Milestone Group PLC Milestone Group Plc : Final Results

 
TIDMMSG 
 
   MILESTONE GROUP PLC 
 
   ("Milestone" or the "Company") 
 
   Final Results 
 
   Milestone (AIM:MSG), the AIM quoted provider of digital media and 
technology, announces its final results for the year ended 30 September 
2017. 
 
   Key points 
 
 
   -- Deborah White replaced by Anthony Sanders as CEO (on an interim basis) 
 
   -- Edward Guy Meyer appointed as Business Development Director 
 
   -- Review of operations led to cessation of charitable and social activities 
 
   -- Strategy revised to focus on blockchain-based services to the digital 
      media and fintech markets 
 
   -- OnGuard contract renewals and extensions agreed 
 
   -- Post period end 
 
          -- Software license agreement entered into with Envoy Group Corp Inc 
 
          -- Memorandum of understanding signed to create a joint venture with 
             Seed Media Ltd and Martin Heath 
 
          -- Settlement Agreement with respect of failed placing (October 2016) 
             dispute 
 
 
   The independent auditor's report for the year ended 30 September 2017 
contains a material uncertainty paragraph in respect of going concern. 
An extract taken from the text of the auditor's opinion is set out below 
in part 1 of the notes to this announcement. 
 
   Anthony Sanders, Interim Chief Executive and Chairman, commented: 
 
   "The last financial year has been a challenging one for the Group. The 
year saw a shift in the Group's management and its strategic focus. 
Since September 2017, we have set about streamlining our operations and 
revising our strategy to bring increased focus to the business. We are 
now in a position to prioritise our resources on products and services 
that utilise blockchain technology in the digital media and fintech 
markets and ignite the commercial potential that exists within the 
Group. We would like to thank our shareholders for their continued 
support." 
 
   For further information: 
 
 
 
 
Milestone Group PLC                              Tel: [phone] 
 Tony Sanders 
Cairn Financial Advisers LLP, Nominated Adviser  Tel: [phone] 
 Liam Murray / Jo Turner 
Hybridan LLP, Broker                             Tel: [phone] 
 Claire Louise Noyce 
Walbrook PR Limited, PR                          Tel: [phone] 
 Gary Middleton / Paul Cornelius 
 
 
   CHAIRMAN'S STATEMENT 
 
   To our valued shareholders 
 
   The last financial year has been a challenging one for the Group and we 
would like to thank our shareholders for their continued support. 
 
   The year saw a shift in the Group's management and its strategic focus. 
As Interim Chief Executive Officer, it has been my responsibility to 
ensure these changes have transitioned smoothly. Since September 2017, 
we have set about streamlining our operations and revising our strategy 
to bring increased focus to the business. We are now in a position to 
prioritise our resources on products and services that utilise 
blockchain technology in the digital media and fintech markets and 
ignite the commercial potential that exists within the Group. 
 
   Transitioning and management changes 
 
   In September 2017, Deborah White resigned from her position as Chief 
Executive Officer after nine years with the Group. Deborah guided the 
Group through extensive changes and developments, overseeing our 
transformation from analogue broadcasting to providing digital and 
technology solutions. I have been appointed as Interim Chief Executive 
Officer following seven years on the Board as Technical and Development 
Director. We thank Deborah for all of her efforts and wish her every 
success in the future. 
 
   Also in September 2017, and with a view to building a suitable sales and 
marketing team, we appointed Edward "Guy" Meyer as Business Development 
Director. Guy brings a wealth of experience leading teams across 
traditional and digital media, and is the ideal person to lead our sales 
and marketing effort as we look to develop new revenues from our 
blockchain-based services. 
 
   Streamlining operations 
 
   Change provides an opportunity for reflection and growth. We have, 
therefore, taken time since September 2017 to review our operations, to 
create unity within our services, to reduce spending and to channel 
costs into areas of the business that align with our revised strategy. 
 
   As such, since the period end, we have ceased a number of services that 
were centred on delivering social good. These include the Passion 
Project, Alchemy, Winning in the Game of Life, and the Milestone 
Foundation. We also terminated our membership of the Social Stock 
Exchange. 
 
   Furthermore, and in light of their inability to deliver satisfactory 
results, we decided to cancel a number of other agreements and 
contracts. These include: those involving the Milestone Foundation and 
Passion Project; the cloud-based virtual banking and pre-paid card 
agreement with two London-based finance and investment companies 
announced in April 2016; the agreement with an Indian-focused money 
transfer and pre-paid card group announced in November 2016; and, a 
payroll contract with a UK-based entertainment payroll specialist 
announced in October 2016. 
 
   Our evaluation of the business determined that a number of these 
opportunities had failed to deliver satisfactory results in a reasonable 
timespan owing to poor internal and external execution. We are confident 
that, with our renewed focus, we will avoid such issues in future. 
 
