The following amendment has been made to the "Interim Results" announcement published on 29 March 2023 at 07.00am under RNS Number 5325U. In the Condensed Consolidated Statement of Cash Flows table, the announcement incorrectly stated that "Cash (used in) / generated from operating activities" was £2,048,422 for 6 Months to 31 December 2022, £188,544 for 6 Months to 31 December 2021, and £(143,738) for the 12 months to 30 June 2022. This has now been corrected to £2,520,486, £542,723, and £965,352 respectively.
The amended table of Condensed Consolidated Statement of Cash Flows is shown below. All other information remain unchanged.
The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310.
Aeorema Communications plc / Index: AIM / Epic: AEO / Sector: Media
29 March 2023
Aeorema Communications plc
("Aeorema", the "Company" or the "Group")
Interim Results
Aeorema Communications plc (AIM: AEO), a leading strategic communications group, is pleased to announce its unaudited interim results for the six months ended 31 December 2022.
Highlights
· Record level revenue of £7,121,103 (H1 2021: £4,909,742)
· Record level profit before taxation of £326,021 (H1 2021: £255,677)
· A period of continued growth and major investment for the Group
· Eventful Limited returning to profitability
· Substantially increased cash position of £3,676,194 (31 December 2021: £1,534,217)
Chairman's Statement
The six-month period ended 31 December 2022 has been a period of continued growth and major investment for the Group, following the record financial year we announced in November.
Group revenue increased by 45% year-on-year to £7.12 million (H1 2021: £4.91 million) and profit before taxation by 28% to £0.33 million (H1 2021: £0.26 million). The Group continues to invest in the team, our processes, and offices, in order to put us in a strong position to achieve sustained growth and success in the future.
The team continues to adapt and diversify to meet the range of demands and evolving needs, of both new and existing clients. As a fully integrated agency, the Group has consistently delivered innovative and bespoke events on a live, virtual and hybrid basis to a range of clients across many sectors. Moreover, the team has been able to capitalise on the ever-changing nature of the industry by expanding our offerings to include long-term communication campaigns and consultancy services. The development of a longer-term client partnership approach has successfully been executed with leading brands across multiple regions and markets. The flexible nature of the business model has enabled the Group to maintain a loyal base of blue-chip clients.
I am thrilled that the team's remarkable efforts have been recognised with award nominations and successful wins, both during and post-period end. Cheerful Twentyfirst, Aeorema's main operating division, won Creative Team of the Year for the fifth year running at the Conference News Agency Awards, Best Agency at the Micebook V Award, and Best Place to Work and Global Agency of the Year at the C&IT awards. Winning these high-profile awards not only bears testament to the strong ability of our team, but also affirms the Group's leading position in the sector.
We are delighted to announce, as a post-period end event, that we are working with Stagwell Inc. a NASDAQ listed, multi-billion-dollar challenger in the marketing network, on a unique brand activation 'Sport Beach' at Cannes Lions International Festival of Creativity. The activation is expected to be one of the largest brand activations in Cannes this year, and with discussions ongoing surrounding other additional contracts, 2023 has a promising outlook to be our biggest presence at the festival to date.
We continue to benefit from an increased global footprint, a growing presence in mainland Europe (with the opening of our Amsterdam office), and we continue to seek additional growth opportunities in line with our global growth strategy. Moreover, we look to serve the growing needs and requests of our clients operating in London and New York, by continuing the increased integration of the respective offices, as well as expanding our own presence in the North American market.
We are pleased to report that Eventful Limited, our venue sourcing and incentive travel agency, has had a strong six months with a record number of events. I am optimistic that we will be able to report a return to profitability at the end of the 2023 financial year.
Following the introduction of our client carbon measurement programme and the addition of a Sustainability Director in April 2022, post-period end we were pleased to launch our third annual Corporate Social Responsibility ("CSR") charter. The CSR charter was established as part of our transition into a value-led agency that views people, planet and prosperity as a balanced scale.
The 2023 CSR charter introduced several new environmental initiatives and commitments including the publication of our 2022 operational carbon footprint, and the offsetting of the Group's last three years' carbon emissions. A revised assessment tool, which considers the social and environmental impact of any new project also enables us to take on briefs that match our ethos and reinforce our commitment to become Net Zero by 2030.
