Interim Results

Cube8 Group PLC 9 August 2001 CUBE 8.COM PLC Preliminary announcement of interim results for the six months to 30 June 2001 Key announcements Lucy Beverley, Finance Director, has been promoted to the Board as an executive director. Alistair Angus, co-founder of Pets Pyjamas, has been appointed as a non-executive director. Brian Hindson, former CEO of Cube8, has become a non-executive director. £1.82m cash at the bank and in hand as at 30 June 2001. Total capital and reserves £4.5m. The Group has disposed of its stake in PVC PR and decided to discontinue the activities carried out by Prizescratch.com Limited and Antique Street Limited. Report of the Chairman and Chief Executive Summary of operations I made a commitment in our full year report to continue to cut costs while pursuing fee-based revenues to reduce the company's cash burn rate. This will allow us greater resources and time to continue to nurture our investments. We have rationalised our portfolio and substantially cut our overheads in the past six months. I am sad to report the departure of our Chief Executive, Brian Hindson, who joined the company in September 2000 from the British Red Cross. Brian will remain with the company as a non-executive director. I am taking the role of Chief Executive, remaining as Chairman. My fellow director and a co-founder of the company, Steve Masters, is to become Chief Operating Officer with immediate effect. Lucy Beverley is joining the board as Finance Director. Alistair Angus, CEO and co-founder of Pets Pyjamas, joins the board as a non-executive director. Cash position As at 30 June 2001 Cube8 had £1.82m in the bank. I feel comfortable that with substantial recent savings and increased revenues from charges to some of the portfolio companies, Cube8 is in a secure position. We still hope for our main wins to come from capital appreciation of our investments, and we have been in discussion with several parties about investment in, or acquisition of, several of our companies. The portfolio The portfolio has been rationalised, allowing us to focus our financial and management resources on those investments where we see the largest upside potential, in particular the subsidiaries BorisCommerce and Freeloader.com. We recently announced the closure of Planet Three Limited, and we have disposed of our stake in PVC PR. Cube8 acquired Freeloader.com in May from Pure Entertainment Games plc for £ 600,000 in Cube8 shares. Freeloader is an exciting opportunity, and Cube8 has resurrected the online games service with the monthly cost base reduced from more than £400,000 to less than £70,000. Cube8 non-executive director Tarick Kreimeia has been appointed as managing director and is driving Freeloader forward. Freeloader recently signed up its millionth member, and is currently gaining 2,000 new members per day. Substantial advertising and sponsorship revenues have been generated, and the company plans to launch pay-per-play premium games later this year. There is further potential to separately exploit the patented Adloader(TM) and DigiCutter(TM) technologies. Project Boris is now up and running and the company has been renamed BorisCommerce Limited. The first 'Powered by BorisMart' shopping malls went live in July, and BorisMart continues to sign new retailers and new distributors. BorisMart proprietary technology allows site owners to easily add customised shopping malls with multiple retailers. BorisMart malls allow consumers to buy multiple items from multiple retailers in a single transaction, and have other advanced features. The shopping malls and further information on the technology can be accessed at http://www.boriscommerce.com. Other companies in our portfolio are also showing encouraging signs, some of which I will highlight here: - Dynamid completed its merger with ByBox, has raised a further round of funding, and has strong interest from several large multi-national fulfilment groups. - The Sticks has raised a further £270,000 of funding. - Room Service has raised a further round of funding. It has established a wine club and acquired an executive car service to add to its range of lifestyle services. - Itchy Media has signed a major sponsor for next year's books, and is currently finalising the 2002 editions of its guides for 18 cities in the UK. - Articulate Ads, in which we took a 10% stake earlier this year, is now well positioned to become the leading UK player for the use of articulated lorries for billboard