AEOREMA COMMUNICATIONS PLC — Interim / Quarterly Report 2013

Feb 26, 2013

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RNS Number : 6346Y

Aeorema Communications Plc

26 February 2013

Aeorema Communications plc / Index: AIM / Epic: AEO / Sector: Media

26 February 2013

Aeorema Communications plc ('Aeorema' or 'the Company')

Interim Results

Aeorema Communications plc, the AIM-traded multi-media specialist, announces its results for the six months ended 31 December 2012.

Chairman's Statement

I am pleased to report on what has been a profitable period for the Company as we continue to strengthen our position as providers of high quality and contemporary corporate communications and events solutions.  During the period we achieved a pre tax profit of £98,382 (2011: £1,993) on revenues of £1,669,047 (2011: £1,237,800), and we have a cash position of £871,510 (2011: £812,104), which is a good achievement considering the tough market conditions.

Our On Screen and Live Events companies continue to work well together, regularly cross-selling services as they continue to produce high quality and award winning brand communications and innovative live events.  

We were delighted that our events division won two IVCA LiveCom awards for its work at Cannes Lions, whilst the film department also received nominations for the New York Film Festival.  These awards and nominations highlight the quality of our work.

Over the period of trading we have continued to develop and win new clients across both divisions.   Our client list includes a range of major companies focussed on the professional and financial services, the telecommunications sector, and the technology sector, where we have recently added new clients.  We maintain strong working relationships, with clients returning to us time and again for their conference and events needs.

At the end of the period, we announced our decision to dispose of viral agency ST16 Limited back to its directors for a nominal consideration.  This was due to the fact that it has not resulted in the volume of business anticipated.  Nonetheless, we are still pleased to show a profit for the period.

On a corporate front we also advise shareholders that the Company's registered address has changed to 64 New Cavendish Street, London, W1G 8TB.  Additionally, the Company's trading address has changed to Moray House, 23-31 Great Titchfield Street, London, W1W 7PA.

In the future, we look forward to building our client list and remain focussed on ensuring the continued success of our film and events divisions.  

I would like to thank shareholders for their continued support and give thanks to our dedicated and talented creative teams for their hard work over the period. 

M Hale

Chairman

25 February 2013

Aeorema Communications plc

Condensed Consolidated Statement of Comprehensive Income

Six months ended 31 December 2012

		Unaudited 6 months to 31 December 2012		Unaudited 6 months to 31 December 2011		Audited year ended 30 June 2012
	Notes	£		£		£
Continuing operations
Revenue		1,669,047		1,237,880		2,837,345
Cost of sales		(1,207,470)		(870,483)		(2,042,334)
Gross profit		461,577		367,397		795,011
Administrative expenses		(401,024)		(367,022)		(833,011)
Gain recognised on disposal of former subsidiary		53,824		-		-
Operating profit / (loss)		114,377		375		(38,000)
Finance income		-		118		228
Other income		83		1,500		1,500
Profit / (loss) before taxation		114,460		1,993		(36,272)
Taxation		-		-		(2,342)
Profit / (loss) for the period from continuing operations		114,460		1,993		(38,614)
Discontinued operations
Profit / (loss) for the period from discontinued operations	6	(16,078)		-		(46,569)
Total comprehensive income / (loss) for the period attributable to owners of the parent		98,382		1,993		(85,183)
Earnings / (Loss) per ordinary share:
From continuing and discontinued operations
Basic	5	1.22404p		0.02543p		(1.07822p)
Diluted	5	1.13772p		0.02453p		(1.00542p)
From continuing operations
Basic	5	1.42407p		0.02543p		(0.48876p)
Diluted	5	1.32365p		0.02453p		(0.45576p)

There are no other comprehensive income items.

