RNS Number:0892B
Advance Visual Communications PLC
12 September 2002
Chairman's Statement
Preliminary results for the year ended 4 July 2002
Background
These past twelve months have proved to be a very difficult time for your
Company. The market for Internet related companies has continued to decline
against a backdrop of World events and the ending of the dotcom boom. In
November last year the Board made the strategic decision to close or sell the
Group's operations in France, Germany and Switzerland. The events leading up to
this decision were detailed in the Interim report of the Company for the six
months ended 31st December 2001. The Group entered 2002 with a much smaller,
focussed and more flexible business, employing less than 30 staff in Bradford
and London. Your Board sought to safeguard the future of the Company by focusing
upon the existing UK business streams, improving sales, further reducing costs
and thus move the Group towards profitability. Despite the ongoing cost
reductions we achieved in the early part of the year, the marketplace for the
Group deteriorated significantly, revenues failed to stabilise and the essential
contract wins that I referred to in the Interim Report were not achieved. The
pipeline of order enquiries, upon which so much effort was placed, failed to
translate into tangible business.
Against this background on 4th July 2002, your Board reluctantly concluded that
the Group no longer had a viable business to run due to the levels of sales
enquiries being achieved and decided to withdraw support for the two remaining
trading subsidiaries, Advance Digital Productions Ltd and Advance London Ltd.
Both these companies have subsequently appointed a liquidator. The AVC Group is
their largest creditor and does not expect to make any material recovery.
Results
Revenues for the 12 months ended 4 July 2002 were #1,081,102 against sales for
the previous 12 months of #2,053,783. This is a 47% decline, which reflects the
European closure during the first half of the year and a fundamental reduction
in UK revenues from #1,152,284 to #682,838 (41%) during the year. Revenues from
Digital Video, Multimedia and Events, which were traditionally stable parts of
the AVC business, declined rapidly.
Losses for the year were #4,436,058 compared with a loss of #2,616,194 for the
previous 12 months. More than #2,318,000 of the loss incurred in the period was
associated with the write-off of goodwill, primarily relating to the European
activities that were closed in November. Loss on disposal of fixed assets
accounted for a further #331,000.
Future Prospects
Your Company is now effectively a cash shell with cash and liquid resources of
approximately #250,000. As such your Board will continue to consider the
immediate future and strategic direction for the Group and is assessing various
appropriate opportunities. The running costs have been cut to a minimum and the
Company has no full time employees, other than the Finance Director. In light
of the poor IPO market in the UK, your Board is seeking to identify good quality
businesses, which in more normal market conditions might have been seeking to
float on the Stock Exchange. A reverse acquisition of such a business by AVC
could prove to be a more certain route for them to achieve this objective and
may offer the route for your Board to create value over the longer term for
shareholders.
I am deeply disappointed that this Company has failed to deliver for
shareholders the vision that was put forward at the time of flotation in
November 2000. It is of little solace that the world has changed greatly since
then and that many companies in this sector find themselves in a similar
position. The Board is committed to doing its utmost to find a way to restore
some value to the Group's shareholders.
Barclay Douglas
Chairman of the Board
11 September 2002
Advance Visual Communications PLC
Consolidated Profit and Loss Account
Note 12 months ended 12 months ended
4 July 2002 30 June 2001
# #
Turnover
Continuing operations - -
Discontinued operations 1,081,102 2,053,783
1,081,102 2,053,783
Operating loss
Continuing operations - -
Discontinued operations (1,795,915) (2,655,314)
(1,795,915) (2,655,314)
Loss on disposal and liquidation of subsidiaries (2,649,907) -
Interest receivable (bank interest) 31,750 94,520
Interest payable and similar charges (10,179) (17,218)
Loss on ordinary activities before taxation (4,424,251) (2,578,012)
Tax on loss on ordinary activities (11,807) (38,182)
Loss on ordinary activities after taxation for (4,436,058) (2,616,194)
the financial year withdrawn from reserves
Basic loss per ordinary share 2 (2.8)p (2.0)p
Diluted loss per ordinary share 2 (2.8)p (2.2)p
Consolidated Balance Sheet
as at 4 July 2002 As at As at
4 July 2002 30 June 2001
Fixed assets # #
Intangible - 2,102,457
Tangible 858 431,668
858 2,534,125
Current assets
Stocks - 176,452
Debtors 12,925 404,635
Cash at bank and in hand 410,785 2,287,166
423,710 2,868,253
Creditors: amounts falling due within one year (58,219) (693,188)
Net current assets 365,491 2,175,065
Total assets less current liabilities 366,349 4,709,190
