TIDMELE
RNS Number : 2955Q
Electric Word PLC
29 August 2014
29 August 2014
ELECTRIC WORD PLC
Interim Results to 31 May 2014
Electric Word, the specialist information business with
divisions operating in the Sport and Gaming, Education and Health
sectors, announced today interim results for the six months ended
31 May 2014.
HIGHLIGHTS
* Revenues from continuing operations increase by 6% to
GBP6.8m
* Adjusted EBITA* improves to GBP29k compared to
GBP320k loss for H1 2013
* Cash flow from operations increased to GBP411k in H1
2014 compared to GBP168k in H1 2013
* iGaming events grow revenue by 83% and profit
contribution by 130%
* SportBusiness subscriptions revenue up 41%, driven by
growth in TV Sports Markets and investment in Sports
Sponsorship Insider
* Optimus Education business model continues to evolve
to high-value online services and live conference
revenues up 5% year-on year
* Average yield per Optimus subscriber in May 2014 26%
higher than May 2013, driven by high-value new
products
* Health division increases focus with closure of
sub-scale journals, disposal of Sports Performance
business and location in one site
* Health e-books and ecommerce sales up 29% compared to
H1 2013
* Adjusted numbers (note 3) exclude amortisation
and impairment of goodwill and intangible assets,
acquisition-related and restructuring costs,
and share based payment costs, as well as the
tax impact of those adjusting items and any non-cash
tax credits and charges.
Julian Turner, Chief Executive of Electric Word, commented:
"Our three strategic goals have been to accelerate the shift
from print to digital and live formats; to focus the business on
deeper customer relationships; and to simplify the business. We
have made steady progress in the first half of 2014 on all these
fronts while improving profitability and re-investing strengthened
operational cashflow in digital products and managerial
infrastructure.
As we enter the fourth quarter, which is an important
contributor to the Group's overall performance, we are not
currently expecting all parts of the Group to trade ahead of last
year. However, our confidence in the potential of our digital
subscription businesses has encouraged us to increase the
investment in product development and to continue to add to the
quality and levels of seniority and digital experience within the
team in the second half of the year. Although these additional
commitments will reduce profitability in the short term, we believe
they will have a significant positive impact on the scale and value
of the group in the medium term."
Electric Word plc
INTERIM RESULTS TO 31 May 2014
Chairman's and Chief Executive's Statement
Financial summary (GBP'000) 2014 2013 % 2013
6 months 6 months Change 12 months
GBP'000 GBP'000 GBP'000 GBP'000
Restated Restated
Continuing operations
Revenue 6,841 6,477 +6% 14,332
Gross Profit 3,559 3,087 +15% 7,436
Adjusted EBITA* 29 (320) 649
------------------------------- ---------- ---------- --------- -----------
Adjusted profit before
tax* 13 (348) 604
Amortisation (350) (439) (922)
Impairment expense - - (674)
Restructuring credits
and (costs) 6 (14) (300)
Acquisition-related
credits - 44 144
Share-based payment
(charges) and credits (135) 12 27
------------------------------- ---------- ---------- --------- -----------
Loss before tax (466) (745) (1,121)
=============================== ========== ========== ========= ===========
Loss for the financial
period from continuing
operations (426) (601) (512)
=============================== ========== ========== ========= ===========
Diluted earnings per
share from continuing
operations (0.12)p (0.16)p (0.16)p
Adjusted diluted earnings
per share* (0.04)p (0.11)p 0.05p
Diluted earnings per
share from continuing
and discontinued operations (0.16)p (0.16)p (0.18)p
=============================== ========== ========== ========= ===========
Cash and cash equivalents 580 603 463
Net (debt) / funds (89) 3 (12)
Comparative figures for the year to 30 November 2013 and six
months to 31 May 2013 have been restated to reclassify the results
of the Sports Performance business as discontinued operations
following its disposal on 30 May 2014. See note 8.
* Adjusted numbers (note 3) exclude amortisation, impairment of
goodwill and intangible assets, acquisition-related and
restructuring credits and costs, and share based payment costs, as
well as the tax impact of those adjusting items and any non-cash
tax credits and charges.
Net funds / (debt) (note 6) comprise cash held net of bank
overdrafts and loans.
Revenue by activity 2014 2013 2013
6 months 6 months 12 months
GBP'000 % GBP'000 % GBP'000 %
Continuing operations Restated Restated
------------------------ ---------- ----- ---------- ----- ----------- -----
Subscriptions 1,592 23% 1,472 23% 3,096 22%
------------------------ ---------- ----- ---------- ----- ----------- -----
Event delegates
and training 948 14% 1,020 15% 2,236 15%
------------------------ ---------- ----- ---------- ----- ----------- -----
Sponsorship and
exhibitions 1,520 22% 811 13% 2,479 17%
------------------------ ---------- ----- ---------- ----- ----------- -----
Books and reports 1,561 23% 1,672 26% 3,408 24%
------------------------ ---------- ----- ---------- ----- ----------- -----
Advertising 877 13% 830 13% 1,991 14%
------------------------ ---------- ----- ---------- ----- ----------- -----
Bespoke publishing
and consultancy
services 149 2% 268 4% 520 4%
------------------------ ---------- ----- ---------- ----- ----------- -----
Commerce 194 3% 404 6% 602 4%
------------------------ ---------- ----- ---------- ----- ----------- -----
Total 6,841 100% 6,477 100% 14,332 100%
------------------------ ---------- ----- ---------- ----- ----------- -----
ENDS
Julian Turner, Chief Executive,
Electric Word 020 7954 3470
Andrew Potts, Panmure Gordon 020 7886 2500
Electric Word plc
INTERIM RESULTS TO 31 May 2014
Chairman's and Chief Executive's Statement
GROUP OVERVIEW
Total Group 2014 2013 2013
6 months 6 months 12 months
Total Total Total
GBP'000 GBP'000 GBP'000
Continuing operations Restated Restated
------------------------ ---------- ---------- -----------
Revenue 6,841 6,477 14,332
------------------------ ---------- ---------- -----------
Adjusted EBITA* 29 (320) 649
------------------------ ---------- ---------- -----------
Margin -% -5% 5%
------------------------ ---------- ---------- -----------
Net interest payable (16) (28) (45)
------------------------ ---------- ---------- -----------
Adjusted PBT* 13 (348) 604
------------------------ ---------- ---------- -----------
* Adjusted numbers (note 3) exclude amortisation and impairment
of goodwill and intangible assets, acquisition-related and
restructuring costs, and share based payment costs, as well as the
tax impact of those adjusting items and any non-cash tax credits
and charges.
