Final Results
29 Juni 2009 - 8:00AM
UK Regulatory
TIDMUPS
RNS Number : 6213U
Upstream Marketing and Comms Inc.
29 June 2009
Upstream Marketing and Communications Inc.
("Upstream" or "the Company")
Final Results
Chairman's and Chief Executives report
The Board is pleased to report Upstream Marketing and Communications Inc.'s
audited results for the year ended
31 December 2008.
Highlights
* Revenue up 33% to US$6.158 million (2007: US$4.613 million);
* Total assets up from US$1.734 million to US$2.190 million, representing a 26%
increase.
In the year ended 31 December 2008, Upstream Marketing and Communications Inc.
reversed the previous year's loss-making performance by controlling costs and
increasing year-on-year revenue by 33%, which also improved cash flow. In
addition, the Group disposed of a business unit, which resulted in a one time
gain that strengthened the Group's balance sheet.
Upstream is the holding company for six wholly-owned trading subsidiaries that
form an Asia-Pacific-wide marketing and corporate communications services
network. Upstream works with multinational and Asia-based companies to help
maximise their business opportunities in the region through the use of public
relations, public affairs, digital and other communications techniques. Upstream
has offices in Beijing, Hong Kong, Shanghai, Singapore, and Sydney as well as a
branded affiliate in Tokyo and other partners throughout the region and
globally.
All advance indications were that 2008 would be an exceptional year, with high
international interest in communications in China resulting from the 2008 Summer
Olympics in Beijing. In addition to strong organic growth in the Company's China
operation as a result of this, a multi-month one-off assignment from the Greek
Ministry of Culture to promote the Cultural Year of Greece in China timed for
the Olympic year generated significant revenue, amounting to US$ 0.728 million.
During 2008 we were also successful in winning and expanding a number of client
relationships around the region including Akamai, American Standard, BMB Group,
Capgemini, CommunicAsia, Convergys, HTC, Legend Capital, NeuStar, Tyco Flow
Control, and VP Bank.
In May 2008, Upstream's database distribution business Asia Pacific
Communications Services (formerly Media Services Asia) sold certain of its
assets to one of its key customers MarketWire Inc., resulting in a profit on
disposal of US$ 0.350 million.
Revenues for the year were US$ 6.158 million, representing a 33% increase over
the previous year. Upstream posted a net profit for the year of US$ 0.433
million, which represents a US$ 1.076 million increase from the Group's net loss
of US$ 0.643 million in 2007.
The Group issued a trading update in January 2009, highlighting that in the
period since the interim results to 30 June 2008 were announced, there had been
a significant slowdown in revenue as existing clients and other prospects held
back or reduced their usual communications budgets for Q4 2008. The trading
update also flagged that the sales pipeline indicates that this trend will
continue throughout 2009 and the Group's experience during the first six months
of the financial year indicate that the worldwide recession has had a knock-on
effect in Asia Pacific, particularly in respect of the Group's multinational
clients.
Since this time, the Board has commenced the implementation of a number of steps
that it believes should enable the directors to deal with the challenging
economic environment faced by the Group. These steps included a scaling back of
the Group's business plan and a reduction in the Group's cost base primarily
through a decrease in headcount across the Group through attrition and the
removal of replacements and future hires from the budget. In addition,
management made efforts to reduce operational expenses, monitor closely the
ongoing cashflow requirements of the Group, and stepped up marketing efforts
with a view to supporting revenue generation.
Current Trading and Outlook
The Group's outlook remains conservative compared to the 2008 Beijing Olympic
year and one-off gain from the sale of the Asia news release distribution
business. While GDP growth in the Asia Pacific region is forecast to be stronger
than Europe or the U.S., many of the Group's clients budgets originate in the
U.S. and Europe and their financial decisions are expected to continue to be
affected by the global downturn for the foreseeable future.
The Group's pipeline of new business contains many interesting international and
Asia-Pacific specific opportunities. These span the technology, media and
telecommunications practice, the corporate and financial practice, and to a
lesser extent, the consumer practice, which seems to be have most affected by
the global economic downturn.
