Innobox Plc (the "Company" or the "Group")
Preliminary results announcement for the year ended 30 April 2007
Chairman's Statement
I report the Group's results for the year ended 30 April 2007. The trading
loss for the year, before impairment and amounts written off investments, was �
359,227 (2006: �648,285). This year we have not needed to make any impairment
provisions against the carrying values of the fixed assets in each of our
subsidiaries, having already made provisions of �500,000 in the previous year.
The loss for the year after taxation and minority interests is therefore the
same at �359,227 (2006: loss of �1,214,757), which represents a weighted
average loss per share of 0.98p (2006: loss per share of 5.04p).
At the start of the year the Company operated three trading pub and hotel
sites: The Moss Cottage in Ripley, Derbyshire; The Three Tuns in Pettistree,
near Ipswich; and The Royal Oak in Leominster, Herefordshire. In addition a
development site was owned which was located at Fishmore Hall, Ludlow. As I
reported last year the Company has continued to experience extremely tough
trading conditions in common with much of the licensed trade sector, and the
directors believe that these market conditions will not improve in the short
term.
As previously announced the Group successfully completed the disposal of the
freehold investment property at Fishmore Hall, Ludlow in April 2007, which was
owned by the subsidiary I F Hotels Limited. The freehold property was sold at
the asking price of �675,000, but the monies recognised from the sale, after
having repaid the bank mortgage and overdraft, were insufficient to enable all
of the creditors of I F Hotels Limited to be paid in full. Therefore the
Directors consulted with insolvency practitioners to ascertain the most
favourable course of action that would result in a maximum return to
creditors. The subsidiary I F Hotels Limited then proposed entering into a
Company Voluntary Arrangement, which was agreed and approved by members and
creditors on 13 July 2007.
Also during the year the Company converted The Three Tuns pub from a managed
house to a tenancy under a three year agreement to private tenants. The
tenancy agreement provides for an annual rental income of �34,800. At the time
of entering into the tenancy agreement the Board successfully negotiated with
the bank for a capital repayment holiday in respect of the mortgage on this
site.
The Board recognised the need for the Company to be able to raise finance and
the decision to reorganise the share capital was made and subsequently approved
at an EGM held on 9 October 2006. Whilst the Directors have the authority to
raise finance, we have been reviewing the strategy of focusing on the licensed
trade sector and have made a decision to try and exit this sector at the
earliest opportunity. The Directors are currently reviewing the options for
this exit strategy and further announcements will be made in due course.
Finally, I would like to take this opportunity to thank my colleagues and our
employees for their hard work during this year and under continued difficult
trading conditions.
AS Baker
Non-executive Chairman
30 October 2007
Consolidated Profit and Loss Account for the year ended 30 April 2007
Note Year ended Year ended
30 April 30 April
2007 2006
� �
Turnover 701,352 939,936
Cost of sales (487,697) (739,035)
----------- -----------
Gross profit 213,655 200,901
Administrative expenses - continuing (623,132) (697,748)
Administrative expenses - exceptional 190,897 (500,000)
----------- -----------
Total administrative expenses (432,235) (1,197,748)
----------- -----------
Operating loss (218,580) (996,847)
Loss on sale of investments - (16,929)
Profit on disposal of tangible fixed assets 1,116 -
----------- -----------
Loss before interest and taxation (217,464) (1,013,776)
Interest receivable 94 4,079
Interest payable (141,857) (138,588)
----------- -----------
Loss on ordinary activities before taxation (359,227) (1,148,285)
Taxation - -
----------- -----------
Loss for the year (359,227) (1,148,285)
Equity minority interests - (66,472)
----------- -----------
Retained loss for the year (359,227) (1,214,757)
----------- -----------
Basic loss per share (pence) 4 (0.98)p (5.04)p
----------- -----------
The Group has no recognised gains or losses other than the (loss)/profit for
the year.