   Fine-tuning our business model 
 
   Since the period end, in December 2017, we negotiated a software 
licensing agreement with Envoy Group Corp, subject to Shareholder 
approval. This grants us an exclusive sublicense for updated versions of 
previously announced products, including Backstage HD, MusicRoo, Black 
Cactus Music, card programmes and KYC products, and enables us to use 
the Black Cactus Global Blockchain platform to build bespoke solutions 
whilst developing our own IP. 
 
   In February 2018, we signed a memorandum of understanding to enter into 
a joint venture (Trust In Media Ltd) with Seed Media Ltd and Martin 
Heath, specifically to develop GDPR compliant payment and IP protection 
solutions for the music industry, utilising both private and public 
blockchain technology. The joint venture will augment our music and 
media publishing capabilities. 
 
   These developments form the first steps of our revised strategy, 
providing the ability to market ready-made products and ensuring we can 
utilise this disruptive technology to create new products for the 
digital media and fintech markets going forward. We look forward to 
expanding our portfolio of products and services, while aiming to work 
with best-of-breed strategic partners. 
 
   In other business areas, the revenues for the resource management and 
reporting platforms, OnSide and OnGuard continue to grow, with all 
current clients renewing or expanding their agreements both during and 
post period. This area of the business will receive increased marketing 
exposure to take advantage of forthcoming GDPR legislation given the 
products' ability to validate individuals and access to data. Disorder 
Magazine continues to flourish under the media publishing division, and 
we are also exploring a number of opportunities to monetise content 
produced. 
 
   Working capital, fund raisings and other matters 
 
   During the year, the Company issued 994,770,335 new ordinary shares for 
a total consideration of GBP3,862,421, of which GBP2,516,220 was 
received in cash during the year, GBP37,500 was received in cash prior 
to the previous year end (held within the shares to be issued reserve), 
GBP58,701 was in exchange for goods and services, and, as announced in 
November 2016, GBP1.25m was not received. As announced in January 2018, 
the Board has reached a settlement with the counterparty, which included 
them waiving the rights to the shares. It is now the Company's intention 
to dispose of the shares in due course. Since the year-end, the Company 
has issued 30,000,000 new ordinary shares following a shareholder 
exercising their warrants and raising GBP150,000 in cash. 
 
   The Company continues to carefully manage its working capital position 
while the changes in strategy take effect and will need to raise further 
monies through subscriptions for new shares in the short term. The 
Company remains firmly focused on generating revenue through developing 
its activities. Protecting the interest of the Company's shareholders is 
a priority and the Board's strategy is to seek to raise funds on a basis 
that is fair to all. 
 
   Results for the year 
 
   Despite the Group's net loss for the year of GBP2,257,524 (2016: 
GBP1,667,270) and revenues of GBP29,395 (2016: GBP71,359), of which 
GBP4,755 (GBP2016: GBP34,104) relates to discontinued operations, the 
Group has an improved statement of financial position at the year-end, 
showing net liabilities of GBP645,884 (2016: GBP1,019,656). 
 
   These results are presented under European Union Adopted International 
Financial Reporting Standards ("EU Adopted IFRS"). 
 
   Shaping the future 
 
   Our vision for the future places our operations in harmony, encouraging 
stability and stimulating revenue. We are now primed to take advantage 
of the potential it offers in our identified markets. 
 
   As always, thank you for your support. 
 
   Anthony Sanders 
 
   Interim Chief Executive Officer and Chairman 
 
   21 February 2018 
 
   Consolidated statement of comprehensive income for the year ended 30 
September 2017 
 
 
 
 
                                                            2017         2016 
                                                             GBP          GBP 
 
Revenue                                                       24,640       37,255 
 
Cost of sales                                                (1,964)     (13,856) 
 
Gross profit                                                  22,676       23,399 
 
Other operating income                                             -        1,738 

Realised gain on disposal                                          1            - 
Administrative expenses                                  (2,261,107)  (1,790,794) 
 
                                                         (2,261,106)  (1,789,056) 
 
Loss from operations                                     (2,238,430)  (1,765,657) 
 
 
Net finance expense                                          (2,961)      (2,104) 
 
Loss before taxation                                     (2,241,391)  (1,767,761) 
 
Taxation charge                                                    -       96,245 
 
  Loss from continuing operations                        (2,241,391)  (1,671,516) 
 
  (Loss) / profit from discontinuing operations net 
  of tax                                                    (16,133)        4,246 
 
Total comprehensive loss for the year                    (2,257,524)  (1,667,270) 
 
Attributable to owners of the parent                     (2,257,524)  (1,667,270) 
 
Basic and diluted loss per share (pence)                      (0.20)       (0.25) 
 
 
   Consolidated statement of financial position at 30 September 2017 
 
 
 