At the end of 2013 the Group set out a plan to grow the value of
its publishing assets by investing in the transition to digital and
live formats which have a higher quality of earnings, increasing
its market focus and simplifying its range of activities. This
strategy has been underpinned by strengthening the management of
the business at both divisional and Group level.
Through 2014 we have made progress on all these objectives. The
business is going through a period of great change and it is
exciting to see new digital products and live services emerging. We
have seen particularly strong growth in our Affiliate events within
the Sport and Gaming division and the Optimus conferences within
our Education division have continued to grow. We have increased
investment in digital products across the Group, in particular, in
a number of Sports and Gaming products, in the Optimus subscription
offering and in digital versions of various products in the Health
division. Overall, in the period, we have grown the proportion of
group revenues that derive from subscriptions and live products
from 51% to 59% and all subscription products are now delivered
digitally (in some cases as well as paper formats). Advertising
revenue remains at just 13% of group revenue, with an increasing
proportion of that deriving from online rather than paper products.
Each division has an evolving programme of digital product
development that is intended to drive up the value of our products
and services for our customers and focus on fewer areas with the
most scalable opportunities.
We aim to have a deep understanding of our sectors and of our
customers' challenges and information requirements and over time to
grow the value of our customer relationships. We have seen
particular success in the Education division where we have
continued to increase the value of our Optimus online subscription
offering by launching a new high-value professional development
service.
During the period, we also made good progress on simplification,
reducing non-core activities in every division to focus our
investments on the areas that will generate the greatest long-term
value. In Education, we are implementing the plan to wind down the
Incentive Plus catalogue business. In Health, we disposed of Sports
Performance, closed some sub-scale publications and relocated the
team to London.
Electric Word plc
INTERIM RESULTS TO 31 May 2014
Chairman's and Chief Executive's Statement
SPORT & GAMING division
2014 2013 2013
6 months 6 months Change 12 months
GBP'000 GBP'000 % GBP'000
----------------- ---------- ---------- -------- -----------
Revenue 3,155 2,430 +30% 6,152
----------------- ---------- ---------- -------- -----------
Adjusted EBITA* 719 265 +171% 1,439
----------------- ---------- ---------- -------- -----------
Margin 22% 11% 23%
----------------- ---------- ---------- -------- -----------
The Sport and Gaming division provides market information and
knowledge to professionals in the global businesses of sport and
online gaming. The strategy for this business has been to increase
focus and switch the balance of revenue away from advertising and
towards events and subscriptions. This has meant stopping some
activities such as contract publishing and some smaller events and
a paper directory. The online gaming Affiliate events have been
scaled up, with excellent results in growing both revenue and
profits. Some of that profit is being reinvested in building
additional content and functionality for the division's high-value
digital subscriptions products including TV Sports Markets, Sports
Sponsorship Insider, SportBusiness Knowledge Centre and the iGaming
Business Intelligence Centre. These services will continue to
evolve through 2014 and 2015 in response to market needs and
customer feedback.
EDUCATION divisioN
2014 2013 2013
6 months 6 months Change 12 months
GBP'000 GBP'000 % GBP'000
----------------- ---------- ---------- -------- -----------
Revenue 2,029 2,209 -8% 4,568
----------------- ---------- ---------- -------- -----------
Adjusted EBITA* (243) (282) -14% (155)
----------------- ---------- ---------- -------- -----------
Margin -12% -13% -3%
----------------- ---------- ---------- -------- -----------
The table above includes the results of Incentive Plus which has
not been classified as discontinued as it continues to trade for
the majority of 2014. The Group has announced its intention to wind
down this business during 2014 which will happen in the latter part
of the year. In the period to 31 May 2014, Incentive Plus
contributed revenue of GBP194,000 and adjusted EBITA* of GBP47,000
profit (Period to 31 May 2013: Revenue of GBP404,000 and adjusted
EBITA* of GBP10,000 profit; Year to 30 November 2013: Revenue of
GBP602,000, and adjusted EBITA* of GBP19,000 loss).
The Optimus Education division supports teachers' professional
development requirements through an online subscription-based
information and training service and through live conferences.
