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Aeorema Comm. LSE:AEO London Ordinary Share GB00B4QHH456 ORD 12.5P
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Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Media 4.8 0.1 0.6 49.1 2.49

Aeorema Communications Plc Final Results

07/11/2018 7:00am

UK Regulatory (RNS & others)


Aeorema Comm. (LSE:AEO)
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Aeorema Communications Plc

07 November 2018

Aeorema Communications plc / Index: AIM / Epic: AEO / Sector: Media

7 November 2018

Aeorema Communications plc ("Aeorema" or the "Company")

Final Results

Aeorema Communications plc, the AIM-traded live events agency, announces its audited results for the year ended 30 June 2018. The Company's annual general meeting ("AGM") is expected to be held in the first week in December and a separate announcement will be made in due course to confirm postage of the Annual Report and Accounts for the year ended 30 June 2018 and the notice of AGM to shareholders, as well as availability of the documents on the Company's website www.aeorema.com.

Financial Overview

   --     Revenues of GBP4,820,167, a year-on-year increase of 16% (2017: GBP4,156,592) 

-- Profit before exceptional items of GBP289,650, a year-on-year increase of 17% (2017: GBP248,368)

   --     Maintained strong cash position with GBP1,436,314 in the bank 
   --     Proposed final dividend payment of 0.75p (2017: 0.5p) 

Operation Overview

-- Aeorema successfully staged several large-scale events for blue chip clients in the UK, France, Italy and Germany

o Events included annual partner conferences, a leadership event and a promotional event at Cannes Lions Festival

o Blue chip clients including a top 4 accountancy firm, a top 10 law firm, a global management consulting firm, a global telecoms provider and a global newspaper publisher

   --     Developed the Company's film production arm of the business by securing new client wins 

o Produced film content in tandem with large scale events in addition to films for leading accountancy, legal, management and construction firms

o Film production business continues to be highly profitable for the Company

-- New management team appointed in the period implementing their strategy for the Company and supported by further key appointments including a Creative Director and Director of Experiential

For further information visit www.aeorema.com or contact:

 
 Mike Hale               Aeorema Communications    Tel: +44 (0) 20 7291 
                          plc                                      0444 
 John Depasquale / Liz   Allenby Capital Limited    Tel: +44 (0)20 3328 
  Kirchner                (Nominated Adviser                       5656 
                          and Broker) 
 Gaby Jenner / Isabel    St Brides Partners        Tel: +44 (0) 20 7236 
  de Salis                Ltd                                      1177 
 

Chairman's Statement

The financial year ended 30 June 2018 was a pivotal period for Aeorema. The two founder shareholders, Peter Litten, Deputy Chairman and Creative Director, and Gary Fitzpatrick, CEO, advised that they wanted to leave to pursue other interests. The Board thanked them for 21 years of commitment to the Company and organised with them the orderly placement of their entire shareholdings equating to 38% of the Company's shares. This placement of shares by the Company's broker in September 2017 introduced an excellent group of new shareholders.

Many of these new shareholders are already investors in a range of AIM micro-caps and the Board is grateful for their support since this placement.

The Board appointed Steve Quah and Andrew Harvey as joint Managing Directors in September 2017. Steve and Andrew have been with the Company for a number of years and have contributed significantly to the growth of the Company. The Board fully endorses their vision for the company.

The results for the financial year ended 30 June 2018 were good considering the challenges and distraction of the management changes. Revenue was GBP4,820,167, an increase of 16% on 2016/17 (GBP4,156,592). Profit was GBP289,650 before exceptional items of GBP231,357, an increase of 17% on 2016/17 (GBP248,368). The exceptional items were in relation to the departure of its two founders, Peter Litten and Gary Fitzpatrick, from the board of directors.

The Board is proposing a final dividend of 0.75 pence (2016/17: 0.5 pence per share) to be paid to shareholders on the register on 14 December 2018. The ex-dividend date will be on 13 December 2018. Subject to the proposed dividend being approved by shareholders at the AGM, it will be paid on 11 January 2019. This is in line with the Company's policy of continuing to pay dividends when possible. At the year-end the Group maintained its strong cash position with GBP1,436,314 in the bank, net of bank overdrafts. The Board is focused on using the cash reserves to invest in new talent capable of driving the business forward organically, as well as exploring new acquisition opportunities which can help the Group increase in scale and drive increased revenues and profits.

During the financial year ended 30 June 2018 the Group successfully staged several large events for blue chip clients in the UK, France, Italy and Germany. These events included annual partner conferences for a top 4 accountancy firm, a top 10 law firm and a global management consulting firm. The Group also staged a leadership event for a global telecoms provider and an event for a global newspaper publisher at the Cannes Lions International Festival of Creativity, a global event for those working in creative, communications, advertising and related fields.

The Group's film production business continued to develop during the year. The Group provided film content for several of the large events mentioned above, as well as, producing films for top 4 accountancy firms, a top 10 law firm, a large multinational technology company and a multinational construction company. The films produced included films for internal training, high level strategy films and branded content. The film production business continues to operate with high gross profit margins and provides opportunities for the Group to showcase its outstanding creativity.

The Board is delighted with the performance of the new management team. The new team have made a number of key appointments including a new creative director and a director of experiential. These appointments are seen as essential to ensure the Group maintains its creative advantage and allow the Group to move into experiential events. Experiential events use experiences to connect brands with consumers, it is a form of event that is rapidly growing in popularity and is an area of business which we believe represents a significant and highly exciting growth opportunity.

Outlook

Looking forward to the financial year ended 30 June 2019 and beyond the outlook is very positive. The strength of the new team has led to an excellent series of new business gains since the year end with both existing and new clients. These gains include a major new client in the technology sector and a new global brand within the media sector. The Group continues to win new film production projects and the appointment of Julian Staveley as Experiential Director is also proving successful, with the Group recently winning a roadshow event for a global electronics company.

The Board wishes to thank the executive team and all members of staff for their commitment and hard work. The board also wishes to thank its shareholders for their continued support.

M Hale

Chairman

6 November 2018

Joint Managing Directors' Statement

We are delighted to complete our first financial year as Joint Managing Directors with a significant increase in revenue. The focus of the senior team has been to drive growth through strong account management and a greater sales function.

