IME.L Regulatory News (IME)

5 Apr 2006 07:01

Immedia Broadcasting plc05 April 2006 5 April 2006 IMMEDIA BROADCASTING PLC Preliminary Results for the year ended 31 December 2005 and Acquisition of Cube Group Immedia Broadcasting PLC ("Immedia"), the UK's leading provider of live tailoredradio for retailers, announces its preliminary results for the year to 31December 2005. Financial Highlights 2005 2004 £'000 £'000 Turnover 3,008 2,970Operating profit before depreciation and amortisation, exceptional items and 73 138interestDepreciation and amortisation (699) (544)Impairment charge (446) -Net interest receivable 20 39Loss for the financial year (1,051) (367)Basic loss per share (9.43)p (3.29)pNet assets 1,680 2,726Net funds 643 627 Acquisition - Agreement to purchase the entire capital of Cube Group of companies subject to shareholder approval. Operating Highlights - 'HSBC Live' and 'IKEA Live' successfully rolled-out. - Strategic change to the Impulse Live! business model towards a subscription based model. - Appointment of ABC, specialists in in-store advertising, strengthens our sales team. - New brands sign for Impulse Live: Northcliffe, Alphyra. Commenting on the results and prospects, Bruno Brookes, Chief Executive, said: "I am very pleased to announce today the acquisition of Cube Group ofCompanies, a leader in in-store TV. It will further strengthen the appeal of ouroffering and underpin our confidence in establishing ourselves as the number onein the market. The Company has a healthy pipeline of blue chip opportunities, and is drivingtowards profitability. The business remains cash generative and Immedia is ideally positioned tobenefit from good momentum in the sector." For further information please contact: Immedia Broadcasting PlcBruno Brookes - Chief Executive 01635 572 800 Hudson SandlerNick Lyon / Sandrine Gallien 020 7796 4133 Daniel Stewart & Company PlcTom Jenkins / Marc Young 020 7776 6550 Please visit Immedia Broadcasting's website at www.immediabroadcasting.com Chairman's statement I am pleased to be able to report that the Group continued to trade profitablyat the EBITDA level, and continued to generate cash. The Group reported netfunds at the year-end of £643,000. The Board undertook a review of the strategic options open to the company withthe objective of accelerating the growth of the business with a faster move tofull profitability. As a result two strategic initiatives have been undertaken: The first is the proposed acquisition of Cube Group of Companies. Furtherinformation in respect of the acquisition will be set out in a circular to besent to shareholders. The second initiative is the refinement of the Impulse Live! business model.Since its launch as Newsagents Radio the Impulse Live! station has matured intoa marketing platform for the rapidly expanding convenience store retail sectorand the profile of retailers taking the station has shifted from the smallindependent sector to larger branded symbol groups. This change of clientprofile has enabled a shift to primarily subscription based revenue streams andaway from solely advertising based revenue. The change of business model and theimpact of it on the financials of Impulse Live! is covered in detail in theChief Executive's review which follows. Prospects for the current year are good. The strategic initiatives describedabove will have an immediate positive impact, whilst there are reasons to beoptimistic that the subscription stations currently broadcast will be added to. Geoff Howard-SpinkChairman 4 April 2006 Chief Executive's review Acquisition of Cube Group I am delighted to announce that Immedia Broadcasting, the UK's leading providerof live tailored radio for retailers, has agreed to purchase the entire sharecapital of Cube Group of Companies ("Cube") for an aggregate consideration of£2.43 million to be satisfied in part by cash (£1.5 million) and in part by theissue of approximately 3.3 million new shares. The consideration is subject toadjustment depending on the extent to which certain specified revenue and grossprofit targets are met by Cube. If any deferred cash payment becomes due andpayable, it is to be paid together with an amount equal to 8 per cent per annumof such deferred sum. Cube produces digital media in the form of audio or audio-visual programmingprimarily for the retail sector, and within that the fashion and hair & beautysectors. This programming is used as in-store entertainment, for promotion andadvertising. Additionally, Cube provides a range of associated services such ashardware design and installation, content distribution, content aggregation andscheduling, creation of visual media and hardware support and maintenance. TheDirectors believe Cube is a high quality service provider. In 2005 we announced the launch of the RadioVision product and identified theneed for a strong visual partner. By acquiring