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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Internet Bus. | LSE:IBG | London | Ordinary Share | GB0003754073 | 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% | 9.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:9206J Internet Business Group 14 December 2007 For release: 14 December 2007 Internet Business Group plc ("IBG", the "Company" or the "Group") PRELIMINARY RESULTS FOR THE YEAR ENDED 31 OCTOBER 2007 Internet Business Group plc, the AIM listed performance advertising and media company, is pleased to announce preliminary results for the financial year ended 31 October 2007. Highlights: * AffiliateFuture sales increased by 30.8% to £14.293m (2006: £10.928m) * IBG Media sales increased by 61.8% to £0.660m (2006: £0.408m) * Net assets increased by 29.2% to £4.401m (2006: £3.407m), including cash of £1.691m * Good progress in International divisions * Recommended offer by TMN Group plc Maziar Darvish, Chairman of IBG, commented: "IBG remains a growing, profitable business with a strong balance sheet. Our focus continues to be on growing the online advertising and media operations both in the UK and international markets." "We are pleased to announce the recommended offer by TMN Group plc. As this offer is equity based, shareholders have the opportunity to gain from the potential upside offered by IBG, as part of a larger Media and Marketing services organisation." On outlook, he added: "Trading since year-end has been in line with management expectations and we look forward to the deployment of our new technologies and platforms to support continued growth." For further information please contact: Internet Business Group plc Tavistock Communication Limited Maziar Darvish, Chairman Matt Ridsdale 020 7927 8102 / 07967 039 693 020 7920 3150 Strand Partners Limited St Helen's Capital plc James Harris Ruari McGirr 020 7409 3494 020 7628 5582 CHAIRMAN'S STATEMENT Introduction I am pleased to report IBG's results for the financial year ended 31 October 2007. Financial Review Turnover for the period increased by 23% to £16.44m (2006: £13.40m). This resulted in an increase of 29% in profit before share based charges, depreciation, interest, tax, amortisation and movement in investments to £1.560m (2006: £1.208m). During the period under review IBG's net asset value increased to £4.40m (2006: £3.41m). An overview of the financial performance of the Group is provided below. Year Year ended ended 31 October 2006 31 October 2007 (Restatement of (Audited) audited accounts) £'000 £'000 Turnover 16,442 13,404 Profit before interest, tax, depreciation and amortisation 1,560 1,208 Normalised Profit1 1,402 1,103 Share based payments2 (105) (25) Impairment / amortisation of intangible assets 3 (258) (97) Investments4 (117) 110 Profit before tax 922 1091 Basic earnings per share 1.17p 1.49p Fully diluted earnings per 1.16p 1.47p share Normalised Earnings per share5 1.84p 1.52p 1 Normalised profit excludes IFRS share based charges, movements in the Company's investments and IFRS amortisation of acquired intangible assets. 2 These figures represent the IFRS share based payment charges to the profit & loss account. 3 These figures represent the amortisation of acquired intangible assets over a 5 year period. These charges are in line with a new accounting policy adopted by the Group in line with IFRS requirements. 4 These figures represent the movement in the value of the Company's investments during a given period. The investments comprise of a holding of 0.2% in Ten Alps plc (value as at 31 October 2007 of £65,681) as well as a historic loan to the Company's employee benefit trust, which holds 750,000 ordinary shares of Internet Business Group plc. 5 Calculated by dividing the Normalised profit (which excludes IFRS share based charges, movements in the Company's investments and IFRS amortisation of acquired intangible assets) by the weighted average number of shares in the period of 76,201,896 (2006: 72,565,151) A segmental breakdown of the Group's financial performance is provided below: Divisional Breakdown Hosting & Central Inter Advertising E-Commerce Media Services Overheads Company Total £'000 £'000 £'000 £'000 £'000 £'000 £'000 Turnover 14,293 1,695 660 270 - (476) 16,442 Percentage of total turnover 87% 10% 4% 2% - (3%) 100% Earnings before interest, tax, depreciation, amortisation and central overheads 2,183 22 434 112 (1,191) - 1,560 Amortisation of intangible assets 12 - 246 - - 258 Profit/(loss) before taxation 2,176 11 131 105 (1,501) - 922 Analysis of Financial Performance by Division In addition to restatements relating to IFRS compliance, the 2006 comparative figures (below) have been amended to reflect a small (under £40,000) inter-divisional re-allocation attributable to operations in Spain. Advertising Year ended 31 % change Year ended 31 October 2006 October 2007 (restated) £'000 £'000 Turnover (including inter-company sales) 14,293 10,928 31% Gross profit margin 22% 21% Earnings before interest, tax, depreciation and amortisation and central overheads 2,183 1,622 35% Amortisation of intangible assets (12) (7) Divisional profit before central overheads 2,176 1,631 33% Media Year ended 31 % change Year ended 31 October 2006 October 2007 (restated) £'000 £'000 Turnover (including 660 408 