Consolidated Vending PLC
Interim accounts for the six months ended 30 June 2007
28 September 2007
Consolidated Vending Plc (`CV' or the `Company'), the niche vending operator, is
pleased to announce its unaudited interim results for the 6 months ended 30 June
2007.
Overview
CV operates vending products in the UK. It is the second largest operator of
photobooths and, since the acquisition of Kiddies Rides (UK) Ltd on 27 June
2007, it is the third largest operator of kiddie rides.
On admission to AIM in December 2006 it was the clear intention of the Directors
to use the Company's shares as an acquisition currency in order to make
acquisitions. Growth by acquisition will yield both cost efficiencies and
higher quality earnings.
The acquisition of Kiddies Rides (UK) Ltd should provide an increase of revenue
of 30% and also a positive contribution to earnings and EBITDA. The integration
process has been straightforward and major customers have indicated their
satisfaction with the transition.
Photobooths provide the majority of CV's revenue. Due to our stock of ex Post
Office booths we remain well placed to provide competitive bids for significant
contracts as and when they come up for renewal or out to tender. We do however
acknowledge the price sensitive nature of recent bid decisions so we intend to
provide differentiation through customer service levels.
Highlights
All figures reported under International Financial Reporting
Standards as adopted by the European Union
Six Six Proforma 209 day
months months six months period
ended ended ended ended
30 June 30 June 30 June 31 December
(CV (Snap (Snap (CV
conso Digital and Consol
lidated) only) BFresh) idated)
2007 2006 2006 2007
�000 �000 �000 �000
* Revenue 1,533 3,549 3,651 1,545
* Operating (loss)/profit (645) (43) (1,470) (1,039)
* (Loss)/profit before taxation (189) (46) (1,483) (1,044)
* Loss per share - basic 0.1p - - 0.7p
* Borrowings 733 1,250 1,250 1,059
* The directors have been advised by AIM that, in the
absence of comparative information on the group for the six
months to 30 June 2006, comparative information on the
principal subsidiary Snap Digital Imaging Limited (`Snap')
should be provided in the income statement. In the opinion of
the directors, more appropriate comparative information is
given by the presentation of an aggregation of the combined
results of CV, Snap and its fellow subsidiary BFresh Limited
for that period.
* Consequently, the directors have included this proforma
comparative information in the above.
* Ongoing revenues have remained relatively stable compared
to the 209 day period ended 31 December 2006.
* The Post Office Contract was lost in June 2006 which
accounted for approximately 55% of Snap's Revenues.
* Losses before taxation have been reduced from the
comparable period last year.
* On 27 June 2007 the acquisition of Kiddies Rides (UK)
Limited was completed.
Activities in the Period
Ongoing revenues have remained relatively stable compared with the 209 day
period ended 31 December 2006. The Post Office contract ended in June 2006. If
the effect of the Post Office revenue in the 6 months to 30 June 2006 is
excluded then again revenues are reasonably comparable.
The Group is showing reduced losses before tax of �189,000 compared to
�1,483,000 for the comparable period last year which included a share option
related FRS 20 charge of �1,168,000). The current period includes a one off
discount relating to debt refinancing of �450,000.
On 27 June 2007 we completed the acquisition of Kiddies Rides (UK) Ltd whilst
also raising new equity funds and refinancing of our debt position.
Kiddies Rides (UK) Ltd owns and operates around 360 rides in similar locations
to the Groups' photobooth locations. In the year ended 31 October 2006 the
business had turnover of �938,721, EBITDA of �155,839 and profit before tax of
�45,780. Based on a similar level of turnover we anticipate a significant
increase in profitability through integration into CV's engineering team and
infrastructure.
On 27 June 2007 the Company placed 22,667,209 ordinary shares of �0.001 each at
�0.014875 with funds managed by Arc Fund Management Limited which raised
�337,174 before expenses. These funds were used to part fund the acquisition of
Kiddies Rides (UK) Ltd.
During the period the Group debt due to 3i Group plc of �1.55m was repaid at a
discount of �450,000. The repayment was mainly funded by monies raised on
admission to AIM in December 2006 and from a convertible loan of �625,000
advanced by Trafalgar Capital Specialized Investment Fund (`Trafalgar') on 27
June 2007.
