RNS Number:0750J
e-primefinancial PLC
21 March 2003
e-primefinancial plc
Interim results for the six months ended 31 December 2002
Chairman's Statement
Introduction
The Board has taken the decision to extend the accounting reference date of the
Company in respect of the previous accounting period (ended 31 December 2002) to
30 June. Infinity Financial Holdings Corporation, (the "Subsidiary Company"
formerly known as e-primefinancial (USA), Inc.), which is wholly owned by
e-primefinancial plc (the "Company"), is in the process of raising US$25-30
million in the United States to fund the capital requirement of the proposed
bank, which, if successful, will result in the Company ceasing to have a
controlling interest in the Subsidiary Company. Consequently, the Board believes
the impact of this on the Company's results would be better illustrated by
extending the current accounting reference period.
The Company has prepared half-yearly results in respect of the six month period
ending 31 December 2002, which are presented here, and will publish audited
statutory accounts for the eighteen month period ending 30 June 2003. The
results for the six month period ended 31 December 2002, incorporate the results
of the Subsidiary Company.
Results for the Period
The group incurred a loss for the period, after taxation, of #783,820 after
receiving interest of #293,522 and having paid administrative expenses of
#1,131,028. The loss per share was 0.23p and 0.20p on a fully diluted basis. The
group had cash balances of #10,779,734 at the period end after having returned
to shareholders and warrantholders #5,358,756 as a consequence of a Tender Offer
made to them during the fourth quarter last year.
Review of Activities
Consistent with previous announcements made by the group, the Board continues to
pursue the banking investment opportunity in the United States whilst at the
same time considering other business proposals and investment opportunities.
As stated above, the Subsidiary Company is in the process of raising US$25-30
million in the United States to fund the capital requirement of the proposed
bank. Although there has been good interest from a number of potential quality
investors, the minimum funding requirement has not yet been reached. This
process has taken longer than we had hoped in what are difficult market
conditions and, therefore, it is prudent to question whether the Subsidiary
Company will ultimately be successful in raising the requisite funds.
Furthermore, final regulatory approval from the Federal Deposit Insurance
Corporation and the Federal Reserve, whilst at an advanced stage of review, has
not yet been received. The Office of the Comptroller of the Currency's
conditional US banking licence approval is conditional, inter-alia, on receiving
approval from the other regulators and the successful raising of the funds and
will expire if these, and the other conditions contained in the conditional
approval letter, are not satisfied by 20 May 2003.
The Board has increased its focus on other opportunities and proposals and
believes that depressed market conditions will continue to create interesting
investment prospects for parties with available cash resources. The Company is
in a strong position to benefit from such circumstances.
On 20 December 2002 the High Court approved the reduction of the Company's share
premium account, thereby, enabling the Tender Offer, announced on 4 November
2002, to proceed. Furthermore, on 6 February 2003 the Company purchased for
cancellation a further 700,000 ordinary shares. The Company currently has
212,492,116 ordinary shares and 90,000,000 warrants in issue.
The Board continues to monitor closely its costs and has recently taken action
to reduce its recurring cost base. It also anticipates reducing this further to
put the group in a positive cash flow position, net of interest income at
current interest rates, by the end of April. The Board is looking to consolidate
its share capital to reduce the cost of administering its large shareholder base
and a proposal will be put to shareholders for their consideration as soon as
possible.
Lance O'Neill
Chairman 21 March 2003
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Unaudited Unaudited Audited
Six months ended Six months ended Year ended
31 December 2002 30 June 2002 31 December 2001
# # #
Turnover from continuing operations 0 0 0
Cost of sales 0 0 0
--------------- --------------- ---------------
Gross profit 0 0 0
Administrative expenses (1,131,028) (1,094,546) (3,134,629)
--------------- --------------- ---------------
Operating loss (1,131,028) (1,094,546) (3,134,629)
Profit/(loss) on sale of fixed assets 53,686 (636) (256)
--------------- --------------- ---------------
Loss on ordinary activities before interest (1,077,342) (1,095,182) (3,134,885)
Interest receivable and investment income 293,522 310,638 894,204
--------------- --------------- ---------------
Loss on ordinary activities before taxation (783,820) (784,544) (2,240,681)
Tax on ordinary activities (note 2) 0 0 26,493
--------------- --------------- ---------------
Retained loss for the period (783,820) (784,544) (2,214,188)
========= ========= =========
Loss per Ordinary 0.5p share (note 3)
- basic 0.23p 0.22p 0.63p
- diluted 0.20p 0.20p 0.50p
All transactions are derived from continuing operations.
