Final Results
(Thomson Reuters ONE) - 30 September 2009 Spectrum Interactive plc ("Spectrum", the "Company" or the "Group") Preliminary audited results for the year ended 30 June 2009Spectrum Interactive plc (LSE:SIN), the leading provider of publicinternet access and payphone services, is pleased to announce itspreliminary results for the year ended 30 June 2009.Highlights * Completion, post year-end, of reorganisation of the business into two key divisions, Travel and Hospitality, to focus on delivering a more comprehensive range of communications, IT and entertainment solutions to customers * Growth in WiFi revenue to £4.2m, up 19% from prior year * Interactive business (WiFi and internet desks) now comprises 56% of Group turnover, up from 45% in 2008 and 25% in 2007 * Total turnover from continuing operations down 7% to £14.0m (2008: £15.1m), principally due to 21% decline in payphone turnover * EBITDA down 7% to £2.95m (2008: £3.16m), a solid result in a challenging market environment * Profit before tax of £0.8m (2008: £1.0m), ahead of market expectations * Strong cash generation reduced net debt from £5.2m to £3.8m * Continued removal of approximately 1,000 underperforming UK payphones; total UK payphone units now approximately 4,000Simon Alberga, Chairman of Spectrum Interactive commented: "This has been a challenging year, with our two key markets,airports and hotels, both seeing reductions in their customernumbers. In addition, our payphone business has continued to decline.Against this backdrop we believe that the results for the yeardemonstrate a solid achievement."+-------------------------------------------------------------------+| Spectrum Interactive plc | Arbuthnot Securities || Tel: 01442 205520 | Limited || Mark Lewarne | Tel: 020 7012 2139 || Chief Executive Officer | Alasdair Younie || Philip Congdon | || Chief Financial Officer | || | |+-------------------------------------------------------------------+ CHAIRMAN'S STATEMENTINTRODUCTIONI am pleased to report our final results for the year ended 30 June2009. This has been a challenging year, with our two key markets,airports and hotels, both seeing reductions in their customernumbers. In addition, our payphone business has continued to decline.Against this backdrop we believe that the results for the yeardemonstrate a solid achievement.We have recently completed a reorganisation of the business into twoprincipal commercial divisions, Travel and Hospitality. This willenable us to deliver a more comprehensive range of communications, ITand entertainment solutions to our customers, and I look forward toreporting further progress on this development in due course.During the year we took a difficult decision with regards to ourGerman subsidiary. This business, almost all payphone-related, haddeclined to the point where it was in our opinion no longer viableand was going to need substantial support from the rest of the Group,and we therefore felt we had no choice but to put the subsidiary intoadministrative receivership in July 2008.Financial ReviewGroup turnover from continuing operations fell 7% during the periodfrom £15.1m to £14.0m driven by the 21% decline in payphone turnoverfrom £7.7m to £6.1m. Interactive services (WiFi and internet desks)now comprise 56% of Group turnover, up from 45% in 2008 and 25% in2007.We maintained a keen focus on costs during the year and managed toimprove our gross margin from 40% to 42%. Within this there was asharp decline in the margin on internet desks, which we areaddressing urgently. Administrative expenses fell from £5.6m to£5.0m, although excluding the discontinued German operationadministrative expenses were roughly flat.Profit before tax was £0.8m (2008: £1.0m). As in previous years thebusiness was cash generative, and although EBITDA (earnings before,interest, taxes, depreciation and amortisation) declined from £3.16mto £2.95m due to challenging market conditions, we reduced net debtfrom £5.2m to £3.8m.OutlookDuring the next 12 months, our priorities will be: aggressivedevelopment of our Travel and Hospitality businesses by extending therange of solutions and services we offer to our customers; continuedacquisition of new customer sites; continued rationalisation of thepayphone business; and the selective pursuit of acquisitions whichdeliver complementary solutions and partner locations.The directors are not recommending the payment of a dividend for theyear (2008:nil).I would like to extend my thanks and congratulations to themanagement and employees for their hard work and dedication during adifficult year.SIMON ALBERGAChairmanCONSOLIDATED INCOME STATEMENTYEAR TO 30 JUNE 2009 2009 2008 Note £ £Revenue - continuing operations 2 13,983,879 15,099,719 - discontinued operations 209,645 2,337,267 14,193,524 17,436,986Cost of sales (8,200,847) (10,519,367)Gross profit 5,992,677 6,917,619Administrative expenses (4,968,285) (5,594,086)OPERATING PROFIT 1,024,392 1,323,533Investment revenues 185 6,202Finance costs (234,287) (355,498)PROFIT BEFORE TAX 790,290 974,237Tax (89,560) (551,320)PROFIT FOR THE YEAR continuing operations 668,148 470,746 discontinued operations 32,582 (47,829) 700,730 422,917Earnings per share - basic 3 2.08 1.26pEarnings per share - diluted 3 2.04 1.24pEBITDA 4 2,954,398 3,160,661CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSEYEAR TO 30 JUNE 2009 2009 2008 £ £Exchange difference on translation of foreign (22,595) (362,670)operationsNet expense recognised directly in equity (22,595) (362,670)Profit for the financial year 700,730 422,917Total recognised income and expense for the 678,135 60,247yearCONSOLIDATED BALANCE SHEET30 JUNE 2009 Group 2009 2008 £ £NON CURRENT ASSETSGoodwill 4,198,055 4,198,055Other intangible assets 1,260,026 1,497,463Property, plant and equipment 4,378,232 5,421,621Deferred tax asset 1,559,871 1,649,431 11,396,184 12,766,570CURRENT ASSETSInventories 88,755 138,293Trade and other receivables 1,384,377 1,841,196Cash and cash equivalents 527,880 963,667 2,001,012 2,943,156TOTAL ASSETS 13,397,196 15,709,726CURRENT LIABILITIESTrade and other payables (1,957,452) (2,903,717)Current tax liabilities - (154,840)Obligations under finance leases (501,889) (302,554)Overdrafts (591,548) (864,558)Borrowings (1,532,078) (1,803,284)Provisions (222,195) (360,980)Deferred revenue (130,180) (100,363) (4,935,342) (6,490,296)NET CURRENT LIABILITIES (2,934,330) (3,547,140)NON-CURRENT LIABILITIESBorrowings (1,263,417) (2,272,921)Obligations under finance leases (451,064) (891,488) (1,714,481) (3,164,409)TOTAL LIABILITIES (6,649,823) (9,654,705)NET ASSETS 6,747,373 6,055,021EQUITYCalled up share capital 339,035 339,035Share premium account 5,459,283 5,459,283Own shares (2,553) (2,553)Share-based payment reserve 132,922 118,705Retained earnings 818,686 140,551TOTAL EQUITY 6,747,373 6,055,021CONSOLIDATED CASH FLOW STATEMENTYEAR TO 30 JUNE 2009 Notes Group 2009 2008 £ £Net cash from operating activities - continuing operations 2,379,582 2,723,040 - discontinued operations 30,241 221,288 2,409,823 2,944,328Investing activitiesInterest received 185 6,202Purchase of plant, property and equipment (783,625) (2,095,519)Purchase of intangible assets (20,000) (1,194,464)Cash outflow on discontinuation of German (201,847) -businessNet cash used in investing activities - continuing operations (803,440) (3,174,332) - discontinued operations (201,847) (109,449) (1,005,287) (3,283,781)Financing activitiesRepayment of borrowings (1,417,278) (1,386,953)Repayment of obligations under finance (541,847) (455,411)leasesNew loans raised 113,893 350,000Proceeds from sale and leaseback 300,514 550,064Net cash used in financing activities (1,544,718) (942,300)Net decrease in cash and cash equivalents (140,182) (1,281,753)Cash and cash equivalents at the beginning 99,109 1,336,847of the yearEffect of foreign exchange rate changes (22,595) 44,015Cash and cash equivalents at the end of theyear (63,668) 99,109(including bank overdraft)KEY PERFORMANCE INDICATORSAll figures exclude discontinued 2008 2009 Increaseoperations (decrease) %PayphonesUnits installed at year end 5,095 4,063 (20)%Average units earning revenue duringthe year 5,452 4,605 (16)%Total revenue £ 7,717,621 6,105,889 (21)%Average revenue per unit per month £ 118 110 (7)%WiFiUnits installed at year end 974 1,046 7%Average units earning revenue duringthe year 845 991 17%Total revenue £ 3,551,316 4,231,168 19%Average revenue per unit per month £ 350 355 1%Internet desksUnits installed at year end 1,744 1,697 (3)%Average units earning revenue duringthe year 1,702 1,765 4%Total revenue £ 3,830,782 3,646,822 (5)%Average revenue per unit per month £ 188 172 (9)%1. Basis of preparationThe financial information set out above does not constitute theCompany's statutory accounts for the years ended 30 June 2009 or2008, but is derived from those accounts. Statutory accounts for 2008have been delivered to the Registrar of Companies and those for 2009will be delivered following the Company's annual general meeting. Theauditors have reported on those accounts; their reports wereunqualified, did not draw attention to any matters by way of emphasiswithout qualifying their report and did not contain statements underS.498 (2) or (3) Companies Act 2006.While the financial information included in this preliminaryannouncement has been prepared in accordance with the recognition andmeasurement criteria of IFRSs, this announcement itself does notcontain sufficient information to