Interim Results
Provexis PLC
19 November 2007
PROVEXIS plc
('Provexis' or the 'Company')
UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2007
Provexis plc (PXS.L), the life-science business that discovers, develops and
licenses scientifically-proven functional food, medical food and dietary
supplement technologies, announces its unaudited interim results for the six
months ended 30 September 2007.
Key highlights
•Strategy refocused on discovery, development and licensing of functional
food, medical food and dietary supplement technologies.
•Collaboration Agreement with Unilever to develop advanced format of
Fruitflow(R) heart-health technology extended for a further 12 months.
•Exclusive technology assessment agreement signed with The Coca-Cola
Company to assess the feasibility of the launch of a beverage product
containing Fruitflow(R).
•Sirco(R) juice brand exited and asset transferred to a third-party.
•Cash burn significantly reduced as part of this restructuring.
•Research and development team strengthened further, in addition to
capital investment in key analytical technology.
Key financial results
•Adjusted loss before interest, share compensation expense and tax of
£753,000 (2006: loss of £1,374,000).
•Cash balance £1.085m (2006: £1.007m).
•Loss per share from continuing operations 0.17p (2006: 0.30p).
Stephen Moon, Chief Executive Officer of Provexis plc, commented:
'Since announcing our intention to focus the business on discovery, development
and licensing in May 2007, we have made strong progress by exiting the Sirco(R)
juice brand and significantly reducing cash burn. Our new assessment agreement
with The Coca-Cola Company and extended exclusivity agreement with Unilever
endorse the strong credentials of our Fruitflow(R) heart-health technology. We
continue to develop further potential partners for the technology in dietary
supplements and certain food formats, in addition to developing new claims in
the areas of deep vein thrombosis and metabolic syndrome. Our patented Crohn's
Disease technology is now entering human trials, with a full clinical trial
commencing in January. We have invested significant effort into identifying
potential technology acquisitions for our pipeline and expect to report further
progress in the coming weeks.'
-ends-
For further information please contact:
Stephen Moon, Chief Executive
Provexis plc Tel: 020 8392 6631
Tom Griffiths/Alasdair Younie Tel: 020 7012 2000
Arbuthnot Securities
Chris Steele / Tarquin Edwards
Adventis Financial PR Tel: 020 7034 4759 / 58
Chairman's statement
At our Annual General Meeting on 24 July 2007 I announced the Company would
focus its strategy on the discovery, development and licensing of
scientifically-proven functional food, medical food and dietary supplement
technologies.
The management team has made very good progress in implementing this strategy,
exiting the Sirco(R) juice brand in July, with a resultant significant reduction
in cash burn.
In pursuit of our licensing strategy, focusing on four key areas we have made
great strides in identifying potential major partners. Our first step forward
came in May with an agreement with Unilever. Subsequently we have entered into
an exclusivity agreement for our Fruitflow(R) heart-health technology with The
Coca-Cola Company for beverages. This has underpinned our progress towards
licensing revenues and given considerable validation to the potential for our
research. Several other initiatives to secure Fruitflow(R) partners in the areas
of deep vein thrombosis, dietary supplements and certain food and dairy formats
are also progressing well.
Our patented technology for the treatment of Crohn's Disease patients is now in
healthy human trial and a two-centre clinical trial will commence in January.
The research team continues to seek opportunities to extend the claims areas for
our Fruitflow(R), with deep vein thrombosis and metabolic syndrome being key
scientific investigation areas.
The team have carried out an extensive screening exercise to identify potential
new technologies to add to our pipeline, as we believe an acquisition will
significantly enhance shareholder value in the medium term.
The business has made good progress in the last six months and I believe this
positive trend will continue during the remainder of the year, as the management
team continue to implement our focused discovery, development and licensing
strategy.
Dawson Buck
Chairman
Chief Executive's statement
Strategy and management structure
Since a thorough business review in May of this year, the management team has
implemented a strategy of focusing on the discovery, development and licensing
of scientifically-proven functional food, medical food and dietary supplement
technologies.
A key step was to exit the Sirco(R) juice brand in July and we have subsequently
transferred the brand to a third-party, together with a non-exclusive licence
for Fruitflow(R). The research and development team has been strengthened with
the addition of two highly-qualified new members, while capital investment in
analytical equipment has extended our research capability. Overall, cash burn
has been significantly reduced.
