RNS Number:6323L
Saltmark PLC
28 May 2003
SALTMARK PLC
(FORMERLY DIRECT MESSAGE PLC)
Interim Results for the six months ended 28 February 2003
Chairman's Statement
On 7 February 2003, a letter was sent to all shareholders concerning proposals
to dispose of the Group's subsidiaries, notifying a serious loss of capital, to
change the name of the Company, and convening two EGM's on 24 February 2003 and
3 March 2003. The first EGM, to deal with the disposal of the subsidiaries, was
duly held on 24 February 2003. The resolution was passed and the disposal of the
subsidiaries was completed on 25 February 2003. The second EGM, to deal with the
change of name of the Company to Saltmark plc (formerly Direct Message plc), was
held on 3 March 2003 and the resolution passed.
Following completion of the disposal and settlement of outstanding transactions,
the Company will be left with proforma net assets of #168,000 comprising
#150,000 cash consideration receivable from Direct Message Group Limited, the
company which acquired the subsidiaries, #15,000 investment in 7.5% of the
ordinary shares of Direct Message Group Limited and #3,000 prepaid insurances.
The directors have taken steps to reduce expenditure to an absolute minimum in
order to preserve the limited resources of the Company. These steps include the
agreement of the directors and certain advisers to waive monetary remuneration
and to receive nominal remuneration in shares instead. The directors are
reimbursed reasonable expenses incurred directly and exclusively in connection
with the performance of their duties.
Results
The Group's results shown in the consolidated profit and loss account relate
entirely to discontinued activities, being the trading activities of the Group's
subsidiaries up to the date of their disposal. The Company no longer has any
interest in the businesses which generated these results and is now a cash
shell.
The directors are unable to recommend a dividend in respect of the half year
ended 28 February 2003 (half year ended 28 February 2002: #nil; year ended 31
August 2002: #nil).
Board
On 27 February 2003 and 3 March 2003 respectively, Kean McDonald and Charles
Daniels were appointed directors. Charles Daniels subsequently ceased to be a
director on 20 May 2003.
Outlook
As advised in the letter to shareholders, referred to above, as a shell company
quoted on AIM, it is possible that the Company could prove attractive to another
business seeking a quotation. The non executive directors are currently pursuing
this course of action although it is too early to inform shareholders of
progress. In the event that such a transaction does not prove possible within a
realistic timeframe, the directors intend to propose a resolution to
shareholders to undertake a members' voluntary winding up.
Roger Newton
Non-executive Chairman
28 May 2003
Consolidated Profit and Loss Account
for the half year ended 28 February 2003
Half Year Half Year Year
to 28/2/03 to 28/2/02 to 31/8/02
Unaudited Unaudited Audited
Note #'000 #'000 #'000
Turnover 2 9,073 10,224 20,056
Cost of sales - excluding exceptional items (7,703) (8,324) (16,744)
- exceptional items - - (1,008)
Total cost of sales 3 (7,703) (8,324) (17,752)
Gross profit 1,370 1,900 2,304
Administrative expenses (1,997) (2,767) (24,511)
Operating (loss)/profit before goodwill
amortisation and exceptional costs (283) 14 (1,724)
Goodwill amortisation and impairment (188) (750) (19,823)
Exceptional costs 3 (156) (131) (660)
Operating loss (627) (867) (22,207)
Profit on disposal of subsidiary undertakings 4 11,988 - -
Loss on disposal of fixed assets - (66) (63)
Profit/(loss) on ordinary activities before
interest 11,361 (933) (22,270)
Net interest payable (846) (752) (1,554)
Profit/(loss) on ordinary activities before
taxation 10,515 (1,685) (23,824)
Tax on profit/(loss) on ordinary activities - - 52
Retained profit/(loss sustained) for the period 10,515 (1,685) (23,772)
Earnings/(loss) per share:
Basic and diluted earnings/(loss) per share 5 17.1p (2.7)p (38.7)p
Adjusted loss per share 5 (1.8)p (1.2)p (3.6)p
All of the Group's turnover and operating loss in the period relate to
discontinued activities.
There is no difference between the profit/(loss) on ordinary activities before
taxation and the retained profit/(loss sustained) for the six months ended 28
February 2003 and their historical cost equivalents.
The Group has no recognised gains or losses other than those included in the
results above.
