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Preliminary Results PresentationMarch 2007
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1. 2006 Preliminary Results Review
2. Business Review
3. Prospects
Agenda
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2006 Overview
Solid operating performance building on last year’s restructuring
Maintained focus on improving the quality of recurring revenues
2006 acquisitions performing well
Financial restructuring completed
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Financial Highlights
Full Year Turnover of £8.2m (£7.9m)
up 4%
Recurring revenue of £5.1m (£4.6m) up
11%
Adjusted EBITDA of £1.6m (2005: £1.0m)
up 60%
Adjusted PBT of £0.6m (2005: £nil)Adjusted PBT excludes: profit on sale of head office, non-recurring costs and the amortisation of intangible assets
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Dec 2006 Dec 2005
£000 £000
Sales 8,184 7,922
2006 Recurring revenues 5,100
2006 Service & system sales
3,100
Adjusted EBITDA 1,630 1,043
Depreciation of tangible assets (561) (672)
Amortisation of intangible assets (1,903) (1,980)
One-off corporate restructuring (109) (216)
Charge for share scheme awards (145) (111)
Operating loss (1,088) (1,936)
Profit on sale of asset 609 -
Interest (293) (259)
Loss before taxation (772) (2,195)
Taxation 361 -
Loss after taxation (411) (2,195)
2006 Preliminary Results
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2006 2005
£000 £000
Intangible fixed assets 9,438 10,124
Tangible fixed assets 891 2,006
Deferred tax asset 361 -
Total fixed assets 10,690 12,130
Stock 440 482
Debtors 2,510 2,051
Total assets 13,640 14,663
Bank overdraft (1,085) (558)
Interest-bearing loans and borrowings (112) (2,747)
Trade and other payables (3,709) (4,215)
Current Liabilities (4,906) (7,520)
Non current interest-bearing loans and borrowings (1,437) -
Total Liabilities (6,343) (7,520)
Net assets 7,297 7,143
Consolidated Balance Sheet
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Improved financial position
£’000s 2006 2005
Current portion of secured bank loans 102 2,716
Current portion of Finance lease liabilities
10 31
Unsecured bank overdraft 1,085 558
1,197 3,305
Oct 2006: Issued £1.45m of 5% convertible loan notes (2012) to Quester Plc
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Business Review
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New clients and renewals increase subscriber sites to 13,383 (12,937)
Major wins include:
New sites and renewals at:
MusicStyling.com performing well:
Impact Automedia (“Brand radio”) adds:
– Cost benefit from “Waterfront” studios
Trading Highlights
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New offering in “Young persons” bar sector
Distributor appointed for Iberian Peninsular
Growing take up of broadband delivery systems
Still awaiting decision on PPL from Copyright Tribunal
(Portugal)
Trading Highlights
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Sale and leaseback of Chesterfield head office– £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.
£0.6m– 10 year lease at initial rent of £114,500 p.a.
Net bank debt reduced to £1.3m at year end £1.5m convertible loan note from Quester plc New banking facilities in place
– £7m of acquisition financing
Financial restructuring
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Retail and leisure markets remain challenging– Increasing the importance of brand differentiation– Pipeline of opportunities & renewals
Strengthened management– Oliver Wilson - Sales Director (ex Avanti Screen Media)– Stephen Yapp - Non-Executive Director
Full year impact of acquisitions to come
Confident of further progress in 2007
Near term Outlook
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Market opportunity remains attractive (UK and Europe) Continue to improve operational gearing & profitability
– Focus on higher quality clients– Adding new subscribers to existing systems
Large number of outlets still not using a third party provider
Fragmented sector offers opportunities for further consolidation
Longer term outlook
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Appendix
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Name Outlet Key customers
DMX UK 16,000 Boots, Arcadia Group, H&M
Imagesound plc 13,383 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
Competitor analysis – UK suppliers
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Derek Mapp Executive ChairmanFounder of Tom Cobleigh plc & LeapfrogChairman of Staffline plc and senior NED at Informa plc
Michael Clark Managing Director Imagesound founder
Ken Pratt Finance DirectorFormer FD and co-Director of Tom Cobleigh plc and Eton Group Limited
Richard Gregory Non-exec DirectorFormer Managing Director Yorkshire TelevisionNon-exec Director of Yorkshire & Clydesdale Banks and National Australia Group Europe Limited
Stephen Yapp Non-exec Director (Chairs Audit Committee)
Previously DCS Group
David Clayton-Smith Non-exec DirectorManagement Consultant12 yrs retail experience with Halfords, Boots, Do It AllGroup Marketing Director of Courage
Directors
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Imagesound plc.Venture Way
Dunston Technology ParkChesterfield
S41 8NET: 01246 572 990
www.imagesound.co.uk