RNS Number:1461M
Griffin Group PLC
15 November 2006
GRIFFIN GROUP plc
("Griffin" or the "Group")
PRELIMINARY RESULTS FOR THE YEAR ENDED 30TH SEPTEMBER 2006
FINANCIAL HIGHLIGHTS
*Turnover #8.83m (2005: #10.58m)
*Profit before tax #613,932 (2005: #565,885)
*Profit after tax #456,525 (2005: #184,507)
*Earnings per share 1.08p (2005: 0.46p)
*Net current assets #2,520,434 (2005: #2,557,016) including cash at bank
of #1,284,584 and publicly tradeable investments of #1,074,159
*Net assets #2,520,434 (2005: #1,913,909) equivalent to 5.77p per share
(2005: 4.71p)
CHAIRMAN'S STATEMENT
I am pleased to make this report on behalf of the Group.
In the year ended 30th September 2006, Group turnover was #8,834,618 (2005 -
#10,585,325), operating profit was #398,813 (2005 - #405,456), interest
receivable was #257,744 (2005 - #178,879), interest payable was #42,625 (2005 -
#18,450) and profit before tax was #613,932 (2005 - #565,885). Basic earnings
per share were 1.08 pence (2005 - 0.46 pence).
At 30th September 2006, the Group held cash balances of #1,284,584 (2005 -
#904,451) and marketable investments of #1,074,159 (2005 - #925,152).
Shareholders' funds had increased to #2,520,434 (2005 - #1,913,909), equivalent
to 5.77 pence per share (2005 - 4.71 pence per share).
On 16th December 2005, the Group announced the disposal of its US operations for
US$825,885, with effect from 1st October 2005. These disposal proceeds
represented the net assets disposed of plus US$200,000 of goodwill. The Board
made its decision to sell, based on the perceived lack of potential growth and
future profitability from the US business. This decision will ensure that
management can focus on the more profitable UK operations and obtain an inflow
of funds into the UK by converting the US balance sheet assets into cash.
The Directors are satisfied with the results for the year which reflect our
continuing strategy of establishing UK listed investment companies and then
finding suitable investment targets for them. The disposal of the US operations
has allowed the Board to focus on growing the profitable UK operation and we
continue to review possible investment and business development opportunities.
Griffin Corporate Finance Limited ("Griffin Corporate")
Business has continued to be busy through the initiation and flotation of PLUS
Market companies, with Griffin Corporate acting as both investor and agent. In
addition, efforts have been concentrated on completing the reverse acquisitions
of our existing investment companies and I am pleased to report that two such
transactions were completed in the last half of the year. Work on the remaining
investment companies has taken longer than anticipated and will require further
cash investment from either Griffin or the Stock Market.
Corporate finance fee income amounted to #3.15m (2005 - #3.16m) and investment
trading revenues totalled #5.4m (2005 - #5.4m).
The new PLUS Market Admissions promoted by Griffin Corporate were as follows:
Firenze Acquired a 49% interest in Parkgreen Communications Limited, a
Ventures plc provider of public relations and marketing services.
Worldwide Admitted with a strategy of investing in small to medium size
Natural companies with a focus on manufacturing, services or technology
Resources plc companies in the oil and gas exploration sectors.
Dovedale Acquired a 30% equity interest in Orientrose Contracts Limited, a
Ventures plc specialist building contractor primarily in the leisure industry.
One Charter plc An aircraft chartering, brokerage and management
company set up to capitalise on the growth in the
private aircraft charter sector.
One Media Holdings plc Formed to acquire and exploit audio and visual
copyright of mainstream music genres.
Red Dragon Investments plc Initial investment into an investment business
targeting the retailing and engineering sector, and the
benefits to be obtained from the lower costs of
manufacturing in China.
Reverse acquisitions completed during the
period:
Interbulk Investments plc Acquisition of United Transport Tankcontainers Holdings
B.V., an international tank container operator, and
Inbulk Technologies Limited, which specialises in the
transportation, storage, discharge and conveying of a
broad range of bulk solid materials.
Avid Holdings plc Acquisition of Pill Protect Limited (formerly 3 Point
Blue Limited), a pharmaceutical packaging company.
(formerly Euro Investment
Fund plc)
Clyde Process Solutions plc Acquisition of Clyde Materials Handling Limited, an
engineering-led solutions provider to the ferrous
metals, non-ferrous metals and minerals industries.
(formerly Process Handling
plc)
Griffin Corporate's policy is not to remain as a long-term shareholder in these
companies and whilst management agreements exist whereby Griffin provides
administrative support to these new PLUS Market companies, Griffin Corporate
looks to input appropriate new executives into these companies at an early
opportunity, once the strategic direction of each company has been determined.