Consolidated Balance Sheet as at 30 April 2007
Note As at As at
30 April 30 April
2007 2006
� �
Fixed assets
Tangible fixed assets 1,945,298 2,005,858
Current assets
Stocks 10,598 23,378
Debtors 97,142 85,687
Investments - 627,260
Cash at bank and in hand 172,672 31,317
----------- -----------
280,412 767,642
----------- -----------
Creditors:
Amounts falling due within one year (1,165,467) (1,875,936)
----------- -----------
Net current liabilities (885,055) (1,108,294)
----------- -----------
Total assets less current liabilities 1,060,243 897,564
Creditors:
Amounts falling due after more than one (1,353,076) (831,170)
year
----------- -----------
Net (liabilities)/assets (292,833) 66,394
----------- -----------
Capital and reserves
Called up share capital 730,000 730,000
Share premium 1,062,364 1,062,364
Profit and loss account (2,085,197) (1,725,970)
----------- -----------
Shareholders' funds 5 (292,833) 66,394
Minority interest - -
----------- -----------
Total capital employed (292,833) 66,394
----------- ------------
Consolidated Cash Flow Statement for the year ended 30 April 2007
Note Year Year
ended ended
30 April 30 April
2007 2006
� �
Net cash inflow from operating activities 6 41,460 212,542
Return on investments and servicing of
finance
Interest received 94 4,079
Interest paid (139,915) (134,987)
Interest element of finance lease rentals (1,942) (3,601)
----------- -----------
(141,763) (134,509)
Capital expenditure and financial investment
Payments to acquire fixed assets (55,172) (394,987)
Proceeds from disposal of investments 628,376 253,471
----------- -----------
Net cash inflow/(outflow) from capital 573,204 (141,516)
expenditure and financial investment
----------- -----------
Net cash inflow/(outflow) before financing 472,901 (63,483)
Financing
Issue of ordinary shares for cash - 292,000
Repayment of bank loans in full (352,625) -
Issue of minority interest shares for cash - 1,000
Repurchase of minority shares for cash - (2,255)
Part disposal of minority interests - 24,445
Increase in bank loans 22,500 -
New finance leases and hire purchase contracts 11,719 -
Capital element of bank loan repayments (16,309) (271,563)
Capital element of finance lease rentals (9,542) (9,183)
----------- -----------
Increase/(decrease) in cash for the year 7 128,644 (29,039)
----------- ------------
Notes to the Preliminary Results for the year ended 30 April 2006
1 Accounting policies
The financial statements have been prepared in accordance with applicable
accounting standards and under the historical cost convention.
At 30 April 2007 the Group*s balance sheet reflects a net current
liability position. The Group meets its day to day working capital
requirements through overdraft facilities which are repayable on demand.
The Directors have prepared cash flow forecasts for the period following
the year end to 31 October 2008. The nature of the Group*s business
is such that there can be significant unpredictable variances in cash flows.
However the Directors confirm that the Company is prepared to provide
the necessary financial support to meet any shortfall in the Group*s
cash position that may occur, without any legal obligation to do so.
The Directors believe that the Company will have the necessary resources
to meet this commitment by raising funds by way of an equity fundraising
in order to meet any shortfall in the Group*s cash position that may occur
in the period to 31 October 2008 and by the contribution due from the CVA
dividend of �55,297.64 which was received on 25 October 2007 following the
sale of one of the Group*s freehold properties. The success of the equity
fundraising is subject to significant uncertainty. Should it be delayed there
will be significant doubt as to the ability of the Group to continue as a
going concern which may result in the Group being unable to realise its
assets and discharge its liabilities in the normal course of business.
On the basis of the cash flow information, which is dependent on the success
of the equity fundraising, the Directors have formed a judgement that it
is appropriate to prepare the financial statements on the going concern basis.
