CERES MEDIA INTERNATIONAL PLC ("Ceres" or the "Company" or the "Group") Final Results to 31 July 2012 The Company has experienced tough trading conditions since admission of its shares to trading on AIM in September 2011, despite this, the directors, albeit cautious about the future, are hopeful that the Company's products can be successfully exploited in existing and developing marketplaces and segments. The board would like to thank customers, shareholders and business partners for their continued support. Financial Results 2012 2011 (£ 000) (£ 000) Revenue 162 30 Loss before income tax (1,653) (485) Cash Balance at year end 28 56 Inventories 341 163 Exceptional items included within the loss 868 - Trading conditions for the Company remain challenging with performance having been impacted by the poor general economic conditions and specific structural issues impacting the print material distribution sector, especially in the United Kingdom. The directors have reacted to these changes by refocusing the Company's sales strategy and by directly targeting potential end-users of the product, simplifying the distribution process and optimising price competitiveness. Notwithstanding this, to date there has been a slower than expected adoption by end-users of the Company's core product ranges. The directors have noted a steady increase in sales of Chorus / Gossyp in the US over the last months of the current trading year. OPERATIONS SUMMARY TierraFilmTM window cling product is designed to replace existing PVC window clings used in point of sale window applications and provide the customers with an environmentally sound alternative. This product was launched in January 2012, however, technical issues surrounding the physical fixing process and the delays in market adoption have led to slower than expected off-take by end-users. The directors anticipate that a newly formulated and improved TierraFilmTM window cling product adopting a light-tack adhesive in response to market feedback will be available shortly enabling existing stocks to be reworked and successfully sold in the UK market. Additional uses are being developed for existing raw material stock to minimise waste and to generate new sales channels. TierraFilmTM Backlit 100 and 200 has been developed specifically for the `Out of Home' advertising market to replace existing medium with an environmentally sound alternative. The approval process by the three major `Out of Home' media owners and their supply chain has taken significantly longer than was originally anticipated and this has precluded the Company from selling product in its core market area. I am pleased to announce that as of January 2013 the TierraFilm ranges are now listed by the three major `Out of Home' media owners in the UK opening up this large market. The Company is in discussions and advanced product testing with a number of premium branded entities to initiate national advertising campaigns which are anticipated to commence by April 2013. Naturewoven Chorus and Gossyp The sales of these two lines remain below the board's expectations, although there have been recent indications of improvements in off-take for Chorus in the US with a regular and growing sales pattern being established. After extensive testing Chorus and Gossyp were approved in March 2012 by Hewlett Packard ("HP") for use on its digital print machines - this should build significant confidence with printers who use HP's printers as well as provide manufacturer approved settings for optimal use on both products. Awareness of the NatureWovenTM range of products continues to increase and the Company is pleased to have been nominated as a finalist at the recent Sustainable Business Council of Los Angeles Awards. The Company has recently decided to transfer all UK / Europe based stocks of Chorus and Gossyp to the US marketplace to support the sales initiatives underway in this market. As announced on 3 September 2012 the Company received its first orders for NatureNetting, the Company's spectacular new event screening product designed specifically to support the highest profile events that took place in London during the summer of 2012. The products which can be colour matched to any pantone reference were very well received by the organisers and will be rolled out through major event management organisations in the UK and US during Spring and Summer, 2013. In the period from May to July despite very tight lead times and the narrow window of availability NatureNetting contributed over 50% of the Company's revenues during the last fiscal. The Company continues to develop and modify its products in response to market feedback in order to increase sales and utilise stock holding. The Company has recently worked in partnership with a US business to develop a magnetic posting / wallpaper variant for Chorus exclusively for the North American market - this is expected to become a significant monthly revenue stream. Geographically the Company's spread of business has become much more focussed with the US business concentrating on Chorus and Gossyp with the UK focussing on TierraFilmTM and NatureNetting. It is anticipated that the UK's focus will be retained while US opportunities for TierraFilmTM Backlit and NatureNetting will be developed later in 2013 Immediately after admission to AIM the Company embarked on an ambitious product development and market development campaign with the subsequent increase in overhead in particular in staff and product development costs as well as stock holding. In the light of continued lower than expected sales, the directors significantly reduced overhead throughout 2012 and are continuing to carefully manage working capital. The directors are also actively managing the current stock levels to bring them more into line with current trading. FINANCIAL SUMMARY Revenues for the year ended 31 July 2012 were £162k (2011: £30k). Operating losses were £1,646k (2011: £480k). On 22 May 2012 the Company announced that it raised £210,000 by way of an issue of 21,000,000 new ordinary shares at a price of 1 pence per share. The proceeds of this placing were