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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Adwalker | LSE:AWR | London | Ordinary Share | IE00B00MRN72 | ORD EUR0.02 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.07 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
28 November 2008 Adwalker Plc ("Adwalker" or "the company") Half-yearly results for the six months ended 31 August 2008 Chairman's Statement I am pleased to present the interim results of the Group for the six months ended 31 August 2008. Financials Revenue for the six month period was Euro451,929 (2007: Euro1,142,547). Gross profit was Euro263,149 (2007: Euro562,201) resulting in a loss before tax of Euro825,390 (2007: loss Euro988,917). The loss per share for the period was 0.31 cents (2007: loss 0.56 cents). The decline in revenue and gross profit during the period was principally due to a decline in the advertising budgets of our large corporate clients in the USA. In light of this trend we concentrated on the Adwalker VAR (Value Added Reseller) model which enables companies across the world to adopt the Adwalker platform in local markets which are beyond Adwalker's key operating territories in the USA, UK and Ireland. As a result gross profit margin in the period was up from 49 per cent. in the corresponding period in 2007 to 58 per cent. The Company is currently working with VAR partners in Turkey, China (Macau market), Italy, Trinidad & Tobago, Northern Ireland, Brazil, Bermuda, Australia, New Zealand and Holland. Despite the decline in revenue and gross profit, the losses before tax were reduced as a direct result of the VAR model requiring fewer personnel to service it and greater efficiencies in our three operating territories. Adoption of the lease/hire model through our USA office in the period and since the period end has been disappointing. However, the Board believes the performance of the USA operations will improve in the medium term as corporate clients become more familiar with the model. During the period under review the Company has been able to utilise the funds raised in February 2008 through a placing of ordinary shares, amounting to £ 240,000 (after expenses), which was announced on 27 February 2008. However, as at 31 August 2008 the Group had a net cash deficit of Euro242,819 in the form of a bank overdraft which is supported by Director guarantees. The interim statements have been prepared on a going concern basis. This assumption is dependent on the ongoing support of its Directors regarding its financing facilities and the Group meeting its projected revenue and expenditure targets. Financing As set out in the Company's trading update dated 30 September 2008, the Company is currently operating within its existing bank facilities and in order to continue to operate within these facilities the Company needs to grow its revenue base significantly. The expected near-term growth in income in the Company's core business, the leasing of the Adwalker platform, is heavily dependent on the advertising budgets of its global media partners. As with many companies operating in our industry, the uncertain economic environment and the potential adverse effect this may have on the timing and level of spending of Adwalker's customer base makes it very difficult for the Directors to forecast the level of future income with any degree of accuracy. As the Directors' stated in the recent trading update, discussions have now commenced and are ongoing with a number of parties, including the Company's bankers, with a view to securing the necessary working capital so that the business can continue to meet its obligations as they fall due. In the event that there is insufficient growth in near-term income and Adwalker is unsuccessful in securing additional bank facilities and/or raising the necessary finance then there will be a material adverse effect on the Company's financial position and operations. Current trading and outlook Discussions continue with a number of companies regarding the deployment of Interactive Fixed Screen Networks. At this point it is difficult to predict when any of the negotiations will come to fruition, particularly in light of the current economic environment. Trading conditions since the period end continue to be challenging. However, the