TIDMZIN
RNS Number : 0371O
Zinc Media Group PLC
30 September 2019
Zinc Media Group plc
("Zinc", the "Company" or the "Group")
Preliminary results
for the year ended 30 June 2019
Zinc Media Group plc, the TV and multimedia content producer,
today announces its preliminary unaudited results for the financial
year ended 30 June 2019.
Highlights
-- 14% increase in revenues year-on-year
-- Adjusted EBITDA* profit achieved for third year in succession
-- Made outside London (MoL) revenues up 32% year on year driven by Tern Television
-- International commissions now 20% of TV revenues with
commissions from HBO, National Geographic and Smithsonian
-- Commissions from all UK PSB channels, including the
prestigious 9pm slot on ITV and a BAFTA award winning programme for
BBC1
-- First SVoD^ commission with Love Nature through specialist factual division Blakeway
-- In 2019/20 new management have already identified 3% gross
margin improvements. However, these are likely to be offset by
losses in the non-TV businesses in the short term while actions
already in train lead to profitability in the medium term.
-- Mark Browning appointed as CEO and Will Sawyer appointed as
CFO in the period. A proven team capable of building Zinc Media's
ambitions in global content markets.
-- New board now in place. Christopher Satterthwaite (formerly
Chime Communications plc) appointed Chairman and Andrew Garard
(formerly ITV plc) appointed Non-Executive Director.
Financial performance
-- Group revenues have grown by 14% to GBP24.63m (2018: GBP21.68m)
-- Adjusted EBITDA* profit of GBP0.13m (2018: GBP0.49m)
-- Operating loss (after exceptional items) for the year of
GBP2.53m (2018: loss of GBP1.56m) driven by GBP1.74m of exceptional
items, including a GBP0.99m impairment in the carrying value of
goodwill in the Communications division, GBP0.42m of costs related
to the earnout consideration in respect of Tern Television and
GBP0.31m of restructuring costs
-- Basic loss per share from continuing activities 0.20p (2018: loss per share 0.17p)
-- Cash of GBP3.21m (2018: GBP3.55m) and net debt (being cash
less borrowings) of GBP0.53m (2018: net debt GBP0.003m)
-- GBP0.1m conversion of preference shares completed during the year
* Adjusted EBITDA represents earnings before interest, tax,
depreciation, amortisation, share based payment charge and
exceptional items
^ Subscription Video on Demand
Mark Browning, CEO, commented:
"2019/20 will be a transition year for the Group as it addresses
the profitability challenge it faces. I am confident that we now
have good visibility of the issues within the Group and know where
improvements need to be made. We will focus on diversifying and
growing our revenue within TV and non-TV, improving margins and
building cultural and operational excellence. The medium-term
prospects for sustained profitability look good."
Christopher Satterthwaite, Chairman, commented:
"I join Zinc Media Group at a pivotal point in its development.
The Company is embarking on a far-reaching transformation plan to
capitalise on its market opportunity and grow the business, in the
longer term, into a significant content creation company. This
transition is being led by a new management team with a proven and
very recent track record of transforming underperforming TV
businesses into highly profitable companies, supported by a
refreshed board with far-reaching media expertise aligned to the
needs of the company. With the recent appointment of Andrew Garard
from ITV plc, we have someone who has been at the forefront of
M&A activity on a global scale.
The Board would like to thank Peter Bertram who stepped down as
Chairman at the end of the financial year after 8 years with the
company, and David Galan who resigned as CEO in November 2018 after
3 years with the company, as well as all our employees for their
professional and dedicated work across the Group."
For further information please contact:
Zinc Media Group plc +44 (0) 20 7878 2311
Christopher Satterthwaite, Chairman
Mark Browning, Chief Executive Officer
www.zincmedia.com
N+1 Singer (NOMAD and Broker to Zinc Media Group plc) +44 (0) 20 7496 3000
Mark Taylor / Lauren Kettle
Peterhouse Corporate Finance Limited (Joint Broker) +44 (0) 20 7469 0932
Martin Lampshire / Duncan Vasey / Eran Zucker
Strategy and Outlook
The Company's new management team has adopted a wide-ranging
transformation plan to address the issues that prevent the Group
delivering the level of margin and profitability that should be
expected in a business of this scale with good revenues.
The transformation plan will prioritise four areas:
1. Improvement in the gross margins of television production
2. Revenue growth and diversification
3. Cultural and creative renewal
4. Investment in operational excellence
A number of new initiatives are underway since the new
management started which should address each of these four
strategic priorities. Some of these include:
-- Investment in technology, production workflow and management
to increase gross Television production margins, initially by 3%;
and
-- New pipeline tools and management information to facilitate
better margin management across the Group; and
-- Investment in business development to grow revenues in the medium term; and
-- Financial incentivisation and transparency on measurement of
performance to reward margin and profit growth; and
-- Investment to improve cash management and monitor newly introduced KPIs.
To support the new CEO and CFO, the company has refreshed the
board with a new Chairman and Non-Executive Director.
The market opportunity is considerable, and the Group should be
well placed to take advantage with the actions management have
identified. Revenues from UK TV production companies grew to record
levels in the last 12 months, the SVoD (Subscription Video on
Demand) and multi-channel commissioning market is buoyant, MoL
(Made outside London) factual commissioning continues to grow, and
the non-TV revenues of UK indies are also delivering strong growth
across the sector. As a leading producer in the UK nations and
regions, with a growing reputation with the international
multi-channels and untapped potential in non-TV content creation,
the Group can become a vehicle for significant profit growth in the
years ahead.
The London and Manchester television businesses start 2019/20 in
line with previous years. Within weeks of joining the Group the new
management began addressing the margin challenges that have held
these television businesses back, and through some strategic
investments, modernising workflows and organisational improvements
have identified an initial 3% gross margin improvement with plans
for further improvements over the coming 12 months. At current
revenue forecasts this margin improvement should see a number of
the London and Manchester TV businesses turn from divisional loss
to profit in the forthcoming financial year.
In the period post year-end Tern TV has continued its excellent
revenue and margin performance. Reef TV shows signs of recovery
having picked up two returning series at the start of the 2019/20
financial year, both of which look set to deliver substantially
better margins than their first series. Elsewhere, Brook Lapping
and Blakeway are in a good position but are dependent on winning
large second series recommissions from international broadcasters.
Blakeway North has had a slower than anticipated start to the
year.
International expansion, particularly within the growing SVoD
market, remains a largely untapped growth area for Zinc's
television business. In addition, there is further opportunity to
grow revenues from international multi-channel networks and build
on the recent well received productions from the likes of National
Geographic. By their nature these programmes take a significant
time in gestation, sometimes straddling financial years, but
deliver big revenues when they eventually deliver.