The average growth in revenue from our top five clients this financial year has been 29% and we would like to thank our wonderful, dedicated team for working harder than ever before to retain key accounts and continuing to foster strong relationships with our fantastic clients.

We are also proud to deliver growth in our three main client sectors of Professional Services, Telecommunications and Media & Technology. We have added a significant new client within Professional Services plus two new clients in the Media & Technology sector. Looking ahead to the current financial year we are confident of adding further well-known brands within our core sectors.

Although some of our larger individual projects continue to be repeated every two to three years, we have added some new annual large-scale conferences to our calendar and continue to seek out repeating six figure revenue generating events to support our growth plan. We are especially pleased to report that our pitch to win ratio has increased by approximately 40%.

We have invested within the technical support structure of our business, but our biggest investment has been in talent. We were delighted to make Julian Staveley our first significant hire as Experiential Director and in 2018 we have strengthened the team further with our new Creative Director Simon Baird, experienced Project Manager Natalie Richards and Senior Producer Jen Morris.

Simon has worked with some of the biggest brands in the world and he is excited to be joining our talented Cheerful Twentyfirst team and giving our own brand a vital update. We aim to launch our new brand and website in early 2019.

We continue to keep a close eye on overheads, but to match our ambition of organic growth going forwards we are focussed on bringing in the best talent to ensure our clients continue to get the best service.

Finally, we would like to thank our amazing team, our ambitious and loyal clients and our investors. We are excited by the opportunities that lie ahead and as we grow the business we are fully focused on delivering world class projects that continue to be game changers for our clients.

Steve Quah Andrew Harvey

Joint Managing Directors

6 November 2018

Consolidated Statement of Comprehensive Income

For the year ended 30 June 2018

 
                                      Notes   2018          2017 
                                              GBP           GBP 
 
 Continuing operations 
  Revenue                             2       4,820,167     4,156,592 
 Cost of sales                                (3,033,514)   (2,495,487) 
-----------------------------------  ------                ------------ 
 Gross profit                                 1,786,653     1,661,105 
 Administrative expenses                      (1,497,003)   (1,412,737) 
                                     ------  ------------  ------------ 
  Operating profit pre-exceptional 
   items                              3       289,650       248,368 
-----------------------------------  ------                ------------ 
 Exceptional items                    4       (231,357)     - 
-----------------------------------  ------                ------------ 
 Operating profit post 
  exceptional items                           58,293        248,368 
-----------------------------------  ------                ------------ 
 Finance income                       5       392           519 
 Profit before taxation                       58,685        248,887 
 Taxation                             6       (8,280)       (37,284) 
                                     ------  ------------  ------------ 
 Profit and total comprehensive 
  income for the year 
  attributable to owners 
  of the parent                               50,405        211,603 
  Profit per ordinary 
   share: 
  Total basic earnings 
   per share                           9      0.55693p      2.33803p 
 Total diluted earnings 
  per share                           9       0.53906p      2.26301p 
-----------------------------------  ------                ------------ 
 

There were no other comprehensive income items.

The notes are an integral part of these financial statements.

Statement of Financial Position

As at 30 June 2018

 
                                  Notes             Group                    Company 
                                                 2018          2017        2018        2017 
                                                  GBP           GBP         GBP         GBP 
                                 ------  ------------  ------------  ----------  ---------- 
 Non-current assets 
 Intangible assets                 10         365,154       365,154           -           - 
 Property, plant and equipment     11          37,044        31,341           -           - 
 Deferred taxation                  7           2,254         2,861           -           - 
 Investments in subsidiaries       12               -             -     580,490     580,490 
                                         ------------  ------------  ----------  ---------- 
 Total non-current assets                     404,452       399,356     580,490     580,490 
 Current assets 
 Trade and other receivables       13       1,106,292     1,007,592     995,874     748,661 
 Cash and cash equivalents         14       1,437,904     1,897,212           -     459,180 
                                         ------------  ------------  ----------  ---------- 
 Total current assets                       2,544,196     2,904,804     995,874   1,207,841 
                                         ------------                ----------  ---------- 
 Total assets                               2,948,648     3,304,160   1,576,364   1,788,331 
 
 Current liabilities 
 Bank loans and overdrafts         16         (1,590)             -     (1,590)           - 
 Trade and other payables          15     (1,274,979)   (1,615,603)   (102,647)    (94,173) 
 Current tax payable                          (9,412)      (31,042)           -           - 
                                         ------------  ------------  ----------  ---------- 
 Total current liabilities                (1,285,981)   (1,646,645)   (104,237)    (94,173) 
 Net assets                                 1,662,667     1,657,515   1,472,127   1,694,158 
 
 Equity 
 Share capital                     17       1,131,313     1,131,313   1,131,313   1,131,313 
 Share premium                                  7,063         7,063       7,063       7,063 
 Merger reserve                                16,650        16,650      16,650      16,650 
 Capital redemption reserve                   257,812       257,812     257,812     257,812 
 Retained earnings                            249,829       244,677      59,289     281,320 
                                         ------------  ------------  ----------  ---------- 
 Equity attributable to 
  owners of the parent                      1,662,667     1,657,515   1,472,127   1,694,158 
                                 ------  ------------  ------------  ----------  ---------- 
 

The notes are an integral part of these financial statements.

The loss for the financial year of the holding company was GBP176,778 (profit in 2017: GBP116,142).

The financial statements were approved and authorised by the board of directors on 6 November 2018 and were signed on its behalf by

   A Harvey, Director                                                           S Haffner, Director 

Consolidated Statement of Changes in Equity

For the year ended 30 June 2018

 
                        Share                     Merger   Capital redemption    Retained 
 Group                capital   Share premium    reserve              reserve    earnings   Total equity 
                          GBP             GBP        GBP                  GBP         GBP            GBP 
-----------------              --------------  ---------  -------------------  ----------  ------------- 
 At 1 July 2016     1,131,313           7,063     16,650              257,812     214,084      1,626,922 
 
   Comprehensive 
   income for 
   the year, net 
   of tax                   -               -          -                    -     211,603        211,603 
 Dividends paid             -               -          -                    -   (181,010)      (181,010) 
 At 30 June 
  2017              1,131,313           7,063     16,650              257,812     244,677      1,657,515 
 
   Comprehensive 
   income for 
   the year, net 
   of tax                   -               -          -                    -      50,405         50,405 
 Dividends paid             -               -          -                    -    (45,253)       (45,253) 
 At 30 June 
  2018              1,131,313           7,063     16,650              257,812     249,829      1,662,667 
----------------- 
 

Share premium represents the value of shares issued in excess of their list price.