In addition to seeking new business, Upstream is focused on building its
existing client relationships by expanding the scope of work provided to include
other offices and practice areas across the region and creating value from new
and existing international partnerships.
The Directors anticipate a challenging business environment ahead for the
remainder of 2009, as the international economic situation appears to continue
to negatively impact clients' willingness to invest in marketing and
communications. That being said, the Group's focus on delivering marketing and
corporate communications services in growing Asia-Pacific markets remains
strategically promising.
In 2008, no acquisitions were achieved, and the bulk of the Group's growth was
organic. The Directors are continuously reviewing opportunities to adjust the
Group's business model to meet economic opportunity and the evolving trading
environment.
David Ketchum, Chief Executive Shahed Mahmood, Chairman
29 June 2009
Enquiries:
David Ketchum
+852 2973 0222
david@upstreamasia.com
www.aboutupstream.com
James Harris/Angela Peace
Strand Partners Limited
+44 (0)20 7409 3494
Claire Louise Noyce/Stephen Austin
Hybridan LLP
+44 (0)20 3159 5085
Consolidated Income Statement
+----------------------------------------------+---------+------------+-----------+
| Continuing operations | Note | 2008 | 2007 |
+----------------------------------------------+---------+------------+-----------+
| | | US$'000 | US$'000 |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| Turnover | | 9,268 | 5,514 |
+----------------------------------------------+---------+------------+-----------+
| Material cost of sales | | (3,110) | (901) |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| Gross profit/revenue | 4 | 6,158 | 4,613 |
+----------------------------------------------+---------+------------+-----------+
| Other income | 5 | 472 | 65 |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| Total income | | 6,630 | 4,678 |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| Other operating expenses | | (5,948) | (4,977) |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| Profit / (Loss) from operations prior to | | 682 | (299) |
| share based payment charge | | | |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| Share based payment charge | | (103) | (329) |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| Profit / (Loss) from operations | 6 | 579 | (628) |
| | | | |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| Finance income | | 8 | 3 |
+----------------------------------------------+---------+------------+-----------+
| Finance costs | | (21) | (18) |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| Profit / (Loss) before taxation | | 566 | (643) |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| Taxation expense | 7 | (133) | - |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| Profit / (Loss) for the year | | 433 | (643) |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| | | | |
+----------------------------------------------+---------+------------+-----------+
| Total and continuing earnings/ (loss) per | | US cents | US cents |
| share attributable to the equity holders of | | | |
| the Company | | | |
+----------------------------------------------+---------+------------+-----------+
| - Basic | 8 | 0.32 | (0.47) |
+----------------------------------------------+---------+------------+-----------+
| - Diluted | 8 | 0.29 | (0.47) |
+----------------------------------------------+---------+------------+-----------+
Consolidated Balance Sheet
+--------------------------------------+-------+--------------+--------------+
| |Notes | 2008 | 2007 |
+--------------------------------------+-------+--------------+--------------+
| | | US$'000 | US$'000 |
+--------------------------------------+-------+--------------+--------------+
| ASSETS | | | |
+--------------------------------------+-------+--------------+--------------+
| | | | |
+--------------------------------------+-------+--------------+--------------+
| Non-current assets | | | |
+--------------------------------------+-------+--------------+--------------+
| Property, plant and equipment | 9 | 150 | 180 |
+--------------------------------------+-------+--------------+--------------+
| Intangible assets | 10 | 86 | 198 |
+--------------------------------------+-------+--------------+--------------+
| | | 236 | 378 |
+--------------------------------------+-------+--------------+--------------+
| | | | |
+--------------------------------------+-------+--------------+--------------+
| Current assets | | | |
+--------------------------------------+-------+--------------+--------------+
| Trade and other receivables | 11 | 1,235 | 1,092 |
+--------------------------------------+-------+--------------+--------------+
| Cash and cash equivalents | | 719 | 264 |
+--------------------------------------+-------+--------------+--------------+
| | | | |
+--------------------------------------+-------+--------------+--------------+
| | | 1,954 | 1,356 |
+--------------------------------------+-------+--------------+--------------+
| Total assets | | 2,190 | 1,734 |
+--------------------------------------+-------+--------------+--------------+
