RNS Number:6775J
Screen FX PLC
29 September 2006
Press Release 29 September 2006
ScreenFX plc
("ScreenFX" or "the Group")
Interim Results
ScreenFX plc (AIM:SFX), the leader in digital screen media, announces its
Interim Results for the six months ended 30 June 2006.
Highlights
* Established leading screen network with 20 premier UK shopping malls
(2005: 10 malls)
* Successful initial period for TrainFX service in Central Trains, Birmingham
* Secured valuable contract for expansion of commuter trains network
* Launch of HealthFX division to establish digital networks in health channel
* Media revenues now building
Results Summary
* Turnover for the half year almost double the previous full year at
#1.02 million (2005: #118,000)
* Operating losses increase to #2.41 million (2005: #1.6 million)
* Cash in hand of #764,000 at 30 June 2006 (2005: #1.3 million)
Commenting on the results, Dave Clark, Chief Executive, said: "ScreenFX
continues to make strong progress and has now established itself as a leading
player in the digital out-of-home market place. Through MallFX we have built
the premium digital screen network in 25 of the UK's 'super malls', whilst our
TrainFX and HealthFX divisions have also established a foothold in two
strategically important channels and we believe these opportunities can add
significant incremental revenue streams to the Group in the medium term.
"The media industry now expects that the digital outdoor sector will see
significant growth in the coming years and we are confident that the ScreenFX
business is well placed to capitalise in this marketplace."
For further information:
ScreenFX plc
David Clark, Chief Executive Tel: +44 (0) 161 428 5544
info@screenfx.com www.screenfx.com
Media enquiries:
Abchurch
Henry Harrison-Topham / Laura Riascos Tel: +44 (0) 20 7398 7700
henry.ht@abchurch-group.com www.abchurch-group.com
Chairman and CEO's Statement
Overview
ScreenFX continues to develop its strategy of building market share in the fast
growing 'out-of-home' digital advertising market. We have established a leading
position in the UK's premium shopping malls with a dominant share of the top 50
retail malls. We have also secured valuable entry points to the transport and
health sectors and believe that these will add considerably to the Group's
growth potential.
Financial Results
6 months to June 2006 6 months to June 2005 Year to December 2005
#'000 #'000 #'000
Turnover 1,017 118 543
Operating Loss (2,412) (1,599) (3,481)
Retained Loss (2,582) (1,635) (3,591)
Loss per share - pence (0.94) (1.12) (2.39)
Cash at hand 764 1,280 136
Turnover for the half-year improved to #1.02 million (2005: #118,000) and we are
encouraged by this increase in the Group's revenues. We have made significant
investments in the build phase of our digital networks, doubling our shopping
mall sites since the same time last year, and we are now starting to see
development of media sales revenue. We hope to capitalise on this building
momentum throughout 2006 and into 2007 as the network acquires critical scale
and becomes even more attractive to its key media targets.
The total Group operating loss for the period was #2.41 million (2005: loss #1.6
million). Cash in hand stood at approximately #764,000 as at 30 June 2006.
On 3 May 2006 the Group placed 300,000,000 ordinary shares at 1 pence each
raising #2.8 million after costs to support the continued development of screen
networks, and to satisfy the general working capital requirements of the Group.
Shortly after the balance sheet date on 29 August 2006 the Company announced the
acquisition of POPtv. This acquisition will compliment the existing business of
the Group strengthening its media sales network, customer base and internal
teams and will help underpin the improving revenue performance of the business.
Operating Review
The key driver to our development remains the rollout of our networks to achieve
critical mass in terms of audience reach, thereby achieving revenue adoption
amongst our target media buying customers.
In our core MallFX division we have grown our annualised audience to over 300
million shoppers in premium malls across the UK. We continued to advance
negotiations with other leading mall owners and we expect to reach an audience
in excess of 450 million by the end of 2006. In May we announced the signing of
a long term agreement to add Drake Circus in Plymouth to our network, a new
development in the South West region which is due to open in October.
As we continue to build critical mass, many national brand advertisers have used
our media and we are confident that revenues will continue to grow. During the
first half of the year we also completed a successful test of the regional media
sales marketplace and we expect a roll out of this initiative to make a
significant revenue contribution in the second half of 2006, and into 2007.