In accordance with section 612 of the Companies Act 2006, the premium on ordinary shares issued in relation to acquisitions is recorded as a merger reserve. The reserve is not distributable.

Capital redemption reserve represents a statutory non-distributable reserve into which amounts are transferred following redemption or purchase of a company's own shares.

The notes an integral part of these financial statements.

Company Statement of Changes in Equity

For the year ended 30 June 2018

 
                    Share                       Merger     Capital redemption   Retained 
 Company             capital    Share premium    reserve    reserve              earnings   Total equity 
                    GBP         GBP             GBP        GBP                  GBP         GBP 
-----------------              --------------  ---------  -------------------  ----------  ------------- 
 At 1 July 2016     1,131,313   7,063           16,650     257,812              346,188     1,759,026 
 Comprehensive 
  income for 
  the year, net 
  of tax            -           -               -          -                     116,142    116,142 
 Dividends paid     -           -               -          -                    (181,010)   (181,010) 
 At 30 June 
  2017              1,131,313   7,063           16,650     257,812              281,320     1,694,158 
  Comprehensive 
   income for 
   the year, net 
   of tax           -           -               -          -                    (176,778)   (176,778) 
 Dividends paid     -           -               -          -                    (45,253)    (45,253) 
 At 30 June 
  2018              1,131,313   7,063           16,650     257,812              59,289      1,472,127 
----------------- 
 

Share premium represents the value of shares issued in excess of their list price.

In accordance with section 612 of the Companies Act 2006, the premium on ordinary shares issued in relation to acquisitions is recorded as a merger reserve. The reserve is not distributable.

Capital redemption reserve represents a statutory non-distributable reserve into which amounts are transferred following redemption or purchase of a company's own shares.

The notes are an integral part of these financial statements.

Statement of Cash Flows

For the year ended 30 June 2018

 
                                      Notes           Group                  Company 
                                                   2018        2017        2018        2017 
                                                    GBP         GBP         GBP         GBP 
                                     ------  ----------  ----------  ----------  ---------- 
 Net cash flow from operating 
  activities                           23     (389,918)     672,516   (415,534)    (29,846) 
 
 Cash flows from investing 
  activities 
 Finance income                         5           392         519          17         113 
 Purchase of property, plant 
  and equipment                        11      (26,119)    (22,536)           -           - 
 Dividends received by the 
  Company                                             -           -           -     200,000 
 Cash (used) / generated in 
  investing activities                         (25,727)    (22,017)          17     200,113 
 
 Cash flows from financing 
  activities 
 Dividends paid to owners of 
  the Company                                  (45,253)   (181,010)    (45,253)   (181,010) 
                                             ----------  ----------  ----------  ---------- 
 Cash used in financing activities             (45,253)   (181,010)    (45,253)   (181,010) 
 
 Net increase / (decrease) 
  in cash and cash equivalents                (460,898)     469,489   (460,770)    (10,743) 
 Cash and cash equivalents 
  at beginning of year                        1,897,212   1,427,723     459,180     469,923 
                                             ----------  ----------  ----------  ---------- 
 Cash and cash equivalents 
  at end of year                              1,436,314   1,897,212     (1,590)     459,180 
-----------------------------------          ----------  ----------  ----------  ---------- 
 

Cash and cash equivalents

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of the Statement of Financial Position amounts:

 
                              Notes   Group                   Company 
                                      2018        2017        2018      2017 
                                      GBP         GBP         GBP       GBP 
                             ------  ----------  ----------  --------  -------- 
 Cash and cash equivalents    14      1,437,904   1,897,212   -         459,180 
 Bank overdraft               16      (1,590)     -           (1,590)   - 
                                      1,436,314   1,897,212   (1,590)   459,180 
--------------------------- 
 

The notes are an integral part of these financial statements.

Notes to the consolidated financial statements

For the year ended 30 June 2018

1 Accounting policies

Aeorema Communications plc is a public limited company incorporated in the United Kingdom. The Company is domiciled in the United Kingdom and its principal place of business is Moray House, 23/31 Great Titchfield Street, London W1W 7PA. The Company's Ordinary Shares are traded on the AIM Market.

The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.

The presentation currency is GBP sterling.

Going concern

The Group's business activities, together with the factors likely to affect its future development and performance are set out in the review of business contained in the Chairman's Statement. The Group's financial statements show details of its financial position including, in note 24, details of its financial instruments and exposure to risk.

After reviewing the Group's budget for the next financial year, other medium term plans and considering the risks outlined in note 24, the Directors, at the time of approving the financial statements, have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and have therefore used the going concern basis in preparing the financial statements.

Basis of Preparation

The Group's financial statements have been prepared under the historical cost convention and in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union, and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The following new standards, amendments to standards and interpretations have been applied for the first time from 1 July 2017. Their adoption has not had a material impact on the financial statements:

   --     IAS 7 (Amended) 'Statement of Cash Flows', effective 1 January 2017 

Adopted IFRS not yet applied

The following new standards, amendments to standards and interpretations have been issued, but are not effective for the financial year beginning 1 July 2017 and have not been adopted early by the Group:

   --     IFRS 9 'Financial Instruments', effective 1 January 2018 
   --     IFRS 15 'Revenue for Contracts with Customers', effective 1 January 2018 
   --     IFRS 16 'Leases', effective 1 January 2019 

Management have assessed the impact they may have on future reporting periods, and do not consider that the above standards will have a material impact on the Group's financial statements.

Basis of consolidation

The Group financial statements consolidate those of the Company and all of its subsidiary undertakings drawn up to 30 June 2018. Subsidiaries are all entities (including structured entities) over which the group has control. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are consolidated until the date that control ceases.

