REG - Aeorema Comms Plc - Interim Results
29/03/2023 07:00
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RNS Number : 5325U Aeorema Communications Plc 29 March 2023
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Aeorema Communications plc / Index: AIM / Epic: AEO / Sector: Media
29 March 2023
Aeorema Communications plc
("Aeorema", the "Company" or the "Group")
Interim Results
Aeorema Communications plc (AIM: AEO), a leading strategic communications
group, is pleased to announce its unaudited interim results for the six months
ended 31 December 2022.
Highlights
· Record level revenue of £7,121,103 (H1 2021: £4,909,742)
· Record level profit before taxation of £326,021 (H1 2021: £255,677)
· A period of continued growth and major investment for the Group
· Eventful Limited returning to profitability
· Substantially increased cash position of £3,676,194 (31 December
2021: £1,534,217)
Chairman's Statement
The six-month period ended 31 December 2022 has been a period of continued
growth and major investment for the Group, following the record financial year
we announced in November.
Group revenue increased by 45% year-on-year to £7.12 million (H1 2021: £4.91
million) and profit before taxation by 28% to £0.33 million (H1 2021: £0.26
million). The Group continues to invest in the team, our processes, and
offices, in order to put us in a strong position to achieve sustained growth
and success in the future.
The team continues to adapt and diversify to meet the range of demands and
evolving needs, of both new and existing clients. As a fully integrated
agency, the Group has consistently delivered innovative and bespoke events on
a live, virtual and hybrid basis to a range of clients across many sectors.
Moreover, the team has been able to capitalise on the ever-changing nature of
the industry by expanding our offerings to include long-term communication
campaigns and consultancy services. The development of a longer-term client
partnership approach has successfully been executed with leading brands across
multiple regions and markets. The flexible nature of the business model has
enabled the Group to maintain a loyal base of blue-chip clients.
I am thrilled that the team's remarkable efforts have been recognised with
award nominations and successful wins, both during and post-period end.
Cheerful Twentyfirst, Aeorema's main operating division, won Creative Team of
the Year for the fifth year running at the Conference News Agency Awards, Best
Agency at the Micebook V Award, and Best Place to Work and Global Agency of
the Year at the C&IT awards. Winning these high-profile awards not only
bears testament to the strong ability of our team, but also affirms the
Group's leading position in the sector.
We are delighted to announce, as a post-period end event, that we are working
with Stagwell Inc. a NASDAQ listed, multi-billion-dollar challenger in the
marketing network, on a unique brand activation 'Sport Beach' at Cannes Lions
International Festival of Creativity. The activation is expected to be one of
the largest brand activations in Cannes this year, and with discussions
ongoing surrounding other additional contracts, 2023 has a promising outlook
to be our biggest presence at the festival to date.
We continue to benefit from an increased global footprint, a growing presence
in mainland Europe (with the opening of our Amsterdam office), and we continue
to seek additional growth opportunities in line with our global growth
strategy. Moreover, we look to serve the growing needs and requests of our
clients operating in London and New York, by continuing the increased
integration of the respective offices, as well as expanding our own presence
in the North American market.
We are pleased to report that Eventful Limited, our venue sourcing and
incentive travel agency, has had a strong six months with a record number of
events. I am optimistic that we will be able to report a return to
profitability at the end of the 2023 financial year.
Following the introduction of our client carbon measurement programme and the
addition of a Sustainability Director in April 2022, post-period end we were
pleased to launch our third annual Corporate Social Responsibility ("CSR")
charter. The CSR charter was established as part of our transition into a
value-led agency that views people, planet and prosperity as a balanced scale.
The 2023 CSR charter introduced several new environmental initiatives and
commitments including the publication of our 2022 operational carbon
footprint, and the offsetting of the Group's last three years' carbon
emissions. A revised assessment tool, which considers the social and
environmental impact of any new project also enables us to take on briefs that
match our ethos and reinforce our commitment to become Net Zero by 2030.
We are very confident about the outlook for the remainder of the 2023
financial year. As mentioned earlier, we have more significant projects at
Cannes this year than ever before. The investment we have made in
strengthening our team and resources is a significant factor in the growth we
have achieved, and it provides us with the structure to achieve significant
revenue growth going forward. We are also confident that we can maintain our
policy of paying a dividend to shareholders without limiting our growth
opportunities.
