Final Results
07 12월 2006 - 10:00PM
UK Regulatory
RNS Number:4546N
Net b2b2 PLC
07 December 2006
7 December 2006
Netb2b2 plc
Preliminary results for the year ended 30 June 2006
Netb2b2 plc ("Netb2b2" or "the Group"), the digital communications business,
today announces its preliminary results for the year ended 30 June 2006.
Financial and business highlights:
*Turnover increased by 4.5% to #6.6 million (2005: #6.3 million)
*Group operating loss before exceptionals of #158,000 (2005: profit of
#132,000)
*Group loss after tax of #316,000 (2005: profit of #114,000)
*Loss per share of 5.4p (2005: profit of 2.3p)
*Cash on group balance sheet #121,000 (2005: #571,000)
*Strategic Review completed with new focus on Media and Entertainment
*Major new clients secured including Royal National Institute of the
Blind, Royal Institute for Chartered Surveyors and Ministry of Sound
Keith Young, Chairman of Netb2b2, commented:
"Following the changes introduced earlier in the summer, current trading is
beginning to improve, boosted by some prestigious recent new contract wins
secured by cScape, Blue Sky Hosting and Fernhart New Media. We are confident
that by focusing more closely on Media and Entertainment, the trading momentum
currently achieved will enhance the Group's profitability this year, and create
a far stronger base going forward."
Enquiries, please contact:
Andrew Gannon Neil Boom
Netb2b2 PLC Gresham PR Ltd.
020 7689 8800 020 7404 9000
Chairman's statement
This year, parts of the business made progress, particularly in terms of winning
prestigious new clients and increased focus, while other parts experienced some
frustrating delays. In short, 2006 can best be characterised as a year of
transition and building for the future.
To drive the transition, the directors conducted a Strategic Review of the
Group's entire portfolio of companies. This root and branch examination of all
parts of the Group was aimed at identifying the right commercial structure that
could take best advantage of realistic commercial opportunities in digital media
for a company of our size.
The main conclusion of the Review was that we should focus our offer more
sharply on the Media and Entertainment markets. We have the benefit of already
working in these fast-growing markets, serving blue chip clients including ITV,
BBC, ITN and Sky, particularly through Fernhart New Media, our most recently
acquired subsidiary. We have also identified other relevant media business
opportunities in the Media and Entertainment space, including projects related
to the forthcoming release of VISTA, Microsoft's new Windows operating system
and have recruited a respected person from the gaming industry.
Our track record and profile in streaming, interactive media and digital
television gives us a strong platform from which to build further. We are
particularly proud of our client retention and satisfaction rates, which we
believe are higher than industry averages.
Moving forward, we see the best opportunities as ones that lever the combined
skills and experience of the Group companies, using our existing experience and
increasingly strong position in digital media to gain new clients. This will be
supplemented by combining forces, particularly between our long standing Group
companies and Fernhart New Media, to cross-sell our new media offer more
systematically. Another key Group objective for this trading year and beyond is
to increase our recurring revenue streams. One of the best ways of achieving a
recurring revenue base is by licensing the intellectual property to the client,
which is invoiced on an annual basis.
We believe much of the new turnover can be delivered without exposing Netb2b2 to
the costs or risks inherent in attempting to make a major acquisition at this
stage. Smaller acquisitions, of either small companies, teams of key people or
particular items of technology, are still part of the board's strategic
thinking.
One of the most pleasing outcomes of the Review was that it indicated how we
could substantially reduce Group overheads by reducing complexity of structure
and leveraging capabilities between the holding and operating companies.
Financial and operational review
Group turnover improved slightly, rising 4.5% to #6.6 million (2005: #6.3m). The
Group recorded a full year loss after tax of #316,000 compared with a profit of
#114,000 in 2005. This is in the main attributable to a non-recurring
exceptional item of #170,000 in respect of pension settlement costs relating to
a former subsidiary and other costs of discontinuance, and to unexpected delays
by customers in committing to new contracts as reported to shareholders on 28
July 2006. Our cash position at the period end of #121,000 (2005: #571,000) is
considered satisfactory and our underlying cash flow is expected to improve as
we reduce overheads and increase revenues from new contracts won. It also
reflects maintained investment in technology and key personnel in order to
deliver our goal of achieving greater critical mass in the digital world.
