RNS Number:3586R
Elite Strategies PLC
27 October 2003
Date: 27 October 2003
ELITE STRATEGIES PLC
PRELIMINARY RESULTS FOR THE YEAR ENDED 30 JUNE 2003
FINANCIAL HIGHLIGHTS
* Turnover increased 10% to #1.13 million (2002: #1.03 million)
* Acquisition of Croesus Financial Services Limited successfully completed
* Pre-tax loss of #225,073 (2002: profit of #370,167)
* Loss for year includes former Chief Executives termination costs of #110,630
* Loss per share 0.08p (2002: earnings 0.12p)
* Settlement of vendor loan on original acquisition of the Elite Strategies
business
Enquiries:
Elite Strategies Plc
Christopher Roberts, Chairman 01480 494100
Jonathan Fry, Chief Executive Officer
Corporate Synergy Plc 020 7626 2244
Lindsay Mair
CHAIRMAN'S STATEMENT
The period covered by this statement saw very significant changes to Elite
Strategies Plc ("Elite" or the "Company"). We made our first acquisition of an
independent financial advisory business when on 26 March 2003. The Company
acquired the entire issued share capital of Croesus Financial Services Ltd ("
Croesus"). Croesus, an independent financial advisory company has five offices
located around East Anglia and the East Midlands.
At the time of the acquisition, Jonathan Fry, the Chief Executive of Croesus was
appointed Chief Executive of Elite.
In line with the broader financial services sector, trading of the two
subsidiaries of the Group has remained challenging and the Directors are
disappointed that the results remain below expectation, with the Group reporting
a loss after taxation of #207,962 on turnover of #1,128,971. The loss includes
an exceptional cost of #110,630, related to the early termination of the
previous chief executives service contract.
As announced on 26 September 2003, due to the continued challenging trading
environment, the Board and management have undertaken a complete review of the
cost and structure of the business and have implemented a plan to reduce
overheads and improve the trading position of the company.
Further consolidation within the IFA marketplace will continue and acquisition
opportunities are expected to arise in the future. Acquisitions remain a core
objective of the Group and the Group continues to be well placed to accommodate
additional independent, financial advisory businesses into the existing
operating structure.
The Board have not determined any dividend policy. The Company is currently not
in a position to pay dividends although it remains the aspiration of the
Directors to make dividend payments in the future.
The Board will continue to review progress of the Group through the difficult
trading environment and look for further attractive acquisitions to provide
critical mass to the organisation.
Christopher Roberts
Chairman
27 October 2003
Chief Executive's Report
Following the acquisition of Croesus Financial Services Limited ("Croesus") in
March 2003, the Group now operates two principal trading subsidiaries, ESP
Investments and Pensions Limited ("ESPL") and Croesus. Both subsidiaries
provide financial services advice to companies and individuals and our clients
include both quoted and privately owned companies with individual advice being
extended to the employees of these companies and to wealthy individuals.
ESPL specialises in dealing primarily with advice to the corporate sector whilst
Croesus specialises in dealing primarily with individual clients providing a
full breadth of independent financial advisory services. The combined Group now
operates from six offices within East Anglia and the East Midlands and it is the
Group's intention to build the business around these six core offices.
During this trading year IFA firms continued to face tremendous challenges in
running their business profitably, due to the continuing uncertainty on stock
market performance and a fall in profit margins for many of our corporate
clients. This led to many clients delaying decisions and thus reducing the
opportunity to generate immediate revenues for the group.
In the second quarter of the 2003/2004 financial year there appears to have been
an increase in potential new business which is being vigorously pursued. We
continue to attract new corporate and individual clients and actively service
and market to our existing client base, offering innovative financial solutions
to our clients' varied financial planning objectives.
With the acquisition of Croesus the Directors expect the Company's turnover will
increase for the coming year. Recurring income is a key factor in the future
success of any financial services business as well as an acquisition policy to
expand the Group further, the Group will be focusing on further developing
recurring income and seeking good quality acquisition prospects.
Without a doubt there will be further changes within the IFA sector as a result
of changes in regulation and changes as a result of the Sandler & Pickering
reports. This will generate further opportunities for the Group to make
additional acquisitions and sales and create marketing opportunities for both
our trading subsidiaries.
Jonathan Fry
Chief Executive
27 October 2003
GROUP PROFIT & LOSS ACCOUNT
For The Year Ended 30 June 2003
2003 2002
Total Total
TURNOVER # #
Continuing operations - existing 1,128,971 1,028,577
_________ _________
Group turnover 1,128,971 1,028,577
COST OF SALES (500,904) (168,128)
_________ _________
GROSS PROFIT 628,067 860,449
Administrative expenses (742,133) (488,061)
Exceptional item - Chairman's termination costs (110,630) -
_________ _________
GROUP OPERATING (LOSS)/PROFIT (224,696) 372,388
Interest receivable and similar income 5,758 46,080
Interest payable (6,135) (48,301)
________ _________
(LOSS)/PROFIT ON ORDINARY
ACTIVITIES BEFORE TAXATION (225,073) 370,167
TAXATION 17,111 (94,065)
_________ _________
(LOSS)/PROFIT ON ORDINARY
ACTIVITIES AFTER TAXATION (207,962) 276,012
Dividends - -
_________ _________
RETAINED (LOSS)/PROFIT FOR THE YEAR (207,962) 276,012
_________ _________
Basic earnings per share (0.08p) 0.12p
Diluted earnings per share (0.08p) 0.12p
The Company has no recognised gains or losses other than the loss for the year.
