Boards and Daft

godtabh

Indo

Profits at one of Ireland's largest online media groups, Daft Media Ltd, were hit last year following a €1m writedown on an investment in the firm that operates the community website, boards.ie.

Accounts recently filed with the Companies' Office show that Daft Media, which runs Ireland's largest property website, daft.ie, last year increased its pre-tax profits by 8pc to €1.7m.

Last year, the company acquired a competing website, property.ie and this allowed the firm to increase its turnover by 55pc, from €3.7m to €5.7m to the end of December last.

The company recorded an operating profit of €2.45m -- an increase of 55pc on the 2007 figure of €1.58m.

However, profits were hit by the boards.ie investment.

Established in 1997 by brothers Eamon and Brian Fallon, Daft Media acquired a minority stake in boards.ie last August and the filings show that it has written down its investment in boards.ie by €749,750 to €250,000, from €999,750.


Revenues

On the writedown, the directors state that "notwithstanding that the business continues to grow strongly in terms of community, traffic and page intermissions, its revenues are still uncertain".

Daft Media's annual returns show that two of its directors, Paul Kenny and Eamon Fallon, were also directors of boards.ie in the period to the end of December last year.

The filings reveal that Daft Media Ltd has €1.8m in accumulated profits and a total of €2m in shareholder funds. The company did not pay a dividend last year.

And daft.ie's unique users have increased from one million to 1.27 million, according to the most recent Audited Bureau of Circulation (ABC) figures.

- Gordon Deegan

What impact has this had on boards?

I know this probably should go some where else but it would be interesting to get feedback on this

hullaballoo

This is nothing like an official standpoint, because I haven't heard anything from anyone to clarify.

But. It looks like the auditors said, boards.ie is only worth approximately a quarter of the valuation you gave it. It's common enough when shares are bought in a company.

Basically, daft came along and said, we'll offer you, say, 0.1x for 10% of your shares. That would value boards.ie at x, but this isn't the case because the shares would be sold at a premium, otherwise, there would be no profit for boards.ie from the sale. The auditors of daft.ie came along this year and said, we can't see where the value is coming from because the revenue streams are not apparent. Thus, they put a (somewhat nominal) value of 0.25x on boards.ie.

It's pretty hard-line accounting if it doesn't take intangible assets into account - brand name, 'customer' loyalty etc.

In any event, I cannot say that it has any impact on boards.ie absent further investment goals, of which, there are none to the best of my knowledge.

AckwelFoley

Id imagine it has little impact if my understanding of what daft.ie's "involvment" here is.

They've invested money here. DeV's Rich. They are still a seperate company -and have a significant financial interest in this place

Darragh

Keansr, this news has no impact on Boards.ie. As Hullaballoo has pointed out, this is purely an exercise in Accounting, and is a comment on Daft.ie's financial statement, not on that of Boards.ie.

Boards.ie is fine.

I emailed Eamonn Fallon, CEO of Daft.ie today and he said this.

If you are chatting to anyone you can tell them that Daft are still very happy with their investment in boards.

The write-down is purely best practice accounting and does not affect the future of boards.ie in any way.

Our investment in boards is for the long term and we are very happy with the development of the site over the last 12 months.

I trust this answers your question. For us here in the office, it's still systems go.

Thanks for the interest,

Darragh

DeVore

I'm rich??! Really? I can stop eating baked beans and wearing dodgy puffer jackets? Coooooool.

DeV.

DeVore

Actually I should give a more serious answer. It has absolutely no real world impact on us. Daft bought into Boards for a minority stake because they wanted to leave us doing what we do and just help us do it better, which the last 14 months has shown they have. We invested the money in people, Ross, Conor, Darragh, Dav and part-time DeV (I only work here part-time).

Daft got involved knowing that our revenue lines were "weak" (read, non existant before!) and they also knew it was a long term investment, because we made it very clear to them that we were a long term kinda group. You still dont see popups or expandables on the site. You dont see us selling our email list or spamming you guys. We are the tortoise (all the hares are dead if you hadn't noticed).

Boards can be all things to all people. The community gets to run its own system, the investors get a return albeit a long road and I get to see my site grow to impact my country, thats my *thing*. Everyone can have what they want from this but it will just take time... Daft understood that and its very much why we chose them as investors.

DeV.

Sparks

DeVore wrote: »

I can stop eating baked beans

Yes Please!

you try to tell someone discretely, but it never works, does it?

Spocker

Also in the Sunday Times on 13th Sept, post is here

randylonghorn

14 months ago lots of things in this country were considered to have a higher value ... in many cases, there was little real foundation for those valuations, as many quietly suspected and events were to prove. We had built our house(s) upon sand ...

It doesn't surprise me in the least that hard-nosed accountants in the current climate have marked down the value of the investment in Boards, which has a lot of intangible assets which are alien to the accountancy mind, especially now that they have been slapped out of bull into bear mode.

And I note that Daft is recording a very respectable increase in profit, despite the writedown ...

godtabh

Just wondering is all.

Makes no difference to the average user but just seemed like such a big hit

Earthhorse

DeVore wrote: »

We are the tortoise (all the hares are dead if you hadn't noticed).

Apart from Daft, right? Right?!?

:eek:

AckwelFoley

DeVore wrote: »

I'm rich??! Really? I can stop eating baked beans and wearing dodgy puffer jackets? Coooooool.

DeV.

Howard Hughes? Is that you?