RNS No 0571q
FREEPAGES GROUP PLC
15th December 1998
FREEPAGES GROUP PLC
("Freepages" or the "Company")
Unaudited Preliminary results for the 12 month period ended 30
September 1998
Freepages, the UK interactive branded services company operating
under the Scoot trading name, announces unaudited preliminary
results for the year ended 30 September 1998. On 25 August 1998, the
Company announced its move to the Official List of the London Stock
Exchange.
* Revenues for the 12 months to 30 September 1998 were #18.6
million, up 21 per cent. compared to last year.
* Net loss per share amounted to 5.4 pence for the year compared
to last year 3.4 pence loss.
* Telephonic usage grew by 132 per cent. and Internet usage by 456
per cent. compared to last year.
* The underlying business is beginning to take advantage of the
leverage capabilities within the branded Scoot Network and the
greater visibility of its internet presence.
* In November 1998 the Company started to test its first mid-call
transfer product with a small group of corporate clients and
initial results are encouraging.
* In December 1998 the Company announced a new proposed
partnership arrangement with VNU for Scoot Netherlands and an
internet partnership with CompuServe.
* The Company will be seeking in due course the approval of its
shareholders to change the Companys name from Freepages Group plc
to Scoot, reflecting the uniform international brand it is
building within its trading subsidiaries.
Commenting on todays results, Robert Bonnier CEO said:
"1998 was in many ways a transition period for the Company. We
rebranded our business to Scoot, which proved to be one of our most
important decisions to date. In addition, the Company is proposing
to re-align its Scoot (NL) venture with VNU providing an important
benchmark valuation. In order to improve the economics of the
classified directory product and capitalise in the medium term on
the advantages of rolling contracts, Scoot (UK) further consolidated
its classified sales force. We are building up a complementary
range of businesses, which we believe should take advantage of our
existing Scoot network and extend the classified service with
substantially lower development costs for the Company. Our
management team remains focused on achieving this and continuing to
build Scoot into a household name whilst seeking to ensure
operational costs comprise an appropriate proportion of revenues
generated."
For further information contact:
Freepages Group plc
Robert Bonnier, CEO
Ronald Dorjee, CFO 0171 368 3900
Miranda Cleverdon, MD Corporate Communications
Buchanan Communications Limited 0171 466 5000
Richard Oldworth
Richard Darby
Review of Scoot (UK) Operations
To reflect the changing nature of the business moving forward, the
Company has established the following key performance indicators:
Q4 Q1 Q2 Q3 Q4 4Qtr Growth
1997 1998 1998 1998 1998 Growth 4Qtr-on
Year- on- 3Qtr
Year 1998
Classified
Revenue #m 4.1 3.8 4.1 4.5 4.6 12% 2%
Subscribers * 13,400 20,200 26,300 30,400 - 15%
Churn (%) - - 36% 21% 17% - 23%
EBITDA #m (3.7) (5.7) (4.2) (3.6) (3.4) 8% 6%
Telephonic 2.6 3.4 4.2 4.8 5.0 92% 4%
usage (m)
Internet
Revenue #m 0.0 0.0 0.1 0.2 0.4 - 100%
Subscribers * - 900 1,300 2,200 3,400 - 55%
Churn - - - - - - -
EBITDA #m ** (0) (0.1) (0.1) (0.0) 0.1 - -
Internet usage 3.4 6.7 12.3 16.5 19.0 456% 15%
(m)
Transactions
Mid-call - - - - - - -
transfer
Memberships - - - - 50 - -
#000
Telecoms - - - - - - -
EBITDA - - - - - - -
Other
Licensing - - - 200 80 - -
#000
Set-up - 750 - - - - -
#000
Other 350 - - - -
#000
EBITDA
* Net paying subscribers at the end of the period are rounded down
to nearest 100
** Internet costs include only production and network related
costs, and does not include other SG&A costs.
Classified
In August the Company introduced new contracts for its classified
business - for an initial fixed period and thereafter on a rolling
basis - rather than the previous fixed twelve-month arrangements.
It is expected that this change will substantially reduce the costs
of servicing Scoot classified advertisers thereby increasing margins
on each contract. The intention is that the Classified business will
increasingly take on the characteristics of an annuity-type business
where high initial sales costs are offset by ongoing renewal
revenues generated at much lower cost. Following the initial fixed
period either party can terminate the rolling contract at 28 days
notice.
