TIDMAEO
RNS Number : 0443D
Aeorema Communications Plc
22 October 2015
Aeorema Communications plc / Index: AIM / Epic: AEO / Sector:
Media
22 October 2015
Aeorema Communications plc ('Aeorema' or 'the Company')
Final Results
Aeorema Communications plc, the AIM-traded live events agency,
announces its results for the year ended 30 June 2015.
Overview
-- Profits before tax from continuing operations to GBP383,216 (2014: GBP504,841)
-- Revenues of GBP4,934,560 (2014: GBP4,764,584)
-- Cash at bank and in hand of GBP1,558,453 (2014: GBP1,620,895)
-- Recommend dividend payment of 3p (2014: 2p)
Chairman's Statement
During the year, Aeorema reinforced its position as a leading
provider of live events under the single brand, Cheerful
Twentyfirst, and navigated through a competitive market to return a
profit in excess of the trading update on profits issued to the
market in May 2015. The year also saw us investing in a new
website, developing a stronger single brand, creating a highly
visible social media presence, and completing the refurbishment of
our new offices to allow for future growth.
Our ability to respond and adapt our offering in a competitive,
rapidly evolving market has enabled us to attract new clients and
further develop our relationships with existing clients. We work
with senior leaders of forward-thinking brands who value innovation
and want to take live communication to the next level, which is
where we excel. Year-on-year, our talented team produces original,
outstanding work for these clients, resulting in several
nominations at prestigious award events. These include nominations
for work completed on behalf of two internationally renowned
companies, further highlighting the excellent reputation that we
have built in the space.
Our focus on delivering creative live events, incorporating
superb screen content and award-winning video, naturally attracts
leading people to our team. During the year and as part of our
growth strategy, we recruited several new team members to focus on
new business development and strengthen our capabilities in design
and content. These appointments will each be pivotal in supporting
our growth in the year ahead.
The results for the year show a profit before taxation from
continuing operations of GBP383,216 (2014: GBP504,841) on revenue
of GBP4,934,560 (2014: GBP4,764,584). We remain cash positive with
cash at bank and in hand of GBP1,558,453 (2014: GBP1,620,895).
The Board is proposing a dividend of 3 pence per share (2014: 2
pence per share) to be paid to shareholders on the register on 6
November 2015. The ex-dividend date will be on 5 November 2015.
Subject to the proposed dividend being approved by the
shareholders, it will be paid on 27 November 2015.
Looking ahead, the market is extremely competitive and, as has
been the custom over the last few years, we anticipate the second
half of the year to contribute the greater part of both turnover
and profitability. Investors should be assured that our brand is
gaining recognition and we are carving out a niche position in the
sector, which we believe will yield positive longer term
results.
On behalf of the board, I would like to thank our team for their
work during the past year as well as our shareholders for their
continued support.
M Hale
Chairman
22 October 2015
For further information visit www.aeorema.com or contact:
Gary Fitzpatrick Aeorema Communications plc Tel: 020 7291
0444
Marc Milmo/Catherine Leftley Cantor Fitzgerald Europe Tel: 020
7894 7000
Charlotte Heap/Elisabeth Cowell St Brides Partners Tel: 020 7236
1177
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2015
Notes 2015 2014
GBP GBP
Continuing operations
Revenue 2 4,934,560 4,764,584
Cost of sales (3,017,634) (2,794,629)
-------------------------------- ------ ------------ ------------
Gross profit 1,916,926 1,969,955
Administrative expenses (1,534,471) (1,465,520)
-------------------------------- ------ ------------ ------------
Operating Profit 3 382,455 504,435
-------------------------------- ------ ------------ ------------
Finance income 4 761 406
Profit before taxation 383,216 504,841
Taxation 5 (67,979) (89,145)
-------------------------------- ------ ------------ ------------
Profit and total comprehensive
income for the year
attributable to owners
of the parent 315,237 415,696
Profit per ordinary
share:
Total basic earnings
per share 8 3.51904p 5.02290p
Total diluted earnings
per share 8 3.37134p 4.55487p
-------------------------------- ------ ------------ ------------
There were no other comprehensive income items.
