Year ended 31 May 2006

Core Business PLC (The) 24 November 2006 PRESS RELEASE For immediate release: 24 November 2006 The Core Business: Results - Year ended 31 May 2006 The Core Business PLC, ('the Company') the innovative beauty brand business, today announced its results for the year to 31 May 2006. Highlights: â€¢Successful listing on AIM and raising of Â£235,000 after expenses. â€¢Major consultancy projects undertaken for a range of personal, skin and hair care brands and lifestyle brands including: â€¢Creation of a commercial and marketing strategy for Imedeen, the oral beauty supplement owned by Dutch pharmaceutical company Ferrosan Ltd â€¢Development of a business proposition for a male grooming range for Ministry of Sound; â€¢Development and launch of a range of professional hair care products for Racoon International; â€¢Creation and development of hair care brands for Lucinda Ellery, Clipso and a skin care brand for Coco Ribbon; â€¢Undertaking market research and preparing an entry plan to the UK market for Black Up, a premium ethnic cosmetics company and developing a marketing, communication and retail strategy for cosmetics brand Sleek International; â€¢Overseeing and guiding the re-launch of Manicare, a nail treatment and beauty accessory brand, and introducing its ranges to major retailers including Boots, Superdrug and Ideal World TV; and â€¢Distribution secured for sun care brand Blockhead (in which The Core Business has an equity stake) through World Duty Free, www.mankind.co.uk and a distributor in Ireland. Commenting on the results and outlook, Mark Watson-Mitchell, Chairman, said: 'The successful AIM listing and fundraising has taken The Core Business to a new stage in its development, the benefits of which will become apparent over the next year or so. The entire flotation process has helped to strengthen significantly the management's ability to secure new business. And the heightening of the Company's corporate profile has boosted the number of companies seeking its help in extending their own brands through the introduction of ranges of personal care, skin care and grooming products. 'This year is already showing enough progress to give the Board confidence in predicting a beneficial outcome to end May 2007.' ENDS For further information, please contact: The Core Business PLC www.thecorebusiness.co.uk Stirling Murray, Chief Executive 020 7483 4300 Aquila Financial Ltd www.aquila-financial.com Peter Reilly 020 7202 2601 Notes to Editors The Core Business was established in May 2004 by Stirling Murray to create, develop, launch and distribute personal care and beauty brands. It also provides consultancy and brand management services. The Company was listed on AIM in March 2006 under the ticker 'CORE.' Financial results BALANCE SHEET YEAR ENDED 31 MAY 2006 2006 2005 Â£ Â£ ----------------------------- --------- --------- Assets Non-current assets Property, plant and equipment 740 686 Financial assets 10,578 - Investment in associate company - 1,714 ----------------------------- --------- --------- 11,318 2,400 Current Assets Trade receivables 19,156 12,033 Other current assets 26,815 10,616 Cash and cash equivalents 401,085 11,123 ----------------------------- --------- --------- 447,056 33,772 ----------------------------- --------- --------- Total assets 458,374 36,172 ----------------------------- --------- --------- Equity and liabilities Equity attributable to the Company's equity holders Share capital 201,383 100 Share premium 337,719 - Retained earnings (132,245) 5,224 ----------------------------- --------- --------- 406,857 5,324 Current liabilities Trade and other payables 51,517 14,092 Current tax payable - 16,756 ----------------------------- --------- --------- Total liabilities 51,517 30,848 ----------------------------- --------- --------- Total equity and liabilities 458,374 36,172 ----------------------------- --------- --------- PROFIT AND LOSS ACCOUNT YEAR ENDED 31 MAY 2006 2006 2005 Â£ Â£ ----------------------------- --------- --------- Turnover Consultancy fees 122,157 135,510 Overhead costs Administration costs 195,540 34,946 Staff costs 60,680 13,241 Depreciation 541 343 ----------------------------- --------- --------- (Loss)/profit from operations (134,604) 86,980 Interest income 2,964 - Impairment of investment in associate company (1,714) - ----------------------------- --------- --------- (Loss)/profit before tax (133,354) 86,980 Income tax expense 12,190 (16,756) ----------------------------- --------- --------- (Loss)/profit for the year (121,164) 70,224 ----------------------------- --------- --------- (Loss) / Earnings per share Basic (0.66 pence) 0.70 pence Diluted (0.66 pence) 0.70 pence STATEMENT OF CHANGES IN EQUITY YEAR ENDED 31 MAY 2006 Share Capital Share Premium Retained Total Earnings Â£ Â£ Â£ Â£ ----------------------- ------- ------- ------- ------- Balance at 18 May 2004 2 - - 2 Changes in equity for the year to 31 May 2005 Issue of share capital 98 - - 98 Profit for the year - - 70,224 70,224 Interim dividends paid - - (65,000) (65,000) ----------------------- ------- ------- ------- ------- Balance as at 31 May 2005 100 - 5,224 5,324 Changes in equity for the year to 31 May 2006 Loss for the year - - (119,450) (119,450) Associate company equity movement - - (1,714) (1,714) ----------------------- ------- ------- ------- ------- - - (121,164) (121,164) Credit on issue of warrants - - 5,000 5,000 Interim dividends paid - - (21,305) (21,305) ----------------------- ------- ------- ------- ------- Total recognised income and expense for the year - - (137,469) (137,469) Issue of share capital 201,283 447,822 - 649,105 Issue costs - (110,103) - (110,103) ----------------------- ------- ------- ------- ------- Balance as at 31 May 2006 201,383 337,719 (132,245) 406,857 ----------------------- ------- ------- ------- ------- CASH FLOW STATEMENT TO 31 MAY 2006 2006 2005 Â£ Â£ ----------------------------- --------- --------- Cash flows from operating