In order to continue to improve the effectiveness of the classified
sales force and capitalise in the medium term on the advantages of
rolling contracts the Company further consolidated the size of its
salesforce. The sales force is now structured into five profit
centres: Glasgow (field/tele), Leeds (field), Manchester
(field/tele), Basingstoke (field) and Harrow (field/tele). At the
end of the period 200 sales executives were employed. The Company
continues to evaluate the size of the sales force depending on
availability of new business opportunity, quality of sales
management, churn rates, introduction of new products and economic
circumstances. Corporate Sales remains primarily focused on selling
the directory and mid-call transfer products and are now included
within the Classified analysis above.
Telephonic usage increased by 4 per cent. in the seasonally weaker
4th quarter compared to the 3rd quarter. In the 4th quarter 0800
usage represented 73 per cent of calls and mobile usage 27 per cent.
During the year telephonic usage increased by 132 per cent as a
result of improved brand awareness, additional service features and
repeat usage.
Internet
Scoots service application, which to date has been primarily
telephone based, is expected to benefit increasingly from the
convergence of technology and the consequential opening up of
additional interactive channels with higher user and subscriber
functionality, better brand visibility and significantly lower
operating costs. The Company intends to continue to expand this
area of operation aggressively through product and service
enhancements, dedicated marketing and new partnership agreements.
This approach has so far resulted in an increase in revenue from
Internet sales (homepages, banners, hot links and more recently E-
Commerce) at substantially lower operating cost and churn rates.
Internet usage continued to increase rapidly in the seasonally
weaker 4th quarter compared to the 3rd quarter. In the 4th quarter
growth amounted to 15 per cent compared to the 3rd quarter. During
the year Internet usage increased by 456 per cent. as a result of
improved brand awareness, additional service features and repeat
usage.
Transactions
The Company believes it is in a strong position to offer a range of
transaction facilities through its telephonic and Internet business.
This is expected to make the service offered more accountable and
therefore is expected to achieve a higher transaction margin for
Scoot. From a user perspective, Scoot is expected to provide a back
to back purchasing solution with its corporate and later classified
advertisers. The Company is currently in negotiations with a number
of telecom companies to provide a back office and clearing mechanism
to enable it to enter into direct transactions with its classified
advertisers. Over time the Company anticipates receiving listing,
transfer, conversion and retention fees allowing the Company to
focus increasingly on segmentation and generation of targeted usage.
To create a stronger relationship with its users, the Company is
developing a range of Scoot-branded membership products, which will
further differentiate its service and extend its relationship with
its corporate and classified advertisers. The first initiative is
anticipated to be regionally test marketed in the 2nd quarter 1999
and rolled out nationally by the end of 1999.
Through the 0800 and mobile telephone application the Company
intends to generate additional revenues by connecting a call through
to an advertiser who has agreed and installed a Scoot branded 0800
number at their premises. If the Company successfully concludes its
negotiations with the telecom and/or facility management companies
mentioned above, it anticipates it will also receive a percentage of
the billable minutes generated through the 0800 number.
Other
For example, following the completion of the proposed transaction
with VNU, described below, the Company under a licensing agreement
will receive a percentage of accounting revenue of Scoot (NL) for
providing the venture with the Scoot brand, technology, new product
development and ongoing support and training. In the event that new
geographical ventures are established with a partner the Company
expects to charge a set up fee to adopt its Scoot business model and
technology for local requirements and to co-ordinate the initial set
up of the business venture.
Scoot Netherlands
Under the terms of the VNU Agreement, announced on 9 December (which
is currently subject to contract and independent shareholder
approval), Freepages will retain a 25 per cent. equity interest and
VNU will hold a 75 per cent. equity interest in Scoot (NL). Under
the agreement, Freepages will receive an initial upfront payment of
NLG 10 m (approximately # 3.3m) and during the next three years
further payments of up to NLG 14 m (approximately #4.6m) subject to
certain performance criteria being achieved by Scoot (NL).
The Directors believe that this provides Freepages with an optimal
solution to capitalise on VNUs market position in the Netherlands
and to harvest the potential synergy with VNU WD following the
completion of the set up phase of the Scoot venture. Freepages
remains fully committed to the exciting development of Scoot (NL) by
retaining a substantial equity interest and through the receipt of
deferred payments and licensing fees.
