RNS Number:9053R
Brightview PLC
27 February 2007
Date: Embargoed until 07.00 hrs, Tuesday 27 February 2007
Contact: Charles Fairbairn (Chairman)
David Laurie (Chief Executive)
Brightview
Tel: 020 7665 3000
Corporate Website: www.brightview.com
Alistair Mackinnon-Musson Mark Williams
Nicola Savage Canaccord Adams Limited
Hudson Sandler Nominated Adviser
Tel: 020 7796 4133 Tel: 020 7050 6500
Email: brightview@hspr.com
Photographs: Available from Hudson Sandler, as above
Brightview plc
Interim Results
The Board of Brightview plc, a leading UK Internet Service Provider ("ISP") with
over 165,000 subscribers, including more than 54,500 on broadband at close of
business yesterday, announces its Interim Results for the six months to 31
December 2006.
Brightview's key product is the provision of broadband access through its owned
brands 'Madasafish' and 'Global Internet', together with the operation of
Waitrose as a virtual ISP ("vISP").
Brightview enjoys a reputation for excellent service, as evidenced by its many
prestigious awards. It has sought to position itself at the 'high end' of the
marketplace, as the provider of top quality Internet and 'phone services,
describing its packages transparently to consumers.
Brightview's current broadband offer includes low-cost access to help-lines, a
free UK domain name, a free static IP address, virus protection, and a full
suite of security products. It also offers a home telephony service at
significantly lower prices than BT, providing broadband customers with a single
bill for their home communications.
Highlights:
* 50,500 broadband subscribers at Dec 2006 (2005: 27,500) - up 84%
* 25% increase in broadband subscribers between June & Dec 2006
* 54,500 broadband subscribers by 26 Feb 2007 (latest available figures)
* Placing to reduce bank indebtedness
* Net debt #1.60m at period end (2005 #3.00m)
* Disposal of loss-making Home Gaming Division in Oct 2006
Commenting Charles Fairbairn, Chairman, said:
"Brightview is now solely focussed in growing its broadband subscriber base.
The board is pleased with the substantial progress achieved in 2006 and looks
forward to 2007 with confidence."
Chairman's Statement
Brightview
Having disposed of its loss making and poorly trading Home Gaming Division in
October 2006, Brightview plc is now a company solely focussed on being a leading
UK Internet Service Provider ("ISP").
Brightview's key product is the provision of broadband access, through its owned
and operated brands 'Madasafish' and 'Global Internet', together with the
operation of Waitrose as a vISP.
Brightview has sought to position itself at the 'high end' of the marketplace,
as the provider of top quality Internet and 'phone services and such packages
are described transparently to consumers. Brightview also enjoys a reputation
for excellent service, as evidenced by its many prestigious awards.
The Company's current broadband offer includes low-cost access to help-lines, a
free UK domain name, a free static IP address, virus protection, and a full
suite of security products. It also offers a home telephony service at
significantly lower prices than BT, providing broadband customers with a single
bill for their home communications.
At 31 December 2006 Brightview had over 50,000 broadband customers, a further
25,000 subscribers on other 'paid for' services and approximately 90,000 dial-up
customers. Total subscribers at the end of December 2006 therefore exceeded
165,000.
Despite the broadband market remaining fiercely competitive, Brightview saw a
further substantial increase in its broadband customer base over the past six
months, with the Group's subscribers increasing 25% to 50,500 from 40,500 as at
the 30 June year end.
Brightview does not seek to compete in the 'free' broadband sector and its
pricing in the 'paid-for' broadband sector is competitive relative to other
service providers. Management believe that Brightview has been able to show
significant growth in subscribers through the quality of customer service and
technical support it provides, which is very appealing to those consumers that
are prepared to pay for their Internet services.
Results
The loss before tax, goodwill write-offs and the loss on sale of the Home Gaming
division in the six months to 31 December 2006 was #0.24 million, (2005 profit:
#2.70 million). After the loss on sale of the Home Gaming division and a
downward revaluation of our investment in DM plc, the result after tax and
goodwill amortisation was a loss of #1.63 million (2005 profit: #1.07 million)
and the loss per share on that basis was 7.1p (2005 earnings: 5.0p).
The table below analyses the trading of the internet division which is the
continuing operation of the group.
