Milestone Group PLC Milestone Group Plc : Final Results

 
TIDMMSG 
 
   MILESTONE GROUP PLC 
 
   ("Milestone" or the "Company") 
 
   Final Results 
 
   Milestone, the AIM quoted (AIM: MSG) provider of digital media and 
technology solutions, announces its final results for the year ended 30 
September 2016. 
 
   Highlights 
 
 
   -- Blockchain technology development capabilities now available 
 
   -- Nexstar now has the capabilities to publish and distribute independent 
      films through Amazon Prime and other premium global streaming and 
      purchasing services 
 
   -- Nexstar agreements to provide prepaid card and virtual banking services 
 
   -- Post year-end, Nexstar music publishing to 193 countries via 120 online 
      music stores 
 
   -- Membership of the Social Stock Exchange confirmed 
 
   -- Co-operation agreements signed with the Green Skills Partnership, the 
      Sean Edwards Foundation and Apprenticeships 4 England 
 
   -- New editorial director appointed to Disorder Magazine 
 
   -- Winning in the Game of Life(TM) rolled out across 100 primary schools 
      classes across the UK 
 
 
   The independent auditor's report for the year ended 30 September 2016 
contains an emphasis of matter paragraph in respect of going concern. An 
extract taken from the text of the auditor's opinion is set out below in 
part 1 of the notes to this announcement. 
 
   Deborah White, CEO and Interim Chairman, commented: 
 
   "The last 12 months have been about consolidation. Milestone's business 
model is to use social initiatives and technology to generate value for 
its shareholders and create social impact. This involves a number of 
products and services, some that are using Blockchain technology, that 
are now ready for market. 
 
   Although this past year has been challenging, the continued support of 
the Company's shareholders, network of partnerships and its staff has 
meant that the Group remains wholly focused on ensuring that all parts 
of the business are revenue generating or are ready to drive sales 
during the coming months." 
 
   For further information 
 
 
 
 
Milestone Group PLC 
Deborah White, Chief Executive                     Tel: [phone] 
 
Cairn Financial Advisers LLP, Nominated Adviser 
Liam Murray/Sandy Jamieson                         Tel: [phone] 
 
Hybridan LLP, Broker 
Claire Louise Noyce                                Tel: [phone] 
 
Walbrook PR Limited, PR 
Gary Middleton/Paul Cornelius/Paul Whittington     Tel: [phone] 
 
 
   CHAIRMAN'S STATEMENT 
 
   The last 12 months have been about consolidation 
 
   Milestone's business model is to use social initiatives and technology 
to generate value for its shareholders and create social impact. This 
involves a number of products and services that are now ready for 
market. 
 
   This important period of development has been underpinned by an 
expansion of the company's technology capabilities, including a move 
towards using Blockchain as the foundation for some of our digital 
products and services. This innovative technology is now being 
integrated into Nexstar's media and commerce product offerings, with 
additional services such as artist IP rights and secure document 
tracking under review. 
 
   The ability to provide Blockchain technology into a rapidly growing 
marketplace is a key differentiator for Milestone and one we will be 
actively promoting over the coming months. 
 
   Our continued focus on social initiatives is a commercial decision 
founded on proven societal values and market trends. Evidence supports 
the theory that consumers want to associate with those companies and 
brands that add value to others and our company structure has been 
established to deliver as such. 
 
   In April 2016, Milestone achieved a key goal of being accepted as a 
member of the Social Stock Exchange. A listing on the Social Stock 
Exchange reaffirms Milestone's status as an established company 
combining initiatives for social benefit as well as shareholder value. 
 
   This was further reinforced post year-end, with the signing of a 
strategic partnership between Milestone and the Social Stock Exchange. 
This partnership allows for the cross promotion of each other's products 
and services in line with our shared vision regarding the role business 
can play in creating community and social value. 
 
   Our Flagship Initiative - Passion Project 
 
   The Milestone Foundation plays a key role in the operation and ultimate 
commercialisation of the Passion Project initiative, which is operated 
by the Foundation under a commercial licence from the company. 
 
   Following its launch at the House of Lords in October 2015, the 
Milestone Foundation is now fully staffed with operations being overseen 
by Kevin Everett, Non-Executive Director of the Company and Chairman of 
the Sir John Cass Foundation, who has considerable experience in both 
the profit and not-for-profit sectors. 
 
   The launch of the Foundation was followed during the year by the 
formalisation of a number of distribution and support network 
relationships needed for the delivery and promotion of the Passion 
Project, which included, amongst others, the Green Skills Partnership - 
a network of 44 member organisations, comprising of over 2 million 
employees collectively - and Apprenticeships 4 England, which has a 
member network of over 30,000 businesses. 
 