Board continues to believe that Adwalker's wearable media platform is still only being utilised by `early adopting' clients and that over time the platform will still be able to establish itself in the wider global arena. I would like to thank our loyal shareholders for their patience during this period of establishment. In recent weeks the Company has focused on the provision of varied digital technology services for its media and advertising clients. Many of these new services have been well received in Ireland, the launch market. The Board is encouraged by the initial reaction in Ireland and the Company hopes to be able to generate further interest in the USA and UK markets in the first half of 2009. I remain cautiously optimistic about the future of the Company in very challenging economic conditions. PADRAIC O'CONNOR CHAIRMAN 27 November 2008 Enquiries: Adwalker plc Tel: +353 (1) 866 9000 Simon Crisp simon@adwalker.com John East & Partners Limited Tel: 020 7628 2200 Simon Clements/David Worlidge Consolidated Income Statement for the six months ended 31 August 2008 Notes Six months Six months Year ended ended ended 31 August 31 August 28 February 2008 2007 2008 Unaudited Unaudited Audited Euro Euro Euro Revenue - continuing operations 3 451,929 1,142,547 1,770,195 Cost of sales (188,780) (580,346) (942,849) Gross profit 263,149 562,201 827,346 Other operating income 220,363 - - Distribution costs (14,770) (5,077) (9,565) Administrative and other (1,277,421) (1,494,014) (3,297,837) operating expenses Loss from operations - (808,679) (936,890) (2,480,056) continuing operations Finance costs (5,342) (6,311) (1,768) Income from investments 1,130 - 3,720 Exchange (loss)/profit (12,499) (45,716) 52,981 Loss before tax - continuing (825,390) (988,917) (2,425,123) operations Income tax expense - - (199) Net loss for the period - (825,390) (988,917) (2,425,322) continuing operations Loss per share 4 Basic loss per share (0.31 cent) (0.56 cent) (0.92 cent) Diluted loss per share (0.31 cent) (0.56 cent) (0.87 cent) Consolidated Balance Sheet as at 31 August 2008 Notes 31 August 31 August 28 February 2008 2007 2008 Unaudited Unaudited Audited Euro Euro Euro Assets Non-current assets Plant and equipment 5 115,534 434,666 266,215 Intangible assets 6 128,827 282,847 205,346 244,361 717,513 471,561 Current assets Trade and other receivables 282,435 254,844 205,297 Bank and cash balances 8,057 174,938 218,731 290,492 429,782 424,028 Total assets 534,853 1,147,295 895,589 Equity and liabilities Capital and reserves Share capital 5,272,676 3,712,664 5,272,676 Capital reserves 5,753,559 5,753,559 5,753,559 Other reserves 36,424 25,489 (37,550) Share options 537,301 505,582 522,860 Accumulated losses (12,439,560) (10,177,763) (11,614,170) Total equity (839,600) (180,469) (102,625) Non current liabilities Obligations under finance leases - 46,237 28,746 - due after one year - 46,237 28,746 Current liabilities Trade and other payables 939,555 865,900 777,561 Bank loans and 250,876 178,933 32,991 overdrafts- due within one year Other taxation liabilities 184,022 198,176 120,398 Obligations under finance leases - 38,518 38,518 - due within one year 1,374,453 1,281,527 969,468 Total equity and liabilities 534,853 1,147,295 895,589 Consolidated Unaudited Statement of Changes in Equity for the six months ended 31 August 2008 Share Share Share Other Accumulated Total Capital Premium Options Losses equity Reserves Euro Euro Euro Euro Euro Euro Balance at 3,372,664 5,392,689 493,410 (8,519) (9,188,848) 61,396 1 March 2007 Net loss - - - - (2,425,322) (2,425,322) for the year Exchange - - - (29,031) - (29,031) rate movement Share - - 29,450 - - 29,450 option charge Shares 1,900,012 360,870 - - - 2,260,882 issued Balance at 5,272,676 5,753,559 522,860 (37,550) (11,614,170) (102,625) 28 February 2008 Balance at 5,272,676 5,753,559 522,860 (37,550) (11,614,170) (102,625) 1 March 2008 Net loss - - - - (825,390) (825,390) for the period Exchange - - - 73,974 - 73,974 rate movement Share - - 14,441 - - 14,441 option charge Balance at 5,272,676 5,753,559 537,301 36,424 (12,439,560) (839,600) 31 August 2008 Consolidated cash flow statement for the six months ended 31 August 2008 Six months Six months Year ended ended ended 31August 31August 28 February 2008 2007 2008 (Unaudited) (Unaudited) (Audited) Euro