TIDMATV
RNS Number : 7207X
Antonov PLC
20 August 2009
ATV.L
Antonov plc ('the Company' or 'the Group')
Unaudited Interim Results for the
six months ended 30 June 2009
Key Points:
+----------+----------+----------+--------------+
| | | ? | Agreement |
| | | | signed to |
| | | | form |
| | | | joint |
| | | | venture |
| | | | with |
| | | | Chong |
| | | | Qing |
| | | | Landai |
| | | | Industries |
| | | | Co., Ltd |
| | | | ("Landai") |
| | | | to |
| | | | manufacture |
| | | | and |
| | | | distribute |
| | | | the TX6 |
| | | | transmission |
| | | | in China |
+----------+----------+----------+--------------+
| | | ? | First |
| | | | Lifan |
| | | | 620 car |
| | | | now in |
| | | | Warwick |
| | | | Technical |
| | | | Centre as |
| | | | part of |
| | | | the |
| | | | Agreement |
| | | | secured |
| | | | with |
| | | | Lifan |
+----------+----------+----------+--------------+
| | | ? | Industry |
| | | | (Group) |
| | | | Co., Ltd |
| | | | and |
| | | | Landai. |
+----------+----------+----------+--------------+
| | | ? | Revenue |
| | | | for the |
| | | | period |
| | | | of |
| | | | GBP136k |
| | | | (2008: |
| | | | GBP |
| | | | 214k) |
+----------+----------+----------+--------------+
| | | ? | Loss for |
| | | | the |
| | | | period |
| | | | reduced |
| | | | to |
| | | | GBP497k |
| | | | (2008: |
| | | | GBP962k) |
+----------+----------+----------+--------------+
| | | ? | Funding |
| | | | facilities |
| | | | of EUR17.97m |
| | | | available |
| | | | at 30 June |
| | | | 2009. |
+----------+----------+----------+--------------+
Jos Haag, Antonov's Chairman and CEO, commented:
"Following our strategic review and reorganisation in January this year we have
achieved significant commercial and technical progress in the first six months,
securing a joint venture partner and committed funding to bring the TX6 to
production in China. We have further strengthened our core capabilities in the
UK and increased our presence in Chong Qing with new offices and recruitment of
technical personnel. Our energies are firmly directed to deliver the engineering
programme on time. "
For further information please contact:
+----+--------------------------------------------------+--------------------+
| | Dr Jos Haag, Executive Chairman | +44 1926 455 800 |
| | Antonov plc | +31 651 561 767 |
+----+--------------------------------------------------+--------------------+
| | Tony Rawlinson/Antony Legge | +44 20 7492 4777 |
| | Dowgate Capital Advisers Limited | |
+----+--------------------------------------------------+--------------------+
| | Shane Dolan | +44 20 7448 1000 |
| | Biddicks | |
+----+--------------------------------------------------+--------------------+
| | Company's website: | www.antonovplc.com |
+----+--------------------------------------------------+--------------------+
Chairman and Chief Executive Officer's Report
Introduction
I am very pleased to report good progress during the first half of the current
financial year, in particular as we have successfully completed the
reorganisation and refocusing of the business following the changes to the Board
and management announced earlier in the year.
Operations review
During the first half of the current financial year we implemented a number of
actions designed to strengthen the commercial position of the Company. In
January 2009, the Company initiated a restructuring of its operations designed
to reduce its cost base by around GBP1.0 million per annum, and in February
2009, the Company announced that its strategy had been adjusted to focus more on
developing commercial opportunities with a short time to market and by securing
commercial engineering projects.
As part of this programme we pushed forward with our intense marketing efforts
in China to secure commitment from potential customers for the TX6 automatic
transmission. Technical targets for the TX6 have been achieved, including shift
quality and drive comfort; noise; efficiency and fuel consumption; and
manufacturing feasibility, and a demonstration vehicle with the TX6 automatic
transmission was shipped to China in November 2008 for the purposes of marketing
and securing purchase agreements for the TX6 from potential customers.
Durability testing has been successfully completed at 50,000 km and it is
planned to continue this to the 70,000 km level in the coming period.
As a result of these efforts, on 27 May 2009, we signed a three party agreement
with Chongqing Landai Industry Co. Ltd (Landai), one of the leading
manufacturers of transmissions in China and Lifan Industry (Group) Co. Ltd
(Lifan), who manufacture cars in China. This agreement was for the installation
of the TX6 automatic transmission into a Lifan 620 vehicle, which will be used
as demonstration vehicle.Lifan, as a preferred customer for the TX6 are expected
to place an order for the first batch of the transmissions to be produced. The
vehicle arrived in the UK in late July and the technical programme is now under
way.
On 5 June 2009 we signed an agreement with Landai to form a joint venture for
the manufacture and distribution of the TX6 transmission. The joint venture's
manufacturing plant will be established at Landai's new site in Chongqing and is
expected to have the capacity to manufacture at least 200,000 transmissions per
year, with production expected to commence in the course of 2011. We are
currently in the process of finalising the establishment of the joint venture
legal entity in China. In the meantime, Antonov and Landai are already working
closely together to market the transmission. Initial discussions with some
prospective customers in China have been positive and Landai has already started
working on production plans, obtaining cost estimates and sourcing part
suppliers for the transmission.
Financial review
Group revenues for the first half period to 30 June 2009 were GBP136k as
compared GBP214k for the corresponding period in 2008. Revenues comprise
engineering services fees in relation to engineering services and units for the
2 speed product. Operating expenses before capitalisation of development costs
for the period ended 30 June 2009 were GBP2,069k (GBP1,552k after
capitalisation) and includes GBP200k in respect of reorganisation costs,
compared to GBP3,046k (GBP1,174k after capitalisation) for the period ended 30
June 2008, reflecting an underlying reduction in operating costs of GBP977k. The
loss from operations increased to GBP1, 459k (period ended 30 June 2008:
GBP962k), reflecting lower levels of capitalised costs in the current period.
In the year to 31 December 2008, the Company fully impaired all costs previously
capitalised, resulting in an impairment charge of GBP6,986k. However, in light
of the joint venture formation agreement with Landai, we have reviewed the
carrying value of intangibles related to the TX6 transmission and have
determined to reverse GBP962k of that impairment charge in this first half,
which has resulted in a net loss of GBP497k as compared with a net loss of
GBP962k in the corresponding period in 2008.
