Half-yearly Report
September 27 2007 - 2:00AM
UK Regulatory
To be released on 27 September 2007
Sterling Green Group Plc
("Sterling Green" or "the Company")
Interim Results for the six month period ended 30 June 2007
Chairman's Statement
Introduction
I am pleased to report the Group's interim results for the six month period
ended 30 June 2007, the highlights of which are as follows:
* Acquisition of Sterling Green Limited ("SGL").
* Commencement of trading by Sterling Green Mortgages Limited ("SGML").
* Relocation of trading operations to central Manchester.
* Group loss per share of 0.16p.
Results and dividend
The Group generated a loss before tax for the period amounting to �318,000 on
turnover of �150,000. Included in administrative expenses for the period are
one-off costs amounting to �54,000 relating to the admission of the Company's
shares to trading on AIM in April 2007.
The results of SGL have only been consolidated into the Group results from 27
April 2007, which was the date the acquisition was completed.
The Group had two trading subsidiaries during the period, Sterling Green
Limited and Sterling Green Mortgages Limited. SGML commenced trading during May
2007 and received FSA authorisation earlier this month.
The Directors do not recommend the payment of a dividend for the period.
Acquisition of Sterling Green Limited
SGL was acquired for an initial consideration of �950,000 satisfied by the
issue of 59,375,000 ordinary shares in the Company. Subject to certain revenue
and EBITDA targets based on the two years ending 31 March 2009, additional
consideration may become payable up to a maximum of �1,050,000. Any deferred
consideration payable will be satisfied by the issue of up to a maximum of
65,625,000 new ordinary shares in the Company.
Outlook
Following the relocation of trading operations to central Manchester in May
2007, the Group has been able to recruit higher calibre call centre and
customer relationship staff which has, in turn, improved the quality of
customer service and the rate of customer conversions from the call centre
operations.
The Board's strategy is to create a financial services group which offers a
wide range of financial solutions to members of the general public who, for a
number of reasons, may have over extended themselves with respect to levels of
personal indebtedness.
The Group currently provides debt management services and, following the
receipt of FSA authorisation earlier this month, is also able to provide new
and existing clients with advice relating to consolidation loans and mortgages.
Since the period end, the Company has created TaxDebts Limited ("Tax Debts"), a
wholly owned subsidiary of the Company, which specifically targets customers
who have tax related debt issues. Tax Debts has made an encouraging start to
trading and early indications suggest that significant growth opportunities
exist in this sector.
The level of debt issues facing the majority of the UK general public has
received significant coverage in the media in the last six months. The
Directors believe the credit crunch that has affected the money markets
recently will increase the number of potential clients who may benefit from the
Group's services.
The Board is confident that it is well placed to offer a comprehensive range of
financial solutions to assist the growing number of people who are experiencing
problems relating to the level of their personal indebtedness.
The Board anticipates further progress will be made in the current period and
remains confident that it will be able to generate growth to enhance
shareholder value.