Euro Euro Operating activities Loss before tax (825,390) (988,917) (2,480,056) Depreciation and amortisation 228,046 295,336 525,298 Adjustments for share options grants 14,441 12,172 29,450 Grant income (220,363) - - Exchange differences 12,499 35,377 (52,981) (790,767) (646,032) (1,978,289) Tax refund - - 6,764 Decrease/(Increase) in receivables 68,774 (18,528) 22,292 Increase/(Decrease) in payables 278,599 31,952 (106,495) Cash generated from operations (443,394) (632,608) (2,055,728) Net investment expense/(income) 4,212 6,311 (1,952) Net cash used by operating activities (439,182) (626,297) (2,057,680) Investing activities Interest received 1,130 - 3,720 Interest paid (5,342) (6,311) (1,768) Purchase of intangible assets (4,021) (22,665) (22,001) Purchase of property, plant and (759) (41,938) (25,244) equipment Net cash used in investing activities (8,992) (70,914) (45,293) Net cash outflow before financing (448,174) (697,211) (2,102,973) Financing activities Issue of shares - 700,871 2,260,882 Grants received 74,451 - - Capital repayment of finance leases (67,264) (19,254) (36,749) Net cash inflow from financing 7,187 681,618 2,224,133 (Decrease)/Increase in cash and cash (440,987) (15,593) 121,160 equivalents in period Cash and cash equivalents at start of 185,740 11,599 11,599 the period Effects of exchange rate changes 12,428 - 52,981 Cash and cash equivalents at end of the (242,819) 3,994 185,740 period Notes to the unaudited interim consolidated financial statements for the six months ended 31 August 2008 1. General Adwalker plc is a public limited company incorporated in Ireland. The Company has subsidiaries located in the United Kingdom, United States and Hong Kong. The Company and subsidiaries are principally involved in offering clients digital media solutions on the Adwalker mobile platform. These financial statements are presented in Euro as that is the currency in which the majority of the Group's transactions are presently denominated. 2. Basis of Preparation of the interim financial statements The interim financial statements have been prepared on a basis which is consistent with the accounting policies adopted for the period to 31 August 2008. The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the interim report in accordance with the AIM Rules of the London Stock Exchange which require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. The interim accounts which are abridged and unaudited, do not include all the information required for full annual financial statements. The financial information contained in the interim statements does not constitute statutory accounts as defined within the meaning of the Companies Act 1963 to 2006. Comparative figures for the year to 28 February 2008 have been extracted from the latest financial statements on which the report of the independent auditors was unqualified. The interim financial statements have been prepared in accordance with the International Financial Reporting Standards. The Company is currently operating within its existing bank facilities and in order to continue to operate within these facilities the Company needs to grow its revenue base significantly. However, the level of income generated in September was significantly lower than management expectations. The expected near-term growth in income in the Company's core business, the leasing of the Adwalker platform, is heavily dependent on the advertising budgets of its global media partners. The uncertain economic environment and the potential adverse effect this may have on the timing and level of spending of Adwalker's customer base makes it very difficult for the Directors to forecast the level of future income with any degree of accuracy. While the Directors remain optimistic that the effect of these factors will be limited in the medium term and the shortfall in income experienced since 31 August 2008 may be recovered in future months, the Directors intend to commence discussions with a number of parties with a view to securing the necessary working capital so that the business can continue to meet its obligations as they fall due. In the event that there is insufficient growth in near-term income and Adwalker is unsuccessful in securing additional bank facilities and/or raising the necessary finance then