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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Electric Word | LSE:ELE | London | Ordinary Share | GB0003083622 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.00 | - |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMELE
RNS Number : 8235H
Electric Word PLC
23 August 2016
23 August 2016
ELECTRIC WORD PLC
Interim Results to 31 May 2016
Electric Word, the specialist information business with divisions operating in the Sport and Education sectors, today announced interim results for the six months ended 31 May 2016.
Hot Features
Premium
HIGHLIGHTS
* Disposal of Group's 70% stake in iGaming Business Ltd
for gross cash consideration of GBP14.5m.
* Revenues from continuing operations flat at GBP3.2m
compared to H1 2015
* Strong performance in Sport Division with revenues up
15% to GBP1.3m and Adjusted EBITA* increasing 300% to
GBP114k
* Following external review, Optimus Education business
now refocused on conferences and premium subscription
products.
* Education revenues down 9% to GBP1.9m resulting from
11% lower Optimus subscriptions and 27% lower
conferences. Speechmark increased 7% compared to H1
2015.
* Net cash increase from GBP0.4m at 30 November 2015 to
GBP11.5m at 31 May 2016.
* Adjusted figures (Note 3) exclude amortisation,
impairment of goodwill and intangible assets,
non-recurring items and restructuring costs,
share based payment costs, as well as the tax
impact of those adjusting items and any non-cash
tax credits and charges. This definition applies
throughout the Interim Results statement.
Julian Turner, Chief Executive of Electric Word, commented:
"Following the disposal of the Group's stake in iGaming Business Ltd, we now have a much stronger balance sheet. The performance of the trading divisions in the first half of the year has met expectations and been satisfactory, given market conditions. Our strategy of investing in higher value subscription products is now resulting in both higher revenues and margins in the Sport division whilst sales of our premium subscription products in Education are also encouraging. The Sports and Education businesses are not currently of sufficient size to support the existing level of Group overheads and central costs, however, and we are reviewing ways to address this."
Electric Word plc
INTERIM RESULTS TO 31 May 2016
___________________________________________________________________________
Financial summary (GBP'000) 2016 2015 2015
6 months 6 months 12 months
GBP'000 GBP'000 GBP'000
Restated Restated Restated
Continuing operations
Revenue 3,224 3,245 6,796
Gross Profit 1,803 1,756 3,801
Adjusted EBITA* (992) (907) (1,345)
------------------------------------ ---------- ---------- -----------
Adjusted loss before tax* (986) (916) (1,361)
Amortisation (232) (229) (470)
Non-recurring items (397) - -
Impairment expense - - (1,000)
Share-based payment charges (32) (33) (66)
------------------------------------ ---------- ---------- -----------
Loss before tax (1,647) (1,178) (2,897)
------------------------------------ ---------- ---------- -----------
Loss for the financial
period from continuing
operations (1,637) (1,172) (2,678)
==================================== ========== ========== ===========
Discontinued operations
Profit for the financial
period from discontinued
operations 11,698 339 386
==================================== ========== ========== ===========
Profit / (loss) for the
financial period 10,061 (833) (2,292)
==================================== ========== ========== ===========
Diluted loss per share
from continuing operations (0.40)p (0.29)p (0.66)p
Adjusted diluted loss
per share* (0.24)p (0.22)p (0.33)p
Diluted earnings / (loss)
per share from continuing
and discontinued operations 2.42p (0.23)p (0.62)p
==================================== ========== ========== ===========
Net funds 11,494 11 448
Comparative figures for the year to 30 November 2015 and six months to 31 May 2015 have been restated to reclassify the results of iGaming Business Ltd and the Optimus books business as discontinued (see note 8).
* Adjusted figures (Note 3) exclude amortisation, impairment of goodwill and intangible assets, non-recurring items and restructuring costs, share based payment costs, as well as the tax impact of those adjusting items and any non-cash tax credits and charges. This definition applies throughout the Interim Results statement.
Net funds (note 6) comprise cash held net of bank overdrafts and loans.
SJulian Turner, Chief Executive, Electric Word 020 7265 4170 Andrew Potts, Panmure Gordon 020 7886 2500
Electric Word plc
INTERIM RESULTS TO 31 May 2016
Chairman's and Chief Executive's statement
___________________________________________________________________________
GROUP OVERVIEW
Total Group 2016 2015 2015
6 months 6 months 12 months
Total Total Total
GBP'000 GBP'000 GBP'000
Continuing operations Restated Restated
------------------------ ---------- ---------- -----------
Revenue 3,224 3,245 6,796
------------------------ ---------- ---------- -----------
Adjusted EBITA* (992) (907) (1,345)
------------------------ ---------- ---------- -----------
Net interest received
/ (payable) 6 (9) (16)
------------------------ ---------- ---------- -----------
Adjusted loss before
tax* (986) (916) (1,361)
------------------------ ---------- ---------- -----------
* Adjusted figures (note 3) exclude amortisation and impairment of goodwill and intangible assets, non-recurring items 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.
