REG - Aeorema Comms Plc - Interim Report

Aeorema CommunicationsAnnouncement

25/03/2019 07:05

RNS Number : 7954T
Aeorema Communications Plc
25 March 2019
 


Aeorema Communications plc / Index: AIM / Epic: AEO / Sector: Media
 
25 March 2019
Aeorema Communications plc ('Aeorema' or 'the Company')
 
Interim Report
 
Aeorema Communications plc, the AIM-traded live events agency, announces its unaudited results for the six months ended 31 December 2018.
 
Financial & Operational Overview
 
·     Revenues of £1,997,303, a year-on-year increase of 7% (2017: £1,869,439)
·     Operating loss pre-exceptional items of £141,765 (2017: profit £81,028)
·     Recruitment of key new senior staff has impacted costs
·     Robust cash position of £1,030,956 (2017: £1,038,130)
·     Notable new client wins
·     Continuing to build presence in the rapidly growing experiential events sector
·     Trading remains in line with market expectations for the full year to 30 June 2019
 
Chairman's Statement
 
During the period, Aeorema has been delivering on its strategy of building on the Company's core business by providing enhanced services to clients, in particular the move into experiential events.  As outlined in the Company's year-end results to 30 June 2018, this has led to a series of new business wins in the current period with both new and existing clients.
 
These wins include a substantial three-year contract with a large media company for an annual event in Cannes. It also has won a leadership event for a professional services company and has a good pipeline of opportunities for 2019/2020. These are in addition to projects from existing clients both this year, and scheduled for 2020.
The recruitment of two senior executive staff has increased costs in the short term but is expected to contribute to revenue growth going forward. Revenue is up 7% to £1,997,303 (2017: £1,869,439), however due to increased costs in the period, the Company is showing an operating loss for the period of £141,765 (2017: profit £81.028). The Company's cash position remains robust at £1,030,956. This position means the Company intends to pay a full year dividend, subject to the final audited results for the full year.
 
The first half loss was anticipated due to recruitment costs and increased salaries. This investment is already producing results and creates a structure for growth. A key focus has been on account management and growing revenues from existing clients. The new team were instrumental in winning a significant new Cannes Lions project for June this year and they have also helped win other new projects for this year and next. Cannes Lions International Festival of Creativity is a global event for those working in creative, communications, advertising and related fields. The Company has spent several years staging innovative events at Cannes Lions which have typically provided a substantial part of the Group's annual revenues.
It is customary for Aeorema's revenues to be second half weighted and anticipated and committed second half revenues are strong which gives the Board a good level of confidence that the Company will deliver full year results in line with market expectations.
 
The Company has a strong market reputation in the delivery of creative and differentiated live events, and we remain focused on building an industry-leading, cash generative, dividend-paying business with a high quality, blue-chip client base. In addition, the Company has explored, and continues to explore, value accretive acquisitions whose business or businesses are complementary to the existing offering and will help Aeorema build its position in the events and experiential category. To this end, we continue to seek to drive growth and innovation both in-house and via value accretive growth opportunities.
 
Finally, I would like to thank our employees for their hard work and commitment, as well as our shareholders for their continued support.
 
M Hale
Chairman
22 March 2019
 
 
 
 
 
 
AEOREMA COMMUNICATIONS PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
For the period ended 31 December 2018
 
 
 




 
 
 


 


Unaudited
6 Months to 31 December 2018


Unaudited
6 Months to 31 December 2017


Audited
Year to
30 June
2018




 


 


 


 


 




 


Notes


£


£


£




Continuing Operations


 


 


 


 




 


 


 


 


 




Revenue


 


1,997,303


1,869,439


4,820,167




Cost of sales


 


(1,257,963)


(1,081,034)


(3,033,514)




 


 


 


 


 




Gross profit


 


739,340


788,405


1,786,653




 


 


 


 


 




Administrative expenses


 


(881,105)


(707,377)


(1,497,003)




 


 


 


 


 




Operating profit / (loss) pre exceptional items


 


