TIDMDIGI
RNS Number : 8797C
Digital Marketing Group PLC
23 November 2009
Date:23 November 2009
On behalf of: Digital Marketing Group plc ("DMG", "the Company" or "the
Group")
Embargoed: 0700hrs
Digital Marketing Group plc
Interim Results 2009/2010
PROFITS FLAT - PIPELINE BEST FOR 12 MONTHS
Digital Marketing Group plc (AIM: DIGI), the UK's largest digital marketing
agency today announced its interim results for the six months ended 30 September
2009.
Performance Highlights
* Gross profits GBP17.44m (2008: GBP18.72m)
* EBITDA before share based payments GBP3.63m (2008: GBP3.85m)
* Profit before tax ("PBT") before amortisation and share based payment charges
GBP2.93m (2008: GBP3.15m)
* Like for like costs reduced by GBP4.24m from GBP20.80m to GBP16.56m
* Net debt GBP6.02m; undrawn banking facilities of GBP4.94 million
* Adjusted basic earnings per share 3.20 pence (2008: 3.75 pence)
Commenting on the results, Stephen Davidson, Chairman of Digital Marketing Group
plc, said: "Despite the economic environment, we have produced a resilient set
of results and remain confident for the coming months.
"As I stated at our full year results in July 2009, we have experienced a tough
trading environment along with the rest of the industry; but our extremely
experienced management team and innovative product offering mean we are now in
the ideal position to take advantage of the increased spend in digital marketing
which we anticipate during 2010 and beyond."
Ben Langdon, Chief Executive of Digital Marketing Group plc, added: "We are
seeing some exceptional performances in our businesses as well as greater
momentum in our new business pipeline across the Group; many of our companies
are busier now than at any time in the past 12 months.
"Our business is stronger than ever following a large cost reduction programme
and strong levels of existing client spend. Combined with our position as the
UK's largest digital marketing business, we are extremely optimistic about the
future, particularly as clients begin to re-invest in marketing.
"We predicted a tough six months but these results are predominantly in line
with the past two years' performance and give us confidence for the rest of the
year."
Enquiries:
Digital Marketing Group plc
Ben Langdon, Chief Executive Via Redleaf Communications
Keith Sadler, Group Finance Director
Redleaf Communications
Emma Kane/ Paul Dulieu/ Kathryn Hurford0207 566 6700
Cenkos Securities
Ivonne Cantu/ Julian Morse 0207 397 8900
Notes to Editors:
* Digital Marketing Group (AIM: DIGI) listed on AIM in October 2006, employs over
550 people.
* Digital Marketing Group is the UK's largest digital marketing agency (Campaign
Magazine, January 2009).
* At the heart of the company is Digital Brain - a process which enables the real
time integration of "digital, direct and data". This helps create unique contact
strategies for each individual based on their historical data and real time
interactions regardless of channel.
Digital Marketing Group's development strategy consists of three key elements:
* "organic growth" - driven by growth within the individual businesses and the
application of a group business development programme;
* "buy and build" - through the selective acquisition of a number of well run and
profitable businesses with complementary skills in digital direct marketing; and
* the creation of new revenue streams from within the existing talents and
resources of the group.
Publication quality photographs are available via Redleaf Communications.
INTERIM RESULTS
We have produced a resilient set of results, despite the difficult trading
conditions we and our peers have been experiencing, with clients deferring spend
or taking longer over their internal decision making process, which in turn has
affected our revenue and trading visibility.
The Group reported gross revenues of GBP24.70 million for the six months ended
30 September 2009 against GBP26.48 million for the equivalent period in the
prior year. As a result gross profit fell from GBP18.72 million to GBP17.44
million for the six months ended 30 September 2009.
Our digital agencies have shown strength with our e-commerce business in
particular doing exceptionally well, up 34% in terms of PBT year on year.
By comparison, our data business with its strength in the financial services
industry sector, has been less robust with a fall in revenue of GBP3.4 million.
However, within this business we have made the greatest cost reduction totalling
GBP2.3 million ensuring it has an appropriate cost base for any recovery in this
sector.
During the period we received partial settlement on a contractual obligation
from a client who has gone into liquidation, amounting to GBP1 million, which
has been disclosed within other income.
Operating expenses fell by 2.2% from GBP16.93 million to GBP16.56 million.
However, on a like for like basis these costs have been reduced from GBP20.80
million, a reduction of GBP4.24 million. We have taken active measures and tough
decisions to manage our cost base and streamline the business, which has
primarily meant a reduction in staff numbers. We reduced our headcount by 87
people to 560 between September 2008 and September 2009, resulting in a
reduction of GBP3.21 million in operating expenses. This concentration on cost
management is already showing results for our digital agencies and will mean
improved financial performance in the future.
The action we have taken and continue to take will ensure we have an appropriate
cost base. Our adjusted earnings before interest, tax, depreciation,
amortisation and charges for share based payments was GBP3.63 million compared
to GBP3.85 million for the six months ended 30 September 2008.
Following the strategic acquisitions of Cybercom Limited and Gasbox Limited in
October 2008, our net debt increased to GBP9.40 million, however we have since
reduced this figure by GBP3.38 million, hence net debt currently stands at
GBP6.02 million (compared to reported debt at 30 Sept 2008 of GBP1.82 million).
The cost of financing this debt has fallen, however we have not had the
advantage of increased deposit rates on any short term cash available to us. Our
net financing cost rose by GBP201,000 to GBP375,000 for the six months ended 30
September 2009.
Clients are showing significant interest in Digital Brain Search, a product we
launched four months ago for the Pay Per Click ("PPC") market. We have won a
number of assignments so far with new prospects being developed. This new
product is of particular importance, due to PPC being the single biggest area
for online marketing spend in the UK. Digital Brain Search is part of a
portfolio of products that DMG has developed, under the Digital Brain brand
banner.
Recent client wins include Berghaus, Sony Ericsson, Royal Mail, SPAR, History
Channel, Yorkshire Building Society, Holiday Extras, Oval Group and SeaFrance.
These wins are across all our businesses and reflect the depth and quality of
the innovative services we are providing to our clients.
