6 million, up from GBP7.6 million in
2009
* Net cash in excess of GBP13 million (2009 GBP11 million)
* Average of more than a million votes per day on Toluna.com social voting
website
* Proposed acquisition of ToLuna by ITWP Acquisitions ("ITWP"), allowing
shareholders to receive 320p cash per share
Note: *profit before business combination amortisation and exceptional items
Frédéric-Charles Petit, Chief Executive, comments:
In 2010, ToLuna completed its transformation and is emerging as a global force
in digital market research. Our respondent sources, social communities,
technologies, infrastructure, staff and management team give us great
confidence in the future. As we enter our second decade, the offer from ITWP is
a recognition both of our past success and of the promise of a bright future
for ToLuna with a clear strategic objective: leading the digital transformation
of the market research industry.
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
ToLuna is a leading independent provider of online panels, communities and
technology services to the market research industry. It enables organisations
to generate consumer insight by combining its online market research panels
with industry leading technology. It has offices in the US, Canada, UK, France,
the Netherlands, Romania, Germany, India, Australia, Japan and Hong Kong.
Chairman's Statement
I am pleased to report on the unaudited results for the year ended 31 December
2010. It was another year of significant growth for ToLuna, which is benefiting
from the platform for expansion established in recent years. Revenues for 2010
include a full year contribution from Greenfield Online ISS, which was acquired
in July 2009.
Since the year end, ToLuna's independent directors have announced the terms of
a proposed acquisition of ToLuna by ITWP Acquisitions. Details of the proposal,
which are intended to be implemented by a scheme of arrangement, were announced
on 14 February 2011 and will be sent to shareholders today.
Results
ToLuna made excellent progress in 2010, with particularly strong performance in
Europe and rapid growth in the Asia Pacific region, the completion of the
integration of Greenfield Online ISS in North America, and further advances in
its technology and social voting services.
Total group revenues were GBP73.6 million, compared to GBP49.5 million in 2009.
These revenues include a full year contribution from Greenfield Online ISS,
which was acquired in July 2009.
On a pro forma basis, (assuming Greenfield ISS was part of the group for the
full year in 2009) group revenues for 2010 increased by 2 per cent over 2009.
The revenues for the European region grew by 10 per cent over pro forma
revenues for 2009, with market share gains being achieved across the region and
particularly strong performances in the UK and France. Asia Pacific is one of
the fastest growing regions for the global market research industry with
Australia, India, Korea and Japan also becoming important markets for ToLuna.
In Asia Pacific, revenue growth was 62 per cent on a pro forma basis. US
revenues declined approximately 6 per cent on a pro forma basis for 2009.
The integration of Greenfield Online ISS was completed in the first half of
2010 and since then significant changes have been made. New initiatives have
been undertaken in the US operations and early in 2011 George Terhanian,
previously with Harris Interactive, was appointed President of ToLuna USA, to
reignite growth in the US. The Board expects the impact of these changes to be
reflected in the second half of 2011.
Your Board focuses on underlying profit before tax (before business combination
amortisation and exceptional items) as an important measure of progress. For
2010, underlying profit before tax was GBP12.6 million up from GBP7.6 million in
2009.
Profit after tax amounted to GBP6.6 million compared to GBP1.6 million in 2009.
ToLuna has again generated positive cash flow from operations of GBP15.8 million
(2009: GBP12.2 million) during the year and at the year end, net cash was more
than GBP13 million (2009: GBP11 million).
Dividends
On 21 October 2010, the Company paid an interim dividend of 1.2 pence per
share. No final dividend is proposed by the directors in light of the proposed
acquisition by ITWP Acquisitions Limited. Should the proposed acquisition not
become effective, the directors will consider proposing a final dividend for
the year ended 31 December 2010.
Operations
During 2010 ToLuna opened an office in Hong Kong. We now operate panels in 34
countries, which include some of the faster growing economies in the world.