The Group's strategy has been to increase the value that it adds for its customers by creating products and services that support their critical decisions and the achievement of their key organisational objectives. This has required a deeper engagement with our customers as well as some significant investments. Inevitably, in following this path, we have had to make some choices and are now doing fewer things, of greater value and on a larger scale.
Our investment in the last three years has principally been in digital products and this has produced increased sales of higher-value, premium products which have once again seen higher average customer values in both SportBusiness and Optimus Education. We expect these higher-value premium products to add to the value of these businesses.
Following the disposal of iGaming Business in January 2016, we are mindful that the Group's cash balances could exceed the Group's expected financing requirements for the foreseeable future. We are also conscious that the Group's continuing businesses are in aggregate loss making. This is primarily because following the recent business disposals, the Sports and Education businesses are not currently of sufficient size to support the existing level of Group overheads and central costs.
In our 2015 Annual Report, we announced that we were reviewing our infrastructure, systems and processes and also assessing the options open to us, including a possible return of capital to Shareholders. We also stated that we were mindful of the continuing EBITA losses and that any capital return would be enhanced by improvements in profitability in the Optimus business. Our review is progressing but not yet concluded and as such we do not consider a return of capital would be appropriate at this stage. We will provide a further update in due course.
Directorate change
Stephen Routledge, who has been a non-executive director since September 2006, has indicated his intention to step down from the Board on 31 August 2016. We would like to thank Stephen for his contribution to the development of the Group during his tenure.
Electric Word plc
INTERIM RESULTS TO 31 May 2016
Chairman's and Chief Executive's Statement
___________________________________________________________________________
SPORT division
2016 2015 2015
Continuing operations 6 months 6 months Change 12 months
GBP'000 GBP'000 % GBP'000
------------------------ ---------- ---------- -------- -----------
Revenue 1,280 1,114 +15% 2,366
------------------------ ---------- ---------- -------- -----------
Adjusted contribution
to central overhead* 328 274 +20% 644
------------------------ ---------- ---------- -------- -----------
Adjusted EBITA* 114 38 +200% 153
------------------------ ---------- ---------- -------- -----------
Margin 9% 3% 6%
------------------------ ---------- ---------- -------- -----------
The table above excludes the results of iGaming Business Ltd which was sold on 4 January 2016 - see note 8.
The Sport division provides market information and knowledge to professionals in the global business of sport, particularly on media rights, sponsorship and event hosting.
Revenue in this division grew by 15% compared to H1 2015, with 65% of revenue from live or digital services in 2015 (62% in H1 2015). Subscriptions grew by 18% and now account for 69% of the revenue in this division (67% in H1 2015). Revenue from bespoke consulting increased by 26% compared to the first half of 2015 and accounted for 15% of revenues (14% in H1 2015), whereas advertising was 14% of 2016 divisional revenues (14% in H1 2015).
Revenues from TV Sports Markets continue to grow on the back of enhanced product offerings and represented 41% of revenues in H1 2016 - a 10% increase on H1 2015.
We are successfully continuing to develop our Sports Sponsorship Insider product and H1 2016 revenues have increased by 24% from H1 2015 to GBP113,000. This product is loss making due to continued investment and development, but at current growth rates we believe that it will become profitable in the short to medium term.
As noted above, revenues from bespoke consulting have increased compared to H1 2015, and are currently at 73% of total consulting revenues for the year to 30 November 2015.
Our flagship Sports Business International magazine generated 35% of revenues in the period to 31 May 2016 and H1 2015. Approximately 55% of revenues are subscriptions, and 42% are generated form advertising. This product earns a comparatively low margin but also provides an effective marketing channel for our other products and the business as a whole.
EDUCATION divisioN
2016 2015 2015
Continuing operations 6 months 6 months Change 12 months
GBP'000 GBP'000 % GBP'000
------------------------ ---------- ---------- -------- -----------
Revenue 1,944 2,131 -9% 4,430
------------------------ ---------- ---------- -------- -----------
Adjusted contribution
to central overhead* (129) (27) +378% 144
------------------------ ---------- ---------- -------- -----------
Adjusted EBITA* (560) (462) +21% (730)
------------------------ ---------- ---------- -------- -----------
Margin -29% -22% -14%
------------------------ ---------- ---------- -------- -----------
The table above now includes the results of the Speechmark business which was previously reported in the Health segment. The results of the Incentive Plus business which was sold on 15 October 2014 have been excluded as have the results of the Optimus books business which have been discontinued - see note 8.
