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Press Release

1 September 2009

Pilat Media Global PLC

('Pilat Media', the 'Group' or the 'Company')

Results for the six months ended 30 June 2009

Pilat Media Global plc (AIM:PGB), the London-based supplier of business management software to the media industry around the world, today announces its results for the six months ended 30 June 2009 ('H1') and the three months to 30 June 2009 ('the Quarter' or 'Q2').  

Summary:

●	Revenues:
	●	Q2 - £4.23 million (Q2 2008 £3.92 million), up by 7.9%
	●	H1 - £8.33 million (H1 2008: £8.18 million), up by 1.8%
●	Operating profit/loss, before exchange rate movement, amortisation and impairment of intangible assets:
	●	Q2 – profit £66,612 (Q2 2008: loss £826,513)
	●	H1 – loss £103,890 (H1 2008: loss £888,457)
●	Loss for the period, for Q2 and H1 2009 mainly due to $/£ appreciation:
	●	Q2 - £618,818 (Q2 2008: 594,628)
	●	H1 - £1,242,194 (H1 2008: loss £587,917)
●	Further channel/station go-lives at key clients
●	Increased demand from existing clients and improved pipeline of new sales opportunities expected to make 2009 profitable
●	Positive cash flow and no debt

 

Commenting on the results, Michael Rosenberg, Chairman of Pilat Media Global plc, said:  

 'Despite difficult trading conditions caused by the economic downturn, revenues for the quarter and half year exceed those for the previous year. The changes we made to our cost structure are also having an impact and if it was not for the significant appreciation of sterling over the last few months and the impact of hedging we would have been profitable for the quarter and close to breakeven for the half year. We expect revenues and profits to follow a similar pattern to previous years with a higher proportion of revenue in the second half of the year and almost all of the year's profit in the last quarter. The Company is progressing well with its key projects and recurring revenues from existing contracts remain at a high level. We are debt free and cash generative, a trend which is likely to continue for the remaining part of this year. The pipeline of new business opportunities has strengthened and we are hopeful that one or two of these will convert this year. All these give us confidence for the future as the world economy improves.'

For further information:

Pilat Media Global plc
Avi Engel, Chief Executive Officer Martin Blair, Chief Financial Officer	Tel: +44 (0) 20 8782 0700
aengel@pilatmedia.com	www.pilatmedia.com

Shore Capital (Nominated Adviser)
Dru Danford	Tel: +44 (0) 20 7408 4090
dru.danford@shorecap.co.uk	www.shorecap.co.uk

Media enquiries: 

Abchurch
Heather Salmond / Chris Lane	Tel: +44 (0) 20 7398 7700
chris.lane@abchurch-group.com	www.abchurch-group.com

  Chairman and CEO's Statement

Pilat Media Global plc is pleased to announce its results for the six months ended 30 June 2009.  

Operationally, the Company generated the planned revenues at the budgeted cost. Revenues for the three and the six months to June 2009 were higher and operating costs were lower than in the equivalent periods last year, generating positive cash-flow during Q2. However, due to unpredictable devaluation of its currency balances, resulting from the weakening US and Canadian dollar against sterling this year, there were significant exchange rate related loses as further explained below. Excluding these exchange rate losses, the amortisation of intangibles and the exceptional professional fees incurred as a result of the failed offer for the Company by Sintec Media Ltd (£140,000) there would be a small six monthly operating profit of £36,000 (H1 2008 loss £888,000) and three monthly operating profit of £67,000 (Q2 2008 loss £827,000) in the periods to 30 June 2009, respectively.

Since 1st April 2009 we have achieved good progress with several strategic projects. Fox went live with five further stations as part of the planned rollout and CTV took two further channels live. Work on the three new contracts signed in Q1 is progressing to plan and this includes the major US out-of-home advertising company which we hope will pave the way into a new market for IBMS. There was also a 5 year license renewal with a major Australasian client and license expansions by two US clients.  

After a slow start to the year the sales pipeline has significantly improved and one of the prospects has already commissioned us to undertake a paid for analysis study intended to scope the full implementation of IBMS for this potential new client which will hopefully lead to a signed contract later this year.  Although, in recent weeks we have seen signs of business recovery in our sector, we have taken further cost containment measures and have also shifted more delivery capacity towards chargeable tasks to increase productivity. This will enable us to meet the higher demand for services we see coming from existing clients without increasing costs. 

 Results

Q2 revenues of £4,230,000 (Q2 2008: £3,922,000) were 7.9% higher than the equivalent quarter in 2008, and were in line with our expectations.  These Q2 revenues included £2,475,000 (Q2 2008: £2,698,000) for implementation services (customisation, integration, training and consulting fees), £589,000 (Q2 2008: £330,000) for the proportion of IBMS licences recognised during the Quarter and £1,166,000 (Q2 2008: £894,000) of recurring maintenance and support fees from 'live' clients.  