With regard to funding, we continue to rely on access to funding under our
agreements with Quivest B.V.. Shareholders approved a reorganisation of the
Company's share capital in February 2009, which resulted in a reduction in the
nominal value of the shares, and subsequently we entered into a share finance
facility with Quivest B.V for EUR20 million to support our current and future
working capital needs. We also signed a second agreement with Quivest B.V for a
loan facility of EUR15 million to fund the manufacturing joint venture in China.
The funding arrangements result in the Company issuing shares on a frequent and
regular basis. In order to have these shares admitted to trading on Euronext
Amsterdam, the Company was required to publish a prospectus. Considerable
management time and effort was devoted to this matter during the first half and
the prospectus was published on 23 July 2009.
The company has a total available funding facility of EUR17.97 million in place at
the end of June 2009 under its share finance facility, as well as the loan
facility of EUR15 million, with no obligations related to external loans or
borrowings.
Board Changes
John Moore and Christopher Ross both stepped down from their roles as Chief
Executive and Chairman, respectively, in January 2009 as part of the change in
the Company's strategy, at which time I was appointed Executive Chairman and
Chief Executive Officer. In February, Bernd Ramler was appointed as a
non-executive director. The Company is taking steps to ensure that a further
independent non-executive director is appointed in the near future.
Principal risks and uncertainties
The principal risks and uncertainties set out on page 11 of the Annual Report
and Financial Statements for the year ended 31 December 2008 remain the same for
the Interim Condensed Consolidated Financial Statements and the remaining half
year to 31 December 2009. Those risks and uncertainties comprise: foreign
currency risk; market risk; technological risk; patent protection;
relationships; commercialisation; going concern and liquidity.
Statement of directors' responsibilities
The Directors confirm that to the best of their knowledge, this set of condensed
consolidated interim financial statements has been prepared in accordance with
IAS34 Interim Financial Reporting, as adopted by the European Union, and that
the interim management report herein includes a fair review of the information
required by the Disclosure and Transparency Rules of the UK's Financial Services
Authority, paragraphs DTR 4.2.7 and 4.2.8.
+-----------------------+---------------------------+---------------------------------+
| | Directors: | |
+-----------------------+---------------------------+---------------------------------+
| | Dr Jos E. Haag, | Executive Chairman and Chief |
| | | Executive Officer |
+-----------------------+---------------------------+---------------------------------+
| | Mr Mory Motabar, | Interim Chief Financial Officer |
+-----------------------+---------------------------+---------------------------------+
| | Mr Bernd W. Ramler, | Non-executive director |
+-----------------------+---------------------------+---------------------------------+
For and on behalf of the directors:
Dr J E Haag, Executive Chairman
+----------------------------+-------+----------------+----------------+-------------+
| INTERIM CONSOLIDATED INCOME STATEMENT |
+------------------------------------------------------------------------------------+
| | | | | |
+----------------------------+-------+----------------+----------------+-------------+
| | | Six months | Six months | Year ended |
| | | ended | ended | 31 December |
| | | 30 June | 30 June | 2008 |
| | | 2009 | 2008 | |
+----------------------------+-------+----------------+----------------+-------------+
| | Note | Unaudited | Unaudited | Audited |
| | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-------+----------------+----------------+-------------+
| Revenue | | 136 | 214 | 339 |
+----------------------------+-------+----------------+----------------+-------------+
| Cost of sales | | (43) | (2) | (7) |
+----------------------------+-------+----------------+----------------+-------------+
| Gross profit | | 93 | 212 | 332 |
+----------------------------+-------+----------------+----------------+-------------+
| Operating expenses | | (1,552) | (1,174) | (3,128) |
+----------------------------+-------+----------------+----------------+-------------+
| Loss from operations | | (1,459) | (962) | (2,796) |
+----------------------------+-------+----------------+----------------+-------------+
| Impairment credit/(charge) | | 962 | 0 | (6,986) |
+----------------------------+-------+----------------+----------------+-------------+
| Loss before tax | | (497) | (962) | (9,782) |
+----------------------------+-------+----------------+----------------+-------------+
| Taxation | | 0 | 0 | 0 |
+----------------------------+-------+----------------+----------------+-------------+
| Loss for the period | | (497) | (962) | (9,782) |
+----------------------------+-------+----------------+----------------+-------------+
| | | | | |
+----------------------------+-------+----------------+----------------+-------------+
| Loss per share | | | | |
+----------------------------+-------+----------------+----------------+-------------+
| - Basic and diluted | 5 | (4p) | (1.5p) | (14.3p) |
| (pence) | | | | |
+----------------------------+-------+----------------+----------------+-------------+
The notes on pages 5 to 12 form part of these financial statements.
+----------------------------+-------+----------------+----------------+--------------+
| INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
+-------------------------------------------------------------------------------------+
| | | | | |
+----------------------------+-------+----------------+----------------+--------------+
| | | Six months | Six months | Year ended |
| | | ended | ended | 31 December |
| | | 30 June | 30 June | 2008 |
| | | 2009 | 2008 | |
+----------------------------+-------+----------------+----------------+--------------+
| | | Unaudited | Unaudited | Audited |
| | | GBP'000 | GBP'000 | GBP'000 |
+----------------------------+-------+----------------+----------------+--------------+
| Loss for the period | | (497) | (962) | (9,782) |
+----------------------------+-------+----------------+----------------+--------------+
| Exchange differences on | (201) | 156 | 56 |
| translation of foreign operations | | | |
+------------------------------------+----------------+----------------+--------------+
| Total comprehensive loss for the | (698) | (806) | (9,726) |
| period | | | |
+----------------------------+-------+----------------+----------------+--------------+
The notes on pages 5 to 12 form part of these financial statements.
