REG - Zinc Media Group PLC - Interim results for the six months ended 30 June
30/09/2024 07:00
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RNS Number : 0899G Zinc Media Group PLC 30 September 2024
30 September 2024
Zinc Media Group plc
("Zinc Media", the "Group" or the "Company")
Interim results for the six months ended 30 June 2024
Zinc Media Group plc (AIM: ZIN), the award-winning television and content
production group, is pleased to announce its unaudited interim results for the
six months to 30 June 2024 ("H1 2024").
Commenting on the results, Mark Browning, Chief Executive, said: "Since the
Group's trading update on 8 July 2024, we have experienced a significant
uplift in new business, £5m of which will be recognised in FY24 with a high
level of pre-bookings for FY25. Our revenue mix in FY24 is delivering higher
gross margins than prior year and we are achieving efficiency savings faster
than anticipated. This currently underpins our confidence of delivering to
full year EBITDA expectations of £2.1m(1). The uplift in production and
commissioning of new business we are seeing in H2 mirrors the wider UK
production market being heavily weighted to second half performance.
The fundamentals of Zinc are excellent. We have an increasingly diversified
client base, high levels of repeat business, healthy gross margins, and
produce content across a range of price points within our markets. We are
particularly pleased with the level of recommissions, reflecting recognition
of the quality of our work, the trusted relationships we have with our clients
and our strong reputation in the industry. We are on course for significant
profit growth this year and are well placed to benefit from future
consolidation of the UK production sector."
Headlines
· As at 25 September 2024, revenue won and expected to be booked in
FY24 is in line with the prior year (after adjustment for Zinc Communicate
which was loss making and discontinued in the first half) at £33m, with a
further £5m that could be recognised in FY24 in highly advanced discussions.
· In addition, the Group has successfully met its targeted
annualised efficiency savings of £0.5m.
· The Group has good visibility of further revenue and profit
growth in FY25 with £11m of revenue already secured for FY25. This is in line
with prior year.
Financial Highlights
· Group revenue of £14.1m (H1 2023(2): £17.7m) from continuing
operations was lower than prior year, in line with the wider market which is
seeing production weighted to the second half of the year.
o While H1 reported revenue is down compared to prior year, it represents
growth of 31% compared to H1 2022 as the Group delivers long term growth.
· Gross margins of 41% were in line with H1 2023, and up on the
prior full year (FY23: 39%).
· Adjusted EBITDA(3) loss of £0.9m (H1 2023: profit of £0.6m)
reflects the H2 revenue weighting.
· Cash of £4.1m at 30 June 2024 (December 2023: £4.9m) remains
robust and provides the Group with sufficient working capital.
· Net cash of £0.6m (December 2023: £1.5m).
Operational Highlights
· Following a strategic review, the Group decided to wind down the
loss-making Video Marketing and Brand Content division which sat within Zinc
Communicate and to focus its content production strategy for brands and
businesses via Supercollider and The Edge, which continues to perform well.
· The Group was crowned "Production Company of the Year" for the
second year running at the prestigious New York Festival Film and Television
Awards.
· The Group produced a number of highly acclaimed documentaries
that led the news agenda and got the nation talking including:
o Putin vs the West: At War: The 3-part series for the BBC, which is
available on iPlayer, documents the days leading up to Russia's invasion of
Ukraine, with exclusive access to the key protagonists.
o Rob & Rylan's Grand Tour: This new series for the BBC launched to
considerable critical acclaim and delivered the highest viewing figures for
BBC Two so far this year.
o Chasing Glory chronicled the pursuit of gold medals by six of the world's
most recognisable athletes in the run up to the Paris Olympics and was
exclusive to Discovery+, who held the main UK broadcast rights to the
Olympics.
o Martin Compston's Norwegian Fling: The Line of Duty star took an epic
road-trip across Norway for the BBC.
o The Pilgrimage of Gilbert & George: This series for Sky Arts explored
the extraordinary journey of art icons Gilbert & George.
o Sunday Morning Live: The backbone of BBC One's Sunday morning schedule
continues to be produced by Tern TV.