(141,765)


81,028


289,650




 


 


 


 


 




Exceptional items


4


-


(231,357)


(231,357)




 


 


 


 


 




Operating profit / (loss) post exceptional items


 


(141,765)


(150,329)


58,293




 


 


 


 


 




Finance income


 


287


162


392




 


 


 


 


 




Profit / (loss) before taxation


 


(141,478)


(150,167)


58,685




Taxation


6


26,939


26,587


(8,280)




 


 


 


 


 




Profit / (loss) for the period from continuing operations


 


 
(114,539)


 
(123,580)


 
50,405




 


 


 


 


 




 


 


 


 


 




Basic and diluted earnings per share from continuing operations


 


 


 


 




 


 


 


 


 




Basic (pence)


7


(1.26555)


(1.36545)


0.55693




Diluted (pence)


7


(1.17115)


(1.30156)


0.53906




 
 
There are no other comprehensive income items
 
 
 
 
 
 
 
 
 
 
 
 
AEOREMA COMMUNICATIONS PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the period ended 31 December 2018
 
 
 




 


 


Unaudited
6 Months to 31 December 2018


Unaudited
6 Months to 31 December 2017


Audited
Year to
30 June
2018




 


 


 


 


 




 


 


£


£


£




 


 


 


 


 




Non-current assets


 


 


 


 




Intangible assets


 


365,154


365,154


365,154




Property, plant and equipment


 


54,848


31,898


37,044




Deferred taxation


 


29,193


22,274


2,254




 


 


449,195


419,326


404,452




 


 


 


 


 




Current assets


 


 


 


 




Trade and other receivables


 


806,122


872,650


1,106,292




Cash and cash equivalents


 


1,030,956


1,038,130


1,437,904




 


 


1,837,078


1,910,780


2,544,196




 


 


 


 


 




 


 


 


 


 




Total assets


 


2,286,273


2,330,106


2,948,648




 


 


 


 


 




Current liabilities


 


 


 


 




Bank loans and overdrafts


 


-


-


1,590




Trade and other payables


 


714,512


772,303


1,274,979




Dividends payable


 


67,879


45,252


-




Current tax payable


 


9,412


23,868


9,412




 


 


791,803


841,423


1,285,981




 


 


 


 


 




 


 


 


 


 




Net assets


 


1,494,470


1,488,683


1,662,667




 


 


 


 


 




 


 


 


 


 




Equity attributable to equity holder:


 


 


 


 




Share capital


 


1,131,313


1,131,313


1,131,313




Share premium


 


7,063


7,063


7,063




Merger reserve


 


16,650


16,650


16,650




Other reserve


 


14,221


-


-




Capital contribution reserve


 


257,812


257,812


257,812




Retained earnings


 


67,411


75,845


249,829




 


 


 


 


 




Total equity


 


1,494,470


1,488,683


1,662,667




 

 

AEOREMA COMMUNICATIONS PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 December 2018
 
 




 


Share capital


Share
Premium


Merger reserve


Other reserve


Capital contribution reserve


Retained earnings


Total equity




 


£


£


£


£


£


£


£




 


 


 


 


 


 


 


 




At 1 July 2017


1,131,313


7,063


16,650


-


257,812


244,677


1,657,515




Payment of dividends


-


-


-


-


-


(45,252)


(45,252)




Comprehensive income for the period


-


-


-


-


-


(123,580)


(123,580)




 
At 31 December 2017


 
1,131,313


 
7,063


 
16,650


 
-


 
257,812


 
75,845


 
1,488,683




 
 


 


 


 


 


 


 


 




At 1 January 2018


1,131,313


7,063


16,650


-


257,812


75,845


1,488,683




Payment of dividends


-


-


-


-


-


-


-




Comprehensive income for the period


-


-


-


-


-


173,984


173,984




 
At 30 June 2018


 
1,131,313


 
7,063


 
16,650


 
-


 
257,812


 
249,829


 
1,662,667




 
 


 


 


 


 


 


 


 