In May we announced the re-branding of the business and the establishment of
five key operating divisions: MallFX, TrainFX, HealthFX, BigFX, and LiveFX.
The TrainFX division had reached an important milestone in December 2005 with
the launch of the service on board Central Trains in Birmingham. In the
following months the service has been extremely well received by both the
management of National Express and the travelling public. We have continued to
evolve the high quality content supported by both BSkyB and the BBC. In May we
also announced a major new agreement which will enable the roll-out of the
TrainFX on-board service during 2007.
The HealthFX division has successfully installed digital networks in a number of
hospital and healthcare locations across the UK in both the public and private
sectors. The division's innovative products, which support the demand for more
modern patient information and communication, are now attracting considerable
interest.
BigFX is a successful niche operator in the large format out-of-home banner
sector. Plans are being progressed to develop a network of large format digital
displays in prime locations, which the Group sees as a natural and potentially
valuable progression as the digital outdoor marketplace gathers momentum.
The LiveFX division is a specialist provider of creative marketing and content
services to both internal operating divisions and external clients. This
division enables the Group to offer a full service to media clients and will
play an important role as many businesses make the shift from traditional to
digital marketing programmes.
Funding
The directors appreciate that the balance sheet in the short term requires
strengthening and are working towards securing additional sources of finance in
order to develop the business to its full potential.
Outlook
The Group continues to make strong progress and has now established itself as a
leading player in the digital out-of-home market place. We have built the
premium screen network in leading UK shopping malls, seen the start of the media
sales cycle building, and we will continue to add long term contracts that
deliver further critical mass for our core MallFX division.
Our TrainFX and HealthFX divisions have also established a foothold in two
strategically important channels and we believe these opportunities can add
significant incremental revenue streams to the Group in the medium term.
Importantly, having invested in building our networks and the organisational
capacity that our operations require, we believe we now have the infrastructure
in place to support longer term profitable growth.
The media industry now expects that the digital outdoor sector will see
significant growth in the coming years and we are confident that the ScreenFX
business is well placed to capitalise in this marketplace.
Sir Geoffrey Pattie Dave Clark
Chairman Chief Executive
29 September 2006 29 September 2006
ScreenFX plc
Consolidated Profit and Loss Account
for the six months ended 30 June 2006
Unaudited Audited Unaudited
Six months to Year to Six months to
30 June 2006 31 December 30 June 2005
2005
#'000 #'000 #'000
Group Turnover 1,017 543 118
Cost of Sales (1,066) (949) (313)
Gross Profit / (Loss) (49) (406) (195)
Administrative Expenses (2,299) (3,010) (1,339)
Amortisation of Goodwill (65) (65) (65)
Total Group Operating Loss (2,413) (3,481) (1,599)
Net Interest (payable) / receivable (169) (110) (36)
Loss on ordinary activities before tax (2,582) (3,591) (1,635)
Tax on loss on ordinary activities - - -
Loss on ordinary activities after (2,582) (3,591) (1,635)
taxation
Retained loss for the period (2,582) (3,591) (1,635)
Loss per share
- basic (per share pence) 3 (0.94) (2.39) (1.12)
- diluted (per share pence) n/a n/a n/a
ScreenFX plc
Consolidated Balance Sheet
30 June 2006
Unaudited Audited Unaudited
Six months to Year to Six months to
30 June 2006 31 December 30 June 2005
2005
#'000 #'000 #'000
Fixed Assets
Tangible
Motor Vehicles 7 9 11 13
Office 7 128 68 56
Screen Network & Comp 7 2,367 2,732 1,631
Tangible assets 7 2,504 2,811 1,700
Subtotal
Intangible assets - Goodwill 984 1,049 1,114
Total Fixed Assets 3,488 3,860 2,814
Current Assets
Debtors 1,021 657 380
Cash at bank and in hand 764 136 1,280
Sub-total 1,785 793 1,660
Creditors - amounts falling due within (1,647) (1,529) (676)
one year
Net Current Assets 138 (736) 984
Creditors - amounts falling due after (980) (776) (428)
one year
Net Assets 2,646 2,348 3,370