· Post period end, the Group has won several new and recommissioned
contracts, further strengthening the Group's forward bookings and visibility
into FY25, including:
o Bargain Loving Brits in the Sun: The series has been recommissioned for an
impressive 80-episode series, with filming due to begin in Q4 and continuing
into early FY25.
o Rob & Rylan's Passage to India: This new series follows the highly
acclaimed Rob & Rylan's Grand Tour.
o The Group's newest label, Atomic Television, which launched in January
2023, won its second commission with a new substantial multi-million pound
series for a major global streaming platform.
o In addition, Zinc has been commissioned by a global music label to produce
a major new biopic on one of the biggest pop bands of the 20th century.
A copy of the interim results will be made available on the Company's website,
(http://www.zincmedia.com/) zincmedia.com.
1. The Board considers consensus Adjusted EBITDA expectations for FY2024
to be £2.1m.
2. Prior period comparators are stated excluding discontinued operations.
3. Adjusted EBITDA is defined as EBITDA before Adjusting Items comprising
share based payment charges, profit/loss on disposal of fixed assets,
reorganisation and restructuring costs, acquisition costs and change in fair
value of contingent consideration.
For further information, please contact:
Zinc Media Group
plc
+44 (0) 20 7878 2311
Mark Browning, CEO / Will Sawyer, CFO
www.zincmedia.com (http://www.zincmedia.com)
Singer Capital Markets (Nominated Adviser and Broker)
+44 (0) 20 7496
3000
James Moat / Sam Butcher
CHAIRMAN'S STATEMENT
Zinc is currently on course for a year of record EBITDA profits, and it will
do this against the backdrop of a challenging television commissioning market
and well documented economic headwinds in H1 affecting both the UK and
international markets. This will be an excellent performance.
In H1, UK and US broadcasters have been slow to put commissions into
production and in some cases, they have delayed delivery. Where Zinc produces
content for brands and businesses, notably within Zinc Communicate and The
Edge, the headwinds in the UK economy and the war in the Middle East have
suppressed H1 performance. The net result for the Group is that revenue has
moved into the second half of the year to give an unusually high weighting in
the second half.
Zinc's fundamentals are excellent. It has a highly diversified revenue mix
with 60% of revenue coming from television commissions and 40% from production
for brands and businesses. In television it's diversified across UK PSBs
(Public Service Broadcasters), multi-channel networks, international
broadcasters and global streamers. It has a product to suit all price
brackets, whether that's high-volume, low-cost daytime television or high cost
global premium factual. It's also highly diversified within production for
brands and businesses with the additional geographical diversification in the
Middle East. Revenue quality is excellent with 80% of revenue from returning
clients. Strong gross margins at 41% and long-established client relationships
reinforce the fundamentals of the Group.
Creatively, H1 saw Zinc maintain its position at the top of the commissioning
league table with a creative vision to tell stories about life, on screen. The
year started with the highly acclaimed Putin vs The West for the BBC, which
was closely followed by Rob and Rylan's Grand Tour, demonstrating the breadth
of Zinc's unscripted production. The Group continues to pick up new clients,
including the global streamer Discovery+ which broadcast Chasing Glory in the
run up to the Paris Olympics. Sky Arts broadcast two Zinc programmes in H1:
Jake Chapman's Accelerate or Die! and The Pilgrimage of Gilbert and George,
which both came from Zinc's Supercollider label. Add to this our returning
series Sunday Morning Live for BBC One and Channel 5's Bargain Loving Brits
and it's clear Zinc's television business is in rude health. Much of the
content produced by The Edge and Zinc Communicate is confidential to those
clients we work with, but their list is no less impressive.
Notwithstanding the well documented slowdown in television commissioning,
wider inflationary pressures, the ongoing war in Gaza affecting confidence in
the Middle East and the macro issues affecting the UK AIM markets, the future
of Zinc Media Group is looking very good. With the excellent progress made
since the summer, and the cost actions taken, the Group is on course for
another record year of profitability.