The Company has also entered into a Committed Equity Facility with Trafalgar of
up to �2m.
At the beginning of the reporting period the Company owned 65% of Powerpod
Holdings Plc, a non-trading holding company. Powerpod Ltd, a wholly owned
subsidiary of Powerpod Holdings Plc, is in liquidation and the remaining shares
in Powerpod Holdings Plc are being purchased by the Company. To date the
Company owns 94% and the remainder are under a compulsory purchase order.
Powerpod Holdings Plc will be struck off once full ownership is gained.
As indicated in our December 2006 directors' report and financial statements,
bringing the Aqua Polar product to the UK market will require significant
investment in gaining and maintaining various approvals and accreditations and
in altering the product. The level of investment has been assessed against the
likelihood of commercial success and it has been deemed too high a risk in the
current state of the Group's development. The Directors retain the belief that
pure water vending is a valid business concept and will continue to keep abreast
of opportunities as and when they arise in the area.
Accounting Policies
These are the first results presented under International Financial Reporting
Standards and the comparatives have been restated on this basis.
The main effect is that of an accelerated charge to profits due to the
requirement to identify and amortise intangible assets not previously recognised
which has produced an increased charge of �85,000 for the 6 months ended 30 June
2007. The consequential identification of intangible assets resulted in a one-
off credit of �70,000 to the income statement for the period ended 30 June 2007
of the excess of the assets acquired over the consideration paid.
Outlook
The second half should yield further reduction in losses with the introduction
of the Kiddies Rides (UK) Ltd business before moving into profit in 2008.
We continue to seek suitable acquisitions to bolt onto the existing
infrastructure. Further information will be announced at the appropriate time.
Andrew Coll
Chief Executive
Enquiries:
Andrew Coll, Chief Executive
Jonathan Dowse, Finance Director
Richard Steele, Non-exutive Chairman
Renwick Haddow, Non-executive Director
Consolidated Vending PLC
3 Barnes Wallis Court
Wellington Road
High Wycombe
Bucks
HP12 3PR
www.cv-plc.co.uk
Telephone: 01494 513927
Nick Harriss
ARM Corporate Finance Limited ("Nominated Advisor")
12 Pepper Street
London
E14 9RP
Telephone: 020 7512 0191
Ian Callaway
SVS Securities plc
2 London Wall Buildings
London Wall
London
EC2M 5PP
SVS Securities plc
Telephone: 020 7638 5600
Consolidated Income Statement
for the six months ended 30 June 2007
Proforma
Note Six Snap Six 209 day
months Digital months period
ended Imaging ended ended
30 June Limited 30 June 31 December
2007 Six months 2006 2006
�'000 ended �'000 �'000
30 June
2006
�'000
Revenue 3 1,533 3,549 3,651 1,545
Cost of sales (991) (3,068) (3,138) (856)
________________________________________
Gross profit 542 481 513 689
Other operating 69 - - 369
income
Operating expenses (1,256) (524) (1,983) (2,097)
________________________________________
Operating loss 3 (645) (43) (1,470) (1,039)
Finance income 4 466 - - 48
Finance expense 5 (10) (3) (13) (53)
________________________________________
Loss before taxation (189) (46) (1,483) (1,044)
Income tax expense - - - -
________________________________________
(Loss)/profit for the
period attributable (189) (46) (1,483) (1,044)
to equity holders of
the parent ========================================
Loss per share (pence)
Basic 0.01p - - 0.7p
========================================
Diluted 0.01p - - 0.5p
========================================
As agreed with AIM, the results for the comparative six months ended 30 June
2006 represent the trading for the subsidiary Snap Digital Imaging Limited
(`Snap') only. The proforma figures for the six months ended 30 June 2006
represent an aggregation of the trading results of both Snap and its fellow
subsidiary BFresh Limited. The results for the 209 day period from
incorporation on 6 June 2006 to 31 December 2006 represent the consolidated
results of the group for that period and hence include the trading results of
the two subsidiaries post acquisition on 23 June 2006.