Capital & Reserves
Called up share capital 4,693 1,693 1,467
Share Premium account 6,145 6,265 5,558
Profit & Loss account (8,192) (5,610) (3,655)
Total Shareholder's Funds 2,646 2,348 3,370
ScreenFX plc
Consolidated Cash Flow Statement
for the six months ended 30 June 2006
Unaudited Audited Unaudited
Six months to Year to Six months to
30 June 2006 31 December 2005 30 June 2005
#'000 #'000 #'000
Net cash outflow from operating 5 (2,212) (2,445) (1,145)
activities
Returns on investment & servicing of
finance
Interest received 6 42 35
Interest paid (175) (152) (71)
Net cash (outflow) for servicing of (169) (110) (36)
finance
Taxation - - -
Capital Expenditure
Purchase of tangible fixed assets (130) (724) (99)
Sales of tangible fixed assets 0 24 21
Net cash (outflow) for capital (130) (700) (78)
expenditure
Acquisitions
Purchase of subsidiaries - - -
Net cash (outflow) before use of liquid (2,511) (3,255) (1,259)
resources
Financing
Issue of ordinary share capital 3,000 3,020 2,000
Expenses of share issue (120) (167) (80)
Hire purchase and leasing loans 353 120 59
received
Loans and hire purchase repaid (94) (248) (106)
Net cash inflow from financing 3,139 2,725 1,873
Increase/ (Decrease) in Cash 628 (530) 614
Reconciliation of net cash
Net cash at beginning of period 136 666 666
Net cash acquired with subsidiaries - - -
Increase in net funds from cash flows 628 (530) 614
Net cash at end of period 764 136 1,280
NOTES TO THE INTERIM ANNOUNCEMENT
for the six months ended 30 June 2006
1. Basis of Preparation of Interim Financial Information
The unaudited Interim Report was approved by the Board of Directors on 29
September 2006.
The financial information contained in this statement does not constitute
statutory accounts as defined in section 240 of the Companies Act 1985. The
accounts have been prepared in accordance with applicable accounting standards
and under the historical cost accounting rules.
The comparative figures for the period ended 30 June 2005 and the period ended
31 December 2005 have been extracted from the unaudited interim results and the
audited Group Accounts for the respective periods. The audited Group accounts,
on which the auditors issued an unqualified opinion, have been delivered to the
Registrar of Companies and did not contain a statement under s237(2) or (3)
Companies Act 1985.
The interim financial statement has been prepared in accordance with the
accounting policies which will be in effect for the year ending 31 December
2006.
The accounts are prepared on a going concern basis, which assumes that the Group
will continue in operational existence for the foreseeable future. The Group's
ability to meet its future working capital requirements and therefore continue
as a going concern is dependant on it being able to generate significant
revenues and free cash flow. In common with many early stage businesses and
given the current economic climate, it is very difficult to predict the timing
and extent of future revenues. However, the directors have prepared projections
which they consider to be realistic and which demonstrate that the business can
operate within its existing cash resources and the funds raised from fundraising
and financing initiatives currently engaged by the business. Alternative actions
have been identified in a series of realistically achievable measures that the
Company are committed to taking to mitigate the rate of cash outflow should
revenues not be secured as predicted.
Whilst there is fundamental uncertainty in relation to the above matters, the
directors are in negotiation with potential financiers and based on indications
received so far anticipate a positive outcome and consider that it is
appropriate for the accounts to be prepared on a going concern basis. The
accounts therefore do not include any adjustments that would result from the
Group being unable to continue as a going concern.
Turnover and the loss before taxation were all derived from the Group's
principal activities.
2. Dividends
No dividends have been paid and none are proposed.
3. Loss Per Ordinary Share
The loss attributable to ordinary shareholders and weighted average number of
ordinary shares for the purpose of calculating the diluted earnings per ordinary
share are identical to those used for basic earnings per share. This is because
the exercise of share options would have the effect of reducing the loss per
ordinary share and is therefore not dilutive under the terms of Financial
Reporting Standard 22.
