Final Results
Corero PLC
29 March 2007
Corero plc
('Corero' or 'the Group')
Preliminary Results for the year ended 31 December 2006
Corero PLC, the specialist provider of software solutions to the banking &
securities and education markets, announces its preliminary results for the year
ended 31 December 2006.
All comparisons are for the eight months ended 31st December 2005.
• Record revenues of £6.3 million (2005 £2.1 million)
• Financial Markets Division increased revenues to £3.9 million (2005
£0.8 million)
• Business systems sales grew to £2.4 million (2005 £1.3 million)
• Record adjusted pre-tax profits of £0.4 million (2005: loss £0.8 million)
• Both divisions profitable
• Adjusted Earnings per share of 1.1 p (2005 loss 2.9 p)
• 2005 acquisitions of Blue Curve and Eclipse Learner Systems were
successfully integrated and performed above expectations
• First US sales for Financial Markets Division
• 24 new clients added, taking the total to 288.
• Annual recurring revenue base increased by 47% to £2.8 million at 31
December 2006
• Previously reported delayed large license agreement anticipated during the
first half of 2007
Jarlath McGee, Chief Executive, said:
'It has been a year of significant change with the acquisitions of Blue Curve
and Eclipse and we are delighted by the overall performance of the business.
The Group now operates from a much broader base with significant recurring
revenues, creating a much stronger financial position.
We expect the momentum built in 2006 to continue and our sales pipeline to grow
in size and quality. We plan to open our first overseas office in New York in
the first half of 2007 to support our existing US revenue stream and to enable
us to increase our presence in the large North American market with minimum
exposure. We anticipate further sales there in 2007 and beyond.'
29 March 2007
Enquiries:
Corero PLC Tel: 020 7392 1300
Jarlath McGee, Chief Executive
John East & Partners Limited Tel: 020 7628 2200
John East
College Hill Tel: 020 7457 2020
Matthew Smallwood/Jamie Ramsay
About Corero
Corero designs, develops and delivers market leading software products for
financial institutions through its Financial Markets Division, and business and
education markets through its Business Systems Division.
Radica is the European leading software system that addresses the needs of asset
servicing operations for the global banking & securities sector. By fully
automating the life-cycle of corporate actions, dividends, including taxation
and new issues and placings, Radica reduces the serious operational risk of
missing or miscalculating corporate events. This area of operations has
traditionally been very manual with all the risk and cost associated with such
processes. Radica is designed for a global market and can address the needs of
financial institutions from Europe, North America or Asia Pacific.
Blue Curve software allows organisations to vastly improve the production and
distribution of their financial research. It collates and presents complex
financial data efficiently and quickly for analysts to make informed opinions on
market conditions and trends. It speeds up the process of content creation,
content approval and publishing. And it also makes sure that each piece of
content conforms to the correct regulatory requirements, and that it gets sent
to the right people, using the right method and at the right time.
ICAEW accredited, Resource Financials, is at the core of the Corero suite of
business applications. Also featured are solutions for eProcurement, Project
Costing, HR & Payroll, Continuing Professional Development and Learning
Management. Together with Workflow and Web Applications, covering Reporting,
Timesheets, Expenses and Requisitions, there are over 60 highly integrated
modules offering large and small enterprises modern and dynamic business
solutions.
Eclipse Learner Management system manages the students, tutors and processes
within Further and Higher Education environments by electronically capturing the
information required throughout the 'learning lifecycle' and to satisfy
Government reporting requirements and, most importantly, secure the funding upon
which Colleges depend.
Chairman's Statement
I am pleased to report that Corero has achieved record results for the year both
in terms of revenue and profit. All Divisions and product lines were profitable,
with Blue Curve, now a part of Financial Markets Division, doubling its revenues
and the Business Systems Division more than doubling its profit contribution.
The acquisitions of Eclipse and Blue Curve have been very successful and have
given the Group a platform for continuous and sustainable growth.
