REG - Aeorema Comms Plc - Interim Results and FY Projections
25/03/2024 07:00
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RNS Number : 0366I Aeorema Communications Plc 25 March 2024
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Aeorema Communications plc / Index: AIM / Epic: AEO / Sector: Media
25 March 2024
Aeorema Communications plc
("Aeorema", the "Company" or the "Group")
Interim Results and FY Projections
Aeorema Communications plc (AIM: AEO), a leading strategic communications
group, today announces its unaudited interim results for the six months ended
31 December 2023 ("H1 2024").
OVERVIEW
• Revenue of £6,553,779 (H1 2023: £7,121,103)
• Loss before taxation of £243,534 (H1 2023 Profit: £326,021)
• Cash at date of this release of £3,717,848
• Expecting to reaffirm commitment to shareholders by maintaining the dividend
policy
• Winner of multiple industry awards
• Cheerful Twentyfirst named Agency Team of the Year for the first time in the
Experience category at industry-leading The Drum Awards Festival and nominated
in four other award categories
• Post period end, Cheerful Twentyfirst named Creative Team of the Year at the
2024 CN Agency Awards for sixth year running
CHAIRMAN'S STATEMENT
As we navigate the dynamic landscape of our 2024 financial year, I present our
interim results for the six months ended 31 December 2023 and provide insight
into our strategic direction moving forward.
We are confident of delivering a full year profit of not less than £400,000,
despite the loss in the first half of this financial year. We also expect to
have a near record profit of £650,000 in the second half of this financial
year. This is based on projecting revenue for the full year of no less than
£19 million, and with three months still remaining in the Company's financial
year ending 30 June 2024 ("FY2024"), we are confident in achieving this
revenue.
Having made significant investment in the structure and foundations of our
business in FY 2023, during H1 2024 we have focussed on investing in our team,
both in the US and UK, which has impacted our profit margin. We are therefore
amending our business model to have a better balance in costs between the
first half and second halves of our financial year and we are also
aggressively chasing business for the first half to improve the balance
between first and second half revenue.
Like many agencies in its sector, Aeorema's clients are facing a challenging
economic landscape which is resulting in delays in the decision-making process
on committing spending and, consequently, in some cases, the temporary
postponement of events. More particularly for Aeorema, several brands have
delayed projects and pushed them into the first half of the 2024 calendar year
(the second half of the Company's financial year) or into Aeorema's 2024/25
financial year, which is the case for approximately £2 million of contracted
revenue.
Despite the disappointing impact of these timing shifts on both our half year
and anticipated full year figures, we remain optimistic about the future. We
have a robust pipeline of client projects and a resilient blue-chip client
base. Importantly, Aeorema has maintained the loyalty of its client base,
having not experienced any client losses during this period, which reflects
the trust they place in our capabilities to deliver exceptional, world-class,
experience events. This, and discussions with clients about future plans,
gives us significant comfort in maintaining a positive outlook for the
remainder of our 2023/24 financial year and for our 2024/25 financial year as
we continue to grow organically and capitalise on an uptick in revenue driven
by the realisation of postponed projects.
With a focus on adaptability and forward planning, Aeorema is well positioned
for the future and is confident in its ability to deliver sustainable growth
and value creation over the long term. We also expect to reaffirm our
commitment to shareholders by maintaining our dividend policy.
While this half year's financial performance reflects the impact of project
timing, we are encouraged by the underlying strength of our business and our
pipeline. Our focus remains steadfast on delivering creative brilliance for
our clients on a global scale, and sustained growth and value to our
shareholders.
