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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Fuse 8 | LSE:FUZ8 | London | Ordinary Share | GB00B66Q8C12 | ORD 2P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 4.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMFUZ8
RNS Number : 4128J
Fuse 8 PLC
30 June 2011
Date: 30 June 2011 On behalf of: Fuse 8 plc ('Fuse 8' or 'the Company') Embargoed until: 0700hrs
Fuse 8 plc
Preliminary results for the 12 months ended 31 March 2011
Fuse 8 plc (AIM: FUZ 8), the full service digital marketing agency, is pleased to announce its preliminary results for the 12 months ended 31 March 2011.
Financial Highlights
-- Turnover increased by 12% to GBP5.06 million (2010: GBP4.51 million)
-- Revenue increased by 8% to GBP3.60 million (2010: GBP3.35 million)
-- Headline Operating Profits increased by 14% to GBP684,000 (2010: GBP601,000)
-- Increase in Headline Operating Profit margin to 19% (2010: 18%)
-- No bank debt and cash balance of GBP0.2 million (2010: GBP0.3 million)
-- Headline Earnings Per Share increased to 4.03 pence (2010: 3.96 pence)
Operational Highlights
-- Completion of reverse acquisition and admission to AIM in July 2010
-- First step of strategic plan implemented with the acquisition of Delete Digital Marketing, the London-based digital agency, during November 2010
-- Good new business wins now contributing to current year revenues
-- Investments into technological capabilities delivering strong results for clients
Outlook
-- Encouraging level of sizeable new business opportunities within H1 of the current year
Commenting on the preliminary results Nigel Hunter, Chief Executive Officer, said:
"Our maiden year on AIM has been successful and we are very pleased with the results reported today showing, as they do, five years of consistent revenue growth.
"Our proposition is strong; the challenging economic climate of the last two years has meant that marketeers are looking for more measurable value from their marketing investments, and the data-rich results achieved through digital communications have ensured that demand for these services has remained robust.
"We look forward to developing the Company further, both through organic growth and strategic acquisitions, with the ultimate goal of delivering enhanced shareholder value."
[1] "Headline" means the results excluding the non-recurring exceptional costs of GBP437,000
For Further Information please contact:
Fuse 8 plc Nigel Hunter/Graeme Burns Tel +44 (0)113 260 4600 FinnCap Geoff Nash/ Charlotte Stranner Tel +44 (0) 20 7600 1658 Redleaf Polhill Rebecca Sanders-Hewett/ Jenny Tel +44 (0) 20 7566 6720 Bahr
Notes to editors:
Fuse 8 is a full service digital marketing specialist covering a wide spectrum of services, ranging from creative development services to Search Engine Optimisation (SEO). Fuse 8, has offices in London, Leeds and Russia and centres most of its services around enhancing clients' reputations by helping to market and build their brands. The Group's principal expertise is in assisting its clients to build, grow and develop their online brands and, through this, help to drive sales and market share growth.
Fuse 8's current service offering encompasses the six main sectors below:
-- Online Design & Build
-- Digital Marketing
-- Creative Services
-- Media Planning & Buying
-- Marketing Consultancy
-- Online Press & Public Relations, Online Content
Fuse 8 was founded in 2000 by Mark Walton and Andy Hutchinson. As an early adopter of online technology, the Company has spent 11 years developing and refining its digital marketing offering and has grown rapidly in a fragmented marketplace. The business now services more than 100 clients across the UK, Continental Europe, and the USA. Major clients currently include: Arla Foods, Alton Towers, Unilever, Ikea, Manpower, McArthur Glen, Miele, Persimmon Homes, Soreen and UK Trade & Investment.
Fuse 8 is listed on the London Stock Exchange under the symbol FUZ8. Further information on the Company can be found at www.fuse8.com
Chairman's Statement
It gives me great pleasure to introduce the Company's maiden results following the admission to the AIM market in July 2010. The Company has enjoyed a good year with turnover increasing to more than GBP5 million for the first time and our highest ever headline operating profits of GBP0.7 million.
It is an exciting time to be involved in digital marketing communications. The dramatic shift of marketing investment to online activity experienced during the last five years continues unabated, as the technology and techniques available to marketeers constantly evolve. This evolution has led to the ability to monitor and measure activity in real-time.