Operationally, there were some impressive new business wins across most of the
businesses and some attractive new services added. cScape, our largest
subsidiary, has recently launched a new Customer Engagement Unit to create a
highly engaging web experience for its clients, which it sees as a core element
in its goal to become a full service provider.
In terms of high profile clients, we are particularly pleased that cScape
secured a major new contract to completely revamp the Royal National Institute
of the Blind's ("RNIB") online presence and eCommerce capabilities in a contract
valued at around #438,000. The RNIB site has been relaunched successfully and
users have commented positively on its new look and additional functionality.
cScape also secured a contract from youth record label Hed Kandi, part of the
Ministry of Sound music group. The contract is for cScape to redevelop its site
in Microsoft's new Office SharePoint Server 2007TM - the first live
implementation of this product in the world.
Fernhart New Media also recorded some impressive new contracts, including
helping create a new online service for the Royal Institute for Chartered
Surveyors (RICS) that enables anyone requiring the services of a chartered
surveyor to find one at the right price and location. ITM Graphics also won a
very pleasing contract with Dalton's Weekly.
Outlook
Following the changes introduced earlier in the summer, current trading is
beginning to improve, boosted by some prestigious recent new contract wins
secured by cScape, Blue Sky Hosting and Fernhart New Media. We are confident
that by focusing more closely on Media and Entertainment, the trading momentum
currently achieved will enhance the Group's profitability this year and create a
far stronger base going forward.
Keith Young
Chairman
7 December 2006
GROUP PROFIT & LOSS ACCOUNT
Year ended 30 June 2006
Note Year Year
ended ended
30 June 30 June
2006 2005
#000 #000
TURNOVER 6,590 6,303
Cost of sales (1,614) (1,846)
----- -----
GROSS PROFIT 4,976 4,457
----- -----
Administrative expenses before exceptional item (5,134) (4,325)
Operating exceptional item (20) (18)
----- -----
Administrative expenses (5,154) (4,343)
----- -----
OPERATING (LOSS)/PROFIT
Before exceptional item (158) 132
Operating exceptional item (20) (18)
----- -----
Total operating (loss)/profit (178) 114
----- -----
Interest payable and similar charges (27) (19)
Interest receivable and similar income 1 -
----- -----
(LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION (204) 95
Non-operating exceptional item
Cost of discontinuance of business and settlement of
pension liabilities 3 (170) -
Surplus arising on discontinued activity 3 58 -
----- -----
(112) -
Tax on (loss)/profit on ordinary activities - 19
----- -----
(LOSS)/PROFIT FOR THE FINANCIAL YEAR (316) 114
===== =====
(LOSS)/PROFIT PER SHARE (PENCE) 4 (5.4p) 2.3p
===== =====
All turnover and results arose from continuing operations apart from the
non-operating exceptional items which relate to the closure of discontinued
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.
GROUP BALANCE SHEET
As at 30 June 2006
30 June 2006 30 June 2005
Note #000 #000 #000 #000
FIXED ASSETS
Intangible assets 2,438 1,887
Tangible assets 570 416
----- -----
3,008 2,303
CURRENT ASSETS
Stocks 141 98
Debtors 1,398 1,231
Cash at bank 121 571
----- -----
1,660 1,900
CREDITORS: amounts falling due (2,405) (2,172)
within one year ----- -----
NET CURRENT LIABILITIES (745) (272)
----- -----
CREDITORS: amounts falling due (112) -
after one year ----- -----
TOTAL ASSETS LESS CURRENT 2,151 2,031
LIABILITIES ===== =====
CAPITAL AND RESERVES
Called up share capital 606 523
Share premium 553 200
Capital redemption reserve 6 6
Profit and loss account 986 1,302
----- -----
EQUITY SHAREHOLDERS' FUNDS 2,151 2,031
===== =====
GROUP CASHFLOW STATEMENT
Year ended 30 June 2006
Note Year ended Year ended
30 June 30 June
2006 2005
#000 #000
Net cash (outflow)/inflow from operating
activities 5 (296) 234
Returns on investments and servicing of
finance (26) (19)
Capital expenditure (336) (169)
Acquisitions (200) -
--- ----
Net cash (outflow)/inflow before financing (858) 46
Financing 537 (85)
--- ---
Decrease in cash in the year (321) (39)
=== ===
Reconciliation of net cash flow to movement in net
funds
Decrease in cash in the year 6 (321) (39)
Decrease/(increase) in debt and lease
financing (476) 301
--- ---
Movement in net funds in the year (797) 262
Net funds/(debt) at start of year 268 6
--- ---
Net (debt)/funds at end of year 6 (529) 268
=== ===
Notes:
1. FINANCIAL INFORMATION
The unaudited financial information set out above does not constitute statutory
accounts within the meaning of section 240 of the Companies Act 1985. Statutory
accounts for the year ended 30 June 2006 will be finalised based on the
information in this preliminary announcement and will be delivered to the
Registrar of Companies in due course. The accounts for the year ended 30 June
2005, which received an unqualified auditor's report, have been filed with the
Registrar of Companies.