Electric Word plc
INTERIM RESULTS TO 31 May 2016
Chairman's and Chief Executive's Statement
___________________________________________________________________________
The Education division includes the Optimus and Speechmark businesses. Optimus supports teachers' professional development requirements through an online subscription-based information and training service and through live conferences.
The Optimus business is now focused on conferences for a narrower group of senior school leaders alongside the Premium CPD online training resources. These services have been brought together, along with the Knowledge centre database of articles and case studies, into an integrated membership offering under the Optimus Unlimited brand. This has resulted in a re-phased conference schedule and fewer events overall. We ran 14 events in the first half of 2016 (which is 5 fewer than 2015) and this contributed to 27% lower revenues compared to H1 2015, although profitability per event was higher.
In subscriptions, the total revenue earned was down 11% as a result of reduced subscriptions to the Knowledge Centre. Revenues from the Premium CPD and Unlimited products however have increased by 160% to GBP169,000 which represents good progress from the launch of Unlimited in September 2015. As a result of strong sales of Unlimited in the second quarter, deferred subscription revenue ended the period higher than the previous year.
The Optimus books business had been reduced greatly in recent years as part of the streamlining of activities around digital and live services and that business has now been discontinued as at 31 May 2016.
Speechmark, however, continues to publish books and other resources for speech and language therapists, mental health professionals and teachers in schools. Speechmark has had a good start to the year and revenues are 7% higher than in the period to 31 May 2015, mainly driven by UK book sales.
Central costs
2016 2015 2015
6 months 6 months Change 12 months
GBP'000 GBP'000 % GBP'000
----------------------------- ---------- ---------- -------- -----------
Adjusted EBITA* (546) (483) +13% (768)
----------------------------- ---------- ---------- -------- -----------
As % of Group revenue
from continuing operations 17% 15% 11%
----------------------------- ---------- ---------- -------- -----------
Net interest receivable
/ (payable) 6 (9) (16)
----------------------------- ---------- ---------- -------- -----------
These costs represent those central group costs which have not been recharged to the divisions and are therefore not included in the divisional results. They include Board fees and costs related to being both a public company and a Group as well as some of the costs of central functions such as HR, IT and unallocated property costs.
Central costs are higher than 2015 levels due to the continuation of some costs which were previously allocated to the businesses which have been sold. We would expect central costs for the remainder of 2016 to be at an increased level as a result of higher property costs, although this will be mitigated in part by efficiencies realised following the disposals and other actions being taken to reduce costs.
Net interest receivable / (payable) is consistent with the reduction in the Group's debt and the increase in cash balances following the disposal of iGaming Business Ltd.
Electric Word plc
INTERIM RESULTS TO 31 May 2016
Chairman's and Chief Executive's Statement
___________________________________________________________________________
FINANCIAL REVIEW
In these results we refer to adjusted results. Adjusted results are prepared to provide a more comparable indication of the Group's underlying business performance. A reconciliation of statutory results to adjusted results is given in note 3, and further details of adjusting items are given below.
Non-recurring items
Non-recurring costs of GBP397,000 have been incurred in the 6 months ended 31 May 2016. These relate to costs associated with the strategic review of the Optimus Education business (GBP184,000), redundancy costs arising from staff restructuring (GBP54,000) and bonus payments made to the Executive Directors as a result of
meeting key objectives including the disposal of iGaming Business Ltd (GBP159,000). There were no non-recurring costs charged to continuing operations in the prior periods.
Amortisation
Amortisation of intangible fixed assets for continuing operations charged in the 6 months to 31 May 2016 amounted to GBP232,000 (6 months to 31 May 2015: GBP229,000; Year ended 30 November 2015, GBP470,000).
Impairment charges
An impairment expense of GBP1m was recognised in the second half of 2015 against the carrying value of goodwill in the Optimus business. There have been no impairments recognised in 2016.
Share-based payment charges
Share-based payment charges are recognised to spread the fair value of each award over the vesting period on a straight-line basis, after allowing for an estimate of the share awards that will actually vest. The expense recognised in the 6 months ended 31 May 2016 was GBP32,000 (6 months to 31 May 2015: GBP33,000; Year ended 30 November 2015, GBP66,000)
Debt and cash flow
Following the disposal of iGaming Business Ltd in January 2016, net cash at 31 May 2016 was GBP11,494,000 (31 May 2015: GBP11,000; 30 November 2015: GBP448,000). The Group has gross bank debt of GBP61,000 at 31 May 2016 (31 May 2015: GBP228,000; 30 November 2015: GBP94,000). This is being repaid over equal monthly instalments to May 2017.
