Independent Media Support Group PLC
29 September 2006
For immediate release
29 September 2006
INDEPENDENT MEDIA SUPPORT GROUP Plc
('IMS')
Interim results for the six months ended 30 June 2006
Executive Chairman's Statement
Introduction
IMS is the only quoted business in the UK offering media access services to
broadcasters, film and DVD distributors, advertisers and their agencies. The
Group offers a wide range of services incorporating pre-recorded and real-time
subtitling, translation, audio description, signing and voice-overs.
Financial results
Group turnover for the period was £3.014 million (2005: £3.258 million), with
gross profit of £1.424 million (2005: £1.52 million). Operating profit before
amortisation of goodwill was £280,000, broadly in line with the comparable
period last year.
Profit on ordinary activities before taxation and goodwill amortisation was
£270,000, a slight increase over the same period last year.
The Group has continued to demonstrate its ability to generate cash, improving
its net cash funds position from December 2005 by £105,000 to £325,000.
The directors do not recommend the payment of a dividend at the interim stage.
Market and Business development
We note that the vast majority of broadcasters to whom Ofcom's Code on
Television Access applies are now either meeting or exceeding their quotas for
Subtitling, Signing and Audio Description. IMS's clients, in particular, have
all demonstrated a commendable dedication to providing all of their viewers the
best possible user experience.
It is also noticeable that many other media providers are now taking media
accessibility very seriously, in particular theatrical movie distributors.
Recently, IMS launched on its website the world's first microsite, built for a
major distributor, which provides trailers of their best films accompanied by
subtitles and audio description.
Current trading & Outlook
As we outlined in our preliminary results in March and explained further in July
this year, IMS had been approached to review its pricing by one of its major
customers in 2005 and that a three year contract has now been signed. Whilst we
were obviously delighted at the continuation of this long-term relationship, we
also noted that the newly agreed prices were substantially lower and that the
Group would likely be loss-making in the second half of this year. The Group is
likely, therefore, to report a small loss before tax for the full year from its
trading activities, which will be further increased by the costs incurred, and
to be incurred, in relation to the possible offer for the Group. The Group's
trading continues broadly in line with expectations.
The major cost review announced at the time of our preliminary 2005 results is
now complete, and its results are now being felt, but inevitably we will need to
continue to focus on the Group's costs going forward in light of our current
trading position.
Update on possible offer discussions
As has previously been announced, the Group has been approached by myself with
regard to making a possible offer for the Group. Discussions on this subject are
ongoing and, as and when there is any updated information in this respect,
shareholders will duly be informed.
Finally, I would thank my colleagues and all our employees for their dedication
and contribution during this difficult period of trading.
S.M.Sheridan OBE
Executive Chairman
Independent Media Support Group Plc
Consolidated Profit and Loss Account
For the six months ended 30 June 2006
Unaudited six months to 30 June Audited Unaudited
2006
Notes Profit Goodwill Total Year Six months to
before amortisation ended 31 30 June 2005
goodwill December
amortisation 2005
£000s £000s £000s £000s £000s
Turnover 3,014 - 3,014 6,425 3,258
Cost of sales (1,590) - (1,590) (3,543) (1,738)
Gross profit 1,424 - 1,424 2,882 1,520
Administrative expenses before (1,144) - (1,144) (2,598) (1,233)
goodwill amortisation
Goodwill amortisation - (119) (119) (237) (119)
Operating profit 280 (119) 161 47 168
Interest receivable 13 - 13 39 19
Interest payable (23) - (23) (69) (39)
Disposal of associate investment - - - (2) -
Share of associate's net losses - - - - (2)
Profit on ordinary activities 270 (119) 151 15 146
before taxation
Taxation on profit on ordinary 2 (80) - (80) (82) (82)
activities
Profit/(loss) retained for the 7 190 (119) 71 (67) 64
period
Earnings per 2.5p ordinary share
(pence per share)
Basic 4 0.27p (0.26)p 0.25p
Diluted 4 0.26p (0.24)p 0.23p
Adjusted earnings before goodwill
amortisation
Basic 4 0.73p 0.65p 0.70p
Diluted 4 0.71p 0.61p 0.65p
Note:
All amounts relate to continuing activity.