activities Cash generated from operating activities (102,777) 78,766 Interest paid - - Tax paid (16,749) - ----------------------------- --------- --------- (119,526) 78,766 Cash flows from investing activities Purchases of property, plant and equipment (595) (1,029) Investment in associate company - (1,714) Investment in financial asset (10,578) - Interest received 2,964 - ----------------------------- --------- --------- Net cash (used in) investment activities (8,209) (2,743) Cash flows from financing activities Net proceeds on issues of share 539,002 100 Dividends paid (21,305) (65,000) ----------------------------- --------- --------- Net cash (used in)/from financing activities 517,697 (64,900) Net increase/(decrease) in cash and cash equivalents 389,962 11,123 Cash and cash equivalents at beginning of year 11,123 - ----------------------------- --------- --------- Cash and cash equivalents at end of year 401,085 11,123 ----------------------------- --------- --------- Bank balances and cash 401,085 11,123 ----------------------------- --------- --------- Presentation of financial statements The financial statements of The Core Business PLC have been prepared in accordance with International Financial Reporting Standards (IFRS), IFRIC interpretations endorsed by the European Union and with those parts of the Companies Act 1985 applicable to companies reporting under IFRS. These financial statements have been prepared under the historic cost convention. The preparation of financial statements in conformity with generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates are based on management's best knowledge of the amount, event or actions, actual results ultimately may differ from those estimates. Accounting policies The principal accounting policies adopted in the preparation of these financial statements are set out below. Basis of preparation These financial statements are for the year ended 31 May 2006 and are covered by IFRS 1, 'First-time Adoption of International Accounting Standards'. The financial statements have been prepared in accordance with IFRS standards. The policies set out below have been consistently applied to all the periods presented. The Company financial statements were prepared in accordance with UK Generally Accepted Accounting Principles (GAAP) until 31 May 2005. GAAP differs in some areas from IFRS. In preparing The Core Business PLC's 2006 financial statements, management has amended certain accounting and valuation methods applied in the GAAP financial statements to comply with IFRS. The comparative figures in respect of year end 31 May 2005 have been restated to reflect these adjustments. Revenue recognition Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services provided in the ordinary course of the Company's activities. Revenue derived from the Company's principal activities (which is shown exclusive of applicable sales taxes, where applicable) is recognised as follows: Consultancy fees are recognised as income in the accounting period in which the consultancy is provided. Interest income is accrued on a time basis, by reference to the principal outstanding and at the interest rate applicable. Foreign currencies Transactions in foreign currencies are initially recorded at the rates of exchange prevailing on the dates of the transactions. Monetary assets and liabilities denominated in such currencies are retranslated at the rates prevailing on the balance sheet date. Profits and losses arising on exchange are included in the net profit or loss for the year. Taxation The charge for current tax is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill (or negative goodwill) or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the tax profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, and interest in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is calculated at the rates that are expected to apply when the asset or liability is settled. Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis. Property, plant and equipment Office equipment is stated at cost less accumulated depreciation. Depreciation is charged so as to write off the cost or valuation of assets over their estimated useful lives, using the straight-line method, on the following basis: Office equipment 33.33% The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is great than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the income statement. Financial instruments The Company classifies its financial instruments in the following categories: at fair value through profit or loss, held to maturity, loans and receivables, and available-for-sale. The classification depends on the purpose for which the financial instrument was acquired. Management determines the classification of its financial instruments at initial recognition and re-evaluates this designation at each financial year end. When financial assets are recognised initially, they are measured at fair value, being the transaction price plus directly attributable transaction costs. Interest in associates The Company's interest in associates, being those entities over which it has significant influence and which are neither subsidiaries or joint ventures, is accounted for using the equity method of accounting. Under the equity method, the investment in an associate is carried in the balance sheet at cost plus post acquisition changes in the Company's share of net assets of the associate, less distributions received and less any impairment in value of individual investments. The Company income statement reflects the share of the associate's results after tax. The Company's statement of changes in equity reflects the Company's share of its associate's changes in equity. Trade receivables Trade receivables are recognised initially at fair value less provision for impairment. A provision for impairment of trade receivables is established when there is objective evidence that the Company will not be able to collect all amounts due