RNS Number : 6562E
Independent Media Support Group PLC
30 September 2008
For immediate release
30 September 2008
Independent Media Support Group PLC
('IMS' or the 'Company')
Unaudited results for the six months ended 30 June 2008
The Board of IMS today announces its interim results for the 6 months ended 30 June 2008.
Summary:
Financial Results
-
Turnover £2,942,000 2007: £2,794,000
Highlights
Contacts:
IMS Tel: 020 7440 5400
John Reiss, Chairman
Mark Robinson, Managing Director
Beaumont Cornish Limited Tel: 020 7628 3396
Michael Cornish
CHAIRMAN'S STATEMENT
|
|
|
|
|
|
SUMMARY OF RESULTS
|
|
|
|
|
|
Six Months to
30 June 2008
£’000
|
Six Months to
30 June 2007
£’000
|
Year to 31
December 2007
£’000
|
|
|
|
|
|
|
Turnover
|
2,942
|
2,794
|
5,593
|
|
Profit/(loss) before Tax
|
(178)
|
86
|
(129)
|
|
Profit/(loss) after Tax
|
(178)
|
67
|
(121)
|
|
|
|
|
|
|
Earnings per Share (pence)
|
|
|
|
|
Basic
|
(0.68)
|
0.26
|
(0.46)
|
|
Diluted
|
(0.68)
|
0.25
|
(0.46)
|
OPERATING REPORT
The first half of 2008 has seen a continuation of the positive results achieved towards the latter end of 2007. The investment made in the sales team has led to significant gains across a number of areas in the business - in particular in work undertaken for the international market. The contract with the Swiss state broadcaster won earlier this year continues with the supply of French deaf and hard of hearing subtitles now alongside the German and Italian subtitles already being supplied. Further volumes for 2009 are now being agreed. IMS Scandinavia, launched in January of this year, has expanded its client base with commissions from DVD producers and tests being carried out with a number of local broadcasters. As well as increasing our presence in the international market we have continued to consolidate our position in the UK with the confirmation of 2009 work from Paramount Comedy Channel among the successes.
The introduction of services for online content has become an integral part of the group offering. A number of clients such as Kent TV, the NHS and the Equality and Human Rights Commission have utilised IMS' services on a regular basis throughout the year.
IMS' Welsh subsidiary Trosol has provided a wide variety of document translation projects for government agencies and corporate clients. A number of tenders have been submitted and we await the results of these. Most recently an ongoing relationship with the Skills for Care and Development Agency has resulted in two projects of 50,000 and 90,000 words respectively. The Welsh subtitling department has seen positive results the most recent of which is an order for 43 programmes. Regular subtitling work has been commissioned from ITV Cymru, S4C and the Health and Safety Executive.
Against this encouraging background of growth, however, IMS's oldest product line, the subtitling of UK commercials, has seen a decline in 2008, with the recent entry of two new competitors into the market.
The development of services for the web has now been fully implemented and we continue to identify further areas where we can add value to our clients' material. Captioning for the Apple iphone and itouch has been tested and proved successful. The use of technology to improve productivity remains a key objective. The trial of a new production method has proven successful with the technology rolled out and results look extremely promising.
Turnover, at £2.942m, is 5% higher than both in the same period last year and the second half of 2007. This increase has largely been driven by contracts for broadcast subtitling won late in 2007, and the increase in work for the international market. Mitigating against these revenue streams, however, has been reductions in work from advertisers for the subtitling of commercials. Because of this change in sales mix, but also as a result of the increased investment in the sales function, gross profit has declined by £87,000 from the same period last year.
Administrative expenses have increased by £179,000 over the same period in 2007. In addition to the increased costs of board remuneration, and legal costs relating to board changes, included in this additional spend is the first six months' establishment cost of the Group's new subsidiary IMS Scandinavia.
FINANCE AND CASH FLOW
Net cash outflow for the period was £284,000 and net cash borrowings at the end of the period were £217,000, within the bank facilities available of £300,000.
CURRENT TRADING AND THE FUTURE
Following the changes in board composition, there was a substantial reduction in monthly salary costs. The reduction in these costs after May has provided an element of stability to the Company, with the Group's unaudited management accounts for July and August showing a loss of £16,000 over the two month period.
As the Group moves forward, there are some potential risks from legal costs and from the risks of a particular client failing to pay a significant debt, both of which are detailed more fully in the notes to these accounts. Additionally, the Group's largest contract for broadcast subtitling expires in June 2009 and the senior management will need to focus on renewing this contract over the coming months.
