10 April 2008
Adventis Group Plc (“Adventis” or the “Company”)
Preliminary results, for the year ended 31
December 2007
Adventis Group Plc (“ATG”), the AIM quoted multimedia
marketing services and advertising agency, is pleased to announce record results
for the year ended 31 December 2007. The results represent the Company’s third
full trading year since the admission of the Company’s shares to AIM.
·
Group billings (Turnover): £47.1m, up 33% (2006: £35.5m)
·
Pre-tax profit: £2.64m, up 47% (2006: £1.80m)
·
Pre-tax profit margin remains in excess of 20%
·
Earnings per share: 4.33p, up 15.2% (2006: 3.76p)
·
Recommended final dividend up 5% to 0.48p (2006: 0.46p); total up
5% to 0.71p (2006: 0.68p)
·
Net cash of £3.74m at year end (2006: £2.46m)
·
The sole newly acquired business, Leapfrog Medical Communications
Limited contributed 5% to Group billings and made a first time profit
contribution
·
·
Client wins across all our sectors
Prospects
Said
“2007
saw significant consolidation of Group assets and their reorganisation into
structures that more fully exploit their synergies. Leapfrog Medical
Communications Limited made an immediate contribution in its first year of
trading as part of the Group and we continue to consolidate our position in our
market sectors.
The
first quarter results indicate that the Group as a whole is ahead of target and
ahead of last year. Visibility for the
year ahead is generally good and overall we anticipate our clients’ marketing
expenditure continuing at a similar or greater level to the prior year. Cost controls remain paramount and we will
continue to be vigilant especially as economic conditions tighten. We remain
open to, but very selective about, acquisition opportunities in each market
sector.”
Enquiries:
Peter
Linnell, Finance Director
Tel:
020 7034 4795
Tom Griffiths
Tel:
020 7012 2000
Notes to Editors
Adventis’s
strategy is to focus its marketing and media buying services on the healthcare,
financial services and property sectors, in which it has the opportunity to
build significant market positions.
There are
three main strands to Adventis’ strategy to develop the business:
Management
intends to achieve these objectives through a mix of organic development,
acquisitions and by creating structures to attract new senior people with
proven revenue earning ability and appropriate sector expertise.
Chairman’s
statement for the year ended 31 December 2007
2007 proved
to be another excellent year for Adventis with significant advances across key
financial metrics – Turnover + 33%, profit before tax (“PBT”) + 47% and
earnings per share (“EPS”) +15%. This strong growth continues the Company’s record
of improved financial performance since its listing almost four years ago.
Particularly
encouraging has been the profitable expansion of our established businesses,
built through acquisition and organic growth between 2004 and 2006. This was
added to, very positively in 2007, by the acquisition of Leapfrog Medical Communications
Limited which has greatly enhanced our total healthcare offering.
2007 saw
increasing benefits across the Group with the consolidation of leading parts of
our business in healthcare marketing, media planning and buying and property
marketing. This greater integration in our main business sectors is delivering an
improved service to our clients and increasing financial benefits to the Company.
In 2007, this was supplemented by growth in our financial services sector and
our fast developing digital marketing business, both of which promise well for
the future. Our financial PR business has also continued to consolidate its
position in the market.
A further very
important development in this consolidation process was the opening, in mid-2007,
of our new office in
The
continuing strong progress made in 2007 affirms our ongoing focus on growth in
specific sectors of marketing services where our expertise lies, while seeking
to reinforce our established business with selective acquisitions. This will
continue and our strong balance sheet means Adventis is well placed to pursue such
acquisition opportunities as they present themselves.
In line
with our progressive dividend policy, the Board is recommending a 5% increase
in the final dividend to 0.484p per share which will be put to the Annual
General Meeting for approval.
To have
achieved the excellent results of 2007 would not have been possible without the
talented efforts and commitment of almost 150 staff across the various Adventis
companies. The Board offers its thanks and appreciation to all of them.
2008 has
started well, but the Board recognises the more volatile and uncertain economic
climate in which all businesses are operating. Nonetheless, we believe
Adventis’s operational strengths, financial soundness and high quality client
service will enable it to continue to progress strongly through this year and
beyond.
On a
personal note, I have been Chairman of Adventis for approximately four
years. I informed my Board colleagues
some time ago that I would be seeking to retire as a director during the next
year, to enable me to pursue new interests. A process to appoint a new Chairman
is under way. A further announcement
will be made in due course.
