RNS Number:3078R
Electric Word PLC
21 September 2000
The issuer has made the following amendment to the 'Interim Results'
announcement released today at 07:00 under RNS No 2859R.
In the Group Profit and Loss Account, the earnings per share should read
(0.0459)p and (0.1999)p for the 6 months ending 31 May 2000 (unaudited) and 6
months ending 31 May 1999 (unaudited) respectively, and not (4.59)p and (19.99)p
as originally shown.
All other details remain unchanged.
The full corrected version is shown below.
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HIGHLIGHTS
* Turnover up 53%
* Turnover on continuing operations up 43.5%
* 98% of turnover from high-quality subscription revenue
* Two acquisitions since May
Chairman Nigel Wray, commented,
"The board has been delighted both by the integration of the new
acquisitions and the excellent performance of the continuing business.
It has been a very encouraging start for the Group and we look to the
Future with confidence."
For further information please contact:-
Julian Turner, Electric Word 020 7251 9035
Takki Sulaiman, Hansard Communications 020 7735 9415
Jonathan Wright, Seymour Pierce 020 7648 8700
CHAIRMAN'S INTERIM STATEMENT
Electric Word plc was successfully launched on the AIM at the end of March
this year. I am pleased to report that since then the management has made
good progress in implementing the plans outlined at that time and the
business has grown in line with expectations.
Existing business
Turnover in the existing Peak Performance business, publishing newsletters in
sports science and health, has grown by 43.5% against the same period in the
previous year. All of this growth has been in high-quality, renewable
subscription revenues, which accounts for 97.8% of turnover. In line with our
long-standing policy, customers are encouraged to pay by direct debit or
continuous credit card, which further improves the quality of earnings.
Acquisitions
In our prospectus, Electric Word set out its intention to pursue relevant
acquisitions. We believe that we can create value through acquisitions in a
number of ways:
* Adding Electric Word's publishing and marketing expertise to newsletter
businesses with valuable content
* Consolidating a number of newsletters to share overheads
* Creating cross-selling opportunities
Optimus
I am delighted to report that our first acquisition was completed within a
few weeks of listing. Optimus Publishing Ltd joined the Group in May 2000
(further details of this acquisition can be found on our web-site at
www.electricwordplc.com). Optimus specializes in the fast-changing field of
education management and published four newsletter titles when acquired. Both
principals joined Electric Word and one, Ed Tranham, was appointed to the
Group board at the same time. These interim results include just one month of
trading with Optimus.
Lottery Monitor
At the end of July Electric Word made its second acquisition, acquiring
Lottery Monitor Ltd, the owner of two newsletter titles (Lottery Monitor and
Lottery Cash for Schools) and a thriving conference business, all focusing on
the distribution of funds from the UK National Lottery. The Government's
recent announcement that neither Camelot nor The People's Lottery are yet
ready to be awarded the licence to operate the Lottery for the next seven
years was made within a fortnight of the acquisition and created a storm of
media interest. During the course of over 40 radio, tv and press interviews
given by the Lottery Monitor editorial team it became clear just how well
Lottery Monitor has established itself as the authoritative voice of 'good
causes' funding on Lottery issues. In addition, there are clear marketing
opportunities for Cash for Schools within the Optimus business. Further
details of the Lottery Monitor acquisition can be found on
www.electricwordplc.com.
In general, your board has been encouraged by the number and range of
possible deals that have arisen since April. Discussions continue with other
possible acquisitions to see if there is value in bringing any of them into
the Group.
Trading activity since the end of May
Activity so far in the second half has been encouraging, with two new titles
successfully launched: Education Law Update under the Optimus brand and
Sports Injury Bulletin from the Peak Performance division. These titles bring
the total up to ten.
The autumn will see further new launches and tests on a number of potential
future products.
Subscription-based publishing is a highly cash-generative business once
titles have become established. Naturally, new launches tend to consume cash
for the initial period of their lives, as the marketing costs of acquiring
new subscribers are high and the quality of content always needs to be
excellent. It follows that during the period in which Electric Word has a
high proportion of new titles we will not expect the business as a whole to
be cash positive. However, when subscribers renew their subscriptions the
marginal profit is very good as the cost of servicing an individual
subscription is relatively low.
The board has been delighted both by the integration of the new acquisitions
and the excellent performance of the continuing business. It has been a very
encouraging start for the Group and we look to the future with confidence.