We have conducted a thorough global screening exercise in order to identify new
technologies for our development pipeline and are pleased to have developed a
short-list of candidates which we expect to progress over coming weeks.
Discussions are currently underway with international potential strategic
partners in the ingredients industry in order to provide us with large-scale
manufacturing capability, access to extended sales and marketing capability and
potential acceleration of our research activities through joint ventures.
I was pleased to welcome Ian Ford as Finance Director in July and his broad
financial and commercial experience has resulted in a strengthening of the
management team.
Fruitflow licensing
Our collaboration with Unilever has made good progress on the development of an
advanced, concentrated format of Fruitflow(R) and a successful human trial on
the new format in May was an important milestone. We have now extended the
exclusivity agreement with Unilever for the global spreads market for a further
12 months. Over the next months, our development team will incorporate the
concentrated format into an application for spreads.
We entered into a 12 month period of exclusivity for the beverages market with
The Coca-Cola Company recently, as part of a technology assessment agreement.
During the period of the agreement the parties will carry out a programme of
work including consumer testing, commercial assessment and finalising regulatory
approval in a range of territories. Subject to positive results in these areas,
the parties intend to proceed to a licensing agreement during the period of
exclusivity.
We have transferred the rights to the Sirco(R) brand, together with a
non-exclusive license of Fruitflow(R) for the UK market, to Multiple Marketing
Limited, which is part of the group of companies that owns the Eat Natural
cereal bar brand and Sunmagic fruit juices. Multiple Marketing expect to
relaunch the brand in major retailers early in 2008. The granting of this
non-exclusive license has been agreed with The Coca-Cola Company as part of
their broader international rights to exclusivity.
The research team are implementing a development plan to further our patented
deep vein thrombosis claim for Fruitflow(R) and human trials will commence in
2008 to underpin this. Work will also commence on developing claims in the area
of metabolic syndrome during 2008. Metabolic syndrome is estimated to affect 50
million US citizens and as such the area represents a significant opportunity.
Pipeline
A healthy human trial on our patented technology for the treatment of Crohn's
Disease has commenced and will conclude in January 2008. A full clinical trial
on Crohn's Disease patients will commence at two centres in Liverpool in January
2008 and will run for approximately 12 months.
We are carrying out further due diligence on promising technologies identified
at various universities and research institutes in recent months. Subject to the
due diligence and being able to agree appropriate commercial terms, we expect to
add at least one technology to our pipeline in this financial year.
Outlook
The outlook for the business is promising, given the quality of our current
Fruitflow(R) partners and potential strategic partners in manufacturing, selling
and marketing the technology. Moving a second technology into clinical trial
will represent another important step in developing shareholder value, while the
potential addition of further technologies will further enhance the longer term
prospects.
Stephen Moon
Chief Executive
Finance Director's statement
From 1 April 2007 Provexis plc and its subsidiary companies (the 'Group') have
adopted International Financial Reporting Standards (IFRS) accounting policies,
the date of IFRS transition being 1 April 2006.
This is the first set of results announced under IFRS and prior period
comparatives have been restated.
The most significant IFRS adjustments for the Group are:
• Under IFRS 3 Business Combinations, goodwill is subject to impairment
reviews and is not amortised This reduced the reported loss before taxation
for the year ended 31 March 2007 by £484,000 (£242,000 reduction in loss for
the six months ended 30 September 2006).
• Under IAS 38 Intangible Assets, development expenditure which meets the
recognition criteria of the standard is capitalised and amortised on a
straight-line basis over the useful economic lives of intangible assets from
product launch. Previously under UK GAAP all development expenditure was
expensed. Development expenditure of £18,000 was capitalised over the six
months ended 30 September 2007 (£NIL for the six months ended 30 September
2006 and £NIL for the year ended 31 March 2007).
• Under IFRS 5 Non-current Assets Held for Sale and Discontinued
Operations, the exit of the Sirco(R) juice brand has been treated as a
discontinued operation in the Income Statement for the current and prior
periods.
Further details of the Group's transition to IFRS are shown in notes 2, 6 and 7
to the interim results.
The operating loss from continuing operations for the six months ended 30
September 2007 was £686,000 (2006: restated operating loss from continuing
operations £691,000) and the loss per share from continuing operations was 0.17p
(2006, restated: 0.30p).
