RNS Number:7026R
Voss Net PLC
05 November 2003
VOSS NET PLC
("the Group" or "the Company" or "Voss Net")
Preliminary Announcement of Results for the Year Ended 31 December 2002
Details of Proposed Company Voluntary Arrangement
Chairman's Statement
Trading in the Company's shares were suspended on 27 May 2003 at the
Company's request, following a major payment dispute with the London
College which was responsible for paying the Group for its London
Learndirect operations.
The Group's training business, carried out through its subsidiary Voss
Net Training Limited, accounted for nearly all the Group's income and
the vast majority of that derived from its London operations. Issues
surrounding payments in London surfaced during May 2003. We were assured
by a director of the London College as late as 22 May 2003 that
outstanding invoices payments would be honoured, but were then told on
23 May 2003 by Ufi Limited, the Government funded company that operates
Learndirect, that they had appointed independent auditors to investigate
the situation. Immediately thereafter, we were informed that the College
would make no further payment until the conclusion of that
investigation, which left us with no alternative but to request
suspension of dealings in the Company's shares.
All of Voss Net Training's invoices were factored, including those
relating to our smaller operation in Surrey. The factors understandably
would not release any cash relating to our London or Surrey operations
and this meant that the Group had no cash flowing into the business from
that time. We had no choice but to make all our training staff redundant
shortly thereafter and, as a result, the training business effectively
ceased.
The factoring company who were owed some #192,000, commenced legal
action against the College and in October 2003 received a payment of
#142,000 in full and final settlement of their claims which effectively
cleared their position. The factoring company is shortly to reassign the
remaining outstanding debts back to Voss Net Training Limited.
Following the suspension of the Company's shares, your directors ensured
that no further payments were made by the Group and decided that the
only way forward for the Group would be to seek a new business to be
injected into the Group. To that end, efforts were made to identify
parties who could provide short term financial assistance to the Group
and help in finding a new business for your Company, whilst at the same
time providing the best way forward for the Group's employees, creditors
and shareholders.
The Way Forward
As announced on 10 October 2003, your Company entered into an agreement
with Leo Knifton and Nigel Weller and their company Great Monument
Capital Limited whereby they would provide reasonable financial
assistance to the Company to allow the Company and its subsidiaries to
enter into Company Voluntary Arrangements ("CVA"). Meetings to approve
these CVAs are due to be held on the same day as the Company's Annual
General Meeting and if these arrangements are approved, Messrs Knifton
and Weller will join the board of the Company. I will be retiring from
the board following the Company's Annual General Meeting.
It is anticipated that trading in the Company's shares on AIM will be
restored as a result of these arrangements. Messrs Knifton and Weller
will be seeking a new business activity for Voss Net so as to provide a
new future for your Company.
In consideration of the assistance of Great Monument Capital in
effecting the CVA, Voss Net shall issue such number of new Voss Net
shares to Great Monument Capital as will equal, when aggregated with the
shares arising on conversion of loans provided by them, to 29.9% of the
then issued share capital of the Company.
Trading and results
Prior to the payment dispute, the Company's training business had
continued to show satisfactory progress. Trading results were largely
overshadowed by the need to make significant provisions against the
recovery of the outstanding debt from the London college and for 2002,
the Group reported a pre tax loss of #321,338 on turnover of #1,131,739.
Sigma Freight Systems made a small operating profit for 2002. The
management of that company have made an offer to buy that company for
#21,000, coupled with waiver of a sum of #42,000 due to Sigma from
another group company. It is anticipated that the offer will be accepted
given the Group's circumstances and, accordingly, the value of the
investment in Sigma has been written down to the offer amount in the
2002 accounts. The directors cannot recommend payment of any dividend.
We believe that the plans for the CVA and the appointment of new
directors is the best way forward for the Company and will provide a
more satisfactory future for your company.