M Hale
Chairman
22 March 2024
*ENDS*
Andrew Harvey Aeorema Communications plc +44 (0)20 7291 0444
John Depasquale / Liz Kirchner / Lauren Wright Allenby Capital Limited +44 (0)20 3328 5656
(Corporate Finance) (Nominated Adviser and Broker)
Kelly Gardiner / Joscelin Pinnington (Sales and Corporate Broking)
Paul Dulieu / Isabel de Salis St Brides Partners Ltd aeorema@stbridespartners.co.uk
(Financial PR)
Notes to Editors
Aeorema Communications plc, (AIM: AEO) is a leading strategic communications
group with offices in London, New York, and Amsterdam. The Group provides
bespoke event services, comprising live, virtual, and hybrid experiences to an
established international blue-chip client base spanning a broad range of
sectors, including finance, professional services, advertising, IT, gaming,
fashion, fintech, and beverages. The Group also provides high level
consultancy services to help clients maximise and deliver on their long-term
communication strategies over multiple event and film touchpoints.
Aeorema delivers these services via its fully owned companies Cheerful
Twentyfirst and Cheerful Twentyfirst, Inc. (the North American arm of Cheerful
Twentyfirst) (cheerfultwentyfirst.com), two live events agencies with film
capabilities that specialise in devising and delivering corporate
communication solutions. The Group also operates Eventful Limited
(www.eventful.co.uk), which provides consultative, high-touch services
including assisting clients with venue sourcing, event management and
incentive travel. With more than 56 years of combined operating experience and
extensive award wins, Aeorema is a recognised industry thought leader and for
the year ended 30 June 2023 reported record revenue and profits (before tax)
of £20.2 million and £1.0 million respectively, and also declared a dividend
for the year.
Central to all that the Group does is its Corporate Social Responsibility
charter, which is focussed on ensuring sustainable, inclusive, and ethical
business operations. To this end, the Group is a pioneer in delivering
innovative strategies and services, including a client carbon measurement
programme to establish a formal structure and approach around reducing
emissions and offsetting both its own and its clients' carbon footprint.
AEOREMA COMMUNICATIONS PLC
CONDENSED CONSOLIDATED INCOME STATEMENT
For the period ended 31 December 2023
Unaudited Unaudited Audited
6 Months to 31 December 2023 6 Months to 31 December 2022 Year to
30 June
2023
Notes £ £ £
Continuing Operations
Revenue 6,553,779 7,121,103 20,230,231
Cost of sales (5,051,024) (5,595,529) (15,896,463)
Gross profit 1,502,755 1,525,574 4,333,768
Administrative expenses (1,724,982) (1,175,668) (3,240,848)
Operating (loss) / profit (222,227) 349,906 1,092,920
Finance income 20 80 215
Finance costs (21,327) (23,965) (47,175)
(Loss) / profit before taxation (243,534) 326,021 1,045,960
Taxation 4 125,253 (30,553) (288,780)
(Loss) / profit for the period from continuing operations
(118,281) 295,468 757,180
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign entities 56,973 (29,245) (119,547)
Other comprehensive income for the period 56,973 (29,245) (119,547)
Total comprehensive income for the period (61,308) 266,223 637,633
Basic and diluted earnings per share from continuing operations
Basic (pence) 5 (1.24010) 3.18118 8.04398
Diluted (pence) 5 (1.05251) 2.71870 6.83499
AEOREMA COMMUNICATIONS PLC
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the period ended 31 December 2023
Unaudited Unaudited Audited
6 Months to 31 December 2023 6 Months to 31 December 2022 Year to
30 June
2023
£ £ £
Non-current assets
Intangible assets 565,181 567,682 566,431
Property, plant and equipment 379,137 389,668 428,509
Right-to-use assets 633,584 760,388 696,986
Deferred taxation 140,110 - 14,844
1,718,012 1,717,738 1,706,770
Current assets
Trade and other receivables 4,213,279 2,834,446 3,502,522
Cash and cash equivalents 1,342,729 3,676,194 2,444,100
Current tax receivable - 101,426 -
5,556,008 6,612,066 5,946,622
Total assets 7,274,020 8,329,804 7,653,392
Current liabilities
Trade and other payables 3,584,467 4,713,051 3,882,938
Lease liabilities 109,808 141,278 109,058
Bank loans 69,445 69,445 83,333
Current tax payable 72,510 - 74,736
Provisions 35,000 35,000 35,000
