RNS Number:3880S
Electric Word PLC
06 March 2007
6 March 2007
ELECTRIC WORD PLC
PRELIMINARY RESULTS
FOR THE YEAR ENDED 30 NOVEMBER 2006
Acquisitions, organic growth and margin
improvements double profits
*Adjusted profit* before tax improves to #920k (#451k)
*Operating margin pre-goodwill up from 7% to 9%
*Adjusted earnings per share* up 77% to 0.66p (0.37p). Basic up 103%
*33% of profit growth organic, 67% from acquisitions
*Turnover increases 72% to #10.7m (#6.2m)
*45% of Group revenue from renewable subscriptions
*134% growth in online and e-marketing revenues
*Strong balance sheet supported by cashflow
*Five acquisitions since December 2005, integrating well
*Current year started well, with trading in line with Board's expectations
* excluding goodwill, tax and minority interest
Julian Turner, Chief Executive commented:
"The strong profit improvement achieved in the year has been driven by
successful acquisitions, continued organic growth and an improvement in
operating margins. We have continued to invest in both existing and acquired
assets to drive future profits. The new competencies we have acquired this year
and evolving online opportunities will enable us to continue to diversify our
revenues and make the most of our valuable niches in the public and sport
sectors, both of which are supported by continuing government initiatives.
"We expect this year will benefit from the full impact of our acquisitions in
2006, underlying organic growth and increasing internal efficiencies. The
current year has started well and in line with the Board's expectations. With a
strong balance sheet and an established infrastructure the Group is primed to
make further acquisitions should the right opportunities arise"
ENDS
Enquiries:
Julian Turner, Chief Executive
Electric Word 0207 954 3470
Tim Spratt / Darrel Connell
Financial Dynamics 0207 831 3113
Extracts from Chairman's and Chief Executive's Reports
INTRODUCTION
When Electric Word started seven years ago we had a vision of creating a
business with a broad range of publishing and marketing skills to make the most
of the opportunities in some very specialist, niche media markets. 2006 has
perhaps been the year in which the Company has the made the greatest progress
towards that goal. We have increased the scale of the business, its
profitability and its breadth, adding to both our market sectors and our revenue
types.
Five acquisitions since December 2005 have played an important part in this
growth (four of them in the period covered by these accounts). Two of these
acquisitions, SportBusiness Group and Incentive Plus, had particular strategic
significance in that they added new skills and new types of revenue to the
business. In addition to acquisitions the Group has continued to achieve good
organic growth. In particular we have taken steps to scale up the e-marketing
and e-publishing competencies nurtured over several years in the sports
performance business.
The Group's cashflows, strong balance sheet and established infrastructure
ensure that we are primed for further acquisitions should the opportunity arise.
RESULTS
Turnover in the year grew by 72% to #10.7m, driven by both acquisitions and the
continued organic development of the business. Whilst renewable subscriptions
are the biggest single revenue stream, accounting for 45% of sales in 2006,
increasingly the Company has been able to diversify and add revenues from
selling access to our customer base, notably from commerce and e-commerce
(selling third-party products into our communities of information customers). In
2006, commerce revenues represented 11% of the total, reflecting a part-year
contribution from the Incentive Plus acquisition in May.
Revenue growth was once again successfully converted into increased profits, as
profit before tax, goodwill and minority interest increased 104% to #920k, with
operating margins before goodwill and minority interest increasing from 7% to
9%. Organic growth contributed 33% of our profit improvement, while acquisitions
provided the remaining 67%. Earnings per share (pre-tax and goodwill) rose 77%
to 0.66p from 0.37p, while basic EPS increased 75% to 0.21p, boosted by the
part-recognition of a tax asset in SportBusiness Group.
Financial Summary
#000 2006 2005 Change
Turnover 10,712 6,234 +72%
Gross Profit 4,919 2,623 +88%
EBITDA 1,060 464 +128%
Profit before tax,goodwill and MI 920 451 +104%
Profit after tax (before minority) 288 114 +153%
Operating cash flow 595 290 +105%
Cash balance 1,475 881 +67%
The cash-generating characteristics of the subscriptions base of the business
has enabled the Group to invest in developing additional publishing formats and
revenue streams to leverage the niche customer databases that we have developed.
