Final Results
Readybuy PLC
14 July 2006
READYBUY PLC
PRELIMINARY ANNOUNCEMENT OF RESULTS
YEAR ENDED 30 APRIL 2006
CHAIRMAN'S STATEMENT
The results for the year show a pre tax loss of £107,000 on minimal turnover of
£4,000. During the year the manufacturing operations of the Group operating
subsidiary Oriental Fine Foods Limited ceased and costs were incurred in closing
the factory. This included a payment of £30,000 to Paul Bennett the former Chief
Executive as compensation for loss of office.
Since the cessation of trading the board has reviewed a number of options for
the group and this culminated in a placing to raise £262,500, less issue costs
of £12,500. At the same time the group announced that a consortium led by Chris
Potts intended to look for suitable acquisitions for the group and that further
funding should be made available at the appropriate time.
I am pleased to report that Readybuy plc has today announced the acquisition of
Avacta Limited.
Daron Lee
Chairman
14 July 2006
CONSOLIDATED PROFIT & LOSS ACCOUNT
YEAR ENDED 30 APRIL 2006
Note
2006 2005
£'000 £'000
Turnover 2 4 313
Cost of sales 1 (224)
______ ______
Gross profit 5 89
Distribution costs (1) (20)
Administrative expenses (137) (321)
______ ______
Operating loss 3 (133) (252)
Provision for loss on discontinued operations 5 25 (804)
______ ______
Loss before interest and taxation (108) (1,056)
Interest receivable 6 1 2
Interest payable 7 - (4)
______ ______
Loss on ordinary activities before taxation (107) (1,058)
Taxation 8 - 45
______ ______
Loss for the financial year 9 (107) (1,103)
______ ______
Earnings per share 10 (0.6p) (6.1p)
______ ______
Dividends per share - -
______ ______
The Group's trading activities were terminated in July 2005, therefore all the
above activities are classified as discontinued.
The Group has no recognised gains or losses other than the results for the
period as set out above.
CONSOLIDATED & COMPANY BALANCE SHEETS
30 APRIL 2006
Group Group Company Company
2006 2005 2006 2005
Note £'000 £'000 £'000 £'000
Fixed assets
Intangible assets 11 - - - -
Investment 12 - - - -
______ ______ ______ ______
- - - -
______ ______ ______ ______
Current assets
Stocks 13 - 2 - -
Debtors 14 1 44 - 4
Cash at bank and in hand 32 169 32 162
______ ______ ______ ______
33 215 32 166
Creditors: amounts falling due 15 (19) (194) (16) (110)
within one year
______ ______ ______ ______
Net current assets 14 21 16 56
______ ______ ______ ______
Total assets less current 14 21 16 56
liabilities
______ ______ ______ ______
Capital and reserves
Called up share capital 16 96 93 96 93
Share premium account 17 1,426 1,329 1,426 1,329
Profit and loss account 17 (1,508) (1,401) (1,506) (1,366)
______ ______ ______ ______
Equity shareholders' funds 18 14 21 16 56
______ ______ ______ ______
CONSOLIDATED CASHFLOW STATEMENT
YEAR ENDED 30 APRIL 2006
2006 2005
Note £'000 £'000
Net cash outflow from operating activities 19 (139) (80)
_____ _____
Returns on investments and servicing of finance
Interest paid - (2)
Interest element of finance lease payments - (2)
Interest received 1 2
_____ _____
Net cash inflow/(outflow) from servicing of finance 1 (2)
_____ _____
Capital expenditure and financial investment
Purchase of tangible fixed assets - (9)
Sale of tangible fixed assets 25 1
_____ _____
Net cash inflow/(outflow) from capital expenditure and
financial investment 25 (8)
_____ _____
Net cash outflow before use of liquid resources and financing (113) (90)
_____ _____
Financing
Proceeds on issue of shares - 90
Capital element of finance lease payments (25) (34)
_____ _____
Net cash inflow from financing (25) 56
_____ _____
Decrease in cash in the year 21 (138) (34)
_____ _____
NOTES TO THE ACCOUNTS
YEAR ENDED 30 APRIL 2006
1 ACCOUNTING POLICIES
The financial statements are prepared in accordance with applicable accounting
standards in the United Kingdom. The particular accounting policies adopted by
the Group are described below.
In July 2005, due to continuing losses and an uncertain market, the directors
took the decision to cease manufacturing operations in the group's trading
subsidiary, Oriental Fine Foods Limited. Accordingly the assets and liabilities
of the subsidiary undertaking at 30 April 2005 were recorded at their expected
recoverable amounts and reclassified as current assets or liabilities as
appropriate. These figures are also reflected in these consolidated financial
statements in the comparative figures.
