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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Ekay | LSE:EKY | London | Ordinary Share | GB00B0NL6B21 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 6.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
Ekay plc Interim Results for the six months to 31 December 2005 Maiden Figures Since Placing and AIM Admission in Jan 2006 Ekay plc, announces its first set of results as an AIM quoted company. Ekay is an advertising and marketing agency which specialises in advising clients on the use of television, national and local press, magazines, the internet, direct mail and posters, for business development purposes. Ekay has particular expertise in direct marketing. KEY POINTS * Strong results: * + Turnover up 158% to £16.4 million (H1 2004: £6.3m) + Pre-tax profit up 42% to £474,000 (H1 2004: £334,000) * Dividend: * + Interim dividend of £500,000 in the period pre-AIM admission + The board anticipates a final dividend for the financial year ending 30 June 2006 * Key Directorate appointments: * + Tony Sullivan, Chairman + Julian Paul, Non-Executive Director * 10% growth in client base with competitive position strengthened * + Diversity and quality of mandates * Possible acquisitions identified Eddie Powell, Chief Executive, commented: "Ekay views itself as a provider of high value, no-nonsense services which, coupled with an aggressive approach to new business, has proven to be a winning formula and competitive differentiator. "In the second half we plan to increase our infrastructure through recruitment and improved internal facilities enabling us to provide a consistently high level of service to all our clients, both new and established. "We have a keen eye on growth through acquisition opportunities and are considering a number of earnings enhancing, synergistic targets and look forward to the second half with confidence." 20 February 2006 Enquiries: Ekay plc Eddie Powell, Chief Executive Tel: 01474 334343 Shore Capital & Corporate Ltd Guy Peters Tel: 0207 4084090 CHAIRMAN'S STATEMENT & CHIEF EXECUTIVE'S REPORT The first half has been one of intense activity; juggling the demands of the AIM admission which completed on 5th January and growing the customer base and business book. We have shown success in both of these activities. The move to gain an AIM quotation provides us with greater presence in the market place augmenting our reputation of punching above our weight in terms of client size and quality. In addition, as a quoted company we will proceed with acquisition plans to expand the business through acquisitions, indeed we are in active discussions with a range of possible acquisition candidates each of which would be earnings enhancing and synergistic. It would be fair to state that the past six months has been the most successful period in Ekay's eleven year history in terms of new business development. Our client base has increased by 10% during the period as we continue to increase the quality and diversity of mandates being won, notably in the area of direct response. Moreover the period has exposed a trend towards online marketing and advertising projects which reflect greater use of the internet in business and commerce. Indeed this has been one of the fastest growing elements of our business during the first half, albeit from a low base. The Company also moved to strengthen its Board through the appointment of Tony Sullivan as Chairman. Tony brings considerable contacts and experience through his 30 years in the media and advertising industry. In addition, on 2 February, we announced the appointment of Julian Paul as Non-Executive Director. Julian brings strong financial and business credentials to the Company through his long experience with a number of publicly quoted media companies. Financial Summary The continued growth in business resulted in a 158% improvement in turnover to £16.4 million (H1 2004: £6.3m) and a pre-tax profit of £474,000 (H1 2004: £ 334,000). Gross profit increased by £310,000 or 42.6% to over £1.0 million, but with a lower gross margin of 6.31% (H1 2004: 9.08%). The lower gross margin was primarily as a result of the change in the mix of client billings over the period, with normal margins for the business' core activity of media buying and planning. The business continues to operate from a low cost base, albeit costs for the period increased slightly due to the normalisation of directors' remuneration and additional board costs. Business Overview Ekay is an advertising and marketing agency which specialises in advising clients on the use of television, national and local press, magazines, the internet, direct mail and posters, for business development purposes. Ekay has particular expertise in direct marketing. Direct