Alongside prioritising margin management, the Group's television
businesses need to diversify into new genres and amongst a wider
client base. This will take investment and time but will create a
better revenue and margin mix. It will also smooth out and reduce
the Group's exposure to the inevitable peaks and troughs that come
when a business is dependent on a low number of high value
commissions from a small number of business generators.
The Group's two non-TV businesses, Zinc Communicate and Ten Alps
Communications, are facing financial challenges in the 2019/20
financial year. In the short term these difficulties will create a
drag on the wider Group performance as they are likely to offset
growth and margin improvement in some of the Television businesses.
Beginning this financial year, the company should start
re-positioning both businesses into larger and more profitable
markets by redefining the product proposition and investing in new
business generating personnel. Based on the new management team's
experience of building non-TV content businesses, the company is
confident that these businesses can make a positive contribution to
the Group and, indeed, that in the medium term they have the
potential to deliver higher margin revenues than traditional
TV.
The Group's property will be reviewed in the 2019/20 financial
year as the Group moves from its current London office to
alternative London premises in the first quarter of 2020.
CEO's Statement
Zinc Media Group's businesses in Television, Zinc Communicate
and Ten Alps Communications produce some of the UK's most respected
and most watched content. The Group is well-established as one of
the country's premium content companies led by trusted producers,
operating under familiar and respected labels.
The Group's top line revenue continued to perform well at
GBP24.6m for the year, a year on year increase of 14%, driven by
growth in Television where revenues were up GBP3.6m (21%) during
the last 12 months. This top line growth came despite revenue
decline in its non-TV businesses, Zinc Communicate and Ten Alps
Communications. However, too many divisions struggled to deliver
divisional profit so ensuring strong revenue translates into
increased margins is one of the primary objectives for the new
management team. Several initiatives have been taken since the
period end to improve margins which are already bearing fruit.
Modest increments to margin will translate into much improved
long-term profitability with the correlating benefits to
cashflow.
One of the highlights of the year has been the strong
performance of the Group's most recent acquisition, Tern
Television, driven by a combination of returning series, including
series two of Emergency Helicopter Medics for More4, and a high
volume of single commissions. With offices in Glasgow, Belfast and
Aberdeen, Tern is well placed to continue capitalising on the trend
for nations and regions commissions. Blakeway North, based in
Manchester, had a flat revenue year but with investments now in
place, and the fact the north of England attracts a large share of
made outside London (MoL) factual commissioning, this company
should deliver better performance in the coming years.
Elsewhere in the Group the London based current affairs and
documentary indie Brook Lapping delivered two of the most impactful
television programmes of the year with Brexit: Behind closed doors,
and Europe: Ten years of turmoil, both of which had unrivalled
access and were distributed widely in the UK and Europe. London
based specialist factual indie Blakeway delivered some outstanding
programmes, including the multi-million pound series Lost Cities
for National Geographic that was shot in 4k and the access
documentary and ratings hit Fighter Pilots which transmitted in the
prestigious 9pm slot on ITV and is set to be sold globally in the
years ahead. Brook Lapping also won a BAFTA in the specialist
factual category for Suffragettes with Lucy Worsley.
Three of the Group's businesses saw revenue decline in 2018/19:
the London based popular factual business Reef TV and the company's
two non-TV businesses. Zinc Communicate's high value road safety
contract with Transport for London for Children's Traffic Club
ended in the summer of 2019 and Ten Alps Communications, based in
Macclesfield and Manchester, experienced challenging market
conditions.
I joined Zinc from ITN in May 2019 for the final two months of
the 2018/19 year. Following the appointment of Will Sawyer as Group
CFO in October 2018 my appointment reunites the management team
that led the turnaround of ITN Productions over the last 10 years.
Zinc Media Group has significant long-term growth potential and is
a very attractive vehicle from which to build a scalable content
creation company. Much work has already been done to address the
company's profitability challenges, notably through initiatives to
enhance margins in the London and Manchester TV businesses. Plans
are in place to reverse the decline in non-TV revenues and
capitalise on the significant market opportunity for content
creation outside the traditional television model. By building
sustainable revenues and improving margins, the Group should be
well placed to deliver long term profitability.
Business Review
Tern Television - Popular Factual
Operating from three sites in Glasgow, Belfast and Aberdeen,
Tern is financially the best performing division in the group and
one of the two profitable divisions in 2018/19. It has over 20
different titles currently in production and a strong pipeline.
Tern is delivering well on its brief to be a first-choice
factual producer for UK nations and regions public service
broadcasting (PSB) commissioning. It secured a large Channel 4
commission Bones, which combines forensic science and history, made
by Tern Belfast, and series two of Emergency Helicopter Medics for
More4, as well as numerous single commissions.
The Group is working hard to deliver additional value to clients
through its nations and regions footprint, and this was
particularly evident through the success of the co-production of
Critical Incident with Reef TV in London. This programme for the
BBC was pitched by the Reef team in London and made by the Tern
team in Belfast.
Other programme highlights from the past year include the From
Hell strand for Channel 4 which comes from Tern Belfast and
includes Holidays from Hell and Roads from Hell. Great British Road
Journeys for Channel 4 reunited the stars of All Creatures Great
and Small, Christopher Timothy and Peter Davison, and was recently
Channel 4's biggest weekend ratings show.
Tern is well placed to benefit from planned group-wide
investments in new production workflows which will further
strengthen its already strong margins.
Blakeway North - Popular Factual
Blakeway North, the Group's regional indie based in Manchester,
is also capitalising on the trend for UK PSB's to produce from the
regions and is investing in new talent at the executive producer
level in order to win more commissions. Blakeway North has
continued to exploit a variety of markets, from Children's
Television at the BBC to factual entertainment on Channel 5. It has
also picked up non-TV revenues from enterprises including The Tate,
Liverpool. Most recently it won a series from another new digital
client, BBC Learning.
Series 4 of Bargain Loving Brits for Channel 5 delivered
consistently high audiences and there is optimism it will be
recommissioned. Blakeway North also picked up some high-profile
awards for its work, including The Japan Prize 2018, an
International Emmy Nomination 2018 for Nikki Lilly and Best
Independent Production Company 2018 in the Prolific North
Awards.
Blakeway London & Bristol - Specialist Factual
This unit has continued to grow revenue with a particular focus
on natural history, history and archaeology. To capitalise on MoL
commissioning and to attract the highly specialised talent
required, we have opened a regional office in Bristol. The Bristol
team is already in production on several series.
This business won its first commission from the international
SVoD market this year with a commission from Love Nature. In a
co-production with ARTE, a 4-part series, The Farm is being
produced for international distribution. This is also being
produced by the Bristol office.
Other highlights from Blakeway's specialist factual unit include
a 4-part series for Channel 4, History of Britain, and National
Geographic's five-part series 'Lost Cities' with Albert Lin.