Peter Mitchell
Chairman
Chief Executive
Officer’s review
I
am pleased to report a strong set of results for the year ended
The
earnings per share for 2007, including acquisitions were 4.33p, which compares
with 3.76p for the previous year, an increase of 15%.
Dividend
The Board
is recommending an increased final dividend of 0.48p per share, making a total
for the year of 0.71p. This is in line
with our progressive dividend policy and reflects our confidence in the
business going forward, especially our continued ability to translate revenue
growth into cash. Net cash as at
Market
Overview
The Company was regrouped into five business
divisions in 2007 covering Health, Property, Financial, Media and PR. With the addition of Adventis Digital,
offering a full range of digital service to all group clients, and Adventis
Integrated, offering direct marketing services, the Company now has seven
divisions. This re-organisation has
enabled us to exploit further synergies and economies leading to business
growth and improved cost control.
Each of our business units enjoyed continued
profitability in 2007 and their management was structured to exploit the
considerable depth of skills to the full.
Retaining the services of key directors and staff continues to be an
issue in the marketing services industry due to its highly labour intensive
nature. Our policy of offering
competitive packages with an element of profit share has delivered a high
quality and stable senior team. It is in
this environment of consolidation that I am pleased to report results that
reflect the hard work of all the team at Adventis.
Business Strategy
Our
rapid growth has not been at the expense of either our cash position or
operating margins. The Board intends to
continue to pursue growth on a similar scale, but retain the same level of
checks and balances. We continue to
assess other market sectors with a view to acquiring operations that both match
our current performance and complement our existing business offering. The drive for an increase in scale will be
matched only by the focus on overall business performance.
Acquisition
In
February 2007, the Group announced the acquisition of Leapfrog Medical
Communications Limited. This strategic
purchase of one of the best medical education service providers was seen as a
vital asset to our healthcare operation, as pharmaceutical companies demand a
fully integrated marketing offering.
It
remains our intention to be extremely selective in our M&A activity and the
Board will only sanction purchases that meet our strict internal criteria.
Operational Review
The
following is a summary of activity by business sector for the year ended
Healthcare Sector
The Group
now has a substantial presence in the Healthcare sector through its two
creative agencies, Affiniti and Roundhouse.
Together with Leapfrog Communications, a medical education specialist,
the three business units have been combined to create Adventis Health, a
specialist MedComms agency, offering innovative and dynamic business solutions
to the pharmaceutical industry. With an impressive list of blue chip clients,
Adventis Health is in a leading position to explore new generation concepts,
such as digital media and interactive customer generated programmes.
Adventis Health now occupies new premises at Adventis House in
Financial
Services Sector
Adventis
NMG grew significantly in 2007. A series of large
scale projects were concluded for clients, such as Foresters Friendly
Society, Just Retirement, Cardiff Pinnacle, Equity Insurance Group and Reita.
The outlook for further such projects from similar clients is positive. The integration
of digital projects increased and the range of services was enhanced
following key senior appointments in digital and creative roles.
Property Marketing
Sector
We
continued to serve a number of clients during the year across the residential
property spectrum, such as Savills, Galliard Homes, Devington Homes and Grove
Manor Homes. We were also instructed by leading registered social landlords,
including Places for People, Home Group, Genesis Housing Group and London &
Quadrant.
The
year also presented several opportunities in the commercial property market.
New business wins included The Winston Group, Oakhurst Properties, Ahli
United Bank, Sunlight Property Finance, Greenhills, Mckay Securities,
Scottish Widows Investment, Target Follow, The Blackstone Group, Protego Real
Estate Investments, Davis Coffer Lyons, EPF Group and Sackville
Properties.
Media
Planning and Buying Sector
Our three
media planning and buying companies, Premium Media, Adgenda Media and Adventis
Coltman, represent a significant force in the property and financial sector. Their
combined billings account for around the
Outlook
The
turbulence of the global financial markets has permeated the economy overall,
but
the
first quarter results indicate that the Group as a whole is ahead of target and
ahead of last year.
Visibility
for the year ahead is generally good and overall we anticipate our clients
marketing expenditure continuing at a similar or greater level to the prior
year. Cost controls remain paramount and
we will continue to be vigilant especially as economic conditions tighten.