Scoot Belgium
Scoot (B) continued to develop successfully and weekly revenues are
higher compared to Scoot (NL). Trends in revenue and usage rates as
well as brand recognition continue to develop positively.
Strategic Plan
Freepages aims to build a uniformly branded pan-European Scoot
network of interactive services early in the new millennium. Its
business model is based on building and linking proprietary consumer
behaviour and value added business database applications that are
adopted for local, national and international use.
These channels already include the Internet and are expected to move
into digital TV and in the next few years to intranets, extranets
and UMTS (Universal Mobile Telecommunication System). These
channels will account for a significant proportion of Scoots usage
by the end of 1999.
Freepages is building a complementary range of businesses, which
should capitalise upon its existing network and extend its
classified service with substantially lower development costs for
the Company. These complementary services already include consumer
information and membership and are expected to move into
transactions and vertical market products.
The Company intends to adopt three basic approaches towards
international expansion:
i) Intellectual capital minority interest: In return for an equity
participation and an ongoing licensing fee Freepages will provide
the intellectual capital of Scoot, its business model, technology
and brand (controlled in accordance with the Scoot Business
Guidelines) and local partners will provide the primary financial
investment.
ii) Majority interest: In countries where Freepages sees a strategic
advantage in owning the majority of the local Scoot, it will provide
the primary source of financial investment for the business. A
minority partner (including financial partners) may be introduced if
appropriate.
iii) Franchise: Freepages can franchise the Scoot business format to
a local partner - the franchisee will manage and operate the local
Scoot in accordance with the Scoot Business Guidelines. Freepages
will assist with the set-up of the infrastructure and offer
continuous uniform support and international development. The
franchisee will pay a set-up fee and ongoing franchisee fees
calculated as a percentage of revenue. This approach would
initially be aimed at countries outside Europe.
Financial Results
Total revenue for the three month period ended 30 September 1998
grew to #5.1 million compared to #4.9 million for the prior quarter,
representing an increase of 4 per cent. In comparison to the 1997
4th quarter, revenues increased by 13 per cent.
The quarterly classified churn figure was 17 per cent. during the
4th quarter compared to 21 per cent. in the previous quarter. This
figure is calculated by taking the number of net subscribers at the
beginning of the quarter compared to all subscribers that cancel or
do not renew the service during the period.
The Scoot business is characterised by certain seasonal factors like
holiday periods and advertiser commitments (which tend to be higher
in the first half of the year). The Company is subject to certain
discretionary expenditures such as marketing, product development,
capital expenditures and the costs associated with the introduction
of additional partnerships. The overall trends in revenues and
cashflow continue to develop positively but remain subject to the
aforementioned factors, which will result in net cash outflows
during certain periods of the year.
The operating loss (including international costs), excluding the
Groups share of the joint ventures and associated companies
operating loss, amounted to #3.9 million for the period with a loss
per share of 0.7p. The Scoot (UK) operating cost included a number
of incidental items comprising mainly redundancy costs amounting to
a total of #0.4m. Net cash outflow from operating activities and
investments amounted to #27.2 million for the 12 months ended that
date. At the end of the period the net cash balance was #6.8
million and net assets totalled #13.8 million.
Key Financial Statistics
#m Q4 Q1 Q2 Q3 Q4 4Qtr Growth
1997 1998 1998 1998 1998 Growth 4Qtr-on
Year-on- 3Qtr
Year 1998
Total
Revenue 4.5 4.5 4.1 4.9 5.1 13% 4%
SG& A* 6.9 6.7 6.8 6.8 7.0 1% 3%
Marketing 0.9 2.8 1.5 1.4 1.3 44% (7%)
EBIT UK (3.3) (5.0) (4.3) (3.2) (3.2) 3% -
(UK EBIT- (73%) (111%) (105%) (65%) (61%)
revenue
ratio) **
International 0.4 0.7 1.3 1.0 0.7 75% (30%)
Associates
(expense)
Scoot (NL) (1.2) (0.7) (1.0) (0.6) (0.9) (25%) 50%
Scoot (B) - (0.4) (0.3) (0.9) (1.5) - 67%
TDS Group (0.2) (0.2) (0.6) (0.3) (0.5) 150% 67%
RequesT - (0.1) (0.1) (0.1) (0.1) - -
Net cash 34.6 24.4 17.4 12.6 6.8 (80%) (46%)
*SG&A includes cost of sales and excludes marketing and
international costs. Marketing and international costs are
represented separately above.