Brook Lapping - Factual & Current Affairs
Norma Percy's 3-part Europe series Inside Europe: 10 years of
turmoil for BBC 2 received great critical acclaim and was one of a
number of highly impactful programmes made by Brook Lapping. This
was followed by Brexit Behind the Scenes, a two-part series for the
BBC, ZDF, ARTE and NRK which had screenings at the European
Commission in Brussels and at Chatham House in London. In keeping
with its reputation for making some of the world's most impactful
television, Stolen Daughters: Kidnapped by Boko Haram for HBO was a
75-minute documentary telling the story of the kidnap by the
violent insurgent group of 276 Nigerian schoolgirls in 2014.
This business delivered other important documentaries which have
attracted multiple international co-production partners. 'Gaddafi's
Missing Millions' for BBC, VPRO and ARTE and, Blasphemy for BBC,
ARTE and Scandinavian broadcasters were all part of an impressive
run of programmes from the last financial year.
Reef - Popular Factual & Formats
The London based popular factual business Reef underwent
significant restructuring in 2018/19 in an effort to offset
considerable losses in the year. This unit was heavily dependent on
a particular genre of daytime television and on a single customer.
When Channel 4 underwent new management, Reef lost many of its
long-running series and had to develop new genres and customer
relationships. There are signs the business is turning a corner as
we enter the new financial year with two series re-commissions,
Police Code Zero for Channel 5 and Critical Incident for BBC
Daytime in a co-production with Tern in Belfast. There is further
opportunity to build business through co-productions with other
parts of the group who have offices in the nations and regions.
Zinc Communicate - Communications Content
Zinc Communicate experienced challenges this past year as
spending on CSR (corporate social responsibility) was delayed while
companies assess the uncertain economic climate. Zinc Communicate
hopes to offset some of the downturn by putting a renewed focus on
content with direct 'social purpose'; creating content that
communicates the client's business, vision and social values to all
its stakeholders.
The Children's Traffic Club (CTC) exemplifies this and was Zinc
Communicate's largest contract, managed on behalf of TfL (Transport
for London), solely focussing on delivering a road safety education
programme for under 5's. This recently received a Prince Michael
Road Safety Award in recognition of CTC's contribution toward TfL's
Vision Zero, linked to the promotion of active travel and
improvement in air quality. Due to budget constraints TfL did not
renew this contract and it terminated at the end of the 2018/19
financial year. This will have a significant negative impact on the
commercial performance of Zinc Communicate in 2019/20.
Ten Alps Communications - Publishing
The business traded profitably in 2018/19 but faces a difficult
year ahead as its largest client is forced to transition its
business model away from a commercial relationship which has lasted
for over a decade. Post Grenfell, the LABC (Local Authority
Building Control) is unable to operate with commercial partners in
the way it has done for many years, and as a result is unable to
renew its contract with Ten Alps Communications. The business
therefore faces a year of transition as it repositions into new
markets, with new product offerings. The other main contract in
this division is also up for tender in the coming year.
Financial Review
Income statement
Revenue from operations for the year was GBP24.63m (2018:
GBP21.68m) and gross profit was GBP6.91m (2018: GBP6.63m). Revenue
has increased as a result of Tern Television's strong performance
and its inclusion in the Group's accounts for a full year in
2018/19, having been acquired in November 2017. This has been
partially offset by a GBP2.9m reduction in Reef's revenue as many
of its long-running Channel 4 series came to an end, and a GBP0.4m
reduction in Zinc Communicate's revenue.
Total gross margin decreased during the year from 31 per cent to
28 per cent, with operating expenses representing 28 per cent of
revenues, remaining flat compared with FY18. The decrease in gross
margin was a consequence of lower margin additional television
production revenues, due to outsourcing some post production and
production management services as in-house resources were at
capacity. The Group has already begun to invest in and expand its
in-house post production capability and capacity and increase its
production management resource, which is expected to continue
throughout 2019/20 with the expectation that this will deliver
improvements in gross margins in the future.
Adjusted EBITDA (being earnings before interest, tax,
depreciation, amortisation, share based payment charge and
exceptional items) was GBP0.13m (2018: GBP0.49m), representing the
third consecutive year of a return to underlying profit after
several years of losses.
The operating loss increased to GBP2.53m (2018: GBP1.56m) due to
significant exceptional items. These include an impairment of
GBP0.99m in the carrying value of goodwill in the Communications
division (2018: GBP1.19m impairment in Reef), a decision taken by
the Board against a backdrop of the loss of the Transport for
London contract which resulted in a restructure of the division.
The Board is optimistic that Zinc Communicate will return to
profitability in the medium term but given the need to reposition
the business substantially it has taken the decision to write down
the carrying value of goodwill to zero. Reorganisation and
restructuring costs of GBP0.31m (2018: GBP0.19m) were incurred in
the year as a result of restructures across all the businesses.
Within exceptional items there is a GBP0.14m charge relating to
the change in fair value of contingent consideration payable on the
acquisition of Tern Television (2018: GBP0.7m credit in relation to
Reef). The charge relates to the over achievement that the Board
considers likely in respect of the three year earnout consideration
due to the former Tern Television shareholders. Exceptional items
also include earnout consideration due to the former Tern
Television shareholders who remained as senior management which has
been treated as remuneration of GBP0.29m (2018: GBP0.49m). This
treatment of earnout consideration is explained in Note 3.
The Board does not recommend the payment of a dividend for FY19
(2018: GBPnil).
Earnings per share
Basic and diluted loss per share from continuing operations in
the year was 0.20p (2018: loss per share of 0.17p). These measures
were calculated on the losses for the year attributable to Zinc
Media Group shareholders of GBP2.74m (2018: loss of GBP1.86m)
divided by the weighted average number of shares in issue during
the year being 1,399,591,089 (2018: 1,086,267,290).
Statement of Financial Position
Assets
The Group's non-current assets comprise goodwill and intangibles
of GBP5.44m (2018: GBP7.13m). The decrease reflects the impairment
of the carrying value of goodwill relating to Zinc Communicate of
GBP0.99m and amortisation of intangibles of GBP0.71m during the
year. Non-current assets comprise property and plant and equipment
of GBP0.37m (2018: GBP0.36m), which has remained flat compared to
the prior year.
Inventories have decreased to GBP0.24m (2018: GBP0.33m),
reflecting the net IFRS 15 adjustments through work-in-progress in
the Television division and movement in inventories in Zinc
Communicate. Trade and other receivables have increased by GBP1.64m
to GBP6.86m (2018: GBP5.22m), due to an increase in Television
trade debtors and accrued income in respect of two specific
productions for Channel 4 and ITV.
The Group had a cash balance of GBP3.21m as at 30 June 2019
(2018: GBP3.55m). The reduction of GBP0.34m reflects the cash
outflows from operating activities, payment of deferred
consideration to former Tern Television shareholders, tax and
capital purchases of GBP1.12m being partially offset by a working
capital improvement of GBP0.78m.