Statement of Financial Position
As at 30 June 2015
Notes Group Company
-------------------------- ----------------------
2015 2014 2015 2014
GBP GBP GBP GBP
------------------------------- ------ ------------ ------------ ---------- ----------
Non-current assets
Intangible assets 9 365,154 365,154 - -
Property, plant and equipment 10 65,135 67,449 - -
Deferred taxation 6 6,404 24,145 - -
Investments in subsidiaries 11 - - 568,080 553,196
------------ ------------ ---------- ----------
Total non-current assets 436,693 456,748 568,080 553,196
Current assets
Inventories - 2,674 - -
Trade and other receivables 12 1,352,398 1,475,921 328,135 357,873
Cash and cash equivalents 13 1,558,453 1,620,895 657,873 734,628
------------ ------------ ---------- ----------
Total current assets 2,910,851 3,099,490 986,008 1,092,501
------------ ---------- ----------
Total assets 3,347,544 3,556,238 1,554,088 1,645,697
Current liabilities
Trade and other payables 14 (1,463,504) (1,589,007) (86,105) (89,730)
Net assets 1,884,040 1,967,231 1,467,983 1,555,967
------------ ------------ ---------- ----------
Equity
Share capital 15 1,131,313 1,079,688 1,131,313 1,079,688
Share premium 16 7,063 - 7,063 -
Merger reserve 17 16,650 16,650 16,650 16,650
Other reserve 18 - 19,500 - 19,500
Share-based payment reserve - 110,972 - 110,972
Capital redemption reserve 257,812 257,812 257,812 257,812
Retained earnings 471,202 482,609 55,145 71,345
------------ ------------ ---------- ----------
Equity attributable to
owners of the parent 1,884,040 1,967,231 1,467,983 1,555,967
------------------------------- ------ ------------ ------------ ---------- ----------
Statement of Changes in Equity
For the year ended 30 June 2015
Share-based Capital
Share Share Merger Other payment redemption Retained Total
Group capital premium reserve reserve reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP GBP GBP
--------------------- ---------- --------- --------- --------- ------------ ------------ ---------- ----------
At 1 July 2013 1,004,688 - 16,650 - 96,083 257,812 125,883 1,501,116
Profit and
total comprehensive
income for
the year, net
of tax - - - - - - 415,696 415,696
Tax credit
relating to
share option
scheme - - - - - - 61,594 61,594
Dividends paid - - - - - - (120,564) (120,564)
Shares issued
in the period/to
be issued 75,000 - - 19,500 - - - 94,500
Share-based
payments - - - - 14,889 - - 14,889
---------- --------- --------- --------- ------------ ------------ ---------- ----------
At 30 June
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2014 1,079,688 - 16,650 19,500 110,972 257,812 482,609 1,967,231
At 1 July 2014 1,079,688 - 16,650 19,500 110,972 257,812 482,609 1,967,231
Profit and
total comprehensive
income for
the year, net
of tax - - - - - - 315,237 315,237
Dividends paid - - - - - - (452,500) (452,500)
Shares issued
in the period 51,625 7,063 - (19,500) - - - 39,188
Share-based
payments - - - - 14,884 - - 14,884
Transfer - - - - (125,856) - 125,856 -
At 30 June
2015 1,131,313 7,063 16,650 - - 257,812 471,202 1,884,040
--------------------- ---------- --------- --------- --------- ------------ ------------ ---------- ----------
Share-
based Capital
Share Share Merger Other payment redemption Retained Total
Company capital premium reserve reserve reserve reserve earnings equity
GBP GBP GBP GBP GBP GBP GBP GBP
------------------- ---------- --------- --------- --------- ---------- ------------ ---------- ----------
At 1 July 2013 1,004,688 - 16,650 - 96,083 257,812 132,235 1,507,468
Comprehensive
income for
the year, net
of tax - - - - - 59,674 59,674
Dividends paid - - - - - (120,564) (120,564)
Shares issued
in the period/to
be issued 75,000 - - 19,500 - - 94,500
Share-based
payments - - - - 14,889 - 14,889
---------- --------- --------- --------- ---------- ------------ ---------- ----------
At 30 June
2014 1,079,688 - 16,650 19,500 110,972 257,812 71,345 1,555,967
At 1 July 2014 1,079,688 - 16,650 19,500 110,972 257,812 71,345 1,555,967
Comprehensive
income for
the year, net
of tax - - - - - - 310,444 310,444
Dividends paid - - - - - - (452,500) (452,500)
Shares issued
in the period 51,625 7,063 - (19,500) - - - 39,188
Share-based
payments - - - - 14,884 - - 14,884
Transfer - - - - (125,856) - 125,856 -
At 30 June
2015 1,131,313 7,063 16,650 - - 257,812 55,145 1,467,983
------------------- ---------- --------- --------- --------- ---------- ------------ ---------- ----------
Statement of Cash Flows
For the year ended 30 June 2015
Notes Group Company
---------------------- ----------------------
2015 2014 2015 2014
GBP GBP GBP GBP
----------------------------------- ------ ---------- ---------- ---------- ----------
Net cash flow from operating
activities 24 383,894 109,225 (63,711) (152,338)
Cash flows from investing
activities
Finance income 761 406 268 250
Purchase of property, plant
and equipment 10 (43,785) (44,462) - -
Proceeds from sale of property,
plant and equipment 10,000 - - -
Dividends received by the
Company - - 400,000 130,000
Cash (used) / generated in
investing activities (33,024) (44,056) 400,268 130,250
Cash flows from financing
activities
Proceeds of share issue 39,188 94,500 39,188 94,500
Dividends paid to owners of
the Company (452,500) (120,564) (452,500) (120,564)
---------- ---------- ---------- ----------
Cash used in financing activities (413,312) (26,064) (413,312) (26,064)
Net (decrease)/increase in
cash and cash equivalents (62,442) 39,105 (76,755) (48,152)
Cash and cash equivalents
at beginning of year 1,620,895 1,581,790 734,628 782,780
---------- ---------- ---------- ----------
Cash and cash equivalents
at end of year 13 1,558,453 1,620,895 657,873 734,628
----------------------------------- ------ ---------- ---------- ---------- ----------
Notes to the consolidated financial statements
For the year ended 30 June 2015
1 Accounting policies
Aeorema Communications plc is a public limited company
incorporated in the United Kingdom. The Company is domiciled in the
United Kingdom and its principal place of business is Moray House,
23/31 Great Titchfield Street, London W1W 7PA. The Company's
Ordinary Shares are traded on the AIM Market.
