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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Advance Visual | LSE:ACV | London | Ordinary Share | GB0002565355 | ORD 0.1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.16 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:8631S Advance Visual Communications PLC 13 March 2002 13 March 2002 Advance Visual Communications plc ('AVC' or 'the Company') Interim results for the six months ended 31 December 2001 Highlights • Restructuring focuses AVC on core marketplace in the UK • Restructuring delivers annualised cost savings of over GBP 2 million • Additional focus on evolving technologies such as wireless enterprise data market • Turnover in the period at GBP 778,000 (2000: GBP 1,069,807) • Losses before amortisation and depreciation at GBP 1,233,000 (2000: GBP 1,174,198) • Cash balance at end of period at GBP 1,067,000 • Following the completion of the restructuring Chief Executive Officer will resign. Ali Amiri, Sales and Alliances Director to be appointed as Group Managing Director Chairman, Barclay Douglas said: "The first half of our financial year to 31 December 2001 proved to be a very difficult period for the Company. The marketplace and general economic conditions continued to deteriorate and were compounded by the tragic events of 11 September. "For the remainder of the current year ending 30 June 2002, contract wins are essential to reach break even and reduce cash burn. Your Board and management team are striving to safeguard the Company and to move it towards profitability." For further information: Massoud Amiri, Chief Executive Officer Advance Visual Communications plc 020 7554 8680 Alex Borrelli, Director - Head of Corporate Broking Shore Capital & Corporate LTD 020 7408 4090 David Rydell / Billy Clegg Bell Pottinger Financial 020 7861 3867 Advance Visual Communications plc ('AVC' or 'the Company') Interim results for the six months ended 31 December 2001 Chairman's Statement The first half of our financial year, being the six months to 31 December 2001 proved to be a very difficult period for the Company. The marketplace and general economic conditions continued to deteriorate and were compounded by the tragic events of 11 September. As a result, during this period, AVC's web agencies in Paris and Berlin failed to perform to our expectations while the existing businesses in Bradford and Geneva suffered a distinct slow-down. Paris and Berlin were not contributing towards covering central overheads while the internet production centre in Sophia, Antipolis had become severely underutilised and therefore no longer viable. The strategic review which I referred to in my last report included an extensive search for a merger partner or acquirer in conjunction with our professional advisors at the time. This search, which had been initiated in May, was ineffective as the level of corporate transactions in the market had come to a virtual stand still. There was also very limited appetite to a potential fund-raising from institutional shareholders. Your Board concluded that, in order to preserve the Company and reduce radically cash outflows, we had to focus on our core UK activities and abandon our pan-European business model. Consequently, in November 2001 the directors of our European subsidiaries were informed that the Company could no longer finance their operations and that they needed to take appropriate measures. Subsequently, Advance eProductions SAS in Sophia Antipolis, France, filed for liquidation. Advance Visual Communications GmBH in Berlin filed for closure. Advance Visual Communications SARL in Paris was sold back to its management for approximately GBP 9,000. Advance Visual Communications SA in Geneva, whose clients and operations were wholly dependent on the production centre in Sophia Antipolis, sold its non cash assets, operations and clients to Label Communication SA, a Swiss web agency, for approximately GBP 50,000. The total shares issued for the acquisition of all of the above subsidiaries amounted to 17.8 million shares, or 11% of AVC's outstanding shares. While the dilution for those acquisitions was not substantial, the professional fees related to the acquisitions and particularly the continued financing of the loss-making operations had been exerting considerable strain on AVC's cash flow. Overall, staff numbers were reduced from 70 to 25, including reductions in the head office and the resignation of two AVC