Annual Results

RNS Number : 9558S

Canisp PLC

28 May 2009

 

Canisp plc

('Canisp' or 'the Company' or 'the Group')

Preliminary results for the year ended 31 March 2009

Canisp (AIM: CN.) today announces the Group's audited results for the year ended 31 March 2009. During the year in review, the Group recorded a loss on continuing operations of £41,000 (2008: loss of £136,000) and a trading loss on discontinued operations of £46,000 (2008: loss of £51,000). The Group recorded a profit on the disposal of the discontinued operations of £274,000, bringing the result after taxation attributable to equity holders of the Company to a profit of £187,000 (2008: loss of £187,000). No dividend is proposed.

Over the last few years we worked hard in a competitive and challenging trading environment to stabilise the core telecoms business of The Airtime Group ('TAG') by focussing on product innovation and customer service. We successfully maintained a low overhead base and very efficient head office operation and the overall results of the Group steadily improved. However, Canisp suffered from a lack of funding to allow it to grow through acquisition, partly through poor sentiment but also because for much of the recent past the Company's share price has been significantly below par. During this period we were open to strategic solutions to recover shareholder value and, at the end of 2008, we received an approach from Opal Telecom Limited which the Board believed to be in the best interests of the shareholders as a whole and which led to the disposal of the underlying business of TAG which was completed on 31 March 2009.

The Board's task now is to prepare the Company for a new acquisition and that is why there are some administrative and structural proposals to be considered at the Annual General Meeting ('AGM') relating to the adoption of new Articles of Association and a restructuring of the Company's share capital base. Together with the fulfilment of some post completion obligations in relation to the disposal of the TAG business, these proposals will leave the Company in a clean position to seek a new venture.

Board changes

On completion of the disposal of the TAG business, referred to above, Mark Shrosbree, Tim Moss and John Maundrell all stepped down from the Board. I would like to thank all three for their contribution to the Company and wish them well in their other business interests.

Outlook

The disposal of the TAG business has divested the Company of all of its trading business and so Canisp is now treated as an investing company for the purposes of the AIM Rules. The Company's investing strategy is to invest in technology companies and we will initially consider opportunities in the UK and Europe, though investments in other sectors may also be considered. We will report on progress as appropriate. This investing strategy was approved at the general meeting held on 30 March 2009. A tight control of costs will be maintained throughout this review period.

Pursuant to the AIM Rules, the Company will be required to make an acquisition or acquisitions which constitute a reverse takeover in accordance with Rule 14 of the AIM Rules or otherwise implement the investing strategy approved at the general meeting to the satisfaction of the London Stock Exchange within 12 months of having received the consent of its shareholders, failing which, the Company's trading facility on the AIM market will be suspended for a further period of six months followed by cancellation of the Company's AIM listing.

Annual general meeting

Notice is given that the annual general meeting (AGM) of the members of the Company will be held at the offices of Fladgate LLP at 25 North Row, London, W1K 6DJ on 23 June 2009 at 11:00 a.m.  The AGM Notice, form of proxy and annual report and accounts will today be posted to all shareholders, and will shortly be available for download from the Company's website at www.canispplc.com 

Mike Hirschfield

Chairman

28 May 2009

Enquiries:

Nominated advisor and broker:
Andrew Chubb, Canaccord Adams Limited                       Tel:                        [phone]

John Bick, Hansard Group                                                    Tel:                        [phone]

CONSOLIDATED INCOME STATEMENT

For the year ended 31 March 2009

			2009	2008
	Note		£'000	£'000
Revenue			-	-
Cost of sales			-	-
Gross profit			-	-
Administrative expenses			(156)	(171)
Unrealised fair value gain on financial liabilities at fair value through profit and loss			48	31
Loss from operations			(108)	(140)
Finance income			244	19
Finance costs			(177)	(15)
Loss before taxation			(41)	(136)
Taxation	2		-	-
Loss for the year from continuing activities			(41)	(136)
Trading loss from discontinued operations			(46)	(51)
Profit on disposal of discontinued operations	4		274	-
Profit from discontinued operations	4		228	(51)
Profit/(loss) after taxation and loss attributable to the equity holders of the company			187	(187)
Profit/(loss) per ordinary share (pence)
Basic and diluted	3
Continuing operations			(0.04p)	(0.13p)
Discontinued operations			0.21p	(0.05p)
			0.17p	(0.18p)