GROUP BALANCE SHEET
As At 30 June 2003
30 June 2003 30 June 2002
# #
FIXED ASSETS
Intangible fixed assets 937,577 708,666
Tangible fixed assets 23,407 6,631
_________ _________
960,984 715,297
_________ _________
CURRENT ASSETS
Debtors 323,881 334,897
Cash at bank and in hand 191,208 1,216,361
_________ _________
515,089 1,551,258
CREDITORS: Amounts falling due within one year (537,053) (1,557,145)
_________ _________
NET CURRENT (LIABILITIES) (21,964) (5,887)
_________ _________
TOTAL ASSETS LESS CURRENT LIABILITIES 939,020 709,410
CREDITORS: Amounts falling due after more
than one year (30,822) -
PROVISION FOR LIABILITIES AND CHARGES - -
_________ _________
NET ASSETS 908,198 709,410
_________ _________
CAPITAL & RESERVES
Called up share capital - Ordinary (equity) 174,660 113,160
- Deferred (non equity) 365 365
Share premium account 629,731 284,481
Profit & loss account 103,442 311,404
_________ _________
SHAREHOLDERS' FUNDS 908,198 709,410
_________ _________
Equity shareholders' funds 907,833 708,045
Non-equity shareholders' funds 365 365
_______ _______
908,198 708,410
_______ _______
GROUP CASH FLOW STATEMENT
For The Year Ended 30 June 2003
30 June 2003 30 June 2002
# #
NET CASH INFLOW/(OUTFLOW) FROM
OPERATING ACTIVITIES 28,877 (97,776)
RETURNS ON INVESTMENTS &
SERVICING OF FINANCE
Interest received 5,758 46,080
Interest paid (6,135) (48,301)
_________ ________
NET CASH OUTFLOW FROM
RETURNS ON INVESTMENTS & SERVICING
OF FINANCE (377) (2,221)
TAXATION
UK corporation tax paid (81,868) (95,728)
CAPITAL EXPENDITURE AND FINANCIAL INVESTMENT
Purchase of intangible fixed assets (43,000) -
Purchase of tangible fixed assets (9,305) (7,389)
_________ ________
NET CASH OUTFLOW FROM
INVESTING ACTIVITIES (52,305) (7,389)
ACQUISITIONS AND DISPOSALS
Purchase of subsidiary undertakings (166,030) -
Cash acquired with subsidiary undertakings 52,462 -
_________ ________
NET CASH OUTFLOW FROM ACQUISITIONS AND DISPOSALS (113,568) -
EQUITY DIVIDENDS PAID - -
_________ ________
NET CASH OUTFLOW BEFORE FINANCING (219,241) (203,114)
_________ ________
FINANCING
Issue of shares 307,500 59,259
Expenses of share issues (12,750) -
New finance leases 1,986 -
Repayments of capital element of finance leases (100) -
Repayment of loans (1,103,591) -
_________ ________
NET CASH (OUTFLOW)/INFLOW FROM FINANCING (806,955) 59,259
_________ ________
DECREASE IN CASH (1,026,196) (143,855)
_________ ________
1. EARNINGS PER SHARE
The basic earnings per share are calculated by dividing the result
for the financial year attributable to shareholders by the weighted average
number of shares in issue. In calculating the diluted earnings per share, share
options outstanding have been taken into account.
The weighted average number of shares were:
30 June 2003 30 June 2002
Number Number
Basic weighted average number of shares 250,365,971 223,349,532
Dilutive potential ordinary shares: - -
Employee share options __________ __________
250,365,971 223,349,532
__________ __________
2. NET CASH INFLOW/(OUTFLOW) FROM OPERATING ACTIVITIES
30 June 2003 30 June 2002
# #
Operating (loss)/profit (224,696) 372,388
Depreciation 6,913 14,504
Amortisation 41,847 37,296
Decrease/(increase) in debtors 128,238 (68,324)
Increase/(decrease) in creditors 76,575 (453,640)
_______ _________
Net cash inflow/(outflow) from operating activities 28,877 (97,776)
_______ _________
3. RECONCILIATION OF CHANGE IN CASH TO MOVEMENT IN NET FUNDS
2003 2002
# #
Cashflow from activities (1,026,196) (143,855)
Reduction in borrowings 1,101,705 -
_________ _________
Movement in net funds in the year 75,509 (143,855)
_________ _________
4. ANALYSIS OF NET CASH AND DEBT
30 June 2002 Cashflow 30 June 2003
# # #
Cash at bank 1,216,361 (1,025,153) 191,208
Bank overdrafts - (1,043) (1,043)
________ ________ ________
1,216,361 (1,026,196) 190,165
Debt due within one year (1,103,591) 1,103,194 (397)
Debt due after more than one year - (1,489) (1,489)
________ ________ _________
Net funds 112,770 75,509 188,279
________ ________ ________
5. The financial information set out in this document does not constitute
statutory group accounts.
6. The report and accounts for the year ended 30 June 2003 will be
posted to shareholders shortly and, after being laid before the Annual General
Meeting, will be delivered to the Registrar of Companies.
7. The Annual General Meeting will be held at Corporate Synergy plc, 12
Nicholas Lane, London, EC4N 7BN on Wednesday, 26 November 2003 at 11.30am.
Copies of this announcement will be available to the public, free of charge,
from the office of Corporate Synergy plc, 12 Nicholas Lane, London EC4N 7BN
during normal office hours, with the exception of Saturdays, Sundays, for 14
days from today.
This information is provided by RNS
The company news service from the London Stock Exchange
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