Aeorema Communications plc

Condensed Consolidated Statement of Financial Position

At 31 December 2012

	Unaudited 31 December 2012		Unaudited 31 December 2011		Audited 30 June 2012
	£		£		£
Non-current assets
Intangible assets	365,154		365,154		365,154
Property, plant and equipment	45,755		77,343		65,928
Deferred taxation	19,712		22,054		19,712
	430,621		464,551		450,794
Current assets
Inventories	2,674		2,674		2,675
Trade and other receivables	625,784		369,040		807,841
Cash and cash equivalents	871,510		812,104		756,642
	1,499,968		1,183,818		1,567,158
Total assets	1,930,589		1,648,369		2,017,952
Current liabilities
Trade and other payables	(612,884)		(414,637)		(800,152)
	(612,884)		(414,637)		(800,152)
Net assets	1,317,705		1,233,732		1,217,800
Equity
Share capital	1,004,688		979,688		1,004,688
Merger reserve	16,650				16,650
Share based payment reserve	77,791		46,674		76,268
Capital redemption reserve	257,812		257,812		257,812
Retained earnings	(39,236)		(50,442)		(137,618)
Equity attributable to owners of the parent	1,317,705		1,233,732		1,217,800

Aeorema Communications plc

Condensed Consolidated Statement of Changes in Equity

At 31 December 2012

	Share Capital	Merger  Reserve	Share-based payment reserve	Capital Redemption reserve	Retained earnings	Total equity
	£	£	£	£	£	£
At 1 July 2011	979,688	-	31,116	257,812	(52,435)	1,216,181
Comprehensive income for the period	-	-	-	-	1,993	1,993
Share based payments	-	-	15,558	-	-	15,558
At 31 December 2011	979,688	-	46,674	257,812	(50,442)	1,233,732
At  1 January 2011	979,688	-	46,674	257,812	(50,442)	1,233,732
Issue of shares	25,000	21,500	-	-	-	46,500
Share issue costs	-	(4,850)	-	-	-	(4,850)
Comprehensive expense for the period	-	-	-	-	(87,176)	(87,176)
Share based payments	-	-	29,594	-		29,594
At 30 June 2012	1,004,688	16,650	76,268	257,812	(137,618)	1,217,800
At 1 July 2012	1,004,688	16,650	76,268	257,812	(137,618)	1,217,800
Comprehensive income for the period	-	-	-	-	98,382	98,382
Share based payments	-	-	1,523	-	-	1,523
At 31 December 2012	1,004,688	16,650	77,791	257,812	(39,236)	1,317,705

Aeorema Communications plc

Condensed Consolidated Statement of Cash Flows

Six months ended 31 December 2012

		Unaudited 6 months to 31 December 2012		Unaudited 6 months to 31 December 2011		Audited year ended 30 June 2012
	Notes	£		£		£
Cash flows from operating activities
Profit / (loss) before taxation		98,382		1,993		(82,841)
Depreciation		18,776		30,636		60,167
Impairment of goodwill		-		-		77,671
Gain on sale of property, plant and equipment		(43,000)		-		-
Profit on disposal of subsidiary		(53,824)		-		-
Write-off of inter-company loan due from subsidiary		26,960		-		-
Share based payment		1,523		15,558		45,152
Finance income		(83)		118		(228)
Taxation paid		-		-		(6,986)
Other non-cash adjustments		78		-
		48,812		48,305		92,935
Increase / (decrease) in trade and other payables		(187,268)		87,871		439,645
Decrease / (increase) in trade and other receivables		182,059		148,421		(269,284)
Change in working capital due to disposal of subsidiary:
-    Trade and other receivables		(11,699)		-		-
-    trade and other payables		39,404		-		-
-    Increase in other receivables due to balance due from former subsidiary		19,987		-		-
Cash generated in operating activities		42,483		236,292		170,361
Cash flows from investing activities
Finance income		83		(118)		228
Investments in subsidiaries (net of cash acquired)		-		-		(16,794)
Disposal of subsidiary (net of cash disposed)	6	(16,421)		-		-
Purchase of property, plant and equipment		(3,089)		(790)		(13,653)
Proceeds from sale of property, plant and equipment		43,000		-		-
Cash (used) / generated in investing activities		23,573		(908)		(30,219)
Cash flows from financing activities
Cost of share issue		-		-		(4,850)
Cash used in financing activities		-		-		(4,850)
Net increase in cash and cash equivalents		114,868		283,689		228,227
Cash and cash equivalents at beginning of period		756,642		528,415		528,415
Cash and cash equivalents at end of period		871,510		812,104		756,642

Aeorema Communications plc

Notes to the Interim Condensed Financial Statements

Six months ended 31 December 2012

1    General information

Aeorema Communications Plc, previously known as Cheerful Scout Plc, is a public limited company incorporated in the United Kingdom under the Companies Act 1985.  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 of the London Stock Exchange.