The principal accounting policies adopted in the preparation of
the financial statements are set out below. The policies have been
consistently applied to all the years presented, unless otherwise
stated.
Going concern
The Group's business activities, together with the factors
likely to affect its future development and performance are set out
in the review of business contained in the Chairman's Statement.
The Group's financial statements show details of its financial
position including, in note 25, details of its financial
instruments and exposure to risk.
After reviewing the Group's budget for the next financial year,
other medium term plans and considering the risks outlined in note
25, the Directors, at the time of approving the financial
statements, have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future and have therefore used the going concern basis
in preparing the financial statements.
Basis of Preparation
The Group's financial statements have been prepared under the
historical cost convention and in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European
Union, and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS.
The following new standards, amendments to standards and
interpretations, applied for the first time from 1 July 2014.
-- IFRS 2 (Amended) 'Share-Based Payments', effective 1 July 2014.
-- IFRS 3 (Amended) 'Business Combinations', effective 1 July 2014.
-- IFRS 8 (Amended) 'Operating Segments', effective 1 July 2014.
-- IFRS 11 (Amended) 'Accounting for Acquisitions of Interests
in Joint Operations', effective 1 July 2016.
-- IAS 16 (Amended) 'Property, Plant and Equipment', effective 1 July 2014.
-- IAS 19 (Amended) 'Employee Benefits', effective 1 July 2014
-- IAS 24 (Amended) 'Related Party Disclosures', effective 1 July 2014.
-- IAS 38 (Amended) 'Intangible Assets', effective 1 July 2014.
-- IAS 32 (Amended) 'Financial Instruments: Presentation -
Offsetting Financial Assets and Financial Liabilities', effective 1
January 2014.
-- IAS 36 (Amended) 'Recoverable Amounts Disclosures for
Non-Financial Assets', effective 1 January 2014.
-- IAS 39 (Amended) 'Novation of Derivatives and Continuation of
Hedge Accounting', effective 1 January 2014.
-- IAS 40 (Amended) 'Investment Property', effective 1 January 2014.
-- IFRIC Interpretation 21 'Levies', effective 1 January 2014.
The adoption of these revised and amended standards has not
impacted on the Annual Report and Financial Statements.
Adopted IFRSs not yet applied
The following new standards, amendments to standards and
interpretations have been issued, but are not effective for the
financial year beginning 1 July 2014 and have not been adopted
early by the Group:
-- IFRS 9 'Financial Instruments', effective 1 January 2018.
-- IFRS 14 'Regulatory Deferral Accounts', effective 1 July 2016.
-- IFRS 15 'Revenue for Contracts with Customers', effective 1 January 2018.
-- IFRS 10, IFRS 12 and IAS 28 (Amended): 'Investment Entities:
Applying the Consolidation Exception', effective 1 January
2016.
-- IAS 1 (Amended), 'Disclosure Initiative', effective 1 January 2016.
-- Annual improvements to IFRS's 2012-2014 Cycle, effective 1 January 2016.
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-- IFRS 10 and IAS 28 (Amended): 'Sale or Contribution of Assets
between an Investor and its Associate or Joint Venture', effective
1 January 2016.
-- IAS 27 (Amended), 'Equity Method in Separate Financial Statements', effective 1 January 2016.
-- IAS 16 and IAS 41 (Amended), 'Bearer Plants', effective 1 January 2016.
-- IAS 16 and IAS 38 (Amended), 'Clarification of Acceptable
Methods of Depreciation and Amortisation' effective 1 January
2016.
-- IFRS 11 (Amended), 'Accounting for Acquisitions of Interests
in Joint Operations, effective 1 January 2016.
Management does not currently anticipate that the application of
these standards, where applicable, will have an impact on the
financial statements, except for the requirement of additional
disclosures.
Basis of consolidation
The Group financial statements consolidate those of the Company
and all of its subsidiary undertakings drawn up to 30 June 2015.
Subsidiaries are all entities (including structured entities) over
which the group has control. Subsidiaries are fully consolidated
from the date on which control is transferred to the group. They
are deconsolidated from the date that control ceases.
Intra-group transactions, balances and unrealised gains and
losses on transactions between group companies are eliminated.
The merger reserve is used where more than 90% of the shares in
a subsidiary are acquired and the consideration includes the issue
of new shares by the Company, thereby attracting merger relief
under the Companies Act 2006.