Outlook
Research published by the European Interactive Advertising Association stated
that 94% of marketers expected to spend more online next year than in 2009 and
that they had spent more online in 2009 than 2008. As the UK's largest digital
marketing business, we are experiencing increased levels of new business
activity which will convert into revenue for the Group. This, together with the
cost reduction programme, means that our improving PBT run rate now gives us
confidence for the second half.
Ben Langdon
Chief Executive
20 November 2009
Consolidated Interim Income Statement (unaudited)
+--------------------------------+------+----------+----------+------------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 March |
| | | 30 Sept | 30 Sept | 2009 |
| | | 2009 | 2008 | |
+--------------------------------+------+----------+----------+------------+
| | Note | GBP000 | GBP000 | GBP000 |
+--------------------------------+------+----------+----------+------------+
| Continuing operations | | | | |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
| Revenue | 4 | 24,701 | 26,475 | 56,654 |
+--------------------------------+------+----------+----------+------------+
| Direct costs | | (7,260) | (7,755) | (15,101) |
+--------------------------------+------+----------+----------+------------+
| Gross profit | | 17,441 | 18,720 | 41,553 |
+--------------------------------+------+----------+----------+------------+
| Other operating income | | 1,133 | 137 | 192 |
+--------------------------------+------+----------+----------+------------+
| Amortisation | | (956) | (758) | (1,863) |
+--------------------------------+------+----------+----------+------------+
| Operating expenses | | (16,555) | (16,927) | (36,161) |
+--------------------------------+------+----------+----------+------------+
| Operating profit | | 1,063 | 1,172 | 3,721 |
+--------------------------------+------+----------+----------+------------+
| Finance income | | 2 | 145 | 97 |
+--------------------------------+------+----------+----------+------------+
| Finance costs | | (377) | (319) | (704) |
+--------------------------------+------+----------+----------+------------+
| Net financing costs | | (375) | (174) | (607) |
+--------------------------------+------+----------+----------+------------+
| Profit before tax | | 688 | 998 | 3,114 |
+--------------------------------+------+----------+----------+------------+
| Taxation | 5 | (552) | (667) | (1,674) |
+--------------------------------+------+----------+----------+------------+
| Profit for the period | | 136 | 331 | 1,440 |
| attributable to shareholders | | | | |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
| Attributable to equity holders | | 136 | 331 | 1,440 |
| of the company | | | | |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
| Earnings per ordinary share | 6 | | | |
+--------------------------------+------+----------+----------+------------+
| From continuing operations | | | | |
+--------------------------------+------+----------+----------+------------+
| - basic | | 0.20p | 0.50p | 2.15p |
+--------------------------------+------+----------+----------+------------+
| -diluted | | 0.18p | 0.45p | 1.92p |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
Consolidated interim statement of comprehensive income (unaudited)
+--------------------------------+------+----------+----------+------------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 March |
| | | 30 Sept | 30 Sept | 2009 |
| | | 2009 | 2008 | |
+--------------------------------+------+----------+----------+------------+
| | | GBP000 | GBP000 | GBP000 |
+--------------------------------+------+----------+----------+------------+
| Profit for the period | | 136 | 331 | 1,440 |
+--------------------------------+------+----------+----------+------------+
| Other comprehensive income | | 57 | 40 | (286) |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
| Total comprehensive income | | 193 | 371 | 1,154 |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
Consolidated interim balance sheet (unaudited)
+--------------------------------+------+----------+----------+------------+
| | | 30 Sept | 30 Sept | 31 March |
| | | 2009 | 2008 | 2009 |
+--------------------------------+------+----------+----------+------------+
| | Note | GBP'000 | GBP'000 | GBP'000 |
+--------------------------------+------+----------+----------+------------+
| Assets | | | | |
+--------------------------------+------+----------+----------+------------+
| Non-current assets | | | | |
+--------------------------------+------+----------+----------+------------+
| Property, plant and equipment | | 1,816 | 2,096 | 2,057 |
+--------------------------------+------+----------+----------+------------+
| Goodwill | | 46,973 | 39,249 | 47,051 |
+--------------------------------+------+----------+----------+------------+
| Other intangible assets | | 15,435 | 12,639 | 16,116 |
+--------------------------------+------+----------+----------+------------+
| | | 64,224 | 53,984 | 65,224 |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
| Current assets | | | | |
+--------------------------------+------+----------+----------+------------+
| Inventories | | 154 | 842 | 196 |
+--------------------------------+------+----------+----------+------------+
| Trade and other receivables | | 9,226 | 8,422 | 10,683 |
+--------------------------------+------+----------+----------+------------+
| Cash and cash equivalents | | 11,421 | 11,499 | 12,227 |
+--------------------------------+------+----------+----------+------------+
| | | 20,801 | 20,763 | 23,106 |
+--------------------------------+------+----------+----------+------------+
| Total assets | | 85,025 | 74,747 | 88,330 |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
| Liabilities | | | | |
+--------------------------------+------+----------+----------+------------+
| Current liabilities | | | | |
+--------------------------------+------+----------+----------+------------+
| Bank overdraft | 7 | (9,783) | (8,976) | (8,806) |
+--------------------------------+------+----------+----------+------------+
| Other interest bearing loans | 7 | (1,691) | (1,886) | (1,691) |
| and borrowings | | | | |
+--------------------------------+------+----------+----------+------------+
| Financial derivatives | 8 | (424) | (155) | (481) |
+--------------------------------+------+----------+----------+------------+
| Trade and other payables | | (11,929) | (9,696) | (15,678) |
+--------------------------------+------+----------+----------+------------+
| Tax payable | | (1,518) | (1,927) | (1,475) |
+--------------------------------+------+----------+----------+------------+
| Provisions | | (58) | (168) | (147) |
+--------------------------------+------+----------+----------+------------+
| | | (25,403) | (22,808) | (28,278) |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
| Non-current liabilities | | | | |
+--------------------------------+------+----------+----------+------------+
| Other interest bearing loans | 7 | (5,966) | (2,458) | (7,612) |
| and borrowings | | | | |
+--------------------------------+------+----------+----------+------------+
| Provisions | | - | (64) | - |
+--------------------------------+------+----------+----------+------------+
| Deferred tax liabilities | | (4,396) | (3,668) | (4,661) |