The division has seen a substantial change over the last few
years, in particular, through a transfer last year of all customers
of the printed product to the online subscription service which
offers better, more up-to-date, more tailored content. The division
is now focused on delivering an attractive, high-value professional
development service in a market in which schools are encouraged to
source their support from a wide range of private and public
providers instead of being confined to the local education
authority. To take advantage of this bigger opportunity the
division has reduced its range of activity by starting the wind
down of the Incentive Plus business (which supplies third-party
products to schools), consolidating its subscription products and
disinvesting in books and other one-off products.
The new service that has continued to improve during 2014
delivers more value to our customers through a cost-effective
online training and support service for school leaders that
supports compliance, school improvement and the consistent
development of skills and knowledge throughout the school. As a
result, the average value per subscription has increased by 26% in
May 2014 compared to May 2013. The subscription service is
complemented by the highly successful range of Optimus conferences,
which enable senior and middle leaders to keep updated and share
best practice. These live events continued to trade well, with H1
revenues up 5% on a good 2013 result.
The strong growth prospects for this business, with only a small
minority of schools currently taking the highest-value subscription
service, has been backed up by a significant investment in
strengthening the
Electric Word plc
INTERIM RESULTS TO 31 May 2014
Chairman's and Chief Executive's Statement
leadership of the division. The second half will see the
addition of a new Managing Director as well as a substantial
further investment in product development and sales, including
additional sales management. We expect to continue to develop the
product through 2015 which will drive further increases in value
and open up new revenue opportunities as the landscape of education
services continues to change.
HEALTH division
2013 2013
2014 6 months 12 months
Continuing operations 6 months GBP'000 Change GBP'000
GBP'000 Restated % Restated
------------------------ ----------- ---------- -------- -----------
Revenue 1,657 1,838 -10% 3,612
------------------------ ----------- ---------- -------- -----------
Adjusted EBITA* (135) 37 -465% 105
------------------------ ----------- ---------- -------- -----------
Margin -8% 2% 3%
------------------------ ----------- ---------- -------- -----------
The table above excludes the results of the Sports Performance
business which was sold on 30 May 2014 - see note 8. In the period
to 31 May 2014, this business contributed revenue of GBP76,000 and
adjusted EBITA* of GBP56,000 loss (Period to 31 May 2013: Revenue
of GBP176,000 and adjusted EBITA* of GBP6,000 loss; Year to 30
November 2013: Revenue of GBP303,000, and adjusted EBITA* of
GBP59,000 loss).
The Health division is made up of the Radcliffe and Speechmark
publishing businesses and the Radcliffe Solutions software
business.
The strategy for the Health division has been to increase the
focus of its publishing activity, by developing books and other
products with higher lifetime sales, grow e-book and other digital
product sales as well as sales through ecommerce channels and
concentrate on fewer products in fewer areas. We have therefore
disposed of the consumer-facing Sports Performance business, closed
some sub-scale publications and relocated the team to one office in
London.
At the same time, we have invested in building the
infrastructure needed for book and ebook publishing in an
increasingly digital trade environment. As a result, sales of
ebooks and sales through ecommerce channels grew by 29% in the
period compared to 2013, although sales of Speechmark products
(which are as yet less digitally evolved) declined by 7%. During
the first half we developed the digital database version of a key
medical reference work and in the second half of the year we are
investing in the first set of a series of digital Speechmark
products for speech therapists and teachers to use with children.
These will be market tested at the end of this year.
Central costs
2014 2013 2013
6 months 6 months Change 12 months
GBP'000 GBP'000 % GBP'000
----------------------- ---------- ---------- -------- -----------
Adjusted EBITA* (312) (340) -8% (740)
----------------------- ---------- ---------- -------- -----------
As % of Group revenue 5% 5% 5%
----------------------- ---------- ---------- -------- -----------
Net interest payable (16) (28) (45)
----------------------- ---------- ---------- -------- -----------
Central costs have been reduced slightly as a result of closing
the Milton Keynes office in February 2014. Lower interest costs
result from lower average levels of bank debt for the majority of
the current reporting period.
Electric Word plc
INTERIM RESULTS TO 31 May 2014
Chairman's and Chief Executive's Statement
FINANCIAL REVIEW
As noted above, Adjusted EBITA has been positively impacted by
the growth in both revenues and profitability. Cash from operating
activities was GBP411k for the period to 31 May 2014, compared to
GBP168k in 2013 and is a result of the stronger trading performance
and continued focus on working capital management. Deferred revenue
increased significantly compared to 2013 as a result of growth in
pre-billed subscriptions, conferences and events. The extent to
which pre-billed revenues have been paid and positively affected
cash flows is demonstrated by a decrease in trade receivables.
In addition, Group cash flow has also been impacted by a new
GBP200k bank loan and the payment of GBP303k dividends to the
minority shareholder of iGaming Business Ltd.
Current Trading and Prospects
As we enter the fourth quarter, which is an important
contributor to the Group's overall performance, we are not
currently expecting all parts of the Group to trade ahead of last
year. However, our confidence in the potential of our digital
subscription businesses has encouraged us to increase the
investment in product development and to continue to add to the
quality and levels of seniority and digital experience within the
team in the second half of the year. Although these additional
commitments will reduce profitability in the short term, we believe
they will have a significant positive impact on the scale and value
of the group in the medium term."