Fuse 8's services are a strong proposition for marketeers; having been involved in digital communications for over a decade, and with a deep understanding of how to harness the technology available to engage with customers, Fuse 8 can give brands, and therefore sales, real momentum. Fuse 8 acts as reliable counsel in a complex business discipline.
This is also an exciting time for the Company. The blend of its digital communications heritage, together with award winning work and relentless attention to its clients' needs, means it is an attractive partner to its clients and the Company's reputation attracts a strong new business pipeline. This is apparent as the Company achieved its fifth consecutive year of revenue growth, despite the challenging economic environment.
Securing a London base last year was a strategic step forward and involvement in this market will help the business grow in the future. Fuse 8 continues to move ahead in line with its stated acquisition strategy and looks forward to both organic growth and further strategic acquisitions to drive the Company's growth.
Our business thrives due to the skill and dedication of each member of our team, both in the UK and in Russia, and I would like to offer my thanks to all of them.
Mark Walton
Non-Executive Chairman
29 June 2011
Chief Executive Officer's Statement
It gives me great pleasure to report Fuse 8's maiden results on behalf of the Board.
During the year to 31 March 2011, the Company increased turnover by 12% to GBP5.1 million and, more importantly, revenues by some 8% to GBP3.6 million, representing a solid performance and our fifth year of consecutive revenue growth. Top line growth has been achieved while maintaining good operating margins.
We have experienced good levels of new client activity which gives us confidence for the future. The most encouraging aspect to the new financial year is the scale of the opportunity we see ahead of us. Blue chip clients are seeking us out and the opportunities this brings are exciting, from both a technological and business perspective. It is also great to see that existing clients have reaped the benefits of our services and are now looking to digital communications to help them deliver a richer customer experience.
Recent enhancements in technology, delivered by our R&D investments, have produced excellent results for our clients and, in turn, created stronger relationships, and therefore recurring revenues. Our team of talented people has been expanded throughout the year and is bringing new insight and a fresh perspective to our client offering.
Fuse 8's client offering combines fully integrated online and digital marketing solutions, supported by conventional marketing services, which enables the Company to provide clients with a seamless service across all media channels. The value of the digitally focused services we provide to our clients is reflected in our continued revenue and profits growth. The challenging economic climate of the last two years has meant that marketeers are looking for more measurable value in their marketing spend, and the data-oriented results achieved through digital communications have ensured that demand for these services has remained robust.
Increasing proportions of our clients' budgets are being spent on digital communications. This is partly due to our clients' desire to explore the opportunities afforded to them with better customer engagement through social media channels. Fuse 8 is helping many of its clients steer a safe strategic passage through the minefield of user generated content and viral communication that, potentially, threatens their brand messages at every turn. The Company's 11 year heritage in digital marketing means that clients need, and value, the expertise we can apply to servicing their individual business requirements.
Clients continue to utilise the skills of Fuse 8 for both their digital and traditional marketing, however we are seeing a marked shift in the majority of activity into the digital arena; both from current clients and our new business pipeline. Demand and appetite for new technology has grown steadily over the period with clients old and new looking particularly to mobile and tablet technology plus applications to form part of their overall digital communications strategy.
Fuse 8 is not immune to the economic difficulties affecting the UK and Europe. During the year under review the Company has seen some clients, most noticeably in the public sector, being slower to commit to previously agreed plans or spend. However, a diverse client base and a focus on new business has allowed the Company to continue growing revenue and to invest in its digital service offer for clients, producing measurable results and ensuring that Fuse 8 remains an attractive partner in this value conscious environment.
Fuse 8's office in Russia is an offshore technology and digital production centre that has been successfully established for the last eight years. There are currently 32 highly skilled staff in Russia, and as our Centre of Technical Excellence, they continue to deliver a high quality and cost effective service for clients.
Strategy
As stated at the time of Fuse 8's admission to AIM, the Company's plan is to grow revenue and profits, steadily over time, both organically and by acquisition, to become one of the pre-eminent digital marketing agencies in the UK. The financial and operational achievements of the last year have been positive steps in the Group's strategy. The next steps are to:
-- Achieve sustained organic growth by investing in our client services, focusing on digital communications and targeting client sectors that provide long term clients who we can support in building brands.
-- Identify and acquire complementary businesses with good quality management and profit streams.