comply with IFRS's. The Companyexpects to publish full financial statements that comply with IFRSsin early November 2009GOING CONCERNThe Directors have reviewed the Group's cash flow and covenantforecasts for twelve months from the date of signing this statement,and have considered the impact that the current economic uncertaintymay have on the trading activity of the Group. New bank facilitieswere signed during the year, amending the terms of one of the loansto spread certain repayments more evenly. At the same time, theexisting overdraft facility was also renewed for a further twelvemonths. This overdraft facility of £750,000 is due for renewal inMarch 2010. The board is assuming it will continue to be availableafter that date, and the bank have indicated that they see no reasonwhy it would not be renewed. In the course of the current year theGroup will be bidding for new business and seeking to retain existingcustomers as and when their contracts come up for renewal. On thisbasis, the board considers the going concern basis of preparation forthe financial statements to be appropriate.2. Segmental informationThe Board has considered the primary segments to date to be the threemain business areas, payphones, internet desks and WiFi. This is theinformation that the board itself concentrates on, particularly giventhe very different dynamics of the three areas. The secondary segmentsplit is geographical, i.e. the split between the UK business andGermany. As the German business is now discontinued this split willnot be relevant in future periods and the primary segmental splitwill be market sectors with product lines as the secondary split.Year to 30 June 2009 Payphones Desks WiFi Discontinued Other Total Operation £ £ £ £ £ £Revenue 6,105,889 3,646,822 4,231,168 209,645 - 14,193,524Gross profit 3,104,036 941,987 1,873,647 73,007 - 5,992,677Depreciation (478,104) (711,703) (419,151) - (65,046) (1,674,004)Amortisation - (65,089) (192,348) - - (257,437)Segment 2,625,932 165,195 1,262,148 73,007 (65,046) 4,061,236resultUnallocatedcorporate (3,036,844)expensesOperating 1,024,392profitInterestreceivableand similar 185incomeInterestpayable andsimilar (234,287)chargesProfit 790,290before taxTax (89,560)Profit after 700,730taxOtherinformationCapital 24,983 263,211 360,565 - 154,866 803,625additionsBalancesheetAssetsSegment 4,627,806 3,955,172 2,786,790 - - 11,369,768assetsUnallocatedcorporate 2,027,428 2,027,428assetsConsolidated 13,397,196total assetsLiabilitiesSegment (2,743,916) (633,390) (512,583) - - (3,889,889)liabilitiesUnallocatedcorporate (2,759,934) (2,759,934)liabilitiesConsolidatedtotal (6,649,823)liabilities2. SEGMENTAL INFORMATION (continued)Year to 30 June 2008 Payphones Desks WiFi Discontinued Other Total Operation £ £ £ £ £ £Revenue 7,717,621 3,830,782 3,551,316 2,337,267 - 17,436,986Gross profit 3,553,826 1,429,125 1,238,536 696,132 - 6,917,619Depreciation (636,599) (661,533) (237,900) - (60,450) (1,596,482)Amortisation - (84,228) (156,418) - - (240,646)Segment 2,917,227 683,364 844,218 696,132 (60,450) 5,080,491resultUnallocatedcorporate (3,756,958)expensesOperating 1,323,533profitInterestreceivable 6,202and similarincomeInterestpayable and (355,498)similarchargesProfit 974,237before taxTax (551,320)Profit after 422,917taxOtherinformationCapital 15,177 695,310 1,166,111 109,449 122,705 2,108,752additionsBalancesheetAssetsSegment 5,399,093 4,982,083 2,613,384 529,120 - 13,523,680assetsUnallocatedcorporate - - - - 2,186,046 2,186,046assetsConsolidated 15,709,726total assetsLiabilitiesSegment (4,052,664) (1,137,564) (441,000) (614,698) - (6,245,926)liabilitiesUnallocatedcorporate - - - - (3,408,779) (3,408,779)liabilitiesConsolidatedtotal (9,654,705)liabilities3. Earnings per shareThe calculation of the basic and diluted earnings per share is basedon the following data: 2009 2008Earnings £ £Earnings for the purpose of basic and diluted 700,730 422,917earnings per share 2009 2008Number of sharesWeighted average number of ordinary shares forthe purpose of basic earnings per share 33,648,166 33,648,166Effect of dilutive potential ordinary shares: 725,039 468,337share optionsWeighted average number of ordinary shares forthe purpose of diluted earnings per share 34,373,205 34,116,503 2009 2008Earnings per share p pBasic 2.08 1.26Diluted 2.04 1.244. EBITDA (earnings before interest, taxes, depreciation andamortisation) 2009 2008 £ £Profit on ordinary activities after tax 700,730 422,917Net interest 234,102 349,296Tax 89,560 551,320Depreciation 1,673,109 1,596,482Amortisation 257,437 240,646EBITDA 2,954,938 3,160,661---END OF MESSAGE---This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 30.09.2009 - 08:03 Uhr
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