Andrew Brode Chairman
Julian Turner Chief Executive
Electric Word plc
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 May 2014 - unaudited
Six Six months Year
months ended ended
ended 31 May 30 November
31 May 2013 2013
Note 2014 GBP'000 GBP'000
GBP'000 Restated Restated
------------------------------------------ ----- ------- --------------------------------- --------------------------------------------
CONTINUING OPERATIONS
REVENUE 2 6,841 6,477 14,332
Cost of sales - direct
costs (2,666) (2,521) (5,263)
Cost of sales - marketing
expense (616) (869) (1,633)
------------------------------------------- ----- ------- --------------------------------- --------------------------------------------
Gross profit 3,559 3,087 7,436
Other operating expenses (3,620) (3,332) (6,652)
Restructuring credit
/ (expense) 6 (14) (300)
Acquisition-related credits - 44 144
Depreciation expense (45) (63) (108)
Amortisation expense (350) (439) (922)
Impairment charges 3 - - (674)
Total administrative
expenses (4,009) (3,804) (8,512)
2,
OPERATING LOSS 3 (450) (717) (1,076)
Finance costs (16) (28) (51)
Finance income - - 6
LOSS BEFORE TAX 3 (466) (745) (1,121)
Taxation 4 40 144 609
LOSS FOR THE PERIOD FROM
CONTINUING OPERATIONS (426) (601) (512)
DISCONTINUED OPERATIONS
(Loss) / profit for the
period from discontinued
operations, net of tax 8 (131) 1 (102)
LOSS FOR THE PERIOD (557) (600) (614)
================================================== ======= ================================= ============================================
Attributable to:
3 (653) (646)
* Equity holders of the parent (733)
96 46 119
* Non-controlling interest
------------------------------------------- ----- ------- --------------------------------- --------------------------------------------
TOTAL COMPREHENSIVE LOSS (557) (600) (614)
LOSS PER SHARE 5
From continuing and discontinued
operations
Basic (0.16)p (0.16)p (0.18)p
Diluted (0.16)p (0.16)p (0.18)p
From continuing operations
Basic (0.13)p (0.16)p (0.16)p
Diluted (0.12)p (0.16)p (0.16)p
================================================== ======= ================================= ============================================
Prior period results have been restated to show the effect of
operations which have been discontinued in the current period.
Electric Word plc
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 May 2014 - unaudited
Reserve
Share for Non-
Share premium Other own Retained controlling Total
capital account reserves shares earnings Total interest equity
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- --------- --------- ---------- --------- ---------- ---------- ------------- ---------
At 30 November
2012 3,996 7,452 105 (123) (3,200) 8,230 249 8,479
Total comprehensive
income - - - - (646) (646) 46 (600)
3,996 7,452 105 (123) (3,846) 7,584 295 7,879
Dividend
paid by
subsidiary - - - - - - (100) (100)
Share issues 72 79 - - - 151 - 151
Share based
payment
credits - - - - (12) (12) - (12)
--------------------- --------- --------- ---------- --------- ---------- ---------- ------------- ---------
At 31 May
2013 4,068 7,531 105 (123) (3,858) 7,723 195 7,918
Total comprehensive
income - - - - (87) (87) 73 (14)
4,068 7,531 105 (123) (3,945) 7,636 268 7,904
Share based
payment
credits - - - - (15) (15) - (15)
--------------------- --------- --------- ---------- --------- ---------- ---------- ------------- ---------
At 30 November
2013 4,068 7,531 105 (123) (3,960) 7,621 268 7,889
Total comprehensive
income - - - - (653) (653) 96 (557)
4,068 7,531 105 (123) (4,613) 6,968 364 7,332
Dividend
paid by
subsidiary - - - - - - (303) (303)
Share based
payment
costs - - - - 135 135 - 135
At 31 May
2014 4,068 7,531 105 (123) (4,478) 7,103 61 7,164
===================== ========= ========= ========== ========= ========== ========== ============= =========
Electric Word plc
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
At 31 May 2014 - unaudited
31 May 31 May 30 November
2014 2013 2013
Note GBP'000 GBP'000 GBP'000
-------------------------------------------------------- ------- -------- -------- -----------
ASSETS
Non-current assets
Goodwill 5,283 5,820 5,283
Other intangible assets 2,197 2,775 2,399
Property, plant and equipment 67 65 100
Deferred tax assets 1,650 1,169 1,547
-------------------------------------------------------- ------- -------- -------- -----------
9,197 9,829 9,329
-------------------------------------------------------- ------- -------- -------- -----------
Current Assets
Inventories 1,481 1,687 1,660
Trade and other receivables 3,150 2,964 3,449
Cash and cash equivalents 6 580 603 463
5,211 5,254 5,572
-------------------------------------------------------- ------- -------- -------- -----------
TOTAL ASSETS 14,408 15,083 14,901
======================================================== ======= ======== ======== ===========
EQUITY AND LIABILITIES
Capital and reserves
Called up ordinary share capital 4,068 4,068 4,068
Share premium account 7,531 7,531 7,531
Merger reserve 105 105 105
Reserve for own shares (123) (123) (123)
Retained earnings (4,478) (3,858) (3,960)
-------------------------------------------------------- ------- -------- -------- -----------
Equity attributable to equity holders of the parent 7,103 7,723 7,621
Non-controlling interest 61 195 268
-------------------------------------------------------- ------- -------- -------- -----------
TOTAL EQUITY 7,164 7,918 7,889
-------------------------------------------------------- ------- -------- -------- -----------
Non-current liabilities
Borrowings 6 353 475 350
Deferred tax liabilities 261 385 290
614 860 640
-------------------------------------------------------- ------- -------- -------- -----------
Current liabilities
Borrowings 6 316 125 125
Current tax liabilities 56 48 21
Trade payables and other liabilities 2,600 2,747 2,985
Provisions 7 49 103 127
Deferred income 3,609 3,282 3,114
6,630 6,305 6,372
-------------------------------------------------------- ------- -------- -------- -----------
TOTAL LIABILITIES 7,244 7,165 7,012
-------------------------------------------------------- ------- -------- -------- -----------
TOTAL EQUITY AND LIABILITIES 14,408 15,083 14,901
======================================================== ======= ======== ======== ===========
These financial statements were approved by the Board of Directors and are authorised for
issue on 29 August 2014.
