Half Yearly Report

RNS Number : 6619K

Canisp PLC

23 December 2008

 



23 December 2008

Canisp plc 

('Canisp' or the 'Group')

Unaudited Interim Results

for the six month period ended 30 September 2008

Canisp (AIM:CN.) is pleased to present the Group's unaudited interim results for the six month period ended 30 September 2008.  A copy of these interim results is also available on Canisp's website www.canispplc.com. The Chairman's statement is set out in full below followed by the results.

Enquiries:

Nominated advisor and broker:
Andrew Chubb, Canaccord Adams Limited            tel: [phone]
John Bick, Hansard Group                                     tel: [phone]

www.canispplc.com

Chairman's statement:

I am pleased to present the Group's unaudited interim results for the six month period ended 30 September 2008.

Trading results

In the last annual accounts issued in June 2008, I reported on the competitiveness of the trading environment and on the price pressures faced by our core business. Our strategy remains to build customer relationships through improved administration and service and we remain focused on product innovation.  We offer a range of innovative telecom solutions including a Voice Over Internet Protocol ('VOIP') offering and we continue to seek new ways to service our customers' needs.

We remain committed to maintaining a very lean head office operation and overhead costs are in line with expectations. In the period under review, the Group recorded a loss before and after tax of £125,000 (2007: £197,000). No dividend is proposed.

Borrowings

The Group's reliance on bank borrowings continues to be carefully managed with the overdraft at the period end amounting to £215,000 (2007: £302,000).  On 5 December 2008 Corvus Capital Inc ('Corvus') notified the Company that it had disposed of its entire interest in the £1,600,000 assignable convertible loan facility to Poppy Development Limited ('Poppy'), a company incorporated in the British Virgin Islands. At Poppy's request, the loan may be capitalised in whole or in part through the issue of new ordinary shares at one penny per share. If the capitalisation does not occur by 31 December 2009, the loan and any interest accrued at two per cent per annum, will be repayable on demand although the loan, together with accrued interest will remain capable of being capitalised on the above terms. 

Outlook

The ability to drive down overheads further remains limited but the Group benefits from a very low cost base for a listed public company and we continue to maintain a very tight control of costs. The work undertaken to improve the service range and administrative support, together with the development of new product offerings, continues and we also continue to review strategic solutions to the recovery of shareholder value.

Mike Hirschfield

Chairman

22 December 2008  CANISP PLC

CONSOLIDATED INCOME STATEMENT

FOR THE PERIOD ENDED 30 SEPTEMBER 2008

	Note	Unaudited six months ended 30 September 2008	Unaudited six months ended 30 September 2007	Audited year ended 31 March  2008
		£'000	£'000	£'000
Sales revenue		1,286	1,306	2,593
Cost of sales		(953)	(974)	(1,879)
Gross profit		333	332	714
Administrative expenses		(398)	(409)	(697)
Amortisation of intangibles		(96)	(95)	(194)
Total administrative expenses		(494)	(504)	(891)
Unrealised fair value gain on financial liabilities at fair value through profit or loss		48	-	31
Loss from operations		(113)	(172)	(146)
Finance income Finance costs		8 (20)	- (25)	19 (60)
Loss for the period before taxation		(125)	(197)	(187)
Taxation expense		-	-	-
Loss for the period		(125)	(197)	(187)
Basic and diluted loss per ordinary share	4	(0.12)p	(0.19)p	(0.18)p

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIOD ENDED 30 SEPTEMBER 2008

	Share capital	Share premium	Other reserves	Profit and loss account	Total equity
	£'000	£'000	£'000	£'000	£'000
At 1 April 2007	1,054	4,017	129	(6,573)	(1,373)
Loss for the year	-	-	-	(187)	(187)
At 31 March 2008 (audited)	1,054	4,017	129	(6,760)	(1,560)
Loss for the period	-	-	-	(125)	(125)
At 30 September 2008 (unaudited)	1,054	4,017	129	(6,885)	(1,685)

