Vitesse Media plc (“Vitesse” or the “Company”) is pleased to announce its audited final results for the year ended 31 January 2016.
- Total revenue decreased by 5.7% to £2.13m (2015: £2.26m) during the transition from low margin event management contracts to our own events
- Gross margin has risen to 70% (2015: 67%)
- EBITDA of £29k (2015: £22k)
- Operating loss at almost breakeven (-£7k) (2015: -£20k) before exceptional costs
- Direct costs reduced by 12% to £672k (2015: £765k)
- Positive action to remove £188k of exceptional costs
- Post-year end, subscription of £250,000 by Chris Ingram, Chairman of the Company, at 1.8p per share to support the Company’s development and expansion
OVERVIEW OF RESULTS
2015/2016 has been a ‘tidying up’ year for Vitesse. Operationally, the Company has ended up in a broadly break-even position with a small operating loss of -7K versus -20K in 2015. While this is, of course, not satisfactory it means that the Company has moved away from the heavy losses of recent years to a more stable footing. The Board is not recommending the payment of a dividend.
Behind the apparent small changes in results, a number of significant things have happened:-
The 5.7% reduction in revenue year-on-year is almost entirely due to the conscious decision in the Events Division to move away from the small, low margin managed events to concentrate on our own events. This included creating new events, of which Women In Technology with 500 attendees in only its second year, is a good example with revenue increasing by 19% £198k.
2. COST OF SALES
Cost of sales reduced by 12.8% compared with last year due, in part, to a reduction in third-party event management coupled with some changes in product mix. Savings in administrative expenses of £54k have been brought about by an underlying reduction in headcount and staff costs, and lower premises costs following the relocation of the office in late 2014.
4. EXCEPTIONAL COSTS
These were a sizeable £188k and followed a close review of the Company’s accounts. The two main items were the previously announced decision not to proceed with the crowd-funding project in the way it was planned, resulting in an impairment charge of £125k, and £44k of legal costs incurred on an aborted transaction.
The Company announced on 29 January 2016 that, conditional on shareholders’ approval, I would invest a total of £250,000 for 13,888,889 new ordinary shares in the Company at 1.8p per share. The proceeds were to be used to support the Company’s development and expansion. A circular was published to convene a general meeting on 12 February 2016 at which shareholders’ approval was obtained.
Good progress has been made in the last two years in cutting costs. While there is some scope for further reductions, this will not play a significant part in the progress of the Company in the near future. Growing volume is now the key. However, there is certainly scope for increased productivity and that is the purpose of the imminent launch of our new technology platform, unifying our digital publishing and IT infrastructure whilst enabling us to build our data. Simply put, we need to attract considerably more of the right audience, measure them better and as a result charge advertisers and sponsors more appropriately.
We are putting more resource into Sales and Marketing – this is emphatically not an area in which to economise! The Company hired its first Commercial Director post year-end and is also making one or two more sales appointments.
Events has been the best performing division in the last few years, but there is still scope to improve: by increasing attendances to existing events and creating new ones – we have a good track record in doing this. This year new launches include The British Small Business Awards and Data 50.
All of the above relates to organic growth and we believe these steps can restore us to a position where the Company makes a sensible profit margin: starting this year, but building into 2017/18. At the same time, if relevant acquisition opportunities present themselves, we must be in the right shape to take advantage of them.
The Group is proposing to change its year-end from 31 January to 31 March with effect from 31 March 2017. The current financial year will therefore be extended by two months to 31 March 2017, following which the Company will announce half-yearly unaudited results to 30 September 2017 with comparable figures for the 6 months ending 30 September 2016. The reason for this change is to ensure the business operations can be managed and reported more effectively. Currently many of the Company’s large and successful events occur at the very end of January and this causes significant pressure in terms of management and finance.
The year has started well with the first four months all ahead of the corresponding months last year.
Notice of AGM and publication of Annual Report
The AGM will be held on 28 July at 10.00am at the offices of Stephenson Harwood LLP, Finsbury Circus, London EC2R 7SH. A notice of meeting together with the Annual Report & Accounts will be dispatched to shareholders on 4 July 2016.
A copy of this Chairman’s Report and audited financial statements will be posted today on the Company’s website at www.vitessemedia.com, as will the Annual Report & Accounts when published in due course.
The audited financial information for the years ended 31 January 2016 and 31 January 2015 contained in this announcement do not constitute statutory accounts as defined in the Companies Act 2006. The comparative financial information is based on the statutory accounts for the financial year ended 31 January 2015. Those accounts, upon which the auditors issued an unmodified opinion with an emphasis of matter paragraph relating to going concern, have been delivered to the Registrar of Companies. The financial information for the year ended 31 January 2016 has been extracted from the audited financial statements of Vitesse Media Plc which will be delivered to the Registrar of Companies in due course. The auditors have issued an unmodified opinion on the financial statements for the year ended 31 January 2016 which includes an emphasis of matter paragraph in respect of going concern and does not include any statement under Section 498 (2) or (3) of the Companies Act 2006. The preliminary announcement was approved by the Board of Directors and authorised for issue on 30th June 2016.
The Group prepares its annual consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) endorsed by the European Union (EU) and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The financial information included in this announcement does not include all the disclosures required by IFRS or the Companies Act 2006 and accordingly it does not itself comply with IFRS or the Companies Act 2006.
For further information, please contact:
Vitesse Media Plc
Executive Chairman: Chris Ingram
Chief Executive: Niki Baker
020 7250 7010
020 7250 7043
Stockdale Securities Limited
Tom Griffiths, 020 7601 6100
Robert Speed, 020 7074 1800
Click here to download the full audited results for the year ended 31 January 2016.