RNS Number : 8235H
Electric Word PLC
23 August 2016
23 August 2016
ELECTRIC WORD PLC
Interim Results to 31 May 2016
Electric Word, the specialist information business with divisions operating in the Sport and
Education sectors, today announced interim results for the six months ended 31 May 2016.
|
HIGHLIGHTS
· Disposal of Group's 70% stake in iGaming
Business Ltd for gross cash consideration of £14.5m.
· Revenues from continuing operations flat
at £3.2m compared to H1 2015
· Strong performance in Sport Division
with revenues up 15% to £1.3m and Adjusted EBITA* increasing 300% to £114k
· Following external review, Optimus
Education business now refocused on conferences and premium subscription products.
· Education revenues down 9% to £1.9m
resulting from 11% lower Optimus subscriptions and 27% lower conferences. Speechmark increased 7% compared to H1
2015.
· Net cash increase from £0.4m at 30
November 2015 to £11.5m at 31 May 2016.
* Adjusted figures (Note 3) exclude amortisation, impairment of goodwill and intangible
assets, non-recurring items and restructuring costs, share based payment costs, as well as the tax impact of those
adjusting items and any non-cash tax credits and charges. This definition applies throughout the
Interim Results statement.
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|
|
|
Julian Turner, Chief Executive of Electric Word, commented:
"Following the disposal of the Group's stake in iGaming Business Ltd, we now have a much stronger
balance sheet. The performance of the trading divisions in the first half of the year has met expectations and been
satisfactory, given market conditions. Our strategy of investing in higher value subscription products is now resulting in
both higher revenues and margins in the Sport division whilst sales of our premium subscription products in Education are also
encouraging. The Sports and Education businesses are not currently of sufficient size to support the existing level of
Group overheads and central costs, however, and we are reviewing ways to address this."
Electric Word plc
INTERIM RESULTS TO 31 May 2016
___________________________________________________________________________
|
Financial summary (£'000)
|
|
2016
6 months
£'000
Restated
|
2015
6 months
£'000
Restated
|
2015
12 months
£'000
Restated
|
|
Continuing operations
Revenue
|
|
3,224
|
3,245
|
6,796
|
|
Gross Profit
|
|
1,803
|
1,756
|
3,801
|
|
Adjusted EBITA*
|
|
(992)
|
(907)
|
(1,345)
|
|
|
|
|
|
|
|
Adjusted loss before tax*
|
|
(986)
|
(916)
|
(1,361)
|
|
Amortisation
|
|
(232)
|
(229)
|
(470)
|
|
Non-recurring items
|
|
(397)
|
-
|
-
|
|
Impairment expense
|
|
-
|
-
|
(1,000)
|
|
Share-based payment charges
|
|
(32)
|
(33)
|
(66)
|
|
Loss before tax
|
|
(1,647)
|
(1,178)
|
(2,897)
|
|
Loss for the financial period from continuing operations
|
|
(1,637)
|
(1,172)
|
(2,678)
|
|
Discontinued operations
|
|
|
|
|
|
Profit for the financial period from discontinued operations
|
|
11,698
|
339
|
386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit / (loss) for the financial period
|
|
10,061
|
(833)
|
(2,292)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share from continuing operations
|
|
(0.40)p
|
(0.29)p
|
(0.66)p
|
|
Adjusted diluted loss per share*
|
|
(0.24)p
|
(0.22)p
|
(0.33)p
|
|
Diluted earnings / (loss) per share from continuing and discontinued operations
|
|
2.42p
|
(0.23)p
|
(0.62)p
|
|
|
|
|
|
|
|
Net funds †
|
|
11,494
|
11
|
448
|
|
|
|
|
|
|
Comparative figures for the year to 30 November 2015 and six months to 31 May 2015 have been
restated to reclassify the results of iGaming Business Ltd and the Optimus books business as discontinued (see note
8).
* Adjusted figures (Note 3) exclude amortisation, impairment of goodwill and intangible assets,
non-recurring items and restructuring costs, share based payment costs, as well as the tax impact of those adjusting items and
any non-cash tax credits and charges. This definition applies throughout the Interim Results
statement.
† Net funds (note 6) comprise cash held net of bank overdrafts
and loans.
ENDS
|
Julian Turner, Chief Executive, Electric Word
|
020 7265 4170
|
|
Andrew Potts, Panmure Gordon
|
020 7886 2500
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Electric Word plc
INTERIM RESULTS TO 31 May 2016
Chairman's and Chief Executive's statement
___________________________________________________________________________
GROUP OVERVIEW
|
Total Group
Continuing operations
|
2016
6 months
Total
£'000
|
2015
6 months
Total
£'000
Restated
|
2015
12 months
Total
£'000
Restated
|
|
Revenue
|
3,224
|
3,245
|
6,796
|
|
Adjusted EBITA*
|
(992)
|
(907)
|
(1,345)
|
|
Net interest received / (payable)
|
6
|
(9)
|
(16)
|
|
Adjusted loss before tax*
|
(986)
|
(916)
|
(1,361)
|
* Adjusted figures (note 3) exclude amortisation and impairment of goodwill and intangible assets,
non-recurring items and restructuring costs, and share based payment costs, as well as the tax impact of those adjusting items
and any non-cash tax credits and charges.
The Group's strategy has been to increase the value that it adds for its customers by creating
products and services that support their critical decisions and the achievement of their key organisational objectives. This has
required a deeper engagement with our customers as well as some significant investments. Inevitably, in following this path, we
have had to make some choices and are now doing fewer things, of greater value and on a larger scale.
Our investment in the last three years has principally been in digital products and this has
produced increased sales of higher-value, premium products which have once again seen higher average customer values in both
SportBusiness and Optimus Education. We expect these higher-value premium products to add to the value of these
businesses.
