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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Mediasurface | LSE:MSR | London | Ordinary Share | GB00B01XYM75 | 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% | 13.00 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
RNS Number:1485O Mediasurface PLC 18 February 2008 Mediasurface plc Final Results for the Year Ended 30th September 2007 Mediasurface plc, (AIM: MSR) (the "Group" or the "Company") the AIM listed Content Management Software Author and Vendor announces results for the year ended 30th September 2007. Financial and Operating Highlights * Turnover increased o Overall by 17 per cent. to £11.28 million (2006 : £9.67 million) o On a pre-acquisition basis Turnover increased 5 per cent. * Annual value of contracted support revenues of £4.26 million including the addition of £1.0 million in Immediacy (2006 : £2.50 million) * Reported EBITDA loss before FRS20 Share Option charges of £1.30 million (2006 : profit of £0.97 million) * The loss reported includes Pepperio losses of £1.06 million * Cash of £1.78 million as at 30th September 2007 (2006 : £1.08 million) * Continued investment in software development of £1.15 million (2006 : £1.37 million) o Released new versions of Mediasurface Morello 5.5 in January 2007 and 5.6 in August 2007 o Further leveraged benefit of Indian R&D centre Chairman's Statement The Group achieved revenues of £11.28 million (2006: £9.67 million), up 17 per cent. compared to last year including the acquisition of Immediacy Limited. The Group reported an EBITDA loss excluding non-cash exceptional items of £1.30 million (2006: profit £0.97 million) for the full year. During the year the Group lost £1.06 million on providing the Pepperio roll-out. Excluding this investment and the investment in US expansion, the Group was break-even at EBITDA level. As at 30th September 2007 the Group had £1.78 million (2006 : £1.08 million) in cash excluding a three year term loan due of £1.90 million (2006 : £nil) In July 2007 the Group concluded the acquisition of Immediacy Limited which added a new product to the Group's product portfolio addressing the medium sized enterprise market. The business has enjoyed significant growth in this market sector and this continued to be the case post acquisition, reporting results slightly ahead of expectations during the last quarter. Morello had a mixed year. Having enjoyed a profitable first half, reporting significant wins at the Foreign and Commonwealth Office and Office of Fair Trading, the second half proved to be more challenging. The Group had anticipated that the launch of Microsoft Office Sharepoint Server (MOSS) 2007 would be a disruptive event in the Morello market and to counter this developed an innovative MOSS Connector to allow customers to leverage MOSS content in Morello. The Group experienced extended sales cycles whilst customers digested the merits of MOSS 2007 who eventually concluded that the Microsoft product did not meet the needs of Enterprise Content Management. In addition, sales opportunities in the Group's financial vertical were also delayed by the turmoil in the Financial Markets toward the end of our financial year. As a consequence, Morello revenues grew by a modest 5 per cent. compared to last year. In line with stated policy, earnings for the foreseeable future will be reinvested to finance the growth of the Group and acquisition strategy. Consequently the Directors do not recommend the payment of a dividend. (2006 : £Nil) The Board is now confident that the Group's prospects are much improved as a result of the cost savings made. We now have every reason to believe that further progress will be achieved based on an encouraging start to the new financial year. In conclusion I would like to express my appreciation to all the management, staff and shareholders for their continued support during the year. Michael Jackson Chairman 18th February 2008 Chief Executive's Statement The year ended 30th September 2007 was characterised by two very different halves to the year. In the first half the Company delivered revenues of £6.06 million and an EBITDA of £0.47 million. This was based on continued strong sales successes around the major Morello product line, coupled with exceptionally strong demand for professional services and a growing pre-contracted maintenance annuity stream. During the half, the business enjoyed a number of high profile, high value new business sales wins including the Foreign and Commonwealth Office, the Office of Fair Trading and VRT, a major Belgian broadcaster. The second half of the year was much more challenging for the core Morello business. The professional services and maintenance revenue streams remained very strong with continued high demand for services and continued growth in the pre-contracted revenues for maintenance. The company ended the year with an annualised pre-contracted run rate of £3.26 million (2006: £2.50 million) for the Morello maintenance stream. The situation in Morello licence sales was however much more difficult. There were two principal contributing market factors which had a much greater impact on the sales result than had been anticipated by the management. Firstly the launch of MOSS 2007 in April resulted in a much greater marketplace overhang than expected. As a direct result, sales cycles were heavily