Consolidated Balance Sheet
At 30 June 2007
As at As at As at
30 June 2007 30 June 31 December
�'000 2006 2006
�'000 �'000
ASSETS
Non-Current Assets
Property, plant & 1,800 2,023 1,688
equipment
Intangible assets
- customer contracts 1,184 892 817
______________________________________
Total non-current 2,984 2,915 2,505
assets ______________________________________
Current Assets
Inventories 372 385 336
Trade and other 406 441 633
receivables
Cash and cash 302 808 955
equivalents
______________________________________
Total current assets 1,080 1,634 1,924
______________________________________
Total assets 4,064 4,549 4,429
======================================
LIABILITIES
Current Liabilities
Borrowings - 1,250 750
Trade and other 1,258 2,472 1,654
payables ______________________________________
Total current 1,258 3,722 2,404
liabilities ======================================
Non-Current Liabilities
Borrowings 733 - 309
Other payables - 27 -
Deferred taxes 27 - -
______________________________________
Total non-current 760 27 309
liabilities ______________________________________
Total liabilities 2,018 3,749 2,713
======================================
Net assets 2,046 800 1,716
======================================
EQUITY
Issued share capital 259 160 206
Share premium account 1,853 800 1,387
Retained earnings (66) (160) 123
______________________________________
Total equity
attributable to 2,046 800 1,716
equity holders of the
parent ======================================
Consolidated Statement of Changes in Shareholders' Equity
for the six months ended 30 June 2007
Issued Share Retained Total
Share Premium Earnings �'000
Capital Account �'000
�'000 �'000
24 day period ended 30 June 2006
At 6 June 2006 - - - -
Loss for the
period being
total recognised - - (1,328) (1,328)
income and
expense for the
period
Share-based
payments
including - - 1,168 1,168
deferred tax
taken directly
to equity
Shares issued 160 800 - 960
_______________________________________
At 30 June 2006 160 800 (160) 800
=======================================
209 day period ended 31 December 2006
At 6 June 2006 - - - -
Loss for the
period being
total recognised - - (1,045) (1,045)
income and
expense for the
period
Share-based
payments
including - - 1,168 1,168
deferred tax
taken directly
to equity
Shares issued 206 1,387 - 1,593
_______________________________________
At 31 December 206 1,387 123 1,716
2006 =======================================
Six months ended 30 June 2007
At 1 January 2007 206 1,387 123 1,716
Loss for the
period being
total recognised - - (189) (189)
income and
expense for the
period
Shares issued 53 466 - 519
______________________________________
At 30 June 2007 259 1,853 (66) 2,046
======================================
Consolidated Statement of Cash Flows
for the six months ended 30 June 2007
Six Proforma 209 day
months six months period
ended ended ended
30 30 June 31 December
June 2006 2006
2007 �'000 �'000
�'000
�'000
Cash flows from operating activities
Loss for the period (189) (1,483) (1,045)
Adjustments for:
Depreciation 270 - 472
Amortisation 157 - 75
Loss on sale of property, plant - - (126)
and equipment
Finance income (466) - (48)
Finance expense 10 13 53
_______________________________
Equity settled share based 1,168 1,168
payment expenses _______________________________
Operating cash (outflow)/inflow
before changes in working (218) (302) 549
capital
Increase in inventories (20) 15 64
Decrease/(increase) in trade and 321 (80) (272)
other receivables
(Increase)/decrease in trade and 217 389 (614)
other payables _______________________________
Net cash generated from
operations and operating (134) 22 (273)
activities
Cash flows from investing activities
Acquisitions (775) 95 95
Purchase of property, plant and - (12) (12)
equipment _______________________________
Net cash from investing (775) 83 83
activities
Cash flows from financing activities
Proceeds from the issue of share 519 878 1,511
capital
New borrowings 625 1,250 1,300
Repayment of borrowings (951) (2,245) (2,486)
_______________________________
Net cash from financing 193 (117) 325
activities
Net (decrease)/increase in cash
and cash equivalents (716) (12) 135
Cash acquired with subsidiaries 63 820 820
Cash and cash equivalents at 955 - -
start of period _______________________________
Cash and cash equivalents at end 302 808 955
of period ===============================
The proforma cashflow figures for the comparative six months ended 30 June 2006
have been derived from the group's balance sheet at incorporation on 6 June 2006
and that of 30 June 2006.