The Board would like to thank the management team, employees and freelancers
for their professional and dedicated work, and our shareholders for their
continued support.
Christopher Satterthwaite
Chairman
CEO'S REPORT
CURRENT TRADING, STRATEGY AND MARKET OUTLOOK
Zinc is trading well and following a series of new commissions totalling £8m
which were commissioned in the last four weeks the Group remains on track to
deliver EBITDA in line with market expectations for the full year.
The recent run of large new business wins exemplifies the challenge with half
year reporting within a television production business of this size. Whilst
trading in the first six months of the year is down compared to prior year it
is up 31% compared to H1 2022 demonstrating the Company's long-term growth.
Equally, the commissions won during the year have a higher margin mix, due to
a number of large low margin commissions won in the prior year. This gives
strong confidence over profitability growth in the second half of the year and
FY25 as they are produced.
Following a difficult year of trading for the Group's brand and content
marketing business within Zinc Communicate in FY23, which continued into FY24,
we made the decision in H1 to discontinue with this venture. The business had
been growing revenue year on year since 2021 but had not managed to reach the
required scale to contribute profit into the wider group. This venture is
reported under "discontinued operations" and revenue and profit comparisons
have been adjusted for this to be on a like-for-like basis.
At the beginning of this year we targeted annualised efficiency savings of
£0.5m. In H1 operating expenses have reduced by £0.2m, and the Group will
deliver the full annualised savings within Adjusted EBITDA from continuing
operations by year end. Following the closure of the loss-making element in
Zinc Communicate, and good progress on the targeted savings programme, the
only material risk for FY24 is unexpected delays to existing commissions, and
were these to materialise, there would be a corresponding improvement to
visibility for FY25.
All Zinc's businesses unite behind a reputation as a trusted partner
delivering the highest quality content to a range of international and
blue-chip clients in either television production or production for brands and
businesses. All benefit from a shared platform that offers a wide array of
resources, including post-production facilities, broadcast technology,
financial management, human resources support, public relations, marketing
expertise and IT assistance. This enables end to end production and allows
Zinc to capture all available margin. In addition it provides our businesses
and customers with specialist expertise and governance which is a requirement
for large global broadcasters and corporate clients, and gives us the
opportunity to scale and respond to new opportunities as they occur.
Additionally, some of the services available through Zinc's platform are now
being made accessible to third-party production companies as a means of
generating revenue.
The first six months of 2024 have seen a number of creative highlights across
all companies united in an editorial vision to tell stories about life, on
screen. H1 2024 saw the launch of the Group's newest hit format, Rob and
Rylan's Grand Tour. This series brought Rob Rinder and Rylan Clark together
for the first time, as they recreated the original Grand Tour across Italy.
The series delivered the highest viewing figures on BBC Two so far this year
and received critical acclaim in both The Telegraph and The Times. As
announced on 26 September this format has been commissioned for a second
series and has begun production. The new series of Putin vs The West for the
BBC launched in January, accompanied by a screening hosted at Kings College in
London. The team behind this programme have been commissioned for a new
project. Zinc continues to pick up new clients as well as high levels of
repeat business. Warner Bros Discovery commissioned Chasing Glory for
Discovery+ to accompany their exclusive UK rights to the Paris Olympics, and
this series chronicled the pursuit of gold by six of the world's most
recognisable athletes in the run up to the Paris Olympics. Zinc further
expanded the number of clients it works with by producing two programmes of
note for Sky Arts. Jake Chapman's Accelerate or Die! and The Pilgrimage of
Gilbert and George both aired in H1. Sunday Morning Live, the scheduling
backbone to Sunday Morning's on BBC One, returned for a new series produced by
Tern TV in Northern Ireland.
Despite the challenging television commissioning market and delays to Middle
East business for The Edge caused by the war in Gaza, the demand for high
quality television and content for brands and businesses remains strong. Zinc
has a small market share in all its verticals, leaving plenty of headroom for
growth. With a strong orderbook and pipeline, as well as the savings
realised in the period, the Group is confident in its EBITDA performance for
the full year. In addition, the outlook for 2025 is very strong with £11m of
revenue already won and expected to be recognised in FY25. With a healthy
pipeline, the Group therefore remains confident of delivering further organic
growth and profitability in the periods ahead.