This has enabled us to fund the development of book and commerce revenues,
improve margins and make a significant online investment.
OPERATIONAL PERFORMANCE
Public Sector
#000 2006 2005 Change
Turnover 6,580 4,955 +33%
Operating profit before goodwill 776 724 +7%
Profit margin 11.8% 14.6% -19%
Electric Word's public sector activities extend across education, health and
local authorities but by far the biggest element is for middle and senior
managers in primary and secondary schools. The Company publishes 28 subscription
newsletters or loose-leaf files on different areas of management or compliance
responsibility such as continuing professional development, special educational
needs provision and finance. The subscription titles are complemented by events,
books and other training or professional education products.
The market for management information and professional development resources
continues to develop and evolve, driven by the high political profile of the
education system and a continuous process of government reform. Middle and
senior managers in schools have acquired a wide range of non-teaching
responsibilities, requiring them to develop new skills and maintain awareness of
many different compliance responsibilities. Our products help them to learn from
other schools' practical experiences of similar challenges and to develop their
professional expertise in key strategic areas of school management, ethos and
teaching and learning.
The education business was further enhanced by the #2m acquisition in April 2006
of Incentive Plus, which sells 1,400 different resources around behaviour,
violence prevention and emotional development, and the acquisitions in December
2005 of Teaching Expertise magazine and in May 2006 of Chris Kington Publishing
(CKP).
Turnover grew 33% to #6.6m but both Incentive Plus and Teaching Expertise had
the effect of reducing the sector margin in 2006. Incentive Plus added revenues
of #1.2m but its seasonally strongest quarter preceded the acquisition. In
addition, the investment in test-marketing in the Autumn was increased to
accelerate growth in 2007. This reduced expected profits for the year by #45k
and, along with the seasonal pattern, reduced margins for Incentive Plus to 5.7%
in the period.
Teaching Expertise was acquired for a nominal sum as a magazine aimed at a broad
teaching audience that encompassed many of the sub-groups targeted by Electric
Word's newsletters and other specialist products. Over 2006 the business has
been reshaped and moved online. Following a significant investment the schools
portal www.teachingexpertise.com was launched on November 30th 2006 as a
strategically important new channel for the education business. CKP, acquired in
May 2006 for an initial consideration of #138k, is a leading publisher of
teacher resources in the growing field of thinking skills and was
earnings-enhancing in 2006.
Margins in the existing education business were steady at 14.3% (14.6%). Organic
sales growth came mainly from sales of specialist education management books
(for the second successive year sales of one-off products grew by over 30%) with
margin improvements in education events, books and newsletters, driven by better
leverage of overhead costs as the business expands and, in the events business
in particular, higher gross profits in the key annually repeating conferences.
Perhaps the most significant development outside of the acquisitions was the
development in 2006 of a significant new channel in e-marketing. Schools have so
far been quicker to embrace digital technology in the classroom than in the back
office, but this is now changing. Laptops for senior managers and the
requirement to deliver key data online have been two drivers of an increased
openness to online information. E-marketing made an immediate positive
contribution to sales in 2006 and we can expect a steady growth in online
content and marketing channels in the future.
As a consequence, 2006 was the right time to invest online and over the next two
to three years we expect www.teachingexpertise.com to become an important
additional channel for our broadening range of information products as well as
e-commerce revenues from Incentive Plus. The education market is still moving
online more slowly than other, more commercial sectors and one disappointment in
2006 was the performance of the online training business, which did not respond
to an increased investment in sales and content and which made a loss in the
year. As a result the business has been scaled back until the return on
investment improves. Excluding the online training business the organic margins
for the Public Sector division improved to 16%, which approaches our long-term
target for this business.
Prospects for the education business are exciting. The foundation of
strongly-renewing subscription products is now enhanced by a series of
inter-connecting products in well-defined niches. The addition of Incentive Plus
enables the business to monetize access to its customer base in a way that is
more appropriate and more effective for this market than through advertising
revenues alone, and the development of online channels will both complement and
support that development.