These condensed consolidated interim financial statements for the period ended 31 December 2012 (including the comparatives for the periods ended 31 December 2011 and 30 June 2012) were approved by the board of directors on 25 February 2013. 

The financial information set out in this interim report does not constitute statutory accounts for the purposes of section 434 of the Companies Act 2006.  The Group's statutory financial statements for the year ended 30 June 2012, prepared under International Financial Reporting Standards (IFRS), have been filed with the Registrar of Companies.  The auditor's report on those financial statements was unqualified and did not contain a statement under either Section 498 (2) or Section 498 (3) of the Companies Act 2006.  

The interim financial statements have been prepared using the accounting policies set out in the Group's 2012 statutory accounts and have not been audited.

Copies of the annual statutory accounts and the interim report can be found on our website at www.aeorema.com or can be requested from the Company Secretary at the Company's Registered Office: 64 New Cavendish Street, London, W1G 8TB.

2     Basis of preparation

These condensed consolidated interim financial statements for the period ended 31 December 2012 have been prepared in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union.  The interim condensed consolidated financial statements should be read in conjunction with the annual financial statements for the year ended 30 June 2012, which have been prepared in accordance with IFRS as adopted by the European Union.

3      Accounting policies

The accounting policies adopted are consistent with those of the annual financial statements for the year ended 30 June 2012, as described in those annual financial statements.  There has been no impact on the Group's financial position or performance from new and amended IFRS and IFRIC interpretations mandatory as of 1 July 2012.

4        Revenue and segmental results

Revenue and segmental results have been disclosed by three operating segments; On Screen, Live Events, and Viral Film (now discontinued), in the manner that the information is presented to the Board of Directors, being the Chief Operating Decision Makers.

		Revenue		Segment profit / (loss)
		Six months ended		Six months ended
		31 Dec 2012	31 Dec 2011	31 Dec 2012	31 Dec 2011
Continuing operations
On Screen		842,114	514,978	69,987	30,873
Live Events		826,933	722,902	141,022	47,151
Total for continuing operations		1,669,047	1,237,880	211,009	78,024
Unallocated expenses				(150,456)	(77,649)
Operating profit				60,553	375
Finance income				-	118
Other income				83	1,500
Profit before tax (continuing operations)				60,636	1,993
Discontinued operation
Viral Film		69,001	-	(16,078)	-
Gain recognised on disposal of subsidiary				53,824	-
Total for discontinued operations		69,001	-	37,746	-
Income tax expense continuing and discontinued				-	-
Consolidated revenue and profit for the period		1,738,048	1,237,880	98,382	1,993

Analysis of the Group's assets by operating segment	31 Dec 2012	31 Dec 2011
Continuing operations
On Screen segment assets	487,964	465,934
Live Events segment assets	762,351	418,976
Unallocated segment assets	680,274	763,459
Continuing operations - total assets	1,930,589	1,648,369
On Screen segment liabilities	(193,878)	(175,979)
Live Events segment liabilities	(379,418)	(214,458)
Unallocated segment liabilities	(39,588)	(24,200)
Continuing operations - total liabilities	(612,884)	(414,637)
Discontinued operations
Viral Film total assets	-	-
Viral Film total liabilities	-	-
Consolidated assets (continuing and discontinued)	1,930,589	1,648,369
Consolidated liabilities (continuing and discontinued)	(612,884)	(414,637)

5          Earnings (loss) per share

Basic earnings per share are calculated by dividing the profit or loss attributable to ordinary 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 ordinary 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 in ordinary shares.