Electric Word plc
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the period ended 31 May 2014 - unaudited
6 months 6 months Year ended
ended ended 30
31 May 31 May November
2014 2013 2013
Note GBP'000 GBP'000 GBP'000
--------------------------------------- ------ -------- -------- ----------
OPERATING ACTIVITIES
Loss for the period (557) (600) (614)
Taxation (40) (151) (590)
Amortisation & impairment
expense 350 439 1,596
Depreciation 46 66 112
Loss from disposal of property,
plant and equipment - - 3
Loss on disposal of intangible
assets - - 50
Loss on disposal of discontinued
operation 51
Finance costs 16 28 51
Finance income - - (6)
Share based payment charges
/ (credits) 135 (12) (27)
Operating cash flows before
movements in working capital 1 (230) 575
Decrease in inventories 131 (39) (12)
Decrease in receivables 299 (246) (731)
Increase in payables 53 772 869
--------------------------------------- ------ -------- -------- ----------
Cash inflow from operating
activities before interest
and tax 484 257 701
Interest paid (16) (26) (46)
Taxation paid (57) (63) (124)
Cash inflow from operating
activities 411 168 531
--------------------------------------- ------ -------- -------- ----------
investing activities
Deferred consideration paid - (75) (81)
Purchase of property, plant
and equipment (12) (7) (112)
Purchase of intangible assets (243) (242) (520)
Proceeds from disposal of
discontinued operation 70 - -
Proceeds from disposal of
property, plant and equipment - - 5
Interest received - - 6
Net cash used in investing
activities (185) (324) (702)
--------------------------------------- ------ -------- -------- ----------
financing activities
Proceeds from issuance of
ordinary shares - 151 151
Proceeds of new borrowings 6 200 - -
Repayment of borrowings 6 (6) (275) (400)
Payment of dividend to non-controlling
interest (303) (100) (100)
Net cash from financing
activities (109) (224) (349)
--------------------------------------- ------ -------- -------- ----------
Net INCREASE / (decrease)
in cash and cash equivalents 117 (380) (520)
Cash and cash equivalents
at the beginning of the
period 463 983 983
Cash and cash equivalents
at the end of the period 6 580 603 463
======================================= ====== ======== ======== ==========
Electric Word plc
NOTES TO THE INTERIM REPORT
For the period ended 31 May 2014 - unaudited
1 PRESENTATION OF INTERIM RESULTS
GENERAL INFORMATION
Electric Word plc (the "Company") is a company incorporated in
the United Kingdom. The unaudited condensed set of consolidated
financial statements as at May 2014 and for the six months then
ended comprise those of the Company and its subsidiaries (together
referred to as the "Group").
The information for the six months ended 31 May 2014 and the
comparative information for the six months ended 31 May 2013 are
not audited by the Group's auditors. The comparative figures for
the financial year ended 30 November 2013 are not the company's
statutory accounts for that financial year. Those accounts have
been reported on by the Company's auditors and delivered to the
registrar of companies. The report of the auditors 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. The
consolidated financial statements of the Group as at and for the
year ended 30 November 2013 are available upon request from the
Company's registered office at 1(st) Floor St Mark's House,
Shepherdess Walk, London N1 7LH or at www.electricwordplc.com.
The comparative information for the year to 30 November 2013 and
the six months ended 31 May 2013 included in the condensed
consolidated statements has been restated to reclassify the results
from the Sports Performance businesses as discontinued operations
following their disposal on 30 May 2013. Further details are given
in note 8.
ACCOUNTING POLICIES AND ESTIMATES
The financial statements have been prepared under the historical
cost convention and in accordance with International Financial
Reporting Standards ("IFRS") as adopted for use in the European
Union. The condensed set of consolidated financial statements
included in this interim report has been prepared in accordance
with International Accounting Standards 34 "Interim Financial
Reporting", as adopted by the European Union.
The accounting policies, presentation and methods of
computations applied by the Group in its consolidated financial
statements are consistent with those applied by the Group in its
consolidated financial statements for the year ended 30 November
2013.
The preparation of the condensed set of financial statements
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets and liabilities and income and expense. Actual
results may differ from these estimates.
In preparing these condensed set of consolidated financial
statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that were applied to
the consolidated financial statements as at and for the year ended
30 November 2013.
GOING CONCERN
The Group has a net current liability position as at 31 May 2014
at GBP1,419,000 (31 May 2013: GBP1,051,000 and 30 November 2013
GBP800,000). Excluding deferred revenues, the Group had net current
assets of GBP2,190,000 (31 May 2013: GBP2,231,000 and 30 November
2013 GBP2,314,000). The level of net debt at 31 May 2014 is
GBP89,000 (31 May 2013: Net funds of GBP3,000; 30 November 2013:
Net debt of GBP12,000). The Directors have prepared group cash flow
forecasts for the period ending 30 November 2015. These forecasts
indicate that the Group will continue to meet its liabilities and
bank debt requirements as they fall due for the foreseeable future.
