RNS Number:9573L
Screen FX PLC
06 May 2005
6 May 2005
ScreenFX plc
Maiden results; major agreement with Westfield
ScreenFX plc, which offers digital screen advertising in shopping centres across
the UK, today announces its maiden results for the period to 31 December 2004.
Key points:
* Network of 125 plasma screens in eight of the UK's premier shopping
malls, including MetroCentre, Gateshead and Lakeside, Thurrock
* Two more Scottish networks expected to be installed by Summer 2005
* Westfield agreement will add a further seven malls by the end of 2005
and increase the ScreenFX audience 50% to approximately 300 million
shoppers annually.
* Major advertisers using the network now include Warner Bros, Carphone
Warehouse, 3 Mobile, Samsung and The National lottery.
* New market research has confirmed the very high impact of screens
amongst key advertising targets
* Turnover for the period was #342,524 with an operating loss of
#2,061,565
* Cash in hand of #1.9 million at 30 April 2005
* ScreenFX is now the UK's leading digital screen advertising company
Richard Nichols, Chairman of ScreenFX, said:
"This was a very exciting year in terms of the Group's development since the
flotation in March 2004. From a standing start we now have a fully operational
network offering big screen advertising to over 200 million consumers and the
Westfield agreement announced today will raise that even further. We believe
our market has the potential to grow strongly this year as advertisers realise
the benefits of being able to communicate interactively with consumers at the
point when they are ready and able to buy. We had the vision to become a leader
in our sector and are now well positioned to maintain and build our share of
this fast-growing market."
For further information please contact:
ScreenFX plc Tel: 0161 428 5544
David Clark
Citigate Dewe Rogerson Tel: 020 7638 9571
Patrick Toyne Sewell/Fiona Bradshaw
Chairman's Statement
This was a very exciting year in terms of the Group's development since the
flotation in March 2004. From a standing start we now have a fully operational
network of around 125 screens, in eight major shopping centres across the UK,
including MetroCentre, Gateshead and Lakeside, Thurrock. With two more premier
centres due to be installed by this summer, Braehead, Glasgow, and the St James
Centre, Edinburgh's premier shopping centre, our screens will provide access to
a national audience of approximately 200 million shoppers a year. The rollout,
which means that we have been able to gain critical mass and a leadership
position in the fast growing "out of home" digital advertising market, has been
carried out in line with the promises we gave at the time of the flotation both
in terms of delivery date and budget.
We have today also announced a prestigious new agreement with Westfield
Shoppingtowns Limited, which will add a further seven malls by the end of 2005
and increase the network by 50% to approximately 300 million shoppers annually.
The flotation on the AIM market has been an excellent opportunity for us as it
gave us access to the capital we required to install the network and roll out
the screens, support our profile as we started to build awareness amongst
potential users of the ScreenFX concept and, most importantly, has given us
access to additional funding as it has been required. Another important
development has been our partnership with BT Broadcast Services which will
enable us to accelerate the next phase of our network development through an
efficient financing structure as we look to double the size of our network
during the year ahead. This partnership also has the benefit of providing
valuable ongoing technical support for the network.
I would like to take the opportunity to thank our staff for all their hard work
over the past year, which has been one of enormous change for the Group. Their
skills, experience, dedication and hard work will enable us to continue the fast
growth of the business and maintain our leadership of the digital advertising
market over the next year.
We believe our market has the potential to grow strongly this year as
advertisers realise the benefits of being able to communicate interactively with
consumers at the point when they are ready and able to buy. We have had the
vision to become a leader in our sector and are now well positioned to maintain
and build our share of this fast-growing market. The key drivers to our
development are the rollout of our network into more locations, thereby
establishing critical scale, and achieving revenue adoption amongst our target
customers, the major consumer brands, their advertising agencies and their media
buyers. We will continue to work hard towards achieving both these critical
goals during 2005.
Richard Nichols
Chairman
Chief Executive's review
Introduction
This has been a tremendously important and exciting period for the Group. Since
the company's successful flotation on the AIM market in March 2004 we have
delivered all the key milestones important to the first phase of our business
development in line with the promises we made in our Prospectus. We look
forward to the coming period with enthusiasm as we build on our leadership
position in the fast growing "out of home" digital advertising market.