Mark Browning
Chief Executive Officer
CFO'S REPORT
INCOME STATEMENT
Group revenues from continuing operations in the reporting period were down by
20% year-on-year at £14.1m (H1 2023: £17.7m). TV revenues reduced by 25% to
£8.2m (H1 2023: £11.0m), driven by delays to filming on two productions, Top
Gun: The Next Generation and Paid in Full: The Battle for Payback, for reasons
outside of the Group's control, which has moved recognition of £1.2m of
revenue from H1 to H2 2024 and 2025. In addition, a challenging TV market has
led to a slowdown in commissioning which has had an estimated £0.9m impact in
H1. Content Production revenue reduced by 12% to £5.9m (H1 2023: £6.7m) due
to the instability in the Middle East affecting some international business.
Gross margins in the period were 41% (H1 2023: 41%). Despite downward pricing
and upward cost pressures, gross margins have been maintained at the same
levels as H1 2023 and are higher than in the full year 2023 (FY23: 39%). This
has been achieved by an increased focus on using in-house production kit and
post-production facilities which have benefited from investment over the last
year.
The Group's focus on its cost as part of the Group's efficiency and synergy
programme has resulted in operating expenses reducing by £0.2m to £7.6m.
This includes a £0.1m year-on-year reduction in occupancy costs as a result
of re-locating The Edge to the Group's London headquarters.
The loss before tax from continuing operations in the period of £2.2m (H1
2023: £1.2m) is mainly driven by the Adjusted EBITDA loss coupled with costs
relating to the acquisition of The Edge in FY22 (amortisation, unwinding of
discounted deferred consideration) plus depreciation and finance costs.
Amortisation relating to acquisitions remained flat at £0.2m whilst
deprecation fell by £0.3m to £0.5m, driven by property efficiency savings,
and finance costs reduced by £0.1m to £0.5m due to a reduction in the
unwinding of discounted deferred consideration. The loss from the discontinued
operations of Video Marketing and Brand Content was £0.4m (H1 2023: £0.4m).
Much improved profitability is anticipated in H2 2024 as further savings are
realised as part of the Group's efficiency and synergy programme, and as
television production is typically weighted to the summer and autumn months.
This is supported by the Group's pipeline.
Earnings per share
Basic and diluted loss per share from continuing operations in the period was
10.13p (H1 2023: 5.57p).
Dividend
No dividend is proposed. The Board considers the Group's investment plans,
financial position and business performance in determining when to pay a
dividend.
STATEMENT OF FINANCIAL POSITION
Assets
Cash at the end of June 2024 was £4.1m, having decreased by £0.8m during the
period.
The Group used cash of £0.3m in the year (H1 2023: cash generated of £3.5m)
in its operations, mainly driven by the loss in the period offset by a
decrease in working capital due to tight working capital management. Cash used
in investing and financing activities was £0.5m, a £0.4m reduction
year-on-year, as capital expenditure was kept to a minimum.
The Group had an outstanding balance on long-term debt of £3.5m as at 30 June
2024 which has remained unchanged (2023: £3.5m). The Directors believe the
Group has strong shareholder support. The long-term debt holders are also
major shareholders who own 41% of the Group's shares, and the debt has no
financial covenants.
As at 25 September the Group's cash position was £4.2m.
Equity and Liabilities
The £2.6m decrease in equity and liabilities results from the loss for the
period of £2.6m.
The Group had an outstanding balance on long-term debt of £3.5m as at 30 June
2024 which has remained unchanged (2023: £3.5m). The Directors believe the
Group has strong shareholder support. The long-term debt holders are also
major shareholders who own 41% of the Group's shares, and the debt has no
financial covenants.
