Preliminary Results

RNS Number : 6611B

Minoan Group PLC

23 February 2011

 

                                                                                                       23 February 2011

Preliminary Results Announcement 

Minoan Group Plc ("Minoan" or the "Company") announces its preliminary results for the year ended 30 September 2010

HIGHLIGHTS

·      The Company has identified a number of potential acquisitions in the travel and leisure sector;

·      Non-binding heads of terms for the first small target have been signed - due diligence is being undertaken;

·      Acquisition targets are being selected which are expected to provide strong cash flows and profit growth to the expanded group;

·      Duncan Wilson has been appointed as Managing Director of Minoan; and

·      New Fast Track Law introduced in Greece to expedite the planning process of environmentally appropriate projects.

Minoan Chairman, Christopher Egleton commented:

"The year under review has been an active one for the Group.  We have focused our efforts on identifying profitable and cash generative businesses that can be expanded.  We have welcomed Duncan Wilson to the position of Managing Director to spearhead those acquisitions and several targets are currently being assessed.

The decision by the Greek Council of State to annul the Greek Government's approval of the Cavo Sidero Project has allowed the Group to move the project forward.  We believe that our project will match the required criteria under the new guidelines and we look forward to advancing the project throughout 2011."

The financial information set out in this Preliminary Results Announcement, which has been extracted from the audited Report and Financial Statements, does not constitute the Company's statutory accounts for the year ended 30 September 2010.

The report of the auditor on the Report and Financial Statements for the year ended 30 September 2010 is not qualified and does not include a statement under s498(2) to s498(4) of the Companies Act 2006.

Minoan Group Plc's Preliminary Results Announcement for the year ended 30 September 2010 can be viewed on the Company's website, www.minoangroup.com, with effect from 23 February 2011.

For further information contact:

Minoan Group Plc

Christopher Egleton                                              [e-mail]

Bill Cole                                                                020 8253 4305

Seymour Pierce Limited                                     020 7107 8000

Nicola Marrin/David Foreman (Corporate Finance)  

Marianne Woods (Corporate Broking)

Rivington Street Corporate Finance Limited   07956 671131

Jon Levinson

Bishopsgate Communications Limited              020 7562 3350                                

Nick Rome/Michael Kinirons      

Chairman's Statement

Introduction

I am pleased to report that the Company has commenced the implementation of its expansion in the Tourism and Leisure sector while remaining fully committed to bringing its project in Crete to fruition.

The Project

The long awaited decision of the Greek Council of State regarding the Company's Cavo Sidero Project (the "Project") was announced last December. Although annulling the Greek Government's approval of the Project as approved in 2007, the decision indicates the form of development that may be created in the area.

The approval of the new permitting process by the Greek Government regarding planned strategic investments in Greece, the Fast Track Law, is extremely encouraging. The purpose of the law is to expedite the planning process of projects which are considered to be environmentally appropriate, which will strengthen the Greek economy, will create employment and which will introduce new technologies. The Company's legal and professional advisers have opined that the Project, if amended to reflect the factors set out in the Council of State decision, would meet all the published criteria of the Fast Track Law.

Tourism and Leisure

The Company has identified a number of potential acquisitions in the sector and non-binding heads of terms for the first small target have been signed. The due diligence process in respect of this acquisition is reaching its conclusion and legal formalities have commenced.

Assuming the successful completion of this transaction, the Group will be revenue producing for the first time.

Renewable Energy

We remain committed to this sector but, following the restructuring of local government in Greece late in 2010 and the changes to the Renewable Energy legislation, will only take further action when we are confident that the profitability and cash generating properties of the business remain secure.

Financial Results

At 30 September 2010 the book value of the Project was £34,724,932 (30 September 2009: £33,834,082). Expenditure capitalised in the year, while adversely affected by the appreciation of the value of the Euro against Sterling, is in line with the Board's expectations. The nature of the Group's business means that certain expenses, although attributable to the Project in overall terms, have to be written off as incurred. These costs give rise to a loss for the year ended 30 September 2010 of £1,261,386 (year ended 30 September 2009: £919,690), which is also in line with the Board's expectations. The costs include a charge in respect of share based payments in the amount of £535,190 (year ended 30 September 2009: £339,311). The loss per share, including the share based payments charge, was 1.77p (year ended 30 September 2009: 1.68p). The share based payments charge is an accounting charge required by International Financial Reporting Standards and involves no movement of cash. The loss per share excluding this charge is 1.02p (year ended 30 September 2009: 1.06p).