+--------------------------------+------+----------+----------+------------+
| | | (10,362) | (6,190) | (12,273) |
+--------------------------------+------+----------+----------+------------+
| Total liabilities | | (35,765) | (28,998) | (40,551) |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
| Net assets | | 49,260 | 45,749 | 47,779 |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
| Equity | | | | |
+--------------------------------+------+----------+----------+------------+
| Capital and reserves | | | | |
| attributable to equity holders | | | | |
| of the company | | | | |
+--------------------------------+------+----------+----------+------------+
| Share capital | | 33,689 | 33,814 | 33,689 |
+--------------------------------+------+----------+----------+------------+
| Share premium account | | 6,608 | 6,621 | 6,608 |
+--------------------------------+------+----------+----------+------------+
| Hedging reserve | | (424) | (155) | (481) |
+--------------------------------+------+----------+----------+------------+
| Capital redemption reserve | | 125 | - | 125 |
+--------------------------------+------+----------+----------+------------+
| Share option reserve | | 5,810 | - | 5,810 |
+--------------------------------+------+----------+----------+------------+
| Retained earnings | | 3,452 | 5,469 | 2,028 |
+--------------------------------+------+----------+----------+------------+
| Total equity | | 49,260 | 45,749 | 47,779 |
+--------------------------------+------+----------+----------+------------+
Consolidated interim cash flow statement (unaudited)
+--------------------------------+------+----------+----------+------------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 March |
| | | 30 Sept | 30 Sept | 2009 |
| | | 2009 | 2008 | |
+--------------------------------+------+----------+----------+------------+
| |Note | GBP000 | GBP000 | GBP000 |
+--------------------------------+------+----------+----------+------------+
| Cash flow from operating | | | | |
| activities | | | | |
+--------------------------------+------+----------+----------+------------+
| Profit for the period | | 136 | 331 | 1,440 |
+--------------------------------+------+----------+----------+------------+
| Adjustment for: | | | | |
+--------------------------------+------+----------+----------+------------+
| Depreciation, amortisation and | | 1,282 | 1,067 | 2,531 |
| impairment | | | | |
+--------------------------------+------+----------+----------+------------+
| Financial income | | (2) | (145) | (97) |
+--------------------------------+------+----------+----------+------------+
| Financial expenses | | 377 | 319 | 704 |
+--------------------------------+------+----------+----------+------------+
| Share based payment expense | | 1,288 | 1,389 | 2,814 |
+--------------------------------+------+----------+----------+------------+
| Taxation | | 552 | 667 | 1,674 |
+--------------------------------+------+----------+----------+------------+
| Decrease in trade and other | | 1,509 | 1,160 | 1,631 |
| receivables | | | | |
+--------------------------------+------+----------+----------+------------+
| Decrease/(increase) in | | 42 | (52) | 594 |
| inventories | | | | |
+--------------------------------+------+----------+----------+------------+
| (Decrease) in trade and other | | (3,553) | (2,543) | (2,929) |
| payables | | | | |
+--------------------------------+------+----------+----------+------------+
| Cash generated from operation | | 1,631 | 2,193 | 8,362 |
+--------------------------------+------+----------+----------+------------+
| Interest received | | 2 | 145 | 97 |
+--------------------------------+------+----------+----------+------------+
| Interest paid | | (272) | (319) | (530) |
+--------------------------------+------+----------+----------+------------+
| Tax paid | | (826) | (196) | (2,207) |
+--------------------------------+------+----------+----------+------------+
| Net cash flow from operating | | 535 | 1,823 | 5,722 |
| activities | | | | |
+--------------------------------+------+----------+----------+------------+
| Cash flows from investing | | | | |
| activities | | | | |
+--------------------------------+------+----------+----------+------------+
| Proceeds from the sale of | | 3 | - | 6 |
| property, plant and equipment | | | | |
+--------------------------------+------+----------+----------+------------+
| Acquisitions of subsidiaries, | | 7 | (3,565) | (7,610) |
| net of cash acquired | | | | |
+--------------------------------+------+----------+----------+------------+
| Payment of contingent | | (278) | - | (3,566) |
| consideration for prior year | | | | |
| acquisitions | | | | |
+--------------------------------+------+----------+----------+------------+
| Addition of intangible assets | | (275) | - | (105) |
+--------------------------------+------+----------+----------+------------+
| Acquisition of property, plant | | (87) | (263) | (283) |
| and equipment | | | | |
+--------------------------------+------+----------+----------+------------+
| Net cash outflow from | | (630) | (3,828) | (11,558) |
| investing activities | | | | |
+--------------------------------+------+----------+----------+------------+
| Cash flows from financing | | | | |
| activities | | | | |
+--------------------------------+------+----------+----------+------------+
| Proceeds from new loan and | | - | - | 6,600 |
| draw down of bank facilities | | | | |
+--------------------------------+------+----------+----------+------------+
| Repayment of borrowings | | (1,688) | (575) | (2,268) |
+--------------------------------+------+----------+----------+------------+
| Payments to redeem share | | - | - | (178) |
| capital | | | | |
+--------------------------------+------+----------+----------+------------+
| Net cash (outflow)/inflow from | | (1,688) | (575) | 4,154 |
| financing activities | | | | |
+--------------------------------+------+----------+----------+------------+
| Net (decrease) in cash, cash | | (1,783) | (2,580) | (1,682) |
| equivalents and bank | | | | |
| overdrafts | | | | |
+--------------------------------+------+----------+----------+------------+
| Cash and cash equivalents at | | 3,421 | 5,103 | 5,103 |
| beginning of period | | | | |
+--------------------------------+------+----------+----------+------------+
| Cash and cash equivalents at | | 1,638 | 2,523 | 3,421 |
| end of period | | | | |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
| Cash and cash equivalents | | | | |
| comprise: | | | | |
+--------------------------------+------+----------+----------+------------+
| Cash at bank and in hand | | 11,421 | 11,499 | 12,227 |
+--------------------------------+------+----------+----------+------------+
| Bank overdrafts | 7 | (9,783) | (8,976) | (8,806) |
+--------------------------------+------+----------+----------+------------+
| Cash and cash equivalents at | | 1,638 | 2,523 | 3,421 |
| end of period | | | | |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
| | | | | |
+--------------------------------+------+----------+----------+------------+
Consolidated interim statement of changes in equity (unaudited)
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| | Share | Share | Hedging | Shares | Capital | Share | Retained | Total equity |