delayed while customer's internal teams were distracted into evaluating MOSS as a potential solution to their web content management needs. In reality MOSS was deemed not a suitable product by the vast majority of potential customers and no deals were lost to MOSS, however the delays and associated sales efficiency impacts within the business did have a significant negative impact on the expected top line revenue. The second key impact was less predictable. The effect of the "credit crunch" following on from the issues in the USA with respect to the sub-prime market resulted in uncertainty in one of our key markets, financial services. The effect of this so close to the year end on a market that typically represents approximately 25 per cent. of our revenues was dramatic as prospects suspended, postponed or delayed a significant number of sales cycles. Pepperio The Pepperio product line had a disappointing year after a very promising start. The early encouraging signs persuaded management to continue to invest in channel establishment and a high growth strategy. Unfortunately the channel strategy proved successful from a channel partner recruitment perspective but, with a few notable exceptions, the channel proved not so successful from a sales execution standpoint. The resulting numbers of customers, whilst continuing to grow, was disappointing in the second half of the year and consequently, following the trading announcement in October 2007, significant cost reduction initiatives were implemented. The core Pepperio proposition remains compelling to both customers and partners alike and holds the long term prospect for the group of a secure annuity style revenue from the Software as a Service (SaaS) model. Expectations have accordingly been reset within the business and the costs associated with the product line dramatically reduced. Acquisition Also in the second half and on a far more positive note, the Company acquired Immediacy Limited, a UK based provider of Web Content Management Software to two sectors; mid-sized companies where the solution is deployed as the strategic web platform and within larger organisations where the solution is acquired tactically to support departmental or project based initiatives. Immediacy sits well within the overall product line up of Mediasurface and has enjoyed previous years of growth and success. In the first quarter of ownership of Immediacy within the group, the business slightly exceeded expectations and is now a major contributor to the plc representing around 30 per cent. of the overall business. The profile of the Immediacy revenue stream is the same as Morello (namely, licence sales, professional services and maintenance) but the fact that it is a lower price, higher volume model assists the group in reducing the risks associated with the very high value but less frequent licence transactions in Morello. Fundraising The Company is pleased to advise that it is today announcing alongside the preliminary results a proposed placing of 15,000,000 new ordinary shares of 1p each in the Company ("Placing Shares") at a placing price of 5p per share (the " Placing Price") to raise approximately £750,000 (the "Placing"). The proceeds from the Placing will be used to augment the Company's working capital and provide customers and employees with confidence in Mediasurface's long-term growth prospects. Current Trading and Prospects The Group's first quarter trading of the new financial year, the 3 months ended 31st December 2007, made a modest un-audited EBITDA profit excluding the rationalisation and non-recurring costs for Pepperio of some £0.18 million. As at 31st December 2007 the Group's cash position stood at £0.42 million excluding the term loan of £1.75 million. The Group continues to implement judicious cost reductions including leveraging the full benefits of the Indian R&D centre which together represent cost savings of £2.0 million compared to last financial year. The Directors are confident the Group is now in a position to achieve full year results in line with management expectations. Lawrence Flynn Chief Executive Officer 18th February 2008 Consolidated Profit and Loss Account Year ended 30th September 2007 2007 As Restated £ 2006 £ TURNOVER Existing operations 10,143,829 9,670,713 Acquisition 1,139,701 - Continuing operations 11,283,530 9,670,713 Cost of sales Existing Operations (998,110) (355,044) Acquisition (111,163) - Continuing operations (1,109,273) (355,044) Gross profit Existing Operations 9,145,719 9,315,669 Acquisition 1,028,538 - Continuing operations 10,174,257 9,315,669 Operating expenses Existing Operations (11,006,918) (8,549,062) Acquisition (893,190) - Continuing operations (11,900,108) (8,549,062) OPERATING (LOSS)/PROFIT - Existing Operations (1,861,199) 766,607 - Acquisition 135,348 - Continuing operations (1,725,851) 766,607 Interest receivable 34,492 7,322 Interest payable and similar charges (59,904) (78) (LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION (1,751,263) 773,851 Tax charge on (loss)/profit/ on ordinary activities - (54,314) (LOSS)/PROFIT ON ORDINARY ACTIVITIES AFTER (1,751,263) 719,537 TAXATION AND FOR THE FINANCIAL YEAR (Loss)/Profit per share - basic (2.1)p 0.9p (Loss)/Profit per share - diluted (2.1)p 0.8p Consolidated Statement of Total Recognised Gains/Losses 2007 As restated £ 2006 £ (Loss)/Profit for the