These acquisitions, combined with organic growth across the Group, have resulted
in a transformation of the business and a significant restructuring of our
trading operations. To recognise these changes and to reposition it for the next
phase of its development, the name of the Company was changed to Corero plc from
Mondas plc with effect from 27 February 2007.
Results
For the year ended 31 December 2006, the Group reported record revenues of £6.3
million (eight months ended 31 December 2005: £2.1 million). Our adjusted profit
before tax was £0.4 million (eight months ended 31 December 2005: loss £0.8
million), with the turnaround of £1.2 million due to strong revenue performance
in the financial sector most notably with Blue Curve more than doubling its
revenues compared to 2005. The Group took on 24 new customers in the year, as
well as 2 major cross sales of new products to existing users in the financial
sector. The Business Systems division produced strong profits from its solid
user base, with the Eclipse product line moving from break even in 2005 to a
significant operating profit in 2006. Our annualised support base increased by
47% to £2.8 million at 31 December 2006.
Our earnings per share based on adjusted pre tax profit were 1.1 pence (eight
months ended 31 December 2005: loss 2.9 pence).
The improved trading and successful integration of acquisitions has allowed the
Group to benefit from positive free cash flows of £430,000. This has lead to a
much improved working capital position at the year end. This, when combined with
the August 2006 variation of the Convertible Unsecured Loan Stock ('CULS'), has
given the Group its strongest ever financial position.
Business model and strategy.
Our strategy is one of strong organic growth from our financial markets products
on a global basis and to underpin this by increasing recurring revenues across
both divisions. We will augment this with appropriate acquisitions which offer
exciting growth opportunities and deliver shareholder value.
Staff
On behalf of the board, I would like to take this opportunity to thank our staff
for their efforts in producing these excellent results, and I look forward to
working with them over the next few years as we realise the true potential of
this business.
Outlook
The much improved financial position of the Group, its strong increase in new
clients, its recurring annual revenues and the proven global capability of its
products put Corero in a position to deliver strong results in 2007 and beyond.
In our trading update on 3 January 2007, we referred to the slippage of a large
license extension agreement from an existing customer, which arose due to a
procurement delay. We expect this agreement will augment the first half of
2007's performance.
In summary, I am pleased to report Corero has achieved record results for the
year both in terms of revenue and profit, resulting in a much improved financial
position. The acquisitions of Eclipse and Blue Curve have been very successful
and we now have a platform for continuous and sustainable growth which leads us
to view the Group's future with optimism.
Peter Waller
Chairman
29 March 2007
Chief Executive's Report
Overview
I am delighted with the performance of all divisions this year. It has been a
year of significant change in the business with the acquisitions of Blue Curve
and Eclipse adding greatly to the Group through their customers, their products
and their people. Our international business has grown significantly. We now
service clients in the West and East Coasts of North America, continental
Europe, Moscow, South Africa and Singapore.
Our rebranding has brought together all of the Group under one new set of values
and identity, while retaining the very strong branding of the products within
each of our divisions. Following this restructuring, we now have two operating
divisions; Financial Markets Division and Business Systems Division. Financial
Markets comprises the Blue Curve and Radica product lines and is focussed on
Research Management and Asset Servicing solutions. Business Systems Division
comprises the Eclipse and Resource product lines and is focussed on the public
sector, in particular the education market.
During 2006 we won 24 new clients and now support 288 customers in total. With
Blue Curve, we achieved sales to our first US clients and with Radica CAPS, we
were selected to provide a global income processing system to one of the world's
largest investment banks. We now support clients across four continents and are
moving towards becoming a truly global provider of complex products to expanding
markets.
Our commitment to our customers has been rewarded with very strong revenues from
our user base and our focus on sales has seen our customer base increase by 24
to 288.
Financial Markets Division
This division has seen the greatest change with the acquisition of Blue Curve.
Divisional revenues have increased from £0.8 million in 2005 to £3.9 million,
including almost £2.0 million from Blue Curve, more than double its 2005
revenues. Annual recurring revenues have increased from £0.5 million at the
start of the year, to £1.2 million at the balance sheet date. The division
increased its number of customers from 6 to 22, with 8 new Blue Curve and 2 new
Radica CAPS clients joining the user base which was also enlarged with the
acquisition of Blue Curve.