2. SEGMENTAL INFORMATION
The Group operates in the UK and the whole of its turnover is in the UK market.
Turnover Operating
(Loss)/Profit
2006 2005 2006 2005
#000 #000 #000 #000
Internet services 3,464 3,316 235 331
Publishing and digital communication
services 1,945 2,307 46 112
Specialist hosting 668 671 151 204
Media and interactive technology 503 - (16) -
Central and other costs 10 9 (574) (515)
Exceptional item - - (20) (18)
----- ----- --- ---
Group 6,590 6,303 (178) 114
===== ===== === ===
(Loss)/Profit Net assets
after tax
2006 2005 2006 2005
#000 #000 #000 #000
Internet services 228 330 476 642
Publishing and digital communication
services 30 97 (439) (292)
Specialist hosting 149 202 33 24
Media and interactive technology (18) - (1) -
Central and other costs (573) (516) 2,082 1,657
Exceptional item (132) (18) - -
--- --- ----- -----
Group (316) 95 2,151 2,031
=== === ===== =====
3. EXCEPTIONAL ITEMS
A net charge of #170,000 has been made in 2006 in respect of the closure of the
Typematters (London) Limited business in the year ended 30 June 2005, which
relates primarily to the settlement of pension liabilities. A surplus of #58,000
arose during the year as a result of the liquidation of a non-trading subsidiary
of the group.
4. (LOSS)/ PROFIT PER ORDINARY SHARE
Basic (loss)/ profit per share is calculated by dividing the (loss)/ profit
attributable to ordinary shareholders by the weighted average number of ordinary
shares during the year.
The diluted (loss)/ profit per share is the same as the actual (loss)/ profit
per share.
Year ended Year ended
30 June 2006 30 June 2005
Basic earnings attributable to ordinary
shareholders: #000 (316) 114
========= =========
Weighted average number of ordinary shares 5,846,909 4,911,048
========= =========
(Loss) /profit per share: (5.4p) 2.3p
========= =========
5. RECONCILIATION OF OPERATING (LOSS)/ PROFIT TO NET CASH (OUTFLOW)/
INFLOW FROM OPERATING ACTIVITIES
2006 2005
#000 #000
Operating (loss)/ profit (178) 114
Exceptional item (112) -
Depreciation 147 140
Loss on disposal/write off of tangible fixed assets 74 -
(Increase) in stocks (43) (19)
(Increase) in debtors (71) (126)
(Decrease)Increase in creditors (113) 125
--- ---
Net cash (outflow)/inflow from operating activities (296) 234
=== ===
6. ANALYSIS OF CHANGES IN NET (DEBT)/ FUNDS
At 1 July Cash At 30 June
2005 flow 2006
#000 #000 #000
Net cash
Cash at bank and in hand 571 (450) 121
Bank overdrafts (270) 129 (141)
--- --- ---
301 (321) (20)
--- --- ---
Debt
Bank loan (invoice discounting) - (333) (333)
Hire purchase agreements (33) (143) (176)
--- --- ---
Total 268 (797) (529)
=== === ===
7. ACCOUNTING FOR GOODWILL
The board has assessed each subsidiary with reference to its durability, ability
to sustain future long term profitability and assessed ability to maintain
market position. Based on this assessment the board is of the opinion that the
goodwill elements have indefinite economic lives. The board has carried out
impairment reviews on these goodwill elements and has concluded that their
current recoverable amounts are in excess of their carrying values.
8. COPIES OF PRELIMINARY STATEMENT
Copies of this announcement are available from www.netb2b2.com or the company
secretary at 4th Floor Central House, 142 Central Street, London, EC1V 8AR.
Copies of the Annual Report and Accounts of the Company for the year ended 30
June 2006 will be sent to shareholders in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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