Interim Results
Zareba PLC
23 March 2006
Zareba Plc ('Zareba' or 'the Company'
Interim results for the six months ended 31 December 2005
CHAIRMAN'S STATEMENT
The Company announces its results for the six months ended 31 December 2005,
which show a loss for the period of £123,000 and total assets of £1.28 million.
Zareba has also announced today that it has conditionally agreed to acquire
Quadrise International Limited. Full details of the transaction and the future
prospects of the Company are contained in the Admission Document being posted to
shareholders today. An electronic copy of the Admission Document is also
available on the Company's website, www.zarebaplc.com
Brian Moritz
Chairman
22 March 2006
INCOME STATEMENT
6 months Period
ended ended
31 Dec 30 June
Note 2005 2005
£'000 £'000
(unaudited) (unaudited)
General and Administrative expenses (61) (56)
Impairment loss on investments (85) -
----- -----
Operating loss (146) (56)
----- -----
Other interest receivable and similar income 23 17
-
----- -----
Loss from continuing activities before
income tax (123) (39)
----- -----
Income tax credit/(expense) 2 - -
----- -----
Loss from continuing activities (123) (39)
===== =====
Net loss per share:
Basic and diluted (pence) 3 (0.06)p (0.02)p
===== =====
Shares used in net loss per share
calculation
Basic and diluted 3 203,300,000 203,300,000
=========== ===========
BALANCE SHEET
At 31 December 2005
As at As at
31 Dec 30 June
Note 2005 2005
£'000 £'000
(unaudited) (unaudited)
Current assets
Cash and cash equivalents 1,279 1,350
Receivables 3 5
---------- ----------
Total current assets 1,282 1,355
Non-current assets
Investments 4 - 41
---------- ----------
Total non-current assets - 41
Total assets 1,282 1,396
========== ==========
Current liabilities
Other payables 16 7
---------- ----------
Total current liabilities 16 7
---------- ----------
Total liabilities 16 7
Shareholders' equity
Share capital 5 203 203
Share premium account 1,205 1,205
Profit and loss account (162) (39)
Other equity reserves 20 20
---------- ----------
Total shareholders' equity 1,266 1,389
---------- ----------
Total liabilities and shareholders' equity 1,282 1,396
========== ==========
CASH FLOW STATEMENT
6 months Period
Ended ended
31 Dec 30 June
2005 2005
£'000 £'000
(unaudited) (unaudited)
Cash flows from operating activities
Operating loss before working capital changes (146) (56)
Impairment loss 85 -
(Increase) Decrease in receivables 2 (5)
(Decrease) Increase in accounts payable 9 7
---------- ----------
Net cash outflow from operating activities (50) (54)
---------- ----------
Capital expenditure and financial investments
Payments to acquire fixed asset investments (69) (41)
Receipts from disposal of fixed asset investments 25 -
---------- -----------
Net cash used in investing activities (44) (41)
---------- -----------
Cash flows from financing activities
Issue of share capital - 1,583
Costs of issue of share capital - (155)
Interest on cash deposits 23 17
---------- ----------
Net cash inflow from financing 23 1,445
---------- ----------
Net increase (decrease) in cash in the period (71) 1,350
========== ==========
Reconciliation of net cash flow to movement in
funds
Increase (Decrease) in cash in the period (71) 1,350
---------- ----------
Movement in net funds in the period (71) 1,350
Opening net funds 1,350 -
---------- ----------
Closing net funds 1,279 1,350
========== ==========
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
Period ended 31 December 2005
Shares in Share Share Retained Other Total
issue capital Premium earnings reserves
£'000 £'000 £'000 £'000 £'000
Balance on
incorporation 2 - - - - -
Issue of new
shares 203,299,998 203 1,380 - - 1,583
Costs of
issue - - (155) - - (155)
of shares
Fair value of
options - - (20) - 20 -
Loss for the
period - (39) (39)
At 30 June 203,300,000 203 1,205 (39) 20 1,389
2005
Loss for the
period - - - (123) - (123)
At 31
December 203,300,000 203 1,205 (162) 20 1,266
2005
NOTES TO THE INTERIM REPORT
1. Basis of preparation
This interim financial statement is the second such statement prepared by the
Company, which has not yet published statutory financial statements. The
Company's first statutory financial statements will cover the period from
incorporation on 22 October 2004 to 31 March 2006
The financial information relating to the period from incorporation on 22
October 2004 to 30 June 2005 and the six month period ended 31 December 2005 is
unaudited.