At 1 July 2018


1,131,313


7,063


16,650


-


257,812


249,829


1,662,667




Payment of dividends


-


-


-


-


-


(67,879)


(67,879)




Comprehensive income for the period


-


-


-


-


-


(114,539)


(114,539)




Share-based payments


-


-


-


14,221


-


-


14,221




 
At 31 December 2018


 
1,131,313


 
7,063


 
16,650


 
14,221


 
257,812


 
67,411


 
1,494,470




 
 
 

 

AEOREMA COMMUNICATIONS PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 31 December 2018
 
 




 


 


Unaudited
6 Months to 31 December 2018


Unaudited
6 Months to 31 December 2017


Audited
Year to
30 June
2018




 


 


£


£


£




Cash flow from operating activities


 


 


 


 




Profit/(loss) before taxation


 


(141,478)


(150,167)


58,685




Adjustments for:


 


 


 


 




Depreciation of property, plant and equipment


 


10,687


11,850


20,416




Share-based payment


 


14,221


-


-




Finance income


 


(287)


(162)


(392)




Operating cash flow before movement in working capital


 


(116,857)


(138,479)


78,709




Decrease in trade and other payables


 


(560,467)


(843,300)


(340,624)




Decrease in trade and other receivables


 


300,170


134,942


(98,700)




Cash (used in) / generated from operating activities


 


(377,154)


(846,837)


(360,615)




 


 


 


 


 




Taxation paid


 


-


-


(29,303)




 


 


 


 


 




Cash flow from investing activities


 


 


 


 




Finance income


 


287


162


392




Purchase of property, plant and equipment


 


(28,491)


(12,407)


(26,119)




Net cash used in investing activities


 


(28,204)


(12,245)


(25,727)




 


 


 


 


 




Cash flow from financing activities


 


 


 


 




Dividends paid


 


-


-


(45,253)




Net cash used in financing activities


 


-


-


(45,253)




 


 


 


 


 




Net increase / (decrease) in cash and cash equivalents


 


(405,358)


(859,082)


(460,898)




 


 


 


 


 




Cash and cash equivalents at beginning of period


 


1,436,314


1,897,212


1,897,212




 


 


 


 


 




Cash and cash equivalents at end of period


 


1,030,956


1,038,130


1,436,314




 


 


 


 


 




 
 
 
 
 
AEOREMA COMMUNICATIONS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 31 December 2018
 
1.    General information
 
Aeorema Communications plc is a public limited company incorporated within the United Kingdom. The company is domiciled in the United Kingdom and its principal place of business is 23-31 Great Titchfield Street, London, W1W 7PA. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange.
 
These condensed consolidated interim financial statements for the period ending 31 December 2018 (including comparatives for the periods ended 31 December 2017 and 30 June 2018) were approved by the board of directors on 22 March 2019.
 
The financial information set out in this interim report does not constitute statutory accounts for the purposes of section 434 of the Companies Act (2006). The Group's statutory financial statements for the year ended 30 June 2018, prepared under International Financial Reporting Standards (IFRS), have been filed with the Registrar of Companies. The auditor's report for those financial statements was unqualified and did not contain a statement under section 498 (2) or section 498 (3) of the Companies Act (2006).
 
The interim financial statements have been prepared using the accounting policies set out in the Group's 2018 statutory accounts and have not been audited.
 
Copies of the annual statutory financial statements and the interim report can be found on our website at www.aeorema.com or can be requested from the Company Secretary at the Company's registered office: 64 New Cavendish Street, London, W1G 8TB.
 
2.    Basis of preparation
 
These condensed consolidated interim financial statements for the period ended 31 December 2018 have been prepared in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. The interim condensed consolidated financial statements should be read in conjunction with the annual financial statements for the year ended 30 June 2018, which have been prepared in accordance with IFRS as adopted by the European Union
 
3.    Summary of significant accounting policies
 
The accounting policies adopted are consistent with those of the annual financial statements for the year ended 30 June 2018, as described in those annual financial statements. There has been no impact on the Group's financial position or performance from new and amended IFRS and IFRIC interpretations mandatory as of 1 July 2018.
 