Michael Edelson
Chairman
27 September 2007
For further information please contact:
Sterling Green Group plc
Michael Edelson 0161 975 0935
John East & Partners Limited
Simon Clements 020 7628 2200
Consolidated Income Statement
For the six month period ended 30 June 2007
Six months ended Year
30 June ended
2007 31 December
2007
(Unaudited) (Audited)
�000 �000
Revenue 150 -
Cost of sales (155) -
Gross loss (5) -
Administrative expenses (329) (75)
Finance income 16 2
Loss on ordinary activities before taxation (318) (73)
Income tax expense - -
Loss on ordinary activities after taxation (318) (73)
Loss per share - basic and diluted (0.16)p (0.13)p
Consolidated Balance Sheet
As at 30 June 2007
30 June 31 December
2007 2006
(Unaudited) (Audited)
�000 �000
Assets
Non-current assets
Property, plant and equipment 355 -
Goodwill 1,078 -
Total non-current assets 1,433 -
Current assets
Trade and other receivables 159 27
Cash and cash equivalents 443 61
Total current assets 602 88
Current liabilities
Trade and other payables (228) (72)
Net current assets 374 16
Total assets less current liabilities 1,807 16
Non-current liabilities
Trade and other payables (219) -
Net assets 1,588 16
Equity
Share capital 250 85
Share premium account 834 -
Capital reserve 6 6
Other reserves 891 -
Retained losses (393) (75)
Total equity 1,588 16
Consolidated Cash Flow Statement
For the six month period ended 30 June 2007
Six months Year
ended ended
30 June 31 December
2007 2006
(Unaudited) (Audited)
�000 �000
Cash flows from operating activities
Loss before tax (318) (73)
Adjustments for:
Depreciation 18 -
Investment income (16) (2)
Share based payment charge - 6
Increase in trade and other receivables (40) (27)
(Decrease)/increase in trade and other payables (94) 68
Net cash outflow from operating activities (450) (28)
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired (152) -
Purchase of property, plant and equipment (339) -
Finance income received 16 2
Net cash (used in)/from investing activities (475) 2
Cash flows from financing activities
Capital element of finance lease payments (2) -
Finance leases entered into 307 -
Proceeds from issue of share capital 1,002 35
Net cash from financing activities 1,307 35
Net increase in cash and cash equivalents 382 9
Cash and cash equivalents at beginning of period 61 52
Cash and cash equivalents at end of period 443 61
Statement of Changes in Equity
For the six month period ended 30 June 2007
Share Share Capital Other Retained Total
capital premium reserve reserves losses
�000 �000 �000 �000 �000 �000
Balance at 1 January 50 - - - (2) 48
2006
Loss for the year - - - - (73) (73)
Issue of share capital 35 - - - - 35
Share based payments - - 6 - - 6
Balance at 1 January 85 - 6 - (75) 16
2007
Loss for the period - - - - (318) (318)
Issue of share capital 165 957 - 891 - 2,013
Share issue costs - (123) - - - (123)
Balance at 30 June 2007 250 834 6 891 (393) 1,588
Notes to the Interim Report
For the six month period ended 30 June 2007
1. The interim financial statements have not been audited and they do not
constitute full financial statements within the meaning of s240 of the
Companies Act 1985. The statutory accounts for the year ended 31 December
2006 have been delivered to the Registrar of Companies. The auditors'
opinion on those accounts was unqualified and did not contain a statement
under s237(2) or s237(3) of the Companies act 1985. The accounting
reference date has now been changed to 31 March.
2. The interim financial statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as required by European Law.
3. Basic loss per share has been calculated using a loss for the period of �
318,000 (�73,000 loss for the year ended 31 December 2006) and a weighted
average number of ordinary shares in issue during the period 1 January 2007 to
30 June 2007 of 202,148,621 (55,833,333 for the year ended 31 December 2006).
Diluted loss per share is calculated by adjusting the weighted average number
of ordinary shares in issue assuming conversion of all dilutive potential
ordinary shares. The Company's potential ordinary shares consist of share
options and deferred consideration shares. Due to the loss in the current and
comparative periods there are no dilutive ordinary shares.
4. Goodwill arising on the acquisition of Sterling Green Limited on 27 April
2007 amounting to �1,078,000 has been capitalised. The Group has taken
advantage of s131 of the Companies Act 1985 and has credited the share premium
arising on the acquisition of Sterling Green Limited to other reserves.
Goodwill has been calculated on the basis of initial consideration. Deferred
consideration may become payable up to a maximum of �1,050,000 but this cannot
be assessed as probable at this stage. If additional consideration becomes
payable, the value of goodwill will change accordingly.
5. Copies of the Interim Report can be obtained by writing to The Company
Secretary, Sterling Green Group plc, Number 14, The Embankment, Vale Road,
Heaton Mersey, Stockport, Cheshire SK4 3GN. Alternatively, copies can also be
downloaded from the Company's website which is www.sterlinggreen.co.uk.
END
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