The overall loss from continuing and discontinued operations for the six months
ended 30 September 2007 was £791,000, a significant reduction relative to the
prior period comparative (six months ended 30 September 2006, restated:
£1,503,000). The loss per share for the six month period from continuing and
discontinued operations fell to 0.20p per share in 2007, from 0.60p per share in
2006.
On 12 April 2007 the Company raised £2,150,000 gross from a new share placing to
new shareholders, existing substantial shareholders and non-executive directors.
The net proceeds were £1,861,000 after the repayment of the short term bridging
loan and share issue costs.
The restructuring in April 2007 and the Company's exit from the Sirco(R) juice
brand in July 2007 have led to a considerable reduction in the Group's cost
base, and monthly trading losses have been reduced accordingly. The Group's
trading results continue to be monitored very closely and the Group's resources
and discretionary expenditure are tightly managed.
The Directors are of the opinion that at 19 November 2007, the Company's
liquidity and capital resources are adequate to deliver the current strategic
objectives and 2008 business plan and that the Company meets Going Concern
criteria.
Cash at bank at 30 September 2007 was £1.085m (30 September 2006: £1.007m).
Ian Ford
Finance Director
Group income statement Restated Restated
Six months ended 30 September 2007 Unaudited Unaudited Audited
6 months 6 months Year
Ended ended ended
30-Sep-07 30-Sep-06 31-Mar-07
Notes £ £ £
Continuing operations
Revenue 60,936 66,653 66,653
Cost of sales (19,170) - -
------------ ------------ ------------
Gross profit 41,766 66,653 66,653
Research and development (181,987) (205,981) (295,234)
Other administrative costs (483,075) (489,944) (1,141,912)
Share option costs (62,959) (62,099) (118,619)
------------ ------------ ------------
Administrative costs (728,021) (758,024) (1,555,765)
------------ ------------ ------------
Operating loss (686,255) (691,371) (1,489,112)
Finance income 26,284 23,223 28,435
Finance costs (1,250) (90,000) (90,000)
------------ ------------ ------------
Loss before taxation from (661,221) (758,148) (1,550,677)
continuing operations
Taxation - - -
------------ ------------ ------------
Loss for the period from continuing (661,221) (758,148) (1,550,677)
operations
Discontinued operation
Loss from discontinued operation (129,348) (744,984) (898,979)
------------ ------------ ------------
Loss for the period (790,569) (1,503,132) (2,449,656)
======= ======= =======
Attributable to:
Equity holders of the parent (768,549) (1,503,132) (2,437,855)
Minority interests (22,020) - (11,801)
------------ ------------ ------------
(790,569) (1,503,132) (2,449,656)
======= ======= =======
Loss per share from continuing and
discontinued operations
Basic and diluted - pence 5 0.20 0.60 0.97
======= ======= =======
Loss per share from continuing
operations
Basic and diluted - pence 5 0.17 0.30 0.61
======= ======= =======
Restated Restated
Group balance sheet
30 September 2007 Unaudited Unaudited Audited
30-Sep-07 30-Sep-06 31-Mar-07
£ £ £
Non-current assets
Goodwill 6,902,013 6,902,013 6,902,013
Other intangible assets - development 18,002 - -
costs
Plant and equipment 34,244 15,846 12,607
------------ ------------ ------------
6,954,259 6,917,859 6,914,620
Current assets
Inventories 19,345 50,870 38,466
Trade and other receivables 307,331 347,758 378,626
Cash and cash equivalents 1,084,910 1,007,483 115,824
------------ ------------ ------------
1,411,586 1,406,111 532,916
Current liabilities
Trade and other payables (377,691) (825,405) (738,975)
Borrowings - short term bridging loan - - (100,000)
------------ ------------ ------------
(377,691) (825,405) (838,975)
------------ ------------ ------------
Net assets 7,988,154 7,498,565 6,608,561
======= ======= =======
Equity
Called up share capital 4,017,244 2,510,386 2,510,386
Share premium account 5,992,212 5,391,867 5,391,867
Other reserves 6,273,909 6,273,909 6,273,909
Retained earnings - share option 1,053,522 934,043 990,563
reserve
Retained earnings - other (9,300,280) (7,597,008) (8,531,731)
------------ ------------ ------------
Equity attributable to equity holders 8,036,607 7,513,197 6,634,994
of the parent
Minority interests (48,453) (14,632) (26,433)
------------ ------------ ------------