Current Trading and Prospects
Current trading is in line with the Board's expectations. As we enter the fourth quarter, which is an important contributor to the Group's overall performance, we are expecting continued strong performance from our Sport division. In Education we are encouraged by sales of our premium subscription products although this will be offset by further reductions in Knowledge Centre. Advance bookings for fourth quarter education conferences are currently ahead of 2015 and Speechmark performance is anticipated to remain steady. Central costs in the second half of the year will be higher than the first due to higher property costs, but we continue to seek efficiencies where possible.
Andrew Brode Chairman Julian Turner Chief Executive
Electric Word plc
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 May 2016 - unaudited
Six months Six months Year
ended ended ended
31 May 31 May 30 November
2016 2015 2015
Note GBP'000 GBP'000 GBP'000
Restated Restated
------------------------------------------- ------ ---------- ---------- ------------
CONTINUING OPERATIONS
REVENUE 2 3,224 3,245 6,796
Cost of sales - direct
costs (953) (1,005) (2,140)
Cost of sales - marketing
expense (468) (484) (855)
-------------------------------------------- ------ ---------- ---------- ------------
Gross profit 1,803 1,756 3,801
Other operating expenses (2,788) (2,664) (5,138)
Non-recurring items (397) - -
Depreciation expense (39) (32) (74)
Amortisation expense (232) (229) (470)
Impairment charges - - (1,000)
Total administrative
expenses (3,456) (2,925) (6,682)
2,
OPERATING LOSS 3 (1,653) (1,169) (2,881)
Finance costs (5) (9) (16)
Finance income 11 - -
LOSS BEFORE TAX 3 (1,647) (1,178) (2,897)
Taxation 4 10 6 219
LOSS FOR THE PERIOD FROM
CONTINUING OPERATIONS (1,637) (1,172) (2,678)
DISCONTINUED OPERATIONS
Profit for the period
from discontinued operations,
net of tax 8 11,698 339 386
PROFIT / (LOSS) FOR THE
PERIOD 10,061 (833) (2,292)
==================================================== ========== ========== ==============
Attributable to:
* Equity holders of the parent 3 10,188 (941) (2,523)
* Non-controlling interest (127) 108 231
-------------------------------------------- ------ ---------- ---------- --------------
TOTAL COMPREHENSIVE PROFIT
/ (LOSS) 10,061 (833) (2,292)
EARNINGS / (LOSS) PER
SHARE 5
From continuing and discontinued
operations
Basic 2.50p (0.23)p (0.62)p
Diluted 2.42p (0.23)p (0.62)p
From continuing operations
Basic (0.40)p (0.29)p (0.66)p
Diluted (0.40)p (0.29)p (0.66)p
==================================================== ========== ========== ==============
Prior period results have been restated to show the effect of operations which have been discontinued in the current and prior periods - see note 8. Of the profit for the period from discontinued operations, GBP11,825,000 (6 months to 31 May 2015: GBP231,000, year ended 30 November 2015: GBP155,000 profit) is attributable to equity holders of the parent and GBP127,000 loss (6 months to 31 May 2015: GBP108,000 profit, year ended 30 November 2015: GBP231,000 profit) is attributable to the non-controlling interest.