Equity and Liabilities
Total shareholders' equity at the year end was GBP2.66m (2018:
GBP5.38m). Retained losses have risen by GBP2.93m to GBP35.71m,
reflecting the GBP2.74m loss for the period plus an opening balance
adjustment relating to the change in IFRS 15 accounting policy on
revenue recognition of GBP0.19m (see note 1.4).
In November 2018, the Company converted GBP0.1m of preference
shares into ordinary shares. This conversion is explained in Note
8.
Current liabilities consisting of trade and other creditors have
increased to GBP8.98m (2018: GBP7.08m). This reflects a high level
of production activity at the year end for which there were a high
level of accrued costs, particularly on two multi-million pound
productions for National Geographic, and an increase in deferred
revenue relating to a Tern Television production for Channel 4 for
which a significant amount was billed pre year-end prior to
production commencing. Current liabilities include GBP0.50m which
is the second year earnout consideration payable to the former Tern
Television shareholders, which is payable shortly.
Long term liabilities consist of the Company's long term debt
obligations and potential earnout payments to the former Tern
Television shareholders. The Group had an outstanding balance on
long term debt of GBP3.74m at the year end (2018: GBP3.55m), held
by two of the Company's shareholders and with no financial
covenants relating to the debt. The repayment date on all the
Company's long-term debt obligations is a bullet repayment on 31
December 2020.
Cash Flows
The Group generated cash of GBP0.53m (2018: GBP2.35m outflow) in
its operations during the year due to a decrease in working capital
offsetting a cash outflow of GBP0.21m. The net movement in the year
was a decrease in cash of GBP0.32m (2018: increase of GBP0.57m)
after other cash outflows, mainly comprising the payment of the
second year earn-out to the Tern Television shareholders of
GBP0.56m and equipment purchases of GBP0.19m.
Comparative information
The Group has adopted IFRS 15 "Revenue from contracts with
customers" for the first time in the results for the year ended 30
June 2019. As a result, the Group has changed its accounting policy
for revenue recognition as detailed in note 1.4. The cumulative
effect of initially applying IFRS 15 is recognised as an adjustment
to the opening balance of equity at 1 July 2018. Therefore, the
comparative information has not been restated and continues to be
reported under IAS 18 and IAS 11.
Consolidated income statement
Zinc Media Group plc consolidated statement of comprehensive income
For the year ended 30 June 2019
2019 2018
(unaudited) (audited)
Notes GBP'000 GBP'000
---------------------------------------- ------- ------------ ----------
Continuing operations
Revenue 2 24,633 21,683
Cost of sales (17,725) (15,055)
---------------------------------------- ------- ------------ ----------
Gross Profit 6,908 6,628
Operating expenses (6,781) (6,137)
Adjusted EBITDA 127 491
Depreciation and amortisation (889) (711)
Share based payment charge (27) (74)
Exceptional items 3 (1,744) (1,264)
Operating loss (2,533) (1,558)
Finance costs (327) (253)
Finance income 1 -
---------------------------------------- ------- ------------ ----------
Loss before tax (2,859) (1,811)
Taxation 127 (44)
---------------------------------------- ------- ------------ ----------
Loss for the year (2,732) (1,855)
---------------------------------------- ------- ------------ ----------
Continuing operations attributable to:
Equity holders (2,740) (1,855)
Non-controlling interest 8 -
Loss for the year (2,732) (1,855)
---------------------------------------- ------- ------------ ----------
Earnings per share 5
from continuing operations (0.20)p (0.17)p
---------------------------------------- ------- ------------ ----------
Basic (0.20)p (0.17)p
Diluted (0.20)p (0.17)p
Consolidated statement of comprehensive income
Zinc Media Group plc consolidated statement of comprehensive income
For the year ended 30 June 2019
2019 2018
(unaudited) (audited)
GBP'000 GBP'000
---------------------------------------------- ------------- ----------
Loss for the year and total comprehensive
income for the year (2,732) (1,855)
Attributable to:
Equity holders (2,740) (1,855)
Non-controlling interest 8 -
(2,732) (1,855)
---------------------------------------------- ------------- ----------
Consolidated statement of financial position
Zinc Media Group plc consolidated statement of financial position
As at 30 June 2019
30 June 30 June
2019 2018
(unaudited) (audited)
Note GBP'000 GBP'000
----------------------------------------------------------- ----- ------------ ----------
Assets
Non-current
Goodwill and intangibles 6 5,436 7,132
Property, plant and equipment 369 355
5,805 7,487
----------------------------------------------------------- ----- ------------ ----------
Current assets
Inventories 236 333
Trade and other receivables 7 6,858 5,224
Cash and cash equivalents 3,213 3,545
10,307 9,102
----------------------------------------------------------- ----- ------------ ----------
Total assets 16,112 16,589
----------------------------------------------------------- ----- ------------ ----------
Equity
Shareholders' equity
Called up share capital 10 5,928 5,928
Share premium account 30,696 30,414
Share based payment reserve 133 106
Merger reserve 777 777
Preference shares 839 934
Retained earnings (35,714) (32,781)
----------------------------------------------------------- ----- ------------ ----------
Total equity attributable to equity holders of the parent 2,659 5,378
----------------------------------------------------------- ----- ------------ ----------
Non-controlling interests 8 -
----------------------------------------------------------- ----- ------------ ----------
Total equity 2,667 5,378
----------------------------------------------------------- ----- ------------ ----------
Liabilities
Non-current 9
Borrowings 3,743 3,548
Contingent consideration 595 583
Deferred tax 128 300
4,466 4,431
----------------------------------------------------------- ----- ------------ ----------
Current
Trade and other payables 8 8,423 5,929
Contingent consideration 500 750
Current tax liabilities 4 45
Secured finance leases 52 56
----------------------------------------------------------- ----- ------------ ----------
8,979 6,780
Total equity and liabilities 16,112 16,589
----------------------------------------------------------- ----- ------------ ----------
Consolidated statement of cash flows
Zinc Media Group plc consolidated statement of cash flows
For the year ended 30 June 2019
2019 2018
(unaudited) (audited)
Note GBP'000 GBP'000
--------------------------------------------------------------------- ------ ------------ ----------
Cash flows from operating activities
Loss for the year before tax (2,859) (1,811)
Adjustments for:
Depreciation 178 138
Amortisation and impairment of intangibles 1,696 1,763
Finance costs 327 253
Finance income (1) -
Share based payment charge 27 74
Loss / (gain) on remeasurement of deferred contingent consideration 138 (700)
Contingent consideration recognised as remuneration 286 487
Gain on disposal of assets - (6)
(208) 198
Decrease / (increase) in inventories 97 (125)
Increase in trade and other receivables (1,634) (1,100)
Increase / (decrease) in trade and other payables 2,275 (1,327)
----------------------------------------------------------------------------- ------------ ----------
Cash generated from / (used) in operations 530 (2,354)
Finance costs (4) (3)