Westfield agreement
ScreenFX today agreed a six year licence with Westfield Shoppingtowns Limited,
the largest shopping centre owner in the world. The agreement will lead to the
installation of ScreenFX's InfoPod system into all seven of Westfield's UK
shopping malls, adding around 100 million consumers to the ScreenFX audience.
The quality of the Westfield centres, which include Merry Hill, the biggest mall
in the Birmingham area, and Castle Court, the lead mall in Northern Ireland,
adds further prestige to the existing ScreenFX portfolio. With this agreement
ScreenFX has further consolidated its dominant position for digital screen
advertising amongst the UK's top shopping malls.
The rollout of the Westfield InfoPods, with a total of 96 plasma advertising
screens, is expected to be completed by the end of 2005, boosting the total
audience for the ScreenFX network by 50% to approximately 300 million shoppers
annually.
Financial results
The Group's trading started with the acquisition of High Profile UK Limited
("HPUK") and BigFX Limited ("BFX") by ScreenFX on 18 February 2004. This was
followed on 5 March 2004 by the Group's successful placing of 50 million
ordinary shares at 10 pence per share raising #4.4m (after expenses) in order to
exploit and develop the Group's digital screen advertising business. The Group
was admitted to AIM on 10 March 2004.
On 6 January 2005, the Group placed 26,666,668 new ordinary shares at 7.5 pence
per share, raising #1.92 million (after expenses). The Group is using the funds
raised to roll out its network across the UK.
Turnover for the period was #342,000, with the majority of revenues being
generated by BigFX as there was no opportunity for revenues from the ScreenFX
network until the beginning of the second half, once the build out and testing
phase was completed, with no significant contracts signed until the final
quarter of the year. Whilst we have delivered on our internal 2004 revenue
forecasts, the rate of media adoption is expected to build slowly in 2005 with
greater momentum coming in 2006-2007 as we establish a network with critical
scale and digital channels become more established.
The Group continues to place a strong focus on controlling costs and minimising
working capital levels.
The total Group operating loss for the period to 31 December 2004 was #2.06m.
Capital expenditure in the period was #2.0 million, most of which was spent on
our information pods, screens and computer equipment. Cash in hand at 31
December 2004 was #0.7 million and stood at approximately #1.9 million at 30
April 2005 following the aforementioned placing.
As mentioned in the Prospectus, the strategy of the Directors is to generate
capital growth for shareholders. The Directors will recommend the payment of
dividends when it becomes commercially prudent to do so and then subject to the
availability of distributable reserves and the retention of funds required to
finance future growth. For these reasons the Group will not be paying a
dividend in respect of 2004.
Business and operating review
Our initial strategy was to install 150 digital flat screen advertising displays
into nine leading shopping centres nationwide, delivering major brand
advertising and customer information and establish the leading screen network in
the UK shopping mall environment.
At the beginning of the year we secured a ten year agreement with Liberty
International to be the exclusive provider of digital screen media in their
leading Capital Shopping Centres. The nine malls give us a strong presence in
six of the top 20 ranked UK malls, including the Metro Centre Gateshead and
Lakeside Thurrock.
The installation of the network for these malls was completed in July 2004, on
time and on budget. The Group now has 54 Info Pods, and 125 large plasma
screens, operational in these premier shopping malls. Our network provides
access, at the point of purchase, to a target audience of almost 160 million
shoppers a year in some of the UK's major shopping malls:
Shopping centre Location Annual throughput
(footfall)
Lakeside Thurrock 25.6 million
The Glades Bromley 19.0 million
The Harlequin Watford 17.0 million
The Chimes Uxbridge 10.3 million
Victoria Centre Nottingham 22.9 million
The Potteries Stoke-on-Trent 13.0 million
MetroCentre Gateshead 28.0 million
Eldon Square Newcastle 24.9 million
Our first network installation in Scotland at St James, the premier mall in
Edinburgh, will take place during May 2005. This will be followed shortly
afterwards by the installation of our screens in the Braehead shopping centre,
Glasgow. With these two malls added to the network we will be able to offer our
customers a target audience of circa 200 million shoppers a year.