| | capital | premium | reserve | to be | redemption | option | earnings | |
| | | account | | issued | reserve | reserve | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| | GBP'000 | GBP'000 | GBP000 | GBP'000 | GBP'000 | GBP'000 | GBP000 | GBP'000 |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Balance at 1 | 32,655 | 5,954 | (195) | 536 | - | - | 3,749 | 42,699 |
| April 2008 | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Cash flow | - | - | 40 | - | - | - | - | 40 |
| hedges | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Profit for the | - | - | - | - | - | - | 331 | 331 |
| period | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Total | - | - | 40 | - | - | - | 331 | 371 |
| comprehensive | | | | | | | | |
| income for the | | | | | | | | |
| period | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Credit in | - | - | - | - | - | - | 1,389 | 1,389 |
| respect of | | | | | | | | |
| share-based | | | | | | | | |
| payments | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Issue of | 1,159 | 667 | - | - | - | - | - | 1,826 |
| share capital | | | | | | | | |
| - business | | | | | | | | |
| combination | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Release of | - | - | - | (536) | - | - | - | (536) |
| reserve | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| | 1,159 | 667 | - | (536) | - | - | 1,389 | 2,679 |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Balance at 30 | 33,814 | 6,621 | (155) | - | - | - | 5,469 | 45,749 |
| September 2008 | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Cash flow | - | - | (326) | - | - | - | - | (326) |
| hedges | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Profit for the | - | - | - | - | - | - | 1,109 | 1,109 |
| period | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Total | - | - | (326) | - | - | - | 1,109 | 783 |
| comprehensive | | | | | | | | |
| income for the | | | | | | | | |
| period | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Transfer on | - | (13) | - | - | - | - | 13 | - |
| exercise of | | | | | | | | |
| share options | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Credit in | - | - | - | - | - | - | 1,425 | 1,425 |
| respect of | | | | | | | | |
| share based | | | | | | | | |
| payments | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Transfer to | - | - | - | - | - | 5,810 | (5,810) | - |
| share option | | | | | | | | |
| reserve | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Purchase of | (125) | - | - | - | 125 | - | (178) | (178) |
| own shares | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| | (125) | (13) | - | - | 125 | 5,810 | (4,550) | 1,247 |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Balance at 31 | 33,689 | 6,608 | (481) | - | 125 | 5,810 | 2,028 | 47,779 |
| March 2009 | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Cash flow | - | - | 57 | - | - | - | - | 57 |
| hedges | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Profit for the | - | - | - | - | - | - | 136 | 136 |
| period | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Total | - | - | 57 | - | - | - | 136 | 193 |
| comprehensive | | | | | | | | |
| income for the | | | | | | | | |
| period | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Credit in | - | - | - | - | - | - | 1,288 | 1,288 |
| respect of | | | | | | | | |
| share based | | | | | | | | |
| payments | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| | - | - | - | - | - | - | 1,288 | 1,288 |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
| Balance at 30 | 33,689 | 6,608 | (424) | - | 125 | 5,810 | 3,452 | 49,260 |
| September 2009 | | | | | | | | |
+----------------+---------+---------+---------+---------+------------+---------+----------+---------------+
1. General Information
Digital Marketing Group plc (the "Company") is incorporated and domiciled in the
United Kingdom. The Company is listed on the AIM market of the London Stock
Exchange. The registered address is 30-33 Minories, Tower Hill, London, EC3N
1DD.
The interim financial information was approved for issue on 20 November 2009.
2. Basis of preparation
The consolidated interim financial statements for the six months ended 30
September 2009 have been prepared in accordance with applicable accounting
standards and under the historical cost convention except for certain financial
instruments that are carried at fair value.
The financial information for the year ended 31 March 2009 set out in this
interim report does not constitute statutory accounts as defined in Section 240
of the Companies Act 1985. The Group's statutory financial statements for the
year ended 31 March 2009 have been filed with the Registrar of Companies. The
auditor's report on those financial statements was unmodified.
The consolidated interim financial information should be read in conjunction
with the annual financial statements for the year ended 31 March 2009, which
have been prepared in accordance with International Financial Reporting
Standards (IFRSs).
3. Accounting policies
Except as described below, the principal accounting policies of Digital
Marketing Group plc and its subsidiaries ("the Group") are consistent with those
set out in the Group's 2009 annual report and financial statements.
Taxes on income in the interim periods are accrued using the tax rate that would
be applicable to expected total annual earnings.
The following new standards and amendments to standards are mandatory for the
first time for the financial year beginning 1 April 2009.
IAS 1, "Presentation of financial statements" (revised 2007). The revised
standard prohibits the presentation of items of income and expenses (that is
"non-owner changes in equity") in the statement of changes in equity, requiring
"non-owner changes in equity" to be presented separately from owner changes in
equity. All "non-owner changes in equity" are required to be shown in a
performance statement.
Entities can choose whether to present one performance statement (the statement
of comprehensive income) or two statements (the income statement and statement
of comprehensive income).
The Group has elected to present two statements: an income statement and a
statement of comprehensive income. The interim financial statements have been
prepared under the revised disclosure requirements.
IFRS 8, "Operating segments". IFRS 8 replaces IAS 14, "Segment reporting". It
requires a "management approach" under which segment information is presented on
the same basis as that used for internal reporting purposes. The chief operating
decision-maker has been identified as the Group Chief Executive. Historically,
the Group reported three segments, Online marketing and media, Direct marketing
services and Data services and consultancy this has now been reduced to two
segments, Digital marketing and Data and data related services
4. Segment information (unaudited)
The chief operating decision-maker has been identified as the Group Chief
Executive. The Group Chief Executive reviews the Group's internal reporting in
order to assess performance and allocate resources. Management has determined
the operating segments based on these reports. Digital Marketing provide full
agency services for clients on digital platforms. Data and data related services
provide data analytics and voice services to clients.