Griffin Communications Limited ("Griffin Communications")
Griffin Communications Limited commenced trading in March 2006 as a provider of
marketing, investor relations, public relations and research services, and is
able to assist the companies that the Group brings to the Market by ensuring
they attract the attention of institutional and private shareholders and the
financial and trade press.
Group Financial Overview
During the year, the Group achieved pre tax profits of #613,932. The Group's net
assets as at 30th September 2006 amounted to #2,520,434, equivalent to 5.77
pence per share. Basic earnings per share have increased to 1.08p (2005 -
0.46p).
At 30th September 2006, the Group's cash balances were #1,284,584 and the Group
also held investments (publicly tradeable on markets in London and New York) at
book values totalling #1,074,159; all held for short term disposal. The balance
sheet debtors include #1.5m of convertible loan notes which are due for
repayment, if not converted into shares, between April 2007 and February 2008.
The recoverability of these amounts depends on a number of factors, including
the ability of the borrower to raise additional finance and/or the conversion of
the loans into equity, which itself will require approval from shareholders and
from the Takeover Panel, the completion of the acquisition of a suitable target
and realisation of the Group's resultant equity interest. The Directors are
currently exploring a number of alternative opportunities and are confident that
the value of the loan notes will be recovered in due course. Accordingly no
provision is considered necessary at this time. The Group's only debts were the
convertible loan notes which were repaid early, with a 10% discount, on 2nd
October 2006 for a total of #450,000.
The Directors consider that the Group's financial position and its trading
position are satisfactory.
The Directors continue to actively seek strategic opportunities to achieve
increases in the Group's market value. In the year under review, we have
increased the Group's profile, developed the UK operating business and increased
shareholder value.
The employees and advisers of the Group have worked hard to achieve these
results and the Board would like to thank all of them for their continuing
support and loyalty.
Stephen Dean
Chairman
GROUP PROFIT & LOSS ACCOUNT
For The Year Ended 30th September 2006
2006 2005
# #
TURNOVER - Continuing operations 8,834,618 9,021,499
- Discontinuing operations - 1,563,826
__________ __________
8,834,618 10,585,325
COST OF SALES (4,177,596) (5,275,093)
__________ __________
GROSS PROFIT 4,657,022 5,310,232
Administrative expenses (4,258,209) (4,904,776)
__________ __________
OPERATING PROFIT 398,813 405,456
- Continuing operations 398,813 949,503
- Discontinuing operations - (544,047)
Interest receivable & similar income 257,744 178,879
Interest payable (42,625) (18,450)
__________ __________
PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION 613,932 565,885
Taxation (157,407) (381,378)
__________ __________
RETAINED PROFIT FOR THE YEAR 456,525 184,507
========== ==========
Basic earnings per share (note 1) 1.08p 0.46p
Diluted earnings per share (note 1) 1.08p 0.45p
The Group made no recognised gains or losses other than the result for the year.
The continuing operations represent the UK operations which are continuing.
The discontinued operations represent the US operations which were disposed of
with effect from 1st October 2005.
GROUP BALANCE SHEET
As at 30th September 2006
2006 2005
# #
FIXED ASSETS
Intangible fixed assets - 100,000
Tangible fixed assets - 6,893
________ ________
- 106,893
________ ________
CURRENT ASSETS
Investments (note 5) 1,074,159 925,152
Debtors (note 6) 2,780,635 3,483,719
Cash at bank & in hand 1,284,584 904,451
_________ __________
5,139,378 5,313,322
CREDITORS: Amounts falling due within one
year
Convertible debt (450,000) (175,000)
Other creditors (2,168,944) (2,581,306)
_________ __________
NET CURRENT ASSETS 2,520,434 2,557,016
_________ __________
TOTAL ASSETS LESS CURRENT LIABILITIES 2,520,434 2,663,909
CREDITORS: Amounts falling due after more - (750,000)
than one year
_________ __________
NET ASSETS 2,520,434 1,913,909
========= ==========
CAPITAL & RESERVES
Called up share capital - equity 2,183,831 2,033,831
Share premium account 527,349 527,349
Profit & loss account (190,746) (647,271)
_________ __________
EQUITY SHAREHOLDERS' FUNDS 2,520,434 1,913,909
========= ==========
GROUP CASH FLOW STATEMENT
For The Year Ended 30th September 2006
2006 2005
# #
NET CASH INFLOW /(OUTFLOW) FROM 567,743 (574,506)
OPERATING ACTIVITIES (note 2)
RETURNS ON INVESTMENTS & SERVICING OF FINANCE
