RNS Number:3234K
Sky High PLC
20 December 2007
Sky High Plc
("Company")
Interim Report for the Six Months to 30 September 2007
Chairman's Statement
I am pleased to present the Interim Report for Sky High Plc for the six month
period to 30 September 2007.
The Company has, in accordance with the rules of the AIM, adopted International
Financial Reporting Standards ("IFRS") for this, and future, reports. Whilst
the adoption of IFRS has not had a material impact on the results for the
current period, it has had an impact on the financial numbers in the comparative
periods.
Shareholders will be aware that on 25th January 2007 the Company acquired Sky
High Traffic Data Ltd and subsidiaries ("Sky High") through a transaction that
is classified as a reverse acquisition under AIM and IFRS rules. As a
consequence, IFRS requires the comparative figures in this report to relate to
the Sky High business and not the Company for periods prior to 25th January
2007. The comparative figures for the 6 months to 30 September 2006 relate to
the Sky High business as it was when a privately owned company. The comparative
figures for the 12 months to 30 March 2007 include a full year of trading for
the Sky High business together with the trading and costs of the Company since
25 January 2007.
The results show a profit after tax of �87,000 (2006: �179,000) for the six
month period. There were no costs for being a quoted public company in the
comparative six month period. Underlying turnover of �2.04 million represents a
satisfactory increase over a comparable turnover of �1.59 million in the six
months to September 2006. Trading in the first two months of the second half
has been robust.
During the six months, the Company acquired the 50% of the ordinary share
capital in Sky High Australia PTY Limited that it did not already own, thereby
bringing the expanding Australian operation under full ownership of the Company.
The Directors have not declared an interim dividend. Your Board continues to
search for suitable acquisitions in order to grow the business, whilst also
looking to organically grow the traffic data collection business into related
areas.
Richard Jackson
Chairman
20 December 2007
Enquiries
Sky High Plc Blue Oar Securities Plc
Mark Mattison, Managing Director Mike Coe, Director, Corporate Finance
Tel: 01937 833933 Tel: 0117 933 0020
UNAUDITED CONSOLIDATED INCOME STATEMENT (IFRS)
For the six month period to 30 September 2007
6 months 6 months 12 months
ended ended ended
30 September 30 September 3 April
2007 2006 2007
Note Unaudited Unaudited Unaudited
�'000 �'000 �'000
Continuing operations
Revenue 2,039 1,594 3,097
Cost of sales (1,325) (955) (1,951)
Gross profit 714 639 1,146
Other administrative expenses (616) (436) (892)
Results from operating activities 98 203 254
Finance income 5 - 2
Finance expenses (16) (7) (18)
Net Finance Costs (11) (7) (16)
Profit/(Loss) before taxation 87 196 238
Income tax expense - - (41)
Profit/(Loss) from continuing operations 87 196 197
Minority interests - (17) (35)
Profit/(Loss) for the financial period 87 179 162
Profit/(Loss) per ordinary share - 4 0.7p 2.8p 2.0p
Undiluted
Profit/(Loss) per ordinary share - Diluted 4 0.7p 2.3p 1.8p
There were no recognised gains or losses other than the profit for the financial
period.