Intra-group transactions, balances and unrealised gains and losses on transactions between group companies are eliminated.

The merger reserve is used where more than 90% of the shares in a subsidiary are acquired and the consideration includes the issue of new shares by the Company, thereby attracting merger relief under the Companies Act 2006.

Revenue

Revenue represents amounts (excluding value added tax) derived from the provision of services to third party customers in the course of the Group's ordinary activities. Revenue is measured at the fair value of consideration received taking into account any trade discounts and volume rebates. Revenue for all business segments is recognised when the Group has earned the right to receive consideration for its services.

Revenue is recognised by reference to the stage of completion of a transaction. The method used to determine the stage of completion is the cost-to-cost method. Under the cost-to-cost method the stage of completion is determined as a percentage of the costs incurred to date compared with estimated total costs of the transaction.

Intangible assets - goodwill

All business combinations are accounted for by applying the acquisition method. Goodwill acquired represents the excess of the fair value of the consideration and associated costs over the fair value of the identifiable net assets acquired.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. At the date of acquisition, the goodwill is allocated to cash generating units, usually at business segment level or statutory company level as the case may be, for the purpose of impairment testing and is tested at least annually for impairment. On subsequent disposal or termination of a business acquired, the profit or loss on termination is calculated after charging the carrying value of any related goodwill.

Property, plant and equipment

Property, plant and equipment is stated in the financial statements at cost less accumulated depreciation and any impairment value. Depreciation is provided to write off the cost less estimated residual value of property, plant and equipment over its expected useful life (which is reviewed at least at each financial year end), as follows:

 
  Leasehold land and buildings       Straight line over the life of the 
                                      lease (three years) 
 Fixtures, fittings and equipment   Straight line over four years 
                                   ------------------------------------ 
 

Any gain or loss arising on the derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the Statement of Comprehensive Income in the year that the asset is derecognised.

Fully depreciated assets still in use are retained in the financial statements.

Impairment

The carrying amounts of the Group's assets are reviewed at each period end to determine whether there is any indication of impairment. If any such indication exists, the assets' recoverable amount is estimated. For goodwill and intangible assets that have an indefinite useful life and intangible assets that are not yet available for use, the recoverable amount is estimated at each annual period end date and whenever there is an indication of impairment.

An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Impairment losses are recognised in the Statement of Comprehensive Income in those expense categories consistent with the function of the impaired asset.

Operating leases

Rentals under operating leases are charged to the Statement of Comprehensive Income on a straight line basis over the period of the lease.

The group leases office facilities under operating leases. The lease typically runs for a period of 5 years, with a break cause in year 3. The group is restricted from entering into any sub-lease arrangements.

Investments

Fixed asset investments are stated at cost less provision for diminution in value.

Trade and other receivables

Trade and other receivables are stated initially at fair value and subsequently measured at amortised cost less any provision for impairment.

Trade and other payables

Trade payables are recognised initially at fair value and subsequently measured at amortised cost.

Cash and cash equivalents

Cash comprises, for the purpose of the Statement of Cash Flows, cash in hand and deposits payable on demand. Cash equivalents are short-term highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value. Cash equivalents normally have a date of maturity of 3 months or less from the acquisition date.

Bank loans and overdrafts comprise amounts due on demand.

Finance income

Finance income consists of interest receivable on funds invested. It is recognised in the Statement of Comprehensive Income as it accrues.

Taxation

Income tax on the profit or loss for the periods presented comprises current and deferred tax. Current tax is the expected tax payable on the taxable income for the year, using rates enacted or substantively enacted at the end of the reporting period, and any adjustment to tax payable in respect of previous years.

Deferred tax is provided on temporary differences between carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination; the differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the end of the reporting period.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the assets can be utilised. Deferred tax assets and liabilities are not discounted.

Pension costs

The Group operates a pension scheme for its employees. It also makes contributions to the private pension arrangements of certain employees. These arrangements are of the money purchase type and the amount charged to the Statement of Comprehensive Income represents the contributions payable by the Group for the period.

Financial instruments

The Group does not enter into derivative transactions and does not trade in financial instruments. Financial assets and liabilities are recognised on the Statement of Financial Position when the Group becomes a party to the contractual provision of the instrument.

Equity

An equity instrument is a contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs. The Group's equity instruments comprise 'share capital' in the Statement of Financial Position.

Foreign currency translation

Monetary assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the end of the reporting period. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to the Statement of Comprehensive Income.

Share-based awards

The Group issues equity settled payments to certain employees. Equity settled share based payments are measured at fair value (excluding the effect of non-market based vesting conditions) at the date of grant.

The fair value is estimated using option pricing models and is dependent on factors such as the exercise price, expected volatility, option price and risk free interest rate. The fair value is then amortised through the Statement of Comprehensive Income on a straight-line basis over the vesting period. Expected volatility is determined based on the historical share price volatility for the Company. Further information is given in note 21 to the financial statements.

Exceptional items

Exceptional items are one off, material items outside the normal course of business which are not related to the Group's trading activities.

Significant judgements and estimates

The preparation of the Group's financial statements in conforming with IFRS required management to make judgements, estimates and assumptions that effect the application of policies and reported amounts in the financial statements. These judgements and estimates are based on management's best knowledge of the relevant facts and circumstances.

The company performs an impairment review of goodwill based on a value in use calculation. The calculation is based on a discounted cash flow model and an appropriate discount rate. The review includes an estimation of the annual growth rates and appropriate discount rates (see note 10 for key assumptions). Changes in the estimates which underpin the group's forecasts could have an impact on the value in use.

2 Revenue and segment information

The Company uses several factors in identifying and analysing reportable segments, including the basis of organisation, such as differences in products and geographical areas. The Board of Directors, being the Chief Operating Decision Makers, have determined that for the year ending 30 June 2018 there is only a single reportable segment.

All revenue represents sales to external customers. Four customers (2017: two) are defined as major customers by revenue, contributing more than 10% of the Group revenue.