We are very confident about the outlook for the remainder of the 2023 financial year. As mentioned earlier, we have more significant projects at Cannes this year than ever before. The investment we have made in strengthening our team and resources is a significant factor in the growth we have achieved, and it provides us with the structure to achieve significant revenue growth going forward. We are also confident that we can maintain our policy of paying a dividend to shareholders without limiting our growth opportunities.
Finally, I would like to take the opportunity to thank our dedicated team and our shareholders for their continued support and I look forward to what the rest of the year will bring.
M Hale
Chairman
28 March 2023
For further information contact:
Aeorema Communications plc | +44 (0)20 7291 0444 |
Andrew Harvey | www.aeorema.com |
| |
Allenby Capital Limited (Nominated Adviser and Broker) | |
| |
John Depasquale (Corporate Finance)
| +44 (0)20 3328 5656 |
Kelly Gardiner (Sales and Corporate Broking) | |
| |
St Brides Partners Ltd (Financial PR) | |
Catherine Leftley/Paul Dulieu | aeorema@stbridespartners.co.uk |
Notes to Editors
Aeorema Communications plc, (AIM: AEO) is a leading strategic communications group with offices in London, New York and Amsterdam. The Group provides bespoke event services, comprising live, virtual, and hybrid experiences to an established international blue-chip client base spanning a broad range of sectors, including finance, professional services, advertising, IT, gaming, fashion, fintech, and beverages. The Group also provides high level consultancy services to help clients maximise and deliver on their long-term communication strategies over multiple event and film touchpoints.
Aeorema delivers these services via its fully owned companies Cheerful Twentyfirst and Cheerful Twentyfirst, Inc. (the North American arm of Cheerful Twentyfirst) (cheerfultwentyfirst.com), two live events agencies with film capabilities that specialise in devising and delivering corporate communication solutions. The Group also operates Eventful Limited (www.eventful.co.uk), which provides consultative, high-touch services including assisting clients with venue sourcing, event management and incentive travel. With more than 56 years of combined operating experience and extensive award wins, Aeorema is a recognised industry thought leader and for the year ended 30 June 2022 reported record revenue and profits (before tax) of £12.2 million and £843,564 respectively, and also declared a dividend for the year.
Central to all that the Group does is its Corporate Social Responsibility charter, which is focussed on ensuring sustainable, inclusive and ethical business operations. To this end, the Group is a pioneer in delivering innovative strategies and services, including a client carbon measurement programme to establish a formal structure and approach around reducing emissions and offsetting both its own and its clients' carbon footprint.
CONDENSED CONSOLIDATED INCOME STATEMENT
For the period ended 31 December 2022
| | Unaudited 6 Months to 31 December 2022 | Unaudited 6 Months to 31 December 2021 | Audited Year to 30 June 2022 |
| Notes | £ | £ | £ |
Continuing Operations |
|
|
|
|
|
|
|
|
|
Revenue |
| 7,121,103 | 4,909,742 | 12,207,253 |
Cost of sales |
| (5,595,529) | (3,734,995) | (9,169,691) |
|
| | | |
Gross profit |
| 1,525,574 | 1,174,747 | 3,037,562 |
|
| | | |
Other income |
| - | 3,743 | 3,743 |
|
| | | |
Administrative expenses |
| (1,175,668) | (919,366) | (2,170,129) |
|
| | | |
Operating profit / (loss) |