Consolidated Balance Sheet
as at 28 February 2003
As at As at As at
28/2/03 28/2/02 31/8/02
Unaudited Unaudited Audited
Note #'000 #'000 #'000
Fixed assets
Intangible assets - 26,626 6,888
Tangible assets - 3,912 3,787
Investments 6 15 - -
15 30,538 10,675
Current assets
Stocks - 2,001 1,497
Debtors 295 5,016 4,323
Cash at bank and in hand 30 - -
325 7,017 5,820
Creditors: amounts falling due within one year (172) (13,896) (14,725)
Net current assets/(liabilities) 153 (6,879) (8,905)
Total assets less current liabilities 168 23,659 1,770
Creditors: amount falling due after more
than one year - (11,666) (11,935)
Provisions for liabilities and charges - (253) (182)
Net assets/(liabilities) 168 11,740 (10,347)
Capital and reserves
Called up equity share capital 613 613 613
Share premium account 14,305 14,305 14,305
Capital redemption reserve 50 50 50
Profit and loss account (14,800) (3,228) (25,315)
Surplus of /(deficiency in) equity
shareholders' funds 168 11,740 (10,347)
Consolidated Cash Flow Statement
for the half year ended 28 February 2003
Half Year Half Year Year
to 28/2/03 to 28/2/02 to 31/8/02
Unaudited Unaudited Audited
#'000 #'000 #'000
Note
Net cash outflow from operating activities 7 (667) (953) (526)
Returns on investment and servicing of finance
Net interest paid (166) (521) (733)
Taxation
UK corporation tax repaid - 168 149
Capital expenditure and financial investment
Purchase of tangible fixed assets (175) (426) (744)
Sale of tangible fixed assets - - 5
Net cash outflow from capital expenditure
and financial investment (175) (426) (739)
Disposals
Disposal of subsidiary undertakings 24,293 - -
Net cash disposed with subsidiary undertakings (412) - -
Net cash inflow from disposal of subsidiary
undertakings 4 23,881 - -
Net cash inflow/(outflow) before financing 22,873 (1,732) (1,849)
Financing
Capital element of hire purchase agreements (111) (109) (192)
Repayment of bank loans 4 (21,050) - -
Net cash outflow from financing (21,161) (109) (192)
Increase/(decrease) in cash 8 1,712 (1,841) (2,041)
Notes to financial information
1. Basis of preparation
The financial information included in this interim statement for the six months
ended 28 February 2003 does not constitute statutory accounts within the meaning
of section 240 of the Companies Act 1985 and is neither audited nor reviewed.
The financial information has been prepared on the basis of accounting policies
consistent with those set out in the statutory financial statements for the year
ended 31 August 2002, which have been filed with the Registrar of Companies and
on which the auditors gave an unqualified opinion.
The financial information has been prepared on the going concern basis which
assumes that the Company will continue in operational existence for the
foreseeable future. Following completion of the disposal of the Group's
subsidiaries on 25 February 2003 (see note 4), the directors have taken steps to
reduce expenditure to an absolute minimum and are satisfied that the Company has
adequate resources to meet existing obligations as they fall due. As a result,
the directors consider it appropriate to prepare the financial information on a
going concern basis.
2. Segmental analysis
Half Year Half Year Year
to 28/2/03 to 28/2/02 to 31/8/02
Unaudited Unaudited Audited
#'000 #'000 #'000
Outdoor advertising 1,859 1,737 4,464
Extrusion businesses 7,214 8,487 15,592
9,073 10,224 20,056
3. Exceptional costs
Half Year Half Year Year
to 28/2/03 to 28/2/02 to 31/8/02
Unaudited Unaudited Audited
#'000 #'000 #'000
Cost of sales:
Development costs written off - - 216
Additional finished stock provisions - - 585
Exceptional product rectification costs - - 207
- - 1,008
Administrative expenses:
Bank facility restructuring and associated costs 28 131 274
Redundancy and reorganisation costs 128 - 140
Lease rentals & dilapidations charge on unoccupied
property
- - 126
Fixed assets impairment - - 120
156 131 660
4. Profit on disposal of subsidiary undertakings
The increasing debt burden of the Group, the poor economic conditions and the
inability of the Group to satisfy its obligations under banking arrangements,
meant that the Group could not continue in its previous form. A circular was
therefore sent to shareholders on 7 February 2003 explaining the background to a
proposal for Direct Message Group Limited to buy the Group's subsidiaries for a
cash sum of #150,000 and procure repayment of the total liability of the Group's
bank indebtedness and certain other liabilities amounting to #24,592,000.
An EGM was convened for 24 February 2003 at which shareholder approval for the
disposal was obtained. The disposal was completed on 25 February 2003.