Gross profit in Q2 was £2,151,000 (Q2 2008: £1,640,000), which represents a margin of 50.9% compared to 41.8% in the equivalent period last year.  The margins in Q2 and H1 this year remain in line with those achieved for the twelve months of 2008.  

As a result of the reductions in staffing levels made last year and a slowdown in recruitment this year, costs in general are lower than the equivalent period last year and in particular the gross margin has improved as the Company has become more efficient.

The Company continues to focus efforts on research and development in response to customer and market needs but at a reduced quarterly level of £648,000 (Q2 2008: £870,000) as development resources were diverted towards the end of the quarter to deliver customer specific requirements and generate revenues in preparation for higher level of client activity in the months to come.

Sales and marketing costs in Q2 2009 at £448,000 (Q2 2008: £451,000) were in line with the previous year. The Company continued to be involved in a number of sales demonstrations resulting from the increased pipeline of opportunities it faced and its participation in April in the world's largest trade show in Las Vegas.  

 

The lower general and administrative costs in Q2 2009 at £990,000 (Q2 2008: £1,146,000) reflect the impact of reduced staffing and additional cost savings that have been made. In addition the general and administrative costs in Q2 2008 included a one-off charge for back dated rent of £75,000.

In the quarter and the six months to June 2009 sterling appreciated significantly against the US Dollar (15.9% in the three and 9.7% in the six months) and the Canadian Dollar (6.7% in the three and 5.9% in the six months). As a result of restating the currency balances (mainly receivables, cash and accounts payables) into sterling at these new rates there was an exchange loss of £1.43 million and £1.40 million in the three and six months to June 30 2009, respectively. These losses have been offset by gains resulting from the restatement of the hedging instruments that the company undertook to minimise the impact of exchange rate (£1.16 million and £1.19 million in the three and six months to June 30 2009, respectively).  However, the company suffered a loss on those hedging instruments that matured in the period as the hedged exchange rate was worse than the actual rate (£0.26 million and £0.65 million in the three and six months to June 30 2009, respectively). 

Overall, the net effect of exchange rate movement was a loss of £528,000 (Q2 2008 £146,000 profit) in the three months and £867,000 (H2 2008 £302,000 profit) in the six months to 30 June 2009.  The Company will continue to look at ways it can minimise the impact of exchange rate movements but if the volatility in exchange rates continues then inevitably the results of the company will be impacted.

The amortisation for Q2 2009 was £280,535 (Q2 2008 £79,268), including an additional £200,000 for the amortisation of the technology upgrade that was completed in Q3 last year.

The increased revenues in the quarter and the lower operating costs excluding the exchange rate movements and amortisation of intangible assets gave rise to an operating profit of £67,000 compared to an operating loss of £827,000 in Q2 2008.  After exchange rate related losses and amortization the quarterly loss in the period was £619,000 (Q2 2008 £595,000).

Statement of Financial Position

There was no further capitalisation of development costs in Q2 2009 and amortisation of intangibles has increased from Q2 2008 as a result of the completion of the development work on the technology upgrade in Q3 2008.

At June 30 2009 the Company had current assets of £14 million with current liabilities of only £3.3 million.  Total receivables (trade and other) were down from £15.2m at the end of 2008 to £13.2m as cash collection from the larger clients improved and key milestones were met triggering invoicing and recovery of the accrued income balances.  Trade receivables at the end of the quarter included £1.7 million due from one slow paying customer in the United States. Since the quarter end £200,000 has been collected and we expect more payments in the coming 2-3 months.

The liability for derivative financial instruments fell compared to the value at 31 December 2008 as a result of the expiry of some hedges and a strengthening of sterling compared to the 2008 year end position.  

Cash flow

As a result of the reductions in operating expenses and the reduction in receivables through invoicing and collection, the cash position has shown a steady improvement from the 2008 year end and Q1 position.

Outlook

We expect to continue to make good progress on achieving the milestones that will ultimately trigger further payments from the long term contracts as well as meeting the requirements of the new contracts that have been signed recently. Together with the reduction in operating costs, this will continue to lead to positive cash flows. 

The increased demand we now see coming from existing clients can enable us to match, if not to exceed last year's revenues without any new contracts. The sales pipeline has improved and includes a number of interesting opportunities, one or two of which we hope to covert in the near future. At the reduced cost base we have now established, only a small contribution from such new contracts is needed this year to enable us to show an annual profit through a strong last quarter, as the case was in previous years. As more clients take the upgraded .Net based IBMS Version 6, our position as a leading provider in our market is further cemented and our efficiency in operating the new technology improves. We believe that all this make us well placed to benefit when the market recovers. 

