Innobox plc ("Innobox" or the "Company")
Interim results for the six months ended 31 October 2007
Chairman's statement
I report the Company's results for the six months ended 31 October 2007. The
loss for the period after taxation and minority interests was �234,300 (2006:
loss of �259,125), which represents a loss per share of 0.64p (2006: loss per
share of 0.71p). These results for the half year, which are unaudited, have
been prepared in accordance with IFRS 1 being the first time adoption of
International Financial Reporting Standards (IFRS).
The Company currently owns and operates two pub / restaurant / hotel sites,
which are: The Moss Cottage in Ripley, Derbyshire and The Royal Oak in
Leominster, Herefordshire. Innobox also owns the freehold interest of The
Three Tuns in Pettistree, Suffolk, which is leased out to private tenants under
a three year lease agreement.
Since my statement at the time of the annual results, difficult market
conditions have unfortunately continued and have in fact deteriorated. Since
the interim period end anticipated levels of trade over the traditionally busy
Christmas period were not up to expectations. Our experience reflects the
difficult market conditions experienced by other small pub / restaurant / hotel
companies who have reported their Christmas trading.
As a result of these prolonged difficult trading conditions, the directors have
taken the advice of an insolvency practitioner to determine the best course of
action to provide a maximum return to members and creditors. Following these
discussions the directors intend to propose a Company Voluntary Arrangement
("CVA") for each of the subsidiary companies Moss Cottage Hotels Limited and I
M Hotels Limited and creditors' meetings to consider these proposals are
expected to be held in February 2008. The AIM-quoted holding company, Innobox
plc, is not contemplating any form of insolvency procedure. If these CVAs are
approved, this will enable Innobox to release its guarantees to the
subsidiaries and then potentially dispose of them.
As I reported in my Chairman's Statement of 30 October 2007, the board has been
reviewing a strategy to exit the licensed trade sector. We have held
discussions with several possible interested parties and the board is hopeful
that as a result of these discussions it will lead to a better outcome for
shareholders. Further announcements will be made in due course.
Finally, I would like to take this opportunity to thank my colleagues and our
dedicated employees for their hard work during these continuing difficult
trading times.
A Baker
Non Executive Chairman
30 January 2008
Consolidated Income Statement for the six months ended 31 October 2007
Notes 6 months 6 months Year
ended ended ended
31 October 31 October 30 April
2007 2006 2007
(unaudited) (unaudited) (audited)
� � �
Revenue 336,253 375,717 701,352
Cost of sales (231,167) (269,073) (487,697)
----------- ----------- -----------
Gross profit 105,086 106,644 213,655
Administrative expenses - (263,358) (297,969) (623,132)
continuing
Administrative expenses - (222) - 190,897
exceptional
----------- ----------- -----------
Total administrative (263,580) (297,969) (432,235)
expenses
----------- ----------- -----------
Operating loss (158,494) (191,325) (218,580)
Profit on disposal of fixed - - 1,116
assets
Finance income 2,565 - 94
Finance costs (78,371) (67,800) (141,857)
----------- ----------- -----------
Net finance cost (75,806) (67,800) (141,763)
Loss before taxation (234,300) (259,125) (359,227)
Taxation 5 - - -
----------- ----------- -----------
Loss after taxation (234,300) (259,125) (359,227)
----------- ----------- -----------
Attributable to:
Parent company's (234,300) (259,125) (359,227)
shareholders
Minority interests - - -
----------- ----------- -----------
Loss transferred to (234,300) (259,125) (359,227)
reserves
----------- ----------- -----------
Basic loss per share 6 (0.64) (0.71) (0.98)
(pence)
----------- ------------ ----------
The Company has no recognised gains or losses other than the losses for the
periods.