**UK EBIT (excluding international costs) divided by total
accounting revenue generated during the period.
Unaudited Consolidated Income Statement
for the 12 Months to 30th September 1998
3 3 3 12 12 12
months months months months months months
ended ended ended ended ended ended
30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep
1998 1998 1997 1998 1998 1997
(Note 1) (Note 1)
$'000 #000 #'000 $'000 #'000 #'000
Sales Group &
Share of Joint
Ventures 10,387 6,112 4,810 36,245 21,327 15,643
Less Share of
Joint Ventures
Sales (1,686) (992) (263) (4,652) (2,737) (284)
Sales 8,701 5,120 4,547 31,593 18,590 15,359
Operating costs
Cost of Sales (114) (67) (305) (2,185) (1,286) (804)
Selling, General
and Administrative
Expenses
- ongoing (15,148) (8,914) (7,907) (62,302) (36,661) (26,081)
- exceptional - - (2,250) - - (2,250)
Operating
Loss (6,561) (3,861) (5,915) (32,894) (19,357) (13,776)
Share of Losses
of Joint
Ventures (4,132) (2,431) (1,159) (11,062) (6,509) (1,675)
Associated
Companies (1,061) (625) (219) (3,467) (2,040) (904)
Loss on disposal
of fixed assets (8) (5) - (8) (5) -
Net Interest
Income 400 235 612 2,287 1,345 1,385
Loss before
taxes on
income (11,362) (6,687) (6,681) (45,144) (26,566) (14,970)
Taxes on income - - - - - -
Net Loss (11,362) (6,687) (6,681) (45,144) (26,566) (14,970)
Finance cost of
non-equity
shares - - - - - -
Retained loss
for the period
attributable to
equity
shareholders (11,362) (6,687) (6,681) (45,144) (26,566) (14,970)
Loss per
share ($0.0230) (#0.0135)(#0.0136)($0.0917)(#0.0540) (#0.0338)
Weighted average
no of shares
(millions) 492.3 492.3 492.2 492.2 492.2 443.1
Consolidated Balance Sheets at 30th September 1998
30 Sep 30 Sep 30 Sep
1998 1998 1997
Unaudited Unaudited Audited
(Note 1)
$000 #000 #000
Assets
Current Assets
Cash at bank and in hand 11,509 6,772 34,595
Accounts receivable 1,755 1,033 2,376
Prepaid expenses 1,215 715 753
Other current assets 5,404 3,180 1,075
Total Current Assets 19,883 11,700 38,799
Fixed Assets
Property, plant and equipment 5,454 3,209 2,507
Intangible assets 1,329 782 828
Share of Net Assets of Joint
Ventures
Gross Assets 4,865 2,863 1,067
Gross Liabilities (6,341) (3,731) (1,385)
Investment in associated
companies (1,689) (994) 295
Total Investment (3,165) (1,862) (23)
Total Assets 23,501 13,829 42,111
Liabilities and shareholders
equity
Current Liabilities
Accounts payable and accrued
expenses 8,115 4,776 6,102
Deferred income 3,754 2,209 1,659
Other taxation including
social security 1,960 1,153 1,665
Total current liabilities 13,829 8,138 9,426
Other long term liabilities 940 553 748
Total Liabilities 14,769 8,691 10,174
Shareholders equity
Deferred Shares 340 200 200
Ordinary shares fully paid
par value 2p per share:
492,200,098 shares at 30 June
1998 (492,200,098 shares at
30 June 1997) 16,737 9,848 9,844
Premiums in excess of par
value 93,969 55,292 55,530
Shares to be issued 843 496 496
Merger reserve (10,567) (6,218) (6,218)
Retained deficit (92,590) (54,480) (27,915)
Shareholders equity 8,732 5,138 31,937
Total liabilities and
shareholders equity 23,501 13,829 42,111
Unaudited Consolidated Cash Flow Statement
for the 12 Months to 30th September 1998
12 months 12 months 12 months
ended ended ended
30 Sep 1998 30 Sept 30 Sep
Unaudited 1998 1997
(Note 1) Unaudited Audited
$000 #'000 #000
Net cash outflow from operating (32,852) (19,330) (10,906)
activities
Return on investments and
servicing of finance
Interest received 2,201 1,295 1,396
Interest paid (3) (2) (11)
Finance lease interest paid (65) (38) (10)
Net cash inflow from returns on
investments and
servicing of finance 2,133 1,255 1,375
Capital expenditure and
financial investment
Purchase of tangible fixed
assets (2,245) (1,321) (926)
Purchase of intangible fixed
assets (85) (50) (600)
Sale of tangible fixed assets 268
Purchase of investments (10,637) (6,259) (1,976)
TDS Loan (2,549) (1,500) -