Reconciliation of net cash to movement in net borrowings
Six Proforma 209 day
months six months period
ended ended ended
30 June 30 June 31 December
2007 2006 2006
�'000 �'000 �'000
Net (decrease)/increase in
cash and cash equivalents (716) (12) 135
Repayment of borrowings 951 2,245 2,486
New borrowings (625) (1,250) (1,300)
Net cash/(borrowings)
acquired with subsidiaries 63 (1,425) (1,425)
__________________________________
Movement in net borrowings in (327) (442) (104)
the period
Net borrowings at start of (104) - -
period __________________________________
Net borrowings at end of (431) (442) (104)
period ==================================
Notes to the Financial Statements
For the six months ended 30 June 2007
1. Transition to International Financial Reporting Standards
The attached interim financial statements are the first interim financial
statements following the adoption of International Financial Reporting Standards
as adopted by the European Union ("EU-adopted IFRSs") for Consolidated Vending
PLC and its subsidiaries (`the Group'). These interim financial statements have
been prepared in accordance with the accounting policies set out below and are
consistent with the policies the Group expects to follow at the year-end, taking
into account the requirements and options in IFRS 1 `First-time adoption of
International Financial Reporting Standards'.
The transition date for the Group's application of adopted IFRS is the date of
incorporation on 6 June 2006 and the comparative figures for 30 June 2006 and 31
December 2006 have been restated accordingly. Reconciliations of the income
statement, balance sheet and net equity from previously reported UK GAAP to IFRS
are shown in note 10. The consolidated interim statements are prepared on the
basis of adopted IFRS published by the International Accounting Standards Board
(`IASB') that are currently in issue. The adopted IFRS that will be effective
(or available for early adoption) in the annual financial statements to 31
December 2007 are still subject to change and additional interpretations.
Therefore, the accounting policies set out below may be updated by the time the
Group prepares its first full set of financial statements under EU-adopted IFRSs
for the year ending 31 December 2007.
The information presented for the six months ended 30 June 2007 represents the
consolidated results of the CV Group for that period. The directors have been
advised by AIM that, in the absence of comparative information on the group for
the six months to 30 June 2006, comparative information on the principal
subsidiary Snap Digital Imaging Limited should be provided in the income
statement. In the opinion of the directors, more appropriate comparative
information is given by the presentation of an aggregation of the combined
results of both Snap and BFresh Limited for that period. Consequently, the
directors have included this proforma comparative information in the income
statement as presented.
The information relating to the six months ended 30 June 2007 and 30 June 2006
is unaudited and does not constitute statutory accounts. The comparative figures
for the year ended 31 December 2006 are not the Group's statutory accounts for
that financial period. The statutory accounts for the period ended 31 December
2006, prepared under UK GAAP, have been reported on by the Group's auditors and
delivered to the Registrar of Companies. The report of the auditors was
unqualified and did not contain statements under section 237(2) or (3) of the
Companies Act 1985.
2. Accounting Policies
The Group's significant accounting policies are listed below:
(a) First Time Adoption
The Group has applied IFRS1 `First time adoption of International Financial
Reporting Standards' in its initial application of IFRS. The Group is required
to select appropriate accounting policies under IFRS and apply them
retrospectively to its financial statements such that all comparative
information is presented on the same basis. Accordingly this necessitates the
restatement of the balance sheet at 6 June 2006, the date of transition (this
being the date of the beginning of the earliest financial period for which full
comparative information is required) as well as at 31 December 2006.
(b) Basis of Preparation
The financial statements are presented in Sterling, rounded to the nearest
thousand. They are prepared on the historical cost basis.
The restated financial information for the transition to IFRS at 6 June 2006,
the interim period ended 30 June 2006, the period ended 31 December 2006 has
been prepared in accordance with EU-adopted IFRSs and in accordance with the
accounting policies as set out below.
The preparation of financial statements in conformity with EU-adopted IFRSs
requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities,
income and expenses. The estimates and associated assumptions are based on
historical experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods.