Will Sawyer
Chief Financial Officer
Zinc Media Group plc consolidated income statement
For the six months ended 30 June 2024
Restated* Restated*
Unaudited Unaudited Audited
Half Year to Half Year to Year to
30 June 30 June 31 December
2024 2023 2023
Note £'000 £'000 £'000
Revenue 3 14,084 17,685 38,851
Cost of sales (8,294) (10,480) (23,746)
Gross Profit 5,790 7,205 15,105
Operating expenses (7,566) (7,795) (15,853)
Operating loss (1,776) (590) (748)
Analysed as:
Adjusted EBITDA (922) 562 1,446
Depreciation (502) (756) (1,470)
Amortisation (232) (231) (462)
Adjusting Items 4 (120) (165) (262)
Operating Loss (1,776) (590) (748)
Finance costs (460) (584) (776)
Finance income 15 2 9
Loss before tax (2,221) (1,172) (1,515)
Taxation (debit)/credit - (35) (8)
Loss for the period from continuing operations (2,221) (1,207) (1,523)
Loss for the period from discontinued operations 5 (380) (409) (448)
Loss for the year (2,601) (1,616) (1,971)
Attributable to:
Equity holders (2,607) (1,623) (1,990)
Non-controlling interest 6 7 19
Retained loss for the period (2,601) (1,616) (1,971)
Earnings per share
From continuing operations:
Basic Loss per Share 6 (10.13)p (5.57)p (7.01)p
Diluted Loss per Share 6 (10.13)p (5.57)p (7.01)p
From discontinued operations:
Basic Loss per Share 6 (1.73)p (1.88)p (2.04)p
Diluted Loss per Share 6 (1.73)p (1.88)p (2.04)p
* The prior period figures have been restated to account for the discontinued
operations of the Video Marketing and Brand Content division of Zinc
Communicate.
Zinc Media Group plc consolidated statement of financial position
As at 30 June 2024
Unaudited Unaudited
Audited
30 June 30 June 31 December
2024 2023 2023
Note £'000 £'000 £'000
Assets
Non-current assets
Goodwill and intangible assets 7 7,009 7,451 7,221
Property, plant and equipment 8 856 1,126 1,016
Right-of-use assets 10 222 707 443
8,087 9,284 8,680
Current assets
Inventories 71 299 63
Trade and other receivables 9 9,485 11,350 10,649
Cash and cash equivalents 4,070 5,777 4,948
13,625 17,426 15,660
Total assets 21,713 26,710 24,340
Equity and liabilities
Shareholders' equity
Called up share capital 13 28 27 28
Share premium account 9,546 9,546 9,546
Share based payment reserve 625 566 547
Merger reserve 1,163 558 1,163
Retained earnings (8,115) (5,276) (5,508)
Total equity attributable to equity holders of the parent 3,247 5,421 5,776
Non-controlling interests 27 23 21
Total Equity 3,274 5,444 5,797
Liabilities
Non-current
Borrowings - 3,480 -
Provisions 12 276 371 276
Lease liabilities 10 29 164 57
Trade and other payables 1,940 2,643 1,940
2,245 6,658 2,273
Current
Trade and other payables 11 12,515 13,908 12,282
Current tax liabilities 77 237 165
Lease liabilities 10 140 463 360
Borrowings 3,462 - 3,463
16,194 14,608 16,270
Total liabilities 18,439 21,266 18,543
Total equity and liabilities 21,713 26,710 24,340
Zinc Media Group plc consolidated statement of cash flows
For the six months ended 30 June 2024
Unaudited Unaudited Audited
Half year to Half year to Year to
30 June 30 June 31 December
2024 2023 2023
£'000 £'000 £'000
Cash flows from operating activities
Loss for the period before tax from continuing operations (2,221) (1,172) (1,515)
Loss for the period before tax from discontinued operations (380) (409) (448)
(2,601) (1,581) (1,963)
Adjustments for:
Depreciation 502 760 1,478
Amortisation and impairment of intangibles 232 231 462
Finance costs 158 584 385
Finance income (15) (2) (9)
Share based payment charge 78 101 195
Gain on disposal of assets - (14) (29)
Adjustment to property leases - (129) -
Fees paid in shares - - 30
Remeasurement of contingent consideration payable - - 118
(1,646) (50) 667
(Increase)/decrease in inventories (8) (225) 10