CONSOLIDATED BALANCE SHEET

AS AT 30 SEPTEMBER 2008

		Unaudited 30 September 2008	Unaudited 30 September 2007	Audited 31 March 2008
		£'000	£'000	£'000
ASSETS
Non-current assets
Intangible assets		560	755	656
Property, plant and equipment		9	15	11
		569	770	667
Current assets
Trade and other receivables	5	261	315	340
Total current assets		261	315	340
Total assets		830	1,085	1,007
EQUITY AND LIABILITIES
Current liabilities
Bank overdraft Bank loans Other loans Convertible loans Trade and other payables	7 6	215 - - 1,600 700	302 117 756 528 873	162 - 1,041 528 788
Financial liabilities at fair value through profit or loss		-	-	48
Total current liabilities and total liabilities		2,515	2,576	2,567
Equity
Share capital	8	1,054	1,054	1,054
Share premium		4,017	4,017	4,017
Other reserves		129	129	129
Profit and loss account		(6,885)	(6,691)	(6,760)
Total equity attributable to equity holders		(1,685)	(1,491)	(1,560)
Total equity and liabilities		830	1,085	1,007

CONSOLIDATED CASH FLOW STATEMENT

FOR THE PERIOD 30 SEPTEMBER 2008

		Unaudited six months ended  30 September 2008	Unaudited six months ended 30 September 2007	Audited year ended 31 March 2008
		£'000	£'000	£'000
Cash flows from operating activities
Loss after taxation		(125)	(197)	(187)
Amortisation of intangibles		96	95	194
Depreciation		2	-	4
Finance cost		20	25	60
Finance income		(8)	-	(19)
Decrease/(Increase) in trade and other receivables		79	1	(24)
(Decrease)/Increase in trade and other payables		(88)	54	(30)
Unrealised gain on financial liabilities at fair value through profit or loss		(48)	-	(31)
Net cash outflow from operating activities		(72)	(22)	(33)
Cash flows from investing activities
Purchase of property, plant and equipment		-	(15)	(15)
Finance cost		(20)	(25)	(60)
Finance income		8	-	19
Net cash used in investing activities		(12)	(40)	(56)
Cash flows from financing activities
New loans		31	128	412
Repayment of loans		-	(208)	(325)
Net cash inflow/(outflow) from financing activities		31	(80)	87
Net change in cash and cash equivalents		(53)	(142)	(2)
Cash and cash equivalents at beginning of period		(162)	(160)	(160)
Cash and cash equivalents at end of period		(215)	(302)	(162)

NOTES TO THE INTERIM REPORT 

FOR THE PERIOD ENDED 30 SEPTEMBER 2008

1 GENERAL INFORMATION

The information for the period ended 30 September 2008 does not constitute statutory accounts as defined in Section 240 of the Companies Act 1985. The figures for the year ended 31 March 2008 have been extracted from the 2008 statutory financial statements. The auditors' report on those accounts was unqualified and did not contain a statement under section 237(2) of the Companies Act 1985.

2 ACCOUNTING POLICIES

BASIS OF PREPARATION

This interim financial report has been prepared under the historical cost convention. 

The principal accounting policies of the Group are consistent with those detailed in the 31 March 2008 financial statements.

GOING CONCERN

The Directors have prepared detailed cash flow forecasts.  Following the transfer of the assignable, convertible loan of £1.6 million (the 'Convertible Loan') from Corvus Capital Inc. (Corvus) to Poppy Development Limited ('Poppy'), the Directors secured confirmation from Poppy, that they would not seek repayment of the Convertible Loan within twelve months whilst the Company remains trading as normal.  In addition, Poppy have confirmed that they are willing to consider providing further facilities to the Company in the future if required. The Board believe that the forecasts supported by the discussions held with Poppy, together with existing bank facilities, demonstrate that the Group has sufficient finance facilities available to allow it to continue in business.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next accounting period are discussed below.