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+--------------------------+
| INTERIM CONSOLIDATED STATEMENT OF EQUITY |
+-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Share | Share | Unlisted | Capital | Foreign | Warrant | Retained | Total |
| | capital | premium | Warrant | redemption | exchange | reserve | losses | equity |
| | | | Reserve | reserve | reserve | | | |
+--------------------------+ + + + + + + + +
| | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Unaudited | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Balance at 1 January | 10,586 | 29,458 | - | 2,587 | 76 | 370 | (38,864) | 4,213 |
| 2008 | | | | | | | | |
+ + + + + + + + + +
| | | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+--------------------------+
| Loss for the period | - | - | - | - | - | - | (962) | (962) |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Other comprehensive | - | - | - | - | 429 | - | (408) | 21 |
| income (loss) | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Total comprehensive loss | - | - | - | - | 429 | - | (1,370) | (941) |
| for the period | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Increase in share | 3,102 | 2,286 | - | - | - | - | - | 5,388 |
| capital | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Share issue costs | - | (602) | - | - | - | - | - | (602) |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Share based payment | - | - | - | - | - | - | 133 | 133 |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Balance at 30 June 2008 | 13,688 | 31,142 | - | 2,587 | 505 | 370 | (40,101) | 8,191 |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Audited | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Balance at 1 January | 10,586 | 29,458 | - | 2,587 | 76 | 370 | (38,864) | 4,213 |
| 2008 | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Loss for the year | - | - | | - | - | - | (9,782) | (9,782) |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Other comprehensive | - | - | | - | 44 | - | - | 44 |
| income (loss) | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Total comprehensive loss | - | - | - | - | 44 | - | (9,782) | (9,738) |
| for the year | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Increase in share | 6,839 | 2,843 | - | - | - | - | - | 9,682 |
| capital | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Share issue costs | - | (1,307) | - | - | - | - | - | (1,307) |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Creation of unlisted | | (715) | 715 | - | - | - | - | - |
| warrants reserve | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Share based payment | - | - | - | - | - | - | 218 | 218 |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Balance at 31 December | 17,425 | 30,279 | 715 | 2,587 | 120 | 370 | (48,428) | 3,068 |
| 2008 | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Unaudited | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Balance at 1 January | 17,425 | 30,279 | 715 | 2,587 | 120 | 370 | (48,428) | 3,068 |
| 2009 | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Loss for the period | - | - | - | - | - | - | (497) | (497) |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Other comprehensive | - | - | - | - | (98) | - | - | (98) |
| income (loss) | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Total comprehensive loss | - | - | - | - | (98) | - | (497) | (595) |
| for the period | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Increase in share | 615 | 2,848 | - | - | - | - | - | 3,463 |
| capital | | | | | | | | |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Share issue costs | - | (3,123) | - | - | - | - | - | (3,123) |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Share based payment | - | - | - | - | - | - | 10 | 10 |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+
| Balance at 30 June 2009 | 18,040 | 30,004 | 715 | 2,587 | 22 | 370 | (48,915) | 2,823 |
+--------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+--------------------------------------+----------+---------+--------------------------+
All amounts are attributable to equity holders of the parent.
The notes on pages 5 to 12 form part of these financial statements.
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| INTERIM CONSOLIDATED BALANCE SHEET |
+-----------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Six months | Six months | Year ended |
| | | ended | ended | 31 December |
| | | 30 June | 30 June | 2008 |
| | | 2009 | 2008 | |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| | Note | Unaudited | Unaudited | Audited |
| | | GBP'000 | GBP'000 | GBP'000 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| ASSETS | | | | |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Non-current assets | | | | |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Property, plant and | | 244 | 630 | 315 |
| equipment (PPE) | | | | |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Intangible assets | 6 | 2,273 | 6,455 | 872 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Total non-current assets | | 2,517 | 7,085 | 1,187 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Current assets | | | | |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Inventories | | - | 100 | - |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Trade and other receivables | | 248 | 536 | 103 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Prepayments | | 1,116 | 2,940 | 2,928 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Cash and short term deposits | 8 | 123 | 126 | 500 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Total current assets | | 1,487 | 3,702 | 3,531 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Total assets | | 4,004 | 10,787 | 4,718 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| LIABILITIES AND EQUITY | | | | |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Current liabilities | | | | |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Trade and other payables | 8 | 1,181 | 2,596 | 1,650 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Total current liabilities | | 1,181 | 2,596 | 1,650 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Total liabilities | | 1,181 | 2,596 | 1,650 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Equity attributable to | | | | |
| equity holders of the parent | | | | |
| company | | | | |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Share capital | 9 | 18,040 | 13,688 | 17,425 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Share premium reserve | | 30,004 | 31,142 | 30,279 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Capital redemption reserve | | 2,587 | 2,587 | 2,587 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Foreign exchange reserve | | 22 | 505 | 120 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Unlisted warrants reserve | | 715 | 0 | 715 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Warrant reserve | | 370 | 370 | 370 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Retained losses | | (48,915) | (40,101) | (48,428) |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Total equity | | 2,823 | 8,191 | 3,068 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
| Total liabilities and equity | | 4,004 | 10,787 | 4,718 |
+------------------------------+------+------------------------------------------+-------------------------------------------+------------------------------------------+
The notes on pages 5 to 12 form part of these financial statements.