Following the disposal of iGaming Business in January 2016, we are mindful that the Group's cash
balances could exceed the Group's expected financing requirements for the foreseeable future. We are also conscious that
the Group's continuing businesses are in aggregate loss making. This is primarily because following the recent business
disposals, the Sports and Education businesses are not currently of sufficient size to support the existing level of Group
overheads and central costs.
In our 2015 Annual Report, we announced that we were reviewing our infrastructure, systems and
processes and also assessing the options open to us, including a possible return of capital to Shareholders. We also stated
that we were mindful of the continuing EBITA losses and that any capital return would be enhanced by improvements in
profitability in the Optimus business. Our review is progressing but not yet concluded and as such we do not consider a
return of capital would be appropriate at this stage. We will provide a further update in due course.
Directorate change
Stephen Routledge, who has been a non-executive director since September 2006, has indicated his
intention to step down from the Board on 31 August 2016. We would like to thank Stephen for his contribution to the
development of the Group during his tenure.
Electric Word plc
INTERIM RESULTS TO 31 May 2016
Chairman's and Chief Executive's Statement
___________________________________________________________________________
SPORT division
|
Continuing operations
|
2016
6 months
£'000
|
2015
6 months
£'000
|
Change
%
|
2015
12 months
£'000
|
|
Revenue
|
1,280
|
1,114
|
+15%
|
2,366
|
|
Adjusted contribution to central overhead*
|
328
|
274
|
+20%
|
644
|
|
Adjusted EBITA*
|
114
|
38
|
+200%
|
153
|
|
Margin
|
9%
|
3%
|
|
6%
|
The table above excludes the results of iGaming Business Ltd which was sold on 4 January 2016 -
see note 8.
The Sport division provides market information and knowledge to professionals in the global
business of sport, particularly on media rights, sponsorship and event hosting.
Revenue in this division grew by 15% compared to H1 2015, with 65% of revenue from live or digital
services in 2015 (62% in H1 2015). Subscriptions grew by 18% and now account for 69% of the revenue in this division (67% in H1
2015). Revenue from bespoke consulting increased by 26% compared to the first half of 2015 and accounted for 15% of revenues (14%
in H1 2015), whereas advertising was 14% of 2016 divisional revenues (14% in H1 2015).
Revenues from TV Sports Markets continue to grow on the back of enhanced
product offerings and represented 41% of revenues in H1 2016 - a 10% increase on H1 2015.
We are successfully continuing to develop our Sports Sponsorship Insider
product and H1 2016 revenues have increased by 24% from H1 2015 to £113,000. This product is loss making due to continued
investment and development, but at current growth rates we believe that it will become profitable in the short to medium
term.
As noted above, revenues from bespoke consulting have increased compared to H1 2015, and are
currently at 73% of total consulting revenues for the year to 30 November 2015.
Our flagship Sports Business International magazine generated 35% of
revenues in the period to 31 May 2016 and H1 2015. Approximately 55% of revenues are subscriptions, and 42% are generated
form advertising. This product earns a comparatively low margin but also provides an effective marketing channel for our
other products and the business as a whole.
EDUCATION divisioN
|
Continuing operations
|
2016
6 months
£'000
|
2015
6 months
£'000
|
Change
%
|
2015
12 months
£'000
|
|
Revenue
|
1,944
|
2,131
|
-9%
|
4,430
|
|
Adjusted contribution to central overhead*
|
(129)
|
(27)
|
+378%
|
144
|
|
Adjusted EBITA*
|
(560)
|
(462)
|
+21%
|
(730)
|
|
Margin
|
-29%
|
-22%
|
|
-14%
|
The table above now includes the results of the Speechmark business which was previously reported
in the Health segment. The results of the Incentive Plus business which was sold on 15 October 2014 have been excluded as
have the results of the Optimus books business which have been discontinued - see note 8.
Electric Word plc
INTERIM RESULTS TO 31 May 2016
Chairman's and Chief Executive's Statement
___________________________________________________________________________
The Education division includes the Optimus and Speechmark businesses. Optimus supports teachers'
professional development requirements through an online subscription-based information and training service and through live
conferences.
The Optimus business is now focused on conferences for a narrower group of senior school leaders
alongside the Premium CPD online training resources. These services have been brought together, along with the Knowledge centre
database of articles and case studies, into an integrated membership offering under the Optimus Unlimited brand. This has
resulted in a re-phased conference schedule and fewer events overall. We ran 14 events in the first half of 2016 (which is
5 fewer than 2015) and this contributed to 27% lower revenues compared to H1 2015, although profitability per event was
higher.
In subscriptions, the total revenue earned was down 11% as a result of reduced subscriptions to
the Knowledge Centre. Revenues from the Premium CPD and Unlimited products however have increased by 160% to £169,000 which
represents good progress from the launch of Unlimited in September 2015. As a result of strong sales of Unlimited in the second
quarter, deferred subscription revenue ended the period higher than the previous year.
The Optimus books business had been reduced greatly in recent years as part of the streamlining of
activities around digital and live services and that business has now been discontinued as at 31 May 2016.
Speechmark, however, continues to publish books and other resources for speech and language
therapists, mental health professionals and teachers in schools. Speechmark has had a good start to the year and revenues are 7%
higher than in the period to 31 May 2015, mainly driven by UK book sales.
Central costs
|
|
2016
6 months
£'000
|
2015
6 months
£'000
|
Change
%
|
2015
12 months
£'000
|
|
Adjusted EBITA*
|
(546)
|
(483)
|
+13%
|
(768)
|
|
As % of Group revenue from continuing operations
|
17%
|
15%
|
|
11%
|
|
Net interest receivable / (payable)
|
6
|
(9)
|
|
(16)
|
These costs represent those central group costs which have not been recharged to the divisions and
are therefore not included in the divisional results. They include Board fees and costs related to being both a public
company and a Group as well as some of the costs of central functions such as HR, IT and unallocated property costs.
