Final Results

Enition PLC 30 June 2006 ENITION PLC FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2005 Chairman's Statement I am pleased to report on the results of Enition plc (the 'Company') for the year ended 31 December 2005. Also included at the end of the report and accounts is our notice of annual general meeting to be held on 25 July 2006 ('AGM'). Introduction As shareholders are aware, the Company was admitted to trading on AIM in January 2004. By the end of its financial year to 31 December 2004 the Company had acquired and liquidated its trading subsidiary CDE Solutions Limited ('CDE') and became a non-trading entity whose main asset was cash at bank. The report and accounts presented here covers the twelve month period which ended on 31 December 2005. Business Review During the period under review, the Company had no trading business. The loss on ordinary activities for the period under review amounted to £197,000 resulting in a loss per share of 0.1 pence. Administrative expenses amounted to £173,000 during the period. Included in that figure were payments of £18,000 to the liquidator of CDE together with an impairment charge of £17,000 in respect of the Company's intellectual property. Other administrative costs were tightly controlled as your Board sought to define and implement a changed business strategy. In particular, Directors' aggregate remuneration was reduced from £83,000 in the previous year, to £18,000 in 2005. As outlined in the report and accounts for the period ended 31 December 2004, the Board of the Company had been reviewing potential opportunities to acquire another trading business since its trading subsidiary CDE was put into liquidation. On 20 October 2005 a group of investors, including and introduced by me, completed the investment in the Company of £95,000 by way of a subscription for new ordinary shares in the Company representing 29.80% of the then issued share capital of the Company. As part of this investment transaction, the Company also raised a further £200,000 (before expenses) by way of a placing of new ordinary shares at 0.11p per share. On completion of the investment, John Stirling, Jonathan (Jason) Teichman and I, were appointed to the Board and Anthony Leon and Adrian Finn ceased to be directors. The Company raised a further £661,000 (before expenses) in December 2005, by placing new ordinary shares at the price of 0.11p per share. At 31 December 2005, the Company had cash balances of £925,000. Investment Strategy Since October 2005, your Board has been exploring and reviewing potential opportunities by way of an investment and/or acquisition as per the Board's strategy which was set out in the circular to shareholders dated 19 September 2005. Pursuant to this strategy of seeking potential acquisitions, targets and investments for the Company in the broad energy and sustainable power sectors in Europe and the Americas, I am pleased to say that the Company has identified investment proposals in the ethanol industry. The Board is currently reviewing and undertaking due diligence on potential investments in this area. If the Board proceeds with any of these investment proposals, it is anticipated that some or all of the consideration will be satisfied by the issue of new ordinary shares in the Company at a premium to today's share price. Your Board believes that the ethanol market offers particularly compelling investment characteristics. The ongoing strategy of the Company will be to take significant, minority positions in companies, assets or projects which offer a broad exposure to the ethanol industry, including facilities management, service provision, financial services as well as construction and production facilities. The AIM Rules now require a company that has become an investing company by divesting itself of its business interest, to seek shareholder approval for its investment strategy going forward at least annually. Thus one of the resolutions to be put forward to shareholders at the forthcoming AGM will seek approval for the Board's investment strategy, as described below: The ongoing investment strategy of the Company will be to invest in a broad portfolio of businesses within the ethanol industry, primarily in North America and Europe. It is anticipated that the majority of these businesses will be commercial and/or operational, although your Board may also invest in early-stage opportunities, which demonstrate clear, discernable cash generation possibilities. Specific areas of focus in the ethanol industry may include: • facilities management • service provision • financial services • construction and contracting services • operation and maintenance of plant facilities. Investments will normally be in the region of £2 million to £15 million and may range from minority positions to full acquisitions. The Company's involvement in the management of companies in which it invests will vary from case to case, taking into account its level of ownership and nature of the project. The Directors consider that their broad collective experience in the renewable energy, ethanol and financial services sectors will assist them in the identification and evaluation of suitable acquisition targets. Where necessary, they will engage external professionals to assist in this process and subsequent due diligence. If an investment or acquisition has not been made by the time of the announcement of the Company's financial results for the year ending 31 December 2006, the Company will put forward proposals to shareholders as to the future strategy