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TIDMDIGI
RNS Number : 6234W
Digital Marketing Group PLC
23 November 2010
Date: 23 November 2010
On behalf of: Digital Marketing Group plc ("DMG", "the Company" or "the Group")
Embargoed: 0700hrs
Digital Marketing Group plc
Interim Results 2010/2011
Digital Marketing Group plc (AIM: DIGI), the UK's largest digital marketing agency, today announced its interim results for the six months ended 30 September 2010.
Performance Highlights
-- Gross profits GBP17.90m (2009: GBP17.44m)
-- EBITDA before share based payments GBP2.47m (2009: GBP3.63m)
-- Profit before tax ("PBT") before amortisation and share based payment charges GBP1.95m (2009: GBP2.93m)
-- Profit after tax GBP0.32m (2009: GBP0.14m)
-- Net debt GBP6.07m (GBP7.26m 31 March 2010); undrawn banking facilities of GBP3.28 million
-- Adjusted basic earnings per share 1.57 pence (2009: 3.20 pence)
-- Basic earnings per share 0.42 pence (2009: 0.20 pence)
Commenting on the results, Stephen Davidson, Chairman of Digital Marketing Group plc, said: "We continue to operate in a difficult and uncertain market place however we have still produced positive results with an increase in profit after tax and reduced debt."
Ben Langdon, Chief Executive of Digital Marketing Group plc, added: "The results for the six months are reflective of a mixed performance. Our ecommerce division delivered exceptional growth in profits of 28% yr/yr. Voice marketing also delivered strong levels of new business and achieved significant growth in both gross profits and PBT yr/yr. Conversely, our data services division continues to underperform."
"We have reduced the number of office locations in our marketing agency division and this will show positive results through efficiency and resource allocation for the benefit of clients."
"We are in a strong position to take advantage of recoveries within our market and should also continue to see organic growth within our ecommerce division."
Enquiries:
Digital Marketing Group plc
Ben Langdon, Chief Executive
Keith Sadler, Group Finance Director
finnCap
Tom Jenkins/Sarah Wharry 020 7600 1658
INTERIM RESULTS
Our profit before tax for the six months ended 30 September 2010 was GBP0.6 million compared to GBP0.7 million for the six months ended 30 September 2009 and our profit after tax, as a result of a reduced tax charge, increased from GBP0.1 million to GBP0.3 million. Gross profits increased from GBP17.4 million to GBP17.9 million.
The performance from our ecommerce division has continued to produce excellent results. Gross profit has increased by 68% and profit before tax has increased by 28%. This reflects a movement in the retail sector to establish business critical systems for their online offering. Our team are strategically placed to take advantage of this shift. They are a Tier 1 IBM reseller for IBM's global leading ecommerce platform, Websphere.
As I stated in the annual report and accounts, recovery in our DMG pillar and in particular our data services division is linked to the speed of recovery in financial services and we have still to see any signs of improvement in this sector. In addition, continuing delays in client decisions within our marketing agency division has meant our new business conversion has not been as we had anticipated.
During the period we received partial settlement on a contractual obligation from a client who has gone into liquidation, amounting to GBP0.9 million, which has been disclosed within other income.
Operating expenses increased as a result of the increase in staff costs within our ecommerce business in order to deliver the successful increase in its revenues. We have consolidated the 20:20 agency business around our largest office based in Newbury, Berkshire, which has resulted in the closure of the Bristol office and the relocation of a number of staff from our Swindon office. This will mean a more efficient process and allocation of resource to client assignments.
Net debt has been reduced by GBP1.2 million in the six months to 30 September 2010 to GBP6.1 million. The cost of financing this debt has fallen from GBP375,000 for the six months ended 30 September 2009 to GBP256,000 for the six months under review.
Recent client wins include Royal Bank of Scotland, Promethean, Homeserve Weight Watchers and Informa World.
Outlook
There is still uncertainty within our market sector which is delaying our return to significant growth. We are managing our cost base robustly to ensure it is appropriate for the business but are mindful of the fact that we need to invest to protect the assets that we have. We expect to produce profitable operating results above those reported in the first six months.