CONSOLIDATED BALANCE SHEET
Unaudited Unaudited Audited
31 December 2002 30 June 2002 31 December 2001
# # #
Fixed assets
Tangible fixed assets 229,664 514,783 712,860
Current assets
Debtors 298,495 190,465 177,228
Cash at bank and in hand 10,779,734 16,801,018 17,444,076
--------------- --------------- ---------------
11,078,229 16,991,483 17,621,304
Creditors: amounts falling due within one year (255,390) (277,996) (278,823)
--------------- --------------- ---------------
Net current assets 10,822,839 16,713,487 17,342,481
--------------- --------------- ---------------
Total assets less current liabilities 11,052,503 17,228,270 18,055,341
========= ========= =========
Capital and reserves
Called up share capital (note 4) 1,065,961 1,750,000 1,750,000
Share premium account (note 4) 6,830,702 19,755,702 19,755,702
Capital redemption reserve (note 4) 709,039 0 0
Profit and loss account (note 4) 2,603,080 (4,142,992) (3,358,448)
Foreign exchange translation (note 4) (156,279) (134,440) (91,913)
--------------- --------------- ---------------
11,052,503 17,228,270 18,055,341
========= ========= =========
CONSOLIDATED CASH FLOW STATEMENT
Unaudited Unaudited Audited
Six month period Six month period Year ended
31 December 2002 30 June 2002 31 December 2001
# # #
Net cash outflow from continuing operating activities (1,021,992) (949,472) (2,917,764)
Returns on investments and servicing of finance
Interest received 293,522 310,638 894,204
Buy Back
Share and warrant buy-back including costs (5,470,108) 0 0
Taxation
UK corporation tax 0 0 26,493
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (7,808) (4,224) (446,890)
Receipts from sale of fixed assets 85,102 0 12,449
--------------- --------------- ---------------
Net cash inflow/(outflow) from capital expenditure 77,294 (4,224) (434,441)
--------------- --------------- ---------------
Financing
Issue of shares net of costs 100,000 0 0
--------------- --------------- ---------------
(Decrease)/increase in cash in the period (6,021,284) (643,058) (2,431,508)
========== ========== ==========
Reconciliation of operating loss to net
cash outflow from operating activities
Operating loss (1,131,028) (1,094,546) (3,134,629)
Depreciation and amortisation charged 246,208 181,100 578,968
Foreign exchange revaluation adjustments (6,536) (21,962) (89,068)
(Increase)/Decrease in trade debtors (108,030) (13,237) 51,448
Increase/(Decrease) in trade creditors (22,606) (827) (323,642)
(Decrease)/Increase in provisions 0 0 (841)
--------------- --------------- ---------------
Net cash outflow from operating activities (1,021,992) (949,472) (2,917,764)
========== ========== ==========
NOTES
1. Basis of preparation
The interim report for the six months ended 31 December 2002 is
unaudited and does not constitute statutory accounts within the meaning
of section 240 of the Companies Act 1985. It has been prepared under the
historical cost convention and on a basis consistent with the accounting
policies for the year ended 31 December 2001.
The financial information relating to the year ended 31 December 2001
has been extracted from the statutory accounts, which have been filed
with the Registrar of Companies. The auditors report on those financial
statements was unqualified and did not contain a statement under section
237 (2) of the Companies Act 1985.
2. Taxation
No charge to corporation tax for the period has been made due to the
expected tax losses available.
3. Loss per share
Basic and diluted loss per share are presented in accordance with FRS14
"Earnings per share" based on the loss for the period of #783,820 (six
months ended 30 June 2002 - #784,544; year ended 31 December 2001 -
#2,214,188) and the following weighted average number of ordinary shares.
Six months ended Six months ended Year ended
31 December 2002 30 June 2002 31 December 2001
Weighted average number of shares
Basic 340,161,357 350,000,000 350,000,000
Dilutive effect of share options/warrants 46,136,943 50,211,268 91,137,339
--------------- --------------- ---------------
Weighted average number of shares - diluted 386,298,300 400,211,268 441,137,339
========= ========= =========
4. Reconciliation of shareholders funds and movement on reserves
Share Share Capital Profit and Foreign Total
capital premium Redemption loss currency
Reserve translation
# # # # # #
Balance at 1 July 2002 1,750,000 19,755,702 0 (4,142,992) (134,440) 17,228,270
Loss for the period 0 0 0 (783,820) 0 (783,820)
New shares issued 25,000 75,000 0 0 0 100,000
Capital reduction 0 (13,000,000) 0 13,000,000 0 0
Share buy back including (709,039) 0 709,039 (5,470,108) 0 (5,470,108)
costs
Foreign exchange translation 0 0 0 0 (21,839) (21,839)
----------- --------------- --------------- --------------- --------------- ---------------
Balance at 31 December 2002 1,065,961 6,830,702 709,039 2,603,080 (156,279) 11,052,503
========= ========= ========= ========= ========= =========
Enquiries:
Nigel Duxbury, COO and CFO, e-primefinancial plc 020 7839 4132
Mark Percy, Seymour Pierce Limited 020 7648 8700
This information is provided by RNS
The company news service from the London Stock Exchange
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