Cube, I believe we have achievedthat goal. Cube brings a wealth of TV broadcast talent, it shares a similarin-store strategy and introduces Immedia to exciting new clients such as TopShop, Top Man, Burberry and Toni&Guy. Cube produces high quality in-storeprogrammes and promotions, supported by premium screen installations. Theirproduct fits well with RadioVision, where live radio triggers engaging plasmavisuals in real time. We will launch our first subscription trial for RadioVision at the end of April2006 and believe the acquisition of Cube will allow us to accelerate thedevelopment and sales of RadioVision. Cube reported turnover of £1.68 million and pre-tax profit of £154,000 in theyear to September 2005. It is intended that Fiona Ryder and Ross Penney of Cube will be appointed to theBoard of the Company on completion of the acquisition. Ms Ryder's proposedannual salary is £80,000 per annum, increasing to £100,000 per annum with effectfrom 1 January 2007, and Mr Penney's proposed annual salary is £63,000 perannum, increasing to £83,000 per annum with effect from 1 January 2007. MsRyder and Mr Penney would also be entitled to receive certain benefits in linewith those receivable by the other executive directors of Immedia. Theirproposed service contracts would be terminable on six months' notice. Preliminary results for the year ended 31 December 2005 I am also pleased to present our results for the 12 month period ending 31December 2005 and report further progress in the development of Immedia'sbusiness. Immedia retained a sound financial position for the year with net funds of£643,000 at the 31st December 2005. Turnover for the year increased to £3.01million, with gross margin improving by £72,000. Direct costs were managed down,whilst staff costs rose slightly in order to prepare for new projects currentlyin the pipeline. We removed our internal sales function and outsourced all ofour advertising sales by appointing ABC media, who have started well. EBITDA forthe year was £73,391 and the Group generated £182,000 of cash. The Company continued to work hard to demonstrate the key benefits of its liveradio stations to retailers. Now more than ever our clients are comfortable thata tailored live station from Immedia dramatically improves incremental sales,assists internal communications and helps integrate all other communicationchannels. Subscription Channels The year saw Immedia working with some of the largest retail brands on the highstreet. Following a successful trial for HSBC in 50 of their branches we successfullyconverted this opportunity to a roll-out of 'HSBC Live', a bespoke radiostation, in over 400 branches across the UK. This was a milestone for theCompany, as we won a new category of client and were able to demonstrate ourability to work in a highly regulated environment. We also successfully launcheda trial for IKEA and have since converted this into a contract that covers all14 existing stores in the UK. We have been informed that the station will berolled out to all future stores as part of the IKEA UK retail developmentprogramme. Finally, we have other subscription trials underway with anexcellent prospect of winning additional long-term contracts. Strategic change for the Impulse Live! network The Impulse Live! network serves nearly 4,000 convenience stores. Historicallythe radio hardware was provided to independent retailers free of charge so thatImmedia could establish a critical mass of listeners and prove the concept.Immedia's turnover came from advertising sales. In my report last year, Ihighlighted the opportunity to transfer the Impulse 'free to retail' model to asubscription model. This new model enables us to keep the majority of theadvertising rights and charge a fee for the service. The Impulse Live! network has established itself as an important promotionaltool for convenience stores and branded symbol groups like Spar have recognisedthe benefits of it. New customers now pay for the hardware as well as thelicence fee. This year we have signed Northcliffe Retail on this newsubscription model. In another major development, we are now able to provide ourbranded symbol clients with a 'traffic managed' tailored service that not onlyprovides them with announcements and advertising specific to their group butalso includes a solution to trigger local advertising relevant to each specificstore. We are in negotiations to provide this similar service to a number oflarge branded symbol groups across the UK. Impairment Following a meeting of the Board on 16 March 2006, it was decided to write downthe carrying value of the Impulse Live! network hardware provided to independentretailers. The impairment is £445,849 for the year ending 31 December 2005. As aresult of this write-down, the carrying value of the Company's assets willreflect their economic value more accurately and the profitability of