Ben Langdon
Chief Executive
22 November 2010
Consolidated Interim Statement of Comprehensive Income (unaudited)
Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2010 2009 2010 Note GBP'000 GBP'000 GBP'000 Revenue 4 22,494 24,701 48,464 Direct costs (4,596) (7,260) (13,004) ----------- ----------- --------- Gross profit 17,898 17,441 35,460 Other operating income 856 1,133 1,709 Amortisation (967) (956) (1,938) Operating expenses (16,937) (16,555) (36,108) ----------- ----------- --------- Operating profit/(loss) 850 1,063 (877) ----------- ----------- --------- Finance income 1 2 2 Finance costs (257) (377) (534) ----------- ----------- --------- Net financing costs (256) (375) (532) ----------- ----------- --------- Profit/(loss) before tax 594 688 (1,409) Tax expense 5 (279) (552) (576) ----------- ----------- --------- Profit/(loss) for the period attributable to equity holders of the parent 315 136 (1,985) Other comprehensive income: Cash flow hedging Current year gains 53 57 65 ----------- ----------- --------- Total comprehensive income 368 193 (1,920) ----------- ----------- --------- Earnings per ordinary share 6 - basic 0.42p 0.20p (2.88)p - diluted 0.41p 0.18p (2.88)p ----------- ----------- ---------
Consolidated interim balance sheet (unaudited)
30 Sept 30 Sept 31 March 2010 2009 2010 Note GBP'000 GBP'000 GBP'000 Assets Non-current assets Property, plant and equipment 1,759 1,816 1,752 Goodwill 44,330 46,973 45,653 Other intangible assets 13,387 15,435 14,272 --------- --------- --------- 59,476 64,224 61,677 --------- --------- --------- Current assets Inventories 210 154 212 Trade and other receivables 10,693 9,226 11,832 Cash and cash equivalents 9,239 11,421 7,399 --------- --------- --------- 20,142 20,801 19,443 --------- --------- --------- Total assets 79,618 85,025 81,120 --------- --------- --------- Liabilities Current liabilities Bank overdraft 7 (8,364) (9,783) (6,443) Other interest bearing loans and borrowings 7 (6,673) (1,691) (1,691) Financial derivatives 8 (363) (424) (416) Trade and other payables (9,954) (11,929) (12,741) Tax payable (574) (1,518) (254) Provisions (59) (58) (187) --------- --------- --------- (25,987) (25,403) (21,732) --------- --------- --------- Non-current liabilities Other interest bearing loans and borrowings 7 (275) (5,966) (6,522) Deferred tax liabilities (3,868) (4,396) (4,133) --------- --------- --------- (4,143) (10,362) (10,655) --------- --------- --------- Total liabilities (30,130) (35,765) (32,387) --------- --------- --------- Net assets 49,488 49,260 48,733 --------- --------- --------- Equity Capital and reserves attributable to equity holders of the company Share capital 34,050 33,689 34,026 Share premium account 6,608 6,608 6,608 Hedging reserve (363) (424) (416) Capital redemption reserve 125 125 125 Share option reserve 395 5,810 419 Retained earnings 8,673 3,452 7,971 --------- --------- --------- Total equity 49,488 49,260 48,733 --------- --------- ---------
Consolidated interim cash flow statement (unaudited)
Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2010 2009 2010 Note GBP'000 GBP'000 GBP'000 Cash flow from operating activities Profit for the period 315 136 (1,985) Adjustment for: Depreciation, amortisation and impairment 1,232 1,282 6,299 Loss on disposal of property, plant and equipment - - 28 Movement in provision (128) - 40 Financial income (1) (2) (2) Financial expenses 257 377 534 Share based payment expense 387 1,288 2,874 Tax expense 279 552 576 Decrease/(increase) in trade and other receivables 1,114 1,509 (1,034) Decrease/(increase) in inventories 2 42 (16) (Decrease) in trade and other payables (1,477) (3,553) (2,543) ----------- ----------- --------- Cash generated from operations 1,980 1,631 4,771 Interest received 1 2 2 Interest paid (207) (272) (482) Tax paid (212) (826) (2,355) ----------- ----------- --------- Net cash flow from operating activities 1,562 535 1,936 ----------- ----------- --------- Cash flows from investing activities Proceeds from the sale of property, plant and equipment - 3 4 Acquisitions of subsidiaries, net of cash acquired - 7 (1,632) Payment of contingent consideration for prior year acquisitions - (278) (600) Addition of intangible assets (82) (275) (694) Acquisition of property, plant and equipment (272) (87) (301) ----------- ----------- --------- Net cash outflow from investing activities (354) (630) (3,223) ----------- ----------- --------- Cash flows from financing activities Proceeds from new loan and draw down of bank facilities - - 600 Repayment of borrowings (1,289) (1,688) (1,778) Net cash outflow from financing activities (1,289) (1,688) (1,178) ----------- ----------- --------- Net decrease in cash, cash equivalents and bank overdrafts (81) (1,783) (2,465) Cash and cash equivalents at beginning of period 956 3,421 3,421 ----------- ----------- --------- Cash and cash equivalents at end of period 875 1,638 956 ----------- ----------- --------- Cash and cash equivalents comprise: Cash at bank and in hand 9,239 11,421 7,399 Bank overdrafts 7 (8,364) (9,783) (6,443) ----------- ----------- --------- Cash and cash equivalents at end of period 875 1,638 956 ----------- ----------- ---------