The Group Chief Executive assesses the performance of the operating segments
based on gross profit and operating profit before interest and tax.
Total assets exclude intangible assets, cash and external borrowings which have
not been allocated to business segments.
No single client accounts for more than 10% of group revenue. All the group's
activities are carried out within the UK.
+----------------------------+-----------+----------+-------------+------------+
| Six months ended 30 | | | | |
| September 2009 | | | | |
+----------------------------+-----------+----------+-------------+------------+
| | Digital | Data and | Unallocated | Total |
| | marketing | data | | |
| | | related | | |
| | | services | | |
+----------------------------+-----------+----------+-------------+------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-----------+----------+-------------+------------+
| Revenue | 17,623 | 7,348 | (270) | 24,701 |
+----------------------------+-----------+----------+-------------+------------+
| Direct costs | (6,990) | (507) | 237 | (7,260) |
+----------------------------+-----------+----------+-------------+------------+
| Gross profit | 10,633 | 6,841 | (33) | 17,441 |
+----------------------------+-----------+----------+-------------+------------+
| Other operating income | 5 | 1,128 | - | 1,133 |
+----------------------------+-----------+----------+-------------+------------+
| Operating expenses | (8,466) | (5,889) | (586) | (14,941) |
| excluding depreciation, | | | | |
| amortisation and charges | | | | |
| for share based payments | | | | |
+----------------------------+-----------+----------+-------------+------------+
| Operating profit before | 2,172 | 2,080 | (619) | 3,633 |
| depreciation, amortisation | | | | |
| and charges for share | | | | |
| based payments | | | | |
+----------------------------+-----------+----------+-------------+------------+
| Depreciation | (168) | (146) | (12) | (326) |
+----------------------------+-----------+----------+-------------+------------+
| Amortisation | (608) | (348) | - | (956) |
+----------------------------+-----------+----------+-------------+------------+
| Charges for share based | (58) | (187) | (1,043) | (1,288) |
| payments | | | | |
+----------------------------+-----------+----------+-------------+------------+
| Operating profit | 1,338 | 1,399 | (1,674) | 1,063 |
+----------------------------+-----------+----------+-------------+------------+
| Finance income | | | | 2 |
+----------------------------+-----------+----------+-------------+------------+
| Finance costs | | | | (377) |
+----------------------------+-----------+----------+-------------+------------+
| Profit before tax | | | | 688 |
+----------------------------+-----------+----------+-------------+------------+
| Taxation | | | | (552) |
+----------------------------+-----------+----------+-------------+------------+
| Profit for the period from | | | | 136 |
| continuing operations | | | | |
+----------------------------+-----------+----------+-------------+------------+
+----------------------------+-----------+----------+-------------+------------+
| Six months ended 30 | | | | |
| September 2008 | | | | |
+----------------------------+-----------+----------+-------------+------------+
| | Digital | Data and | Unallocated | Total |
| | marketing | data | | |
| | | related | | |
| | | services | | |
+----------------------------+-----------+----------+-------------+------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-----------+----------+-------------+------------+
| Revenue | 17,572 | 9,868 | (965) | 26,475 |
+----------------------------+-----------+----------+-------------+------------+
| Direct costs | (7,319) | (1,401) | 965 | (7,755) |
+----------------------------+-----------+----------+-------------+------------+
| Gross profit | 10,253 | 8,467 | - | 18,720 |
+----------------------------+-----------+----------+-------------+------------+
| Other operating income | 137 | - | - | 137 |
+----------------------------+-----------+----------+-------------+------------+
| Operating expenses | (7,574) | (6,681) | (753) | (15,008) |
| excluding depreciation, | | | | |
| amortisation and charges | | | | |
| for share based payments | | | | |
+----------------------------+-----------+----------+-------------+------------+
| Operating profit before | 2,816 | 1,786 | (753) | 3,849 |
| depreciation, amortisation | | | | |
| and charges for share | | | | |
| based payments | | | | |
+----------------------------+-----------+----------+-------------+------------+
| Depreciation | (188) | (120) | (1) | (309) |
+----------------------------+-----------+----------+-------------+------------+
| Amortisation | (425) | (333) | - | (758) |
+----------------------------+-----------+----------+-------------+------------+
| Charges for share based | (251) | (501) | (858) | (1,610) |
| payments | | | | |
+----------------------------+-----------+----------+-------------+------------+
| Operating profit | 1,952 | 832 | (1,612) | 1,172 |
+----------------------------+-----------+----------+-------------+------------+
| Finance income | | | | 145 |
+----------------------------+-----------+----------+-------------+------------+
| Finance costs | | | | (319) |
+----------------------------+-----------+----------+-------------+------------+
| Profit before tax | | | | 998 |
+----------------------------+-----------+----------+-------------+------------+
| Taxation | | | | (667) |
+----------------------------+-----------+----------+-------------+------------+
| Profit for the period from | | | | 331 |
| continuing operations | | | | |
+----------------------------+-----------+----------+-------------+------------+
| | | | | |
+----------------------------+-----------+----------+-------------+------------+
+----------------------------+-----------+----------+-------------+------------+
| Year ended 31 March 2009 | | | | |
+----------------------------+-----------+----------+-------------+------------+
| | Digital | Data and | Unallocated | Total |
| | marketing | data | | |
| | | related | | |
| | | services | | |
+----------------------------+-----------+----------+-------------+------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-----------+----------+-------------+------------+
| Revenue | 37,141 | 21,141 | (1,628) | 56,654 |
+----------------------------+-----------+----------+-------------+------------+
| Direct costs | (14,237) | (2,492) | 1,628 | (15,101) |
+----------------------------+-----------+----------+-------------+------------+
| Gross profit | 22,904 | 18,649 | - | 41,553 |
+----------------------------+-----------+----------+-------------+------------+
| Other operating income | 192 | - | - | 192 |
+----------------------------+-----------+----------+-------------+------------+
| Operating expenses | (16,703) | (14,180) | (1,574) | (32,457) |
| excluding depreciation, | | | | |
| amortisation and charges | | | | |
| for share based payments | | | | |
+----------------------------+-----------+----------+-------------+------------+
| Operating profit before | 6,393 | 4,469 | (1,574) | 9,288 |
| depreciation, amortisation | | | | |
| and charges for share | | | | |
| based payments | | | | |
+----------------------------+-----------+----------+-------------+------------+
| Depreciation | (360) | (286) | (22) | (668) |
+----------------------------+-----------+----------+-------------+------------+