All financial markets clients have contracted for additional licences or
services which clearly points to a very satisfied customer base. Several large
Blue Curve licence renewals, including ING and Evolution, are testament to the
acceptability of our products. Our investment in Version 4 of Radica CAPS has
allowed us to deliver a fully integrated system to Panmure Gordon in less than
12 weeks and has ensured the selection of Corero as the global platform for
income processing in one large investment bank.
We have increased our headcount in this division. This is due to the strong Blue
Curve business and an increasing pipeline of opportunities across both products.
Our internal estimates and those of the Celent report, (Celent is an
independent consultancy focussed on the banking sector) show that the potential
markets for our key products are forecast to be worth approximately $1 billion
between now and 2010, and I believe that we have the products and the people to
capitalise on these growing markets. The business drivers remain the same. These
drivers are reduction of operational risk, growing compliance demands and the
reduction of cost, all of which produce a demand for automation within our
target customers. Basel II and MiFID remain strong drivers for better systems
and our products will help our customers achieve the level of automation
required.
We are seeing increasing interest in the Blue Curve product from North America
and our plan for a New York office will ensure that we capitalise on this while
it will also service our current revenue stream from existing US clients. It
will also facilitate the global roll out of the global income project at one of
our large investment banking client and at the same time increase the
acceptability of the Radica CAPS product to our other global prospects.
Business Systems Division
The acquisition of Eclipse has helped increase the revenues of this division
from £1.3 million in 2005 to £2.4 million this year. Divisional contribution has
increased from £0.1 million to £0.6 million. At the year end, annual recurring
revenues from support contracts were £1.5 million. The division has 266 clients,
up from 250, and the education sector now accounts for over 60% of the user base
with 154 education sector clients.
City Academies represent an emerging complementary market within the education
sector, and of the 16 new education clients, 6 were City Academies. We continue
to see strong brand loyalty from our customers in this division which is
reflected in the level of repeat business and low attrition rate. This has
contributed greatly to the fact that 75% of Group revenues have come from our
clients who were with us at the start of the year.
We continue to invest in product development and are in the first stages of the
development of a new Learner Management System (LMS) which will provide an
upgrade path for current users of our existing Resource LMS and Eclipse LMS
products.
Future
We expect the momentum built in 2006 to continue and our sales pipeline to grow
in size and quality. We plan to open our first overseas office in New York in
the first half of 2007 to support our existing North American revenue stream.
This will enable us to increase our presence in the large North American market
where we anticipate further sales in 2007 and beyond. We expect this operation
to be break-even by the end of the year, minimising any exposure. We will
continue to develop our products to maintain their market leadership position
and plan to hire additional sales and delivery staff to take advantage of our
growing opportunities.
Jarlath McGee
Chief Executive
29 March 2007
Chief Financial Officer's Report
Financial Performance
For the year ended 31 December 2006, the Group reported adjusted profits before
tax, adjusted for goodwill amortisation, restructuring costs, notional non-cash
interest and share option expense, of £408,000 compared to a loss of £772,000
for the eight months ended 31 December 2005.
Group revenues increased significantly to £6,294,000 (eight months ended 31
December 2005: £2,091,000), driven by the recent acquisitions and by organic
growth across the Group. Approximately 75% of our revenues came from existing
users, demonstrating the acceptance of our products and the high level of
customer satisfaction we enjoy.
Strong growth was experienced in the Financial Markets Division, where revenues
grew to £3,873,000 (eight months ended 31 December 2005: £774,000). Revenues of
£1,968,000 arose from the acquisition in January 2006 of Blue Curve; an increase
of 223% on its revenues for the year ended 31 December 2005 of £883,000. Blue
Curve generated significant licence revenues, both from sales to new customers
and increasing commitments by existing customers. Radica revenues were
£1,905,000 (eight months ended 31 December 2005: £774,000) with growth coming
from 2 new licences and increased delivery of services into existing customers.