-- Expand the Company's production capacity in lower cost environments to allow continued investment in service and R&D, while achieving good margins.
-- Ensure the Company's organic growth is supported by investment in the marketing technology toolbox used to deliver services that help to continually enhance our client offering.
New Business
There have been a number of significant new client wins during the period. Wins include Ikea, London Stock Exchange, McArthurGlen, Peel Holdings, Soreen and Unilever.
The new business pipeline continues to grow at pace, with Fuse 8's core digital services providing the Company with a stronger foothold with existing clients and also offering many new business opportunities. New business activity is the lifeblood of any business and we approach ours with relentless enthusiasm.
Fuse 8 has three strategic areas from which it targets new business; cross selling of services to its current clients; winning new clients; and through strategic partnerships.
Acquisitions
Fuse 8 completed its first acquisition, Delete Digital Marketing ('Delete'), in November 2010. This gave the Group the foothold in London that it sought and a complementary team of experienced digital marketing specialists. The Delete team has been integrated into the enlarged business successfully and we have seen encouraging increases in new client interest and opportunities to offer additional expertise to more clients.
The Board recognises that a larger business will help increase the Company's efficiency and profile and also fulfil our strategic plans. To that end, it is regularly appraising acquisition opportunities.
Financial Review
Turnover increased by 12% to GBP5.1 million whilst revenue increased by some 8% to GBP3.6 million. This means we have grown our revenues for five consecutive years.
Administrative overheads increased due to the increased sales volumes, investment into additional development of technology solutions and, of course, the incremental costs associated with being a listed company. The operating margin achieved increased modestly from the previous year to 19%, a performance that is in the top quartile of our sector.
As well as monitoring operating margin, the Company uses other KPI's including; revenue per head, overheads per head, and the ratio of compensation expenses to revenue to monitor the performance of the business.
Exceptional costs incurred in the year represent the one-off costs (both cash and non-cash) arising from the reverse acquisition which achieved the admission to AIM and the acquisition of Delete.
Taxation charge of GBP0.2 million represents an effective rate of 29% of headline profit before tax. The Company's expectation is that the long term effective rate should generally be around the UK corporation tax rate (currently 28%) plus a modest increase due to some expenses being non-deductible items.
Our balance sheet remains robust for our size and we have positive cash balances of GBP0.2 million and an unused overdraft facility. Operational cashflow was 67% of operating profits due to material working capital movements in Q4. The Company's target is to convert 100% of operating profits to operating cashflow in the medium term.
Capital expenditure was higher than average during the year due to a number of renewals in the Company's vehicle fleet.
The Company is in a growth phase and therefore the Board does not propose a dividend for the year under review.
Summary & Outlook
It is pleasing to see yet another year of revenue growth and good margins delivered by the Company, against the backdrop of a flat economy.
This solid performance is only possible due to the intelligence, tenacity and endeavour of all the Fuse 8 team. We are proud of the service our team delivers to our clients and I would like to thank each member of our team for their contribution to our achievements this year.
Our future looks bright. However we can show no complacency in continually striving to provide clients with world class solutions to their marketing requirements. We are looking to achieve further growth in the year ahead and our new business pipeline remains encouraging.
