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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Netb2B2 | LSE:NEB | London | Ordinary Share | GB00B064S128 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 3.375 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number:0562U
Net b2b2 PLC
30 March 2007
30 March 2007
Netb2b2 plc
Interim results for the six months ended 31 December 2006
Netb2b2 plc ("Netb2b2" or "the Group"), the digital communications business,
today announces its interim results for the six months ended 31 December 2006.
Financial and business highlights:
*Turnover increased by 1.3% to #3.2 million (2005: #3.1 million)
*Group operating loss of #168,000 (2005: loss of #134,000)
*Group loss after tax of #186,000 (2005: loss of #140,000)
*Loss per share of 3.07p (2005: loss of 2.48p)
*Cash on group balance sheet #270,000 (2005: #390,000)
*New client contracts wins including from ITN
*Commenced implementation of a Group cost saving programme
Keith Young, Chairman of Netb2b2, commented:
"The next six months and beyond will see Netb2b2 continue to implement
structural changes and the reduction of administrative overheads. We would also
seek to divest non-core operations where growth possibilities are less visible,
and once further changes have been achieved, to also rename the Group. As a
board we are looking forward to returning the business to a much sounder
footing, and to ensure that shareholders, staff and customers are all able to
benefit from these major reforms."
Enquiries, please contact:
Andrew Gannon Neil Boom
Managing Director Gresham PR Ltd.
Netb2b2 PLC 020 7404 9000
020 7689 8800
Azhic Basirov
Smith & Williamson
020 7131 4000
Chairman's statement
In the first six months to 31 December 2006, the Group began to implement a
number of substantial reforms that resulted from last year's root and branch
Strategic Review.
As shareholders are aware from last year's annual report, the board has
repositioned the business to focus more strongly on certain fast-growth niches
in the digital media and entertainment market. Strategically, our goal is to
extract more value from established relationships with blue chip clients that
include ITV, BBC, ITN and Sky as well as to continue to broaden our customer
base through more effective sales and marketing. We are still exploring bolt-on,
small scale acquisitions, but only ones that would be immediately earnings
enhancing.
We are pleased that there has been some encouraging progress within the Group,
in particular from Fernhart New Media and BlueSky.
As we go forward, we are confident that we have the products and services that
are at the forefront of digital media. However, as these interim results
indicate, there is clearly more work to be done, including a need to deliver
greater cost synergies than have been achieved in the six months under review.
Savings have been difficult to achieve against a backdrop facing all companies
that serve the digital market place, which is a severe technical skills
shortage, particularly in central London where most of our businesses operate.
The shortage of skilled new media personnel has produced sharply rising labour
costs and some turnover in staff. This is now being addressed by the Group by an
increased reliance on more flexible consultants.
As well as concentrating on improving profit margins by sharing more overheads,
the board has recognised a particular need to improve the quality and output of
our sales and marketing functions. Accordingly, we are intending to recruit
skilled sales and marketing staff who will work at Group level and represent the
entire portfolio of client products and services.
To support the restructuring strategy, the executive directors will be taking
more direct operational responsibility. The directors' focus will be very much
on top and bottom line growth, supporting the core businesses in their efforts
and in reducing fixed costs where there is unnecessary duplication.
Financial and operational review
We are disappointed that restructuring measures taken earlier have yet to
translate into an improved financial performance. Consequently, Group turnover
has improved only fractionally, up by 1.3% to #3.2 million (2005: #3.1m) while
problems with one major project led to a slightly larger half year loss after
tax of #168,000 compared with an interim loss of #134,000 in 2005. These
problems are likely to continue to depress profitability over the next few
months. In view of the losses sustained, cash flow has been tight and has been
managed by selective deferral of creditors. We intend to accelerate cost savings
and to increase turnover through more efficient sales and marketing. Due to the
contract problem referred to above we are reporting a loss per share of 3.07p
(2005: loss of 2.48p).
We are pleased that the performances of Fernhart New Media and BlueSky have
continued to justify our confidence in these growing businesses. Of particular
note was Fernhart's creation of new online services for ITN using the
recently-launched Microsoft Vista platform. Something very pleasing about this
project is that we can demonstrate Group synergies, because BlueSky were also
contracted to host the services and video content.
Our largest Group company cScape had a chequered six months, encountering a
major problem on one project. Steps have been taken to minimise the impact of
this problem, and to address the balance of its workforce, with a decision to
increase flexibility through the use of more freelance programming and IT staff.
Fortunately, despite this setback, cScape continued to win other major mandates
including a significant new Web design contract to redevelop the website for Hed
Kandi, part of the Ministry of Sound music group. This contract was something of
a technical milestone, making cScape the first new media company to implement
Microsoft's new Office SharePoint Server 2007TM. We believe the significance of
this contract is over and above its contract value. cScape are holders of
Microsoft Gold Certified Partner status; going forward we intend the Group to
benefit more from this accreditation.