marketing uses select media to target a specific audience, with the aim of encouraging a response from the consumer, typically an enquiry for a product or service. An advantage of this type of media is that it facilitates the clients' ability to measure the level of response generated by their advertising spend, allowing them to calculate a more accurate return on investment, a feature which the Board believes differentiates Ekay's product offering relative to other marketing forms. Ekay offers a complete direct marketing solution to its clients, utilising a range of advertising methods and direct mail solutions. In addition to advising on strategy, the Company also offers a complete design and media buying service. Ekay has a graphics department, in-house print consultancy and on-line analysis and marketing consultancy enabling it to provide clients with comprehensive solutions. The Company's largest media activity at present is in television, where the Board believes that the Company is a recognised expert and a market leader in its niche direct marketing sphere. The Board believes that new media marketing campaigns, including activities such as SMS text messaging, web advertising and the effective use of web site design are increasingly being adopted by corporate users. The Directors anticipate that new media will be the Company's fastest growing area of activity over the next few years. Dividend It is the board's intention to pay a regular interim and final dividend to Shareholders. Dividends are anticipated to be paid in respect of the financial year ended 30 June 2006. Outlook Ekay views itself as a provider of high value, no-nonsense services which, coupled with an aggressive approach to new business, has proved to be a winning formula and competitive differentiator. In the second half we plan to increase our infrastructure through recruitment and improved internal facilities enabling us to provide a consistently high level of service to all our clients, both new and established. We have a keen eye on growth through acquisition opportunities and are considering a number of earnings enhancing, synergistic targets and look forward to the second half with confidence Tony Sullivan Chairman Ekay Plc Unaudited consolidated profit and loss account for the 6 months ended 31 December 2005 Notes 6 months to 6 months to 12 months to 31 December 31 December 30 June 2005 2004 2005 Unaudited Unaudited Audited £ £ £ Turnover 16,431,383 6,345,364 20,106,815 Cost of sales (15,394,024) (5,618,113) (18,279,959) Gross profit 1,037,359 727,251 1,826,856 Administrative expenses (615,814) (393,155) (915,022) 421,545 334,096 911,834 Other operating income 4,350 4,075 8,425 Operating profit 425,895 338,171 920,259 Interest receivable and 48,325 17,902 82,186 similar income Profit on ordinary 474,220 356,073 1,002,445 activities before taxation Taxation (131,000) (89,119) (250,895) Profit on ordinary 343 ,220 266 ,954 751 ,550 activities after taxation Dividends 2 (500,000) (50,500) (495,500) (Deficit)/ profit (156,780) 216,454 256,050 transferred to reserve Earnings per share - basic 3 0.97p 267p 752p - diluted 3 0.92p 267p 752p Unaudited statement of total recognised gains and losses 6 months to 6 months to 12 months to 31 December 31 December 30 June 2005 2004 2005 Unaudited Unaudited Audited £ £ £ Profit on ordinary activities 343,220 266,954 751,550 after taxation Total recognised gains and 343,220 266,954 751,550 losses relating to this year Prior period adjustment - (139,455) (139,455) Total gains and losses for the 343,220 127,499 612,095 period Ekay Plc Unaudited consolidated balance sheet as at 31 December 2005 Notes As at As at As at 31 December 31 December 30 June 2005 2004 2005 Unaudited Unaudited Audited £ £ £ Fixed assets Intangible assets 22,473 - - Tangible assets 308,469 249,695 315,478 330,942 249,695 315,478 Current assets Debtors 3,747,820 1,397,181 2,394,253 Cash at bank and in hand 862,559 827,979 1,747,511 4,610,379 2,225,160 4,141,764 Creditors: Amounts falling due within (4,057,081) (1,515,569) (3,458,360) one year Net current assets 553,298 709,591 683,404 Net assets 884,240 959,286 998,882 Capital and reserves Called up share capital 100,627 100,000 100,000 Share premium account 41,511 - - Profit and loss account 742,102 859,286 898,882 Equity shareholders' funds 6 884,240 959,286 998,882 Ekay Plc Unaudited consolidated cashflow statement for the 6 months ended 31 December 2005 Notes 6 months 6 months 12 months ended ended ended 31 December 31 December 30 June 2005 2004 2005 Unaudited Unaudited Audited £ £ £ Net cash (outlow)/ inflow 4 (905,631) 610,242 2,289,831 from operating activities Returns on investments and servicing of finance Interest received 48,325 17,902 82,186 Net cash inflow from 48,325 17,902 82,186 