Freepages Group PLC - Interim Results - Part 2
22 Juni 1998 - 9:32AM
UK Regulatory
RNS No 2147v
FREEPAGES GROUP PLC
22nd June 1998
PART 2
Unaudited Consolidated Cash Flow Statements
for the 6 Months to 31 March 1998
6 months 6 months 6 months
ended ended ended
31 Mar 1998 31 Mar 1998 31 Mar 1997
Unaudited Unaudited Unaudited
(Note 1)
$000 #000 #000
Net cash outflow from
operating activities (18,881) (11,262) (5,405)
Return on investments
and servicing of finance
Interest received 1,487 887 169
Interest paid - - (10)
Finance lease interest paid (20) (12) (10)
-----------------------------------
Net cash inflow from returns
on investments and servicing
of finance 1,467 875 149
-----------------------------------
Capital expenditure and
financial investment
Purchase of tangible
fixed assets (1,470) (877) (584)
Purchase of investments (6,647) (3,965) -
Convertible loan to
associate company (2,481) (1,480) -
-----------------------------------
Net cash (outflow)/inflow
from capital expenditure
and financial investment (10,598) (6,322) (584)
-----------------------------------
Net cash (outflow) before
management of liquid
resources and financing (28,012) (16,709) (5,840)
Management of liquid
resources
Cash on short-term deposit 19,385 11,563 (34,750)
-----------------------------------
Net cash (outflow)/inflow
from management of
liquid resources 19,385 11,563 (34,750)
-----------------------------------
Financing
Issue of ordinary shares
less expenses (500) (298) 43,784
Capital element of finance
lease payments (335) (200) (41)
-----------------------------------
Net cash (outflow)/inflow
from financing (835) (498) 43,743
-----------------------------------
Net decrease in cash (9,462) (5,644) (3,153)
===================================
Notes to the Unaudited Consolidated Financial Statements
1.Basis of Preparation
The Group results include four associated companies: the
Freepages/VNU Joint Venture in the Netherlands, the
Freepages/VNU Joint Venture in Belgium, TDS Group Limited
and RequesT (UK) Limited. The results of these
associated companies are included in the Group results
under the equity method.
Whilst the Joint Ventures in the Netherlands and Belgium
operate in local currency, the main currency in which the
Company operates is UK Pounds Sterling. The financial
statements are therefore stated in UK Pounds Sterling(#).
Merely for convenience, the financial statements contain
translations of certain pound sterling amounts into US
Dollars at an exchange rate of $1.6765 = #1.00, being the
Noon Buying Rate of the Federal Reserve Bank of New York
on 31 March 1998.
2.Notes to the Consolidated Balance Sheets
The announcement of results, which is unaudited, has been
prepared on the basis of the accounting policies set out in
the Groups 1996/97 Annual Report and Accounts. The
information presented herein does not constitute statutory
accounts within the meaning of Section 240 of the Companies
Act 1985 (as amended).
Copies of the results for the six months ended 31 March 1998
will be made available to the public for at least 14 days
from the Company Secretary, 12 Lancer Square, London W8 4XA
3.Commitments and Contingencies
The Company is party to various legal proceedings in the
ordinary course of business which it does not believe
will result, in aggregate, in any material adverse effect
on its balance sheet position and results.
4.Movement in Equity Shareholders funds
In November 1997 and December 1997 costs amounting to
#298,000, incurred during the global equity offering and
NASDAQ listing, which was completed on 10 March 1997 have
been written off to share premium.
5.Unaudited Movement in Equity Shareholders Funds
Part 1 of 2
#1 Ordinary Shares Premiums
deferred In excess
shares of par
#000 Number #000 #000
Balance at
30 Sept 1997 200 492,200,098 9,844 55,530
Net loss 3
months to
December 1997 - - - -
Share issuance
costs - - - (298)
-------------------------------------------
Balance at 31
December 1997 200 492,200,098 9,844 55,232
===========================================
Net loss 3 months
to March 1998 - - - -
-------------------------------------------
Balance at 31
March 1998 200 492,200,098 9,844 55,232
===========================================
Part 2 of 2
Shares Merger Retained Total
to be reserve deficit
issued
#000 #000 #000 #000
Balance at 30
Sept 1997 496 (6,218) (27,915) 31,937
Net loss 3
months to
December 1997 - - (6,602) (6,602)
Share issuance
costs - - - (298)
------------------------------------------
Balance at 31
December 1997 496 (6,218) (34,517) 25,037
==========================================
Net loss 3 months
to March 1998 - - (7,286) (7,286)
------------------------------------------
Balance at 31
March 1998 496 (6,218) (41,803) 17,751
==========================================
6.Notes to Cashflow Statement
Reconciliation of Operating Loss to Operating Cashflows
6 months 6 months 6 months
ended ended ended
31 Mar 31 Mar 31 Mar
1998 1998 1997
(Note 1)
$000 #000 #000
Operating Loss (18,983) (11,323) (5,635)
Depreciation and
amortisation charge 553 330 175
(Increase) in debtors
and other current
assets (521) (311) (1,878)
Increase in creditors
and accruals 70 42 1,933
-----------------------------------
Net cash outflow from
operating activities (18,881) (11,262) (5,405)
====================================
7.Notes to the Cash Flow Statement
Reconciliation of net cash flow to movement in net funds
6 months
ended
31 Mar
1998
#000
Decrease in cash in the period (5,644)
Cash inflow from increase in lease financing 212
Cash outflow from decrease in liquid resources (11,563)
--------
Change in net funding resulting from cashflows (16,995)
Net funding at 30 September 1997 33,658
--------
Net funding at 31 March 1998 16,663
========
8.Note to the Cash Flow Statement
Analysis of net funding
At Cash At
30 Sept flow 31 Mar
1997 1998
#000 #000 #000
Cash at bank and in hand 5,111 (5,644) (533)
Cash on deposit 29,484 (11,563) 17,921
Finance leases (937) 212 (725)
-------------------------------
Total 33,658 (16,995) 16,663
===============================
9.NASDAQ Reporting Schedules
The Groups consolidated interim results are prepared in
accordance with generally accepted accounting principles
applicable in the United Kingdom ("UK GAAP") which differs
in certain significant respects from that applicable in the
United States ("US GAAP"). These differences relate
primarily to those items which were set out in the Groups
financial statements for the year ended 30 September 1997.