Outlook

Although the Council of State's decision was clearly a disappointment, the Board has been advised that the new Fast Track Law provides a route by which the Project, revised to reflect the decision, can be brought to fruition.

The Board's planned expansion in the Tourism and Leisure sector will be fulfilled by means of a carefully controlled programme of acquisitions that are expected to provide strong cash flows and profit growth to the expanded group.

Conclusion

I and my fellow directors are of the opinion that the changes in Greece together with the opportunities for expansion in the Tourism and Leisure sector provide considerable optimism for the months ahead.

We remain fully committed to the success of the Group and to providing long term value for shareholders and expect to make more announcements in due course.

Thank you all for your ongoing patience and support.

Christopher W Egleton

Chairman

21 February 2011

Consolidated Income Statement

Year ended 30 September 2010

		Year ended 30.09.10                                   £	Year ended  30.09.09                                   £
Revenue		-	-
Cost of sales		-	-
Gross profit		-	-
Operating expenses		(726,247)	(582,016)
Charge in respect of share based payments		(535,190)	(339,311)
Operating loss		(1,261,437)	(921,327)
Finance income		51	1,637
Loss before taxation		(1,261,386)	(919,690)
Taxation expense		-	-
Loss for year  attributable to equity holders of the Company		(1,261,386)	(919,690)
Loss per share attributable to equity holders of
the Company		(1.77)p	(1.68)p
Loss per share attributable to equity holders of
the Company (excluding the charge in respect of
share based payments)		(1.02)p	(1.06)p

All of the above arises from continuing activities.

Statement of Changes in Equity

Year ended 30 September 2010

 

	Share capital £	Share premium £	Merger reserve £	Retained earnings £	Total equity £
Balance at 1 October 2009	13,635,113	20,055,643	9,348,724	(8,395,289)	34,644,191
Loss for the year	-	-	-	(1,261,386)	(1,261,386)
Net proceeds from shares issued	132,808	1,700,156	-	-	1,832,964
Share based payments	-	-	-	535,190	535,190
Balance at 30 September 2010	13,767,921	21,755,799	9,348,724	(9,121,485)	35,750,959

   

    Year ended 30 September 2009

 

	Share capital £	Share premium £	Merger Reserve £	Retained earnings £	Total equity £
Balance at 1 October 2008	13,578,674	19,181,032	9,348,724	(7,814,910)	34,293,520
Loss for the year	-	-	-	(919,690)	(919,690)
Net proceeds from shares issued	56,439	874,611	-	-	931,050
Share based payments	-	-	-	339,311	339,311
Balance at 30 September 2009	13,635,113	20,055,643	9,348,724	(8,395,289)	34,644,191

 

Consolidated Balance Sheet as at 30 September 2010

		30.09.10 £	30.09.09 £
Assets
Non-current assets
Intangible assets		3,572,776	3,572,776
Property, plant and equipment		173,809	183,593
Total non-current assets		3,746,585	3,756,369
Current assets
Inventories		34,724,932	33,834,082
Receivables		38,122	36,526
Cash and cash equivalents		71,280	137,869
Total current assets		34,834,334	34,008,477
Total assets		38,580,919	37,764,846
Equity
Share capital		13,767,921	13,635,113
Share premium account		21,755,799	20,055,643
Merger reserve account		9,348,724	9,348,724
Retained earnings		(9,121,485)	(8,395,289)
Total equity		35,750,959	34,644,191
Liabilities
Current liabilities		2,829,960	3,120,655
Total liabilities		2,829,960	3,120,655
Total equity and liabilities		38,580,919	37,764,846

These financial statements were approved and authorised for issue by the Board of Directors on 21 February 2011.                                  