Finance income 1 -
Tax paid (87) (4)
Net cash flows used in operating activities 440 (2,361)
----------------------------------------------------------------------------- ------------ ----------
Investing activities
Acquisition of subsidiary undertakings, net of cash and overdrafts - 86
Payment of contingent consideration (563) -
Purchase of property, plant and equipment (192) (65)
Proceeds of sale of property, plant and equipment - 6
Purchase of intangible assets - (122)
Net cash flows used in investing activities (755) (95)
----------------------------------------------------------------------------- ------------ ----------
Financing activities
Issue of ordinary share capital and preference shares - 3,066
Capital element of finance lease payments (4) (23)
Net cash flows from financing activities (4) 3,043
----------------------------------------------------------------------------- ------------ ----------
Net (decrease) / increase in cash and cash equivalents (319) 587
Translation differences (13) (15)
Cash and cash equivalents at beginning of year 3,545 2,973
----------------------------------------------------------------------------- ------------ ----------
Cash and cash equivalents at the end of the year 3,213 3,545
----------------------------------------------------------------------------- ------------ ----------
Consolidated statement of changes in equity
Zinc Media Group plc consolidated statement of changes in equity
For the year ended 30 June 2019
Total
equity
attributable
Share to equity
based holders
Share Share payment Merger Preference Retained of the Non-controlling Total
capital premium reserve reserve shares earnings parent interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at
1 July 2017 5,926 25,013 47 27 2,909 (30,926) 2,996 - 2,996
---------------- -------- -------- -------- -------- ----------- --------- ------------- ---------------- --------
Loss and
total
comprehensive
income for
the year - - - - (1,855) (1,855) (1,855)
Total
comprehensive
income - - - - - (1,855) (1,855) - (1,855)
Equity-settled
share-based
payments - - 74 - - - 74 - 74
Issue of
shares on
acquisition - - - 750 - - 750 - 750
Conversion
of preference
shares 1 2,277 - - (1,975) - 303 - 303
Deferred
tax on share
options - - (15) - - - (15) - (15)
Shares issued 1 3,506 - - - - 3,507 - 3,507
Expenses
of issue
of shares - (382) - - - - (382) - (382)
Total
transactions
with owners
of the Company 2 5,401 59 750 (1,975) (1,855) 2,382 - 2,382
---------------- -------- -------- -------- -------- ----------- --------- ------------- ---------------- --------
Balance at
30 June 2018 5,928 30,414 106 777 934 (32,781) 5,378 - 5,378
---------------- -------- -------- -------- -------- ----------- --------- ------------- ---------------- --------
Balance at
1 July 2018 5,928 30,414 106 777 934 (32,781) 5,378 - 5,378
---------------- -------- -------- -------- -------- ----------- --------- ------------- ---------------- --------
Change in
accounting
policies
in respect
of IFRS 15 - - - - - (193) (193) - (193)
---------------- -------- -------- -------- -------- ----------- --------- ------------- ---------------- --------
Restated
balance as
at 1 July
2018 5,928 30,414 106 777 934 (32,974) 5,185 - 5,185
---------------- -------- -------- -------- -------- ----------- --------- ------------- ---------------- --------
Loss and
total
comprehensive
income for
the year - - - - (2,740) (2,740) 8 (2,732)
Total
comprehensive
income - - - - - (2,740) (2,740) 8 (2,732)
Equity-settled
share-based
payments - - 27 - - - 27 - 27
Issue of
shares on
acquisition - 187 - - - - 187 - 187
Conversion
of preference
shares - 95 - - (95) - - - -
Total
transactions
with owners
of the Company - 282 27 - (95) (2,740) (2,526) 8 (2,518)
---------------- -------- -------- -------- -------- ----------- --------- ------------- ---------------- --------
Balance at
30 June 2019 5,928 30,696 133 777 839 (35,714) 2,659 8 2,667
---------------- -------- -------- -------- -------- ----------- --------- ------------- ---------------- --------
Notes to the preliminary financial statements for the year ended
30 June 2019
1) ACCOUNTING POLICIES
1.1) General Information
Zinc Media Group plc and its subsidiaries (the Group) is a
multi-media Group which produces high quality TV together with
communications and publishing content.
Zinc Media Group plc is the Group's ultimate parent and is a
public listed company incorporated in Scotland. The address of its
registered office is 7 Exchange Crescent, Conference Square,
Edinburgh EH3 8AN. Its shares are traded on the AIM Market of the
London Stock Exchange plc (LSE: ZIN).
1.2) Basis of Preparation
The annual financial statements of the Group have been prepared
in accordance with International Financial Reporting Standards
("IFRS") as adopted by the European Union (EU) and the Companies
Act 2006 applicable to companies reporting under IFRS. The
financial statements have been prepared under the historical cost
convention.
The preliminary consolidated financial information for the year
ended 30 June 2019 does not constitute the company's statutory
accounts as defined in Section 434 of the Companies Act 2006.The
preliminary financial information for the year ended 30 June 2019
has been prepared in accordance with the accounting policies
adopted in the preparation of the Group's annual financial
statements but does not contain all the information required to be
disclosed in the financial statements prepared in accordance with
IFRS. The Group's full financial accounts for the year ended 30
June 2019 are in the process of being audited.
Statutory accounts for 2018 have been delivered to the registrar
of companies, and those for 2019 will be delivered in due course.
The auditors have reported on the Group statutory accounts for the
year ended 30 June 2018; their report was (i) 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.
1.3) Going Concern
The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, show that the
Group should be able to operate within the level of its current
financing.
There are several factors which could materially affect the
Group's cashflows, particularly the underlying performance of the
business and uncertainty regarding the timing of receipts from
customers. The Directors' have reviewed management's forecasts and
scenarios under which cashflows may vary and believe there are
sufficient mitigating actions that can be employed to enable the
Group to operate within its current level of financing.
The Group had an outstanding balance on long term debt of
GBP3.74m at the year end, held by two of the Company's major
shareholders. The current repayment date is a bullet repayment on
31 December 2020. The Directors' are confident the Group will
receive continued support from the loan providers.
In light of the forecasts, the expectation of support from the
loan providers, along with mitigating measures available to be used
if needed, the Directors believe that the going concern basis upon
which the financial statements have been prepared is reasonable.
The Group therefore continues to adopt the going concern basis in
preparing its consolidated financial statements.
1.4) Changes in accounting policies
IFRS 15 - Revenue from Contracts with Customers
IFRS 15 "Revenue from Contracts with Customers" and the related
"Clarifications to IFRS 15 Revenue from Contracts with Customers"
(hereinafter referred to as "IFRS 15") replaced IAS 18 "Revenue",
IAS 11 "Construction Contracts" and several revenue-related
Interpretations.
