Half-yearly Report
Totally Plc
('Totally' or 'the Company')
Half-yearly results for the six month period ended 30 June 2008
Totally Plc, the AIM quoted (ticker `TLY') international publisher and
technical services provider announces its half-yearly results for the six month
period ended 30 June 2008.
Summary
* Group sales less share of joint ventures £1.19 million (2007: restated: £1.29 million)
* Operating Loss £69,000 (2007: restated £5,000 loss)
* Total expenses £1.26 million (2007: restated £1.29 million)
* Totally Communications Limited has three consecutive quarters of sales
growth
* Jewish News & Media Group 18 per cent. increase in second quarter sales
Chairman's Statement
I am pleased to present the results for the six months ended 30 June 2008.
During the period the group made an operating loss of £69,000 (2007: restated £
5,000 loss) and a loss before taxation of £89,000 (2007: restated loss £27,000)
on turnover of £1.19 million (2007: restated £1.28 million). Total expenses
were reduced to £1.26 million (2007: restated £1.29 million). The Company ended
the period with cash and cash equivalents of £51,000 (2007: restated £74,000).
I am pleased with the progress the group has made this year against the stated
objective of repositioning the business to focus on operations in the UK and
towards the development of Totally Communications Limited. This division
continues to make steady progress, consolidating its position within the UK's
Jewish community as the preferred supplier of technology services, as well as
securing a number of high profile corporate contracts.
The Jewish News and Media group, which comprises Jewish News Limited and
TotallyJewish.com Limited, is operating effectively and efficiently and
continues to make steady progress in a competitive and challenging
marketplace.
During the period under review the board agreed to the disposal of one of the
group's trading subsidiaries, the Jewish Advocate publishing corporation. The
board was convinced that the poor trading performance of this business was set
to continue and the decision was made to prevent it having an adverse effect on
the group's trading activities and being a distraction to management.
I am confident that the group is robust enough to withstand the current
slowdown in the UK economy and to deliver an improved performance for 2008 on
2007 on a like for like basis, excluding charges attributable to FRS20 share
option awards and any non-recurring losses attributable to the disposal of the
Jewish Advocate.
Dr Michael Sinclair, Chairman
29 September 2008
Chief Executive's Operational Review
Despite challenging trading conditions, specifically within the group's US
based publishing business, the group has made steady progress in its ultimate
goal to reposition itself as a business with a primary focus of delivering
web-enabled technology and online marketing solutions to SMEs, membership and
not for profit organisations.
Software Development and Online Marketing Division (Totally Communications, 'TC
')
The board took a strategic decision to close down its creative services
division in January this year and focus its attentions exclusively on
delivering web-enabled technology solutions, which offer higher margins of
return and ongoing revenue streams, through the provision of managed services
and licensing agreements including TCs proprietary content management system.
Revenues derived through the provision of technical services have improved for
three consecutive quarters and revenues for the first half of 2008 improved by
six per cent. when compared to like for like sales in the same period in 2007.
Licensing agreements for TCs content management system made up 12 per cent of
total revenues in the period under review across over 60 companies.
The board is confident that this growth will continue for the remainder of
2008.
The group has secured and received research & development tax credits for the
software development expenditure for the years 2004, 2005, 2006, 2007 and 2008,
totalling £202,000
During the period under review this division secured contracts and / or
delivered finished software development projects for a number of high profile
names as described below.
Paypoint
Paypoint is one of the UK's most recognised brands and one of the country's
leading cash and internet Payments Company, handling over £4 billion in
payments annually.
TC was approached following Paypoint's acquisition of two additional online
payment providers, Secpay and Metacharge. Paypoint required a new customer and
prospect facing website which amalgamated all three brands. The project was
subject to very tight timescales and TC's experience and technology offered a
low-risk approach which resulted in the implementation of an extremely search
engine friendly, high-usage, fast downloading robust website, delivered ahead
of schedule.
www.paypoint.net
Power
POWER is Europe's number one independent producer and distributor of high
quality, award-winning series, mini-series and movies for television.
TC's brief was to upgrade Power's website and look at streamlining its
workflows and processes particularly around client interaction. TC recently
implemented Power's new website and introduced a client extranet allowing
access to information about Power's titles with online access to associated
marketing material and downloads to client purchased titles, removing a tier of
manual intervention.
www.powcorp.com
TC also continued to consolidate its position as the leading provider of
technical services to charities within the UKs Jewish community and completed
the following projects during the period under review:
World Jewish Relief
Founded in 1933, World Jewish Relief ('WJR') is the main overseas aid arm of
the UK Jewish community. WJR provides vital welfare support in the form of
food, medication and fuel as well as sustaining and renewing Jewish life in
communities across the world. With its global outlook today, WJR is positioned
as the charity to channel the UK Jewish community's response to disasters and
need affecting the international community regardless of race, religion or
nationality.
