CERES MEDIA INTERNATIONAL PLC: Final Results

 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 
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