62% inter-company sales) Gross profit margin 77% 56% Earnings before interest, tax, depreciation, amortisation & central overheads 434 129 236% Amortisation of intangible assets (246) (76) Divisional profit before central overheads 131 51 157% E-commerce Year ended 31 % change Year ended 31 October 2006 October 2007 (restated) £'000 £'000 Turnover 1,695 2,133 (21%) Gross profit margin 22% 23% Earnings before interest, tax, depreciation and amortisation and central overheads 22 143 (85%) Divisional profit before central overheads 11 106 (90%) Analysis of Financial Performance by Region A segmental breakdown of the trading performance for the year ended 31 of October 2007 by geography is given below: Inter UK Americas Europe company Total £'000 £'000 £'000 £'000 £'000 Turnover 15,935 802 181 (476) 16,442 Percentage of total turnover 97% 5% 1% (3%) 100% Profit before interest, tax, depreciation and amortisation 1,533 21 6 1,560 Amortisation of intangible assets (246) (12) - (258) Profit before taxation 908 8 6 922 Business Review Performance Advertising - AffiliateFuture (http://www.AffiliateFuture.com) The Board believes that the 2007 financial year has been a transitional period for AffiliateFuture and despite recording significant sales growth of 31% to £14.293m (2006:10.928m), the result was below our initial expectations. The planned technical recruitment, investment in the development of new user interfaces as well as an upgraded platform were brought forward from the 2008 financial year to the late stages of the 2007 financial year. These new developments remain at a beta-test stage, but their availability to a much wider range of clients and publishers is expected shortly. The improved platform, coupled with continuing advances being made in our portfolio of travel-related affiliate offerings and further functionality, planned for the 2008 financial year, is expected to underpin the continued growth in the AffiliateFuture division. IBG Media The year to 31 October 2007 represents the first full financial year of operations for IBG Media in its current form, with its own website assets. During this time, significant progress has been made, with sales during the period up 62% to £0.66m (2006: £0.41m). Gross margins were 77% (2006: 56%) CheapHolidayDeals.co.uk, IBG Media's flagship website, has continued to expand the range of destinations covered and saw the launch of a dedicated Ski Holidays channel. In addition, the last minute holidays section of the site was significantly improved. Reviews.CheapHolidayDeals.co.uk was also launched in the period and represents the Company's first foray into the area of user generated content. Henoo.com, originally a proof of concept site for AffiliateFuture's travel services, has undergone further development during the period with the launch of a new hotel search beta in the first week of the new financial year. Additionally, work is currently underway to launch new flight search functionality on the site. This has taken place in tandem with the development and testing of the new functionality within the AffiliateFuture travel web services. IBG Media has also completed the first phase of commercial testing for the Henoo.com Handpicked offering, which is broadcast to a quarter of a million consumers and is planning to launch a revised offering in the first quarter of the 2008 financial year. During the period under review, IBG Media made its first non-travel related acquisition, Net Free Stuff. The name has been used to launch initial offerings in the US, Spanish and Australian markets. Whilst these sites are at a very early stage of commercial development, they do provide IBG with experience of operating media websites outside of the UK. IBG Media has now established itself as a core part of the Group and the Board looks forward to its continuing development over the coming years. E-commerce In the Group's 2006 preliminary results statement, the Board highlighted its expectation that the contribution of IBG's E-commerce business was expected to decline in the 2007 financial year. This decline is largely attributable to focusing Group resources towards its Advertising and Media operations. Whilst the new management and processes put in place in the first half of the 2007 financial year have started to have a positive effect on the performance of the division, sales for the period under review declined 21% to £1.695m (2006: £2.133m). The key objectives during the year for the E-Commerce division were to introduce a separate management team and re-locate operations in order to separate the division from the Advertising and Media divisions. I am pleased to report that these objectives have been achieved and with restructuring now complete, the focus within this division has returned to sales and marketing. Given the growing divergence between our E-commerce activities and our Advertising and Media operations, the Board will be evaluating strategic options for the E-Commerce business during the 2008 financial year. International I am very pleased to report that, in our International Division, the Board's objectives for the 2007 financial year have all been met. Our AffiliateFuture business in the US demonstrated strong growth and remains profitable. Sales for the period grew an impressive 102.6% to £0.758m. This progress is particularly