Central costs are higher than 2015 levels due to the continuation of some costs which were
previously allocated to the businesses which have been sold. We would expect central costs for the remainder of 2016 to be at an
increased level as a result of higher property costs, although this will be mitigated in part by efficiencies realised following
the disposals and other actions being taken to reduce costs.
Net interest receivable / (payable) is consistent with the reduction in the Group's debt and the
increase in cash balances following the disposal of iGaming Business Ltd.
Electric Word plc
INTERIM RESULTS TO 31 May 2016
Chairman's and Chief Executive's Statement
___________________________________________________________________________
FINANCIAL REVIEW
In these results we refer to adjusted results. Adjusted results are prepared to provide a more
comparable indication of the Group's underlying business performance. A reconciliation of statutory results to adjusted
results is given in note 3, and further details of adjusting items are given below.
Non-recurring items
Non-recurring costs of £397,000 have been incurred in the 6 months ended 31 May 2016. These
relate to costs associated with the strategic review of the Optimus Education business (£184,000), redundancy costs arising from
staff restructuring (£54,000) and bonus payments made to the Executive Directors as a result of
meeting key objectives including the disposal of iGaming Business Ltd (£159,000). There were
no non-recurring costs charged to continuing operations in the prior periods.
Amortisation
Amortisation of intangible fixed assets for continuing operations charged in the 6 months to 31
May 2016 amounted to £232,000 (6 months to 31 May 2015: £229,000; Year ended 30 November 2015, £470,000).
Impairment charges
An impairment expense of £1m was recognised in the second half of 2015 against the carrying value
of goodwill in the Optimus business. There have been no impairments recognised in 2016.
Share-based payment charges
Share-based payment charges are recognised to spread the fair value of each award over the vesting
period on a straight-line basis, after allowing for an estimate of the share awards that will actually vest. The expense
recognised in the 6 months ended 31 May 2016 was £32,000 (6 months to 31 May 2015: £33,000; Year ended 30 November 2015,
£66,000)
Debt and cash flow
Following the disposal of iGaming Business Ltd in January 2016, net cash at 31 May 2016 was
£11,494,000 (31 May 2015: £11,000; 30 November 2015: £448,000). The Group has gross bank debt of £61,000 at 31 May 2016 (31
May 2015: £228,000; 30 November 2015: £94,000). This is being repaid over equal monthly instalments to May 2017.
Current Trading and Prospects
Current trading is in line with the Board's expectations. As we enter the fourth quarter,
which is an important contributor to the Group's overall performance, we are expecting continued strong performance from our
Sport division. In Education we are encouraged by sales of our premium subscription products although this will be offset
by further reductions in Knowledge Centre. Advance bookings for fourth quarter education conferences are currently ahead of 2015
and Speechmark performance is anticipated to remain steady. Central costs in the second half of the year will be higher
than the first due to higher property costs, but we continue to seek efficiencies where possible.
Andrew
Brode Chairman
Julian
Turner Chief
Executive
Electric Word plc
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 31 May 2016 - unaudited
|
|
|
Note
|
Six months
ended
31 May
2016
£'000
|
Six months
ended
31 May
2015
£'000
Restated
|
Year
ended
30 November
2015
£'000
Restated
|
|
|
CONTINUING OPERATIONS
|
|
|
|
|
|
|
REVENUE
|
2
|
3,224
|
3,245
|
6,796
|
|
|
|
|
|
|
|
|
|
Cost of sales - direct costs
|
|
(953)
|
(1,005)
|
(2,140)
|
|
|
Cost of sales - marketing expense
|
|
(468)
|
(484)
|
(855)
|
|
|
Gross profit
|
|
1,803
|
1,756
|
3,801
|
|
|
|
|
|
|
|
|
|
Other operating expenses
|
|
(2,788)
|
(2,664)
|
(5,138)
|
|
|
Non-recurring items
|
|
(397)
|
-
|
-
|
|
|
Depreciation expense
|
|
(39)
|
(32)
|
(74)
|
|
|
Amortisation expense
|
|
(232)
|
(229)
|
(470)
|
|
|
Impairment charges
|
|
-
|
-
|
(1,000)
|
|
|
Total administrative expenses
|
|
(3,456)
|
(2,925)
|
(6,682)
|
|
|
|
|
|
|
|
|
|
OPERATING LOSS
|
2, 3
|
(1,653)
|
(1,169)
|
(2,881)
|
|
|
|
|
|
|
|
|
|
|
Finance costs
|
|
(5)
|
(9)
|
(16)
|
|
|
Finance income
|
|
11
|
-
|
-
|
|
|
|
|
|
|
|
|
|
|
LOSS BEFORE TAX
|
3
|
(1,647)
|
(1,178)
|
(2,897)
|
|
|
|
|
|
|
Taxation
|
4
|
10
|
6
|
219
|
|
LOSS FOR THE PERIOD FROM CONTINUING OPERATIONS
|
(1,637)
|
(1,172)
|
(2,678)
|
|
|
|
|
|
|
DISCONTINUED OPERATIONS
|
|
|
|
|
Profit for the period from discontinued operations, net of tax
|
8
|
11,698
|
339
|
386
|
|
PROFIT / (LOSS) FOR THE PERIOD
|
10,061
|
(833)
|
(2,292)
|
|
|
|
|
|
|
Attributable to:
|
|
|
|
|
- Equity holders of the
parent
|
3
|
10,188
|
(941)
|
(2,523)
|
|
- Non-controlling
interest
|
|
(127)
|
108
|
231
|
|
TOTAL COMPREHENSIVE PROFIT / (LOSS)
|
10,061
|
(833)
|
(2,292)
|
|
|
|
|
|
|
EARNINGS / (LOSS) PER SHARE
|
5
|
|
|
|
|
From continuing and discontinued operations
|
|
|
|
|
Basic
|
2.50p
|
(0.23)p
|
(0.62)p
|
|
Diluted
|
2.42p
|
(0.23)p
|
(0.62)p
|
|
From continuing operations
|
|
|
|
|
Basic
|
(0.40)p
|
(0.29)p
|
(0.66)p
|
|
Diluted
|
(0.40)p
|
(0.29)p
|
(0.66)p
|
|
|
|
|
|
|
|
|
|
|
Prior period results have been restated to show the effect of operations which have been
discontinued in the current and prior periods - see note 8. Of the profit for the period from discontinued operations,
£11,825,000 (6 months to 31 May 2015: £231,000, year ended 30 November 2015: £155,000 profit) is attributable to equity holders
of the parent and £127,000 loss (6 months to 31 May 2015: £108,000 profit, year ended 30 November 2015: £231,000 profit) is
attributable to the non-controlling interest.