We remain confident that the mall environment presents one of the best
opportunities to develop a premium media product and we are on track to
establishing and owning the lead network in this space. In recent months we
have made good progress advancing negotiations with other leading malls and
groups. Our objective is to add coverage of key UK cities whilst building a
dominant position amongst the top 50 ranked malls. This will also deliver the
critical mass that is required to accelerate media adoption in the latter part
of 2005 and through 2006.
It is imperative that we continue to drive expansion of the network and secure
the premium space in our environment. Competitive activity is increasing and
some of the bigger players in the outdoor media sector are recognising the
massive opportunities presented by digital screen technologies. To this end, we
raised an additional #1.92 million (net of expenses) of capital through a
Placing in January 2005 and this is being used to fund further network
expansion.
The product has been well received by all the leading players in the media
industry and once the network was in place we had a number of blue chip brand
advertisers trialling the medium, including Mars, McDonalds, BT, Sony Music, and
Disney Home Video. In the final quarter of the year we took on our first paying
customers, including major brands such as Camelot for the National Lottery, 3's
mobile services and Warner Bros, while many other major advertisers continued to
trial the system.
The potential benefits of our network to advertisers were highlighted by
research undertaken by IPSOS-RSL Limited, a specialist media and audience
research organisation, during the initial network build phase. The research
results were highly encouraging for the Group, demonstrating to advertisers that
ScreenFX delivers a very valuable audience to advertisers with high levels of
awareness of the screens and their content.
The key findings of the research project were as follows:
* Demographics delivered by ScreenFX:
o 62% ABC1
o 65% female
o 51% chief income earners
o 67% 16 to 44 years old
* High impact of screens generating positive consumer reaction amongst
shoppers
o Over 50% were aware of the screens
o 81% thought the screens were "a good idea"
o 13% stated that the screens directly prompted a decision to purchase.
These findings compare extremely favourably with the impact of traditional 6
sheet posters currently used by the outdoor advertisement industry and highlight
the positive consumer reaction to the proposition and the strong impact of the
screen messaging.
The technology and network has proved to be flexible and robust and is able to
show various advertisements as well as local news relevant to each shopping
centre. The system also allows ScreenFX to change the advertising reel during a
campaign, allowing advertisers to react to changing events in an efficient and
cost-effective manner.
In November we announced another important milestone in our business development
with a three year agreement with BT Broadcast Services ("BTBS"). This will
underpin the further rollout of our network whilst offering us access to
evolving technologies in our rapidly changing environment.
The market
The general market indicators remain strong with out-of-home media spending
continuing to grow its share of the total market, now accounting for almost 10%
of all media spending in the UK. This reflects both the fragmentation of TV as
well as changing consumer lifestyle habits. The enormous potential of
out-of-home screen networks is being recognised by all the leading media
agencies and they are forecasting a strong migration of spend towards these
networks through 2006-2008.
Inevitably there are opportunities to expand into new channels, applying our
knowledge and skills in digital media network development, and we are currently
exploring entry routes into several new channels.
BigFX
BigFX provides large banner advertising. In the first half of the year
resources and personnel were directed to support the digital screen business and
sales demand fell compared to the same period last year. However, a pick up in
activity in the second half of the year has re-established BigFX within this
niche market, and cemented our position as a provider of quality sites located
in prime locations throughout the UK. The banner market is currently dominated
by 2 large contractors but we have continued to create a perception within the
media buying fraternity that BigFX offers a real alternative for their client's
needs. We are therefore confident that revenues will build positively again in
the second half of 2005.
People
It is also important that the right management resources are in place to support
our drive towards market leadership. In this context, we are very pleased that
we have developed a strong leadership team during our launch phase and attracted
some high calibre, experienced professionals to the business during 2004. The
quality and experience of our management team puts us in a good position to
develop the business in the medium to long term.
Outlook
It is vital we stay ahead of our competition in terms of product development and
technology. To this end we are working hard with our strategic partners and
other key suppliers to test new and improved product offers. The focus of this
work is to deliver value-added propositions which enhance the consumer
experience: essentially providing the right content in the right format at the
right time. If we get this product evolution right, the value of our offer will
be enhanced to our property partners, the retail tenants in their malls and our
advertising customers.
