Aeorema Communications : 30/09/2019 - Final Results

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Aeorema Communications plc / Index: AIM / Epic: AEO / Sector: Media

30 September 2019

Aeorema Communications plc ("Aeorema", the "Company" or the "Group")

Final Results

Aeorema Communications plc, the AIM-traded live events agency, announces its audited results for the year ended 30 June 2019. The Company's annual general meeting ("AGM") is expected to be held in mid-November and a separate announcement will be made in due course to confirm postage of the Annual Report and Accounts for the year ended 30 June 2019 and the notice of AGM to shareholders, as well as availability of the documents on the Company's website www.aeorema.com.

Financial Highlights

• Revenues of £6,765,280, a year-on-year increase of 40% (2018: £4,820,167)
• Profit before exceptional items of £374,399, a year-on-year increase of 29% (2018: £289,650)
• £nil exceptional items (2018: £231,357) resulting in profit after tax of £288,323 (2018: £50,405)
• Maintained strong cash position with £2.2 million in the bank (as at 30 June 2019)
• Proposed final dividend payment of 1p (2018: 0.75p)

Operational Highlights

• Aeorema reinforced its position as a market leader in the execution of creative and differentiated live events
• Events included annual partner conferences, a leadership event and several events at Cannes Lions Festival
• New client wins include a leading global law firm, several technology firms and an established confectionery brand
• Further key appointments made in the period to further enhance the Company and its offering

The Board has agreed that Steve Quah and Andrew Harvey's titles should change from Joint Managing Directors to Chief Executive Officer and Managing Director, with immediate effect, in order to better reflect their roles within the business.

For further information visit www.aeorema.comor contact:

Chairman's Statement

In the first full year under new management, I am pleased to report a strong financial performance for the financial year ended 30 June 2019. Revenue has increased 40% to £6,765,280 (2018: £4,820,167) and the Group has increased profitability reporting an operating profit pre-exceptional items of £374,399 representing a 29% increase on 2018 (2018: £289,650) and profit before taxation of £375,010 (2018: £58,685). The Group's cash position remains robust at £2.2 million (2018: £1.4 million). The profitability and the maintained cash position of the Group has led to the Board to propose a full year dividend of 1.0 pence per share (2018: 0.75 pence) to be paid to shareholders on the register on 22 November 2019. The ex-dividend date will be 21 November 2019. Subject to the proposed dividend being approved by shareholders at the forthcoming AGM, it will be paid on 16 December 2019.

The Group reinforced its strong market reputation for execution of creative and differentiated live events through the successful delivery of several noteworthy events. This includes four client projects delivered at the Cannes Lions International Festival of Creativity including a stand-out event hosted on behalf of a global business-focussed media company that attracted high praise across the event. I am also proud of the smaller scale corporate events successfully undertaken including partner meetings for a global law firm organised in the United States and an innovative, unique event hosted at the Bristol waterfront in outdoor, temporary venues. Further to this, a highly successful senior management event was completed for a new client in London operating within the technology and manufacturing sector. The Group has made additional key executive appointments during the year with a view to maintaining and expanding client relationships.

Whilst the Group has delivered an unusually high number of low profit margin events during the year, new events to be delivered in 2020 are expected to have higher gross profit margins. Despite this, the Group has delivered a highly successful and profitable year. The Group is also continuing to invest in new hires with the aim of reducing its use of freelancers.

We are pleased with the ongoing development and contributions made by our film production and experiential businesses. The Group produced a variety of award nominated films during the year which continued to showcase the Group's creativity. The Group has recently appointed a new Director of Client Partnerships, Andrew Zanelli-King, who is responsible for growing the film business. Andrew has a proven track record of helping film businesses expand at various companies and has an established network of contacts within the industry. The experiential business continues to grow with several small events delivered during the year.

Outlook

Focus remains on sustaining client relationships and effective client acquisition to ensure that a robust pipeline of business is in place. To this end, I am confident of future growth having already secured new client wins in the current financial year including a leading global law firm, a number within the technology sector and a high-profile, established confectionery brand. Another upcoming highlight is

set to be the execution of an extraordinary event at MIPCOM in Cannes, an annual trade show for entertainment content, in October for a global media brand.

We continue to invest in the Group and its success through making key appointments and view this as integral to the creation of a dividend-paying, financially healthy business operating at the forefront of the industry. Committed to the continued growth of the Group, we continue to assess potentially value accretive, complementary opportunities as they are presented to the Group. To maintain a reputation for executing highly creative live events it is important that innovation remains at the core of what we do. Therefore, in line with this, we strive to remain dynamic and adaptive to changes within the industry.

It is testament to the strength of Aeorema's core business and established relationships that we have been able to successfully advance our strategy of enhancing the offering that we can provide our clients during the financial year. The notable increase in revenue and profit reported in the period validates this strategy and provides confidence for the Board as we continue to look to ways to grow and improve your Group, with margins maintained at an acceptable level.

Finally, I would like to take the opportunity to thank all employees for their hard work and commitment, as well as our shareholders for their continued support.

1. Hale Chairman
   27 September 2019

Chief Executive Officer's Report

It's been another outstanding year and I am incredibly proud of what our operating business, Cheerful Twentyfirst, has achieved. Our talented and dedicated team has once again raised the bar for our wonderful clients who continue to trust us to deliver game changing live events, brand experiences and impactful on-screen content.

I look forward to fulfilling my new role as CEO, developing and delivering the overall vision of the Company. Andrew Harvey will remain in the role of Managing Director and oversee all operational elements of the business. We will both continue to play important roles in developing key accounts and winning new business, and we now have an amazing senior team that will continue to grow the business.

There have been so many highlights in the last financial year. Our reputation continues to grow at the Cannes Lions International Festival of Creativity. This year we delivered a record number of projects for our clients, including a project which was widely regarded as one of the best brand activations ever conceived and delivered in Cannes.

As part of our growth strategy I am delighted that we have taken our unique Cannes experience into MIPCOM Cannes for the first time. In October 2019 we will be delivering an unimaginable brand activation for a global media client with the world watching! It's a 3-year project which encapsulates the ambition, creativity and pure guts of our Company.

Our delivery in the world of Trade Marketing and B2B events was further enhanced this year at DMEXCO, MWC and SIBOS. With the support of our new key hires over the last 18 months we continue to expand in this exciting space and significantly add new recurring revenue streams to our business.

Once again, we continue to grow our reputation within the senior leadership conference space, and we have recently won four new clients for the year ahead within professional services, law, confectionery and tech. Although budgets remain competitive, clients are still looking for that unique creative and robust delivery that we are trusted and known for - game changing events.

We have also seen growth for the second consecutive year within our Moving Image division. Content plays such a critical role in what we do, and we are committed to growing this part of the business dramatically over the coming years. To support this ambition, we have hired Client Partnerships Director Andrew Zanelli-King, who has an enviable reputation in our industry with a fantastic track record of success and we can't wait to see the effect he has on Cheerful Twentyfirst.

All this is further underpinned by us moving up 13 places in the C&IT UKs Top 50 agency 2019 list. I look forward to building on this success in 2020.

All this would not have been achieved without our amazing team, our great clients and our committed investors - thank you.

1. Quah
   CEO
   27 September 2019

Consolidated Statement of Comprehensive Income

For the year ended 30 June 2019

There were no other comprehensive income items.

The notes are an integral part of these financial statements.

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