Revenue
Revenue represents amounts (excluding value added tax) derived
from the provision of services to third party customers in the
course of the Group's ordinary activities. Revenue is measured at
the fair value of consideration received taking into account any
trade discounts and volume rebates. Revenue for all business
segments is recognised when the Group has earned the right to
receive consideration for its services.
Intangible assets - goodwill
All business combinations are accounted for by applying the
acquisition method. Goodwill acquired represents the excess of the
fair value of the consideration and associated costs over the fair
value of the identifiable net assets acquired.
After initial recognition, goodwill is measured at cost less any
accumulated impairment losses. At the date of acquisition, the
goodwill is allocated to cash generating units, usually at business
segment level or statutory company level as the case may be, for
the purpose of impairment testing and is tested at least annually
for impairment. On subsequent disposal or termination of a business
acquired, the profit or loss on termination is calculated after
charging the carrying value of any related goodwill.
Property, plant and equipment
Property, plant and equipment is stated in the financial
statements at cost less accumulated depreciation and any impairment
value. Depreciation is provided to write off the cost less
estimated residual value of property, plant and equipment over its
expected useful life (which is reviewed at least at each financial
year end), as follows:
Leasehold land and buildings straight line over the life of the lease (3
years)
Fixtures, fittings and equipment 25% straight line
--------------------------------- --------------------------------------------
Any gain or loss arising on the derecognition of the asset
(calculated as the difference between the net disposal proceeds and
the carrying amount of the asset) is included in the Statement of
Comprehensive Income in the year that the asset is
derecognised.
Fully depreciated assets still in use are retained in the
financial statements.
Impairment
The carrying amounts of the Group's assets are reviewed at each
period end to determine whether there is any indication of
impairment. If any such indication exists, the assets' recoverable
amount is estimated. For goodwill and intangible assets that have
an indefinite useful life and intangible assets that are not yet
available for use, the recoverable amount is estimated at each
annual period end date and whenever there is an indication of
impairment.
An impairment loss is recognised whenever the carrying amount of
an asset or its cash-generating unit exceeds its recoverable
amount. Impairment losses are recognised in the Statement of
Comprehensive Income in those expense categories consistent with
the function of the impaired asset.
Operating leases
Rentals under operating leases are charged to the Statement of
Comprehensive Income on a straight line basis over the period of
the lease.
Investments
Fixed asset investments are stated at cost less provision for
diminution in value.
Inventories
Inventories are stated at the lower of cost and net realisable
value.
Trade and other receivables
Trade and other receivables are stated initially at fair value
and subsequently measured at amortised cost less any provision for
impairment.
Trade and other payables
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost.
Cash and cash equivalents
Cash comprises, for the purpose of the Statement of Cash Flows,
of cash in hand and deposits payable on demand. Cash equivalents
are short-term highly liquid investments that are readily
convertible to known amounts of cash and that are subject to an
insignificant risk of changes in value. Cash equivalents normally
have a date of maturity of 3 months or less from the acquisition
date.
Finance income
Financial income consists of interest receivable on funds
invested. It is recognised in the Statement of Comprehensive Income
as it accrues.
Taxation
Income tax on the profit or loss for the periods presented
comprises current and deferred tax. Current tax is the expected tax
payable on the taxable income for the year, using rates enacted or
substantively enacted at the end of the reporting period, and any
adjustment to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of goodwill; the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a
business combination; the differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the end of the reporting period.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the assets can be utilised. Deferred tax assets and
liabilities are not discounted.
Pension costs
The Group does not operate a pension scheme for its employees.
It does however, make contributions to the private pension
arrangements of certain employees. These arrangements are of the
money purchase type and the amount charged to the Statement of
Comprehensive Income represents the contributions payable by the
Group for the period.
Financial instruments
The Group does not enter into derivative transactions and does
not trade in financial instruments. Financial assets and
liabilities are recognised on the Statement of Financial Position
when the Group becomes a party to the contractual provision of the
instrument.
Equity
An equity instrument is a contract that evidences a residual
interest in the assets of an entity after deducting all of its
liabilities. Equity instruments are recorded at the proceeds
received, net of direct issue costs. The Group's equity instruments
comprise 'share capital' in the Statement of Financial
Position.
Foreign currency translation
Monetary assets and liabilities denominated in foreign
currencies are translated into sterling at the rates of exchange
ruling at the end of the reporting period. Transactions in foreign
currencies are recorded at the rate ruling at the date of the
transaction. All differences are taken to the Statement of
Comprehensive Income.
Share-based awards
The Group issues equity settled payments to certain employees.
Equity settled share based payments are measured at fair value
(excluding the effect of non-market based vesting conditions) at
the date of grant.
The fair value is estimated using option pricing models and is
dependent on factors such as the exercise price, expected
volatility, option price and risk free interest rate. The fair
value is then amortised through the Statement of Comprehensive
Income on a straight-line basis over the vesting period. Expected
volatility is determined based on the historical share price
volatility for the Company. Further information is given in note 22
to the financial statements.
