Final Results
28 Noviembre 2006 - 1:01AM
UK Regulatory
RNS Number:7901M
Charterhouse Communications PLC
28 November 2006
CHARTERHOUSE COMMUNICATIONS PLC
28 NOVEMBER 2006
CHARTERHOUSE COMMUNICATIONS PLC ("Charterhouse" or the "Company")
PRELIMINARY RESULTS FOR THE YEAR TO 31 MAY 2006
CHAIRMAN'S STATEMENT
Pre tax loss for the group for the year to 31st May 2006 was #797k (2005:
#248k). Turnover was #9.57m (2005: #9.64m).
Loss per share was 0.62p (2005: 0.36p). No dividend is recommended.
Before interest, amortisation of goodwill and intangible assets, operating
profit was #479k (2005 #1.027m).
Cost of sales increased by #487K, primarily due to production and distribution
costs associated with the conversion to weekly frequency of Mortgage Introducer
in June 2005 and a subscription drive for Successful Personal Investing - both
of which delivered results in increased turnover in these areas.
The latter half of the year, in common with other magazine and newspaper
publishers, proved challenging for Charterhouse in the context of the increasing
importance of digital activities and the internet as a source of news and
information. As reported at the half year, in order to meet this challenge, we
restructured our core publishing activities into Mortgage, Treasury, Wealth
Enhancement and Online divisions, each led by a key member of the management
team. Together with Brand and Co and Successful Personal Investing, these
divisions make up the Group.
Mortgage
This division includes the trade titles Mortgage Introducer and the monthly
Mortgage Finance Gazette; consumer monthly What Mortgage; the yearbooks we
publish and a growing mortgage related events business. Turnover for this
division grew by just under 9% with Mortgage Introducer cementing its market
leading position with the successful conversion to weekly frequency. Conditions
were however considerably more difficult in the consumer sector and this was
reflected in the "on the page" advertising revenues of our monthly What
Mortgage.
Wealth
This division includes Company REFS (for which from August 2006 we have been
taking its data feed from the London Stock Exchange ("LSE")); the consumer
magazines What Investment and What Investment Trust; monthly newsletter
Investing for Growth; and our business-to-business directories The Pinsent
Masons Company Guide and The Corporate Register.
After adjusting for the closure of Personal Finance magazine in June 2005,
turnover for this division fell by 6% primarily accounted for by the impact of
online data on the demand for our directories. However, subscription revenues
for this division grew substantially driven by a successful campaign to attract
subscribers to What Investment, thus reducing the magazine's reliance on an
increasingly marginalised newsstand distribution.
Online
This new division brings together the web presence for all of our titles under
one management and one sales team to maximise potential and increase our
expertise. Online revenues grew from 3% of total revenue to a little under 6%
year-on-year. However, investment in setting up and resourcing our new online
division meant that contribution from this vital activity fell. Growth
associated with our mortgage-related content matched our expectations but the
consumer investment-related content, while generating increased revenue, did
not.
Treasury
This division is focussed wholly on Treasury Management International.
It was a tough year for the Treasury portfolio where revenues fell by 25%,
though 20% of this fall can be tracked to timing differences in the publishing
of major supplements.
The major bright spot for the year however was the successful launch of a new
edition into the USA which greatly enhances the global reach of the title.
Brand
Revenues grew by 14% on enhanced volumes of business in a good year for Brand.
Successful Personal Investing
Following the decision last year to recommence marketing of this home study
course and its associated newsletter The IRS Report, revenue grew by 81% in the
year. Improving conditions in the equity markets encouraged us to invest
significantly in a marketing campaign to generate new customers. These results
represent the initial impact and led to an improved contribution for the year.
Financing
In a year of investing in the future, in particular in a new content management
system for our web activities and in development of the LSE feed, cash flow from
operating activities was #414k (2005: #818k). These necessary investments led to
an increase in overall indebtedness of #272k after the repayment of our term
loan.
Staff
It has been a challenging year for our staff and the Board is grateful to them
for the way in which they have responded to the threats and the opportunities of
the environment in which we are operating.
