TIDMCXM
RNS Number : 2422P
Conexion Media Group PLC
30 September 2011
CONEXION MEDIA GROUP PLC
Interim Results for the six months ended 30th June 2011
Chairman's Statement
This document will shortly be available on the company's website
(www.conexion-media.com)
In line with our expectations, we have seen a challenging first
half of 2011 as our traditional music publishing revenues are
showing a downward trend when compared with the same period of
2010, at GBP1.07m. Gross profit is 18% down over the same period at
GBP524k. It is fair to point out that we signed many new deals last
year that will not generate revenues until the second half of 2011.
In terms of our performance it is noted that many of our new
sources of revenue are distributed toward the end of each year and
we expect an improved position for the full year.
Secondary rights are a major emerging sector and opportunity for
Conexion, and we are focused on exploiting this area alongside our
traditional music administration business.
Whilst cash operating costs were down over the period, our total
operating costs were 5% up on the first half of 2010 at GBP799k.
Operating costs in the first half of 2010 were reduced by GBP159k,
as a result of an adjustment for negative goodwill arising on the
acquisition of the assets of Kid Gloves Music Group. In addition
the first half of 2011 included a non-cash charge of GBP54k on
translation of trading balances with our overseas subsidiaries, as
a result of movements in exchange rates.
Our operating loss before amortisation and depreciation is
GBP275k (June 2010-GBP125k) and our total loss for the period is
GBP577k (June 2010-402k).
The board is pleased and satisfied that management's long term
strategy to expand the secondary rights administration activity
alongside its music publishing business appears to be bearing
fruit. Secondary rights management is a growth area and new
contracts signed already this year have included MRG Entertainment,
Janson Media and Epitome Pictures. However, the nature of these
rights is that the revenue takes longer to materialise due to the
more intensive administration process.
Guy Fletcher
30th September 2011
For further information please contact:
Conexion Media
Justin Sherry, CEO,justin@conexion-media.com 0208 987 4150
FinnCap
Corporate Finance
Matthew Robinson/Rose Herbert 0207 600 1658
Corporate Broking
Stephen Norcross 020 7600 1658
Consolidated Income Statement
For the six months ended 30th June 2011
Year to
Jan-June December
Jan-June 2011 2010 2010
unaudited unaudited audited
GBP GBP GBP
Revenue 1,065,640 1,437,598 3,090,182
Direct costs (542,078) (801,614) (1,523,005)
Gross Profit 523,562 635,984 1,567,177
Operating costs (799,050) (761,259) (1,604,036)
Operating loss before amortisation
and depreciation (275,488) (125,275) (36,859)
Amortisation and depreciation (268,236) (240,955) (497,073)
Operating loss (543,724) (366,230) (533,932)
Finance income 42 118 176
Finance costs (33,766) (35,691) (76,503)
Loss before taxation (577,448) (401,803) (610,259)
Taxation - - -
Loss for the period (577,448) (401,803) (610,259)
Attributable to:
Non-controlling interests (23,719) 4,102 (26,133)
Owners of the parent company (553,729) (405,905) (584,126)
Earnings/(loss) per share -
continuing operations
Basic earnings per share (pence) (0.71) (0.55) (0.75)
Diluted earnings per share (pence) (0.71) (0.55) (0.75)
Consolidated Statement of Comprehensive Income
For the six months ended 30th June 2011
Year to
Jan-June Jan-June December
2011 2010 2010
unaudited unaudited audited
GBP GBP GBP
(Loss) for financial year (577,448) (401,803) (610,259)
Currency translation differences 49,198 (128,806) (95,675)
Total Comprehensive Income (528,250) (530,609) (705,934)
Attributable to:
Non-controlling interests (23,719) 4,102 (26,133)
Owners of the parent company (504,531) (534,711) (679,801)
Total Comprehensive Income (528,250) (530,609) (705,934)
Consolidated Statement of Financial Position
As at 30th June 2011
As at As at As at
30(th) June 30(th) June 31(st) December
2011 2010 2010
unaudited
unaudited (restated) audited
GBP GBP GBP
Non-current assets
Intangible assets
Goodwill 1,370,520 1,370,520 1,370,520
Other 3,582,644 4,134,617 3,879,350
Property, plant and
equipment 7,660 47,295 14,249
Trade and other receivables 23,645 23,983 23,701
4,984,469 5,576,415 5,287,820
Current assets
Trade and other receivables 1,208,923 1,569,086 1,218,061
Cash and short term deposits 76,893 205,357 464,871
1,285,816 1,774,443 1,682,932
Current liabilities
Trade and other payables (5,846,915) (6,021,766) (5,958,302)
Amounts due to related
parties (975,000) (1,100,875) (1,028,875)
Bank overdraft and loans (142,778) (180,200) (161,734)
Current tax liabilities - - -
(6,964,693) (7,302,841) (7,148,911)
Net current liabilities (5,678,877) (5,528,398) (5,465,979)
Total assets less current
liabilities (694,408) 48,017 (178,159)
Non-current liabilities
Amounts due to related
parties - - -
Net assets (694,408) 48,017 (178,159)
Equity
Called up share capital 783,926 783,926 783,926
Share premium account 8,356,254 8,356,254 8,356,254
Other reserves 2,654 2,654 2,654
Shares to be issued 507,392 681,609 495,392
Retained earnings (10,626,339) (10,112,083) (10,121,807)
Equity share owners' funds (976,113) (287,640) (483,581)