Electric Word plc
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 May 2016 - 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
2014 4,076 7,531 105 (123) (4,983) 6,606 81 6,687
Total comprehensive
(loss)
/ income - - - - (941) (941) 108 (833)
4,076 7,531 105 (123) (5,924) 5,665 189 5,854
Dividend
paid by
subsidiary - - - - - - (185) (185)
Share based
payment
costs - - - - 32 32 - 32
--------------------- --------- --------- ---------- --------- ---------- ---------- ------------- ---------
At 31 May
2015 4,076 7,531 105 (123) (5,892) 5,697 4 5,701
Total comprehensive
(loss)
/ income - - - - (1,582) (1,582) 123 (1,459)
Tax debited
directly
to equity - - - - (112) (112) - (112)
4,076 7,531 105 (123) (7,586) 4,003 127 4,130
Share based
payment
costs - - - - 34 34 - 34
--------------------- --------- --------- ---------- --------- ---------- ---------- ------------- ---------
At 30 November
2015 4,076 7,531 105 (123) (7,552) 4,037 127 4,164
Total comprehensive
income
/ (loss) - - - - 10,188 10,188 (127) 10,061
4,076 7,531 105 (123) 2,636 14,225 - 14,225
Share issues 11 - - - - 11 - 11
Share based
payment
costs - - - - 32 32 - 32
At 31 May
2016 4,087 7,531 105 (123) 2,668 14,268 - 14,268
===================== ========= ========= ========== ========= ========== ========== ============= =========
Electric Word plc
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the six months ended 31 May 2016 - unaudited
31 May 31 May 30 November
2016 2015 2015
Note GBP'000 GBP'000 GBP'000
-------------------------------------------------------- ------- -------- -------- -----------
ASSETS
Non-current assets
Goodwill 3,050 4,550 3,050
Other intangible assets 777 1,067 882
Property, plant and equipment 9 80 46
Deferred tax assets 633 1,846 637
-------------------------------------------------------- ------- -------- -------- -----------
4,469 7,543 4,615
-------------------------------------------------------- ------- -------- -------- -----------
Current Assets
Inventories 556 757 622
Trade and other receivables 1,909 3,732 1,987
Cash and cash equivalents 6 11,555 239 542
-------------------------------------------------------- ------- -------- -------- -----------
14,020 4,728 3,151
Assets classified as held for sale - - 1,544
-------------------------------------------------------- ------- -------- -------- -----------
Total current assets 14,020 4,728 4,695
-------------------------------------------------------- ------- -------- -------- -----------
TOTAL ASSETS 18,489 12,271 9,310
======================================================== ======= ======== ======== ===========
EQUITY AND LIABILITIES
Capital and reserves
Called up ordinary share capital 4,087 4,076 4,076
Share premium account 7,531 7,531 7,531
Merger reserve 105 105 105
Reserve for own shares (123) (123) (123)
Retained earnings 2,668 (5,892) (7,552)
-------------------------------------------------------- ------- -------- -------- -----------
Equity attributable to equity holders of the parent 14,268 5,697 4,037
Non-controlling interest - 4 127
-------------------------------------------------------- ------- -------- -------- -----------
TOTAL EQUITY 14,268 5,701 4,164
-------------------------------------------------------- ------- -------- -------- -----------
Non-current liabilities
Borrowings 6 - 61 28
Deferred tax liabilities 36 229 50
36 290 78
-------------------------------------------------------- ------- -------- -------- -----------
Current liabilities
Borrowings 6 61 167 66
Current tax liabilities - 78 -
Trade payables and other liabilities 1,578 2,443 1,640
Provisions 7 60 60 60
Deferred income 2,486 3,532 1,934
-------------------------------------------------------- ------- -------- -------- -----------
4,185 6,280 3,700
Liabilities associated with assets held for sale - - 1,368
-------------------------------------------------------- ------- -------- -------- -----------
Total current liabilities 4,185 6,280 5,068
-------------------------------------------------------- ------- -------- -------- -----------
TOTAL LIABILITIES 4,221 6,570 5,146
-------------------------------------------------------- ------- -------- -------- -----------
TOTAL EQUITY AND LIABILITIES 18,489 12,271 9,310
======================================================== ======= ======== ======== ===========
These financial statements were approved by the Board of Directors and are authorised for
issue on 23 August 2016.
Electric Word plc
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 May 2016 - unaudited
6 months 6 months Year ended
ended ended 30
31 May 31 May November
2016 2015 2015
Note GBP'000 GBP'000 GBP'000
--------------------------------------- ------ -------- -------- ----------
OPERATING ACTIVITIES
Profit / (loss) for the
period 10,061 (833) (2,292)
Taxation (68) 87 1,196
Amortisation & impairment
expense 236 318 1,582
Depreciation 39 32 73
(Profit) / loss on disposal
of discontinued operation (11,795) 23 27
Finance costs 5 9 16
Finance income (11) - -
Share based payment charges 32 33 66
Operating cash flows before
movements in working capital (1,501) (331) 668
Decrease in inventories 66 98 233
(Increase) / decrease in
receivables 47 48 (132)
Increase / (decrease) in
payables 957 940 (273)
--------------------------------------- ------ -------- -------- ----------
Cash (outflow) / inflow
from operating activities
before interest and tax (431) 755 496
Interest paid (5) (9) (16)
Taxation paid (76) (61) (154)
Cash (outflow) / inflow
from operating activities (512) 685 326
--------------------------------------- ------ -------- -------- ----------
investing activities
Purchase of property, plant
and equipment (3) (88) (95)
Purchase of intangible assets (128) (133) (286)
Proceeds from disposal of
discontinued operation received 9 11,666 121 1,078
Interest received 11 - -
Net cash used in investing
activities 11,546 (100) 697
--------------------------------------- ------ -------- -------- ----------
financing activities
Proceeds from issuance of
ordinary shares 11 - -
Repayment of borrowings 6 (33) (158) (292)
Payment of dividend to non-controlling
interest - (185) (185)
Net cash from financing
activities (22) (343) (477)
--------------------------------------- ------ -------- -------- ----------
Net INCREASE in cash and
cash equivalents 11,012 242 546
Cash and cash equivalents
at the beginning of the
period 543 (3) (3)
Cash and cash equivalents
at the end of the period 6 11,555 239 543
======================================= ====== ======== ======== ==========
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 may 2016 - 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 2016 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 2016 and the comparative information for the six months ended 31 May 2015 are not audited by the Group's auditors. The comparative figures for the financial year ended 30 November 2015 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 2015 are available upon request from the Company's registered office at 2(nd) Floor, 5 Thomas More Square, London E1W 1YW or at www.electricwordplc.com.