The Directors also prepare a rolling 12-month cash flow forecast
each month to monitor the Group's expected cash balances. In the
event of forecast trading levels not being met, the Directors have
the scope to take further actions to enable the group to meet its
liabilities as they fall due for the foreseeable future and for it
to remain within its financial covenants. There is long-term
financing in place and the Group currently has an overdraft
facility of up to GBP750,000 which is currently not utilised. On
this basis the Directors believe that it remains appropriate to
prepare the financial statements on a going concern basis.
Electric Word plc
NOTES TO THE INTERIM REPORT
For the period ended 31 May 2014 - unaudited
2 SEGMENTAL INFORMATION
Segmental information is presented in respect of the Group's
business divisions. This format is based on the Group's management
and internal reporting structure, as reviewed by the Board in its
financial information used in allocating resources and making
strategic decisions.
The format consists of three market sectors and a central
function:
-- Education (E): provides management and professional
development information to school leaders;
-- Health (H): provides professional education and training
products for doctors and healthcare managers, speech therapists
elderly care and other health professionals;
-- Sport & Gaming (S&G): provides insight, data,
analysis and live events to the business communities behind the
sport and online gaming industries, including their marketing
affiliates; and
-- Central costs (PLC): the group function represents central
PLC costs which are not directly related to the sector trading and
are not recharged. Finance costs and investment income are also
included here as these are driven by central policy which manages
the cash positions across the Group.
The sector analysis includes the adjusted definition of
operating profit (note 3) to allow shareholders to gain a further
understanding of the trading performance of the Group and is
considered by the Board alongside operating profit and profit
before tax to assess performance and review strategy.
Analysis Six months ended 31 Six months ended 31
by market May 2014 May 2013 - Restated
sector -
continuing
E H S&G PLC Total E H S&G PLC Total
operations GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------- -------- -------- -------- -------- -------- -------- -------- -------- -------- --------
Revenue 2,029 1,657 3,155 - 6,841 2,209 1,838 2,430 - 6,477
Adjusted
operating
profit (note
3) (243) (135) 719 (312) 29 (282) 37 265 (340) (320)
Share based
payment
credits
/ (charges) - - - (135) (135) - - - 12 12
Restructuring
costs - - 6 - 6 - - - (14) (14)
Acquisition-related
credits - - - - - - 44 - - 44
Amortisation
of intangible
assets (135) (94) (96) (25) (350) (137) (87) (188) (27) (439)
Operating
(loss) /
profit (378) (229) 629 (472) (450) (419) (6) 77 (369) (717)
Finance
costs - - - (16) (16) - - - (28) (28)
(Loss) /
profit before
tax (378) (229) 629 (488) (466) (419) (6) 77 (397) (745)
===================== ======== ======== ======== ======== ======== ======== ======== ======== ======== ========
Electric Word plc
NOTES TO THE INTERIM REPORT
For the period ended 31 May 2014 - unaudited
2 SEGMENTAL INFORMATION (continued)
Analysis Year ended 30
by market November 2013
sector -continuing Restated
operations
E H S&G PLC Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- -------- -------- -------- -------- --------
Revenue 4,568 3,612 6,152 - 14,332
Adjusted operating
(loss) / profit (note
3) (155) 105 1,439 (740) 649
Share based payment
credits - - - 27 27
Restructuring costs (65) (167) (18) (50) (300)
Acquisition-related
credits - 144 - - 144
Amortisation of intangible
assets (116) (347) (405) (54) (922)
Impairment expense (37) (637) - - (674)
Operating
(loss) / profit (373) (902) 1,016 (817) (1,076)
Finance costs - - - (51) (51)
Investment
income - - - 6 6
(Loss) / profit
before tax (373) (902) 1,016 (862) (1,121)
============================ ======== ======== ======== ======== ========
3 ADJUSTED PROFITS
The adjusted profits have been prepared to allow shareholders to
gain a further understanding of the trading performance of the
Group. Profits are adjusted for items not perceived by management
to be part of the underlying trends in the business and the related
tax effect of those items. The adjustments add back items which
have no cash impact or that are both not trade related and of a
non-recurring type.
Electric Word plc
NOTES TO THE INTERIM REPORT
For the period ended 31 May 2014 - unaudited
3 ADJUSTED PROFITS (continued)
6 months 6 months Year ended
ended ended 30 November
31 May 31 May 2013
2014 2013 GBP'000
GBP'000 GBP'000 Restated
Restated
-------------------------------------------------- -------- --------- ------------
Operating loss for the period from continuing
operations (450) (717) (1,076)
-------------------------------------------------- -------- --------- ------------
Amortisation of intangible assets 350 439 922
Impairment expense - - 674
Acquisition-related credits - (44) (144)
Restructuring (credits) and costs (6) 14 300
Share based payment charges / (credits) 135 (12) (27)
-------------------------------------------------- -------- --------- ------------
Adjusting items to operating profit 479 397 1,725
Adjusted operating profit / (loss) for the
period (Adjusted EBITA) 29 (320) 649
Depreciation 45 63 108
-------------------------------------------------- -------- --------- ------------
Adjusted earnings before interest, tax,
depreciation and amortisation for the period 74 (257) 757
================================================== ======== ========= ============
Loss before tax for the period from continuing
operations (466) (745) (1,121)
-------------------------------------------------- -------- --------- ------------
Adjusting items to operating profit 479 397 1,725
-------------------------------------------------- -------- --------- ------------
Adjusting items to profit before tax 479 397 1,725
Adjusted profit / (loss) before tax for
the period 13 (348) 604
================================================== ======== ========= ============
Loss for the period attributable to equity
holders of the parent (653) (646) (733)
Add back discontinued activities 131 (1) 102
-------------------------------------------------- -------- --------- ------------
Loss for the period attributable to equity
holders of the parent from continuing operations (522) (647) (631)
Adjusting items to profit before tax 479 397 1,725
Attributable tax expense on adjusting items 1 (4) (216)
Exclude movements on deferred tax assets
and liabilities taken to income statement (132) (181) (674)
-------------------------------------------------- -------- --------- ------------
Adjusting items to profit for the year 348 212 835
Adjusted (loss) / profit for the period (174) (435) 204
================================================== ======== ========= ============
4 TAXATION
Income tax expense has been calculated based on management's
best estimate of the weighted average annual income tax rate
expected for the year ending 30 November 2014.