Non-controlling interest 281,705 335,657 305,422
Total equity (694,408) 48,017 (178,159)
Consolidated Statement of Cash Flows
For the six months ended 30th June 2011
Year to
Jan-June Jan-June December
2011 2010 2010
unaudited
Unaudited (restated) audited
Note GBP GBP GBP
Operating cash flow 1 (312,144) (206,986) 158,746
Net finance costs (33,724) (35,573) (76,327)
Net cash inflow from operating
activities (345,868) (242,559) 82,419
Investing activities
Purchase of subsidiary
undertakings - (150,603) (150,603)
Purchase of property, plant and
equipment (1,781) (6,630) (3,216)
Purchase of intangible assets - (12,839) (16,139)
Net cash flow from investing
activities (1,781) (170,072) (169,958)
Financing activities
Increase/(decrease) in bank loan
and overdraft (18,956) 180,200 161,734
Repayment of loans (53,875) (72,000) (144,000)
Net cash (outflow)/inflow from
financing (72,831) 108,200 17,734
Foreign exchange differences 32,502 (41,408) (16,520)
(Decrease)/Increase in cash and
cash equivalents (387,978) (345,839) (86,325)
Cash and cash equivalents at
start of period 464,871 551,196 551,196
Cash and cash equivalents at end
of period 76,893 205,357 464,871
Notes to the Consolidated Cash Flow Statement
For the six months ended 30th June 2011
Reconciliation of profit before Jan-June Year to
finance costs income and taxation Jan-June 2010 December
1. to operating cash flow 2011 (restated) 2010
GBP GBP GBP
Loss before finance costs and taxation (543,724) (366,230) (533,932)
Goodwill write back - (159,152) (159,152)
Depreciation 8,370 34,952 63,221
Amortisation of intangible assets 259,866 206,003 433,852
(Increase)/decrease in trade and other
receivables - non-current 56 5,167 5,449
(Increase)/decrease in trade and other
receivables - current 9,138 (110,354) 240,671
Increase/(decrease) in trade and other
payables (111,387) 191,249 127,786
Share options charge 12,000 70,000 19,149
Exchange difference 53,537 (78,621) (38,298)
Operating cash flow (312,144) (206,986) 158,746
Jan-June Year to
Reconciliation of net cash flow Jan-June 2010 December
2. to movement in net debt 2011 (restated) 2010
GBP GBP GBP
Increase/(decrease) in cash in the
period (387,978) (345,839) (86,325)
Cash inflow from increase in debt 72,831 (108,200) (17,734)
Movement in net debt in the period (315,147) (454,039) (104,059)
Net debt at 1(st) January 2011 (725,738) (621,679) (621,679)
Net debt at 30th June 2011 (1,040,885) (1,075,718) (725,738)
3. Analysis of changes in net debt
At 1(st) At 30(th)
January June
2011 Cash flow 2011
GBP GBP GBP
Cash at bank and in hand 464,871 (387,978) 76,893
Bank loan and overdrafts (161,734) 18,956 (142,778)
Loans (1,028,875) 53,875 (975,000)
Total (725,738) (315,147) (1,040,885)
At 30(th)
At 1(st) January June
2010 Cash flow 2010
GBP GBP GBP
Cash at bank and in hand 551,196 (345,839) 205,357
Bank loan and overdrafts - (180,200) (180,200)
Loans (1,172,875) 72,000 (1,100,875)
Total (621,679) (454,039) (1,075,718)
NOTES
1. Accounting Policies
Basis of preparation
The Financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) adopted by the
European Union. These statements do not constitute a set of
statutory financial statements within the meaning of the Companies
Act 2006.
The financial statements have been prepared on the historical
cost basis and in accordance with the accounting policies set out
in the audited statutory financial statements for the year ended 31
December 2010.
Going concern
The Directors have prepared cash flow forecasts to 30(th)
September 2012 and believe that the Group will be able to meet its
working capital requirements. Music Publishing companies have
regular sources of income, as collection societies distribute
revenues on the same dates each year. There are monthly and
quarterly distributions. In addition, the Group has overseas
partners known as sub-publishers, from whom the
Group receives royalties quarterly and semi-annually depending
on the contract. Music publishing companies only incur a cost of
sales after the royalties have been received. The Group accounts
for royalty income on an accruals basis, and therefore provides for
the related royalty payable. The total royalties payable includes a
significant amount relating to the royalty payable on the royalty
income which has not been received at the balance sheet date, and
the royalty due will therefore not be payable until some time after
the balance sheet date.
Accounting Estimates and Judgements
The Group makes estimates and judgements concerning the future
and the resulting estimates may, by definition, vary from the
actual results. The Directors considered the critical accounting
estimates and judgements used in the financial statements and
concluded that the main areas of judgement are:
-- Revenue recognition policies in respect of contracts which
straddle the period end;
-- Contingent deferred payments in respect of acquisitions;
-- Recognition and quantification of share based payments;
and
-- Valuation of intangible assets.
These estimates are based on historical experience and various
other assumptions that management and the Board of Directors
believe are reasonable under the circumstance.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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