Decrease/(increase) in trade and other receivables 1,164 (720) (58)
Increase in trade and other payables 145 4,082 2,876
Cash generated from / (used in) operations (345) 3,087 3,495
Finance income 15 2 9
Finance cost (159) (23) (411)
Net cash flows (used in)/generated from operating activities 489 3,066 3,093
Investing activities
Purchase of property, plant and equipment (122) (322) (505)
Disposal of property, plant and equipment - 14 13
Purchase of intangible assets (20) (12) (12)
Net cash flows used in investing activities (142) (320) (504)
Financing activities
Borrowings repaid - (203) -
Principal elements of lease payments (248) (400) (905)
Contingent acquisition consideration paid - - (327)
Dividends paid to NCI - - (14)
Net cash flows generated used in financing activities (248) (603) (1,246)
Net increase/(decrease) in cash and cash equivalents (879) 2,143 1,343
Translation differences 1 2 (27)
Cash and cash equivalents at beginning of period 4,948 3,632 3,632
Cash and cash equivalents at end of period 4,070 5,777 4,948
Share Share Share based payment Merger Retained Non-controlling Total
capital premium reserve reserve earnings Total equity attributable to equity holders of the parent interest equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 January 2023 27 9,546 457 566 (3,653) 6,943 16 6,959
Loss and total comprehensive expense for the period - - - - (1,990) (1,990) 19 (1,971)
Equity-settled share-based payments - - 90 - 105 195 - 195
Consideration paid in shares 1 - - 597 - 598 - 598
Directors remuneration paid in shares - - - - 30 30 - 30
Dividends paid - - - - - - (14) (14)
Total transactions with owners of the Company 1 - 90 597 (1,855) (1,167) 5 (1,162)
Balance at 31 December 2023 28 9,546 547 1,163 (5,508) 5,776 21 5,797
Balance at 1 January 2023 27 9,546 457 566 (3,653) 6,943 16 6,959
Total comprehensive expense for the year - - - - (1,623) (1,623) 7 (1,616)
Equity-settled share-based payments - - 101 - - 101 - 101
Total transactions with owners of the Company - - 101 - (1,623) (1,522) 7 (1,515)
Balance at 30 June 2023 27 9,546 558 566 (5,276) 5,421 23 5,444
Balance at 1 January 2024 28 9,546 547 1,163 (5,508) 5,776 21 5,797
Total comprehensive expense for the year - - - - (2,607) (2,607) 6 (2,601)
Equity-settled share-based payments - - 78 - - 78 - 78
Total transactions with owners of the Company - - 78 - (2,607) (2,529) 6 (2,523)
Balance at 30 June 2024 28 9,546 625 1,163 (8,115) 3,247 27 3,274
Notes to the consolidated financial statements
1) GENERAL INFORMATION
The Company is a public limited company incorporated in the United Kingdom.
The address of its registered office is 4th Floor, Saltire Court, 20 Castle
Terrace, Edinburgh EH1 2EN. Its shares are traded on the AIM Market of the
London Stock Exchange plc (LSE:ZIN).
2) BASIS OF PREPARATION
The interim results for the six months ended 30 June 2024 have been prepared
on the basis of the accounting policies expected to be used in the 2024 Zinc
Media Group plc Annual Report and Accounts and in accordance with the
recognition and measurement requirements of UK adopted International
Accounting Standards (IAS) but do not include all the disclosures that would
be required under IAS and should be read in conjunction with the accounts for
the period ended 31 December 2023.
The same accounting policies, presentation and methods of computation are
followed in these interim condensed set of financial statements as have been
applied in the Group's latest annual audited financial statements.
The interim results, which were approved by the Directors on 27 September
2024, are unaudited. The interim results do not constitute statutory
financial statements within the meaning of section 434 of the Companies Act
2006.