The year has seen the launch of a weekly, no small undertaking, a complete
revamp of our resources and approach to our digital business, the development
from scratch, with the LSE, of a new data feed for REFS, innovation in our
events business with the launch of the highly successful Mortgage Introducer
Broker awards at the Savoy Hotel, relaunches of both What Mortgage and What
Investment and the launch of Treasury Management International USA.
Outlook
We expect the conditions encountered by our consumer titles to remain subdued
but are hopeful that our trade titles and business related activities will be
more robust.
The benefit of the cost savings associated with the REFS data feed will begin to
come through as should the benefit of being free to market REFS online, which we
were previously prevented from doing by our arrangements with our former data
supplier.
Development of digital revenues is a priority. We continue to carefully monitor
for signs of strength and weakness the way we are structured and the
effectiveness of the packages we are offering our customers in print and on the
web.
Since the year end Brand and Co have concluded arrangements to take on the
supply of books and materials to Clifford Chance, having been successful in an
open bidding process and this will contribute to both volume and contribution at
the business, which is due to move into new modern, leased, accommodation early
in the New Year.
In recent months the directors have been undertaking a fundamental strategic
review of the Group's operations. In order to maintain the appropriate level of
investment in our key areas for digital development, and those areas where our
printed products can benefit, we are examining closely the options we have,
including the opportunity for making cost savings. We hope that we will have
implemented the outcome of this strategic review in the next few months, and be
able to report on this more fully when we release the interim results to 30
November 2006, in February 2007.
PETER STRONG
Chairman
27 November 2006
CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the year ended 31 May 2006
2006 2005
#'000 #'000
TURNOVER 9,570 9,643
Cost of sales (7,116) (6,629)
--------- ---------
GROSS PROFIT 2,454 3,014
ADMINISTRATIVE EXPENSES
Amortisation of goodwill and intangible assets (880) (880)
Other administrative expenses (1,975) (1,987)
--------- ---------
(2,855) (2,867)
OPERATING (LOSS)/PROFIT (401) 147
Interest receivable 4 3
Interest payable (400) (398)
--------- ---------
(LOSS)ON ORDINARY ACTIVITIES BEFORE TAXATION (797) (248)
Taxation 28 (190)
--------- ---------
(LOSS) FOR THE FINANCIAL YEAR (769) (438)
========= =========
Basic and diluted (loss) per share (0.62p) (0.36p)
All transactions arise from continuing operations.
The accompanying accounting policies and notes form an integral part of these
financial statements.
CONSOLIDATED STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the year ended 31 May 2006
2006 2005
#'000 #'000
(LOSS) FOR THE FINANCIAL YEAR (769) (438)
Unrealised surplus on revaluation of land and buildings 177 -
--------- ---------
TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR (592) (438)
========= =========
CONSOLIDATED BALANCE SHEET
As at 31 May 2006
Group Group
2006 2005
#'000 #'000
FIXED ASSETS
Intangible assets 7,237 8,053
Tangible assets 353 129
------- -------
7,590 8,182
======= =======
CURRENT ASSETS
Stocks 50 90
Debtors: amounts due within one year 2,386 2,019
Debtors: amounts due after one year:
Deferred taxation 217 207
Cash at bank and in hand 313 119
------- -------
2,966 2,435
CREDITORS: amounts due within one year (7,924) (6,653)
------- -------
NET CURRENT LIABILITIES (4,958) (4,218)
------- -------
TOTAL ASSETS LESS CURRENT LIABILITIES 2,632 3,964
CREDITORS: amounts due after more than one year (1,768) (2,508)
-------- --------
NET ASSETS 864 1,456
======== ========
CAPITAL AND RESERVES
Called up share capital 1,233 1,233
Revaluation reserve 177 -
Profit and loss account (546) 223
------- -------
EQUITY SHAREHOLDERS' FUNDS 864 1,456
======== ========
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 31 May 2006
2006 2005
#'000 #'000
Cash flow from operating activities 414 818
Returns on investments and servicing of finance (396) (395)
Taxation (38) (64)
Capital expenditure and financial investment (152) (33)
--------- ---------
CASH FLOW BEFORE FINANCING (172) 326
Financing (840) (910)
--------- ---------
DECREASE IN CASH IN THE YEAR (1,012) (584)
========= =========
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT
DECREASE IN CASH IN THE YEAR (1,012) (584)
Cash flow from changes in debt 740 910
--------- ---------
MOVEMENT IN NET DEBT IN THE YEAR (272) 326
Net debt at 1 June 2005 (5,507) (5,833)
-------- --------
NET DEBT AT 31 MAY 2006 (5,779) (5,507)
======== ========
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1. Nature Of Financial Information
The financial information contained in this statement does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985.