| | | | |
+--------------------------------------+-------+--------------+--------------+
| LIABILITIES | | | |
+--------------------------------------+-------+--------------+--------------+
| | | | |
+--------------------------------------+-------+--------------+--------------+
| Current liabilities | | | |
+--------------------------------------+-------+--------------+--------------+
| Trade and other payables | 12 | 1,104 | 1,404 |
+--------------------------------------+-------+--------------+--------------+
| Deferred income | | 118 | 55 |
+--------------------------------------+-------+--------------+--------------+
| Current tax provision | | 162 | 25 |
+--------------------------------------+-------+--------------+--------------+
| Bank loan | | 23 | - |
+--------------------------------------+-------+--------------+--------------+
| | | 1,407 | 1,484 |
+--------------------------------------+-------+--------------+--------------+
| Non-current liabilities | | | |
+--------------------------------------+-------+--------------+--------------+
| Deferred taxation | 13 | 22 | 38 |
+--------------------------------------+-------+--------------+--------------+
| Bank loan | | 4 | - |
+--------------------------------------+-------+--------------+--------------+
| | | | |
+--------------------------------------+-------+--------------+--------------+
| Total liabilities | | 1,433 | 1,522 |
+--------------------------------------+-------+--------------+--------------+
| | | | |
+--------------------------------------+-------+--------------+--------------+
| EQUITY | | | |
+--------------------------------------+-------+--------------+--------------+
| | | | |
+--------------------------------------+-------+--------------+--------------+
| Share capital | 14 | 636 | 745 |
+--------------------------------------+-------+--------------+--------------+
| Reserves | | 121 | (533) |
+--------------------------------------+-------+--------------+--------------+
| Equity attributable to equity | | 757 | 212 |
| holders | | | |
| of the Company and total equity | | | |
+--------------------------------------+-------+--------------+--------------+
| | | | |
+--------------------------------------+-------+--------------+--------------+
| Total equity and liabilities | | 2,190 | 1,734 |
+--------------------------------------+-------+--------------+--------------+
Consolidated statement of changes in equity
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| | Share | Shares | Share | Capital | Foreign | Retained | Total |
| | capital | to be | premium | reserve | exchange | earnings | equity |
| | | issued | | | reserve | | |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| | | | | | | | |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| At 1 January 2007 | 617 | - | 4,139 | 6,547 | 13 | (10,940) | 376 |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| Exchange difference | - | - | - | - | (5) | - | (5) |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| Loss for the year | - | - | - | - | - | (643) | (643) |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| Total recognised | - | - | - | - | (5) | (643) | (648) |
| income and expense | | | | | | | |
| for the year | | | | | | | |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| Share issue | 5 | 113 | 104 | - | - | - | 222 |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| Share issue costs | - | - | (67) | - | - | - | (67) |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| Share based payments | 10 | - | 209 | - | - | 110 | 329 |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| At 31 December 2007 | 632 | 113 | 4,385 | 6,547 | 8 | (11,473) | 212 |
| and 1 January 2008 | | | | | | | |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| | | | | | | | |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| Exchange difference | - | - | - | - | 65 | - | 65 |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| Profit for the year | - | - | - | - | - | 433 | 433 |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| Total recognised | - | - | - | - | 65 | 433 | 498 |
| income and expense | | | | | | | |
| for the year | | | | | | | |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| | | | | | | | |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| Share issue | 4 | (57) | 53 | - | - | - | - |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| Cancellation of | - | (56) | - | - | - | - | (56) |
| shares to be issued | | | | | | | |
| (see note 10) | | | | | | | |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| Share based payments | - | - | - | - | - | 103 | 103 |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
| At 31 December 2008 | 636 | - | 4,438 | 6,547 | 73 | (10,937) | 757 |
+----------------------+---------+---------+---------+----------+----------+----------+---------+
Consolidated cashflow statement
+--------------------------------------------------+------------+------------+
| | 2008 | 2007 |
+--------------------------------------------------+------------+------------+
| | US$'000 | US$'000 |
+--------------------------------------------------+------------+------------+
| | | |
+--------------------------------------------------+------------+------------+