However, the Group has seen encouraging signs of growth already and, in addition to ongoing efforts to build on the Group's success in the European market, the Board is hoping to see further growth in income from existing UK broadcast subtitling contracts as Ofcom quotas continue to grow. In particular, output under the largest of the Group's contracts is expected to show growth of approximately 10% in the twelve months to June 2009 compared with the same period to June 2008.
The Directors believe that the Company can have a sound trading future. The Directors further believe that with some modest investment it could have a bright future. The Board consider that the Company would benefit from an increase in debt facilities and from an injection of further capital through an issue of shares.
BOARD COMPOSITION
The Company announced on 5 June 2008 that the directorships of Sylvia Sheridan and Melvyn Angell had been terminated. On 8 September 2008 Sylvia Sheridan repaid £58,000 owed to the Company by her. Sylvia Sheridan has to date retained an interest in over 75% of the Company's issued share capital and, notwithstanding the Board changes of 5 June 2008, it is possible for her to exercise her voting power to replace the Board which has limited the options available to the current Board for the development and funding of the Group. The current Board has nevertheless made extensive efforts to explore potential solutions to address this situation over the last four months consistent with the tight regulatory and other constraints under which it must operate.
On 25 September 2008 the Company received a formal notice that Sylvia Sheridan required ordinary resolutions to be put to the 2008 Annual General Meeting making certain Board changes. An announcement regarding the notice was made on 26 September 2008 and a copy of the notice will be sent to shareholders with notice of the Annual General Meeting of the Company.
The current Board would support any development that improves the prospects of the Company and is for the benefit of shareholders as a whole.
John Reiss
Chairman
30 September 2008
INDEPENDENT MEDIA SUPPORT GROUP PLC
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2008
|
|
|
Six months to
|
Six months to
|
Year to 31
|
|
|
|
30 June 2008
|
30 June 2007
|
December 2007
|
|
|
|
unaudited
|
unaudited
|
audited
|
|
|
Note
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
Revenue
|
2
|
2,942
|
2,794
|
5,593
|
|
|
|
|
|
|
|
Cost of sales
|
|
(1,982)
|
(1,747)
|
(3,555)
|
|
|
|
-------------
|
-------------
|
-------------
|
|
GROSS PROFIT
|
|
960
|
1,047
|
2,038
|
|
|
|
|
|
|
|
Administrative expenses
|
|
(1,140)
|
(961)
|
(2,173)
|
|
|
|
-------------
|
-------------
|
-------------
|
|
OPERATING (LOSS)/PROFIT
|
3
|
(180)
|
86
|
(135)
|
|
|
|
|
|
|
|
Investment revenue
|
|
5
|
9
|
17
|
|
Finance costs
|
|
(3)
|
(9)
|
(11)
|
|
|
|
-------------
|
-------------
|
-------------
|
|
(LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
|
|
(178)
|
86
|
(129)
|
|
|
|
|
|
|
|
Tax (charge)/credit
|
|
-
|
(19)
|
8
|
|
|
|
-------------
|
-------------
|
-------------
|
|
(LOSS)/PROFIT ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY FOR THE PERIOD
|
|
(178)
|
67
|
(121)
|
|
|
|
======
|
======
|
======
|
|
|
|
|
|
|
|
(LOSS)/EARNINGS PER 2.5p
ORDINARY SHARE
|
|
|
|
|
|
|
|
|
|
|
|
BASIC
|
4
|
(0.68)p
|
0.26p
|
(0.46)p
|
|
|
|
======
|
======
|
======
|
|
DILUTED
|
4
|
(0.68)p
|
0.25p
|
(0.46)p
|
|
|
|
======
|
======
|
======
|
|
All of the activities of the group are classed as continuing.
