EXHIBIT 99.1
News Announcement
[BRIGHT STATION LOGO]
Bright Station plc Q1 2001 Results Announcement
London, 31 May 2001, Bright Station plc (LSE: BSN, NASDAQ: BSTN) today announced
its first quarter results for the three month period ending 31 March 2001, which
follows on from the Board's recent statements relating to the Group's
restructuring and today's announcement regarding additional funding for the
Group.
Consistent with the revised strategy outlined in the Board's announcement of
30th April 2001, the attached statement of results reflects the fact that our
eCommerce businesses, comprising Sparza and officeshopper, will be either closed
or sold, in order to reposition the Group as a pure play knowledge management
company through its Smartlogik subsidiary.
Today, the Company announced that it had secured placing commitments from
institutional investors to raise approximately (pound)12 million (net of
expenses) through the issue of 270,000,000 New Ordinary Shares at 5 pence each
through a Placing and Open Offer. As a result, the Company expects to be in a
position to fully implement the restructuring.
As a consequence, these results now show the eCommerce operations as
discontinued. The results also include a significant level of overhead relating
to corporate staff, currently being deployed to manage the funding and Group
restructuring plans, which on completion will render the majority of these
individuals redundant.
In addition, the proposed restructuring has necessitated the restatement of
certain of the 31 December 2000 results. Details of these restatements are
included in note 2.
Group revenues for continuing operations for the quarter of (pound)2.3 million
reflected an 18% increase over Q4 2000 and a 108% increase over Q1 2000.
Operating loss for the quarter was (pound)6.1 million, of which (pound)4.4
million related to continuing operations. In addition, a (pound)0.2 million
charge was written off against the carrying value of investments.
The increase in revenues was principally driven by Smartlogik which continues to
leverage the sales and marketing infrastructure put in place towards the end of
2000. Smartlogik announced important strategic relationships with Intel
Corporation and Norcontrol during the quarter, and with IBM since the quarter
end. Smartlogik has continued to secure new customers, including Virgin Group,
the Danish Foreign Ministry and others. Its client list now includes over 100
corporations and organisations.
- 2 -
As at 31 March 2001 cash at bank was (pound)7.4 million compared to a net
current asset position of (pound)5.6 million. On 2nd May 2001, the Board
announced that cash balances as at the end of April amounted to (pound)2.9
million and that the Board was taking radical action to reduce significantly the
level of operational cash outflows for the remainder of the quarter. The rate of
decline in cash reserves during April was in part attributable to accelerated
payments to settle creditor liabilities coupled with slower than anticipated
cash collection of receivables.
Cash outflows in the month of April also included the final payment of
(pound)450,000 in deferred consideration for Write Works Ltd, in addition to
costs incurred in relation to the Group's reorganisation of its WebTop
operations which were transferred to Smartlogik on 8th May 2001.
On 9th May 2001, the Board announced that it had entered into a legally binding
agreement regarding the sale of the name, customer list and debtor book of
officeshopper, its online office supplies company, to Inkwell Direct, a division
of the Howarine Calvert group of companies.
The only non-core business remaining within the Group is Sparza, where the cost
base has been reduced and plans made for its closure. During the past month
corporate overheads have also been curtailed, and the corporate centre is now
focused exclusively on completing the restructuring for the ongoing business,
Smartlogik.
Allen Thomas, Chairman of Bright Station, said:
"Smartlogik, the business around which the company is currently being
restructured, continues to trade satisfactorily, despite the disruption that the
current process inevitably causes.
"Today's funding announcement shows institutional endorsement of the Smartlogik
business and management and we are confident that Smartlogik will be able to
deliver value to our shareholders under the revised corporate structure."