Electric Word plc
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 31 May 2016 - unaudited
|
|
Share
capital
£'000
|
Share
premium
account
£'000
|
Other
reserves
£'000
|
Reserve
for own
shares
£'000
|
Retained
earnings
£'000
|
Total
£'000
|
Non-
controlling
interest
£'000
|
Total
equity
£'000
|
|
At 30 November 2014
|
4,076
|
7,531
|
105
|
(123)
|
(4,983)
|
6,606
|
81
|
6,687
|
|
Total comprehensive (loss) / income
|
-
|
-
|
-
|
-
|
(941)
|
(941)
|
108
|
(833)
|
|
|
4,076
|
7,531
|
105
|
(123)
|
(5,924)
|
5,665
|
189
|
5,854
|
|
Dividend paid by subsidiary
|
-
|
-
|
-
|
-
|
-
|
-
|
(185)
|
(185)
|
|
Share based payment costs
|
-
|
-
|
-
|
-
|
32
|
32
|
-
|
32
|
|
At 31 May 2015
|
4,076
|
7,531
|
105
|
(123)
|
(5,892)
|
5,697
|
4
|
5,701
|
|
Total comprehensive (loss) / income
|
-
|
-
|
-
|
-
|
(1,582)
|
(1,582)
|
123
|
(1,459)
|
|
Tax debited directly to equity
|
-
|
-
|
-
|
-
|
(112)
|
(112)
|
-
|
(112)
|
|
|
4,076
|
7,531
|
105
|
(123)
|
(7,586)
|
4,003
|
127
|
4,130
|
|
Share based payment costs
|
-
|
-
|
-
|
-
|
34
|
34
|
-
|
34
|
|
At 30 November 2015
|
4,076
|
7,531
|
105
|
(123)
|
(7,552)
|
4,037
|
127
|
4,164
|
|
Total comprehensive income / (loss)
|
-
|
-
|
-
|
-
|
10,188
|
10,188
|
(127)
|
10,061
|
|
|
4,076
|
7,531
|
105
|
(123)
|
2,636
|
14,225
|
-
|
14,225
|
|
Share issues
|
11
|
-
|
-
|
-
|
-
|
11
|
-
|
11
|
|
Share based payment costs
|
-
|
-
|
-
|
-
|
32
|
32
|
-
|
32
|
|
At 31 May 2016
|
4,087
|
7,531
|
105
|
(123)
|
2,668
|
14,268
|
-
|
14,268
|
Electric Word plc
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the six months ended 31 May 2016 - unaudited
|
|
Note
|
31 May
2016
£'000
|
31 May
2015
£'000
|
30 November
2015
£'000
|
|
ASSETS
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Goodwill
|
|
3,050
|
4,550
|
3,050
|
|
Other intangible assets
|
|
777
|
1,067
|
882
|
|
Property, plant and equipment
|
|
9
|
80
|
46
|
|
Deferred tax assets
|
|
633
|
1,846
|
637
|
|
|
|
4,469
|
7,543
|
4,615
|
|
Current Assets
|
|
|
|
|
|
Inventories
|
|
556
|
757
|
622
|
|
Trade and other receivables
|
|
1,909
|
3,732
|
1,987
|
|
Cash and cash equivalents
|
6
|
11,555
|
239
|
542
|
|
|
|
14,020
|
4,728
|
3,151
|
|
Assets classified as held for sale
|
|
-
|
-
|
1,544
|
|
Total current assets
|
|
14,020
|
4,728
|
4,695
|
|
TOTAL ASSETS
|
|
18,489
|
12,271
|
9,310
|
|
|
|
|
|
|
|
EQUITY AND LIABILITIES
|
|
|
|
|
|
Capital and reserves
|
|
|
|
|
|
Called up ordinary share capital
|
|
4,087
|
4,076
|
4,076
|
|
Share premium account
|
|
7,531
|
7,531
|
7,531
|
|
Merger reserve
|
|
105
|
105
|
105
|
|
Reserve for own shares
|
|
(123)
|
(123)
|
(123)
|
|
Retained earnings
|
|
2,668
|
(5,892)
|
(7,552)
|
|
Equity attributable to equity holders of the parent
|
|
14,268
|
5,697
|
4,037
|
|
Non-controlling interest
|
|
-
|
4
|
127
|
|
TOTAL EQUITY
|
|
14,268
|
5,701
|
4,164
|
|
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Borrowings
|
6
|
-
|
61
|
28
|
|
Deferred tax liabilities
|
|
36
|
229
|
50
|
|
|
|
36
|
290
|
78
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
Borrowings
|
6
|
61
|
167
|
66
|
|
Current tax liabilities
|
|
-
|
78
|
-
|
|
Trade payables and other liabilities
|
|
1,578
|
2,443
|
1,640
|
|
Provisions
|
7
|
60
|
60
|
60
|
|
Deferred income
|
|
2,486
|
3,532
|
1,934
|
|
|
|
4,185
|
6,280
|
3,700
|
|
Liabilities associated with assets held for sale
|
|
-
|
-
|
1,368
|
|
Total current liabilities
|
|
4,185
|
6,280
|
5,068
|
|
TOTAL LIABILITIES
|
|
4,221
|
6,570
|
5,146
|
|
|
|
|
|
|
|
TOTAL EQUITY AND LIABILITIES
|
|
18,489
|
12,271
|
9,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
These financial statements were approved by the Board of Directors and are authorised for
issue on 23 August 2016.