Business Systems Division revenues grew to £2,420,000 (eight months ended 31
December 2005: £1,317,000), with approximately £500,000 of this arising from
Eclipse, which was acquired in October 2005.
Contracted annual licence and support revenues have increased to approximately
£2,800,000 (eight months ended 31 December 2005: £1,900,000) due to the
acquisition of Blue Curve, an increased customer base, and significant sales of
additional licences and services into the existing user base.
Revenue growth has been in conjunction with a controlled increase in our cost
base. Employee numbers have increased to 75 at the balance sheet date (31
December 2005: 53) arising from the acquisition of Blue Curve and from
investments made in sales, delivery and infrastructure staff to support the
increased level of business. Recurring revenues of approximately £2.8 million
now provide significant coverage of fixed costs.
Exceptional costs of £170,000 relate largely to surplus premises arising on the
acquisition of Blue Curve, and include a provision against certain future
property lease costs. The company is actively marketing these premises to
potential tenants.
Goodwill amortisation arising on our recent acquisitions has been calculated on
a straight-line basis based on a 10 year amortisation period from the point of
acquisition, giving rise to a total charge of £295,000. The comparative charge
of £495,000 was mainly the final element of goodwill arising from the October
2000 acquisition of DSR Resource (now the Business Systems Division), which was
amortised over a 5 year period. We believe the change to a 10 year amortisation
period more accurately reflects the life of the recently acquired products,
taking into account their user base, revenue performance, increasing recurring
revenues, profitability and cash generation. However, for 2007 we will be
reporting under International Financial Reporting Standards (IFRS), which
require that goodwill is not amortised, but instead is tested annually for
impairment.
Net interest payable on the 8% Convertible Unsecured Loan Stock ('CULS') less
amounts held in the bank was £274,000 (eight months ended 31 December 2005:
£151,000). Additionally the company was obliged under FRS25 ('Financial
Instruments: Disclosure and Presentation') to report an additional, non-cash, '
interest' charge of £388,000 (eight months ended 31 December 2005: £89,000).
This includes £325,000 non-recurring, notional adjustments arising from the
variation of the CULS, in addition to £63,000 of non-cash, notional interest
charges also required by this standard (eight months ended 31 December 2005:
£89,000). The cash cost of the CULS variation was approximately £82,000 and
consisted of commissions and professional fees.
The Group has adopted FRS20 ('Accounting for Share Based Payments') as we offer
share options to staff and executives. This has been applied retrospectively to
the prior period as well as the current year. The valuation has been estimated
by using the Black-Scholes model, and has made certain reasonable assumptions to
determine the valuation. As a result there is a charge of £13,000 (2005:
£3,000) relating to share based payments. There is no cash impact to the Group
as a result of this new accounting standard.
Tax credits of £38,000 were received in the year which relate to previous tax
credits reclaimed. Total tax losses carried forward are approximately
£5,200,000, subject to final HMC&E agreement regarding the streaming of certain
losses from acquired businesses.
Earnings per share based on adjusted pre-tax profits were 1.1 pence (eight
months ended 31 December 2005: loss 2.9 pence). The average number of shares in
issue in 2006 was 36,251,573 (2005: 26,881,206).
After adjusting for exceptional costs, FRS25 interest and the amortisation of
goodwill the loss after tax was £418,996 (eight months ended 31 December 2005:
£1,449,199 restated for FRS 20).
Financial Position
On 30 August 2006 our balance sheet was strengthened by changes to the CULS,
with the redemption date being extended from 31 October 2007 to 31 October 2011,
the coupon reduced from 8.75 per cent to 8 per cent and the conversion price
adjusted to 25p. In addition a placing of £1,000,000 nominal of new CULS was
completed at par, together with a small placing of 405,250 new ordinary shares
at 16p per share, raising £65,000, to provide funds for incremental investment
opportunities and working capital.
Positive free cash flow of £430,000 was generated from operations, compared to a
consumption of £726,000 in the prior eight month period. The net turnaround of
£1,156,000 when combined with the CULS renegotiation and the issue of £1m new
CULS has significantly strengthened the Group's financial position. Trade
debtors were £2,294,000 (2005: £643,000), which represented 52 days sales
outstanding (2005: 67 days).