|
INDEPENDENT MEDIA SUPPORT GROUP PLC
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2008
|
|
At 30 June
|
At 30 June
|
At 31
|
|
|
2008
|
2007
|
December 2007
|
|
|
unaudited
|
unaudited
|
audited
|
|
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
Non-current assets
|
|
|
|
|
Property, plant and equipment
|
347
|
407
|
386
|
|
Intangible assets
|
3,000
|
3,000
|
3,000
|
|
|
-------------
|
-------------
|
------------
|
|
Total non-current assets
|
3,347
|
3,407
|
3,386
|
|
|
-------------
|
-------------
|
------------
|
|
Current assets
|
|
|
|
|
Trade and other receivables
|
1,428
|
1,386
|
1,330
|
|
Cash and cash equivalents
|
81
|
389
|
181
|
|
|
-------------
|
-------------
|
------------
|
|
Total current assets
|
1,509
|
1,775
|
1,511
|
|
|
-------------
|
-------------
|
------------
|
|
Total assets
|
4,856
|
5,182
|
4,897
|
|
|
======
|
======
|
======
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
Capital and reserves
|
|
|
|
|
Called up share capital
|
652
|
652
|
652
|
|
Share premium account
|
4,741
|
4,741
|
4,741
|
|
Share option reserve
|
34
|
60
|
34
|
|
Retained earnings
|
(1,638)
|
(1,272)
|
(1,460)
|
|
|
-------------
|
-------------
|
------------
|
|
Total equity
|
3,789
|
4,181
|
3,967
|
|
|
-------------
|
-------------
|
------------
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
Finance lease obligations
|
15
|
-
|
4
|
|
Deferred tax liabilities
|
-
|
3
|
-
|
|
|
-------------
|
-------------
|
------------
|
|
Total non-current liabilities
|
15
|
3
|
4
|
|
|
-------------
|
-------------
|
------------
|
|
Current liabilities
|
|
|
|
|
Trade and other payables
|
732
|
717
|
804
|
|
Borrowings
|
298
|
250
|
114
|
|
Finance lease obligations
|
22
|
-
|
8
|
|
Current tax liabilities
|
-
|
31
|
-
|
|
|
-------------
|
-------------
|
------------
|
|
Total current liabilities
|
1,052
|
998
|
926
|
|
|
-------------
|
-------------
|
------------
|
|
Total liabilities
|
1,067
|
1,001
|
930
|
|
|
-------------
|
-------------
|
------------
|
|
Total equity and liabilities
|
4,856
|
5,182
|
4,897
|
|
|
======
|
======
|
======
|
INDEPENDENT MEDIA SUPPORT GROUP PLC
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2008
|
|
Share Capital
|
Share Premium Account
|
Share Option Reserve
|
Retained Earnings
|
Total
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
Balance at 31 December 2006 (audited)
|
652
|
4,741
|
66
|
(1,339)
|
4,120
|
|
Profit for the period
|
-
|
-
|
-
|
67
|
67
|
|
Employee share option credit
|
-
|
-
|
(6)
|
-
|
(6)
|
|
|
--------------
|
--------------
|
--------------
|
---------------
|
---------------
|
|
Balance at 30 June 2007 (unaudited)
|
652
|
4,741
|
60
|
(1,272)
|
4,181
|
|
Loss for the period
|
-
|
-
|
-
|
(188)
|
(188)
|
|
Employee share option credit
|
-
|
-
|
(26)
|
-
|
(26)
|
|
|
--------------
|
--------------
|
--------------
|
---------------
|
---------------
|
|
Balance at 31 December 2007 (audited)
|
652
|
4,741
|
34
|
(1,460)
|
3,967
|
|
Loss for the period
|
-
|
-
|
-
|
(178)
|
(178)
|
|
|
--------------
|
--------------
|
--------------
|
---------------
|
---------------
|
|
Balance at 30 June 2008 (unaudited)
|
652
|
4,741
|
34
|
(1,638)
|
3,789
|
|
|
======
|
======
|
======
|
======
|
======
|
INDEPENDENT MEDIA SUPPORT GROUP PLC
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2008
|
|
Six months to
|
Six months to
|
Year to 31
|
|
|
30 June 2008
|
30 June 2007
|
December 2007
|
|
|
unaudited
|
unaudited
|
audited
|
|
|
£'000
|
£'000
|
£'000
|
|
Cash flows from operating activities
|
|
|
|
|
(Loss)/profit for the period
|
(178)
|
67
|
(121)
|
|
Adjustments for:
|
|
|
|
|
Tax charge/(credit)
|
-
|
19
|
(8)
|
|
Interest income
|
(5)
|
(9)
|
(17)
|
|
Finance cost
|
3
|
9
|
11
|
|
Depreciation and amortisation
|
74
|
74
|
142
|
|
Share option credit
|
-
|
(6)
|
(32)
|
|
|
--------------
|
--------------
|
---------------
|
|
|
(106)
|
154
|
(25)
|
|
Movements in working capital
|
|
|
|
|
(Increase)/decrease in trade and other receivables
|
(98)
|
139
|
209
|
|
Decrease in trade and other payables
|
(72)
|
(163)
|
(59)
|
|
|
--------------
|
--------------
|
---------------
|
|
Cash generated from/(used in) operations
|
(276)
|
130