The comparative information for the year to 30 November 2015 and the six months ended 31 May 2015 included in the condensed consolidated statements has been restated to reclassify the results of businesses which have been discontinued in the current or prior periods. 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 Standard 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 2015.
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 this 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 2015.
GOING CONCERN
Following the disposal of the Group's 70% interest in iGaming Business Ltd, the Group has cash balances of GBP11,555,000 and a net current asset position of GBP9,835,000 as at 31 May 2016. Net funds amount to GBP11,494,000 at 31 May 2016. The Directors have prepared group cash flow forecasts for the period ending 30 November 2018. 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.
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 May 2016 - unaudited
1 PRESENTATION OF INTERIM RESULTS (continued)
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. The Group 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.
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 when reviewing performance, allocating resources and making strategic decisions. Following the disposal of iGaming Business Ltd, the Directors have restructured the management of the Group's continuing operations and now organises its management and reporting around two market-facing divisions: Education and Sport.
-- Sport (S): provides insight, data and analysis to the business communities behind sport.
-- Education (E): provides professional education, development, training and resources to professional communities in schools and other institutions including school managers, teachers, speech and language therapists and special needs co-ordinators.
-- Central costs (PLC): the group function represents central costs which are not directly related to the Divisions' 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 position across the Group.
The sector analysis includes adjusted 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.
As described in note 8, the information in the table below excludes amounts relating to discontinued activities and 2015 comparatives have been restated accordingly
Analysis by 6 months ended 31 6 months ended 31
market sector May 2016 May 2015 - Restated
- continuing
operations
S E PLC Total S E PLC Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------- --------- --------- --------- -------- ---------- --------- --------- ---------
Revenue 1,280 1,944 - 3,224 1,114 2,131 - 3,245
--------------------- --------- --------- --------- -------- ---------- --------- --------- ---------
Adjusted operating
(loss) /profit
(note 3) 114 (560) (546) (992) 38 (462) (483) (907)
Share based
payment charges - - (32) (32) - - (33) (33)
Restructuring
costs - (200) (197) (397) - - - -
Amortisation
of intangible
assets (60) (160) (12) (232) (54) (168) (7) (229)
Operating
(loss) / profit 54 (920) (787) (1,653) (16) (630) (523) (1,169)
Finance costs - - (5) (5) - - (9) (9)
Finance income - - 11 11 - - - -
(Loss) / profit
before tax 54 (920) (781) (1,647) (16) (630) (532) (1,178)
===================== ========= ========= ========= ======== ========== ========= ========= =========
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 May 2016 - unaudited
2 SEGMENTAL INFORMATION (continued)
Analysis by market Year ended 30 November
sector - continuing 2015 - Restated
operations
S E PLC Total
GBP'000 GBP'000 GBP'000 GBP'000
---------------------------- --------- --------- -------- --------
Revenue 2,366 4,430 - 6,796
------------------------------------ --------- --------- -------- --------
Adjusted operating
(loss) /profit (note
3) 153 (730) (768) (1,345)
Share based payment
charges - - (66) (66)
Restructuring costs - - - -
Amortisation of intangible
assets (112) (342) (16) (470)
Impairment expense - (1,000) - (1,000)
Operating (loss)
/ profit 41 (2,072) (850) (2,881)
Finance costs - - (16) (16)
(Loss) / profit before
tax 41 (2,072) (866) (2,897)
==================================== ========= ========= ======== ========
3 ADJUSTED PROFITS
Adjusted profits are presented to allow shareholders to gain a further understanding of the trading performance of the Group. Profits are adjusted for items not considered by management to be part of the underlying trends in the business together with the related tax effect of those items. The adjustments add back items which are not trade related, are non-recurring in nature, or have no cash impact.