IFRS 15 is effective from 1 January 2018 and the Group adopted
IFRS 15 for the first time in its full year results for the year
ended 30 June 2019. As a result, the Group has changed its
accounting policy for revenue recognition as detailed below.
In accordance with IFRS 15, the amount which is expected to be
received from customers as consideration for the transfer of goods
and services to the customer is to be recognised as revenue. In
determining the point of time or over-time criteria, it is no
longer a question of the transfer of risks and rewards but of the
transfer of control over the goods and services to the
customer.
Revenue is derived from television production, television
distribution, publishing and communications production and design.
Adoption of IFRS15 has not resulted in any changes to timing or
measurement of revenue except in regard to television distribution
advances.
When the Group has recognised revenue, but not issued an
invoice, then the entitlement to consideration is recognised as a
contract asset. The contract asset is transferred to receivables
when the entitlement to payment becomes unconditional. A contract
liability is recognised when the consideration is received in
advance of the satisfaction of the Group's performance
obligations.
TV - production revenue
Production revenue from contracts with broadcasters comprises
work carried out to produce and deliver television programmes and
broadcaster licence fees. Under IFRS 15 these are combined
performance obligations because the production and licence are
indistinct, and the licence is not the primary or dominant
component of the combined performance obligation. The Group
considers the combined performance obligation to be satisfied over
time as it does not create an asset with an alternative use at
contract inception and the Group has an enforceable right to
payment for performance completed to date.
The Group recognises revenue over time by measuring the progress
towards complete satisfaction of the performance obligation, in
line with transferring control of goods or services promised to a
customer. The Group transfers control of the programme over time,
and costs are incurred in line with performance completed. The
percentage of completion is calculated as the ratio of the contract
costs incurred up until the end of the period to the total
estimated programme cost.
TV - distribution revenue
Distribution revenue comprises sums receivable from the
exploitation of programmes in which the company owns rights and is
received as advances and royalties.
Advances are fixed sums receivable at the beginning of
exploitation that are not dependent on the sales performance of the
programme. They are no longer recognised when contracted, but are
recognised when all the following criteria have been met:
i) an agreement has been executed by both parties; and
ii) the programme has been delivered; and
iii) the licence period has begun.
Royalty revenue is dependent on the sales performance of the
programme and will continue to be recognised when receivable.
Publishing
The two types of revenue, which comprise distinct performance
obligations, are:
1. Publishing: advertising revenue is recognised on the date
publications are dispatched to customers which is when control
transfers.
2. Online: revenue is recognised at the point of delivery or
fulfilment for single/discrete services which is when control
transfers.
Communications
Communications revenue mainly comprises production and design.
The Group considers the performance obligation of each contract to
be satisfied over time as it does not create an asset with an
alternative use at contract inception and the Group has an
enforceable right to payment for performance completed to date.
Recognition of revenue will continue to be by reference to stage of
completion of the specific transaction assessed based on the actual
service provided as a proportion of the total services to be
provided.
Impact on reported numbers
The Group has opted for the modified retrospective method, which
means the cumulative effect of initially applying IFRS 15 is
recognised as an adjust-ment to the opening balance of equity at 1
July 2018. Therefore, the comparative information has not been
restated and contin-ues to be reported under IAS 18 and IAS 11.
Applying IFRS 15 has the following impact on shareholders'
equity as at 1 July 2018:
Statement of financial position as at 1
July 2018
Application
IFRS 15 of IAS 18
30 Jun 2018 IFRS 15 1 Jul 2018
GBP'000 GBP'000 GBP'000
------------------------------- ------------ ------------ -----------
Inventories 333 132 465
Trade and other receivables 5,224 - 5,224
Other assets 11,032 - 11,032
------------------------------- ------------ ------------ -----------
Total assets 16,589 132 16,721
Deferred income 388 325 713
Other liabilities 10,823 - 10,823
------------------------------- ------------ ------------ -----------
Total liabilities 11,211 325 11,536
Retained earnings (32,781) (193) (32,974)
Other equity 38,159 - 38,159
------------------------------- ------------ ------------ -----------
Total equity 5,378 (193) 5,185
------------------------------- ------------ ------------ -----------
Total liabilities and equity 16,589 132 16,721
------------------------------- ------------ ------------ -----------
In the initial year of application, the Group presents revenue
both as reported (applying IFRS 15) and adjusted (applying IAS 18
and IAS 11). The following tables summarize the impact of adopting
IFRS 15 on the Group's consolidated financial statements for the
period ending 30 June 2019.
Income statement
IFRS 15 IAS 18
Year to Year to
30 Jun 2019 30 Jun 2019 Adjustment
GBP'000 GBP'000 GBP'000
-------------------------------------------- ---------------------------- ------------- ------------
Revenue 24,633 24,413 220
Cost of sales (17,725) (17,647) (78)
-------------------------------------------- ------------- ------------- -------------
Gross profit 6,908 6,766 142
Operating expenses (6,781) (6,781) -
-------------------------------------------- ------------- ------------- -------------
Adjusted EBITDA 127 (15) 142
Depreciation & amortisation (889) (889) -
Share based payment charge (27) (27) -
Exceptional items (1,744) (1,744) -
Finance costs (327) (327) -
Finance income 1 1 -
Tax 127 127 -
-------------------------------------------- ------------- ------------- -------------
Loss for the period (2,732) (2,874) 142
-------------------------------------------- ------------- ------------- -------------
Statement of financial position as at 30
June 2019
IFRS 15 IAS 18
30 Jun 2019 30 Jun 2019 Adjustment
GBP'000 GBP'000 GBP'000
-------------------------------------------- ---------------------------- ------------- ------------
Inventories 236 314 (78)
Other assets 15,876 15,876 -
-------------------------------------------- ---------------------------- ------------- ------------
Total assets 16,112 16,190 (78)
Deferred income 1,810 2,030 (220)
Other liabilities 11,635 11,635 -
-------------------------------------------- ---------------------------- ------------- ------------
Total liabilities 13,445 13,665 (220)
Retained earnings (35,714) (35,856) 142
Other equity & non-controlling
interest 38,381 38,381 -
-------------------------------------------- ---------------------------- ------------- ------------
Total equity 2,667 2,525 142
-------------------------------------------- ---------------------------- ------------- ------------
Total liabilities and equity 16,112 16,190 (78)
-------------------------------------------- ---------------------------- ------------- ------------
2) SEGMENTAL INFORMATION
Management currently identifies the Group's three service lines
as three operating segments: TV, Publishing and Communications.
These operating segments are monitored and strategic decisions are
made on the basis of adjusted segment operating results.
Items included under 'Central and plc' relate mainly to Group
activities based in the UK.