TC constructed WJR's original website a number of years ago, and recently won
the contract for its second generation online proposition. TC created a
visually stimulating interactive website underpinned by TC's proprietary
software; with the resulting proposition winning WebAwards Non-Profit Standard
of Excellence award.
www.wjr.org.uk
www.webaward.org/winner.asp?eid=10290
United Jewish Israel Appeal
United Jewish Israel Appeal ('UJIA') is a leading charity with annual income in
excess of £18million and whose mission is to help to guarantee a sustainable
and positive future for the UK's Jewish community and the people of the Galil,
northern Israel. This is done through investment in young people and education.
TC constructed a sizable interactive website supporting information flow and
fundraising activities, along with web-enabled support software to capture and
resize photos and videos from tour groups across the world enabling instant
availability via their website. Extremely tight timescales were met by
utilising a number of different components of TC's proprietary website software
suite including Content Management, Online Ticketing and Photo Management.
www.ujia.org
Totally Communications
During the period under review TC re-launched its own website and brand in
attempt to better convey its product and service set and to attract new
clients.
The result was a `Best in Class' award from the Interactive Media Council.The
Interactive Media Awards(tm) recognises the highest standards of excellence in
website design and development and honor individuals and organizations for
their outstanding achievement.
Post Balance Sheet Events
Roedean Girls School
Roedean is an extremely well known, high profile, leading independent boarding
and day school for girls, based in Brighton.
TC pitched for and won the contract to re-design and construct Roedean's new
website by responding to its brief of wanting to be positioned `differently'
from its competitors. TC designed a stunning main website for Roedean along
with a uniquely positioned separate `pupils' website. Both propositions are
underpinned by TC's proprietary Content Management System.
Projects launch October 2008
Treating Autism
Treating Autism exists to help people with autism and their families reach
their potential and live life free of discomfort, anxiety and pain.
TC was approached to re-design and construct a new interactive website for the
charity. TC's vast experience in the not for profit sector helped Treating
Autism define its proposition, resulting in a phased implementation enabling
online tickets to be purchased online for its up-coming International Biometric
Conference. The website is underpinned by TC's robust, fully hosted and
supported proprietary Content Management System, with TC's proprietary online
ticketing system selected as an `add on'.
www.treatingautism.co.uk
Publishing Division
US - Jewish Advocate
Difficult trading conditions during the period under review resulted in this
division posting a like for like for sales decrease of 9%.
The directors have stated their strategy of positioning Totally as a business
whose efforts are to be concentrated on the delivery of technical and online
marketing services and it was for this reason, and the concern over the
potential of this business to become a drag on both the bottom line of the core
business and management efforts, which led to the decision to dispose of it.
UK - Jewish News & Media Group
Despite tough trading conditions in the UK advertising market the UK Publishing
division known as the 'Jewish New Media Group' recovered from a difficult first
quarter to report an overall revenue decrease of only 2 per cent. during the
period under review and an 18 per cent. increase in revenues in the second
quarter of the year, against like for like sales during the same period in
2007. This increase was as a direct result of the publication of two issues of
the newly launched glossy lifestyle magazine called Pulse, which is distributed
bi-monthly with the Jewish News newspaper.
The directors remaining confident that this business unit is robust enough to
withstand the difficulties that advertising led businesses are facing in this
current economic climate. Moreover, given its position in the UKs Jewish
community as leading publisher, it still continues to provide lucrative
introductions to Totally Communications.
Daniel Assor, Chief Executive Officer
29 September 2008
For further information:
Totally Plc T: 020 7692 6929
Daniel Assor
Chief Executive Officer
John East & Partners Limited T: 020 7628 2200
David Worlidge / Simon Clements
Hoodless Brennan Plc T: 020 7510 8654
Luke Cairns
Consolidated Income Statement
For the six months ended 30 June 2008
Six months Six months Year ended
ended ended
31 December
30 June 2008 30 June 2007 2007
(unaudited) (unaudited) (audited)
£000 £000 £000
(Restated -
see Note 1)
Turnover: group and share of joint 1,220 1,317 2,704
ventures
Less: Share of joint ventures (26) (30) (60)
Group Turnover 1,194 1,287 2,644
Cost of sales (208) (195) (488)
Gross Profit 986 1,092 2,156
Administrative expenses (1,055) (1,097) (2,474)
Group operating loss (69) (5) (318)
Share of profit/(loss) from 2 (2) (4)
operations of joint ventures after
taxation