Significant judgements and estimates
The preparation of the Group's financial statements in
conforming with IFRS required management to make judgements,
estimates and assumptions that effect the application of policies
and reported amounts in the financial statements. These judgements
and estimates are based on management's best knowledge of the
relevant facts and circumstances. Information about such judgements
and estimation is contained in the accounting policies and / or
notes to the financial statements and the key areas are summarised
below:
a) Depreciation rates are based on the estimated useful lives
and residual value of the assets involved.
b) The impairment review of goodwill is based on the estimation
of future cash flows and discount rates in order to calculate the
present value of the cash flows.
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c) The Group operates share incentive schemes as detailed in
note 22. In order to calculate the annual charge in accordance with
IFRS 2, management are required to make a number of assumptions and
include, amongst others, volatility and expected life of
options.
d) An allowance for uncollectable trade receivables is estimated
based on a combination of aging analysis and any specific, known
troubled customer accounts.
e) An allowance for dilapidations is estimated based on a total
value of works to restore the property to its original condition at
the end of the lease.
2 Revenue and segment information
The Company uses several factors in identifying and analysing
reportable segments, including the basis of organisation, such as
differences in products and geographical areas. The Board of
Directors, being the Chief Operating Decision Makers, have
determined that for the period ending 30 June 2015 there is only a
single reportable segment.
All revenue represents sales to external customers. Three
customers (2014: three) are defined as major customers by revenue,
contributing more than 10% of the Group revenue.
2015 2014
GBP GBP
----------------- ---------- ----------
Customer one 1,320,762 1,214,324
Customer two 632,892 571,188
Customer three 581,546 809,290
Major customers 2,535,200 2,594,802
----------------- ---------- ----------
The geographical analysis of revenue from continuing operations
by geographical location of customer is as follows:
Geographical
market 2015 2014 2015 2014 2015 2014 2015 2014
Rest of Rest of
UK UK Europe Europe the World the World Total Total
GBP GBP GBP GBP GBP GBP GBP GBP
Revenue 4,479,022 4,493,297 391,519 262,306 64,019 8,981 4,934,560 4,764,584
-------------- ---------- ---------- -------- -------- ----------- ----------- ---------- ----------
All non-current assets are based in the UK.
3 Operating profit
Operating profit is stated after charging: 2015 2014
GBP GBP
------------------------------------------------------ ---------- ----------
Depreciation of property, plant and equipment 30,708 48,185
Loss on disposal of property, plant and equipment 5,389 -
Fees payable to the Company's auditor in respect of:
Audit of the Company's annual accounts 8,500 6,000
Audit of the Company's subsidiaries 14,000 11,500
Staff costs (see note 21) 1,063,817 1,029,306
Operating leases - land and buildings 80,813 77,596
------------------------------------------------------ ---------- ----------
4 Finance income and expenses
Finance income 2015 2014
GBP GBP
------------------------ ----- -----
Bank interest received 761 406
------------------------ ----- -----
5 Taxation
2015 2014
GBP GBP
---------------------------------------------------- --------- ---------
The tax charge comprises:
Current tax
Prior period adjustment (923) 234
Current year 51,161 104,779
--------- ---------
50,238 105,013
Deferred tax (see note 6)
Current year 17,741 (15,868)
--------- ---------
17,741 (15,868)
Total tax charge in the statement of comprehensive
income 67,979 89,145
Factors affecting the tax charge for the
year
Profit on ordinary activities before taxation
from continuing operations 383,216 504,841
Profit on ordinary activities before taxation
multiplied by standard rate
of UK corporation tax of 20.75% (2014: 23%) 79,517 116,113
Effects of:
Non-deductible expenses 1,204 (1,114)
Depreciation, impairment losses and disposals 7,490 11,863
Capital allowances (7,938) (11,617)
Share-based payment - 3,424
Share options exercised (28,645) (12,167)
Marginal relief (467) (1,723)
Prior period adjustment (923) 234
(29,279) (11,100)
--------- ---------
Current tax charge 50,238 105,013
---------------------------------------------------- --------- ---------
The Group has estimated losses of GBP375,762 (2014: GBP375,762)
available to carry forward against future trading profits. These
losses are in Aeorema Communications plc which is not currently
making taxable profits as all trading is undertaken by its
subsidiary Aeorema Limited.
6 Deferred taxation
2015 2014
GBP GBP
----------------------------------------------------- --------- --------
Property, plant and equipment temporary differences (8,296) (5,174)
Temporary differences 14,700 29,319
--------- --------
6,404 24,145
At 1 July 24,145 8,277
Transfer to Statement of Comprehensive Income (17,741) 15,868
At 30 June 6,404 24,145
----------------------------------------------------- --------- --------
The deferred tax asset is expected to be utilised given the
return to profitability and future trading prospects.
7 Profit attributable to members of the parent company
As permitted by section 408 of the Companies Act 2006, the
parent Company's Statement of Comprehensive Income has not been
included in these financial statements. The retained profit for the
financial year of the holding company was GBP310,444 (2014:
GBP59,674).