We
continue to raise our profile in our chosen market sectors and consider
suitable acquisition opportunities. I am confident that our growth and
operating efficiency will continue in 2008.
Chief
Executive Officer
Consolidated
income statement for the year ended 31 December 2007
|
|
|
|
|
|
2007 |
|
2006 |
|
|
|
|
Notes |
|
£'000 |
|
£'000 |
|
Turnover |
|
|
|
|
|
|
|
|
Continuing
operations |
|
|
|
44,788 |
|
27,973 |
|
|
Acquisitions |
|
|
|
|
2,288 |
|
7,556 |
|
|
|
|
|
|
47,076 |
|
35,529 |
|
Operating
profit |
|
|
|
|
|
|
|
|
Continuing
operations |
|
|
|
2,116 |
|
1,221 |
|
|
Acquisitions |
|
|
|
|
310 |
|
451 |
|
Profit on
ordinary activities before interest |
|
|
2,426 |
|
1,672 |
||
|
|
|
|
|
|
|
|
|
|
Investment
revenue |
|
|
|
226 |
|
130 |
|
|
Finance
costs |
|
|
|
(15) |
|
(2) |
|
|
|
|
|
|
|
|
|
|
|
Profit on
ordinary activities before taxation |
|
|
2,637 |
|
1,800 |
||
|
|
|
|
|
|
|
|
|
|
Taxation
on profit on ordinary activities |
3 |
|
(832) |
|
(467) |
||
|
|
|
|
|
|
|
|
|
|
Profit
for the financial year |
|
|
|
1,805 |
|
1,333 |
|
|
|
|
|
|
|
|
|
|
|
Attributable
to: |
|
|
|
|
|
|
|
|
Equity
holders of the parent |
|
|
1,756 |
|
1,316 |
||
|
Minority
interest |
|
|
|
49 |
|
17 |
|
|
|
|
|
|
|
|
|
|
|
Profit
for the financial year |
|
|
|
1,805 |
|
1,333 |
|
|
|
|
|
|
|
|
|
|
|
Earnings
per share ("EPS") |
5 |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
Basic earnings
per share |
|
|
|
|
|
||
|
Average
number of shares in issue |
|
|
40,580,636 |
|
35,007,794 |
||
|
EPS
(pence) |
|
|
|
|
4.33 |
|
3.76 |
|
Fully
diluted earnings per share |
|
|
|
|
|
||
|
Fully
diluted average number of shares in issue |
|
42,654,944 |
|
36,066,998 |
|||
|
EPS
(pence) |
|
|
|
|
4.12 |
|
3.65 |
|
|
|
|
|
|
|
|
|
|
The
Group's results derive entirely from continuing operations |
|
|
|||||
|
|
|
|
|
|
|
|
|
Consolidated
balance sheet as at 31 December 2007
|
|
|
|
|
2007 |
|
2006 |
|
|
|
|
|
Notes |
£'000 |
|
£'000 |
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
|
|
|
Property,
plant and equipment |
|
|
531 |
|
259 |
|
|
|
Goodwill
and other intangible assets |
|
6 |
11,126 |
|
8,273 |
|
|
|
Deferred
tax asset |
|
|
143 |
|
164 |
|
|
|
|
|
|
11,800 |
|
8,696 |
|
|
|
Current
assets |
|
|
|
|
|
|
|
|
Work in
progress |
|
|
104 |
|
293 |
|
|
|
Trade and
other receivables |
|
|
7,840 |
|
6,590 |
|
|
|
Cash and
cash equivalents |
|
|
3,740 |
|
2,464 |
|
|
|
|
|
|
11,684 |
|
9,347 |
|
|
|
Total
assets |
|
|
23,484 |
|
18,043 |
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
|
Capital and
reserves |
|
|
|
|
|
|
|
|
Share
capital |
|
|
104 |
|
96 |
|
|
|
Share
premium account |
|
|
6,168 |
|
4,789 |
|
|
|
Treasury
stock |
|
|
(10) |
|
0 |
|
|
|
Capital
redemption reserve |
|
|
200 |
|
200 |
|
|
|
Other
reserves |
|
|
20 |
|
20 |
|
|
|
Share based
payments reserve |
|
|
96 |
|
43 |
|
|
|
Retained
earnings |
|
|
4,506 |
|
3,036 |
|
|
|
|
|
|
11,084 |
|
8,184 |
|
|
|
Minority
interest |
|
|
67 |
|
18 |
|
|
|
Total
equity |
|
|