Nigel Wray, Chairman
Julian Turner, Chief Executive
ElectricWord Plc
GROUP PROFIT AND LOSS ACCOUNT
for the period ending 31 May 2000
Continuing Total
Acquisitions operations 6 months 6 months
6 months 6 months ending ending
ending ending 31 May 2000 31 May 1999
31 May 2000 31 May 2000 (unaudited) (unaudited)
(unaudited) (unaudited) # #
# #
TURNOVER 16,115 243,973 260,088 169,968
Cost of sales (10,008) (155,670) (165,678) (154,107)
Gross profit 6,107 88,303 94,410 15,861
Other (18,699) (107,317) (126,016) (80,112)
operating
expenses (net)
OPERATING LOSS (12,592) (19,014) (31,606) (64,251)
Interest 7,408 -
receivable
RETAINED LOSS (24,198) (64,251)
FOR THE YEAR
Earnings per (0.0459)p (0.1999)p
ordinary share
ElectricWord Plc
GROUP BALANCE SHEET
at 31 May 2000
31 May 2000 31 May 1999
(unaudited) (unaudited)
# #
FIXED ASSETS
Intangible assets 292,693 37,500
Tangible assets 27,003 2,649
319,696 40,149
CURRENT ASSETS
Stocks 9,200 6,716
Debtors 25,225 64,382
Cash at bank and in hand 1,332,085 23,352
1,366,510 94,450
CREDITORS: Amounts falling due within one year (509,531) (178,221)
NET CURRENT ASSETS/(LIABILITIES) 856,979 (83,771)
TOTAL ASSETS LESS CURRENT LIABILITIES 1,176,675 (43,622)
CREDITORS: Amounts falling due after more - (10,976)
than one year
NET ASSETS/(LIABILITIES) 1,176,675 (54,598)
CAPITAL AND RESERVES
Called up share capital 621,429 321,429
Share premium account 986,705 -
Merger reserve (96,227) (96,227)
Profit and loss account (335,232) (279,800)
SHAREHOLDERS' FUNDS 1,176,675 (54,598)
Approved by the board on 20TH September 2000
Director
ElectricWord Plc
CASH FLOW STATEMENT
for the period ending 31 May 2000
6 months 6 months
ending ending
31 May 2000 31 May 1999
(unaudited) (unaudited)
# #
Cash outflow from operating activities (74,355) (24,317)
Returns on investments and servicing of 7,408 -
finance
Capital expenditure and servicing of finance (21,766) (2,836)
(88,713) (27,153)
Acquisitions and disposals 38,323 -
CASH OUTFLOW BEFORE FINANCING (50,390) (27,153)
Financing 1,286,705 -
INCREASE/(DECREASE) IN CASH IN THE PERIOD 1,236,315 (27,153)
ElectricWord Plc
NOTES TO THE INTERIM REPORT
for the period ending 31 May 2000
PRESENTATION OF INTERIM ACCOUNTS
This interim report was approved by the Directors on 20th September 2000. The
results and the balance sheet for both the current and the comparative half
year have not been audited, but were the subject of an independent review
carried out by the company's auditors, Baker Tilly. Their review confirmed
that the figures were prepared using accounting policies and practices
consistent with those adopted in the 1999 annual report. The financial
information contained in this interim report does not constitute statutory
accounts as defined by Section 240 of the Companies Act 1985. All
shareholders will receive a copy of this interim statement, which is also
available from the company's registered office at 67-71 Goswell Road, London
EC1V 7EP.
TAXATION
No taxation has been provided due to losses in the period.
DIVIDENDS
The directors do not recommend the payment of a dividend.
EARNINGS PER SHARE
Earnings per share for the period ended 31 May 2000 and the comparatives have
been calculated using the weighted average number of shares in issue.
31 May 2000 52,526,400
31 May 1999 32,142,900
RECONCILIATION OF NET CASHFLOW TO MOVEMENT 6 months 6 months
IN NET FUNDS ending ending
31 May 31 May
2000 1999
# #
Increase/(decrease) in cash in the period 1,236,315 (27,153)
Net funds at beginning of period 51,049 78,202
Net funds at end of period 1,287,364 51,049
RECONCILIATION OF NET CASHFLOW At 30
TO MOVEMENT IN NET FUNDS November At 30
1999 Cashflow May 2000
# # #
Cash in hand, at bank 51,049 1,281,036 1,332,085
Overdrafts - (44,721) (44,721)
51,049 1,236,315 1,287,364
RECONCILIATION OF NET CASHFLOW TO MOVEMENT IN NET FUNDS
Share Share Merger Profit
capital premium reserve and loss Total
# # # # #
At 30 321,429 - (96,227) (311,034) (85,832)
November 1999
Issue of 300,000 1,200,000 - - 1,500,000
share capital
Flotation - (213,295) - - (213,295)
costs
Loss
attributable - - - (24,198) (24,198)
to
shareholders
621,429 986,705 (96,227) (335,232) 1,176,675
INDEPENDENT REVIEW REPORT TO ELECTRICWORD PLC
Introduction
We have been instructed by the company to review the financial information
set out on pages 2 to 6 and we have read the other information contained in
the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.
Directors' Responsibilities
The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The Listing
Rules of the London Stock Exchange require that the accounting policies and
presentation applied to the interim figures should be consistent with those
applied in preparing the preceding annual accounts except where any changes,
and the reasons for them, are disclosed.
Review Work Performed
We conducted our review in accordance with guidance contained in Bulletin
1999/4 issued by the Auditing Practices Board. A review consists principally
of making enquiries of group management and applying analytical procedures to
the financial information and underlying financial data and based thereon,
assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities
and transactions. It is substantially less in scope than an audit performed
in accordance with Auditing Standards and therefore provides a lower level of
assurance than an audit. Accordingly we do not express an audit opinion on
the financial information.
Review Conclusion
On the basis of our review we are not aware of any material modifications
that should be made to the financial information as presented for the 6
months ended 31 May 2000.
Baker Tilly
Registered Auditor
Chartered Accountants
2 Bloomsbury Street
London WC1B 3ST
Electric Word (LSE:ELE)
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