Nigel Hunter
Chief Executive Officer
29 June 2011
GROUP STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 March 2011
2011 2010 GBP'000 GBP'000 Note ----------------------------------------------------- ---- ------- ------- Revenue 3,602 3,347 ----------------------------------------------------- ---- ------- ------- Administrative expenses 2,918 2,746 ----------------------------------------------------- ---- ------- ------- Headline operating profit 684 601 Exceptional costs 4 437 - Operating profit 247 601 Finance costs (19) (17) Finance income 2 1 Net finance cost (17) (16) Profit from continuing operations before tax 230 585 Taxation charge 193 180 ----------------------------------------------------- ---- ------- ------- Profit for the period and total comprehensive income 37 405 ----------------------------------------------------- ---- ------- ------- Attributable to: Parent company's shareholders 37 405 Basic earnings per share from total operations 5 0.3p 4.0p ----------------------------------------------------- ---- ------- ------- Diluted earnings per share from total operations 5 0.3p 4.0p ----------------------------------------------------- ---- ------- -------
GROUP STATEMENT OF FINANCIAL POSITION
As at 31 March 2011
2011 2010 2009 GBP'000 GBP'000 GBP'000 Non-current assets ------------------------------ ------- ------- ------- Goodwill 7 558 - - Property, plant and equipment 350 315 193 ------------------------------ ------- ------- ------- 908 315 193 Current assets Trade and other receivables 1,588 1,226 777 Cash and cash equivalents 243 284 96 ------------------------------ ------- ------- ------- 1,831 1,510 873 ------------------------------ ------- ------- ------- Total assets 2,739 1,825 1,066 ------------------------------ ------- ------- ------- Current liabilities Trade and other payables 999 744 631 Corporation tax 173 180 32 Financial liabilities 20 30 33 ------------------------------ ------- ------- ------- 1,192 954 696 ------------------------------ ------- ------- ------- Non-current liabilities Financial liabilities 114 103 7 Deferred tax 9 9 9 ------------------------------ ------- ------- ------- 123 112 16 ------------------------------ ------- ------- ------- Total liabilities 1,315 1,066 712 ------------------------------ ------- ------- ------- Net assets 1,424 759 354 ------------------------------ ------- ------- ------- Shareholders' funds Share capital 252 204 204 Capital redemption reserve 318 - - Share premium account 2,042 - - Merger reserve (1,964) (184) (184) Retained earnings 776 739 334 Total equity 1,424 759 354 ------------------------------ ------- ------- -------
GROUP STATEMENT OF CHANGES IN EQUITY
For the year ended 31 March 2011
Capital Share Issued redemption premium Merger Retained Total capital reserve account reserve earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Balance at 1 April 2008 204 - - (184) 272 292 Comprehensive income - - - - 62 62 -------------- -------- ---------- -------- -------- --------- --------- Balance at 1 April 2009 204 - - (184) 334 354 -------------- -------- ---------- -------- -------- --------- --------- Comprehensive income - - - - 405 405 -------------- -------- ---------- -------- -------- --------- --------- Balance at 31 March 2010 204 - - (184) 739 759 -------------- -------- ---------- -------- -------- --------- --------- Reverse acquisition 23 318 1,667 (1,780) - 228 Shares issued 25 - 375 - - 400 Comprehensive income - - - - 37 37 Balance at 31 March 2011 252 318 2,042 (1,964) 776 1,424 -------------- -------- ---------- -------- -------- --------- ---------
GROUP STATEMENT OF CASH FLOWS
For the year ended 28 February 2011
2011 2010 Note GBP'000 GBP'000 Cash inflow from operating activities 6 Cash inflow from operating activities before tax 166 364 Corporation tax paid (200) (32) ------------------------------------------------------ ---- ------- ------- Net cash (outflow) / inflow from operating activities after tax (34) 332 Cash inflow/ (outflow) from investing activities Finance income received 2 1 Cash acquired on reverse acquisition 82 - Cash acquired on acquisition of subsidiary 53 - Purchase of property, plant and equipment (68) (128) Proceeds from disposals of property, plant and equipment 82 - ------------------------------------------------------ ---- ------- ------- Net cash inflow/ (outflow) from investing activities 151 (127) ------------------------------------------------------ ---- ------- ------- Cash outflow from financing activities Finance cost paid (19) (17) Capital repayment of finance leases (139) - Net cash outflow from financing activities (158) (17) ------------------------------------------------------ ---- ------- ------- Net (decrease) / increase in cash and cash equivalents (41) 188 ------------------------------------------------------ ---- ------- ------- Cash and cash equivalents at beginning of year 284 96 Cash and cash equivalents at end of year 243 284 ------------------------------------------------------ ---- ------- -------
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 March 2011
1. GENERAL INFORMATION
Fuse 8 plc is a holding Company. The Group's principal activities are digital marketing communications services.
Fuse 8 plc, a public limited company, is the Group's ultimate parent company. It is incorporated and domiciled in the United Kingdom.
The financial statements for the year ended 31 March 2011 (including the comparatives for the year ended 31 March 2010 and 31 March 2009) were approved by the board of directors on 29 June 2011. Amendments to the financial statements are not permitted after they have been approved.