Basis of Consolidation
The Group financial statements consolidate the financial statements of the
Company and its subsidiary undertaking at 30 April 2006 using acquisition
accounting. The results of the subsidiary undertaking are included from the
effective date of acquisition. On acquisition of a subsidiary, all of the
subsidiary's assets and liabilities existing at the date of acquisition are
recorded at their fair values reflecting their condition at that date.
Profits or losses on intra-group transactions are eliminated in full.
Turnover
Turnover represents the amounts derived from the provision of goods and services
during the period stated net of Value Added Tax.
Financial Instruments
Financial assets are recognised in the balance sheet at the lower of cost and
net realisable value. Provision is made for diminution in value.
Income and expenditure arising on financial instruments is recognised on the
accruals basis and charged or credited to the profit and loss account in the
period to which it relates.
Goodwill
Goodwill representing the difference between the fair values of consideration
given and net assets acquired is capitalised and amortised through the profit
and loss account over its estimated useful economic life up to a maximum of
twenty years. In view of the decision in the prior year to cease business
operations in the trading subsidiary, the directors were of the opinion that the
goodwill originally acquired no longer had any value and the balance was
therefore written off as a permanent diminution in value as at 30 April 2005.
Investments
Investments held as fixed assets are stated at cost less provision for any
impairment.
Impairment
The Group evaluates its fixed assets for financial impairment where events or
circumstances indicate that the carrying amount of such asset may not be fully
recoverable. When such evaluations indicate that the carrying value of an asset
exceeds its recoverable value, the impairment loss is recognised in the profit
and loss account.
Stocks
Stocks are valued at the lower of cost and estimated net realisable value.
1 ACCOUNTING POLICIES /Continued ...
Deferred Taxation
Deferred taxation is provided in full on timing differences that result in an
obligation at the balance sheet date to pay more tax, or a right to pay less
tax, at a future date, at rates expected to apply when they crystallise based on
current tax rates and law. Timing differences arise from the inclusion of items
of income and expenditure in taxation computations in periods different from
those in which they are included in financial statements. Deferred tax assets
are recognised to the extent that it is regarded as more likely than not that
they will be recovered. Deferred tax assets and liabilities are not discounted.
Leased Assets
Assets held under finance leases and hire purchase contracts are capitalised at
their fair value on inception of the lease and depreciated over the shorter of
the period of the lease and the estimated useful economic lives of the assets.
The finance charges are allocated over the period of the lease in proportion to
the capital amount outstanding and are charged to the profit and loss account.
The rental costs arising from operating leases are charged to the profit and
loss account as the related expenditure is incurred.
Changes in accounting policies
In preparing the financial statements for the current year, the
company has adopted the following Financial Reporting Standards:
FRS 21 'Events after the Balance Sheet date (IAS 10)'; and
From 1 April 2005, the company has adopted the full requirements of
FRS21 (IAS 10) 'Events after the Balance Sheet Date'
FRS 25 'Financial Instruments: Disclosure and Presentation (IAS 32)'
In preparing this statement the Company has adopted FRS 25
'Financial Instruments: disclosure and presentation' for the first time.
The adoption of the above standards represent a change in accounting policy
however no restatement is required.
2 TURNOVER
The turnover, operating loss and net assets of the Group are attributable to one
class of business. The Group's entire turnover was within the United Kingdom.
3 OPERATING LOSS
The operating loss is stated after charging:-
2006 2005
£'000 £'000
Depreciation of tangible fixed assets - 35
Amortisation of goodwill - 33
Directors' remuneration 42 55
Auditors' remuneration - audit services 4 7
- other services - 2
_____ _____
4 PARTICULARS OF EMPLOYEES
The average number of persons (including directors) employed by the
Group during the year was:
2006 2005
No. No.
Production - 2
Selling, distribution and administration 4 2
____ ____
4 4
____ ____
The Company used sub-contract labour for much of its production.
Staff costs incurred during the year in respect of these employees were:
2006 2005
£'000 £'000
Wages and salaries 39 118
Social security costs 4 13
Pension costs 2 8
Compensation for loss of office 30 -
____ ____
75 139
____ ____
Directors' remuneration
Compensation
Salary/ Benefits Pension for loss Total Total
Fees in kind Pension of office 2006 2005
£'000 £'000 £'000 £'000 £'000 £'000
B P Bennett 9 1 2 30 42 64
K M Yeung - - - - - -
K W Salisbury - - - - - -
C E Davies - - - - - -
______ ______ ______ ______ ______ ______
9 1 2 30 42 64
______ ______ ______ ______ ______ ______
At 30 April 2006 no directors were accruing retirement benefits
under money purchase schemes.
