RNS Number:1044A
Capital Ideas PLC
11 July 2007
Capital Ideas plc
("Capital Ideas" or the "Company")
Preliminary Statement of Final Results
for the year ended 30 April 2007
Chairman's statement
Key Points
* Pre-tax profit of #118,000 (2006: #301,000)
* Four new equity investments made during the period - total investments now
stand at 7
* Successful disposal of investment in Traction Technology Plc
* Consolidated Vending Plc was admitted to AIM and the Company's investment
is trading at a premium to book value
Results
I am pleased to report on the trading for the year ended 30 April 2007.
During the year a pre-tax profit of #118,000 (2006: #301,000) has been reported
and net asset value increased 28% over the period to #506,000 (2006: #394,000).
Capital Ideas plc acquired new equity investments in four companies during the
period under review. During the first half of the year we invested in
Towerinput Ltd, Turnaround Capital plc and Traction Technology plc. During the
second half we acquired an interest in Smart Implant Holdings plc, a
manufacturer and distributor of breast implants and were also granted an option
to acquire equity in Revo World Ltd, an exclusive global private members club.
In addition, the Company disposed of its investment in Traction Technology plc
("TT"), following TT's admission to AIM.
The Directors have reviewed the portfolio of investments (which now totals seven
investments following the four new investments made during the year). Two
companies - Forknall Limited and Miller Consulting Plc in which the Company had
made small investments (#21,000 and #50,000 respectively) both went into
liquidation during the period and these investments have been written off. In
addition, a further equity investment in Eastern European Ventures plc was
written down by #20,000 as the Directors believe there has been a permanent
diminution in its carrying value.
Progress
The Company is pleased with its progress during the year.
One of the Company's equity investments is a holding in Consolidated Vending plc
("CV plc"). CV plc was admitted to trading on AIM in December 2006 and our
holding is currently trading at a premium to its net book value of #30,000.
As already mentioned above, Traction Technology plc, a hybrid engine
manufacturer, was also admitted to trading on AIM in December 2006 and the
Company disposed of its shareholding in TT in December 2006 at a profit.
During the period under review, the Company has also acquired investments in a
number of, what the Directors' believe to be, exciting growth companies.
The Directors continue to review a number of investment opportunities.
Renwick Haddow
Chairman
For further information please contact:
Renwick Haddow, Capital Ideas plc Tel: +44 207 623 3345
David Youngman, WH Ireland Limited Tel: +44 161 832 2174
Profit and loss account
for the year ended 30 April 2007
Note Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Turnover 2 255 438
Cost of sales (11) (46)
Gross profit 244 392
Administrative expenses (42) (100)
Operating profit 2, 3 202 292
Loss on disposal of assets 6 (91) (4)
Interest payable and similar charges - -
Interest receivable and similar income 7 7 13
Profit on ordinary activities before taxation 3 118 301
Tax on profit on ordinary activities 8 (10) (34)
Retained profit for the financial period 16 108 267
Earnings per ordinary share
Basic and fully diluted 9 0.05p 0.12p
None of the Company's operations were acquired or discontinued during the
current and previous years.
Statement of total recognised gains and losses
for the year ended 30 April 2007
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Profit for the financial year 108 267
Unrealised gains on revaluation of investments 4 -
Total recognised gains and losses relating to the 17 112 267
year
Balance sheet
at 30 April 2007
Note 2007 2006
#000 #000
Fixed assets
Investments 10 491 164
Current assets
Debtors 11 84 281
(of which #nil (2006: #108,000) falls due after more
than one year)
Cash at bank and in hand 3 16
87 297
Creditors: amounts falling due within one year 12 (71) (67)
Net current assets/(liabilities) 16 230
Total assets less current liabilities 507 394
Provisions for liabilities 14 (1) -
Net assets/(liabilities) 506 394
Capital and reserves
Called up share capital 15 1,410 1,410
Share premium account 16 1,093 1,093
Revaluation reserve 16 4 -
Profit and loss account 16 (2,001) (2,109)
Equity shareholders' funds 17 506 394
Cash flow statement
for the year ended 30 April 2007
Year ended Year ended
30 April 30 April
Note 2007 2006
#000 #000
Net cash (outflow)/inflow from operating activities 18 (23) 37
Returns on investments and servicing of finance 19 7 13
Capital expenditure and financial investments 19 3 (164)
Acquisitions and disposals 19 - (4)
Cash outflow before financing (13) (118)
Financing 19 - 93
(Decrease) in cash in the period 19 (13) (25)
Reconciliation of net cash flow to movement in net funds
for the year ended 30 April 2007
Year ended Year ended
30 April 30 April
Note 2007 2006
#000 #000
(Decrease) in cash in the period (13) (25)
Repayment of capital element of finance leases - -
Change in net debt resulting from cash flows (13) (25)
Other - -
Movement in net debt in the period (13) (25)
Net funds at the start of the period 16 41
Net funds at the end of the period 20 3 16
Notes
(forming part of the financial statements)
1. Accounting policies
Basis of accounting
The Company's financial statements have been prepared under the historical cost
convention and in accordance with applicable accounting standards.