pleasing as we achieved this growth despite the negative impact of weakness in the US Dollar. In Spain, the AffiliateFuture network is now operational and attracting both advertisers and publishers. Also during the period, IBG Media has made its first launches in the Australian, US and Spanish markets utilising the Net Free Stuff brand and the progress to date has been pleasing. The Board expects further significant progress to be made in IBG's international offerings during the course of the 2008 financial year. Recommended Offer The Company today announced that the boards of IBG and TMN Group plc had reached agreement on the terms of a recommended offer by TMN Group plc to acquire the entire issued and to be issued share capital of IBG to be effected by way of a Court approved scheme of arrangement under section 425 of the Companies Act 1985 (the "Offer"). A separate announcement containing details of the Offer has been issued today. Outlook Current trading remains in line with management expectations. I would like to take this opportunity to thank all staff who have worked so hard to deliver another solid year of progress for the Group. Maziar Darvish Chairman 14 December 2007 AUDITED CONSOLIDATED INCOME STATEMENT Year Ended 31 October 2006 Year (Restatement of Ended 31 audited October 2007 accounts) £'000 £'000 Turnover 16,442 13,404 Cost of sales (12,287) (10,433) -------------------------------- Gross profit 4,155 2,971 Administration expenses (3,012) (1,819) Amortisation of intangible assets (258) (97) -------------------------------- Operating profit 885 1,055 Interest receivable (net) 37 36 -------------------------------- Profit on ordinary activities before taxation 922 1,091 Taxation (34) (13) -------------------------------- Profit on ordinary activities after taxation 888 1,078 -------------------------------- Retained profit for the period 888 1,078 ================================ Basic earnings per share 1.17p 1.49p Fully diluted earnings per share 1.16p 1.47p AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Share Share Other Retained Total Capital Premium Reserves Earnings Equity £'000 £'000 £'000 £'000 £'000 Balance at 1 November 2005 721 4,597 81 (3,909) 1,490 Profit for the year ended 31 October 2006 - - - 1,078 1,078 Share based payments - - 25 - 25 Shares issued 46 766 - - 812 Transfer of revaluation reserve - - (75) 75 - Foreign currency reserve - - 2 - 2 Balance at 31 October 2006 767 5,363 33 (2,756) 3,407 Profit for the year ended 31 October 2007 - - - 888 888 Shares issued 5 10 - - 15 Share based payments - - 105 - 105 Foreign currency reserve - - (14) - (14) Balance at 31 October 2007 772 5,373 124 (1,868) 4,401 AUDITED CONSOLIDATED BALANCE SHEET Year ended Year 31 October 2006 ended (Restatement of 31 October audited 2007 accounts) £'000 £'000 Non-current assets Intangible assets 1,242 1,178 Tangible assets 576 415 Investments 234 350 ---------------------------- 2,052 1,943 Current assets Stock 415 506 Trade and other receivables 2,388 1,588 Cash at bank 1,691 1,375 ---------------------------- 4,494 3,469 Current liabilities Trade and other payables (2,145) (2,005) ---------------------------- Net current assets 2,349 1,464 Net assets 4,401 3,407 ============================ Share capital and reserves Called up share capital 772 767 Share premium account 5,373 5,363 Other reserves 124 33 Profit and loss account (1,868) (2,756) ---------------------------- Total equity 4,401 3,407 ============================ AUDITED CONSOLIDATED CASHFLOW STATEMENT Year ended Year 31 October 2006 ended (Restatement of 31 October audited 2007 accounts) £'000 £'000 Cash generated from operations 943 930 Cash flow from investing activities Interest received 37 36 Purchase of assets and investments (679) (1,481) ---------------------------- Net cash used in investing activities (642) (1,445) Cash flows from financing activities Shares issued 15 813 ---------------------------- Net cash from financing activities 15 813 Net increase in cash and cash equivalents 316 298 Cash and cash equivalents at the beginning of the period 1,375 1,077 Cash and cash equivalents at the end of the ---------------------------- period 1,691 1,375 ============================ Reconciliation of operating profit to net cash Inflow from operating activities Year ended Year 31 October 2006 ended (Restatement of 31 October audited 2007 accounts) £'000 £'000 Profit before taxation 922 1,091 Depreciation charge 138 59 Amortisation of intangible assets 315 180 Share scheme charges 105 26 Write off/back of impairment of investment 117 (110) Net finance income (37) (36) Operating cash flow before changes in working capital 1,560 1,210 Increase in debtors (800) (857) Decrease/(increase) in stock 91 (153) Increase in creditors 106 729 Other reserves (14) 1 ---------------------------- Cash generated from operations 943 930 ============================ NOTES TO THE PRELIMINARY ACCOUNTS FOR THE YEAR ENDED 31 OCTOBER 2007 1. Nature of financial information The financial information contained in this document does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. The financial information for 2006 is derived from the statutory accounts for 2006 which have been delivered to the registrar of companies, restated to take into account the adoption of IFRS. A reconciliation of all changes can be found in note 7. The auditors have reported on the 2006 accounts; their report was unqualified and did not contain a statement under section 237 (2) or (3) of the Companies Act 1985. The statutory accounts for 2007 will be finalised on the basis of the financial information presented by the directors in this preliminary announcement and will be delivered to the registrar of companies in due course 2. Board approval The preliminary results for the year end 31 October 2007 were approved by the board of directors on 13 December 2007. 