Consolidated Balance Sheet as at 31 October 2007
Note As at As at As at
31 October 31 October 30 April
2007 2006 2007
(unaudited) (unaudited) (audited)
� � �
Non-current assets
Property, plant and equipment 1,895,056 1,995,443 1,945,298
Current assets
Inventories 8,812 12,517 10,598
Trade and other receivables 80,389 41,951 97,142
Short term investment - 627,260 -
Cash and cash equivalents 9,433 2,617 172,672
----------- ----------- ------------
98,634 684,345 280,412
----------- ----------- ------------
Total assets 1,993,690 2,679,788 2,225,710
Current liabilities
Bank loans and overdrafts (308,018) (1,137,961) (280,405)
Trade and other payables (872,187) (868,416) (874,216)
Financial Liabilities (11,482) (9,278) (10,846)
----------- ----------- ------------
(1,191,687) (2,015,655) (1,165,467)
----------- ----------- ------------
Non-current liabilities
Bank loan (1,325,428) (856,321) (1,346,852)
Financial liabilities (3,708) (543) (6,224)
----------- ----------- ------------
(1,329,136) (856,864) (1,353,076)
----------- ----------- ------------
Total liabilities (2,520,823) (2,872,519) (2,518,543)
----------- ----------- ------------
Net liabilities (527,133) (192,731) (292,833)
----------- ----------- ------------
Shareholder funds
Issued capital 730,000 730,000 730,000
Share premium account 1,062,364 1,062,364 1,062,364
Profit and loss account (2,319,497) (1,985,095) (2,085,197)
----------- ----------- ------------
Equity shareholders' funds 7 (527,133) (192,731) (292,833)
Minority interests (equity) - - -
----------- ----------- ------------
Total equity (527,133) (192,731) (292,833)
----------- ----------- ------------
Consolidated Cash Flow Statement for the six months ended 31 October 2007
Notes 6 months 6 months Year
ended ended ended
31 October 31 October 30 April
2007 2006 2007
(unaudited) (unaudited) (audited)
� � �
Cash (outflow)/inflow from 8 (79,612) 57,075 41,460
operating activities
Cash (outflow)/inflow from
investing activities
Finance income received 2,565 - 94
Purchase of property, plant (12,130) (46,205) (55,172)
and equipment
Proceeds from disposal of
short term investments
- - 628,376
----------- ----------- ------------
Net cash (outflow)/inflow (9,565) (46,205) 573,298
from investing activities
Cash (outflow)/inflow from
financing activities
Finance cost paid (78,371) (67,800) (141,857)
Repayment of borrowings in - - (352,625)
full
Repayment of borrowings (11,544) (9,535) (16,309)
Increase in borrowings 17,363 - 22,500
New finance leases and hire - - 11,719
purchase contracts
Capital element of finance (1,880) (5,072) (9,542)
lease rentals
----------- ----------- ------------
Net cash outflow from (74,432) (82,407) (486,114)
financing activities
----------- ----------- ------------
Net (decrease)/increase in 9 (163,609) (71,537) 128,644
cash and cash equivalents
Cash and cash equivalents at (29,157) (157,801) (157,801)
beginning of period
----------- ----------- ------------
Cash and cash equivalents at (192,766) (229,338) (29,157)
end of period
----------- ----------- ------------
Notes to the Interim Report for the six months ended 31 October 2007
1 Basis of preparation
These interim condensed consolidated financial statements are for the
six months ended 31 October 2007. In compliance with the AIM Rules
they have been prepared in accordance with IAS 34 "Interim Financial
Reporting" and the requirements of IFRS 1 "First-time Adoption of
International Reporting Standards" relevant to interim reports, because
they are part of the period covered by the Group's first IFRS financial
statements for the year ended 30 April 2008. They do not include all
of the information required for full annual financial statements, and
should be read in conjunction with the consolidated financial
statements of the group for the year ended 30 April 2007.
These consolidated interim financial statements (the "interim financial
statements") have been prepared with the accounting policies set out
below which are based on the recognition and measurement principles of
IFRS in issue as adopted by the European Union (EU) and are effective
at 30 April 2008 or are expected to be adopted and effective at 30
April 2008.
Innobox plc's consolidated financial statements were prepared in
accordance with United Kingdom accounting standards (United Kingdom
Generally Accepted Accounting Practice) until 30 April 2007. The date
of transition to IFRS was 1 May 2006. The comparative figures in
respect of 2006/07 have been restated, where required, to reflect
changes in accounting policies as a result of adoption of IFRS. The
disclosures required by IFRS 1 concerning the transition from UK GAAP
to IFRS are given in reconciliation schedules and presented as they are
required in the notes to the interim report.
The financial information set out in this report does not constitute
statutory accounts as defined in section 240 of the Companies Act
1985. The figures for the year ended 30 April 2007 have been extracted
from the statutory financial statements, which have been filed with the
Registrar of Companies. The auditors' report on those financial
statements was unqualified
2 Accounting policies
The accounting policies have been applied consistently throughout the
Group for the purposes of the preparation of these consolidated interim
financial statements. Where required under IFRS the principal
accounting policies of the Company have been transitioned from those
set out in the Company's 2007 annual report and financial statements.
Leases
In accordance with IAS 17 (revised 2003), the economic ownership of a
leased asset is transferred to the lessee if the lessee bears
substantially all the risks and rewards related to the ownership of the
leased asset. The related asset is recognised at the time of inception
of the lease at the fair value of the leased asset or, if lower, the
present value of the lease payments plus incidental payments, if any,
to be borne by the lessee. A corresponding amount is recognised as a
finance leasing liability, irrespective of whether some of these lease
payments are payable up-front at the date of inception of the lease.
