Final Results
October 27 2008 - 2:00AM
UK Regulatory
RNS Number : 6926G
Capital Ideas PLC
27 October 2008
CAPITAL IDEAS PLC
Statement of results
for the year ended 30 April 2008
Capital Ideas PLC ("the Company"), a holding company with a number of subsidiaries ("the Group") which is focused on developing a
database marketing business report their financial statements for the year ended 30 April 2008.
Highlights
* Turnover increased by 250 per cent. to �1.763 million (2007: �0.503 million)
* Operating Profit before impairment increased by 133 per cent. to �1.055 million (2007: �0.452 million)
* Management has delivered such growth through the sale of investments and establishing Capital Ideas Financial Publishing Limited
in April 2008 with the aim of diversifying its income streams and improving the quality of its earnings
* Management team broadened and strengthened by the appointment of Stuart Kinner and Grant Jones as directors of Capital Ideas PLC.
Commenting on the result, Stuart Kinner, Chairman of Capital Ideas PLC, said:
"The board is very pleased with progress in the past financial year and the current financial year has started strongly. The Company has
reshaped itself from focusing purely on investing in turnaround opportunities to becoming a more diversified group. The strategy is to
acquire majority interests in companies that meet with the management's expertise and integrate them within the Group to benefit from
synergies. The first such acquisition involved the creation of Capital Ideas Financial Publishing Ltd and the subsequent purchase of a
financial publication business. The Company has also launched 'Room to Invest', a hotel room investment company, which we are expecting to
be a major contributor to profits going forward. The Company continues to search for other businesses that meet the board's criteria."
Chairman's Statement
I am pleased to announce that for the twelve months to 30 April 2008, the Company achieved a profit before tax of �639,000 (2007:
�361,000). This represents an increase of 77% on last year. Earnings per ordinary 0.1p share was 0.16p (2007: 0.13p).
Net assets have grown by 194% from �692,000 to �2,034,000, resulting in an increase in net asset value (NAV) per ordinary 0.1p share
from 0.29p to 0.71p.
Operating Review
The Company has previously focused on acquiring equity positions in distressed businesses. This focus has now changed to establish a
broader based business with repeat earnings rather than reliance on profits on disposal of investments, which in this economic environment
are becoming more difficult to achieve.
The strategy going forward is to acquire majority interests in businesses which fit in with our current operations and where we are able
to generate synergies and cost savings. These acquisitions will in the main be distressed businesses where we are able to acquire previously
strong businesses with a sound business model at a low cost. When market conditions improve and these divisions have established critical
mass then these divisions will be either sold or listed.
Proposed Dividend
The directors do not recommend the payment of a dividend (2007: �Nil).
The Current Structure
The Company currently operates a number of different profit centres
Capital Ideas Private Equity Ltd - this holds minority interests in a number of turnaround and growth businesses
Capital Ideas Financial Publications Ltd - this operates a number of financial publications including Company Refs, Company Directory
and Company Guide.
Room to Invest Ltd - this is a hotel sales business which is selling hotel rooms to private investors in a number of hotel opportunities
throughout the world.
Activity
During the year the Company completed a number of investments as well as won a number of mandates from clients to raise funding and
assist with a market listing. In addition the Company was successful in disposing of a number of its holdings.
Below are some of the more significant investments the Company holds:
Worldlink Group plc - owns Intellectual Property for use on mobile telecommunications which allow for the update of data and is utilised
in updating stocks and shares, betting odds and auction data. Capital Ideas owns 1.067% of Worldlink.
Nicobloc plc - Nicobloc is a company specialising in providing products to encourage smokers to give up. The NicoBloc fluid has a 60%
success rate on assisting people to quit smoking. This compares to the current industry average of 5% success rate. Capital Ideas owns
2.5% of Nicobloc plc, having already realised �250,000 from the sale of half of its initial holding.
Dateline plc - Dateline plc is the UK's oldest established on-line dating agency. Capital Ideas now has a significant stake in Dateline,
via direct shareholdings and shares in trust, totalling 40% of the company.
Primary Water plc - Primary Water is an Australian-based water exploration company that locates and drills for water. This water is not
surface run-off water, but water that is known as primary water, which is deeper underground. Capital Ideas sold its holding in Primary
Water plc in the year under review for over �500,000.
This division is discontinuing new investments because exits are more difficult during this current economic climate. The objective over
the coming months will be to dispose of current holdings and use the proceeds to invest in other areas of the business.
Other Divisions
Capital Ideas Financial Publications Ltd
The Company acquired the assets from the previously AIM-quoted Charterhouse Communications plc. Assets acquired included: Company Refs,
Company Guide and Company Directory. These are long established financial titles which are mainly subscription based. The assets were
acquired for �207,000 in cash. In the first 4 months of ownership the division generated a contribution to central overheads of �119,000 on
sales of �513k. The Company is looking to expand this division both by acquisition and organically. It is also due to launch its first new
title in January 2009, which will be a subscription-based publication and is in a very niche area. Further details of the planned new
publication will be released shortly.
Room to Invest Ltd
This Company was launched in July 2008, marketing its first hotel in Budapest, Hungary to private investors. It is currently marketing
an existing hotel in Marrakech, Morocco with further launches to follow shortly in Slovenia and Southern Ireland. Each investor receives an
income of up to 10% per annum, with the first year guaranteed and investors are able to stay at any hotel in the group free of charge for 21
days each year. Unlike other schemes in this sector, Room to Invest offers an average investment of �5,500 per room and is focused on
property hot spots with no exposure to the UK market. Room to Invest is expected to be a substantial contributor to the Group.