Consolidation
The company has one dormant subsidiary, see note 10. Due to the immateriality
of the figures this subsidiary has not been consolidated as its inclusion would
not be material for providing a true and fair view of the financial statements
for the Group as a whole.
Turnover
Turnover represents the profit/loss achieved on the part or full disposal of
current asset investments made.
Fixed asset investments
Fixed asset investments are valued at the fair value as considered by the
directors, with any gains or losses on either the cost of investment or the
previous period's fair value being recognised in the statement of total
recognised gains and losses.
Deferred taxation
The charge for taxation is based on the profit or loss for the period and takes
into account taxation deferred because of timing differences between the
treatment of certain items for taxation and accounting purposes.
Deferred tax is recognised in respect of all timing differences that have
originated but not reversed at the balance sheet date where transactions or
events that result in an obligation to pay more, or a right to pay less, tax in
the future have occurred at the balance sheet date, with the exception that
deferred tax assets are recognised only to the extent that the directors
consider that it is more likely than not that there will be suitable taxable
profits from which the future reversal of the underlying timing differences can
be deducted.
Deferred tax is measured on a non-discounted basis at the tax rates that are
expected to apply in the periods in which timing differences reverse, based on
tax rates and laws enacted or substantially enacted at the balance sheet date.
2. Segmental analysis
The operating profit for the years ended 30 April 2007 and 30 April 2006 are
entirely derived from operations within the UK and a single class of business.
Hence, no separate segmental analysis has been prepared.
Notes (continued)
3. Profit on ordinary activities before taxation
Profit on ordinary activities before taxation is stated after charging:
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Auditors' remuneration:
Audit fees 4 4
Other fees paid to the auditors 2 -
4. Directors' emoluments
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Aggregate emoluments 1 51
1 51
None of the directors have accrued retirement benefits during the period to 30
April 2007 (2006: None).
5. Employee costs
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Wages and salaries 1 51
Social security costs - -
Pension costs - -
Total 1 51
There were no employees of Capital Ideas plc in either the current or previous
year other than the directors.
Notes (continued)
6. Loss on disposal assets
During the period the Company wrote off #91,000 (#51,000 investments and #40,000
debtors) following the liquidation of, or considered permanent diminution in
value of, three companies in which investments were held.
Upon disposal of The International Academy plc on 22 August 2003, it was agreed
that the company would receive a deferred consideration based on the future
performance of The International Academy plc. During the year to 30 April 2006,
this consideration was renegotiated to a single sum of #50,000. This income was
off-set by a warranty claim by the purchaser of The International Academy plc
for #48,000 in respect of taxation, plus #6,000 in respect of professional fees
resulting from the claim, resulting in an overall loss of #4,000 for the year to
30 April 2006.
7. Interest receivable
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Interest receivable on bank deposits - 2
Interest receivable on loans 7 11
Interest receivable 7 13
8. Tax on loss on ordinary activities
a) Analysis of charge in the period
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Current tax:
UK Corporation tax 22 34
Overprovision in prior year (13) -
Total current tax (Note 8(b)) 9 34
Deferred tax:
Revaluation of fixed asset investments 1 -
10 34
b) Factors affecting the tax charge for the period Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Profit/(loss) on ordinary activities 118 301
Profit/(loss) on ordinary activities multiplied by standard rate of 22 90
corporation tax in the UK of 19% (year ended 30 April 2006: 30%)
Effects of:
Disallowed expenses and non-taxable income - 2
Taxable losses and excess charges brought forward - (58)
Overprovision of Corporation Tax in prior year (13) -
Current tax charge for the period (Note 8(a)) 9 34
9. Earnings per ordinary share
The calculation of basic earnings per share is based on profits of #108,000
(2006: Profit of #267,000) and ordinary shares of 236,130,555 (2006: 215,297,222
shares) being the weighted average number of ordinary shares in issue during the
period. The 0.9p deferred shares in issue do not have rights to either
dividends or the assets of the company and have therefore been discounted from
the weighted average calculation.