The calculation of the loss per ordinary share is based on a loss of #2,582,000
(period to 30 June 2005: loss of #1,635,000; period to 31 December 2005: loss of
#3,591,000) and on a weighted average of 273,573,230 shares in issue (period to
30 June 2005: 145,925,927 shares; period to 31 December 2005: 169,333,340
shares).
4. Reconciliation of Movement in Group Shareholder's Funds
30 June 31 December 30 June
2006 2005 2005
#'000 #'000 #'000
Loss for period (2,582) (3,591) (1,635)
Net proceeds of ordinary shares issued
- Net cash on placing 2,880 2,853 1,920
Net change in shareholder's funds 298 (738) 284
Shareholder's funds at the beginning of 2,348 3,086 3,086
the period
Shareholder's funds at the end of the 2,646 2,348 3,370
period
5. Reconciliation of operating loss to net cash outflow from operating
activities
30 June 31 December 30 June
2006 2005 2005
#'000 #'000 #'000
Operating Loss (2,413) (3,481) (1,599)
Depreciation and amortisation 502 714 341
Profit / (Loss) on disposal of fixed - (4) (3)
assets
Increase in debtors & prepayments (362) (238) 39
Increase in creditors & accruals 61 564 77
Net cash outflow from Operating (2,212) (2,445) (1,145)
Activities
6. Reconciliation of net cash flow to movement in net debt
30 June 31 December 30 June
2006 2005 2005
#'000 #'000 #'000
Increase / (Decrease) in cash 628 (530) 614
Cash (inflow) / outflow from finance (227) 113 55
leases and invoice discounting
Bank loan repaid 94 15 (8)
Movement in net debt in the period 495 (402) 661
arising from cash flows
New finance leases and hire purchase (129) (795) -
contracts
Movement in net debt in the period 366 (1,197) 661
Net funds/(debt) at beginning of period (1,214) (17) (17)
Net funds/(debt) at the end of period (848) (1,214) 644
7. Fixed Assets
TANGIBLE FIXED ASSETS
Office Equipment
Motor and fixtures & Screen
Vehicles fittings Network Total
#'000 #'000 #'000 #'000
Cost
-Brought forward at 1January 2006 17 134 3,548 3,699
-Additions during the period 67 63 130
-Disposals during the period
As at 30 June 2006 17 201 3,611 3,829
Depreciation
-Brought forward at 1 January 2006 (6) (65) (817) (888)
-Charge during the period (2) (7) (428) (437)
-Disposals during the period
As at 30 June 2006 (8) (72) (1,245) (1,325)
Net Book Value
As at 30 June 2006 9 128 2,367 2,504
As at 31 December 2005 11 69 2,731 2,811
INDEPENDENT REVIEW REPORT BY BAKER TILLY TO SCREENFX PLC
Introduction
We have been instructed by the company to review the financial information set
out in the consolidated profit and loss account, the consolidated balance sheet,
the consolidated cash flow statement and the accompanying notes number 1 to 7
and we have read the other information in the interim statement and considered
whether it contains any apparent misstatements or material inconsistencies with
the financial information.
This report, including the conclusion, has been prepared for and only for the
company for the purpose of their interim statement and for no other purpose. We
do not, therefore in producing this report, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in
writing.
Directors' responsibilities
The interim statement, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors
are responsible for preparing the Interim Statement in accordance with the
Alternative Investment Market Rules which require that the accounting policies
and presentation applied to the interim figures must be consistent with those
that will be adopted in the company's annual accounts.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board as if that Bulletin applied. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions. It is substantially less in scope than an audit
performed in accordance with Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an audit
opinion on the financial information.
Fundamental uncertainty
In reaching our conclusion we have considered the adequacy of the disclosures
made in the interim report and accounts concerning the basis of their
preparation. The interim report and accounts have been prepared on the going
concern basis, the validity of which depends on the group generating projected
revenue and operating within its existing cash resources and raising additional
funds. The accounts do not include any adjustment that would result from its
failure to achieve this. Details relating to the fundamental uncertainty are
described in note 1.
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2006.
Baker Tilly
Chartered Accountants
Brazennose House
Lincoln Square
Manchester
M2 5BL
29 September 2006
This information is provided by RNS
The company news service from the London Stock Exchange
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