Total equity 7,988,154 7,498,565 6,608,561
======= ======= =======
Restated Restated
Group cash flow statement
Six months ended 30 September 2007 Unaudited Unaudited Audited
6 months 6 months Year
ended ended ended
30-Sep-07 30-Sep-06 31-Mar-07
£ £ £
Loss for the financial period (790,569) (1,503,132) (2,449,656)
Net finance costs (25,034) 66,777 61,565
Depreciation of property, plant and 5,617 796 4,035
equipment
Share option charge 62,959 62,099 118,619
Operating cash flows before movements in ------------ ------------ ------------
working capital and provisions (747,027) (1,373,460) (2,265,437)
Changes in inventories 19,121 (32,907) (20,503)
Changes in receivables 172,156 206,344 175,476
Changes in payables (361,284) 18,165 (68,265)
------------ ------------ ------------
Net cash outflow from operating (917,034) (1,181,858) (2,178,729)
activities
------------ ------------ ------------
Cash flows from investing activities
Purchase of property, plant and equipment (27,254) (125) (125)
Purchase of intangible assets (18,002) - -
Interest received 26,284 23,223 28,435
------------ ------------ ------------
Net cash used in investing activities (18,972) 23,098 28,310
------------ ------------ ------------
Cash flows from financing activities
Proceeds from issue of share capital 2,149,750 - -
Expenses paid on share issue (188,283) - -
Proceeds from exercise of share options 44,875 - -
Gross (repayment of) / increase in (100,000) - 100,000
borrowings
Interest paid (1,250) - -
------------ ------------ ------------
Net cash from financing activities 1,905,092 - 100,000
------------ ------------ ------------
------------ ------------ ------------
Net increase / (decrease) in cash and 969,086 (1,158,760) (2,050,419)
cash equivalents
Opening cash and cash equivalents 115,824 2,166,243 2,166,243
------------ ------------ ------------
Closing cash and cash equivalents 1,084,910 1,007,483 115,824
======= ======= =======
Group statement Other Total equity
of changes in
equity
30 September reserves Retained earnings attributable
2007
to equity
Share Share Merger Share option Retained holders of Minority Total
capital premium reserve reserve earnings the parent interests
£ £ £ £ £ £ £ £
At 1 April 2006 2,500,010 5,312,243 6,273,909 871,944 (6,093,876) 8,864,230 (14,632) 8,849,598
Share based - - - 62,099 - 62,099 - 62,099
charges
Issue of shares 10,376 79,624 - - - 90,000 - 90,000
- SEDA
implementation
fee
Loss for the - - - - (1,503,132) (1,503,132) - (1,503,132)
period
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase / 10,376 79,624 - 62,099 (1,503,132) (1,351,033) - (1,351,033)
(decrease)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
At 30 September 2,510,386 5,391,867 6,273,909 934,043 (7,597,008) 7,513,197 (14,632) 7,498,565
2006 - restated
Share based - - - 56,520 - 56,520 - 56,520
charges
Loss for the - - - - (934,723) (934,723) (11,801) (946,524)
period
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase / - - - 56,520 (934,723) (878,203) (11,801) (890,004)
(decrease)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
At 31 March 2,510,386 5,391,867 6,273,909 990,563 (8,531,731) 6,634,994 (26,433) 6,608,561
2007 - restated
Share based - - - 62,959 - 62,959 - 62,959
charges
Issue of shares 1,433,166 528,301 - - - 1,961,467 - 1,961,467
- placing 12
April 2007
Issue of shares 73,692 72,044 - - - 145,736 - 145,736
- exercise of
share options
Loss for the - - - - (768,549) (768,549) (22,020) (790,569)
period
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Net increase / 1,506,858 600,345 - 62,959 (768,549) 1,401,613 (22,020) 1,379,593
(decrease)
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
At 30 September 4,017,244 5,992,212 6,273,909 1,053,522 (9,300,280) 8,036,607 (48,453) 7,988,154
2007
======= ======= ======= ======= ======= ======= ======= =======
1. Basis of preparation
Provexis plc has previously prepared Group financial statements in accordance
with UK Generally Accepted Accounting Practice ('UK GAAP'). From 1 April 2007
the Group is required to prepare its consolidated financial statements under
International Accounting Standards and International Financial Reporting
Standards (collectively 'IFRS') as adopted by the European Union ('EU'). The
Group's date of transition to IFRS is 1 April 2006 being the start of the
previous period that has been presented as comparative information.