| 349,906 | 259,124 | 871,176 |
|
|
|
|
|
Finance income |
| 80 | 109 | 241 |
|
| | | |
Finance costs |
| (23,965) | (3,556) | (27,853) |
|
| | | |
Profit / (loss) before taxation |
| 326,021 | 255,677 | 843,564 |
|
| | | |
Taxation | 4 | (30,553) | 48,105 | (204,222) |
|
| | | |
Profit / (loss) for the period from continuing operations |
|
295,468 |
303,782 |
639,342 |
|
| | | |
Other comprehensive income |
| | | |
Items that may be reclassified to profit or loss |
| | | |
|
| | | |
Exchange differences on translation of foreign entities |
| (29,245) | 11,552 | 42,347 |
|
| | | |
Other comprehensive income for the period |
| (29,245) | 11,552 | 42,347 |
|
| | | |
|
|
|
|
|
Total comprehensive income for the period |
| 266,223 | 315,334 | 681,689 |
|
| | | |
Basic and diluted earnings per share from continuing operations |
| | | |
|
| | | |
Basic (pence) | 5 | 3.18118 | 3.28840 | 6.92078 |
Diluted (pence) | 5 | 2.71870 | 2.72255 | 5.80797 |
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the period ended 31 December 2022
| | Unaudited 6 Months to 31 December 2022 | Unaudited 6 Months to 31 December 2021 | Audited Year to 30 June 2022 |
|
| £ | £ | £ |
| | | | |
Non-current assets | | | | |
Intangible assets |
| 567,682 | 570,182 | 568,931 |
Property, plant and equipment |
| 389,668 | 121,138 | 222,479 |
Right-to-use assets |
| 760,388 | - | 823,772 |
Deferred taxation |
| - | 182,179 | 25,925 |
|
| 1,717,738 | 873,499 | 1,641,107 |
|
| | | |
Current assets |
| | | |
Trade and other receivables |
| 2,834,446 | 2,337,399 | 3,130,035 |
Cash and cash equivalents |
| 3,676,194 | 1,534,217 | 1,714,417 |
Current tax receivable |
| 101,426 | 36,942 | - |
|
| 6,612,066 | 3,908,558 | 4,844,452 |
|
| | | |
Total assets |
| 8,329,804 | 4,782,057 | 6,485,559 |
|
| | | |
Current liabilities |
| | | |
Trade and other payables |
| 4,713,051 | 2,514,347 | 2,960,221 |
Lease liabilities |
| 141,278 | - | 121,999 |
Bank loans |
| 69,445 | 83,334 | 83,333 |
Current tax payable |
| - | 136,132 | 177,790 |
Provisions |
| 35,000 | 25,020 | 35,000 |
|
| 4,958,774 | 2,758,833 | 3,378,343 |
|
| | | |
Non-current liabilities |
| | | |
Lease liabilities |
| 668,006 | - | 738,041 |
Bank loans |
| 83,334 | 152,778 | 111,111 |
Provisions |
| 9,000 | - | 4,500 |
Deferred taxation |
| 4,629 | - | - |
|
| 764,969 | 152,778 | 853,652 |
|
| | | |
Total liabilities |
| 5,723,743 | 2,911,611 | 4,231,995 |
|
| | | |
Net assets |
| 2,606,061 | 1,870,446 | 2,253,564 |
|
| | | |
|
| | | |
Equity attributable to equity holder: |
| | | |
Share capital |
| 1,192,250 | 1,154,750 | 1,154,750 |
Share premium |
| 21,876 | 9,876 | 9,876 |
Merger reserve |
| 16,650 | 16,650 | 16,650 |
Other reserve |
| 205,730 | 152,193 | 168,956 |
Capital contribution reserve |
| 257,812 | 257,812 | 257,812 |
Foreign Translation reserve |
| 2,058 | - | 31,303 |
Retained earnings |
| 909,685 | 279,165 | 614,217 |
| | | | |
Total equity | | 2,606,061 | 1,870,446 | 2,253,564 |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the period ended 31 December 2022
| Share capital | Share premium | Merger reserve | Other reserve | Capital contribution reserve | Foreign translation reserve | Retained earnings | Total equity | |
| £ | £ | £ | £ | £ | £ | £ | £ | |
|
|
|
|
|
|
|
|
| |
At 1 July 2021 | 1,154,750 | 9,876 | 16,650 | 112,061 | 257,812 | (11,044) | (25,125) | 1,514,980 | |
Comprehensive income for the period | - | - | - | - | - | - | 315,334 | 315,334 | |
Share-based payments | - | - | - | 40,132 | - | - | - | 40,132 | |
At 31 December 2021 |
1,154,750 |
9,876 |
16,650 |
152,193 |
