Interim Results
THE CORE BUSINESS PLC ("TCB" or the "Company")
Preliminary Results for the half year to 30 November 2006
HIGHLIGHTS
* Continued expansion of our consultancy client portfolio of blue chip
retailers
* Strong flow of new projects from expanding network of contacts
* Exciting opportunities for our distribution business
CHAIRMAN'S STATEMENT
The six months to 30 November 2006 has been another period of positive
development for The Core Business.
One strategic objective upon flotation was to review and secure a licensing
agreement to develop personal care brands. A key target was Ministry of Sound
and although this was signed in late June it was unexpectedly terminated three
months later. Despite this disappointment we are reviewing other licensing
deals for the longer term and are now completely refocused on building the
consultancy side of our business and on distributing brands.
We have tendered for projects with blue chip retailers and have many other
consultancy proposals in place. We are also close to securing a distribution
agreement with a brand that we have presented to a major retail chain. This has
been enthusiastically received and our expectation is that this will launch in
April 2007.
We are also reviewing many other distribution opportunities but will focus our
efforts on one or two brands where sales volume can be achieved at speed.
The Company has learnt much since flotation and we are fully committed to our
objective of building a total beauty management group through the three-pronged
strategy of consultancy, distributing brands and finally building a portfolio
of licensed, wholly owned or part owned personal care brands. We also have in
place an acquisition strategy and are making significant progress in this
direction.
FINANCIAL OVERVIEW
Turnover for the 6 months to 30 November 2006 was £77,848 (6 months to 30
November 2005: £65,530) and the loss for the half year was £178,659 (6 months
to 30 November 2005: £17,059 profit) equivalent to 0.43 pence loss per share (6
months to 30 November 2005: 0.17 pence profit per share).
SUMMARY
Since the Company floated on AIM it has worked hard towards achieving its
strategic goals. The next couple of years should see a major uplift in our
business and we are excited at the massive potential leading into the next
trading year. I would like to thank our Board, management team and staff who
are working extremely hard to fulfil our business goals.
Mark Watson Mitchell
Chairman
BALANCE SHEET
HALF YEAR ENDED 30 NOVEMBER 2006
As at As at As at
30/11/06 30/11/05 31/5/06
£ £ £
Assets
Non-current assets
Property, plant and equipment 1,325 1,010 740
Financial assets 20,578 12,292 10,578
Investment in associate company - - -
______ ______ ______
21,903 13,302 11,318
Current Assets
Trade receivables 17,537 18,193 19,156
Other current assets 32,688 2,497 26,815
Cash and cash equivalents 273,210 15,263 401,085
_______ ______ _______
323,435 35,953 447,056
Total assets 345,338 49,255 458,374
Equity and liabilities
Equity attributable to the Company's equity holders
Share capital 211,982 100 201,383
Share premium 411,913 - 337,719
Retained earnings (310,904) 10,283 (132,245)
_______ ______ _______
312,991 10,383 406,857
Current liabilities
Trade and other payables 32,347 18,116 51,517
Current tax payable - 20,756 -
______ ______ ______
Total liabilities 32,347 38,872 51,517
Total equity and liabilities 345,338 49,255 458,374
PROFIT AND LOSS ACCOUNT
HALF YEAR TO 30 NOVEMBER 2006
6 months 6 months Year
ended ended ended
30/11/06 30/11/05 31/5/06
£ £ £
Turnover
Consultancy fees 77,848 68,530 122,157
Overhead costs:
Administration costs 144,828 36,346 195,540
Staff costs 119,139 10,854 60,680
Depreciation 442 271 541
_______ ______ _______
(Loss)/profit from operations (186,561) 21,059 (134,604)
Interest income 7,902 - 2,964
Impairment of investment in associate company - - (1,714)
_______ ______ _______
(Loss)/profit before tax (178,659) 21,059 (133,354)
Income tax expense - (4,000) 12,190
_______ ______ _______
(Loss)/profit for the year (178,659) 17,059 (121,164)
(Loss) / Earnings per share
Basic (0.43pence) 0.17pence (0.66pence)
Diluted (0.43pence) 0.17pence (0.66pence)
CASH FLOW STATEMENT
HALF YEAR TO 30 NOVEMBER 2006
Notes 6 months 6 months Year
ended ended ended
30/11/06 30/11/05 31/5/06
£ £ £
Cash flows from operating activities:
Cash generated from operating activities 3 (209,543) 27,313 (102,777)
Interest paid - - -
Tax paid - - (16,749)
_______ ______ _______
(209,543) 27,313 (119,526)
Cash flows from investing activities:
Purchases of property, plant and equipment (1,027) (595) (595)
Investment in associate company - - -
Investment in financial asset (10,000) (10,578) (10,578)
Interest received 7,902 - 2,964
_____ ______ _____
Net cash (used in) investing activities (3,125) (11,173) (8,209)
Cash flows from financing activities:
Net proceeds on issues of shares 84,793 - 539,002
Dividends paid - (12,000) (21,305)
______ ______ _______
Net cash (used in)/from financing activities 84,793 (12,000) 517,697
Net increase/(decrease) in cash and (127,875) 4,140 389,962
cash equivalents
Cash and cash equivalents at beginning of year 401,085 11,123 11,123
_______ ______ _______
Cash and cash equivalents at end of year 273,210 15,263 401,085
Bank balances and cash 273,210 15,263 401,085
NOTESTO THE ACCOUNTS
1. Accounting policies
The principal accounting policies are as set out in the May 2006 annual report.