and direction of the Company and appropriate use of shareholders' funds. Name Change Since the Board is intending to make investments in ethanol related companies and projects, it is proposing to change the name of the Company to 'Ethanol Investments plc'. Accordingly, one of the resolutions to be put to shareholders at the forthcoming AGM will seek approval of the shareholders for that change. Board and Management Changes To position the Company to pursue its proposed investment strategy in ethanol related projects, Jonathan (Jason) Teichman and Emma Myers will resign from the Board effective from the conclusion of the AGM. Conditional on the investment strategy in resolution 5 being approved by shareholders, Wilton L. Adcock will be appointed as a senior consultant to the Company effective from the conclusion of the AGM. Wilton Adcock's details are as follows: Wilton L. ('Bill') Adcock, aged 73 Bill Adcock is based in Rocky Mount, North Carolina and has extensive experience in the North American ethanol industry. In particular, Mr. Adcock has been involved in the construction of small volume ethanol plants. He was responsible for the planning, construction and operation of the Heartland Ethanol Plant in Winthrop, Minnesota. Mr. Adcock was responsible for the development of the Heartland Corn Products project and was retained by Heartland Corn Products for eighteen months to act as the General Manager of the plant. He has extensive experience as a consultant in the ethanol and agricultural industry and has a Bachelor Degree from North Carolina State University in Animal Industry Science. In addition to the appointment of Bill Adcock as a senior consultant, the Company proposes to strengthen the Board of the Company with appointments of ethanol and financial service-related experienced executives, once suitable candidates are identified. I look forward to welcoming you to the AGM. Peter Greensmith Executive Chairman 29 June 2006 PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 DECEMBER 2005 2005 2004 £000 £000 Turnover - - Cost of sales - - _______ _______ Gross profit - - Administrative expenses: - investment in subsidiary written off - (4,500) - loans to subsidiary written off - (1,041) - other (173) (187) _______ _______ Operating loss (173) (5,728) Interest payable (25) - Interest receivable 1 7 _______ _______ Loss on ordinary activities before and after tax and loss for the financial year (197) (5,721) ======= ======= Loss per share - basic and diluted 0.1p 4.1p BALANCE SHEET AS AT 31 DECEMBER 2005 2005 2004 £000 £000 Fixed assets Intangible assets - 17 Investments - - ______ ______ - 17 ______ ______ Current assets Debtors 3 1 Cash at bank 925 34 ______ ______ 928 35 Creditors: amounts falling due within one year (81) (378) ______ ______ Net current assets/(liabilities) 847 (343) ______ ______ Net assets/(liabilities) 847 (326) ====== ====== Share capital and reserves Called up share capital 538 508 Share premium account 1,952 612 Profit and loss account (1,643) (1,446) ______ ______ Shareholders' funds/(deficit) 847 (326) ====== ====== CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2005 2005 2004 £000 £000 Reconciliation of operating loss to net cash outflow from operating activities Operating loss (173) (5,728) Loans to subsidiary written off - 1,041 Investment in subsidiary written off - 4,500 Intellectual property impairment 17 - Expenses satisfied by the issue of shares 47 92 Increase in debtors (2) (1) Increase in creditors 33 48 ______ ______ Net cash outflow from operating activities (78) (48) Returns on investment and servicing of finance Interest received 1 7 Capital expenditure and financial investment Purchase of intangible fixed assets - (17) ______ ______ Cash outflow before financing (77) (58) ______ ______ Financing Issue of ordinary share capital 956 1,046 Expenses of share issues (30) (243) Loans received 42 330 Loans advanced - (1,041) ______ ______ 968 92 ______ ______ Increase in cash for the year 891 34 ====== ====== Notes 1. Basis of preparation The financial information set out above does not constitute the company's statutory accounts, within the meaning of Section 240 of the Companies Act 1985, for the year ended 31 December 2004 or 2005, but is derived from those accounts. Statutory accounts for the year ended 31 December 2004 have been filed with the Registrar of Companies. The statutory accounts for 2005 will be delivered to the Registrar of Companies in due course. The auditors have reported on those accounts; their report was unqualified and did not contain a statement under Section 237(2) or (3) of the Companies Act 1985. The Company's Annual Report and Accounts will be sent to shareholders on 30 June 2006 and will be made available to the public at the Company's registered office, Number 14, The Embankment, Vale Road, Heaton Mersey, Stockport, Cheshire SK4 3GN. The financial information has been prepared on a basis consistent with the accounting policies disclosed in the Group's 2004 Report and Accounts. 2. Dividend No dividend has been proposed in respect of the year. 3. Loss per share The calculation of loss per share is based on the loss for the financial year of £197,000 (2004 - £5,721,000 loss) and a weighted average number of ordinary shares in issue during the year of 341,077,882 (2004 - 140,155,709). Exercise of the Company's share options would not result in any dilution in the loss per share. This information is provided by RNS The company news service from the London Stock Exchange

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