 
                    2018        2017 
                    GBP         GBP 
                   ----------  ---------- 
 Customer one       1,114,846   722,825 
 Customer two       886,981     715,074 
 Customer three     617,576     - 
 Customer four      493,766     392,894 
                   ----------  ---------- 
 Major customers    3,113,169   1,830,793 
                   ----------  ---------- 
 

The geographical analysis of revenue from continuing operations by geographical location of customer is as follows:

 
 Geographical 
  market         2018        2017        2018     2017     2018      2017      2018        2017 
                                                           Rest      Rest 
                                                            of the    of the 
                 UK          UK          Europe   Europe    World     World    Total       Total 
                 GBP         GBP         GBP      GBP      GBP       GBP       GBP         GBP 
  Revenue        4,774,107   4,089,412   31,531   29,589   14,529    37,591    4,820,167   4,156,592 
 

3 Operating profit

 
 Operating profit is stated after charging 
  or crediting:                                      2018        2017 
                                                     GBP         GBP 
--------------------------------------------------              -------- 
 Cost of sales 
 Depreciation of property, plant and equipment       15,327      21,577 
 Administrative expenses 
 Depreciation of property, plant and equipment       5,089       29,877 
 (Profit)/Loss on foreign exchange differences       6,902       (426) 
 Fees payable to the Company's auditor in respect 
  of: 
   Audit of the Company's annual accounts            7,500       7,500 
   Audit of the Company's subsidiaries               21,000      20,000 
 Staff costs (see note 20)                           1,016,153   918,336 
 Operating leases - land and buildings               91,000      91,000 
                                                    ----------  -------- 
 

4 Exceptional items

Items that are material either because of their size or their nature, or that are non-recurring, are considered as exceptional. During the year, the Group incurred expenditure totalling GBP231,357 (2017: GBPnil) in relation to the departure of its two founders, Peter Litten and Gary Fitzpatrick, from the board of directors. This expenditure included final salary payments of GBP120,000, pension payments of GBP40,361 and associated costs including legal and professional fees of GBP70,996.

5 Finance income

 
 Finance income            2018   2017 
                           GBP    GBP 
------------------------         ----- 
 Bank interest received    392    519 
------------------------         ----- 
 
 

6 Taxation

 
                                                       2018      2017 
                                                       GBP       GBP 
----------------------------------------------------            --------- 
 The tax charge comprises: 
 
 Current tax 
 Prior period adjustment                               (1,739)   3,028 
 Current year                                          9,412     31,042 
                                                                --------- 
 
                                                       7,673     34,070 
 Deferred tax (see note 7) 
 Current year                                          607       3,214 
                                                                --------- 
                                                       607       3,214 
 
 Total tax charge in the statement of comprehensive 
  income                                               8,280     37,284 
 Factors affecting the tax charge for the 
  year 
 Profit on ordinary activities before taxation 
  from continuing operations                           58,685    248,887 
 Profit on ordinary activities before taxation 
  multiplied by standard rate 
 of UK corporation tax of 19% (2017: 19.75%)           11,150    49,155 
 Effects of: 
 Non-deductible expenses                               (1,131)   8,086 
 Research and development claim                        -         (22,985) 
 Prior period adjustment                               (1,739)   3,028 
 
                                                       (2,870)   (11,781) 
 Total tax charge                                      8,280     37,284 
----------------------------------------------------            --------- 
 

The Group has estimated losses of GBP375,762 (2017: GBP375,762) available to carry forward against future trading profits. These losses are in Aeorema Communications plc which is not currently making taxable profits as all trading is undertaken by its subsidiary Aeorema Limited, therefore no deferred tax asset has been recognised.

The Finance Act 2016 included legislation to reduce the main rate of corporation tax from 20% to 19% from 1 April 2017 and to 17% from 1 April 2020. These rate reductions were substantively enacted by the balance sheet date and therefore included in these consolidated financial statements. Temporary differences have been remeasured using the enacted tax rates that are expected to apply when the liability is settled or the asset is realised.

7 Deferred taxation

 
                                                        2018      2017 
                                                        GBP       GBP 
-----------------------------------------------------            -------- 
 Property, plant and equipment temporary differences    (4,016)   (2,269) 
 Temporary differences                                  6,270     5,130 
                                                                 -------- 
                                                        2,254     2,861 
 At 1 July                                              2,861     6,075 
 Transfer to Statement of Comprehensive Income          (607)     (3,214) 
 At 30 June                                             2,254     2,861 
-----------------------------------------------------            -------- 
 

The deferred tax asset is expected to be utilised given the continued profitability and future trading prospects.

8 Profit attributable to members of the parent company

As permitted by section 408 of the Companies Act 2006, the parent Company's Statement of Comprehensive Income has not been included in these financial statements.

9 Earnings per ordinary share

Basic earnings per share are calculated by dividing the profit or loss attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share are calculated by dividing the profit or loss attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would have been issued on the conversion of all dilutive potential ordinary shares into ordinary shares.

The following reflects the income and share data used and dilutive earnings per share computations:

 
                                         2018        2017 
                                         GBP         GBP 
                                        ----------  ---------- 
 Basic earnings per share 
 Profit for the year attributable 
  to owners of the Company               50,405      211,603 
 
 Basic weighted average number of 
  shares                                 9,050,500   9,050,500 
  Dilutive potential ordinary shares: 
   Employee share options                300,000     300,000 
 Diluted weighted average number of 
  shares                                 9,350,500   9,350,500 
                                        ----------  ---------- 
 

10 Intangible fixed assets

 
 Group                          Goodwill 
                                GBP 
----------------------------- 
 Cost 
 At 1 July 2016                 2,728,292 
 At 30 June 2017                2,728,292 
 At 30 June 2018                2,728,292 
 Impairment and amortisation 
 At 1 July 2016                 2,363,138 
 At 30 June 2017                2,363,138 
 At 30 June 2018                2,363,138 
 Net book value 
 At 1 July 2016                 365,154 
 At 30 June 2017                365,154 
 At 30 June 2018                365,154 
----------------------------- 
 

Goodwill arose for the Group on consolidation of its subsidiary company, Aeorema Limited.

