Final Results
Canisp PLC
28 May 2004
28 May 2004
CANISP PLC
PRELIMINARY RESULTS
INTRODUCTION
I am pleased to present the first set of figures since Canisp's incorporation on
12 August 2003. Canisp was admitted to the Alternative Investment Market (AIM)
in October, and at that time it stated its objective to be to build, largely
through acquisition, a group specialising in the provision of telecommunications
services.
On 18 December 2003, the Company announced the completion of its first
acquisition, that of The Airtime Group Limited (TAG), which trades under the
name World Telecom. TAG, which was incorporated in September 1999, owns a
number of telecommunications assets as well as a telecommunications licence and
fixed line and global calling card businesses. Earlier this year TAG achieved
Service Provider status with BT Wholesale.
RESULTS
The reported results cover the period from the Company's incorporation on 12
August 2003 to its chosen accounting reference date of 31 March 2004. From
incorporation to 18 December 2003 the Company had no trading activity, although
certain costs were incurred relating to its establishment, preparation for
admission to AIM and subsequent investigation of acquisition opportunities.
From 18 December 2003 to 31 March 2004 the results of TAG are consolidated with
those of the Company.
For the period under review the Company recorded a loss on ordinary activities
before taxation of £409,000 and a loss per share of 4.25p. No dividend is
recommended.
BUSINESS
TAG was loss-making at the time of its acquisition and, as anticipated, remains
so currently. There is additionally a central overhead to be absorbed. As a
consequence, the limited cash resources of the Company are carefully managed.
While TAG's overall trading performance to date has been broadly in line with
budget, the balance of its business has changed. Global calling cards remains a
core activity, with an expanded blue chip customer base and affinity
partnerships with HSBC, AMEX, Diners Club and BTI Hogg Robinson. However,
greater focus has been directed towards the SME fixed line sector. The
establishment of Wholesale Access services now enables TAG to offer savings to
customers on both line rental and call charges, effectively severing the link
between customer and BT, and to act as a 'one-stop-shop' for all the customer's
fixed line telephony. In conjunction with its existing family of calling card
products, Wholesale Access allows TAG to offer imaginative solutions to its
customers and to develop long term relationships with them.
Alongside the pursuit of organic growth, the Company is actively seeking
acquisitions in business areas complementary to that of TAG. In particular,
opportunities exist to purchase the fixed line customer bases of other
operators. Freed from the associated infrastructural overhead, these are
potentially available on an attractive multiple of monthly billings and could
therefore be expected to have an immediate beneficial impact on TAG's
profitability and cash flow. A number of specific targets have been identified,
and the Company is in advanced discussions with the vendors of certain of them.
OUTLOOK
Although expected to become cash positive during this calendar year, TAG's
business has yet to achieve profitability and careful control of the Group's
cash resources is required. Nevertheless, we remain on track and the
developments described above give the Directors grounds for cautious optimism as
to the year ahead. There is additionally every prospect of securing
significantly increased business through acquisition.
John Leat
Chairman
CONSOLIDATED PROFIT AND LOSS ACCOUNT
Note Period ended
31.3.04
£'000
Turnover
Acquisitions 371
Cost of sales (202)
Gross profit 169
Other administrative expenses (561)
Amortisation of goodwill (26)
Administrative expenses (587)
Operating loss pre amortisation of goodwill (392)
Amortisation of goodwill (26)
Operating loss
Continuing operations (217)
Acquisitions (201)
(418)
Net interest receivable 9
Loss on ordinary activities before taxation (409)
Taxation 2 -
Loss on ordinary activities after taxation and retained loss 4 (409)
Loss per ordinary share
- basic 3 (4.25)p
There were no recognised gains or losses other than the loss for the financial
period.