The wide range of different product types and revenue streams, combined with
consistent systems and strong database marketing expertise, create a strong
rationale for further acquisitions in existing or parallel market sectors.
Sport Sector
#000 2006 2005 Change
Turnover 4,133 1,279 +223%
Operating profit before goodwill 736 107 +588%
Profit margin 17.8% 8.4% +119%
Electric Word's publishing in the sport sector has been transformed this year by
the acquisition of SportBusiness Group (SBG) in December 2005 for #2.75m. SBG
extends our sports publishing from sports performance (aimed at athletes and
their professional supporters) into the business of sport, particularly around
the position of sport in media, marketing, gaming and the bidding and staging of
major sports events.
SBG has brought important new sales competencies to Electric Word as well as an
excellent brand and some high-value products including magazines, a newsletter
and a range of special reports. Electric Word has been able to add expertise in
conferences, marketing and e-marketing and an established publishing
infrastructure. The result has been organic sales growth within SBG itself and
some savings in overhead, which together have moved the business into profit. In
2006 SBG also delivered an additional publishing contract around the Asian Games
recently staged in Doha, which further improved revenues and profits. Overall,
the division improved its margins to 17.8% from 8.4%
In total, the acquisition added sales of #2.8m at a margin of 20%. However the
existing sports performance business also grew turnover by 9% as a result of
further growth (+40%) in revenues from the online business. This also had the
effect of improving margins to 11.3% (8.4%).
Sport is a high-growth market, both in the UK and internationally. Personal
fitness, the increasing recognition of the competitive benefits of sports
science and the great commercial value attributed to sport by cities bidding for
major events, marketers of global brands and media businesses, all drive
opportunities for growth in the future.
Central Group Costs
Central group costs not directly attributable to businesses amounted to #545k
(#399k in 2005), declining as a proportion of Group revenue to 5.1% from 6.4%.
In addition there was a net interest charge in the year of #37k (down from a
credit in 2005 of #19k). Although bank balances increased during the year, the
Group took on some bank debt to provide additional working capital to support
the growth of Incentive Plus. The interest line also includes an accounting
charge against the fair value of the convertible debt used to acquire
SportBusiness Group, on which there would be a 2% coupon were it not to be
converted into equity.
Outlook
Since year end the structure of companies within the Group was reorganized on
1st December 2006. We have also continued to build SportBusiness Group and in
February acquired Ark Sports Ltd, which has an event and e-zine in the sport and
technology niche, for #90,000.
We are particularly pleased that Incentive Plus has recorded its strongest-ever
first quarter and that we have seen the successful launch of a new education
newsletter (Learning and Teaching Update). Within SportBusiness Group, i-Gaming
Business enjoyed a successful inaugural event in January and that business looks
set to grow on the back of (rather than despite) industry concerns over changes
in the US regulatory environment.
We expect this year will benefit from the full impact of our acquisitions in
2006, underlying organic growth and increasing internal efficiencies. The
current year has started well and in line with the Board's expectations. With a
strong balance sheet and an established infrastructure the Group is primed to
make further acquisitions should the right opportunities arise.
Electric Word plc
Consolidated Profit and Loss Account
For the Year Ended 30 November 2006
Continuing Acquisitions 2006 2005
Notes # # # #
TURNOVER 2 6,738,220 3,974,213 10,712,433 6,234,499
COST OF SALES
Cost of Sales (1,942,183) (1,691,108) (3,633,291) (1,727,251)
Marketing (1,787,835) (372,518) (2,160,353) (1,884,240)
--------- --------- --------- ---------
GROSS PROFIT 3,008,202 1,910,587 4,918,789 2,623,008
Operating expenses (2,809,069) (1,153,211) (3,962,280) (2,190,768)
Amortisation of
goodwill (307,012) (396,991) (704,003) (286,498)
-------- -------- -------- ----------
Total
administrative
expenses (3,116,081) (1,550,202) (4,666,283) (2,477,266)
--------- --------- --------- ---------
OPERATING
(LOSS)/PROFIT (107,879) 360,385 252,506 145,742
Interest 26,700 1,303 28,003 21,020
receivable
Interest payable (17,434) (47,528) (64,962) (1,914)
--------- --------- --------- ---------
(LOSS)/PROFIT ON
ORDINARY
ACTIVITIES (98,613) 314,160 215,547 164,848
BEFORE TAXATION
Taxation 3 (65,167) 137,778 72,611 (50,756)
--------- --------- --------- ---------
(LOSS)/PROFIT ON
ORDINARY
ACTIVITIES (163,780) 451,938 288,158 114,092
AFTER TAXATION
Minority interests - (27,037) (27,037) -
--------- --------- --------- ---------
(LOSS)/PROFIT ON
ORDINARY
ACTIVITIES
AFTER TAXATION AND (163,780) 424,901 261,121 114,092
MINORITY INTERESTS
--------- --------- --------- ---------
EARNINGS PER SHARE
Basic 4 0.21p 0.12p
--------- ---------
Diluted 0.17p 0.10p
--------- ---------
The operating profit for the year arises from the Group's continuing operations.
