Mastermailer Holdings plc ("the Company") Interim results for the six months ended 31 December 2012 CHAIRMAN'S STATEMENT Financial data and operating highlights (unaudited) £000's 2012 2011 2010 2009 Turnover 445 631 618 598 Gross Profit 146 232 230 255 Overheads (161) (154) (198) (192) Operating (loss) profit before exceptional (15) 78 32 63 items The trend of lower sales in the first three months of the year continued into the second quarter of our half-year results to December last. As such our turnover fell from £630,728 in the same period of 2011 to £444,707 this time around. This brought about a loss for the period of £15,124 against a profit of £78,477 last time. In the main, the fall in sales is attributed to tough market place competition which has necessitated lowering prices to offset any further erosion in turnover. Unfortunately, even though we continue to cut our overhead running costs we have been unable, as of yet, to stabilise the situation by negotiating lower prices for our mailer products. In addition, under exceptionals, we have been obliged to protect the Company against threats of Patent infringement litigation at a significant cost to ourselves in legal fees. However the main increase in our overheads is attributed to the start-up costs of £30,000 of our new MasterEpay business. We were anticipating that the legal payments, due to inherited patent matters, would be at an end last year but they are proving difficult and we are still having to work hard to bring them to a satisfactory conclusion. As you will be aware all outstanding legal problems stem from the legacy left or created by the previous Board of directors, who were dismissed from the Company back in December 2008. On a brighter note I am pleased to report that sales have started to recover slightly in the third quarter of the year and we are hopeful that the trend will continue for the next three months. However I cannot see us being able to make-up the losses incurred in the first half of 2012-2013. We have done a great deal of ground work on the MasterEpay venture we initiated last year and now that the teething problems we encountered have been overcome we are confident the next three months will see a marked improvement with a big marketing push to potential customers starting in May this year. We already have the agreement of several small companies to sign up with us whereby their employees will in future receive their pay advice via email rather than by post or the traditional hand delivered paper payslip. The introduction of a new e-pay service is definitely the way forward though the change of switching from hand-held payslips, to email or i-phone advice instead, has been met with a little more reluctance than expected, it has also come at a time of sweeping legislation, that includes real time initiative (RTI), which will be become obligatory in April this year. This will enable the revenue to look at the tax affairs of employees at any given time. Our e-pay system will fit in well with this new legislation as will invoicing by way of e-billing, which is another piece of Government red tape that all companies will have to provide for this year. John Cunningham Chairman 28 March 2013 CONSOLIDATED PROFIT AND LOSS ACCOUNT Six months Six months Year ended 31 ended 31 ended 30 December December June 2012 2011 2012 £ £ £ (unaudited) (unaudited) (audited) TURNOVER 444,707 630,728 1,361,495 Cost of sales (298,809) (398,752) (880,193) GROSS PROFIT 145,898 231,976 481,302 Administrative expenses (161,022) (153,499) (319,790) (15,124) 78,477 161,512 Exceptional item (94,247) (62,570) (116,954) OPERATING PROFIT/(LOSS) (109,371) 15,907 44,558 Interest payable and similar (20,260) (14,557) (32,015) charges PROFIT/(LOSS) ON ORDINARY (129,631) 1,350 12,543 ACTIVITIES BEFORE TAXATION Tax on profit/(loss) on ordinary - - - activities PROFIT/(LOSS) FOR THE PERIOD (129,631) 1,350 12,543 AFTER TAXATION PROFIT/(LOSS) PER SHARE - Basic (0.83)p 0.01p 0.08p Diluted (0.77)p 0.01p 0.07p CONSOLIDATED BALANCE SHEET 31 December 2012 30 June 2012 £ £ £ £ (unaudited) (audited) FIXED ASSETS Intangible fixed assets 172,896 182,358 Tangible fixed assets 3,057 3,508 175,953 185,866 CURRENT ASSETS Stocks 20,778 25,603 Debtors 186,060 331,133 Cash at bank and in hand 952 1,452 207,790 358,188 CREDITORS Amounts falling due (671,281) (701,961) within one year NET CURRENT LIABILITIES (463,491) (343,773) NET LIABILITES (287,538) (157,907) CAPITAL AND RESERVES Called up share capital 156,253 156,253 Deferred shares 704,468 704,468 Share premium account 1,177,449 1,177,449 Profit and loss account (2,325,708) (2,196,077) SHAREHOLDERS' DEFICIT (287,538) (157,907) CONSOLIDATED CASHFLOW STATEMENT Six months Six months Year ended 31 ended 31 ended December December 30 June 2012 2011 2012 £ £ £ (unaudited) (unaudited) (audited) Net cash flow from operating activities 11,540 17,659 (48,027) Returns on investments and servicing of (20,260) (14,557) (27,687) finance Taxation - - - Capital expenditure and financial - - (750) investment CASH (OUTFLOW)/INFLOW BEFORE FINANCING (8,720) 3,102 (76,464) Financing - - - INCREASE/(DECREASE) IN CASH IN THE PERIOD (8,720) 3,102 (76,464) RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET DEBT Six months Six months Year ended 31 ended 31 ended 30 December 2012 December 2011 June 2012 £ £ £ (unaudited) (unaudited) (audited) Increase/(decrease) in cash in the (8,720) 3,102 (76,464) period MOVEMENT IN NET DEBT IN THE PERIOD (8,720) 3,102 (76,464) Net debt at the start of the period (270,206) (193,742) (193,742) NET DEBT AT THE END OF THE PERIOD (278,926) (190,640) (270,206) NOTES TO THE FINANCIAL INFORMATION The results for the half years ended 31 December 2012 and 31 December 2011 are unaudited and do not constitute statutory accounts within the meaning of section 434 of the Companies Act 2006. The Group's auditors have not reviewed the unaudited interim results. The financial information for the ended 30 June 2012 has been extracted from the statutory accounts for that year. The accounting policies used in the preparation of the audited financial statements as at 30 June 2012 have been used in the preparation of this report. These policies are in accordance with United Kingdom Generally Accepted Accounting Practices (UK GAAP). The directors of the Company take responsibility for this announcement. Enquiries: Jim Perry Mastermailer Holdings plc 01295 724 519 Jo Turner or Liam Murray Cairn Financial Advisers LLP 020 7148 7900 END -0- Mar/28/2013 07:00 GMT
MASTERMAILER HOLDINGS PLC: Half-yearly Report
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