Central and
TV Publishing Communications plc Total
-------------- ------------------ ------------------ ---------------------------- ------------------------ ---------
2019 2018 2019 2018 2019 2018 2019 2018 2019 2018
Continuing
Operations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------- -------- -------- -------- -------- -------- -------- -------- -------------- -----------
Revenue 21,230 17,598 1,858 2,132 1,463 1,864 82 89 24,633 21,683
-------------- -------- -------- -------- -------- -------- -------- -------- -------- -------------- -----------
Adjusted
EBITDA 394 26 177 298 (48) 227 (396) (60) 127 491
Depreciation (150) (120) (12) (13) (4) (4) (12) (1) (178) (138)
Amortisation (711) (573) - - - - - - (711) (573)
Share based
payment
charge - - - - - - (27) (74) (27) (74)
Exceptional
items (236) (1,362) (36) (13) (1,250) (72) (222) 183 (1,744) (1,264)
-------------- -----------
Operating
(loss)
/ profit (703) (2,029) 129 272 (1,302) 151 (657) 48 (2,533) (1,558)
-------------- -------- -------- -------- -------- -------- -------- -------- -------- -------------- -----------
Segment
Assets 13,770 12,343 1,336 1,275 543 1,765 463 1,206 16,112 16,589
-------------- -------- -------- -------- -------- -------- -------- -------- -------- -------------- -----------
Segment
Liabilities (7,063) (4,421) (706) (647) (92) (226) (5,584) (5,917) (13,445) (11,211)
-------------- -------- -------- -------- -------- -------- -------- -------- -------- -------------- -----------
Other
Segment
Items:
Expenditure
on
intangible
assets - 2,864 - - - 122 - - - 2,986
Expenditure
on
tangible
assets 147 53 - 2 - 8 45 2 192 65
The internal reporting of the Group's performance does not
require that costs and/or Statement of Financial Position
information is gathered on the basis of the geographical
streams.
The Group's principal operations are in the UK. Its revenue from
external customers in the United Kingdom was GBP19.67m (2018:
GBP20.30m), and the total revenue from external customers in other
countries was GBP4.97m (2018: GBP1.38m) highlighting our growth
this year in international markets.
Exceptional items are presented separately as, due to their
nature or the infrequency of the events giving rise to them, this
allows shareholders to understand better the elements of financial
performance for the year, to facilitate comparison with prior years
and to assess better the trends of financial performance.
2019 2018
GBP'000 GBP'000
-------------------------------------------------------------------------------- -------- --------
Impairment of carrying value of goodwill in respect of Reef Television - (1,190)
Impairment of carrying value of goodwill in respect of Zinc Communicate (985) -
Change in fair value of contingent consideration in respect of Reef Television - 700
Change in fair value of contingent consideration in respect of Tern Television (138) -
Reorganisation and restructuring costs (313) (190)
Earnout consideration treated as remuneration (286) (487)
Other exceptional items (22) (97)
Total (1,744) (1,264)
-------------------------------------------------------------------------------- -------- --------
Reorganisation and restructuring costs
Zinc Communicate was restructured towards the end of the
financial year due to its contract with Transport for London not
being renewed. The Publishing and Television divisions were
reorganised during the year to streamline their management
structures. The non-recurring element of the costs has been
presented as exceptional to enable a more refined evaluation of
financial performance.
Zinc Communicate impairment
Following Zinc Communicate's disappointing trading and
restructure of the business, the Board undertook a detailed
impairment review and, despite being optimistic that Zinc
Communicate will return to profitability, they have taken a view
that the substantial repositioning of the business necessitates a
write off to GBPnil of the carrying value of the goodwill
pertaining to Zinc Communicate.
Tern Television contingent consideration: change in fair value
and treatment as remuneration
In relation to the acquisition of Tern Television Productions in
November 2017, the Directors note that where selling shareholders
are also post-acquisition employees and contingent consideration is
conditional on continuing employment during the earnout period,
contingent consideration is treated as remuneration for the
purposes of post-acquisition accounting under IFRS 3 and is
expensed to the income statement over the earn out period.
The minimum earnout targets are likely to be exceeded, resulting
in a potential overachievement amount to be paid of GBP0.27m, of
which GBP0.14m has been booked as a change in fair value of
contingent consideration in the year ended 30 June 2019 and
GBP0.13m is recognised as remuneration. Of the GBP0.13m recognised
as remuneration, GBP0.08m has been expensed to the income statement
in the year ended 30 June 2019 and GBP0.05m will be recognised in
the year ending 30 June 2020.
A total of GBP0.29m has been expensed to the income statement in
the second year of acquisition in relation to earn out
consideration linked to remuneration. As this is a non-operational
expense item, it has been presented as exceptional for the purposes
of an accurate evaluation of financial performance for the
year.
4) TERN TELEVISION DEFERRED CONSIDERATION AND PREFERENCE SHARE
CONVERSION
Issue of Consideration Shares
Following a strong trading performance by Tern Television in the
period since acquisition in November 2017, the first-year earnings
target was achieved. The first year earnout payment of GBP0.75m,
payable to the vendors of Tern Television, was satisfied partially
in cash and partially in new Zinc Media Group shares. GBP0.56m was
paid in cash and GBP0.19m was settled through the issue of
39,473,685 new ordinary shares at a price of 0.475p per share.
Preference share conversion
In November 2018, the Company converted GBP0.95m of preference
shares into 20,053,469 new ordinary shares at 0.475p.
5) EARNINGS PER SHARE
Basic earnings per share (EPS) for the year equals the loss
after tax from continuing operations attributable to the Company's
ordinary shareholders of GBP2.74 million (2018: loss of GBP1.86
million) divided by the weighted average number of issued ordinary
shares of 1,399,591,089 (2018: 1,086,267,290).
When the Group makes a profit from continuing operations,
diluted EPS equals the profit attributable to the Company's
ordinary shareholders divided by the diluted weighted average
number of issued ordinary shares. When the Group makes a loss from
continuing operations, diluted EPS equals the loss attributable to
the Company's ordinary shareholders divided by the basic
(undiluted) weighted average number of issued ordinary shares. This
ensures that EPS on losses is shown in full and not diluted by
unexercised share options or awards.