financial year (1,751,263) 719,537 Profit/(Loss) on foreign currency translation of equity investments in overseas subsidiaries 80,197 (50,437) Total recognised (losses)/gains relating to the year (1,671,066) 669,100 Prior Year Adjustment 195,896 - Total gains and losses recognised since last annual report (1,475,170) 669,100 Consolidated Balance Sheet 30th September 2007 Note 2007 As restated £ 2006 £ FIXED ASSETS Intangible Assets 4 4,977,313 161,419 Tangible assets 331,022 231,639 5,308,335 393,058 CURRENT ASSETS Debtors 3,934,054 3,499,892 Cash at bank and in hand 1,775,895 1,080,487 5,709,949 4,580,379 CREDITORS: amounts falling due 5 (4,662,618) (2,968,698) within one year NET CURRENT ASSETS 1,047,331 1,611,681 TOTAL ASSETS LESS CURRENT LIABILITIES 6,355,666 2,004,739 CREDITORS: amounts falling due after more than one year 6 (1,230,142) (3,994) NET ASSETS 5,125,524 2,000,745 CAPITAL AND RESERVES Called up equity share capital 996,736 772,448 Share premium account 14,160,171 9,638,377 Shares to be issued 644,653 701,222 Capital redemption reserve 13,083,244 13,083,244 Merger reserve 27,297,412 27,297,412 Profit and loss account (51,056,692) (49,491,958) EQUITY SHAREHOLDERS' FUNDS 5,125,524 2,000,745 Consolidated Cashflow Statement Year ended 30th September 2007 2007 As restated £ 2006 £ Net cash (outflow)/inflow from operating activities Operating (loss)/Profit (1,725,851) 766,607 Exchange difference on fixed asset translation (2,515) 809 Depreciation charge 151,767 107,418 Amortisation of Goodwill 127,623 56,022 Impairment charge 93,056 - Write back of provisional consideration 68,363 - Decrease/(Increase) in debtors 416,941 (1,140,835) Increase in Creditors 126,450 1,108,297 FRS20 Share Option charge 49,763 46,794 Sub total (694,403) 945,112 Returns on investment and servicing finance - interest payable (59,904) (78) - interest receivable 34,492 7,322 (25,412) 7,244 Capital expenditure - Purchase of Tangible Fixed (248,635) (168,976) Assets Taxation - 49,933 Acquisitions Purchase of subsidiary undertaking (5,390,654) - Net cash acquired with subsidiary 796,265 - Sub total (4,594,389) - Financing Issue of Share Capital 4,280,915 - Term loan 2,000,000 - Repayment of term loan (98,871) - Capital element of finance leases (3,994) (5,195) Sub total 6,178,050 (5,195) Increase in cash in year 615,211 828,118 Notes : 1. The financial information set out above does not constitute the Group's statutory accounts as defined by section 240 of the Companies Act 1985 for the years ended 30 September 2007 or 30 September 2006 but is derived from these accounts. Statutory accounts for 2006 have been delivered to the Registrar of Companies in England and Wales and those for 2007 will be delivered following the Company's Annual General Meeting. The auditors have reported on the 2006 and 2007 accounts. Their reports for both years were unqualified and did not contain statements under section 237 (2) or (3) of the Companies Act 1985. 2. The preliminary announcement of results has been prepared under the historical cost convention in accordance with the Group's accounting policies for the year ended 30th September 2007. 3. Earnings per Share The loss per ordinary share is calculated by reference to the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during each period as follows: 2007 As restated 2006 £ £ (Loss)/Profit for the year (1,751,263) 719,537 Basic - weighted average number of shares 81,972,743 77,244,842 Basic - (loss)/profit per Share (2.1)p 0.9p Fully diluted - weighted average number of shares 81,972,743 84,714,632 Fully diluted - (loss)/profit per Share (2.1)p 0.8p 4. Goodwill arose during the year upon the acquisition of Immediacy Limited 5. Creditors due within one year analysed as follows :- Group 2007 2006 £ £ Obligations under finance leases 3,994 5,195 Trade creditors 489,712 333,363 Amounts owed to subsidiary undertaking - - Taxation and social security 1,001,954 467,233 Accruals and deferred income 2,495,971 2,162,907 Term Loan 670,987 - 4,662,618 2,968,698 6. Creditors due after one year analysed as follows :- Group 2007 2006 £ £ Obligations under finance leases - 3,994 Loan 1,230,142 - 1,230,142 3,994 Borrowings due after one year are repayable as follows: 2007 2006 £ £ Finance leases Between one and two years - 3,994 Between two and five years - - After five years - - - 3,994 Loans In one year or less or on demand 670,987 - Between one and two year 670,987 - Between two and five years 559,155 - After five years - - 1,901,129 - 7. The Annual General Meeting is scheduled to be held at 10am 28th March 2008. Notice will be issued in due course. 8. Copies of the Report and Accounts will be available from 4th March 2008 at the Company's offices at Mediasurface House, Newbury Business Park, London Road, Newbury RG14 2QA and at the Company's website www.mediasurface.com. A copy of the Report and Accounts will be posted to all Shareholders. For further information please contact: Lawrence Flynn Chief Executive Officer David Deacon Chief Financial Officer Telephone : 01635 262000 Adam Reynolds Hansard Group, Financial PR Telephone : 020 7245 1100 Oliver Scott/Richard Kauffer KBC Peel Hunt, Nominated Adviser and Broker Telephone : 0207 418 8850 This information is provided by RNS The company news service from the London Stock Exchange END FR EAKASFLPPEFE
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