used to provide additional working capital to the business. Included within the losses for the year are exceptional items amounting to £ 868,088 relating to a write down of the carrying value of the subsidiaries in the financial statements. Cash and cash equivalent balances as at 31 July 2012 amounted to £27,639. The Company is experiencing continued working capital constraints, which inhibit faster levels of revenue growth and the board is reviewing various options to raise further capital in tranches during in the coming months. GENERAL MEETING As at the date of this statement the Company's share price is trading below the nominal value of its ordinary shares, therefore the directors are convening a general meeting of the Company to seek, amongst other approvals, shareholder authority to undertake a capital reorganisation, the effect of which will be to subdivide each existing ordinary into an ordinary share of £0.001 and a deferred share of £0.009. Details of the capital reorganisation are set out in a circular that will shortly be posted to all shareholders and will contain details of a proposed placing of new ordinary shares to provide further working capital. This fundraising should enable the company to settle all overdue creditors and provide some working capital In the event that this fundraising is not successful the future of the group may be in doubt. DIRECTORATE CHANGES Norman Fetterman, the former Non-executive Chairman resigned as a director of the Company in March 2012, at which time I was appointed as Interim Executive Chairman to guide the business through a particularly difficult period in its evolution and to lead the fund raising that was completed in June, 2012. In September, 2012 I stepped down as Executive Chairman but remain as a non-executive director of the Company. While the Board is conscious of the need to strengthen its executive team the financial integrity of the Company is at this moment paramount and future appointments have been delayed until such time as the Company grows and raises further funds. Leslie Barber 31 January 2013 Consolidated Statement of Comprehensive Income for the year ended 31 July 2012 Notes Year Ended Period 1.3.11 31.7.12 to 31.7.11 £ £ CONTINUING OPERATIONS Revenue 1 161,597 30,054 Cost of sales (257,193) (37,688) GROSS LOSS (95,596) (7,634) Administrative expenses (1,550,550) (472,532) OPERATING LOSS (1,646,146) (480,166) Finance costs (6,669) (4,859) Finance income - 250 LOSS BEFORE INCOME TAX (1,652,815) (484,775) Income tax - - LOSS FOR THE YEAR (1,652,815) (484,775) OTHER COMPREHENSIVE INCOME - - TOTAL COMPREHENSIVE INCOME (1,652,815) (484,775) FOR THE YEAR Loss attributable to: (1,652,815) (484,775) Owners of the parent Total comprehensive income (1,652,815) (484,775) attributable to: Owners of the parent LOSS PER SHARE BASIC AND DILUTED LOSS PER SHARE 2 0.0452 0.021 Consolidated Statement of Financial Position at 31 July 2012 Notes 2012 2011 £ £ ASSETS NON-CURRENT ASSETS Goodwill - 868,088 Intangible assets 354,540 223,306 Property, plant and equipment 5,143 9,057 Investments - - 359,683 1,100,451 CURRENT ASSETS Inventories 340,942 162,663 Trade and other receivables 111,551 98,313 Cash and cash equivalents 27,639 55,911 480,132 316,887 TOTAL ASSETS 839,815 1,417,338 EQUITY SHAREHOLDERS' EQUITY Called up share capital 5,574,070 5,200,348 Share premium 838,822 - Merger reserve 1,157,850 1,157,850 Reverse acquisition reserve (4,602,402) (4,602,402) Retained earnings (2,527,987) (875,172) TOTAL EQUITY 440,353 880,624 LIABILITIES CURRENT LIABILITIES Trade and other payables 323,351 536,714 Financial liabilities - borrowings 76,111 - 399,462 536,714 TOTAL LIABILITIES 399,462 536,714 TOTAL EQUITY AND LIABILITIES 839,815 1,417,338 Consolidated Statement of Cash Flows for the year ended 31 July 2012 Notes Year Ended Period 31.7.12 1.3.11 £ to 31.7.11 £ Cash flows from operating activities Cash generated from operations (1,069,531) (313,559) Interest paid (6,669) (4,859) Net cash from operating (1,076,200) (318,418) activities Cash flows from investing activities Purchase of intangible fixed assets Purchase of intangible fixed (131,234) (28,006) assets Purchase of tangible fixed assets (1,412)) (6,921) Acquisition of subsidiaries, net - 385,144 of cash Interest received - 250 Net cash from investing (132,646) 350,467 activities Cash flows from financing activities Amount introduced by directors 5,480 - Amount withdrawn by directors (9,561) - Share issue 269,722 10,334 Share premium 1,015,278 - Share issue costs (176,456) - Net cash from financing 1,104,463 10,334 activities (Decrease)/increase in cash and (104,383) 42,383 cash equivalents Cash and cash equivalents at 55,911 13,528 beginning of year Cash and cash equivalents at end (48,472) 55,911 of year NOTES 1. TURNOVER As the Group operates in one business segment and as such this is the primary reporting segment. The Group's secondary segment is geographical. The segmental results by geographical area as shown below. Year Ended Period 31.7.12 1.3.11 £ to 31.7.12 £ Revenue EU 112,438 16,817 Rest of world 61,337 13,237 173,775 30,054 2. EARNINGS PER SHARE Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares. Reconciliations are set out below. Earnings 2012 Loss £ Weighted per-share amount average number of shares Basic EPS Earnings attributable to ordinary shareholders (1,652,815) 36,584,449 0.0452 Effect of dilutive - - - securities Diluted EPS Adjusted earnings (1,652,815) 36,584,449 0.0452 Basic EPS Earnings attributable to (484,775) 23,373,726 0.021 ordinary shareholders Effect of dilutive - - - securities Diluted EPS Adjusted earnings (484,775) 23,373,726 0.021 3. REPORT AND ACCOUNTS The audited report and accounts of the Company for the year to 31 July 2012 have today been posted to shareholders. Enquiries: Ceres Media International PLC Tel: 020 3178 5622 Leslie Barber Nominated Adviser - Cairn Financial Advisers LLP Tel: 020 7148 7900 Liam Murray / Jo Turner Broker - XCAP Securities plc Tel: 0207 101 7070 Jon Belliss / Adrian Kirk END
CERES MEDIA INTERNATIONAL PLC: Final Results
Press spacebar to pause and continue. Press esc to stop.