+--+-+---------------------------------------+--+------------+-------------+-------------+
| INTERIM CONSOLIDATED CASH FLOW STATEMENT |
+----------------------------------------------------------------------------------------+
| | | | Six months | Six months | Year ended |
| | | | ended | ended | 31 December |
| | | | 30 June | 30 June | 2008 |
| | | | 2009 | 2008 | |
+----+---------------------------------------+--+------------+-------------+-------------+
| | | | Unaudited | Unaudited | Audited |
| | | | GBP'000 | GBP'000 | GBP'000 |
+----+---------------------------------------+--+------------+-------------+-------------+
| Operating activities | | | | |
+--------------------------------------------+--+------------+-------------+-------------+
| Loss before tax | | (487) | (962) | (9,782) |
+--------------------------------------------+--+------------+-------------+-------------+
| Adjustments for: | | | | |
+--------------------------------------------+--+------------+-------------+-------------+
| Depreciation | | 72 | 71 | 179 |
+--------------------------------------------+--+------------+-------------+-------------+
| Amortisation | | 30 | 181 | 71 |
+--------------------------------------------+--+------------+-------------+-------------+
| Loss on disposal of tangible assets | | 0 | 0 | 145 |
+--------------------------------------------+--+------------+-------------+-------------+
| IIImpairment of tangible assets | | (962) | 0 | 6,986 |
+--------------------------------------------+--+------------+-------------+-------------+
| Share-based payments - stock options | | 46 | 134 | 138 |
+--------------------------------------------+--+------------+-------------+-------------+
| Share-based payments - non cash | | 120 | 0 | 26 |
| payments | | | | |
+--------------------------------------------+--+------------+-------------+-------------+
| | | | (694) | 386 | 7,545 |
+--+-----------------------------------------+--+------------+-------------+-------------+
| Adjustments for non cash movements: | | | | |
+--------------------------------------------+--+------------+-------------+-------------+
| Exchange movements | | (201) | 156 | 56 |
+--------------------------------------------+--+------------+-------------+-------------+
| | | | (201) | 156 | 56 |
+--+-----------------------------------------+--+------------+-------------+-------------+
| Cash flow from operations before changes | | | | |
| in | | | | |
+--------------------------------------------+--+------------+-------------+-------------+
| working capital and provisions | | (1,382) | (420) | (2,181) |
+--------------------------------------------+--+------------+-------------+-------------+
| (Increase)/Decrease in trade and | | (184) | 60 | 1,220 |
| other receivables ** | | | | |
+--------------------------------------------+--+------------+-------------+-------------+
| (Increase)/Decrease in inventories | | 0 | (65) | 35 |
+--------------------------------------------+--+------------+-------------+-------------+
| (Decrease)/Increase in trade and | | (349) | 219 | (673) |
| other payables | | | | |
+--------------------------------------------+--+------------+-------------+-------------+
| | | | (533) | 214 | 582 |
+----+---------------------------------------+--+------------+-------------+-------------+
| Net cash outflow from operating activities | | (1,915) | (1,494) | (1,599) |
+--------------------------------------------+--+------------+-------------+-------------+
| Investing activities | | | | |
+--------------------------------------------+--+------------+-------------+-------------+
| Payments to acquire PPE | | (1) | (192) | (129) |
+--------------------------------------------+--+------------+-------------+-------------+
| Payments to acquire intangible | | (60) | (240) | (70) |
| assets | | | | |
+--------------------------------------------+--+------------+-------------+-------------+
| Capitalisation of development costs | | (517) | (1,872) | (3,123) |
+--------------------------------------------+--+------------+-------------+-------------+
| | | | (578) | (2,304) | (3,322) |
+----+---------------------------------------+--+------------+-------------+-------------+
| Financing activities | | | | |
+--------------------------------------------+--+------------+-------------+-------------+
| Proceeds from issue of ordinary | | 2,116 | 2,538 | 5,323 |
| shares | | | | |
+--------------------------------------------+--+------------+-------------+-------------+
| | | | 2,116 | 2,538 | 5,323 |
+----+---------------------------------------+--+------------+-------------+-------------+
| (Decrease)/Increase in cash | | (377) | (143) | 402 |
+--------------------------------------------+--+------------+-------------+-------------+
| Cash and cash equivalents at the beginning | | 500 | 226 | 98 |
| of the period | | | | |
+--------------------------------------------+--+------------+-------------+-------------+
| Cash and cash equivalents at the end of | | 123 | 83 | 500 |
| the period | | | | |
+--+-+---------------------------------------+--+------------+-------------+-------------+
** Excludes prepaid items settled with the issue of equity
The notes on pages 5 to 12 form part of these financial statements.
Notes to the Financial Statements
1 Corporate Information
Antonov plc is a public limited liability company incorporated in the United
Kingdom under the Companies Act 1985. The address of the registered office is 2
Hawkes Drive, Heathcote Industrial Estate, Warwick, Warwickshire, CV34 6LX. The
parent company's shares are publicly traded on AIM (The Alternative Investment
Market of the London Stock Exchange) with a secondary listing on Euronext
Amsterdam.
2 Basis of preparation and statement of compliance
The results for the six months to 30 June 2009 have been prepared in accordance
with IAS34, Interim Financial Reporting, as adopted by the European Union.
The results for the six months to 30 June 2009 and 2008 are unaudited and not
reviewed. The interim results do not constitute statutory accounts as defined in
section 435 of the Companies Act 2006. These interim results do not include all
the information and disclosures required in the annual financial statements and
should be read in conjunction with the Group's annual financial statements at 31
December 2008. The results for the full year 2008 have been taken from the
Group's 2008 Annual Report and Accounts. The auditor has reported on the 2008
financial statements and the report contained an emphasis of matter statement
under section 498(3) of the Companies Act 2006 regarding the Group's going
concern. The Group's 2008 Report and Accounts have been filed with the Registrar
of Companies.
Statement of compliance with AIM Rule 31
The Company is quoted on AIM and, as such under AIM Rule 31 is required to:
+----------+------------------+
| ? | Have in |
| | place |
| | sufficient |
| | procedures, |
| | resources |
| | and |
| | controls to |
| | enable its |
| | compliance |
| | with the |
| | AIM Rules; |
+----------+------------------+
| ? | Seek |
| | advice |
| | from its |
| | nominated |
| | adviser |
| | ("Nomad") |
| | regarding |
| | its |
| | compliance |
| | with Aim |
| | Rules |
| | whenever |
| | appropriate |
| | and take |
| | that advice |
| | into |
| | account; |
+----------+------------------+
| ? | Provide |
| | the |
| | Company's |
| | Nomad |
| | with any |
| | information |
| | it requests |
| | in order |
| | for the |
| | Nomad to |
| | carry out |
| | its |
| | responsibilities |
| | under the AIM |
| | Rules for |
| | Companies and |
| | the AIM Rules |
| | for Nominated |
| | Advisers; |
+----------+------------------+
| ? | Ensure |
| | that |
| | each of |
| | the |
| | Company's |
| | Directors |
| | accepts |
| | full |
| | responsibility, |
| | collectively |
| | and |
| | individually, |
| | for compliance |
| | with the AIM |
| | Rules and; |
+----------+------------------+
| ? | Ensure |
| | that |
| | each |
| | director |
| | discloses |
| | without |
| | delay all |
| | information |
| | which the |
| | Company |
| | needs in |
| | order to |
| | comply with |
| | AIM Rule 17 |
| | (Disclosure |
| | of |
| | Miscellaneous |
| | Information) |
| | insofar as |
| | that |
| | information |
| | is known to |
| | the director |
| | or could with |
| | reasonable |
| | diligence be |
| | ascertained |
| | by the |
| | director. |
+----------+------------------+
In order to ensure that these obligations are being discharged the Board has
established a committee of the board (the "AIM Committee"), chaired by Dr J.E.
Haag, Executive Chairman and Chief Executive Officer of the Company.
Having reviewed relevant Board papers, and met with the Company's Executive
Board and the Nomad to ensure that such is the case, the AIM Committee is
satisfied that the Company's obligations under AIM Rule 31 have been satisfied
during the period under review.