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

At 31 March 2009

	Share capital	Share premium	Other reserves	Retained  earnings	Total  equity
	£'000	£'000	£'000	£'000	£'000
At 1 April 2007	1,054	4,017	129	(6,573)	(1,373)
Loss for the year and total recognised income and expenses for the year	-	-	-	(187)	(187)
At 31 March 2008	1,054	4,017	129	(6,760)	(1,560)
Issue of share capital	161	-	-	-	161
Reserves transfer	-	-	(129)	129	-
Profit for the year and total recognised income and expenses for the year	-	-	-	187	187
At 31 March 2009	1,215	4,017	-	(6,444)	(1,212)

Following the convertible loan agreement entered into on 22 May 2008 (note 5), £129,000 recognised in previous years in respect of the capitalisation of other loans which now form part of this agreement has been transferred from other reserves into retained earnings.

CONSOLIDATED BALANCE SHEET

			2009	2008
	Note		£000	£000
ASSETS
Non-current assets
Intangible assets			-	656
Property, plant and equipment			-	11
			-	667
Current assets
Cash and cash equivalents			264	-
Trade and other receivables			347	340
Total current assets			611	340
Total assets			611	1,007
LIABILITIES
Current liabilities
Bank overdrafts			-	162
Other loans	5		-	1,041
Convertible loans	5		1,383	528
Trade and other payables			440	788
Financial liabilities at fair value through profit or loss			-	48
Total current liabilities			1,823	2,567
Total liabilities			1,823	2,567
EQUITY
Share capital	6		1,215	1,054
Share premium			4,017	4,017
Other reserves			-	129
Retained earnings			(6,444)	(6,760)
Total equity attributable to equity holders of the Company			(1,212)	(1,560)
Total equity and liabilities			611	1,007

CONSOLIDATED CASH FLOW STATEMENT

For the year ended 31 March 2009

			2009	2008
			£000	£000
Cash flows from operating activities
Continuing operations
Loss after taxation			(41)	(136)
Unrealised fair value gain on financial liabilities at fair value through profit and loss			(48)	(31)
Finance costs			177	15
Bank interest receivable			(11)	(19)
Net gain on modification of convertible loan			(233)	-
Increase in trade and other payables			43	34
			(113)	(137)
Finance costs			-	(15)
Net cash outflow from operating activities from continuing operations			(113)	(152)
Discontinued operations
Net cash (outflow)/inflow from operating activities from discontinued operations			(96)	59
Net cash outflow from operating activities			(209)	(93)
Cash flows from investing activities
Continuing operations
Finance income			11	19
Net cash inflow from investing activities from continuing operations			11	19
Discontinued operations
Net cash inflow/(outflow) from investing activities from discontinued operations			593	(15)
Net cash inflow from investing activities			604	4
Cash flows from financing activities
Continuing operations
New loans			31	412
Repayment of loans			-	(325)
Net cash inflow from financing activities from continuing operations			31	87
Discontinued operations
Net cash inflow from financing activities from discontinued operations			-	-
Net cash inflow from financing activities			31	87
Net change in cash and cash equivalents			426	(2)
Cash and cash equivalents at beginning of period			(162)	(160)
Cash and cash equivalents at end of period			264	(162)

1             ACCOUNTING POLICIES

Basis of Preparation

The group financial statements have been prepared under the historical cost convention except for embedded derivatives, which are measured at fair value, and in accordance with International Financial Reporting Standards as adopted by the European Union (IFRSs). The Company's shares are listed on the AIM market of the London Stock Exchange.  