3,871,230 4,958,774 4,185,065
Non-current liabilities
Lease liabilities 594,247 668,006 612,693
Bank loans - 83,334 27,778
Provisions 18,000 9,000 13,500
Deferred taxation - 4,629 -
612,247 764,969 653,971
Total liabilities 4,483,477 5,723,743 4,839,036
Net assets 2,790,543 2,606,061 2,814,356
Equity attributable to equity holder:
Share capital 1,192,250 1,192,250 1,192,250
Share premium 21,876 21,876 21,876
Merger reserve 16,650 16,650 16,650
Other reserve 270,870 205,730 233,375
Capital redemption reserve 257,812 257,812 257,812
Foreign translation reserve (31,271) 2,058 (88,244)
Retained earnings 1,062,356 909,685 1,180,637
Total equity 2,790,543 2,606,061 2,814,356
AEOREMA COMMUNICATIONS PLC
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 December 2023
Share capital Share Merger reserve Other reserve Capital redemption reserve Foreign translation reserve Retained earnings Total equity
premium
£ £ £ £ £ £ £ £
At 1 July 2022 1,154,750 9,876 16,650 168,956 257,812 31,303 614,217 2,253,564
Comprehensive income for the period - - - - - - 295,468 295,468
Foreign currency translation - - - - - (29,245) - (29,245)
Share-based payments - - - 36,774 - - - 36,774
Share issue 37,500 12,000 - - - - - 49,500
At 31 December 2022 1,192,250 21,876 16,650 205,730 257,812 2,058 909,685 2,606,061
At 1 January 2023 1,192,250 21,876 16,650 205,730 257,812 2,058 909,685 2,606,061
Comprehensive income for the period - - - - - - 461,712 461,712
Dividend paid - - - - - - (190,760) (190,760)
Foreign currency translation - - - - - (90,302) - (90,302)
Share-based payments - - - 27,645 - - - 27,645
At 30 June 2023 1,192,250 21,876 16,650 233,375 257,812 (88,244) 1,180,637 2,814,356
At 1 July 2023 1,192,250 21,876 16,650 233,375 257,812 (88,244) 1,180,637 2,814,356
Comprehensive income for the period - - - - - - (118,281) (118,281)
Foreign currency translation - - - - - 56,973 - 56,973
Share-based payments - - - 37,495 - - - 37,495
Share issue - - - - - - - -
At 31 December 2023 1,192,250 21,876 16,650 270,870 257,812 (31,271) 1,062,356 2,790,543
AEOREMA COMMUNICATIONS PLC
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 31 December 2023
Unaudited Unaudited Audited
6 Months to 31 December 2023 6 Months to 31 December 2022 Year to
30 June
2023
£ £ £
Cash flow from operating activities
(Loss) / profit before taxation (243,534) 326,021 1,045,960
Adjustments for:
Depreciation of property, plant and equipment 67,827 48,873 109,764
Depreciation of right-of-use assets 63,402 63,384 126,786
Amortisation of intangible fixed assets 1,250 1,250 2,500
Loss on disposal of fixed assets - - 9,141
Share-based payment 37,495 36,774 64,419
Interest on lease liabilities 17,804 20,244 39,212
Finance income (20) (80) (215)
Dilapidations 4,500 4,500 9,000
Exchange rate differences on translation 60,590 (28,902) (119,455)
Operating cash flow before movement in working capital 9,314 472,064 1,287,112
Increase/(decrease) in trade and other payables (298,470) 1,752,830 922,716
(Increase)/decrease in trade and other receivables (710,757) 295,592 (372,487)
Cash (used in) / generated from operating activities (999,913) 2,520,486 1,837,341
Taxation paid (2,241) (279,218) (380,753)
Cash flow from investing activities
Finance income 20 80 215
Purchase of property, plant and equipment (22,071) (216,406) (325,027)
Repayment of leasing liabilities (35,500) (71,000) (177,500)
Net cash used in investing activities (57,551) (287,326) (502,312)
Cash flow from financing activities
Share issue - 49,500 49,500
Dividends paid to owners of the company - - (190,760)
Repayment of bank loans (41,666) (41,665) (83,333)
Net cash used in financing activities (41,666) 7,835 (224,593)
Net increase / (decrease) in cash and cash equivalents (1,101,371) 1,961,777 729,683
Cash and cash equivalents at beginning of period 2,444,100 1,714,417 1,714,417
Cash and cash equivalents at end of period 1,342,729 3,676,194 2,444,100
AEOREMA COMMUNICATIONS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 31 December 2023
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 87 New Cavendish Street, London, W1W 6XD. 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 2023 (including comparatives for the periods ended 31
December 2022 and 30 June 2023) were approved by the board of directors on 22
March 2024.