Financial Statistics - Internet Division
6 months to 6 months to Year ending
31 Dec 2006 31 Dec 2005 30 June 2006
#'000 #'000 #'000
Sales
Broadband 4,440 2,288 5,777
Dial up 1,396 2,235 4,031
Other 579 638 1,224
6,415 5,161 11,032
EBITDA
Broadband continuing 1,390 689 1,845
Dial up contribution 1,254 1,977 3,582
Other net expenses (1,374) (1,095) (2,440)
1,270 1,571 2,987
Broadband amortisation (649) (329) (911)
Depreciation (84) (86) (171)
Goodwill amortisation (325) (325) (650)
Divisional profit 212 831 1,255
Broadband investment 676 694 1,499
Broadband subscribers 50,500 27,500 40,500
Broadband continuing margins improved compared to the equivalent period last
year, despite the competitive environment faced. High margin dial up volumes
continued to fall as broadband penetration increased. Other income declined as
legacy subscription revenues fell. Expenses were kept at similar levels to the
previous six months.
The cost of provisioning a new broadband customer is spread over 24 months and
is shown as broadband amortisation. The amount spent on provisioning in the
period is shown as broadband investment.
The above analysis excludes central costs of #220,000, the loss in the period of
#416,000 relating to the discontinued operations and the loss on disposal of the
Home Gaming division.
Home Gaming Division
The Group's Home Gaming Division was disposed of on 9 October 2006 for a total
consideration of up to #2 million. The business was acquired by DM plc for
initial consideration of 7.55 million ordinary shares and deferred consideration
of up to #1 million which is also payable in shares. These financial statements
reflect the market value of the shares at 31 December 2006 and attribute no
value to the deferred consideration. This has resulted in a loss on sale of
#1.03 million and goodwill impairment of #0.1 million.
The Division made an operating loss before goodwill amortisation and impairment
in the period to disposal of #0.30 million, compared to profits of #1.87 million
in the six months to 31 December 2005 and profits of #0.18 million in the
previous six months.
Refinancing
On 21 December 2006, the Group raised additional funds of #1.7 million by way of
Placing of 23,226,667 shares at 7.5 pence each. As a result, we were able to
reduce our bank indebtedness with Barclays, in line with our new repayment
obligations.
Outlook
Following the disposal of the loss making Home Gaming division, Brightview is
now a more focussed company - with better prospects facing it going forward.
I would like to thank our Chief Executive, David Laurie and all his staff for
their continued dedication and professionalism to growing our business within a
culture that puts our customers first.
It is great credit to them that in an ongoing fiercely competitive broadband
market, our subscriber base has continued to grow and as at close of business
yesterday, it stood at 54,500 - up 8% in around the past two months.
We will continue to focus on growing and developing our broadband subscriber
base, especially as our Internet activities are now our sole focus and the
distraction of Home Gaming is behind us. We look forward to making further
progress.
Charles Fairbairn
Chairman
27 February 2007
Brightview Plc
Consolidated profit and loss account
Unaudited for the 6 months
Full year
31-Dec-06 31-Dec-05 30-Jun-06
#'000 #'000 #'000
notes discontinued continuing consolidated consolidated consolidated
operations operations
Turnover:
Discontinued operations 320 320 4,336 6,905
Continuing operations 6,415 6,415 5,161 11,032
Turnover 2 6,735 9,497 17,937
Cost of sales (451) (5,187) (5,638) (5,550) (12,069)
Gross profit (131) 1,228 1,097 3,947 5,868
Administrative expenses 3 (285) (1,236) (1,521) (1,931) (13,023)
Operating profit/(loss):
Discontinued operations (416) (416) 1,336 (8,110)
Continuing operations (8) (8) 680 955
Operating profit /(loss) 2 (424) 2,016 (7,155)
Loss on disposal of asset 4 (1,025) (1,025) -
Profit before interest 2 (1,441) (8) (1,449) 2,016 (7,155)
Interest receivable 41 46 113
Interest payable and related charges (291) (218) (420)
Profit on ordinary activities before (1,699) 1,844 (7,462)
taxation
Taxation on profit on ordinary
activities 73 (773) (959)
Profit/(loss) on ordinary activities (1,626) 1,071 (8,421)
after taxation
Loss per ordinary share - basic 5 (7.1)p 5.0p (39.3)p
Fully diluted loss per ordinary share 5 (7.1)p 5.0p (39.3)p
Brightview Plc
Consolidated balance sheet
at 31 December 2006
31-Dec-06 31-Dec-05 30-Jun-06
#'000 #'000 #'000
Fixed assets
Intangible assets 8,162 20,434 10,487