|
Electric Word plc
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 May 2016 - unaudited
|
|
Note
|
6 months
ended
31 May
2016
£'000
|
6 months
ended
31 May
2015
£'000
|
Year ended
30
November
2015
£'000
|
|
|
|
|
|
|
|
OPERATING ACTIVITIES
|
|
|
|
|
|
Profit / (loss) for the period
|
|
10,061
|
(833)
|
(2,292)
|
|
|
|
|
|
|
|
Taxation
|
|
(68)
|
87
|
1,196
|
|
Amortisation & impairment expense
|
|
236
|
318
|
1,582
|
|
Depreciation
|
|
39
|
32
|
73
|
|
(Profit) / loss on disposal of discontinued operation
|
|
(11,795)
|
23
|
27
|
|
Finance costs
|
|
5
|
9
|
16
|
|
Finance income
|
|
(11)
|
-
|
-
|
|
Share based payment charges
|
|
32
|
33
|
66
|
|
|
|
|
|
|
|
Operating cash flows before movements in working capital
|
|
(1,501)
|
(331)
|
668
|
|
|
|
|
|
|
|
Decrease in inventories
|
|
66
|
98
|
233
|
|
(Increase) / decrease in receivables
|
|
47
|
48
|
(132)
|
|
Increase / (decrease) in payables
|
|
957
|
940
|
(273)
|
|
|
|
|
|
|
|
Cash (outflow) / inflow from operating activities before interest and tax
|
|
(431)
|
755
|
496
|
|
Interest paid
|
|
(5)
|
(9)
|
(16)
|
|
Taxation paid
|
|
(76)
|
(61)
|
(154)
|
|
Cash (outflow) / inflow from operating activities
|
|
(512)
|
685
|
326
|
|
|
|
|
|
|
|
investing activities
|
|
|
|
|
|
Purchase of property, plant and equipment
|
|
(3)
|
(88)
|
(95)
|
|
Purchase of intangible assets
|
|
(128)
|
(133)
|
(286)
|
|
Proceeds from disposal of discontinued operation received
|
9
|
11,666
|
121
|
1,078
|
|
Interest received
|
|
11
|
-
|
-
|
|
Net cash used in investing activities
|
|
11,546
|
(100)
|
697
|
|
|
|
|
|
|
|
financing activities
|
|
|
|
|
|
Proceeds from issuance of ordinary shares
|
|
11
|
-
|
-
|
|
Repayment of borrowings
|
6
|
(33)
|
(158)
|
(292)
|
|
Payment of dividend to non-controlling interest
|
|
-
|
(185)
|
(185)
|
|
|
|
|
|
|
|
Net cash from financing activities
|
|
(22)
|
(343)
|
(477)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net INCREASE in cash and cash equivalents
|
|
11,012
|
242
|
546
|
|
Cash and cash equivalents at the beginning of the period
|
|
543
|
(3)
|
(3)
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the period
|
6
|
11,555
|
239
|
543
|
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 may 2016 - unaudited
1 PRESENTATION OF INTERIM RESULTS
GENERAL INFORMATION
Electric Word plc (the "Company") is a company incorporated in the United Kingdom. The unaudited condensed set
of consolidated financial statements as at May 2016 and for the six months then ended comprise those of the Company and its
subsidiaries (together referred to as the "Group").
The information for the six months ended 31 May 2016 and the comparative information for the six months ended 31 May
2015 are not audited by the Group's auditors. The comparative figures for the financial year ended 30 November 2015 are not
the company's statutory accounts for that financial year. Those accounts have been reported on by the Company's auditors
and delivered to the registrar of companies. The report of the auditors was (i) unqualified, (ii) did not include a
reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report, and (iii) did
not contain a statement under section 498 (2) or (3) of the Companies Act 2006. The consolidated financial statements of
the Group as at and for the year ended 30 November 2015 are available upon request from the Company's registered office at
2nd Floor, 5 Thomas More Square, London E1W 1YW or at www.electricwordplc.com.
The comparative information for the year to 30 November 2015 and the six months ended 31 May 2015 included in the
condensed consolidated statements has been restated to reclassify the results of businesses which have been discontinued in the
current or prior periods. Further details are given in note 8.
ACCOUNTING POLICIES AND ESTIMATES
The financial statements have been prepared under the historical cost convention and in accordance with
International Financial Reporting Standards ("IFRS") as adopted for use in the European Union. The condensed set of
consolidated financial statements included in this interim report has been prepared in accordance with International Accounting
Standard 34 "Interim Financial Reporting", as adopted by the European Union.
The accounting policies, presentation and methods of computations applied by the Group in its consolidated financial
statements are consistent with those applied by the Group in its consolidated financial statements for the year ended 30 November
2015.