Finally, I would like to take the opportunity to thank our dedicated team and
our shareholders for their continued support and I look forward to what the
rest of the year will bring.
M Hale
Chairman
28 March 2023
For further information contact:
Aeorema Communications plc +44 (0)20 7291 0444
Andrew Harvey www.aeorema.com
Allenby Capital Limited
(Nominated Adviser and Broker)
John Depasquale (Corporate Finance) +44 (0)20 3328 5656
Kelly Gardiner (Sales and Corporate Broking)
St Brides Partners Ltd
(Financial PR)
Catherine Leftley/Paul Dulieu aeorema@stbridespartners.co.uk
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 2022 reported record revenue and profits (before tax)
of £12.2 million and £843,564 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.
CONDENSED CONSOLIDATED INCOME STATEMENT
For the period ended 31 December 2022
Unaudited Unaudited Audited
6 Months to 31 December 2022 6 Months to 31 December 2021 Year to
30 June
2022
Notes £ £ £
Continuing Operations
Revenue 7,121,103 4,909,742 12,207,253
Cost of sales (5,595,529) (3,734,995) (9,169,691)
Gross profit 1,525,574 1,174,747 3,037,562
Other income - 3,743 3,743
Administrative expenses (1,175,668) (919,366) (2,170,129)
Operating profit / (loss) 349,906 259,124 871,176
Finance income 80 109 241
Finance costs (23,965) (3,556) (27,853)
Profit / (loss) before taxation 326,021 255,677 843,564
Taxation 4 (30,553) 48,105 (204,222)
Profit / (loss) for the period from continuing operations
295,468 303,782 639,342
Other comprehensive income
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign entities (29,245) 11,552 42,347
Other comprehensive income for the period (29,245) 11,552 42,347
Total comprehensive income for the period 266,223 315,334 681,689
Basic and diluted earnings per share from continuing operations
Basic (pence) 5 3.18118 3.28840 6.92078
Diluted (pence) 5 2.71870 2.72255 5.80797
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the period ended 31 December 2022
Unaudited Unaudited Audited
6 Months to 31 December 2022 6 Months to 31 December 2021 Year to
30 June
2022
£ £ £
Non-current assets
Intangible assets 567,682 570,182 568,931
Property, plant and equipment 389,668 121,138 222,479
Right-to-use assets 760,388 - 823,772
Deferred taxation - 182,179 25,925
1,717,738 873,499 1,641,107
Current assets
Trade and other receivables 2,834,446 2,337,399 3,130,035
Cash and cash equivalents 3,676,194 1,534,217 1,714,417
Current tax receivable 101,426 36,942 -
6,612,066 3,908,558 4,844,452
Total assets 8,329,804 4,782,057 6,485,559
Current liabilities
Trade and other payables 4,713,051 2,514,347 2,960,221
Lease liabilities 141,278 - 121,999
Bank loans 69,445 83,334 83,333
Current tax payable - 136,132 177,790
Provisions 35,000 25,020 35,000
4,958,774 2,758,833 3,378,343
Non-current liabilities
Lease liabilities 668,006 - 738,041
Bank loans 83,334 152,778 111,111
Provisions 9,000 - 4,500
Deferred taxation 4,629 - -
764,969 152,778 853,652
Total liabilities 5,723,743 2,911,611 4,231,995
Net assets 2,606,061 1,870,446 2,253,564
Equity attributable to equity holder:
Share capital 1,192,250 1,154,750 1,154,750
Share premium 21,876 9,876 9,876
Merger reserve 16,650 16,650 16,650
Other reserve 205,730 152,193 168,956
Capital contribution reserve 257,812 257,812 257,812
Foreign Translation reserve 2,058 - 31,303
Retained earnings 909,685 279,165 614,217
Total equity 2,606,061 1,870,446 2,253,564
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 December 2022
Share capital Share Merger reserve Other reserve Capital contribution reserve Foreign translation reserve Retained earnings Total equity
premium
£ £ £ £ £ £ £ £
At 1 July 2021 1,154,750 9,876 16,650 112,061 257,812 (11,044) (25,125) 1,514,980
Comprehensive income for the period - - - - - - 315,334 315,334
Share-based payments - - - 40,132 - - - 40,132
At 31 December 2021 1,154,750 9,876 16,650 152,193 257,812 (11,044) 290,209 1,870,446
At 1 January 2022 1,154,750 9,876 16,650 152,193 257,812 (11,044) 290,209 1,870,446
Comprehensive income for the period - - - - - - 324,008 324,008
Foreign currency translation - - - - - 42,347 - 42,437
Share-based payments - - - 16,763 - - - 16,763