   During the year, the Milestone Foundation and the Passion Project worked 
with the Metropolitan Police and its Divert programme. Divert is a new 
programme created by the Metropolitan Police Service, aimed at 
addressing a gap in statutory provision for young adults aged 18-25 
entering police custody by demonstrating and establishing an improved 
framework for handling young offenders. 
 
   By working with the Milestone Foundation and the Passion Project, Divert 
is now equipped to offer emotional intelligence training and mentoring, 
aimed at guiding young people into sustainable employment and reduce 
reoffending. The pilot programme held in Brixton resulted in a reduction 
of the reoffending rate from 29% to 7% during the 12-month period. 
 
   After the year-end, the Foundation was successful in a number of grant 
funding applications that will be used to fund its activities. Its 
strategy of attracting funding for key projects is beginning to see 
results, which will result in a reduction in Milestone's operational 
responsibilities and development costs. 
 
   Launch of Alchemy 
 
   As part of the Company's vision of using media and technology for good, 
Nexstar developed a fundraising and marketing platform for the 
Foundation; this new platform is called Alchemy. Alchemy allows 
customers to: 
 
 
   1. buy digital content, with a percentage of each transaction going to the 
      Foundation; 
 
   2. make a donation to the Foundation directly; or 
 
   3. help support social initiatives through crowd funding. 
 
 
   The Foundation will use the platform to raise awareness and funding for 
its initiatives, whilst also attracting support and attention from the 
corporate marketplace and celebrity endorsements. The platform provides 
the company with a useful marketing tool for showcasing its products and 
services to the Foundation's growing distribution network. 
 
   Nexstar 
 
   Nexstar has undergone a period of substantial development, streamlining 
of process and signing of contracts. The activation of these contracts 
has been slower than anticipated with returns expected to develop during 
Q2 2017 and with further growth throughout the year. 
 
   This part of the business can now be split into three key areas: 
 
 
   1. Digital Financial Services - Including a money-over-IP platform that 
      supports virtual bank accounts, payroll, loyalty and rewards cards, 
      prepaid debit cards, blockchain and cryptocurrency. These services 
      complement the Passion Project by supporting the unbankable and enabling 
      prepaid card options to be used to receive salary payments. 
 
 
   1. Digital Content Publishing & Distribution - Using Black Cactus' Backstage 
      HD digital platform, Nexstar's music offering gives independent musicians 
      and filmmakers an affordable and effective way of publishing and selling 
      their content online via services such as iTunes, Apple Music, Amazon 
      Music, Amazon Prime, Spotify and Deezer. This service can be offered to 
      members of the Passion Project, providing young creatives with an avenue 
      to promote their talents. 
 
 
   1. Social Media Tools & Analytics - Providing our clients with deep insights 
      into the reach and success of their social media campaigns and media 
      publication. 
 
 
   Throughout the past year, Nexstar has developed strategic relationships 
with partners needed to deliver these services, including an agreement 
in September 2016 to distribute independent film and video to the Amazon 
Prime global streaming service. This was followed in October 2016, with 
the announcement of the distribution of the first independent film, 
Brash Young Turks, to the service. 
 
   After the year-end we announced an agreement between Nexstar joint 
venture partner, Black Cactus Holdings Pty Ltd ("Black Cactus"), and 
Benefits on Madison, Inc. ("Madison") which appointed Nexstar as an 
independent sales organisation (ISO) allowing it to issue prepaid and 
debit cards, as well as promote, market and solicit orders for Madison's 
extensive range of stored-value card services. 
 
   Following this announcement, Nexstar entered into agreements to provide 
prepaid cards to a number of partners including a UK-based entertainment 
organisation for their payroll and an international money transfer 
group. Nexstar is now poised to take advantage of the structure that has 
been put in place and will continue to play a significant role in the 
development of the group. 
 
   Relaunch of Disorder Magazine 
 
   In April 2016, Oliver Horton was appointed as the Editorial Director of 
Milestone's wholly owned subsidiary, Disorder UK Magazine. Under his 
direction Disorder Magazine was relaunched in November 2016, with a 

clear focus on music, fashion and the championing of young talent. This 
was accompanied by a new distribution plan, allowing Disorder's new 
quarterly publication to be featured within creative colleges and 
universities across the country with plans to sell the magazine 
digitally, commencing in Q2 2017. 
 