257,812 |
(11,044) |
290,209 |
1,870,446 | |
| | | | | | | | | |
At 1 January 2022 | 1,154,750 | 9,876 | 16,650 | 152,193 | 257,812 | (11,044) | 290,209 | 1,870,446 | |
Comprehensive income for the period | - | - | - | - | - | - | 324,008 | 324,008 | |
Foreign currency translation | - | - | - | - | - | 42,347 | - | 42,437 | |
Share-based payments | - | - | - | 16,763 | - | - | - | 16,763 | |
At 30 June 2022 |
1,154,750 |
9,876 |
16,650 |
168,956 |
257,812 |
31,303 |
614,217 |
2,253,564 | |
| | | | | | | | | |
At 1 July 2022 | 1,154,750 | 9,876 | 16,650 | 168,956 | 257,812 | 31,303 | 614,217 | 2,253,564 | |
Comprehensive income for the period | - | - | - | - | - | - | 295,468 | 295,468 | |
Foreign currency translation | - | - | - | - | - | (29,245) | - | (29,245) | |
Share-based payments | - | - | - | 36,774 | - | - | - | 36,774 | |
Share issue | 37,500 | 12,000 | - | - | - | - | - | 49,500 | |
At 31 December 2022 |
1,192,250 |
21,876 |
16,650 |
205,730 |
257,812 |
2,058 |
909,685 |
2,606,061 | |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the period ended 31 December 2022
| | Unaudited 6 Months to 31 December 2022 | Unaudited 6 Months to 31 December 2021 | Audited Year to 30 June 2022 |
| |
|
|
|
|
| £ | £ | £ |
Cash flow from operating activities | | | | |
(Loss) / profit before taxation |
| 326,021 | 255,677 | 843,564 |
Adjustments for: |
| | | |
Depreciation of property, plant and equipment |
| 48,873 | 24,586 | 56,036 |
Depreciation of right-of-use assets |
| 63,384 | 18,995 | 82,361 |
Amortisation of intangible fixed assets |
| 1,250 | 1,250 | 2,500 |
Loss on disposal of fixed assets |
| - | 2,096 | 4,646 |
Share-based payment |
| 36,774 | 40,132 | 56,895 |
Interest on lease liabilities |
| 20,244 | - | 21,191 |
Finance income |
| (80) | (109) | (241) |
Dilapidations |
| 4,500 | - | - |
Exchange rate differences on translation |
| (28,902) | 11,552 | 42,138 |
Operating cash flow before movement in working capital |
| 472,064 | 354,179 | 1,109,090 |
Increase/(decrease) in trade and other payables |
| 1,752,830 | 1,096,880 | 1,557,234 |
(Increase)/decrease in trade and other receivables |
| 295,592 | (908,336) | (1,700,972) |
Cash (used in) / generated from operating activities |
| 2,520,486 | 542,723 | 965,352 |
|
| | | |
Taxation paid |
| (279,218) | (26,185) | (43,657) |
|
| | | |
Cash flow from investing activities |
| | | |
Finance income |
| 80 | 109 | 241 |
Purchase of property, plant and equipment |
| (216,406) | (44,343) | (179,475) |
Repayment of leasing liabilities |
| (71,000) | (25,912) | (74,201) |
Net cash used in investing activities |
| (287,326) | (70,146) | (253,435) |
|
| | | |
Cash flow from financing activities |
| | | |
Share issue |
| 49,500 | - | - |
Repayment of bank loans |
| (41,665) | (13,888) | (55,556) |
Net cash used in financing activities |
| 7,835 | (13,888) | (55,556) |
|
| | | |
Net increase / (decrease) in cash and cash equivalents |
| 1,961,777 | 432,504 | 612,704 |
|
| | | |
Cash and cash equivalents at beginning of period |
| 1,714,417 | 1,101,713 | 1,101,713 |
|
| | | |
Cash and cash equivalents at end of period |
| 3,676,194 | 1,534,217 | 1,714,417 |
|
| | | |
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the period ended 31 December 2022
1. General information
Aeorema Communications plc is a public limited company incorporated within the United Kingdom. The company is domiciled in the United Kingdom and its principal place of business is 87 New Cavendish Street, London, W1W 6XD. The Company's ordinary shares are traded on the AIM market of the London Stock Exchange.