| Operating activities | | |
+--------------------------------------------------+------------+------------+
| Profit / (Loss) before taxation | 566 | (643) |
+--------------------------------------------------+------------+------------+
| Adjustments for: | | |
+--------------------------------------------------+------------+------------+
| Finance income | (8) | (3) |
+--------------------------------------------------+------------+------------+
| Finance costs | 21 | 18 |
+--------------------------------------------------+------------+------------+
| Depreciation of property, plant and equipment | 76 | 60 |
+--------------------------------------------------+------------+------------+
| Share based payment costs | 103 | 329 |
+--------------------------------------------------+------------+------------+
| Amortization of intangibles | 56 | 41 |
+--------------------------------------------------+------------+------------+
| Profit on sale of business | (350) | - |
+--------------------------------------------------+------------+------------+
| | | |
+--------------------------------------------------+------------+------------+
| Operating cashflow before working capital | 464 | (198) |
| changes | | |
+--------------------------------------------------+------------+------------+
| | | |
+--------------------------------------------------+------------+------------+
| Increase in trade and other receivables | (143) | (275) |
+--------------------------------------------------+------------+------------+
| (Decrease) / increase in trade and other | (300) | 579 |
| payables | | |
+--------------------------------------------------+------------+------------+
| Increase in deferred income | 63 | 29 |
+--------------------------------------------------+------------+------------+
| | | |
+--------------------------------------------------+------------+------------+
| Cash generated by operations | 84 | 135 |
+--------------------------------------------------+------------+------------+
| Tax paid | (12) | (7) |
+--------------------------------------------------+------------+------------+
| | | |
+--------------------------------------------------+------------+------------+
| Net cash inflow from operating activities | 72 | 128 |
+--------------------------------------------------+------------+------------+
+---------------------------------------------------+------------+------------+
| Investing activities | | |
+---------------------------------------------------+------------+------------+
| Finance income | 8 | 3 |
+---------------------------------------------------+------------+------------+
| Proceeds from the sales of business | 350 | - |
+---------------------------------------------------+------------+------------+
| Purchases of property, plant and equipment | (47) | (124) |
+---------------------------------------------------+------------+------------+
| Cash acquired on acquisition | - | 67 |
+---------------------------------------------------+------------+------------+
| Business acquisition costs | - | (27) |
+---------------------------------------------------+------------+------------+
| | | |
+---------------------------------------------------+------------+------------+
| Net cash inflow / (outflow) from investing | 311 | (81) |
| activities | | |
+---------------------------------------------------+------------+------------+
| | | |
+---------------------------------------------------+------------+------------+
| Financing activities | (21) | (18) |
| Finance costs | | |
+---------------------------------------------------+------------+------------+
| Bank loan | 45 | - |
+---------------------------------------------------+------------+------------+
| Repayment of bank loan | (18) | - |
+---------------------------------------------------+------------+------------+
| Share issue costs | - | (67) |
+---------------------------------------------------+------------+------------+
| Net cash inflow /(outflow) from financing | 6 | (85) |
| activities | | |
+---------------------------------------------------+------------+------------+
| | | |
+---------------------------------------------------+------------+------------+
| Net increase / (decrease) in cash and cash | 389 | (38) |
| equivalents | | |
+---------------------------------------------------+------------+------------+
| Cash and cash equivalents as at 1 January | 264 | 307 |
+---------------------------------------------------+------------+------------+
| Effect of exchange rate fluctuations | 66 | (5) |
+---------------------------------------------------+------------+------------+
| | | |
+---------------------------------------------------+------------+------------+
| Cash and cash equivalents as at 31 December | 719 | 264 |
+---------------------------------------------------+------------+------------+
1. general information
The Company was incorporated as a Corporation in the Cayman Islands which does
not prescribe the adoption of any particular accounting framework. The Board has
therefore adopted International Financial Reporting Standards as adopted by the
European Union (IFRSs). The Company's shares are listed on the AIM market of the
London Stock Exchange.