(c) Basis of Consolidation
(i) Subsidiaries
Subsidiaries are entities controlled by Consolidated Vending Plc (`the
Company'). Control exists when the Company has the power, directly or
indirectly, to govern the financial and operating policies of an entity so
as to obtain benefits from its activities. The financial statements of
subsidiaries are included in the consolidated financial statements from the
date that control commences until the date that control ceases.
(ii) Transactions Eliminated on Consolidation
Intragroup balances and any unrealised gains and losses or income and
expenses arising from intragroup transactions, are eliminated in preparing
the consolidated financial statements.
(d) Foreign Currency
Foreign Currency Transactions
Transactions in foreign currencies are translated at the foreign exchange rate
ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies at the balance sheet date are translated to
Sterling at the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognised in the income statement.
(e) Property, Plant and Equipment
(i) Owned Assets
Items of property, plant and equipment are stated at cost less accumulated
depreciation (see below) and impairment losses (see accounting policy).
(ii) Leased Assets
Leases under the terms of which the Group assumes substantially all the
risks and rewards of ownership are classified as finance leases. Assets
acquired by finance leases are stated at an amount equal to the lower of
their fair value and the present value of the minimum lease payments at
inception of the lease, less accumulated depreciation and impairment
losses.
(iii)Subsequent Costs
The Group recognises in the carrying amount of an item of property, plant
and equipment the cost of replacing part of such an item when that cost is
incurred if it is probable that the future economic benefits embodied with
the item will flow to the Group and the cost of the item can be measured
reliably. All other costs are recognised in the income statement as an
expense as incurred.
(iv) Depreciation
Depreciation is charged to the income statement on a straight-line basis
over the estimated useful lives of each part of an item of property, plant
and equipment. Land is not depreciated. The estimated useful lives are as
follows:
* Photobooths 6 years
* Plant and machinery 3 years
* motor vehicles 3 - 4 years
* Fixtures and fittings 3 - 4 years
The residual value, if not insignificant, is reassessed annually.
(f) Intangible Assets
(i) Goodwill
All business combinations are accounted for by applying the purchase
method. Goodwill represents amounts arising on acquisition of subsidiaries.
In respect of business acquisitions that have occurred since 6 June 2006,
goodwill represents the difference between the cost of the acquisition and
the fair value of the net identifiable assets, liabilities and contingent
liabilities.
(ii) Customer contracts
Customer contracts relate to the cost of trading arrangements in place at
the date of acquisition of subsidiaries. Such costs are being amortised to
nil over their estimated useful lives as follows:
- Photobooths - 6 years
- Kiddie rides - 3 years
(g) Trade and Other Receivables
Trade and other receivables are stated initially at their fair value and then
subsequently at their amortised cost.
(h) Inventories
Inventories are stated at the lower of cost and net realisable value. Net
realisable value is the estimated selling price in the ordinary course of
business, less the estimated costs of completion and selling expenses.
The cost of inventories is based on the first-in first-out principle and
includes expenditure incurred in acquiring the inventories and bringing them to
their existing location and condition.
(i) Cash and Cash Equivalents
Cash and cash equivalents comprises cash balances and call deposits with a
maturity of 3 months or less. Bank overdrafts that are repayable on demand and
form an integral part of the Group's cash management are included as a component
of cash and cash equivalents for the purpose of the statement of cash flows.
(j) Impairment
The carrying amounts of the Group's assets, other than inventories and deferred
tax assets, are reviewed at each balance sheet date to determine whether there
is any indication of impairment. If any such indication exists, the asset's
recoverable amount is estimated.
The recoverable amount of assets is the greater of their fair value less costs
to sell and value in use. In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks
specific to the asset. For an asset that does not generate largely independent
cash inflows, the recoverable amount is determined for the cash-generating unit
to which the asset belongs.
An impairment loss is recognised whenever the carrying amount of an asset or its
cash-generating unit exceeds its recoverable amount. Impairment losses are
recognised in the income statement.
Impairment losses recognised in respect of cash-generating units are allocated
first to reduce the carrying amount of any goodwill allocated to cash-generating
units (group of units) and then, to reduce the carrying amount of the other
assets in the unit (group of units) on a pro rata basis.
In respect of other assets, an impairment loss is reversed if there has been a
change in the estimates used to determine the recoverable amount. Any
impairment of goodwill is never reversed.