11,151 |
|
8,202 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
|
|
|
Obligations
under finance leases - due in more than |
|
|
|
|
|
|
|
|
one year |
|
|
10 |
|
7 |
|
|
|
Provisions
for other liabilities and charges |
|
10 |
|
4 |
|
|
|
|
Deferred
consideration |
|
|
2,922 |
|
3,400 |
|
|
|
|
|
|
2,942 |
|
3,411 |
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Trade and
other payables |
|
|
6,423 |
|
4,371 |
|
|
|
Current income
tax liabilities |
|
|
945 |
|
572 |
|
|
|
Obligations
under finance leases - due in less than |
|
|
|
|
|
|
|
|
one year |
|
|
4 |
|
5 |
|
|
|
Deferred
consideration |
|
|
2,019 |
|
1,482 |
|
|
|
|
|
|
9,391 |
|
6,430 |
|
|
|
Total
liabilities |
|
|
12,333 |
|
9,841 |
|
|
|
Total
equity and liabilities |
|
|
23,484 |
|
18,043 |
|
|
|
|
|
|
|
|
|
|
Consolidated statement of changes in
equity for the year ended 31 December 2007
|
|
|
Share |
Share |
Capital |
Minority |
Treasury |
Share
based |
Retained |
Total |
|
|
|
capital |
premium |
reserves |
Interests |
stock |
transactions |
earnings |
|
|
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
|
|
Balance 31
December 2005 |
81 |
2,862 |
220 |
47 |
- |
23 |
1,892 |
5,125 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in
equity for 2006 |
|
|
|
|
|
|
|
|
|
|
Profit for
the year |
- |
- |
- |
- |
- |
- |
1,333 |
1,333 |
|
|
Dividends
paid |
- |
- |
- |
- |
- |
- |
(218) |
(218) |
|
|
Minority
interests |
- |
- |
- |
17 |
- |
- |
(17) |
0 |
|
|
Adjustment |
|
- |
- |
- |
(46) |
- |
- |
46 |
0 |
|
Recognised
earnings |
- |
- |
- |
(29) |
- |
- |
1,144 |
1,115 |
|
|
for the
year |
|
|
|
|
|
|
|
|
|
|
Issue of
share capital |
15 |
2,015 |
- |
- |
- |
- |
- |
2,030 |
|
|
Cost of
share issue |
- |
(88) |
- |
- |
- |
- |
- |
(88) |
|
|
Share based
transactions |
- |
- |
- |
- |
- |
20 |
- |
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance 31
December 2006 |
96 |
4,789 |
220 |
18 |
- |
43 |
3,036 |
8,202 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in
equity for 2007 |
|
|
|
|
|
|
|
|
|
|
Profit for
the year |
- |
- |
- |
- |
- |
- |
1,805 |
1,805 |
|
|
Dividends
paid |
- |
- |
- |
- |
- |
- |
(285) |
(285) |
|
|
Minority
interests |
- |
- |
- |
49 |
- |
- |
(49) |
0 |
|
|
Recognised
earnings |
- |
- |
- |
49 |
- |
- |
1,471 |
1,520 |
|
|
for the
year |
|
|
|
|
|
|
|
|
|
|
Issue of
share capital |
8 |
1,499 |
- |
- |
- |
- |
- |
1,507 |
|
|
Cost of
share issue |
|
(120) |
- |
- |
- |
- |
- |
(120) |
|
|
Share based
transactions |
- |
- |
- |
- |
- |
53 |
- |
53 |
|
|
EBT holding |
|
- |
- |
- |
- |
(10) |
- |
- |
(10) |
|
|
|
|
|
|
|
|
|
|
|
|
Balance 31
December 2007 |
104 |
6,168 |
220 |
67 |
(10) |
96 |
4,506 |
11,151 |
|
Consolidated
cash flow statement for the year ended 31 December 2007
|
|
|
|
|
2007 |
|
2006 |
|
|
|
|
|
£'000 |
|
£'000 |
|
Cash flows
from operating activities |
|
|
|
|
||
|
Profit from
operations |
|
|
2,426 |
|
1,672 |
|
|
|
|
|
|
|
|
|
|
Adjustments
for: |
|
|
|
|
|
|
|
Amortisation
of investments |
|
|
||||