style advertising. It has now signed more than 14,000 trailers, and expect the first major campaign later this year. Overall, for a predominantly young portfolio, there has been good progress and a low proportion of failed companies to date. Consultancy Our consultancy business is beginning to generate income by forming partnerships with companies that not only give us revenues, but which add value to the Cube8 network of companies. We provide management consultancy to Cyberbritain Holdings, and services to QMS and email marketing company Maildrive. We are starting to advise other companies on the design and creation of websites and on their online business development. Moving forward I said at the end of December that we planned to make no significant cash investments in the next six to twelve months, and this remains the case. Our goal is to concentrate on the continued development and growth of the 100%-owned BorisCommerce and Freeloader, while assisting other portfolio companies where we can. I believe that we have the time to develop our investments to maturity, and that this will deliver substantial value to our shareholders. Tim Dean-Smith, Chairman 6th August 2001. CUBE 8.COM PLC CONSOLIDATED PROFIT AND LOSS ACCOUNT for the six months ended 30 June 2001 The Cube8 Group plc Consolidated profit and loss account FOR SIX MONTHS ENDED 30 JUNE 2001 6 mths 6 mths Year ended ended ended 31 Dec 30 June 30 June 2000 2001 2000 (unaudited) (unaudited)(audited) £'000 £'000 £'000 Turnover 867 324 1,560 Cost of sales (480) (243) 670 Gross profit 387 81 670 Administrative expenses (2,129) (1,164) (4,284) Amounts written off investments - - (1,313) Operating loss (1,742) (1,083) (4,927) Profit on disposal of discontinued operation 17 - - Share of operating loss of associated (160) (59) (205) undertakings Loss on ordinary activities before interest (1,885) (1,142) (5,132) and tax Interest receivable and similar income 68 147 298 Loss on ordinary activities before tax (1,817) (995) (4,834) Tax - (49) (1) Loss on ordinary activities after taxation (1,817) (1,044) (4,835) Minority interest (186) 3 142 Retained loss (2,003) (1,041) (4,693) Loss per ordinary share (0.6p) (0.3p) (1.7p) Fully diluted loss per share (0.5p) (0.3p) (1.5p) The Group has no recognised gains or losses other than the loss for the period. THE CUBE8 GROUP PLC CONSOLIDATED BALANCE SHEET as at 30 June 2001 30 June 30 June 31 Dec 2001 2000 2000 (unaudited) (unaudited) (audited) £'000 £'000 £'000 Intangible fixed assets Goodwill 605 - - Tangible fixed assets Computers, fixtures and fittings 200 139 343 Investments 2,054 1,375 1,664 Investments in associates (78) - 3 2,176 1,514 2,010 Current assets Debtors 642 621 860 Cash at bank and in hand 1,824 7,009 3,996 2,466 7,630 4,856 Creditors: amounts falling due within one (769) (444) (1,206) year Net current assets 1,697 7,186 3,650 Total assets less current liabilities 4,478 8,700 5,660 Provisions for liabilities and charges - (117) (15) Net assets 4,478 8,583 5,645 Capital and reserve Called up share capital 4,180 3,510 3,530 Share premium account 9,371 9,317 9,371 Profit and loss account (9,051) (4,427) (7,048) Equity shareholders' funds 4,500 8,580 5,853 Minority interest (22) 3 (208) Total capital and reserves 4,478 8,583 5,645 Approved by the Board on 6th August 2001 and signed on its behalf by: LUCY BEVERLEY FINANCE DIRECTOR The Cube8 Group plc Consolidated cash flow statement FOR SIX MONTHS ENDED 30 JUNE 2001 6 mths 6 mths Year ended ended ended 31 Dec 30 June 30 June 2000 2001 2000 (unaudited) (unaudited)(audited) £'000 £'000 £'000 Net cash outflow from operating activities (1,750) (1,201) (2,809) Returns on investments and servicing of finance Interest received 68 128 300 Interest paid - - (2) Acquisitions Acquisition of and advances fixed asset (341) (900) (2,170) investments Acquisition of investments in associates - (700) (716) Loans and advances to associates (79) (250) (284) Purchases of tangible fixed assets (25) (121) (327) Acquisition of subsidiaries (18) - (14) Net overdraft acquired with subsidiaries - - (14) Disposals Cash balance of discontinued activity (28) - - Sales of tangible fixed assets 1 - - Financing Issue of equity shares - 9,975 9,975 (Decrease)/Increase in cash in the period (2,172) 6,931 3,918 For further information, please visit the Cube8 website http://www.cube8.com Or call Paul Munford, Communications Director 07970 673695 paulm@cube8.com

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