2019 2018
Number of Shares Number of Shares
Weighted average number of shares
used in basic and diluted
earnings per share calculation 1,399,591,089 1,086,267,290
Potentially dilutive effect
of share options 2,014,248 1,999,431
------------------------------------------ ----------------- -----------------
GBP'000 GBP'000
Loss for the year from continuing
operations attributable to shareholders (2,740) (1,855)
------------------------------------------ ----------------- -----------------
Continuing operations
Basic loss per share (0.20)p (0.17)p
Diluted loss per share (0.20)p (0.17)p
6) INTANGIBLE ASSETS
Customer Multimedia Products Distribution
Goodwill Brands Relationships & Websites Catalogue Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Cost
At 1 July 2017 27,950 4,318 2,621 - - 34,889
Additions 1,444 179 798 122 443 2,986
--------------------- --------- -------- -------------- -------------------- ------------- ---------
At 30 June 2018 29,394 4,497 3,419 122 443 37,875
At 30 June 2019 29,394 4,497 3,419 122 443 37,875
--------------------- --------- -------- -------------- -------------------- ------------- ---------
Amortisation
At 1 July 2017 (24,164) (3,958) (858) - - (28,980)
Charge for the year - (88) (426) - (59) (573)
Impairment charge (1,190) - - - - (1,190)
At 30 June 2018 (25,354) (4,046) (1,284) - (59) (30,743)
--------------------- --------- -------- -------------- -------------------- ------------- ---------
Charge for the year - (97) (464) (61) (89) (711)
Impairment charge (985) - - - - (985)
At 30 June 2019 (26,339) (4,143) (1,748) (61) (148) (32,439)
--------------------- --------- -------- -------------- -------------------- ------------- ---------
Net Book Value
At 30 June 2019 3,055 354 1,671 61 295 5,436
--------------------- --------- -------- -------------- -------------------- ------------- ---------
At 30 June 2018 4,040 451 2,135 122 384 7,132
--------------------- --------- -------- -------------- -------------------- ------------- ---------
Goodwill
Goodwill arising on acquisitions is attributable to operational
synergies and earnings potential expected to be realised over the
longer term.
Distribution Catalogue
The distribution catalogue intangible asset arose on the
acquisition of Tern Television.
Brands and Customer Relationships
Brand and customer relationships relate to the intangible assets
arising on the acquisitions of Reef Television and Tern
Television.
Multimedia Products and Websites
Multimedia products and websites relate to the development of
applications and websites within the Communications Division, which
will be amortised on the completion of the product.
Impairment Tests for Goodwill
The carrying amount of goodwill by cash generating unit ("CGU")
is:
2019 2018
GBP'000 GBP'000
------------------------------------ -------- --------
TV CGU (TV operating segment) 1,611 1,611
Tern TV CGU (TV operating segment) 1,444 1,444
Communications - 985
Total 3,055 4,040
------------------------------------ -------- --------
Goodwill is not amortised but tested annually for impairment
with the recoverable amount being determined from value in use
calculations. The key assumptions for the value in use calculations
are those regarding the discount rate, growth rates and forecasts
in income and costs.
The Group assessed whether the carrying value of goodwill was
supported by the discounted cash flow forecasts of cash generating
units based on financial forecasts approved by management.
An impairment charge of GBP0.99m was made during the year in
respect of the carrying value of goodwill relating to the
Communications CGU.
7) TRADE AND OTHER RECEIVABLES
2019 2018
GBP'000 GBP'000
------------------------------- -------- --------
Current
Trade receivables 3,631 2,508
Less provision for impairment (129) (102)
------------------------------- -------- --------
Net trade receivables 3,502 2,406
Other receivables 136 159
Prepayments 891 756
Accrued income 2,329 1,903
------------------------------- -------- --------
Total 6,858 5,224
------------------------------- -------- --------
8) TRADE AND OTHER PAYABLES
2018 2017
GBP'000 GBP'000
--------------------------------- -------- --------
Current
Trade payables 1,997 2,048
Other payables 83 95
Other taxes and social security 1,010 694
Accruals 3,523 2,704
Deferred income 1,810 388
Total 8,423 5,929
--------------------------------- -------- --------
9) NON-CURRENT LIABILITIES
An analysis of the amounts presented as non-current liabilities
in these financial statements is given below:
2019 2018
GBP'000 GBP'000
-------------------------- -------- --------
Borrowings 3,743 3,548
Contingent consideration 595 583
Deferred tax 128 300
Total 4,466 4,431
-------------------------- -------- --------
The borrowings are repayable on 31 December 2020. Other
non-current liabilities relate to the deferred contingent
consideration payable to the Tern Television former
shareholders.
10) SHARE CAPITAL
2019 2018
Number of Share Share Merger Number of Share Share Merger
Shares Capital Premium Reserve Shares Capital Premium Reserve
Ordinary
shares GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
At start of
year 1,359,586,281 3.4 30,414 777 619,775,478 1.5 25,013 27
Share placing
and
subscription
for cash - - - - 389,603,280 0.97 3,505 -
Consideration
paid in
shares 39,473,685 0.09 187 - 93,750,000 0.23 - 750
Shares issued
in lieu of
fees - - - - 3,333,333 0.01 30 -
Expenses of
issue of
shares - - - - - - (412) -
Shares issued
in preference
share
dividend
conversion - - - - 33,708,222 0.08 304 -
Shares issued
in preference
share
conversion 20,053,469 0.05 95 - 219,415,968 0.55 1,974 -
At end of year 1,419,113,435 3.5 30,696 777 1,359,586,281 3.4 30,414 777
--------------- -------------- --------- --------- --------- -------------- --------- --------- --------------
In November 2018, the Company issued 39,473,685 new ordinary
shares at 0.475p per share as part of the consideration for the
acquisition of Tern Television, to the Tern Television selling
shareholders. The difference between the nominal value of the
shares issued and the issue price gives rise to a premium of
GBP0.19m, which has been added to the share premium reserve.
In November 2018, the Company converted GBP0.95m of preference
shares into 20,053,469 new ordinary shares at 0.475p. Herald
Investment Trust plc and the John Booth Charitable Foundation, the
holders of the Company's preference shares, converted such number
of preference shares and accrued dividends on the preference shares
into ordinary shares such that the combined current holding of
ordinary shares of approximately 38 per cent of the issued ordinary
share capital in the Company was maintained.
Below is a description of the nature and purpose of the
individual reserves:
-- Share capital represents the nominal value of shares issued;
-- Share premium includes the amounts over the nominal value in
respect of share issues. In addition, costs in respect of share
issues are debited to this account;
-- Merger reserve is used where more than 90 per cent of the
shares in a subsidiary are acquired and the consideration includes
the issue of new shares by the Company, thereby attracting merger
relief under the Companies Act 1985 and, from 1 October 2009, the
Companies Act 2006;
-- Share based payment reserve arises on recognition of the
share based payment charge in accordance with IFRS2 'Share Based
Payment Transactions';
-- Retained earnings include the realised gains and losses made by the Group; and
-- Preference shares represents the value of preference shares issued.
11) AVAILABILITY OF REPORT AND ACCOUNTS
The Company's annual report and accounts for the year ended 30
June 2019 will be posted to those shareholders who still receive
printed copies in due course and a soft copy will be available to
download from the Company's website at www.zincmedia.com at the
same time.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR SEUFWWFUSEEU
(END) Dow Jones Newswires
September 30, 2019 02:01 ET (06:01 GMT)
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