Consolidated interim statement of changes in equity (unaudited)
Share Capital Share Share premium Hedging redemption option Retained Total capital account reserve reserve reserve earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 Balance at 1 April 2009 33,689 6,608 (481) 125 5,810 2,028 47,779 -------- -------- -------- ----------- -------- --------- -------- Credit in respect of share based payments - - - - - 1,288 1,288 Transactions with owners - - - - - 1,288 1,288 -------- -------- -------- ----------- -------- --------- -------- Profit for the period - - - - - 136 136 Other comprehensive income: Cash flow hedges - - 57 - - - 57 Total comprehensive income for the period - - 57 - - 136 193 -------- -------- -------- ----------- -------- --------- -------- Balance at 30 September 2009 33,689 6,608 (424) 125 5,810 3,452 49,260 -------- -------- -------- ----------- -------- --------- -------- Allotment of 5p ordinary shares 337 - - - (337) - - Credit in respect of share based payments - - - - - 1,586 1,586 Transfer to share option reserve - - - - (5,054) 5,054 - Transactions with owners 337 - - - (5,391) 6,640 1,586 -------- -------- -------- ----------- -------- --------- -------- Loss for the period - - - - - (2,121) (2,121) Other comprehensive income: Cash flow hedges - - 8 - - - 8 Total comprehensive income for the period - - 8 - - (2,121) (2,113) -------- -------- -------- ----------- -------- --------- -------- Balance at 31 March 2010 34,026 6,608 (416) 125 419 7,971 48,733 -------- -------- -------- ----------- -------- --------- -------- Allotment of 5p ordinary shares 24 - - - (24) - - Credit in respect of share based payments - - - - - 387 387 Transactions with owners 24 - - - (24) 387 387 -------- -------- -------- ----------- -------- --------- -------- Profit for the period - - - - - 315 315 Other comprehensive income: Cash flow hedges - - 53 - - - 53 Total comprehensive income for the period - - 53 - - 315 368 -------- -------- -------- ----------- -------- --------- -------- Balance at 30 September 2010 34,050 6,608 (363) 125 395 8,673 49,488 -------- -------- -------- ----------- -------- --------- --------
1. General Information
Digital Marketing Group plc (the "Company") is incorporated and domiciled in the United Kingdom. The Company is listed on the AIM market of the London Stock Exchange. The registered address is 30-33 Minories, Tower Hill, London, EC3N 1DD.
The interim financial information was approved for issue on 22 November 2010.
2. Basis of preparation
The consolidated interim financial statements for the six months ended 30 September 2010 have been prepared in accordance with applicable accounting standards and under the historical cost convention except for certain financial instruments that are carried at fair value.
The financial information for the year ended 31 March 2010 set out in this interim report does not constitute statutory accounts as defined in Section 434 of the Companies Act 2006. The Group's statutory financial statements for the year ended 31 March 2010 have been filed with the Registrar of Companies. The auditor's report on those financial statements was unqualified and did not contain statements under Section 498 (2) or Section 498 (3) of the Companies Act 2006.
The consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 March 2010, which have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.
3. Accounting policies
Except as described below, the principal accounting policies of Digital Marketing Group plc and its subsidiaries ("the Group") are consistent with those set out in the Group's 2010 annual report and financial statements.
Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.
The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 April 2010.
-- IAS 27 Consolidated and Separate Financial Statements (Revised 2008) (effective 1 July 2009).
