Simply Zesty, the Dublin-headquartered social media agency which was acquired by UTV last year, had a turnover of £1.15m in the nine months to the end of December 2012 and a profit of £48,000 during the same period according to the annual report of UTV which was published this week.
In March 2012, UTV announced that it was acquiring the fledging agency, which was founded by Niall Harbison, for a figure in the region of £5m, subject to certain earn-out targets being met over the coming years. UTV’s annual report states that £1.67m of this has already been paid out in cash while it has provided for an additional £3m in deferred acquisition contingencies in its 2012 accounts. Notes accompanying the accounts also reveal that at the time of the sale Simply Zesty had net assets amounting to just £411,000 which included debtors of £354,000 and a value of £268,000 which was placed on client relationships. This meant that the goodwill element of the purchase price was a hefty £4.26m, according to the accounts.
Like Simply Zesty, UTV’s 12 month accounting period ends on December 31st of each year and notes in the annual report point out that “If the combination had taken place at the beginning of the year, Simply Zesty would have contributed a loss before tax in the period of £52,000 to the Group and revenue of £1,445,000.”
Separate accounts for Simply Zesty, which are filed with the Companies Office in Dublin, show exceptional growth in the two years leading up to the sale. Turnover, for example, shot up from €490,542 in 2010 to €1.29m in 2011 while a loss of €20,890 was turned into an after tax profit of €103,770 over the same period.
The UTV annual report also points out that since January of this year Simply Zesty has now been operating as a fully fledged digital agency after a decision was taken to merge the creative web development functions of Tibus, its digital subsidiary, with the social media functions of Simply Zesty. With offices in Dublin, Belfast and London, the report also notes that around 20% of Simply Zesty’s turnover is now generated from international clients, including UTV subsidiaries in the UK and Northern Ireland.