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (IFRS)
For the six month period to 30 September 2007
For the six months ended
30 September 2007 Called up Share Other Minority Profit Total
Share Premium Reserves Interest and Loss Equity
Capital Account Account
�'000 �'000 �'000 �'000 �'000 �'000
At start of period 1,233 1,577 (1,644) 35 111 1,312
Issue of shares 41 62 - - - 103
Profit for the period - - - - 87 87
Acquisition of minority - - - (35) - (35)
At end of period 1,274 1,639 (1,644) - 198 1,467
For the 12 months ended
3 April 2007 Called up Share Other Minority Profit Total
Share Premium Reserves Interest and Loss Equity
Capital Account Account
�'000 �'000 �'000 �'000 �'000 �'000
At start of period 1 154 - - 196 351
Reverse acquisition -
introduction of balances
of Sky High PLC 1,232 6,594 (6,815) - - 1,011
Profit for the year - - - 35 162 197
Capital reorganisation -
3 April 2007 - (5,171) 5,171 - - -
Equity dividends paid - - - - (247) (247)
At end of period 1,233 1,577 (1,644) 35 111 1,312
For the six months ended
30 September 2006 Called up Share Other Minority Profit Total
Share Premium Reserves Interest and Loss Equity
Capital Account Account
�'000 �'000 �'000 �'000 �'000 �'000
At start of period 1 154 - - 196 351
Profit for the period - - - 17 179 196
At end of period 1 154 - 17 375 547
CONSOLIDATED BALANCE SHEET (IFRS)
At 30 September 2007
At 30 At 30 At 3
September September April
2007 2006 2007
Unaudited Unaudited Unaudited
�'000 �'000 �'000
Non current assets
Goodwill 633 - 500
Property, plant and equipment 386 257 341
Total non current assets 1019 257 841
Current assets
Trade and other receivables 1,190 908 946
Cash and cash equivalents 187 8 293
Total current assets 1,377 916 1,239
Total assets 2,396 1,173 2,080
Current liabilities
Bank overdraft (185) (143) (145)
Trade and other payables (630) (376) (478)
Total current liabilities (815) (519) (623)
Non current liabilities (114) (107) (145)
Total liabilities (929) (626) (768)
Net assets 1,467 547 1,312
Capital and reserves
Called up share capital 1,274 1 1,233
Share premium account 1,639 154 1,577
Profit and loss account 198 375 111
Other reserve (1,644) - (1,644)
Minority interests - 17 35
Shareholders' funds 1,467 547 1,312
UNAUDITED CONSOLIDATED CASHFLOW STATEMENT (IFRS)
For the six month period to 30 September 2007
6 months 6 months 12 months
ended ended ended
30 September 30 September 3 April
2007 2006 2007
Note Unaudited Unaudited Unaudited
�'000 �'000 �'000
Cash used in operations 5 (12) 45 200
Interest paid (16) (7) (18)
Net cash inflow/(outflow) from
operating activities (28) 38 182
Cashflow from investing activities
Purchase of property, plant and equipment (88) (99) (206)
Interest received 5 - 2
Purchase of subsidiary undertaking (138) - -
Net cash inflow/(outflow) from
investing activities (221) (99) (204)
Financing
Issue of ordinary share capital 103 - -
Proceeds of new bank loan 40 23 25
Net cash inflow from financing 143 23 25
(Decrease)/Increase in cash and
cash equivalents (106) (38) 3
Cash and cash equivalents at beginning
of period 293 46 46
Amount arising on reverse acquisition - - 244
Cash and cash equivalents at
end of period 187 8 293
NOTES TO THE ACCOUNTS
For the six month period to 30 September 2007
1 BASIS OF PREPARATION OF INTERIM REPORT
Reverse acquisition accounting and IFRS
The Interim financial report has been prepared using accounting policies
consistent with International Financial Reporting Standards (IFRS) for the first
time. As a result, the comparative figures present the trading results, assets
and liabilities of the entities that were acquired by Sky High PLC on 25 January
2007. The accounting for this is explained more fully in note 2.
The information for the period ended 30 September 2007 is not audited and does
not constitute statutory accounts as defined in section 240 of the Companies Act
1985. The interim accounts for the six month period to 30 September 2006 were
also unaudited.
The information for the year ended 3 April 2007, even though unaudited, is taken
from the unqualified statutory accounts for the year then ended, modified for
the transition to IFRS, in particular the application of reverse acquisition
accounting, as explained in note 2 and the reconciliation table in note 6.
2 ACCOUNTING POLICIES
Basis of Accounting
The Interim financial report has been prepared using accounting policies
consistent with International Financial Reporting Standards (IFRS) for the first
time. The disclosures required by IFRS 1 concerning the transition from UK GAAP
to IFRS are given in note 6. The financial statements have been prepared under
the historical cost basis. The principal accounting policies adopted are set
out below:
Basis of consolidation
The acquisition of Sky High Traffic Data Limited and its subsidiaries by Sky
High Plc meets the definition of a reverse acquisition as defined by IFRS 3. As
a result, although the accounts are issued under the name of the legal parent
(Sky High Plc), the accounts presented are a continuation of the accounts of Sky
High Traffic Data Limited and its subsidiaries ("the SHTD sub group").
The assets and liabilities of the SHTD sub group have been recognised and
measured at their pre-combination carrying amounts. As consolidated accounts had
not been previously prepared for this sub-group (because Sky High Traffic Data
Limited was exempt from the requirement to prepare consolidated accounts), no
goodwill has been included in respect of the acquisition of Sky High Technology
Limited by Sky High Traffic Data Limited due to the time expired since the
acquisition and the amortisation that would have been charged since the
acquisition had consolidated accounts been prepared.