there will be a material adverse effect on the Company's financial position and operations. The interim statements have been prepared on a going concern basis. This assumption is dependent on the Group meeting its projected revenue and expenditure targets. The Group incurred losses of Euro825,390 for the six month period ended 31 August 2008. The Group had a net cash deficit of Euro242,819 as at 31 August 2008. The Directors are confident that the group is taking the necessary steps to grow the business to achieve profitability in the short to medium term. Should projected profit levels not materialise the Directors will take whatever steps necessary to ensure the group has sufficient working capital for its needs. The Directors have reviewed the forecasted profit and loss account and cash flows of the Group for a period of one year from the date of approval of these interim financial statements. They are satisfied that in view of the Group's bank facilities and the expected trading and cash flow performance, the Group has the necessary resources to continue trading for the foreseeable future. Inherently, there can be no certainty in any of these respects. Accordingly, they believe that it is appropriate for the financial statements to be prepared on the going concern basis. If the Group was unable to continue in operational existence for the foreseeable future, adjustments would have to be made to adjust the balance sheet values of assets to their recoverable amounts, to provide for further liabilities that might arise and to reclassify fixed assets and long term liabilities as current assets and liabilities. 3. Revenue An analysis of the Group's revenue is as follows: Six months Six months Year ended 28 February 2008 ended 31 ended 31 August 2008 August 2007 Unaudited Unaudited Audited Euro Euro Euro Media Services 451,929 1,142,547 1,770,195 Revenue is derived from the following geographic regions Ireland 109,952 78,972 191,322 United Kingdom 185,342 53,970 144,869 United States of America 156,635 1,009,605 1,434,004 451,929 1,142,547 1,770,195 4. Loss per share Basic loss per share is based on a loss of Euro825,390, (six months ended 31 August 2007: Euro988,917) (year ended 28 February 2008: Euro2,425,322) and a weighted average number of shares in issue of 263,633,702 (six months ended 31 August 2007: 177,880,340) (year ended 28 February 2008: 263,633,702). In 2008 the diluted loss per share has been calculated on the same basis as basic loss per share because the effect of the potential ordinary shares (share options) reduces the net loss per share and is therefore anti-dilutive. 5. Plant and equipment Adwalker Fixtures & Computer Leasehold Total Packs Fittings Equipment Improvements Euro Euro Euro Euro Euro Cost or valuation At 1 March 2008 1,334,619 131,256 200,556 89,174 1,755,605 Exchange 650 (7,588) 4,135 (1,131) (3,934) differences Additions - - 759 - 759 At 31 August 2008 1,335,269 123,668 205,450 88,043 1,752,430 Accumulated depreciation and impairment At 1 March 2008 1,203,153 64,911 176,080 45,246 1,489,390 Exchange 5,067 1,849 (10,223) (760) (4,067) differences Charge for the 113,084 11,221 18,296 8,972 151,573 period At 31 August 2008 1,321,304 77,981 184,153 53,458 1,636,896 Carrying amount At 28 February 131,466 66,345 24,476 43,928 266,215 2008- Audited At 31 August 2008 - 13,965 45,687 21,297 34,585 115,534 Unaudited 6. Intangible assets Patents and ACOMS System Goodwill Total Trademark Euro Euro Euro Euro Cost At 1 March 2008 114,137 527,643 1,959,567 2,601,347 Additions 4,021 - - 4,021 At 31 August 2008 118,158 527,643 1,959,567 2,605,368 Accumulated amortisation At 1 March 2008 62,185 374,249 1,959,567 2,396,001 Charge for the period 13,082 67,458 - 80,540 At 31 August 2008 75,267 441,707 1,959,567 2,476,541 Carrying amount At 28 February 2008 - 51,952 153,394 - 205,346 Audited At 31 August 2008 - 42,891 85,936 - 128,827 Unaudited The impairment of goodwill arose on Adwalker (IP) Limited. The company ceased trading on acquisition and the Directors wrote down the goodwill relating to this subsidiary by Euro1,959,567 in the period ended 28 February 2005. 7. Copies of interim report Copies of the interim report are available for download from the company's website www.adwalker.com. END
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