Interim Results
27 Februar 2007 - 8:01AM
UK Regulatory
RNS Number:8847R
Charterhouse Communications PLC
27 February 2007
Charterhouse Communications plc
CHAIRMAN'S STATEMENT
Group turnover for the six months to 30th November 2006 was #5.0m, up 10% on the
previous year.
Investment in key products continued during the period, resulting in a pre tax
loss for the group in the period rising from #0.5m to #0.7m. Loss per share was
0.51p (2005: 0.41p).
Before amortisation of goodwill and intangibles, there was a small operating
loss of #0.05m (2005: operating profit of #0.1m).
No dividend is being declared.
Our strategy to focus on developing the areas of our business with the greatest
potential and to reduce costs and the level of debt that the company carries was
approved by the Board during the period.
Since then we have made substantial progress. Savings in overheads worth #0.5m
in a full year, primarily through reduced numbers of staff, were made in
December 2006. Independent Research Services, What Investment magazine and a
freehold property at Brand and Co have been sold for a total of #1.0m.
This ongoing restructuring will be complete by the year-end. Additionally by the
year-end the full benefits of the restructuring of Company REFS, following the
switch to the London Stock Exchange as data provider, will be in place.
Including online revenues from Company REFS, online revenues grew to 9% of total
revenue at the half-year from 6% last year. We expect this to grow to about 10%
of total group revenue by the year ending May 2007, against 6% of group revenue
in the year to May 2006.
A financial review by market follows from our Finance Director, Anthony Peters.
PETER STRONG
Chairman
26 February 2007
FINANCIAL REVIEW
Mortgage
Comprising our titles in the broker, lender and consumer arenas, the mortgage
division's turnover grew by 6% year on year, driven by our market leading weekly
broker magazine Mortgage Introducer whose revenues grew 18% against last year.
Contribution made by Mortgage Introducer also rose by 9% year on year.
Conditions continued to be tougher in the consumer sector, where What Mortgage
magazine's turnover fell against last year. This is an indication that more
advertisers wish to move online, and we have experienced growth in that area
ourselves.
Contribution would have been higher across the mortgage division but we
experienced increased production and distribution costs from publishing a higher
volume of informative supplements to the mortgage broker market. We also sought
to increase the visibility of What Mortgage with promotions in certain
supermarkets.
Wealth
On a like for like basis, after excluding the UKFIRD directory which was
published in 2005 but not this year, turnover in this division was 4% below last
year, as a direct result of lower levels of sponsorship for the directories in
the division.
The greatest success story in the wealth division was the regeneration and
growth in Company REFS, which saw turnover and contribution increase by 6% and
21% respectively, and this growth was particularly marked in our REFS online
offering.
The consumer personal finance title, What Investment, showed flat turnover
against last year, and with a refocus of resources only on growth areas, this
title was sold to Vitesse Media plc in February 2007 for #0.5m.
After the cost savings from the new London Stock Exchange data feed that powers
REFS, contribution from the wealth division rose 36%. This would have been even
higher but for additional development and maintenance costs associated with the
data feed in the first six months of the financial year, compared to last year.
Online
The online division's turnover and contribution grew markedly against last year
by 81% and 84% respectively.
The online business growth was dominated by the mortgage websites, but the
personal finance websites are under development. The investment made by the
company in the online infrastructure, both editorially (with the content
management system in particular) and in the sales team did increase the cost
base year on year but drove growth still further.
Treasury
The Treasury division's portfolio revenues grew 15% year on year, after the
launch of TMI USA in Spring 2006 (not in the comparative figures). Contribution
from Treasury was below last year, however, following substantial editorial
investment in the products.
Brand & Co
Revenues in our bookselling subsidiary grew 39% from the previous year,
following the effect of two substantial customer contracts with Clifford Chance
and Cameron McKenna. Contribution from Brand was up 54% year on year. As a
result of its expansion, Brand moved to bigger premises in February 2007 and the
Group sold its freehold property held at Enfield for #0.3m.
Independent Research Services
Against last year, IRS ended slightly down on revenue and contribution and was
loss-making. This was as a result of winding down the operation following
disappointing marketing campaigns from January 2006 through to June 2006. The
operation was sold in January 2007 for #0.2m.
Across the Group, administrative expenses were held firm at #1.0m.
Financing
Cash inflow from operating activities was #0.4m, up from #0.1m in the same
period last year. This was a reflection of exceptional cash management in the
period. The Group continued to repay its term loan, making payments of #0.4m in
the six month period.