Impairment - Aeorema Limited

Goodwill has been tested for impairment based on its future value in use. The future value has been calculated on a discounted cash flow basis using the 2018-19 budgeted figures as approved by the Board of Directors, extended in perpetuity to calculate the terminal value and discounted at a rate of 10%. It has been assumed that future growth will be between 1.5% and 2%. Using these assumptions, which are based upon past experience, there was no impairment in the year.

11 Property, plant and equipment

 
                           Leasehold 
 Group                      land           Fixtures, fittings   Total 
                           and buildings   and equipment 
                           GBP             GBP                  GBP 
------------------------                  ------------------- 
 Cost 
 At 30 June 2016           54,298          144,070              198,368 
 Additions                 4,238           18,298               22,536 
 Disposals                 -               (67,316)             (67,316) 
 At 30 June 2017           58,536          95,052               153,588 
 Additions                 -               26,119               26,119 
 Disposals                 -               (2,141)              (2,141) 
 At 30 June 2018           58,536          119,030              177,566 
  Depreciation 
  At 30 June 2016          23,570          114,539              138,109 
 Charge for the year       29,877          21,577               51,454 
 Eliminated on disposal    -               (67,316)             (67,316) 
  At 30 June 2017          53,447          68,800               122,247 
 Charge for the year       5,089           15,327               20,416 
 Eliminated on disposal    -               (2,141)              (2,141) 
  At 30 June 2018          58,536          81,986               140,522 
 Net book value 
 At 1 July 2016            30,728          29,531               60,259 
 At 30 June 2017           5,089           26,252               31,341 
 At 30 June 2018           -               37,044               37,044 
                          --------------  -------------------  --------- 
 

12 Non-current assets - Investments

 
 Company            Shares in subsidiary 
                    GBP 
----------------- 
 Cost 
 At 1 July 2016     3,274,703 
 At 30 June 2017    3,274,703 
 At 30 June 2018    3,274,703 
 Provision 
 At 1 July 2016     2,694,213 
 At 30 June 2017    2,694,213 
 At 30 June 2018    2,694,213 
 Net book value 
 At 1 July 2016     580,490 
 At 30 June 2017    580,490 
 At 30 June 2018    580,490 
----------------- 
 

Holdings of more than 20%

The Company holds more than 20% of the share capital of the following companies:

 
                                                      Shares 
 Subsidiary undertakings          Country of           held 
                                  registration 
                                                     ----------  ---- 
                                  or incorporation    Class       % 
-------------------------------                      ----------  ---- 
                                  England and 
 Aeorema Limited                   Wales              Ordinary    100 
                                  England and 
 Twentyfirst Limited (Dormant)     Wales              Ordinary    100 
-------------------------------                      ----------  ---- 
 

The registered address of Aeorema Limited and Twentyfirst Limited is 64 New Cavendish Street, London, W1G 8TB.

13 Trade and other receivables

 
                                   Group                   Company 
                                   2018        2017        2018      2017 
                                   GBP         GBP         GBP       GBP 
                                              ----------            -------- 
 Trade receivables                 693,725     810,908     -         - 
 Related party receivables         -           -           981,850   743,037 
 Other receivables                 25,870      19,167      4,718     - 
 Prepayments and accrued income    386,697     177,517     9,306     5,624 
                                   1,106,292   1,007,592   995,874   748,661 
                                  ----------  ----------            -------- 
 

All trade and other receivables are expected to be recovered within 12 months of the end of the reporting period. The fair value of trade and other receivables is the same as the carrying values shown above.

At the year end, trade receivables of GBP34,324 (2017: GBP61,560) were past due but not impaired. These relate to a number of customers for whom there is no significant change in credit quality and the amounts are still considered recoverable. The ageing of these trade receivables is as follows:

 
                              Group 
                              2018     2017 
                              GBP      GBP 
                                      ------- 
 Less than 90 days overdue    -        61,560 
 More than 90 days overdue    34,324   - 
                              34,324   61,560 
                             -------  ------- 
 

14 Cash at bank and in hand

 
                  Group                   Company 
                  2018        2017        2018   2017 
                  GBP         GBP         GBP    GBP 
                             ----------         -------- 
 Bank balances    1,437,904   1,897,212   -      459,180 
                  1,437,904   1,897,212   -      459,180 
                 ----------  ----------         -------- 
 

15 Trade and other payables

 
                                 Group                   Company 
                                 2018        2017        2018      2017 
                                 GBP         GBP         GBP       GBP 
------------------------------              ----------            ------- 
 Trade payables                  736,442     1,012,687   13,257    7,380 
 Related party payables          -           -           67,355    67,355 
 Taxes and social security 
  costs                          220,825     253,373     -         - 
 Other payables                  1,541       7,529       -         - 
 Accruals and deferred income    316,171     342,014     22,035    19,438 
                                 1,274,979   1,615,603   102,647   94,173 
------------------------------              ----------            ------- 
 

All trade and other payables are expected to be settled within 12 months of the end of the reporting period. The fair value of trade and other payables is the same as the carrying values shown above.

16 Loans

An analysis of the maturity of loans is given below:

 
                               Group          Company 
                               2018    2017   2018    2017 
                               GBP     GBP    GBP     GBP 
----------------------------          -----          ----- 
 Amounts falling due within 
  one year or on demand: 
 Bank overdrafts               1,590   -      1,590   - 
                               1,590   -      1,590   - 
----------------------------          -----          ----- 
 

17 Share capital

 
                                  2018        2017 
                                  GBP         GBP 
-------------------------------              ---------------- 
 Authorised 
 28,000,000 Ordinary shares 
  of 12.5p each                   3,500,000   3,500,000 
 
 
 Allotted, called up and fully 
  paid                            Number      Ordinary shares 
                                              GBP 
-------------------------------              ---------------- 
 At 1 July 2016                   9,050,500   1,131,313 
 At 30 June 2017                  9,050,500   1,131,313 
 At 30 June 2018                  9,050,500   1,131,313 
-------------------------------              ---------------- 
 

Holders of these shares are entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings of the company.

See note 21 for details of share options outstanding.