The principal accounting policies of the Group, which have been applied consistently, are set out in the annual report and financial statements.

Going concern

On 31 March 2009, the Group disposed of certain trade and certain assets. The Company is now treated as an investing company for the purposes of the AIM rules and it is seeking new investment opportunities.

The Directors have prepared cash flow forecasts for the period ending 30 June 2010, which assume that the Group will not acquire new businesses in that period. The Directors have also secured confirmation from the holder of the convertible loan ('convertible loan holder') that it will not seek repayment of the debt due to it within the next twelve months and, in addition, that a further working capital facility of up to £100,000 will be provided if required. The forecasts supported by the agreement and facility from the convertible loan holder, demonstrate that the Group has sufficient finance facilities available to allow it to continue in business for a period of at least twelve months from the date of approval of these financial statements. Accordingly, the financial statements have been prepared on a going concern basis.

2        TAXATION

There is no tax charge for the year (2008: £nil).

Unrelieved tax losses of approximately £5.1 million (2008: £5.1 million) remain available to offset against future taxable trading profits. The unprovided deferred tax asset at 31 March 2009 is £1,428,000 (2008: £1,560,000) which has not been provided on the grounds that it is uncertain when taxable profits will be generated by the Group to utilise those losses.  

The tax assessed for the period differs from the standard rate of corporation tax in the UK as follows:

		2009	2009	2008	2008
		£'000	%	£'000	%
(Loss)/profit before taxation	`
Continuing operations		(41)		(136)
Discontinued operations		228		(51)
		187		(187)
Profit/(loss) multiplied by standard rate of corporation tax in the UK		52	28	(56)	(30)
Effect of:
Expenses not deductible for tax purposes		26	14	2	1
Capital allowances in excess of depreciation		(5)	(3)	(10)	(5)
Income not assessable for tax		(68)	(36)	(9)	(5)
Other short-term timing differences		(7)	(4)
Deferred tax asset not recognised		2	1	73	39
Total tax charge for year		-	-	-	-

3             LOSS PER SHARE

The calculation of the basic loss per share is calculated by dividing the consolidated loss attributable to the equity olders of the Company by the weighted average number of ordinary shares in issue during the year.

		2009	2008
		£'000	£'000
(Loss)/profit attributable to equity holders of the Company
Continuing operations		(41)	(136)
Discontinued operations		228	(51)
		187	(187)

		2009	2008
		Number	Number
Weighted average number of ordinary shares		108,538,782	105,397,275

The impact of the convertible loan on the earnings/(loss) per share is anti dilutive.

On 18 May 2009 30,000,000 ordinary shares were issued in the Company following the conversion of £300,000 of the convertible loan (note 7). If these shares had been in issue throughout the year ended 31 March 2009, the weighted average number of shares would have been 108,838,782. There would have been no change in the earnings/(loss) per share as disclosed in the income statement as a result of this share issue.

4             PROFIT/(LOSS) FROM DISCONTINUED OPERATIONS

On 31 March 2009, the Group disposed of certain trade and certain assets for a gross consideration of £652,000 plus deferred consideration of £335,000. Of the deferred consideration, £235,000 relates to trade receivables and £100,000 is held in escrow and will be released to the Company on 31 March 2010 assuming that no valid claims are made by the purchaser under the indemnities and warranties included in the sale and purchase agreement. Both amounts are included in other receivables. The balance due on trade receivables has been assessed for impairment. The £100,000 held in escrow has not been impaired as the Directors have no indication or expectation that claims will be made by the purchaser under the indemnities and warranties.