The approximate effect of the adjustments on net income and
shareholders equity is set out below.
Approximate effect on net income of differences between UK GAAP
and US GAAP
#000 #000
Quarter ended 31 March 1998
Net Loss in accordance with UK GAAP
(7,286)
Adjustments
Acquisition accounting - Goodwill (202)
Revenue Recognition (140) (342)
----- -------
Net Loss in accordance with US GAAP (7,628)
=======
6 months ended 31 March 1998
Net Loss in accordance with UK GAAP (13,888)
Adjustments
Acquisition accounting - Goodwill (404)
Revenue Recognition (140) (544)
----- --------
Net Loss in accordance with US GAAP (14,432)
========
Approximate cumulative effect on Shareholders equity of
differences between UK GAAP and US GAAP
#000 #000
As at 31 March 1998
Shareholders equity in accordance
with UK GAAP 17,751
Acquisition accounting - Goodwill 1,144
Revenue Recognition (140)
Associated undertaking 171 1,175
------ -------
Shareholders equity in accordance
with US GAAP 18,926
=======
Reconciliation of Shareholders Equity in accordance with US GAAP
Shareholders equity at 30 September 1997 33,656
Net Loss for the 3 months ended 31 December 1997 (6,804)
Share issuance costs (298)
-------
Shareholders equity at 31 December 1997 26,554
Net Loss for the 3 months ended 31 March 1998 (7,628)
-------
Shareholders equity at 31 March 1998 18,926
=======
10.Interest Income/Expenses
Net interest increased from #159,000 for the 6 months ended
31 March 1997 to #885,000 for the 6 months ended 31 March
1998. Most of this increase was due to higher cash balances
resulting from the global equity offering in March 1997.
11.Losses from Associated Companies
The Groups share of losses in associated companies for the
6 month period to 31 March 1998 was #3,450,049.
These losses related to the TDS Group Limited (#805,773) (6
months to 31 March 1997 #430,000), the joint venture in the
Netherlands with VNU (Verenigde Nederlandse Uitgeversbedrijven
BV) (#1,725,891), (6 months to 31 March 1997: nil), the joint
venture partnership in Belgium with VNU (#691,012) (6 months
to 31 March 1997: nil) and RequesT (UK) Limited (#227,373)
(6 months to 31 March 1997: nil). The losses of the TDS Group
Limited arose mainly from continued product development.
Losses from Scoot (NL) were due to the cost of the continued
development of the Scoot business in the Netherlands. The losses
from RequesT (UK) Limited arose mainly from the cost of
establishing the marketing technology business in the UK.
The losses from Scoot (B) were due to the establishment of the
service in that territory.
12.Liquidity and Capital Resources
The Group incurred an operating cash flow deficit of
#11,262,000 for the 6 months to 31 March 1998 (#5,092,000
for the corresponding period in 1997). The Company also
invested #4,842,000 in capital expenditure and long term
investments during the same period (#811,000 for the
corresponding period in 1997). These increases reflect the
continued expansion of the business.
13.Disclosure regarding forward looking statements
All statements other than statements of historical fact
included in this report are, or may be deemed to be forward-
looking statements within the meaning of the US securities
laws. Important factors that could cause actual results to
differ materially from those discussed in such forward-
looking statements include, among other things: acceptance
by advertisers and consumers of the Companys classified
information content, services and distribution channels: the
ability of the Company to successfully develop and market
new products and services and distribution channels: the
ability of the Company to respond to changes or increases in
competition: the ability of the Company to manage its
future growth and to increase the number and effectiveness
of its sales staff: the ability of the company to
successfully introduce market sell and deliver its services
in markets outside the UK; the ability of the Company to
manage the risks associated with joint ventures and
potential acquisitions in the UK and abroad; the ability of
the Company to attract and retain necessary technical and
management personnel: and the ability of the Company to
protect its intellectual property rights. All subsequent
written and oral forward-looking statements attributable to
the Company or persons acting on behalf of the Company are
expressly qualified in their entirety by such cautionary
statements.
END
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