theCompany will, as a result of the ongoing reduction in the depreciation charge,more closely match the Company's operating cash generation. Impulse Live Ireland Another development for the Impulse Live! brand was the launch of a subscriptiontrial for Alphyra, Europe's largest electronic cash collection company. On the17th October we launched a new tailored Impulse station specifically for Irishconvenience stores. Following the successful trial, Alphyra signed a 5 yearcontract with Immedia to roll out the station to up to 3,000 convenience storesin Ireland. Alphyra will provide all the necessary equipment in stores to helppromote Alphyra products, including mobile top-up and bill payments. Thisagreement could help procure further radio stations with Alphyra across Europe. New advertising sales house Whilst Immedia is moving from a solely 'free to retailer' model to one whichincludes subscription revenues, it continues to generate revenues from theadvertising sales on the network. Last November we strengthened the sales teamby appointing ABC, an agency dedicated to in-store advertising and are pleasedwith their progress so far. Nestle continued their chocolate sector exclusivecontract on Impulse, whilst News Group International and other brands continuedtheir campaigns. Other new advertisers included the National Lottery and Pepsi.ABC is also selling advertising onto the Lloyds Pharmacy Live network withsuccess. Outlook Over the last two years, the market has recognised the potential of in-storeradio and television. Immedia, with the acquisition of Cube, now providesservices to some of the most well known names on the high street. This dealwill further strengthen the appeal of our offering and underpin our confidencein establishing ourselves as the number one in the market. The Company has a healthy pipeline of blue chip opportunities, and is drivingtowards profitability. Bruno BrookesChief Executive4 April 2006 Financial review Group trading results Group turnover increased by 1.3% to £3.01 million (2004: £2.97m) whilst grossprofits increased by 4.5% to £1.70m (2004: £1.63m). Underlying administrative expenses increased by £292,338 to £2.32 million,following increased depreciation charges of £155,122 on historic investment,additional personnel costs of £99,145 as the number of full time employees rosefrom 22 to 25, and other costs of £38,071. Exceptional impairment charges of£445,849 increased the total administration charge for the year to £2.77 million(2004: £2.03 million). The operating profit before depreciation and amortisation, exceptionalimpairment charge and interest was £73,391 (2004: £138,174). After depreciationand amortisation of £699,279, impairment charge of £445,849 and net interestreceivable of £20,321, the overall loss for the financial year increased to£1,051,416 (2004: loss £367,448). Consolidated balance sheet and cash flows At the year-end net assets were £1.68 million (2004: £2.73 million) of which netfunds totalled £643,497 (2004: net funds fell by £1.9 million to £626,858). Thebusiness has generated positive cash flows of £16,639. Robert ParkerFinance Director4 April 2006 Consolidated Profit and Loss accountfor the year ended 31 December 2005 Note 2005 2004 £ £ Turnover 4 3,007,688 2,969,651Cost of sales (1,308,281) (1,342,677) Gross profit 1,699,407 1,626,974Administrative expenses (2,771,144) (2,032,957) (including in 2005 an exceptional impairment charge of £445,849) Operating loss (1,071,737) (405,983) Operating profit before depreciation, amortisation, 73,391 138,174 exceptional impairment charge and interestDepreciation and amortisation (699,279) (544,157)Impairment charge (445,849) -Net interest receivable 20,321 38,535 Interest receivable and similar income 37,817 63,011Interest payable and similar charges (17,496) (24,476) Loss on ordinary activities before taxation (1,051,416) (367,448)Tax on loss on ordinary activities - - Loss for the financial year (1,051,416) (367,448) Loss per share - basic 5 (9.43) p (3.29) p In the two years to 31 December 2005, the Group made no acquisitions and had nodiscontinued operations. Consolidated statement of total recognised gains and lossesfor the year ended 31 December 2005 Note 2005 2004 £ £ Loss for the financial year (1,051,416) (367,448)Effect of adoption of FRS 25 on 1 January 2005(with 2004 not restated) (10,546) - Total recognised gains and losses relating tothe financial year 14 (1,061,962) (367,448) There is no difference between the loss on ordinary activities before taxationand the retained loss for the financial years stated above, and their historicalcost equivalents. Consolidated Balance Sheetat 31 December 2005 Note 2005 2004 £ £Fixed assetsIntangible assets 8 36,637 73,267Tangible assets 9 1,155,712 1,790,232 1,192,349 1,863,499 Current assetsDebtors 10 866,422 1,125,604Cash at bank and in hand 838,452 1,000,215 1,704,874 2,125,819Creditors: amounts falling due within one year 11 (1,217,614) (1,053,565) Net current assets 487,260 1,072,254 Total assets less current liabilities 1,679,609 2,935,753 Creditors: amounts falling due after more than one year 12 - (200,000)Provisions for liabilities and charges - (10,000) Net assets 1,679,609 2,725,753 Capital and reservesCalled up share capital 13 1,173,897 1,170,791Share premium account 14 3,390,411 3,372,960Merger reserve 14 2,245,333 2,245,333Profit and loss account 14 (5,130,032) (4,063,331) Equity shareholders' funds 15 1,679,609 2,725,753 Consolidated Cash Flow Statementfor the year ended 31 December 2005 Note 2005 2004 £ £ Cash inflow/(outflow) from operating activities 6 464,524 (789,491) Return on investments & servicing of financeInterest received 37,817 63,011Interest paid (17,496) (24,476) Net cash inflow from returns on investments & servicing of finance 20,321 38,535 TaxationCorporation tax paid - - Capital expenditure & financial investmentPayments to acquire tangible fixed assets (473,978) (1,170,938)Receipts from sales of tangible fixed assets 500 815 Net cash outflow on capital expenditure and financial investment (473,478) (1,170,123) Net cash inflow/(outflow) before management of liquid resources and 11,367 (1,921,079)financing Management of liquid resourcesCash withdrawn from short-term deposit 210,000 2,200,000 FinancingRepayment of other loans (50,000) (500,000)Purchase of own shares for Immedia Employee Benefit Trust (6,865) -Share issue costs (taken against share premium account) (10,498) -Effect of adoption of FRS 25 on 1 January 2005 28,253 -(with 2004 not restated) Net cash outflow from financing (39,110) (500,000) Increase/(decrease) in cash in the year 182,257 (221,079) Reconciliation of net cash flow to movement in net fundsIncrease/(decrease) in cash in the year 182,257 (221,079)Cash outflow from decrease in liquid resources (210,000) (2,200,000)Cash outflow from decrease in debt 44,382 500,000 Movement in net debt 16,639 (1,921,079)Net funds at 1 January 626,858 2,547,937 Net funds at 31 December 7 643,497 626,858 Notes to the preliminary results 1 Basis of preparation The financial information set out above does not constitute the company'sstatutory accounts for the year ended 31 December 2005 (but is derived fromthose accounts). Statutory accounts for 2004 have been delivered to theregistrar of companies: the auditors have reported on those accounts; theirreports were unqualified and did not contain statements under section 237 (2) or(3) of the Companies Act 1985. The 2005 accounts will be delivered to theregistrar of companies following the company's Annual General Meeting. TheAnnual Report and Notice of Annual General Meeting will be posted to theshareholders by 6 April 2006. This preliminary announcement was approved by theBoard on 4 April 2006. Basis of consolidation: on 20 November 2003 a new holding company was broughtinto the group. This was carried out by a share for share exchange and theexisting shareholders of Immedia Broadcast Limited received 1,000 10p Ordinaryshares in Immedia Broadcasting Plc for every share held. There was no cashconsideration. T This group reconstruction has been accounted for as a merger aspermitted by FRS 6 acquisitions and mergers. Classification of financial instruments issued by the Group. Following theadoption of FRS 25, financial instruments issued by the Group are treated asequity (i.e. forming part of shareholders' funds) only to the extent that theymeet the following two conditions: a) they include no contractual obligations upon the Company (or Group as the case may be) to deliver cash or other financial assets or to exchange financial assets or financial liabilities with another party under conditions that are potentially unfavourable to the Company (or Group); and b) where the instrument will or may be settled in the Company's own equity instruments, it is either a non-derivative that includes no obligation to deliver a variable number of the Company's own equity instruments or is a derivative that will be settled by the Company's exchanging a fixed amount of cash or other financial assets for a fixed number of its own equity instruments. To the extent that this definition is not met, the proceeds of issue areclassified as a financial liability. Where the instrument so classified takesthe legal form of the Company's own shares, the amounts presented in thesefinancial statements for called up share capital and share premium accountexclude amounts in relation to those shares. Where a financial instrument that contains both equity and financial liabilitycomponents exists these components are separated and accounted for individuallyunder the above policy. The finance cost on the financial liability componentis correspondingly higher over the life of the instrument. Finance payments associated with financial liabilities are dealt