- ENDS -
For further information please contact:
Allen Thomas +44 20 7930 6900
Chairman -Bright Station plc
John Olsen/James Longfield +44 20 7357 9477
Hogarth Partnership
jolsen@hogarthpr.co.uk
David Collins/Robert Rinderman 001 212 835 8500
Jaffoni & Collins
BSTN@jcir.com
Bright Station plc
Consolidated Profit and Loss Account (unaudited)
For the 3 months ended 31 March 2001
Continuing Discontinued Continuing Discontinued
operations operations Total operations operations Total
2001 2001 2001 2000 2000 2000
(pound)'000 (pound)'000 (pound)'000 (pound)'000 (pound)'000 (pound)'000
Turnover 2,293 748 3,041 1,102 38,751 39,853
Cost of sales (262) (420) (682) (146) (17,377) (17,523)
--------------- --------------- ------------- ----------- ------------ -------------
Gross profit 2,031 328 2,359 956 21,374 22,330
Distribution costs (1,711) (175) (1,886) (210) (5,835) (6,045)
Administrative expenses (4,685) (1,918) (6,603) (1,051) (15,755) (16,806)
--------------- --------------- ------------- ----------- ------------ -------------
Operating loss (4,365) (1,765) (6,130) (305) (216) (521)
Loss on disposal of ISD - - - - (106,045) (106,045)
--------------- --------------- ------------- ----------- ------------ -------------
Loss on ordinary activities
after exceptional items (4,365) (1,765) (6,130) (305) (106,261) (106,566)
=============== =============== =========== ============
Interest receivable 143 80
Amounts written off
investments (181) -
Interest payable (3) (4,695)
-------------- -------------
Loss on ordinary activities
before taxation (6,171) (111,181)
Taxation on loss on ordinary
activities - (282)
-------------- -------------
Loss on ordinary activities
after taxation (6,171) (111,463)
Minority equity interests - (21)
-------------- -------------
Retained loss (6,171) (111,484)
============== =============
Loss per share (pence) (3.6) (71.9)
Shares used in computing loss
per share (thousands)
172,615 155,061
Bright Station plc
Consolidated Balance Sheet (unaudited)
As at 31 March 2001
31 March 31 December
2001 2000
(pound)'000 (pound)'000
FIXED ASSETS
Goodwill 2,335 2,364
Tangible assets 1,908 1,445
Investments 600 600
---------------- -----------------
4,843 4,409
---------------- -----------------
CURRENT FIXED ASSETS
Debtors 4,748 3,310
Cash at bank and in hand 7,414 16,334
---------------- -----------------
12,162 19,644
CREDITORS (amounts falling due within one year) (6,537) (7,354)
---------------- -----------------
NET CURRENT ASSETS 5,625 12,290
---------------- -----------------
TOTAL ASSETS LESS CURRENT LIABILITIES 10,468 16,699
CREDITORS (amounts falling due after more than one year) (17) (17)
---------------- -----------------
10,451 16,682
================ =================
CAPITAL AND RESERVES
Called up share capital 1,726 1,726
Share premium account 184,057 184,057
Shares to be issued 134 134
Profit and loss account (175,466) (169,235)
---------------- -----------------
Total equity shareholders' funds 10,451 16,682
================ =================
Certain adjustments have been made to the carrying amount of certain fixed
assets in the balance sheet as at 31 December 2000 as the result of the ongoing
restructuring of the Group. These are detailed in note 2.
Bright Station plc
Consolidated Cash Flow Statement (unaudited)
For the 3 months ended 31 March 2001
2001 2000
(pound)'000 (pound)'000
NET CASH (OUTFLOW)/INFLOW FROM OPERATING ACTIVITIES (8,072) 2,770
----------------- ----------------
RETURNS ON INVESTMENTS AND SERVICING OF FINANCE
Interest received 172 64
Interest paid on bank loans and overdrafts - (1,472)
Interest paid on finance leases - (5)
----------------- ----------------
172 (1,413)
----------------- ----------------
TAXATION PAID (61) (120)
----------------- ----------------
CAPITAL EXPENDITURE
Payments to acquire intangible assets - (2,008)
Payments to acquire tangible fixed assets (775) (354)
Payments to acquire fixed asset investments (175) -
----------------- ----------------
(950) (2,362)
----------------- ----------------
CASH OUTFLOW BEFORE THE USE OF LIQUID RESOURCES AND FINANCING (8,911) (1,125)
----------------- ----------------
FINANCING
Net proceeds on issue of Ordinary share capital - 84
Debt due within one year
- - Repayment of loans - (3,701)
- - Repayment of capital element of finance leases - (642)
----------------- ----------------
- (4,259)
----------------- ----------------
DECREASE IN CASH (8,911) (5,384)
----------------- ----------------
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT)
Decrease in cash in the period (8,911) (5,384)
Cash used to decrease lease financing - 642
Cash used to repay loans - 3,701
----------------- ----------------
Change in net debt from cash flows (8,911) (1,041)
Other non-cash changes - (249)
Effect of foreign exchange rate changes - 520
----------------- ----------------
Movement in net debt in period (8,911) (770)
Net funds/(debt) at beginning of period 16,297 (154,126)
----------------- ----------------
Net funds/(debt) at end of period 7,386 (154,896)
================= ================
Bright Station plc
For the 3 months ended 31 March 2001 (unaudited)
1. Analysis of Revenues
2000 2001
Qtr1 Qtr2 Qtr3 Qtr4 Total Qtr1
(pound)'000 (pound)'000 (pound)'000 (pound)'000 (pound)'000 (pound)'000
Continuing Operations
Smartlogik 691 994 1,017 1,441 4,143 1,746
Other 411 419 476 498 1,804 547
------------ -------------- -------------- -------------- -------------- ------------------
Total continuing operations
1,102 1,413 1,493 1,939 5,947 2,293
Discontinued operations
38,751 11,294 875 775 51,695 748
------------ -------------- -------------- -------------- -------------- ------------------
Total revenues 39,853 12,707 2,368 2,714 57,642 3,041
============ ============== ============== ============== ============== ==================
Bright Station plc
For the 3 months ended 31 March, 2001 (unauditied)
2. Post 31 December 2000 balance sheet events
On 28 February 2001, the Company made its preliminary announcement of its
results for the year ended 31 December 2000. The reported loss before tax for
the year was (pound)128,944,000.