The retained earnings and other equity balances for the period ended 30
September 2006 represent the balances in respect of the SHTD sub group. The
results for the period to 25 January 2007, the date of the reverse acquisition,
include solely the results of the SHTD sub group. On this date the assets and
liabilities of the Sky High Plc entity are, for the purposes of these
consolidated financial statements, recorded as being acquired at their fair
value. In this case, as the entity comprised principally cash, fair value
equates to book value.
The cost of the combination has been calculated using the methodology set out in
IFRS 3, being the notional cost to the existing shareholders of Sky High Traffic
Data Limited of issuing shares that would result in these shareholders obtaining
the same shareholding that they have in Sky High Plc. The excess of this cost
over the net assets of Sky High Plc has been reflected in goodwill.
The consolidated financial statements incorporate the financial statements of
the Company and entities controlled by the Company (its subsidiaries) made up to
30 September and 31 March each year. Control is achieved where the Company has
the power to govern the financial and operating policies so as to obtain
benefits from its activities.
On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition. Any
excess of the cost of acquisition over the fair values of the indefinable net
assets acquired is recognised as goodwill. Any deficiency of the cost of
acquisition below the fair values of the identifiable net assets (i.e. discount
on acquisition) is credited to the income statement in the period of
acquisition.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies into line with those used by the
group.
All intra-group transactions, balances, income and expenses are eliminated on
consolidation.
The minority interest in the net assets and net results are shown separately in
the consolidated balance sheet and consolidated income statement.
Translation of financial statements of foreign entities
The assets and liabilities of foreign operations are translated using exchange
rates at the balance sheet date. The components of shareholders' equity are
stated at historical value. An average exchange rate for the period is used to
translate the results and cashflows of foreign operations.
Exchange differences arising on translating the results and net assets of
foreign operations are taken to the translation reserve in equity until the
disposal of the investment. The gain or loss in the income statement on the
disposal of foreign operations includes the release of the translation reserve
relating to the operation that is being sold.
Goodwill
Goodwill arising on consolidation represents the excess cost of acquisition over
the group's interest in the fair value of the identifiable assets and
liabilities of a subsidiary, associate or jointly controlled entity at the date
of acquisition.
Goodwill is recognised as an asset and reviewed for impairment at least
annually. Any impairment is recognised immediately in the income statement and
is not subsequently reversed. Goodwill arising on acquisition before the date
of transition to IFRS has been retained at the previous UK GAAP amounts subject
to being tested for impairment at that date.
On disposal of a subsidiary, associate or jointly controlled entity, the
attributable amount of goodwill is included in the determination of the profit
or loss on disposal.
Revenue recognition
Revenue is measured at the fair value of the consideration received or
receivable and represents amounts receivable for goods and services provided in
the normal course of business, net of discounts, VAT and other sales-related
taxes.
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax.
The tax currently payable is based on taxable profits for the year. Taxable
profit differs from net profit as reported in the income statement because it
excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. The
Group's liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and corresponding tax bases used in the computation of taxable
profit, and is accounted for using the balance sheet liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary differences
can be utilised. Such assets and liabilities are not recognised if the
temporary difference arises from goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a transaction
that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet
date and reduced to the extent that is no longer probable that sufficient
taxable profits will be available to allow all, or part, of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and any recognised impairment loss.
Depreciation is charged so as to write off the cost or valuation of assets over
their estimated useful lives on the following bases:
Fixtures and fittings 15% per annum reducing balance basis
Motor vehicles 25% per annum reducing balance basis
Computer equipment 33% per annum straight line basis
The gain or loss arising on the disposal or retirement of an asset is determined
as the difference between the sales proceeds and the carrying amount of the
asset and is recognised in income.
Impairment of tangible and intangible assets excluding goodwill
At each balance sheet date, the Group reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication that
those assets have suffered an impairment loss. If any such indication exists,
the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss (if any). Where the asset does not generate cash
flows that are independent from other assets, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. An
intangible asset with an indefinite useful life is tested for impairment
annually and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair values less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimate of future cash flows have not been adjusted.