Electric Word plc
NOTES TO THE INTERIM REPORT
For the period ended 31 May 2014 - unaudited
5 EARNINGS PER SHARE
The calculation of earnings per ordinary share is based on the
following:
6 months 6 months Year
ended ended ended
31 May 31 May 30 November
2014 2013 2013
Number Number Number
--------------------------------- ------------- ------------- ----------------------------------
Weighted average number
of shares 406,781,838 399,977,442 403,388,961
Adjustment in respect
of SIP shares (816,038) (987,765) (967,283)
--------------------------------- ------------- ------------- ----------------------------------
Weighted average number
of shares used in basic
earnings per share calculations 405,965,800 398,989,677 402,421,678
Dilutive effect of share
options 14,529,813 1,678,487 1,860,095
Weighted average number
of shares used in diluted
earnings per share calculations 420,495,613 400,668,164 404,281,773
================================= ============= ============= ==================================
6 months 6 months Year
ended ended ended
31 May 31 May 30 November
2014 2013 2013
Note GBP'000 GBP'000 GBP'000
Restated Restated
---------------------------------------------------------- ------ -------- --------- ------------
Loss for the period from
continuing and discontinued
operations attributable
to equity shareholders (653) (646) (733)
Loss from discontinued
operations 131 (1) 102
---------------------------------------------------------- ------ -------- --------- ------------
Loss for the period from
continuing operations
attributable to equity
shareholders
Adjustment to earnings (522) (647) (631)
3 348 212 835
---------------------------------------------------------- ------ -------- --------- ------------
Adjusted (loss) / profit
from continuing operations
attributable to equity
shareholders (174) (435) 204
========================================================== ====== ======== ========= ============
Loss per share from continuing
and discontinued operations
* Basic loss per share (0.16)p (0.16)p (0.18)p
========================================================== ====== ======== ========= ============
* Diluted loss per share (0.16)p (0.16)p (0.18)p
========================================================== ====== ======== ========= ============
Loss per share from continuing
operations
* Basic loss per share (0.13)p (0.16)p (0.16)p
========================================================== ====== ======== ========= ============
* Diluted loss per share (0.12)p (0.16)p (0.16)p
========================================================== ====== ======== ========= ============
Adjusted loss per share
* Adjusted basic (loss) / earnings per share (0.04)p (0.11)p 0.05p
========================================================== ====== ======== ========= ============
* Adjusted diluted (loss) / earnings per share (0.04)p (0.11)p 0.05p
========================================================== ====== ======== ========= ============
Electric Word plc
NOTES TO THE INTERIM REPORT
For the period ended 31 May 2014 - unaudited
6 ANALYSIS OF NET DEBT
Bank net debt
At 1 December Non-cash At 31 May
2013 Cash flow changes 2014
GBP'000 GBP'000 GBP'000 GBP'000
---------------------- ------------- ----------- -------- ---------
Cash at bank and
in hand 463 117 - 580
Overdraft - - - -
---------------------- ------------- ----------- -------- ---------
Net cash 463 117 - 580
---------------------- ------------- ----------- -------- ---------
Bank loans due within
one year (125) (66) (125) (316)
Debt due within
one year (125) (66) (125) (316)
---------------------- ------------- ----------- -------- ---------
Bank loans due after
one year (350) (128) 125 (353)
---------------------- ------------- ----------- -------- ---------
Debt due after one
year (350) (128) 125 (353)
Gross debt (475) (194) - (669)
---------------------- ------------- ----------- -------- ---------
Net debt (12) (77) - (89)
====================== ============= =========== ======== =========
In April 2014, the Group drew down a new loan of GBP200,000
which is repayable over 36 monthly instalments ending in May 2017.
Interest is payable at 4.73% over the lending bank's base rate. One
repayment has been made in the reporting period.
Non-cash changes reflect the timing of repayments due under a
GBP475,000 term loan facility which is repayable over 2 years
ending in May 2016. Interest on this loan is payable at 4.25% over
LIBOR.
The Group also has an overdraft facility of GBP750,000 which,
when utilised, is repayable on demand and charges an effective
interest rate of 2.25% over the lending Bank's base rate.