Michael Rosenberg Chairman 31 August 2009

Avi Engel Chief Executive Officer 31 August 2009

 

  CONSOLIDATED INCOME STATEMENT

	Note	Unaudited 6 months to  30 June	Unaudited 6 months to  30 June	Unaudited 3 months to 30 June	Unaudited 3 months to 30 June	Audited Year ended 31 December
		2009	2008	2009	2008	2008
		£	£	£	£	£
REVENUE	4	8,333,258	8,177,387	4,230,142	3,922,299	17,830,884
Cost of sales		(4,186,908)	(4,915,597)	(2,078,801)	(2,281,825)	(9,162,092)
GROSS PROFIT		4,146,350	3,261,790	2,151,341	1,640,474	8,668,792
Other operating expenses:
Research and development		(1,398,386)	(1,464,874)	(647,569)	(870,284)	(2,974,049)
Selling and marketing		(808,078)	(773,740)	(447,628)	(450,947)	(1,656,084)
General and administrative		(2,043,776)	(1,911,633)	(989,532)	(1,145,756)	(4,220,356)
Exchange rate movement		(1,404,024)	52,341	(1,429,545)	107,692	1,583,111
Operating (loss)/profit before amortisation and impairment of intangible assets		(1,507,914)	(836,116)	(1,362,933)	(718,821)	1,401,414
Amortisation of intangible assets		(561,070)	(158,538)	(280,535)	(79,268)	(666,510)
Impairment of intangible assets		-	-	-	-	(691,119)
LOSS FROM OPERATIONS		(2,068,984)	(994,654)	(1,643,468)	(798,089)	43,785
Fair value adjustment - financial instruments		1,185,525	227,961	1,162,105	27,654	(2,011,431)
Foreign exchange (loss) / gain on hedging instruments		(648,616)	21,513	(260,670)	10,768	(290,259)
Finance Income		5,372	25,522	2,619	7,345	50,854
Finance costs		(28,992)	(48,964)	(10,431)	(25,769)	(149,048)
(LOSS) BEFORE TAX		(1,555,695)	(768,622)	(749,845)	(778,091)	(2,356,099)
Income tax credit		313,501	180,705	131,027	183,463	606,516
LOSS FOR THE PERIOD ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY		(1,242,194)	(587,917)	(618,818)	(594,628)	(1,749,583)
LOSS  PER SHARE
Basic	3	(2.69p)	(0.99p)	(1.64p)	(1.00p)	(2.95p)
Diluted	3	(2.69p)	(0.99p)	(1.64p)	(1.00p)	(2.95p)

Note:  The (loss) / profit from operations for the period arises from the Group's continuing operations

  CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

		Unaudited 6 months to  30 June	Unaudited 6 months to  30 June	Unaudited 3 months to 30 June	Unaudited 3 months to 30 June	Audited Year ended 31 December
		2009	2008	2009	2008	2008
		£	£	£	£	£
LOSS FOR THE PERIOD		(1,242,194)	(587,917)	(618,818)	(594,628)	(1,749,583)
OTHER COMPREHENSIVE INCOME:
Gains / (losses) recognised directly to equity:
Fair value movements on cash flow hedges		1,309,705	67,095	1,083,705	(112,374)	(1,563,553)
Exchange translation differences on foreign operations		(58,431)	30,023	(65,249)	9,593	283,413
Deferred tax on fair value movements on cash flow hedges		(362,363)	(18,785)	(308,855)	31,465	437,794
Other comprehensive income for the period, net of tax		888,911	(78,333)	709,599	(71,316)	(842,346)
TOTAL COMPREHENSIVE (LOSS) / INCOME FOR THE PERIOD ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY		(353,283)	(509,584)	90,781	(665,944)	(2,591,929)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
	Share Capital	Share Premium Account	Capital  Redemption  Reserve	Merger Reserve	Share Option Reserve	Other Reserve	Cumulative Translation  Reserve	Cash Flow Hedge Reserve	Retained Earnings	Total
	£	£	£	£	£	£	£	£	£	£
Attributable to equity holders of the company:
Balance at 1 January 2009	2,960,517	9,046,892	50,000	(853,955)	960,483	3,108,000	400,063	(2,181,000)	2,203,143	15,694,143
Loss after tax									(1,242,194)	(1,242,194)
Fair value movements on cash flow hedges	-	-	-	-	-	-	-	1,309,705	-	1,309,705
Exchange translation differences on foreign operations	-	-	-	-	-	-	(58,431)	-	-	(58,431)
Deferred tax on fair value movements on cash flow hedges	-	-	-	-	-	-	-	-	(362,363)	(362,363)
Total comprehensive income for the period	-	-	-	-	-	-	(58,431)	1,309,705	(1,604,557)	(353,283)
Share option charge for the period	-	-	-	-	1,815	-	-	-	-	1,815
Total changes in equity	-	-	-	-	1,815	-	(58,431)	1,309,705	(1,604,557)	(351,468)
Balance at 30 June 2009	2,960,517	9,046,892	50,000	(853,955)	962,298	3,108,000	341,632	(871,295)	598,586	15,342,675