CONSOLIDATED BALANCE SHEET
Note 31.3.04
£'000
Fixed assets
Intangible assets 2,304
Tangible assets 82
2,386
Current assets
Debtors 367
Cash at bank and in hand 137
504
Creditors:
Amounts falling due within one year (1,243)
Net current liabilities (739)
Total assets less current liabilities 1,647
Creditors:
Amounts falling due after more than one year (63)
1,584
Capital and reserves
Called up share capital 125
Share premium 1,868
Profit and loss account (409)
Equity shareholders' funds 4 1,584
CONSOLIDATED CASH FLOW STATEMENT
Note Period ended
31.3.04
£'000
Net cash outflow from operating activities 5 (515)
Returns on investments and servicing of finance
Interest received 10
Interest paid (1)
Net cash outflow from returns on investments and service 9
of finance
Acquisitions
Purchase of subsidiary undertakings (1,336)
Net cash acquired with subsidiary undertakings 25
Net cash outflow from acquisitions (1,311)
Net cash outflow before financing (1,817)
Financing
Issue of shares 2,113
Share issue costs (120)
Capital element of hire purchase contracts (39)
Net cash inflow from financing 1,954
Increase in cash 6 137
NOTES TO THE PRELIMINARY ANNOUNCEMENT
1 BASIS OF PREPARATION
The preliminary announcement has been prepared under the historical cost
convention and in accordance with applicable accounting standards. The
financial statements have been prepared on a going concern basis as the
Directors have prepared cash flow forecasts which demonstrate that the Group has
sufficient finance facilities available to allow it to continue in business for
a period of twelve months from the date of approval of these financial
statements.
The principal accounting policies of the Group are set out in the Group's 2004
annual report.
2 TAXATION ON LOSS ON ORDINARY ACTIVITIES
There is no tax charge for the period. Unrelieved tax losses of £1,346,422
remain available to offset against future taxable trading profits. The tax
assessed for the period differs from the standard rate of corporation tax in the
UK as follows:
Period ended
31.3.04
£'000
Loss on ordinary activities before tax (409)
Loss on ordinary activities multiplied by standard rate of (123)
corporation tax in the UK of 30%
Effect of
Expenses not deductible for tax purposes 2
Depreciation in excess of capital allowances 26
Deferred tax asset not recognised 95
Current tax charge for period -
3 LOSS PER SHARE
The calculation of the basic loss per share is based on the loss on ordinary
activities after tax of £409,000 divided by the weighted average number of
ordinary shares in issue during the period of 9,633,624. The impact of the
share options on the loss per share is anti-dilutive.
4 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Period ended
31.3.04
£'000
Loss for financial period (409)
Issue of ordinary share capital 1,993
Net increase in shareholders' funds 1,584
Equity shareholders' funds brought forward -
Equity shareholders' funds carried forward 1,584
5 RECONCILIATION OF OPERATING LOSS TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES
Period ended
31.3.04
£'000
Operating loss (418)
Depreciation 80
Amortisation of goodwill 26
Increase in debtors (2)
Decrease in creditors (201)
Net cash outflow from operating activities (515)
6 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Period ended
31.3.04
£'000
Increase in cash for the period 137
Cashflow from capital element of hire purchase contracts 39
Change in net funds resulting from cashflows 176
Hire purchase contracts acquired with subsidiary undertakings (207)
(31)
Net funds brought forward -
Net debt carried forward (31)
7 ANALYSIS OF CHANGES IN NET DEBT
12 August Cash flow Non-cash 31 March
items 2004
2003
£'000 £'000 £'000 £'000
Cash at bank and in hand - 137 - 137
Hire purchase contracts - 39 (207) (168)
- 176 (207) (31)
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 consolidated balance sheet at 31 March 2004 and the consolidated profit and
loss account, consolidated cash flow statement and associated notes for the
period then ended have been extracted from the Group's 2004 statutory financial
statements upon which the auditors opinion is unqualified and does not include
any statement under Section 237 of the Companies Act 1985.
This information is provided by RNS
The company news service from the London Stock Exchange