At 30 June 2022 1,154,750 9,876 16,650 168,956 257,812 31,303 614,217 2,253,564
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
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 31 December 2022
Unaudited Unaudited Audited
6 Months to 31 December 2022 6 Months to 31 December 2021 Year to
30 June
2022
£ £ £
Cash flow from operating activities
(Loss) / profit before taxation 326,021 255,677 843,564
Adjustments for:
Depreciation of property, plant and equipment 48,873 24,586 56,036
Depreciation of right-of-use assets 63,384 18,995 82,361
Amortisation of intangible fixed assets 1,250 1,250 2,500
Loss on disposal of fixed assets - 2,096 4,646
Share-based payment 36,774 40,132 56,895
Interest on lease liabilities 20,244 - 21,191
Finance income (80) (109) (241)
Dilapidations 4,500 - -
Exchange rate differences on translation (28,902) 11,552 42,138
Operating cash flow before movement in working capital 472,064 354,179 1,109,090
Increase/(decrease) in trade and other payables 1,752,830 1,096,880 1,557,234
(Increase)/decrease in trade and other receivables 295,592 (908,336) (1,700,972)
Cash (used in) / generated from operating activities 2,048,422 188,544 (143,738)
Taxation paid (279,218) (26,185) (43,657)
Cash flow from investing activities
Finance income 80 109 241
Purchase of property, plant and equipment (216,406) (44,343) (179,475)
Repayment of leasing liabilities (71,000) (25,912) (74,201)
Net cash used in investing activities (287,326) (70,146) (253,435)
Cash flow from financing activities
Share issue 49,500 - -
Repayment of bank loans (41,665) (13,888) (55,556)
Net cash used in financing activities 7,835 (13,888) (55,556)
Net increase / (decrease) in cash and cash equivalents 1,961,777 432,504 612,704
Cash and cash equivalents at beginning of period 1,714,417 1,101,713 1,101,713
Cash and cash equivalents at end of period 3,676,194 1,534,217 1,714,417
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 31 December 2022
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 2022 (including comparatives for the periods ended 31
December 2021 and 30 June 2022) were approved by the board of directors on 28
March 2023.
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
2022, 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 2022 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 2022 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 2022, which have been
prepared in accordance with IFRS as adopted by the European Union
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 2022
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 19 per cent (2021: 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 2022 Unaudited 6 Months to 31 December 2021 Audited Year to 30 June 2022
Profit / (loss) for the year attributable to owners of the Company £295,468 £303,782 £639,342
Number of shares
Basic weighted average number of shares 9,288,000 9,238,000 9,238,000
Effect of dilutive share options 1,580,000 1,920,000 1,770,000
Diluted weighted average number of shares 10,868,000 11,158,000 11,008,000
6. Dividends
During the interim period a dividend of 2 pence per share (2021: Nil) was
declared to holders of the Company's ordinary shares in respect of the full
year ended 30 June 2022.
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 2022 Unaudited 6 months to 31 December 2021
£ £
Subsidiaries
Amounts owed by/(to) subsidiaries 370,342 397,759
Amounts owed by/(to) subsidiaries 370,342 397,759
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 2022 Unaudited 6 Months to 31 December 2021
Harris & Trotter LLP £ £
Aeorema Communications plc 9,450 7,500
Aeorema Limited 9,500 5,750
18,950 13,250
Fees charged to Aeorema Communications plc include £7,500 (2021: £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 2022 Unaudited 6 Months to 31 December 2021
£ £
Short-term employee benefits 266,375 162,933
Post-employment benefits 7,496 7,496
273,871 170,429
During the period S Quah received an interest-free loan of £40,000 which has
now been repaid. As at 31 December 2022 £50,000 (2021: £10,000) was
outstanding.
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