Outlook
The next six months and beyond will see Netb2b2 continue to implement structural
changes and the reduction of administrative overheads. We would also seek to
divest non-core operations where growth possibilities are less visible, and once
further changes have been achieved, to also rename the Group. As a board we are
looking forward to returning the business to a much sounder footing, and to
ensure that shareholders, staff and customers are all able to benefit from these
major reforms.
Keith Young
Chairman of Netb2b2
30 March 2007
GROUP PROFIT AND LOSS ACCOUNT
Six months ended 31 December 2006
Note Six Months Six Months Year
Ended Ended Ended
31.12.2006 31.12.2005 30.06.2006
Unaudited Unaudited Audited
#000's #000's #000's
TURNOVER 3 3,194 3,154 6,590
Cost of sales (870) (730) (1,614)
GROSS PROFIT 2,324 2,424 4,976
-------- -------- --------
Administrative expenses pre
exceptional item (2,492) (2,418) (5,134)
Exceptional Item - (140) (20)
-------- -------- --------
Administrative expenses (2,492) (2,558) (5,154)
OPERATING PROFIT/(LOSS)
-------- -------- --------
Pre exceptional item (168) 6 (158)
Exceptional item - (140) (20)
-------- -------- --------
Total operating loss 3 (168) (134) (178)
Interest receivable and similar
income 1 - 1
Interest payable and similar (19) (6) (27)
charges
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION (186) (140) (204)
Non-operating exceptional item - - (112)
Tax on loss on ordinary 5 - - -
activities
LOSS FOR THE FINANCIAL PERIOD (186) (140) (316)
LOSS PER SHARE (PENCE) 6 (3.07p) (2.48p) (5.4p)
GROUP BALANCE SHHET
31 December 2006
Six Months Six Months Year
Ended Ended Ended
31.12.2006 31.12.2005 30.06.06
Unaudited Unaudited Audited
#000's #000's #000's
FIXED ASSETS
Intangible assets 2,436 2,436 2,438
Tangible assets 563 549 570
----- ----- -----
2,999 2,985 3,008
CURRENT ASSETS
Stocks 175 112 141
Debtors 1,439 1,328 1,398
Cash at bank 270 390 121
----- ----- -----
1,884 1,830 1,660
CREDITORS: amounts falling due
within one year
Bank loans and overdraft (169) (125) (141)
Trade and other creditors (2,664) (2,413) (2,264)
------- ------- -------
(2,833) (2,538) (2,405)
NET CURRENT LIABILITIES (949) (708) (745)
------- ------- -------
CREDITORS: amounts falling due (84) - (112)
After one year ------- ------- ------
TOTAL ASSETS LESS LIABILITIES 1,966 2,277 2,151
======= ====== =====
CAPITAL AND RESERVES
Called up share capital 606 596 606
Share premium 553 513 553
Capital redemption reserve 6 6 6
Profit and loss account 801 1,162 986
----- ----- -----
EQUITY SHAREHOLDERS' FUNDS 1,966 2,277 2,151
===== ===== =====
GROUP CASH FLOW STATEMENT
Six months ended 31 December 2006
Note Six Months Six Months Year
Ended Ended Ended
31.12.2006 31.12.2005 30.06.2006
Unaudited Unaudited Audited
#000's #000's #000's
Net cash inflow/(outflow) from
operating activities 7 196 119 (296)
Returns on investments and
servicing of finance 8 (18) (8) (26)
Taxation - - -
Capital expenditure 8 (72) (170) (139)
Acquisitions 8 - (551) (200)
Net cash inflow/(outflow) before
financing 106 (610) (661)
Financing 8 15 574 340
------ ------ -----
Increase/(decrease) in cash in
the period 121 (36) (321)
====== ======= ======
Reconciliation of net cash flow
to movement in net funds
Increase/(decrease) in cash in
the period 9 121 (36) 321
(Increase) in debt and lease
financing 9 (19) (186) (476)
----- ------ ------
Movement in net funds in the 9 102 (222) (797)
period
Net debt at start of period 9 (529) 268 268
------ ----- -----
Net funds/(debt) at end of 9 (427) 46 (529)
period ====== ===== ======
NOTES TO THE ACCOUNTS
Six months ended 31 December 2006
1. FINANCIAL INFORMATION
The financial information is for the six months ended 31 December 2006 and is
neither audited nor reviewed as defined by APB Bulletin 1999/4. The balance
sheet and profit and loss account do not constitute statutory statements within
the meaning of section 240 Companies Act 1985. The results for the year ended 30
June 2006 have been extracted from the financial statements of the group on
which an unqualified report from the auditors has been received and which have
been filed with the registrar of Companies.
2. BASIS OF PREPERATION
The interim financial information has been prepared on the basis of the
accounting policies adopted for the audited accounts for the year ended 30 June
2006 under the historical cost convention and in accordance with applicable
accounting standards.
3. SEGMENTAL INFORMATION
The Group operates in the UK and the whole of its turnover and profit relate to
continuing activities and to the UK market.
