RNS Number:5180K
Vitesse Media PLC
30 April 2003
Vitesse Media Plc
CHAIRMAN'S STATEMENT FOR THE YEAR ENDING 31 JANUARY 2003
Vitesse Media Plc, the AIM listed print and on-line publisher in the enterprise
sector, announces its results for the year ending 31 January 2003.
Highlights:
* Turnover up 9.6% to #1.5 million (2002: #1.37 million)
* Cash at bank and in hand at year end over #400,000 (2002: #500,000)
* New titles include: BusinessXL (a business-to-business magazine),
Business GO and Small Business Offers (both email publications).
www.growthbusiness.co.uk, a new directory listing Aim and Venture Capital
deals and the advisers involved, has also been introduced during the year
* New long-term deals signed with Sage, Pinsent Curtis Biddle, Mayer
Brown Rowe & Maw and Eurofactor.
* Existing partner deals include Lloyds TSB, Microsoft bCentral, Baker
Tilly and PKF
* Trading losses were #294,000; these include all the start-up costs for
our newly-launched publications. Writing-off web site and database costs of
#69,000 gives a loss on ordinary activities of #363,000.
Business Overview:
The year to the end of January 2003 has been a period of considerable change for
the Group and completes the significant transformation of the business over a
three-year period. We are now a broad-based media group with revenues from
sponsorship, advertising, database sales, subscription and product sales.
In the year to 31 January 2000, the Group's revenues consisted of subscriptions
generated by direct mail for several investment publications plus royalties on a
business and tax guide. The bulk of the revenue for the last financial year came
from business products rather than investment products. The breakdown of
revenues is as follows:
Business 58% (2002: 51%)
Tax 7% (2002: 3%)
Investment 35% (2002: 46%)
The underlying gross margins of the business remain stable.
Business Performance:
Business XL
The major product development of the year was the launch of our business
magazine Business XL. The magazine is currently published every two months and
sent to 30,000 chief executive officers of growing companies, which have
revenues over #1 million. The editorial, design and production are high-quality
and advertising has proved attractive to several professional organisations.
Overall progress has been steady and while the first two issues were
loss-making, issues three and four made a positive contribution. In the current
financial year we expect that progress to be maintained.
Business XL operates in a competitive market place. It is an important part of
our overall strategy to provide publications and events within the enterprise
sector and to build data bases and knowledge of all niches within this arena. In
this way we will be able to provide a comprehensive and high-level service to
all companies and organisations wishing to target the SME market place.
Small Business Products
The Group has four publications in this area: www.smallbusiness.co.uk, Lloyds
TSB Small Business Guide, businessGO and Small Business Offers.
Our online small business portal, www.smallbusiness.co.uk, has been a great
success since its launch in January 2002, attracting a captive audience of
200,844 small business owners and start-ups in its first 12 months of operation.
The content has been extremely well received and the site has built a reputation
of being very user-friendly.
Furthermore, we have worked closely with blue-chip sponsors such as Lloyds TSB
Business Banking, Hewlett Packard and Microsoft bCentral to deliver profile,
branding and customer acquisition. More recently we have developed bespoke
campaigns for government organisations such as Business Link and UK online for
business.
The success of the site has also opened up some additional revenue streams. We
have launched two highly regarded email newsletters, businessGO and Small
Business Offers. These newsletters are now distributed to over 9,000 small
businesses, which have registered online. Small Business Offers is driven by
advertising revenue, and gives established and less-established b2b products a
cost-effective route to a hard-to-reach market. It has exceeded all revenue
expectations. We expect to add further bolt-on products for small business
owners later this year.
Individual sales of Lloyds TSB Small Business Guide were extremely good during
the year and we completely sold out of guides for the first edition that we had
published ourselves (previous editions were published by Penguin Books). We
maintained the level of bookshop sales and in addition generated direct sales,
which carry a much higher margin, to purchasers through our other publications.
We have targeted increased individual sales for the current edition (up by 65%)
and by the end of the financial year we were on schedule to sell all guides in
stock before the new edition is published in September 2003. In addition, Lloyds
TSB continues to support the guide by giving a copy to each new business
customer.
In September we launched a series of Small Business Shows, run from an office in
Brighton. Initial shows, run in Bracknell and Croydon, were enthusiastically
received, however revenues were significantly lower than forecast and a loss of
#40,000 was recorded for 2002/3. During the current financial year, a further
show was held in Southampton. Unfortunately, despite all the efforts of a
dedicated and hard-working team, revenues, while improved, were still below
forecast. The time scale and necessary investment was much larger than
anticipated or sensible and in April we closed the Brighton office. Currently,
we are examining options which would allow us to continue the shows but with a
lower overhead structure.
Database Sales
The Group has extensive databases of investors in growing companies, small
business owners, CEOs of growing companies, tax-efficient investors and other
specialised lists. In the 2002/3 financial year, our lists were much in demand
with revenues up by 24%, however, the first three months of this financial year
have seen lower sales.