This offers great opportunities to continue the rapid growth ToLuna has
delivered since its foundation.
The social voting website ToLuna.com continues to attract significant interest.
On average, more than a million votes are now cast per day, equivalent to 11
votes per second. Voting has recently been made available as an iPhone
application.
The Company has further developed its technology offering. PanelPortal, which
enables customers to conduct their own research, can now integrate Twitter and
Facebook feeds.
The Board is particularly grateful to ToLuna's management and staff for the
dedication and expertise which has sustained the Company's remarkable progress
and innovation.
In the early months of 2011, Europe and Asia Pacific have continued to perform
well. In North America, we are confident that the benefits of the measures
outlined above will come through in the second half of the year. Your Board is
optimistic about the replication in North America of the business model that
has served the group so well in Europe.
Proposed Acquisition of ToLuna by ITWP
As announced on 14 February 2011, ITWP proposes to acquire ToLuna by means of a
scheme of arrangement.
Full details of the scheme of arrangement were announced on 14 February 2011
and will be sent to shareholders today. If it is approved by shareholders and
duly completed, ToLuna will become privately owned and the London Stock
Exchange will be requested to cancel trading in ToLuna shares on the AIM
market.
Should the Scheme be approved and completed, ITWP, which is supported by
Verlinvest, a significant shareholder in ToLuna, has stated that it intends to
take significant steps aimed at accelerating ToLuna's growth. It believes the
development of ToLuna under this strategy is much better suited to private
ownership.
I am pleased that ToLuna will continue to have excellent prospects to continue
the growth it has achieved since its flotation in 2005 at 70p per share and an
initial market value of GBP25 million. This growth is testimony to the
exceptional quality of its staff and management.
I wish to thank shareholders for their loyal support of the company since 2005,
which has helped us to make such impressive progress. I am confident that
ToLuna remains a business with excellent products, expert staff and management
and an exciting future.
George Kynoch
Chairman
8 March 2011
Consolidated Income Statement
Notes Year ended Year ended
31December 31December
2010 2009
(Unaudited) (Audited)
GBP'000 GBP'000
Revenue 2 73,641 49,516
Staff costs (26,274) (22,374)
Other operating expenses (34,616) (19,429)
Underlying operating profit 12,751 7,713
Business combination (2,526) (1,802)
amortisation
Exceptional items (577) (3,522)
Operating profit 9,648 2,389
Finance income 26 66
Finance expense (181) (216)
Profit before tax 9,493 2,239
Tax expense 4 (2,900) (660)
Profit for the financial year 6,593 1,579
Earnings per share
Basic 3 13.12p 3.69p
Diluted 3 12.93p 3.64p
Consolidated Statement of Comprehensive Income
Year ended Year ended
31December 31December
2010 2009
(Unaudited) (Audited)
GBP'000 GBP'000
Profit for the financial year 6,593 1,579
Exchange translation 277 (416)
differences
Total comprehensive income for 6,870 1,163
the year
Consolidated Statement of Financial Position
Notes Year ended Year ended
31December 31December
2010 2009
(Unaudited) (Audited)
GBP'000 GBP'000
Non-current assets
Goodwill 5 16,930 16,742
Other intangible assets 6 15,992 15,615
Property, plant and equipment 2,204 2,279
Trade and other receivables 615 484
35,741 35,120
Current assets
Trade and other receivables 20,802 18,748
Cash and cash equivalents 13,774 12,093
34,576 30,841
Total assets 70,317 65,961
Equity and liabilities
Equity
Share capital 505 501
Share premium account 33,827 33,186
Translation reserve 2,345 2,068
Retained earnings 14,141 8,565
Total equity 50,818 44,320
Current liabilities
Trade and other payables 16,666 19,227
Financial liabilities: bank 529 1,136
overdraft
Tax liabilities 1,471 907
Total current liabilities 18,666 21,270
Non-current liabilities 261 266
Trade and other payables
Deferred tax provision 572 105
Total equity and liabilities 70,317 65,961
Consolidated Statement of Cash Flows