7 PROVISIONS
Provisions
GBP'000
---------------------- ----------
At 1 December 2012 220
Utilised in period (75)
Release in period (44)
Unwinding of discount 2
-------------------------- ----------
At 31 May 2013 103
Increase in year 127
Utilised in period (6)
Release in period (100)
Unwinding of discount 3
-------------------------- ----------
At 30 November 2013 127
Utilisation in period (78)
-------------------------- ----------
At 31 May 2014 49
========================== ==========
Electric Word plc
NOTES TO THE INTERIM REPORT
For the period ended 31 May 2014 - unaudited
7 PROVISIONS (continued)
At 30 November 2012, a provision of GBP50,000 was held to
reflect an expected payment due in 2013 related to the 2010
acquisition of Radcliffe Publishing Limited. During 2013, the final
amount payable was confirmed at GBP6,000 and this was paid to the
vendors. The remaining GBP44,000 provision release was reflected in
acquisition-related credits in the income statement.
At 30 November 2012, provisions of GBP175,000 less GBP5,000
notional interest were held to reflect expected payments in 2013
and 2014 related to the 2011 acquisition of Radcliffe Solutions
Limited. The January 2013 provision of GBP75,000 was paid out in
full in 2013, and the remaining provision of GBP100,000 was
released on the basis of Radcliffe Solutions' 2013 results. This
was reflected in acquisition-related credits in the income
statement.
New provisions of GBP127,000 were made in 2013 to reflect
anticipated costs arising from the closure of the Milton Keynes
office and wind-down of the Incentive Plus business. Of these,
GBP78,000 have been utilised in the period to 31 May 2014.
8 DISCONTINUED OPERATIONS AND DISPOSALS
On 30 May 2014, the Group disposed of the Sports Performance
businesses operated through its subsidiary P2P Publishing Ltd for
cash consideration of GBP70,000. The disposal was effected as the
businesses were considered non-core to the Group's strategy. These
businesses were included within the Health reportable segment. The
table below sets out the aggregate effect of the disposals on the
Group's assets and liabilities.
6 months
ended
31 May
2014
GBP'000
---------------------------- --------
Non-current assets
Intangible assets 94
Current assets
Stock 48
Current liabilities
Deferred income (21)
---------------------------- --------
Net assets disposed of 121
Loss on disposal included
in discontinued operations (51)
---------------------------- --------
Total cash consideration 70
============================ ========
Electric Word plc
NOTES TO THE INTERIM REPORT
For the period ended 31 May 2014 - unaudited
8 DISCONTINUED OPERATIONS AND DISPOSALS (continued)
The results of the discontinued operations, which have been
included in the Condensed Consolidated Statement of Comprehensive
Income and Condensed Consolidated Cash Flow Statement, are set out
below.
6 months 6 months Year
ended ended ended
31 May 31 May 30 November
2014 2013 2013
GBP'000 GBP'000 GBP'000
--------------------------------------- --------- --------- -------------
Revenue 76 176 303
Expenses (157) (182) (386)
--------------------------------------- --------- --------- -------------
Loss before tax (80) (6) (83)
Attributable tax credit / (charge) - 7 (19)
--------------------------------------- --------- --------- -------------
(80) 1 (102)
Loss on disposal of operation (51) - -
--------------------------------------- --------- --------- -------------
Loss for the period from discontinued
operations (131) 1 (102)
======================================= ========= ========= =============
Cash flows from discontinued 6 months 6 months Year
operations ended ended ended
31 May 31 May 30 November
2014 2013 2013
GBP'000 GBP'000 GBP'000
------------------------------- --------- --------- -------------
Net cash (outflows) / inflows
from operating activities (101) (24) 61
Net cash inflows / (outflows)
from investing activities 70 (3) 3
------------------------------- --------- --------- -------------
Net cash (outflows) / inflows (31) (27) 64
=============================== ========= ========= =============
Notes to Editors
Electric Word plc is a specialist media group supporting
professional development, compliance and management effectiveness
through a wide range of digital, paper and live formats. Our
approach is to identify niche communities within our market sectors
and fulfil our customers' key information needs to enable them to
do their jobs better and develop their careers.
We provide information, services and decision-critical data that
help our customers to achieve their key personal and organisational
objectives. We achieve this by developing a deep understanding of
our sectors and our customers' challenges and information
requirements.
The Group provides content in many different formats, including
subscription websites, journals, magazines, events, face-to-face
training, online training, books, special reports, bespoke research
and consultancy. Competencies developed in one sector can be
transferred to another as opportunities arise.
The Group is composed of three market-facing divisions:
Sport & Gaming
This division provides business insight, data, analysis and live
events to professionals in the global businesses of sport and
online gaming. SportBusiness Group publishes for sports industry
professionals who work in governing bodies, the media, sports
marketing, sponsorship and club and event management. iGaming
Business publishes to both the online gaming industry itself and
its marketing affiliates, providing this global and fast-growing
industry with business-critical information and marketing
support.
Education
The Education division provides management and professional
development information to leaders in schools and other education
professionals. Optimus Education comprises an online subscription
service and a wide range of conferences, supplemented by books and
training resources.
Health
The Health division provides professional education and training
products for doctors, healthcare managers, speech therapists,
elderly care and other health professionals through the Radcliffe
and Speechmark brands.
Radcliffe Publishing publishes books and other associated
products to support the education and professional development of
doctors, managers and professions allied to health. Speechmark
Publishing specialises in resources for speech therapists, special
needs co-ordinators and teachers, care workers and mental health
professionals. The Radcliffe Solutions workforce management
software enables online management and compliance reporting of
appraisals, training and professional development.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DVLFLZVFLBBD
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