Net cash outflow from capital
expenditure and
financial investment (15,516) (9,130) (3,234)
Net cash outflow before
management of
liquid resources and
financing (46,235) (27,205) (12,765)
Management of liquid resources
Cash on short-term deposit 39,026 22,963 (29,484)
Net cash outflow from
management of
liquid resources 39,026 22,963 (29,484)
Financing
Issue of ordinary shares less
expenses (398) (234) 43,773
Repayment of short term
borrowings - - -
Capital element of finance
lease payments (653) (384) (157)
Net cash outflow from financing (1,051) (618) 43,616
Net (decrease) in cash (8,260) (4,860) 1,367
Notes to the Unaudited Consolidated Financial Statements
The Fourth Quarter Results, which are unaudited, have 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 Fourth Quarter are being sent to shareholders and are
available to the public from the Company Secretary, Information
House, Parkway Court, Oxford OX4 2JY.
1. Basis of Preparation
The Group results include the four associated companies: the
Freepages VNU Joint Ventures in the Netherlands and in Belgium, TDS
Group Limited and RequesT Limited. The results of these associated
companies are included in the Group results. All four are accounted
for 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 (#). For the purposes of this statement:
Dutch Guilder amounts are translated into Sterling at an exchange
rate of NLG 3.2053 = #1; Belgian Franc amounts are translated into
Sterling at an exchange rate of BFr 58.6123 = #1.
Merely for convenience, the financial statements contain
translations of certain pound sterling amounts into US Dollars at an
exchange rate of $1.6995 = #1.00, being the Noon Buying Rate of the
Federal Reserve Bank of New York on 30 September 1998.
2. Notes to the Consolidated Balance Sheets
The figures for the year ended 30 September 1997 are an extract from
the Groups Annual Report and Accounts which have been delivered to
the Registrar of Companies.
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. Unaudited Movement in Equity Shareholders Funds
#1 Ordinary Shares Premiums
Deferred Number in
shares excess
of par
#000 #'000 #000
Balance at 30 September 200 492,200,098 9,844 55,530
1997
Net Loss 3 months to
December 1997
Cost of Share Issues (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
Net Loss 3 months to
June 1998 - - - -
Balance at 30 June 1998 200 492,200,098 9,844 55,232
Net Loss 3 months to
September 1998
Shares Issued 200,000 4 60
Foreign Exchange - - - -
Adjustment
Balance at 30 September
1998 200 492,400,098 9,848 55,292
Shares to Merger Retained Total
be Reserve Deficit
issued #000 #000 #000
#000
Balance at 30 September
1997 496 (6,218) (27,915) 31,937
Net Loss 3 months to
December 1997 (6,602) (6,602)
Cost of Share Issues (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 496 (6,218) (41,803) 17,751
1998
Net Loss 3 months to (5,990) (5,990)
June 1998
Balance at 30 June 1998 496 (6,218) (47,793) 11,761
Net Loss 3 months to
September 1998 (6,428) (6,428)
Shares Issued 64
Foreign Exchange
Adjustment (259) (259)
Balance at 30 September 496 (6,218) (54,480) 5,138
1998
5. Notes to Cashflow Statement
12 months 12 months 12 months
ended ended ended
30 Sept 30 Sept 30 Sept
1998 1998 1997
(Note 1)
$000 #000 #000
Operating Loss (33,401) (19,357) (13,776)
Depreciation and
Amortisation Charge 1,207 710 379
(increase) in debtors and
other current assets 1,575 631 (3,011)
(decrease)/increase in
creditors and accrual (2,233) (1,314) 5,502
Net cash outflow from
operating activities (32,852) (19,330) (10,906)
6. Notes to the Cash Flow Statement
Reconciliation of net cash flow to movement in net funds
12 months
ended
30 Sept
1998
#000
Decrease in cash in the period (4,860)
Cash outflow from decrease in lease financing 384
Cash outflow from decrease in liquid resources (22,963)
Change in net funding resulting from cashflows (27,439)