8 Earnings per ordinary share
Basic earnings per share are calculated by dividing the profit
or loss attributable to owners of the parent by the weighted
average number of ordinary shares outstanding during the year.
Diluted earnings per share are calculated by dividing the profit
or loss attributable to owners of the parent by the weighted
average number of ordinary shares outstanding during the year plus
the weighted average number of ordinary shares that would have been
issued on the conversion of all dilutive potential ordinary shares
into ordinary shares.
The following reflects the income and share data used and
dilutive earnings per share computations:
2015 2014
GBP GBP
--------------------------------------- ---------- ----------
Basic earnings per share
Profit for the year attributable
to owners of the Company 315,237 415,696
Basic weighted average number of
shares 8,958,044 8,276,021
Dilutive potential ordinary shares:
Employee share options 392,456 850,380
Diluted weighted average number of
shares 9,350,500 9,126,401
--------------------------------------- ---------- ----------
9 Intangible fixed assets
Group Goodwill
GBP
----------------------------- ----------
Cost
At 1 July 2013 2,728,292
At 30 June 2014 2,728,292
At 30 June 2015 2,728,292
Impairment and amortisation
At 1 July 2013 2,363,138
At 30 June 2014 2,363,138
At 30 June 2015 2,363,138
Net book value
At 1 July 2013 365,154
At 30 June 2014 365,154
At 30 June 2015 365,154
----------------------------- ----------
Goodwill arose for the Group on consolidation of its subsidiary
company, Aeorema Limited.
Impairment - Aeorema Limited
Goodwill has been tested for impairment based on its future
value in use. Future value has been calculated on a discounted cash
flow basis using the 2015 budgeted figures as approved by the Board
of Directors extended for a period to 5 years and discounted at a
rate of 10%. It has been assumed that future growth will be at
1.5%. Using these assumptions, which are based upon past
experience, there was no impairment in the year.
Management has assessed the sensitivity of the recoverable
amounts in the key assumptions to be as follows: a five percentage
increase in the discount rate would reduce the recoverable amount
by GBP292,306 and a one percentage fall in future growth would
reduce the recoverable amount by GBP352,473. However, in both cases
there would still be no indication of impairment of goodwill.
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10 Property, plant and equipment
Leasehold
Group land Fixtures, fittings Total
and buildings and equipment
GBP GBP GBP
------------------------ -------------- ------------------- ----------
Cost
At 1 July 2013 24,034 815,199 839,233
Additions - 44,462 44,462
At 30 June 2014 24,034 859,661 883,695
Additions 17,761 26,024 43,785
Disposals (24,034) (583,741) (607,775)
At 30 June 2015 17,761 301,944 319,705
Depreciation
At 1 July 2013 5,201 762,860 768,061
Charge for the year 16,104 32,081 48,185
At 30 June 2014 21,305 794,941 816,246
Charge for the year 4,108 26,600 30,708
Eliminated on disposal (24,034) (568,350) (592,384)
At 30 June 2015 1,379 253,191 254,570
Net book value
At 1 July 2013 18,833 52,339 71,172
At 30 June 2014 2,729 64,720 67,449
At 30 June 2015 16,382 48,753 65,135
------------------------ -------------- ------------------- ----------
11 Non-current assets - Investments
Company Shares in subsidiary
GBP
------------------------------ ---------------------
Cost
At 1 July 2013 3,232,520
Increase in respect of share
based payments 14,889
At 30 June 2014 3,247,409
Increase in respect of share
based payments 14,884
At 30 June 2015 3,262,293
Provision
At 1 July 2013 2,694,213
At 30 June 2014 2,694,213
At 30 June 2015 2,694,213
Net book value
At 1 July 2013 538,307
At 30 June 2014 553,196
At 30 June 2015 568,080
------------------------------ ---------------------
Holdings of more than 20%
The Company holds more than 20% of the share capital of the
following companies:
Shares
Subsidiary undertakings Country of held
registration
---------- ----
or incorporation Class %
------------------------- ------------------ ---------- ----
England and
Aeorema Limited Wales Ordinary 100
England and
Twentyfirst Limited Wales Ordinary 100
------------------------- ------------------ ---------- ----
The principal activity of these undertakings for the last
relevant financial year was as follows:
Company Principal activity
-------------------- ------------------------------------
Provision of business communication
Aeorema Limited services
Twentyfirst Limited Dormant
-------------------- ------------------------------------
12 Trade and other receivables
Group Company
---------------------- ------------------
2015 2014 2015 2014
GBP GBP GBP GBP
---------- ---------- -------- --------
Trade receivables 1,055,898 1,401,432 - -
Related party receivables - - 323,447 353,337
Other receivables 19,230 19,084 - -
Prepayments and accrued income 277,270 55,405 4,688 4,536
1,352,398 1,475,921 328,135 357,873
-------------------------------- ---------- ---------- -------- --------
All trade and other receivables are expected to be recovered
within 12 months of the end of the reporting period. The fair value
of trade and other receivables is the same as the carrying values
shown above.
