RNS Number : 7526E
Addworth PLC
30 September 2008
ADDWORTH PLC
Interim report
for the half year ended
30 JUNE 2008
Chairman's Statement
Highlights for the half year to 30 June 2008 (compared to 30 June 2007)
* Turnover �1.08 million (�2.89 million)
* Consolidated Pre-tax loss �0.32million (profit: �0.02 million)
* Current investments stated at fair value of �0.86 million (�0.86 million)
* Non-current investments stated at fair value of �3.03 million (�3.23 million)
The first half of this trading year showed a substantial reduction of turnover, falling from a comparable �2.89m in 2007 to just �1.08m
in the six months to 30th June 2008. That reflected the Company's inability to fund and float a number of planned new issues. The resultant
pre-tax loss was �0.32m against a �0.02m pre-tax profit in 2007.
The trading update issued on 15 August 2008 erroneously reported that the loss for the period was expected to be �560,000. This
statement did not take into account the elimination on consolidation of the �250,000 inter-company impairment charge.
The equity market, and therefore investor appetite for new issues, has remained very weak in the second half. In late August the Board
of the Company took the decision that operating costs needed to be significantly cut back, accordingly four of the six Directors have
resigned and there has been a staff downsizing. The London office is to be turned into a serviced office facility, which in due course
should cover all of its overheads and create a revenue stream.
The Company's business model is now in a transitional stage. It may well take until Spring of next year, possibly even later, before
investors view positively the smaller company new issue market. In the meantime, whilst potential funding possibilities will continue to be
identified, the Company's investment portfolio will be monitored and disposals made where appropriate.
On behalf of the Company the Directors are currently investigating a number of new business alternatives.
It was announced on 1st September 2008 that the Company's Nominated Adviser Nabarro Wells would be resigning its position at the end of
September. The Company is considering its various options and accordingly its shares will be suspended from trading on AIM from 1st October
2008, as described in that announcement.
Mark Watson-Mitchell
Executive Chairman
UNAUDITED CONSOLIDATED INCOME STATEMENT
For the half year ended 30 June 2008
Notes Half yearended30 Half yearended30 Year ended31
June 2008� June 2007� December2007�
Income
Sale of investments 826,640 2,587,127 4,588,059
Fee income 76,250 66,741 168,508
Gains on investments 174,316 224,548 206,501
at fair value
through profit or
loss
Other income 2,698 12,992 2,789
1,079,904 2,891,408 4,965,857
Cost of sales (867,233) (2,451,983) (4,505,772)
Gross profit 212,671 439,425 460,085
Expenses
Administration (500,650) (425,780) (1,095,895)
expenses
Share based payment (34,000) - (17,000)
transactions
Total administration (534,649) (425,780) (1,112,895)
expenses
Operating (321,978) 13,645 (652,810)
profit/(loss)
Interest income 4,361 5,463 26,448
Profit/(loss) before (317,617) 19,108 (626,362)
taxation
Taxation - - (1,978)
Net profit after tax (317,617) 19,108 (628,340)
for the period
Return per ordinary
share
Basic (0.23)p 0.01p (0.46)p
Diluted (0.23)p 0.01p (0.46)p
UNAUDITED CONSOLIDATED BALANCE SHEET
As at 30 June 2008
Notes 30 June 30 June 31
2008� 2007� December2007�
Non-current assets
Plant & equipment 81,647 62,255 52,097
Intellectual - 45,225 -
property
Available for sale 3,032,829 3,230,091 3,664,272
investments
Total non-current 3,114,476 3,337,581 3,716,369
assets
Current assets
Trade and other 297,912 261,763 174,180
receivables
Cash and cash 30,770 433,779 318,681
equivalents
Investments at fair 857,521 856,701 790,427
value through profit
and loss
Total current assets 1,186,203 1,552,243 1,283,288
Total assets 4,300,679 4,889,814 4,999,657
Equity and
liabilities
Ordinary share 703,334 703,334 703,334
capital
Share premium 1,924,550 1,924,550 1,924,550
Share based payment 108,600 57,600 74,600
reserve
Investment 1,443,666 1,532,940 1,957,229
revaluation reserve
Retained earnings (1,231,579) (197,262) (844,709)
Total equity 2,948,571 4,021,162 3,815,004
Non current
liabilities
Deferred tax 561,426 656,974 763,123
liability
Current liabilities
Trade and other 790,682 211,678 421,530
payables
Total liabilities 1,352,108 868,652 1,184,653
Total equity and 4,300,679 4,889,814 4,999,657
liabilities
UNAUDITED CONSOLIDATED CASHFLOW STATEMENT
For the half year ended 30 June 2008
Notes Half yearended30 Half yearended30 Year ended31
June 2008� June 2007� December2007�
Net cash (used (202,328) (216,170) (883,697)
in)/from operating
activities
Investing activities
Purchases of non (47,532) (603,454) (336,071)
current investments
Disposals of non - - 265,364
current investments
Purchases of (42,412) (17,774) (18,827)
tangible assets
Increase in - - (250)
intangible assets
Net cash used in (89,944) (621,228) (89,784)
investing activities
Financing activities
Finance income 4,361 5,463 26,448
Proceeds from issues - 522,000 522,000
of shares
Net cash from 4,361 527,463 548,448
financing activities
Net (287,911) (309,935) (425,033)
(decrease)/increase
in cash and cash
equivalents
Cash and cash 318,681 743,714 743,714
equivalents at the
start of the period
Cash and cash 30,770 433,779 318,681
equivalents at the
end of the period
Notes to the Consolidated Interim Financial Statements
As at 30 June 2008
1. Accounting policies
The principal accounting policies are as set out in the December 2007 annual report.