Going concern
The accounts have been prepared on a going concern basis which assumes that the
Group will continue in operational existence for the foreseeable future.
At 30 June 2009, the Group had cash of GBP123k (30 June 2008: GBP126, 31
December 2008: GBP500k) and an undrawn committed share finance facility of
EUR17,970k, approximately GBP15,280k, (30 June 2008: EUR23,300k, approximately
GBP18,400k, 31 December 2008: EUR16,735k, approximately GBP16,248k), and the Group
incurred a loss for the six months ended 30 June 2009 of GBP497k (six months
ended 30 June 2008: GBP962k , year ended 31 December 2008: GBP9,782k). The
impact of global economic conditions on potential customers and the resultant
effect on the estimated time to market for the Group's products are described in
the Chairman and Chief Executive's Report, as are the actions taken by the
Directors to adapt their strategy and reduce costs.
The committed share finance facility was replaced with a new EUR20 million share
finance facility and a EUR15 million credit facility on 18 February 2009, with
Quivest B.V. ("Quivest"). Under the terms of the share finance facility the
Group is entitled to draw down a minimum of EUR250k per month and a maximum of
EUR600k per month. During the six months ended 30 June 2009 the Group received
EUR2,230 from its share finance facilities (six months ended 30 June 2008: EUR3,075,
year ended 31 December 2008: EUR6,575) and since 30 June 2009 the Group has
received further funding of EUR450k from the 18 February 2009 share finance
facility. The Directors have prepared cash flow forecasts to 31 December 2010
which show that the Group can operate within its share finance facility.
Quivest's business is the provision of financing and acquiring and disposing of
investments and the Equity Facility and Loan Facility as described above are
both being provided by Quivest acting as principal. In the current financial
environment there can be no guarantee that future funding will be forthcoming
from Quivest. The ability of Quivest to meet its obligations under the share
finance facility and the credit facility is dependent in turn on it continuing
to have access to sufficient funds. The directors have concluded that the
combination of these circumstances represents a material uncertainty that may
cast significant doubt upon the Group's and Company's ability to continue as a
going concern. However, the board of Antonov plc takes comfort from Quivest's
historical support and track record in providing the necessary funding to the
Group when requested and the directors are of the opinion that through its
funding facilities with Quivest, it has access to sufficient working capital for
its foreseeable requirements. Accordingly, the directors have concluded that it
is appropriate for the accounts to be prepared on a going concern basis.
3 Accounting policies
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual financial statements for the year ended 31
December 2008, except for the adoption of new standards and interpretations as
of 1 January 2009, noted below:
+----------+-------------------+
| ? | IFRS2 Share-based |
| | payment - vesting |
| | conditions and |
| | cancellations |
+----------+-------------------+
| | The |
| | standard |
| | has been |
| | amended |
| | to |
| | clarify |
| | the |
| | definition |
| | of vesting |
| | conditions |
| | and to |
| | prescribe |
| | the |
| | accounting |
| | treatment |
| | of an |
| | award that |
| | is |
| | effectively |
| | cancelled |
| | because a |
| | non-vesting |
| | condition |
| | is not |
| | satisfied. |
| | The |
| | adoption of |
| | this |
| | amendment |
| | did not |
| | have any |
| | impact on |
| | the |
| | financial |
| | position or |
| | performance |
| | of the |
| | Group. |
+----------+-------------------+
| ? | IFRS |
| | 8 Operating |
| | segments |
+----------+-------------------+
| | This |
| | standard |
| | requires |
| | disclosure |
| | of |
| | information |
| | about the |
| | Group's |
| | operating |
| | segments |
| | and |
| | replaces |
| | the |
| | requirement |
| | to |
| | determine |
| | primary |
| | (business) |
| | and |
| | secondary |
| | (geographical) |
| | reporting |
| | segments of |
| | the Group. |
| | Adoption of |
| | this standard |
| | did not have |
| | any effect on |
| | the financial |
| | position or |
| | performance of |
| | the Group. The |
| | Group |
| | determined |
| | that the |
| | operating |
| | segments were |
| | the same as |
| | the business |
| | segments |
| | previously |
| | identified |
| | under IAS 14 |
| | Segmental |
| | Reporting |
| | (Note 4). |
+----------+-------------------+
| ? | IAS1 Revised |
| | presentation |
| | of financial |
| | statements |
+----------+-------------------+
| | The |
| | revised |
| | standard |
| | separates |
| | owner and |
| | non-owner |
| | changes |
| | in |
| | equity. |
| | The |
| | Statement |
| | of |
| | Changes |
| | in Equity |
| | includes |
| | only |
| | details |
| | of |
| | transactions |
| | with owners, |
| | with |
| | non-owner |
| | changes in |
| | equity |
| | presented as |
| | a single |
| | line. In |
| | addition, |
| | the standard |
| | introduces |
| | the |
| | Statement of |
| | Comprehensive |
| | Income: it |
| | presents all |
| | items of |
| | recognised |
| | income and |
| | expense, |
| | either in one |
| | single |
| | statement, or |
| | in two linked |
| | statements. |
| | The Group has |
| | elected to |
| | present two |
| | statements. |
+----------+-------------------+
4 Segment information
For management purposes, the Group is organised into business units based on
their products and services and has one reportable operating segment, which is
the development and commercialisation of Antonov patented technologies.
Therefore, all revenues, assets and liabilities and all other costs relate to
this one business segment for the six months ended 30 June 2009 and 2008 and the
year ended 31 December 2008.
5 Loss per share
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| | Six months | Six months | Year ended |
| | ended | ended | 31 December |
| | 30 June | 30 June | 2008 |
| | 2009 | 2008 | |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| | | | |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| | Unaudited | Unaudited | Audited |
| | GBP'000 | GBP'000 | GBP'000 |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| | | | |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| Basic and diluted loss per | (4p) | (1.5p) | (14.3p) |
| share | | | |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| | | | |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| Numerator | | | |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| Loss for the period | (497) | (962) | (9,782) |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| Loss used in basic EPS and | (497) | (962) | (9,782) |
| diluted EPS | | | |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| | Number of | Number of | Number of |
| | shares | shares | shares |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| Denominator | | | |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| Weighted average number of | 10,735,977 | 64,538,837 | 68,446057 |
| shares used in basic and | | | |
| diluted EPS * | | | |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| | Number of | Number of | Number of |
| | shares | shares | shares |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| Contingently issuable shares | | | |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| Share options | 180,500 | 2,257,313 | 2,055,000 |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| Warrants | 6,256,318 | 10,648,349 | 15,567,103 |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
| Total contingently issuable | 6,436,818 | 12,905,662 | 17,622,103 |
| shares | | | |
+-------------------------------+----------------------------------------------+-----------------------------------------------+-----------------------------------------------+
* Following the Share Capital Consolidation on 8 May 2009 (Note 9)
All the contingently issuable shares have been excluded in the calculation of
the weighted average number of shares for diluted EPS as they are anti-dilutive
for the periods presented.