Signed on behalf of the Board of Directors

C W Egleton

Director

Consolidated Cash Flow Statement

Year ended 30 September 2010

		Year ended 30.09.10 £	Year ended 30.09.09 £
Cash flows from operating activities
Net cash used in continuing operations		(1,334,009)	(1,112,041)
Net cash used in operating activities		(1,334,009)	(1,112,041)
Cash flows from investing activities
Purchase of property, plant and equipment - net		(3,732)	(1,176)
Net cash used in investing activities		(3,732)	(1,176)
Cash flows from financing activities
Interest received		51	1,637
Net proceeds from the issue of ordinary shares		1,271,101	674,250
Net cash generated from financing activities		1,271,152	675,887
Net decrease in cash		(66,589)	(437,330)
Cash at beginning of year		137,869	575,199
Cash at end of year		71,280	137,869

Notes to the preliminary results

Year ended 30 September 2010

1. General information

The Company is a public limited company incorporated in England and Wales and quoted on AIM. The Company's principal activity in the year under review was that of a holding and management company of a Group involved in the design, creation, development and management of environmentally friendly luxury resorts. During the year the Group also commenced the implementation of its policy to expand further in the tourism and leisure sector and is intending to provide a broad range of services including, inter alia, transportation, accommodation and leisure services.

2. Basis of preparation

These consolidated financial statements are prepared in accordance with EU adopted International Financial Reporting Standards ("IFRS") and IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.  

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the periods represented, unless otherwise stated.

Going concern

The financial statements have been prepared on the going concern basis.

The directors have considered the financial and commercial position of the Group in relation to its Project in Crete and, in particular, have reviewed the matters referred to below.

In December 2010 the Greek Council of State reached a decision relating to the Cavo Sidero Project. This decision was enlightening as to the form of tourism development that may be created in this area. In this way, although the decision annulled the Greek Government's approval of the Cavo Sidero Project as approved in 2007, the Directors now believe they will be able to realise their goal of developing a world class tourism project, taking into account the ruling of the Court.

The Company will apply to enter the new permitting process approved by the Greek Government regarding strategic investments planned in the country, known as the Fast Track Law. The purpose of this law is to expedite the planning process for projects which the government considers to be environmentally appropriate and which will, inter alia, strengthen the Greek economy, create employment and introduce novel technologies. The Company has recently been advised by its Athens based legal team and planning consultants that the Project, if amended to reflect the factors set out in the Council of State decision, would meet all the published criteria of the Fast Track Law

.

As has been the case in the past, the Group continues to raise capital in order to meet its existing working capital requirements. The Group is currently involved in discussions with its financial advisers and potential providers of finance. In the light of these discussions, the directors consider that the necessary funds will be raised as required.

Having taken these matters into account, the directors consider that the going concern basis of preparation of the financial statements is appropriate.

The financial statements do not include any adjustment that would be required if the Company was unable to continue as a going concern.

Notes to the preliminary results (continued)

Year ended 30 September 2010

3. Charge in respect of share based payments

The Group has a Long Term Incentive Plan ("LTIP") in which any director or employee selected by the remuneration committee may participate. Awards under the LTIP have been granted on the basis that certain performance conditions will be met.

The Company has also granted options to purchase Ordinary Shares of 1p each.

A charge has been made in respect of the LTIP and options using the Black-Scholes and Monte Carlo pricing models as appropriate and charged over the vesting periods. This charge, shown as a charge in respect of share based payments in the consolidated income statement, does not involve any cash payment.

4. Loss per share attributable to the equity holders of the Company

Earnings per share are calculated by dividing the earnings attributable to the equity holders of a company by the weighted average number of ordinary shares in issue during the period. Diluted earnings per share are calculated by adjusting basic earnings per share to assume the conversion of all dilutive potential ordinary shares. In the case of losses however, these shares are antidilutive and as such they are ignored in calculating diluted loss per share. Therefore the basic loss per share and diluted loss per share are the same. The weighted average number of shares used in calculating basic and diluted loss per share for the year ended 30 September 2010 was 71,458,212 (year ended 30 September 2009: 54,858,945).

5. Goodwill

IFRS require that goodwill be tested annually for impairment and not amortised. In the Group's case, the requirement to amortise goodwill ceased with effect from 31 March 2006. The directors have considered the current value of the land and the progress of the Project and are of the opinion that the project site has longer term value in excess of the value of both goodwill and inventories.

 

END

 

 

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