We believe our market is going to grow strongly this year as advertisers realise
the benefits of being able to communicate interactively with consumers at the
point when they are ready and able to buy. We have had the vision to become a
leader in our sector and are now well-positioned to maintain and build our share
of this fast-growing market.
Dave Clark
Chief Executive Officer
ScreenFX plc (formerly Decform plc)
Consolidated profit and loss account
for the period ended 31 December 2004
Notes
2004
#
TURNOVER 1 342,524
Cost of sales (313,395)
Gross profit 29,129
Other operating expenses (net) 2 (2,090,694)
LOSS ON ORDINARY ACTIVITIES BEFORE INTEREST
(2,061,565)
Investment income 3 47,421
(2,014,144)
Interest payable 4 (25,638)
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION 5 (2,039,782)
Taxation 7 19,867
RETAINED LOSS FOR THE PERIOD 13
(2,019,915)
Earnings per ordinary share - basic 15 (2.10)p
Earnings per ordinary share - diluted 15 (2.10)p
The operating loss for the period arises from the Group's continuing operations.
No separate Statement of Total Recognised Gains and Losses has been presented as
all such gains and losses have been dealt with in the Profit and Loss Account.
ScreenFX plc (formerly Decform plc)
Consolidated balance sheet
31 December 2004
Notes 2004
#
FIXED ASSETS
Intangible assets 9 1,178,820
Tangible assets 10 1,895,234
3,074,054
CURRENT ASSETS
Debtors 418,859
Cash at bank and in hand 666,175
1,085,034
CREDITORS: Amounts falling due within one year (639,562)
NET CURRENT ASSETS 445,472
TOTAL ASSETS LESS CURRENT LIABILITIES 3,519,526
CREDITORS: Amounts falling due after more than one year (433,988)
3,085,538
CAPITAL AND RESERVES
Called up share capital 12 1,200,000
Share premium account 13 3,905,453
Profit and loss account 13 (2,019,915)
SHAREHOLDERS' FUNDS 3,085,538
ScreenFX plc (formerly Decform plc)
Company balance sheet
31 December 2004
Notes 2004
#
FIXED ASSETS
Investments 11 699,996
CURRENT ASSETS
Debtors 56,581
Cash at bank and in hand 441,371
497,952
CREDITORS: Amounts falling due within one year (38,388)
NET CURRENT ASSETS 459,564
TOTAL ASSETS LESS CURRENT LIABILITIES 1,159,560
CREDITORS: Amounts falling due after more than one year -
1,159,560
CAPITAL AND RESERVES
Called up share capital 12 1,200,000
Share premium account 13 3,905,453
Profit and loss account 13 (3,945,893)
SHAREHOLDERS' FUNDS 1,159,560
ScreenFX plc (formerly Decform plc)
Consolidated cash flow statement
for the period ended 31 December 2004
Notes 2004
#
Cash flow from operating activities 14a (2,222,653)
Returns on investments and servicing of finance 14b 21,783
Taxation (32,463)
Capital expenditure and servicing of finance 14b (1,912,967)
CASH OUTFLOW BEFORE FINANCING (4,146,300)
Financing 14b 4,794,781
--
INCREASE/ (DECREASE) IN CASH IN THE PERIOD 648,481
RECONCILIATION OF NET CASH
2004
#
Net cash acquired with subsidiaries 17,694
Increase/(decrease) in cash in the period 648,481
666,175
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN DEBT
2004
Increase/ (decrease) in cash in the period 648,481
Change in net debt resulting from cash flows (401,828)
Bank loan repaid 12,500
MOVEMENT IN NET DEBT IN PERIOD 259,153
NET DEBT ACQUIRED (275,911)
NET DEBT AT 31 DECEMBER 2004 14 (16,758)
ScreenFX plc (formerly Decform plc)
Accounting policies
Basis of accounting
The financial statements have been prepared under the historical cost convention
and in accordance with applicable accounting standards.