The preparation of the condensed set of financial statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and income and
expense. Actual results may differ from these estimates.
In preparing this condensed set of consolidated financial statements, the significant judgements made by management
in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that were
applied to the consolidated financial statements as at and for the year ended 30 November 2015.
GOING CONCERN
Following the disposal of the Group's 70% interest in iGaming Business Ltd, the Group has cash balances of
£11,555,000 and a net current asset position of £9,835,000 as at 31 May 2016. Net funds amount to £11,494,000 at 31 May
2016. The Directors have prepared group cash flow forecasts for the period ending 30 November 2018. These forecasts
indicate that the Group will continue to meet its liabilities and bank debt requirements as they fall due for the foreseeable
future. The Directors also prepare a rolling 12-month cash flow forecast each month to monitor the Group's expected cash
balances.
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 May 2016 - unaudited
1 PRESENTATION OF INTERIM RESULTS
(continued)
In the event of forecast trading levels not being met, the Directors have the scope to take further actions to
enable the group to meet its liabilities as they fall due for the foreseeable future and for it to remain within its financial
covenants. The Group has an overdraft facility of up to £750,000 which is currently not utilised. On this basis the
Directors believe that it remains appropriate to prepare the financial statements on a going concern basis.
2 SEGMENTAL INFORMATION
Segmental information is presented in respect of the Group's business divisions. This format
is based on the Group's management and internal reporting structure, as reviewed by the Board when reviewing performance,
allocating resources and making strategic decisions. Following the disposal of iGaming
Business Ltd, the Directors have restructured the management of the Group's continuing operations and now organises its
management and reporting around two market-facing divisions: Education and Sport.
· Sport (S): provides insight, data
and analysis to the business communities behind sport.
· Education (E): provides
professional education, development, training and resources to professional communities in schools and other institutions
including school managers, teachers, speech and language therapists and special needs co-ordinators.
· Central costs (PLC): the group
function represents central costs which are not directly related to the Divisions' trading and are not recharged. Finance
costs and investment income are also included here as these are driven by central policy which manages the cash position across
the Group.
The sector analysis includes adjusted operating profit (note 3) to allow shareholders to gain a further
understanding of the trading performance of the Group and is considered by the Board alongside operating profit and profit before
tax to assess performance and review strategy.
As described in note 8, the information in the table below excludes amounts relating to discontinued activities and
2015 comparatives have been restated accordingly
|
Analysis by market sector - continuing operations
|
6 months
ended 31 May 2016
|
6 months ended 31
May 2015 - Restated
|
|
|
S
|
E
|
PLC
|
Total
|
|
S
|
E
|
PLC
|
Total
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
1,280
|
1,944
|
-
|
3,224
|
|
1,114
|
2,131
|
-
|
3,245
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating (loss) /profit (note 3)
|
|
114
|
(560)
|
(546)
|
(992)
|
|
38
|
(462)
|
(483)
|
(907)
|
|
Share based payment charges
|
|
-
|
-
|
(32)
|
(32)
|
|
-
|
-
|
(33)
|
(33)
|
|
Restructuring costs
|
|
-
|
(200)
|
(197)
|
(397)
|
|
-
|
-
|
-
|
-
|
|
Amortisation of intangible assets
|
|
(60)
|
(160)
|
(12)
|
(232)
|
|
(54)
|
(168)
|
(7)
|
(229)
|
|
Operating (loss) / profit
|
|
54
|
(920)
|
(787)
|
(1,653)
|
|
(16)
|
(630)
|
(523)
|
(1,169)
|
|
Finance costs
|
|
-
|
-
|
(5)
|
(5)
|
|
-
|
-
|
(9)
|
(9)
|
|
Finance income
|
|
-
|
-
|
11
|
11
|
|
-
|
-
|
-
|
-
|
|
(Loss) / profit before tax
|
|
54
|
(920)
|
(781)
|
(1,647)
|
|
(16)
|
(630)
|
(532)
|
(1,178)
|
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 May 2016 - unaudited
2 SEGMENTAL INFORMATION
(continued)
|
Analysis by market sector - continuing operations
|
|
Year ended 30 November 2015 - Restated
|
|
|
|
|
|
|
|
S
|
E
|
PLC
|
Total
|
|
|
|
|
|
|
|
£'000
|
£'000
|
£'000
|
£'000
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
2,366
|
4,430
|
-
|
6,796
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted operating (loss) /profit (note 3)
|
|
|
|
|
|
153
|
(730)
|
(768)
|
(1,345)
|
|
Share based payment charges
|
|
|
|
|
|
-
|
-
|
(66)
|
(66)
|
|
Restructuring costs
|
|
|
|
|
|
-
|
-
|
-
|
-
|
|
Amortisation of intangible assets
|
|
|
|
|
|
(112)
|
(342)
|
(16)
|
(470)
|
|
Impairment expense
|
|
|
|
|
|
-
|
(1,000)
|
-
|
(1,000)
|
|
Operating (loss) / profit
|
|
|
|
|
|
41
|
(2,072)
|
(850)
|
(2,881)
|
|
Finance costs
|
|
|
|
|
|
-
|
-
|
(16)
|
(16)
|
|
(Loss) / profit before tax
|
|
|
|
|
|
41
|
(2,072)
|
(866)
|
(2,897)
|
|
|
|
|
|
|
|
|
|
|
|
3 ADJUSTED PROFITS
Adjusted profits are presented to allow shareholders to gain a further understanding of the trading performance of
the Group. Profits are adjusted for items not considered by management to be part of the underlying trends in the business
together with the related tax effect of those items. The adjustments add back items which are not trade related, are
non-recurring in nature, or have no cash impact.