Comparative figures for the 12 months ended 31 December 2023 have been
extracted from the statutory accounts for the Group for that period, which
carried an unqualified audit report, did not include a reference to any
matters to which the auditor drew attention by way of emphasis of matter, did
not contain a statement under section 498(2) or (3) of the Companies Act 2006
and have been delivered to the Registrar of Companies.
3) SEGMENTAL INFORMATION
The operations of the group are managed in two principal business divisions
that generate revenue: Television and Content production. These divisions are
the basis upon which the management reports its primary segmental information.
The activities undertaken by the Television segment include the production of
television. The Content Production segment includes brand and corporate film
production and publishing.
Restated Restated
Unaudited Unaudited Audited
Half Year to Half Year to Year to
30 Jun 2024 30 Jun 2023 31 Dec 2023
Revenues by Business Division (continuing operations) £'000 £'000 £'000
Television 8,232 11,004 24,122
Content production 5,852 6,681 14,729
Total 14,084 17,685 38,851
4) ADJUSTING ITEMS
Adjusting items are presented separately as, due to their nature or the
infrequency of the events giving rise to them, this allows shareholders to
understand better the elements of financial performance for the period, to
facilitate comparison with prior periods and to assess better the trends of
financial performance.
Unaudited Unaudited Audited
Half Year to Half Year to Year to
30 Jun 2024 30 Jun 2023 31 Dec 2023
£'000 £'000 £'000
Reorganisation and restructuring costs (42) (39) (121)
Acquisition costs - - (80)
Share based payment charge (78) (101) (195)
Profit on disposal of assets - 14 29
Tax arising on share options paid by company - - (267)
Change in fair value of contingent consideration in respect of The Edge - - 372
Other exceptional items - (39) -
Total (120) (165) (262)
5) DISCONTINUED OPERATIONS
The Video Marketing and Brand Content division of Zinc Communicate has had a
negative impact on the Group's overall profitability and, following a
strategic and market review, the Group decided to wind down this division. The
market has been challenging, particularly for sub-scale businesses, and the
Group decided to focus its corporate and brand production within The Edge,
which is larger and more established. Some staff moved from Zinc
Communicate's Video Marketing and Brand Content division to produce corporate
and brand films in The Edge.
Unaudited Unaudited Audited
Half Year to Half Year to Year to
30 Jun 2024 30 Jun 2023 31 Dec 2023
£'000 £'000 £'000
Revenue 285 387 1,374
Expenses (536) (792) (1,814)
Adjusted EBITDA loss (251) (405) (440)
Adjusting items (125) - -
Amortisation and depreciation (4) (4) (8)
Loss before tax from discontinued operations (380) (409) (448)
Income tax - - -
Loss after tax from discontinued operations (380) (409) (448)
6) EARNINGS PER SHARE
Basic loss per share (EPS) for the period equals the loss after tax from
continuing operations attributable to the Company's ordinary shareholders
divided by the weighted average number of issued ordinary shares.
When the Group makes a profit from continuing operations, diluted EPS equals
the profit attributable to the Company's ordinary shareholders divided by the
diluted weighted average number of issued ordinary shares. When the Group
makes a loss from continuing operations, diluted EPS equals the loss
attributable to the Company's ordinary shareholders divided by the basic
(undiluted) weighted average number of issued ordinary shares. This ensures
that EPS on losses is shown in full and not diluted by unexercised share
options or awards.