Finance costs (22) (20) (38)
Loss before taxation (89) (27) (360)
Taxation 18 24 17
Loss for the period (71) (3) (343)
Loss per share (pence) - basic and (0.06)p - (0.30)p
diluted
Consolidated Statement of Changes in Equity
For the six months ended 30 June 2008
Period to 30 June 200 Share Share Revaluation Profit Equity
8 Reserve share-
capital premium and loss
holders'
account account
funds
£000 £000 £000 £000 £000
At 1 January 2008 1,124 3,353 1 (3,947) 531
Loss for the period - - - (71) (71)
At 30 June 2008 1,124 3,353 1 (4,018) 460
Balance sheet
As at 30 June 2008
As at 30 June As at 30 June As at31
2008 2007 December 2007
(audited)
(unaudited) (unaudited)
£000 £000 £000
Assets (Restated -
see Note 1)
Non-current assets
Tangible fixed assets 23 19 27
Other intangible assets 1,015 1,228 1,014
1,038 1,247 1,041
Current assets
Newsprint inventory 2 5 8
Trade and other receivables 358 434 433
Cash and cash equivalents 51 74 94
411 513 535
Total Assets 1,449 1,760 1,576
Equity and liabilities
Equity
Share capital 1,124 1,124 1,124
Share premium 3,353 3,353 3,353
Translation reserve 1 1 1
Retained Earnings (4,018) (3,620) (3,947)
460 858 531
Non current liabilities
Investments in joint ventures 32 29 28
Current liabilities
Trade and other payables 389 421 475
Bank overdrafts and loans 568 452 542
957 873 1,017
Total equity and liabilities 1,449 1,760 1,576
Cash Flow Statement
For the six months ended 30 June 2008
Six months to Six months to Year to
30 June 2008 30 June 2007 31 December
2007
(unaudited) (unaudited)
(audited)
£000 £000
£000
(Restated -
see Note 1)
Cash inflow from operating
activities
Loss from operations (69) (5) (318)
Adjustments for:
Depreciation, amortisation and 22 50 274
impairment
Equity settled share based payment 2 9 21
Share of joint venture loss - - (4)
Operating cash flows before (45) 54 (27)
movements in working capital
Increase in inventory (6) - (3)
(Increase)/Decrease in receivables (75) 14 (11)
Increase/(Decrease) in payables 86 (108) (52)
Cash used in operations (40) (40) (93)
Interest paid (22) (20) (38)
R&D tax credit 18 - 24
Income tax paid - - (7)
Net cash used in operating (44) (60) (114)
activities
Cash flows from investing
activities
Purchase of intangible assets (25) (62) (80)
Cash flows from financing
activities
Issue of ordinary share capital - 467 467
for cash
Receipt for the exercise of share - - 2
options
Net(decrease)/increase in cash and (69) 345 275
cash equivalents
Cash and cash equivalents at (448) (723) (723)
beginning of period
Cash and cash equivalents at end (517) (378) (448)
of period
Notes to the half-yearly results
1. Basis of preparation
The half-yearly results for the six months ended 30 June 2008 are unaudited and
do not constitute statutory accounts in accordance with section 240 of the
Companies Act 1985.
Full accounts for the year ended 31 December 2007, on which the auditors gave
an unqualified report and contained no statement under Section 237 (2) or (3)
of the Companies Act 1985, have been delivered to the Registrar of Companies.
The results for the six months to 30 June 2007 have been restated due to the
introduction of additional IFRS accounting treatments, a tax credit and other
minor accounting amendments that were required owing to certain timing issues.
2. Loss per share
The basic loss per share has been calculated by dividing the retained loss for
the period of £70,826 (2007: £2,540) by the weighted average number of ordinary
shares of 112,447,934 (2007: 91,344,986) in issue during the period. The
diluted loss per share is the same as the basic loss per share, in accordance
with FRS 14 which prescribes that potential ordinary shares should only be used
as dilutive when, and only when, their conversion to ordinary shares would
decrease net profit or increase net loss per share from continuing operations.
3. Dividends
No dividend is proposed for the six months ended 30 June 2008.
4. Post balance sheet events
On 21 September 2008, the Company entered into a share transfer agreement
whereby it conditionally agreed to transfer the entire share capital of Jewish
Advocate Publishing Corporation ('Jewish Advocate') to The Zvhil-Mezbuz Rebbe,
Grand Rabbi Y.A.Korff of Boston ('the Rebbe'). In consideration for the
transfer to him of the entire share capital of Jewish Advocate, the Rebbe has
agreed that 20,500,000 of the ordinary shares of £0.01 each ('Ordinary Shares')
that he holds in the capital of the Company will be redesignated as Deferred
Shares (as defined in the articles of association) and that warrants to
subscribe for 4,394,350 Ordinary Shares that he holds will be cancelled. In
addition, the Rebbe will be released from his guarantee obligations under the £
700,000 banking facility with Bank Hapoalim, which was renewed on 2 July 2008.
The transaction was classified as a related party transaction under the AIM
Rules as the Rebbe is a director of the Company. The transaction was approved
by shareholders at the general meeting of the Company on 25 September 2008.
5. Copies of half-yearly results
Copies of the half-yearly results will be available shortly from the Company's
website (www.totallyplc.com) and from the Company's registered office, Unit
611, Highgate Studios, 53-79 Highgate Road, London NW5 1TL.