. 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
	Share Capital	Share Premium Account	Capital  Redemption  Reserve	Merger Reserve	Share Option Reserve	Other Reserve	Cumulative Translation  Reserve	Cash Flow Hedge Reserve	Retained Earnings	Total
	£	£	£	£	£	£	£	£	£	£
Attributable to equity holders of the company:
Balance at 1 April 2009	2,960,517	9,046,892	50,000	(853,955)	961,392	3,108,000	406,881	(1,955,000)	1,526,259	15,250,986
Loss after tax									(618,818)	(618,818)
Fair value movements on cash flow hedges	-	-	-	-	-	-	-	1,083,705	-	1,083,705
Exchange translation differences on foreign operations	-	-	-	-	-	-	(65,249)	-	-	(65,249)
Deferred tax on fair value movements on cash flow hedges	-	-	-	-	-	-	-	-	(308,855)	(308,855)
Total comprehensive income for the period	-	-	-	-	-	-	(65,249)	1,083,705	(927,673)	90,783
Share option charge for the period	-	-	-	-	906	-	-	-	-	906
Total changes in equity	-	-	-	-	906	-	(65,249)	1,083,705	(927,673)	91,689
Balance at 30 June 2009	2,960,517	9,046,892	50,000	(853,955)	962,298	3,108,000	341,632	(871,295)	598,586	15,342,675

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (AUDITED)
	Share Capital	Share Premium Account	Capital Redemption Reserve	Merger Reserve	Share Option Reserve	Other Reserve	Cumulative Translation Reserve	Cash Flow Hedge Reserve	Retained Earnings	Total
	£	£	£	£	£	£	£	£	£	£
Attributable to equity holders of the company:
Balance at 1 January 2008	2,960,117	9,045,412	50,000	(853,955)	639,916	3,108,000	116,650	(444,562)	3,772,042	18,393,620
Loss after tax	-	-	-	-	-	-	-	-	(1,749,583)	(1,749,583)
Fair value movements on cash flow hedges	-	-	-	-	-	-	-	(1,563,553)		(1,563,553)
Exchange translation differences on foreign operations	-	-	-	-	-	-	283,413	-		283,413
Deferred tax on fair value movements on cash flow hedges	-	-	-	-	-	-	-	-	437,794	437,794
Total comprehensive income for the period	-	-	-	-	-	-	283,413	(1,563,553)	(1,311,789)	(2,591,929)
Current tax adjustment re share options	-	-	-	-	-	-	-	-	250	250
Deferred tax movement	-	-	-	-	-	-	-	-	(145,664)	(145,664)
Re-categorisation of deferred tax	-	-	-	-	445,639	-	-	(172,885)	(272,754)	-
Transfer on share options lapsed					(161,058)				161,058	-
Share option charge for the period	-	-	-	-	35,986	-	-	-	-	35,986
Proceeds of issue of shares	400	1,480	-	-	-	-	-	-	-	1,880
Total changes in equity	400	1,480	-	-	320,567	-	283,413	(1,736,438)	(1,568,899)	(2,699,477)
Balance at 31 December 2008	2,960,517	9,046,892	50,000	(853,955)	960,483	3,108,000	400,063	(2,181,000)	2,203,143	15,694,143
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
	Share Capital	Share Premium Account	Capital Redemption Reserve	Merger Reserve	Share Option Reserve	Other Reserve	Cumulative Translation Reserve	Cash Flow Hedge Reserve	Retained Earnings	Total
	£	£	£	£	£	£	£	£	£	£
Attributable to equity holders of the company:
Balance at 1 January 2008	2,960,117	9,045,412	50,000	(853,955)	639,916	3,108,000	116,650	(444,562)	3,772,042	18,393,620
Loss after tax	-	-	-	-	-	-	-	-	(587,917)	(587,917)
Fair value movements on cash flow hedges	-	-	-	-	-	-	-	67,095		67,095
Exchange translation differences on foreign operations	-	-	-	-	-	-	30,023	-		30,023
Deferred tax on fair value movements on cash flow hedges	-	-	-	-	-	-	-	-	(18,785)	(18,785)
Total comprehensive income for the period	-	-	-	-	-	-	30,023	67,095	(606,702)	(509,584)
Current tax adjustment re share options	-	-	-	-	-	-	-	-	-	-
Deferred tax movement	-	-	-	-	-	-	-	-	-	-
Re-categorisation of deferred tax	-	-	-	-	445,639	-	-	(172,885)	(272,754)	-
Transfer on share options lapsed									-	-
Share option charge for the period	-	-	-	-	31,441	-	-	-	-	31,441
Proceeds of issue of shares	400	1,480	-	-	-	-	-	-	-	1,880
Total changes in equity	400	1,480	-	-	477,080	-	30,023	(105,790)	(879,456)	(476,263)
Balance at 30 June 2008	2,960,517	9,046,892	50,000	(853,955)	1,116,996	3,108,000	146,673	(550,352)	2,892,586	17,917,357