2 Publication of non-statutory accounts
The financial information set out in this preliminary announcement
does not constitute statutory accounts as defined in Section 240 of
the Companies Act 1985. The summarised consolidated balance sheet at
30 April 2007 and the summarised consolidated profit and loss
account, summarised consolidated cashflow statement and associated
notes for the year then ended have been extracted from the Group's
2007 statutory financial statements upon which the auditors opinion
is unqualified and does not contain any statement under section 237
of the Companies Act 1985.
3 Dividends
No dividend is proposed for the year ended 30 April 2007.
4 Loss per share
The calculation of the basic loss per share is based on the loss on
ordinary activities after tax and minority interests and on the
weighted average number of shares in issue during the period. The
impact of share options is anti dilutive. The loss and weighted
average number of shares used in the calculations are set out below:
Weighted
average Loss Per
Loss number of share
� shares (pence)
Basic loss per share:
Year ended 30 April 2007 (359,227) 36,500,000 (0.98)
Year ended 30 April 2006 (1,214,757) 24,089,041 (5.04)
------------ ------------ ------------
5 Reconciliation of movements in equity
shareholders' funds
Year Year
ended ended
30 April 30 April
2007 2006
� �
Loss for the year (359,227) (1,214,757)
Share subscription - 300,000
Share subscription costs - (8,000)
------------ ------------
Net reduction in shareholders' funds (359,227) (922,757)
Shareholders' funds brought forward 66,394 989,151
------------ ------------
Shareholders' funds at the end of the (292,833) 66,394
period
------------ ------------
6 Reconciliation of operating loss with net
cash flow from operating activities
Year Year
ended ended
30 April 30 April
2007 2006
� �
Operating loss (218,580) (996,847)
Depreciation, amortisation and impairment 115,732 621,750
Decrease in stocks 12,780 1,819
(Increase)/decrease in debtors (11,455) 497,939
Increase in creditors 142,983 87,881
------------ ------------
Net cash inflow from operating activities 41,460 212,542
------------ ------------
7 Reconciliation of net cash flow to
movement in net funds
Year Year
ended ended
30 April 30 April
2007 2006
� �
Increase/(decrease) in cash for the year 128,644 (29,039)
Repayments made on bank loans during the
year
368,934 271,563
Increase in bank loans (22,500) -
New finance leases and hire purchase
contracts
(11,719) -
Repayment of finance lease and hire 9,542 9,183
purchase liabilities
------------ ------------
Movement in net borrowings for the year 472,901 251,707
(note 8)
Net borrowings at the beginning of the (2,042,556) (2,294,263)
year
------------ ------------
Net borrowings at the end of the year (1,569,655) (2,042,556)
------------ ------------
8 Analysis of changes
in net funds
As at Other As at
1 May Cash Flow Changes 30 April
2006 2007
(audited) (audited)
� � � �
Cash at bank and in 31,317 141,355 - 172,672
hand
Bank overdraft (189,118) (12,711) - (201,829)
------------
128,644
Bank loans (1,771,862) 346,434 - (1,425,428)
Loan notes (98,000) - - (98,000)
Finance leases and
hire purchase
contracts (14,893) 9,542 (11,719) (17,070)
------------ ------------ ------------ ------------
(2,042,556) 484,620 (11,719) (1,569,655)
------------ ------------ ------------ ------------
9 Availability of Annual Report
The Annual Report will be posted to shareholders shortly and copies
will be available from the registered office of the Company, Meriden
House, 6 Great Cornbow, Halesowen, West Midlands B63 3AB. The Annual
Report is also available from today as a download from the Company's
website at www.innobox.co.uk.
10 Annual General Meeting
The Annual General Meeting of the Company will be held at Meriden
House, 6 Great Cornbow, Halesowen, West Midlands, B63 3AB at 9.00am
on Monday 3rd December 2007
Enquiries:
Russell Stevens 07860 562621
Chief Executive, Innobox Plc russell@innobox.co.uk
Tim Feather / Matthew Johnston 0113 246 2610
Hanson Westhouse Limited
END
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