TIDMWFCA
RNS Number : 2447H
WFCA PLC
09 July 2012
9 July 2012
WFCA plc
("WFCA", "the Company" or "the Group")
Preliminary Results for the Period Ended 30 April 2012
WFCA plc (AIM: WFCA.L), a leading regional advertising and
marketing agency, today announces its final results for the 10
months to 30 April 2012.
Financial Summary
-- Net loss before tax and exceptional items of GBP400,370 (FY2011: Loss of GBP189,427);
-- Revenue of GBP4m (FY2011: GBP11.1m)
-- Gross Margin increased to 41.0% (FY2011: 25.0%);
-- Group net assets of GBP2.4 million (FY2011: GBP8.9 million); and
-- Long term debt of GBP950,000 (FY2011: GBP662,500).
Further enquiries:
WFCA plc
Stephen Latter, Financial Director Tel: 01892 703 201
Daniel Stewart & Company plc
David Hart & James Felix Tel: 020 7776 6550
Chairman's Statement
BUSINESS REVIEW AND SUMMARY
Since publication of our interim result we have suffered further
deterioration in revenue generation from our existing client base
and as a result we have incurred a net loss of GBP400,370 before
taxation and exceptional items of GBP6,196,387 for the ten month
period ended 30(th) April 2012. The result compares to a loss of
GBP189,427 for the twelve month period ended 30(th) June 2011. The
underlying reason for the disappointing result was further
marketing budget cut backs across our client base.
In reaction to the continued difficult trading conditions
described above and its impact on financial performance, the board
decided to realign the company's goodwill to a value commensurate
with current trading necessitating an impairment of GBP6,162,246 to
that reported in the interim statement. As this impairment has a
very significant impact on the results, the board has accelerated
the company's financial reporting date to April 30(th) .
Despite the poor result, the Group has had a successful period
in winning new business. New clients won in the period included
Acorn Stairlifts, Theraposture, Stayhome Stairlifts, Credit Fix,
Homecare, Moorfields and Unibet. These clients should bring income
growth to the Group in the new financial year and in conjunction
with cost reductions, assist in a return to profitability.
During the year the Group completed the acquisition of Williams
Blake Reay Limited "WBR", a strategic move that has allowed it to
expand its service offering into the pharmaceutical sector. Full
details of this acquisition were provided in the Chairman's
Statement recorded in the annual report for the year ended 30(th)
June 2011. WBR has been fully integrated into the wider Group
infrastructure to maximise cost efficiencies and to enhance cross
Group cooperation.
As at the date of release of this Chairman's Statement, the
Group is in dialogue with a series of potential strategic
opportunities and anticipates releasing further information in due
course.
FINANCIAL SUMMARY
While there are clear limitations when making financial
comparisons between different length trading periods, turnover in
the reported ten month period valued GBP4,031,365 compared to
GBP11,145,221 for the year ended 30(th) June 2011 and gross profit
decreased to GBP1,667,429 from GBP2,782,685 for the respective
periods. Gross margin however, where direct comparison can still be
made, increased from 25% to 41% reflecting the continued movement
towards non media related services within the Group. The Group is
however, actively looking to improve its media division and are
pleased to say that a high proportion of our recent new business
wins have been media biased clients.
The Group has traditionally reacted quickly to adverse movements
in gross profit and sought to reduce operating costs while not
impairing service levels or longer term growth opportunities as
they arise. Overheads reduced to GBP1,993,774 for the ten month
period compared to GBP2,844,067 for the previous twelve month
period and underlying overheads were reduced by GBP360,000 per
annum during the ten month financial period.
Exceptional costs are dominated by the goodwill impairment
referred to above. The balance relates to severance costs connected
to the operational restructuring, offset by a significant on-going
collection of a bad debt written off in the previous financial
year.
The working capital of the company reduced to GBP153,373 at the
30(th) April 2012 from GBP573,351 as at the 30(th) June 2011.