Year ended Year ended
31December 31December
2010 2009
(Unaudited) (Audited)
GBP'000 GBP'000
Operating activities
Profit before tax 9,493 2,239
Adjustments for:
Depreciation and amortisation 9,268 6,158
Share based payments 377 332
Loss on disposal of property, plant and - 179
equipment
Exchange differences - 168
Increase in receivables (2,027) (2,306)
(Decrease)/increase in payables (1,346) 5,458
Cash generated from operations 15,765 12,228
Taxation (2,582) (222)
Net finance income 160 150
Net cash generated from operating 13,343 12,156
activities
Investing activities
Finance received 26 66
Finance costs (186) (216)
Purchase of subsidiary undertaking (net (552) (23,278)
of cash acquired)
Addition of intangible assets (8,314) (4,778)
Purchase of property, plant and equipment (1,333) (462)
Net cash used in investing activities (10,359) (28,668)
Net cash inflow/(outflow) before 2,984 (16,512)
financing
Financing activities
Dividends paid (1,357) (720)
Issue of shares (net of costs) 645 27,329
Finance lease proceeds 35 59
Capital repayments of finance leases (130) (178)
Net cash (outflow)/inflow from financing (807) 26,490
Foreign exchange differences 111 (29)
Increase in cash and cash equivalents 2,288 9,949
Net cash and cash equivalents at start of 10,957 1,008
the year
Net cash and cash equivalents at end of 13,245 10,957
the year
Cash and cash equivalents 13,774 12,093
Bank overdraft (529) (1,136)
Net cash and cash equivalents 13,245 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 - - 277 - 277
differences
Profit for the period - - - 6,593 6,593
Total recognised income and - - 277 6,593 6,870
expense
Dividends paid - - - (1,357) (1,357)
Share option grants - - - 340 340
Shares issued 4 641 - - 645
At 31 December 2010 505 33,827 2,345 14,141 50,818
Notes to the unaudited results for the year ended 31 December 2010
1 Publication of non-statutory accounts
The financial information set out in this announcement report does not
constitute statutory accounts as defined in the Companies Act 2006.
The financial information for the year ended 31 December 2009 has been
extracted from the Group's financial statements to that date which received an
unmodified auditor's report and have been delivered to the Registrar of
Companies. The Group's statutory financial statements for the year ended 31
December 2010 will be finalised on the basis of the financial information
presented by the directors in this preliminary announcement and will be
delivered to the Registrar of Companies in due course.
2 Segmental information
Year ended 31 December 2010 Europe Asia/Pacific America Total
GBP'000 GBP'000 GBP'000 GBP'000
Revenue by origination 29,697 3,719 40,225 73,641
Revenue by customer location 28,138 3,430 42,073 73,641
Assets 33,042 784 36,491 70,317
Liabilities 9,170 481 9,848 19,499
Property, plant and equipment 681 27 1,496 2,204
Capital expenditure 6,151 10 3,486 9,647
Amortisation and depreciation 4,496 3 4,769 9,268
Year ended 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
Year ended Year ended
31December 31December
2010 2009
(Unaudited) (Audited)
GBP'000 GBP'000
Profit for the financial year 6,593 1,579
Amortisation of business combination 2,155 3,755
intangible assets and exceptional items
(net of taxation)
Adjusted profit for the financial year 8,748 5,334
Basic earnings per share (pence) 13.12 3.69
Adjusted earnings per share (pence) 17.40 12.47
Diluted earnings per share (pence) 12.93 3.64
Adjusted diluted earnings per share 17.16 12.28
(pence)
Shares Shares
Issued ordinary shares at start of the 50,081,852 36,506,075
period
Ordinary shares issued in the year 415,975 13,575,777
Issued ordinary shares at end of the 50,497,827 50,081,852
period
Weighted average number of shares in 50,262,492 42,764,427
issue for the year
Dilutive effect of options 728,023 664,296
Weighted average shares for diluted 50,990,515 43,428,723
earnings per share
4 Tax
Year ended Year ended
31 December 31 December
2010 2009
(Unaudited) (Audited)
GBP'000 GBP'000
Current tax
UK tax 1,350 59
Foreign tax 1,083 1,453
2,433 1,512
Deferred tax 467 (852)
Total income tax expense 2,900 660
Tax has been estimated based on the current rates of tax applicable in each
country of operations.