An impairment loss is reversed only to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been determined, net
of depreciation or amortisation, if no impairment loss had been recognised.
(k) Interest-Bearing Borrowings
Interest-bearing borrowings are recognised at fair value less attributable
transaction costs. Subsequent to initial recognition, interest-bearing
borrowings are stated at amortised cost with any difference between cost and
redemption value being recognised in the income statement over the period of
borrowings on an effective interest basis.
(l) Employee Benefits
(i) Pensions
The Group operates a defined contribution pension plan for certain
employees. Obligations for contributions are recognised as an expense in
the income statement as incurred.
(ii) Share Based Payment Transactions
The Group operates an equity-settled share based payment programme that
allows certain directors to acquire shares of the Company.
The fair value of shares or options granted is recognised as an employee
expense on a straight line basis in the income statement with a
corresponding movement in equity. The fair value is measured at grant date
and spread over the period during which the employees become
unconditionally entitled to the shares or options (the vesting period). The
fair value of the shares or options granted is measured using a valuation
model, taking into account the terms and conditions upon which the shares
or options were granted. All of the company's share options vested
immediately upon the date of grant.
The fair value of options granted under the Group's share option scheme has
been determined using the Black-Scholes option pricing model.
(m) Trade and Other Payables
Trade and other payables are stated initially at their value and then
subsequently at their amortised cost.
(n) Revenue
(i) Goods Sold
Revenue from the sale of goods and services is recognised in the income
statement when cash is received in the company's vending machines.
(o) Expenses
(i) Operating Lease Payments
Payments made under operating leases are recognised in the income statement
on a straight-line basis over the term of the lease.
(ii) Finance Lease Payments
Minimum lease payments are apportioned between the finance charge and the
reduction of the outstanding liability. Finance charges are calculated so
as to produce a constant periodic rate of interest on the remaining balance
of liability.
(iii) Net Financing Costs
Net financing costs comprise interest payable on borrowings, interest
receivable on funds invested.
Interest income is recognised in the income statement as it accrues. The
interest expense component of finance lease payments is recognised in the
income statement using the effective interest rate method.
(p) Income Tax
Income tax on the profit or loss for the year comprises current and deferred
tax. Income tax is recognised in the income statement except to the extent that
it relates to items recognised directly in equity, in which case it is
recognised in equity.
Current tax is the expected tax payable on the taxable income for the year using
tax rates enacted or substantively enacted at the balance sheet date, and any
adjustment to tax payable in respect of previous years.
Deferred tax is provided using the balance sheet liability method and represents
the tax payable or recoverable on most temporary differences which arise between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes (the tax base). Temporary differences
are not provided on: the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit and do not arise from a business
combination; and differences relating to investments in subsidiaries to the
extent that they will probably not reverse in the foreseeable future. The amount
of deferred tax provided is based on the expected manner of realisation or
settlement of the carrying amount of assets and liabilities, using tax rates
expected to apply in the period in which the liability is settled or the asset
is realised and is based upon tax rates enacted or substantively enacted at the
balance sheet date.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the asset can be
utilised. Deferred tax assets are reduced to the extent that it is not probable
that the related tax benefit will be realised against future taxable profits.
The carrying amounts of deferred tax assets are reviewed at each balance sheet
date.
(q) Segment Reporting
A segment is a distinguishable component of the Group that is engaged either in
providing products or services (business segment), or in providing products or
services within a particular economic environment (geographical segment), which
is subject to risks and rewards that are different from those of other segments.
(r) New standards and interpretations net yet adopted
A new standard which will be effective for the year ended 31 December 2007, but
which has not been applied in preparing these interim accounts is as follows:
* IFRS 8 Operating Segments introduces the `management approach' to segment
reporting. 2008 financial statements, will require the disclosure of segment
information based on the internal reports regularly reviewed by the Group's
Chief Operating Decision Maker in order to assess each segment's performance and
to allocate resources to them. Currently the Group presents segment information
in respect of its business and geographical segments (see note 3). Under the
management approach, the Group does not expect the presentation of its segment
information to be significantly different.