according to the original terms of receivables. The amount of the provision is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the income statement. Cash and cash equivalents Cash and cash equivalents are carried in the balance sheet at cost. Cash and cash equivalents comprise cash in hand, deposits held at call with banks, other short term, highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are included within borrowings in current liabilities on the balance sheet. Trade payables Trade payables are initially measured at fair value and are subsequently measures at amortised cost, using the effective interest rate method. Equity instruments Equity instruments are recorded at the proceeds received, net of direct issue costs. Dividend distribution Dividend distribution to the Company's shareholders is recognised as a liability in the Company's financial statements in the year in which they are approved. Provisions Provisions are recognised when the Company has a present obligation as a result of a past event which it is probable will result in an outflow of economic benefits that can be reasonably estimated. Share based payments The cost of warrant based equity transactions is measured with reference to the fair value of the services provided for which the warrant was granted and is recognised as an expense at the date on which the warrant becomes exercisable. Earnings per share Earnings 2006 2005 Â£ Â£ --------------------------------- --------- --------- Earnings for the purpose of basic earnings per share (net profit for the year) (121,164) 70,224 Earnings for the purpose of diluted earnings per share (121,164) 70,224 Number of shares 2006 2005 --------------------------------- --------- --------- Weighted average number of ordinary shares: --------------------------------- --------- --------- - for the purposes of basic earnings per share 18,392,429 10,000,000 - for the purposes of diluted earnings per share 18,392,429 10,000,000 The dilutive effect of share warrants issued during the year has been disregarded as the average market value of ordinary shares during the year did not exceed the exercise price of the warrants issued. Share capital 2006 2005 2006 2005 No. No. Â£ Â£ ----------------- ---------- --------- --------- --------- Authorised: Ordinary shares of 0.5 pence each (2005: Â£1 each) 200,000,000 1,000,000 1,000,000 1,000,000 ----------------- ---------- --------- --------- --------- Issued and fully paid Reported as at 1 June 10,000,000 2 100 2 Issue of shares 30,276,625 98 201,283 98 ----------------- ---------- --------- --------- --------- Reported as at 31 May 40,276,625 100 201,383 100 ----------------- ---------- --------- --------- --------- On 16 November 2005, each of the issued and unissued ordinary shares in the Company of Â£1 each were subdivided in to 100 ordinary shares of Â£0.01 each, all such shares ranking pari passu in all respects. On 10 February 2006, the Company issued 4,000 new ordinary shares of nominal value Â£0.01 each. On the same date: - each of the issued and unissued ordinary shares of 1 penny each were subdivided in to 1,000 ordinary shares of 0.001 pence each, all such shares ranking pari passu in all respects. - the Company issued 10,800,000 new ordinary shares of nominal value 0.001 pence each at an issue price of 1 penny each. - the Company issued 5,200,000 new ordinary shares of nominal value 0.001 pence each at an issue price of 2.5 pence each. - the Company issued 499 bonus shares for each ordinary share held in the Company. - the ordinary shares of the Company were consolidated whereby for every 500 ordinary shares of nominal value 0.001 pence held, one share at nominal value 0.5 pence was issued. On 8 March 2006, the Company raised Â£411,065 before expenses of Â£176,475 through the placing of 10,276,625 new ordinary shares of nominal value 0.5 pence each at a placing price of 4 pence each with institutional and other investors. This represented 26% of the enlarged issued share capital of the Company. At 31 May 2006 warrants over 6,500,000 ordinary shares were outstanding. Date of At Granted Exercised Forfeits At Exercise/ Exercise/Vesting grant 1 June /vested 31 May Share date price 2005 2006 From To -------------------------------------------------------------------------------- Warrants 8.03.06 - 6,500,000 - - 6,500,000 6.0p 8.03.06 08.03.11 -------------------------------------------------------------------------------- Share-based payment Warrants On 8 March 2006, upon admission to AIM, the Company issued for nil consideration warrants to subscribe for 6,500,000 ordinary shares at an exercise price payable on exercise of 6 pence per share. The terms of the warrant instrument provide that the warrants are exercisable at any time from admission to the fifth anniversary of admission. Of this total, warrants to subscribe for 300,000 ordinary shares were issued in consideration for services supplied to the Company in preparing for admission to AIM. The total market value of these services was Â£5,000. Expenses charged to the profit and loss in the year in respect of share based payments are as follows: 2006 2005 Â£ Â£ ----------------------------- --------- --------- Expense arising from issue of share option warrants 5,000 Nil ----------------------------- --------- --------- At 31 May 2006 none of the warrants had been exercised. Dividends paid 2006 2005 Â£ Â£ ----------------------------- --------- --------- Declared and paid during the year: Equity dividends on ordinary shares 21,305 65,000 ----------------------------- --------- --------- The interim dividends were all paid during the period up to admission to AIM and from distributable reserves as shown in the accounts included within the Admission Document. The Company did not file interim accounts at Companies House prior to payment of the dividends. This information is provided by RNS The company news service from the London Stock Exchange

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