Goodwill arising during the year was £2,519,000, which was entirely due to the
acquisition of Blue Curve on 16 January 2006. £925,000 of this arose from the
initial consideration, with the remaining £1,530,527 arising from the deferred
consideration, which was determined by revenue growth in excess of a defined
threshold. This will be payable by way of a share issue, with the number of
shares being determined by reference to the higher of 17 pence or a 10 per cent
discount to the closing mid-market price on the date of the preliminary
announcement of these results. Consequently a maximum of 9,003,100 shares will
be issued under the earn-out. Net liabilities of £3,000 were assumed on
acquisition, and the costs of acquisition were £61,000.
Deferred income, which represents future revenues for the Group, increased to
£1,466,000 (2005: £1,245,000). This increase arose from the acquisition of Blue
Curve Ltd and from increased sales during the year.
The Group's net deficit position has decreased significantly by £2,438,000 to
£312,000 at 31 December 2006, as a result of improved trading, and the increased
capital base.
Ian Selby
Chief Financial Officer
29 March 2007
Consolidated Profit and Loss Account for the year ended 31 December 2006
Year ended 31 Year ended Year ended 8 month period
December 2006 31 December 31 December ended 31
2006 2006 December 2005
Continuing
Note Acquisitions Operations Total Restated
£ £ £ £
Turnover 1,968,038 4,325,833 6,293,871 2,091,456
Cost of sales (16,479) (200,820) (217,299) (90,949)
Gross profit 1,951,559 4,125,013 6,076,572 2,000,507
Total administrative expenses (1,516,815) (4,355,001) (5,871,816) (3,209,578)
Operating profit / (loss) 434,744 (229,988) 204,756 (1,209,071)
Analysis of net interest
payable and similar charges
Net interest payable (274,167) (150,700)
Notional and extinguished (387,825) (89,428)
CULS interest and costs
Net interest payable and 3 (661,992) (240,128)
similar charges
Profit/(loss) before FRS 25 408,372 (772,255)
interest, restructuring,
FRS20, and goodwill
amortisation and taxation
Notional and extinguished (387,825) (89,428)
CULS interest ('FRS 25')
Restructuring 2 (170,322) (90,070)
Share based payments ('FRS20 (12,647) (2,620)
')
Amortisation of goodwill (294,814) (494,826)
Loss on ordinary activities (457,236) (1,449,199)
before taxation
Tax on loss on ordinary 4 38,240 -
activities
Loss for the period 7 (418,996) (1,449,199)
Basic and diluted loss per 5 (1.2p) (5.4p)
share
Statement of Total Recognised Gains and Losses for the year ended 31 December
2006
(Restated)
8 month period
ended 31
Year ended December 2005
31 December 2006
£ £
Loss for the financial period (418,996) (1,449,199)
Total recognised gains and losses relating to the year (418,996) (1,449,199)
Prior year adjustment (note 1) (2,620) -
Total recognised gains and losses since the last financial statements (421,616) (1,449,199)
Consolidated Balance Sheet as at 31 December 2006
31 December 31 December
2006 2005
Restated
Note £ £
Fixed assets
Intangible assets 2,733,585 509,102
Tangible assets 92,423 109,577
2,826,008 618,679
Current assets
Debtors 2,463,418 840,911
Cash at bank and in hand 906,890 397,405
3,370,308 1,238,316
Creditors: amounts falling due within one year (1,095,257) (539,208)
Net current assets 2,275,051 699,108
Total assets less current liabilities 5,101,059 1,317,787
Deferred income (1,466,160) (1,245,069)
Creditors: amounts due falling after more than one year
Convertible 8% unsecured loan stock (3,947,258) (2,823,067)
Net liabilities (312,359) (2,750,349)
Capital and Reserves
Shares to be issued 1,530,527 -
Called up share capital 3,684,875 2,822,775
Share premium account 6,369,379 6,428,347
Merger reserve 364,394 -
Convertible unsecured loan stock equity reserve 146,286 -
Share options reserve 15,267 2,620
Profit and loss reserve (12,423,087) (12,004,091)
Equity shareholders' deficit 7 (312,359) (2,750,349)
Consolidated Cash Flow Statement for the year ended 31 December 2006
8 month period
ended 31
Year ended December 2005
31 December 2006
Note £ £
Net cash outflow from operating activities A (448,049) (381,850)
Returns on investments and servicing of finance (246,116) (150,700)
Taxation received 38,240 -
Capital expenditure (56,660) (10,610)
Acquisitions 63,855 (159,550)
Cash outflow before use of liquid resources and financing (648,730) (702,710)
Management of liquid resources (589,073) 94,249
Financing
Issue of ordinary capital including premium net of costs 1,158,215 69,250
Decrease in cash (79,588) (539,211)
Notes to the consolidated cash flow statement
A. Reconciliation of operating profit/(loss) to net cash outflow from
operating activities.
