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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Netb2B2 | LSE:NEB | London | Ordinary Share | GB00B064S128 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.375 | 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:0562U Net b2b2 PLC 30 March 2007 30 March 2007 Netb2b2 plc Interim results for the six months ended 31 December 2006 Netb2b2 plc ("Netb2b2" or "the Group"), the digital communications business, today announces its interim results for the six months ended 31 December 2006. Financial and business highlights: *Turnover increased by 1.3% to #3.2 million (2005: #3.1 million) *Group operating loss of #168,000 (2005: loss of #134,000) *Group loss after tax of #186,000 (2005: loss of #140,000) *Loss per share of 3.07p (2005: loss of 2.48p) *Cash on group balance sheet #270,000 (2005: #390,000) *New client contracts wins including from ITN *Commenced implementation of a Group cost saving programme Keith Young, Chairman of Netb2b2, commented: "The next six months and beyond will see Netb2b2 continue to implement structural changes and the reduction of administrative overheads. We would also seek to divest non-core operations where growth possibilities are less visible, and once further changes have been achieved, to also rename the Group. As a board we are looking forward to returning the business to a much sounder footing, and to ensure that shareholders, staff and customers are all able to benefit from these major reforms." Enquiries, please contact: Andrew Gannon Neil Boom Managing Director Gresham PR Ltd. Netb2b2 PLC 020 7404 9000 020 7689 8800 Azhic Basirov Smith & Williamson 020 7131 4000 Chairman's statement In the first six months to 31 December 2006, the Group began to implement a number of substantial reforms that resulted from last year's root and branch Strategic Review. As shareholders are aware from last year's annual report, the board has repositioned the business to focus more strongly on certain fast-growth niches in the digital media and entertainment market. Strategically, our goal is to extract more value from established relationships with blue chip clients that include ITV, BBC, ITN and Sky as well as to continue to broaden our customer base through more effective sales and marketing. We are still exploring bolt-on, small scale acquisitions, but only ones that would be immediately earnings enhancing. We are pleased that there has been some encouraging progress within the Group, in particular from Fernhart New Media and BlueSky. As we go forward, we are confident that we have the products and services that are at the forefront of digital media. However, as these interim results indicate, there is clearly more work to be done, including a need to deliver greater cost synergies than have been achieved in the six months under review. Savings have been difficult to achieve against a backdrop facing all companies that serve the digital market place, which is a severe technical skills shortage, particularly in central London where most of our businesses operate. The shortage of skilled new media personnel has produced sharply rising labour costs and some turnover in staff. This is now being addressed by the Group by an increased reliance on more flexible consultants. As well as concentrating on improving profit margins by sharing more overheads, the board has recognised a particular need to improve the quality and output of our sales and marketing functions. Accordingly, we are intending to recruit skilled sales and marketing staff who will work at Group level and represent the entire portfolio of client products and services. To support the restructuring strategy, the executive directors will be taking more direct operational responsibility. The directors' focus will be very much on top and bottom line growth, supporting the core businesses in their efforts and in reducing fixed costs where there is unnecessary duplication. Financial and operational review We are disappointed that restructuring measures taken earlier have yet to translate into an improved financial performance. Consequently, Group turnover has improved only fractionally, up by 1.3% to #3.2 million (2005: #3.1m) while problems with one major project led to a slightly larger half year loss after tax of #168,000 compared with an interim loss of #134,000 in 2005. These problems are likely to continue to depress profitability over the next few months. In view of the losses sustained, cash flow has been tight and has been managed by selective deferral of creditors. We intend to accelerate cost savings and to increase turnover through more efficient sales and marketing. Due to the contract problem referred to above we are reporting a loss per share of 3.07p (2005: loss of 2.48p). We are pleased that the performances of Fernhart New Media and BlueSky have continued to justify our confidence in these growing businesses. Of particular note was Fernhart's creation of new online services for ITN using the recently-launched Microsoft Vista platform. Something very pleasing about this project