18 Financial commitments

Total future minimum lease payments under non-cancellable operating lease rentals are payable as follows:

 
 Group                                Land and Buildings 
                                      2018        2017 
                                      GBP         GBP 
 Not later than one year              91,000      91,000 
 Later than one year and not later 
  than five years                     15,167      106,167 
 Total                                106,167     197,167 
-----------------------------------              --------- 
 

19 Directors' emoluments

The remuneration of Directors of the Company is set out below.

 
                  Salary,    Salary,                          Compensation   Compensation 
                   bonus      bonus                            for loss       for loss 
                   or fees    or fees   Pensions   Pensions    of office      of office     Total     Total 
                  2018       2017       2018       2017       2018           2017           2018      2017 
                  GBP        GBP        GBP        GBP        GBP            GBP            GBP       GBP 
                 ---------  ---------  ---------  ---------  -------------  -------------  --------  -------- 
 P Litten         12,167     60,000     33,590     33,554     70,000         -              115,757   93,554 
 G Fitzpatrick    8,111      40,000     17,019     7,562      50,000         -              75,130    47,562 
 M Hale           25,000     10,000     -          -          -              -              25,000    10,000 
 S Haffner        15,000     15,000     -          -          -              -              15,000    15,000 
 R Owen           25,000     10,000     -          -          -              -              25,000    10,000 
 S Quah           100,000    90,000     493        155        -              -              100,493   90,155 
 A Harvey         80,625     -          665        -          -              -              81,290    - 
                  265,903    225,000    51,767     41,271     120,000        -              437,670   266,271 
                 ---------  ---------  ---------  ---------  -------------  -------------  --------  -------- 
 

The share options held by directors who served during the year are summarised below:

 
                                                     Earliest 
                                          Exercise    exercise 
 Name      Grant date    Number awarded    price      date       Expiry date 
 
           25 April                                  25 April 
 S Quah     2013         300,000          16.50p      2016       24 April 2023 
          ------------  ---------------  ---------  ----------  -------------- 
 

On 23 August 2018 Steve Quah and Andrew Harvey were granted 300,000 share options each at an exercise price of 29p. The options vest on 17 November 2020, and can be exercised in the period from 17 November 2020 until the tenth anniversary of the date of grant, 23 August 2028. As the grant of the share options occurred after the year end no share-based payment charge was recognised in the financial statements for the year ended 30 June 2018.

Fees for S Haffner are charged by Harris & Trotter LLP, a firm in which he is a member (see note 22).

20 Employee information

The average monthly number of employees (including directors) employed by the Group during the year was:

 
  Number of employees             Group                       Company 
                                  2018 Number   2017 Number   2018 Number   2017 Number 
 
 Administration and production    18            20            7             6 
                                 ------------  ------------                ------------ 
 

The aggregate payroll costs of these employees charged in the Statement of Comprehensive Income was as follows:

 
 Employment costs         Group                 Company 
                          2018        2017      2018     2017 
                          GBP         GBP       GBP      GBP 
                                     --------           ------- 
 Wages and salaries       857,969     788,365   65,000   35,000 
 Social security costs    101,250     85,708    -        - 
 Pension costs            56,934      44,263    -        - 
                          1,016,153   918,336   65,000   35,000 
                         ----------  --------           ------- 
 

21 Share-based payments

The Group operates an EMI share option scheme for key employees. Options are granted to key employees at an exercise price equal to the market price of the Company's shares at the date of grant. Options are exercisable from the third anniversary of the date of grant and lapse if they remain unexercised at the tenth anniversary or upon cessation of employment. The following option arrangements exist over the Company's shares:

 
                  Exercise                         Number of       Number of 
 Date of grant     price     Exercise period        options 2018    options 2017 
                             From       To 
                 ---------  ---------  ---------  --------------  -------------- 
 25 April                    25 April   24 April 
  2013            16.5p       2016       2023      300,000         300,000 
                                                   300,000         300,000 
                 ---------  ---------  ---------  --------------  -------------- 
 

Details of the number of share options and the weighted average exercise price outstanding during the year are as follows:

 
                                                                        Weighted 
                             Number of   Weighted average   Number of    average exercise 
                              options     exercise price     options     price 
                             2018        2018               2017        2017 
                                         GBP                            GBP 
                            ----------  -----------------  ----------  ------------------ 
 Outstanding at beginning 
  of the year                300,000     0.17               300,000     0.17 
 Outstanding at end 
  of the year                300,000     0.17               300,000     0.17 
--------------------------              -----------------  ----------  ------------------ 
 Exercisable at the 
  end of the year            300,000     0.17               300,000     0.17 
--------------------------              -----------------  ----------  ------------------ 
 

The exercise price of options outstanding at the year-end was GBP0.165 (2017: GBP0.165) and their weighted average contractual life was 4.8 years (2017: 5.8 years).

Equity-settled share-based payments are measured at fair value at the date of grant. The fair value as determined at the grant date of equity-settled share-based payments is expensed on a straight line basis over the vesting period, based on the Group's estimate of shares that will eventually vest. The estimated fair value of the options is measured using an option pricing model. The inputs into the model are as follows:

 
                              25 April 
 Grant date                    2013 
 Model used                   Black-Scholes 
 Share price at grant date    16.5p 
 Exercise price               16.5p 
 Contractual life             10 years 
 Risk free rate               0.5% 
 Expected volatility          104% 
 Expected dividend rate       0% 
 Fair value option            14.889p 
                             -------------- 
 

The expected volatility is determined by calculating the historical volatility of the company's share price over the last three years. The risk free rate is the official Bank of England base rate.

The Group recognised the following charges in the Statement of Comprehensive Income in respect of its share-based payment plans:

 
                              2018   2017 
                              GBP    GBP 
---------------------------         ----- 
 Share-based payment charge   -      - 
---------------------------         ----- 
 

22 Related party transactions

The Group has a related party relationship with its subsidiaries and its key management personnel (including directors). Details of transactions between the Company and its subsidiaries are as follows:

 
                                      2018      2017 
                                      GBP       GBP 
-----------------------------------            -------- 
 Amounts owed by subsidiaries 
 Total amount owed by subsidiaries    981,850   743,037 
 Amounts owed to subsidiaries 
 Total amount owed to subsidiaries    67,355    67,355 
                                     --------  -------- 
 

The company received dividends during the year of GBPnil (2017: GBP200,000) from its subsidiary, Aeorema Limited. The company transferred a VAT receivable of GBP15,155 (2017: GBP10,200) to Aeorema Limited due to being part of a common VAT group.