   Winning in the Game of Life(TM) 
 
   Our curriculum-based educational programme, which is designed to build 
young people's emotional intelligence, is currently undergoing a pilot 
in 100 primary school classes across the country. The results of the 
pilot will support applications for funding via the Foundation, and 
provide evidence for educational partners as part of the Company's sales 
and marketing campaign. It will also be used to demonstrate the proof of 
concept for expansion and integration into the Passion Project and its 
associated initiatives. 
 
   Management Changes 
 
   In January 2016, Patrick Vigors was appointed as Interim Chief Financial 
Officer, joining the management team. Patrick replaced Jim Brown, who 
resigned following three years of service to the business to allow him 
to focus more on his other business interests. 
 
   In February 2017, David Hill resigned from his position as Non-Executive 
Director following six years with the Company. The Board are in the 
process of appointing Sean Sydenham as his replacement. 
 
   Financial Summary 
 
   During the year, the Group's net loss was GBP1,667,270 (2015: 
GBP1,402,542). Revenues were GBP71,359 (2015: GBP318,035) and net 
liabilities at the period end were GBP1,019,656 (2015: GBP1,706,090). 
During the year, the Directors agreed to write off a total of GBP704,347 
of contingent liability and Directors' trade payables. 
 
   These results are presented under European Union Adopted International 
Financial Reporting Standards ("EU Adopted IFRS"). 
 
   Funding 
 
   During the year, the Company issued 191,911,950 new ordinary shares for 
a total consideration of GBP1,919,120 of which GBP1,823,794 was received 
in cash and GBP95,326 was in exchange for goods or services received. 
 
   Since the year-end, the Company has issued 298,143,429 new ordinary 
shares, raising GBP748,720 in cash and exchanging GBP45,701 worth for 
services received. As announced on 9November 2016, a further 
GBP1,250,000 of cash was due to have been received for these shares from 
the Company's placee and this amount remains outstanding. The Company is 
working with the subscriber to find a solution. Funds from this placing 
were expected to facilitate investment into marketing, key staff hires 
and additional development of the Passion Project. 
 
   The Company continues to carefully manage its working capital position 
and will need to raise further monies through subscriptions for new 
shares in the short term to continue to support its business activities 
until the Company is fully revenue generating. 
 
   The Company remains firmly focused on generating revenue through all of 
its activities, as well as developing further opportunities. Protecting 
the interest of the Company's shareholders is a priority and the Board's 
strategy is to seek to raise funds on a basis that is fair to all. 
 
   Outlook 
 
   Although this past year has been challenging, the continued support of 
the Company's shareholders, network of partnerships and its staff has 
meant that the Group remains wholly focused on ensuring that all parts 
of the business are revenue generating or are ready to drive sales 
during the coming months. 
 
   Deborah White 
 
   Chief Executive Officer and Interim Chairman 
 
   27 February 2017 
 
   Consolidated statement of comprehensive income for the year ended 30 
September 2016 
 
 
 
 
                                                 2016         2015 
                                                  GBP          GBP 
 
Revenue                                            71,359      318,035 
 
Cost of sales                                    (13,856)    (140,214) 
 
Gross profit                                       57,503      177,821 
 
Other operating income                              1,738            - 
Administrative expenses                       (1,820,652)  (1,573,771) 
 
                                              (1,818,914)  (1,573,771) 
 
Loss from operations                          (1,761,411)  (1,395,950) 
 
 
Net finance (expense) / income                    (2,104)      (6,592) 
 
Loss before taxation                          (1,763,515)  (1,402,542) 
 
Taxation charge                                    96,245            - 
 
Total comprehensive loss for the year         (1,667,270)  (1,402,542) 
 
Attributable to owners of the parent          (1,667,270)  (1,402,542) 
 
Basic and diluted loss per share (pence)           (0.25)       (0.25) 
 
 
   Consolidated statement of financial position at 30 September 2016 
 
 
 
 
                                                 2016          2015 
                                                 GBP           GBP 
 
Non-current assets 
Intangible assets                                       1        18,914 
                                                        1        18,914 
Current assets 
Trade and other receivables                       187,836        63,477 
Cash and cash equivalents                         128,462        92,495 
                                                  316,298       155,972 
 
Current liabilities 
Trade and other payables                      (1,201,928)   (1,774,449) 
Interest bearing loans                          (134,027)     (106,527) 
                                              (1,335,955)   (1,880,976) 
 
 
Net liabilities                               (1,019,656)   (1,706,090) 
 
Capital and reserves attributable to 
 owners of the Company 
Share capital                                     783,998       592,086 
Share premium account                          15,073,350    13,395,669 
Shares to be issued                                63,081       502,848 
Merger reserve                                 11,119,585    11,119,585 
Capital redemption reserve                      2,732,904     2,732,904 
Retained losses                              (30,792,574)  (30,049,182) 
Total Equity                                  (1,019,656)   (1,706,090) 
 
