Half-yearly Report
March 31 2008 - 2:00AM
UK Regulatory
31 March 2008
Sterling Green Group plc
("the Group" or "the Company")
Second Interim Results
for the six months ended 31 December 2007
CHAIRMAN'S STATEMENT
Introduction
As envisaged at the time of the publication of the AIM Admission document in
April 2007, the Company's accounting reference date was changed to 31 March and
accordingly the audited financial statements will cover the 15 month period
from 1 January 2007 to 31 March 2008.
In this statement, the financial information covers the unaudited second
interim results of the Group for 2007 which covers the period from 1 July 2007
to 31 December 2007.
Results and dividends
The Group generated an unaudited loss before tax for the six month period of �
895,000 (six months to 30 June 2007 - �318,000 loss) on turnover of �702,000
(six months to 30 June 2007 - �150,000). The Directors do not recommend the
payment of a dividend for the period.
The Group had three trading subsidiaries operating during the period, Sterling
Green Limited ("SGL"), Sterling Green Mortgages Limited ("SGM") and TaxDebts
Limited ("Tax Debts"), which commenced trading in the period. The Group
currently provides debt management services through SGL, advice relating to
consolidation loans and mortgages through SGM, and personal tax debt payment
solutions through Tax Debts.
Outlook
The Board is implementing its strategy of creating 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 level of debt issues facing a large proportion of the UK general public is
receiving significant coverage in the media. The Board believes that the credit
crunch affecting the money markets recently will increase the number of
potential clients who could benefit from the services provided by the Group in
the medium term and several partnerships have been signed or are in the
pipeline which could also lead to an increased number of potential clients
being passed onto us. As a result, the Board is looking forward to 2008 with
the feeling 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 debt. On the downside, mortgages have
become very much more difficult to obtain for clients because of the recent
well publicised financial problems and this is likely to result in slower
growth in this area until the market settles.
Having recently raised �750,000 before costs for working capital purposes, the
Board remains optimistic that the Group will be able to generate growth and
enhance shareholder value in the medium term.
Michael Edelson
Chairman
31 March 2008
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2007
Six months Six months Year
ended ended ended
31 December 30 June 31 December
2007 2007 2006
(Unaudited) (Unaudited) (Audited)
�000 �000 �000
Revenue 702 150 -
Cost of sales (748) (155) -
Gross loss (46) (5) -
Administrative expenses (840) (329) (75)
Operating loss (886) (334) (75)
Investment income 4 16 2
Finance costs (13) - -
Loss on ordinary activities before (895) (318) (73)
taxation
Income tax expense - - -
Loss on ordinary activities after (895) (318) (73)
taxation
Loss per share - basic and diluted (0.36)p (0.16)p (0.13)p
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2007
31 December 30 June 31 December
2007 2007 2006
(Unaudited) (Unaudited) (Audited)
�000 �000 �000
ASSETS
Non-current assets
Property, plant and equipment 330 355 -
Goodwill 1,078 1,078 -
Total non-current assets 1,408 1,433 -
Current assets
Trade and other receivables 138 159 27
Cash and cash equivalents 167 443 61
Total current assets 305 602 88
LIABILITIES
Current liabilities
Trade and other payables (495) (228) (72)
Net current (liabilities)/assets (190) 374 16
Total assets less current 1,218 1,807 16
liabilities
Non-current liabilities
Trade and other payables (175) (219) -
Net assets 1,043 1,588 16
EQUITY
Share capital 250 250 85
Share capital to be issued 350 - -
Share premium account 834 834 -
Capital reserve 6 6 6
Other reserves 891 891 -
Retained losses (1,288) (393) (75)
Total equity 1,043 1,588 16
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2007
Six months Six months Year
ended ended ended
31 December 30 June 31 December
2007 2007 2006
(Unaudited) (Unaudited) (Audited)
�000 �000 �000
Cash flows from operating activities
Loss before tax (895) (318) (73)
Adjustments for:
Depreciation 63 18 -
Investment income (4) (16) (2)
Finance costs 13 - -
Share based payment charge - - 6
Decrease/(increase) in trade and 21 (40) (27)
other receivables
Increase/(decrease) in trade and 267 (94) 68
other payables
Cash outflow from operating (535) (450) (28)
activities
Finance costs paid (13) - -
Net cash used in operating (548) (450) (28)
activities
Cash flows from investing activities
Acquisition of subsidiary, net of - (152) -
cash acquired
Purchase of property, plant and (38) (339) -
equipment
Investment income received 4 16 2
Net cash (used in)/from investing (34) (475) 2
activities
Cash flows from financing activities
Capital element of finance lease (44) (2) -
payments
Finance leases entered into - 307 -
Proceeds in advance of issue of 350 - -
share capital
Proceeds from issue of share capital - 1,002 35
Net cash from financing activities 306 1,307 35
Net (decrease)/increase in cash and (276) 382 9
cash equivalents
Cash and cash equivalents at 443 61 52
beginning of period
Cash and cash equivalents at end of 167 443 61
period
STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2007
Share Share Share Capital Other Retained Total
capital capital reserve reserves losses
to be premium
issued account
�000 �000 �000 �000 �000 �000 �000
Balance at 1 January 50 - - - - (2) 48
2006
Loss for the year - - - - - (73) (73)
Issue of share 35 - - - - - 35
capital
Share based payments - - - 6 - - 6
Balance at 1 January 85 - - 6 - (75) 16
2007
Loss for the period - - - - - (318) (318)
Issue of share 165 - 957 - 891 - 2,013
capital
Share issue costs - - (123) - - - (123)
Balance at 30 June 250 - 834 6 891 (393) 1,588
2007
Loss for the period - - - - - (895) (895)
Share capital to be - 350 - - - - 350
issued
Balance at 31 250 350 834 6 891 (1,288) 1,043
December 2007
NOTES TO THE INTERIM REPORT
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 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.
2. The next accounting reference date will be 31 March 2008 and financial
statements for this period will be prepared in accordance with International
Financial Reporting Standards (IFRS) as required by European Law. The interim
financial statements have been prepared in accordance with accounting policies
that are expected to apply to the financial statements for the period ending 31
March 2008.
3. Basic loss per share has been calculated using a loss for the period of �
895,000 (�318,000 loss for the six month period ended 30 June 2007 and �73,000
loss for the year ended 31 December 2006) and a weighted average number of
ordinary shares in issue during the six month period ended 31 December 2007 of
249,675,390 (202,148,621 for the six month period ended 30 June 2007 and
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.
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. Any deferred
consideration payable will be satisfied by the issue of up to 65,625,000 new
ordinary shares in the Company. The calculation of additional consideration
payable is based on certain revenue and EBITDA targets for the two years ending
31 March 2009.
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.
5. In December 2007 the Company received �350,000 in advance of the issue of
new ordinary shares. Accordingly, this amount has been shown as an equity
balance at 31 December 2007 under the heading `'share capital to be
issued'. Subsequent to the balance sheet date, the �350,000 received has
been allocated as to �14,000 share capital and �336,000 share premium.
On 4 January 2008 the Company issued 22,000,000 new ordinary shares at a price
of 2.5 pence per share. On 7 February, the Company issued a further 8,000,000
new ordinary shares at a price of 2.5 pence per share
6. 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.
Further enquiries:
Sterling Green Group plc
Michael Edelson Tel: 0161 975 0434
John East & Partners Limited
David Worlidge/Simon Clements Tel: 020 7628 2200
END
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