No separate statement of Total Recognised Gains and Losses has been presented as
all such gains and losses have been dealt with in the profit and loss account.
Electric Word plc
Consolidated Balance Sheet
30 November 2006
Group Group
2006 2005
Notes # #
FIXED ASSETS
Intangible assets 7 6,122,743 2,037,287
Tangible assets 313,900 181,466
Investments 90,000 -
--------- ---------
6,526,643 2,218,753
CURRENT ASSETS
Stocks 284,462 53,117
Debtors due within one year 2,618,336 1,530,399
Debtors due after more than one year 578,097 292,651
Cash at bank and in hand 1,475,468 880,677
--------- ---------
4,956,363 2,756,844
--------- ---------
CREDITORS: Amounts falling due within one
year
Deferred revenue (3,079,905) (2,708,560)
Other creditors (1,823,530) (912,780)
--------- ---------
(4,903,435) (3,621,340)
--------- ---------
NET CURRENT ASSETS/(LIABILITIES) 52,928 (864,496)
--------- ---------
TOTAL ASSETS LESS CURRENT LIABILITIES 6,579,571 1,354,257
CREDITORS: Amounts falling due after more
than one year 8 (1,494,018) (105,402)
PROVISIONS FOR LIABILITIES (330,592) (158,000)
--------- ---------
NET ASSETS 4,754,961 1,090,855
--------- ---------
CAPITAL AND RESERVES
Called up share capital 9 1,381,442 951,139
Share premium account 2,977,933 3,000
Merger reserve 105,011 105,011
ESOP reserve (53,497) (24,209)
Profit and loss account 317,035 55,914
--------- ---------
SHAREHOLDERS' FUNDS 6 4,727,924 1,090,855
Minority Interest 27,037 -
--------- ---------
4,754,961 1,090,855
--------- ---------
Electric Word plc
Consolidated Cash Flow Statement
30 November 2006
2006 2005
Notes # #
Cash flow from operating activities 5a 531,092 289,517
Returns on investments and servicing
of finance 5b (11,769) 19,106
Taxation (114,536) (420)
Capital expenditure and financial
investment 5b (229,216) (30,873)
------- ------
Cash inflow before acquisitions and
financing 175,571 277,330
Acquisitions 5b (1,942,788) (269,806)
--------- ---------
Cash (outflow)/inflow before (1,767,217) 7,524
financing
Financing 5b 2,362,008 (28,272)
--------- ------
INCREASE/(DECREASE) IN CASH IN THE 594,791 (20,748)
YEAR
--------- ------
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2006 2005
# #
Increase/(decrease) in cash in the 594,791 (20,748)
year
Cash (inflow)/outflow from movement
in lease financing 37,439 6,945
Cash outflow from increase in loans (650,000) -
------- ------
Change in net debt resulting from
cash flows (17,770) (13,803)
New finance leases - (153,000)
------- ------
MOVEMENTS IN NET FUNDS IN YEAR (17,770) (166,803)
NET FUNDS AT 1 DECEMBER 2005 734,622 901,425
------- ------
NET FUNDS AT 30 NOVEMBER 2006 716,852 734,622
------- ------
Electric Word plc
NOTES TO THE PRELIMINARY ACCOUNTS
For the Year Ended 30 November 2006
1. The announcement was approved by the Directors on the 5th March 2007.
The preliminary results for the year ended 30th November 2006 are unaudited. The
financial information set out in the announcement does not constitute the
Company's statutory accounts for the year ended 30th November 2006 or 30th
November 2005. The financial information for the year ended 30th November 2005
is derived from the statutory accounts for that year, which have been delivered
to the Registrar of Companies. The auditors reported on those accounts and their
report was unqualified. Accounting policies remain consistent with those stated
in the financial statements for the year ended 30 November 2005.