-- Amendment to IAS 39 Financial Instruments: Recognition and Measurement - Eligible Hedged Items (effective 1 July 2009).
-- Group Cash-settled Share-based Payment Transactions - Amendment to IFRS 2 (effective 1 January 2010).
-- IFRIC 17 Distributions of Non-cash Assets to Owners (effective 1 July 2009).
-- IFRIC 18 Transfers of Assets from Customers (effective prospectively for transfers on or after 1 July 2009).
-- Amendment to IAS 32 Classification of Rights Issues (effective 1 February 2010).
4. Segment information (unaudited)
The chief operating decision-maker has been identified as the Group Chief Executive. The Group Chief Executive reviews the Group's internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on these reports. 20:20 provide full agency services for clients on digital platforms together with ecommerce services. DMG provide digital direct marketing, data and data related services and voice services to clients.
The Group Chief Executive assesses the performance of the operating segments based on gross profit and operating profit before interest and tax.
Total assets exclude intangible assets, cash and external borrowings which have not been allocated to operating segments.
No single client accounts for more than 10% of Group revenue. All the Group's activities are carried out within the UK.
Six months ended 30 September 2010 20:20 DMG Unallocated Total GBP'000 GBP'000 GBP'000 GBP'000 Revenue 15,113 7,845 (464) 22,494 Direct costs (4,192) (868) 464 (4,596) ----------- --------- ------------ --------- Gross profit 10,921 6,977 - 17,898 Other operating income 3 853 - 856 Operating expenses excluding depreciation, amortisation and charges for share based payments (9,055) (6,729) (501) (16,285) ----------- --------- ------------ --------- Operating profit before depreciation, amortisation and charges for share based payments 1,869 1,101 (501) 2,469 Depreciation (126) (138) (1) (265) Amortisation (521) (446) - (967) Charges for share based payments (102) (70) (215) (387) ----------- --------- ------------ --------- Operating profit 1,120 447 (717) 850 ----------- --------- ------------ Finance income 1 Finance costs (257) --------- Profit before tax 594 Tax expense (279) --------- Profit for the period 315 --------- Six months ended 30 September 2009 20:20 DMG Unallocated Total GBP'000 GBP'000 GBP'000 GBP'000 Revenue 14,377 10,594 (270) 24,701 Direct costs (6,463) (1,034) 237 (7,260) -------- -------- ------------ --------- Gross profit 7,914 9,560 (33) 17,441 Other operating income 5 1,128 - 1,133 Operating expenses excluding depreciation, amortisation and charges for share based payments (6,557) (7,798) (586) (14,941) -------- -------- ------------ --------- Operating profit before depreciation, amortisation and charges for share based payments 1,362 2,890 (619) 3,633 Depreciation (108) (206) (12) (326) Amortisation (505) (451) - (956) Charges for share based payments 30 (274) (1,044) (1,288) -------- -------- ------------ --------- Operating profit 779 1,959 (1,675) 1,063 -------- -------- ------------ Finance income 2 Finance costs (377) --------- Profit before tax 688 Tax expense (552) --------- Profit for the period 136 --------- Year ended 31 March 2010 20:20 DMG Unallocated Total GBP'000 GBP'000 GBP'000 GBP'000 Revenue 27,832 21,322 (690) 48,464 Direct costs (11,382) (2,160) 538 (13,004) --------- --------- ------------ --------- Gross profit 16,450 19,162 (152) 35,460 Other operating income 7 1,702 - 1,709 Operating expenses excluding depreciation, amortisation and charges for share based payments (12,572) (15,511) (739) (28,822) --------- --------- ------------ --------- Operating profit before depreciation, amortisation and charges for share based payments 3,885 5,353 (891) 8,347 Depreciation (204) (345) (25) (574) Amortisation (1,010) (928) - (1,938) Impairment (2,519) (1,254) (14) (3,787) Charges for share based payments (22) (1,381) (1,522) (2,925) --------- --------- ------------ --------- Operating profit 130 1,445 (2,452) (877) --------- --------- ------------ Finance income 2 Finance costs (534) --------- Loss before tax (1,409) Tax expense (576) --------- Loss for the period (1,985) --------- Total assets 20:20 DMG Unallocated Total GBP'000 GBP'000 GBP'000 GBP'000 30 September 2010 35,810 26,800 17,008 79,618 31 March 2010 35,175 27,707 18,238 81,120 30 September 2009 31,535 32,759 20,731 85,025 -------- -------- ------------ --------
5. Tax expense (unaudited)
A reconciliation of the charge that would result from applying the standard UK corporation tax rate to profit before tax to the tax charge is given below.