Interest received 257,744 178,879
Interest paid (42,625) (18,450)
________ ________
NET CASH INFLOW FROM RETURNS ON INVESTMENTS & SERVICING
OF FINANCE 215,119 160,429
TAXATION
UK corporation tax paid (407,269) (119,300)
CAPITAL EXPENDITURE & FINANCIAL INVESTMENT
Purchase of tangible fixed assets - (2,699)
________ ________
NET CASH OUTFLOW FROM CAPITAL EXPENDITURE & FINANCIAL
INVESTMENT - (2,699)
ACQUISITIONS & DISPOSALS
Net cash disposed of with subsidiary (100,103) -
Disposal of subsidiary undertaking 429,643 -
________ ________
NET CASH INFLOW FROM ACQUISITIONS & DISPOSALS 329,540 -
EQUITY DIVIDENDS PAID - -
________ ________
NET CASH INFLOW /(OUTFLOW) BEFORE FINANCING 705,133 (536,076)
________ ________
FINANCING
Issue of ordinary share capital 150,000 59,650
Costs of share issues - (30,623)
Debt finance introduced - 750,000
Debt finance repaid (475,000) (50,000)
________ ________
NET CASH (OUTFLOW)/INFLOW FROM FINANCING (325,000) 729,027
________ ________
INCREASE IN CASH (notes 3 & 4) 380,133 192,951
======== ========
NOTES
1 Earnings per share
The basic earnings per share are calculated by dividing the profit for the
financial year attributable to shareholders by the weighted average number of
shares in issue. In calculating the diluted earnings per share, share options
and warrants outstanding have been taken into account.
The weighted average number of shares were: 2006 2005
Number Number
Weighted average number of shares 42,324,981 40,405,344
Effect of outstanding warrants and options - 400,000
___________ __________
Adjusted weighted average number of ordinary shares 42,324,981 40,805,344
=========== ===========
2 Net cash inflow/(outflow) from operating activities
2006 2005
# #
Operating profit 398,813 405,456
Depreciation - 2,087
Amortisation - 105,744
Goodwill impairment write off - 372,712
Provision against investments 110,988 5,057
(Increase)/decrease in investments (258,943) 16,219
Decrease/(increase) in debtors 396,690 (2,842,038)
(Decrease)/ increase in creditors (79,805) 1,360,257
___________ __________
Net cash inflow/(outflow) from operating activities 567,743 (574,506)
=========== ==========
3 Reconciliation of change in cash to movement in net funds
2006 2005
# #
Increase in cash in the year 380,133 192,951
Debt finance introduced - (750,000)
Debt finance repaid 475,000 50,000
_______ _______
Movement in net funds 855,133 (507,049)
======== ========
4 Analysis of net cash and debt
2005 Cash flow Non-cash 2006
# # # #
Cash at bank 904,451 380,133 - 1,284,584
________ ________ ________ __________
Net funds 904,451 380,133 - 1,284,584
Debt due in less than one year (175,000) (425,000) 150,000 (450,000)
Debt due in more than one year (750,000) 750,000 - -
________ ________ ________ __________
(20,549) 705,133 150,000 834,584
======== ======== ======== ==========
5 The investments represent shares which are publicly tradeable on a recognised
market in either USA or UK.
6 The balance sheet debtors include #1.5m of convertible loan notes which are
due for repayment, if not converted into shares, between April 2007 and February
2008. The recoverability of these amounts depends on a number of factors,
including the ability of the borrower to raise additional finance and/or the
conversion of the loans into equity, which itself will require approval from
shareholders and from the Takeover Panel, the completion of the acquisition of a
suitable target and realisation of the Group's resultant equity interest. The
Directors are currently exploring a number of alternative opportunities and are
confident that the value of the loan notes will be recovered in due course.
Accordingly no provision is considered necessary at this time.
7 The Board of Directors does not propose to pay a dividend.
8 The financial information set out in this document has not been audited and
does not constitute statutory group accounts.
9 The report and accounts for the year to 30th September 2006 will be posted to
shareholders and, after being laid before the Annual General Meeting, will be
delivered to the Registrar of Companies.
Copies of the Report and Accounts will be available to the public, free of
charge, from the office of Griffin Group plc, Hilden Park House, 79 Tonbridge
Road, Hildenborough, Kent, TN11 9BH during normal office hours, with the
exception of Saturdays, Sundays and bank holidays, for one month from today.
Enquiries:
Griffin Group plc
Stephen Dean, Chairman 0034 605 282 211
Nabarro Wells & Co Limited
David Nabarro 020 7710 7400
This information is provided by RNS
The company news service from the London Stock Exchange
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