2. TURNOVER
The Group's turnover and profit on ordinary activities before taxation were all
derived from its principal activity. Sales were made in the following
geographical markets:
2006 2005
# #
United Kingdom 8,434,816 5,573,094
Europe 381,107 661,405
Rest of the World 1,896,510 -
--------- ---------
10,712,433 6,234,499
--------- ---------
Analysis by class
of business
Profit/(loss) on ordinary
activities before taxation
Turnover and minority interests Net assets
2006 2005 2006 2005 2006 2005
# # # # # #
Public
Sector 6,579,833 4,954,962 775,654 442,190 3,539,684 1,451,542
Management
Sport 4,132,600 1,279,537 736,093 102,432 1,267,122 (125,253)
Group - - (1,296,200) (379,774) (51,845) (235,434)
overheads
--------- --------- --------- ------- --------- ---------
10,712,433 6,234,499 215,547 164,848 4,754,961 1,090,855
--------- --------- --------- ------- --------- ---------
3. TAXATION
2006 2005
# #
Current tax:
UK corporation tax on profits of the period 110,063 2,617
--------- --------
Total current tax 110,063 2,617
--------- --------
Deferred taxation:
Origination and reversal of timing differences (182,674) 48,139
--------- --------
(182,674) 48,139
--------- --------
Tax on loss on ordinary activities (72,611) 50,756
--------- --------
Factors affecting tax charge for the period
The tax assessed for the period is lower than the standard rate of
corporation tax in the UK.
The differences are explained below:
Profit on ordinary activities before tax 215,547 164,848
--------- --------
Profit on ordinary activities multiplies by the standard
rate of corporation tax in the UK of 30% (2005 - 30%) 64,664 49,454
Effect of:
Expenses not deductible for tax purposes 87,115 14,279
Amortisation of intangible fixed asset 213,047 79,531
Capital allowances in excess of depreciation (33,080) 5,767
Utilisation of tax losses (214,372) (142,725)
Small companies relief (7,311) (3,689)
--------- --------
Current tax charge for the period 110,063 2,617
--------- --------
There are accumulated losses of #3.12 million (2005: #1.78 million) which,
subject to agreement with the Inland Revenue, are available to offset future
profits of the same trade.
A deferred tax asset of #729,297 (2005: #546,623) has been recognised on the
balance sheet representing losses which are expected to reverse in the
foreseeable future.