The information for the period ended 31 December 2005 has been prepared on the
basis of the accounting policies set out below, which are in accordance with
applicable International Financial Reporting Standards ('IFRS'). The financial
information for the period from incorporation to 30 June 2005 has been restated
on the basis of the accounting policies set out below and in accordance with
IFRS. The effects of the Company's conversion to IFRS are explained in Note 7
below. The statutory financial statements for the Company for the period ending
31 March 2006 with be prepared in accordance with the accounting policies set
out below and with IFRS. The above financial information does not constitute
statutory accounts within the meaning of Section 240 Companies Act 1985.
Use of estimates
The preparation of the financial information in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Net loss per ordinary share
Basic net loss per ordinary share is computed by dividing net loss by the
weighted average number of ordinary shares outstanding in the period.
For the purpose of calculating diluted earnings per share, the net loss
attributable to ordinary shareholders and the weighted average number of shares
outstanding is adjusted for the effects of all dilutive potential ordinary
shares. The effects of anti-dilutive potential ordinary shares are ignored in
calculating diluted earnings per share. Potential ordinary shares are
anti-dilutive when their conversion to ordinary shares would decrease loss per
share from continuing operations.
Fair value of financial instruments
Carrying amounts of certain financial instruments including cash and cash
equivalents, accounts receivable, accounts payable, and accrued expenses
approximate fair value due to their short maturities, based on borrowing rates
currently available to the Company.
Share based payments
Share-based payments are recognised at fair value at the date of grant and the
recognition of liabilities for cash-settled share-based payments at the current
fair value at each balance sheet date.
The fair value of share options issued in the period is measured according to
the estimated market value of the services received in consideration of the
issue of those share options.
Where it is not possible to reliably measure the estimated market value of the
services received in consideration of the issue of those share options, share
options issued in the period are according to the market price of the options or
in accordance with a generally accepted valuation methodology.
Deferred taxation
Deferred tax assets and liabilities are determined based on differences between
financial reporting and tax bases of assets and liabilities, and are measured
using the enacted tax rates and laws that will be in effect when the differences
are expected to reverse. Valuation allowances are recorded for deferred tax
assets that are not more likely that not to be realised.
Deferred tax assets are recognised only to the extent that future taxable profit
will be available such that realisation of the related tax benefit is more
likely than not.
Impairment of tangible and intangible assets
At each balance sheet date a review of carrying amounts is undertaken to
determine whether there is any indication that those assets have suffered
impairment loss. If any such indication exists, the recoverable amount of the
asset is estimated in order to determine the amount of the impairment loss (if
any). Where it is not possible to estimate the recoverable amount of an
individual asset an estimate is made of the recoverable amount of the cash
generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in
use. Estimated future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of the time value
of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to
be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised immediately in profit or loss, unless the relevant asset is
carried at a re-valued amount, in which case the impairment loss is treated as a
revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset
(cash-generating unit) is increased to the revised estimate of its recoverable
amount, but so that the increased carrying amount does not exceed the carrying
amount that would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of an impairment
loss is recognised immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the reversal of the impairment loss
is treated as a revaluation increase.
Cash and cash equivalents
The Company considers all highly liquid investments purchased with an original
maturity of three months or less to be cash equivalents.
2. Income tax credit/expense
The Company has not submitted any computations in respect of income tax. No
provision has been made for income tax in this financial information due to the
likely availability of trading losses at the end of its first statutory period
of account, being the period from incorporation to 31 March 2006.
No deferred tax asset has been recognised in relation to the possible
availability of losses as the Company has yet to reach the conclusion of the
accounting reference period in respect of any claim for such losses and the
realisation of any related tax benefit cannot therefore be said to be more
likely than not.
3. Loss per share
Loss per share is based on the weighted average number of shares in issue during
the period ended 31 December 2005 of 203,300,000 (30 June 2005: 203,300,000).
The weighted average number of shares in issue used in the basic loss per share
calculation for the period ended 30 June 2005 has been restated to reflect the
effect of the conversion to IFRS referred to above.
4. Investments
Fixed asset investments represent investments as follows:
£'000
Cost
On incorporation -
Additions at cost 41
------
30 June 2005 41
Additions at cost 69
Disposal to directors (25)
Impairment loss (85)
------
31 December 2005 -
======
The disposal to directors related to an investment in the early stages of a
South African diamond mining project which, due to the imminent acquisition of
Quadrise International Limited, was considered to be no longer viable as an
ongoing proposition for the Company. The investment was therefore sold to J
Burgess and B Moritz at cost.