Going concern
The group has incurred a loss of #2m for the period, and has net current assets
at the balance sheet date of #0.4m. Following a successful fundraising in
January 2005, which raised #2m before expenses, the directors have prepared
projections for the group for the current financial year. These demonstrate
that the group can continue to meet its liabilities as they fall due for a
period of at least twelve months from the date of signing these financial
statements. On this basis, the directors consider it appropriate to prepare the
financial statements on a going concern basis.
Basis of consolidation
The consolidated financial statements incorporate those of ScreenFX plc and all
of its subsidiary undertakings for the period. Subsidiaries acquired during the
period are consolidated using the acquisition method. Their results are
incorporated from the date that control passes. The fair value of the shares
issued to acquire the trading subsidiaries was assessed as nominal value. The
difference between the cost of acquisition of shares in subsidiaries and the
fair value of the separable net assets acquired is capitalised and written off
on a straight line basis over its estimated economic life. All financial
statements are made up to 31 December.
Tangible fixed assets
Fixed assets are stated at historical cost less accumulated depreciation.
Depreciation is provided on all tangible fixed assets at rates calculated to
write each asset down to its estimated residual value evenly over its expected
useful life, as follows:-
I-pods and Plasma Screens 20% on cost
Computer equipment 33% on cost
Fixtures, fittings and office equipment 15% on cost
Motor vehicles 25% on cost
Investments
Fixed asset investments are stated at cost less provision for diminution in
value.
Goodwill
Goodwill representing the excess of the purchase price compared with the fair
value of net assets acquired is capitalised and written off evenly over 10 years
as in the opinion of the Directors this represents the period over which the
goodwill is effective.
Research and Development
Research and development expenditure is written off to the profit and loss
account in the period in which it is incurred.
Deferred taxation
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 tax in the future or a right to
pay less tax in the future have occurred at the balance sheet date. Timing
differences between the Group's taxable profits and its results as stated in the
financial statements.
Deferred tax is measured at the average tax rates that are expected to apply in
the periods in which timing differences are expected to reverse, based on tax
rates and laws that have been enacted or substantially enacted by the balance
sheet date. Deferred tax is measured on a non-discounted basis.
Leased assets and obligations
Where the company enters into a lease that entails taking substantially all the
risks and rewards of ownerships of an asset, the lease is treated as a finance
lease. The asset is recorded in the balance sheet as a tangible fixed asset and
is depreciated in accordance with the above depreciation policies. Future
instalments under such leases, net of finance charges, are included with
creditors. Rentals payable are apportioned between the finance element, which
is charged to the profit and loss account on a sum of digits basis, and the
capital element which reduces the outstanding obligation for future instalments.
Pension contributions
The amount charged to the profit and loss account in respect of pension costs is
the contributions payable in the year. Differences between contributions payable
in the year and contributions actually paid are shown as either accruals or
prepayments in the balance sheet.
Foreign currency translation
Monetary assets and liabilities denominated in foreign currencies are translated
into sterling at the rates of exchange ruling at the accounting date.
Transactions in foreign currencies are recorded at the rate ruling at the date
of the transaction.
All differences are taken to profit and loss account.
Turnover
The turnover shown in the profit and loss account represents amounts invoiced
during the period, exclusive of value added tax.
ScreenFX plc (formerly Decform plc)
Notes to the financial statements
1 TURNOVER AND PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION
The Group's turnover and profit before taxation were all derived from its
principal activity, in the United Kingdom.
Sales originated from the following networks:
2004
#
Banners 222,637
Digital network 118,899
Other 988
342,524
Loss before tax originated from the following business units:
2004
#
Banners 25,130
Digital network (1,766,528)
Central costs and amortisation (298,384)
(2,039,782)
2 OTHER OPERATING EXPENSES (NET) 2004
#
Sales and Marketing expenses 566,681
Product and network development expenses 216,051
Administrative and other expenses 938,342
Depreciation 250,657
Amortisation of goodwill 118,963
2,090,694
3 INVESTMENT INCOME 2004
#
Bank interest receivable 47,421
4 INTEREST PAYABLE 2004
#
Bank loan 9,171
Hire purchase and leasing 15,880
Other interest 587
25,638
5 LOSS ON ORDINARY ACTIVITIES 2004
#
Loss on ordinary activities before taxation is stated after
charging:
Amortisation of intangible fixed assets 118,963
Depreciation and amounts written off tangible fixed assets:
Charge for the period
- owned assets 197,750
- hire purchase and leased assets 52,907
Auditors' remuneration- audit fees 17,100
Auditors' remuneration- non-audit fees:
- further assurance services 7,000
- tax compliance 3,900
- tax advisory 10,684
Auditor's remuneration for non-audit fees (further assurance
services) charged
to the share premium account totalled #35,000.