OUTLOOK
Despite the disappointing result for the period the Group did
grow its new business with the acquisition of WBR creating a more
balanced client base. The board expects trading to remain
difficult.
We thank all our staff for their continued support and hard work
through a very challenging trading period.
Group Income Statement
10 months Year
to Ended
30th 30th
April June
Notes 2012 2011
Before
Exceptional Exceptional
Items Items
GBP GBP GBP GBP
Revenue 1 4,031,365 - 4,031,365 11,145,221
Direct Costs (2,363,936) - (2,363,936) (8,362,536)
Gross Profit 1,667,429 - 1,667,429 2,782,685
Operating Costs
before Share Option
charge (1,993,774) (6,196,387) (8,190,162) (3,247,455)
Share Option Charge (2,119) - (2,119) (4,992)
-------------------------------- ------------ ------------ ------------ ------------
Total Operating
Costs (1,995,893) (6,196,387) (8,192,281) (3,252,447)
Depreciation (22,339) - (22,339) (53,936)
Operating Loss (350,803) (6,196,387) (6,547,191) (523,698)
Net Finance
Costs 3 (49,567) - (49,567) (69,117)
Loss before
Tax (400,370) (6,196,387) (6,596,758) (592,815)
Income Tax
(credit) /
charge 6 71,113 - 71,113 83,806
Loss before
Discontinued
Operations (329,257) (6,196,387) (6,525,645) (509,009)
Loss from Discontinued
Operations - - (3,569)
Loss for the year
attributable to
Equity Holders of
the Parent (329,257) (6,196,387) (6,525,645) (512,578)
============ ============ ============ ============
EARNINGS PER
SHARE
Basic Earnings
Per Share 13 (1.46)p (0.17)p
Diluted Earnings
Per Share 13 (1.41)p (0.16)p
No Group Statement of Comprehensive Income has
been prepared because there were no material gains
or losses for the year other than those recognised
in the Income Statement.
Group and Company Balance Sheets
GROUP COMPANY
Notes 2012 2011 2012 2011
GBP GBP GBP GBP
NON CURRENT ASSETS
Property, Plant
and Equipment 7 70,533 92,872 - -
Goodwill 8 2,598,078 8,497,907 - -
Investment in
Subsidiaries 8 - - 3,981,023 10,100,509
Corporate Income
Tax recoverable 9 536,773 423,509 392,087 350,233
3,205,384 9,014,288 4,373,110 10,450,742
============ =========== ============ ===========
CURRENT ASSETS
Trade and Other
Receivables 9 963,903 862,187 397,077 169,420
Cash and Short
Term Deposits 609,642 704,217 848 717
Assets Held for
Sale - 142,000 - 142,000
1,573,545 1,708,404 397,925 312,137
============ =========== ============ ===========
TOTAL ASSETS 4,778,929 10,722,692 4,771,035 10,762,879
============ =========== ============ ===========
ISSUED CAPITAL
AND RESERVES
Issued Share
Capital 12 4,468,160 4,459,660 4,468,160 4,459,660
Share Premium 15 1,331,350 1,332,706 1,331,350 1,332,706
Retained Earnings 16 (3,390,753) 3,132,773 (3,446,962) 2,921,439
TOTAL EQUITY 2,408,757 8,925,139 2,352,548 8,713,805
============ =========== ============ ===========
NON CURRENT LIABILITIES
Long Term Borrowings 18 950,000 662,500 300,000 -
950,000 662,500 300,000 -
============ =========== ============ ===========
CURRENT LIABILITIES
Trade and Other
Payables 17 1,347,395 1,135,045 2,118,487 2,049,074
Provisions for
liabilities and
charges 21 72,777 - - -
Corporate Income
Tax Payable - 8 - -
1,420,172 1,135,053 2,118,487 2,049,074
============ =========== ============ ===========
TOTAL EQUITY AND
LIABILITIES 4,778,929 10,722,692 4,771,035 10,762,879
============ =========== ============ ===========
Group and Company Statement of Changes in Equity