The summarised balance sheet at 31 May 2006 and the summarised profit and loss
account, summarised cash flow statement and associated notes for the year then
ended have been extracted from the Group's 2006 financial statements. Those
financial statements have received an unqualified audit report containing an
emphasis of matter paragraph in respect of the future funding of the Group's
operations. The financial statements will be delivered to the Registrar of
Companies after the Annual General Meeting. The financial information for the
year ended 31 May 2005 is an abridged version of the group's published financial
statements for that year which contained an unqualified audit report, and which
have been filed with the Registrar of Companies.
2. Basis of preparation - going concern
The Group continues to rely on support from the bank. The existing loan
facility, which stood at #2.6 million at 31 May 2006, is repayable over a term
ending in May 2009. The overdraft facility, which stood at #3.5 million at 31
May 2006, is currently #4.0 million and is due for renewal on 31 December 2006.
The directors of Charterhouse Communications plc have prepared profit and loss
and cash flow forecasts indicating that the level of debt over the next 12
months will reduce and which are dependent on both the trading performances of
the businesses in the Group and certain debt reducing options.
Subject to the above, the bank have confirmed that they see no reason why the
facilities will not be continued to be offered during that period, in line with
cash flow forecasts.
The directors are therefore confident that they will obtain the necessary
facilities and hence consider it is appropriate to prepare the financial
statements on a going concern basis.
3. Additional Information
The following are the results before amortisation of goodwill and intangible
assets. This amortisation has no effect on cash flows or corporation tax
payable.
2006 2005
#'000 #'000
Profit before interest, tax and amortisation 479 1,027
Profit before tax and amortisation 83 632
Retained profit before amortisation 111 442
Earnings per share before amortisation of goodwill and intangible assets
2006 2005
Basic 0.09p 0.36p
Diluted 0.09p 0.34p
4. Earnings per Share
Basic earnings per share are calculated by dividing the profit after tax for the
year by the weighted average number of shares in issue during the year. In
order to calculate diluted earnings per share, the weighted average number of
ordinary shares in issue is adjusted to reflect the assumed conversion at the
beginning of the year, or at the date of grant where later, of all dilutive
share options outstanding at the end of the year. An adjusted earnings per share
figure which removes the effect of the amortisation of goodwill and intangible
assets, which have no cash effect, is also shown.
2006 2005
#'000 #'000
(Loss) after tax, after amortisation (769) (438)
Amortisation 880 880
---------- ----------
Profit after tax, before amortisation 111 442
========== ==========
Million Million
Weighted average number of shares 123.3 123.3
Dilutive options outstanding 4.7 5.6
---------- ----------
Diluted average number of shares 128.0 128.9
========== ==========
2006 2005
Pence Pence
Basic earnings per share
Standard (0.62) (0.36)
Adjusted for amortisation 0.09 0.36
Diluted earnings per share
Adjusted for amortisation 0.09 0.34
5. No dividend is being declared (2005: nil)
6. The annual report and accounts will be posted to shareholders and will
also be available on request from the Company's registered office at Arnold
House, 36-41 Holywell Lane, London EC2A 3SF.
7. The Annual General Meeting will be held at The Ante Room, The Honourable
Artillery Company, Armoury House, City Road, London, EC1Y 2BQ on Wednesday 10
January 2007 at 11am.
This information is provided by RNS
The company news service from the London Stock Exchange
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