Adjusted figures exclude amortisation and impairment of goodwill and intangible assets, restructuring and acquisition-related costs, and share based payment costs, non-recurring items as well as the tax impact of those adjusting items and any non-cash tax charges.
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 may 2016 - unaudited
3 ADJUSTED PROFITS (continued)
6 months 6 months Year ended
ended ended 30 November
31 May 31 May 2015
2016 2015 GBP'000
GBP'000 GBP'000 Restated
Restated
------------------------------------ --------- --------- ------------
Operating loss for the period
from continuing operations (1,653) (1,169) (2,881)
------------------------------------- --------- --------- ------------
Amortisation of intangible
assets 232 229 470
Non-recurring items 397 - -
Impairment expense - - 1,000
Share based payment charges 32 33 66
------------------------------------- --------- --------- ------------
Adjusting items to operating
loss 661 262 1,536
Adjusted operating loss for
the period (Adjusted EBITA) (992) (907) (1,345)
Depreciation 39 32 74
------------------------------------- --------- --------- ------------
Adjusted earnings before interest,
tax, depreciation and amortisation
for the period (953) (875) (1,271)
===================================== ========= ========= ============
Loss before tax for the period
from continuing operations (1,647) (1,178) (2,897)
------------------------------------- --------- --------- ------------
Adjusting items to operating
loss 661 262 1,536
------------------------------------- --------- --------- ------------
Adjusting items to loss before tax 661 262 1,536 Adjusted loss before tax for the period (986) (916) (1,361) ===================================== ========= ========= ============ Profit / (loss) for the period attributable to equity holders of the parent 10,188 (941) (2,523) Deduct profit from discontinued activities 11,825 231 155 ------------------------------------- --------- --------- ------------ Loss for the period attributable to equity holders of the parent from continuing operations (1,637) (1,172) (2,678) Adjusting items to loss before tax 661 262 1,536 Exclude movements on deferred tax assets and liabilities taken to income statement (10) (6) (219) ------------------------------------- --------- --------- ------------ Adjusting items to loss for the period 651 256 1,317 Adjusted loss for the period (986) (916) (1,361) ===================================== ========= ========= ============
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 May 2016 - unaudited
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 2016.
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
2016 2015 2015
Number Number Number
--------------------------------- ------------- ------------- -------------
Weighted average number
of shares 407,615,604 407,590,795 407,590,795
Adjustment in respect
of SIP shares (496,132) (634,280) (619,749)
---------------------------------- ------------- ------------- -------------
Weighted average number
of shares used in basic
earnings per share calculations 407,119,472 406,956,515 406,971,046
Dilutive effect of share
options 14,178,495 13,362,538 13,265,034
Weighted average number
of shares used in diluted
earnings per share calculations 421,297,967 420,319,053 420,236,080
================================== ============= ============= =============
6 months 6 months Year
ended ended ended
31 May 31 May 30 November
2016 2015 2015
GBP'000 GBP'000 GBP'000
Note Restated Restated
---------------------------------------------------------- ------ -------- --------- ------------
Profit / (loss) for the
period from continuing
and discontinued operations
attributable to equity
shareholders 10,188 (941) (2,523)
Deduct profit from discontinued
operations 11,825 231 155
---------------------------------------------------------- ------ -------- --------- ------------
Loss for the period from
continuing operations
attributable to equity
shareholders
Adjustment to earnings (1,637) (1,172) (2,678)
3 651 256 1,317
---------------------------------------------------------- ------ -------- --------- ------------
Adjusted (loss) / profit
from continuing operations
attributable to equity
shareholders (986) (916) (1,361)
========================================================== ====== ======== ========= ============
Earnings / (loss) per
share from continuing
and discontinued operations
* Basic loss per share 2.50p (0.23)p (0.62)p
========================================================== ====== ======== ========= ============
* Diluted loss per share 2.42p (0.23)p (0.62)p
========================================================== ====== ======== ========= ============
Loss per share from continuing
operations
* Basic (loss) / earnings per share (0.40)p (0.29)p (0.66)p
========================================================== ====== ======== ========= ============
* Diluted (loss) / earnings per share (0.40)p (0.29)p (0.66)p
========================================================== ====== ======== ========= ============
Adjusted loss per share
* Adjusted basic (loss) / earnings per share (0.24)p (0.23)p (0.33)p
========================================================== ====== ======== ========= ============
* Adjusted diluted (loss) / earnings per share (0.24)p (0.22)p (0.33)p
========================================================== ====== ======== ========= ============
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 May 2016 - unaudited
6 ANALYSIS OF NET FUNDS
Bank net funds
At 30 November Non-cash At 31
2015 Cash flow changes May
GBP'000 GBP'000 GBP'000 2016
GBP'000
-------------------------- -------------- ----------- -------- --------------
Cash at bank and
in hand 542 11,013 - 11,555
Classified as assets
held for resale 1 (1) - -
-------------------------- -------------- ----------- -------- ----------------
Cash and cash equivalents 543 11,012 - 11,555
-------------------------- -------------- ----------- -------- ----------------
Bank loans due within
one year (66) 33 (28) (61)
Debt due within
one year (66) 33 (28) (61)
-------------------------- -------------- ----------- -------- ----------------
Bank loans due after
one year (28) - 28 -
-------------------------- -------------- ----------- -------- ----------------
Debt due after one
year (28) - 28 -
Net funds 449 11,045 - 11,494
========================== ============== =========== ======== ================
The Group also has an overdraft facility of GBP750,000 which, when utilised, is repayable on demand and charges an effective interest rate of 4.5% over the lending Bank's base rate.