The financial statements of The Core Business PLC have been prepared in
accordance with International Financial Reporting Standards (IFRS), IFRIC
interpretations endorsed by the European Union and with those parts of the
Companies Act 1985 applicable to companies reporting under IFRS. These
financial statements have been prepared under the historic cost convention.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates and assumptions that affect
the reported amounts of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Although these estimates are based on management's best
knowledge of the amount, event or actions, actual results ultimately may differ
from those estimates.
Earnings per share
6 months 6 months Year
ended ended ended
30/11/06 30/11/05 30/5/06
£ £ £
Earnings for the purpose of basic earnings (178,659) 17,059 (121,164)
per share (net profit for the year)
Earnings for the purpose of diluted (178,659) 17,059 (121,164)
earnings per share
Number of shares 6 months 6 months Year
ended ended ended
30/11/06 30/11/05 31/5/06
No. No. No.
Weighted average number of ordinary shares:
- for the purposes of basic earnings per 41,736,175 10,000,000 18,392,429
share
- for the purposes of diluted earnings per 41,736,175 10,000,000 18,392,429
share
The dilutive effect of share warrants issued during the year has been
disregarded as the average market value of ordinary shares during the year did
not exceed the exercise price of the warrants issued.
Share capital
6 months 6 months Year
ended ended ended
30/11/06 30/11/05 31/5/06
No. No. No.
Authorised:
Ordinary shares of £0.005 each (30/11/05: 200,000,000 100,000,000 200,000,000
£0.01 each)
Issued and fully paid:
Reported as at 1 June 40,276,625 100 10,000,000
Issue of shares 2,119,822 9,900 30,276,625
__________ ______ __________
Reported as at end of period 42,396,447 10,000 40,276,625
6 months 6 months Year
ended ended ended
30/11/06 30/11/05 31/5/06
£ £ £
Authorised:
Ordinary shares of £0.005 each 1,000,000 1,000,000 1,000,000
Issued and fully paid:
Reported as at 1 June 201,383 100 100
Issue of shares 10,599 - 201,283
_______ ___ _______
Reported as at end of period 211,982 100 201,383
On 16 November 2005, each of the issued and unissued ordinary shares in the
Company of £1 each were subdivided into 100 ordinary shares of £0.01 each, all
such shares ranking pari passu in all respects.
On 10 February 2006, the Company issued 4,000 new ordinary shares of nominal
value £0.01 each.
On the same date:
* each of the issued and unissued ordinary shares of 1 penny each were
subdivided in to 1,000 ordinary shares of 0.001 pence each, all such shares
ranking pari passu in all respects.
* the Company issued 10,800,000 new ordinary shares of nominal value 0.001
pence each at an issue price of 1 penny each.
* the Company issued 5,200,000 new ordinary shares of nominal value 0.001
pence each at an issue price of 2.5 pence each.
* the Company issued 499 bonus shares for each ordinary share held in the
Company.
* The ordinary shares of the Company were consolidated whereby for every 500
ordinary shares of nominal value 0.001 pence held, one share at nominal
value 0.5 pence was issued.
On 8 March 2006, the Company raised £411,065 before expenses of £176,475
through the placing of 10,276,625 new ordinary shares of nominal value 0.5
pence each at a placing price of 4 pence each with institutional and other
investors. This represented 26% of the enlarged issued share capital of the
Company.
On 25 July 2006, the Company raised £84,793 through the issue of 2,119,882 new
ordinary shares of nominal value 0.5 pence each at a placing price of 4 pence
each with one investor. This represented 5% of the enlarged issued share
capital of the Company.
At 30 November 2006 warrants over 6,500,000 ordinary shares were outstanding.
Date of At Granted Exercised Forfeits At Exercise/ Exercise/Vesting
grant 1 June /vested 31 May Share price date
2005 2006 From To
Warrants
8.03.06 - 6,500,000 - - 6,500,000 6.0p 8.03.06 08.03.11
2. Status of financial information
The interim results for the 6 months ended 30 November 2006 and the 6 months
ended 30 November 2005 are unaudited and do not constitute statutory accounts
within the meaning of section 240 Companies Act 1985. The figures for the year
ended 31 May 2006 have been extracted from the audited annual accounts.
3. Note to the cash flow statement
6 months 6 months Year
ended ended ended
30/11/06 30/11/05 31/5/06
£ £ £
(Loss) / Profit for the year (178,659) 17,059 (121,164)
Adjustments for:
- Taxation - 4,000 (12,190)
- Finance credits (7,902) - (2,964)
- Depreciation 442 271 541
Changes in working capital:
- Charge for market value of warrants - - 5,000
issued during the year
- (Increase)/decrease in trade and other (4,254) 1,959 (11,139)
receivables
- Decrease in financial assets - - 1,714
- Increase/(decrease) in trade and other (19,170) 4,024 37,425
payables
_______ ______ _______
Cash generated from / (used in) operations (209,543) 27,313 (102,777)