The financial statements of Addworth Plc have been prepared in accordance with International Financial Reporting Standards (IFRS), IFRIC
interpretations endorsed by the European Union and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS.
These financial statements have been prepared under the historic cost convention.
The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and
assumptions that effect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or
actions, actual results may ultimately differ from those estimates.
2. Earnings per share
Half yearended30 Half yearended30 Year ended31
June 2008� June 2007� December2007�
EarningsEarnings for the (317,617) 19,108 (628,340)
purpose of basic and diluted
earnings per share
Number of sharesWeighted 140,66,666 134,633,517 137,674,885
average number of ordinary
shares for the purpose of
basic earnings per share
Weighted average number of 35,855,000 2,855,000 23,279,658
dilutive shares under warrant
and options
Weighted average number of 176,521,666 137,488,517 160,954,543
ordinary shares for the
purpose of dilutive earnings
per share
Return per ordinary share:
Basic (0.23)p 0.01p (0.46)p
Diluted (0.23)p 0.01p (0.46)p
Basic earnings per share in each period are based on the return on ordinary activities after taxation attributable to equity
shareholders.
The calculation of diluted earnings per share assumes conversion of all potentially dilutive ordinary shares, all of which arise from
share warrants.
Given the Group's reported loss for the period, outstanding share options and warrants are not taken into account when determining the
weighted average number of ordinary shares in issue during the year, and therefore the basic and diluted earnings per share are the same.
3. Loss for the half year
The loss of the parent company dealt with in these consolidated interim financial
statements is �451,646 (30/06/2007: profit �138,736). This loss is arrived at after an
impairment charge of �250,000 made in respect of the Company*s investment in Risk
Transfer Limited, a wholly owned subsidiary.
In consolidation, this figure is eliminated, resulting in a
consolidated loss for the Group of �371,617 (30/06/2007: profit
�19,108). The trading update issued on 15 August 2008
erroneously reported that the loss for the period was expected
to be �560,000. This statement did not take into account the
elimination on consolidation of the �250,000 inter-company
impairment charge.
4. Share capital
Half yearended30 Half yearended30 Year ended31
June 2008� June 2007� December2007�
Authorised
At 1 January 2008 2,000,000 1,000,000 1,000,000
400,000,000 ordinary shares of
0.5p each
IncreaseApril 2007
200,000,000 ordinary shares of 1,000,000 1,000,000
0.5p each
Balance at end of period:
400,000,000 ordinary shares of 2,000,000 2,000,000 2,000,000
0.5p
Allotted and called up
At 1 January 2008
140,666,666 ordinary shares of 703,334 583,334 583,334
0.5p each
Allottedto 30 June
200724,000,000 ordinary shares
of 0.5p each
24,000,000 ordinary shares of - 120,000 120,000
0.5p each
Balance at end of period:
140,666,666 ordinary shares of 703,334 703,334 703,334
0.5p each
5. Cash generated from/(used in) operations
Half yearended30 Half yearended30 Year ended31
June 2008� June 2007� December2007�
Cash flows from operating
activities
(Loss)/profit before taxation (317,617) 19,108 (626,362)
Adjustments for:
Depreciation charges 9,516 13,594 20,032
Fair value increase through (102,192) - -
profit and loss
Impairment of intangible asset - - 50,248
Interest receivable (4,361) (5,463) (26,448)
Share based payment 34,000 - 17,000
transactions
(Increase)/decrease in debtors (123,732) (197,209) (109,626)
Increase in current asset (67,094) (375,561) (309,287)
investments
Increase in creditors 369,152 329,361 100,746
Net cash from operating (202,328) (216,170) (883,697)
activities
6. Events after balance sheet date
On 1 August 2008, the Company announced the allotment of 6,000,000 new
ordinary shares of 0.5p each, bringing the total ordinary shares in issue
to 146,666,666.
On 15 August 2008 the Company disposed of one of its investments,
realising a book loss of approximately �350,000. On 26 August 2008, the
Company announced the resignations from the board of Melissa Gilmour,
Frans Timmermans, Robert Painting and Anthony Scutt.
Having given the Company notice at the start of July, on 1 September 2008,
the Company announced the resignation of Nabarro Wells & Co Limited as the
Company*s nominated advisor, with effect from 30 September 2008.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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