The financial information presented in this document has been prepared on the
basis of the IFRS in issue that are either endorsed by the EU and effective at
31 March 2008 or are expected to be endorsed before the financial statements are
approved and authorised for issue. Based on these adopted and unadopted IFRS,
the directors have made assumptions about the accounting policies expected to be
applied when the first annual IFRS statements are prepared for the year ended 31
March 2008. In addition, the adopted IFRS that will be effective in the annual
financial statements for the year ending 31 March 2008 are still subject to
change and to additional interpretations and therefore can not be determined
with certainty. Accordingly, the accounting policies for that annual period will
be determined finally only when the annual financial statements for the Group
are prepared for the year ending 31 March 2008.
The Interim Statement does not constitute statutory accounts as defined in
section 240 of the Companies Act 1985 and has neither been audited nor reviewed
by the Company's auditors BDO Stoy Hayward LLP pursuant to guidance issued by
the Auditing Practices Board. The comparatives for the full year ended 31 March
2007 are not the Company's full statutory accounts for that year. A copy of the
statutory accounts for that year, which were prepared under UK GAAP, has been
delivered to the Registrar of Companies. The auditors' report on those accounts
was unqualified and did not contain a statement under Section 237(2)-(3) of the
Companies Act 1985.
2. Implementation of IFRS
In implementing the transition to IFRS, the Group has followed the requirements
of IFRS 1 First Time Adoption of International Financial Reporting Standards,
which in general requires IFRS accounting policies to be applied fully
retrospectively in deriving the opening balance sheet at the date of transition.
IFRS 1 contains certain mandatory exceptions and some optional exemptions to
this principal of retrospective application. Where the Group has taken advantage
of the exemptions they are noted below. The adoption of IFRS represents an
accounting change only and does not affect the operations or cash flow of the
Group. The principal areas of impact are described below.
Goodwill and Business Combinations
The Group has elected to take the exemption not to apply IFRS 3 retrospectively
to business combinations occurring prior to the date of transition to IFRS.
Under IFRS 3 Business Combinations and IAS 38 Intangible Assets goodwill is not
amortised, but it is subject to an annual impairment review. As the Group has
elected not to apply IFRS 3 retrospectively to business combinations prior to 1
April 2006 the original UK GAAP goodwill balance at 1 April 2006 (£6.902m) has
been included in the opening IFRS consolidated balance sheet and is no longer
amortised, but continues to be subject to impairment reviews. The goodwill
amortisation charge previously calculated under UK GAAP has been credited to the
profit and loss account. Under IAS 38 the Group is required to amortise
intangible fixed assets over their estimated useful lives.
IFRS 1 First-time Adoption of International Financial Reporting Standards
requires that an annual impairment review of goodwill is conducted in accordance
with IAS 36 Impairment of Assets at the date of transition, irrespective of
whether there is an indication of impairment. The directors conducted impairment
reviews at the date of transition and at 31 March 2007 and concluded that no
impairments were necessary.
Research and development (IAS 38)
Research expenditure is recognised in the income statement in the year in which
it is incurred.
Development expenditure is recognised in the income statement in the year in
which it is incurred unless it meets the recognition criteria of IAS 38
Intangible Assets. Regulatory and other uncertainties generally mean that such
criteria are not met. Where, however the recognition criteria are met,
intangible assets are capitalised and amortised on a straight-line basis over
their useful economic lives from product launch. This policy is in line with
industry practice. Previously under UK GAAP all development expenditure was
expensed.
Employee benefits (IAS 19)
The Group has complied with the provisions of IAS 19 and has accrued holiday pay
for all staff from the date of transition.
Reconciliations to previously presented financial statements are set out in note
6 and 7.
The IFRS conversion statements have neither been audited nor reviewed by the
Company's auditors BDO Stoy Hayward LLP.
3. Taxation
Based on the results of the Group there is no tax charge / (credit) for the
period.
4. Going concern
The Directors are of the opinion that at 19 November 2007, the Company's
liquidity and capital resources are adequate to deliver the current strategic
objectives and 2008 business plan and that the Company meets Going Concern
criteria, as further detailed in the Finance Director's statement.