ANTHONY PETERS
Finance Director
26 February 2007
Charterhouse Communications plc
Consolidated Profit and Loss Account
for the six months ended 30 November 2006
Six months ended Year ended
30 November 30 November 31 May
2006 2005 2006
Unaudited Unaudited Audited
#'000 #'000 #'000
Turnover
Continuing operations 4,180 3,728 7,824
Discontinued operations 814 801 1,746
------- ------- -------
4,994 4,529 9,570
Cost of sales (4,032) (3,413) (7,116)
------- ------- -------
Gross profit 962 1,116 2,454
Administrative expenses
Amortisation of goodwill and intangible assets (447) (440) (880)
Other administrative expenses (1,013) (1,012) (1,975)
------- ------- -------
(1,460) (1,452) (2,855)
Operating profit/(loss)
Continuing operations (519) (351) (484)
Discontinued operations 21 15 83
------- ------- -------
(498) (336) (401)
Interest receivable 3 2 4
Interest payable (215) (196) (400)
------- ------- -------
Loss ordinary activities before taxation (710) (530) (797)
Taxation 79 27 28
------- ------- -------
Loss for the period (631) (503) (769)
======= ======= =======
Basic and diluted loss per share (0.51p) (0.41p) (0.62p)
Additional information for the results and earnings per share before amortisation of goodwill and intangible
assets can be found in Note 4
Charterhouse Communications plc
Consolidated Balance Sheet
as at 30 November 2006
30 November 30 November 31 May
2006 2005 2006
Unaudited Unaudited Audited
#'000 #'000 #'000
Fixed assets
Goodwill and intangible assets 6,790 7,613 7,237
Tangible assets 373 131 353
------- ------- -------
7,163 7,744 7,590
Stock and work in progress 78 56 50
Debtors: due within one year 2,287 1,883 2,386
Due after one year 358 226 217
Cash at bank and in hand 460 213 313
------- ------- -------
3,183 2,378 2,966
Creditors: amounts falling due
Within one year (8,765) (6,981) (7,924)
------- ------- -------
Net current liabilities (5,582) (4,603) (4,958)
------- ------- -------
Total assets less current liabilities 1,581 3,141 2,632
Creditors: amounts falling due
after one year (1,348) (2,188) (1,768)
------- ------- -------
Net assets 233 953 864
======= ======= =======
Capital and reserves
Share capital 1,233 1,233 1,233
Revaluation reserve 177 - 177
Profit and loss account (1,177) (280) (546)
------- ------- -------
Equity shareholders' funds 233 953 864
======= ======= =======
Charterhouse Communications plc
Consolidated Cash Flow Statement
for the six months ended 30 November 2006
Six months ended Year ended
30 November 30 November 31 May
2006 2005 2006
Unaudited Unaudited Audited
#'000 #'000 #'000
Cash flow from operating activities 390 142 414
Returns on investments and servicing of finance (212) (194) (396)
Taxation (166) (41) (38)
Capital expenditure and financial investment (52) (27) (152)
------- ------- -------
Cash flow before financing (40) (120) (172)
Financing (420) (420) (840)
------- ------- -------
Decrease in cash in period (460) (540) (1,012)
======= ======= =======
Charterhouse Communications plc
Notes
1. The financial information contained in this interim report does not
constitute statutory accounts as defined in section 240 of the Companies Act
1985 ('the Act'). The financial information for the year ended 31 May 2006 is
an abridged version of the Group's published financial statements for that year
which contained an unqualified audit report and which have been filed with the
Registrar of Companies. The audit report contained no statement under s237(2)
or (3) of the Act.
2. The results for the half years to 30 November 2006 and 30 November 2005
have been prepared on the basis of the accounting policies adopted in the
accounts for the year ended 31 May 2006.
3. Goodwill and intangible assets are amortised through the Group's profit and
loss account over a maximum period of 20 years, in accordance with Financial
Reporting Standard 10 'Goodwill and Intangible Assets'.
Although the Group made a loss before tax and amortisation in the period, the
directors are satisfied that there has been no impairment of goodwill and
intangible assets. This impairment review will also be undertaken again at the
year end.
4. The following are the results before amortisation of goodwill
and intangible assets. This amortisation has no effect on cash flows or
corporation tax payable.
Six months ended Year ended
30 November 30 November 31 May
2006 2005 2006
Unaudited Unaudited Audited
#'000 #'000 #'000
(Loss)/profit before interest, tax and amortisation (51) 104 479
(Loss)/profit before tax and amortisation (263) (90) 83
Retained (loss)/profit before amortisation (184) (63) 111
(Loss)/earnings per share before amortisation
of goodwill and intangible assets
Basic and diluted (0.15p) (0.05p) 0.09p
5. The Group continues to rely on support from the bank. The
existing loan facility, which stood at #2.2 million on 30 November 2006, is
repayable over a term ending in May 2009. The overdraft facility, which stood at
#3.6 million on 30 November 2006, has been reduced following receipt of recent
disposals (see note 7) and is currently #3.2 million. The overdraft facility is
due for renewal on 30 June 2007.
The directors of Charterhouse Communications plc have prepared profit and loss
and cash flow forecasts indicating that the level of debt will further reduce
and which are dependent on both the trading performances of the businesses in
the Group and certain debt reducing options.
Subject to the above, the bank have confirmed that they see no reason why the
facilities will not be continued to be offered, in line with cash flow
forecasts.
6. No interim dividend will be paid (2005: nil).
7. Post Balance Sheet Events
In line with its stated strategy of reducing debt by making disposals of
non-core assets, the group realised the following gross proceeds after the
balance sheet date:
- Independent Research Services - #185k in January 2007
- What Investment and What Investment Trust - #500k in February 2007
- Freehold property at Baker Street, Enfield - #310k in February 2007
The turnover and operating profit from these discontinued operations are shown
separately in the profit and loss account for the period and its comparatives.
8. This report is being sent to shareholders and is available for at least
fourteen days from the Company's registered office at Arnold House, 36-41
Holywell Lane, London EC2A 3SF.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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