The financial information set out in this preliminary announcement does not constitute statutory accounts within the meaning of section 435 of the Companies Act 2006. The group statement of comprehensive income, the group statement of financial position, the group statement of changes in equity, the group statement of cash flows and the associated notes for the year ended 31 March 2011 have been extracted from the group's financial statements upon which the auditor's opinion is unqualified and does not include any statement under Section 498 of the Companies Act 2006. The statutory accounts for the year ended 31 March 2011 will be delivered to the Registrar of Companies following the Group's Annual General Meeting.
2. ACCOUNTING POLICIES
The consolidated financial statements of Fuse 8 plc has been prepared under the historical cost convention and in accordance with International Financial Reporting Standards as adopted by the EU and the International Financial Reporting Standards as issued by the International Accounting Standards Board.
3. SEGMENTAL ANALYSIS
The Group operates in one business segment, the provision of digital marketing communications services, and operates in one geographic segment, the United Kingdom. As such, no further segmental information has been disclosed. No individual customer constitutes 10% or more of the revenue of the Group.
4. REVERSE ACQUISITION
On the 19 July 2010, Fuse 8 plc (formerly Award International Holdings plc) acquired all of the issued share capital of Fuse 8 Group Limited. The transaction has been accounted for as a reverse acquisition under International Financial Reporting Standards. The non-cash fair value of shares awarded was assessed based on the fair value of Fuse 8 Group Limited on the day of acquisition. The amounts recognised for each class of assets, liabilities and contingent liabilities recognised at the acquisition date were as follows:
GBP'000 Trade and other receivables 41 Cash 82 Trade and other payables (5) ------- Net assets acquired 118 Non cash fair value of shares issued 228 Acquisition fees 327 ------- 555 Exceptional cost of acquisition recognised in the income statement 437 =======
All acquisition fees have been recorded within the income statement within exceptional costs.
5. EARNINGS PER SHARE
The calculation of the basic earnings per share is based on the profit on ordinary activities after tax and on the weighted average number of Ordinary shares in issue during the year.
As a result of the reverse acquisition, the weighted average number of shares up until the reverse acquisition is deemed to be the number of shares that were issued by Fuse 8 plc for the reverse acquisition.
The diluted earnings per share figure is the same as the basic earnings per share as no diluting shares or options exist.
The profit and weighted average number of shares used in the calculations are set out below:
Basic and diluted Profit Weighted average number Earnings per share earnings per share GBP'000 of shares Number '000 Pence ----------------------- -------- ----------------------- ------------------ Year ended 31 March 2011 37 11,767 0.3p Year ended 31 March 2010 405 10,215 4.0p
6. NET CASH INFLOW FROM OPERATING ACTIVITIES
2011 2010 GBP'000 GBP'000 ---------------------------------------------------- ------- ------- Operating profit 247 601 Non-cash element of acquisition costs written off 110 - Depreciation 111 98 Profit on disposal of property, plant and equipment (11) - Increase in receivables (254) (448) (Decrease) / increase in payables (37) 113 ---------------------------------------------------- ------- ------- Net cash inflow from operating activities 166 364 ---------------------------------------------------- ------- -------
7. BUSINESS COMBINATION
On 30 November 2010, Fuse 8 plc acquired 100% of the issued share capital of Delete Digital Marketing Limited, a Company incorporated in the United Kingdom.
1,250,000 of shares were issued as consideration to acquire Delete Digital Marketing Limited on 30 November 2010 when the share price was 32p. The consideration has been valued at its fair value on that date of GBP400k.
The amounts recognised for acquiree's assets and liabilities at the acquisition date are as follows:
Carrying amount Adjustments Fair value GBP'000 GBP'000 GBP'000 Total assets 199 (69) 130 Total liabilities (287) - (288) ------------------ ----------------- ---------------- Net liabilities (88) (69) (158) ------------------ ----------------- Fair value of purchase consideration 400 ------------------ Goodwill 558 =============
The primary reason for the acquisition of Delete Digital Marketing Limited was the expected synergies and business opportunities that can be derived from the consolidated entity of Fuse 8 plc and Delete Digital Marketing Limited.
The goodwill that arose on the combination can be attributed to the synergies expected to be derived from the combination and the value of the workforce of Delete Digital Marketing Limited which cannot be recognised as an intangible asset under IAS 38 "Intangible Assets".
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EANKNASDFEFF
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