Impairment of assets

The Group conducts impairment reviews of assets when events or changes in circumstances indicate that their carrying amounts may not be recoverable annually, or in accordance with the relevant accounting standards. An impairment loss is recognised when the carrying amount of an asset is lower than the greater of its net selling price or the value in use. In determining the value in use, management assesses the present value of the estimated future cash flows expected to arise from the continuing use of the asset and from its disposal at the end of its useful life. Estimates and judgments are applied in determining these future cash flows and the discount rate.  The carrying value of customer bases has been considered by the directors in relation to their net selling price and they have formed the view no further impairment provision is required at 30 September 2008.

Critical judgements in applying the Group's accounting policies

The directors in applying the accounting policies, which are described above, consider that the most significant judgement they have had to make is the fair value of the convertible loan and whether any impairment provision is required against the customer bases.

3 SEGMENTAL REPORTING

(a) By business segment (Primary segment)

As defined under International Accounting Standard 14 (IAS 14) the only material business segment the Group has is that of telecommunications.

(b) By Geographical Segment (Secondary segment)

Under the definitions contained in IAS 14 the only material geographic segment the Group operates in is the United Kingdom.

4 LOSS PER SHARE  

The calculation of the basic loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. The impact of the convertible loan on the loss per share is anti-dilutive.

	Unaudited six months ended 30 September 2008	Unaudited six months ended 30 September 2007	Audited year ended 31 March 2008
Loss for the period (£'000)	(125)	(197)	(187)
Weighted average number of 1p ordinary shares	105,397,275	105,397,275	105,397,275
Loss per share - basic and diluted	(0.12)p	(0.19)p	(0.18)p

5 TRADE AND OTHER RECEIVABLES

	Unaudited  30 September 2008	Unaudited  30 September 2008	Audited  31 March  2008
	£'000	£'000	£'000
Trade receivables	238	284	166
Prepayments and accrued income	23	31	174
Trade and other receivables, net	261	315	340

Trade and other receivables are usually due within 30 - 60 days and do not bear any effective interest rate.

The fair value of these short term financial assets is not individually determined as the carrying amount is a reasonable approximation of fair value.

6 TRADE AND OTHER PAYABLES

	Unaudited 30 September 2008	Unaudited  30 September 2008	Audited  31 March 2008
	£'000	£'000	£'000
Trade and other payables	160	204	270
Social security and other taxes	56	45	55
Other creditors	85	232	176
Accruals and deferred income	399	392	287
Trade and other payables	700	873	788

The fair value of trade and other payables has not been disclosed as, due to their short duration, management considers the carrying amounts recognised in the balance sheet to be a reasonable approximation of their fair value.

7 CONVERTIBLE LOAN

The financial liability at fair value through profit or loss is a convertible loan, which is convertible at the option of the holder into a fixed number of ordinary shares in the Company.  In May 2008 all of the outstanding debt amounting to £1,600,000 was consolidated into a single, assignable convertible loan facility. The loan may be capitalised in whole or in part through the issue of new ordinary shares at one penny per share. If the capitalisation does not occur by 31 December 2009, the loan and any interest accrued at two per cent per annum, will be repayable on demand although the loan, together with accrued interest will remain capable of being capitalised on the above terms. 

The conversion option meets the definition of equity as the loan can be converted into a fixed number of shares. As the market value of the Company's shares in May 2008 was below par value the directors do not consider the value of this option to be material to the financial statements. 

8 SHARE CAPITAL

	Unaudited 30 September 2008	Unaudited  30 September 2007	Audited 31 March  2008
	£'000	£'000	£'000
Authorised
500,000,000 ordinary shares of 1p	5,000	5,000	5,000
Allotted, issued and fully paid
105,397,275 (30 September 2007 and 31 March 2008: 105,397,275) ordinary shares of 1p	1,054	1,054	1,054

 

END

 

 

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