The Company also has an option to acquire an established mail order business which owns a database of over 500,000 previous buyers. This
is a business which can be easily expanded and integrated into our existing business, thus achieving substantial cost savings. We are
currently searching for other related businesses in this field.
Prospects
The Company has started the new financial year strongly and has invested heavily in its new subsidiary, Room to Invest and other areas
of the business. In the first four months of this year to 31 August 2008 the Group has been both profitable and cash generative. We have
decided to withdraw from the private equity market and are actively seeking to dispose of our minority interests. The focus on the business
going forward is to establish a diversified group of businesses built around a central overhead with database management being the common
theme of the businesses. The objective is to be able to exploit each of the databases by being able to market different products and
services to these databases and therefore maximise the revenue of the group. The Company has an option to acquire a direct marketing
business which retails DVD's, CD's and books which has a database of over 500,000 clients and has also recently acquired the database for
Inside Track Seminars, a once leading buy to let seminar business which number some 200,000 individuals. All these developments should improve the prospects and reach of the group over the coming 12
months. With your boards' experience in the acquisition and turnaround of distressed companies, the current market conditions provide an
ideal opportunity to expand the business both organically and by acquisition.
Stuart Kinner
Chairman
CONSOLIDATED INCOME STATEMENT
For the year ended 30 April 2008
Year ended 30 April 2008 Year ended
30 April
2007
�'000 �'000
Revenue 1,763 503
Cost of sales (37) (11)
Gross profit
1,726 492
Loss on disposal of assets (340) (5)
Administrative expenses (315) (42)
Finance income - 7
Finance costs (16) -
Profit from operating activities 1,055 452
before impairment
Impairment of investments and loans (416) (91)
Profit before taxation 639 361
Income tax expense (206) (63)
Profit for the period 433 298
EARNINGS PER SHARE
Basic profit per ordinary share 0.16p 0.13p
Diluted profit per ordinary share 0.16p 0.13p
All of the profit for the period is attributable to equity holders of the parent company.
CONSOLIDATED BALANCE SHEET
As at 30 April 2008
2008 2007
�'000
�'000
ASSETS
Non current assets
Property, plant & equipment 10 -
Other intangible assets 454 -
Available-for-sale investments 2,585 730
Investments in associates 5 -
Total non current assets 3,054 730
Current assets
Trade and other receivables 244 84
Cash and cash equivalents 7 3
Total current assets 251 87
TOTAL ASSETS 3,305 817
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital 1,461 1,410
Share premium account 1,160 1,093
Other reserves 791 -
Retained earnings (1,378) (1,811)
Total equity 2,034 692
Current liabilities
Trade and other payables 672 28
Current tax payable 492 97
Bank borrowings 9
Total current liabilities 1,173 125
Non-current liabilities
Deferred tax provision 98 -
Total liabilities 1,271 125
TOTAL EQUITY AND LIABILITIES 3,305 817
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 April 2008
Called up Share Other Retained Total
share premium reserves Earnings Equity
capital account
�'000 �'000 �'000 �'000 �'000
Balance 30 April 2006 1,410 1,093 - (2,109) 394
Profit for the year - - - 298 298
Balance 30 April 2007 1,410 1,093 - (1,811) 692
Issue of shares (net of issue 51 67 - - 118
costs)
Profit for the year - - - 433 433
Revaluation of intangibles - - 259 - 259
Valuation gains on -
available-for-sale investments - - 840 840
Deferred tax liability on - - (308) - (308)
revaluations
Balance 30 April 2008 1,461 1,160 791 (1,378) 2,034
CONSOLIDATED CASHFLOW STATEMENT
For the year ended 30 April 2008
Year ended Year ended
30 April 30 April
2008 2007
�'000 �'000
Net cash from operating activities 785 (23)
Interest paid (16) -
Income taxes paid (21) -
Net cash from operating activities 748 (23)
Cashflow from investing activities
Purchases of investments (1,257) (32)
Proceeds from sale of investments 393 35
Interest received - 7
Net cash from investing activities (864) 10
Financing
Proceeds from issue of shares 111 -
Net cash from financing activities 111 -
Net (decrease) in cash and cash equivalents (5) (13)
Cash and cash equivalents at 1 May 3 16
Cash and cash equivalents at 30 April (2) 3
Comprising of:
Cash and cash equivalents per the balance sheet 7 3
Less:
Bank overdraft (9) -
Cash and cash equivalents for cash flow (2) 3
statement purposes
As described in the accounting policies, bank overdrafts repayable on demand fluctuate from being positive to overdrawn and are
considered an integral part of the Group's cash management for cash flow statement purposes.
There is no material difference between the fair value and the book value of cash and equivalents.
PARENT COMPANY BALANCE SHEET
As at 30 April 2008
2008 2007
�'000 �'000
Fixed assets
Investments 2,590 730
Current assets
Debtors 100 84
Cash at bank and in hand 4 3
104 87
Creditors: Amounts falling due within one year (829) (125)
(725) (38)
Net current assets
Total assets less current liabilities 1,865 692
Provisions for liabilities (26) -
Net assets 1,839 692
Capital and Reserves
Share capital 1,461 1,410
Share premium 1,160 1,093
Other reserve 604 -
Profit and loss account (1,386) (1,811)
Equity shareholders' funds 1,839 692
ENDS
Further information:
Anita Madhas, Director
Capital Ideas plc
Tel: 0121 222 4220
Gavin Burnell
Ruegg & Co Limited
Tel: + 44 (0) 207 584 3663
Ian Callaway
SVS Securities plc
Tel: 020 7638 5600
Paul Quade
City Road Communications
Tel: 020 7248 8010 / 07947 186694
This information is provided by RNS
The company news service from the London Stock Exchange
END
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