6 EMPLOYEES 2004
No.
The average monthly number of persons (including executive directors) employed
by the group during the period was:
Sales and Marketing 9
Product and Network development 6
Other 10
25
2004
#
Staff costs for above persons:
Wages and salaries 839,111
Social security costs 98,514
Other pension costs 40,669
978,294
6 EMPLOYEES (continued) 2004
#
DIRECTORS' REMUNERATION
Emoluments 200,380
Amounts paid to money purchase pension schemes 35,461
Total emoluments 235,841
2004
No
The number of directors to whom relevant benefits
are accruing under money purchase pension schemes was: 2
2004
#
Emoluments for qualifying services 100,190
Company pension scheme contributions to money purchase schemes 17,731
7 TAXATION
2004
#
Current Tax:
UK corporation tax at 30% on loss of the period
Adjustments in respect of previous periods (19,867)
Total current tax (19,867)
Deferred tax -
Tax on loss on ordinary activities (19,867)
7 TAXATION (continued)
TAX RECONCILIATION
Factors affecting tax charge for the period
2004
#
The current tax charge varies from the standard corporation tax charge for
the following reasons:
Loss on ordinary activities before tax (2,039,782)
Loss on ordinary activities multiplied by the standard rate of corporation (611,935)
tax in the UK of 30%.
Effects of:
Expenses not deductible for tax purposes
(primarily goodwill amortisation) 103,570
Capital allowances in excess of depreciation (161,744)
Unrelieved tax losses 670,109
Adjustment in respect of previous periods (19,867)
Tax charge/ (credit) for the period (19,867)
8 RETAINED PROFIT FOR THE PERIOD
As permitted by s230 Companies Act 1985, the company has not presented its own
profit and loss account. Of the retained loss for the period, a loss of
#3,945,893 is attributable to the activities of the holding company, comprising
a provision on inter-company loans of #3,986,472 and other income of #40,579 .
9 INTANGIBLE FIXED ASSETS
Goodwill
#
GROUP
Cost
Additions during the period as at 31 December 2004 1,297,783
Charge in the period and as at 31 December 2004 118,963
Net book value
31 December 2004 1,178,820
On 18 February 2004 the Group was formed by the acquisition of High Profile UK
Limited and BigFX Limited by ScreenFX. The consideration was settled by the
issue of 69,999,600 ordinary shares of 1p each in a share for share exchange.
10 TANGIBLE FIXED ASSETS
Ipods and Fixtures,
plasma screens fittings &
Computer equipment Motor vehicles
# equipment
# # Total
#
GROUP #
Cost or valuation:
Acquired with subsidiaries 24,125 63,475 69,147 184,120 340,867
Additions 1,264,427 732,367 36,282 13,076 2,046,152
Disposals - - - (184,120) (184,120)
31 December 2004 1,288,552 795,842 105,429 13,076 2,202,899
Depreciation:
Acquired with subsidiaries 6,194 31,125 27,361 43,263 107,943
Charged in the period 106,671 116,315 18,637 9,034 250,657
Disposals - - - (50,935) (50,935)
31 December 2004 112,865 147,440 45,998 1,362 307,665
Net book value
31 December 2004 1,175,687 648,402 59,431 11,714 1,895,234
Hire purchase and finance lease agreements
Included within the net book value of #11,714 in respect of motor vehicles is
#11,714 relating to assets held under hire purchase arrangements and included in
the net book value of #1,175,687 is #567,000 relating to assets held under
finance leases. The depreciation charged in the period in relation to these
assets is #1,362 and #51,545 respectively.