Directors. The resultant reduction in operational cost is more than GBP 2 million per annum, which is in addition to the August cost-cutting initiatives already announced of around GBP 800,000 per annum. Group revenues for the six months ended 31December 2001 were GBP 778,000 of which Internet Professional Services revenues were GBP 667,000. This is a 27% drop from the same period's revenue in 2000 of GBP 1,070,000. The drop in revenues is principally due to a 73% drop in Video, Multimedia and Events sales. In contrast, Internet Professional Services revenues in our UK operations grew 64% to GBP 270,000. Geneva's Internet revenues, however, dropped 20% to GBP 344,000. Discontinued operations (Geneva, Paris, Sophia Antipolis and Berlin) accounted for 51% of the Group's revenues but accounted for 62% of operating costs at the EBITDA level when head office costs are excluded. The continuing UK operations account for the remaining 49% of sales. 71% of the UK revenues were Internet based. Losses after taxation for the six-month period were GBP 3,074,000. A substantial proportion of this figure relates to two non-cash charges comprising GBP 1,752,000 write-off of goodwill associated with the discontinued operations and GBP 95,000 of depreciation. Losses before amortisation and depreciation for the period were therefore GBP 1,233,000 of which GBP 498,000 is associated with discontinued operations. GBP 152,000 related to non-recurring costs for legal and professional services connected with the restructuring. Thus, losses before amortisation and depreciation of GBP 584,000 are actually linked with our current ongoing operations. Current annualised operational cost has been reduced to GBP 1.5 million from GBP 4.25 million at the start of our fiscal year. The cash balances at the end of the period were GBP 1,067,000. By the 28 February 2002, this had reduced to GBP 850,000, of which GBP 245,000 remains within the Swiss subsidiary currently in the process of closure (most of the cash is deemed recoverable). After completing the remaining details of this complicated restructuring, Massoud Amiri is resigning as Chief Executive Officer and Director of AVC at the end of March. Ali Amiri will be appointed as Managing Director. The Board believes that Ali Amiri and the existing executive team who have been managing the sales and operations of the group while Massoud was focusing on a rapid restructuring are well-placed to drive the Company forward in its new form. On behalf of the Board of AVC, I would like to thank Massoud Amiri for leading the Company during a very turbulent economic period. He engineered AVC's turnaround while it was still on Ofex in 1999, managed its AIM flotation in 2000 and its European endeavours in 2001. Although our original business plan and ambitions have not materialised, the survival of the Group is partly owed to the decisive cost cutting and restructuring actions he and his team undertook on several occasions. We wish him well in his future endeavours. It is also important to note that Interactive Horizons Limited (IHL), Massoud Amiri's original investment backers, who own 35% of AVC's shares and in which both Massoud and Ali Amiri have beneficial interests, have indicated their continuous support for the Company and have no present intention to dispose of their shareholdings. Moving forward, Advance Digital Productions Limited in Bradford and Advance London Limited (previously xoo), continue providing Internet, Digital Video, Multimedia and Events services to clients. We have also decided to focus on evolving technologies and forge alliances and partnerships with leading providers of these technologies. The wireless enterprise data market is set to grow rapidly with the advent of 2.5G (GPRS) networks. AVC has entered into a reseller partnership with BT Cellnet's BlackBerry wireless e-mail solution offering in the UK as a foray into this growing market. We have started building a pipeline of opportunities since January and expect a four to five month sales cycle for this product. Additionally, we have entered into a reseller partnership with Onset Technology to enhance our core BlackBerry offering by enabling the reading of e-mail attachments. Management seeks further alliances which could enhance revenues from the wireless client base we are targeting. Due to the rapid prevalence of web sites in corporations and government organisations, Content Management Solutions (CMS) has become a rapidly