4. EARNINGS PER ORDINARY SHARE
The calculation of earnings per ordinary share is based on the following:
Weighted 2006 Weighted average 2005
Earnings number of Earnings Earnings number of shares Earnings per share
shares per share
# p # p
Basic
earnings 261,121 126,251,152 0.21 114,092 95,055,772 0.12
per share
------ --------- -------- -------- -------- --------
Diluted
earnings
per share
Basic
earnings 261,121 126,251,152 0.21 114,092 95,055,772 0.12
per share
Dilutive
effect of
share
options 14,002,811 (0.03) - 11,435,522 (0.01)
Dilutive
effect of
warrants 10,089,713 (0.01) - 9,755,302 (0.01)
Dilutive
effect of
share
incentive 63,788 0.00 - - -
plan
------ --------- -------- -------- ---------- --------
261,121 150,407,464 0.17 114,092 116,246,596 0.10
------ --------- -------- -------- ---------- --------
5. CASH FLOWS
a Reconciliation of operating loss to net cash inflow from operating activities
2006 2005
# #
Operating profit 252,175 145,742
Amortisation 704,003 286,494
Depreciation 118,687 32,221
(Increase)/decrease in stocks (17,504) 51,839
Increase in debtors (684,759) (508,614)
Increase in creditors 144,490 122,717
Increase in provision - 158,000
Adjustment re ESOP 14,000 1,118
--------- ---------
Net cash inflow from operating activities 531,092 289,517
--------- --------
b Analysis of cash flows for headings netted in the cash flow statement
2006 2005
# #
Returns on investments and servicing of finance
Interest received 28,003 21,020
Interest element of finance lease rental payments (39,772) (1,914)
--------- --------
Net cash inflow from returns on investments and
servicing of finance (11,769) 19,106
--------- --------
Capital expenditure and financial investment
Purchase of tangible fixed assets (229,216) (30,873)
--------- --------
Acquisitions
Purchase of subsidiary undertakings (2,142,112) (269,806)
Purchase of unincorporated businesses (63,092) -
Cash acquired with subsidiary undertakings 262,416 -
--------- --------
Net cash outflow from acquisitions (1,942,788) (269,806)
--------- --------
2006 2005
# #
Financing
Issue of share capital 1,900,000 4,000
Share issue costs (107,265) -
Cash inflow from long term bank loan 750,000 -
Repayment of long term loans (100,000) -
Capital element of finance lease rental payments (37,439) (6,945)
Contribution to ESOP (43,288) (25,327)
--------- --------
Net cash inflow/(outflow) from financing 2,362,008 (28,272)
--------- --------
c. Analysis of funds
At 1 December Other At 30 November
2005 non-cash 2006
changes
Cash flow
# # # #
Cash at bank and
in hand 880,677 615,423 - 1,496,100
Bank overdraft - (20,632) - (20,632)
--------- --------- --------- ---------
Cash 880,677 594,791 - 1,475,468
--------- --------- -------- ---------
Loans due within
one year - (150,000) - (150,000)
Finance leases
due within one
year (40,653) 37,439 (35,249) (38,463)
--------- --------- --------- ---------
Debt due within
one year (40,653) (112,561) (35,249) (188,463)
--------- --------- -------- ---------
Loans due after
one year (500,000) - (500,000)
Finance leases
due after one
year (105,402) - 35,249 (70,153)
--------- --------- -------- ---------
Debt due after
one year (105,402) (500,000) 35,249 (570,153)
--------- --------- -------- ---------
Net funds 734,622 (17,770) - 716,852
--------- --------- -------- ---------
6. RECONCILIATION OF MOVEMENT IN SHAREHOLDERS FUNDS
Group Group
2006 2005
# #
Profit for the financial year 261,121 114,092
Issue of shares 430,303 1,000
Premium of allotment during year 3,082,198 3,000
Share issue costs (107,265) -
Purchase of shares - (25,327)
Movement in ESOP reserve (29,288) 1,118
--------- --------
3,637,069 93,883
Opening shareholders' funds 1,090,855 996,972
--------- --------
Closing shareholders' funds 4,727,924 1,090,855
--------- --------
7. INTANGIBLE ASSETS AND ACQUISITIONS
Goodwill Magazines Total
# # #
Group
1 December 2005 3,031,583 50,000 3,081,583
Additions 4,538,782 - 4,538,782
Goodwill on acquisition 350,146 - 350,146
Fair value adjustments (99,469) - (99,469)
-------- --------- --------
30 November 2006 7,821,042 50,000 7,871,042
-------- --------- --------
Amortisation
1 December 2005 999,296 45,000 1,044,296
Charged in the year 699,003 5,000 704,003
-------- --------- --------
30 November 2006 1,698,299 50,000 1,748,299
-------- --------- --------
Net book value
30 November 2006 6,122,743 - 6,122,743
-------- ---------- --------
30 November 2005 2,032,287 5,000 2,037,287
-------- ---------- --------
Fair value adjustments relate to adjustments of estimated fair values of
acquisitions in the prior year in accordance with FRS 7.