Creditors: amounts falling due after more than
one year - (39,408)
Net Assets 366,349 4,669,782
Capital and reserves
Called up share capital 1,615,755 1,566,255
Share premium account 6,634,893 6,634,893
Merger reserve 1,645,924 1,562,799
Other reserves - (25,721)
Profit and loss account (9,530,223) (5,068,444)
Equity shareholders funds 366,349 4,669,782
Consolidated Cash Flow Statement
Note 12 months ended 12 months ended
4 July 2002 30 June 2001
# #
Net cash outflow in respect of discontinued 3 (1,692,718) (2,506,448)
activities
Returns on investments and servicing of finance
Interest received 31,750 94,520
Interest element of finance lease rentals (10,179) (17,218)
Net cash inflow from returns on investments and
servicing of finance 21,571 77,302
Purchase of tangible fixed assets (41,480) (186,442)
Disposal of tangible fixed assets - 38,044
Net cash outflow from capital expenditure
and financial investment (41,480) (148,398)
Taxation
Overseas taxation paid (11,807) -
Acquisitions and disposals
Purchase of subsidiary undertaking (20,856) (36,049)
Net cash acquired with subsidiary/business 2,448 16,455
Net cash outflow from acquisitions and disposals (18,408) (19,594)
Net cash outflow before financing (1,742,842) (2,597,138)
Financing
Capital element of finance lease rentals (54,384) (127,546)
Repayment of long term loans (81,155) (69,000)
Issue of ordinary share capital 2,000 5,758,346
Expenses paid in connection with issue of shares - (664,048)
Net cash (outflow) / inflow from financing (133,539) 4,897,752
(Decrease)/Increase in cash (1,876,381) 2,300,614
Statement of Total Recognised Gains and Losses 12 months ended 4 12 months ended
July 2002 30 June 2001
# #
Loss for the financial year (4,436,058) (2,616,194)
Currency translation differences - (25,270)
Total recognised gains and losses relating to the
year (4,436,058) (2,641,464)
Notes on the Preliminary Results
1. The financial information incorporated in this announcement does
not constitute full statutory accounts within the meaning of the Companies Act
1985. Full accounts for the year ended 30 June 2001 upon which Deloitte &
Touche have given an unqualified audit report have been filed with the Registrar
of Companies. Full accounts for the year ended 4 July 2002 upon
which Deloitte & Touche have given an unqualified audit report will be filed
with the Registrar of Companies in due course. Neither report contained
statements under Section 237 (2) or (3) of the Companies Act 1985.
2. The calculation of basic loss per share is based on the
loss attributable to shareholders and the weighted average number of ordinary
shares in issue of 160,683,819 (2001: 133,465,550).
FRS 14 requires presentation of diluted earnings per share when a company could
be called upon to issue shares that would decrease net profit or increase net
loss per share. For a loss making company with outstanding share options, net
loss per share would only increase by the exercise of out-of-the-money options.
Since it is inappropriate to assume that the option holders would act
irrationally and there are no other diluting future share issues for the current
year, diluted loss per share equals basic loss per share.
3. Reconciliation of operating loss to
net cash outflow from discontinued activities
12 months ended 12 months ended
4 July 2002 30 June 2001
# #
Operating loss (1,795,915) (2,655,314)
Loss on disposal and liquidation of subsidiaries (2,649,907) -
Loss before interest and tax (4,445,822) (2,655,314)
Depreciation 160,993 185,051
Amortisation of intangible assets 2,322,299 101,430
Provision against investment - 25,000
Loss on disposal of tangible fixed assets 331,228 25,556
Decrease/(Increase) in stock 176,452 (109,526)
Decrease in debtors 408,634 125,531
(Decrease) in creditors (552,000) (152,558)
Non cash movement (94,502) (51,618)
Net cash outflow in respect of discontinued
activities (1,692,718) (2,506,448)
4. Reconciliation of movements in
shareholders' funds
12 months ended 12 months ended
4 July 2002 30 June 2001
# #
Loss for the financial year (4,436,058) (2,616,194)
Issue of shares 132,625 6,040,500
Expenses paid in connection with issue of shares - (664,048)
Exchange rate movement on other reserves - (25,270)
Transfer to profit/loss of lapsed warrant - (3,500)
instrument
Net (reduction)/addition to shareholders funds (4,303,433) 2,731,488
Opening shareholders funds 4,669,782 1,938,294
Closing shareholders funds 366,349 4,669,782
5. The Registered Office of the Company is Units 3 and 4
Colbeck Row Business Park, Birstall, Batley, WF17 9NR. Copies of the Annual
Report and Accounts may be obtained from the Company Secretary at this address.
6. This announcement has been prepared on the basis of the
accounting policies as stated in the previous years financial statements.
The group has adopted Financial Reporting Standards No 19 Deferred Tax which
became applicable during the year. This has had no effect on the reported
results.
In addition, these financial statements have been prepared under the going
concern basis.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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