This loss has been adjusted as follows:
(pound)000
Original loss before tax per preliminary announcement (128,944)
Impairment adjustment (see below) (2,249)
Reclassification of capital development costs relating to ISD (501)
- -------------------------------------------------------------------------------------- ----------------
Loss before tax (131,694)
- -------------------------------------------------------------------------------------- ----------------
On 30 April 2001 the Group announced its intention to refocus its business
operations, with the resultant sale or closure of its e-commerce activities,
comprising officeshopper and Sparza, and curtailment of head office activities.
The decision to refocus the activities of the business as described above
provided evidence of an impairment in value that had occurred prior to the
balance sheet data. An impairment review of the carrying value of the fixed
assets held in the balance sheet at 31 December 2000 has been performed and an
adjustment to the carrying value was made as above.
The impairment of fixed assets was calculated as follows:
Carrying value
Original adjustments
2000 2000
(pound)'000 (pound)'000 (pound)'000
- ------------------------------------- ----------- -------------- ------------
FIXED ASSETS
Intangible assets 295 (295) -
Goodwill 2,621 (257) 2,364
Tangible assets 2,398 (953) 1,445
Investments 1,344 (744) 600
- ------------------------------------- ----------- -------------- ------------
6,658 (2,249) 4,409
- ------------------------------------- ----------- -------------- ------------
A change was also made to the exceptional loss on the disposal of ISD as a
result of reclassification of capital development costs. The effect of this
change has also been detailed above.
Bright Station plc
For the 3 months ended 31 March 2001 (unaudited)
3. Reconciliation of operating loss to net cash (outflow)/inflow from
operating activities
31 March 31 March
2001 2000
(pound)000 (pound)000
Operating loss (6,130) (521)
Depreciation charges 307 1,501
Amortisation of goodwill 32 -
Amortisation of development costs - 2,878
Loss on disposal of intangible fixed assets - (56)
Profit on disposal of fixed asset investments - 93
Loss on disposal of tangible fixed assets 3 1
Increase in debtors (1,719) (1,448)
(Decrease)/increase in creditors (546) 6,420
Exchange variances (19) (4,257)
Cash cost of restructuring - (73)
Other working capital movements - (5)
Other adjustments for non-cash items - (1,763)
----------------- ----------------
Net cash (outflow)/inflow from operating activities (8,072) 2,770
================= ================
Bright Station plc
For the 3 months ended 31 March 2001 (unaudited)
4. Discontinued activities
The quarterly financial statements for the 3 months ending 31 March 2001
have been restated to reflect the reclassification of the eCommerce
business, comprising Sparza and officeshopper, as discontinued.
5. Administrative expenses
Administrative expenses for the quarter ending 31 March 2001 include
non-recurring costs relating to the Group restructuring.
6. Post balance sheet events
Disposal of officeshopper assets
On 9th May 2001, the board announced that it had entered into a legally
binding agreement regarding the sale of the name, customer list and debtor
book of officeshopper, it's online office supplies company, to Inkwell
Direct, a division of the Howarine Calvert group of companies for
consideration of up to (pound)450,000, payable in cash.
Placing and Open Offer
On 31 May 2001, the Group announced its proposed placing and open offer of
270,000,000 new shares of 1p each subject to approval by shareholders at an
Extraordinary General Meeting of the Company. The estimated proceeds of the
placing and open offer of approximately (pound)12 million net of expenses,
are required for the Group to be able to continue in operational existence
for the foreseeable future.
These results are unaudited and do not constitute statutory accounts within the
meaning of Section 240 of the Companies Act 1985. The financial statements for
the year ended 31 December 1999 have been reported on by PricewaterhouseCoopers,
and delivered to the Registrar of Companies. The audit report for the year ended
31 December 1999 was not qualified and neither did it contain any statements
under Section 237 (2) or (3) of the Companies Act 1985. The auditors expect to
issue an unqualified, but modified, opinion for the year ended 31 December 2000.
The modified opinion is expected to contain an explanatory paragraph relating to
a fundamental uncertainty concerning the going concern basis of preparation for
the financial statements being dependent upon the successful completion of the
Placing and Open Offer.