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
	Share Capital	Share Premium Account	Capital Redemption Reserve	Merger Reserve	Share Option Reserve	Other Reserve	Cumulative Translation Reserve	Cash Flow Hedge Reserve	Retained Earnings	Total
	£	£	£	£	£	£	£	£	£	£
Attributable to equity holders of the company:
Balance at 1 April 2008	2,960,117	9,045,412	50,000	(853,955)	1,101,276	3,108,000	126,243	(729,821)	3,537,464	18,344,736
Loss after tax	-	-	-	-	-	-	-	-	(594,628)	(594,628)
Fair value movements on cash flow hedges	-	-	-	-	-	-	-	179,469		179,469
Exchange translation differences on foreign operations	-	-	-	-	-	-	20,430	-		20,430
Deferred tax on fair value movements on cash flow hedges	-	-	-	-	-	-	-	-	(50,250)	(50,250)
Total comprehensive income for the period	-	-	-	-	-	-	20,430	179,469	(644,878)	(444,979)
Current tax adjustment re share options	-	-	-	-	-	-	-	-	-	-
Deferred tax movement	-	-	-	-	-	-	-	-	-	-
Re-categorisation of deferred tax	-	-	-	-	-	-	-	-	-	-
Transfer on share options lapsed									-	-
Share option charge for the period	-	-	-	-	15,720	-	-	-	-	15,720
Proceeds of issue of shares	400	1,480	-	-	-	-	-	-	-	1,880
Total changes in equity	400	1,480	-	-	15,720	-	20,430	179,469	(644,878)	(427,379)
Balance at 30 June 2008	2,960,517	9,046,892	50,000	(853,955)	1,116,996	3,108,000	146,673	(550,352)	2,892,586	17,917,357

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		Unaudited 30 June	Unaudited 30 June	Audited   31 December
ASSETS	Note	2009 £	2008  £	2008 £
NON-CURRENT ASSETS
Intangible assets	6	6,543,486	8,303,647	7,104,556
Property, plant and equipment		597,407	781,298	739,578
		7,140,893	9,084,945	7,844,134
CURRENT ASSETS
Trade receivables	7	5,371,456	6,609,483	6,703,936
Other receivables	7	7,832,144	10,219,540	8,531,554
Taxation		222,939	237,350	337,525
Cash and cash equivalents		242,373	-	53,882
		13,688,912	17,066,372	15,626,897
TOTAL ASSETS		20,809,805	26,151,317	23,471,031
CAPITAL AND RESERVES
Called up share capital	9	2,960,517	2,960,517	2,960,517
Share premium account	9	9,046,892	9,046,892	9,046,892
Capital redemption reserve		50,000	50,000	50,000
Merger reserve		(853,955)	(853,955)	(853,955)
Share option reserve		962,298	1,116,996	960,483
Other reserve		3,108,000	3,108,000	3,108,000
Cumulative translation reserve		341,632	146,673	400,063
Cash flow hedge reserve		(871,295)	(550,352)	(2,181,000)
Retained earnings		598,586	2,892,586	2,203,143
CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY		15,342,675	17,917,357	15,694,143
LIABILITIES
NON-CURRENT LIABILITIES
Deferred taxation		115,340	1,021,599	102,365
Derivative financial instruments	8	2,040,328	665,514	4,535,557
		2,155,668	1,687,113	4,637,922
CURRENT LIABILITIES
Cash and cash equivalents		-	2,138,239	-
Trade and other payables		3,311,462	4,408,608	3,138,966
		3,311,462	6,546,847	3,138,966
TOTAL LIABILITIES		5,467,130	8,233,960	7,776,888
SHAREHOLDERS' EQUITY AND LIABILITIES		20,809,805	26,151,317	23,471,031