The ordinary shares issued after 30 June 2009 are detailed below:
+-----------------------------------------------------------+------------------+
| | Number of shares |
+-----------------------------------------------------------+------------------+
| | |
+-----------------------------------------------------------+------------------+
| Issued under the terms of the share finance facility | 755,539 |
| agreements | |
+-----------------------------------------------------------+------------------+
| | 755,539 |
+-----------------------------------------------------------+------------------+
6 Intangible assets
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| | Development | | Software | | Patent and | | Total |
| | costs | | | | trademark | | |
| | | | | | application | | |
| | | | | | costs | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| At 30 June 2008 | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Cost | 5,735 | | 19 | | 3,410 | | 9,164 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Accumulated | - | | (19) | | (2,690) | | (2,709) |
| amortisation | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Net book value | 5,735 | | - | | 720 | | 6,455 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| At 31 December 2008 | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Cost | 6,986 | | 19 | | 1,837 | | 8,842 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Accumulated | (6,986) | | (19) | | (965) | | (7,970) |
| amortisation | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Net book value | - | | - | | 872 | | 872 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| At 30 June 2009 | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Cost | 7,503 | | - | | 1,586 | | 9,089 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Accumulated | (6,024) | | - | | (792) | | (6,816) |
| amortisation | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Net book value | 1,479 | | - | | 794 | | 2,273 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Period ended 30 June | | | | | | | |
| 2008 | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Opening net book value | 3,863 | | - | | 661 | | 4,524 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Additions | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Internally developed | 1,872 | | - | | 240 | | 2,112 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Impaired during the | - | | - | | - | | - |
| period | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Amortisation | - | | - | | (181) | | (181) |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Exchange differences | - | | - | | - | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Closing net book value | 5,735 | | - | | 720 | | 6,455 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Year ended 31 December | | | | | | | |
| 2008 | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Opening net book value | 3,863 | | - | | 661 | | 4,524 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Additions | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Internally developed | 3,123 | | - | | 70 | | 3,193 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Impaired during the | (6,986) | | - | | - | | (6,986) |
| year | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Amortisation | - | | - | | (71) | | (71) |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Exchange differences | - | | - | | 212 | | 212 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Closing net book value | - | | - | | 872 | | 872 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Period ended 30 June | | | | | | | |
| 2009 | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Opening net book value | - | | - | | 872 | | 872 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Additions | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Internally developed | 517 | | - | | 60 | | 577 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Impairment reversal in | 962 | | - | | - | | 962 |
| the period | | | | | | | |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Amortisation | - | | - | | (30) | | (30) |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Exchange differences | - | | - | | (108) | | (108) |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
| Closing net book value | 1,479 | | - | | 794 | | 2,273 |
+-------------------------+--------------------------------------------------------------------------+--+--------------------------------------------------------------------------+--+-----------------------------------------------------------------------------+--+-----------+
At 30 June 2009 the Group had no contractual commitments for development or
other intangible fixed assets (30 December 2008: GBPnil. 30 June 2008: GBPnil).
An impairment review was conducted as at 31 December 2008 in respect of
development costs, which resulted in the decision to fully impair all costs
previously capitalised. Senior management considered the requirements of IAS 38
"Intangible Assets" and concluded that there was insufficient evidence of
probable future economic benefit to justify the carrying value of the
investment. In arriving at this conclusion the Directors considered the delay
experienced in establishing a Joint Venture in China to manufacture the TX6
transmission and the consequent absence of firm production forecasts and sales
commitments. In respect of the 2-speed technology, sales of the Supercharger
product were lower than anticipated.
A further impairment review was carried out by senior management at 30 June
2009, with consideration given to commercial and technical developments taking
place since 31 December 2008. It was determined that in respect of the 2-speed
technology, no significant change had occurred and that the carrying value of
GBP1,489k should remain fully impaired. In respect of the 6-speed automatic
transmission (TX6), the directors determined there is sufficient evidence of
probable future economic benefit to justify reversing the impairment of GBP962k
of development costs incurred in the period August to December 2008. This amount
was included in the GBP5,497k of TX6 costs previously capitalised and fully
impaired at 31 December 2008. This evidence also supports capitalisation of
GBP517k of costs incurred in the six months to 30 June 2009.
In arriving at the decision to partially reverse the impairment of TX6
development costs and to capitalise costs incurred in 2009, the directors
considered the significant commercial progress achieved in the period, including
the signing of an agreement to form a joint venture (JV) with Chong Qing Landai
Industries Co., Ltd on 5 June 2009 for the manufacture of the TX6. The agreement
includes a commitment for the JV to fund the remaining development work required
for the TX6 to reach production, and plans for annual production capacity of a
minimum of 200,000 units. The directors also considered the Cooperation
agreement signed in May with Lifan Industry (Group) Co., Ltd, a Chinese vehicle
manufacturer, to include their Lifan 620 vehicle in the production engineering
programme in return for preferred customer status. In addition to commercial
progress the directors also considered the significant progress achieved toward
finalising a production intent design.
In the six months to 30 June 2009 GBP517k (six months to 30 June 2008 GBP1,872k;
year ended 31 December 2008 GBP3,123k) of development costs have been
capitalised.
