NEWS INVEST : 2007 results - Acquisition of Kaparca Finance

le
0
Consolidated data - ¤'000
to 31 December 2007 (12 months)
2007* 2006 Change
Revenues 11,117 8,445 +31.6%
Adjusted revenues ** 9,898 6,759 +46.4%
Operating income
Margin on adjusted revenues
631
6.4
851
12.6
-25.9%
Net income (before goodwill)
Margin on adjusted revenues
508
5.1%
835
12.35%
-39.2%

* Keyline consolidated over 12 months and Amezis consolidated as of 1 July
** Excluding Sapin Law financial advertising

News Invest, a marketing services firm specialising in the internet, finance and sustainable development - has announced its 2007 results.

The company's full-year results show a decline in profitability, with net income (before goodwill) of ¤508,000 and operating income of ¤631,000.

Shareholders' equity stood at ¤7,886,000 at 31 December 2007, with a net cash position of ¤1,829,000.

Key events of 2007

The internet marketing division saw strong growth, with:

  • An increase in the number of broadcast clients, which now stands at 118;
  • 19 stock market and consumer websites, 120 search marketing campaigns, e-advertising campaigns, internet marketing or e-newsletters and competitions.

The sustainable development division also achieved robust growth, signing contracts with two international groups over the period.

The corporate and financial communications division was impacted by:

  • poor market conditions in the second half of the year, resulting in financial operations being put back;
  • high staff turnover, which temporarily affected the division's organisation and resulted in non-recurring human resources costs;
  • excessive exposure to IPOs.

In order to reduce its dependence on IPO cycles, News Invest chose to acquire Kaparca Finance, a company specialising in stock market strategy consulting and marketing, involved almost entirely in post-IPO activities via recurring yearly contracts.

Kaparca Finance, a value-creating acquisition

Created in 2005, Kaparca Finance has seen brisk growth over the years, generating revenues of ¤1.8 million in 2007 (adjusted revenues of ¤1.4 million) and operating margin on adjusted revenues of over 20%.

News Invest will pay for the acquisition 65% in cash and 35% in shares by creating 312,500 new shares. The issuing of new shares will be subject to the approval of News Invest shareholders during the general meeting on 18 June 2008.

Kaparca Finance will be consolidated into the group's financial statements from 1 April 2008 and will have an immediate positive impact on net earnings per share. An earnout payment is also planned for the next three years. Guillaume Le Floch, Kaparca Finance's founding chairman, will be in charge of the development of the entire financial and corporate communications division.

A number of synergies will be achieved between News Invest and Kaparca Finance:

  • Complementary business introduction networks;
  • Complementary products and services, offering more recurring business;
  • Economies of scale estimated at ¤160,000 over the full year from the pooling of IT and general costs, improved purchasing conditions with suppliers and the integration of certain services within the group.

Outlook for 2008

With 75% recurring revenues, News Invest will continue with its robust growth in 2008, with significant acceleration expected in the second half of the year. The group will benefit primarily from:

  • strong growth in internet marketing and communications activities relating to sustainable development;
  • the ramp-up of cross-selling at group level, particularly with the launch of a new range of complementary "generalist" press relations services;
  • the consolidation of Kaparca Finance over nine months.

In parallel, News Invest has given priority to improving its margins significantly, aiming for a return to double-digit operating margin on adjusted revenues from 2008.


News Invest, marketing services
News Invest is listed on the Marché Libre of Euronext Paris.
Ticker: MLNEI - Reuters code: NWZIy.PA - Bloomberg code: MLNEI.FP
 
Contact
Stéphane Moity, Chairman of the Executive Board
Tel. : 01 53 67 36 50
smoity@newsinvest.com

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