As this business represents the whole of the Group's telecommunications activities it is considered to be a discontinued operation. The results of the discontinued operation are analysed as follows:

		Year ended 31 March  2009	Year ended 31 March 2008
		£'000	£'000
Trading loss of discontinued operations		(46)	(51)
Profit on disposal of trade and assets		274	-
		228	(51)
The results of discontinued operations were as follows:
		Year ended 31 March  2009	Year ended 31 March 2008
		£'000	£'000
Revenue		2,673	2,593
Cost of sales		(1,910)	(1,879)
Gross profit		763	714
Administrative expenses		(776)	(720)
Loss from operations		(13)	(6)
Finance costs		(33)	(45)
Loss for the period		(46)	(51)
The loss on disposal of certain trade and assets can be summarised as follows:
			Total
			£'000
Net assets disposed of
Intangible assets			464
Property, plant and equipment			6
Trade and other receivables, net of a provision of £97,000			235
Trade and other payables			(51)
			654
Profit on disposal of trade and assets			274
Consideration			928
Satisfied by:
Cash and cash equivalents			652
Deferred cash consideration at fair value			335
Transaction costs settled in cash			(59)
			928

5          CONVERTIBLE LOAN and other loans

At 31 March 2008, a convertible loan of £528,000 and other loans of £1,041,000 were due to Corvus Capital Inc. ('Corvus'), which was a substantial shareholder in the Company. There were no fixed terms of repayment for these loans and no interest was payable. The convertible loan was convertible at the option of the holder into a variable number of shares in the Company. An embedded derivative of £48,000 was held at 31 March 2008 in respect of this conversion option.

During April 2008 the Company received a further loan of £31,000 from Corvus, increasing the total amount owed to £1,600,000. On 22 May 2008 the Company agreed with Corvus that Corvus may convert all or part of the amount owed up to the amount of £1,600,000. The option may be exercised by the holder to convert the loan at any time at 1p per share. If the conversion does not occur by 31 December 2009, the loan will become interest bearing at two percent per annum, and will be repayable on demand. The loan will remain capable of being converted after 31 December 2009 on the above terms. This conversion option represents equity however, the option has not been recognised as the market value of the Company's shares at the grant date of the option in May 2008 was below par and, therefore, the directors do not consider the value of this option to be material to the financial statements.

The revision of the repayment terms attached to the convertible loan in May 2008 represents a substantial modification of this agreement. Accordingly, the financial liability of £1,600,000 held at the date of the revision has been derecognised and the fair value of the revised convertible loan, being £1,367,000 has been recognised in the financial statements. The net gain of £233,000 in respect of this modification has been recognised in the income statement within finance income. The convertible loan has subsequently been measured at amortised cost. On 19 January 2009, £161,500 of the convertible loan was converted into ordinary shares in the Company at par (note 6). After the interest expense on this loan the balance at 31 March 2009 is £1,382,500.

During the year ended 31 March 2009 the convertible loan was assigned by Corvus to an unrelated company.

6           share capital

		2009	2008
		£'000	£'000
Authorised
500,000,000 ordinary shares of 1p		5,000	5,000
Allotted, issued and fully paid
121,547,275 (105,397,275) ordinary shares of 1p		1,215	1,054

The movement in share capital is analysed as follows:

		Ordinary shares
		No.	£'000
Allotted, issued and fully paid
At 1 April 2008		105,397,275	1,054
Issue of shares		16,150,000	161
At 31 March 2009		121,547,275	1,215

On 19 January 2009 16,150,000 ordinary shares of 1p each were issued at par following the conversion of £161,500 of the convertible loan in accordance with the terms of a convertible loan facility agreement entered into in May 2008 (note 5).

7          post balance sheet events

On 18 May 2009 the holder of the convertible loan converted at par £300,000 of the loan into 30,000,000 ordinary shares of 1p each in the Company. The shares were then placed with unconnected third parties.

8          publication of non-statutory accounts

The financial information set out in this preliminary announcement does not constitute statutory accounts as defined in section 240 of the Companies Act 1985.

The balance sheet at 31 March 2009 and consolidated income statement, consolidated statement of changes in equity, consolidated cash flow statement and associated notes for the year then ended have been extracted from the Group's 2009 financial statements upon which the auditors opinion is unqualified.

 

END

 

 

FR ILFIFELITFIA