Year Six months ended Six months ended ended 30 Sept 2010 30 Sept 2009 31 March 2010 GBP'000 GBP'000 GBP'000 Recognised in the consolidated statement of comprehensive income: Current year tax 544 870 1,134 Origination and reversal of temporary differences (265) (318) (558) ----------------- ----------------- -------------- Total tax charge 279 552 576 ----------------- ----------------- -------------- Profit /(loss) before tax 594 688 (1,409) ----------------- ----------------- -------------- Tax charge thereon at UK corporation tax rate of 28% (2009: 28%) 166 193 (395) Effects of: Non-deductible expenses - - 94 Impairment of goodwill - - 892 Share based payment charges 108 361 804 Schedule 23 deductions - - (805) Depreciation for period in excess of capital allowances - 28 - Other 5 (67) (68) Prior year adjustment - 37 54 ----------------- ----------------- -------------- Total tax charge 279 552 576
6. Earnings per share (unaudited)
Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2010 2009 2010 Pence per Pence per Pence per share share share Basic 0.42p 0.20p (2.88)p Diluted 0.41p 0.18p (2.88)p ------------ ------------ ----------
Earnings per share have been calculated by dividing the profit attributable to shareholders by the weighted average number of ordinary shares in issue during the period. The calculations of basic and diluted earnings per share are:
Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2010 2009 2010 GBP'000 GBP'000 GBP'000 Profit/(loss) for the period attributable to shareholders 315 136 (1,985) ----------- ----------- ---------- Weighted average number of Number Number Number ordinary shares in issue: '000 '000 '000 Basic 74,237 67,378 69,010 Adjustment for share options, warrants and contingent shares 3,149 7,001 6,935 ----------- ----------- ---------- Diluted 77,386 74,379 75,945 ----------- ----------- ---------- Adjusted earnings per share Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2010 2009 2010 Pence per Pence per Pence per share share share Basic adjusted earnings per 1.57 3.20p 8.77p share Diluted adjusted earnings 1.50 2.90p 7.97p per share ----------- ----------- ----------
Adjusted earnings per share have been calculated by dividing the profit attributable to shareholders before amortisation, impairment and charges for share based payments by the weighted average number of ordinary shares in issue during the period. The numbers used in calculating the basic and diluted adjusted earnings per share are reconciled below:
Six months Six months Year ended ended ended 30 Sept 30 Sept 31 March 2010 2009 2010 GBP'000 GBP'000 GBP'000 Profit/(loss) before tax 315 688 (1,409) Amortisation 967 956 1,938 Impairment of carrying value of goodwill and intangibles - - 3,787 Charges for share based payments 425 1,383 2,874 ----------- ----------- --------- Adjusted profit attributable to shareholders 1,707 3,027 7,190 Current period tax charge (544) (870) (1,134) ----------- ----------- --------- 1,163 2,157 6,056 ----------- ----------- ---------
7. Bank overdraft, borrowings and loans (unaudited)
30 Sept 30 Sept 31 March 2010 2009 2010 Summary GBP'000 GBP'000 GBP'000 Bank overdraft 8,364 9,783 6,443 Borrowings, undiscounted cash flows 6,948 7,657 8,213 -------- -------- --------- 15,312 17,440 14,656 -------- -------- --------- Borrowings are repayable as follows: Within 1 year Bank overdraft 8,364 9,783 6,443 Borrowings 6,822 1,848 1,865 -------- -------- --------- Total due within 1 year 15,186 11,631 8,308 Less future interest (149) (157) (174) -------- -------- --------- Total due within 1 year 15,037 11,474 8,134 -------- -------- --------- In more than 1 year but not more than 2 years 276 1,812 6,596 In more than 2 years but not more than 3 years - 4,284 - Total due in more than 1 year 276 6,096 6,596 Less future interest (1) (130) (74) -------- -------- --------- Total due in more than 1 year 275 5,966 6,522 -------- -------- --------- Average interest rates at the balance sheet date were: % % % Overdraft 2.75 5.00 2.75 Term loan 2.04 1.85 1.96 Term loan 2.54 3.35 2.46 Revolving credit facility 2.35 2.32 2.33 -------- -------- ---------
As the loans are at variable market rates their carrying amount is equivalent to their fair value.