Adjusted figures exclude amortisation and impairment of goodwill and intangible assets, restructuring and
acquisition-related costs, and share based payment costs, non-recurring items as well as the tax impact of those adjusting items
and any non-cash tax charges.
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 may 2016 - unaudited
3 ADJUSTED PROFITS (continued)
|
|
|
6 months
ended
31 May 2016
£'000
|
6 months
ended
31 May 2015
£'000
Restated
|
Year ended
30 November
2015
£'000
Restated
|
|
|
|
|
|
|
|
Operating loss for the period from continuing operations
|
|
(1,653)
|
(1,169)
|
(2,881)
|
|
|
|
|
|
|
|
Amortisation of intangible assets
|
|
232
|
229
|
470
|
|
Non-recurring items
|
|
397
|
-
|
-
|
|
Impairment expense
|
|
-
|
-
|
1,000
|
|
Share based payment charges
|
|
32
|
33
|
66
|
|
Adjusting items to operating loss
|
|
661
|
262
|
1,536
|
|
|
|
|
|
|
|
Adjusted operating loss for the period (Adjusted EBITA)
|
|
(992)
|
(907)
|
(1,345)
|
|
Depreciation
|
|
39
|
32
|
74
|
|
Adjusted earnings before interest, tax, depreciation and amortisation for the
period
|
|
(953)
|
(875)
|
(1,271)
|
|
|
|
|
|
|
|
Loss before tax for the period from continuing operations
|
|
(1,647)
|
(1,178)
|
(2,897)
|
|
|
|
|
|
|
|
Adjusting items to operating loss
|
|
661
|
262
|
1,536
|
|
Adjusting items to loss before tax
|
|
661
|
262
|
1,536
|
|
|
|
|
|
|
|
Adjusted loss before tax for the period
|
|
(986)
|
(916)
|
(1,361)
|
|
|
|
|
|
|
|
Profit / (loss) for the period attributable to equity holders of the parent
|
|
10,188
|
(941)
|
(2,523)
|
|
Deduct profit from discontinued activities
|
|
11,825
|
231
|
155
|
|
Loss for the period attributable to equity holders of the parent from continuing
operations
|
|
(1,637)
|
(1,172)
|
(2,678)
|
|
|
|
|
|
|
|
Adjusting items to loss before tax
|
|
661
|
262
|
1,536
|
|
Exclude movements on deferred tax assets and liabilities taken to income
statement
|
|
(10)
|
(6)
|
(219)
|
|
Adjusting items to loss for the period
|
|
651
|
256
|
1,317
|
|
|
|
|
|
|
|
Adjusted loss for the period
|
|
(986)
|
(916)
|
(1,361)
|
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 May 2016 - unaudited
4 TAXATION
Income tax expense has been calculated based on management's best estimate of the weighted average annual income tax
rate expected for the year ending 30 November 2016.
5 EARNINGS PER SHARE
The calculation of earnings per ordinary share is based on the following:
|
|
|
6 months
ended
31 May
2016
|
6 months
ended
31 May
2015
|
Year
ended
30 November
2015
|
|
|
|
Number
|
Number
|
Number
|
|
|
|
|
|
|
|
Weighted average number of shares
|
|
407,615,604
|
407,590,795
|
407,590,795
|
|
Adjustment in respect of SIP shares
|
|
(496,132)
|
(634,280)
|
(619,749)
|
|
Weighted average number of shares used in basic earnings per share calculations
|
|
407,119,472
|
406,956,515
|
406,971,046
|
|
Dilutive effect of share options
|
|
14,178,495
|
13,362,538
|
13,265,034
|
|
Weighted average number of shares used in diluted earnings per share
calculations
|
|
421,297,967
|
420,319,053
|
420,236,080
|
|
|
Note
|
6 months
ended
31 May
2016
£'000
|
6 months
ended
31 May
2015
£'000
Restated
|
Year
ended
30 November
2015
£'000
Restated
|
|
|
|
|
|
|
|
Profit / (loss) for the period from continuing and discontinued operations attributable to
equity shareholders
|
|
10,188
|
(941)
|
(2,523)
|
|
Deduct profit from discontinued operations
|
|
11,825
|
231
|
155
|
|
Loss for the period from continuing operations attributable to equity
shareholders
Adjustment to earnings
|
3
|
(1,637)
651
|
(1,172)
256
|
(2,678)
1,317
|
|
Adjusted (loss) / profit from continuing operations attributable to equity
shareholders
|
|
(986)
|
(916)
|
(1,361)
|
|
|
|
|
|
|
|
Earnings / (loss) per share from continuing and discontinued operations
|
|
|
|
|
|
- Basic loss per share
|
|
2.50p
|
(0.23)p
|
(0.62)p
|
|
- Diluted loss per share
|
|
2.42p
|
(0.23)p
|
(0.62)p
|
|
|
|
|
|
|
|
Loss per share from continuing operations
|
|
|
|
|
|
- Basic (loss) / earnings per share
|
|
(0.40)p
|
(0.29)p
|
(0.66)p
|
|
- Diluted (loss) / earnings per share
|
|
(0.40)p
|
(0.29)p
|
(0.66)p
|
|
|
|
|
|
|
|
Adjusted loss per share
|
|
|
|
|
|
- Adjusted basic (loss) / earnings per
share
|
|
(0.24)p
|
(0.23)p
|
(0.33)p
|
|
- Adjusted diluted (loss) / earnings per
share
|
|
(0.24)p
|
(0.22)p
|
(0.33)p
|
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 May 2016 - unaudited
6 ANALYSIS OF NET FUNDS
Bank net funds
|
|
At 30 November
2015
£'000
|
Cash flow
£'000
|
Non-cash changes
£'000
|
At 31 May
2016
£'000
|
|
|
|
|
|
|
|
|
Cash at bank and in hand
|
542
|
11,013
|
-
|
11,555
|
|
Classified as assets held for resale
|
1
|
(1)
|
-
|
-
|
|
Cash and cash equivalents
|
543
|
11,012
|
-
|
11,555
|
|
|
|
|
|
|
|
Bank loans due within one year
|
(66)
|
33
|
(28)
|
(61)
|
|
Debt due within one year
|
(66)
|
33
|
(28)
|
(61)
|
|
|
|
|
|
|
|
Bank loans due after one year
|
(28)
|
-
|
28
|
-
|
|
Debt due after one year
|
(28)
|
-
|
28
|
-
|
|
|
|
|
|
|
|
Net funds
|
449
|
11,045
|
-
|
11,494
|
|
|
|
|
|
|
|
|
|
The Group also has an overdraft facility of £750,000 which, when utilised, is repayable on demand
and charges an effective interest rate of 4.5% over the lending Bank's base rate.