| Amortisation | (1,197) | (666) | - | (1,863) |
+----------------------------+-----------+----------+-------------+------------+
| Charges for share based | (359) | (865) | (1,812) | (3,036) |
| payments | | | | |
+----------------------------+-----------+----------+-------------+------------+
| Operating profit | 4,477 | 2,652 | (3,408) | 3,721 |
+----------------------------+-----------+----------+-------------+------------+
| Finance income | | | | 97 |
+----------------------------+-----------+----------+-------------+------------+
| Finance costs | | | | (704) |
+----------------------------+-----------+----------+-------------+------------+
| Profit before tax | | | | 3,114 |
+----------------------------+-----------+----------+-------------+------------+
| Taxation | | | | (1,674) |
+----------------------------+-----------+----------+-------------+------------+
| Profit for the period from | | | | 1,440 |
| continuing operations | | | | |
+----------------------------+-----------+----------+-------------+------------+
| | | | | |
+----------------------------+-----------+----------+-------------+------------+
+----------------------------+-----------+----------+-------------+------------+
| Total assets | Digital | Data and | Unallocated | Total |
| | marketing | data | | |
| | | related | | |
| | | services | | |
+----------------------------+-----------+----------+-------------+------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-----------+----------+-------------+------------+
| 30 September 2009 | 10,054 | 7,267 | 67,704 | 85,025 |
+----------------------------+-----------+----------+-------------+------------+
| 31 March 2009 | 12,260 | 7,621 | 68,449 | 88,330 |
+----------------------------+-----------+----------+-------------+------------+
| 30 September 2008 | 9,456 | 7,668 | 57,623 | 74,747 |
+----------------------------+-----------+----------+-------------+------------+
| | | | | |
+----------------------------+-----------+----------+-------------+------------+
5. Taxation (unaudited)
A reconciliation of the charge that would result from applying the standard UK
corporation tax rate to profit before tax to the tax charge is given below.
+----------------------------------+----+----------+----------+------------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 March |
| | | 30 Sept | 30 Sept | 2009 |
| | | 2009 | 2008 | |
+----------------------------------+----+----------+----------+------------+
| | | GBP000 | GBP000 | GBP000 |
+----------------------------------+----+----------+----------+------------+
| Profit before tax | | 688 | 998 | 3,114 |
+----------------------------------+----+----------+----------+------------+
| Tax charge thereon at UK | | 193 | 279 | 872 |
| corporation tax rate of 28% | | | | |
| (2008: 28%) | | | | |
+----------------------------------+----+----------+----------+------------+
| Factors affecting tax charge: | | | | |
+----------------------------------+----+----------+----------+------------+
| Non-deductible expenses | | 240 | 212 | 572 |
+----------------------------------+----+----------+----------+------------+
| Share based payment charges | | 361 | 390 | 788 |
+----------------------------------+----+----------+----------+------------+
| Depreciation for period in | | 28 | - | 74 |
| excess of capital allowances | | | | |
+----------------------------------+----+----------+----------+------------+
| Other | | 11 | - | (5) |
+----------------------------------+----+----------+----------+------------+
| Utilisation of tax losses | | - | - | (109) |
+----------------------------------+----+----------+----------+------------+
| Prior year adjustment | | 37 | - | (32) |
+----------------------------------+----+----------+----------+------------+
| Total current period charge | | 870 | 881 | 2,160 |
+----------------------------------+----+----------+----------+------------+
| Deferred tax credit - | | (318) | (214) | (486) |
| origination and reversal of | | | | |
| temporary timing differences | | | | |
+----------------------------------+----+----------+----------+------------+
| Recognised in the consolidated | | 552 | 667 | 1,674 |
| income statement | | | | |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
6. Earnings per share (unaudited)
+----------------------------------+----+----------+----------+------------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 March |
| | | 30 Sept | 30 Sept | 2009 |
| | | 2009 | 2008 | |
+----------------------------------+----+----------+----------+------------+
| | | Pence | Pence | Pence per |
| | | per | per | share |
| | | share | share | |
+----------------------------------+----+----------+----------+------------+
| From continuing operations | | | | |
+----------------------------------+----+----------+----------+------------+
| Basic | | 0.20p | 0.50p | 2.15p |
+----------------------------------+----+----------+----------+------------+
| Diluted | | 0.18p | 0.45p | 1.92p |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
Earnings per share have been calculated by dividing the profit attributable to
shareholders by the weighted average of ordinary shares in issue during the
period. The calculations of basic and diluted earnings per share are:
+----------------------------------+----+----------+----------+------------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 March |
| | | 30 Sept | 30 Sept | 2009 |
| | | 2009 | 2008 | |
+----------------------------------+----+----------+----------+------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+----+----------+----------+------------+
| Profit for the period | | 136 | 331 | 1,440 |
| attributable to shareholders | | | | |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
| Weighted average number of | | Number | Number | Number |
| ordinary shares in issue: | | '000 | '000 | '000 |
+----------------------------------+----+----------+----------+------------+
| Basic | | 67,378 | 66,250 | 66,851 |
+----------------------------------+----+----------+----------+------------+
| Adjustment for share options, | | 7,001 | 6,706 | 7,964 |
| warrants and contingent shares | | | | |
+----------------------------------+----+----------+----------+------------+
| Diluted | | 74,379 | 72,956 | 74,815 |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
| Adjusted earnings per share | | | | |
+----------------------------------+----+----------+----------+------------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 March |
| | | 30 Sept | 30 Sept | 2009 |
| | | 2009 | 2008 | |
+----------------------------------+----+----------+----------+------------+
| | | Pence | Pence | Pence per |
| | | per | per | Share |
| | | share | share | |
+----------------------------------+----+----------+----------+------------+
| From continuing operations | | | | |
+----------------------------------+----+----------+----------+------------+
| Basic adjusted earnings per | | 3.20p | 3.75p | 8.76p |
| share | | | | |
+----------------------------------+----+----------+----------+------------+
| Diluted adjusted earnings per | | 2.90p | 3.41p | 7.82p |
| share | | | | |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
Adjusted earnings per share have been calculated by dividing the profit
attributable to shareholders before amortisation and charges for share based
payments by the weighted average of ordinary shares in issue during the period.