Six months Six months Year
Ended Ended Ended
31.12.2006 31.12.2005 30.06.2006
Unaudited Unaudited Audited
#000's #000's #000's
Turnover
Internet services 1,619 1,707 3,464
Publishing and Digital Communication
Services 843 874 1,945
Specialist Hosting 403 341 668
--- --- ---
Media and interactive technology 329 232 503
Central Costs - - 10
------ ------ -----
Group 3,194 3,154 6,590
------ ------ -----
Profit/(loss) before interest and tax
Internet services 34 142 235
Publishing and Digital Communication
Services (4) 33 46
Specialist Hosting 86 64 151
Media and interactive technology 10 30 (16)
Central and other costs (294) (263) (574)
Exceptional costs - (140) (20)
----- ------ -----
Group (168) (134) (178)
----- ------ -----
4. GOODWILL
The board has assessed each subsidiary with reference to its durability, ability
to sustain future long term profitability and assessed ability to maintain
market position. Based on this assessment the board is of the opinion that the
three goodwill elements have indefinite economic lives. The board has carried
out impairment reviews on these goodwill elements and have concluded that their
current recoverable amounts are in excess of their carrying values.
5. TAXATION
No liability to UK Corporation tax arose on ordinary activities for the period
owing to trade losses brought forward from previous periods.
6. LOSS PER ORDINARY SHARE
Basic loss per share is calculated by dividing the loss attributable to ordinary
shareholders by the weighted average number of ordinary shares during the year.
The diluted loss per share is the same as the actual loss per share.
Six Months Six Months Year
Ended Ended Ended
31.12.2006 31.12.2005 30.06.2006
Unaudited Unaudited Audited
#000's #000's #000's
Basic earnings attributable to
ordinary shareholders: (186) (140) (316)
Weighted average number of
ordinary shares 6,061,569 5,644,999 5,846,909
Loss per share: (3.07p) (2.48p) (5.4p)
7. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING
ACTIVITIES
Six Months Six Months Year
Ended Ended ended
31.12.2006 31.12.2005 30.06.2006
Unaudited Unaudited Audited
#000's #000's #000's
Operating loss (168) (134) (178)
Exceptional item - - (112)
Depreciation charges 86 38 147
Loss on disposal/write off of
intangible fixed assets - - 74
Increase in stocks (33) (14) (43)
Increase in debtors (41) (95) (71)
Increase/(decrease) in creditors 352 324 (113)
---- ---- -----
Net cash inflow/ (outflow) from
operating activities 196 119 (296)
==== ===== =====
8. ANALYSIS OF CASH FLOWS
Six Months Six Months Year
Ended Ended Ended
31.12.2006 31.12.2005 30.06.2006
Unaudited Unaudited Audited
#000's #000's #000's
Returns on investments and servicing
of finance
Interest received 1 - 1
Interest paid (12) (6) (15)
Interest element of hire purchase
payments (7) (2) (12)
---- ---- -----
Net cash outflow for returns on
investments and servicing of
finance (18) (8) (26)
===== ==== ====
Capital expenditure
Sale of tangible fixed assets - - 5
Purchase of tangible fixed assets (72) (170) (144)
----- ----- -----
Net cash outflow for capital
expenditure (72) (170) (139)
===== ===== =====
Acquisitions
Purchase of subsidiary undertaking - (551) (172)
Bank overdraft acquired with
subsidiary undertaking - - (28)
----- ----- -----
Net cash outflow for acquisitions - (551) (200)
===== ====== ======
Financing
Issue of ordinary share capital - 386 61
Bank loans (invoice discounting) 43 - 333
Capital element of hire purchase
payments (28) 188 (54)
------ ----- ----
Net cash inflow from financing 15 574 340
====== ===== ====
9. ANALYSIS OF CHANGES IN NET (DEBT)/ FUNDS
At 1 July 2006 Cash flow At 31 December
2006
Net cash: #000's #000's #000's
Cash at bank and in hand 121 149 270
Bank overdrafts (141) (28) (169)
------- ------ -------
(20) 121 101
======= ====== =======
Debt:
Bank Loan (invoice discounting) (333) (43) (376)
Hire purchase agreements (176) 24 (151)
------ ---- -----
Total (529) 102 (427)
====== ==== =====
At 31 December At 31 December At 1 July
2006 2005 2006
#000's #000's #000's
Analysed in balance sheet
Cash at bank and in hand 270 390 121
Bank overdrafts & loans (536) (125) (461)
Bank overdrafts & loans due
after 1 year (9) - (13)
Hire purchase payments due
within 1 year (77) (219) (77)
Hire purchase payments due after
1 year (75) - (99)
----- ----- ----
(427) 46 (529)
====== ===== =====
10. COPIES OF THE INTERIM REPORT
Copies of the interim report are available from www.netb2b2.com or the company
secretary at Netb2b2 Plc, Central House, 142 Central Street, London, EC1V 8AR.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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