Investments 887 -
-
Tangible assets 297 214 302
9,346 20,648 10,789
Current assets
Stock - - 35
Debtors 2,344 2,596 2,374
Cash at bank and in hand 2,908 3,296 2,737
5,252 5,892 5,146
Creditors: amount falling due within one year (3,535) (3,253) (3,639)
Net current assets 1,717 2,639 1,507
Total assets less current liabilities 11,063 23,287 12,296
Creditors: amounts falling due after more than one year (3,201) (6,000) (4,500)
Net assets 7,862 17,287 7,796
Capital and reserves
Called up share capital 448 10,792 10,792
Deferred shares 10,575 -
-
Share premium account 3,913 2,452 2,452
Merger reserve - 4,482 -
Profit and loss account (7,074) (439) (5,448)
Shareholders' funds 7,862 17,287 7,796
Brightview Plc
Consolidated cashflow statement
Unaudited for the 6 months
31-Dec-06 31-Dec-05 30-Jun-06
#'000 #'000 #'000
Net cash inflow from operating activities 908 1,627 1,876
Returns on investments and servicing of finance
Interest paid (250) (172) (307)
Taxation (276) (897) (1,345)
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (79) (80) (305)
Loss on sale of investments (25) - -
Dividends - - -
Net cash inflow / (outflow) before financing 278 478 (81)
Financing
Loan note repayments (1,800) (1,000) (1,000)
Share issue (net of costs) 1,693 - -
Increase/(decrease) in cash in the period 171 (522) (1,081)
Cash at the beginning of the period 2,737 3,818 3,818
Increase/(decrease) in cash in the period 171 (522) (1,081)
Cash at the end of the period 2,908 3,296 2,737
Loans at the beginning of the period 6,307 7,307 7,307
Decrease in loans in the period (1,800) (1,000) (1,000)
Loans at the end of the period 4,507 6,307 6,307
Reconciliation of profit to net cashflow from operating activities
Operating profit/(loss) (424) 2,016 (7,155)
Depreciation and amortisation 522 940 10,972
Decrease/(increase) in stocks 35 - -
Decrease/(increase) in debtors 74 (53) (16)
(Decrease)/increase in creditors 701 (1,276) (1,925)
Net cash inflow from operating activities 908 1,627 1,876
Notes to the financial statements
1. Basis of preparation
The financial information included in this report does not constitute accounts
for the purpose of section 240 of the Companies Act 1985. The financial
information for the year ended 30 June 2006 has been extracted from the
statutory accounts for that period, a copy of which has been delivered to the
Registrar of Companies. The auditor's report on those statutory accounts was
unqualified and did not contain a statement under Section 273(2) on (3) of the
Companies Act 1985.
The results for the half years ended 31 December 2005 and 31 December 2006 are
unaudited.
2. Discontinued operations
Consolidated profit and loss account
Unaudited for the 6 months
Full year
31-Dec-06 31-Dec-05 30-Jun-06
#'000 #'000 #'000
consolidated discontinued continuing consolidated discontinued continuing consolidated
operations operations operations operations
Turnover 6,735 4,336 5,161 9,497 6,905 11,032 17,937
Cost of sales (5,638) (2,162) (3,388) (5,550) (4,190) (7,879) (12,069)
Gross profit 1,097 2,174 1,773 3,947 2,715 3,153 5,868
Administrative expenses (1,521) (838) (1,092) (1,931) (10,825) (2,198) (13,023)
Operating profit /(loss) (424) 1,336 680 2,016 (8,110) 955 (7,155)
Loss on disposal of asset (1,025) -
-
Profit before interest (1,449) 2,016 (7,155)
3. Administrative expenses
In the six months ended December 2006 administrative expenses include goodwill
amortisation of #325,000 relating to the continuing operations (2005: #325,000
and #530,000 relating to the discontinued operations) and impairment of #113,000
relating to the discontinued operations. In the full year 2006 administrative
expenses include goodwill amortisation of #650,000 relating to the continuing
operations and #1,080,000 relating to the discontinued operations and impairment
of #9,072,000 relating to the discontinued operations.
4. Loss on disposal of assets
The loss on disposal of assets arises from the sale of the Home Gaming Division
on 9 October 2006. Consideration was #1 million in shares in DM plc and
deferred consideration of up to #1 million which is also payable in shares. The
shares are held as fixed asset investments and their realisation is restricted.
5. Profit per share
For the period to 31 December 2006, the basic loss per share and the fully
diluted loss per share have been calculated on the loss for the period and on
the weighted average number of shares in issue during the period, being
23,477,642 ordinary shares (2005: 21,253,439 ordinary shares).
- ENDS -
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