 
                                                 2017          2016 
                                                 GBP           GBP 
 
Non-current assets 
Intangible assets                                       1             1 
                                                        1             1 
Current assets 
Trade and other receivables                        77,137       187,836 
Cash and cash equivalents                         749,972       128,462 
                                                  827,109       316,298 
 
Current liabilities 
Trade and other payables                      (1,179,967)   (1,201,928) 
Interest bearing loans                          (293,027)     (134,027) 
                                              (1,472,994)   (1,335,955) 
 
 
Net (liabilities)                               (645,884)   (1,019,656) 
 
Capital and reserves attributable to 
 owners of the Company 
Share capital                                   1,778,768       783,998 
Share premium account                          17,954,376    15,073,350 
Shares to be issued                                     -        63,081 
Share reserve                                 (1,250,000)             - 
Merger reserve                                 11,119,585    11,119,585 
Capital redemption reserve                      2,732,904     2,732,904 
Retained losses                              (32,981,517)  (30,792,574) 
Total Equity                                    (645,884)   (1,019,656) 
 
 
   Consolidated statement of cash flows for the year ended 30 September 
2017 
 
 
 
 
Cash flow from operating activities                      2017         2016 
                                                          GBP          GBP 
 
Loss for the year                                     (2,257,524)  (1,667,270) 
Adjustments for: 
Amortisation of intangible assets                               -       18,913 
Net bank and other interest charges                         2,961        2,104 
Services settled by the issue of shares                    45,326       45,799 
Issue of share options and warrants charge                 68,581      883,878 
 
Net cash outflow before changes in working capital    (2,140,656)    (716,576) 
 
Decrease / (Increase) in trade and other receivables      110,700    (124,358) 
(Decrease) in trade and other payables                   (20,793)    (572,523) 
 
Cash outflow from operations                          (2,050,749)  (1,413,457) 
 
Interest received                                              14           19 
Interest paid                                             (1,475)        (623) 
 
Net cash flows from operating activities              (2,052,210)  (1,414,061) 
 
 
Financing activities 
Issue of ordinary share capital                         2,516,220    1,424,028 
Repayment of loan                                       (155,000)     (65,000) 
New loans raised                                          312,500       91,000 
 
Net cash flows from financing activities                2,673,720    1,450,028 
 
 
Net increase in cash                                      621,510       35,967 
Cash and cash equivalents at beginning of year            128,462       92,495 
 
Cash and cash equivalents at end of year                  749,972      128,462 
 
 
   Consolidated statement of changes in equity for the year ended 30 
September 2017 
 
 
 
 
                         Share        Share      Shares to      Other         Retained         Total 
                        Capital      Premium     be issued     Reserves       Earnings         Equity 
                          GBP          GBP          GBP          GBP            GBP             GBP 
Balance at 30 Sept 
2015                     592,086     13,395,669    502,848     13,852,489    (30,049,182)    (1,706,090) 
 
  Loss for the year         -            -            -            -         (1,667,270)     (1,667,270) 
Cash received in 
advance of share 
issue                       -            -          63,081         -              -            63,081 
Contingent 
consideration 
written off                 -            -         (40,000)        -            40,000            - 
Shares issued             191,912     1,677,681   (462,848)             -               -      1,406,745 
Share options                   -             -           -             -         883,878        883,878 
Balance at 30 Sept 
2016                      783,998    15,073,350      63,081    13,852,489    (30,792,574)    (1,019,656) 
 
  Loss for the year             -             -           -             -     (2,257,524)    (2,257,524) 
Shares issued             994,770     2,881,026    (63,081)   (1,250,000)               -      2,562,715 
Share options                   -             -           -             -          68,581         68,581 
Balance at 30 Sept 
 2017                   1,778,768    17,954,376           -    12,602,489    (32,981,517)      (645,884) 
 
 
   Notes to the financial information 
 
 
   1. Basis of preparation 
 
 
 