The following reflects the income and share data used and dilutive earnings per share computations:

	Unaudited six months to 31 December 2012		Unaudited six months to 31 December 2011		Audited year ended 30 June 2012
Earnings attributable to owners of  parent	98,382		1,993		(85,183)
Number of shares
Basic weighted average number of shares	8,037,500		7,837,500		7,900,342
Effect of dilutive share options	609,788		288,878		572,017
Diluted weighted average number of shares	8,647,288		8,126,378		8,472,359
From continuing operations
Earnings attributable to owners of  parent	98,382		1,993		(85,183)
Less: (profit) / loss for the period from discontinued operations	16,078		-		46,569
Earnings for the purposes of basic and diluted earnings per share from continuing operations	114,460		1,993		(38,614)

6          Disposal of subsidiary

On 7 December 2012 the Group disposed of its 100% subsidiary ST16 Limited, which carried out Viral Film operations. ST16 Limited was sold to its directors, S Crofts and J Stinton. The proceeds on disposal of £5 were received in cash after the period end.

The profit / (loss) for the period from the discontinued operation is analysed as follows:

	Unaudited six months to 31 December 2012		Unaudited six months to 31 December 2011		Audited year ended 30 June 2012
	£		£		£
Profit / (loss) for the period	(16,078)		(46,569)		-
Gain recognised on disposal of subsidiary	53,824		-		-
	37,746		(46,569)		-

The results of ST16 Limited for the relevant periods were as follows:

	Unaudited six months to 31 December 2012		Unaudited six months to 31 December 2011		Audited year ended 30 June 2012
	£		£		£
Revenue	69,001		62,257		-
Operating costs	(85,079)		(108,813)		-
Finance costs	-		(13)		-
Profit/(loss) before tax	(16,078)		(46,569)		-
Income tax charge	-		-		-
Profit/(loss) after tax	(16,078)		(46,569)		-

The net assets / (liabilities) of ST16 Limited at the date of disposal were as follows:

	£
Net liabilities disposed of	(53,819)
Profit on disposal	53,824
Total consideration	5
Less: cash in subsidiary disposed of	(16,426)
Net cash outflow arising on disposal	(16,421)

7          Related party transactions

The Group has a related party relationship with its subsidiaries and its directors.

Transactions between Group companies, which are related parties, have been eliminated on consolidation and are therefore not included in these consolidated interim financial statements. 

					Unaudited		Unaudited
					6 months to		6 months to
					31 December		31 December
					2012		2011
					£		£
Subsidiaries
Amounts owed by/(to) subsidiaries					(125,344)		58,058
Amounts owed by/(to) subsidiaries					(125,344)		58,058

Aeorema Communications plc is a guarantor for a lease entered into by Cheerful Scout Productions Limited, its subsidiary undertaking.

Harris & Trotter LLP is a firm in which S Garbutta is a member.  The following was charged to the Group in respect of professional services.

			Unaudited 6 months to 31 December 2012		Unaudited 6 months to 31 December 2011
Harris & Trotter LLP			£		£
Aeorema Communications plc			7,196		9,892
Cheerful Scout Productions Limited			3,600		3,600
Twentyfirst Limited			3,600		3,600
Discontinued operations - ST16 Limited			1,600		-
			15,996		17,092

The compensation of key management (including directors) of the Group is as follows:

			£		£
Short-term employee benefits			54,500		53,750
Post-employment benefits			22,944		25,992
			77,444		79,742

** ENDS **

For further information visit www.aeorema.com or contact:

Gary Fitzpatrick	Aeorema Communications plc	Tel: 020 7291 0444
Mark Percy	Seymour Pierce	Tel: 020 7107 8000
Catherine Leftley	Seymour Pierce	Tel: 020 7107 8000
Elisabeth Cowell	St Brides Media & Finance Ltd	Tel: 020 7236 1177
Charlotte Heap	St Brides Media & Finance Ltd	Tel: 020 7236 1177

This information is provided by RNS

The company news service from the London Stock Exchange

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