The Group accounts have been prepared on the basis of going concern as it is
considered the Group will continue in business for the foreseeable future.
Note 5 Restated Restated
Loss per share Unaudited Unaudited Audited
6 months 6 months Year
Ended ended ended
30-Sep-07 30-Sep-06 31-Mar-07
Basic and diluted loss per share amounts
are calculated by
dividing the loss attributable to equity
holders of the parent by
the weighted average number of ordinary
shares in issue during
the period.
There are 34,903,715 share options in
issue that are currently
anti-dilutive.
Loss for the period - £
Continuing operations 639,201 758,148 1,538,876
Discontinued operation 129,348 744,984 898,979
------------ ------------ ------------
768,549 1,503,132 2,437,855
======= ======= =======
Weighted average number of shares 389,044,958 250,561,393 250,765,567
========= ========= =========
Basic and diluted loss per share - pence
Continuing operations 0.17 0.30 0.61
Discontinued operation 0.03 0.30 0.36
------------ ------------ ------------
Total 0.20 0.60 0.97
======= ======= =======
Note 6 (i) Reported
Year ended 31 March 2007 under Reclassification Effect of
Reconciliation of loss from UK of discontinued transition
UK GAAP to IFRS
IFRS GAAP activities to IFRS IFRS
notes £ £ £ £
Continuing operations
Revenue 804,884 (738,231) - 66,653
Cost of sales (403,837) 403,837 - -
------------ ------------ ------------ ------------
Gross profit 401,047 (334,394) - 66,653
Distribution costs (63,994) 63,994 - -
Research and development (295,234) - - (295,234)
Other administrative costs a (2,795,691) 1,169,379 484,400 (1,141,912)
Share option costs (118,619) - - (118,619)
------------ ------------ ------------ ------------
Administrative costs (3,273,538) 1,233,373 484,400 (1,555,765)
------------ ------------ ------------ ------------
Operating loss (2,872,491) 898,979 484,400 (1,489,112)
Finance income 28,435 - - 28,435
Finance costs (90,000) - - (90,000)
------------ ------------ ------------ ------------
Loss before taxation from (2,934,056) 898,979 484,400 (1,550,677)
continuing operations
Taxation - - - -
------------ ------------ ------------ ------------
Loss for the period from (2,934,056) 898,979 484,400 (1,550,677)
continuing operations
Discontinued operation
Loss from discontinued - (898,979) - (898,979)
operation
------------ ------------ ------------ ------------
Loss for the period (2,934,056) - 484,400 (2,449,656)
======= ======= ======= =======
Loss reported under previous (2,934,056)
UK GAAP
Goodwill amortisation 484,400
------------
Total loss reported under (2,449,656)
IFRS
=======
Note 6 (ii) Reported
Six months ended 30 September under Reclassification Effect of
2006
Reconciliation of loss from UK of discontinued transition
UK GAAP to IFRS
IFRS GAAP activities to IFRS IFRS
notes £ £ £ £
Continuing operations
Revenue 428,277 (361,624) - 66,653
Cost of sales (194,746) 194,746 - -
------------ ------------ ------------ ------------
Gross profit 233,531 (166,878) - 66,653
Distribution costs (33,513) 33,513 - -
Research and development (205,981) - - (205,981)
Other administrative costs a (1,610,469) 878,349 242,176 (489,944)
Share option costs (62,099) - - (62,099)
------------ ------------ ------------ ------------
Administrative costs (1,912,062) 911,862 242,176 (758,024)
------------ ------------ ------------ ------------
Operating loss (1,678,531) 744,984 242,176 (691,371)
Finance income 23,223 - - 23,223
Finance costs (90,000) - - (90,000)
------------ ------------ ------------ ------------
Loss before taxation from (1,745,308) 744,984 242,176 (758,148)
continuing operations
Taxation - - - -
------------ ------------ ------------ ------------
Loss for the period from (1,745,308) 744,984 242,176 (758,148)
continuing operations
Discontinued operation
Loss from discontinued - (744,984) - (744,984)
operation
------------ ------------ ------------ ------------
Loss for the period (1,745,308) - 242,176 (1,503,132)
======= ======= ======= =======
Loss reported under previous (1,745,308)
UK GAAP
Goodwill amortisation 242,176
------------