8 month
Year ended period ended
31 December 31 December
2006 2005
£ £
Operating profit/(loss) 204,756 (1,209,071)
Depreciation 78,324 57,289
Amortisation 294,814 494,826
(Increase)/decrease in debtors (1,441,054) 653,280
Increase/(decrease) in creditors 402,644 (380,794)
Other non-cash charges 12,647 2,620
Net cash outflow from operating activities (448,049) (381,850)
B. Purchase of subsidiary undertaking
On 16 January 2006, the Company acquired 100% of the issued share capital of
Blue Curve Limited whose assets and liabilities were
Book value Fair value Fair value
adjustment
£ £ £
Tangible fixed assets 4,512 - 4,512
Debtors 181,453 - 181,453
Cash at bank and in hand 124,866 - 124,866
Creditors (216,432) - (216,432)
Deferred income (97,160) - (97,160)
Net separable liabilities (2,761) - (2,761)
Goodwill 2,519,298 - 2,519,298
Satisfied by: Consideration 2,516,537
Consideration comprises:
Equity consideration 925,000
Shares to be issued 1,530,527
Costs of acquisition 61,010
Total consideration 2,516,537
Amounts incurred in restructuring, reorganising and integrating Blue Curve
Limited since acquisition and included in the Company's financial results under
restructuring costs amounted to approximately £155,000.
The consideration comprised:
a) Initial consideration of £925,000, satisfied by the issue of 5,606,060 new
ordinary shares at a price of 16.5p per share; and
b) Deferred consideration of up to £2,075,000, based on Blue Curve's revenues
for the year ending 31 December 2006, after deducting any shortfall adjustment,
at the rate of twice the excess above minimum revenue of £1,150,000. The
shortfall adjustment was defined as 1.5 times the amount by which Blue Curve's
revenues for the year ending 31 December 2005 fell below £925,000. Blue Curve's
revenues for the year ended 31 December 2005 were £882,567. The deferred
consideration is to be satisfied by the issue of up to a further 9,003,100 new
Corero ordinary shares, issued at the higher of 17p per share and a discount of
10 per cent. to the mid market price of a Corero plc ordinary share on the date
of the announcement of preliminary results for the year ending 31 December 2006.
The entire deferred consideration is by way of issue of 10 pence ordinary
shares.
C. Free Cash Flow
8 month
Year ended period ended
31 December 2006 31 December
2005
£ £
Operating Profit / (loss) 204,756 (1,209,071)
Add
Amortisation 294,814 494,826
Depreciation 78,324 57,289
Restructure 170,322 90,070
Share based payments 12,647 2,620
556,108 644,805
Less
Capital expenditure (56,994) (10,610)
Interest payable (274,167) (150,700)
(331,161) (161,310)
Free Cash Flow from ongoing operations 429,702 (725,576)
1. Accounting policies
Basis of Preparation
Going Concern
These financial statements have been prepared under the historical cost
convention, and in accordance with applicable accounting standards, using the
following accounting policies. The accounts have been prepared on a going
concern basis as the Directors believe that current sales prospects combined
with existing working capital resources should ensure that Corero has adequate
working capital to service its existing business for the foreseeable future.