In the recoverable amount of an asset (or cash-generating unit) is estimated to
be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. Am impairment loss
is recognised as an expense immediately, unless the relevant asset is carried at
a revalued amount, in which case the impairment loss is treated as a revaluation
decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset
(cash-generating unit) is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of an
impairment loss is recognised as income immediately, unless the relevant asset
is carried at a revalued amount, in which case the reversal of the impairment
loss is treated as a revaluation increase.
Financial instruments
Financial assets and financial liabilities are recognised on the Group's balance
sheet when the Group becomes a party to the contractual provisions of the
instrument.
Trade receivables
Trade receivables do not carry any interest and are stated at their nominal
value as reduced by appropriate allowances for estimated irrecoverable amounts.
Financial liability and equity
Financial liabilities and equity instruments are classified according to the
substance of the contractual agreements entered into. An equity instrument is
any contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities.
Trade payables
Trade payables are not interest-bearing and are stated at their nominal value.
Equity Instruments
Equity instruments issued by the Company are recorded at the proceeds received,
net of direct issue costs.
3 Dividends
The Company will not be declaring an interim dividend.
4 profit per share
The calculation is based on the profit attributable to ordinary shareholders
divided by the weighted average number of ordinary shares as defined by IAS 33
and IFRS 3 (in relation to the period up to the reverse acquisition) as follows:
6 months 6 months 12 months
ended 30 ended 30 ended
September September 3 April
2007 2006 2007
Profit/(Loss) for the period �87,000 �179,000 �162,000
Weighted average number of shares undiluted 12,424,552 6,321,379 7,973,245
Weighted average number of shares diluted 12,669,552 7,858,779 8,785,900
5 CASH USED IN OPERATIONS
6 months 6 months 12 months
ended 30 ended 30 ended
September September 3 April
2007 2006 2007
�'000 �'000 �'000
Results from operating activities 98 203 254
Depreciation of property, plant and equipment 43 23 73
Decrease/(Increase) in receivables (244) (35) (73)
Increase/(Decrease) in payables 91 (146) (54)
Cash used in operations (12) 45 200
6 EXPLANATION OF TRANSITION TO IFRS
The Group has applied IFRS 1 "First Time Adoption of International Financial
Reporting Standards" as a starting point for reporting under IFRS. The Group's
date of transition is 31 March 2006 and comparative information has been
restated to reflect in the Group's adoption of IFRS except where otherwise
required or permitted by IFRS 1. Note 2 fully explains the impact of IFRS 3.
IFRS 1 required an entity to comply with each IFRS and IAS effective at the
reporting date for its first financial statements prepared under IFRS. As a
general rule, IFRS 1 requires such standards to be applied retrospectively.
However, the standard allows several optional exemptions from full retrospective
application.
The Group has elected to take advantage of the following exemption. Business
combinations made prior to 31 March 2006 will not be accounted for under IFRS 3
"Business Combinations" and as such the value of goodwill in the balance sheet
at that date will be the same amount under IFRS as that recorded in the UK GAAP
financial statements, subject to the completion of an annual impairment review.
The reconciliations of equity at 3 April 2007 and the reconciliation of profit,
as required by IFRS 1, are set out below.
As IFRS requires a different basis of preparation of the accounts as explained
in note 1 and 2, it is not possible to publish full reconciliation tables as
required by IFRS 1. However the tables below show the reconciliation of key
published amounts:
RECONCILIATION OF PROFIT FROM UK GAAP TO IFRS
12 months 9 months
ended 3 April ended 3 April
2007 2007
Sky High PLC
�'000 �'000
UK GAAP loss for the financial period as previously reported
(for Sky High PLC only) (48)
UK GAAP profit - full 12 months of trading subsidiaries 192
Amortisation of goodwill 5 17
(Loss) from continuing operations - IFRS - Sky High PLC only (31)
Profit from continuing operations - IFRS as disclosed including a
full 12 months of the trading subsidiaries as required by IFRS 3 197
RECONCILIATION OF NET ASSETS FROM UK GAAP TO IFRS
3
April
2007
�'000
Net Assets per UK GAAP 2,835
Revision of goodwill figure due to adoption of reverse acquisition
accounting as required by IFRS 3 (1,523)
Net Assets - IFRS 1,312
Copies of this report will be available from the Company's website at
www.skyhighplc.co.uk and the Company's registered office at 32 Bedford Row,
London WC1R 4HR.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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