is that we can demonstrate Group synergies, because BlueSky were also contracted to host the services and video content. Our largest Group company cScape had a chequered six months, encountering a major problem on one project. Steps have been taken to minimise the impact of this problem, and to address the balance of its workforce, with a decision to increase flexibility through the use of more freelance programming and IT staff. Fortunately, despite this setback, cScape continued to win other major mandates including a significant new Web design contract to redevelop the website for Hed Kandi, part of the Ministry of Sound music group. This contract was something of a technical milestone, making cScape the first new media company to implement Microsoft's new Office SharePoint Server 2007TM. We believe the significance of this contract is over and above its contract value. cScape are holders of Microsoft Gold Certified Partner status; going forward we intend the Group to benefit more from this accreditation. Outlook The next six months and beyond will see Netb2b2 continue to implement structural changes and the reduction of administrative overheads. We would also seek to divest non-core operations where growth possibilities are less visible, and once further changes have been achieved, to also rename the Group. As a board we are looking forward to returning the business to a much sounder footing, and to ensure that shareholders, staff and customers are all able to benefit from these major reforms. Keith Young Chairman of Netb2b2 30 March 2007 GROUP PROFIT AND LOSS ACCOUNT Six months ended 31 December 2006 Note Six Months Six Months Year Ended Ended Ended 31.12.2006 31.12.2005 30.06.2006 Unaudited Unaudited Audited #000's #000's #000's TURNOVER 3 3,194 3,154 6,590 Cost of sales (870) (730) (1,614) GROSS PROFIT 2,324 2,424 4,976 -------- -------- -------- Administrative expenses pre exceptional item (2,492) (2,418) (5,134) Exceptional Item - (140) (20) -------- -------- -------- Administrative expenses (2,492) (2,558) (5,154) OPERATING PROFIT/(LOSS) -------- -------- -------- Pre exceptional item (168) 6 (158) Exceptional item - (140) (20) -------- -------- -------- Total operating loss 3 (168) (134) (178) Interest receivable and similar income 1 - 1 Interest payable and similar (19) (6) (27) charges LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (186) (140) (204) Non-operating exceptional item - - (112) Tax on loss on ordinary 5 - - - activities LOSS FOR THE FINANCIAL PERIOD (186) (140) (316) LOSS PER SHARE (PENCE) 6 (3.07p) (2.48p) (5.4p) GROUP BALANCE SHHET 31 December 2006 Six Months Six Months Year Ended Ended Ended 31.12.2006 31.12.2005 30.06.06 Unaudited Unaudited Audited #000's #000's #000's FIXED ASSETS Intangible assets 2,436 2,436 2,438 Tangible assets 563 549 570 ----- ----- ----- 2,999 2,985 3,008 CURRENT ASSETS Stocks 175 112 141 Debtors 1,439 1,328 1,398 Cash at bank 270 390 121 ----- ----- ----- 1,884 1,830 1,660 CREDITORS: amounts falling due within one year Bank loans and overdraft (169) (125) (141) Trade and other creditors (2,664) (2,413) (2,264) ------- ------- ------- (2,833) (2,538) (2,405) NET CURRENT LIABILITIES (949) (708) (745) ------- ------- ------- CREDITORS: amounts falling due (84) - (112) After one year ------- ------- ------ TOTAL ASSETS LESS LIABILITIES 1,966 2,277 2,151 ======= ====== ===== CAPITAL AND RESERVES Called up share capital 606 596 606 Share premium 553 513 553 Capital redemption reserve 6 6 6 Profit and loss account 801 1,162 986 ----- ----- ----- EQUITY SHAREHOLDERS' FUNDS 1,966 2,277 2,151 ===== ===== ===== GROUP CASH FLOW STATEMENT Six months ended 31 December 2006 Note Six Months Six Months Year Ended Ended Ended 31.12.2006 31.12.2005 30.06.2006 Unaudited Unaudited Audited #000's #000's #000's Net cash inflow/(outflow) from operating activities 7 196 119 (296) Returns on investments and servicing of finance 8 (18) (8) (26) Taxation - - - Capital expenditure 8 (72) (170) (139) Acquisitions 8 - (551) (200) Net cash inflow/(outflow) before financing 106 (610) (661) Financing 8 15 574 340 ------ ------ ----- Increase/(decrease) in cash in the period 121 (36) (321) ====== ======= ====== Reconciliation of net cash flow to movement in net funds Increase/(decrease) in cash in the period 9 121 (36) 321 (Increase) in debt and lease financing 9 (19) (186) (476) ----- ------ ------ Movement in net funds in the 9 102 (222) (797) period Net debt at start of period 9 (529) 268 268 ------ ----- ----- Net funds/(debt) at end of 9 (427) 46 (529) period ====== ===== ====== NOTES TO THE ACCOUNTS Six months ended 31 December 2006 1. FINANCIAL INFORMATION The financial information is for the six months ended 31 December 2006 and is neither audited nor reviewed as defined by APB Bulletin 1999/4. The balance sheet and profit and loss account do not constitute statutory statements within the meaning of section 240 Companies Act 1985. The results for the year ended 30 June 2006 have been extracted from the financial statements of the group on which an unqualified report from the auditors has been received and which have been filed with the registrar of Companies. 