At the year end, trade receivables of GBP284,944 (2014:
GBP344,096) were past due but not impaired. These relate to a
number of customers for whom there is no significant change in
credit quality and the amounts are still considered recoverable.
The ageing of these trade receivables is as follows:
Group
------------------
2015 2014
GBP GBP
-------- --------
Less than 90 days 284,944 317,802
More than 90 days - 26,294
284,944 344,096
------------------- -------- --------
13 Cash and cash equivalents
Group Company
---------------------- ------------------
2015 2014 2015 2014
GBP GBP GBP GBP
---------- ---------- -------- --------
Bank balances 1,558,453 1,620,895 657,873 734,628
Cash and cash equivalents 1,558,453 1,620,895 657,873 734,628
Cash and cash equivalents
in the statement of cash
flows 1,558,453 1,620,895 657,873 734,628
--------------------------- ---------- ---------- -------- --------
14 Trade and other payables
Group Company
---------------------- ----------------
2015 2014 2015 2014
GBP GBP GBP GBP
---------- ---------- ------- -------
Trade payables 685,375 902,860 2,878 1,656
Related party payables - - 67,355 67,355
Taxes and social security
costs 187,778 301,004 - 1,369
Other payables 33,543 43,842 - -
Accruals and deferred income 556,808 341,301 15,872 19,350
1,463,504 1,589,007 86,105 89,730
------------------------------ ---------- ---------- ------- -------
All trade and other payables are expected to be settled within
12 months of the end of the reporting period. The fair value of
trade and other payables is the same as the carrying values shown
above.
15 Share capital
2015 2014
GBP GBP
------------------------------- ---------- ----------------
Authorised
28,000,000 Ordinary shares
of 12.5p each 3,500,000 3,500,000
Allotted, called up and fully
paid Number Ordinary shares
GBP
------------------------------- ---------- ----------------
At 1 July 2013 8,037,500 1,004,688
Issue of shares 600,000 75,000
At 30 June 2014 8,637,500 1,079,688
Issue of shares 413,000 51,625
At 30 June 2015 9,050,500 1,131,313
------------------------------- ---------- ----------------
See note 22 for details of share options outstanding.
16 Share Premium
Share Premium
GBP
------------------- --------------
At 1 July 2013 -
At 30 June 2014 -
Issue of shares 7,063
At 30 June 2015 7,063
------------------- --------------
Share premium represents the value of shares issued in excess of
their list price.
17 Merger reserve
Merger reserve
GBP
------------------- ---------------
At 1 July 2013 16,650
At 30 June 2014 16,650
At 30 June 2015 16,650
------------------- ---------------
In accordance with section 612 of the Companies Act 2006, the
premium on ordinary shares issued in relation to acquisitions is
recorded as a merger reserve. The reserve is not distributable.
18 Other reserve
Subscriptions received reserve
GBP
--------------------- -------------------------------
At 1 July 2013 -
Exercise of options 19,500
At 30 June 2014 19,500
Allotment of shares (19,500)
At 30 June 2015 -
On 16 June 2014 104,000 share options were exercised and fully
paid for at 18.75p each. The shares were allotted on 2 July 2014.
For the earnings per share note these shares are treated as issued
on the exercise date. The reserve was fully transferred out by 30
June 2015. The reserve is not distributable.
19 Financial commitments
Total future minimum lease payments under non-cancellable
operating lease rentals are payable as follows:
Group Land and Buildings
---------------------
2015 2014
GBP GBP
Not later than one year 91,000 10,417
Later than one year and not later than
five years 106,167 -
---------------------------------------- ----------- --------
20 Directors' emoluments
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The remuneration of Directors of the Company is set out
below.
Salary, Salary,
bonus bonus
or fees or fees Pensions Pensions Total Total
2015 2014 2015 2014 2015 2014
GBP GBP GBP GBP GBP GBP
--------------- --------- --------- --------- --------- -------- --------
P Litten 78,333 65,000 45,993 59,834 124,326 124,834
G Fitzpatrick 46,667 52,885 45,993 59,834 92,660 112,719
M Hale - - - - - -
S Garbutta 7,500 3,000 - - 7,500 3,000
R Owen 7,500 7,500 - - 7,500 7,500
S Quah 132,000 133,000 - - 132,000 133,000
272,000 261,385 91,986 119,668 363,986 381,053
--------------- --------- --------- --------- --------- -------- --------
The share options held by directors who served during the year
are summarised below:
Earliest
Exercise exercise
Name Grant date Number awarded price date Expiry date
-------- ------------ --------------- --------- ---------- --------------
25 April 25 April
S Quah 2013 300,000 16.50p 2016 24 April 2023
-------- ------------ --------------- --------- ---------- --------------
On 21 October 2014, S Quah exercised 300,000 share options with
an exercise price of 12.5p each. The gain on these shares amounted
to GBP132,000. The net value of shares received under the long term
incentive scheme was GBP169,500.