5 PROVISION FOR LOSS ON DISCONTINUED OPERATIONS
2006 2005
£'000 £'000
Unamortised element of goodwill written off - 613
Write down of fixed assets to expected recoverable amount (25) 178
Write down of stocks to expected recoverable amount - 13
_____ _____
(25) 804
_____ _____
6 INTEREST RECEIVABLE AND SIMILAR INCOME
2006 2005
£'000 £'000
Bank interest receivable 1 2
___ ___
7 INTEREST PAYABLE AND SIMILAR CHARGES
2006 2005
£'000 £'000
Interest on bank overdraft - 2
Interest element of finance lease payments - 2
___ ___
- 4
___ ___
8 TAXATION
Analysis of Tax on Ordinary Activities
2006 2005
£'000 £'000
Current taxation:
UK Corporation tax charge for the period - -
Deferred taxation:
Origination and reversal of timing differences - 45
____ ____
Tax on profit on ordinary activities - 45
____ ____
Factors Affecting Tax Credit
Loss on ordinary activities before tax (107) (1,058)
_______ ____
Loss on ordinary activities by rate of tax of 19% (20) (201)
Effects of trading losses carried forward 60 193
Capital allowances in excess of depreciation (40) 2
Expenses not deductible - 6
____ ____
Corporation tax charge for the period - -
____ ____
At 30 April 2006 the company had £1,576,507 of unrelieved taxable losses.
No deferred tax asset has been provided due to the uncertainty of future taxable
profits.
9 LOSS ATTRIBUTABLE TO MEMBERS OF THE PARENT COMPANY
As permitted by Section 230 of the Companies Act, the profit and loss account of
the parent company is not presented as part of these accounts. The parent
company's loss for the financial year amounted to £140,000 (2005: £1,360,000).
10 EARNINGS PER SHARE
The calculation of earnings per share is based upon the loss after
taxation of £107,000 (2005: £1,103,000) divided by the weighted average number
of ordinary shares in issue during the year which was 19,226,887 (2005:
18,066,870).
11 INTANGIBLE FIXED ASSETS
Goodwill
£'000
Cost
As at 1 May 2005 and 30 April 2006 668
_____
Amortisation
As at 1 May 2005 and 30 April 2006 668
_____
Net Book Value
At 30 April 2006 -
_____
At 30 April 2005 -
_____
12 INVESTMENTS
Investment in
subsidiary
undertaking
£'000
Cost
As at 1 May 2005 and at 30 April 2006 435
_____
Provision
As at 1 May 2005 and at 30 April 2006 435
_____
Net book value
At 30 April 2006 -
_____
At 30 April 2005 -
_____
The Group holds the entire issued ordinary share capital and voting rights of
Oriental Fine Foods Limited, a company incorporated in England & Wales. The
principal activity of that company was the manufacture of chilled foods. The
subsidiary's trading operations ceased in July 2005 and the investment was fully
provided at 30 April 2005.
13 STOCKS
Group Group Company Company
2006 2005 2006 2005
£'000 £'000 £'000 £'000
Raw materials and consumables - 2 - -
_____ _____ _____ _____
14 DEBTORS
Group Group Company Company
2006 2005 2006 2005
£'000 £'000 £'000 £'000
Trade debtors - 20 - -
Other debtors 1 17 - -
Prepayments and accrued income - 7 - 4
_____ _____ _____ _____
1 44 - 4
_____ _____ _____ _____
15 CREDITORS: AMOUNTS FALLING DUE WITHIN ONE YEAR
Group Group Company Company
2006 2005 2006 2005
£'000 £'000 £'000 £'000
Convertible loans - 100 100
Bank overdraft (see below) 1 - - -
Obligations under hire purchase - 25 - -
Trade creditors - 39 - -
Other taxes and social security - 6 - -
Accruals and deferred income 18 24 16 10
_____ _____ _____ _____
19 194 16 110
_____ _____ _____ _____
Overdraft facilities in the previous year were supported by a cash collateral
arrangement of similar size together with unlimited cross guarantees given by
the Company and its subsidiary undertaking.
16 SHARE CAPITAL
2006 2005
£'000 £'000
Authorised:
Equity: 40,000,000 Ordinary shares of 0.5p each 200 200
Non-Equity: 50,000 Redeemable shares of £1 each 50 50
_______ _______
250 250
_______ _______
Allotted, issued and fully paid:
19,327,344 Ordinary shares of 0.5p each (2005: 18,660,677) 96 93
_______ _______
On 25 May 2005 £100,000 of convertible loans were
converted in full by the issue of 666,667 ordinary shares of 0.5p each at 15p
per share. This increased the total number of shares in issue to 19,327,344.