7 Subsidiaries
The principal subsidiaries of Antonov Plc, all of which have been included in
these consolidated financial statements, are as follows:
+----------------+------------------------------------------------+-----------------------------------------+----------------------------------------------+--------------------------------------------+------------------------------------------------+
| Name | Country of | Ownership | Nature of | Parent | Status |
| | incorporation | interest | business | | |
| | and operation | | | | |
+----------------+------------------------------------------------+-----------------------------------------+----------------------------------------------+--------------------------------------------+------------------------------------------------+
| Antonov | The | 100% | Licensing | Antonov | Non-trading |
| Automotive | Netherlands | | | Plc | |
| Technologies | | | | | |
| BV (AAT) | | | | | |
+----------------+------------------------------------------------+-----------------------------------------+----------------------------------------------+--------------------------------------------+------------------------------------------------+
| Antonov | United Kingdom | 100% | Design, | Antonov | Trading |
| Automotive | | | research & | Plc | |
| Technologies | | | development, | | |
| Ltd | | | sales & | | |
| | | | marketing | | |
+----------------+------------------------------------------------+-----------------------------------------+----------------------------------------------+--------------------------------------------+------------------------------------------------+
| Antonov | The Netherlands | 100% | Licensing | AAT | Liquidated on 8 |
| Automotive | | | | | April 2009 |
| Europe BV | | | | | |
+----------------+------------------------------------------------+-----------------------------------------+----------------------------------------------+--------------------------------------------+------------------------------------------------+
| Antonov | The Netherlands | 100% | Licensing | AAT | Liquidated on 8 |
| Automotive Far | | | | | April 2009 |
| East BV | | | | | |
+----------------+------------------------------------------------+-----------------------------------------+----------------------------------------------+--------------------------------------------+------------------------------------------------+
| Antonov | The Netherlands | 100% | Licensing | AAT | Liquidated on 8 |
| Automotive | | | | | April 2009 |
| North America | | | | | |
| BV | | | | | |
+----------------+------------------------------------------------+-----------------------------------------+----------------------------------------------+--------------------------------------------+------------------------------------------------+
| Antonov | France | 100% | Research & | AAT | Liquidated on 4 |
| Automotive | | | Development | | March 2008 |
| Technologies | | | | | |
| SARL | | | | | |
+----------------+------------------------------------------------+-----------------------------------------+----------------------------------------------+--------------------------------------------+------------------------------------------------+
| Antonov | China | 100% | Sales & | Antonov | Trading |
| Automotive | | | Marketing | Plc | |
| Technologies | | | | | |
| (Chong Qing) | | | | | |
| Limited | | | | | |
+----------------+------------------------------------------------+-----------------------------------------+----------------------------------------------+--------------------------------------------+------------------------------------------------+
8 Financial assets and liabilities - Numerical information
Maturity of financial liabilities
The carrying amounts of financial liabilities, covering trade and other
payables, all of which are exposed to cash flow or fair value interest rate
risk, are repayable as follows:
+---------------------------+-----------------------------------+-----------------------------------+-----------------------------------+
| | 30 June | 30 June | 31 December |
| | 2009 | 2008 | 2008 |
| | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+-----------------------------------+-----------------------------------+-----------------------------------+
| Within one year | 1,181 | 2,596 | 1,650 |
+---------------------------+-----------------------------------+-----------------------------------+-----------------------------------+
| | 1,181 | 2,596 | 1,650 |
+---------------------------+-----------------------------------+-----------------------------------+-----------------------------------+
These financial liabilities have a maturity date of less than 90 days.
Borrowing facilities
The Group has undrawn committed borrowing facilities of EUR15 million available at
30 June 2009 (30 June 2008: GBPNil, 31 December 2008: GBPNil).
Interest rate risk
The Group had no loans or other borrowings during the year.
Fair values
The book value and fair value of financial assets and liabilities are as
follows:
+------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+
| | Book | Fair | Book | Fair | Book | Fair |
| | value | value | value | value | value | value |
+------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+
| | 30 | 30 | 31 |
| | June | June | December |
| | 2009 | 2008 | 2008 |
+------------------------+-----------------------------------------------------------+-----------------------------------------------------------+-----------------------------------------------------------+
| | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 | GBP000 |
+------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+
| Cash | 123 | 123 | 126 | 126 | 500 | 500 |
+------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+
| Trade debtors | 248 | 248 | 536 | 536 | 103 | 103 |
+------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+
| Trade and other | 1,181 | 1,181 | 2,596 | 2,596 | 1,650 | 1,650 |
| payables | | | | | | |
+------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+
To the extent that financial assets are not carried at fair value in the
consolidated balance sheet, book value approximates to fair value at 30 June
2009 and 2008 and at 31 December 2008.
9 Share capital
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| | Authorised |
+--------------------------+------------------------------------------------------------------------------------------------------------------------------------------+
| | 30 June 2009 | 30 June 2008 | 31 December 2008 |
+--------------------------+--------------------------+----------------------+----------------------------------------------------------------------------------------+
| | Number | GBP'000 | Number |GBP'000 | Number | GBP'000 |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Ordinary shares of 10p | 80,000,000 | 8,000 | - | - | - | - |
| each | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Ordinary shares of 20p | | | 90,000,000 | 18,000 | 90,000,000 | 18,000 |
| each | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Deferred shares of 19p | 92,142,402 | 88,000 | - | - | - | - |
| each | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| | Issued and fully paid |
+--------------------------+------------------------------------------------------------------------------------------------------------------------------------------+
| | 30 June 2009 | 30 June 2008 | 31 December 2008 |
+--------------------------+--------------------------+----------------------+----------------------------------------------------------------------------------------+
| | Number | GBP'000 | Number | GBP'000 | Number | GBP'000 |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Ordinary shares of 10p | | | | | | |
| each | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| At beginning of period | - | - | - | - | - | - |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Consolidation of 1p | 11,763,009 | 1,176 | - | - | - | - |
| shares into 10p shares | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Issue of shares | 1,291,132 | 129 | - | - | - | - |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| At end of period | 13,054,141 | 1,305 | - | - | - | - |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Deferred shares of 19p | | | | | | |
| each | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| At beginning of period | - | - | - | - | - | - |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Issue of shares | 88,076,193 | 16,734 | - | - | - | - |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| At end of period | 88,076,193 | 16,734 | - | - | - | - |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Ordinary shares of 1p | | | | | | |
| each | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| At beginning of period | - | - | - | - | - | - |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Reorganisation of 20p | 88,076,193 | 881 | - | - | - | - |
| shares into 1p Ordinary | | | | | | |
| Shares and 19p Deferred | | | | | | |
| Shares | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Issue of shares | 29,553,897 | 296 | - | - | - | - |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Consolidation of 1p | (117,630,090) | (1,176) | - | - | - | - |
| shares into 10p shares | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| At end of period | - | - | - | - | - | - |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Ordinary shares of 20p | | | | | | |
| each | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| At beginning of period | 87,123,812 | 10,586 | 52,931,152 | 10,586 | 52,931,152 | 8,728 |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Issue of shares | 952,381 | 190 | 14,668,056 | 2,934 | 33,351,020 | 6,671 |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Exercise of warrants | - | - | 841,640 | 168 | 841,640 | 168 |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| Reorganisation of 20p | (88,076,193) | (10,776) | | | | |
| shares into 1p Ordinary | | | | | | |
| Shares and 19p Deferred | | | | | | |
| Shares | | | | | | |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
| At end of period | - | - | 68,440,848 | 13,688 | 87,123,812 | 17,425 |
+--------------------------+---------------+----------+------------+---------+-------------------------------------------+--------------------------------------------+
In the six months ended 30 June 2009 a total of 4,341,760 shares were issued (on
a post-1:10 consolidation basis), of which 3,226,144 were issued in connection
with cash received under the share financing agreements, resulting in total
proceeds of EUR2.23m.