Barry O'Connell
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2002
2002 2001
# #
TURNOVER 1,131,739 921,368
---------- ----------
Continuing operations 1,131,739 899,477
Discontinued operations - 21,891
---------- ----------
Cost of sales (277,184) (556,858)
---------- ----------
GROSS PROFIT 854,555 364,510
Net operating expenses (882,281) (1,449,862)
---------- ----------
OPERATING LOSS BEFORE EXCEPTIONAL ITEMS (27,726) (1,085,352)
---------- ----------
Continuing operations (27,726) (1,099,374)
Discontinued operations - 14,022
---------- ----------
Goodwill written off (162,500) -
Hire purchase creditor written off - 62,547
Long-term contract costs overprovision - 40,000
Loss on sale of business and scrapping of - (63,773)
defunct computer equipment
Provision for doubtful debtors (127,280) -
OPERATING LOSS AFTER (317,506) (1,046,578)
EXCEPTIONAL ITEMS
Interest receivable and similar income 367 -
---------- ----------
(317,139) (1,046,578)
Amounts written off investments - (10,000)
---------- ----------
(317,139) (1,056,578)
Interest payable and similar charges (4,199) (630)
---------- ----------
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (321,338) (1,057,208)
Tax on loss on ordinary activities 18,000 18,000
---------- ----------
LOSS FOR THE FINANCIAL YEAR AFTER TAXATION (303,338) (1,039,208)
---------- ----------
DEFICIT FOR THE YEAR FOR THE GROUP (303,338) (1,039,208)
---------- ----------
Loss per share - basic (note 2) (0.90)p (13.26)p
---------- ----------
CONSOLIDATED BALANCE SHEET
31 DECEMBER 2002
2002 2001
# #
FIXED ASSETS
Intangible assets - 162,500
Tangible assets 5,541 27,774
---------- ----------
5,541 190,274
---------- ----------
CURRENT ASSETS
Debtors 235,635 115,668
Cash at bank and in hand 66,556 68,993
---------- ----------
302,191 184,661
CREDITORS
Amounts falling due within one year (404,846) (400,135)
---------- ----------
NET CURRENT LIABILITIES (102,655) (215,474)
---------- ----------
TOTAL ASSETS LESS CURRENT LIABILITIES (97,114) (25,200)
---------- ----------
CAPITAL AND RESERVES
Called up share capital 657,710 397,960
Share premium 3,803,755 3,832,081
Profit and loss account (4,558,579) (4,255,241)
---------- ----------
SHAREHOLDERS' FUNDS
(including non-equity interests) (97,114) (25,200)
---------- ----------
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2002
2002 2001
# #
Net cash outflow
from operating activities (303,274) (141,977)
Returns on investments and
servicing of finance (3,832) (630)
Taxation 18,000 18,000
Capital expenditure (10,775) (78,258)
Acquisitions and disposals - 48,000
---------- ----------
(299,881) (154,865)
Financing 297,427 115,413
---------- ----------
Decrease in cash in the period (2,454) (39,452)
---------- ----------
Reconciliation of net cash flow
to movement in net funds
Decrease in cash in the period (2,454) (39,452)
Cash (inflow)/outflow
from (increase)/decrease in
debt and lease financing (66,003) 9,586
---------- ----------
Change in net funds resulting
from cash flows (68,457) (29,866)
Hire purchase creditor write off - 62,548
---------- ----------
Movement in net funds in the period (68,457) 32,682
Net funds at 1 January 68,993 36,311
---------- ----------
Net funds at 31 December 536 68,993
---------- ----------
NOTES
1. LOSS PER SHARE
The basic loss per share is calculated by dividing the loss for the
financial year by the weighted average number of ordinary shares in
issue during the financial year of 33,758,030 (2001 - 7,837,431) and
detailed:-
2002 2001
Basic loss per share (after exceptional items) (0.90p) (13.26p)
Goodwill Written Off 0.48p -
Hire purchase creditor write off - (0.80p)
Long-term contract costs overprovision - (0.51p)
Loss on sale of business and scrapping of defunct - 0.81p
computer equipment
Provision for doubtful debtors 0.38p -
--------- --------
Adjusted loss per share (excluding exceptional (0.04p) (13.76p)
items)
2. Financial Information
The financial information contained in this preliminary announcement
of audited results does not constitute the group's statutory
accounts for the years ended 31 December 2002 or 31 December 2001.
The accounts for the year ended 31 December 2001 have been delivered
to the Registrar of Companies.
The statutory accounts for the years ended 31 December 2002 and 31
December 2001 have been reported on by the company's auditors. The
reports on those accounts were unqualified and they did not contain
any statement under section 237 (2) or (3) of the Companies act
1985.
The accounts for the year ended 31 December 2002 have been posted to
shareholders and will be delivered to the Registrar of Companies
after they have been laid before the Company in a general meeting
convened for 24 November 2003 at 11.30 am at the offices of Antony
Batty & Co, New House, Suite 24, 67-68 Hatton Garden, London EC1N
8JY. Copies of the accounts will be available from the offices of
Antony Batty at the address metoined above and from the registered
office of the Company at 11 Marlborough Place, Brighton, East Sussex
BN1 1UB.
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