with as part ofinterest payable and similar charges. Finance payments associated with financialinstruments that are classified as part of shareholders' funds (see dividendspolicy), are dealt with as appropriations in the reconciliation of movements inshareholders' funds. Notes (continued) Both the Group and the Company have taken advantage of the transitionalarrangements of FRS 25 not to restate corresponding amounts in accordance withthe above policy. The adjustments necessary to implement this policy have beenmade as at 1 January 2005 with the net adjustment to net assets, after tax,taken through the 2005 reconciliation of movements in shareholders' funds. Themain differences between the 2004 and 2005 bases of accounting are shown below: Effect on the balance sheet at 1 January 2005 £Liabilities classified as shares- falling due after more than one year (28,253) Net Assets 28,253 Share capital 3,880Share premium 34,919Profit and loss account (10,546) Equity Shareholders'funds 28,253 The nature of the main effects upon the balance sheet at 1 January 2005 and uponthe 2005 consolidated profit and loss account, statement of total recognisedgains and losses and cash flow statement are as follows: The unsecured convertible loans are treated as liabilities in 2004 and as partliabilities, part shareholders' funds in 2005, increasing net funds, reportedshare capital and net assets at the start of 2005. As a consequence, thereconciliation of net cash flow to the movement in net funds in 2005 is alsoaffected (see note 7). Of the previous carrying value of convertible debt, a portion has been treatedas a share subscription option (i.e. the conversion feature) and has beentransferred directly to equity on 1 January 2005. Thereafter, the finance costof the debt is higher. The cash flow statement is unaffected by this change inaccounting policy. 2 Employee Benefit Trust The Group operates an employee benefit trust (EBT) for the benefit of itsemployees through Immedia Broadcasting Trustees Limited which acts as Trustee.At 31 December 2005 the EBT held 563,500 shares in Immedia Broadcasting Plc intrust for employees against the future exercise of options granted under theImmedia EMI Share Option Scheme (2004: 551,000 shares). Under UITF abstract 38- Accounting for Employee Share Option Trusts - the own shares held in the trusthave been deducted from shareholders' funds (note 15). Notes (continued) 3 Taxation The charge for corporation tax is based on the loss for the year and takes intoaccount taxation deferred because of timing differences between the treatment ofcertain items for taxation and accounting purposes. Deferred tax is recognised,without discounting, in respect of all timing differences between the treatmentof certain items for taxation and accounting purposes which have arisen but notreversed by the balance sheet date, except as otherwise required by FRS 19. 4 Turnover and segmental analysis Turnover, which is stated net of value added tax, represents amounts invoiced tothird parties. All turnover arose from the group's principal activity ofmarketing services. Region of originAll group activities originate in the United Kingdom. United Kingdom Europe Total United Europe Total Kingdom 2005 2005 2005 2004 2004 2004 £ £ £ £ £ £Region of destinationSales to third parties 2,283,603 724,085 3,007,688 2,390,938 578,713 2,969,651 Net assetsSegment net assets 817,509 257,100 1,074,609 1,843,200 175,010 2,018,210Unallocated net assets 605,000 707,543 Total net assets 1,679,609 2,725,753 The split of operating profit has not been provided as it is commerciallysensitive and in the view of the directors disclosure would be damaging to thebusiness. Notes (continued) 5 Loss per share 2005 Number 2004 Number Weighted average number of shares in issue 11,707,910 11,707,910Less own shares (563,500) (551,000) Weighted average number of shares in issue for basic loss per share 11,144,410 11,156,910 The basic and diluted loss per share are calculated using the loss for thefinancial period of £1,051,416 (2004: loss £367,448). In accordance with FRS 22the diluted basic loss per share is stated as the same amount as basic as thereis no dilutive effect. 