3. Earnings per share Basic profit per share is calculated based on the profit on ordinary activities after tax and minority interests divided by the weighted average number of shares in issue being 76,201,896 (2006: 72,565,151). The calculation of diluted profit per share is based on a weighted average number of shares in issue of 76,344,811 (2006: 73,300,372). This is comprised of 142,915 shares (2006: 735,220 shares) to factor in the dilutive effect arising from the potential exercise of options under the Company's executive share option scheme. 4. Gains and losses The Company had no recognised gains or losses in either the current or preceding periods other than the profit for the period. 5. Issue of shares During the period employees exercised 500,000 1p ordinary shares at an exercise price of 2.875p. At 31 October 2007 the issued number of shares in the Company was 77,190,800. 6. Segmental reporting The Group's primary segmental breakdown is according to divisions and is set out in the chairman's statement under the heading divisional breakdown. 7. Basis of preparation: IFRS The financial information for the year ended 31 October 2007 is audited but does not constitute statutory accounts. The adoption of IFRS did not result in substantial changes to the Group's accounting policies under UK GAAP and as set out in the Group's financial statements for the year ended 31 October 2006. In summary: * The adoption of IFRS 2 'Share based payment' has resulted in a change in accounting policy for share based payment. Under UK GAAP the provision of share based payments to employees did not result in a charge to the income statement. Under IFRS, the Group charges the cost of share based payments to the Income statement over the vesting period. * The adoption of IFRS 3 'Business Combinations' and IAS36 'Impairment of Assets' have resulted in a change in the accounting policy for goodwill. Under UK GAAP, the Group had a policy of amortising goodwill on a straight line basis over a period of 5 years coupled with a review for possible impairment at each balance sheet date. In accordance with the provisions of IFRS 3, the Group amortises acquired intangible assets over 5 years and conducts annual impairment reviews. This preliminary results have been prepared according to IFRS and for comparative purposes the financial information for the year ended 31 October 2006 has been restated. This restatement to IFRS had the effect of reducing retained earnings as of 31 October 2005 by £6,216, as a result of share based payments for periods before 1 November 2005. For the year ended 31 October 2006, restated profits were reduced by £24,663 due to share based payments. As per the accounting policy changes regarding capitalisation of self generated assets and the acquisitions of consumer database records equated to the capitalisation of £254,611 of salaries as well as £37,744 relating to acquisitions of database records in the year ended 31 October 2007. The reconciliation of the restatement of comparable figures from UK GAAP to IFRS is provided below. Reconciliation of Profit As at end of 31 October 2006 (end of last period presented under UK GAAP) Transition Under UK GAAP to IFRS IFRS £'000 £'000 £'000 Turnover 13,405 13,405 Cost of Sales (10,434) (10,434) ------------------------------- Gross profit 2,971 2,971 Administration Expenses (1,891) (25) (1,916) Operating Profit 1,080 1,055 Net Finance income 36 36 Profit before taxation 1,116 1,091 Taxation (13) (13) Profit for the period 1,103 1,078 EPS 1.52p 0.03p 1.49p Diluted EPS 1.50p 0.03p 1.47p Profit UK GAAP 1,103 Share based payments (25) Profit IFRS 1,078 Reconciliation of Equity At 31 October 2006 At 1 November 2005 End of last period period presented under Date of Transition UK GAAP Opening Opening IFRS IFRS Effect of Balance Effect Balance UK GAAP IFRS sheet UK GAAP of IFRS sheet £'000 £'000 £'000 £'000 £'000 £'000 Fixed Assets Tangible Assets 333 333 414 414 Intangible Assets 83 83 1,178 1,178 Investments 175 175 351 351 ----------------------------------------------------------- 591 0 591 1,943 1,943 Current Assets Stock 353 353 506 506 Debtors 731 731 1,588 1,588 Cash at bank 1,077 1,077 1,375 1,375 ----------------------------------------------------------- 2,161 0 2,161 3,469 3,469 Current Liabilities (1,262) 0 (1,262) (2,005) (2,005) Net Assets 1,490 0 1,490 3,407 3,407 Share Capital 721 721 767 767 Share premium 4,597 4,597 5,363 5,363 Other Reserves 75 6 81 2 31 33 Retained earnings (3,903) (6) (3,909) (2,725) (31) (2,756) Equity 1,490 0 1,490 3,407 3,407 Total equity Uk GAAP 1,490 3,407 Total equity IFRS 1,490 3,407 This information is provided by RNS The company news service from the London Stock Exchange END FR FFLSMLSWSEIE
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