Subsequent accounting for assets held under finance lease arrangements,
i.e. depreciation methods and useful economic lives, correspond to
those applied to comparable acquired assets.
3 Consolidation and investments in subsidiaries
Subsidiaries are all entities over which the Group has the power to
control the financial and operating policies. The Group obtains and
exercises control through voting rights. The consolidated financial
statements of the Group incorporate the financial statements of the
parent company as well as those entities controlled by the Group by
full consolidation. Material intra-group balances and transactions,
and any unrealised gains or losses arising from intra-group
transactions, are eliminated in preparing the consolidated financial
statements.
4 Dividends
No dividend is proposed for the six months ended 31 October 2007.
5 Taxation
On the grounds that year to date losses have been made which are not
expected to be relieved in the forthcoming period, there is no taxation
charged or credited to the profit and loss account in this period.
Subsequently no provision has been provided for deferred tax as it is
deemed that should any liability fall due that these will be offset
against brought forward and current trade losses.
6 Loss per share
The calculation of the basic loss per share is based on the loss on
ordinary activities after tax and minority interests and on the
weighted average number of shares in issue during the period. The
impact of share options is anti dilutive. The loss and weighted
average number of shares used in the calculations are set out below:
Weighted Loss per
Loss average number share
� of shares (pence)
Basic earnings per
share:
6 months ended 31 (234,300) 36,500,000 (0.64)
October 2007
6 months ended 31 (259,125) 36,500,000 (0.71)
October 2006
Year ended 30 April (359,227) 36,500,000 (0.98)
2007
7 Consolidated statement of
changes in equity shareholders'
funds
6 months 6 months Year
ended ended ended
31 October 31 October 30 April
2007 2006 2007
(unaudited) (unaudited) (audited)
� � �
Loss for the financial period (234,300) (259,125) (359,227)
after taxation
----------- ----------- ------------
Net reduction in equity (234,300) (259,125) (359,227)
shareholders' funds
Equity shareholders' funds (292,833) 66,394 66,394
brought forward
----------- ----------- ------------
Equity shareholders' funds at
the end of the period
(527,133) (192,731) (292,833)
----------- ----------- ------------
8 Reconciliation of operating loss
with net cash flow from
operating activities
6 months 6 months Year
ended ended ended
31 October 31 October 30 April
2007 2006 2007
(unaudited) (unaudited) (audited)
� � �
Operating loss (158,494) (191,325) (218,580)
Depreciation, amortisation and 62,372 56,620 115,732
impairment
Decrease in stocks 1,786 10,861 12,780
Decrease/(increase) in debtors 16,753 43,736 (11,455)
(Decrease)/increase in creditors (2,029) 137,183 142,983
----------- ----------- ------------
Net cash (outflow)/inflow from (79,612) 57,075 41,460
operating activities
----------- ----------- ------------
9 Reconciliation of net cash
flow to movement in net funds
6 months 6 months Year
ended ended ended
31 October 31 October 30 April
2007 2006 2007
(unaudited) (unaudited) (audited)
� � �
(Decrease)/increase in cash (163,609) (71,537) 128,644
and cash equivalent for the
period
Repayment of borrowings 11,544 9,535 368,934
Increase in borrowings (17,363) - (22,500)
Increase in finance leases and - - (11,719)
hire purchase contracts
Repayment of finance leases 1,880 5,072 9,542
and hire purchase contracts
------------ ------------ ------------
Movement in net borrowings for (167,548) (56,930) 472,901
the period (note 10)
Net borrowings at the (1,569,655) (2,042,556) (2,042,556)
beginning of the period
------------ ------------ ------------
Net borrowings at the end of (1,737,203) (2,099,486) (1,569,655)
the period
------------ ------------ ------------
10 Analysis of changes in net
debt
As at Cash flow As at
1 May 31 October
2007 2007
(audited) (unaudited)
� � �
Cash at bank 172,672 (163,239) 9,433
Bank overdrafts (201,829) (370) (202,199)
------------ ------------ ------------
Cash and cash equivalents (29,157) (163,609) (192,766)
Bank loans (1,425,428) (5,819) (1,431,247)
Loan notes (98,000) - (98,000)
Finance leases and hire (17,070) 1,880 (15,190)
purchase contracts
------------ ------------ ------------
Net debt (1,569,655) (167,548) (1,737,203)
------------ ------------ ------------
11 Copies of the Interim Results are available for download from the
Company's website at www.innobox.co.uk or by request from the
Company's registered office, Meriden House, 6 Great Cornbow,
Halesowen, West Midlands B63 3AB.
Enquiries:
Russell Stevens 07860 562621
Chief Executive, Innobox Plc russell@innobox.co.uk
Tim Feather / Matthew Johnson 0113 246 2610
Hanson Westhouse Limited tim.feather@hansonwesthouse.com
END
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