These condensed consolidated interim financial statements for the period ending 31 December 2022 (including comparatives for the periods ended 31 December 2021 and 30 June 2022) were approved by the board of directors on 28 March 2023.
The financial information set out in this interim report does not constitute statutory accounts for the purposes of section 434 of the Companies Act (2006). The Group's statutory financial statements for the year ended 30 June 2022, prepared under International Financial Reporting Standards (IFRS), have been filed with the Registrar of Companies. The auditor's report for those financial statements was unqualified and did not contain a statement under section 498 (2) or section 498 (3) of the Companies Act (2006).
The interim financial statements have been prepared using the accounting policies set out in the Group's 2022 statutory accounts and have not been audited.
Copies of the annual statutory financial statements and the interim report can be found on our website at www.aeorema.com or can be requested from the Company Secretary at the Company's registered office: 64 New Cavendish Street, London, W1G 8TB.
2. Basis of preparation
These condensed consolidated interim financial statements for the period ended 31 December 2022 have been prepared in accordance with IAS 34, 'Interim Financial Reporting' as adopted by the European Union. The interim condensed consolidated financial statements should be read in conjunction with the annual financial statements for the year ended 30 June 2022, which have been prepared in accordance with IFRS as adopted by the European Union
3. Revenue and segmental results
The Company uses several factors in identifying and analysing reportable segments, including the basis of organisation such as differences in products and geographical areas. The Board of Directors, being the chief operating decision makers, has determined that for the period ended 31 December 2022 there is only one reportable operating segment.
4. Income tax charge
Income period tax is accrued based on the estimated average annual effective income tax rate of 19 per cent (2021: 19 per cent).
5. Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share are calculated by dividing the profit attributable to ordinary owners of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would have been issued on the conversion of all dilutive potential ordinary shares into ordinary shares.
The following reflects the income and share data used and dilutive earnings per share computations:
| Unaudited 6 Months to 31 December 2022 | Unaudited 6 Months to 31 December 2021 | Audited Year to 30 June 2022 |
| | | |
Profit / (loss) for the year attributable to owners of the Company | £295,468 | £303,782 | £639,342 |
| | | |
Number of shares | | | |
|
|
|
|
Basic weighted average number of shares | 9,288,000 | 9,238,000 | 9,238,000 |
| | | |
Effect of dilutive share options | 1,580,000 | 1,920,000 | 1,770,000 |
| | | |
Diluted weighted average number of shares | 10,868,000 | 11,158,000 | 11,008,000 |
| | | |
6. Dividends
During the interim period a dividend of 2 pence per share (2021: Nil) was declared to holders of the Company's ordinary shares in respect of the full year ended 30 June 2022.
7. Related party transactions
The Group has a related party relationship with its subsidiaries and its directors. Transactions between Group companies, which are related parties, have been eliminated on consolidation and are therefore not included in these consolidated interim financial statements.
| Unaudited 6 months to 31 December 2022 | Unaudited 6 months to 31 December 2021 |
| £ | £ |
Subsidiaries | | |
Amounts owed by/(to) subsidiaries | 370,342 | 397,759 |
Amounts owed by/(to) subsidiaries | 370,342 | 397,759 |
Harris & Trotter LLP is a firm in which S Haffner is a member. The following was charged to the Group in respect of professional services.
| Unaudited 6 Months to 31 December 2022 | Unaudited 6 Months to 31 December 2021 |
Harris & Trotter LLP | £ | £ |
Aeorema Communications plc | 9,450 | 7,500 |
Aeorema Limited | 9,500 | 5,750 |
| 18,950 | 13,250 |
Fees charged to Aeorema Communications plc include £7,500 (2021: £7,500) for the services of S Haffner as a non-executive director of that company.
The compensation of key management (including directors) of the Group is as follows:
| Unaudited 6 Months to 31 December 2022 | Unaudited 6 Months to 31 December 2021 |
| £ | £ |
Short-term employee benefits | 266,375 | 162,933 |
Post-employment benefits | 7,496 | 7,496 |
| 273,871 | 170,429 |
During the period S Quah received an interest-free loan of £40,000 which has now been repaid. As at 31 December 2022 £50,000 (2021: £10,000) was outstanding.
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