Amount due in respect of VNU Joint Venture -
Movement in net funding in the period (27,439)
Net funding at 30 September 1997 33,658
Net funding at 30 September 1998 6,219
7. Note to the Cash Flow Statement
Analysis of net funding
At Cash At
30 Sept flow 30 Sep
1997 1998
#000 #000 #000
Cash at bank and in hand 5,111 (4,860) 251
Cash on deposit 29,484 (22,963) 6,521
Finance leases (937) 384 (553)
Total 33,658 (27,439) 6,219
8. Nasdaq Reporting Schedules (requires updating for
Revenue Recognition only)
US GAAP Reconciliation
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 those 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 and US GAAP
#000
Quarter ended 30 September 1998
Net Loss in accordance with UK GAAP (6,687)
Adjustments
Acquisition accounting - Goodwill
(202)
Net Loss in accordance with US GAAP (6,889)
12 months ended 30 September1998
Net Loss in accordance with UK GAAP (26,566)
Adjustments
Acquisition accounting - Goodwill
(808)
Net Loss in accordance with US GAAP (27,374)
Approximate cumulative effect on Shareholders equity of
differences between UK and US GAAP
As at 30 September 1998
#000 #000
Shareholders Equity in accordance with UK 5,138
GAAP
Acquisition accounting - Goodwill 740
Associated undertaking 171 911
Shareholders Equity in accordance with US
GAAP 6,049
Reconciliation of Shareholders Equity in
accordance with US GAAP
#000
Shareholders Equity at 30 September 1997 33,656
Net Loss for the 3 months ended 31 December
1997 (6,804)
Cost of Share Issue (298)
Shareholders Equity at 31 December 1997 26,554
Net Loss for the 3 months ended 31 March 1998 * (7,488)
Shareholders Equity at 31 March 1998 19,066
Net Loss for the 3 months ended 30 June 1998 * (6,192)
Shareholders Equity at 30 June 1998 12,874
Net Loss for the 3 months ended 30 September
1998 * (6,889)
Shares Issued 64
Shareholders Equity at 30 September 1998 6,049
* Restated to reflect an alignment of the joint
ventures accounting policies under UK GAAP.
9. Interest Income/Expenses
Net interest decreased from #1,385,000 for the 12
months ended 30 September 1997 to #1,345,000 for the
12 months ended 30 September 1998.
10.Losses from Associated Companies
The Groups share of losses in joint ventures and
associated companies for the 12 months period to 30
September 1998 was #8,548,986.
These losses related to TDS Group Limited ("TDS")
(#1,554,788) (12 months to 30 September 1997
#903,649), the joint venture partnership in the
Netherlands with VNU (Verenigde Nederlandse
Uitgeversbedrijven BV) (#3,328,145), (12 months to
30 September 1997: #1,694,977), the joint venture
partnership in Belgium with VNU (#3,181,075) (12
months to 30 September 1997: nil) and RequesT Limited
(#484,979) (12 months to 30 September 1997: nil).
The losses of TDS 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 Belgium were due to the
establishment of the service in that territory.
11.Liquidity and Capital Resources
The Company incurred an operating cash flow deficit
of #19.3 million for the 12 months to 30 September
1998 (#10.9 million for the corresponding period in
1997). The Company also invested #9.13 million in
capital expenditure and additional investments in
associates during the same period (#3,234,000 for the
corresponding period in 1997). These increases
reflect the continued expansion of the business.
12. 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; the
ability of the Company to protect its intellectual
property rights; the ability of the Company to
complete the transaction proposed by VNU and the
ability of the Company to raise financing, at
attractive terms as and when necessary, to fund for
future growth and expansion. 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
FR FCPCQODDKOBD
Freeplay Energy (LSE:FRE)
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Freeplay Energy (LSE:FRE)
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