Amounts provided for impairment loss relates to a provision made against the
cost of a holding of 10 per cent in a Namibian mineral exploration and mining
project following receipt of a competent person's report which deemed the
project to have a significantly lower value than previously expected. The Board
agreed to relinquish the Company's rights in relation to the investment in
return for the cancellation of the Company's commitments to future funding of
the project under the investment agreement.
5. Share capital
2005
£'000
Authorised:
1,000,000,000 ordinary shares of £0.001 each 1,000
=======
2005
£'000
Allotted, issued and fully paid:
203,300,000 ordinary shares of £0.001 each 203
=====
On Admission to AIM on 14 February 2005 the Company granted options to its
professional advisers to subscribe for 9,000,000 ordinary shares at 1p per share
at any time up to the fifth anniversary of Admission. No adjustment has been
made to basic earnings per share for the purpose of calculating diluted earnings
per share because the effect of including the 9,000,000 outstanding share
options referred to above would be to further dilute the net loss. There were
9,000,000 share options outstanding at 31 December 2005, with a weighted average
exercise price of 1p per share.
6. Post Balance Sheet Events
Subsequent to the balance sheet date, the Company announced that it had entered
into an agreement to acquire the entire issued share capital of Quadrise
International Limited for aggregate consideration of £45 million, to be
satisfied by the issue of new ordinary shares in the Company. The Company also
announced a placing of new ordinary shares at 1.75 to 2.0 pence per share to
raise a minimum of £12.1 million before costs of the issue to be used to fund
£4.5 million of acquisition costs and to provide working capital to support the
growth and development of the enlarged group.
7. Effects of transition to IFRS
a) The financial information for the period ended 30 June 2005 has been restated
to comply with IFRS. Asummary of the adjustments required is set out below.
UK GAAP Effect of IFRS
(unaudited) transition (unaudited)
£'000 £'000 £'000
Current assets
Cash and cash equivalents 1,350 - 1,350
Receivables 5 - 5
--------- --------
Total current assets 1,355 - 1,355
Non-current assets
Investments 41 - 41
--------- --------
Total non-current assets 41 - 41
Total assets 1,396 - 1,396
========= ========
Current liabilities
Other payables 7 - 7
--------- --------
Total current liabilities 7 - 7
--------- --------
Total liabilities 7 - 7
Shareholders' equity
Share capital 203 - 203
Share premium account 1,225 (20) 1,205
Profit and loss account (39) - (39)
Other equity reserves - 20 20
--------- --------
Total shareholders' equity 1,389 - 1,389
--------- --------
Total liabilities and shareholders'
equity 1,396 - 1,396
========= ========
b) The financial information for the period ended 31 December 2005 has been
presented on the basis of compliance with IFRS. A reconciliation of equity at 31
December 2005 is set out below.
UK GAAP Effect of IFRS
(unaudited) transition (unaudited)
£'000 £'000 £'000
Current assets
Cash and cash equivalents 1,279 - 1,279
Receivables 3 - 3
--------- --------
Total current assets 1,282 - 1,282
Non-current assets
Investments - - -
--------- --------
Total non-current assets - - -
Total assets 1,282 - 1,282
========= ========
Current liabilities
Other payables 16 - 16
--------- --------
Total current liabilities 16 - 16
--------- --------
Total liabilities 16 - 16
Shareholders' equity
Share capital 203 - 203
Share premium account 1,225 (20) 1,205
Profit and loss account (162) - (162)
Other equity reserves - 20 20
--------- --------
Total shareholders' equity 1,266 - 1,266
--------- --------
Total liabilities and shareholders'
equity 1,282 1,282
========= ========
Adjustment in respect of share based payments
On Admission to AIM on 14 February 2005 the Company granted options to its
professional advisers to subscribe for 9,000,000 ordinary shares at 1p per share
at any time up to the fifth anniversary of Admission. The adjustment represents
the estimated fair value of the services received in consideration for the issue
of the options, measured at the date of grant. The recognition of additional
value in relation to the services received has been set against the Company's
share premium account on Admission.
8. Copies of the interim statement
Copies of the interim statement will be available from Smith & Williamson
Corporate Finance Limited, 25 Moorgate London EC2R 6AY.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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