Transcript Document
Interim Results Presentation
September 2006
Today’s Agenda
1. 2006 Interim Results Review
2. Business Review
3. Future Prospects
2006 Overview
Improved financial performance
Focus on improving the quality of core recurring
revenues
Acquisitions performing well:
– Ideal Music fully integrated
– MusicStyling.com exceeding expectations
Refinancing completed following sale and
leaseback of head office
Financial Highlights
Half Year Turnover
Recurring
Other
Total
Operating Profit £91k
Adjusted EBITDA £868k
£2.4m
£1.5m
£3.9m
2006 Interim Results
6 months
30 June
2006
£000
Sales
3,946
Recurring revenues
2,419
Service sales
485
System sales
1,042
Adjusted EBITDA
Depreciation
868
(278)
Adjusted operating profit before ‘one-off’ overhead expenditure
590
One-off overhead expenditure
(89)
Operating profit
501
Charge for share scheme awards
(66)
Amortisation of goodwill
(344)
Interest
(120)
Profit/(Loss) before Tax
Earnings/(loss) per share
(29)
(0.05)p
Consolidated Balance Sheet
30 June
2006
31 December
2005
£000
£000
13,348
12,642
1,826
2,006
15,174
14,648
621
482
2,277
2,051
18,072
17,181
Deferred consideration
(625)
(300)
Trade creditors
(910)
(622)
Accruals and deferred income
(1,582)
(1,648)
Other creditors
(1,480)
(1,452)
(214)
(284)
Creditors
(4,811)
(4,306)
Net finance creditors
(3,354)
(3,305)
9,907
9,570
Intangible fixed assets
Tangible fixed assets
Total fixed assets
Stock
Debtors
Total assets
Social security and other tax
Net assets
Net Creditors
£’000s
Overdraft/(cash)
Long Term loans
Finance Lease and HP
30 June
31 December
2006
2005
769
558
2,557
2,716
28
31
3,354
3,305
Business Review
Trading Highlights
Major contract win with
– 500 new store installs
– 700+ stores on service by the end of 2006
– Possible 100+ store upgrade to AV in 2007
MusicStyling.com exceeding expectations
– Circa 650 music zones in 180 luxury hotels worldwide
– New contract win with
– Now installing in all 24
Trading Highlights
Improving distribution costs:
Growing take up of broadband delivery systems
New supply terms secured with Alcas
Contract renewals and service upgrades with:
Refinancing
Sale and leaseback of Chesterfield offices
£1.6m (pre expenses)
£1.2m used to reduce debt
£0.4m (less expenses) to working capital
Book value of asset £980k – exceptional profit c. £0.5m
10 year lease at initial rent of £114,500 p.a.
New Banking Facilities
New banking facilities completed
Ability to borrow at below cost of capital
Well placed for further acquisitions
Licensing
Historic PPL & MCPS outstandings settled
Near Term Outlook
PPL Performance Licensing Costs under review
Retail and leisure markets remain challenging
Increasing importance of differentiation
Increased Sales Resources
2 experienced sales consultants appointed
2 sales graduates appointed
1 additional Music Styling consultant appointed
Growing order book and pipeline
Confident of meeting market expectations for the
year
Near Term Outlook
Imagesound Activity
2 stores networked August
Installing 3 stores September
3 stores pilot concluding September
AV Pilot installing in September
Tender expected in September
Paris Restaurant installed in September
Near Term Outlook
Music Styling Activity
First install to new group in October
- requiring 16 zones of bespoke music
Pitching for preferred supplier status
- expected September
New client first install for Amman
- installing now
Longer Term Outlook
Market opportunity remains attractive
Continue to improve operational gearing
Adding new subscribers to existing systems
Large number of outlets still not using a third party
provider
Fragmented sector offers opportunities for further
consolidation
Competitor Analysis UK Suppliers
Name
Outlet
Key customers
DMX UK
20,000
Boots, Arcadia Group, H&M
Imagesound plc
12,700
45 major retail & leisure clients
TSG
4,500
Lloyds No1, Pizza hut
Immedia plc
4,500
Lloyds Chemist, Londis
TSC
2,000
Burger King, Café Nero
GMS
1,000
MFI, Clarks
Avanti
1,500
Toni & Guy, Translusis
Kalidovision
1200
Venue Bars
Creative Retail Entertainment
1,200
M&B Birthdays
Team Talk
1,200
Asda, Allsports
C-Burn
1,000
Conran Restaurants, S&N
Radio Ga Ga
500
All Bar One
Directors
Derek Mapp
Executive Chairman
Founder of Tom Cobleigh plc & Leapfrog
Chairman of Staffline plc and senior NED at Informa plc
Michael Clark
Managing Director
Imagesound founder
Ken Pratt
Finance Director
Former FD and co-Director of Tom Cobleigh plc and Eton
Group Limited
Richard Gregory
Non-exec Director
Former Managing Director Yorkshire Television
Non-exec Director of Yorkshire & Clydesdale Banks and
National Australia Group Europe Limited
Charles Fairbairn
Non-exec Director
Previously ACI plc Finance Director
Previously Pearson plc
David Clayton-Smith
Non-exec Director
Management Consultant
12 yrs retail experience with Halfords, Boots, Do It All
Group Marketing Director of Courage