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
2023, 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 2023 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: 101 New Cavendish
Street, 1st Floor South, London, W1W 6XH.
2. Basis of preparation
These condensed consolidated interim financial statements for the period ended
31 December 2023 have been prepared in accordance with IAS 34, 'Interim
Financial Reporting' as adopted by the United Kingdom. The interim condensed
consolidated financial statements should be read in conjunction with the
annual financial statements for the year ended 30 June 2023, which have been
prepared in accordance with IFRS as adopted by the United Kingdom.
3. 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 2023
there is only one reportable operating segment.
4. Income tax charge
Income period tax is accrued based on the estimated average annual effective
income tax rate of 25 per cent (2022: 19 per cent).
5. 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 2023 Unaudited 6 Months to 31 December 2022 Audited Year to 30 June 2023
(Loss) / profit for the year attributable to owners of the Company (£118,281) £295,468 £757,180
Number of shares
Basic weighted average number of shares 9,538,000 9,288,000 9,413,000
Effect of dilutive share options 1,700,000 1,580,000 1,665,000
Diluted weighted average number of shares 11,238,000 10,868,000 11,078,000
6. Dividends
During the interim period a dividend of 3 pence per share (2022: 2 pence per
share) was declared to holders of the Company's ordinary shares in respect of
the full year ended 30 June 2023.
AEOREMA COMMUNICATIONS PLC
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
For the period ended 31 December 2023
7. 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 2023 Unaudited 6 months to 31 December 2022
£ £
Subsidiaries
Amounts owed by/(to) subsidiaries 503,557 370,342
Amounts owed by/(to) subsidiaries 503,557 370,342
Harris & Trotter LLP is a firm in which S Haffner is a member. The
following was charged to the Group in respect of professional services.
Unaudited 6 Months to 31 December 2023 Unaudited 6 Months to 31 December 2022
Harris & Trotter LLP £ £
Aeorema Communications plc 12,950 9,450
Aeorema Limited 7,750 9,500
20,700 18,950
Fees charged to Aeorema Communications plc include £10,000 (2022: £7,500)
for the services of S 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 2023 Unaudited 6 Months to 31 December 2022
£ £
Short-term employee benefits 361,004 266,375
Post-employment benefits 10,101 7,496
371,105 273,871
For further information visit www.aeorema.com (http://www.aeorema.com) or
contact:
Andrew Harvey
Aeorema Communications plc Tel : +44 (0) 20 7291 0444
John Depasquale / Liz Kirchner / Allenby Capital
Limited Tel : +44 (0) 20 3328 5656
Lauren Wright (Corporate Finance)
Kelly Gardiner / Joscelin Pinnington
(Sales and Corporate Broking)
Paul Dulieu / Isabel de Salis St Brides
Partners Ltd aeorema@stbridespartners.co.uk
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