The profit for the period and the weighted average number of ordinary shares for
the purposes of calculating the fully diluted earnings per share are the same as
for the basic earnings per share calculation. This is because exercise of the
outstanding warrants that existed in the period would have no effect on the
calculated earnings per ordinary share and would therefore not be dilutive under
the terms of Financial Reporting Standard No. 22 (FRS 22). These warrants
ceased on 4 April 2007.
10. Investments
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Valuation as at 1 May 2006 164 -
Additions 377 193
Revaluations and write-offs (36) -
Disposals (14) (29)
Valuation as at 30 April 2007 491 164
Listed investments 30 -
Unlisted investments 461 164
491 164
The market value of the Listed investments at 30 April 2007 was #52,387 (2006:
#nil).
As at 30 April 2007, investments in which the Company held 20 percent or more of
the nominal value of any class of share capital are as follows:
Principal Class and percentage of shares
activity Registered in held and voting rights
Subsidiary undertaking
Leisure Ventures (UK) Limited Non trading England and Wales 100% ordinary
The reserves in this company are negligible.
11. Debtors
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Loans 16 195
Other debtors 10 70
Prepayments and accrued income 58 16
84 281
Included within the Loans debtor are amounts of #nil (2006: #108,000) which fall
due after more than one year.
12. Creditors: amounts falling due within one year
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Trade creditors 24 8
Accruals and deferred income 4 25
Corporation tax 43 34
71 67
13. Financial instruments
An explanation of the Group's objectives, policies and strategies for the role
of derivatives and other financial instruments in creating and changing the
risks of the Group in its activities can be found on pages 6 and 7. Disclosure
dealt with in this note excludes short-term debtors and creditors where
permitted by FRS 13.
Interest rate risk profile of financial assets
The interest rate risk profile of the Group's financial assets was as follows:
Fixed rate Floating rate Financial assets on
financial financial assets which no interest is
assets earned Total
Sterling #000 #000 #000 #000
As at 30 April 2007 - 3 16 19
As at 30 April 2006 195 16 - 211
Fixed rate financial assets comprise:
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
10% loan stock - 155
9% loan stock - 15
5% loan stock - 25
- 195
Floating rate financial assets comprise:
30 April 30 April
2007 2006
#000 #000
Special interest bank account 3 16
3 16
Interest rate risk profile of financial liabilities
There were no interest bearing financial liabilities as at either 30 April 2007
or 30 April 2006.
14. Provisions for liabilities
30 April 30 April
2007 2006
#000 #000
Deferred Tax
Balance at 1 May 2006 - -
Movement in year 1 -
Balance at 30 April 2007 1 -
The movement in the year is in respect of fixed asset investments revalued in
the year and the tax that would be payable if they were sold at these values.
15. Called up share capital
30 April 30 April
2007 2006
#000 #000
Authorised
300,000,000 ordinary shares of 0.1p each and
300,000,000 deferred shares of 0.9p each 3,000 3,000
Allotted, issued and paid
30 April 30 April
2007 2006
#000 #000
236,130,555 ordinary shares of 0.1p each 236 236
130,477,519 deferred shares of 0.9p each 1,174 1,174
1,410 1,410
No shares were issued during the year ended 30 April 2007. (In the year to 30
April 2006 the company issued 50,000,000 ordinary shares of 0.1p each at a
premium of 0.2p per share).
Subsequent to the year end the authorised share capital was increased to
2,300,000,000 ordinary shares of 0.1p each and 300,000,000 deferred shares of
0.9p each, totalling #5,000,000.
Rights of deferred shares
The deferred shares do not possess any entitlement to any participation in the
profits or assets of the Company through either dividends or a distribution on a
winding-up. The holders of the deferred shares are not entitled to receive
notice of or to attend or to vote at any general meeting of the Company.