Aeorema Limited transferred a net amount of expenses to Aeorema Communications plc during the year of GBP58,050 (2017: GBP38,700).

Aeorema Limited paid expenses totalling GBP132,203 (2017: GBP49,996) on behalf of Aeorema Communications plc during the year.

During the year, Aeorema Communications plc made a net transfer of cash of GBP413,911 to Aeorema Limited (2017: GBP181,010 from Aeorema Limited to Aeorema Communications plc).

The compensation of key management (including directors) of the Group is as follows:

 
                                 2018      2017 
                                 GBP       GBP 
------------------------------            -------- 
 Short-term employee benefits    309,786   251,204 
 Post-employment benefits        51,767    41,271 
 Termination benefits            120,000   - 
                                 481,553   292,475 
                                --------  -------- 
 

Harris and Trotter LLP is a firm in which S Haffner is a member. The amounts charged to the Group for professional services is as follows:

 
  Harris and Trotter LLP - charged during 
   the year                                  2018     2017 
                                             GBP      GBP 
 Aeorema Communications plc                  15,000   15,000 
 Aeorema Limited                             25,995   7,850 
                                             40,995   22,850 
------------------------------------------           ------- 
 

At the year end, the group had an outstanding trade payable balance to Harris and Trotter LLP of GBP6,174 (2017: GBP5,640).

23 Cash flows

 
                                   Group                  Company 
                                   2018        2017       2018        2017 
                                   GBP         GBP        GBP         GBP 
                                  ----------  ---------  ----------  ---------- 
 Cash flows from operating 
  activities 
 Profit before taxation            58,685      248,887    (176,778)   116,141 
 Depreciation                      20,416      51,454     -           - 
 Dividends received by the 
  Company                          -           -          -           (200,000) 
 Finance income                    (392)       (519)      (17)        (113) 
                                   78,709      299,822    (176,795)   (83,972) 
 Increase / (decrease) in trade 
  and other payables               (340,624)   275,021    8,474       (4,631) 
 (Increase) / decrease in trade 
  and other receivables            (98,700)    166,745    (247,213)   58,757 
 Taxation paid                     (29,303)    (69,072)   -           - 
 Cash generated / (used) from 
  operating activities             (389,918)   672,516    (415,534)   (29,846) 
--------------------------------              ---------  ----------  ---------- 
 

24 Financial instruments

Financial instruments recognised in the consolidated statement of financial position

All financial instruments are recognised initially at their fair value and subsequently measured at amortised cost.

 
                                Group                   Company 
                                2018        2017        2018        2017 
                                 GBP         GBP         GBP         GBP 
                               ----------              ----------  ---------- 
 Loans and receivables 
 Trade and other receivables    987,811     847,525     981,850     743,037 
 Cash and cash equivalents      1,437,904   1,897,212   -           459,180 
 Investments in subsidiaries    -           -           580,490     580,490 
 Total                          2,425,715   2,744,737   1,562,340   1,782,707 
 Other financial liabilities 
 Trade and other payables       779,851     1,020,216   82,202      74,735 
 Accruals                       275,893     236,068     22,035      19,440 
 Total                          1,055,744   1,256,284   104,237     94,175 
                               ----------  ----------  ----------  ---------- 
 

The Group is exposed to risks that arise from its use of financial instruments. There have been no significant changes in the Group's exposure to financial instrument risk, its objectives, policies and processes for managing those from previous periods. The principal financial instruments used by the Group, from which financial instrument risk arises, are trade receivables, cash and cash equivalents and trade and other payables.

Credit risk

Credit risk arises principally from the Group's trade receivables. It is the risk that the counterparty fails to discharge its obligation in respect of the instrument. The maximum exposure to credit risk at 30 June 2018 was GBP693,725 (2017: GBP810,908). Trade receivables are managed by policies concerning the credit offered to customers and the regular monitoring of amounts outstanding for both time and credit limits. At the year end, the credit quality of trade receivables is considered to be satisfactory.

Liquidity risk

Liquidity risk arises from the Group's management of working capital. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due. The Group's policy is to meet its liabilities when they fall due. The Group monitors cash flow on a regular basis. At the year end, the Group has sufficient liquid resources to meets its obligations of GBP1,244,113 (2017: GBP1,540,698).

Market risk

Market risk arises from the Group's use of interest bearing financial instruments. It is the risk that the fair value of future cash flows of a financial instrument will fluctuate. At the year end, the cash and cash equivalents of the Group net of bank overdrafts was GBP1,436,314 (2017: GBP1,897,212). The Group ensures that its cash deposits earn interest at a reasonable rate.

Capital risk

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern while maximising the return to stakeholders. The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued share capital, reserves and retained earnings as disclosed in the Group Statement of Changes in Equity. At the year end, total equity was GBP1,662,667 (2017: GBP1,657,515).

25 Pension costs defined contribution

The Group makes pre-defined contributions to employees' personal pension plans. Contributions payable by the Group for the year were GBP56,934 (2017: GBP44,263). At the end of the reporting period GBPnil (2017: GBPnil) of contributions were due in respect of the period.

26 Dividends

On the 9 January 2018 a final dividend of 0.5 pence per share (total dividend GBP45,253) was paid to holders of fully paid ordinary shares.

In respect of the current year, the directors propose that a final dividend of 0.75 pence per share be paid to shareholders on 11 January 2019. The dividends are subject to approval by shareholders at the Annual General Meeting and have not been included as liabilities in these consolidated financial statements. The proposed dividends are payable to all shareholders on the Register of Members on 14 December 2018. The total estimated dividend to be paid is GBP67,879. The payment of this dividend will not have any tax consequences for the Group.

27 Contingent Liability

Company

The company is a member of a group VAT registration with all other companies in the Aeorema Communications group and, under the terms of the registration, is jointly and severally liable for the VAT payable by all members of the group. At 30 June 2018 the company had no potential liability under the terms of the registration.

28 Control

There is no overall controlling party.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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