The numbers used in calculating the basic and diluted adjusted earnings per
share is reconciled below:
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
| | | Six | Six | Year |
| | | months | months | ended |
| | | ended | ended | 31 March |
| | | 30 Sept | 30 Sept | 2009 |
| | | 2009 | 2008 | |
+----------------------------------+----+----------+----------+------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+----+----------+----------+------------+
| Profit before tax | | 688 | 998 | 3,114 |
+----------------------------------+----+----------+----------+------------+
| Amortisation | | 956 | 758 | 1,863 |
+----------------------------------+----+----------+----------+------------+
| Charges for share based payments | | 1,383 | 1,610 | 3,036 |
+----------------------------------+----+----------+----------+------------+
| Adjusted profit attributable to | | 3,027 | 3,366 | 8,013 |
| shareholders from continuing | | | | |
| operations | | | | |
+----------------------------------+----+----------+----------+------------+
| Current period tax charge | | (870) | (881) | (2,160) |
+----------------------------------+----+----------+----------+------------+
| | | 2,157 | 2,485 | 5,853 |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
7. Bank overdraft, borrowings and loans (unaudited)
+----------------------------------+----+----------+----------+------------+
| | | 30 Sept | 30 Sept | 31 March |
| | | 2009 | 2008 | 2009 |
+----------------------------------+----+----------+----------+------------+
| Summary | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+----+----------+----------+------------+
| Bank overdraft | | 9,783 | 8,976 | 8,806 |
+----------------------------------+----+----------+----------+------------+
| Borrowings, undiscounted cash | | 7,657 | 4,344 | 9,303 |
| flows | | | | |
+----------------------------------+----+----------+----------+------------+
| | | 17,440 | 13,320 | 18,109 |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
| Borrowings are repayable as | | | | |
| follows: | | | | |
+----------------------------------+----+----------+----------+------------+
| Within 1 year | | | | |
+----------------------------------+----+----------+----------+------------+
| Bank overdraft | | 9,783 | 8,976 | 8,806 |
+----------------------------------+----+----------+----------+------------+
| Borrowings | | 1,848 | 2,131 | 1,984 |
+----------------------------------+----+----------+----------+------------+
| Total due within 1 year | | 11,631 | 11,107 | 10,790 |
+----------------------------------+----+----------+----------+------------+
| Less future interest | | (157) | (245) | (293) |
+----------------------------------+----+----------+----------+------------+
| Total due within 1 year | | 11,474 | 10,862 | 10,497 |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
| In more than one year but not | | 1,812 | 1,252 | 1,928 |
| more than 2 years | | | | |
+----------------------------------+----+----------+----------+------------+
| In more than 2 years but not | | 4,284 | 1,166 | 6,021 |
| more than 3 years | | | | |
+----------------------------------+----+----------+----------+------------+
| In more than 3 years but not | | - | 279 | - |
| more than 4 years | | | | |
+----------------------------------+----+----------+----------+------------+
| Total due in more than 1 year | | 6,096 | 2,697 | 7,949 |
+----------------------------------+----+----------+----------+------------+
| Less future interest | | (130) | (239) | (337) |
+----------------------------------+----+----------+----------+------------+
| Total due in more than 1 year | | 5,966 | 2,458 | 7,612 |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
| Average interest rates at the | | % | % | % |
| balance sheet date were: | | | | |
+----------------------------------+----+----------+----------+------------+
| Overdraft | | 5.00 | 7.25 | 5.00 |
+----------------------------------+----+----------+----------+------------+
| Mortgage | | - | 7.00 | 7.00 |
| Term loan | | 1.85 | 7.70 | 2.96 |
+----------------------------------+----+----------+----------+------------+
| Term loan | | 3.35 | - | 3.46 |
+----------------------------------+----+----------+----------+------------+
| Revolving credit facility | | 2.32 | - | 3.46 |
+----------------------------------+----+----------+----------+------------+
As the loans are at variable market rates their carrying amount is equivalent to
their fair value.
In 2007 the Group purchased an interest rate swap of 6.19% for the period 2007
to 2012 for GBP4.0 million of its borrowings.
The borrowing facilities available to the Group at 30 September 2009 was
GBP11.13 million (2008: GBP11.14 million) and, taking into account cash balances
within the Group, there was GBP4.94 million (2008: GBP9.27 million) of available
borrowing facilities.
A composite accounting system is set up with the Group's bankers, which allows
debit balances on overdraft to be offset across the Group with credit balances.
+--------------------------+------------+-----------+------------+------------+
| Reconciliation of net | Cash at | Overdraft | Borrowings | Net debt |
| debt | bank and | | | |
| | in hand | | | |
+--------------------------+------------+-----------+------------+------------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+------------+-----------+------------+------------+
| 30 September 2009 | 11,421 | (9,783) | (7,657) | (6,019) |
+--------------------------+------------+-----------+------------+------------+
| 31 March 2009 | 12,227 | (8,806) | (9,303) | (5,882) |
+--------------------------+------------+-----------+------------+------------+
| 30 September 2008 | 11,499 | (8,976) | (4,344) | (1,821) |
+--------------------------+------------+-----------+------------+------------+
| | | | | |
+--------------------------+------------+-----------+------------+------------+
8. Financial derivatives (unaudited)
+----------------------------------+----+----------+----------+------------+
| | | 30 Sept | 30 Sept | 31 March |
| | | 2009 | 2008 | 2009 |
+----------------------------------+----+----------+----------+------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
| Interest rate swap | | 424 | 155 | 481 |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
In 2007 the Group purchased an interest rate swap of 6.19% for the period 2007
to 2012 for GBP4.0 million of its borrowings. This swap is designated a hedge of
the interest expense relating to the Group loans. The contract was marked to
market at 30 September 2009 and was a net liability of GBP424,000 (2008:
GBP155,000).