On 31 December 2005 the Group acquired 100% of the issued share capital of DMWSL
370 Limited. The assets at acquisition were as follows:
Fair value
adjustment
Book value Fair value
# # #
Tangible assets 4,001 (2,978) 1,023
Investments 90,000 - 90,000
Debtors 382,039 21,732 403,771
Cash at bank and in
hand 180,575 - 180,575
Creditors: amount
falling due within one
year (790,537) 74,000 (716,537)
-------- --------- --------
Net assets (133,922) 92,754 (41,168)
-------- --------- ---------
Goodwill arising on
consolidation 2,734,912
--------
2,693,744
Total consideration --------
Satisfied by:
Consideration - ordinary shares at fair 1,500,000
value
- preference shares at fair 900,625
value
Deferred contingent
consideration at fair
value - cash 236,967
Acquisition costs 56,152
--------
2,693,744
--------
On 6 May 2006 the Group acquired 100% of the issued share capital of Incentive
Plus Ltd. The assets at acquisition were as follows:
Fair value
adjustment
Book value Fair value
# # #
Intangible assets 350,146 350,146
Tangible Assets 17,904 (5,898) 12,006
Stock 118,577 118,577
Debtors 151,166 80,945 232,111
Cash 81,841 81,841
Creditors: amount falling due
within one year (264,029) (97,842) (361,871)
-------- --------- --------
Net assets 455,605 (22,795) 432,810
-------- ---------
Goodwill arising on consolidation 1,604,455
--------
2,037,265
Total consideration --------
Satisfied by:
Cash 1,917,418
Costs 119,847
--------
2,037,265
--------
8. CREDITORS DUE IN MORE THAN ONE YEAR
Group Group
2006 2005
# #
Group
Bank loans 500,000 -
Obligations under finance leases 70,153 105,402
Preference shares (note 9) 919,149 -
Accruals 4,716 -
--------- --------
1,494,018 105,402
--------- --------
Group Group
2006 2005
# #
Group
Amounts payable:
In more than one year but not more than two years 36,995 40,654
Within two to five years 33,158 64,748
--------- --------
70,153 105,402
--------- --------
9. SHARE CAPITAL
Share capital classed as equity:
2006 2005
# #
Authorised:
300,000,000 ordinary shares of 1p each 3,000,000 3,000,000
--------- --------
Allotted, issued and fully paid:
138,144,157 (2005: 95,113,854) ordinary shares of 1p
each 1,381,442 951,139
--------- --------
On 30 December 2005 the company issued 18,750,000 ordinary shares with an
aggregate nominal value of #187,500 for 8p each.
On 5 May 2006 23,030,303 ordinary shares with aggregate nominal value of
#230,303 were issued for 8.25p each.
On 1 June 2006 the company issued another 1,250,000 ordinary shares of 1p each
for 9p each
Shares classed as liabilities
Convertible redeemable preference shares 2006 2005
# #
Authorised:
1,000,000 convertible redeemable preference shares of
#1 each 1,000,000 -
--------- --------
Allotted:
987,500 convertible redeemable preference shares of #1
each 987,500 -
Future interest costs (68,351) -
--------- ---------
Liability (note 8) 919,149 -
--------- --------
On 28 March 2006 the company issued 987,500 convertible redeemable preference
shares of #1 each at par. These shares were issued as part consideration for the
entire issued share capital of DMWSL 370 Limited as is more fully described in
note 8.
Up to 625,000 preference shares can be redeemed prior to the 31 December 2007 at
the company's option on repayment of the nominal value and a coupon rate of 2%.
Between 1 January 2008 and 31 December 2009 each preference share is convertible
into ten ordinary shares at the option of the shareholder. All unconverted or
unredeemed preference shares are repayable at their nominal value on 31 December
2009.
Warrants
As at 30 November 2006 the following warrants had been granted and remained
outstanding:
.
Number of Exercise price
ordinary shares
Date of grant
17 March 2000 11,357,158 1p
The warrants are exercisable from the date of grant until the tenth anniversary
of the date of grant over ordinary shares of 1p each in electric Word Publishing
Limited. There is a put and call option in place whereby the warrant holders
granted the Company an option to require them to sell and the Company granted
the warrant holders an option to require the Company to purchase any shares in
Electric Word Publishing Limited arising on the exercise of the warrants on a
one for one basis in exchange for the same number of shares in the Company.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR GLGDXUUGGGRL
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