 
 
 
   Consolidated statement of cash flows for the year ended 30 September 
2016 
 
 
 
 
Cash flow from operating activities                      2016         2015 
                                                          GBP          GBP 
 
Loss for the year                                     (1,667,270)  (1,402,542) 
Adjustments for: 
Amortisation of intangible assets                          18,913       37,814 
Net bank and other interest charges                         2,104      (6,592) 
Services settled by the issue of shares                    45,799       30,619 
Issue of share options and warrants charge                883,878       18,235 
 
Net cash before changes in working capital              (716,576)  (1,322,466) 
 
(Increase) / decrease in trade and other receivables    (124,358)       51,507 
(Decrease) / increase in trade and other payables       (572,523)      444,743 
 
Cash outflow from operations                          (1,413,457)    (826,216) 
 
Interest received                                              19           10 
Interest paid                                               (623)          (2) 
 
Net cash flows from operating activities              (1,414,061)    (826,208) 
 
 
Financing activities 
Issue of ordinary share capital                         1,424,028      809,848 
Repayment of loan                                        (65,000)     (73,500) 
New loans raised                                           91,000      106,500 
 
Net cash flows from financing activities                1,450,028      842,848 
 
 
Net increase in cash                                       35,967       16,640 
Cash and cash equivalents at beginning of year             92,495       75,855 
 
Cash and cash equivalents at end of year                  128,462       92,495 
 
 
 
 
 
 
   Consolidated statement of changes in equity for the year ended 30 
September 2016 
 
 
 
 
                                       Shares to 
                  Share      Share        be        Other       Retained        Total 
                 Capital    Premium     issued     Reserves     Earnings       Equity 
                   GBP        GBP         GBP        GBP           GBP           GBP 
 
Balance at 
 30 Sept 2014     553,961  13,056,175     40,000  13,852,489   (28,664,875)  (1,162,250) 
 
Loss for the 
 year                   -           -          -           -    (1,402,542)  (1,402,542) 
Cash received 
 in advance of 
 share issue            -           -    462,848           -              -      462,848 
Shares issued      38,125     339,494          -           -              -      377,619 
Share options           -           -          -           -         18,235       18,235 
 
Balance at 
 30 Sept 2015     592,086  13,395,669    502,848  13,852,489   (30,049,182)  (1,706,090) 
 
Loss for the 
 year                   -           -          -           -    (1,667,270)  (1,667,270) 
Cash received 
 in advance of 
 share issue            -           -     63,081           -              -       63,081 
Contingent 
 consideration 
 written off            -           -   (40,000)           -         40,000            - 
Shares issued     191,912   1,677,681  (462,848)           -              -    1,406,745 
Share options           -           -          -           -        883,878      883,878 
 
Balance at 
 30 Sept 2016     783,998  15,073,350     63,081  13,852,489   (30,792,574)  (1,019,656) 
 
 
   Notes to the financial statements 
 
   1. Basis of preparation 
 
   Milestone Group PLC is a company registered and resident in England and 
Wales. 
 
   The financial information set out in this announcement does not 
constitute the Group's statutory accounts, as defined in Section 435 of 

the Companies Act 2006, for the years ended 30 September 2016 or 30 
September 2015, but is derived from the 2016 Annual Report. Statutory 
accounts for 2015 have been delivered to the Registrar of Companies and 
those of 2016 will be delivered in due course. 
 
   The consolidated statement of comprehensive income, consolidated 
statement of financial position, consolidated cash flow, consolidated 
statement of changes in equity (above) and associated notes are extracts 
from the financial statements and do not constitute the Group's 
statutory accounts. 
 
   Statutory accounts for the year to 30 September 2015 and 30 September 
2016 have been reported on by the Independent Auditors. 
 
   The Group financial statements have been prepared and approved by the 
Directors in accordance with International Financial Reporting Standards 
as adopted by the EU ("EU Adopted IFRSs"). 
 
   The Independent Auditor's Report on the Annual Report and Financial 
Statements for 2015 and for 2016 was unqualified, but did draw attention 
to matters by way of emphasis relating to the basis of preparation, 
which is reproduced below. 
 
   In forming the Auditor's opinion on the financial statements, which is 
not modified, the Auditor's have considered the adequacy of the 
disclosure made in note 1 to the financial statements concerning the 
group's ability to continue as a going concern. The going concern status 
of the group is dependent upon the management of the timing of 
settlement of its liabilities and the raising of further funds in the 
immediate to short term and thereafter on the forecast profitability of 
new strategic partnerships and joint ventures which have recently 
commenced and for which the degree of success cannot yet be reliably 
demonstrated. 
 