6 Reconciliation of operating loss to net cash flow from operating activities 2005 2004 £ £ Operating loss (1,071,737) (405,983)Depreciation, amortisation and impairment of tangible and intangible assets 1,145,128 544,157(Profit)/loss on disposal of fixed assets (500) 8,923Decrease in stocks - 1,115Decrease/(increase) in debtors 259,182 (528,135)Increase/(decrease) in creditors 132,451 (409,568) Net cash inflow/(outflow) from operating activities 464,524 (789,491) 7 Analysis of changes in net funds during the year Cash at bank Short-term Other loans Total and in hand deposits £ £ £ £At beginning of year (123,142) 1,000,000 (250,000) 626,858Effect of adoption of FRS 25 on 1 January 2005 (2004 - - 28,253 28,253not restated)Net cash flow 165,006 (210,000) 44,382 (612)Revaluation of other loans - - (11,002) (11,002) At end of year 41,864 790,000 (188,367) 643,497 Notes (continued) 8 Intangible fixed assets Goodwill £CostAt beginning and end of year 109,900 AmortisationAt beginning of year 36,633Charge for year 36,630 At end of year 73,263 Net book valueAt 31 December 2005 36,637 At 31 December 2004 73,267 9 Tangible fixed assets Plant and Fixtures & Network Total machinery fittings Equipment £ £ £ £ CostAt beginning of year 566,133 184,109 2,031,053 2,781,295Additions 64,295 61,743 347,940 473,978Disposals (15,062) - - (15,062) At end of year 615,366 245,852 2,378,993 3,240,211 DepreciationAt beginning of year 296,183 88,801 606,079 991,063Charge for year 160,196 64,972 437,481 662,649Impairment charge - - 445,849 445,849On disposals (15,062) - - (15,062) At end of year 441,317 153,773 1,489,409 2,084,499 Net book valueAt 31 December 2005 174,049 92,079 889,584 1,155,712 At 31 December 2004 269,950 95,308 1,424,974 1,790,232 Notes (continued) 10 Debtors 2005 2004 £ £ Trade debtors 472,862 837,809Other debtors and prepayments 393,560 287,795 866,422 1,125,604 All debtors are due within one year. 11 Creditors: amounts falling due within one year 2005 2004 £ £ Bank overdrafts 6,588 123,357Other loans (note 12) 188,367 50,000Trade creditors 396,683 389,670Other taxation and social security 66,048 43,987Other creditors - 3,603Accruals and deferred income 559,928 442,948 1,217,614 1,053,565 The other loans are unsecured and are repayable in September 2006. They carry a fixed interest rate of 8%. As morefully explained in note 1 classifications of financial liabilities are determined on different bases in 2005 and 2004due to the transitional provisions of FRS 25. 12 Creditors: amounts falling due after more than one year 2005 2004 £ £ Other loans - 200,000 Analysis of debt: 2005 2004 £ £Other loans fall due:In one year or less, or on demand (note 11) 188,367 50,000Between one and two years - 200,000 188,367 250,000 Notes (continued) The other loans are unsecured and are repayable in September 2006. They carry afixed interest rate of 8%. As more fully explained in note 1, classificationsof financial liabilities are determined on different bases in 2005 and 2004 dueto the transitional provisions of FRS 25. 13 Called up share capital 2005 2004 £ £Authorised36,000,000 Ordinary shares of 10 pence each 3,600,000 3,600,000 Allotted, called up and fully paid11,707,910 Ordinary shares of 10 pence each 1,170,791 1,170,791 Liabilities classified as shares 3,106 -Shares classified in shareholders' funds 1,170,791 1,170,791 1,173,897 1,170,791 As more fully explained in note 1, classifications within shareholders' funds are determined on different bases in 2005 and2004 due to the transitional provisions of FRS 25. Employee share options are outstanding as follows: Option scheme Date of grant Number of shares Option price per share Immedia EMI Share Option Scheme 27 Jan 2003 300,000 3.75 penceImmedia EMI Share Option Scheme 29 Oct 2003 55,000 20 penceImmedia EMI Share Option Scheme 11 Dec 2003 170,000 110 pence Options granted to employees under the Immedia EMI Share Option Scheme areexercisable at any time between 12 December 2003 and their expiry on the tenthanniversary of the date of grant. Unsecured convertible loan notes are outstanding as follows: £200,000 unsecured convertible loan notes were granted on 30 September 2003 bearing interest at 8% per annum and arewholly repayable on 19 September 2006 or, at the lenders' option on 14 days' prior written notice, convertible into fullypaid ordinary shares per the table below. Dates between which unsecured loan Number of shares Conversion price notes are convertible per share Unsecured convertible loan notes 02 Dec 2003 19 Sep 2006 190,425 105.028 pence Notes (continued) 14 Share premium and reserves Share premium Merger reserve Profit and account loss account £ £ £ At beginning of year 3,372,960 2,245,333 (4,063,331)Retained loss for the year - - (1,051,416)Effect of adoption of FRS 25 on 1 January 2005 34,919 - (10,546)6) (with 2004 not restated)Released on repayment of Other loan under FRS 25 (6,970) - 2,126Share issue costs (10,498) - -Purchase of own shares for Immedia Employee Benefit Trust - - (6,865) At end of year 3,390,411 2,245,333 (5,130,032) 15 Reconciliation of shareholders' funds 2005 2004 £ £ Opening shareholders' funds 2,725,753 3,093,201Loss for the financial year after taxation (1,051,416) (367,448)Effect of adoption of FRS 25 on 1 January 2005 28,253 -(with 2004 not restated)Released on repayment of Other loan under FRS 25 (5,618) -Share issue costs (10,498) -Purchase of own shares for Immedia Employee Benefit Trust (6,865) - Closing shareholders' funds 1,679,609 2,725,753 This information is provided by RNS The company news service from the London Stock Exchange