In 2007 the Group purchased an interest rate swap of 6.19% for the period 2007 to 2012 for GBP4.0 million of its borrowings.
The borrowing facilities available to the Group at 30 September 2010 was GBP10.36 million (2009: GBP11.13 million) and, taking into account cash balances within the Group, there was GBP3.28 million (2009: GBP3.28 million) of available borrowing facilities.
A composite accounting system is set up with the Group's bankers, which allows debit balances on overdraft to be offset across the Group with credit balances.
Cash at Reconciliation of net bank and debt in hand Overdraft Borrowings Net debt GBP'000 GBP'000 GBP'000 GBP'000 30 September 2010 9,239 (8,364) (6,948) (6,073) 31 March 2010 7,399 (6,443) (8,213) (7,257) 30 September 2009 11,421 (9,783) (7,657) (6,019) ---------- ---------- ----------- ---------
8. Financial derivatives (unaudited)
30 Sept 30 Sept 31 March 2010 2009 2010 GBP'000 GBP'000 GBP'000 Interest rate swap 363 424 416 -------- -------- ---------
In 2007 the Group purchased an interest rate swap of 6.19% for the period 2007 to 2012 for GBP4.0 million of its borrowings. This swap is designated a hedge of the interest expense relating to the Group loans. The contract was marked to market at 30 September 2010 and was a net liability of GBP363,000 (2009: GBP424,000).
9. Provisions (unaudited)
30 Sept 30 Sept 31 March 2010 2009 2010 GBP'000 GBP'000 GBP'000 At the beginning of the period 187 147 147 Additional provisions for restructuring - - 187 Utilised during the year (128) (89) (147) -------- -------- --------- At the end of the period 59 58 187 -------- -------- ---------
Provisions relate to leases in the Group where the commercial benefit has either ceased or will cease before the normal expiry period.
10. Share capital (unaudited)
Authorised:
45p deferred shares 5p ordinary shares GBP'000 GBP'000 Authorised share capital at 31 March 2010 and 30 September 2010 45,000 10,000
Allotted, issued and fully paid
45p deferred 5p ordinary shares shares Number Number GBP'000 Issued share capital at 31 March 2010 67,378,520 74,121,505 34,026 Allotment of 5p ordinary shares - 483,494 24 --------------- -------------- ---------- At 30 September 2010 67,378,520 74,604,999 34,050 --------------- -------------- ----------
The shares issued in the period were as a result of the exercise of share options by employees and directors.
11. Related party transactions (unaudited)
There were no significant changes in the nature and size of related party transactions for the period from those disclosed in the Annual Report for the year ended 31 March 2010.
INDEPENDENT REVIEW REPORT TO DIGITAL MARKETING GROUP PLC
Introduction
We have been engaged by the company to review the interim financial information in the interim report for the six months ended 30 September 2010 which comprises the consolidated interim statement of comprehensive income, the consolidated interim balance sheet, the consolidated interim cash flow statement and the consolidated interim statement of changes in equity and the related notes 1 to 11. We have read the other information contained in the interim financial report and considered whether it contains any apparent misstatements or material inconsistencies with the interim financial information.
This report is made solely to the company in accordance with guidance contained in ISRE (UK and Ireland) 2410, "Review of Interim Financial Information performed by the Independent Auditor of the Entity". Our review work has been undertaken so that we might state to the company those matters we are required to state to them in a review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company, for our review work, for this report, or for the conclusion we have formed.
Directors' responsibilities
The interim report is the responsibility of, and has been approved by, the directors. The AIM rules of the London Stock Exchange require that the accounting policies and presentation applied to the interim financial information are consistent with those which will be adopted in the annual accounts having regard to the accounting standards applicable for such accounts.
As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The interim financial information in the interim report has been prepared in accordance with the basis of preparation in note 2.
Our responsibility
Our responsibility is to express to the company a conclusion on the interim financial information in the interim report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim financial information in the interim report for the six months ended 30 September 2010 is not prepared, in all material respects, in accordance with the basis of accounting described in note 2.
Grant Thornton UK LLP
Chartered Accountants
Sheffield
22 November 2010
This information is provided by RNS
The company news service from the London Stock Exchange
END
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