7 PROVISIONS
The provision of £60,000 at 31 May 2016, 30 November 2015 and 31 May 2015 relates to an estimate of dilapidation
costs due on termination of a lease.
8 DISCONTINUED OPERATIONS
On 4 January 2016, the Group's 70% interest in iGaming Business Ltd was disposed of for total cash consideration of
£14,549,000. This business was reported in the Sport & Gaming reportable segment. Further details are given in
note 9.
During the period to 31 May 2016, the Directors have also decided to discontinue the Optimus books business and
focus investment on the conferences and high-value subscription products. Results from the Optimus books business were
reported in the Education segment.
The combined results of all discontinued operations which have been discontinued in the current
and prior periods included in the condensed consolidated statement of comprehensive income are set out below. The
comparative profits from discontinued operations have been restated to include those operations classified as discontinued in the
current year.
Electric Word plc
NOTES TO THE INTERIM REPORT
For the six months ended 31 May 2016 - unaudited
8 DISCONTINUED OPERATIONS (continued)
|
Profit for the year from discontinued operations
|
6 months
ended
31 May
2016
£'000
|
6 months
ended
31 May
2015
£'000
|
Year
ended
30 November
2015
£'000
|
|
|
|
|
|
|
Revenue
|
150
|
3,218
|
7,011
|
|
Expenses
|
(305)
|
(2,763)
|
(5,183)
|
|
(Loss) / profit before tax
|
(155)
|
455
|
1,828
|
|
Attributable tax credit / (charge)
|
58
|
(93)
|
(1,415)
|
|
|
(97)
|
362
|
413
|
|
Profit / (loss) on disposal of operation (note 9)
|
11,795
|
(23)
|
(27)
|
|
|
|
|
|
|
Profit for the year from discontinued operations
|
11,698
|
339
|
386
|
|
|
|
|
|
|
|
|
|
|
9 BUSINESS COMBINATIONS
As described in note 8, on 4 January 2016, the Group's 70% interest in iGaming Business Ltd was disposed of.
Details of the assets and liabilities disposed of, and the calculation of the profit and loss on disposal are given in the table
below.
|
|
|
|
|
6 months ended 31 May 2016
|
|
Non-current assets
|
|
|
|
|
|
Goodwill
|
|
|
|
500
|
|
Intangible fixed assets
|
|
|
|
71
|
|
Current assets
|
|
|
|
|
|
Cash
|
|
|
|
220
|
|
Trade and other debtors
|
|
|
|
1,550
|
|
Intercompany
|
|
|
|
1,003
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
|
|
|
(737)
|
|
Deferred income
|
|
|
|
(922)
|
|
Current and deferred tax
|
|
|
|
(44)
|
|
|
|
|
|
|
|
Net assets disposed of
|
|
|
|
1,641
|
|
Directly attributable costs of disposal
|
|
|
|
1,113
|
|
Profit on disposal included in discontinued operations
|
|
|
|
11,795
|
|
Consideration received satisfied by cash
|
|
|
|
14,549
|
|
|
|
|
|
|
|
Net cash inflow arising on disposal
|
|
|
|
|
|
Consideration received in cash
|
|
|
|
14,549
|
|
Less directly attributable costs of disposal
|
|
|
|
(1,113)
|
|
|
|
|
|
13,436
|
|
Less cash disposed of
|
|
|
|
(220)
|
|
Less settlement of intercompany balance
|
|
|
|
(1,550)
|
|
Net cash inflow
|
|
|
|
11,666
|
|
|
|
|
|
|
Notes to Editors
Electric Word plc is a specialist media group supporting
professional development, management effectiveness and market intelligence through a wide range of digital, print and live
formats. Our approach is to identify niche communities within our market sectors and fulfil our
customers' key information needs to enable them to make better-informed decisions and so improve their performance. We achieve
this by developing a deep understanding of our sectors and our customers' challenges and information requirements.
The Group provides content in many different formats, including market data, subscription
websites, magazines, conferences, face-to-face training, online training, books, special reports, bespoke research and
consultancy.
Following the disposal of the Group's stake in iGaming Business, it is now composed of two
market-facing divisions:
Education
Optimus Education supports the professional development of teachers and school leaders through an
online subscription-based information and training service and through live conferences. Speechmark specialises in
resources for speech therapists, mental health professionals and teachers.
Sport
SportBusiness Group provides business insight, data and analysis to executives in the global
business of sport. It supports sports industry professionals who work in governing bodies, the media, sports marketing,
sponsorship and club and event management through market data, subscription websites, magazines, special reports, bespoke
research and consultancy.
This information is provided by RNS
The company news service from the London Stock Exchange
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IR AKBDKPBKDKFB