Tax Products
We publish a monthly print newsletter Tax-Effective Investor, a yearly tax guide
Lloyds TSB Tax Guide and also operate a small website, www.taxguide.co.uk.
Tax-Effective Investor is a higher-priced newsletter, #295 a year, giving
completely independent advice on investments in Venture Capital Trusts,
Enterprise Investment schemes and Aim and Ofex companies. Despite the difficult
investor market, subscriptions are building steadily.
This is the first year that we have published The Lloyds TSB Tax Guide in-house.
Like the Small Business Guide I am happy to report that we sold out of the 2002/
3 edition and that we increased the number of copies sold direct, improving the
margin. For the 2003/4 edition we are planning to increase individual sales by
35%. Lloyds TSB continues to support the guide and for the current edition,
three sections of the bank will use it: Privilege 365, Premier Banking and
Private Banking.
Revenues and margins for our tax products are expected to show a further
increase in the current financial year.
Investment Products
The market background for our investment publications continues to be difficult.
I regard it as a major achievement that the fall in revenues has been limited to
16%.
During the year we streamlined our publications and by the year-end these
consisted of Growth Company Investor (and its associated web site
www.growthcompany.co.uk), The Aim Guide (and its online version) and
www.smallcompanies.co.uk (an online service for professionals). Revenues
consisted of subscriptions and individual product sales, a small amount of
advertising and sponsorship of the Growth Company Awards. The Awards are now
established as a highly prestigious event to which invitations are much sought
after. We continue to attract new subscribers to the publications through
cash-positive affiliate deals with financial and other web sites. Furthermore,
renewal rates and subscription levels appear to have stabilised after the
declines seen during the last three years.
We have carefully monitored our costs - for example, publishing costs for Growth
Company Investor have shown substantial savings. Indeed gross margins for our
investment products have increased.
Personnel
The group's business model has evolved away from its original direct mail
marketing focus. As a result, Emyr Williams (Marketing Director) is leaving the
group to pursue other interests. He has been with us for over three years and
has provided us with hard work and wise counsel during that period. We would all
like to thank him for his contribution and wish him well in his future business
activities.
Roger Michael will be joining us on 6 May as publishing director. He has a
strong sales and deal-making background, and in 1997 carried out a management
buy-in of Timothy Benn Publishing with the backing of Kleinwort Capital. This
company merged with City Financial Communications to form Incisive Media, now a
fully-listed media company. Roger remained as managing director for nine months
after its flotation.
The Year Ahead
The first three months of the year have coincided with a unique combination of
political and economic uncertainty. However, we are confident that overall
progress continues to be made, although at a slower rate than we would like. We
expect revenues to continue to grow and bottom-line performance for the current
year to be an improvement on the last financial year.
We have made determined efforts to look for opportunities for acquisition and
consolidation in our chosen sector. We are in very early-stage conversations
with a number of businesses, but our overriding criteria will always be the
enhancement of shareholder value.
Sara Williams
Chairman & CEO
29 April 2003
CONSOLIDATED PROFIT & LOSS ACCOUNT
For the year ended 31 January 2003
2003 2002
# #
TURNOVER 1,502,137 1,370,863
Cost of sales (449,428) (367,959)
---------- ----------
Gross profit 1,052,709 1,002,904
Administrative expenses - exceptional (68,950) -
- other (1,348,359) (1,045,629)
---------- ----------
OPERATING LOSS (364,600) (42,725)
Interest receivable and similar income 12,749 14,288
Interest payable and similar charges (10,730) (16,894)
---------- ----------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (362,581) (45,331)
Taxation - (1,655)
---------- ----------
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (362,581) (46,986)
=========== ===========
LOSS PER SHARE
Basic (2.79p) (0.42p)
=========== ===========
Diluted (2.79p) (0.42p)
=========== ===========
The operating loss for the year arises from the group's continuing operations.
No separate Statement of Total Recognised Gains and Losses has been presented as
all such gains and losses have been dealt with in the Profit and Loss Account.