16. Share premium and reserves
Share Revaluation Profit
Premium Reserve and Loss
Account Account
#000 #000 #000
As at 1 May 2006 1,093 - (2,109)
Revaluations in the year on investments - 9 -
Revaluations realised on disposal - (5) -
Retained profit for the year - - 108
At 30 April 2007 1,093 4 (2,101)
17. Reconciliation of shareholders' funds
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Profit/(loss) for the financial period 108 267
Revaluation in the year less realised on disposal 4 -
New share capital subscribed (including premium and expenses) - 129
Total movements during the year 112 396
Opening shareholders' funds 394 (2)
Closing shareholders' funds 506 394
18. Reconciliation of operating loss to operating cash flows
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Operating profit 202 292
Decrease/(increase) in debtors 197 (277)
(Decrease)/Increase in creditors (5) 22
Profit on sale of investments (27) -
Debtors written off or converted into investments (215) -
Sales paid for via investment issue (175) -
Net cash (outflow)/inflow from operating activities (23) 37
19. Analysis of cash flows for headings netted in the cash flow statement
Year ended Year ended
30 April 30 April
2007 2006
#000 #000
Company
Returns on investments and servicing of finance
Interest received 7 13
Net cash inflow from returns on investments and servicing of finance 7 13
Capital expenditure and financial investment
Proceeds from disposal of investments 35 29
Payments to acquire investments (32) (193)
Net cash inflow/(outflow) from capital expenditure and financial 3 (164)
investment
Acquisitions and disposals
Costs of disposal of subsidiary - (4)
Net cash (outflow) from acquisitions and disposals - (4)
Financing
Issues of ordinary share capital (including premium/expenses) - 129
Director's loan (repaid)/introduced - (2)
Repayment of loan notes - (34)
Net cash inflow from financing - 93
20. Reconciliation of net funds to the amounts shown in the balance sheet
1 May Non cash 30 April
2006 Cash flow movement 2007
#000 #000 #000 #000
Cash at bank and in hand 16 (13) - 3
Notes (continued)
21. Directors' interests and related party disclosures
During the year Renwick Haddow, a director, made a loan to the company of #nil
(2006: #14,999) with regards to fees incurred in respect of the subscription of
share capital.
During the year ended 30 April 2007 Renwick Haddow was also a director in Arc
Corporate Services Limited, Europol International Plc, Eastern European Ventures
Plc, Arc Fund Management Limited, Turnaround Capital Plc (formerly Public
Network Plc), Consolidated Vending Plc and Traction Technology Plc. During the
year the company undertook the following transactions with these companies:
Commission or Loans to / Year end debtor Investments
Interest charged (loans from) / (creditor) held at year
/ (purchases end
from)
# # # #
Arc Corporate Services Limited (7,500) - - -
Europol International Plc - - - 109,111
Eastern European Ventures Plc - 2,668 2,668 67,879
Arc Fund Management Limited 39,957 - 10,380 -
Turnaround Capital Plc - 12,676 12,676 22,048
Consolidated Vending Plc - - - 30,000
During the year ended 30 April 2007 the company had acquired, and disposed of,
shares in Traction Technology Plc for a profit of #27,289 and wrote down the
investment in Eastern European Ventures Plc by #20,000.
During the year ended 30 April 2006 Renwick Haddow was also a director in Arc
Corporate Services Limited, Europol International Plc, Eastern European Ventures
Plc and Public Network Plc. During the year the company undertook the following
transactions with these companies:
Interest charged Loans to / Year end debtor Investments
/ (purchases (loans from) / (creditor) held at year
from) end
# # # #
Arc Corporate Services Limited (3,750) - - -
Europol International Plc 4,752 125,000 129,752 1,139
Eastern European Ventures Plc - - - 87,879
Public Network Plc - - - 5,875
During the year ended 30 April 2006 the company had acquired, and disposed of,
further shares in Europol International Plc at a value of #3,861 and in Eastern
European Ventures Plc at a value of #12,121. The company made a profit of
#342,139 on the disposal of the shares in Europol International Plc and a profit
of #37,879 on the disposal of shares in Eastern European Ventures Plc.
22. Controlling party
No single individual has sole control of the Company.
Notes (continued)
23. Capital commitments
Amounts contracted for but not provided in the accounts amounted to #nil (2006:
#Nil).
24. Other financial commitments
At 30 April 2007 the Company had no annual commitments under non-cancellable
operating leases (2006: #Nil).
Annual Report and Accounts
Copies of the Annual Report and Accounts for the year ended 30 April 2007 will
be posted to shareholders by 30 October 2007 and will be available, free of
charge, from the offices of the Company:- 4 Sovereign Court, Graham Street,
Birmingham, B1 3JR for a period of 14 days from the date of their posting. The
Company's Annual General Meeting will be announced in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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