Total loss reported under (1,503,132)
IFRS
=======
Note 7 (i) Effect of
1 April 2006 UK transition
Reconciliation of equity from UK GAAP to GAAP to IFRS IFRS
IFRS
£ £ £
Non-current assets
Goodwill 6,902,013 - 6,902,013
Other intangible assets - development costs - - -
Plant and equipment 16,517 - 16,517
------------ ------------ ------------
6,918,530 - 6,918,530
Current assets
Inventories 17,963 - 17,963
Trade and other receivables 554,102 - 554,102
Cash and cash equivalents 2,166,243 - 2,166,243
------------ ------------ ------------
2,738,308 - 2,738,308
Current liabilities
Trade and other payables (807,240) - (807,240)
------------ ------------ ------------
(807,240) - (807,240)
------------ ------------ ------------
Net assets 8,849,598 - 8,849,598
======= ======= =======
Equity
Called up share capital 2,500,010 - 2,500,010
Share premium account 5,312,243 - 5,312,243
Other reserves 6,273,909 - 6,273,909
Retained earnings - share option reserve 871,944 - 871,944
Retained earnings - other (6,093,876) - (6,093,876)
------------ ------------ ------------
Equity attributable to equity holders of 8,864,230 - 8,864,230
the parent
Minority interests (14,632) - (14,632)
------------ ------------ ------------
Total equity 8,849,598 - 8,849,598
======= ======= =======
Note 7 (ii) Effect of
30 September 2006 UK transition
Reconciliation of equity from UK GAAP IFRS GAAP to IFRS IFRS
to IFRS
notes £ £ £
Non-current assets
Goodwill a 6,659,837 242,176 6,902,013
Other intangible assets - development - - -
costs
Plant and equipment 15,846 - 15,846
------------ ------------ ------------
6,675,683 242,176 6,917,859
Current assets
Inventories 50,870 - 50,870
Trade and other receivables 347,758 - 347,758
Cash and cash equivalents 1,007,483 - 1,007,483
------------ ------------ ------------
1,406,111 - 1,406,111
Current liabilities
Trade and other payables (825,405) - (825,405)
------------ ------------ ------------
(825,405) - (825,405)
------------ ------------ ------------
Net assets 7,256,389 242,176 7,498,565
======= ======= =======
Equity
Called up share capital 2,510,386 - 2,510,386
Share premium account 5,391,867 - 5,391,867
Other reserves 6,273,909 - 6,273,909
Retained earnings - share option 934,043 - 934,043
reserve
Retained earnings - other (7,839,184) 242,176 (7,597,008)
------------ ------------ ------------
Equity attributable to equity holders 7,271,021 242,176 7,513,197
of the parent
Minority interests (14,632) - (14,632)
------------ ------------ ------------
Total equity 7,256,389 242,176 7,498,565
======= ======= =======
Note 7 (iii) Effect of
31 March 2007 UK transition
Reconciliation of equity from UK GAAP IFRS GAAP To IFRS IFRS
to IFRS
notes £ £ £
Non-current assets
Goodwill a 6,417,613 484,400 6,902,013
Other intangible assets - development - - -
costs
Plant and equipment 12,607 - 12,607
------------ ------------ ------------
6,430,220 484,400 6,914,620
Current assets
Inventories 38,466 - 38,466
Trade and other receivables 378,626 - 378,626
Cash and cash equivalents 115,824 - 115,824
------------ ------------ ------------
532,916 - 532,916
Current liabilities
Trade and other payables (738,975) - (738,975)
Borrowings - short term bridging loan (100,000) - (100,000)
------------ ------------ ------------
(838,975) - (838,975)
------------ ------------ ------------
Net assets 6,124,161 484,400 6,608,561
======= ======= =======
Equity
Called up share capital 2,510,386 - 2,510,386
Share premium account 5,391,867 - 5,391,867
Other reserves 6,273,909 - 6,273,909
Retained earnings - share option 990,563 - 990,563
reserve
Retained earnings - other (9,016,131) 484,400 (8,531,731)
------------ ------------ ------------
Equity attributable to equity holders 6,150,594 484,400 6,634,994
of the parent
Minority interests (26,433) - (26,433)
------------ ------------ ------------
Total equity 6,124,161 484,400 6,608,561
======= ======= =======
IFRS notes
Note a
Under IAS 38 goodwill is not amortised and so goodwill
previously amortised under UK GAAP is reversed. Instead,
impairment must be considered.
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