The Group entered into a new share financing facility with Quivest BV
("Quivest") on 18 February 2009, the terms of which require the parent Company
to issue shares and unlisted warrants in return for funds received. Under the
terms of the Equity Facility, the Group is able to draw down funds to a maximum
of EUR600k per month. In return, new ordinary shares of 1 pence each are issued at
an effective price of 93.4% of the average closing price on Euronext over the
five days preceding the draw down. A commission is also payable in new ordinary
shares, equal to 8 per cent of the value of each individual draw down. Quivest
also receive unlisted warrants on each draw down to subscribe for additional
shares (being 40 per cent. of those received under the draw down) at a 15 per
cent premium to the then market price. Quivest are a substantial shareholder of
the Group and are therefore classed as a related party.
Capital Reorganisation
On 16 February 2009 the shareholders approved the sub-division of existing
Ordinary Shares of 20 pence each into one New Ordinary Share of 1 pence each and
one Deferred Share of 19 pence each. The New Ordinary Shares have attached to
them the same rights (including as to voting, dividends and on a return of
capital) as the Ordinary Shares. The remaining authorised but unissued Ordinary
Shares of 20 pence each were subdivided into twenty authorised but unissued New
Ordinary Shares of one pence each.
The Deferred Shares are effectively valueless as they carry no rights to vote or
dividend rights. In addition, holders of Deferred Shares will only be entitled
to a return of capital or on a winding up of the Company after each of the
holders of New Ordinary Shares has received a payment of GBP 1,000,000 each on
each such share. The Deferred Shares are not listed on AIM or Euronext Amsterdam
and are not transferable without prior written consent of the Directors of the
Company.
The issued and fully paid share capital immediately before and following the
reorganisation on 16 February 2009 is as follows:
+----------------------------------------------------+----+--------------+-----------+
| | | Issued and fully paid |
+----------------------------------------------------+----+--------------------------+
| | | Number | GBP'000 |
+----------------------------------------------------+----+--------------+-----------+
| Prior to reorganisation 16 February 2009: | | | |
+----------------------------------------------------+----+--------------+-----------+
| Ordinary shares of 20p each | | 88,076,193 | 17,615 |
+----------------------------------------------------+----+--------------+-----------+
| | | 88,076,193 | 17,615 |
+----------------------------------------------------+----+--------------+-----------+
| Following | | | |
| reorganisation | | | |
| 16 February | | | |
| 2009: | | | |
+----------------------------------------------------+----+--------------+-----------+
| New Ordinary Shares of 1p each | | 88,076,193 | 881 |
+----------------------------------------------------+----+--------------+-----------+
| Deferred Shares of 19p each | | 88,076,193 | 16,734 |
+----------------------------------------------------+----+--------------+-----------+
| | | 176,152,386 | 17,615 |
+----------------------------------------------------+----+--------------+-----------+
At the Annual General Meeting (AGM) held on 6 May 2009 the shareholders approved
an increase in the authorised share capital of the Company from GBP20,326,103.99
to GBP25,507,056.38 by the creation of 518,095,239 new Ordinary Shares of 1
pence each. At the same meeting shareholders also approved the consolidation of
all the 800,000,000 issued and authorised but unissued Ordinary Shares of 1
pence each on the basis of one Ordinary Share for every ten issued and
authorised but unissued Ordinary Shares of 1 pence each. The consolidation was
effective 8 May 2009.
The issued and fully paid share capital immediately before and following the
reorganisation on 8 May 2009 is as follows:
+----------------------------------------------------+----+--------------+-----------+
| | | Issued and fully paid |
+----------------------------------------------------+----+--------------------------+
| | | Number | GBP'000 |
+----------------------------------------------------+----+--------------+-----------+
| Prior to consolidation 8 May 2009: | | | |
+----------------------------------------------------+----+--------------+-----------+
| Ordinary shares of 1p each | | 117,630,090 | 1,176 |
+----------------------------------------------------+----+--------------+-----------+
| Deferred Shares of 19p each | | 88,076,193 | 16,734 |
+----------------------------------------------------+----+--------------+-----------+
| | | 205,706,283 | 17,910 |
+----------------------------------------------------+----+--------------+-----------+
| Following consolidation 8 May 2009: | | | |
+----------------------------------------------------+----+--------------+-----------+
| New Ordinary Shares of 10p each | | 11,763,009 | 1,176 |
+----------------------------------------------------+----+--------------+-----------+
| Deferred Shares of 19p each | | 88,076,193 | 16,734 |
+----------------------------------------------------+----+--------------+-----------+
| | | 99,839,202 | 17,910 |
+----------------------------------------------------+----+--------------+-----------+
10 Related party transactions
Trading transactions
During the six months to 30 June 2009, Group companies entered into no
transactions with related parties who are not members of the Group (30 June 2008
GBPnil, 31 December 2008 GBPnil).
The Group is dependent upon its significant shareholder for funding. The funds
provided by this shareholder were as follows:
+----------------------------------+-------------+--------------+---------------+
| | Six months | Six months | Year ended |
| | ended 30 | ended 30 | 31 December |
| | June 2009 | June 2008 | 2008 |
+----------------------------------+-------------+--------------+---------------+
| Shareholder | GBP'000 | GBP'000 | GBP'000 |
| | Unaudited | Unaudited | Audited |
+----------------------------------+-------------+--------------+---------------+
| Quivest BV | 2,230 | 2,500 | 5,323 |
+----------------------------------+-------------+--------------+---------------+
11 Post balance sheet events
There are no events occurring subsequent to 30 June 2009 which require
disclosure.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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