Although the Group has historically incurred significant trading losses and cash
outflows, the year ended resulted in operating profits after interest, and in
cash generated from operations. Improved trading conditions and successful
integration of acquisitions has helped strengthen the Group's working capital
position. During the year the CULS were renegotiated, with their redemption date
moved to 31 October 2011.
Change in accounting policy
The Group has changed its accounting treatment for employee share options. Under
Financial Reporting Standard (FRS) 20, Share Based Payment, the Group is
required to recognise an expense for share-based payments in the profit and loss
account. Details of the accounting policy adopted are given below. The impact of
this change in accounting treatment has been to reduce the Group's operating
profit for the year by £12,648 (2005: £2,620)
2. Restructuring charge
8 month
Year ended period ended
31 December 31 December
2006 2005
£ £
Other restructuring including professional fees 13,186 65,481
Integration costs of Eclipse Learner Systems 14,646 24,589
Accrual against surplus premises arising on Blue Curve acquisition 131,733 -
Other Blue Curve integration costs 10,757 -
170,322 90,070
3. Net interest payable and similar charges
8 month period
ended 31 December
Year ended 2005
31 December
2006
£ £
Bank interest receivable 10,452 8,486
Interest payable on other loans (282,846) (157,480)
Bank interest payable (1,773) (1,706)
Net Interest Payable (274,167) (150,700)
Notional charges from variation of CULS under FRS25 arising (262,395) -
from a change in fair value assumptions
Amortisation of notional CULS interest charges and
renegotiation costs under FRS25
(62,196) (89,428)
Renegotiation of CULS (63,234) -
Notional Interest Expense under FRS 25 (387,825) (89,428)
Net interest payable and similar charges (661,992) (240,128)
4. Tax on loss on ordinary activities
The amounts represent tax refunds in respect of research and development tax
credits received during the year.
5. Loss per share
Basic loss per share for the year is based on a weighted average number of
shares outstanding of 36,251,573 (Eight months ended 31 December 2005:
26,881,206) and loss after taxation £418,996 (Eight months ended 31 December
2005 restated: £1,449,199). The CULS and share options were non-dilutive for
both periods and thus the diluted loss per share is the same as the basic
amount.
6. Dividend
The directors do not recommend paying a dividend for the year ended 31 December
2006 (eight months ended 31 December 2005: £nil)
7. Reconciliation of movements in shareholders' deficit
8 month
Year ended period ended
31 December 2006 31 December
2005
£ £
Loss for the financial period (418,996) (1,446,579)
FRS 20 Restatement - (2,620)
Loss for the financial period -after restatement (418,996) (1,449,199)
Issue of 8,621,000 ordinary shares at par
(2005: Issue of 2,086,110 ordinary shares at par) 862,100 208,611
Premium on new shares issued (net of expenses) (58,968) 147,640
Merger reserve arising on acquisition of Blue Curve Limited 364,394 -
Equity arising on CULS re-negotiation 146,286 -
Share Options Reserve 12,647 2,620
Shares to be issued 1,530,527 -
Net addition/(reduction) to shareholders' funds 2,437,990 (1,090,328)
Opening shareholders' deficit (2,750,350) (1,660,021)
Closing shareholders' deficit (312,359) (2,750,349)
8. Sundry Information
This preliminary statement, which has been agreed with the auditors, was
approved by the Board on 28 March 2007. It is not the Company's statutory
accounts for the year ended 31 December 2006 but has been extracted from them.
Copies of the report and accounts for the year to 31 December 2006 will be
posted to shareholders shortly and may be obtained from the company's registered
offices.
The statutory accounts for the year ended 31 December 2006 received an audit
report which was unqualified and did not contain a statement under s237 (2) or
(3) of the Companies Act 1985. The statutory accounts for the eight month
period ended 31 December 2005 have been delivered to the Registrar of Companies
but the audited 31 December 2006 accounts have not yet been filed.
This information is provided by RNS
The company news service from the London Stock Exchange