   Milestone Group Plc is a company registered and resident in England and 
Wales. The financial information set out in this announcement does not 
constitute the Group's statutory accounts, as defined in Section 435 of 
the Companies Act 2006, for the years ended 30 September 2017 or 30 
September 2016, but is derived from the 2017 Annual Report. Statutory 
accounts for 2016 have been delivered to the Registrar of Companies and 
those of 2017 will be delivered in due course. The consolidated 
statement of comprehensive income, consolidated statement of financial 
position, consolidated cash flow, consolidated statement of changes in 
equity (above) and associated notes are extracts from the financial 
statements and do not constitute the Group's statutory accounts. 
Statutory accounts for the year to 30 September 2016 and 30 September 
2017 have been reported on by the Independent Auditors. The Group 
financial statements have been prepared and approved by the Directors in 
accordance with International Financial Reporting Standards as adopted 
by the EU ("EU Adopted IFRSs"). The Independent Auditor's Report on the 
Annual Report and Financial Statements for 2016 and for 2017 was 
unqualified, but did draw attention to matters by way of emphasis 
relating to the basis of preparation, which is reproduced below and was 
substantively similar for both years. In forming the Auditor's opinion 
on the financial statements, which is not modified, the Auditor's have 
considered the adequacy of the disclosure made in note 1 to the 
financial statements concerning the Group's ability to continue as a 
going concern. "The going concern status of the Group is dependent upon 
the management of the timing of settlement of its liabilities and the 
raising of further funds in the immediate to short term and thereafter 
on the forecast profitability of new strategic partnerships and joint 
ventures which have recently commenced and for which the degree of 
success cannot yet be reliably demonstrated. Forecasts prepared by 
management indicate that if they are unable to manage the Group's 
liabilities as planned or the external fundraising does not occur in the 
immediate term and, subsequently, the future projects do not prove as 
profitable as forecast the Group would have an immediate requirement to 
seek alternative sources of funding. As stated in note 1, these 
conditions indicate that a material uncertainty exists which casts 
significant doubt on the Group's ability to continue as a going 
concern." The basis of preparation is reproduced below. 
   Going Concern 
 
   The Group's business activities, together with the factors likely to 
affect its future development, performance and position are set out in 
the Chairman's statement and below. The financial position of the Group, 
its cash flows, liquidity position and borrowing facilities are 
described in the financial statements. In addition, note 16 to the 
financial statements includes the Group's objectives, policies and 
processes for managing its capital; its financial risk management 
objectives; details of its financial instruments; and exposures to 
credit risk and liquidity risk. The net liability position as at 30 
September 2017, being the Group's financial year-end, was GBP645,884 
(2016: GBP1,019,656). Subsequent to the reporting date, the Board has 
been able to agree funding in the form of further share issues raising 
GBP150,000 in cash through the exercising of certain warrants. The 
funding received to date will go part way to cover year-end liabilities, 
and the Company will be dependent upon future funding and revenues to 
meet the remaining obligations, as discussed below. The Company 
continues to be reliant upon its continuing ability to manage the timing 
of settlement both of its current liabilities and future liabilities as 
they arise. There is also a need for successful on-going equity 

fundraises and / or loans in the immediate to short term thereafter, 
while sales plans and projections come into effect, especially in 
relation to revenues generated from new strategic partnerships and joint 
ventures. The Board has prepared forecasts to reflect the revenues 
expected to be generated by the Group and partnerships. The Company is 
fully focused on ensuring that sales plans are followed to ensure that 
the business becomes self-sustaining in the near future. The Directors 
have concluded that the need to generate future funds from further 
fundraising and from trading activities to satisfy the settlement of its 
on-going and future liabilities represents a material uncertainty, which 
may cast significant doubt upon the Group's and the Company's ability to 
continue as a going concern. Nevertheless, after making enquiries and 
considering this uncertainty and the measures that can be taken to 
mitigate the uncertainty, the Directors have a reasonable expectation 
that the Group and the Company will have adequate resources to continue 
in existence for the foreseeable future. For these reasons they continue 
to adopt the going concern basis in preparing the annual report and 
accounts. The financial statements do not include any adjustments that 
would result if the Group and Company was unable to continue as a going 
concern. 
   2. Loss per share 
 
   The calculation of the basic loss per share is based on the loss 
attributable to ordinary shareholders divided by the weighted average 
number of shares in issue during the year. The calculation of diluted 
loss per share is based on the basic loss per share, adjusted to allow 
for the issue of shares and the post tax effect of dividends and 
interest, on the assumed conversion of all other dilutive options and 
other potential ordinary shares. There were 163,213,116 share options 
and 248,431,460 share warrants outstanding at the year-end (2016: 
174,189,116 and 110,931,460). However, the figures for 2017 and 2016 
have not been adjusted to reflect conversion of these share options, as 
the effects would be anti-dilutive. 
 
 
                                            2017                              2016 
                              Weighted                           Weighted 
                                            Per                               Per 
                               average     share                  average    share 
                  Loss        number of    amount     Loss       number of   amount 
                   GBP         shares      Pence       GBP        shares     Pence 
Basic and 
 diluted loss 
 per share 
 attributable 
 to 
 shareholders  (2,257,524)  1,115,347,198  (0.20)  (1,667,270)  653,810,277  (0.25) 
 
 
 
 
   3.             Posting of Accounts 
 
   The Report and Accounts of Milestone Group Plc, including the Notice of 
Annual General Meeting will be posted to shareholders shortly. A further 
announcement will be made by the Company at such time. 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Milestone Group PLC via Globenewswire 
 
 
  http://www.milestonegroup.co.uk/ 
 

(END) Dow Jones Newswires

February 22, 2018 02:00 ET (07:00 GMT)

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