11 FIXED ASSET INVESTMENTS
Shares in subsidiary
undertakings Total
# #
COMPANY
Additions during the period and as at 31 December 2004 699,996 699,996
_______ ______
11 FIXED ASSET INVESTMENTS (continued)
The company holds more than 100% of the equity of the following
undertakings:
Country of Class of Proportion
incorporation holding Directly Nature of business
held
Subsidiary undertakings:
High Profile UK Limited England Ordinary 100% Digital screen advertising
Shares
BigFX Limited England Ordinary 100% Large format banner
Shares advertising
OutdoorFX England Ordinary 100% Dormant
Shares
The dormant subsidiaries are included at no value in the accounts and are
excluded from consolidation on the grounds of immateriality.
The company holds 100% of the voting rights in all of the subsidiaries listed
above.
Fair value of assets acquired:
#
Tangible fixed assets 232,924
Trade and other debtors 172,406
Cash in hand and at bank 17,694
Bank loan (136,250)
Hire purchase loans (157,355)
Trade and other creditors (693,901)
Corporation tax (33,305)
Net liabilities (597,787)
Goodwill 1,297,783
Consideration #699,996
12 SHARE CAPITAL
2004
#
Authorised:
240,000,000 ordinary shares of 1p each 2,400,000
Allotted, issued and fully paid:
120,000,000 ordinary shares of 1p each 1,200,000
During the period ordinary shares were issued as follows:
Number Nominal value Share premium
# #
Issued at #1 4 4 -
Sub-division to 1 p shares 396 - -
Issued at 1p 69,999,600 699,996 -
Issued at 10p 50,000,000 500,000 4,500,000
__________ __________ __________
120,000,000 1,200,000 4,500,000
__________ __________ __________
The company issued the following shares in the period:
* on 10 December 2003 two ordinary shares of #1 each were issued on
incorporation. A further two shares of #1 each were issued on 18 February 2004;
* on 23 February 2004 the #1 ordinary shares were subdivided into 100
shares of 1p each;
* on 10 March 2004, a total of 69,999,600 shares of 1p each were issued
as consideration for the acquisition of the company's two subsidiaries;
* also on 10 March 2004, 50,000,000 shares of 1p each were issued in a
placing, raising #5,000,000 before costs.
13 RESERVES Share Profit & Loss
premium account
# #
GROUP
Retained loss for the period - (2,019,915)
On issue of shares 4,500,000 -
Issue costs (594,547) -
31 December 2004 3,905,453 (2,019,915)
COMPANY
Retained loss for the period - (3,945,893)
On issue of shares 4,500,000 -
Issue costs (594,547) -
31 December 2004 3,905,453 (3,945,893)
14 CASH FLOWS 2004
#
a Reconciliation of operating loss to net cash outflow from operating
activities
Operating (loss) on ordinary activities (2,061,565)
Depreciation and amortisation 369,620
(Increase) in debtors (227,424)
(Decrease) in creditors (303,284)
Net cash outflow from operating activities (2,222,653)
2004
#
b Analysis of cash flows for headings netted in the cash flow
Returns on investments and servicing of finance
Interest received 47,421
Interest paid (25,638)
Net cash outflow from returns on investments and servicing of finance
21,783
Capital expenditure and financial investment
Purchase of tangible fixed assets (2,046,152)
Sales of tangible fixed assets 133,185
Net cash outflow from capital expenditure and financial investment
(1,912,967)
Financing
Issue of ordinary share capital 5,000,000
Issue costs (594,547)
Hire purchase and leasing loans received 631,621
Loans, hire purchase and leases repaid (242,293)
Net cash inflow from financing 4,794,781
14 CASH FLOWS (continued)
Acquired with At 31 December 2004
Subsidiaries Cash flow
# # #
c Analysis of net debt
Cash in hand and at bank 17,694 648,481 666,175
Debt due within 1 year (43,185) (205,760) (248,945)
Debt due after 1 year (250,420) (183,568) (433,988)
(293,605) (389,328) (682,933)
Total (275,911) 259,153 (16,758)
15 EARNINGS PER SHARE
Earnings and the number of shares used in the calculations of earnings per share
are set out below:
2004
Basic:
Loss after tax #(2,019,915)
Weighted average number of shares 97,314,944
EPS (pence) (2.1)p
Basic and fully diluted earnings are the same due to the loss for
the period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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