returns on investments and servicing of finance Taxation UK Corporation tax payment - - (290,987) Capital expenditure Formation of quasi (22,473) - - subsidiary Purchase of tangible fixed (30,361) (208,873) (442,227) assets Sale of tangible fixed - 3,000 148,000 assets Net cash outflow from (52,834) (205,873) (294,227) capital expenditure Equity dividend paid (250,000) (50,500) (495,500) Net cash (outflow)/ inflow (1,160,140) 371,771 1,291,303 before financing Financing Loans received net of costs 233,050 - - Shares issued 42,138 - - Net cash inflow from 275,188 - - financing (Decrease)/ increase in 5 (884,952) 371,771 1,291,303 cash Ekay Plc Notes to the Interim Statement For the 6 months ended 31 December 2005 1. Basis of Preparation The consolidated interim financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention. The principal accounting policies of the group have remained unchanged from those set out in the group's 2005 annual report and financial statements. The financial information set out in this interim report does not constitute statutory accounts as defined by section 240 of the Companies Act 1985. The figures for the year ended 30 June 2005 have been extracted from the statutory financial statements which have been filed with the Registrar of Companies. The auditors' report on those financial statements was unqualified and did not contain a statement under section 237(2) of the Companies Act 1985. 2. Dividends An interim dividend of £5.00 in respect of the 100,000 £1 shares in issue as at 20 October 2005 was proposed on 14 November 2005. 3. Earnings Per Share The calculation of the basic and diluted earnings per share is based on the profit on ordinary activities after tax and on the weighted average number of ordinary shares in issue during the period. The profit and weighted average number of shares used in the calculations are set out below: Basic earnings per Profit Weighted Profit per share average number share pence £ of shares 6 months ended 31 343,220 35,219,450 0.97 December 2005 6 months ended 31 266,954 100,000 267 December 2004 Year ended 30 June 2005 751,550 100,000 752 Diluted earnings per Profit Weighted Profit per share average number share pence £ of shares 6 months ended 31 343,220 37,377,900 0.92 December 2005 6 months ended 31 266,954 100,000 267 December 2004 Year ended 30 June 2005 751,550 100,000 752 On 14 November 2005, special resolutions were passed to subdivide the issued share capital of 100,627 ordinary £1 shares into 10,062,700 ordinary 1p shares and increasing the authorised share capital to £1,000,000. Additionally on the same date, there was a bonus issue of 2.5 ordinary shares of £0.01 each for each ordinary share in issue resulting in the allotment and issue of 25,156,760 additional ordinary 1p shares. 4. Reconciliation of operating profit to net cash outflow/(inflow) from operating activities: 6 months 6 months 12 months ended ended ended 31 December 31 December 30 June 2005 2004 2005 Unaudited Unaudited Audited £ £ £ Operating profit 425,895 338,171 920,259 Depreciation 37,371 22,528 48,098 Loss on disposal of fixed - 2,364 2,364 assets (Increase)/ decrease in (1,936,365) 586,719 (411,243) debtors Increase/ (decrease) in 567,468 (339,540) 1,730,353 creditors Net cash (outflow)/ inflow (905,631) 610,242 2,289,831 from operating activities operating activities 5. Reconciliation of net cash flow to movements in net funds: 6 months 6 months 12 months ended ended ended 31 December 31 December 30 June 2005 2004 2005 Unaudited Unaudited Audited £ £ £ Net funds at start of 1,747,511 456,208 456,208 period (Decrease)/ increase in (884,952) 371,771 1,291,303 cash in the period Cash inflow from new loan (233,050) - - Net funds at the end of 629,509 827,979 1,747,511 period On 25 November 2005, the company raised £233,050 after expenses by loan instrument from The Capital Fund No.1 LP. The loan instrument converted into ordinary shares at the placing price on the company's admission to AIM on 5 January 2006. 6. Reconciliation of movements in shareholders' funds 6 months 6 months 12 months ended ended ended 31 December 31 December 30 June 2005 2004 2005 Unaudited Unaudited Audited £ £ £ Profit for the financial 343,220 266,954 751,550 period Dividend (500,000) (50,500) (495,500) (156,780) 216,454 256,050 Issue of ordinary share 42,138 - - capital (114,642) 216,454 256,050 Shareholders' funds at 998,882 742,832 742,832 beginning of period Shareholders' funds at end 884,240 959,286 998,882 of period Copies of these interim statements will be posted to shareholders in due course and are available on the website at www.ekay.co.uk Copies will also be available from The Maltings, 53/54 Bath Street, Gravesend, Kent. DA11 0DF. END
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