CONSOLIDATED STATEMENT OF CASH FLOWS

		Unaudited 6 months to  30 June	Unaudited 6 months to  30 June		Unaudited 3 months to  30 June		Unaudited 3 months to 30 June		Audited Year ended 31 December
	Notes	2009 £	2008 £		2009 £		2008 £		2008 £
Net cash inflow / (outflow) from operations	a	194,511	(1,589,579)		123,540		(1,096,025)		(67,847)
Income taxes (paid) / received		(85,974)	29,055		(72,846)		41,876		147,116
Interest paid		(28,992)	(48,964)		(10,431)		(25,769)		(149,048)
Interest received		5,372	25,522		2,619		7,345		50,854
Net cash from operating activities		84,917	(1,583,966)		42,882		(1,072,573)		(18,925)
Cash flow from investing activities	b	(53,759)	(1,352,215)		(898)		(584,186)		(1,525,377)
Cash flow from financing activities	c	-	1,880		-		1,880		1,880
Net change in cash and cash equivalents		31,158	(2,934,301)		41,984		(1,654,879)		(1,542,422)
Cash and cash equivalents at beginning of period		53,882	720,534		33,675		(533,448)		720,534
Exchange gains on cash and bank overdraft		157,333	75,528		166,714		50,088		875,770
Cash and cash equivalents at end of period		242,373	(2,138,239)		242,373		(2,138,239)		53,882

  

APPENDICES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS

		Unaudited 6 months  30 June	Unaudited 6 months 30 June	Unaudited 3 months 30 June	Unaudited 3 months 30 June	Audited Year ended 31 December
		2009 £	2008 £	2009 £	2008 £	2008 £
	Reconciliation of (loss)/profit before tax to net cash (outflow) / inflow from operating activities
a	(Loss) / Profit before tax	(1,555,695)	(768,622)	(749,845)	(778,091)	(2,356,099)
	Finance income	(5,372)	(25,522)	(2,619)	(7,345)	(50,854)
	Interest paid	28,992	48,964	10,431	25,769	149,048
	Depreciation and amortisation	726,898	347,492	360,500	175,522	1,072,797
	Impairment of intangible asset	-	-	-	-	691,119
	Share option expense	1,815	31,441	908	15,720	35,986
	(Gains)/Losses on derivative instruments	(1,185,525)	(227,961)	(1,162,105)	(27,654)	2,011,431
	Increase in trade and other receivables	2,232,450	(1,472,579)	1,854,751	(1,248,144)	(648,379)
	Increase/(Decrease) in trade and other payables	(49,052)	477,208	(188,481)	748,198	(972,896)
	Net cash inflow/(outflow) from operating activities	194,511	(1,589,579)	123,540	(1,096,025)	(67,847)
	Cash flow from investing activities
b	Purchase of property, plant and equipment	(53,759)	(398,539)	(898)	(158,069)	(571,702)
	Capitalised software development costs	-	(956,127)	-	(426,117)	(956,127)
	Sale of property, plant and equipment	-	2,451	-	-	2,452
	Net cash outflow from investing activities	(53,759)	(1,352,215)	(898)	(584,186)	(1,525,377)

	Cash flow from financing activities
C	Proceeds from the issue of share capital	-	-	-	-	1,880
	Net cash generated from financing activities	-	-	-	-	1,880

 

  1.   General Information

The Company is a limited liability company incorporated and domiciled in the United Kingdom. The address of its registered office is 19th Floor, Wembley Point, 1 Harrow Road, Wembley Point, London HA9 6DE. Copies of this statement are available from this address and from the Company's website www.pilatmedia.com.

The Company is quoted on the AIM (Alternative Investment Market) of the London Stock Exchange and is co-listed on the Tel Aviv Stock Exchange.

This condensed consolidated interim financial information was approved for issue on 31 August 2009.

2.   Basis of preparation

This condensed consolidated interim financial information for the six months ended 30 June 2009 has been prepared in accordance with IAS 34, 'interim financial reporting'. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2008, which have been prepared in accordance with International Financial Reporting Standards as adopted by the EU (IFRS).

Except as described below, the current and comparative periods to June have been prepared using accounting policies and practices consistent with those adopted in the annual financial statements for the year ended 31 December 2008 and are also consistent with those which will be adopted in the 2009 financial statements. Comparative figures for the year ended 31 December 2008 have been extracted from the statutory financial statements for that period which carried an unqualified audit report, contained an emphasis of matter relating to trade receivables as discussed in Note 7, did not contain a statement under section 237(2) or (3) of the Companies Act and have been delivered to the Registrar of Companies..

 The Financial Information contained in this Report does not constitute statutory accounts as defined by section 434 of the Companies Act 2006.

BASIS OF NEW AND REVISED STANDARDS

The following Standards and interpretations have been applied in these financial statements. 

 

IFRS 2	Share based Payment – Amendments relating to vesting conditions and cancellations (endorsed)
IFRS 8	Operating Segments (endorsed)
IAS 1	Presentation of Financial Statements – Revised (endorsed)
IAS 1	Presentation of Financial Statements – Amendments relating to Puttable Financial Instruments and obligations arising on liquidation (endorsed)
IAS 27	Consolidated and Separate Financial Statements
IAS 32	Financial Instruments Presentation – Amendments relating to Puttable Financial Instruments and obligations arising on liquidation (endorsed)
IAS 39	Embedded Derivatives
IFRIC 9	Embedded Derivatives
IFRIC 13	Customer Loyalty Programmes (endorsed)
IFRIC 15	Agreements for the construction of Real Estate Assets (endorsed)
IFRIC 16	Hedges of Net Investment in a Foreign Operation (endorsed)

The directors consider that the adoption of these Standards and Interpretations as appropriate has had no material impact on the financial statements of the Group, except relating to segment disclosures, as discussed in note 4.