Fees for S Garbutta are charged by Harris & Trotter LLP, a
firm in which he is a member. See note 23.
Some directors were awarded a bonus in the year. S Quah was
awarded a bonus of GBP30,000 (2014: GBP38,000) and P Litten was
awarded a bonus of GBP20,000 (2014: GBP15,000).
21 Employee information
The average monthly number of employees (including directors)
employed by the Group during the year was:
Number of employees 2015 2014
Number Number
-------------------------------- ------- -------
Administration and production 19 19
-------------------------------- ------- -------
The aggregate payroll costs of these employees charged in the
Statement of Comprehensive Income was as follows:
Employment costs 2015 2014
GBP GBP
----------------------- ---------- ----------
Wages and salaries 874,703 821,680
Social security costs 81,972 72,897
Pension costs 92,258 119,840
Share-based payments 14,884 14,889
1,063,817 1,029,306
----------------------- ---------- ----------
22 Share-based payments
The Group operates an EMI Share option scheme for key employees.
Options are granted to key employees at an exercise price equal to
the market price of the Company's shares at the date of grant.
Options are exercisable from the third anniversary of the date of
grant and lapse if they remain unexercised at the tenth anniversary
or upon cessation of employment. The following option arrangements
exist over the Company's shares:
Exercise Number of Number of
Date of grant price Exercise period options 2015 options 2014
From To
--------------- --------- ----------- ------------- -------------- --------------
28 October 28 October 27 October
2004 18.75p 2007 2014 - 9,000
20 July
20 July 2010 12.5p 2013 19 July 2020 - 300,000
25 April 25 April 24 April
2013 16.5p 2016 2023 300,000 300,000
300,000 609,000
--------------- --------- ----------- ------------- -------------- --------------
Details of the number of share options and the weighted average
exercise price outstanding during the year are as follows:
Weighted
Number of Weighted average Number of average exercise
options exercise price options price
2015 2015 2014 2014
GBP GBP
-------------------------- ---------- ----------------- ---------- ------------------
Outstanding at beginning
of the year 609,000 0.15 1,613,000 0.11
Lapsed during the
year - - (300,000) (0.13)
Exercised during
the year (309,000) 0.13 (704,000) (0.13)
Outstanding at end
of the year 300,000 0.17 609,000 0.15
-------------------------- ---------- ----------------- ---------- ------------------
Exercisable at the
end of the year - - 309,000 0.13
-------------------------- ---------- ----------------- ---------- ------------------
The exercise price of options outstanding at the year-end was
GBP0.165 (2014: ranged between GBP0.125 and GBP0.1875) and their
weighted average contractual life was 7.8 years (2014: 7.7
years).
Equity-settled share-based payments are measured at fair value
at the date of grant. The fair value as determined at the grant
date of equity-settled share-based payments is expensed on a
straight line basis over the vesting period, based on the Group's
estimate of shares that will eventually vest. The estimated fair
value of the options is measured using an option pricing model. The
inputs into the model are as follows:
28 October
Grant date 2004 20 July 2010 25 April 2013
Model used Binomial Black-Scholes Black-Scholes
Share price
at grant date 16.25p 8.75p 16.5p
Exercise price 18.75p 8.75p 16.5p
Contractual
life 10 years 10 years 10 years
Risk free rate 6% 0.5% 0.5%
Expected volatility 43% 100% 104%
Expected dividend
rate 0% 0% 0%
Fair value
option 5.9868p 7.779p 14.889p
--------------------- ----------- -------------- --------------
The expected volatility is determined by calculating the
historical volatility of the company's share price over the last
three years. The risk free rate is the office Bank of England base
rate.
The Group recognised the following charges in the Statement of
Comprehensive Income in respect of its share-based payment
plans:
2015 2014
GBP GBP
---------------------------- ------- -------
Share-based payment charge 14,884 14,889
---------------------------- ------- -------
23 Related party transactions
The Group has a related party relationship with its subsidiaries
and its directors. Details of transactions between the Company and
its subsidiaries are as follows:
2015 2014
GBP GBP
----------------------------------- -------- --------
Amounts owed by subsidiaries
Total amount owed by subsidiaries 323,447 353,337
Amounts owed to subsidiaries
Total amount owed to subsidiaries 67,355 67,355
----------------------------------- -------- --------
The compensation of key management (including directors) of the
Group is as follows:
2015 2014
GBP GBP
------------------------------ -------- --------
Short-term employee benefits 302,076 297,687
Post-employment benefits 91,986 119,668
Share based payment expense 14,884 14,889
408,946 432,244
------------------------------ -------- --------
Harris and Trotter LLP is a firm in which S Garbutta is a
member. The amounts charged to the Group for professional services
is as follows:
Harris and Trotter LLP - charged during
the year 2015 2014
GBP GBP
Aeorema Communications plc 15,250 15,000
Aeorema Limited 29,390 22,325
44,640 37,325
------------------------------------------ ------- -------
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