Issued
Share Share Retained Total
Capital Premium Earnings Equity
GROUP GBP GBP GBP GBP
Balance
at 1st July 2010 2,684,660 1,434,398 3,640,359 7,759,417
Loss for
the year - - (512,578) (512,578)
Share Option
charge - - 4,992 4,992
Issue of Share
Capital 1,775,000 (101,692) - 1,673,308
Balance
at 30th June 2011 4,459,660 1,332,706 3,132,773 8,925,139
Loss for
the year - - (6,525,645) (6,525,645)
Issue of Share
Capital 8,500 (1,356) - 7,144
Share Option
charge - - 2,119 2,119
Balance 30th April
at 2012 4,468,160 1,331,350 (3,390,753) 2,408,757
========== ========== ============ ============
Issued
Share Share Retained Total
Capital Premium Earnings Equity
COMPANY GBP GBP GBP GBP
Balance
at 1st July 2010 2,684,660 1,434,398 2,942,890 7,061,948
Loss for
the year - - (26,443) (26,443)
Share Option
charge - - 4,992 4,992
Issue of Share
Capital 1,775,000 (101,692) - 1,673,308
Balance
at 30th June 2011 4,459,660 1,332,706 2,921,439 8,713,805
Loss for
the year - - (6,370,520) (6,370,520)
Issue of Share
Capital 8,500 (1,356) - 7,144
Share Option
charge - - 2,119 2,119
Balance 30th April
at 2012 4,468,160 1,331,350 (3,446,962) 2,352,548
========== ========== ============ ============
Group and Company Cash Flow Statement
GROUP COMPANY
2012 2011 2012 2011
GBP GBP GBP GBP
Cash Flows from Operating
Activities
(Loss) / Profit from
Operations (6,596,758) (592,815) (6,412,374) 47,609
Share Option Charge 2,119 4,992 2,119 4,992
Discontinued Operations - (3,569) - (3,569)
Diminution of Goodwill
/ Investments 6,171,986 - 6,171,986 -
Depreciation of Property,
Plant and Equipment 22,339 53,936 - -
Operating cash flows
before movement in
working capital (400,314) (537,456) (238,269) 49,032
Diminution in value
of property - 48,000 - 48,000
(Increase) / Decrease
in Receivables (78,752) 1,555,800 (227,657) 677,598
Increase / (Decrease)
in Payables 58,620 (1,794,707) 69,413 (2,301,361)
Cash consumed by operations (420,446) (728,363) (396,513) (1,526,731)
Income Tax Paid - - - -
Net cash from operating
activities (420,446) (728,363) (396,513) (1,526,731)
------------ ------------ ------------ ------------
Cash Flows from Investing
Activities
Purchase of Property,
Plant and Equipment - (3,291) - -
Acquisition of subsidiary (71,124) - (52,500) -
Sale of freehold property 142,000 - 142,000 -
Net cash from investing
activities 70,876 (3,291) 89,500 -
------------ ------------ ------------ ------------
Cash Flows from Financing
Activities
Proceeds on issue
of shares 8,500 1,775,000 8,500 1,775,000
Cost for share issues (1,356) (101,692) (1,356) (101,692)
Long-term borrowings 237,500 - 300,000 -
Net cash from financing
activities 244,644 1,673,308 307,144 1,673,308
------------ ------------ ------------ ------------
Net Increase in Cash
and Cash Equivalents (104,926) 941,654 131 146,577
Cash and Cash Equivalents
at 1st July 2011 704,217 (237,437) 717 (145,860)
Cash and Cash Equivalents
at 30th April 2012 599,291 704,217 848 717
============ ============ ============ ============
Represented by:
Cash and short term
deposits 609,642 704,217 848 717
Bank loans, overdraft
and similar facilities (10,351) - - -
599,291 704,217 848 717
============ ============ ============ ============
This information is provided by RNS
The company news service from the London Stock Exchange
END
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