|
125
|
|
Interest paid
|
(3)
|
(9)
|
(11)
|
|
Tax paid
|
-
|
-
|
(22)
|
|
|
--------------
|
--------------
|
---------------
|
|
Net cash from/(used in) operating activities
|
(279)
|
121
|
92
|
|
|
--------------
|
--------------
|
---------------
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Purchases of property, plant and equipment
|
(35)
|
(33)
|
(56)
|
|
Interest received
|
5
|
9
|
17
|
|
|
--------------
|
--------------
|
---------------
|
|
Net cash used in investing activities
|
(30)
|
(24)
|
(39)
|
|
|
--------------
|
--------------
|
---------------
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Repayment of capital element of finance leases
|
(13)
|
(13)
|
(11)
|
|
Capital element of finance leases received
|
38
|
30
|
-
|
|
Repayment of borrowings
|
-
|
-
|
(250)
|
|
|
--------------
|
--------------
|
---------------
|
|
Net cash from/(used in) financing activities
|
25
|
17
|
(261)
|
|
|
--------------
|
--------------
|
---------------
|
|
|
|
|
|
|
Net (decrease)/increase in cash and cash equivalents
|
(284)
|
114
|
(208)
|
|
Cash and cash equivalents at beginning of period
|
67
|
275
|
275
|
|
|
--------------
|
--------------
|
---------------
|
|
Cash and cash equivalents at the end of the period
|
(217)
|
389
|
67
|
|
|
=======
|
=======
|
=======
|
INDEPENDENT MEDIA SUPPORT GROUP PLC
NOTES TO THE INTERIM REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2008
|
1.
|
BASIS OF PREPARATION
|
|
|
|
|
|
|
|
The unaudited financial statements have been prepared using accounting policies consistent with International Financial Reporting Standards. The unaudited financial statements are presented in Sterling and have been prepared under the historical cost basis.
The same accounting policies, presentation and methods of computation are followed in these unaudited financial statements as were applied in the preparation of the Group's financial statements for the year ended 31 December 2007 and as are expected to be applicable for the year ending 31 December 2008.
The information set out in this unaudited interim report for the six months ended 30 June 2008 does not comprise statutory accounts within the meaning of section 240 of The Companies Act 1985. The statutory accounts for the year ended 31 December 2007, incorporating an unqualified auditors' report, have been filed with the Registrar of Companies.
The results for the six months ended 30 June 2008 were approved by the Board on 30 September 2008.
|
|
|
|
|
2.
|
BUSINESS SEGMENT ANALYSIS
|
|
|
|
Six months to
|
Six months to
|
Year to 31
|
|
|
|
30 June 2008
unaudited
|
30 June 2007
unaudited
|
December 2007 audited
|
|
|
|
£'000
|
£'000
|
£'000
|
|
|
Revenue
|
|
|
|
|
|
Media access services
|
2,546
|
2,388
|
4,784
|
|
|
Document translation and interpreting
|
396
|
406
|
809
|
|
|
|
----------
|
----------
|
----------
|
|
|
Total
|
2,942
|
2,794
|
5,593
|
|
|
|
======
|
======
|
======
|
|
|
Segment operating profit
|
|
|
|
|
|
Media access services
|
796
|
891
|
1,726
|
|
|
Document translation and interpreting
|
164
|
156
|
312
|
|
|
|
----------
|
----------
|
----------
|
|
|
|
960
|
1,047
|
2,038
|
|
|
Unallocated expenses
|
(1,140)
|
(961)
|
(2,173)
|
|
|
|
----------
|
----------
|
----------
|
|
|
Operating (loss)/profit
|
(180)
|
86
|
(135)
|
|
|
Investment revenue
|
5
|
9
|
17
|
|
|
Finance costs
|
(3)
|
(9)
|
(11)
|
|
|
|
----------
|
----------
|
----------
|
|
|
(Loss)/profit before taxation
|
(178)
|
86
|
(129)
|
|
|
Taxation
|
-
|
(19)
|
8
|
|
|
|
----------
|
----------
|
----------
|
|
|
(Loss)/profit for the period from continuing operations
|
(178)
|
67
|
(121)
|
|
|
|
======
|
======
|
======
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INDEPENDENT MEDIA SUPPORT GROUP PLC
NOTES TO THE INTERIM REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2008
|
3.
|
OPERATING LOSS
|
|
|
|
|
|
|
|
|
|
|
|
The operating loss on ordinary activities is stated after crediting the following item:
On 3rd September 2008, £58,655.10, the amount owed to the Group by the former Chairman, Sylvia Sheridan, was repaid. This amount has been credited to the Income Statement for this interim period, having been previously provided for in full.