growing market. These middleware solutions enable non-technical line managers to update and manage web sites quickly and cost-effectively. AVC is in the process of partnering with a major European mid-market CMS provider and we expect to make an announcement shortly. Along with our own internally-produced 'Trinity' solution covering low-end content management solutions, we are positioning ourselves to exploit this growing segment of the market. In particular, we will be focusing on the government sector where we believe demand is strong and AVC has established trading experience. For the remainder of the current year ending 30 June 2002, contract wins are essential to reach break-even and reduce cash burn. Your Board and management team are striving to safeguard the Company and to move it towards profitability. Barclay Douglas Chairman of the Board Advance Visual Communications PLC Consolidated Profit and Loss 6 months ended 6 months ended 12 months ended Account 31 December 2001 31 December 2000 30 June 2001 (unaudited) (unaudited) (audited) Turnover GBP GBP GBP Continuing operations 311,563 1,069,807 2,053,783 Acquisitions 67,678 - - Discontinued operations 398,264 - - ----------- ----------- ------------ 777,505 1,069,807 2,053,783 ----------- ------------ ------------ Operating loss Continuing operations (777,182) (1,132,105) (2,553,884) Acquisitions (24,246) - - Discontinued operations (527,276) - - Goodwill written off (1,752,078) (48,048) (101,430) -------------- -------------- -------------- (3,080,782) (1,180,153) (2,655,314) Net interest receivable 18,685 5,955 77,302 --------------- --------------- --------------- Loss on ordinary activities (3,062,097) (1,174,198) (2,578,012) before taxation Tax on loss on ordinary (11,807) (17,911) (38,182) activities ---------------- ---------------- ---------------- Loss on ordinary activities after (3,073,904) (1,192,109) (2,616,194) taxation ========= ========= ========= Basic loss per ordinary share (1.9)p (1.1)p (2.0)p (note 3) Diluted loss per ordinary share (1.9)p (1.1)p (2.2)p (note 3) Consolidated Balance Sheet As at As at As at as at 31 December 2001 31 December 2001 31 December 2000 30 June 2001 Fixed assets (unaudited) (unaudited) (audited) GBP GBP GBP Intangible assets 570,223 1,793,148 2,102,457 Tangible assets 264,938 513,670 431,668 Investments - 25,000 - ------------- ------------- ------------- 835,161 2,331,818 2,534,125 ------------- ------------- ------------- Current assets Stock and work in progress 11,906 57,586 176,452 Debtors 248,149 363,090 404,635 Cash at bank 1,066,796 3,917,690 2,287,166 ------------- ------------- ------------- 1,326,851 4,338,366 2,868,253 Creditors: amounts falling due (359,922) (690,850) (693,188) within one year ------------- ------------- ------------- Net current assets 966,929 3,647,516 2,175,065 ------------- ------------- ------------- Total assets less current 1,802,090 5,979,334 4,709,190 liabilities Creditors: amounts falling due (64,578) (121,502) (39,408) after more than one year ------------ ------------ ------------ 1,737,512 5,857,832 4,669,782 ======== ======== ======== Capital and reserves Called up share capital 1,615,755 1,490,870 1,566,255 Share premium account 6,718,018 6,440,825 6,634,893 Merger reserve 1,562,799 1,562,799 1,562,799 Other reserves (21,025) 14,464 (25,721) Profit and loss account (8,138,035) (3,651,126) (5,068,444) -------------- -------------- -------------- Equity shareholders' funds 1,737,512 5,857,832 4,669,782 ======== ======== ======== Consolidated Cash Flow Statement 6 months ended 6 months ended 12 months ended 31 December 2001 31 December 2000 30 June 2001 (unaudited) (unaudited) (audited) GBP GBP GBP Net cash outflow from operating (1,121,830) (960,603) (2,506,448) activities (note 4) Returns on investments and servicing of finance Interest received 24,878 14,480 94,520 Interest element of finance lease (6,193) (8,525) (17,218) rentals ----------- ----------- ----------- Net cash inflow from returns on investments and servicing of finance 18,685 5,955 77,302 Purchase of tangible fixed assets (41,234) (119,563) (186,442) Disposal of tangible fixed assets 11,422 - 38,044 Investment - (25,000) - ----------- ----------- ----------- Net cash outflow from capital expenditure and financial investment (29,812) (144,563) (148,398) Acquisitions and disposals Purchase of subsidiary undertaking (20,856) - (36,049) Net cash acquired with subsidiary 2,448 - 16,455 ------------ ------------ ------------ Net cash outflow from acquisitions and (18,408) - (19,594) disposals ------------ ------------ ------------ Net cash outflow before financing (1,151,365) (1,099,211) (2,597,138) --------------- --------------- --------------- Financing Capital element of finance lease (33,088) (46,650) (127,546) rentals Repayment of long term loans (37,917) (30,000) (69,000) Issue of ordinary share capital 2,000 5,758,347 5,758,346 Expenses paid in connection with issue - (623,500) (664,048) of shares Warrant instrument - (27,848) - ------------- ------------- ------------- Net cash (outflow) / inflow from (69,005) 5,030,349 4,897,752 financing --------------- --------------- --------------- (Decrease) / increase in cash (1,220,370) 3,931,138 2,300,614 ========= ========= ========= Statement of Total Recognised Gains and 6 months ended 6 months ended 12 months ended Losses 31 December 2001 31 December 2000 30 June 2001 (unaudited) (unaudited) (audited) GBP GBP GBP Loss for the financial period (3,073,904) (1,192,109) (2,616,194) Currency translation differences 9,009 11,415 (25,270) --------------- --------------- --------------- Total recognised gains and losses (3,064,895) (1,180,694) (2,641,464) relating to the period --------------- --------------- --------------- Notes on the Interim Results 1. The results for the 6 months to 31 December, 2001, which are neither audited nor reviewed by the auditors have been prepared on the basis of the accounting policies adopted for the period ended 30 June 2001 as set out in the Company's annual report and accounts after taking into account any accounting standards issued since that date, none of which have resulted in any changes to the accounting policies of the company. 2. The results for the period ended 30 June 2001 are an abridged version of the Group's full accounts for that period, which carry unqualified auditors' reports and do not contain any statements under S237 (2) or (3) of the Companies Act 1985. The full accounts for the period ended 30 June 2001 have been filed with the Registrar of Companies. 3. The calculation of earnings per share is based on the loss attributable to shareholders and the weighted average number of ordinary shares in issue of 159,792,153 (2000: 110,395,358). The calculation of earnings per share on a diluted basis takes account of the dilutive effect of outstanding share options giving a weighted average number of ordinary shares of 159,792,153 (2000: 111,078,338) 4. Net cash outflow from operating 6 months ended 6 months ended 12 months ended Activities 31 December 2001 31 December 2000 30 June 2001 (unaudited) (unaudited) (audited) GBP GBP GBP Operating Loss (3,080,782) (1,180,153) (2,655,314) Depreciation 95,192 136,158 185,051 Amortisation of intangible assets 1,752,078 - 101,430 Provision against investment - - 25,000 Loss on sale of fixed assets 121,280 - 25,556 Decrease/(increase) in stock 164,546 9,340 (109,526) Decrease in debtors 173,410 163,285 125,531 Decrease in creditors (356,563) (93,880) (152,558) Non cash movement 9,009 4,647 (51,618) -------------- ------------- ------------ Net cash outflow from operating activities (1,121,830) (960,603) (2,506,448) --------------- ------------- ------------ 5. Reconciliation of movements in 6 months ended 6 months ended 12 months ended Group shareholders funds 31 December 2001 31 December 2000 30 June 2001 (unaudited) (audited) (unaudited) GBP GBP GBP Loss for the financial period (3,073,904) (1,192,109) (2,616,194) Issue of warrants - (27,848) - Issue of shares 132,625 5,758,348 6,040,500 Expenses paid in connection with issue of shares - (623,500) (664,048) Exchange rate movement on other reserves 9,009 4,647 (25,270) Transfer to profit and loss of lapsed warrant instrument - - (3,500) -------------- -------------- ------------ Net (reduction in) /addition to shareholders funds (2,932,270) 3,919,538 2,731,488 Opening shareholders funds 4,669,782 1,938,294 1,938,294 ------------- ------------- ------------ Closing shareholders funds 1,737,512 5,857,832 4,669,782 ------------- ------------- ------------ 6. The Registered Office of the Company is The Dyehouse, Dyehouse Drive, West 26, Bradford, BD19 4TY. Copies of the Annual Report, Accounts and Six Months Interim Accounts may be obtained from the Company Secretary at this address. This information is provided by RNS The company news service from the London Stock Exchange
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