17 RESERVES
Share Profit &
Premium Loss
£'000 £'000
Group
At 1 May 2005 1,329 (1,401)
Loss for the year - (107)
Premium on shares issued in the period 97 -
_______ ______
At 30 April 2006 1,426 (1,508)
_______ ______
Company
At 1 May 2005 1,329 (1,366)
Loss for the year - (140)
Premium on shares issued in the period 97 -
_______ ______
At 30 April 2006 1,426 (1,506)
_______ ______
18 RECONCILIATION OF MOVEMENT IN EQUITY SHAREHOLDERS' FUNDS
2006 2005
£'000 £'000
Loss for the financial period (107) (1,103)
Equity shares issued in the period 3 3
Share premium on equity shares issued 97 97
Costs incurred - (10)
______ ______
(7) (1,013)
Opening shareholders' funds 21 1,034
_______ _______
Closing shareholders' funds 14 21
_______ _______
19 RECONCILIATION OF OPERATING PROFIT TO NET CASH OUTFLOW FROM
OPERATING ACTIVITIES
2006 2005
£'000 £'000
Operating loss (133) (252)
Depreciation of tangible fixed assets - 34
Amortisation of goodwill - 33
Decrease/(Increase) in stocks 2 (8)
Decrease in debtors 43 7
(Decrease)/Increase in creditors (51) 106
_____ _____
Net cash outflow from operating activities (139) (80)
_____ _____
20 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
2006 2005
£'000 £'000
Decrease in cash in year 138 34
Cash outflow in respect of hire purchase (25) (34)
_____ _____
Change in net debt arising from cash flows (113) -
Other changes not arising from movements in cash 100 -
_____ _____
Movement in net funds for the year (13) -
Opening net funds 44 144
_____ _____
Closing net funds 31 144
_____ _____
21 ANALYSIS OF CHANGES IN NET FUNDS
Other
30 April Cash non-cash 30 April
2005 flows movements 2006
£'000 £'000 £'000 £'000
Cash in hand and at bank 169 (137) - 32
Overdraft - (1) - (1)
_____ _____ _____ _____
169 (138) - 31
Hire purchase (25) 25 - -
Debt due within one year (100) - 100 -
_____ _____ _____ _____
Net funds 44 (113) 100 31
_____ _____ _____ _____
During the year £100,000 of convertible loans were converted in full by the
issue of 666,667 ordinary shares (see Note 16).
22 COMMITMENTS
The Group had no capital or operating lease commitments at 30 April
2006 and 30 April 2005.
23 FINANCIAL INSTRUMENTS
The disclosures required by FRS 13 in relation to the nature of any financial
instruments used during the year to mitigate interest rate movements, liquidity
and foreign currency risks are shown in the Directors' Report on page 5, under
the heading 'Financial Instruments'.
During the year £100,000 of convertible loans were repaid in full by the issue
of 666,667 ordinary shares (see Note 16).
24 RELATED PARTY TRANSACTIONS
Following the decision to cease manufacturing activities in the subsidiary
during 2005, the leasehold property was returned to the K M and K S Yeung
Partnership without financial penalty. At 30 April 2006, K S Yeung and K M Yeung
each owned 10% of the company's issued share capital and K M Yeung was a
non-executive director of the company until 11 April 2006.
These shareholdings were substantially diluted following the share issue in May
2006 (see Note 25).
25 POST BALANCE SHEET EVENTS
It was resolved at an Extraordinary General Meeting on 5 May 2006 that the
authorised share capital of the Company be increased to £300,000 by the creation
of 100,000,000 New Ordinary Shares. Further, it was resolved that 105,000,000
New Ordinary 0.1p shares be allotted and issued.
It was also resolved that each of the 19,327,344 issued shares of the company at
that date be sub-divided into one New Ordinary Share and one Deferred Share and
the 20,672,656 unissued Existing Ordinary Shares be sub-divided into five
unissued New Ordinary Shares. All new shares will rank pari-passu with the New
Ordinary 0.1p shares.
On 8 May 2006, 105,000,000 New Ordinary 0.1p Shares were issued for 0.25p to a
concert party. This raised £262,500, less issues costs of £12,500, in order to
finance the costs of further potential acquisitions.
The Concert Party is a group of mainly high net worth individuals, many of whom
have previously invested in private and public companies.
26 FINANCIAL RISK MANAGEMENT
The Group does not trade. The future strategy of the Group
therefore depends on identifying a suitable target to add value to the Group.
It may not be possible to identify such a target or identification of the target
may take some considerable time.
Assuming a target is acquired by the Group, various factors will
determine the success of the business purchased, including the market within
which it operates.
27 ANNUAL REPORT
The annual report will be sent to shareholders on 26 September 2006.
Copies will be available to the public, free of charge, at the Company's
registered office at Television House, 10-12 Mount Street, Manchester, M2 5NT.
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