7 PROVISIONS
The provision of GBP60,000 at 31 May 2016, 30 November 2015 and 31 May 2015 relates to an estimate of dilapidation costs due on termination of a lease.
8 DISCONTINUED OPERATIONS
On 4 January 2016, the Group's 70% interest in iGaming Business Ltd was disposed of for total cash consideration of GBP14,549,000. This business was reported in the Sport & Gaming reportable segment. Further details are given in note 9.
During the period to 31 May 2016, the Directors have also decided to discontinue the Optimus books business and focus investment on the conferences and high-value subscription products. Results from the Optimus books business were reported in the Education segment.
The combined results of all discontinued operations which have been discontinued in the current and prior periods included in the condensed consolidated statement of comprehensive income are set out below. The comparative profits from discontinued operations have been restated to include those operations classified as discontinued in the current year.
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 May 2016 - unaudited
8 DISCONTINUED OPERATIONS (continued)
Profit for the year 6 months 6 months Year
from discontinued operations ended ended ended
31 May 31 May 30 November
2016 2015 2015
GBP'000 GBP'000 GBP'000
------------------------------- --------- --------- -------------
Revenue 150 3,218 7,011
Expenses (305) (2,763) (5,183)
(Loss) / profit before
tax (155) 455 1,828
Attributable tax credit
/ (charge) 58 (93) (1,415)
------------------------------- --------- --------- -------------
(97) 362 413
Profit / (loss) on disposal
of operation (note 9) 11,795 (23) (27)
------------------------------- --------- --------- -------------
Profit for the year
from discontinued operations 11,698 339 386
=============================== ========= ========= =============
9 BUSINESS COMBINATIONS
As described in note 8, on 4 January 2016, the Group's 70% interest in iGaming Business Ltd was disposed of. Details of the assets and liabilities disposed of, and the calculation of the profit and loss on disposal are given in the table below.
6 months
ended
31 May
2016
Non-current assets
Goodwill 500
Intangible fixed assets 71
Current assets
Cash 220
Trade and other debtors 1,550
Intercompany 1,003
Current liabilities
Trade and other payables (737)
Deferred income (922)
Current and deferred tax (44)
------------------------------------- ---------
Net assets disposed of 1,641
Directly attributable costs
of disposal 1,113
Profit on disposal included
in discontinued operations 11,795
------------------------------------- ---------
Consideration received satisfied
by cash 14,549
===================================== =========
Net cash inflow arising
on disposal
---------------------------------- ---------
Consideration received in
cash 14,549
Less directly attributable
costs of disposal (1,113)
------------------------------------- ---------
13,436
---------------------------------- ---------
Less cash disposed of (220)
Less settlement of intercompany
balance (1,550)
------------------------------------- ---------
Net cash inflow 11,666
===================================== =========
Notes to Editors
Electric Word plc is a specialist media group supporting professional development, management effectiveness and market intelligence through a wide range of digital, print 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 make better-informed decisions and so improve their performance. 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 market data, subscription websites, magazines, conferences, face-to-face training, online training, books, special reports, bespoke research and consultancy.
Following the disposal of the Group's stake in iGaming Business, it is now composed of two market-facing divisions:
Education
Optimus Education supports the professional development of teachers and school leaders through an online subscription-based information and training service and through live conferences. Speechmark specialises in resources for speech therapists, mental health professionals and teachers.
Sport
SportBusiness Group provides business insight, data and analysis to executives in the global business of sport. It supports sports industry professionals who work in governing bodies, the media, sports marketing, sponsorship and club and event management through market data, subscription websites, magazines, special reports, bespoke research and consultancy.
This information is provided by RNS
The company news service from the London Stock Exchange
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