CONSOLIDATED BALANCE SHEET
31 January 2003
2003 2002
# #
FIXED ASSETS
Intangible assets 653,408 653,408
Tangible assets 82,969 135,329
---------- ----------
736,377 788,737
---------- ----------
CURRENT ASSETS
Debtors 240,607 411,949
Cash at bank and in hand 402,256 504,387
---------- ----------
642,863 916,336
---------- ----------
CREDITORS: Amounts falling due within one year (311,460) (240,742)
---------- ----------
NET CURRENT ASSETS 331,403 675,594
---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES 1,067,780 1,464,331
CREDITORS: Amounts falling due after more than one (60,183) (109,238)
year
---------- ----------
DEFERRED INCOME (277,364) (262,279)
---------- ----------
NET ASSETS 730,233 1,092,814
========== ==========
CAPITAL AND RESERVES
Called up share capital 1,299,284 1,299,284
Share premium account 900,998 900,998
Other reserves 103,904 103,904
Profit and loss account (1,573,953) (1,211,372)
---------- ----------
EQUITY SHAREHOLDERS' FUNDS 730,233 1,092,814
========== ==========
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 January 2003
2003 2002
# #
Cash flow from operating activities (14,237) (217,206)
Returns on investments and servicing of finance 2,019 (2,606)
Taxation - (1,655)
Capital expenditure (69,201) (56,144)
---------- ----------
CASH OUTFLOW BEFORE USE OF LIQUID RESOURCES AND
FINANCING
(81,419) (277,611)
Management of liquid resources 199,528 (462,463)
Financing (20,712) 822,818
---------- ----------
INCREASE IN CASH IN THE YEAR 97,397 82,744
========== ==========
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2003 2002
# #
Increase in cash in the year 97,397 82,744
Cash outflow from decrease in debt and lease financing 20,712 14,879
---------- ----------
Cash (inflow)/outflow from change in liquid resources (199,528) 462,463
---------- ----------
Change in net funds resulting from cash flows (81,419) 560,086
New finance leases - (5,935)
---------- ----------
MOVEMENT IN NET FUNDS IN PERIOD (81,419) 554,151
NET FUNDS/(DEBT) AT 1 FEBRUARY 2002 384,449 (169,702)
---------- ----------
NET FUNDS AT 31 JANUARY 2003 303,030 384,449
========== ==========
VITESSE MEDIA
NOTES
1. The financial information contained in this document does not constitute
statutory accounts within the meaning of section 240 Companies Act 1985.
The figures for the year ended 31 January 2003 have been extracted from
the annual accounts in respect of which the auditors have not yet signed
their audit report. The audited statutory accounts for the year ended 31
January 2002 have been extracted from the audited statutory accounts for
that year which have been filed with the Registrar of Companies and
received an unqualified auditors' report which did not contain a statement
under section 237(2) or (3) Companies Act 1985.
2. The accounting policies adopted are consistent with those in previous years.
3. The calculation of loss per share are based on losses for the year of
#362,581 (2002: #46,986) and on a weighted average of 12,992,844 (2002:
11,288,293) shares in issue during the year. The share options are
non-dilutive, hence there is no difference between the basic loss per share
and the diluted loss per share.
4. SHARE CAPITAL 2003 2002
# #
Authorised:
20,000,000 ordinary shares of 10p each 2,000,000 2,000,000
========= =========
Allotted, issued and fully paid:
12,992,844 ordinary shares of 10p each 1,299,284 1,299,284
========= =========
5. CASH FLOWS 2003 2002
# #
a Reconciliation of operating loss to net cash flow
from operating activities
Operating loss (364,600) (42,725)
Depreciation 63,799 44,666
Impairment adjustment 57,762 -
Profit on sale of fixed assets - (64)
Decrease/(increase) in debtors 171,342 (140,199)
Increase/(decrease) in creditors 42,375 (40,940)
Increase/(decrease) deferred income 15,085 (37,944)
---------- ----------
Net cash flow from operating activities (14,237) (217,206)
========== ==========
VITESSE MEDIA
2003 2002
# #
b Analysis of cash flows for headings netted in the cash flow
Returns on investments and servicing of finance
Interest received 12,749 14,288
Interest paid (10,730) (16,894)
--------- ---------
Net cash inflow/(outflow) from returns on investments
and servicing of finance
2,019 (2,606)
========= =========
Capital expenditure
Purchase of tangible fixed assets (69,201) (56,869)
Sale of tangible fixed assets - 725
--------- ---------
Net cash outflow from capital expenditure (69,201) (56,144)
========= =========
Financing
Issue of ordinary share capital - 1,072,503
Cost of share issue - (234,806)
Repayment of long term bank loan (13,591) (5,389)
Capital element of hire purchase contracts (7,121) (9,490)
--------- ---------
Net cash (outflow)/inflow from financing (20,712) 822,818
========== ==========
At Other non At
1 February cash 31 January
2002 Cash flow changes 2003
c Analysis of net funds # # # #
Cash in hand, at bank 41,924 97,397 - 139,321
Bank deposits 462,463 (199,528) - 262,935
--------- --------- --------- =--------
504,387 (102,131) - 402,256
Debt due within 1 year (3,579) 3,579 (35,422) (35,422)
Debt due after 1 year (105,456) 10,012 35,422 (60,022)
Finance leases (10,903) 7,121 - (3,782)
---------
20,712
--------- --------- --------- ---------
Total 384,449 (81,419) - 303,030
========= ========= ========= =========
6. This preliminary announcement was approved by the Board on 29 April 2003.
Copies of this announcement are available at the office of the company's
nominated advisor KBC Peel Hunt Ltd at the address below. The Annual
General Meeting will take place at the offices of KBC Peel Hunt Ltd at 4th
Floor, 111 Old Broad Street, London EC2N 1PH at 10.30am on 27 June 2003.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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