Restated Restated
Unaudited Unaudited Audited
Half Year to Half Year to Year to
30 Jun 2024 30 Jun 2023 31 Dec 2023
£'000 £'000 £'000
Weighted average number of shares used 21,985,965 21,806,834 21,985,965
in basic and diluted earnings per share calculation
Potentially dilutive effect of share options 1,223,052 1,549,458 1,269,782
Continuing operations
Basic Loss per Share (10.13)p (5.57)p (7.01)p
Diluted Loss per Share (10.13)p (5.57)p (7.01)p
Discontinued Operations
Basic Loss per Share (1.73)p (1.88)p (2.04)p
Diluted Loss per Share (1.73)p (1.88)p (2.04)p
7) GOODWILL AND INTANGIBLE ASSETS
Goodwill Brands Customer Relationships Software Total
£000 £000 £000 £000 £000
Net Book Value
At 30 June 2024 4,558 1,204 1,222 25 7,009
At 30 June 2023 4,558 1,376 1,482 35 7,451
At 31 December 2023 4,558 1,290 1,351 22 7,221
8) PROPERTY, PLANT AND EQUIPMENT
Land and buildings Office and computer equipment Total
Motor Vehicles
£000 £000 £000 £000
Net book value
As at 30 June 2024 106 4 746 856
As at 30 June 2023 146 6 974 1,126
As at 31 December 2023 107 5 904 1,016
9) TRADE AND OTHER RECEIVABLES
Unaudited Unaudited Audited
30 Jun 2024 30 Jun 2023 31 Dec 2023
£'000 £'000 £'000
Current
Trade receivables 5,251 7,520 6,453
Less provision for impairment (254) (270) (237)
Net trade receivables 4,997 7,250 6,216
Prepayments 686 566 574
Other receivables 1,096 787 883
Deferred tax - 41 -
Contract assets 2,706 2,706 2,976
Total 9,485 11,350 10,649
The carrying amount of trade and other receivables approximates to their fair
value. The creation and release of provision for impaired receivables have
been included in operating expenses in the income statement.
The maximum exposure to credit risk at the reporting date is the carrying
value of each class of asset above. The Group does not hold any collateral as
security for trade receivables. The Group is not subject to any significant
concentrations of credit risk.
10) LEASES AND RIGHT OF USE ASSETS
Right-of-use assets
Short leasehold land Office and computer equipment Total
and buildings
£'000 £'000 £'000
Balance as at 30 June 2023 688 19 707
Additions 166 - 166
Depreciation (411) (19) (430)
Balance as at 31 December 2023 443 - 443
Additions - - -
Depreciation (221) - (221)
Balance as at 30 June 2024 222 - 222
Lease
liabilities
Lease liabilities are presented in the statement of financial position as
follows:
Unaudited Unaudited Audited
30 Jun 2024 30 Jun 2023 31 Dec 2023
£000 £000 £'000
Current 140 463 360
Non-current 29 164 57
169 627 417
11) TRADE AND OTHER PAYABLES
Unaudited Unaudited Audited
30 Jun 2024 30 Jun 2023 31 Dec 2023
£'000 £'000 £'000
Current
Trade payables 1,469 1,892 1,150
Other payables 269 40 130
Other taxes and social security 498 1,275 1,479
Accruals 3,087 3,949 4,646
Contract liabilities 6,643 5,907 4,485
Contingent consideration payable 549 845 392
Total 12,515 13,908 12,282
Non-Current
Contingent consideration payable 1,940 2,643 1,940
Total 14,455 16,551 14,222
The Directors consider that the carrying amount of trade and other payables
approximates to their fair value. The Group's payables are unsecured.
12) PROVISIONS
30 Jun 30 Jun 31 Dec
2024 2023 2023
£'000 £'000 £'000
Provisions 276 371 276
Movement in provisions
£'000
At 30 June 2023 371
Net decrease in provision in the period (95)
At 31 December 2023 276
Net increase in provision in the period -
At 30 June 2024 276
The provisions relate to dilapidations on property leases.
13) SHARE CAPITAL
Unaudited Half Year Unaudited Half Year Audited Year
to 30 Jun 24 to 30 Jun 23 To 31 Dec 23
Number of Shares Share Capital £'000 Number of Shares Share Capital £'000 Number of Shares Share Capital £'000
Ordinary Shares
At start of period 22,765,327 28 21,806,834 27 21,806,834 27
Consideration paid in shares - - - - 654,637 1
Shares issued in lieu of fees - - - - 33,783 -
Shares issued to directors - - - - 270,073 -
At end of period 22,765,327 28 21,806,834 27 22,765,327 28
Total called up share capital 22,765,327 28 21,806,834 27 22,765,327 28
14) POST BALANCE SHEET EVENTS
There are no post balance sheet events to report.
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