Assets disposed of were:
#'000
Goodwill 6,700
Tangible fixed assets 3,686
Stocks 1,253
Debtors 4,295
Cash at bank and in hand 412
Creditors (3,747)
Provisions for liabilities and charges (182)
Debt issue costs written off 195
Total net assets disposed 12,612
Profit on disposal 11,988
Less: Consideration receivable (292)
Less: Investment in shares of Direct Message Group Limited (15)
Consideration 24,293
No taxation charge arose on the profit on disposal of subsidiary undertakings.
5. Earnings/(loss) per share
The calculation of earnings per share for the half year ended 28 February 2003
is based on the profit attributable to ordinary shareholders of #10,515,000
(2002 half year: loss #1,685,000; 2002 full year: #23,772,000) divided by the
number of shares in issue of 61,367,220 (28 February and 31 August 2002:
61,367,220).
The adjusted loss per share figures are based on retained profit/(loss
sustained) after adding back goodwill amortisation and impairment, exceptional
costs, and loss on disposal of fixed assets, and deducting the profit on
disposal of subsidiaries, as follows:
Half Year Half Year Year
to 28/2/03 to 28/2/02 to 31/8/02
Unaudited Unaudited Audited
#'000 P #'000 p #'000 p
Retained profit/(loss sustained) for
the period
10,515 17.1 (1,685) (2.7) (23,772) (38.7)
Goodwill amortisation and impairment 188 0.3 750 1.2 19,823 32.3
Exceptional costs - cost of sales - - - - 1,008 1.6
-administrative 156 0.3 131 0.2 660 1.1
expenses
Loss on disposal of fixed assets - - 66 0.1 63 0.1
Profit on disposal of subsidiaries (11,988) (19.5) - - - -
Adjusted loss and loss per share (1,129) (1.8) (738) (1.2) (2,218) (3.6)
At 28 February 2003, there are 2,546,500 (28 February 2002: 6,724,500; 31 August
2002: 3,768,000) share options in issue, none of which are dilutive potential
ordinary shares.
6. Investments
Half Year Half Year Year
To 28/2/03 To 28/2/02 To 31/08/02
Unaudited Unaudited Audited
#'000 #'000 #'000
Investments at cost 15 - -
Investments are in respect of the Group's shareholding of 7.5% in the ordinary
share capital of Direct Message Group Limited.
7. Reconciliation of operating loss to net cash outflow from operating
activities
Half Year Half Year Year
to 28/2/03 to 28/2/02 31/8/02
Unaudited Unaudited Audited
#'000 #'000 #'000
Operating loss (627) (867) (22,207)
Depreciation on tangible fixed assets 305 345 668
Loss on sale of tangible fixed assets 4 - -
Impairment of fixed assets - - 120
Goodwill amortisation 188 750 19,823
Amortisation and write off of intangible devt costs - 62 327
Decrease/(increase) in stock 244 (147) 357
Decrease/(increase) in debtors 50 (386) 332
(Decrease)/increase in creditors (831) (710) 54
Net cash outflow from operating activities (667) (953) (526)
8. Reconciliation of net cash flow to movement in net debt
Half Year Half Year Year
To 28/2/03 To 28/2/02 To 31/08/02
Unaudited Unaudited Audited
#'000 #'000 #'000
Increase/(decrease) in cash in the period 1,712 (1,841) (2,041)
Cash outflow from decrease in debt and hire
purchase financing 21,161 109 192
Change in net debt resulting from cashflows 22,873 (1,732) (1,849)
Amortisation and write off of facility fees (220) (31) (60)
New hire purchase financing (33) (162) (175)
Hire purchase obligations eliminated on disposal of
subsidiaries 261 - -
Unpaid loan interest added to bank loan (991) - (684)
Movement in net debt in period 21,890 (1,925) (2,768)
Net debt at start of period (21,860) (19,092) (19,092)
Net funds/(debt) at end of period 30 (21,017) (21,860)
9. Analysis of net funds/(debt)
As at As at As at
28/2/03 28/2/02 31/8/02
Unaudited Unaudited Audited
#'000 #'000 #'000
Cash at bank and in hand 30 - -
Bank overdraft - (1,482) (1,682)
Bank loan - (19,126) (19,839)
Obligations under hire purchase agreements - (409) (339)
Net funds/(debt) 30 (21,017) (21,860)
10.
The Interim Statement was approved by the Board on 28 May 2003.
11.
Copies of this statement will be sent to shareholders and are available to the
public from the Registered Office at: Barton Hall, Hardy Street, Eccles,
Manchester, M30 7WJ.
This information is provided by RNS
The company news service from the London Stock Exchange
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