4.    Exceptional items
 
Items that are material either because of their size or their nature, or that are non-recurring, are considered as exceptional. During the interim period, the Group incurred expenditure totalling £nil (2017: £231,357 in relation to the departure of its two founders, Peter Litten and Gary Fitzpatrick, from the board of directors). This cost has been included in the condensed consolidated interim Income Statement as an operating exceptional cost.
 
 
 
 
 
 
 
 
 
 
AEOREMA COMMUNICATIONS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the period ended 31 December 2018
 
5.    Revenue and segmental results
 
The Company uses several factors in identifying and analysing reportable segments, including the basis of organisation such as differences in products and geographical areas. The Board of Directors, being the chief operating decision makers, has determined that for the period ended 31 December 2018 there is only one reportable operating segment.
 
6.    Income tax charge
 
Income period tax is accrued based on the estimated average annual effective income tax rate of 19 per cent. (2017: 19 per cent.).
 
7.    Earnings per share
 
Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
 
Diluted earnings per share are calculated by dividing the profit attributable to ordinary owners of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would have been issued on the conversion of all dilutive potential ordinary shares into ordinary shares.
 
The following reflects the income and share data used and dilutive earnings per share computations:
 




 


Unaudited 6 Months to 31 December 2018


Unaudited 6 Months to 31 December 2017


Audited Year to 30 June 2018




 


 


 


 




Profit/(loss) for the year attributable to owners of the Company


(114,539)


(123,580)


50,405




 


 


 


 




Number of shares


 


 


 




 


 


 


 




Basic weighted average number of shares


9,050,500


9,050,500


9,050,500




 


 


 


 




Effect of dilutive share options


729,508


444,262


300,000




 


 


 


 




Diluted weighted average number of shares


9,780,008


9,494,762


9,350,500




 


 


 


 




 
8.    Dividends
 
During the interim period a dividend of 0.75 pence (2017: 0.5 pence) per share was declared to holders of the Company's ordinary shares in respect of the full year ended 30 June 2018.
 
 
 
 
AEOREMA COMMUNICATIONS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the period ended 31 December 2018
 
9.    Related party transactions
 
The Group has a related party relationship with its subsidiaries and its directors. Transactions between Group companies, which are related parties, have been eliminated on consolidation and are therefore not included in these consolidated interim financial statements.
 




 


Unaudited 6 months to 31 December 2018


Unaudited 6 months to 31 December 2017




 


£


£




Subsidiaries


 


 




Amounts owed by/(to) subsidiaries


1,042,080


1,020,183




Amounts owed by/(to) subsidiaries


1,042,080


1,020,183




 
 
 
Harris & Trotter LLP is a firm in which Stephen Haffner is a member. The following was charged to the Group in respect of professional services.
 




 


Unaudited 6 Months to 31 December 2018


Unaudited 6 Months to 31 December 2017




Harris & Trotter LLP


£


£




Aeorema Communications plc


7,500


7,500




Aeorema Limited


7,950


17,900




 


15,450


25,400




 
Fees charged to Aeorema Communications plc include £7,500 (2017: £7,500) for the services of Stephen Haffner as a non-executive director of that company.
 
The compensation of key management (including directors) of the Group is as follows:
 




 


Unaudited 6 Months to 31 December 2018


Unaudited 6 Months to 31 December 2017




 


£


£




Short-term employee benefits


105,000


97,153




Post-employment benefits


892


50,666




Termination benefits


-


100,000




 


105,892


247,819




 
 
 
For further information visit www.aeorema.com or contact:
 
Michael Hale                                             Aeorema Communications plc          Tel : +44 (0) 20 7291 0444
 
John Depasquale/Liz Kirchner           Allenby Capital Limited                        Tel : +44 (0) 20 3328 5656
 
Catherine Leftley / Isabel de Salis      St Brides Partners                                 Tel : +44 (0) 20  7236 1177
 
 
 




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