(The amount of £89,000 owed by Melvyn Angell, the Group's former Chief Executive, has not been repaid, and remains provided for in full.)
|
|
|
|
|
4.
|
EARNINGS/(LOSS) PER SHARE
|
|
|
|
|
|
|
|
|
|
|
|
The calculation of the (loss)/earnings per share is based on the following (loss)/profit and number of shares:
|
|
|
|
|
|
|
|
|
|
Six months to
30 June 2008
unaudited
|
Six months to
30 June 2007
unaudited
|
Year to 31 December 2007
audited
|
|
|
|
|
|
|
|
|
(Loss)/earnings for the period (£'000)
|
(178)
|
67
|
(121)
|
|
|
|
=======
|
=======
|
=======
|
|
|
Weighted average number of shares (000s)
|
26,087
|
26,087
|
26,087
|
|
|
Dilutive potential ordinary shares:
|
|
|
|
|
|
Share options (000s)
|
-
|
302
|
-
|
|
|
|
---------------
|
---------------
|
---------------------
|
|
|
Diluted weighted average number of shares (000s)
|
26,087
|
26,389
|
26,087
|
|
|
|
=======
|
=======
|
=======
|
|
|
|
|
|
|
|
|
|
Basic
|
Diluted
|
Basic
|
Diluted
|
Basic
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
Earnings/(loss) per share
|
(0.68)p
|
(0.68)p
|
0.26p
|
0.25p
|
(0.46)p
|
(0.46)p
|
|
|
|
======
|
======
|
======
|
======
|
======
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======
|
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INDEPENDENT MEDIA SUPPORT GROUP PLC
NOTES TO THE INTERIM REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2008
|
5.
|
CONTINGENCIES AND COMMITMENTS
|
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Ofcom Update
As has previously been reported, IMS had submitted a formal complaint to Ofcom relating to an agreement for Red Bee (formerly BBC Broadcast) to provide media access services to Channel 4, alleging that the agreement was in breach of competition law. In May 2007, Ofcom concluded that the Channel 4 contract does not appreciably restrict competition and there are therefore no grounds for action. In respect of the BBC contract, in light of a reduction in the duration of the contract (from approximately 10 ½ years to 7 ½ years), and in light of other priorities, no further resources were to be committed to this issue and the case closed.
In August 2007 IMS subsequently appealed to the Competition Appeals Tribunal (CAT) against Ofcom's decision. The BBC and Red Bee were both granted applications to intervene in the appeal. In October 2007 the CAT concluded that the BBC case closure decision was not an appealable decision and therefore did not fall under its jurisdiction. In May 2008 the CAT dismissed the appeal in relation to the Channel 4 contract.
In June 2008 IMS sought leave from the CAT to appeal against its decision, which the CAT refused. In August 2008, IMS applied directly to the Court of Appeal for permission to appeal and is awaiting the Court's decision.
In the interim, Ofcom, Red Bee and the BBC have submitted claims for costs to the CAT against IMS. In the case of Ofcom, the claim totals £93,000. Ofcom is seeking to recover the entirety of these costs. Red Bee and the BBC claim their costs, as interveners, totalled £213,000 and £36,000 respectively. Red Bee has argued an award of between 30-50% of its costs would be 'proportionate and reasonable'. The BBC has not suggested a percentage.
In respect of Ofcom's claims for costs, the Group's solicitors have written to the CAT, which will rule on the award, arguing that the costs should be reduced from the current claim level, not least because an appeal is pending. IMS is therefore not in a position to estimate, with any reasonable certainty, what, if any, costs might be awarded against it. Accordingly, no provision has been made in these interim accounts in this respect.
In respect of the cost claims from the interveners, IMS has been advised by its solicitors that there is no comparable precedent for interveners being awarded costs in these circumstances and therefore believes that it is unlikely any liability exists. Therefore, no provision has been made in these interim accounts in respect of these costs.
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6.
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POST BALANCE SHEET EVENTS
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In late August 2008, the Group was informed by one of its clients that it is suffering from cashflow difficulties. IMS had, over July and August 2008, completed and invoiced a series of large translation projects for this client with a value of £132,000 incl. VAT. The client has provided a repayment schedule that would see this debt fall to £57,000 by the year-end, with the remainder paid by March 2009. The client in question has recently paid £15,000 as per its proposal and, as at the date of this report, IMS is owed £117,000 incl. VAT. At 30 June 2008, £81,000 was recorded as a current asset in respect of these projects and no provision has been made.
In the light of current economic circumstances, the Directors note, in common with many other companies, that the Group is dependent upon the continued financial stability of its principal clients and customers.
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7.
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OTHER
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A Copy of this announcement is available from the Company's website, being www.ims-media.com
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This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SDLSASSASELU