   Forecasts prepared by management indicate that if they are unable to 
manage the group's liabilities as planned or the external fundraising 
does not occur in the immediate term and, subsequently, the future 
projects do not prove as profitable as forecast the group would have an 
immediate requirement to seek alternative sources of funding. These 
conditions, along with the other matters explained in note 1 to the 
financial statements, indicate the existence of a material uncertainty 
which may cast significant doubt about the group's ability to continue 
as a going concern. The financial statements do not include the 
adjustments that would result if the group was unable to continue as a 
going concern. 
 
   The basis of preparation is reproduced below. 
 
   Going Concern 
 
   The Group's business activities, together with the factors likely to 
affect its future development, performance and position are set out in 
the Chairman's statement and below. The financial position of the Group, 
its cash flows, liquidity position and borrowing facilities are 
described in the financial statements. In addition note 15 to the 
financial statements includes the Group's objectives, policies and 
processes for managing its capital; its financial risk management 
objectives; details of its financial instruments and exposures to credit 
risk and liquidity risk. 
 
   The net liability balance sheet position as at 30 September 2016, being 
the Group's financial year-end, was GBP1,019,656 (2015: GBP1,706,090). 
Subsequent to the balance sheet date, the Board has been able to agree 
funding in the form of further share issues raising GBP748,720 in cash 
and exchanged GBP45,701 worth of shares for services received. In 
addition, and as discussed in the Chairman's statement, a further 
GBP1,250,000 was agreed in the form of further share issue, with the 
Company's placee, however this has not been received by the Company. The 
Board is continuing to seek a resolution. The funding received to date 
will go part way to cover year-end liabilities and the Company will be 
dependent upon future funding and revenues to meet the remaining 
obligations, as discussed below. 
 
   The Company continues to be reliant upon its continuing ability to 
manage the timing of settlement both of its current liabilities and 
future liabilities as they arise. There is also a need for successful 
on-going equity fundraises and / or loans in the immediate to short term 
thereafter, while sales plans and projections come into effect, 
especially in relation to revenues generated from new strategic 
partnerships and joint ventures and from the Passion Project. The Board 
has prepared forecasts to reflect the revenues expected to be generated 
by the Group and partnerships. The Company is fully focused on ensuring 
that sales plans are followed to ensure that the business becomes 
self-sustaining in the near future. 
 
   The Directors have concluded that the need to generate future funds from 
further fundraising and from trading activities to satisfy the 
settlement of its on-going and future liabilities represents a material 
uncertainty, which may cast significant doubt upon the Group's and the 
Company's ability to continue as a going concern. Nevertheless after 
making enquiries and considering this uncertainty and the measures that 
can be taken to mitigate the uncertainty, the Directors have a 
reasonable expectation that the Group and the Company will have adequate 
resources to continue in existence for the foreseeable future. For these 
reasons they continue to adopt the going concern basis in preparing the 
annual report and accounts. The financial statements do not include any 
adjustments that would result if the Group and Company was unable to 
continue as a going concern. 
 
   2. Loss per share 
 
   The calculation of the basic loss per share is based on the loss 
attributable to ordinary shareholders divided by the weighted average 
number of shares in issue during the year. The calculation of diluted 
loss per share is based on the basic loss per share, adjusted to allow 
for the issue of shares and the post tax effect of dividends and 
interest, on the assumed conversion of all other dilutive options and 
other potential ordinary shares. 
 
 
 
   There were 174,189,116 share options and 110,931,460 share warrants 
outstanding at the year-end (2015: 104,522,000 and nil). However, the 
figures for 2016 and 2015 have not been adjusted to reflect conversion 
of these share options as the effects would be anti-dilutive. 
 
 
 
 
                                          2016                              2015 
                             Weighted                          Weighted 
                                          Per                               Per 
                              average    share                  average    share 
                  Loss       number of   amount     Loss       number of   amount 
                   GBP        shares     Pence       GBP        shares     Pence 
Basic and 
 diluted loss 
 per share 
 attributable 
 to 
 shareholders  (1,667,270)  653,810,277  (0.25)  (1,402,542)  572,401,922  (0.25) 
 
 
 
   3.             Posting of Accounts 
 
   The Report and Accounts of Milestone Group PLC, including the Notice of 
Annual General Meeting will be posted to shareholders shortly. 
 
   A further announcement will be made by the Company at such time. 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Milestone Group PLC via Globenewswire 
 
 
  http://www.milestonegroup.co.uk/ 
 

(END) Dow Jones Newswires

February 28, 2017 02:00 ET (07:00 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.