3. Segmental Analysis
The Group's primary reporting segment is business divisions which correspond
with the way the operating businesses are organised and managed within the Group
and its secondary segment is geographical origin.
The following table analyses revenue and operating loss accordingly:
Six months Proforma six 209 day period
ended months ended ended
30 June 2007 30 June 2006 31 December 2006
�000 �000 �000
Business segment
Revenue
Photobooths 1,445 3,607 1,459
Toiletries 88 44 86
______________________________________________
1,533 3,651 1,545
==============================================
Operating loss
Photobooths (72) (43) (5)
Toiletries (44) (259) 91
Kiddies rides (84) - -
Central administration (445) (1,168) (1,125)
_____________________________________________
(645) (1,470) (1,039)
=============================================
Geographical Origin
Revenue United Kingdom
1,533 3,651 1,545
=============================================
Operating loss
United Kingdom (645) (1,470) (1,039)
=============================================
4. Finance Income
Six months Proforma 209 day period
ended six months ended 31
30 June ended December
2007 30 June 2006
�'000 2006 �'000
Bank interest receivable 16 3 48
Gain on debt refinancing 450 - -
__________________________________________
466 3 48
==========================================
5. Finance Expense
Six months Proforma six 209 day period
ended months ended ended
30 June 2007 30 June 2006 31 December
2006
�000 �000 �000
On all other loans 8 10 22
Finance charges payable on finance leases and hire purchase
contracts 2 3 31
______________________________________
10 13 53
======================================
6. Taxation
The tax charge for the six months ended 30 June 2007 is nil due to the existence
of corporation tax trading losses. No deferred tax asset has been recognised in
respect of such trading losses as the directors are unable to state if it is
more likely than not that such losses will be utilised.
7. Loss per Share
Loss per ordinary share have been calculated by dividing the result attributable
to equity holders of the parent on ordinary activities after taxation for each
financial period by the weighted average number of ordinary shares in issue
during the period.
Six months ended 209 day period
ended
30 June 2007 Proforma 30 31 December
June 2006 2006
p p p
Basic loss per share 0.01 3.0 0.7
_____________________________________________
Diluted loss per share 0.01 3.0 0.7
The calculation of basic and diluted earnings per share is based upon:
30 June 2007 Proforma 30 209 day period
�'000 June 2006 ended 31
�'000 December 2006
�'000
Earnings for basic and diluted earnings per share
calculations (189) (1,483) (1,044)
No. No. No.
Weighted average number of ordinary shares for basic
earnings per share 206,674,244 46,666,663 153,412,178
Impact of share options 35,903,509 11,666,687 36,730,019
_____________________________________________
Weighted average number of ordinary shares for diluted
earnings per share 242,577,753 58,333,330 190,142,197
In accordance with IAS 33 paragraph 33.5 the antidilutive effect of share
options have been disregarded for the purposes of calculating the diluted loss
per share amounts shown above.
8. Analysis of Net Borrowings
Six months ended 209 day period
ended
30 June 2007 Proforma 30 31 December
�'000 June 2006 2006
�'000 �'000
Loans and overdraft (733) (1,250) (1,059)
Cash and cash equivalents 302 808 955
==========================================
Net borrowings (431) (442) (104)
==========================================
9.
Explanation of Transition to IFRS
The accounting policies set out in note 2 have been applied in preparing the
consolidated interim financial statements for the six months ended 30 June 2007,
the comparative information for the six months ended 30 June 2006 and the 209
day period ended 31 December 2006 and the preparation of the opening IFRS
balance sheet at 6 June 2006 (the Group's date of transition).
In preparing its opening balance sheet, comparative information for the six
months ended 30 June 2006 and the 209 day period ended 31 December 2006 the
Group has adjusted amounts previously prepared in accordance with UK GAAP. No
reconciliation at the rate of transition (6 June 2006) has been presented since
the company was newly incorporated on that date.