9. Provisions (unaudited)
+----------------------------------+----+----------+----------+------------+
| | | 30 Sept | 30 Sept | 31 March |
| | | 2009 | 2008 | 2009 |
+----------------------------------+----+----------+----------+------------+
| | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------------+----+----------+----------+------------+
| At the beginning of the period | | 147 | 518 | 358 |
+----------------------------------+----+----------+----------+------------+
| Utilised during the year | | (89) | (68) | (211) |
+----------------------------------+----+----------+----------+------------+
| At the end of the period | | 58 | 450 | 147 |
+----------------------------------+----+----------+----------+------------+
| | | | | |
+----------------------------------+----+----------+----------+------------+
Provisions relate to leases in the Group where the commercial benefit has either
ceased or will cease before the normal expiry period.
10. Share capital (unaudited)
On 4 September 2008, by way of a special resolution, the Company reorganised and
enlarged its authorised share capital of GBP50,049,999 consisting of 100,000,000
ordinary shares of 50 pence each and 49,999 redeemable preference shares of
GBP1.00 each into authorised share capital of GBP55,000,000 consisting of
200,000,000 ordinary shares of 5 pence each and 100,000,000 deferred shares of
45 pence each and cancelling 49,999 redeemable preference shares of GBP1.00
each.
Authorised:
+----------------------------+----------+--------------+----------+----------+
| | | | | |
+----------------------------+----------+--------------+----------+----------+
| | 50p | GBP1.00 | 45p | 5p |
| | ordinary | redeemable | deferred | ordinary |
| | shares | preference | shares | shares |
| | | shares | | |
+----------------------------+----------+--------------+----------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+----------+--------------+----------+----------+
| Authorised share capital | 50,000 | 50 | - | - |
| at 31 March 2009 | | | | |
+----------------------------+----------+--------------+----------+----------+
| Cancelled | - | (50) | - | - |
+----------------------------+----------+--------------+----------+----------+
| 5p Ordinary | (5,000) | - | - | 5,000 |
+----------------------------+----------+--------------+----------+----------+
| 45p Deferred | (45,000) | - | 45,000 | - |
+----------------------------+----------+--------------+----------+----------+
| Increase in authorised | - | - | - | 5,000 |
| share capital | | | | |
+----------------------------+----------+--------------+----------+----------+
| At 30 September 2009 | - | - | 45,000 | 10,000 |
+----------------------------+----------+--------------+----------+----------+
| | | | | |
+----------------------------+----------+--------------+----------+----------+
Allotted, issued and fully paid
+----------------------------+--------------+--------------+------------+---------+
| | | | | |
+----------------------------+--------------+--------------+------------+---------+
| | 50p | 45p deferred | 5p | |
| | ordinary | shares | ordinary | |
| | shares | | shares | |
+----------------------------+--------------+--------------+------------+---------+
| | Number | Number | Number | GBP'000 |
+----------------------------+--------------+--------------+------------+---------+
| Issued share capital at 31 | 67,378,520 | - | - | 33,689 |
| March 2009 | | | | |
+----------------------------+--------------+--------------+------------+---------+
| | | | | |
+----------------------------+--------------+--------------+------------+---------+
| Conversion | (67,378,520) | 67,378,520 | 67,378,520 | - |
+----------------------------+--------------+--------------+------------+---------+
| | | | | |
+----------------------------+--------------+--------------+------------+---------+
| At 30 September 2009 | - | 67,378,520 | 67,378,520 | 33,689 |
+----------------------------+--------------+--------------+------------+---------+
| | | | | |
+----------------------------+--------------+--------------+------------+---------+
The 5 pence ordinary shares have the same rights (including voting and dividend
rights and rights on a return of capital) as the previous 50 pence ordinary
shares. Holders of the 45 pence deferred shares do not have any right to receive
notice of any general meeting of the Company or any right to attend, speak or
vote at any such meeting. The deferred share holders are not entitled to receive
any dividend or other distribution and shall on a return of assets in a winding
up of the Company entitle the holders only to the repayment of the amounts paid
up on the shares after the amount paid to the holders of the new ordinary shares
exceeds GBP1,000,000 per new ordinary share. The deferred shares will also be
incapable of transfer and no share certificates will be issued in respect of
them.
11. Related party transactions (unaudited)
There were no significant changes in the nature and size of related party
transactions for the period to those disclosed in the Annual Report for the year
ended 31 March 2009.
INDEPENDENT REVIEW REPORT TO DIGITAL MARKETING GROUP PLC
Introduction
We have been engaged by the company to review the interim financial information
in the interim report for the six months ended 30 September 2009 which comprises
the consolidated interim income statement, consolidated interim statement of
comprehensive income, consolidated interim balance sheet, consolidated interim
cash flow statement and consolidated interim statement of changes in equity and
the related notes 1 to 11. We have read the other information contained in the
interim financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the interim financial
information.
This report is made solely to the company in accordance with guidance contained
in ISRE (UK and Ireland) 2410, "Review of Interim Financial Information
performed by the Independent Auditor of the Entity". Our review work has been
undertaken so that we might state to the company those matters we are required
to state to them in a review report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the company, for our review work, for this report, or for the
conclusions we have formed.
Directors' responsibilities
The interim report is the responsibility of, and has been approved by, the
directors. The AIM rules of the London Stock Exchange require that the
accounting policies and presentation applied to the interim figures are
consistent with those which will be adopted in the annual accounts having regard
to the accounting standards applicable for such accounts. The annual financial
statements of the group are prepared in accordance with the basis of
presentation set out in Note 2.
Our responsibility
Our responsibility is to express to the company a conclusion on the interim
financial information in the interim report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe
that the financial information in the interim report for the six months ended 30
September 2009 is not prepared, in all material respects, in accordance with the
basis of accounting described in Note 2.
Grant Thornton UK LLP
Chartered Accountants
Sheffield
20 November 2009
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QBLFLKFBEFBD
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