2. BASIS OF PREPERATION The interim financial information has been prepared on the basis of the accounting policies adopted for the audited accounts for the year ended 30 June 2006 under the historical cost convention and in accordance with applicable accounting standards. 3. SEGMENTAL INFORMATION The Group operates in the UK and the whole of its turnover and profit relate to continuing activities and to the UK market. Six months Six months Year Ended Ended Ended 31.12.2006 31.12.2005 30.06.2006 Unaudited Unaudited Audited #000's #000's #000's Turnover Internet services 1,619 1,707 3,464 Publishing and Digital Communication Services 843 874 1,945 Specialist Hosting 403 341 668 --- --- --- Media and interactive technology 329 232 503 Central Costs - - 10 ------ ------ ----- Group 3,194 3,154 6,590 ------ ------ ----- Profit/(loss) before interest and tax Internet services 34 142 235 Publishing and Digital Communication Services (4) 33 46 Specialist Hosting 86 64 151 Media and interactive technology 10 30 (16) Central and other costs (294) (263) (574) Exceptional costs - (140) (20) ----- ------ ----- Group (168) (134) (178) ----- ------ ----- 4. GOODWILL The board has assessed each subsidiary with reference to its durability, ability to sustain future long term profitability and assessed ability to maintain market position. Based on this assessment the board is of the opinion that the three goodwill elements have indefinite economic lives. The board has carried out impairment reviews on these goodwill elements and have concluded that their current recoverable amounts are in excess of their carrying values. 5. TAXATION No liability to UK Corporation tax arose on ordinary activities for the period owing to trade losses brought forward from previous periods. 6. LOSS PER ORDINARY SHARE Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of ordinary shares during the year. The diluted loss per share is the same as the actual loss per share. Six Months Six Months Year Ended Ended Ended 31.12.2006 31.12.2005 30.06.2006 Unaudited Unaudited Audited #000's #000's #000's Basic earnings attributable to ordinary shareholders: (186) (140) (316) Weighted average number of ordinary shares 6,061,569 5,644,999 5,846,909 Loss per share: (3.07p) (2.48p) (5.4p) 7. RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES Six Months Six Months Year Ended Ended ended 31.12.2006 31.12.2005 30.06.2006 Unaudited Unaudited Audited #000's #000's #000's Operating loss (168) (134) (178) Exceptional item - - (112) Depreciation charges 86 38 147 Loss on disposal/write off of intangible fixed assets - - 74 Increase in stocks (33) (14) (43) Increase in debtors (41) (95) (71) Increase/(decrease) in creditors 352 324 (113) ---- ---- ----- Net cash inflow/ (outflow) from operating activities 196 119 (296) ==== ===== ===== 8. ANALYSIS OF CASH FLOWS Six Months Six Months Year Ended Ended Ended 31.12.2006 31.12.2005 30.06.2006 Unaudited Unaudited Audited #000's #000's #000's Returns on investments and servicing of finance Interest received 1 - 1 Interest paid (12) (6) (15) Interest element of hire purchase payments (7) (2) (12) ---- ---- ----- Net cash outflow for returns on investments and servicing of finance (18) (8) (26) ===== ==== ==== Capital expenditure Sale of tangible fixed assets - - 5 Purchase of tangible fixed assets (72) (170) (144) ----- ----- ----- Net cash outflow for capital expenditure (72) (170) (139) ===== ===== ===== Acquisitions Purchase of subsidiary undertaking - (551) (172) Bank overdraft acquired with subsidiary undertaking - - (28) ----- ----- ----- Net cash outflow for acquisitions - (551) (200) ===== ====== ====== Financing Issue of ordinary share capital - 386 61 Bank loans (invoice discounting) 43 - 333 Capital element of hire purchase payments (28) 188 (54) ------ ----- ---- Net cash inflow from financing 15 574 340 ====== ===== ==== 9. ANALYSIS OF CHANGES IN NET (DEBT)/ FUNDS At 1 July 2006 Cash flow At 31 December 2006 Net cash: #000's #000's #000's Cash at bank and in hand 121 149 270 Bank overdrafts (141) (28) (169) ------- ------ ------- (20) 121 101 ======= ====== ======= Debt: Bank Loan (invoice discounting) (333) (43) (376) Hire purchase agreements (176) 24 (151) ------ ---- ----- Total (529) 102 (427) ====== ==== ===== At 31 December At 31 December At 1 July 2006 2005 2006 #000's #000's #000's Analysed in balance sheet Cash at bank and in hand 270 390 121 Bank overdrafts & loans (536) (125) (461) Bank overdrafts & loans due after 1 year (9) - (13) Hire purchase payments due within 1 year (77) (219) (77) Hire purchase payments due after 1 year (75) - (99) ----- ----- ---- (427) 46 (529) ====== ===== ===== 10. COPIES OF THE INTERIM REPORT Copies of the interim report are available from www.netb2b2.com or the company secretary at Netb2b2 Plc, Central House, 142 Central Street, London, EC1V 8AR. This information is provided by RNS The company news service from the London Stock Exchange END IR KGGFFNGVGNZG
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