(a) IFRS Reconciliation of Income Statement Comparatives
Six months ended 209 day period ended
30 June 2006 31 December 2006
Notes UK IFRS Restate Publish IFRS Restat
GAAP adjustmen d ed adjustmen ed
�'000 ts under UK GAAP ts under
�'000 IFRS �'000 �'000 IFRS
�'000 �'000
Revenue 3,651 - 3,651 1,545 - 1,545
Cost of (3,138) - (3,138) (856) - (856)
sales
Gross 513 513 689 - 689
profit
Operating (2,053) 70 (1,983) (2,114) 17 (2,097)
expenses
Other - - - 369 - 369
operating
income
Operating (1,540) 70 (1,470) (1,056) 17 (1,039)
loss
Finance - - 48 - 48
income
Finance (13) - (13) (53) - (53)
expense
Loss (1,55 3) 70 (1,483) (1,061) 17 (1,044)
before
taxation
Income - - - - - -
tax
expense
Result
attributa
ble to (1,553) 70 (1,483) (1,061) 17 (1,044)
equity
holders
of the
parent
(b) IFRS Reconciliation of Balance Sheet Comparatives
30 June 2006 31 December 2006
UK IFRS Restate Publish IFRS Restat
GAAP adjustmen d ed adjustmen ed
�'000 ts under UK GAAP ts under
�'000 IFRS �'000 �'000 IFRS
�'000 �'000
Non-current assets
Intangible assets
- 822 (822) - 800 (800) -
goodwill
Customer - 892 892 - 817 817
contracts
Property 2,023 - 2,023 1,688 1,688
plant and
equipment
Total non- 2,845 70 2,915 2,488 17 2,505
current
assets
Current assets
Inventori 385 - 385 336 - 336
es
Trade and 441 - 441 663 - 633
other
receivabl
es
Cash and 808 - 808 955 - 955
cash
equivalen
ts
Total 1,634 - 1,634 1,924 - 1,924
current
assets
Total 4,479 70 4,549 4,412 17 4,429
assets
Current liabilities
Borrowing (1,25 - (1,250) (750) - (750)
s 0)
Trade and (2,47 - (2,47 (1,654) - (1,654
other 2) 2) )
payables
Total (3,72 - (3,722) (2,404) - (2,404
current 2) )
liabiliti
es
Non-current liabilities
Borrowing
s
Other (27) - (27) (309) - (309)
payables
Total non- (27) - (27) (309) - (309)
current
liabiliti
es
Total (3,74 - (3,749) (2,713) - (2,713
liabiliti 9) )
es
Net 730 70 800 1,699 17 1,716
assets
Equity
Called up 160 - 160 206 - 206
share
capital
Share 800 - 800 1,387 - 1,387
premium
account
Retained (230) 70 (160) 106 17 123
earnings
Equity
holders 730 70 800 1,699 17 1,716
funds
attributa
ble to
the
parent
c) Reconciliation of Equity
30/06/06 31/12/06
�000 �000
Equity under UK GAAP 730 1,699
Write back of negative goodwill 70 70
Amortisation of customer contracts - (53)
Equity under IFRS 800 1,716
Explanatory notes to the UK GAAP to IFRS Reconciliations Income Statement
a. Under UK GAAP, goodwill was amortised over its estimated useful life. Under
IFRS3 `Business Combinations', goodwill is not amortised but is subject to
annual impairment review. In addition the directors have reviewed the balance
of negative goodwill upon transition to IFRS and have chosen to write off this
balance of negative goodwill. This has resulted in a credit to the income
statement of �70,000 for the six months ended 30 June 2006 and �70,000 for the
209 day period ended 31 December 2006. On transition to EU-adopted IFRS
goodwill amortisation under UK GAAP of �21,000 has been reversed and an IFRS
amortisation charge of �7,400 in relation to customer contracts has been made.
Balance Sheet
a. Under EU adopted IFRS an exercise has been undertaken to restate previous
acquisitions under IFRS 3 `Business Combinations' which has resulted in the
derecognition of goodwill previously arising on business combinations under UK
GAAP and the recognition of customer contracts as intangible assets arising from
previous acquisitions. These amounts have further increased at 30 June 2007
following the acquisition of Kiddie Rides (UK) Limited.
b. The increase in retained earnings at 30 June 2006 is made up as follows:
- net adjustments to the income statement of �70,000.
The increase in retained earnings at 31 December 2006 is made up as follows:
- net adjustments to income statement of �70,000.
There has been no effect on the company's cash flows as a result of the
transition to EU-adopted IFRS
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