Independent Media Support Group Plc
Consolidated Balance Sheet
As at 30 June 2006
Unaudited Audited Unaudited
Notes 30 June 31 December 30 June
2006 2005 2005
£000s £000s £000s
Fixed assets
Intangible assets 4,139 4,258 4,376
Tangible assets 525 575 285
Investments - - -
4,664 4,833 4,661
Current assets
Debtors 1,546 1,480 1,671
Cash at bank and in hand 6 825 732 1,023
2,371 2,212 2,694
Creditors: amounts falling due within (1,277) (1,192) (1,303)
one year
Net current assets 1,094 1,020 1,391
Total assets less current liabilities 5,758 5,853 6,052
Creditors: amounts falling due after (250) (250) (500)
more than one year
Provisions for liabilities and charges (16) (182) -
Net assets 5,492 5,421 5,552
Share capital and reserves
Share capital 7 652 652 652
Share premium account 7 4,741 4,741 4,741
Profit and loss account 7 99 28 159
Equity shareholders' funds 5,492 5,421 5,552
Independent Media Support Group Plc
Consolidated Cash Flow Statement
For the six months ended 30 June 2006
Unaudited Audited Unaudited
Notes six months year ended six months
to 30 June 31 to 30 June
December
2006 2005 2005
£000s £000s £000s
Net cash inflow from operating activities 5 156 690 203
Return on investments and servicing of finance
Interest received 13 39 1
Interest paid (23) (69) (36)
Net cash outflow from returns on investment and
servicing of finance (10) (30) (35)
Taxation - (168) (3)
Capital expenditure and financial investment
Purchase of tangible fixed assets (41) (414) (37)
Net cash inflow/(outlow) before use of liquid 105 (414) 128
resources and financing
Financing
Repayment of bank loan - (250) -
Capital element of finance lease payments - (9) (6)
Net cash outflow from financing - (259) (6)
Increase/(decrease) in cash in the period 6 105 (181) 122
Independent Media Support Group Plc
Notes to the interim results
For the six months ended 30 June 2006
1 Basis of preparation
The interim results for the six months ended 30 June 2006 have been prepared using
accounting policies consistent with those set out in the Group's financial statements for
the period ended 31 December 2005. The financial information contained in these interim
statements does not constitute statutory accounts within the meaning of section 240 of the
Companies Act 1985.
The financial information for the period ended 31 December 2005 is an extract from the
statutory financial statements for that period, which have been delivered to the Registrar
of Companies. The auditors' report on those accounts was unqualified and did not contain
any statement under section 237 of the Companies Act 1985.
The interim results for the six months ended 30 June 2006, which are unaudited, were
approved by the Board on 28th September 2006.
2 Taxation
The taxation charge is based upon United Kingdom taxable profits for the period at the
anticipated effective rate for the year ending 31 December 2006.
3 Dividends
The directors do not recommend the payment of a dividend.
4 Earnings per 2.5p ordinary share (pence per share)
Unaudited Audited Unaudited
six months Year to six months
to 31 December to
30 June 2005 30 June
2006 2005
£000s £000s £000s
Profit for the period 71 (67) 64
Goodwill amortisation 119 237 119
Adjusted profit for the period 190 170 183
000s 000s 000s
Weighted average number of shares 26,087 26,087 26,087
Diluted weighted average number of shares 26,819 27,891 28,002
Pence Pence Pence
Basic earnings per share 0.27 (0.26) 0.25
Diluted earnings per share 0.26 (0.24) 0.23
Adjusted basic earnings per share before goodwill 0.73 0.65 0.70
amortisation
Adjusted diluted earnings per share before goodwill 0.71 0.61 0.65
amortisation
5 Reconciliation of operating profit to operating cash inflow
Unaudited Audited Unaudited
six months year ended six months
to 31 December to
30 June 2005 30 June
2006 £000s 2005
£000s £000s
Operating profit 161 47 168
Depreciation of tangible assets 91 158 71
Amortisation of goodwill 119 237 119
(Increase) in debtors due within one year (66) (55) (229)
Increase in creditors due within one year 17 138 74
(Decrease)/increase in provisions for liabilities and (166) 165 -
charges
Net cash inflow from operating activities 156 690 203
6 Analysis of movement in net funds
Audited Unaudited
31 Unaudited 30 June
December
2005 Cash flow 2006
£000s £000s £000s
Cash at bank and in hand 732 93 825
Bank overdraft (12) 12 -
Net cash balances 720 105 825
Debt:
Debt falling due within one year (250) - (250)
(250) - (250)
Debt:
Debt falling due after one year (250) - (250)
Net funds 220 105 325
7 Share capital, reserves and shareholders funds
Ordinary Share Profit and Shareholders
share capital premium loss Funds
account Account
£000s £000s £000s £'000s
At 31 December 2005 - audited 652 4,741 28 5,421
Profit for the period - - 71 71
At 30 June 2006 - unaudited 652 4,741 99 5,492
8 Interim report
Copies of this interim report are being sent to all shareholders and are
also available from the Company Secretary, Independent Media Support Group
Plc, 10 Carlisle Street, London W1D 3BR.
DIRECTORS & ADVISORS
Directors
Sylvia Sheridan OBE Executive Chairman
Mark Robinson Managing Director
John Reiss Non-Executive Director
Company Secretary Jock Rumgay ACA
Registered & Head Office 10 Carlisle Street
London, W1D 3BR
Principal Advisers
Nominated Advisor & Broker Beaumont Cornish Ltd
10-12 Copthall Avenue
London, EC2R 7DE
Auditors to the Company HLB Vantis Audit plc
82 St John Street
London, EC1M 4JN
Principal Bankers Bank of Scotland
Corporate Banking
St James's Gate
14-16 Cockspur Street
London, SW1Y 5BL
Registrar Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent, BR3 4TU
Company Registered Number 04936428
www.ims-media.com
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