3. Loss per share

Basic and diluted loss per share is based on the loss for the period and on the following weighted average number of shares in issue.

	6 Months to June 2009	6 months to June 2008	3 months to June 2009	3 months to June 2008	Year ended 31 December 2008
For basic and diluted loss per share	59,210,331	59,205,753	59,210,331	59,209,100	59,208,052

As a result of the losses incurred in the period ended 30 June 2009, 30 June 2008 and 31 December 2008 there was no dilutive effect from the issue of share options.

 

4. Segmental Analysis 

During the period the Company has adopted IFRS 8 which is effective for annual reporting periods beginning on or after 1 January 2009 and requires that the Company should disclose segmental information based on financial data used by the Chief Operating Decision Makers (CODM) who are responsible for making financial decisions. The CODM is considered to be the Company's Senior Managers and Executive Directors

The Directors consider there to be only one segment under IFRS 8, and have disclosed the following additional information to be consistent with prior periods 

a) Analysis of group results:

 

 

		6 Months to June 2009 (unaudited)			6 months to June 2008 (unaudited)			12 months to December 2008 (audited)
		IBMS	Media Pro	Total	IBMS	Media Pro	Total	IBMS	Media Pro	Total
		£	£	£	£	£	£	£	£	£
	Revenue	7,702,251	631,007	8,333,258	7,801,743	375,644	8,177,387	16,713,517	1,117,367	17,830,884
	Segment result	(2,154,522)	85,538	(2,068,984)	(835,761)	(158,893)	(994,654)	45,300	(1,515)	43,785
	Fair value adjustments on Financial instruments	1,185,525	-	1,185,525	227,961	-	227,961	(2,011,431)	-	(2,011,431)
	(Loss)/Gain on hedging instrument			(648,616)			21,513			(290,259)
	Finance income			5,372			25,468			50,854
	Finance costs			(28,992)			(48,964)			(149,048)
	Loss before tax			(1,555,695)			(768,622)			(2,356,099)
	Income tax expense/(credit)			(313,501)			180,705			606,516
	Loss for the period			(1,242,194)			(587,917)			(1,749,583)
	Other Information
	Capital expenditure - tangible	47,883	5,876	53,759	384,924	13,615	398,539	564,871	6,831	571,702
	Capital expenditure - intangible	-	-	-	956,127	-	956,127	956,127	-	956,127
	Depreciation and amortisation	722,528	4,370	726,898	336,380	11,112	347,492	1,001,656	71,141	1,072,797
	Segment Balance Sheet
	Segment Asset	20,159,828	427,038	20,586,866	25,425,107	488,860	25,913.967	22,787,150	346,356	23,133,506
	Tax Assets			222,939			237,350			337,525
	Total Assets			20,809,805			26,151,317			23,471,031
	Segment Liabilities	4,929,449	422,341	5,351,790	6,860,618	351,743	7,212,361	7,632,067	42,456	7,674,523
	Tax Liabilities			115,340			1,021,599			102,365
	Total Liabilities			5,467,130			8,233,960			7,776,888

		3 Months to June 2009 (unaudited)			3 months to June 2008 (unaudited)
		IBMS	Media Pro	Total	IBMS	Media Pro	Total
		£	£	£	£	£	£
	Revenue	3,825,267	404,875	4,230,142	3,770,528	151,771	3,922,299
	Segment result	(1,782,065)	138,597	(1,643,468)	(657,124)	(140,965)	(798,089)
	Fair value adjustments on Financial instruments	1,162,105		1,162,105	27,654	-	27,654
	(Loss)/Gain on hedging instrument			(260,670)			10,768
	Finance income			2,629			7,345
	Finance costs			(10,431)			(25,769)
	Loss before tax			(749,845)			(778,091)
	Income tax  expense/(credit)			131,027			183,463
	Loss for the period			(618,818)			(594,628)
	Other Information
	Capital expenditure - tangible	898	-	898	149,003	9,066	158,069
	Capital expenditure - intangible	-	-	-	426,117	-	426,117
	Depreciation and amortisation	358,559	1,941	360,500	169,228	6,294	175,522

 

b) The Group's revenue and (loss) / profit before tax were all derived from its principal activities. Revenue and profit from operations were made in the following geographical markets:

		Revenue			Segment result
	6 Months to 30 June  2009 £		6 months to 30 June  2008 £	Year ended 31 December 2008 £	6 Months to 30 June  2009 £	6 Months to 30 June  2008 £	Year ended 31 December 2008 £
Europe, Middle East and Africa “EMEA”	2,273,592		3,466,411	6,763,584	(896,265)	(90,865)	444,562
Americas	4,592,297		3,375,720	8,162,962	(364,761)	(648,143)	(311,091)
Australasia	1,467,369		1,335,256	2,904,338	(807,958)	(255,646)	(89,686)
	8,333,258		8,177,387	17,830,884	(2,068,984)	(994,654)	43,785

 

	Revenue		Segment result
	3 Months to June 2009 £	3 Months to June 2008 £	3 Months to June 2009 £	3 Months to June 2008 £
Europe, Middle East and Africa “EMEA”	1,287,277	1,483,470	(535,339)	(209,904)
Americas	2,001,391	1,833,839	(659,886)	(416,784)
Australasia	941,474	604,990	(448,243)	(160,633)
	4,230,142	3,922,299	(1,643,468)	(787,321)

 

The above geographical location has been provided based on the destination of services provided.

More than 90% of the assets of the Group are located in the EMEA region. The Group derives the majority of its revenue outside of the EMEA region.

5.  Seasonality

Whilst revenue is not seasonal there has been an historic trend of the second half of the year being stronger than the first half of the year. For the year ended 31 December 2008, the 2nd half revenue represented 54% (2007: 54%) of the annual revenue.

  

6.  Intangibles

	Trade Mark £	Customer Contracts £	Intellectual Property £	Development  Costs £	Total £
Cost
1 January 2008	2,210	2,701,366	469,404	4,914,386	8,087,366
Additions during the year - internal development	-	-	-	956,127	956,127
At 31 December 2008	2,210	2,701,366	469,404	5,870,513	9,043,493
At 30 June 2009	2,210	2,701,366	469,404	5,870,513	9,043,493
Amortisation
1 January 2008	-	474,651	106,657	-	581,308
Amortisation for the year	-	258,904	58,170	349,436	666,510
Impairment of Customer Contracts and Intellectual Property	-	541,963	149,156	-	691,119
At 31 December 2008	-	1,275,518	313,983	349,436	1,938,937
Amortisation for the period	-	127,816	13,932	419,322	561,070
At 30 June 2009	-	1,403,334	327,915	768,758	2,500,007
Carrying Amount
At 30 June 2009	2,210	1,298,032	141,489	5,101,755	6,543,486
At 31 December 2008	2,210	1,425,848	155,421	5,521,077	7,104,556

7. Trade and Other Receivables

Trade and other receivables include an overdue trade receivable amount of £1.7 million (December 08 £2.1 million, June 08 £1.5 million) due from a customer in the United States. A further amount of £2.7 million (December 08 £3.1 million, June 08 £2.3 million) in respect of the same contract with the same customer is included in accrued income. Since the end of the period £0.2m has been received from this customer and the directors are actively pursuing the remaining amounts outstanding and have concluded that no provision is appropriate at present. The directors are of the opinion that substantially all of the amounts due from the customer are recoverable although there remains current uncertainty over the timing of settlement of the remaining outstanding receivable.

 

8. Derivative Financial Instruments

		30 June 2009 £	30 June 2008 £	31 December 2008 £
	Forward foreign exchange contracts - classified as held for trading - Canadian Dollar	49,182	115,162	293,248
	Forward foreign exchange contracts - classified as held for trading - US Dollar	1,119,850	410,535	2,061,309
	Forward foreign exchange contracts - classified as effective cash flow hedge	871,296	139,817	2,181,000
	Total	2,040,328	665,514	4,535,557

As at 30 June 2009, the Group held forward foreign currency contracts of US Dollar $18,000,000 (31 December 2008 $24,000,000, 30 June 2008 $30,000,000) and Canadian Dollar C$ 1,200,000 (31 December 2008 C$2,800,000, 30 June 2008 C$6,000,000) to hedge expected settlements of foreign currency receivable balances. US Dollar $9,000,000 (31 December 2008 $12,000,000, 30 June 2008 $15,000,000) of the US Dollar forward contract relates to a written option held for trading. 

9. Share Capital and Share Premium

 

	Allotted, issued and fully paid
	Number of Shares	Ordinary Shares £	Share Premium £	Total £
Opening balance as at 1 January 2008	59,202,331	2,960,117	9,045,412	12,005,529
Proceeds from shares issued - employee share option scheme	8,000	400	1,480	1,880
At 30 June 2008, 31 December 2008 and 30 June 2009	59,210,331	2,960,517	9,046,892	12,007,409

10. Post Balance Sheet Event

On 15th June 2009 3,300,000 options at 23.5 p per share were granted under the Pilat Share Option Scheme which were subject to the approval of the Tel Aviv Stock Exchange. This approval was received on the 28th July 2009.

ENDIR DFLFXKVBZBBE