The principal accounting policies of the Group remain unchanged from those set
out in the Group's 2007 annual report and financial statements
2.SEGMENTAL INFORMATION
(a) Primary reporting format - business segment:
As defined under International Accounting Standard 14 (IAS14), the only material
business segment the Group has is that of marketing and public relations.
(b) Secondary reporting format - geographical segment:
Under the definitions contained in IAS 14, the only material geographic segment
that the Group operates in is the Asia-Pacific region.
3. TAXATION EXPENSE
+---------------------------------------------+--------------+--------------+
| | 2008 | 2007 |
+---------------------------------------------+--------------+--------------+
| | US$'000 | US$'000 |
+---------------------------------------------+--------------+--------------+
| | | |
+---------------------------------------------+--------------+--------------+
| Current year income tax charge | 149 | 12 |
+---------------------------------------------+--------------+--------------+
| Deferred tax credit (note 13) | (16) | (12) |
+---------------------------------------------+--------------+--------------+
| | 133 | - |
+---------------------------------------------+--------------+--------------+
| | | |
+---------------------------------------------+--------------+--------------+
The income tax charge for the year has been calculated at the rates prevailing
in the relevant jurisdictions.
A reconciliation of the tax expense to the profit/(loss) before taxation using
the statutory rates for the countries in which the Company and its subsidiaries
are domiciled to the tax expense at the effective tax rates, and a
reconciliation of the statutory tax rates to the effective tax rates, are as
follows :
+-------------------------------+----------+----------+----------+----------+
| | 2008 | 2007 |
+-------------------------------+---------------------+---------------------+
| | US$'000 | % | US$'000 | % |
+-------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------+----------+----------+----------+----------+
| Profit /(loss) before | 566 | | (643) | |
| taxation | | | | |
+-------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------+----------+----------+----------+----------+
| Tax at the domestic income | 99 | 17.5 | (113) | (17.5) |
| tax rates | | | | |
+-------------------------------+----------+----------+----------+----------+
| Tax effect of unrecognised | 34 | 6.0 | 113 | (17.5) |
| tax losses | | | | |
+-------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------+----------+----------+----------+----------+
| Current year tax | 133 | 23.5 | - | - |
| charge | | | | |
+-------------------------------+----------+----------+----------+----------+
| | | | | |
+-------------------------------+----------+----------+----------+----------+
The Group has unrelieved tax losses of approximately US$373,000 (2007
:US$270,000), the utilisation of which is uncertain and consequently no deferred
tax asset has been recognised.
4.EARNINGS / (LOSS) PER SHARE
(a) Basic earnings / (loss) per share
The calculation of basic earnings / (loss) per share is based on the net profit
/ (loss) attributable to equity holders of the parent Company of US$433,000
(2007: loss of US$643,000) and the weighted average number of ordinary shares in
issue during the year of 137,187,094 (2007: 135,376,825).
(b) Diluted earnings / (loss) per share
The diluted earnings / (loss) per share is based on a weighted average number of
shares in issue of 150,864,178 for the year ended 31 December 2008.
The impact of the share options is anti-dilutive for the year ended 31 December
2007.
5. PUBLICATION OF NON STATUTORY ACCOUNTS
The financial information set out in this preliminary announcement does not
constitute statutory accounts as defined in Section 240 of the Companies Act
1985.
The consolidated balance sheet at 31 December 2008 and the consolidated income
statement, consolidated statement of changes in equity, consolidated cash flow
statement and associated notes for the year ended 31 December 2008 have been
extracted from the Group's 2008 financial statements upon which the auditors
opinion is unqualified and does not include any statement under Section 237 of
the Companies Act 1985.
The accounts for the year ended 31 December 2008 will be posted to shareholders
and laid before the Company at the Annual General Meeting in due course. Copies
will also be available from the registered office of the Company and via the
website.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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