5 Goodwill
As at As at
31 December 31 December
2010 2009
(Unaudited) (Audited)
GBP'000 GBP'000
At 1 January 16,742 6,266
Business combinations - 10,544
Foreign exchange difference 188 (68)
Total 16,930 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 year 11 3,055 5,248 - - 8,314
Disposals - - (1,063) - - (1,063)
Exchange differences (9) (44) (186) 163 (23) (99)
At 31 December 2010 88 16,652 10,794 2,850 457 30,841
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 year - 3,358 2,957 690 103 7,108
Disposals - - (546) - - (546)
Exchange differences - (122) 240 111 (16) 213
At 31 December 2010 - 6,308 6,694 1,446 401 14,849
Net book amount
At 31 December 2010 88 10,344 4,100 1,404 56 15,992
At 31 December 2009 86 10,569 2,752 2,042 166 15,615
7 Dividends paid
Year ended Year ended
31 December 31 December
2010 2009
(Unaudited) (Audited)
GBP'000 GBP'000
Final dividend - 1.5 pence (2009: 1.15 753 419
pence)
Interim dividend - 1.2 pence (2009: 0.6 604 301
pence)
1,357 720
No final dividend is proposed by the directors in light of the proposed
acquisition by ITWP Acquisitions Limited. Should the proposed acquisition not
become effective, the directors will consider proposing a final dividend for
the year ended 31 December 2010.
8 Post balance sheet event: proposed acquisition of ToLuna by ITWP Acquisitions
Limited (ITWP)
On 14 February 2011, ITWP announced its intention to acquire the shares of
ToLuna for a mix of shares, notes and cash, to be implemented by way of a
scheme of arrangement under Part 26 of the Companies Act 2006.
ITWP is a newly incorporated company formed for the purpose of implementing the
acquisition of ToLuna. ITWP is supported by Verlinvest SA, a significant
shareholder in ToLuna since 2009.
ITWP has received irrevocable undertakings from Eurovestech plc, Invesco Asset
Management Limited, and the Independent Directors who hold ToLuna Shares to
vote in favour of the Scheme (including the required resolutions) in respect of
their entire beneficial holdings of ToLuna Shares amounting, in aggregate, to
30,120,964 ToLuna Shares, representing approximately 59.6 per cent. of the
existing issued share capital of ToLuna.
ITWP has also received undertakings from Eurovestech plc and Invesco Asset
Management Limited to elect to receive non-cash consideration which will enable
all other shareholders, other than Verlinvest SA and
Frederic-Charles Petit, to receive 320p in cash per ToLuna Share.
Following the completion of the acquisition Frédéric-Charles Petit, Founder and
Chief Executive of ToLuna, will be appointed as a director of ITWP and will
continue in his current role as leader of the executive management team of the
ToLuna Group.
It is expected, subject to the satisfaction of regulatory and all other
relevant conditions, that the acquisition will become effective during April
2011.Further details of the terms of the acquisition proposed by ITWP are
available on the Company's website www.toluna-group.com/.
Auditors
The Audit Committee has determined that, due to substantial changes in the
group in the recent past, it is in the interests of audit quality that the
current audit engagement partner should continue in his role for a further
year. The Audit Committee is satisfied that by the application of safeguards,
the extension does not undermine the objectivity and independence of the
auditor.
Grant Thornton UK LLP has agreed to this extension, which will bring the total
period served by the audit engagement partner to six years, as permitted by the
Ethical Standards.
END
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